Standard Gravel Company Inc.

Plain-English summary

Standard Gravel challenged MSHA jurisdiction over an off-site shop that repaired and fabricated mining equipment, with 98 percent of its work supporting the company's mines. Judge Priscilla M. Rae applied the Mine Act's broad definition of a mine and held that the shop's function made it an integral part of the mining operation despite its separate location and small amount of non-mining work. She also found that Standard Gravel had actual notice of MSHA's jurisdiction beginning with the December 2009 inspection, so later penalties did not violate fair-notice requirements. The judge granted summary decision to the Secretary, denied the company's cross-motion, and directed the parties toward settlement or a hearing.

Decision snapshot

• Cited provisions: 29 C.F.R. § 2700.67(b); Mine Act section 3(h)(1)
• Outcome: MSHA jurisdiction and fair notice were established on summary decision, with the citation cases left for settlement or hearing.
• Key point: A centralized off-site shop can be a mine when its primary function is repairing and fabricating equipment used in the operator's mining activities.

Full text (FMSHRC public release)

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

SECRETARY OF LABOR,   

MINE SAFETY AND HEALTH    

ADMINISTRATION (MSHA),  

Petitioner, 

v.

STANDARD GRAVEL COMPANY 

INC., 

Respondent. 

:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

:

CIVIL PENALTY PROCEEDINGS

Docket No. CENT 2010-1140-M

A.C. No. 000227643

Docket No. CENT 2011-818-M

A.C. No. 000254335

Docket No. CENT 2011-1115-M

A.C. No. 000263002

Docket No. CENT 2012-355-M 

A.C. No. 000277448

Mine: SGC Green Land

Mine ID: 16-01497

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 (3rd 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