### FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

#### 601 New Jersey Avenue, N.W.Suite 9500Washington, D.C.  20001



`1
                                        OPEN SESSION

       - - - - - - - - - - - - - x 
                                 : 
       SECRETARY OF LABOR,       : 
       MINE SAFETY AND HEALTH    : 
       ADMINISTRATION (MSHA),    : 
                                 : 
                 Plaintiff,      : 
                                 : 
            v.                   :  Docket Nos. 
                                 :  SE 2002-11 
       SEDGMAN,                  :  SE 2003-69 
       DAVID GILL, EMPLOYEE OF   :  SE 2003-189 
       SEDGMAN,                  : 
                                 : 
                 Defendant.      : 
                                 : 
       - - - - - - - - - - - - - x

                                Thursday, January 26, 2006 
 
                                Federal Mine Safety and 
                                  Health Review Commission 
                                601 New York Avenue, N.W. 
                                Suite 9500 
                                Washington, D.C.  20001

                 The oral argument in the above-entitled 
 
       matter convened, pursuant to notice, at 10:00 a.m. 
 
       BEFORE: 
 
                 MICHAEL F. DUFFY, Chairman 
                 MARY LUCILLE JORDAN, Commissioner 
                 STANLEY C. SUBOLESKI, Commissioner 
                 MICHAEL G. YOUNG, Commissioner . 



 
                                                                  2 
 
       APPEARANCES: 
 
            On behalf of the Secretary of Labor (MSHA): 
 
                 JACK POWASNIK, ESQ. 
                 U.S. Department of Labor 
                 1100 Wilson Boulevard 
                 Arlington, Virginia  22209 
                 (202) 693-9333

            On behalf of Mr. David Sedgman: 
 
                 R. HENRY MOORE, ESQ. 
                 Jackson Kelly, PLLC 
                 Three Gateway Center 
                 401 Liberty Avenue 
                 Suite 1340 
                 Pittsburgh, Pennsylvania  15222 
                 (412) 434-8055



 
                                  - - - 
 
                             C O N T E N T S

       ORAL ARGUMENTS                                 PAGE 
 
       On behalf of Sedgman                             5 
 
       On behalf of the Secretary of Labor, (MSHA)     20 . 



 
                                                                  3 
 
   1                      P R O C E E D I N G S 
 
   2             CHAIRMAN DUFFY:  We will go on the record 
 
   3   and come to order.  Good morning.  The Commission 
 
   4   is hereby convened an open session Thursday,

   5   January 26, 2006 to hear oral argument in the 
 
   6   matter entitled Secretary of Labor versus Sedgman, 
 
   7   Docket Numbers SE 2002-11, SE 2003-69, and SE 
 
   8   2003-189. 
 
   9             Present are myself, Chairman Duffy,

  10   Commissioner Jordan, Commissioner Suboleski, and 
 
  11   Commissioner Young.  By the terms of the commission 
 
  12   order of setting oral argument, Sedgman shall 
 
  13   proceed first and is allocated 15 minutes to 
 
  14   present oral argument with respect to the issues

  15   raised by its petition for review and may reserve 
 
  16   up to five minutes of that time for rebuttal. 
 
  17             The Secretary is allocated 15 minutes in 
 
  18   which to present a response to Sedgman.  Following 
 
  19   Sedgman's rebuttal, if any, the Secretary is

  20   allocated 15 minutes to present oral argument with 
 
  21   respect to the issues raised by her petition for 
 
  22   review and may reserve up to 5 minutes of that time . 



 
                                                                  4 
 
   1   for rebuttal.  Sedgman is allocated 15 minutes in 
 
   2   which to respond to the Secretary. 
 
   3             I would ask at this time that counsel 
 
   4   introduce themselves and indicate how they have

   5   decided to divide up their time. 
 
   6             MR. MOORE:  I'm R. Henry Moore 
 
   7   representing Sedgman and I have divided up my 
 
   8   initial argument time reserving three minutes for 
 
   9   rebuttal.

  10             CHAIRMAN DUFFY:  Three? 
 
  11             MR. MOORE:  Three. 
 
  12             CHAIRMAN DUFFY:  Okay. 
 
  13             MR. POWASNIK:  Good morning, 
 
  14   Commissioners.  My name is Jack Powasnik.  I

  15   represent the Secretary of Labor and I'm reserving 
 
  16   five minutes for rebuttal. 
 
  17             CHAIRMAN DUFFY:  Okay, Mr. Moore, if 
 
  18   you'll proceed. 
 
  19                ORAL ARGUMENT ON BEHALF OF SEDGMAN

  20             MR. MOORE:  May it please the Commission, 
 
  21   Sedgman has appealed two issues involving citations 
 
  22   that arose out of an accident at the Jim Walters . 



 
                                                                  5 
 
   1   Resources No. 4 Preparation Plant. 
 
   2             Sedgman had been hired to do a 
 
   3   modification to that plant.  It was a Jim Walters 
 
   4   Plant.  They hired in order to perform the actual

   5   work onsite, a long time contractor of Jim Walters 
 
   6   PIW.  Sedgman was hired to do the modifications. 
 
   7   PIW had a separate contract with Jim Walters in 
 
   8   order to repair or replace any deteriorated steel. 
 
   9   Sedgman had one employee on site, a supervisor of

  10   David Gill. 
 
  11             Sedgman received two citations and the 
 
  12   issues on appeal are whether or not a violation of 
 
  13   77.200 existed and whether it was appropriate to 
 
  14   cite Sedgman for that violation as well as to cite

  15   Sedgman for the 77.1710(g) citation with respect to 
 
  16   fall protection. 
 
  17             77.200 requires an operator to maintain a 
 
  18   mine structure in good repair.  The problem that we 
 
  19   have in this situation is fitting the circumstances

  20   of this case to that standard.  What was going on 
 
  21   here was demolition of a landing. 
 
  22             The ALJ held, at least as I read his . 



 
                                                                  6 
 
   1   decision that that standard applied at all times 
 
   2   and it required a operator made some level of 
 
   3   repair and he refused to carve out an exception for 
 
   4   demolition.

   5             The problem with that is demolition 
 
   6   doesn't fit readily into that standard.  It's 
 
   7   illogical.  Once you start to demolish a structure, 
 
   8   it's no longer in good repair.  For example, in 
 
   9   this case, they had removed already two pieces of

  10   the landing, so there is a gaping hole there.  By 
 
  11   anybody's common sense definition of good repair, 
 
  12   that would not constitute that. 
 
  13             COMMISSIONER YOUNG:  I would agree with 
 
  14   you that good repair under those circumstances in a

  15   vacuum might seem to violate common sense.  But 
 
  16   this is within the scope and context of the Mine 
 
  17   Safety and Health Act.  What's wrong with 
 
  18   construing as the Secretary has, the requirement to 
 
  19   mean in good repair means so as to not create a

  20   hazard in the workplace or to maintain it in a safe 
 
  21   condition. 
 
  22             MR. MOORE:  The problem with that is how . 



 
                                                                  7 
 
   1   do you define that.  And what the Secretary has 
 
   2   suggested is there should be some sort of overall 
 
   3   demolition plan, which goes way beyond the words of 
 
   4   this standard.

   5             Further, if you take the Secretary's 
 
   6   interpretation, means handed essentially for the 
 
   7   purpose in which it's being used, which is one of 
 
   8   our arguments, we met that standard.  Because the 
 
   9   expert evidence in this case is that that platform,

  10   though there was some deterioration of the steel, 
 
  11   was in good enough condition to demolish, which was 
 
  12   all that was going to happen. 
 
  13             The problem obviously was the method of 
 
  14   demolition.  That was what PIW employees selected.

  15   Because what Sedgman anticipated is they would 
 
  16   remove all of the landing, remove the concrete, fly 
 
  17   it out as Mr. Gill said, and then they would do the 
 
  18   structural steel.  What they did is they removed a 
 
  19   portion of the landing and then starting cutting

  20   structural steel, placing a load on the connection, 
 
  21   the last remaining connection that they left. 
 
  22             COMMISSIONER SUBOLESKI:  Are you arguing . 



 
                                                                  8 
 
   1   then that there was not a violation of 77.200 by 
 
   2   somebody here?  In other words, are you arguing 
 
   3   that 77.200 can't apply to the process? 
 
   4             MR. MOORE:  I'm arguing that it can't

   5   apply to the process.  Whether or not there's a 
 
   6   violation for example for Jim Walters, whose plant 
 
   7   it has been all these years is another issue.  But 
 
   8   on the day before this accident occurred, the 
 
   9   Secretaries own experts said that platform was not

  10   in danger of falling. 
 
  11             So from Jim Walters' perspective on that 
 
  12   day, you wouldn't seem to have a violation.  But 
 
  13   I'm not going to speak for them.  Their case has 
 
  14   been resolved by settlement.  But in terms of--

  15             COMMISSIONER JORDAN:  But didn't a judge 
 
  16   find a hazard--that there was corrosion?  I mean 
 
  17   if--I think the case--it is hard to extract it from 
 
  18   the accident that it occurred.  It's so intertwined 
 
  19   and I guess maybe that's one of my questions.  Do

  20   you see the citation as being dependant on the fact 
 
  21   that the platform fell and there was an accident? 
 
  22             MR. MOORE:  I think it--from our . 



 
                                                                  9 
 
   1   perspective, it probably is, because if it--nobody 
 
   2   had done anything to that platform, it would  have 
 
   3   stayed in place.  If-- 
 
   4             COMMISSIONER JORDAN:  But then--but it

   5   didn't.  And of course, there was an accident 
 
   6   investigation and it seems to me that the judge, he 
 
   7   discussed the testimony of Taylor-- 
 
   8             MR. MOORE:  Yes. 
 
   9             COMMISSIONER JORDAN:  And he discussed the

  10   corrosion, the thickness loss, 80 percent thickness 
 
  11   loss due to corrosion, notch of a half dollar size. 
 
  12   He discussed various aspects of the deterioration 
 
  13   that were testified about and then he concluded, 
 
  14   "Based on these findings, I conclude that it was

  15   more likely than not that the supporting structures 
 
  16   had deteriorated to a condition that was 
 
  17   hazardous." 
 
  18             MR. MOORE:  Well, the problem with that 
 
  19   finding is that it's inconsistent to a degree with

  20   his finding and his footnote with respect to our 
 
  21   expert, Mr. Fill, where he said that Mr. Fill was 
 
  22   credible and he said that Mr. Fill testified that . 



 
                                                                 10 
 
   1   the platform was safe to demolish. 
 
   2             COMMISSIONER JORDAN:  Well, are you 
 
   3   referring to the--I thought you might be referring 
 
   4   to the footnote where he refers to Mr. Fill

   5   testifying credibly that the platform would have 
 
   6   fallen, even without any corrosion or deterioration 
 
   7   based on the actions of the miners who cut the 
 
   8   supporting beams. 
 
   9             MR. MOORE:  That's the same footnote.

  10             COMMISSIONER JORDAN:  That's the same 
 
  11   footnote.  Now I'm not sure that they're 
 
  12   inconsistent.  I mean one could conclude that the 
 
  13   platform fell--would've have fallen regardless of 
 
  14   any of the corrosion or deterioration or even if

  15   there was no corrosion or deterioration.  If you 
 
  16   cut the supporting beams, then the platform falls 
 
  17   due to that.  I mean that's sort of one part of the 
 
  18   testimony the Judge was referring to. 
 
  19             However, based on the fact there was this

  20   accident, things were looked at, you know, under a 
 
  21   microscope so to speak, afterward.  You know, 
 
  22   people examined all of the structures there, found . 



 
                                                                 11 
 
   1   the corrosion. 
 
