Equipment Holding, Inc., and its successors

Plain-English summary

Equipment Holding leased cranes and operators for longshoring work at the Port of Houston. After an accident involving one of its cranes, OSHA cited missing or incomplete load information, an excess counterweight, the absence of a load-indicating device, and inadequate maritime certification. Judge Stanley M. Schwartz found that Equipment Holding remained the crane operator's employer because it selected the operator, controlled crane operation and maintenance, and retained responsibility for regulatory compliance. He affirmed the rating-chart, counterweight, and load-indicator items as serious violations. He vacated the certification item because the company had arranged an inspection and reasonably relied on an acknowledgment indicating that operational testing and OSHA certification had occurred. The assessed penalties totaled $6,000.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1918.72(a), 1918.74(a)(2), 1918.74(a)(6), and 1918.74(a)(9).
• Outcome: Three serious crane-safety items affirmed and one certification item vacated; $6,000 total penalty assessed.
• Key point: The crane owner remained the operator's employer because it controlled the equipment, operator assignment, operating method, maintenance, and compliance.

Full text (OSHRC public release)

                           United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1244 North Speed Boulevard, Room 250
Denver, Colorado 80204-3582

Phone: (303) 844-3409 Fax: (303) 844-3759

SECRETARY OF LABOR,
Complainant,

                            v.                              OSHRC DOCKET NO. 97-1099

EQUIPMENT HOLDING, INC., and its
successors,
Respondent.

APPEARANCES:

      For the Complainant:
               David C. Rivela, Esq., U.S. Department of Labor, Office of the Solicitor, Dallas, Texas

      For the Respondent:
               Robert J. Killeen, Jr., Taylor S. Linkfield, Killeen & Fierro, P.L.C., Houston, Texas

Before: Administrative Law Judge: Stanley M. Schwartz

                                          DECISION AND ORDER

      This proceeding arises under the Occupational Safety and Health Act of 1970 (29 U.S.C.

Section 651 et seq.; hereafter called the “Act”).
Respondent, Equipment Holding, Inc., and its successors (Equipment Holding), at all times
relevant to this action maintained a place of business at Port of Houston, Houston, Texas where it
leased cranes for longshoring and stevedoring. Respondent admits it is an employer engaged in a
business affecting commerce and is subject to the requirements of the Act.
On February 9, 1997, following a report of an accident involving one of Equipment Holding’s
cranes, the Occupational Safety and Health Administration (OSHA) conducted an inspection of the
crane at the Port of Houston. As a result of that inspection, Equipment Holding was issued citations
alleging violations of the Act together with proposed penalties. By filing a timely notice of contest
Equipment Holding brought this proceeding before the Occupational Safety and Health Review
Commission (Commission).
 On September 15-16, 1998, a hearing was held in Houston, Texas. The parties have submitted
briefs on the issues and this matter is ready for disposition.
Employer/Employee Relationship
Equipment Holding maintains that OSHA erroneously issued the citations in the above
captioned matter, in that Port Cooper/T. Smith Stevedoring Company (Cooper), rather than Equipment
Holding was the controlling employer of the subject crane and its operator at the time of the accident.
Facts
On February 8, 1998, Rodney Wright, manager of the crane and gear department for Cooper
(Tr. 33), called, Jerry Godwin, crane manager for Equipment holding (Tr. 260), and told him he needed
a crane (Tr. 33-34). Wright testified that he told Godwin that he needed Equipment Holding’s 200 ton
American crane for pulling coils on City Dock #26; Godwin testified that Wright did not say what the
crane would be used for (Tr. 38-40, 301-304).
There was no written contract; both Wright and Godwin testified that Cooper had done business
for several years, and understood the rental conditions (Tr. 34-36, 55, 302-04). Godwin testified that
the renting stevedoring company tells him the crane size and number of part lines they want, when they
want it and what dock they want it on; he picks the operator, who takes it to the work site (Tr. 326-29).
Wright testified that the rental includes not only the crane, but an Equipment Holding operator who is
solely responsible for the crane, and its operation (Tr. 41). The operator moves the crane into position,
sets the crane up, levels it and performs the lifts (Tr. 36-37, 39, 57).
Cooper directs the operation insofar as telling the operator which hatch he will be working out
of (Tr. 41, 70). Cooper’s longshoremen hook the gear and block up to the hook for the operator (Tr.
57), and its flagman on the ship will signal the operator, letting him know how far to lower the block
into the hold (Tr. 58, 71). Once the load comes up, however, the operator is in control of the lift (Tr.
58). Wright stated that once the load is engaged, only the operator can ascertain how much weight is
on the hook, and refer to his charts in order to determine what boom angle is safe for the lift (Tr. 59).
Godwin agreed that the number part lines determine a crane’s capacity, but only the operator can figure
the appropriate boom configuration, after referring to the load charts (Tr. 330).
Wright testified that Equipment Holding is responsible for securing a P-number for its cranes, by
submitting the cranes’certification to the Port of Houston Authority, which issues the P-number,
clearing the crane for longshoring work at the port (Tr. 86). Wright testified that he checked the P-
number on the American crane before sending it down to Dock #26 (Tr. 66).

