BEFORE THE 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

----------------------------x 

In the Matter of 

FEDERAL AVIATION 

ADMINISTRATION, 

Case No. 

FAA-2013-0620 

Complainant, 

vs. 

NATIONAL POWER CORPORATION, 

Respondent. 

----------------------------x 

Dirksen Federal Building 

219 S. Dearborn Street 

Hearing Room 2230 

Chicago, Illinois 60604 

Monday, 

September 29, 2014 

The above-captioned matter 

convened, pursuant to notice at 9:08 a.m. 

BEFORE: 

The Honorable RICHARD C. GOODWIN, 

Administrative Law Judge 

1 

RECEIVED 

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ORIGINAL 

OCT 2 2 2014 

HEARING DOCKET 

NEAL R. GROSS 

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APPEARANCES: 

For the Complainant 

KATE BARBER, ESQ. 

FAA Great Lakes Region 

2300 East Devon 

Des Plaines, Illinois 60018 

For the Respondent 

MARTIN A. BLUMENTHAL, ESQ. 

One Northfield Plaza, Suite 300 

Chicago, Illinois 60093 

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TABLE OF CONTENTS 

OPENING STATEMENT 

On Behalf of Complainant 

On Behalf of Respondent 

9 

12 

WITNESS DIRECT CROSS REDIRECT RECROSS 

Chris Zawarus 

Thomas Vrablik 

Chris Zawarus 

(Recalled) 

Complainant's: 

C-1 

C-2 

C-3 

C-4 

C-5 

C-6 

C-7 

C-8 

C-9 

C-10 

C-11 

C-12 

Respondent's: 

P-D 

P-E 

Employer's: 

E-1 

E-2 

17 70 

100 119 

135 138 

EXHIBITS: 

IDENTIFIED 

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92 96 

126 

IN EVIDENCE 

23/26 

23/31 

23/34 

23/36 

23/38 

23/40 

23/42 

23/44 

23/47 

23/49 

23/51 

54/55 

104 

106 

130 

130 

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1 P R 0 C E E D I N G S 

2 (9:08a.m.) 

3 ADMIN. LAW JUDGE GOODWIN: This the 

4 case of National Power Corporation, FAA, No. 

5 2013-0620. Counsel will identify yourself for 

6 the record, please. 

7 MS. BARBER: Your Honor, my name 

8 is Kate Barber. I'm an attorney with the 

9 Federal Aviation Administration. 

10 MR. BLUMENTHAL: My name is Martin 

11 A. Blumenthal. I'm the attorney for National 

12 Power. 

13 ADMIN. LAW JUDGE GOODWIN: ~1r. 

14 Blumenthal, I have to ask you. Do you have 

15 any relatives in Annapolis, Maryland? 

16 MR. BLUMENTHAL: Not that I know 

17 of, Your Honor. 

18 ADMIN. LAW ,JUDGE GOODWIN: Well 

19 there are a couple of very distinguished 

20 lawyers in Annapolis who I've known for 30, 40 

21 years. 

22 MR . BLUMENTHAL : I think I've 

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1 heard of a couple. 

2 ADMIN. LAW JUDGE GOODWIN: Yes, 

3 Harry Blumenthal is one of them and a couple 

4 other ones. 

5 MR. BLUMENTHAL: Yes, they' re not 

6 related to me. 

7 ADMIN. LAW JUDGE GOODWIN: Well, I 

8 have the same problem with Goodwin, obviously. 

9 MR. BLUMENTHAL: Yeah. 

10 ADMIN. LAW JUDGE GOODWIN: 

11 Ultimately we're related, but 

12 MR. BLUMENTHAL: I believe I've 

13 gotten mail or something for, I don't 

14 remember, it was a few years ago, for someone 

15 out east. 

16 ADMIN. LAW JUDGE GOODWIN: I can 

17 top that, I got a phone call one day in my 

18 office, is this Richard Goodwin? Yes, who's 

19 calling? Well, this is NBC News, we'd like 

20 your thoughts on some political issue. And I 

21 said, I think you've got the wrong Richard 

22 Goodwin. I think you want the one who worked 

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1 for Nixon, he's a couple years older than me. 

2 Oh I'm sorry. And then, of course, my wheels 

3 started turning, can you imagine what would 

4 have happened if I popped off and said 

5 something on it. I'm not going there. 

6 I have to apologize for not 

7 getting an amended hearing notice out. I 

8 didn't realize until Saturday when the court 

9 reporter called me that I had forgotten to 

10 amend the court, the hearing notice. I'm glad 

11 you all took enough initiative to check the 

12 CSOs. I made sure that the CSOs knew this 

13 morning that Mr. Collins had put us in, in 

14 this courtroom. 

15 Normally I take a break about 

16 10:30, break for lunch about noon. Take 

17 another break about 4:30, we'd finish it, 4:30 

18 every afternoon. The primary reason is the 

19 CSOs in most jurisdictions go on overtime at 

20 five. So, because I'm a guest in the 

21 courthouse, I'd like to make sure that I 

22 accommodate the courthouse. 

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1 What I'm going to ask the court 

2 reporter to do, during your presentatio~ if 

3 the court reporter raises his hand, that means 

4 there's something he'd like to spell at a 

5 convenient point. Do that, that way at 

6 midnight tonight, he's not trying to figure 

7 out what it is that we said. 

8 Please review your exhibits to 

9 make sure we don't have any personal 

10 identifying information in the file. And 

11 that's for both parties. Business addresses, 

12 business phone numbers is fine, but I, in 

13 today's environment, you know, I don't think 

14 we want any social security numbers, home 

15 phone numbers, home e-mail addresses. And if 

16 there is, I always bring a large black magic 

17 marker and, and we can redact it. If 

18 necessary, to protect business interest, we 

19 can seal the record and we' 11 address that as 

20 we go along. 

21 I've got a hearing disability, so 

22 if I ask you to repeat something, don't take 

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1 it personally. I, quite literally may not be 

2 able to hear you. I'm going to suggest to the 

3 court reporter, I only need a digital copy. 

4 I'd like a copy in PDF and, was it AS, ACSII, 

5 is that what it's called? In other words, 

6 text. 

7 Okay. And on the Exhibits, I 

8 don't care how you mark them as long as you 

9 don't use the same identical thing. It gets 

10 confusing when you use the same numbers. 

11 Other than that, are there anything 

12 preliminary? 

13 MS. BARBER: No, Your Honor. 

14 ADMIN. LAW JUDGE GOODWIN: Okay. 

15 And if for some reason you need to take a 

16 break, if, I did trial work for 20 some years 

17 and every once in a while you get a frog in 

18 your throat and you're gasping. Just raise 

19 your hand and we'll take a time out. Ms. 

