FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

601 NEW JERSEY AVENUE, N.W., SUITE 9500

WASHINGTON, D.C. 20001

July 16, 2012

ORDER GRANTING SECRETARY’S MOTION FOR PARTIAL

SUMMARY DECISION ON THE ISSUE OF JURISDICTION

            This case is before me upon a petition for assessment of civil penalty filed by the Secretary of Labor (“Secretary”) against RECON Refractory & Construction, Inc. (“RECON,” “the company,” or “Respondent”) on February 18, 2010, pursuant to section 105 of the Federal Mine Safety and Health Act of 1977 (“the Mine Act” or “the Act”), 30 U.S.C. § 815. RECON timely filed an answer after which this case assigned to me. The parties thereafter complied with my prehearing order. This case is now set for hearing on July 17–18, 2012, in Riverside, California. On June 22, 2012, the Secretary filed her motion for partial summary decision, given RECON’s challenge to her claims of jurisdiction. RECON filed its opposition on June 29, 2012.

I. STATEMENT OF THE CASE AND ISSUES

            The Secretary issued RECON six citations under section 104(a) of the Mine Act alleging violations of health and safety standards pursuant to regulations applicable to surface metal and nonmetal mines. See 30 C.F.R pt. 56. In its answer to the petition, RECON, a contractor performing construction work, denied that the subject facility was a mine as defined in the Act. The Secretary filed her motion for partial summary decision on the jurisdictional issue, arguing that the cement facilities under construction at the Drake Quarry site fall within the jurisdiction of the Mine Act. RECON opposes the motion, arguing that during the period when the citation was issued, the Mine Safety and Health Administration (“MSHA”) did not have jurisdiction over the site.

            Commission Rule 67 provides the standard for granting any motion for summary decision:

A motion for summary decision shall be granted only if the entire record, including 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(b). The Commission –

“has long recognized that [] ‘summary decision is an extraordinary procedure,’” and has analogized it to Rule 56 of the Federal Rules of Civil Procedure, under which “the Supreme Court has indicated that summary judgment is authorized only ‘upon proper showings of the lack of a genuine, triable issue of material fact.’”

Hanson Aggregates New York, Inc., 29 FMSHRC 4, 9 (Jan. 2007) (quoting Energy West Mining Co., 16 FMSHRC 1414, 1419 (July 1994)). In reviewing the record on summary decision, Commission Judges must evaluate the evidence in “‘the light most favorable to . . . the party opposing the motion.’” Hanson Aggregates, 29 FMSHRC at 9 (quoting Poller v. Columbia Broad. Sys., 368 U.S. 464, 473 (1962)). Any inferences “‘drawn from the underlying facts contained in [the] materials [supporting the motion] must be viewed in the light most favorable to the party opposing the motion.”’ Hanson Aggregates, 29 FMSHRC at 9 (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

            The issues before me are whether the Secretary has met the elements for summary decision by establishing that a new cement processing site still under construction falls under the Mine Act’s jurisdiction. For the reasons that follow, the Secretary’s motion is GRANTED.

II. FINDINGS OF FACT

            On April 6, 2009, MSHA assigned a mine identification number to Drake Quarry, a surface metal/nonmetal mine owned by Drake Cement Company (“Drake”) and located near Paulden, Arizona. (Statement of Material Facts in Support of Secretary of Labor’s Motion for Partial Summary Decision (“Sec’y Statement of Material Facts”) at ¶ 3; Respondent’s Opposition to Secretary of Labor’s Motion for Partial Summary Decision (“Resp’t Opp’n”) at 2; Respondent’s Response to Secretary of Labor’s Statement of Material Facts in Support if its Motion for Partial Summary Judgment (“Resp’t Resp.”) at 1.) On October 6 and 7, 2009, MSHA Inspector Enrique Vidal conducted a routine health and safety inspection of the Drake Quarry site. (Sec’y Statement of Material Facts at ¶ 1; Resp’t Opp’n at 1; Resp’t Resp. at 1.) On October 8, 2009, MSHA Inspector Kyle Griffith continued the inspection of the Drake Quarry site. (Sec’y Statement of Material Facts at ¶ 2; Resp’t Resp. at 1.)

