Cranesville Aggregate Companies, Inc., d/b/a Scotia Bag Plant

Read the official release (oshrc.gov)

Plain-English summary

OSHA issued Cranesville Aggregate three safety citations and three health citations for its bag plant, with proposed penalties totaling $508,500. The judge vacated all six after finding that Mine Safety and Health Administration authority over the facility preempted OSHA jurisdiction. The two Commission members disagreed about whether the bag plant was a mine: Chairman Attwood would have found OSHA jurisdiction and remanded, while Commissioner MacDougall would have upheld the judge. They vacated the direction for review because of the split. The judge's vacatur therefore became the final appealable order, with the precedential value of an unreviewed ALJ decision.

Decision snapshot

• Cited standard(s): The Commission opinion does not identify the six cited OSHA standards by number.
• Outcome: Direction for review vacated; all six citations remained vacated and no penalties were assessed.
• Key point: A divided Commission may end review and leave the ALJ decision as the final order without giving it Commission-precedent status.

Full text (OSHRC public release)

Cranesville Aggregate COompaniesS, INC., D/B/A Scotia Bag Plant, Docket
No. 09-2011 & 09-2055

Walter, J. David
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Walter, J. David
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2018-08-03T15:55:00Z
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EN-US
X-NONE
X-NONE

United States of America

OCCUPATIONAL
SAFETY AND HEALTH REVIEW COMMISSION

1120 20 th Street, N.W., Ninth Floor

Washington,
DC 20036-3457

SECRETARY OF LABOR,

Complainant,

v.

OSHRC
Docket Nos. 09-2011 & 09-2055

CRANESVILLE AGGREGATE COMPANIES, INC., D/B/A SCOTIA BAG PLANT,

Respondent.

ON BRIEFS:

Ronald Gottlieb,
Appellate Attorney; Charles F. James, Counsel for Appellate Litigation; Joseph M.
Woodward, Associate Solicitor of Labor for Occupational Safety and Health; M.
Patricia Smith, Solicitor of Labor; U.S. Department of Labor, Washington, DC

For
the Complainant

Walter
G. Breakell, Esq.; Brian J. Barraclough, Esq., Breakell Law Firm, P.C., Albany,
NY; Henry Chajet, Esq.; R. Brian Hendrix, Esq., Jackson Lewis LLP, Reston, VA

For
the Respondents

DECISION

Before: ATTWOOD, Chairman;
and M ac DOUGALL, Commissioner.

BY THE COMMISSION:

Cranesville Aggregate Companies, Inc. owns and operates a sand and
gravel mine in Scotia, New York. Several buildings are located on Cranesville’s
property, including “Building 1” and “Building 2,” which are referred to
collectively as the “Bag Plant.” After receiving a complaint about health and
safety hazards in Building 2 at the Bag Plant, the Occupational Safety and
Health Administration conducted safety and health inspections at the facility.
OSHA subsequently issued Cranesville three safety citations (Docket No.
09-2011) and three health citations (Docket No. 09-2055). A total penalty of $508,500 for all six citations was proposed.

Before former Administrative Law Judge Ken S. Welsch, Cranesville
asserted that OSHA’s authority to regulate conditions at the Bag Plant had been
preempted by the Mine Safety and Health Administration pursuant to section
4(b)(1) of the Occupational Safety and Health Act of 1970, 29 U.S.C. §
653(b)(1). The judge agreed, finding that the work being done at the Bag Plant
rendered it a mine under the Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801, et seq. , and he vacated all six citations.

On review, the two Commissioners are divided on the appropriate
disposition of the jurisdictional issue in this case. To resolve this impasse,
the Commissioners agree to vacate the direction for review, thereby allowing
the judge’s decision and order to become the final appealable order of the
Commission with the precedential value of an unreviewed administrative law
judge’s decision. See, e.g., Texaco, Inc. , 8 BNA OSHC 1758, 1760 (Nos.
77-3040 & 77-3542, 1980); Rust Eng’r Co. , 11 BNA OSHC 2203, 2205
(No. 79-2090, 1984); Safeway, Inc. , 20 BNA OSHC 1021 (No. 99-316, 2003);
Timken Co. , 20 BNA OSHC 1070, 1072 (No. 97-0970, 2003). See also sections
10(c), 11(a) and (b), and 12(j) of the OSH Act, 29 U.S.C. §§ 659(c),
660(a) and (b), and 661(i). Accordingly, the direction for review is vacated.
The separate opinions of each Commission member follow.

SO
ORDERED.

/s/ 

Cynthia
L. Attwood

Chairman

/s/ 

Heather
L. MacDougall

Dated:
April 22,
2016                                                  Commissioner

Separate
Opinion of Chairman Attwood

ATTWOOD,
Chairman:

The Secretary determined in this case that the Occupational Safety and
Health Act applied to conditions at Cranesville’s Bag Plant, which was located
at a Cranesville facility at which mining operations also occurred. Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651-678.
Former Administrative Law Judge Ken S. Welsch concluded that the OSH Act was
preempted based on his view that mineral milling took place at the Bag Plant
and, thus, it was covered by the Mine Act. See OSH Act § 4(b)(1), 29
U.S.C. § 653(b)(1) (“Nothing in this Act shall apply to working conditions
of employees with respect to which other Federal agencies . . . exercise
statutory authority to prescribe or enforce standards or regulations affecting
occupational safety or health.”); Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801, et seq . The Mine Act does not define the term “mineral milling,”
but grants the Secretary discretion to determine its meaning. See Mine
Act § 3(h)(1), 30 U.S.C. § 802(h)(1). Because the Secretary is accorded
discretion and I would find his determination here is reasonable, his exercise
of that discretion warrants deference. Accordingly, I would find that the cited
conditions in the Bag Plant were properly subject to OSHA’s authority, reject
Cranesville’s affirmative defense of preemption, and remand this case for
further proceedings.

Background

A.  
Cranesville’s Operations

Cranesville owns a facility in Scotia, New York, that is bisected by a
set of railroad tracks. On one side of the tracks is a sand and gravel quarry,
and an associated milling facility—referred to as Plant 5—at which mineral
material known as “crude” was excavated and then crushed, washed, sized, and
separated into sand and two grades of gravel. These excavation and milling operations were performed outdoors, so
the stockpiled sand and gravel products located nearby were exposed to the
elements. At the time OSHA inspected the Bag Plant, most of the materials
produced at Plant 5 were sold directly to outside buyers or to other offsite
Cranesville facilities, or were moved to other stockpiles on the quarry side of
the railroad tracks.

On the other
side of the tracks was the Bag Plant, which consisted of two buildings,
although only activities in one of those buildings, Building 2, are at issue. A
small portion of the materials mined and processed at Plant 5 was delivered
across the tracks to the Bag Plant as needed. At the Bag Plant, sand, Portland
cement, gravel, cement, and other materials were mixed in specified proportions
to manufacture several products that were bagged for sale to consumers, such as
dry mortar mix, dry concrete mix, and a dry specialty cement product called
“surface bond.” Some materials, such as Portland cement, a premium stone
product, and sand, were also simply bagged for sale. One room in the Bag Plant—known as the maintenance shop—was used to
maintain and repair equipment that included mining equipment.

The Bag Plant utilized approximately 3-5% of the materials produced
from Plant 5 and, as the judge found, received “most” of the materials it used
from outside sources. Upon request from the Bag Plant supervisor, a Plant 5
employee loaded sand or gravel from the outdoor stockpiles at the quarry and
delivered specified quantities of those products to outside stockpiles at the
Bag Plant, where they continued to be exposed to the elements. A Bag Plant employee later loaded the gravel and sand into separate
plant hoppers as needed. Other materials that were mixed and/or bagged at the Bag Plant did not
originate at Cranesville’s quarry—they came from other Cranesville facilities
and other sources unrelated to Cranesville. All of the sand delivered to the Bag Plant, whether from the quarry
and Plant 5 or an outside source, was dried before it was transferred to a silo
and from there, to the mixing and bagging area. The treatment of the sand is a
key activity upon which this case turns.

It is undisputed that Cranesville’s quarry and Plant 5 must be
inspected regularly by MSHA. See 30 U.S.C. § 813(a) (“Authorized
representatives of the Secretary . . . shall make frequent
inspections and investigations in coal or other mines each
year . . . .”). Indeed, three MSHA inspectors testified that
each had conducted such regular inspections of the quarry and Plant 5 as well
as surrounding operations on the quarry side of the railroad tracks. All three
testified that the supervisor who accompanied them on these inspections told
them either that the buildings on the other side of the railroad tracks were
not covered by the Mine Act, or that there were no facilities at Cranesville
that were subject to the Mine Act other than those on the quarry/Plant 5 side
of the railroad tracks. In any event, despite regular MSHA inspections of Cranesville’s
facility, it is also undisputed that MSHA never inspected the Bag Plant.

B.   Statutory and Regulatory Background

The
determination of whether the activities conducted in the Bag Plant constituted
“mineral milling” within the meaning of the Mine Act depends on certain
provisions of the OSH Act, the Mine Act (as well as its legislative history),
and the 1979 Interagency Agreement between OSHA and MSHA, often referred to as
a Memorandum of Understanding (MOU). The OSH Act and the Mine Act both contain
provisions relevant to the limits of authority of the two Labor Department
agencies. By its terms, the OSH Act “appl[ies] with respect to employment
performed in a workplace in a State . . . .” OSH Act § 4(a), 29 U.S.C.
§ 653(a). As noted above, the OSH Act also places limits on that
applicability, precluding OSH Act coverage regarding “working conditions of
employees with respect to which other Federal agencies . . . exercise statutory
authority to prescribe or enforce standards or regulations affecting occupational
safety or health.” OSH Act § 4(b)(1), 29 U.S.C. § 653(b)(1).

It is
well-settled under long-standing Commission precedent that a section 4(b)(1)
claim of preemption is an affirmative defense; the burden of proof therefore is
on the employer. Idaho Travertine Corp. , 3 BNA OSHC 1535, 1536 (No.
1134, 1975); Tidewater Pacific Inc. , 17 BNA OSHC 1920, 1923 (No.
93-2529, 1997), aff’d in part on other grounds , 160 F.3d 1239
(9th Cir. 1998). The Commission evaluates an employer’s argument that OSHA’s authority
is preempted under section 4(b)(1) by considering: (1) whether the other
federal agency has the statutory authority to regulate the cited working
conditions; and (2) if the agency has that authority, whether the agency has
exercised it over the cited conditions by issuing regulations having the force
and effect of law. JTM Indus., Inc. , 19 BNA OSHC 1697, 1699 (No.
98-0030, 2001). Only the first consideration is at issue in this case.

Under Title I
of the Mine Act, MSHA has the authority to regulate working conditions “in coal
or other mine[s].” Mine Act § 4, 30 U.S.C. § 803. And the Mine Act
specifically defines “coal or other mine” as including, among other things,
“lands, . . . structures, facilities, equipment, machines, tools, or other property
. . . used in, or to be used in, . . . the milling of . . . minerals . .
. .” Mine Act § 3(h)(1), 30 U.S.C. § 802(h)(1) (emphasis added). Although
“mineral milling” is not defined in the Mine Act, section 3(h)(1) provides
specific instructions to the Secretary of Labor that “[i]n making a
determination of what constitutes mineral milling for purposes of this Act, the
Secretary shall give due consideration to the convenience of administration
resulting from the delegation to one Assistant Secretary of all authority with
respect to the health and safety of miners employed at one physical
establishment[.]” Id. The Conference Report to Mine Act’s final bill
notes that “both the Senate bill and the House amendment authorized the
Secretary, in cases of possible overlapping jurisdiction[] between the
Mine Safety and Health Administration and OSHA, to assign enforcement
responsibilities to a single agency.” S.
Rep. No. 95-461, at 38 (1977) (Conf. Rep.) (emphasis added). Thus, it is clear based on the language of the statute and its
legislative history that Congress intended that the Secretary determine whether
a particular operation is mineral milling, and contemplated circumstances in which
OSHA and MSHA might each have jurisdiction over different operations located at
a facility at which mining occurs.

Less than two years after the effective date of the Mine Act, MSHA and
OSHA entered into the 1979 MOU to “delineate certain areas of authority, set
forth factors regarding determinations relating to convenience of
administration, provide a procedure for determining general jurisdictional
questions, and provide coordination between MSHA and OSHA in all areas of
mutual interest.” 44 Fed. Reg. 22,827 (Apr. 17, 1979). The MOU, unchanged since
its inception, is the Secretary’s interpretation of what constitutes mining and
mineral milling. It explicitly designates certain operations as being subject
to MSHA authority and others as being subject to OSHA authority, and provides a
method to determine which agency has authority over heretofore undesignated
operations. Appendix A to the MOU defines “milling” and also provides
definitions of various processes that inform the Secretary’s determination as
to which of the two agencies has regulatory authority over a given operation.
44 Fed. Reg. at 22,829.

C. Procedural History

In response to an employee complaint to OSHA about health and safety
hazards at Cranesville’s Bag Plant, OSHA inspected the Bag Plant and ultimately
issued Cranesville citations for serious violations of OSHA safety and health
standards. Before the judge, Cranesville challenged OSHA’s authority over the Bag
Plant operations on the ground that it was preempted by the Mine Act. Following
an evidentiary hearing, the judge vacated the citations on two grounds. First,
he concluded that, because “drying” is a process identified as “milling” in the
MOU and Cranesville dried all of the sand from the Bag Plant’s outdoor
stockpile before either mixing it with other dry ingredients or bagging it, the
Bag Plant was a milling operation within the meaning of the Mine Act. Second, the judge concluded that the presence of the maintenance shop
in one room of the Bag Plant building where mining and other equipment was
repaired was “sufficient to bring the Bag Plant within the purview of the Mine
Act.”

