Drillex, Incorporated

Plain-English summary

Drillex drilled, blasted, excavated, crushed, and processed stone at a residential construction project in Puerto Rico. The company argued that its work was an incidental construction operation or a borrow pit outside the Mine Act's jurisdiction. The Commission held that Drillex extracted minerals and milled them by crushing stone and separating contaminants, and that the work was performed regularly rather than intermittently. It affirmed the judge's determination that the site was a mine under section 3(h)(1) of the Mine Act and left the citations and $1,567 in civil penalties affirmed.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 802(h)(1) and 803
• Outcome: The judge's determination that Drillex's site was a mine subject to the Mine Act was affirmed, along with the citations and $1,567 in civil penalties.
• Key point: Repeated extraction, crushing, sizing, and separation of stone can constitute mining and milling even when the material is used for a construction project.

Full text (FMSHRC public release)

CCASE:
SOL (MSHA) V. DRILLEX
DDATE:
19941215
TTEXT:

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      FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
                 1730 K STREET NW, 6TH FLOOR
                   WASHINGTON, D.C. 20006

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. SE 93-130-M
:
DRILLEX, INCORPORATED :
:

BEFORE: Jordan, Chairman; Doyle, Holen and Marks, Commissioners

                           DECISION

BY THE COMMISSION :

 This civil penalty proceeding, arising under the Federal Mine Safety and

Health Act of 1977, 30 U.S.C. 801 et seq. (1988) ("Mine Act" or "Act"),
presents the issue of whether the operations of Drillex, Incorporated
("Drillex") at the Montehiedra Project (the "Project") in Puerto Rico fell
within the definition of a "mine" as set forth in section 3(h)(1) of the Mine
Act, 30 U.S.C. 802(h)(1). Administrative Law Judge David F. Barbour
determined that
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1
Section 3(h)(1) of the Mine Act provides that:

              "coal or other mine" means . . . an area of land from
         which minerals are extracted in nonliquid form or . . . lands,
         excavations, . . . facilities, equipment, . . . or other property . .
         . used in, or to be used in, or resulting from, the work of
         extracting such minerals from their natural deposits in nonliquid
         form, . . . or used in, or to be used in, in the milling of such
         minerals, or the work of preparing . . . minerals . . . .

30 U.S.C. 802(h)(1).

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Drillex's operations were subject to Mine Act jurisdiction. He affirmed the
citations and orders issued to Drillex and assessed civil penalties. 15 FMSHRC
1941 (September 1993) (ALJ). The Commission granted Drillex's petition for
discretionary review, which challenges only the judge's determination of
jurisdiction. For the reasons that follow, we affirm the judge's decision.

                          I.

           Factual and Procedural Background

The parties stipulated as follows:

     1. [O]n February 1, 1993, the U.S. Department of Labor filed
     a proposed Assessment of Civil Penalty with the . . .
     Commission against Drillex . . . for alleged violations of the
     [Mine Act] at
     the . . . Project.

     2. [Drillex] contested the proposed assessment of civil penalties
     on the grounds that the operation conducted by Drillex . . . at
     the . . . Project does not fall within the jurisdictional scope of
     the [Mine Act] . . . .

     3. [T]he following stipulation of facts is submitted by the
     parties in order to resolve the jurisdictional issue presented by .
     . . [Drillex]:

          a. [O]n or about July 10, 1992 . . . Drillex
           . . . entered into an agreement with A.H.
          Development Corporation under which Drillex was to perform
          drilling, blasting, rock excavation and crushing of a minimum
          of 20,000 cubic meters of stone to be used as fill for
          embankment and road base at the . . . Project. The specified
          work was the only work performed by Drillex at the . . . Project
          and the material was processed an average of three . . . times a
          week.

          b. The [Project] . . . is a privately owned
          construction project wherein over two-hundred . . . residential
          units are being built.

          c. The material processed by Drillex . . . was
          extracted from the project site and hauled to the crusher area
          located within the project.

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d. The extracted material was to be reduced to gabion size by
one . . . employee using a hydraulic hammer.[] The remaining
stone was reduced to three . . . inches . . . in size with the
use of a portable jaw crusher plant. Two . . . employees were
retained for this purpose including the project supervisor.

           e. Drillex . . . removed six trucks of contaminated material
           (stone mixed with clay) from the project site. Said material
           was deposited in a property adjacent to Canteras de Puerto Rico
           in Guaynabo, . . . to be acquired by Drillex. Said material will
           be used to provide temporary access road for trucks and equipment
           in the property.

           f. None of the referred material was marketed or sold.

