Background - News & Events (Landing) 2016

MSHA Jurisdiction Over Non-Mine 'Mines'

October 1999

Co-Authors: J. Michael Klise and Tim Means.

While OSM has been tilting at non-permittee "permittees," MSHA for years has pushed a similar construct, the non-mine "mine." Two recent litigation setbacks for MSHA may have dampened its drive to extend MSHA's jurisdiction beyond traditional mine sites. After years of pressing the boundaries of what constitutes a "mine" beyond what you and we know are actually mines, MSHA appears to be, at least for the present, backing off from - but not forsaking - its aggressive campaign to regulate the coal handling activities of off-site coal-fired electric power plants.

Its litigation defeats came when it sought jurisdiction over the coal-handling activities at two Midwestern power plants that were supplied with coal by rail from mines in the Power River Basin. After an initial win in the federal court in the Eastern District of Missouri, MSHA suffered a major loss when the U.S. Court of Appeals for the Eighth Circuit (with jurisdiction over Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) reversed the district court. In a 2-1 decision, over a strong dissent, the court of appeals sharply repudiated MSHA's claim that these power plants somehow became coal mines merely because of the coal-handling activities (for example, crushing, screening, loading, and storing) that these power plants engaged in after the coal had been delivered to them, before consuming the coal in their boilers.

Pinning its hopes on the narrow margin of loss and the strength of the dissenting opinion, MSHA then sought rehearing by the three-judge panel and by the whole court of appeals (all 11 judges) sitting en banc. Those hopes were dashed, however, over the summer, when MSHA's petitions for rehearing and rehearing en banc were denied.

In the other case, the federal district court for the Northern District of Illinois had initially, last fall, denied MSHA's application for a preliminary injunction compelling Commonwealth Edison to allow MSHA to inspect one of its power plants. Then, in May 1999, after discovery and cross-motions for summary judgment on the merits, the district court again rejected MSHA's arguments and dismissed its case. As had the Eighth Circuit, the district court (which is in the Seventh Circuit ans so is not bound by the Eight Circuit's ruling) ruled decisively that the things an electric utility does to prepare the coal it purchases to fuel its boilers do not transform a power plant into a mine. The court made clear that OSHA, not MSHA, is authorized to regulate occupational heath and safety at electric power plants.

MSHA promptly appealed the district court's decision to the Seventh Circuit Court of Appeals. Much to everyone's surprise, however, MSHA has since quietly withdrawn its appeal, allowing the district court's ruling to stand. Why did MSHA do that? Factually, there could be many reasons. Most likely, MSHA may not have wanted to risk an adverse Seventh Circuit decision on the issue given the relatively unfavorable facts presented in that case - especially the great geographic distance between the actual mine that produced the coal and the power plant. Certainly, MSHA has not announced that it was wrong and that it now realizes that electric power plants are not mines subject to its jurisdiction.

Meanwhile, however, we have heard encouraging reports that MSHA is meeting with OSHA to prepare OSHA to better recognize and regulate coal-related safety and health hazards. That is a positive sign, suggesting a more constructive approach by MSHA to addressing its concerns regarding safety and health hazards associated with coal-fired power plants. MSHA may just be biding its time, looking for a stronger set of facts to better advance its fledgling jurisdiction over coal-handling at power plants, now apparently well established in at least the Third Circuit (Pennsylvania, New Jersey, Virgin Islands, and Delaware), but we can only hold out hope that MSHA is coming to realize that its credibility - and consequently its regulatory effectiveness - suffer when it claims that such non-mining facilities are really mines. What MSHA's motivation really is, only time will tell.

Thomas (Tim) C. Means
Retired Partner – Washington, D.C.