UNITE D STATE S DEPARTMEN T O FTRANSPORTATIO N - r r FEDERA L AVIATIO N ADMINISTRATIO N

WASHING ! ON , D C I n th e Matte r

of; HUSK Y CORPORATIO N FA A Orde r

No . 2010- 8 Docke t No . CP07SO001 7 FDM S No . FAA-2007-0120 ' Served ; Jun e 16,201 0 DECISIO N AN D ORDER O n Octobe r

31 , 2008 , Administrativ e La w Judg e (ALJ ) Richar dC . Goodwi n iiisue dadecisio n assessin g a n $8,00 0 civi l penalt y agains t Husk y Corporatio n ("Husky" ) ba.5edupo n hi s findin g tha i Husk y ha dviolate dnumerou s section s o f th e Departmen t

o f Transportation' s Hazardou s Material s Regulation s (HMR ) (se e Appendix) . Th e AJ. J hel dtha t a n agen t fo r Husk y tendere dtw o boxe s containin g gasolin e an ddiesc l pum p nozzle s l o FedEx , withou t identifyin g th e shipmen t a s containin g hazardou s materials . Husk y file dan appea l fromth e ALJ' s decision , arguin g primaril y tha t Da n Hatfield , th e sale s representativ e wh o oflcre dth e boxe s fo r shipmen t

t o FedEx , wa s employe db y anothe r compan y an dwa s no t

Husky' s agent . A s aresult , Husk y argues , th e ALJ' s findin g o f

liabilit y shoul db e reversed . Thi s dcci.sio n hold s tha t th e ALJ' s determinatio n tha t Hatfiel dwa s Husky' s agent , 

# 0m> :

' Material s filedi

n th e FA A Hearin g Docke t

(excep t fo r material s filedi

n securit y cases ) are als o availabl e fo

r viewin g at

http://www.reKulations.Eov . Fo r additional information , se e http://dms.doi.gQv . ^ Th e Administrator' s civi l penalt y decisions , alon g wit

h indexe s oftli e decisions , th e rule s of practice , andothe r

information , are availabl e on th e Interne t a t the followin g address . v%>M>w.fa(2.gov/abow/o_fflce_org/headquurters_ojJ)ces/agc/pol_adjudication/AC7C400 / Civi l Penalty . Se c 14C.F.R . § 13.210(eX2) . I n addition , Thomso n Rcuters/Wcs t Publishin g publishe s Federal Aviatio n Decisions - Finally , th e decision s are availabl e throug h LF-XI S (TRAN S library ) an dWeslLa

w (FTRAN-FAA database) . Fo r additional information , se c th e We b site .

SSO/LOOi a SH Q * VVd snseetso s xvd3e:s L oios/es/a owa s erroneous , and , therefore , i s reversed . A s Husk y argues , th e AL

J erre di n findin g tha t a n agenc y relationshi p existe dbecaus e th e FA A faile dt o prov e that Husk y ha dth e requisit e degre e o f

contro l over

Hatfield' s actions . Consequently , Husky' s appeal i s granted . N o penalty i s assessed . I . Backgroun d O n Novembe r

28 , 2007 , th e FAA filedth e complain t seekin g a$15,00 0 civi l penalty for

violation s o f

th e HMRarisin g froman offe r o f tw o boxe s containin g 1 7 gasolin e pump nozzle s t o Federal Expres s fo r shipmen t b y air . On e bo x ("Bo x #1" ) containe dthre e nozzle s wrappe di n bubbl e wra p an dcushione dwith Styrofoa mpeanuts . Th e other bo x ("Bo x #2" ) containe dM nozzle s packe di n individua l boxes . Th e FA A allege dtha t

ther e wa s aresidual .stai

n of gasolin e o n on e of

th e 1 4 individtial boxe s packe di n Bo x #2 , an dtha t Husk y di dno t clean th e gasolin e nozzl e i n that individual bo x sufficientl y or purg e i t ol ' vapor s to remov e any potentia l hazard . (Complain t

§ If , T f 11. ) Th e FAA allege dthat :

• th e shipmen t

wa s no t marke do r

labele dt o indicat e that

it containe dregulate d hazardou s material ;

• th e shipmen t

was not accompanie db y shippin g paper s describin g th e hazardou s materials , or

certifyin g that

the y wer e prepare dfo

r shipmen t i n accordanc e with th e HMR ;

• emergenc y respons e informatio n wa s no t included ;

• th e shipmen t

wa s no t package dproperly ; an

d

• Husky' s employee s andagent s were no t traine dregardin g th e FTMR . Th c FA A allege dthat

Husk y offere dhazardou s materia l for transportatio n i n commerc e i n violatio n ofth e followin g regulations : 4 9 C.F.R . § § 171.2(a) , 172.200(a) , 172.202(aXl) , 172.202(a)(2) . 172.202(a)(3) , 172.202(a)(5) , 172.203(f) , 172.204(a ) o r

Eso/sooi asw a* ——•• - - —(c)(1) , 172.204(c)(2) , 172.204(c)(3) , 172.600 , 172.602(b)(3) , 173.1(b) , 172.702(a) ,

173.27(b)(1) , an d173.222.- ' Husk y denie dth e allege dviolation s i n it s answer . A hearing wa s hel do n May 28 , 2008 , a t whic h on e witnes s testifie do n behal f of th e FA A an dfive wimesse s testifie do n Husky' s behal f At th e conclusio n o f

th e hearing , th e AL J gav e th e partie s an opportunity t o file writte n closin g argtiments , bu t counse l fo

r bot h partie s late r

waive dclosin g argument . Th e ALJ issue dth e initial decisio n o n October 31 , 2008 . Husk

y filed anotic e o f appeal , an dperfecte dthat appea l b y filing an appeal brie f

o n Januar y 28 , 2009 . Husk

y requeste doral argument . (Appea l Brie f at 15. ) Th e FA A di dno t

file arepl y brief

^ II . Th e Fact s Husky manufacture s an dsell s product s use di n th e petroleti mindustry , includin g fuel pLun p nozzles . (Tr . 142-143. ) "Whil e Husk y manufacture s al l o f

it s product s i n Pacific , Missouri , i t

test s it s product s a

t location s throughou t

th e Unite dStates , (Tr . 143. ) O n Jtme 8 , 2006 . thre e Husk y employee s (John Myers , Josep h Laschkc , an d Richar dBenscoter ) teste dHusk y gasolin e an ddicse l fUe

l nozzle s at

aCircl e K

servic e statio n i n Nort

h Augusta , Sout

h Carolina . The y were assiste db y tw o Circl e K employee s an db y Hatfield . Hatfiel dwa s employe dby Jac k Pittman an

dAssociates , C'Pittman" ) whic h distribute dproduct s manufacture db y Husky , a s wel l a s b y othe r companies . (Tr . 74. ) Htisk

y pay s Pittman o n acommissio n basis . At th e en do f

th e test , th e Husk

y employee s remove dth e nozzle s fromth e pump s an diiistalle dne w ones . Husk y employee s an dHatfiel ddraine dth e residual fuel

^ Th e regulation s ar

e reproduce

di n th e Appendi x attachedto thi s decision , • * Th e FA A wa s grante

dtwo extension s o

f tim e withi n whic h t o fil e its repl y brief . The secon

d extension o

f tim e grante dthe FA A unti l April 1 , 2009 , i

n whic h t o file it s repl

y brief , bu t th e FAj^ i neithe r filed arepl

y brie f no r requeste dathir dextensio n o f time .

