UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

CAPITOL CEMENT CORPORATION,
Petitioner,

v.

SECRETARY OF LABOR, MINE
                                                                     No. 99-2264
SAFETY AND HEALTH ADMINISTRATION
(MSHA); FEDERAL MINE SAFETY &
HEALTH REVIEW COMMISSION,
Respondents.

On Petition for Review of an Order
of the Federal Mine Safety and Health Administration.
(95-194-M-WEVA, 95-321-M-WEVA)

Argued: May 1, 2000

Decided: August 24, 2000

Before MOTZ and TRAXLER, Circuit Judges, and
Frank W. BULLOCK, Jr., United States District Judge for the
Middle District of North Carolina, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Dana Lewis Rust, MCGUIRE, WOODS, BATTLE &
BOOTHE, L.L.P., Richmond, Virginia, for Petitioner. Jack Powasnik,
Office of the Solicitor, UNITED STATES DEPARTMENT OF
LABOR, Washington, D.C., for Respondents. ON BRIEF: E. E.
Mathews, III, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.,
Richmond, Virginia, for Petitioner. Henry L. Solano, Solicitor of
Labor, Edward P. Clair, Associate Solicitor, W. Christian Schumann,
Counsel, Appellate Litigation, Office of the Solicitor, UNITED
STATES DEPARTMENT OF LABOR, Washington, D.C., for
Respondents.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Capitol Cement Corporation ("Capitol") has petitioned for review
of a final decision of the Federal Mine Safety and Health Review
Commission (the "Commission"). The Commission affirmed two "un-
warrantable failure" citations and a withdrawal order issued to Capitol
by the Mine Safety and Health Administration ("MSHA") and
affirmed the civil penalties assessed for the violations.1 The Commis-
sion also concluded that Capitol had not been denied due process of
law during the hearing before the administrative judge. For the fol-
lowing reasons, we affirm the decision of the Commission.

I.

This case arises from two separate incidents at Capitol's Martins-
burg plant in Berkeley County, West Virginia (the"Martinsburg
plant"). The Martinsburg plant consists of a limestone quarry, a crush-
ing facility, and a cement manufacturing facility. On October 21,
1994, Supervisor Gregory Bonfili ("Bonfili") was injured when his
right forearm contacted an energized "hot rail" on the overhead crane
_________________________________________________________________
1 The Mine Safety and Health Administration is established within the
Department of Labor and represents the Secretary of Labor in enforcing
the Federal Mine Safety and Health Act of 1977. See 29 U.S.C. § 557a.

                    2
at Capitol's Martinsburg plant. The overhead crane, which has an on-
board operator and travels along 600-foot-long rails, is used to move
material inside a large storage building. The distance from the over-
head crane to the ground varies depending on the amount of material
below the crane. At the time of Bonfili's accident, the crane was
approximately fifty feet from the ground. The crane may be accessed
by a walkway, which is three feet wide and runs the length of the
crane rails. The walkway has no guardrail, but employees may tie
their safety belts to a cable which runs the length of the walkway.

The hot rail, which is used to power the crane, conducts 480 volts
of electricity and is located under the walkway. The electrical power
of the hot rail is controlled by three separate circuit breakers: (1) a
circuit breaker on board the crane de-energizes only the crane and not
the hot rail; (2) a circuit breaker on the third floor of the building,
which at the time of the accident was one level below the crane, de-
energizes the crane and the hot rail; and (3) a circuit breaker on the
main floor of the building de-energizes the entire section, including
the crane and the hot rail. When the accident occurred, Bonfili was
responding to a complaint that the crane was not functioning properly.
In an attempt to diagnose the problem, Bonfili, without a safety belt,
went on the walkway and, without de-energizing the hot rail, reached
over the side of the walkway. Bonfili's right forearm contacted the
hot rail and was severely burned.

