Shamokin Filler Company, Inc.

Plain-English summary

Shamokin operated a plant that dried, screened, stored, bagged, and sold anthracite coal to customer specifications. The Commission affirmed that these activities made the plant a custom coal-preparation facility and therefore a mine under the Mine Act, even though the plant also handled non-coal products. It also upheld the judge's exclusion of evidence about MSHA's jurisdictional treatment of other facilities because coverage depends on each facility's actual operations. On a separate procedural issue, the Commission held that parties have the right to present oral direct testimony at an adjudicatory hearing. It vacated the judge's order requiring advance written direct testimony and remanded the cases for a merits hearing.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 802(h)(1), 802(i), and 803; 29 C.F.R. § 2700.63(b)
• Outcome: Mine Act jurisdiction was affirmed, the written-testimony order was vacated, and the consolidated cases were remanded for a hearing.
• Key point: Processing coal to meet customer specifications can make a facility a mine, while Commission judges may not require written direct testimony in place of oral presentation without the parties' agreement.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

August 28, 2012

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

SHAMOKIN FILLER COMPANY, INC.

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Docket Nos. PENN 2009-775

PENN 2009-825

PENN 2010-63

PENN 2010-191

PENN 2010-275

PENN 2010-291

PENN 2010-381

PENN 2010-465

PENN 2010-515

PENN 2010-745

PENN 2011-16

PENN 2011-104

PENN 2011-129

PENN 2011-189

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

DECISION

BY: Jordan, Chairman; Young, Cohen, and Nakamura, Commissioners

In these consolidated contest and civil penalty proceedings arising under the Federal Mine
Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2006) (“Mine Act” or “Act”),
Administrative Law Judge John Kent Lewis concluded that a facility operated by Shamokin
Filler Co., Inc. (“Shamokin”) is a “mine” subject to the jurisdiction of the Department of Labor’s
Mine Safety and Health Administration (“MSHA”) under the Mine Act. 33 FMSHRC 725, 748-49 (Mar. 2011) (ALJ). On April 6, 2011, Shamokin filed a petition for discretionary review of
the judge’s decision, which the Commission denied. On April 25, 2011, it filed a petition for
interlocutory review of the judge’s decision, which the Commission also denied. On June 9,
2011, Shamokin filed a motion for reconsideration of the Commission’s June 2 order denying its
petition for interlocutory review, which the Commission granted.

Additionally, on July 29, 2011, the Secretary filed an unopposed petition for interlocutory
review of the judge’s prehearing order mandating that the parties submit all direct examination of
each witness in written form and limiting trial testimony to cross-examination and re-direct
examination. The Secretary also requested that the Commission stay the proceedings pending a
final decision by the Commission. The Commission granted the Secretary’s petition and also
granted her request to stay the proceedings below.

For the reasons that follow, we affirm the judge’s decision concluding that Shamokin’s
Carbon Plant is subject to jurisdiction under the Mine Act. We also vacate the judge’s order
directing the parties to submit advanced written direct testimony, lift the stay, and remand the
case for a hearing consistent with our decision.

I.

Factual and Procedural Background

Shamokin operates a carbon products manufacturing plant (“Carbon Plant”) in Shamokin,
Pennsylvania, that sells products consisting solely of anthracite coal, as well as anthracite coal
that is blended with other carbon materials. 33 FMSHRC at 731. The Carbon Plant also
manufactures a variety of carbon-based products for the steel, glass, rubber and plastics
industries. Id.; Tr. 402. The parties stipulated that Shamokin does not extract, wash, clean or
crush coal in its Carbon Plant. 33 FMSHRC at 731; Op. Post Hearing Br. at 2, Jt. Stip. 10-14.

For the purely anthracite products, Shamokin begins with prepared anthracite coal
purchased from local mines and further prepares it by putting it in a feed hopper and then drying
it in an outdoor rotary dryer. 33 FMSHRC at 745; Tr. 49-51, 164, 185; G. Ex. 2; Jt. Ex. 4. After
the drying, the coal is screened to remove oversized pieces. 33 FMSHRC at 745; Tr. 51. After
the screening, the coal is stored and then bagged, loaded, and shipped for bulk sale. 33
FMSHRC at 745. Shamokin performs this extra processing to meet customer specifications. Id.
at 748; Tr. 402, 406-07.

Shamokin’s production chart for 2009 and 2010 shows that the company sold thousands
of tons of purely anthracite coal. 33 FMSHRC at 747; Jt. Ex. 2. The chart also includes items
listed as blends of coal and non-coal materials. However, as described below, statements by
Shamokin officials and a major customer suggest that some of these items were 100% coal. 33
FMSHRC at 747; Jt. Ex. 2; G. Exs. 1, 3; Tr. 110-11, 127, 129, 454-55.

