Secretary of Labor v. SCH Terminal Company, Inc.

Plain-English summary

SCH Terminal blended coal to customer specifications at a land facility and loaded the finished blends onto barges at its Tennessee River dock. Its deckhands staged, moved, pumped, measured, and secured the barges so coal could be loaded, but SCH argued that the Mine Act did not reach that river-side work because the barges were movable, owned by others, and subject to Coast Guard regulation. Judge David P. Simonton held that the terminal performed the statutory work of preparing coal and that the deckhands' regular barge work was integral to its loading operation. He granted the Secretary partial summary decision and held that MSHA had jurisdiction over the citations arising from that work.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 802(h)(1), 802(i), and 803
• Outcome: The Secretary received partial summary decision that MSHA had jurisdiction to issue the contested citations.
• Key point: Mine Act coverage can extend to employees working on third-party barges when their tasks are an integral part of a custom coal-blending and loading facility.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

Office
of Administrative Law Judges

721
19th St., Suite 443

Denver,
CO 80202-2500

Office:
(303) 844-5266/Fax: (303) 844-5268

November
20, 2013

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTRATION,
(MSHA),

Petitioner,

v.

SCH
TERMINAL COMPANY, Inc.,

Respondent.

SCH
TERMINAL COMPANY, Inc.,

Contestant,

v.

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTATION,
(MSHA),

Respondent.

CIVIL PENALTY PROCEEDINGS

Docket No. KENT 2013-413

A.C. No. 15-18639-311429

Docket No. KENT 2013-378

A.C. No. 15-18639-308629

Mine: Calvert City Terminal, LLC

CONTEST PROCEEDINGS

Docket No. KENT 2013-37-R    

Citation No. 7657713; 09/18/2012

Docket No. KENT 2013-38-R

Citation No. 7657714; 09/18/2012

Docket No. KENT 2013-39-R

Citation No. 7657715; 09/18/2012

Docket No. KENT 2013-40-R

Citation No. 7657716;
09/18/2012          

Mine: Calvert City Terminal, LLC.

Mine ID: 15-18639

ORDER GRANTING PETITIONER�S
MOTION FOR PARTIAL SUMMARY DECISION

I. INTRODUCTION

These
cases are before me on Notices of Contest filed by SCH Terminal Company, Inc.
(�SCH�), and Petitions for Assessment of Civil Penalty filed by the Secretary
of Labor, acting through the Mine Safety and Health Administration against SCH,
pursuant to sections 105 and 110 of the Federal Mine Safety and Health Act of
1977, 30 U.S.C. � � 815
and 820. These cases stem from a fatal accident involving an employee preparing
a barge to be loaded with coal. On August 12, 2013, Petitioner filed a motion
for partial summary decision. On September 10, 2013, Respondent filed a brief
in opposition.

II. SUMMARY JUDGMENT STANDARD

Commission
Procedural Rule 67 sets forth the following grounds for granting summary
decision:

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). �Material facts� are those that �might affect the outcome
of the case under the governing law.� Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). Pursuant to Commission Procedural Rule 67, �Material
facts identified as not in issue by the moving party shall be admitted for the
purposes of the motion unless controverted by the statement in opposition.� 29
C.F.R. � 2700.67(d).

In this case, the parties have
each set forth facts supporting their position regarding the jurisdiction, and
there is little dispute as to those facts. While the parties dispute the proper
Commission interpretation of these facts, the arguments set forth involve
questions of law. Therefore, the jurisdictional issue at hand can properly be
decided based on the record before me. For the reasons that follow, the
Secretary�s motion is GRANTED.

III. FACTS

The Calvert City Terminal is a
coal-handling facility located on the Tennessee River in Calvert City, Marshall
County, Kentucky. Respondent�s Br., 2.[1] The Terminal consists
of both a land and a river portion of the facility. Sec�y Br., 4.[2]
Miners at the Terminal work in both the land-based portion and in and around
the fixed-dock at the river-based portion. Id. A miner may work at both
locations during one shift. Id. The parties stipulate that MSHA has
jurisdiction over the land portion of the terminal, but there is dispute as to
whether MSHA has jurisdiction over the river portion. Id. at 5.

The Terminal receives shipments
of coal from producers by barge, rail, and truck. Id. at 2. Once the
coal is received, it is unloaded and stored at the Terminal. Id. Customers
place orders for the amount and desired blend of coal. Id. The Terminal
uses a series of hoppers, belts, and conveyors to blend coal to the customer�s
specifications on the land portion of the Terminal. Id.; Respondent�s
Br., 3. Once blended, the coal is sent onto a series of belts and loaded
into rail cars, coal trucks, or barges that are owned by customers or
independent contractors. Sec�y Br., 2.