   2             Is the Judge not concluding that based on 
 
   3   what we now know and what we now observe after the 
 
   4   accident, to send people into that area to do the

   5   work involved--was exposing them to a hazard? 
 
   6             MR. MOORE:  I think that's the Judge's 
 
   7   ruling.  The problem with it is and this highlights 
 
   8   why it's inappropriate to cite Sedgman as the 
 
   9   contractor for Jim Walters, is that Sedgman learned

  10   about the corrosion to the degree it was and after 
 
  11   the fact, same time MSHA did, after the collapse. 
 
  12   What Sedgman was there for was to demolish that 
 
  13   structure and 77.200 really doesn't fit that and 
 
  14   the evidence is that if it had been demolished

  15   properly by PIW, it would have been safe. 
 
  16             So the problem is how do you mesh that 
 
  17   with the Judge's ruling.  And the problem comes 
 
  18   down to how do you cite Sedgman for a condition 
 
  19   that developed over 20 years, solely on three

  20   grounds, according to the Judge. 
 
  21             They have a contractual provision they're 
 
  22   going to comply with the law, which frankly every . 



 
                                                                 12 
 
   1   contract has.  They had a supervisor on site, even 
 
   2   though the Judge says he was not aware of the 
 
   3   condition of the platform and he was aware they 
 
   4   were going to work in the area.  That doesn't

   5   really bring Sedgman into the mix as I see it. 
 
   6             It's Sedgman at that point--is solely 
 
   7   there to demolish it-- 
 
   8             COMMISSIONER JORDAN:  But are you saying-- 
 
   9             MR. MOORE:  --and once they demolish it,

  10   the problem is fixed obviously and it was safe to 
 
  11   demolish. 
 
  12             COMMISSIONER JORDAN:  Right.  Okay.  But 
 
  13   well, was it--I mean are you saying that Sedgman 
 
  14   can go into an area, take responsibility under

  15   contract for performing work in a certain area, 
 
  16   direct or understand that employees are going to go 
 
  17   to work under Sedgman's advice and direction to 
 
  18   work in an area, and Sedgman can be free to just 
 
  19   rely or assume that there's not hazardous

  20   conditions there that those employees might be 
 
  21   exposed to-- 
 
  22             MR. MOORE:  Well, I think that-- . 



 
                                                                 13 
 
   1             COMMISSIONER JORDAN:  --they can assume 
 
   2   Jim Walters--that the owner has taken the necessary 
 
   3   steps to maintain it? 
 
   4             MR. MOORE:  I think rather than an

   5   assumption, it's the fact is that condition was in 
 
   6   Jim Walter's purview, so to speak for 20 years.  It 
 
   7   was not an obvious condition, and the Judge has 
 
   8   said that--found that.  And given the frequency of 
 
   9   MSHA inspectors not detecting that condition, I

  10   think that's a reasonable conclusion. 
 
  11             Sedgman went in to demolish it and I think 
 
  12   it's--it could have been demolished safely.  I 
 
  13   don't think there's a violation with respect to 
 
  14   Sedgman.

  15             COMMISSIONER YOUNG:  Well, getting away 
 
  16   from what the condition of the structure was that 
 
  17   they were demolishing and the condition that they 
 
  18   found it in, what's wrong with saying to the prime 
 
  19   contractor, who has the responsibility under

  20   contract for demolishing the structure and 
 
  21   complying with the Act as you pointed out, what's 
 
  22   wrong with suggesting that in those circumstances, . 



 
                                                                 14 
 
   1   the operator representative who is on site anyway, 
 
   2   go up, check it out, and go over with the 
 
   3   subcontractor what the sub's plans are for the 
 
   4   demolition to make sure that it's carried out in a

   5   safe way? 
 
   6             MR. MOORE:  Well, in this particular case, 
 
   7   Mr. Dill did examine it.  The conditions were not 
 
   8   obvious, while there was--he noted some rust, he 
 
   9   knew they were going to demolish it.  He didn't see

  10   that that was a potential issue.  He talked to the 
 
  11   contractor that morning about how to do it.  They 
 
  12   talked about removing the concrete landing.  He 
 
  13   assumed that they were going to remove the concrete 
 
  14   landing and then the structural steel.

  15             But unfortunately, what the two PIW 
 
  16   employees did or one, apparently, essentially cut 
 
  17   two or three--two of the three main supports and 
 
  18   essentially cut the limb off behind him.  That's 
 
  19   truly unfortunate.  It's a tragedy.  But it's

  20   not--I don't think Sedgman failed to fulfill its 
 
  21   responsibility. 
 
  22             The problem is they're being held . 



 
                                                                 15 
 
   1   responsible for a condition that they're not there 
 
   2   for and that they really have no authority to 
 
   3   change.  What they have the authority to do is tear 
 
   4   down that, which they did and it could have been

   5   done safely. 
 
   6             CHAIRMAN DUFFY:  Counsel, would you agree 
 
   7   that the standard 77.200 does apply up to the point 
 
   8   where they decide to demolish? 
 
   9             MR. MOORE:  I would agree with that, yes.

  10             CHAIRMAN DUFFY:  So JWR and PIW were cited 
 
  11   for that? 
 
  12             MR. MOORE:  Yes. 
 
  13             CHAIRMAN DUFFY:  For not maintaining those 
 
  14   structures in good repair?

  15             MR. MOORE:  Yes and I-- 
 
  16             CHAIRMAN DUFFY:  So its demolition had 
 
  17   never been undertaken.  An inspector were to take a 
 
  18   better look than other inspectors had in the past, 
 
  19   then JWR and PIW would have been cited for a

  20   violation of 77.200? 
 
  21             MR. MOORE:  Not necessarily.  PIW might 
 
  22   not have been cited because when they came in and . 



 
                                                                 16 
 
   1   they did the wall to wall structural inspection of 
 
   2   that plant afterwards, the only entity that was 
 
   3   cited was JWR.  They didn't cite PIW or Sedgman. 
 
   4             CHAIRMAN DUFFY:  But PIW had a separate

   5   contract with JWR to repair and replace corroded 
 
   6   and non-integral parts of that-- 
 
   7             MR. MOORE:  Whether they were identified 
 
   8   and I can't argue for PIW here one way or the 
 
   9   other, but I'm just saying that what MSHA did is

  10   they cited JWR with respect to the rest of the 
 
  11   plant and the only one they cited multiple 
 
  12   operators. 
 
  13             CHAIRMAN DUFFY:  I read a bit more into 
 
  14   that footnote I think than my colleagues does.

  15   What the Director is saying, at least for me, is 
 
  16   that even if this had been new steel, the 
 
  17   combination of the chain and the cutting of the 
 
  18   principle supports would have resulted in the same 
 
  19   accident.

  20             MR. MOORE:  That's correct because what it 
 
  21   did was to place a load on that remaining 
 
  22   connection that it's not designed-- . 



 
                                                                 17 
 
   1             CHAIRMAN DUFFY:  So even if it had been 
 
   2   maintained in good repair, it would have sustained 
 
   3   the stress. 
 
   4             MR. MOORE:  Yes.

   5             COMMISSIONER JORDAN:  That's how I read 
 
   6   the footnote, yeah. 
 
   7             COMMISSIONER SUBOLESKI:  We really have 
 
   8   two questions to decide here.  One is was there a 
 
   9   violation of 77.200.  The other is was Sedgman the

  10   responsible party. 
 
  11             And assuming that the footnote--getting 
 
  12   over to the footnote and assuming that the steel 
 
  13   were in perfectly good condition and it's the 
 
  14   process that's the problem here, can you--do you

  15   feel we can read 77.200 to mean that at the instant 
 
  16   that the process went wrong, when that last support 
 
  17   was cut, that at that very instant then the plant 
 
  18   or the landing was no longer maintained in a safe 
 
  19   condition?

  20             MR. MOORE:  That's why it's difficult to 
 
  21   apply this standard to demolition.  Because let's 
 
  22   assume that they had taken the landings off and . 



 
                                                                 18 
 
   1   then started cutting the steel and then some of the 
 
   2   steel fell as they were doing structure.  At that 
 
   3   point, is it not in good repair? 
 
   4             That's why it's difficult to apply it to

   5   this and I think it's inappropriate to apply 77.200 
 
   6   to this situation because it just doesn't fit. 
 
   7   77.200 gets to an end result, good repair.  What 
 
   8   MSHA is saying is well, it actually regulates the 
 
   9   process and it doesn't.  It doesn't regulate the

  10   process and I think once the process of demolition 
 
  11   starts, the standard ceases to apply. 
 
  12             COMMISSIONER SUBOLESKI:  Well, you can 
 
  13   either interpret it to say the end result is good 
 
  14   repair or you can interpret it to say the end

  15   result is no accidents. 
 
  16             MR. MOORE:  That's correct. 
 
  17             COMMISSIONER YOUNG:  Isn't maintenance a 
 
  18   process though?  I mean is the sector not really 
 
  19   saying that the process is not the demolition but

  20   it's the maintenance here? 
 
  21             MR. MOORE:  That is what-- 
 
  22             COMMISSIONER:  It has to carry through . 



 
                                                                 19 
 
   1   while it's still a--structure in the mine. 
 
   2             MR. MOORE:  That's what they're saying but 
 
   3   the problem is they're not regulating how the 
 
   4   maintenance is done.  And what they want to do is

   5   regulate how the demolition is done. 
 
   6             And they have rule-making authority.  They 
 
   7   can do that.  But that's not what this standard 
 
   8   does.  This standard unfortunately is a square hole 
 
   9   in which they're trying to fit a round peg.

  10             It just doesn't work and it doesn't make 
 
  11   sense, as they themselves said in Lankasure(?).  It 
 
  12   doesn't apply all the time.  They said it was 
 
  13   ludicrous to apply it to every part of the process. 
 
  14             COMMISSIONER YOUNG:  Well, that was an

  15   abandoned structure in Lankasure. 
 
  16             MR. MOORE:  That's correct. 
 
  17             COMMISSIONER YOUNG:  An abandoned mine. 
 
  18   Basically, a mine facility that was-- 
 
  19             MR. MOORE:  Yes, yes.  But it was a--

  20             COMMISSIONER YOUNG:  There was no 
 
  21   longer--it was not within an active working mine 
 
  22   environment, which is what we had here. . 



 
                                                                 20 
 
   1             MR. MOORE:  But 77.200 was at least 
 
   2   addressed by the ALJ.  And the Secretary conceded 
 
   3   at that point.  The standard can't apply all the 
 
   4   time.

   5             CHAIRMAN DUFFY:  The Secretary attempted 
 
   6   to introduce some OSHA construction standards, I 
 
   7   understand. 
 
   8             MR. MOORE:  Yes. 
 
   9             CHAIRMAN DUFFY:  And the Judge rejected

  10   those? 
 
  11             MR. MOORE:  Yes, he did because he said 
 
  12   that they didn't apply in a MSHA context. 
 
  13             CHAIRMAN DUFFY:  So the only thing that 
 
  14   the agency has to kind of hang its hat on is this

  15   particular standard? 
 
  16             MR. MOORE:  Yes.  I think I've used up 
 
  17   my-- 
 
  18             CHAIRMAN DUFFY:  Yes. 
 
  19             MR. MOORE:  Gone into my rebuttal time

  20   substantially.  Thank you. 
 
  21             CHAIRMAN DUFFY:  Mr. Powasnik? 
 
  22             ORAL ARGUMENT ON BEHALF OF THE SECRETARY . 



 
                                                                 21 
 
   1                         OF LABOR, (MSHA) 
 
   2             MR. POWASNIK:  Just waiting for the clock. 
 
   3   Good morning, Commissioners. 
 
   4             Three issues that I'll discuss is the

   5   applicability of 77.200 to the work that was being 
 
   6   done here, the citation to Sedgman for the 
 
   7   violation and the fact that the--and the Judge's 
 
   8   ruling of the violation--that the violation 
 
   9   occurred.