Since 1977, MSHA has treated Shamokin’s Carbon Plant as a mine and has inspected it
for compliance with the Mine Act. G. Ex. 7 at 3. In January 2009, Shamokin changed
ownership

and shortly thereafter challenged MSHA’s jurisdiction over its facility, asserting that
the facility should be subject to the jurisdiction of the Department of Labor’s Occupational
Safety and Health Administration (“OSHA”). 33 FMSHRC at 731; Tr. 381.

During MSHA’s inspections of the facility, its inspectors observed no mixing of coal with
non-coal materials at Shamokin’s plant. 33 FMSHRC at 748; Tr. 50, 164, 322-23, 359. The
only bid sheets that Shamokin provided for its sales were for anthracite coal. 33 FMSHRC at
748; G. Ex. 5. Shamokin also admitted that in 2009 and 2010, the vast majority of its purchases
were of anthracite coal. G. Ex. 6. Based on such considerations, MSHA rejected Shamokin’s
assertions that its operations and business had changed to manufacturing since new owners took
over in 2009. G. Ex. 7 at 3. Instead, MSHA determined that Shamokin’s facility continued to be
subject to MSHA’s jurisdiction as a coal preparation plant. G. Ex. 7 at 4.

Shamokin timely contested all of the citations at issue in these proceedings,

specifically
disputing that MSHA had jurisdiction over the facility. A trial solely on the issue of jurisdiction
was conducted on October 27 and 28, 2010.

Below, Shamokin sought to compel the Secretary to produce internal memoranda
prepared by the Department of Labor’s Office of the Solicitor and MSHA’s District Manager.
These memoranda addressed other bagging facilities that Shamokin claimed were identical to its
Carbon Plant and which it asserted MSHA and the Solicitor’s Office had determined were not
mines subject to regulation under the Mine Act, but were rather under OSHA’s jurisdiction. The
Secretary withheld these documents during discovery, claiming they were privileged. Shamokin
also sought to submit at the hearing evidence related to MSHA’s inspection activity, or lack
thereof, at facilities other than the Carbon Plant. Shamokin argued that such evidence was
relevant to establish that MSHA had previously determined in 2004 that its Carbon Plant, along
with other similar bagging facilities, was not a mine subject to MSHA jurisdiction.

The Secretary filed a motion in limine seeking to exclude the foregoing evidence. The
judge granted the Secretary’s motion in limine and denied Shamokin’s motion to compel.
Unpublished Order Granting Secretary’s Motion in Limine dated Oct. 27, 2010 (“Limine Order”);
Unpublished Order Denying Respondent’s Motion to Compel dated Oct. 27, 2010 (“Mot. to
Compel Order”); 33 FMSHRC at 728-31. The judge reviewed the documents in camera. He
determined that they were not relevant to the question of MSHA’s jurisdiction over Shamokin, as
they did not reference Shamokin specifically or the alleged “bagging facilities” in general, and
noted that such inquiries were fact-specific. 33 FMSHRC at 729-31, 743 n.13; Limine Order.
The judge also concluded that the Department of Labor’s memoranda were privileged and not
subject to disclosure. Mot. to Compel Order. The judge concluded that Shamokin failed to
prove that MSHA had previously made a specific determination that its Carbon Plant was not
subject to MSHA jurisdiction.

33 FMSHRC at 742-43.

In his decision on jurisdiction, the judge concluded that Shamokin’s Carbon Plant meets
the definition of a “mine” under section 3(h) of the Mine Act. 33 FMSHRC at 727-28, 744, 748.
Recognizing the Congressional intent of giving the broadest possible interpretation to what is to
be considered a mine and regulated under the Mine Act, the judge held that “the Carbon Plant
falls within the ‘sweeping’ definition of a mine engaged in the work of preparing coal, and thus,
should remain subject to MSHA jurisdiction.” Id. at 745 (citation omitted). Based on the plant’s
activities of storing, loading, sizing and drying coal for the purpose of sale for further industrial
use, the judge concluded that Shamokin’s operation was a “custom coal preparation facility.” Id.
at 746. The judge was cognizant of the operator’s arguments that not every facility that handles
minerals is a mine and specifically considered the nature of Shamokin’s operations. Id. at 745.
He concluded that the nature and function of Shamokin’s operations constituted the “work of
preparing coal” as defined in the Mine Act. Id. at 746.

