By Nicholas Scala
March 11, 2017 - A key federal appeals court decision has rejected MSHA’s argument that the Mine Act gave it authority to take enforcement against a manufacturing plant making and repairing mine equipment, saying that instead the shop falls under OSHA jurisdiction.
The decision is an important one insofar as it limits the scope of what is defined as a mine operation under federal law and therefore what types of workplaces MSHA can inspect and issue citations, essentially restricting the scope to actual mining-related activities.
Also, the decision is noteworthy in the fact that it peels back an earlier ruling on a similar subject by the Federal Mine Safety and Health Review Commission (the Commission) known as the Jim Walter Resources ruling that is often cited by MSHA to support arguments in related matters before administrative law judges, the commissioners and appellate courts.
At Issue In The Case
The primary legal question before for consideration by the U.S. Court of Appeals for the Sixth Circuit was whether Maxxim Rebuild Co., an equipment and parts shop located in Sidney, Kentucky, is a “coal or other mine” subject to regulation by MSHA.
This question followed a legal dispute that arose from several MSHA citations on the shop. An administrative law judge at the Commission ruled that it did meet that definition, an opinion upheld by the full Commission, but the Sixth Circuit in its recent decision reversed that ruling.
According to court’s decision, the Maxxim facility does not extract coal or any other mineral, and it does not prepare coal or any other mineral for use. It builds and repairs mining equipment at a site that is neither adjacent to nor part of a working mine. Because the definition of “coal or other mine” refers to locations, equipment and other things “in, above, beneath, or appurtenant to active mines,” the Maxxim shop is not a mine subject to the Administration’s jurisdiction, the Court ruled.
It is worth pointing out a few other details about the shop noted by the court that make it distinct from a mining operation subject to the Act. The shop consists of two work bays: one for welding, one for fabrication. Maxxim employs seven workers at the Sidney shop and roughly 75 percent of the work at the shop is for equipment that Alpha Natural Resources, Maxxim’s parent company, uses to extract or prepare coal at several different mines.
The rest of the work is for other mining companies and for repair shops that might sell the equipment to mining or non-mining companies. Sidney Coal, another Alpha subsidiary, had an office in the upper floor of the Maxxim shop, the decision notes.
Maxxim operates six other shops; MSHA has asserted jurisdiction over just one other one adjacent to a coal mine, and OSHA regulates and inspects all the others. The Sidney shop used to be connected to an active coal mine and Maxxim thought MSHA would stop inspecting it when that mine stopped extracting coal, as had happened at similar facility.
MSHA continued inspecting the facility anyway and in January 2013 issued three citations. Maxxim challenged the citations on jurisdictional grounds and the issue went all the way to the Sixth Circuit. There, the Court found that the Sidney’s shop’s operating activities and the fact that it was not part of a working mine made it subject to OSHA, not MSHA authority.
“In the Secretary’s view, the Mine Safety and Health Administration has exclusive jurisdiction over any facility that makes or repairs ‘equipment that is used in coal extraction and coal preparation activities,’ even a facility not a part of or adjacent to a working mine,” the Court said. In supporting this position, the Secretary asked the Court us to focus on these words in one of the Mine Act’s jurisdictional provisions: that its authority extends to “facilities” and “equipment … used in, or to be used in … the work of preparing coal or other minerals.”
“But context and perspective are everything. In pulling back the lens, we see several indications that the power of the Mine Safety and Health Administration extends only to such facilities and equipment if they are in or adjacent to — in essence part of — a working mine,” the Court found.
Also the Sixth Circuit noted that MSHA seemed to realize its jurisdictional limits in considering its approach to other Maxxim facilities:
“Even (MSHA) seems to doubt its assumption of authority. In practice, it has not shown the courage of today’s convictions. It has not asserted jurisdiction over five other Maxxim shops or the Maxxim equipment depot that sells loaders and other machines to mining companies. Like the Sidney shop, those shops are not locations where coal is extracted or prepared. The Administration did there what it should have done here: leave any such regulation to the Occupational Safety and Health Administration.”
While ruling in favor of Maxxim, the Sixth Circuit also repudiated the Commission findings of MSHA v. Jim Walter Resources Inc., which had to do with an off-site supply shop:
“We of course are not bound by an incorrect Commission decision. Once the agency tries to extend its jurisdiction to off-site shops and off-site equipment, the language of the statute provides no stopping point, leaving the scope of its jurisdiction to the whims of the Secretary.”
This decision goes to the heart of MSHA’s authority in what defines operations that fall under this jurisdiction. Unless there are conflicting rulings and the issue goes any further, the Sixth Circuit has established a clear precedent that machine shops located outside an actual mining-related activity, even if making or repairing equipment for such work, fall under OSHA and not MSHA authority. It will be interesting to observe how this ruling changes MSHA inspection activity going forward.