August 2002
Preparing for HazCom
New chemical hazard program and training required: fines and liability risks increase
By Henry Chajet and Anne Nichting
For the first time, on Sept. 23, 2002, aggregate operations will be required to put in place a formal chemical hazard communication (HazCom) program that includes extensive documentation and training on protective measures for employees and contractor employees. HazCom is the leading cause of violations and fines at OSHA-covered sites will soon be the subject of MSHA inspections. It also exposes produceres to potential lawsuits from plaintiffs’ lawsuits seeking damages for alleged harms caused by toxic exposures.
The Mine Safety and Health Administration (MSHA) published the final HazCom rule in the June 21, 2002, Federal Register [see Final Rule and Withdrawal of Interim Final Rule, 67 Fed. Reg. 42313 (2002) (codified at 30 C.F.R. Part 42 et al.) at www.msha.gov]. The final rule is applicable to all mining sectors, including the stone, sand and gravel, and aggregates industries (and related facilities on MSHA jurisdiction properties). MSHA rejected the industry’s request for an exemption based on existing training requirements. While MSHA also rejected the industry’s comments that the rule was not justified, it amended the interim rule (that never went into effect) with a number of improvements. The new rule is effective on Sept. 23, 2002, for operations that employ six or more, and on March 21, 2003, for sites with five or fewer employees.
While MSHA economic impact analysis estimates that the new rule will cost the 20,000 sites that must comply about $31,600,000 in the first year and $6,100,000 in each succeeding year; we believe that the $1,580 average per site, first-year cost estimate is far below the actual costs that will be incurred. Similarly, we believe that MSHA’s average per site estimate of $305 per year costs for future years is off by an order of magnitude or more.
MSHA HAZCOM SUMMARY
MSHA’s HazCom rule requires the following items:
• Identification and listing (and evaluation if not available) of hazardous chemicals produced or used (including interim process mixtures);
• A written hazard communication program;
• Material Safety Data Sheets (MSDS) for hazardous chemicals;
• Container labels for hazardous chemicals;
• Employee access to MSDS;
• Initial and subsequent employee training; and
• Multi-employer (contractor) protection methods.
Initial training for current miners must be conducted under the final HazCom rule and each miner must be trained on the following:
• The physical and health hazards of chemicals in the miner’s work area;
• Protective measures a miner can take against the hazards; and
• The contents of the mine’s HazCom program.
Subsequent HazCom training must be conducted in accordance with 30 C.F.R. Parts 46 (Sand, Gravel and Stone) and 48 (Other Mining). MSHA added HazCom language to the existing training standards to address the requirements for subsequent HazCom training. Existing Part 46 requires that the training be conducted by a competent person designated by the mine operator. Existing Part 48 requires the use of an MSHA-approved instructor for the administration of Part 48 training. All mines, quarries, and operations under MSHA’s jurisdiction are currently subject to new employee training, task training, and annual refresher training under either Part 46 or Part 48 and these new provisions supplement those requirements.
While it is beyond the scope of this article to review all of the rule’s provisions, the following specifics are intended to provide the reader with an idea of the complexity of these new mandates. The required written HazCom program must address:
(a) How the rule is put into practice by the use of:
(1) Hazard determination;
(2) Labels and other forms of warning;
(3) Material safety data sheets (MSDSs); and
(4) Miner training.(b) A list or record identifying all hazardous chemicals [with}:
(1) a chemical identity…for…cross-referencing between the list, a chemical label, and its MSDS; and
(2) Be compiled for the whole mine or by individual work areas.(c) At mines with more than one operator [independent contractors], the methods for:
(1) Providing other operators with access to MSDSs; and
(2) Informing other operators about:(i) Hazardous chemicals to which their miners can be exposed;
(ii) The labeling system on the containers of these chemicals; and
(iii) Appropriate protective measures.
MSHA’s final HazCom standard departs from the Occupational Safety and Health Administration’s (OSHA) Hazard Communication Standard in several respects, including coverage of EPA-regulated hazardous waste; labeling of temporary, portable containers; and record-keeping requirements. Therefore, companies that already have OSHA programs in place should review their programs before assuming compliance or “importing” an OSHA program to cover MSHA facilities.
Compliance Assistance
Perhaps one of the more difficult aspects of the HazCom rule will be implementation by contractors on MSHA sites, and by site operators for contactors on their sites. Exchanging HazCom MSDS access and complying with the training obligations for contractor employees exposed to site hazards, or site employees exposed to contractor hazards, will pose difficult challenges for those not accustomed to this multi-employer regulatory duty.