On
review, the Secretary points to the Mine Act’s explicit delegation of authority
to himself to determine which Labor Department agency has inspection authority
over the Bag Plant, and contends the judge erred in not according deference to
the Secretary’s determination. The Secretary also asserts that pursuant to the
definition of “milling” in the MOU, Cranesville’s mining and milling process
ceased after the sand and gravel was extracted and milled at Plant 5 and
delivered to the Bag Plant stockpiles. Thus, he argues, the process at the Bag
Plant—beginning with the loading of sand and gravel into their respective
hoppers and culminating in bagging the consumer product—constituted
manufacturing, which falls within OSHA’s authority. In addition, the Secretary
argues that the judge erroneously focused on the definition of “drying” in the
MOU, and that a reading of the MOU as a whole supports the Secretary’s
determination. Cranesville argues that by definition the drying of sand at the
Bag Plant is “milling,” and therefore the Bag Plant is subject to the Mine Act.
The company also argues that the presence of the maintenance shop in the Bag
Plant requires that the entire Bag Plant be considered a mine.

Discussion

The crushing, washing, and sizing that takes place at Cranesville’s
Plant 5 plainly constitutes “milling” within the meaning of the Mine Act.
Therefore, the quarry and its associated mill and stockpiles at Plant 5
constitute a “mine” within the meaning of the Mine Act and are subject to that
Act. Nonetheless, for the following reasons I would conclude that the
Secretary’s determination that the Bag Plant is a manufacturing facility
subject to the OSH Act, rather than a mineral mill within the meaning of the
Mine Act, is reasonable and entitled to deference.

A. Standard of Review

It is axiomatic that if a statutory provision is unambiguous, its
language must be given effect. Chevron, U.S.A., Inc. v. Nat’l Res. Def.
Council, Inc., 467 U.S. 837, 842-43 (1984). And even if there is ambiguity,
“a court may not substitute its own construction of [the] provision for a
reasonable interpretation made by the administrator of an agency.” Id.
at 844. In promulgating the Mine Act, Congress unambiguously delegated to the
Secretary responsibility for “making a determination of what constitutes
mineral milling . . . . ” Mine Act, § 3(h)(1), 30
U.S.C. § 802(h)(1). Indeed, as found by the two courts of appeals to
address the issue, the language of section 3(h)(1) of the Mine Act “gives the Secretary
discretion, within reason, to determine what constitutes mineral milling, and
thus indicates that his determination is to be reviewed with deference both by
the Commission and the courts.” Donovan v. Carolina Stalite Co. , 734
F.2d 1547, 1552 (D.C. Cir. 1984); see also Kaiser Aluminum and Chem. Co. v.
Dep’t of Labor , 214 F.3d 586, 591 (5th Cir. 2000) (according deference to
Secretary of Labor in determining what constitutes “milling” under the Mine
Act).

In Stalite ,
the Secretary had determined that the facility at issue engaged in mineral
milling and was subject to the Mine Act, and issued citations pursuant to that
authority. The Federal Mine Safety and Health Review Commission (FMSHRC)
vacated the citations, finding that Stalite was subject to the OSH Act. In reversing the FMSHRC decision, the D.C. Circuit engaged in a
comprehensive analysis of the Secretary’s authority to determine what
constitutes mineral milling within the meaning of the Mine Act. The court
observed that the distinction between milling, on the one hand, and
manufacturing, on the other, is “somewhat elusive, to say the least,” and
concluded that “[FMSHRC], so far as we can see, gave the Secretary’s
determination no deference, and that was error.” Id. at 1551-52. The
court noted that “[w]e have before us just the sort of determination the
Secretary was empowered by Congress to make[,]” and added that “[i]n this
highly technical area deference to the Secretary’s expertise is especially
appropriate.” Id. at 1552 and n.9. The court also rejected FMSHRC’s
refusal to rely on the MOU:

[The MOU], while not dispositive,
assist[s] our resolution of the jurisdictional question. Section 3(h)
specifically contemplates, and, moreover, depends in part, on “the agencies . .
. agree[ing] between themselves as to which agency will inspect a particular
business establishment.”

Id.

My colleague endorses Cranesville’s argument that the meaning of
“milling” as used in the Mine Act is plain, and therefore deference to the
Secretary is precluded. But in light of the Act’s explicit delegation of
authority to the Secretary to determine the limits of milling, as well as the
legislative history noting that the jurisdictional line may not be clear, what
is plain is that this argument lacks merit. And instead of determining whether
the Secretary’s conclusion that Cranesville did not engage in milling at the
Bag Plant within the meaning of the Mine Act is reasonable and thus entitled to
deference, the judge applied the wrong standard of review and simply reached
his own conclusion. While the judge began his analysis by correctly noting that
“ ‘[t]he Commission gives considerable weight to a federal agency’s
representation as to its authority to regulate cited working conditions,’ ”
(citing JTM Indus. , 19 BNA OSHC at 1699), he proceeded to decide
the preemption issue without according any apparent weight to the Secretary’s
representation of OSHA’s authority.

Applying the appropriate standard of review to the Secretary’s
determination, I would conclude that it is reasonable and should be accorded
deference. First, the operations of the Bag Plant fit neither the definition of
“mill” found in MSHA’s standards, nor the definition of “milling” contained in
the MOU. MSHA’s safety and health standards for metal and nonmetal mines define
“mill” as “any ore mill, sampling works, concentrator, and any crushing,
grinding, or screening plant used at, and in connection with, an excavation or
mine.” 30 C.F.R. § 56.2. Although this definition obviously applies to
Plant 5 (where Cranesville engaged in crushing, washing, and screening),
nothing in the definition bears any resemblance to the processes Cranesville
engaged in at the Bag Plant. Additionally, Appendix A of the MOU defines
“milling” as “the art of treating the crude crust of the earth to produce
therefrom the primary consumer derivatives.” 44 Fed. Reg. at 22,829. And it
notes that “[t]he essential operation in all such processes is separation of
one or more valuable desired constituents of the crude from the undesired
contaminants with which it is associated.” Id.

Cranesville
relies on the judge’s erroneous finding that “[e]mployees in the Bag Plant were
applying heat to excavated material hauled directly from the mine in
order to dry the material” to argue that the separation of water from sand that
occurred in the dryer at the Bag Plant fits within the MOU’s definition.
(Emphasis added.) Neither the judge’s finding nor Cranesville’s argument is
factually accurate. Indeed, contrary to the judge’s finding, the “excavated
material”—the crude crust of the earth—was not “hauled directly from the mine”
to the Bag Plant. Rather: (1) it was transported from the mine to the milling
facilities at Plant 5, where specific milling processes—crushing, washing, and
screening—were applied to produce sand and two grades of gravel; (2) these
materials were then moved to outdoor stockpiles at Plant 5; (3) most of the
output of Plant 5 was then sold in that form, as “primary consumer
derivatives,” to off-site customers or moved to other stockpiles on the quarry
side of the railroad tracks; (4) as needed, a small portion of the sand and gravel stockpiled at
Plant 5 was transported to the Bag Plant’s outdoor stockpiles; (5) as needed,
the sand and gravel were then loaded into their respective hoppers at the Bag
Plant; and (6) the sand was then dried and either stored in a silo for future
use or transported to the mixing and bagging areas of the Bag Plant. Thus,
“separation of one or more valuable desired constituents [sand and gravel] of
the crude from the undesired contaminants with which it is associated” occurred
only at Plant 5—not at the Bag Plant. For that reason alone, the Secretary’s
determination that Cranesville engaged in manufacturing and not milling at the
Bag Plant is reasonable and is entitled to deference.

Furthermore,
the drying of sand at the Bag Plant can reasonably be seen as a necessary first
step in the Bag Plant’s manufacturing of three products: dry concrete mix, dry
mortar mix, and dry surface bonding material. Each of these products was made
by mixing dried sand with other dry materials, and they were then bagged at the
facility and sold. The Bag Plant also bagged and sold two different grades of
Portland cement, which Cranesville acquired from off-site producers. And,
occasionally, the plant bagged pure sand. In his deposition, the President of
Cranesville Aggregate explained that the material “has to be dry when it’s
blended with cement or the chemical reaction will start with the moisture and
the bag could harden up.” Moreover, he testified that some materials (such as
“play sand”) do not need to be dried, but Cranesville dries them “because
[they] handle[] better.” The Secretary’s expert witness confirmed these
statements:

Some of the materials that are
bagged in these processes include cement. If the materials are moist, when
they’re mixed with the cement, they will begin to hydrate the cement which
means the cement will start to set up and get hard, and you will have lumps at
the least, or you could have the entire bag turn hard and be unusable. So the
dryness is important to the bagging process, . . . and also
to the handling of it through their system as it’s being conveyed and stored.

And not all of the sand used
at the Bag Plant came from Cranesville’s quarry; some of it came from outside
sources. Just like the sand delivered from Plant 5, the sand from other sources
was stored in a stockpile outside the Bag Plant before it was used. And all the
sand that was used at the Bag Plant was dried, irrespective of its source.
Thus, sand delivered from off-site locations was treated exactly the same as
the sand that came from Cranesville’s mill.

Finally, I
would note that the Secretary’s determination that the Bag Plant was subject to
OSH Act jurisdiction is consistent with the apparent understanding of
Cranesville’s own managers. Prior to OSHA’s inspection, the Bag Plant
supervisor was given OSH Act, but not Mine Act, training. And Bag Plant
employees were specifically excluded from Mine Act training. Moreover, over the
years the quarry/Plant 5 supervisor told at least three MSHA inspectors that
the Bag Plant buildings were not subject to the Mine Act. He testified that he never took the MSHA inspectors to the Bag Plant
or introduced them to the Bag Plant supervisor. Indeed, Cranesville’s Safety
Director, who attended the OSHA opening conference in this case and accompanied
both compliance officers on their inspections of the Bag Plant, never asserted
that OSHA lacked jurisdiction over the Bag Plant or sought to deny them entry
on that ground.

B.
The MOU

The judge confined his decision to an analysis of only one portion of
Appendix A of the MOU; he failed to consider the MOU as a whole. But the MOU,
read in its entirety, supports the conclusion that the Secretary acted
reasonably here. Moreover, the judge failed to consider other significant
evidence that is relevant to the Secretary’s determination.

First, the
judge failed to consider part of the MOU in which the Secretary identifies
specific processes that are subject to either MSHA or OSHA authority:

Pursuant to the authority in section 3(h)(1) to
determine what constitutes mineral milling considering convenience of
administration, the following jurisdictional determinations are made:

a.      MSHA
jurisdiction includes salt processing facilities on mine property; electrolytic
plants where the plants are an integral part of milling operations; stone
cutting and stone sawing operations on mine property where such operations do
not occur in a stone polishing or finishing plant; and alumina and cement
plants.

b.      OSHA
jurisdiction includes the following, whether or not located on mine property :
brick, clay pipe and refractory plants; ceramic plants; fertilizer product
operations; concrete batch, asphalt batch, and hot mix plants; smelters and
refineries. OSHA jurisdiction also includes salt and cement distribution
terminals not located on mine property, and milling operations associated with
gypsum board plants not located on mine property.

MOU
paragraph B.6, 44 Fed. Reg. at 22,828 (emphasis added). The evident conclusion
to be drawn from this paragraph is that, consistent with the Mine Act, the
Secretary determined that OSHA would have jurisdiction over some facilities
that are located on mine property. Moreover, with regard to facilities and
operations listed in paragraph B.6.b, Appendix A of the MOU plainly describes
the point at which MSHA authority ends and OSHA authority begins. Thus, for example, at brick, clay pipe, and refractory plants, OSHA
authority “[c]ommences after arrival of raw materials at the plant stockpile.” Id.
at 22,830. Similarly, at ceramic plants OSHA authority “[c]ommences after
arrival of the clay and other additives at the plant stockpile.” Id. And
OSHA authority at asphalt-mixing plants as well as concrete ready-mix or batch
plants “[c]ommences after arrival of sand and gravel or aggregate at the plant
stockpile.” Id. And the MOU makes clear that all of these types of
facilities may be subject to OSHA’s authority even if they are located “on or
contiguous to” mine property. The analogy of these operations to the Bag Plant is obvious. In all of
them raw materials have been extracted from the earth, have been processed in
some way, and then delivered to plants that manufacture a final product. In all
of these circumstances, the line between mining and milling, on one hand, and
manufacturing, on the other, has been drawn by MSHA and OSHA at the plant’s
stockpile, which lends additional credence to the conclusion that the
Secretary’s line-drawing in this case is reasonable.

Second,
paragraph B.5 of the MOU (neither cited nor discussed by the judge) lists four
factors to be considered in drawing the jurisdictional line between milling and
manufacturing in circumstances not covered by paragraph B.6:

The following factors, among others, shall be
considered in making determinations of what constitutes mineral milling
under section 3(h)(1) and whether a physical establishment is subject to either
authority by MSHA or OSHA: the processes conducted at the facility, the
relation of all processes at the facility to each other, the number of
individuals employed in each process, and the expertise and enforcement
capability of each agency with respect to the safety and health hazards
associated with all the processes conducted at the facility.

