United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 10, 1999 Decided January 7, 2000
No. 98-1480
Contractor's Sand and Gravel, Inc.,
Petitioner
v.
Federal Mine Safety and Health Review Commission and
Secretary of Labor,
Respondents
On Petition for Review of an Order of the
Federal Mine Safety and Health Review Commission
C. Gregory Ruffennach argued the cause for petitioner.
With him on the briefs were Ronald E. Meisburg and Wil-
liam K. Doran.
Jack Powasnik, Attorney, U.S. Department of Labor, ar-
gued the cause for respondent. With him on the brief was W.
Christian Schumann, Counsel. Norman Michael Gleich-
man, General Counsel, entered an appearance.
Before: Sentelle, Randolph and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: Contractor's Sand and Gravel,
Inc. ("CSG") petitions for review of a Federal Mine Safety
and Health Review Commission ("FMSHRC") decision vacat-
ing an Administrative Law Judge's ("ALJ") award of attor-
neys fees and expenses against the Secretary of Labor arising
out of an underlying proceeding in which CSG had successful-
ly defended against citations and civil penalty assessments for
alleged violations of Mine Safety Regulations. The Commis-
sion responds both that it has the jurisdiction to review the
award and that the award was improper because the conduct
of the Secretary in the underlying litigation was "substantial-
ly justified." While we agree with the Commission that it
had jurisdiction to review the award, we agree with petitioner
that the conduct of the Department of Labor in the underly-
ing Mine Act proceedings was not substantially justified.
Therefore, for the reasons more fully set out below, we allow
the petition for review.
I. Underlying Proceedings
A. The MSHA Citations
In March of 1993, Inspector Ann Frederick of the Mine
Safety and Health Administration ("MSHA"), purporting to
act under the Federal Mine Safety and Health Act of 1977
("Mine Act"), 30 U.S.C. s 801 et seq., issued numerous cita-
tions against petitioner Contractor's Sand & Gravel, Inc. and
its general manager Eric Shoonmaker. While most citations
were dismissed or otherwise disposed of, the one underlying
the present proceeding resulted in substantial administrative
litigation. This citation charged violation of 30 C.F.R.
s 56.12025, which requires that "[a]ll metal enclosing or
encasing electrical circuits shall be grounded or provided with
equivalent protection." The citation specifically alleged that
the grounding system employed by petitioner for its crusher
was not in compliance with law and constituted "an unwar-
rantable failure by [the] operator to comply with the stan-
dards" of the Mine Act. Secretary of Labor v. Contractors
Sand and Gravel Supply, Inc., 18 F.M.S.H.R.C. 384, 385
(ALJ 1996) (quoting citation). The citation did not allege that
the device was not grounded, but only that the method of
grounding--that is the use of the frame of the equipment as
the conduit to the ground--"has been forbidden for over
fifteen years." Id. In fact, neither section 56.12025, nor the
Secretary's regulatory definition applicable to the grounding
requirement of section 56.12025, nor any other statute or
regulation forbade frame grounding and never had. The
regulatory definition simply defines "electrical grounding" as:
"to connect with the ground to make the earth part of the
circuit." 30 C.F.R. s 56.2 (1999).
After testing confirmed that its method of grounding com-
plied with the regulatory definition, CSG declined to modify
the structure to comply with the Secretary's instructions, and
proceeded to contest the citation. A second MSHA inspector
issued a closure order closing the entire crushing plant until
such time as the crushing operation was properly grounded
with a fourth wire. Only after CSG incorporated a second
grounding system according to the dictates of the inspectors
did MSHA lift the closure order. On May 27, 1993, MSHA
assessed a $7,000 civil penalty against CSG and a $6,000 civil
penalty against Shoonmaker personally, in contrast with the
Secretary's average penalty proposal of $66 and previous high
penalty proposal of $81. At no time during the entire pro-
ceeding did the inspectors or any other emissary of the
Secretary conduct any test to determine whether the frame
grounding employed by CSG in fact complied with the regula-
tory definition. CSG and Shoonmaker contested the exces-
sive penalty assessments as well as the underlying violation.
The Secretary then initiated civil penalty proceedings against
both before the FMSHRC.
In the Mine Act proceeding, the Secretary initially ad-
vanced a position similar to the one that Frederick had
articulated in the citation, that is, she maintained that 30
C.F.R. s 56.12025 prohibited frame grounding. Specifically,
the Secretary alleged:
The grounding system set up by [CSG] did not con-
form to MSHA standards or to standards recognized in
the building and construction industries. The use of
feeder and stacker frames as grounding is prohibited by
the National Electrical Code....
