1 

RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 16a0132p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

_________________ 

MOUNTAIN STATES CONTRACTORS, LLC, 

Petitioner, 

v. 

THOMAS PEREZ, Secretary of Labor, 

Respondent. 

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No. 15-3782 

On Petition for Review of a Final Order of the 

Occupational Safety and Health Review Commission. 

No. 13-2043. 

Argued: March 9, 2016 

Decided and Filed: June 3, 2016 

Before: DAUGHTREY, MOORE, and STRANCH, Circuit Judges. 

_________________ 

COUNSEL 

ARGUED: Howard M. Kastrinsky, KING & BALLOW, Nashville, Tennessee, for Petitioner. 

Juan C. Lopez, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for 

Respondent. ON BRIEF: Howard M. Kastrinsky, Michael D. Oesterle, Laura M. Mallory, 

KING & BALLOW, Nashville, Tennessee, for Petitioner. Juan C. Lopez, UNITED STATES 

DEPARTMENT OF LABOR, Washington, D.C., for Respondent. 

_________________ 

OPINION 

_________________ 

JANE B. STRANCH, Circuit Judge. During construction of a bridge over the 

Cumberland River, a crane’s boom cable snapped and the crane collapsed, shattering the glass 

enclosing the operator’s compartment and damaging a vehicle on the adjacent highway. 

>
No. 15-3782 Mountain States Contractors v. Perez Page 2 

Mountain States Contractors, LLC challenges the affirmance of a citation and penalty issued 

against it by the Occupational Safety and Health Commission (OSHC) following the incident. 

At a trial on the merits, the Administrative Law Judge determined that Mountain States had 

committed a willful violation of the wire rope inspection standard set forth in the Occupational 

Safety and Health Administration Act of 1970 (the Act). The ALJ found a violation of the Act 

because, prior to the accident, the crane’s boom cable had “visible broken wires” within the 

meaning of the provision requiring repair or replacement before further use, and that Mountain 

States had knowledge of this deficiency. For the following reasons, we deny the petition for 

review. 

I. BACKGROUND

The Tennessee Department of Transportation engaged Mountain States, a construction 

contractor based in Nashville, Tennessee, to build two bridges over the Cumberland River at its 

intersection with Highway 109 in Gallatin, Tennessee. (Appendix at 9.)1

On May 21, 2013, the boom cable of a Terex HC 165 crane snapped while the crane 

operator was “clamming,” or excavating material from under water, causing the boom—the 

extendable overhead arm of the crane controlled by the load-bearing wire boom cable—to 

collapse onto the adjacent highway. (Id. at 10-11, 13.) As the cable broke under tension, it 

whipped back to shatter the windows of the crane operator’s cab, (Id. at 29-30), and the boom hit 

a passing vehicle, (Supp. Appendix at 1177.) Though no person was injured, the subsequent 

Occupational Safety and Health Administration (OSHA) investigation determined that at least 

four people were exposed to risk as a result of the accident. (Appendix at 156.) After 

completion of the investigation, a complaint was filed against Mountain States alleging, among 

other things, violation of the wire rope inspection standard, 29 C.F.R. § 1926.1413(a)(2)(ii)(A). 

(Id. at 90.) 

 1

Citations to the Appendix refer to the page numbers listed in parentheses on the top right corner of the 

page. This pagination is continued in the Supplemental Appendix in the bottom right corner of the page. 
No. 15-3782 Mountain States Contractors v. Perez Page 3 

A. Wire Rope Inspection Standard and Worksite Safety Policies 

The Act requires that employers “comply with occupational safety and health standards 

promulgated under this chapter.” 29 U.S.C. § 654(a)(2). Subpart CC of the Act pertains to the 

use of cranes in construction, including the inspection standard for “wire rope” like the boom 

cable at issue. 29 C.F.R. § 1926.1401 et seq. The standard requires that a “competent person” 

perform “a visual inspection prior to each shift the [crane] is used” that includes “observation of 

wire ropes ... that are likely to be in use during the shift for apparent deficiencies.” 29 C.F.R. 

§ 1926.1413(a)(1). A “competent person” is “one who is capable of identifying existing and 

predictable hazards in the surroundings or working conditions which are ... hazardous, or 

dangerous to employees, and who has authorization to take prompt corrective measures to 

eliminate them.” 29 C.F.R. § 1926.1401. 

