Wallace Brothers, Inc.

Plain-English summary

Wallace Brothers conceded two guarding violations involving a portable crusher, but challenged the $1,300 penalty assessed for each citation. The Commission held that the administrative law judge had not addressed all six statutory penalty criteria in section 110(i) of the Mine Act. It vacated both penalty assessments and remanded the case for findings on those criteria and a new penalty analysis. The Commission also explained that the criteria may support a penalty higher, lower, or equal to the Secretary's proposal.

Decision snapshot

• Cited provision(s): 30 C.F.R. § 56.14107(a); 30 U.S.C. § 814(b); 30 U.S.C. § 820(i)
• Outcome: The two $1,300 penalty assessments were vacated and the proceeding was remanded for analysis under section 110(i).
• Key point: Commission judges must make findings on each statutory penalty criterion, and those criteria are not limited to reducing proposed penalties.

Full text (FMSHRC public release)

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

                                        April 2, 1996

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. WEST 94-710-M
:
WALLACE BROTHERS, INC. :

BEFORE: Jordan, Chairman; Doyle, Holen, Marks and Riley, 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. (1994) (“Mine Act” or “Act”), involves the penalties proposed by
the Secretary of Labor for two violations of 30 C.F.R. § 56.14107(a)1 by Wallace Brothers, Inc.
(“Wallace”). Wallace conceded the violations but contended that the proposed civil penalties
were too high. After an evidentiary hearing, Administrative Law Judge Arthur J. Amchan
assessed a $1,300 penalty for each citation. Wallace Brothers, Inc., 17 FMSHRC 1380, 1384
(August 1995) (ALJ). Wallace filed a petition for discretionary review challenging the judge’s
penalty assessments. For the reasons set forth below, we vacate and remand.

   1
       30 C.F.R. § 56.14107(a) provides:

            Moving machine parts shall be guarded to protect persons from
            contacting gears, sprockets, chains, drive, head, tail, and takeup
            pulleys, flywheels, couplings, shafts, fan blades, and similar moving
            parts that can cause injury.

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                                              I.

                            Procedural and Factual Background

    On May 11, 1994, inspector Rodney Ingram of the Mine Safety and Health Administration

(“MSHA”) issued two citations to Wallace, alleging separate violations of 30 C.F.R. §
56.14107(a). Citation No. 4129345 alleged that the standard was violated because a 5 inch by 8
inch gap existed in the guard of a self-cleaning tail pully on a portable crusher. Tr. 15. Citation
No. 4129346 alleged that the back side of a V-belt drive was unguarded. Tr. 22. The inspector
gave Wallace 2 days to abate the conditions. On June 8, the inspector returned and, upon
discovering that the cited conditions had not been abated, issued two withdrawal orders pursuant
to section 104(b) of the Mine Act, 30 U.S.C. § 814(b). On June 9, the violations were abated.

    Following an evidentiary hearing, the judge assessed a $1,300 penalty for each citation.

17 FMSHRC at 1384. The judge reached the $1,300 figure by multiplying the most likely penalty
($50) times the number of days (26) the conditions went unabated. Id. at 1383. The judge noted
that the Secretary had proposed a penalty of $1,500 for each citation and Wallace contended that
the penalties should be $210 and $159. Id. at 1381-82. The judge rejected Wallace’s alternative
penalties as too low, stating that such low penalties would “invite dilatory conduct[.]” Id. at
1383. He noted that “[a]lthough the proposed penalty assessment lists only the numbers of the
section 104(a) citations, the document and attached narrative clearly indicate that the penalties are
for the section 104(b) orders as well.” Id. 1381 n.1.

                                              II.

