Chapter 7. Michael O. McKown 1 Murray Energy Corporation Pepper Pike, Ohio

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1 CITE AS 31 Energy & Min. L. Inst. 7 (2010) Chapter 7 Preparing for and Conducting Internal Accident and Incident Investigations: How to Protect the Attorney-Client and Work-Product Privileges and Prevent Subsequent Remedial Measures from Being Used Against You Michael O. McKown 1 Murray Energy Corporation Pepper Pike, Ohio Synopsis Overview Preparedness Understanding Statutory and Regulatory Requirements Regarding Proper Documentation and Training of Key Personnel Regarding Their Roles During an Investigation Providing Notification to MSHA Regarding the Accident and Preserving Evidence in Accordance with the Mine Act s Reporting Requirements [1] Knowing When to Report an Accident Under the Mine Act [2] Definition of Accident in 30 C.F.R (h) [3] Reporting Requirements Under the Mine Act and Applicable Regulations [4] Preservation of Evidence and Relevant Documents Establishing Standard Investigatory Procedures Documenting the Investigation [1] The Right to Accompany Inspectors [2] Traveling with the Inspector Employee Interview Process Avoiding Conflicts Between Representation of the Company and the Individual Employees [1] The Use of Upjohn Warnings [2] Attorney Ethics Rules Regarding Conflicts of Interest The author wishes to thank Gwen R. Pinson, Dinsmore & Shohl, Lexington, Kentucky, for her assistance in the research and writing of this chapter.

2 7.01 ENERGY & MINERAL LAW INSTITUTE [a] ABA Model Rules of Professional Conduct [b] An Illustrative Case Analyzing and Applying the Ethics Rules in the Context of a Criminal Proceeding Arising Under the Mine Act [3] Right to Have Company Representative and/or Counsel Be Present During MSHA Interviews Understanding the Attorney-Client Privilege and the Work-Product Doctrine and Protecting Investigatory Materials from Disclosure [1] Attorney-Client Privilege [2] Work-Product Doctrine [3] Role of In-House Counsel: Business vs. Legal [4] Protecting the Privileges and Avoiding Waiver [a] Concept of Waiver Generally [b] Federal Rule of Evidence [5] Assertion of Privilege and Indemnification of Employees Can Be Used Against a Corporation in a Criminal Proceeding [a] DOJ Position Regarding Effect of Privilege Assertion/Waiver upon Degree of Cooperation in a Criminal Investigation [b] DOJ Position Regarding Indemnification of Employees Preventative Steps as Subsequent Remedial Measures Under Federal Rule of Evidence 407 and Similar State Rules of Evidence Audit Following an Accident: MSHA Program Policy Manual, Vol. III, Part Conclusion Overview. In the wake of several tragic accidents that have occurred since 2005, garnering national media attention, mine operators face increased scrutiny in today s heightened enforcement climate. While the industry focuses on safety, making every effort to ensure that accidents like the ones which have occurred in recent years are prevented, operators must also ensure that their management personnel and their workforce are properly trained and adequately prepared to respond if and when tragedy strikes. In addition to emergency response rescue and recovery efforts, mine personnel must also 228

3 INTERNAL INVESTIGATIONS 7.02 be educated about the investigative process that is sure to follow any serious accident. Effective preparation and participation in the external investigation that will be conducted by the Mine Safety and Health Administration (MSHA) and the corresponding state agency largely depends upon a mining operation having its own internal accident investigation procedures in place. 2 Mine employees must not only be educated on what steps need to be taken in the crucial hours and days following an accident, but also why those steps are important. In addition, management personnel need to understand the importance of engaging outside counsel and how to use that counsel effectively Preparedness Understanding Statutory and Regulatory Requirements Regarding Proper Documentation and Training of Key Personnel Regarding Their Roles During an Investigation. Before any investigation process can be successful, all key personnel must receive proper training regarding the applicable law, the Federal Mine Safety and Health Act of 1977 (the Mine Act). 3 As will be demonstrated below, it is critical during the investigation process to maintain proper documentation. The regulations enacted to implement the Mine Act delineate specific responsibilities with regard to conducting daily pre-shift and on-shift inspections of the mine as well as the requirements for posting information and retaining records regarding any hazardous conditions discovered during these inspections. 4 Following the report(s) of the actual incident that triggered 2 While the discussion in this chapter focuses primarily upon interactions with MSHA inspectors, most all of the guidance offered herein is applicable to dealing with state mine inspectors as well. Moreover, the term inspector is used generally to refer to both MSHA inspectors and investigators. 3 Federal Mine Safety and Health Act of 1977, 30 U.S.C. 801 (2002) et seq., amended by Mine Improvement and New Emergency Response Act of 2006, Pub. L. No (codified as amended in scattered sections of 30 U.S.C.)(hereinafter cited as The Mine Act). 4 See 30 C.F.R (2010)(requiring that a pre-shift examination be conducted by a certified person within three hours before the beginning of any eight-hour period 229

