Secretary of Labor v. Drummond Company, Inc.

Plain-English summary

MSHA cited Drummond after an approved air-monitoring component was not installed in a refuge alternative by the December 31, 2013 deadline. Drummond had ordered the approved component with a confirmed pre-deadline delivery date, but the distributor delivered it one day after the citation. Judge Thomas P. McCarthy vacated that citation because timely compliance was practically impossible despite Drummond's good-faith efforts, and because MSHA departed from its past acceptance of purchase orders while the inspector followed a directive instead of exercising independent judgment. The Judge separately approved settlement of another citation by changing the likelihood from reasonably likely to unlikely, deleting the significant-and-substantial designation, and reducing the penalty from $1,203 to $963. Drummond was ordered to pay the $963 settlement penalty.

Decision snapshot

• Cited standard: 30 C.F.R. § 75.1506(a)(1)
• Outcome: The refuge-component citation was vacated, and a second citation was modified and settled for $963 instead of $1,203.
• Key point: Impossibility of compliance can defeat a citation when approved equipment cannot be obtained by the deadline despite a timely purchase order and good-faith efforts.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW
COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

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

WASHINGTON, DC
20004-1710

TELEPHONE:
202-434-9900 / FAX: 202-434-9949

SECRETARY OF LABOR

MINE SAFETY AND HEALTH  

ADMINISTRATION (MSHA),

Petitioner

v.

Drummond Company, Inc.,

Respondent

CIVIL PENALTY PROCEEDING

Docket No. SE-2014-0197

A.C.  No.  01-02901-344208

Mine: Shoal Creek Mine

DECISION AND
ORDER AFFIRMING BENCH DECISION

AND APPROVING
SETTLEMENT

Appearances:               Latasha Thomas, Esq., U.S. Department
of Labor, Office of the Solicitor, Nashville, Tennessee for Petitioner

Noelle Holladay True,
Esq., Rajkovich, Williams, Kilpatrick & True, PLLC, Lexington, Kentucky for
Respondent

Before:                        Judge McCarthy        

I.                  
Statement of the Case

This case is before me upon a Petition
for Assessment of Civil Penalty under section 105(d) of the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. § 815(d).   

Docket No. SE 2014-0197 involves
two citations, Citation Nos. 8527643 and 8527576.  The parties submitted a
joint motion to approve settlement of Citation No. 8527643.   Citation No.
8527576 remains in dispute. 

On January 15, 2014, MSHA inspector
Timothy Fisher issued section 104(a) Citation No. 857576 to Drummond’s Shoal
Creek Mine.  P. Ex. 1.   The citation alleged a violation of 30 C.F.R. § 75.1506(a)(1),
which sets forth standards for underground coal mine refuge alternative
components.[1] 
Specifically, the citation states:

The operator has not installed components approved
pursuant to 30 CFR part 7 in its 24 person Mine Arc refuge alternative serial
No. MAA-110 located on the West Main (MMU-001-0) section at survey spad no. 87

• 82 (crosscut no. 103) in the crosscut between no. 3 and the no. 4 entry. 
  After December 31, 2013, all refuge alternatives used in underground coal mines
  must be equipped with Part 7 approved breathable air, harmful gas removal and
  air-monitoring components.  This refuge alternative was not equipped with these
  Part 7 approved components.  This refuge alternative is a critical part of MMU-001-0. 

P. Ex. 1.  The citation was designated as unlikely to
result in a fatal injury, with 24 persons affected, as a result of low
negligence.  P. Ex. 1.   A $946 civil penalty was proposed.  Tr. 138.

The Respondent argues that the
citation should be vacated because it had installed or ordered all components
as they were approved by MSHA.  Further, the Respondent asserts that it has a
“valid, bona fide, written purchase order” for the last component MSHA
approved, which is consistent with the preamble to the final rule (73 Fed. Reg.
80657) and with MSHA’s Published Guidance, “Q&A on Refuge Alternatives
Requirements.”  R. Br. 3.[2] 
 Respondent also argues that if a violation is found, the fatal designation was
incorrect, and that the Respondent acted with no negligence, rather than low
negligence.  R. Br. 3.