  10             I think in light of what I heard, I'll 
 
  11   start backwards and talk about the existence of the 
 
  12   violation.  The Judge found that the violation 
 
  13   occurred because it was extensive rust, 
 
  14   deterioration, and corrosion on the supporting

  15   steel and more likely than not, that that structure 
 
  16   deteriorated to a condition that was hazardous. 
 
  17             There's a hazard here--there's a 
 
  18   possibility of collapse.  That's the hazard that 
 
  19   we're talking about here.  And we're talking about

  20   approximately 80 percent rust and corrosion on 
 
  21   supporting members.  So I think the evidence 
 
  22   supports the Judge's finding that more likely than . 



 
                                                                 22 
 
   1   not, there was a hazard, the hazard that this 
 
   2   structure would collapse because of the amount of 
 
   3   rust and corrosion that was bound on the structural 
 
   4   members.

   5             COMMISSIONER YOUNG:  What-- 
 
   6             COMMISSIONER SUBOLESKI:  Go ahead.  Go 
 
   7   ahead. 
 
   8             COMMISSIONER YOUNG:  I was just going to 
 
   9   ask what's Sedgman's role in the rust and the

  10   deteriorated condition of the structure? 
 
  11             MR. POWASNIK:  The violation--under the no 
 
  12   fault liability scheme that we're talking about, 
 
  13   Sedgman is being held liable for an act committed 
 
  14   by its contractor.  So the Judge applied the

  15   analysis that the Commission and the Courts have 
 
  16   applied to an owner operator or production operator 
 
  17   being responsible for an independent contractor to 
 
  18   this situation, where you have an independent 
 
  19   contractor hiring a subcontractor.

  20             COMMISSIONER JORDAN:  So you're saying 
 
  21   Sedgman's liability is based on the actions of its 
 
  22   contractor, PIW is it? . 



 
                                                                 23 
 
   1             MR. POWASNIK:  Right.  So--I mean the 
 
   2   Judge made this finding.  He applied the rationale 
 
   3   that you usually apply in the situation I just said 
 
   4   and I mean I think there's only one commission

   5   case, Bulk Transportation that discusses this 
 
   6   situation, where you have an independent contractor 
 
   7   being held liable for the acts committed by its 
 
   8   subcontractor. 
 
   9             COMMISSIONER JORDAN:  So it's a strict

  10   liability that is being imposed on Sedgman-- 
 
  11             MR. POWASNIK:  Right. 
 
  12             COMMISSIONER JORDAN:  --and if that's the 
 
  13   case, was Sedgman cited though for an unwarrantable 
 
  14   failure?

  15             MR. POWASNIK:  Right. 
 
  16             COMMISSIONER JORDAN:  Well, how-- 
 
  17             MR. POWASNIK:  And didn't appeal that.  We 
 
  18   could have--I think what happened here is we went 
 
  19   both ways.  You could have held Sedgman liable for

  20   the violation independently or-- 
 
  21             COMMISSIONER JORDAN:  What is the 
 
  22   Secretary's position to the commission today, . 



 
                                                                 24 
 
   1   arguing-- 
 
   2             MR. POWASNIK:  Right now-- 
 
   3             COMMISSIONER JORDAN:  Is Sedgman being 
 
   4   held as an independent--as failing to carry out a

   5   duty that it independently had under 77.200 or is 
 
   6   it a vicarious liability-- 
 
   7             MR. POWASNIK:  It's a vicarious 
 
   8   liability--the derivative liability here. 
 
   9             COMMISSIONER JORDAN:  And that derives

  10   from not Jim Walters, but PWI's-- 
 
  11             MR. POWASNIK:  Exactly. 
 
  12             CHAIRMAN DUFFY:  So you're saying that PIW 
 
  13   allowed this deal to deteriorate and so Sedgman as 
 
  14   the contractor is liable for PIW's allowing the

  15   steel to deteriorate? 
 
  16             MR. POWASNIK:  PIW--I think we could say 
 
  17   both because both Jim Walters was also cited for 
 
  18   this. 
 
  19             CHAIRMAN DUFFY:  I mean but it's Jim

  20   Walter's plant. 
 
  21             MR. POWASNIK:  Right. 
 
  22             CHAIRMAN DUFFY:  I don't have any problem . 



 
                                                                 25 
 
   1   with that.  They allowed the steel to degenerate. 
 
   2   PIW is the contractor-- 
 
   3             MR. POWASNIK:  PIW was hired to work at 
 
   4   this specific area and to do this specific job.

   5   And at that point in time, it became responsible 
 
   6   for maintaining this part of the structure in good 
 
   7   enough repair so that while they were working on 
 
   8   it, it wouldn't be hazardous to them. 
 
   9             CHAIRMAN DUFFY:  No, in good repair.

  10             MR. POWASNIK:  In good repair so that it 
 
  11   wouldn't fall down. 
 
  12             CHAIRMAN DUFFY:  Not just good enough.  I 
 
  13   have a problem with people cutting steel and 
 
  14   hauling out concrete maintaining that platform in

  15   good repair.  It doesn't-- 
 
  16             MR. POWASNIK:  Well, particularly, it's 
 
  17   not that it was the cutting of the seal; it's the 
 
  18   fact that it was corroded to a point where it was 
 
  19   possible that it would collapse.

  20             CHAIRMAN DUFFY:  But that's a whole 
 
  21   different issue; isn't it?  That's the issue that 
 
  22   JWR and PIW are responsible for. . 



 
                                                                 26 
 
   1             MR. POWASNIK:  All three were responsible 
 
   2   for, right. 
 
   3             COMMISSIONER YOUNG:  I can understand 
 
   4   where PIW might be responsible for what it actively

   5   did but how do you get the liability for the 
 
   6   condition that the platform was in attaching to PIW 
 
   7   and through that relationship to Sedgman? 
 
   8             MR. POWASNIK:  To Sedgman, I mean who was 
 
   9   in the best position to protect these people that

  10   were working on the structure?  It was Sedgman. 
 
  11   Sedgman hired-- 
 
  12             COMMISSIONER JORDAN:  Yeah but could you 
 
  13   answer my colleagues first question?  How do you 
 
  14   get PIW for the deterioration that occurred over

  15   the long term, the corrosion that--maintained? 
 
  16             MR. POWASNIK:  Their duty arises when they 
 
  17   begin to work here.  They undertook the duty to 
 
  18   work under the regulations which require 
 
  19   maintenance--maintaining this in good repair.

  20             COMMISSIONER YOUNG:  Are you saying that 
 
  21   significant or--I shouldn't use that 
 
  22   term--substantial amount of rust developed after . 



 
                                                                 27 
 
   1   they assumed the responsibility for the job, that 
 
   2   it started rusting then-- 
 
   3             MR. POWASNIK:  No.  It started rusting a 
 
   4   long--

   5             COMMISSIONER YOUNG:  --or that it 
 
   6   progressed past a critical point then? 
 
   7             MR. POWASNIK:  --a long time ago, but you 
 
   8   just can't say okay, well, it happened a long time 
 
   9   ago, so we're going to put our people on there and

  10   so what?  We're not responsible for what happened 
 
  11   25 years ago, so we'll just let them work on a 
 
  12   deteriorated structure. 
 
  13             COMMISSIONER YOUNG:  That's not what I'm 
 
  14   asking.  You started talking about the condition of

  15   this thing being in and PIW somehow being 
 
  16   responsible for it.  I don't get it. 
 
  17             MR. POWASNIK:  Not-- 
 
  18             COMMISSIONER YOUNG:  It might be more 
 
  19   productive for you to talk about the things they

  20   actively did or got involved in. 
 
  21             MR. POWASNIK:  They're responsible for the 
 
  22   safety of their employees when they put them on the . 



 
                                                                 28 
 
   1   structure, when they started working here. 
 
   2             COMMISSIONER YOUNG:  But how does that fit 
 
   3   within 77.200? 
 
   4             MR. POWASNIK:  Well, maintain it in good

   5   repair.  So you take a look at the structure and 
 
   6   the condition that it's in and you know, support it 
 
   7   somehow.  Put some temporary supports on it while 
 
   8   these people are going to take it down, so you're 
 
   9   not putting somebody in jeopardy here or work in a

  10   different manner. 
 
  11             Work from a man basket.  Work from 
 
  12   standing on the interior on the structure so that 
 
  13   you don't expose your employees to the hazard. 
 
  14   You're protecting them from accident and injury,

  15   which is what the standard is designed to do. 
 
  16             COMMISSIONER SUBOLESKI:  Your argument now 
 
  17   is getting awfully close to the process argument 
 
  18   again, that even though you're saying it was 
 
  19   deteriorated--I mean I hear you saying it wasn't

  20   done in the right way.  Do you think--I'll ask you 
 
  21   the same question I asked before and that's do you 
 
  22   think 77.200 can be applied to process?  If it's . 



 
                                                                 29 
 
   1   simply done in the wrong way, does that mean it 
 
   2   wasn't maintained safely and does-- 
 
   3             MR. POWASNIK:  It wasn't maintained safely 
 
   4   because of the condition that it was in and the way

   5   they undertook the demolition.  They could have 
 
   6   demolished this in a safe manner.  So it could be 
 
   7   applied to how they were doing this. 
 
   8             CHAIRMAN DUFFY:  Counsel, I don't disagree 
 
   9   with that.  I'm looking at Section 115(d) of the

  10   Act, which is going on 30 years ago.  "The 
 
  11   Secretary shall promulgate appropriate standards 
 
  12   for safety and health training for coal and other 
 
  13   mine construction workers."  And we don't have 
 
  14   those standards.  We haven't had them for 30 years.

  15             But it strikes me that had those standards 
 
  16   been in place, then PIW would have known how to go 
 
  17   about that demolition in a proper way because the 
 
  18   people would have been trained.  The proximate 
 
  19   cause of this accident is the fact that they cut

  20   into a structure the wrong way and it failed.  And 
 
  21   it really doesn't matter whether it was 
 
  22   deteriorated or not because the Judge found that . 



 
                                                                 30 
 
   1   had it been new steel, the same thing would have 
 
   2   happened.  And that's my problem here is that 
 
   3   you're trying to stretch a maintenance standard and 
 
   4   I'm very--keying in on the words maintained in good

   5   repair. 
 
   6             It can't be separated out into repaired 
 
   7   and maintained.  That's--if--was correct, a 
 
   8   participial phase and it has to be interpreted in 
 
   9   and of itself.  You can't start parceling

  10   individual words in it. 
 
  11             And that strikes me as the responsibility 
 
  12   that was imposed on JWR and in my view, PIW, as was 
 
  13   stated on the--contract.  They're responsible for 
 
  14   repairing and replacing degenerated steel in that

  15   plant. 
 
  16             So that I have no problem with.  But when 
 
  17   you get to the demolition stage, I just don't see 
 
  18   how those words apply in this particular case. 
 
  19             What's lacking here, is a standard that

  20   would do exactly what you'd want it to do, which is 
 
  21   Sedgman, the contractor, whoever, sits down and 
 
  22   develops a plan of demolition that assures that . 



 
                                                                 31 
 
   1   it's undertaken in a safe manner.  I just can't see 
 
   2   how maintaining something in good repair offers the 
 
   3   basis for requiring some sort of a demolition plan 
 
   4   under these circumstances.