44 Fed.
Reg. at 22,828 (emphasis added). Contrary to my colleague’s assertion, in his
brief, the Secretary has explained why consideration of these factors supports
the reasonableness of his determination that the Bag Plant was subject to the
OSH Act. The record establishes that all of the processes in the Bag Plant,
including the drying of sand, mixing of dry ingredients, and bagging of dry
materials, were interrelated and designed to facilitate the production of the
final products: bagged dry construction materials. The citations OSHA issued regarding
the Bag Plant involve the types of hazards typical of a manufacturing facility:
fall hazards, electrical hazards, ladder hazards, personal protective equipment
hazards, hazards associated with exposure to respirable dust, and exposure to
hazardous substances. Moreover, the Secretary has acted consistently in this
regard—his expert witness testified that OSHA had asserted jurisdiction over
other, similar, bagging facilities located on mine property.

Third, the
judge focused his attention solely on one provision of the MOU’s Appendix A,
which provides:

Following is a list with general
definitions of milling processes for which MSHA has authority to regulate
subject to Paragraph B6 of the Agreement. Milling consists of one or more of
the following processes: crushing, grinding, pulverizing, sizing,
concentrating, washing, drying, roasting, pelletizing, sintering, evaporating,
calcining, kiln treatment, sawing and cutting stone, heat expansion, retorting
(mercury), leaching, and briquetting.

44 Fed. Reg.
at 22,829. The only relevant process on that list for purposes of this case is
“drying,” which is defined as “the process of removing uncombined water from
mineral products, ores, or concentrates, for example, by the application of
heat, in air-actuated vacuum type filters, or by pressure type equipment.” 44
Fed. Reg. at 22,830. The judge applied this definition of drying to the facts
as he saw them and found:

The record establishes that d[r]ying occurred in [the
Bag Plant]. This milling process is not the primary task in which the Bag Plant
employees engaged, but it was a regular and significant part of [the Bag
Plant’s] weekly schedule of operations. The MOU does not require a certain
volume of material to be milled at a facility before it is determined to be
under the jurisdiction of MSHA. The limited drying process that occurred in
Building 2 is sufficient to bring the Bag Plant under MSHA’s authority.

The
judge thus reduced his analysis to a simplistic equation—“drying” equals a
milling process; therefore the bag plant is a mill—which fails to take into account
the whole of the MOU. In addition to the paragraphs already discussed, paragraph B.3 of the
MOU provides that “[n]otwithstanding the clarification of authority provided
under Appendix A, there will remain areas of uncertainty regarding the
application of the Mine Act, especially in operations near the termination of the
milling cycle and the beginning of the manufacturing cycle.” 44 Fed. Reg. at
22,828. Furthermore, as my colleague acknowledges, paragraph B.4 provides:

Under section 3(h)(1) [of the Mine Act], the scope of
the term milling may be expanded to apply to mineral product manufacturing
processes where these processes are related, technologically or geographically,
to milling. Or, the term milling may be narrowed to exclude from the scope
of the term processes listed in Appendix A where such processes are
unrelated, technologically, or geographically, to mineral milling .
Determinations shall be made by agreements between MSHA and OSHA.

Id. (emphasis added).
Therefore, even if the term “drying” in Appendix A’s general list of milling
processes could be considered applicable to the drying that occurred at the Bag
Plant, the MOU contemplates that the Secretary may reasonably determine that
because the drying process was unrelated, technologically or geographically, to
the mineral milling that occurred in Plant 5, it should not be considered
“milling” for purposes of determining which agency exercised jurisdiction.
Here, the drying process was directly associated with the rest of the
manufacturing process and was not “technologically” or “geographically” related
to the milling that occurred at Plant 5. Thus, this provision in the MOU also
supports the reasonableness of the Secretary’s decision.

A.  The Maintenance and Repair Shop

The judge, and my colleague, make much of the fact that one room in
Building 2 was used by Cranesville maintenance personnel to maintain and repair
mining and Bag Plant equipment which, in their view, leads to the conclusion
that MSHA rather than OSHA had jurisdiction over the Bag Plant. As discussed
above, however, the MOU makes clear that just because a plant is located on or
contiguous to a mining facility, OSHA is not necessarily deprived of authority
over non-mining operations at that facility. Here, little is actually known
about the maintenance room. It must be emphasized that OSHA did not inspect
that room, and Bag Plant employees were prohibited from entering it.
Cranesville, which despite my colleague’s assertion to the contrary has the
burden of proof regarding its section 4(b)(1) affirmative defense, failed to
introduce any evidence regarding the amount of space in Building 2 that the
maintenance room occupied, as opposed to the space used for the Bag Plant, or
to offer any evidence regarding the amount of mine equipment repair work that
was done in that room, as opposed to other repair work. I would therefore
reject outright Cranesville’s argument and the judge’s determination that the
repair and maintenance of mining equipment in Building 2 renders the entire
building a mine within the meaning of the Mine Act

For all these reasons, I would conclude that the Secretary reasonably
exercised the express delegation of authority granted to him under the Mine Act
to draw the line between Cranesville’s mining and milling operations on the one
hand, and its manufacturing operations on the other. Accordingly, I would find
that Cranesville has not carried its burden to show that OSHA’s authority is
preempted, and I would reverse the judge’s decision and remand for further
proceedings.

/s/ 

Cynthia
L. Attwood

Dated: April 22,
2016                                                
Chairman

Separate Opinion of Commissioner MacDougall

M ac DOUGALL , Commissioner:

This case
deals with whether OSHA or MSHA has jurisdiction over Cranesville’s worksite,
which was inspected by OSHA in response to employee complaints. Following
OSHA’s inspection, the Secretary issued health and safety citations to
Cranesville. Unlike my colleague, I would find that these citations must be
vacated because OSHA lacks jurisdiction over the inspected worksite. I would
agree with the judge, albeit for slightly different reasons than those set
forth in his decision, that the worksite constitutes a mine as defined by the
Mine Act, giving MSHA statutory authority over the worksite and cited working
conditions; as such, OSHA’s authority is preempted by section 4(b)(1) of the
OSH Act. Therefore, following the impasse before the Commission and our decision
to vacate the direction for review, all citations issued under Docket Nos.
09-2011 and 09-2055 are vacated pursuant to the judge’s decision. For the
reasons that follow, I would agree that these citations should be vacated.

Factual
Background

Cranesville
operates a sand and gravel quarry in Scotia, New York. Cranesville mines
approximately 1,500 to 2,000 tons of material per day from this quarry. On the
same property, Cranesville has several buildings, including a group of
buildings referred to as “Plant 5,” located next to the quarry, and “Building
1” and “Building 2,” which are referred to collectively as the “Bag Plant.” The
Bag Plant is approximately 600 feet from the quarry and Plant 5. Railroad
tracks run across the property, cutting between the quarry and the Bag Plant,
and a private road leads from the quarry and crosses over the railroad tracks
to the Bag Plant. The quarry, Plant 5, and the Bag Plant, all of which were
owned and operated by Cranesville, have the same street address.

Following
the extraction of mined material from the quarry, Cranesville processes the
excavated material by running it through a series of crushers, screens, and
wash plants in Plant 5. Each day, employees hauled approximately 60 to 80 tons
of excavated material from the quarry and Plant 5 to the Bag Plant, where
Cranesville bagged and packaged mineral and construction materials, such as
stone, sand, cement, blacktop, salt, topsoil, and premix aggregates, including
concrete mix, mortar mix, “surface bond” and other specialty products. The Bag
Plant contained processing equipment, including screens, dryers, elevators,
hoppers, and conveyers. Part of the bagging operation involved drying sand and
mixing it with cement. During the drying process, the sand was “dumped into a
big barrel that has a [furnace] gun on the end of it[,]” which would “spin and
fluff[]” the sand to dry it. The Bag Plant also contained a maintenance shop
used for repairing mining equipment. This shop performed maintenance work for
both Plant 5 and the Bag Plant, but was only one of several locations on the
Scotia property where mining equipment was repaired.

The parties
agree that the quarry and Plant 5 constitute a mine under the jurisdiction of
the Mine Act, and that MSHA has regularly inspected it. Cranesville contends
that the work performed at the Bag Plant, which was the subject of OSHA’s
inspection, was also under the jurisdiction of MSHA. More specifically,
Cranesville contends that in the Bag Plant: (1) it assembled and repaired
mining equipment; and (2) it used equipment to dry mined sand to produce a masonry
product, which is a milling process. Thus, according to Cranesville, this was
work within the jurisdiction of the Mine Act. The Secretary disputes the
judge’s finding that the Bag Plant, like the quarry and Plant 5, was also under
the jurisdiction of MSHA. The Secretary contends that the fundamental processes
Cranesville engaged in at the Bag Plant were bagging and packaging materials,
which are not milling processes, noting that most of the material that was
mined in Plant 5 was processed and sold without going to the Bag Plant. Thus,
according to the Secretary, OSHA’s jurisdiction is not preempted.

Statutory
Framework

I. Relevant Provisions of the Mine Act and OSH Act

A. The OSH Act

Section
4(b)(1) of the OSH Act provides:

Nothing in this Act shall apply to working conditions
of employees with respect to which other Federal agencies . . . exercise
statutory authority to prescribe or enforce standards or regulations affecting
occupational safety or health.

29 U.S.C. § 653(b)(1). In
determining whether there is preemption under section 4(b)(1), the Commission
considers: “(1) whether the other federal agency has the statutory authority to
regulate the cited working conditions, and (2) if the agency has that
authority, whether the agency has exercised it over the cited conditions by
issuing regulations having the force and effect of law.” JTM Industr. ,
19 BNA OSHC 1697, 1699 (No. 98-0030, 2001) (citations omitted). In this case,
the Secretary concedes MSHA has promulgated regulations that address the
hazards at issue in the present case. Thus, as noted by the judge, the only
issue before us is whether MSHA has statutory authority to regulate the cited
working conditions.

B. The Mine Act

The Mine Act
was enacted to promote and improve safety and health in the Nation’s mines. 30
U.S.C. § 801 et seq . Under the Mine Act, a “coal or other mine” is
defined as:

(A) an area of land from which minerals are extracted
in nonliquid form . . . (B) private ways and roads appurtenant to such area,
and (C) lands, excavations, underground passageways, shafts, slopes, tunnels
and workings, structures, facilities, equipment , machines, tools,
or other property including impoundments, retention dams, and tailing ponds, on
the surface or underground, used in, or to be used in, or resulting from, the
work of extracting such minerals from their natural deposits in nonliquid form
. . . or to be used in, the milling of such minerals , or the work
of preparing coal or other minerals, and includes custom coal preparation
facilities. In making a determination of what constitutes mineral milling
for purposes of this Act, the Secretary shall give due consideration to the
convenience of administration resulting from the delegation to one Assistant
Secretary of all authority with respect to the health and safety of miners
employed at one physical establishment [.]

30
U.S.C. § 802(h)(1) (emphasis and bolding
added). 

In passing the Mine Act in 1977, Congress gave MSHA broad
jurisdiction and established a “single mine safety and health law, applicable
to all mining activity.” S. Rep. No. 95-461,
at 37 (1977) (Conf. Rep.). The conference committee indicated that the Mine Act
broadly defines “mine” to include not only “areas from which mineral[s] [are]
extracted,” but also “all surface facilities used in preparing or processing
the minerals . . . .” S. Rep. No .
95-461, at 38 (1977) (Conf. Rep.); see also S. Rep. No. 95-181, at 14 (1977) (Mine Act jurisdiction
reaches “structures . . . which are used or are to be used in . . . the
preparation of the extracted minerals . . . .”).

The Senate Committee on Human Resources stated:

[It]t is the Committee’s
intention that what is considered to be a mine and to be regulated under this
[Mine] Act be given the broadest possibl[e] interpretation, and it is the
intent of this Committee that doubts be resolved in favor of inclusion of a
facility within the coverage of the Act .

S. Rep. No . 95-181,
at 14 (1977) (emphasis added). In sum, Congress intended for the Mine Act’s
jurisdiction to be broad and jurisdictional questions to be resolved in favor
of coverage within the Mine Act.

II. The Interagency Agreement Between
MSHA and OSHA

In 1979, MSHA and OSHA entered into an
Interagency Agreement addressing the two agencies’ mutual jurisdictional
boundaries. 44 Fed. Reg. 22,827 (Apr. 17, 1979). This agreement takes into
account Congress’ directive that the Secretary, in making a determination as to
what constitutes mineral milling, “give due consideration to the convenience of
administration” that would result from assigning to one agency—MSHA or OSHA—all
safety and health enforcement responsibilities at particular facilities.
Interagency Agreement at ¶ B.2, 44 Fed. Reg. at 22,828 (citing § 3(h)(1) of the
Mine Act, 30 U.S.C. § 802(h)(1)). Paragraph A.3 of the Interagency
Agreement specifies that in cases involving milling operations, the Secretary
will apply the provisions of the Mine Act. Id. at ¶ A.3, 44 Fed. Reg. at
22,827-28.

To further clarify which agency has
inspection authority with regard to milling, the Interagency Agreement states
that:

[T]he scope of the
term milling may be expanded to apply to mineral product manufacturing
processes where these processes are related, technologically or geographically,
to milling. Or, the term milling may be narrowed to exclude from the scope of
the term processes listed in Appendix A where such processes are unrelated,
technologically, or geographically, to mineral milling. Determinations shall be
made by agreements between MSHA and OSHA.

Id. at ¶ B.4, 44 Fed. Reg. at 22,828. However, the Interagency Agreement also
states that in making such determinations, MSHA and OSHA shall consider the
following factors: (1) the processes conducted at the facility; (2) the
relation of all processes at the facility to each other; (3) the number of
individuals employed in each process; and (4) the expertise and enforcement
capability of each agency with respect to the safety and health hazards
associated with all the processes conducted at the facility. Id. at ¶
B.5, 44 Fed. Reg. at 22,828. In this paragraph of the Interagency Agreement,
the Secretary again reiterates that “doubts be resolved in favor of inclusion
of a facility within the coverage of the Mine Act.” Id.