There is a wealth of readily available, free information that can assist employers that do not or can not use consulting or legal assistance in their MSHA/OSHA programs. MSHA plans on publishing a compliance guide and has already a downloadable pdf file to assist operators with training miners on chemical hazards (see http://www.msha. gov/hazcom/hazcom.htm). OSHA’s web page also provides resources. For example, OSHA provides a link to an online training course that can assist operators with developing a hazard communication program.
Importantly, there are numerous internet sites where operators can obtain MSDSs (see e.g. http://www.msds search.com). While almost all MSDSs needed for compliance with MSHA’s rule should be available from manufacturers of chemicals used by quarry and mine operators, the American National Standards Institute has developed a standard to assist with preparation of MSDSs, if needed. We believe this need will be limited to materials, mixtures, or interim process materials uniquely produced at mines and quarries.
For these mine or quarry unique materials not “imported” from other companies, MSDSs may not already exist and may be required under the new rule. Similarly, MSDSs will be required for materials “exported” from mine and quarry properties to customers or other product or interim product receipients and these may need to be developed by the mine or quarry operator (see American National Standard for Hazardous Industrial Chemicals – Material Safety Data Sheets Preparation, ANSI Z400.1-1998). Drafting MSDSs, however, must be undertaken with extreme care since they will form the basis of warnings, training, protective actions, and emergency response, and can be an integral part of a product liability or negligence based law suit for damages by contractor employees, downstream recipient company employees, neighbors, consumers, or other members of the public.
Reducing Litigation Risks
In addition to creating MSDSs when needed, implementing HazCom programs should not be viewed as a mere paperwork exercise, but should be undertaken with extreme diligence. Lawsuits have imposed millions of dollars in damages for failures to warn of known hazards and failures to protect against them. The HazCom rule will help set the standard of care owed to employees, contractors, visitors, and all others that are potentially exposed to hazardous chemicals and materials, with implications far beyond MSHA enforcement.
Company commitment to meaningful compliance, combined with aggressive implementation programs and documentation are excellent preventive law tools to avoid costly damage claims and adverse jury verdicts. In contrast, haphazard compliance efforts acknowledge the need, but increase the risk of punitive damages in lawsuits and severe enforcement based on allegations of “knowing misconduct” or “intentionally” inflicted harm; particularly in a chemical spill, explosion, or exposure incident that causes significant injuries, illness or results in substantial press coverage.
Recently, a Texas jury awarded $7.5 million against a silica sand producer in a case brought by the family of a deceased employee of the product user. Failure to adequately warn product user employees of the hazards of silica exposure was at the core of the case (see BNA Toxic Law Reporter, Vol. 16, p. 554, May 24, 2001). The award is consistent with earlier Texas cases where the court rejected a defense based on the fact the products were sold to “sophisticated users,” companies that did not need warnings and had enough information to protect their employees. It is also consistent with cases that rejected general warnings as inadequate (e.g. health injury if proper protective equipment not used).
Similarly, and perhaps more alarming, the Texas Supreme Court upheld a $6 million punitive damage verdict against Mobil Oil, in addition to compensatory damages, for failure to warn and protect a contractor employee of the risk of leukemia from benzene exposures, even though Mobil was held to be aware of hazards and trained and protected its own employees. The court said: “Mobil…had actual awareness of the extreme risk benzene exposures involves, but nevertheless proceeded in conscious indifference to the rights, safety, or welfare of [the plaintiff] and other contract workers” (see BNA OSHA Reporter, Vol. 28, p. 15, June 3, 1998).
Of course, while Texas, Florida, and California stand out for some of their large jury verdicts, they are not alone but are part of a growing trend to find producers, manufacturers, and operators liable in failure-to-warn allegation cases. Imagine the impact in future cases of MSHA violations and fines for failures to comply with the new HazCom rule, if they are admitted in evidence in jury trials for damages in toxic tort or other exposure/health effects based claims.
In conclusion, we believe that the HazCom rule may have more impact on enforcement, fines, and liability risks than any other rule since the passage of the 1977 Federal Mine Safety and Health Act. However, if the OSHA experience is an indicator, it may not play a major role in advancing safety and health, even while it too imposes extensive paperwork burdens and becomes the most frequent basis for violations and fines.