sso/eooi a sj, Q ^ .... . _ , ^^ ^ S^LSeetSO S XV d 3e:S L 0L0S/G3/9 0remainin g i n th e ol dnozzles . (Tr . 76-78. ) Drainin g th e use dnozzle s was necessary

becaus e part s o f

tJie nozzl e bol dfue

l afte r th e nozzl e i s disconnected . (Tr . 100. ) Richard Benscoter , Husky' s engineerin g manager , explaine dtha t th e are abetwee n th e poppe t an d th e chec k valv e coul dhol dapproximatel y 1.3 5 ounce s o f fiiel. (Tr . 107. ) Joh n Myers , Husky' s nationa l accoun t sale s manager , testifie dthat h e i s alway s very carefu l t o drai n an dpurg e al l of th e fiie l h e can get

ou t of ause dnozzl e becaus e ultimatel y someon e ha s t o transport th e nozzles . H e testifie dtha t h e trie s t o minimiz e th e odo r comin g fromuse dnozzle s by drainin g an dpurgin g ever y bi t o f fue l tha t h e can . (Tr . 88. ) H e explaine dtha t o n Jun e 8 , h e draine dth e residual fuel fro mth e use dnozzle s int o abucke t

b y jammin g th e poppe t

ope n with ascrewdriver . (Tr . 88. ) Myer s explaine dfurthe

r that i f h e were goin g t o ship use dnozzles , h e woul dle t the msi t ou t i n th e .su n unti l the y wer e sufficientl y drie dou t andth e odor s were gone . The n h e woul dpackag e the man dshi p the mb y groun dfi-eight. (Tr . 95. ) However , h e testified , i n thi s instance , h e di dno t plac e th e nozzle s i n th e su n t o dry before puttin g the mi n th e boxes . (Tr , 93. ) Also , h e di dno t flush th e nozzle s out . (Tr . 93. ) Instead , afte r iJie nozzle s were drained , the y wer e pu t dow n fo r n o more tha n afe w minute s before the y wer e boxe dan dplace di n Hatfield' s car . (Tr . 78. ) Late r tha t day , Hatfiel dtendere dtw o fiberboardboxe s containin g atotal o f 1 7 nozzle s t o FedEx i n Wes t Columbia , Sout

h Carolina , fo

r shipmen t b y ai r to Husk y headquarter s i n Pacific , Missouri. ^ (Complainant' s Exhibit s 1 and3. ) Hatfiel duse dhi s hom e addres s i n Lexington , Sout h Carolina , a s th e poin t

of origin . Hatfiel ddi dno t prepar e shippin g papers , o r mar k o r labe l th e tw o outer

boxe s t o disclos e that

the y ^ FedE x indicate di n the inciden

t repor t tha t ""Da n Hartfiel d[sic ] Husky " wa

s the .sliippcr/offcro

r of thes e boxes . (Complainant' s Exhibi t I. )

^^ ^ SnseGt30 S XV d3e:S L 0103/62/8 0containe dhazardou s materials . Hatfiel duse dHusky' s FedE x accoun t number t o pa y fo r th e shipment . Bra d Baker , lltisky' s Executiv e Vic e President , testifie dtha t Husk y permit s it s customer s and outsid e salespeopl e t o us e it s FedE x numbe r t o ship document s an

dpaperwork

bac k to th e company . A s aresult , Bake r testified , h e assume dtha

t Hatfiel dor

hi s assistan t

had th e Husk y FedE x numbe r

before th e boxe s wer e tendere dfo r shipmen t b y ai r o n Jun e 8 , 2006 . (Tr . 191-192. ) I n respons e to th e FAA' s letter o f investigation , Baker

an dMark

Pittman , Pittman' s President , wrot e i n alette r date dJul y 20,2006 : O n th e day s precedin g th e shipmen t thre e Husk

y employee s (Joh n Myers , Richar dBenscoter , andJo e La-schke) wer e workin g vrit

h Dan Hatfiel da

t ates t location . Followin g th e conclusio n of th e tests , Dan "wa

s aske dt o mak e arrangement s to retur n th e product s t o Husky . IVhil

e employee s o f

Husk y aske d Dan t o mak

e th e shipmen t

arrangements , Dan actuall y shippe dth e product . (Complainant' s Exhibi t

3 a t 1-2, ) (Emphasi s added. ) However , a

t th e hearing , th e Husk

y employee s di dno t

testif y a s clearl y regardin g ho w Hatfiel dbecame responsibl e for shippin g th e use dnozzles . Bake r testifie dthat

he ha dnever bee n lol db y any Husk

y employe e that

that employe e ha dinstructe dHatfiel d regardin g shippin g th e nozzles , (Tr . 149) , an dthat i t wa s hi s understandin g that Husk y employee s di dno t

as k Hatfiel dt o shi p th e nozzles . (Tr . 183. ) Myers , Benscote r an d Laschke testifie da

i th e hearin g tha t

the y di dno t

giv e Hatfiel dan y instruction s abou t ho w or whe n t o shi p th e nozzle s t o Husk y headquarter s i n Missouri an ddenie dhavin g heard anyon e els e giv e any shippin g instruction s t o Hatfield . (Tr . 89-90 , 113,130 , 135. ) Myer s andLaschke testifie dtha t the y wer e aware o f

n o reaso n for

Hatfiel dto shi p th e nozzle s t o Husk

y b y overnigh t

delivery . (Tr . 89 , 131. ) Myer s testifie dthat h e understoo dthat

th e nozzle s woul db e returne dt o Missouri , an dthat h e di dno t

expec t

^ ^ ^ SnSGGtSO S XV d 8e:S L 0L0S/G2/3 0Hatfiel dto driv e th e nozzle s there . (Tr . 94-95. ) Liischke , i n contreist , testifie dthat h e di d no t expec t that th e nozzle s woul db e returne dt o Husky' s headquarter s i n Missoxir i an d that Hatfiel dcoul dhav e throw n th e nozzle s away , althoug h non e o f th e Husk y employee s tol dHatfiel dtha t

h e coul ddiscardth e nozzles . (Tr . 137-138. ) A s FedE x explaine di n th e Hazardou s Material s Inciden t Report that i t completed , ther e v^a s "vapo r (gas ) dispersion " comin g fromth e shipment . (Complainant' s Exhibi t 1. ) Consequently , FedE x di dno t transport th e boxes . FedE x contacte dth e FAA abou t thi s incident , an dStac i Baldwin , a n FAA Hazma

t SpecicJist , wa s assigne dt o investigat e thi s incident . She wen t t o th e FedE x sort

facilit y o n Jul y 10 , 2006 , an dsa w tw o bi g boxes , neither o f whic h ha dany hazardou s material s marking s o r

labels . (Tr . 19 , 27. ) Bo x #1 containe dStyrofoa mpeanut s an dtlire e nozzle s with blac k

handle s wrappe din bubbl e wrap . (Tr . 19 ; Complainant' s Exhibi t 2 , photograph s 1 -8. ) Bo x #2 containe d1 4 nozzles , eac h packe di n a n individual bo x wit

h Husky' s nam e printe do

n it . (Tr . 19 ; Complainant' s Exhibi t 2 , photograph s 9-17. ) Sh e di dno t receiv e any shippin g paper s for thes e boxes . (Tr , 15 , 27. ) Baldwi n wrot e in her statemen t that "th e content s o f

thi s packag e wer

e discovere ddu e to th e heav y vapor s coinin g fro mth e box. " (Respondent' s Exhibi t 5 a t 3. ) Sh e testifie dthat

sh e smelle dgasolin e fro

mBox #2 . (Tr . 18 , 21 , 39. ) Bo x #2 containe don e individua l bo x tha t bada"gassy " stain . (Tr . 22 ; Complainant' s Exhibi t 2 , pictvire s 15-17. ) Baldwi n opine dtha t residual gasolin e containe di n th e gasolin e fue l nozzl e packe di n tha

t individual bo x cause dth e stain . Sh e base dthi s opinio n upo n he r observatio n that

th e nozzle' s discharg e en dpointe dto th e stain . Actually , tha t particula r nozzl e ha dagree n handle , an da s sh e testified , diese l fue l nozzle s generall y hav e gree n

£30/900 0 SW O ^ „„ . ^^^ snssetso s xv d3e:s L otos/es/a ohandle s whil e gasolin e nozzle s hav e blac k handles . (Tr . 34. ) N o test s wer e don e t o ascertai n whethe r

th e stai n wa s cause dby diese l fue l o r gasoline , an dBaldwi n di dno t kno w whether

tha t particular

nozzl e hadbee n use dfo

r diese l fue

l or gasoline . Jac k Peter s testifie da s an exper t i n th e fieldo f

hazardou s material s regulation s o n behal f of Husky . Peter s testifie dbase don hi s examinatio n of photograp h 1 7 that

"i t woul db e adicse l stai n base despeciall y on th e handl e tha t wa s tliere an dth e fact

tha t i t wa s ther e severa l day s afte r whatever mad e th e stai n cause dit " (Tr . 221. ) Inspecto r Baldwi n testifie dthat

whethe r th e nozzle s containe ddiese l fue l o r gasoline , the y wer e properl y categorize da s "dangerou s good s i n apparatus. " (Tr . 53. ) Sh e state dthat

diese l fuel , like gasoline , i s ahazardou s material . (Tr . 42. ) Afte r th e FAA notifie dHusk

y abou t it s investigation , Husk

y arrange dfor hazardou s material s transportatio n trainin g fo r fiv e o f it s employees . FedE x provide d on e trainin g course , an dJac k Peter s andAssociate s ra n th e othe r cours e attende db y Husk y employees . (Tr . 170. ) Th e Husk y employee s complete dthei r trainin g i n Augus t 2006 . (Tr . 171-172 , 174. ) Husk y introduce dcopie s o f

th e certificate s receive db y it s employee s afte

r the y complete dth e training , a s wel l a s othe r doctimcntatio n pertainin g t o th e training . (Tr . 171-172 ; Respondent' s Exhibi t 3, ) TI L Th e Initia l Decisio n Th e ALJ hel dthat

