Douglas R. Rushford

Plain-English summary

A worker died after a fuel-truck wheel rim exploded during tire inflation at Douglas R. Rushford Trucking's quarry. The ALJ found a significant-and-substantial and unwarrantable violation of the rule requiring a stand-off inflation device, but assessed a $3,000 penalty instead of the Secretary's proposed $25,000. The Commission vacated the penalty assessment because the ALJ did not make sufficiently specific findings explaining the six statutory penalty criteria and the large reduction. It remanded for a new assessment and additional findings, including a review of the operator's violation history.

Decision snapshot

• Cited standard: 30 C.F.R. § 56.14104(b)(2)
• Outcome: The penalty assessment was vacated and remanded for reassessment.
• Key point: A penalty decision must explain the findings on each statutory criterion, especially when it substantially reduces the proposed penalty.

Full text (FMSHRC public release)

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

                                      May 25, 2000

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. YORK 99-39-M
:
DOUGLAS R. RUSHFORD TRUCKING :

BEFORE: Jordan, Chairman; Marks, Riley, Verheggen, and Beatty, Commissioners

                                       DECISION

BY THE COMMISSION:

    This civil penalty proceeding arises under the Federal Mine Safety and Health Act of

1977 (“Mine Act” or “Act”), 30 U.S.C. § 801 et seq. (1994). At issue is Commission
Administrative Law Judge Gary Melick’s decision assessing a penalty against Douglas R.
Rushford Trucking (“Rushford”) for a violation of 30 C.F.R. § 56.14104(b)(2), as charged in a
citation issued by the Department of Labor’s Mine Safety and Health Administration (“MSHA”)
in connection with a fatal accident that occurred at Rushford’s Seymour Road Pit. 22 FMSHRC
74, 76-78, 80 (Jan. 2000) (ALJ). The Commission granted the Secretary’s petition for
discretionary review challenging the judge’s penalty assessment. For the reasons that follow, we
vacate the judge’s penalty assessment and remand for reassessment.

   Our decision in this matter is one of three decisions we are issuing today regarding the

Commission’s penalty assessment authority under section 110(i) of the Mine Act, 30 U.S.C.
§ 820(i).1

   1
    The other decisions concerning Commission penalty assessments we are issuing today

are Hubb Corp., Docket No. KENT 97-302, and Cantera Green, Docket No. SE 98-141-M.

                                    22 FMSHRC 598

Page 2

                                             I.

                           Factual and Procedural Background

    Rushford Trucking operates the Seymour Road Pit in Clinton County, New York. S.

Pretrial Statement, Stipulations ¶ 1. On August 28, 1998, when Rushford employee Nile Arnold
attempted to inflate a tire on a fuel truck, the wheel rim exploded and struck Arnold in the head.
22 FMSHRC at 74-75. At the time, Arnold was not using a stand-off inflation device, nor was
there such a device available on the mine site. Id. at 75-76. On August 30, 1998, Arnold died as
a result of the injuries he sustained. Id. at 74.

   After conducting an investigation, MSHA charged Rushford with violating section

56.14104(b)(2), which requires that stand-off inflation devices be used “[t]o prevent injury from
wheel rims during tire inflation.” 30 C.F.R. § 56.14104(b)(2). MSHA also alleged that
Rushford’s violation was significant and substantial (“S&S”) and the result of Rushford’s
unwarrantable failure to comply with section 56.14104(b)(2).2 The agency proposed that the
Commission assess a penalty of $25,000 against Rushford. Pet. for Assessment of Civil Penalty,
Ex. A (May 24, 1999).

    The judge found the violation “proven as charged.” 22 FMSHRC at 76. He also found

the violation S&S and due to Rushford’s unwarrantable failure to comply with the cited standard.
Id. at 76-78. In his discussion of the violation, the judge also found Rushford grossly negligent.
Id. at 77-78. He based his unwarrantable failure and negligence findings on evidence that
Rushford “never bothered to obtain a copy of the health and safety regulations governing the
operation of [the] mine and the credible evidence that not only did the deceased fail to use an
appropriate device for protection during tire inflation but that no such device was available either
at the mine site . . . or at the mine shop.” Id. at 77. The judge also found “credible [MSHA]
Inspector Gadway’s testimony that mine owner Douglas Rushford did not even know what a
stand-off inflation device was.” Id. at 78.

   The judge made the following findings in support of his assessment of both a $3,000

penalty for the violation of section 56.14104(b)(2) and a $100 penalty for a violation of 30 C.F.R.
§ 50.10 not at issue here: “In assessing civil penalties herein I have also considered the
operator’s small size, lack of a history of recent violations, apparent good faith abatement and
absence of evidence that the penalties would affect its ability to stay in business.” Id. at 80.

   2
       The S&S terminology is taken from section 104(d)(1) of the Act, 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.” 30 U.S.C. § 814(d)(1). The unwarrantable failure
terminology is also taken from section 104(d)(1) of the Act, 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.” Id.

