# FedEx, Express September 25, 2015 Federal Aviation Administration 600 Independence Ave., NW Wilbur Wright Building-Suite 2W1000 Washington, DC 20591 Attn: Hearing Docket Clerk, AGC-430 Re: In the Matter ofFederalExpress Corporation FDMS 2015-3306 (FAA DocketNo. 2015-3306) DearHearing Docket Clerk: Legal Department 1700 Pennsylvania Avenue, NW Suite 950 Washington, DC 20006 

# RECEIVED SEP 28 2015 

## HEARING DOCKET

Please find enclosed an original and one copy ofFederal Express Corporation's Answer to the Complaint in Part and Motion to Dismiss in Part, which we are filing in the above referenced matter. Copies ofthis letter and motion are also being served viaFederal Express on the FAAEnforcement Division, Western Team and the Administrative Law Judge assigned to this matter. Sincerely, FEDERAL EXPRESS CORPORATION

# ~ Attorney for Respondent 1700 PennsylvaniaAve., NW Suite 950 Washington, DC 20006 202-393-9285 greg.stotlrn@fcdex.com Enclosure Cc: Mr. David Shayne, Enforcement Division Western Team The Honorable J.E. SullivanU.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS FEDERAL AVIATION ADMINISTRATION

1N THE MATTER OF:

FEDERALEXPRESS CORPORATION Respondent.

The Honorable J. E. Sullivan ) ) ) FAA DocketNo. 2015-3306 ) (Civil PenaltyAction) ) ) ) FDMS no. 2015-3306 ) 

# r1ECEIV£::D SEP 2B

## 2015 

## HEARING DOCKET

RESPONDENT'S ANSWERTO THE COMPLAINT IN PART AND MOTION TO DISMISS THE COMPLAINT IN PART
Respondent, Federal Express Corporation d/b/a FedEx Express ("Respondent" or "FedEx"), by counsel and pursuantto sections 13.209 and 13.218 (f) (2) (ii) ofthe Rules of Practice in FAA Civil PenaltyProceedings, 14 C.F.R. 

### §§ 13.209 and 13.218, hereby answers the Federal Avia tion Administration's ("FAA" or "Complainant") Complaint inpart andmoves that the FAA's Complaintbe dismissed in part.

RESPONDENT'S ANSWER TO THE COMPLAINT IN PART
Respondent hereby answers the FAA's Complaint in part, and asserts as follows. 

### 1. Respondent admits the allegations contained in Section I, ofthe FAA's Complaint. 2. Respondent admits the allegations contained in SectionII, paragraph I ofthe FAA's Complaint, except that it denies that itregularly offers hazardous material. 3. Respondent admits the allegations contained in SectionII, paragraph 2 ofthe FAA's Complaint.4. 

### Respondent admits the allegations contained in Section II, paragraph 3 ofthe F

### AA's Complaint. 5. Respondent admits the allegations contained in Section II,

### paragraph 4 ofthe F

### AA's Complaint. 6. Respondent admits the allegations contained in Section III, paragraph 1(b) ofthe FAA's Complaint. 7. Respondent admits the allegations contained in Section III, paragraph 2 ofthe FAA's Complaint as itrelates to the shipment referred to in Section II, paragraph 4 ofthe FAA's Complaint. Respondent denies any liability under Section III, 

### paragraph 2 for the shipment referred to in SectionII, paragraph 4 ofthe FAA's Complaint and which is the subject of Respondent's Motion to Dismiss below. 8. Respondent denies the allegations contained in Section II,

### paragraph 3 ofthe FAA's Complaint. AFFIRMATIVE DEFENSES



### 1. The Complainant fails to state a claim warranting the proposed penalty.

RESPONDENT'S MOTION TO DISMISS THE COMPLAINT IN PART 

### Respondent moves that the allegations related to Air Waybill 5664 9030 5740 outlined in Complainant's Complaint, Section II, paragraphs 5-9 and Section III, paragraph 1 (a) be dismissed. In 

### support ofthis relief, Respondent states the following:

BACKGROUND



### The shipment at issue is a plastic drum withAir Waybill number 5664 9030 5740 that contained a Class 3 flammable liquid (hereafter "the shipment"). 1 

### The FAA's complaint states that the "plastic drum in which the substance

...was transported did not conform to the requirements of49 C.F.R. § 

### 173.27(c)(3)(ii) in that it did not have amarked test pressure of80

1 Complaint, Section TI paragraph 5 and 7.



### 2

### kPa or higher."2 

### The complaint also alleges that as a result, "FedEx accepted packages that were offered for transportationby aircraft that did not conformto the general requirements for transportation by aircraft as set forth in 49 C.F.R. l73.24(i) and 173.27,"3 

