FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 Pennsylvania Avenue, N. W., Suite 520N

Washington, D.C. 20004-1710

Telephone No.: (202) 434-9950

Fax No.: (202) 434-9949

November 15, 2012

DECISION AND ORDER

ON JOINT MOTION FOR PARTIAL SUMMARY DECISION

Procedural History/Chronology of Events

            In 2008, Standard Gravel Company (SGC) purchased from Green Land Limited Partnership, a heavy equipment and fabrication shop (Green Land) that had been in business for over 50 years.

            Having reviewed MSHA inspector’s notes from inspections conducted at SGC mines, Ms. Maria Rich, MSHA’s Denham Springs Field Office Supervisor, became aware of the Green Land facility owned by SGC. In late November 2009, she ordered MSHA inspector Gary Swan to go to the facility to determine if this off-site facility was a “mine” subject to MSHA jurisdiction. On December 1, 2009, Swan went to Green Land where he observed the work being performed; he spoke to employees and had a conversation with Green Land’s Vice President, Spencer Green. He determined from the information he gathered that the activities at Green Land were directly related to SGC’s mining operations. He then contacted Ms. Rich and provided her with his findings. Thereupon, Ms. Rich determined that the property was a mine and was subject to MSHA health and safety inspections and so informed Swan who proceeded to inspect the facility and issued 17 citations. He also reviewed Green Land’s records and found that SGC had submitted an MSHA Part 46 Training Plan evidencing that the shop employees working at Green Land had received MSHA new miner and annual refresher training.

            During the inspection, Green called Rich objecting to MSHA exercising jurisdiction over the facility. He was informed at that time by Rich that the inspection served as notice of MSHA’s jurisdiction over the facility as a mine.

            On December 3, 2009, Green filed a Mine Legal Identity Report “under protest” for the Green Land facility. SGC also contested the 17 citations issued by Swan in December 2009. Thereafter, the facility was inspected by MSHA in June 2010, March 2011, June 2011 and November 2011. SGC raised the jurisdiction issue in response to the citations issued during each of the three inspections. On January 10, 2012, the Secretary agreed to vacate the citations issued in December 2009, but sent a letter to counsel for SGC accompanying the Notice to Vacate Citations stating that she maintained her position that Green Land fell under MSHA jurisdiction. 

            The parties agreed to submit the issue of jurisdiction to the court by and through motions for summary decision.

Summary Decision Standards

            Commission Rule 67 sets forth the guidelines for granting summary decision: 

(b) 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(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 judgment, the court 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 motions.’” Hanson Aggregates, 29 FMSHRC at 9 (quoting Unites States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

            The issues presented in this penalty proceeding are whether the Mine Safety and Health Administration (MSHA) has regulatory jurisdiction over the Standard Gravel Company’s SGC Green Land facility and whether Standard Gravel Company was provided fair notice of MSHA jurisdiction to assess penalties against it. The parties have not provided any conflicting material facts which would prevent issuance of summary decision on these issues. Summary decision is appropriate in this case on the issues of jurisdiction and fair notice.

Uncontested Facts and Issues Raised

            SGC owns and operates three sand and gravel mines in the state of Louisiana. In August 2008, SGC purchased a maintenance and fabrication shop (“Green Land” or “the facility”) located in Franklinton, Louisiana situated two miles from the nearest SGC mine and forty miles from the farthest one. The work performed at Green Land includes structural repair (welding), equipment maintenance and servicing and major engine repair on mobile equipment. It also builds and repairs conveyors, pumps, dredges and the like and fabricates specialized equipment. The primary purpose of the shop is to service the mining equipment used at the SGC mines. In fact, SGC states that ninety-eight percent of the work done at Green Land is for their mines. The other two percent of the work done at the facility is for other customers.

            The thirteen citations at issue here were written by inspectors from MSHA during regular inspections done at Green Land between June 2010 and November 2011, pursuant to Section 104(a) of the Federal Mine Safety and Health Act (“the Act”), 30 U.S.C. §841(a), alleging violations of various mandatory standards.

            SGC contests MSHA’s jurisdiction over the Green Land facility asserting that it is not a “coal or other mine” as defined by the Act and is therefore not under the jurisdiction of MSHA. Additionally, SGC alleges it was deprived of fair notice that MSHA considered Green Land to be a mine for the purposes of assessing fines.