            At the time of the inspection, what is currently the Drake Quarry mine site was still under construction and was over 60% completed. (Sec’y Statement of Material Facts at ¶ 4; Resp’t Resp. at 1; Resp’t Opp’n at 2.) The Drake Quarry mine site and adjoining facilities were brand new and had never before been in production. (Resp’t Opp’n at 1.) About 300 workers were working at the construction site. (Sec’y Statement of Material Facts at ¶ 4.) The mine was to be a large cement processing facility that produced Portland cement once it opened. (Sec’y Statement of Material Facts at ¶ 5; Resp’t Resp. at 2; Decl. of Lawrence R. Nelson, Attach. A.) The adjacent quarry itself had not yet been constructed. (Resp’t Opp’n at 2.) No miner hours had been recorded at the Drake Quarry site at the time of the October 2009 inspection. (Id.) While the Secretary alleges the projected date to begin operations was May 2010 (Sec’y Statement of Material Facts at ¶ 12), the plant did not in fact record any miner hours until the first quarter of 2011. (Resp’t Opp’n at 3.)

            RECON was hired by CCC Group as a subcontractor to build a facility on the construction site. (Sec’y Statement of Material Facts at ¶ 6; Resp’t Opp’n at 2; Resp’t Resp. at 2.) During the October 2009 inspections, the Secretary’s inspectors issued RECON seven citations, five of which are still contested. (Sec’y Statement of Material Facts at ¶¶ 7, 8; Resp’t Resp. at 2.) Throughout the settlement negotiation process, RECON has continuously denied that MSHA had jurisdiction over the mine site at the time of the inspection. (Sec’y Statement of Material Facts at ¶ 9; Resp’t Resp. at 2; see, e.g., Answer at ¶¶ 1, 2; Respondent’s Response to Secretary of Labor’s Interrogatories, Set Number One, Interrogatory No. 5, dated November 15, 2011; Response to Secretary of Labor’s Motion to Compel Discovery, dated November 16, 2011 at ¶ 5.) However, RECON acknowledges that MSHA would have jurisdiction over the mine once the facility went into operation. (Sec’y Statement of Material Facts at ¶ 10; Resp’t Resp. at 2; see, e.g., Answer at ¶ 2; Respondent’s Response to Secretary of Labor’s Interrogatories, Set Number One, Interrogatory No. 5, dated November 15, 2011.)

            I determine that the parties agree on all the relevant facts on the question of jurisdiction. Therefore, there is no genuine issue of material fact as to the question of jurisdiction.

III. GENERAL PRINCIPLES OF LAW

            The Mine Act defines a “coal or other mine” in section 3(h)(1) as:

(A) an area of land from which minerals are extracted in nonliquid form or, if in liquid form, are extracted with workers underground, (B) private ways and roads appurtenant to such area, and (C) lands, excavations, underground passageways, shafts, slopes, tunnels and workings, structures, facilities, equipment, machines, tools, or other property including impoundments, retention dams, and tailings ponds, on the surface or underground, used in, or to be used in, or resulting from, the work of extracting such minerals from their natural deposits in nonliquid form, or if in liquid form, with workers underground, or used in, or to be used in, the milling of such minerals, or the work of preparing coal or other minerals, and includes custom coal preparation facilities. In making a determination of what constitutes mineral milling for purposes of this chapter, the Secretary shall give due consideration to the convenience of administration resulting from the delegation to one Assistant Secretary of all authority with respect to the health and safety of miners employed at one physical establishment.

30 U.S.C. § 802(h)(1) (emphasis added).

            The Act defines an “operator” as “any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine.” 30 U.S.C. § 802(d).

