August 30, 2011
by Adele L. Abrams, president of the Law Office of Adele L. Abrams P.C.
One of the more frustrating legal issues confronting those in the mining industry has been the application of the Mine Act’s “strict liability” framework to situations involving contractors and subcontractors performing work or rendering services at a mine site. After the 2006 U.S. Court of Appeals decision in Twentymile Coal, it was established that the Mine Safety and Health Administration (MSHA) has “unreviewable discretion” to cite the production-operator, a contractor, or both, for a contractor’s infractions…regardless of whether the production-operator had any involvement with, or knowledge of, the violative condition or behavior.
A new ruling by the Federal Mine Safety & Health Review Commission (FMSHRC) adds another layer to the analysis: that of contractor and subcontractor liability for regulatory violations. On July 25, 2011, the FMSHRC ruled (with one dissent) in Ames Construction Inc. to affirm citations issued to Ames (a contractor) for unsafe activities by its subcontractor (Bob Orton Trucking) while Ames was directing work in an area of a metal/non-metal mine site. The ruling served to affirm the trial judge’s verdict upholding the citation in result, although for different analytical reasons.
The case involves a fatality that occurred at the Kennecott company’s tailings facility in Utah. Ames was hired to construct a tailings dam, pipe, and roadways at the MSHA-regulated facility. As the “general contractor” for the construction area, Ames regularly received deliveries of materials for the project, including piles, which in this instance were delivered to the mine by the Orton company’s driver, William Kay. When Kay arrived at the mine, he stopped in Ames’ on-site office, and it was customary for Ames employees to check with such truck drivers and to ensure they had hazard training cards issued by Kennecott. Kay had such training but, MSHA found, the hazard training provided did not address unloading of materials from his truck.
Normally, Ames’ employees would escort any outside drivers while on the property. One of Ames’ crew notice that the load of pipe on Kay’s truck lacked chocks (to prevent pipes from rolling) and that the dunnage (to maintain load stability) was smaller than usual.
Apparently nothing was said about this to the driver, however, and Kay was escorted to the unloading area by three members of the Ames’ crew. Kay was told “stay right here” while two of them left to retrieve a forklift, leaving one Ames’ employee behind with Kay. However, that Ames’ employee’s attention was elsewhere when he heard a “crack” and saw pipes rolling off the truck trailer. Kay had removed the straps from the load and received fatal crushing injuries from the pipes.
MSHA issued a citation to Ames, for an alleged Significant and Substantial (S&S) violation of 30 CFR 56.9201, with a $13,268 penalty. Bob Orton Trucking also received the same citation, with a $35,000 penalty, later settled for $5,000 in settlement. The cited standard requires that “equipment and supplies shall be … unloaded in a manner which does not create a hazard to persons from falling or shifting equipment or supplies.”
Ames pursued its contest before ALJ Margaret Miller, who upheld the citation finding that Ames was strictly liable for the Orton employee’s violation. The ALJ held that the unloading process began when the truck was parked at the unloading area and that a member of Ames’ crew was present for the purpose of unloading. She also ruled that the truck driver was transporting the pipe for the use of Ames, on property controlled by Ames, and that it was Ames’ responsibility to unload the pipes correctly.
However, the ALJ erroneously assumed that Orton was a subcontractor of Ames and relied on that theory to uphold the citation, under a decision in Mingo Logan Coal (19 FMSHRC 246, 1997), in which the Commission held: “the Act’s scheme of liability provides that an operator, although faultless itself, may be held liable for violative acts of its employees, agents, and contractors.”
Ames appealed to the full FMSHRC, arguing that the judge’s factual error in determining that Orton was its subcontractor was a basis for reversal and also contending that its employees could not have prevented the fatal accident. Ames declared that, in the absence of a contractual relationship with Orton, it was not liable for the violation and that it was simply a “third party bystander” outside the strict liability scheme. Ames noted that, in urging for Ames’ liability for the acts of an unrelated third party, MSHA was unjustifiably expanding the potential for liability to an unconscionable extent.
The Secretary of Labor responded that while there was no record evidence to support a finding that Orton was Ames’ subcontractor, Ames should still be held strictly liable because it controlled the pipe unloading area and supervised the unloading of the pipes. A contractor is considered to be a “mine operator” under the Mine Act’s definitions, and MSHA argued that an operator is strictly liable for violations that take place under its control or supervision. At trial before ALJ Miller, MSHA had presented both the strict liability theory and also the vicarious liability (responsibility for contractors) theory in its prosecution of Ames.
The Commission held that the ALJ’s mistake about the relationship between Ames and Orton did not control the outcome of the appeal, because her findings about Ames’ supervision of the unloading process still stood unchallenged. It found that Ames was an “operator” of the mine, under the definition in Section 3(d) of the Act, and that this extended to a construction company preparing a tailings dam.
Since a violation of a mandatory standard occurred at a mine at which Ames was an “operator,” it could be found strictly liable under Section 110(a). Strict liability means “liability without fault” but it does not mean liability for things outside one’s control or supervision. The absence of a contract between Ames and Orton was irrelevant if Ames was supervising the process of unloading pipes. It was Ames’ responsibility under its contract with Kennecott to oversee unloading of pipes.
Ames conceded at trial that Orton’s drivers were to follow the instructions of the Ames’ supervisor of the unloading process. There was also a safety and health “action plan” which was a site-specific project document detailing the safety requirements imposed on Ames by Kennecott. This included giving Ames’ supervisors and foremen the power to stop work that would place employees, equipment, or property in immediate danger, and to ensure that all unsafe conditions are corrected. This was found by the FMSHRC to imply supervisory authority rested with Ames. They also considered Ames’ Job Safety Analysis for unloading activities as showing that they were familiar with the hazards and responsible for unloading the pipes. Here, no attempt was made to prevent Kay from loosening the straps or otherwise to protect him from encountering hazards.
In short, Ames was an operator of the mine under the language of the Mine Act and was strictly liable for activities of third parties working within the area it controlled for any actions or conditions that violated MSHA’s standards. This decision should be a warning to contractors who assume control or all or part of a mine site for a limited period, as they will be responsible for ensuring compliance with MSHA regulations by all others who might perform any activities within that area.
About the author: Adele L. Abrams is an attorney, Certified Mine Safety Professional, and trained mediator who is president of the Law Office of Adele L. Abrams P.C. in Beltsville, Md., a seven-attorney firm focusing on safety, health, and employment law nationwide. Abrams also provides consultation, safety audits, and training services to MSHA- and OSHA-regulated companies