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INSIGHTS is our environmental, health and safety, and crisis management newsletter, made for our clients and friends.
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SEPTEMBER 2010
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This fall, the House is expected to take up safety law legislation, supported by organized labor and opposed by business interests, that will substantially increase the enforcement powers of MSHA and OSHA and increase criminal and civil penalties. H.R. 5663 was introduced as a response to the recent coal mine disasters and contains provisions that would disproportionately impact underground coal mines and an underground metal/non-metal “gassy” operations. In addition, it represents the most sweeping change ever to the Occupational Safety and Health Act. The bill was approved by the House Education and Labor Committee on a straight party-line vote of 35-19 on July 21. Republicans decried the lack of bipartisan support for the measure, and its adverse affect on business. They also contended it would not improve safety, would generate litigation and was premature because it aims to prevent future tragedies like Upper Big Branch before the cause of that disaster is known. Bills and amendments introduced by the minority party were voted down. The legislation would amend the Mine Act by giving MSHA more subpoena authority, making it easier for MSHA to seek injunctions; greatly strengthen the agency’s pattern of violation closure order enforcement tool; enhance whistleblower protections; raise civil and criminal penalties; discourage litigation over MSHA penalties; add a new refresher training requirement; and modernize safety and health standards. The House bill, named in memory of Senator Byrd, initially covered all mines, but lobbying by non-coal interests convinced the Committee leadership to limit the bill to underground coal and gassy metal/non-metal operations. However, there is no assurance the exemption will stick, since a number of lawmakers on both sides of the aisle oppose it and the Senate bill applies to all mines. Moreover, there is significant opposition to the inclusion of so called "gassy" non coal mines, since coverage could extend to mines that produce fire suppression minerals and dusts, such as trona, salt and potash, that do not share either the explosion or the enforcement history of the coal mines that led to the legislation. Under the House bill, these non coal mines could suffer the same enforcement fate as the coal mines, adversely impacting thousands of safe jobs in key states like Louisiana, Texas, New Mexico, Michigan, Nevada, and Wyoming.
A
smaller section of the bill devoted to OSHA would also strengthen
whistleblower protections and raise civil and criminal penalties. It
would require immediate abatement of alleged violations and
establish a comprehensive victims’ rights program. The OSHA
provisions are opposed by the U.S. Chamber of Commerce, National
Association of Manufacturers and other business interests.
The chairman of the Senate committee with jurisdiction over MSHA and
OSHA pledged to reach across the aisle to craft bipartisan reform
legislation. Sen. Tom Harkin (D-Iowa), chairman of the Health,
Education, Labor and Pensions Committee, reportedly is working with
Sen. Mike Enzi (R-Wyo) to draft a bill both parties can endorse.
However, Sen. Jay Rockefeller (D-W.Va) introduced a measure
identical to the original House bill providing at least the initial
topics of the Senate discussions. The fall elections complicate the
Senate’s already crowded agenda, so there is no assurance any the
legislation will be considered before the elections, but there is a
significant risk that a “lame duck” Congress might act on the
legislation before this Congress ends in January 2011. The President
and his Secretary of Labor have already endorsed the legislation and
likely would sign whatever bill might be passed in December.
Contact Henry Chajet (hchajet@pattonboggs.com;
202-457-6511 or Mark Savit (msavit@pattonboggs.com;
303-894-6117) for further information.
While the House and Senate debate a massive overhaul
of the Federal Mine Safety and Health Act ("Mine Act"), Congress
passed new disclosure requirements for publicly held mining
companies.
The new law also requires each coal or other mine
operated by a publicly traded entity or a subsidiary to file a "currentreport"
(Form 8-K) with the SEC if: (1) MSHA issues an imminent danger order
under Section 107(a) of the Mine Act; (2) MSHA notifies an entity
that it it is a pattern or potential pattern violator under Section
104(e) of the Mine Act. Operators began including the required
information in filings with the SEC in the last month.
If you have any questions regarding these new SEC
reporting requirements, please contact Henry Chajet at (202)
457-6511. II. REGULATORY AGENCIES
MSHA is in the initial stages of developing a new regulation to address the design, construction and inspection of some 2,000 mine dams in the Metal/Non-Metal (M/NM) mining sector. The Agency issued an advance notice of proposed rulemaking last month and gave stakeholders until October 12 to answer a series of questions it posed on the subject. In the announcement, MSHA said that the Federal Emergency Management Agency (FEMA) had recommended MSHA beef up its M/NM impoundment standard. FEMA runs the national dam safety program. MSHA’s current requirements are general in nature, and far less detailed than those for coal impoundments. “MSHA investigators have found that design, construction, operation, or maintenance deficiencies have contributed to failures of dams at metal and nonmetal mines and exposed miners to hazards,” the Agency said.
