Local Union 5817, UMWA v. Monument Mining Corporation

Plain-English summary

The United Mine Workers sought compensation under Mine Act section 111 for miners idled by a withdrawal order issued after Monument Mining violated the blasting precaution standard at Island Creek's No. 1 Surface Mine. The Commission held that Monument, the independent contractor that controlled the blasting and was cited for the violation, alone owed the compensation, and that Island Creek was not liable on these facts. The majority affirmed the ALJ's order requiring Monument to pay the claims, even though Monument was no longer in business. Commissioner Lastowka dissented, reasoning that Island Creek was also an operator under the Mine Act and should share liability.

Decision snapshot

• Governing provisions: 30 U.S.C. § 821; 30 U.S.C. § 814(d)(2); 30 C.F.R. § 77.1303(j)
• Outcome: The Commission affirmed the ALJ's decision holding Monument alone liable for the idled miners' section 111 compensation claims.
• Key point: For section 111 compensation, the Commission majority focused on the operator responsible for the conditions or violation underlying the withdrawal order.

Full text (FMSHRC public release)

FMSHRC-WDC
FEB 27, 1987

LOCAL UNION NO. 5817,
DISTRICT 17, UNITED MINE
WORKERS OF AMERICA (UMWA)

  v.              Docket No. WEVA 85-21-C

MONUMENT MINING CORPORATION
and ISLAND CREEK COAL
COMPANY

BEFORE: Ford, Chairman; Backley, Doyle, Lastowka, and Nelson,
Commissioners

              DECISION

BY: Ford, Chairman; Backley, Doyle, and Nelson,
Commissioners

This proceeding arises under the Federal Mine Safety and

Health Act of 1977, 30 U.S.C. § 801 et seq. (1982) (the "Mine
Act"). The question presented is whether the mine owner as well as
its independent contractor may be held liable for a compensation
claim under section 111 of the Mine Act, 30 U.S.C. § 821, when
the compensation claim arises from a violation of a mandatory
safety standard committed solely by its independent contractor.
Commission Administrative Law Judge George A. Koutras concluded
that only the contractor could be held liable in this instance and
dismissed the idled miners' compensation complaint against the mine
owner. 7 FMSHRC 1519 (September 1985) (ALJ). For the reasons that
follow, we affirm.

The parties waived a hearing and stipulated to the facts in

this case. Island Creek Coal Company ("Island Creek") owns the
No. 1 Surface Mine located in Holden, West Virginia. At the time
the miners were ordered to be withdrawn from the mine, Monument

Mining Corporation ("Monument"), an independent contractor, was
party to a five-year contract with Island Creek pursuant to which
it was to operate the mine. Under the contract, Monument had "full
and complete control of the work to be performed" at the mine. The
miners were employees of Monument. Island Creek had no control over
Monument's employees or its mining operations, except as necessary
to protect Island Creek's property and to ensure conformity with
its mining plans.

On August 1, 1984, two and one-half months before Monument

unilaterally terminated its contract with Island Creek, an inspector
of the Department of Labor's Mine Safety and Health Administration
("MSHA") issued Monument an order of withdrawal, pursuant to section
104(d)(2) of the Mine Act, 30 U.S.C. § 814(d)(2), withdrawing the
miners from the pit area of the No. 1 Surface Mine. The order alleged
a violation of 30 C.F.R. § 77.1303(j), a mandatory safety standard
requiring special precautions when blasting is done at surface mining
areas in close proximity to underground operations.

Monument performed and wholly controlled the blasting that

resulted in the issuance of the withdrawal order. Island Creek
had no involvement in the planning or execution of the blasting.
Monument abated the violative condition in approximately 48 hours.
As a result of the withdrawal order, the affected miners were idled
from 6:45 a.m., August 2, 1984, until 5:30 a.m., August 4, 1984.
Monument filed a notice of contest of the withdrawal order. Monument
failed to participate in that proceeding, and its notice of contest
was dismissed. Monument Mining Corp., 7 FMSHRC 232 (February
1985) (ALJ).

On October 30, 1984, Local Union No. 5817, District 17 of the

United Mine Workers of America ("UMWA" or "Union"), filed a complaint
against Monument seeking compensation, pursuant to section 111 of the
Mine Act, on behalf of the miners idled by the withdrawal order.

