The Commission has set forth the parameters for determining the reasonableness of the Secretary’s assertion that an entity’s activities constitutes “milling” under section 3(h)(1) of the Act. Watkins Engineers & Constructors, 24 FMSHRC 669 (July 2002). The Commission stated:

The first inquiry in statutory construction is “whether Congress has directly spoken to the precise question at issue.” Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842 (1984); Thunder Basin Coal Co., 18 FMSHRC 582, 584 (Apr. 1996). If a statute is clear and unambiguous, effect must be given to its language. See Chevron, 467 U.S. at 842-43; accord Local Union No. 1261, UMWA v. FMSHRC, 917 F.2d 42, 44 (D.C. Cir. 1990). However, when a statute is ambiguous or silent on a point in question, a further analysis is required to determine whether an agency’s interpretation of the statute is a reasonable one. See Chevron, 467 U.S. at 843-44; Thunder Basin, 18 FMSHRC at 584 n.2; Keystone Coal Mining Corp., 16 FMSHRC 6, 13 (Jan. 1994). Deference is accorded to “an agency’s interpretation of the statute it is charged with administering when that interpretation is reasonable.” Energy W. Mining Co. v. FMSHRC, 40 F.3d 457, 460 (D.C. Cir. 1994) (citing Chevron, 467 U.S. at 844). The agency’s interpretation of the statute is entitled to affirmance as long as that interpretation is one of the permissible interpretations the agency could have selected. See Joy Techs., Inc. v. Sec’y of Labor, 99 F.3d 991, 995 (10th Cir. 1996), cert. denied, 520 U.S. 1209 (1997) (citing Chevron, 467 U.S. at 843); Thunder Basin Coal Co. v. FMSHRC, 56 F.3d 1275, 1277 (10th Cir. 1995).

The Supreme Court recently recognized that Chevron deference is appropriately applied to an agency’s interpretation of a statute when Congress delegated authority to the agency to speak with the force of law when it addresses ambiguity or “fills in a space” in the statute and the agency's interpretation claiming deference was promulgated in the exercise of that authority. United States v. Mead Corp., 533 U.S. 218, 226-27, 229 (2001). Section 3(h)(1) contains an express delegation of authority to the Secretary to determine what constitutes milling.

See In re: Kaiser Aluminum and Chem. Co., 214 F.3d 586, 591 (5th Cir. 2000) (“Congress expressly delegated to the Secretary . . . authority to determine what constitutes mineral milling”) (internal quotations omitted), cert. denied, 532 U.S. 919 (2001). Thus, Congress explicitly left a gap for the Secretary to fill with respect to the definition of milling. Under Mead, 533 U.S. at 227, the Secretary’s interpretation of milling is entitled to acceptance if it is reasonable. See Chevron, 467 U.S. at 843-44; Thunder Basin, 18 FMSHRC at 584 n.2; Keystone Coal,

            16 FMSHRC at 13. Id. at 672-73. 

                        b. OSHA/MSHA Interagency Agreement

            Consequently, disposition of the jurisdictional question hinges on whether the Secretary’s assertion that Alaska’s screening activities constitute milling is reasonable. Resolution of this issue requires consideration of the Secretary’s Interagency Agreement, as well as application of the traditional functional analysis to determine if the subject activities are normally performed by a mine operator. As a threshold matter, in 1979, consistent with the statutory authority delegated to the Secretary in section 3(h)(1) to unify jurisdiction under the oversight of one Assistant Secretary, the Mine Safety and Occupational Safety and Health divisions entered into an Interagency Agreement. 44 Fed. Reg. 22827 (Apr. 17, 1979). 

            The Interagency Agreement noted that:

Milling is the art of treating the crude crust of the earth to produce therefrom the primary consumer derivatives. The essential operation in all such processes is separation of one or more valuable desired constituents of the crude from the undesired contaminants with which it is associated.

Id. at 22829. (Emphasis added).

