Secretary of Labor v. Newtown Energy, Inc.

Plain-English summary

A Newtown Energy mine superintendent repaired a shuttle-car power cable with an exposed conductor while the cable connector's lock still held its key, violating the lockout and tagout requirement in 30 C.F.R. § 75.511. The Commission had already held that the violation was S&S, involved high negligence, and could cause a fatal electrical injury, then remanded for an unwarrantable-failure determination and penalty assessment. Judge L. Zane Gill found that the superintendent's direct involvement, electrical training, knowledge of the improper lockout, and the high danger outweighed the violation's 10-to-15-minute duration and the lack of prior notice. He held that the violation resulted from unwarrantable failure, affirmed the citation as written, and assessed the Secretary's proposed $7,578 penalty.

Decision snapshot

• Cited standard: 30 C.F.R. § 75.511
• Outcome: The citation was affirmed as S&S and unwarrantable, with a $7,578 penalty.
• Key point: A supervisor's knowing decision to perform electrical work under an improper lockout can establish unwarrantable failure despite a short exposure period.

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:
202-434-9958 / FAX: 202-434-9949

SECRETARY
OF LABOR

MINE
SAFETY AND HEALTH   

ADMINISTRATION
(MSHA),

Petitioner,

v.

NEWTOWN
ENERGY, INC.,

Respondent.

CIVIL
PENALTY PROCEEDING

Docket
No. WEVA 2011-283

A.C.
No. 46-09231-235522-01

Mine:
Coalburg No. 2

DECISION ON
REMAND

Appearances:               Benjamin
D. Chaykin, Esq., Office of the Solicitor, U.S. Department of Labor, Arlington,
Virginia, for Petitioner;

Christopher D. Pence, Esq., Hardy Pence
PLLC, Charleston, West Virginia, for Respondent.

Before:                                    Judge
L. Zane Gill

This case is before me on remand from
the Commission. 38 FMSHRC 2033 (Aug. 2016). On August 7, 2013, I issued a
decision after hearing for the single section 104(d)(1) citation contained in
this docket. 35 FMSHRC 2494 (Aug. 2013) (ALJ). On appeal, the Commission
reversed several aspects of my decision and remanded others. 38 FMSHRC at 2050.

On remand, I must revisit Citation No.
8110086, which was issued to Newtown Energy, Inc. (“Newtown”) for failing to
lock out and tag out the power cable connector for the Number 34 shuttle car in
Newtown’s Coalburg No. 2 mine. The citation alleged the violation was
significant and substantial (“S&S”) [1]
and an unwarrantable failure [2]
to comply with the mandatory safety standard in 30 C.F.R. § 75.511, requiring
that disconnecting devices be properly locked out and tagged out before engaging
in electrical work. The Secretary of Labor proposed a penalty of $7,578.00.

I. PROCEDURAL
BACKGROUND AND ISSUES ON REMAND

In my August 7, 2013, decision, I found
a violation of 30 C.F.R. § 75.511 but concluded that the violation was not S&S
or an unwarrantable failure on the part of the mine operator. 35 FMSHRC at 2506,
2508. These determinations were based on my findings that the violation was
unlikely to result in an injury and reflected a low degree of negligence, due
to mitigating circumstances. Id. at 2501–03, 2506.

On appeal, the Commission upheld the
violation but found that it was S&S and that Newtown had demonstrated high
negligence. 38 FMSHRC at 2049–50. The Commission concluded there was insufficient
evidence supporting several of my findings reducing the likelihood of the
violation and mitigating Newtown’s negligence. Id. at 2042–44, 2047–48. The
Commission further held that I erred by failing to discuss the established unwarrantable
failure factors and directed me to consider the supervisor’s involvement as an additional
aggravating factor in my unwarrantable failure determination. Id. at
2046.

Consequently, the issues before me on
remand are (1) whether the violation was an unwarrantable failure, and (2) what
is the appropriate penalty assessment.

