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 of Federal Express Corporation 

FDMS 2015-3306 (FAA Docket No. 2015-3306) 

Dear Hearing Docket Clerk: 

Legal Department 

1700 Pennsylvania Avenue, NW 

Suite 950 

Washington, DC 20006 

RECEIVED 

SEP 2 8 2015 

HEARING DOCKET 

Please find enclosed an original and one copy of Federal 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 of this letter and motion are also being served via Federal Express on the FAA Enforcement Division, 

Western Team and the Administrative Law Judge assigned to this matter. 

Sincerely, 

FEDERAL EXPRESS CORPORATION 

~ Attorney for Respondent 

1700 Pennsylvania Ave., 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. Sullivan 
U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

FEDERAL AVIATION ADMINISTRATION 

1N THE MATTER OF: 

FEDERAL EXPRESS CORPORATION 

Respondent. 

The Honorable J. E. Sullivan 

) 

) 

) FAA Docket No. 2015-3306 

) (Civil Penalty Action) 

) 

) 

) FDMS no. 2015-3306 

) 

r1ECEIV£::D 

SEP 2 B 2015 

HEARING DOCKET 

RESPONDENT'S ANSWER TO 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 pursuant to sections 13.209 and 13.218 (f) (2) (ii) of the Rules of 

Practice in FAA Civil Penalty Proceedings, 14 C.F.R. §§ 13.209 and 13.218, hereby answers the 

Federal A via ti on Administration's ("FAA" or "Complainant") Complaint in part and moves that 

the FAA' s Complaint be 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, of the F AA's 

Complaint. 

2. Respondent admits the allegations contained in Section II, paragraph I of the 

F AA's Complaint, except that it denies that it regularly offers hazardous material. 

3. Respondent admits the allegations contained in Section II, paragraph 2 of the 

F AA's Complaint. 
4. Respondent admits the allegations contained in Section II, paragraph 3 of the 

F AA's Complaint. 

5. Respondent admits the allegations contained in Section II, paragraph 4 of the 

F AA's Complaint. 

6. Respondent admits the allegations contained in Section III, paragraph 1 (b) of the 

F AA's Complaint. 

7. Respondent admits the allegations contained in Section III, paragraph 2 of the 

F AA's Complaint as it relates to the shipment referred to in Section II, paragraph 4 of the FAA' s 

Complaint. Respondent denies any liability under Section III, paragraph 2 for the shipment 

referred to in Section II, paragraph 4 of the 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 of the 

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 of this relief, Respondent states the following: 

BACKGROUND 

The shipment at issue is a plastic drum with Air 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 of 49 C.F.R. § 173.27( c )(3 )(ii) in that it did not have a marked test pressure of 80 

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 transportation by aircraft that did not conform to the general requirements for 

transportation by aircraft as set forth in 49 C.F.R. l 73.24(i) and 173.27,"3 and concludes that it 

appears that FedEx violated section 175 .3 "in that 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 of hazardous 

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 of hazardous 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 of 49 C.F.R. § 175.3 for accepting and 

transporting improperly prepared hazardous materials. 

I. The Requirements In 49 C.F.R Part 173 Are Shipper Requirements That Have Not 

Been Imputed To Carriers 

The Federal hazardous materials transportation law directs the Secretary of 

Transportation to establish regulations for the safe and secure transportation of hazardous 

materials in commerce.

6 In 49 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 covered by the regulations are required to perform them in accordance with the HMR. 7 

The United States Court of Appeals for the District of Columbia 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 et seq. 

'49 C.F.R § 171.2 (a). 

3 
approach set forth in both the statute and HMR in NL Industries, Inc., v Department of 

Transportation, Federal Aviation Administration, 901 P.2d 141 (1990), holding that "the 

question of the application of the statute to a particular person is to be approached functionally, 

based upon the activities in which that person is engaged ... The implementing regulation is 

consistent with this approach." Id. at 142. The functions covered by the HMR are generally 

grouped into three categories: packaging manufacture, shipper (or pre-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 CPR Part 173, including§§ 173.24 and 

173.27, are unquestionably the primary responsibility of the offeror, or shipper, of hazardous 

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 that the packaging or container is an 

authorized packaging, including part 173 requirements."10 Moreover, one of the listed examples 

of pre-transportation (or shipper) functions is "selecting a hazardous materials packaging." 11 It is 

not in question that the offeror of the 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 a responsibility to "catch" this error while 

performing its acceptance function. 