4 7.02 ENERGY & MINERAL LAW INSTITUTE the investigation, these records will be some of the first documents requested by MSHA personnel and state officials conducting an accident investigation. As such, mine operators must ensure that their pre-shift and on-shift examiners and the mine foreman are familiar with these requirements and that any inspection reports or records of hazardous conditions discovered during inspections are properly maintained. 5 Making sure that key personnel are aware of the enforcement mechanisms available to MSHA and the burdens of proof associated with each one is also critical. Understanding MSHA s graduated enforcement scheme and what it must prove in order for a significant and substantial (S&S) citation issued under Section 104(a) of the Mine Act 6 or an unwarrantable failure citation issued pursuant to Section 104(d) 7 to be upheld if contested will help mine during which any person will be working or traveling underground to, among other things, inspect for hazardous conditions, test for methane and oxygen levels, and determine if the air is moving in its proper direction); 30 C.F.R (a)(1)-(2) (2010)(requiring that a similar inspection be conducted at least once during a shift and that the examiner also test for compliance with respirable dust control parameters defined in the mine ventilation plan); and 30 C.F.R (a)(2010)(requiring that a record be made of any hazardous condition discovered by an examiner, the mine foreman, assistant mine foreman, or any equivalent mine official and that such condition be posted with a conspicuous danger sign and corrected immediately ). 5 In fact, all documentation regarding hazardous conditions must be retained for at least one year and made available for inspection upon request by MSHA. 30 C.F.R (d)(2010). 6 The Mine Act, 30 U.S.C. 814(a), (d)(1)(2010). See also Buck Creek Coal v. Fed. Mine Safety & Health Admin., 52 F.3d 133, 135 (7th Cir. 1995)(noting that the Review Commission and several courts have found that the following four conditions must be met before a violation is considered significant and substantial : (1) the underlying violation of a mandatory safety standard; (2) a discrete safety hazard that is, a measure of danger to safety contributed to by the violation; (3) a reasonable likelihood that the hazard contributed to will result in an injury; and (4) a reasonable likelihood that the injury in question will be of a reasonably serious nature )(citing Mathies Coal Co., 6 F.M.S.H.R.C. 1, 3-4 (1984))(additional citations omitted). 7 The Mine Act, 30 U.S.C. 814(d)(1)(2010). See also Buck Creek Coal, 52 F.3d. at 136 (an unwarrantable failure has been defined as aggravated conduct constituting more than ordinary negligence and as an intentional or knowing failure to comply or reckless disregard for the health and safety of miners ; also noting that such a failure has been found 230