Appendix A of the Interagency Agreement provides a list of
milling processes that MSHA has authority to regulate, including crushing,
sizing, washing, and drying. 44 Fed. Reg. at 22,829-30. Appendix A defines the
milling process of “drying” as “the process of removing uncombined water from
mineral products, ores, or concentrates, for example, by the application of
heat, in air-actuated vacuum type filters, or by pressure type equipment.” Id.
at 22,830.

Discussion

I. MSHA Has Authority to Regulate Building 2 Where Mining
Equipment Was Repaired and Assembled

In addressing the parties’ arguments, the question of
whether OSHA or MSHA jurisdiction exists in this case requires the Commission
to review the Mine Act and its legislative history, the OSH Act, the
Interagency Agreement, and the Secretary’s interpretation of them. I would find
that the judge’s conclusion on this issue is consistent with the Mine Act’s
plain meaning. When determining the meaning of a statute or standard, the
Commission first looks to its text and structure. Superior Masonry Builders,
Inc. , 20 BNA OSHC 1182, 1184 (No. 96-1042, 2003). If the wording is
unambiguous, the plain language of the standard will govern, even if the
Secretary posits a different interpretation. Id. ; Blount Int’l, Ltd. ,
15 BNA OSHC 1897, 1902 (No. 89-1394, 1992). Both the courts and the Commission
have rejected the Secretary’s interpretation when it strains the plain meaning
of the statutory or regulatory text. Worcester Steel Erectors, Inc. , 16
BNA OSHC 1409, 1418-19 (No. 89-1206, 1993). Here, the plain meaning of the Mine
Act compels MSHA coverage of the Bag Plant because the record unequivocally
establishes that it is a facility where mining equipment was maintained.

Cranesville’s maintenance crew provided
services to the entire contiguous facility located in Scotia. The maintenance
crew worked out of a portion of Building 2 in the Bag Plant, which housed the
maintenance shop. There, the maintenance crew serviced, repaired, and assembled
not only equipment used at the Bag Plant but also mining equipment used at the
quarry and Plant 5, including front loaders, conveyors, and crushers. The Secretary
does not dispute that this maintenance work was performed in the Bag Plant, but
he contends that it was not sufficient to bring the Bag Plant within the scope
of MSHA’s authority. I would find, like the judge, that it does.

There is no question that, as the Federal Mine Safety and
Health Review Commission (“FMSHRC”) has held, MSHA has authority over
facilities where “equipment . . . used in[] the milling of
minerals” is maintained. 30
U.S.C. § 802(h)(1) . See Jim Walter Res., Inc.,
22 FMSHRC 21, 25 (2000) (holding that “the language of the statute is
clear” that maintenance of mining equipment is an integral part of the mining
process and proper maintenance is the means to achieve a fundamental purpose of
the Act—continued operation of safe equipment—and comes within MSHA’s
authority); U.S. Steel Mining Co . , Inc. , 10 FMSHRC 146, 148-149
(1988) (a repair and maintenance shop that served two extraction sites and a
cleaning plant, none of which were located on the same property as the
maintenance shop, was subject to MSHA authority because it repaired and
maintained equipment “used in or to be used in” the employer’s extraction,
mining, and coal cleaning activities within the meaning of section 3(h)(1)(c)
of the Mine Act). Indeed, the plain language of the Mine Act allows for no
other result. See   30
U.S.C. § 802(h)(1) (C) (a mine includes “equipment
. . . used in, or to be used in, or resulting from, the work of extracting such
minerals from their natural deposits in nonliquid
form . . . .”); see also Arcadian Corp ., 17 BNA OSHC
1345, 1347 (No. 93-3270, 1995) (“In a statutory construction case, the
beginning point must be the language of the
statute . . . .”) (citations omitted), aff’d , 110
F.3d 1192 (5th Cir. 1997). Cranesville’s maintenance shop repaired and
maintained mining equipment, and this work was integral to the work of the
quarry and the mining process. As such, I would conclude that the judge
correctly found that the maintenance work performed on mining equipment in the
Bag Plant brought the Bag Plant under MSHA’s authority.

II. MSHA Has Authority to Regulate Bag
Plant Where Cranesville Engaged in Milling

I would also agree with the judge that Cranesville was
engaged in mineral milling at the Bag Plant, which brought it under MSHA’s
authority. On review, Cranesville argues that one of the milling processes
listed in the Interagency Agreement—drying—occurred in Building 2 of the Bag
Plant. The Secretary, on the other hand, contends
that Cranesville’s drying of masonry sand was only incidental to the mineral
process—done simply to make it easier to load and move it—and was, therefore,
manufacturing, which gives OSHA jurisdiction. The Secretary further challenges
the judge’s decision by contending that even if the drying operation
constituted milling as defined by the Interagency Agreement, the Secretary reasonably
declined to classify it as milling for purposes of MSHA’s jurisdiction because
considerations of administrative convenience supported leaving jurisdiction
with OSHA. I would agree with the judge that the drying that occurred in
Building 2 was milling; as such, MSHA has jurisdiction over not only the quarry
and Plant 5 but also the Bag Plant.

As noted above, the Mine Act expressly covers “mineral
milling,” but does not define that term. However, in the Interagency Agreement,
the Secretary defines “milling” as the “art of treating the crude crust of the
earth to produce therefrom the primary consumer derivatives,” which includes
several processes including drying . Interagency Agreement at App’x. A,
44 Fed. Reg. at 22,829-30. “The essential operation in all such [milling]
processes is separation of one or more valuable desired constituents of the
crude from the undesired contaminants with which it is associated.” Id .,
44 Fed. Reg. at 22,829. The Secretary also defines the milling process of
“drying” as “the process of removing uncombined water from mineral products,
ores, or concentrates, for example, by the application of heat, in air-actuated
vacuum type filters, or by pressure type equipment.” Id ., 44 Fed. Reg.
at 22,830.

Here, Cranesville—a mine operator—engaged in the excavation
of sand and gravel and dried a certain amount of that material at the Bag
Plant, a facility located on the same property as
its quarry. Cranesville heated the mined material hauled directly from Plant 5
to remove uncombined water from it; the very definition of “drying” as set out
by the Secretary in the Interagency Agreement. Thus, Cranesville treated “the
crude crust of the earth to produce therefrom the primary consumer
derivatives,” and therefore engaged in “milling” at the Bag Plant. In doing so, Cranesville performed functions
usually performed by a mine operator—excavating, milling, and preparing
materials for a particular use.

It is true that drying only occurred approximately twice a
week at the Bag Plant, but neither the Mine Act nor the Interagency Agreement
require drying to be done with any level of frequency at a facility to be
considered “milling.” Exclusivity is not a limitation that
Congress included in section 3(h)(1)(C) of the Mine Act. See Thunder Basin
Coal Co. v. FMSHRC , 56 F.3d 1275, 1280 (10th Cir. 1995) (refusing to
“ ‘read a limitation into the [Mine Act] that has no basis in statutory
language.’ ” (quoting Utah Power & Light Co. v. Sec’y of Labor ,
897 F.2d 447, 451 (10th Cir. 1990))); Hercules Inc. v. EPA , 938 F.2d
276, 280 (D.C. Cir. 1991) (rejecting an interpretation because it “read[] into
the statute a drastic limitation that nowhere appear[ed] in the words Congress
chose . . . .”). As such, like the judge, I would find that
the drying process that occurred in the Bag Plant was “milling,” and this activity
brought working conditions in the Bag Plant under MSHA’s authority.

III. Deference to the Secretary’s Statutory Interpretation
Is Not Warranted

For the reasons discussed above, I would find that the Bag
Plant comes within MSHA’s authority because it is a mine, as plainly defined by
the Mine Act, where mineral milling took place, as the Secretary himself has
defined it in the Interagency Agreement. As such, a deference analysis is not
warranted here. If such an analysis was required, however, I would find that
the Secretary’s interpretation of the Mine Act in this case is not entitled to
deference because it is inconsistent with the statutory interpretation
previously set forth in his Interagency Agreement. In addition, the Secretary
has failed to follow the Mine Act’s statutory mandate to consider “convenience
of administration” in making this interpretation. Under these circumstances,
the Secretary’s interpretation is not reasonable; thus, I would not accord it
deference.

The Commission’s review of an agency’s interpretation of a
statute is governed by the two-part formula announced in Chevron U.S.A. Inc.
v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 842 (1984). In reviewing
an administrative interpretation of a statute, the Commission must first ask
“whether Congress has directly spoken to the precise question at issue.” Id.
at 842. If the statute is unambiguous, then the Commission “must give effect to
the unambiguously expressed intent of Congress” regardless of the agency’s
view. Id. at 843. However, if the statute is silent or ambiguous with
respect to the specific issue, then the Commission must defer to the agency’s
interpretation unless that interpretation is unreasonable. Id. at
843–44. However, an interpretation that is inconsistent with the plain meaning
of the statute is not entitled to deference. Chevron , 467 U.S. at 843.

First, I would conclude, like the judge, that the Bag Plant
is part of a mine under section 3(h)(1)(C) of the Mine Act. In my view, this
reading of the relevant statutory provisions is compelled by the language of
the Mine Act and its legislative history, which explicitly contemplates a “need
to resolve jurisdictional conflicts” and emphatically states “that what is
considered to be a mine and to be regulated under this Act be given the
broadest possible interpretation, and . . . that doubts be resolved in favor of
inclusion of a facility within coverage of the [Mine] Act.” Sen. Rep. No. 95-181, at 14 (1977). Given that doubts are to be resolved
in favor of inclusion of a facility within the coverage of the Mine Act, it is
not surprising that multiple courts in several circuits have found a milling
facility to be a mine for purposes of the Mine Act. See In re Kaiser
Aluminum & Chem. Co., 214 F.3d 586 (5th Cir. 2000) (bauxite processing
facility that used chemical process to mill bauxite was a mine under the Mine
Act); Herman v. Associated Elec. Coop, Inc. , 172 F.3d 1078, 1081 (8th
Cir. 1999) (Congress intended “mine” to be given the broadest possible
interpretation); Donovan v. Carolina Stalite Co. , 734 F.2d 1547, 1554
(D.C. Cir. 1984) (slate gravel processing facility that heated, pressed, and
sized slate for use in concrete masonry blocks constituted a mine within the
meaning of the Mine Act); Harman Mining Corp. v. FMSHRC, 671 F.2d 794,
796-97 (4th Cir. 1981) (“broad definition of a ‘mine’ in the Act demonstrates
that Congress intended that term to encompass all of the facilities used at a
coal preparation plant.”); Marshall v. Stoudt’s Ferry Preparation Co., 602
F.2d 589 (3rd Cir. 1979) (corporation that separated a burnable coal refuse
from dredged sand and gravel found to be a mine within the meaning of the Mine
Act). Under this jurisprudence, I would find the
Secretary’s interpretation here inconsistent with the statutory interpretation
set forth in the Interagency Agreement regarding what constitutes mineral
milling.

Second, although the Secretary has been given discretion to
determine whether mineral milling took place at the Bag Plant, that discretion
is not unbridled. In making such a determination, the Mine Act requires the
Secretary to give “due consideration to the convenience of administration resulting
from the delegation to one Assistant Secretary of all authority with respect to
the health and safety of miners employed at one physical establishment.” 30
U.S.C. § 802(h)(1). It is not clear whether the Secretary believes he was required
to consider convenience of administration here, but it appears that he never even gave it
lip service until the onset of litigation. While MSHA regularly inspected the
quarry, neither MSHA nor OSHA had inspected the Bag Plant prior to OSHA’s 2009
inspection. In fact, during the one exchange between
MSHA and OSHA officials at the regional level prior to OSHA’s inspection, MSHA
was mistaken as to which Cranesville location OSHA was inquiring about. The
Secretary could not have adequately weighed convenience of administration
without information regarding the activities performed within Building 2,
particularly when MSHA did not understand which facility they were discussing.
The Interagency Agreement describes how the Secretary determines jurisdiction
while considering convenience of administration, as required by the Mine Act,
in situations where a company’s operations do not fall exclusively within the
province of “mineral milling.” Here, the Secretary not only disregarded his own
guidance but apparently did not consider administrative convenience at all—at
least, not until the onset of litigation. In such situations, courts accord
“substantially less deference to post hoc interpretations offered only for
purposes of litigation . . . .” Natural Res. Def.
Council, Inc. v. FDA , 760 F.3d 151, 163 (2nd Cir. 2014) (citations
omitted); Perez v. Loren Cook Co. , 803 F.3d 935, 939 (8th Cir. 2015).

Regardless of whether convenience of administration was
considered pre-inspection or post hoc, following the onset of litigation, it is
not clear what factors the Secretary considered if he did engage in this
exercise; rather, it appears that his assertion that
he did the analysis and thereupon concluded that it weighed in favor of OSHA
jurisdiction should be enough for the Commission to accept his determination under
the guise of deference. Such broad deference is simply not
warranted. See Morton v. Ruiz, 415 U.S. 199, 237 (1974) (in order
for an agency interpretation of statute to be granted deference, it must be
consistent with the congressional purpose); see also Christopher v.
SmithKline Beecham Corp. , 132 S. Ct. 2156, 2166 (2012) (deference to an
agency’s interpretation of its own ambiguous regulation is unwarranted when
there is reason to suspect that the agency’s interpretation does not reflect
the agency’s fair and considered judgment on the matter in question). Moreover,
in reviewing the steps contemplated by the Interagency Agreement when a
question of jurisdiction between MSHA and OSHA arises, it appears that these
steps were not taken here. The Secretary presented no evidence that the
issue was “transmitted to the respective National Offices . . . to resolve the
matter,” nor did OSHA utilize the “Office of Legislative and Interagency
Affairs . . . to facilitate communication and cooperation” with MSHA. See Interagency
Agreement at ¶¶ B.8, D.1, 44 Fed. Reg. at 22,828-29. Indeed, had the Secretary
truly considered convenience of administration, it seems probable that he would
have resolved jurisdiction in favor of MSHA since that agency regularly
conducted inspections of the Scotia operations, including the quarry and
Building 5; thus, it would be the most “administratively convenient” to
delegate MSHA authority over the Bag Plant.