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Equipment Holding performs all the maintenance on its own cranes (Tr. 64). Cooper provides
no maintenance for the cranes, and any problems are reported by the operator to Equipment Holding
(Tr. 42-43). Godwin testified that it was the policy of Equipment Holding to inspect its cranes every
morning before starting work on a ship (Tr. 306). The inspections were to be performed by him and/or
the operator assigned to the crane (Tr. 308-09). If the operators found any deficiencies they were to
note them in a log. The operator was instructed not to run a crane with deficiencies (Tr. 310, 312-13).
Godwin stated that if any problems with a crane arose during the work day, the operator was to shut it
down and notify him (Tr. 324). Sometimes the operator would call an Equipment Holding mechanic
directly to perform repairs on a breakdown (Tr. 324-25).
Cooper has no right to use, and has never provided its own crane operator (Tr. 60, 326).
Moreover, it has no power to hire or fire the Equipment Holding operator; if an operator is
unsatisfactory, Jerry Godwin is notified and asked to replace him (Tr. 42-43, 70). Godwin testified that
he would evaluate any complaints and decide whether to act on them (Tr. 325). Equipment Holding
hires operators for its cranes (Tr. 264), certifies the competence of each crane operator, checking his
history, taking him through the operating procedures of the cranes, and authorizing his use of the crane
(Tr. 308-09). Randy Taylor, an Equipment Holding employee (Tr. 93, 265), was operating the crane
during the relevant periods on February 8, 1998 (Tr. 61).
Discussion
The Commission has reached the issue raised by Equipment Holding in Vergona Crane Co., 15
BNA OSHC 1782, 1992 CCH OSHD ¶29,775 (No. 88-1745, 1992). In Vergona, the Commission
found that the company which owned the cited crane, and not the company which leased the crane, was
properly cited as the employer of the crane operator. The Commission noted that in determining an
employee’s employer, the court must look to the party which has the right to control the manner and
means by which the work is accomplished, taking into account (inter alia):
. . .the skill required; the source of the instrumentalities and tools, the location of the work; the
duration of the relationship between the parties; whether the hiring party has the right to assign
additional projects to the hired party; the extent of the hired party’s discretion over when and
how long to work; the method of payment; the hired party’s role in hiring and paying assistants;
whether the work is part of the regular business of the hiring party; whether the hiring party is in
business; the provision of employee benefits; and the tax treatment of the hired party.

