Secretary of Labor v. KenAmerican Resources, Inc.

Plain-English summary

MSHA inspectors arrived at KenAmerican's underground mine to investigate an anonymous hazard complaint and expressly warned the dispatcher not to provide advance notice. An underground miner then asked whether "company" was outside, a coded reference the dispatcher understood to mean MSHA, and the dispatcher replied that he thought it was. The Commission took the unusual step of overturning the judge's credibility finding because the inspector's contemporaneous notes and testimony corroborated the affirmative response, while the judge's reasoning conflicted with other record findings. It held that intent is not required when a communication actually provides advance notice and rejected the operator's First Amendment challenge because unannounced inspections are essential to effective mine-safety enforcement. The Commission reversed the no-violation ruling and remanded for a penalty; the later ALJ decision assessed $18,742.

Decision snapshot

• Cited authority: 30 U.S.C. § 813(a)
• Outcome: The judge was reversed, an advance-notice violation was found, and the case was remanded for a penalty assessment.
• Subsequent proceeding: The remand decision in kent-2013-0211-alj assessed an $18,742 penalty.
• Key point: A coded or brief response violates the advance-notice ban when its effect is to confirm that MSHA inspectors are present, regardless of claimed intent.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004‑1710

SECRETARY
OF LABOR,                            :        

MINE
SAFETY AND HEALTH                  :                                

ADMINISTRATION
(MSHA)                     :        

:        

v.                                              
:         Docket No. KENT 2013-211

:                                                        

KENAMERICAN
RESOURCES, INC.         :

BEFORE:
Jordan, Young, Althen, and Traynor, Commissioners [1]

DECISION

BY: Jordan,
Young, Althen, and Traynor, Commissioners

This case arises under the
Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2018)
(“Mine Act” or “Act”) and concerns a citation issued by the Secretary of
Labor’s Mine Safety and Health Administration (“MSHA”) to KenAmerican
Resources, Inc. The Secretary alleges that KenAmerican’s mine-phone dispatcher
provided advance notice of an inspection in violation of section 103(a) of the
Mine Act, 30 U.S.C. § 813(a). [2]
The Secretary asserts that the mine dispatcher answered in the affirmative when
a miner underground asked “do we have any company outside?”

KenAmerican contested the
citation and the associated penalty of $18,742 before a Commission
Administrative Law Judge. Initially, KenAmerican filed a motion for summary
decision arguing that even if the Secretary’s allegations were substantiated,
the exchange did not violate section 103(a). The Judge granted summary decision
and vacated the citation after finding that the Secretary did not establish a
violation. 37 FMSHRC 1809 (Aug. 2015) (ALJ).

The Secretary filed a
petition for discretionary review, which the Commission granted. On August 25, 2016, the Commission reversed the Judge
and remanded the case with instructions that the Judge hold a hearing. 38
FMSHRC 1943 (Aug. 2016). The Commission concluded that there was a material
fact at issue, i.e., whether the cited conversation referred to an MSHA
inspection. Id . at 1951. Accordingly, the Commission held that summary
decision was improper.

On December 14, 2018, the
Judge issued a decision after a hearing, finding that the Secretary failed to
establish a violation. 40 FMSHRC 1544 (Dec. 2018) (ALJ).

The
Secretary filed a second petition for discretionary review, which we granted. On
appeal, the Secretary contends that the Judge’s factual findings and
conclusions are erroneous. We agree and reverse the Judge’s decision. 

I.

Factual and Procedural Background

KenAmerican’s
Paradise No. 9 mine is a large underground coal mine in Kentucky. On April 19,
2019, someone filed an anonymous hazard complaint regarding conditions at the
mine with MSHA pursuant to section 103(g) of the Mine Act, 30 U.S.C. § 813(g). [3]
On April 20, 2012, during the second shift, six MSHA inspectors arrived at the
portal and informed the foreman of the complaint. Two inspectors then traveled
to the dispatcher’s shack and warned Lance Holz, the dispatcher, not to provide
notice of the impending inspection. Holz called for a miner to return to the
surface with a man-trip. Meanwhile, MSHA inspector Doyle Sparks surreptitiously
monitored a mine-phone receiver from which he could hear Holz.

