SERVED MAY 20, 2011 

::RARTMENTOF 

•• .NSPORTATiON 

:K£ T OPERATIONS 

I HAY 2 3 A '=.:53 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, D. C. 

FEDERAL AVIATION ADMINISTRATION, 

Complainant, 

V. 

TEXAS ARMY NATIONAL GUARD, 

Respondent. 

FAA DOCKET No. CP09SO0014 

(Civil Penalty Action) 

DMS No. FAA-2009-1045 

INITIAL DECISION 

OF ADMINISTRATIVE LAW JUDGE RICHARD C. GOODWIN 

Found: Respondent is assessed a civil penalty of $30,000. 

I. Background 

This case originated witli allegations of Complainant Federal Aviation 

Administration ("Complainant," "FAA," or "the agency") that on or about July 2, 2009, 

agents of Respondent Texas Army National Guard^ ("Respondent" or "Texas 

Guard") offered hazardous materials for transportation by air in violation of the 

Department's Hazardous Materials Regulations ("HMRs"), 49 CFR §§171-178. The 

Texas Guard had tendered four one-gallon cans of paint. Paint is classified as a 

hazardous material ("hazmat"). 

The shipment had not been declared. One of the cans was found leaking (Tr. 

15, 30). The hazmats, the agency charged, had not been properly packaged, 

marked, labeled, closed or in the condition for shipment required. It also asserted 

that Respondent committed training violations. The Complaint charged the Texas 

Guard with twenty-one violations of the HMRs, wz.: 49 C.F.R. §§171.2(e), 

172.200(a), 172.202(a)(1), 172.202(a)(2), 172.202(a)(3), 172.202(a)(4), 

172.202(a)(6), 172.202(a)(7), 172.204(a) or (c)(1), 172.204(c)(2), 172.204(c)(3), 

' This case was originally captioned "Executive Office of the State of Texas." At Respondent's request, 

and with the acquiescence of Complainant, it was changed to the current caption. See Order Granting in 

Part and Denying in Part Motion for Decision, served July 8, 2010, n. 1. 
172.300(a), 172.301 (a), 172.312(a)(2), 172.400(a), 172.600(c)(1), 172.600(c)(2), 

172.702(a), 173.24(b)(1), 173.27(d), and 173.173. See Complaint dated November 

25, 2009. Pursuant to 49 U.S.C. §5123, the agency asks for a total civil penalty of 

$30,000 (Tr. 12). 

Respondent's Answer acknowledged liability. See also Tr. 7 ("we have 

stipulated to the liability portion [of the Complaint]"). It took issue with the proposed 

penalty. The Answer asserts as an affirmative defense that the FAA's proposed 

assessment, in failing to note that the Texas Guard's action was a one-time 

transgression and that its procedures for shipping volatile and flammable air cargo 

were promptly changed, is arbitrary and capricious and constitutes an abuse of 

discretion. See Respondent's Answer to Complainant's Motion for Decision, p. 1. It 

also asserted that the proposed penalty was "excessive" (Tr. 7, 55). A civil penalty 

of $15,000, the Texas Guard concluded, would be "fair and sufficient" (Tr. 10; see 

also Tr. 56). 

In view of Respondent's Answer, the hearing was limited to the issue of 

penalty. It was held on January 4, 2011 in Austin, TX. I determined that a written 

decision was reasonable and appropriate under the circumstances. 

I find and conclude that the facts and circumstances warrant an assessment 

against Respondent of $30,000. 

II. Penalty 

A. Factors 

Determination of an appropriate civil penalty requires consideration of a 

variety of factors. The decisionmaker must weigh "the nature, circumstances, 

extent, and gravity of the violation[s]," and, with respect to the violator, "the degree of 

culpability, any history of prior violations, [and] the ability to pay" as well as "other 

matters that justice requires" (49 U.S.C. §5123(c)). The principal elements in this 

analysis are the nature of the respondent's conduct and the totality of the 

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

The Administrator has provided policy guidance for agency employees to 

follow when recommending an appropriate civil penalty in hazardous-materials 

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

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

circumstances. The guidelines aid Complainant's penalty determination through a 

sanction guidance matrix. The matrix sets out specific penalty ranges for each input, 

cross-referencing such factors as the nature of the respondent (for example, whether 

it is a business which "regularly" offers hazmats) and the relative risk of harm posed 

by the goods offered (see Exh. C-1). Complainant's sanction determination 

nevertheless does not merely reflect a fixed mathematical computation. The 

sanction guidance matrix is intended to indicate the Administrator's "general views" 