Following an accident investigation by Edward Skvarch
("Inspector Skvarch"), an inspector for MSHA, two citations were
issued and civil penalties were proposed against Capitol. The first
citation alleged a "significant and substantial" violation of 30 C.F.R.
§ 56.12016 based on Bonfili's failure to de-energize the hot rail.2 The
second citation alleged a "significant and substantial" violation of 30
C.F.R. § 56.15005 arising from Bonfili's failure to wear a safety belt
when there was a danger of falling.3 Both the citation under 30 C.F.R.
_________________________________________________________________
2 30 C.F.R. § 56.12016 provides, in relevant part, "Electrically powered
equipment shall be deenergized before mechanical work is done on such
equipment. Power switches shall be locked out or other measures taken
which shall prevent the equipment from being energized without the
knowledge of the individuals working on it."
3 30 C.F.R. § 56.15005 states, in relevant part, "Safety belts and lines
shall be worn when persons work where there is a danger of falling . . . ."

                    3
§ 56.12016 and the citation under 30 C.F.R.§ 56.5005 were subse-
quently modified to allege "unwarrantable failure" violations.4

On March 15, 1995, Supervisor Arthur Lozano ("Lozano") was
injured when his arm became caught in the head pulley of a conveyor
belt. The injury occurred when Lozano attempted to show another
miner, Jeff Miller ("Miller"), how to realign a conveyor belt while the
belt was energized and running. Specifically, Lozano touched a role
of duct tape to the pulley and the tape proceeded to unroll. When
Lozano tried to tear the tape, his arm was drawn into the pulley. On
April 18, 1995, Inspector Skvarch conducted a regular inspection of
the Martinsburg plant. During his review of the company's accident
reports, Inspector Skvarch learned that on March 15, 1995, Lozano
had been injured while attempting to repair an energized conveyor
belt. As a result of this discovery, a citation was issued and a civil
penalty was proposed against Capitol. The citation alleged an unwar-
rantable failure violation of 30 C.F.R. § 56.12016, the lockout regula-
tion.

A hearing on the violations arising from the incident involving
Bonfili was originally scheduled for October 5, 1995. The hearing
was rescheduled for November 5, 1995, but on October 27, 1995, the
administrative judge granted a stay of the hearing pending the resolu-
tion of whether criminal charges would be filed against Bonfili. On
January 16, 1996, the administrative judge also stayed the hearing in
the case arising from the incident involving Lozano. Thereafter, the
cases were consolidated for further proceedings.

On August 7, 1996, the administrative judge, without explanation,
lifted the stays and a hearing on the Bonfili and Lozano incidents was
held on October 30, 1996. At the hearing, due to the possibility that
criminal charges could still be brought against him, Bonfili asserted
his Fifth Amendment right against self-incrimination. Upon Bonfili's
_________________________________________________________________
4 The Federal Mine Safety and Health Act of 1977 does not define the
term "unwarrantable failure"; however, the Commission has held that
"unwarrantable failure means aggravated conduct, constituting more than
ordinary negligence, by a mine operator in relation to a violation of the
[Federal Mine Safety and Health Act]." Emery Mining Corp. v. Secretary
of Labor, 9 FMSHRC 1997, 2004 (December 1987).

                    4
assertion of his Fifth Amendment rights, Capitol objected to proceed-
ing with the hearing on the grounds that Bonfili's testimony was
essential to Capitol's defense in the case. The administrative judge
overruled the objection. On February 28, 1997, the administrative
judge held additional oral argument to clarify the legal theories pre-
sented by the parties in their post-hearing briefs.

On March 7, 1997, the administrative judge affirmed the unwar-
rantable failure citations arising out of the October 21, 1994, incident
involving Bonfili. In the same opinion, the administrative judge
affirmed the unwarrantable failure citation arising out of the March
1995 incident involving Lozano. Furthermore, the administrative
judge concluded that the exception recognized by the Commission in
Secretary of Labor v. Nacco Mining Co., 3 FMSHRC 848, 850 (April
1981), was not established by Capitol in either case,5 imputed the neg-
ligence of Bonfili and Lozano to Capitol, and assessed civil penalties
against Capitol totaling $5,350.00. Capitol appealed the ruling to the
Commission. On August 18, 1999, the Commission held that the
administrative judge did not deprive Capitol of due process of law by
declining to stay the cases further and conducting the hearing despite
Bonfili's invocation of his Fifth Amendment rights. The Commission
also affirmed the administrative judge's conclusion that the miscon-
duct of Bonfili and Lozano was imputable to Capitol for the purpose
of determining whether Capitol was liable for the unwarrantable fail-
ure violations. Finally, the Commission affirmed the administrative
judge's determination that the negligence of Bonfili and Lozano was
imputable to Capitol for the purpose of determining the proper civil
penalties to be assessed against Capitol.6 Capitol timely filed this peti-
tion for review.
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5 In Secretary of Labor v. Nacco Mining Co., 3 FMSHRC 848, 850
(1981), the Commission declined to impute a supervisor's negligence to
the mine operator at the civil penalty stage when determining the extent
of the operator's negligence because: (1) the operator took reasonable
steps to avoid the class of accident in question; and (2) the supervisor's
conduct did not expose other miners to injury. Notably, the Commission
has never applied the Nacco exception to permit an operator to preclude
a finding of unwarrantable failure nor has the Commission ever applied
the exception to mitigate the civil penalty assessed for an unwarrantable
failure violation.
6 Two distinct principles of imputation arise under the Mine Act:
(1) the imputation of agents' misconduct to the operator to establish the

