Tow Brothers Construction, Incorporated (ALJ decision, March 30, 2000)

Plain-English summary

The case arose after foreman Wayne Walter's right hand and forearm were caught in an unguarded trap feed conveyor head pulley while he performed maintenance at the Cedar Rapids Crusher. The Secretary proposed $52,500 in penalties for six citations involving conveyor guarding, machinery safety, and a related safety violation. Tow Brothers Construction, Incorporated and the Secretary settled the cases, reducing the penalty to $22,500 based on the company's small size and financial limitations. Judge Jerold Feldman approved the settlement and ordered payment under a schedule, with dismissal after timely payment of the full amount.

Decision snapshot

• Cited standard(s): 30 C.F.R. § 56.14107(a); 30 C.F.R. § 56.14203; 30 C.F.R. § 56.11001
• Outcome: The settlement was approved, reducing the proposed $52,500 penalty to $22,500 payable under the stated schedule.
• Key point: The judge approved a substantial penalty reduction after considering the settlement terms, the operator's small size, financial limitations, gravity, negligence, and abatement efforts.

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

March 30, 2000

SECRETARY OF LABOR,
: CIVIL PENALTY PROCEEDINGS
MINE SAFETY AND HEALTH
:
ADMINISTRATION (MSHA),
: Docket No. LAKE 98-80-M
Petitioner
: A. C. No. 21-02975-05510
v. :
: Docket No. LAKE 98-99-M
TOW BROTHERS CONSTRUCTION,
: A. C. No. 21-02975-05511
INCORPORATED,
:
Respondent
: Cedar Rapids Crusher #F25918

DECISION

Appearances: Christine M. Kassak, Esq., Office of the Solicitor, U.S. Department
of Labor, Chicago, Illinois, for the Petitioner;
Arvid Wendland, Esq., Wendland and Timmerman, Blue Earth, Minnesota, for the Respondent.

Before: Judge Feldman

Before me are petitions for assessment seeking to impose a total civil penalty of $52,500 filed pursuant to section 110(a) of the Federal Mine Safety and Health Act of 1977 (the Act), 30 U.S.C. § 820(a), by the Secretary of Labor (the Secretary) against the respondent, Tow Brothers Construction, Inc. (Tow Brothers). This matter concerns a serious accident that occurred on November 11, 1996, involving Tow Brothers foreman Wayne Walter. The accident occurred when Walter’s right hand and forearm were caught in an unguarded trap feed conveyor head pulley as Walter was performing maintenance activities. Tow Brothers is a closely held family corporation with brothers James and Robert Tow each holding 50 per cent of the outstanding shares of the corporation.

These matters were called for hearing on February 9, 2000, in Fairmont, Minnesota. After several conferences with the parties’ counsel, during which time I explained the application of the penalty criterion in section 110(i) of the Mine Act with respect to the effect on the operator’s ability to continue in business, the parties reached settlement.1 Specifically, I noted the

1
The statutory civil penalty criteria in section 110(i) of the Act, 30 U.S.C. § 820(i), provides, in pertinent part, in assessing civil penalties:
the Commission shall consider 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

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capitalization structure of closely held corporations is intended to limit liability. Consequently, although the corporations small size, and the financial information and documentation submitted by Tow Brothers, were appropriate considerations, the corporation’s purported inability to pay, alone, did not relieve Tow Brothers of its liability under the Mine Act.

The parties’ settlement terms were set forth and approved on the record. The settlement terms included Tow Brothers’ agreement to pay a reduced civil penalty from $52,500 to $22,500. Pursuant to my direction at trial, the Secretary has filed a written summary of the parties’ settlement agreement. As part of their settlement, the parties have stipulated:

(a) The Federal Mine Safety and Health Review Commission has jurisdiction over these proceedings.

(b) Tow Brothers is a corporation.

(c) Tow Brothers’ operations affect interstate commerce.

(d) At all times relevant to the instant proceedings, Tow Brothers operated the Cedar Rapids Crusher #F25918.