The loading of coal onto a barge
follows a specific process. Miners must �stage,� �draft,� and �pump� the
barges, and then tie them to the winch system in order to be loaded. Id. at

3. During the �staging� process, a barge is moved into place behind the barge
   being loaded. Id. �Drafting� can occur during the staging process, or
   after it has been tied to the winch system. Id. A miner �drafts� a barge
   by walking out onto the �gunwhale,� or platform surrounding the barge�s hold. Id.
   The miner then places a long measuring stick, called a �drafting stick,�
   down into the four corners of the hold. Id. The drafting stick
   measurements are relayed to the loadout- operator in charge of the chute, which
   comes down over the barge and physically loads the coal. Id. The
   loadout-operator then inputs the draft measurements into a computer program. Id.
   The program informs the loadout-operator the amount of coal that can be
   loaded onto each barge. Id. Miners must �pump� a barge prior to loading
   it with coal if the barge is carrying water. Id.

Once the barge is drafted and
pumped, it is tied to the winch system and pulled down alongside of the barge
loadout at a steady speed so that it may be loaded evenly. Id. Barges
are moved into place by tugboats owned by Wepfer, an independent contractor.
Respondent�s Br., 3. After one barge has been loaded and released, the next
barge in line is hooked into the winch system and loaded. Sec�y Br., 3. While
the other barges are waiting in line to be loaded, they are tied together and
�staged,� �drafted,� and �pumped.� Id.

Respondent contends that the
moveable barges are Coast Guard-regulated since they operate on the Tennessee
River, which is a Coast Guard-regulated waterway. Respondent�s Br., 4.
Conversely, the Secretary argues that the river loadout has never been
inspected by, nor has the Terminal submitted training plans to, the Coast
Guard, OSHA, or any other regulatory agency. Sec�y Br., 4. Rather, the Terminal
only submits training plans to MSHA. Id. As such, MSHA maintains
jurisdiction over the barges from the time they are staged, drafted, pumped,
and otherwise handled by miners for the purpose of being loaded or unloaded
until the loading or unloading is complete, the barge is untied from the winch
system, and sent down river. Id. at 5.

IV.
 STATEMENT OF LAW

Section 4 of the Mine Act, 30
U.S.C. � 803, provides that each �coal or other mine� is subject to the provisions
of the Act. �Coal or other mine� is defined under � 3(h)(1) of the Act to mean:

(A) an area of land from which
minerals are extracted in non-liquid form or, if in liquid form, are extracted
with workers underground, (B) private ways and roads appurtenant to such area,
and (C) lands, excavations, underground passageways, shafts, slopes, tunnels
and workings, structures, facilities, equipment, machines, tools, or other
property including impoundments, retention dams, and tailings ponds, on the surface
or underground, used in, or to be used in, or resulting from, the work of
extracting such minerals from their natural deposits in non-liquid form, or if
in liquid form, with workers underground, or used in, or to be used in, the
milling of such minerals, or the work of preparing coal or other minerals, and
includes custom coal preparation facilities.

30 U.S.C. � 802(h)(1).

Section 3(i) defines �work of
preparing the coal� as �[the] breaking, crushing, sizing, cleaning, washing,
drying, mixing, storing, and loading of bituminous coal, lignite, or
anthracite, and such other work of preparing such coal as is usually done by
the operator of the coal mine.� 30 U.S.C. � 802(i). Importantly, Congress
intended MSHA to have a wide range of jurisdiction. The relevant Senate report
provides, in pertinent part, that:

[T]here may be a need to resolve
jurisdictional conflicts, but it is the Committee's intention that what is
considered to be a mine and to be regulated under this Act be given the
broadest possible interpretation, and it is the intent of this Committee
that doubts be resolved in favor of inclusion of a facility within the
coverage of the Act.

S.Rep.
No. 95-181, 95th Cong., 1st Sess. 1, reprinted in [1977] U.S.Code Cong. & Ad.News
3401, 3414. (emphasis added)

Courts have consistently held that the �mixing or blending� of coal, when done
to meet customer or market specifications, constitutes the �work of preparing
the coal.� Kinder Morgan, 23 FMSHRC 1288, 1294 (Dec. 14, 2001)
(Commissioners Jordan and Beatty), aff�d, 78 Fed. App�x. 462, 465 (6th
Cir. 2003) (finding that a marine terminal that prepared coal according to
customer specifications was the work of preparing coal); see also Mineral
Coal Sales, Inc., 7 FMSHRC 615 (May 16, 1985) (determining that work
activities performed on the coal in order to make it �suitable for a particular
use or to meet market specifications� qualifies as the work of preparing coal).

