Bulk Transportation Services, Inc.
Bulk Transportation Services, Inc. (FMSHRC PENN 89-143): High-voltage citation affirmed, penalty reduced
What's the rule today?
This ALJ decision was superseded by the Commission's decision in the same case. Ezel starts from the controlling decision and answers your situation under current law, with citations.
Plain-English summary
A truck operated for Bulk Transportation Services contacted an energized 46,000-volt line after the driver raised the truck bed while parked beneath it at a coal preparation plant. Judge George A. Koutras found that Bulk was an independent contractor subject to the Mine Act and that the incident violated 30 C.F.R. § 77.807-3 and was significant and substantial. No one was injured, and the judge found no negligence by Bulk because the evidence did not show it knew the mine layout or the specific overhead hazard. He affirmed the citation and reduced the proposed penalty from $54 to $25.
Decision snapshot
- Cited standard: 30 C.F.R. § 77.807-3
- Outcome: The citation and S&S finding were affirmed, and the penalty was reduced from $54 to $25.
- Key point: Lack of negligence may reduce the penalty but does not eliminate an independent contractor's liability for a proven safety-standard violation.
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
APR 201990
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA), : Docket No. PENN 89-143
Petitioner : A.C. No. 36-00845-03501
V . :
: Cambria Slope
BULK TRANSPORTATION SERVICES, :
INC., ..
Respondent :
DECISION
Appearances: James Culp, Nanci Hoover, Esqs., Office of the
Solicitor, U.S. Department of Labor, Philadelphia,
Pennsylvania, for the Petitioner;
Thomas E. Weiers, Jr., Esq., Rich, Fluke, Tishman
& Rich, Pittsburgh, Pennsylvania, for the
Respondent.
Before: Judge Koutras
Statement of the Case
This is a civil penalty proceeding initiated by the peti-
tioner against the respondent pursuant to section 110(a) of the
Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 820(a),
seeking a civil penalty assessment in the amount of $54, for an
alleged violation of mandatory safety standard 30 C.F.R.
5 77.807-3. The respondent filed a timely answer denying the
alleged violation, and a hearing was held in Indiana,
Pennsylvania. The parties filed posthearing briefs, and I have
considered their arguments in the course of my adjudication of
this matter.
Issues
The issues presented are (1) whether the respondent is an
independent contractor and the proper party responsible for the
alleged violation; (2) the appropriate civil penalty that should
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be assessed against the respondent for the alleged violation
based upon the criteria found in section 110(i) of the Act; and
(3) whether the violation was "significant and substantial.1*
Additional issues raised by the parties are identified and
discussed in the course of this decision.
Annlicable Statutorv and Reaulatorv Provisions
1. The Federal Mine Safety and Health Act of 1977,
Pub. L. 95-164, 30 U.S.C. Q 801 & sea.
2. Sections 110(a) and (i) of the 1977 Act, 30 U.S.C.'
0 820(a) and (d).
3. MSHA's Independent Contractor regulations, Part 45,
Title 30, Code of Federal Regulations.
4. Commission Rules, 20 C.F.R. §. 2700.1 et sea.
Petitioner's unopposed oral motion made at the hearing to
amend its pleadings to reflect an alleged violation of mandatory
safety standard 30 C.F.R. § 77.807-3, rather than 30 C.F.R.
0 77.807-2, was granted (Tr. 10).
Stipulations
The parties stipulated to the following (Tr. 10-13):
1. A true and correct copy of the contested
citation was properly served on the respondent by a
duly authorized representative of the Secretary of
Labor, and the citation and termination may be admitted
for the purpose of establishing their issuance, and not
for the truthfulness of the statements asserted
therein.
2. For the purposes of the size of the respon-
dent's business, the parties agree that the respondent
company does not have any annual coal production.
3. The respondent's history of prior violations
consists of "zero violations1V during the 24-month
period preceding the issuance of the contested
citation.
4. A civil penalty assessment for the alleged
violation, if established, will not adversely affect
the respondent's ability to continue in business.
5. At the time of the alleged violation, the
respondent was under contract with the Beth Energy
Mines Incorporated to haul coal from its Cambria Coal
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_.. “. - _ ._. _
~. .- ~__” &__.__ ,. .#..,, : - AP j_. __- c
Preparation Plant to sites designated by Beth Energy
Mines Incorporated.
6. The respondent subcontracted with one James R.
Krumenaker, an independent trucker, to haul coal
pursuant to its contract with Beth Energy Mines
Incorporated, in accordance with a motor vehicle
leasing agreement' which is included as respondent's
exhibit R-2.
7. The respondent registered with the Beth Energy
Mines Incorporated, the production operator, the infor-
mation required by MSHA regulation 30 C.F.R. s 45.4.
8. The coal being hauled by trucker James R.
Krumenaker was being placed into the stream of
Interstate Commerce, and it was being hauled from the
Cambria Mine to the Pennsylvania Electric (Penelec)
Power Plant at Homer City, Pennsylvania.
9. The parties further stipulated to the admissi-
bility of exhibits P-l and P-2, and R-l through R-4
(Tr. 19).
Discussion
The undisputed and stipulated facts establish that on or
about January 4, 1989, MSHA Inspector Nevin J. Davis went to the
Cambria Coal Preparation Plant mine site owned and operated by
Beth Energy Mines Incorporated in response to information which
he had received that the mine fan and power were out of commis-
sion because something had come in contact with an overhead high-
voltage powerline. After arriving at the site, the inspector
found that a coal haulage truck being operated by Mr. James
Krumenaker, whose truck was leased to the respondent, had come in
contact with the power wire. Mr. Krumenaker had raised the bed
of his truck to get rid 'of some snow and ice while he was parked
under the power wire waiting for the truck to be loaded with
coal. Although the truck was damaged when the bed contacted the
wire, Mr. Krumenaker jumped from the truck after it contacted the
wire and he was not injured. Since there were no injuries, the
incident was not a "reportable accident" and it was not reported
to MSHA.
The facts further show that at the time of the incident, the
respondent had a contract with Beth Energy Mines to haul coal
from the Cambria Preparation Plant to various locations desig-
nated by Beth Energy Mines. Mr. Krumenaker's load was scheduled
to be delivered to the Pennsylvania Electric (Penelec) Power
Plant at Homer City, Pennsylvania. The respondent, owned no
trucks of its own, but had lease agreements with several inde-
pendent coal haulers, including Mr. Krumenaker, to haul coal for
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Beth Energy from the Cambria Preparation Plant to customers
designated by Beth Energy. After completing his inquiry of the
incident, Inspector Davis issued section 104(a) l@S&SV1 Citation
No. 2889508, to the respondent citing an alleged violation of
mandatory safety standard 77.807-2. As noted earlier, the cita-
tion was amended to charge an alleged violation of section
77.807-3. The cited condition or practices states as follows:
A coal truck being operated by an independent
contractor for Bulk Transportation Services, Inc.,
(PVC # A101351CCMC154209) came into direct contact with
an overhead energized high voltage transmission line
(46KV) in and around the immediate area of the Penelec
Substation. This truck was stopped directly under this
high voltage transmission cable when the truck bed was
inadvertently raised in the upwards position for the
purpose of removing snow and ice from the inside of the
truck bed and came directly into contact with the high
voltage transmission cable. No injuries occurred at
this time, however, several of the truck tires were
destroyed.
MSHA's Testimony and Evidence
MSHA Insnector Nevin J. Davis confirmed that he issued the
citation in question, and he explained that he was informed that
the mine fan and power were out of commission because something
had come in contact with a high-voltage powerline and shorted out
the power. Mr. Davis stated that he determined that a haulage
truck operated by James Krumenaker came into contact with the
powerline after Mr. Krumenaker raised the truck bed to get rid of
some snow and ice while parked under the powerline.
Mr. Davis stated that the truck was on the property to pick
up and haul coal from the mine to another site. He confirmed
that he cited the respondent with the violation because it was
the only independent contractor who was on the list maintained by
the mine operator Beth Energy Mining Company pursuant to
30 C.F.R. 5 45.4. Mr. Davis explained further that the truck had
a decal on it identifying the respondent as the truck operator
and he assumed that the driver, Mr. Krumenaker, was employed by
the respondent. He confirmed that Mr. Krumenaker was not listed
as an independent contractor performing services at the mine.
Mr. Davis stated that he made a gravity finding of "highly
likely,*' and considered the violation to be S&S, because he
believed that the driver could have suffered fatal injuries by
the truck coming in contact with the high-voltage line. He
stated that the contact blew out eight of the truck's tires and
that the driver was very upset.
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Mr. Davis stated that he based his low negligence finding on
the fact that the driver may not have been aware of the fact that
he had stopped his truck under the high-voltage line. He stated
that the incident occurred at 4:45 a.m. and that the visibility
was poor. Mr. Davis confirmed that the high-voltage line was
located at an appropriate height above the truck, and that the
height and location of the line did not violate any MSHA
standard.
