Secretary of Labor v. Kentucky Fuel Corporation

Plain-English summary

Kentucky Fuel continued using a John Deere excavator after pre-operational records identified a nonfunctioning automatic backup alarm and excessive oil or hydraulic leaks. The Judge rejected the operator's explanations as not credible and held that using the equipment without correcting recorded safety defects violated 30 C.F.R. § 77.1606(c). The backup-alarm collision hazard and the equipment's fire hazards made the violation significant and substantial, while the operator's knowledge, continued use, multiple defects, and attempted explanations supported unwarrantable failure. The Judge affirmed the order, assessed the specially proposed $21,900 penalty, and dismissed the case upon payment.

Decision snapshot

• Governing provisions: 30 C.F.R. §§ 77.1606(c) and 77.410(a)(1); 30 U.S.C. §§ 814(d) and 820(i)
• Outcome: Order No. 8296433 was affirmed as S&S and unwarrantable, and a $21,900 civil penalty was assessed.
• Key point: An operator that knowingly uses mobile equipment despite recorded safety defects can commit an S&S violation and aggravated conduct constituting unwarrantable failure.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

Office
of Administrative Law Judges

1331
Pennsylvania
Avenue, NW, Suite 520N

Washington, DC 20004

Telephone:
202-434-9933 / Fax: 202-434-9949

June 16, 2016

SECRETARY
OF LABOR

MINE
SAFETY AND HEALTH   

ADMINISTRATION
(MSHA),

Petitioner,

v.

KENTUCKY
FUEL CORPORATION,

Respondent.

CIVIL
PENALTY PROCEEDING

Docket
No. KENT 2015-528

A.C.
No. 15-19475-381445   

Mine:
Beech Creek Surface Mine

DECISION

Appearances:               Dominique
C. Gutierrez, Esq., U.S. Department of Labor, Nashville, Tennessee, for
Petitioner

James
F. Bowman, Midway, West Virginia, for Respondent

Before:                                    Judge
Moran

Introduction

This
matter involves a single section 104(d)(1) order, Order No. 8296433, (hereinafter
“Order 433”), issued on December 16, 2014, for an alleged violation of 30
C.F.R. § 77.1606(c). The standard, titled “Loading and haulage equipment;
inspection and maintenance,” provides in the cited subsection (c) that “[e]quipment
defects affecting safety shall be corrected before the equipment is used.”[1] For the
reasons that follow, the Court affirms Order 433 and each of its associated
findings, including that the violated standard was significant and substantial (“S&S”)
and constituted an unwarrantable failure. The Court further determines that the
proposed specially assessed civil penalty of $21,900.00 represents an
appropriate penalty upon application of the statutory criteria set forth at 30
U.S.C. §820(i).

Findings
of Fact

Order 433, issued on December 16, 2014, asserts:

The John Deere
200C Excavator (SNFF200CX507060) in operation at this mine had defects
affecting safety (Excessive oil leaks, Back-up Alarm) recorded in the
pre-operational [“pre-op”][2]
exam record book on 12-14-2014. No corrective action was taken to correct these
conditions prior to the operator placing the equipment in service on this day. The
pre-operational exams are turned in to the operator and filed on a daily basis.
Failure to correct defects affecting safety prior to placing equipment into
operation constitutes more than ordinary negligence and would reasonably likely
contribute to a serious accident. Standard 77.1606(c) was cited 7 times in two
years at mine 1519475 (7 to the operator, 0 to a contractor. This violation is
unwarrantable.[3]

The
events which led up to the issuance of Order 433 are important to understand as
they involve three other violations involving the same excavator. Each of those
three violations was issued on the same day as Order 433, and each was paid and
each represents a final order. MSHA Inspector Douglas Rutherford, the inspector
who issued the alleged violations in this case, testified in this proceeding. Inspector
Rutherford is an experienced and knowledgeable inspector, with ten years’
experience in the private mining sector. Tr. 28-30. He was at the Beech Creek
Mine on December 16, 2014 to perform an E01, (i.e. regular), inspection. Tr. 32.

Testifying as to the matters which led
up to the issuance of Order 433, the inspector first identified Ex. P4 as the
citation he issued on December 16, 2014, Citation No. 8296430, (hereinafter “Citation
430”), for a non-functioning automatic backup alarm on an excavator, a John
Deere 200C. Tr. 36. Moments later, Inspector Rutherford issued Citation No.
8296431, (hereinafter “Citation 431”), on the same equipment, this time for an
insulator wire that was not properly bushed. The wire ran from the cab’s roof. Tr.

36. Finally, again only minutes later, a third citation was issued on the same
    piece of equipment, Citation No. 82964342 (hereinafter “Citation 432”), “for
    accumulations of combustible material – oil, oil-soaked rags, leaves – that
    were present on the machine.” Tr. 37; see also Exs. P6 A, B. As noted, all
    three citations involved the same piece of equipment, the John Deere excavator,
    and all three citations became final orders prior to the commencement of this
    proceeding.  Tr. 37; Exs. P10, P11, P12, P13.

The
inspector then testified about the order at issue in this proceeding, Order 433,
which was issued the same day, on December 16, 2014. Ex. P7. Order 433, issued
for the same John Deere excavator, alleged that “the two hazards [cited in
Citation 430 and Citation 432 for a non-functioning backup alarm and
accumulations of combustible material] were not corrected prior to putting the
machine in service on December 14th, 2014.” Tr. 39. Initially, Order 433 was
issued as a citation for a violation of 30 C.F.R. §77.1606(a), but the
inspector subsequently viewed the pre-op exam records for the equipment, which
led him to conclude that the mine operator knew of the hazards on the
excavator.[4]
Tr. 40. Thus, he concluded that the operator put the machine in use, though
aware of the defects. Id.

