Secretary of Labor v. Twentymile Coal Co.

• Decision Date: 07 July 2006
• Docket Number: No. 05-1124.,05-1124.
• Citation: 456 F.3d 151
• Parties: SECRETARY OF LABOR, Petitioner v. TWENTYMILE COAL COMPANY and Federal Mine Safety and Health Review Commission, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

456 F.3d 151

SECRETARY OF LABOR, Petitioner v. TWENTYMILE COAL COMPANY and Federal Mine Safety and Health Review Commission, Respondents.

No. 05-1124.

United States Court of Appeals, District of Columbia Circuit.

Argued February 14, 2006.

Decided July 7, 2006.

On Petition for Review of an Order of the Federal Mine Safety and Health Review Commission.

Jack Powasnik, Attorney, U.S. Department of Labor, argued the cause for petitioner. With him on the briefs was W. Christian Schumann.

Ralph Henry Moore II argued the cause for respondent Twentymile Coal Company. With him on the brief was Karen L. Johnston.

Before: RANDOLPH and GARLAND, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge.

This case represents the first time in more than twenty years¹ that the Federal Mine Safety and Health Review Commission has overturned a decision by the Secretary of Labor to cite the owner-operator of a mine, as well as its independent contractor, for safety violations committed by the contractor. This court has long recognized the Secretary's discretionary authority to cite the owner-operator, the independent contractor, or both for contractor violations. Because the Mine Act provides no meaningful standards against which to judge the Secretary's decisions regarding which party to cite, the Commission is generally without authority to review such decisions. We therefore grant the Secretary's petition for review and vacate the Commission's ruling.

I

The Mine Act requires the Secretary of Labor, acting through the Mine Safety and Health Administration (MSHA), to promulgate mandatory safety and health standards for the mining industry and to conduct regular mine inspections. 30 U.S.C. §§ 811, 813(a). If a MSHA inspector discovers conditions that violate safety or health standards, § 104 of the Act directs the Secretary to issue a citation or an order to the mine's "operator." 30 U.S.C. §§ 814(a). The Act defines an "operator" as "any owner, lessee, or other person who operates, controls, or supervises a ... mine or any independent contractor performing services or construction at such mine." 30 U.S.C. § 802(d) (emphasis added). (The entities listed before the italicized "or" are also known as "production-operators."²)

The Federal Mine Safety and Health Review Commission (FMSRHC) is an independent agency charged with adjudicating disputes under the Mine Act, including disputes over whether safety standards have been violated. See 30 U.S.C. §§ 815, 823. The Commission appoints administrative law judges (ALJs) to conduct trial-type proceedings to hear such disputes. See 30 U.S.C. § 823(d)(1). Any person aggrieved by a decision of an ALJ may request discretionary review by the Commission, see 30 U.S.C. § 823(d)(2)(A)(i), and any person aggrieved by an order of the Commission may obtain review in this court, see 30 U.S.C. § 816(a)(1).

Twentymile owns and operates the Foidel Creek Mine, an underground coal mine in Routt County, Colorado. In its capacity as owner-operator, Twentymile often uses independent contractors to undertake various projects at the mine. On August 14, 2001, Twentymile hired Precision Excavating, Inc., an independent contractor, to perform work on a refuse pile.

On August 30, 2001, MSHA Inspector Michael Havrilla conducted an inspection of the surface areas of the Foidel Creek Mine. During the course of his inspection, Havrilla observed that the equipment used by Precision's employees violated six safety standards. Among the violations were a leaking diesel fuel tank on a pan scraper, and a ten-by-ten-inch opening on a service truck's air compressor that permitted contact with the drive belts and pulley. When Havrilla discussed the violations with a Precision employee, he learned that Twentymile had not examined the contractor's equipment prior to its use at the mine. See Secretary of Labor v. Twentymile Co., 25 F.M.S.H.R.C. 352, 356 (2003) (hereinafter ALJ Decision). Fearing that Precision's violations might augur an increase in contractor violations, Havrilla decided that issuing citations to both Precision and Twentymile was the best way to guarantee mine safety. See id. at 356-57.

Precision, the independent contractor, did not contest the citations and paid the $352 penalty assessed against it by MSHA. Twentymile, however, contested the citations and the attendant $900 penalty. In a hearing before an ALJ, Twentymile stipulated that the conditions described in the citations constituted violations of the Mine Act, but argued that it was improper for the Secretary to cite it for violations committed by Precision. See id. at 353.