Id. at 1784, quoting Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989).
As in Vergona, in this case the work to be performed was of a temporary nature. Cooper rented
not only the crane belonging to Equipment Holding, but the abilities of Equipment Holding’s operator,

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in this case, Randy Taylor. Cooper had no choice in the assignment of operator, and no right to assign
additional work to Taylor without re-negotiating with Equipment Holding. Taylor had specialized
skills, training and/or experience provided or certified by Equipment Holding. Cooper gave Taylor no
instruction except what loads to move and where to move them. Taylor alone could determine how to
perform the lift and how to configure the boom. Taylor had authority to refuse to perform a lift if he
believed there was a problem with the crane. Maintenance of the crane was performed solely by
Equipment Holding; Cooper neither paid for nor provided any routine maintenance or repairs.
Equipment Holding was solely responsible for ensuring the rental crane’s compliance with the
regulations of both the Port of Houston and OSHA.
It is clear that Cooper had no control over either the crane itself, or the manner in which Taylor
operated it, and that Equipment Holding was properly determined to be Taylor’s employer. Moreover,
Cooper was properly cited for the observed violations, in that it retained control over the certification1
and maintenance of the crane, as well as ascertaining the experience and training of its operators and so
was in the best position to obtain abatement of the cited hazards. Id. At 1786.
Equipment Holding was properly cited.
Alleged Violation of §1918.74(a)(2):
Citation 1, item 1 alleges:
29 CFR 1918.74(a)(2): Crane(s) not part of vessel’s gear used in longshoring operations were not
equipped with a rating chart which included all operating radii for all permissible boom lengths and jib
lengths as applicable, with and without outrigger(s) which may have been fitted, and alternate rating(s)
with optional equipment effecting such rating(s) and necessary precaution(s) or warning(s):

a) An ocean going vessel, M/V Grate Lake (sic), Port of Houston, TX, City Dock #26, starboard side
to wharf. American mobile truck crane, Model #9520, Serial #GS17050, Max. Capacity 400,000 lbs.
Hazard: Overloading causing crane to turnover on its side - broken bones and/or death.

    The cited standard provides:

    All types of cranes shall be equipped with a durable rating chart visible to the operator, covering
    the complete range of the manufacturer’s (or design) capacity ratings and for which they are
    certificated, where required. The rating chart shall include all operating radii for all permissible
    boom lengths and jib lengths as applicable, with and without outriggers which may be fitted, and



        1
           Equipment Holding points out that under OSHA Instruction CPL 2-1.3B (Exh. R-6) an employer is

prohibited from using uncertified cargo gear, regardless of its ownership, and suggests that Cooper should have
been cited (See, testimony of Phillip Nessler, Tr. 356-58). Cooper’s responsibilities, however, are not at issue here
and, in any event, do not affect Equipment Holding’s own liability under the Act, which has been clearly
established.

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alternate ratings with optional equipment affecting such ratings. Necessary precautions or
warnings shall be included.. . .2

Facts
It is admitted that the cited crane was not equipped with the required durable rating chart.
Rather Equipment Holding’s operators had pocket charts, which reproduced the portions of the
manufacturer’s rating chart that governed the single boom length, 140 feet, that Equipment Holding
intended the cited crane to be equipped with (Tr. 275; Exh. C-12, C-13). Jerry Godwin stated that
Equipment Holding did not include “free” on its charts, because its operators were not allowed to make
lifts without the outriggers extended (Tr. 277). Godwin stated that no precautions or warnings were
included on the charts because they were common knowledge (Tr. 279).
Godwin admitted that in order to obtain a P-number for the subject American crane, he signed
off on a document provided by the Port of Houston Authority stating that he had read and agreed to the
port’s rules and regulations (Tr. 289; Exh. C-22). Regulation 3 requires that “[a]ll cranes must meet all
Bureau of Labor Standards requirements as called for in Federal Register, Volume 33, Number 152,
Part II and Federal Register, Volume 34, Number 42, Part II. . .. Godwin testified that those standards
require, inter alia, that all cranes be equipped with load-indicator charts (Tr. 292; Exh. C-23).
CO Harrison testified that Equipment Holding’s failure to post a complete load ratings chart in
the cited crane could lead to overloading and overturning the crane (Tr. 141-42). Phillip Nessler, a
certified safety consultant in the state of Texas (Tr. 346), testified that the violation of the cited standard
was de minimis, in that the absence of load charts did not affect safety so long as the crane was
operated within the parameters of the chart (Tr. 375).
Discussion
The violation is admitted.
A penalty of $5,000.00 was proposed.
It is clear that the violation was properly classified as “serious.” Overloading and overturning of
the crane can lead to serious injury up to and including death, as was demonstrated in this case.
Equipment Holding’s operators carry pocket charts which cover the expected operating parameters of
the American crane, making the probability of an accident resulting from the truncated load chart
remote. Equipment Holding had one employee exposed to the cited hazard, Larry Taylor.

