Larry M. Schmelzer, employed by National Steel Pellet Company

Plain-English summary

National Steel Pellet Company operated an open pit taconite mine in Minnesota. After a blasting accident involving undetonated ANFO, MSHA cited the company for misfire-handling violations and charged four supervisory employees under section 110(c) of the Mine Act. The parties settled before the judge resolved whether the disconnected explosives legally qualified as misfires. The order approved $1,000 penalties for Larry M. Schmelzer and Arthur C. Baldwin, reduced from $2,000 each, and dismissed the proceedings against Donald E. Healy and David T. Bath. The order states that the penalties satisfied the two citations against Schmelzer and Baldwin.

Decision snapshot

• Cited standards: 30 C.F.R. § 56.6311(b) and (c)
• Outcome: The settlement was approved, Schmelzer and Baldwin each owed $1,000, and the proceedings against Healy and Bath were dismissed.
• Key point: The settlement resolved the personal-liability cases without an adjudicatory ruling on whether the disconnected explosives were misfires under the cited standards.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
2 SKYLINE, 10th FLOOR
5203 LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22041
December 7, 2000

SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDINGS
MINE SAFETY AND HEALTH :
ADMINISTRATION, (MSHA), : Docket No. LAKE 2000-52-M
Petitioner : A.C. No. 21-00249-05679-A
v. :
: Steel Pellet Mine
LARRY M. SCHMELZER, employed :
by National Steel Pellet Company, :
Respondent :
:
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH :
ADMINISTRATION, (MSHA), : Docket No. LAKE 2000-53-M
Petitioner : A.C. No. 21-00249-05680-A
v. :
: Steel Pellet Mine
DONALD E. HEALY, employed :
by National Steel Pellet Company, :
Respondent :
:
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH :
ADMINISTRATION, (MSHA), : Docket No. LAKE 2000-54-M
Petitioner : A.C. No. 21-00249-05681-A
v. :
: Steel Pellet Mine
DAVID T. BATH, employed :
by National Steel Pellet Company, :
Respondent :
:
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH :
ADMINISTRATION, (MSHA), : Docket No. LAKE 2000-55-M
Petitioner : A.C. No. 21-00249-05682-A
v. :
: Steel Pellet Mine
ARTHUR C. BALDWIN, employed :
by National Steel Pellet Company, :
Respondent :

                                       1404

                                       DECISION

Appearances: Robert A. Cohen, Esq., Jennifer Honor, Esq., Office of the Solicitor,
U.S. Department of Labor, Arlington, Virginia, for the Petitioner;
R. Henry Moore, Esq., Buchanan Ingersoll, Pittsburgh,
Pennsylvania,
for the Respondents.

Before: Judge Feldman

    These consolidated proceedings, brought by the Secretary under section 110(c) of the

Federal Mine Safety and Health Act of 1977 (the Mine Act), 30 U.S.C. § 820(c), concern
whether civil penalties should be assessed against each of four supervisory personnel of
National Steel Pellet Company because they “knowingly authorized, ordered, or carried out”
violations of sections 56.6311(b) and (c) of Part 56 of the Secretary’s mandatory safety standards
governing the handling and disposal of misfires. 30 C.F.R. § 56.6311(b) and (c). A hearing in
these matters was conducted from October 31 through November 2, 2000, in Duluth, Minnesota.
At the beginning of the third day of trial, the parties informed me that they had reached a
settlement agreement. This decision formalizes approval of the terms of the parties’ agreement.

    The underlying facts that gave rise to these proceedings essentially are undisputed.

These proceedings concern a non-fatal blasting accident that occurred in the early morning on
March 4, 1998, at National Steel Pellet Company’s (National’s) open pit taconite mine located
near Keewatin in Itasca County, Minnesota. The accident occurred when the teeth of a bucket on
a Caterpillar Model 5230 hydraulic front shovel, operated by Lois Dunn from the operator’s cab
located approximately 18 feet above ground level, apparently detonated a significant quantity
of ANFO (ammonium nitrate and fuel oil mixture) that remained after a December 15, 1997,
shot of Bench No. 1510-85. The Caterpillar Model 5230 hydraulic front shovel is a very large
piece of earth moving equipment that weighs approximately 700,000 pounds.