The boom cable, which runs through steel sheaves to adjust the height of the boom, is 

composed of multiple steel wires wound into strands and wrapped around a core. Id. According 

to Category II of the wire rope inspection standard, the crane must be taken out of service for 

repair if a cable has “visible broken wires” defined as either (1) “[s]ix randomly distributed 

broken wires in one rope lay,” or (2) “three broken wires in one strand in a rope lay.” 29 C.F.R. 

§§ 1926.1413(a)(2)(ii)(A)(1), (a)(4). These conditions are referred to as the “out-of-service 

criteria” or the “3 and 6 criteria.” (Appendix at 21, 28.) A “rope lay” is “the length along the 

rope in which one strand makes a complete revolution around the rope.” 29 C.F.R. 

§ 1926.1413(a)(2)(ii)(A)(1). 

Mountain States considered its crane operators “competent persons” within the meaning 

of the Act and delegated the task of pre-shift inspections of the crane to them. (Petitioner Br. at 

10.) The crane operators were empowered to remove a crane from service pursuant to the 

requirements of the Act and in conformity with Mountain States’ policy that “equipment found 

to have defects in any critical area which could affect the safe operation of the equipment shall 

be tagged accordingly and taken out of service until proper repairs have been made.” (Appendix 

at 222.) 
No. 15-3782 Mountain States Contractors v. Perez Page 4 

The crane operators documented the results of their inspections on a Daily Inspection 

Form. The Form contained a checklist for components of the crane separated into two sections 

based on whether the component could be inspected in a “walk around inspection” or required 

the operator to “climb up onto machine.” (Id. at 171-99). As the operator inspected each 

component on the list, he checked one of three options defined in the Form’s “explanation of 

terms” section: (1) “satisfactory” if the item was “in good working condition,” (2) “adjust” if the 

“item needs minor adjustment at first opportunity,” and (3) “repair” if the item “needs to be 

repaired before further operation.” (Id.) (emphasis added). The Form also included a “remarks 

or comments” section for notes on components that needed to be replaced, specific care 

instructions and the like (e.g., “2nd line needs to be replaced. Crane fully greased.”) (Id. at 

171.) An instruction to “submit yellow copy [of Daily Inspection Form] to project office at end 

of each week” appeared at the bottom of the Form. (Id. at 171-99.) In practice, however, the 

Forms were maintained in the inspection book in the crane’s cab until full and then they were 

shipped to a storage facility without any review. (Id. at 19-20, 28, 164.) 

Beyond these measures pertaining specifically to the crane, other safety practices 

instituted by Mountain States included daily “pre-work huddles” during which supervisors 

reviewed the day’s tasks and related safety issues, (id. at 572), and weekly safety training 

sessions, (id. at 54, 412.) Weekly in-house site safety audits were supplemented by regular 

safety audits conducted by a third party. (Id. at 728.) 

B. The OSHA Inspection and Trial 

The accident was reported to OSHA, which launched an investigation of the worksite led 

by Compliance Safety and Health Officer Michelle Sotak. (Id. at 47; Supp. Appendix at 1145.) 

At the conclusion of the investigation, Mountain States was issued three Citations and Notice of 

Penalty—the first citation alleged a serious violation of the Act, the second a willful violation, 

and the third an “other-than-serious” violation that carried no financial penalty. (Appendix at 

94-96.) A complaint was filed with the OSHC seeking affirmance of the three citations. (Id. at 

90.) Mountain States timely filed a Notice of Contest regarding the first two citations and their 
No. 15-3782 Mountain States Contractors v. Perez Page 5 

associated monetary penalties.2 (Id. at 122-23.) Prior to the trial on September 16 to 18, 2014, 

the parties reached a settlement with respect to the first citation. (Id. at 123.) Thus, the only 

issue considered by the ALJ was the second citation alleging a willful violation: “Hwy 109 

@ Cumberland River – On or about 5/21/13, damaged cables were not removed from service.” 

(Id. at 95.) See 29 C.F.R. § 1926.1413(a)(4)(ii)(B) (stating that, in the presence of a Category II 

deficiency, “operations involving use of the wire rope in question must be prohibited until 

. . . [t]he wire rope is replaced.”). 

After the three-day trial on the merits, the ALJ found that the Secretary of Labor had 

satisfied the burden to show the alleged violation by a preponderance of the evidence. The ALJ 

affirmed the second citation and assessed a penalty of $60,000.00 on Mountain States. 

(Appendix at 169-70.) On appeal, Mountain States asserts that the record does not support a 

finding that the Secretary met the second and fourth conditions to show a prima facie violation of 

the Act. (Petitioner Br. at 17.) Moreover, Mountain States contends that the ALJ erroneously 

included “cracked” or “fractured” wires within the definition of a Category II deficiency and also 

misinterpreted the meaning of “competent person” as used in the wire rope inspection standard. 