The
inspector confirmed that, as to the same excavator, he later learned that the
pre-op exam records that the operator provided to him applied to December 14th,
2014. Those records documented the hazards cited in Citations 430, 431, and 432,
which were issued around noon. He concluded that the operator was aware of the hazards,
as his initials were at the bottom of those pre-ops, noting the hazards. Tr. 41.
Those exhibits and the associated testimony support the Court’s finding of such
operator awareness as to the backup alarm and excessive oil or hydraulic leaks.

Each
of the four Pre-shift Safety Check List exhibits, Exs. P7 A, B, C, and D, which
were admitted into the record, will now be discussed. Ex. P7 A is from the
operator’s pre-op book (“Equipment Operator’s Pre-Shift Safety Check List”) and
it is the carbon (yellow) copy of the pre-op check that was performed by Ricky
Justice on December 13, 2014 on the John Deere 200 excavator in issue. The box
for “Back Alarm,” has an “X” in it, signifying that “Repairs Required.” It
lists the equipment machine engine’s hours as “75791.”[5]  Ex. P7 B
is the second photo the inspector took of the pre-ops, and it shows the top
(white) copy for Ex. P7 A. Thus, Exs. P7 A and P7 B involve the same pre-op:
the white top copy and the yellow carbon copy for December 13, 2014 for the
same equipment performed by Justice and initialed by superintendent Perry
Ryder. As they are copies, the recorded machine hours of 75,791 are the same
for Exs. P7 A and P7 B. The difference is that, for Ex. P7 B, superintendent
Ryder’s initials are on the white top copy and, oddly, the white copy had,
admittedly, been wadded up.

The third photo, Ex. P7 C, is a pre-op
white copy made on December 14th for the same John Deere 200 excavator. This
copy, as with the pre-op for the December 13th, also lists an “X” for the “Back
Alarm,” meaning “Repairs Required.” Only the initials “BH,” appear on Ex. P7 C,
referring to foreman Bernie Harper. Tr. 127. It also reflects the machine’s engine
hours, this time recorded as 75,890.1.

Last, is Ex. P7 D. It is a photograph of
another top, (i.e. white copy), pre-op for the same equipment, bearing the same
date as Ex. P7 C, December 14th, 2014. As with Ex. P7 B, Ex. P7 D is
another perplexingly “crumpled up” pre-shift safety pre-op. Ex. P7 D is signed
by Ricky Justice and initialed by superintendent Ryder. Tr. 44-45.

The following is also noted regarding
the first box for the pre-shift safety check list items. For Ex. P7 A, the top
box on the form, which is designated for excessive oil or hydraulic leaks, is
blank. Blanks are not allowed. One is to either leave a check mark, indicating
the item is okay; a zero to indicate that repairs have been made, or an X to
mark that repairs are required. The box for excessive oil or hydraulic leaks is
also blank in Exs. P7 B and P7 C, but in P7 D, applying to the same date,
December 14, 2014, an X is marked, indicating repairs required.

Accordingly, two of the photos deal with
December 13th, and two deal with December 14th, yet there are other
differences. Ex. P7 A, the yellow copy, and Ex. P7 B, the white copy, plainly represent
the same pre-shift safety check for the John Deere excavator on December
13th. However, Ex. P7 C lists the backup alarm box as repair required, and the
box for excessive oil or hydraulic leaks left blank, while Ex. P7 D lists the
box for excessive oil or hydraulic leaks as “repairs required,” but identifies
the backup alarm as okay. Both are white top copies and therefore they are
clearly different pre-shift safety checks for the day shift for that equipment. 
A comparison of the check marks on Exs. P7 C and P7 D obviously shows that,
unlike Exs. P7 A and P7 B, they are not copies of the same safety check for
December 14th.  Further, Ex. P7 C has only Bernie Harper’s initials on it,
whereas Ex. P7 D, as noted, is signed by Ricky Justice and initialed by
superintendent Ryder. What Exs. P7 A through D share is that, except for Ex. P7
D, the equipment’s backup alarm box was marked as “Repairs Required.” In
addition, Exs. P7 A, P7 B, and P7 C leave the box for excessive oil or
hydraulic leaks blank, but Ex. P7 D, dated December 16, 2014, lists “Repairs Required”
for that topic.

As
stated, Order 433, citing 77.1606(c), deals with correcting hazardous
conditions prior to placing equipment in service. In sum, setting the stage for
the alleged 77.1606(c) violation, there was Citation 430, dealing with the
inoperative backup alarm, Citation 431 pertaining to the un-bushed insulated wire
passing through the cab roof, and Citation 432, involving the accumulation of
combustible materials. Tr. 49. With those predicate violations, there is then Order
433 – the charge at issue here – that the operator placed the vehicle back into
service, knowing of those predicate violative conditions and failing to correct
them.

For
the backup alarm citation, Citation 430, the inspector stated that he issued
that violation upon observing the excavator’s alarm not working. Tr. 57. This
was not immediately obvious, as there was clearly an element of deception attempted
about the alarm’s operability. When the equipment operator was first directed
to back up the equipment, an alarm sounded.  However, the inspector then discerned
that the alarm was triggered by a manual toggle switch, not by an automatic backup
feature. Thus, the inspector’s take on the manual switch’s presence did not
place the operator in a good light, as he expressed that:

the toggle
switch where the [equipment operator] made it appear that the alarm was working
as he traveled to [the inspector’s] location[.] [However] when [the inspector]
asked [the equipment operator] to push the lever, that hand was [then] being
used to push the lever; [and] therefore, he couldn't reach over and flip that
toggle alarm. That toggle alarm is actually illegal, and it's only there to
make it appear that the machine was motion-activated.

Tr.
64.

The inspector noted this issue to the
operator and the response was “that the equipment was leased and that the
manual toggle alarm was present on the machine when it was delivered to the
mine.”[6]
Tr. 58 (emphasis added). In contrast, the motion-activated backup alarm was not
working. Tr. 58. The inspector reiterated that the mine superintendent, Perry
Ryder, stated to him that the equipment was leased, and the manual toggle alarm
was present on the machine when it was delivered to the mine. That is,
the superintendent was initially contending to the inspector that the equipment
had been leased and that the toggle alarm had been added to it prior to
the machine’s delivery to the mine. Tr. 50, 65, 69.