Mr. Davis stated that the truck driver told him that he had
raised the truck bed to remove snow and ice before loading the
truck. Mr. Davis confirmed that the respondent had a contract
with Beth Energy to haul coal and that it made no difference to
him whether or not the respondent had a sub-contract with anyone
else. He also confirmed that the driver informed him that he had
no haulage contract with Beth Energy (Tr. 20-28).
On cross-examination, Mr. Davis confirmed that although
Mr. Krumenaker did not indicate that he was an employee of the
respondent, he assumed that he was because of the respondent's
sign on the truck. Mr. Davis stated that he is authorized to
issue a citation to an independent contractor for a violation
even though the contractor may not be designated as an independ-
ent contractor on the mine operator's records.
Mr. Davis confirmed that the violation was abated by David
Gould, Beth Energy's plant foreman, and that Mr. Gould instructed
Mr. Krumenaker to be aware of the high-voltage line. Mr. Davis
further confirmed that if the powerline was not located at the
proper height, he would have issued a citation to Beth Energy.
Mr. Davis stated that the State of Pennsylvania PUC number
must be displayed when the coal haulage truck is hauling coal.
He confirmed that he served the citation on the respondent
because he determined that the truck driver was hauling coal off
the mine property which was owned and operated by Beth Energy
(Tr. 29-33). He confirmed that even if Mr. Krumenaker were not
an employee of the respondent, it would have made no difference
to him because he relied on the fact that Mr. Krumenaker was
hauling c'oal for the respondent (Tr. 34).
Mr. Davis confirmed that the driver was parked in his empty
truck while waiting to load and raised his truck bed to free it
of ice and snow which may have presented a tipping hazard and did
not realize that he was under the overhead powerline, Since the
driver jumped out of the vehicle when it contacted the wire, he
was not injured, and the incident was not considered to be a
reportable accident (Tr. 40). He confirmed that he spoke with
the driver who informed him that he did not know that the wires
were overhead (Tr. 41).
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Mr. Davis stated that the sign on the truck was a wooden
board which were standard on all of the respondent's trucks, and
since it contained the respondent's name, he assumed that the
truck belonged to the respondent. He did not ask the driver
whether he worked for the respondent, and simply assumed that he
did because of the sign (Tr. 43). If the driver had told him
that he was an independent contractor, he would llprobably" have
issued a citation to him and a citation to Beth Energy for not
listing the driver on its records as an independent contractor
(Tr. 43).
Mr. Davis confirmed that Beth Energy did not have a sign
warning drivers about low overhead clearances. He did not cite
Beth Energy because it was difficult for Beth Energy to control a
driver's raising of his bed, and Beth Energy usually instructed
people "about raising beds and stuff like that" (Tr. 44). He
confirmed that the location of the power wire met MSHA's minimum
over head clearance distance requirements under section 77.807-2.
He described the truck as a regular triaxle coal haulage truck
with a "telescopic It boom jack for raising the bed (Tr. 46-47).
Mr. Davis confirmed that he spoke with the respondent after
issuing the citation and explained what he had done, and that the
respondent took the position that it was not responsible for the
violation. Mr. Davis then suggested that the respondent seek a
conference with MSHA's district manager, but it did not prevail
on its position that the citation should not have been served on
the respondent (Tr. 51).
Mr. Davis identified exhibits R-3 and R-4, as copies of two
prior citations he issued on January 29, 1987, to Beth Energy at
the Cambria Preparation Plant for violations of section
77.1710(d) and 77.1608(c) when he observed that a truck driver
was not wearing a suitable hard hat while at the dumping silo,
and that the driver was exposed to a hazard while in an area
where coal dumping operations were taking place. He confirmed
that the citations were subsequently modified after Beth Energy
protested during an MSHA conference, and the modifications
reflect that they were reissued to Bulk. Mr. Davis confirmed
that Bulk was subsequently absolved of any responsibility for the
citations, but he could not recall who they were reissued to (Tr.
53). Respondent's counsel explained that after convincing MSHA
during a conference that the cited conditions were caused by
another independent contractor MSHA advised Bulk that they would
be reissued to that contractor and they are not included as part
of Bulk's violation history (Tr. 54-55). Inspector Davis con-
firmed that this was the case, and he indicated that the cita-
tions were issued by MSHA "orallytt to the other unidentified
independent contractor (Tr. 56-57).
In response to a bench question as to the distinctions
between the prior enforcement actions where MSHA absolved the
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respondent from any responsibility for the two prior violations,
and the instant case, Mr. Davis responded "the only way I can
answer that is that at that time that was MSHA policy, I guess.
It was taken out of my hands and turned over to my supervisor and
he handled it" (Tr. 58). A copy of the MSHA district manager's
comments concerning the conference held with the respondent
concerning the contested citation states as follows (exhibit
P-3):
The following citation was conferenced and the
information provided by the operator did not justify
any change. Mr. Merlo stated that he has over 70
independent drivers who haul under his PUC number and
contract with Beth Energy Mines, Inc. He also informed
me that he pays the drivers for what they haul, how-
ever, in his opinion they are not his employees and if
the citation would have been issued to one of his
people there would be no problem. At this point in the
conference Mr. Merlo produced a contract that is held
between his company and all independent drivers which
holds all drivers responsible for fines and penalties
arising out of the use of their equipment. A review of
the contract between Mr. Merlo and his independent
drivers and a discussion with Beth Energy Mines Inc.,
revealed that the Independent Contractor Register
required under Part 45.4 is on file with the production
operator listing Bulk Transportation Services, Inc., as
the contractor. Therefore the citation stands as
issued.
Inspector Davis confirmed that he has never cited a con-
struction subcontractor, and that pursuant to MSHA policy, if
there are contractors and subcontractors present "1 would think
we cite the contractor" (Tr. 68).
Resnondent's Testimony and Evidence
Charles J. Merlo, Jr. confirmed that he is the owner and
president of the respondent company. He stated that including
himself, the company has a total of three employees, and he
identified the other two employees as a dispatcher and a book-
keeper. He further confirmed that the company owns no trucks and
has no truck drivers on its payroll.
Mr. Merlo stated that the company has been granted authority
by the Pennsylvania Public Utilities Commission to haul coal -
within a 45-mile radius, and in certain designated counties. He
stated that he acts as a broker to haul coal for the Beth Energy
Mining Company, a subsidiary of the Bethlehem Steel Corporation,
and he identified a copy of a contract that he has with Beth
Energy (exhibit R-l). He confirmed that he uses the services of
independent haulage truck owner/operators or other trucking
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companies to haul the coal for Beth Energy, and that these indi-
viduals are subcontractors authorized by the contract.
Mr. Merlo explained the procedure followed by his subcon-
tractors to haul the coal from the Beth Energy plant, and he
confirmed that the trucking companies or truck owners call his
dispatcher to ascertain the available coal which needs to be
hauled and these subcontractors are free to accept or reject any
particular coal hauling job.
Mr. Merlo stated that he does not control the work of the
subcontractor coal haulers, does not supply them with any work
rules, and is not responsible for their hazard training. He
believed that the hazard training for the haulage drivers is
provided by Beth Energy at the mine site.
Mr. Merlo identified exhibit R-2 as a copy of his leasing
contract with Mr. Krumenaker, and he confirmed that
Mr. Krumenaker owns his own truck and is responsible for main-
taining it, and for all insurance, social security, and workmen's
compensation coverage. He confirmed that Mr. Krumenakeris also
responsible for the payment of all fines for traffic and
over-weight violations, and that the expenses incurred in connec-
tion with the damage to the truck in question were paid by
Mr. Krumenaker or his insurance carrier.
Mr. Merlo stated that Mr. Krumenaker was compensated for his
services once a month, and that he paid him a fixed sum-for each
ton of coal he hauled and delivered. The amount of coal hauled
and delivered by Mr. Krumenaker was computed by invoices sub-
mitted to the respondent by Mr. Krumenaker, and the coal tonnage
was determined by the weight scales at the Pennsylvania Electric
Company (Penelec) facility where the coal was delivered.
Mr. Merlo stated that the only control he exercises over his
subcontractors concerns where the coal is to be picked up and
where it is to be delivered. He explained that the subcontractor
haulage truck owner/operator will call the respondent's dis-
patcher to ascertain where to pick up and deliver a particular
amount of coal, and that the truckers then pick up and deliver
the coal and bill the respondent for payment based on the coal
tonnage weighed at Penelec when it is delivered.
Mr. Merlo stated that he has no employees located at the
Beth Energy mine site, and he believed that there was nothing he
could have done to prevent the incident in question. He con-
firmed that Beth Energy has notified him by letter in the past
about haulage truck drivers speeding or not wearing hard hats,
and that he has simply passed this information on to the truck
drivers concerned.
