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Howrey LLP
The
U.S. Court of Appeals for the District of Columbia has reinstated
an award of attorneys fees and expenses to a company that
disputed a citation and imposition of fines by the Mine
Safety and Health Administration. The Court of Appeals overturned
a ruling by the Federal Mine Safety and Health Review Commission
that the actions by MSHA were substantially justified.
The
case began in 1993 when Contractor's Sand and Gravel, Inc.,
was cited by a MSHA inspector for using a frame grounding
method for electrical grounding on a crusher. The inspector
asserted that frame grounding violated 30 Code of Federal
Regulations §56.12025, which requires that all metal
enclosing or encasing electrical circuits be grounded or
provided with equivalent protection. Following the citation,
CSG conducted testing of the grounding method it was using
and, finding it effective, then declined to modify the structure.
A second inspector then issued a closure order forcing CSG
to implement a fourth wire grounding system. MSHA then lifted
the closure order but assessed a $7,000 civil penalty against
CSG and a $6,000 penalty against CSG's general manager,
Eric Shoonmaker. The previous record for a penalty by MSHA
had been $81.
CSG
and Shoonmaker contested the penalties, and the Secretary
of Labor initiated civil penalty proceedings before the
Review Commission. After briefing of the issues, the administrative
law judge granted summary judgment to CSG. The ALJ noted
that the Secretary of Labor had produced no evidence whatsoever
indicating that the grounding method employed by CSG violated
regulatory requirements. The ALJ found that CSG complied
with the requirements of the cited standard and that CSG's
evidence of compliance was uncontested. Secretary of
Labor v. Contractors Sand and Gravel Supply, Inc., 18
FMSHRC 384, 387-88 (1996).
Following
its victory, CSG sought an award of its costs and fees under
the Equal Access to Justice Act, 5 USC §504 (a)(1).
The act provides that a prevailing party other than the
United States shall be awarded fees and other expenses incurred
in the adversary adjudication unless the agency was substantially
justified in bringing the action. The ALJ rejected the Secretary
of Labor's claim that there was substantial justification
for the citations and entered costs and fees in favor of
CSG. Contractor's Sand and Gravel, Inc. v. Secretary
of Labor, 18 FMSHRC 1820 (1996).
The
Secretary of Labor appealed the decision to the Review Commission,
which reversed the ALJ and vacated the costs and fees award.
Secretary v. Contractors Sand and Gravel, Inc., 20
FMSHRC 960 (1998). CSG then appealed to the U.S. Court of
Appeals on two issues. CSG argued that the award of costs
and fees was not appealable or, in the alternative, that
the Commission erred on the merits of the action.
The
court held that the Review Commission had jurisdiction to
hear the appeal of the ALJ's award. The court found, however,
that the commission had erred on the merits of the action.
The court noted that the ALJ had twice determined that the
Secretary of Labor's legal theory was unreasonable. The
statute contained no prohibition on the type of grounding
CSG employed. CSG tested the method and found that it accomplished
the requirement set forth in the statute, making the ground
part of the electrical circuit. Accordingly, there had been
no violation of the express terms of the statute.
The
court went on to chastise the Secretary of Labor for again
overreaching in its attempts to enforce citations against
industries. In this case, the grounding method utilized
by CSG may not have been the optimal method available. Nevertheless,
it did not constitute a per se violation of the statute.
To require CSG to utilize a fourth wire method, as proposed
by the inspector who issued the citation, was, in fact,
a backhanded attempt at rulemaking. The citation was improper
and not substantially justified. Accordingly, the Court
reversed the Review Commission and reinstated the ALJ's
costs and fees award. The case was remanded for further
proceedings to determine the amount of the award. The award
now is to include the costs of pursuing the petition to
the U.S. Court of Appeals.
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For more information about the issues covered in this report, please contact Paul Berning in our San Francisco office at 415-848-4996 or at paulberning@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
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