Petition — Double "Q", Inc. v. Andrus

IN THE

SUPREME COURT OF THE UNI

OCTOBER TERM, 1980 a

, 80-57

N

DOUBLE "Q", INC.,

Petitioner,

CECIL D. ANDRUS, SECRETARY OF INTERIOR,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

A. BENJAMIN STRAND, JR.

WILLIAM H. GODDARD

P. QO. Drawer H

Dandridge, Tennessee 37725

Attorneys for Petitioner

STRAND & GODDARD

Of Counsel

TENNESSEE LAW PRINTERS, P. 9%. Box 277, Knoxville, Tennessee, Phone 525-4202

6-2-80-50

INDEX

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Css CN SURO OERD 6 5 ka + oe ss 8 ee

ade We EV EV 6 6 a's 0 eee soe ee

Peer ee er OO 6 eae 0 ee a ee

REASONS FOR GRANTING WRIT ..........

Pay 5 «sb wee oe ee ake a eee

CASES CITED

Cases:

Eastern Associated Coal Corp. v. Interior

Bd. of Mine Operations Appeals,

S93 D037 TCA AAO oc a ss wh en

Freeman Coal Mining Co. v. Interior

Bd. of Mines Operations Appeals,

SGT ae Petes eee etc ee AAS

Lucas Coal Co. v. Interior Bd. of

Mine Operations Appeals,

SF ee eee es cs eS hls oe we ee

National Ind. Coal Operator's Ass'n. v.

Kleppe,

423 U.S. 388, _L.. Ed. 2d ,

We Bs 5 OP ae oe kA oe ee ee ee

11

ll

REFERENCES

Conference Report No, 91-791 STATEMENT

OF THE MANAGER ON THE PART OF THE

HOUSE LEGISLATIVE HISTORY*ON THE

FEDERAL COAL MINE HEALTH AND

ee CMe ys 6 et ee we ee te et 10

ED Se er ee 3

CC MMES ~ ssc cneneevenevres 3

ES) 3

we TT 6 4

30 USC Section 819(a)(4) .... cc ccvvees 4,5

6, 7

Section 106 of the Federal Coal Mine Health

ES ee re 3

Section 109 of the Federal Coal Mine Health

and Safety Act of 1969 ......500eeceees 5

INDEX TO APPENDIX

Mn SPMOVEO cp wc ee ce eee ee eee tee 15

Eo 0 | a a a rr 17

Memorandum, 11/11/77 ......+.e056e eevee 18

ii

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1980

NO.

DOUBLE "Q", INC.,

Petitioner ,

CECIL D. ANDRUS, SECRETARY OF INTERIOR,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

To the Honorable, the Chief Justice and Associate Jus--

tices of the Supreme Court of the United States:

Double "Q", Inc., the petitioner herein, prays that a

Writ of Certiorari issue to review the Judgment and Orders

of the United States Court of Appeals for the Sixth Circuit

entered in this matter on March 25, 1980, and April 22,

1980.

OPINIONS BELOW

The March 25, 1980 Order of the United States Court

of Appeals for the Sixth Circuit whose Judgment and Order

is here sought to be reversed is unreported and is reprinted

in the Appendix to this Petition at page 15. Also the Order

overruling the Petition to re-hear was filed on April 22,

1980, and is printed in the Appendix hereto at page 17.

The prior Opinion of the United States District Court for

the Eastern District of Tennessee, Northern Division, is

also reprinted in the Appendix at page 18.

JURISDICTION

The Judgment and Order of the United States Court of

Appeals for the Sixth Circuit was filed on March 25, 1980.

A further Order Overruling the Petition to rehear which

was timely filed was filed on April 22, 1980. The juris-

diction of this Honorable Court is invoked pursuant to

28 USC, Section 1254(1).

QUESTIONS PRESENTED

Whether the United States District Court was in error in

failing to allow the Petitioner to introduce all relevant testi -

mony concerning issues of fact in dispute which would prove

Petitioner's innocence of the violations of the Federal Coal

Mine Health and Safety Act of 1969 as amended, and the

health and safety standards enforced by the Mine Enforce-

ment and Safety Administration of the Department of the

Interior. The effect of which would deny the Petitioner a

right to a de novo trial as guaranteed to it under 30 USC,

Section 819(a)(1). [Section 109(a)(1) of the Federal Coal

Mine Health and Safety Act of 1969].

3

STATUTES INVOLVED

"(a) Any order or decision issued by the Secretary

or the Panel under this Act, except an order or de-

cision under section 109(a) of this Act [30 USCS Sec -

tion 819(a)], shall be subject to judicial review by the

United States Court of Appeals for the circuit in

which the affected mine is located or the United

States Court of Appeals for the District of Columbia

Circuit, upon the filing in such court within thirty

days from the date of such order or decision of 4

petition by any person aggrieved by the order 6r de-

cision praying that the order or decision be modified

or set aside in whole or in part, except that the court

shall not consider such petition unless such person

has exhausted the administrative remedies available

under this Act. A copy of the petition shall forthwith

be sent by registered or certified mail to the other

party and to the Secretary or the Panel, and thereupon

the Secretary or the Panel shall certify and file in

such court the record upon which the order or decision

complained of was issued, as provided in Section 2112

of Title 28, United States Code [28 USCS Section 2112]."