2 o Barber, did you want to make an opening 

21 statement? 

22 MS. BARBER: Yes, Your Honor. 

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1 ADMIN. LAW JUDGE GOODWIN: And I 

2 have to apologize for the format of, 

3 especially to you Mr. Blumenthal, I didn't 

4 literally put the thing here and I was in this 

5 courtroom in the beginning of the month and I 

6 spent two days trying to figure out how to 

7 raise the chair and I didn't figure it out, 

8 so. We'll just have to move around and last 

9 time I was in a courtroom, the lamp was 

10 actually bolted to the desk. Go ahead. 

11 MS. BARBER: May I please the 

12 Court? 

13 ADMIN. LAW JUDGE GOODWIN: Yes. 

14 OPENING STATEMENT BY COMPLAINANT 

15 MS. BARBER: We're here in the 

16 matter of National Power Corporation. The 

17 Federal Aviation Administration hereby asks 

18 the Court to levy a civil penalty in the 

19 amount of $66,000 for violation of the 

20 hazardous materials regulations. The 

21 violations were discovered on May 17, 2010 

22 when the special agent, Mr. Zawarus, who 

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1 you're going to hear from today, conducted a 

2 hazardous materials inspection at the 

3 residence, in the business place of National 

4 Power Corporation. 

5 During that inspection, it was 

6 discovered that several shipments had gone out 

7 and they did not comply with the hazardous 

8 materials regulations. There were 11 

9 shipments of dangerous goods. They were 

10 untested prototype lithium ion batteries and 

11 they were transported by air. And they were 

12 certified under the IKO, technical 

13 instructions for the transportation of 

14 dangerous goods. 

15 We're going to present to you 11 

16 shipping papers of these lithium ion batteries 

17 and describe to you how each one of the 

18 shipping papers and each one of the shipments 

19 violated the hazardous materials regulations. 

20 We will explain that each one of the batteries 

21 required a special permission from the 

22 Pipeline Hazardous Materials Safety 

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1 Administration. However, National Power did 

2 not have this special permission that was 

3 required to ship the batteries. 

4 Additionally, the shipments 

5 weren't properly packaged in UN4G fiberboard 

6 boxes. They were tested in the packing Group 

7 II standard. However, they should have been 

8 packaged in the UN4G packing group one 

9 standard. We're also going to explain to you 

10 why this matters and how this effects safety 

11 in air commerce. 

12 Additionally, National Power 

13 Corporation failed to correctly put the 

14 emergency response information on the shipping 

15 papers. The emergency response telephone 

16 number is a number that needs to be available 

17 and used at all times during the day, 24 

18 hours, seven days a week. We will explain to 

19 you why this regulation is in place and why 

20 the fact that the number on each one of the 

21 shipping papers was in not in compliance and 

22 that it only was answered or available to be 

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1 answered during the business hours, as it was 

2 National Power Corporation's business line. 

3 Additionally, National Power 

4 Corporation violated the hazardous materials 

5 regulation when they had their employee 

6 perform the hazardous materials shipping 

7 functions when that employee had not received 

8 the required hazardous materials training. 

9 Information the FAA will prove that National 

10 Power Corporation violated the hazardous 

11 materials regulations and we would ask that 

12 you, Your Honor, fine them a civil penalty ln 

13 the amount of $66,000. Thank you. 

14 ADMIN. LAW JUDGE GOODWIN: Mr. 

15 Blumenthal, did you want to be heard or do you 

16 want to reserve? 

17 OPENING STATEMENT BY RESPONDENT 

18 MR. BLUMENTHAL: Good morning, 

19 Your Honor. Good morning counsel. Your 

20 Honor, you've heard the allegations that the 

21 FAA has said they were going to prove. 

22 However, National Power, in fact, did not 

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1 violate any of the regulations. The batteries 

2 that were shipped that were the subject of the 

3 complaint were, in fact, tested. They met the 

4 requirements even though they were slightly 

5 different and the way that they were 

6 configured. They did not differ materially 

7 accordirg to what, the way the regs are 

8 written. 

9 As a matter of fact, one of the 

10 batteries, there was zero difference. The 

11 only difference between the battery packs were 

12 the way the individual cells were arranged to 

13 fit the equipment they were supposed to be in. 

14 Further, Your Honor, regarding the allegation 

15 of the improper phone number, there was an 

16 improper phone number on the label. However, 

17 the National Power had contracted with a 

18 company called Chemtrec, the, long before 

19 these labels were discovered to have the wrong 

20 number. It was a typographical error. 

21 National Power was not trying to evade the 

22 requirement of having the emergency number on 

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1 there. Certainly, there was no incentive for 

2 them to do so. It was no question of trying 

3 to save money not having a 24 hour number. 

4 They did, in fact, have it. 

5 As far as, and further, as far as 

6 the shipping of the batteries go, the proto, 

7 actually these were prototypes that were 

8 supposed to be sent in a particular packaging 

9 arrangement. National Power sent these 

10 battery packs ln a higher class than was 

11 necessary to be on the safe side. Apparently 

12 this turns out to be a violation. 

13 But, however, we will show that 

14 the regulations involved are ambiguous. And 

15 a reasonable person could come up with either 

16 interpretation. And we'll show that erring on 

17 the side of caution should not be something 

18 that a company should be punished for. And as 

19 a matter of a fact, they paid for the extra 

20 charges involved for shipping it in a more 

21 safe manner than may have been required 

22 according to a different interpretation of 

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1 the, of the regs. 

2 The other problem we will address, 

3 Your Honor, is the question of the $66,000 

4 fine. We haven't been able to find out how 

5 that was derived. Yes, there are tables 

6 similar to the federal sentencing guidelines, 

7 but the exact way of that the FAA contends 

8 that this fine is reasonable. We haven't been 

9 able to find out. And so, therefore, we' 11 be 

10 presenting no evidence regarding the 

11 reasonableness of the fine. 

12 ADMIN. LAW JUDGE GOODWIN: 

13 All right, thank you. Mr. Blumenthal, if we 

14 get into an area during the discourse where 

15 there is, you mentioned the batteries are 

16 prototype. My concern is, everything we do 

17 here is on the record unless I seal it. Sol 

18 Ms. Barber and Mr. Blumenthal, if we get int.o 

19 an area where we start talking about some 

20 proprietary things, let's have the discussion 

21 whether we want to go off the record and that, 

22 we'll just take it when we get there. Okay? 

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1 MR. BLUMENTHAL: Yes, Your Honor. 

2 ADMIN. LAW JUDGE GOODWIN: And 

3 we'll address the issue. But, I've had cases 

4 in the past where issues have come up that, or 

5 business decisions and, you know, we seal the 

6 record just to make sure that the information 

7 wasn't released earlier than people wanted it 

8 to be. 

