Harold Moody, employed by Grand River Quarry, Inc.

Plain-English summary

Grand River Quarry used a modified Caterpillar 631 scraper on an elevated roadway whose berm was below the required mid-axle height. The Commission held that general manager Harold Moody had reason to know the berm was inadequate because he controlled quarry operations, visited the quarry daily, and traveled the roadway. It reversed the ALJ's finding that Moody was not individually liable under section 110(c) of the Mine Act. The Commission remanded the case for reassignment and assessment of a civil penalty against Moody.

Decision snapshot

• Cited provisions: 30 C.F.R. § 56.9300(b), 30 U.S.C. § 820(c), 30 U.S.C. § 823(d)(2)(A)(ii)(I), and 29 C.F.R. § 2700.75(a)(1)
• Outcome: The finding that Moody was not individually liable was reversed, and the matter was remanded for reassignment and civil-penalty assessment.
• Key point: A corporate agent can face individual Mine Act liability when the agent is in a position to protect safety, knows or has reason to know of a violation, and fails to act.

Full text (FMSHRC public release)

[DOCID: f:moodyfd.wais]

HAROLD MOODY, employed by GRAND RIVER QUARRY, INC.
April 30, 1997
CENT 95-214-M

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1730 K STREET NW, 6TH FLOOR

WASHINGTON, D.C. 20006

April 30, 1997

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. CENT 95-214-M
:
HAROLD MOODY, employed by :
GRAND RIVER QUARRY, INC. :

BEFORE: Jordan, Chairman; Marks, Riley and Verheggen,
Commissioners

DECISION

BY THE COMMISSION:

This civil penalty proceeding arises 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 substantial evidence
supports former Commission Administrative Law Judge Arthur
Amchan's determination that the Secretary of Labor did not satisfy
his burden of establishing that Harold Moody was individually
liable under section 110(c) of the Mine Act,[1] 30 U.S.C. § 820(c),
for Grand River Quarry, Inc.'s violation of 30 C.F.R. § 56.9300(b).[2]
18 FMSHRC 67 (January 1996) (ALJ). The Commission granted the
Secretary's petition for discretionary review challenging this
determination. For the reasons that follow, we reverse and remand
for assessment of a civil penalty.

FOOTNOTES

[1]: Section 110(c) provides:

Whenever a corporate operator violates a
mandatory health or safety standard or
knowingly violates or fails or refuses to
comply with any order issued under this [Act]
or any order incorporated in a final decision
issued under this [Act], except an order
incorporated in a decision issued under
subsection (a) or section 105(c), any
director, officer, or agent of such
corporation who knowingly authorized,
ordered, or carried out such violation,
failure, or refusal shall be subject to the
same civil penalties, fines, and imprisonment
that may be imposed upon a person under
subsections (a) and (d) of this section.

I.

Factual and Procedural Background

Grand River Quarry, Inc. ("Grand River"), a corporation, owns
the Gallatin Quarry in Davies County, Missouri. 18 FMSHRC at 68;
Tr. 18. Grand River normally used a truck to transport finished
product from its plant to a stockpile. 18 FMSHRC at 68; Tr. 33,

38. For about a year prior to the issuance of the citation, however,
    the truck broke down once or twice a month; on those occasions,
    Grand River used a Caterpillar 631 scraper that had been modified
    for use as a haul truck. 18 FMSHRC at 68; Tr. 109-10. The front
    tires of the 631 are 84 inches high. 18 FMSHRC at 68. Travel from
    the plant to the stockpile was on an elevated roadway that is
    approximately 150 feet long at a 35% downgrade. Id.; Tr. 30; Gov't
    Ex. C.[3]

On the morning of July 21, 1994, the truck carrying finished
product to the stockpile broke down and Grand River substituted the 631
to perform this work on the elevated roadway. 18 FMSHRC at 68.
Later that day, MSHA Inspector Michael Marler, who was in the
midst of a multi-day inspection of the Gallatin Quarry, was informed
that the 631 had gone off the elevated roadway and fallen into a
drainage ditch. Id.; Tr. 27. Marler measured the berm at the
point where the 631 left the roadway and found that it was only
24 inches high. 18 FMSHRC at 68; Tr. 31. Based on the height of the
wheels on the 631 and the requirement of section 56.3900(b) that
the berm be at least mid-axle height of the largest self-propelled
mobile equipment usually using the roadway, Marler determined that
the berm should have been at least 42 inches tall. Tr. 31-32.
Accordingly, he issued Citation No. 4322450 to Grand
River, alleging a significant and substantial and unwarrantable
violation of section 56.3900(b). 18 FMSHRC at 68-69; Tr. 26-27;
Gov't Ex. A.

Following issuance of the citation, MSHA Special
Investigator Dale St. Laurent conducted a special investigation of
the accident involving the 631. 18 FMSHRC at 69. As part of his
special investigation, St. Laurent interviewed Robert Flint, the
foreman in charge of the daily operations at the quarry, and
Harold Moody, the general manager of Grand River. Tr. 66. In his
capacity as general manager, Moody had overall responsibility for the
Gallatin Quarry. Tr. 19, 73-75. Moody was at the Gallatin Quarry on
a daily basis for periods of between one and four hours, gave
directions to Flint concerning the work to be performed, and called to
check up on things. Tr. 71-72, 73-75, 97.