For
Order 433, again with the standard at issue here requiring that safety defects be
corrected before the equipment is used, the inspector listed the violation as
reasonably likely, lost work days or restricted duty, and S&S. For the accumulation
of oil, Citation 432, he marked the gravity as reasonably likely, lost work
days or restricted duty and S&S. The latter concern was that, in the event
of a fire, a miner could receive burns. Ex. P6 A shows the accumulations and
the inspector pointed out oil and dust and oil-soaked leaves and materials. Ex.
P6 B reflects the rags which were in the battery compartment. Tr. 52. Ex. P6 C
shows the battery compartment with the dark areas showing oil accumulations
too. Tr. 53. This was hydraulic oil, which the inspector stated has a flash
point of approximately 400 degrees Fahrenheit. The insulating wire coming
through the cab was identified as an ignition source for that oil. Tr. 53.

The inspector stated that he issued the
104(d) order because of “the extent of the cited conditions and the evidence
that was provided . . . that the operator had initialed off on two separate
pre-op examination records, that those existing hazards were marked on those
records.” Tr. 66. The inspector was first provided with “the actual record book
itself with the carbon copy provided. That was dated for December the 13th,
2014.” Tr. 66-67.

The mine superintendent told the
inspector that the pre-op procedure involved the equipment operator performing
the pre-op checklist and then tearing off the white copy and bringing that to
the supervisor at the mine office at the start of the shift. The operator would
then determine what hazards to correct. Tr. 67.

The inspector stated that Order
433 was not duplicative of the previously-issued citations because it was not
issued for the same standard on the same day for the same piece of equipment.
Tr. 74. He explained the difference: his earlier issued citations were because
of the obvious nature of the conditions he observed, namely the added manual
toggle switch and the inadequate pre-op for safety hazards before putting the
equipment in service. However, the inspector again acknowledged that at 4:16 p.m.
that day the operator did provide a record, showing that those hazards had been
listed.[7]
Tr. 74. While thereby escaping a violation of section 77.1606(a) by showing
that an inspection occurred, albeit an incomplete inspection since no entry was
made for the oil leaks box in Exs. P7 A, B, or C, those three exhibits
disclosed the defective backup alarm. By using the equipment in the face of the
inoperative backup alarm, the operator’s own pre-shift records disclosed that
defect affecting safety and the operator’s use of that equipment before it was
corrected was established, per Citation 430.

In terms of the oil accumulations,
considering the amount the inspector observed and that accumulations were
observed on leaves, and further considering that, as it was December, such
leaves had not fallen recently, the inspector modestly estimated that the
condition had existed for “multiple shifts.” Tr. 76. This was based on “the
amount of oil in accumulation and the ability for the float dust to actually
soak up in the oil on the machine, all stated that, you know, they had not
cleaned that machine off prior to my inspection.” Tr. 77. This translated into
his opinion that the condition had existed for four or five days.  Because the
operator provided no mitigating circumstances, he deemed the negligence to be
high for Order 433. The inspector also concluded that the operator knew of the
condition, as it disclosed to him by the operator that the equipment was in
that condition when it was brought to the mine.[8]
Tr. 78.

Though no 110(c) violation charges were
ever filed, the inspector did file the matter with MSHA as a possible knowing
and willful violation. His recommendation was based on the wadded up sheets and
“[t]he conditions themselves being as obvious as they were and the sheets being
wadded up and no mitigating circumstances, you know, to be given, I would
consider that – you know, I consider that constituting more than ordinary
negligence,” and also because the operator made no effort to correct the
problems. [9]
Tr. 80.

Respondent’s cross-examination of the
inspector began with Citation 431, in which the inspector asserted that there
were bare wires exposed at the top of the excavator’s cab. As noted, the
deficiency was a failure to provide a rubber bushing. The wire was insulated
except for the location where it entered the machine. This did not create an electric
shock hazard. Rather, the hazard was an ignition source. Tr. 91. In terms of
the accumulations, the inspector recalled that there was oil in the bottom of
the battery compartment, and he maintained that in Ex. P6 B, though the rags
had been moved to the front of the excavator for disposal, the cable wire itself
was still touching the oily rags. Tr. 94. Regarding the location of the wire,
it could not be simply described as on the exterior of the door. More
accurately, “it was the exterior of the door above the compartment but it was inside
the door in the compartment.” Tr. 94-95 (emphasis added). Accordingly,
“[i]t extended from the cab through that compartment over to the battery.” Tr.
95.

Speaking
to Citation 432, the inspector made it clear that he had not contended that he
observed oil leaks, but rather that his citation was for accumulations
of combustible material. Tr. 96. [10]

The inspector stated that he issued
Order 433 based on what he saw in the pre-op records. Tr. 107. Those records
were not provided when he was at the machine but only later that day, at 4:16
p.m. Tr. 107.

The
inspector marked the backup alarm citation, Citation 430, as unlikely “because
there was no visible foot traffic around the machine that day.” Tr. 111. The
negligence was marked as moderate because miners are trained by the operator to
look for those defects prior to operating such machinery. Id.  Ex. P4 A,
is a photo of the manual toggle switch. Tr. 112. The Court would note that the toggle
switch is not a subtle or miniscule addition to the excavator. The inspector
did not inquire as to how the backup alarm was repaired, but he did require
that the miner demonstrate to him that it had been repaired. Tr. 112.

Understandably,
the inspector did consider the wadded up pre-ops as reflecting high negligence,
taking note that both of the wadded up pre-ops were the only ones initialed by
the foreman. Tr. 114-15. As he stated: “I have no way of knowing why they were
wadded up, but both of the wadded-up pre-ops were initialed off of by the
superintendent. That was the proof that he knew of those conditions existing
prior to my order.” Tr. 115.