The judge rejected Shamokin’s argument that the majority of its products sold were
non-coal or primarily coal/non-coal mixtures. Specifically, the judge found that the owners
attempted “to obstruct the amount of coal used by the Carbon Plant, the percentage of coal versus
non-mined materials, and the actual nature and extent of its coal versus non-coal operations.” Id.
at 747. The judge found that the evidence “in toto clearly establishes that a substantial portion of
the material used by [Shamokin] was anthracite coal.” Id. at 746. Further, the judge considered
the Commission’s functional analysis in Oliver M. Elam, Jr., Co., 4 FMSHRC 5, 7-8 (Jan. 1982),
and specifically noted that the Carbon Plant’s operation performed the work usually done by coal
preparation facilities to make coal suitable for a particular use or to meet market specifications.
33 FMSHRC at 748.

On May 20, 2011, the judge issued a notice of hearing scheduling a hearing on September
6, 2011, on the merits of the violations in these consolidated proceedings.

In the order, the
judge directed the parties to

submit all direct examination of each witness in written form at
least 48 hours prior to the hearing. The direct examination shall be
in the form of an affidavit, signed under oath and shall include only
items that are appropriate for direct examination of the witness.
All exhibits used by the witness must be numbered (or lettered)
and attached to the direct testimony. The witness must appear at
hearing and will be subject to cross-examination and redirect
examination only. The parties may present, at hearing, any
objection to the written direct examination or attached exhibits.
Failure to include a witness, to provide the written direct
examination or failure to include an exhibit or to specify in detail
the items that remain in dispute, will result in their exclusion at
hearing.

Unpublished Order dated May 20, 2011.

On June 16, 2011, the Secretary filed a Joint Motion for Reconsideration of the judge’s
order pertaining to his instruction on testimony, which the judge denied. Unpublished Order
dated June 23, 2011. The judge found that “the legal issues . . . identified in the motion sub
judice will be adequately and efficiently addressed by this Court’s prehearing report
requirements.” Id. at 4-5. On July 15, 2011, the Secretary filed a motion to certify the June 23,
2011 order for interlocutory review and a motion to stay proceedings pending a final decision by
the Commission. The judge denied both motions without explanation. Unpublished Order dated
July 18, 2011. The Commission granted the Secretary’s petition for interlocutory review of the
judge’s June 23 order on the issue of the judge’s requirement of advanced written direct evidence
and also granted her request to stay the proceedings below. Unpublished Order dated Aug. 10,
2011.

II.

Disposition

A.        Jurisdiction

Section 4 of the Mine Act provides that “[e]ach coal or other mine, the products of which
enter commerce, or the operations or products of which affect commerce, . . . shall be subject to
the provisions of this [Act].” 30 U.S.C. § 803. Under section 3(h)(1) of the Mine Act, “coal or
other mine” is defined as including “lands, . . . facilities, equipment, machines, tools, or other
property . . . used in, or to be used in . . . the work of preparing coal . . . and includes custom coal
preparation facilities.” 30 U.S.C. § 802(h)(1). Section 3(i) of the Mine Act defines “work of
preparing the coal” as “the breaking, crushing, sizing, cleaning, washing, drying, mixing, storing,
and loading of bituminous coal, lignite, or anthracite, and such other work of preparing such coal
as is usually done by the operator of the coal mine.” 30 U.S.C. § 802(i).

The legislative history of the Mine Act indicates that Congress intended a broad
interpretation of what constitutes a “coal or other mine” under the Act. The Senate Committee
stated that “what is considered to be a mine and to be regulated under this Act [shall] be given
the broadest possibl[e] interpretation, and . . . doubts [shall] be resolved in favor of . . . coverage
of the Act.” S. Rep. No. 95-181, at 14 (1977), reprinted in Senate Subcomm. on Labor, Comm.
on Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977, at 602
(1978). See Marshall v. Stoudt’s Ferry Preparation Co., 602 F.2d 589, 591-92 (3d Cir. 1979),
cert. denied, 444 U.S. 1015 (1980) (“[T]he statute makes clear that the concept that was to be
conveyed by the word [mine] is much more encompassing than the usual meaning attributed to it
[–] the word means what the statute says it means.”).

In considering the phrase the “work of preparing the coal,” the Commission has inquired
not only into whether the entity performs one or more activities listed in section 3(i), but also into
the nature of the operation performing such activities. Elam, 4 FMSHRC at 7-8. In Elam, the
Commission explained that “‘work of preparing [the] coal’ connotes a process, usually
performed by the mine operator engaged in the extraction of the coal or by custom preparation
facilities, undertaken to make coal suitable for a particular use or to meet market specifications.”
Id. at 8. The Commission noted that the purpose of coal preparation has been described as
increasing the value of fuel by making it more suitable for uses by the consumer in part by
“mixing or blending.” Id. at 8 n.5. The Commission concluded that although Elam performed
several of the functions included in coal preparation at its commercial loading dock, it did so
solely to facilitate its loading business rather than to meet customers’ specifications or to render
the coal fit for any particular use, and that, accordingly, its facility was not a mine. Id. at 8.