IV. DISCUSSION AND ANALYSIS

            A.        Summary of the parties arguments.

            The Secretary contends that the Drake Quarry construction site meets the definition of a mine as defined in section 3(h)(1) of the Act. (Sec’y Motion at 1.) The Secretary argues (1) that the legislative history of the Act gives guidance to interpret jurisdiction broadly, giving preference to there being jurisdiction under the Act should there be any doubts as to jurisdiction (id. at 7); (2) that Respondent acknowledges when construction is completed Drake Quarry will be a mine under the definition of section 3(h)(1) and subject to MSHA jurisdiction (id. at 13); (3) that courts have widely held that cement facilities fall under the jurisdiction of the Mine Act and not the Occupational Safety and Health Act (“OSH Act”) in keeping with the Interagency Agreement between MSHA and the Occupational Safety and Health Administration (“OSHA) (“Interagency Agreement”), see Mine Safety and Health Administration and the Occupational Safety and Health Administration Interagency Agreement, 44 Fed. Reg. 22,827-22,830 (Apr. 17, 1979) (“Interagency Agreement”); (Sec’y Motion at 9, 11); and (4) that RECON is subject to MSHA jurisdiction as an “operator” (Sec’y Motion at 8).

            RECON claims, on the other hand, that MSHA lacked jurisdiction to conduct an inspection of the Drake Quarry facility and had no authority to issue citations to the company. RECON primarily argues that no Mine Act jurisdiction existed at the time the citations were issued because (1) the Drake Quarry cement processing facility was not yet in operation, (2) the adjoining quarry was not yet constructed, and (3) the State of Arizona should have jurisdiction as a “State Plan” state under the OSH Act.  As discussed below, Respondent’s arguments are inapposite and therefore fail.

            B.        Mine Act definitions and analysis of the relevant case law.

            Under the Mine Act, to be a “mine” that MSHA has the authority to inspect, where MSHA may identify violations, and to which MSHA may issue citations, a site must be a “structure,” “facility,” or “other property” that is “used in, or to be used in, the milling of . . . minerals.” 30 U.S.C. § 802(h)(1). To be a mine, a site must satisfy each of the location (“structure,” “facility,” or “other property”), functional (“used in . . . the milling of . . . minerals”), and temporal (“used in, or to be used in”) components.

                        1.         The Commission and courts have held that the definition of a “mine” under the Mine Act should be interpreted broadly.

            Here, the question at issue is whether a brand new cement processing site – a site that was still under construction and that had never logged any miner hours nor produced any cement at the time MSHA issued its citations – falls within MSHA’s jurisdiction. Both the courts and the Commission have interpreted the definition of “mine” broadly. “Mine” is to mean more than the ordinary sense of the word. Marshall v. Stoudt’s Ferry Preparation Co., 602 F.2d 589, 591-92 (3d Cir. 1979) (“Although it may seem incongruous to apply the label ‘mine’ to the kind of plant operated [here], the statute makes clear that the concept that was to be conveyed by the word is much more encompassing than the usual meaning attributed to it”). The goal of the Mine Act is to protect miners from the hazards of working to produce mine products and “the hazards to which miners are exposed are not limited to the hazards of underground mines, but include improperly maintained equipment and supplies that are used in mining.” Jim Walters Res., Inc., 22 FMSHRC 21, 29 (Jan. 2000). Congress leaves no doubt that the intent of the Act is to establish a “single mine safety and health law, applicable to all mining activity.” S. Rep. No. 461, 95th Cong., 1st Sess. 37 (1977) (emphasis added). Hence, the definition not only includes the area of land from which minerals are extracted, but also encompasses structures, facilities, equipment, machines, tools, or other pieces of property that are used in extraction or milling of minerals. Jerry Ike Harless Towing, Inc., 16 FMSHRC 683, 688 (Apr. 1994).

