Adele Abrams

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

United States and Canada, visit www.AggMan.com for daily updates.

Alabama

Although a Limestone County woman has voiced concerns that a new gravel mine will lower her property value, the Huntsville natural resources director told the Huntsville Times that there is no reason to deny the operation’s application for an air permit. A developer is opening the mine to supply material for the development of a subdivision, the Preserve at Limestone Creek. The developer said that gravel extraction at the site will keep the 750 truckloads of gravel needed for the first phase of the subdivision’s development off surrounding roads.

Arkansas

The House of Representatives is considering legislation that would allow the state to recover any profits earned by open-cut mining operations — including sand and gravel sites — that are found to be operating without a permit. According to the Arkansas Democrat-Gazette, the Arkansas Department of Environmental Quality is limited to issuing a fine of $1,000 for a first violation with higher fines for repeat offenders. The deputy director of that department estimated that a company recently found to be operating a gravel mine without a permit made $1,000 each day and was in operation for nine months. He told the newspaper that companies operating without a permit were able to provide a competitive advantage over those that conducted their mining operations within the legal guidelines.

California

Teichert Aggregates is applying for a U.S. Department of Agriculture grant for $250,000 toward the construction of a biomass plant that would burn plant waste and create electricity. The Appeal-Democrat reports that the company plans to build the plant on its property near Linda, in Yuba County. If built, it would generate up to 20 megawatts of electricity, or enough power for 20,000 homes. Mike Ray, a project manager for Teichert, told the newspaper that the company became interested in biomass after it began investigating ways to reduce the electrical bill for gravel mining and related operations. The company expects to hear about its grant application within three to six months. From then, it anticipates a two-year timeframe to secure financing, gain necessary approvals, and build the plant.

Maryland

York Building Products faces challenges on its request to have the county rezone 706 acres in the Carpenters Point peninsula as mineral extraction area (MEA). In an online report, www.mydailybiz.com reports that the zoning is being considered as two separate parcels. One parcel was proposed to be zoned as industrial, with York Building Products requesting a change to MEA. The county’s planning and zoning staff is recommending approval of that request, but the planning commission is recommending disapproval. The second parcel is proposed to be zoned as northern agriculture residential with an overlay that would allow mining if the owner gets a special-use permit. The company is seeking a MEA designation on that property as well. Both the planning staff and planning commission have recommended against that request.

Nevada

In early March, Sens. Harry Reid and John Ensign reintroduced a federal bill that would declare mining off limits on 800 acres of land in Sloan Hills that are overseen by the Bureau of Land Management. According to the Las Vegas Review-Journal, Rep. Dean Heller submitted a companion bill in the House. “The Sloan Hills gravel pit not only disturbs an otherwise peaceful community, but poses serious health risks to thousands of Nevada residents,” Reid told the newspaper. A previous attempt to pass such legislation died in last year’s session of Congress when it was made part of a package of approximately 100 public lands and wilderness initiatives. Republicans blocked the bill, saying that some portions were too controversial and that it was an overreach.

New Hampshire

A drilling and blasting contractor working in a Pembroke quarry fell 30 to 40 feet into the quarry, the Concord Monitor reports. The contractor suffered a broken leg and head injuries and was transported to the local hospital. The Pembroke police chief said his department contacted the Occupational Safety and Health Administration which was expected to contact the Mine Safety and Health Administration about the incident. The worker was wearing a hard hat and safety harness, but the harness may have been unhooked because he was in an area that did not require it.

New York

Patrick DiLucia, vice president of sales for the Dolomite Group Inc., told the Rochester Business Journal that costs of construction materials are starting to inch up as crude oil prices climb. The 100-year-old company, purchased by Oldcastle Inc. in 2000, sells crushed stone, sand, gravel, asphalt, and concrete. DiLucia said that rising oil prices increase delivery costs for aggregates, as well as asphalt costs. He told the journal that his company and other local construction companies are cutting costs by instituting longer seasonal layoffs and cutting employee hours in addition to shortening production runs at the company’s quarries.

