FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
601 New Jersey Avenue, N.W.
Suite 9500
Washington, D.C. 20001
1
OPEN SESSION
- - - - - - - - - - - - - x
:
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA), :
:
Plaintiff, :
:
v. : Docket Nos.
: SE 2002-11
SEDGMAN, : SE 2003-69
DAVID GILL, EMPLOYEE OF : SE 2003-189
SEDGMAN, :
:
Defendant. :
:
- - - - - - - - - - - - - x
Thursday, January 26, 2006
Federal Mine Safety and
Health Review Commission
601 New York Avenue, N.W.
Suite 9500
Washington, D.C. 20001
The oral argument in the above-entitled
matter convened, pursuant to notice, at 10:00 a.m.
BEFORE:
MICHAEL F. DUFFY, Chairman
MARY LUCILLE JORDAN, Commissioner
STANLEY C. SUBOLESKI, Commissioner
MICHAEL G. YOUNG, Commissioner .
2
APPEARANCES:
On behalf of the Secretary of Labor (MSHA):
JACK POWASNIK, ESQ.
U.S. Department of Labor
1100 Wilson Boulevard
Arlington, Virginia 22209
(202) 693-9333
On behalf of Mr. David Sedgman:
R. HENRY MOORE, ESQ.
Jackson Kelly, PLLC
Three Gateway Center
401 Liberty Avenue
Suite 1340
Pittsburgh, Pennsylvania 15222
(412) 434-8055
- - -
C O N T E N T S
ORAL ARGUMENTS PAGE
On behalf of Sedgman 5
On behalf of the Secretary of Labor, (MSHA) 20 .
3
1 P R O C E E D I N G S
2 CHAIRMAN DUFFY: We will go on the record
3 and come to order. Good morning. The Commission
4 is hereby convened an open session Thursday,
5 January 26, 2006 to hear oral argument in the
6 matter entitled Secretary of Labor versus Sedgman,
7 Docket Numbers SE 2002-11, SE 2003-69, and SE
8 2003-189.
9 Present are myself, Chairman Duffy,
10 Commissioner Jordan, Commissioner Suboleski, and
11 Commissioner Young. By the terms of the commission
12 order of setting oral argument, Sedgman shall
13 proceed first and is allocated 15 minutes to
14 present oral argument with respect to the issues
15 raised by its petition for review and may reserve
16 up to five minutes of that time for rebuttal.
17 The Secretary is allocated 15 minutes in
18 which to present a response to Sedgman. Following
19 Sedgman's rebuttal, if any, the Secretary is
20 allocated 15 minutes to present oral argument with
21 respect to the issues raised by her petition for
22 review and may reserve up to 5 minutes of that time .
4
1 for rebuttal. Sedgman is allocated 15 minutes in
2 which to respond to the Secretary.
3 I would ask at this time that counsel
4 introduce themselves and indicate how they have
5 decided to divide up their time.
6 MR. MOORE: I'm R. Henry Moore
7 representing Sedgman and I have divided up my
8 initial argument time reserving three minutes for
9 rebuttal.
10 CHAIRMAN DUFFY: Three?
11 MR. MOORE: Three.
12 CHAIRMAN DUFFY: Okay.
13 MR. POWASNIK: Good morning,
14 Commissioners. My name is Jack Powasnik. I
15 represent the Secretary of Labor and I'm reserving
16 five minutes for rebuttal.
17 CHAIRMAN DUFFY: Okay, Mr. Moore, if
18 you'll proceed.
19 ORAL ARGUMENT ON BEHALF OF SEDGMAN
20 MR. MOORE: May it please the Commission,
21 Sedgman has appealed two issues involving citations
22 that arose out of an accident at the Jim Walters .
5
1 Resources No. 4 Preparation Plant.
2 Sedgman had been hired to do a
3 modification to that plant. It was a Jim Walters
4 Plant. They hired in order to perform the actual
5 work onsite, a long time contractor of Jim Walters
6 PIW. Sedgman was hired to do the modifications.
7 PIW had a separate contract with Jim Walters in
8 order to repair or replace any deteriorated steel.
9 Sedgman had one employee on site, a supervisor of
10 David Gill.
11 Sedgman received two citations and the
12 issues on appeal are whether or not a violation of
13 77.200 existed and whether it was appropriate to
14 cite Sedgman for that violation as well as to cite
15 Sedgman for the 77.1710(g) citation with respect to
16 fall protection.
17 77.200 requires an operator to maintain a
18 mine structure in good repair. The problem that we
19 have in this situation is fitting the circumstances
20 of this case to that standard. What was going on
21 here was demolition of a landing.
22 The ALJ held, at least as I read his .
6
1 decision that that standard applied at all times
2 and it required a operator made some level of
3 repair and he refused to carve out an exception for
4 demolition.
5 The problem with that is demolition
6 doesn't fit readily into that standard. It's
7 illogical. Once you start to demolish a structure,
8 it's no longer in good repair. For example, in
9 this case, they had removed already two pieces of
10 the landing, so there is a gaping hole there. By
11 anybody's common sense definition of good repair,
12 that would not constitute that.
13 COMMISSIONER YOUNG: I would agree with
14 you that good repair under those circumstances in a
15 vacuum might seem to violate common sense. But
16 this is within the scope and context of the Mine
17 Safety and Health Act. What's wrong with
18 construing as the Secretary has, the requirement to
19 mean in good repair means so as to not create a
20 hazard in the workplace or to maintain it in a safe
21 condition.
22 MR. MOORE: The problem with that is how .
7
1 do you define that. And what the Secretary has
2 suggested is there should be some sort of overall
3 demolition plan, which goes way beyond the words of
4 this standard.
5 Further, if you take the Secretary's
6 interpretation, means handed essentially for the
7 purpose in which it's being used, which is one of
8 our arguments, we met that standard. Because the
9 expert evidence in this case is that that platform,
10 though there was some deterioration of the steel,
11 was in good enough condition to demolish, which was
12 all that was going to happen.
13 The problem obviously was the method of
14 demolition. That was what PIW employees selected.
15 Because what Sedgman anticipated is they would
16 remove all of the landing, remove the concrete, fly
17 it out as Mr. Gill said, and then they would do the
18 structural steel. What they did is they removed a
19 portion of the landing and then starting cutting
20 structural steel, placing a load on the connection,
21 the last remaining connection that they left.
22 COMMISSIONER SUBOLESKI: Are you arguing .
8
1 then that there was not a violation of 77.200 by
2 somebody here? In other words, are you arguing
3 that 77.200 can't apply to the process?
4 MR. MOORE: I'm arguing that it can't
5 apply to the process. Whether or not there's a
6 violation for example for Jim Walters, whose plant
7 it has been all these years is another issue. But
8 on the day before this accident occurred, the
9 Secretaries own experts said that platform was not
10 in danger of falling.
11 So from Jim Walters' perspective on that
12 day, you wouldn't seem to have a violation. But
13 I'm not going to speak for them. Their case has
14 been resolved by settlement. But in terms of--
15 COMMISSIONER JORDAN: But didn't a judge
16 find a hazard--that there was corrosion? I mean
17 if--I think the case--it is hard to extract it from
18 the accident that it occurred. It's so intertwined
19 and I guess maybe that's one of my questions. Do
20 you see the citation as being dependant on the fact
21 that the platform fell and there was an accident?
22 MR. MOORE: I think it--from our .
9
1 perspective, it probably is, because if it--nobody
2 had done anything to that platform, it would have
3 stayed in place. If--
4 COMMISSIONER JORDAN: But then--but it
5 didn't. And of course, there was an accident
6 investigation and it seems to me that the judge, he
7 discussed the testimony of Taylor--
8 MR. MOORE: Yes.
9 COMMISSIONER JORDAN: And he discussed the
10 corrosion, the thickness loss, 80 percent thickness
11 loss due to corrosion, notch of a half dollar size.
12 He discussed various aspects of the deterioration
13 that were testified about and then he concluded,
14 "Based on these findings, I conclude that it was
15 more likely than not that the supporting structures
16 had deteriorated to a condition that was
17 hazardous."
18 MR. MOORE: Well, the problem with that
19 finding is that it's inconsistent to a degree with
20 his finding and his footnote with respect to our
21 expert, Mr. Fill, where he said that Mr. Fill was
22 credible and he said that Mr. Fill testified that .
10
1 the platform was safe to demolish.
2 COMMISSIONER JORDAN: Well, are you
3 referring to the--I thought you might be referring
4 to the footnote where he refers to Mr. Fill
5 testifying credibly that the platform would have
6 fallen, even without any corrosion or deterioration
7 based on the actions of the miners who cut the
8 supporting beams.
9 MR. MOORE: That's the same footnote.
10 COMMISSIONER JORDAN: That's the same
11 footnote. Now I'm not sure that they're
12 inconsistent. I mean one could conclude that the
13 platform fell--would've have fallen regardless of
14 any of the corrosion or deterioration or even if
15 there was no corrosion or deterioration. If you
16 cut the supporting beams, then the platform falls
17 due to that. I mean that's sort of one part of the
18 testimony the Judge was referring to.
19 However, based on the fact there was this
20 accident, things were looked at, you know, under a
21 microscope so to speak, afterward. You know,
22 people examined all of the structures there, found .
11
1 the corrosion.
2 Is the Judge not concluding that based on
3 what we now know and what we now observe after the
4 accident, to send people into that area to do the
5 work involved--was exposing them to a hazard?