15 FMSHRC at 1942-43 (footnotes omitted). The parties further stipulated
that the only matter to be determined was whether Drillex's operations were
subject to Mine Act jurisdiction. Tr. 7. Drillex did not otherwise contest
the alleged violations. Id.

 The judge determined that Drillex's operation constituted a "mine" within

the meaning of section 3(h)(1) of the Mine Act. 15 FMSHRC at 1945-48. He
reasoned that Drillex had engaged in both mineral "extraction" and "milling"
and that the Secretary of Labor's interpretation of the term "mine," as
demonstrated by his exercise of jurisdiction, was entitled to deference.
Id. at 1946-47. The judge also found that, because Drillex did not extract
minerals on a one-time or intermittent basis and milled minerals for a specific
purpose, its work site differed from a "borrow pit," which would have been
subject to the jurisdiction of the Department of Labor's Occupational Safety
and Health Administration ("OSHA") rather than its Mine Safety and Health
Administration ("MSHA") pursuant to the MSHA-OSHA Interagency Agreement, 44 Fed.
Reg. 22827 (April 17, 1979), amended, 48 Fed. Reg. 7521 (February 22, 1983)
("Interagency Agreement"). Id. at 1948. Accordingly, the judge affirmed the
alleged violations and assessed the civil penalties of $1,567 proposed
by the Secretary. Id. at 1949.

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Gabion size is approximately 12 inches. Tr. 8.

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II.
Disposition

 Drillex argues that MSHA's assertion of jurisdiction over its work site was

unauthorized. It contends that it did not extract and process rock for the
material's intrinsic qualities but, rather, performed such activities merely as
an "incidental operation . . . for the construction of . . . roads . . . ."
Petition for Discretionary Review ("PDR") at 6. Additionally, Drillex asserts
that, under the terms of the Interagency Agreement, its site was subject to
OSHA jurisdiction as a borrow pit because extraction occurred only
intermittently and no milling was involved. Id. at 7-8.

 The Secretary responds that "the crushing, sizing, and separation of . . .

stone from contaminants [performed by Drillex] cannot be characterized as 'an
incidental operation,' but rather constitutes 'mineral milling' as contemplated
in the Mine Act and as defined in the Interagency Agreement." S. Br. at 9
(citations omitted). He also contends that the judge correctly distinguished
Drillex's operation from a borrow pit and that, in any event, the Interagency
Agreement is not legally binding on the Secretary. The Secretary argues further
that deference must be accorded to his interpretation of the Act.

 Section 4 of the Mine Act, 30 U.S.C.    803, provides that each "coal or

other mine" affecting commerce shall be subject to the Act. Section 3(h)(1)
of the Mine Act defines "coal or other mine," in part, as "an area of land from
which minerals are extracted . . . and . . . lands, excavations, . . .
facilities, equipment, . . . used in, or to be used in, the milling
of such minerals . . . ." 30 U.S.C. 802(h)(1). The Act does not
further define "extracted" or "the milling of . . . minerals." The
Commission and courts have recognized, however, that the legislative
history of the Mine Act indicates that a broad interpretation is to
be applied to the Act's definition of a mine. See, e.g., Marshall v.
Stoudt's Ferry Preparation Co., 602 F.2d 589, 592 (3rd Cir. 1979); Cyprus
Indus. Minerals Corp., 3 FMSHRC 1, 2-3 (January 1981), aff'd, 664 F.2d 1116
(9th Cir. 1981), citing S. Rep. No. 181, 95th Cong., 1st Sess. 14 (1977),
reprinted in Senate Subcommittee on Labor, Committee on Human Resources,
95th Cong., 2d Sess., Legislative History of the Federal Mine Safety and Health
Act of 1977, at 602 (1978) ("Legis. Hist.").

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Drillex designated its PDR as its brief.