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Page 9
Mr. Merlo stated that his company does not perform any
regular services at the mine site, and does not perform the
actual coal hauling services. This is done by contract with the
subcontractor coal haulers. Respondent's counsel stated that
Mr. Merlo is a trucking broker who makes sure that llcoal gets
moved to point A or B and arranges for people to do itI1 and is
not involved in the selling of the coal (Tr. 79). Mr. Merlo
confirmed that he has had the contract with Beth Energy since
1985 or 1986, has no supervisors at the mine site, and performs
no construction work there. The trucks are loaded at the mine
site for transportation from the mine, and they do not haul coal
to the mine. He confirmed that some of the owner/operator truck
contractors which he uses also work for other trucking carriers,
and that some of these truckers have refused to haul coal for him
when they can do better with other carriers, and that there is
constant change, and truckers "come and goI@ (Tr. 85).
Mr. Merlo confirmed that he does not provide his trucking
contractors with any safety rules because they are contractually
responsible for these matters. He has no training responsibili-
ties for the drivers and believes that they are hazard trained at
the mine site (Tr. 86). Mr. Krumenaker has never been employed
bv him, and he exercises no dav-to-day control over him other
than to tell him where the coal is to-be picked up and delivered,
and to make sure that he is insured (Tr. 90). He confirmed that
the citation was abated by Beth Energy by instructing
Mr. Krumenaker. He also confirmed that he has never been pre-
viously cited by MSHA for any violations other than the prior two
citations issued by Mr. Davis which were subsequently found not
to be his responsibility (Tr. 92).
Mr. Merlo identified copies of the two prior citations
issued by Inspector Davis to a truck driver employed by the
Shaffer Trucking Company, one of his subcontractors. Mr. Merlo
stated that the citations were issued when the driver was
observed on his truck bed at a dumping point on the mine site
without wearing a hard-hat. He stated that the citations were
initially served on Beth Energy, but were subsequently modified
at a conference to show the respondent as the responsible party.
Mr. Merlo stated that when he protested this to MSHA, the cita-
tions were again modified and served on Shaffer Trucking Company.
Mr. Merlo confirmed that this was done orally, and he believed
that Shaffer Trucking paid the civil penalty assessments attri-
buted to its employee truck driver. Mr. Merlo stated that he
sees no distinction between the instant case and the past cita-
tions served on Shaffer Trucking, and he believed that the con-
tested citation in this case should have been served on
Mr. Krumenaker as the contractor in control of his truck, and the
individual whose actions resulted in the violation (Tr. 93-96).
On cross-examination, Mr. Merlo stated that he had no knowl-
edge that Mr. Krumenaker had any agreement with Beth Energy to
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haul Coal. He confirmed that Beth Energy contacts him and
informs him how many coal loads are available, and that it is in
his interest to make sure that the coal is hauled by the truckers
who may call in for the jobs (Tr. 103). The truckers are
required by state law to display his company identification
decals when they are operating on his behalf. The agreement that
he has with Mr. Krumenaker is the same agreement that he has with
the 70 to 100 truckers which he uses, more than half of whom are
owner/operators (Tr. 109). He confirmed that he leases
Mr. Krumenaker and his truck, and he cannot let anyone else drive
it since Mr. Krumenaker owns it and controls who drives it (Tr.
116).
Insoector Davis was recalled by the'court, and he confirmed
that the prior two citations which he issued were issued because
of two violations by one single truck driver in the employ of
Shaffer Trucking Company. Mr. Davis stated that he initially
served the violation on Beth Energy Mines because it had someone
at the coal silo area in question supervising the loading and
should have observed the violations (Tr. 128-130). He believed
that Shaffer Trucking had its own MSHA ID number, and was.readily
identifiable, but that Mr. Krumenaker in this case did not have
any number identifying him as an independent contractor, and he
had no knowledge that Mr. Krumenaker was in fact an independent
contractor (Tr. 132). When asked whether it made any sense from
an enforcement point of view not to cite Mr. Krumenaker simply
because he had no assigned ID number of record, Mr. Davis
responded "with independent contractors, its tough. That's why
we try to get back to that 45.4 to try and hold it for some
reasonable justification or responsibility by that history" (Tr.
133). He confirmed that MSHA's regulation does not say anything
about subcontractors (Tr. 134). Respondent's counsel confirmed
that when the two prior citations were transferred from Beth
Energy to the respondent, the respondent did not have an MSHA ID
number, but subsequently obtained one (Tr. 139).
Petitioner's Arauments
MSHA asserts that Bulk was an independent contractor for
Beth Energy, was registered as such by Beth Energy in accordance
with 30 C.F.R. § 45.4, and was also identified as an independent
contractor in the agreement it had with Beth Energy. MSHA points
out that Bulk was performing a service at Beth Energy's mine in
that it was the contractor who picked up and delivered coal to
Beth Energy's customers, it was the exclusive carrier for coal
delivered to the Penelec power station, and it hauled coal for
Beth Energy at least 4 or 5 days a week. Under these circum-
stances, MSHA concludes that in order to be consistent with the
expansive definition of lloperatorll found in the Act, and as noted
by the Commission in Otis Elevator Comoanv, 11 FMSHRC 1896,
1901-1902 (October 1989), bulk must be considered an operator
under the Act.
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MSHA argues that Bulk used subcontractor truck drivers who
operated under its PUC authority to haul the coal from Beth
Energy, and that these drivers, who typically varied from week to
week, provided lra constant flow of truck drivers in and out . . .
working for Bulk." The lease agreement between Bulk and its
subcontractors provided for periodic vehicle inspections by Bulk,
and the agreement between Beth Energy and Bulk provided that Bulk
would 'Ialso inspect each motor vehicle after loading in order to
assure the safe movement of the load and vehicle in compliance
with any law, regulations or requirement relating to the trans-
portation performed under this Agreement.1@ In addition, MSHA
points out that it was Beth Energy's practice to send a letter to
Bulk detailing any problems that had been noted with Bulk
drivers, so that Bulk could notify the drivers themselves. MSHA
concludes that contrary to Bulk's position, it is clear that it
had the power to exercise control over its subcontractor drivers,
and indeed exercised such control.
With regard to the prior citations issued by MSHA in 1987,
which were initially issued to Beth Energy, and subsequently
issued to Bulk, and then vacated and modified to cite Bulk's
subcontractor, MSHA cites several estoppel decisions and takes
the position that its prior actions in this regard does not estop
it from citing Bulk for the violation in this case. MSHA con-
cludes that who it may or may not have previously cited is not
dispositive of the issue presented in this case, which is whether
or not MSHA correctly cited Bulk. MSHA takes the position that
it has retained wide enforcement discretion with regard to its
ability to cite either the production operator, the independent
contractor, or both, and that unless it has abused its discre-
tion, its decision on whom to cite should stand. Consolidation
Coal Comnanv 11 FMSHRC 1439 1443 (August 1989) (citing Brock v.
Cathedral Blhffs Shale Oil CA., 796 F.2d 533, 538 (D.C. Cir.
1986).
MSHA maintains that it has not abused its discretion by
citing Bulk for the violation. In support of this conclusion,
MSHA asserts that Bulk is responsible for supplying truck drivers
who are willing to pick up and deliver coal, and that the drivers
are not paid by Beth Energy, do not report for work to Beth
Energy, and cannot be hired or fired by Beth Energy. MSHA points
out that because of the constant flux of drivers in and out, only
Bulk would have records of who picked up coal on any given day.
Further, Bulk has, in the past, instructed its drivers to wear
hard hats, at Beth Energy's request, and that Bulk can choose to
hire or not to hire any driver that applies for work. Under
these circumstances, MSHA concludes that Bulk clearly exercises
authority over these drivers in a way that Beth Energy cannot,
and that Bulk's attempt to disregard its responsibilities under
the Act merely because its truck drivers are contractors and not
its employees cannot stand.
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MSHA argues that Bulk is fulfilling an integral role in the
mine extraction process and cannot insulate itself from its
responsibilities created from this role by contractual agreement
with Beth Energy. In view of the-fact that Bulk has reserved for
itself the power to inspect'the trucks and has the ability to
inform all truck drivers of any information it feels is pertinent
to the job, MSHA concludes that holding Bulk responsible for the
actions of the truck drivers is logical. MSHA believes that
between Beth Energy and Bulk, Bulk is the entity most able to
exercise control over the drivers, and that between Bulk and the
drivers, Bulk has the continuing association with the mine, and
the opportunity to be aware of the specific problems that may
exist there. Accordingly, MSHA concludes that its policy
decision to hold Bulk liable for the cited violation is based on
sound reasoning and does not constitute an abuse of its
discretion.
With regard to the alleged violation of 30 C.F.R.
0 77.807-3, MSHA takes the position that the truck which was
operated by Bulk's contractor, Mr..Krumenaker, was a piece of
equipment that was being operated on the surface of the mine, and
that Mr. Krumenaker was required to pass under the energized
high-voltage line in order to pick up and deliver the coal. MSHA
points out that since Mr. Krumenaker had raised his truck bed,
the clearance between the truck and the overhead powerline was
less than that required by the standard. Further, since
Mr. Krumenaker's raised truck bed contacted the energized power-
wire, MSHA concludes that Bulk failed to take any precautions to
deal with or prevent accidents of this kind, and violated the
cited standard.