5 INTERNAL INVESTIGATIONS 7.03 personnel involved in both internal and external investigations know which facts and conditions are critical when examining the cause of an accident. All mine personnel who may accompany MSHA inspectors when they are on-site must be educated as to the exact nature of their role in doing so. (See discussion in Section 7.05 infra). Taking all necessary steps to be prepared in the event an accident does occur puts the mine operator in the best position to challenge citations that may have been improperly written so as to avoid the increased penalties MSHA can impose under the Mine Improvement and New Emergency Response Act of 2006 (MINER Act) Providing Notification to MSHA Regarding the Accident and Preserving Evidence in Accordance with the Mine Act s Reporting Requirements. [1] Knowing When to Report an Accident Under the Mine Act. Along with increasing penalties that could be assessed for violation of the Mine Act, the MINER Act of 2006 also further defined the requirements for reporting an accident. While Section 103(j) of the Mine Act already required that MSHA be notified in the event of any accident occurring in a mine, the Mine Act amended this section (and MSHA subsequently amended the corresponding regulation) to require that MSHA be notified by the operator within 15 minutes of the time at which the operator realizes that the death of an individual at the mine, or an injury or entrapment of an individual at the where a violative condition or practice was not corrected prior to the issuance of a citation or order because of indifference, willful intent or serious lack of reasonable care )(citations omitted); Cougar Coal Co., 25 F.M.S.H.R.C. 513, 519 (2003)( The Commission determines whether conduct is aggravated in the context of unwarrantable failure by looking at all the facts and circumstances of each case to see if any aggravating factors exist, such as the length of time that the violation has existed, the extent of the violative condition, whether the operator has been placed on notice that greater efforts were necessary for compliance, the operator s efforts in abating the violative condition, whether the violation was obvious or posed a high degree of danger, and the operator s knowledge of the existence of the violation... )(citations omitted). 8 See monetary penalties in the Mine Act, 30 U.S.C. 820 (2010). 231

6 7.03 ENERGY & MINERAL LAW INSTITUTE mine which has a reasonable potential to cause death, has occurred. 9 There are no exceptions to this immediate notification requirement. The MINER Act also amended Section 110(a) of the Mine Act, noting that any operator who failed to provide timely notice within 15 minutes as required by Section 103(j) shall be assessed a civil penalty by the Secretary of not less than $5,000 and not more than $60, In order to comply with these new requirements and avoid the imposition of the enhanced penalties under the MINER Act, mine personnel must know what types of accidents trigger the reporting requirements. [2] Definition of Accident in 30 C.F.R (h). With regard to the general duty to notify MSHA in the event of an accident arising under Section 103(j) of the Mine Act, MSHA s definition of the term accident includes incidents such as the death of a miner(s), entrapment for more than 30 minutes, explosions, uncontrolled fires and unplanned roof falls that impede passage or ventilation, as well as some situations that might not be as easily determined to be an accident for purposes of triggering the Mine Act s reporting requirements. 11 For example, an injury (or an entrapment) which has the reasonable potential to cause death also constitutes an accident under MSHA regulations 12 one which must be reported within 15 minutes due to the MINER Act s revisions to Section 103(j). 13 Because MSHA did not elaborate on what constituted a reasonable potential to cause death in its regulations, mine personnel must be educated on how the Federal Mine Safety and Health Review Commission (the Commission) has interpreted the phrase reasonable potential to cause death in order to know whether an injury is serious enough to trigger the immediate notification requirement The Mine Act, 30 U.S.C. 813(j)(2010); 30 C.F.R (2010). 10 The Mine Act, 30 U.S.C. 820(a)(2)(2010) C.F.R. 50.2(h)(1), (3), (5)-(8)(2010) C.F.R. 50.2(h)(2), (3)(2010). 13 The Mine Act, 30 U.S.C. 813(j)(2010). 14 In the supplementary information accompanying the publication of the final rule on emergency mine evacuation in 2006, MSHA did list the following examples of injuries having 232

7 INTERNAL INVESTIGATIONS 7.03 In 2003 the Commission considered whether the failure to notify MSHA that a miner was injured in an 18-foot fall that occurred after he received a high voltage shock from a live wire on an electricity pole violated Section 50 of MSHA regulations. 15 Rejecting the operator s assertion that there was no duty to notify MSHA because the injured miner was awake and alert when senior management officials arrived on the scene, the Commission noted that the circumstances surrounding the incident, particularly the fact that the injured miner needed CPR, demonstrated a reasonable potential to cause death per se. 16 The Commission also rejected the analytical approach of the administrative law judge who had separately considered the act of injury from the damages suffered as a result of the act in determining that there was no reasonable potential to cause death. 17 Instead, the Commission explained, in accordance with its precedent, how the showing that a hazard was reasonably likely to produce an injury and the showing that the injury was reasonably likely to be reasonably serious will often be combined in a single showing and that no medical or clinical opinion was required, particularly where the notification decision had to be made within minutes of the incident having occurred. 18 Given that the Commission has interpreted the reasonable potential to cause death language as what a reasonable person (i.e., a reasonable MSHA inspector) would conclude based upon the particular facts and circumstances surrounding the incident, mine personnel should be trained to err on the side of caution and notify MSHA of any and all accidents involving serious injury within 15 minutes of when they occur. a reasonable potential to cause death : concussions, limb amputations, cases requiring CPR, major upper body blunt force trauma and cases involving intermittent or extended unconsciousness. Emergency Mine Evacuation, 71 Fed. Reg. 71,434 (2006). 15 See Cougar Coal Co., 25 F.M.S.H.R.C. 513, (2003)(discussing whether operator violated 30 C.F.R or Id. at Id. at Id. at 522 (citation omitted). 233