                    5
II.

Capitol contends that the administrative judge deprived it of due
process by proceeding with the hearing despite Bonfili's assertion of
his Fifth Amendment rights. We review allegations of a due process
violation de novo. See Colindres-Aguilar v. Immigration and Natural-
ization Serv., 819 F.2d 259, 261 (9th Cir. 1987) (recognizing due pro-
cess claims arising out of a deportation hearing are reviewed de
novo). To establish a due process violation, a party must make a
showing of substantial prejudice. See id.; see also Farrokhi v. U.S.
Immigration and Naturalization Serv., 900 F.2d 697, 702 (4th Cir.
1990) (finding no due process violation where alien could not estab-
lish prejudice from the claimed error).

In Capitol's view, the administrative judge should have stayed the
cases until the Secretary of Labor (the "Secretary") made a final deter-
mination whether to pursue criminal charges against Bonfili. Accord-
ing to Capitol, the administrative judge's decision to proceed with the
hearing prejudiced Capitol because evidence of Bonfili's intent at the
time of the incident was essential to Capitol's defense to the unwar-
rantable failure findings.

Although the Commission has held that intentional misconduct
may warrant an unwarrantable failure finding, see Secretary of Labor
v. Rochester & Pittsburgh Coal Co., 13 FMSHRC 189, 194 (February
1991), the Commission has not held that evidence of a party's subjec-
_________________________________________________________________
operator's liability for violations; and (2) the imputation of agents' acts
to the operator to establish the extent of the operator's negligence for
penalty purposes. See Secretary of Labor v. Southern Ohio Coal Co., 4
FMSHRC 1458, 1463 (August 1982). Although the same or similar fac-
tual circumstances may be included in the Commission's consideration
of an operator's misconduct with regard to an unwarrantable failure find-
ing and the Commission's evaluation of an operator's negligence for pur-
poses of assessing a civil penalty, the concepts are distinct and subject
to separate analysis. See Secretary of Labor v. Black Diamond Coal Min-
ing Co., 7 FMSHRC 1117, 1122 (August 1985). Capitol's appeal is lim-
ited to whether the Commission erred by imputing Bonfili's and
Lozano's misconduct to Capitol for purposes of the unwarrantable failure
finding. (See Pet.'s Br. at 2).

                    6
tive intent is necessary to justify an unwarrantable failure finding.
Instead, the Commission has concluded that an unwarrantable failure
finding is justified based on various levels of conduct, including, but
not limited to: (1) a serious lack of reasonable care, see Secretary of
Labor v. LaFarge Constr. Materials, 20 FMSHRC 1140, 1146 (Octo-
ber 1998); (2) aggravated conduct, see Secretary of Labor v. Warren
Steen Constr., Inc., 14 FMSHRC 1125, 1129-30 (July 1992); and
(3) indifference, see Secretary of Labor v. Consolidation Coal Co., 22
FMSHRC 328, ___ (March 2000). At the hearing, evidence regarding
the circumstances surrounding the violations and evidence detailing
the subsequent investigations by the Secretary, as well as evidence
regarding Bonfili's supervisory status and evidence concerning the
training, which included specific instruction on lock-out procedures
and safety belt use, provided by Capitol to Bonfili, was submitted by
the parties. Because, contrary to Capitol's assertion, the Commission
does not require evidence of a party's subjective intent to justify an
unwarrantable failure finding, Capitol was not prejudiced by the
administrative judge's decision to proceed with the hearing despite
Capitol's inability to elicit testimony from Bonfili. Accordingly, Cap-
itol was afforded a meaningful opportunity to defend against the evi-
dence in this case and was not denied due process.