(Id. at 13-14.) 

II. STANDARD OF REVIEW

This court’s review of decisions reached by the OSHC is a limited one. The ALJ’s 

determination will be set aside if it is “arbitrary, capricious, an abuse of discretion, or contrary to 

law.” R.P. Carbone Constr. Co. v. Occupational Safety & Health Review Comm’n, 166 F.3d 

815, 818 (6th Cir. 1998). We accept the ALJ’s findings of fact if they are “supported by 

substantial evidence on the record considered as a whole.” Id.; see also Danis-Shook Joint 

Venture XXV v. Sec’y of Labor, 319 F.3d 805, 809 (6th Cir. 2003). Substantial evidence is “such 

relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Chao 

v. Occupational Safety and Health Review Comm’n, 540 F.3d 519, 528 (6th Cir. 2008) (internal 

citation omitted). It is less than a preponderance of the evidence, but “more than a scintilla.” 

R.P. Carbone Constr. Co., 166 F.3d at 818. 

 2

Mountain States did not admit the violation set forth in the third citation, but chose not to contest it 

because it was issued without a proposed monetary penalty. (Petitioner Br. at 3.) 
No. 15-3782 Mountain States Contractors v. Perez Page 6 

To establish a prima facie violation of the Act, the Secretary of Labor must show by a 

preponderance of the evidence that “(1) the cited standard applies to the facts, (2) the 

requirements of the standard were not met, (3) employees had access to the hazardous condition, 

and (4) the employer knew or could have known of the hazardous condition with the exercise of 

reasonable diligence.” Carlisle Equip. Co. v. Sec’y of Labor & Occupational Safety, 24 F.3d 

790, 792-93 (6th Cir. 1994) (internal citation omitted). 

III. LEGAL ANALYSIS

Mountain States admits that the Secretary of Labor has satisfied the first and third 

conditions to establish a prima facie violation of the Act. (Petitioner Br. at 17.) First, the cited 

standard, 29 C.F.R. § 1926.1413(a)(4)(ii)(B), “applies to cranes used in construction.” 

(Appendix at 141.) The third condition is also met, as “at least four people were exposed to the 

falling boom and cable.” (Id. at 156.) Thus, the substance of the ALJ’s examination focused on 

the second and fourth conditions—the requirements of the standard and the knowledge of 

Mountain States. 

A. Condition Two: Requirements of the Wire Rope Inspection Standard 

The ALJ found that “the great weight of the evidence” supported the Secretary of Labor’s 

allegation “that the terms of the cited standard were violated.” (Id. at 152.) In reaching this 

conclusion, the ALJ looked to the Daily Inspection Forms, evidence produced during Officer 

Sotak’s investigation, and witness testimony presented at trial. 

1. Condition of the Crane Components 

Mountain States’ Daily Inspection Forms reveal that components of the crane, including 

the boom cable and the auxiliary cable,3

 were in need of replacement as early as three months 

before the accident. Unlike the boom cable, the auxiliary cable was eventually replaced 

approximately one month before the accident. Originally, the Secretary of Labor sought to 

pursue violations relating to both cables. (Id. at 130.) However, the ALJ found that any alleged 

violation based on the condition of the auxiliary cable was time-barred because the citation was 

 3

The auxiliary cable opens and closes the crane’s bucket. 
No. 15-3782 Mountain States Contractors v. Perez Page 7 

issued more than six months after it was replaced. See 29 U.S.C. § 658(c) (“No citation may be 

issued under this section after the expiration of six months following the occurrence of any 

violation.”). While the crane operators’ observations regarding both cables are recounted for a 

complete explanation of the Forms, only the condition of the boom cable is considered on 

appeal. 

As early as February 19, 2013, crane operator Aaron Hutchins noted in his Daily 

Inspection Form that the auxiliary cable needed to be replaced. (Appendix at 127, 171.) He also 

checked the “repair” box for the auxiliary winch, indicating that it should be “repaired before 

further operation.” (Id.) However, neither component was replaced despite continued use of the 

crane. Hutchins conducted daily inspections on February 25 and 26, and March 27, making the 

same observation regarding the auxiliary cable in his Daily Inspection Form. (Id. at 173-75.) 