            Moreover, the Secretary, in interpreting the limits of her jurisdiction under the Mine Act and the OSH Act, promulgated the Interagency Agreement to help remove any confusion as to the respective authority of those agencies. In the Interagency Agreement, the Secretary determined that cement plants are covered by the Mine Act rather than the OSH Act. In section B.6.a. of that agreement, the Secretary specifically provided that MSHA has jurisdiction over “alumina and cement plants.” 44 Fed. Reg. at 22,827 (April 17, 1979). Appendix A of the Interagency Agreement also lists cement under the “Subgroups of Nonmetals” over which MSHA has sole jurisdiction. Id. at 22,829. See also Donovan v. Carolina Stalite Co., 734 F.2d 1547, 1552 (D.C. Cir. 1984) (finding Mine Act jurisdiction to include any “ ‘structures’ and “facilities’ used in ‘milling’ or ‘the work of preparing . . . minerals.’ ”); Magma Copper Co. v. Sec’y of Labor, 645 F.2d 694 (9th Cir. 1981) (holding that a milling facility itself is a “mine” under the Mine Act); Watkins Eng’rs & Constructors, 24 FMSHRC 669 (July 2002) (holding that cement plants are “milling” operations and fall within the Mine Act’s definition of “mine”). In fact, RECON concedes Mine Act jurisdiction over the Drake Quarry site, including its cement preparation plant, at the very least once it became operational. (Answer at ¶ 2; Respondent’s Response to Secretary of Labor’s Interrogatories, Set Number One, interrogatory No. 5, dated November 15, 2011.)

            RECON makes two temporal arguments to counter the claims of Mine Act jurisdiction. First, RECON focuses on the fact that the Drake Quarry cement processing facility was not yet operational when RECON performed construction work at the Drake Quarry site, pointing to the lack of miner hours reported on quarterly reports. (Resp’t Opp’n at 4, 5.) Second, RECON argues that MSHA jurisdiction must be predicated on a quarry (id. at 5) but that the site for the quarry to be built had not yet been constructed (id. at 2). RECON would thus have me limit MSHA’s jurisdiction until a point in time when the cement facility’s production begins and the adjacent quarry is active. Unable to cite case law to support its position, RECON first attempts to distinguish the cases cited by the Secretary on their facts, noting they involve mines already in existence. (Id. at 4, 5.) RECON attempts to distinguish between repairs and expansions, and new construction. (Id.) RECON then plays the “Doubting Thomas” because no case cited by the Secretary conforms to the exact facts of this case, i.e., a mine being newly constructed that has never before produced or logged mining hours. (Id.) However, I determine that the facts of those cases cited by the Secretary, while different, do not make the cases distinguishable in principle, and the reasoning behind those cases support the result I reach here.

            The Mine Act’s language that any “workings, structures, facilities, equipment, machines, tools, or other property . . . used in, or to be used in, the milling of such minerals” indicates that a “mine” includes not just facilities presently being used to mill minerals, but also facilities where mineral milling will be taking place in the future. 30 U.S.C. § 802(h)(1). Considering Congress’s intent that the Act be interpreted broadly in favor of MSHA jurisdiction, courts have held that the “used in, or to be used in” language in the Act would include facilities that are not yet producing mine products but are preparing to begin production. Thus, in Cyprus Indus. Minerals Co. v. FMSHRC, the Ninth Circuit, in which this case arises, held that activities conducted at a site in preparation for future mining may bring the site within the Mine Act’s definition of “mine” because the company was engaging in these activities in contemplation of mining, even though the activities did not occur on a producing mine site. 664 F.2d 1116, 1117-18 (9th Cir. 1981). Similarly, the Third Circuit in Lancashire Coal Co. v. Secretary of Labor, recognized that the Act refers to three time frames in section 3(h)(1): “(1) the term ‘used in’ meaning current use, i.e. ‘being used in’; (2) the term ‘to be used in’ meaning contemplated use; and (3) the term ‘resulting from’ meaning former use.” 968 F.2d 388, 390 (3d Cir. 1992). Consequently, facilities falling under MSHA jurisdiction would include those that a company contemplates using for mining activities.

