SIXTH CIRCUIT CURTAILS MSHA’S JURISDICTION OVER OFF-SITE REPAIR SHOPS
February 15, 2017
For clients and friends of Jackson Kelly PLLC
Volume 13, Number 4
©2017 Jackson Kelly PLLC
The U.S. Court of Appeals for the Sixth Circuit held this week that a repair shop not located on a mine site is not a “coal or other mine” subject to regulation by MSHA, even though it makes and repairs mining equipment. In Maxxim Rebuild Company, LLC v. Sec’y of Labor, et al., _ F.3d _ (6th Cir. 2017), slip op., available at 2017 WL 563083, the Sixth Circuit reversed a decision by the Federal Mine Safety and Health Review Commission (“Commission”) and overturned the Commission’s long-standing decision in Jim Walters Resources, which had allowed MSHA to enforce its standards at repair shops that were not located on mine property.
In Maxxim, the Maxxim Rebuild Company (“Maxxim”) operated a shop in Sidney, Kentucky on property owned by Sidney Coal Company. Alpha Natural Resources was the parent company of both Maxxim and Sidney Coal Company. In addition to the Sidney shop, Maxxim had five other shops at various locations as well as a seventh location that served as an equipment depot where surplus equipment was stored and sold for various companies. OSHA regulated five of Maxxim’s shops; MSHA regulated the Sidney shop and another Maxxim shop that was an underground repair shop adjacent to a coal preparation plant. OSHA had previously regulated the Sidney employees when they did the same work in a smaller facility in Matewan, West Virginia, when the mine connected to the shop ceased mining activity. In the Sidney shop, approximately 75% of the work undertaken was related to equipment used by Alpha. The rest of the work was for other mining companies and for repair shops that might sell the equipment to mining or non-mining companies.
Maxxim moved the shop to Sidney in January 2012 and began making and repairing mining equipment and machine parts. After that, MSHA inspected the shop and issued citations, despite the fact that the nearby mine was sealed and abandoned. Maxxim contested the citations, and the ALJ upheld MSHA’s assertion of jurisdiction and the issuance of the citations in two separate decisions.
Maxxim appealed, and the Commission affirmed jurisdiction. The Commission found that MSHA had jurisdiction over the Sidney shop based on the language of § 3(h)(1)(C) of the Mine Act, because the shop was a “facility used in the process of extracting and preparing coal” given that it maintains, repairs, and fabricates equipment used in the mining process and was located on an abandoned mine property. The Commission found that, because approximately 75% of the shop’s work was performed on equipment used in coal extraction and preparation activities for subsidiaries of Alpha, jurisdiction was proper. In so finding, the Commission relied heavily on its 2000 decision in Jim Walter Resources, Inc., 21 FMSHRC 22 (Rev. Comm. Jan. 2000).
On appeal, the Sixth Circuit reversed the Commission. In its decision, the Sixth Circuit pulled “back the lens” and found that MSHA’s jurisdiction did not extend to facilities wherever they exist simply because they work on or sell mining equipment. Rather, MSHA’s jurisdiction extended only to facilities and equipment if they are “in or adjacent to – in essence part of – a working mine.” The Court found that the definition of a “mine” in the Mine Act is locational. Indeed, as the Court noted, the title of the Mine Act and the title of MSHA suggest that the definition of “coal or other mine” relates to a place – land and things in or connected to a mine. Maxxim slip op. * 4-7.
The Court found further support for its decision by noting that Mine Act definitions extended to only things that one would see in or around a working mine and not to mining equipment or mining machines, tools, or other property wherever they may be found or made. The Court noted that the definitions of “operator,” “agent,” and “miner” are also defined in relation to working mines and that the pertinent definition of “coal mine” in § 802(h)(2), which applies to other federal programs such as the Black Lung Benefits Act, is also locational. The Court noted that Congress separately gave MSHA the authority to regulate equipment sold to mines under 30 U.S.C. § 820(h), which it characterized as “the most natural home for regulating mining equipment unconnected to a working mine.” In this case, however, the Court noted that MSHA did not cite Maxxim for equipment violations. Maxxim slip op. * 7-8.
The Court declined to extend Chevron deference to the Secretary’s position, finding it unreasonable as it overlooked all of the textual and precedential clues in the statutory language and had no stopping point. By way of example, the Court considered how the Secretary’s position – “any ‘facility’ that makes ‘equipment’ that is ‘used’ or ‘to be used’ in a coal mine is a coal mine” – would have allowed MSHA to exercise jurisdiction over a large mining equipment manufacturer (Jeffrey Mining Manufacturing Company) that was not located anywhere near any working mine and would have transformed that plant into a coal mine. Maxxim slip op. * 9. Finally, the Court rejected the Secretary’s and Commission’s heavy reliance on Jim Walter Resources, Inc., stating that the Court was not bound by an incorrect Commission decision.
The Court’s decision is worth noting because has MSHA sought to exercise its jurisdiction over off-site shops and equipment traditionally covered under OSHA jurisdiction, including other metallurgical fabrication shops and equipment rebuild facilities. The Sixth Circuit’s decision soundly rejected this jurisdictional overreach and serves as a significant check on the unlawful expansion of MSHA’s jurisdiction.
OCCUPATIONAL SAFETY AND HEALTH PRACTICE GROUP
Denver, Colorado
Responsible Attorney
Karen L. Johnston
303.390.0008
kjohnston@jacksonkelly.com
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