30 USC Section 816(a)

"(b) The court shall hear such petition on the record

made before the Secretary or the Panel. The findings

of the Secretary or the Panel, if supported by substan-

tial evidence on the record considered as a whole, shall

be conclusive. Thecourt may affirm, vacate, or modify

any order or decision or may remand the proceedings

to the Secretary or the Panel for such further action as

it may direct." 30 USC Section 816(b). [Section 106

of the Federal Coal Mine Health and Safety Act of 1969]

4

"(a)(1) The operator of a coal mine in which a viola-

tion occurs of a mandatory health or safety standard

or who violates any other provisions of this Act, ex-

cept the provisions of Title 4 [30 USCS Sections 901 -

941], shall be assessed a civil penalty by the Secretary

under paragraph (3) of this subsection which penalty

shall not be more than $10,000 for each such violation.

Each occurrence of a violation of a mandatory health

or safety standard may constitute a separate offense.

In determining the amount of the penalty, the Secre-

tary shall consider the operator's history of previous

violations, the appropriateness of such penalty to the

size of the business of the operator charged, whether

the operator was negligent, the effect on the operator's

ability to continue in business, the gravity of the viola-

tion, and the demonstrated good faith of the operator

charged in attempting to achieve rapid compliance after

notification of a violation."' 30 USC Section 819(a)(1).

(4) If the person against whom a civil penalty is

assessed fails to pay the penalty within the time pre-

scribed in such order, the Secretary shall file a peti-

tion for enforcement of such order in any appropriate

district court of the United States. The petition shall

designate the person against whom the order is sought

to be enforced as the respondent. A copy of the peti-

tion shall forthwith be sent by registered or certified

mail to the respondent and to the representative of the

miners in the affected mine or the operator, as the case

may be, and thereupon the Secretary shall certify and

file in such court the record upon which such order sought

to be enforced was issued. The court shall have jurisdic -

tion to enter a judgment enforcing, modifying, and en-

forcing as so modified, or setting aside in whole or in

part the order and decision of the Secretary or it may

remand the proceedings to the Secretary for such

further action as it may direct. The court shall

consider and determine de novo all relevant issues,’

except issues of fact which were or could have been

litigated in review proceedings before a court of

appeals under Section 106 of this Act [30 USCS Sec-

tion 816], and upon the request of the respondent

such issues of fact which are in dispute shall be

submitted toa jury. On the basis of the jury's

findings, the court shall determine the amount of the

penalty to be imposed. Subject to the direction and

control of the Attorney General, as provided in Sec-

tion 507(b) of Title 28 of the United States Code [28

USCS Section 507(b)], attorneys appointed by the Sec -

retary may appear for and represent him in any

action to enforce an order assessing civil penalties

under this paragraph." 30 USC Section 819(a)(4).

[Section 109 of the Federal Coal Mine Health and

Safety Act of 1969]

STATEMENT OF CASE

Cecil D. Andrus, Secretary of the Interior, United States

Department of the Interior, filed a Petition for "Enforce-

ment of Civil Penalty Assessment Order" in the United

States District Court for Eastern District of Tennessee, at

Knoxville, Inthis Petition, the Secretary sought to collect

penalties from the Petitioner for alleged violations of regu-

lations under the Federal Coal Mine Health and Safety Act

of 1969 (30 USC Section 801, et seq). There were a total

of 25 cited violations occurring over a four month period

at the Petitioner's coal operations in Tennessee.

As the proceeding progressed, the Petitioner was granted

a jury trial pursuant to 30 USC Section 819(a)(4), Shortly

6

before trial both the Secretary's representative and the

Petitioner were asked by the Court to submit briefs as to

what issues were to be submitted to the jury. Both the

Secretary's representative and the Petitioner stated that

the statute required upon request that all relevant issues

of fact including whether or not a violation occurred be

submitted to the jury.

The Trial Court by a Memorandum Opinion, Appendix

at page 18, ruled that the statute only allowed review of

the amount of the assessment and that the fact of whether

or not the violation occurred was not a question for the

jury.

The parties proceeded to trial with the only issues be-

fore the jury being the amount of the penalty for each

alleged violation.

At the conclusion of the evidence the jury was instructed

and retired to deliberate after which they returned and sub-

mitted their verdict form listing each alleged violation and

the penalty for each, totalling $1,181.00.

