Secretary of Labor v. West Alabama Sand & Gravel, Inc.

Plain-English summary

A customer truck driver climbed onto a loaded trailer without fall protection and worked near its edge about ten feet above the ground at West Alabama Sand & Gravel's mine. An earlier decision affirmed the S&S violation but removed unwarrantable failure, reduced negligence to moderate, and cut the proposed $15,971 penalty to $760; the Commission vacated those rulings and remanded. West Alabama then stipulated that the violation involved high negligence and unwarrantable failure. In reassessing the penalty, the Judge found that the company's small size and limited serious violation history did not outweigh management knowledge, questionable abatement, and a six-year pattern in which 57 of 59 assessed citations and orders, totaling $27,690, remained unpaid. He treated persistent delinquency as a significant aggravating factor because civil penalties must deter future violations and increased the assessment to $22,450.

Decision snapshot

• Cited standard: 30 C.F.R. § 56.15005
• Outcome: The S&S fall-protection violation was designated high negligence and unwarrantable failure, with a $22,450 penalty assessed above the Secretary's $15,971 proposal.
• Key point: Long-standing nonpayment of Mine Act penalties may aggravate a new penalty assessment when necessary to serve the statute's deterrent purpose.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW
COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

1331 Pennsylvania
Avenue, NW, Suite 520N

Washington, DC 20004

June 28, 2016

SECRETARY OF LABOR

MINE SAFETY AND HEALTH   

ADMINISTRATION (MSHA),

Petitioner,

v.

WEST ALABAMA SAND & GRAVEL,        INC.,

Respondent.

CIVIL PENALTY PROCEEDING

Docket No. SE 2009-870-M

A.C. No. 01-02738-194100

Mine: West Alabama Sand & Gravel

DECISION ON
REMAND

Before:                        Judge
Feldman

I.                  
Procedural
History

This single citation civil penalty
proceeding, arising under the Federal Mine Safety and Health Act of 1977, 30
U.S.C. § 801 et seq. (2012) (“Mine Act”), involves Citation No. 6511548 issued
to West Alabama Sand and Gravel, Inc., (“West Alabama”) by the Department of
Labor’s Mine Safety and Health Administration (“MSHA”). Citation No. 6511548
alleges that a truck driver climbed on top of his truck without fall protection
on West Alabama’s mine property, in violation of 30 C.F.R. § 56.15005, which provides
that “[s]afety belts and lines shall be worn when persons work where there
is danger of falling. . . .” (emphasis added). Specifically, Citation No.
6511548 alleges:

A customer truck driver [Johnny Koger,
who was employed by Denbar Transportation,] was observed climbing on top of the
loaded trailer. [Koger] was not wearing a safety belt and lanyard or any other
type of restraining device to prevent a fall to the ground below. [Koger] was
on his knees pulling on tarp within inches of the side of the trailer. [Koger]
was exposed to a fall of ten feet to ground level. Clay Junkin (Vice President)
engaged in aggravated conduct constituting more than ordinary negligence by his
statement of knowing this was a hazard, and allowing this failure to comply
with a mandatory standard.

As there was no dispute of material
facts, the initial disposition affirmed, through summary decision, the
violation and its significant and substantial (S&S) designation, but ruled
that it did not result from an unwarrantable failure[1]
to comply with the standard in question. Consequently, the initial decision
reduced the penalty from the proposed assessment of $15,971.00 to $760.00. 34
FMSHRC 1651 (July 2012) (ALJ). The Secretary appealed the deletion of the
unwarrantable failure designation, which was based on a reduction in the degree
of negligence attributable to West Alabama’s conduct, from “high” to
“moderate,” and the resultant reduction in proposed civil penalty.

The Commission now has vacated the
initial decision with respect to the deletion of the unwarrantable failure, the
reduction in negligence, and the reduction of the proposed penalty, directing
my further consideration of these issues consistent with its remand decision.      
 37 FMSHRC 1884, 1891 (Sept. 2015).