9 MR. BLUMENTHAL: Okay. Thank you, 

10 Your Honor. 

11 ADMIN. LAW JUDGE GOODWIN: Thank 

12 you. Ms. Barber, do you want to call your 

13 first witness? 

14 MS. BARBER: The FAA calls l'l.lr. 

15 Christopher Zawarus. 

16 ADMIN. LAW JUDGE GOODWIN: Stand 

17 and raise your right hand. State and spell 

18 your first and last name, please? 

19 THE WITNESS: My name is 

20 Christopher Zawarus. First name is C-h-r-i-s21 t-o-p-h-e-r, last name is Zawarus, z like 

22 zebra, a-w-a-r-u-s. 

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1 ADMIN. LAW JUDGE GOODWIN: Ms. 

2 Barber. 

3 Whereupon, 

4 CHRISTOPHER ZAWARUS 

5 was called as a witness and, after being first 

6 duly sworn, was examined and testified, as 

7 follows: 

8 DIRECT EXAMINATION 

9 BY MS. BARBER: 

10 Q Mr. Zawarus, where are you 

11 currently employed? 

12 A I work for the Federal Aviation 

13 Administration. 

14 Q And what is your position there? 

15 A I'm a manger of hazardous 

16 materials. 

17 Q What type of schooling did you get 

18 to become the manager of hazardous materials? 

19 A When I began in the hazardous 

20 materials section, I went to hazardous 

21 materials basic in Oklahoma City. 

22 Q How long was the program? 

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1 A Three and a-half weeks. 

2 Q And how long have you been with 

3 the FAA? 

4 A Since 2001. 

5 ADMIN. LAW JUDGE GOODWIN: Mr. 

6 Blumenthal, I was just about to suggest to 

7 you, if you want to move around, feel free to 

s do so. 

9 MR. BLUMENTHAL: Thank you, Judge. 

10 ADMIN. LAW JUDGE GOODWIN: I 

11 didn 1 t set the courtroom up. It 1 s better than 

12 the one I tried, earlier when we had 

13 Respondent 1 stable behind the Agency 1 s table, 

14 that was really exciting. Go ahead, sorry, 

15 Ms. Barber. 

16 BY MS. BARBER: 

17 Q No problem. When did you have an 

18 occasion to investigate the National Power 

19 Corporation? 

20 A Conducted an inspection of the 

21 facility on May 17, 2010. 

22 Q Was this the first time you had 

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1 ever been there? 

2 A No. 

3 Q When was the first time you were 

4 at National Power? 

5 A A few weeks earlier in mid to late 

6 April. 

7 Q And what happened then? 

8 A I came in unannounced for 

9 hazardous materials inspection and the owner 

10 of the facility asked to reschedule. 

11 Q And then what happened? 

12 A Following our scheduling of the 

13 inspection a couple days prior, I was notified 

14 that they were canceling that scheduled 

15 inspection. 

16 Q And you did eventually conduct the 

17 inspection, correct? 

18 A Yes. 

19 Q And that was May 17, 2010? 

20 A Yes. 

21 Q What did you discover during this 

22 inspection? 

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1 A During the course of the 

2 inspection, a review of training records 

3 revealed that the individual who was 

4 certifying documentation --

5 MR. BLUMENTHAL: I '11 object, Your 

6 Honor, as the question is too broad and 

7 there's no foundation laid for the question. 

8 ADMIN. LAW JUDGE GOODWIN: 

9 Rephrase the question, Ms Barber. 

10 BY MS. BARBER: 

11 Q Can you repeat what the question 

12 was? Please describe for the Court the 

13 procedure you took during the inspection. 

14 A Met with the owner of the company, 

15 Mr. Alpipirt, his legal counsel and another 

16 individual from the company. Sat down, went 

17 through their shipping process, reviewed 

18 documentation. Reviewed the packaging they 

19 were using, the shipment of the lithium 

20 batteries that they were offering into 

21 transportation. 

22 Q What documents, specifically, did 

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1 you review? 

2 A The retention file, all of the 

3 Federal, I think they were using Federal 

4 Express. The shippers declaration for 

5 dangerous goods they used to declare their 

6 shipments and in commerce. 

7 Q What's the purpose of this 

8 inspection? 

9 A To determine compliance with the 

10 hazardous materials regulation. 

11 Q Did you find any noncompliance 

12 during your inspection? 

13 A Yes. 

14 Q And what did you find? 

15 A Review of training records for the 

16 employee who was certifying the shipper's 

17 declarations for dangerous goods revealed that 

18 she had not competed a course of study in 

19 international standards for which she was 

20 certifying the documents. 

21 Q And by the documents, do you mean 

22 the shipping papers? 

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1 A Yes. 

2 Q What else did you discover? 

3 A Upon questioning Mr. Alpipirt, 

4 indicated that the telephone number that was 

5 being used on the shipping papers was the 

6 general office number for the facility. Upon 

7 further questioning, it was revealed that that 

8 number was only answered during operating 

9 hours, which was six a.m. until six p.m. as it 

10 was told to me. 

11 Q How is that a violation? 

12 A Hazardous materials offered in the 

13 commerce require an emergency response 

14 telephone number that's monitored at all times 

15 while shipments are in commerce. 

16 Q Why does it have to be 24 hours? 

17 A In the event that there's an 

18 incident involving the package, first 

19 responders will contact that number to get 

20 response information. 

21 Q I'm showing you, may I approach, 

22 Your Honor? 

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1 ADMIN. LAW JUDGE GOODWIN: Yes, 

2 thank you. 

3 BY MS. BARBER: 

4 Q I'm showing you what I previously 

5 marked Exhibit C-1 through C-11. Do these 

6 exhibits, one through 11 look familiar to you? 

7 (Complainant's Exhibits C-1 

8 through C-11 were marked for identification.) 

9 A Yes. 

10 Q And what are they'? 

11 A Shippers declarations for 

12 dangerous goods that were reviewed during the 

13 inspection. 

14 Q I'd like to start with C-1. 

15 A Okay. 

16 ADMIN. LAW JUDGE GOODWIN: Before 

17 you do that, just so you, everybody 

18 understands, what the Court does, I write ID 

19 above the exhibit number. If and when it's 

2 0 admit ted, I ' ll line through ID and put the 

21 date. That's, so I make sure it's in 

22 properly, so when you see the, and again, 

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1 exhibits all go on the internet, so just make 

2 sure that there's no information on here that 

3 you don't want on the internet. I'm sorry, 

4 Ms. Barber. 

5 BY MS. BARBER: 

6 Q What is the airway bill number of 

7 Exhibit C-1? 

8 A 798285410873. 

9 Q On C-1, what is the date of the 

10 shipment? 