Regardless of our negative industry-wide expectations, we advise employers to cooperate fully with the upcoming MSHA visits, and later the inspections that will focus on HazCom. Moreover, we advise you to begin now to develop programs and review and improve existing ones to achieve meaningful and beneficial compliance for your company. By putting well designed, effective programs and documentation in place, and reviewing and auditing existing ones, hopefully you can use the onset of the HazCom rule to its maximum benefit to improve protection against harm, and to reduce the risk of liability.
Henry Chajet is a partner in the Washington, D.C. office of Patton Boggs LLP.
Anne Nichting, MS,CIH is an associate attorney in the Denver office of Patton Boggs LLP.
The firm’s website is located at www.pattonboggs.com.
Federal Mine Safety and Health Review Commission
By Adele L. Abrams, Esq. CMSP
7th Circuit Reverses Commission, Holds That MSHA Lacks Jurisdiction Over Mine Supplier
In a major decision affecting suppliers to the mining industry, the U.S. Court of Appeals, 7th Circuit, ruled on June 20 that MSHA cannot assert jurisdiction over a driver employed by a steel supply company while delivering products to a quarry site. The ruling in National Illinois Steel Supply Co. v. Secretary of Labor (2002 U.S. App. LEXIS 12200), which involved a Vulcan Materials Co. mine site, reversed decisions of both an ALJ and the Federal Mine Safety & Health Review Commission (FMSHRC).
Vulcan’s arrangement with National Illinois Steel (NIS) called for the NIS employees to deliver steel to the mine site, driving down an access road to various delivery points, where it is unloaded using equipment owned and operated by Vulcan’s miners. Prior to the issuance of the citation at issue, NIS workers would help the unloading process by loosening the ropes and chains that secured the load to the NIS’s flatbed truck. Occasionally, NIS employees would also help guide the hook of a crane hoist in order to rig the load. These activities occurred once or twice per week, and took about one-half hour per visit.
NIS was cited by MSHA after an inspector saw an NIS employee on top of the steel that was loaded on NIS’s flatbed truck, guiding a crane’s hook. The worker was not tied off with a safety belt or line to prevent fall hazards. Vulcan’s miners were in the area running the equipment and assisting but no Vulcan supervisor was present.
NIS was cited under 30 CFR § 56.15005 for failure to wear fall protection. The inspector classified NIS as an independent contractor performing a service (delivery and rigging of steel) at the mine, which would confer MSHA jurisdiction, and both the ALJ and Commission agreed with MSHA’s claims.
The Circuit Court analyzed the definition of “operator” under the Mine Act and considered NIS’s argument that it was performing only incidental activities at the mine that were not closely related to the mining process and were not conducted under the direction of Vulcan. The court distinguished NIS’s activities from those where independent contractors have been deemed “operators” because they are involved in mine construction or extraction, have a “continuing presence” at a mine, or perform significant services at a mine.
The 7th Circuit held that NIS’s work at the mine was de minimis and nothing distinguished its delivery of steel at the Vulcan site with deliveries made by parcel delivery companies that deliver mine supplies. It concluded that NIS’s actions fell outside MSHA’s jurisdiction under the plain language of the Mine Act and that is was not within the definition of “independent contractor” or “operator” because its actions did not rise to a level that could be construed as “services performed at a mine.”
Significantly in this case, the court granted de novo review because the appeal involved MSHA’s determination of its own jurisdiction, a position taken in other cases by the 7th and Federal Circuit courts. MSHA had argued that the court should defer to the agency’s interpretation of its own jurisdiction and statutory authority, which has been done by several other circuits.
ALJ’s Ruling On “Unwarrantable Failure” Vacated By Commission
In its second round of litigation before the full Commission, Virginia Slate again had ALJ Weisberger’s findings that two alleged violations were not due to “unwarrantable failure” vacated and remanded (Secretary of Labor v. Virginia Slate Co. (Commission, June 19, 2002)). The Commission took similar action in Virginia Slate I in May 2001 (23 FMSHRC 482). The ALJ’s original decision was rendered in March 2000 (22 FMSHRC 378). The two orders involved were issued in June 1998, along with 12 other citations and orders.
The first “unwarrantable failure” order alleged a violation of 30 CFR § 56.9301, failure to use bumper blocks or impeding devices to prevent a front-end loader from running into the hopper, hitting a rock or overturning. The second order involved an alleged violation of 30 CFR § 56.14100, failure to inspect mobile equipment prior to being placed into operation on a shift.
