Argued April 15, 2013
Petition for Review of an Order of the Federal Mine Safety and Health Review Commission Nos. LAKE 2010-1-R, LAKE 2010-2-R, LAKE 2010-714.
Before Ripple, Rovner, and Williams, Circuit Judges.
Ripple, Circuit Judge.
Mach Mining, LLC ("Mach") operates the Mach No. 1 Mine (the "Mine"), an underground coal mine, near Johnston City, Illinois. Mach mines the coal using the "longwall" method, which involves preparing "panels" of coal for mining by drilling a series of tunnels to provide for ventilation, travel routes and access to the working areas of the mine. Once a panel is ready for mining, the longwall machine moves along the panel "shearing" the coal from the wall (much like a meat slicer in a deli) and using a conveyor belt to transport the sheared coal out of the mine. The Mine consists of five panels, at least some of which are over three miles long.
As an underground coal mine operator, Mach is subject to a significant number of safety regulations, including the requirement that it adopt a ventilation plan "suitable to the conditions and the mining system of the coal mine and approved by the Secretary" of Labor. 30 U.S.C. § 863(o). A mine operator obtains approval by submitting a written plan to, and usually engaging in discussions with, district managers in the Mine Safety and Health Administration ("MSHA"). Mach's ventilation plan utilizes a "push-pull" system which combines blowing large volumes of fresh air into the mine with an exhaust system that pulls out air containing methane, coal dust and other particles. Mach evaluates the effectiveness of its system by setting up monitoring points throughout the mine, including at the longwall face and at the top of the ventilation shaft. An MSHA district manager approved this ventilation system for Panels 1 and 2, but refused to grant approval when Mach proposed the same system for Panel 3. Over the course of eight months, Mach and MSHA negotiated approval of the plan for Panel 3. The administrative law judge ("ALJ") found that the negotiations "included telephone calls, emails, letters and meetings, at both the district and national level." Mach Mining, LLC v. Sec'y of Labor, 32 FMSHRC 149, 151 (2010).
MSHA continued to withhold approval of Mach's ventilation plan for Panel 3, and Mach sought administrative review. Although the mining statutes establish a formal procedure for obtaining administrative and judicial review of a citation for failure to observe a mandatory mine safety or health standard, there is no explicit statutory process for obtaining review of a district manager's refusal to approve a ventilation plan. Instead, in order to obtain review, mine operators follow a procedure outlined in the MSHA policy manual. Following that procedure,  Mach notified MSHA that it intended to operate without an approved ventilation plan for the purpose of obtaining administrative review. MSHA then issued two citations for "technical violations" which Mach appealed to the Federal Mine Safety and Health Review Commission (the "Commission").
At a hearing, an ALJ for the Commission determined that the Secretary had the burden of proving that the district manager was not arbitrary and capricious in refusing to approve Mach's ventilation plan. The ALJ thus refused to consider additional evidence tendered by Mach that had not been presented to the district manager during informal negotiations. Based on the record before her, the ALJ deter- mined that the district manager's refusal to approve the ventilation plan was not arbitrary and capricious.
A divided panel of the Commission affirmed the ALJ's decision. As to the proper standard of review, three commissioners held that the ALJ was correct in considering only whether the district manager's decision was arbitrary and capricious. Sec'y of Labor v. Mach Mining, LLC, 34 FMSHRC 1784, 1790 (2012). They relied on language in the Mine Act that suggests that the Secretary has discretion in deciding whether to approve a ventilation plan, id. at 1791, and noted that the Commission had applied an arbitrary and capricious standard in reviewing denial of emergency response plans, id. at 1792.
Two dissenting commissioners believed that a more plenary review was required. They cited prior Commission decisions in which the ALJ independently had weighed evidence and required the Secretary to show by a preponderance of the evidence that the operator's proposed ventilation plan was unsuitable to the mine and that the Secretary's own plan was suitable. Id. at 1811 (citing Sec'y of Labor v. Peabody Coal Co., 18 FMSHRC 686, 690-91 (1996); Sec'y of Labor v. Peabody Coal Co., 15 FMSHRC 381, 388 (1993)). These commissioners argued that the Commission should not change the burden and standard for reviewing ventilation plan disputes without a reasoned explanation. They also suggested that emergency response plans have a different standard of review because the process for approving such plans is set forth by 30 U.S.C. § 876, which does not apply to ventilation plans. Id. At 1812-13.