11 A It was certified on January 8, 

12 2010. 

13 Q And what was contained in this 

14 shipment? 

15 A The shipment was declared to 

16 contain lithium ion batteries. UN number 

17 3480, Class 9 hazardous materials and packing 

18 Group II. 

19 Q What was the package group? 

20 A The shipment contained a packing 

21 two material. 

22 Q Who signed the declaration of 

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1 shipment? 

2 A Maria Munoz, office manager. 

3 Q And what is the telephone number 

4 that is on that, on C-1? 

5 A 1-800-813-9468. 

6 Q What did you later determine who 

7 that number belonged to? 

8 A That's the general office number 

9 for National Power Corporation. 

10 Q At this time, Your Honor, does 

11 this, does C-1 fairly and accurately depict 

12 the shipping paper that you looked at and made 

13 a copy of on May 17, 2010? 

14 A Yes. 

15 MS. BARBER: Your Honor, I would 

16 ask to introduce this into evidence. 

17 ADMIN. LAW JUDGE GOODWIN: Mr. 

18 Blumenthal? 

19 MR. BLUMENTHAL: No objection. 

20 ADMIN. LAW JUDGE GOODWIN: 

21 Complainant's 1 for identification is received 

22 into evidence as Complainant's 1. 

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1 (Complainant's Exhibit C-1 was 

2 received into evidence.) 

3 BY MS. BARBER: 

4 Q Please go through C-1 and explain 

5 to Judge Goodwin where the hazardous materials 

6 regulations violations appear. 

7 A In the certification box, Maria 

8 Munoz, off ice manager, review of her training 

9 record revealed that her hazardous materials 

10 training was DOT specific and did not include 

11 a course of study in international standards 

12 for which the shipping paper was certified. Go 

13 on? 

14 Q Yes, please. 

15 A The emergency response telephone 

16 number provided as indicated by Mr. Alpipirt, 

17 was a general off ice number that was not 

18 answered outside the operating hours of six 

19 a.m. to six p.m. And through review of the 

20 packaging information that was provided during 

21 the course of the inspection, it was revealed 

22 that the lithium ion batteries were not UN 

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1 tested. Therefore, they required authorization 

2 by the Pipeline Hazardous Materials Safety 

3 Administration, and would then be required to 

4 be offered in a packing group one packaging. 

5 Q According to Exhibit C-1, what 

6 packaging group was this shipment offered in? 

7 A Packing Group II. 

8 Q Did you learn how the batteries 

9 were packaged when sent? 

10 A Yes. During the course of the 

11 inspection, packaging materials were provided 

12 for review. We were provided a fiberboard box 

13 and that was rated to the packing Group II 

14 standard. It was a combination packaging that 

15 contained a metal inner can and a foam insert 

16 to hold the batteries in place. And I was 

17 also told that battery shipments were offered 

18 exempt --

19 MR. BLUMENTHAL: Objection, 

20 hearsay. 

21 ADMIN. LAW JUDGE GOODWIN: 

22 Sustained. 

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1 BY MS. BARBER: 

2 Q Who told you about the battery 

3 packages? 

4 A Mr. Alpipirt. 

5 Q And who is Mr. Alpipirt? 

6 A Owner of National Power 

7 Corporation. 

8 MS. BARBER: Your Honor, I would 

9 ask that it's not hearsay what Mr. Alpipirt 

10 told Mr. Zawarus during the course of the 

11 investigation as it is an admission by party 

12 opponent in regards to the packaging and how 

13 they package the shipments. 

14 ADMIN. LAW JUDGE GOODWIN: Mr. 

15 Blumenthal? 

16 MR. BLUMENTHAL: No objection to 

17 the rephrasing. 

18 ADMIN. LAW JUDGE GOODWIN: Okay. 

19 I'll allow the testimony and this is an 

20 administrative hearing and the FAA rules do 

21 allow hearsay being, obviously the hearsay can 

22 be admitted, it goes to the weight that the 

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1 Court's going to put on it, on the evidence. 

2 So, I'll allow it during the hearing. 

3 MS. BARBER: Okay. Thank you, 

4 Your Honor. 

5 BY MS. BARBER: 

6 Q What did Mr. Alpipirt tell you in 

7 regards to how he packaged the shipment in C8 1? 

9 A I was told that shipments of 

10 lithium ion batteries that were offered fully 

11 regulated were done so because they were 

12 untested prototype lithium batteries being 

13 sent to customers for potential purchase. 

14 Q And what, was the way they were 

15 packaged compliant with the hazardous 

16 materials and regulations? 

17 A No. Untested batteries require an 

18 authorizatim from Pipeline Hazardous 

19 Materials Safety Administration and have 

20 higher packaging requirements. 

21 Q Now, I'd like to draw your 

22 attention to Exhibit C-2. Do you recognize 

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1 Exhibit C-2? 

2 A Yes. 

3 Q And what is it? 

4 A It's a shipper's declaration for 

5 dangerous goods. 

6 Q Okay. What date was the 

7 declaration for dangerous goods sent? 

8 A It was certified on January 8, 

9 2010. 

10 Q And what is the airway bill 

11 number? 

12 A Airway bill is 793164350459. 

13 Q And who signed the certification? 

14 A Maria Munoz, office manager. 

15 Q Do you recognize this document as 

16 the airway bill that you investigated and 

17 inspected on May 17, 2010? And does it fairly 

18 and accurately depict that airway bill? 

19 A Yes. 

20 MS. BARBER: We request that 

21 Exhibit C-1 be entered into evidence, Your 

22 Honor. 

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1 MR. BLUMENTHAL: No objection. 

2 ADMIN. LAW JUDGE GOODWIN: C-2 for 

3 identificationhas been received into evidence 

4 as Complainant's 2. 

5 (Complainant's Exhibit C-2 was 

6 received into evidence.) 

7 MS. BARBER: I would also ask for 

8 the sale of expediency, there are 11 of them, 

9 if I could move them all into evidence, or 

10 would you like me to lay foundation for each 

11 one individually? 

12 ADMIN. LAW JUDGE GOODWIN: In 

13 fairness to Respondent, I think we ought to 

14 just take them one at a time. 

15 MS. BARBER: Okay. 

16 ADMIN. LAW JUDGE GOODWIN: It 

17 makes the record easier. 

18 MS. BARBER: Very well. 

19 ADMIN. LAW JUDGE GOODWIN: Thank 

20 you for asking. 

21 BY MS. BARBER: 

22 Q On Exhibit C-2, please describe 

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1 each area where the hazardous materials 

2 violations were regulated? 