8 7.03 ENERGY & MINERAL LAW INSTITUTE [3] Reporting Requirements Under the Mine Act and Applicable Regulations. Section 103(d) of the Mine Act requires that: All accidents, including unintentional roof falls (except in any abandoned panels or in areas which are inaccessible or unsafe for inspections), shall be investigated by the operator or his agent to determine the cause and the means of preventing a recurrence. Records of such accidents and investigations shall be kept and the information shall be made available to the Secretary or his authorized representative and the appropriate State agency. Such records shall be open for inspection by interested persons. Such records shall include man-hours worked and shall be reported at a frequency determined by the Secretary, but at least annually. 19 Though the language in Section 103(d) seems extremely broad when first read, MSHA identified the specific information that must be included in the operator s report of an accident investigation in Part 50 of the regulations enacted to implement the Mine Act s provisions: (1) The date and hour of occurrence; (2) The date the investigation began; (3) The names of individuals participating in the investigation; (4) A description of the site; (5) An explanation of the accident or injury, including a description of any equipment involved and relevant events before and after the occurrence, and any explanation of the cause of any injury, the cause of any accident or cause of any other event which caused an injury; (6) The name, occupation, and experience of any miner involved; (7) A sketch, where pertinent, including dimensions depicting the occurrence; 19 The Mine Act, 30 U.S.C. 813(d)(2010)(emphasis added). 234

9 INTERNAL INVESTIGATIONS 7.03 (8) A description of steps taken to prevent a similar occurrence in the future; and (9) Identification of any report submitted under of this part. 20 It should be noted that Part 50 specifically prohibits operators from using MSHA Form as their investigation report regarding an occupational injury relating to an accident. 21 As such, operators should develop their own standardized reporting form in consultation with legal counsel. (See discussion in Section 7.04 infra). Accident reports submitted to MSHA in accordance with Part 50, including the operator s investigation report and MSHA Form , must be kept on file at the mine office closest to the mine for five years after the incident. 22 [4] Preservation of Evidence and Relevant Documents. Once an accident is reported, it is also important to preserve the accident scene in accordance with MSHA regulations, which provide that [u]nless granted permission by a MSHA District Manager, no operator may alter an accident site or an accident related area until completion of all investigations pertaining to the accident except to the extent necessary to rescue or recover an individual, prevent or eliminate an imminent danger, or prevent destruction of mining equipment. 23 Even in situations where one of the three exceptions is applicable, mine personnel must be trained to ensure that the scene of an incident is preserved as much as possible and that the conditions that existed at the time of the incident are documented. In addition to preserving the physical scene of the accident, it is imperative to gather and maintain all relevant documents relating to the incident and any employees involved therein. Such documents must be preserved for use in the investigation and in the event that litigation results from the accident. Because there is a possibility of litigation either with MSHA or the state C.F.R (b)(2010). 21 See id C.F.R (2010) C.F.R (2010). 235

