.
AMBROSIA COAL & CONSTRUCTION COMPANY
September 12, 1996
PENN 93-233
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET NW, 6TH FLOOR
WASHINGTON, D.C. 20006
September 12, 1996
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
: Docket No. PENN 93-233
v. :
:
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 and Riley, Commissioners[1]
DECISION
BY THE COMMISSION:
These civil penalty proceedings arise under the Federal Mine
Safety and Health Act of 1977, 30 U.S.C. � 801 et seq. (1994)
("Mine Act" or "Act"). At issue is whether Administrative Law
Judge William Fauver correctly determined that Ambrosia Coal &
Construction Company ("Ambrosia") violated 30 C.F.R. � 77.404(a)[2]
when it operated a highlift with allegedly defective brakes, that
the violation was significant and substantial ("S&S")[3] and caused
by Ambrosia's unwarrantable failure,[4] and that a civil penalty
should be assessed against Ambrosia's employee, Wayne Steen, under
section 110(c) of the Mine Act [5] for his alleged knowing
authorization of the violation. 16 FMSHRC 2293 (November 1994)
(ALJ). For the reasons that follow, we affirm the judge's
determinations on these issues, vacate the judge's penalty
assessments against Ambrosia and Steen, and remand for reassessment.
I.
Factual and Procedural Background
Ambrosia operates the Ambrosia Tipple, a surface coal mine
near Edinburg, Pennsylvania. On June 3, 1992, David Weakland,
an inspector with the Department of Labor's Mine Safety and Health
Administration ("MSHA"), and Charles Thomas, an inspector-trainee,
inspected the mine. 16 FMSHRC at 2294. When they arrived,
Inspector Weakland and Thomas went to the scale house, where they
met Steen, and asked, "[W]ho is in charge here, who is the foreman?"
Id.; I-Tr. 27-28.[6] Steen replied that he was the foreman and
accompanied the inspectors on their inspection. 16 FMSHRC at 2294.
After leaving the scale house, Thomas asked Inspector
Weakland if he could inspect a highlift that he had observed
having difficulty stopping as the inspectors drove into the mine.
Id. Weakland agreed and directed Thomas to notify him if there
were any problems. Id. Thomas approached the highlift, which was
being operated by William Carr, an Ambrosia employee, and
asked him about the condition of the brakes. Id. Carr replied
that they were bad. Id.; I-Tr. 250. Thomas instructed Carr to
position the highlift on a 30 to 40 degree incline and to engage
the parking brake. 16 FMSHRC at 2294. The highlift rolled down
the incline. Id. Thomas then asked Carr to reposition the
highlift on the incline and to apply the service brake. Id.
The highlift again rolled down the incline. Id. Thomas called
Inspector Weakland, who, accompanied by Steen, joined them. Id.
at 2294-95.
Inspector Weakland asked Carr if there were any brakes on
the highlift. Id. Carr responded, "[N]o, there isn't, [and]
there hasn't been." I-Tr. 31. Weakland instructed Carr to raise
the bucket and test the service brake. 16 FMSHRC at 2294. The
highlift drifted backwards on fairly level ground. Id. When
Carr engaged the parking brake upon the inspector's instructions,
the highlift continued to drift. Id.
Weakland testified that, after the brakes were tested, Carr
informed him that the highlift had no brakes for several weeks,
and that he had notified the foreman, Steen, and recorded the
bad brakes in a maintenance log. Id. at 2295. Inspector Weakland
testified that he then asked Steen why he did not get the brakes
repaired, and that Steen had replied that he had contacted the
maintenance shop but that it was "like pulling teeth to get things
fixed around here." Id. The inspectors continued inspecting the
highlift and discovered the presence of an accumulation of
combustible fuel around a pivot point and the absence of a seatbelt
and fire extinguisher. Id. Inspector Weakland informed Steen that
the highlift was unsafe to operate. Id.
Inspector Weakland and Thomas returned to the scale house to
look for the maintenance log, discuss the alleged violations, and
prepare citations. Id. Thomas showed Inspector Weakland a log
entitled, "Daily Work and Cost Record," which contained entries
noting "bad brakes" for the highlift on May 1, 4, 5, 6, 7, 8, 22,
26, 27, and 28, 1992. Id. Some entries were initialed "B.C."
for Carr, and some were initialed "W.S." for Steen, indicating
that they had operated the highlift on those dates. Id.
Weakland issued an order pursuant to section 104(d)(1) of
the Act, alleging an S&S and unwarrantable violation of 30 C.F.R.
