.
UNIQUE ELECTRIC
January 25, 1999
WEST 95-333-M

           FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

                      1244 SPEER BOULEVARD #280
                        DENVER, CO 80204-3582
                    303-844-3577/FAX 303-844-5268

                           January 25, 1999

SECRETARY OF LABOR,            :  CIVIL PENALTY PROCEEDING
  MINE SAFETY AND HEALTH       :
  ADMINISTRATION (MSHA),       :  Docket No. WEST 95-333-M
               Petitioner      :  A.C. No. 04-03425-05503 TIR
          v.                   :
                               :  Washington Mine
UNIQUE ELECTRIC,               :
               Respondent      :

                          DECISION ON REMAND

Before:  Judge Manning

     In my original decision in this civil penalty proceeding, I
held that Unique Electric violated 30 C.F.R.  57.12025 and I
assessed a civil penalty of $400 for the violation, Unique
Electric, 19 FMSHRC 783 (April 1997).  In the decision, I found
that Unique Electric was a sole proprietorship, without employees
or assets, operated by Mr. Kim Warnock and that it was no longer
performing work at any mine.  The Secretary of Labor appealed my
decision to the Commission on the basis that I improperly reduced
the $8,500 civil penalty proposed by the Secretary based on my
analysis of the "ability to continue in business" criterion in
section 110(i) of the Federal Mine Safety and Health Act of 1997,
("Mine Act") (30 U.S.C.  820(i)).  The Commission granted the
Secretary's petition for review.  The single citation in this
case was issued following a fatal accident, as described in my
original decision.

                    I.  DECISION OF THE COMMISSION

     In its decision, the Commission vacated my $400 penalty
assessment in this case and remanded the case to me for further
proceedings consistent with its decision.  Unique Electric,
20 FMSHRC 1119 (October 1998).  The Commission vacated the
penalty I assessed based on concepts developed in its decisions
in Sunny Ridge Mining Co., 19 FMSHRC 254, 271-72 (February 1997)
and Ambrosia Coal & Construction Co., 19 FMSHRC 819, 823-24 (May
1997).  These decisions discuss how penalties should be assessed
against agents of corporate mine operators under section 110(c)
of the Federal Mine Safety and Health Act of 1997, 30 U.S.C.
 820(c).  The $8,500 penalty in this case was proposed by the
Secretary under section 110(a) of the Mine Act.  The Commission
held that the present case is "akin to one brought against an
individual under section 110(c) of the Mine Act" because Mr.
Warnock, the owner of Unique Electric, was self-employed at the
time the citation was issued.  20 FMSHRC at 1122.

     In its decision, the Commission directed that I reconsider
the penalty taking into consideration the six criteria set forth
in section 110(i) of the Mine Act.[1]  With respect to the
ability to continue in business criterion, the Commission
directed that I consider "whether the proposed penalty would
affect Warnock's ability to meet his financial obligations."  Id.
With respect to the size of the business criterion, the relevant
inquiry is whether the penalty is appropriate "in light of the
individual's income and net worth."  Ambrosia, 19 FMSHRC at 824.
In Sunny Ridge, the Commission set forth its analysis with
respect to penalties brought against individuals as follows:

     The criteria regarding the effect and
     appropriateness of a penalty can be applied
     to individuals by analogy, and we find that
     such an approach is in keeping with the
     deterrent purposes of penalties assessed
     under the Mine Act.  In making such findings,
     judges should thus consider such facts as an
     individual's income and family support
     obligations, the appropriateness of a penalty
     in light of the individual's job
     responsibilities, and an individual's ability
     to pay.  Similarly, judges should make
     findings on an individual's history of
     violations and negligence, based on evidence
     in the record on these criteria.  Findings on
     the gravity of a violation and whether it was
     abated in good faith can be made on the same
     record evidence...."

