FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

721 19th STREET, SUITE 443

DENVER, CO 80202-2500

303-844-5267/FAX 303-844-5268

April 1, 2013

SECRETARY OF LABOR,
MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA),
Petitioner,

v.

WADE SAND & GRAVEL CO., INC.,
Respondent.

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CIVIL PENALTY PROCEEDING

Docket No. SE 2013-120-M
A.C. No. 01-00052-306167

Mine: Wade Sand & Gravel Co., Inc.

ORDER DENYING RESPONDENT’S MOTION FOR SUMMARY DECISION & ORDER GRANTING THE SECRETARY’S

CROSS MOTION FOR SUMMARY DECISION

This case before me on a petition for assessment of a civil penalty under section 105(d) of the Federal Mine Safety and Health Act of 1977. On February 1, 2013 Respondent filed a Motion for Summary Decision (the “Motion”) and Brief in Support of the motion (“Respondent’s Brief”). On February 11, 2013 the Secretary filed a Motion for Extension of Time to File Opposition to Respondent’s Motion, which was granted by the undersigned. On March 1, 2013 the Secretary filed a Cross Motion for Summary Decision and Opposition to Respondent’s Motion for Summary Decision (the “Cross Motion”) with accompanying brief. (“Secretary’s Brief”). Finally, on March 11, 2013, Respondent filed an Opposition to the Secretary’s Opposition to Respondent’s Motion. (“Respondent’s Opposition”).

This case involves one 104(a) citation issued to Wade Sand & Gravel Co. (“Wade” or “Respondent”) for an alleged violation of Section 56.14107(a) of the Secretary’s regulations.[1] The Secretary has proposed a civil penalty in the amount of $1,026.00. The parties have represented that Respondent does not contest the underlying violation or the citation as written, that no facts are in dispute, and that the only issue remaining in contest is the “operator's history of previous violations” criterion, which, pursuant to Section 110(i) of the Act, must be considered in assessing a civil penalty in this matter.

I. DISCUSSION

Commission Procedural Rule 67 sets forth the following grounds for granting summary decision:

A motion for summary decision shall be granted only if the entire record, including the pleadings, depositions, answers to interrogatories, admissions, and affidavits, shows:

(1) That there is no genuine issue as to any material fact; and

(2) That the moving party is entitled to summary decision as a matter of law.

29 C.F.R. § 2700.67. The parties have agreed that there are no genuine issues as to any material fact and that the issue at hand can properly be decided based on the record before me. For the reasons that follow, Respondent’s motion is DENIED, while the Secretary’s cross motion is GRANTED.

The Mine Act delegates the duty of proposing penalties to the Secretary. 30 U.S.C. §§ 815(a), 820(i). In order to carry out that duty, the Secretary promulgated Part 100, 30 C.F.R 100, which set up a point system and formula for proposing penalties for alleged violations of the Mine Act. The point system attempts to quantify the six civil penalty criteria set forth in Section 110(i) of the Act[2]. After a point total is arrived at, a civil penalty corresponding to that point total is proposed. At issue in this matter is the Secretary’s calculation of points for the “history of previous violations” criterion. Specifically, the parties dispute whether the Secretary, in calculating the points for the history of violations for purposes of proposing a civil penalty, may rely upon not only those violations that occurred and have been paid or finally adjudicated in the 15 months prior to the subject alleged violation, but also those violations that occurred outside of the 15 month window but became final orders during the 15 month window.

Respondent argues that the Secretary incorrectly calculated the penalty in this matter. Specifically, Respondent asserts that the Secretary, in proposing his penalty, incorrectly considered certain violations in calculating VPID and RPID points. Resp. Br. 2-3. Respondent argues that the Section 100.3(c) clearly and unambiguously requires that two criteria must be established before VPID points can be imposed: (1) “there must be at least ten prior violations which occur within fifteen months of the violation at issue” and (2) “at least ten of those prior violations must have been paid or adjudicated within this same fifteen-month period.” Resp. Br. 3-4. Despite the clear meaning of the plain language, MSHA’s application contradicts such. Resp. Br. 6. Wade asserts that “violation,” as used in Section 100.3(c), is distinct from “final order” and that “[i]f MSHA meant for the regulation to count final orders in the preceding fifteen-month period, instead of the occurrence of violations, it should have stated so.” Resp. Br. 6. Therefore, Respondent has requested that summary decision be entered in its favor and “modify the proposed penalty assessment” accordingly, which “will reduce the VPID points to 0 and the RPID points to 0[,]” thereby lowering the penalty amount assessed to reflect the lower number of penalty points.” Resp. Br. 12.