Following a series of conference calls,
on December 15, 2015, West Alabama stipulated that the subject section 56.15005
violation was attributable to an unwarrantable failure. Specifically:

1.      West Alabama
stipulates to such facts as are necessary and sufficient to permit the Court to
make a designation of unwarrantable failure under 30 U.S.C.    § 814(d)(1).  

2.      West Alabama
stipulates to such facts as are necessary and sufficient to permit the Court to
make a designation of “high” negligence level.

West Alabama’s Stipulation of Material
Facts,
at 1 (Dec. 15, 2015).

Given West Alabama’s stipulation to the
Secretary’s unwarrantable failure designation, the issue remains the appropriate
penalty to be imposed for Citation No. 6511548. The statutory penalty range for
a violation attributable to an unwarrantable failure under section 104(d)(1) of
the Mine Act is between $2,000.00 and $70,000.00. 30 U.S.C. § 820(a)(1), (a)(3)(A).

In considering the appropriate civil
penalty, the parties were ordered to address the applicability of the section
110(i) statutory criteria, outlined below. 38 FMSHRC 383     (Feb. 2016) (ALJ).
In addition to addressing the section 110(i) penalty criteria, the Secretary
noted:

. . . that Respondent continues to
consistently violate safety standards and essentially stopped paying assessed
penalties in approximately January 2010, according to the Mine Data Retrieval
System [“MDRS”]. Respondent’s history, present refusal to pay assessed
penalties, along with the admitted gravity and high negligence of this
violation, support the Secretary’s assessed penalty.

Sec’y
Resp.,
at 12 (Mar. 9, 2016). Consequently, on May 9, 2016, the parties were further
ordered to address whether delinquency in paying civil penalties is a relevant
consideration in determining the appropriate penalty to be assessed. 38 FMSHRC
__, slip op. (May 9, 2016) (ALJ). A discussion of the applicability of the
section 110(i) criteria and delinquency follows.

II.               
Application
of Section 110(i) Criteria

The Secretary proposes a $15,971.00
civil penalty. The Commission outlined the parameters of its responsibility for
assessing civil penalties in Douglas R. Rushford Trucking,  22
FMSHRC 598 (May 2000). The Commission stated:

The principles governing the
Commission’s authority to assess civil penalties de novo for violations
of the Mine Act are well established. Section 110(i) of the Mine Act delegates
to the Commission “authority to assess all civil penalties provided in [the]
Act.” 30 U.S.C. § 820(i). The Act delegates the duty of proposing penalties to
the Secretary. 30 U.S.C. §§ 815(a) and 820(a). Thus, when an
operator notifies the Secretary that it intends to challenge a penalty, the
Secretary petitions the Commission to assess the penalty. 29 C.F.R. §§
2700.28 and 2700.44. The Act requires that, “[i]n assessing civil
monetary penalties, the Commission [ALJ] shall consider” six statutory penalty
criteria:

[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
of the operator’s ability to continue in business, [5] the gravity of the
violations, and [6] the demonstrated good faith of the person charged in
attempting to achieve rapid compliance after notification of a violation.

22 FMSHRC at 600 (citing 30 U.S.C. § 820(i)). The
Commission has noted that the de novo consideration of the appropriate
civil penalty to be assessed 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).

In keeping with this statutory
requirement, 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). 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
and the deterrent purposes of the Mine Act. Id. at 294; Cantera
Green, 22 FMSHRC 616, 620 (May 2000). In exercising my discretion, each
penalty criterion shall be evaluated with regard to whether it is a mitigating,
neutral, or aggravating factor.

1.      History of Violations

The Commission has addressed the
appropriate considerations for evaluating the effect of the history of
violations criterion in section 110(i) of the Mine Act:

The Commission has recognized that “the
language of section 110(i) does not limit the scope of history of previous
violations to similar cases.” Secretary of Labor on behalf of Johnson v. Jim
Walter Resources, Inc., 18 FMSHRC 552, 557 (Apr. 1996). The Commission has
explained that “section 110(i) requires the judge to consider the operator’s
general history of previous violations as a separate component when assessing a
civil penalty. Past violations of all safety and health standards are
considered for this component.” Peabody Coal Co., 14 FMSHRC 1258, 1264
(Aug. 1992) (emphasis added); see also Glover, 19 FMSHRC at 1539
(remanding to the judge with instructions to consider the operator’s general
history of violations, not only its prior section 105(c) violations).

