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The AWC Victory – Lessons for the Future

October 1998

Co-Author: Timothy M. Biddle and R. Timothy McCrum.

A few weeks ago, the U.S. Court of Appeals for the DC Circuit put an end to the infamous abnormal white center ("AWC") cases. Although the wounds from MSHA's AWC allegations will take a long time to heal, there are benefits for companies that fought to the end. The obvious benefit is the vindication that comes with victory - vindication, and freedom from liability and the attendant civil penalties. Another, perhaps less obvious, benefit comes from what these cases teach us.

The story of the AWC cases is a long one and many of our readers know it well. For those who do not, we begin with a short summary.

In 1991, with much public fanfare (including the Secretary of Labor's characterization of the coal industry as one "addicted to cheating"), MSHA accused about 500 companies that operated 847 surface and underground coal mines across the country of tampering with their respirable dust samples. Those companies had submitted dust filters to MSHA that had what MSHA called "abnormal white centers." One MSHA industrial hygienist convinced his superiors that a white center on a filter meant that respirable dust had been removed from it - and he convinced them that only tampering could cause this phenomenon. Why would someone tamper with a dust sample filter? For MSHA, it was a no-brainer: to fool the agency into believing they were complying with mandatory respirable dust limitations.

But is was a different story from the companies' standpoint. Most of them denied and contested the allegations, forcing MSHA to prove its case. Seven years of litigation followed. In the end MSHA failed to prove its charges. Reflecting on those years of litigation, we believe many "lessons" were learned that can be put to use in other cases of overzealous regulatory enforcement. Here are six that stand out:

Lesson No. 1: Cooperate and Graduate

As the old saying goes, "many hands make light work." In the AWC cases, many companies came to the same lawyers and most of those lawyers split the fees for their work among their clients for work that benefited all of them. For example, we at Crowell & Moring had as many as twenty-seven clients that contested MSHA's charges and we split our fees and expenses for work on issues common to all of them. That kept legal fees down on an individual company basis so companies could afford to litigate a massive and complicated case against MSHA.

Another example of "cooperate and graduate" was that most of the lawyers who had multiple clients agreed that the interests of their clients would be served more efficiently and economically if counsel were to cooperate in handling issues common to all AWC cases. Thus, we agreed with other firms on strategy and divided up the tasks for discovery, motions, coordination of scientific experts, trial preparation, trial and briefing during all stages of the case. Six firms representing about 110 companies cooperated on common issues for seven years, which saved companies an enormous amount in legal fees.

The lesson here is that when companies have common or closely aligned interests, it makes sense for them to work together to identify and accomplish goals - even if they are not represented by the same lawyers. Just as a chorus is louder than a single voice, a group of companies working together toward a common goal can be much more effective than a company that acts alone.

Lesson No. 2: Never Say Always

Early in the AWC litigation, we needed to know whether MSHA thought all AWCs were caused by tampering. To find out, we asked MSHA the following question in our interrogatories: State whether it is the Secretary's contention that an alleged AWC on the cited sample could not occur in any manner other than by the intentional act of an individual.

The phrase "in any manner" in that question was bait. MSHA took it by answering "yes." When MSHA said that AWCs could only be caused by intentional conduct, we knew that if we could show any other reasonable cause of AWCs, we would win. Lawyers know absolute statements like "not in any manner," "only," "always," or "never" are unwise because there are few absolutes - at least few that engender legal controversies. Once we got MSHA to state its absolutist view that all AWCs were caused by tampering, our goal was greatly simplified: we needed to find causes for AWCs that did not involve intentional conduct. In the end, our scientific research demonstrated that AWCs could be caused by many unintentional events and that MSHA could not prove its "only cause" allegation. The companies prevailed and MSHA's "everybody tampered" zealots were discredited. The lesson here is obvious: if MSHA (or anybody) takes an absolute position with which you do not agree, make them to justify it. In most circumstances, there are too many variables to allow an absolute conclusion.

Lesson No. 3: Good Science Wins

The coal companies won the AWC cases because they were able to prove that there were causes for AWCs that did not involve tampering. Those causes were discovered because companies joined to hire top-notch scientists in several relevant disciplines. With our experts' scientific method and state-of-the-art equipment, their research was extensive and expensive, but in the end, revealed many reasonable alternative causes for AWCs that did not involve tampering. Our scientists didn't have all the answers (which made them credible), but they did have the winning answer: AWCs could be caused by accidental events and by variables in the manufacture of dust filters. Once the trial judge accepted their conclusions, MSHA had lost the AWC cases because it had little evidence to support its charges other than the filters themselves.

The lesson here is that good science wins cases. If scientific proof is necessary, use the best scientists you can afford (and see Lesson No. 1 re pooling resources).

Lesson No. 4: Don't Believe Everything You Read In The Newspaper

Beginning with the hyperbole from the Secretary of Labor's bully pulpit ("an industry addicted to cheating"), MSHA grabbed the public relations high ground on the AWC issue and held it during the time that mattered. Although MSHA's "tampering is rampant in the coal industry" allegations were broadcast far and wide, the media took no notice later when MSHA could not back up its accusations. As far as the press was concerned, the coal industry had done something bad and had been caught. End of story. Although their ultimate victory in the AWC cases made many companies feel good, nothing happened in the media to make them look good to the public. MSHA certainly issued no press releases when it lost.

The lesson here is that the media believes the government most of the time and the media molds public opinion. The public doesn't often get, as Paul Harvey says, "the rest of the story."

Lesson No. 5: Some Cases Are Legal Acupuncture

After MSHA lost at trial in 1993 and then lost its appeal to the Commission in 1995, most everyone hoped MSHA would not appeal further - including many of MSHA's enforcement officials and lawyers who were ready to admit a mistake and get on with more current issues. But by then other issues involving respirable dust sampling had surfaced. In a classic Washington maneuver, Davitt McAteer, who heads MSHA, offered to drop MSHA's AWC case appeal for concessions from the National Mining Association ("NMA"), the industry's trade association, on dust sampling changes in the future. In short, the AWC case appeal became trade-bait. But McAteer's negotiations with NMA failed in 1996, so he ordered the appeal to proceed. The result? MSHA lost again.

MSHA's on-again, off-again posture in the AWC cases is a good example of what we call legal acupuncture: a litigant pushing a position in a case, not because he expects to win, but because something hurts somewhere else.

The lesson is that we always must recognize that our opponents may have an objective different from winning the case at hand.

Lesson No. 6: Stand By Your Principles

The AWC cases came to a successful conclusion because sixty-nine companies were stalwart in their belief that MSHA had wrongly accused them of dust sample fraud. Although it would have been cheaper for most of them to have simply paid penalties for their AWC citations (thereby admitting that tampering had occurred), those companies were vindicated, and they vindicated the entire industry - a vindication appreciated by their front-line management, their health and safety personnel, and, most particularly, the miners who did their dust sampling. Our American heritage is filled with examples of people and companies who have had the courage to stay on the field until the game ends - because they are right. We should never forget the bigger picture - that there are sometimes critical costs and benefits that must be calculated even though they may not show up on this year's balance sheet.

The lesson? If you're right, fight - but, of course, keep the cost in sight.