Secretary of Labor v. S&S Dredging Company

Plain-English summary

S&S Dredging used a loader for about two years with a missing bottom step and a bent second step three feet above the ground. An earlier ALJ found the equipment defect was not significant and substantial and was not an unwarrantable failure, but the Commission restored the S&S designation and remanded for a penalty. Judge L. Zane Gill held that the citation could not remain a section 104(d)(1) action because the Secretary had not appealed the earlier finding that unwarrantable failure was not proven. He changed it to a section 104(a) citation, eliminating the statutory $2,000 minimum. Considering the very small operation, high negligence, serious fall hazard, repeat equipment problems, and lack of prior abatement, he assessed a $350 penalty.

Decision snapshot

• Cited standard: 30 C.F.R. § 56.14100(b)
• Outcome: The S&S equipment-defect citation was changed from section 104(d)(1) to section 104(a), and a $350 penalty was assessed.
• Prior review: The Commission restored the S&S designation and remanded for penalty assessment in se-2007-447-m-commission.
• Key point: A section 104(d)(1) citation cannot retain its statutory minimum penalty when unwarrantable failure was not established.

Full text (FMSHRC public release)

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FEDERAL MINE SAFETY
AND HEALTH REVIEW COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

1331 PENNSYLVANIA
AVE., N.W., SUITE 520N

WASHINGTON, DC
20004-1710

TELEPHONE:
202-434-9958 / FAX: 202-434-9949

August 5, 2014

SECRETARY OF LABOR

� �MINE SAFETY AND HEALTH� �

� �ADMINISTRATION (MSHA),

������������
�����������������Petitioner

����������������������� v.

S&S DREDGING COMPANY,

����������������������������� Respondent

CIVIL PENALTY PROCEEDING

Docket No. SE 2007-0447-M

A.C. No. 09-00023-125618� E027

Mine: Lithona Mine Site

�����������

DECISION ON
REMAND

Appearances:� �Robin Rosenbluth, Esq., Office of the Solicitor, U.S. Department
of Labor, Arlington, VA, for the Petitioner

����������������������� W. Christian Schumann,
Esq. Office of the Solicitor, U.S. Department of Labor, Arlington, VA, for the
Petitioner

Melanie Garris, MSHA, U.S. Department of� Labor, Arlington, VA

����������������������� Terry Schildt, S&S Dredging, 405 Pope Trail,
Covington, GA, 30014, for the Respondent

Before:����������� Judge L. Zane Gill

����������� This case is before me upon remand
by the Commission to determine an appropriate civil penalty for Citation No.
7794620.� This case was originally
decided by Administrative Law Judge Avram Weisberger who retired prior to the issuance of the
Commission�s remand.

����������� Citation No. 7794620 charges a
violation of 30 C.F.R. � 56.14100(b), which provides that:� "Defects on any equipment, machinery and
tools that affect safety shall be corrected in a timely fashion to prevent the
creation of a hazard to persons." The citation was issued by the Secretary
of Labor (�Secretary�) under 104(d)(1) of the Federal Mine Safety and Health
Act of 1977, 30 U.S.C. � 814(d)(1). 33 FMSHRC 1324 (May 2011)
(ALJ). The Respondent contested the Secretary�s allegation that the
violation was significant and substantial (�S&S�) and was the result of its
unwarrantable failure to comply with a mandatory safety standard. Id. at
1325-1327. After a hearing, Judge Weisberger vacated
both the S&S and unwarrantable failure designations. Id.
at 1327.

The Secretary filed a petition for
discretionary review, which was granted by the Commission. 35 FMSHRC 1979, 1980
(July 2013). The Secretary contended that the judge erred in overturning the
S&S determination, and the Commission agreed. Id. The Secretary did not, however, petition for review of the judge�s decision
regarding the operator�s unwarrantable

failure. Id. at n2. The Commission found that �[t]he judge
erred by limiting S&S violations to those that are reasonably likely to
result in injuries that require hospitalization, surgery, or require a long
period of recuperation.� Id. at 1981. The
Commission reversed the decision regarding whether Citation No. 7794620 should
be designated as S&S, and affirmed the S&S designation. Id. at 1983. The proceeding was remanded to this
court so that the appropriate penalty could be assessed. Id.