The Secretary asserts that MSHA properly calculated the proposed penalty and that the penalty, as proposed, “is an appropriate penalty for the judge to assess in light of WSG’s history of violations.” Sec’y Br. 1. The Secretary argues that Section 100.3(c) is ambiguous in that it “does not specify the operative date that the agency will use when looking back over the preceding 15 months: the date the MSHA inspector observed and cited the operator’s condition or practice as an alleged violation under the Act, or the date that MSHA’s penalty assessment became a final order of the Commission.” Sec’y Br. 7. Given this ambiguity, the Secretary asserts that the Commission must defer to his reasonable interpretation that “violation,” as used in Section, 100.3(c), means not only those violations that have occurred and been accepted by the operator in the prior 15 month period, but also those violations “that have been converted from alleged violations to violations legally validated by a final order within the preceding 15 months, whether through the operator’s decision not to contest, . . . a Commission-approved settlement agreement, . . . or the Commission’s substantive adjudication.” Sec’y Br. 7-8. The Secretary asserts that MSHA has relied upon this interpretation since the 2007 version of Section 100.3 went into effect, and that the preamble to the final rule, as well as the Program Policy Manual, bolster this interpretation. Sec'y Br. 8. The Secretary argues that such an interpretation is logical in that “it ensures that all violations validated by final Commission orders will count at some point in time toward an operator’s history of violations. Sec’y Br. 9.

The Secretary argues that summary decision should enter in his favor “because MSHA’s treatment of the history or violations criterion reflects the Secretary’s statutory and regulatory interpretations, policy choices, and enforcement expertise – functions that Congress delegated to the Secretary under the Mine Act’s split enforcement model.” Sec’y Br. 2. Further, he asserts that “even if the Judge makes an independent, de novo finding with respect to the effect of the operator’s violation history on the assessed penalty, the statutory and regulatory text, the legislative history, and persuasive policy arguments counsel in favor of considering the contested violations and assessing the civil penalty as proposed. Sec’y Br. 2.

The Commission has recognized the right of mine operators to petition for review of the Secretary’s application of Part 100 as it relates to the calculation of civil penalties proposed pursuant the regulation. Drummond Company, Inc., 14 FMSHRC 661 (May 1992). Here, Respondent alleges that the Secretary has departed from the plain and unambiguous meaning of Section 100.3(c), and, in doing so, has proposed an incorrect civil penalty. The Secretary disputes this allegation.

With regard to interpreting the language of a regulation, the Commission has stated the following:

[T]he “language of a regulation … is the starting point for its interpretation.” Dyer v. United States, 832 F.2d 1062, 1066 (9th Cir. 1987) (citing Consumer Prod. Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980)). Where the language of a regulatory provision is clear, the terms of that provision must be enforced as they are written unless the regulator clearly intended the words to have a different meaning or unless such a meaning would lead to absurd results. See id.; Utah Power & Light Co., 11 FMSHRC 1926, 1930 (Oct. 1989); Consolidation Coal Co., 15 FMSHRC 1555, 1557 (Aug. 1993). It is only when the meaning is ambiguous that deference to the Secretary's interpretation is accorded. See Udall v. Tallman, 380 U.S. 1, 16-17 (1965) (finding that reviewing body must “look to the administrative construction of the regulation if the meaning of the words used is in doubt”) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413-14 (1945)); Exportal Ltda. v. United States, 902 F.2d 45, 50 (D.C. Cir. 1990) (“Deference … is not in order if the rule's meaning is clear on its face.” (quoting Pfizer, Inc. v. Heckler, 735 F.2d 1502, 1509 (D.C. Cir. 1984)).

Dynamic Energy, Inc., 32 FMSHRC 1168, 1172 (Sept. 2010). The Commission has held that a regulation may be ambiguous when it is able to be understood by well-informed persons in two or more ways. Island Creek Coal Co., 20 FMRSHC 14, 19 (Jan. 1998).

Section 100.3(c) states, in pertinent part, as follows:

(c) History of previous violations. An operator's history of previous violations is based on both the total number of violations and the number of repeat violations of the same citable provision of a standard in a preceding 15-month period. Only assessed violations that have been paid or finally adjudicated, or have become final orders of the Commission will be included in determining an operator's history. The repeat aspect of the history criterion in paragraph (c)(2) applies only after an operator has received 10 violations or an independent contractor operator has received 6 violations. . . .

30 C.F.R. § 100.3(c) (Tables omitted). I find that the language of the cited section is ambiguous. The 2007 rule added the following pertinent language to the second sentence of Section 100.3(c): “or have become final orders of the Commission[.]” In doing so, and as appropriately noted by the Secretary, “Section 100.3[c]’s first two sentences permit[ted] two interpretations: (1) that assessed violations that have become final orders of the Commission will be included in determining an operator’s history as of the date they become final; or (2) that such violations are only counted if they occurred, were cited as violations, and became final in the preceding 15-month period.” Sec’y Br. 6. The Secretary correctly notes that these conflicting interpretations are due to the fact that the regulation does not spell out what date MSHA should use when evaluating a mine’s 15 month history. Given this lack of information, and resulting ambiguity, I must look to see whether the Secretary’s proposed interpretation of the standard is “reasonable.”