Finally, looking at these circumstances through the lens of
convenience of administration, I fail to see, and the Secretary has failed to
illuminate, how it is more convenient to require separate MSHA and OSHA
inspections of the same property here, owned and operated by a single employer.
I am left with the conclusion that all of
this is the result of the Secretary having given little consideration to the
issue of jurisdiction until after the employer contested the OSHA citations and
asserted its jurisdictional defense. As such, I return to the guidepost,
oft-cited here in my separate opinion, that both the Mine Act and the
Interagency Agreement reiterate that coverage of the Mine Act is to be
construed broadly and that “doubts be resolved in favor of inclusion of a
facility within the coverage of the Mine Act.” Interagency Agreement at
¶ B.5, 44 Fed. Reg. at 22,828. For these reasons, I would find that the
Secretary has not shown that his interpretation regarding jurisdiction is reasonable,
and therefore, I would not give it deference.

Like the judge, I would find that the Bag Plant is a mine
within the scope of MSHA’s statutory authority. As such, I would find that MSHA
has authority to regulate the working conditions in the Bag Plant, and that it
has exercised its authority by issuing regulations that apply to the cited
conditions. Therefore, I would conclude that OSHA’s authority is preempted by
section 4(b)(1) of the OSH Act and would agree with the judge’s decision to
vacate the citations.

/s/ 

Heather
L. MacDougall

Dated: April 22,
2016                                                  Commissioner

United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

1924 Building - Room 2R90, 100 Alabama Street, SW

Atlanta, Georgia 30303-3104

Secretary of Labor,

Complainant,

v.

OSHRC Docket Nos.

Cranesville
Aggregate Companies, Inc., d/b/a Scotia Bag Plant; and Cranesville Block Co.,

09-2011, 09-2055 & 10-0447

Respondent.

Appearances:

Suzanne L. Demitrio, Esquire, Matthew M.
Sullivan, Esquire, and Kathryn L. Stewart, Esquire

U. S. Department of Labor, Office of the Solicitor

New York, New York

For Complainant

Walter G. Breakell, Esquire and Brian Barraclough, Esquire

Breakell Law Firm, P.C.

Albany, New York

and

Henry Chajet, Esquire and Brian Hendrix, Esquire

Patton Boggs, LLP

Washington, D.C.

For Respondent

Before: Administrative
Law Judge Ken S. Welsch

DECISION
AND ORDER

Cranesville
Aggregate Companies (Aggregate) owns and operates a worksite located at 427
Sacandaga Road in Scotia, New York. Cranesville Block Company Inc. (Block) owns
and operates a worksite located at 637 East Chester Street in Kingston, New
York. In May of 2009, the Occupational Safety and Health Administration (OSHA)
began safety and health inspections at the Scotia worksite in response to an
employee complaint. In September of 2009, OSHA conducted a safety inspection at
the Kingston worksite, also in response to an employee complaint. Aggregate and
Block are both owned by members of the Tesiero family.

As a result of the OSHA inspections, on November 10, 2009,
the Secretary issued safety citations (Docket No. 09-2011) and health citations (Docket No. 09-2055)
to Aggregate. The Secretary proposed
penalties in the amount of $221,000.00 for the safety citations and of
$287,500.00 for the health citations. The Secretary issued safety citations
(Docket No. 10-0447) to Block on February 11, 2010. She proposed
penalties totaling $27,500.00 for the safety citations.

Aggregate and Block timely contested the citations. The
cases were consolidated and assigned for mandatory settlement proceedings. The
parties were unable to come to a settlement agreement. The cases subsequently
were reassigned to Judge Bober, who scheduled the hearing to begin on February
1, 2011. During discovery, respondent filed motions seeking to compel the
Secretary’s production of three internal OSHA memoranda and requested leave to
depose three employees of the Mine Safety and Health Administration (MSHA). The
Secretary opposed these motions on the grounds that the memoranda were
privileged and the deponents did not possess facts relevant to the cases. Judge
Bober granted the deposition motion on December 27, 2010, and denied the
Secretary’s motion for reconsideration on January 10, 2011.

On January 4, 2011, the Secretary petitioned the Commission
for interlocutory review of Judge Bober’s discovery orders. The Commission
granted the Secretary’s petition on February 1, 2011, and stayed the
consolidated cases during the pendency of the interlocutory review. On July 13,
2011, the Commission issued its decision, setting aside Judge Bober’s discovery
orders, lifting the stay, and directing the Chief Judge to assign the cases for
further proceedings. The Chief Judge assigned the cases to the instant court on
July 19, 2011.

The parties entered into a pre-hearing stipulation
regarding certain serious and other-than-serious violations alleged in the
citations for Docket Nos. 09-2011 and 09-2055 (Exh. ALJ-1). The parties also stipulated to the amendment
of Item 4 of Citation No. 3 of Docket No. 09-2011, to accurately reflect the
date of the alleged violation (Exh. ALJ-2).

The court held a nine-day hearing from November 30, 2011,
to December 2, 2011; from December 5, 2011, to December 7, 2011; and from
January 4, 2012, to January 6, 2012, in Albany, New York. The parties filed
post-hearing briefs on August 10, 2012, and reply briefs on October 19, 2012.

Aggregate argues that its Scotia worksite falls under the
jurisdiction of MSHA, which preempts the jurisdiction of OSHA. Therefore, the
company argues, the court must vacate the citations addressing the Scotia
worksite.

Block contends the Secretary failed to establish violations
of the three standards for which it was cited at its Kingston worksite. The
company also argues that, should the court find any violations exist, the
violations should not be classified as repeat. Block contends it is not the
employer at the previously cited facility that is the basis for the repeat
classification.

For the reasons discussed below, the court finds that
OSHA’s jurisdiction over Aggregate’s Scotia worksite is preempted by MSHA under
§ 4(b)(1) of the Occupational Safety and Health Act of 1970 (Act). Therefore,
all citations issued under Docket Nos. 09-2011 and 09-2055 are vacated. Under Docket
No. 10-0447, the court vacates Item 1 of the Citation. The court affirms Items
2a and 2b of the Citation as repeat violations, and assesses a grouped penalty
of $5,000.00.

Docket Nos. 09-2011 and 09-2055

Background

Aggregate
owns and operates a sand and gravel mine located at 427 Sacandaga Road, Scotia, New
York. Several buildings are on the property, including a group of buildings
referred to as “Plant 5,” located next to the quarry, and Building 1 and
Building 2, which are referred to collectively as the “Bag Plant” (Exh. C-3).
Building 1 and Building 2 are approximately 600 feet from the quarry and Plant

5. Railroad tracks run across the property between the quarry/Plant 5 area and
   the Bag Plant (Tr. 955, 1808-1809). A private road leads directly from the
   quarry to the Bag Plant (crossing over the railroad tracks) (Tr. 955). The
   quarry, Plant 5, and the Bag Plant are all located on one parcel of real
   property, owned by Aggregate, with the street address of 427 Sacandaga Road
   (Tr. 1637-1648).

Aggregate
mines sand and gravel from the quarry near the Plant 5 area. Aggregate mines
approximately 1,500 to 2,000 tons of material a day. Aggregate processes the
excavated material by running it through a series of crushers, screens, and
wash plants in the Plant 5 buildings. The screens in the wash plant separate
the mined material into four different sized products (one sand and three
stone). Aggregate places each product in its own stockpile. Aggregate then
either loads the products into trucks to be sold or moves them to another
stockpile for storage (Tr. 928-929, 1062-1063, 1093-1094, 1097-1099).

MSHA
classifies Aggregate’s quarry as an “intermittent mine,” which it inspects
annually (MSHA inspects active mines twice a year) (Tr. 1068, 1139). There is
no record of MSHA inspecting the Bag Plant across the railroad tracks from
Plant 5 (Tr. 1069-1070). The Secretary does not dispute that Aggregate’s quarry
and the Plant 5 area constitute a mine that is under the jurisdiction of MSHA.
The Secretary contends, however, that OSHA has jurisdiction over the Bag Plant.

The
Bag Plant buildings housed equipment, including screens, dryers, elevators,
hoppers, and conveyors, as well as equipment for bagging the finished product
(Tr. 879, 883). Building 1 contained equipment and a silo
for storage (Tr. 882-883). Building 2 contained a maintenance shop used for
repairing mining equipment and was where the bagging operation was performed
(Tr. 721, 1678-1679). Loaders hauled approximately 60 to 80 tons of excavated
material per day from the Plant 5 quarry to the Building 2 for bagging (Tr.
713, 1647, 1687). Bag Plant employees bagged and packaged mineral and
construction materials, including stone, sand, cement, Portland cement,
blacktop, salt, and premix aggregates such as concrete mix, mortar mix, and
mix, specialty products, high bond, and surface bond. Most of these materials
originated outside of Aggregate’s quarry (Tr. 928-929).

In
May 2009, compliance safety and health officer (CSHO) Edwin Rodriguez received
a telephone complaint regarding health and safety hazards in Building 2 of the
Bag Plant at the Scotia worksite. His supervisor assigned Rodriguez to
investigate the complaint (Exh. C-1; Tr. 43).

Initially Rodriguez went to the worksite for Electric City,
another company owned by the Tesiero family, where Electric City’s safety
director (who was also the safety director for Aggregate, as well as Block)
informed him that Aggregate’s facility was “down the road” (Tr. 51). The safety
director told Rodriguez that Aggregate’s site was “on a quarry” and was “part
of MSHA” (Tr. 182). Rodriguez called his supervisor and relayed the safety
director’s information to her. Rodriguez’s supervisor told him, “That’s MSHA’s
jurisdiction,” and instructed him to return to OSHA’s office (Tr. 182).

Subsequently,
OSHA reversed its decision and instructed Rodriguez to proceed with the
inspection of Aggregate’s Bag Plant. On May 12, 2009, Rodriguez arrived at
Aggregate’s site and conducted an inspection of Building 2, limited to the
complaint items. Aggregate’s safety director and its plant manager accompanied
Rodriguez during his walkaround (Tr. 55, 183, 238). Based upon his inspection,
Rodriguez recommended the Secretary issue citations for safety violations (his
recommendation was the basis for the citations issued under Docket No.
09-2011). Rodriguez also requested OSHA send out an industrial hygienist to
inspect Building 2, due to the amount of dust he observed (Tr. 64).

On
May 19, 2009, Rodriguez returned with industrial hygienist (IH) Jason Martin to
conduct the health inspection. Martin conducted a walkaround inspection of
Building 2, accompanied by Rodriguez, the safety director, and the plant
manager (Tr. 406-407). On June 3, 2009, Martin returned to Building 2 to
conduct air sampling of employees during the bagging operation (Tr. 410-411).
Martin visited Aggregate’s site a third time, on June 17, 2009, to observe
Aggregate’s surface bonding process (Tr. 488-489). Based on Martin’s inspection
of Building 2, the Secretary issued the citations for health violations under
Docket No. 09-2055.

Each
party presented an expert witness at the hearing. The Secretary relied on L.
Harvey Kirk, a Senior Mine Safety and Health Specialist in MSHA’s Office of
Metal and Non-Metal Safety. The court qualified him as an expert in mining and
milling processes (Tr. 1452). Mr. Kirk never visited the Bag Plant, but formed
his opinions of its processes by viewing aerial photographs of the site,
diagrams of Building 1 and Building 2, photographs of equipment, and reviewing
depositions taken during discovery (Tr. 1410). Mr. Kirk produced a report based
on his findings (Exh. C-76). Mr. Kirk concluded that the Bag Plant was not a
mine within the meaning of the Mine Act.

Aggregate
presented David D. Lauriski, president of Safety Solutions International, a
safety and health management company that caters to clients in the mining
industry. Mr. Lauriski is a former Assistant Secretary of Labor for MSHA (Exh.
R-33; Tr. 1720). The court qualified him as an expert in mining and milling
processes (Tr. 1742). Mr. Lauriski visited the Bag Plant twice, on December 1,
2010, and again on January 5, 2011 . The Bag Plant was shut down on both
occasions. Mr. Lauriski concluded the Bag Plant was a mine within the meaning
of the Mine Act.

Aggregate
ceased operating the Bag Plant following the OSHA inspection, citing budget
considerations (Tr. 922).

Preemption Under § 4(b)(1)

Aggregate contends the citations issued under Docket Nos.
09-2011 and 09-2055 must be vacated because OSHA lacks jurisdiction over its
worksite. Aggregate argues that the quarry on its site constitutes a mine,
giving MSHA statutory authority over the entire site.

Section 4(b)(1) of the Act, 29 U.S.C § 653(b)(1), provides:

Nothing in
this Act shall apply to working conditions of employees with respect to which
other Federal agencies . . . exercise statutory authority to prescribe or
enforce standards or regulations affecting occupational safety or health.

In determining whether OSHA’s authority is preempted under
§ 4(b)(1), the Commission evaluates “(1) whether the other federal agency has
the statutory authority to regulate the cited working conditions, and (2) if
the agency has that authority, whether the agency has exercised it over the
cited conditions by issuing regulations having the force and effect of law.” JTM
Industries, 19 BNA OSHC 1697, 1699 (No. 98-0030, 2001).