Analysis and Legal Conclusions

1. SGC Green Land is a “mine” subject to MSHA jurisdiction

            The Secretary bases her position that Green Land is a “mine” subject to MSHA regulatory jurisdiction upon the plain language of the Mine Act, Commission law and the 1979 Interagency Agreement between MSHA and the Occupational Safety and Health Administration (OSHA).

            SGC, in the alternative, asserts that neither the language of the Act nor case law interpreting the Act’s definition of a “mine” apply to Green Land. The distinguishing factor here is that Green Land is an off-site commercial business open to servicing customers other than their own mining operations. It likens the stretching of the definition of a “mine” (to include structures and facilities “used in the preparation of coal” or “used in, or to be used in, or resulting from” extracting minerals) to include the Green Land facility, to including a sandwich shop that serves lunch to miners as a “mine.” SGC further disagrees that the 1979 Interagency Agreement applies to commercial maintenance, repair and service shops, rather than to mining and milling operations.

            Both parties have cited their authorities including the Act, the Interagency Agreement and numerous cases, stating their arguments for and against their application to the facts here in support of their positions as set forth above. I find it is not necessary to recite or discuss each of the cases cited herein. Only those relevant to my decision will be addressed.

            The definition of a “mine” under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §801, et seq. (“Mine Act” or “Act”) Section 3(h)(1) is, in relevant part, as “[A[n area of land from which mineral are extracted …and, (C) lands, excavations,..structures, facilities, equipment, machines, tools, or other property …used in, or to be used in, or resulting from, the work of extracting such minerals from their natural deposits…or used in, or to be used in, the milling of such minerals, or the work of preparing coal or other minerals…”

            The statutory definition of a mine is “sweeping” and “expansive.” Marshall v. Stoudt’s Ferry Preparation Co., 602 F.2d. 589, 591-92 (3^rd Cir. 1979.) The term was intended to be given the “broadest possible interpretation” with conflicts to be resolved in favor of the inclusion of the facility within the coverage of the Act. Id. at 592.

            SGC takes that position that regardless of the expansiveness of the definition, because the Green Land facility was not on SGC mining property and offered services not related to the mining industry, it cannot be included within even the broadest of sense of the term. It argues that never has such a facility been found to be under MSHA jurisdiction. It further asserts that if it is successful in garnering a larger percentage of non-mining related business, than it would be clear that the operation is not a mine. They assert that the “Secretary has suggested no limitation or ‘limiting principle’” in MSHA’s exercise of jurisdiction over off-site facilities. I find this argument to be without merit. Turning their argument around, if the facility was located on SGC’s mine property, there would be no doubt it was subject to MSHA jurisdiction. The repair and servicing of mining equipment and fabrication of parts are functions normally performed in daily mining operations at any facility.

            SGC’s assertion that the percentage of mining-related work performed by Green Land is irrelevant speaks directly to the functional analysis or preparation-versus-manufacturing test first applied by the Commission in Sec’y of Labor (MSHA) v. Oliver M. Elam, Jr., 4 FMSHRC 5, 7 (1982). The relevant question is exactly what the activities of the facility are. While Elam involved a discussion of the term milling as opposed to manufacturing, it underscored the fact that the nature of the activity is the primary focus.

            In the latter case of Jim Walters Resources, (JWR) 22 FMSHRC 21 (Jan. 2000) the Commission addressed the situation nearly identical to the instant one where MSHA asserted jurisdiction over a general machine shop and a central supply shop located off premises of the mine. The ALJ found the machine shop which repaired and serviced electrical and mechanical equipment used in the JWR mines was an integral part of the mining facility properly fell under MSHA’s jurisdiction. In finding that the supply shop which housed safety glasses, hard hats, nails, conveyor belts etc., was not a mine, the Commission disagreed. The Commission first confirmed that the definition of a mine is given broad and sweeping interpretation. A mine is not limited to an area of land from which materials are extracted but also includes equipment, facilities and other property used in the extraction of minerals. Harless Inc., 16 FMSHRC 683, 687 (Apr. 1994). It recognized that a storage garage shared by a mine and an asphalt company could be a mine where the equipment housed there “was used or was to be used in mining and that the cited conditions could affect miners in the garage.” W.J. Bakus Industries, Inc., 16 FMSHRC 704, 708 (Apr. 1994). In distinguishing the holding in Elam, the Commission focused on the fact that the basis of jurisdiction over the supply shop is the presence of equipment and facilities used in the extraction process. The Commission ultimately ruled that the ALJ erred in finding the function provided by the supply shop was one normally done by a vendor not exposed to the hazards of mining. Employees should not be differentiated because a mine operator has centralized supply room operations to four of its mines at a single off-site warehouse. Dangers to miners include improperly maintained equipment and supplies that are used in mining.

