Opinion ID: 757252
Heading Depth: 3
Heading Rank: 1

Heading: Independent Contractors' Reporting Requirements

Text: 11 We will defer to an agency's interpretation of its regulations so long as it is 'reasonable,' that is, so long as the interpretation sensibly conforms to the purpose and wording of the regulations. Martin v. OSHRC, 499 U.S. 144, 150-51, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991) (internal quotation marks and citations omitted); accord RLC Indus. Co. v. Commissioner, 58 F.3d 413, 415 (9th Cir.1995). We also are bound to interpret statutes and regulations that are intended to protect health and safety in a broad manner so that these goals will be actually achieved. See Secretary of Labor v. Cannelton Indus., 867 F.2d 1432, 1437 (D.C.Cir.1989); Magma Copper Co. v. Secretary of Labor, 645 F.2d 694, 697 (9th Cir.1981). The Department of Labor's actions in this case push each of these principles of interpretation and deference to its outer limits. 12 The legal question before us is the result of Congress's amendment of the definition of operator and the Department of Labor's exceptionally inept job of drafting regulations to implement that amendment. The Federal Coal Mine Health and Safety Act of 1969 (Coal Act), Pub.L. No. 91-173, 83 Stat. 742 (1969), provided that a mine operator was any owner, lessee or other person who operates, controls, or supervises a coal mine. 30 U.S.C. § 802(d) (1976). In the late 1970's, two circuit courts held that independent contractors that operated, controlled or supervised mines qualified as other persons who were mine operators. See Association of Bituminous Contractors, Inc. v. Andrus, 581 F.2d 853, 861 (D.C.Cir.1978) (holding that it makes no difference that [independent contractors] are not owners or lessees[;] the fact of their control or supervision over the designated areas or facilities ... makes them 'operators' ); Bituminous Coal Operators' Ass'n v. Secretary of Interior, 547 F.2d 240, 246 (4th Cir.1977) (same). 13 In 1977, Congress passed the Mine Act in order to amend and replace the Coal Act. In so doing, it amended the Coal Act's definition of operator to codify the Bituminous Contractors and Bituminous Coal holdings, see Cyprus Indus. Minerals Co. v. FMSHRC, 664 F.2d 1116, 1119 (9th Cir.1981); Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 535 (D.C.Cir.1986) (citing S.Rep. No. 181, 95th Cong., 1st Sess. 14 (1977)), and expanded the definition of operator to include independent contractors that do not operate, supervise or control mines. See Joy Techs., Inc. v. Secretary of Labor, 99 F.3d 991, 999 (10th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1691, 137 L.Ed.2d 818 (1997); Otis Elevator Co. v. Secretary of Labor, 921 F.2d 1285, 1290 (D.C.Cir.1990). 14 The Mine Act defines an operator as any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine. 30 U.S.C. § 802(d). The Act's regulations require all mine operators to file legal identity reports, see 30 C.F.R. § 41.20, and for that purpose define operator in exactly the same way as the statute, except that the relevant regulation refers to designated independent contractors. The regulation reads: Operator means any owner, lessee or other person who operates, controls or supervises a coal or other mine or any designated independent contractor performing services or construction at such mine. 30 C.F.R. § 41.1(a) (second emphasis added). The Secretary has never published any regulation describing which independent contractors, if any, qualify as designated independent contractors, nor has she established any procedure for designating independent contractors. 15 Blattner maintains that since the Secretary has never designated it, or any other independent contractor, as an operator, it is not an operator as defined in § 41.1(a) and, therefore, is not subject to § 41.20's requirement that operators file legal identity reports. Although an independent contractor undeniably may operate[ ], control[ ] or supervise[ ] a mine, Blattner argues that the statutory and regulatory definition of operator removes all independent contractors from the general other persons clause under which independent contractors fell prior to the Mine Act, and places them in the specific independent contractors clause added by that statute. Under this construction, the regulation would create two mutually exclusive categories of operators--(1) owners, lessees, and other persons who are not independent contractors (all of whom are known as production-operators), see 30 C.F.R. § 45.2(d); and (2) designated independent contractors. The Secretary, on the other hand, contends that neither the statute's nor the regulation's two principal clauses are mutually exclusive and that nothing in the regulations altered the previously accepted rule that independent contractors who operate, control, or supervise mines qualify as other person[s] who operate mines and thus as production-operators. 16 We acknowledge that Blattner's position finds considerable support in the regulations' legislative history, and we are mindful that courts should not defer to an agency's interpretation of its regulations when an 'alternative reading is compelled by ... other indications of the Secretary's intent at the time of the regulation's promulgation.'  Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 U.S. 504, 512, 129 L.Ed.2d 405 (1994) (quoting Gardebring v. Jenkins, 485 U.S. 415, 430, 108 S.Ct. 1306, 99 L.Ed.2d 515 (1988)); accord Trustees of Cal. State Univ. v. Riley, 74 F.3d 960, 964 (9th Cir.1996). The Secretary concedes that during the Mine Act's rulemaking process the Department of Labor abandoned its proposal to differentiate among independent contractors for liability purposes by designating some as operators who would be responsible for safety violations. See Cathedral Bluffs, 796 F.2d at 535. The Secretary, in fact, stated in the notice of the final rule that became Part 41 that [t]he status of independent contractors as operators and the attendant responsibilities will be covered by regulations to be promulgated by the Secretary which are separate from this rule. 43 Fed.Reg. 29,511 (July 7, 1978). In those separate regulations, which became 30 C.F.R. Part 45, the Department adopted the MSHA identification number system, requiring all independent contractors working at mines to obtain a number from the MSHA and provide it to the mine owner. The Secretary's guidelines to Part 45--which do not necessarily bind the Secretary, but do provide guidance to enforcement officials, see Cathedral Bluffs, 796 F.2d at 538-39--state that [i]ndependent contractors working at mines are not required to file legal identity reports under Part 41. New procedures for the identification of independent contractors are provided in the new 30 CFR Part 45--Independent Contractors. 45 Fed.Reg. 44,498 (July 1, 1980). 17 Despite the force of this legislative history, we believe that it fails to demonstrate that the Secretary's interpretation of 30 C.F.R. § 41.1(a)--that independent contractors who operate, control, or supervise mines fall within the first part of subsection (a) and thus qualify as production-operators--is unreasonable. The Mine Act expanded the definition of operator to include a large group of independent contractors who were not considered operators under the Coal Act. See Joy Techs., 99 F.3d at 999; Otis Elevator, 921 F.2d at 1290. This added category of independent contractors consists of contractors who perform services or construction at mines, rather than the more basic production functions. It therefore seems reasonable to construe the statute's specific independent contractor phrase--any independent contractor performing services or construction at such mine--as referring only to those independent contractors who did not already qualify as operators under the statute's other person[s] provision--and not to all of the independent contractors, including those who control or supervise the operation of a mine and who were already covered by the phrase other person[s]. 18 While in Part 45 the Secretary clearly abandoned the idea of differentiating between independent contractors for liability purposes, nothing in that Part or the Secretary's guidelines states that independent contractors will not still constitute operators for reporting purposes when they either satisfy the statute's first definition of that term, i.e., the definition of a production-operator, or when they satisfy the second and are designated by the Secretary. Thus, the regulation's cryptic reference to designated independent contractors may be reasonably construed to apply to those contractors who do not qualify as production-operators but are designated by the Secretary. In other words, it is reasonable to conclude that the Secretary, when adopting the regulation, tracked the language of the statute, and then provided that some of the contractors who do not qualify under the statute's first clause as production-operators--but who are covered by the statute's second clause, i.e., independent contractors who perform services or construction at a mine--would nevertheless be required to file legal identity reports. In order to identify those independent contractors covered by the second clause whose functions were sufficiently important to warrant the filing of identity reports, and to exclude those whose work would not significantly affect safety, the Secretary provided that she would designate those members of the second group who would be required to file reports. That the Secretary never made any such designations serves only to prevent those independent contractors who are not production-operators but might perform functions justifying the filing of legal identity reports from being classified as operators and incurring the obligation to do so. Finally, in this connection, we note that the Secretary's decision to require all independent contractors to obtain an MSHA number and provide it to the mine owner is in no way inconsistent with her decision to require independent contractors who qualify as production-operators to file identity forms as well. 19 We also deem it significant that the Secretary's construction of the regulations most effectively furthers her ability to achieve the Mine Act's goal of protecting health and safety in mines. See Cannelton Indus., 867 F.2d at 1437. Her interpretation requires any party that exercises day-to-day control over the safety practices and conditions at mines to file legal identity reports with the MSHA. This, in turn, provides the MSHA with the information necessary to monitor the health and safety conditions at those sites--information, such as the name and address of the person in charge of health and safety at the mine, that is not required under the MSHA identity number system. Compare 30 C.F.R. § 41.11 with § 45.4. That the Secretary has decided not to differentiate between independent contractors for the purpose of issuing safety violations does not mean that she may not require certain independent contractors who have significant control over mining operations to file legal identity reports to assist her in responding to emergencies and monitoring the mines to prevent health and safety violations in the first instance. In any event, all Blattner had to do to avoid penalties was to file legal identity reports when the MSHA asked it to do so--a modest burden compared to the importance of the health and safety concerns involved. 20