19 FMSHRC at 272.

     The Commission further analyzed how penalties should be
assessed against individuals in Wayne Steen, employed by Ambrosia
Coal & Construction Co., 20 FMSHRC 381, 385-86 (April 1998).  The
Commission stated that "our judges must engage in a two-step
analysis..." as follows:

     First, they must determine [an individual's]
     household financial condition.  Then they
     must make findings on the ... "size" and
     "ability to continue in business" criteria on
     the basis of the [individual's] share of his
     or her household's net worth, income, and
     expenses.

Id.

                      II.  PROCEEDINGS ON REMAND

     On October 26, 1998, I ordered Mr. Warnock to provide me
with information concerning his income, financial obligations,
and net worth.  20 FMSHRC 1241 (October 1998).  I asked for a
listing of his major assets and liabilities, indicating which
assets were held jointly with his wife and which liabilities were
joint obligations.  I also asked him to describe his "family
support obligations."  Finally, I asked for a copy of his Federal
tax return so that I could verify the information submitted.
This information was submitted to me.  I sealed the tax returns
submitted by Mr. Warnock.

     A.  Information Supplied by Mr. Warnock

     The information submitted shows that all assets and
liabilities of Mr. Warnock are shared jointly with his wife, as
follows:

     1.  Major Assets

     a.  Home - The Warnocks own a home that is valued at
about $83,000.  The present mortgage is about $69,900 and the
monthly payment is $735.  Thus, their equity in the home is about
$13,100.

     b.  Automobile - The Warnocks own a car that is valued
at about $8,500.  The outstanding loan on the car is about $8,000
and the monthly payment is $250.  Thus, their equity in the car
is about $500.

     c.  Trailer Recreational Vehicle (5th Wheel) - The
Warnocks own an R.V. that is valued at about $7,000.  The
outstanding loan on the R.V. is about $6,000 and the monthly
payment is $120.  Thus, their equity is about $1,000.

     d.  Truck - The Warnocks own a truck that is valued at
about $5,700.  The loan has been paid.  Thus, their equity is
about $5,700.

     2.  Major Liabilities

     a.  Loans - In addition to the home mortgage and loans
listed above, the Warnocks owe about $6,000 on a Visa charge
card.  They make a monthly payment of about $300.

     b.  Monthly payments - The Warnocks' monthly payments
for the assets listed above including the Visa bill is about
$1,400.  In addition, they estimate that their monthly payments
for other basic goods and services to be about $1,100.  These
payments include the cost of utilities, phone service, life and
health insurance, auto insurance, food, and gasoline.  The total
monthly payments are about $2,500.

**FOOTNOTES**

     [1]:  The criteria are "the [mine] operator's history of
previous violations, the appropriateness of such penalty to the
size of the business of the operator charged, whether the
operator was negligent, the effect on the operator's ability to
continue in business, the gravity of the violation, and the
demonstrated good faith of the person charged in attempting to
achieve rapid compliance after notification of a violation." 30
U.S.C.  820(i).

     3.  Income

     The citation in this case was issued in September 1994. In
that year, the Warnocks' household adjusted gross income was
about $32,000. Of this amount, about $20,000 was from earnings
by Mr. Warnock from Unique Electric.

     In 1997, the most recent year for which tax returns
are available, the household adjusted gross income was
about $70,000.  In September 1997, Mr. Warnock took a new job
and his monthly gross income was about $2,880. This new
position is closer to home but it pays significantly less
than the job he held before September 1997. As of the end
of 1997, Mr. Warnock's gross annual income was about $34,500.
At the end of 1997, Mrs. Warnock's gross monthly income was
about $1,360, or about $16,300 annually. Thus, as of
December 1997, the Warnocks' gross annual income from
employment was about $50,800. As of December 1998, Mr.
Warnock's gross monthly wage is $2,400, about $400 lower
than in 1997.

     4.  Financial Condition

     The household net worth of the major assets shown
above is about $20,300. The household monthly payment
for loans, insurance, utilities, telephone, food, and
gasoline is about $2,500 per month or about $30,000 per
year. The household gross income is less than $50,800.

     The information supplied by the Warnocks indicates
that all assets and liabilities are joint. There is no
indication whether the Warnocks are supporting any
children, so I assume that there is no such support
obligation. In his submission, Mr. Warnock states that
after paying taxes and monthly bills, the household
had about $700 of discretionary income per month to cover
other essentials such as non-reimbursed medical expenses,
as well as nonessential items and services.