Sparks testified that he
overheard an underground miner from the number four unit get on the phone and
ask Holz “[d]o we have any company outside?” Tr. 23. Sparks heard Holz respond
“yeah, I think there is.” Tr. 24. Further, Sparks memorialized this
conversation in his notes. Gov. Ex. 2. [4]
Sparks asked the miner to identify himself, but received no response. Tr. 24.

Holz also testified that a
miner asked him if “company” was outside. Tr. 163-64. Importantly, he
understood the miner to be inquiring about MSHA inspectors. [5]
Tr. 164-65, 172. Therefore, he knew the question presented a request for
advance notice. Holz recalls responding “I don’t know,” but testified that it
was “possible” that he instead said “yeah, I think there is.” Tr. 163-64, 172. Holz
heard Sparks ask who was on the phone and receive no response. Tr. 166.

In
summary, Holz and Sparks both testified that an underground miner solicited
advance notice of an MSHA inspection over the mine-phone and that Holz
responded to the miner’s solicitation. Sparks asked the miner to identify
himself and was met with silence. The only material inconsistency between their
testimonies concerns the substance of Holz’s response.

The Judge determined that
Holz most likely stated “I don’t know” and thus found no advance notice. 40
FMSRHC at 1549, 1552 (“This is dispositive and ends the inquiry.”).  

The
Judge also made an alternative holding: even if Holz actually responded “[y]eah,
I think there is” the Secretary failed to prove that Holz intended to
provide advance warning of an inspection. Id . at 1554. Because Holz’s
response was intertwined with a request to procure transportation for the
inspectors, the Judge believed that even an affirmative response would not have
violated section 103(a).

On
review, the Secretary contends that the Judge erred in his articulation of the
law. The Secretary maintains that the Judge failed to properly weigh and
address the record evidence. The Secretary also alleges that the record
evidence leads to the conclusion that KenAmerican violated section 103(a).

KenAmerican maintains that
the Commission should defer to the Judge’s factual findings. In addition,
KenAmerican argues that section 103(a) regulates only the Secretary’s conduct and
is applied inappropriately in this instance. Finally, KenAmerican maintains
that the Secretary is infringing on its First Amendment rights.

II.

Disposition

A.    
The record compels the
conclusion that Holz provided an affirmative response to a request for advance
notice; the Judge abused his discretion in determining otherwise.

The outcome of this case
hinges in large part on the Judge’s determination of witness credibility. The
Judge credited Holz’s testimony that he said “I don’t know” in response to the
solicitation for advance notice. The Judge did not credit Holz’s testimony that
it was “possible” that he said “yeah, I think there is” in response, even though
this particular response was corroborated by inspector Sparks’ testimony and
his contemporaneous notes regarding what had been said. 

A Judge's decision to credit
the testimony of a witness is entitled to great weight and may not be
overturned lightly. See Farmer v. Island Creek Coal Co ., 14 FMSHRC 1537,
1541 (Sept. 1992 ) . The Commission reviews a Judge’s credibility
determinations under an abuse of discretion standard. See Jim Walter Res .,
Inc ., 37 FMSHRC 1868, 1871 (Sept. 2015). There must be “compelling
reasons” to take the “extraordinary step” of reversing a Judge’s credibility
determination. See Fort Scott Fertilizer-Cullor, Inc ., 19 FMSHRC 1511,
1516 (Sept. 1997) (quoting Hall v. Clinchfield Coal Co ., 8 FMSHRC 1624,
1629 (Nov. 1986)).