His growing agitation concerning the cable’s condition is apparent in the increasing number of 

exclamation points punctuating the repeated “aux cable needs to be replaced” notation—three 

exclamation points on April 2 and fourteen on April 9. (Id. at 177, 179.) Site foreman and crane 

operator Shawn Shehane made the same notation (absent the exclamation points) in his nine 

inspections throughout the month.4

 (Id. at 176, 180-85, 187-88.) The Daily Inspection Forms 

for that period also bore a check in the “repair” box for the cable spool. (Id.) A new auxiliary 

cable was finally ordered on April 26 and installed on the same day. It is not clear from the 

record if or when the auxiliary winch and cable spool were repaired. 

It was first noted in the comments section of an unsigned Daily Inspection Form for April 

13, more than a month prior to the accident, that the boom cable needed to be replaced. (Id. at 

182.) Two days later, this comment was repeated in a Daily Inspection Form completed by 

Shawn Shehane. (Id. at 183.) The poor condition of the boom cable appears to have attracted 

attention even earlier, as an Inspection Form from the preceding week mentioned that a new 

boom cable had been ordered. (Id. at 181.) Throughout the rest of April, the Daily Inspection 

Forms completed by Shehane and Hutchins noted either that the boom cable was in need of 

replacement or that a new one had been ordered. Hutchins also marked the “repair” box for the 

 4

Shawn Shehane is the nephew of Tommy Shehane, site superintendent for the project. (Appendix at 16.) 

To avoid confusion, both are referred to by their first or full names. 
No. 15-3782 Mountain States Contractors v. Perez Page 8 

boom cable, indicating it should be “repaired before further operation.”5 (Id. at 186, 189.) There 

is no record of the replacement boom cable’s arrival. 

A third Mountain States employee, Alton Brian Bundy, operated the crane during most of 

the month of May. (Id. at 190-97.) Unlike his colleagues, he marked all components of the 

crane as “satisfactory” without further comment until the day before the accident. (Id.) On May 

20, he noted for the first time that the crane needed a new boom cable, though he continued to 

mark all components as “satisfactory.” (Id. at 198.) Bundy repeated this comment on the Daily 

Inspection Form for May 21, the day that the cable snapped. (Id. at 199.) According to witness 

testimony presented at trial, there was a replacement boom cable at the worksite waiting to be 

installed on the day that the crane collapsed. (Id. at 128.) 

Despite the repeated notations in the Daily Inspection Forms regarding the poor condition 

of the boom cable, the annual inspection of the crane conducted by equipment manager Robert 

Kindrat in early April made no mention of it. (Id. at 43-45; Supp. Appendix at 1172-74.) 

Kindrat testified that, although he had observed two broken wires in two different lays of the 

boom cable, it did not meet the out-of-service criteria at the time of his inspection. (Appendix at 

45.) However, he reached this conclusion without “booming down” the crane to unspool a larger 

section of cable for inspection. (Id. at 44.) Notably, booming down is a required component of 

an annual inspection when “the results of the visual inspection ... indicate that further 

investigation necessitating taking apart equipment components or booming down is needed.” 

29 C.F.R. §§ 1926.1412(d)(1), (f)(1). The only mention of either cable on the Annual Inspection 

Form is a brief note that “aux cable is bad” and “new cable is ordered!” (Supp. Appendix at 

1173.) 

Kindrat’s conclusions, insofar as they differed from the Daily Inspection Forms, were 

soon further called into question by a follow-up inspection of the crane conducted by Mechanic 

Darryl Meredith and Hutchins. (Appendix at 36.) In a statement signed the day after the 

accident, Hutchins claimed that he and Meredith discovered additional broken wires in the boom 

cable shortly after the annual inspection and took this information to foreman Shawn Shehane, 

 5

The boom cable is referred to in the Daily Inspection Form checklist as “boom hoist and reeving.” 

(Appendix at 38.) 
No. 15-3782 Mountain States Contractors v. Perez Page 9 

warning that the boom cable was “bad,” had broken wires throughout, met the out-of-service 

criteria, and needed to be replaced. (Supp. Appendix at 1168.) However, while a replacement 

boom cable was eventually ordered, operations involving the crane did not cease until its 

collapse. (Id.) 