In contrast, in Mineral Coal Sales, Inc., 7 FMSHRC 615, 620 (May 1985), the
Commission determined that the handling of coal at a loading facility constituted the “work of
preparing the coal” because the work was performed to make the coal suitable for a particular use
or to meet market specifications. Such handling included custom blending or mixing the coal to
meet the specifications and needs of a broker’s customers, in addition to storing, crushing, sizing,
and loading the coal on to railroad cars. Id. at 616-18, 620.

The Commission and courts have consistently applied a version of the two-part analysis
set forth by the Commission in Elam to determine whether a facility is engaged in the “work of
preparing the coal” by considering: (1) whether the facility performs any of the enumerated
activities listed in section 3(i); and (2) the overall nature of the operation to determine whether it
engages in the work of preparing coal “as is usually done by the operator of the coal mine” or
whether it functions to make the coal suitable for a particular use or to meet market
specifications. See, e.g., RNS Servs., Inc., 18 FMSHRC 523, 528-30 (Apr. 1996) (concluding
that the loading of coal refuse into trucks was one of the activities listed in section 3(i) and that
the transportation of coal refuse to a co-generation facility constituted “work of preparing the
coal”), aff’d, 115 F.3d 182, 185 (3d Cir. 1997) (noting that the storage and loading of coal was “a
critical step in the processing of minerals . . . in preparation for their receipt by an end-user, and
[that] the Mine Act was intended to reach all such activities”); Air Prods. & Chems., Inc., 15
FMSHRC 2428, 2431 (Dec. 1993) (holding that the handling of coal refuse at a co-generation
facility involved some of the coal preparation activities listed in section 3(i) and constituted the
“work of preparing the coal” that is usually done by a mine operator), review denied, 37 F.3d
1485 (3d Cir. 1994) (table, No. 93-3646).

The judge correctly utilized this analytical framework when considering whether
Shamokin’s Carbon Plant performed the “work of preparing the coal.” The judge found that
Shamokin engaged in a number of the activities listed in section 3(i) – specifically that it “is
storing large amounts of coal, screening it to remove impurities and ensure size quality, drying it,
and loading it in bags appropriately sized to be sold in the stream of commerce.” 33 FMSHRC at

749. He noted that, “[i]n examining the ‘nature of the operation’ performing work activities
     listed in section 3(i), the operations taking place at a single site must be viewed as a collective
     whole.” Id. (citing Mineral Coal Sales, 7 FMSHRC at 620-21). The judge also stated that “in
     applying a functional analysis to the subject facility, this Court finds that the Carbon Plant is a
     custom coal preparation facility that stores, sizes, dries and loads coal to make it suitable for
     subsequent industrial use.” 33 FMSHRC at 746.

There is no dispute that Shamokin engages in certain activities listed in section 3(i) as
comprising the “work of preparing the coal.” The judge found that Shamokin stores, loads, sizes
and dries coal at its Carbon Plant. Id. Substantial evidence supports the judge’s finding.

Moreover, Shamokin does not dispute these findings on appeal.

The heart of Shamokin’s argument before the Commission is that the judge erred by
ignoring language that assertedly limits the phrase “work of preparing the coal” – the last clause
of section 3(i), which states “as is usually done by the operator of the coal mine.”

The language
of section 3(i) which Shamokin highlights has been considered by the Commission and courts in
past cases under the second prong of the Elam test or the “functional” analysis. Elam, 4
FMSHRC at 7-8; Pennsylvania Electric Co., 11 FMSHRC 1875, 1880-81 (Oct. 1989), aff’d, 969
F.2d 1501 (3d Cir. 1992); United Energy Servs. Inc. v. MSHA, 35 F.3d 971, 975 (4th Cir. 1994).
The judge did consider the statutory language regarding whether the activities involved were
usually done by the mine operator. 33 FMSHRC at 745-46. He specifically cited and applied the
Elam test and acknowledged that an operation’s performance of any of the enumerated activities
under section 3(i) does not per se subject it to jurisdiction, but rather that a “functional” analysis
is necessary. Id. at 746-48. The judge considered the Carbon Plant’s handling of coal as
compared to its non-coal products and, contrary to Shamokin’s assertions, determined in toto that
the majority of the plant’s products consisted primarily of coal. Id. Applying the Elam test, the
judge concluded that Shamokin processes coal “to customer’s specifications and for particular
uses” and thus operated as a “custom coal preparation facility.” Id. at 748-49.