Texas

Aggregate Industries U.S., Inc., a wholly-owned subsidiary of Holcim Ltd., announced that Lattimore Materials Corp. (LMC), a Texas-based aggregates and ready-mixed concrete producer, has become a wholly-owned subsidiary of Aggregate Industries. Prior to the transaction, Holcim owned a minority interest in LMC. “Until now, Aggregate Industries U.S. did not have a presence in Texas,” said Bernard Terver, Holcim Ltd. United States area manager. “The acquisition of LMC firmly establishes Aggregate Industries U.S. operations in this important area of the United States and allows (it) to fully leverage the very strong positions and reputation of LMC.” The new subsidiary operates seven aggregate operations, 26 ready-mix sites with 35 concrete plants, four rail terminals, and a fleet of more than 400 mixer and haul trucks.

Utah

In late February, an equipment operator was found dead at a facility on the Great Salt Lake’s Stansbury Island. According to The Salt Lake Tribune, the victim was found face down on a conveyor that had stopped operating. When paramedics arrived on the scene, he was not breathing or responsive. The newspaper reports that Mine Safety and Health Administration investigators did not release any information on the victim’s injuries, but had not ruled out the possibility that his death may have resulted from natural causes.

Vermont

The Putney Town Board wants to borrow up to $75,000 to continue its partnership with the town of Dummerston on a shared gravel pit. The Brattleboro Reformer reports that the two towns share another pit that has saved Putney $125,000 in sand and gravel costs by operating its own pit. That site is nearing the end of its life, and the two towns want to open a new pit. The town manager told the board that all future sand will be free and clear of any costs other than their lease price per yard, approximately half of the going price of purchased sand.

Virginia

Luck Stone Corp. is credited with keeping the Xterra East Championship, a mountain bike triathlon race, in Richmond. Richmond BizSense reports that the company has committed at least $25,000 to sponsor the event. A previous sponsor had pulled its support, and the event’s future with the city was in doubt. An Old Dominion University professor estimated last year’s economic impact for the two-day event to be slightly more than $1 million. “Had we not been able to find Luck Stone like we did, this certainly would have gone to Charlotte, N.C.,” Councilman Doug Conner told the journal.

Virginia

At Aggregates Manager’s press time, a public hearing was scheduled before the Caroline Planning Commission regarding Vulcan Material Co.’s proposal for a sand and gravel mine on a 541-acre property in Caroline County. According to the Free Lance-Star, the company hopes to have the mine operational by summer of 2012. The site is expected to create 14 full-time jobs and generate annual tax revenues of about $100,000, with material being barged along the Rappahannock River. More than 100 people turned out for an early March meeting, with many opposing the project.

Washington

In March, Thurston County Commissioners ruled that further environmental review is necessary before a Maytown gravel mine project can move forward. The Olympian reports commissioners sent the case back to a county hearing examiner who previously ruled the mine’s special-use permit to be valid, noting that some of the prairie habitat protected under the county critical-areas ordinance is included within the boundaries of the 287-acre mine. The county planning director said that from 5 to 75 acres might need to be removed from the mine to comply with county regulations that were in effect when the mine permit was issued in 2005. Maytown Sand and Gravel bought the property from the Port of Tacoma in 2010 for $17 million. If the permit is rejected, the sale could fall through and the land could revert back to the port.

Province News

The Ontario Ministry of the Environment is being asked to consider certain reclamation activities of aggregates sites as a potential threat to drinking water. According to the Guelph Mercury, the agency’s source protection program manager, Martin Keller, said the ministry has identified a series of “prescribed drinking water threats” related to water quality issues including the storage of fuel, the use of agricultural fertilizers and chemicals, pesticide application, waste disposal, and septic systems. He also noted that water ponds on these sites can allow the introduction of contaminants into the groundwater system. The ministry’s manager of source protection planning said it is “currently evaluating the activity to determine whether or not we can assign what we call a hazard rating.” If post-extraction aggregate sites are added to a list of drinking water threats, it could “open the door to look at potential policies that would mitigate the risks,” Keller said.

These organizations – including nonprofit and community/faith-based groups, employer associations, labor unions, colleges and universities – will provide safety and health programs that educate workers and employers in industries with high injury and fatality rates.

The primary focus is on hard to reach and vulnerable populations, such as workers with limited English proficiency and low literacy rates, young workers and small business employers.

For information about the grant or to apply, visit OSHA’s Web site.