6 MR. MOORE: I think that's the Judge's
7 ruling. The problem with it is and this highlights
8 why it's inappropriate to cite Sedgman as the
9 contractor for Jim Walters, is that Sedgman learned
10 about the corrosion to the degree it was and after
11 the fact, same time MSHA did, after the collapse.
12 What Sedgman was there for was to demolish that
13 structure and 77.200 really doesn't fit that and
14 the evidence is that if it had been demolished
15 properly by PIW, it would have been safe.
16 So the problem is how do you mesh that
17 with the Judge's ruling. And the problem comes
18 down to how do you cite Sedgman for a condition
19 that developed over 20 years, solely on three
20 grounds, according to the Judge.
21 They have a contractual provision they're
22 going to comply with the law, which frankly every .
12
1 contract has. They had a supervisor on site, even
2 though the Judge says he was not aware of the
3 condition of the platform and he was aware they
4 were going to work in the area. That doesn't
5 really bring Sedgman into the mix as I see it.
6 It's Sedgman at that point--is solely
7 there to demolish it--
8 COMMISSIONER JORDAN: But are you saying--
9 MR. MOORE: --and once they demolish it,
10 the problem is fixed obviously and it was safe to
11 demolish.
12 COMMISSIONER JORDAN: Right. Okay. But
13 well, was it--I mean are you saying that Sedgman
14 can go into an area, take responsibility under
15 contract for performing work in a certain area,
16 direct or understand that employees are going to go
17 to work under Sedgman's advice and direction to
18 work in an area, and Sedgman can be free to just
19 rely or assume that there's not hazardous
20 conditions there that those employees might be
21 exposed to--
22 MR. MOORE: Well, I think that-- .
13
1 COMMISSIONER JORDAN: --they can assume
2 Jim Walters--that the owner has taken the necessary
3 steps to maintain it?
4 MR. MOORE: I think rather than an
5 assumption, it's the fact is that condition was in
6 Jim Walter's purview, so to speak for 20 years. It
7 was not an obvious condition, and the Judge has
8 said that--found that. And given the frequency of
9 MSHA inspectors not detecting that condition, I
10 think that's a reasonable conclusion.
11 Sedgman went in to demolish it and I think
12 it's--it could have been demolished safely. I
13 don't think there's a violation with respect to
14 Sedgman.
15 COMMISSIONER YOUNG: Well, getting away
16 from what the condition of the structure was that
17 they were demolishing and the condition that they
18 found it in, what's wrong with saying to the prime
19 contractor, who has the responsibility under
20 contract for demolishing the structure and
21 complying with the Act as you pointed out, what's
22 wrong with suggesting that in those circumstances, .
14
1 the operator representative who is on site anyway,
2 go up, check it out, and go over with the
3 subcontractor what the sub's plans are for the
4 demolition to make sure that it's carried out in a
5 safe way?
6 MR. MOORE: Well, in this particular case,
7 Mr. Dill did examine it. The conditions were not
8 obvious, while there was--he noted some rust, he
9 knew they were going to demolish it. He didn't see
10 that that was a potential issue. He talked to the
11 contractor that morning about how to do it. They
12 talked about removing the concrete landing. He
13 assumed that they were going to remove the concrete
14 landing and then the structural steel.
15 But unfortunately, what the two PIW
16 employees did or one, apparently, essentially cut
17 two or three--two of the three main supports and
18 essentially cut the limb off behind him. That's
19 truly unfortunate. It's a tragedy. But it's
20 not--I don't think Sedgman failed to fulfill its
21 responsibility.
22 The problem is they're being held .
15
1 responsible for a condition that they're not there
2 for and that they really have no authority to
3 change. What they have the authority to do is tear
4 down that, which they did and it could have been
5 done safely.
6 CHAIRMAN DUFFY: Counsel, would you agree
7 that the standard 77.200 does apply up to the point
8 where they decide to demolish?
9 MR. MOORE: I would agree with that, yes.
10 CHAIRMAN DUFFY: So JWR and PIW were cited
11 for that?
12 MR. MOORE: Yes.
13 CHAIRMAN DUFFY: For not maintaining those
14 structures in good repair?
15 MR. MOORE: Yes and I--
16 CHAIRMAN DUFFY: So its demolition had
17 never been undertaken. An inspector were to take a
18 better look than other inspectors had in the past,
19 then JWR and PIW would have been cited for a
20 violation of 77.200?
21 MR. MOORE: Not necessarily. PIW might
22 not have been cited because when they came in and .
16
1 they did the wall to wall structural inspection of
2 that plant afterwards, the only entity that was
3 cited was JWR. They didn't cite PIW or Sedgman.
4 CHAIRMAN DUFFY: But PIW had a separate
5 contract with JWR to repair and replace corroded
6 and non-integral parts of that--
7 MR. MOORE: Whether they were identified
8 and I can't argue for PIW here one way or the
9 other, but I'm just saying that what MSHA did is
10 they cited JWR with respect to the rest of the
11 plant and the only one they cited multiple
12 operators.
13 CHAIRMAN DUFFY: I read a bit more into
14 that footnote I think than my colleagues does.
15 What the Director is saying, at least for me, is
16 that even if this had been new steel, the
17 combination of the chain and the cutting of the
18 principle supports would have resulted in the same
19 accident.
20 MR. MOORE: That's correct because what it
21 did was to place a load on that remaining
22 connection that it's not designed-- .
17
1 CHAIRMAN DUFFY: So even if it had been
2 maintained in good repair, it would have sustained
3 the stress.
4 MR. MOORE: Yes.
5 COMMISSIONER JORDAN: That's how I read
6 the footnote, yeah.
7 COMMISSIONER SUBOLESKI: We really have
8 two questions to decide here. One is was there a
9 violation of 77.200. The other is was Sedgman the
10 responsible party.
11 And assuming that the footnote--getting
12 over to the footnote and assuming that the steel
13 were in perfectly good condition and it's the
14 process that's the problem here, can you--do you
15 feel we can read 77.200 to mean that at the instant
16 that the process went wrong, when that last support
17 was cut, that at that very instant then the plant
18 or the landing was no longer maintained in a safe
19 condition?
20 MR. MOORE: That's why it's difficult to
21 apply this standard to demolition. Because let's
22 assume that they had taken the landings off and .
18
1 then started cutting the steel and then some of the
2 steel fell as they were doing structure. At that
3 point, is it not in good repair?
4 That's why it's difficult to apply it to
5 this and I think it's inappropriate to apply 77.200
6 to this situation because it just doesn't fit.
7 77.200 gets to an end result, good repair. What
8 MSHA is saying is well, it actually regulates the
9 process and it doesn't. It doesn't regulate the
10 process and I think once the process of demolition
11 starts, the standard ceases to apply.
12 COMMISSIONER SUBOLESKI: Well, you can
13 either interpret it to say the end result is good
14 repair or you can interpret it to say the end
15 result is no accidents.
16 MR. MOORE: That's correct.
17 COMMISSIONER YOUNG: Isn't maintenance a
18 process though? I mean is the sector not really
19 saying that the process is not the demolition but
20 it's the maintenance here?
21 MR. MOORE: That is what--
22 COMMISSIONER: It has to carry through .
19
1 while it's still a--structure in the mine.
2 MR. MOORE: That's what they're saying but
3 the problem is they're not regulating how the
4 maintenance is done. And what they want to do is
5 regulate how the demolition is done.
6 And they have rule-making authority. They
7 can do that. But that's not what this standard
8 does. This standard unfortunately is a square hole
9 in which they're trying to fit a round peg.
10 It just doesn't work and it doesn't make
11 sense, as they themselves said in Lankasure(?). It
12 doesn't apply all the time. They said it was
13 ludicrous to apply it to every part of the process.
14 COMMISSIONER YOUNG: Well, that was an
15 abandoned structure in Lankasure.
16 MR. MOORE: That's correct.
17 COMMISSIONER YOUNG: An abandoned mine.
18 Basically, a mine facility that was--
19 MR. MOORE: Yes, yes. But it was a--
20 COMMISSIONER YOUNG: There was no
21 longer--it was not within an active working mine
22 environment, which is what we had here. .
20
1 MR. MOORE: But 77.200 was at least
2 addressed by the ALJ. And the Secretary conceded
3 at that point. The standard can't apply all the
4 time.
5 CHAIRMAN DUFFY: The Secretary attempted
6 to introduce some OSHA construction standards, I
7 understand.
8 MR. MOORE: Yes.
9 CHAIRMAN DUFFY: And the Judge rejected
10 those?
11 MR. MOORE: Yes, he did because he said
12 that they didn't apply in a MSHA context.
13 CHAIRMAN DUFFY: So the only thing that
14 the agency has to kind of hang its hat on is this
15 particular standard?
16 MR. MOORE: Yes. I think I've used up
17 my--
18 CHAIRMAN DUFFY: Yes.
19 MR. MOORE: Gone into my rebuttal time
20 substantially. Thank you.
21 CHAIRMAN DUFFY: Mr. Powasnik?
22 ORAL ARGUMENT ON BEHALF OF THE SECRETARY .
21
1 OF LABOR, (MSHA)
2 MR. POWASNIK: Just waiting for the clock.
3 Good morning, Commissioners.
4 Three issues that I'll discuss is the
5 applicability of 77.200 to the work that was being
6 done here, the citation to Sedgman for the
7 violation and the fact that the--and the Judge's
8 ruling of the violation--that the violation
9 occurred.