Hatfiel dserve da s a

n agent for Husky . H e wrote : Th e critical fac t

i n determinin g liability i s tha t Hatfiel dacte da

t th e behes t o f Husk y employee s wh o were acting , o r apparentl y acting , o n Husky' s behal f Nozzle s i n th e fieldroutinel y were returne dt o headquarter s ('ir . 94) . Husk y employee s designate dHatfiel dt o perfor mtha t task . Thes e circumstance s create d a n agenc y relationship . See , e.g. , Holley v . Crank , 38 6 F.3 d1248 , 125 2 ( 9 Cir . 2004) . (Initial Decisio n a

t 3. ) Tli e AL J rejecte dHu.sky' s argument s tha t a n agenc y relationshi p

"l!:^!! ^

^^ ° ^ ^Vd 3WSG61,303 XV d i8:S L 0103/63/8 0di dno t exis t becaus e it s employee s ha dno t directe dth e manne r

o f shipmen t

o r packagin g o f th e nozzles . Accordin g t o th e ALJ , thes e detail s di dno t chang e th e natur e o f

th e relationshi p betwee n Husk y an dHatfield . Regardin g th e shipment , th e AL J conclude dtha t th e evidenc e showe dtha t diese l luc l ha dleake dfro madiese l fue l nozzl e insid e on e o f th e individtia l boxe s i n Bo x #2 . (Initia l Decisio n a t

4. ) Th e AL J wrot e tha t hi s determinatio n tha t

dicse l fiiel leake dfirom adiese l fue l nozzl e - rathe r tha n gasolin e fro magasolin e fue l nozzl e a s allege di n th e complain t

- di dno t

affec t hi s lega l findings an dconclusion s becaus e th e HM Rregulat e bot h dicse l fue l an dgasoline . H e decide dt o "permi t th e Complain t

t o confor mt o th e proof" * (Initia l Decisio n a t 4-5. ) TTi c AL J rejecte dHusky' s othe r argument s tha t

complianc e wit h th e HM Rwa s no t require dbase dupo n exception s i n th e regulations . (Initia l Decisio n a t 5-6. ) H e conclude dtha t

Husk y violate dal l o f

th e allege dregulations . Afte r weighin g th e totalit y o f th e fact s an dcircumstances , th e AL J conclude dtha t a n $8,00 0 civi l penalt y wa s appropriate . O n th e on e hand , h e foun dtha t asignifican t penalt y wa s appropriat e bccaas e o f th e risk s pose db y ahidde n shipmen t an dbecaus e Husk y use dhazardou s material s i n th e cours e o f it s business . O n th e othe r hand , h e foun dtha t

Husky' s witnesse s credibl y testifie dtha t the y attempte dt o drai n th e nozzle s thoroughl y an dtha t

th e "th e residua l ainotm t o f fiie l i n eac h o f

th e nozzle s woul dhav e

* I n determinin g t o confor

mth e complain t

t o th e proof

, th e AL J relie di n part upo n th e followin g reasoning : Responden t

ha s no t suggeste dtha

t i t wa s surprise dor

otherwis e prejudice db

y th e differenc e betwee n th e allegation s o f th e Complain t

andth e evidenc e adduce da t th e hearing . N o compellin g reaso n exist s t o hol dComplainan t strictl y t o th e Complaint' s literal words . (Initial Decisio n at

6. )

^^<>^^00 mSW O ^ VV d StLSe6t30 3 XV d i8:9 L 0103/63/8 0bee n measure d'i n drip s rathe r tha n ounce s or

liters.' " (Initial Decisio n a t 8. ) H e als o foun dtha t th e Husky' s respons e t o thi s inciden t - sendin g it s employee s for hazardou s material s trainin g - wa s amitigatin g factor . (Initial Decisio n a t 8. ) IV . Resolutio n of

th e Issue s o n Appea l Husk y argue s o n appeal tha t

i t was erro r fo r th e ALJ t o findtha

t Hatfiel dwa s a

n agent fo r Husky . Hatfield , Husk

y notes , was employe db y Pittman , amanufacturer' s representative . Pittma

n sol dHusky products , a s well a s th e product s o f othe r manufacturer s of

petroleu mproducts , o n acommissio n basis . Th e evidenc e indicated , Husk y argues , that

Husk y di dno t giv e Hatfiel dany directio n regardin g ho w t o shi p th e nozzles , andthat

Hatfiel dprobabl y ha dHusky' s FedE x accoun t numbe r before th e da

y of th e sliipment . Th e ALJ , Husky notes , mad e n o findings showin g tha t Husk y ha dth e right t o contro l Hatfield' s behavio r an dconduct , regardles s of whethe r it s employee s aske d Hatfiel dt o shi p th e nozzle s t o Missouri . Husk y argue s tha

t i t wa s erro r fo r th e AL J to conclud e that

th e Hatfiel dacte da s Husky' s agen t i f Husk y di dno t hav e th e righ t

t o contio l Hatfield' s behavio r an dconduct . Husk y i s correct . T o establis h a n agenc y relationslii p betwee n Hatfiel dan d Husky , it i s no t enoug h t o sho w that

Hatfiel dshippe dth e nozzle s a t Husky' s request . Accordin g to th e Restatemen t (Third ) o f

Agenc y § 1.0 1 (2006) : Agenc y i s th e fiduciary relationshi p that arise s whe n on e perso n ( a"principal" ) manifest s assent

t o anothe r

perso n (an agent" ) that

th e agen t shal l ac t o n th e principal' s behal f

an dsubjec t

t o th e principal' s control , an dth e agen t manifest s assen t or otherwis e consent s s o t o act . A s explaine di n Comment c t o Restatemen t

(Third ) o f

Agenc y § 1.01 : A principal' s right

t o contro l th e agent

i s aconstan t

acros s relationship s o f agency , bu t

th e conten t

o f specifi c meanin g of

th e righ t varies . Thus , aperso n may b e a n agen t althoug h th e principal lack s th e right t o contro l th e ful

l rang e o f

S30/600i a su a * VV d 31?LSSGt30 3 XV d iC'S t 0t03/63/8 0th e agent' s activities , ho w th e agen t use s time , o r

th e agent' s exercis e o f professional judgment . A principal' s failure t o exercis e th e right o f contro l doe s no t eliminat e it , no r

i s it eliminate db y physical distanc e betwee n th e agent an d principal . Howe\'er , if

aperso n ha s th e right

t o contro l onl y "th e resul t o f th e wor k [by anothe r person] , an

dno t th e mean s b y whic h i t

i s accomplished,.. . a n independen t contracto r relationshi p exists. " Aer o Continente . S.A.> FA A Order No . 2003- 8 atl 6 (Septembe r 12 , 2003) , quotin z I n r e Coupo n Clearin g Service . Inc. , 11 3 F.3 d1091,109 9 (9" " Cir . 1997) . In thi s case , th e FA A presente dn o evidenc e concernin g th e relationshi p betwee n Hatfiel dandHu.sk

y beyon dth e equivocal testimon y regardin g ho w th e nozzle s cam e t o b e shippe dbac k

t o Husky . Ther e wa s n o evidenc e describin g an y contractual arrangemen t

betwee n Hatfiel dan

dHusk y o r betwee n Husk

y an dPittman , no r

wa s ther e any evidenc e that

Husk y either controlle dor

ha dth e right

t o contro l Pittman' s employee s when the y acte da s sale s representative s for Husky . Conseqtiently , whethe r Hatfiel d agree dt o serv e a s an agen t subjec t to Husky' s contro l fo

r th e discret e fiinctio n involve d i n thi s cas e - th e shipmen t o f th e use dnozzle s - canno t b e determine don thi s record. ' V . Conclusio n I n light of th e foregoing , Htisky' s appea l i s granted , th e ALJ' s initial decisio n i s reversed , an dHusky i s no t liabl e fo r th e paymen t

o f acivi l penalty . I , RANDOLP H BABBIT! , ADMINISTRATO R Federa l Aviatio n Administratio n

