CDK Contracting Company

Plain-English summary

CDK Contracting Company, a construction contractor, contested a citation and a proposed $100 penalty connected to a fatal accident at the Portland Plant and Quarry. CDK argued that MSHA proposed the penalty too late, about 16 months after issuing the citation and about 13 months after completing its accident report. Judge Richard W. Manning found that the delay was reasonable in light of the fatal-accident investigation, the special-assessment workload, and ten related citations, and found adequate cause for any delay. He also held that CDK waived an actual-prejudice argument by not requesting a pre-penalty hearing and denied the motion to dismiss.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 30 C.F.R. § 50.10; 29 C.F.R. § 2700.25
• Outcome: The motion to dismiss the citation and civil penalty proceeding was denied.
• Key point: A penalty proposed later than usual may still proceed when the Secretary shows adequate cause for the delay and the circumstances do not establish actual prejudice.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1244 SPEER BOULEVARD #280
DENVER, CO 80204-3582
303-844-3577/FAX 303-844-5268

                                     February 3, 2003

CDK CONTRACTING COMPANY, : CONTEST PROCEEDING
Contestant :
: Docket No. WEST 2001-426-RM
v. : Citation No. 7935408; 4/23/2001
:
SECRETARY OF LABOR : Mine ID 05-00037 L35
MINE SAFETY AND HEALTH : Portland Plant/Quarry
ADMINISTRATION (MSHA), :
Respondent :
:
:
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA), : Docket No. WEST 2003-5-M
Petitioner : A.C. No. 05-00037-05511 L35
:
v. :
: Portland Plant & Quarry
CDK CONTRACTING COMPANY, :
Respondent :

                ORDER DENYING CDK CONTRACTING COMPANY’S
                            MOTION TO DISMISS

    CDK Contracting Company (“CDK”) filed a motion to vacate Citation No. 7935408 in

these cases and to dismiss the civil penalty proceeding. As grounds for the motion, CDK argues
that the Secretary failed to propose a penalty for the alleged violation within a reasonable time
after the termination of the Secretary’s investigation of a fatal accident at the Portland Plant and
Quarry as required by section 105(a) of the Mine Act. The Secretary opposes the motion.

    On February 24, 2001, a fatal accident occurred when a CDK employee fell from a

scaffold ladder at the Portland Plant and Quarry. CDK was a construction contractor at that site.
The Department of Labor’s Mine Safety and Health Administration (“MSHA”) commenced its
investigation of the accident that day. On April 23, 2001, MSHA issued the citation at issue in
these cases. CDK contested the citation on May 23, 2001. MSHA issued its final report on the
investigation of the accident on July 9, 2001. On August 16, 2002, MSHA issued its proposed
assessment of penalty under 29 C.F.R. § 2700.25. CDK timely filed its contest of the proposed
penalty. MSHA proposed the penalty for the citation almost 16 months after it was issued and
almost 13 months after MSHA issued its final report on the accident.

                  I. SUMMARY OF THE PARTIES’ ARGUMENTS

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    CDK argues that these cases must be dismissed because the Secretary failed to notify

CDK of the proposed penalty within a reasonable time after the termination of the accident
investigation, as required by the Mine Act. The Secretary is required “within a reasonable time
after the termination of such inspection or investigation [to] notify the operator . . . of the civil
penalty to be assessed . . . .” 30 U.S.C. § 815(a). CDK argues that notification of the proposed
penalty amount 16 months after the citation was issued is not within a reasonable time under the
Mine Act. CDK maintains that the Secretary cannot establish that this delay was reasonable.
Although these cases involve a fatal accident, the facts are not complex and were fully known by
the time the citation was issued. CDK maintains that there was not an unusually high number of
special assessments during 2001-02. The Commission accepted a lengthy delay in proposing a
penalty when the caseload of the assessments office increased exponentially. Steele Branch
Mining, 18 FMSHRC 6, 14 (Jan. 1996). There has been no showing of such an increase here.

    The Secretary maintains that the proposed penalty was issued within a reasonable time

given the circumstances of these cases. She also argues that she demonstrated just cause for any
delay. The Secretary states that the special assessments group of MSHA’s Office of
Assessments was extremely busy during 2001-02. She states that this group has only four
employees and two of these employees were unavailable during the relevant period of time. The
Secretary points to the fact that during 2001, 2,153 “routine” special assessments were proposed,
217 “fatal/serious injury related” special assessments were proposed, and 204 “section 110(c)”
special assessments were considered. In the first nine months of 2002, the numbers were 1,949,
183, and 158, respectively.

    The Secretary contends that the relevant time period did not begin to run until MSHA

completed its accident investigation. She maintains that the fatality that triggered the
investigation was extremely serious and many citations were referred for special assessment.
She states that careful consideration of the facts and consideration of the statutory criteria
consumed considerable time. The citation was in the Office of Assessments from August 2001
until August 16, 2002. There was a backlog of cases in the office of special assessments during
that time because one of the four assessors was on extended leave and the other was unavailable
because of a training program. In addition, the Secretary states that the supervisor of the special
assessments group was heavily involved in the development of MSHA’s standardized
information system, which will completely replicate the records into a web-based system.