II. FURTHER
FINDINGS OF FACT, ANALYSIS, AND

CONCLUSIONS OF
LAW

MSHA Inspector Russell Richardson issued
Citation No. 8110086 on May 25, 2010, during an inspection of Newtown’s
Coalburg No. 2 mine. (Tr.26:10–12) Richardson wrote the citation for Newtown’s
failure to properly lock out and tag out the “cathead” [3]
power cable connector for the number 34 shuttle car. (Tr.36:8–10, 53:18–54:3)

A.
       Further Findings of Fact

Mine Superintendent Robert Herndon accompanied
Richardson on his inspection of the mine. (Tr.30:2–3) As mine superintendent,
Herndon directed the workforce, ensured compliance with federal laws and
regulations, and was responsible for the health and safety of the miners. (Tr.93:18–23,
119:1–6) He was second in command at the mine and had the power to discipline
and fire employees. (Tr.31:15–19, 118:8–14) Herndon was also a certified
electrician at the time of the inspection. (Tr.119:7–9) He completed specialized
training that included proper procedures for locking out and tagging out electrical
equipment. (Tr.119:10–24)

Inspector Richardson directed Herndon to
lock out and tag out the cathead for the number 34 shuttle car before they
inspected its power cable. (Tr.36:14–18) Herndon procured a lock, de-energized
the cathead, and attached the lock but was unable to remove the key from the
lock without breaking it. (Tr.103:1–6, 104:11–22) He did not inform Richardson
that he had left the key in the lock upon returning from the power center. ( See
Tr.46:10–20, 137:23–138:13) Herndon subsequently repaired damage to the cable, including
an exposed copper conductor, using a knife. 35 FMSHRC at 2497–98. The repair of
the cable, while the cathead was not properly locked out, constituted
electrical work in violation of section 75.511. Id. at 2498–500.

Herndon and one other miner started the repairs
after the damage to the cable was discovered at 9:15 a.m. ( See Tr.56:24–57:7;
G. Ex. 2) The lock out tag out violation was discovered at 9:30 a.m. and
terminated five minutes later. (Tr.49:1–7; G. Ex. 3) I credit Richardson’s undisputed
testimony that repairs stopped upon discovery of the lock out violation until it
was terminated. (Tr.46:15–20) I also credit Herndon’s undisputed testimony that
applying a new insulating wrap to the cable took 10 minutes. (Tr.108:5–9) In
light of the foregoing, I conclude that the violation existed for approximately
10 to 15 minutes, between 9:15 a.m. and 9:30 a.m., while the repairs were
being conducted.

Newtown has suggested that the danger of
the violation was mitigated by the short distance between the shuttle car and
power center. (Resp’t Post-Hr’g Br. at 16) However, the distance is only relevant
if miners could see that repairs were ongoing. [4]
Richardson testified that the power center was not visible from the shuttle
car, as there were blocks of coal in the way. (Tr.37:2–9) Although part of
Herndon’s testimony implies visibility, he also testified on cross examination that
the shuttle car was not visible from the power center. (Tr.127:22–128:8, 134:14–20)
I therefore credit Richardson’s testimony and conclude that there was no
visibility between the shuttle car and power center.

B.
       Unwarrantable Failure

The Commission has held
that  unwarrantable  failure
is aggravated conduct constituting more than ordinary negligence. Emery
Mining Corp. , 9 FMSHRC 1997, 2001 (Dec. 1987). It is characterized by “indifference,”
a “serious lack of reasonable care,” “reckless disregard,” or “intentional
misconduct.” Id.  at 2003 – 04;  see
also Buck Creek Coal , 52 F.3d 133, 136 (7th Cir.
1995) (approving the Commission’s  unwarrantable  failure
test). Whether conduct is “aggravated” in the
context of  unwarrantable  failure is determined by looking at all the facts
and circumstances of a case to see if aggravating or mitigating factors exist. IO
Coal Co. , 31 FMSHRC 1346, 1350 – 51 (Dec.
2009). The Commission has identified several such factors, including: the
length of time a violation has existed, the extent of the violative condition,
whether the operator has been placed on notice that greater efforts are necessary
for compliance, the operator’s efforts in abating the violative condition,
whether the violation was obvious, whether the violation posed a high degree of
danger, and the operator’s knowledge of the existence of the violation. Id. Because supervisors are held to a high
standard of care, their involvement in a violation is another important factor
supporting an unwarrantable failure determination. Lopke Quarries, Inc. ,
23 FMSHRC 705, 711 (July 2001) (citing  REB Enters., Inc. , 20
FMSHRC 203, 225 (Mar. 1998)). Furthermore, “[i]t is well established that a
supervisor’s violative conduct, which occurs within the scope of his
employment, may be imputed to the operator for unwarrantable failure purposes.”
Capitol Cement Corp. , 21 FMSHRC 883, 893 (Aug. 1999) (citation omitted),
aff’d , 229 F.3d 1141 (4th Cir. 2000) (unpub.). All relevant facts and
circumstances of each case must be examined to determine whether an actor’s
conduct is aggravated or if mitigating circumstances exist. Consolidation
Coal Co. , 22 FMSHRC 340, 353 (Mar. 2000).