By Henry Chajet and Christa Lee Rock

            “It’s time to put the ‘H’ for ‘Health’ back in ‘MSHA,’” Dr. Greg Wagner recently told the annual meeting of the American Public Health Association. Wagner, the Deputy Assistant Secretary for Policy at the Mine Safety and Health Administration (MSHA), will not be alone in this pursuit. Newly confirmed Assistant Secretary of Mine Safety and Health Joseph P. Main has promised to “beef up the health part of MSHA,” through aggressive efforts to reduce miner exposures to coal mine dust and silica. While past rulemaking on these issues has been stagnant, Main and Wagner intend to accelerate them. More immediate is the expected increase in enforcement of existing rules.

            Main, a veteran safety director for the United Mine Workers of America, has not minced words when discussing the need for increased enforcement. He called Bush administration enforcement efforts “weak” and has praised the concept of expanding the frequency of mine inspections. Wagner, a Harvard-educated respiratory physician, has stressed the need to use sampling technologies and predictive modeling to target better health enforcement.

MSHA has announced multiple initiatives, including nationwide “Dust Sweeps,” in which MSHA will devote a portion of each inspection to dust-related issues. Main has expressed interest in reducing the silica standard consistent with the National Institute for Occupational Safety and Health (NIOSH) criteria which relied heavily on research conducted by Wagner and called for a 50-percent reduction in the exposure limit. While revising the standard will take time, aggressively enforcing violations of the existing exposure levels will not.

Adapting to this health-centered enforcement regime requires three primary tools:  knowledge, action, and skepticism. Permissible exposure limits for a wide variety of regulated substances can be found at 30 C.F.R. Parts 56 (surface metal/non-metal mines), 57 (underground metal/non-metal mines), 70 (coal mine dust and diesel exhaust), and 71 (other gases and asbestos). These limits follow the threshold limit values set by the American Conference of Governmental Industrial Hygienists (ACGIH), which MSHA incorporated by reference in 1972 and 1973 (see 30 C.F.R. §§ 75.322, 71.700, 70.1900, 57.5001, and 56.5001). Employers should train workers on hazards, act to protect against them, and sample for contaminants to understand their risks. Respiratory protection programs should be reviewed for compliance with regulatory mandates, along with corresponding employee training and disciplinary programs.

Having the requisite skepticism entails holding the Secretary of Labor to her burden of proving the inspector has taken an accurate sample that actually exceeds a regulatory limit. The agency must demonstrate that the procedure used to obtain personal air sample results is valid for enforcement. Mandatory procedures for air samples include calibrating the pump, requiring the miner to wear the sampling cassette within the “breathing zone” (approximately 12 inches from the face or nose), and ensuring that the sample was not contaminated. Even tipping the sampling cassette or knocking it into a pile of material can cause oversized particles to invade the cassette, yielding a high result that contains non-respirable or foreign materials. Lab procedures to prevent “phantom” results due to contaminants or errors affecting compliance determinations must be examined. Questions asked in pre-hearing discovery or carefully targeted Freedom of Information Act (FOIA) requests can identify errant sampling and analysis methods. Deviations from valid procedures can void the sample and vacate an alleged violation.

Skepticism should extend to lab analysis and tests. MSHA labs must participate in Proficiency Analysis Testing (PAT) to maintain accreditation. In the PAT process, standardized samples are sent to dozens of labs for analysis to measure a lab’s results and methods. MSHA (as well as Occupational Safety and Health Administration and NIOSH) labs participating in PAT can produce silica test results that are 20 to 40 percent off the average test result. Similarly, lab calibration data records, which are regularly kept for all lab equipment, as well as lab audits and incident reports, may be helpful in contesting citations for invalid samples. This is especially true where the audit or incident report is close in time to the sample that produced the citation. All of this information — including the PAT results — can be obtained through a FOIA request or in the process of challenging a citation.

If MSHA is to take a rigorous new enforcement approach, MSHA and operators must also make sure that accurate results are used for enforcement by observing sampling procedures, taking pictures of the sampled individual and equipment, and updating employees on knowledge of toxic hazards and prevention techniques will all be essential tools in this new era of health enforcement.

Henry Chajet is a partner and Christa Lee Rock is an associate with Patton Boggs LLP. Chajet may be reached at 202-457-6511 or via e-mail at hchajet@pattonboggs.com. Rock may be reached at 303-894-6141 or via e-mail at crock@pattonboggs.com.