2. Testimony at Trial 

At trial, Officer Sotak testified regarding her interviews in May and July with the three 

crane operators. See R.P. Carbone Const. Co., 166 F.3d at 819 (explaining that “relevant and 

material hearsay may constitute substantial evidence”) (citing Bobo v. United States Dept. of 

Agriculture, 52 F.3d 1406, 1414 (6th Cir. 1995)). She testified to interviewing Hutchins the day 

after the accident, (Supp. Appendix at 1146), at which time, he stated specifically that “he had 

observed six randomly broken wires in a lay and three broken wires in a strand” of the boom 

cable before the accident. (Id. at 1147.) She further testified that Hutchins had informed Shawn 

Shehane of the “bad” cable and that “they needed a new one.” (Id.) These statements were 

recorded and signed by Hutchins. (Id. at 1168). Officer Sotak spoke to Bundy the same day, but 

at that time, he claimed not to know what had caused the cable to break. (Id. at 1149.) When 

she interviewed the two together in a follow-up meeting in July, Officer Sotak testified, both 

Hutchins and Bundy stated that, “the crane should have been brought down” prior to the accident 

because “they had observed broken wires and smashed wires.” (Id. at 1150.) 

Officer Sotak also interviewed Shawn Shehane on the day after the accident. She 

testified to this conversation, in which Shawn told her that Hutchins had warned him of his 

concerns and that Shawn had observed “broken wires” in the boom cable, but not enough to 

satisfy the out-of-service criteria. (Id. at 1150-51.) Shawn’s interview was also recorded in a 

signed statement. (Id. at 1179.) 

At trial, Hutchins departed from his signed statement and his interview (as testified to by 

Officer Sotak) by refusing to use the adjective “broken” in his testimony. Contradicting his prior 

statement, Hutchins denied that there were “six broken wires in any of the lay of the boom cable” 

prior to the accident. (Appendix at 39.) He did, however, confirm that he observed “a lot of 

breaks in the [boom] cable,” as early as April 18, (Supp. Appendix at 1119), and that these so-
No. 15-3782 Mountain States Contractors v. Perez Page 10 

called “hairline fractures,” which numbered at least six in one lay, caused him to check the 

“repair” box for the boom cable during his April 28 inspection, (Appendix at 38-39). He further 

testified that Mountain States’ safety policy required that operations involving equipment with 

the “repair” designation cease pending repair, but that the boom cable continued to be used 

without repair or replacement. (Id. at 38.) 

Bundy and Shawn Shehane also adjusted their language in trial testimony, leading the 

ALJ to observe that “[t]his sort of wordplay appears as if it were coached and aimed at 

mitigating the consequences of their observations” made prior to the accident. (Id. at 154.) 

Contrary to Officer Sotak’s testimony that Bundy had described the wires as “broken” and 

“smashed” such that the boom cable should have been taken out of service, at trial, Bundy 

characterized the alleged defects as just “some,” “a couple,” or “a few” cracks in multiple lays. 

(Id. at 31.) Similarly, Shawn Shehane testified that he had seen “cracked wires” in the boom 

cable during the month of April but, though he could not recall how many, they did not meet the 

“3 and 6 criteria.” (Id. at 20-21.) He did confirm that the boom cable was sufficiently worn to 

warrant a call to Tommy Shehane to order a replacement. (Id. at 21.) 

The ALJ largely found the testimony of Mountain States’ crane operators “generalized 

and obfuscatory,” (id. at 154), as they engaged in “verbal gymnastics” by “attempt[ing] to 

diminish what they saw through the use of hairline distinctions between a ‘broken’, ‘cracked’, or 

‘fractured’ wire and generalizations as to the number of deficient wires they observed.” (Id. at 

153). Thus, he found their testimony of little evidentiary weight. 

3. The Findings of the ALJ 

Giving significant weight to “(1) [Officer] Sotak’s testimony as to [Shawn] Shehane’s 

and Hutchins’ pretrial statements; (2) the Daily Inspection [F]orms; (3) the pretrial statements of 

the crane operators, which show substantial consistency as to the condition of the boom cable; 

and (4) the trial testimony of Hutchins, insofar as that testimony is consistent with the other 

operators’ statements to [Officer] Sotak, as well as his own pretrial statements,” the ALJ found 

by a preponderance of the evidence that Mountain States had violated the terms of the Act’s wire 

rope inspection standard. (Id. at 156.) 
No. 15-3782 Mountain States Contractors v. Perez Page 11 

This Court does not set aside the credibility determinations of an ALJ “unless found to be 

inherently incredible or patently unreasonable.” Absolute Roofing & Const., Inc. v. Sec’y of 

Labor, 580 F. App’x 357, 360 (6th Cir. 2014) (quoting First Nat’l Monetary Corp. v. 

Weinberger, 819 F.2d 1334, 1339 (6th Cir. 1987) (internal quotation marks and citations 

omitted)). While the “reviewing court does not act, even in credibility matters, as a mere rubber 

stamp for the administrative action on appeal,” upon consideration of the witness testimony, 

there is ample justification to support the ALJ’s conclusions. Id. 