     B.  Response of the Secretary of Labor

     In her response to Mr. Warnock's submission, the Secretary
contends that the information supplied is "materially incomplete"
with regard to Mr. Warnock's net worth. Specifically, she states
that Mr. Warnock's submission does not indicate whether he owns
"any additional assets, including any investments such as
additional real estate, IRA's, 401(k)'s, [or] vested pension
assets...." Counsel states that without such information, the
Secretary cannot make any "meaningful submission regarding the
appropriate amount of penalty...." The Secretary provided an
affidavit that the Department of Labor uses to determine whether
a civil penalty should be reduced due to financial hardship and
suggests that Mr. Warnock should be required to fill it out or to
provide a sworn statement that he has no interest in any
additional assets.

                 III. ANALYSIS AND PENALTY ASSESSMENT

     I find that Mr. Warnock provided sufficient information on
which I can assess a civil penalty under the Commission's remand
order. In its decision, the Commission stated that, when I
evaluate the ability to continue in business criterion, I should
consider whether the proposed penalty would affect Mr. Warnock's
ability to meet his financial obligations, and that when I
evaluate the size criterion, I should consider Mr. Warnock's
income and net worth. I have reviewed the Warnocks' tax returns
and I am satisfied that the information submitted is accurate and
provides a good outline of his financial condition. The 1997 tax
return shows that the Warnocks' earned minimal interest, and no
dividends or capital gains. My examination of the tax return
also shows that they do not own any real estate other than their
home. When assessing a penalty, I will assume that the Warnocks
have a checking account and some tax sheltered savings for
retirement in the form of an IRA, 401(k), or a vested retirement
plan that is commensurate with their economic profile.

     In assessing a civil penalty, I must consider all six
penalty criteria. I review each of them below. For the criteria
that are not at issue on remand, I incorporate my findings from
my original decision.

     A.  The Operator's History of Previous Violations

     Neither Unique Electric nor Mr. Warnock has any history of
previous violations of the Mine Act or the Secretary's safety and
health standards.

     B.  The Appropriateness of the Penalty to the Size of the
Business of the Operator

     There is no dispute that Unique Electric was a small
electrical contractor operated by Mr. Warnock. Unique
Electric was a sole proprietorship without any employees
or assets. Unique Electric was simply the name that Mr.
Warnock used when he provided services to his customers;
it was not a separate legal entity. Mr. Warnock was a mine
"operator" under section 3(d) of the Mine Act because he
was an "independent contractor performing ... services at
[a] mine." 30 U.S.C.  802(d). I have considered Mr.
Warnock's share of the household income and net worth
when analyzing this criterion.

     C.  Whether the Operator was Negligent

     The citation in this case was issued under section
104(d)(1) of the Mine Act and charged that the violation
was caused by the unwarrantable failure of Unique Electric
to comply with section 57.18025. At the hearing, the
Secretary did not present any evidence with respect to
the unwarrantable failure allegation in the citation.
Accordingly, I vacated the unwarrantable failure
allegation and modified the citation to a section 104(a)
citation. I found that Mr. Warnock was negligent in
failing to ground the pump circuit in accordance with
his normal practice.

     D.  The Effect on the Operator's Ability to Continue
in Business

     The Commission held that I should consider "whether
the proposed penalty would affect Warnock's ability to meet
his financial obligations" when analyzing this criterion.
20 FMSHRC at 1122 (emphasis added). Given the financial
profile provided by Mr. Warnock, which I believe to be
reasonably accurate, I find that a $8,500 penalty would
affect his ability to meet his financial obligations. If
I determined that such a penalty was appropriate after
considering all six of the penalty criteria, I would allow
Mr. Warnock to pay the penalty in installments over a
period of time. As discussed below, however, I find that
such a penalty is not appropriate.

     E.  The Gravity of the Violation

     I found that the violation was serious and was of a
significant and substantial nature.

