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Pennsylvania Electric Co. v. Federal Mine Safety and Health Review Commission

argued: May 6, 1991.


On Petition for Review of a Decision of the Federal Mine Safety and Health Review Commission

Before: Mansmann, Nygaard and Roney,*fn* Circuit Judges.

Author: Roney


RONEY, Senior Circuit Judge.

This case questions which Government agency has jurisdiction over the safety practices of Pennsylvanian Electric Company (Penelec) in handling and processing coal within its electric generating plant in Homer City, Pennsylvania. The Federal Mine Safety and Health Review Commission asserted jurisdiction under the Mine Safety and Health Act, upholding the issuance of certain safety violation citations issued thereunder. By seeking review of that decision, Penelec asserts that its safety practices should be governed by OSHA, the Occupational Safety and Health Act, and that the Mine Act inspector was without jurisdiction to issue the citations. Following the statute and the conduct of the agencies under the interagency agreement which works out the interplay between the two acts, we uphold the Secretary of Labor's assertion of jurisdiction under the Mine Act and affirm the decision enforcing these citations.

The Mine Act generally involves coal mining operations. See 30 U.S.C. § 801, et seq. OSHA generally involves safety in the generating plant. 24 U.S.C. § 651, et seq. To understand how the operations at Penelec bring these two Acts into convergence, one must track the coal from the mine to the generator boilers. (See the parties stipulated Exhibit B entitled "Homer City Station Coal Flow Diagram" appended hereto).

The "raw coal" used in the Penelec generating facility to produce power is delivered by conveyor belt from two adjacent mines. Coal from the adjacent mines is moved by conveyor to scales where it is weighed and sampled. At this point title passes from the mines to Penn Electric. The coal is then transported by conveyor to a coal processing station ("the station") located on Penelec property.

At the station the coal is broken, crushed, sized, washed, cleaned, dried, and blended in order to make a "useable coal product" for the electric generating facility. At the time the citations were issued, the station was being operated by Iselin Preparation Company, a subsidiary of one of the two mining companies. As the stipulated diagram denotes, MSHA had previously inspected and otherwise exercised jurisdiction over the Penelec processing station since 1977. However, it has never regulated the facilities used to move the processed coal leaving the station and destined for the generating facilities.

The present dispute concerns the head drives of the conveyor belts used to transport coal from the minehead scales to the processing station located at the entrance of Bin #2 on the parties' diagram. On January 7, 1988, an inspector from MSHA issued citations to Penn Electric for failing to place adequate guards around these head drives, as required under MSHA. 30 C.F.R. § 77.400(c). Penn Electric does not contest that it failed to guard the cited head drives or that MSHA satisfied its burden of proof with regard to the existence of the violations underlying the citations. It argues, however, that the MSHA inspector did not have the authority to issue the violations.

Penelec argues two reasons for setting aside the violation citations. First : MSHA does not have the statutory jurisdiction over coal conveyors within the electric generating station. In making this argument, Penelec relies upon the plain language of the statute, the legislative history and case law under the Mine Act, and analogous case law under the Black Lung Benefits Act. Second : MSHA has not sufficiently exercised authority over Penelec's coal handling operations to deprive OSHA of its statutory jurisdiction over the coal conveyor head drives. The law defeats Penelec's argument on the first issue, and the substantial evidence on the record supports the contrary decision of the administrative law judge on the second issue.

Statutory Jurisdiction of MSHA

The Mining Act provides that "each coal or other mine . . . shall be subject to" MSHA jurisdiction. 30 U.S.C. § 803(4). Section 803 3(h) of MSHA defines a "coal or other mine" and "coal mine" to include the "work of preparing coal." Specifically, section 3(h) states:

(1) "coal or other mine" means (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, or 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. (emphasis added)

The "work of preparing the coal" is defined as "the breaking, crushing, sizing, cleaning, washing, drying mixing, storing, and loading of bituminous coal, . . . and such other work of preparing such coal as is usually done by the operator of a coal mine." 30 U.S.C. § 802(i).

Penelec admits that the cited conveyor head drives are engaged in the "work of preparing coal," however, it disputes whether the actual preparation performed is the kind "usually done by the operator of a coal mine." Penelec is not an operator of a coal mine in the classic sense of those words. See Donovan v. Carolina Stalite Co., 236 App. D.C. 264, 734 F.2d 1547 (D.C. Cir. 1984).