10 I think in light of what I heard, I'll
11 start backwards and talk about the existence of the
12 violation. The Judge found that the violation
13 occurred because it was extensive rust,
14 deterioration, and corrosion on the supporting
15 steel and more likely than not, that that structure
16 deteriorated to a condition that was hazardous.
17 There's a hazard here--there's a
18 possibility of collapse. That's the hazard that
19 we're talking about here. And we're talking about
20 approximately 80 percent rust and corrosion on
21 supporting members. So I think the evidence
22 supports the Judge's finding that more likely than .
22
1 not, there was a hazard, the hazard that this
2 structure would collapse because of the amount of
3 rust and corrosion that was bound on the structural
4 members.
5 COMMISSIONER YOUNG: What--
6 COMMISSIONER SUBOLESKI: Go ahead. Go
7 ahead.
8 COMMISSIONER YOUNG: I was just going to
9 ask what's Sedgman's role in the rust and the
10 deteriorated condition of the structure?
11 MR. POWASNIK: The violation--under the no
12 fault liability scheme that we're talking about,
13 Sedgman is being held liable for an act committed
14 by its contractor. So the Judge applied the
15 analysis that the Commission and the Courts have
16 applied to an owner operator or production operator
17 being responsible for an independent contractor to
18 this situation, where you have an independent
19 contractor hiring a subcontractor.
20 COMMISSIONER JORDAN: So you're saying
21 Sedgman's liability is based on the actions of its
22 contractor, PIW is it? .
23
1 MR. POWASNIK: Right. So--I mean the
2 Judge made this finding. He applied the rationale
3 that you usually apply in the situation I just said
4 and I mean I think there's only one commission
5 case, Bulk Transportation that discusses this
6 situation, where you have an independent contractor
7 being held liable for the acts committed by its
8 subcontractor.
9 COMMISSIONER JORDAN: So it's a strict
10 liability that is being imposed on Sedgman--
11 MR. POWASNIK: Right.
12 COMMISSIONER JORDAN: --and if that's the
13 case, was Sedgman cited though for an unwarrantable
14 failure?
15 MR. POWASNIK: Right.
16 COMMISSIONER JORDAN: Well, how--
17 MR. POWASNIK: And didn't appeal that. We
18 could have--I think what happened here is we went
19 both ways. You could have held Sedgman liable for
20 the violation independently or--
21 COMMISSIONER JORDAN: What is the
22 Secretary's position to the commission today, .
24
1 arguing--
2 MR. POWASNIK: Right now--
3 COMMISSIONER JORDAN: Is Sedgman being
4 held as an independent--as failing to carry out a
5 duty that it independently had under 77.200 or is
6 it a vicarious liability--
7 MR. POWASNIK: It's a vicarious
8 liability--the derivative liability here.
9 COMMISSIONER JORDAN: And that derives
10 from not Jim Walters, but PWI's--
11 MR. POWASNIK: Exactly.
12 CHAIRMAN DUFFY: So you're saying that PIW
13 allowed this deal to deteriorate and so Sedgman as
14 the contractor is liable for PIW's allowing the
15 steel to deteriorate?
16 MR. POWASNIK: PIW--I think we could say
17 both because both Jim Walters was also cited for
18 this.
19 CHAIRMAN DUFFY: I mean but it's Jim
20 Walter's plant.
21 MR. POWASNIK: Right.
22 CHAIRMAN DUFFY: I don't have any problem .
25
1 with that. They allowed the steel to degenerate.
2 PIW is the contractor--
3 MR. POWASNIK: PIW was hired to work at
4 this specific area and to do this specific job.
5 And at that point in time, it became responsible
6 for maintaining this part of the structure in good
7 enough repair so that while they were working on
8 it, it wouldn't be hazardous to them.
9 CHAIRMAN DUFFY: No, in good repair.
10 MR. POWASNIK: In good repair so that it
11 wouldn't fall down.
12 CHAIRMAN DUFFY: Not just good enough. I
13 have a problem with people cutting steel and
14 hauling out concrete maintaining that platform in
15 good repair. It doesn't--
16 MR. POWASNIK: Well, particularly, it's
17 not that it was the cutting of the seal; it's the
18 fact that it was corroded to a point where it was
19 possible that it would collapse.
20 CHAIRMAN DUFFY: But that's a whole
21 different issue; isn't it? That's the issue that
22 JWR and PIW are responsible for. .
26
1 MR. POWASNIK: All three were responsible
2 for, right.
3 COMMISSIONER YOUNG: I can understand
4 where PIW might be responsible for what it actively
5 did but how do you get the liability for the
6 condition that the platform was in attaching to PIW
7 and through that relationship to Sedgman?
8 MR. POWASNIK: To Sedgman, I mean who was
9 in the best position to protect these people that
10 were working on the structure? It was Sedgman.
11 Sedgman hired--
12 COMMISSIONER JORDAN: Yeah but could you
13 answer my colleagues first question? How do you
14 get PIW for the deterioration that occurred over
15 the long term, the corrosion that--maintained?
16 MR. POWASNIK: Their duty arises when they
17 begin to work here. They undertook the duty to
18 work under the regulations which require
19 maintenance--maintaining this in good repair.
20 COMMISSIONER YOUNG: Are you saying that
21 significant or--I shouldn't use that
22 term--substantial amount of rust developed after .
27
1 they assumed the responsibility for the job, that
2 it started rusting then--
3 MR. POWASNIK: No. It started rusting a
4 long--
5 COMMISSIONER YOUNG: --or that it
6 progressed past a critical point then?
7 MR. POWASNIK: --a long time ago, but you
8 just can't say okay, well, it happened a long time
9 ago, so we're going to put our people on there and
10 so what? We're not responsible for what happened
11 25 years ago, so we'll just let them work on a
12 deteriorated structure.
13 COMMISSIONER YOUNG: That's not what I'm
14 asking. You started talking about the condition of
15 this thing being in and PIW somehow being
16 responsible for it. I don't get it.
17 MR. POWASNIK: Not--
18 COMMISSIONER YOUNG: It might be more
19 productive for you to talk about the things they
20 actively did or got involved in.
21 MR. POWASNIK: They're responsible for the
22 safety of their employees when they put them on the .
28
1 structure, when they started working here.
2 COMMISSIONER YOUNG: But how does that fit
3 within 77.200?
4 MR. POWASNIK: Well, maintain it in good
5 repair. So you take a look at the structure and
6 the condition that it's in and you know, support it
7 somehow. Put some temporary supports on it while
8 these people are going to take it down, so you're
9 not putting somebody in jeopardy here or work in a
10 different manner.
11 Work from a man basket. Work from
12 standing on the interior on the structure so that
13 you don't expose your employees to the hazard.
14 You're protecting them from accident and injury,
15 which is what the standard is designed to do.
16 COMMISSIONER SUBOLESKI: Your argument now
17 is getting awfully close to the process argument
18 again, that even though you're saying it was
19 deteriorated--I mean I hear you saying it wasn't
20 done in the right way. Do you think--I'll ask you
21 the same question I asked before and that's do you
22 think 77.200 can be applied to process? If it's .
29
1 simply done in the wrong way, does that mean it
2 wasn't maintained safely and does--
3 MR. POWASNIK: It wasn't maintained safely
4 because of the condition that it was in and the way
5 they undertook the demolition. They could have
6 demolished this in a safe manner. So it could be
7 applied to how they were doing this.
8 CHAIRMAN DUFFY: Counsel, I don't disagree
9 with that. I'm looking at Section 115(d) of the
10 Act, which is going on 30 years ago. "The
11 Secretary shall promulgate appropriate standards
12 for safety and health training for coal and other
13 mine construction workers." And we don't have
14 those standards. We haven't had them for 30 years.
15 But it strikes me that had those standards
16 been in place, then PIW would have known how to go
17 about that demolition in a proper way because the
18 people would have been trained. The proximate
19 cause of this accident is the fact that they cut
20 into a structure the wrong way and it failed. And
21 it really doesn't matter whether it was
22 deteriorated or not because the Judge found that .
30
1 had it been new steel, the same thing would have
2 happened. And that's my problem here is that
3 you're trying to stretch a maintenance standard and
4 I'm very--keying in on the words maintained in good
5 repair.
6 It can't be separated out into repaired
7 and maintained. That's--if--was correct, a
8 participial phase and it has to be interpreted in
9 and of itself. You can't start parceling
10 individual words in it.
11 And that strikes me as the responsibility
12 that was imposed on JWR and in my view, PIW, as was
13 stated on the--contract. They're responsible for
14 repairing and replacing degenerated steel in that
15 plant.
16 So that I have no problem with. But when
17 you get to the demolition stage, I just don't see
18 how those words apply in this particular case.
19 What's lacking here, is a standard that
20 would do exactly what you'd want it to do, which is
21 Sedgman, the contractor, whoever, sits down and
22 develops a plan of demolition that assures that .
31
1 it's undertaken in a safe manner. I just can't see
2 how maintaining something in good repair offers the
3 basis for requiring some sort of a demolition plan
4 under these circumstances.
5 MR. POWASNIK: If you're looking at the
6 proximate cause of the accident, I mean that's
7 exactly what you shouldn't do when you're looking
8 at whether or not this standard was violated. It
9 wasn't the cause of the accident that--they weren't
10 cited because of why--what happened--why the
11 accident occurred.