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

Air Service, Inc., FAA Order No. 2008-11 (November 6, 2008), 2008 WL 4948488, p. 
13. Nor are the guidelines binding. Each situation, being dependent on so many 

variables, is unique. Further, the number of HMR violations is not in and of itself an 

important consideration. Warbelow's Air Ventures, Inc., FAA Order No. 2000-3 

(February 3, 2000), pp. 20-21, pef. for reconsid. den.,Order No. 2000-14 (June 8, 

2000). "Evaluation of the case," the FAA has emphasized, "is based on the totality 

of the facts and circumstances."^ 

An administrative law judge ("ALJ") is not required to follow these guidelines. 

They are intended for agency personnel, and ALJs are not agency personnel. 

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

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

if so, in what amount. The guidelines nonetheless must be respected as an 

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

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

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

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

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

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

It also is important to note that hazardous materials in the stream of air 

transportation require particular attention. They are dangerous by their very nature. 

The risk of hamri must be kept to an absolute minimum in view of the possible grave 

consequences of error. On account of hazmats' inherent capacity for peril, the 

HMRs provide a web of protection to minimize the risk for persons who could be 

adversely affected by such materials. 

B. Complainant's Position 

Complainant has asked for a levy of $30,000. It bears the burden of proving 

the appropriateness of this amount by a preponderance of the evidence. Phillips, 

supra, p. 8. 

Complainant argues that the paint involved in this case could have proven 

dangerous. Paint is a flammable liquid in packing group III, with a flash point of 73 

degrees (Tr. 16). As such, normal room temperatures could ignite it. The guidelines 

classify paint as a "Category B" material, which carries a "moderate" final aggregate 

weight for assessment purposes.^ The agency also considered the nature of 

Respondent's business. It determined that it is a business entity but not an entity 

regularly handling hazmats (Tr. 47). That placed the Texas Guard in the moderate 

range of the penalty matrix. Complainant found seven violation groups - shipping 

papers, labels, marking, packaging, training, release, and emergency response 

^ The guidelines originally were published as "[FAA] Policy on Enforcement of the Hazardous Materials 

Regulations: Penalty Guidelines," 64 Fed.Reg. 19443, 19444, 1999 WL 226610 (F.R.) (April 21, 1999). 

They are now incorporated as Appendix C to FAA Order 2150.3B, and may be foimd at the FAA's web 

site, www.faa.gov. or, more specifically, at www.faa.gov/documentLibrarv/media/Order/ND/2150.3B.pdf 

See Complainant's Motion for Decision, p. 3 n. 1. 

^ Tr. 45. Category B materials are materials that "may not pose an immediate threat to the safety of a flight, 

but can cause death or injury to persons due to unintended releases in aircraft cabin areas, and potential 

damage to aircraft structures over a longer period of time ... " 64 Fed.Reg. 19449. 
information. Multiplying the median figure in the moderate range of the matrix, 

$4,850, by seven (one for each violation group) yields a total assessment of $33,950 

(Tr. 47-48). 

The agency credited the Texas Guard for the training it subsequently 

implemented by adjusting its calculated civil penalty downward by $3,950, to 

$30,000 (Tr. 43). The FAA maintained that Respondent's corrective action did not 

warrant mitigation because Respondent's documentation, submitted about a year 

after the incident, contained no record of training and was entirely prospective. The 

FAA concluded that the Texas Guard's corrective action was neither timely, swift, 

nor comprehensive - thus failing to meet any of the Administrator's mitigation 

criteria. But Complainant was willing to recommend the lower figure of $30,000 

nonetheless "as a good faith offer of settlement" (Complainant's Motion for Decision, 

pp. 3-4; Tr. 48-50, 61). 