III.

Capitol also cites the Supreme Court's decision in Kolstad v. Amer-
ican Dental Ass'n, 527 U.S. 526 (1999), and argues, as it did before
the Commission, that the actions of Bonfili and Lozano were contrary
to Capitol's good faith efforts to comply with the Federal Mine Safety
and Health Act of 1977 (the "Mine Act"), 30 U.S.C. §§ 801-962, and,
therefore, the determination that Capitol committed an unwarrantable
failure should be vacated.7 According to Capitol, imputing the mis-
conduct of Bonfili and Lozano to Capitol for purposes of the unwar-
rantable failure determination, despite Capitol's good faith effort to
_________________________________________________________________
7 In Kolstad v. American Dental Ass'n, 527 U.S. 526 (1999), the
Supreme Court held that, in a Title VII punitive damages context, an
employer may not be vicariously liable for the discriminatory employ-
ment decisions of managerial agents where those decisions are contrary
to the employer's good faith efforts to comply with Title VII. See id. at
545.

                    7
comply with the Mine Act, is contrary to the plain language of the
Mine Act and undermines the public policy favoring mine safety. The
Commission does not share Capitol's view. In the Commission's
view, once it is determined that a supervisor, acting within the scope
of his employment, violates the Mine Act or a mandatory health or
safety standard, the misconduct of the supervisor may be imputed to
the mine operator for purposes of determining whether the violation
was the result of the operator's unwarrantable failure to comply with
the health or safety standard at issue.

In reviewing the Commission's interpretation of the Mine Act, we
must first inquire "whether Congress has directly spoken to the pre-
cise question at issue." Chevron, USA, Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 842 (1984). If the Mine Act's
meaning is clear and unambiguous, the inquiry ends. See id. at 842-
43. If the Mine Act is silent or ambiguous with respect to a specific
issue, we need ask only whether the Commission's interpretation is
rational and consistent with the Mine Act, according deference to rea-
sonably defensible constructions of the Mine Act by the Commission.
See Energy West Mining Co. v. Federal Mine Safety & Health Review
Comm'n, 111 F.3d 900, 903 (D.C. Cir. 1997). Furthermore, the defer-
ence due the Commission's interpretation and application of the Mine
Act is heightened in this case because the Secretary agrees with the
Commission. See id.

The Mine Act directs the Secretary or the Secretary's authorized
representatives to inspect coal mines frequently. See 30 U.S.C.
§ 813(a). If an inspection reveals a violation of the Mine Act, or any
mandatory health or safety regulation, the inspector issues a citation
to the operator. See 30 U.S.C. § 814(a). If the inspector determines
that the violation is both "of such a nature as could significantly and
substantially contribute to the cause and effect of a . . . mine safety
or health hazard" and "caused by an unwarrantable failure of [the
mine] operator to comply with such mandatory health or safety stan-
dards," those findings must be included in the citation and still greater
civil sanctions may be imposed on the operator. See 30 U.S.C.
§ 814(d)(1); see also 30 U.S.C. § 820(a).8
_________________________________________________________________
8 An unwarrantable failure finding commences a probationary period.
If a second violation resulting from an unwarrantable failure is found

                    8
Looking only to the text of the Mine Act, the Commission's deci-
sion not to permit an operator to avoid an unwarrantable failure find-
ing by establishing that the violation occurred despite the good faith
efforts of the operator to comply with the Mining Act is neither com-
pelled nor contradicted by the plain language of the statute. Thus, we
must uphold the Commission's interpretation as long as that interpre-
tation is one of the permissible interpretations the Commission could
have selected. We need not decide whether the Commission's view
is the correct one; our role is simply to determine if the Commission's
view is reasonable under the Mine Act. See Secretary of Labor v.
Mutual Mining, Inc., 80 F.3d 110, 115 (4th Cir. 1996).