   5             MR. POWASNIK:  If you're looking at the 
 
   6   proximate cause of the accident, I mean that's 
 
   7   exactly what you shouldn't do when you're looking 
 
   8   at whether or not this standard was violated.  It 
 
   9   wasn't the cause of the accident that--they weren't

  10   cited because of why--what happened--why the 
 
  11   accident occurred. 
 
  12             They weren't cited for the cause.  They 
 
  13   were cited because--Sedgman was cited because it 
 
  14   had the responsibility to protect the people that

  15   it was hiring to go onto the structure that was in 
 
  16   a state of disrepair. 
 
  17             CHAIRMAN DUFFY:  I don't see where you get 
 
  18   there. 
 
  19             MR. POWASNIK:  Well--

  20             CHAIRMAN DUFFY:  Because they have to be 
 
  21   responsible for maintaining the structure in good 
 
  22   repair in order to be liable under the standard.  . 



 
                                                                 32 
 
   1   And that's not their responsibility. 
 
   2             MR. POWASNIK:  In order to--I mean PIW is 
 
   3   and Sedgman's liability is--they're being held 
 
   4   liable for the violation committed by PIW.

   5             COMMISSIONER JORDAN:  Let me see if I 
 
   6   understand this.  In other words, let's assume 
 
   7   training had occurred as my colleague had planned 
 
   8   out would have been appropriate here and let's 
 
   9   assume they actually were demolishing--they removed

  10   the platform correctly and they didn't cut into the 
 
  11   supporting steel, but at some point people had 
 
  12   occasion--and there was no accident even.  But then 
 
  13   at some point people had occasion to see the 
 
  14   condition that people had been allowed to go to

  15   work on.  And I think this contract is not really a 
 
  16   demolition agreement that Sedgman undertook.  It's 
 
  17   broader, sort of construction rehabilitation. 
 
  18             MR. POWASNIK:  Right. 
 
  19             COMMISSIONER JORDAN:  And it wasn't just

  20   demolition.  This demolition occurred as part of 
 
  21   even a broader job they were trying to do I 
 
  22   gather-- . 



 
                                                                 33 
 
   1             MR. POWASNIK:  Right.  I think they were 
 
   2   doing an addition-- 
 
   3             COMMISSIONER JORDAN:  --sort of attach 
 
   4   some skeleton of something--an addition.  So, is it

   5   sector's position that employees were exposed to a 
 
   6   hazardous situation just generally in being allowed 
 
   7   to work in that area, regardless of-- 
 
   8             MR. POWASNIK:  Regardless of the 
 
   9   occurrence of the accident, exactly.

  10             COMMISSIONER JORDAN:  Based on the 
 
  11   condition that was found afterwards.  So then the 
 
  12   question comes and  you're saying PWI or PIW-- 
 
  13             MR. POWASNIK:  PIW. 
 
  14             COMMISSIONER JORDAN:  PIW had an

  15   obligation to assess the situation before it would 
 
  16   allow employees to go into an area under the reg. 
 
  17             MR. POWASNIK:  Yes. 
 
  18             COMMISSIONER JORDAN:  But the reg is 
 
  19   essentially saying to any operator maintain

  20   facilities in a safe condition so as to avoid 
 
  21   accidents.  That in other words, you have--any 
 
  22   operator has an obligation to see that employees . 



 
                                                                 34 
 
   1   under its control do not enter an area that they 
 
   2   would be exposed to a hazard due to any sort of 
 
   3   deterioration or corrosion. 
 
   4             MR. POWASNIK:  Yes.

   5             COMMISSIONER JORDAN:  Regardless of how 
 
   6   long they've been on the scene. 
 
   7             MR. POWASNIK:  Exactly. 
 
   8             CHAIRMAN DUFFY:  So that's like a general 
 
   9   duty clause?

  10             COMMISSIONER JORDAN:  Well, I think the 
 
  11   reg--well, the reg says maintain facilities and 
 
  12   structures. 
 
  13             CHAIRMAN DUFFY:  In good repair to prevent 
 
  14   accident or injury.

  15             COMMISSIONER JORDAN:  In good repair so as 
 
  16   to prevent accident or injury.  So if you are on a 
 
  17   site and they have employees that are going to go 
 
  18   into an area, does that reg impose some obligation 
 
  19   to see that they're not jeopardized or put in

  20   danger from deterioration that may have occurred or 
 
  21   corrosion? 
 
  22             COMMISSIONER JORDAN:  You know, I'm just . 



 
                                                                 35 
 
   1   trying to understand their theory. 
 
   2             CHAIRMAN DUFFY:  Well, looking at your 
 
   3   scenario, I agree.  If after the fact, this had 
 
   4   been taken down in a safe way and then it was

   5   discovered that the members of that--the steel 
 
   6   members of that platform were in a state of extreme 
 
   7   degradation, then I would agree totally that there 
 
   8   was a citable offense there.  But the citation it 
 
   9   seems to me would be aimed at Jim Walters.

  10             COMMISSIONER JORDAN:  PIW--Jim Walters. 
 
  11   So somebody that's-- 
 
  12             CHAIRMAN DUFFY:  And perhaps PIW. 
 
  13             MR. POWASNIK:  But Sedgman also, I mean 
 
  14   because they're the--

  15             COMMISSIONER JORDAN:  Well, he said--I'm 
 
  16   sorry. 
 
  17             MR. POWASNIK:  --they--this obligation 
 
  18   now, and so they're the ones responsible for this 
 
  19   area.  And then they hire another contractor to

  20   come in and actually do the work.  So and they have 
 
  21   their employee there, so they expose their employee 
 
  22   and they expose other employees here. . 



 
                                                                 36 
 
   1             CHAIRMAN DUFFY:  Granting matter of fact 
 
   2   that PIW is in a situation here that I think is 
 
   3   just based on the facts of this particular case, 
 
   4   they are a subcontractor to Sedgman for the purpose

   5   of demolition but they are a subcontractor or they 
 
   6   are a contractor to Jim Walter Resources for the 
 
   7   purposes of repairing and replacing that steel in 
 
   8   the plant.  So I think that that liability of PIW 
 
   9   arises from its contract to maintain the plant and

  10   that's 200, but not for this demolition job, for 
 
  11   which MSHA doesn't have a standard unfortunately. 
 
  12             MR. POWASNIK:  Well, I mean under our--and 
 
  13   the Secretary's interpretation, you don't need a 
 
  14   separate standard for demolition.  You have this

  15   standard.  It's a plain--there's a plain language 
 
  16   here that says it applies--it's an unrestricted 
 
  17   application.  There's no exception for demolition, 
 
  18   so you couldn't possibly be confused by thinking it 
 
  19   doesn't apply.

  20             CHAIRMAN DUFFY:  I can't believe that I 
 
  21   would be maintaining my automobile if I took a 
 
  22   sledgehammer to the windshield.  It just--it . 



 
                                                                 37 
 
   1   doesn't fit for me.  I'm sorry. 
 
   2             COMMISSIONER JORDAN:  Yeah.  But if you 
 
   3   knew--but if you were a mechanic and going to go in 
 
   4   even to sort of pull it apart and demolish it,

   5   wouldn't there be some obligation of some part on 
 
   6   somebody that you just brought the car in there if 
 
   7   you knew it was going to fall on top of him when 
 
   8   he, you know, went under to look at it, even to 
 
   9   tear it apart.  I mean that kind of--

  10             MR. POWASNIK:  The interpretation is not 
 
  11   that, you know, to maintain this so that you keep 
 
  12   it in perfect condition.  I mean it's maintain it 
 
  13   while employees are demolishing it.  Make sure it's 
 
  14   safe enough throughout the entire demolition

  15   process. 
 
  16             COMMISSIONER YOUNG:  One argument you made 
 
  17   in your brief that I found persuasive was that as a 
 
  18   general standard, you could use any means of 
 
  19   compliance, any reasonable means of complying with

  20   the Act as the operator, correct? 
 
  21             MR. POWASNIK:  Right. 
 
  22             COMMISSIONER YOUNG:  But in this instance, . 



 
                                                                 38 
 
   1   where you don't have any standards, 1) how does an 
 
   2   operator know what compliance is enough? 
 
   3             You say that isn't--that this citation is 
 
   4   not being imposed because of the accident, which if

   5   that's the case, it would seem to me that there 
 
   6   would at least be some guidance telling people when 
 
   7   you're demolishing something, come up with a plan. 
 
   8   Have a plan for how it's going to be approached so 
 
   9   you make sure you do it in a safe way.

  10             Is there any kind of guidance or anything? 
 
  11             MR. POWASNIK:  It's not necessarily the 
 
  12   plan.  It's-- 
 
  13             COMMISSIONER YOUNG:  Well, that's what was 
 
  14   proffered at the hearing, wasn't it?

  15             MR. POWASNIK:  Well, there was testimony 
 
  16   about-- 
 
  17             COMMISSIONER YOUNG:  You're going to have 
 
  18   testimony about-- 
 
  19             MR. POWASNIK:  --about why Sedgman was

  20   being held responsible for this, and one was it was 
 
  21   a plan or it was not a--there was no examination. 
 
  22             There was Gill looking at the structure . 



 
                                                                 39 
 
   1   from the second floor.  And part of the underneath 
 
   2   was--he couldn't see part of that because of the 
 
   3   corrugated steel and there was a pipe in his way, 
 
   4   but he saw that there was some rust there.

   5             So our position was to maintain this in 
 
   6   good repair, inspect the thing.  Take a closer look 
 
   7   at it.  Don't stand from the second floor and say 
 
   8   well, I can't see anything from there, so what? 
 
   9   I'll just let the people go up there.  I mean he

  10   could've gone up to the fifth floor and when that 
 
  11   corrugated sheeting did come down at a certain 
 
  12   point and so more of the underside was revealed. 
 
  13             So there was that method of complying in 
 
  14   addition to keeping the employees off that

  15   particular area because it was--it did present a 
 
  16   possible danger or that was working from a man 
 
  17   basket and then there was one other-- 
 
  18             COMMISSIONER YOUNG:  That's not really 
 
  19   vicarious liability for Sedgman though, is it?

  20   Isn't that more direct liability for renovation? 
 
  21             MR. POWASNIK:  No.  It's--well, it's 
 
  22   vicarious in the sense that there were things they . 



 
                                                                 40 
 
   1   could have done to protect these people and they 
 
   2   didn't do that. 
 
   3             COMMISSIONER YOUNG:  But things they could 
 
   4   have done, Sedgman, not just PIW?  Because PIW was

   5   up there, did have an opportunity to inspect. 
 
   6             MR. POWASNIK:  Right.  And they were the 
 
   7   people who apparently--who were supposed to know 
 
   8   what was--how to do this.  I mean they were hired 
 
   9   to do the construction and then they were told to

  10   take this part down because it somehow was 
 
  11   interfering with the construction of the new 
 
  12   addition. 
 
  13             COMMISSIONER YOUNG:  Is it reasonable to 
 
  14   hold--you've got a middle man contractor here in

  15   this case, which is unusual as you noted, for them 
 
  16   to be cited and for it come up here. 
 
  17             Is it reasonable to hold a contractor 
 
  18   liable for what might be characterized as an 
 
  19   unforeseeable act of the subcontractor?  I mean

  20   they hired a professional company to carry out this 
 
  21   demolition and it was done in a way that 
 
  22   was--essentially causing--in a fatal accident. . 



 
                                                                 41 
 
   1             MR. POWASNIK:  The cause might have been 
 
   2   unforeseeable but the possibility that the thing 
 
   3   would collapse, the possibility of the danger was 
 
   4   foreseeable.  So they're not being held liable

   5   because it fell down. 
 
