Secretary of Labor v. Alcoa World Alumina, LLC

Plain-English summary

A contractor employee was severely burned by caustic liquid while a crew cleared a blocked pipe at Alcoa's alumina plant. Alcoa accepted three S&S violations but disputed high negligence and unwarrantable failure. The Commission affirmed findings that Alcoa employee Steven Alvarado was not acting as an operator agent during the work. Although a supervisor told him to “keep an eye” on the contractors, substantial evidence showed that Alvarado lacked supervisory authority, did not direct the work, and performed functions similar to other rank-and-file miners. The Secretary's alternative theory that Alcoa was aggravatedly negligent for failing to assign a supervisor had not been pleaded or tried, so the Commission declined to consider it. The reduced negligence findings, removal of unwarrantable-failure designations, and $6,224 total penalty remained intact.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 56.14105, 56.15006, and 56.11001
• Outcome: The ALJ's low and moderate negligence findings and removal of all unwarrantable-failure designations were affirmed.
• Key point: Agency under the Mine Act turns on the employee's actual function and authority, and a new negligence theory cannot be introduced for the first time on appeal without notice to the operator.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE NW, SUITE 520N

WASHINGTON,
DC 20004-1710        

SECRETARY OF LABOR,                           
 :                         

MINE SAFETY AND HEALTH                    :                   

ADMINISTRATION (MSHA)                     
 :        Docket Nos.   CENT 2015-128

:                                CENT
2015-365

v.                                                :                                CENT
2015-401

:

ALCOA WORLD ALUMINA, LLC                            :

BEFORE: Althen, Acting Chairman; Jordan, Young, and
Cohen, Commissioners

DECISION

BY THE COMMISSION:

These
proceedings arise under the Federal Mine Safety and Health Act of 1977, 30
U.S.C.           § 801 et seq. (2012) (“Mine Act”). The dockets involve an
accident that occurred at a mine operated by Alcoa World Alumina, LLC. While
employees of a contractor were attempting to clean a pipe that was blocked by a
rock-like substance (“scale”), caustic liquid began to spew from the pipe and
burned one of the contractor’s employees. Steven Alvarado, an employee of
Alcoa, was in the area watching the contractor’s employees at the time of the
accident.

The
Department of Labor’s Mine Safety and Health Administration (“MSHA”) issued a
citation and two orders to Alcoa in connection with this accident. Citation No.
8778037 asserts that the operator, by failing to ensure that a pipe was empty,
failed to block hazardous movement of liquid in the pipe. [1]
Order Nos. 8778038 and 8778039 assert that the operator failed to ensure that
all contractors were wearing proper personal protective equipment and that all
contractors had safe access to the piping system. MSHA designated all three charged
violations as significant and substantial (“S&S”). [2]
MSHA also designated the alleged violations as resulting from the operator’s
high negligence and unwarrantable failure to comply with mandatory safety
standards. [3]
MSHA claimed that Alcoa’s employee Alvarado supervised the contractors and was
an agent of Alcoa during the accident and alleged violations.

Alcoa
did not dispute the existence of the three violations, or that they were
S&S, but did argue that the violations were not the result of high
negligence and unwarrantable failure. After a hearing on the merits, a
Commission Administrative Law Judge determined that Alvarado was not an agent
of Alcoa because he did not supervise the contractors during the accident. Therefore,
the Judge did not impute Alvarado’s conduct to Alcoa when assessing the
operator’s negligence and determining whether there was an unwarrantable
failure. 39 FMSHRC 128, 147 (Jan. 2017) (ALJ). He ruled that none of the
violations was the result of the operator’s unwarrantable failure, reduced the
negligence determination for each violation, and significantly lowered the
penalties.

The Secretary petitioned the Commission to review the Judge’s decision.
On appeal, the Secretary contends that the Judge erred in finding that Alvarado
was not Alcoa’s agent. The Secretary also argues, in the alternative, that if
Alvarado was not an agent, Alcoa’s failure to designate someone to supervise
the contractors itself constituted high negligence and unwarrantable failure.