� 77.1605(b), which was later modified to allege a violation of
section 77.404(a). I-Tr. 35-36. The face of the citation indicated
that it was served to "Wayne Steen, Foreman." Gov't Ex. 4. Steen
did not object to being identified as a foreman on the citation.
16 FMSHRC at 2300. Weakland and Thomas then conducted a close-out
conference with Steen and Carmen Ambrosia, the owner of the mine.
I-Tr. 41-42.
Mr. Ambrosia stated that he wanted to observe the brake
demonstration. 16 FMSHRC at 2296. The highlift was placed on
an incline and Carr was instructed to separately engage the parking
brake and the service brake. Id. The highlift rolled down the
incline without hesitation after each test. Id. Mr. Ambrosia
told Steen that they could not stay in business operating equipment
in such condition. Id.
The highlift was then removed from service. Id. Later that
day, Timothy Yager, a mechanic for Ambrosia, adjusted the brakes.
II-Tr. 156-57. The citation was terminated after the brakes held
the highlift on an incline during a subsequent test. I-Tr. 44-45;
II-Tr. 161.
After the inspectors left the mine, Carr admitted to Steen
that he had made all of the entries in the highlift maintenance log.
16 FMSHRC at 2296-97. Steen stated, "I guess that's okay." Id. at
2297. Carr testified that, shortly after he told Steen, he also told
Carmen Shick, Ambrosia's vice-president in charge of operations, that
he had made the entries. Id. Shick commented that, "that wasn't a
very good idea," but took no action to change the entries. Id. On
approximately June 6, Steen falsified the official MSHA examination
record by adding entries noting the highlift's "bad brakes" for May 30,
June 2, and 3, 1992, and stating "repairing highlift" for June 4.
Id.; II-Tr. 20.
On December 29, 1992, MSHA Special Investigator John Savine
conducted an investigation to determine whether Steen should be held
individually liable under section 110(c) of the Mine Act for knowingly
authorizing Ambrosia's violation. 16 FMSHRC at 2297. Based on that
investigation, the Secretary proposed that a penalty in the amount
of $3,500 be assessed against Steen. Id. at 2303. The Secretary
also proposed that a civil penalty in the amount of $7,000 be
assessed against Ambrosia for its alleged violation of section
77.404(a). Id.
Ambrosia and Steen challenged the enforcement actions and the
matters were consolidated and proceeded to hearing before Judge
Fauver.[7]
The judge found that Ambrosia had violated section 77.404(a).
Id. at 2298. He reasoned 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. Id. The judge
also determined that the violation was S&S because the inoperable
brakes posed a number of discrete safety hazards. Id. at 2299.
He found the violation unwarrantable because the operator, through
Steen, its foreman and mine examiner, knew that the brakes were
bad and failed to repair them or remove the highlift from service.
Id. The judge further concluded that, as a 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 had actual
knowledge of the bad brakes for at least five days and had failed to
repair them or remove the equipment. Id. at 2300, 2302. Finally,
the judge assessed civil penalties of $11,000 and $4,000 against
Ambrosia and Steen, respectively. Id. at 2306. He based the
penalties, in part, upon his finding that Shick, who he found to
be a corporate agent, participated in the falsification of the
maintenance log, and that the deliberate cover-up by Steen and
Shick increased the need for deterrence provided by higher
penalties. Id. at 2305-06.
Ambrosia and Steen each filed petitions for discretionary
review challenging the judge's determinations, which the Commission
granted.
II.
Disposition
A. Violation of Section 77.404(a)
Ambrosia argues substantial evidence does not support the
judge's finding that it violated section 77.404(a) because the
highlift had sufficient brakes to perform its functions. A. Br.
at 19-26. It emphasizes that Carr testified he was not concerned
for his safety when operating the highlift because he was working
on level ground and loading in first gear, and that he could load
trucks without any brakes by "slip[ping] it in reverse and
back[ing] up." Id. at 21-23; I-Tr. 333. In addition, Ambrosia
relies on testimony of its mechanic that the brakes required only
adjustment, rather than repair or replacement of parts, and that
the adjustment was not extensive. A. Br. at 23-24; II-Tr. 164-
65. The Secretary responds that substantial evidence supports
the judge's determination because the highlift had no brakes and
that such a condition would be recognized as unsafe by a
reasonably prudent person. S. Br. at 12-19.