However,
the Commission has held that a commercial dock that performed functions
included in the Act, such as storing, breaking, crushing, and loading, was
nevertheless not subject to the coverage of the Act. Oliver M. Elam, Jr.
Co., 4 FMSHRC 5, 8 (Jan. 7, 1982). In Elam, the Commission
determined that the workers did not prepare the coal for a particular use, and
only performed functions necessary for the loading of the coal. Id. The
Commission held that the facility solely performed the functions for its
loading business and not for the purpose of meeting the customer�s
specifications, and therefore was not subject to the Mine Act. Id.

V. ANALYSIS

The Secretary argues that as the SCH terminal mixes, stores, and loads coal to
customer specifications, the terminal is subject to MSHA jurisdiction as
performing �the work of preparing the coal� as defined by the Mine Act. Sec�y
Br., 6 (citing Kinder Morgan supra at 1294). The Secretary asserts that
the staging, drafting, and pumping of barges prior to the loading of coal is
integral to the coal loading processes of the SCH terminal and should not be
precluded from MSHA jurisdiction. Sec�y Br., 7. (citing Mineral Coal Sales,
Inc at 620-621). The Secretary additionally notes the explicit
Congressional directive to favor inclusion when questionable jurisdictional
questions arise. Sec�y Br. 8, citing S.Rep. No. 95-181 supra at 3414.
The Secretary concludes her argument by noting that MSHA is only asserting
jurisdiction over barge areas while SCH employees are actively preparing the
barges for the loading of coal and defers to other agencies� jurisdiction prior
to barge preparation and after SCH releases the loaded barges back to transit.
Sec�y Br. 9.

The Respondent initially
claims MSHA cannot exert jurisdiction over an accident that occurred on a river
barge because the barges where the accident occurred are not owned by SCH and
are not mines as classified by the Mining Act. Respondent�s Br. 4, 6-8. The
Respondent also relies on a ruling that declined to extend MSHA jurisdiction to
a road connected to a mine site as precedent that some limitation must be
applied to the expansive language of the �Mine Act� in order to avoid extension
to �unfathomable lengths.� Respondent�s Br., 8 (quoting Bush & Burchett
Inc. v. Reich, 117 F.3d 932 (6th Cir. 1997)). Respondent
characterizes barges as being involved in the transport but not the loading of
coal. Respondent�s Br., 8. The Respondent goes on to list several other rulings
that declined to extend MSHA jurisdiction over transporters and loaders of coal
absent a showing of coal processing. Respondent� Br., 9-10 (citing Director,
OWCP v. Consolidated Coal Co., 923 F.2d 38 (4th Cir. 1991); Eplion
v. Director, Div. of Coal Mine Workers� Compensation, U.S. Dept. of Labor,
794 F. 2d 935, 936 (4th Cir. 1986); Oliver M. Elam, Jr. Co.,
4 FMSHRC 5, 8 (Jan. 7, 1982)).

I summarily refute the Respondent�s argument that MSHA cannot assert
jurisdiction over activities that occur on property not owned by SCH and not
otherwise classified as a mine. The question at hand is not whether has MSHA
has authority over any particular set of barges or other physical property. The
question at hand is whether MSHA has jurisdiction over work activities that
occur on these barges as SCH employees prepare the barges for the loading of
coal.

The
Respondent characterizes the moveable barges as being under control of the
contracting tugboat company. Resp. Br., 3, 12. However, it is clear that SCH
deckhands, the SCH load out operator, and SCH management directed and performed
all aspects of the barge preparation activities Mr. Wright was engaged in at
the time of the accident. Foley Dep., 14-17; Kissiar Dep., 6. Furthermore, the
facts have shown and the Respondent has conceded, SCH operates a coal
processing and loading facility at the Calvert City Terminal that prepares and
then loads custom blends of coal to customer trucks, railroad cars, and barges.
Sec�y Br. 2.

As
such, MSHA is right to assert jurisdiction over SCH employees engaged in activities
essential to the preparation and loading of that processed coal. See Kinder
Morgan supra at 1294. Therefore, I proceed with my analysis of the work
performed on the barges where the accident occurred by determining whether or
not SCH �deckhands� worked within the coal processing and coal loading
activities of the SCH terminal.