Respondent
later presented a claim to justify wadding up the pre-ops. Respondent suggested
to the inspector that the respondent will contend that “when he goes to the
machine, they leave the . . . yellow copy on the machine, they take the white
copy and they wad it up so they can toss it down to him so it doesn’t blow back
under the machine.” Tr. 116. The inspector was not persuaded by the contention,
because, as it was explained to him, “the operator stated that the original,
which would be the white copy you’re referring to, is turned in to the foreman
at the mine office.” Id. Noting that he found no wadded up yellow
copies, the inspector also rejected the notion that the yellow copy is the one
that is kept, as the yellow copy is “the one that’s retained normally at the piece
of equipment, but at this piece of equipment this day, there were no records of
any kind [on the equipment]. That’s why we traveled back to the mine office,
because the operator referred to me that they were located at the mine office.”
Id.

As
to the claim that the violations in Citation 430 (citing section 77.410, for
the manual motion switch) and Order 433 (citing section 77.1606(c)), for a
defect affecting safety), were duplicative, the inspector noted that they cited
different standards. Tr. 117.  Despite attempts to muddle the issue by the
Respondent, the inspector made it clear that he did not cite the same condition
in Citation 430 and Order 433. In Order 433 he was citing section 77.1606(c)
for putting the machine in service prior to correcting a safety defect. Tr.

129. The Court agrees there is no duplication.

The key consideration in this matter is
that the defective conditions had been noted in the December 13th and 14th
pre-ops, yet the operator placed the machine in operation prior to
correcting those conditions. Tr. 118.

Trying to paint a different picture, Respondent’s
representative asked the inspector about Ex. P7 A , the yellow copy of the
pre-op check in which the backup alarm was marked with an “X.” Tr. 119.  That
pre-op check was made by Ricky Justice. Accordingly, the inspector noted that
the pre-op marked the alarm as defective. Tr. 120. When that occurs, the
equipment operator is obligated to inform his immediate supervisor of the issue
and, following that, the equipment is to be repaired or taken out of service. Id.

The Court, with witness Inspector Rutherford
agreeing, noted that Exs. P7 A and P7 B are not the same. The foreman’s
initials are at the bottom of Ex. P7 B, the crumpled up copy, whereas those initials
are not present on Ex. P7 A. Tr. 121. Further, while Respondent made a claim that
the photo of one sheet, Ex. P7 A, was incomplete, critically, the line for the
foreman’s signature is visible in all four photos of the pre-shift check list. Thus,
that empty claim is inconsequential and the respondent did not attempt to
introduce, as it could have, its own copy of that exhibit.  The inspector
stated that Ex. P7 A reflects the full sheet and Court finds that to be the
fact. That is to say, there are no lines or room for additional information
below the line for “Mine Foreman.” Tr. 124.  Per the testimony, the line for
the initials or signature for the mine foreman would only be on the white copy.
Id.

The Court has noted that the record
reflects two white copy pre-shift safety check lists for December 14th. Exs. P7
C, D. There would be two pre-ops performed if the equipment were used on two
shifts. Tr. 126. This was the starting point for Respondent’s farfetched theory
that during the day shift somebody did a pre-op and found something wrong and that
it was then corrected. This claim rests on the idea that foreman Harper did a
pre-op on December 14th, and then employee Ricky Justice did another pre-op
that same day. Tr. 127. The Ricky Justice-signed pre-shift check was one of the
two crumbled up sheets. Ex. P7 D. That pre-shift check has a check beside the back
alarm category, indicating that the alarm was okay. Tr. 128. Thus, Respondent
contended that those two pre-ops support its claim that after Harper noted the
condition it was repaired and that Justice’s failure to note a problem shows it
was repaired by the time of his inspection. Tr. 128. The inspector’s answer to
this is that the mine superintendent, Perry Ryder, admitted to him that the
machine was in the cited toggle-switch-installed condition when it was dropped
off on December 13th. Tr. 128. Further, the two sheets both list the safety
check list as applying to the day shift for the same day.

Perry Ryder, mine superintendent, was
called by the Respondent. He stated that on December 16, 2014, the day the
citations were issued, he was at the mine. Tr. 133-134. He stated that the job
was shut down, in idle status, on the day the inspector arrived. Present were foreman
Harper, Justice, the machine operator, and Greg Wyatt, a mechanic. The
equipment in issue had arrived at the mine site around December 11th. Tr.
135-136. Ryder stated that on that day he arrived at the mine site and looked
at the excavator with foreman Harper. On that day, he found no problem with that
equipment and proceeded to tram it to the top of the hill, a four to five hour
process because the equipment moves so slowly. Tr. 136-137. Ryder stated that
the excavator’s backup alarm was “definitely working” that day. Tr. 137. He
acknowledged that the backup alarm is automatic; it is to alarm automatically
whenever the foot pedal is used. Tr. 137-38.  

However, Ryder also conceded that there
was a point in time when the alarm was not working. The fix, he stated, was
simple: a mechanic only had to clean the switch, as it was only occasionally
not making contact. Tr. 139. As to the other switch on a mounted bracket, Ryder
asserted at the hearing that the manual toggle switch was not on the
equipment when he first got the excavator.[11]
Tr. 140-141. Referring to that other switch, Ryder stated: “there’s a – a
mounted bracket there with a switch on it. That is the one that – that the
inspector said the backup alarm was hooked to, but, now, that switch was not on
there when I got the excavator.” Tr. 140. Ryder asked Justice if he installed
the additional, (i.e. manual), toggle switch on the machine and Justice told
him he did not. Justice did not know who installed the switch. Very oddly,
given the small number of personnel at the operation, while asserting at the
hearing that the switch had been installed after the excavator arrived at the
mine, no one knew who installed the switch. This claim, in the Court’s
estimation, is hard to accept as true and it is not accepted as credible. Ryder
reaffirmed his version of the events, affirming that “between the time that
[he] took the excavator up the hill and the time that the inspector saw this
condition, this switch had been added to it.” Tr. 141-42. Again, the Court
would comment that this story does not make sense and further it doesn’t
explain why anyone would add a manual backup switch to the equipment,
especially if the automatic switch was really working.