^ Th e FAA di dno t

addres s tli e issu e o f

agenc y i n it s openin g argumen t

an ddidpresen t

n closin g argument or fil e arepl y brie f

Consequently , th e recorddoe s no t reflec t th e agency' s vjc w regardin g whethe r

ther e i s any basi s fo

r holdin g Husk

y liabl e fo r Hatfield' s failur

e t o prepar e th e packag e properl y for

shipment . Therefore , whethe r ther e i s any othe r

basi s fo r afindin g o f liabilit y unde r th e HM Rothe r

than agenc y i n acas e such a s thi s on e in whic h hazardou s material s are ^ive n by on e part

y to anothe r

fo r tenderin g t o acarrier

fo r transportatio n i s no t

decided . 1 0

'''^^^'• ^

S^ ° ^ VV d 3WSGGt30 3 XV d iG:S t 0t03/e3/8 0APPENDI X [Th e regulation s quote di

n thi s Appendi x wer e printe din th e 200 5 Volum e 4 9 o f th e Cod e o f

Federal Regulations , whic h wa s curren t

betwee n Octobe r 1 , 2005 , an dSeptember

30 , 2006. ] 4 9 C.F.R . § 171.2(a) (2005 ) provides :

(a ) Eac h perso n wh o perform s afunctio n covere db y thi s subchapte r mus t perfor mthai functio n i

n accordanc e wit

h thi s subchapter . 4 9 C-F.R . § 172.200(a ) (2005 ) provides :

(a ) Descriptio n o f

hazardou s material s required . Excep t a s otherwis e provide din thi s subpart , eac h perso n wh o offer s ahazardou s materia l for transportatio n shal l describ e th e hazardou s material o n th e shippin g pape r i n th e manne r require db y thi s subpart . 4 9 C-F.R . § 172.202(a)(1 ) - (3 ) and(5 ) (2006 ) provide :

(a) Th e .shipping descriptio n o f ahazardou s material o n th e shippin g paper mus t include : (1 ) Th e prope r

shippin g nam e prescribe dfor th e materia l i n column 2 o f the § 172.10 1 table ; (2 ) Th e hazar dclas s o r

divisio n number

prescribe dfor

th e material , a s show n i n colum n (3 ) o f

th e § 172.10 1 table . * * * (3 ) Th e identificatio n numbe r prescribe dfo

r th e material a s show n i n column 4 o f

th e § 172.10 1 table ; + t t (5 ) Th e tota l quantity o f hazardou s material s covere db y th e descriptio n mus t b e indicate d(by mas s o r

volume , or

b y activit y fo r Clas s 7 materials ) an d mus t includ e a n indicatio n o f

th e applicabl e xmi

t o f measure . Fo r

example , "20 0 kgs. " o r "5 0 L. " * * * 4 9 C.F.R . § 172.203(f

) (2005 ) provides : (f ) Transportatio n b

y air . A statemen t

indicatin g tha t

th e shipmen t

i s withi n th e limitation s prescribe dfor either passenge r

andcarg o aircraf

t o r carg o aircraf t only mus t

b e entere do n th e shippin g paper .

1 1 ^^(^/^^^ ^

SW Q * VV d 3nseGt30 3 XV d iS:S L 0103/63/8 04 9 C.F.R . § 172.204(a ) (2005 ) provides : (a ) General . Excep t

a s provide di n paragraph s (b ) an d(c) o f thi s section , eac h perso n wh o offer s ahazardou s materia l fo r transportatio n shal l certif y tha t th e materia l i s offere dfo r transportatio n i n accordanc e wit h thi s subchapte r b y printin g (manuall y o r

mechanically ) o n th e shippin g pape r containin g th e require d shippin g descriptio n th e certificatio n containe di n paragrap h (a)(l ) o f thi s sectio n o f th e certificatio n (declaration ) containin g th e languag e containe di n paragrap h (a)(2 ) o f thi s section . (1 ) "Thi s i s t o certif

y tha t th e above-name dmaterial s ar e properl y classified , described , packaged , marke dan dlabeled , an dar e i n prope r conditio n fo r transportatio n accordin g t o th e applicabl e regulation s o f th e Departmen t

o f Tran,sportation. " NOTE : I n lin e on e o f

th e certificatio n th e word s "herein-named " may b e substitute dfor

th e word s "above-named" . (2 ) " I hereb y declar e tha t th e content s o f

thi s consignmen t

ar e full y an d accuratel y describe dabov e b y th e prope r shippin g name , an dar e classified , packaged , marke dan dlabeled/placarded , an dar e i n al l respect s i n prope r conditio n fo r

transpor t

accordin g l o applicabl e internationa l an dnationa l governmenta l regulations. " 4 9 C.F.R . § 172.204(c)(1 ) - (c)(3)(2005 ) provides :

(c ) Transportatio n b y ai r - (1 ) General . Certificatio n containin g th e followin g languag e ma y b e use di n plac e o f th e certificatio n require db y paragrap h (a ) o f

thi s section : I hereb y certif

y tliat th e content s o f

thi s consignmen t

are fully andaccuratel y describe dabov e b

y proper shippin g name an dar e classified , packaged , marke dand labele dandi

n proper conditio n for

carriag e b y air

accordin g t o applicabl e nationa l governmen t

standards . NOT E T O FARAGRAT H (e)(1) : I n th e certification , th e word"packaged ' may b e use dinsteado f

th e wor d"packaged " unti l Octobe r 1 , 2010 . (2 ) Certificat e i n duplicate . Eac h perso n wh o offer s ahazardou s materia l t o a n aircraf

t operato r fo r transportatio n b y ai r

shal l provid e tw o copie s o f th e certificatio n require di n thi s section . (Se e § 175.3 0 o f thi s subchapter. ) (3 ) Additiona l certificatio n requirements . Effectiv e Octobe r 1 , 2006 , eac h perso n wh o offer s ahazardou s materia l fo r transportatio n b y ai r

mus t ad dt o th e certificatio n require di n thi s sectio n th e followin g statement :

1 2 630/310 0 sw a VVd 3t?LSG6t30 3 XV d LZ-<i V 0L03/63/8 0" I declar e that al l of th e applicabl e ai r

transport requirement s hav e bee n met. " * * * 4 9 C.F.R . § 172.60 0 (2005 ) provides :

(a ) Scope . Excep t

a s provide din paragrap h (d ) o f thi s section , thi s subpar

t prescribe s requirement s fo r providin g an

dmaintainin g emergenc y respons e informatio n durin g transportatio n an dat facilitie s where hazardou s material s are loade dfor transportation , store dincidenta l t o transportatio n o r otherwis e handle d dm-in g an y phas e o f

transportation . (b ) Applicability . Thi s subpar t applie s t o person s wh o offe r fo r transportation , accep t

for transportation , transfer

o r otherwis e handl e hazardou s material s durin g transportation . (c ) Genera l requirements . N o perso n t o who mthi s subpar t applie s may offe r for transportation , accep t

fo r transportation , transfer , store o r otherwis e handl e durin g transpori;atio n ahazardou s materia l unless : (1 ) Emergenc y respons e informatio n conformin g t o thi s subpart i s ijnmcdiatel y availabl e for us e a t al l time s th e hazardou s material i s present ; and (2 ) Emergenc y respons e informatio n includin g th e emergenc y respons e telephon e number , require db y thi s subpart i s immediatel y availabl e t o an y person , who , a s arepresentativ e o f aFederal , State or

local government

agency , respond s t o a

n inciden t involvin g ahazardou s material , or i s conductin g a

n investigatio n whic h involve s ahazardou s material . (d ) Exceptions . Th e requirement s of thi s subpar

t d o no t appl y t o hazardou s material whic h i s excepte dfromth e shippin g paper requirement s of tlii s subchapte r

o r amaterial properl y classifie da s a n ORM-D . 4 9 C.F.R . § 172.602(b)(3 ) (2005 ) provides :

+ + * (b ) Formo f

information . Th

e informatio n require dfor ahazardou s amteria l by paragrap h (a ) o f thi s sectio n mus t

be :

* • • (3 ) Presente d- (i ) O n ashippin g paper ; (ii ) In adoctxment , other

tha n ashippin g paper , that include s both th e basi c descriptio n an dtechnical nam e o f th e hazardou s materia l a s require db y § § 172.20 2 an d172.203(k) , th e ICA O Teclinical Instructioi \th e TMD G Code , o r tli e

1 3 S30/St0i a sw a VVd 3tLSG6t30 3 XVd iZ<i l OL03/63/8 0TD G Regulations , a s appropriate , an dth e emergenc y respons e informatio n require db y thi s subpar

t (e.g. , amateria l safet

y dat asheet) : o r (iii ) Relate dt o th e informatio n o n ashippin g paper , awritte n notificati'o n to pilot-in-command , or

adangerou s carg o manifest , i n aseparat e documen t {e.g. , a n emergenc y respons e guidanc e document) , i n amanner that cross-reference s th e descriptio n o f

th e hazardoti s material on th e shippin g pape r wit h th e emergenc y respons e informatio n containe di n th e document . * * * * * * 4 9 C.F.R- § 172.702(a ) (2005) :

