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Murray Energy subsidiary sues federal regulators

Published: Wednesday, Nov. 19 2008 8:11 a.m. MST

EAST ST. LOUIS, Ill. — A coal company fined $1.46 million last month for safety violations has sued federal mine regulators, the latest example of escalating tensions between coal operators and the U.S. Labor Department's Mine Safety and Health Administration.

The federal lawsuit was filed Monday by American Coal Co., a subsidiary of Murray Energy. That company, owned by Bob Murray, entered the national spotlight last year when nine people died in one of the company's Utah mines.

American Coal claims in its lawsuit that federal inspectors issue citations according to quotas and engage in abusive monitoring. Other operators have said the agency has become heavy-handed to counter criticism of questionable oversight after a string of high-profile mine accidents that left dozens dead in recent years.

In the first 10 months of fiscal 2008, MSHA fined mine operators $97.4 million — a 141 percent increase over the previous fiscal year total. Citations and orders for various infractions are up almost 8 percent.

Operators say that has stifled productivity, increased costs and kept mine operators from cashing in on soaring global demand for coal.

Phil Smith, a United Mine Workers spokesman, said he considers the legal action proof that "MSHA is finally doing its job" and enforcing the law.

"I've seen a lot of coal companies whining about increased regulation costing them money," Smith said. "What this tells us is that they were skating by without doing the things they were properly supposed to be doing, and now that MSHA is getting a little tougher with enforcement it may cost them a little bit more money. From our perspective, that's not necessarily a bad thing."

In its lawsuit, American Coal asked a federal judge to stop "unfounded and baseless violation citations" under an unconstitutional quota system, which American Coal worries could cumulatively force it to shut down its Galatia operation in southern Illinois.

"Continued mining operations are the lifeblood of Plaintiff's business," the lawsuit read. Without court intervention, American Coal "could cease to exist as a viable commercial entity."

Messages left Tuesday by The Associated Press with MSHA were not immediately returned.

Even before filing its lawsuit, American Coal in June pressed the Labor Department's internal watchdog to investigate MSHA's inspection practices because of its monitoring of American Coal's Galatia complex, which encompasses three mines in southern Illinois' Saline County.

The complaint — like the lawsuit — claims the agency instructed mine safety inspectors to issue a minimum number of violations, failed to tell American Coal that inspectors were at the Galatia site and did not allow company representatives to be present during inspections, in violation of federal law.

Last month, MSHA said safety regulations were repeatedly violated at the Galatia operation between September 2007 and January, leading to nine citations for flagrant violations.

Inspectors said pre-shift safety inspections missed crumbling roof material and that highly combustible coal dust was allowed to accumulate along conveyer belts that can spark coal mine fires, sometimes leading to deadly explosions. In another instance, an inspector said he saw a maintenance supervisor reach into a live 480-volt electrical panel, leading to a $161,800 fine.

Murray called the fines politically motivated retaliation for the company's decision to ask the Labor Department to investigate the agency, and are "one more example of MSHA trying to rehabilitate its own public image at the expense of mining companies and business."

After cave-ins at the Crandall Canyon mine in Utah in August 2007 led to the deaths of six miners and three would-be rescuers, MSHA fined Murray $1.6 million for violations that investigators say directly contributed to the miners' deaths. It also asked federal prosecutors to consider criminal charges.

But the agency itself was faulted by the Labor Department for lax oversight before the collapse and for its handling of the rescue.

Crandall Canyon has since been sealed.

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