Cantera Green, 22 FMSHRC at
623.

The Secretary asserts, and the MDRS
reflects, that 17 citations were issued to West Alabama in the two-year period
preceding the July 1, 2009, issuance of Citation No. 6511548. Of these 17
citations, 14 were designated as non-S&S in nature, and none of the subject
17 violations were attributable to an unwarrantable failure. While the general
violation history should be considered, it is noteworthy that, of these 17
citations, none cited section 56.15005—the mandatory standard at issue in this
matter. As only three of the 17 relevant cited violations evidence gravity of a
reasonably serious nature, West Alabama’s history of violations is a
mitigating factor.

2.      Appropriateness
of Penalty to Size of Business

The evidence of record reflects that
West Alabama has approximately eight employees. The Secretary does not dispute
that West Alabama has a small workforce. However, the Secretary disputes that a
small workforce precludes imposition of a relatively high penalty, arguing that
such limitation “goes directly against the deterrent purposes of the Act.” Sec’y
Resp., at 12. I conclude that the size of West Alabama’s business
operations, with respect to the Secretary’s $15,971.00 proposed penalty, is a
neutral factor.

3.      Negligence

The Secretary’s unwarrantable failure designation
fundamentally is based on a   “gotcha” question from the MSHA inspector. Clay
Junkin, Vice President of West Alabama, was asked by the inspector if he knew
that truck drivers had to tie down when climbing on their trucks to secure
loads. This confronted Junkin with the unenviable choice of admitting liability
or admitting ignorance. Citation No. 6511548 informs that Junkin responded that
he knew that haul truck drivers were required to tie down when covering their
loads with tarp.

Attempting to rehabilitate himself in
this proceeding, Junkin now maintains that he was not aware that he was
responsible for the contractor’s violative conduct. The Commission’s remand
noted that I erred in the initial decision when I opined that Junkin’s purported
lack of awareness of his responsibility for contractor conduct was based on a “reasonable
and apparent good faith belief” that was a mitigating factor that reduced West
Alabama’s degree of negligence. 37 FMSHRC at 1886.

Of course, it is a “knew or should have
known” standard that imposes the responsibly on mine operators to fulfill their
obligations under the Mine Act. Thus, it is true that a mine operator’s
professed ignorance of its responsibility for the unsafe conduct of its contractors
is irrelevant. As the Secretary has acknowledged, absent aggravating
circumstances, a mine operator’s accountability for the violative conduct of
its contractor commonly is based on strict liability. Sec’y Resp., at

17. That is why such “gotcha” questions are inappropriate.

Although the initial decision
unsuccessfully attempted to pay lip service to West Alabama’s claim that it did
know that it was responsible for its contractor’s conduct, the intended
emphasis in the initial decision with respect to notice, which admittedly was
not made clear, was that West Alabama had not been previously cited for a
violation of section 56.15005. I view this as somewhat mitigating in nature.

More significantly, it is noteworthy
that the cited violation is predicated on the spontaneous action of a contract
haul truck driver. The Secretary does not contend that Junkin was aware of the
violation in that Junkin was not present, did not observe, and did not
otherwise supervise or encourage, Johnny Koger, the subject truck driver, as he
covered his load with a tarp. In this regard, it is significant that the
negligence of an hourly employee ordinarily is not imputed to a mine operator
unless there is evidence of inadequate supervision and control. Reading
Anthracite Co., 32 FMSHRC 399, 411 (April 2010); Southern Ohio Coal Co.,       
4 FMSHRC 1458, 1464 (Aug. 1982). While the Secretary has the discretion to cite
a mine operator, its contractor, or both, it is unfortunate that MSHA did not
cite Denbar Transportation, Koger’s employer, which is better suited to encourage
the tie down compliance of its drivers. See Sec’y Resp., at 17-18.