With regard to the inspector's "significant and substantial"
violation finding, MSHA asserts that the inspector's uncontra-
dicted testimony establishes that the violation was significant
and substantial and that it is the type of violation which pre-
sents a high possibility for a fatal accident. Contact with an
energized powerline could result in the electrocution of anyone
operating or standing near the piece of equipment that makes
contact if that person should touch the truck and the ground at
the same time. Although the incident in question did not result
in any injury to the driver, the tires were blown out on the
truck, indicating the seriousness of the hazard. Citing
Secretary v. Cement Division, National Gynsum Co., 3 FMSHRC 822,
825 (April 1981), MSHA concludes that the "significant and sub-
stantial" violation test established by that case has been met,
and that the inspector's finding should be affirmed.
Respondent's Arquments
The facts show that Bulk had an agreement with Beth Energy
to arrange for transportation of coal from Beth Energy's Cambria
783
Page 13
Mine to the Pennsylvania Electric Power Plant, as well as to
other sites designated by Beth Energy. Bulk asserts that it is a
broker of coal transportation services and as such cannot be
deemed an l'operatorVV under the Act and liable for civil penal-
ties. In support of its argument, Bulk points out that it dis-
charges its contractual obligation to Beth Energy by engaging
subcontractor carriers and independent owner/drivers to transport
the coal which is loaded by Beth Energy personnel at the mine.
Bulk further points out that other than the owner of the company,
it only employs a dispatcher to find drivers to haul the avail-
able.coal for each day, and a bookkeeper to arrange for payment
of the amounts invoiced by the subcontractors and to insure
proper payment from Beth Energy. Bulk maintains that it does not
operate any portion of the mine, performs no construction work,
and does not supervise any employees at the site. Since its
subcontractor truckers are loaded by Beth Energy, and the drivers
do not normally get out of their trucks when picking up coal
until immediately before they reach the highway to cover their
loads with a tarp, Bulk asserts that there are no activities for
it to supervise or oversee at the site which could arguably make
it a production operator.
Conceding the fact that the definition of "operatorN' was
expanded by the 1977 Mine Act to include independent contractors
performing services or construction at a mine site, Bulk nonethe-
less argues that the expanded definition is not so widely encom-
passing and cannot be read to include any person or entity which
may have any connection, contractual or otherwise, with a mine
owner, particularly when such a person or entity does not main-
tain a presence on the mine site. Bulk concludes that such a
construction of the statute would cause any.entity with a con-
tract to perform any service with a mine owner, whether or not it
related to the extraction process or mine construction, subject
to civil penalties. Bulk further concludes that it is apparent
from the legislative history of the Act that only independent
contractors actually performing services at the mine site, such
as construction or extraction related work, are to be included as
l'operatorsqV with the same statutory compliance obligations as
mine owners or mine production operators.
Bulk maintains that its relationship with its independent
owner/drivers and other trucking companies is a bona fide
arms-length contractual relationship which is customary in the
transportation business and one which was not intended to avoid
liability under the Act. Bulk asserts that its subcontractor
truckers are not its employees or agents, and since they are
either **persons" or tlfirmstl that "contract to perform services at
a mine" and actually work at the mine site to pick up coal and
haul it to its destination, they, and not Bulk, are the independ-
ent contractors under the Act's regulations.
784
Page 14
Bulk points out that the owner/drivers own and maintain
their own vehicles and are generally engaged in occupations and
provide services apart from their work with Bulk inasmuch as they
regularly refuse to take loads offered because of more lucrative
work they have been given. There-is a written contract which
details the rights the parties have with respect to each other
(Tr. 87). There is no contractual requirement that the subcon-
tractors must accept every load offered. There is also no train-
ing provided by Bulk because the subcontractors are already
"permitted" operators. The carrier subcontractors are not paid
by the hour, the mile, by salary, or in any other manner, except
by the actual tonnage hauled and only on a monthly basis after
submitting invoices. The subcontractors, such as Mr. Krumenaker,
pay their own fines and all costs and expenses incident to the
operation of their vehicles. Under all of these circumstances,
Bulk concludes that it is not the independent contractor perform-
ing services at the mine site and is not subject to civil penal-
ties under the Act.
Assuming arauendo that it is subject to the jurisdiction of
the Act as an "operator, o Bulk submits that MSBA abused.its
discretion by citing it for the violation incurred by its inde-
pendent subcontractor James Krumenaker, the owner and operator of
the truck which contacted the over powerline in question, because
the Act requires that the proper party t*operatorll responsible for
the violation be held liable. Bulk maintains that the proper
party lloperatoP is+Mr. Krumenaker.
In support of its conclusion that Mr. Krumenaker is the
proper party to be charged with the violation, Bulk asserts that
there is no dispute that the acts of Mr. Krumenaker were the
cause of the issuance of the citation to Bulk. Bulk relies on
the testimony of Inspector Davis who confirmed that the citation
was issued because Mr. Krumenaker's truck came in contact with
the high-voltage line, and he assumed that Mr. Krumenaker was
employed by Bulk. Bulk points out that Inspector Davis admitted
that he did not question Mr. Krumenaker to determine whether the
truck was in fact was owned by Bulk or whether Mr. Krumenaker was
an employee of Bulk. Bulk also points out that the inspector
cited Bulk because it was listed on Beth Energy's register as an
independent contractor pursuant to MSBA's requirements in
30 C.F.R. 8 45.4, and Mr. Krumenaker was not.
Bulk asserts that there is no evidence that it had any
presence on the mine site at the time of the violation, that it
did not contribute to the conditions which caused the violation
by Mr. Krumenaker, and that it could not have anticipated or
prevented the violation. Bulk cites the testimony of Mr. Merlo
that there was nothing Bulk could have done to either prevent or
minimize the chances of Mr. Krumenaker raising his truck bed at
5:00 a.m., while waiting in line for coal and coming in contact
with the high voltage wire. Under these circumstances, Bulk
785
Page 15
concludes that MSHA abused its discretion by citing Bulk instead
of Mr. Krumenaker, the 'operator1 with direct control over the
hazard, and the operator who is in the best position to abate the
hazard.
Citing Phillins Uranium Cornoration, 4 FMSHRC 549 (April
1982), Affinitv Minins Comnany, 2 IBMA 57, 80 I.D. 229 (1973),
Old Ben Coal Co., 1 FMSHRC 1480 (October 1979), and Old Dominion
Power Comnanv, 6 FMSHRC 1886 (August 1984), Bulk asserts that in
this case MSHA has reverted to its previously discredited policy
of citing, for administrative convenience purposes, an entity
(Bulk) merely in contractual privity with the person causing a
violation rather than the actual violator (Mr. Krumenaker) in a
situation where the cited party (Bulk) did not contribute or have
control over the circumstances of the violation. Recognizing the
fact that MSHA has retained wide enforcement discretion in choos-
ing which of two or more operators it will cite for a violation,
Bulk nonetheless believes that this discretion is not unlimited
and must be exercised rationally and consistently with the intent
and purposes of the Act. Although it is clear that Bulk did not
own the truck or employ the driver, it was cited simply because
the inspector assumed that the driver was an employee of Bulk and
operated a truck owned by Bulk and because Bulk was listed on the
mine operator's registry as an independent contractor. Under
these circumstances, Bulk concludes that MSHA ignored both the
status of the violating party and the circumstances of the viola-
tion and cited Bulk purely for administrative convenience because
it was listed as an independent contractor.
Bulk argues further that MSHA abused its enforcement discre-
tion by failing to consistently enforce the Act and regulations
inasmuch as it has in the past vacated citations issued to Bulk
in its capacity as a coal carrier broker when it was found that
Bulk's independent subcontractors actually caused the violations.
In support of this argument Bulk relies on the record in this
case which establishes that in 1987, two separate citations were
originally issued to Beth Energy by MSHA for violations concern-
ing a driver employed by one of Bulk's subcontractors, Shaffer
Trucking. Beth Energy, at an MSHA manager's conference, con-
vinced the district manager that Bulk, as the party with whom it
contracted for the coal haulage service, was the proper party
against whom the citations should issue. The citations were
modified and issued to Bulk. Bulk then contested the issuance of
the modified citations at a district manager's conference and
claimed that the citations should issue to Bulk's independent
subcontractor, Shaffer Trucking, because it employed the driver
and owned the truck involved in the violations, and not Bulk.
The district manager, then called Mr. Merlo and informed him that
the citations would be vacated as to Bulk. The citation were
later issued to Shaffer Trucking. Inspector Davis, who issued
786
Page 16
the violations in 1987, confirmed that the two citations pre-
viously issued to Bulk were vacated and modified to charge Bulk's
subcontractor with the violations.