Section 111 states in part:

 [1] If a coal or other mine or area of such mine is
 closed by an order issued under section [103] ...,
 section [104] ... or section [107] of this [Act],
 all miners working during the shift when such order
 was issued who are idled by such order shall be
 entitled, regardless of the result of any review of
 such order, to full compensation by the operator at

the regular rates of pay for the period they are
idled, but for not more than the balance of such shift.
[2] If such order is not terminated prior to the next
working shift, all miners on that shift who are idled
by such order shall be entitled to full compensation
by the operator at their regular rates of pay for the
period they are idled, but for not more than four hours
of such shift.
[3] If a coal or other mine or area of such mine is closed
by an order issued under section [104] ... or section [107]
of this [Act] for a failure of the operator to comply
with any mandatory health or safety standards, all

Monument failed to answer the UMWA's complaint or to respond to

its interrogatories. On February 4, 1985, the judge issued a show
cause order directing the parties to show why Monument should not be
held in default and a summary decision in favor of the UMWA issued.
Monument did not respond to the judge's order. Also, by this time
Monument had ceased mining operations at the No. 1 Surface Mine.

Subsequent to the judge's show cause order, the UMWA learned

that the No. 1 Surface Mine was owned by Island Creek. Based on
this information, the Union moved to amend its complaint by adding
Island Creek as a respondent. The motion was granted. By agreement
of the UMWA and Island Creek, this proceeding was submitted to the
judge on stipulations and briefs.

 In his decision, the judge found that Island Creek "was in

no way responsible for the violative conditions which gave rise
to the withdrawal order idling the miners." 7 FMSHRC at 1531.
The judge held that liability for compensating the idled miners
attached to Monument, the independent contractor responsible for
the violation, and he dismissed the UMWA's complaint against Island
Creek. Id. The judge relied on Commission precedent to the effect
that, in appropriate circumstances, an independent contractor may
be held solely liable for the violations it commits. 7 FMSHRC at
1530-31. Finding Monument in default, the judge concluded, "While it
is unfortunate that Monument is no longer in business, I find no basis
for the UMWA's attempts to hold Island Creek liable for the payment
of these claims." 7 FMSHRC at 1531. Accordingly, the judge ordered
Monument to pay the compensation claims filed against it by the UMWA.
Id. The Commission granted the UMWA's petition for discretionary
review, and we subsequently heard oral argument in this matter.

 On review the UMWA argues that because a mine owner may be

held liable for the violative actions of its independent contractor,
it also may be held responsible for remedying those actions, including
paying compensation to miners idled as a result of a withdrawal order
even though the mine owner had no connection with the independent
mining operator. Arguing for joint and several liability in this
case, the Union candidly states, "[T]he purposes of the Act were best
achieved when the UMWA sought relief from the operator who had the
deepest pocket...." We disagree. The plain meaning of section 111 of
the Mine Act, as well as the overall purpose of the Act, establish
that the "operator" responsible for the conditions or violations underlying
the section 111 claim is the sole operator responsible for
compensating the idled miners.

 Section 111 of the Mine Act entitles miners idled by certain

withdrawal orders to compensation "by the operator." The third
sentence of section 111 links compensation to an idling withdrawal
order issued "for a failure of the operator to comply with any
mandatory health or safety standards." Consistent with our holdings
in Local Union No. 781, Dist. 17, UMWA v. Eastern Assoc. Coal Corp.,
3 FMSHRC 1175, 1178 (May 1981) and Local Union 1889, Dist. 17, UMWA
v. Westmoreland Coal Co., 8 FMSHRC 1317, 1324 (September 1986), we
adhere to the principle that determinations of compensation under
section 111 must focus upon the conduct of the operator responsible
for the conditions of the mine. We find no statutory basis upon which
section 111 compensation should be distinguished from the liability
for the underlying health and safety violation.

Moreover, section 2(c) of the Mine Act, 30 U.S.C. § 801(c),

embodies congressional policy "to prevent death and serious
physical harm" from occurring in the nation's mines. This legislative
purpose is best effectuated if the operator responsible for a
violation is also held responsible for any compensation claim of its
employees arising from such violation. Thus, the result we reach here
today furthers the Act's policy by reinforcing that the independent
contractor must make every effort to create and maintain a hazard-free
mine environment, and insures that he will not be able to avoid the
remedial or compensation consequences of citations and orders by
shifting them to the mine owner.

In the instant case Monument alone was cited for the underlying

violation. The UMWA has stipulated that Monument was solely
responsible for performing and controlling the blasting practices that
led to the issuance of the withdrawal order. The judge determined
that the Secretary properly charged Monument with the underlying
violation. He considered and applied the relevant case law regarding
independent contractor/owner liability and properly concluded that
Monument alone was responsible for the underlying violation giving
rise to the subject withdrawal order.