            In a recent decision the Commission again emphasized that the proper focus in determining jurisdiction is the nature of the activity and its relationship to the end product – the functional analysis test. Shamokin Filler Company,____FMSHR _____(Penn. 2009-774 et. al.)(August 28, 2012).

            Under the analysis applied by the Commission in these leading opinions, the function of Green Land was to keep coal production machines and equipment operating which is an integral part of extracting minerals- or mining. SGC admittedly uses Green Land as a centrally located facility servicing and repairing equipment and fabricating parts used at its mines. That a minuscule part of the work it performs is for the benefit of non-mining enterprises is immaterial and does not detract from the finding that the function of the facility is to support SGC mining activities. SGC’s self-serving statement that it desires to increase the percentage of business it does in the non-mining arena is also irrelevant. The function it performs at the present time is to service its mining operations. Additionally, the employees at Green Land are provided new miner and refresher training and travel to the mine sites when equipment in need of servicing cannot be brought to Green Land. This is further indication that SGC’s argument is disingenuous and that it recognizes its employees are miners. As the Commission pointed out in W.J. Bakus, employees should not be differentiated because a mine operator has centralized operations to a single off-site warehouse. Dangers to miners include improperly maintained equipment and supplies that are used in mining.

            The Secretary’s interpretation of the definition of a mine is entitled to deference. evron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) Her application here is well within the ambit of reasonable interpretation of the term and in furtherance of the purpose of the Act.  

            With respect to the application of the Interagency Agreement, the same conclusion is reached that the Green Land facility is a mine. SGC asserts that Green Land was inspected by the Louisiana State Safety & Health Section of the Department of Labor in 1998. Reps. Ex. D. They, in turn, looked to the U.S. Occupational Health and Safety Administration’s (OSHA) standards for guidance. SGC advances the argument that when OSHA was consulted in this case, had they been fully apprised of the full details, it may not have allowed MSHA to assume jurisdiction over the facility. In addition, the Interagency Agreement only applies to facilities engaged in both milling and processing at a single location. Here Green Land was not engaged in either activity.

            SGC’s first argument lacks merit. First, SGC makes a bald faced allegation that OSHA was not fully apprised of the facts and poses the hypothetical position that had it been, OSHA would not have relinquished jurisdiction to MSHA. SGC provides not evidence of either allegation. Furthermore, this argument ignores the fact that the OSH Act and the Interagency Agreement both provide that MSHA has primary jurisdiction over any facility that fits the definition of a “mine” where MSHA has promulgated regulations and standards that protect the occupational health and safety of the employees. Section 4(b)(1) of the OSH Act allows other federal agencies to preempt OSHA’s jurisdiction. 29 U.S.C. §653. See generally Secretary of Labor (MSHA) v. Westwood Energy Properties, 11 FMSHRC 2408, 2411 (December 1989).

            The language of the Interagency Agreement makes clear that the Congressional intent was to resolve doubts in favor of the inclusion of a facility within the coverage of the Mine Act rather than with OSHA. The Agreement requires MSHA to consult with OSHA at the local level only when conflicts in jurisdiction arise. For example, where OSHA has asserted jurisdiction, inspected the facility and issued violations, MSHA cannot unilaterally assert jurisdiction without consulting OSHA. Westwood Energy Props., 11 FMSHRC 2408 (Dec. 1989). SGC cites only one inspection by the State of Louisiana in 1998 which used OSHA guidelines. There is no evidence that OSHA had conducted any inspections at Green Land or evidenced in any way that OSHA considered the facility to be under its jurisdiction. In fact, SGC has admitted that OSHA has never inspected the facility. Sec. Ex. 1 page 16. Despite the fact that no conflict existed between OSHA and MSHA concerning the facility, the stipulated facts indicate that MSHA Assistant District Manager Gatewood spoke with OSHA’s Federal Agency Programs Officer for Region VI Robin Bonville who informed MSHA of their concurrence with MSHA’s assertion of jurisdiction. Sec. Ex. 4. Where a conflict does not exist, as here, MSHA need only exercise its authority over the facility by implementing its safety standards or regulations that cover the specific working conditions at issue. Pennsylvania Elec. Co. V. FMSHRC, 969 F.2d. 1501, 150405 (3d Cir. 1992).Clearly, MSHA has standards and regulations that cover the specific working conditions found at Green Land. Inspector Swan visited Green Land in December 2009. He had a conversation with Green as did Field Office Supervisor Rich in which Green was informed MSHA was asserting jurisdiction over Green Land. MSHA has exercised its authority over the facility by citing violations found at SGC Green Land pertaining to equipment, electrical and housekeeping violations of its promulgated safety and health standards and regulations. Sec. Ex. 3-B. Although MSHA need not have provided Green Land with advance notice that it intended to exercise jurisdiction over Green Land, Green Land had advance actual notice. That SGC was not pleased with that determination is immaterial.