Contact Henry Chajet (hchajet@pattonboggs.com;
202-457-6511 or Mark Savit (msavit@pattonboggs.com;
303-894-6117) for assistance in preparing comments.
5. MINE AGENCY ISSUES PROCEDURAL AND INFORMATION GUIDANCE
In response to congressional testimony from
miners and victims’ families after the Upper Big Branch tragedy,
MSHA has issued a series of procedural instructions and information
bulletins aimed at clarifying operators’ legal requirements and the
rights and responsibilities of miners. Since mid-August five
documents have been posted on MSHA’s website pertaining to
underground mine ventilation and methane monitors. More recent
guidance has involved explaining miners’ rights, prohibitions
against discriminating against workers who voice safety complaints,
and a warning against providing advance notice of inspections.
OSHA has released a long-awaited final rule that updates its cranes and derricks standard for construction. Developed as a negotiated rulemaking and seven years in the making, OSHA said the new regulation comprehensively addresses key hazards in the use of cranes and derricks at construction worksites, including electrocution, crushed by equipment parts, struck-by incidents, and falls. Significant requirements include a pre-erection inspection of tower crane parts, use of synthetic slings in accordance with the manufacturer's instructions during assembly/disassembly work, assessment of ground conditions, qualification or certification of crane operators, and procedures for working near power lines. Regarding certification, the regulation requires operators of most types of cranes to be qualified or certified under one of the options set forth in the rule. Employers have up to four years to ensure their operators are qualified or certified, unless they are operating in a state or city that has operator requirements. If a city or state has its own licensing or certification program, the rule mandates compliance with that city or state's requirements only if they meet the minimum criteria set forth in the regulation. Employers must pay for all required training and for certification of equipment operators. OSHA estimated that the new requirements will prevent 22 fatalities and 175 non-fatal injuries every year. The rulemaking was undertaken due to a series of high-profile fatal accidents in recent years and because the existing standard, issued in 1971, is out-of-date. The rule goes into effect November 8, although certain provisions have delayed effective dates ranging from one to four years.
On Aug. 31, OSHA published interim final rules that offer additional protection for whistleblowers in the railroad, public transit, commercial motor carrier, and consumer product industries. “Changes in the whistleblower provisions make good on the promise to stand by those workers who have the courage to come forward when they believe their employer is violating the law and cutting corners on a variety of safety, health and security concerns in the affected industries,” OSHA chief David Michaels said. Although the rules are effective immediately. For further information, contact Brian Hendrix or Henry Chajet.
III. ENFORCEMENT
Since Labor Secretary Hilda Solis declared during her 2009 swearing-in ceremony that “there’s a new sheriff in town,” OSHA has issued citations for egregious violations in 17 cases. The number is more than twice as many egregious cases as were issued in the final two years of the Bush Administration. The companies OSHA has cited include BP, which has agreed to pay a record $50.6 million fine for allegedly failing to correct safety hazards at its Texas City refinery after a 2005 explosion killed 15 workers. Kleen Energy Systems, LLC and a farmer-owned grain-handling company, Cooperative Plus, have also faced egregious penalty sanctions after fatal accidents. OSHA inspectors cite egregious violations when an employer shows multiple instances of willful and flagrant indifference to correcting workplace hazards. “We will not tolerate this type of blatant and egregious disregard for the health and safety of workers. Employers need to know there will be consequences,” OSHA Assistant Secretary David Michaels said.
OSHA has stepped up enforcement at grain-handling facilities after two workers died in separate accidents in Colorado and South Dakota last year and a third was rescued in February after becoming trapped up to his chest in frozen soybeans at a Wisconsin facility. The three incidents have led to fines totaling $3.3 million against three grain-handling companies: Tempel Grain Elevators, LLP (CO), $1.5 million; South Dakota Wheat Growers Association, $1.6 million; and Cooperative Plus, Inc. (WI), $721,000. In addition, two other Cooperative Plus facilities in Wisconsin have been fined $374,500. Fines have yet to be assessed in an incident this summer in which two teenage workers died after being engulfed in a grain bin in Illinois. In a letter August 4, OSHA chief David Michaels reminded grain storage operators of their responsibility to follow OSHA regulations. “OSHA will not tolerate non-compliance with the Grain Handling Facilities standard,” Michaels said. He also warned that if anyone dies in a grain storage facility, OSHA would consider referring the incident to the Department of Justice for criminal prosecution. Meanwhile, the Agency has launched a Local Emphasis Program targeting facilities in Wisconsin, Illinois and Ohio. The program focuses on feed mills, ethanol plants, pet food manufacturers, grain elevators, and grain warehouses and runs though September 2011. Ten facilities at a time will be selected at random during each inspection cycle. For further information, contact Avi Meyerstein or Peter Gould.