First, during the investigation, in signed statements or when questioned by Officer Sotak, 

all three crane operators admitted that they had observed broken wires in the boom cable. Two 

of the three operators, Hutchins and Bundy, confirmed in their July interviews with Officer Sotak 

that the crane should have been taken out of service pending replacement of the boom cable. 

Though Shawn Shehane maintained that the boom cable did not meet the out-of-service criteria, 

he too stated—up until he was questioned at trial—that he had observed broken wires in the 

boom cable. 

Second, the observations of the crane operators were supported by the Daily Inspection 

Forms, on which the operators consistently noted that the boom cable needed to be replaced, and 

that a replacement was ordered, throughout April. This is particularly meaningful given that the 

“repair” box on the Form mandated the equipment be taken out of service until it could be 

replaced. According to Kindrat’s testimony, the annual inspection also revealed broken wires on 

the cable. Though Kindrat did not deem these sufficient to constitute a Category II deficiency, 

he failed to boom down the crane to actually inspect the continuous length of the cable. The ALJ 

found this “merely perfunctory” inspection contrary to both the requirements of the Act and 

Mountain States’ own policy. See 29 C.F.R. §§ 1926.1412(d)(1), (f)(1). 

Mountain States argues on appeal that the ALJ could find a violation of the wire rope 

inspection standard only by expanding the regulation’s use of “broken” to include wires that are 

“cracked” or “fractured,” and this would deprive Mountain States of lawful notice in violation of 

the Fifth Amendment right to due process. (Petitioner Br. at 17-25.) This argument 

mischaracterizes the ALJ’s reasoning, which first found that the boom cable contained a 

sufficient number of “visible broken wires,” within the plain meaning of the word, to constitute a 
No. 15-3782 Mountain States Contractors v. Perez Page 12 

Category II deficiency. Only then did the ALJ respond to what he judged to be a disingenuous 

strategy—developed during the legal proceeding—and implemented by Mountain States 

between the investigation and the trial. The ALJ then engaged in a limited interpretation 

exercise to provide further basis for his initial finding. 

The ALJ properly examined the record evidence and the demeanor of the witnesses, and 

noted meaningful inconsistencies. The ALJ then explained the reasons for weighing the 

evidence as he did, including mention that the witnesses’ consistent refusal to use their prior 

descriptive language appeared to have been coached. Taken on the whole, we conclude that the 

record evidence and trial testimony adequately support the conclusion that the boom cable 

suffered from a Category II deficiency prior to the accident. The unwillingness of Mountain 

States’ witnesses to use the word “broken” at trial is not fatal to the ALJ’s finding, which need 

only be supported by substantial evidence—not a preponderance—to be affirmed on review. 

Based on this examination, a reasonable mind could find that Mountain States failed to meet the 

requirements of the Act’s wire rope inspection standard. See First Nat’l Monetary Corp., 819 

F.2d at 1339 (deferring to the ALJ’s credibility determination regarding a witness where the ALJ 

assessed his demeanor and highlighted the portions of the witness’s interview that contradicted 

his trial testimony). 

B. Condition Four: Knowledge of the Hazardous Condition 

The fourth and final condition for a prima facie violation of the Act requires that the 

employer knew of the hazardous condition, or could have known through the exercise of 

reasonable diligence. Carlisle Equip. Co., 24 F.3d at 792-93. The knowledge of a supervisor or 

foreman, depending on the structure of the company, can be imputed to the employer. See

Danis-Shook Joint Venture XXV, 319 F.3d at 812 (observing that “the knowledge of a supervisor 

may be imputed to the employer” and ascribing the foreman’s knowledge of his own failure to 

wear protective gear to the defendant company); see also Brock v. L.E. Myers Co., High Voltage 

Div., 818 F.2d 1270, 1277 (6th Cir. 1987) (“In cases involving negligent behavior by a 

supervisor or foreman which results in dangerous risks to employees under his or her 

supervision, such fact raises an inference of lax enforcement and/or communication of the 

employer’s safety policy.”). 
No. 15-3782 Mountain States Contractors v. Perez Page 13 

1. Actual Knowledge of the Hazardous Condition 

The ALJ determined that at least three of Mountain States’ employees had actual 

knowledge of the condition of the boom cable. Shawn Shehane, as foreman and supervisor of a 

crew, was a “supervisor” for the purpose of the Act, thus his knowledge can be attributed to 

Mountain States. See Danis-Shook Joint Venture XXV, 319 F.3d at 812. Substantial evidence 

indicates that he had actual knowledge of the boom cable’s condition. Shawn was the first to 

document that the boom cable needed to be replaced. (Appendix at 182.) He subsequently noted 

on multiple Daily Inspection Forms throughout the month of April that a replacement had been 

ordered, indicating that the integrity of the boom remained a prominent issue. (Id. at 182-89.) 