(a ) A hazmat

employe r slial l ensure tha

t eac h o f it s hamat employee s i s trame di n accordanc e with th e requirement s prescribe di n thi s subpart 4 9 C.F.R . § 173,1(b ) (2005) :

(b ) A shipmen t

of hazardou s material s that

i s no t prepare di n accordanc e wit h thi s subchapter

ma y no t b e offere dfo

r transportatio n by air , highway , rail , o r water . I t i s the responsibility of

eac h hazmat

employer subjec t t o th e requirement s of

thi s subchapte r

to ensur e tha

t eac h hazmat

employe e i s traine di n accordanc e wit

h th e requiremen t

prescribe din thi s subchapter . I t i s th e dut y o f eac h perso n wh o offers hazardou s material s fo r transportatio n t o instruc t eac h o f hi s officers , agent , an

demployee s havin g any responsibility for preparin g hazardou s material s for

shipmen t a s to applicabl e regulation s i n thi s subchapter . 4 9 C.F.R . § 173.27(b)(1 ) (2005) :

(b ) Package s authorize do n boardaircraft . (1 ) Whe n colum n 9 aof th e § 172.10 1 tabl e indicate s that amaterial i s "Forbidden" , tha t materia l may no t

b e offere dfo r transportatio n or

transporte daboardaircraft . 49C,F.R . § 173-222(2005) :

Hazardou s material s i n machinery o r apparatu s ar

e excepte dfro

mth e specificatio n packagin g requirement s of thi s subchapter

whe n package daccordin g t o thi s section . Hazardou s material s i n machiner y or apparatu s mus t

b e package d i n stron g oute r

packagings , unles s th e receptacle s containin g th e hazardou s are afforde dadequat e protectio n fo r th e constructio n o f

th e machinery or

apparattis . Eac h packag e mus t

confor mt o th e packagin g requirement s o f subpart B of thi s part , excep t

fo r th e requirement s i

n 173.24(a)(1 ) an d173.27(e ) an dth e followin g requirements : (b ) Th e nature of

th e containmen t

mu.stb e a s follow s 1 4

S30/tPL0i a sw a < • VVd 3^1566^30 3 XV d 8e:S L 0L03/63/8 0(1 ) Damag e t o th e receptacle s containin g th e hazardou s material s durin g transport i s unlikely . However , i n th e even t o f damag e t o th e receptacle s containin g th e hazardou s materials , no leakag e o f th e hazardou s material s from th e equipment , machinery o r apparatu s i s possible . A Icakproo f line r may b e use d to satisf y thi s requirement . (2 ) Receptacle s containin g hazardou s material s mus t b e secure dan d cushione ds o a s to preven t thei r breakag e o r

leakag e an ds o a s t o contro l thei r movemen t

withi n th e equipment , machinery o r apparatu s durin g norma l condition s of

transportation . * * *

* * + (c ) Th e tota l ne t

quantity o f

hazardou s material s containe di n on e itemo f equipment , machinery o r

apparatu s mus t

no t excee dth e following : * * * (2 ) 0. 5 L (0. 1 gallons ) i

n th e cas e o f

liquids ; ' ^ * *

1 5 £30/510 0 sw a VVd 3tLSe6t'30 3 XV d 8G:S t 0t03/63/8 0

## SERVE D OCTOBER , 31 . 200 8 RFCFIVF n UNITE D STATE S DEPARTMEN

T O FTRANSPORlATI(K r

^ CL I V CI J OFFIC E O FHEARING

S j^Q V 0 3 200 8 WASHINGTON , D.C . 

## HEARIN G DOCKE T FEDERA L AVIATIO N ADMINISTRATION ,

Complainant , V . HUSK Y CORPORATION . Respondent . FA A DOCKE T NO . CP07SO001 7 (Civi l PenaltyAction )

DM S NO . FAA-2007-012 0 INITIA L DECISIO N O F ADMINISTRATIV E LA W JUDG E RICHAR D C . GOODWI N Found : 1 ) Responden t

i s hereb y asiiessed4 civil penalty o f S8,000 . I , Backgroun d Husk yCorporatio n (hereinafte r"Respondent " o r"Husky") , o f Pacific , MO , manufacture s an d sell s equipmen t fo rth e petroleu m industr y(Tr . 142-43) . O n Jun e 8 , 2006 , accordin g t o th e Complain t o f th e Federa l Aviatio n Administratio n (hereinafte r"Complainant, " "FAA, " o r"th e agency") , Husk yoffere d i n ai r transportatio n a n "undeclared " shipmen t o f hazardou s material s (Exh . R-6) . "Undeclared " mean s tha t th e shipmen t containe d n o warnin g o rnotic e o f th e hazardou s natur e o f it s content s (Tr , 17) . Complainan t identifie d th e hazardou s malerial s a s gasolin e an d gasolin e pum p nozzles . B ythi s act , Complainan t says , Responden t violate d sixtee n Hazardou s Material s Regulation s ("HMRs") , 4 9 CF R §17 1 etseq. , viz. , §§171.2(a) , 172.200(a) , 172.202(a)(1)-(a)(3) , 172.202(a)(5) , 172.203(f) . 172.204(a ) o r(c)(1) . 172.204(c)(2) . 172.204(c)(3) , 172.600 , 172.602(b)(3) , 173.1(b) , 172.702(a) , 173.27(b)(1) . an d 173.22 2 (Exh . R-6) . Thes e provision s generall yse t ou t markin g an d simila rinformationa l requirement s fo rcertai n hazardous-material s shipment s a s wel l a s trainin g obligation s fo rentitie s involve d i n suc h shipments . Th e agenc yseek s a civi l penalt yo f $15,00 0 (Exh . R-6 ; Tr . 6) . Responden t denie s th e charges . I t argue s tha t i t wa s no t th e shipper , an d s o canno t b e hel d liable . Th e shipmen t I n an yeven t containe d n o hazardou s

e30/8L0i a SW O VVd 31?LSe81?30 3 XV d 8e:S L 0L03/G3/8 0materials , i t say s further . Husk yals o assert s tha t th e shipmen t i s properl y characterize d a s fallin g outsid e HM R requirement s (Tr . 7-8 , 216) . Finally , i t argue s that , a s a n entit yno t regularl yofferin g hazardou s materials , i t ha d n o obligatio n t o offe rtraining ; nonetheless , i t institute d a n employe e trainin g progra m afte rth e incident . A hearin g was hel d o n May28 , 2008 , i n S t Louis , MO . I determine d tha t a writte n decisio n wa s reasonabl e an d appropriat e unde rth e circumstance s (Tr . 276-78) . I hol d tha t th e fact s an d circumstance s o f thi s case , includin g factor s i n mitigation , warran t a n assessmen t agains t Responden t o f $8,000 . 11 . Liabilit y Th e questio n o f responsibilit yfo rplacin g th e shipmen t int o th e strea m o f commerc e mus t b e considere d first . Fo ri f Respondent , a s i t assert:s , wa s not , i n fac t o ri n law , th e shipper , the n i t i s no t liabl e fo ran yviolatio n stemmin g fro m th e shipment . Th e fact s sho w tha t Responden t wa s th e shipper . A s such , i t mus t answe rfo ran yviolations . O n Jun e 8 , 2006 , severa l Husk yofficial s wer e i n Sout h Carolin a testin g noz,ile s fo ra possibl e customer . Responden t ha d 2 0 nozzle s at th e site . Sixtee n wer e gasolin e nozzles , an d fou rwer e diese l (Tr . 71-73) . Afte rth e demonstration , employee s o f Husk yaske d a n individual , Da n Hatfiel d ("Hatfield") , t o arrang e t o shi p th e nozzle s t o Husky' s headquarter s I n Missour i (Exh . C-2 , pp . 1-2) . Afte rth e nozzle s wer e draine d an d packaged , the ywer e place d i n Hatfield' s ca r(Tr . 77-78 , 83-88) . Hatfiel d wa s no t instructe d o n ho w o r whe n t o effec t th e shipmen t (Tr . 88-89 , 113) . Hatfiel d was no t a Husk yemployee . H e wa s a salesma n fo rJac k Pittma n an d Associate s ("Pittman") . a manufacturer' s representative . Pittma n sell s product s t o distributor s an d en d users o n behal f o f Husk yan d othe r manufacturers . Husk

ypay s Pittma n o n a commissio n basi s (Tr . 72-74 , 92 , 144 - 45 , 147 ; Exh . R-2 , p , 1) . Late rtha t sam e day , Jun e 8 , Hatfiel d carrie d ou t th e tas k tha t Husk

y employee s ha d aske d hi m t o perform . Usin g hi s hom e addres s a s th e poin t o f origin , h e tendere d t o Federa l Expres s Corporatio n ("FedEx" ) a t Wes t Columbia , SC , tw o fiberboar d boxe s fo rshippin g t o Husk yheadquarters . On e o f th e boxe s containe d thre e gasolin e pum p nozzles . Th e othe rcontaine d fourtee n nozzles , eac h individuall ypackage d i n it s ow n fiberboar d bo x(Tr . 19-21 , 28-29 ; Exhs . C- 1 an d C-2 , pictur e 15 ; Exhs . R-4 an d R-5 , p . 3) . Hatfiel d use d Husky' s FedE x accoun t numbe r(Tr . 183) .

