Apex Quarry, LLC

Plain-English summary

Apex Quarry admitted a group of S&S equipment violations involving a torn seat belt, an ineffective parking brake, a damaged windshield, unsafe truck access, and nonworking horns or backup alarms. The parties agreed to several gravity and negligence modifications that reduced the proposed penalties. Apex challenged only its ability to pay and remain in business, but it submitted unaudited tax returns and limited financial records rather than the audited statements the judge requested. Judge Thomas P. McCarthy found that Apex had not carried its burden of proving that the reduced total would threaten the business. He affirmed the citations as modified, assessed $9,791, and allowed payment in 60 monthly installments of $163.18.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 56.11001, 56.14101(a)(2), 56.14103(a), 56.14130(i), and 56.14132(a)
• Outcome: The equipment citations were affirmed as modified, with a total $9,791 penalty payable in 60 installments.
• Key point: An operator claiming inability to pay bears the burden of proof, and unaudited financial records may be insufficient when the judge requests audited statements.

Full text (FMSHRC public release)

FMSRHC ALJ DECISION

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

601 NEW JERSEY AVENUE, N.W., SUITE 9500

WASHINGTON, DC 20001-2021

TELEPHONE: 202-434-9958 / FAX: 202-434-9949

December 20, 2011

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA),

Petitioner

v.

APEX QUARRY, LLC,

Respondent

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CIVIL PENALTY PROCEEDINGS

Docket No. KENT 2009-10-M

A.C. No. 15-18478-162708

Mine: Apex Quarry, LLC

DECISION AND ORDER

Appearances:              Angele Gregory Esq., and Elizabeth L. Friary, Esq., U.S. Department of
Labor, Office of the Solicitor, Nashville, Tennessee for Petitioner

Todd Harris, pro se, White Plains, Kentucky for Respondent

Before:                        Judge McCarthy

This case is before me upon a petition for civil penalties filed by the Secretary of Labor
pursuant to section 105 of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §§ 815
(the Mine Act), charging Respondent, Apex Quarry, LLC (Apex) with seven section 104(a)
significant and substantial

violations of mandatory safety standards and seeking a total civil
penalty of $19,632.00 for those violations. At the hearing on June 21, 2011, the parties
stipulated to certain amended citations and stipulated that Respondent would accept other
citations as written. With regard to the amended citations, the Secretary agreed to reduce the
proposed penalty amounts in accordance with the formula set forth in 30 C.F.R. Part 100.3 of the
Mine Act. Tr. 3 Respondent, through its pro se owner, Todd Harris, admitted the violations and
the findings relating thereto, as modified at the hearing or as originally written, and challenged
only the amount of civil penalties proposed by the Secretary in the seven citations at issue,
claiming that it was unable to pay them and remain in business.

Citation Number 7752070

This citation alleges a violation of the standard at 30 C.F.R. § 56.14130(i) and charges as
follows:

The mine operator has not maintained the seat belt in the
Caterpillar 988B FEL. The four inch wide seat belt is torn in half
on the female side of the waste strap. The front end loader is
presently being used to load customer trucks from the stock pile
area. This condition creates a hazard of a miner not being properly
restrained within the operator’s station of the front end loader.

The cited standard, 30 C.F.R. § 56.14130(i), provides that “[s]eat belts shall be
maintained in functional condition, and replaced when necessary to assure proper performance.”

The citation is alleged to be significant and substantial, with one person affected, and
moderate negligence. The gravity of the original citation was modified at the hearing from
reasonably likely to result in an injury that could be fatal to reasonably likely to result in an injury
that could be permanently disabling. The parties stipulated to the findings in the citation, as
modified. Based on the gravity modification from fatal to permanently disabling, the proposed
penalty amount was reduced from $2,106 to $946. Tr. 8-9.

Citation Number 7752071

This citation alleges a violation of the standard at 30 C.F.R. § 56.14101(a)(2) and charges
as follows:

The parking brake provided on the Caterpillar 988B FEL is not
maintained in a functional condition. When tested on the maximum
grade of travel the parking brake would not hold the front end loader in
place. The front end loader is presently being used to load customer
trucks from the stock pile area. This condition creates a hazard of a
miner being struck by/ran over by moving equipment.

The cited standard, 30 C.F.R. § 56.14101(a)(2), provides that “[i]f equipped on self-propelled mobile equipment, parking brakes shall be capable of holding the equipment wit its
typical load on the maximum grade it travels.”