       2
           On November 5, 1997, Complainant’s motion to amend the Complaint to allege, in the alternative, a

violation of §1917.45(b)(1) was granted. Because Equipment Holding is found to have violated the originally
charged item at §1918.74(a)(2), discussion of the alternative allegation is unnecessary.

                                                      5

Taking into account the relevant factors, including Phillip Nessler’s testimony, I conclude that a
penalty of $500.00 is appropriate under the circumstances of this case.

                                                6

Alleged Violation of §1918.74(a)(6)
Citation 1, item 2 alleges:
29 CFR 1918.74(a)(6): Counterweights in excess of manufacturer’s (or design) specifications were
fitted on crane(s) and derrick(s) which were not part of the vessels cargo gear:

a) M/V Grate Lake (sic), Port of Houston, TX, City Dock No. 26, American mobile truck crane, Model

9520, Serial #GS17050, Max. Capacity 400,000 lbs. Hazard: Additional counter-weighing of truck

crane shall not be done unless approved by the crane manufacturer.

    The cited standard provides:

    No counterweights in excess of manufacturer’s (or design) specifications shall be fitted. All
    equipment shall be used in accordance with manufacturer’s (or design) specifications and
    recommendations.3

Facts
James Pritchett, a California board certified crane inspector, and president of Crane Inspection
Services, a company accredited to perform crane and derrick inspections (Tr. 182-84), testified that he
examined the specifications for the subject crane’s counterweight in the manufacturer’s manual (Tr.
193). Pritchett ascertained that the American crane’s specifications call for 75,000 pound rear RTU
counterweight (Tr. 199, 241; See also testimony of CO Harrison, Tr. 131; Exh. C-14). The manual
specifies a 10,000 pound front bumper counterweight for boom assist when a 240-260 foot boom is in
use, and at no other time (Tr. 193, 195, 199, 217).
Although OSHA Compliance Officer (CO) Douglas Harrison testified that he was unable to
ascertain how much counterweight was being used at the time of the accident because some sections of
the crane’s superstructure had fallen into the water with the rear counterweight (Tr. 131), photographs
of the subject crane show a front bumper counterweight (Tr. 192; Exh. C-11). James Pritchett stated
that the bumper counterweight on the subject crane looked nothing like the bumper counterweight
manufactured by American for its 200 ton crane (Tr. 195-96). Pritchett contacted American to confirm
that the front bumper counterweight on the subject crane was not manufactured or sold by American
(Tr. 193).

         3
         Discussion of Complainant’s November 5, 1997 amendment, alleging, in the alternative, a violation of

§1917.45(f)(6), is unnecessary, as Equipment Holding is found to have violated the originally charged item at
§1918.74(a)(6).