The Secretary contends that
Drummond’s approval plate was not in a conspicuous position on its refuge
chamber and that the plate did not indicate whether the required components
were installed.  Tr. 14.  The Secretary also argues that Part 7 approved
components were available and that the installation in a mine depended on the
interaction between manufacturers and operators.  Tr. 15.

The issues presented are whether
Respondent violated 30 C.F.R. § 75.1506(a)(1), whether any such violation could
have reasonably been expected to result in fa atality, and whether negligence
was properly designated as “low.”

A hearing was held in Birmingham, Alabama
on April 7, 2015.  Witnesses were sequestered.   At hearing, the parties
stipulated to the following:

1.     
 Drummond Company, Inc., is subject to the Federal Mine Safety and
Health Act of 1977.

2.     
 Drummond Company, Inc., mines and produces coal which enters into and
which has an effect upon interstate commerce within the meaning of the Federal
Mine Safety and Health Act of 1977.

3.     
Drummond Company, Inc., is subject to the jurisdiction of the Federal
Mine Safety and Health Review Commission.  Further, the administrative law
judge has the authority to hear this case and issue a decision. 

4.     
A reasonable penalty will not affect Drummond Company, Inc.’s ability to
remain in business.

5.     
 Drummond Company, Inc. is a large-sized operator.

6.     
 A true copy of Citation No. 8527576 was served on Drummond Company,
Inc. as required by the Mine Act.

7.     
 Drummond Company, Inc. did abate Citation No. 8527576 in good faith.

Jt. Ex. 1; Tr. 7.

After hearing witness testimony
and considering record evidence and opening and closing statements from both
parties, I issued a bench decision vacating Citation No. 8527576.[3]  Having
carefully reviewed the record, I affirm my bench decision, as set forth below.

II.        Bench Decision and
Affirmation

The standard that was cited by Inspector Foster on
1/15/2014 states that each operator shall provide refuge alternatives and
components as follows: 

Paragraph 1, prefabricated self-contained units including
the structural  breathable air, air-monitoring, and harmful gas removal
components of the unit shall be approved  under 30 CFR Part 7.   

I find that the Respondent, Drummond, was in compliance
with the standard because the air-monitoring component was approved by MSHA on 9/11/2013. 
When Drummond was unable to obtain   from a long-time provider of similar
components, MineARC, the equipment, by late December, Mr. Clements, according
to his credited testimony, felt that he was being given the runaround by Mr. Rau,
and he took prudent steps to contact the MSHA-approved provider, Industrial
Scientific Corp., through one of their distributors. Respondent had submitted a
purchase order,   Respondent's Exhibit 1, which is dated November 26, 2013 with
a confirmed delivery date or due date of 12/27/2013, which would have met the 12/31/2013
deadline.  The original question and answers dated July 9th, 2013 from MSHA's
Refuge Alternative     Requirements, and from April 29th, 2009 concerning the
Final Rule on Refuge Alternatives provides that a purchase order with a firm
delivery date may be accepted by the district manager.

Mr. Clements credibly testified that [he has] a past
practice of dealing with the District, through purchase orders, and when he was
-- when he has presented a purchase order, MSHA has dealt with him favorably or
leniently.  In this case, they failed to do so based on instructions from the inspector
that if they did not see the approval tag when they went underground, they were
to issue a citation. 

I find under those circumstances that this citation is an
abuse of discretion and that the Respondent was in compliance with the  
standard.

Tr. 140-41.

Based upon further reflection and
review of the transcript, I find that MSHA’s failure to approve the MineArc
air-monitoring component by the December 31, 2013 deadline or to accept the
purchase order for the MSHA-approved Industrial Scientific air monitoring
component left Drummond in a position amounting to impossibility of performance
due to factors outside its control, despite its good-faith efforts at
compliance.   Furthermore, additional facts support my conclusion that it was
arbitrary and capricious and an abuse of discretion for MSHA to issue Citation No. 8527576.   In these circumstances,
the citation is appropriately vacated. 