As the Commission has previously recognized, section
77.404(a) imposes two duties: (1) to maintain equipment in safe
operating condition; and (2) to remove unsafe equipment from
service immediately. Peabody Coal Co., 1 FMSHRC 1494, 1495
(October 1979). The "[d]erogation of either duty violates the
regulation." Id. Substantial evidence supports the judge's
determination that Ambrosia derogated both duties.[8]
Equipment is in unsafe operating condition under section
77.404(a) when a reasonably prudent person familiar with the
factual circumstances surrounding the allegedly hazardous
condition, including any facts peculiar to the mining industry,
would recognize a hazard warranting corrective action. See
Alabama By-Products Corp., 4 FMSHRC 2128, 2129 (December 1982)
(involving identical standard applicable to underground coal
mines). Here, the evidence is undisputed that when the parking
brake and service brake were tested on fairly level ground, the
highlift drifted backwards. I-Tr. 34-35, 187. In addition, the
highlift rolled without hesitation down an incline when either
brake was engaged. I-Tr. 44, 171, 173; II-Tr. 28-29. Upon
observing the brake demonstration on the incline, Ambrosia's
owner, recognizing a hazard warranting corrective action, told
Steen, "we can't stay in business like this," and "we can't
operate equipment like this." I-Tr. 176.
The evidence relied upon by Ambrosia does not, in fact,
establish that the highlift was in safe operating condition for
the functions it performed. Carr stated that the highlift "had a
little bit of brakes on it to get by with," and that the brakes
were only "good enough to stop me a little bit on the level." I-
Tr. 332, 355. He acknowledged that the brakes were not "good
enough to stop me on a ramp" and that he sometimes operated on
the ramp. I-Tr. 355. Carr stated that when he was on the ramp,
in order to stop the highlift, he "went right around and parked
it." I-Tr. 355. Thomas testified that when he observed Carr
operating the highlift to load a truck, Carr was having difficulty
stopping it. I-Tr. 162-64. Moreover, Carr admitted that he
complained about the condition of the brakes to Steen days before
the inspection, at least by May 27th or 28th. I-Tr. 329, 332,
336, 353-54. In addition, Carr's statement that he did not need
brakes when loading does not establish that the need for brakes
would not arise. Inspector Weakland testified that, without
brakes, the highlift could collide with a truck driver or another
pedestrian, such as a mechanic or supervisor walking across the
yard, or with a truck if the highlift operator misjudged
distances when loading it. I-Tr. 45-47. Moreover, regardless of
the extent of the brake adjustment required, the brakes were
inoperable on the incline and on a fairly level surface, where
the highlift traveled during normal mining operations.
Therefore, substantial evidence supports the judge's
determination that the highlift was not maintained in safe
operating condition. Given the undisputed evidence that Ambrosia
failed to remove the highlift from service (16 FMSHRC at 2298),
we affirm the judge's finding that Ambrosia violated section
77.404(a).
B. Significant and Substantial
Ambrosia argues that the judge erred in finding its alleged
violation of section 77.404(a) was S&S because the Secretary
failed to establish that it was reasonably likely operating the
highlift would result in injury. A. Br. at 26-30. It submits
there was little likelihood of a collision between the highlift
and a truck being loaded, or with a pedestrian or structure,
because Carr never dropped the highlift's bucket, the highlift
was operated at low speed, the highlift could reverse direction,
and the brakes were sufficient to stop the highlift on level
ground on the day of the inspection.[9] Id. at 27-28. Ambrosia
also argues that it was unlikely the highlift would roll on to
the adjacent highway because the highway was 40 to 50 yards away
from the operation of the tipple. Id. at 28. The Secretary
responds that the judge correctly determined the violation was
S&S and that the evidence relied upon by Ambrosia established
only that an accident had not yet occurred. S. Br. at 22-23.
A violation is S&S if, based on the particular facts
surrounding the violation, there exists a reasonable likelihood
that the hazard contributed to will result in an injury or
illness of a reasonably serious nature. Cement Div., Nat'l
Gypsum Co., 3 FMSHRC 822, 825 (April 1981). In Mathies Coal Co.,
6 FMSHRC 1 (January 1984), the Commission further explained:
In order to establish that a violation of a
mandatory safety standard is significant and
substantial under National Gypsum, the Secretary of
Labor must prove: (1) the underlying violation of a
mandatory safety standard; (2) a discrete safety hazard
-- that is, a measure of danger to safety --
contributed to by the violation; (3) a reasonable
likelihood that the hazard contributed to will result
in an injury; and (4) a reasonable likelihood that the
injury in question will be of a reasonably serious
nature.
Id. at 3-4 (footnote omitted). See also Buck Creek Coal, Inc. v.
FMSHRC, 52 F.3d 133, 135 (7th Cir. 1995); Austin Power, Inc. v.
Secretary of Labor, 861 F.2d 99, 103 (5th Cir. 1988) (approving
Mathies criteria).
