Mountain States Contractors, LLC v. Perez, 15-3782

• Citation: 825 F.3d 274
• Decision Date: 03 June 2016
• Docket Number: No. 15-3782,15-3782
• Parties: Mountain States Contractors, LLC, Petitioner, v. Thomas Perez, Secretary of Labor, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

825 F.3d 274

Mountain States Contractors, LLC, Petitioner

v.Thomas Perez, Secretary of Labor, Respondent.

No. 15-3782

United States Court of Appeals, Sixth Circuit.

Argued: March 9, 2016

Decided and Filed: June 3, 2016

ARGUED: Howard M. Kastrinsky, King & Ballow, Nashville, Tennessee, for Petitioner. Juan C. Lopez, United States Department of Labor, Washington, D.C., for Respondent. ON BRIEF: Howard M. Kastrinsky, Michael D. Oesterle, Laura M. Mallory, King & Ballow, Nashville, Tennessee, for Petitioner. Juan C. Lopez, United States Department of Labor, Washington, D.C., for Respondent.

Before: DAUGHTREY, MOORE, and STRANCH, Circuit Judges.

OPINION

JANE B. STRANCH, Circuit Judge.

During construction of a bridge over the Cumberland River, a crane's boom cable snapped and the crane collapsed, shattering the glass enclosing the operator's compartment and damaging a vehicle on the adjacent highway. Mountain States Contractors, LLC challenges the affirmance of a citation and penalty issued against it by the Occupational Safety and Health Commission (OSHC) following the incident. At a trial on the merits, the Administrative Law Judge determined that Mountain States had committed a willful violation of the wire rope inspection standard set forth in the Occupational Safety and Health Administration Act of 1970 (the Act). The ALJ found a violation of the Act because, prior to the accident, the crane's boom cable had “visible broken wires” within the meaning of the provision requiring repair or replacement before further use, and that Mountain States had knowledge of this deficiency. For the following reasons, we deny the petition for review.

I. BACKGROUND

The Tennessee Department of Transportation engaged Mountain States, a construction contractor based in Nashville, Tennessee, to build two bridges over the Cumberland River at its intersection with Highway 109 in Gallatin, Tennessee. (Appendix at 9.)¹

On May 21, 2013, the boom cable of a Terex HC 165 crane snapped while the crane operator was “clamming,” or excavating material from under water, causing the boom—the extendable overhead arm of the crane controlled by the load-bearing wire boom cable—to collapse onto the adjacent highway. (Id. at 10-11, 13.) As the cable broke under tension, it whipped back to shatter the windows of the crane operator's cab, (Id. at 29-30), and the boom hit a passing vehicle, (Supp. Appendix at 1177.) Though no person was injured, the subsequent Occupational Safety and Health Administration (OSHA) investigation determined that at least four people were exposed to risk as a result of the accident. (Appendix at 156.) After completion of the investigation, a complaint was filed against Mountain States alleging, among other things, violation of the wire rope inspection standard, 29 C.F.R. § 1926.1413(a)(2)(ii)(A). (Id. at 90.)

A. Wire Rope Inspection Standard and Worksite Safety Policies

The Act requires that employers “comply with occupational safety and health standards promulgated under this chapter.” 29 U.S.C. § 654(a)(2). Subpart CC of the Act pertains to the use of cranes in construction, including the inspection standard for “wire rope” like the boom cable at issue. 29 C.F.R. § 1926.1401 et seq. The standard requires that a “competent person” perform “a visual inspection prior to each shift the [crane] is used” that includes “observation of wire ropes ... that are likely to be in use during the shift for apparent deficiencies.” 29 C.F.R. § 1926.1413(a)(1). A “competent person” is “one who is capable of identifying existing and predictable hazards in the surroundings or working conditions which are ... hazardous, or dangerous to employees, and who has authorization to take prompt corrective measures to eliminate them.” 29 C.F.R. § 1926.1401.

The boom cable, which runs through steel sheaves to adjust the height of the boom, is composed of multiple steel wires wound into strands and wrapped around a core. Id. According to Category II of the wire rope inspection standard, the crane must be taken out of service for repair if a cable has “visible broken wires” defined as either (1) “[s]ix randomly distributed broken wires in one rope lay,” or (2) “three broken wires in one strand in a rope lay.” 29 C.F.R. §§ 1926.1413(a)(2)(ii)(A)(1), (a)(4). These conditions are referred to as the “out-of-service criteria” or the “3 and 6 criteria.” (Appendix at 21, 28.) A “rope lay” is “the length along the rope in which one strand makes a complete revolution around the rope.” 29 C.F.R. § 1926.1413(a)(2)(ii)(A)(1).