The following facts are instructive.  It is undisputed that by
December 31, 2013, all underground mine operators were required to install
three MSHA-approved components in their refuge chambers, a breathable air
component, a harmful gas removal component, and an air monitoring component.   Tr.
 27.  Drummond had the MSHA-approved component for breathable air and harmful
gas.   Tr. 122.  Drummond had an air monitoring component on the cited refuge
chamber, but it was not the approved version required by MSHA.  Tr. 104, 122. 

Initially,
Drummond attempted to order the air-monitoring component from MineArc, who had
manufactured the refuge chamber itself.   In early 2013 through November 2013, Clement
was in contact with a sales manager from MineArc to order the air-monitoring component. 
Tr. 90-93, 130.  Thereafter, toward late November 2013, Clements determined
that MineArc was giving him the runaround, especially since MSHA had not yet
approved MineArc’s air-monitoring component, and that Drummond was running out
of time to meet the December 31, 2013 deadline.  Tr. 113, 131.   Clements also discovered
that the MSHA-approved Industrial Scientific air-monitoring component was the
same as the MineArc version.  Tr. 114.

Accordingly,
toward late November 2013, Drummond ordered an MSHA-approved air-monitoring
component from Industrial Scientific based on its determination that the MineArc
component would not meet the deadline.   Tr. 113-14, 131; R. Ex. 1.  The
Industrial Scientific air-monitoring component had been approved by MSHA on September
11, 2013, a few months prior to MSHA’s own December 31, 2013 deadline.  R. Ex.
2.   

Despite
the proximity of the impending deadline, Industrial Scientific was the first
manufacturer to have its air-monitoring component approved by MSHA.   Tr. 110. 
 The Industrial Scientific purchase order was dispatched on December 2, 2013
and scheduled to arrive on December 27, 2013, four days before the deadline. 
Tr. 115.   United Central, the distributor for Industrial Scientific, did not
meet the purchase order deadline.  113, 115.  

In the
meantime, the instant MSHA inspection took place on January 13, 2014.  When
inspector Foster arrived to check for the required refuge alternative
components, Clements told Foster that he had ordered the MSHA-approved air
monitoring component from Industrial Scientific, but it had not yet been
delivered by distributor United Central.  Tr. 94.  Clements gave Foster a
purchase order for the component.  Tr. 102.  Foster went back to his supervisor
armed with this information, but was directed to issue the citation anyway and
told how to write it.  Foster returned to the mine and issued said citation on January
15, 2014.  Tr. 31, 79; P. Ex. 1.  The January 15, 2014 citation gave Drummond
two weeks to abate, with no explanation for the time period chosen, and no
rationale given at hearing.  Tr. 118.

The MSHA-approved Industrial Scientific air monitoring component
was received and installed by Drummond on January 16, 2014, just one day after
the citation issued.  Tr. 115.  The MineArc component that Drummond initially
sought to order was eventually approved by MSHA on January 17, 2014, two days
after the citation issued.  Tr. 112.  Thus, despite its best efforts to comply
with the cited standard by installing an MSHA-approved air-monitoring component
in the cited refuge chamber, Drummond was unable to do so as a practical matter
until MSHA issued the requisite MineArc approval for the air-monitoring
component (Tr. 122) or the Industrial Scientific purchase order was delivered. 
See generally Climax Molybdenum Co., 2 FMSHRC 1884, 1886 (July 1980)
(ALJ) (vacating a citation based on respondent’s defense of impossibility of
compliance).  See also Jim Walter Resources, Inc., 25 FMSHRC 435, n. 11
(July 2003) (ALJ) (“It is not accurate to state . . . that an operator is
always liable for a violative condition.  There are exceptions, impossibility
of compliance being one.”); Buffalo Mining Co., 2 IBMA 226, 259
(Sept. 1973) (holding that under the 1969 Coal Act, Congress did not intend
that a civil penalty be assessed “where compliance with a mandatory health or
safety standard is impossible due to unavailability of equipment, materials, or
qualified technicians.”)  Based on these facts, I find that Drummond has
established a valid defense of impossibility of performance.[4]

