UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

In the Matter of: EMPIRE AIRLINES, INC. 

FAA Order No. 2012-10 

Docket No. CP09NM0009 

FDMS No. FAA-2009-0586 1 

Served: October II, 2012 

DECISION AND ORDER' 

Complainant Federal Aviation Administration and Respondent Empire Airlines 

have filed cross-appeals from the written initial decision of Administrative Law Judge 

("ALI") Richard C. Goodwin.3 After a hearing, 4 the ALI held that Respondent violated: 

(!) 49 C.F.R. §§ 175.30(a)(2) and 175.30(a)(3), prohibiting any person from accepting a 

hazardous material for air transpm~tation unless the aircraft operator ensures that the 

hazardous material is properly described and certified on a shipping paper and properly 

marked and labeled, and (2) 49 C.F.R. § 175.3, prohibiting any person from accepting for 

transportation or transporting by aircraft a hazardous material that is not prepared 

properly for shipment. The ALI also held that Respondent did not violate 49 C.F.R. 

1 Generally, materials filed in the FAA Hearing Docket (except for materials filed in 

security cases) are also available for viewing at http://www.regulations.gov. 14 C.F.R. 

§ 13.210(e)(1). 

2 The Administrator's civil penalty decisions, along with indexes of the decisions, the 

rules of practice, and other information, are available on the Internet at the following address: 

www.faa. gov/ about/ office_ org/headquarters _offices/ age/pol_ adjudication/ A GC4 00/Civil 

_Penalty/. See 14 C.F.R. § 13.210(e)(2). In addition, Thomson Reuters/West Publishing 

publishes Federal Aviation Decisions. Finally, the decisions are available through LEXIS 

(TRANS library) and WestLaw (FTRAN-FAA database). For additional information, see the 

Web site. 

3 The ALJ's written initial decision is attached. 

4 The hearing took place on October 26 and 27,2010, in Portland, Oregon. 
§ 175.33(c)(3), which requires an aircraft operator to have certain information, including 

the location of any hazardous cargo aboard an aircraft, readily available at the destination 

airport for the duration of the flight leg. 5 The ALJ rejected the $20,000 civil penalty 

sought by Complainant for the alleged violations of these four regulations, and instead 

assessed a $12,000 civil penalty for the violations of Sections 175.30(a)(2), 175.30(a)(3) 

and 175.3. 

As will be explained further in this decision, Respondent's appeal of the finding 

by the ALJ that it violated Sections 175.3, 175.30(a)(2) and 175.30(a)(3) is denied. 

Further, Complainant's appeal regarding the ALJ's holding that Respondent did not 

violate Section 175.33(c) and that the $12,000 civil penalty is inappropriate under agency 

guidance is granted. A $20,000 civil penalty is assessed. 

I. Background 

A. The Relationship between Empire and FedEx 

Empire is a regional cargo carrier that is certificated under 14 C.F.R. Part 119 and 

operates under 14 C.F.R. Parts 121 and 135. It has a contract with FedEx to serve as a 

supplemental or feeder airline for FedEx d/b/a FedEx Express. (Tr. 46, 133, 168.) 

Empire has sole operational control of its aircraft, which are owned by FedEx but are 

listed on Empire's operations specifications. 6 

To track hazardous cargo on its flights, Empire relies on FedEx's electronic 

5 These regulations and others relevant to this case are set forth in the Appendix. 

The alleged violations in this case took place on August 22, 2007. The applicable edition 

of the Code of Federal Regulations, unless otherwise indicated, is the October 1, 2006, edition, 

because the regulations were not revised again until October 1, 2007. 

6 The aircraft display the Fed Ex logo but are also required by 14 C.F.R. § 119.9(b) to 

display Empire's name as the operator of the aircraft. 

2 
automated manifesting system, referred to as AutoDG. Only FedEx and FedEx Express 

personnel may enter or update information in AutoDG (Tr. 146) because Empire 

employees do not have access to the FedEx computer mainframe. (Tr. 149, 175.) 

Empire relies upon FedEx to make information about hazardous materials cargo on 

Empire flights available at destination airports through AutoDG. If there is an emergency 

on an Empire flight, a FedEx Express employee at the destination airport can provide 

information regarding hazardous cargo to emergency responders by accessing the 

AutoDG system. (Tr. 146.) 

B. The FAA Inspection at Medford, Oregon • 

On August 22, 2007, two FAA inspectors conducted a random inspection of 

Respondent's inbound flights at Medford, Oregon. (Tr. 17.) They observed the arrival 

and unloading of Flights 8678-22 and 8677-22. (Tr. 26, 27, 47.) Both flights were 

aboard Cessna 208 aircraft. The inspectors obtained documents pertaining to these 

flights from FedEx Express station personnel in Medford. (Tr. 19, 79.) Information 

about these flights is presented in the chart below. 

Flight Aircraft Referred to Hazardous ... Number Hazard · ·.·· . . . 

numbers numbers by the AU material cargo of Class, Packing Group, . 

.. in the· 'boxes and . . decision as: Identification I . 

. ·. . · ·.· 

····· 

Number • .. .·.· ..... Flight N778FE "first flight" Potassium 5 Class 8, Corrosive 

8678-22 Hydroxide Material, Packing 

Solution Group II, UN 18147 

Flight N940FE "second Nexium HCP 2 Class 3, Flammable 

8677-22 flight" Anti-Bacterial Liquid, Packing 

Hand Group Ill, UN 11708 

Sanitizing Gel 

7 (Complainant's Exhibit 3 at 4.) 

8 (Tr. 56.) 

3 
II. Flight 8678-22 

A. Facts 

Respondent transported five boxes containing potassium hydroxide solution, a 

Class 8 Corrosive Material, from Portland, Oregon, to Medford, Oregon, aboard 

Flight 8678-22. FAA inspectors asked FedEx Express personnel in Medford to generate 

an Inbound DG Alert using the AutoDG electronic manifest system. The Alert indicated 

that the boxes containing hazardous materials were on the aircraft's main deck (also 

referred to as "position I"), and that there were no hazardous materials in the pods. 

(Complainant's Exhibit 2; Tr. 23-25, 27.) The Alert was consistent with the AutoDG 

paperwork that both Empire's pilot and FedEx Express's DG specialist signed, which 

showed that all of the dangerous goods (hazardous materials) were located at "POS !," 

the main cabin of the aircraft. The inspectors, however, saw F edEx Express personnel 

unload the boxes containing hazardous materials from one of the pods. (Complainant's 

Exhibit 4; Tr. 27.) 

Although Respondent's pilot signed the Auto DO paperwork indicating that the 

dangerous goods were all in the main cabin, prior to departure, he asked FedEx Express's 

DG specialist to move the boxes to Pod C. (Tr. 163.) The specialist complied, and both 

the specialist and the pilot signed the Feeder Aircraft Load Control Sheet, with 

handwritten entries showing that the boxes of corrosives were loaded into Pod C. 

However, the specialist did not make any handwritten corrections to the AutoDG 

paperwork and did not update the AutoDG system to reflect the change. (Tr. 163, 178, 

179, 192; Complainant's Exhibit II at 2.) 

4 
During the flight, Respondent's pilot carried a copy of the Feeder Aircraft Load 

Control Sheet in which he certified that he would also carry a copy ofthe aircraft 

manifest. Neither the Feeder Aircraft Load Control sheet nor a corrected AutoDG Alert 

were available at the destination airport during the flight. Thus, no one at the destination 

airport had the information that the boxes of corrosive materials were loaded into Pod C. 

Respondent's General Operations Manual ("GOM") provided at the time as 

follows: 

If there is AutoDG paperwork and a last minute DG package shows up that is not 

listed it can be added to the Load Control Sheet with a pen entry. If the load 

position of the DG package changes from what is listed on the paperwork, the DG 

Specialist can correct and initial the change with a pen. 

(Complainant's Exhibit 11 at 42.) 

B. The ALJ's Initial Decision 

Complainant alleged that Respondent violated Section 175.33(c)(3), which 

provided that the aircraft operator must have certain required information readily 

accessible at the intended airport of arrival. The ALJ, however, wrote that Respondent 

was entitled to rely on information provided by another entity when reasonable. The ALJ 

relied on Section 171.2(f), which provided in pertinent part as follows: 

Each carrier who transports a hazardous material in commerce may rely 

on information provided by the offeror of the hazardous material or a prior 

carrier, unless the carrier knows, or a reasonable person, acting in the 

circumstances and exercising reasonable care, would have knowledge that 

the information provided by the offeror or prior carrier is incorrect. 

The ALJ wrote that it was reasonable for Respondent to assume that FedEx Express 

personnel had updated the AutoDG system to reflect the location change. (Initial 

Decision at 4.) 