3 A In the signatory box, the document 

4 was certified by Maria Munoz. Her, Ms. Munoz 

5 training failed to include training in the 

6 international standards for which the document 

7 was certified. The emergency response 

8 telephone number provided, as previously 

9 indicated is a number for the general office 

10 at National Power Corporation, which I was 

11 told was only answered during operation hours, 

12 six a.m. to six p.m. 

13 As previously indicated, I was 

14 told by Mr. Alpipirt that fully regulated 

15 hazardous material shipments of lithium 

16 batteries were untested prototype lithium 

17 batteries. Therefore, upon my request, 

18 National Power Corporation was unable to 

19 provide an authorization from Pipeline 

20 Hazardous Materials Safety Administration for 

21 shipment of those battery types and the 

22 packaging provided was not compliant with the 

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1 higher standard required for untested lithium 

2 batteries. 

3 Q I'd like to now ask you about 

4 Exhibit C-3. What date was, well, what is 

5 Exhibit C-3? 

6 A Shipper's declaration for 

7 dangerous goods. 

8 Q And what is the airway bill 

9 number? 

10 A Airway bill is 793164350426. 

11 Q And what day was it sent? 

12 A It was certified on January 8, 

13 2010. 

14 Q Who certified it? 

15 A Maria Munoz, office manager. 

16 Q And what were they sending? 

17 A Lithium ion batteries, UN number 

18 3480, Class 9 hazardous materials, packing 

19 Group II. 

20 Q Does Exhibit C-3 fairly and 

21 accurately depict the airway bill number that 

22 you copied and inspected on May 17, 2010? 

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1 A Yes. 

2 MS. BARBER: Your Honor, at this 

3 time, the FAA asks to enter into evidence 

4 Exhibit C-3. 

5 MR. BLUMENTHAL: No objection. 

6 ADMIN. LAW JUDGE GOODWIN: Exhibit 

7 C-3 for identification is received into 

8 evidence as Exhibit C-3. 

9 (Complainant's Exhibit C-3 was 

10 received into evidence.) 

11 BY MS. BARBER: 

12 Q Mr. Zawarus, please describe for 

13 the Court each way that Exhibit C-3 is in 

14 violation of the hazardous materials 

15 regulations. 

16 A The document was certified by 

17 Maria Munoz, office manager. Her hazardous 

18 materials training, upon review, was found to 

19 not include training in the international 

20 standards for which she certified document. 

21 The emergency response telephone number 

22 provided on the shipper's declaration was an 

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1 office number that was not operational outside 

2 the hours of six, or not answered outside the 

3 hours of six a.m. to six p.m. 

4 It was found that the, or it was 

5 determined that the lithium ion batteries that 

6 were offered in the shipment were untested 

7 prototype lithium batteries for which no 

8 authorization from PHMSA was available. And 

9 the packaging used to prepare those shipments 

10 was not of the standard required for untested 

11 batteries. 

12 Q Okay. Now, I'd like to draw your 

13 attention to Exhibit C-4. What is the airway 

14 bill number of Exhibit C-4? 

15 A Airway bill is 793174932310. 

16 Q And what date is on Exhibit C-4? 

17 A Shipment was certified on January 

18 12, 2010. 

19 Q Who certified the document? 

20 A Maria Munoz, office manager. 

21 Q Does Exhibit C-4 fairly and 

22 accurately depict the airway bill that you 

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1 inspected and copied on May 17, 2010? 

2 A Yes. 

3 MS. BARBER: At this time, Your 

4 Honor, the FAA seeks to enter into evidence 

5 Exhibit C-4. 

6 MR. BLUMENTHAL: No objection. 

7 ADMIN. LAW JUDGE GOODWIN: Exhibit: 

8 C-4 for identification is received into 

9 evidence as Exhibit C-4. 

10 (Complainant's Exhibit C-4 was 

11 received into evidence.) 

12 BY MS. BARBER: 

13 Q Mr. Zawarus, please describe in 

14 each way that Exhibit C-4 is in violation of 

15 the hazardous materials regulations. 

16 A Maria Munoz, office manage:r- who 

17 certified the document, review of her 

18 training, revealed that she did not have 

19 instruction in the use of international 

20 standards for which the document was 

21 certified. The emergency response telephone 

22 number listed on the shipper's declaration was 

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1 the general office number for National Power 

2 Corporation, which is not answered outside the 

3 hours of six a.m. to six p.m. 

4 The lithium ion batteries offered 

5 as part of this shipment, the company could 

6 not provide UN test reports for, and there was 

7 no authorization from the Pipeline Hazardous 

8 Materials Safety Administration for shipment 

9 of untested batteries issued to National Power 

10 Corporation. And the packaging used to 

11 prepare the shipment was not the appropriate 

12 level for an untested lithium ion battery. 

13 Q Okay. I'd like to draw your 

14 attention to Exhibit C-5. Please describe the 

15 airway bill number of Exhibit C-5? 

16 A Airway bill is 798307715600. 

17 Q And what date was this airway bill 

18 certified? 

19 A Shipment was certified on January 

20 15,2010. 

21 Q Who certified the shipment? 

22 A Maria Munoz, office manager. 

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1 Q Does airway bill, Exhibit C-5 

2 fairly and accurately depict the airway bill 

3 that you inspected and copied on May 17, 2010? 

4 A Yes. 

5 MS. BARBER: At this time, Your 

6 Honor, I would ask that Exhibit C-5 be entered 

7 into evidence. 

8 MR. BLUMENTHAL: No objection. 

9 ADMIN. LAW JUDGE GOODWIN: Exhibit 

10 Complainant's 5 for identification is received 

11 into evidence as Complainant's 5. 

12 (Complainant's Exhibit C-5 was 

13 received into evidence.) 

14 BY MS. BARBER: 

15 Q Mr. Zawarus, please describe in 

16 each way that Exhibit C-5 is in violation of 

17 the hazardous materials regulations. 

18 A Maria Munoz, office manager 

19 certified the document. During review of 

20 training records, it was revealed that she 

21 didn't have training in use of the 

22 international standards for which the document 

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1 was certified. The emergency response 

2 telephone number 1 is ted on the shipping paper 

3 was a number, a general number for National 

4 Power Corporation, which was not answered 

5 outside the hours of six a.m. to six p.m. The 

6 lithium ion batteries contained ln the 

7 shipment, as indicated by National Power 

8 Corporation were untested prototype lithium 

9 batteries and the packaging used to prepare 

10 those, that the shipment was a packing Group 

11 II standard, specification, fiberboard box. 

12 Untested lithium batteries require a higher 

13 standard for UN specification. 

14 Q Now, I'd like to draw your 

15 attention to Exhibit C-6. What is the airway 

16 bill number of Exhibit C-6? 