����������� According to Section 110(a)(3)(A), the minimum penalty for any citation or order
issued under Section 104(d)(1) shall be $2,000. 30 U.S.C � 820(a)(3)(A). However, under Section 104(d)(1),
the Secretary has the burden of proving that there was a violation of a
mandatory health or safety standard, that such violation was of such nature as
could significantly and substantially contribute to the cause and effect of a
mine safety or health hazard, and that such violation was caused by an
unwarrantable failure of such operator to comply with such mandatory health or safety
standard. 30 U.S.C. � 814(d)(1). In this case, the
judge found that a health and safety standard, namely Section 56.14100(b), was
violated. 33 FMSHRC at 1325. Additionally, the
Commission affirmed that Citation No. 7794620 should be designated as significant
and substantial. 35 FMSHRC at 1983. The judge also
determined that the unwarrantable failure standard was not met, and this
determination was not included in the petitioned for review. Id.
at n2. Therefore, because the Secretary did not meet his burden to
prove the existence of an unwarrantable failure, the Section 104(d)(1) order must be amended�
to a citation under Section 104(a). See VA Crews Coal Co., 15
FMSHRC 2103, 2105-2106 (October 1993). Thus, there is no statutory $2,000
minimum in this case.

The
assessment of the penalty then turns to Section 110(i)
of the Mine Act. Under Section
110(i) the Commission is to consider the following
when assessing a civil penalty: (1) the operator�s history of previous
violations; (2) the appropriateness of such penalty to the size of the business
of the operator charged; (3) whether the operator was negligent; (4) the effect
on the operator's ability to continue in business; (5) the gravity of the
violation; and (6) the demonstrated good faith in abatement of the violative condition.�
30 U.S.C � 820(i).
The Commission has held that �findings of fact on the statutory penalty
criteria must be made� by its judges.� Sellersburg
Stone Co., 5 FMSHRC 287, 292 (Mar. 1983), aff'd,
736 F.2d 1147 (7th Cir. 1984).� Once
findings on the statutory criteria have been made, a judge�s penalty assessment
for a particular violation is an exercise of discretion, which is bounded by
proper consideration for the statutory criteria.� Id. at 294; Cantera
Green, 22 FMSHRC 616, 620 (May 2000).�

�����������

In exercising this discretion, the
Commission has continuously found that a judge is not bound by the penalty
recommended by the Secretary.� Spartan
Mining Co., 30 FMSHRC 699, 723 (Aug. 2008).�
In addition, the de novo assessment of civil penalties does not require
�that equal weight must be assigned to each of the penalty assessment
criteria.�� Thunder Basin Coal Co.,
19 FMSHRC 1495, 1503 (Sept. 1997).� However,
when a penalty determination �substantially diverge[s] from those originally
proposed, it behooves the . . . judge to provide a sufficient explanation of
the bases underlying the penalties assessed.��
Spartan Mining, 30 FMSHRC at 699.�
Otherwise, without an explanation for such a divergence, the
�credibility of the administrative scheme providing for the increase or
lowering of penalties after contest may be jeopardized by an appearance of
arbitrariness.�� Sellersburg Stone
Co., 5 FMSHRC 287, 293 (March 1983).�
As Senior Judge Zielinski recently expounded in American Coal Co.,
35 FMSHRC ___, slip op at 54-55, No. LAKE 2008-666 (May 19, 2014), the purpose
of explaining significant deviations from proposed penalties is to avoid the
appearance of arbitrariness.� See
Sellersburg, 5 FMSHRC at 293.�

The Secretary�s regulations for the
determination of a penalty amount by a regular assessment take into
consideration all of the statutory factors that the Commission is obligated to
consider under section 110(i) of the Act.1� 30 C.F.R. � 100.3.
The product of that regular assessment formula provides a useful reference
point, which promotes consistency in the imposition of penalties by Commission
judges.� See Magruder Limestone Co., 35 FMSHRC 1385, 1411 (May 2013)
(ALJ).