In this case, after receiving the citation issued by Inspec-
tor Davis, Bulk again requested a conference with MSHA and raised
the identical defense it raised in connection with the other
citations issued in 1987. However, contrary to the district
manager's decision in 1987, MSHA refused to either vacate the
citation issued to Bulk, or to reissue it to Mr. Krumenaker. The
district manager relied on the fact that Bulk was listed as the
independent contractor on a register maintained by Beth Energy
pursuant to 30 C.F.R. 5 45.4. Bulk maintains that the 1987
citations are identical in terms of who the responsible party for
the violations should be. When asked to distinguish the facts
presented in this case and MSHA's prior actions in vacating the
citations issued to Bulk and reissuing them to its subcontrac-
tors, Inspector Davis could not distinguish these actions except
that there may have been a I1mistakeW in the handling of the 1987
citations: or MSHA's policy may have changed; or the MSHA super-
visor just "handled it." Bulk takes the position that none of
these reasons justify the disparate and inconsistent handling of
the contested citation in this case.
Bulk argues that MSHA properly vacated the 1987 citations
because the purposes of the Act are best effectuated by "citing
the party with immediate control over the working conditions.lt
Bulk believes that MSHA has shown no connection between the acts
of its subcontractor, Mr. Krumenaker, except to say that Bulk is
the entity listed on Beth Energy's independent contractor regis-
ter. Bulk submits that MSHA's refusal to vacate the violation is
unsupportable and is a blatant reversal of its prior decisions
concerning the citation of Bulk when its acts do not contribute
to the violations of another operator. Bulk concludes that the
purposes of the Act are not furthered by inconsistent and
unpredictable MSHA enforcement decisions such as those made in
connection with violations found to have been caused by Bulk's
independent subcontractors. For these reasons, even if Bulk is
found to be an operator subject to civil penalty assessments, it
believes that the citation issued in this case should be vacated
and that MSHA should be compelled to act consistent with its
prior decisions concerning violations by Bulk's subcontractors.
Bulk acknowledges that owners or production operators of a
mine can be held strictly liable for the violations of their
independent contractors. However, Bulk asserts that there is no
basis under the Act to hold it vicariously liable for any inde-
pendent acts of its subcontractors, and that MSHA is erroneously
attempting to hold Bulk to the same strict liability standards
imposed by the Act upon lVownerstl of a mine or "production oper-
ators." Bulk points out that it is undisputed that it is not a
production operator or owner of a mine, and does not operate any
787
Page 17
portion of a mine or supervise any personnel at any mine site.
Therefore, Bulk concludes that the basis of its alleged strict
liability cannot then be because it is a production operator or
owner inasmuch as it does not control or own the Beth Energy
mine.
Bulk asserts that MSHA apparently believes that Bulk, by
virtue of its subcontractor relationship with a person or entity
performing services at a mine, is strictly liable for its sub-
contractors' violations even if it did not contribute to the
occurrence of the violation. In support of this conclusion, Bulk
points out that it was cited because it was listed as the con-
tractor on Beth Energy's register, and that during the hearing,
MSXAls counsel stated that any person with a contract with the
production operator and who is registered as a contractor pur-
suant to MSHA's regulations is strictly liable for its subcon-
tractor's violations. Bulk concludes that MSHA's position is not
supported by the Act or the controlling regulations and cases.
Assuming that MSHA may legally equate Bulk with a production
operator and hold it strictly liable for its subcontractors'
violations, Bulk maintains that MSFIA has clearly abused its
discretion when it issued the citation contrary to the provisions
of MSHAls General Enforcement Policy for Independent Contractors
contained in its Program Policy Manual (exhibit E to Bulk's
posthearing brief).
Bulk asserts that MSHA's enforcement policy guidelines do
not support citing only bulk and not its subcontractor,
Mr. Krumenaker, if Bulk's liability is the.same as that of the
Itproduction operator." Consequently, since it is not a produc-
tion owner, Bulk concludes that it cannot be held strictly liable
for its subcontractor's violations. Even if it were held to such
a standard, Bulk further concludes that citing Bulk is not
supported by MSIiA's own policy concerning independent contrac-
tors, and that Mr. Krumenaker should have been cited because:
1. There was no. testimony from either the
Secretary or Bulk remotely indicating that Bulk in any
manner contributed to Mr. Krumenaker's violation when
he raised his truck bed and inadvertently made contact
with the high voltage wires.
2. Bulk did not contribute to the continued
existence, if any, of the violation.
3. No Bulk employees were subject to the hazard
and only the subcontractor himself was in immediate
danger.
788
Page 18
4. There was no testimony indicating that Bulk
had any control over the condition that needed abate-
ment: namely, that the subcontractor in the future
exercise more caution and care while driving his truck
near similar hazards.
With regard to the removable sticker reciting Bulk's public
authority numbers, which was on Mr. Krumenaker's truck, Bulk
asserts that it is regulated by the Pennsylvania Public Utility
Commission (PVC) and is only authorized to haul coal in certain
defined areas, and its independent contractors must operate
within Bulk's PUC authority and display on the truck Bulk's PUC
numbers so that PUC may enforce its territorial authorizations.
Bulk points out that when the truckers are not hauling under its
PUC authority, the stickers are removed, and the fact that they
indicate that independent contractors may be hauling under Sulk's
PUC authority does not mean that the contractors hold themselves
out as Bulk's employees or agents or that they should be viewed
in any other way than as independent contractors operating as
required by Pennsylvania law under the proper carrier's
authority.
Finally, Bulk argues that there is'no evidence that.its
negligence in any way contributed to Mr. Krumenaker's violation.
Bulk concedes that it cannot completely shield itself from statu-
tory liability by using independent contractors, and if it uses
subcontractors that it knows or should know have a proclivity to
violate safety rules'or operate their trucks illegally or in an
unsafe condition, it may contribute to a violation and properly
be held accountable. However, in this case, Bulk maintains that
it was not negligent in subcontracting coal loads to
Mr. Krumenaker, and that the Act does not require it to per-
sonally supervise its independent contractors to such an extent
that it insures that the isolated incident such as the one
involving Mr. Krumenaker does not occur. Bulk concludes that any
negligence concerning the violation should exclusively be attri-
butable to Mr. Krumenaker.
Findinss and Conclusions
The Jurisdictional Issue
Bulk takes the position that it is not an Q1operatorlt under
the Act, has no employees present at the mine site, and is simply
a coal haulage broker who has a customary and normal bona fide
arms-length contractual relationship with its independent
owner/drivers and other trucking companies whose services it
utilizes to fulfill its obligation to haul coal pursuant to an
agreement with the production mine operator. MSHA takes the
position that Bulk was an independent contractor for the mine
operator and was identified as such pursuant to MSHA's independ-
ent contractor regulations, as well as in its agreement with the
789
Page 19
mine operator. MSHA further points out that Bulk was performing
a service at the mine in that it was the exclusive contractor who
picked up and delivered the coal to at least one of the mine
operator's customers, and also picked up and delivered coal to
other customers.
Section 4 of the Act provides as follows: WEach coal or
other mine, the products of which enter commerce, or the opera-
tions or products of which affect commerce, and each operator of
such mine, and every miner in such mine shall be subject to the
provisions of this Act."
The legislative history of the Act clearly contemplates that
jurisdictional doubts be resolved in favor of Mine Act jurisdic-
tion. The report of the Senate Committee on Human Resources
states:
The Committee notes that there may be a need to resolve
jurisdictional conflicts, but it is the Committee's
intention that what is considered to be a mine and to
be regulated under this Act be given the broadest
possible interpretation, and it is the intent of this
Committee that doubts be resolved in favor of inclusion
of a facility within the coverage of the Act.
S. Rep. 95-181, 95th Cong., 1st Sess. (May 16, 1977) at 14:
Lesislative Historv of the Mine Safety and Health Act, Committee
Print at 602 (hereinafter cited as m. Hist.).
Section 3(d) of the Act defines lloperatorW as "any owner,
lessee, or other person who operates, controls, or supervisors a
coal or other mine or anv independent contractor nerforminq
services or construction at such mine." (Emphasis added).
MSHA's Independent Contractor regulations, which provide
certain requirements and procedures for contractors to obtain
MSHA identification numbers, Part 45, Title 30, Code of Federal
Regulations, section 45.1 et sea., defines an "independent con-
tractor" as follows at section 45.2(c): "'Independent Contrac-
tor' means any person, partnership, corporation, subsidiary of a
corporation, firm, association or other organization that con-
tracts to perform services or construction at a mine: * * *I)
The addition of the phrase "any independent contractor
performing services or construction at such mine" as part of the
1977 amendments to the Coal Act was intended "to settle any
uncertainty that arose under the Coal Act, i.e., whether certain
contractors are 'operators' within the meaning of the Act," and
'Ito clearly reflect Congress' desire to subject contractors to
direct enforcement of the Act." Old Ben Coal Co., 1 FMSHRC 1480,
1481, 1486 (October 1979). Accord, Phillips Uranium Corn.,
4 FMSHRC 549, 552 (April 1982).
Page 20
. .