At issue is whether the judge correctly determined that the
Secretary established the third Mathies factor.[10] In arguing
that injury was not reasonably likely to occur, Ambrosia relies
on evidence relating to conditions or practices existing at the
time of the inspection. An evaluation of the reasonable
likelihood of injury must be made assuming continued normal
mining conditions. U.S. Steel Mining Co., 7 FMSHRC 1125, 1130
(August 1985).
Taking into consideration continued normal mining
conditions, substantial evidence supports the judge's
determination that the third Mathies factor was established.
Evidence was undisputed that the brakes were ineffective on the
ramp and fairly level ground, where the highlift traveled during
normal operations. I-Tr. 34-35, 43-44, 171, 176-77, 188, 355,
387. Inspector Weakland testified that, without brakes, the
highlift could collide with a truck driver or other pedestrian in
the yard and that, during the inspection, he had observed a truck
driver get out of his truck. I-Tr. 46, 52. In addition, he
stated that the highlift could collide with a truck it was
loading if the highlift operator misjudged distances. I-Tr. 45.
Thomas testified that, if the highlift collided with anything in
the tipple area, such as coal trucks, telephone poles, or the
fuel storage area, the highlift operator could be thrown through
the windshield or against the steering wheel. I-Tr. 178.
Carr's statement that he never dropped the bucket to stop
the highlift does not preclude the possibility that another
operator might do so or that an opportunity would arise when he
would find it necessary to do so.[11] Inspector Weakland
testified that, if the highlift operator dropped the bucket to
stop the highlift, the bucket could collide with the side of the
truck, resulting in injuries or fatalities. I-Tr. 45-46. In any
event, Thomas stated that shifting the highlift into reverse
while it is moving forward, the method of braking used by Carr
(I-Tr. 333), would result in a jerking motion and that the
operator could be thrown through the windshield, out of the
vehicle, or against the steering wheel. I-Tr. 179-80. The
hazard to the highlift operator would be greater given that the
seatbelt was missing from the highlift. I-Tr. 41.
Furthermore, although the highway was 40 to 50 yards away
from coal piles at the tipple, Thomas stated that he believed
that the highlift was used in all areas of the mine. I-Tr. 180.
He estimated that the highlift weighed 15 to 20 tons, and that it
would be heavier and more difficult to stop if it were carrying a
load. I-Tr. 181. In addition, there were no berms or guardrails
separating the tipple area from the highway, and the highway
received a great deal of traffic. I-Tr. 180-81.
Thus, the evidence relied upon by Ambrosia does not
establish that injury was not reasonably likely to occur.
Rather, it establishes only that an accident had not yet
occurred, which is not dispositive of a finding that the third
Mathies factor had not been established. Blue Bayou Sand and
Gravel, Inc., 18 FMSHRC 853, 857 (June 1996). Accordingly, we
affirm the judge's S&S determination.
C. Unwarrantable Failure
In Emery Mining Corp., 9 FMSHRC 1997 (December 1987), the
Commission determined that unwarrantable failure is aggravated
conduct constituting more than ordinary negligence. Id. at 2001.
Unwarrantable failure is characterized by such conduct as
"reckless disregard," "intentional misconduct," "indifference" or
a "serious lack of reasonable care." Id. at 2003-04; Rochester &
Pittsburgh Coal Corp., 13 FMSHRC 189, 193-94 (February 1991)
("R&P"); see also Buck Creek Coal, Inc. v. FMSHRC, 52 F.3d at 136
(approving Commission's unwarrantable failure test).
1. Whether Steen's Conduct is Imputable to Ambrosia
The conduct of an "agent" of an operator may be imputed to
the operator for unwarrantable failure purposes. R&P, 13 FMSHRC
at 194. Section 3(e) of the Mine Act defines "agent" as "any
person charged with responsibility for the operation of all or
part of a . . . mine or the supervision of the miners in a . . .
mine . . . ." 30 U.S.C. � 802(e).
Ambrosia argues that Steen was not an "agent" and that his
conduct may not be imputed to it for unwarrantable failure
purposes. A. Br. at 17-18. Steen argues that he was not an
agent because he was not a foreman and that, rather, he admitted
to only being the person in charge at the mine. St. Br. at 3, 5-
10. He submits that he did not possess the actual authority
customarily exercised by a foreman, including the ability to
recommend hiring or firing, discipline employees, change work
schedules, adjust pay or terms of employment, or make contracts
or decisions regarding the sale of coal. Id. at 13-14, 20. The
Secretary responds that, as a foreman, Steen was an agent whose
conduct was imputable to Ambrosia. S. Br. at 25 n.14, 29-39.
