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

Plain-English summary

A truck driver climbed onto his truck without fall protection at West Alabama Sand & Gravel's mine. The ALJ affirmed the violation and S&S designation but treated the operator's opposition as a cross-motion for summary decision, removed unwarrantable failure, reduced negligence from high to moderate, and cut the proposed $15,971 penalty to $760. The Commission held that disputed facts required a hearing on whether the operator genuinely and reasonably believed it was not responsible for the contractor's conduct. It emphasized that owner-operator liability for contractor violations had been settled for decades and that all relevant unwarrantable-failure factors must be considered. The Commission vacated the negligence and unwarrantable-failure findings and remanded, also cautioning against appearing to predetermine a penalty during unrecorded discussions.

Decision snapshot

• Cited standard: 30 C.F.R. § 56.15005
• Outcome: The summary rulings on negligence and unwarrantable failure were vacated, and the case was remanded for an evidentiary hearing and penalty reconsideration.
• Key point: Summary decision cannot resolve contested good-faith and negligence facts, and a mine owner cannot reasonably claim general ignorance of responsibility for contractor violations on its property.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004‑1710

SECRETARY OF LABOR

MINE SAFETY AND HEALTH    

ADMINISTRATION (MSHA)

v.

WEST ALABAMA SAND &
GRAVEL,

INC.

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Docket No. SE 2009-870-M

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

DECISION

BY THE COMMISSION:                

This civil
penalty proceeding arises under the Federal Mine Safety and Health Act of 1977,
30 U.S.C. § 801 et seq. (2012) (“Mine Act”), and involves a single citation
issued to West Alabama Sand and Gravel, Inc., (“West Alabama”) by the
Department of Labor’s Mine Safety and Health Administration (“MSHA”). The
citation alleges that a truck driver climbed on top of his truck without fall
protection on West Alabama’s mine property. The Administrative Law Judge affirmed
the violation and its S&S designation, but ruled that it did not result
from an unwarrantable failure to comply with the standard in question.[1]
The Judge also reduced the penalty from the proposed assessment of $15,971 to
$760. 34 FMSHRC 1651 (July 2012) (ALJ).

The Secretary of
Labor filed a petition for discretionary review (“PDR”), which we granted. The
Secretary asserts, inter alia, that the Judge abused his discretion by
converting the operator’s opposition to the Secretary’s motion for summary
decision into a cross-motion for summary decision, in deleting the
unwarrantable failure designation and reducing the negligence level from “high”
to “moderate” on the basis of summary decision, and in reducing the penalty by
over 95%.

For
the reasons set forth below, we vacate the Judge’s decision that the violation
was not an unwarrantable failure, and his negligence findings, and remand this
matter for further proceedings consistent with this decision.

I.

Factual and Procedural Background

This case
involves a citation issued to West Alabama at its mine facility in Fayette,
Alabama, pursuant to section 104(d)(1) of the Mine Act. 30 U.S.C. § 814(d)(1). On
July 1, 2009, an MSHA inspector issued Citation No. 6511548, alleging a
violation of 30 C.F.R. § 56.15005.[2]
The citation alleges that a driver climbed atop his vehicle without employing
fall protection. Sec’y Pet. for Assessment of Civil Penalty. The citation was
designated as significant and substantial (“S&S”)[3]
and attributed to West Alabama’s high negligence and unwarrantable failure to
comply with the standard. The Secretary proposed that a penalty of $15,971 be
assessed.

Following
discovery, the Secretary filed a motion for summary decision. In his motion,
the Secretary stated there were no material facts in dispute and that the
Secretary was entitled to judgment on the entire case, including the fact of
the violation, the S&S and unwarrantable designations, and the penalty. West
Alabama opposed the motion, arguing that material issues of fact existed both as
to its negligence and whether it was given adequate notice that it could be
held liable for the conduct of independent contractors. Although West Alabama
acknowledged that a truck driver had violated the safety standard while on mine
property, it argued that it should not held be liable for the truck driver’s
violative conduct because it could not control or direct the driver. West
Alabama further maintained that the proposed penalty was excessive when
compared to similar citations and that its history of compliance and lack of
actual knowledge mitigated its negligence.

In response, the
Secretary filed a memorandum of points and authorities rebutting West Alabama’s
contention that genuine issues of material fact remained in dispute and
providing legal arguments in support of the Secretary’s position. The Secretary
further argued that he did not agree with West Alabama’s assertion that it had
a “good safety history” and provided the Judge with a list of all citations
issued to the operator while the mine was in operation.