    The dimensions of Bench No. 1510-85 were approximately 1,200 feet long by 150 feet

wide by 40 feet high. National’s blasting records reflect the December 15, 1997, blast was
accomplished by loading a total of 521,970 pounds of ANFO mixture into 199 drill holes spaced
between 28 to 30 feet apart. The drill holes were 16 inches in diameter and approximately
40 feet in depth. The drill holes were positioned in four rows that extended the full length of
the bench. Each hole contained two primers and approximately 2,500 pounds of explosives.
The loaded holes were connected with plastic down-line tubing that was designed to effectuate
a sequential detonation.

    Bench No. 1510-82 was located adjacent to Bench No. 1510-85. Bench No. 1510-82 was

blasted on November 5, 1997. While Bench No. 1510-82 was being removed, Bench 1510-85
was being loaded in preparation for the December 15, 1997 shot. During the course of
removing the blasted material from Bench No. 1510-82, a shovel operator mistakenly dug into the
outer perimeter of Bench No. 1510-85, causing the plastic down-line tubing to become dislodged

                                          1405

from the explosive material that had been placed in approximately six vertical drill holes near the
overburden. The plastic tubing could not be retrieved from the steep slope of the embankment.
In order to preserve the sequential design of the shot, the disconnected holes were rewired by
bypassing the explosive material in the six holes. Thus, National knowingly removed these six
holes from the detonation sequence at Bench No. 1510-85.

   National reportedly believed the explosive materials loaded in these disconnected holes

would be dissipated by the force of the blast. National was wrong. It was estimated that the
amount of ANFO accidentally detonated on March 4, 1998, by Dunn’s hydraulic shovel
was comparable to the amount of ANFO used to destroy the Federal Building in Oklahoma City,
Oklahoma.

   As a result of an accident investigation conducted by the Mine Safety and Health

Administration (MSHA), National was cited for violations of sections 56.6311(b) and (c) that
govern the proper procedures for protecting personnel from the hazards caused by misfires.
National did not contest the cited violations.

   In addition, as a result of MSHA’s investigation, Larry M. Schmelzer, National’s

Senior Mining Engineer, Day Pit Manager David T. Bath, and, Area Manager Arthur C. Baldwin,
were each charged with knowingly authorizing, ordering, or carrying out violations of sections
56.6311(b) and (c). The Secretary sought to impose civil penalties of $2,000.00 on each of these
management personnel, consisting of $1,000.00 for each of the two cited violations. In addition,
National’s Division Manager, Donald E. Healey, was charged with knowingly authorizing,
ordering, or carrying out a violation of section 56.6311(b) for which the Secretary sought to
impose a civil penalty of $1,000.00.

   Specifically, sections (b) and (c) of the cited mandatory safety standard provide:

           § 56.6311 Handling of misfires.

                   (b) Only work necessary to remove a misfire and protect the
           safety of miners engaged in the removal shall be permitted in the
           affected area until the misfire is disposed of in a safe manner.

                   (c) When a misfire cannot be disposed of safely, each
           approach to the area affected by the misfire shall be posted with a
           warning sign at a conspicuous location to prohibit entry, and the
           condition shall be reported immediately to mine management.




                                           1406

    The Commission discussed the criteria for determining if there is personal liability under

section 110(c) of the Mine Act in Lefarge Construction Materials, and Theodore Dress,
20 FMSHRC 1140 (October 1998). The Commission stated:

   The proper inquiry for determining liability under section 110(c) is whether the
   corporate agent knew or had reason to know of a violative condition. Kenny
   Richardson, 3 FMSHRC 8, 16 (Jan. 1981), aff’d on other grounds, 689 F.2d (6th
   Cir. 1982), cert. denied, 461 U.S. 928 (1983); accord Freeman United Coal
   Mining Co. v. FMSHRC, 108 F.3d 358, 362-64 (D.C. Cir. 1997). To establish
   section 110(c) liability, the Secretary must prove only that an individual knowingly
   acted, not that the individual knowingly violated the law. Warren Steen Constr.
   Inc., 14 FMSHRC 1125, 1131 (July 1992) (citing United States v. In’l Minerals &
   Chem. Corp., 14 FMSHRC 1125, 1131 (July 1992) (citing United States v. Int’l
   Minerals & Chem. Corp., 402 U.S. 558 (1971)). An individual acts knowingly
   where he is “in a position to protect employee safety and health [and] fails to act
   on the basis of information that gives him knowledge or reason to know of the
   existence of a violative condition.” Kenny Richardson, 3 FMSHRC at 16. Section
   110(c) liability is predicated on aggravated conduct constituting more than
   ordinary negligence. BethEnergy Mines, 14 FMSHRC at 1245.