### and concludes that it appears that FedEx violated section 175.3 "inthat it accepted for transport aboard an aircraft and thereafter transported HAZMA T that was not prepared for shipment in accordance with the HMR (emphasis added)."4 

### Noticeably, the FAA does not allege that Respondent violated 49 C.F.R 

### § 175.30, which "establishes requirements for acceptance and carriage ofhazardous materials by aircraft." 5 

### Respondent does not contest that the shipment was not marked as prescribed by section 173.27. However, Respondent asserts that an air carrier's responsibilities for acceptance ofhazardous materials are expressly governed by 49 C.F.R § 175.30 and having complied with its responsibilities under 175.30, Respondent carmot, as a matter oflaw and reasonable statutory interpretation, be held in violation of49 C.F.R. 

### § 175.3 for accepting and transporting improperly prepared hazardous materials.

I. The Requirements In 49 C.F.R Part 173 Are ShipperRequirements That Have Not Been Imputed To Carriers

The Federal hazardous materials transportation law directs the Secretary of Transportation to establishregulations for the safe and secure transportation ofhazardous materials in commerce. 6 

### In49 C.F.R. 

### § 1.53, the Secretary delegated authority to issue regulations to the Pipeline and Hazardous Materials Safety Administration (hereafter "PHMSA"). The regulatory requirements promulgated by PHMSA, which are set forth in 49 C.F.R. Parts 171-180 (hereafter the "HMR"), provide that persons who perform specified 

### functions coveredbythe regulations are required to performthem in accordance withthe HMR.7 

### The United States Court ofAppeals for the District ofColumbia Circuit afiirmed the functional

2 Complaint, Section II paragraph 8. 3 Complaint, Section 11 paragraph 9.

-+ Complaint, Section 11 paragraph 1 (a). 5 Federal Register, Vol. 79, No. 151 (August 6, 2014) at 46025.
6 49 U.S.C. § 5103 etseq. '49 C.F.R § 171.2 (a).

3

### approach set forth inboth the statute andHMR in

### NL Industries, Inc., v Department of Transportation, FederalAviationAdministration, 901 P.2d 141 (1990), holding that "the question ofthe application ofthe statute to a particular personis to be approached functionally, baseduponthe activities in which that person is engaged

... The implementing regulation is consistent with this approach." 

### Id. at 142. The functions coveredbythe HMR are generally grouped into three categories: packaging manufacture, shipper (orpre-transportation) functions, and transportation functions. 8 

### To ensure compliance, hazrnat employees are required to be provided with function specific training. 9 

### The requirements and functions outlined in 49 CPRPart 173, including§§ 173.24 and 173.27, are unquestionably the primary responsibility ofthe offeror, or shipper, ofhazardous materials. Indeed, Part 173 is entitled "Shippers-General Requirements for Shipments and Packagings." Section 173.22, whose title is "Shipper's responsibility," leaves no doubt that responsibility lies solely with the shipper to "determine thatthe packaging or container is an authorized packaging, including part 173 requirements." 10 

### Moreover, one ofthe listed examples ofpre-transportation (or shipper) functions is "selecting a hazardous materials packaging." 11 It 

### is not in question that the offeror ofthe shipment failed follow the requirements of 173 .27 and 173 .24 in offering the shipment without the appropriate hydrostatic pressure test marking. Rather, the issue is whether Respondent has aresponsibility to "catch" this error while performing its acceptance function. Similarto the shipper functions and requirements inpart 173, air carrier functions and requirements generally are contained in 49 CPRPart 175. These functions include proper handling, loading, and segregation ofhazardous materials among others. Undoubtedly, air carriers are required to verify that the shipper has performed some ofits functions correctly through the air carriers' own inspection and acceptance function. However, that duty is not so broad that a carrier must ensure that a shipper or a shipment has complied with each and every requirement in the HMR. As noted above, the HMR expresslyprescribes in section 175.30 the

8 See 49 C.F.R § 171.1. "49 C.F.R § 172.704 (a) (2) (i).
rn 49 C.F.R § 173.22 (a) (2). "49 C.F.R. § 171.l (b) (2).


### 4steps air carriers musttake in performing their inspection and acceptance function and checking to ensure thatthe hydrostatic mark is printed onthe box is not among them. 12 Section 175.30 is a very detailed regulation thatprovides that air carriers are required to
ensure that a shipperhas not attempted to ship a forbidden material and has not exceededthe applicable quantity limitations; has prepared their shipping paper in accordance with the requirements inpart 172; has marked and labelled the box as required by subparts D and E in part 172, has labelled the box with a "Cargo Aircraft Only" label ifapplicable; and has not tendered a package with visible holes or leaks. Nowhere in Section 175.30 does it state that as