            In other words, milling is an upgrading process that involves the separation of valuable minerals from earthen material. Id. The Secretary asserts that the subject screening process constitutes milling because the separated rock material has an intrinsic value. The Secretary’s reliance on the concept of intrinsic value is misplaced. Milling concerns a process performed to make the end-product suitable for a particular use or to meet market expectations. Oliver Elam, 4 FMSHRC at 8. Examples are crushing and grinding activities at a quarry that pulverize minerals for the purpose of creating various materials for end-users. As distinguished from the instant case, the materials are typically transported by or to the consumer for use at a desired location because of the materials’ intrinsic value.

            Here, however, the screened rock is bulk material extracted from numerous areas adjacent to the haul road as a matter of convenience. As described in the Interagency Agreement, such bulk material is characterized as a “borrow pit.” Alaska’s intermittent seasonal use of the mobile Sag Screener to separate different sizes of rock, as the fitness for purpose need arises to fill the haul road, does not rise to the level of “milling” products to meet market specifications.

            The Interagency Agreement delineates the elements of a borrow pit and resolves jurisdictional questions. The Agreement states:

“Borrow Pits” are subject to OSHA jurisdiction except those borrow pits located on mine property or related to mining. (For example, a borrow pit used to build a road or construct a surface facility on mine property is subject to MSHA jurisdiction). “Borrow Pit” means an area of land where the overburden, consisting of unconsolidated rock, glacial debris, other earthen material overlying bedrock is extracted from the surface. Extraction occurs on a one-time only basis or only intermittently as need occurs, for use as fill materials by the extracting party in the form in which it is extracted. No milling is involved, except for use of a scalping screen to remove large rocks, wood and trash. The material is used by the extracting party more for its bulk than its intrinsic qualities on land which is relatively near the borrow pit.

44 Fed. Reg. at 22828 (Apr. 17, 1979). (Emphasis added).

            To further explain its jurisdiction, or lack thereof, over borrow pits, MSHA adopted interpretive guidelines in 1996 to clarify its 1979 Interagency Agreement. The guidelines provide in pertinent part:

Thus, if earth is being extracted from a pit and is used as fill material in basically the same form as it is extracted, the operation is considered to be a “borrow pit.” For example, if a landowner has a loader and uses bank run material to fill potholes in a road, low places in the yard, etc., and no milling or processing is involved, except for the use of a scalping screen, the operation is a borrow pit. The scalping screen can be either portable or stationary and is used to remove large rocks, wood or trash. In addition, whether the scalping is located where the material is dug, or whether the user of the material from the pit is the owner of the pit or a purchaser of the material from the pit, does not change the character of the operation, as long as it meets the other criteria.

MSHA Program Policy Manual, Section 4, I.4-3 (1996). (Emphasis added). 

            I stress that I recognize that the legislative history of the Mine Act supports the proposition that Congress intended a broad interpretation of what constitutes a “coal or other mine.” In this regard, the Senate Committee stated that “what is considered to be a mine and to be regulated under this Act [shall] be given the broadest possibl[e] interpretation, and … doubts [shall] be resolved in favor of … coverage of the Act.” S. Rep. No. 95-181, 95th Cong., at 14 (1977), reprinted in Senate Subcomm. on Labor, Comm. on Human Resources, 95th Cong., Legislative History of the Federal Mine Safety and Health Act of 1977, at 602 (1978) ( “Legis. Hist.”). See Marshall v. Stoudt’s Ferry Preparation Co., 602 F.2d 589, 591-92 (3d Cr. 1979), cert. denied, 444 U.S. 1015 (1980).

            Although doubt provides a basis for broadly interpreting the Mine Act’s jurisdictional scope, it is disingenuous to find doubt where none exists. The Secretary’s proffered interpretation is undermined by the Interagency Agreement and subsequent guidelines. These documents reflect the Secretary’s recognition that the use of a scalping screen to maintain a road, by using material removed from areas located in close proximity to the road, does not provide an adequate basis for Mine Act jurisdiction. Consequently, the Secretary’s assertion that the subject screening activities now constitute “milling” under section 3(h)(1) of the Act is, at best, arbitrary.