The legislative history of the Mine Act clearly shows that
the goal of Congress, in expanding the definition of U'operatorq'
to include "independent contractors,*1 was to broaden the enforce-
ment power of the Secretary so as-to reach not only owners and
lessees but a wide range of independent contractors as well. In
explaining this amendment, the key Senate report on the bill
enacted into the Mine Act referred not only to those independent
contractors involved in mine construction but also to those
"engaged in the extraction process.l' S. Rep. No. 181, 95th
Cong., 1st Sess. 14 (1977), reorinted in Senate Subcommittee on
Labor of the Committee on Human Resources, 95th Cong., 2nd Sess.,
Legislative Historv of the Federal Mine Safetv and Health Act of
1977 at 602 (1978) ("Leois. Hi&."). Similarly, the Conference
Report referred to independent contractors llperforming services
or construction" and "who may have continuing presence at the
mine." S. Conf. Rep. No. 461, 95th Cong. 1st Sess. 37 (1977),
renrinted in Lesis. Hist. 1315.
The thrust of Bulk's jurisdictional argument is its asser-
tion that it is not a mine production operator or owner, has no
employees at the mine site, performs no construction work at the
mine site, and is engaged in no activities at the mine site
requiring any supervision on its part.. Bulk maintains that the
only independent contractor "operatorstl performing services at
the mine site are its trucking subcontractors and owner drivers,
and not Bulk, and that Bulk is simply a transportation llbrokeP
who merely brokers coal hauling jobs to these "independent con-
tractor" entities. In support of these conclusions, Bulk's focus
is on whether or not there is an employer/employee relationship
between Bulk and the independent contractor and subcontractor
truckers whose services it uses to haul coal, and whether or not
Bulk exercises any supervision or other control over these inde-
pendent coal haulers. Bulk concludes that no such relationship
exists, and that it is not an independent contractor performing
services at the mine.
In Otis Elevator Comnanv, (Otis I), 11 FMSHRC 1896 (October
1 989), and Otis Elevator Companv, (Otis II), 11 FMSHRC 1918
I,October 1989), the Commission affirmed the decisions of Judge
Fauver and Judge Maurer holding that an elevator service company
that inspected, serviced, and maintained a mine elevator under a
contract with the mine operator was an independent contractor
l*operator" subject to the Act and to MSHA's enforcement jurisdic-
tion. The Commission affirmed the Judges' findings that Otis had
a continuing, regular, and substantial presence at the mine site
performing services on an elevator which was a key facility and
essential ingredient involved in the coal extraction process. In
making its determination, the Commission relied on the expanded
definition of "operator" found in the Act, and examined the
independent contractor's proximity to the extraction process and
the extent of its presence at the mine to determine whether the
791
Page 21
independent contractor was an operator under the Act. This same
analysis is relevant and appropriate in this case.
The evidence in this case establishes that Bulk is a
Delaware Corporation engaged in the business of providing coal
transportation services to Bethlehem Steel Corporationts Beth
Energy Division. Bulk has stipulated that at the time of the
alleged violation, it had a contract with Beth Energy to haul
coal from its Cambria Slope Preparation Plant to sites designated
by Beth Energy, and that the coal hauled by Mr. Krumenaker on
that day was being placed into the stream of interstate commerce.
Bulk also stipulated that it was registered as an independent
contractor of Beth Energy pursuant to MSHA's regulations found in
Part 45, Title 30, Code of Federal Regulations, and pursuant to
Bulk's contract with Beth Energy, Bulk was at all times consid-
ered an independent contractor and not the agent or representa-
tive of Beth Energy (Contract, Article VII, Section 7.1, Exhibit
R-l).
Bulk's contract with Beth Energy commenced on October 1,
1986, and will terminate on December 31, 1991, unless further
extended for an additional 3 years, at the option of Beth Energy.
Pursuant to two additional agreements noted in the contract under
llScope of Work, *I Bulk was designated to pick up, deliver, and
unload all of the coal from Beth Energy to Penelec. One agree-
ment provides for deliveries of approximately 30,000 tons of raw
coal monthly to Penelec, and the second agreement provides for
deliveries of approximately 20,000 tons of clean coal monthly to
Penelec. Bulk was obligated to deliver and unload any additional
increased quantities of coal in accordance with delivery
schedules established by Beth Energy.
Although it is true that Bulk does not own any of the coal
haulage trucks, and that the drivers are not employed by Bulk,
the fact remains that Bulk provides and performs services for the
mine operator Beth Energy at the mine, albeit through the use of
subcontractor and owner/operator truck drivers. Under the terms
of the contract, Bulk was obligated to pick up the coal at the
mine site and have it delivered and unloaded at the customer
destinations designated by.Beth Energy. The coal is loaded by
Beth Energy's miners. Although Bulk chose to use subcontractors
to transport and deliver the coal, with Beth Energy's blessings,
Bulk was nonetheless legally obligated for the performance of the
services called for under the contract. Beth Energy had no
direct dealing with the subcontractors, and it looked to Bulk to
provide its coal transportation needs. Given the large volumes
of coal required to be transported by Bulk, and the fact that
Bulk had the exclusive right to transport all of Beth Energy's
coal to Penelec, I conclude and find that bulk was performing an
essential service for Beth Energy which was closely related to
the mine extraction process and was indeed an essential
ingredient of that process. Beth Energy is obviously in the
792
Page 22
business-of marketing its coal,
* .
and without the means for trans-
porting it to its customers tnrough the services provided by
Bulk, it would not remain in business very long.
As noted earlier, Bulk's contract to provide transportation
services for Beth Energy's coal was for a 5-year period, subject
to renewal at Beth Energy's option. The contract included two
agreements for the transportation of coal on a regular monthly
basis. Although the subcontractors used by Bulk had the option
of accepting or declining to make themselves available to Bulk to
transport Beth Energy's coal, any subcontractors utilized by Bulk
to provide the services to Beth Energy, were legally operating
under Bulk's state public utility approval. Bulk's owner Charles
Merlo testified that he had Ira constant flow of truck drivers"
working for Bulk when it provided its transportation services to
Beth Energy (Tr. 85), and I find no evidence that Bulk's services
to Beth Energy were ever interrupted by Bulk's inability to
retain subcontractor or owner/operated trucks to transport and
deliver coal. Mr. Merlo confirmed that coal is hauled from the
mine on an average of 4 to 5 days a week, and that there are
occasions when it is hauled 6 days a week (Tr. 107). Under all
of these circumstances, I conclude and find that Bulk had a
continuous presence at the Beth Energy Mine.
In view of the foregoing findings and conclusions, I con-
clude and find that at all times relevant to this proceeding,
Bulk was an independent contractor subject to the Act and to
MSBA's enforcement jurisdiction, and Bulk's arguments to the
contrary are rejected.
Fact of Violation
Bulk is charged with a violation of mandatory safety stan-
dard 30 C.F.R. 5 77.807-3, which states as follows:
When any part of any equipment operated on the surface
of any coal mine is required to pass under or by any
energized high-voltage powerline and the clearance
between such equipment and powerline is less than that
specified in section 77.807-2 for booms and masts, such
powerlines shall be deenergized or other precautions
shall be taken. (Emphasis added).
MSHA takes the position that the truck operated by
Mr. Krumenaker was a piece of equipment that was being operated
on the surface of the mine, and that Mr. Krumenaker was required
to pass under the energized high-voltage line in order to pick up
and deliver the coal. MSHA points out that since Mr. Krumenaker
had raised his truck bed, the clearance between the truck and the
overhead powerline at that point in time was less than that
required by the standard. Further, since Mr. Krumenaker's raised
truck bed contacted the energized powerwire, MSHA concludes that
793
Page 23
Bulk failed to take any precautions to deal with or prevent
accidents of this kind.
Although the inspector found that the high-voltage line in
question was located at an appropriate height above the truck,
and that the height and location of the line did not violate any
mandatory standard, the fact remains that by raising his truck
bed while parked directly below the line, Mr. Krumenaker caused
the clearance between the raised boom or mast of his truck and
the line to be less than that stated in section 77.807-2. In
such a situation, the standard required that the line be
deenergized or other precautions taken to avoid contact with the
line. Since this was obviously not done, I conclude and find
that a violation of section 77.807-3, has been established.