The citation is alleged to be significant and substantial, with one person affected, and
moderate negligence. The gravity of the original citation was modified at the hearing from
reasonably likely to result in an injury that could be fatal to reasonably likely to result in an injury
that could be permanently disabling. The parties stipulated to the findings in the citation, as
modified. Based on the gravity modification from fatal to permanently disabling, the proposed
penalty amount was reduced from $2,106 to $946. Tr. 9-11.

Citation Number 7752073

This citation alleges a violation of the standard at 30 C.F.R. § 56.14103(A) and charges
as follows:

The bottom portion of the front wind shield on the Caterpillar 235
excavator is broken and cracked for it’s entire portion. The excavator
is normally used at the strip area of the mine to remove overburden
material. Also inside the operator’s station of the excavator the glass
has created ruff and sharp edges. This condition creates a hazard of a
miner having poor visibility of operation of the machine.

The cited standard, 30 C.F.R. § 56.14103(a), provides that “[i]f windows are provided on
operators’ stations of self propelled mobile equipment, the windows shall be made of safety glass
or material with equivalent safety characteristics. The windows shall be maintained to provide
visibility for safe operation.”

The citation is alleged to be significant and substantial, with one person affected, and
high negligence. The gravity of the original citation was modified at the hearing from reasonably
likely to result in an injury that could be fatal to reasonably likely to result in lost work days or
restricted duty. The parties stipulated to the findings in the citation, as modified, but agreed to
leave the citation as significant and substantial. Based on the gravity modification from fatal to
lost work days or restricted duty, the proposed penalty amount was reduced from $6,996 to
$2,106. Tr. 11-12.

Citation Number 7752074

This citation alleges a violation of the standard at 30 C.F.R. § 56.11001 and charges as
follows:

Safe access is not provided to the operator’s station of the “older”
Wabco haul truck. The second step upon (within the truck’s bumper)
is bent out of shape, making it difficult to get up to the operator’s
station. This truck is used on a regular basis to haul material from the
pit area to the plant area of the mine. This condition creates a hazard
of a miner slip/ trip/ falling off the truck and onto the ground.

The cited standard, 30 C.F.R. § 56.11001, provides that “[s]afe means of access shall be
provided and maintained to all working places.”

The citation is alleged to be significant and substantial, with gravity reasonably likely to
result in lost work days or restricted duty, one person affected, and high negligence. The parties
stipulated to the findings in the citation, but agreed to modify negligence from high to moderate.
Based on the negligence modification, the proposed penalty amount was reduced from $2,106 to
$635. Tr. 35.

Citation Number 7752075

This citation alleges a violation of the standard at 30 C.F.R. § 56.14132(a) and charges as
follows:

The back up alarm provided on the “older” Wabco haul truck is not
maintained in a functional condition. When tested the alarm would not
sound. The truck is used on a regular basis to haul material from the
pit area to the plant area. This condition creates a hazard of a miner
being struck by/ ran over by moving equipment.

The cited standard, 30 C.F.R. § 56.14132(a), provides that “[m]anually-operated horns or
other audible warning devices provided on self-propelled mobile equipment as a safety feature
shall be maintained in functional condition.”

The citation is alleged to be significant and substantial, with gravity alleged to be
reasonably likely to result in an injury that could be fatal, one person affected, and moderate
negligence. At the hearing, Respondent agreed to accept the citation, as written. Tr. 32.
Accordingly, the proposed penalty of $2,106.00 remains unchanged. Tr. 15.

Citation Number 7752076

This citation alleges a violation of the standard at 30 C.F.R. § 56.14132(a) and charges as
follows:

The manually operated horn on the “newer” Wabco haul truck is not
maintained in a functional condition. When tested the horn would not
sound. The truck is normally used to haul material from the pit area to
the plant area. This condition creates a hazard of a miner being struck
by/ran over by moving equipment.

The cited standard, 30 C.F.R. § 56.14132(a), provides that “[m]anually-operated horns or
other audible warning devices provided on self-propelled mobile equipment as a safety feature
shall be maintained in functional condition.”

The citation is alleged to be significant and substantial, with one person affected, and
moderate negligence. The gravity of the original citation was modified at the hearing from
reasonably likely to result in an injury that could be fatal to reasonably likely to result in an injury
that could be permanently disabling. The parties stipulated to the findings in the citation, as
modified. Based on the gravity modification from fatal to permanently disabling, the proposed
penalty amount was reduced from $2,106 to $946. Tr. 16-17.

Citation Number 7752077

This citation alleges a violation of the standard at 30 C.F.R. § 56.14132(a) and charges as
follows:

The back up alarm equipped on the Mack Super Liner water truck is
not maintained in a functional condition. When tested the alarm would
not sound. The truck is used on a regular basis to water road ways at
the mine and to wash out material around the plant area. This
condition creates a hazard of a miner being struck by/ ran over by
moving equipment.