5 
C. Appeal and Analysis Regarding Violations 

On appeal, Complainant argues that the ALJ erred in finding that Respondent did 

not violate Section 175.33(c)(3). Complainant argues that Respondent is responsible for 

complying with Section 175.33(c)(3), independently ofFedEx Express. Complainant 

also argues that the ALJ misapplied Section 171.2(f) in finding that Respondent did not 

violate Section 175.33(c)(3). 

Section 175.33(c)(3) places the onus on the aircraft operator to have the 

required information readily accessible at the intended airport of arrival. The 

regulation states that it is the aircrafi operator that must do so. 

Section 171.2(f) does not apply because it pertains only to an air carrier's 

reliance on information, such as that in the shipping papers. In this case, 

Respondent did not rely upon information provided by FedEx, but instead, relied 

upon FedEx Express's expected completion of an action- i.e., updating the 

AutoDG system. 

Under the Federal hazardous materials transportation law, only a person who 

"knowingly" violates the Hazardous Materials Regulations ("HMR")' is subject to a civil 

penalty. 49 U.S.C. § 5123(a)(l). This law provides that: 

I 

A person acts knowingly when (A) the person has actual knowledge of the 

facts giving rise to the violation; or (B) a reasonable person acting in the 

circumstances and exercising reasonable care would have that knowledge. 

Although Respondent did not have actual knowledge that the AutoDG system had 

not been updated to show that the boxes had been moved to Pod C, a reasonable person 

acting in the circumstances and exercising reasonable care would have realized that there 

'Subchapter C of Title 49 of the Code of Federal Regulations, entitled "Hazardous 

Materials Regulations," includes 49 C.P.R. Parts 171-180 (2006). 

6 
was a problem. Respondent's pilot was presented with and signed conflicting documents 

-the Feeder Aircraft Load Control sheet, which indicated that the corrosives were in Pod 

C (Complainant's Exhibit 3-1 ), and the Aircraft DG Position Summary and Aircraft DG 

Manifest (Complainant's Exhibit 3 at 2-5), which indicated that the corrosives were on 

the aircraft's main deck (also referred to as "position 1"- Tr. 23). Respondent's GOM 

required that if the load position of the hazardous materials changes, then the DG 

Specialist is to correct and initial the change with a pen, but no such corrections were 

made on the Aircraft DG Manifest. 10 (Complainant's Exhibit II at 42.) Respondent 

failed to follow the procedures in its own FAA-approved GOM. Even though the 

information in the documents conflicted, Respondent took no action to reconcile the 

discrepancy regarding the load location. Hence, Respondent failed to exercise reasonable 

care. 

Consequently, the ALJ's d~termination that Respondent was not liable for a 

violation of Section 17 5.3 3( c )(3) arising from the unavailability at the destination airport 

of accurate information regarding the location of five boxes of a Class 8 Corrosive 

material on Flight 8678-22 is reversed. 

10 Respondent's Director of Quality Assurance, Richard Mills, testified at the hearing that he 

consulted with the Director of Operations, who was the immediate supervisor of the pilots and 

who interviewed the pilots of Flight 8678-22 after this incident. Mills testified that the Director 

of Operations and he believed that the DG specialist had made an appropriate "pen and paper 

change of the Auto-DG," which was an acceptable practice under the GOM at the time. 

(Tr. 179.) He testified that "the expectation" was that the AutoDG specialist would enter the 

information regarding the actual location ofthe corrosives in the system. (Tr. 179 .) However, . . the AutoDG printout in the record which the pilot had with him during the flight (Complainant's 

Exhibit 3), was signed by the pilot and the DG specialist, but does not contain any handwritten 

corrections. 

7 
III. Flight 8677-22 

A. Facts 

On August 21, 2007, AstraZeneca offered two fiberboard boxes to FedEx Express 

' 

in Baltimore, Maryland. FedEx Express transported the boxes by air to Memphis, 

Tennessee, and then to Portland, Oregon. On August 22, 2007, FedEx Express ramp 

agents removed the boxes from the FedEx Express aircraft and loaded them on board 

Flight 8677-22. (Complainant's Exhibit 7-) Respondent's pilot supervised the loading, 

which was performed by FedEx Express personnel. Flight 8677-22 flew to Medford, 

Oregon, where FAA inspectors observed the unloading of the aircraft. 

The inspectors had a copy of the DG Alert generated by AutoDG for Flight 8677-

22. This Alert indicated that there were no hazardous materials on board Flight 8677-22. 

(Tr. 41-42; Complainant's Exhibit 5.) When the boxes shipped by AstraZeneca were 

unloaded, however, the FAA inspectors noticed that the boxes were marked "Consumer 

Commodity ORM-D" [Other Regulated Material- Domestic]," indicating that the boxes 

contained a consumer commodity of hazardous material presenting a limited hazard in 

transportation. A photograph of the conveyor belt shows that the sides of the boxes with 

the ORM-D markings were visible during unloading. (Complainant's Exhibit 8 at 2.) 

There were ORM-D markings on two sides of the boxes. On one side of the boxes, the 

markings were next to the shipping labels. (Tr. 84.) 

The FedEx Express manager opened the boxes and found in each box twenty-four 

354-ml plastic bottles containing Nexium HCP Anti-Bacterial Hand Sanitizing Gel. 

(Complainant's Exhibit 8, photographs 2- 4; Complainant's Exhibit 9 at I; Tr. 83.) The 

11 Respondent's General Operations Manual ("GOM") indicates that "ORM-D" is a label 

(Complainant's Exhibit II at II), but it is actually a marking. (Tr. 63-64.) 

8 
gel has a flash point of74 degrees Fahrenheit, which indicates that it is a flammable 

liquid. (Tr. 58.) 

The fiberboard boxes containing the hazardous materials should have been 

accompanied by shipping papers but were not. (Tr. 50.) In addition, the boxes were not 

marked properly. ORM-D is not a valid marking for hazardous materials shipped by air. 

(Tr. 151.) Under Section 172.316(a)(l), the proper marking would have been ORM-DAIR, if the shipment had been properly prepared for air transportation in accordance with 

Section 173.27. (Tr. 55.) These packages did not qualify as ORM-D-AIR because the 

screw-type bottle caps on each bottle were not secured in accordance with 

Section 173.27(d). Hence, as packaged, the boxes could not be transported as ORM-DAIR or ORM-D, and should have been handled as a Class 3 Flammable Liquid. 

Respondent's GOM states that FedEx Express ramp personnel will load and 

unload hazardous materials and will separate hazardous materials from other freight "so 

[Respondent's] crewmember may accomplish the pre-load inspection." (Complainant's 

Exhibit 11 at 41.) The manual also provides that " [a] crewmember must supervise the 

loading ofDG." (!d.) 

Respondent asserted that its pilot did not notice the ORM-D markings on the 

boxes while he was overseeing the loading process in Portland, even though the markings 

were clearly visible in the photograph of the unloading of these boxes in Medford. 

(Complainant's Exhibit 8 at 2.) According to Respondent: 

The ORM imprint on either end of each box was apparently the 

only indication that they might contain hazardous materials. When 

int<;rviewed, our pilot said that he supervised the loading as required but 

did' not see the ORM imprint. He explained that during the loading 

process, the long dimension of the boxes would run the same direction as 

the belt loader and the imprint on the box ends would be obscured from 

9 
his view. He said that if he had seen the imprint, he would have pulled the 

boxes from the loader and investigated prior to loading them. 

(Complainant's Exhibit II at 2.) 

B. The ALJ's Initial Decision 

Respondent argued that it should not be held liable for the alleged violations of 

Sections 175.3, 175.30(a)(2), and 175.30(a)(3) because FedEx personnel controlled 

acceptance and loading. The ALJ rejected this argument, finding that Respondent "has a 

full and independent obligation to comply with the HMRs . . . [due to] its status as an 

aircraft operator and as the carrier of such materials." (Initial Decision at 6-7.) The ALJ 

stated that the HMR require aircraft operators to ensure that hazardous materials are 

authorized for transportation by air and are described and marked properly. He noted that 

Respondent's GOM: 

• sets forth Respondent's responsibility for compliance with the HMR; 

• directs Respondent's personnel to verify that the outside of packages are 

marked properly; 

• warns that packages may not be loaded if the shipment does not meet 

acceptance and packaging requirements; and 

• states that noncompliant packages must be rejected. 

The ALJ held that Respondent cannot delegate its responsibilities regarding hazardous 

materials. (Initial Decision at 7.) 

The ALJ found further that the FedEx Express personnel who loaded the flight 

were Respondent's agents because Respondent's GOM provides that Respondent's 

crewmember must supervise the loading of hazardous materials. The ALJ wrote: 

That the boxes were loaded at ari angle which made it difficult to observe the 

entire outside of the boxes, and that the existing documentation failed to alert the 

pilot to the hazardous materials, made the pilot's duty of scrutiny trickier, to be 

sure; but these circumstances do not absolve Empire of liability for the resulting 

violations. 

10 
(Initial Decision at 7.) The ALJ held that Complainant proved that Respondent had 

violated Sections 175.3, 175.30(a)(2) and 175.30(a)(3). 