The second prong of the Commission’s evaluation (whether
MSHA has exercised its authority over the cited working conditions by issuing
applicable regulations) is not at issue here—the Secretary concedes MSHA has
issued the requisite regulations. Therefore, the only factor under
consideration is whether MSHA has the statutory authority to regulate Building
2 at Aggregate’s worksite.

“The Commission gives considerable weight to a federal
agency’s representation as to its authority to regulate cited working
conditions.” Id. Under the Federal Mine Safety and Health Act of 1977
(Mine Act), 30 U.S.C. § 803, MSHA has jurisdiction to regulate the working
conditions at a worksite where employees are extracting minerals, milling minerals,
or preparing coal or other minerals. Section 3(h)(1) of the Mine Act, 30 U.S.C
§ 802(h)(1), defines “coal or other mine” as:

(A) an area of land from
which minerals are extracted in nonliquid form or, if in liquid form, are
extracted with workers underground, (B) private ways and roads appurtenant to
such area, and (C) lands, excavations, underground passageways, shafts, slopes,
tunnels and workings, structures, facilities, equipment, machines, tools, or
other property including impoundments, retention dams, and tailings ponds, on
the surface or underground, used in, or to be used in, or resulting from, the
work of extracting such minerals from their natural deposits in nonliquid form,
or if in liquid form, with workers underground, used in, or to be used in, the
milling of such minerals, or the work of preparing coal or other minerals, and
includes custom coal preparation facilities.

The inclusion of “structures, facilities, equipment,
machines, [and] tools” in section (C) of the definition signals the intention
of Congress that the Mine Act be interpreted broadly:

[T]here may be a need to
resolve jurisdictional conflicts, but it is the Committee’s intention that what
is considered to be a mine and to be regulated under this Act be given the
broadest possible interpretation, and it is the intent of this Committee that
doubts be resolved in favor of the inclusion of a facility within coverage of
the Act.

S.
Rep. No. 181, 95 th Cong, 1 st Sess. 14 (1977).

Shortly
after the Mine Act took effect, OSHA and MSHA entered into an interagency
agreement. The agencies published a “memorandum of understanding” (MOU), the
purpose of which was “to delineate certain areas of authority” and “provide a
procedure for determining general jurisdictional questions” (Exh. C-77, p. 1).
The MOU explicitly assigns to MSHA jurisdiction over milling processes.

Milling consist of one or
more of the following processes: crushing, grinding, pulverizing, sizing,
concentrating, washing, drying, roasting, pelletizing, sintering, evaporating,
calcining, kiln treatment, sawing and cutting stone, heat expansion, retorting
(mercury), leaching, and briquetting.

(Exh.
C-77, p. 4).

Aggregate
contends two of the listed milling processes, sizing and drying, occurred in
Building 2. The Secretary argues the fundamental processes in which employees
engaged in Building 2 were bagging and packaging materials, which are not
milling processes: “[M]ost of the material that was mined in Plant 5 was
processed and sold without going to the Bag Plant. The material that did go to
the Bag Plant was crushed, washed, and screened at the mine , not at the
Bag Plant.” (Secretary’s brief, p. 46, emphasis in original).

Sizing

The
MOU defines sizing as “the process of separating particles of mixed sizes into
groups of particles of all the same size, or into groups in which particles
range between maximum and minimum sizes” (Exh. C-77, pp. 4-5). Various
Aggregate management personnel testified generally that the company engages in
sizing in the Bag Plant. The testimony of the employees who actually worked in
the Bag Plant was more specific, however, and raised doubts regarding Building
2’s sizing operation.

The Bag Plant manager testified Aggregate used screens, or
“shakers,” to sift the material into different sizes (Tr. 1026-1027). Building
2 employees processed the excavated sand intended for the surface bonding
operation by passing it through one screen to remove oversized particles. The
oversized particles were not further used, but were discarded (Tr. 1007, 1047).
A former Aggregate employee likewise testified he observed excavated material
in Building 2 being sifted through a grate to separate large rocks from the
sand mix. The large rocks were taken off the grate and tossed out into the yard
outside Building 2 (Tr.689-690).

The
Secretary argues this activity was not sizing within the meaning of the MOU,
but was instead “scalping,” which is the process of removing unwanted material.
The court agrees with the Secretary. The MOU requires the sizing process to
separate particles into groups of “all the same size.” Here the Bag Plant
employees only divided the material into two groups—the sand, which was further
processed and sold, and all the oversized particles. The oversized particles
did not “range between minimum and maximum sizes.” There was no maximum limit
imposed. The oversized particles were also not grouped for processing. They
were treated as waste and discarded.

The
definition of sizing in the MOU provides specific guidelines for the process.
Based on the evidence presented here, Aggregate’s process did not meet the
terms of the definition. It is determined that Aggregate was not engaged in
sizing in Building 2. 

Drying

The MOU defines drying as “the process of removing
uncombined water from mineral products, ores, or concentrates, for example, by
the application of heat, in air-acutated vacuum type filters or by pressure
type equipment” (Exh. C-77, p. 5). Building 2 operations included drying a certain
amount of material excavated from the quarry to produce a masonry sand mix,
that would then be bagged (Tr. 1652-1653). Excavated material would be “dumped
into a big barrel that has a [furnace] gun on the end of it” that would “spin
and fluff” the sand to dry it (Tr. 1654-1655). Aggregate used the dryer room
twice a week on average (Tr. 935). Employees could not bag sand with moisture
in it because it would compromise the quality of the product (Tr. 1678).

The Secretary argues the “limited drying” that occurred in
Building 2 was not drying as contemplated by the MOU:

[It] was done simply to dry
out the moisture in the materials which have been sitting outside; it did not
chemically alter the materials. . . . Materials were sent through the dryer to
separate them because the material was wet or frozen from being outside, not
from being mined; the material did not stay dry between mining and bagging.

(Secretary’s brief, pp. 21-22).

Nothing in the MOU’s definition of drying indicates that
the drying must effect a chemical change in the material. Employees in the Bag
Plant were applying heat to excavated material hauled directly from the mine in
order to dry the material. No previous drying occurred in the Plant 5 area.

The
Secretary’s expert, Mr. Kirk, distinguished between drying as a milling
activity and “incidental drying.” In his view, the drying that took place in
Building 2 was not integral to processing the sand as a finished product. Mr.
Kirk regarded the drying in Building 2 as incidental to the milling process,
done simply to make it easier to move and load the sand:

Dried material flows better
through chutes. It doesn’t get carried over on conveyors and then spill off at
the return rollers. The materials that are dry don’t cling together, the larger
particles with the small particles. They segregate better. If you’re working in
cold climates like this, and you put wet material into a silo, and the
temperature drops like we might find outside today, you will get a block of
solid material when the temperature drops.

(Tr. 1482).

In
support of her position that merely drying some excavated material does not
qualify as drying within the meaning of the MOU, the Secretary cites a seminal
MSHA case, Oliver M. Elam, 4 FMSHRC 5 (1982). Elam operated a commercial
dock on the Ohio River from which coal and other material were loaded onto
barges. Elam had a crusher on site that it used occasionally to break up large
pieces of coal to make them easier to load. MSHA asserted jurisdiction over the
company because it engaged in crushing coal, a milling activity. The company
disputed MSHA’s jurisdiction.

MSHA’s
Review Commission sided with Elam, finding MSHA did not have authority over the
company’s worksite. In so doing, the Commission articulated its test for
whether a given process is appropriately classified as a milling operation:

[I]nherent in the
determination of whether the operation properly is classified as “mining” is an
inquiry not only into whether the operation performs one or more of the listed
work activities, but also into the nature of the operation performing such
activities.

Id. at 7.

MSHA’s
Review Commission held that Elam’s work in crushing the coal was done in order
to make it easier to load, rather than to make it more suitable for its end
use:

[W]ork of preparing coal
connotes a process, usually performed by the mine operator engaged in the
excavation of the coal or by custom preparation facilities undertaken to make
coal suitable for a particular use or to meet market specifications.

Id. at 8.

Here,
Aggregate, the mine operator, engaged in the excavation of the sand and gravel
and dried the material at the Bag Plant, its own facility, to make it more
suitable for use by the end user. Mr. Kirk acknowledged the drying done by
Aggregate not only made the material easier to handle for storing and loading,
it made it more suitable for its end use:

Also, if you’re packaging
the materials, customers prefer to have dry material come out of their bags . .
. . Some of the materials that are bagged in these processes include cement. If
the materials are moist, when they’re mixed with the cement, they will begin to
hydrate the cement which means the cement will start to set up and get hard,
and you will have clumps at the least, or you could have the entire bag turn
hard and be unusable. So the dryness is important to the bagging process, to
the bagging process and also to the handling of it through their system as its
being conveyed and stored.

(Tr. 1483; emphasis added).

Here,
the Secretary’s expert himself concedes that the drying process done in the Bag
Plant renders the material more suitable for its end use. Indeed, failing to
dry the material could result in an unusable product.  

The
record establishes that dying occurred in Building 2. This milling process is
not the primary task in which the Bag Plant employees engaged, but it was a
regular and significant part of Building 2’s weekly schedule of operations. The
MOU does not require a certain volume of material to be milled at a facility
before it is determined to be under the jurisdiction of MSHA. The limited drying
process that occurred in Building 2 is sufficient to bring the Bag Plant under
MSHA’s authority.

Maintenance Shop

Furthermore, it is undisputed that Aggregate employees
repaired mining equipment in one of the rooms of Building 2. Aggregate’s
maintenance supervisor had his own crew, whom he assigned from the maintenance
shop in Building 2. In the maintenance shop the maintenance crew repaired
crusher parts and bucket loaders that were damaged in the quarry (Tr.
1025-1026). The maintenance crew worked in all areas of Aggregate’s property,
including the sand and gravel mine (Tr. 968). The maintenance supervisor met
with his crew at the maintenance shop and from there assigned tasks throughout
Aggregate’s property, including the gravel and sand mine (Tr. 713, 721, 889,
968). CSHO Rodriguez conceded that Aggregate’s maintenance crew worked in both
areas of the property: “[T]hey would do maintenance on this side, on the
bagging facility, but they also worked on the quarry side” (Tr. 74). This alone
is sufficient to bring the Bag Plant within the purview of the Mine Act.

MSHA’s Lack of Enforcement

The
Secretary argues that, despite annual inspections of the quarry and Plant 5
area, MSHA had never conducted an inspection of the Bag Plant. MSHA Inspector
Lynn Allen testified that when he asked the Plant 5 manager about the Bag Plant
on the other side of the railroad tracks, the manager told him the property
across the railroad tracks was not under MSHA (Exh. C-69, pp.18-19). MSHA
Inspector Matthew Mattison testified that when he inquired about the facility
on the other side of the tracks, the Plant 5 manager informed him the facility
was a bagging plant that was not under MSHA’s jurisdiction (Tr. 1064, 11076,
1085-1086). MSHA Inspector James Logan stated that when he had finished
inspecting the quarry and the Plant 5 area during his inspection, he asked the
Plant 5 manager if there were any other parts of the mine property that needed
to be inspected. The Plant 5 manager told him no (Tr. 1110, 1123).

The Secretary’s contends that Aggregate has, through the
years, told the various MSHA inspectors who have asked about the Bag Plant that
it is not under MSHA’s jurisdiction. Therefore, she argues, Aggregate should be
held to this position and not be permitted to assert now that the Bag Plant is,
in fact, under MSHA’s authority.

The Secretary’s argument is rejected. It should be obvious
that the mine operator is not entitled to set the jurisdictional limits of its
property. The MSHA inspectors relied on the assurances of Aggregate’s plant
manager, an interested party likely not inclined to invite further inspection
of his worksite, to tell them where they should inspect. They were not required
do so. As MSHA inspector Logan acknowledged, MSHA has “warrantless right of
entry” (Tr. 1108). See § 103(a), 30 U.S.C. § 813(a); Donovan v.
Dewey, 452 U.S, 594 (1981). It was within their authority to inspect the
Bag Plant (with or without the plant manager’s consent).

MSHA inspector James Logan conceded that it is not up to
the employer to define the limits of MSHA’s authority: “Jurisdiction is
dependent upon what the process is being conducted there” (Tr. 1137).
Jurisdiction is determined by the specific conditions of the worksite—not the
opinion of a plant manager or any other employee.

MSHA’s previous failure to inspect the Bag Plant is not a
factor in determining current jurisdiction. The courts have rejected the
argument that failure to exercise statutory authority negates preemption:

United Energy’s argument
assumes that the enforcement history of the agency is relevant in determining
whether MSHA has preempted OSHA’s jurisdiction. It is not. Under section
4(b)(1), MSHA may preempt OSHA’s regulatory authority by “exercising statutory
authority to prescribe . . . regulations affecting” the area at issue. The
plain language of that section indicates that this is all that MSHA must do to
preempt this regulatory field.

United Energy Services,
Inc. v. MSHA, 35 F.3d 971, 977 (4 th
Cir. 1994).

The
Commission is similarly emphatic that MSHA’s failure to inspect a site over
which it has authority is not relevant to the issue of preemption: “A lack of
enforcement, of course, does not mean that MSHA does not have authority
to enforce its regulations. MSHA’s authority, not the vigor of its enforcement,
is the subject of our inquiry under section 4(b)(1) of the OSH Act.” JTM
Industries, 19 BNA OSHC at 1701-1702.

