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### U.S. DEPARTMENT OF TRANSPORTATION OFFICE OFHEARJNGS WASHlNGTON, DC

In the Matter- ofChemSystems, Inc.,
Respondent. ) } ) ) 

### ) } FAA DocketNo.: TBD FDMS No.: FAA-2012-0911 FAA Region: Western Pacific Judge: Richard C. Goodwin
COMPLAINANT'S MOTION FORDECISION OR. IN THE ALTERNATIVE, MOTION TO LIMITTHE ISSUES AT HEARING TO SANCTION fo: Hon. Richard 

### C. Goodwin, Administrative Law Judge. and to ChemSystems, Inc., ("Respondent") by and through its attorneys: COMES NOW, the Regional Counsel o:fthe Western-Pacific Region ofthe Federal Aviation Admioistration (FAA), by counsel, files this Motionfor Decision, pursuanT: to section 13.218(£)(5) ofTitle 14 ofthe Code ofFederal Regulations. 

### Inthe alternative, Complainant moves to have thehearing limited to the an1ount ofthe sanction. Introduction This case involves one shipment ofhydrochloric acid that was not properly classified
on shipping papers, marked, labeled, packaged, containing emergency response information, and being sent by a hazmat employee notproperly trained. The pleadings, answers to ·.nterrogatories, and admissions showthat there is no genuioe issue ofmaterial fact regarding that shipment, and that Complainantis entitled to a decision as a matter oflaw. 141002

Tbis case rests on the determination oftwo legal, notfactual, issues. First, there is no dispute that Respondent knowingly offered each container that contained hydrochloric acid,
as "knowingly"is used in 49 U.S.C.§ 5123(a). Evento the extent that one would accept Respondent's apparent asse1tion thatitdid nothave actual knowledge, 

### it is clear that it had04/10/2014 12:31 FAX 3107256816 AWP-7**·~onstructi.ve** 

### knowledge---coostructive knowledge ofthe hydrochloric acid it offered for sale and, thus, for shipment to its customer. Second, the sanction soughtby Complainant is wammted and in accordance with the appropriate statutory factors :md the published FAA sanction guidance Undisputed Facts lill 003



### Respondent is a manufacturer ofspecialty decorative concrete color admixtures. 

### See Exhibit I, 

### homepage ofwww.chemsystemsinc.net, last accessed on3/28/l4. Links on Respondent's website offer access to the products' Material Safety Data Sheets and Iechnical Data Sheets. Id. 

### The Complaint alleged and Respondent admitted that on or about August 4, 2011 Respondent, through its nowformer employee, Shannon Wooten, offered the subject >hipment via Federal Express ("FedEx") "express saver" delivery from Houston, Texas to Fresno, California See 

### Exhibit 2, Complaint and Answer. The Complaint also alleged and the Respondent admitted that the shipment included one (I) fiberboard boxcontaini:a.g tour (4) one-gallon containers of"ChromastainEmber." ld. 

### The shipment was transported from Houstonto Oakland, California, where it was found to be leaking.**Se~** 

### Exhibit 2 Complaint; Exhibit 3, Photographs; Exhibit 4, Form DOT F 5800. Based on the indisputable evidence, the box in which the hazardous material was shipped was saturated from the leak. See 

### Exhibits 3 and 4. Indisputable photographic .evidence also demonstrates that none ofthe necessary markings and labelings was visible on the exterior ofthebox. 

### Id Also, the shipping papers did not include any classification or description ofthe materials being shipped. Id. 

### The uncontroverted evidence also shows that the four containers possessed no positive means ofclosure. Id.
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### I4J 004

"Chromastain Ember" is a corrosive liquid, acidic, inorganic, n.o.s. (Hydrochloric Acid), and has an U.N. identificationnumber ofUN3264, Hazard Class 8, Packing Group III. :'iee Exhibit 2, Complainant and Answer. Indeed, Respondent's discovery responses admit such. 