   6             In fact, our expert testified that the 
 
   7   only reason why it fell was in addition to the 
 
   8   cutting, there was so much corrosion there.  And 
 
   9   had there not been that much corrosion, there was

  10   enough remaining support that it would have held 
 
  11   up. 
 
  12             COMMISSIONER JORDAN:  And so-- 
 
  13             MR. POWASNIK:  So it was both the cutting 
 
  14   and the corrosion that caused the landing to fall.

  15             CHAIRMAN DUFFY:  Not withstanding the 
 
  16   Judge's determination that it would have fallen 
 
  17   even if it was new steel. 
 
  18             MR. POWASNIK:  That was their expert's 
 
  19   testimony.

  20             CHAIRMAN DUFFY:  So the Judge accepted it. 
 
  21             MR. POWASNIK:  As to the cause but we're 
 
  22   not arguing--I mean what we're saying is the cause . 



 
                                                                 42 
 
   1   is irrelevant  here. 
 
   2             COMMISSIONER YOUNG:  Because it could have 
 
   3   collapsed anyway. 
 
   4             MR. POWASNIK:  Because it was a possible

   5   danger. 
 
   6             CHAIRMAN DUFFY:  But if it had collapsed 
 
   7   on its on just through normal use by Jim Walters 
 
   8   employees, then Sedgman wouldn't have had any part 
 
   9   of it, correct?  I mean Sedgman was only there

  10   because Jim Walter asked him to put in a new 
 
  11   structure. 
 
  12             MR. POWASNIK:  Right.  And once they got 
 
  13   there, that's when their duty arose. 
 
  14             CHAIRMAN DUFFY:  To maintain the platform.

  15             MR. POWASNIK:  To keep it--right.  Because 
 
  16   they were responsible for that entire section 
 
  17   there. 
 
  18             COMMISSIONER YOUNG:  But when you start 
 
  19   talking about maintain, I mean understand wanting

  20   to keep things in a safe condition.  But if it's in 
 
  21   an unsafe condition, you don't maintain something 
 
  22   in an unsafe condition, you repair it.  You don't . 



 
                                                                 43 
 
   1   maintain it in good repair if it's not in good 
 
   2   repair.  You have to fix it; isn't that correct? 
 
   3             MR. POWASNIK:  Yes.  But if you're going 
 
   4   to demolish it--

   5             COMMISSIONER YOUNG:  Well, how does that 
 
   6   fit with this standard? 
 
   7             MR. POWASNIK:  Well, what I'm saying--what 
 
   8   I said before, the Secretary is not saying fix it 
 
   9   so that it's brand new.  Just fix it to the point

  10   where it safe.  All these employees were working on 
 
  11   it. 
 
  12             COMMISSIONER YOUNG:  But you are saying 
 
  13   fix it. 
 
  14             MR. POWASNIK:  Or don't put your employees

  15   on it. 
 
  16             COMMISSIONER YOUNG:  If it's not in good 
 
  17   repair, do you have an obligation to maintain it in 
 
  18   good repair?  How do you get there?  I mean that's 
 
  19   just--that doesn't make a lot of sense, even

  20   construing this in accordance with the act. 
 
  21             MR. POWASNIK:  How do you maintain it in 
 
  22   good repair while you're demolishing it?  Is that . 



 
                                                                 44 
 
   1   your question? 
 
   2             CHAIRMAN DUFFY:  Yes. 
 
   3             COMMISSIONER YOUNG:  If it's not in good 
 
   4   repair when you get there--I mean you're saying

   5   that their responsibility arose when they got on 
 
   6   the site to do the demolition work. 
 
   7             MR. POWASNIK:  Right. 
 
   8             COMMISSIONER YOUNG:  And if that's when it 
 
   9   arises, if it's not in good repair then, how do you

  10   maintain it in good repair?  You've got to put it 
 
  11   in good repair.  Doesn't that--you can chop out 
 
  12   about five words, your duty is repair at that 
 
  13   point; isn't it? 
 
  14             MR. POWASNIK:  Your duty is to make it

  15   safe.  Your duty is to make it safe to prevent 
 
  16   accidents-- 
 
  17             COMMISSIONER YOUNG:  But maintain doesn't 
 
  18   mean make it something.  It means keep it 
 
  19   something; doesn't it?  I mean maintain has a

  20   meaning. 
 
  21             MR. POWASNIK:  But you don't want to keep 
 
  22   it in the condition that it's in because-- . 



 
                                                                 45 
 
   1             COMMISSIONER YOUNG:  I agree. 
 
   2             MR. POWASNIK:  --you have to protect 
 
   3   employees from accident and injury.  So you have to 
 
   4   do something.

   5             COMMISSIONER YOUNG:  But this is a 
 
   6   standard that--you're stuck with the word of the 
 
   7   standard, that the standard gives you. 
 
   8             MR. POWASNIK:  Well, we think in this 
 
   9   situation--I mean you had three people here.  You

  10   had PIW, you had Sedgman and you had JWR.  And 
 
  11   everybody had a responsibility to these employees 
 
  12   to keep them from working on the structure in the 
 
  13   condition that it was in.  I mean, that's our 
 
  14   position in a nutshell.

  15             CHAIRMAN DUFFY:  I agree with you totally. 
 
  16   But that's in my view, a standard that doesn't 
 
  17   exist. 
 
  18             COMMISSIONER YOUNG:  Shouldn't they have 
 
  19   been cited for something like not dangering the

  20   area off or something else?  I just--it's hard for 
 
  21   me to understand how you get to maintain something 
 
  22   that's not maintained to begin with.  You can't . 



 
                                                                 46 
 
   1   maintain something in good repair if it's not in 
 
   2   good repair.  You've got to put it in good repair. 
 
   3             CHAIRMAN DUFFY:  Your time has expired, 
 
   4   counsel.

   5             MR. POWASNIK:  Thank you. 
 
   6             CHAIRMAN DUFFY:  Mr. Moore? 
 
   7             MR. MOORE:  I believe I've used all of my 
 
   8   rebuttal time on the principle portion of the 
 
   9   argument.  And unless the Commission has additional

  10   questions, I have nothing further on these two 
 
  11   issues. 
 
  12             COMMISSIONER SUBOLESKI:  I guess I have 
 
  13   one question and that's that this does say--there's 
 
  14   one more word in this, in 77.200 and that says all,

  15   all structures. 
 
  16             MR. MOORE:  Yes. 
 
  17             COMMISSIONER SUBOLESKI:  And the question 
 
  18   is how do you get around the word all? 
 
  19             MR. MOORE:  Well, I think you get around

  20   it the same way we've been talking about here this 
 
  21   morning is it applies to this structure, yes.  But 
 
  22   it doesn't apply doing demolition because for . 



 
                                                                 47 
 
   1   example, let's assume for the sake of this 
 
   2   argument, that that structure was not in good 
 
   3   repair when Sedgman walks in the door. 
 
   4             The way to correct that bad repair because

   5   they're not in a position to maintain it because 
 
   6   they're not there.  One of the ways to correct it 
 
   7   would be to tear it down, which is what they did or 
 
   8   they were in the process of doing.  That's why this 
 
   9   standard just doesn't fit here.

  10             I would make one additional comment. 
 
  11   There was a comment made that Sedgman had the 
 
  12   expertise on demolition and all of that.  Let us 
 
  13   all recognize that the Judge found that it was 
 
  14   PIW's responsibilities to design the methods of

  15   demolition, not Sedgman. 
 
  16             Sedgman was brought in here to upgrade the 
 
  17   preparation plant and that's their expertise.  The 
 
  18   means and methods for demolition was within PIW's 
 
  19   contractual purview.  I realize we have other

  20   issues with respect to the Mine Act but that's what 
 
  21   the Judge found. 
 
  22             COMMISSIONER YOUNG:  But in this case, . 



 
                                                                 48 
 
   1   getting away from the condition that the thing was 
 
   2   in and whether that contributed to it, whether it 
 
   3   was in bad repair, if we were to assume otherwise, 
 
   4   that the condition was in good enough repair but

   5   for the intervention of PIW, as an agent of Sedgman 
 
   6   in this context, you know, there would have been no 
 
   7   hazard created. 
 
   8             What's wrong with at that point saying now 
 
   9   maintain in good repair means while you're going

  10   through this process, don't create a hazard in the 
 
  11   mine and inject a little bit of ordinary foresight 
 
  12   into the process where you have an opportunity to 
 
  13   do so? 
 
  14             I mean if you had the responsibility for

  15   the demolition work under your contract, what's 
 
  16   wrong with saying why don't you explain to me how 
 
  17   you're going to do this and make sure that you've 
 
  18   got a speed break there with somebody thinking 
 
  19   through the process above the subcontractor

  20   allotment? 
 
  21             MR. MOORE:  Well, there was some thought 
 
  22   given in the process between Mr. Gill and Mr. . 



 
                                                                 49 
 
   1   Ryan(?), PIW's lead man.  They discussed it, how to 
 
   2   remove the concrete.  Mr. Gill assumed that they 
 
   3   wouldn't cut the structure until they-- 
 
   4             COMMISSIONER YOUNG:  That word assume just

   5   bothers me. 
 
   6             MR. MOORE:  Well, I recognize that but the 
 
   7   problem is that it's a common sense thing.  I 
 
   8   frankly--and I will--let me say this.  We're not 
 
   9   sure that the PIW employee who cut that middle

  10   hanger did it deliberately, as part of the 
 
  11   demolition process.  Because there was a tow 
 
  12   board(?) on that landing that he may have been 
 
  13   cutting and he may have accidentally cut the middle 
 
  14   hanger.  That's not clear.

  15             But either way while yes, Mr. Gill made 
 
  16   the assumption, but it's a common sense assumption. 
 
  17   You take the load off the steel and then you take 
 
  18   down the steel.  That just makes sense.  You 
 
  19   certainly don't in the process cut all the support

  20   for the platform. 
 
  21             Because there are only three places this 
 
  22   is supported.  They cut the north end and whether . 



 
                                                                 50 
 
   1   it was deliberate or not, they cut the middle 
 
   2   hanger, put a load on that connection that it 
 
   3   wasn't designed to take and it didn't take it. 
 
   4             But the problem is that I--I believe that

   5   the evidence is that they did give some foresight 
 
   6   into it.  I guess they didn't plan enough to 
 
   7   foresee the unforeseeable in Mr. Gill's mind. 
 
   8             Are there any-- 
 
   9             COMMISSIONER JORDAN:  I do have one

  10   question.  Would you please address the issue 
 
  11   of--counsel of the Secretary put forward that their 
 
  12   theory of liability--I have some question about 
 
  13   this--but their theory of liability actually rests 
 
  14   on a vicarious strict liability against Sedgman

  15   based on PIW's liability? 
 
  16             MR. MOORE:  Then you come into the issue 
 
  17   of--the whole issue of whether you cite Sedgman for 
 
  18   its contractor's violation since if you look at all 
 
  19   the factors under 20 Mile, I believe that you don't

  20   cite Sedgman for PIW's violation there, because PIW 
 
  21   was the one responsible for demolition and 
 
  22   designing demolition. . 



 
                                                                 51 
 
   1             COMMISSIONER JORDAN:  Now was PIW cited 
 
   2   for those same standards? 
 
   3             MR. MOORE:  Yes.  All three. 
 
   4             COMMISSIONER JORDAN:  And they did not

   5   contest it, they conceded liability there? 
 
   6             MR. MOORE:  I can't tell you that one way 
 
   7   or the other. 
 
   8             COMMISSIONER JORDAN:  -- 
 
   9             MR. MOORE:  I don't know because there

  10   were some--cases against PIW employees.  There 
 
  11   are--the website, MSHA website, which is the only 
 
  12   guide I have is unclear. 
 