However, the Commission will not
affirm credibility determinations if they contradict record evidence or are
supported by no evidence or dubious evidence. In re: Contests of Respirable
Dust Sample Alteration Citations , 17 FMSHRC 1819, 1878, 1881 n.80 (Nov.
1995), aff'd sub nom. Sec’y of Labor v. Keystone Coal Mining Corp ., 151
F.3d 1096 (D.C. Cir. 1998). Although the Commission only overturns a Judge’s
credibility determination in rare circumstances, we will not rubber stamp them. [6]
Morgan v. Arch of Illinois , 21 FMSHRC 1381, 1391-92 (Dec. 1999).

The Commission’s approach is
fully consistent with the approach taken by the courts of appeals. For example,
the Fifth Circuit has recognized that “if a credibility determination is
unreasonable, contradicts other findings of fact, or is ‘based on an inadequate
reason, or no reason at all,’ [the court] will not uphold it.” NLRB v.
McCullough Envtl. Servs., Inc ., 5 F.3d 923, 928 (5th Cir. 1993) (quoting NLRB
v. Moore Bus. Forms, Inc ., 574 F.2d 835, 843 (5th Cir. 1978)). Similarly,
the D.C. Circuit has held that “utter disregard for sworn testimony or the
acceptance of testimony which is on its fac[e] incredible ” may justify
overturning a Judge’s credibility finding. E.N. Bisso & Son, Inc. v.
NLRB , 84 F.3d 1443, 1445 (D.C. Cir. 1996) (quoting Amalgamated Clothing
& Textile Workers Union v. NLRB , 736 F.2d 1559, 1563 (D.C. Cir. 1984))
(alteration in original).

We conclude that there are
compelling reasons to take the extraordinary step of overturning the Judge’s
credibility determination and to find an advance notice violation. The Judge
failed to reconcile his factual finding regarding Holz’s response against
relevant conflicting record evidence, made contradictory findings, and provided
a rationale that is otherwise unreasonable.

First, the Judge completely
failed to consider the content of Sparks’ contemporaneous notes. Sparks documented
hearing Holz say “yeah I think there is.” Gov.
Ex 2, at 3. The content of the notes corroborates a factual account that is
both consistent with Sparks’ own testimony and the alternative testimony
provided by Holz. The Judge’s failure to attempt to reconcile the content of
the notes against a credibility determination is an abuse of discretion. [7]
Morgan , 21 FMSHRC at 1391 (“Before a judge credits any testimony, he
must reconcile all record evidence that is inconsistent with that
conclusion.”); Cf. Pappas v. CalPortland Co. , 40 FMSHRC 664 (May 2018)
(affirming the Judge’s decision to credit a witness because the Judge
considered and reconciled the record evidence that detracted from the witnesses’
testimony).

Second, the Judge further
erred in relying upon the testimony of KenAmerican’s Director of Safety,
Shannon Baker, that personnel did not use
coded language or provide advanced notice at the mine. 40 FMSHRC at 1552 (“I
find Baker’s testimony to be credible, and it tends to support Holz’ claims.”).
The only “claim” of Holz in dispute is the content of his response. Baker was
not on the mine-phone during the call and has no knowledge as to what Holz
said. Accordingly, Baker’s testimony cannot support the Judge’s decision.

In fact, Holz’s testimony
regarding the use of coded language at the mine refutes Baker’s testimony. Baker
testified that coded language was never used at the mine in context with
advance notice. Id . at 1552 (citing Tr. 140 (“we just never had any kind
of euphemisms or anything, any kind of coded language . . . .”)). The Judge
credited Baker. Id . In contrast, Holz testified that he understood the question about “company” to be directed at determining
whether MSHA was present. [8]
Tr. 164-65, 172; supra at 2 n.5. The Judge credited Holz on this point.  40
FMSHRC at 1549 n.8 (“I credit Holz’ statement and find ‘company’ was in
reference to MSHA.”). Therefore, the Judge himself recognized the inquiring
miner was using coded language. The Judge’s contradictory findings undermine
his credibility determination.