12

. . § 175.30 Inspectmg shipments. (a) No person may accept a hazardous material for transportation aboard an aircraftunless the aircraft operator ensures the hazardous material is: (1) Authorized, and is within the quantity limitations specified for carriage aboard aircraft according to § 172.101 ofthis subchapter or as othen.vise specifically provided by this subchapter. (2) Described and certified on a slipping paper prepared in duplicate in accordance with part 172 ofthis subchapter or as authorized by subpart C ofpart 171 ofthis subchapter. See § 175.33 for shipping paper retention requirements; (3) Marked and labeled in accordance with subparts D and E ofpart 172 or as auth01ized by subpart C ofpart 171 ofthis subchaptcr, and placarded (when required) in accordance with subpart F ofpart 172 ofthis subchapter; and (4) Labeled with a "CARGO AIRCRAFT ONLY" label (sec § 172.448 ofthis subchapter) ifthe material as presented is not pennitted aboard passenger-carrying aircraft. (b) Except as provided in paragraph (d) ofthis section. no person may carry a hazardous material in a package, outside container, or ovcrpack aboard an aircraft unless the package, outside container. or overpack is inspected by the operator ofthe aircratl immediately before placing it: (1) Aboard the aircraft: or (2) ln a unit load device or on a pallet prior to loading aboard the aircra1l. (c) A hazardous n1aterial may be carried aboard an aircraft only if, based on the inspection by the operator, the package, outside container, or ovcrpack containing the hazardous 1naterial: (1) llas no holes, leakage or other indication that its integrity has been comprmniscd; and (2) For Class 7 (radioactive) materials, does not have a broken seal, except packages contained in overpack:s need not be inspected tbr seal integrity. (d) The require1nents ofparagraphs (b) m1d (c) ofthis section do not apply to Dry ice (carbon dioxide, solid), (e) A..11 ovcrpack containing packages ofhazardous 111aterials may be accepted only ifthe operator has taken all reasonable steps to establish that (1) The overpack does not contain a package bearing the "CARGO AIRCRAFT ONLY" label unless- (i) The overpack affords clear visibility ofand easy access to the package; (ii) The package contains a 111aterial \Vhich may be carried inaccessibly underthe provisions of§ 175.75(e); or (iii) Not more than one package is overpacked. (2) The proper shipping names, identification nmnbcrs, labc:ls ru1d special handling instructions appearing on the inside packages are clearly visible orreproduced on the outside ofthe overpack, and (3) The \Vord "OVERPACK" appears on the outside ofthe overpack when specification packagings are required.

5

### part ofits acceptance function a carrier is required to ensure that the shipper has complied with its responsibilities under part 173, including§§ 173.24 and 173.27. Absent a specific regulatory requirementto inspect for the hydrostatic pressure test mark, there canbe no responsibility for an air carrierto "catch" this shipper error.



### II. HadPHMSAIntendedForAir Carriers To Verify The HydrostaticPressure Test MarkTheyWould Include A RequirementIn Section 175.30

The gist ofComplainant's allegations is that section 175.3 places additional acceptance requirements on air carriers outside ofthe requirements in section 175.30. This overly broad interpretation is contrary to the regulatory framework established by PHMSAto regulate functions performedby entities in the hazardous materials supply chain, the plain meaning of section 175.30, and PHMSA's past practice. If

### the Complainant's broad interpretation ofsection 175.3 were truly the intent ofPHMSA, then it would eliminate the need for the specific requirements in section 175.30 entirely. Significantly, under the existing regulatory scheme, the FAA is not charged with interpreting the HMR. 13 

### Rather, PHMSA, incident to its delegated authority to issue the HMR, 14 

### is responsible for issuing interpretations ofthe HMR. 49 C.F.R. § 105.20, which is entitled "Guidance andinterpretations" provides, in pertinentpart:

13 FAA's authority is lin1ited to enforcement ofthe federal hazardous material transportation law andthe HMR. See 49 U.S.C. §§ 5121 through 5124, 5114 (radioactive 1naterials on passenger-carrying aircraft, and49 C.F.R. §1.83(d), which provides: (d) (1) Except as delegated to the Under Secretary ofTransportation for Policy by§ 1.25, carry out the functions vested in the Secretary by 49 U.S.C. 5121 (a), (b), (c), and (d), 5122, 5123, and 5124, relating to the transportation or shipment ofhazardous materials byair. (2) Carry out the functions vested in the Secretary by 49 U.S.C. 5114, relating to the establishment ofprocedures for n1onitor:ing and enforcing regulations with respectto the transportation ofradioactive 1naterials on passenger-carrying aircraft. 14 PHMSA derives this authorityunder49 C.F.R. § 1.97 (b), whichprovides: Hazardous materials: Except as delegated to the Under Secretary ofTransportation for Policyby§ 1.25: (1) Carry out the functions vested in the Secretary by 49 U.S.C. 5121 (a), (b), (c), (d), and (e), 5122, 5123, and 5124, with particular e1nphasis on the shipment ofhazardous materials and the manufacture., fabrication, marking, maintenance, reconditioning, repair or test ofmulti-n1odal containers that are represented, marked, certified, or sold for use in the transportation ofhazardous materials: and (2) Cany outthe functions vested in the Secretary by all other provisions ofthe Federal hazardous material transportation law (49 U.S.C. 5101 et seq.) except as delegated by§§ l.83(d)(2) (FAA) and l.87(d)(2), (FMCSA) ofthis subpart and paragraph 2(99) ofDepartment ofHomeland Security Delegation No. 0170.



### 6(a) 

### Hazardous materials regulations. You can obtain information and answers to your questions on compliance withthe hazardous materials regulations (49 CFR parts 

### ' 171 through 180) 

### and interpretations ofthose regulations by contacting PHMSA's Office ofHazardous Materials Safety as follows

...(Emphasis added).
Respondent has conducted a search ofPHMSA's interpretations ofsection 175.30, which reveals thatPHMSA has never interpreted section 175.30 to add the requirementthat an air carriermaynot accept a hazardous material for transportation aboard an aircraft unless it ensures that the shipmenthas the proper hydrostatic test mark. Furthermore, a search ofthe FAA Civil PenaltyAdjudication database reveals thatthe FAAhas never fully adjudicated a civil penalty against an air carrier for failing to properly inspect and accept a hazardous material shipment for transportation by air in whichthe sole regulation cited was 49 C.F.R. 

### § 175.3. Rather, all such decisions cite section 175.3 in combinationwith section 175.30. Therefore, consistent with Rule 201 (b) ofthe Federal Rules ofEvidence, Respondentrespectfully requests the administrative lawjudgeto takejudicial notice ofthe fact that the FAA has never fully adjudicated a civil penalty against an air carrier for failing to properly inspect and accept a hazardous material shipment for transportationby air in whichthe sole regulation cited was 49 C.F.R. 

### § 175.3, i.e. all such decisions cite section 175.3 in combinationwith section 175.30. The appropriate vehicle for imposing this additional acceptance and inspection requirement on air carriers is notice and commentrulemakingunder the Administrative Procedure Act, 5 U.S.C. 

### § 553. Recent history demonstrates that when PHMSA intends to impose additional inspection and acceptance obligations on air carriers to verify shipper compliance with requirements in Part 173, it does so pursuant to notice and comment rulemaking. In a final rule harmonizing the HMRrequirements for lithiumbatteries with international rules, PHMSAnoted that "Therevisions now effective inthe ICAO Technical Instructions require that:

...(2) shippingpapers accompany the shipment, unless the shipper provides 

### alternative written documentation describing the shipment;

... (4) carrier acceptance checks

... (Emphasis added)." 15 Inharmonizing the HMRwith the ICAO Technical Instructions,

15 d

.

Fe era! Register, Vol. 79, No. 151 (August 6, 2014) at 46020.

7

### PHMSA incorporated the "alternative written documentation" requirement into Part 173. 16 

### Recognizing thatthe alternative written documentationrequirement was incorporated into Part 173 and was subjectto carrier acceptance and inspection checks, PHMSA, through rulemaking, simply added an additional requirement to Section 175.30, stating:

Section 175.30 establishes requirements for acceptance and carriage ofhazardous materials by aircraft. We are adding a new paragraph (a)(5) to this section to specifythat the air carrier must not accept a lithium battery shipment described on alternative written documentation unless it is in compliance with § 173 .185 (c)(4)(v)(B). 17



### This clearly shows that ifPHMSAintended air carriers to verify that a shipper has complied with a shipper obligation inpart 173, including§§ 173.24 and 173.27, in accordance with 5 U.S.C. § 553, it simply would amend§ 175.30 to include the requirement. If

### the Complainant's broad interpretation ofsection 175.3 is correct, thenthere would have been no need for PHMSAto amend§ 175.30 (a) to include § 175.30 (a) (5). 18