            The Commission’s ALJs have relied on this “contemplated mining activity” articulated in the Mine Act and noted by the courts. As ALJ Amchan commented, “it logically follows from the general scheme of Federal regulation of occupational safety and health, that the installation and adjustment of equipment at a mine site is subject to the Act prior to the commencement of production.” The Pit, 16 FMSHRC 2008, 2010 (Sept. 1994) (ALJ). Likewise, ALJ Moran stated “it is undeniable that the hazards associated with [mining] activities are present whether they occur during the mine’s set-up for operations to commence or during the actual process of mineral removal for its sale.” Khani Co., Inc., 32 FMSHRC 1339, 1342 (Sept. 2010) (ALJ). Therefore, so long as the activities are in preparation of future mining activities, those activities fall within MSHA jurisdiction. See, e.g., Khani Co., 32 FMSHRC at 1342-43 (ALJ) (holding that because the mine was in the process of making repairs to resume production, even though the facility was not producing at the time of the inspection, the MSHA inspector had jurisdiction over the mine site); Royal Cement, 31 FMSHRC at 1462 (ALJ) (holding that although the plant at which the miners were making repairs had been closed for three years, because the miners were making repairs on it in preparation for it to begin production again, the plant fell under MSHA jurisdiction); The Pit, 16 FMSHRC at 2009-10 (ALJ) (holding that “equipment that is located at a site where mining will take place, and will be used in the extraction of minerals, or the milling of minerals, is subject to MSHA jurisdiction – even if mining has not commenced.”).

            At the Drake Quarry site, Drake Cement Company had hired a number of construction companies to build the structures and facilities necessary for its new cement processing operation. Cement processing is a mining activity as defined by the Mine Act, and thus any facility that is used or will be used for cement processing is subject to MSHA jurisdiction. That the Drake Quarry site had never before been in operation or that the actual construction of the quarry had not occurred is inapposite. See Donovan v. Carolina Stalite Co., 734 F.2d at 1552 (holding section 3(h) “does not require that those structures or facilities be owned by a firm that also engages in the extraction of minerals from the ground or that they be located on property where such extraction occurs.”) What is important is that Drake Cement Company intended the Drake Quarry site to be used in mining activities and that the construction of the facilities was being done in contemplation of those mining activities. Because RECON was hired by CCC Group as a subcontractor to build a facility on the Drake Quarry site (Sec’y Statement of Material Facts at ¶ 6; Resp’t Opp’n at 2; Resp’t Resp. at 2), RECON was using “equipment” and “tools” to construct a “facility” being constructed in contemplation of “milling” at the Drake Cement Company operation at Drake Quarry, placing it within the Mine Act’s definition of a “mine.” 30 U.S.C. § 802(h)(1).

                        2.         Jurisdictional doubts should be resolved in favor of Mine Act coverage.

            When resolving jurisdictional questions, the benefit of the doubt goes to the Secretary. As the Commission stated in Watkins Engineers & Constructors, “Congress clearly intended that jurisdictional doubts be resolved in favor of coverage by the Mine Act.” Watkins Eng’rs, 24 FMSHRC at 675–676 (citing S. Rep. No. 95-181, 95th Cong., 1st Sess., at 14 (1977), reprinted in 1977 U.S.C.C.A.N. 3401, 3414, and in Legislative History of the Federal Mine Safety and Health Act of 1977 at 602 (1978)).  Indeed, MSHA issued the Drake Quarry a mine identification number in April 2009, six months before the citations in this case were issued during October 2009. As ALJ Miller stated, the Secretary “is the one whose duty it is to administer the [Act], and when, in the course of her administration, she makes informed and reasoned jurisdictional determinations, judicial decision makers have been wary of overruling her.” Beylund Constr., 31 FMSHRC 1410, 1415 (Nov. 2010) (ALJ) (citing Watkins Eng’rs, 24 FMSHRC at 672–673, 676). Based on the case law discussed above and the Secretary’s issuance of a mine identification number to Drake Quarry six months prior to issuing the citations in this case, I determine that the Secretary made a reasoned jurisdictional determination that supports Mine Act coverage of the Drake Quarry.