On February 28,
2011, the Judge held an off-the-record conference call with the parties to
discuss the Secretary’s motion for summary decision.[4]
Because the call was not recorded, the Commission does not have the benefit of a
transcript. It appears undisputed, however, that the Judge attempted to obtain
a settlement. Failing that effort, he apparently suggested/stated the manner in
which he would resolve the case if the operator filed some sort of stipulation
with him.

On March 12,
2012, West Alabama filed stipulations, wherein it again admitted that a driver
had been on mine property and had climbed onto his truck without a safety belt
or harness. The Secretary filed a response to West Alabama’s stipulations in
which he argued that his motion for summary decision should be granted because
West Alabama had admitted the violation and had failed to provide any facts
that disputed the Secretary’s S&S and unwarrantable failure designations.

On July 17, 2012,
the Judge issued an order granting summary decision, in part, to the Secretary
on the validity of the citation and the S&S designation. 34 FMSHRC at 1657.
However, the Judge construed West Alabama’s opposition as a cross-motion for
summary decision on the unwarrantable failure issue, and granted summary
decision to the operator. The Judge reasoned that the lack of a history of
similar violations and West Alabama’s asserted “reasonable and apparent good
faith belief” that it was not responsible for a contractor’s violative conduct
“reduce[d] the degree of negligence under the threshold required for an
unwarrantable failure.” Id. at 1655. In addition, the Judge found that
the reduction in the level of negligence and the small size of West Alabama’s
operations justified a reduction in penalty to $760, rather than the proposed
amount of $15,971. Id. at 1656.

II.

Disposition

Summary decisions
are governed by Commission Procedural Rule 67, which provides that:

A motion for summary decision shall be granted only if
the entire record, including the pleadings, depositions, answers to
interrogatories, admissions, and affidavits, shows: (1) That there is no
genuine issue as to any material fact; and (2) That the moving party is
entitled to summary decision as a matter of law.

29 C.F.R. § 2700.67(b). The
Commission “has long recognized that [] ‘[s]ummary decision is an extraordinary
procedure,”’ and has analogized it to Rule 56 of the Federal Rules of Civil
Procedure, under which “the Supreme Court has indicated that summary judgment
is authorized only ‘upon proper showings of the lack of a genuine, triable
issue of material fact.”’ Energy W. Mining Co., 16 FMSHRC 1414, 1419
(July 1994) (quoting Missouri Gravel Co., 3 FMSHRC 2470, 2471 (Nov.
1981); Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)).

Appellate review
of summary judgment decisions issued pursuant to Federal Rule 56 is de novo,
in that the reviewing court applies the same Rule 56(c) standard as the trial
court. 10A Charles Alan Wright, et al., Federal Practice and Procedure §
2716, at 273-74 (3d ed. 1998). When the Commission reviews a summary decision
and determines that the record before the Judge contained disputed material
facts, the proper course is to vacate the grant of summary decision and remand
the matter for an evidentiary hearing. See Energy W. Mining Co., 17
FMSHRC 1313, 1316-19 (Aug. 1995); Missouri Gravel, 3 FMSHRC at 2473.

In considering a motion
for summary decision, a Judge’s role is limited to a determination of whether a
case can be decided without the need to resolve any factual disputes. See 11
James Wm. Moore et al., Moore’s Federal Practice § 56.24 (3d ed. 2015). A
Judge may not weigh the evidence nor shall he or she engage in fact-finding beyond
the facts established by the record. See, e.g., Hasan v. Foley & Lardner
LLP, 552 F.3d 520, 527 (7th Cir. 2008).

Upon review of
the record, we conclude that genuine issues of material fact preclude a
granting of summary judgment on the issues of unwarrantable failure and
negligence.  

A.        The
Unwarrantable Failure and Negligence Findings

The Judge deleted
the unwarrantable failure designation for the violation and reduced the
negligence level to moderate, implicitly discerning from West Alabama’s
opposition to the Secretary’s Motion for Summary Decision a motion for summary
decision in favor of the operator on the unwarrantable failure question. 34
FMSHRC at 1653, 1655.  

The Judge did not
commit legal error in considering West Alabama’s opposition as a motion for
summary decision. Although we find no explicit authority to convert a response
into a cross-motion for summary decision, as a general matter a Judge may grant
summary decision sua sponte or in favor of a non-moving party pursuant
to the Federal Rules of Civil Procedure and achieve the same effect. See Fed.
R. Civ. P. 56(f) (amended in 2010 to explicitly allow for the consideration of
summary decision on the motion of a Judge in accordance with long standing
practice).