10 7.04 ENERGY & MINERAL LAW INSTITUTE regulatory agency, the injured worker and/or his/her family or both it is often advisable to distribute a litigation hold notification. The notification explains to any mine personnel those who might be in possession of relevant documents or other information at the outset of any investigation of an accident resulting in serious injury or death that all relevant documents should be maintained until further notice. If outside counsel has been retained, then outside counsel can send the notification. If no decision has yet been made about hiring outside counsel, the litigation hold notification may be sent by in-house counsel or management. If the mine operator does not employ in-house counsel, the wiser course would be to consult with outside counsel, who can prepare or assist in the preparation of a standard litigation hold notification to be distributed in such instances Establishing Standard Investigatory Procedures. Establishing standard investigatory policies and procedures will help ensure that mine personnel know what to do when MSHA inspectors arrive at the mine following an accident. Guards and front office personnel who will be the initial point of contact need to be aware of the company s inspection management process and know who to notify when an MSHA inspector arrives on-site. Likewise, shift foreman, section foreman and other area supervisors need to know which mine official has been designated as the primary point of contact to interact with the inspectors and also which person(s) should accompany the inspectors to the scene of the incident. In addition, safety and health department employees should be trained to begin compiling all documents regarding the training of the individual(s) involved in the accident as well as any records of hazardous conditions that had been discovered in the area where the incident occurred. Company management must coordinate with in-house counsel and determine if and when to engage outside counsel, ever mindful of the fact that the protections of the attorney-client privilege and the work-product doctrine will not always apply to the actions of in-house counsel where in-house counsel is acting in a business, rather than a legal capacity. (See discussion in Section 7.07 infra). If feasible, have a team on each shift that is responsible for investigating any incident that may occur and designate certain personnel to accompany 236

11 INTERNAL INVESTIGATIONS 7.05 inspectors. Because section foreman often feel they need to explain any adverse conditions that might be found, mine operators should avoid designating section foreman to travel with inspectors. Having someone other than the section foreman accompany the inspector also keeps the section foreman from being put on the spot by the inspector s questions since the section foreman has direct responsibility for the workers in the area where the accident occurred. Another helpful tool in developing an orderly investigatory process is to work with legal counsel to create standardized forms that mine personnel can complete as they conduct the investigation. In doing so, however, it is critical to clearly note on such forms that the information included thereon is being gathered for the purpose of providing to counsel who will assist in the investigation and ultimate defense of any adversarial proceeding that might arise in connection with the accident. Such disclaimers will protect these completed forms from disclosure pursuant to the attorney-client privilege and work-product doctrine. (See discussion in Section 7.07 infra). Finally, even if a mine operator has in-house counsel, it would be wise to consider engaging outside counsel to assist with the investigation (and ultimate defense of any adversary proceedings) following any serious accident. Not only will in-house counsel be dealing with a great deal in his/her area of responsibility during an investigation, but retaining outside counsel will also help protect the materials generated as part of the mine s internal investigation from disclosure through application of the attorneyclient and work-product privileges. Hiring outside counsel helps an operator avoid an unintentional waiver of these protections which might occur if in-house counsel overseeing the investigation is deemed to be acting in a non-legal, business capacity. This type of waiver will be discussed in greater detail in Section 7.07[3] infra Documenting the Investigation. [1] The Right to Accompany Inspectors. Section 103(f) of the Mine Act provides: [A] representative of the operator and a representative authorized by his miners shall be given an opportunity to accompany the Secretary or his authorized representative during the physical inspection of any 237

12 7.05 ENERGY & MINERAL LAW INSTITUTE coal or other mine made pursuant to the provisions of subsection (a) for the purpose of aiding such inspection and to participate in pre- or post-inspection conferences held at the mine. 24 Because subsection (a) specifically includes inspections conducted for the purpose of obtaining, utilizing, and disseminating information relating to... the causes of accidents, it is clear that a representative of the mine operator may accompany an MSHA inspector who is investigating an accident. 25 In order to fully avail itself of this right, however, a miner operator must ensure that mine personnel make the most of their ability to travel with the inspector. [2] Traveling with the Inspector. Mine personnel designated to travel with an inspector during an accident investigation need to understand exactly why the inspector is on-site. The inspector s purpose is to identify violations and issue citations. MSHA also has an advantage because its inspector may initiate the discovery process informally by requesting documents and interviewing witnesses during the investigation following the accident. The company s ability to defend itself against the violations alleged and the citations issued will depend upon whether it is in a position to challenge the inspector s findings. For this reason, mine personnel designated to travel with the inspector must be trained to create a contemporaneous, independent record of facts separate and apart from the MSHA inspector s notes. 24 The Mine Act, 30 U.S.C. 813(f)(2010). 25 The Mine Act, 30 U.S.C. 813(a)(1)(2010). See also 1 MSHA Program Policy Manual (Release I ), which notes: The intent of Congress was to provide an opportunity for both the representative(s) of the miners and the representative(s) of the operator to accompany inspectors during the physical inspection of a mine for the purpose of aiding enforcement and to participate in the pre-inspection and post-inspection conferences held at the mine. Accordingly, every reasonable effort is to be made to provide both parties with an opportunity to participate in the physical inspection of the mine and in all pre-inspection and post-inspection conferences.... Miners representatives have the right to accompany inspectors on any type of 103(a) inspection involving direct enforcement activities such as:... inspections made in conjunction with accident investigations. 238