17 A Airway bill number is 

18 798378979723. 

19 Q And what date was this certified? 

20 A Shipment was certified on February 

21 10, 2010. 

22 Q Who certified this? 

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1 A Maria Munoz, office manager. 

2 Q Does this airway bill, Exhibit C3 6, fairly and accurately depict the airway 

4 bill that you inspected and copied on May 17, 

5 2010? 

6 A Yes. 

7 MS. BARBER: At this time, Your 

8 Honor, we wish to enter into evidence Exhibit 

9 C-6. 

10 MR. BLUMENTHAL: No objection. 

11 ADMIN. LAW JUDGE GOODWIN: 

12 Complainant's 6 for identification is received 

13 into evidence as Complainant 6. 

14 (Complainant's Exhibit C-6 was 

15 received into evidence.) 

16 BY MS. BARBER: 

17 Q Mr. Zawarus, please describe each 

18 way that Exhibit C-6 is in violation of the 

19 hazardous materials regulations. 

20 A Maria Munoz, office manager, who 

21 certified the document, during review of 

22 training records, it was revealed that she did 

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1 not have training in the use of international 

2 standards for which the document was 

3 certified. 

4 The emergency response telephone 

5 number listed on the shipping paper was 

6 determined to be that of the general office 

7 number of National Power Corporation. A 

8 number that was not, or is not answered 

9 outside business hours of six a.m. to six p.m. 

10 The lithium ion batteries 

11 contained in the shipment were determined to 

12 be untested prototype lithium ion batteries. 

13 The company could not provide an authorization 

14 from Pipeline Hazardous Materials Safety 

15 Administration for shipment of those 

16 batteries. 

17 And the packing group, or the 

18 packaging used to prepare those shipments did 

19 not meet the higher packaging level required 

20 for untested lithium batteries. 

21 Q Now, I'd like to draw your 

22 attention to Exhibit C-7. What is the airway 

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1 bill number of Exhibit C-7? 

2 A Airway bill number is 

3 793316713356. 

4 Q And what date was this certified? 

5 A Shipment was certified on March 2, 

6 2010. 

7 Q And who certified it? 

8 A Maria Munoz, office manager. 

9 Q Does Exhibit C-7 fairly and 

10 accurately depict the airway bill that you 

11 inspected and copied on May 17, 2010? 

12 A Yes. 

13 MS. BARBER: At this time, Your 

14 Honor, we seek to introduce into evidence, or 

15 enter into evidence Exhibit C-7. 

16 MR. BLUMENTHAL: No objection. 

17 ADMIN. LAW JUDGE GOODWIN: 

18 Complainant 7 for identification is received 

19 into evidence as Complainant 7. 

20 (Complainant's Exhibit C-7 was 

21 received into evidence.) 

22 BY MS. BARBER: 

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1 Q Mr. Zawarus, please describe each 

2 way that Exhibit C-7 was in violation of the 

3 hazardous materials regulations. 

4 A Maria Munoz, office manager, who 

5 certified the document, review of her training 

6 records revealed she did not have training in 

7 the use of international standards for which 

8 the document was certified. The emergency 

9 response telephone number listed on the 

10 shipping paper was the general office number 

11 of National Power Corporation. A number which 

12 is not answered outside business hours of six 

13 a.m. to six p.m. 

14 The lithium ion batteries 

15 contained in this shipment were untested 

16 prototype lithium batteries and no 

17 authorization was available from Pipeline 

18 Hazardous Materials Safety Administration for 

19 shipment of those batteries. The packing used 

20 to prepare the shipments did not meet the 

21 higher, heightened packing requirements for 

22 untested prototype lithium batteries. 

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1 Q Now, I'd like to draw your 

2 attention to Exhibit C-8. What is the airway 

3 bill number of Exhibit C-8? 

4 A Airway bill is 798461814731. 

5 Q And what day was this airway bill 

6 certified? 

7 A Shipment was certified on March 

8 10, 2010. 

9 Q And who certified? 

10 A Maria Munoz, office manager. 

11 Q Does Exhibit C-8 fairly and 

12 accurately depict the airway bill number that 

13 you copied and inspected on May 17, 2010? 

14 A Yes. 

15 MS. BARBER: We ask to enter into 

16 evidence Exhibit C-8. 

17 MR. BLUMENTHAL: No objection. 

18 ADMIN. LAW JUDGE GOODWIN: 

19 Complainant's 8 for identification is received 

20 into evidence as Complainant's 8. 

21 (Complainant's Exhibit C-8 was 

22 received into evidence.) 

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1 BY MS. BARBER: 

2 Q Please describe each way that 

3 Exhibit C-8 is in violation of the hazardous 

4 materials regulations. 

5 A Maria Munoz, the office manager 

6 who certified the shipment, through review of 

7 her training records, it was revealed that she 

8 had no training in the use of international 

9 standards for which the document was 

10 certified. The emergency response telephone 

11 number provided on the shipping paper was the 

12 general office number for National Power 

13 Corporation. A number that was not answered 

14 outs ide of normal business hours, six a.m. to 

15 six p.m. 

16 The lithium ion batteries 

17 contained in the shipment were untested 

18 prototype lithium batteries for which no 

19 authorization was available from Pipeline 

20 Hazardous Materials Safety Administration. 

21 And the packaging used to prepare the shipment 

22 was not the heightened package, it didn't meet 

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1 the heightened packaging requirements for 

2 untested lithium batteries. 

3 Q Now, I'd like to draw your 

4 attention to Exhibit C-9. What is the airway 

5 bill number of Exhibit C-9? 

6 A Airway bill number is 

7 798461814720. 

8 Q And what day was this shipment 

9 certified? 

10 A Shipment was certified on March 

11 10, 2010. 

12 Q And who certified it? 

13 A Maria Munoz, office manager. 

14 Q Does Exhibit C-9 fairly and 

15 accurately depict the airway bill that you 

16 copied and inspected on May 17, 2010? 

17 A Yes. 

18 MS. BARBER: The FAA asks to enter 

19 into evidence C-9. 

20 MR. BLUMENTHAL: No objection. 

21 ADMIN. LAW JUDGE GOODWIN: 

22 Complainant's9 for identificationis received 

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1 into evidence as Complainant's 9. 

2 (Complainant's Exhibit c- 9 was 

3 received into evidence.) 

4 BY MS. BARBER: 

5 Q Please describe each way that 

6 Exhibit 9 is in violation of the hazardous 

7 materials regulations. 

8 A Maria Munoz, office manager, who 

9 certified this shipment, through review of her 

10 training records, it was revealed she didn't 

11 have international standards training for 

12 which the document was certified. 