Steen's assertion that his job title was not "foreman" and
that there were some supervisory functions that he did not
perform is not dispositive of whether he was an agent within the
meaning of section 3(e). In considering whether an employee is
an operator's agent, the Commission has "relied, not upon the job
title or the qualifications of the miner, but upon his function,
[and whether it] was crucial to the mine's operation and involved
a level of responsibility normally delegated to management
personnel." U.S. Coal, Inc., 17 FMSHRC 1684, 1688 (October
1995). Here, Steen accompanied the inspectors and attended the
MSHA close-out conference as Ambrosia's representative. I-Tr.
27, 175. In the close-out conference, Weakland and Thomas
informed Steen that if he had any disagreement with the
citations, he had ten days to request a manager's conference. I-
Tr. 175. MSHA Inspector Thomas Sellers, who had inspected the
mine on July 2, 1991, and March 16, 1992, testified that Steen
also acted as the company representative during those
inspections. I-Tr. 280-81. Steen was paid a salary and did not
receive additional pay for working more than 40 hours per week,
while rank-and-file miners were paid hourly and received time-
and-a-half for working overtime. 16 FMSHRC at 2301. Steen, as a
certified mine examiner, made required daily examinations at the
mine and was responsible for entering his findings in an MSHA
examination book. I-Tr. 382; II-Tr. 18-19.
In addition, Steen gave work orders to abate citations.
When Inspector Weakland informed Steen that he was going to issue
citations for the lack of seatbelt or fire extinguisher and the
accumulation of combustible materials, Steen instructed Carr to
remove the combustible materials and to get a fire extinguisher.
I-Tr. 172. Inspector Weakland observed Steen direct Carr to
place a "no smoking" sign on a fuel tank and to place a guard on
a tail roller to abate other violations cited during the
inspection. I-Tr. 138. MSHA Inspector Sellers testified that
during the inspections he conducted, Steen had also called the
maintenance shop to explain necessary repairs. I-Tr. 284-85.
Thus, as the person "in charge" at the mine, the functions
performed by Steen were crucial to the mine's operation and
demonstrated an exercise of responsibility normally delegated to
management personnel.
Furthermore, the manner in which Steen was treated by those
with whom he worked demonstrates an exercise of responsibility
normally delegated to management personnel. Carr informed
Inspector Weakland that he had reported the bad brakes to Steen,
essentially acknowledging Steen's position of responsibility. 16
FMSHRC at 2301. When the inspector asked Steen why he did not get
the brakes repaired, Steen did not reply that it was not his job
to remove equipment from service and arrange for repairs but,
rather, that it was difficult to get repairs made. Id. Mr.
Ambrosia apparently believed that Steen held a position of
responsibility for overseeing conditions at the mine, exclaiming
to Steen, "we can't stay in business like this," and "we can't
operate equipment like this," after observing the brake
demonstration. Id.
Therefore, we conclude that substantial evidence supports
the judge's determination that Steen was an agent whose conduct
was imputable to Ambrosia.[12]
2. Whether Ambrosia Engaged in Aggravated Conduct
Substantial evidence supports the judge's determination that
Ambrosia, through Steen, engaged in aggravated conduct that
amounted to more than ordinary negligence when it failed to
maintain the highlift in safe operating condition or remove the
highlift from service. Carr admitted that he informed Steen of
the condition of the brakes on May 27 or 28. I-Tr. 329, 334,
336, 358. Steen conceded that, if Carr stated that he told him
about the brake condition, Carr did. I-Tr. 375. Steen maintains
that during the end of May, however, he believed the brakes
needed adjustment, rather than that they were completely
ineffective. I-Tr. 387; II-Tr. 32. The judge's discrediting of
that evidence is supported by substantial evidence. On the
morning of the inspection, Steen observed Carr loading with the
highlift. II-Tr. 12-13. On that day, Carr was observed having
difficulty stopping the highlift by Inspector Thomas. I-Tr. 162-
63. When tested, the brakes failed to stop the highlift on the
ramp and on fairly level ground. I-Tr. 37, 162, 164, 171. Steen
himself admittedly falsified the inspection manual to state "bad
brakes" on May 30, June 2 and 3.[13] II-Tr. 20. Moreover, on
the day of the inspection, when Inspector Weakland asked Steen
why he had not had the brakes repaired, Steen did not react with
surprise that the brakes required repair. Rather, he stated that
it was "like pulling teeth to get things fixed around here." I-
Tr. 37; 16 FMSHRC at 2299. Therefore, substantial evidence
supports the judge's determination that Steen knew the brakes
were bad at least five or six working days before the inspection.