The Commission has held that “the Secretary's interpretation of a regulation is reasonable where it is ‘logically consistent with the language of the regulation and … serves a permissible regulatory function.”’ Alcoa Alumina & Chemicals, 23 FMSHRC 911, 913-914 (Sep. 2001) (quoting Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1327 (D.C. Cir. 1995) (citations omitted)). The Secretary asserts that “violation,” as used in Section, 100.3(c), means not only those violations that have occurred and been accepted by the operator in the prior 15 month period, but also those violations “that have been converted from alleged violations to violations legally validated by a final order within the preceding 15 months, whether through the operator’s decision not contest, . . . a Commission-approved settlement agreement, . . . or the Commission’s substantive adjudication.” Sec’y Br. 7-8. I have already found that this proposed interpretation could reasonably be gleaned from the language of Section 100.3(c). While Respondent asserts that this interpretation ignores regulatory history of this particular provision, the Secretary asserts that since the promulgation of the 2007 rule, MSHA has consistently relied upon the interpretation put forth by the Secretary. The language of the preamble to the final rule is especially telling. The preamble states as follows:

Several commenters expressed concern with the Agency's proposal to use violations that have become final orders of the Commission, stating that this will encourage operators to increase penalty contests to avoid counting the violation in an operator's history. MSHA included the insertion of the phrase “final orders of the Commission” to clarify the Agency's practice, in existence since 1982, to use only violations that have become final orders of the Commission in determining an operator's history of violations. This practice will continue to provide a measure of fairness by not including in an operator's history those violations that are in the adjudicatory process which may ultimately be dismissed or vacated. As each penalty contest becomes final, however, the violation will be included in an operator's history as of the date it becomes final.

Criteria and Procedures for Proposed Assessment of Civil Penalties, 72 Fed Reg. 13,592, 13,604 (March 22, 2007). While Section 100.3(c) makes clear that citations and orders that are presently in contest are not counted in the Secretary’s determination of an operator’s “history of previous violations,” the preamble to the 2007 rule bolsters the reasonableness of the Secretary’s interpretation. I find that the preamble clearly expresses MSHA intent to use the date a contested penalty “becomes final” when determining an operator’s history of previous violation. To find otherwise and accept Wade’s interpretation of Section 100.3(c) would lead to an absurd result which would encourage mine operators to contest all citations and draw out the litigation in the hope that no final order of the Commission would be issued before the passage of 15 months. If such were allowed to occur the operator would be able to avoid all accountability for any history of violations it has developed. Certainly that cannot be the intention of either the Mine Act or the Secretary’s regulations. I find that the Secretary’s interpretation of the standard is logically consistent with the language of the regulation and serves a permissible regulatory function. Given that that the Secretary’s interpretation has been sustained, and the record reflects that the proposed penalty was properly calculated, Respondent’s motion is DENIED. The Secretary’s motion as it relates to being granted deference to her interpretation of the standard is GRANTED. However, the Commission, not the Secretary is the final authority on the amount of penalty to be assessed.

When an operator notifies the Secretary that it intends to challenge a penalty, the Secretary petitions the Commission to assess the penalty. 29 C.F.R. § 2700.28. Once the Secretary petitions the Commission, and the Commission exerts jurisdiction over the matter, it becomes the Commission’s task to assess the penalty based on the six statutory penalty criteria set forth in Section 110(i) of the Act:

[1] the operator's history of previous violations, [2] the appropriateness of such penalty to the size of the business of the operator charged, [3] whether the operator was negligent, [4] the effect on the operator's ability to continue in business, [5] the gravity of the violation, and [6] the demonstrated good faith of the person charged in attempting to achieve rapid compliance after notification of a violation.

30 U.S.C. § 820(i). In assessing a penalty for a violation of the Mine Act, the Commission and its judges do so de novo, and are not bound by the Secretary’s proposed penalty or point system. Walker Stone Co. Inc., 12 FMSHRC 256, 260 (Feb. 1990).