The use of structural frames as grounding conductors
is not recognized by MSHA....
Subsequently, in response to a pre-hearing order by the ALJ,
and in apparent recognition that section 56.12025 does not
contain any provision forbidding frame grounding, that the
regulations have never adopted the National Electrical Code,
and that the Secretary's inspectors had never conducted any
inspection to determine compliance with the actual require-
ments of the actual regulatory scheme, the Secretary changed
her position and alleged that MSHA would establish a viola-
tion of section 56.12025 "by showing that the stacker and
crusher conveyor motors were not properly grounded. Spe-
cifically ... that these two motors did not have a ground lead
or 'fourth wire' ... [leaving] the motors without a proper and
effective ground...."
Just as the regulations did not forbid frame grounding,
neither did they affirmatively require "fourth wire ground-
ing." Therefore, CSG moved for a summary decision from
the ALJ. The Secretary opposed that motion and filed a
cross-motion for summary disposition, arguing that a reason-
ably prudent person would infer the Secretary's contended
requirements and prohibitions from the cited sections and
that the Secretary's "interpretation" was therefore entitled to
"deference."
The ALJ recognized the single issue before him as being
whether CSG's use of frame grounding to create a path for
the electrical current to the ground violated section 56.12025.
He further recognized that the cited regulation did not pro-
hibit frame grounding and that the Secretary had never
undertaken any rulemaking to extend an interpretation of the
grounding requirement forbidding frame grounding, or con-
versely requiring some other method. CSG entered the
battle of summary decision motions armed with evidence that
its method did in fact meet the ground requirement set forth
in the regulatory and definitional sections of Part 56. The
Secretary came with no evidence whatsoever that the ground-
ing method did not meet the regulatory requirements nor any
other evidence that CSG or Shoonmaker had otherwise violat-
ed the cited regulations, or any other. There being no
dispute as to any material fact, the ALJ entered summary
decision in CSG's favor. See Contractors, 18 F.M.S.H.R.C. at
389. Specifically, the ALJ found that CSG "complied with
the requirement of the cited standard by intentionally
grounding the stacker conveyor and crusher discharge con-
veyor motors by using the stacker and crusher frames as
conductors in carrying ground fault current to the earth."
Id. at 387. The ALJ went on to note that Part 56 "clearly
provides that 'electrical grounding means to connect with the
ground to make earth part of the circuit.' " Id. at 387-88
(quoting 30 C.F.R. s 56.2). As CSG's evidence of compliance
with the regulation was uncontested, there was nothing else
to be heard. The Secretary did not appeal.
B. The EAJA Proceedings
After prevailing in every respect in the MSHA proceeding,
CSG sought an award of its costs and its fees under the
Equal Access to Justice Act ("EAJA"), 5 U.S.C. s 504. The
Secretary resisted the award, asserting that MSHA's position
"was substantially justified" as contemplated in 5 U.S.C.
s 504(a)(1). The ALJ rejected the substantial justification
claim and entered a fees and costs award in favor of CSG.
See Contractor's Sand and Gravel, Inc. v. Secretary of Labor,
18 F.M.S.H.R.C. 1820 (ALJ 1996). The Secretary appealed
the ALJ's award to the Federal Mine Safety and Health
Review Commission. On August 22, 1998, the Commission in
a 3-to-2 decision reversed the ALJ and vacated his award of
attorneys fees and expenses to CSG. See Secretary of Labor
v. Contractors Sand and Gravel, Inc., 20 F.M.S.H.R.C. 960
(1998). The present petition brings that decision of the
Commission before us for review.
II. Analysis
The EAJA provides, in pertinent part, that a "prevailing
party other than the United States" in "an adversary adjudi-
cation" is entitled to an award from the agency that conduct-
ed the adjudication of fees and expenses incurred in connec-
tion with the proceeding. 5 U.S.C. s 504(a)(1). CSG sought
and received an EAJA award from the ALJ. The Adminis-
tration did not and does not contest CSG's status as a
prevailing party, but both before the ALJ and the Commis-
sion and now before this court, resisted the award on the
basis of further language in section 504(a)(1) that conditions
the entitlement of the prevailing party by stating that the
award is to be made "unless the adjudicative officer of the
agency finds that the position of the agency was substantially
justified or that special circumstances make an award unjust."
Id. The Secretary argued and the Commission held that the
Administration's position was "substantially justified" within
the meaning of the EAJA. See Contractors, 20 F.M.S.H.R.C.
at 967. CSG's petition brings before us the Commission's
reversal of the ALJ's award. CSG argues that the Commis-
sion had no jurisdiction to review the award of the ALJ, and
further that, even if the Commission had jurisdiction, it erred
in reversing the ALJ's award. While we reject the petition-
er's jurisdictional argument, we agree that the Commission
erred on the merits, and therefore allow the petition for
review.