Third,
the Judge provided a rationale for his determination that is not supported by
the record. The Judge believed that Sparks misunderstood the law and that
Sparks had issued the citation merely because a miner had solicited
advance notice. [9]
Id . at 1549. In fact, Sparks testified that he considered the question and
answer to constitute advance notice. Tr. 103 (“I don’t necessary think it’s
a violation if they said we got company outside. I think what brought the
problem on was when they said, yeah, I think there is.”).    

Fourth,
the Judge made unreasonable assumptions. For instance, the Judge found that it
was unlikely that Holz would have given an answer that violated the law in the
presence of two MSHA inspectors. In so concluding, the Judge did not
acknowledge that the inspectors at the dispatcher’s shack were not on the
mine-phone, could not hear the preceding question, and would not have been
aware of the significance of Holz’ response. In fact, Holz testified that it
was “possible” that he had given the affirmative answer in the presence of the
inspectors. [10]  

Moreover, the Judge
erred in finding no violation on the grounds that the miner might have asked
the question for many reasons, such as the need to provide mantrips. He held
that Holz’s confirmation of visitors was only a violation if Holz intended to
convey advance notice. That is incorrect. Advance notice of an inspection is a
violation. Proof of intent is not required. Wake Stone Corp ., 36 FMSHRC
825, 827 (Apr. 2014). If the effect of the communication is to convey advance
notice then the violation is complete. Here, Holz thought the caller was asking
whether MSHA inspectors were on site and Holz’s statement informed him that
inspectors were present. At that point, the violation occurred. [11]

Finally, the operator argued before the Administrative Law
Judge and before us that the language of section 103(a) applies only to the
Secretary. The Judge correctly rejected that argument. The Commission’s application
of section 103(a) to operators in Topper Coal Co., Inc ., 20 FMSHRC 344
(Apr. 1998), is consistent with the statutory text and the Mine Act overall,
including section 110(e), which provides that it is a crime for “ any
person” to provide advance notice of an inspection. 30 U.S.C. § 820(e)
(emphasis added). In short, the plain language of the Act is flatly
inconsistent with the operator’s argument. [12]

For
all the aforementioned reasons, we find that the Judge abused his discretion. While
it is the province of the Judge to access credibility, it “ involves more than a witness’ demeanor and comprehends
an overall evaluation of testimony in light of its rationality it’s or internal
consistency and the manner it hangs together with other evidence.” 9A Charles
Alan Wright & Arthur R. Miller, Federal Practice and Procedure §
2586, at 578-79 (2d ed. 1995).

We conclude that the record
evidence demonstrates that Holz said “yeah, I think there is” in response to
the miner’s question. See ICG Hazard, LLC, 36 FMSHRC 2635, 2640 (Oct.
2014) (“Where the evidence supports only one conclusion, remand on that issue
is unnecessary.”) (citations omitted).

B.     
The Secretary did not
infringe on KenAmerican’s First Amendment Rights.

KenAmerican argues that section 103(a) has been
applied in a manner which infringes on its freedom of speech in violation of
the First Amendment. We disagree. [13]

The Commission has jurisdiction to consider
constitutional challenges raised against the enforcement of the Mine Act. Sec’y
of Labor v. Kenny Richardson , 3 FMSHRC 8, 18-21 (Jan. 1981). The First
Amendment guarantees that “Congress shall make no law abridging the freedom of
speech.” U.S. Const. amend 1. The First Amendment requires a heightened
scrutiny whenever the government regulates speech because of a disagreement
with the message it conveys. See Sorrell v. IMS Health Inc ., 564 U.S.
552, 566 (2011) (citations omitted). Content-based restrictions on speech may
be justified only if the government proves that it is narrowly tailored to
serve compelling state interests. R.A.V. v. St. Paul , 505 U.S. 377, 395
(1992).