13 The emergency response telephone 

14 number listed on the shipping paper was that 

15 of the general office number for National 

16 Power Corporation. A number that was not 

17 answered outside hours of six a.m. to 

18 six p.m. 

19 The lithium ion batteries 

20 contained in the shipment were untested 

21 prototype lithium batteries for which no 

22 authorization was available from the Pipeline 

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1 Hazardous Materials Safety Administration. 

2 And the packaging used to prepare the shipment 

3 did not meet the heightened packaging 

4 requirements for untested lithium batteries. 

5 Q Now, I'm going to ask you about 

6 Exhibit C-10. What is the airway bill number 

7 of Exhibit C-10? 

8 A 793388207231 is the airway bill 

9 number. 

10 Q And what date was this certified? 

11 A Shipment was certified on March 

12 25, 2010. 

13 Q And who certified the shipment? 

14 A Maria Munoz, office manager. 

15 Q Does the airway bill listed on 

16 Exhibit C-10 fairly and accurately depict the 

17 airway bill that you inspected and copied on 

18 May 17, 2010? 

19 A Yes. 

20 MS. BARBER: The Complainant asks 

21 to enter into evidence C-10. 

22 MR. BLUMENTHAL: No objection. 

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1 ADMIN. LAW JUDGE GOODWIN: 

2 Complainant 10 for identification is received 

3 into evidence as Complainant's 10. 

4 (Complainant's Exhibit C-10 was 

5 received into evidence.) 

6 BY MS. BARBER: 

7 Q Mr. Zawarus, please describe each 

8 way that Exhibit C-10 is in violation of the 

9 hazardous materials regulations. 

10 A Maria Munoz, the office manager, 

11 who certified the shipping paper, through 

12 review of her training records was revealed to 

13 have not completed instruction in the use of 

14 international standards, which is how the 

15 shipment was certified. The emergency 

16 response telephone number listed on the 

17 shipping paper was the general office number· 

18 of National Power Corporation. A number that 

19 was not answered outside hours of six a.m. to 

20 six p.m. 

21 The lithium ion batteries 

22 contained in the shipment were untested 

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1 prototype lithium batteries for which no 

2 authorization was available from the Pipeline 

3 Hazardous Materials Safety Administration. 

4 And the packaging used to prepare the shipment 

5 did not meet the heightened packing 

6 requirements for untested lithium batteries. 

7 Q I'd like to draw your attention, 

8 finally to Exhibit C-11. What is the airway 

9 bill number on Exhibit C-11? 

10 A Airway bill number is 

11 793388207334. 

12 Q And what date was this airway bill 

13 certified? 

14 A Shipment was certified on March 

15 25, 2010. 

16 Q And who certified the shipment? 

17 A Maria Munoz, office manager. 

18 Q Does Exhibit C-11 fairly and 

19 accurately depict the airway bill that you 

20 copied and inspected on May 17, 2010? 

21 A Yes. 

22 MS. BARBER: The Complainant asks 

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1 to enter into evidence Exhibit C-11. 

2 MR. BLUMENTHAL: No objection. 

3 ADMIN. LAW JUDGE GOODWIN: 

4 Complainant's 11 for identification is 

5 received into evidence as Complainant's 11. 

6 (Complainant's Exhibit C-11 was 

7 received into evidence.) 

8 BY MS. BARBER: 

9 Q Please describe for the Court each 

10 way that Exhibit C-11 is in violation of the 

11 hazardous materials regulations. 

12 A Maria Munoz, office manager, who 

13 certified the shipment through review of her 

14 training records did not have instruction in 

15 the use of international standards for which 

16 the shipment was certified. The emergency 

17 response telephone number listed on the 

18 shipping paper was the general office number 

19 for National Power Corporation. A number 

20 which was not answered outside of the hours of 

21 six a.m. to six p.m. 

22 The lithium ion batteries 

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1 contained in the shipment were untested 

2 prototype lithium batteries for which no 

3 authorization was available from the Pipeline 

4 Hazardous Materials Safety Administration. 

5 The packaging used to prepare the shipments 

6 did not meet the heightened packing 

7 requirements for untested lithium batteries. 

8 Q What did you do after you finished 

9 your inspection and then discovered that there 

10 were these 

11 MR. BLUMENTHAL: Objection, 

12 leading. 

13 ADMIN. LAW JUDGE GOODWIN: Yes, 

14 rephrase the question. 

15 BY MS. BARBER: 

16 Q Tell me how you finished your 

17 inspection? 

18 A During the inspection, I had 

19 questioned and was told that the batteries 

20 that were offered under these shipments were 

21 untested prototypes that were being offered to 

22 prospective customers for review. I asked for 

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1 authorization, a DOT special permit or 

2 competent authority from Pipeline Hazardous 

3 Materials Safety Administration that would 

4 allow shipment of these batteries in air 

5 commerce. I was told none was available. 

6 Upon return to the office, I 

7 reviewed the documentation that was collected, 

8 the training records that were collected and 

9 I, the office issued a letter of investigation 

10 to National Power Corporation relative to the 

11 violations that were determined during the 

12 inspection. 

13 Q Did National Power Corporation 

14 respond to your letter of investigation? 

15 A Yes. 

16 Q And what did they say? 

17 A In their letter of response, they 

18 admitted to the emergency response telephone 

19 number not being an appropriate number. 

20 MR. BLUMENTHAL: Objection, 

21 there's no letter of response ln evidence. 

22 ADMIN. LAW JUDGE GOODWIN: Yes, 

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1 establish your foundation. 

2 MS. BARBER: May I approach, Your 

3 Honor? 

4 ADMIN. LAW JUDGE GOODWIN: Sure. 

5 BY MS. BARBER: 

6 Q I'm showing you what's previously 

7 been marked as Exhibit C-12. Do you recognize 

8 Exhibit C-12? 

9 (Complainant's Exhibit C-12 was 

10 marked for identification.) 

11 A Yes. 

12 Q And what is it? 

13 A C-12 is an e-mail containing 

14 National Power Corporation's response to the 

15 FAA's letter of investigation. 

16 Q And does this e-mail and attached 

17 letter fairly and accurately depict the 

18 correspondence that you got from l'llr. Alpipirt? 

19 A Yes. 

20 MS. BARBER: At this time, Your 

21 Honor, the Complainant asks to enter into 

22 evidence Exhibit C-12. 

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1 MR. BLUMENTHAL: What was the date 

2 of that e-mail? 

3 ADMIN. LAW JUDGE GOODWIN: It's 

4 Exhibit 12, Mr. Blumenthal. It's the second 

5 page. I've marked C-12 as having three pages. 

6 This would be page two of three. It's got the 

7 National Power Corporation letterhead in the 

8 upper left-hand corner. 