Regarding the civil penalty, the ALJ assessed $12,000, which was $3,000 for each 

of the four violations he found (shipping paper and marking violations involving two 

packages). The ALJ regarded lack of shipping papers and Respondent's reliance on 

incorrect information as mitigating factors. 

C. Appeal and Analysis Regarding Violations 

On appeal, Respondent argues that the ALJ erred in finding that it violated 

Sections 175.3, 175.30(a)(2), and 175.30(a)(3). Respondent argues that FedEx Express 

was its independent contractor, not its agent, because Respondent did not exercise day-today control over FedEx Express's operations. 12 Respondent contends that it should not 

be held liable for an independent contractor's actions. Further, Respondent argues, there 

was no paperwork indicating the presence of hazardous materials, and the absence of 

proper shipping papers constituted an implicit representation by FedEx Express that there 

was no hazardous material on the flight. Respondent argues that it reasonably relied 

upon this implicit representation. 

12 According to the Restatement (Third) of Agency§ 1.01 (2006): 

Agency is the fiduciary relationship that arises when one person (a "principal") 

manifests assent to another person (an "agent") that the agent shall act on the 

principal's behalf and subject to the principal's control, and the agent manifests 

assent or otherwise consents so to act. 

If a person has the right to control only "the result of the work [by another person], and 

not the means by which it is accomplished. an independent contractor relationship exists." Aero 

Continente, S.A., FAA Order No. 2003-8 at 16 (September 12, 2003), quoting In re Coupon 

Clearing Service, Inc., 113 F.3d 1091, 1099 (91

h Cir. 1997). 

\ 

11 
In response, Complainant argues that Respondent may not delegate its 

responsibility under Sections 175.30(a)(2) and (3) to ensure that shipments of hazardous 

materials are described properly on a shipping paper and marked in accordance with the 

HMR. Complainant argues that "the arrangement between [Respondent] and FedEx . I 

regarding the loading of hazardous materials aboard Respondent's aircraft resembled an 

agency relationship" because Respondent could not contract away its duty to ensure 

compliance with the HMR. (Reply Brief at 25-26.) Complainant argues further that the 

flammable materials were not a hidden shipment. Therefore, Complainant urges, the 

Administrator should reject Respondent's argument that it committed no violations 

regarding this flight. 

It is undisputed that F edEx Express accepted the non-conforming packages on 

Respondent's behalf and loaded them on board Flight 8677-22. At common law, a 

principal generally is not responsible for the acts or omissions of its independent 

contractors. Federal Express Corporation, FAA Order No. 2002-20 at 6 (August 5, 

2002). But the common law is not controlling here. The regulations at issue do not 

differentiate between agents and independent contractors. 

Section 175.3 prohibits the transportation aboard an aircraft of any hazardous 

material that is not prepared properly under the HMR. There is no question that 

Respondent transported these boxes and that these boxes were not properly prepared for 

shipment under the HMR because: (1) the boxes were unaccompanied by shipping 

papers; (2) the boxes were not marked properly; and (3) the bottle caps on the bottles in 

each box were not secured. 

Sections 175.30(a)(2) and (3) stated: 

12 
(a) No person may accept a hazardous material for transportation 

aboard an aircraft unless the aircraft operator ensures the hazardous 

material is: 

(2) Described and certified on a shipping paper ... in accordance 

with part 172 of this subchapter ... ; 

(3) Marked and labeled in accordance with subparts D and E of 

part 172 .... 

(Emphasis added.) The word "ensure" in Section 175.30(a) indicates that the aircraft 

operator may not delegate its responsibility to comply with this regulation. 

Although Section 175.30(a) states that no hazardous materials may be accepted 

unless the aircraft operator ensures compliance with the HMR, the aircraft operator's 

responsibility is not absolute. Under the Federal hazardous materials transportation law, 

a person is subject to a civil penalty for "knowingly" violating a provision of the HMR. 

As stated above, the statute provides that "[a] person acts knowingly when: (A) the 

person has actual knowledge of the facts giving rise to the violation; or (B) a reasonable 

person acting in the circumstances and exercising reasonable care would have that 

knowledge." 49 U.S. C. § 5123(a)(l). Also as stated above, Section 171.2(f) provided as 

follows: 

Each carrier who transports a hazardous material in commerce may rely on 

information provided by the offeror of the hazardous material or a prior carrier, 

unless the carrier knows or a reasonable person, acting in the circumstances and 

exercising reasonable care, would have knowledge that the information provided 

by the offeror or prior carrier is incorrect. 

As explained in the preamble to the amendments to Section 175.30 in 2006, "[t]o ignore 

readily apparent facts indicating ... [that] a shipment actually contains a hazardous 

material governed by the HMR despite the fact it may not be properly marked, labeled, 

placarded, or described on a shipping paper as containing a hazardous material, would 

13 
not represent reasonable care." 71 Fed. Reg. 14586, 14592 (March 22, 2006). 

Respondent was responsible for the actions ofFedEx Express because the boxes had 

hazardous materials markings that should have put Respondent on notice that the 

shipment was not prepared in accordance with the HMR. 

Respondent argues that this case is like Federal Express Corporation, FAA Order 

No. 2002-20 (August 5, 2002), in which the Administrator held that Federal Express was 

not responsible for its independent contractor's actions. In that case, Federal Express's 

independent contractor, Scharff International Courier and Cargo, S.A., ("Scharff') 

provided ground courier services in Peru. Scharff picked up a box of infectious bacteria 

from an individual shipper, put the box and its shipping papers in a courier bag, and 

delivered the bag to American Airlines for air transportation to Miami. The package 

inside the courier bag constituted a hidden shipment during the American Airlines 

flight. 13 When the courier bag was opened in Miami, the package of infectious bacteria 

was discovered. The ALJ held that Federal Express could not delegate its responsibilities 

to Scharff because air carriers must perform their services with the highest degree of 

safety in the public interest under 49 U.S.C. §§ 44701(d) and 44702(d). On review, the 

Administrator held that Federal Express had not served as an air carrier and, therefore, 

this statutory duty placed on air carriers did not apply to Federal Express. The 

Administrator also held that Federal Express was not responsible for Scharffs improper 

offer or acceptance of hazardous materials in air transportation because Scharff was 

Federal Express's independent contractor. The key difference between the Federal 

Express case and the case at bar is that Empire, as the aircraft operator, transported the 

13 The FAA alleged that Federal Express violated Sections 171.2(a), 172.200(a), 

172.202(a), 172.204(a), 172.204(c)(l), 172.204( c)(3), 172.406(t), 172.600(c), 172.604(a), 

173 .I (b), and 175.30(a)(2) (1997) as a result of Scharff's actions. 

14 
boxes of hand gel from Portland to Medford aboard an Empire flight and failed to ensure 

that the boxes were marked and shipping papers were prepared in accordance with the 

HMR. In other words, Empire's violations of Sections l75.30(a)(2) and (3) and 175.3 

arose from its own actions, not the actions of its independent contractor, Federal Express. 

Under the statute and the regulations, Respondent has a non-delegable duty to bar 

the transportation by air of goods that it knows or should reasonably know do not 

conform to the HMR. How Respondent chooses to meet that obligation is up to 

Respondent, regardless of whether the obligation is met by Respondent's employees, its 

contractor's employees, an agent's employees, or some combination thereof. 

For the foregoing reasons, this decision affirms the ALI's findings that Empire 

violated Sections 175.3, 175.30(a)(2), and l75.30(a)(3) concerning the two boxes of hand 

sanitizing gel marked Consumer Commodity ORM-D aboard Flight 8677-22. 

IV. Sancti~n 

On appeal, Complainant argues that the $12,000 civil penalty assessed by the ALI 

is too low and that the appropriate amount is $20,000, as it sought in the complaint. 

Respondent argues in response that the ALJ's decision to assess a $12,000 civil penalty is 

supported by substantial evidence and is consistent with applicable law, precedent and 

policy. 

Complainant bears the burden of proving, by a preponderance of the evidence, the 

appropriateness of the amount of the civil penalty it seeks. Phillips Building Supply, 

FAA Order No. 2000-20 at 4 (August ll, 2000), citing 14 C.F.R. § l3.224(a) (stating that 

"[ e ]xcept in the case of an affirmative defense, the burden of proof is on the agency"). In 

determining the amount of a civil penalty, the Federal hazardous materials transportation 

15 
law requires consideration of: 

(1) the nature, circumstances, extent, and gravity of the violation; 

(2) with respect to the violator, the degree of culpability, any history of 

prior violations, the ability to pay, and any effect on the ability to 

continue to do business; and 

(3) other matters that justice requires. 