After entry of the judgment from the United States Dis-

trict Court for the Eastern District of Tennessee, Northern

Division sitting at Knoxville, the Petitioner perfected its

Appeal to the United States Court of Appeals for the Sixth

Circuit, An Order was filed by the United States Court of

Appeals for the Sixth Circuit on March 25, 1980, affirming

the decision of the lower court and holding in effect that

the findings of fact of the Secretary and its Administrative

Law Officer can only be reviewed by a direct appeal from

the decision of the Secretary and its Administrative Officer

to the Court of Appeals according to 30 USC 816 and that the

petitioner could not relitigate these factual findings in an

enforcement action under 30 USC Section 819(a)(4). A

Petition to re-hear was timely filed by the Petitioner and

an Order overruling the Petition for Re-hearing was

entered by the United States Court of Appeals, Sixth Cir-

cuit on April 22, 1980. It is from this ruling that the

Petitioner files this Petiton seeking the review of this

Court.

REASON FOR GRANTING WRIT

1, That the United States District Court for the

Eastern District of Tennessee, Northern Division mis-

construed the application of 30 USC Section 819(a)(4) and

violated the procedural rights of the Petitioner in the in-

troduction of the evidence of innocence of violation of

certain regulations of the Coal Mine Health and Safety

Act of 1969 Codified at 30 USC Section 801 et seq.

The Trial Court was obligated to grant the Petitioner

a de novo hearing pursuant to 30 USC 819(a)(4) of all dis-

puted issues of fact.

The Petitioner sought a de novo hearing on 25 cited

violations pursuant to 30 USC Section 819(a)(4). The Peti-

tioner can find no reported cases of jury trials under this

act. Therefore, we must look strongly to the wording of

the Act itself. The pertinent part reads as follows:

". , . The Court shall (emphasis supplied) consider

and determine de novo all relevant issues, except

issues of fact which were or could have been litigated

in review proceedings before a Court of Appeals under

Section 106 of the Act [30 USC Section 816] and upon the

request of the respondent, such issues of fact which

are in dispute shall be submitted to the jury. On the

basis of the jury's findings, the Court shall determine

the amount of the penaity to be imposed. ..." 30

USC Section 819(a)(4).

Both the Petitioner and the Respondent were in agreement

that the Federal Coal Mine Health and Safety Act of 1969,

Section 109, requires a de novo review of the facts consti -

tuting the violation or the fact that they occurred. The

Trial Court, however, ruled that the act required de novo

review only of the amount of the penalties. (Memo Opinion

District Court of November 11, 1977) Appendix, page 18.

It appears to be the position of the Trial Court that Sec-

tion 106 of the act which is codified at 30 USC, Section

816(b), specifically limits factual review to the substantial

evidence test and that Congress did not intend to have the

standard of review vary depending on the type of order at

issue. Congress intended to have facts of the same type as

those received by appellate courts, under Section 816 re-

viewed under the same standard of review in the district

courts under 30 USC 819 (Memo Opinion, District Court

filed November 11, 1977) Appendix, page 18.

The Trial Court on page 6 of its Memorandum Opinion

filed November 11, 1977 (Appendix, page 18), recognized

that it had problems avoiding a de novo review. Through

the exercise of legal gymnastics the Trial Court decided that

since the appellate courts did not determine the amount of

the penalty that this would be the extent of the review in the

district court because it affects Defendant's pocketbook.

The Trial Court cited National Ind. Coal Operator's

Ass'n v. Kleppe, 423 U.S. 388, =—-L.Ed.2d_, 96 S.Ct.

809, by dictum that the United States Supreme Court intended

that the trial be de novo as to penalty. Defendant calls the

Court's attention to Footnote 3 of that Opinion where the

Court said:

The Government has suggested that trial de novo is

available on the factual basis of the violation as well as

on the amount of the penalty. The statutory scheme is

less than clear on this matter. Compare Section 106,

Section 109(a). See Eastern Associated Coal Corp. v.

9

Interior Bd. of Mine Operations Appeals, 491 F .2d 277

[CA 4 1974]. We need not reach the issue to dispose of

this case.

On page 8 of the same Memorandum Opinion the Court

stated that the Court will assume the administrative pro-

ceedings were not subject to de novo review. Also the

Court on page 9 of the same opinion reasoned by the fact

that Congress did not place in the wording of the statute

complete de novo review that it meant that review was

limited to only de novo review of the penalties.

The particular statute in question, 30 USC, Section

819(a)(4), reads in part:

. » » The Court shall consider and determine de novo

all relevant issues, except issues of fact which were or

could have been litigated in review proceedings before a

Court of Appeals under Section 106 of this Act [30 USC,

Section 816(a)] and upon the request of the respondent,

such issues of fact which are in dispute shall be submitted

to a jury. On the basis of the jury's findings, the Court

shall determine the amount of the penalty to be imposed....'

By the very reading of the code section itself the intent of

this statute is very clear. The Court shall consider de novo

all relevant issues in dispute except those that had been liti-

gated under a withdrawal order authorized by 30 USC 814 and

which order has been reviewed by the United States Courts of

Appeals on the record made before the Secretary or the Panel.