### III.The Requirements For Overpacks SupportRespondent's Position

In 

### addition to the above, the optionto "overpack" certainhazardous material shipments and the requirements for shippers that overpack shipments support Respondent's position. In short, 49 C.F.R. 173.25 allows shippers to offer hazardous materials for transportation in an overpack, which is defined by 49 C.F.R. 171.8 as "anenclosure that is used by a single consignor to provide protection or convenience inhandling ofa package or to consolidate two or more packages." When offering an overpack, a shipper only must reproduce onthe overpack the proper shipping name, UN number, and hazard labels. 19 

### There is no requirement for a shipper to

16 Jd., at 46038, see language in§ 173.185 (c) (4) (v).
17 Id., at 46025.
18 Note that 49 C.F.R. § 175.30 (a) (5) was subsequently rc1novcd from the I-IlvlR in a laterhannonization rule because "alternative written docurnentation" was no longer pennitted for these shipments. See Federal Register, Vol. 80, No. 5 (January 8, 2015). "49 C.F.R § 173.25 (a) (2).

8reproduce the hydrostatic pressure test mark onthe overpack. Respondent's obligations in performing its acceptance and inspection function for overpacks only is to ensure thatthe shipper has correctlyreproducedthe proper shipping name, UN number aud hazard labels, andmarked the package as anoverpack.20 Whatthis means is that PHMSA has explicitly determined that to satisfy the requirements ofthe HMR, the plastic drum in question couldhave beenplaced in a box and offered as an overpack to Respondent withoutthe need for communicating the hydrostatic pressure testmark, and be in full compliance withthe HMR. Moreover, Respondent is free to 

### require its customers to tender all plastic drum shipments as overpacks, which also would be in full compliance withthe HMR. The regulatory framework established by PHMSA for overpacks clearly supports the notionthat the hydrostatic pressure testmark is notmeant to communicate anything to the air carrier and verificationthat it is markedproperly is notthe carrier's responsibility whenperforming its acceptance and inspection functions. 21 Otherwise, there would be nojustificationfor developing a system that allows eitherthe shipper or carrierto offer or accept shipments without any indication ofthe hydrostatic pressure test mark.



### IV. The FAAHas Approved Respondent's TrainingProgramWhich Does Not lnclnde Inspection for the Hvdrostatic Pressure Test MarkForThe Reasons Described Above
Finally, it is importantto note that under 14 C.F.R. 

### § 121.1003 (c), Respondent's hazardous materials training programmustbe approvedbythe FAA. Respondent's FAAapproved trainingprogram does not include a requirementto checkthat the shipment has a hydrostatic pressure test mark before acceptingthe shipment for transportationby air. Accordingly, Respondent does not instruct its acceptance and inspectionpersonnel to check for the hydrostatic pressure test markbecause it is notrequired underthe HMR for the reasons outlined inthis Motionto Dismiss. Having approved Respondent's training program,

'"49 C.F.R. § 175.30 (e). 21 Itwouldbe incongruous to require an air carrierto check ifa single cylinderhas the appropriate hydrostatic pressure test mark when the HMR allows a shipper to place multiple plastic dn1ms in an ovcrpack without a requirementto check ifthe ovcrpack, orthe individual plastic drums, have a hydrostatic pressure test mark.

9

### Respondent contends thatit is inappropriate for the FAA to bring a civil penalty action related to acceptance procedures it has deemed compliant withthe HMR.
WHEREFORE, Respondent, by counsel, respectfully requests the Administrative Law Judge to enter an Order dismissing the Complaint inpartwithprejudice and enteringjudgment in favor ofRespondent.

Dated: September 25, 2015 Respectfully submitted,

Federal Express Corporation 

# Ry;;c~ ~- Attorney for Respondent 1700 PennsylvaniaAve., NW Suite 950 Washington, DC 20006 (202) 393-9285 greg.stofko@fedex.com

10

### CERTIFICATE OF SERVICE

I hereby certify that the foregoing document has been sent via Federal Express to the following:

Fedcral Aviation Administration 600 Independence Avenue, SW Wilbur Wright Building

- Suite 2Wl000 Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430 Mr. 

### David Shayne, Attorney Enforcement Division, Western Team 1601 Lind Avenue, SW Renton, WA 98057 Hon. J.E. Sullivan Office ofHearings, M-20 U.S. Department ofTransportation 1200 NewJersey Avenue, S.E. (Ell-310) Washington, DC 20590

Dated this 25th day ofSeptember, 2015.



### /?. ~- .



# ~- By:

. . 

# 7 

# GStofko / Attorney for Respondent 1700 PennsylvaniaAve., NW Suite 950 Washington, DC 20006 (202) 393-9285 greg.stofko@fedex.com

11