49 U.S.C. § 5123(c). These considerations are factored into the FAA's penalty 

guidelines for hazardous materials cases, which are located in Compliance and 

Enforcement Program, FAA Order No. 2150.3A, Change 26, Appendix 6 at 2 (Policy on 

Enforcement of Hazardous Materials Regulations: Penalty Guidelines) (Aprill4, 1999). 14 

The purpose of the penalty guidelines is to "provide agency personnel with a systematic 

way to evaluate a case and arrive at an appropriate penalty, considering all the relevant 

statutory criteria including any mitigating and aggravating circumstances." (FAA Order 

No. 2150.3A, Change 26, Appendix 6 at 3, Complainant's Exhibit 12 at 2, 64 Fed. Reg. 

at 19444.) 

The penalty guidelines "provide guidance to agency personnel in the exercise of 

the FAA's prosecutorial discretion in enforcement cases concerning transportation of 

hazardous material by air." (FAA Order No. 2150.3A, Change 26, Appendix 6 at 3, 

Complainant's Exhibit 12 at 2, 64 Fed. Reg. at 19444.) Although the ALJs are not 

agency personnel, "if an ALJ assesses a civil penalty that is not consistent with agency 

sanction policy, the Administrator on appeal may reverse the ALJ." Folsom's Air 

Service, Inc., FAA Order No. 2008-11 at 14 (November 6, 2008); Northwest Airlines, 

14 The FAA published these guidelines in the Federal Register as "Federal Aviation 

Administration Policy on Enforcement of the Hazardous Materials Regulations: Penalty 

Guidelines." (Complainant's Exhibit 12 at I; 64 Fed. Reg. 19443 (April21, 1999).) The FAA 

has since canceled FAA Order No. 2150.3A, replacing it with FAA Order No. 2150.3B, but FAA 

Order No. 2150.3A applies in this case because it was in effect at the time of the violations. 

16 
Inc., FAA Order No. 1990-37 at 8-9 (November 7, 1990); FAA Order No. 2150.3B, 

Appendix C, ~~ 2, 8. 

The penalty guidance requires: (I) weighing the case by answering a list of 

questions to arrive at a weight of Minimum, Moderate, or Maximum; (2) using the Matrix 

to find the appropriate sanction amount range; and (3) considering any other statutory 

factors, such as corrective action or financial hardship. !d. at~ 8. 

It is important to note that the penalty guidelines state that "determination of 

where the sanction lies within the Matrix is not the result of a mathematical 

computation," but instead "[e]valuation of the case is based on the totality of the facts and 

circumstances." (FAA Order No. 2150.3A, Change 26, Appendix 6 at 3; Complainant's 

Exhibit 12 at 2; 64 Fed. Reg. at 19.444.) See also Stebbins Aviation, Inc., FAA Order No. 

2006-3 at 5 (February 7, 2006) (stating that "it is inappropriate to take a mathematical, 

formulaic approach of simply multiplying the number of violations by a set dollar 

amount"). 

Regarding Flight 8678-22, Respondent transported five boxes containing 

potassium hydroxide solution, a Class 8 Corrosive Material in Packing Group II. 

(Complainant's Exhibit 3 at 4.) The penalty guidelines state that Class 8 Corrosive 

Materials in Packing Group II fall within Risk Category B, which suggests a Moderate 

weight. (FAA Order No. 2150.3A, Change 26, Appendix 6 at 6, 18 Figure 2 "Risk 

Categories"; Complainant's Exhibit 12 at 7-8, Figure 2 "Risk Categories"; 64 Fed. Reg. 

at 19445, 19449-19450, Figure 2 "Risk Categories.") Category B materials are: 

materials that may not pose an immediate threat to the safety of a flight, 

but can cause death or injury to persons due to unintended releases in 

aircraft cabin areas, and potential damage to aircraft structures over a 

longer period of time due to undiscovered releases on aircraft structural 

17 
components. 

(FAA Order No. 2150.3A, Change 26, Appendix 6 at 18; Complainant's Exhibit 12 at 7, 

Figure 2 "Risk Categories"; 64 Fed. Reg. at 19449, Figure 2 "Risk Categories".) 

The penalty guidelines also state that where there are multiple packages in a 

shipment- and here there were five- a Moderate or Maximum weight should be 

considered. (FAA Order No. 2150.3A, Change 26, Appendix 6 at 6-7; Complainant's 

Exhibit 12 at 3; 64 Fed. Reg. at I 9445 .) The guidelines state that if someone other than 

Respondent prepared the shipment for transportation, which was the case here, consider a 

Minimum to Moderate weight. (FAA Order No. 2 I 50.3A, Change 26, Appendix 6 at 8; 

Complainant's Exhibit 12 at 3; 64 Fed. Reg. at I 9445.) 15 The guidelines also allow for 

consideration of aggravating and mitigating circumstances that are not routinely seen, 

recognizing that some cases present unique scenarios. (FAA Order No. 2 I 50.3A, 

Appendix 6 at 9.) 

. \ 

The assignment of a Minimum final aggregate weight is appropriate for the Flight 

8678-22 violation due to FedEx Express's role. Although Respondent is responsible for 

the violation of Section 175.33(c)(3 ), Respondent's degree of responsibility was reduced 

by FedEx Express's failure to follow the usual procedures and to enter information about 

the change in location of the boxes of potassium hydroxide into the AutoDG system. 

15The guidelines also ask whether the packages exceeded the authorized quantity 

limitation by a significant amount, whether the shipment caused damage to persons or property or 

interfered with commerce, whether the violator was the manufacturer of the hazardous materials, 

and whether the violator has a history of previous HMR violations. (FAA Order No. 2150.3A, 

Change 26, Appendix 6 at 6-8; Complainant's Exhibit 12 at 3-4; 64 Fed. Reg. at 19445-19446.) 

In this case, all of these questions are answered in the negative. The guidelines indicate that 

questions receiving a negative response do not affect the weighting ofthe case- that is, these 

matters are not mitigating. (FAA Order No. 2150.3A, Change 26, Appendix 6 at 5; 

Complainant's Exhibit 12 at 3; 64 Fed. Reg. at 19445.) 

18 
This factor outweighs the other factors previously discussed that would indicate a 

Moderate or even a Maximum final aggregate weight in this case. 

The Matrix recommends a range of $5,000 to $15,000 civil penalty for "Other 

Part 175 violations" committed by a Group II air carrier like Respondent. 16 Given that 

the final aggregate weight of the violation of Section 175.33 is Minimum, a civil penalty 

of $6,000 would be appropriate. 

As for Flight 8677-22, the boxes marked ORM-D did not meet all the 

requirements in Section 173.27 to be designated as Consumer Commodity ORM-D-AIR. 

(Tr. 55.) The boxes did not meet the requirement in Section 173.27(d) that the screwtype bottle caps inside be secured to prevent the closure from loosening due to vibration 

or substantial change in temperature. Because the contents of the boxes could not be 

reclassified as Consumer Commodity ORM-D, they were Class 3 Flammable Liquids and 

were in Packing Group III. (Tr. 56.) Class 3 Flammable Liquids in Packing Group III 

fall within Risk Category B (Moderate weight). (Tr. 71; FAA Order No. 2150.3A, 

Change 26, Appendix 6 at 18 "Risk Categories"; Complainant's Exhibit 12 at 7-8, Figure 

2 "Risk Categories"; 64 Fed. Reg. at 19445, 19449-19450, Figure 2 "Risk Categories.") 

The penalty guidelines also state that where there are multiple packages in a 

shipment- here there were two- a Moderate or Maximum weight should be considered. 

(FAA Order No. 2150.3A, Change 26, Appendix 6 at 6-7; Complainant's Exhibit 12 at 3; 

64 Fed. Reg. at 19445.) If someone other than the respondent prepared the shipment for 

transportation, which was the case here, a Minimum to Moderate weight should be 

16 Group II aircraft operators consist of "air carriers and other aircraft operators that hold 

Part 121 certificates or have 50 or more pilots or operate 25 or more aircraft, with annual 

operating revenue of less than $100,000,000." (FAA Order No. 2150.3A, Change 26, Appendix 

6 at 15; Complainant's Exhibit 12 at 6; 64 Fed. Reg. at 19448.) 

19 
considered under the guidelines. (FAA Order No. 2150.3A, Change 26, Appendix 6 at 8; 

Complainant's Exhibit 12 at 3; 64 Fed. Reg. at l9445f 

Other factors affect the weighting of the case. First, Respondent relied on the DG 

Alert generated by AutoDG for Flight 8677-22, which indicated that there were no 

hazardous materials on board. Further, there were no shipping papers advising of the 

presence of hazardous materials. And finally, the penalty guidelines state that a reshipper 

of hazardous materials (like Respondent) "is gene~ally considered to have a lesser degree 

of culpability [than the original shipper] for compliance of the package received." (FAA 

Order No. 2150.3A, Change 26, Appendix 6 at 8.) While these factors do not relieve 

Respondent of liability altogether, particularly because there were ORM-D markings on 

the boxes that should have alerted Respondent to the hazardous nature ofthe boxes' 

content, these factors are properly considered in determining the sanction amount. 