We conclude that substantial
evidence supports the Judge’s determination that Alvarado was not an agent of
the operator in connection with the accident. We further conclude that the
Secretary did not properly raise his alternative argument. Therefore, we affirm
the Judge’s findings as to negligence and unwarrantable failure for the
citation and orders.

I.                   

Factual Background

Alcoa operates an alumina plant in Texas. Alumina is used to produce
aluminum metal. Alcoa’s facility extracts alumina from bauxite. As part of this
process, pipes in the press building transport liquid bauxite to presses. [4]
While the liquid bauxite travels through the pipes, it cools and hardens. The
hardening of the bauxite can result in scale, a rock-like substance, building
up within the pipes. To clean scale, the operator removes pipes from the
production process, drains liquid from within the pipes, locks and tags out the
piping system, and treats the pipes with a caustic solution (referred to simply
as “caustic”). 39 FMSHRC at 139-40.

During caustic cleaning, two metal plates—a blind plate and a Dutchman
plate—are placed at opposite ends of a T-pipe. The T-pipe is then connected to
two risers. [5]
The blind, a round metal plate, is placed in the T-pipe to stop the flow of
caustic into the riser which remains in production. The Dutchman, a metal plate
with a hole, is placed in the T-pipe to allow caustic to flow into the riser
designated for cleaning. Once the first pipe has been cleaned, the caustic is
transferred to the second pipe through a blind swap, a process by which the
blind plate swaps positions in the T-pipe with the Dutchman. Before performing
a blind swap, the pipes at issue must be empty, the T-pipe connecting them must
be removed, and the piping system must be locked and tagged out. After the
blind swap is complete, the second pipe is then cleaned with the caustic. Id.
at 141.

Alcoa periodically uses a contractor, Turner Industries, for certain
tasks. On the morning of September 3, 2014, three contractor employees of
Turner—Rusty Morales, Dominic Cano, and Leo Gaytan—arrived at the mine to
perform a blind swap, i.e. , a transfer of caustic, between Riser 27,
which had just been cleaned, and Riser 25. Upon arriving, the contractors met
with Jeff McCaskill, an Alcoa supervisor, and discussed the hazards presented by
the task. Employees of Alcoa, including McCaskill, drained, locked, and tagged
out the piping system because contractors were not authorized to lock out/tag
out pipes. McCaskill also told Alcoa employee Steven Alvarado “to keep an eye”
on the contractors while they performed the blind swap. [6]
McCaskill then left the mine around lunchtime. Tr. 130, 309; 39 FMSHRC at 142-43,
145.

Following McCaskill’s departure, Morales, Cano, and Gaytan went to the
press building. Alvarado reviewed the isolation points for the piping system
with Morales prior to the blind swap. The contractors then removed the relevant
T-pipe and blind only to discover that a chunk of scale was blocking the
opening to Riser 25. Cano and Gaytan began to jackhammer the scale to remove it
from the pipe. [7]
While jackhammering, Gaytan used a stand. Cano, however, did not use the stand
but knelt directly on the piping system. At some point, the jackhammer broke
through and created a hole in the scale. Alvarado, who was standing nearby,
noticed liquid spewing from this hole and shouted to Cano and Gaytan to stop
jackhammering. At this moment, Morales, who was not wearing proper personal
protective equipment, was struck in the back by the leaking liquid and severely
burned. Alvarado immediately pulled Morales into a chemical safety shower to
rinse off the liquid. Tr. 384-85; 39 FMSHRC at 143-44.

After
investigating the accident, MSHA issued the citation and orders to Alcoa. MSHA
designated all three violations as S&S. MSHA also designated these
violations as resulting from Alcoa’s high negligence and unwarrantable failure,
in part because MSHA asserted Alvarado was an agent of Alcoa and therefore
imputed his conduct to the operator.

