Secretary of Labor v. Tilden Mining Company, LC

Plain-English summary

MSHA cited Tilden Mining for failing to test and record the resistance of extension cords used in the mine's electrical grounding system. The Commission held that extension cords and power cables are components of a grounding system under 30 C.F.R. § 56.12028 because the system cannot protect miners if any link lacks continuity. It rejected Tilden's argument that the rule applies only to stationary grounding facilities and found the Secretary's interpretation reasonable. The Commission also held that applying the standard to cords was an interpretive clarification, not a substantive rule requiring notice-and-comment procedures. Tilden had actual notice through MSHA's 2003 policy manual and could not reasonably rely on a nonprecedential ALJ decision to avoid compliance.

Decision snapshot

• Cited standard: 30 C.F.R. § 56.12028
• Outcome: The Secretary's summary-decision victory and both citations were affirmed.
• Key point: Grounding-system testing covers extension cords and power cables because every component must maintain continuity for the system to work.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW
COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, DC  20004-1710

August 20. 2014

SECRETARY
OF LABOR,                               :

MINE SAFETY AND HEALTH                    :

ADMINISTRATION (MSHA)                       :     

:

v.
                                                 :            Docket No. LAKE
2008-503-M                                                                                     
    :     

TILDEN
MINING COMPANY, LC                 :

BEFORE:
 Jordan, Chairman; Young, Cohen, Nakamura, and Althen, Commissioners

DECISION

BY
THE COMMISSION:

This civil penalty proceeding arises
under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2012)
(“Mine Act”).  At issue is whether the Administrative
Law Judge correctly determined (1) that extension cords should be considered
part of a grounding system subject to continuity and resistance testing under
30 C.F.R. § 56.12028[1] and (2) that the Secretary’s position
requiring such testing did not constitute a substantive change in the standard
requiring notice-and-comment rulemaking. 

For the reasons that follow, we conclude
that grounding systems include extension cords and power cables, and
that the Secretary did not need to undertake rulemaking.  Accordingly, we
affirm the Judge’s decision.

I.

Factual and Procedural Background

Tilden
Mining Company, LC, operates the Tilden Mine, a surface iron-ore mine in
Michigan.  On April 16, 2008, an inspector from
the Department of Labor’s Mine Safety and Health Administration (MSHA) issued Citation No. 6400301 to Tilden, and on April 20, 2008, issued
Citation No. 6400312 to Tilden.  Both citations alleged a violation of 30
C.F.R.

§ 56.12028 for failing to test and record the resistance of extension cords
used as part of the grounding system at the mine.  Tilden subsequently
contested the citations and proposed penalties before a Commission Administrative
Law Judge.

On April 18, 2011, the Judge
affirmed the citations in a decision on cross-motions for summary decision.  33
FMSHRC 876, 884-85 (Apr. 2011) (ALJ).  The Judge ruled that extension cords and
power cables must be tested for continuity and resistance because they are integral
components of any grounding system.  The Judge reasoned that a grounding system
is only as protective as its weakest link, and that it is critical to ensure
that all the necessary components of the grounding system are fully functional,
including extension cords and cables.  Id. at 881.

The
Commission granted Tilden’s petition for discretionary review.

II.

Disposition

On review, Tilden claims that the Judge’s holding conflicts with Hibbing
Taconite Co., 21 FMSHRC 346, 355 (Mar. 1999) (ALJ), in which the Judge declined
to require continuity and resistance testing on extension and power cords under
section 56.12028.  The operator further contends that the Judge in the instant
case failed to recognize that grounding systems are stationary and involve
ground beds and similar fixed facilities, while extension and power cords are
mobile, scattered all over a facility, and capable of being plugged and
unplugged routinely.  

The
operator also asserts that even if MSHA’s new rule is interpretive in nature,
rulemaking was required because the rule constituted a significant change in
interpretation.  The operator argues that MSHA’s original 1988 Program Policy
Manual (PPM) stated that continuity and resistance testing “do[…] not apply to
grounding conductors in trailing cables, power cables, and cords which provide
power to portable or mobile equipment” and that MSHA’s 1994 Program Policy
Letter (PPL) subsequently reversed its position on this issue.  TM Br. at 13-14,
quoting PPM at 52 (1988).  The operator also argues that MSHA’s allegedly
inconsistent interpretations and lack of enforcement under its current
interpretation render the Secretary's position unreasonable and unworthy of
deference. 