Whistleblowers are getting a boost from
heightened OSHA enforcement. Last month, OSHA ordered the Utah
Transit Authority (UTA) to reinstate a whistleblower employee and
pay more than $130,000 in back wages, interest, damages and
attorney’s fees. According to OSHA, the Agency determined that UTA
wrongfully discharged the employee in retaliation for raising
security concerns about how UTA had given keys to access railroad
controls and switches for signals and tracks. Elsewhere, OSHA has
accused Modern Oil Co. of illegally firing an employee after she
complained that beverage boxes were stacked too high at a
convenience store the company operates in Shawnee, OK. The Labor
Department is seeking reinstatement, back pay and damages. Last
month, a Labor Department judge ordered Amtrak to pay a cleaning
worker more than $160,000 after finding that supervisors retaliated
against her for reporting an on-the-job ankle injury she suffered at
a Seattle train station.
OSHA has proposed $16.6 million in penalties against three construction companies and 14 subcontractors following its investigation into a deadly blast at the Kleen Energy Systems, LLC power plant construction site in Connecticut. Six workers died and 50 others were injured in the natural gas explosion in February. The largest fine, $8.4 million, was levied against O&G Industries, Inc., the general contractor. Piping contractor Keystone Construction and Maintenance, Inc. received a $6.7 million penalty. Bluewater Energy Services, the commissioning and startup contractor, was fined $896,000. Assessments against the 14 subcontractors totaled $686,000.
The Agency for the first time ever is seeking
enterprise-wide relief against an employer, in this case the U.S
Postal Service The complaint, which was filed this summer by the Labor Department, follows a series of six-figure fines against the government’s mail delivery service. Most recently, they have included $558,000 for a facility in Providence, RI; $357,000, South Boston, MA; $350,000, Portsmouth, NH; $225,000, Dayton, OH; $420,000, Montpelier, VT; and $191,000, Kansas City, KA. Since the inspections were launched, reportedly at the behest of the American Postal Workers Union, OSHA has fined USPS more than $3.7 million. The Postal Service said it began nationwide efforts in January to enhance safe electrical work practices, including providing training and nearly $2 million in personal protective equipment. OSHA has assessed $11.2 million in fines against 27 other companies recently. They are:
For further information on defending OSHA enforcement actions, or for management training in reducing OSHA enforcement risks, contact Henry Chajet or Mark Savit.
The Upper Big Branch tragedy has triggered a new ‘bad actors’ enforcement program that was launched by MSHA this spring. Under the program, a poor safety or enforcement record would bring a mine to the Agency’s attention for inspections and investigations beyond the mandatory inspections. Such data could include serious violations, number and frequency of orders, fatalities, a high number of hazard complaints, accident frequency rates, history of repeat violations, a generally high number of citations, or specific issues involving such concerns as ground control, ventilation or rock dusting. An inspection could also be based on an MSHA belief that a mine only complies with the law during an inspection but not afterwards. “We’re looking for the bad operators,” Metal/Non-Metal (M/NM) Administrator Neal Merrifield said. “Things that would say there’s something that’s not necessarily going right with this operation.” The Coal Division’s program has been underway continuously while that in M/NM has been sporadic. In a blitz in late April, six Kentucky underground coal operations were forced to shut down to abate alleged violations after being cited by MSHA inspectors. The Agency went to court for an injunction against two of those operators for allegedly alerting workers underground of the presence of inspectors on the surface. The six were part of a group of 57 coal mines targeted in the blitz. A M/NM inspection at a small Georgia mine Aug. 17 resulted in 19 citations, including seven alleged S&S violations, that were written by a three-member inspection team. Most M/NM inspections under the program would be done in conjunction with regular inspections, although blitzes would occasionally be undertaken, Merrifield said. For further information or training programs for management on reducing MSHA risks, contact Henry Chajet or Mark Savit.