Similar to the shipper functions and requirements in part 173, air carrier functions and 

requirements generally are contained in 49 CPR Part 175. These functions include proper 

handling, loading, and segregation of hazardous materials among others. Undoubtedly, air 

carriers are required to verify that the shipper has performed some of its 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 expressly prescribes 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). 

4 
steps air carriers must take in performing their inspection and acceptance function and checking 

to ensure that the hydrostatic mark is printed on the box is not among them. 12 

Section 175.30 is a very detailed regulation that provides that air carriers are required to 

ensure that a shipper has not attempted to ship a forbidden material and has not exceeded the 

applicable quantity limitations; has prepared their shipping paper in accordance with the 

requirements in part 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 if applicable; 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 aircraft unless 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 of this 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 of this subchapter or as authorized by subpart C 

of part 171 of this subchapter. See § 175.33 for shipping paper retention requirements; 

(3) Marked and labeled in accordance with subparts D and E of part 172 or as auth01ized by subpart C of part 171 of this subchaptcr, and 

placarded (when required) in accordance with subpart F of part 172 of this subchapter; and 

(4) Labeled with a "CARGO AIRCRAFT ONLY" label (sec § 172.448 of this subchapter) if the material as presented is not pennitted aboard 

passenger-carrying aircraft. 

(b) Except as provided in paragraph (d) of this 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 of the 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 of paragraphs (b) m1d (c) of this section do not apply to Dry ice (carbon dioxide, solid), 

(e) A..11 ovcrpack containing packages of hazardous 111aterials may be accepted only if the 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 of and easy access to the package; 

(ii) The package contains a 111aterial \Vhich may be carried inaccessibly under the 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 or reproduced on the outside of the overpack, and 

(3) The \Vord "OVERPACK" appears on the outside of the overpack when specification packagings are required. 

5 
part of its 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 

requirement to inspect for the hydrostatic pressure test mark, there can be no responsibility for an 

air carrier to "catch" this shipper error. 

II. Had PHMSA Intended For Air Carriers To Verify The Hydrostatic Pressure Test 

Mark They Would Include A Requirement In Section 175.30 

The gist of Complainant's allegations is that section 175.3 places additional acceptance 

requirements on air carriers outside of the requirements in section 175.30. This overly broad 

interpretation is contrary to the regulatory framework established by PHMSA to regulate 

functions performed by 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 of section 

175.3 were truly the intent of PHMSA, 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 of the HMR. 49 C.F.R. § 105.20, which is entitled 

"Guidance and interpretations" provides, in pertinent part: 

13 F AA's authority is lin1ited to enforcement of the federal hazardous material transportation law and the HMR. See 49 U.S.C. §§ 5121 through 

5124, 5114 (radioactive 1naterials on passenger-carrying aircraft, and 49 C.F.R. §1.83(d), which provides: 

(d) (1) Except as delegated to the Under Secretary of Transportation 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 of hazardous materials by air. 

(2) Carry out the functions vested in the Secretary by 49 U.S.C. 5114, relating to the establishment of procedures for n1onitor:ing and enforcing 

regulations with respect to the transportation of radioactive 1naterials on passenger-carrying aircraft. 

14 

PHMSA derives this authority under 49 C.F.R. § 1.97 (b), which provides: Hazardous materials: Except as delegated to the Under Secretary 

of Transportation for Policy by§ 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 of hazardous 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 of hazardous materials: and 

(2) Cany out the functions vested in the Secretary by all other provisions of the 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), (FM CSA) of this subpart and paragraph 2(99) of Department of Homeland 

Security Delegation No. 0170. 

6 
(a) Hazardous materials regulations. 

You can obtain information and answers to your questions on 

compliance with the hazardous materials regulations ( 49 CFR parts 

' 

171 through 180) and interpretations of those regulations by contacting PHMSA' s 

Office of Hazardous Materials Safety as follows ... (Emphasis added). 

Respondent has conducted a search of PHMSA' s interpretations of section 17 5 .3 0, which 

reveals that PHMSA has never interpreted section 175.30 to add the requirement that an air 

carrier may not accept a hazardous material for transportation aboard an aircraft unless it ensures 

that the shipment has the proper hydrostatic test mark. Furthermore, a search of the FAA Civil 

Penalty Adjudication database reveals 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 

transportation by air in which the sole regulation cited was 49 C.F.R. § 175.3. Rather, all such 

decisions cite section 175.3 in combination with section 175.30. Therefore, consistent with Rule 

201 (b) of the Federal Rules of Evidence, Respondent respectfully requests the administrative 

law judge to take judicial notice of the 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 transportation by air in which the sole regulation cited was 49 C.F.R. § 175.3, i.e. 

all such decisions cite section 175.3 in combination with section 175.30. 

