Agreement lets coal operator post bond

Agreement lets coal operator post bond

An Eastern Kentucky coal operator accused of chronic failure to pay federal health and safety penalties has agreed to post a bond to cover future fines.

Stanley Osborne of Pike County will post a $20,000 bond within 10 days of becoming an operator or agent of a coal company, according to an agreement filed yesterday in federal court.

The agreement also includes an injunction barring Osborne from failing to pay future fines. He could be held in contempt of court if he violates the deal.

Osborne, his attorney and representatives of the U.S Mine Safety and Health Administration have signed the deal. U.S. District Judge Danny Reeves has not yet given it final approval.

MSHA filed a lawsuit in February 2006 against Osborne and two of his companies, Misty Mountain Mining and Midgard Mining LLC, claiming they had failed to pay more than $200,000 in fines for health and safety violations.

The lawsuit was novel because it did not seek an order for Osborne to pay those past fines, but rather an injunction barring him from failing to pay future fines. MSHA also asked that Osborne be forced to post a bond to cover future fines.

It was the first lawsuit of its kind in the nation. Less than a month later, the agency filed a similar lawsuit against Harold Simpson of Ewing, Va., who operated coal mines in Eastern Kentucky and had failed to pay more than $1 million in fines.

At the time it filed the lawsuits, MSHA had faced criticism that its fines were too low in many cases and that it did a poor job of collecting them.

The penalty structure has since changed. This year, MSHA has levied large proposed fines against several coal companies accused of flagrant safety violations, including a proposed fine of $761,000 against a Harlan County mine.

Osborne and his attorney were not available for comment yesterday.

No settlement has been filed in MSHA’s companion lawsuit against Simpson. Simpson pleaded guilty to fraud earlier this year in an unrelated federal criminal case and is awaiting sentencing.

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