In light of these factors, the final aggregate weight for the two Flight 8677-22 

violations (absence of shipping papers and failure to mark properly) is Minimum. The 

next step is to use the Matrix, which sets forth specific penalty ranges. The range under 

the guidelines for violations of Sections 175.30(a)(2) and (3) is $5,000 to $27,500 per 

violation for Class 3 Flammable Liquids. (Tr. 74; 'FAA Order No. 2150.3A, Change 26, 

Appendix 6 at 15; Complainant's Exhibit 12 at 6, Figure I; 64 Fed. Reg. at 19448.) A a 

17 As discussed above, the guidelines also ask whether the packages exceeded the 

authorized quantity limitation by a significant amount, whether the shipment caused damage to 

persons or property or interfered with commerce, whether the violator was the manufacturer of 

the hazardous materials, and whether the violator has a history of previous HMR violations. 

(FAA Order No. 2150.3A, Change 26, Appendix 6 at 6-8; Complainant's Exhibit 12 at 3-4; 64 

Fed. Reg. at 19445-19446.) All of these questions are answered in the negative regarding Flight 

8677-22, As stated above, the guidelines indicate that questions receiving a negative response do 

not affect the weighting of the case. (FAA Order No. 2150.3A, Change 26, Appendix 6 at 5; 

Complainant's Exhibit 12 at 3; 64 Fed. Reg. at 19445.) Respondent has not argued that the 

mitigating factors of corrective action or financial hardship apply. 

20 
civil penalty of$7,500 for each ofthe two violations (absence of shipping papers and 

failure to mark properly) would be appropriate. 

To summarize, for Flight 8678-22, a civil penalty of $6,000 is appropriate. For 

Flight 8677-22, a civil penalty of$7,500 for each of the two violations is appropriate. 

The total is $21,000. However, the civil penalty cannot be higher than the $20,000 

sought in the complaint. Mole-Master Services Corp., FAA Order No. 2010-11 at 12 

(June 16, 2010) (citing 14 C.F.R. § 13.16(j), which provides that "the FAA 

decisionmaker ... shall not assess a civil penalty in an amount greater than that sought in 

the complaint"). Therefore, a civil penalty of $20,000 is assessed. Based on the 

18 This order shall be considered an order assessing civil penalty unless Respondent files 

a petition for review within 60 days of service of this decision with the U.S. Court of Appeals for 

the District of Columbia Circuit or the U.S. court of appeals for the circuit in which Respondent 

resides or has its principal place of business. 14 C.P.R.§§ 13.16(d)(4), 13.233(j)(2), 13.235 

(20 12). See 71 Fed. Reg. 70460 (December 5, 2006) (regarding petitions for review of final 

agency decisions in civil penalty cases). 

21 
APPENDIX 

Section 171.2(f) 19 provided: 

No person may transport a hazardous material in commerce unless the 

hazardous material is transported in accordance with applicable 

requirements of this subchapter, or an exemption or special permit, 

approval, or registration issued under this subchapter or subchapter A of 

this chapter. Each carrier who transports a hazardous material in 

commerce may rely on information provided by the offeror of the 

hazardous material or a prior carrier, unless the carrier knows or, a 

reasonable person, acting in the circumstances and exercising reasonable 

care, would have knowledge that the information provided by the offeror 

or prior carrier is incorrect. 

Section 172.316(a)(l) provided: 

The designation for ORM-D must be: (I) ORM-D-AIR for an ORM-D 

that is prepared for air shipment and packaged in accordance with the 

provisions of§ 173.27 ofthis subchapter. 

Section 173.27(d) provided: 

Stoppers, corks or other such friction-type closures must be held securely, 

tightly and effectively in place by positive means. Each screw-type closure 

on any packaging must be secured to prev6nt closure from loosening due 

to vibration or substantial change in temperature. 

Section 173.144 provided: 

"ORM-D material" means a material such as a consumer commodity, 

which although otherwise subject to the regulations of this subchapter, 

presents a limited hazard during transportation due to its form, quantity, 

and packaging. It must be a material for which exceptions are provided in 

the§ 172.101 table. Each ORM-D material and category ofORM-D 

material is listed in the § 172.101 table. 

Section 175.l(b)(l) provided: 

This part applies to the offering, acceptance, and transportation of 

hazardous materials in commerce by aircraft to, from, or within the United 

States, and to any aircraft of United States registry anywhere in air 

commerce. This subchapter applies to any person who performs, attempts 

to perform, or is required to perform any function subject to this 

19 All citations are to the October I, 2006, edition of Title 49 of the Code of Federal 

Regulations. The regulations at issue were not revised again until October I, 2007. 

22 
subchapter, including--

(1) Air carriers, indirect air carriers, and freight forwarders and their flight 

and non-flight employees, agents, subsidiary and contract personnel 

(including cargo, passenger and baggage acceptance, handling, loading 

and unloading personnel); .... 

Section 175.3 provided: 

A hazardous material that is not prepared for shipment in accordance with 

this subchapter may not be ... accepted for transportation or transported 

aboard an aircraft. 

Section 175.30(a)(2) provided: 

No person may accept a hazardous material for transportation aboard an 

aircraft unless the aircraft operator ensures the hazardous material is ... (2) 

[ d]escribed and certified on a shipping paper ... in accordance with part 

172 of this subchapter .... 

Section 175.30(a)(3) provided: 

No person may accept a hazardous material for transportation aboard an 

aircraft unless the aircraft operator ensures the hazardous material is ... (3) 

[m]arked and labeled in accordance with subparts D and E of part 172[.] 

Section 175.33(c)(3) provided: 

(c) The aircraft operator must -

(3) Have the information required to be retained under this paragraph 

readily accessible at the airport of departure and the intended airport of 

arrival for the duration of the flight leg. 

23 
~~fCEJVED ·S~R\T~DJ\1ARQH28,2011 . · r.IAR 2 9 litH 

HEARING DOCKET' 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASffiNGTON, D. C. 

) 

FEDERAL AVIATION ADMINISTRATION,) 

) 

Complainant, ) FAA DOCKET No. CP09NM0009 

) 

· v. ) (Civil Penalty Action) 

) 

EMPIRE AIRLINES, INC., ) 

) 

Respondent. ) DMS No. FAA-2009-0586 

INITIAL DECISION 

OF ADMINISTRATIVE LAW JUDGE RICHARD C. GOODWIN 

Found: 1) Respondent violated 49 C.F.R. §§175.3, §175.30(a)(2), and 175.30(a)(3) as 

charged; 

2) Complainant failed to prove a violation of §175.33(c)(3); 

3) The charge of violating 49 C.F.R. §175.33(c)(3) is dismissed; and 

4) Respondent is hereby assessed a civil penalty of $12,000. 

I. Background 

Respondent. Empire Airlines, Inc., ("Respondent" or "Empire"), of Hayden, ID, 

is an air carrier authorized to carry cargo under Parts 121 and 135. Complainant, 

Federal Aviation Administration, ("Complainant,' "FAA," or "the agency'') has 

charged the carrier with several violations of the Department's Hazardous Materials 

Regulations ("HMRs"), 49 CFR §§171-178. The allegations pertain to two flights. 

One charge involves the first flight. In the first flight the FAA avers that the location 

of hazardous materials on board had not been properly documented (see Exh. C-1 0; 

Tr. 166-68). The remaining charges apply to the second flight. In the second flight, 

the FAA alleges that agents of Empire accepted and shipped two boxes of a certain 

sanitizing gel, a hazardous material ("hazmat"). The boxes allegedly 1) contained 

improper markings and 2) lacked mandatory shipping papers. 
2 

In the Complaint, as amended at the hearing (Tr. 6-7), the agency charged 

Empire with violating 49 C.F.R. §§175.33(c)(3), 175.3, 175.30(a)(2), and 

175.30(a)(3). It is the §175.33(c)(3) allegation that pertains to the first flight. Empire 

failed in its obligation to retain a copy of a shipping paper describing the hazmats on 

board and specifying their location, the charge asserts. The shipping paper must be 

"readily accessible" at both the airport of departure and the intended airport of 

arrival. The remaining allegations relate to the second flight. Section 175.3 prohibits 

a hazardous material that has not been properly prepared for shipment to be offered, 

accepted, or transported in air transportation. Section 175.30(a)(2) does not allow a 

hazardous material to be accepted for air transportation unless the aircraft operator 

ensures that it is described on a shipping paper in accordance with HMR 

requirements. Finally, §175.30(a)(3) prohibits the acceptance of hazmats in air 

transportation unless the aircraft operator ensures that such materials have been 

marked and labeled as required. Pursuant to 49 U.S.C. §5123(a)(1), the agency 

asks for a total civil penalty of $20,000. 

Respondent denied the charges, and asserts that no civil penaltY is justified 

(Exh. C-11; Resp. Br., pp.12-13; Tr.12). 