### See Exhibit 5, Responses to Complainant's Request for Admissions, Nos. l - 6. No genuine issues ofmaterial fact as to the above description exist based on the ;evidence, includingthe Answer and discoveryresponses. Motion forDecision Standard Pursuant to 14 C.F.R. section 13.218(f)(5), "[t]he administrative lawjudge shall grant
aparry's motion for decision ifthe pleadings, depositions, answers to interrogatories, admissions, matters that the administrative lawjudgehas officially noted, or evidence introduced during the hearing show that there is no genuine issue ofmaterial fact and thatthe 

### parry makingthe motion is entitled to a decision as a matter oflaw." At·gument Complainant's motion is appropriate. Respondent offered an tmdeclared shiJ)ment of four (4), one-gallon containers ofhydrolic acid for transportation by air from Houston, Texas, to Fresno, California. See Exhibit 1, Complaint; Exhibit 3; Exhibit4_ Respondent failed to properly package and prepare the shipment in violation ofSubchapter C ofChapter 

### J ofTitle 49 ofthe Code ofFederal Regulations. 

### !d; 49 C.P.R. §171 

### et seq. Specifically, Respondent did not provide positive means ofclosure ofthe fonr (4), one-gallon containers ofh;rdrolic ;acid. See Exhibit 1, Complaint; Exhibit 3; Exhi.bit 4. Likewise, Respondent did not use a fiberboard box that was designed, constructed, maintained, filled its contents so limited, and closed, under conditions normally incident to ;lransportation to prevent a release ofthe hazardous material inviolation ofsections I73 .24(b) ;md 173 .27(d), for example, such as a leak-proofliner. 

### See Exhibit 1, Complaint; Exhibit 3; 304/10/2014 12:31 FAX 3107256816 AWP-7 lfiJ 005

Exhibit 4. Respondent also failed to properly mark and label the shipment in violation of sections 172.300(a) and 172.400(a). See Exhibit I, Complaint; Exhibit 3; Exhibit 4_ Respondent did not include any classification or description ofthe hazardous material onthe shippingpapers in violation ofsection 172.200(a). See Exhibit 1, Complaint; Exhibit 3; Exhibit 4. Further, Respondent offeredthe shipment when Respondent did not provide emergencyresponse informationin accordance with subpart G ofpart 172 ofTitle 49, and when it did notprovide hazardous material training for its hazardous material employees in**'~onformance** with subpart H ofpart 172 ofTitle 49. See Exhibit 1, Complaint; Exhibit 3; Exhibit 4.; 49 C.F.R. §172.600 etseq., and §172.700 et seq. Under49 U.S.C. section 5123(a), a personknowinglyviolates a hazmat regulation if "''(A) the personhas actual knowledge ofthe facts giving rise to the violation; or (B) a reasonable person acting inthe circumstances and exercisingreasonable care would have that knowledge." 49 U.S.C. §5123(a)(l)(A)&(B). ln 1998, the Department ofTransportation published a forma\ interpretation that darifies the above provision. 63 P.R. 30411 (1998). The interpretation involved a carrier accepting ortransporting a hazmat. The DOTwrote: [a] carrierknowinglyviolates the HMR whenthe carrier accepts or transports a hazardous material with
... constructive knowledge that a package contains a hazardous material which has notbeen packaged, marked, labeled, and described on a shipping paper as required bythe 

### HMR. This means that a carriermay not ignore readily apparent facts that indicate that
__ . _ a shipment actually contains a hazardous material governed by the HMRdespitethe factthatit is notmarked, labeled, placarded, or described on a shipping paper as containing a hazardous materia\_ 63 F.R. 30411 (1998). fhe FAA Administrator has held thatthis statute "requires inquiry andn:eats a person as possessing whatever knowledge inquirywouldhave produced." In the Matter ScottNovak,

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FAA OrderNo. 2014-1; quoting In the Matter Interstate Chemical Co., FAA Order No. 2002-29 at 13, citing Contract Courier v. Research
.. 924 F.2d 112, 114 (7th Cir. 1991 ). Inits Answer, Respondent contends that it was "without sufficient knowledge" to respond to most ofthe Complaint (save for the :first two paragraphs). Exhibit 2, Complaint and Answer. However, a genuine issue ofmaterial fact does not exist here because ofthe unrefuted evidence, as discussed below. liiJ 006

Respondent asserted inits discovery responses that it did not "knowingly" vialate any regulation because it does notmanufacture "ChTomastainEmber" and such product is labeled by the manufacturer and shipped to Respondent. Exhibit 5, Respondent's Discovery Responses, Response to Interrogatory No. 12. This argument fails for several reasons. First, the alleged violations are brought against Respondent for offeringthe**~ubject** b.azardous material into the stream ofcommerc(:. 