Estonnel Issue
Bulk takes the position that MSHA's inconsistent and
unpredictable enforcement decisions with respect to the prior
vacation of two citations issued to Bulk in 1987, and its subse-
quent refusal to vacate the citation issued in this case,
justifies the dismissal of this action. As correctly stated by
MSHA, the argument advanced by Bulk is essentially one of
equitable estoppel. In Secretarv of Labor v. Kina Knob Coal
Comnanv, Inc., 3 FMSHRC 1417, 1422 (June 1981), the Commission
rejected the doctrine of equitable estoppel, but viewed the
erroneous action of the Secretary (mistaken interpretation of the
law leading to prior non-enforcement) as a factor which may be
considered in mitigation of any civil penalty assessment. The
Commission stated in relevant part as follows at 1421-1422:
[T]his restrained approach is buttressed by the con-
sideration that approving an estoppel defense would be
inconsistent with the liability without fault structure
of the 1977 Mine Act. See El Paso Rock Quarries. Inc.,
3 FMSHRC 35, 38-39.(1981). Such a defense is really a
claim that although a violation occurred, the operator
was not to blame for it.
Furthermore, under the 1977 Mine Act, an equitable
consideration, such as the confusion engendered by
conflicting MSHA pronouncements, can be appropriately
weighed in determining the appropriate penalty (as the
judge did here).
See also: Midwest Minerals Coal Comuanv, Inc., 3 FMSHRC
1417 (January 1981); Missouri Gravel Co., 3 FMSHRC 1465 (June
1981); Servtex Materials Company 5 FMSHRC 1359 (July 1983). In
Emery Minins Corporation v. Secr&arv of Labor, 3 MSHC 1585, the
Court of Appeals for the Tenth Circuit, in affirming the
Commission@s decision at 5 FMSHRC 1400 (August 1983), stated as
follows at 3 MSHC 1588:
794
Page 24
As this court has observed, l'courts invoke the
doctrine of estoppel against the government with great
reluctanceV@ . . . . Application of the doctrine is
justified only where '@it does not interfere with under-
lying government policies or unduly undermine the
correct enforcement of a particular law or regulation"
Equitable estoppel "may not be used to con-
&d& a clear Congressional mandate," . as
undoubtedly would be the case were we to'apply it
here . . . .
This case presents a rather unique factual situation in that
the production mine operator, Beth Energy, had a contract with
its independent contractor Bulk which required Bulk to transport
clean and raw coal from the Beth Energy mine site. Beth Energy
paid Bulk for this service. Since Bulk did not own or operate
any trucks, and with the approval of Beth Energy, Bulk utilized
the services of subcontractor trucking companies or independent
truck owner/operators such as Mr. Krumenaker to perform its
contractual coal transportation obligations to Beth Energy. Bulk
paid its subcontractors for their services. In this scenario,
there are conceivably three separate entities who may be con-
sidered culpable "operators" subject to the Act, and accountable
for the violation in question, namely, Beth Energy, Bulk, and
Mr. Krumenaker. The issue as framed by Bulk is whether or not
MSHA's decision to proceed only against Bulk for the alleged
violation, rather than against the production operator, or Bulk's
subcontractor driver/owner Krumenaker, was made for reasons
consistent with the purposes of the 1977 Mine Act.
In Phillins Uranium Cornoration, 4 FMSHRC 549 (April 1982),
the Commission reiterated that the inclusion of independent
contractors as "operatorsl@ subject to the Act clearly reflected
Congress' desire to subject contractors to direct enforcement of
the Act, and that MSHA's independent contractor regulations
reflect that the interest of miner safety and health will be best
served by placing responsibility for compliance on each independ-
ent contractor.
There is no evidence that Mr. Krumenaker or any of the other
unidentified subcontractors who may have been used by Bulk to
transport coal from the Beth Energy mine site had MSHA independ-
ent contractor ID numbers. The only entity identified and
registered as an independent contractor pursuant to MSHA's regu-
lations at 30 C.F.R. 0 45.4, was Bulk. I find no evidentiary
support for Bulk's conclusion that the 70 to 100 subcontractor
truck operators used by Bulk to perform its contract obligations
with Beth Energy are in fact independent contractors pursuant to
the Act and MSHA's regulations. Although one may or may not
assume that they are, absent any facts or evidence as to the
extent of their presence at the mine site, and absent any further
795
Page 25
information with respect to the factors that one must consider to
make such a determination, I cannot conclude that each and every
subcontractor conceivably used by Bulk to transport coal on any
given day is an independent contractor subject to the Act.
The lease agreement between Bulk and Mr. Krumenaker was for
1 year, and it provides for the lease of Mr. Krumenaker's truck
by Bulk for the "transportation of property." Under the terms of
the lease, Bulk and Mr. Krumenaker had an independent contractor
relationship which was not intended to create an employee-
employer relationship. In short, Mr. Krumenaker was an independ-
ent contractor leasing his truck, and himself as the driver, to
Bulk. Mr. Krumenaker had no contract with Beth Energy to perform
any services at the mine. As a matter of fact, his lease agree-
ment with Bulk does not mention the haulage of coal or any
particular commodity, and Bulk was free to contract with anyone
of its choosing to transport any "property," including the
services of Mr. Krumenaker and his truck under their lease agree-
ment. The respondent's owner, Mr. Merlo, confirmed that his
lease agreement with Mr. Krumenaker is typical of leases that he
has with 70 to 100 trucking concerns, more than half of whom are
owner/operators.
With regard to Mr. Krumenaker, aside from the fact that he
was at the mine site to pick up a load of coal on the day his
truck contacted the overhead power wire, there is no evidence to
establish the frequency or extent of his presence at the mine
site, or the frequency of his exposure to potential mine hazards.
Although the lease agreement between Bulk and Mr. Krumenaker was
for 1 year, and it was executed on November 3, 1988, 2-months
prior to the issuance of the violation on January 4, 1988, there
is no evidence or testimony as to how often,bulk utilized the
service of Mr. Krumenaker to haul coal from the Beth Energy site,
or how often Mr. Krumenaker may have been there prior to the
incident in question. The evidence establishes that there was a
constant change of subcontractors, that they tVcome and go,'@ and
that the variety of subcontractors used by Bulk to perform its
contract with Beth Energy often worked for other truck carriers,
and they had the option of working or not working for Bulk. When
they did work for Bulk, the services they provided were to Bulk
and not to Beth Energy. Under all of these circumstances,
although the record may support a reasonable conclusion that
Mr. Krumenaker was a subcontractor or independent contractor
performing work for Bulk on the day he contacted the overhead
power' line, I cannot conclude that it establishes that he was
subject to the Act as an independent contractor performing
services for Beth Energy, or that he was otherwise within the
reach of MSHA's enforcement jurisdiction.
The record reflects that MSHA's decision to vacate the prior
citations issued to Bulk was made orally, and there is no docu-
mentation detailing MSHA's rationale in taking this action.
796
Page 26
Although the respondent's assumption that the vacation of the
citations was based on MSHA's finding that Bulk did not cause the
violations may be reasonable, the fact remains that shortly after
the citations were vacated, Bulk applied for and received its own
independent contractor ID number (Tr. 140). When Inspector Davis
issued the citation and cited Bulk in the instant case, he did so
because Bulk was the only readily identifiable contractor with an
assigned MSHA ID number of record, and he assumed from Bulk's
decal on the truck operated by Mr. Krumenaker, that he was an
employee of Bulk. MSHA's subsequent refusal to vacate the cita-
tion was based on the fact that Bulk was registered as the inde-
pendent contractor of Beth Energy (exhibit F-3).
Bulk's assertion that it exercised no control over its
subcontractor drivers is not well taken. The record in this case
reflects that the decision to hire or not hire any subcontractor
truck driver was within the sole discretion of Bulk, and that
Bulk paid the drivers for their services. Further, as pointed
out by MSHA, the lease agreement between.Bulk and its subcontrac-
tors provided for periodic inspections by Bulk of the subcontrac-
tors vehicles, and the agreement between Beth Energy and Bulk
provided for Bulk's inspection of each'vehicle after loading at
the mine site in order to assure safe movement of the load and
vehicle. Notwithstanding Mr. Merle's testimony that Beth Energy
has never required Bulk to have anyone present at the mine site,
since the trucks were loaded at the site, Bulk was obligated
under its contract to inspect the trucks after loading in order
to assure that any coal loads are transported safely from the
site.
Mr. Merlo confirmed that Beth Energy has had occasion to
bring to Bulk's attention the fact that a contract driver may be
speeding or not wearing his hard hat, and that this would be done
by *Ia letter outlining the way we want our truckers to conduct
themselves" (Tr. 91). Bulk in turn would communicate Beth
Energy's safety concerns to the drivers by including any such
letters in the drivers pay vouchers. Mr. Merlo further confirmed
that he could refuse to use the services of any truckers who may
have bad traffic records, and that he would not hire any truckers
who may be cited by MSHA for safety violations (Tr. 103). Under
all of these circumstances, I conclude and find that Bulk did in
fact exercise/control over its subcontractor drivers, and that it
may be held accountable and liable for violations of MSHA's
standards, on an equal footing with the production mine operator
and any other independent contractor or subcontractor found
subject to the Act.