30 USC 816. There can be no de novo review of the issues

introduced during a 30 USC 816 proceeding under the judicial

review authorized under the provisions vf 30 USC 819. In

this particular case there has never been a withdrawal order

issued and no proceedings have ever taken place before the

United States Court of Appeals in any circuit.

Therefore, the Trial Court must have submitted all

relevant issues of fact which are in dispute for the jury to

decide. After submitting the factual questions to the jury

10

it was the Court's duty to determine the amount of the penalty

rather than the jury. The Court was grossly in error in

ever submitting the question of penalties to the jury under

the provisions of 30 USC Si?.,

The tegislative intent is shown from the Conference Re-

port No. 91-761 STATEMENT OF THE MANAGERS ON

THE PART OF THE HOUSE LEGISLATIVE HISTORY ON

THE FEDERAL COAL MINE HEALTH AND SAFETY ACT

OF 1969, U. S. Code Congressional and Administrative

News Vol. 2, page 2587, Sec. 109, subsection 5:

Al

. . The corresponding provision of the House amend -

ment required the Secretary to request the Attorney

General to institute a civil action in a district court of

the United States to collect the penalty. Such pro-

ceeding would be de novo.

The conference agreement is similar to the Senate bill.

The Court would hear the case de novo and determine all

relevant issues, except issues of fact which were or

could have been litigated before a Court of Appeals

under Section 106. This provision recognizes that the

fa. .s involved in the civil penalty may already have been

fully litigated by the Court of Appeals under Section 106

and should not be relitigated here. Also, in some

cases, they could have been so litigated and were not.

Upon the request of the respondent in the de novo pro-

ceeding, issues of fact not litigated under Section 106

which are in dispute must be submitted to a jury and,

on the basis of the jury's finding, the Court would de-

termine the amount of the penalty to be imposed. The

Court has jurisdiction to enter a judgment enforcing the

order or modifying it, or setting it aside, or remanding

it to the Secretary."

ll

The conference report leaves no doubt that Congress

intended that there be a de novo hearing of all relevant

issues that had not been reviewed under Section 106 of

the Act.

In the case of Eastern Associated Coal Corp. v. In-

terior Bd. of Mine Operations Appeals, 491 F, 2d 277

[CA 4 1974], and Freeman Coal Mining Co. v. Interior Bd.

of Mine Opr. App., 504 F.2d 741 [CA7 1974], by dictum

they are saying that the factors bearing on the issuance

of a withdrawal order and its correctness cannot be re-

litigated under a Section 109(a) proceeding but in this

case there was never a withdrawal order issued.

Petitioner has found only one case which by dictum

really reaches the question in this case. In the case

of Lucas Coal Co. v. Interior Bd. of Mine Operations

App., 502 F.2d 581, the Court at page 586 states the law:

. . The Act clearly contains a number of provisions

for review of administrative action taken under its

authority against mine operators. Thus, Section 109

provides that all violations of mandatory safety stand -

ards require the imposition of a civil penalty. The

amount of the penalty is determined after a decision

by the secretary that a violation did in fact occur. A

failure by an affected mine operator to pay the penalty

requires the Secretary to file a m«tition for enforce-

ment in a district court which then considers de novo

all relevant issues not previously considered by a Court

of Appeals under Section 106. And one of the issues

would be the fact of violation."

This case leaves no doubt that the Petitioner was en-

titled to a de novo hearing on all the relevant facts and that

the Trial Court was in error in refusing to grant to the

12

Petitioner such a hearing. The Court was further in

error in limiting the Petitioner in its proof and further

instructing the jury that they are to consider only the

amount of the penalty rather than if the Petitioner was

guilty of a violation under the Act, Petitioner insists that

this Honorable Court under the law cited has no other

avenue but to reverse the Trial Court and send this cause

back for a new trial.

The Court of Appeals was wrong in the interpretation

of the application of 30 USC Section 816 [Section 106 of

the Federal Coal Mine and Safety Act of 1969] because

judicial review is applicable there where there would be

mandatory closing of the mine if the safety regulations

are to the point of being considered dangerous and the mine

would be shut down. Otherwise the procedures for con-

testing any violation is through a hearing before an Ad-

ministrative Judge and relitigating the violations in a pro-

ceeding under Section 109(a)(4) in the United States District

Court in which the mining company would be entitled to a

hearing on relevant issues of facts concerning any viola -

tions made by the coal operator. To take the interpreta -

tion of the panel of the Sixth Circuit Court of Appeals in

the instant case would have a ping pong effect whereby the

issues of facts would be appealed directly to the Court of

Appeals from a decision of the Secretary of the Interior or

his authorized representative, to-wit the Administrative

Law Judge, directly to the Court of Appeals and after all

issues of fact had been decided by the Court of Appeals on

appeal then sent back to the Secretary of Interior for en-

forcement. In the event that the Secretary of Interior is

unable to collect the penalties through the negotiation pro-

cess, then in that instance, the Secretary would go to the

United States District Court for collection and then once

again a hearing could be heard on all issues of fact that

13

are disputed that had not been decided by the United

States Court of Appeals. Such is not the intent of Sec-

tions 106 and 109 of the Federal Coal Mine Health and

Safety Act of 1969 but is the interpretation placed in it by

the United States Court of Appeals for the Sixth Circuit.