### Itmatters not who manufactured it. Accepting Respondent's argument WO\lld reduce the applicability ofthe offering requirements andprohibitions inthe HMRto hazmat manufacturers. Such a resultwould defy theplain language ofthe word "person" inthe HMR. Respondent admits that it offered ::he "Chromastain Ember," See Exhibit 2, Answer, 1. Second, Respondent hadconstructive, ifnot actual, knowledge that the shipment <;ontained regulated hazardous materials. In its discoveryresponses, Respondent provides ohotographs ofwhat a "typical"properly declared shipment looks like. See Exhibit 5. These •:espouses and photographs indicate Respondent was aware that "ChromastainEmber" was a ;:egulated hazardous material. Forexample,the representative photographs include hazardous material markings, labels, and reference to the Material SafetyData Sheet ·:MSDS). See Exhibit 5.
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Most significantly, Respondent's own website provides details and MSDS'sonthe various products that it accepts from elsewhere and offers for sale on its website. 1 (Respondent's website even claims thatit "manufactures" some ofthose products and offers them for sale. Exhibit 1.) With respect to the "Chron1astaiu Ember" alleged to have been offered in the Complaint, Respondent's website' describes "Cbromastain" as "aready-to-use, penetrating, acidic stain that chemicallyreacts with cured concrete to produce permanent, variegated or translucent color effects." 

### See Exhibit 1, atthe sth page. That same

### wc~b page b.as a link to the MSDS for "Chromastain." See Exhibit 1, at the 6th page. The MSDS for "Chromastain" on Respondent's website, under "SeetionlX---Special Precautions and Comments," states "DOT: Corrosive liquid, acidic, inorganic, n.o.s. (Hydrochloric acid). 8, UN3264, PGIII." See Exhibit 7, MSDS for "Chromastain" from www.chemsystemsinc.net, printed 4/9/14, page 4. Despite the above, Respondent asserts that it did not "knowingly'' offer a hazardous material, because it was notthe manufacturer o:fthe materiaL Respondent's responses and admissions, and the plaininformation onits own website, establish that Respondent "knowingly" offered Hydrochloric acid, Class 

### 8:, UN3264, Packing Group III material for air tJ:ansportation Whether this court wants to conclude that that knowledge was actual or constructive does not matter. At a minimum, Respondent has constructive knowledge ofthe nature ofthe products 

### it sells. Complainant is notrequiredto prove that Respondent read the MSDS for ;'Chromastain" it provides on its website. (Indeed, under the standard 

### in Section 5123(a),

1The sample photographs show thatthe subject shipmentwas "typically" shipped as "ORM-D". It shouldbe noted t\lat simply havingthe marking "ORM-D" is a haZJnat markingthat in and ofitselfis a sufficient indication to meet the requirement ofconstructive knowledge. See F.A.A. v. Federal Express, FAA Docket No. CP98GL0021, 2000 WL 34229115, •2.•3 (D.O.T. 2000). 604/10/2014 12:32 FAX 3107256816 A\VP-7