                                     22 FMSHRC 599

Page 3

                                             II.

                                        Disposition

     On appeal, the Secretary argues that the judge erred in failing to sufficiently explain how

he weighed the six statutory penalty criteria (S. PDR at 10-11),3 to explain his pronounced
departure from the Secretary’s penalty proposal (id.), and to make specific factual findings on
each of the individual penalty criteria (id. at 11). In its Statement in Opposition, Rushford argues
that, as to his penalty assessment, the judge “clearly took into account the six (6) statutory
penalty criteria and applied [the] same in reducing the penalty.” Opp. at 2. Rushford also argues
that the Secretary’s PDR should be dismissed because it was filed late and that review should not
be granted because the company already paid the penalty assessed by the judge. Id. at 2-3.

    The principles governing the Commission’s authority to assess civil penalties de novo for

violations of the Mine Act are well established. Section 110(i) of the Mine Act delegates to the
Commission “authority to assess all civil penalties provided in [the] Act.” 30 U.S.C. § 820(i).
The Act delegates the duty of proposing penalties to the Secretary. 30 U.S.C. §§ 815(a) and
820(a). When an operator notifies the Secretary that it intends to challenge a penalty, the
Secretary petitions the Commission to assess the penalty. 29 C.F.R. §§ 2700.28 and 2700.44.
The Act requires that, “[i]n assessing civil monetary penalties, the Commission shall consider”
the six statutory penalty criteria:

           [1] the operator’s history of previous violations, [2] the
           appropriateness of such penalty to the size of the business of the
           operator charged, [3] whether the operator was negligent, [4] the
           effect on the operator’s ability to continue in business, [5] the
           gravity of the violation, and [6] 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).

    In keeping with this statutory requirement, we have held that “findings of fact on the [six]

statutory penalty criteria must be made.” Sellersburg Stone Co., 5 FMSHRC 287, 292 (Mar.
1983), aff’d, 736 F.2d 1147 (7th Cir. 1984). Although findings on each of the criteria may be
entered by the Commission on review based on undisputed record evidence (see Sellersburg, 736

   3
      In our Direction for Review, we stated that we would consider the Secretary’s PDR as

her opening brief. We also gave Rushford leave to file a response to the Secretary’s PDR in
addition to the Statement in Opposition it filed February 24, 2000. Rushford filed no response.

                                     22 FMSHRC 600

Page 4

F.2d at 1153), this duty lies with the judge in the first instance, as is made clear in our Procedural
Rules. Rule 30(a) provides:

                   In assessing a penalty the Judge shall determine the amount
           of penalty in accordance with the six statutory criteria contained in
           section 110(i) . . . and incorporate such determination in a written
           decision. The decision shall contain findings of fact and
           conclusions of law on each of the statutory criteria and an order
           requiring that the penalty be paid.

29 C.F.R. § 2700.30(a). When reviewing a judge’s factual findings on the six penalty criteria, we
apply the substantial evidence test. 30 U.S.C. § 823(d)(2)(A)(ii)(I).

    Findings of fact on the penalty criteria are necessary to provide the respondent with notice

as to the basis upon which the penalty is being assessed. Sellersburg, 5 FMSHRC at 292. The
findings also provide the Commission and any reviewing court with the information they need to
accurately determine whether a penalty is appropriate. Id. at 292-93.

    Once findings on the statutory criteria have been made, a judge’s penalty assessment for a

particular violation is an exercise of discretion, which is bounded by proper consideration of the
statutory criteria and the deterrent purposes underlying the Act’s penalty assessment scheme. Id.
at 294. Although we review a judge’s penalty assessment under an abuse of discretion standard
(U.S. Steel Corp., 6 FMSHRC 1423, 1432 (June 1984)), in order for us to determine whether a
judge has properly considered the statutory criteria, the judge must provide a reasoned
explanation for his or her penalty assessment. As we have held in another context, “[a] judge
must analyze and weigh the relevant testimony of record, make appropriate findings, and explain
the reasons for his decision.” Mid-Continent Resources, Inc., 16 FMSHRC 1218, 1222 (June
1994).4

   An explanation is particularly essential when a judge’s penalty assessment substantially

diverges from the Secretary’s original penalty proposal. Sellersburg, 5 FMSHRC at 293. As we
noted in Sellersburg, without an explanation for such a divergence, “the credibility of the
administrative scheme providing for the increase or lowering of penalties after contest may be
jeopardized by an appearance of arbitrariness.” Id.; see also Unique Electric, 20 FMSHRC 1119,
1123 n.4 (Oct. 1998); Dolese Bros. Co., 16 FMSHRC 689, 695 (Apr. 1994).