West Alabama has stipulated to “high”
negligence. While the negligence remains high, in sum, for the purposes of
assessing a civil penalty, I conclude that West Alabama’s derivative liability
for the acts of its contractor, in the absence of a history of similar
violations, is a mitigating factor with respect to its degree of negligence.

4.      Ability to
Continue in Business

It has neither been contended nor shown
that the Secretary’s proposed penalty will affect West Alabama’s ability to
continue in business. As such, I conclude that this criterion is a neutral
factor.

5.      Gravity

The gravity penalty criterion requires
an evaluation of the seriousness of the violation. Consolidation Coal Co.,
18 FMSHRC 1541, 1549 (Sept. 1996); Sellersburg Stone Co.,        5 FMSHRC
287, 294-95 (Mar. 1983), aff’d, 736 F.2d 1147 (7th Cir. 1984). In
evaluating the seriousness of a violation, the Commission has focused on “the
effect of the hazard if it occurs.” Consolidation Coal Co., 18 FMSHRC at
1550. Citation No. 6511548 was designated as S&S and affecting one person. As
noted in the initial decision:

West Alabama does not deny that it is
reasonably likely that the continued practice of working on an uneven surface
elevated ten feet above the ground will result in an accident involving a fall
that is reasonably likely to result in serious injury. Consequently, the cited
violation is properly designated as S&S.

34
FMSHRC at 1654. Accordingly, the violation is serious in gravity. I view
this criterion as neutral with regard to the appropriate penalty to be assessed.[2]

6.      Good Faith
Abatement

West Alabama’s abatement is troubling. Instead
of installing signage requiring all contract haul drivers to tie down when
installing tarp, West Alabama posted a sign prohibiting truck drivers from
installing tarp on mine property by advising drivers “not to climb on
vehicles.” West Alabama Resp., at 6. (Mar. 24, 2016).  In other words,
if a haul truck operator was inclined to expose himself to the danger of
falling, he must do so off mine property. Although approved by MSHA, this is
questionable good faith abatement, at best. Consequently, I view West
Alabama’s abatement efforts as an aggravating factor.

On balance, applying the traditional
section 110(i) analysis would provide for a meaningful reduction of the
$15,971.00 penalty proposed by the Secretary.

III.            
Delinquency

As previously noted, the Secretary has
alluded to West Alabama’s civil penalty payment delinquency as a relevant
consideration in determining the appropriate penalty to be assessed for
Citation No. 6511548. See Sec’y Resp., at 12. Specifically, the MDRS reflects
that of the $27,890.00 in civil penalties assessed for the 59 citations and
orders issued to West Alabama during the period June 2010 to November 2015,
West Alabama has paid $200.00 in satisfaction of two citations. The MDRS
further reflects that West Alabama is delinquent in its payment of the
$27,690.00 total civil penalty for the remaining 57 citations and orders. Thus,
with the exception of two citations, West Alabama has been delinquent in its
payment of assessed civil penalties for approximately six years.

With respect to delinquency as it
relates to the imposition of civil penalties,           in the past, the
Commission has narrowly construed the civil penalty criteria in section 110(i).
 In Sec’y o/b/o Johnson v. Jim Walter Res., Inc., 18 FMSHRC 841 (June
1996), the Commission stated: “An operator’s delinquency in payment of
penalties is not one of the criteria set forth in section 110(i) of the Mine
Act for consideration in the assessment of penalties.” Id. at 850.

