Northern Illinois Steel Supply Co. v. Secretary of Labor

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 01-1752
NORTHERN ILLINOIS STEEL SUPPLY COMPANY,
Petitioner,
v.
SECRETARY OF LABOR, FEDERAL MINE SAFETY AND
HEALTH ADMINISTRATION, AND FEDERAL MINE SAFETY
AND HEALTH REVIEW COMMISSION,
Respondents.
____________
On Petition for Review of a Decision of the
Federal Mine Safety and Health Review Commission.
Nos. 99-RM-78 & 99-M-120.
____________
ARGUED OCTOBER 23, 2001—DECIDED JUNE 20, 2002
____________
Before HARLINGTON WOOD, JR., CUDAHY, and KANNE,
Circuit Judges.
HARLINGTON WOOD, JR., Circuit Judge. Northern Illi-
nois Steel Supply Company (“NIS”) is a small,1 family-
owned business that sells prime domestic steel products,
including pipes, tubing, bars, plates, and beams, to busi-
nesses and individuals in Northern Illinois and Indiana.
One of NIS’s customers is Vulcan Material Company (“Vul-
1
NIS employs a total of forty-one people.
2 No. 01-1752
can”). Vulcan operates a limestone extraction and crushing
operation (“the Quarry”) in Romeoville, Illinois. The Quar-
ry is a mine subject to the jurisdiction of the Mine Safe-
ty and Health Administration (“MSHA”). In the present
action, NIS is contesting a citation for a violation of the
Federal Mine Safety and Health Act of 1977 (“the Mine
Act”), 30 U.S.C. § 801 et seq., that was issued by MSHA to
an NIS driver during a delivery of steel to Vulcan. Both an
Administrative Law Judge (“ALJ”) and the Federal Mine
Safety and Health Review Commission (“the Commission”)
held that the citation should be enforced. NIS then filed
a timely Petition for Review of the Commission’s order in
this court.
I. BACKGROUND
When Vulcan wants to purchase steel, it contacts NIS and
places an order. NIS then delivers the steel to the Quarry
on flatbed trucks driven by NIS employees. NIS does not
charge Vulcan for delivery of the steel. When steel is loaded
onto a flatbed at the NIS plant, it is secured to the truck
by wire ropes or metal chains which are tightened with a
winch-like device. The load is also surrounded by a metal
sling or lifting chain, which allows the steel to be lifted onto
and off of the flatbed.
When the NIS drivers reach the Quarry with a delivery
for Vulcan, they drive their trucks down an access road
to the delivery point. The delivery point varies and is usual-
ly near the project where the steel is going to be used. Once
a truck reaches its delivery point, the steel is unloaded
using Vulcan owned and operated equipment, including
cranes with hoists, forklifts, and loaders. At the time the
citation in question was issued, NIS and Vulcan had been
involved in a business relationship for approximately two
years. Prior to the issuance of the citation, the NIS drivers
usually facilitated the unloading of the steel by loosening
the wire ropes or metal chains securing the load to the
No. 01-1752 3
truck. On “rare occasions,” estimated to be ten to fifteen
percent of the time, the NIS driver would also guide the
hook of a crane hoist into the lifting chain, an action known
as “rigging” the load. It was estimated that NIS made de-
liveries to the Quarry once or twice a week, and the parties
stipulated that the drivers spent approximately twenty to
thirty minutes at the Quarry in connection with each de-
livery.
On January 28, 1999, an NIS driver made a delivery of
steel to the Quarry. An inspector from MSHA was present
at the Quarry on that date. The mine inspector testified
that he was walking in front of the Quarry’s maintenance
shop when he saw the NIS flatbed truck. The truck was
parked, and the inspector saw a man on top of the steel on
the flatbed. The man was guiding a hook from a crane in-
to the lifting chain so that the steel could be removed
from the truck. The man was standing approximately five-
and-a-half to six feet above the ground, and, while he was
wearing a hard hat, he was not “tied off” with a safety belt
and line to prevent him from falling. A Vulcan employee
was running the equipment used to unload the steel, and
there were two other miners in the area, but no Vulcan su-
pervisor was present. The mine inspector walked to the
truck, and while the inspector was approaching the truck,
a Vulcan management official arrived on the scene.
The mine inspector believed the man on the truck was
in danger. Originally, the inspector thought the man was a
Vulcan miner, but when he spoke to the man, the man iden-
tified himself as the NIS truck driver. The inspector made
the driver climb down off of the truck and explained the
dangers of working at such a height without a safety belt
and line. The driver agreed that his actions were dangerous
and assured the inspector that he would not do it again.
The inspector then cited NIS under 30 U.S.C. § 814(a) for a
violation of 30 C.F.R. § 56.15005, which provides: “Safety
belts and lines shall be worn when persons work where
4 No. 01-1752
there is a danger of falling . . . .” The mine inspector tes-
tified that, in issuing the citation, he believed NIS was
an independent contractor performing a service, the de-
livery and rigging of steel, at the mine and that it, there-
fore, fell under the Mine Act’s jurisdiction. NIS contested
the citation, arguing that it was not subject to the jurisdic-
tion of the Mine Act. When a party contests a citation
issued under the Mine Act, the proceeding is adjudicated
before an ALJ. The ALJ’s decision is subject to discretionary
review before the Commission. In the present case, both the
ALJ and the Commission rejected NIS’s challenge to the
citation. NIS then filed a timely Petition for Review in this
court.