13 INTERNAL INVESTIGATIONS 7.05 As an initial matter, any notes taken by the operator s representative during an inspection should contain only facts, not opinions. When the company is contesting a citation, the only information that matters will be the facts that can be offered to refute the inspector s findings; any opinions the individual mine employees may have are not relevant. Moreover, notes taken by company representatives during inspections should never be provided to MSHA without first consulting with legal counsel. As previously mentioned, including a disclaimer on any inspection form being used by the operator s representatives that information recorded thereon is being gathered to be provided to counsel who will assist in the investigation and ultimate defense of any adversarial proceeding that might arise in connection with the accident will help protect the notes of the representative from disclosure pursuant to the attorney-client privilege and work-product doctrine. (See discussion in Section 7.07 infra). Regarding the information that should be recorded by the operator s representative during the inspection, the representative should document the identity of all persons participating in the investigation, the date and time of every event that occurs during the inspection, and the specific route traveled by the inspector. The operator s representative should also record statements made by the inspector as well as others participating in the inspection. To the extent possible, the operator s representative should duplicate every investigatory step taken by the inspector, including measurements, air readings, methane and oxygen readings and digital photographs. With regard to digital photographs, MSHA released Procedure Information Letter (PIL) I09-V-2 on June 5, 2009 in which it recognizes that digital images are of great assistance in documenting violations or other conditions during an inspection or investigation. 26 The PIL states that digital images can significantly contribute to resolving differences of opinion between mine operators and MSHA personnel, describing such images as being invaluable during informal discussions and safety and health conferences, and noting that such images may also expedite judicial 26 MSHA Procedure Instruction Letter No. I09-V-2 (June 5, 2009), available at complian/pils/2009/pil09-v-2.asp. 239

14 7.05 ENERGY & MINERAL LAW INSTITUTE proceedings. 27 While the scope statement of the PIL attempts to restrict its application to MSHA personnel who use digital cameras during their inspections or investigations, the operator s representative can be trained to take digital photographs in the areas where doing so is not prohibited by the PIL. 28 Specifically, the PIL provides that digital cameras may be used whenever practical subject to the following restrictions: Underground coal mines and gassy underground metal and nonmetal mines where permissible equipment is required. Only cameras approved by MSHA s Approval and Certification Center (A&CC), when available, shall be used. Until then, the use of cameras inby the last open crosscut, in return entries, or in bleeder entries is prohibited unless approved by the District Manager. 29 Accordingly, the operator s representative may take digital photographs so long as the inspection is not taking place inby the last open crosscut, in return entries or in bleeder entries. In addition to being trained on what types of information and data to record, any mine personnel designated to accompany an MSHA inspector during an accident investigation should also know when to ask questions and when to be silent. For example, asking questions that are designed to test the inspector s knowledge of the requirements for finding an S&S or an unwarrantable failure violation (such as what is the safety hazard in this condition, what is the injury that may result from this condition, and how would this condition amount to aggravated conduct?) can put the company in a better position to challenge the citations written by the inspector, particularly in instances where the inspector cannot identify all the prerequisite findings required to support such a violation. While mine personnel traveling with inspectors should never withhold information from the inspector, they also need to understand that they are not obligated to assist the inspector in doing his job. As such, an operator s representative should never offer unnecessary information, nor feel compelled 27 Id. at Id. at Id. at 2 (emphasis in original). 240