At the hearing, Flint testified that the berms were kept low
because the landowner wanted to keep free of debris a ditch that
runs along the side of the roadway and drains 800-900 acres of land
upstream from the quarry. Tr. 103-04. Flint also testified that the
berms had been higher before issuance of the citation, but had
been reduced in height by "hard rain" and "floods." 18 FMSHRC at
70; Tr. 104. During the special investigation, Flint told St.
Laurent that the berm had been as high as 2½ feet (30 inches). Tr.
68-69. According to St. Laurent's uncontradicted testimony, Flint
stated during the investigation that the berm had been partially
removed while the operator was working on the road, and that it
had not been replaced because the operator planned to reroute the
road and work on the ditch. Tr. 67. Flint agreed that the berm as
of the date of July 21 was insufficient to restrain the 631.
Tr. 104-05.

The loader operator, Mr. Miller, confirmed to St. Laurent
that the berm had previously been higher but had not been maintained
or replaced. Tr. 71, 76. The driver of the 631, Lynn Dunnington,
told St. Laurent that during his 4 or 5 months at the quarry the berm
had never been "of any size." Tr. 76.

According to St. Laurent's testimony, Moody told him during
the special investigation that the berm had previously been 3 feet (36
inches) high, but spring rains had washed down the berm and it was an
oversight, due to complacency, that the operator failed to return the
berm to its full height. Tr. 73.[4] St. Laurent also testified
that Moody stated he traveled the elevated roadway almost every day
he came to the mine. Tr. 74-75.

Evidence of previous history of violations introduced at the
trial shows that MSHA cited Grand River for violating section
56.9300(a) on October 6, 1992, and that a citation was issued for no
berms on a different elevated roadway on July 19, 1994, two days
before the instant citation was issued. Gov't Exs. F, G; Tr. 47-48.

The judge concluded that Flint knowingly violated section
56.9300(b) and assessed a civil penalty of $300. 18 FMSHRC at
71-72. However, he determined that the Secretary had not established
that Moody knew or should have known that a violative condition
existed on July 21, 1994. Id. at 70. He found that Moody had no
reason to know that the 631 would be driven on the elevated roadway
at times when the berm was less than 42 inches high. Id. Finding
that "Moody was not on-site on July 21," the judge held that "the
evidence does not establish that Moody knew, or had reason to know,
that [the 631] would be used on July 21." Id. Although he
concluded that Moody "had reason to know that the 631 would be used on
[the elevated] roadway periodically," the judge found that
the Secretary failed to prove that Moody knew the height of the berm
on July 21, and opined that "on July 19 the road was not used due
to bad weather, and it is quite possible that the berm was
substantially smaller on July 21 than it had been the last time
Moody had observed it." Id. (citing Tr. 52).

II.

Disposition

The Secretary argues that nothing in the record supports the
judge's finding that Moody was not present at the quarry on July 21.
S. Br. at 6-7.[5] In the alternative, the Secretary contends
that in light of Moody's overall responsibility for the quarry, his
daily visits and his direction of work activities, Moody's presence
was not required on July 21 in order to establish that he knew or
should have known of the violative condition of the berm. Id. at 7-8.
The Secretary points out that Moody "knew" that the 631 was regularly
substituted for the truck to haul finished product on the elevated
roadway. Id. at 8-9. The Secretary asserts that Moody's
admission during the special investigation that the berm was not
kept high due to oversight and complacency establishes his
knowledge of the violative condition. Id. at 9. The
Secretary further argues that, because Moody traveled the roadway
almost every day, he had reason to know that the berm was inadequate.
Id. at 10. The Secretary asserts that Moody was in a position to
protect employee safety and health and, because he failed to take
action to place the berm at its proper height, was liable under
section 110(c). Id. at 10-11.[6]

Section 110(c) of the Mine Act subjects to liability
individual corporate agents who "knowingly authorize[], order[], or
carr[y] out" a violation of a mandatory health or safety
standard. The Commission has held that actual knowledge is not
required to establish liability under section 110(c); rather, it is
sufficient if the Secretary shows that the individual knows or has
"reason to know" of the violative condition. Kenny Richardson, 3
FMSHRC 8, 16 (January 1981), aff'd on other grounds, 689 F.2d 632 (6th
Cir. 1982), cert. denied, 461 U.S. 928 (1983). Accord Freeman United
Coal Mining Co. v. Fed. Mine Safety & Health Review Comm'n, 108 F.3d
358, 362-64 (D.C. Cir. 1997). In Kenny Richardson, the Commission
held that an individual acts knowingly where he is "in a
position to protect employee safety and health [and] fails to act on
the basis of information that gives him knowledge or reason to know of
the existence of a violative condition . . . ." 3 FMSHRC at 16.
Section 110(c) liability is predicated on aggravated conduct
constituting more than ordinary negligence. BethEnergy Mines,
Inc., 14 FMSHRC 1232, 1245 (August 1992).