However, in Black Beauty Coal Co.,
34 FMSHRC 1856 (Aug. 2012), the Commission departed from its narrow
interpretation of section 110(i) by emphasizing the role of deterrence as a
proper consideration in assessing civil penalties. In this regard, the
Commission noted:

Clearly Congress viewed civil penalties
as a mechanism to promote operator compliance with health and safety mandates,
and it explicitly called for consideration of the protection of the “public
interest” - which includes such compliance - before a [penalty is assessed].
Consequently, it is eminently appropriate for a Judge to acknowledge the need
for deterrence in [considering the appropriate civil penalty], with the
understanding that the [ultimate civil penalty], consistent with fundamental
principles underlying the penalty provisions of the Mine Act, discourage
operators from violating health and safety regulations and laws in the future.

Id.
at
1866. In sum, the Commission stated:

Simply put, we refuse to require our
Judges to apply blinders . . . and to ignore the central and most obvious
purpose of civil penalties - to ensure operator compliance with safety measures

• when deciding whether such penalties are appropriate. Deterrence is a
  principle basic to and underlying the entire statutory scheme of imposing civil
  penalties.

Id.
at
1869.

On
May 9, 2016, the parties were ordered to address whether delinquency is a
relevant consideration in determining the appropriate penalty to be assessed. 38
FMSHRC __, slip op. (May 9, 2016) (ALJ). West Alabama responded on May 31, 2016,
asserting that “while the Court may consider the matter of Respondent’s
delinquent payment history,” Black Beauty does not compel the Court to
do so. West Alabama Resp. to Order to Show Cause, at 1 (May 31, 2016). West
Alabama further argues that its delinquent payment history does not adversely
affect deterrence because “there is no history of relevant violations with
respect to drivers climbing on their trucks and failing to tie down, and
accordingly no history of delinquent payment for such violations.” Id. at
2.

The
Secretary responded on June 14, 2016, asserting that West Alabama’s numerous
unpaid civil penalties “have done nothing to deter safety infractions at
Respondent’s mine or to compel Respondent to honor its obligations under the
Mine Act.” Sec’y Resp. to Order to Show Cause, at 2 (June 14, 2016). Consequently
the Secretary avers that West Alabama’s “six-year delinquent payment history
should be given great weight in assessing the penalty in this matter.” Id.

The ultimate goal of the Mine Act is to
promote a general culture of safety by deterring violations of the Mine Act and
the Secretary’s mandatory safety regulations. In this regard, the Commission in
Black Beauty stated:

The legislative history of the Mine Act
makes exceedingly clear that Congress intended civil penalties assessed
pursuant to the Mine Act to induce compliance with health and safety laws and
regulations. Put another way, Congress undoubtedly recognized that such
penalties should be used to deter operators from violating such mandates.

The Senate Report, for example,
acknowledged that civil penalties are “an enforcement tool,” and recognized
that the “settlement of penalties often serves a valid enforcement purpose.”
Legis. Hist. at 632-33. It emphasized that:

[T]he purpose of a civil penalty is to
induce those officials responsible for the operation of a mine to comply with
the Act and its standards….

…To be effective and to induce
compliance, civil penalties, once proposed, must be assessed and collected with
reasonable promptness and efficiency.

… [T]he Committee strongly feels that
since the penalty system is not for the purpose of raising revenues for the
Government, [but] is indeed for the purpose of encouraging operator compliance
with the Act’s requirements….

Black
Beauty,
34 FMSHRC at 1865-66 (quoting S. Rep. No. 95-181, at 44 (1977), reprinted in Senate Subcomm. on Labor, Comm. on Human
Res., Legislative History of
the Federal Mine Safety and Health Act of 1977, at 629-33 (1978)). Although
Black Beauty concerns the propriety of considering deterrence in the
context of approving settlements of civil penalties, it is clear that
deterrence is also an appropriate consideration in determining civil penalties
in contested cases. See id.

West Alabama acknowledges the deterrent
effect that the payment of civil penalties has in promoting compliance with the
Mine Act and the Secretary’s regulations. See West Alabama Resp. to Order to
Show Cause, at 2. Yet West Alabama did not provide any explanation for its
six-year history of delinquency. There was no claim of oversight or regret. Rather,
in an unabashed reliance on a distinction without a difference, West Alabama
asserts that, despite its extensive history of delinquency, deterrence has not been
compromised simply because it has not previously been cited for, and thus has
not previously failed to pay a civil penalty for, a violation of the safety
belt requirement in section 56.15005. Id.

