UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


CONTR SAND GRAVEL

v.

MSHR


98-1480a

D.C. Cir. 2000


*	*	*


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.


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


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


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


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


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


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


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


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


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


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


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.