            SGC’s second argument that the Interagency Agreement does not apply to Green Land because it is not engaged in milling and processing at a single location is also rejected. Based upon the same analysis as detailed above, the definition of a mine which includes but is not limited to lands, facilities, equipment, tools used in the process of extracting coal or other work usually done by the operator of a mine is to be interpreted broadly. Application of the functional analysis test leads to the conclusion that the servicing and repair of equipment and fabrication of parts used in the SGC mines is an integral part of the mining operation usually done by the mine operators. The employees performing the work are miners and have been trained in accordance with MSHA directives. SGC cannot elude inspection of its fabrication, equipment repair and service shop which are normally located on the mine site itself simply by moving it off- site. Such a result would frustrate the ability to protect the miners who work in the shop and service the equipment in contravention of the Act. This is particularly true in light of the fact that the facility is not inspected by OSHA leaving SGC completed unregulated.

2. SGC had Notice of MSHA jurisdiction to impose penalties

            SGC had adequate notice of MSHA’s assertion of jurisdiction for the purposes of being inspected. The Commission iterated in its Calmat Co. of Az. decision that an operator should know they are subject to MSHA’s jurisdiction where “a regulated party acting in good faith would be able to identify, with ‘ascertainable certainty,’ the standards with which the agency expects the parties to conform” by “reviewing the regulations and other public statements issued by the agency.” Calmat Co. of Az., 27 FMSRC 617 (Sept. 2005) citing General Electric Co. v. EPA, 53 F.3d 1324, 1329 (D.C. Cir. 1995). Here, SGC should have known the site and equipment would be subject to MSHA’s jurisdiction because it was used at SGC’s mines.

            In addition to constructive notice, SGC had actual notice of MSHA’s jurisdiction when Green was informed of MSHA’s position by Swan and Rich in December 2009. In an abundance of a sense of fair play, the Secretary filed a motion to vacate the citations issued during the December 2009 inspection. Rich’s phone call to Green precipitated his filing Legal Identity report “under protest” leaving no room for doubt that SGC was aware from that time forward, they would be required to conform to the mandatory health and safety regulations promulgated by MSHA. This actual notice to SGC is sufficient to fulfill the due process requirement for the purposes of imposing a penalty for the violations issued after December 2009. See generally General Electric Company v. EPA, Supra. That SGC had not been given the opportunity to contest MSHA’s position before the Commission as it protests, does not constitute a lack of due process or fair notice. It is notice that the agency (MSHA) intends to exercise its authority that is the actual notice, not the operator’s opportunity to challenge it before the court.

Conclusion and Order

             I grant the Secretary’s Motion for Summary Decision on the jurisdictional issue and conclude that MSHA has jurisdiction over the Green Land facility for regulatory and punitive purposes. I deny SGC’s cross-motion for Summary Decision. I order the parties to confer for the purposes of settlement negotiations or setting of a hearing date in accordance with my previously issued Prehearing Order.

                                                                        Priscilla M. Rae

                                                                        Administrative Law Judge

Distribution:

Amy S. Hairston, Esq., U.S. Dept. of Labor, Office of the Solicitor, 525 S. Griffin St., Ste. 501, Dallas, TX 75292

Nichelle Young, Esq., Law Office of Adele L. Abrams, P.C., 4740 Corridor Pl., Ste. D, Beltsville, MD 20705