A. The Commission's Jurisdiction
Before reaching the merits of CSG's petition, we first
consider CSG's argument that the Commission did not have
jurisdiction to review the ALJ's determination that the Ad-
ministration's underlying conduct lacked substantial justifica-
tion. CSG argues that its view is compelled by the language
of 5 U.S.C. s 504(a)(1) to the effect that the Agency is to
enter an EAJA award in favor of the prevailing party in an
adversary adjudication "unless the adjudicative officer of the
agency finds that the position of the agency was substantially
justified." (emphasis added). CSG argues that this "plain
language" commits the substantial justification issue to the
ALJ and that the Commission was therefore without authori-
ty to review it. The respondents contend that the statute
clearly contemplates agency review of the adjudicative offi-
cer's decision. We agree.
As respondents point out, although the statute contains the
language recited by petitioner, that language does not compel
the finality that petitioner attaches to it. In fact, the statute
goes on to provide:
The decision of the adjudicative officer ... shall be made
part of the record containing the final decision of the
agency and shall include written findings and conclusions
and the reason or basis therefor. The decision of the
agency on the application for fees and other expenses
shall be the final administrative decision under this sec-
tion.
5 U.S.C. s 504(a)(3).
As the respondents argue, this language is far more consis-
tent with a congressional contemplation of an administrative
law judge decision subject to the normal agency review than
it is with an ALJ decision legislatively vested with administra-
tive finality. Concededly, it is true as petitioner argues that
the statute could literally encompass a model in which the
ALJ's decision would be final on the discrete question of
substantial justification, and would then become part of the
record upon which the final administrative decision designat-
ed in subsection (a)(3) would rest, but in which the other
elements of the fee award not committed to the ALJ would be
finally determined only by the highest agency decision maker.
However, the language is equally consistent with the model
forwarded by respondents in which the Commission not only
makes the final decision as to all other elements, but reviews
along with those elements the substantial justification finding
entered by the ALJ in the first instance.
Granted, we are not bound to defer to the agency's con-
struction. The rule of Chevron U.S.A., Inc. v. Natural
Resources Defense Council, 467 U.S. 837 (1984), does not
apply. This is a statute of general application and not one
committed to administration by the Commission or the Secre-
tary. We therefore make this choice between or among
possible alternatives as a classic question of law committed to
the court for decision, not the agency. See, e.g., Scheduled
Airlines Traffic Offices, Inc. v. Dep't of Defense, 87 F.3d 1356,
1361 (D.C. Cir. 1996). However, without deference, we find
the Commission's interpretation to be the more compelling on
the jurisdictional question. There is nothing extraordinary
about an administrative agency reviewing the findings of its
ALJ. Indeed, that is the normal procedure. (It would be so
extraordinary for a finding to be committed to an ALJ
without review that CSG has been able to offer no example.)
We think it unlikely that if Congress intended to adopt such
an extraordinary departure from the norm it would do so by
implication. We therefore agree with the Commission that 5
U.S.C. s 504(a)(3) commits to its review the decision of the
ALJ.
B. The Merits
The majority of the Commission in its 3-to-2 decision
reversing the ALJ's award of fees to CSG began by faulting
the approach of the ALJ in determining whether the Admin-
istration's position had been justified. According to the Com-
mission "the judge's failure to independently review the
Secretary's position in the EAJA proceeding and apply a
distinct analysis under the appropriate EAJA standard was
erroneous and in itself, precludes affirmance of the judge's
determination." Contractors, 20 F.M.S.H.R.C. at 968 (em-
phasis in original). The Commission in this criticism address-
es the ALJ's statement that " '[i]n the underlying proceeding,
I clearly indicated that the Secretary's position was unreason-
able.... I again find that the Secretary's legal theory was
not reasonable and that there was no reasonable connection
between the Secretary's legal theory and the undisputed
facts.' " Id. (quoting Contractor's, 18 F.M.S.H.R.C. at 1822
(emphasis added by the Commission)). We would state at the
outset that we are a bit baffled by the Commission's approach
to its review of the ALJ's decision. The language of the ALJ
italicized by the Commission demonstrates on its face that he
did precisely what the Commission suggested he had not
done. That is, he reviewed for the second time an Adminis-
tration position he had already found unreasonable and found
that it still was. As we have stated before, "[i]n some cases,
the standard of review on the merits is so close to the
reasonableness standard applicable to determining substantial
justification that a losing agency is unlikely to be able to show
that its position was substantially justified." F.J. Vollmer Co.
v. Magaw, 102 F.3d 591, 595 (D.C. Cir. 1996). In F.J.
