Rock Products

OCT 2014

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Page 54 of 67 ROCK products • OCTOBER 2014 53 Two Personal Liability Cases Upheld Against Foremen By Ellen Smith The 11 th Circuit Court of Appeals agreed with the Labor Sec‐ retary that an agent of a limited liability corporation, or "LLC," can be charged under 110(c) of the Mine Act, and in a separate case, the Review Commission upheld charges against a foreman. The case before the 11 th Circuit stems from an MSHA citation issued Dec. 30, 2009, at Oak Grove Resources mine in Jeffer‐ son County, Ala. During an inspection it was found that sev‐ eral pumps, used to prevent water accumulation, were not working properly, and prevented the company from having the areas examined as required by law. The examination books showed that the area had not been inspected for three weeks, and the mine was cited under, and paid a $108 fine. Six days later, on Jan. 6, 2010, another MSHA inspector was following up, and found the same violations. MSHA fined the company again, for the lack of examinations and the water, and pursued 110(c) fines against Mike Sumpter, the acting mine superintendent, and Rex Hartzell, the general mine foreman. Appeal Sumpter and Hartzell appealed the fines, arguing they could not be held responsible under 110(c), because Oak Grove is an LLC, and the 110(c) provisions apply only to agents of corporations. In ruling in favor of the secretary's interpretation, the 11 th Cir‐ cuit said the legislative history shows "a clear intent to pene‐ trate the corporate shield, and to induce those officials responsible for the operation of a mine to comply with the Act and its standards. "Interpreting 'corporate operator' and 'cor‐ poration' to only cover one type of commercial entity that shields individuals from liability would frustrate Congress's in‐ tent to pierce corporate forms that provide this liability shield." The court also noted that when the Mine Act was written, LLCs did not even exist, and an LLC wasn't even defined in Blacks Law Dictionary until 1999. In 2006, the secretary is‐ sued an interpretative bulletin with the secretary's position that an agency of an LLC may be held personally liable under Sec. 110(c) of the Mine Act, and the Commission upheld that interpretation in 2012, affirming a 2010 decision of ALJ Jerold Feldman (see: BILL SIMOLA, employed by UNITED TACONITE LLC, 3/7/2012, Docket No. LAKE 2010‐128‐M, 34 FMSHRC 539 (affirming 32 FMSHRC 421) (ALJ Feldman). The 11 th Circuit said that the secretary's "interpretation fur‐ thers Congress's intent to pierce the corporate form and reach officers or agents who would not otherwise be liable. It also prevents the subversion of Congress's intent through the creation of new hybrid business entities with different names that provide a similar limitation on liability." In this case of whether the two individuals could be held li‐ able for their specific actions, the court said substantial evi‐ dence supported a conclusion that management plainly knew or should have known that the required examinations were not being performed. "There was a threat of serious in‐ juries to the entire mining crew which arose from aggravated conduct that was more than mere negligence," the court said. Mine Operating Safely While the agents argued that despite the lack of examina‐ tions the mine was operating safely, the court said, "This de‐ fense is not viable, because were we to adopt it, it would allow people, based on their personal opinions, to circum‐ vent the rigorous and detailed health and safety standards Congress mandated to protect miners and regulate their dan‐ gerous working conditions." In another recent decision, the full Commission upheld a 110(c) case where a shift foreman was held liable when he allowed mining to continue without cleaning up accumula‐ tions of combustible materials. The ALJ's 110(c) liability findings were supported by the MSHA inspector's notes, along with company production and examination records. The mine had also been cited 17 times for accumulations in a two‐year period, and therefore the mine was on "notice" that better efforts were needed in keep‐ ing the mine clean. In this case, the Commission said that once the shift foreman, Jason Robinson, made the decision to continue mining, in‐ stead of ordering the mine to be cleaned‐up, he "knowingly and willfully violated the law at that time." MIKE SUMPTER, REX HARTZELL, Employed by, Oak Grove Resources, LLC, 8/15/2014, CA11 No. 13-15360; 21 MSHN D-2197 ELLEN SMITH Ellen Smith is the owner of Legal Publication Services, publisher of Mine Safety & Health News , She has been covering mining issues since 1987 and has won 31 journalism awards for her reporting, including the 2010 Magnum Opus Award for Outstanding Achievement in Custom Media. Ellen can be reached at 585-721-3211, or at

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