  13             COMMISSIONER JORDAN:  Okay. 
 
  14             MR. MOORE:  Because--

  15             COMMISSIONER JORDAN:  I don't mean to put 
 
  16   you on the spot-- 
 
  17             MR. MOORE:  But I don't-- 
 
  18             COMMISSIONER JORDAN:  --to talk about 
 
  19   things that are not on the record.  I mean--

  20             MR. MOORE:  I don't know what PIW did. 
 
  21   All I know is that Jim Walters contested theirs and 
 
  22   settled them and their settlements are a part of . 



 
                                                                 52 
 
   1   the stipulation. 
 
   2             COMMISSIONER YOUNG:  Unlike 20 Mile 
 
   3   though, I mean here you have a Sedgman employee in 
 
   4   the environment walking around basically under the

   5   hazard routinely if not everyday.  So you have more 
 
   6   direct involvement there. 
 
   7             You had as you just acknowledged, some 
 
   8   direct involvement in--some direct involvement in 
 
   9   the planning process such as it was for demolishing

  10   the structure.  So it doesn't look to me like you 
 
  11   had the level of detachment that we found at 20 
 
  12   Mile with a contractor relationship here. 
 
  13             MR. MOORE:  Well, you have a level of 
 
  14   detachment in terms of if you're looking at the

  15   standard as maintaining that in good repair.  The 
 
  16   process of deterioration was not something that 
 
  17   Sedgman was involved in.  Yes, they had an employee 
 
  18   on site and yes, he was walking around.  I don't 
 
  19   know whether frankly he walked under this landing

  20   ever other than the day he looked up at it when 
 
  21   they were going to demolish it. 
 
  22             But the facts are that if they had done . 



 
                                                                 53 
 
   1   nothing to that landing, it was safe to remain 
 
   2   there.  And not only does the expert evidence show 
 
   3   that, but also that's frankly prior to the accident 
 
   4   MSHA's determination since they didn't cite it.

   5             COMMISSIONER YOUNG:  But the plan was to 
 
   6   do something to the landing? 
 
   7             MR. MOORE:  Yes. 
 
   8             COMMISSIONER YOUNG:  Okay. 
 
   9             MR. MOORE:  And they did something to the

  10   landing.  And if this accident hadn't occurred and 
 
  11   they had taken down that landing and even if they 
 
  12   had taken it down and they found some of the steel 
 
  13   deteriorated, all they would've been--they would 
 
  14   have been given a credit for correcting the

  15   condition rather than cited for it, I think.  I 
 
  16   don't think they would have been cited if the 
 
  17   accident didn't occur. 
 
  18             If there's nothing further now?  Thank 
 
  19   you.

  20             CHAIRMAN DUFFY:  Thank you, Mr. Moore. 
 
  21             We'll now move on to the Secretary's 
 
  22   issues on review.  Mr. Powasnik? . 



 
                                                                 54 
 
   1             MR. POWASNIK:  You're only giving me five 
 
   2   minutes? 
 
   3             The penalty portion is--there were--the 
 
   4   Judge said--MSHA proposed a penalty of $35,000 and

   5   the Judge reduced it to $1,000.  And then he 
 
   6   vacated the penalty.  And it's the Secretary's 
 
   7   position that the Judge erred first by 
 
   8   significantly reducing the penalty without any 
 
   9   explanation as to why he was doing so, other than

  10   the statement that he was placing less than 
 
  11   considerable weight--placing considerable weight on 
 
  12   the less than high negligence finding. 
 
  13             COMMISSIONER SUBOLESKI:  Back to those 
 
  14   items, he discussed the negligence issue as you

  15   said.  In addition to that, he also said that he 
 
  16   considered the gravity to be serious in his 
 
  17   decision.  And then he makes a reference to the 
 
  18   fact that he has considered the remaining factors 
 
  19   in 110(I).

  20             And those factors if you look at them, 
 
  21   they're--you know, they're history of violations, 
 
  22   size, financial condition, and abatement.  And if . 



 
                                                                 55 
 
   1   you consider those, those are really all factual 
 
   2   issues. 
 
   3             They're either a certain--they're a 
 
   4   certain size and nothing can change that.  And are

   5   you arguing that you want him--you know, in other 
 
   6   words, he's discussed the two main issues.  He has 
 
   7   discussed negligence.  He's discussed gravity. 
 
   8   Those are the two subjective issues.  The others 
 
   9   are more or less objective.

  10             And my question is do you think that he 
 
  11   just needs to list these other four, rather than 
 
  12   say he considered the four.  Or are you going 
 
  13   beyond that or are you arguing something beyond 
 
  14   that point?

  15             MR. POWASNIK:  Well, I think the 
 
  16   commissions in cases say that there should be some 
 
  17   type of explanation when he makes a significant 
 
  18   reduction.  And it doesn't appear that he gave an 
 
  19   explanation for such a large reduction and that's

  20   what we were asking for, some type of explanation. 
 
  21   It can't be-- 
 
  22             COMMISSIONER SUBOLESKI:  So since it's . 



 
                                                                 56 
 
   1   negligence, you want them to further discuss the 
 
   2   negligence; is that it?  I mean why? 
 
   3             To some extent if you look at this, the 
 
   4   Judge made two rulings.  One is he issued the--he

   5   affirmed the citation and that basically, you know, 
 
   6   when you look at a citation, you're either in or 
 
   7   you're out.  That's the decision you make.  But 
 
   8   then the fine kind of reflects how far in or out 
 
   9   you are--or not out, how far in you are.

  10             And so it's not that you want him to list 
 
  11   these other four factors, you want him--you would 
 
  12   have expected a further discussion of the 
 
  13   negligence in this case? 
 
  14             MR. POWASNIK:  Right.

  15             COMMISSIONER SUBOLESKI:  Okay. 
 
  16             MR. POWASNIK:  The other error that the 
 
  17   Judge made was vacating the penalty.  The Judge 
 
  18   found a 16 month delay between the action at which 
 
  19   occurred on August 29, 2001 and the proposed

  20   penalty on December 31, 2001.  He based his 
 
  21   finding--he said that the delay was similar to the 
 
  22   delay that occurred in 20 Mile and vacated the . 



 
                                                                 57 
 
   1   penalty because the Secretary failed to establish 
 
   2   adequate cause for the delay. 
 
   3             In other words, the Judge erred in 
 
   4   vacating the penalty first because the Secretary's

   5   interpretation of Section 105(a) is that a 
 
   6   perceived delay should never result in avoiding 
 
   7   agency action, especially when there's a public 
 
   8   right at stake, which there is here, which is 
 
   9   protecting the safety and health of miners.  The

  10   legislative history supports that interpretation. 
 
  11             And vacating the penalty as the Judge did 
 
  12   undercuts Congress' intent that the penalty would 
 
  13   act as the mechanism for encouraging compliance. 
 
  14             CHAIRMAN DUFFY:  Counsel, are you saying

  15   that the Commission never has the authority to 
 
  16   vacate a penalty? 
 
  17             MR. POWASNIK:  Right. 
 
  18             CHAIRMAN DUFFY:  So, how do square that 
 
  19   with language in 105(d) that says that we're

  20   authorized to affirm, modify, or vacate a citation, 
 
  21   order, or penalty? 
 
  22             MR. POWASNIK:  I think the Secretary . 



 
                                                                 58 
 
   1   argues that you can't look at that language in a 
 
   2   vacuum.  You have to look at the language in the 
 
   3   entire section and your Commission Case Law that 
 
   4   says that the Commission must assess a penalty for

   5   an affirmed violation. 
 
   6             We also believe that the-- 
 
   7             CHAIRMAN DUFFY:  I thought in your brief 
 
   8   you were saying that 105 doesn't establish the 
 
   9   authority of the Commission that 110 does.

  10             MR. POWASNIK: Right. 
 
  11             CHAIRMAN DUFFY:  There's a lot in 105(d) 
 
  12   that if we didn't have it, we wouldn't be in 
 
  13   business. 
 
  14             MR. POWASNIK:  Well, if you go into 105(d)

  15   and you can--you know, under that language, if you 
 
  16   can vacate--under that language, if you read that 
 
  17   language that way, if you can vacate the penalty, 
 
  18   then you could also vacate the citation and affirm 
 
  19   the penalty because of that specific language

  20   there. 
 
  21             CHAIRMAN DUFFY:  We would never vacate a 
 
  22   citation and leave the penalty I don't think. . 



 
                                                                 59 
 
   1             MR. POWASNIK:  Right.  So that's why 
 
   2   looking at that-- 
 
   3             CHAIRMAN DUFFY:  But we can vacate a 
 
   4   penalty and still leave the citation.  I mean

   5   that's what we said in 20 Mile.  And we're talking 
 
   6   about Commission precedent.  Now, we'll just see 
 
   7   what happens in a month or so, but that sort of 
 
   8   thing can stand now. 
 
   9             MR. POWASNIK:  Well, when the Court

  10   issued--when the D.C. Circuit issued its decision, 
 
  11   it made a reference to that argument to the 
 
  12   Secretary's position and then went onto decide and 
 
  13   then went onto say that it doesn't have to decide 
 
  14   that issue because what it was doing was holding

  15   that the delay in that case absent any prejudice 
 
  16   was not--was reasonable. 
 
  17             COMMISSIONER YOUNG:  Isn't an evaluation 
 
  18   of this case on its specific facts an 
 
  19   acknowledgment that you're not dealing with the

  20   universal black letter thou shalt not vacate any 
 
  21   penalty interpretation by the Court? 
 
  22             I mean the Court could have come out and . 



 
                                                                 60 
 
   1   said hey, the Act says you must assess and that's 
 
   2   how we view the law, and they didn't do that. 
 
   3             MR. POWASNIK:  Right.  All they did was 
 
   4   mention that and say they don't have to really

   5   decide that because what they are deciding is there 
 
   6   was no--it was issued within a reasonable time.  So 
 
   7   there was no need to discuss the broader issue. 
 
   8   And you could do that here.  There would be no 
 
   9   reason to discuss the broader issue if you find

  10   that the delay in this case, which was 11 months, 
 
  11   was similar to the delay in 20 Mile, which the 
 
  12   Court found was issued within a reasonable amount 
 
  13   time. 
 
  14             CHAIRMAN DUFFY:  But there's a distinction

  15   here to, isn't there, that the citations were 
 
  16   issued simultaneously with the accident report? 
 
  17             MR. POWASNIK:  Right. 
 
  18             CHAIRMAN DUFFY:  Along that line--I just 
 
  19   have a question and I don't know if you can answer

  20   it based on the record.  But what constituted 
 
  21   termination, abatement and termination of those 
 
  22   citations and orders when they were issued after . 



 
                                                                 61 
 
   1   the report was issued.  Do you know? 
 
   2             MR. POWASNIK:  I don't know in this case 
 
   3   what constituted the abatement. 
 
   4             CHAIRMAN DUFFY:  And termination.  What

   5   I'm saying is that in 20 Mile, you had an order 
 
   6   issued, abated, and terminated within a space of 
 
   7   four days.  And I think that may have lead to some 
 
   8   confusion on the part of the Court.  Because they 
 
   9   started running the clock after the accident

  10   investigation because they thought the operator had 
 
  11   to respond to the investigation in order for the 
 
  12   Secretary to make up her mind as to what good faith 
 
  13   abatement was. 
 
  14             But there you have the citation was

  15   terminated so abatement and good faith as issues 
 
  16   were already resolved within four days.  Here, you 
 
  17   have the accident occurring and then whatever it 
 
  18   is, eight-nine months later, the investigation 
 
  19   report coming out simultaneously with the citations

  20   and orders. 
 