In Jim Walter Resources, 28 FMSHRC 983, 994-995 (Dec. 2006) the Commission stated the following:

The Commission's judges are accorded broad discretion in assessing civil penalties under the Mine Act. Westmoreland Coal Co., 8 FMSHRC 491, 492 (Apr. 1986). Such discretion is not unbounded, however, and must reflect proper consideration of the penalty criteria set forth in section 110(i) and the deterrent purpose of the Act. . . . Id. (citing Sellersburg Stone Co., 5 FMSHRC 287, 290-94 (Mar. 1983), aff'd, 736 F.2d 1147 (7th Cir. 1984)). The judge must make “[f]indings of fact on each of the statutory criteria [that] not only provide the operator with the required notice as to the basis upon which it is being assessed a particular penalty, but also provide the Commission and the courts … with the necessary foundation upon which to base a determination as to whether the penalties assessed by the judge are appropriate, excessive, or insufficient.” Sellersburg, 5 FMSHRC at 292-93. Assessments “lacking record support, infected by plain error, or otherwise constituting an abuse of discretion are not immune from reversal.” U.S. Steel Corp., 6 FMSHRC 1423, 1432 (June 1984)

. . . .

The Commission has previously held that the reference in section 110(i) to an “operator's history of previous violations” refers to the operator's general history of previous violations, not just to violations of a kind similar to the one giving rise to the penalty assessment. See Jim Walter Res., Inc., 18 FMSHRC 552, 556-57 (Apr. 1996).

In Spartan Mining Company, 30 FMSHRC 699, 723 (Aug. 2008) (citations omitted), the Commission, stated that:

“‘when . . . it is determined that penalties are appropriate which substantially diverge from those originally proposed, it behooves the Commission and its judges to provide a sufficient explanation of the bases underlying the penalties assessed by the Commission.’ In Cantera Green, the Commission clarified that ‘[w]hile the findings and explanations relating to a penalty assessment do not have to be exhaustive, they must at least provide the Commission with a basis for determining whether the judge complied with the requirement to consider and make findings concerning the section 110(i) penalty criteria.’”

I have reviewed the history of violations for this mine. In my review of the history, which has included an evaluation of the materials before me, as well as information regarding this mine available on MSHA’s Mine Data Retrieval website, it is clear that this operator has reduced its number of violations over the past few years. However, I note that the “history of previous violations” is one of only six factors that must be considered. Moreover, any apportionment of points in the Secretary’s system to one factor over another is not binding, nor is it part of my analysis in this matter. Here, the parties have represented that no material facts are in dispute and Wade has stipulated to the appropriateness of the penalty to the size of the business, the level of gravity and negligence determined by the inspector, that the penalty will not have effect on the Wade’s ability to continue in business, and that Wade demonstrated good faith in attempting to achieve rapid compliance after notification of the violation. The Secretary proposed a penalty of $1,026.00 for Citation No. 8549940. I GRANT the Secretary’s motion as it relates to his request that the penalty be assessed as originally proposed.

Finally, I take notice of Respondent’s contention that there is an element of the penalty proposal process over which the Respondent has no control, i.e., the timing of when final orders of the Commission are entered. However, any prejudice the Respondent experiences as to the uncertainty of when an order will be finalized is certainly outweighed by the fact that the violation was never considered for purposes of history while it was in contest. To accept the Respondent’s arguments in this matter would ignore that the “history of previous violations” criterion is designed to account for all violations. While the Secretary’s regulations may not adequately account for long ago issued citations and orders that become final within the 15 month window, Commission judges, who are not bound by the same restrictions can certainly do so.

II. ORDER

Given that no issues remain to be decided, I AFFIRM Citation No. 8549940 as written. Wade Sand & Gravel is hereby ORDERED to pay the Secretary of Labor the sum of $1,026.00 within 30 days of the date of this decision.

/s/ Margaret A. Miller

Margaret A. Miller

Administrative Law Judge

Distribution:

Sara Johnson and Stephen Turow, U.S. Department of Labor, Office of the Solicitor, 1100 Wilson Blvd., 22^nd Floor, Arlington, Virginia 22209-2296

Todd Higey, Richardson Clement PC, 200 Cahaba Park Circle, Suite 125, Birmingham, AL 35242.

[1] The regulation cited requires that “[m]oving machine parts shall be guarded to protect persons from contacting gears, sprockets, chains, drive, head, tail, and take-up pulleys, flywheels, couplings, shafts, fan blades, and similar moving parts that can cause injury.” 30 C.F.R. § 56.14107(a). The citation described the alleged violative condition as follows:

The side guard panel on the diesel-powered A/C welder, mounted on the Ford Diesel maintenance truck, was missing, exposing the engine cooling fan and other moving parts. The Truck is owned by Wade Sand and Gravel, and operated by contractor, EWE. Standard 56.14107a was cited 1 time in two years at mine 0100052 (1 to the operator, 0 to a contractor).

The inspector determined that an injury was unlikely to be sustained, but that if one were sustained it could reasonably be expected to be of a permanently disabling nature. He further determined that the alleged violation was not significant and substantial, that one employee was affected, and that the negligence was moderate.

[2] The six civil penalty criteria set forth in Section 110(i) of the Act are as follows:

30 U.S.C. § 820(i).