A hearing was held on October 26, 2010, in Portland, OR. I determined that 

a written decision was reasonable and appropriate under the circumstances. The 

parties have each filed opening briefs, and Complainant, which has the burden of 

proof, has also filed a rebuttal brief. 1 

I find and conclude that Complainant failed to prove the alleged §175.33(c)(3) 

violation (the charge relating to the first flight). I also find and conclude that 

Complainant proved the remaining allegations. I hold that the facts and 

circumstances of this case warrant an assessment against Respondent of $12,000. 

II. Discussion and Findings 

A. The First Flight 

1. The Evidence 

FAA special agent Donald Stiger, who I found credible, testified that on 

August 22, 2007, he and his supervisor, special agent Thomas Kenny, had 

undertaken a routine ramp inspection of Empire at the Medford, OR. airport. They 

were observing off-loading operations when a Cessna 208 flight that had originated 

in Portland, OR. became their focus. 

The flight was part of Empire's feeder service for Federal Express ("FedEx''). 

Empire operates on behalf of Fed Ex in more rural areas whose traffic does not justify 

1 Complainant's Brief will be noted as "Compl. Br.,'; Respondent's as "Resp. Bt.'1

; and Complainant's 

Rebuttal Brief as "Compl. Rebut." 
3 

a Fed Ex trunk aircraft. The aircraft was adorned with Fed Ex colors and logo, but it 

was operated by Empire and used an Empire crew (Tr. 46,67-69, 134, 168-69, 186; 

Exhs. C-11 and C-15). 

The agents determined that the records provided them failed to state the 

correct location of dangerous goods' on the flight. These records, known as an 

Inbound Dangerous Goods Alert and an Auto DG Manifest, stated that all the flight's 

hazmats had been loaded onto the main deck (Exh. C-2; Tr. 23-25). However, the 

inspectors observed the dangerous goods -five packages of Class 8 hazardous 

materials labeled as corrosives- being unloaded from Pod C. Pod C is the aft 

center pod below the main deck (Exhs. C-1 and C-4, p. 4). 

The agents learned that the hazmats originally had been loaded onto the 

main deck, as the papers given them had stated. But the pilot had decided prior to 

takeoff from Portland to move them to Pod C. (Pilots have the authority to make 

such changes (Tr. 30, 162, 191-92)). 

Empire uses a computer system known as Auto DG to enter hazmat data. 

Auto DG is a product of Federal Express (Tr. 80-81). Only Fed Ex employees have 

access to the system, and only Fed Ex personnel trained in the system can update it. 

Conversely, a discrepancy could not be corrected by a non-FedEx employee (Tr. 

146-49, 175; Exh. C-11, p. 41). 

A Fed Ex dangerous-goods specialist in Portland made a paper entry 

reflecting the change. The new location was noted on a document known as a 

Feeder Aircraft Load Control Sheet ("Load Control Sheet"). The pilot signed off on 

the change and was given a copy of the Load Control Sheet. But no computer entry 

reflecting the change was put into the Auto DG system. As a result the updated data 

was not sent down line. That is why the records the agents obtained at the airport of 

arrival, Medford, reflected the hazmats' old location (Exhs. C-1, C-2, C-3, C-4, p. 4 

and C-11; Tr. 17-40,81, 162-63, 179-80, 190-92). 

2. Arguments of the Parties 

Empire argues that, under the circumstances described, it is not responsible 

for the violation. The failure of the downline station to show the hazmats' changed 

location simply is not its fault, it states. The responsibility lay with Federal Express 

and only with Federal Express. 

Empire pilots- and the pilot operating this flight was employed by Empire--

must ensure that their paperwork reflects accurately the nature, amount, and 

location of hazmats on board their ship. Pilots take charge of this process. But 

Empire's responsibilities, Respondent contends, do not extend to ensuring that any 

2 The term "dangerous goods," as used in the International Civil Aviation Organization (ICAO) Technical 

Instructions, is interchangeable with the term "hazardous material" as defined in 49 C.F.R. §171.8. See 

also Empire's General Operations Mannal, Exh. C-11, p. 8, 1[0 ("The terms Dangerous Goods and 

Hazardous Materials are synonymous and may be used interchangeably.))). 
4 

changes made are reflected in a computer system owned, controlled, and managed 

by another entity (Tr. 52, 80, 169-74; Exh. C-11, p. 2). Respondent argues that it 

was Fed Ex' sole responsibility to enter the change, and that Empire was justified in 

its expectation that Fed Ex personnel would so perform (Resp. Br., p. 10). Since only 

Fed Ex personnel had the authority and training to enter the new data, Empire cannot 

under these circumstances be held liable for non-performance, the carrier contends. 

To ascribe responsibility to Empire, Respondent argues, would amount to imposing 

a duty on its pilot to "follow the DG specialist back to the office to ensure the manual 

entries were transcribed" (Exh. C-11, p. 2). Respondent contends that its obligations 

cannot fairly be stretched that far.' 

Complainant countered that Empire should be held liable. Respondent has 

an independent duty to abide by the HMRs, it stated. The fact that Empire relied on 

another carrier's tracking system was "a business decision" which did not relieve the 

carrier of its discrete responsibility for the ready availability of an accurate document, 

the FAA contends (Compl. Br., pp. 5-6 and n. 26). 

3. Decision 

I will dismiss this charge. I agree with Respondent that, in these 

circumstances, it may not be held legally responsible for the fact that a change in the 

hazmats' location failed to be reflected in the downline record. 

The operative regulation, §175.33(c)(3), obligates the aircraft operator to 

ensure that data showing the location of hazmats on board is "readily accessible" at 

the operator's destination. But the operator, Respondent, cannot be held liable for 

every failure of performance. 

Empire, as Complainant stresses, is responsible as the operator for 

compliance with the HMRs. The carrier's own General Operations Manual ("GOM" 

or 'Manual") as well as the HMRs compels it (Exh. C-11, p. 8; see Com pl. Br., pp. 6, 

9). Indeed, this responsibility is so critical- stemming an air carrier's duty to 

exercise the highest possible degree of care- that it may not be delegated. See, 

e.g., Alaska Airlines, Inc., FAA Order No. 2004-8, 2004 WL 3198210 (October 4, 

1984), p. 6. Yet the regulations also ensure \hat Empire may rely on information 

provided by another entity when it is reasonable to do so. 49 C.F.R. §171.2(f). This 

is such a situation. Empire obtained a paper copy reflecting the locational change. I 

hold that it was reasonable to assume that the necessary computer entry also would 

be made in due course by the FedEx official responsible. It was a purely ministerial 

step, taken routinely. The risk of non-compliance was small, and the inconvenience 

to Empire comparatively great. The HMRs in these circumstances do not charge the 

operator with a duty to investiga\e and the concomitant knowledge of what an 

investigation would have revealed. 

3 Respondent also stated that in the future it would ask FedEx for a copy of the carrier's Auto DG entry 

reflecting hazmat placement. Tr. 180. 
5 

The fact, moreover, that Empire has since implemented a method of ensuring 

that this situation is not repeated should not suggest that thil carrier was duty-bound 

to employ the method in the first place. Hindsight is 20-20. Respondent was not 

obligated to take steps to forestall this possibility. 

For all these reasons, I decline to find a violation of §175.33(c)(3). I will 

dismiss this charge' 

B. The Second Flight 

1. The Evidence 

The FAA agents also claimed violations pertaining to a second PortlandMedford flight Empire had operated on August 22, 2007. The agents determined 

that Empire had tendered and shipped two fiberboard boxes marked on both sides 

"CONSUMER COMMODITY ORM-D." (Caps in original). A Fed Ex official at the 

Medford airport opened the boxes .. Each contained one case (24 bottles) of 354-

milliliter plastic bottles of Nexium Hand Sanitizing Gel ("Gel"), a hazardous material 

(Exhs. C-1 and C-8; Tr. 49-54). Because of the presence of hazmats, the agents 

concluded that the markings were improper. Nor were the packages accompanied 

by hazardous materials shipping papers. 

The Gel had begun its journey in Balflmore the day before, on August 21, 

2007. It had traveled to Memphis on Federal Express and then was put on a flight to 

Portland, OR before the FAA agents observed the packages at the final air 

destination, Medford, OR, the following day. The packages were to be delivered to a 

customer of Astrazeneca Pharmaceuticals LP ("AstraZeneca"), the original shipper, 

in Jacksonville, OR (Exhs. C-1, C-7). 

The Gel product is described generically as an antibacterial hand gel. It is 

classified as a hazardous material on account of its alcohol content. The product's 

Material Safety Data Sheet ("MSDS") indicates that it contains as much as 62% ethyl 

alcohol by volume. The Gel's flashpoint is 74' Fahrenheit (23' Celsius). Agent 

Stiger testified that this item is properly classed as a Class 3 flammable liquid. It is 

formally categorized in the Hazardous Materials Table ("Table") as a Flammable 

Material in Packing Group Ill. Its UN identification number is UN 1170 (Exh. C-9; Tr. 

54-59, 71 ). 