Respondent
contends that the Terminal is divided into three distinct facilities, and that
MSHA only has jurisdiction over the land-facility. Respondent�s Br. 3, 12. This
argument, however, has no merit. In Mineral Coal Sales, Inc., the Respondent in that case made the same argument,
contending that the various activities at the facility should be examined in
isolation from one another. Id. at 620. The Commission rejected this
approach, holding that �in examining the
�nature of the operation� performing work activities listed in section 3(i),
the operations taking place at a single site must be viewed as a collective
whole.� Id. at 621. The Commission explained that to hold otherwise
would provide facilities the opportunity to avoid Mine Act coverage by merely
adopting �separate business identities along functional lines, with each
performing only some part of what, in reality, is one operation.� Id. The
Commission concluded that this was an appropriate approach in that case because
of the �pervasive intermingling of personnel and functions among entities that
sporadically operated at the facility, with little or no apparent regard for
business or contractual formalities.� Id.

Because
the SCH terminal regularly performs customized blending of coal to meet
customer specifications, it is proper for MSHA to assert jurisdiction over all
areas of the SCH terminal involved with the preparation and loading of
processed coal. Id. at 621. As such, the Respondent�s claim that the Elam
ruling should be applied and exclude MSHA jurisdiction over a coal loading
operation is misguided. In Elam, the operator did not perform any
blending or processing of coal but only loaded and transported coal prepared by
off-site third party contractors. Elam supra at 8. In this case, SCH
employees blend coal to customer specification in addition to the loading of
those customized coal orders within the same SCH terminal. Sec�y Br., at 2, 4.
Additionally, SCH employees are assigned to differing areas of the SCH terminal
on a day to day basis and sometimes work in different terminal areas during the
same shift. Sec�y Br. 4.

Furthermore,
it appears SCH personnel cannot recall any government regulatory agency other
than MSHA inspecting the SCH terminal. Foley Dep., 21-23. As such, I find that
SCH employees likely consider themselves protected by the Mine Act, regardless
of their exact location, for their entire work shift when working at the
direction of SCH management. From the practical standpoint of the SCH employee
with numerous possible job duties, it is logical to extend MSHA work-safety
rules to coal loading activities conducted on the barges and docks of the river
side loading facility. It would be unreasonable to hold that a miner, who might
be involved in land based coal preparation and river-based barge preparation in
the same shift, loses Mine Act protection when he crosses over to an untethered
barge in the river and then somehow regains that protection once he returns to
the solid land of the loading dock or coal processing facility.

However, Respondent argues this
exact legal theory while relying on a recent and factually-similar case that
did recognize separate and jurisdictionally distinct facilities within the same
terminal. Consolidation Coal Co., 35 FMSHRC 439, 470 (February 5,
2013)(ALJ Koutras)( 2013 WL 1385616 (F.M.S.H.R.C.)) (holding that MSHA did not have jurisdiction after
a foreman drowned investigating barge conditions on river). �(Consol.)� In that case,
the court determined that there were three separate and distinct areas of a
terminal that included the preparation plant, the loading dock facility and the
river portion of the dock. Id. at 24. The court held that the
preparation and loading dock areas of the facility were under MSHA
jurisdiction, but the jurisdiction did not extend to the river portion of the
facility. Id. at 28-31. The court reasoned that jurisdiction relating to
the barges located on the river is �logically and reasonably best suited for
OSHA or the U.S. Coast Guard.� Id. at 31.

Consol., however, is an
unreviewed ALJ decision and therefore not binding precedent. Additionally, I do
not find the analysis in the Consol. decision persuasive. In Consol.,
the ALJ bypassed binding Commission precedent that �operations taking place at
a single site must be viewed as a collective whole� and instead evaluated the
processing, loading, and river-based barge preparation as separate work areas.
 Mineral Coal Sales, Inc., supra. at 621; Consol. at 26.

Although I do not concur with the
ALJ�s focus on distinguishing between river-based loading and land-based
processing activities when performed within an integrated coal processing
facility, it is critical to note significant differences between Consol.
and the facts of this case. In Consol., a plant foreman, performing a
specially requested inspection, drowned after falling off an empty moveable
barge in a mid-river area supposedly distinct from the loading dock facility. Consol.
at 32. The ALJ specifically noted that �� it would appear that the location of
the McIntyre Accident was on the river where no coal is processed or loaded.� Id.

In this case, an hourly SCH
employee, Mr. Kevin Myers, was performing the routine task of  ï¿½drafting�
a barge in line for immediate loading. Respondent�s Br., 4. As part of his
drafting duties, Mr. Myers was required to relay his measurements to the
load-out operator located on the fixed dock location of the SCH terminal. Sec�y
Br. 3. These measurements were necessary for the accurate loading of the
barges. Respondent�s Br. 4. As such, it is clear that Mr. Myers� duties in
�drafting� the line of barges were integral and necessary to the immediate coal
loading demands of the SCH fixed loading dock.