12 They weren't cited for the cause. They
13 were cited because--Sedgman was cited because it
14 had the responsibility to protect the people that
15 it was hiring to go onto the structure that was in
16 a state of disrepair.
17 CHAIRMAN DUFFY: I don't see where you get
18 there.
19 MR. POWASNIK: Well--
20 CHAIRMAN DUFFY: Because they have to be
21 responsible for maintaining the structure in good
22 repair in order to be liable under the standard. .
32
1 And that's not their responsibility.
2 MR. POWASNIK: In order to--I mean PIW is
3 and Sedgman's liability is--they're being held
4 liable for the violation committed by PIW.
5 COMMISSIONER JORDAN: Let me see if I
6 understand this. In other words, let's assume
7 training had occurred as my colleague had planned
8 out would have been appropriate here and let's
9 assume they actually were demolishing--they removed
10 the platform correctly and they didn't cut into the
11 supporting steel, but at some point people had
12 occasion--and there was no accident even. But then
13 at some point people had occasion to see the
14 condition that people had been allowed to go to
15 work on. And I think this contract is not really a
16 demolition agreement that Sedgman undertook. It's
17 broader, sort of construction rehabilitation.
18 MR. POWASNIK: Right.
19 COMMISSIONER JORDAN: And it wasn't just
20 demolition. This demolition occurred as part of
21 even a broader job they were trying to do I
22 gather-- .
33
1 MR. POWASNIK: Right. I think they were
2 doing an addition--
3 COMMISSIONER JORDAN: --sort of attach
4 some skeleton of something--an addition. So, is it
5 sector's position that employees were exposed to a
6 hazardous situation just generally in being allowed
7 to work in that area, regardless of--
8 MR. POWASNIK: Regardless of the
9 occurrence of the accident, exactly.
10 COMMISSIONER JORDAN: Based on the
11 condition that was found afterwards. So then the
12 question comes and you're saying PWI or PIW--
13 MR. POWASNIK: PIW.
14 COMMISSIONER JORDAN: PIW had an
15 obligation to assess the situation before it would
16 allow employees to go into an area under the reg.
17 MR. POWASNIK: Yes.
18 COMMISSIONER JORDAN: But the reg is
19 essentially saying to any operator maintain
20 facilities in a safe condition so as to avoid
21 accidents. That in other words, you have--any
22 operator has an obligation to see that employees .
34
1 under its control do not enter an area that they
2 would be exposed to a hazard due to any sort of
3 deterioration or corrosion.
4 MR. POWASNIK: Yes.
5 COMMISSIONER JORDAN: Regardless of how
6 long they've been on the scene.
7 MR. POWASNIK: Exactly.
8 CHAIRMAN DUFFY: So that's like a general
9 duty clause?
10 COMMISSIONER JORDAN: Well, I think the
11 reg--well, the reg says maintain facilities and
12 structures.
13 CHAIRMAN DUFFY: In good repair to prevent
14 accident or injury.
15 COMMISSIONER JORDAN: In good repair so as
16 to prevent accident or injury. So if you are on a
17 site and they have employees that are going to go
18 into an area, does that reg impose some obligation
19 to see that they're not jeopardized or put in
20 danger from deterioration that may have occurred or
21 corrosion?
22 COMMISSIONER JORDAN: You know, I'm just .
35
1 trying to understand their theory.
2 CHAIRMAN DUFFY: Well, looking at your
3 scenario, I agree. If after the fact, this had
4 been taken down in a safe way and then it was
5 discovered that the members of that--the steel
6 members of that platform were in a state of extreme
7 degradation, then I would agree totally that there
8 was a citable offense there. But the citation it
9 seems to me would be aimed at Jim Walters.
10 COMMISSIONER JORDAN: PIW--Jim Walters.
11 So somebody that's--
12 CHAIRMAN DUFFY: And perhaps PIW.
13 MR. POWASNIK: But Sedgman also, I mean
14 because they're the--
15 COMMISSIONER JORDAN: Well, he said--I'm
16 sorry.
17 MR. POWASNIK: --they--this obligation
18 now, and so they're the ones responsible for this
19 area. And then they hire another contractor to
20 come in and actually do the work. So and they have
21 their employee there, so they expose their employee
22 and they expose other employees here. .
36
1 CHAIRMAN DUFFY: Granting matter of fact
2 that PIW is in a situation here that I think is
3 just based on the facts of this particular case,
4 they are a subcontractor to Sedgman for the purpose
5 of demolition but they are a subcontractor or they
6 are a contractor to Jim Walter Resources for the
7 purposes of repairing and replacing that steel in
8 the plant. So I think that that liability of PIW
9 arises from its contract to maintain the plant and
10 that's 200, but not for this demolition job, for
11 which MSHA doesn't have a standard unfortunately.
12 MR. POWASNIK: Well, I mean under our--and
13 the Secretary's interpretation, you don't need a
14 separate standard for demolition. You have this
15 standard. It's a plain--there's a plain language
16 here that says it applies--it's an unrestricted
17 application. There's no exception for demolition,
18 so you couldn't possibly be confused by thinking it
19 doesn't apply.
20 CHAIRMAN DUFFY: I can't believe that I
21 would be maintaining my automobile if I took a
22 sledgehammer to the windshield. It just--it .
37
1 doesn't fit for me. I'm sorry.
2 COMMISSIONER JORDAN: Yeah. But if you
3 knew--but if you were a mechanic and going to go in
4 even to sort of pull it apart and demolish it,
5 wouldn't there be some obligation of some part on
6 somebody that you just brought the car in there if
7 you knew it was going to fall on top of him when
8 he, you know, went under to look at it, even to
9 tear it apart. I mean that kind of--
10 MR. POWASNIK: The interpretation is not
11 that, you know, to maintain this so that you keep
12 it in perfect condition. I mean it's maintain it
13 while employees are demolishing it. Make sure it's
14 safe enough throughout the entire demolition
15 process.
16 COMMISSIONER YOUNG: One argument you made
17 in your brief that I found persuasive was that as a
18 general standard, you could use any means of
19 compliance, any reasonable means of complying with
20 the Act as the operator, correct?
21 MR. POWASNIK: Right.
22 COMMISSIONER YOUNG: But in this instance, .
38
1 where you don't have any standards, 1) how does an
2 operator know what compliance is enough?
3 You say that isn't--that this citation is
4 not being imposed because of the accident, which if
5 that's the case, it would seem to me that there
6 would at least be some guidance telling people when
7 you're demolishing something, come up with a plan.
8 Have a plan for how it's going to be approached so
9 you make sure you do it in a safe way.
10 Is there any kind of guidance or anything?
11 MR. POWASNIK: It's not necessarily the
12 plan. It's--
13 COMMISSIONER YOUNG: Well, that's what was
14 proffered at the hearing, wasn't it?
15 MR. POWASNIK: Well, there was testimony
16 about--
17 COMMISSIONER YOUNG: You're going to have
18 testimony about--
19 MR. POWASNIK: --about why Sedgman was
20 being held responsible for this, and one was it was
21 a plan or it was not a--there was no examination.
22 There was Gill looking at the structure .
39
1 from the second floor. And part of the underneath
2 was--he couldn't see part of that because of the
3 corrugated steel and there was a pipe in his way,
4 but he saw that there was some rust there.
5 So our position was to maintain this in
6 good repair, inspect the thing. Take a closer look
7 at it. Don't stand from the second floor and say
8 well, I can't see anything from there, so what?
9 I'll just let the people go up there. I mean he
10 could've gone up to the fifth floor and when that
11 corrugated sheeting did come down at a certain
12 point and so more of the underside was revealed.
13 So there was that method of complying in
14 addition to keeping the employees off that
15 particular area because it was--it did present a
16 possible danger or that was working from a man
17 basket and then there was one other--
18 COMMISSIONER YOUNG: That's not really
19 vicarious liability for Sedgman though, is it?
20 Isn't that more direct liability for renovation?
21 MR. POWASNIK: No. It's--well, it's
22 vicarious in the sense that there were things they .
40
1 could have done to protect these people and they
2 didn't do that.
3 COMMISSIONER YOUNG: But things they could
4 have done, Sedgman, not just PIW? Because PIW was
5 up there, did have an opportunity to inspect.
6 MR. POWASNIK: Right. And they were the
7 people who apparently--who were supposed to know
8 what was--how to do this. I mean they were hired
9 to do the construction and then they were told to
10 take this part down because it somehow was
11 interfering with the construction of the new
12 addition.
13 COMMISSIONER YOUNG: Is it reasonable to
14 hold--you've got a middle man contractor here in
15 this case, which is unusual as you noted, for them
16 to be cited and for it come up here.
17 Is it reasonable to hold a contractor
18 liable for what might be characterized as an
19 unforeseeable act of the subcontractor? I mean
20 they hired a professional company to carry out this
21 demolition and it was done in a way that
22 was--essentially causing--in a fatal accident. .
41
1 MR. POWASNIK: The cause might have been
2 unforeseeable but the possibility that the thing
3 would collapse, the possibility of the danger was
4 foreseeable. So they're not being held liable
5 because it fell down.
6 In fact, our expert testified that the
7 only reason why it fell was in addition to the
8 cutting, there was so much corrosion there. And
9 had there not been that much corrosion, there was
10 enough remaining support that it would have held
11 up.