With regard to its jurisdiction, however, MSHA specifically sets forth a functional analysis of the nature of the work being performed, not one tied solely to the identity of the employer. The question to be answered is whether the activities at issue constitute "preparation of coal," not whether the entity engaged in the preparation is also in the coal mining business. Hanna v. Director, OWCP, 860 F.2d 88, 92 (3d Cir. 1988). The legislative history of the 1977 Mine Act indicates that the definition of a "mine" should receive the broadest possible interpretation and that doubts should be resolved in favor of coverage. S.Rep. No. 181, 95th Cong., lst Sess. 1, 14, reprinted in 1977 U.S. Code Cong. & Admin. News, pp. 3401, 3414.

Penelec argues that it is not subject to MSHA's jurisdiction because it uses a unique preparation process to clean the coal which is ultimately consumed. This argument has no merit because MSHA specifically addresses custom preparation facilities. See supra § 3(b)(1) and Dowd v. Director, OWCP, 846 F.2d 193, 194 (3d Cir. 1988). MSHA has jurisdiction when the facility is one that prepares coal to meet market specifications or to make it fit for a particular industrial use. Oliver W. Elam Jr., Co., 4 F.M.S.H.R.C. 5 (Jan. 7, 1982).

The fact that the coal had been sold and title passed to Penelec before it was processed is not determinative. See Donovan v. Carolina Stalite Co., 734 F.2d at 1547 (independent gravel processing facility which purchased slate from adjacent quarry constituted "mine" under Mine Act). Indeed, this Court has explicitly rejected the view that persons who handle coal after its sale by the extractor cannot be engaged in the work of preparing the coal. Stroh v. Director, OWCP, 810 F.2d 61, 64 (3d Cir. 1987). The Mine Act which preceded this one contained an exception related to processing work performed by the ultimate consumer of coal, the current Act does not. In any event, Penelec could not seriously contend that if it controlled the adjacent mines it would not be subject to MSHA because of its status as an ultimate consumer. Emphasis on legal title to the property, rather than on the functions carried out in the relevant areas, artificially restricts the scope of the Act and undercuts its purposes. See Carolina Stalite, 734 F.2d at 1551. In Carolina Stalite the court stated:

It is clear that every company whose business brings it into contact with minerals is not to be classified as a mine within the meaning of section 3(h). The jurisdictional line drawn by the statute rests upon the distinction, which is somewhat elusive, to say the least, between milling and preparation, on the one hand, and manufacturing, on the other. Classification as the former carries with it Mine Act coverage; classification as the latter results in Occupational safety and Health Act regulation.

Id. Here, the cited activity was clearly antecedent to and separate from the process of producing electrical power and instead consisted of coal preparation.

Under the functional analysis, the activities conducted at Penelec's processing station specifically fall within MSHA jurisdiction. At the station the coal is broken, crushed, sized, washed, cleaned, dried, and blended in order to make a "useable coal product" for the electric generating facility. These are all activities within the MSHA definition of preparing coal contained in section 3(i).

In affirming MSHA jurisdiction, the Mining Commission deemed it of significance that the cited conveyors were located between two areas of MSHA jurisdiction. See the above reference coal flow diagram. Specifically, MSHA exercised jurisdiction over the conditions in the adjacent mines as well as conditions inside the station. Penelec does not dispute that MSHA properly exercised jurisdiction within the station. In fact Penelec produced a Penelec inter-office memorandum which memorialized the August 25, 1977 meeting between officials of Penelec, Iselin, and the Mining Enforcement and Safety Administration ("MESA"), predecessor of MSHA. At that meeting it was clearly established that MESA would have jurisdiction over the coal cleaning plant.