Citation
No. 8778037 was issued because liquid in a pipe was not blocked against
hazardous motion resulting in accidental burning of a contractor. MSHA alleged
that Alcoa violated 30 C.F.R. § 56.14105, which requires that “[r]epairs or
maintenance of machinery or equipment shall be performed only after the power
is off, and the machinery or equipment blocked against hazardous motion.” The
citation stated that “Alcoa’s management engaged in aggravated conduct
constituting more than ordinary negligence in that they did not verify that the
[piping] system was completely blocked against hazardous movement of liquor.” Citation
No. 8778037.

Order
No. 8778038 was issued for a failure to require Morales to use proper personal
protective equipment (“PPE”) and for Alvarado’s failure to wear proper PPE. MSHA
alleged that Alcoa violated 30 C.F.R. § 56.15006, which requires that “[s]pecial
protective equipment and special protective clothing shall be provided,
maintained . . . and used whenever hazards of process or environment, chemical
hazards, radiological hazards, or mechanical irritants are encountered in a
manner capable of causing injury or impairment.” The order stated that “Alcoa’s
management engaged in aggravated conduct constituting more than ordinary negligence
in that [an] agent was present during the work and observed the [contractor’s]
supervisor not wearing the proper equipment. The . . . agent failed to wear the
required PPE as well.” Order No. 8778038.

Order
No. 8778039 was issued for the operator’s failure to ensure that Cano, who
kneeled on the piping system while jackhammering, had safe access to Riser 25. MSHA
alleged that Alcoa violated 30 C.F.R. § 56.11001, which requires that “[s]afe
means of access shall be provided and maintained to all working places.” The
order stated:

A
miner gained access to the scaled up line by climbing on top of the [pipe] . .
. . This . . . expose[d] the miner to falling from the pipe to the concrete
floor as well as a sudden release of hot liquor from the scaled up line . . . .
Alcoa’s management engaged in aggravated conduct constituting more than
ordinary negligence in that the . . . agent observed the practice and failed to
act.

Order No. 8778039.

II.                

The
Judge’s Decision             

The
Judge noted that under the Mine Act, the conduct of an agent of the operator,
but not of a rank-and-file miner, can be imputed to the operator. The Judge
recognized that Alvarado was neither designated nor paid as a Temporary Acting
Supervisor, despite having been so designated in the past. The Judge also
recognized that when considering agency, the Commission has historically
focused on the miner’s function rather than his job title. After considering
the evidence, the Judge determined that Alvarado was not an agent, and did not
impute Alvarado’s conduct to Alcoa for purposes of negligence and unwarrantable
failure. 39 FMSHRC at 135, 145-47.

First, the Judge considered whether McCaskill delegated supervisory
authority when he instructed Alvarado to “keep an eye” on the contractors. The
Judge credited Inspector Brett Barrick’s testimony that it is normal for a
supervisor to instruct rank-and-file employees to “keep an eye” on contractors.
The Judge also credited Alvarado’s testimony that instead of serving as an
agent, he was merely present in the area because he had a task to complete
(cleaning Riser 25 with caustic) following the blind swap. Therefore, the Judge
found that McCaskill’s instruction did not delegate supervisory authority. Tr. 337-40,
403; 39 FMSHRC at 145.

Second, the Judge considered whether Alvarado’s tag-out authority
indicated supervisory authority. The Judge recognized that Alvarado, in
contrast to the contractors, possessed authority to tag out certain equipment. However,
the Judge determined that the Secretary failed to show that Alvarado’s tag-out
authority (“Level 2” tag-out authority) differed from that of other rank-and-file
miners employed by the operator. Therefore, the Judge concluded that Alvarado’s
tag-out authority did not indicate supervisory authority. 39 FMSHRC at 145-46.

Third, the Judge considered the testimony of the Turner employees
regarding Alvarado’s status. Morales testified that he perceived Alvarado to be
a supervisor and that McCaskill had designated Alvarado as the supervisor for
the blind swap. However, the Judge noted that Morales had filed a lawsuit
against Alcoa and Alvarado as a result of injuries Morales suffered from the
accident. Therefore, the Judge determined that Morales would have an incentive
to blame Alvarado for his injuries by testifying that Alvarado had supervisory
responsibility. The Judge also noted that Morales’ testimony was contradicted
by the testimony of other witnesses. For these reasons, the Judge discredited
Morales’ testimony regarding Alvarado’s supervisory status. Id. at 146.