12 COMMISSIONER JORDAN: And so--
13 MR. POWASNIK: So it was both the cutting
14 and the corrosion that caused the landing to fall.
15 CHAIRMAN DUFFY: Not withstanding the
16 Judge's determination that it would have fallen
17 even if it was new steel.
18 MR. POWASNIK: That was their expert's
19 testimony.
20 CHAIRMAN DUFFY: So the Judge accepted it.
21 MR. POWASNIK: As to the cause but we're
22 not arguing--I mean what we're saying is the cause .
42
1 is irrelevant here.
2 COMMISSIONER YOUNG: Because it could have
3 collapsed anyway.
4 MR. POWASNIK: Because it was a possible
5 danger.
6 CHAIRMAN DUFFY: But if it had collapsed
7 on its on just through normal use by Jim Walters
8 employees, then Sedgman wouldn't have had any part
9 of it, correct? I mean Sedgman was only there
10 because Jim Walter asked him to put in a new
11 structure.
12 MR. POWASNIK: Right. And once they got
13 there, that's when their duty arose.
14 CHAIRMAN DUFFY: To maintain the platform.
15 MR. POWASNIK: To keep it--right. Because
16 they were responsible for that entire section
17 there.
18 COMMISSIONER YOUNG: But when you start
19 talking about maintain, I mean understand wanting
20 to keep things in a safe condition. But if it's in
21 an unsafe condition, you don't maintain something
22 in an unsafe condition, you repair it. You don't .
43
1 maintain it in good repair if it's not in good
2 repair. You have to fix it; isn't that correct?
3 MR. POWASNIK: Yes. But if you're going
4 to demolish it--
5 COMMISSIONER YOUNG: Well, how does that
6 fit with this standard?
7 MR. POWASNIK: Well, what I'm saying--what
8 I said before, the Secretary is not saying fix it
9 so that it's brand new. Just fix it to the point
10 where it safe. All these employees were working on
11 it.
12 COMMISSIONER YOUNG: But you are saying
13 fix it.
14 MR. POWASNIK: Or don't put your employees
15 on it.
16 COMMISSIONER YOUNG: If it's not in good
17 repair, do you have an obligation to maintain it in
18 good repair? How do you get there? I mean that's
19 just--that doesn't make a lot of sense, even
20 construing this in accordance with the act.
21 MR. POWASNIK: How do you maintain it in
22 good repair while you're demolishing it? Is that .
44
1 your question?
2 CHAIRMAN DUFFY: Yes.
3 COMMISSIONER YOUNG: If it's not in good
4 repair when you get there--I mean you're saying
5 that their responsibility arose when they got on
6 the site to do the demolition work.
7 MR. POWASNIK: Right.
8 COMMISSIONER YOUNG: And if that's when it
9 arises, if it's not in good repair then, how do you
10 maintain it in good repair? You've got to put it
11 in good repair. Doesn't that--you can chop out
12 about five words, your duty is repair at that
13 point; isn't it?
14 MR. POWASNIK: Your duty is to make it
15 safe. Your duty is to make it safe to prevent
16 accidents--
17 COMMISSIONER YOUNG: But maintain doesn't
18 mean make it something. It means keep it
19 something; doesn't it? I mean maintain has a
20 meaning.
21 MR. POWASNIK: But you don't want to keep
22 it in the condition that it's in because-- .
45
1 COMMISSIONER YOUNG: I agree.
2 MR. POWASNIK: --you have to protect
3 employees from accident and injury. So you have to
4 do something.
5 COMMISSIONER YOUNG: But this is a
6 standard that--you're stuck with the word of the
7 standard, that the standard gives you.
8 MR. POWASNIK: Well, we think in this
9 situation--I mean you had three people here. You
10 had PIW, you had Sedgman and you had JWR. And
11 everybody had a responsibility to these employees
12 to keep them from working on the structure in the
13 condition that it was in. I mean, that's our
14 position in a nutshell.
15 CHAIRMAN DUFFY: I agree with you totally.
16 But that's in my view, a standard that doesn't
17 exist.
18 COMMISSIONER YOUNG: Shouldn't they have
19 been cited for something like not dangering the
20 area off or something else? I just--it's hard for
21 me to understand how you get to maintain something
22 that's not maintained to begin with. You can't .
46
1 maintain something in good repair if it's not in
2 good repair. You've got to put it in good repair.
3 CHAIRMAN DUFFY: Your time has expired,
4 counsel.
5 MR. POWASNIK: Thank you.
6 CHAIRMAN DUFFY: Mr. Moore?
7 MR. MOORE: I believe I've used all of my
8 rebuttal time on the principle portion of the
9 argument. And unless the Commission has additional
10 questions, I have nothing further on these two
11 issues.
12 COMMISSIONER SUBOLESKI: I guess I have
13 one question and that's that this does say--there's
14 one more word in this, in 77.200 and that says all,
15 all structures.
16 MR. MOORE: Yes.
17 COMMISSIONER SUBOLESKI: And the question
18 is how do you get around the word all?
19 MR. MOORE: Well, I think you get around
20 it the same way we've been talking about here this
21 morning is it applies to this structure, yes. But
22 it doesn't apply doing demolition because for .
47
1 example, let's assume for the sake of this
2 argument, that that structure was not in good
3 repair when Sedgman walks in the door.
4 The way to correct that bad repair because
5 they're not in a position to maintain it because
6 they're not there. One of the ways to correct it
7 would be to tear it down, which is what they did or
8 they were in the process of doing. That's why this
9 standard just doesn't fit here.
10 I would make one additional comment.
11 There was a comment made that Sedgman had the
12 expertise on demolition and all of that. Let us
13 all recognize that the Judge found that it was
14 PIW's responsibilities to design the methods of
15 demolition, not Sedgman.
16 Sedgman was brought in here to upgrade the
17 preparation plant and that's their expertise. The
18 means and methods for demolition was within PIW's
19 contractual purview. I realize we have other
20 issues with respect to the Mine Act but that's what
21 the Judge found.
22 COMMISSIONER YOUNG: But in this case, .
48
1 getting away from the condition that the thing was
2 in and whether that contributed to it, whether it
3 was in bad repair, if we were to assume otherwise,
4 that the condition was in good enough repair but
5 for the intervention of PIW, as an agent of Sedgman
6 in this context, you know, there would have been no
7 hazard created.
8 What's wrong with at that point saying now
9 maintain in good repair means while you're going
10 through this process, don't create a hazard in the
11 mine and inject a little bit of ordinary foresight
12 into the process where you have an opportunity to
13 do so?
14 I mean if you had the responsibility for
15 the demolition work under your contract, what's
16 wrong with saying why don't you explain to me how
17 you're going to do this and make sure that you've
18 got a speed break there with somebody thinking
19 through the process above the subcontractor
20 allotment?
21 MR. MOORE: Well, there was some thought
22 given in the process between Mr. Gill and Mr. .
49
1 Ryan(?), PIW's lead man. They discussed it, how to
2 remove the concrete. Mr. Gill assumed that they
3 wouldn't cut the structure until they--
4 COMMISSIONER YOUNG: That word assume just
5 bothers me.
6 MR. MOORE: Well, I recognize that but the
7 problem is that it's a common sense thing. I
8 frankly--and I will--let me say this. We're not
9 sure that the PIW employee who cut that middle
10 hanger did it deliberately, as part of the
11 demolition process. Because there was a tow
12 board(?) on that landing that he may have been
13 cutting and he may have accidentally cut the middle
14 hanger. That's not clear.
15 But either way while yes, Mr. Gill made
16 the assumption, but it's a common sense assumption.
17 You take the load off the steel and then you take
18 down the steel. That just makes sense. You
19 certainly don't in the process cut all the support
20 for the platform.
21 Because there are only three places this
22 is supported. They cut the north end and whether .
50
1 it was deliberate or not, they cut the middle
2 hanger, put a load on that connection that it
3 wasn't designed to take and it didn't take it.
4 But the problem is that I--I believe that
5 the evidence is that they did give some foresight
6 into it. I guess they didn't plan enough to
7 foresee the unforeseeable in Mr. Gill's mind.
8 Are there any--
9 COMMISSIONER JORDAN: I do have one
10 question. Would you please address the issue
11 of--counsel of the Secretary put forward that their
12 theory of liability--I have some question about
13 this--but their theory of liability actually rests
14 on a vicarious strict liability against Sedgman
15 based on PIW's liability?
16 MR. MOORE: Then you come into the issue
17 of--the whole issue of whether you cite Sedgman for
18 its contractor's violation since if you look at all
19 the factors under 20 Mile, I believe that you don't
20 cite Sedgman for PIW's violation there, because PIW
21 was the one responsible for demolition and
22 designing demolition. .
51
1 COMMISSIONER JORDAN: Now was PIW cited
2 for those same standards?
3 MR. MOORE: Yes. All three.
4 COMMISSIONER JORDAN: And they did not
5 contest it, they conceded liability there?
6 MR. MOORE: I can't tell you that one way
7 or the other.
8 COMMISSIONER JORDAN: --
9 MR. MOORE: I don't know because there
10 were some--cases against PIW employees. There
11 are--the website, MSHA website, which is the only
12 guide I have is unclear.