Vollmer Co., an agency's application of its own regulation had
been held to be unreasonable. In the subsequent EAJA
review, a district judge concluded that the government sus-
tained its burden of establishing that its action had been
substantially justified. We reversed, suggesting that it would
be neither surprising nor erroneous that a judge's conclusion
at the second stage would be consistent with his conclusion at
the first. Just so here.
To say that the Commission erred in its approach to the
ALJ's decision under review, does not, of course, answer our
question as to whether it erred in the merits review before it
and now before us. That review is governed by a principle
stated in Cinciarelli v. Reagan, 729 F.2d 801 (D.C. Cir. 1984):
"Once a plaintiff has been shown to be a prevailing party, the
burden is on the government to show that its litigation
position was substantially justified on the law and the facts."
Id. at 806. The Commission divided that inquiry into its two
component parts and expressly held that "the Secretary's
position had a reasonable basis in law," Contractors, 20
F.M.S.H.R.C. at 969, and that "the Secretary's position had a
reasonable basis in fact," id. at 973.
The Commission first expressed the reasonable proposition
that "[w]e begin our analysis of whether the Secretary's
position was substantially justified by examining whether her
position had a reasonable basis in law." Id. at 969. Unfortu-
nately, the Commission's application of its approach was not
equal to the correctness of its statement. The Commission's
determination that the Secretary's position had a reasonable
basis in law is based entirely on an analysis which examines
the purpose of the regulations in terms of the overriding
objective of safety in the mine, and then goes on to conclude
that the Secretary, by presenting evidence that frame
grounding was not the safest way to ground equipment,
therefore had established a substantial justification in law.
This erroneous application echoes the fundamental error of
the MSHA's acts in the underlying controversy, and we might
add recreates the fundamental error about which we have
cautioned this and other agencies on prior occasions in other
contexts.
What the Secretary successfully defended before the Com-
mission and what we reject here is precisely the same sort of
arbitrary overreach we previously rejected in Secretary of
Labor v. FMSHRC, 111 F.3d 913 (D.C. Cir. 1997). In that
case, the Administration had sought to enforce a citation
against a mine operator for collections of trash outside the
active workings of a mine as violative of a regulatory scheme
which by its terms "forbid[ ] accumulations of combustible
materials in active workings." Id. at 918 (citing 30 C.F.R.
s 75.400). Nothing about the rules promulgated by the
Secretary forbade the outside accumulation by the regulated
mine. The Commission, acting far more lawfully than in the
case before us, rejected the Secretary's attempt to penalize
accumulations not violating the rules. Before the Commis-
sion and before us, the Secretary urged the dangerousness of
collections of trash outside active workings. Although we
reversed a portion of the Commission's decision on other
grounds, we upheld its rejection of the Secretary's argument
on this point saying "[i]f collections of trash outside active
workings can be both permissible and hazardous, the fault lies
neither with the Mine Safety Act nor with the Commission's
legal reasoning, but with the Secretary's ... regulation,"
which did not forbid the relevant collections. Id. at 918.
Just so here.
As the dissenting Commissioners pointed out, the ALJ
properly noted that "under the plain meaning of section
56.12025, the Secretary failed to establish that CSG violated
the regulation." Contractors, 20 F.M.S.H.R.C. at 979 (Riley
& Verheggen, Comm'rs, dissenting) (citing 18 F.M.S.H.R.C.
at 387-88). The regulation required that the equipment be
grounded. The Secretary offered no evidence--none whatso-
ever--that the motors in question were not in fact grounded
as required by the regulation. The regulatory definition of
grounding simply defines "electrical grounding" as "to con-
nect with the ground to make the earth part of the circuit."
30 C.F.R. s 56.2. The Administration not only did not prove
any failure to make the earth part of the circuit but offered
no evidence whatsoever on the subject and indeed did not
conduct any testing to determine whether CSG was in compli-
ance or not. CSG offered undisputed evidence that it was.
To excuse its noncompliance, the Administration does as it
did in the trash collection case we discussed above: that is, it
discusses the safety implications of the practice which it
purports to punish. This discussion would be well and good if
the MSHA were engaged in a rulemaking to outlaw frame
grounding or to require fourth-wire grounding. But, as the
dissenting Commissioners pointed out, in at least two of its
uninterrupted prior losses on this same controversy, Adminis-
trative Law Judges have advised the Secretary that " ' "[i]f
the Secretary believes frame grounding should be prohibited,
the Secretary should initiate appropriate rulemaking to
achieve this goal." ' " Contractors, 20 F.M.S.H.R.C. at 983
(Riley & Verheggen, Comm'rs, dissenting) (quoting Secretary
of Labor v. F. Palumbo Sand & Gravel, 19 F.M.S.H.R.C. at
1440, 1444 (ALJ 1997) (quoting Contractors, 18 F.M.S.H.R.C.
at 388)). The dissenting Commissioners agree. So do we.