C. Respondent's Position 

Respondent urges that the proposed penalty is disproportionate to the act 

and surrounding circumstances. It stressed the isolated nature of the infraction {see, 

e.g., Tr. 8). It also underscored its reaction to the incident. It noted that it undertook 

additional training and education. The Texas Guard "initiated a far-reaching program 

that covered the entire state," it asserted (Tr. 8). Its actions were prompt and 

extensive, it argues (Tr. 56-57). Complainant failed to properly credit the Texas 

Guard's response. Respondent contends." 

Finally, Respondent points out that the paint it tendered did not ignite (Tr. 57). 

D. Decision 

I have decided to assess a total civil penalty of $30,000. I find and conclude 

that this amount appropriately reflects the totality of the circumstances surrounding 

the offending shipment and the nature of Respondent's conduct both before and 

following the incident. 

Any package containing hazardous materials which does not conform to the 

HMRs brings an unacceptable, and possibly perilous, element into the stream of air 

commerce. An undeclared shipment is especially dangerous because the element 

of ignorance introduces particular vulnerability (see Tr. 53). The Administrator has 

emphasized that undeclared shipments "pose a special risk." See, e.g., Interstate 

Chemical Company, Inc., FAA Order No. 2002-29 (December 6, 2002), p. 16. The 

likelihood of injury is increased. Seven's Paint & Wallpaper, FAA Order No. 2001-6, 

2001 WL 629388 (May 15, 2001), p. 5. The instant scenario could have seriously 

•* Tr. 8-9. Respondent additionally asserted that the agency refiised to attempt to negotiate a settlement in 

good faith, contending that Complainant's posture was arbitrary, capricious, and an abuse of discretion. 

This argimient is dismissed. Inquiry into the character of settlement negotiations is not a proper matter for 

consideration by this Court. Africa Air Corporation, FAA Order No. 99-5, 1999 WL 711275 (August 31, 

1999). 
compromised the safety of individuals or of the flight itself. These facts and 

circumstances warrant a significant fine. 

Leakage is an aggravating factor in the civil penalty calculus. Phillips Building 

Supply, FAA Order No. 2000-20, 2000 WL 33125266 (August 11, 2000), p. 6. It 

raises to unacceptable levels the risk of danger to aircraft structure. A leak also 

could cause adverse conseG|uences for individuals nearby. Materials which are 

flammable (such as paint) could cause a fire by coming into contact with a heat 

source. Such circumstances could threaten the integrity of the flight itself. 

Respondent's plea in mitigation that it is a first-time violator must be rejected. 

The isolated nature of the incident cannot be considered a mitigating circumstance. 

A violation-free history is expected to be the nomn. TCI Corporation, FAA Order No. 

92-77, p. 20 (December 22, 1992). 

Respondent's actions following discovery of the nonconforming shipment are 

commendable. But I have to agree with Complainant's characterization of its 

response. The actions of the Texas Guard, I find, are not the kind of systemic or farreaching changes that the Administrator requires in order to lower an otherwise 

reasonable assessment. See, e.g., Seven's Paint & Wallpaper Co., FAA Order No. 

2001-6(May16, 2001), p. 6. 

Nor can I credit the fact that the paint failed to ignite. This is a fortuitous 

circumstance. Ignition would have constituted an aggravating factor, making a 

higher sanction appropriate (64 Fed.Reg. 19443, 19445 (April 21, 1999)). 

Finally, I find that the civil penalty levied in Midtown Neon Sign Corporation, 

FAA Order No. 1996-26 (August 13, 1996) is pertinent to the detennination of 

penalty here because the circumstances are fairly similar. That case involved an 

undeclared - and leaking - shipment of two 1-gallon cans of paint, for which 

Respondent was fined $25,000. While two cans of paint leaked there, one more 

than in this case, penalty amounts have gone up materially in the interim. Base 

penalty amounts have been raised periodically, and also have been adjusted upward 

to account for inflation. The maximum civil penalty for a single violation of 49 U.S.C. 