The question of whether to cite the mine operator or an
independent contractor for a violation of a mandatory safety or
health standard is within MSHA's enforcement discretion, and
unless MSHA abuses its discretion, its decision should be
affirmed. As the Commission note in Consolidation Coal Comnanv,
797
Page 27
11 FMSHRC 1439, 1443, (August 1989), and the cases cited therein
*'[C]ourt precedent makes clear that the Secretary has retained
wide enforcement discretion and that courts have traditionally
not interfered with the exercise of that discretion."
It is true that the circumstances concerning MSHA's decision
to vacate the citations issued to Bulk in 1987, and to serve them
on one of Bulk's subcontractors, were no different than the
circumstances under which the contested citation was issued to
Bulk in this case. It is also true that MSHA's refusal to vacate
the citation was contrary and inconsistent with its prior vaca-
tion of the citations. However, I cannot conclude that MSHA
acted arbitrarily and capriciously by refusing to vacate the
contested citation. The oral decision by an MSHA supervisor to
vacate the prior citations a-years prior to the issuance of the
contested citation in this case did not estop Inspector Davis
from issuing the citation and citing Bulk on January 4, 1989, on
the basis of the information then available to him. Since the
evidence does not establish that Mr. Krumenaker was in fact an
independent contractor subject to MSHA's enforcement jurisdic-
tion, and since the inspector determined that Beth Energy did not
violate the cited standard, I conclude and find that citing Bulk
for the violation in question in this case was reasonable and
proper, and Bulk's arguments to the contrary are rejected.
Sisnificant and Substantial Violations
A "significant and substantial" violation is described in
section 104(d)(l) of the Mine Act as a violation "of such nature
as could significantly and substantially contribute to the cause
and effect of a coal or other mine safety or health hazard."
30 C.F.R. § 814(d)(l). A violation is properly designated sig-
nificant and substantial "if, based upon the particular facts
surrounding the violation there exists a reasonable likelihood
that the hazard contributed to will result in an injury or ill-
ness of a reasonably serious nature." Cement Division, National
Gvnsum Co., 3 FMSHRC 822, 825 (April 1981).
In Mathies Coal Co., 6 FMSHRC 1, 3-4 (January 1984), the
Commission explained its interpretation of the term "significant
and substantial" as follows:
In order to establish that a violation of a man-
datory safety standard is significant and substantial
’ under National Gvpsum 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 will result in an injury; and (4) a
reasonable likelihood that the injury in question will
be of a reasonably serious nature.
798
Page 28
In United States Steel Minins Comnanv, Inc., 7 FMSHRC 1125,
1129, the Commission stated further as follows:
We have explained further that the third element
of the Mathies formula "requires that the Secretary
establish a reasonable likelihood that the hazard
contributed to will result in an event in which there
is an injury." U.S. Steel Minins Co., 6 FMSHRC 1834,
1836 (August 1984). We have emphasized that, in
accordance with the language of section 104(d)(l), it
is the contribution of a violation to the cause and
effect of a hazard that must be significant and sub-
stantial. U.S. Steel Minina Comnanv, Inc., 6 FMSHRC
1866, 1868 (August 1984); U.S. Steel Minina Comoanv, .:
Inc., 6 FMSHRC 1573, 1574-75 (July 1984).
The question of whether any particular violation is sig-
nificant and substantial must be based on the particular facts
surrounding the violation, including the nature of the mine
involved, Secretarv of Labor v. Texassulf. Inc., 10 FMSHRC 498
(April 1988); Youshioshenv & Ohio Coal Comoanv, 9 FMSHRC2007
(December 1987).
Although Mr. Krumenaker was not injured when his raised
truck bed contacted the energized high-voltage line, the contact
with the 46,000 volt.line caused eight of the tires on his truck
to "blow out" (Tr. 27). Inspector Davis believed that in the
event Mr. Krumenaker had grounded himself by touching the truck
or ground at the time contact was made with the power line, it
would have been reasonably likely that he would have suffered
fatal injuries (Tr. 26). I believe that Mr. Krumenaker was
fortunate and lucky that he was not seriously injured or fatally
electrocuted when his truck came in contact with the high-voltage
line in question. Under the circumstances, I conclude and find
that the violation was significant and substantial, and the
inspector's unrebutted and credible finding in this regard IS
AFFIRMED.
Size of Business and Effect of Civil Penalty Assessment on the
Respondent's Ability to Continue in Business
Based on the stipulations by the parties, I conclude and
find that the respondent is a small independent contractor sub-
ject to the Act, and that the payment of the civil penalty
assessment for the violation in question will not adversely
affect its ability to continue in business.
Historv of Prior Violations
The record reflects that the respondent has no prior history
of assessed violations, and I have taken this into account in
799
Page 29
assessing a civil penalty for the violation which I have affirmed
in this case.
Neslisence
Mr. Krumenaker was not called as a witness and he did not
testify in this case. As previously noted, there is no evidence
or testimony as to whether or not this was his first trip to the
mine, or whether he had been there before and was familiar with
the site. The inspector's testimony that Mr. Krumenaker may not
have known that he was parked under the high-voltage line
suggests that he either did not realize he was parked under the
line because it was dark, or because this was his first visit to
the mine site and he was not familiar with the location of the
overhead line. In either case, I do not find it unreasonable to
expect a truck driver to get out of his truck and look around for
possible overhead obstructions or other potential hazards before
raising his truck bed to clear it of frozen coal. In the instant
case, I believe that Mr. Krumenaker was in a better position than
Bulk to avoid contact with the overhead powerline. Of course, if
it could be shown that Bulk was familiar with the mine site and
was aware of the potential hazard resulting from a truck with its
raised truck bed coming in contact with the overhead line, then
Bulk would be negligent. However, I find no such evidence in
this case, and I cannot conclude that Bulk could have reasonably
anticipated or prevented the violation.
With regard to Beth Energy's negligence culpability,
although the evidence establishes that the height and location of
the high-voltage line complied with MSHA's standards, the inspec-
tor confirmed that Beth Energy had posted no warning signs, and
it would appear that the'area was not lighted so as to enable a
truck driver to see the overhead line when it was dark. Although
the inspector believed that it was difficult for Beth Energy to
control a driver's raising of his truck bed, and that Beth Energy
%sually1R instructed people about raising their truck beds, he
was not certain that this was the case, and there is no evidence
or testimony to reflect that Beth Energy ever issued any warnings
to Bulk or any of the drivers who came to its property to pick up
coal.
Assuming that Beth Energy installed and maintained the
high-voltage line in question, and given the fact that it had
control of the area where the trucks were expected to travel
while picking up and loading coal, including the location where
Mr. Krumenaker was parked at the time his truck contacted the
line, I believe that Beth Energy knew or should have known that a
driver stopped or parked under the high-voltage line might raise
his truck bed and come in contact with the line. Under the
circumstances, I believe that Beth Energy was obliged to either
increase the height of its line to take into account the extended
height of a raised truck bed, or at least post a warning sign or
800
Page 30
provided overhead lighting for the line so that a driver is made
aware of the potential hazard.
In view of the foregoing, I conclude and find that the
violation did not result from Bulk's negligence. However, the
fact that it was not negligent does not absolve Bulk from liabil-
ity and may not serve as a defense to the violation. As pre-
viously noted, I have found and concluded that as an independent
contractor subject to the Act, Bulk was properly charged with the
violation in question, and the fact that MSHA did not also cite
Mr. Xrumenaker, the driver, or Beth Energy, the mine operator,
was not arbitrary or capricious, and was within &HA's enforce-
ment discretion.
Gravitv
For the reasons stated in my 8*S&S1' findings, I conclude and
find that the violation in question was serious.
Good Faith Comoliance
The inspector confirmed that the violation was abated by
Beth Energy's plant foreman by instructing Mr. Xrumenaker to be
aware of the high-voltage line, and a copy of the citation
reflects that it was,terminated on the same morning that it was
issued. I conclude and find that the violation was promptly
abated in good faith.
Civil Penaltv Assessment
On the basis of the foregoing findings and conclusions, and
taking into account the six statutory civil penalty assessment
criteria found in section 110(i) of the Act, I conclude and find
that in the absence of any negligence on the respondent's part, a
reduction in the initial proposed civil penalty assessment of $54
is warranted in this case. Accordingly, I assess a civil penalty
in the amount of $25, against the respondent.
ORDER
The respondent IS ORDERED to pay a civil penalty assessment
in the amount of $25, for the violation in question, and payment
is to be made to the petitioner within thirty (30) days of the
date of this decision and order. Upon receipt of payment by the
petitioner, this matter is dismissed.
Page 31
Distribution:
Nanci Hoover, Esq., Office of the Solicitor, U.S. Department of
Labor, Room 14480 Gateway Building, 3535 Market Street,
Philadelphia, PA 19104 (Certified-Mail)
Thomas E. Weiers, Jr., Esq., Rich, Fluke, Tishman 0 Rich, 220
Two Chatham Center, Pittsburgh, PA 15219-3423 (Certified Mail)
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