                                                      7

Jerry Godwin, who was involved in the purchase of the American crane in October 1997 (Tr.
262, 269), testified that the crane was purchased from the original owner equipped with the front
bumper counterweight; Godwin believed that the bumper weight was a standard factory counterweight
(Tr. 270, 332). The front bumper counterweight was not included on the manufacturer’s inventory of
equipment included with the crane at its original purchase (Tr. 282-83; Exh. C-19).
Godwin admitted that the portion of the manufacturer’s rating chart reproduced on his
operator’s pocket charts calls for 75,000 pounds of counterweight on the upper rotating assembly at the
rear of the crane (Tr. 280-81). Those charts do not anticipate front bumper counterweights (Tr. 281).
Godwin stated that the front bumper weight was never used for calculations using the load ratings
charts (Tr. 272).
Pritchett testified that the front bumper counterweight would give the operator a false sense of
security, without providing any additional stability to the crane (Tr. 194-95). CO Harrison stated that
he doubted that the front bumper counterweight would cause a crane failure in this case (Tr. 143).
Discussion
The evidence establishes that when the cited crane is configured with a 140 foot boom,
outriggers extended, as it was at the time of the accident, the manufacturer’s specifications call for
75,000 pounds of counterweight on the upper rotating assembly at the rear of the crane. No front
bumper weights are recommended. The front counterweight was not used in accordance with the
manufacturer’s specifications, and the violation is established.
Penalty
A penalty of $5,000.00 was proposed.
As noted above, overloading and overturning of the crane can lead to serious injury, and the
violation is properly classified as serious. The gravity of the violation is overstated in this case,
however. Jerry Godwin testified, without contradiction, that the front bumper weight was never taken
into account in calculating boom settings. The CO testified that it was unlikely the counterweight
would affect the crane’s operation here. Given the counterweight’s minor impact on safety, I find that
the proposed penalty is excessive. A penalty of $500.00 will be assessed.
Alleged Violation of §1918.74(a)(9)
Citation 1, item 3 alleges:
19 CFR 1918.74(a)(9): Cranes used to load or discharge cargo into or out of a vessel were not fitted
with load indicating devices or alternative devices in proper working condition meeting the criteria of
this section:

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a) American mobile truck crane, Model #9520, Serial #GS17050, Max. Capacity 400,000 lbs. Hazard:
Overloaded/turn over, resulting in employees injury such as broken bones and/or death. Cranes were
not fitted with load indicating devices or alternative devices.

    The cited standard provides, in relevant part:

    . . .every crane used to load or discharge cargo into or out of a vessel shall be fitted with a load
    indicating device or alternative device in proper working condition. . ..4

Facts
That the cited American crane had no load indicating device is uncontested (Tr. 125, 273, 316).
Randy Taylor requested a load indicator device; Jerry Godwin, however, did not believe that load
indicators were accurate, and did not want his people depending on them (Tr. 274, 323). Godwin
testified that the operator asks the stevedoring company renting the crane: “What is the heaviest piece
we’re going to be lifting?” and sets the boom angles based on what he’s been told (Tr. 336).
Randy Taylor, in his statement to the CO, noted that the coils he was lifting at the time of the
accident were marked at 85,583 pounds. Taylor stated that no one told him he would be pulling more
than 60,000 pounds, the weight his rig was set for (Exh. C-16).
Discussion
The violation is admitted. Equipment Holding fails to set forth any evidence constituting an
affirmative defense, and the violation will be affirmed.
A penalty of $5,000.00 is proposed.
The violation was properly classified as “serious.” Overloading and overturning of the crane can
lead to serious injury up to and including death, as was demonstrated in this case. Equipment Holding’s
crane should have been equipped, as requested by Taylor, with the load indicating devices required by
the cited standard.
The proposed penalty is appropriate and will be assessed.
Alleged Violation of §1918.72(a)
Citation 1, item 4, as amended, alleges:
29 CFR 1919.72(a): Crane not examined by an accredited person or his authorized representative in
conformance with the requirements of 29 CFR §1919.71(d).

       4
         Discussion of Complainant’s November 5, 1997 amendment, alleging, in the alternative, a violation of

§1917.46(a)(1), is unnecessary, as Equipment Holding is found to have violated the originally charged item at
§1918.74(a)(9).

                                                      9

Certificate of test and examination of an American mobile truck crane, Model #9520, S/N 17050 and its
accessory gear was not carried out, before being taken into use. (a) Port of Houston, TX, City Docks
No. 20 and No. 26. Hazard: Overloading and/or tipping over crane - broken bones and/or death

    The cited standard provides:

    In any year in which no quadrennial unit proof test is required, an examination shall be carried
    out by an accredited person or his authorized representative. Such examination shall be made
    not later than the anniversary date of the quadrennial certification and shall conform with the
    requirements of §1919.71(d).