The stipulations agreed to by the
parties and filed at the hearing were numerous and many speak to the 110(i) factors that are used to assess a penalty. It was
stipulated that Respondent had six violations of a mandatory health and safety
standard in the 15 months preceding the citation at issue, and that Respondent
had one repeat violation of the mandatory safety standard cited in the citation
at issue in the 15 months preceding the issuance of the citation. At the trial,
Robert Knight, the site inspector who issued the citation at issue stated that
S&S Dredging had received citations in the last two years, which showed
other issues with mobile equipment that were not taken care of in a timely
manner. (Tr. 42:14-19).

As to the size of the business, there
was uncontradicted testimony that only two persons
worked at the mine. 33 FMSHRC at 1327.

The judge determined that the operator
was negligent to a high degree. Id. The parties stipulated that: 1) the
L160 Michigan loader (�Loader�) at issue had been used extensively with a
broken bottom step and a bent and partially caved in second step, sometimes on
a daily basis; 2) the Loader at issue had been used in the violative
condition for approximately two years prior to the citation at issue; 3) the
Loader operators mounted and dismounted the Loader several times during a work
day; 4) the second step on the Loader from the ground, which was the first
usable step due to the condition of the broken bottom step, was three feet from
the ground; 5) the second step on the Loader from the ground was bent, and
partially caved in; 6) the operator�s owner, Patty Schildt,
was aware of the damaged condition of the Loader steps for approximately two
years prior to the issuance of the citation; 7) the violative
condition was obvious; and 8) Ms. Schildt and another
employee of Respondent regularly operated the Loader and climbed the steps of
the Loader while in the violative condition.
Additionally, Robert Knight testified that the negligence is high because
management was aware of the condition and allowed it to exist for two years.
(Tr. 39:18-22).

The parties stipulated that the
Respondent was out of business at the time of the hearing.

As to the gravity of the violation, the
Commission found that there was an S&S violation due to the factors
stipulated above and the trial testimony. Robert Knight testified that a
potential injury from the broken Loader step could cause a lost workday or lost
time injury (Tr. 29:13-14); there are no other means to access the cab besides the
broken steps (Tr. 35-36: 24-2); and the likelihood of injury was reasonably
likely to occur since the Loader was used in that condition for the last two
years (Tr. 39:15-18). Additionally, Ms. Schildt
testified that she possibly suspected that the condition of the Loader steps
violated MSHA standards (Tr. 61:5-8); she did not do anything to find out
whether the condition of the loader steps was a violation of MSHA standards
(Tr. 61:9-12); and she did not correct the condition of the loader step (Tr.
61:13-15).

Finally, the parties stipulated that
Respondent made no effort to abate the condition cited prior to May 3, 2007.

Considering all of these factors, I find
that a penalty of $350.00 is appropriate.

WHEREFORE, it is ORDERED
that Citation No. 7794620 be changed from a 104(d)(1)
citation to a 104(a) citation, and it is ORDERED that S&S Dredging
pay a penalty of $350.00 within thirty (30) days of the filing of this
decision.

������������������ �����������������������������������������������������/s
L. Zane Gill

�����������������������������������������������������������������������
L. Zane Gill

�����������������������������������������������������������������������
Administrative Law Judge

Distribution
(Via Certified Mail Return Receipt Requested):

�����������������������

Terry
Schildt, S & S Dredging, 405 Pope Trail, Covington, GA 30014

Robin
Rosenbluth, Esq., Office of the Solicitor, U.S.
Department of Labor, 1100 Wilson Blvd., Room 2220, Arlington, VA 22209-2296

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

��� �1������������� ���Under
the regulations, penalty points are assigned based on the size of the operator
and the operator�s controlling entity; the operator�s history of previous
violations; the operator�s history of repeat violations of the same standard;
the degree of the operator�s negligence; and, the gravity of the violation,
including the likelihood of an occurrence of an event against which a standard
is directed, the severity of injury or illness if the event were to occur, and
the number of persons potentially affected if the event were to occur.� A penalty amount is determined by applying
the total of the points assigned to a �Penalty Conversion Table,� which
specifies penalties ranging from $112 for 60 or fewer points, up to the
statutory/regulatory maximum of $70,000 for 144 or more points.� That figure may then be adjusted by reducing
it by 10% if the operator demonstrated good faith in abating the violation.� 30 C.F.R. � 100.3(f).� A further reduction may occur if the operator
can demonstrate to MSHA�s District Manager that the penalty will adversely
affect its ability to continue in business.�
30 C.F.R. � 100.3(h).