13 COMMISSIONER JORDAN: Okay.
14 MR. MOORE: Because--
15 COMMISSIONER JORDAN: I don't mean to put
16 you on the spot--
17 MR. MOORE: But I don't--
18 COMMISSIONER JORDAN: --to talk about
19 things that are not on the record. I mean--
20 MR. MOORE: I don't know what PIW did.
21 All I know is that Jim Walters contested theirs and
22 settled them and their settlements are a part of .
52
1 the stipulation.
2 COMMISSIONER YOUNG: Unlike 20 Mile
3 though, I mean here you have a Sedgman employee in
4 the environment walking around basically under the
5 hazard routinely if not everyday. So you have more
6 direct involvement there.
7 You had as you just acknowledged, some
8 direct involvement in--some direct involvement in
9 the planning process such as it was for demolishing
10 the structure. So it doesn't look to me like you
11 had the level of detachment that we found at 20
12 Mile with a contractor relationship here.
13 MR. MOORE: Well, you have a level of
14 detachment in terms of if you're looking at the
15 standard as maintaining that in good repair. The
16 process of deterioration was not something that
17 Sedgman was involved in. Yes, they had an employee
18 on site and yes, he was walking around. I don't
19 know whether frankly he walked under this landing
20 ever other than the day he looked up at it when
21 they were going to demolish it.
22 But the facts are that if they had done .
53
1 nothing to that landing, it was safe to remain
2 there. And not only does the expert evidence show
3 that, but also that's frankly prior to the accident
4 MSHA's determination since they didn't cite it.
5 COMMISSIONER YOUNG: But the plan was to
6 do something to the landing?
7 MR. MOORE: Yes.
8 COMMISSIONER YOUNG: Okay.
9 MR. MOORE: And they did something to the
10 landing. And if this accident hadn't occurred and
11 they had taken down that landing and even if they
12 had taken it down and they found some of the steel
13 deteriorated, all they would've been--they would
14 have been given a credit for correcting the
15 condition rather than cited for it, I think. I
16 don't think they would have been cited if the
17 accident didn't occur.
18 If there's nothing further now? Thank
19 you.
20 CHAIRMAN DUFFY: Thank you, Mr. Moore.
21 We'll now move on to the Secretary's
22 issues on review. Mr. Powasnik? .
54
1 MR. POWASNIK: You're only giving me five
2 minutes?
3 The penalty portion is--there were--the
4 Judge said--MSHA proposed a penalty of $35,000 and
5 the Judge reduced it to $1,000. And then he
6 vacated the penalty. And it's the Secretary's
7 position that the Judge erred first by
8 significantly reducing the penalty without any
9 explanation as to why he was doing so, other than
10 the statement that he was placing less than
11 considerable weight--placing considerable weight on
12 the less than high negligence finding.
13 COMMISSIONER SUBOLESKI: Back to those
14 items, he discussed the negligence issue as you
15 said. In addition to that, he also said that he
16 considered the gravity to be serious in his
17 decision. And then he makes a reference to the
18 fact that he has considered the remaining factors
19 in 110(I).
20 And those factors if you look at them,
21 they're--you know, they're history of violations,
22 size, financial condition, and abatement. And if .
55
1 you consider those, those are really all factual
2 issues.
3 They're either a certain--they're a
4 certain size and nothing can change that. And are
5 you arguing that you want him--you know, in other
6 words, he's discussed the two main issues. He has
7 discussed negligence. He's discussed gravity.
8 Those are the two subjective issues. The others
9 are more or less objective.
10 And my question is do you think that he
11 just needs to list these other four, rather than
12 say he considered the four. Or are you going
13 beyond that or are you arguing something beyond
14 that point?
15 MR. POWASNIK: Well, I think the
16 commissions in cases say that there should be some
17 type of explanation when he makes a significant
18 reduction. And it doesn't appear that he gave an
19 explanation for such a large reduction and that's
20 what we were asking for, some type of explanation.
21 It can't be--
22 COMMISSIONER SUBOLESKI: So since it's .
56
1 negligence, you want them to further discuss the
2 negligence; is that it? I mean why?
3 To some extent if you look at this, the
4 Judge made two rulings. One is he issued the--he
5 affirmed the citation and that basically, you know,
6 when you look at a citation, you're either in or
7 you're out. That's the decision you make. But
8 then the fine kind of reflects how far in or out
9 you are--or not out, how far in you are.
10 And so it's not that you want him to list
11 these other four factors, you want him--you would
12 have expected a further discussion of the
13 negligence in this case?
14 MR. POWASNIK: Right.
15 COMMISSIONER SUBOLESKI: Okay.
16 MR. POWASNIK: The other error that the
17 Judge made was vacating the penalty. The Judge
18 found a 16 month delay between the action at which
19 occurred on August 29, 2001 and the proposed
20 penalty on December 31, 2001. He based his
21 finding--he said that the delay was similar to the
22 delay that occurred in 20 Mile and vacated the .
57
1 penalty because the Secretary failed to establish
2 adequate cause for the delay.
3 In other words, the Judge erred in
4 vacating the penalty first because the Secretary's
5 interpretation of Section 105(a) is that a
6 perceived delay should never result in avoiding
7 agency action, especially when there's a public
8 right at stake, which there is here, which is
9 protecting the safety and health of miners. The
10 legislative history supports that interpretation.
11 And vacating the penalty as the Judge did
12 undercuts Congress' intent that the penalty would
13 act as the mechanism for encouraging compliance.
14 CHAIRMAN DUFFY: Counsel, are you saying
15 that the Commission never has the authority to
16 vacate a penalty?
17 MR. POWASNIK: Right.
18 CHAIRMAN DUFFY: So, how do square that
19 with language in 105(d) that says that we're
20 authorized to affirm, modify, or vacate a citation,
21 order, or penalty?
22 MR. POWASNIK: I think the Secretary .
58
1 argues that you can't look at that language in a
2 vacuum. You have to look at the language in the
3 entire section and your Commission Case Law that
4 says that the Commission must assess a penalty for
5 an affirmed violation.
6 We also believe that the--
7 CHAIRMAN DUFFY: I thought in your brief
8 you were saying that 105 doesn't establish the
9 authority of the Commission that 110 does.
10 MR. POWASNIK: Right.
11 CHAIRMAN DUFFY: There's a lot in 105(d)
12 that if we didn't have it, we wouldn't be in
13 business.
14 MR. POWASNIK: Well, if you go into 105(d)
15 and you can--you know, under that language, if you
16 can vacate--under that language, if you read that
17 language that way, if you can vacate the penalty,
18 then you could also vacate the citation and affirm
19 the penalty because of that specific language
20 there.
21 CHAIRMAN DUFFY: We would never vacate a
22 citation and leave the penalty I don't think. .
59
1 MR. POWASNIK: Right. So that's why
2 looking at that--
3 CHAIRMAN DUFFY: But we can vacate a
4 penalty and still leave the citation. I mean
5 that's what we said in 20 Mile. And we're talking
6 about Commission precedent. Now, we'll just see
7 what happens in a month or so, but that sort of
8 thing can stand now.
9 MR. POWASNIK: Well, when the Court
10 issued--when the D.C. Circuit issued its decision,
11 it made a reference to that argument to the
12 Secretary's position and then went onto decide and
13 then went onto say that it doesn't have to decide
14 that issue because what it was doing was holding
15 that the delay in that case absent any prejudice
16 was not--was reasonable.
17 COMMISSIONER YOUNG: Isn't an evaluation
18 of this case on its specific facts an
19 acknowledgment that you're not dealing with the
20 universal black letter thou shalt not vacate any
21 penalty interpretation by the Court?
22 I mean the Court could have come out and .
60
1 said hey, the Act says you must assess and that's
2 how we view the law, and they didn't do that.
3 MR. POWASNIK: Right. All they did was
4 mention that and say they don't have to really
5 decide that because what they are deciding is there
6 was no--it was issued within a reasonable time. So
7 there was no need to discuss the broader issue.
8 And you could do that here. There would be no
9 reason to discuss the broader issue if you find
10 that the delay in this case, which was 11 months,
11 was similar to the delay in 20 Mile, which the
12 Court found was issued within a reasonable amount
13 time.
14 CHAIRMAN DUFFY: But there's a distinction
15 here to, isn't there, that the citations were
16 issued simultaneously with the accident report?
17 MR. POWASNIK: Right.
18 CHAIRMAN DUFFY: Along that line--I just
19 have a question and I don't know if you can answer
20 it based on the record. But what constituted
21 termination, abatement and termination of those
22 citations and orders when they were issued after .
61
1 the report was issued. Do you know?
2 MR. POWASNIK: I don't know in this case
3 what constituted the abatement.
4 CHAIRMAN DUFFY: And termination. What
5 I'm saying is that in 20 Mile, you had an order
6 issued, abated, and terminated within a space of
7 four days. And I think that may have lead to some
8 confusion on the part of the Court. Because they
9 started running the clock after the accident
10 investigation because they thought the operator had
11 to respond to the investigation in order for the
12 Secretary to make up her mind as to what good faith
13 abatement was.
14 But there you have the citation was
15 terminated so abatement and good faith as issues
16 were already resolved within four days. Here, you
17 have the accident occurring and then whatever it
18 is, eight-nine months later, the investigation
19 report coming out simultaneously with the citations
20 and orders.
21 And what I'm curious about is to when were
22 those citations and orders essentially terminated .