Substantial evidence supports the judge’s findings. In Shamokin’s product table, the
judge found that one of its highest volume products (585 Injection Carbon), although listed as a
mixed-product, was marketed as primarily coal. Id. at 747; Jt. Ex. 2. John Petrulich, Shamokin’s
former production manager, testified that the carbon was added merely as a filler and did not
alter the properties of the coal. 33 FMSHRC at 732. Moreover, the judge noted that a sworn
declaration from a customer of Shamokin indicated that the product was marketed to him as
100% coal. Id. at 747; G. Ex. 1. Additionally, in an email from William Rosini to a customer,
Rosini indicated that Shamokin B-593 was “100 percent anthracite coal and barley size.” 33
FMSHRC at 733, 748; Tr. 110. The judge did not find Shamokin’s witnesses to be credible
regarding the scope and nature of the facility’s handling of coal and concluded that “there has
been an attempt by the owners to obstruct the amount of coal used by the Carbon Plant, the
percentage of coal versus non-mined materials, and the actual nature and extent of its coal versus
non-coal operations.”

33 FMSHRC at 747. MSHA inspectors Matthew Bierman and Ronald
Farrell testified that they did not observe any mixing of coal with non-coal materials at the plant,
which the judge found was supported by the plant production reports. Id. at 748. The judge also
found that the only bid sheets Shamokin provided for its sales were for anthracite coal. Id.; G. Ex. 5. William Rosini even admitted that the facility processed coal according to customer
specifications. 33 FMSHRC at 740; Tr. 524. In short, Shamokin fails to point to any persuasive
evidence to support its contention that it is primarily a manufacturing facility and not a coal
processing facility.

Clearly, Shamokin’s facility – its activities, function and purpose – are akin to the
activities and purpose of the operator in Mineral Coal Sales, rather than the operator in Elam. It
dries and sizes processed coal to meet customer specifications. It stores and loads the coal into
bags for resale and subsequent use. Significantly, Shamokin is not handling the coal for its own
consumption and thus is unlike the facilities in cases involving utilities or co-generation facilities
where some courts have found Mine Act jurisdiction did not extend. See, e.g., Associated Elec.
Coop., Inc., 172 F.3d 1078, 1083 (8th Cir. 1999) (applying Elam and stating that Associated “did
not participate in transporting the coal from the mine, nor were its processing activities necessary
to make the coal marketable”; thus it was not a “mine” by further processing the coal for
combustion). In fact, Shamokin engages in more coal preparation activities than the facilities in
Mineral Coal Sales, 7 FMSHRC at 620; Air Products, 15 FMSHRC at 2431; and RNS, 18
FMSHRC at 528-30, all found to be subject to MSHA jurisdiction. As the judge found,
Shamokin’s Carbon Plant functions as a custom coal preparation facility. While the Carbon
Plant handles non-coal materials and makes non-coal products, such as graphite pellets, MSHA
is not interested in Shamokin’s graphite process. 33 FMSHRC at 732; Tr. 55-56. The evidence
indicates that a substantial portion of Shamokin’s business, contrary to its assertion, involves the
handling and processing of anthracite coal.

Shamokin argues that, according to precedent, a facility that handles only processed,
market-ready coal is not engaged in the “work of preparing the coal.” Shamokin contends that its
further refinement of this type of coal falls outside of the jurisdiction of the Mine Act. We
disagree. The Commission and courts have never held a bright-line distinction between facilities
that handle raw coal as compared to facilities that handle processed, marketable coal. In fact, the
Commission and courts have evaluated a particular facility’s operations in toto and considered
the nature of the coal in conjunction with the types of coal preparation activities performed by the
facility in question, and evaluated the end product rather than the initial state of the coal. In
Kinder Morgan and Mineral Coal Sales, the Commission and court of appeals found jurisdiction
over facilities that handled already processed, market-ready coal because the coal was
subsequently prepared by those facilities to make it “suitable for a particular use or to meet
market specifications.” Kinder Morgan Operating, L.P., 23 FMSHRC 1288, 1294 (Dec. 2001)
(Commissioners Jordan and Beatty), aff’d, 78 Fed. Appx. 462, 465 (6th Cir. 2003); Mineral Coal
Sales, 7 FMSHRC at 616-18, 620. Here, Shamokin clearly engaged in further handling or
processing of the coal in order to meet its customers’ specifications.

Accordingly, the judge was correct in concluding that the Carbon Plant performs the
“work of preparing the coal,” and thus is a “mine” under section 3(h) and subject to jurisdiction
under the Mine Act.

B.        Exclusion of Evidence

Shamokin contends that the judge abused his discretion by excluding evidence of
MSHA’s non-jurisdiction determinations regarding other bagging facilities similar to its Carbon
Plant. The operator argues that this evidence is relevant to whether the judge should defer to the
Secretary’s interpretation that sections 3(h) and (i) of the Mine Act afford her jurisdiction. It
claims that the evidence “revealed inconsistent treatment of direct competitors who manufacture
the same products, in the same way, using the same ingredients – and also demonstrat[ed] that
carbon plants MSHA released from its jurisdiction actually had more indicia of ‘mining’ than did
Shamokin.” Op. Br. at 24.