II. ANALYSIS
The Mine Act, which is enforced by MHSA, regulates coal
and other mines affecting commerce and “each operator” of
a covered mine. 30 U.S.C. § 803. Under 30 U.S.C. § 802(d),
an “operator” for purposes of the Mine Act is defined as
“any owner, lessee or other person who operates, controls,
or supervises a . . . mine or any independent contractor per-
forming services or construction at such mine.” NIS argues
that the citation should not be enforced because MHSA
erroneously concluded that NIS was an operator as defined
in the Mine Act. NIS asserts it is not an operator for pur-
poses of the Mine Act but rather a vendor completing a sale
and, therefore, not subject to the jurisdiction of MHSA. The
ALJ found that NIS qualified as an operator under the
Mine Act because it was an independent contractor per-
forming services at a mine and because NIS’s work was
closely related to the mining process and NIS had “a sig-
nificant presence at the quarry.” The Commission affirmed,
holding that the ALJ’s determination was supported by
substantial evidence.
The parties disagree as to the correct standard for our
review. NIS asserts that we should review de novo because
No. 01-1752 5
this appeal involves an agency’s determination of its own
jurisdiction, citing United Transportation Union-Illinois
Legislative Board v. Surface Transportation Board, 183
F.3d 606, 612 (7th Cir. 1999), and United Transportation
Union-Illinois Legislative Board v. Surface Transportation
Board, 169 F.3d 474, 477 (7th Cir. 1999). Appellee the Sec-
retary of Labor (“the Secretary”) urges us to reject the cases
cited by appellant and “instead adopt the principle that ‘the
rule of deference applies even to an agency’s interpreta-
tion of its own statutory authority or jurisdiction,’ ” quoting
Mississippi Power & Light Co. v. Moore, 487 U.S. 354, 381
(1988) (Scalia, J., concurring). While the Secretary correctly
points out that several other circuits have granted defer-
ence to an agency’s determination of its own jurisdiction,
the Supreme Court has not definitively ruled on the issue.
We believe that de novo review is appropriate and, there-
fore, follow the established law of this circuit as set out in
the United Transportation Union cases, 183 F.3d at 612 and
169 F.3d at 477. See also Bolton v. Merit Sys. Protection Bd.,
154 F.3d 1313, 1316 (Fed. Cir. 1998).
The Federal Coal Mine Health and Safety Act of 1969
(“the Coal Mine Act”), Pub. L. No. 91-173, § 3(d), 83 Stat.
742, 743, the predecessor to the present Mine Act, defined
operator as “any owner, lessee, or other person who oper-
ates, controls or supervises a coal mine.” While this stat-
utory language did not expressly include independent con-
tractors, “courts interpreted this provision to include inde-
pendent contractors whenever the contractors, in perform-
ing services at a coal mine, controlled or supervised all or
part of the mine.” Joy Technologies, Inc. v. Sec’y of Labor,
99 F.3d 991, 993-94 (10th Cir. 1996) (collecting cases). In
1977, Congress amended the Coal Mine Act and renamed
it the Federal Mine Safety and Health Act. As a part of
the 1977 amendments, Congress broadened the definition
of operator under 30 U.S.C. § 802(d) to include “any owner,
lessee or other person who operates, controls, or supervises
6 No. 01-1752
a . . . mine or any independent contractor performing ser-
vices or construction at such mine.” The legislative history
accompanying these amendments states:
the definition of mine “operator” is expanded to include
“any independent contractor performing services or con-
struction at such mine.” It is the Committee’s intent to
thereby include individuals or firms who are engaged in
construction at such mine, or who may be, under con-
tract or otherwise, engaged in the extraction process for
the benefit of the owner or lessee of the property and
to make clear that the employees of such individuals
or firms are miners within the definition of the Feder-
al Mine Safety and Health Act of 1977. In enforcing
this Act, the Secretary should be able to issue cita-
tions, notices, and orders, and the Commission should
be able to assess civil penalties against such independ-
ent contractors as well as against the owner, operator,
or lessee of the mine. The Committee notes that this
concept has been approved by the federal circuit court
in Bituminous Coal Operators’ Assn. v. Secretary of the
Interior, 547 F.2d 240 (C.A. 4 1977).