In addition, although he had been informed about the
condition of the brakes, Steen failed to remove the highlift from
service or insure that the brakes were repaired. Inspector
Weakland testified that Steen informed him that he called the
maintenance foreman when Carr told him about the brakes, but that
the foreman did not send anybody to repair the brakes. I-Tr. 67-
68. The judge's finding that Steen, in fact, had not contacted
maintenance (16 FMSHRC at 2295), is supported by substantial
evidence given the maintenance foreman's testimony that he had
not been notified before the inspection that the brakes on the
highlift required repair or adjustment. II-Tr. 167-68. In any
event, even if Steen had contacted the maintenance shop, he
failed to remove the equipment from service until repairs were
made. Accordingly, we affirm the judge's determination that
Ambrosia's violation of section 77.404(a) resulted from its
unwarrantable failure through imputation of the conduct of its
agent, Steen.
D. Steen's Liability Under Section 110(c)
Steen argues that the judge erred in concluding that he was
a foreman and, therefore, an agent subject to liability under
section 110(c) of the Act. St. Br. at 2-3. The Secretary relies
upon the same evidence establishing Ambrosia's aggravated conduct
to assert that Steen knowingly authorized Ambrosia's violation of
section 77.404(a) in violation of section 110(c). S. Br. at 39-
40.
Section 110(c) of the Mine Act provides that, whenever a
corporate operator violates a mandatory safety standard, any
agent of the corporate operator who "knowingly authorized,
ordered, or carried out such violation" shall be subject to
individual civil penalty. We conclude substantial evidence
supports the judge's determination that Steen was liable under
section 110(c).
First, Steen's position as the salaried person in charge at
the mine who represented the operator during inspections, close-
out conferences and in receiving citations, and who gave
abatement instructions, was crucial to the mine's functioning and
involved a level of responsibility normally delegated to
management personnel. See U.S. Coal, 17 FMSHRC at 1688.
Therefore, Steen was an "agent" within the meaning of section
3(e) of the Act.[14]
Furthermore, substantial evidence supports the judge's
determination that Steen knowingly authorized Ambrosia's
violation of section 77.404(a). Steen had actual knowledge of
the brake condition for at least five or six working days before
the inspection but failed to have the brakes repaired or the
highlift removed from service. Steen's assertion that he
believed the brakes only needed adjustment and not that they were
completely ineffective is unpersuasive given the Commission's
recognition that, in order to prove section 110(c) liability, the
Secretary "must prove only that an individual knowingly acted,
not that the individual knowingly violated the law." Warren
Steen Constr., Inc., 14 FMSHRC 1125, 1131 (July 1992) (citing
United States v. International Minerals & Chem. Corp., 402 U.S.
558, 563 (1971)). Steen knew that Carr was operating the
highlift after complaining about the condition of the brakes, and
observed him loading on the day of the inspection when the brakes
were ineffective on the ramp and fairly level ground. In
addition, Steen defended his failure to repair the brakes, not
with surprise that the brakes were ineffective, but by stating
that getting repairs made was difficult. 16 FMSHRC at 2295.
Accordingly, we affirm the judge's determination that Steen was
liable under section 110(c) of the Act.
E. Civil penalties
Ambrosia argues that the judge erred in assessing its
penalty by failing to find good faith in achieving rapid
compliance and by increasing the penalty from that proposed by
the Secretary based on his determination that Shick, who he found
to be a corporate agent, participated in the falsification of the
maintenance log. A. Br. at 15-17. It argues that the increase
in penalty was unreasonable for the additional reason that the
Secretary had proposed a penalty of $7,000 based on a contention
that the falsified log entries had, in fact, been genuine and
provided notice of the brake problem. Id. at 16. Steen argues
that the penalty assessed against him was excessive. St. Br. at
24-26. The Secretary agrees that the judge erred in assessing
both penalties. S. Br. at 41-46.
The Commission's judges are accorded broad discretion in
assessing civil penalties under the Mine Act. Westmoreland
Coal Co., 8 FMSHRC 491, 492 (April 1986). The Commission
has cautioned, however, that the exercise of such discretion
is not unbounded and must reflect proper consideration of
the penalty criteria set forth in section 110(i) of the Mine
Act.[15] Id. (citing Sellersburg Stone Co., 5 FMSHRC 287,
290-94 (March 1983), aff'd, 736 F.2d 1147 (7th Cir. 1984)).
In reviewing a judge's penalty assessment, the Commission
must determine whether the judge's findings are supported by
substantial evidence. 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 judge must make
findings of fact on the 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.