The judge considered the evidence in camera and excluded it because he determined it to
be “irrelevant and/or, if relevant, unduly confusing and misleading.” 33 FMSHRC at 729. He
concluded that it was not relevant because it did not specifically pertain to Shamokin or generally
to the group of bagging facilities of which Shamokin contends it was a part. The judge also
determined that the evidence was of little probative value.

Id. at 730 n.6.

When reviewing a judge’s evidentiary rulings, the Commission applies an abuse of
discretion standard. Pero v. Cyprus Plateau Mining Corp., 22 FMSHRC 1361, 1366 (Dec.
2000). “Applying an abuse of discretion standard is consistent with the discretion accorded
judges in matters related to the conduct of a trial.” Marfork Coal Co., 29 FMSHRC 626, 634
(Aug. 2007) (citation omitted). Abuse of discretion may be found when there is no evidence to
support the decision or if the decision is based on an improper understanding of the law. Pero,
22 FMSHRC at 1366 (citations omitted).

Commission Procedural Rule 63(a) states that “[r]elevant evidence . . . that is not unduly
repetitious or cumulative is admissible.” 29 C.F.R. § 2700.63(a). Commission Procedural Rule
55(i) states that “a Judge is empowered to . . . (i) [t]ake other action authorized by these rules, by
5 U.S.C. 556, or by the Act.” 29 C.F.R. § 2700.55(i). Section 556(d) of the Administrative
Procedure Act, in turn, states that “[a]ny oral or documentary evidence may be received, but the
agency as a matter of policy shall provide for the exclusion of irrelevant, immaterial, or unduly
repetitious evidence.” 5 U.S.C. § 556(d).

The memoranda Shamokin sought to obtain and submit into evidence were written in
2004 and earlier by attorneys in the Office of the Solicitor and by MSHA’s District Manager
when MSHA formed a fact-finding committee to investigate several coal bagging facilities and
address the issue of jurisdiction. See, e.g., Op. Ex. 2. The memoranda indicate that MSHA
engaged in fact-specific inquiries of each facility to determine whether it functioned as a “mine”
under the Mine Act. In one instance, MSHA determined that the facility was not engaged in
mining-related activities as defined under the Mine Act and thus was not properly subject to
Mine Act jurisdiction. The other facility was determined to be subject to MSHA jurisdiction.
Contrary to Shamokin’s assertion, no general determination was made as to the bagging facilities
as a whole and as the judge found, MSHA never made an offer to Shamokin to “opt out” of
MSHA jurisdiction. 33 FMSHRC at 742-44.

We agree that the memoranda are not relevant to the judge’s consideration of whether
Shamokin’s Carbon Plant is subject to Mine Act jurisdiction. It is unlikely that any two facilities
would be identical and warrant the same conclusion on jurisdiction. See Mach Mining, LLC, 34
FMSHRC __, slip op. at 24, 26, No. LAKE 2010-1-R et al. (Aug. 9, 2012) (affirming judge’s
exclusion of ventilation plans at other mines because only conditions at operator’s mine are
relevant to district manager’s determination of which plan provisions should be approved or
denied); Twentymile Coal Co., 30 FMSHRC at 765 (Commissioners Jordan and Cohen)
(upholding the judge’s denial of the admission of other plans into evidence in an emergency
response plan case because it was unlikely that two underground coal mines would present
exactly the same factual situation). In any event, the Commission has previously stated that the
question of jurisdiction is “governed by the statute, rather than by which of two conflicting
interpretations by the Solicitor is correct.” Alexander Bros., Inc., 4 FMSHRC 541, 543 (Apr.
1982).

Moreover, allowing Shamokin to present evidence that may be of limited probative value
would have unduly delayed the trial. Shamokin would have been required to present evidence on
each of the other facilities in order to demonstrate the similarities between those facilities and its
Carbon Plant and thereby the relevance of MSHA’s evaluation of those other facilities. This
would have necessitated a significant number of additional witnesses, consuming an inordinate
amount of trial time.

It is significant that MSHA has asserted jurisdiction over Shamokin’s Carbon Plant for
decades and Shamokin admits that the nature of its business has not changed. 33 FMSHRC at
742; Op. Ex. 5 at 2; G. Ex. 7, at 3. Thus, there appears to be no change in the underlying facts or
law supporting Mine Act jurisdiction. Accordingly, we conclude that the judge did not abuse his
discretion in excluding the evidence.