MSHA has introduced a pilot program in three districts that gives Agency and operator personnel a chance to discuss citations in informal conferences before they go to formal litigation. The hope is that the change will decrease the number of legal challenges of MSHA enforcement actions. The civil case backlog has been increasing dramatically for the past three years and now stands at some 89,000 cases. "It is clear that the current conferencing structure is not working," said MSHA chief Joe Main. "By resolving factual disputes before a violation is contested, these citations will not be added to the enormous backlog of cases that have bogged down the judicial system. This process should also improve consistency in MSHA's enforcement of the Mine Act." The program kicked off August 31 in Coal Districts 2 in Pennsylvania and 6 in Kentucky and in the Southeast Metal/Non-Metal District based in Birmingham, Ala. It will run for 90 days. The locations were selected to include a wide range of mine operators and different MSHA personnel, MSHA said. If the pilot approach proves successful, it will be adopted nationwide. Should that happen, it will be the third change MSHA will have made to the system in less thanthree years. In February 2008, MSHA essentially nixed all conferences except for those involving high negligence. The move contributed substantially to accelerating legal appeals, which had begun to go up after MSHA imposed an enhanced penalty scheme on operators in 2007. Taken aback by the flood of legal challenges brought on by the restrictive conferencing policy, the Agency then introduced the current system, which it now concedes is broken, in March 2009. The case backlog has attracted the attention of Congress, which this summer appropriated $22 million for the Labor Department and the Federal Mine Safety and Health Review Commission to help address it.
MSHA fined Big Laurel Mining Co., an underground coal operator in Virginia, $542,400 for what the Agency said were five violations that contributed to the death of a miner in 2009. Two of the violations were deemed flagrant, which carry a maximum penalty of $220,000 each. William W. Parrott, 58, was working at the company’s No. 2 Mine in Wise County when he was killed in a rib collapse.
IV. CHEMICAL SAFETY BOARD
A three-person assessment team from the U.S. Chemical Safety Board (CSB) has determined that a leak in a distillation column preceded a deadly explosion in July at a zinc recycling plant along the Ohio River. Two workers died and two others were injured. The blast occurred in a five-story brick distillation column where a mixture of natural gas and carbon monoxide is used to oxidize the molten zinc as it flows through a series of trays to a sump at the base of the column. The leak came from the lower section of one of the distillation columns, the Board said in a press release. The CSB has launched a full investigation. A spokesman for Horsehead Holdings Corp., which runs the plant in Western Pennsylvania, said smelting furnaces and other operations will continue at a reduced rate until the CSB investigation, and those by the company and OSHA, are complete. The column where the explosion occurred will have to be rebuilt and nine other distillation columns, damaged by cooling down too quickly in response to the accident, will have to be repaired before refining operations can continue.
A series of safety failures by an energy company and its painting contractor were alleged to have led to a fatal fire inside a Colorado hydroelectric plant tunnel in 2007. Five employees of RPI Coating, Inc. died after a flash fire erupted inside a water tunnel at Xcel Energy’s Cabin Creek plant in Georgetown. The men were part of a crew recoating a steel portion of the tunnel using a flammable solvent, methyl ethyl ketone, to clean epoxy spraying wands. In a report released last month, the CSB concluded that several safety lapses caused the tragedy, including a lack of planning and training for hazardous work by the companies; Xcel’s selection of RPI despite the contractor’s having a zero safety rating, the lowest among others who competed for the job; and allowing volatile flammable liquids into a permit-required confined space without taking special precautions. Xcel and RPI also allegedly failed to have technically-qualified confined space rescue crews standing by in case of an emergency, as regulations require. Workers called 911, but responders entering the tunnel had to retreat in the thick smoke. “The five trapped workers communicated with co-workers and emergency responders using handheld radios for approximately 45 minutes, desperately calling for help, before succumbing to smoke inhalation,” said CSB lead investigator Don Holmstrom. “Their lives likely could have been saved had qualified, company-provided rescuers been in a position to respond immediately to a fire or other emergency.” The two companies face criminal charges over the accident. The CSB concluded that regulations pertaining to the use of flammables in confined spaces are inadequate. The Board called on OSHA to amend its confined spaces standard to specifically define safe entry conditions and prohibit entry when those conditions are not met. The CSB noted that 45 confined spaces fatalities have occurred in 53 incidents nationwide since 1993.
The CSB is encouraging Mississippi to be a champion of oil and gas site safety after two teenagers in the state were killed when a gas condensate tank suddenly exploded. The cause of the October 2009 blast has never been determined but in other investigations around the country, the Board has found a cigarette, match, or lighter to be the source of ignition of vapors in unsecured storage tanks at oil and gas sites. Forty-four teenagers or young adults have died in similar incidents since 1983, 16 of them in 2003 alone. Mississippi is considering introducing a bill to require public safety measures, such as fences and warning signs at unattended sites. A lack of consistent state or municipal regulations for restricting access to oil and gas sites exists throughout the country, a CSB task force has found.