However, Respondent relies on its
representation of the SCH terminal as three-distinct areas consisting of 1) a
land-processing facility, 2) a fixed loading dock, and 3) water frontage (barge
staging) area to claim that Mr. Meyer�s location on a movable barge removes him
from MSHA jurisdiction. Respondent�s Br.3, 12. As the Respondent has cited Consol
as persuasive precedent and adopted a facility classification system identical
to the Consol decision, it appears that the Respondent must concede MSHA
jurisdiction over both the land-based processing facilities and fixed loading
dock areas of the SCH terminal. Respondent�s Br., 3; Consol at 31
(holding a fixed loading dock facility that loaded customized coal onto barges was
subject to MSHA jurisdiction).

The Respondent uses the Consol
classification system, which extended MSHA jurisdiction to a similar fixed
loading dock facility, to describe the SCH facility as three distinct areas,
and further states that Mr. Myers was drafting a barge-line not yet connected
to the winch system of the fixed SCH dock loading facility. Respondent�s Brief
3, 11; see Consol at 31. Respondent contends from this distinction that
Mr. Myers was on a barge that had not yet entered a SCH terminal subject to
MSHA jurisdiction. Respondent�s Br., 11. Respondent further argues that MSHA
should not extend jurisdiction over river-based moveable barges because no coal
processing or actual loading occurs as SCH �deckhands� prepare the barges
before they are connected to the winch system. Respondent�s Br., 10.

I find the Respondent�s attempt
to isolate routine SCH �deckhand� duties from other SCH terminal activities,
particularly the loading function of the fixed loading dock, wholly
unconvincing. As an initial matter, SCH personnel testified that SCH deckhands
routinely attached barges to the winch system of the fixed dock loading
facility and then detached those barges from the winch system after loading.
Foley Dep., 14-17; Kissiar Dep., 6. As such, while a subcontractor tug company
may maneuver the barges, it appears that SCH employees have unbroken control of
the barges from the time SCH �deckhands� begin the drafting and pumping process
begins to the time SCH �deckhands� cut the loaded barges loose from the fixed
loading dock facility. Respondent�s Br. 3; Kissiar Dep., 6.

Furthermore, the testimony of the
SCH load out operator indicates that regardless of whether a barge is tethered
to the dock�s winch system, the SCH load-out operator and SCH deckhands are in
constant radio communication throughout the entire barge preparation and actual
loading stages of the coal loading process. Kissiar Dep., 6. As such, it is
clear that SCH deckhands located on the moveable barges are a necessary part of
the fixed loading dock operations, and, thus, are employed in the loading of
coal.

Having found that SCH deckhands
load coal at a facility that prepares custom-blended coal and works in �the
preparing of coal�, I find that MSHA has jurisdiction over SCH deckhands involved
in the regular preparation and loading of barges at the SCH terminal.

For me to rule otherwise would
result in the absurd result of MSHA having jurisdiction over the SCH load out
operator but not SCH deckhands, even though both SCH employees work together
continuously in order to accomplish the identical goal of loading coal barges.
Similarly, a contrary decision would also result in MSHA having jurisdiction
over an SCH deckhand while the barge he was located on was tethered to the
winch system of the loading dock but not while that same barge is instead
moored just yards away from that cable system. These sorts of bi-furcated
jurisdictional exemptions would clearly not comply with Congress�s explicit
intention that the safeguards of the Mine Act be given �the broadest possible
interpretation� and any jurisdictional doubts be resolved with a finding in
�favor of inclusion.� S.Rep. No. 95-181 supra at 3414.

I find that there are no genuine
factual issues in dispute regarding the activities of the SCH terminal and that
the Secretary is entitled to a ruling as a matter of law. For the reasons
detailed above, I find that MSHA has the jurisdiction necessary to issue the
citations contested in this docket.

VI.
RULING

For the foregoing reasons, the Secretary�s
motion for partial summary decision is GRANTED.

/s/ David P. Simonton   

David P. Simonton

Administrative Law Judge

Distribution:

Willow
E. Fort, Esq., Office of the Solicitor U.S. Department of Labor 618 Church
Street, Suite 230 Nashville, Tennessee 37219-2440

Flem
Gordon, Esq., Gordon Law Offices, P.S.C., 121 W. 2nd Street P.O. Box
1146 Owensboro, KY 42302-1146

[1] For
purposes of this order, the Respondent�s Brief in Opposition to Summary
Decision will be cited in the following manner �Respondent�s Br. ___�

[2] For
purposes of this order, the Petitioner�s Br. in Support of Summary Decision
will be cited in the following manner �Sec�y Br. ___