     F.  Demonstrated Good Faith of the Person Charged in
Attempting to Achieve Rapid Compliance after Notification
of the Violation

     I found that the violation was abated in good faith.
The violation was abated by replacing the electric pump
with a compressed air pump. Because it is not clear to
what extent Warnock was involved in the abatement, this
criterion is not a major factor in my penalty assessment.
Mr. Warnock testified that he recommended that an air
pump be used instead of an electric pump when he was
originally asked to install the pump. (Tr. 75, 372-73).

     G.  Determination of an Appropriate Civil Penalty

     In determining an appropriate penalty, I take into
consideration my findings with respect to all six of the
criteria. As directed by the Commission, I have not assumed
that because Kim Warnock no longer provides services to the
mining industry, no deterrent purpose would be served by
the penalty proposed by the Secretary or any other penalty.
20 FMSHRC at 1123.

     I find that the Secretary's proposed penalty is not
appropriate for a number of reasons. First, Unique Electric
was an extremely small business, as described above and
in my original decision. The proposed penalty was not
appropriate given Mr. Warnock's income and net worth.
Second, Unique Electric had no history of previous
violations.  Third, the Secretary did not establish that
the violation was a result of Unique Electric's
unwarrantable failure. This fact directly relates to
the negligence criterion and it was a major factor in
my assessment of a penalty in my original decision and
in this decision. Fourth, the proposed penalty would
affect Mr. Warnock's ability to meet his financial
obligations.

     As stated above, the "good faith" criterion was
not a major factor in my penalty assessment. Finally, I
considered the gravity criterion. This criterion is
extremely important because it takes into consideration
the hazards created by the violation.  I reemphasize my
finding that the violation was serious and was of a
significant and substantial nature.

     The penalty proposed by the Secretary was
"specially assessed" under 30 C.F.R.  100.5. The Secretary
usually proposes civil penalties for S&S violations using
the formula set forth in section 100.3. Section 100.5
gives the Secretary wide discretion to "specially assess"
penalties.  Penalties proposed under section 100.5 are
generally higher than penalties proposed under section
100.3. Among the factors that the Secretary considers when
deciding whether to specially assess a penalty are
whether the violation involves a fatality or serious injury
and whether the citation alleges an unwarrantable failure.
(30 C.F.R.  100.5(a) & (b)). As stated above, I vacated the
Secretary's unwarrantable failure determination. At the
hearing, the Secretary maintained that Mr. Warnock was
"not being charged with responsibility for" the fatality.
(Tr. 414, 28).

     If the Secretary had proposed the penalty in 1995
under the "regular assessment" formula in section 100.3,
the proposed penalty would have been $292 (41 points)
using Inspector Pederson's high gravity and high negligence
determinations, without a 30% reduction for good faith
abatement. I am not bound by the Secretary's penalty
regulations. I present this information solely to show
that establishing an appropriate civil penalty using the
criteria is not an exact science and that different
techniques yield different penalties.

     I find that a penalty of $400 is appropriate for the
citation in this case; Citation No. 3910427 issued September 9,
1994. I reach this conclusion taking into consideration all six
penalty criteria. The criteria that resulted a lower assessment
than that proposed by the Secretary are: (1) history of previous
violations; (2) appropriateness of the penalty to the size of the
business (income and net worth); (3) the negligence of the
operator; and (4) the effect of the penalty on the ability to
stay in business (ability to meet financial obligations).

                              IV. ORDER

     Mr. Kim Warnock, acting on behalf of Unique Electric, is
ORDERED TO PAY the Secretary of Labor the sum of $400.00 within
60 days of the date of this order, if he has not already done so.
Upon payment of this penalty, this case is DISMISSED.

                                   Richard W. Manning
                                   Administrative Law Judge

Distribution:

Jan M. Coplick, Esq., Office of the Solicitor, U.S. Department
of Labor, 71 Stevenson St., Suite 1110, San Francisco, CA
94105-2999  (Certified Mail)

Mr. Kim Warnock, 1136 Cedar Street, Shasta Lake City, CA
96019  (Certified Mail)

/RWM