In addition, the Judge discredited Gaytan’s testimony that he perceived
Alvarado to be “in charge” of the contractors. The Judge found that Gaytan
perceived Alvarado to be a supervisor merely because Alvarado had reminded
Gaytan to remove scale from the piping system. The Judge dismissed Gaytan’s
testimony because Gaytan was already aware of this assignment prior to Alvarado’s
instruction. Id. at 147.

Gaytan
also testified that Alcoa would normally assign one of its employees to
supervise the blind swap. However, the Judge noted testimony to the contrary by
Dwayne Maly, the training superintendent of Alcoa, who testified that Alcoa normally
would not assign an employee to supervise this task. While the Judge did not
explicitly discredit Gaytan’s testimony regarding Alcoa’s normal practice, the
Judge ultimately concluded that Alvarado was not an agent. Id. at
145-47.

Because
the Judge concluded that Alvarado was not acting as an agent of Alcoa during
the time in question, he did not impute Alvarado’s conduct to Alcoa for
purposes of the operator’s negligence and unwarrantable failure. The Judge
further disagreed with the MSHA inspector that the violations were a result of
the operator’s high negligence and unwarrantable failure. The Judge found that
the operator exhibited low negligence for Citation No. 8778037 and Order No.
8778038, and moderate negligence for Order No. 8778039, and that none of the
violations resulted from the operator’s unwarrantable failure. [8]
Id. at 147, 163-64.

III.             

Disposition

A.    
Substantial evidence
supports the conclusion that Alvarado was not an agent of the operator in
connection with the relevant violations.

1. Citation No. 8778037

The
citation alleges that the operator failed to ensure that Riser 25 was properly
drained and empty. MSHA designated the citation as resulting from high
negligence and an unwarrantable failure. In making these assertions, the
Secretary seeks to impute Alvarado’s conduct to the operator, arguing that
Alvarado, a rank-and-file employee, supervised contractors from Turner on
September 3, 2014. However, the citation, which by its terms only involves
conduct by Alcoa’s employees in draining the pipe and tagging out the piping
system, does not encompass any conduct by the contractors. [9]

Furthermore,
there is no evidence that any of the employees from Turner, who lacked tagging
authority, assisted the operator’s employees in draining and tagging out the
piping system, and thus the issue of Alvarado’s alleged supervisory role during
the subsequent blind swap is not relevant. Accordingly, there is no basis for
the Secretary’s imputation of Alvarado’s actions to the operator based on the
allegation that he supervised the contractors. [10]

At
trial, the Secretary argued that the operator was highly negligent because it
failed to use special 3x2 drains or flush verification (flushing pipe with
water) when draining Riser 25. While the Judge found that the operator was
negligent in failing to use special 3x2 drains and flush verification for Riser
25, he concluded that such failures reflected low rather than high negligence
because flush verification would not have prevented the accident, and the
operator reasonably believed that flush verification was unnecessary. 39 FMSHRC
at 151-52. The Secretary has not challenged these findings on appeal. Therefore,
we cannot consider them here.

2. Order Nos. 8778038 and 8778039

Order
No. 8778038 was issued because a contractor, Morales, failed to wear proper personal
protective equipment. Order No. 8778039 was issued because a Turner employee,
Cano, unsafely knelt on a pipe while jackhammering scale. Each order alleges
that Alcoa engaged in aggravated conduct because an agent (Alvarado) observed
the violative conduct but failed to take action. MSHA designated both orders as
resulting from the operator’s high negligence and unwarrantable failure, in
part because MSHA imputed Alvarado’s conduct to Alcoa. However, the Judge determined
that Alvarado was not an agent of the operator. This finding is supported by
substantial evidence. [11]

Section
3(e) of the Mine Act defines an “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) . In determining whether a
miner was an agent of the operator, the Commission has focused on the miner’s
function rather than his job title. REB Enterprises Inc. , 20 FMSHRC 203,
211 (Mar. 1998). A Judge must make a
factual determination when assessing whether the miner’s function reflected
supervisory responsibility. Martin Marietta Aggregates , 22 FMSHRC
633, 639 (May 2000).