Complainant is notrequired,

### per se, to provethat Respondent had inhand an MSDS for ·'Chromastain" when it offered the product.) Furthermore, Complainant asserts that it defies logic to assertthat a company does not 11avc actual knowledge ofthe content ofits owo website or the products that it ships to its**~;ustomers.** Otherwise, howdoes that content even get onthe website inthe first place, and how does that company know what to sendto its customers? Respondent's argument that it l1ad no actual knowledge ofwhat it said on its own website or what it sells is wholly iJilpersuasive and should be rejected. Therefore, there are no genuine issues ofmaterial facts left as to the factual allegations in the Complaint. This motionfor decision should be granted, finding that Respondent knowingly offered hazardous materials as alleged in the Complaint, and that Respondentviolatedthe HMR as alleged inthe Complaint. Civil Penalty Amount Inits Answer, Respondent denies the proposed civil penalty of$154,000 is appropriate. It supplied no evidence in its discovery responses supporting such a detense. ')ee Exhibit 5_ Complainantmoves the Administrative Law Judge to issue an Order 1\ssessing Civil Penalty inthe amount of$154,000.00. Alternatively, Complainantmoves that the hearing be limitedto the issue ofthe amount ofthe sanction. A person who knowingly violates the statute orregulations pertainingto the transportation ofhazardous material, "is liable to the United States Government for a civil penalty ofat least $250 butnot more than $50,000 for each violation." 49 U.S.C. 

### § 5123(a). (The minimum penalty for a training violation is $450.) When determining the amount ofa civil penalty, Congress bas dictated that the following factors be considered: (1) the nature, circmnstances, extent, and gravity ofthe violation; (2) the violator's degree ofculpability, 7 14100804/10/2014 12:32 FAX 3107256816 AWP-7 lill 009

h.istory ofviolations, and the abilityto pay; and (3) other matters thatjustice requires. 49 J.S.C. 

### § 

### 5l23(c); see also 14 C.F.R. 

### § 13.16(c)(to the same effect). To guide the FAA's prosecntorial discretion, the Agency developed penalty guidelines to aid the application ofthe statutorily defined penalty considerations and "to oromote a relative consistency in determining civil penalties for violations ofthe Department ofTransportation Hazardous Material Regulations[.]" FAA Order 2150.3B, Appendix C -:october 1, 2007) (hereafter Sanction Guidance). FAA's use ofthe Sanction Guidance table
::o determine the appropriate civil penalty norm<1-llY shonld not be disturbed unless other !'actorsjustifythe reduction ofan otherwise reasonable assessment. 

### Trans World

### Airlines,
rnc., FAA Order no. 98-11 (June 16, 1988). "'Although [ ALJs] are not agency personnel, andtherefore are not bound by internal agency orders [sucb as FAA Order 

### 2150.38, which contains the Sanction Guidance]. [the 1\.LJs] are nonetheless subjectto agency policy.'"Novak, supra; citing e.g., [Air Carrier], 

### :OAA OrderNo. 1996-19 at4 (May 3, 1996). The Decisionmaker inNovakcontinued, "'lf lhe ALJ does not follow agency policy, the agencymayimpose tl)at policy by reversing the <\LJ's decision on appeal.' 

### (Jd) As previously stated, '[t]he Administrator has both t:he authority and duty to impose the agency's policy on appeal."' Novak, 

### supra, citing Warbelow 'sAir 

### Ventures, FAA Order No. 

### 2000-3 at 9 (February 3, 

### 2000). The civil penalty requested inth.is case is appropriate. The FAA's publicly available 'anction guidance matrix for hazardous materiai violations is contained in Figure C-1 of '\ppendix C ofFAA Order 

### 2150.3B. Respondent's website states th.at Respondent, "offers mtegral and dry-shake colors as well as topping compounds, overlays, acid stains, solvent, 'md water-based dyes, bonding agents, liquid and powderrelease agents and sealers_'' Exhibit l. As ofthe date ofthis motion, Respondent also offers a 

### linkofMaterial Safety Data Sheets 804/10/2014 12:32 FAX 3107256816 A\VP-7

oftheproducts ituses. Based thereon and under the relevant Sanction Guidance, Respondent 

### ''S a business entity that regularly offers, accepts, ortr<1nsports hazardous materials. A moderate weight is assigned to this case because hydrolic acid is a "category B" material. Id., at para. 8(b)(l). Respondent corrunitted seven (7) ofthe eight (8) offense Gategories (shipping papers, markings, labeling, packaging, training, emergency response nformation, and release into the environment). 