15 INTERNAL INVESTIGATIONS 7.06 to explain any condition that the inspector might find during the course of the inspection. It is also imperative that mine personnel designated to travel with inspectors understand that they should never speculate or guess in response to a question posed by the inspector. If they need to find out the answer to the inspector s question and then get back to the inspector, they need to feel comfortable responding to the question in that manner. If the operator cannot offer objective facts in order to dispute the inspector s findings, then those findings will be upheld when the violation and resulting penalty are later contested. Two cases decided by the Commission illustrate the importance of creating an independent record of the MSHA inspector s investigation. In the matter of Harlan Cumberland Coal Co., the testimony of the company s safety director, who did not personally view the conditions at issue, was insufficient to overcome the first-hand observations of the inspector. 30 Likewise, in the matter of Enlow Fork Mining Co., the inspector s notes taken during an inspection were given more weight than the recollections of the company witnesses of events that occurred more than a year prior to when the testimony was offered where none of the company witnesses had taken contemporaneous notes. 31 As these cases illustrate, an operator must take full advantage of its right to have a representative accompany an inspector during an investigation by having its representative develops a contemporaneous record of the investigation independent of that which will be offered by MSHA Employee Interview Process Avoiding Conflicts Between Representation of the Company and the Individual Employees. In addition to inspecting the physical site where an accident occurs, MSHA inspectors will also interview mine personnel who either have firsthand knowledge regarding the incident or are responsible for overseeing the area in which the accident occurred. Mine operators should have their legal counsel interview employees as soon as possible after the incident in question and before any government entities do so whenever possible. If 30 Harlan Cumberland Coal Co., 20 F.M.S.H.R.C. 1275, (1998). 31 Enlow Fork Mining Co., 17 F.M.S.H.R.C. 563, (1995). 241

16 7.06 ENERGY & MINERAL LAW INSTITUTE legal counsel is not present for these initial interviews, then any notes or other records of these interviews are much less likely to qualify for protection under the work-product doctrine, so it is imperative that counsel, whether in-house or outside, be engaged as soon as possible following an accident involving serious injury. (See discussion in Section 7.07 infra). When conducting interviews following an accident (or participating in the interviews being conducted by MSHA), it is critical for both the company and its counsel to clearly define the role of outside counsel in the investigative process, making sure the employees being interviewed understand exactly who the attorney is representing. [1] The Use of Upjohn Warnings. The 2001 collapse of Enron and the numerous corporate financial scandals that have come to light since heightened regulatory focus on corporate governance issues and led to the passage of the Sarbanes-Oxley Act ( SOX ) in The passage of SOX created unique issues for legal counsel involved with internal corporate investigations and led to a resurgence in use of Upjohn 33 warnings, i.e., corporate Miranda warnings whereby the attorney explains to all interviewees that: (1) The attorney represents the company, not the individual; (2) To the extent the interview is covered by privilege, that privilege belongs to the company, not the individual; and (3) The company has sole discretion to decide whether to waive the privilege, including disclosing the information gathered during the interview to the government The Sarbanes Oxley Act of 2002, Pub. L. No , 116 Stat. 745 (codified in scattered sections of the U.S.C.). 33 Upjohn refers to the decision of the Supreme Court in Upjohn v. United States, 449 U.S. 383 (1981), wherein the Court rejected the control group test that had traditionally been used to determine the scope of the attorney-client privilege when an attorney was representing a corporate entity, expanding the scope of the privilege to cover communications between corporate legal counsel and non-management employees in certain circumstances. 34 American Bar Association, Criminal Justice Section, White Collar Crime Committee Working Group, Upjohn Warnings: Recommended Best Practices When Corporate Counsel Interacts With Corporate Employees 3, available at 242

17 INTERNAL INVESTIGATIONS 7.06 As is evident from the preceding summary of typical Upjohn warnings, similar warnings can and should be employed by in-house counsel and outside counsel during the interview phase of an accident investigation in situations where the attorney is only representing the operator, not the individual employee-interviewees. Not only should counsel make a record of having provided Upjohn warnings to specific interviewees, but separate actions should be taken in order to establish that any interview notes, attorney impressions and advice provided during the interview are protected as work protect and by any applicable privilege. (See discussion in Section 7.07 infra). [2] Attorney Ethics Rules Regarding Conflicts of Interest. In participating in the accident investigation process, attorneys must also be mindful of their ethical obligations. Because MSHA is authorized to impose civil and criminal penalties against both the company and its individual employees, 35 the potential for conflict between the interests of the company and the interests of its employees is ever present. As a result, attorneys representing the company need to be aware of the conflict of interest rules, which govern their conduct. [a] ABA Model Rules of Professional Conduct. Most states have adopted some form of the American Bar Association s (ABA) Model Rules of Professional Conduct (Model Rules). 36 With regard to conflicts between current clients, like those that could arise during an accident investigation between the interests of the company and the interests of its individual employees who are being investigated by MSHA, the Model Rules prohibit the representation of both parties by the same lawyer where criminaljustice/cr301000/publicdocuments/abaupjohntaskforce Report.pdf(2009)(last visited May 13, 2010). 35 The Mine Act, 30 U.S.C. 820 (2010). 36 See Center for Professional Responsibility, Model Rules of Professional Conduct, Dates of Adoption, available at (last visited May 7, 2010). 243