The
record establishes Aggregate was engaged in drying excavated material in
Building 2 and that its maintenance crew repaired mining equipment in the
maintenance shop located there. Keeping in mind that it is the intent of
Congress that “doubts be resolved in favor of the inclusion of a facility
within coverage of the [Mine] Act,” the court determines the Bag Plant was a
mine within the scope of MSHA’s regulatory authority. Because MSHA has
statutory authority to regulate the working conditions in the Bag Plant, the
court concludes MSHA preempts OSHA’s authority under § 4(b)(1) of the Act. Accordingly,
all items of the citations issued under Docket Nos. 09-2011 and 09-2055 are
vacated.

Docket No. 10-0447: The Kingston Worksite

Background

On September 4, 2009, CSHO Rodriguez and IH Martin arrived
at Block’s worksite, a ready mix facility, in Kingston, New York, in response
to an employee complaint. The OSHA representatives met with Block’s plant
manager and its safety director (who is also Aggregate’s safety director), who
accompanied them on a walkaround inspection (Tr. 164, 541-548). Based upon the
inspection conducted by CSHO Rodriguez and IH Martin, the Secretary issued a
citation alleging three repeat violations of OSHA standards to Block on
February 11, 2010.

The Citation

The
Secretary has the burden of establishing the employer violated the cited
standard.

To prove a violation of an
OSHA standard, the Secretary must show by a preponderance of the evidence that
(1) the cited standard applies; (2) the employer failed to comply with the
terms of the cited standard; (3) employees had access to the violative
condition; and (4) the cited employer either knew or could have known with the
exercise of reasonable diligence of the violative condition.

JPC Group Inc., 22 BNA OSHC 1859, 1861 (No. 05-1907, 2009).

Item 1: Alleged Repeat Violation of 29 C.F.R. § 1910.132(a)

Item 1 of the Citation alleges:

Protected equipment . . .
[was] not provided, used, and maintained . . . wherever it was necessary by
reasons of hazards of processes of environment [or] chemical hazards . . .
encountered in a manner capable of causing injury or impairment in the function
of any part of the body through absorption, inhalation, or physical contact:

A.  On
or about 09/04/2009, in the yard washing area, for employees that work with
TKO-S which contains ingredients such as, but not limited to, hydrochloric
acid. The employer did not enforce the use of personal protective equipment
such as, but not limited to, safety glasses and gloves.

Section
1926.1910.132(a) provides:

Protective equipment,
including personal protective equipment for eyes, face, head, and extremities,
protective clothing, respiratory devices, and protective shields and barriers,
shall be provided, used, and maintained in a sanitary and reliable condition
wherever it is necessary by reason of hazards of processes or environment,
chemical hazards, radiological hazards, or mechanical irritants encountered in
a manner capable of causing injury or impairment in the function of any part of
the body through absorption, inhalation or physical contact.

As
they conducted the walkaround inspection, CSHO Rodriguez and IH Martin observed
an employee washing a ready mix truck in the facility’s yard (Exh. C-55; Tr.
164, 551). The employee was wearing “normal clothing” and was not wearing face
protection or gloves (Tr. 165). The employee had transferred a solution from a
55-gallon drum to a 5-gallon bucket. IH Martin later determined the solution
was “a TKO solution that’s an acid wash to wash the ready mix trucks” (Exh.
C-54; Tr. 549). The plant manager acknowledged that the employee should have
been using face and hand protection. He informed the OSHA representatives that
Block provides personal protective equipment (PPE) to its employees (Tr. 551).

Applicability of the Standard

Block
does not dispute the applicability of § 1910.132(a) to the cited condition. The
standard requires employees to wear PPE when exposed to chemical hazards. It is
undisputed the TKO solution contained hydrochloric acid, a corrosive chemical.
Section 1910.132(a) applies.

Failure to Comply with the Terms of the Standard

Block’s safety director testified that the TKO solution
Block uses comes in a 55-gallon drum, and has a concentration of 22%
hydrochloric acid (Tr. 1219). Upon receipt of the drum, Block employees
transfer half of the solution to another 55-gallon drum and add water to the
two half-full drums, resulting in two drums containing a solution with a
concentration of 11% hydrochloric acid (Tr. 1284-1285).

During
the inspection, Block provided a material safety data sheet (MSDS) to OSHA for
the TKO solution. That MSDS was for a product called TKO-S (Exh. C-54; Tr.
549-550). Dr. Kathleen Fagan is a Board-certified physician who specializes in
occupational medicine. She holds a master’s degree in Public Health and has
thirty years of experience in her field (Tr. 748-749). The court qualified her
as an expert in occupational medicine and health hazards, including the
potential health effects of exposure to chemical contact hazards (Tr. 769,
778-779). Dr. Fagan called Commercial Maintenance Supply, Inc., the
manufacturer of the TKO solution, to obtain a copy of the MSDS more legible
than the one supplied by Block. The manufacturer informed her that the product
it supplies to Block is actually TKO-PLUS3 (Exh. C-61; Tr. 803-804, 839). The MSDS
for TKO-S states that its concentration of hydrochloric acid is less than 11%,
but the raw material contains a maximum of 36.5%. The MSDS for TKO-PLUS3 states
that the concentration of hydrochloric acid is less than 70%, but the raw
material contains a maximum of 36.5% (Exhs. C-54, C-61; Tr. 805).

Hydrochloric acid is a hazardous substance that “can cause
serious burns upon contact with the skin,” “can cause burns to the eyes,” and
“be irritating when inhaled” (Tr. 803-804, 807-808). NIOSH recommends the use
of PPE for workers exposed to hydrochloric acid, including gloves and splash
goggles (Tr. 808). A solution containing between 3% and 10% hydrochloric acid
“becomes irritating to the skin, and above that depending on the length of time
of the exposure, you will begin to see burns” (Tr. 807).

Block argues the Secretary did not establish the actual
concentration of the solution the employee was using at the time he was
observed washing his truck. The company speculates the employee may have
further diluted the solution with water in the 5-galllon bucket. IH Martin did
not take a sample of the solution and have it analyzed in a lab (Tr. 635). Dr.
Fagan stated if the solution was diluted to below 3%, it would be unlikely to
cause harm to an exposed employee (Tr. 834-835). Block contends that without an
analysis, the Secretary cannot prove the exposure levels of the TKO solution
presented a significant risk to the employee.

Block’s argument is rejected. There is no persuasive
evidence the employee further diluted the solution once he transferred it to
the bucket. The employee involved did not testify. Block’s safety director
stated that drivers at another Cranesville plant told her they add additional
water to the solution before using it to wash their trucks, but she had no
personal knowledge that Block’s drivers followed this practice (Tr. 1287-1288).
Block cites IH Martin’s affirmative answers at the hearing to the questions,
“[D]id you consider that water was added to that solution to conduct the
washing?” and “And, do you have evidence that water was added?” as evidence the
employee further diluted the solution (Tr. 635). The court regards his
affirmative answers as ambiguous as to whether IH Martin was referring to the
initial dilution that occurred upon arrival of the product at the plant (when
it was diluted by half), or to a later dilution made by the employee. Block
itself requires its employees to wear PPE when using the TKO solution (Exh.
R-24).

The Secretary has established that the employee violated
the terms of § 1910.132(a) by failing to wear PPE while washing his truck with
the TKO solution containing a concentration of at least 3% hydrochloric acid, a
hazardous chemical.

Employee Access to Violative Condition

Block’s
employee had access to the violative condition. CSHO Rodriguez and IH Martin,
as well as the Block’s plant manager and its safety director, observed the
employee in the act of using the TKO solution without wearing the required PPE
(Exh. C-55).

Employer Knowledge

The
Secretary contends Block had constructive knowledge of the violation because
the employee was working in plain view in the yard of the Kingston facility.
Block argues the plant manager, whose office did not afford a view of the yard,
had no actual or constructive knowledge of the employee’s violative conduct.

Block has a written safety program which includes a PPE
policy requiring employees to wear PPE when potentially exposed to hazardous
substances (Exh. C-73). Block also prepared a Job Safety Analysis for the
Kingston facility that identified hazards and prescribed corrective or
preventive actions (Exh. R-20). Block trains new hires in the PPE policy and
retrains existing employees on an annual basis (Tr. 1298). Block provides its
employees with all required PPE (Tr. 638). The employee observed washing his
truck acknowledged that he had received PPE training and that his PPE was in
his truck (Tr. 1363).

The only two supervisory employees in attendance at the
facility that the record mentions are the plant manager and the safety
director, whom the plant manager called to the facility when the OSHA personnel
arrived. Prior to the discovery of the employee washing his truck, the plant
manager had attended an opening conference with CSHO Rodriguez and IH Martin,
had called the safety director, and had waited with the OSHA representatives
for her arrival. The plant manager then accompanied the OSHA representatives on
the walkaround inspection.

There
is no indication in the record how long the employee had been engaged in
washing his truck when he was discovered. It is possible he did not begin the
violative activity until after the OSHA personnel arrived. The plant manager’s
attention was entirely taken up with the opening conference and OSHA inspection
once CSHO Rodriguez and IH Martin arrived. The court concludes the plant
manager’s failure to discover the employee’s violative conduct was not due to
the lack of reasonable diligence. The employee was engaged in a transitory
activity that violated written safety procedures in which he had been trained.

The
Secretary has failed to establish Block had either actual or constructive
knowledge of the violative conduct. Item 1 of the Citation is vacated.

Items 2a and 2b: Alleged Repeat Violations of 29 C.F.R. §§
1910.1200(f)(5)(i) and (ii)

Items
2a and 2b of the Citation each allege:

On or about 09/04/2009, in
the yard washing area, a 5 gallon container of TKO-Acid solution was not
labeled with its contents.

Sections
1910.1200(f)(5)(i) and (ii) provide in pertinent part:

[T]he employer shall ensure
that each container of hazardous chemicals in the workplace is labeled, tagged
or marked with the following information:

a.   Identity
of the hazardous chemical(s) contained therein; and

(ii) Appropriate
hazard warnings, or alternatively, words, pictures, symbols, or combination
thereof, which provide at least general information regarding the hazards of
the chemicals, and which, in conjunction with the other information immediately
available to employees under the hazard communication program, will provide
employees with the specific information regarding the physical and health
hazards of the hazardous chemical.

Items 2a and 2b refer to the 5-gallon bucket containing the
TKO solution cited in Item 1 of the Citation. Nothing on the exterior of the
bucket identified the contents in the bucket or warned of the potential hazards
posed by contact with the contents (Tr. 561). Block’s employees routinely
transferred the solution from the 55-gallon drum (which was labeled) into the
5-gallon bucket when they used the solution for cleaning. They “placed the
larger container of solution into the smaller one so that they could use a
brush to brush the truck off” (Tr. 561).

Applicability of the Standard

The cited standard applies to the cited conditions. Section
1910.1200(b)(2) of the Hazard Communication Standard (HCS) states that the HCS
“applies to any chemical which is known to be present in the workplace in such
a manner that employees may be exposed under normal conditions of use or in a
foreseeable emergency.” Section 1910.1200(b)(1) requires “all employers to
provide information to their employees about the hazardous chemicals to which
they are exposed.” The TKO solution at issue contains hydrochloric acid, a
hazardous chemical.

Failure to Comply with the Terms of the Standard

Block
stored the 55-gallon labeled drum and the 5-gallon unlabeled bucket outside its
building at the worksite (Exhs. C-56 through C-59; Tr. 559-561). Block contends
it is exempt from the labeling requirement under § 1910.1200(f)(8) of the HCS.
That exemption provides in pertinent part:

The employer is not required
to label portable containers into which hazardous chemicals are transferred
from labeled containers, and which are intended only for the immediate use of
the employee who performs the transfer.

As
the party claiming the exemption, Block has the burden of proving it meets the
requirements of § 1910.1200(f)(8). IH Martin acknowledged that the employee at
issue transferred the TKO solution to the bucket for the immediate use of
washing his truck (Tr. 637). It is undisputed, however, that the employee left
the unlabeled bucket containing the TKO solution sitting out after finishing
with it (Exhs. C-56 through 59; Tr. 556, 562).

Sections 1910.1200(f)(5(i) and (ii) are designed to provide
employees with information regarding the hazardous chemicals to which they may
be exposed in the workplace. After the employee who originally used the
solution in the bucket left the area, another employee could have come into
contact with the contents of the unlabeled bucket. The absence of labeling
could delay appropriate treatment of any injuries sustained by contact with the
corrosive chemical. Block has failed to establish its employee transferred the
contents of the labeled drum to the bucket only for immediate use, under §
1910.1200(f)(8).

Block’s failure to comply with the terms of §§
1910.1200(f)(5)(i) and (ii) is established.

Employee Access to Violative Condition

Block stored the unlabeled bucket in an outside area,
accessible to all employees working at the facility. Block had provided nine
employees with face shields, which it designated as being “strictly for truck
wash, TKO” (Exh. R-24; Tr. 1278). The day of the inspection, the employee who
had used the bucket to wash his truck left the unlabeled container sitting out,
still full of the TKO solution (Tr. 556, 559, 562). Block’s employees had
access to the violative condition.

Employer Knowledge

Block
had actual knowledge its employees transferred the TKO solution to an unlabeled
bucket. It was Block’s practice to store the unlabeled bucket in plain view
next to the TKO drum for use by its employees (Tr. 556, 562). The safety
director testified she was aware Block had difficulty keeping the bucket
labeled because the labels would get wet and smear or peel off. She had
experimented with laminating the labels and attaching them to the buckets with
zip ties, but those regularly ripped off (Tr. 1265-1266).

Block
did not establish the employee violated a company rule when he left the bucket
of TKO solution sitting out. Block does not assert the employee engaged in
unpreventable misconduct, an affirmative defense. The Secretary has established
Block committed a violation of §§ 1910.1200(f)(i) and (ii).