He also received information from Hutchins that the cable was “bad.” (Id. at 182; Supp. 

Appendix at 1168.) In his signed statement, Shawn acknowledged that he had observed broken 

wires in the cable; however, he maintained they did not meet the out-of-service criteria. In light 

of this evidence, the ALJ determined that “[r]egardless of whether [Shawn] concluded, 

reasonably or not, that what he observed constituted a Category II violation, Shawn saw the 

cable in a condition that the Court has found violated the terms of the standard.” (Appendix at 

157-58.) Thus, the ALJ concluded that “[c]learly Shawn Shehane had knowledge of the 

condition.” (Id. at 157.) 

The ALJ similarly found that Hutchins and Bundy had actual knowledge of the Category 

II deficiency. (Id. at 158-59.) Mountain States disputes this finding on appeal and argues that, 

even if Hutchins and Bundy did have actual knowledge of a Category II deficiency in the boom 

cable, the ALJ erred by imputing this knowledge to the company because neither operator was a 

supervisor. (Petitioner Br. at 32.) Mountain States argues that to hold otherwise would create “a 

new agency relationship, in violation of due process,” by which the “decision that an employee 

[is] designated as a competent person” would make the employee “automatically an agent of the 

employer.” (Id. at 34-35.) Mountain States further contends that this finding wrongfully 

deprives it of the affirmative defense of unpreventable employee misconduct. (Id.) 

This court considered a similar argument in All Erection & Crane Rental Corp. v. 

Occupational Safety & Health Review Commission, an unpublished decision with persuasive 

authority. 507 F. App’x 511 (6th Cir. 2012). There, the employer disputed the attribution of an 
No. 15-3782 Mountain States Contractors v. Perez Page 14 

employee’s knowledge to the company on the basis that the employee was not technically a 

foreman or supervisor. Id. at 515-16. A panel of this court agreed with the ALJ that “official 

status is not controlling” in this inquiry. Id. Instead, we accepted the ALJ’s determination that 

the employee was a supervisor for the purpose of the company’s knowledge because he “was in 

charge of the crane operations on the site” and was “responsible for the safety of the [equipment 

at issue].” Id. (citing Tampa Shipyards, Inc., 15 BNA OSHC 1533, at *6 (Nos. 86–360, 86–469, 

1992) (“An employee who has been delegated authority over other employees, even if only 

temporarily, is considered to be a supervisor for the purposes of imputing knowledge to an 

employer.”)). The same conclusion is warranted here. 

Mountain States attacks the ALJ’s decision by attempting to isolate each rationale offered 

as if the decision rested solely upon that one explanation. This mischaracterizes the decision. 

The ALJ explained the several bases of his decision, drawing support for his finding that 

Mountain States had actual knowledge of the boom cable’s condition from the record evidence 

of the knowledge of three crane operators, Shawn Shehane, Hutchins, and Bundy—all 

“competent persons” under the Act. First, the ALJ imputed to Mountain States the actual 

knowledge of foreman Shawn; then, and “on the other hand,” the ALJ determined that Hutchins 

and Bundy qualified as supervisors under the Act, such that their knowledge could be imputed to 

Mountain States, because “the crane operators are given sole authority to monitor a crane, with 

what appears to be little supervision, and can stop work by pulling that crane out of service due 

to apparent safety hazards.” (Appendix at 158-59.) 

This latter, subsidiary argument of the ALJ was based on his factual determination of 

how employees actually functioned on the work site and does not wrongfully deprive Mountain 

States of the opportunity to raise affirmative defenses, such as “unpreventable employee 

misconduct.” Any impact on the litigation stance of Mountain States results from its decision to 

vest its crane operators with total responsibility to monitor the condition of the crane followed 

by, according to credible testimony, its failure to halt operations despite repeated reports from all 

three operators (in the Daily Inspection Forms and, with respect to Hutchins, verbally) that the 

boom cable was “bad” and needed to be replaced. To conclude otherwise would incentivize 

companies to evade accountability by expediently delegating complete and unaccountable 
No. 15-3782 Mountain States Contractors v. Perez Page 15 

oversight to an employee without the “supervisor” title and then denying that employee’s 

knowledge. 

On the record before us, the ALJ’s conclusions—based on a number of findings 

regarding actual knowledge—are supported by substantial evidence. 