Section 106 which was codified at 30 USC 816, specifically

provides as follows:

"(a) Any order or decision issued by the Secretary

or the Panel under this act, except an Order or de-

cision under Section 109(a) of the act [30 USC Sec-

tion 819(a)] (emphasis supplied) shall be subject to

judicial review by the United States Court of Appeals

for the circuit in which the affected mine is located.

w

The violations involved here and the issues involved fall

clearly under Section 109 of the Act which was codified at

30 USC Section 819, There was never any judicial review

of the facts as contended under Section 106 of the Federal

Coal Mines Health and Safety Act of 1969 [30 USC 106].

Because the Petitioner in this matter was never threatened

with an immediate shut down of its mine, the Court of Ap-

peals concluded that an offending party cannot relitigate

these factual findings in an enforcement action under Sec-

tion 109 to collect penalties, clearly was an error.

The Honorable Court of Appeals wholly misapplied the

law in concluding that a jury was not required. The findings

of fact are absolutely important in this case in dealing with

the negligence or good faith of the petitioner herein. The

Trial Court limited the proof of the Petitioner in such a way

that it was a taking of the Petitioner's property without due

process.

This is the first and only case of this nature that has

reached the appeilate level of the Federal Courts. The

14

Petitioner is aware of one other case that was decided

in the United States District Court for the Eastern Dis -

trict of Tennessee, Northern Division and is only aware

of one other case being in the United States District

Court in Pennsylvania where this specific issue has been

litigated. However there is pending various violations

still against the Petitioner under the old Federal Coal

Mine Health and Safety Act of 1969 and your Petitioner

potentially could be prosecuted under that act and there

are numerous violations throughout the United States that

still could be litigated. Therefore, there is presented

an important question of law which has never been decided

by this Court, that should be decided by this Court be-

cause of the misinterpretation of the law not only by the

United States District Court for the Eastern District of

Tennessee, Northern Division but by the United States

Court of Appeals, Sixth Circuit. To allow the interpreta-

tion as the Sixth Circuit Court of Appeals has placed on

the Act would unduly burden the already overworked

Appellate system of our Federal Court system.

CON CLUSION

WHEREFORE, Petitioner respectfully pray that a Writ

of Certiorari be granted.

Respectfully submitted,

DOUBLE "Q", INC.

A. BENJAMIN STRAND, JR.

WILLIAM H. GODDARD

ATTORNEYS FOR PETITIONER

P, O. DRAWER H

DANDRIDGE, TENNESSEE 37725

15

APPENDIX

No. 78-1153

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

CECIL D. ANDRUS,

Plaintiff - Appellee

Vv.

)

)

)

)

)

DOUBLE "Q", INC., ‘

)

Defendant - Appellant

ORDER

(Filed March 25, 1980)

BEFORE: WEICK, LIVELY AND JONES, Circuit Judges

At issue is the entitlement of appellant Double "'Q", Inc.

under 30 U.S.C. $819(a)(4) to a de novo jury trial on the

facts of numerous violations of the Coal Mines Health and

Safety Act, 29U.S.C. §801, et seq., in an action brought

by the Secretary of the Interior to enforce civil penalties.

The district court held that §819(a)(4) did not provide for a

de novo trial on the factual findings of violations and only

permitted de novo review of the amount of the civil penalties.

We affirm.

The district court thoroughly discussed the statutory

language, legislative history and relevant case law. Upon

review of these sources, we are convinced that the district

court correctly interpreted §819(a)(4). Review of the Sec -

retary's factual findings of violations should proceed ac -

16

Order of the Court of Appeals

cording to §816. An offending party cannot relitigate

these factual findings in an enforcement action under

§819(a)(4) to collect the civil penalties.

[2]

The district court submitted the question of the amount

of penalty for each violation toa jury. The district

court then reviewed the jury's verdict and entered judg-

ment. We read §819(a)(4) as requiring the district

court to determine the amount of penalty. The jury's

role under §819(a)(4) is limited to making any neces -

sary findings of fact relevant to the amount of the

penalty, such as the negligence or good faith of the coal

mine operator, 30 U.S.C. §819(a)(1), or any unresolved

questions of fact which were not or could not have been

litigated in review proceedings before the court of appeals

pursuant to §816. Because such findings of fact were not

necessary in this case, a jury was not required. We

also believe that the use of a jury was not advisable, be-

cause its presence tended to confuse responsibility for

the determination of the amount of the penalty. However,

we find no basis for reversible error because the district

court determined in the last instance the amount of the

civil penalties. Therefore, a remand would serve no

useful purpose.

The district court is affirmed.