However, we have
urged caution in considering such a drastic procedure as it can easily lead to
arbitrary and erroneous decisions. Missouri Gravel, 3 FMSHRC at 2471 n.2.
In the rare circumstances where it is appropriate to entertain summary judgment
sua sponte or in favor of a non-moving party, such discretion must
invariably be tempered by the need to ensure that (1) discovery is sufficiently
advanced so that parties have had a reasonable opportunity to ascertain the
material facts, and that (2) the parties are given adequate notice to bring
forward their evidence. See Celotex, 477 U.S. at 326.

The record here
is not sufficient to support summary judgment on the issues of unwarrantable
failure or negligence. In particular, the facts stipulated to or shown by
competent record evidence do not conclusively establish the reasonableness of
the operator’s alleged good faith belief. A party’s conclusory statement that
it acted in good faith cannot be treated as a binding determination of material
fact. As the Secretary correctly notes, the Judge’s disposition of this
question, at this stage, precluded the Secretary from having “an opportunity to
challenge the sincerity of Junkin’s asserted belief or any evidence in support
of it.”[5]
PDR at 20. We also agree with the Secretary that there is no competent record
evidence that would support the existence of the belief. Id.

In vacating
the unwarrantable failure finding, the Judge viewed as dispositive West
Alabama’s asserted lack of awareness that it was responsible for the behavior
of contract employees. He found that view to be a reasonable, good faith belief
on the part of the operator. The Judge pointed to the absence of relevant
previous citations as providing a “reasonable basis” for the operator’s belief.
34 FMSHRC at 1655. However, the absence from the record of MSHA citations for
an obviously dangerous practice does not mean that an operator could reasonably
believe that permitting such practices to occur on its property is not
dangerous. It is too late in the day for any owner/operator to assert that it
is unaware of its responsibility for contractors’ violations.[6]

Section
110(a)(1) of the Mine Act states that “[t]he operator of a coal or other mine
in which a violation occurs of a mandatory health or safety standard or who
violates any other provision of this Act, shall be assessed a civil penalty by
the Secretary . . . .” 30 U.S.C.

§ 820(a)(1). This
statutory provision has been interpreted definitively as imposing
responsibility on an owner/operator for a contractor’s violations since 1977. See,
e.g., Bituminous Coal Operators’ Ass’n v. Sec’y of Interior, 547 F.2d 240
(4th Cir. 1977).

Moreover, as
a result of the summary disposition, the Secretary was not afforded the
opportunity to present evidence to show that there were genuine issues of
material fact as to the operator’s alleged good faith belief or other issues
related to unwarrantable failure.

Additionally, it appears
from the Judge’s decision that he did not consider all the factors that bear
upon an alleged unwarrantable failure. The Commission has emphasized that all
relevant facts and circumstances of each case must be examined to determine if
an actor’s conduct is aggravated, or whether mitigating circumstances exist. Consolidation
Coal Co., 22 FMSHRC 340, 353 (Mar. 2000). While a Judge may determine, in
his or her discretion, that some factors are not relevant, or may determine
that some factors are much less important than other factors under the
circumstances, all of the factors must be taken into consideration. IO Coal
Co., 31 FMSHRC 1346, 1351 (Dec. 2009). Rather than a complete analysis of all
relevant factors, and indicating how his consideration of those factors
informed his decision, the Judge rested his conclusion on the single factor of
the operator’s awareness that greater efforts are necessary for compliance. After
citing this factor – alone – as one the Commission has found “significant,” the
Judge reasoned that “the dispositive issue is whether Junkin’s asserted
lack of awareness that West Alabama was responsible for contract employees
should be viewed as a mitigating circumstance with respect to the alleged
unwarrantable failure.” 34 FMSHRC at 1654-55 (emphasis added).

While mitigation
that reduces an operator’s negligence below the threshold of a “serious lack of
reasonable care” may be enough to support a Judge’s conclusion that the
violation did not result from unwarrantable failure, the Judge here did not
adequately support this conclusion or fully consider the other factors, several
of which would seem relevant and perhaps aggravating or adverse to the
operator’s defense. The operator, in its responses to the Secretary’s First
Request for Admissions, admitted to knowledge that such violative behavior had
occurred in the past, with West Alabama’s knowledge. Admission Nos. 13, 20. This
is relevant to the factors of duration and knowledge. The Secretary at least
disputed the operator’s general safety record, which might have relevance on
the degree of care it applied to its duties under the Act and mandatory
standards, generally. Finally, and most importantly, the Judge correctly held
that it would be reasonably likely that allowing miners to work “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.” 34 FMSHRC at
1654. This at least raises the question of an obvious violation of a mandatory standard
in a way that could seriously injure a miner. The Judge considered none of this
in weighing the supposedly objective, good faith belief that an operator might
permit such a practice at its mine.