Finally,
Tilden claims that it did not have notice that grounding systems could include
extension cords without any notice-and-comment rulemaking because it reasonably
relied upon the Hibbing Taconite decision to the contrary. 

A.    The Secretary’s interpretation
of section 56.12028 as including extension cords and power cables within the
definition of “grounding systems” is reasonable and entitled to deference.

The
term “grounding systems” is undefined in the standard, and the standard is
silent with regard to whether extension cords and power cables are part of a
“grounding system.”   Accordingly, we must defer to the Secretary’s interpretation
of the standard as long as it is reasonable.  Wolf Run Mining Co., 32
FMSHRC 1669, 1678–82 (Dec. 2010) (examining whether Secretary’s interpretation
of own regulation is reasonable and entitled to deference); Consolidation
Coal Co., 14 FMSHRC 956, 966-69 (June 1992); Bowles
v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945); Sec’y
of Labor v. Cannelton Indus., Inc., 867 F.2d 1432, 1435
(D.C. Cir. 1989).  

Here,
we conclude that the Secretary’s interpretation is reasonable.  In order for a
grounding system to function, it is essential that extension cords and power
cables work properly.  Extension cords supply power to tools and to portable
and mobile equipment.  The cords, along with all other aspects of the grounding
system, must be tested for continuity, in order to prevent electric shocks to
miners.  Conducting a continuity test assures that the equipment being used is
connected directly to the ground prong, and that the grounding circuit is
complete.  A grounding system is only as protective as its weakest link, which
is why it is critical to ensure that all the necessary components of the grounding
system are fully functional, including extension cords and cables.  Otherwise,
the grounding system will cease to function.  Cf. Daanen &
Janssen, Inc., 20 FMSHRC 189, 193 (Mar. 1998) (“Because the definition of the
term ‘system’ entails an interrelationship of component parts, it follows that
for the system to be considered functional, each of its component parts must be
functional.”).

We
find unpersuasive the operator’s argument that the
definition of “grounding systems” in the 1994 PPM, when read in conjunction
with the three sections preceding section 56.12028, shows that extension cords and
cables were not contemplated to be within section 56.12028.  The three sections
preceding section 56.12028 focus on specific types of equipment that
must be connected to a grounding system, as opposed to the definition of
“grounding system” itself.[2]

Similarly
unavailing is the operator’s argument that “grounding systems” are
stationary and involve ground beds and similar fixed facilities, and therefore do
not include extension cords and power cables, which are mobile and scattered
all over a facility and are capable of being plugged and unplugged routinely. 
This distinction is contradicted by the language of the standards.  Section
56.12025 broadly requires grounding of any metal-encased electrical circuit. 
Furthermore, section 56.12027 applies to any mobile piece of equipment
powered by trailing cables.  Therefore, any distinction between the stationary
nature of ground beds and the mobile nature of extension cords is unpersuasive.

We also reject the operator’s argument that MSHA’s application
of extension cords to “grounding systems” imposes an undue burden on mine operators. 
Although Tilden asserts that, under the Secretary’s interpretation, operators
would be required to test thousands of additional cords, Tilden offers no
factual support for this claim.[3]

Accordingly, we conclude that the Secretary's inclusion of extension cords
within the definition of “grounding systems” is reasonable and deserves
deference.

B.     The Secretary’s application
of extension cords and power cables to “grounding systems” is an interpretive
rule that did not require notice-and-comment rulemaking.

We
find that the Secretary’s approach did not require additional rulemaking.  The Administrative
Procedure Act (APA) has several exceptions to the mandatory proposed rulemaking
procedures for administrative agencies.  The relevant exception here is that
notice-and-comment rulemaking procedures do not apply to “interpretative rules,”
as opposed to legislative rules, which would require notice-and-comment
rulemaking.  5 U.S.C.

§ 553(b)(3)(A), (B).  A legislative rule is one that substantively amends the
language of a regulation, whereas an interpretive rule clarifies or explains the
regulation’s existing language.  See, e.g., Philips
Petroleum Co. v. Johnson, 22 F.3d 616, 619-21 (5th Cir. 1994); Gibson
Wine Co. v. Snyder, 194 F.2d 329, 331-33 (D.C. Cir. 1952).

We
agree with the Judge that the Secretary’s application of extension cords to
“grounding systems” clarifies and explains the language of the standard, and is
thus an interpretive rule.  33 FMSHRC at 881-83.  As stated above, the
Secretary’s approach is a reasonable interpretation of section 56.12028.  Accordingly,
it did
not require notice-and-comment rulemaking.