62
1 for purposes of determining the operator's good
2 faith?
3 MR. POWASNIK: I don't know.
4 CHAIRMAN DUFFY: Okay, okay.
5 MR. POWASNIK: It would just be, you
6 know--our position is that time begins to run when
7 the investigation report is issued, which was I
8 think five months after the accident occurred.
9 COMMISSIONER YOUNG: There's another
10 distinction between this and the previous 20 Mile
11 case where the penalty was vacated. In this case,
12 the Judge made the finding that it was unreasonable
13 in part because you had offered up an excuse on
14 there being a new computer system and then didn't
15 offer any evidence on that.
16 Why is it unreasonable for a Judge to
17 consider your failing to produce the evidence that
18 you said you were going to produce? Doesn't--give
19 that burden to the Secretary and doesn't that make
20 this case a little different from the other 20 Mile
21 case?
22 MR. POWASNIK: Well, I can't explain what .
63
1 happened between telling the Judge we were going to
2 produce some evidence on it and then not having
3 done so. But I don't think the case is that much
4 different in terms--I mean from 20 Mile in terms of
5 the time period and it's only I think maybe 21 days
6 shorter than what happened in 20 Mile. And in that
7 case, I mean the Court didn't really look at the
8 reasons, it just said, look, this delay is
9 issued--this amount of time is not an unreasonable
10 amount of time to do that.
11 And here, if the Judge--maybe the Judge
12 should have pressed the attorney as to you know,
13 for more reasons but without those reasons, I
14 mean--suffice it to say that it's a process. It's
15 a process that--and it's not a determination that's
16 made by one person, so it does take some time. It
17 takes some time to--for this type of--for the
18 penalty when it's a special assessment to be issued
19 by the Secretary because it goes through different
20 offices.
21 COMMISSIONER YOUNG: There was another
22 penalty assessed in this case in three months. Mr. .
64
1 Moore would have us establish that as a benchmark
2 for reasonableness. Why should we not look at it
3 that way?
4 MR. POWASNIK: Well, first of all because
5 at least a 10 month period of time is reasonable
6 according to the D.C. Circuit, absent any
7 prejudice. So that's one reason. The second
8 reason is each penalty is different and the case is
9 different so I think that penalty--I'm not sure if
10 it was a special assessment or not, but that had to
11 do with the safety belts, right?
12 COMMISSIONER SUBOLESKI: Right.
13 MR. POWASNIK: This one was a separate
14 penalty so it's moving in a separate direction and
15 it's going through the process. Now, the Secretary
16 has taken some steps to make it work quicker and I
17 think there's a matrix on the website that shows
18 people how the penalty is proposed and it's meant
19 to come up with a specific dollar amount a lot
20 quicker.
21 So as far as working towards getting these
22 things to happen sooner, you know, the Secretary is .
65
1 working on that. But each case should be looked at
2 separately and individually. There shouldn't be
3 like one specific time that's set for all of the
4 penalties.
5 CHAIRMAN DUFFY: Counsel, I agree with you
6 and I don't think you need to answer for what
7 happened at trial but I would join my colleague in
8 saying that if the Secretary offers an excuse for
9 what the operator contends is an unreasonable
10 delay, it's incumbent upon the Secretary to offer
11 the evidence as to why that's a reasonable delay,
12 not for the Judge to try to beat it out of him.
13 MR. POWASNIK: Yes. Any other questions?
14 Thank you.
15 CHAIRMAN DUFFY: Thank you.
16 Mr. Moore?
17 MR. MOORE: Thank you. The Secretary in
18 entering into that stipulation, I can't speak for
19 them but the phrasing of would offer evidence, it
20 was my understanding of that stipulation which when
21 we entered into it meant that was their excuse for
22 the delay. So at least--I don't want to suggest .
66
1 they didn't offer anything to explain the delay.
2 Their offer was computer problem and then
3 obviously, they didn't explain it further for the
4 Judge.
5 The description both in the Secretary's
6 brief of the process in here today, the problem
7 with that description is the presumption it moves
8 the way the process normally moves and there is not
9 a shred of evidence in this record that it moved
10 the way it normally moves. So that's all extra
11 record representation as to that suggestion it
12 moved the way it was supposed to move.
13 There was a complication on the delay
14 issue that occurred to me while I was listening to
15 the questioning. The problem with the 20 Mile D.C.
16 Circuit Decision is if I read it, in having argued
17 it and lived with it for a while, if I read it, the
18 way I read it is they peg it to the actions taken
19 by the operator to terminate the citations. The
20 confounding problem here is we have the report that
21 was issued in February and the citations were
22 issued the same day and were abated--terminated the .
67
1 same day.
2 What is described in the citations as the
3 abatement occurred long before. Now because we
4 didn't have the D.C. Circuit's 20 Mile Decision at
5 the time we argued Sedgman, we didn't really
6 address that. But if you look for example at the
7 abatement they talk about, there was for example in
8 the 77.200, there was abatement because tech
9 support came in and evaluated the plant and did a
10 full evaluation.
11 Well, that occurred during the process of
12 the accident investigation back in September 2000,
13 one. So, it's--the abatement actually occurred
14 before the citations--long before the citations
15 were issued, as it did for the fall protection one,
16 because they required training and it's described
17 in--but those citations were terminated the same
18 moment they were issued.
19 I actually assume looking at them that
20 they came out with the fully written and terminated
21 at that point. So that's a confounding issue
22 because if what you're waiting for is the .
68
1 abatement, it actually goes back under the 20 Mile
2 Decision, back to probably September 2001 and
3 creates some additional delay problems for the
4 Secretary because it's not the--ignore the report
5 for the moment. If it's when the citations--the
6 action is taken to terminate the citations are
7 done, then you go back almost to the time of the
8 accident.
9 I believe that the Commission had
10 addressed the whole issue of whether or not it has
11 the authority to vacate penalties. I think the
12 language in 105(d) makes that plain. I don't think
13 it creates a problem where you might vacate the
14 citation but not the penalty. That would be
15 illogical.
16 But being able to vacate the penalty,
17 frankly, as the Commission knows, I have argued
18 both in Sedgman and previous cases that if there's
19 an unreasonable delay, the whole petition for
20 assessment of civil penalty should be dismissed
21 against the operator.
22 The Commission saw fit to take an .
69
1 intermediary remedy, which I think is an
2 appropriate remedy. And we would submit that that
3 is an appropriate remedy for delay here. There are
4 two issues.
5 Obviously, we have the--in terms of the
6 Secretary's argument about how you measure the
7 delay and whether it's reasonable, we have the
8 three month period to assess another citation,
9 which was also tied directly to the accident.
10 It's--they checked the a feared box.
11 We have the Secretary's program policy
12 letter that this Commission has noted in 20 Mile
13 where they say six months after the accident. We
14 have exceeded that. We also have we can look at
15 the OSHA penalty and they talk about six months
16 being the outer limit and anything under that may
17 be subject to a reasonable promptness argument.
18 I think that we're in a situation where
19 we're not arguing--we shouldn't be arguing about
20 whether or not the delay was unreasonable. It's
21 just the Secretary failed to explain their delay.
22 On the penalty itself, I'm frankly a bit .
70
1 puzzled. Because we have the ALJ who started out
2 with a citation against Sedgman for 77.200 that was
3 marked as high negligence, unwarrantable failure.
4 He threw out the unwarrantable failure. He said
5 the negligence wasn't as high. He didn't
6 specifically characterize it but the next step down
7 on MSHA's form is moderate.
8 We only need to draw a comparison. For
9 the operator that owned this plant was present
10 throughout the 20 year period, who was also cited
11 under 77.200 and that was also denoted as having
12 moderate negligence, the Secretary of Labor
13 believed the appropriate penalty was $655.
14 Sedgman's penalty as assessed by the Judge
15 before he vacated the penalty was $1,000. Given
16 the fact that we know from looking at this that
17 however we interpreted 77.200 at this point, that
18 the failure to maintain over the course of time was
19 not Sedgman's responsibility. It seems to me that
20 there cannot be a quibble with the $1,000 penalty
21 assessed by the Judge by the Secretary.
22 COMMISSIONER YOUNG: Well just getting to .
71
1 the point, I mean there was a reduction of what?
2 Almost or slightly more than 70 percent of the
3 penalty; wasn't there?
4 MR. MOORE: That's correct.
5 COMMISSIONER YOUNG: I mean that's not a
6 step down. If all you're doing is premising that
7 on a shift in the negligence, if that's the
8 assumption in the change; isn't that a big step
9 down? Aren't you going from high--you're not going
10 to moderate. Are you going to low negligence?
11 Is it a comparative fall thing where he
12 says look, PIW got hammered on its penalty. I
13 think they were primarily responsible and
14 proportionately this seems more appropriate to me
15 because of the factors and then go through them.
16 What's wrong with requiring more of an
17 explanation?
18 MR. MOORE: In this particular case, we
19 don't have and we rarely have other than the boiler
20 plate that Secretary submits with a special
21 assessment, we don't have why they arrived at the
22 $35,000 penalty initially. But I don't think we .
72
1 should be looking at well, he reduced it to $1,000
2 because that's not--this is not according to any
3 formula or anything like that.
4 Well, let's take a look at. Let's
5 compare. We have two entities to compare here, Jim
6 Walters and Sedgman. Well, both probably moderate
7 negligence. We know the Secretary found moderate
8 negligence for Jim Walters. And we know the Judge
9 found less than high negligence, which places it at
10 moderate. Jim Walters is large; Sedgman is small.
