In a highly-anticipated decision involving two sets of consolidated contest proceedings, the Federal Mine Safety and Health Review Commission has affirmed a May 2011 ALJ order that upheld a broad interpretation of MSHA’s authority to compel a mine operator to produce documents and information during an MSHA inspection. The case, Big Ridge, Inc. v. Secretary of Labor (FMSHRC May 24, 2012), represents the current front line in an ongoing and contentious battle between regulators and operators regarding MSHA’s authority to demand documents from mine operators that are not specifically mandated in the law or regulations.
The Big Ridge cases arose from recent aggressive demands from federal mine inspectors during audits of operator accident, illness, and injury reporting records. At issue were categories of information sought in MSHA’s “Uniform Audit Request” letter, and included the following: workers’ compensation filings, Family and Medical Leave Act (FMLA) releases and records, sick leave records, drug tests, medical reports, medical histories, treatment notes, EMT and ER notes, ambulance reports, explanation of benefits, and x-rays. Not surprisingly, mine operators, including the litigants in Big Ridge, have resisted these broad document requests asserting that the records are not required to be maintained under the Mine Safety and Health Act of 1977 (Mine Act) or any of MSHA’s regulations. Consistent with established enforcement practices, operators have further maintained that these tactics go far beyond prior agency inquiries related to injury and illness reporting compliance and violate privacy rights of individual mine employees. Like ALJ Kenneth Andrews, the Commission has rejected these arguments.
By way of background, there are numerous records and reports that are required by law and regulations to be maintained and produced upon request by MSHA. Requirements for specific records appear both in the Mine Act and in regulations promulgated by MSHA. Mine operations personnel are generally familiar with the requirements related to expressly required records, such as training certificates and workplace examination records. These records are regularly demanded by inspectors and are promptly provided by mine personnel. However, questions frequently arise regarding what the operator’s obligation is with respect to inspector requests for the many non-mandatory documents that are maintained by operators. Further complicating this dilemma, the Mine Act provides fairly vague parameters regarding MSHA’s authority to compel production of these types of records. Moreover, an operator’s decision to produce non-mandatory records is often complex with potentially broad implications—typically, any information a mine operator provides becomes public information.
In its decision in the Big Ridge cases, the Commission concluded that MSHA’s authority to seek non-mandatory documents exists in statute and in regulations. Specifically, the Commission concluded that the “plain language of section 103(h) [of the Mine Act] provides a broad Congressional grant of authority to the Secretary” and requires mine operators to provide such information as the Secretary may deem “relevant and necessary.” In the Commission’s view, the language of section 103(h) “effectively expands, rather than restricts, the Secretary’s right of access.” (The Commission did acknowledge, however that the Secretary’s document requests must be “reasonable.”)
The Commission in Big Ridge also found authority for its decision in Part 50 of MSHA’s regulations by holding that section 50.41 requires operators to provide access to “information” related to accidents, injuries, or illnesses occurring at their mines. As to the scope of such information, the Commission concluded that “[t]he only limitation on the Secretary’s authority is that the information must be ‘relevant and necessary’ to a determination of Part 50 compliance. Like section 103(h) . . . section 50.41 . . . lacks any language restricting the Secretary’s access to any particular documents.” The Commission rejected the applicability of an earlier ALJ decision that held that there are limits on how far the government can go without a search warrant. The Commission distinguished this ALJ decision as simply prohibiting “wholesale rummaging” through operator records—but otherwise bearing no relationship to requests for records “relevant and necessary” to a reasonable audit.
In its lengthy decision, the Commission also held that individual privacy rights cannot block reasonable governmental needs for information when the government has taken measures in good faith to protect individual privacy. Finally, the Commission determined that its holding did not conflict with the U.S. Constitution and other statutes cited by the petitioners, including the FMLA, the Americans with Disabilities Act, and the Genetic Information Non-Discrimination Act.
It is possible that MSHA may seek to overplay this decision by arguing in future inspections that the Commission has opened the door for discovery of all of an operator’s documents and records regardless of whether they are mandated by the Mine Act or MSHA’s regulations. We believe that such an interpretation would be overreaching and erroneous given that the Commission’s holding pertains exclusively to MSHA’s audit powers under Part 50. Moreover, simply because the Commission has held that discoverable Part 50 audit documents extend beyond those required to be maintained by the Mine Act or regulations does not mean that MSHA’s powers in this area are unlimited. MSHA must still establish that the requested records are “relevant and necessary to a determination of operator compliance with Part 50 reporting requirements” and operators should not overlook analysis of whether this burden has been met.
In his dissenting opinion, Commissioner Michael Duffy offers a glimpse of the scope of the legal challenges yet to come in an appeal of this decision and in likely future litigation regarding MSHA’s aggressive position related to its document request powers. Duffy observed:
As for the general deficiencies of the auditing initiative, it must be rejected as illegitimate because it cannot be reconciled with fundamental and manifest constitutional principles relating to privacy and due process. Supreme Court jurisprudence respecting the scope and legitimacy of warrantless access to private records demands that such records must first be required to be generated and maintained pursuant to enabling legislation or implementing regulations. Neither of those predicates obtains in these circumstances as the Secretary readily admits. Consequently, the Secretary is not authorized to demand records that have not been required to be maintained, either by the Mine Act or the regulations set forth in 30 C.F.R. Part 50.
While room remains for operators to challenge the breadth of requests for records and information in a Part 50 audit, the Big Ridge decision admittedly narrows the playing field and slants the presumptions in MSHA’s favor. Nevertheless, the vague “relevant and necessary” test will likely spark a new round of disputes and challenges. In addition, the U.S. Court of Appeals could reverse the Commission’s decision in its entirety. (A Petition for Review was filed on June 4, 2012 in the Seventh Circuit.) In sum, this doesn’t appear over by any means. Stay tuned.
This blog post was written by a shareholder in the Denver office of Ogletree Deakins.