Facts
Rodney Wright testified that Cooper anticipates that the cranes it rents from Equipment Holding
will have a valid P-number, i.e. authorization from the Port of Houston to operate on the docks (Tr.
56). Wright testified that such authorization is issued only to cranes with a current marine certification
(Tr. 56).
Donald Dolan, a surveyor for Dixon Equipment Services, testified that he conducted an
inspection of the American crane which is the subject of this matter (Tr. 10). Dolan testified that he was
unable to do a complete maritime inspection on the crane, because the maritime inspection includes a
load test, and the American crane was not completely assembled (Tr. 12-13). Dolan stated that upon
completion of a maritime inspection, a decal with an expiration date is applied to the cab of the crane;
Dolan did not certify the cited crane for maritime work, and did not apply a decal (Tr. 14-15, 19).
Nonetheless, an acknowledgment of attendance was issued to J.J. Flannagan Stevedores stating that
operational testing had been completed and the cited crane certified for operation in compliance with
OSHA regulation §1926.550 (Tr. 16-17; Exh. C-1, R-9). Dolan testified that the certification of the
crane must have been an “oversight,” and in any event indicated only that the crane was certified under
the construction standards, which do not require a load test (Tr. 18). Dolan testified that, in order to be
certified for loading and unloading cargo at the Port of Houston, a crane must be inspected in
accordance with the relevant marine standard at §1918.13, and must be subjected to a load test (Tr. 19,
21).
CO Harrison testified that Jerry Godwin told him he wanted to get the American crane into the
Port of Houston so he could work on it there, and had gotten the construction certification in order to
get the crane into the port (Tr. 133).
Godwin admitted that he was responsible for acquiring the P-number on the American crane (Tr.
285). Godwin knew that the crane had to have a current marine certification before a P-number would

                                                10

be issued, and that the marine certification included operational lift testing (Tr. 285-86). Godwin,
however, stated that he was not aware of any difference between the construction standards and marine
standards, and did not realize that the American crane was not certified for stevedoring until after the
accident (Tr. 286, 295-96, 316, 334). Godwin believed that Dixon was ultimately responsible for
ensuring that the crane was properly inspected (Tr. 337).
Discussion
In order to prove a violation of section 5(a)(2) of the Act, the Secretary must show, inter alia,
that the cited employer either knew or could have known of the condition with the exercise of
reasonable diligence. See, e.g., Walker Towing Corp., 14 BNA OSHC 2072, 2074, 1991-93 CCH
OSHD ¶29239, p. 39,157 (No. 87-1359, 1991).
The Secretary failed to show, by a preponderance of the evidence, that Equipment Holding
knew that the cited crane had not been certified. Equipment Holding arranged for the inspection of the
cited American crane by a certified inspector, who provided an acknowledgment of attendance
indicating that operational testing had been conducted and certifying the crane for operation in
compliance with OSHA regulations. Viewing that acknowledgment, I cannot find that Equipment
Holding’s belief that the requested certification had been obtained was unreasonable, or that it should
have known the certification was insufficient.
For the reasons set forth above, citation 1, item 4 is VACATED.

                                              ORDER

1. Citation 1, item 1, alleging violation of §1918.74(a)(2) is AFFIRMED, and a penalty of $500.00
   is ASSESSED.

2. Citation 1, item 2, alleging violation of §1918.74(a)(6) is AFFIRMED, and a penalty of $500.00
   is ASSESSED.

3. Citation 1, item 3, alleging violation of §1918.74(a)(9) is AFFIRMED, and a penalty of
   $5,000.00 is ASSESSED.

4. Citation 1, item 4, alleging violation of §1918.72(a) is VACATED.

                                                  Stanley M. Schwartz
                                                  Judge, OSHRC
   

   Dated:

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