The
Secretary argues that the Judge ignored certain evidence that Alvarado
supervised the Turner employees and thus acted as an agent for Alcoa. In
particular, the Secretary claims that the Judge ignored McCaskill’s instruction
that Alvarado “keep an eye” on the contractors, and Gaytan’s testimony that
Alvarado observed and instructed the contractors.

We conclude
that the Judge did consider these circumstances when determining Alvarado’s
supervisory status. 39 FMSHRC at 145-47. The Judge found that McCaskill’s
instruction did not delegate supervisory authority to Alvarado. Specifically, the
Judge credited Alvarado’s testimony that he was in the vicinity of the contractors
not to supervise them but simply because he needed to insert caustic into Riser
25 after the blind swap had been completed. Tr. 403, 459; 39 FMSHRC at 145. We
find no reason to set aside the Judge’s decision to credit Alvarado’s
explanation for why he was near the contractors.

The
Judge explained why he discredited the contradictory testimony of the Turner
employees. [12]
Morales testified that Alvarado supervised the contractors following
McCaskill’s departure from the mine. The Judge discredited his testimony
because the Judge found that Morales, who had filed a lawsuit against Alvarado
as a result of the accident, had an incentive to place supervisory responsibility
on Alvarado. Gaytan testified that Alcoa’s normal practice was to assign one of
its employees to supervise the blind swap. However, the Judge implicitly
credited the contradictory testimony of Maly, Alcoa’s training supervisor, that
Alcoa normally does not assign one of its employees to supervise a blind swap,
but trusts the contractors to complete the assigned task. We find no reason to
set aside the Judge’s credibility determinations. [13]
Tr. 164; 39 FMSHRC at 146-47.

The Judge
further recognized that the Secretary had failed to show that Alvarado’s tag-
out authority differed from that of other rank-and-file miners. 39 FMSHRC at
145-46. The substantial evidence standard is met where the record is not
“wholly barren of evidence” to sustain the Judge’s finding. Consolidated
Edison Co. v. NLRB , 305 U.S. 197, 229 (1938)). We conclude that the record
supports his finding that Alvarado’s authority was no different than that of
any other rank-and-file miner.  

Therefore,
we conclude that the Judge’s determination that Alvarado was not an agent of
Alcoa during the accident on September 3, 2014, is supported by substantial
evidence.

B.     
The Secretary failed to
properly raise his alternative argument that Alcoa’s failure to assign a
supervisor to oversee the blind swap itself constituted high negligence and
unwarrantable failure.

On
appeal, the Secretary argues that even if Alvarado were not an agent, the
operator’s failure to assign a supervisor for these violations itself indicated
high negligence and unwarrantable failure. Therefore, the Secretary maintains,
even if Alvarado were not an agent, we must remand the Judge’s negligence and
unwarrantable failure findings.

Although the Commission
liberally provides leave to amend citations and orders, Cyprus Empire Corp. ,
12 FMSHRC 911, 916 (May 1990), the Secretary never availed himself of
the opportunity to add this alternative theory of negligence to the pleadings. Similarly,
counsel for the Secretary did not present the theory at the hearing.

Because the Secretary
failed to present the alternative theory of negligence at trial, the operator
lacked sufficient notice of the charges to mount a defense against them. Due to
the Secretary’s failure, we decline to consider this alternative theory at this
stage of the proceeding. See Black Beauty Coal Co. ,
37 FMSHRC 687, 693-95 (Apr. 2015); Oak Grove Res., LLC , 33 FMSHRC 2657,
2664 (Nov. 2011); Beech Fork Processing, Inc. , 14 FMSHRC 1316, 1321
(Aug. 1992).

IV.             