C.        Limitations on the Presentation of Trial Testimony

The Secretary argues, and Shamokin agrees, that the judge erred in requiring the parties to
submit all direct testimony in the form of affidavits prior to the beginning of the hearing.

This
is an issue of first impression for the Commission.

Commission Rule 63(b) provides:

The proponent of an order has the burden of proof. A party shall
have the right to present his case or defense by oral or documentary
evidence, to submit rebuttal evidence, and to conduct such
cross-examination as may be required for a full and true disclosure
of the facts.

29 C.F.R. § 2700.63(b).

The Commission’s Procedural Rules and the language of Rule 63 do not explicitly
address whether a Commission judge may order the parties to submit written direct testimony in
advance of the hearing. Where a regulation is determined to be ambiguous, courts have deferred
to the administering agency’s reasonable interpretation of the regulation. See Energy West
Mining Co. v. FMSHRC, 40 F.3d 457, 463 (D.C. Cir. 1994); accord Sec’y of Labor v. Western
Fuels-Utah, Inc., 900 F.2d 318, 321 (D.C. Cir. 1990) (“agency’s interpretation of its own
regulation is ‘of controlling weight unless it is plainly erroneous or inconsistent with the
regulation’”), quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945) (other
citations omitted). Moreover, the interpretation of Rule 63 involves a substantial question of
policy as to the Commission’s administration of its own proceedings. Accordingly, the
Commission is entitled to deference regarding a reasonable interpretation of its own rule.

The language of Rule 63(b) can be interpreted either one of two ways. First, the
provision can be read as giving a party the right to determine without limitation whether it will
present “oral or documentary evidence” at an adjudicatory hearing. Alternatively, the clause “as
may be required for a full and true disclosure of the facts” could be read to limit a party’s
entitlement to “present his case or defense by oral or documentary evidence.”

Interpreting Rule 63(b) as giving parties the right to present oral direct testimony avoids
potential prejudice to the parties and practical problems. A requirement to submit written direct
testimony may substantially limit the parties’ ability to fully and fairly present their case. For
example, it may be difficult for parties to secure the written testimony of adverse witnesses or
witnesses not under the parties’ control or direction. A party is able to subpoena such a witness
to appear at a hearing under Rule 60, but there is no provision to subpoena a witness to obtain his
or her written testimony.

Second, the ability of the respondent to present its defense could be compromised. The
respondent would have to prepare its written direct testimony anticipating every possible line of
proof that the Secretary could conceivably rely on in her case-in-chief.

Third, it may undermine the judge’s ability to assess the credibility of witnesses. The
parties are deprived of the opportunity to establish the credibility of their witnesses before
adversarial cross-examination.

Fourth, it makes it problematic to adequately present documentary evidence. Frequently,
Mine Act cases involve technical maps, diagrams and pictures which require explanation by the
witness who is presenting the exhibit.

Interpreting Rule 63(b) as permitting parties the right to choose the form in which
evidence is presented is also consistent with the Administrative Procedure Act (“APA”). The
language of Rule 63(b) mirrors the language of section 556(d) of the APA, which provides in
pertinent part:

Except as otherwise provided by statute, the proponent of a rule or
order has the burden of proof. . . . A party is entitled to present his
case or defense by oral or documentary evidence, to submit
rebuttal evidence, and to conduct such cross-examination as may
be required for a full and true disclosure of the facts. In rule
making or determining claims for money or benefits or applications
for initial licenses an agency may, when a party will not be
prejudiced thereby, adopt procedures for the submission of all or
part of the evidence in written form.

5 U.S.C. § 556(d) (emphasis provided).

Thus, section 556(d) specifically permits an agency to adopt procedures for the
submission of all or part of the evidence in written form if a party is not prejudiced in doing so,
in three limited situations: (1) rulemaking; (2) determining claims for money or benefits; or (3)
applications for initial licenses. Clearly, none of these three exceptions applies to Commission
adjudicatory hearings. If the preceding sentence of section 556(d) were to be read as permitting
the adjudicatory agency the right to dictate the form of evidence, then it would be unnecessary for
Congress to have explicitly provided that right in the following sentence where the three
specified situations are set forth. Interpreting the pertinent language of section 556(d) as the
parties suggest gives full effect to the language of the entire provision. It is an elementary rule of
statutory construction that effect must be given to every word, clause and sentence in a statute,
and that it should be construed so that effect is given to all its provisions so that no part will be
superfluous. Norman J. Singer, 2A Sutherland Statutory Construction, § 46:6 (7th ed. 2011);
Clifford F. MacEvoy Co. v. United States, 322 U.S. 102, 107 (1944) (“However inclusive may be
the general language of a statute, it ‘will not be held to apply to a matter specifically dealt with in
another part of the same enactment.’”) (citation omitted).

