Recently proposed mine safety and health legislation and regulations suggest that this trend will continue for the foreseeable future. That, coupled with new and recently proposed U.S. Securities and Exchange Commission (SEC) reporting rules, stemming from the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) enacted last year, place additional pressure on publicly held companies with U.S. mining and processing operations. Those requirements include periodic reporting of total number of S&S violations, total number of 104(b) orders, the total number of 104(d) citations and orders, the total number of 107(a) imminent danger orders, the total amount of proposed MSHA assessments for assessable violations, the total number of mining-related fatalities and a list of mines that have been notified by the agency of a potential pattern of violations, or a pattern of violations, as well as actions pending before the Commission.

The combination of these two forces (increased arbitrary enforcement and additional reporting requirements) has recently led to situations in which a poorly trained or confused MSHA inspector can, without cause or proper process, either wittingly or unwittingly, cause significant economic harm to a public mining company and its investors. The ramifications of such unwarranted actions can be profound, and it is these unfounded actions that are precisely what the due process protections afforded by the U.S. Constitution and embodied in our legal system are supposed to check.

For example, an inspector may improperly issue a closure order at a mine based simply on that inspector’s misperception that an imminent danger exists. If that mine is held by a publicly traded reporting company, under Dodd-Frank such orders must be reported to the SEC and thus to the marketplace, within days of issuance. Not only can the issuance of such an order (or any of the above-listed enhanced enforcement actions, for that matter) create both temporary production problems for a mine, but, more significantly, fear and confusion both in a marketplace comprised primarily of investors who are unfamiliar with this complicated process, and among the mine’s employees.  

We have observed first hand a number of unfortunate situations where hourly miners at operations receiving unwarranted elevated enforcement are upset and angered by the fundamental lack of understanding of their operations by the agency charged with protecting them. An extreme, but sadly not uncommon, example of this involves poorly trained MSHA inspectors attempting to direct miners to perform unsafe acts (related to roof control in non-working areas, for example) that would put the miners in harm’s way.

Complaints to MSHA about such reckless inspector behavior by both hourly miners and operators are all too often met with retaliatory enforcement and the subsequent additional meritless paper issued to the mine operators.  MSHA, as it should, holds mine operators to the highest standard of safe conduct. When those standards are not met, MSHA, as directed by the statute under which it operates, rightfully should take action against the company responsible for operating the mine. MSHA, however, must also hold its own inspectors to at least the same standards of conduct to which it holds mine operators. What is worse, MSHA has no effective, internal mechanism for achieving professionalism and accountability in the ranks of its own inspectorate.  Without such a mechanism MSHA inspectors may act in ways completely contrary to the mission they are required to carry out and those that have the courage to point that out oftentimes simply face additional punishment.

Moreover, under MSHA’s proposed new Pattern of Violations rule, in determining whether a pattern violator would be subject to severe increased enforcement MSHA would consider citations and orders as they are written by an inspector, rather than final orders, to determine whether an operator is a pattern violator. If adopted in its proposed form, this rule would eliminate an operator’s due process rights to be heard on the matter, while citations and orders written by a single inspector would effectively be considered law upon issuance.

Equally as troubling is MSHA’s continuing quest to increase its jurisdiction beyond its Congressional delegation of authority and its own expertise at a time when top MSHA officials are testifying to Congress that the agency has insufficient resources to do its job. Indeed, recent MSHA efforts to inspect and enforce mine safety and health regulations at railroads that do not engage in any mining activities and are not on mine property can only serve to undermine the health and safety of railroad employees at operations that have historically and properly been regulated by the Federal Railroad Administration (FRA)and the Occupational Safety and Health Administration (OSHA) and compromise the economic viability of such operations. Congress intended MSHA inspectors to focus time and taxpayer resources exclusively on protecting miner safety and health; not on ill-prepared inspections of facilities properly under FRA and OSHA jurisdiction.

It is critical therefore that operators, their parent companies and non-MSHA regulated employers who are improperly being subjected to MSHA inspections do the following: (1) educate themselves, their employees and their investors on the new and proposed legislation and regulations; (2) understand the processes that are available to them under those laws; and (3) if they find the laws, both existing and proposed, unjust or objectionable, exercise their rights to petition their government to affect changes that both promote employee safety and health and ensure that MSHA adheres to its congressional mandate to protect miner safety and health. Doing so will ensure that the U.S. mining industry remains a strong sector of our economy and continues to provide safe and well-paying jobs to our nation’s workforce.

Gould is an associate with Patton Boggs LLP. He can be reached at 303-894-6176 or at