C.    The existence of
the 1988 PPM does not require the Secretary to undertake notice-and-comment
rulemaking.

The
fact that the Secretary’s interpretation is arguably inconsistent with his
prior interpretation in the 1988 PPM does not require the Secretary to
undertake notice-and-comment rulemaking.  The operator argues that the 1988 PPM
had expressly exempted “grounding conductors in trailing cables, powers cables,
and cords which provide power to portable or mobile equipment” from continuity
and resistance testing requirements, and that MSHA’s 1994 PPL subsequently
reversed its position on this issue.  TM Opening Br. at 13-14, quoting PPM
at 52 (1988).  Tilden relies on the D.C. Circuit’s decision in Alaska
Professional Hunters v. Federal Aviation Administration, 177 F.3d 1030,
1034 (D.C. Cir. 1999), which states that “[w]hen an agency has given its
regulation a definitive interpretation, and later significantly revises that
interpretation, the agency has in effect amended its rule, something it may not
accomplish without notice and comment.” 

The
operator’s reliance on Alaska Hunters is misplaced.  That decision is readily
distinguishable from the present case.[4] 
Alaska Hunters has been interpreted by the D.C. Circuit narrowly.  Under
the decision, a requirement for notice-and-comment rulemaking was only
triggered when an agency’s previous interpretation was sufficiently definitive
to justify a regulated party detrimentally relying on it.  See, e.g.,
Air Transp. Ass’n of America, Inc. v. FAA, 291 F.3d 49, 56-58 (D.C. Cir.
2002); Honeywell Int’l, Inc. v. Nuclear Regulatory Comm’n, 628 F.3d 568,
579-80 (D.C. Cir. 2010).  MSHA’s original 1988 PPM was not definitive.  Moreover,
the operator cannot show substantial and justifiable reliance because it only
alleges reliance on a non-precedential decision of an Administrative Law Judge
rather than on MSHA’s prior interpretation.

MSHA’s 1988 interpretation
was not definitive because it was internally inconsistent and therefore ambiguous
with respect to whether section 56.12028 required annual testing of cables and
cords.  The operator’s assertion that the 1988 PPM excepted the cables at issue
here, stating that the annual test “does not apply to grounding conductors in
trailing cables, power cables and cords,” was contradicted by the very next sentence
in the PPM, which stated that the same cables “require[d] more frequent
testing,” even though such testing was not mandated under any other
standard.[5]  PPM at 52 (1998).  MSHA’s
transition from the ambiguous interpretation in the 1988 PPM to the clarified
interpretation in the 1994 PPL therefore did not require notice-and-comment
rulemaking.  In Darrell Andrews Trucking, Inc. v. Federal Motor Carrier
Safety Administration, 296 F.3d 1120, 1126 (D.C. Cir. 2002), the
D.C. Circuit held that prior regulatory guidance that “offer[ed] some support
for the positions of both” parties could therefore “only be described as—at
best—ambiguous.”  A change to ambiguous guidance does not require notice-and-comment
rulemaking because it “cannot be said to mark a definitive interpretation from
which the agency’s current construction is a substantial departure.”  Id.

Furthermore, the operator
cannot show substantial and justifiable reliance here because: (1) it does not
allege any reliance on the prior interpretation, and any reliance it might
allege would not be sufficiently substantial; (2) the operator’s alleged
reliance on Hibbing Taconite does not trigger the Alaska Hunters
rule; and (3) even if the operator’s alleged reliance on Hibbing Taconite
triggered Alaska Hunters, such reliance would not be justifiable in
light of later events.

In Alaska Hunters,
the Court placed great emphasis on the fact that the Alaskan guide pilots
substantially relied on the prior agency interpretation when they made capital
expenditures and significantly altered business practices.  177 F.3d at 1035.  Alaska
Hunters does not apply here because the operator did not make any such
investments or other significant business decisions in reliance on MSHA’s prior
interpretation.  Cf. Ass’n of Am. R.R. v. Dep’t of Transp., 198
F.3d 944, 950 (D.C. Cir. 1999).  Indeed, the operator does not assert that
it made any business decisions in reliance on the interpretation prior to the
interpretive change in 1994.  Rather, the operator asserts only that it relied
upon the Judge’s ruling in Hibbing Taconite from 1999 onward to justify
its non-compliance with MSHA’s interpretation of the standard. 