CSB has launched an investigation into a release of anhydrous ammonia at an Alabama warehouse and distribution center that led 130 people to seek medical attention. Four were hospitalized. The incident occurred August 23 at the Millard Refrigerated Services facility 15 miles south of Mobile. The Board has taken on the investigation because there have been too many releases of the common commercial refrigerant recently and because such an ammonia release is a “high consequence accident that causes multiple injuries to members of the public,” CSB Chairman Rafael Moure-Eraso said. High exposures can result in suffocation as well as severe injuries to eyes, lungs and the digestive system.
V. LITIGATION/COURTS
Kleen Energy Systems, LLC and three of its
contractors have been named in a $6 million lawsuit by a worker
injured when an explosion occurred at a Kleen Energy power plant
under construction in Connecticut. The February 2010 blast left six
dead and 50 injured, including the plaintiff, Nicholas Novik, 52.
Novik’s lawyer said his injuries included a concussion and hearing
loss. The accident has sparked numerous civil lawsuits in state
courts. Novik’s litigation, filed last month, is the first to be
entered in federal court.
A mine operator has been put on probation for failing to follow an approved roof control plan and for using unapproved roof bolts at his underground coal mine in Kentucky. Under the terms of a settlement agreement, Alger B. Jent, 57, pled guilty to three violations of MSHA regulations. He also is prohibited from operating a mine for at least two years. Jent faced up to a year in prison and a $250,000 fine.
A judge has sided with a miner who alleged he had been disciplined by his employer for showing a video of leaking seals in a Kentucky underground coal mine. The tape was shown at an MSHA hearing called to take testimony on an emergency temporary seals standard. Charles Scott Howard alleged that mine operator Cumberland River Coal Co. had discriminated against him when it inserted a letter into his personnel file two weeks after Howard showed the video in 2007. The letter stated that the company was taking disciplinary action against Howard for taking a non-permissible video camera underground and for violating company policy that prohibits taking pictures on company property without management’s written permission. In his ruling, the judge relied in part on testimony indicating that numerous individuals had taken photos on mine property without management’s written permission. Although Howard had not identified Cumberland’s Band Mill No. 2 Mine, where the video was taken, MSHA inspectors arrived at the mine within hours of his testimony. The following day MSHA issued a citation for an alleged failure to perform pre-shift examinations of the seals and issued a second citation six days later for an alleged failure to maintain seals for their intended purpose.
Courts in New York and New Jersey recently awarded $23.9 million in mesothelioma claims arising from asbestos exposure. In the lone New Jersey case, Exxon Mobil Corp. was ordered to pay $9.3 million to a couple over exposure at its Linden Bayway Refinery. The amount includes pre-judgment interest. Defendants were not named in the other five cases. The settlement amounts ranged from $4.7 million to $1.8 million.
The Patton Boggs Health and Safety Law Group consists of attorneys who have resolved client problems in environmental, energy, natural resource, and safety and health law since the late 1960s. With domestic offices in Washington, D.C., Northern Virginia, New Jersey, New York, Dallas, Denver, Alaska, and internationally in Doha, Qatar and Abu Dhabi, United Arab Emirates, our lawyers have experience with EPA, OSHA, MSHA, NIOSH, DOT, OPS, Coast Guard, NTSB, FAA, FDA, CSP, the Chemical Safety Board, and almost every other federal and state government environmental, health, and safety agency here and in many foreign governments around the world. We speak a variety of languages; have backgrounds in business, science, engineering, industry, and government; and combine preventive law counseling with courtroom and lobbying expertise to achieve results. For more information go to: http://www.pattonboggs.com or contact Henry Chajet (hchajet@pattonboggs.com) at 202.457.6511, Mark Savit (msavit@pattonboggs.com) at 202-457-5269, or Brian Hendrix (bhendrix@pattonboggs.com) at 202-457-6543. Important Note: This newsletter does not constitute legal advice and counsel should be consulted regarding specific factual situations which will determine the compliance advice applicable to any particular question regarding the subject matter. If you would like additional information or advice and counsel on training, compliance or audits, please let us know. You may receive INSIGHTS from other people, which often occurs. To SUBSCRIBE, change your address or to change your e-mail format, simply click here. To UNSUBSCRIBE or OPT-OUT, simply e-mail INSIGHTS@pattonboggs.com with "UNSUBSCRIBE" in the subject line. To correspond with INSIGHTS, send your message to INSIGHTS@pattonboggs.com. Thanks.
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