Repeat Classification

The Secretary classified Items 2a and 2b as repeat
violations of the Act. The Citation states:

Cranesville
Block was previously cited for a violation of this Occupational Safety and
Health Standard 1910.1200(f)(5)(i) which was contained in OSHA inspection
number 311974992, Citation Number 01, Item Number 8a, issued on 01/05/2009,
with respect to a workplace located at Big Boom Road, Glens Falls, New York
12801.

Cranesville
Block was previously cited for a violation of this Occupational Safety and
Health Standard 1910.1200(f)(5)(ii) which was contained in OSHA inspection
number 311974992, Citation Number 01, Item Number 8b, issued on 01/05/2009,
with respect to a workplace located at Big Boom Road, Glens Falls, New York
12801.

In order to establish a repeat violation, the Secretary
must prove that at the time of the alleged repeat violation, a Commission final
order exists against the same employer for a substantially similar violation. Potlatch
Corp., 7 BNA OSHC 1061, 1063 (No. 16183, 1979). The Secretary issued a
citation to “Cranesville Block Co. Inc.” for violations at a Glens Falls
facility on January 5, 2009. The Commission entered a final order for that
citation on February 23, 2009, but the name of the company was changed to
“Glens Falls Ready Mix, Inc.” (Exh. C-67). Items 8a and 8b of the citation in that case
allege violations of §§ 1910.1200(f)(5)(i) and (ii) for failing to label a
55-gallon drum of plasticizer containing a diluted solution of formaldehyde.
Block does not dispute that a final order exists in the Glens Falls case or
that the cited violations were substantially similar to the ones cited in Items
2a and 2b of the instant case. Block contends, however, that it is “a separate
and distinct corporate entity, and does not own the facility located at Big
Boom Road, Glens Falls, New York, which is owned by Glens Falls Ready Mix,
Inc.” (Block’s brief, p. 89).

Single Employer

Where the Secretary alleges a single employer relationship,
she bears the burden of proving its existence. Loretto-Oswego Residential
Health Care Facility, 23 BNA OSHC 1356, 1358, n. 4 (No. 99-0958, 2011), aff’d
692 F.3d 65 (2d Cir. 2012).

Under Commission precedent,
separate entities have been regarded as a single employer when three elements
are present: (1) a common worksite; (2) interrelated and integrated operations;
and (3) a common president, management, supervisor or ownership.

Altor,
Inc., 23 BNA OSHC 1458, 1463 (No. 99-0958,
2011), aff’d 23 BNA OSHC 2073 (3d Cir. 2012).

Cranesville Block Co., Inc., owns 20 to 30 facilities
engaged in operations including concrete block manufacturing, concrete ready
mix manufacturing, concrete precast, gravel pits, and sand pits. Cranesville
Aggregate Companies, Inc., mines and processes aggregates and operates
facilities at approximately ten sites. Cranesville Management Company is a
management company for all the Cranesville companies. It provides management
services for the following Cranesville companies: Cranesville Block Co. Inc., Cranesville
Aggregate Companies, Inc., Fulmont Ready-Mix Company, Inc., Glens Falls Ready
Mix, Inc., and John Tesiero, LLC. Cranesville Block Company wholly owns
Cranesville Management Co. (Exh. C-85; pp. 16, 18-20, 27, 30, 32). The issue is whether the necessary elements
exist to classify Cranesville Block Co. Inc., and Glens Falls Ready Mix, Inc.,
as a single employer.

(2)Common Worksite

It is apparent that Cranesville Block Co. Inc., and Glens
Falls Ready Mix, Inc., do not physically share a common geographic worksite
where their employees engage in ready mix operations; Block’s facility is in
Kingston, New York, while Glens Falls’s facility is in Glens Falls, New York.
The companies do, however, share a common worksite for their principal
executive offices. Cranesville Block Co. Inc., Cranesville Aggregate Companies,
Inc., Cranesville Management Company, Glens Falls Ready Mix, Inc., and Fulmont
Ready-Mix Company all use the same address as their mailing address and as
their principal executive offices: 1250 Riverfront Center, Amsterdam, New York,
12010 (Exhs. C-82, C-85, pp. 16, 29). The five companies share a suite in the
building (Exh. C-85, p. 107). The companies also share administrative personnel
who work at the common corporate worksite at Riverfront Center (Exh. C-84; Exh.
C-85, pp.105-106).

Block also maintains a physical presence at Glens Falls
facility. Exhibit C-9 is a copy of a photograph showing a billboard displayed
at the top of a building at the Glens Falls facility. The billboard reads:

Cranesville Block Co.

Glens Falls
Ready Mix

For
Concrete Call

(518) 793-1695

Block’s “CBC” company logo appears between the two
corporate names. Mr. Tesiero testified the purpose of the sign was to promote
customer “brand recognition” with Block (Exh. C-85, p. 288). The telephone
number connects to a dispatcher at the common corporate offices at Riverfront
Center, who takes orders on behalf of all the companies located there (Exh.
C-85, p. 288).

(3)Interrelated and Integrated Operations

From May 1, 2008, to November 10, 2009, Block, Aggregate,
Glens Falls, and Fulmont Ready-Mix Company, Inc., employed some of the same
employees, including those who worked in administration, billing, purchasing,
human resources, and safety. These shared employees were employed by
Cranesville Management Company and their salaries were funded by each of the
Cranesville companies on a pro-rata basis, based on the percentage of income
generated by each company. Employees were paid using one centralized payroll
system (Exhs. C-84, C-85, pp. 108-109, 111, 114, 118, 125, 133-134, 273).

Management employees from the four companies were also
employed by Cranesville Management Company and their salaries were funded and
allocated between each of the Cranesville companies, based on the percentage of
time spent doing work on behalf of each company (Exh. C-85, pp. 217-219; Tr.
1170). All four companies shared the same computer network and software,
expense coding system, website, and domain name for employee email addresses
(Exh. C-85, pp. 145, 152, 154, 212). The homepage of the companies’ website
reads, “The Home of the Cranesville Companies in Amsterdam, NY 12010” (Exh.
C-70).

The companies collectively provided benefits to their
employees. They shared a common pension plan and health insurance plan (Exh.
C-85, pp. 128-129, 136-141). The companies also shared a consolidated joint
application for extensions of credit, by which a purchaser of any Cranesville
product could submit an application to Block to use credit at any of the
Cranesville companies (Exh. C-85, pp. 223-226).

The Cranesville companies’ banking transactions were also
shared. Joseph Tesiero, his father John A. Tesiero, Jr., his mother Elizabeth
Tesiero, and his brother John A. Tesiero III, all of whom held officer
positions in at least one of the companies, each had signatory authority over
the bank accounts of all four companies, as well as Cranesville Management
Company (Exh. C-85, pp. 260-261). The Cranesville companies draw funds from
numerous accounts. In some circumstances different Cranesville companies issued
checks from the same account with the same routing number (Exh. C-85, pp.
78-83). The four companies received accounting services in accordance with a
single agreement with an outside accounting firm (Exh. C-85, pp. 252-253).
Block and Aggregate filed a consolidated federal tax return, as did Glens Falls
and Fulmont Ready-Mix, Inc. (Exh. C-85, pp. 253-254).

When a purchase is beneficial to all the companies managed
by Cranesville Management Company, one company pays the expense out of a
general fund. The expense is then allocated to each of the companies on a
pro-rata basis, based on the percentage of income generated by each company.
The Cranesville companies keep a running tally of which company has paid for
each purchase, as well as the company’s pro-rata share of the expense for each
purchase. The companies transfer money at the end of the year to balance out a
company’s account with the records of expenses paid (Exh. C-85; pp. 77-72).

(5)Common President, Management, Supervisor or Ownership

Joseph Tesiero’s sister is Carol T. Whelly, who is married
to William A. Whelly, Jr. Joseph Tesiero’s other sister, Elizabeth Gaines, is
married to William Gaines (Exh. C-85, pp. 17, 42, 44-45). From 2007 to 2009,
the officers of Cranesville Block Co. Inc. were: John A. Tesiero, Jr.,
president; John A. Tesiero III, vice-president; William A. Whelly, Jr.,
assistant vice-president; Steven M. Dowgielewicz , assistant vice-president; Carol T. Whelly,
secretary; and Elizabeth Tesiero, treasurer (Exh. C-83).

Block owns all the shares of Aggregate. From 2007 to 2009,
the officers of Aggregate were: Joseph Tesiero, president; William A. Whelly,
Jr., vice-president; Carol T. Whelly, secretary; and John A. Tesiero III,
treasurer (Exh. C-83).

From 2007 to 2009, the officers of Fulmont Ready-Mix
Company, Inc., were: Elizabeth Tesiero, president; John A. Tesiero III,
vice-president; Carol T. Whelly, secretary; Carol T. Whelly, treasurer; and
William A. Whelly, assistant treasurer (Exh. C-83).

Fulmont Ready-Mix Company, Inc., owns all the shares of
Glens Falls Ready Mix, Inc. From 2007 to 2009, the officers of Glens Falls were
identical to the officers of Fulmont: Elizabeth Tesiero, president; John A.
Tesiero III, vice-president; Carol T. Whelly, secretary; Carol T. Whelly,
treasurer; and William A. Whelly, assistant treasurer (Exh. C-83).

The four companies share the same safety director (Exh.
C-84). If OSHA showed up at any of the four
Cranesville companies, the policy was to call the safety director. She would
either go to the site herself or contact the regional coordinator to go to the
site (Exh. C-85; pp. 284-285). The four companies implemented the same safety
and health programs. Newly hired employees for all of the companies were
trained at the Riverfront Center, home of the common corporate worksite. Safety
training was provided at the same time to employees of different Cranesville
companies (Exh. C-85, pp. 231-233, 269-271).

Analysis

Based upon the three factors considered under the
Commission’s single employer test (common worksite; interrelation and
integration of operations; and common president, management, supervisor, or
ownership), the court determines Cranesville Block Co. Inc., and Glens Falls
Ready Mix, Inc., are a single employer. The record leaves no doubt that their
operations are extensively intertwined, that management and supervisory
personnel overlap, and that six members of the Tesiero family hold nineteen
officers’ positions in four companies.

The weakest factor is the element of a common worksite.
Block and Glens Falls do not share a geographic location where they perform
ready mix operation. They do, however, share a corporate office space, from
which their safety policies, payroll, benefits, administrative services, and
budget emanate.

Having considered the three factors in totality, the court
concludes that Block and Glens Falls are a single employer. Block is,
therefore, subject to a repeat violation of §§ 1910.1200(f)(f)(i) and (ii). As
noted, a final order existed against Glens Falls for substantially the same
violation at the time of the instant inspection (Exh. C-67). Items 2a and 2b of
the Citation are properly classified as repeat.

Penalty Determination

The Commission is the final arbiter of penalties in all
contested cases. “In assessing penalties, § 17(j) of the OSH Act, 29 U.S.C. §
666(j), requires the Commission to give due consideration to the gravity of the
violation and the employer’s size, history of violations, and good faith.” Burkes
Mechanical Inc., 21 BNA OSHC 2136, 2142 (No. 04-0475, 2007). Gravity is a
principal factor in a penalty determination and is based on the number of employees
exposed, duration of exposure, likelihood of injury, and precautions taken
against injury.” Siemens Energy and Automation, Inc., 20 BNA OSHC 2196,
2201 (No. 00-1052, 2005).

The Cranesville companies employed approximately 300
employees at the time of the OSHA inspection (Tr. 1326, 1332). As established
by the repeat violation, OSHA had previously cited Block for violating §
1910.1200(f), among other violations. There is no evidence that Block
demonstrated anything less than good faith with respect to the Kingston
inspection.

The Secretary asserts Block’s violation of §§
1910.1200(f)(i) and (ii) is of “medium severity” and “lesser probability.” The
rationale listed for this assessment is, “Hazard of chemical burns to skin and
eye, hazard existed intermittently” (Secretary’s brief, p. 158). The Secretary
proposed a grouped penalty of $10,000.00 for Items 2a and 2b, based on the
amount she would have proposed if the violation were serious and not repeat,
multiplied by five (Tr. 1332) .

The
record establishes Block had at least nine employees who had access to the
unlabeled bucket containing the TKO solution. The gravity of the violation is
mitigated by the PPE training the employees received. The violation was
apparently of short duration, since the OSHA representatives had observed the
employee using the unlabeled bucket of TKO solution during their walkaround.
The bucket was observed sitting unused during the same inspection.

Having
considered the relevant factors, the court determines that a penalty of
$5,000.00 is appropriate. 

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The
foregoing decision constitutes the findings of fact and conclusions of law in
accordance with Rule 52(a) of the Federal Rules of Civil Procedure.

ORDER

Based upon the foregoing decision, it is hereby ORDERED
that:

2. All
   items in Citation Nos. 1, 2, and 3, issued under Docket No. 09-2011, are
   vacated and no penalties are assessed;

4.   All items in Citation Nos. 1, 2, and 3,
issued under Docket No. 09-2055, are vacated and no penalties are assessed;

6.   Item 1 of Citation No. 1 (alleging a
repeat violation of § 1910.132(a)), issued under Docket No. 10-0447, is vacated
and no penalty is assessed; and

8.   Items 2a and 2b of Citation No. 1
(alleging repeat violations of §§ 1910.1200(f)(i) and (ii)), issued under
Docket No. 10-0447, are affirmed and a grouped penalty of $5,000.00 is
assessed.

SO
ORDERED.

/s/ 

Date:  March
12,
2013                                                         KEN
S. WELSCH

Atlanta                                                                       Judge