Eleventh Circuit Holds Civil Penalties Can Be Issued Against Agents Of LLCs Under The Mine Act

The Mine Safety and Health Administration issued citations to an Alabama underground coal mine owned by an LLC for failing to abide by the requirement that a certified person walk through the mine’s ventilation system every seven days and take measurements at specific locations to ensure that the system is working properly.  See 30 C.F.R. § 75.364(a)(2)(iii).  Several months later, MSHA filed petitions for civil penalties against the mine’s acting superintendent and the mine’s general foreman pursuant to 30 U.S.C. § 820(c).  After an ALJ affirmed the civil penalties and the Review Commission declined review, the two individuals appealed to the Eleventh Circuit.

The Mine Act provides, “Whenever a corporate operator violates a mandatory health or safety standard … any director, officer, or agent of such corporation who knowingly authorized, ordered, or carried out such violation … shall be subject to the same civil penalties, fines, and imprisonment that may be imposed upon a person under subsections (a) and (d).”  30 U.S.C. § 820(c) (emphasis added).  The mine superintendent and general foreman argued that the statute’s use of the word “corporation” meant it could apply only to agents of a corporation and not to agents of an LLC, like themselves.  The Eleventh Circuit agreed that “corporation” was ambiguous as used in the statute but that interpreting “corporate operator” and “corporation” to only cover one type of commercial entity would frustrate Congress’s intent to pierce all corporate forms that provide a liability shield for safety violations of the Mine Act.  The court determined that an LLC is a “corporation” for purposes of the Mine Act and that civil penalties can be assessed against an LLC’s agents.