  21             And what I'm curious about is to when were 
 
  22   those citations and orders essentially terminated . 



 
                                                                 62 
 
   1   for purposes of determining the operator's good 
 
   2   faith? 
 
   3             MR. POWASNIK:  I don't know. 
 
   4             CHAIRMAN DUFFY:  Okay, okay.

   5             MR. POWASNIK:  It would just be, you 
 
   6   know--our position is that time begins to run when 
 
   7   the investigation report is issued, which was I 
 
   8   think five months after the accident occurred. 
 
   9             COMMISSIONER YOUNG:  There's another

  10   distinction between this and the previous 20 Mile 
 
  11   case where the penalty was vacated.  In this case, 
 
  12   the Judge made the finding that it was unreasonable 
 
  13   in part because you had offered up an excuse on 
 
  14   there being a new computer system and then didn't

  15   offer any evidence on that. 
 
  16             Why is it unreasonable for a Judge to 
 
  17   consider your failing to produce the evidence that 
 
  18   you said you were going to produce?  Doesn't--give 
 
  19   that burden to the Secretary and doesn't that make

  20   this case a little different from the other 20 Mile 
 
  21   case? 
 
  22             MR. POWASNIK:  Well, I can't explain what . 



 
                                                                 63 
 
   1   happened between telling the Judge we were going to 
 
   2   produce some evidence on it and then not having 
 
   3   done so.  But I don't think the case is that much 
 
   4   different in terms--I mean from 20 Mile in terms of

   5   the time period and it's only I think maybe 21 days 
 
   6   shorter than what happened in 20 Mile.  And in that 
 
   7   case, I mean the Court didn't really look at the 
 
   8   reasons, it just said, look, this delay is 
 
   9   issued--this amount of time is not an unreasonable

  10   amount of time to do that. 
 
  11             And here, if the Judge--maybe the Judge 
 
  12   should have pressed the attorney as to you know, 
 
  13   for more reasons but without those reasons,  I 
 
  14   mean--suffice it to say that it's a process.  It's

  15   a process that--and it's not a determination that's 
 
  16   made by one person, so it does take some time.  It 
 
  17   takes some time to--for this type of--for the 
 
  18   penalty when it's a special assessment to be issued 
 
  19   by the Secretary because it goes through different

  20   offices. 
 
  21             COMMISSIONER YOUNG:  There was another 
 
  22   penalty assessed in this case in three months.  Mr. . 



 
                                                                 64 
 
   1   Moore would have us establish that as a benchmark 
 
   2   for reasonableness.  Why should we not look at it 
 
   3   that way? 
 
   4             MR. POWASNIK:  Well, first of all because

   5   at least a 10 month period of time is reasonable 
 
   6   according to the D.C. Circuit, absent any 
 
   7   prejudice.  So that's one reason.  The second 
 
   8   reason is each penalty is different and the case is 
 
   9   different so I think that penalty--I'm not sure if

  10   it was a special assessment or not, but that had to 
 
  11   do with the safety belts, right? 
 
  12             COMMISSIONER SUBOLESKI:  Right. 
 
  13             MR. POWASNIK:  This one was a separate 
 
  14   penalty so it's moving in a separate direction and

  15   it's going through the process.  Now, the Secretary 
 
  16   has taken some steps to make it work quicker and I 
 
  17   think there's a matrix on the website that shows 
 
  18   people how the penalty is proposed and it's meant 
 
  19   to come up with a specific dollar amount a lot

  20   quicker. 
 
  21             So as far as working towards getting these 
 
  22   things to happen sooner, you know, the Secretary is . 



 
                                                                 65 
 
   1   working on that.  But each case should be looked at 
 
   2   separately and individually.  There shouldn't be 
 
   3   like one specific time that's set for all of the 
 
   4   penalties.

   5             CHAIRMAN DUFFY:  Counsel, I agree with you 
 
   6   and I don't think you need to answer for what 
 
   7   happened at trial but I would join my colleague in 
 
   8   saying that if the Secretary offers an excuse for 
 
   9   what the operator contends is an unreasonable

  10   delay, it's incumbent upon the Secretary to offer 
 
  11   the evidence as to why that's a reasonable delay, 
 
  12   not for the Judge to try to beat it out of him. 
 
  13             MR. POWASNIK:  Yes.  Any other questions? 
 
  14   Thank you.

  15             CHAIRMAN DUFFY:  Thank you. 
 
  16             Mr. Moore? 
 
  17             MR. MOORE:  Thank you. The Secretary in 
 
  18   entering into that stipulation, I can't speak for 
 
  19   them but the phrasing of would offer evidence, it

  20   was my understanding of that stipulation which when 
 
  21   we entered into it meant that was their excuse for 
 
  22   the delay.  So at least--I don't want to suggest . 



 
                                                                 66 
 
   1   they didn't offer anything to explain the delay. 
 
   2   Their offer was computer problem and then 
 
   3   obviously, they didn't explain it further for the 
 
   4   Judge.

   5             The description both in the Secretary's 
 
   6   brief of the process in here today, the problem 
 
   7   with that description is the presumption it moves 
 
   8   the way the process normally moves and there is not 
 
   9   a shred of evidence in this record that it moved

  10   the way it normally moves.  So that's all extra 
 
  11   record representation as to that suggestion it 
 
  12   moved the way it was supposed to move. 
 
  13             There was a complication on the delay 
 
  14   issue that occurred to me while I was listening to

  15   the questioning.  The problem with the 20 Mile D.C. 
 
  16   Circuit Decision is if I read it, in having argued 
 
  17   it and lived with it for a while, if I read it, the 
 
  18   way I read it is they peg it to the actions taken 
 
  19   by the operator to terminate the citations.  The

  20   confounding problem here is we have the report that 
 
  21   was issued in February and the citations were 
 
  22   issued the same day and were abated--terminated the . 



 
                                                                 67 
 
   1   same day. 
 
   2             What is described in the citations as the 
 
   3   abatement occurred long before.  Now because we 
 
   4   didn't have the D.C. Circuit's 20 Mile Decision at

   5   the time we argued Sedgman, we didn't really 
 
   6   address that.  But if you look for example at the 
 
   7   abatement they talk about, there was for example in 
 
   8   the 77.200, there was abatement because tech 
 
   9   support came in and evaluated the plant and did a

  10   full evaluation. 
 
  11             Well, that occurred during the process of 
 
  12   the accident investigation back in September 2000, 
 
  13   one.  So, it's--the abatement actually occurred 
 
  14   before the citations--long before the citations

  15   were issued, as it did for the fall protection one, 
 
  16   because they required training and it's described 
 
  17   in--but those citations were terminated the same 
 
  18   moment they were issued. 
 
  19             I actually assume looking at them that

  20   they came out with the fully written and terminated 
 
  21   at that point.  So that's a confounding issue 
 
  22   because if what you're waiting for is the . 



 
                                                                 68 
 
   1   abatement, it actually goes back under the 20 Mile 
 
   2   Decision, back to probably September 2001 and 
 
   3   creates some additional delay problems for the 
 
   4   Secretary because it's not the--ignore the report

   5   for the moment.  If it's when the citations--the 
 
   6   action is taken to terminate the citations are 
 
   7   done, then you go back almost to the time of the 
 
   8   accident. 
 
   9             I believe that the Commission had

  10   addressed the whole issue of whether or not it has 
 
  11   the authority to vacate penalties.  I think the 
 
  12   language in 105(d) makes that plain.  I don't think 
 
  13   it creates a problem where you might vacate the 
 
  14   citation but not the penalty.  That would be

  15   illogical. 
 
  16             But being able to vacate the penalty, 
 
  17   frankly, as the Commission knows, I have argued 
 
  18   both in Sedgman and previous cases that if there's 
 
  19   an unreasonable delay, the whole petition for

  20   assessment of civil penalty should be dismissed 
 
  21   against the operator. 
 
  22             The Commission saw fit to take an . 



 
                                                                 69 
 
   1   intermediary remedy, which I think is an 
 
   2   appropriate remedy.  And we would submit that that 
 
   3   is an appropriate remedy for delay here.  There are 
 
   4   two issues.

   5             Obviously, we have the--in terms of the 
 
   6   Secretary's argument about how you measure the 
 
   7   delay and whether it's reasonable, we have the 
 
   8   three month period to assess another citation, 
 
   9   which was also tied directly to the accident.

  10   It's--they checked the a feared box. 
 
  11             We have the Secretary's program policy 
 
  12   letter that this Commission has noted in 20 Mile 
 
  13   where they say six months after the accident.  We 
 
  14   have exceeded that.  We also have we can look at

  15   the OSHA penalty and they talk about six months 
 
  16   being the outer limit and anything under that may 
 
  17   be subject to a reasonable promptness argument. 
 
  18             I think that we're in a situation where 
 
  19   we're not arguing--we shouldn't be arguing about

  20   whether or not the delay was unreasonable.  It's 
 
  21   just the Secretary failed to explain their delay. 
 
  22             On the penalty itself, I'm frankly a bit . 



 
                                                                 70 
 
   1   puzzled.  Because we have the ALJ who started out 
 
   2   with a citation against Sedgman for 77.200 that was 
 
   3   marked as high negligence, unwarrantable failure. 
 
   4   He threw out the unwarrantable failure.  He said

   5   the negligence wasn't as high.  He didn't 
 
   6   specifically characterize it but the next step down 
 
   7   on MSHA's form is moderate. 
 
   8             We only need to draw a comparison.  For 
 
   9   the operator that owned this plant was present

  10   throughout the 20 year period, who was also cited 
 
  11   under 77.200 and that was also denoted as having 
 
  12   moderate negligence, the Secretary of Labor 
 
  13   believed the appropriate penalty was $655. 
 
  14             Sedgman's penalty as assessed by the Judge

  15   before he vacated the penalty was $1,000.  Given 
 
  16   the fact that we know from looking at this that 
 
  17   however we interpreted 77.200 at this point, that 
 
  18   the failure to maintain over the course of time was 
 
  19   not Sedgman's responsibility.  It seems to me that

  20   there cannot be a quibble with the $1,000 penalty 
 
  21   assessed by the Judge by the Secretary. 
 
  22             COMMISSIONER YOUNG:  Well just getting to . 



 
                                                                 71 
 
   1   the point, I mean there was a reduction of what? 
 
   2   Almost or slightly more than 70 percent of the 
 
   3   penalty; wasn't there? 
 
   4             MR. MOORE:  That's correct.

   5             COMMISSIONER YOUNG:  I mean that's not a 
 
   6   step down.  If all you're doing is premising that 
 
   7   on a shift in the negligence, if that's the 
 
   8   assumption in the change; isn't that a big step 
 
   9   down?  Aren't you going from high--you're not going

  10   to moderate.  Are you going to low negligence? 
 
  11             Is it a comparative fall thing where he 
 
  12   says look, PIW got hammered on its penalty.  I 
 
  13   think they were primarily responsible and 
 
  14   proportionately this seems more appropriate to me

  15   because of the factors and then go through them. 
 
  16             What's wrong with requiring more of an 
 
  17   explanation? 
 
  18             MR. MOORE:  In this particular case, we 
 
  19   don't have and we rarely have other than the boiler

  20   plate that Secretary submits with a special 
 
  21   assessment, we don't have why they arrived at the 
 
  22   $35,000 penalty initially.  But I don't think we . 



 
                                                                 72 
 
   1   should be looking at well, he reduced it to $1,000 
 
   2   because that's not--this is not according to any 
 
   3   formula or anything like that. 
 