Ryder stated that he didn’t challenge
the 104(a) citation but took issue with the 104(d) order, stating:

I didn’t argue
with the 104, because evidently when I got to the machine, when I told him that
the backup alarm did work, it did work, because I’d had a problem with the
operator telling me one time that it didn’t work, and then when I went to the
machine, it was working. I had no problem with the 104 on that. But when he
come back and abated the one – the second citation as a (d) order, I thought
personally that was ridiculous, because we was working on the machine, doing
our best to get it right to get it fixed, because if something don’t work, it’s
hard to find out what it is unless you can work on it when it ain’t working. But
when it is working, you don’t know where the problem’s at.

Tr.
145.  

In this regard, Ryder noted that the
negligence regarding the backup alarm, Ex. P4, was marked as moderate but that
for Ex. P7, it was marked as high. Tr. 145-46. Regarding the pre-ops, for Ex.
P7 A, performed on the 13th, Ryder agreed that there is an X marked for the
backup alarm and he admitted that meant the alarm was not working. Tr. 147-48. Ryder
stated that he took possession of that pre-op exam form. Tr. 148. On that day,
he asserted that, upon noting the non-working backup alarm notation, he inquired
about it with Mr. Justice, asking him to move the equipment forward and back,
and that the alarm worked when he did that. Therefore, he agreed that Justice
“went ahead and operated the machine.” Tr. 150.

A more fantastic claim accompanied that
story, as Ryder attempted to explain why the pre-op form was crumpled up. Ryder
stated that he picks up the pre-ops. The procedure for transferring those
pre-ops forms from the operator who performed the pre-op to him is unusual, to
say the least.

Asked how the machine operator transfers
his pre-op report from his machine down to him, Ryder asserted:

[w]ell, it all
depends on the location that he’s in. If he’s working in a ditch where there’s mud
and there’s water and he’s a-digging a ditch, a lot of times they’ll just fold
it up in their hand and swing that machine around, and I’m standing there, and
they’ll pitch it on the ground to me, and I get it. But I always straighten
them back out.

Tr.
150-51. Thus, he asserted that the pre-op is delivered to him as a crumpled up
ball of paper. This method, he contended, prevents the pre-op report from
landing in a mudhole. Tr. 151.  Again, Ryder reasserted that the backup alarm was
“absolutely” working. Tr. 151.

As for Ex. P7 C, Ryder stated that
Harper made that pre-op, finding that the alarm was not working. Tr. 152. Ex. P7
D reflects another pre-op exam on the same day and also for the day shift made
by Ricky Justice. It was stated that this second pre-op was done because
Justice was a new operator of the equipment that day and each new operator must
perform his own pre-shift. Justice found oil leaks, but recorded nothing about any
backup alarm problem. Tr. 153. This led Ryder to conclude that, while the alarm
was not working on the 13th, it was working on the 14th.  Further, Ryder stated
that no backup alarm issues were reported to him on the 15th or 16th.
Tr. 154. As to the “oil leak” issue, Ryder maintained that there were no such
leaks on the equipment. Rather, there were only “oil spots” from the O-ring
that had blown. Tr. 154. However, this claim is also doubtful as he admitted
that the O-ring is located in an entirely different area of the equipment than
the area depicted in photograph in Ex. P6 A, and further Ryder agreed that any
oil depicted in Ex. P6 A would not be due to a blown O-ring. Tr. 163.

On
cross-exam, Ryder agreed that the excavator was available for use on the 16th
as it was not tagged out. As to his procedure, he was asked if, per his
deposition testimony, his practice is to write “corrected” when equipment has
been repaired, at the hearing he stated, “[n]ot always.” Tr. 158. The Court
inquired about the repair of the backup alarm. Ryder confirmed that a mechanic
came out from Wayne Equipment to fix the alarm, but he couldn’t give the name
of the individual, nor the date that the work was done. Tr. 160. Nor did he
know if there was a bill for that work, as the mechanic worked full-time for
Bevins Branch, which is part of the same company as Kentucky Fuel. Tr. 161.

Discussion

One
must not lose sight of the fact that each of the predicate citations,
identified in this proceeding as Citations 430, 431 and 432, were all conceded
as violations. That left the one matter in this litigation – whether 30 C.F.R.
§77.1606(c) was violated in Order 433. The Court concludes that the
preponderance of the credible evidence clearly establishes that standard 77.1606(c)
was violated and that Order 433 was both an unwarrantable failure and an
S&S violation, though, technically, to sustain the order, only the unwarrantable
failure finding must be explored, as the underlying section 104(d)(1) citation
was not contested and had become a final order. The evidence shows that the
backup alarm was not working on December 13th and 14th, and that
excessive oil or hydraulic leaks were also present, at least on December 14th. The
bushing issue, in Citation 431, found by the inspector on December 16th,
and later conceded to be a violation and a final order, also presented a risk
of fire.

The
credible evidence establishes that the backup alarm and oil accumulation defects
were recorded and the operator continued to use the excavator in contravention
of section 77.1606(c). The Respondent’s claims in defense are too tall to be
believed. Whether one considers – either the story that the excavator came with
the toggle switch, or the alternative story that it did not, but instead that some
unknown person at the mine later installed the switch, for purposes unknown; or
the story that the operator employed the highly unusual method of delivering
pre-shift reports by wadding them up into a ball, though a more plausible
method of delivery was first presented to the inspector; or the story that the
backup alarm was not working on December 14th, per Ex. P7 C, but must have been
fixed by someone that same day, as the other pre-shift box for that category, per
Ex. P7 D, was checked as okay – all of these stories are too much to be deemed
credible, collectively or individually. Very simply, the evidence establishes
that the equipment, though defective, continued to be used on December 16,
2014, in violation of 30 C.F.R. § 77.1606(c).