The Secretary asserts that the violation
was an unwarrantable failure. (Sec’y Post-Hr’g Br. at 19) In support, he argues
that Herndon was subject to a higher standard of care as a supervisor and his
actions were an intentional, knowing breach of the safety standard. ( Id.
at 19–22) The Secretary further asserts that the violation was extensive,
long-lasting, obvious, and posed a high degree of danger, and that Newtown was
on notice. ( Id. at 20–22) In response, Newtown argued that Herndon made
a good faith attempt to comply with Inspector Richardson’s request to lock out and
tag out the shuttle car power cable and that he did not believe electrical work
was being done. (Resp’t Post-Hr’g Br. at 5, 16) Newtown further asserts that the
short time period, lack of danger, lack of notice, and extensive safety
training are all mitigating factors that support removal of the unwarrantable
failure designation. ( Id. ) 

On appeal, the Commission concluded
that Newtown’s conduct constituted high negligence. “The Commission has also previously
recognized that a finding of high negligence suggests unwarrantable failure.” Eagle
Energy Inc. , 23 FMSHRC 829, 839 (Aug. 2001). In analyzing an  unwarrantable  failure, I must
consider the Commission’s factors for determining aggravated conduct. IO
Coal Co. , 31 FMSHRC at 1350 – 51.

1.         Involvement of a
Supervisor

The
direct involvement of a supervisor in the creation of a violation is an
aggravating factor. Lopke Quarries , 23 FMSHRC at 711. Herndon’s
position as mine superintendent is not disputed. (Tr.93:12–13) He was responsible
for the health and safety of the miners and for ensuring compliance with federal
laws and regulations. (Tr.93:18–23, 119:1–6) As a supervisor, Herndon was in a
position to set an example for his miners and must be held to a high standard
of care. Nevertheless, while escorting Inspector Richardson, Herndon improperly
locked out and tagged out the cathead by leaving the key in the lock during
electrical repairs. 35 FMSHRC at 2500. Herndon’s role as mine superintendent is
a critical aggravating factor that I weigh heavily in my unwarrantable failure determination.

2. Operator’s Knowledge; Obviousness
   of the Violation

As a supervisor, Herndon’s knowledge of
the violation may be imputed to Newtown. Capitol
Cement , 21 FMSHRC at 893 . Herndon
suggested he was unaware of the violation because he believed that repairing
the power cable’s protective outer jacket did not constitute electrical work. (Tr.111:2–21,
115:22–116:5, 120:9–15) He further testified that leaving the key in the lock
while conducting the repair was a safe practice, as there were no miners
located near the power center. (Tr.123:7–124:3; See Tr.113:23–114:18) However,
the repairs involved cutting into the insulation of the power cable with a
knife, which exposed the cable’s copper conductor. (Tr.59:21–60:14) I have previously
determined that such repairs constitute electrical work. 35 FMSHRC at 2497–98. Herndon,
who was a certified electrician trained in lock out and tag out procedures, at
a minimum should have known that cutting into a power cable constitutes
electrical work, given the obvious danger. (Tr.119:15–24) Indeed, Herndon
admitted that leaving the key in the lock while conducting electrical work is
not a safe practice. (Tr.119:15–24, 120:9–21) Despite conducting repairs
knowing that the cathead was not properly locked out, he did not tell the
inspector of his inability to properly lock out and tag out the cathead. ( See
Tr.46:10–20, 137:23–138:13) Thus, I believe Herndon took a calculated risk in
performing electrical repairs on the cable that he knew were in violation of
section 75.511. Herndon’s knowledge of the violation, imputed to Newtown, is an
aggravating factor that I accord significant weight in my determination.

