<DOC>
[DOCID: f:ambrosia.wais]
AMBROSIA COAL & CONSTRUCTION COMPANY
May 5, 1997
PENN 93-233
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET NW, 6TH FLOOR
WASHINGTON, D.C. 20006
May 5, 1997
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. PENN 93-233
:
AMBROSIA COAL & CONSTRUCTION :
COMPANY :
:
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. PENN 94-15
:
WAYNE R. STEEN, employed by :
AMBROSIA COAL & CONSTRUCTION :
COMPANY :
BEFORE: Jordan, Chairman; Marks, Riley, and Verheggen,
Commissioners
DECISION
BY THE COMMISSION:
These civil penalty proceedings, arising under the
Federal Mine Safety and Health Act of 1977 ("Mine Act" or
"Act"), 30 U.S.C. � 801 et seq. (1994) ("Mine Act" or
"Act"), are before the Commission for a second time.
The Commission previously remanded this matter to
Administrative Law Judge William Fauver to reassess
penalties against Ambrosia Coal & Construction Company
("Ambrosia") and Wayne R. Steen. Ambrosia Coal &
Constr. Co., 18 FMSHRC 1552 (September 1996) ("Ambrosia
I"). On remand, the judge assessed penalties of $5,000
against Ambrosia and $3,500 against Steen. 18 FMSHRC
1874 (October 1996) (ALJ). The Commission granted
Steen's petition for discretionary review challenging
the $3,500 penalty. The Commission also granted
Ambrosia's petition for discretionary review
challenging the $5,000 penalty and stayed briefing on
Ambrosia's appeal. For the reasons that follow, we
vacate the judge's penalty assessment against Steen and
remand for reassessment, and affirm the penalty against
Ambrosia.
I.
Factual and Procedural Background
The background facts in this proceeding are fully set
forth in Ambrosia I, 18 FMSHRC at 1553-56, and are summarized
here. On June 3, 1992, during an inspection of the
Ambrosia Tipple, Charles Thomas, an inspector trainee
with the Department of Labor's Mine Safety and Health
Administration ("MSHA"), examined a highlift he had
observed having difficulty stopping. Id. at 1553-54.
Thomas was accompanying MSHA Inspector David Weakland
during an inspection of the mine. Id. at 1553. Thomas
asked the Ambrosia employee operating the highlift,
William Carr, about the condition of the vehicle's
brakes. Id. at 1554. Carr replied that they were bad.
Id. Thomas instructed Carr to test the highlift's
parking and service brakes on an incline, but when
applied, neither set of brakes prevented the highlift
from rolling down the incline. Id.
Thomas called Inspector Weakland, who, accompanied by
Steen, joined Thomas at the highlift. Id. In response to
Weakland's questions about the brakes, Carr replied
that they were not working. Id. At Weakland's
direction, Carr tested the highlift's brakes on fairly
level ground with the vehicle's bucket raised, but both
the service and parking brakes failed to prevent the
highlift from drifting. Id. Carr informed Weakland
that the highlift had not had brakes for several weeks,
that he had notified Steen of this problem and recorded
the bad brakes in a maintenance log. Id. Upon
returning to the mine office, Weakland and Thomas
confirmed that the bad brakes were noted by both Carr
and Steen in a log entitled "Daily Work and Cost
Record," and that the highlift had been operated for
over a month with bad brakes. Id.
Weakland issued an order under section 104(d)(1) of
the Mine ct, 30 U.S.C. � 814(d)(1), alleging an S&S and
nwarrantable violation of 30 C.F.R. � 77.1605(b),
ater modified to charge a violation of 30 C.F.R. �
7.404(a).[1] Id. After further tests of the brakes
n the presence of Carmen Ambrosia, the owner of the
ine, the highlift was removed from service. Id. at
555. Later that day, the brakes were successfully
epaired and the order was terminated. Id. Several
ays later, Steen falsified the highlift maintenance
ecords by adding entries noting the highlift's bad
rakes for May 30 and June 2 and 3, and stating that
he highlift was being repaired on June 4. Id.
On the basis of an MSHA special investigation, the
Secretary proposed that a $3,500 penalty be assessed against
Steen individually under section 110(c) of the Act, 30
U.S.C. � 820(c). Id. The Secretary also proposed that
a $7,000 penalty be assessed against Ambrosia for its
alleged violation of section 77.404(a). Id. Ambrosia
and Steen challenged the Secretary's enforcement
actions, and the matters were consolidated and
proceeded to a hearing before Judge Fauver. Id.
In his first decision, the judge found that the lack
of operable brakes on the highlift amounted to an unsafe
condition and that the operator had failed to remove
the equipment from service despite its knowledge that
the brakes were bad. Id. at 1555-56. He concluded
that Ambrosia violated section 77.404(a), and that the
violation was S&S and the result of Ambrosia's
unwarrantable failure to comply with the standard. Id.