   4             Well, let's take a look at.  Let's

   5   compare. We have two entities to compare here, Jim 
 
   6   Walters and Sedgman.  Well, both probably moderate 
 
   7   negligence.  We know the Secretary found moderate 
 
   8   negligence for Jim Walters.  And we know the Judge 
 
   9   found less than high negligence, which places it at

  10   moderate.  Jim Walters is large; Sedgman is small. 
 
  11             I don' t know what Jim Walters' violation 
 
  12   history is.  We know Sedgman has no violation 
 
  13   history.  We know that for both the abatement 
 
  14   appears to be the same, brought in tech support and

  15   looked at the plant and corrected it and Jim 
 
  16   Walters corrected the conditions that were 
 
  17   identified in the plant with technical support. 
 
  18             COMMISSIONER YOUNG:  But see, you're going 
 
  19   through a deductive process.  Just as a

  20   housekeeping matter as a commission, should we 
 
  21   maybe require a little more explanation when there 
 
  22   is such a significant reduction? . 



 
                                                                 73 
 
   1             At some point, you know, you reached the 
 
   2   point where the Secretary is dealing mainly with 
 
   3   an--issue on penalty reduction where the Judge is 
 
   4   not making a finding that the case is substantially

   5   unjustified.  But you know, you're creeping into 
 
   6   that territory at a 70 percent reduction of the 
 
   7   penalty. 
 
   8             MR. MOORE:  Whether I'm creeping into the 
 
   9   territory or not, I think it involves fundamental

  10   fairness that operators in similar situations be 
 
  11   assessed similar penalties.  There is for the 
 
  12   special assessment process, there may now be a 
 
  13   matrix.  I'm less hopeful that that process is as 
 
  14   speedy as the Secretary represents.

  15             But we don't know what goes on in that 
 
  16   process and what criteria they use.  And we know a 
 
  17   maximum penalty and a minimum penalty, but the 
 
  18   commission has the authority to assess penalties. 
 
  19   And while the Secretary performed the service

  20   function as I see it on proposing penalties, it's 
 
  21   ultimately up to the Commission. 
 
  22             And whether or not the ALJ reduces what . 



 
                                                                 74 
 
   1   was proposed by the Secretary or not or whether 
 
   2   they reduce it significantly, the ALJ has to make 
 
   3   that determination and I think he made an 
 
   4   appropriate determination here.

   5             I would quibble that I thought it 
 
   6   shouldn't have been higher than Jim Walters' but he 
 
   7   made an appropriate determination looking at the 
 
   8   criteria and looking at all of the evidence.  And I 
 
   9   don't think that we happen to be lucky here in that

  10   we have a penalty to compare it to.  And I think he 
 
  11   didn't enunciate that.  And whether or not he did 
 
  12   or not, that was part of his thinking, I don't 
 
  13   know.  But he-- 
 
  14             CHAIRMAN DUFFY:  Counsel, do you know if

  15   the Jim Walters settlement, was that approved by 
 
  16   another ALJ or was that done prior to even the 
 
  17   contest being filed? 
 
  18             MR. MOORE:  I can't--I believe it was 
 
  19   approved by another ALJ.

  20             CHAIRMAN DUFFY:  Okay.  So-- 
 
  21             MR. MOORE:  And it was done before we went 
 
  22   to trial in sufficient time that we could stipulate . 



 
                                                                 75 
 
   1   to it but I don't recall which ALJ.  But-- 
 
   2             CHAIRMAN DUFFY:  My concern is that I 
 
   3   could accept everything you had to say but I tend 
 
   4   to think that Judge might have been a bit more

   5   forthcoming as to how he arrived at that. 
 
   6             Looking back at the Old Historical and I 
 
   7   think the Energy West cases, those were both--those 
 
   8   both involved violations that were attributed to 
 
   9   idiosyncratic and unforeseen conduct by a minor,

  10   and the commission was very clear saying the 
 
  11   operator should have been cited for the violation 
 
  12   but the penalty could be reduced substantially 
 
  13   because of the negligent factor. 
 
  14             And here, I sort of think it goes a bit

  15   double.  You've got someone more tenuously 
 
  16   connected to the violation, JWR and Sedgman, 
 
  17   vis-a-vis PIW.  And that might be a factor in 
 
  18   reducing it but I would like to have seen the Judge 
 
  19   explain that a little bit more.

  20             MR. MOORE:  Perhaps a fuller explanation, 
 
  21   though I don't think that Jim Walters' connection 
 
  22   to this violation, the 77.200 violation is tenuous; . 



 
                                                                 76 
 
   1   it's their plant.  But I--even if he had gone into 
 
   2   a fuller explanation, I think it's perfectly 
 
   3   justified what he did. 
 
   4             And all you need to do is look at what the

   5   Secretary of Labor did with respect to one of the 
 
   6   other operators on site, who, as we've been 
 
   7   discussing here this morning, owns and operates 
 
   8   that plant and would have been present throughout 
 
   9   any deterioration.

  10             CHAIRMAN DUFFY:  --my explanation was the 
 
  11   decision is subject to 77.200, that for me, remains 
 
  12   to be seen. 
 
  13             MR. MOORE:  Yes. 
 
  14             COMMISSIONER YOUNG:  Getting back to the

  15   vacation and the penalty from--and aside from the 
 
  16   Court of Appeals decision in 20 Mile, I didn't go 
 
  17   along with the majority in the 20 Mile case in 
 
  18   large part because I didn't see a basis for a find 
 
  19   as a matter of law that the period was unreasonable

  20   and I think that's what we would've had to have 
 
  21   done in that case. 
 
  22             This seems to be an equivalent time period . 



 
                                                                 77 
 
   1   and as I recall in the 20 Mile case, there was even 
 
   2   less of an excuse.  I mean basically it was fessed 
 
   3   up as bureaucratic incompetence and neglect than 
 
   4   what was offered in this case.

   5             So, in both cases you have no valid excuse 
 
   6   and you have an equivalent time period, how can you 
 
   7   persuade me to go along with vacating the penalty 
 
   8   in this case? 
 
   9             MR. MOORE:  The way I would do that, aside

  10   from the fact that the Secretary has sort of 
 
  11   established the benchmarks for the reasonable 
 
  12   periods for assessment of penalties and they 
 
  13   exceeded those, I would also say that in the 
 
  14   legislative history when they were discussing the

  15   whole issue of prompt assessment of penalties, that 
 
  16   the length of delay here exceeded anything that the 
 
  17   United States Congress thought was an unreasonable 
 
  18   delay. 
 
  19             I think the only one that they didn't was

  20   for health violations.  That's the only one that 
 
  21   came in that would have exceeded the delay here. 
 
  22             So I think that if you use those as . 



 
                                                                 78 
 
   1   benchmarks, then the delay is unreasonable.  I 
 
   2   don't think you can look outside the Mine Act for 
 
   3   what might be legally a reasonable period because 
 
   4   Mine Act, in this essence is sui generous, the

   5   Congress said it was absolutely necessary to have 
 
   6   prompt assessment of penalties and the Secretary 
 
   7   hasn't met her own guidelines, hasn't met 
 
   8   Congressional guidelines, hasn't offered a 
 
   9   reasonable explanation as to why she didn't--

  10             COMMISSIONER YOUNG:  --select guidelines. 
 
  11   I mean we operate here with strict time limits that 
 
  12   are jurisdictional to a large extent.  The Congress 
 
  13   could have done that and said if you don't bring it 
 
  14   within X days, 150 or whatever, you know unless

  15   there's extreme circumstances.  They could have 
 
  16   been more detailed and drawn a line and said you 
 
  17   don't go beyond this line, but they didn't do that. 
 
  18             MR. MOORE:  They did not do that.  I wish 
 
  19   they had frankly, but obviously--but so the

  20   Secretary is given a little more leeway.  But they 
 
  21   at least from what I observe, they've been given an 
 
  22   inch and they're taking a mile, that they are not . 



 
                                                                 79 
 
   1   fulfilling as shown here, their requirement that 
 
   2   they assess penalties in a reasonably prompt 
 
   3   fashion. 
 
   4             COMMISSIONER YOUNG:  But that gets to the

   5   deterrent factor of the penalty.  How does having 
 
   6   no penalty provide a greater deterrent than having 
 
   7   a late penalty? 
 
   8             MR. MOORE:  I don't think either one has a 
 
   9   deterrent effect, except and let me--because a late

  10   penalty has no deterrent effect anymore than no 
 
  11   penalty does, but the principle deterrent effect 
 
  12   and we can't ever forget, has nothing to do with 
 
  13   the penalty.  Yes, the penalties provide a 
 
  14   deterrent effect.

  15             But the principle deterrent effect is you 
 
  16   have to fix it and you have to fix it now.  You 
 
  17   don't even get a hearing on your 77.200 violation 
 
  18   whether it applies.  You've got to do it now.  If 
 
  19   that's--that is the principle deterrent effect.

  20             We can't ever forget that.  The fact that 
 
  21   we are required to abate long before we ever get to 
 
  22   a hearing is the principle effect that causes . 



 
                                                                 80 
 
   1   people to want to comply. 
 
   2             COMMISSIONER YOUNG:  So if there's no real 
 
   3   deterrent effect there, why would you argue that 
 
   4   you've got to vacate the penalty where there's no

   5   prejudice?  I mean I can understand if there's 
 
   6   prejudice. 
 
   7             MR. MOORE:  We still have to pay the 
 
   8   penalty if the Commission imposes it.  In terms of 
 
   9   that particular violation, it doesn't have a

  10   deterrent effect.  We want you to vacate the 
 
  11   penalty for two reasons.  One is because the 
 
  12   Secretary unreasonably delayed.  The second is it's 
 
  13   your only method of overseeing the assessment 
 
  14   process.

  15             The Commission has determined that it can 
 
  16   vacate penalties, and the only way it can oversee 
 
  17   that process to send the message to MSHA to do 
 
  18   their statutory job is to vacate the penalty. 
 
  19             COMMISSIONER YOUNG:  Can't the Secretary

  20   of Labor do that, oversee it, make changes in the 
 
  21   process, improve it,--change things up? 
 
  22             MR. MOORE:  The Secretary of Labor can do . 



 
                                                                 81 
 
   1   all of those things but this Commission has the 
 
   2   responsibility for assessing penalties so I believe 
 
   3   it resides with this Commission to do what it can. 
 
   4   It can't change the way MSHA assesses penalties

   5   directly but it can do it indirectly by vacating 
 
   6   penalties that are a product of unreasonable delay. 
 
   7             Any further questions? 
 
   8             CHAIRMAN DUFFY:  No.  Thank you very much. 
 
   9             MR. MOORE:  Thank you very much.

  10             MR. POWASNIK:  I don't have anything 
 
  11   further to add unless you guys have any questions. 
 
  12   Okay.  Thank you, Commission. 
 
  13             CHAIRMAN DUFFY:  Thank you both.  I'd like 
 
  14   to congratulate both counsels on the briefs and the

  15   oral arguments today.  They've been very, very 
 
  16   helpful to us.  We will be meeting on this 
 
  17   particular case for decisional purposes--do we have 
 
  18   a date yet? 
 
  19             COMMISSIONER JORDAN:  Yeah.  February--

  20             COMMISSIONER YOUNG:  Fifteenth or 
 
  21   sixteenth. 
 
  22             CHAIRMAN DUFFY:  February 15. . 



 
                                                                 82 
 
   1             COMMISSIONER JORDAN:  Sixteenth. 
 
   2             CHAIRMAN DUFFY:  Sixteenth, okay.  I 
 
   3   should have had that in my notes but I didn't.  So 
 
   4   we will take that up on February 16.  Again, thank

   5   you, counsel.  And we will adjourn. 
 
   6             (Whereupon, at 11:25 a.m., the oral 
 
   7   argument concluded.)`