                                         Disposition

    On review, Wallace challenges the judge’s decision on two grounds.2 Wallace contends

that the judge failed to address all six statutory criteria contained in section 110(i) of the Mine
Act, 30 U.S.C. § 820(i). W. Br. at 1-2. Wallace also states that the legislative history of the Act
indicates that the six penalty criteria “are to be used as avenues for mitigating the penalties” not to
“enhance the penalties[,]” as it asserts the judge did here. Id. at 3. The Secretary agrees with
Wallace’s first contention, i.e., that the judge failed to address all six statutory criteria contained
in section 110(i) of the Mine Act, but he disagrees with Wallace’s second contention, i.e., that the

   2
       In its petition, Wallace also raised the issue of whether the Commission is authorized to

assess a penalty of up to $5,000 per day under section 110(b) of the Act, as it asserts the judge
did in this case. Pet. at 2. Because Wallace did not refer to this issue in its brief, we need not
address it. See Asarco Mining Co., 15 FMSHRC 1303, 1304 n.3 (July 1993).

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six penalty criteria serve only to mitigate proposed penalties and not to enhance them. S. Mot. at
1-3.3

   A. Statutory Penalty Criteria

   Section 110(i) requires the Commission to consider six specified criteria in assessing civil

monetary penalties. See Sellersburg Stone Co. 5 FMSHRC 287, 291-92 (March 1983), aff’d,
736 F.2d 1147, 1152 (7th Cir. 1984). Section 110(i) states, in pertinent part:

           [T]he Commission shall consider the operator’s history of previous
           violations, the appropriateness of such penalty to the size of the
           business of the operator charged, whether the operator was
           negligent, the effect on the operator’s ability to continue in
           business, the gravity of the violation, and the demonstrated good
           faith of the person charged in attempting to achieve rapid
           compliance after notification of a violation.

30 U.S.C. § 820(i). Further, the Commission and the courts have held that section 110(i) requires
a judge to make findings of fact on the statutory criteria. Dolese Brothers Co., 16 FMSHRC 689,
695 (April 1994); Pyro Mining Co. v. FMSHRC, 3 MSHC (BNA) 2057, 2059, 785 F.2d 310
(Table) (6th Cir. 1986) (“[n]ot only must the Commission consider [the] criteria, it is our opinion
that the Commission must provide in its order findings of fact on each of the statutory criteria.”);
Sellersburg, 5 FMSHRC at 292.

   Because the judge failed to consider the criteria set forth in section 110(i) of the Act or to

make findings of fact with respect to them, we vacate the penalties assessed. We remand this
proceeding to the judge for further analysis consistent with the foregoing principles.

   B. Penalty Amounts

    The Commission and its judges are not bound by the Secretary’s proposed penalties. See,

e.g., Sellersburg, 5 FMSHRC at 290-93 (there the Secretary originally proposed penalties of
$1,000, $78 and $78 for three violations and the judge assessed penalties of $7,500, $1,000 and
$1,000, respectively). When a civil penalty petition is filed and Commission jurisdiction attaches,
the judge assesses a penalty de novo, based upon the statutory penalty criteria and the record

   3
     The Secretary did not file a brief; however, on December 18, 1995, he filed a motion to

remand the section 110(i) issue to the judge. In light of our disposition, the Secretary’s motion is
moot.

                                              3

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evidence developed in the course of the adjudication. Id. at 291-92; United States Steel Mining
Co., Inc., 6 FMSHRC 1148, 1151 (May 1984).

     Nothing in the language of section 110(i) suggests that the six criteria may serve only to

reduce penalties proposed by the Secretary. “[T]he penalties assessed de novo in a Commission
proceeding appropriately can be greater than, less than, or the same as those proposed by the
Secretary.” Sellersburg, 5 FMSHRC at 293.

    We find no merit to Wallace’s contention that the penalty criteria can be used only to

mitigate a proposed penalty. Accordingly, on remand, the judge may exercise his discretion in
assessing penalties, guided by the penalty criteria.

                                             4

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                                             III.

                                         Conclusion

    For the foregoing reasons, we vacate the judge’s civil penalty assessments and remand this

case to the judge for consideration and application of the section 110(i) civil penalty criteria to the
facts of this case.

                                           ___________________________________
                                           Mary Lu Jordan, Chairman




                                           __________________________________
                                           Joyce Doyle, Commissioner




                                           ___________________________________
                                           Arlene Holen, Commissioner




                                           ___________________________________
                                           Marc Lincoln Marks, Commissioner




                                           ___________________________________
                                           James C. Riley, Commissioner



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