11 I don' t know what Jim Walters' violation
12 history is. We know Sedgman has no violation
13 history. We know that for both the abatement
14 appears to be the same, brought in tech support and
15 looked at the plant and corrected it and Jim
16 Walters corrected the conditions that were
17 identified in the plant with technical support.
18 COMMISSIONER YOUNG: But see, you're going
19 through a deductive process. Just as a
20 housekeeping matter as a commission, should we
21 maybe require a little more explanation when there
22 is such a significant reduction? .
73
1 At some point, you know, you reached the
2 point where the Secretary is dealing mainly with
3 an--issue on penalty reduction where the Judge is
4 not making a finding that the case is substantially
5 unjustified. But you know, you're creeping into
6 that territory at a 70 percent reduction of the
7 penalty.
8 MR. MOORE: Whether I'm creeping into the
9 territory or not, I think it involves fundamental
10 fairness that operators in similar situations be
11 assessed similar penalties. There is for the
12 special assessment process, there may now be a
13 matrix. I'm less hopeful that that process is as
14 speedy as the Secretary represents.
15 But we don't know what goes on in that
16 process and what criteria they use. And we know a
17 maximum penalty and a minimum penalty, but the
18 commission has the authority to assess penalties.
19 And while the Secretary performed the service
20 function as I see it on proposing penalties, it's
21 ultimately up to the Commission.
22 And whether or not the ALJ reduces what .
74
1 was proposed by the Secretary or not or whether
2 they reduce it significantly, the ALJ has to make
3 that determination and I think he made an
4 appropriate determination here.
5 I would quibble that I thought it
6 shouldn't have been higher than Jim Walters' but he
7 made an appropriate determination looking at the
8 criteria and looking at all of the evidence. And I
9 don't think that we happen to be lucky here in that
10 we have a penalty to compare it to. And I think he
11 didn't enunciate that. And whether or not he did
12 or not, that was part of his thinking, I don't
13 know. But he--
14 CHAIRMAN DUFFY: Counsel, do you know if
15 the Jim Walters settlement, was that approved by
16 another ALJ or was that done prior to even the
17 contest being filed?
18 MR. MOORE: I can't--I believe it was
19 approved by another ALJ.
20 CHAIRMAN DUFFY: Okay. So--
21 MR. MOORE: And it was done before we went
22 to trial in sufficient time that we could stipulate .
75
1 to it but I don't recall which ALJ. But--
2 CHAIRMAN DUFFY: My concern is that I
3 could accept everything you had to say but I tend
4 to think that Judge might have been a bit more
5 forthcoming as to how he arrived at that.
6 Looking back at the Old Historical and I
7 think the Energy West cases, those were both--those
8 both involved violations that were attributed to
9 idiosyncratic and unforeseen conduct by a minor,
10 and the commission was very clear saying the
11 operator should have been cited for the violation
12 but the penalty could be reduced substantially
13 because of the negligent factor.
14 And here, I sort of think it goes a bit
15 double. You've got someone more tenuously
16 connected to the violation, JWR and Sedgman,
17 vis-a-vis PIW. And that might be a factor in
18 reducing it but I would like to have seen the Judge
19 explain that a little bit more.
20 MR. MOORE: Perhaps a fuller explanation,
21 though I don't think that Jim Walters' connection
22 to this violation, the 77.200 violation is tenuous; .
76
1 it's their plant. But I--even if he had gone into
2 a fuller explanation, I think it's perfectly
3 justified what he did.
4 And all you need to do is look at what the
5 Secretary of Labor did with respect to one of the
6 other operators on site, who, as we've been
7 discussing here this morning, owns and operates
8 that plant and would have been present throughout
9 any deterioration.
10 CHAIRMAN DUFFY: --my explanation was the
11 decision is subject to 77.200, that for me, remains
12 to be seen.
13 MR. MOORE: Yes.
14 COMMISSIONER YOUNG: Getting back to the
15 vacation and the penalty from--and aside from the
16 Court of Appeals decision in 20 Mile, I didn't go
17 along with the majority in the 20 Mile case in
18 large part because I didn't see a basis for a find
19 as a matter of law that the period was unreasonable
20 and I think that's what we would've had to have
21 done in that case.
22 This seems to be an equivalent time period .
77
1 and as I recall in the 20 Mile case, there was even
2 less of an excuse. I mean basically it was fessed
3 up as bureaucratic incompetence and neglect than
4 what was offered in this case.
5 So, in both cases you have no valid excuse
6 and you have an equivalent time period, how can you
7 persuade me to go along with vacating the penalty
8 in this case?
9 MR. MOORE: The way I would do that, aside
10 from the fact that the Secretary has sort of
11 established the benchmarks for the reasonable
12 periods for assessment of penalties and they
13 exceeded those, I would also say that in the
14 legislative history when they were discussing the
15 whole issue of prompt assessment of penalties, that
16 the length of delay here exceeded anything that the
17 United States Congress thought was an unreasonable
18 delay.
19 I think the only one that they didn't was
20 for health violations. That's the only one that
21 came in that would have exceeded the delay here.
22 So I think that if you use those as .
78
1 benchmarks, then the delay is unreasonable. I
2 don't think you can look outside the Mine Act for
3 what might be legally a reasonable period because
4 Mine Act, in this essence is sui generous, the
5 Congress said it was absolutely necessary to have
6 prompt assessment of penalties and the Secretary
7 hasn't met her own guidelines, hasn't met
8 Congressional guidelines, hasn't offered a
9 reasonable explanation as to why she didn't--
10 COMMISSIONER YOUNG: --select guidelines.
11 I mean we operate here with strict time limits that
12 are jurisdictional to a large extent. The Congress
13 could have done that and said if you don't bring it
14 within X days, 150 or whatever, you know unless
15 there's extreme circumstances. They could have
16 been more detailed and drawn a line and said you
17 don't go beyond this line, but they didn't do that.
18 MR. MOORE: They did not do that. I wish
19 they had frankly, but obviously--but so the
20 Secretary is given a little more leeway. But they
21 at least from what I observe, they've been given an
22 inch and they're taking a mile, that they are not .
79
1 fulfilling as shown here, their requirement that
2 they assess penalties in a reasonably prompt
3 fashion.
4 COMMISSIONER YOUNG: But that gets to the
5 deterrent factor of the penalty. How does having
6 no penalty provide a greater deterrent than having
7 a late penalty?
8 MR. MOORE: I don't think either one has a
9 deterrent effect, except and let me--because a late
10 penalty has no deterrent effect anymore than no
11 penalty does, but the principle deterrent effect
12 and we can't ever forget, has nothing to do with
13 the penalty. Yes, the penalties provide a
14 deterrent effect.
15 But the principle deterrent effect is you
16 have to fix it and you have to fix it now. You
17 don't even get a hearing on your 77.200 violation
18 whether it applies. You've got to do it now. If
19 that's--that is the principle deterrent effect.
20 We can't ever forget that. The fact that
21 we are required to abate long before we ever get to
22 a hearing is the principle effect that causes .
80
1 people to want to comply.
2 COMMISSIONER YOUNG: So if there's no real
3 deterrent effect there, why would you argue that
4 you've got to vacate the penalty where there's no
5 prejudice? I mean I can understand if there's
6 prejudice.
7 MR. MOORE: We still have to pay the
8 penalty if the Commission imposes it. In terms of
9 that particular violation, it doesn't have a
10 deterrent effect. We want you to vacate the
11 penalty for two reasons. One is because the
12 Secretary unreasonably delayed. The second is it's
13 your only method of overseeing the assessment
14 process.
15 The Commission has determined that it can
16 vacate penalties, and the only way it can oversee
17 that process to send the message to MSHA to do
18 their statutory job is to vacate the penalty.
19 COMMISSIONER YOUNG: Can't the Secretary
20 of Labor do that, oversee it, make changes in the
21 process, improve it,--change things up?
22 MR. MOORE: The Secretary of Labor can do .
81
1 all of those things but this Commission has the
2 responsibility for assessing penalties so I believe
3 it resides with this Commission to do what it can.
4 It can't change the way MSHA assesses penalties
5 directly but it can do it indirectly by vacating
6 penalties that are a product of unreasonable delay.
7 Any further questions?
8 CHAIRMAN DUFFY: No. Thank you very much.
9 MR. MOORE: Thank you very much.
10 MR. POWASNIK: I don't have anything
11 further to add unless you guys have any questions.
12 Okay. Thank you, Commission.
13 CHAIRMAN DUFFY: Thank you both. I'd like
14 to congratulate both counsels on the briefs and the
15 oral arguments today. They've been very, very
16 helpful to us. We will be meeting on this
17 particular case for decisional purposes--do we have
18 a date yet?
19 COMMISSIONER JORDAN: Yeah. February--
20 COMMISSIONER YOUNG: Fifteenth or
21 sixteenth.
22 CHAIRMAN DUFFY: February 15. .
82
1 COMMISSIONER JORDAN: Sixteenth.
2 CHAIRMAN DUFFY: Sixteenth, okay. I
3 should have had that in my notes but I didn't. So
4 we will take that up on February 16. Again, thank
5 you, counsel. And we will adjourn.
6 (Whereupon, at 11:25 a.m., the oral
7 argument concluded.)