In
addition, the facts establish that MSHA’s issuance of the citation was
arbitrary and capricious and an abuse of discretion because contrary to its
past practice of relying on purchase orders with a confirmed delivery date for
refuge alternatives or components.  Concededly, when analyzing MSHA’s action, the
Commission may not substitute its own judgment for that of the agency, but must
consider whether the agency’s decision was based on a consideration of the
relevant factors and whether there has been a clear error of judgment.  See
e.g., Motor Vehicle Mfr. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43, 48-49 (1983).  Expert discretion is said to be the lifeblood
of the administrative process, but there must be a cogent explanation for
agency action, including a rational connection between facts and judgment to
pass muster under arbitrary and capricious analysis.  Id.   Consistency
with past practice is pertinent in examining whether an agency’s action is
arbitrary and capricious.   Puerto Rico Sun Oil Co. v. U.S. E.P.A., 8
F.3d 73, 77 (1st Cir. 1993).    I find that issuance of the instant citation
was arbitrary and capricious and amounted to an abuse of discretion.

The record establishes that MSHA’s
past practice led Drummond to believe that it could rely on a purchase order
for the MSHA-approved component that arrived a day after the citation issued.   Tr.
102, 121.  For example, when new
refuge alternatives were required in underground mines, parts were often on
back order with manufacturers because the entire industry needed them.   Tr.

121.   Thus, during prior inspections of refuge alternatives, MSHA accepted
purchase orders from Drummond as proof of compliance with the new refuge
alternative standard.  Tr. 93, 121.   In this case, Clements credibly testified
that he gave inspector Foster an Industrial Scientific purchase order for the MSHA-approved
air-monitoring component on the day of the inspection based upon his reliance
on this past practice.  Tr. 102. 

Further, the issuance of this citation appears to be an abuse of
discretion on the part of MSHA.  The Commission has found an abuse of
discretion when “there is no evidence to support the decision or if the
decision is based on an improper understanding of the law.” Utah Power &
Light Co., 13 FMSHRC 1617, 1623 n.6 (Oct. 1991), quoting Bothyo v.
Moyer, 772 F.2d 353, 355 (7th Cir. 1985); see also Energy West Mining
Co., 18 FMSHRC 565, 569 (Apr. 1996).   In particular, the Commission has
held that an inspector abuses his discretion when he uses no independent
judgment in issuing an order, but rather indiscriminately complies with a
directive to issue based solely on a single criterion.  Cumberland Coal Resources, LP, 28 FMSHRC 545, 555-58 (Aug. 2006) (holding there
was an abuse of discretion where inspector was given instructions to issue an
order based on a single criterion and thus had no discretion to make a
reasonable investigation or use independent judgment). 

In this
case, inspector Foster was instructed by his superiors to issue a citation to
the operator if there was no approval tag on the outside of the refuge
alternative.  Tr. 24.  Foster was not directed to check for the requisite components,
and he was not aware if the components were installed, only that there was no approval
tag affixed to the refuge chamber. Tr. 26.  According to Foster, inspectors
were told how to write citations for refuge alternative components, including
the format and verbiage to be used in the citation.  Tr. 31.  In fact, during a
pre-inspection conference, Foster indicated to safety superintendent Clements that
he was going to issue a citation for the absent component even before he saw
the chamber or went underground.  Tr. 96.  Foster did not use his own judgment with
regard to gravity designations, and MSHA did not take surrounding circumstances
into account, including the purchase order with confirmed delivery date for the
MSHA-approved Industrial Scientific air monitoring component.  Tr. 31. 

For all
of the foregoing reasons, Citation No. 8527576 is vacated.  