Contrary to Ambrosia's assertions, the judge did not err in
analyzing the penalty criterion of good faith in achieving
rapid compliance. As the judge found, the violation of
section 77.404(a) was abated as soon as the inspector
removed the highlift from service. 16 FMSHRC at 2305.
Because the operator had no opportunity to show its good
faith in rapidly achieving compliance, the judge properly
neither increased nor decreased the penalty based upon his
consideration of the factor.
In addition, we reject Ambrosia's argument that the
assessment is erroneous because the penalty proposal was
based upon the mistaken conclusion that the maintenance log
entries were genuine and provided notice to the operator.
There is no indication that the judge erroneously concluded
he was bound by the Secretary's proposed penalty or that he
relied upon the mistaken conclusion that the log entries
provided notice. See 29 C.F.R. � 2700.30(b) (Judges and the
Commission are not bound by the penalty proposal in
assessing penalty). In fact, the judge expressly found that
the entries were false and provided no notice. 16 FMSHRC at
2304.
The judge abused his discretion, however, in increasing
Ambrosia's penalty for deterrence purposes based on his
finding that Shick was a corporate agent who participated in
the record falsification. The Secretary had not made any
allegations of wrongdoing or initiated enforcement
proceedings against Shick. The judge, who is not an
authorized representative of the Secretary, cannot make
findings that create new liability. Mettiki Coal Corp., 13
FMSHRC 760, 764 (May 1991).[16] Moreover, although
deterring future violations is an important purpose of civil
penalties,[17] deterrence is achieved through the assessment
of a penalty based on the six statutory penalty criteria.
See Dolese Bros.Co., 16 FMSHRC 689, 695 (April 1994) (a
judge's consideration is limited to the statutory penalty
criteria). Deterrence is not a separate component used to
adjust a penalty amount after the statutory criteria have
been considered.
In addition, the judge erred in assessing Steen's penalty.
The judge failed to set forth findings applying the
statutory criteria to Steen as an individual. Without such
findings, Steen does not have sufficient notice of the basis
of his penalty, and the Commission does not have the
necessary foundation to determine whether the penalty was
appropriate. Sellersburg, 5 FMSHRC at 292-93.
Accordingly, we vacate the penalties assessed against
Ambrosia and Steen and remand for reassessment consistent
with this decision.
III.
Conclusion
For the foregoing reasons, we affirm the judge's
determination that Ambrosia violated section 77.404(a), that
the violation was S&S and resulted from Ambrosia's
unwarrantable failure, and that Steen is liable under
section 110(c) of the Mine Act for knowingly authorizing the
violation. We vacate the penalties assessed against
Ambrosia and Steen and remand for reassessment.
Mary Lu Jordan, Chairman
Marc Lincoln Marks,
Commissioner
James C. Riley, Commissioner
**FOOTNOTES**
[1]: Commissioner Holen participated in the consideration
of this matter, but her term expired before issuance of this
decision. Pursuant to section 113(c) of the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. � 823(c), this panel of three
Commissioners has been designated to exercise the powers of the
Commission.
[2]: 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.
[3]: The S&S terminology is taken from section 104(d)(1)
of the Act, 30 U.S.C. � 814(d)(1), which distinguishes as more
serious in nature any violation that "could significantly and
substantially contribute to the cause and effect of a . . . mine
safety or health hazard . . . ."
[4]: The unwarrantable failure terminology is taken from
section 104(d)(1) of the Act, which establishes more severe
sanctions for any violation that is caused by "an unwarrantable
failure of [an] operator to comply with . . . mandatory health
or safety standards . . . ."
[5]: Section 110(c) provides in part:
Whenever a corporate operator violates a
mandatory health or safety standard . . . ,
any . . . agent of such corporation who
knowingly authorized, ordered, or carried out
such
violation . . . shall be subject to the same
civil penalties . . . that may be imposed
upon a person under subsections (a) and (d).
30 U.S.C. � 820(c).
[6]: The hearing of this case is transcribed in two
volumes. The first volume, covering June 28, 1994, shall be
referred to as "I-Tr." and the second, covering June 29, as "II-
Tr."
[7]: The judge visited the mine between the first and
second day of the hearing. II-Tr. 10. He advised the parties
that any observations that he made could be included in his
findings, and that the parties could propose findings based upon
what they considered to be reasonable observations. Id. at 10-
11.
[8]: The Commission is bound by the substantial evidence
test when reviewing an administrative law judge's factual
determinations. 30 U.S.C. � 823(d)(2)(A)(ii)(I). "Substantial
evidence" means "such relevant evidence as a reasonable mind
might accept as adequate to support [the judge's] conclusion."