ENTERED BY ORDER OF THE COURT

/s/ JOHN P, HEHMAN

Clerk

ISSUED AS MANDATE: May 1, 1980

COSTS: NONE

17

No. 78-1153

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

CECIL D, ANDRUS,

Plaintiff -Appellee

Vv.

DOUBLE "Q", INC.,

Defendant- Appellant.

ORDER

(Filed April 22, 1980)

Decided and filed

BEFORE: WEICK, LIVELY and JONES, Circuit Judges

Upon consideration of appellant's petition for rehearing,

the Court is of the opinion that no new arguments are pre-

sented and that its previous Order is correct. There-

fore, the petition for rehearing is denied.

IT IS SO ORDERED.

ENTERED BY ORDER OF THE COURT

/s/ JOHN P. HEHMAN

Clerk

18

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TENNESSEE

NORTHERN DIVISION

CECIL D. ANDRUS, Secretary )

of the Interior, )

Petitioner

v. CIV. 3-77 -347

DOUBLE "Q", INC.,

Respondent )

MEMORANDUM

(Filed November 11, 1977)

This case presents the question of whether the Federal

Coal Mine Health and Safety Act of 1969 requires the Dis-

trict Court to review de novo, in an enforcement proceeding

to collect civil penalties, the factual basis of the violations

which resulted in the assessment of the penalties, in addi-

tion to a de novo review of the amount of those penalties.

The Secretary of the Interior, petitioner herein, repre-

sented in this Court by the Attorney General, maintains that

the Act requires de novo review of the facts constituting

the violations, 2

Similarily, the respondent, Double "Q", Inc., a partner-

ship operating a coal mine in Claiborne County, Tennessee,

maintains that review in this court is de novo as to all factual

issues, including whether the violations occurred.

1 this view is attributed to the Solicitor General of the United States in the

Secretary's brief,

19

Memorandum Opinion of the District Court

[2]

The Court has reviewed the Act and relevant case law,

and finds that the Act requires de novo review only of the

amount of the penalties.

Background

From December 1975 through March 1976, federal

mine inspectors, on behalf of the Mining Enforcement and

Safety Administration of the Department of the Interior

(M.E.S.A.) entered Double "Q's "Angela No. 1 Mine" in

Claiborne County acting under the inspection provisions

of the Act. Over this four month period, these inspec-

tors issued a total of twenty-five notices of violations of

mandatory health and safety standards promulgated by the

Secretary. Each violation was corrected within a short

period of time.

M.E.S.A,. then proceeded to assess a civil penalty for

each violation, as required under the Act, by filing two peti-

tions for assessment of civil penalty 7 with the Office of

Hearings and Appeals of the Interior Department. In re-

sponse to the two petitions, Double "Q" filed answers re-

questing an administrative hearing on the merits of the

violations listed in both petitions.

The administrative hearing was held in Knoxville on

October 27, 1976. M.E.S.A. was represented at the hear-

ing by counsel from the Department of the Interior's Re-

gional Solicitor General's Office in Atlanta, and Double "Q"

was represented by the same counsel that represented it

before this Court in the present action. The burden was

on M.E.S.A, at that hearing to establish that the violations

did occur. ‘The Administrative Law Judge rendered his

2

Two administrative cases were involved here, the first dealing with the

violations occurring in 1975, and the second covering the violations which

occurred in 1976,

20

Memorandum Opinion of the District Court

decision on February 4, 1977, finding that

[3]

all twenty-five violations had been proved and ordering

Double ''Q" to pay a certain penalty for each violation,

ranging from $30.00 to $100.00, with the total civil

penalty amounting to $1,823.00. An appeal of this de-

cision was dismissed and another order was entered,

dated March 30, 1977, ordering that the total amount

of $1,823, 00 be paid within thirty days. After the thirty

days expired, attempts by the local United States Attorney

to have the overdue fine paid failed. A petition for en-

forcement of the order was filed in this Court on Sep-

tember 1, 1977. After setting aside an erroneous de-

fault judgment, the Court granted Double "Q's request

for a jury trial. At this point the crucial question be-

came, as stated previously, what issues should be sub-

mitted to the jury. The Court announced its ruling prior

to trial and this Memorandum Opinion is filed to explain

the Court's rationale.

Civil Penalty Section

Section 819(a)(1) of Title 30 of the U. S. Code requires

the Secretary to assess a civil penalty against the operator

of a coal mine in which a violation occurs of a mandatory

health or safety standard. Each violation of these stand-

ards may constitute a separate offense, and the penalty

for each offense cannot exceed $10,000. This subsection

mandates six criteria for the Secretary to consider in de-

termining the amount of the penalty:

(1) the operator's history of previous violations;

(2) the appropriateness of such penalty to the size of

the business of the operator charged;

21

Memorandum Opinion of the District Court

(3) whether the operator was negligent;

(4) the effect on the operator's ability to continue in

business;

(5) the gravity of the violation; and

[4]

(6) the demonstrated good faith of the operator charged

in attempting to achieve rapid compliance after

notification of a violation.