2. Arguments ofthe Parties 

Agent Stiger testified that an "ORM-D' m~rking on a box means that the 

material inside is hazardous (Tr. 53). ("ORM-D" is an authorized marking standing 

4 The pilot, as seen, had the correct information on board. But it was not '~readily accessible" as the 

regulation requires -particularly in a situation in which it would be needed most, an actual emergency. 

Pilots in emergency situations are trained to leave the aircraft as quickly as possible. The risk of leaving 

documents behind in that event clearly would be too great to suggest that the paper record in the pilot's 

possession satisfied regulatory requirements. See Tr. 33-35. 
6 

for "other regulated material." 49 C.F.R. §173.144). As so marked, such goods are 

permitted to move by ground or rail. But the ORM-D marking is not authorized for air 

transportation (Tr. 50, 151; Exh. C-9; see Table following §172.101). Such goods as 

a general matter are properly marked ORM-[)-Air. Another deficiency agent Stiger 

noted is that a hazardous material package labeled OR M-D that is offered or 

intended for transportation by air must be accompanied by a shipping paper (49 

C.F.R. §§172.200(a) and (b)). But there were no such papers. The flight's Inbound 

Dangerous Goods Alert and the aircraft DG manifest had indicated that no hazmats 

were on board (Exhs. C-5, C-6; Tr. 41-44, 50). Finally, the bottles, which had screwtype caps, were not securely held with a positive. means of control as §173.27 of the 

HMRs requires. This is significa(lt because.these goods then could not have been 

reclassified as ORM-D Air. In such circumstances they revert to the base 

classification- in this case, a Class 3 flammable ethanol.' Complainant concluded 

that the shipment had not been described and marked as required by the cited 

HMRs. 

Empire countered that no violations could be ascribed to it. The acceptance 

and loading processes, it pointed out, are controlled and overseen by Federal 

Express. Fed Ex personnel also do the actual loading. Fed Ex properly bears 

responsibility for the violations, it asserts. Empire does not. Respondent "simply 

flies the plane carrying the Fed Ex Express shipments from one point to another" 

(Exh. C-11, p. 41; Tr. 60-61, 176, 188; Resp. Br., pp. 4-6). 

Empire concedes that (in conformance with Manual requirements) its pilot 

had supervised the loading process. But the pilot had not seen the ORM imprint 

because the dimensional manner in which the boxes were placed on the belt loader 

prevented him from seeing the area to which the imprints were affixed (Exh. C-11, p. 

2; Tr. 52, 181, 189-90; see Exh. C-8, pp. 1, 2; Resp. Br .. , p. 7). And he had no 

reason to suspect hazmats, Respondent contends, because there was no paperwork 

for these boxes (Tr. 53, 182; Resp. Br., pp. 7, 8, and 9, and p. 8 n. 2). No visual 

cues alerting the pilot to such a situation were present. The captain's duties, Empire 

says, do not extend to examining every package placed on board (Tr. 180-82). 

During loading he or she is concerned primarily with weight-and-balance limitations 

(Tr. 182). Moreover, the package handler at that point would not have been "doing 

any type of inspection for acceptance" (Tr. 158). 

3. Decision 

I find the violations. 

Respondent's arguments cannot be sustained. I agree with Complainant that 

Empire has a full and independent obligation to comply with the HMRs. This duty is 

a necessary element of its status as an aircraft operator and as the carrier of such 

5 Tr. 54-56, 86; Ex h. C-8. 49 C.F.R § l73.27(d) states that "Stoppers, corks or other such friction·type 

closures must be held securely, tightly and effectively in place by positive means. Each screw-type closure 

on any packaging must be secured to prevent closure from loOsening due to vibration or substantial change 

in temperature.'' . 1 
7 

materials. 49 C.F.R. §171.1. The obligation, moreover also is required by the 

carrier's GOM (Exh. C-11, pps. 6-44; Tr. 62, 98). Empire simply is responsible for 

identifying HMRs aboard aircraft it operates (Tr. 99-100). 

More specifically, the HMRs require aircraft operators to ensure that hazmats 

are authorized for transportation by air and are properly described and marked. 49 

C.F.R. §175.30. The GOM directs Empire personnel to verify that the outside of 

packages tendered to it are properly marked. II cautions that packages may not be 

loaded "unless the shipment has met acceptance and packaging requirements."6 

Non-compliant hazmats must be rejected. These responsibilities are fully Empire's; 

they are not delegable or transferable. · · 

The GOM does note that FedEx personnel perform the loading. But the 

Manual underscores that is the responsibility of Empire crewmembers to oversee the 

process: "A crewmember must supervise the loading of DG," the Manual states 

(Exh. C-11, p. 41, ~A.2; Tr. 65-66,100, 188). Empire's pilots perform this 

supervision (Tr. 1 00). In these circumstances, the actual loaders, no matter by 

whom employed, act as Empire's agents. Empire is responsible for the result. That 

the boxes were loaded at an angle which made it difficult to observe the entire 

outside of the boxes, and that the existing documentation failed to alert the pilot to 

the hazmats, made the pilot's duty of scrutiny trickier, to be sure; but these 

circumstances do not absolve Empire of liability for the resulting violations. 

For the reasons stated, I find and conclude that Empire violated HMRs 

§§175.3, 175.30(a)(2), and 175.30(a)(3). 

ill. Penalty 

We now turn to the issue of civil penalty. 

A. Factors 

Determination of an appropriate civil penalty involves a number of factors. 

The decisionmaker must weigh "the nature, circumstances, extent, and gravity of the 

violation[s]," and, with respect to the violator, "the degree of culpability, any history of 

prior violations, [and] the ability to pay" as well as "other matters that justice requires" 

(49 U.S.C. §5123(c); see Tr. 62). The principal elements in this analysis are the 

nature of the respondent's conduct and the totality of the circumstances. 

Envirosolve, LLC, FAA Order No. 2006-2 (February 7, 2006), p. 13. 

The Administrator has provided policy guidance for agency employees to 

follow when recommending an appropriate civil penalty in hazardous-materials 

cases. It has published penalty guidelines. The guidelines, contained in FAA Order 

2150.3A, assess all relevant statutory criteria, including mitigating and aggravating 

6 Exh. C-11, pp. 11, 12, 13; Tr. 62-65, 99. While "ORM-D" properly is considered a marking and not a 

label, the GOM categorized it as a label. Exh. C-11, p. 11; Tr. 63-64. 
8 

circumstances. The guidelines f[Jrther aid Complainant's penalty determination 

through a Sanction Guidance Matrix. The Matrix sets out specific penally ranges for 

each input, cross-referencing such factors as the nature of the respondent (for 

example, whether it is a business which "regularly" offers hazmats) and the relative 

risk of harm posed by the goods offered. Complainant's sanction determination 

nonetheless does not reflect merely a fixed mathematical computation. The sanction 

guidance table is intended to indicate the Administrator's "general views" about the 

civil penalty ranges appropriate for different types of violations. Folsom's Air 

Service, Inc., FAA Order No. 2008-11 (November 6, 2008), 2008 WL 4948488, p. 

13. Nor are the guidelines binding. Each situation, being dependent on so many 

variables, is unique. "Evaluation of the case," the FAA has emphasized, "is based on 

the totality of the facts and circumstances."' 

An administrative law judge ("ALJ") is not required to follow the Policy. The 

Policy is intended for the guidance of agency personnel, and ALJs are not agency 

personnel. Folsom's, supra, p. 14. ALJs make decisions independently, and the 

ALJ determines (subject to agency review) whether a civil penalty is to be assessed, 

and if so, in what amount The Guidelines nonetheless must be respected as an 

expression of agency sanction policy. They represent an effort to produce 

consistent results in similar cases. The Administrator has asserted the power to 

impose the agency's sanction policy on appeal if an ALJ assesses a civil penalty that 

is not consistent with the Guidelines. Warbelow's Air Ventures, Inc., FAA Order No. 

2000-3 (February 3, 2000), p. 20; Northwest Airlines, FAA Order No. 1990-37 

(November 7, 1990), pp. 8-10. 

Additional factors inform the determination of an appropriate civil penalty. Air 

carriers are held to a high duty of care. Indeed, they are obligated to perform their 

services with "the highest possible standard of care." See, e.g., Folsom's, supra, p. 

16. This degree of care devolves from carriers' responsibility to assure, to the 

maximum extent possible, the safety and well-being of their passengers, crew, and 

others involved in transportation by air. 

Hazardous materials require particular attention. They are dangerous by their 

very nature. The risk of harm must be kept to an absolute minimum in view of the 

possible grave consequences of error. Carriers of dangerous goods such as Empire 

are expected to conform to the highest standards of care and, concomitantly, must 

answer in appropriate measure if they fall sh9rt. 