    4
        The report of the Senate Committee on Human Resources states:

           the definition of 'mine' is clarified to include the areas, both
           underground and on the surface, from which minerals are
           extracted . . . and areas appurtenant thereto. . . . The
           Committee notes that there may be a need to resolve
           jurisdictional conflicts,

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We conclude that Drillex engaged in both mineral extraction and milling,
either of which independently qualifies its operation as a "mine" within the
meaning of the Act. In general, absent express definitions, statutory terms
should be defined according to their commonly understood definitions. See 73
Am. Jur. 2d Statutes 223 (1974). The term "extraction" means the separation
of a mineral from its natural deposit in the earth. See Bureau of Mines, U.S.
Dept. of Interior, Dictionary of Mining, Mineral, and Related Terms 404 (1968)
("DMMRT"). As the judge correctly found, Drillex engaged in mineral extraction
by drilling, blasting, excavating and, thereby, separating rock, "a mineral or a
composite of minerals," from its deposit in the earth. 15 FMSHRC at 1946-47.
See DMMRT at 932.

 The term "milling" includes processes by which minerals are made ready for

use. See DMMRT at 706; Webster's Third New International Dictionary, Unabridged
1434 (1971). The Interagency Agreement further defines "milling" as:

      the art of treating the crude crust of the earth to produce
      therefrom the primary consumer derivatives. The essential
      operation in all such processes is separation of one or more
      valuable desired constituents of the crude from the undesired
      contaminants with which it is associated.

44 Fed. Reg. at 22829. The Interagency Agreement includes "crushing," "the
process used to reduce the size of mined materials into smaller, relatively
coarse particles," among milling processes subject to MSHA's regulatory
authority. Id. Drillex crushed stone into gabion and smaller particles and
separated usable stone from undesired contaminants. Therefore, Drillex engaged
in milling. See Donovan v. Carolina Stalite Co., 734 F.2d 1547, 1551-54
(D.C. Cir. 1984).

 We also conclude that substantial evidence supports the judge's

determination that the site did not qualify as a borrow pit subject to OSHA
jurisdiction. The Interagency Agreement provides:

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but it is the Committee's intention that what is considered to be
a mine and to be regulated under [the] Act be given the broadest
possibl[e] interpretation, and . . . that doubts be resolved in
favor of inclusion of a facility within the coverage of the Act.

Legis. Hist. at 602.
5 We need not reach the issue of whether deference must be
accorded to the Secretary's interpretation of the Act.

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"Borrow Pits" are subject to OSHA jurisdiction except
those borrow pits located on mine property or related to mining.
(For example, a borrow pit used to build a road or construct a
surface facility on mine property is subject to MSHA
jurisdiction). "Borrow pit" means an area of land where the
overburden, consisting of unconsolidated rock, glacial debris, or
other earth material overlying bedrock is extracted from the
surface. Extraction occurs on a one-time only basis or only
intermittently as need occurs, for use as fill materials by the
extracting party in the form in which it is extracted. No milling
is involved, except for the use of a scalping screen to remove
large rocks, wood and trash. The material is used by the extracting
party more for its bulk than its intrinsic qualities on land which is
relatively near the borrow pit.

44 Fed. Reg. at 22828. As the judge found, extraction did not occur
intermittently or on a one-time basis. Drillex excavated and processed
material approximately three times each week in order to fulfill its
agreement to produce at least 20,000 cubic meters of stone. Tr. 6. It also
performed milling processes, beyond merely using the scalping screen, by
crushing stone into smaller particles. Furthermore, the stone was not used
for its bulk alone but was sized for its intended use as fill.

 Substantial evidence also supports the judge's conclusion that Drillex's

extraction and processing of minerals were not merely incidental to road
construction and, thus, its operations do not fall within the exception for
such activities referenced in MSHA's Program Policy Manual, Vol. I at 3. Cf.
RBK Constr. Inc., 15 FMSHRC 2099, 2100-01 (October 1993). Drillex contracted
with A.H. Development Corporation expressly to extract and crush a specific
quantity and quality of stone needed for the Project. Tr. 6.

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We need not reach the issue of whether the Interagency Agreement is
legally binding on the Secretary.

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                       Conclusion

 For the foregoing reasons, we conclude that Drillex engaged in mineral

extraction and milling and affirm the judge's determination that its site
constituted a "mine" within the meaning of section 3(h)(1) of the Mine Act.

                          Mary Lu Jordan, Chairman

                          Joyce A. Doyle, Commissioner

                          Arlene Holen, Commissioner

                          Marc Lincoln Marks, Commissioner