 Accordingly, the judge's decision that Monument alone is

liable for the idled miners' section 111 compensation claim is
affirmed.

               Ford B. Ford, Chairman

               Richard V. Backley, Commissioner

               Joyce A. Doyle, Commissioner

               L. Clair Nelson, Commissioner

Commissioner Lastowka, dissenting:

The Commission and the courts often have been called upon to

address issues concerning a mine operator's liability for violations
of the Mine Act committed by independent contractors. The present
case, however, presents for the first time a question concerning a
mine operator's liability for compensation of miners prevented from
working as a result of a violation committed by its contractor. In
my opinion my colleagues reach an erroneous conclusion on the novel
and important issue presented. For the reasons that follow, I
respectfully dissent from their affirmance of the administrative law
judge's decision. In my opinion, the judge's decision should be
reversed and the case remanded for further proceedings.

In section 111 of the Mine Act, 30 U.S.C. § 821, Congress

mandated that certain limited compensation be paid by mine operators
to miners idled from working due to withdrawal orders issued by MSHA
inspectors because of unsafe conditions at the mine. Section 111's
grant of compensation to miners is but one component of the Mine Act's
comprehensive regulatory scheme for achieving safe working conditions
in the nation's mines. As such, section 111 must be interpreted in
harmony with the other provisions of the Act with which it is
interwoven. Rather than harmonizing the interpretation of the
various statutory provisions to determine the outcome of the present
case, the practical effect of the majority decision is to relegate
the statute to a role subservient to a private contractual arrangement
structured by the mine operator.

The starting point for resolving the issue before us must be
the recognition of the well settled principle that as a matter of law
under the Mine Act an operator of a mine is liable, regardless of
fault, for violations of the Act committed by independent contractors
hired by it. This principle has been stated repeatedly and clearly.
Harman Mining Corp. v. FMSHRC, 671 F.2d 794 (4th Cir. 1981); Cyprus
Industrial Minerals Co. v. FMSHRC, 664 F.2d 1116 (9th Cir. 1981);
Old Ben Coal Co., 1 FMSHRC 1480 (October 1979); aff'd. No. 79-2367,
D.C. Cir. (December 9, 1980); Phillips Uranium Corp., 4 FMSHRC 549
(April 1982); Calvin Black Enterprises, 7 FMSHRC 1151 (August 1985).
See also Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 535
(D.C. Cir. 1986). Cf. Bituminous Coal Operators' Assoc., 547 F.2d
240 (4th Cir. 1977); Republic Steel Corp., 1 FMSHRC 5 (April 1979)
(identical holdings under predecessor 1969 Coal Act). Although the
majority decision purports to be guided by the decisions in Old Ben,
Phillips Uranium and Calvin Black, it ignores the primary and clear
holding in those cases concerning the Act's liability without fault
structure. Instead, it focuses on the separate discussion in those
decisions addressing a very distinct issue, i.e., the scope of
Commission review of the Secretary of Labor's actions in initiating

enforcement against mine operators for their contractors' violations.
As to that issue it has been consistently recognized in the cited
cases, and I agree, that secretarial enforcement solely against mine
operators for violations committed by their independent contractors,
to the exclusion of the contractors themselves, is an inefficient
manner of achieving the Act's purposes and runs counter to the clear
intent of Congress to have contractors directly subjected to the Act's
requirements. Rather direct enforcement against contractors who
create hazardous conditions, whose employees are exposed to the
hazards, and who are in the best position to immediately secure
abatement is the most efficient and effective enforcement course.
In fact, subsequent to Old Ben the Secretary adopted a regulatory
approach of enforcement directly against contractors that create and
control violative conditions, while expressly reserving for use in
appropriate circumstances his clear legal authority to also pursue
enforcement against mine operators for their contractors' violations.
45 Fed. Reg. 44,494 (1980).

