When it comes to regulatory compliance, remember that the Mine Act applies to contractors, too.


August 1, 2008

by Hugh Thatcher

June’s Rock Law column discussed how contractor risk-reduction programs help minimize operator liability. But what happens when your contractor doesn’t sense any urgency regarding the need for a documented risk-reduction program? The short and simple answer is that your contractor may have its own liability under the Mine Safety and Health Act of 1977. The Mine Act creates liability for independent contractors who provide services to or perform construction at a mine. But it is not easy to determine when this separate liability exists. For the reasons explained below, your contractor should err to the side of caution, assume that it is subject to the Mine Act, and fully comply with the Mine Act and its regulations.

Conflicting case law

The first case to address the jurisdiction of the Mine Act over independent contractors was Old Dominion Power Co. v. Donovan, in which Old Dominion Power Co. (Old Dominion) was cited by the Mine Safety and Health Administration (MSHA) when an employee of Old Dominion was killed after contacting an energized transformer. The transformer was part of a substation located on mine property and provided power to the mine. The substation was built and owned by the owner of the mine. The only equipment that Old Dominion owned was the metering equipment. The Federal Mine Safety and Health Review Commission (Review Commission) held that Old Dominion was an “independent contractor providing services of the mine” within the meaning of Section 3(d) of the Mine Act and upheld the citation. The Fourth Circuit Court of Appeals disagreed and reversed the Review Commission, holding that Old Dominion was not an independent contractor because its activities were “rare and remote” from mine construction or the extraction of minerals.

In 1990, the District of Columbia Circuit Court of Appeals addressed the issue of MSHA jurisdiction over service providers at mines in Otis Elevator Co. v. Secretary of Labor. The District of Columbia Circuit held that the elevator repair service persons that assisted with the maintenance of elevators that transported miners underground were subject to MSHA’s jurisdiction. In the words of the court, “[w]e think that the phrase ‘any independent contractor performing services … at [a] mine’ means just that – any independent contractor performing services at a mine.”

After Old Dominion and Otis Elevator, the Seventh Circuit Court of Appeals created its own approach in Northern Illinois Steel Supply Co. v. Secretary of Labor, when it heard an appeal brought by Northern Illinois Steel Supply Co. (NIS). NIS delivered steel to a quarry one or two times per week using flatbed trucks. The drivers of the trucks facilitated the unloading of the steel by loosening the fasteners that secured the steel to the bed and occasionally guided a crane hook into a lifting chain. MSHA issued NIS a citation because a driver was not wearing fall protection while on the bed of his truck. The Review Commission held that NIS was an independent contractor under the Mine Act. The Seventh Circuit held that NIS was not subject to the jurisdiction of the Mine Act because the “minimal activity performed by NIS does not rise to a level that can be construed as services performed at a mine.”

Appeals options

If the issue of independent contractor liability were addressed in a different legal framework, the cases described here could provide guidance to your contractors, because they could look to the law of the jurisdiction in which you are located. But under the Mine Act, any appeal from an order of the Review Commission may be taken to the circuit court of appeals in which the violation is alleged to have occurred or the District of Columbia Circuit.

A quick hypothetical serves to illustrate why this dual avenue of appeal presents a problem. Big Pizza, Inc. delivers lunch to a mine located in Illinois – the same circuit as Northern Illinois Steel Supply Co. At the mine site, the pizza delivery driver cruises by a maintenance bay where large haulage equipment is serviced. One day, the driver swerves to miss a haul truck that is backing out of the bay, and runs into a berm. The delivery vehicle doesn’t have air bags, the seat belt is a lap belt, and the driver smacks his head on the steering wheel. When the mine ambulance transports him to a local hospital, the ambulance passes an MSHA inspector on the way in to the site. MSHA issues a citation to Big Pizza because the horn on the delivery vehicle does not work. Big Pizza challenges the citation before an administrative law judge, who holds that Big Pizza is an independent contractor providing services to the mine. Big Pizza appeals the administrative law judge’s decision to the Review Commission. The Review Commission disagrees with the administrative law judge, and holds that Big Pizza is not an independent contractor under the Mine Act. Big Pizza wins, right?  Maybe. The Secretary of Labor may appeal the ruling to either the Seventh Circuit (Northern Steel Supply Co.) or the District of Columbia Circuit (Otis Elevator). The Secretary of Labor will likely pick the District of Columbia Circuit, because the Otis Elevator decision supports the Secretary of Labor’s decision to issue the citation to Big Pizza (“any independent contractor”). Thus, even though the mine and Big Pizza are in Illinois, there is no certainty that the Seventh Circuit’s law will ultimately be applied to the case.

Err to the safe side

Given the above, the safe course of action is to require all of your independent contractors to comply with the Mine Act. Clearly, this will benefit your independent contractors, but it will also benefit you. Under the Mine Act, MSHA may issue citations to an operator for violations committed by an independent contractor. And, importantly, an operator cannot challenge an MSHA inspector’s decision to issue a citation to an operator for an alleged violation of a contractor. The decision is within the inspector’s discretion. As a result, you should establish clear expectations of your contractors regarding their obligations under the Mine Act and emphasize that each contractor is responsible for its own employees’ compliance with the Mine Act when that contractor is on your site. By doing so, you will take a proactive step towards limiting everyone’s liability in a gray area of the law.

Hugh Thatcher is an associate at Patton Boggs LLP’s Denver office. He counsels and represents clients in occupational/mine safety and health law, including MSHA and OSHA inspections, regulatory compliance, litigation, and liability prevention. Thatcher may be reached via phone at 303-894-6179 or via e-mail at hthatcher@pattonboggs.com.

Under the Mine Act, MSHA may issue citations to an operator for violations committed by an independent contractor.

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