On July 7, 2003, the ALJ ruled in the Secretary's favor. Citing Commission precedent, the ALJ held that, "in instances of multiple operators, the Secretary has wide enforcement discretion and `may, in general, proceed against an owner-operator, his contractor, or both.'" ALJ Decision, 25 F.M.S.H.R.C. at 358 (quoting Secretary of Labor v. Mingo Logan Coal Co., 19 F.M.S.H.R.C. 246, 249 (1997)). The ALJ found no abuse of discretion with respect to the Secretary's decision to cite Twentymile as well as Precision. See id. at 359. Although he recognized the nonbinding nature of enforcement guidelines issued by the Secretary to identify when to charge an owner-operator, the ALJ found that "the citations easily fit within" the guidelines. Id. at 359; see id. at 359 n. 1 (referring to Enforcement Policy and Guidelines for Independent Contractors, App. A to Independent Contractors, 45 Fed.Reg. 44494, 44497 (July 1, 1980) (hereinafter Enforcement Guidelines)).³ In particular, the ALJ found that "Twentymile's failure to inspect the equipment or ensure that the contractor inspected the equipment was an omission that contributed to the violations," and that "Twentymile exercised sufficient control over the scraper and service truck" to warrant a citation. ALJ Decision, 25 F.M.S.H.R.C. at 360. The ALJ also credited the MSHA inspector's statement that "he was concerned that safety hazards on contractors' equipment were not being adequately addressed" because the "cited conditions were rather obvious," and that "by issuing citations to Twentymile, the safety violations would get more immediate attention than if he only cited the contractor." Id. at 359.

Twentymile appealed the ALJ's decision to the Commission. See Secretary of Labor v. Twentymile Coal Co., 27 F.M.S.H.R.C. 260 (2005) (hereinafter Commission Decision). The company asserted that, under the Mine Act, an owner-operator is liable only for its own violations, and that the Secretary was therefore without authority to cite it for the violations of its independent contractor. See id. at 263. The Secretary responded that court and Commission precedents were directly to the contrary. See id. She further argued that her decision to cite Twentymile for Precision's violations was not reviewable by the Commission because there was no meaningful standard against which to review her exercise of charging discretion. See id. at 265. In the event that the Commission deemed her enforcement decision reviewable, the Secretary argued in the alternative that the citation was not an abuse of discretion. See id. at 266.

The Commission reversed the ALJ's decision and vacated the citations issued to Twentymile. See Commission Decision, 27 F.M.S.H.R.C. at 277. Its opinion began by agreeing with the Secretary's (and the ALJ's) view that "the Secretary generally may proceed against an owner-operator, an independent contractor, or both, for violations by the independent contractor." Id. at 263-64. Nonetheless, the Commission rejected the Secretary's contention that her exercise of enforcement discretion was unreviewable. See id. at 265. And a majority of the Commission concluded that the Secretary had abused her discretion by citing Twentymile. See id. at 268. According to the majority, the Secretary's decision to cite the owner-operator was an abuse of discretion because it was not made for reasons "consistent with the purpose and policies of the Mine Act." Id. at 268 (internal quotation marks omitted). This was so, the Commission said, because: (1) "[t]he record show[ed] that the independent contractor was in the `best' position to prevent the violations in question," id. at 268; (2) "Twentymile did not have a significant, continuing involvement in the work specifically being performed at the refuse pile," id. at 270; (3) Twentymile did not contribute to the violations "directly" or through a "significant" omission, id. at 270-71; and (4) none of the criteria listed in the Secretary's Enforcement Guidelines was satisfied at "a significant threshold" level, id. at 273.⁴

The Secretary of Labor now petitions this court for review of the Commission's decision to vacate the citations filed against Twentymile. She contends that the Commission erred in holding that her decision to cite Twentymile for violations committed by Precision was reviewable; should we hold otherwise, the Secretary contends that her decision was not an abuse of discretion. Twentymile disputes both contentions, and it further challenges what it describes as the premise of the Secretary's nonreviewability argument: that she has authority to cite an owner-operator for safety violations committed by its independent contractor. Because the Secretary's authority is indeed the premise of her argument, we consider that issue first and then proceed to examine the issue of reviewability.

II

We can make relatively short work of the question of the Secretary's authority to cite owner-operators for violations committed by their contractors because it is a question that this circuit has already answered. Indeed, Twentymile concedes that "decisions from this Court grant the Secretary the discretion to cite both the production-operator and the independent contractor for the violation of the independent contractor." Respo...