### Id, Fig. C-1, p. C-12. 141010

Under the FAA's sanction guidance analysis, a business entity thatregularly offers, accepts, or transports hazardous materials ordinarily is subject to a civil penalty in the range •}fbetween $10,000.00 to $32,500.00 for each offense category violated. fd_ Given that Respondent's website indicates it's also a chemical manufacturerthat regularly offers iJ.aZardous material for transportation, Complainantbelieves that a civil penalty slightly on the higher side ofthe mid-point range of$22,000.00 is appropriate for each offense <;ategory violated. Accordingly, a civil penalty amount of$154,000.00 (7 X $22,000.00) is appropriate for the violati.ons in this case. Complainant's choice ofsanction in this case as it is not arbitrary, capricious, or otherwise not according to law2 Complainanthas selected a civil penalty well within the 'ange indicated inthe matrix for hazardous materials violations under FAA Order 2l50.3B, O..ppendix C, Figure C-1
. While Respondent provided federal tax returns from years 20l0 and 2011, rutd asserts that it cannot afford the civil penalty proposed, it has produced no other cuuent information ;nresponse to Complainant's discovery requests demonstrating any amount it can afford. Respondent's financial infonuation is clearly within its control, and ithas not produced

'See, 49 U.S.C. § 44709(d)(3) 

### 904/10/2014 12:32 FAX 3107256816 AWP-7 141 011

evidence it has any inability to pay orto continue in business. In the Matterfor Frostad 

### 4.telier, Inc., FAA OrderNo. 2013-5 at 15 (September 5, 2013). Thus, even assuming 

### •<rguendo that Respondent's financial circumstances 

### are difficult, the $154,000 civil penalty**~hould** be affinned. 

### ld., at 17, fn. 17. Based on the foregoing, Complainant is entitled to a decision in its favor thai Respondent committedthe violations charged and should be assessed a civil penalty of $154,000.00. In the alternative, the ALJ should issue a decision tlmt the only issue .•tppropriate for the hearing is the amount ofthe civil penalty. Conclusion Complainant respectfully requests that this Court grantthe above Motion for Decision. Ifany further litigation is warranted, the pleadings clearly establish that the hearing**~hould** be limitedto the sanction to be imposed 

### in this case.
Respectfully submitted,**"~AOMI** TSUDA .Regional Counsel

# By:~~~=~~/(__ r-3-e_ 

# Colkiey Adolph General Attorney Dated: AprillO, 2014



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CERTIFICATE OF SERVICE I hereby certify that onthis date I sent viaUnited States mail, postage prepaid, the "xecuted original, as well as one copy by facsimile, ofthe COMPLAINANT'S MOTION FOR DECISION, OR 

### IN THE ALTERNATIVE MOTION TO LIMIT ISSUES AT i''IEARlNG TO SA_l\ICTION, addressed as follows: Federal AviationAdministration 800 Independence Avenue, SW Washington, DC 20591 Attn: Hearing Docket Clerk, AGC-430 Wilbur Wright Building-Suite 2W1000 Facsimile: (202) 493-5142 And by overnight mail, postage prepaid, a true copy to: Hon. Richard C. Goodwin Office ofHearings, M-20 U.S. Department 

### ofTransportation 1200NewJersey Ave., S.E. East Building Ground Floor, RoomE12-230 Washington, D.C. 20590 Telephone: (202) 366-5121 StaffAsst.
l further certifY that on this date I sent via overnight mail a true copy ofthe COMPLAINANT'S MOTION FORDECISION, OR 

### INTHE ALTERNATIVE MOTION TO LIMIT ISSUES AT HEARING TO SANCTION, addressed as follows:

Dated: Apri\10, 2014 ChemSystems, Inc. c/o S. RobertFling, Esq. S. Robert Fling, PLLC P.O.Box411 Katy, TX 77492 Telephone (281) 391-2003

-'\J.\tonia Garcia, Patalegal Office ofthe Regional Counsel "'ederal Aviation Administration Western-Pacific Region Lawndale, California
11 141012