§5123(a), $25,000 when the Midtown Neon Sign infractions occurred, was $50,000 

when the shipment in this case was tendered. It had doubled in the intervening 

period. (It has since been raised to $55,000). See Table following 14 C.F.R. 

§13.305 (showing changes in minimum and maximum penalty amounts). Civil 

penalties assessed should appropriately reflect these significant upward 

adjustments. Midtown Neon Sign suggests that the civil penalty Complainant 

proposes here is reasonable and fitting. 

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

discussed are rejected as without merit. 

In weighing the all the facts and circumstances, 1 find and conclude that a civil 

penalty assessment of $30,000 is warranted. This amount appropriately reflects the 

nature of the risk to air transportation safety put in motion by the Texas Guard, while 

giving appropriate weight to other salient factors. The assessment also is designed 
to achieve deterrence and promote compliance with the HMRs. I find that it 

appropriately accounts for the factors the statute and agency policy directs in fixing 

the assessment. 

Respondent Texas Army National Guard is hereby assessed a civil penalty of 

$30,000 for violations of the HMRs 49 C.F.R. §§171.2(e), 172.200(a), 172.202(a)(1), 

172.202(a)(2), 172.202(a)(3), 172.202(a)(4), 172.202(a)(6), 172.202(a)(7), 

172.204(a), 172.204(c)(2), 172.204(c)(3), 172.300(a),172.301 (a), 172.312(a)(2), 

172.400(a), 172.600(c)(1), 172.600(c)(2), 172.702(a), 173.24(b)(1), 173.27(d), and 

173.173 as described in this Initial Decision.^ 

administrative Law Judge 

Attachment - Service List 

' This decision may be appealed to the Administrator of the FAA. The notice of appeal must conform to 

sections 13.210, 13.211(e) and 13.233 of the Rules of Practice, which require that a notice of appeal 1) be 

filed not later than 10 days (plus an additional five days if mailed) from the service date of this decision, 

and 2) be perfected with a written briefer memorandum not later than 50 days (plus an additional five, if 

mailed) from the service date of this decision. The notice of appeal and brief or memorandum must either 

be a) mailed to the Federal Aviation Administration, 800 Independence Avenue, S.W., Washington, DC 

20591, Attn: Hearing Docket Clerk, AGC-430, Wilbur Wright Building—Suite 2W1000, or b) delivered 

personally or via expedited courier service to the Federal Aviation Administration, 600 Independence 

Avenue, S.W., Wilbur Wright Building—Suite 2W1000, Washington, D.C. 20591, Attti: Hearing Docket 

Clerk, AGC-430. A copy of the notice of appeal and brief or memorandum also must be sent to agency 

counsel. Service upon the presidingjudge is optional. 
FAA Docket No. CP09SO0014 

(Civil Penalty Action) 

SERVICE LIST 

ORIGINAL & ONE COPY 

Federal Aviation Administration 

SOO Independence Avenue, S.W. 

Washington, DC 20591 

Attention: Hearing Docket Clerk, AGC-430 

Wilbur Wright Building—Suite 2W1000' 

ONE COPY 

Michael C. Crowley, Respondent's Counsel 

Environmental Protection & Administrative 

Law Division 

P.O. Box 12548 

Austin, TX 78711 

TEL: 512-475-4202 

FAX: 512-474-1062 

Gerald A. Ellis, Complainant's Counsel 

Southern Region, ASO-7 

Federal Aviation Administration 

P.O. Box 20636 

Atlanta, GA 30320 

TEL: 404-305-5200 

FAX: 404-305-5223 

The Honorable Richard C. Goodwin, Administrative Law Judge 

Office of Hearings, M-20 

1200 New Jersey Avenue, S.E. 

East Building Ground Floor 

Room E12-320 

Washington, DC 20590 

TEL: Attorney-Advisor 202-366-2139 

Legal Assistant 202-366-5121 

FAX: 202 366-7536 

' Service was by U.S. Mail. For service in person or by expedited courier, use the following address: Federal 

Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building-^Suite 2W1000, Washington, 

DC 20591; Attention: Hearing Docket Clerk, AGC-430.