830/2.10 0 SW O * VV d 3t?LSe6t30 3 XV d SS-S t 0t03/63/8 0Th e critica l fac t i n determinin g liabilit yi s tha t Hatfiel d acte d a t th e behes t

o f Husk yemployee s wh o wer e acting , o rapparentl yacting , o n Husky' s behalf . Nozzle s i n th e fiel d routinel ywer e returne d t o headquarter s (Tr . 94) . Husk y employee s designate d Hatfiel d t o perfor m tha t task . Thes e circumstance s create d a n agenc yrelationship . See , e.g. , Holle yv . Crank , 38 6 F.3 d 1248 , 125 2 ( 9 Cir . 2004) . Husky , i n assertin g tha t Hatfield' s action s shoul d no t b e impute d t o it , point s ou t tha t th e manne ri n whic h th e nozzle s wer e packe d an d th e typ e o f transportatio n use d wer e detail s lef t t o th e judgmen t solel yo f Hatfield . Bu t thes e were , o f course , details . The ydi d no t chang e th e natur e of th e relationship . O f centra l an d overridin g significanc e i s tha t Hatfield , i n arrangin g t o shi p th e nozzles , acte d a t th e directio n o f Husk yemployees . H e use d Husky' s FedE x accoun t numbe rt o d o so . Hatfiel d i n thi s transactio n acte d a s Husky' s agen t I conclude . Hatfield' s action s therefor e ar e impute d t o Husky.' ' Ill , Finding s an dConclnsion s Th e salien t fact s ar e straightforward . Responden t tendere d fo rshipmen t aboar d aircraf t hazardou s material s lackin g th e safeguard s th e HMR s requir e fo r suc h shipments . B

ydoin g so . Responden t violate d th e HMR s se t ou t i n Complainant' s Complaint . A n appropriat e civi l penalt ywil l b e se t Th e FAA learne d of th e shipmen t th e da yafte rRespondent' s tender , whe n i t wa s notifie d b yth e carrie rhire d t o transpor t th e packages . Federa l Expres s Corporatio n (Tr . 14 ; Exh . R-5 , p . 3) . FedE xsubsequentl ysen t t o th e agencya report require d b ycarrier s involve d i n a hazma t incident . I n it s Hazardou s Material s Inciden t Report , FedE xstate d tha t i t ha d uncovere d a n undeclare d shipmen t o f gasoline . It s employees , i t said , wer e alerte d b yga s o rvapo r emittin g fro m th e shipmen t (Exh . C-1 ; Exh , R-5 , p . 3 ; Tr . 14-18) . On e o f th e individua l boxe s wa s stained . Th e stain , accordin g t o th e report , was gasolin e residue. ^ FAA specia l agen t an d hazardous-material s specialis t Stac i Baldwi n investigate d th e incident . Sh e pointe d ou t tha t gasolin e pum p nozzle s ar e a regulate d hazardou s materia l know n a s Dangerou s Good s i n Apparatus (se e Haziardou s Material s Tabl e immediatel yfollowin g §172.101 ; Tr . 25-27 , 32) . Th e sourc e o f th e apparen t leakag e whic h ha d le d t o th e stain , sh e said , wa s gasolin e

' Se e generall y Westai r

Commute r

Airlines , Inc . d/'h/ aUnite dExpress , FA A Order'No . 93-1 8 (Jun e 10 , 1993) . Tha t

Hatfiel dma y hav e performe dih c las k eithe r i n amaime r

difltrcn i fromHusk y procedures , i n a n unauthorize dmanner , o r eve n i n amanne r

contrar y t o la w doe s no r chang e th e natur e o f

th e relationship . Wesiair , pp . .5-7 ; W . Pag e Prosse r e r a/, , grosse r

an dKeeto n o n th e T,a

w o f Torts , § 70 , a t

502-50 3 (5t hed , 1984) , Th e clai mo f

Husk y safet y oftlcia l Joh n Myer s tha t h e woul dno t

hav e shippe dtiie nozzle s unles s the y wer e "sufficiently " drie dou t ('JY . 95) , then , doc s no t

alre r th e agenc y relationshi p Husk y ha d establishe dwit hHatfield . ^ Exh , C-2 . picture s 15 , 16 , an d17 ; Exh . R-5 , p . 3 , Althoug hth e repor t stare s tha i th e shipper/offeror' s surnam e i s "Harttleld, " th e recor destablishe s tha t di e repo n iva s referrin g l o Da n Hatfield . Ss& . eg . Kxh . C-3,p , 1 .

E!20/8L0i aSW O * VV dSnSSetSO S XV dSS-S L0L02/62/9 0(Tr . 33 , 56 ; se e Exh . C-2 , pictur e 15) . Gasolin e als o i s name d i n th e HMR s a s a

hazardou s materia l an d subjec t t o th e regulations ' requirement s an d restrictions. ' Agen t Baldwi n supporte d th e allegation s o f th e Complaint , Sh e state d tha t th e shipmen t a

t issu e faile d t o observ e an yHM R requirement s triggere d byit s nature . Sh e conclude d tha t Responden t violate d eac h o f th e HMR s se t ou t i n th e Complain t (Tr . 27) . Th e preponderanc e o f th e evidenc e showe d tha t th e material s i n th e shipmen t include d diese l pum p nozzle s a s wel l a s gasolin e pum p nozzles . Th e evidenc e als o showe d tha t a substanc e di d caus e th e stai n o n on e inne r package , bu t tha t i t wa s diese l fuel , no t gasoline . Th e diese l fuel , I furthe r conclude , ha d leake d fro m insid e th e package . Testimon yfro m witnesse s fo rbot h partie s sufficientl ysupporte d thes e determinations . Agen t Baldwi n testifie d tha t sh e ha d remove d fro m th e staine d bo xth e nozzl e insid e i t befor e sh e too k a photograph . Sh e place d th e nozzl e o n to p o f th e offendin g box . He rphotograp h shows a nozzl e wit h a gree n handle . Pum p nozzle s wit h gree n handle s customaril yar e use d fo rdiese l fuel ; gasolin e normall yi s pumpe d throug h nozzle s wit h handle s tha t ar e blac k (Tr . 35-36 , 48 - 49 ; Exh . C-2 , pictur e 17) . Jac k Peters , a consultan t o n hazardous-material s regulatio n an d a witnes s fo rRespondent , conclude d tha t th e nozzl e photographe d b yagen t Baldwi n i s a diese l nozzl e an d tha t th e stai n i n th e pictur e i s a diese l stai n (Tr . 220-22 ; se e Exh . C-2 , pictur e 17) . I n support , h e testifie d no t onl ytha t gree n i s th e colo rcustomaril yuse d fo rdiese l handles ; h e adde d tha t whil e gasolin e wil l evaporat e afte rstaining , diese l fue l wil l no t (Tr , 220) , Further , whil e i t i s tru e tha t an yresidu e remainin g i n th e nozzl e I n questio n wa s no t teste d (Tr . 33 , 50) , n o evidenc e tende d t o sho w tha t Husk ybrok e wit h industry conventio n byusin g a nozzl e wit h a gree n handl e fo rgasolin e rathe rtha n fo r diesel . Th e evidenc e showin g tha t th e stai n wa s th e produc t o f diese l fuel , no t gasoline , an d tha t diese l pum p nozzle s wer e par t o f th e shipment , was persuasive . Thes e determination s d o no t affec t th e lega l finding s an d conclusion s herein . Diese l fuel , lik e gasoline , i s name d i n th e HMR s a s a hazardou s material . Diese l pum p nozzles , lik e gasolin e pum p nozzles , als o ar e hazardou s material s categorize d a s Dangerou s Good s i n Apparatu s (Hazardou s Material s Tabl e immediatel yfoWowin g §172.101 ; Tr . 53 , 222) . Althoug h th e Complain t assert s HM R violation s stemmin g solel yfro m th e undeclare d tende ro f gasolin e an d gasolin e pum p nozzle s (Exh . R-6) , Responden t ha s no t suggeste d tha t i t was surprise d o rotherwis e prejudice d b yth e differenc e betwee n th e allegation s of th e Complain t an d th e evidenc e adduce d at th e hearing . N o compellin g reaso n