The Commission's decision not to create an exception to the recog-
nized rule that the actions of an operator's agent, acting within the
scope of his employment, are imputable to the operator for purposes
of an unwarrantable failure finding is not inconsistent with the lan-
guage of Section 814(d)(1). Furthermore, the Commission's decision
in this case is consistent with previous decisions by the Commission
and the federal courts which have held that the Mine Act is a strict
liability statute. See, e.g., Sewell Coal Co. v. Federal Mine Safety &
Health Review Comm'n, 686 F.2d 1066, 1071 (4th Cir. 1982) (stating
that under the Mine Act an operator is liable without regard to fault
for violations of the Mine Act); Secretary of Labor v. Southern Ohio
Coal Co., 4 FMSHRC 1458, 1462 (August 1982) (same). Finally, the
Commission's interpretation is compatible with the Mine Act's gradu-
ated enforcement scheme. See Emery Mining Corp. v. Secretary of
Labor, 9 FMSHRC 1997, 2000 (December 1987) (stating that the
enforcement scheme of the Mine Act provides for increasingly severe
sanctions for increasingly serious violations or operator behavior).
_________________________________________________________________
within ninety days, the Secretary must issue a withdrawal order requiring
the mine operator to remove all persons from the area, except specially
exempted individuals, until the violation has been abated. See 30 U.S.C.
§§ 814(c) & (d)(1). Once an operator has been issued a withdrawal order
under Section 814(d)(1), any subsequent violations similar to those that
required the issuance of the withdrawal order result automatically in
additional withdrawal orders. See 30 U.S.C.§ 814(d)(2). This "chain" of
withdrawal order liability remains in effect until broken by an interven-
ing "inspection of such mine [which] discloses no similar violations." Id.

                    9
The Mine Act makes clear that its "first priority. . . must be the
health and safety of its most precious resource--the miner." 30
U.S.C. § 801(a). Capitol argues that the Commission's decision
creates a per se unwarrantable failure violation whenever a properly
trained supervisor engages in conduct which violates the Mine Act or
a mandatory health or safety standard, thereby undermining the goal
of the Mine Act and diminishing the incentive for mine operators to
train supervisors. We disagree. Contrary to Capitol's assertion, the
Commission did not rely solely on Bonfili's supervisor status and
training history when affirming the unwarrantable failure findings in
this case. The obviousness of the violations and the high degree of
danger presented by the violations also were factors in the Commis-
sion's decision. (See J.A. at 451). Thus, the conduct at issue in this
case is readily distinguishable from other violations committed by a
supervisor where the obviousness of the violation and the degree of
danger posed by the violation are not as severe. See, e.g., Secretary
of Labor v. Gatliff Coal Co., Inc., 14 FMSHRC 1982, 1987-89
(December 1992). Furthermore, notwithstanding the imputation of the
supervisors' misconduct to Capitol for purposes of the unwarrantable
failure findings in this case, as well as the imputation of the supervi-
sors' negligence for purposes of determining the proper civil penalties
to be assessed against Capitol, the Commission's decision did not dis-
turb the fact that, when determining the appropriate civil penalties to
be assessed against Capitol, the administrative judge took into
account the "responsible training program" Capitol had in place prior
to the incidents in this case, as well as Capitol's safety rules and hir-
ing practices. (See J.A. at 413, 415, & 455).

Although the Commission refused to create a blanket exception to
the general rule that the actions of the operator's agents are imputable
to the operator for purposes of an unwarrantable failure finding, an
operator's training programs, safety rules, and hiring practices may
still be taken into account to mitigate the civil penalty assessed for an
unwarrantable failure violation. Thus, the refusal on the part of the
Commission to create an exception to the general rule that the actions
of an operator's agents are imputable to the operator for purposes of
an unwarrantable failure finding should not diminish the incentive for
mine operators to train supervisors. Rather, the Commission's deci-
sion leaves in place a significant incentive for operators to select only

                     10
qualified supervisors and to provide each supervisor with comprehen-
sive training, thereby promoting the health and safety of all miners.

In light of the language, the structure, and the purpose of the Mine
Act, we find that the Commission's interpretation and application of
the Mine Act is reasonable. Accordingly, despite Capitol's good faith
attempts to comply with the Mine Act, the Commission did not err in
imputing the misconduct of Bonfili and Lozano to Capitol for pur-
poses of the unwarrantable failure findings. The decision of the Com-
mission is

AFFIRMED.

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