     The Secretary believes that the reasonableness of time should be analyzed by taking into

consideration the length and circumstances of the delay, the prejudice to the opposing party by
reason of the delay, and the circumstances compelling relief. The Secretary contends that CDK
suffered no actual prejudice because both parties used the time to conduct discovery and prepare
for trial. The mere potential for prejudice is insufficient. Dismissal of a civil penalty proceeding
because of a delay that was not prejudicial would clearly run counter to the concern for safe and
healthful working conditions that led to the creation of the civil penalty program. The Secretary
points to the legislative history of the Mine Act in which the Senate Committee on Human
Resources stated that “there may be circumstances, although rare, when prompt proposal of a
penalty may not be possible, and the Committee does not expect that the failure to propose a
penalty with promptness shall vitiate any proposed penalty proceeding.” (S. Rep. 95-181, at 34,
reprinted in Senate Subcomm. on Labor, Comm. on Human Res., Legislative History of the
Federal Mine Safety and Health Act of 1977, at 622 (1978)).

                           II. ANALYSIS OF THE ISSUES

    The Commission has excused the late filing of proposed penalties based on claims of

excessive work load, but it made clear that such claims will not receive blanket approval. Steele
Branch, 18 FMSHRC at 14; Salt Lake County Rd. Dept., 3 FMSHRC 1714, 1717 (July 1981).
The assessment in Steele Branch arose in 1991-92 when there was a dramatic increase in the
number of penalty assessments. See Rhone-Poulenc of Wyoming Co., 15 FMSHRC 2089, 2094
(Oct. 1993). In the present cases, the delay was in large measure caused by the fact that two of
the four MSHA employees assigned to the special assessments office were not available for a
significant period of time. One employee was on extended leave for an unspecified reason, the
other was in training, and the supervisor was heavily involved in developing a new information
system. These excuses are not nearly as compelling as the excuse offered by the Secretary in
Steele Branch.

    The citation at issue originally alleged that Holnam, Inc., the production operator, failed

to immediately notify MSHA’s Rocky Mountain District that a fatal accident occurred at the
Portland Plant and Quarry. The citation was modified on May 4, 2001, to charge CDK with the
violation rather than Holnam, Inc. The proposed penalty is $100. Thus, the penalty was
proposed about 15 months after the citation was issued to CDK.

   The accident in these cases was serious and required an analysis of the facts by the Office

of Assessments. Proposing penalties following a fatal accident requires a high degree of
diligence on the part of assessment office employees and those MSHA officials who review the
proposals. The office’s staff was reduced and the supervisor’s assistance was compromised by a
major project. It is important to remember that a penalty is typically proposed within three to
nine months after a citation is issued, so the delay in these cases is not as great as it may first
appear. I find that the penalty involved in these cases were proposed within a reasonable time.

    I also find that the Secretary established adequate cause for any delay. I agree with Judge

Michael Zielinski’s analysis of this issue in Paiute Aggregates, Inc., 24 FMSHRC 950, 954 (Oct.
2002). In that case, Judge Zielinski concluded that the Secretary did not establish that the entire
14 month delay was due to factors beyond her control because she was unable to provide a week-
by-week description of the events that occurred while the Office of Assessments was considering
what penalties to propose. Id. Nevertheless, he held that it is clear that Congress intended that
“delays in proposing penalties should not nullify penalty proceedings.” Id. Paiute Aggregates
arose under circumstances that are quite similar to the present cases. The showing necessary to
establish adequate cause will vary depending upon the length and circumstances of the delay.
Paiute Aggregates, Inc., 24 FMSHRC 943, 946 (Oct. 2002) (Judge Zielinski). Thus, a case
involving an egregious delay will require greater justification to meet the adequate cause test.

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Id. Here the somewhat short delay was caused by the Secretary’s failure to adequately staff its
special assessment office. While this excuse may not be sufficient to justify a lengthy delay, I
believe that it satisfies the adequate cause test in this case, given the admonition of Congress
cited above, because the penalties were proposed only a few months later than is typical for the
Office of Assessments.

    I also take into consideration the fact that this citation was part of a group of citations that

were specially assessed following the accident investigation. The explanation provided by the
Secretary does not support a 15 month period to proposed a $100 penalty for a violation of
section 50.10. If this citation were considered alone, I would dismiss the civil penalty case. On
this date, I issued orders denying CDK’s motions to dismiss in two other groups of cases that
arose after the same accident. (WEST 2001-420-RM, etc., with WEST 2002-464-M; and WEST
2001-348-RM, etc., with WEST 2002-461-M). These other cases involve ten citations and
orders that were specially assessed. When taken with these other cases, the Secretary has
provided sufficient justification for the length of time she took to propose a penalty for Citation
No. 7935408.

    In the other CDK cases referenced above, CDK argued that it was actually prejudiced by

the delay because its witnesses moved away after its Colorado project was completed and the
company was in the process of winding down its affairs. It is not entirely clear from its motion
whether CDK is making the same argument in these cases. My ruling on the prejudice issue
would be the same here and I incorporate by reference my analysis on that issue from my order
in WEST 2002-420-RM, etc.

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                                      III. ORDER

    I find that although the Secretary took a longer period of time to propose a penalty for

Citation No. 7935408 than normally would be the case, the penalty was proposed within a
reasonable time. In the alternative, I find that the Secretary demonstrated adequate cause for the
delay taking into consideration the other ten citations that were specially assessed following the
accident investigation. I also find that, by not requesting a pre-penalty hearing, CDK waived its
right to claim actual prejudice because it knew that it would be shutting down its operations and
terminating its employee witnesses. Consequently, CDK Contracting Company’s motion to
dismiss is DENIED.

                                         Richard W. Manning
                                         Administrative Law Judge

Distribution:

Karen L. Johnston, Esq., Jackson & Kelly,1099 18th Street, Suite 2150, Denver, CO 80202 (Fax
and First Class Mail)

Gregory W. Tronson, Esq., Office of the Solicitor, U.S. Department of Labor, P.O. Box 46550,
Denver, CO 80201-6550 (Fax and First Class Mail)

RWM

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