20 FMSHRC at 1148.

    Determining whether an agent’s conduct constitutes the requisite aggravated conduct to

impose personal liability under section 110(c) requires consideration of the degree of risk posed to
miners by the cited violations. It is axiomatic that, “[t]he risk reasonably to be perceived defines
the duty to be owed.” Palsgraf v. Long Island R.R., 248 N.Y. 339 (1928). Thus, when
violations expose miners to a high degree of danger, a heightened standard of care is required of
management personnel. 20 FMSHRC at 1147. A good faith belief that a condition is not unsafe
is not a defense to 110(c) liability if such belief is unreasonable. Id. at 1150.

    Section 56.6000 of the Secretary’s regulations set forth the definitions of the terms

that are used in the Secretary’s regulations governing the safe use of explosives. 30 C.F.R.
§ 56.6000. Section 56.6000 defines the term "misfire" as:

           The complete or partial failure of explosive material to detonate as
           planned. The term is also used to describe the explosive material
           itself that has failed to detonate.

(Emphasis added).

                                           1407

    During the first two days of the hearing, the respondents denied liability based on

their assertion that a “planned detonation” is a condition precedent to the applicability of
sections 56.6311(b) and (c) concerning misfires. The respondents note that the ANFO, and the
related blasting caps and primers, were intentionally disconnected and bypassed during the
sequential December 15, 1997, blast. Thus, the respondents argue the subject explosives were
not misfires because there was no "failure of explosive material to detonate as planned " as
required by section 56.6000 because detonation of these disconnected loaded holes was not
attempted.

    At trial, the Secretary maintained that misfires commonly occur when explosives, for

whatever reason, become detached from the connecting detonating cord. Thus, the Secretary
asserts that explosives are "misfires" regardless of whether the explosives were intentionally, or
unintentionally, disconnected from the blasting cord.

    The parties’ settlement agreement precludes the adjudicatory resolution of the

applicability of sections 56.6311(b) and (c) to the March 4, 1998, accidental blast. However,
I note, parenthetically, that a safety standard must be construed in accordance with its intended
purpose. Consolidation Coal Company, 15 FMSHRC 1555, 1557 (August 1993). Thus, when
interpreting a regulatory standard, the ordinary meaning of words must prevail unless such
meaning thwarts the purpose of the regulatory standard or otherwise leads to an absurd result.
Emery Mining Corporation, 9 FMSHRC 1997, 2001 (December 1997).

    At the beginning of the third day of trial, the parties proffered a verbal settlement

agreement that was approved on the record. The settlement terms were formalized in a written
joint motion to approve settlement filed on November 15, 2000. Pursuant to the terms of the
agreement, Larry M. Schmelzer and Arthur C. Baldwin have each agreed to a reduction in total
civil penalty, from $2,000.00 to $1,000.00, consisting of $500.00 for each of their knowing
violations of the mandatory regulatory safety standards in subsections (b) and (c) of section
56.6311. The parties’ settlement terms include the dismissal of the civil penalty cases against
Donald E. Healy and David T. Bath because the evidence is inadequate to demonstrate Healey
or Bath knowingly violated either of the cited mandatory safety standards.

                                         ORDER

    I have considered the representations and documentation submitted in this case,

and I conclude that the proffered settlement is appropriate under the criteria set forth in
Section 110(i) of the Act. WHEREFORE, the motion for approval of settlement
IS GRANTED, and IT IS ORDERED that Larry M. Schmelzer and Arthur C. Baldwin
each pay, within 30 days of the date of this Decision, as the Secretary shall direct, a total
civil penalty of $1,000.00 in satisfaction of the two citations in issue. Upon timely receipt
of payment, Docket Nos. LAKE 2000-52-M and LAKE 2000-55-M ARE DISMISSED.

   IT IS FURTHER ORDERED, consistent with the parties’ agreement, that the civil

                                           1408

penalty proceedings in Docket Nos. LAKE 2000-53-M and LAKE 2000-54-M brought by the
Secretary against Donald E. Healy and David T. Bath ARE DISMISSED.

                                        Jerold Feldman
                                        Administrative Law Judge

Distribution:

Robert A. Cohen, Esq., Jennifer Honor, Esq., Office of the Solicitor, U.S. Department of Labor,
4015 Wilson Blvd., Suite 400, Arlington, VA 22203 (Certified Mail)

R. Henry Moore, Esq., Buchanan Ingersoll Professional Corporation, One Oxford Centre,
301 Grant Street, 20th Floor, Pittsburgh, PA 15219 (Certified Mail)

/mh

                                         1409