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Rail Company Gets Split Decision in Mine Jurisdiction Case

  • August 12, 2015

A locomotive repair shop operated by a South Dakota railroad company is not under the jurisdiction of the Mine Safety and Health Administration, even though the company and an adjacent mine share common ownership, but the railroad firm itself is under MSHA jurisdiction because it is an independent contractor providing mine-related services, Judge L. Zane Gill of the Federal Mine Safety and Health Review Commission has ruled. Secretary of Labor v. Ellis & Eastern Co., CENT 2014-0451 (July 27, 2015).

The case involved a jurisdictional challenge by Ellis & Eastern Co. (E&E) to a March 2014 citation MSHA wrote for an alleged failure to set a parking brake on a truck in E&E’s maintenance shop. E&E contended that neither the shop nor the company fell under MSHA’s jurisdiction.

Prior to 2010, the shop had been inspected only by the Federal Railway Administration (FRA). However, that year, MSHA issued two citations following an inspection. Both citations were subsequently vacated over concerns that E&E had not received sufficient notice of MSHA’s jurisdiction. At that time, however, the federal safety agency put E&E on notice it had jurisdiction over E&E’s tracks, railcars, and maintenance shop.

On a daily basis, E&E moves empty railcars from its shop to the mine’s screening and washing area. There, the cars are loaded, then moved by E&E on the mine’s private tracks to facilities operated by the Burlington Northern Santa Fe Railroad, which is under FRA’s jurisdiction.

MSHA provided three justifications for its jurisdictional claim. First, it claimed the shop was a mine, according to Gill, because “[e]ssentially, the Secretary argues that miner safety is affected by the condition of the train tracks and railcars because miners daily load the locomotives. Therefore, the building in which the trains are maintained should be under MSHA supervision.” But Judge Gill declined to accept that argument. “The shop where the citation was issued only repairs locomotives, over which MSHA has no jurisdiction,” he concluded.

MSHA further claimed that E&E’s trains are mining equipment, and therefore it has authority over the railroad shop as part of its general jurisdiction over maintenance areas. The Mine Act defines a mine as including the work of preparing extracted minerals and goes further to define mineral preparation, in part, as the loading of minerals. But, Judge Gill noted, in this case, the loading is done by miners, not E&E’s railway workers. He added that loading is incidental to the primary purpose of the railcars, which is transportation, and referenced a 1982 Federal Mine Safety and Health Review Commission ruling. “Similarly, based on the nature of E&E’s business, its vehicles are properly viewed as railroad, rather than mining, equipment,” he said.

Curiously, the judge also disputed MSHA’s jurisdictional claim by stating that “none of E&E’s railroad vehicles enter the quarry extraction area.” However, Judge Gill had stated previously the railcars travel to an area of the mine where screening and washing are done, work considered part of the extraction process.

MSHA’s final argument was that E&E and the quarry operator should be considered integral components of a single operation because both are controlled by the same parent company. As such, it argued, MSHA has jurisdiction over the railroad company by virtue of its authority over the mine operator. Judge Gill set aside the agency’s contention for several reasons: lack of evidence that separation of the two businesses represented an attempt to limit liability, the existence of clear physical boundaries between the two, and evidence that “[b]oth corporations have sufficiently diverse holdings and interest to merit treatment as distinct companies.”

E&E had also argued it was not an independent contractor, and thus its MSHA-provided independent contractor identification number should be revoked. Judge Gill denied the request. He pointed out that independent contractors were those who performed services at a mine beyond a trivial level. That distinction did not apply to E&E, he said, because the company maintained a continuing presence at the mine through the daily drop off and shipment of railcars.

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