The case law set forth above makes clear, however, that an
operator who contracts out work at a mine site is jointly and
severally responsible and liable for violations of the Mine Act
committed by its contractor. E.g., Harman Mining Corp., 671 F.2d
at 797; Old Ben, 1 FMSHRC at 1483. The majority further states that
it "adhere[s] to the principle that determinations of compensation
under section 111 must focus upon the conduct of the operator
responsible for the conditions of the mine." Slip op. at 4. The
cited case law makes clear, however, that a mine operator such as
Island Creek is responsible for conditions at its mine regardless
of whether it contracts out work at the mine. E.g., Cyprus Industrial
Minerals Co., 664 F.2d at 1119-20, citing Republic Steel Corp.,
1 FMSHRC 5, 11 (April 1979). Finally, the majority states that the
administrative law judge "considered and applied the relevant case
law regarding independent contractor/owner liability and properly
concluded that Monument alone was responsible for the underlying
violation giving rise to the subject withdrawal order." Slip op. at 4
(emphasis added). As stated, however, the relevant case law in fact
places joint and several liability for the underlying violation on
Island Creek. Simply stated, the majority appears to mistakenly
assume that there is only one "operator" of a mine. The law is clear
that where a contractor performs work for a mine operator the
contractor and the mine operator are both "operators" of the mine
within the meaning of the Act. Therefore, to the extent that the
majority's holding is based on the belief that under the Mine Act
Island Creek is not liable or responsible for the violation of the
Mine Act committed by its contractor it is fundamentally flawed.

Given the fact that Island Creek is an operator of the No. 1

Surface Mine and given the resulting conclusion that as a matter of
law it is responsible for violations of the Mine Act committed by its
contractors at the mine, it accordingly has a residual liability
under section 111 for compensation due miners as a result of the
violation of the Act. Section 111 contains no special definition
of the term "operator" limiting its application exclusively to
independent contractors in situations where the mine operator chooses
to employ contractors to undertake mining activities. Therefore,
the same general principle of joint and several liability previously
discussed applies equally in the section 111 compensation context.
The Commission recently has eschewed a narrow, purpose-defeating
interpretation of section 111. E.g., Local Union 1889, District 17,
UMWA v. Westmoreland Coal Co., 8 FMSHRC 1317, 1323-24 (September
1986). A similar approach is required here.

To the extent that the majority's conclusion may be influenced
by an underlying concern for a perceived "unfairness" in adding
Island Creek as a respondent at the present stage of the proceedings,
those concerns should be allayed by the record and certainly could be
accommodated in a remand to the judge. The contract between Island
Creek and Monument reveals that Island Creek, as principal, carefully
protected its interests in structuring the terms of its contractual
mining arrangement with Monument. Exhibit A. For example, the
contract provides that:

 Contractor shall be solely responsible for and shall
 fully indemnify and forever defend Owner from and
 against any and all liability for any
 citation or any withdrawal order issued pursuant to
 the Federal Mine Safety & Health Act of 1977, as the
 same may be amended or superseded, and any state health
 and safety laws, and their respective regulations and
 standards, relating to the operations and work performed
 under this agreement. Contractor shall be solely
 responsible for abatement of the alleged violation or
 danger and shall be solely liable for any civil or
 criminal penalty assessed pursuant to and as a result
 of said citation or order, whether assessed against
 Contractor or Owner. In the event any such penalty
 is assessed against and paid by Owner, Contractor shall
 promptly reimburse Owner for said penalties, and Owner
 may deduct and withhold from the payments due to contractor
 under this agreement an amount sufficient to cover any
 penalties which are assessed against Owner, and the costs,
 including reasonable attorney's fees, for defending any
 actions brought to assess and collect said penalties.

Exhibit A, Article 13. Furthermore, the contract required the
giving of 90 days notice prior to termination of the contract by
either party (Article 9) and also required Monument to deposit
$40,000.00 with Island Creek in an escrow account. Exhibit A,
Article 21. Thus, any monetary damages suffered by Island Creek as a
result of its legal liability for its contractor's violations of the
Mine Act were anticipated and provided for. To the extent that Island
Creek might be considered procedurally harmed by Monument's default
prior to a hearing on the merits of its challenge to the validity of
the withdrawal order giving rise to the compensation claim, the
Commission certainly possesses the discretion in these circumstances
to direct the administrative law judge to broaden the scope of the
compensation hearing to entertain any available substantive challenges
to the validity of the underlying withdrawal order that would affect
an award of compensation under section 111.

For these reasons, I dissent from the affirmance of the
administrative law judge's decision. I would reverse and remand
for further proceedings.

              James A. Lastowka, Commissioner

Distribution

Joyce Hanula, Legal Asst.
United Mine Workers of America
900 15th St., N.W.
Washington, D.C. 20005

Marshall S. Peace, Esq.
Island Creek Corporation
2355 Harrodsburg Road
P.O. Box 11430
Lexington, Kentucky 40575

Administrative Law Judge George Koutras
Federal Mine Safety & Health Review Commission
5203 Leesburg Pike, Suite 1000
Falls Church, Virginia 22041