Subsection (a)(3) gives the person charged with a penalty

the right to a public hearing, after which the Secretary

must render a written decision containing findings of fact

and setting the amount of penalty for each violation proved. °®

Subsection (a)(4) is the foundation for the present pro-

ceeding. It reads as follows:

(4) If the person against whom a civil penalty is

assessed fails to pay the penalty within the time pre-

scribed in such order, the Secretary shall file a peti-

tion for enforcement of such order in any appropriate

district court of the United States. The petition shall

designate the person against whom the order is sought

to be enforced as the respondent. A copy of the peti-

tion shall forthwith be sent by registered or certified

mail to the respondent and to the representative of the

miners in the affected mine or the operator, as the

case may be, and thereupon the Secretary shall certify

and file in such court the record upon which such order

sought to be enforced was issued. The court shall

have jurisdiction to enter a judgment enforcing, modi-

fying, and enforcing as so modified, or setting aside

Srhis subsection was at issue in National Coal Operators Ass'n, v. Kleppe,

423 U.S. 388 (1976). The Supreme Court ruled that formal findings of

fact are required only when a hearing is requested,

22

Memorandum Opinion of the District Court

in whole or in part the order and decision of the Sec -

retary or it may remand the proceedings to the Sec-

retary for such further action as it may direct. The

court shall consider and determine de novo all rele-

vant issues, except issues of fact which were or could

have been litigated in review proceedings before a

court of appeals under section 816 of the title, and

upon the request of the respondent, such issues of

fact which are in dispute shall be submitted to a jury.

On the basis of the jury's findings, the court shall

determine the amount of the penalty to be imposed.

Subject to the direction and control of the Attorney Gen-

eral, as provided in section 507(b) of Title 28, attorneys

appointed by the Secretary may appear for and represent

him in any action to enforce an order assessing civil

penalties under this paragraph."

(S]

Focusing on the fourth, fifth and sixth sentences of

this subsection, the following observations are pertinent.

The power of the Court is limited in the fourth sentence,

to entering a judgment;

(1) enforcing; or

(2) modifying, and enforcing as so modified; or

(3) setting aside in whole or in part the order and de-

cision of the Secretary.

Additionally, the Court may "remand the proceedings to

the Secretary for such further action as it may direct."

This language is very similar to the language describing

the power of appellate courts in reviewing orders of the

Secretary in Section 816(b) of Title 30.4 This type of re-

4

30 U.S.C. § 816(b) provides:

"Evidence; conclusiveness of findings; orders

(b) The court shall hear such petition on the record made before the Sec-

retary or the Panel, The findings of the Secretary or the Panel, if supported

(Continued on next page)

23

Memorandum Opinion of the District Court

view power is commonly associated with a limited scope

of review, e.g., Section 816(b) specifically limits factual

review to a "substantial evidence" test. Furthermore,

remanding the proceedings for further action would not

appear to be a proper disposition of the action if every

determination made in the administrative proceedings

had to be reached de novo in the district court.

The fifth sentence of this subsection requires the Dis -

trict Court to determine de novo "all relevant issues"

except issues of fact which were or could have been "liti-

gated in review proceedings before a court of appeals

under Section 816." The

[6]

- only way issues of fact can be "litigated" in the appellate

courts is under the "substantial evidence" test. It would

be inconsistent, if not unfair, for Congress to have the

standard of review vary depending on the fortuity of the

type of order which is at issue.° It would appear that

Congress logically intended to have facts of the same type

as those reviewed by appellate courts, under Section 816,

reviewed under the same standard of review in the dis-

trict courts under Section 819. This would make the

substitution provision, whereby facts litigated, or those

that could have been litigated, under Section 816 are bind-

4(Continued) by substantial evidence on the record considered as a whole,

shall be conclusive. The court may affirm, vacate, or modify any order

or decision or may remand the proceedings to the Secretary or the Panel for

such further action as it may direct." (Emphasis Added)

Sorders to withdraw all miners pending termination of an imminent danger

are reviewable by Courts of Appeals under Section 816. Orders to pay civil

penalties because of violations of mandatory standards, including violations

for which no withdrawal order was issued, are reviewable in district courts

under Section 819.

24

Memorandum Opinion of the District Court

ing in District Court, a logical provision to prevent the

duplication of judicial proceedings.

This conclusion leaves the Court with the problem of

explaining the meaning of the language referring to de

novo review. An answer to the problem would be ap-

parent if there was a kind of factual determination which

is presented in the enforcement proceeding in District

Court that would never be reached in the appellate re-

view process. [If there was a kind of factual determina -

tion reached only in district court proceedings under

Section 819 proceedings and if, for some reason, it

would warrant special consideration such that de novo

review would be logical, then Congress could logically

have intended to apply a different scope of review only to

that kind of factual determination.

(7]

One factual determination necessary in an enforcement

proceeding in District Court that would never be considered

in the appellate process is the determination of penalties.