' Hazardou s Material s Tabl e o f §172.101 . Responden t

artempte dt o cas t

doub t on Complainant' s conclusio n that

the packag e leake dfromth e inside , or tha t ii leake da

t all . See . e.g. , Tr , 47-49 . Whether th e packag e leake di s no t

directl y relevan t

t o th e violation s a

t issue . Tr . 54 ,

£20/610 0 SW O * VV d stLssetso s XV d 88;s L oLos/ee/8 0exist s t o hol d Complainan t strictl yt o th e Complaint' s litera l words . Therefore , I wil l permi t th e Complain t t o confor m t o th e proof. " Respondent' s attempt s t o sho w tha t th e material s involve d fal l withi n exception s t o HM R requirement s mis s th e mark . It s contentio n tha t th e diese l fue l i t carrie d qualifie s fo rth e small-quantit yexceptio n o f §173. 4 (Tr . 234 ) i s wrong . Sectio n 173. 4 ma yindee d b e invoke d whe n eleve n numbere d prerequisite s ar e me t (§173.4 ; Tr . 255) . Bu t Responden t faile d t o mee t a t leas t tw o o f them . First , packin g materia l mus t b e capabl e o f absoriDin g liqui d i n a n inne rreceptacl e (§173.4(a)(4)) . Th e lea k o f th e diese l fue l show s tha t th e packin g materia l faile d i n tha t task . Further , n o evidence , othe rtha n a hearsa y statemen t o f insufficien t credibility , demonstrate d tha t Responden t me t th e "drop test " prerequisit e (§173.4(a)(6) ; Tr . 257-58) . Responden t i n fac t acknowledge d tha t r t faile d t o mee t th e requirement s necessar yt o benefi t fro m th e §173. 4 exceptio n (Tr . 259) . No rdoe s th e HMRs ' Specia l Provisio n ("SP" ) 13 6 sugges t a n exemptio n fro m th e labelin g rule s otherwis e applicabl e t o th e shipmen t (se e "Code/Specia l Provisions " followin g §172.102j . S P 13 6 exempt s hazardou s material s fro m labelin g requirement s unde rcertai n conditions , bu t onl ywhe n the yar c offere d fo r transportatio n b ya metho d othe rtha n aircraft . Apparatu s suc h a s th e nojizle s ma yb e excepte d fro m HM R requirement s b yth e Associat e Administrato r respectin g an yfor m o f travel , includin g transportatio n b yair ; however , th e Associat e Administrato rgrante d n o exceptio n i n thi s cas e (Tr . 249-50) . Therefore , S P 13 6 dbe s no t appl yeither. ^ Neithe rd o th e exception s fro m labelin g requirement s fo r"limite d quantities " classe d a s flammabl e o r combustibl e liquid s pertain , becaus e thes e exception s ar e no t applicabl e fo r carriag e b yaircraf t (§173.150 ; Tr . 243) . Responden t als o asserte d tha t th e diese l fue l a t issu e coul d no t hav e bee n a hazardou s materia l becaus e it s flas h poin t wa s to o hig h t o b e considere d a s such . Husky' s consultant-witness , Jac k Peters , contende d tha t "ther e i s a goo d possibility " (Tr . 224 ) o r" a possibility " (Tr . 244 ) tha t th e flas h poin t o f th e fue l ha d bee n ove r140 ° F . - an d thu s to o hig h t o b e regulated , h e sai d ~ becaus e i t wa s recovere d I n earl yJune , nea rth e beginnin g o f summer , i n warm-weathe r Sout h Carolin a (Tr . 223-24) . Bu t th e witness ' conclusio n i s merel yconjecture . Peter s di d no t kno w th e actua l flas h poin t o f th e diese l fue l i n th e nozzl e (Tr . 246) . Speculatio n i s no t probativ e testimony .

" My powe r

t o d o s o derive s fromth e Administrativ e Procedure Act , 5 US C §556(c) , andth e FAA' s rules , 14 CFR§13.205(a)(5 ) an d(a)(0) , eac h o f whic h permi t

administrativ e law judge s to "receiv e relevan t evidence " and"regulat e th e cours e o f th e hearing. " I'h

e Federa l Rule s o f Civi l Procedur e als o allo w suc h a n action . Rul e 15(b ) state." ; that "whe n issue s no t

raise dby the pleading s arc trie dby expres s o r implie d consi.;n l o f the parties , the y shal l b e treate di n all respect s a s if

the y ha dbee n raise di

n th e pleadings. " It further state s tha t

failure t o amen dth e pleading s t o confor mthemt o th e evidenc e "doc S no t affect th e resul t o f th e tria l o f thes e issues. " ^ Respondent

acknowledge s tha t

i f thes e exception s do no t

apply an d"Husk

y wa s th e shipper, " then HM R labelin g an

dpackagin g requirement s d o apply , Tr , 236-37 ; se e als o Tr . 251-52 .

£30/020 0 SW O f - VV d StLSSetSO S XV d Ge:S L 0103/62/8 0Respondent' s assumptio n tha t fue l wit h a flas h poin t abov e 140 ° F . woul d remov e i t fro m th e regulator yschem e is , moreover , incorrect , A flas h poin t abov e 140 ° F . an d les s tha n 200 ' F . would , a s Responden t correctl ypoint s out , enabl e a substanc e classe d a s a flammabl e liqui d t o b e reclasse d a s a combustibl e liquid. ^

Bu t Peters ' clai m tha t combustibl e liquid s ar e completel y nonregulate d (Tr . 268-69 ) i s no t correct Peter s base s hi s conclusio n o n §173.150(f)(2) , whic h state s tha t (othe r tha n exception s inapplicabl e here ) "th e requirement s i n thi s subchapte rd o no t appl yt o a materia l classe d a s a combustibl e liqui d i n a non-bul k packaging. ' Bu t th e previou s subparagraph , (f)(1) , make s clea rtha t subparagrap h (f)(2 ) doe s no t appl yt o transportatio n b yaircraf t o rvessel . Peter s counter s tha t subparagrap h (f)(2 ) stand s alone ; i t shoul d b e rea d withou t referenc e t o (f)(1) , h e state d (Tr . 271-72) , Th e witness ' readin g i s incorrect . I t i s a n elementar yrul e o f statutor y constructio n that , i n construin g on e provisio n o rsection , provision s o f a legislativ e enactmen t mus t b e rea d together . A & E Suppl yCo. , Inc . v . Nationwid e Mutua l Fir e Insuranc e Co. , 79 8 F.2 d 669 , 67 5 ( 4 Cir . 1986) . Al l parts , provisions , an d section s o f th e HMR s mus t b e rea d togethe ri n orde rt o bes t ascertai n an d giv e effec t t o thei rmeaning . Melo yv . Conoco , Inc. , 81 7 F.2 d 27 5 ( 5 Cir . 1987) . I t i s conclude d tha t combustibl e liquid s generall ymus t confor m t o HM R requirements . 1 hav e considere d al l othe robjection s raise d b yResponden t an d rejec t the m withou t additiona l comment. ' IV . Penalt y I hav e decide d t o asses s a civi l penalt yagains t Responden t o f $8,000 . Complainan t ask s fo ra civi l penalt yo f $15,000 . I t bear s th e burde n o f provin g th e appropriatenes s o f thi s amoun t b ya preponderanc e o f th e evidence . Phillip s Buildin g Supply , FA A Orde rNo . 2000-2 0 (Augus t 11 , 2000) , p . 8 . I n determinin g th e amoun t o f th e penalty , th e decisionmake rmus t conside r"th e nature , circumstances , extent , an d gravit yo f th e violation, " and , wit h respec t t o th e violator , "th e degre e o f culpability , an yhistor yo f prio r violations , th e abilit yt o pay , an d an yeffec t o n th e abilit yt o continu e t o d o business, " an d "othe rmatter s tha t justic e requires " (4 9 U.S.C . §5123(c)) .