2. Constructive Knowledge of the Hazardous Condition 

The Secretary of Labor can show constructive knowledge on the part of a supervisor by 

establishing by a preponderance of the evidence that knowledge of a hazard could have been 

obtained through the exercise of reasonable diligence. See Carlisle Equip. Co., 24 F.3d at 793. 

When considering the question of reasonable diligence, the ALJ looks to a number of factors 

including: “an employer’s obligation to inspect the work area, to anticipate hazards to which 

employees may be exposed, and to take measures to prevent the occurrence.” Kokosing Const. 

Co. v. Occupational Safety & Hazard Review Comm’n, 232 F. App’x 510, 512 (6th Cir. 2007) 

(internal quotation marks omitted). 

In addition to the requirements of the Act, Mountain States’ own policy requires ongoing 

evaluation of worksites, procedures, and equipment to ensure compliance with the company’s 

safety program. (Appendix at 217.) The policy requires project managers and superintendents to 

conduct periodic inspections, and supervisors or foremen to (1) “ensure that work is stopped if 

[an] unsafe condition arises,” (2) to “[e]nsur[e] that all equipment is maintained in safe 

condition,” and to “[p]rohibit[] the use of unsafe equipment.” (Id. at 217-19.) 

The ALJ found that, in addition to the actual knowledge of Shawn Shehane, Hutchins, 

and Bundy, Mountain States had constructive knowledge of the boom cable’s condition because 

reasonable diligence would have revealed the presence of a Category II deficiency. (Id. at 156-

59.) Bridge superintendent Tommy Shehane was responsible for the foremen working at the 

construction site and their crews. (Id. at 15.) Foreman Shawn Shehane testified that he reported 

to Tommy in April that the boom cable was showing signs of wear. (Id. at 21.) Though Tommy 

placed the order for a new cable, he never inspected the old one despite its continued use, instead 

relying on the crane operators to monitor the situation. (Id.) Furthermore, there is no evidence 

in the record that Tommy reviewed the Daily Inspection Forms, even after receiving notice that 
No. 15-3782 Mountain States Contractors v. Perez Page 16 

the boom cable should be replaced. (Id. at 158.) In light of this evidence, the ALJ concluded 

that “Tommy Shehane, though he may not have observed the condition, had the opportunity to 

do so and thus had constructive knowledge of the condition.” (Id.) 

Paired with the “perfunctory” annual inspection performed by the equipment manager, 

who did not boom down the crane for closer inspection after observing two broken wires, a 

reasonable mind could easily agree that there was “very little supervision ... occurring by way of 

inspection in this particular work area,” at least with respect to operation of the crane, and that 

“management failed to exercise reasonable diligence in supervising its employees, and thus 

knowledge is established.” (Id.) 

Mountain States complains that the ALJ’s reasoning amounts to a finding that effectively 

nullifies the role of “competent persons” under the Act, because their work must now be 

overseen by a supervisor or they are inherently supervisors themselves. (Petitioner Br. at 31.) 

We disagree with this overbroad characterization and the hypothetical policy disasters it predicts. 

First, this objection ignores the full basis of the ALJ’s decision that the employer knew or by 

exercising reasonable diligence would have known of the violation. (Appendix at 156.) That 

determination relied upon the failure to satisfy factors including the “employer’s obligation to 

inspect the work area, anticipate hazards, take measures to prevent violations from occurring, 

adequately supervise employees, and implement adequate work rules and training.” (Id. at 156-

57.) Even without attributing the crane operators’ knowledge to Mountain States, there is 

substantial evidence that the company took a lax approach to supervision regarding the crane and 

that reasonable diligence would have revealed the deficiency. And as explained above, the ALJ 

also properly examined the level and quality of supervision of Mountain States over its crane 

operators as a factor of the constructive knowledge inquiry. See All Erection & Crane Rental 

Corp., 507 F. App’x at 515-16. 

For these reasons, we conclude that the ALJ did not abuse his discretion by finding both 

actual knowledge and constructive knowledge on the part of Mountain States. The ALJ’s 

holding satisfies the deferential standard of review on appeal and furthers the “underlying 

policy” in OSHA violation cases to “impose certain duties or standards upon the [c]ompany in an 
No. 15-3782 Mountain States Contractors v. Perez Page 17 

attempt to prevent the possibility of . . . injury.” Donovan v. Capital City Excavating Co., 

712 F.2d 1008, 1010 (6th Cir. 1983). 

IV. CONCLUSION

Based on the foregoing reasoning, we DENY the petition for review.