The appropriate vehicle for imposing this additional acceptance and inspection 

requirement on air carriers is notice and comment rulemaking under 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 HMR requirements for lithium batteries with 

international rules, PHMSA noted that "The revisions now effective in the ICAO Technical 

Instructions require that: ... (2) shipping papers accompany the shipment, unless the shipper 

provides alternative written documentation describing the shipment; ... ( 4) carrier acceptance 

checks ... (Emphasis added)." 15 In harmonizing the HMR with 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 that the alternative written documentation requirement was incorporated into Part 

173 and was subject to 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 of hazardous 

materials by aircraft. We are adding a new paragraph (a)(5) to this section to 

specify that 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 if PHMSA intended air carriers to verify that a shipper has 

complied with a shipper obligation in part 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 of section 175.3 is correct, then there would have been no 

need for PHMSA to amend§ 175.30 (a) to include § 175.30 (a) (5). 18 

III. The Requirements For Overpacks Support Respondent's Position 

In addition to the above, the option to "overpack" certain hazardous 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 "an enclosure that is used by a single consignor 

to provide protection or convenience in handling of a package or to consolidate two or more 

packages." When offering an overpack, a shipper only must reproduce on the 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 later hannonization 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). 

8 
reproduce the hydrostatic pressure test mark on the overpack. Respondent's obligations in 

performing its acceptance and inspection function for overpacks only is to ensure that the shipper 

has correctly reproduced the proper shipping name, UN number aud hazard labels, and marked 

the package as an overpack.20 What this means is that PHMSA has explicitly determined that to 

satisfy the requirements of the HMR, the plastic drum in question could have been placed in a 

box and offered as an overpack to Respondent without the need for communicating the 

hydrostatic pressure test mark, and be in full compliance with the HMR. Moreover, Respondent 

is free to require its customers to tender all plastic drum shipments as overpacks, which also 

would be in full compliance with the HMR. The regulatory framework established by PHMSA 

for overpacks clearly supports the notion that the hydrostatic pressure test mark is not meant to 

communicate anything to the air carrier and verification that it is marked properly is not the 

carrier's responsibility when performing its acceptance and inspection functions. 21 Otherwise, 

there would be no justification for developing a system that allows either the shipper or carrier to 

offer or accept shipments without any indication of the hydrostatic pressure test mark. 

IV. The FAA Has Approved Respondent's Training Program Which Does Not lnclnde 

Inspection for the Hvdrostatic Pressure Test Mark For The Reasons Described 

Above 

Finally, it is important to note that under 14 C.F.R. § 121.1003 (c), Respondent's 

hazardous materials training program must be approved by the FAA. Respondent's FAAapproved training program does not include a requirement to check that the shipment has a 

hydrostatic pressure test mark before accepting the shipment for transportation by air. 

Accordingly, Respondent does not instruct its acceptance and inspection personnel to check for 

the hydrostatic pressure test mark because it is not required under the HMR for the reasons 

outlined in this Motion to Dismiss. Having approved Respondent's training program, 

'"49 C.F.R. § 175.30 (e). 

21 

It would be incongruous to require an air carrier to check if a single cylinder has the appropriate hydrostatic pressure test mark when the HMR 

allows a shipper to place multiple plastic dn1ms in an ovcrpack without a requirement to check if the ovcrpack, or the individual plastic drums, 

have a hydrostatic pressure test mark. 

9 
Respondent contends that it is inappropriate for the FAA to bring a civil penalty action related to 

acceptance procedures it has deemed compliant with the HMR. 

WHEREFORE, Respondent, by counsel, respectfully requests the Administrative Law 

Judge to enter an Order dismissing the Complaint in part with prejudice and entering judgment in 

favor of Respondent. 

Dated: September 25, 2015 

Respectfully submitted, 

Federal Express Corporation 

Ry;;c~ ~-

Attorney for Respondent 

1700 Pennsylvania Ave., 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: 

F edcral Aviation Administration 

600 Independence Avenue, SW 

Wilbur Wright Building - Suite 2Wl 000 

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 of Hearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. (Ell-310) 

Washington, DC 20590 

Dated this 25th day of September, 2015. 

/?. ~-. 

By: ~-. . 7 

GStofko / 

Attorney for Respondent 

1700 Pennsylvania Ave., NW 

Suite 950 

Washington, DC 20006 

(202) 393-9285 

greg.stofko@fedex.com 

11