Michigan Aggregates Association

Commission Expands MSHA’s Jurisdiction, Finds Equipment Shop Meets Definition of a Mine

By: Gary Visscher, Esq.

At its public meeting on January 7, 2016, the four members of the Federal Mine Safety and Health Review Commission present were unanimous in affirming a judge’s decision that an equipment maintenance and fabrication shop in Sidney, Kentucky operated by Maxxim Rebuild Company, LLC, comes within the definition of a “mine” in the Mine Act, and is therefore subject to MSHA’s enforcement jurisdiction.

The Commission’s decision constitutes a significant expansion of MSHA jurisdiction – for the first time the Commission is upholding MSHA’s jurisdiction of an off-site facility that is not exclusively used for supplying or servicing the facility owner’s mines. An independent facility that provides equipment maintenance and repair for a variety of customers, including non-mining customers, may now be subject to MSHA inspection.

Maxxim Rebuild, which is a wholly owned subsidiary of Alpha Natural Resources, operates seven equipment maintenance and fabrication shops. One of the shops, which was previously located in Matewan, West Virginia, was moved in 2012 to Sidney, Kentucky. Both the West Virginia location and the Kentucky location were on former mine properties; in both cases the mining operations had closed and the operation abandoned. MSHA had formerly inspected the West Virginia shop while it was part of the mining operation, but ceased inspecting it when the mine closed. After the shop moved to the Sidney, Kentucky location, MSHA claimed jurisdiction and conducted at least two inspections, resulting in several citations.

The Sidney shop primarily worked on equipment that is used at Alpha Natural Resources’ mines. Approximately 75% of the shop’s work was for nearby mines operated by Alpha Natural Resources. About half of the remaining 25% was work on mining equipment for other mines (Alpha’s and other operators), and the remainder was work that the shop did for non-mine customers.

Not only was MSHA’s claim of jurisdiction after the shop moved to Sidney, Kentucky inconsistent with its previous treatment of the shop when it was located in West Virginia, but Maxxim Rebuild also pointed out that nearly all (5 of 6) of its other equipment maintenance shops are currently subject to OSHA standards and inspections, rather than MSHA.

Maxxim Rebuild contested the citations on the grounds that MSHA did not have jurisdiction over an off-site, independent equipment maintenance and fabrication shop. Maxxim also argued that MSHA’s inconsistent interpretation constituted a denial of equal protection and was an abuse of discretion.

In October 2013, Judge Miller ruled against Maxxim Rebuild, and the four commissioners stated that they would affirm the judge’s decision. Both the judge and the commissioners found that the case was controlled by Commission precedent in Jim Walter Resources, 22 FMSHRC 21 (Jan. 2000). That case involved a central supply shop which was located off mine premises but was owned by the operator of nearby mines and was used exclusively by the mine operator to house supplies for the company’s mines. The Commission ruled that the supply shop was in effect part of the mine operation and was therefore subject to MSHA jurisdiction.

The Maxxim Rebuild case is the first time that the Commission will have found MSHA jurisdiction over an off-site facility that is not owned and operated by a mining company and used exclusively for that company’s operations. The only Commission decision other than Jim Walter Resources involving jurisdiction over an off-site facility was U.S. Steel, 10 FMSHRC 146 (Feb. 1988), which, like Jim Walter Resources, involved a facility that was owned by U.S. Steel and was used exclusively for supplying U.S. Steel’s nearby mines.

In contrast, the owner of the equipment shop in this case, Maxxim Rebuild, is a separate company (albeit a subsidiary of Alpha Resources) and Maxxim Rebuild’s business is not exclusively servicing equipment for Alpha Resources (or any other mining company’s mines). The commissioners nonetheless did not find those thresholds to expanded MSHA jurisdiction to be important – “a distinction without a difference.”

While the majority of Maxxim Rebuild’s business is servicing equipment for Alpha Resources affiliated mining operations, it also services equipment for other mining and non-mining customers. It is unclear whether a higher percentage of non-Alpha Resource work would change the outcome. Would MSHA have jurisdiction if Maxxim Rebuild’s business was 50% non-Alpha Resources?

The commissioners were no more sympathetic to Maxxim Rebuild’s argument regarding MSHA’s inconsistent application of the law. With regard to the fact that other Maxxim Rebuild shops are not currently inspected by MSHA, the commissioners found that the record did not provide evidence as to whether the other shops are “substantially similar” to the Sidney, Kentucky shop. As to Maxxim Rebuild’s argument that MSHA’s previous non-inspection of the Sidney shop (when it was located in West Virginia) showed that MSHA’s claim of jurisdiction when the shop moved to Kentucky was an abuse of discretion, commissioners found that argument unconvincing as well, comparing it to a person arguing against a traffic ticket for running a red light on the grounds that a police officer did not issue a ticket the last time the person ran the red light.

Only in passing was mention made by any of the commissioners as to whether employees working in Maxxim Rebuild’s equipment shop are better protected by being under MSHA, rather than OSHA, standards and enforcement. There is little doubt that OSHA’s standards for the types of hazards likely to be found in equipment maintenance shops are more comprehensive. MSHA’s inspections are more frequent and training requirements are more onerous. But query: do workers in a separately located and independent equipment maintenance and fabrication shop really benefit from 40 hours of initial and 8 hours annual “miner” training?

Those who try to understand the jurisdictional lines between MSHA and OSHA are accustomed to seeing MSHA claim jurisdiction over facilities and operations that it had not previously claimed, and of having those claims upheld by the Commission – so much so that the steady trickle of newly claimed jurisdiction by MSHA, and OSHA’s acquiescence, has become something of a joke at the Commission. What is unfortunately missing is a consistent approach that would give the regulated community reason to believe that jurisdiction decisions between MSHA and OSHA are not simply arbitrary.