Nonetheless, the Secretary has not. It is not substantially
justifiable for an agency to persistently prosecute citizens for
violating a regulation that does not exist.
To track again the dissenting Commissioners, we note that
while a " 'string of losses' " is not determinative, it " 'can be
indicative' that an agency's position lacks substantial justifica-
tion." Contractors, 20 F.M.S.H.R.C. at 983 (Riley & Verheg-
gen, Comm'rs, dissenting) (quoting Pierce v. Underwood, 487
U.S. 552, 569 (1988)). Here, as the ALJ noted, every time
the Secretary has presented the theory that the use of a
particular grounding method other than that preferred by the
Secretary is violative of the regulation, the responsible Ad-
ministrative Law Judge has considered that theory not rea-
sonable. See Secretary of Labor v. Tide Creek Rock, Inc., 18
F.M.S.H.R.C. 390, 396-97 (ALJ 1996); Secretary of Labor v.
Mulzer Crushed Stone Co., 3 F.M.S.H.R.C. 1238 (ALJ 1981);
McCormick Sand Corp. v. Secretary of Labor, 2
F.M.S.H.R.C. 21 (ALJ 1980). Again, if all of these ALJs are
unwilling to buy the Secretary's expansive theory that the
commendable goal of promulgating safety permits the Secre-
tary to prosecute activity which violates no existing rule, it is
time for the Secretary to repair to rulemaking, not to bring
one more unsupportable citation. The bringing of one more
is not substantially justified.
The Secretary's only other theory to sustain the Commis-
sion's conclusion of substantial justification is to advance the
proposition that the Secretary's interpretation of the ground-
ing rule as requiring certain types of grounding and outlaw-
ing others not mentioned anywhere in the rules is an inter-
pretation of longstanding. In support of this, neither the
Secretary nor the Commission majority have been able to
point to any interpretation at any time, yet they continue to
insist in the words of the citation served on petitioners, that
"[f]rame grounding has been forbidden for fifteen years."
The best support the Secretary can offer for this proposition
is the declaration of a single engineering employee of MSHA
who declared that in his tenure with the Administration the
Administration had never allowed the frames of mining equip-
ment to serve as equipment grounding conductors. It is not
at all clear how the Secretary or the Commission concludes
that the testimony of a witness as to what his agency will
allow determines the standard of law against which citizens
can be forced to defend. Be that as it may, even assuming
that his understanding constituted agency policy, this would
not create sufficient grounds for substantial justification. As
we stated in F.J. Vollmer Co., "we do not see how merely
applying an unreasonable statutory interpretation for several
years can transform it into a reasonable interpretation." 102
F.3d at 598. Even more, we do not see how grafting onto the
plain language of a regulation a prohibition neither stated nor
implied in that regulation can convert the enforcement of that
imaginary rule into a substantially justified governmental act.
We note only in passing that the Commission's assertion
that the Secretary's position had a reasonable basis in fact
need not delay us, as we have demonstrated in the discussion
of the law that the Secretary's position had no basis in fact.
The fact that CSG was employing frame grounding is irrele-
vant to substantial justification once it is established that the
use of that methodology is not a per se violation. The failure
of the Secretary to conduct testing, let alone offer evidence
that the testing demonstrated a violation of the real regula-
tion, finishes the possibility that some reasonable basis in fact
existed. Furthermore, having dispensed with the reasonable
justification on the basis of law, we need not demonstrate that
the Secretary's actions fail the substantial justification stan-
dard on other grounds as well. See Air Transport Ass'n of
Canada v. FAA, 156 F.3d 1329, 1332 (D.C. Cir. 1998) (per
curiam) (rejecting a government argument that a claimant
should be denied an EAJA award where the government's
approach "was substantially unjustified on only one of several
possible bases").
Like the ALJ and the dissenting Commissioners, we have
no occasion to consider whether the extraordinarily large
fines imposed were independently substantially justified, giv-
en the substantial unjustification of the underlying citations.
III. Conclusion
For the reasons set forth above, we reverse the decision of
the Commission, and order that the award determined by the
ALJ be restored to petitioner. We remand this case for
further proceedings to determine the amount of an award to
compensate petitioner for the costs of pursuing the petition
for review in this court.
So ordered.