On the merits, the majority of the Commissioners held that the district manager did not abuse his discretion in refusing to approve the various aspects of Mach's ventilation plan. Id. at 1809. Because the dissenting Commissioners believed that the ALJ applied the wrong standard, they did not address the merits other than to note that the ALJ may have reached a different conclusion had she applied the preponderance of the evidence standard. Id. at 1813-14.
Mach filed a timely petition for review to this court. It argues that it had a right to a de novo hearing on the merits before the ALJ and that the ALJ should not have applied the arbitrary and capricious standard. It also maintains that the ALJ erred by excluding or discounting certain evidence and that the ALJ's factual findings are not supported by substantial evidence.
We have jurisdiction under 30 U.S.C. § 816(a)(1). For the reasons set forth in this opinion, we deny the petition.
As this case comes to us, the major point of contention between the parties is whether the Commission, the authority charged with adjudicating citations issued by the Secretary through MSHA, should review deferentially the Secretary's refusal to approve a ventilation plan. Stated more precisely, or at least more practically, when the Secretary refuses to approve a ventilation plan, is the mine operator entitled to a de novo hearing before the Commission, or must the Commission defer to the Secretary's decision on the record assembled by the district manager and reverse that determination only if the Secretary fails to establish that the decision was not arbitrary and capricious?
In Steadman v. Securities & Exchange Commission, 450 U.S. 91, 95 (1981), the Supreme Court noted that, when faced with the task of ascertaining the applicable degree of proof, a court first must ascertain whether Congress has spoken on the issue. If Congress has spoken, that is, of course, the end of the matter. If Congress has not spoken, courts must fashion the applicable standard. In undertaking such a task, however, we must choose a standard compatible with the congressional policies articulated in the general legislative scheme and choose a standard that best reflects the values and choices that Congress has identified. See id. at 97-102 (examining the language and history of section 7(c) of the Administrative Procedure Act ("APA") to determine what standard of proof Congress intended to be applied). We now embark on that analytical journey.
Mach submits that the question before us requires a straightforward application of the cardinal rule of statutory interpretation: Courts must adhere to the plain meaning of the statutory language. Noting that the Secretary's refusal comes before the Commission as the adjudication of a citation, albeit a citation for a "technical violation, " Mach submits that every proceeding to review a citation, including citations for "technical violations, " is an adjudicative proceeding that must be conducted in accordance with section 554 of the APA. See 30 U.S.C. § 815(d). In Mach's view, those procedures require the exercise of de novo review of the Secretary's judgment. It notes that, in Steadman, 450 U.S. at 102, the Supreme Court held that the standard of proof that applies in hearings governed by section 554 of the APA is preponderance of evidence.
Mach is correct in stating that our starting point in analyzing the question before us must be the plain wording of the statute enacted by Congress. However, we cannot apply this rule to selected words divorced from the context in which they appear. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132-33 (2000) ("The meaning—or ambiguity—of certain words or phrases may only become evident when placed in context. It is a 'fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.'" (citation omitted) (quoting Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 809 (1989)); Zeigler Coal Co. v. Kleppe, 536 F.2d 398, 405 (D.C. Cir. 1976) (examining the Federal Coal Mine Health and Safety Act of 1969 "[o]n the whole" to determine whether adopted and approved ventilation plans should be enforced as mandatory standards). Our ultimate objective must be to give effect to the congressional intent embodied in the entire statute. We therefore turn to an examination of the overall text and structure of the statute to ascertain its intent.
Examination of the text and the structure reveals that the regulation of mining industry practices has been committed by Congress to a bifurcated structure. In the simplest of terms, the statutory scheme contemplates that the Secretary sets mandatory health and safety standards, either through the formal agency rulemaking process, 30 U.S.C. § 811, or through plans submitted by industry participants for approval, id. § 862(a) (roof plans); id. § 863(o) (ventilation plans); id. § 875 (emergency shelter plans); id. § 876(b)(2)(C) (emergency response plans); see also Zeigler Coal Co., 536 F.2d at 409 (holding that the "requirements of duly adopted ventilation plans generally are [as] enforceable" as other mandatory standards (footnote omitted)). The Secretary also must enforce rules and standards once they are promulgated or approved. 30 U.S.C. §§ ...