Significant and substantial
determination

A violation is properly designated as
S&S in nature if, based on the particular facts surrounding that violation,
there exists a reasonable likelihood that the hazard contributed to by the
violation will result in an injury or an illness of a reasonably serious nature.
Cement Div., Nat’l Gypsum, 3 FMSHRC 822, 825 (April 1981). In Mathies
Coal Co., 6 FMSHRC 1 (Jan. 1984), the Commission explained:

In order to
establish that a violation of a mandatory safety standard is [S&S] under National
Gypsum, the Secretary of Labor must prove:

(1) the
underlying violation of a mandatory safety standard; (2) a discrete safety
hazard—that is, a measure of danger to safety—contributed to by the violation;
(3) a reasonable likelihood that the hazard contributed to [by the violation]
will result in an injury; and (4) a reasonable likelihood that the injury in
question will be of a reasonably serious nature.

Id.
at
3-4; see also Austin Powder Inc. v. Sec’y of Labor, 861 F.2d 99,
103-04 (5th Cir. 1988), aff’g 9 FMSHRC 2015, 2021 (Dec. 1987) (approving
Mathies criteria). With respect to the third element of Mathies,
an S&S finding requires a determination that the violation contributes
significantly and substantially to the cause and effect of a hazard. U.S.
Steel Mining Co., Inc., 6 FMSHRC 1866, 1868 (Aug. 1984). Resolution of
whether a particular violation of a mandatory standard is S&S in nature
must be made assuming continued normal mining operations. U.S. Steel Mining
Co., Inc., 1 FMSHRC 1125, 1130 (Aug. 1985). Thus, consideration must
be given to both the time frame that a violative condition existed prior to the
issuance of a citation, and the time that it would have existed if normal
mining operations had continued. Bellefonte Lime Co., 20 FMSHRC 1250
(Nov. 1998); Halfway, Inc., 8 FMSHRC 8, 12 (Jan. 1986). In the
final analysis, the essence of an S&S violation is whether it is reasonably
likely that the hazard contributed to by the violation will result in an event
in which there are serious or fatal injuries. Bellefonte, 20 FMSHRC at
1254-55. 

For
the reasons discussed above, the Court finds that the cited standard, section 77.1606(c),
was violated. The Court agrees with the Secretary’s identification of the several
discrete safety hazards as

[t]he
accumulations of oil and other combustible materials, rags and leaves soaked in
oil, combined with a bare wire at one location not secured by a bushing and
touching the metal frame of the cab of the excavator created a safety hazard of
an ignition. Exhibits P-6 and P-5. The motion-detector back-up alarm being
inoperative while in reverse created another hazard of a collision. Exhibit
P-4.

Sec’y
Br. at 12.

The
Court further agrees that the violation presented a reasonable likelihood of
injury. Though there was no foot traffic on that day, it is undeniable that
foot traffic would occur during continued normal mining operations. Further,
the excavator could strike one of the other pieces of equipment at the site. A
manually operated toggle switch contravenes the essential purpose of backup
alarms – they are to operate automatically, as the standard, 30 C.F.R.
§77.410(a)(1), provides that mobile equipment with an unobstructed rear view
shall be equipped with a warning device that gives an audible alarm when the
equipment is put in reverse. And, though the backup alarm issue was sufficient
in its own right, there was the improperly bushed wire and the accumulations of
combustible materials, each independently presenting an S&S violation. Nor
can those findings be collaterally attacked now, as the backup alarm, the
bushing deficiency, and the accumulations of combustible material are all final
orders, with their special findings included. The failure to correct those
defects listed in the pre-shift check list, and those not listed or left blank,
each constituted equipment defects affecting safety and they were to be corrected
before the equipment is used. Testimony also supports the Court’s conclusion
that any injury which might occur would be reasonably serious. The cited
standard, requiring that equipment defects affecting safety shall be corrected
before the equipment is used, is inextricably tied to the hazardous conditions
found on the excavator by the inspector and cited in the predicate citations,
each of which were affirmed and became final orders of the Commission.

Unwarrantable failure determination

The Commission has spoken definitively on the subject of unwarrantable failure.
In ICG Hazard, LLC, 36 FMSHRC 2635 (Oct. 2014) (“ICG Hazard”), it
modified a judge’s finding of unwarrantable failure to a section 104(a)
citation, holding that such a finding must be based on an examination of
specific criteria. Noting that it has “defined ‘unwarrantable failure’ as
‘aggravated conduct constituting more than ordinary negligence,’” Manalapan
Mining Co., 35 FMSHRC 289, 293 (Feb. 2013) (citing Emery Mining Corp.,
9 FMSHRC 1997, 2001 (Dec. 1987)),” it reviewed that the criteria for
determining whether conduct is “aggravated,” includes

(1) the extent
of the violative condition, (2) the length of time that the violative condition
existed, (3) whether the violation posed a high degree of danger, (4) whether
the violation was obvious, (5) the operator’s knowledge of the existence of the
violation, (6) the operator’s efforts in abating the violative condition, and
(7) whether the operator had been placed on notice that greater efforts were
necessary for compliance. See IO Coal Co., 31 FMSHRC 1346, 1351-57 (Dec.
2009); Cyprus Emerald Res. Corp., 20 FMSHRC 790, 813 (Aug. 1998), rev’d
on other grounds, 195 F.3d 42 (D.C. Cir. 1999).

Id. at * 2637. Though
the Commission acknowledged that “not all factors may be relevant to every
case, all relevant factors must be examined.” Id.