* § 173.120(b) . A flammabl e liqui dwit h aflash poin t

o f jus t 100 " 1' . o r

abov e ma

y b e reclasse da s a combustibl e liquid , bu t

only i f mean s o f transportatio n other

tha n aircraf t o r vesse l are "impracticable. " § 173.120(b)(2) ; Tr , 245 , M o such showin g wa s mad e here . ^ On e further

matte r mus t b e addressed . Th e Orde r Sealin g Portion s o f

th e Docke t

serve dJun e 9 , 2008 , protecte dfrompubli c disclosure certai n exhibit s of aproprietary nature . It

als o directe dth e partie s to notily th e undersigne dwithi n 3 0 day s o f receip t o f th e transcrip t

whethe r an y testimon y neede dt o b e redacte dandwithhel dfrompubli c filing. M o suc h notificatio n wa s received , llierefore , th e transcrip t wil l b e file di n full wit h th e Docke t

Managemen t

System(DMS ) i

n du e course .

eSO/LSOi a SW O * VV d StLSSetSO S XV d 6S:S L 0L0S/6S/9 0Hazardou s materials , b ythei rver ynature , ar e dangerous . Ai rshipmen t of suc h good s put s th e safetyo f ai rtransportatio n - th e overridin g goal o f th e Departmen t - at significan t risk. Becaus e o f hazmats ' inheren t capacit yfo rperil , th e HMR s effec t a we b of protectio n t o minimiz e ris k fo rperson s wh o coul d b e adversel yaffecte d byproximit yt o suc h materials , suc h a s handlers , passengers , an d crew . Undeclare d shipment s o f hazardou s material s lac k tha t protection . Suc h shipments , b yconstitutin g a safet ythrea t whos e magnitud e i s unknown , ar e particularl yworrisome . Th e Administrato rha s emphasize d tha t undeclare d shipment s o f hazardou s materials , "whic h increas e th e likelihoo d o f injury , pos e a specia l risk " (see , e.g. , Toyot a Moto rSales , USA , Inc. , FA A Orde rNo . 94-2 8 (Septembe r30 , 1994) , p . 13) . Thes e circumstance s warran t a substantia l fine . Th e characte ro f Respondent' s busines s als o i s importan t i n determinin g a n appropriat e penalty . Th e fin e shoul d reflect th e degre e o f Husky' s involvemen t wit h hazardou s materials . Th e agency' s HM R Penalt yGuideline s sugges t tha t th e greate rth e degre e o f a respondent' s involvemen t i n hazardou s materials , th e highe rth e sanctio n amoun t shoul d be. ' Th e recor d show s tha t th e compan yuse s hazardou s material s i n th e cours e o f it s busines s (Tr . 24) . Husk y V P Bra d Bake racknowledge d tha t th e compan yutilize s an d accept s hazardou s material s a s part o f it s manufacturin g proces s (Tr . 150-51 , 183-84 , 193) . Husk y als o transport s hazmat s i n th e sens e o f movin g the m withi n th e plan t an d i n storin g the m (Tr , 185-86) . Respondent , however , emphasize d tha t i t doe s no t (a t leas t a s a rule ) shi p hazmat s (Tr , 150) . Respondent' s positio n a s a busines s usin g an d handlin g hazardou s material s - eve n i f no t utilizin g suc h material s o n a regula rbasi s - compel s a n awarenes s o f th e HMR s an d th e concomitan t obligatio n t o follo w them . Th e Penalt yGuideline s emphasiz e tha t suc h a busines s "i s clearl yo n notic e o f th e hazardou s matur e o f th e materia l an d th e regulator yrequirement s t o whic h th e Hazma t i s subject " (6 4 Fed.Reg . 19443 , 19449) . Bu t Responden t showe d ver y littl e suc h knowledge . N o employe e ha d undergon e an ykin d o f trainin g i n th e recognitio n o rappropriat e us e o f hazardou s material s (Tr . 25) . N o compan y procedur e existe d fo rth e purgin g o f pum p nozzle s (Tr . 187) . Th e nozzle s i n th e shipmen t wer e no t flushe d (Tr . 92-93) . Thes e circumstance s als o compe l a significan t assessmen t fo rth e violation s at issue . Additiona l relevan t factors , however , warran t mitigatio n o f th e penalt y amount . Responden t official s credibl ytestifie d tha t the yattempte d t o drai n thoroughl yth e nozzle s tha t late rwer e tendere d fo rshipmen t (Tr . 88 , 116-17) . ° Sec Federal Aviatio n Administratio n Polic y on Enforcement o f the HiLiurdou s Material s Regulations : Penalty'Guidelines , 6 4 Fcd.Rcg . 1944 3 etseq . (April21 , 1999) , FA A Order 2150.3A . Chg . 26 , Appendi x 6 , date dApri l 14 , 1999 . B y Order2150.3B , th e agenc y issue dnew sanctio n guideline s supersedin g th e old . lli e ne w guideline s are inapplicabl e here , however , becaus e the y appl y l o violation s occurrin g on o r afte r Octobe r 1 , 2007 , andth e incident i n thi s matter

too k plac e on Jun e 8 , 2006 . Se e 7 2 Fed,Reg , 5585 3 (Octobe r 1,2007) .

sso/sso E SW O + VV d stLseeteo s xv d GCS L OLoe/6s/8 oLittl e fue l wa s left i n the m byth e tim e the ywer e place d i n Hatfield' s car . I agre e

wit h th e evidenc e suggestin g tha t th e residua l amoun t o f fue l i n eac h of th e nozzle s woul d hav e bee n measure d "i n drip s rathe rtha n ounce s o rliters " (Exh . R-2 , p . 2) , Anothe rfacto rsuggestin g mitigatio n i s tha t soo n afte rth e inciden t Husk y official s underwen t hazardous-material s training . Swift actio n designe d t o bette r ensur e futur e complianc e ma ywarran t a significan t reductio n i n civi l penalty On e suc h measur e whic h ha s le d t o a lesse rpenalt yinvolve d sendin g responsibl e employee s t o trainin g program s {Westai rCommute rAirlines , Inc . d/b/ a Unite d Express . FAA Orde r93-1 8 (Jun e 10 , 1993)) . Husk yV P Bra d Bake r testifie d that , withi n a fe w week s o f th e incident , responsibl e official s attende d a Federa l Express-sponsore d semina ro n dangerou s good s i n ai rtransportation . Jac k Peters , Respondent' s witness-consultant , als o provide d trainin g (Tr . 169 - 174 , 238-39) . Thes e action s justif ya measur e o f mitigation . I n weighin g al l th e totalit yo f th e fact s an d circumstances , 1 fin d an d conclud e tha t a civi l penalt yassessmen t of $8,00 0 i s appropriate . I conclud e tha t thi s amoun t wil l achiev e th e statutorypurpos e o f promotin g complianc e wit h th e HMRs . I t als o contain s sufficien t "bite" , o rdeterren t effect (se e Toyot a Moto r Sales , Inc. , FA

A Orde rNo . 94-2 8 (Septembe r30 , 1994) , p . 11) . Th e assessmen t additionall yfairl yweigh s th e post-inciden t action s Responden t ha s undertaken . Finally , th e civi l penalt yals o appropriatel yaccount s fo rth e factor s th e statut e direct s i n fixin g th e assessment . Husk yCorporatio n i s hereb yassesse d a civi l penalt yo f $8,00 0 fo r violation s o f th e followin g HMRs : §§171,2(a) , 172.200(a) , 172.202(a)(1)-(a)(3) , 172.202(a)(5) , 172.203(f) , 172.204(a ) o r(c)(1) , 172.204(c)(2) , 172.204(c)(3) , 172.600 , 172.602(b)(3) , 173.1(b) , 172.702(a) , 173.27(b)(1) , an d 173.222. "

ichardC . Gooawi n Administrativ e Law Judg e Attachmen t

- Servic e Lis t

' Any appeal fro

mth e Initial Decisio n t o th e Administrato r mus t b e i n accordanc e wit

h sectio n 13.23 3 o f the Rule s o f

Practice , whic h require s 1 ) that anotic e o f

appea l b e file dn o later

than 1 0 day s (plu s a

n additional 5 fo

r mailing ) fromth e dat e o f thi s orde r and2 ) rha

t th e appeal b e perfecte dwit h awritte n brief or memorandu mno t

later than 5 0 day s (plu s 5 fo

r mailing ) fro

mth e date o f

thi s order . Eac h i s t o b e sent t o th e Appellat e Docke t

Clerk , Roo m924-A , Federa l Aviatio n Administration , 80 0 Independenc e Avenuc , Washington , D C 20591 , an dt o agenc y counsel . Servic e upo n th e presidin g judg e i s optional .

'^'^^^' ® SW O . VV dsnse6*20 2 xv dee-s i OLOS/GS/S O