                        c. Functional Analysis

            I am also cognizant that, arguably, the Secretary is not bound by the terms of the Interagency Agreement because section 3(h)(1) authorizes the Secretary “to give due consideration to the convenience of administration” when delineating OSHA and MSHA oversight. However, even if the Secretary elected to disregard the terms of the Interagency Agreement, conferring MSHA jurisdiction would be contrary to the traditional functional analysis that has been utilized by the Commission and the Courts to resolve questions of

Mine Act jurisdiction.

            The seminal case in this regard is Oliver M. Elam, supra, wherein despite acknowledging the broad reach of the Mine Act, the Commission determined Elam’s activities, as a commercial dock operator who loaded coal onto barges, to be outside the coverage of the Act. Elam noted that “inherent in the determination of whether an operation is properly classified as “mining” is an inquiry not only into whether the operation performs one or more of the listed work activities [in section 3(h)(1) such as milling], but also into the nature of the operation performing such activities.” Elam, 4 FMSHRC at 7 (emphasis in original). Elam established a two prong test: (1) whether the subject activities are normally performed by a mine operator; and (2) whether the activities performed are undertaken to make the extracted material suitable for a particular use or to meet market specifications. Id. at 8.

            Consistent with Elam, in a split decision in Kinder Morgan, the Commission identified the relevant considerations for determining whether the processing and handling of extracted material constitutes mining. Such considerations include the degree of handling and transportation performed, and whether such handling and use is the type normally performed by a mine operator rather than an end-use consumer. Kinder Morgan Operating L.P. “C,”

23 FMSHRC 1288, 1296 (Dec. 2001) citing Herman v. Associated Elec. Coop., Inc., 172 F.3d 1078, 1082-83 (8th Cir. 1999) (finding no Mine Act jurisdiction based on such factors as whether coal had entered the stream of commerce; the degree to which the coal was processed by the cited entity; and whether such handling was that which is usually performed by an end-use consumer); RNS Servs., Inc. v. Sec’y of Labor, 115 F.3d 182, 185 (3d Cir. 1997) (finding Mine Act jurisdiction based, in part, on consideration that MSHA exercised jurisdiction over a company that handled coal after the cited entity), aff’g RNS Servs. Inc., 18 FMSHRC 523 (Apr. 1996).

            Although the above cited cases concern jurisdictional issues with regard to entities that handled and loaded coal, the Commission has continued to apply a traditional functional analysis to resolve whether particular milling activities are covered by the Act. Watkins Engineering & Constructors, 24 FMSHRC at 669 (July 2002). Specifically, the Commission stated:

Within the industry, milling is defined as: “The grinding or crushing of ore. The term may include the operation of removing valueless or harmful constituents … ,” while mill is defined as a “mineral treatment plant in which crushing, wet grinding, and further treatment of ore is conducted.” DMMRT at 344 (emphasis added); see also Alcoa Alumina & Chems., L.L.C., 23 FMSHRC 911, 914 (Sept. 2001) (using DMMRT to determine usage in mining industry). The ordinary meaning of “to mill” is “to crush or grind (ore) in a mill,” and the term

“a mill” is defined as “a machine for crushing or comminuting some substance.” Webster’s Third New Int’l Dictionary (Unabridged) 1434 (1993); see also Nolichuckey Sand Co., 22 FMSHRC 1057, 1060 (Sept. 2000) (“Commission … look[s] to the ordinary meaning of terms not defined by statute”). These definitions are consistent with the Secretary’s interpretation that milling includes processes such as grinding and crushing, [although] the separation of waste from valuable materials is not an essential component of milling.

Id. at 674-75. (Footnote omitted).