The judge further concluded that, as foreman, Steen was
a corporate agent under section 110(c) of the Mine Act,
and that he had knowingly authorized Ambrosia's
violation because he knew that the brakes were bad for
at least 5 days before the inspection, yet failed to
repair them or remove the highlift from service. Id.
at 1556. The judge assessed civil penalties of $11,000
against Ambrosia and $4,000 against Steen. Id. He
based the penalties, in part, on his finding that
Ambrosia's vice-president for operations, Carmen Shick,
participated in the falsification of the maintenance
log, and that the attempted cover-up by Shick and Steen
increased the need for deterrence provided by higher
penalties. Id. at 1555-56.
On review, the Commission affirmed the judge's findings
of a violation of section 77.404(a), that the violation was
S&S and unwarrantable, and that Steen was liable for
the violation under section 110(c). 18 FMSHRC at
1556-63. The Commission further held that because the
Secretary had not alleged any wrongdoing against Shick,
the judge abused his discretion when he increased
Ambrosia's penalty for deterrence purposes based on his
findings regarding the falsification of Ambrosia's
records by Shick. Id. at 1565. The Commission noted
that "although deterring future violations is an
important purpose of civil penalties, deterrence is
achieved through the assessment of a penalty based on
the six statutory penalty criteria." Id. (footnote
omitted). Regarding Steen's penalty, the Commission
concluded that the judge erred because he "failed to
set forth findings applying the statutory criteria to
Steen as an individual." Id. The Commission remanded
the case to the judge with instructions to reassess the
penalties. Id. at 1566.
On remand, with respect to Ambrosia, the judge reiterated
the findings he made in his original decision on the
six statutory penalty criteria. 18 FMSHRC at 1875. In
reassessing a penalty against Ambrosia, the judge
recognized that the Commission had instructed him not
to increase the penalty based on a separate deterrence
criterion, and concluded that a penalty of $5,000 was
warranted against the company. Id. at 1875-76.
Regarding Steen, the judge stated:
I also considered Respondent Steen's
financial situation in my original decision.
He has a number of financial obligations,
which I found would warrant amortizing the
payment of a civil penalty. He has no record
of prior violations charged under � 110(c) of
the Act.
As stated, I have found that the
violations . . . were significant and
substantial and were due to high negligence
and an unwarrantable failure to comply with
the safety standard.
Id. at 1875. After noting that he was "[e]xcluding consideration
of Respondents' false records and false statements to MSHA to
cover up the violation," the judge reduced Steen's penalty from
$4,000 to $3,500 and ordered him to pay the penalty in 10 monthly
installments of $350 each. Id. at 1876.
II.
Disposition
A. Ambrosia's Penalty
In its petition for discretionary review, Ambrosia argues
that the penalty assessed against it by the judge on remand
"is excessive in terms of the statutory criteria, and
therefore contrary to law." A. PDR at 2. Maintaining that
the judge's penalty assessment against the company was
affected by the judge's findings with respect to the
behavior of Steen and Carr, Ambrosia argues that it should
not be unduly penalized for the negligence of its two
employees. Id. at 3-6. Ambrosia also argues that the
penalty assessed by the judge is excessive in light of the
six statutory criteria. Id. at 6-10. The company asserts
that the penalty should be reduced in light of the company's
modest history of previous violations and small size, the
cooperation shown by the company during MSHA's inspection of
the highlift, and the small degree of risk associated with
the violation, notwithstanding the judge's S&S and
unwarrantable failure findings. Id. Ambrosia suggests that
a penalty of $3,500 would be appropriate. Id. at 10.
We find Ambrosia's petition for discretionary review
unpersuasive. On remand, the judge reduced Ambrosia's
penalty by $6,000 (from $11,000 to $5,000) in accordance
with our remand instructions. The judge acted well within
his discretion after proper consideration of the statutory
criteria. Sellersburg Stone Co., 5 FMSHRC 287, 294 (March
1983), aff'd, 736 F.2d 1147 (7th Cir. 1984). Based on the
facts developed in the adjudicative record, we cannot say
that the penalty is inconsistent with the statutory
criteria. Accordingly, we affirm the penalty assessed by
the judge against Ambrosia.
B. Steen's Penalty
Steen argues that the judge's penalty assessment on remand
lacks requisite factual findings on his income or net worth.
Steen Br. at 2-3. Steen also argues that the penalty
assessed by the judge is excessive in light of his net
worth, income, and other penalties assessed against section
110(c) defendants. Id. at 3-9. He requests that the
Commission reduce the penalty against him to $575. Id. at
9-10.