The operator’s reliance on
the Judge’s decision in Hibbing Taconite does not trigger application of
Alaska Hunters.  It is clear that ALJ decisions have no precedential
value.  Commission Procedural Rule 69(d), 29 C.F.R. § 2700.69(d).  Under the operator’s theory of reliance, however,
MSHA would nonetheless be required to engage
in notice-and-comment rulemaking any time it enforced a regulation in a manner
contrary to a non-precedential decision by a Judge.  This theory has no support
in the reasoning of Alaska Hunters or its progeny, which deal only with
reliance on a definitive prior agency interpretation.

Even if, assuming arguendo,
substantial reliance on a non-precedential adjudication
could trigger Alaska Hunters’ notice-and-comment rulemaking requirement,
such rulemaking would still not be necessary here because the operator’s
reliance is unjustifiable in light of subsequent events.  As the operator
itself concedes, MSHA reiterated its 1994 interpretation of “grounding systems”
when it published the revised PPM in 2003.  PPM at 44-45 (2003).  Thus, even if
the operator had erroneously believed that MSHA had abandoned its 1994
interpretation when the Secretary decided not to appeal in the Hibbing
Taconite decision, the 2003 PPM put the operator on notice that it had
incorrectly perceived MSHA’s position.

D.    The
operator had actual notice of MSHA’s position regarding its interpretation of “grounding
systems.”

As stated above, MSHA reiterated
its 1994 interpretation of “grounding systems” when it published the revised
PPM in 2003, five years before the Secretary undertook the current enforcement
action.  Therefore, the 2003 PPM provided actual notice to the operator of
MSHA’s enforcement position.  Due process is satisfied when an agency gives
actual notice of its interpretation prior to enforcement.  See, e.g.,
Consolidation Coal Co., 18 FMSHRC 1903, 1907 (Nov. 1996) (holding that
actual notice was provided by MSHA prior to issuance of citation); see also
Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1329 (D.C. Cir. 1995) (reasoning
that agency’s pre-enforcement warning to bring about compliance with its
interpretation will provide adequate notice).

III.

Conclusion

For
the reasons stated above, we affirm the Judge’s denial of Tilden’s motion for
summary decision and his granting of the Secretary’s cross-motion for summary
decision.

/s/
Mary Lu Jordan            

Mary
Lu Jordan, Chairman

/s/
Michael G. Young

Michael
G. Young, Commissioner

/s/
Robert F. Cohen

Robert
F. Cohen, Jr., Commissioner

/s/
Patrick K. Nakamura

Patrick
K. Nakamura, Commissioner

/s/
William I. Althen                                                                                                     
                      William I. Althen, Commissioner

[1]  Section 56.12028 provides: 

Continuity and resistance of grounding
systems shall be tested immediately after installation, repair, and
modification; and annually thereafter.  A record of the resistance measured
during the most recent tests shall be made available on a request by the
Secretary or his duly authorized representative. 

30 C.F.R. § 56.12028.

[2]  The three
sections preceding section 56.12028 require
the following:

All metal
enclosing or encasing electrical circuits shall be grounded or provided with equivalent
protection.  This requirement does not apply to battery-operated equipment.  30 C.F.R. §
56.12025.

Metal
fencing and metal buildings enclosing transformers and switchgear shall be
grounded.  30
C.F.R. § 56.12026.

Frame grounding or
equivalent protection shall be provided for mobile equipment powered through
trailing cables.  30
C.F.R.

§ 56.12027. 

[3]  The Secretary
states that the term “installation” in section 56.12028 only requires that
continuity and resistance testing be done when an extension cord or cable is
first put into use, as opposed to every time the cord or cable is subsequently
plugged in.  He further states that this interpretation does not impose an
undue burden.  See Sec. Response Br. at 14.

[4]  The Commission
notes that the Supreme Court has granted certiorari to decide the general
validity of the Alaska Hunters doctrine.  Mortgage
Bankers Ass’n v. Harris, 720 F.3d 966
(D.C. Cir. 2013), cert. granted sub nom. Perez v. Mortgage Bankers Ass’n,
82 U.S.L.W. 3533 (U.S. June 16, 2014) (No. 13-1041).  However, we need
not reach this issue because, as stated above, Alaska Hunters does not
apply here.

[5]  To add to the
ambiguity, although the 1988 PPM specifically stated that the “annual” test did
not apply, it was silent as to whether testing nevertheless applied to trailing
cables, power cables and cords under section 56.12028 when installed, modified
or repaired.