                        3.         Respondent’s arguments regarding the MSHA/OSHA Interagency Agreement are immaterial.

            Finally, Respondent contends that because Arizona is a State Plan state under the OSH Act’s enforcement scheme, Arizona retains jurisdiction over the cement manufacturing facility at Drake Quarry that was the venue of the citations being contested. (Resp’t Opp’n at 7.) Respondent believes this is relevant given the weight the courts have put on the MSHA/OSHA Interagency Agreement and its designation of cement facilities as falling under MSHA’s jurisdiction. Respondent argues that the MSHA/OSHA Interagency Agreement is not applicable in Arizona because Federal OSHA does not have the authority to make agreements that will control Arizona’s State OSHA.

            Respondent’s argument that the MSHA/OSHA Interagency Agreement is not binding in Arizona, and therefore Arizona retains jurisdiction over cement facilities, is flawed. Under the State Plan program, Federal OSHA transfers jurisdiction to State OSHA once State OSHA receives final approval under section 18(e) of the OSH Act. 29 C.F.R. § 1952.355. However, MSHA jurisdiction over a mine will preempt the coverage of an OSHA-approved state plan. Troy Gold Indus., Ltd. v. Occupational Safety & Health Appeals Bd., 187 Cal. App. 3d 379, 231 Cal Rpt. 861 (1986). Likewise, where overlapping jurisdiction exists, MSHA’s ceding authority over a mine facility to OSHA (and thereby to state plan enforcement) has been held to be a lawful discretionary function. United States v. Agronics, Inc., 164 F.3d 1343 (10th Cir. 1999). Given that the MSHA/OSHA Interagency Agreement recognizes that MSHA has sole jurisdiction over cement facilities, it follows that the Interagency Agreement controls in jurisdictional questions between Arizona’s State OSHA and MSHA. Accordingly, Arizona’s State OSHA must cede jurisdiction to MSHA under the Interagency Agreement whenever MSHA asserts jurisdiction over cement facilities as it has in this case.

V. CONCLUSIONS OF LAW

            Because I find that there is no genuine issue of material fact, I have examined the applicable law and conclude that the Drake Quarry site was a “mine” under the Mine Act and subject to MSHA jurisdiction, and thus the MSHA inspectors had the authority to issue RECON the citations at issue in this case. AccordinglyI conclude the Secretary is entitled to summary decision on the issue of jurisdiction as a matter of law.

 VI. ORDER

            In light of the foregoing, IT IS ORDERED that the Secretary’s motion for partial summary decision on the issue of jurisdiction is GRANTED. This case is still scheduled on July 17–18, 2012, for a hearing on the merits of the citations issued.

                                                                                                                                                        /s/ Alan G. Paez

                                                                                                                                                        Alan G. Paez

                                                                                                                                                        Administrative Law Judge

Distribution: (Via Electronic Mail & U.S. Mail)                                                                     

Douglas L. Sanders, Esq., Office of the Solicitor, U.S. Department of Labor, MSHA, 1999 Broadway, Suite 800, Denver, CO 80202-5708 (sanders.douglas.l@dol.gov)

Gene F. McMenamin, Esq., Atkinson, Andelson, Loya, Ruud & Romo, 12800 Center Court Dr., Suite 300, Cerritos, CA 90703-9364 (EMcMenamin@aalrr.com)

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