Additionally, the existence of the violation
should have been obvious to Herndon. He was aware from his electrician training
that leaving the key in the lock was an improper lock out and only did so after
trying to forcibly remove it. (Tr.55:16–56:6, 104:11–22, 119:15–24) I find the
violation’s obviousness to be an aggravating factor but accord it minimal
weight, as its relevance is subsumed by Herndon’s knowledge of the violation’s
existence.

3.         Degree of Danger

The
facts and circumstances establish that the violation posed a high degree of
danger. Herndon repaired a power cable with an exposed copper wire conductor
using a knife. (Tr.59:21–60:14, 124:12–23) If the cable were re-energized,
touching the exposed conductor with a knife or hand would ground the cable’s
277 volts, which could prove fatal. (Tr.41:12–20, 60:15–22) Newtown asserts that
the violation was not dangerous, as there was no likelihood that a miner would
re-energize the shuttle car’s cable. (Resp’t Post-Hr’g Br. at 16) The
Commission rejected this argument, finding the violation was S&S and reasonably
likely to result in a potentially fatal injury to one miner. 38 FMSHRC at 2045,
2049. Newtown also argues that the closeness of the power center to the shuttle
car is a mitigating factor. (Resp’t Post-Hr’g Br. at 16) I find the distance
between them is not mitigating, based on the established lack of visibility
between the power center and shuttle car. Furthermore, Newtown’s training
program and compliance with other safety standards are not mitigating
considerations. See Buck Creek Coal , 52 F.3d at 136. Based on
these findings, and in line with the Commission’s determination of high gravity,
I find that the violation posed a high degree of danger and therefore accord this
factor considerable weight in my determination.

4.         Length of Time Violation
Existed; Extent of the Violation

As
for the length of time, the violation existed for approximately 10 to 15
minutes while the cable was being repaired. ( See Tr.46:15–20, 48:20–49:7,
56:24–57:7, 108:5–9; G. Ex. 2, 3) This was a relatively short window of time in
which the shuttle car cable could be re-energized, and I therefore find it to
be a mitigating factor. However, I accord this factor little weight, given the
high degree of danger created by the violation and the direct involvement and
knowledge of the mine superintendent.

The
extent of the violation is that it posed a risk of fatal injury to the two miners
repairing the shuttle car power cable. [5]
(Tr.58:11–24, 108:3–4) Considering the high degree of danger but limited period
of exposure to that danger, I find the extent of the violation to be neither
aggravating nor mitigating. I therefore accord it nominal weight in my
determination.

5.         Notice That
Greater Efforts Are Necessary for Compliance;

Abatement of the
Violation

The two remaining unwarrantable failure
factors are less relevant. The Secretary concedes that Newtown was not contemporaneously
cited for 30 C.F.R. § 75.511 or otherwise put on notice by MSHA that greater
efforts were required for compliance. (Sec’y Post-Hr’g Br. at 21) The Secretary’s
argument that Herndon had notice due to his training as a certified electrician
is misplaced: his training goes to his knowledge of the violation. Newtown did
not have notice. I therefore find this factor mitigating but accord it minimal weight,
as any tendency to mitigate is far outweighed by the involvement and knowledge of
a supervisor, imputed to Newtown.

Finally, the record establishes that no abatement
efforts were made prior to the citation’s issuance. When Herndon discovered
that the power cable would require electrical repairs, he had an opportunity to
correct the improper lockout by alerting Richardson that the lock needed to be replaced.
He failed to act. I find his failure to act an aggravating factor in light of
his knowledge of the violation, but accord it minimal weight in comparison to
the other aggravating factors discussed.

In
reaching my unwarrantable failure determination, I note that the Commission

found
insufficient evidence to support the remaining mitigating considerations argued
by Newtown, which I see no need to repeat here. [6]
38 FMSHRC at 2041–44, 2046–48. On remand, I find that the short time the violation
existed and the lack of notice to Newtown were mitigating factors. Nevertheless,
those factors are greatly outweighed by the high level of danger, the direct
involvement of the mine superintendent, and his knowledge that he was violating
the regulation. Upon weighing all the evidence as a whole, I conclude that the violation
of section 75.511 was an unwarrantable failure by Newtown to comply with a
mandatory health or safety standard.