Based on the foregoing, we interpret Rule 63 as giving the parties the right to present oral
direct testimony at a hearing and conclude that the judge erred in ruling otherwise. While the
Commission’s administrative law judges are accorded broad discretion in their conduct of
proceedings before them, such conduct must comply with the Commission’s procedural rules and
applicable provisions of the APA.

III.

Conclusion

For the foregoing reasons, we affirm the judge’s conclusion that Shamokin’s Carbon
Plant is a “mine” subject to jurisdiction under the Mine Act. We also vacate the judge’s order
requiring the parties to submit written testimony and remand the case for a hearing in accordance
with this decision.

/s/ Mary Lu Jordan
Mary Lu Jordan, Chairman

/s/ Michael G. Young
Michael G. Young, Commissioner

/s/ Robert F. Cohen, Jr.
Robert F. Cohen, Jr., Commissioner

/s/ Patrick K. Nakamura
Patrick K. Nakamura, Commissioner

Commissioner Duffy, concurring:

I join my colleagues in affirming the decision below.

First, the judge did not err in concluding that the Shamokin Carbon Plant could be
deemed subject to Mine Act jurisdiction. Nor did he err in excluding evidence relating to
MSHA’s decision not to assert jurisdiction over other facilities that arguably conducted activities
similar to those conducted at the Shamokin Plant.

In determining whether or not to subject a particular facility to MSHA rather than OSHA
jurisdiction, the Mine Act gives the Secretary broad discretionary power to allocate her personnel
and resources as she sees fit so long as the activity conducted at the facility in question falls
within the rather extensive scope of mining and mineral processing as defined in sections 3(h)
and (i) of the Act.

Moreover, notwithstanding Shamokin’s efforts to align itself with facilities deemed by
MSHA not to fall within that agency’s purview, section 3(h) contemplates that matters of
jurisdiction are to be decided on a case-by-case basis. Therefore, the judge’s conclusions here
are supported by substantial evidence, and I do not find that he abused his discretion in excluding
evidence regarding other facilities.

Having said all that, however, just because the Secretary may elect to assert Mine Act
jurisdiction over a given facility doesn’t necessarily mean that she should do so, and while the
Act gives the Secretary ultimate authority in that regard, I have serious concerns, as a matter of
policy, with her decision to do so under current circumstances.

According to MSHA’s website, in 1969, the year the original Coal Mine Health and
Safety Act was passed, there were 419 anthracite mines that produced 10.25 million tons, and
111 anthracite preparation plants.

In 1978, when the current Mine Act took effect, there were
216 anthracite coal mines that produced about 4 million tons, and 62 preparation plants.
MSHA’s statistics for 2008 list 116 anthracite mines that produced 1.7 million tons, and 41
preparation plants.

While the number of actual mines and the actual tonnage produced at those mines has
decreased by one-half since 1978, the number of preparation plants has decreased by only one-third during that same period. So it would seem to me that in order to maintain some presence in
MSHA District 1, where the anthracite industry is in its last throes, MSHA may be motivated to
categorize an enterprise that handles coal in some fashion as a coal preparation facility subject to
Mine Act jurisdiction.

That may have all been to the good in 1978, but due to recent legislation and enhanced
Congressional oversight, MSHA as an agency has much more on its enforcement plate than it did
thirty-five years ago. Moreover, MSHA’s website indicates that coal fatalities are currently
running 30% higher than they were during the same period last year.

Consequently, it would seem counterintuitive that MSHA would choose to deploy its
scarce resources to inspecting what is essentially a bagging operation that could just as easily be
processing pet food or fertilizer as barley-sized coal, rather than allocating its inspection force to
those facilities where actual and traditional coal extraction and processing are taking place.

As for the second issue on review, I believe the judge erred in requiring the parties to
submit written testimony in advance of trial rather than allowing them to proceed to trial for the
taking of oral testimony. My colleagues thoroughly explore the practical problems associated
with proceeding according to the judge’s order. Moreover, I agree with my colleagues that
Commission Rule 63(b) affords the parties the right to make their case through oral testimony,
and our judges cannot abridge that right without the agreement of the parties.

/s/ Michael F. Duffy
Michael F. Duffy, Commissioner

Distribution:

Adele L. Abrams, Esq.

Law Office of Adele L. Abrams, P.C.

4740 Corridor Place, Suite D

Beltsville, MD 20705

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

Melanie Garris

Office of Civil Penalty Compliance

MSHA

U.S. Dept. Of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

Administrative Law Judge John Kent Lewis

Federal Mine Safety & Health Review Commission

Office of Administrative Law Judges

7 Parkway Center

875 Green Tree Rd., Suite 290

Pittsburgh, PA 15220