By leaving the amount of civil penalties subject to de novo

review, Congress was offering protection to the offender

where it is most important, his pocketbook. At the same

time other factual findings made during the extensive ad-

ministrative procedures are subject only to a substantial

evidence review, thereby encouraging the full use of the

administrative procedures set up under the Act.

In reaching the de novo decision on the penalties, the

trier of fact in the District Court is bound to follow the six

criteria enumerated in the statute. This procedure is con-

sistent with the earlier language in this subsection that re-

fers to this action as an "enforcement" proceeding as opposed

to a "civil action” which contemplates the usual, completely

de novo trial.

25

Memorandum Opinion of the District Court

Finally, the sixth sentence of this subsection gives the

Court the power to determine the amount of the penalty

based on the jury's findings. Reading the Act as a whole,

and considering the jury's usual role in determining

dollar amounts of liability, the Court is of the opinion

that this provision allows the Court a limited review of the

jury's verdict, setting it aside only when a reasonable

range was violated, based on what a rational person could

conclude as to the facts.

The issue presented in this interpretation of the statute,

as far as the Court can determine, is a question of first

impression. There is support for the Court's position,

albeit dictum, in at least two appellate court opinions.

See National Coal Operator's Ass'n. v. Kleppe, 423 U.S.

388 (1976) (Burger, C.J., for a unanimous court); and

Eastern Associated Coal Corp. v. Interior Bd. of Mine

Operations Appeals, 491 F.2d 277 (4th Cir, 1974).

[8]

In the Coal Operators’ decision, Chief Justice Burger

referred, more than once, to the enforcement proceeding

authorized in this statute as an entitlement to a trial de

novo as to the amount of the penalty. The initial sentence

of the opinion refers to a civil penalty as "being enforce -

able only by way of a subsequent judicial proceeding in

which the operator is entitled to a trial de novo as to the

amount of penalty." (Emphasis added), Id., at 390.

Later in the opinion reference is made to the operator's

option, upon having a penalty assessed, to "obtain de novo

judicial review of the amount of the penalty by refusing to

pay it and awaiting the Secretary's enforcement action in

the district court."" (Emphasis added). Id., at 396.

While these portions of the opinion obviously lend support

to the interpretation presented herein, the Supreme Court

specifically noted that it was not deciding the question on

26

Memorandum Opinion of the District Court

the merits. Id., at 393, n. 3. But it is apparent that

the Supreme Court was aware of the problem which

would be presented to district courts if all of the issues

in these coal cases were to be tried de novo,

Presumption Against De Novo Review

Absent specific requirements to the contrary, courts

will presume that administrative proceedings are not

subject to de novo review. See Chandler v. Rouderbush,

425 U.S. 840, 861 (1976). In the present case the Act

does not clearly require de novo review of both the

penalties and the facts concerning the violations. The

administrative record developed below is voluminous

and includes, among other items, 126 pages of transcript

of the hearing. The Court is of the opinion that it would

frustrate these extensive administrative procedures if

the entire administrative record was to be completely

[9]

disregarded whenever a respondent failed to pay an

assessed penalty, thereby forcing the Secretary to file a

petition for enforcement of the assessment order in a dis-

trict court. However, de novo review of the amount of

the penalty would serve to protect the operators in that

the actual amount of the penalty could be redetermined

ethier by a jury of his peers or by the Court.

Legislative History

Review of the legislative history affords little addi-

tional insight. The initial Senate Bill (S. 2917) contained

the specific requirement that review in the district court

was, as to all factual issues, only a "substantial evidence"

review. 115 Cong. Rec. 28256 (1969). Next the House

passed an amended version of the Senate Bill (H.R. 13950)

which failed to mention a standard of review, referring

27

Memorandum Opinion of the District Court

only toa "civil action. . . to collect the penalty." 115

Cong. Rec. 32064 (1969). ‘The Bill reported out of con-

ference is what appears in the Code now. The Con-

ference Report simply rephrases the language that appears

in the statute. The final bill no longer refers to a "civil"

action" but terms the proceeding as one of "enforcement".

In light of the failure to specifically include language re -

quiring complete de novo review of all the facts, the

Court believes a reasonable interpretation of the Act is

that Congress meant to provide for de novo review of the

factual conclusion required in order to assess a penalty

and of the amount of the penalty, and for substantial evi-

dence review of the underlying administrative record wherein

the violations are determined to have been proved or not

proved.

Review of the Record Below

The Court has reviewed the administrative record be-

low and has found substantial evidence, on the record as a

[10]

whole, to support the factual conclusions of the Secretary

that the violations did occur.

Conclusion

For the foregoing reasons, it is ORDERED that the

Secretary's finding that twenty-five violations occurred in

the mine operated by this respondent, be and the same

hereby is affirmed. It is further ORDERED that, because

the jury's findings as to the amount of penalties are rea-

sonable, the findings of jury on the amount of the penalties

be, and the same hereby are, entered as the final judg-

ment in this enforcement proceeding.

Order Accordingly.

/s/ ROBERT TAYLOR

United States District Judge