Even if we were to assume that sanctioning KenAmerican
for providing advance notice of an impending inspection is a restriction on
protected expression, we conclude it is narrowly tailored to allow a meaningful
inspection of the mine. The Supreme Court’s decision in Donovan v. Dewey ,
452 U.S. 594 (1981), made clear that unannounced inspections of mines under the
Act are vital and fully constitutional. Congress enacted the Mine Act to ensure
the health and safety of all miners. 30 U.S.C. § 801(a)-(f). In order to comply
with Congress’ directives, MSHA must conduct inspections that reflect the
normal day-to-day working conditions of the mine. Such meaningful inspections
cannot occur when the mine environment is altered by advance notice of an
inspection. Donovan v. Dewey , 452 U.S. at 603 (“[I]f inspection is to be effective
and serve as a credible deterrent, unannounced, even frequent, inspections are
essential.”); see also Solis v.
Manalapan Min. Co., No. 10-115-GFVT,
2010 WL 2197534, at 5 (E.D. Ky. May 27, 2010) [14]
(“The giving of advance notice prevents
the discovery of safety and health violations and allows potential hazards to
be concealed.”); S. Rep. 95-181, at 27
(1977), reprinted in Senate Subcomm. on Labor, Comm. on Human Res., Legislative
History of the Federal Mine Safety and Health Act of 1977 , at 615 (1978)
(recognizing the “notorious ease with which many safety or health hazards may
be concealed if advance warning of inspection is obtained.”). [15]

III.

Conclusion

In summary, we conclude that the evidence in the
record compels the conclusion that advance notice of the MSHA inspection was
provided by the operator. For the reasons herein, we reverse the decision of
the Judge and find that KenAmerican violated section 103(a). The case is
remanded to the Judge so that he may assess a civil penalty for the violation
consistent with section 110(i) of the Mine Act, 30 U.S.C. § 820(i) . [16]

/s/ Mary
Lu Jordan

Mary Lu
Jordan, Commissioner

/s/
Michael G. Young

Michael G. Young, Commissioner

/s/
William I. Althen

William I. Althen, Commissioner

/s/
Arthur R. Traynor, III

Arthur R. Traynor, III, Commissioner

[1]
Chairman Marco M. Rajkovich is recused from
considering this matter.

[2]
Section 103(a) states in pertinent part that “no
advance notice of an inspection shall be provided to any person . . . .”

[3]
Section 103(g)(1) provides that “ [w]henever a representative of the miners or a miner  .
. . has reasonable grounds to believe that a violation of this Act or a
mandatory health or safety standard exists . . . such miner or representative
shall have a right to obtain an immediate inspection by giving notice to the
Secretary . . . .”

[4]
“While manning the phone communication someone
on the #4 unit called dispatcher and asked if there was company outside and the
dispatcher (Lance) told him yeah I think there is.” Gov. Ex. 2, at 2-3.  

[5]
Holz inferred that the miner was referring to
MSHA because it was a Friday after a shift change, a time when corporate
representatives would be unlikely to visit. Tr. 165.  

[6]
The substantial evidence standard of review
requires a weighing of all probative record evidence and an examination of the
fact finder’s rationale in arriving at the decision. See Universal Camera
Corp. v. NLRB , 340 U.S. 474 (1951). A Judge must sufficiently
summarize, analyze, and weigh the relevant record and explain their reason for
arriving at a decision. Consolidation Coal , 11 FMSHRC 966, 974 (June
1989) (citations omitted).

[7]
Instead of considering the content of the notes,
the Judge focused his analysis on what was not in the notes. 40 FMSHRC at 1551.
The Judge found that Sparks’ failure to document his investigation into the
identity of the anonymous miner detracted from the note’s veracity, and
accordingly the Judge disregarded the notes entirely. Id .