We note at the outset that there is no dispute that Moody,
as Grand River's general manager, is an agent of the corporate
operator within the meaning of section 110(c). Further, we read
the judge's decision as finding an underlying violation of section
59.6300(b), and we affirm that finding as supported by substantial
evidence.[7] Section 59.6300(b) requires berms to be "at least
mid-axle height of the largest self-propelled mobile equipment which
usually travels the roadway." The record establishes that the berms
were never as high as 42 inches, the mid-axle height of the 631.
Grand River's regular use of the 631 as the backup to the haul truck
for a year prior to the accident brings that vehicle within the
scope of section 56.9300(b) as a vehicle which "usually travels the
roadway."

However, substantial evidence fails to support the judge's
determination that Moody did not have reason to know of the
violative condition. The judge concluded that Moody had reason to
know that the 631 would be used on the roadway. Based on that
finding, and in view of the unchallenged testimony that Moody
visited the quarry and traveled the elevated roadway daily, we think
that the record establishes only one conclusion: that Moody had
reason to know the berm was inadequate. Contrary to the
judge's statement that "there is no basis on which I could conclude
that [Moody] knew [the 631] would be used at times when the berm was
not mid-axle height," as noted above, there is no record evidence
that the berm was ever higher than 30 to 36 inches. Thus, Moody had
reason to know that it was well below the 42 inches necessary to
reach mid-axle position on the 631,[8] and the record evidence
does not permit any conclusion other than that Moody had reason to
know that the berm would be inadequate whenever the 631 was
driven on the elevated roadway. Under this set of facts, Moody's
knowledge of the precise height of the berm on July 21 is not
dispositive of his liability under section 110(c). See Prabhu
Deshetty, 16 FMSHRC 1046, 1051 (May 1994) (finding 110(c) liability as
to employee who "was aware of ongoing spillage problem . . . that
ultimately resulted in the citation, but [who] failed to take
measures to remedy the problem").[9]

In sum, substantial evidence establishes that Moody was in a
position to protect employee safety but failed to act. Whether the
condition of the berms resulted from a deliberate decision to keep
the berms low, as Flint testified, or from oversight and complacency,
as Moody told Special Investigator St. Laurent, Moody's failure to
direct that the berm be built up, in spite of his hands-on control of
quarry operations and his reason to know of the inadequacy of the berm,
is aggravated conduct constituting more than ordinary negligence and
subjects him to liability under section 110(c). Because the
judge's conclusion to the contrary is not supported by substantial
evidence, we reverse that determination and remand to the Chief
Administrative Law Judge for reassignment[10] and assessment of
a civil penalty.[11]

FOOTNOTES

[2]: Section 56.9300 states in pertinent part:

(a) Berms or guardrails shall be
provided and maintained on the banks of
roadways where a drop-off exists of
sufficient grade or depth to cause a vehicle
to overturn or endanger persons in equipment.

(b) Berms or guardrails shall be at
least mid-axle height of the largest self-
propelled mobile equipment which usually
travels the roadway.

[3]: The 631 was normally used to transport shot
rock to a crusher from the blasting area by way of a different
roadway than the one at issue here. 18 FMSHRC at 68.

[4]: St. Laurent also testified that Moody admitted
he was aware that the 631 had gone through the same area of
the berm on an earlier occasion. Tr. 73. At the hearing,
however, Moody denied knowledge of this earlier incident.
Tr. 96-97. The judge made no finding on this point.

[5]: Pursuant to Commission Procedural Rule 75(a)(1),
29 C.F.R. § 2700.75(a)(1), the Secretary designated his
petition for discretionary review as his brief.

[6]: Moody appeared pro se before the judge and did not
file a brief on appeal.

[7]: 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)). 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).

[8]: The judge did not base his decision on a conclusion
that Moody did not know or have reason to know of the height of
the wheels on the 631.

[9]: The Secretary is also correct that Moody's presence
at the mine on July 21 is not a precondition for finding him
liable under section 110(c). See Warren Steen Constr., Inc.,
14 FMSHRC 1125, 1131 (July 1992). Accordingly, we need not
reach the question whether substantial evidence supports the
judge's finding that Moody was not present at the quarry on July 21.

[10]: Judge Amchan has transferred to another agency.

[11]: Given our disposition based on our conclusion
that Moody had reason to know of the existence of the violative
condition, we need not address the Secretary's argument that
Moody had actual knowledge of that condition.

III.

Conclusion

For the foregoing reasons, we reverse the judge's determination
that Moody is not liable under section 110(c) of the Act for knowingly
authorizing Grand River's violation of section 56.9300(b). Accordingly,
we remand this matter to the Chief Administrative Law Judge for
reassignment and assessment of a civil penalty.

Mary Lu Jordan, Chairman

Marc Lincoln Marks, Commissioner

James C. Riley, Commissioner

Theodore F. Verheggen, Commissioner