Mountain States considered its crane operators “competent persons” within the meaning of the Act and delegated the task of pre-shift inspections of the crane to them. (Petitioner Br. at 10.) The crane operators were empowered to remove a crane from service pursuant to the requirements of the Act and in conformity with Mountain States' policy that “equipment found to have defects in any critical area which could affect the safe operation of the equipment shall be tagged accordingly and taken out of service until proper repairs have been made.” (Appendix at 222.)

The crane operators documented the results of their inspections on a Daily Inspection Form. The Form contained a checklist for components of the crane separated into two sections based on whether the component could be inspected in a “walk around inspection” or required the operator to “climb up onto machine.” (Id. at 171-99). As the operator inspected each component on the list, he checked one of three options defined in the Form's “explanation of terms” section: (1) “satisfactory” if the item was “in good working condition,” (2) “adjust” if the “item needs minor adjustment at first opportunity,” and (3) “repair” if the item “needs to be repaired before further operation .” (Id. ) (emphasis added). The Form also included a “remarks or comments” section for notes on components that needed to be replaced, specific care instructions and the like (e.g., “2nd line needs to be replaced. Crane fully greased.”) (Id. at 171.) An instruction to “submit yellow copy [of Daily Inspection Form] to project office at end of each week” appeared at the bottom of the Form. (Id. at 171-99.) In practice, however, the Forms were maintained in the inspection book in the crane's cab until full and then they were shipped to a storage facility without any review. (Id. at 19-20, 28, 164.)

Beyond these measures pertaining specifically to the crane, other safety practices instituted by Mountain States included daily “pre-work huddles” during which supervisors reviewed the day's tasks and related safety issues, (id. at 572), and weekly safety training sessions, (id. at 54, 412.) Weekly in-house site safety audits were supplemented by regular safety audits conducted by a third party. (Id. at 728.)

B. The OSHA Inspection and Trial

The accident was reported to OSHA, which launched an investigation of the worksite led by Compliance Safety and Health Officer Michelle Sotak. (Id. at 47; Supp. Appendix at 1145.) At the conclusion of the investigation, Mountain States was issued three Citations and Notice of Penalty—the first citation alleged a serious violation of the Act, the second a willful violation, and the third an “other-than-serious” violation that carried no financial penalty. (Appendix at 94-96.) A complaint was filed with the OSHC seeking affirmance of the three citations. (Id. at 90.) Mountain States timely filed a Notice of Contest regarding the first two citations and their associated monetary penalties.² (Id. at 122-23.) Prior to the trial on September 16 to 18, 2014, the parties reached a settlement with respect to the first citation. (Id. at 123.) Thus, the only issue considered by the ALJ was the second citation alleging a willful violation: “Hwy 109 @ Cumberland River—On or about 5/21/13, damaged cables were not removed from service.” (Id. at 95.) See 29 C.F.R. § 1926.1413(a)(4)(ii)(B) (stating that, in the presence of a Category II deficiency, “operations involving use of the wire rope in question must be prohibited until ... [t]he wire rope is replaced.”).

After the three-day trial on the merits, the ALJ found that the Secretary of Labor had satisfied the burden to show the alleged violation by a preponderance of the evidence. The ALJ affirmed the second citation and assessed a penalty of $60,000.00 on Mountain States. (Appendix at 169-70.) On appeal, Mountain States asserts that the record does not support a finding that the Secretary met the second and fourth conditions to show a prima facie violation of the Act. (Petitioner Br. at 17.) Moreover, Mountain States contends that the ALJ erroneously included “cracked” or “fractured” wires within the definition of a Category II deficiency and also misinterpreted the meaning of “competent person” as used in the wire rope inspection standard. (Id. at 13-14.)

II. STANDARD OF REVIEW

This court's review of decisions reached by the OSHC is a limited one. The ALJ's determination will be set aside if it is “arbitrary, capricious, an abuse of discretion, or contrary to law.” R.P. Carbone Constr. Co. v. Occupational Safety & Health Review Comm'n , 166 F.3d 815, 818 (6th Cir. 1998). We accept the ALJ's findings of fact if they are “supported by substantial evidence on the record considered as a whole.” Id. ; see also Danis – Shook Joint Venture XXV v. Sec'y of Labor , 319 F.3d 805, 809 (6th Cir. 2003). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Chao v. Occupational Safety and Health Review Comm'n , 540 F.3d 519, 528 (6th Cir. 2008) (internal citation omitted). It is less than a preponderance of the evidence, but “more than a scintilla.” R.P. Carbone Constr. Co. , 166 F.3d at 818.

To establish a prima facie violation of the Act, the Secretary of Labor must show by a preponderance of the evidence that “(1) the cited standard applies to the facts, (2) the requirements of the standard were not met, (3)...