[8]
The Judge also found that Inspector Sparks was
not able to substantiate that “the question he heard over the mine-[phone]
system was consistent with such coded language.” 40 FMSHRC at 1550. As
previously stated, there is not a factual dispute on this issue; Holz
understood the term “company” to mean MSHA. Tr. 25, 164-65, 172.

[9]
Inspector Sparks testified as a fact witness. The
legal conclusions of an inspector are neither binding nor dispositive. Big
Ridge, Inc ., 37 FMSHRC 213, 216 n.6 (Feb. 2015) (citing Penn Allegh Coal
Co ., 4 FMSHRC 1224, 1227 n.2 (July 1982)).

[10]
We note that the Judge found that Holz had no
reason to skew his testimony as he was longer employed by KenAmerican. In so
finding, the Judge failed to consider that Holz faced the possibility of
criminal prosecution. 30 U.S.C. § 820(e). The refusal to follow a Judge’s
credibility determination is particularly justified where the testimony in
question is given by an interested witness and relates to his own motives. Morgan ,
21 FMSHRC at 1391. Indeed, we note that two mine superintendents and a foreman
working at the Paradise No. 9 mine were previously convicted of the crime of
providing advance notice. United States v. Gibson , 409 F.3d 325, 333
(6th Cir. 2005).

[11] Advance notice cases may not always be resolved
easily. In some instances, if a miner seeks advance notice from a dispatcher or
other employee, it may be difficult to discern whether a superficially
noncommittal response is affirmative or affirmatively coded language. Operators
must train miners not to seek advance notice. Ambiguities that may exist in any
interchange can produce situations that are difficult to judge. In such cases,
the Judge must exercise his/her discretion in light of the totality of the
circumstances.

Second, we recognize
that requests for mantrips and personal observations by miners may lead individual
miners to infer the presence of inspectors. Inferences drawn by individual
miners from their observations are not violations but such personal inference
may not lead to advance notice to other miners. Operators must avoid to the
extent possible the occurrence of such inferences.

[12]
We similarly reject the Judge’s attempt to limit
Topper Coal’s holding to mines of small size. See 40 FMSHRC at
1554-55. Section 103(a) by its plain language applies to “coal or other mines.”
30 U.S.C. § 813(a). The definition of a “coal or other mine” in section 3(h) of
the Mine Act is broad, sweeping and expansive. See Jim Walter Res ., Inc .,
22 FMSHRC 21, 24 (Jan. 2000). Section 103(a)’s prohibition against advance
notice clearly applies to mines of all sizes.

[13]
The Secretary did not respond to this argument. Instead,
he contends that KenAmerican is impermissibly attempting to enlarge its rights
on review. The Secretary is incorrect; KenAmerican had previously presented
this argument to the Judge. 40 FMSHRC at 1556 n.15; KA Post-Hearing Br. at
22-25. On appeal, a prevailing party may
defend a decision based on anything in the record without filing a
cross-appeal. Mass. Mut. Life Ins. Co. v. Ludwig , 426 U.S. 479, 480-81
(1976); Jim Walter Res., Inc ., 12 FMSHRC 1521, 1528-29 (Aug. 1990).

[14]
In Manalapan , a federal district court
judge granted the Secretary’s motion for a preliminary injunction ordering the
defendant mine operators to comply with section 103(a)’s prohibition against
advance notice. MSHA cited the mine operators for violations of section 103(a)
after its inspectors allegedly overheard advance notice of an inspection
provided over the mine’s phones. Slip op. at 2, 5.

[15]
Furthermore, KenAmerican has not demonstrated
that the Secretary is applying the law in a way that inhibits its statutory
right, pursuant to section 103(f), for an escort to accompany the inspection. Section
103(a) does not prohibit the mine operator from simply calling a miner to
return to the surface.  

[16]
The Judge’s analysis regarding whether
KenAmerican was negligent in violating the Act is more appropriately confined
to the penalty assessment for the violation.