Rochester & Pittsburgh Coal Co., 11 FMSHRC 2159, 2163 (November
1989) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229
(1938)). While we do not lightly overturn a judge's factual
findings and credibility resolutions, neither are we bound to
affirm such determinations if only slight or dubious evidence is
present to support them. See, e.g., Krispy Kreme Doughnut Corp.
v. NLRB, 732 F.2d 1288, 1293 (6th Cir. 1984); Midwest Stock
Exchange, Inc. v. NLRB, 635 F.2d 1255, 1263 (7th Cir. 1980). We
are guided by the settled principle that, in reviewing the whole
record, an appellate tribunal must also consider anything in the
record that "fairly detracts" from the weight of the evidence
that supports a challenged finding. Universal Camera Corp. v.
NLRB, 340 U.S. 474, 488 (1951).
[9]: Ambrosia also argues that collision was unlikely
because the highlift was noisy, which would warn a pedestrian of
its approach, the highlift could stop a distance of eight to ten
feet moving forward or ten to twelve feet moving backward by
dropping its bucket, and the highlift could be turned. A. Br. at
27-28. As support for these assertions, Ambrosia cites the visit
that the judge made to the mine. Because the judge did not
include his observations from that visit in his decision, and no
evidence was introduced at the hearing establishing those
allegations, they are not part of the official record. 30 U.S.C.
� 823(d)(2)(C); see II-Tr. 10-11.
[10]: Although Ambrosia also argues that the second Mathies
element was not established, its discussion of that issue relates
to the third Mathies element. See A. Br. 26-28.
[11]: Ambrosia conceded as much in arguing that there was
little likelihood of injury in part because the highlift "could
stop in a distance of eight to ten feet moving forwards or ten to
twelve feet moving backwards by means of dropping the bucket."
A. Br. at 28. See n.9.
[12]: We also find evidence that Steen held himself out as
the employee in charge at the mine and signed official MSHA
documents as the mine foreman relevant by analogy to common law
agency principles. See R&P, 13 FMSHRC at 195 (finding analogous
support in common law agency principles). At common law, a
principal is liable for the acts of an agent that are apparently
within the agent's authority and which the principal permits the
agent to exercise.
3 Am Jur 2d Agency �� 78, 79 (1986). A "principal may vest his
agent with apparent authority to perform an act by omission as
well as commission, and such authority is implied where the
principal passively permits the agent to appear to a third person
to have authority to act on his behalf." Id. at � 79. There is
no record evidence that Ambrosia took any actions to demonstrate
that Steen did not, in fact, possess authority as the person in
charge at the mine.
[13]: Steen testified that he mistakenly failed to make an
entry for June 1. II-Tr. 23.
[14]: The judge found that Steen's status as a certified
mine examiner was relevant to his status as an agent for
unwarrantable failure purposes, but not for purposes of Steen's
liability under section 110(c). 16 FMSHRC at 2299 n.1, 2300 n.2.
The judge reasoned that the Secretary failed to allege in his
penalty proposal or prehearing statements that he considered
Steen an agent under section 110(c) because he was a certified
mine examiner and that, accordingly, Steen had been deprived of
timely notice of the theory. Id. at 2300 n.2. In arguing on
review that Steen was an agent subject to liability under section
110(c), the Secretary relies upon evidence that Steen was a
certified mine examiner. S. Br. at 34. Even excluding Steen's
function as a certified mine examiner, we conclude that
substantial evidence supports the judge's determination that
Steen was an agent for section 110(c) purposes.
[15]: Section 110(i) sets forth six criteria for assessment
of penalties under the Act.
The Commission shall have authority to
assess all civil penalties provided in [the
Act]. In assessing civil monetary penalties,
the Commission shall consider the operator's
history of previous violations, the
appropriateness of such penalty to the size
of the business of the operator charged,
whether the operator was negligent, the
effect on the operator's ability to continue
in business, the gravity of the violation,
and 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).
[16]: We hereby vacate any references in the judge's
decision to alleged wrongdoing by Shick.
[17]: As recognized in the legislative history of the Mine
Act, the purpose of civil penalties is to "convinc[e] operators
to comply with the Act's requirements." S. Rep. No. 181, 95th
Cong., 1st Sess. 45 (1977), reprinted in Senate Subcommittee on
Labor, Committee on Human Resources, 95th Cong., 2d Sess.,
Legislative History of the Federal Mine Safety and Health Act of
1977, at 633 (1978). See also Consolidation Coal Co., 14 FMSHRC
956, 965 (June 1992) (recognizing importance of civil penalties
as deterrence).