Similarly, in Mach Mining, LLC, 34 FMSHRC 1769 (Aug. 2012) (“Mach Mining”),
the Commission earlier noted that

. . . the
‘unwarrantable failure’ terminology is taken from section 104(d) of the Act, 30
U.S.C. § 814(d), and refers to more serious conduct by an operator in
connection with a violation. In Emery Mining Corp., 9 FMSHRC 1997 (Dec.
1987), the Commission determined that unwarrantable failure is aggravated
conduct constituting more than ordinary negligence, and we characterized it in
such terms as “reckless disregard,” “intentional misconduct,” “indifference,”
or the “serious lack of reasonable care.” Id. at 2003-04. The Commission
has further recognized that whether conduct is “aggravated” in the context of
unwarrantable failure is determined by considering the facts and circumstances
of each case to determine if any aggravating or mitigating circumstances exist.
Factors relevant to that consideration include the length of time that the
violation has existed, the extent of the violative condition, whether the
operator has been placed on notice that greater efforts were necessary for
compliance, the operator’s efforts in abating the violative condition, whether
the violation was obvious or posed a high degree of danger, and the operator’s
knowledge of the existence of the violation. See Consolidation Coal Co.,
22 FMSHRC 340, 353 (Mar. 2000) (“Consol”); Cyprus Emerald Res. Corp.,
20 FMSHRC 790, 813 (Aug. 1998), rev’d on other grounds, 195 F.3d 42 (D.C. Cir.
1999); Midwest Material Co., 19 FMSHRC 30, 34 (Jan. 1997); Mullins
& Sons Coal Co., 16 FMSHRC 192, 195 (Feb. 1994); Peabody Coal Co.,
14 FMSHRC 1258, 1261 (Aug. 1992). **6 The Commission has repeatedly made clear
that it is necessary for a judge to consider all relevant factors in
determining whether an unwarrantable failure to comply with a standard has
occurred. Coal River Mining, LLC, 32 FMSHRC 82, 89 (Feb. 2010); Windsor
Coal Co., 21 FMSHRC 997, 1001 (Sept. 1999); San Juan Coal Co., 29
FMSHRC 125, 129-31 (Mar. 2007) (remanding unwarrantable determination for
further analysis and findings when judge failed to analyze all factors). While
an administrative law judge may determine, in his or her discretion, that some
factors are not relevant, or may determine that some factors are much less
important than other factors under the circumstances, all of the factors must be
taken into consideration and at least noted by the judge. IO Coal Co.,
31 FMSHRC 1346, 1351 (Dec. 2009).

Id.
at
1775.  

Here, upon weighing the
factors relevant to a finding of an unwarrantable failure, the Court concludes
that the operator’s conduct in using the excavator without correcting the
recorded defects amounted to aggravated conduct constituting more than ordinary
negligence.

Specifically, the very nature of the
operator’s conduct – that is, the decision to place the excavator into service
with explicit knowledge of existing hazardous defects – based on
previously-issued citations and pre-op hazard reports – is demonstrative of the
obviousness of the conditions, and its knowledge of them.  It is also
noteworthy that there was more than one defect that was allowed to exist on the
excavator and that these various defects presented discrete hazards, thus
increasing the degree of danger from the Respondent’s conduct. Additionally,
the evidence reflects that the subject excavator had been periodically operated
from at least the time the December 13th pre-op examinations identified
hazards, until the time Order 433 was issued three days later. In
view of these aggravating factors, the Court finds that the violation was an
unwarrantable failure. When
one also considers the toggle switch installation, and the varying stories
about its origination, the attempt to mislead the inspector about the backup
alarm’s functioning, the wadded up pre-shift check lists, those all add up to indifference
or a serious lack of reasonable care.

Penalty Determination

The Mine Act sets forth a
bifurcated penalty scheme under which the “Secretary proposes penalties before
a hearing based on information then available to him and, if the proposed
penalty is contested, the Commission affords the opportunity for a hearing and
assesses [the] penalty.” Hidden Splendor Res., Inc., 36 FMSHRC 3099,
3101 (Dec. 2014) (quoting Sellersburg Stone Co., 5 FMSHRC 287, 291
(Mar. 1983), aff’d, 736 F.2d 1147, 1151-52 (7th Cir. 1984)).
Under this bifurcated scheme, “[t]he Secretary’s regulations at 30 C.F.R. Part 100
apply only to the Secretary’s penalty proposals, while the Commission exercises
independent ‘authority to assess all civil penalties provided [under the Act]’
by applying the six criteria set forth in section 110(i) [of the Mine Act].” Id. (quoting 30
U.S.C. § 820(i)). The six section 110(i) factors are:

the
operator’s history of previous violations, the appropriateness of such penalty
to the size of the business of the operator charged, whether the operator was
negligent, the effect on the operator’s ability to continue in business, the
gravity of the violation, and the demonstrated good faith of the person charged
in attempting to achieve rapid compliance after notification of a violation.

30
U.S.C. § 820(i). Original
Sixteen to One Mine, Inc., 38 FMSHRC __, slip op. at 6 (May 3, 2016) (ALJ).

Findings on the Statutory Penalty
Criteria

History of previous
violations[12]

Kentucky Fuel
Corporation’s history of violations is reflected in Ex. P2. With the mine history
assessed at 10 points, that translates to a medium history, as does the 9
points given for its repeat violation history. Apart from the point structure,
the Court finds that the Respondent’s violation history may be fairly described
as medium.

Mine Size

Under the Part 100 point
system, the mine was awarded 9 points, which characterizes it to be in the
medium range and the controlling entity category, at 8 points, was determined
to be in the high medium range. Apart from the point structure, the Court finds
that the Respondent’s mine size may be fairly described, at the least, as medium.

Ability to continue in
business

There was no claim that
the proposed special assessment amount would impair the mine’s ability to continue
in business.

Good Faith

This was a non-factor
under the Part 100 calculation. The operator did tag out the equipment but this
occurred in the context of order being issued. The Court also finds that the
good faith factor does not impact the penalty determination.

Negligence

As set forth above, the
Court agrees that, in light of the pre-shift safety check list, the negligence
was properly characterized as high. The Court has found that the violation was
unwarrantable.

Gravity  

The Court, having found
that the violation was significant and substantial, agrees that the injury was
reasonably likely to occur, that, at a minimum, lost workdays or restricted
duty is the injury that could be reasonably expected, with one person affected.

Based on the application of the statutory criteria, as set forth at
30 U.S.C. §820(i), the Court imposes a civil
penalty of $21,900.00 for the violation of 30 C.F.R. §77.1606(c).