On account of hazmats' inherent capacity for peril, the HMRs provide a web 

of protection to minimize the risk for persons who could be adversely affected by 

such materials. Flammable materials, to cite one type of problem, could cause a fire 

7 FAA Policy on Enforcement offue Hazardous Materials Regulations: Penalty Guidelines, 64 Fed. Reg. 

19443, 19444, 1999 WL 226610 (F.R) (Apri121, 1999) ("the Policy" or "the Guidelines"), also published 

on Aprill4, 1999, as Change 26, Appendix 6, to FAA Order2150.3A. FAA Order 2150.3Amay be found 

at www.airweb.faa.gov and was submitted in pertinent part in this proceeding as Exhibit C-12. 

By Order 2150.3B, effective October 1, 2007, fue agency issued new sanction guidelines superseding the 

old. Since tbe actions involved in this matter occurred prior to the effective date, Order 2150.3A remains 

applicable. See 72 Fe<lReg. 55853 (October 1, 2007). 
9 

if they come in contact with a heat source. Such circumstances could threaten the 

integrity of the flight itself. 

B, Complainant's Position 

Complainant has asked for a levy of $20,000 on all charges. It bears the 

burden of proving the appropriateness of this amount by a preponderance of the 

evidence. Phillips Building Supply, FAA Order No. 2000-20 (August 11, 2000), p. 8. 

The penalty guidelines place the type of flammable liquid involved in this case 

in packing group Ill in the medium-risk category of the matrix, known as Category 

"B." Category B materials are materials that "may not pose an immediate threat to 

the safety of a flight, but can cause death or injury to persons due to unintended 

releases in aircraft cabin areas, and potential damage to aircraft structures over a 

longer period of time, ... " They are given moderate weight for assessment 

purposes (64 Fed.Reg.19443, 19449 (April21, 1999); Exh. C-12, p. 7; Tr. 71,86-

87). Respondent's marking and notification violations created a serious risk of 

danger, the agency says. The rules' prohibition of air carriage represents a 

determination that the product, as shipped, was too dangerous for air travel. There 

were two violations, or one per shipment, stemming from the lack of shipping papers, 

and two violations for improper markings (Tr. 71-72). 

The agency also determined for assessment purposes that Empire was a 

"Group 2" carrier, as measured by the number of its pilots and the number of aircraft 

it operates (Tr. 73-74; Exh. C-12, p. 8). · 

Finally, Complainant accounted for a mitigating factor: an entity other than the 

violator prepared the shipment. Respondent relied on incorrect infonmation from 

another source. This factor suggests a minimum weight (Tr. 72-73). 

Respondent's violation hilltory also was considered. It had none, but that 

circumstance is not considered mitigating (Tr. 73, 1 07). A violation-free history is 

expected to be the norm. Toyota Motor Sales, USA, Inc., FAA Order No. 94-28 

(September 30, 1994). 

For the second flight- the only flight in which violations are found-- the 

guidelines suggest a sanction in the range of $5,000 to $27,500 for each of the four 

found violations (Tr. 74). So the sanction range is $20,000 to $110,000. Yet even if 

each shipment on the second flight is considered as one violation, for a total of two, 

the sanction range becomes $10,000 to $55,000 (Tr. 76). 

In taking all factors in consideration, including corrective action undertaken by 

Respondent. the agency concludes that its proposed assessment of $20,000 (which, 

of course, includes the allegation which was not proven) appropriately reflects all the 

salient circumstances, is "eminently reasonable," and even is low (Tr. 75-77; Com pl. 

Br, p. 16). ' 
10 

C. Resnondent's Position 

Empire noted that neither of the boxes leaked. The packaging remained 

intact. Neither box caused any damage or harm (Tr. 82-83). 

Additionally, the carrier had no prior violation history. As stated, Empire also 

emphasized the difficulties in spotting the faulty markings (1.0., p. 6). It asserts that 

it fails to understand why it received a proposed civil penalty under all the 

circumstances (Resp. Br., p. 14). · 

D. Decision 

I have decided to assess a total civil·penalty of $12,000. I find and conclude 

that this amount appropriately reflects the totality of the circumstances surrounding 

the offending shipments. 

Any package containing hazardous materials which fails to completely 

conform to the HMRs introduces an unacceptable, and possibly perilous, element 

into the stream of air commerce. Flammable items, by their very nature, could ignite. 

The violations presented a significant threat to the safety of air transportation. These 

facts and circumstances warrant a commensurate fine. 

I give no weight to Respondent's argument that no leak or other potentially 

troublesome result flowed from its failure to properly mark the packages. These are 

fortuitous circumstances which do not justify mitigation. Indeed, harm resulting from 

any of the shipments would have constituted an aggravating factor (Exh. C-10, p. 3 

(64 Fed. Reg. 19443, 19445 (April21, 1999)). Al;iditionally, the fact that Federal 

Express was involved in inspecting and transporting the offending packages, and 

may also have been at fault, simply is not relevant to the determination in the instant 

matter. Empire as the operator was independently and fully responsible for 

permitting these packages to enter the stream of air transportation. The lack of 

shipping papers, however, must be considered a mitigating factor. Lacking a 

warning that hazmats were on board, it is natural- though not excusable- to relax 

one's guard and fail to look for problems wittl the same vigilance one might perform 

otherwise. The fact itself that Empire relied on incorrect information also mitigates to 

an extent. 

Finally, civil penalties levied in other cases may be a relevant consideration. 

Yet as the Administrator has said, "it is often difficult to compare sanctions across 

cases because there are so many variables involved in each case." Alika Aviation, 

Inc., FAA Order No. 1999-14 (December 22, 1999}, p. 12, n. 20 quoted in Folsom's 

Air Service, Inc., FAA Order No. 2008-11 (November 6, 2008), p. 21. Additionally, 

base penalty amounts have been raised periodically over the years, and have been 

adjusted upward from time to time to account for inflation. The maximum civil 

penalty for a single violation of 49 U.S.C. §5123(a), the penalty statute under which 

Complainant brought this case, was raised from $25,000 to $30,000 in 2002, and 

then to $50,000 for violations occurring after August 10, 2005. See 14 C.F.R. 

§13.305 (showing changes in minimum and maximum penalty amounts). It is useful 
11 

to note, nonetheless, the decision in the noted cases, which, like the present matter, 

involved two nonconforming units. The Respondent in Toyota Motor Sales, USA, 

Inc., was fined $50,000 for an undeclared shipment of two "wet" automobile 

batteries. FAA Order No. 94-28 (September 30, 1994). The respondent in Midtown 

Neon Sign Corporation, FAA Order No. 1996-26 (August 13, 1996) was fined 

$25,000 for an undeclared (and leaking) shipment of two 1-gallon cans of paint. 

I have considered all other arguments advanced by both parties. Those not 

discussed are rejected as without merit. 

In weighing the all the facts and circumstances, I find and conclude that a civil 

penalty assessment of $12,000 is warranted. This amount appropriately reflects the 

nature and extent of the risk to air transportation safety created by Empire, while 

giving appropriate weight to other salient factors. The risk of harm that Respondent 

brought to air transportation was significant. It allowed into the stream of air 

commerce flammable liquids considered so perilous that they were prohibited from 

traveling by air. On the other hand, mitigating circumstances, as discussed above, 

also were present. I believe a civil penalty of $3,000 for each of the four found 

violations (two per package), or $12,000 in total, is appropriate. 

The civil penalty levied will, I find, achieve the statutory purpose of promoting 

compliance with the HMRs. It also will achieve deterrence for Respondent and 

entities in a similar position. In sum, it appropriately accounts for the factors the 

statute and agency policy directs in fixing the assessment. 

Respondent Empire Airlines, Inc. is hereby assessed a civil penalty of 

$12,000 for violations ofthe HMRs 49 C.F.R. §§175.3, 175.30(a)(2) and 

175.30(a)(3) as stated in this Initial Decision. The Complaint is in all other respects 

dismissed.' 

Attachment- Service List 

chard C. Goodwin 

Ac)ministrative Law Judge 

' This decision may be appealed to the Administrator of the FAA. The notice of appeal must conform to 

sections 13.210, 13.211(e) and 13.233 of the Rules of Practice, which require that a notice of appeal 1) be 

filed not later than 10 days (plus an additional five days if mailed) from the service date of this decision, 

and 2) be perfected with a written brief or memorandu'i' not later than 50 days (plus an additional five, if 

mailed) from the service date of this decision. The notice of appeai and brief or memorandum must either 

be a) mailed to the Federal Aviation Administration, 800 Independence Avenue, S. W., Washington, DC 

20591, Attn: Hearing Docket Clerk, AGC-430, Wilbur Wright Building-Suite 2Wl000, orb) delivered 

personally or via expedited courier service to the Federal Aviation Administration, 600 lodependence 

Avenue, S.W., Wilbur Wright Building-Suite 2WIOOO, Washington, D.C. 20591, Attn: Hearing Docket 

Clerk, AGC-430. A copy of the notice of appeai and brief or memorandum also must be sent to agency 

counsel. Service upon the presiding judge is optional.