In response, the Secretary asserts that the judge properly
considered the six statutory penalty criteria. S. Br. at
3-6. Regarding the appropriateness of the penalty to
Steen's "size," the Secretary contends that the judge
considered this criterion when he reviewed the evidence on
Steen's financial situation and concluded that Steen's
financial obligations warranted amortizing the payment of
the penalty. Id. at 4. The Secretary further argues that
the cases on which Steen relies are irrelevant because of
the fact-specific nature of penalty assessment, and that
Steen's argument for uniform penalties is, in effect, a plea
for adopting a new criterion that "the penalty in every case
shall ultimately be adjusted so that it comports with
penalties assessed in other cases against individuals
similarly situated economically." Id. at 6-10. The
Secretary asserts that the penalty assessment against Steen
was within the sound discretion of the judge. Id. at 9-10.
Section 110(i) of the Mine Act requires the Commission
to consider six criteria in assessing appropriate civil
penalties:
[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). Findings of fact on each of these statutory
criteria must be made. Sellersburg, 5 FMSHRC at 292. Such
findings "not only provide the [individual] with the required
notice as to the basis upon which [he or she] is being assessed a
particular penalty, but also provide the Commission and the
courts, in their review capacities, with the necessary foundation
upon which to base a determination as to whether the penalties
assessed by the judge are appropriate, excessive, or
insufficient." Id. at 292-93. We have recently reiterated that
with respect to individual respondents under section 110(i),
"Commission judges must make findings on each of the criteria as
they apply to individuals." Sunny Ridge Mining Co., 19 FMSHRC
254, 272 (February 1997) (emphasis in original). In keeping with
these principles, in Ambrosia I we instructed the judge "to set
forth [on remand] findings applying the statutory criteria to
Steen as an individual." 18 FMSHRC at 1565.
In his remand decision, the judge made findings on Steen's
negligence, the gravity of the violation, and Steen's history of
previous violations. 18 FMSHRC at 1875. The judge made no
findings with respect to good faith abatement, but in his earlier
decision, he found that "[s]ince the inspector red-tagged the
vehicle, the question of the operator's abatement does not
arise." 16 FMSHRC 2293, 2305 (November 1994) (ALJ). The
Commission affirmed the judge's finding on this criterion in
Ambrosia I. 18 FMSHRC at 1565. The judge's findings on each of
these criteria, although terse, meet the minimum requirements of
the Act and our Sellersburg decision.
In light of the amount of the penalty relative to Steen's
income, the judge's findings on the criteria of the penalty's
effect on the ability to continue in business and the
appropriateness of the penalty to the size of the business are
inadequate. Under our Sunny Ridge decision issued after the
judge's decision on remand, the relevant inquiry with respect to
the criterion regarding the effect on the operator's ability to
continue in business, as applied to an individual, is whether the
penalty will affect the individual's ability to meet his
financial obligations. 19 FMSHRC at 272. The judge ordered
that, "[i]n light of his financial obligations," Steen should pay
his penalty in 10 monthly installments of $350 each. 18 FMSHRC
at 1876. However, the judge did not make specific findings as to
the extent and nature of these obligations. On remand, the judge
must make the requisite findings and explain how they affect the
penalty.
With respect to the "size" criterion, we held in Sunny Ridge
that, as applied to an individual, the relevant inquiry is
whether the penalty is appropriate in light of the individual's
income and net worth. 19 FMSHRC at 272. Although the judge
stated that he "considered Respondent Steen's financial
situation" (18 FMSHRC at 1875), he failed to make any specific
findings on Steen's income and net worth. On remand, the judge
must make the requisite findings and explain how they affect the
penalty.
In the case of an individual, consideration of these
criteria is especially critical in light of the legislative
history of section 110(i), which was carried over with no
significant changes from section 109 of the Federal Coal Mine
Health and Safety Act of 1969, 30 U.S.C. � 801 et seq. (1976)
(amended 1977) ("Coal Act"). The drafters of the Coal Act did
not intend to tie an individual's liability under sections 110(c)
and 110(i) to an operator's conduct and financial resources;
instead, Congress intended that "the agent stand on his own."
H.R. Rep. No. 563, 91st Cong., 1st Sess. 11-12 (1969), reprinted
in Senate Subcommittee on Labor, Committee on Labor and Public
Welfare, 94th Cong., 1st Sess., Part I Legislative History of the
Federal Coal Mine Health and Safety Act of 1969, at 1041-42
(1975). But Congress also did not intend that agents "bear the
brunt of corporate violations." Id. at 1042. The Commission has
thus held that inordinately high penalties should not be assessed
against individuals under sections 110(c) and 110(i). Sunny
Ridge, 19 FMSHRC at 272.
III.
Conclusion
For the foregoing reasons, we affirm the judge's assessment
of a $5,000 penalty against Ambrosia. We vacate the penalty
assessed against Steen and remand a second time for reassessment.
Mary Lu Jordan, Chairman
Marc Lincoln Marks, Commissioner
James C. Riley, Commissioner
Theodore F. Verheggen, Commissioner
**FOOTNOTES**
[1]: Section 77.404(a) provides:
Mobile and stationary machinery and equipment
shall be maintained in safe operating
condition and machinery or equipment in
unsafe operating condition shall be removed
from service immediately.