            The separation of materials of differing sizes is inherent in the screening process. While it is true that screening is commonly performed during milling, such screening normally sizes materials that have already been subject to the principal elements of milling, such as crushing and/or grinding. Thus, concluding that Alaska’s activities are subject to Mine Act jurisdiction simply because Alaska uses a screen to separate earthen material, when no transformation of the quality of the material occurs, begs the question. As acknowledged in the Interagency Agreement, local screening alone, for the purpose of repairing non-mine roadways, typically does not provide a basis for Mine Act jurisdiction.

            Turning to the facts of this case, Alaska’s screening activities are not performed at a centralized preparation facility for the purpose of creating a marketable consumer derivative. In this regard, there are no processing procedures such as grinding or crushing that are accomplished by utilizing sophisticated equipment or techniques. Nor is the end-product in this case, screened rocks, crushed or stockpiled at a central location, or, transported to off-site locations to be used for its intrinsic value. Rather, the screened rock residual is recovered, as bulk material, as a matter of convenience, to seasonally fill and repair a gravel haul road. Thus, applying the longstanding two-pronged Elam test, the screening activities in this matter are neither principal activities normally performed in the mineral milling process, nor activities undertaken to make the extracted rock material suitable for a particular use meeting market specifications. Consequently, there is an inadequate basis for concluding that the screening activities performed constitute “milling” as contemplated by section 3(h)(1) of the Act.

                        d. Distinguishable Case Law

            The conclusion that the subject screening activities performed by Alaska do not constitute mining is not inconsistent with the decision by Judge Miller. State of Alaska, 33 FMSHRC 1550. Judge Miller found Mine Act jurisdiction with regard to an Alaska mobile screener that was

used to spread sand and gravel on runways at the Nome, Alaska airport. Id. The Nome screener was used to size sand and gravel into three products: (1) undersized ¼ inch minus aggregate, (2) midsized ¼-½ inch aggregate, and (3) oversized ½ inch plus aggregate. Id. The gravel was used to sand airport runways to prevent airplanes from sliding on ice and snow. Id.

            The Nome Screener was used by the State of Alaska Department of Transportation (AKDOT) annually at various locations, including two AKDOT owned ocean beach borrow pits, for a three to four week period in order to stockpile enough sand for use in the winter. Id. at 1551. At these locations, front-end loaders placed unsorted sand into the screener and then loaded the processed mid-sized sand into trucks that then transported the material for use at the Nome airport. Id. On other occasions, trucks hauled beach sand from the borrow pits to a warehouse yard at the Nome airport where the screener was used to size the sand. Id. The Nome Screener was stored at the airport when not in use. Like the Sag Screener in the current case, the Nome Screener was registered as a mine in 2002, as requested by MSHA. Id.

            Although Judge Miller’s case and this case both involve Alaska screening activities, the particular circumstances are significantly different. In Judge Miller’s case, Alaska screened, sized and transported material from various locations, including two beach borrow pits. The sand, a material having commercial intrinsic value, was transported to the Nome airport where it was applied to runways, or, stored at an airport warehouse after further screening and sizing. Screening, sizing, and stockpiling at a storage facility are functions normally performed by a mine operator.

            In rejecting Alaska’s contention, that the beach-originated sand was a “borrow pit” exempt from the Mine Act, Judge Miller relied on prior case law limiting the interpretation of the “borrow pit” exemption. However, these cases are readily distinguishable from the instant case. For example, in Kerr Enterprises, Inc., 26 FMSHRC 953 (Dec. 2004) (ALJ), unlike the instant case, the entity deemed to be mining, which extracted clay, sand, and topsoil screened at an excavation site, sold the processed product to more than 50 customers, including landscape companies, construction contractors, and concrete companies. Id. at 954.