18 7.06 ENERGY & MINERAL LAW INSTITUTE a concurrent conflict exists unless the clients waive the conflict. 37 A concurrent conflict exists under Model Rule 1.7 if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer s responsibilities to another client, a former client or a third person If it is revealed during an investigation that an employee s violation a of provision of the Mine Act caused or contributed to the accident MSHA is investigating, it is easy to see how the representation of the company could end up being directly adverse to that of the individual employee. In such a situation, the attorney s representation of the employee would certainly be impacted by the attorney s responsibilities to the company. Despite the existence of a concurrent conflict, a lawyer may continue to represent both clients if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. 39 Where a true concurrent conflict exists in an investigatory situation, it would be risky for one attorney to continue representing both the company and the individual employee(s), even if both parties are willing to consent. Before seeking their consent, the attorney must determine whether he/she 37 American Bar Association Model Rules of Professional Conduct (hereinafter cited as ABA Model Rules ), Rule 1.7 (2010). 38 Id. (a). 39 Id. (b). 244

19 INTERNAL INVESTIGATIONS 7.06 can effectively represent both clients in spite of the conflict. 40 If not, the attorney should advise the company that the individual employee(s) should be represented by separate counsel. Even in situations where a conflict is not apparent at the outset of the investigation, a conflict could arise during the course of the investigation, which could force the attorney to withdraw from representing both the company and the individual employee(s) because of the conflict of interest rule relating to former clients. Under Model Rule 1.9(a), an attorney who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing. 41 Subsection (c) of Rule 1.9 further provides that: A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or 40 Moreover, the Model Rules impose additional restrictions on attorneys in conflict situations, specifically prohibiting them from: (b) Us[ing] information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules. (g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement. ABA Model Rule 1.8 (2010). These restrictions also apply to the firm with which the conflicted lawyer is associated. Id. (k). 41 ABA Model Rule 1.9(a)(2010). 245

20 7.06 ENERGY & MINERAL LAW INSTITUTE (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client. 42 Should a conflict between the interests of the mine operator and the interests of individual employee(s) arise during an accident investigation (or during an enforcement proceeding or civil action filed after the investigation is completed), the attorney will not be able to terminate the attorney-client relationship with the employee but continue to represent the company unless the former employee-client(s) consents. Moreover, even in situations where the former employee-client would consent to the attorney s continued representation of the company, it may not be advantageous for the company to continue the relationship because it is generally recognized that the attorney-client privilege does not attach as between commonly represented clients. 43 As a result, the former employee-client would be free to disclose any communications between the attorney and the company to which it was privy during the period of common representation in any subsequent adversarial proceeding between the company and the employee. 44 Clearly, there are substantial risks associated with the same attorney representing both the mine operator and mine employees who may be cited for a violation of the Mine Act by MSHA during an investigation. All parties involved should consider and understand the full impact of these risks before making a decision to proceed with common representation. 45 [b] An Illustrative Case Analyzing and Applying the Ethics Rules in the Context of a Criminal Proceeding Arising Under the Mine Act. In light of the likelihood that a conflict may arise, it is in the best interests of both the attorney and the company to secure separate counsel 42 Id. (c). 43 ABA Model Rule 1.7, Comment [30] (2010). 44 See id. 45 Where applicable, the parties should also consider the fact that a conflict of interest can be imputed to an attorney s firm in which case the parties would not only lose the benefit of the services of their original attorney, but they might also be forced to start over with an entirely new law firm. See ABA Model Rule