Conclusion

In
the absence of this alternative argument, we are limited to considering only
the agency argument made by the Secretary below. Upon reviewing the evidence in
the record, we conclude that substantial evidence supports the Judge’s
determination that Alvarado was not an agent of the operator in connection with
the accident on September 3, 2014. Therefore, we affirm the Judge’s findings that
Citation No. 8778037 and Order No. 8778038 involved low negligence while Order
No. 8778039 involved moderate negligence. We also affirm his determination that
none of the violations were a result of Alcoa’s unwarrantable failure to comply
with safety standards.

/s/
William I. Althen

William I.
Althen, Acting Chairman

/s/ Mary
Lu Jordan

Mary Lu
Jordan, Commissioner

/s/
Michael G. Young

Michael G.
Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen, Jr.,
Commissioner

[1] This citation, initially issued as an order, was
subsequently modified by MSHA to a citation. Citation No. 8778037-02.

[2] Th e S&S terminology is taken from section 104(d)(1)
of the Mine Act, 30 U.S.C.

§ 814(d)(1), which
distinguishes as more serious any violation that “could significantly and
substantially contribute to the cause and effect of a . . . mine safety or
health hazard.”

[3] Th e unwarrantable failure terminology is taken from
section 104(d)(1) of the Mine Act, 30 U.S.C. § 814(d)(1), 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.”

[4] Presses are long tube-shaped devices with a series of
screens that capture and filter solid materials like sand and mud from the
slurry. 39 FMSHRC at 140 n.11.

[5] The pipes that connect to presses are referred to as
risers. 39 FMSHRC at 140.

[6] Although Alvarado had served as a Temporary Acting
Supervisor (“TAS”) in the past, McCaskill did not designate Alvarado as an
acting supervisor on the day of these events. 39 FMSHRC at 145.

[7] Alvarado had previously reminded Gaytan to remove
scale from the pipe. Tr. 384.

[8] At the end of his decision, the Judge reduced the
total penalty for these three violations from $69,831 to $6,224, partially due
to his negligence and unwarrantable failure findings. 39 FMSHRC at 162-63.

[9] The record indicates that three employees of Alcoa—McCaskill,
Alvarado, and Rudy Pena—were involved in isolating the piping system at issue
and draining the pipes. Tr. 412, 414-18.

[10] The Judge found that although Gaytan mentioned a leak
from the line when Alvarado was nearby, “[i]t was not established that Alvarado
knew that the system was not properly verified.” 39 FMSHRC at 154. The
Secretary has not challenged that finding, and so even if Alvarado were an
agent, he had no knowledge to impute to the operator.

[11] When reviewing a Judge’s factual determinations, the
Commission is bound by the terms of the Mine Act to apply the substantial
evidence test. 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 (Nov. 1989) (quoting Consolidated Edison Co. v. NLRB ,
305 U.S. 197, 229 (1938)). Substantial evidence has been found to be more than
a scintilla, but less than a preponderance of the evidence. Dynamic Energy,
Inc. , 32 FMSHRC 1168, 1173 (Sept. 2010) (citing Richardson v.
Perales , 402 U.S. 389, 401 (1971) ). The
Commission has recognized that the “possibility of drawing two inconsistent
conclusions from the evidence does not prevent an administrative agency’s
finding from being supported by substantial evidence.” Id. (quoting Sec’y
on behalf of Wamsley v. Mutual Mining, Inc. , 80 F.3d 110, 113 (4th
Cir. 1996)).

[12] When evaluating evidence, we have stated that
“credibility determinations reside in the province of the administrative law
judge’s discretion, are subject to review only for abuse of that discretion,
and cannot be overturned lightly.” Dynamic , 32 FMSHRC at 1174.

[13] In addition, Gaytan testified that he perceived
Alvarado to be a supervisor because Alvarado instructed him to remove scale
from a pipe. The Judge discounted this testimony, finding that Gaytan was aware
that he needed to remove scale prior to Alvarado’s instruction. In essence, the
Judge implied that Alvarado’s reminder to Gaytan to complete a preexisting
assignment did not indicate that Alvarado exercised supervisory authority. 39
FMSHRC at 147.  Under the deferential standard governing the review of
credibility determinations, see supra note 12, we do not disturb this
finding.