S. Rep. No. 95-181, 95th Cong., 1st Sess. 14, reprinted in
1977 U.S.C.C.A.N. 3401, 3414.
It is clear that NIS performed work, the delivery and oc-
casional rigging of steel, at a mine and that, in doing
so, NIS was not acting under the direction of Vulcan. Nev-
ertheless, NIS argues that not all independent contractors
performing activities at a mine are covered by the Mine
Act. NIS contends that it does not qualify as an operator
under the Mine Act because it performed only incidental
activities at a mine and the activities it performed were not
closely related to the mining process. While this circuit has
not previously considered this argument, three appellate
courts have. In Old Dominion Power Company v. Donovan,
772 F.2d 92, 96 (4th Cir. 1985), the Fourth Circuit, after
No. 01-1752 7
considering the legislative history set out above, concluded
that the Mine Act’s definition of operator includes only
those independent contractors who are involved in mine
construction or extraction and who have a “continuing pres-
ence” at a mine.
In Otis Elevator Company v. Secretary of Labor, 921 F.2d
1285 (D.C. Cir. 1990), the D.C. Circuit held “that the phrase
‘any independent contractor performing services . . . at [a]
mine’ means just that—any independent contractor per-
forming services at a mine.” Id. at 1290 (emphasis in orig-
inal). The Otis Elevator court rejected both the Old Domin-
ion court’s reliance on and its reading of the legislative
history, holding that the legislative history’s special ref-
erence to independent contractors involved either in the
extraction process or in construction at a mine did nothing
to exclude other independent contractors from coverage.
The court noted, “Nothing in the legislative history ex-
pressly states an intent to cover only these independent
contractors . . . .” Id. The court concluded that, given the
absence of a clearly expressed legislative intent to the
contrary, there was nothing to expand the scope of its
judicial inquiry beyond the unambiguous statutory lan-
guage. Id. at 1290-91 (citing cases). The Tenth Circuit, in
Joy Technologies, Inc., followed the D.C. Circuit’s Otis Ele-
vator approach, holding
the definition of “operator” in section 3(d) of the Mine
Act is clear and means just what it says—an operator
includes “any independent contractor performing ser-
vices . . . at [a] mine. Although Congress may have been
specially concerned with contractors who are engaged
in the extraction process and who have a continuing
presence at a mine, section 3(d) by its terms is not lim-
ited to these contractors.
Joy Technologies, Inc., 99 F.3d at 999 (citations omitted).
Despite its broad holding, the Otis Elevator court recog-
nized that there may be a point at which an entity’s
8 No. 01-1752
contacts with a mine would be so attenuated as to remove
it from the jurisdiction of MHSA. The court expressly stated
in a footnote that, because Otis conceded that it was per-
forming “limited but necessary services,” it did not need
to confront the issue of whether there is a point at which
an independent contractor’s contact with a mine is so in-
frequent or de minimis that it would be difficult to conclude
that services were being performed under the Mine Act.
Otis Elevator Co., 921 F.2d at 1290 n.3. Similarly, the Joy
Technologies court based its finding that Joy was an inde-
pendent contractor on the fact that substantial evidence
supported the conclusion that Joy “performed significant
services” at a mine and, therefore, did not reach the de
minimis issue in its operator analysis. Joy Technologies,
Inc., 99 F.3d at 998-99. The Tenth Circuit declined to an-
alyze Joy’s hypothetical that the broad definition of opera-
tor would “include mere vendors, such as the Xerox service
representative who comes onto mine property to repair a
copy machine,” stating that “[f]or present purposes, it is
enough to conclude that we are constrained by the plain
meaning of the words Congress chose.” Id. at 1000.
The Mine Act does not define “services . . . at [a] mine.” In
the present case, NIS’s contacts with the mine were clearly
less significant than those of the plaintiffs in Otis Eleva-
tor or Joy Technologies. Otis contracted to provide periodic
maintenance and repairs to underground elevators that
carried miners into mines. Otis Elevator Co., 921 F.2d at
1287. Joy, a company which manufactures and sells mining
equipment, sent a service representative onto mine property
to assure equipment was delivered in proper condition, to
advise and assist in repairs and procuring necessary re-
placement parts, and to “troubleshoot” problems with equip-
ment both above and below ground. Joy Technologies, Inc.,
99 F.3d at 994. In contrast, NIS drivers drove truckloads
of steel to designated delivery points, loosened the re-
straints on the loads, and occasionally helped to rig the
No. 01-1752 9
load. While the steel itself was fashioned by Vulcan into
catwalks, handrails, and other structures that were vital to
the mining process, the work performed by the NIS drivers
at the mine can only be described as de minimis. In fact,
there is nothing to distinguish NIS’s deliveries of steel from
deliveries by other vendors or parcel delivery companies of
supplies to be used by the miners. We need not adopt the
more restrictive Old Dominion approach, because we be-
lieve that NIS’s conduct falls outside of MHSA’s jurisdiction
under the plain language of the statute. Unlike Otis and
Joy, NIS cannot be characterized as an independent con-
tractor providing services at a mine because the minimal
activity performed by NIS does not rise to a level that can
be construed as services performed at a mine. Therefore,
NIS is not subject to the Mine Act, and the MSHA citation
cannot be enforced.
III. CONCLUSION
For the reasons set forth above, NIS’s petition for review
is granted, and the Commission’s decision is REVERSED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-97-C-006—6-20-02