Succinctly put, the Mine Act’s
legislative history makes clear that the purpose of a civil penalty is to
induce compliance. Id. at 1867. Suffice it to say that West Alabama’s six-year
non-payment history cannot be ignored, as it frustrates this purpose and may expose
miners to hazardous working conditions. I decline to elevate form—by the
purposeless assessment of civil penalties—over substance—by encouraging that
civil penalties be paid.

In the final analysis, West Alabama’s
delinquency must be considered as a significant aggravating circumstance
that warrants a meaningful increase in the civil penalty assessed for Citation
No. 6511548. I am cognizant that increasing the civil penalty in view of West
Alabama’s pattern of delinquency raises an obvious question: How will raising
the civil penalty foster compliance in view of West Alabama’s apparent
disinclination to pay? Encouraging compliance is a two-step process. As noted,
compliance is achieved through the payment of civil penalties. Thus, step one
involves motivating delinquent mine operators to pay civil penalties by
increasing future assessed penalties that, if not paid, become a debt owed to
the federal government, collectable through an action brought by the Department
of Justice. In step two, by encouraging the payment of civil penalties, the
Mine Act’s goal of deterrence and future compliance hopefully will be achieved.

As previously noted, de novo
consideration of the appropriate civil penalty to be assessed 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). Consequently,
consistent with the Commission’s holding in Black Beauty that the deterrent
goal of assessing civil penalties under the Mine Act is a proper consideration,
West Alabama’s long-standing pattern of delinquency warrants increasing the
proposed penalty sought by the Secretary. Accordingly, a civil penalty of $22,450.00
shall be assessed against West Alabama.

ORDER

In view of the above, IT IS ORDERED that
West Alabama Sand & Gravel, Inc. pay, within 40 days of the date of this
Decision, a total civil penalty of $22,450.00 in satisfaction of the
single violation at issue. Upon timely receipt of this amount, Docket No. SE
2009-870    IS DISMISSED.

/s/ Jerold
Feldman

Jerold Feldman

Administrative
Law Judge

Distribution:
(Regular and Certified Mail)

Sophia
E. Haynes, Esq., U.S. Department of Labor, Office of the Solicitor, 61 Forsyth
Street SW, Room 7T10, Atlanta, GA 30303

Clatus
Junkin, Esq., P.O. Box 688, 202 3rd Street NE, Fayette, AL 35555

Charles
E. Harrison, Esq., Pearson Harrison & Pate, LLC, P.O. Box 3119, Tuscaloosa,
AL 35403

/acp

[1] The Commission has determined that the essence of
unwarrantable failure is aggravated conduct constituting more than ordinary
negligence. Emery Mining Corp., 9 FMSHRC 1997 (Dec. 1987).

[2] The mandatory standard in section 56.15005 requires “[s]afety
belts and lines shall be worn when persons work where there is danger of
falling. . . .” (emphasis added). Section 56.15005 must, of necessity, be
broad because the myriad circumstances requiring safety lines cannot be
foreseen. However, the securing of loads on haul trucks is an everyday
occurrence. I am concerned that the Secretary appears to take the position that
the failure to tie down when installing tarp on a haulage truck is a per se
violation of section 56.15005. In view of the Secretary’s per se approach,
it is difficult to assess the degree of hazard posed by the facts surrounding
the violation at issue in Citation No. 6511548, wherein the truck operator was
observed installing the tarp “on his knees.” To avoid arbitrary enforcement,
the Secretary should consider initiating a rulemaking to promulgate a mandatory
standard to require truck operators to tie down when securing their load.
By way of example, the mandatory standard at 30 C.F.R. § 56.12016 requires that
all electrically powered equipment must be de-energized before
mechanical work is performed on such equipment. It is noteworthy that section
56.12016 does not require de-energizing electrical equipment only when
there is a danger of electric shock or other injury.