Courts must uphold an agency's reasonable construction of a statute it is entrusted to administer. Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984); K-Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291-92, 108 S. Ct. 1811, 100 L. Ed. 2d 313, 6 U.S.P.Q.2D (BNA) 1897 (1988); Puerto Rico Maritime Shipping Auth. v. Valley Freight Systems, Inc., 856 F.2d 546, 552 (3d Cir. 1988). In Donovan v. Carolina Stalite, the Court noted that the putative mines at issue were unquestionably subject to regulation under either MSHA or the OSHA, so that the Secretary in effect was not determining the outer limits of his own authority, but merely "adjusting the administrative burdens between his various agencies." Id. at 1553. Additionally, the Secretary of Labor's determinations regarding what constitutes a "mine" under § 3(h) of the Mine Act, 30 U.S.C, § 802(h), although jurisdictional, are entitled to deference. Carolina Stalite, 734 F.2d at 1551-54. Similarly, Penelec is unquestionably subject to regulation by the Secretary under one Act or the other. We defer to the Secretary's reasonable construction of § 3(h) of MSHA by extending the deference which that interpretation deserves, by upholding MSHA jurisdiction.

Exercise of Authority by MSHA over Conveyor Driveheads

Section 4(b)(1) of OSHA states that OSHA has jurisdiction over all working conditions except where another federal agency has exercised authority to promulgate standards or regulations affecting occupational safety. See Columbia Gas of Pa., Inc. v. Marshall, 636 F.2d 913, 915 (3d Cir. 1980). Penelec argues that the Secretary of Labor failed to sufficiently exercise under MSHA to displace OSHA jurisdiction.

On first review, the Mining Commission remanded the present case to the Administrative Law Judge to determine whether the Secretary had properly exercised her statutory authority to regulate the cited working conditions. After a hearing the Administrative Law Judge found that the Secretary had previously applied MSHA standards to the cited head drives and that Penelec was aware of those citations and inspections. OSHA has never regulated the conveyor belts at this facility and although OSHA may regulate electrical utilities as such, it does not generally regulate coal processing activities performed by electrical utilities.

Penelec argues that MSHA has not promulgated regulations or standards directed to the electric utility industry while OSHA has a long-standing practice of regulating the coal handling operations of electric utilities. See Columbia Gas of Pennsylvania, Inc. v. Marshall, 636 F.2d 913, 915-16 (3d Cir. 1980) (agency's declaration of authority insufficient to displace OSHA). The U.S. Supreme Court has recently held, however, that the Secretary's litigating position before the Commission is an exercise of jurisdiction entitled to deference. Martin v. OSHRC, 111 S. Ct. 1171, 113 L. Ed. 2d 117 (1991).

Moreover, when embodied in a citation, the Secretary's interpretation assumes a form expressly provided for by Congress. (citations omitted) Under these circumstances, the Secretary's litigating position before the Commission is as much an exercise of delegated lawmaking powers as is the Secretary's promulgation of a workplace health and safety standard.

Id. at 132.

The record contains uncontradicted evidence that MSHA had consistently inspected the head drives and related areas, and issued citations relating to them, to the processing station's previous operator. At the hearing upon remand, the inspector who issued the disputed citations testified that he had regularly inspected the conveyor head drives since 1982. The record also contains evidence that Penelec's management was aware of the citations because Penelec employees abated similar violations by, for example, cleaning up the area and installing guards. On at least one occasion Penelec's supervisor for coal handling was informed by the station's operation of such a citation and the need for abatement measures.

In response to a Penelec inquiry, on April 12, 1988, the MSHA district manager informed Penelec by letter that MSHA considered its jurisdiction as extending from the point of receipt of the coal "until the finished coal is placed onto belts and transported to the claim coal storage areas." A copy of this letter was sent to the OSHA area director.

We conclude that the Secretary of Labor sufficiently exercised her authority by issuing citations under the existing MSHA regulations which, under the definitions supplied by the Act, apply to Penelec's coal processing station. This exercise of authority under MSHA sufficiently displaced OSHA jurisdiction.

Due Process and Fundamental Fairness

Penelec argues that MSHA's issuance of the citations in question violates the fundamental principles of due process under the Fifth Amendment of the United States Constitution. See Diamond Roofing v. OSHRC, 528 F.2d 645 (5th Cir. 1976) (regulations of workplace must give employer fair warning of prohibited conditions and practices), and Phelps Dodge v. FMSHRC, 681 F.2d 1189 (9th Cir. 1982) (regulations must convey an intention to cover the methods utilized by the employer). Penelec complains that the MSHA regulation, on its face, applies only to mines and that the utility company received ...

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