ORDER

For the reasons set forth above, Order No. 8296433 is
AFFIRMED. Respondent is ORDERED TO PAY the civil penalty of
$21,900.00 for that violation. Upon PAYMENT of the full civil penalty
hereby imposed, the captioned proceeding is DISMISSED.

/s/
William B. Moran

William
B. Moran

Administrative
Law Judge

Distribution (Certified Mail)

Dominique
C. Gutierrez, Esq., U.S. Department of Labor, Office of the Solicitor, 211 7th
Avenue North, Suite 420, Nashville, TN 37219

James
F. Bowman, P.O. Box 99, Midway, WV 25878

[1] The predicate
for correcting defects, namely finding them, is expressed in the same standard,
at subsection (a), which requires that “[m]obile loading and haulage equipment
shall be inspected by a competent person before such equipment is placed in
operation. Equipment defects affecting safety shall be recorded and reported to
the mine operator.” 30 C.F.R. § 77.1606(a).

[2] The
pre-operational exam was more frequently referred to by the parties as the
“pre-op” exam.

[3] The inspector
recommended Order 433 for special assessment and the recommendation was adopted
by MSHA. The Secretary then proposed a specially assessed civil penalty of
$21,900.00.

[4] As the
inspector further explained:

The pre-op
examination record that the operator provided me with actually went back to
December 14th of 2014. So it documented the hazards that I wrote at noon, you
know, [at] 12[:]13 [p.m.], 12[:]14, [and] 12[:]15. So the operator was aware,
due to the fact that he had initialed at the bottom of those pre-ops, the fact that
the equipment operator had noted those hazards existing. So it wasn’t until I was
provided with those records that I knew that the operator actually knew that
that had occurred.

Tr.
41.

[5] As the
inspector explained, the equipment hours figure represents approximately the
number of hours “that the engine has actually ran [sic].” Tr. 123. Those
numbers indicate that the equipment ran about 10 hours between December 13th
and 14th, 2014.

[6] Whether the
manual toggle switch was present when delivered to the mine, or installed later
at the mine, it is hard to appreciate the value of such a non-automatic device.

[7] In issuing
Order 433, the inspector listed that if an equipment fire were to occur, a
miner (with one person affected) would be reasonably likely to receive a burn
resulting in lost work days or restricted duty. Tr. 74-75. The involved
standard, 77.1606(c), had been cited seven times in the last two years. Tr. 75.

[8] The inspector
rejected the possibility that the condition had been repaired and that it then
reoccurred because “if that was the case, it would have been documented by the equipment
operator as repaired, which is a circle, on the pre-op records. . . . [and t]he
extent of the accumulation, it had not been removed from the time that the
machine had been dropped off.” Tr. 78.

[9] Asked to
explain why he marked the gravity and negligence as more severe in Order 433
than he had for the earlier issued citations, the inspector stated:

[t]he underlying
citations were issued at moderate negligence because the mine operator does
train his miners to perform proper pre-operational exams prior to placing the
machine in service. The reason I cited the order as high is because there were
no mitigating circumstances after the operator was provided [with the] record
from the equipment operator that those hazards existed, [ ] they weren’t corrected.

Tr.
81-82. As noted, the matter was specially assessed at $21,900.00, per Ex. P15,
versus the $4,600.00 figure that a regular assessment would have yielded under
Part 100. Also, Ex. P14, the underlying “d” citation, was admitted into the
record, as it had become a final order. Tr. 85.  

[10]
The Court did acknowledge that, in Order 433, the inspector referred to “[e]xcessive
oil leaks.” Tr. 106. Respondent made much of the description as an “oil leak.” The
problem is that it was not a legitimate or pertinent issue. The inspector did
not dispute that oil leaks had been corrected prior to his issuance of the
citation for the accumulations, stating that the “oil leaks would have been
corrected or I would have physically seen oil leaks.” Tr. 104. The inspector also
agreed that for Order 433, the accumulations violation was abated in two
minutes. Tr. 102. When he went back to the excavator at 18:02 or 18:04, (i.e.
at 6:02 and 6:04 p.m.) he did not observe any oil leaks at that time. Asked to
consider that if oil leaks had been previously written up two days earlier, and
then to postulate that one subsequently sees the machine after that and that no
leaks are then present, if the leaks could be considered to have been repaired,
the inspector agreed with that hypothetical.  Tr. 103. The inspector was asked,
in light of that hypothetical, why he included excessive “oil leaks” in Order

433. His response was that “[t]hat is what the operator recorded on his
     pre-operational exam.” Tr. 103. He agreed that there was no evidence of any
     leaks after the pre-op exam for the 14th, as his citation was issued for
     “accumulations of oil [which] were only there because of the preexisting oil
     leaks.” Tr. 104.  He discounted the notion that the oil could’ve been from a
     spill, because it was over the entire equipment. Tr. 104. Again, the inspector
     did not dispute that the oil leaks were corrected at some point prior to his
     issuing the order on the 16th. Tr. 104. The inspector expressed that the photos
     in Exs. P6 A-D, are supporting documentation for Citation 432. They relate to Citation
     432, he explained, as contributing to the issuance of that order.  As
     Respondent continued to refer to the problem as “oil leaks,” though that was
     never the inspector’s contention, the Court finally pointed this out: “Mr.
     Bowman, you’ve hit this like three times now. . . . [h]e said there was no oil
     leak . . . . [h]is focus was accumulation of combustible materials . . . .” Tr.
434. The inspector stated that he wrote excessive oil leaks instead of accumulation
     of oil-soaked material because that is the condition miners are trained to look
     for, not accumulations of combustible materials, and therefore he was documenting
     the defects that the miner was recording for the operator to address, using the
     term employed in the pre-shift check list. Id.

[11] Ryder confirmed
that, per Ex. P4 A, the two red wires which connect to the toggle back up
switch, is the manually operated backup switch. Tr. 142.

[12] The mine size,
its history of violations, and its good faith, were all calculated the same
under the regular and special assessment. That is, under the special assessment
for those categories, there was no increase in the point calculations over the
points awarded under the regular assessment.