C.
       Penalty

When assessing a civil
penalty, section 110(i) of the Mine Act requires that I consider six criteria:
(1) the operator’s history of previous violations; (2) the appropriateness of
the penalty relative to the size of the operator’s business; (3) the
operator’s negligence; (4) the penalty’s effect on the operator’s ability to
continue in business; (5) the violation’s gravity; and, (6) the demonstrated
good faith of the operator in attempting to achieve rapid compliance after
notification of a violation. 30 U.S.C. § 820(i) .

The parties stipulated to the operator’s
history of previous violations, the size of its business, and its good faith in
rapidly abating the violation. (Sec’y Pre-Hr’g Rep., Stip. 9, 10) Newtown further
stipulated that any resulting penalty will not affect its ability to remain in
business. (Sec’y Pre-Hr’g Rep., Stip. 5) The Commission determined the
violation was S&S, and characterized the gravity as high, that is, reasonably
likely to result in a potentially fatal injury to one miner. 38 FMSHRC at 2049–50.
The Commission also concluded that Newtown demonstrated high negligence based
on the involvement of a supervisor who should have known, as a certified
electrician, that he was violating federal safety regulations. The Commission’s
findings are the law of the case, and I have further determined that the
violation was an unwarrantable failure to comply with a mandatory health or
safety standard. See E. Ridge Lime Co ., 21 FMSHRC 416, 421–22 (Apr. 1999). In light of
the foregoing, I conclude that a penalty of $7,578.00 is appropriate for
Citation No. 8110086.

III. ORDER

WHEREFORE , it is hereby ORDERED
that Citation No. 8110086 be AFFIRMED as written. It is further ORDERED
that Newtown PAY a penalty of $7,578.00 within forty (40) days of the date
of this decision on remand.

/s/
L. Zane Gill

L.
Zane Gill

Administrative
Law Judge

Distribution:

Christopher
D. Pence, Esq.

Hardy
Pence PLLC

P.
O. Box 2548

Charleston,
WV 25329-2548

Benjamin
D. Chaykin, Esq.

Robert
S. Wilson, Esq.

Office
of the Solicitor

U.S.
Department of Labor

201
12th Street South, Suite 401

Arlington,
VA 22202-5450

[1] The S&S terminology is taken from section 104(d)(1)
of the Mine 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.”

[2] The  unwarrantable  failure
terminology is taken from section 104(d)(1) of the Mine 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.”

[3] A cathead is
the “connecting plug” through which an electrical cable is attached to a
receptacle at a power station. (Tr.15:15–24, 17:15–24)

[4] The Commission found
insufficient evidence to support Newtown’s assertion that miners approaching
the power center could be warned away by Herndon, at the shuttle car,
regardless of the distance or visibility. 38 FMSHRC at 2043.

[5] On appeal to
the Commission, the Secretary raised the argument that the long-term
implications of Herndon’s attitude towards this violation should be considered,
and suggested that continuing violations were likely. (Sec’y Pet. for Discretionary
Review at 9) My review of the record does not convince me that this was an
ongoing problem at Newtown, as opposed to a temporary lapse of judgment by
Herndon.

[6] Newtown
has consistently asserted that Herndon acted in a good-faith attempt to comply
with the inspector’s request when he de-energized the cathead but left the key
in the lock. (Resp’t Post-Hr’g Br. at 16.) While the Commission addressed related
claims in the context of its S&S and negligence determinations, I feel
obligated to directly address Newtown’s assertion as an unwarrantable failure
defense. The Commission has previously held that an operator’s good faith “objectively
reasonable” belief that cited conduct complied with the law is a defense to an
unwarrantable failure. IO Coal , 31 FMSHRC at 1357 – 58 (citation omitted). Here, however, the Commission determined
that Herndon “ failed to demonstrate good faith because he did
not inform Richardson that he was unable to procure a functional lock.” 38
FMSHRC at 2047–48. Furthermore, as noted above, Herndon did not have a
reasonable belief that his conduct complied with the standard, as he is a
certified electrician and should have known that his repairs constituted
“electrical work.” Because the violation did not result from Herndon’s reasonable
good faith belief that his conduct complied with section 75.511, I reject
Newtown’s “good faith” argument as a defense or mitigation of its conduct.