II.               
Joint Motion to Approve Settlement

I
have reviewed the parties’ Joint Motion to Approve Partial Settlement.  A
reduction in penalty from $1,203 to $963 is proposed under the Settlement
Agreement.  The parties request that Citation No. 8527643 be modified to reduce
the likelihood of injury or illness from “reasonably likely” to “unlikely,” and
to delete the “significant and substantial” designation.  

I have considered the representations and documen­tation
submitted in this case, and I conclude that the proffered settle­ment is
appropriate under the criteria set forth in section 110(i) of the Act.[5]  

III.       Order

For the reasons set forth above, Citation No. 8527576 is VACATED.

The motion for approval of
settlement of Citation No. 8527643 is GRANTED.

It
is ORDERED that Citation No. 8527643 be MODIFIED to reduce
the likelihood of injury or illness from “reasonably likely” to “unlikely,” and
to delete the “significant and substantial” designation.

To the extent Respondent has not already done so, within 30 days
of the date of this decision, Respondent, Drummond Company, Inc., is ORDERED
TO PAY a total civil penalty of $963.00 for the settled citation.[6]

/s/ Thomas P. McCarthy

Thomas
P.  McCarthy

Administrative
Law Judge

Distribution:

Noelle Holladay True, Esq.,  Rajkovich,
Williams, Kilpatrick & True, PLLC, 3151 Beaumont Centre Circle, Suite 375,
Lexington, KY 40513

Latasha Thomas, Esq., U.S.
Department of Labor, Office of the Solicitor, 618 Church Street, Suite 230,
Nashville, TN 37219

[1]
30 C.F.R. § 75.1506 (a)(1) states that “[e]ach operator shall provide refuge
alternatives and components as follows: (1) Pre-fabricated self-contained
units, including the structural, breathable air, air monitoring, and harmful
gas removal components of the unit, shall be approved under 30 CFR Part 7 . . .
.”

[2]
The purchase order was received into evidence as Respondent’s Exhibit 1.  R.
Ex. 1; Tr. 9.  The List of Part 7 approvals was received into evidence as
Respondent’s Exhibit 2.  R. 2; Tr. 9. 

[3]
In resolving conflicts in testimony, I have taken into consideration the
demeanor of the witnesses, their interests in this matter, the inherent
probability of their testimony in light of other events, corroboration or lack
of corroboration for testimony given, experience and credentials, and
consistency, or lack thereof, within the testimony of witnesses and between the
testimony of witnesses.

[4]
Although air-monitoring component models from other manufacturers were approved
by MSHA after Industrial Scientific, they were approved shortly before MSHA’s deadline
of December 31, 2013.  Strata Safety Product’s air-monitoring component was
approved by MSHA on November 22, 2013; ChemBio Shelter’s component was approved
by MSHA on December 12, 2013; A.L. Lee’s component was approved by MSHA on
December 23, 2013; and Mine Shield’s component was approved by MSHA on December
26, 2013.  R. Ex. 2.   These air-monitoring components, if ordered, would
likely encounter the same delays in shipment, or simply not arrive at the mine by
the deadline, even if dispatched on the day of approval.   In any event, I find
that Drummond was justified in relying on a purchase order from Industrial
Scientific, which had a confirmed delivery date that fell within the MSHA
deadline.   I further find that the subsequent MSHA approvals were issued so
close to the deadline that it made it practically impossible for an operator to
comply with the standard.   

[5] Pursuant to 29 C.F.R. 2700.1(b) and Federal Rule of
Civil Procedure 12(f), I strike paragraphs three and four of the motion as
immaterial and impertinent to the issues legitimately before the
Commission.  The paragraphs incorrectly cite and interpret the case law
and misrepresent the statute, regulations, and Congressional intent regarding
settlement under the Mine Act. 
Instead, I have evaluated the proposed
settlement in accordance with sections 110(i) and 110(k) of the Act.

[6]
Payment should be sent to: Mine Safety & Health Administration, U.S.
Department of Labor, Payment Office, P.O. Box 790390, St. Louis, MO 63179-0390.