The cited standard, 30 C.F.R. § 56.14132(a), provides that “[m]anually-operated horns or
other audible warning devices provided on self-propelled mobile equipment as a safety feature
shall be maintained in functional condition.”

The citation is alleged to be significant and substantial, with gravity alleged to be
reasonably likely to result in an injury that could be fatal, one person affected, and moderate
negligence. At the hearing, Respondent agreed to accept the citation, as written. Tr. 32.
Accordingly, the proposed penalty of $2,106.00 remains unchanged. Tr. 18.

Civil Penalties

Under Section 110(i) of the Act, the Commission and its judges must consider the
following factors in assessing a civil penalty: the history of violations, the negligence of the
operator in committing the violations, the size of the operator, the gravity of the violation,
whether the violation was abated in good faith, and whether the penalties would affect the ability
to continue in business.

The Secretary’s undisputed representations in her petition establish that Respondent is
small in size and has a moderate history of prior violations. There is no dispute that the
violations herein were abated in good faith. The gravity and negligence of the violations have
been admitted by Respondent and have previously been discussed.

As noted, the Respondent claims only that the civil penalties proposed by the Secretary
would affect its ability to remain in business. This Commission has held that the mine operator
has the burden of proving such a claim. Sellersburg Stone Co., 5 FMSHRC 287, 294 (Mar.
1985).

At the end of the hearing, after questioning of Mr. Todd Harris by the Court (Tr. 40-52),
and cross examination by the Secretary (52-54), I left the record open so that Respondent could
submit the following documentation, referred to in testimony, as requested by the Court:

- audited financial statements for Apex Quarry, LLC;

- evidence of an IRS tax lien;

- evidence of a Kentucky State Treasury Department tax lien;

- the operating agreements for Apex Quarry, LLC with Mr. Leslie E.
Strong and Mr. David L. Roberts; and

- the legal document that governs the relationship between Todd
Harris Excavating, LLC and Apex Quarry LLC.

See Tr. 48, 51-52, 54-55.

The Court specifically advised Mr. Harris, based on Judge’s Melick’s decision in Johnco
Materials, Inc., Docket No. SE 2009-994M, slip. op. at 4-5 June 8, 2011 (ALJ Melick), that
audited financial statements were required to meet his burden of proof, and Mr. Harris agreed to
provide them. Tr. 38-39, 54-55. Despite the fact that the record was left open to permit
Respondent to provide audited financial statements, Respondent failed to do so.

Respondent provided a host of documents establishing past legal difficulties, judgments
and liens, but provided only unaudited tax returns from 2008, 2009, and 2010, prepared by
certified public accountants Bruce & Company, PSC, “without verification.” Furthermore,
Respondent provided minimal, unaudited financial statements, limited to an Apex Quarry, LLC
profit and loss statement from January through July 18, 2011, which shows ordinary income at a
loss of (-$4,676), and an Accounts Receivable (A/R) Aging Summary through July 18, 2011
showing accounts receivable of $16, 912.

Moreover, although Respondent has significant
taxable losses for 2008, 2009, and 2010, these losses are carried over to subsequent years and
may offset any increase in Respondent’s net operating income going forward. Further, it appears
that Respondent’s continued operation of its mining business has allowed it to continue making
payments to significant other creditors, at least on an installment basis. In these circumstances,
in the absence of audited financial statements, I find that the Respondent has failed to sustain its
burden of proving that the total reduced penalty of $9,791, particularly if payable on an extended
installment basis, would affect its ability to remain in business.

ORDER

Citation Numbers 7752070, 7752071, 7752072, 7752073, 7752074, 7753075, 7752076,
and 7752077 are AFFIRMED, AS MODIFIED, and Apex Quarry, LLC is ordered to pay a total
reduced penalty of $9,791 in 60 equal installments of $163.18, beginning on February 1, 2012
and the first day of each successive month until paid in full. If Respondent misses a payment, the
total unpaid balance will immediately become due and payable.

/s/ Thomas P. McCarthy

Thomas P. McCarthy

Administrative Law Judge

Distribution: (E-Mail and Certified Mail)

Angele Gregory, Esq., and Elizabeth L. Friary, Esq., U.S. Department of Labor, Office of the
Solicitor, 211 7th Avenue, North, Suite 420, Nashville, Tennessee 37219

Todd Harris, 1627 Cavanaugh Road, White Plaines, Kentucky 42464

/ld