(e) The Cedar Rapids Crusher #F25918 extracted sand and gravel.

(f) The Cedar Rapids Crusher #F25918 worked less than 10,000 hours in the period November 12, 1995, through November 11, 1996.

(h) Tow Brothers committed one (1) violation of a health and safety regulation in the 24 month period ending on December 31, 1996.

(i) Tow Brothers has agreed to pay the reduced civil penalty according to the payment plan detailed below.

The settlement terms as they apply to Docket Number LAKE 98-80-M are:

   Citation          Date Issued       30 C.F.R.         Assessment   Settlement

   4421526           11/13/96          56.14107(a)         $18,000    $ 7,700
   4421527           11/13/96          56.14203            $20,000    $ 8,500
   4421528           11/13/96          56.11001            $10,000    $ 4,500

TOTAL
$48,000 $20,700

(1) The serious gravity associated with these citations remains unchanged.

compliance after notification of a violation.

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(2) The degree of negligence specified in the citations is unchanged.

(3) Tow Brothers demonstrated its good faith by abating the citations within the time allowed by the MSHA inspector.

(4) The reduced penalty assessment is appropriate based on Tow Brothers’ small size and financial limitations.

The settlement terms as they apply to Docket Number LAKE 98-99-M are:

    Citation          Date Issued      30 C.F.R.        Assessment        Settlement

    4421529           11/13/96         56.14107(a)         $1,500            $ 600
    4421530           11/13/96         56.14107(a)         $1,500            $ 600
    4421531           11/13/96         56.14107(a)         $1,500            $ 600

                                         TOTAL              $4,500          $1,800

(1) The gravity of the cited violations is unchanged.

(2) The degree of negligence specified in the citations is unchanged.

(3) Tow Brothers demonstrated its good faith by abating the citations within the time allowed by the MSHA inspector.

(4) The reduced penalty assessment is appropriate based on Tow Brothers’ small size and financial limitations.

The parties have agreed to the following schedule of payments: Tow Brothers will pay $6,500 on March 15, 2000. 2 The remainder of the installments will be paid in eight (8) quarterly payments of $2,000 each, payable on or before the following dates: June 15, 2000, September 15, 2000, December 15, 2000, March 15, 2001, June 15, 2001, September 15, 2001, December 15, 2001, with the last payment made on or before March 15, 2002. If payments are not made in accordance with this payment schedule, the remaining balance of the $22,500 civil penalty shall due and payable immediately.

Payments shall be made to the Mine Safety and Health Administration, ATTN:
Dorothy Johnson, 4015 Wilson Blvd., Room 926, Arlington, VA 22203.

2
As of March 24, 2000, the first installment of $6,500 had not yet been received by MSHA’s Office of Assessments. I assume payment has been delayed pending the issuance of this decision formalizing the parties’ agreement. If payment of the first $6,500 installment is not received within 21 days of the date of this decision, the Secretary may file a motion for a default judgment that seeks to impose the $52,500 civil penalty initially proposed in these matters.

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ORDER

As noted on the record at trial, I conclude that the proffered settlement is appropriate under the criteria set forth in Section 110(i) of the Act. WHEREFORE, the parties’ motion for approval of settlement IS GRANTED, and, IT IS ORDERED that Tow Brothers Construction, Inc., pay a $22,500 civil penalty in accordance with the above payment schedule and, upon receipt of timely payment of the entire $22,500 penalty, these cases ARE DISMISSED.

Jerold Feldman
Administrative Law Judge

Distribution:

Christine M. Kassak, Esq., Office of the Solicitor, U.S. Department of Labor, 230 S. Dearborn Street, Chicago, IL 60604 (Certified Mail)

Arvid Wendland, Esq., Wendland and Timmerman, 825 East Second Street, P.O. Box 247, Blue Earth, MN 56013 (Certified Mail)

Mr. James R. Tow, President, Robin C. Peterson, Acct. Manager, Tow Brothers Construction, Inc., R.R. 3, Box 118A, Truman, MN 56088 (Certified Mail)
/mh

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