As a result of
the aforementioned, the Judge’s negligence findings and his decision to delete
the Secretary’s unwarrantable failure designation are vacated. This proceeding
is remanded so that the Judge may conduct a hearing. Our review of the record
and the parties’ filings indicate that because facts remain in dispute, a
hearing is necessary on these issues.

B.        Penalty          

We also note that
the Judge may have improperly determined what he believed to be an appropriate
penalty in this case and worked back from that conclusion to reach a result
supporting it. Noting the operator’s citation to other ALJ decisions for violations
of the same standard, the Judge cited the specific penalty amounts in his
decision. 34 FMSHRC at 1653-54. Although the Judge does correctly state the law
governing penalty determinations, id. at 1656, the reduction in the
penalty by more than 95% resulted in an assessment that is close to the
assessments issued by other Judges in other cases.

Further, it
appears from a pleading by the operator that it believed that during the
February conference call, it received an assurance from the Judge that if it
filed certain stipulations, the Judge would reduce the proposed penalty by
approximately 98%.[7]
The operator’s pleading supports the inference that the Judge had reached a
conclusion on the penalty before performing the analysis. Commission Judges
must be very careful to avoid circumstances in which a party could reasonably
believe that it had reached a unilateral agreement on the disposition of a case
with the Judge without the consent or participation of the other party.

III.

Conclusion

Based upon the
foregoing discussion, we vacate the Judge’s order granting summary decision in
favor of West Alabama on the issue of an unwarrantable failure as well as the
Judge’s findings regarding negligence, and remand this case for further
proceedings consistent with this decision.

/s/
Mary Lu Jordan

Mary
Lu Jordan, Chairman

/s/
Michael G. Young

Michael
G. Young, Commissioner

/s/
Robert F. Cohen, Jr.

Robert
F. Cohen Jr., Commissioner

/s/
Patrick K. Nakamura

Patrick
K. Nakamura, Commissioner

/s/
William I. Althen

William
I. Althen, Commissioner

[1] The unwarrantable failure terminology is taken from
section 104(d)(1) of the Act, 30 U.S.C. § 814(d)(1), which establishes more
severe sanctions for any violation that is caused by “an unwarrantable failure
of [an] operator to comply with . . . mandatory health or safety standards.” The operator did not contest the Judge’s finding of a
significant and substantial violation. Therefore, that finding is not before us
in this case.

[2] Section 56.15005 states that “[s]afety belts and
lines shall be worn when persons work where there is danger of falling; a
second person shall tend the lifeline when bins, tanks, or other dangerous
areas are entered.”

[3] The S&S terminology is taken from section
104(d)(1) of the Act, 30 U.S.C. § 814(d)(1), which distinguishes as more
serious any violation that “could significantly and substantially contribute to
the cause and effect of a . . . mine safety or health hazard.”

[4] Since November 2010, the Commission’s teleconferencing
service has offered Judges the option of recording and then ordering written transcripts
of telephone conferences. Commission
Judges should make use of the transcript capacity in any situation where the
contents of a telephone conference with the parties may become the subject of
review in a subsequent appeal. This includes telephone conferences where
summary decision is discussed, and also matters such as discovery disputes. However,
this does not include telephone conferences where the subject matter remains
limited to settlement discussions.

[5] Clay Junkin, West Alabama’s Vice President, was
present at the mine at the time that the truck driver was observed by the MSHA
inspector. 34 FMSHRC at 1652.

[6] In footnote 1
of his decision, the Judge stated, “[w]hether Denbar Trucking [the employer of
the driver who climbed on top of his truck without fall protection] was an
independent contractor, or a customer of West Alabama, is not material to the
disposition of this matter. For the purposes of this decision, Denbar will be
considered an independent contractor.” 34 FMSHRC at 1651-52 n.1. We follow the
Judge in not distinguishing the status of the truck driver, and, like the
Judge, refer to him as a “contract employee.” Id. at 1655.

[7]
Prior to the Judge’s issuance of the summary decision,
the operator filed a responsive pleading asserting that, “[a]t the time West
Alabama agreed to enter the Stipulation of Facts, it was West Alabama’s
understanding [that] the fine in this case was to be reduced to $350.00.” West
Alabama’s Reply to Pet’r’s Resp. to Resp’t’s Stip. of Facts (July 12, 2012). Although
it appears the Judge did not receive this pleading prior to issuing his summary
decision, as set forth above, the pleading does essentially state that the
operator believed a quid pro quo arrangement with the Judge had been reached.