That order was written because Inspector Ricky Horn concluded that preshift inspections were not adequate due to a number of equipment defects observed and cited. This also was classified as an “unwarrantable failure,” under section 104(d)(1) of the Mine Act.
MSHA proposed a total penalty assessment of $8,978 for the 14 citations and orders, an amount reduced to $4,400 at the initial hearing, after ALJ Weisberger concluded that some citations were not “S&S” and that the orders were not “unwarrantable failures.”
On review, the Commission affirmed some of the ALJ’s holdings, but vacated and remanded the judge’s negative unwarrantable failure determinations for the two orders, as well as the revised penalty assessments. The penalties for the two orders at issue were set at $300 each.
On remand, ALJ Weisberger reviewed the record evidence and concluded that, on one order, the Secretary failed to establish that the violations were so obvious that Virginia Slate should have known of the conditions, which obviated the aggravated conduct needed to support “unwarrantable” allegations. With respect to the preshift order, the ALJ found that the duration of the undisclosed defects was not demonstrated; therefore, the Secretary could not prove how long the mine operator had failed to conduct examinations, again dismissing the “unwarrantable” findings. The judge also reaffirmed the reduced penalties that he had set in the initial hearing.
In September 2001, the Commission ordered review, sua sponte, limited to the issues raised by the judge’s penalty assessments, following which the Secretary of Labor petitioned for review on the unwarrantability determinations. MSHA argued that the judge abused his discretion by failing to apply the “missing witness” (adverse inference) rule against Virginia Slate, although MSHA did not raise this issue before the judge at the first trial or on initial remand. The Commission agreed that MSHA was barred from raising this point upon review.
MSHA also challenged the judge’s crediting of certain mine management over miner witnesses with regard to the duration of equipment use. The Commission rejected this claim, noting that a judge’s credibility determinations are entitled to great weight and are not lightly overturned.
However, the Commission agreed with the Secretary that the ALJ failed to adhere to the Commission’s remand instructions and consider all “relevant aggravating factors” in determining “unwarrantability.” Those factors include: obviousness of the violation; the operator’s knowledge of the violation; the extent of the violative condition; whether the operator is on notice that greater efforts are needed for compliance; whether the condition poses a high degree of danger; or any abatement efforts by the operator.
The ALJ wrongly focused solely on the duration factor, the FMSHRC ruled, stating that all relevant facts and circumstances must be examined to determine if an actor’s conduct is aggravated or whether mitigating circumstances exist.
The Commission majority again remanded the matter to the ALJ, with instructions to consider all of the unwarrantability factors in conjunction with the specific facts of the violation. If the ALJ finds upon remand that an individual knew that the violation existed, he must also examine whether the individual is a supervisor and, if so, whether he violated the standard of care required of supervisory personnel by failing to stop a known violation. The Commission stressed that supervisors are held to a high standard of care, and a supervisor’s involvement must be considered in a unwarrantable failure analysis.
The Commission again criticized the judge’s analysis of the statutory requirements of Section 110(i) of the Mine Act in setting the appropriate civil penalties, which was stressed in Virginia Slate I. The FMSHRC noted that this is especially significant where the judge substantially diverges from the Secretary’s penalty proposals.
Mine Reasonably Relied on “Reputable” Consultants
A recent coal decision demonstrates the importance of selecting reputable consultants for mining engineering and safety services. In Secretary of Labor v. Ohio County Coal Co. (May 28, 2002, ALJ Melick), the Judge vacated an unwarrantable failure citation issued after the mine drilled into two unlocated wells in its underground mine. The wells were not disclosed on maps prepared by Associated Engineers, an independent contractor who provided such services to the mining industry since 1958.
The citation was initially written as a moderate negligence “S&S” violation, but the inspector modified it twice (to “high” negligence, and again to “unwarrantable failure”) after discovering new sources of information that had been available concerning the wells but which were not used by the mine operator. Those sources of information were Kentucky Geological Service maps from oil well permits and two different commercial map services. In vacating the citation, ALJ Melick held that the mine operator had taken “reasonable measures” to locate the cited oil wells by engaging the “reputable” engineering firm’s services.
Adele L. Abrams is a Maryland attorney who represents mine operators and contractors nationwide in MSHA and OSHA litigation, and provides safety and health training and consultation services. For more information, write to safetylawyer@aol.com or call (301) 595-3520.