   The majority of cases decided by this Commission and its judges demonstrate that,

generally, our judges’ penalty assessments are made in accordance with these principles.
Nevertheless, we reiterate them at some length here because, as we also note in the other

   4
      See also Anaconda Co., 3 FMSHRC 299, 299-300 (Feb. 1981) (“Our function is

essentially one of review. Without findings of fact and some justification for the conclusions
reached by the judge, we cannot perform that function effectively.”).

                                     22 FMSHRC 601

Page 5

decisions issued today, in recent years we have found it necessary to remand several cases due to
penalty assessments that lacked the requisite findings on the section 110(i) penalty criteria.

    The instant proceeding is such a case as it presents us with a penalty assessment that lacks

the precision necessary for appellate review. We find that the judge erred in several respects.
First, he neglected to make findings on all of the section 110(i) criteria. Specifically, he made no
explicit finding on the gravity of Rushford’s violation of section 56.14104(b)(2).5 He must do so
on remand.

     Second, although we agree with the Secretary that a judge “is not required to provide a

lengthy or exhaustive analysis of the evidence” when assessing a penalty under the Mine Act (S.
PDR at 8 n.3), a penalty assessment must provide enough explanation and analysis to enable
meaningful appellate review. Here, although the judge stated he “considered the operator’s small
size, lack of a history of recent violations, apparent good faith abatement and absence of
evidence that the penalties would affect its ability to stay in business” (22 FMSHRC at 80), he
neglected to explain how his consideration of these factors affected his penalty assessment —
leaving us with no rationale to examine in determining whether the judge properly considered the
statutory criteria and the deterrent purposes of the Act. On remand, the judge must provide a
more complete explanation of his penalty assessment. If on remand the judge again decides that
a substantial reduction in the penalty proposed by the Secretary is warranted, he must explain any
such decision, especially in light of his finding of “gross negligence.”

    Regarding the judge’s finding that Rushford has a “lack of a history of recent violations”

(22 FMSHRC at 80), the record indicates that between 1993 and 1998, the company did not file
quarterly reports with MSHA as required under 30 C.F.R. § 50.30. Tr. I 239-41. Although the
Secretary asserts that the reason MSHA did not inspect the mine during the relevant period was
because of Rushford’s failure to file quarterly reports (S. PDR at 12), she offers inadequate
record support to substantiate this contention. If due in some way to the company’s failure to
meet a reporting requirement, Rushford’s lack of a history of violations certainly could not
properly be considered as a mitigating factor in a penalty assessment. Given that the record is
unclear on this point, however, we direct the judge on remand to examine all relevant evidence
on this issue, including whether any inspections occurred during this period and if not, the reason
why they were not conducted. He may also order the record to be reopened on this issue if
necessary. He must then enter a new finding on Rushford’s history of violations.

     We reject Rushford’s argument that the Secretary’s PDR was filed one day late and

should be dismissed. Opp. at 2-3. The Secretary’s PDR was timely filed on February 18, which
is thirty days after January 20, “the day from which the designated period [began] to run.”
29 C.F.R. § 2700.8. Rushford also argues that “it would clearly be prejudicial and unfair to the
Respondent to now grant a review . . . after [Rushford] has paid in full the penalties imposed.”

   5
       Such a finding is necessary despite the judge’s determination that the violation was

S&S.

                                     22 FMSHRC 602

Page 6

Opp. at 3. This argument lacks merit. The appeal provisions of the Mine Act are not superseded
by payment of a disputed penalty. See 30 U.S.C. § 823(d)(2)(A). Finally, Rushford raises
several factual issues in its Statement in Opposition to the Secretary’s PDR. Opp. at 2. The
factual contentions, however, are outside the scope of the grounds on which we granted review,
as set forth in the Secretary’s PDR, 30 U.S.C. § 823(d)(2)(A)(iii), and therefore we do not reach
them.

                                   22 FMSHRC 603

Page 7

                                          III.

                                     Conclusion

   For the foregoing reasons, we vacate the judge’s penalty assessment and remand for

reassessment consistent with this opinion.

                                       Mary Lu Jordan, Chairman




                                       Marc Lincoln Marks, Commissioner




                                       James C. Riley, Commissioner




                                       Theodore F. Verheggen, Commissioner




                                       Robert H. Beatty, Jr., Commissioner



                                  22 FMSHRC 604

Page 8

Distribution

W. Christian Schumann, Esq.
Office of the Solicitor
U.S. Department of Labor
4015 Wilson Blvd., Suite 400
Arlington, VA 22203

Thomas M. Murnane, Esq.
Stafford, Trombley, Owens & Curtis, P.C.
One Cumberland Avenue
P.O. Box 2947
Plattsburgh, NY 12901

Administrative Law Judge Gary Melick
Federal Mine Safety & Health Review Commission
Office of Administrative Law Judges
5203 Leesburg Pike, Suite 1000
Falls Church, VA 22041

                                 22 FMSHRC 605