            Judge Miller also relied on New York State Department of Transportation, 2 FMSHRC 1749 (July 1980) (ALJ), to support Mine Act jurisdiction. Unlike this case, New York extracted sand from a central location known as the Underwood Pit. Id. at 1753 The sand was stockpiled at this location for winter disbursement on Essex County highways to alleviate winter snow and ice conditions. Id. The screening, central stockpiling, and ultimate transporting of sand for the treatment of a system of county roads and highways, is inapposite to the facts in this matter concerning the local use of borrow pit material that was transported one-quarter mile to maintain a gravel road. Id.

            In addition, Judge Miller relied on Fred Knobel, 15 FMSHRC 742 (Apr. 1993) (ALJ). Fred Knobel operated a portable rock crusher at various construction sites. Id. at 743. The rock crusher was used to crush rock for subcontracts with other construction companies. Id. The crushed rock was used as an underlayment for residential driveways or sold to various contractors who hauled it away for a use elsewhere. Id. at 744. As in Kerr, and in New York State DOT, the end product in Fred Knoble, was sold to end-use consumers and/or transported to various locations, because of its intrinsic market value. Id.

            It is worth noting that the leading cases concerning Mine Act jurisdiction over screening activities involve the processing and selling of sand and gravel from material that had previously been dredged from riverbeds. See Jerry Ike Harless Towing, Inc., 16 FMSHRC 683, 684 (Apr. 1994); Marshall v. Stoudt’s Ferry Preparation Co., 602 F.2d 589 (3d Cir. 1979), cert denied, 444 U.S. 1015 (1980). Such activities are readily distinguishable from the borrow pit activities in this matter. Consequently, unlike the instant case, the cases that support the exercise of Mine Act jurisdiction for screening activities have the common thread of the processing, stockpiling, transportation, and/or sale of mineral products having a market value that ultimately will be consumed by end-users.

            In view of the above, the Secretary’s asserted jurisdictional claim over Alaska’s haul road screening activities is inconsistent with the Secretary’s Interagency Agreement. Moreover, declining to find an adequate basis for the Secretary’s assertion of MSHA jurisdiction is consistent with previous cases where MSHA jurisdiction was based on satisfaction of a traditional functional analysis. The registration of the Sag Screener as a mine cannot confer jurisdiction when none exists. Thus, this decision to vacate the citations concerning front-end loaders should be narrowly construed as it is based solely on the subject screening activities that do not constitute milling as contemplated by the Mine Act.

            As a final matter, I note, parenthetically, that sovereign entities, such as Alaska, can be subject to Mine Act jurisdiction if they engage in activities that result in the production of mineral end-products of commercial value even though the end-products are intended for government use. As discussed herein, resolution of jurisdictional questions ultimately must be based on whether the subject activities are normally performed by a mine operator. While the federal reach of the Mine Act is expansive, it is not intended to infringe on reasonable assertions of jurisdiction by state authorities over activities, such as road maintenance, that are not traditionally viewed as mining. In this regard, the borrow pit activities in this matter are authorized under a federal statute in 23 U.S.C. § 317 which appropriates adjacent federal lands for the purposes of construction or maintenance of highways.

ORDER

            In view of the above, IT IS ORDERED that the State of Alaska’s Motion to Dismiss the subject citations for lack of Mine Act jurisdiction IS GRANTED. Accordingly, IT IS ORDERED that Citation Nos. 6444323 and 6444324 ARE VACATED. Consequently, the captioned civil penalty proceeding IS DISMISSED. 

                                                                        /s/ Jerold Feldman

                                                                        Jerold Feldman

                                                                        Administrative Law Judge

Distribution: (Regular and Electronic Mail)

Matthew L. Vadnal, Esq., Office of the Solicitor, U.S. Department of Labor,

1111 Third Avenue, Suite 945, Seattle, Washington 98101-3212

John D. Pereza, Conference & Litigation Representative, U.S. Department of Labor,

MSHA, 2060 Peabody Rd., Suite 610, Vacaville, CA 95687

Sean P. Lynch, Assistant Attorney General, State of Alaska - Department of Law,

Civil Division - Transportation Section, P.O. Box 110300, Juneau, AK 99811

 /jel