9 MR. BLUMENTHAL: Okay. No 

10 objection. 

11 ADMIN. LAW JUDGE GOODWIN: It's 

12 the one I'm looking at, so 

13 MR. BLUMENTHAL: Okay. I have it. 

14 ADMIN. LAW JUDGE GOODWIN: If 

15 we're all wrong, we're all wrong together. 

16 MR. BLUMENTHAL: Okay. No 

17 objection. 

18 ADMIN. LAW JUDGE GOODWIN: All 

19 right. Complainant's 12 for identification is 

20 received into evidence as Complainant's 12. 

21 (Complainant's Exhibit C-12 was 

22 received into evidence.) 

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1 BY MS. BARBER: 

2 Q What did C-12 tell you? 

3 A The letter response indicated that 

4 the 24 hour telephone number that was in 

5 question, that was provided by National Power 

6 Corporation on the shipping papers, they, they 

7 agreed with the findings and agreed to correct 

8 them immediately and indicated that they had 

9 done so. National Power stated that they 

10 would provide the 24 hour number of Chemtrec 

11 as their emergency response telephone number 

12 in the future. 

13 ADMIN. LAW JUDGE GOODWIN: Would 

14 you spell Chemtrec, please? 

15 THE WITNESS: Sure. Chemtrec is 

16 spelled C-h-e-m-t-r-e-c. 

17 ADMIN. LAW JUDGE GOODWIN: Thank 

18 you. 

19 THE WITNESS: In their letter of 

20 response, National Power Corporation indicated 

21 that they offered the shipments under 

22 reasonable and good faith basis, believing 

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1 that they were in conformance with the 

2 applicable regulations. But without special, 

3 without knowledge the special approval by 

4 PHMSA was needed. The letter response 

5 indicated that, following the receipt of the 

6 FAA's letter of investigation, 

7 National Power immediately 

8 instructed its employees to discontinue air 

9 freight shipments of untested prototype 

10 batteries pending a receipt of special 

11 approval from PHMSA. And that employees were 

12 provided functions, specific training and 

13 compliance with 49CFR. National Power 

14 Corporation provided business information, 

15 they provided copies of hazardous materials 

16 training records along with a course outline 

17 for that training. And an explanation 

18 specific corrective actions implemented to 

19 prove event similar. Albeit, unattended 

20 violations of the regulations. 

21 Lastly, National Power indicated 

22 that they would dedicate a page on their 

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1 website to the hazardous materials regulations 

2 to alert their customers in general 

3 marketplace of the regulations and methods for 

4 proper and compliant shipment. 

5 BY MS. BARBER: 

6 Q What was the date of that letter, 

7 again? Sorry. 

8 A The date of the response was June 

9 10, 2010. 

10 Q Did you verify that the corrective 

11 actions were taken as stated by National Power 

12 Corporation? 

13 A I followed-up with National Power 

14 Corporation relative to the training that was 

15 provided because it still did not appear to 

16 have instruction in international standards. 

17 Q Was corrective action eventually 

18 taken by National Power? 

19 A Yes. Yes. 

20 Q And did you take these corrective 

21 actions into consideration when determining 

22 the amount of sanction? 

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1 A Corrective action is taken into 

2 account, yes. 

3 Q Did National Power happen t.o put 

4 anything on their website as per the letter 

5 stated? 

6 A I was unable to verify that. 

7 Q In regards to the sanction, how, 

8 without going into the specifics of how each 

9 individual sanction is determined, what are 

10 the general factors that you consider when 

11 looking at the appropriate amount of sanction? 

12 A Risk of the hazardous materials, 

13 the nature of the shipment, undeclared, you 

14 know, versus declared. And I'm not sure what 

15 

16 Q Specifically, in this case, you 

17 just responded that you do take into consider 

18 the risk of the material. In regards to 

19 untested prototype lithium batteries, what 

20 type of risk is there in shipping those? 

21 MR. BLUMENTHAL: Objection as to, 

22 if he's an expert in these areas. There's 

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1 been no foundation laid that he would know. 

2 Or that he was trained or educated in these 

3 areas that would show how they're dangerous. 

4 MS. BARBER: Would you like me to 

5 respond? 

6 ADMIN. LAW JUDGE GOODWIN: Let's 

7 establish some foundation. 

8 MS. BARBER: Okay. 

9 ADMIN. LAW JUDGE GOODWIN: So, 

10 I'll sustain the objection at this time. 

11 BY MS. BARBER: 

12 Q In your position as the manager of 

13 the hazardous materials division for the FAA, 

14 what type of training and knowledge have you 

15 received in regards, specifically to lithium 

16 ion batteries? 

17 A We receive hazardous materials 

18 training, we receive it recurrently and we 

19 receive instruction in lithium battery 

20 shipment. 

21 Q When was the most recent recurrent 

22 that you've taken? 

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1 A Six weeks ago. 

2 Q And how often do you take that? 

3 A Recurrently every, I mean, we take 

4 training annually. Recurrently every three 

5 years. 

6 Q And what do these classes entail? 

7 A Instruction in the hazardous 

8 materials regulations. 

9 Q And do they speak specifically to 

10 lithium batteries and the risk determinations 

11 of those batteries? 

12 A This most recent training did have 

13 instruction in hazardous, or lithium battery 

14 shipping, yes. 

15 Q Is it part of your position at the 

16 FAA to determine the amount of sanction 

17 appropriate per each hazardous materials that 

18 lS shipped in each specific case? 

19 A Yes, we make recommendations. 

20 Q Okay. And your trained on that 

21 currently, correct? 

22 A Correct. 

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1 MS. BARBER: At this point, Your 

2 Honor, I would enter Mr. Zawarus as an expert 

3 and in his job as the manger of the hazardous 

4 materials division. And the fact that he's 

5 the one that actually made the sanction, so he 

6 would know how, so I, not only is, I would ask 

7 him to be accepted as an expert, but the point 

s of this conversation is that more of a 

9 participant witness type of situation. The 

10 fact that he was actually the one that 

11 evaluated and made the sanction. So, it would 

12 be his mental determination of how that came 

13 about, which they were inquiring about to 

14 begin with. 

15 ADMIN. LAW JUDGE GOODWIN: Mr. 

16 Blumenthal? 

17 MR. BLUMENTHAL: Your Honor, I 

18 would, I would object to the Government 

19 introducing Agent Zawarus as, or tendering him 

20 as an expert. But I, because he did not 

21 describe the training, there's no specific 

22 degree or who provided the training. I'll 

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1 accept that as his testimony, but as far as 

2 tendering him as an expert witness, I would 

3 object to that. 

4 ADMIN. LAW JUDGE GOODWIN: I'm 

5 going to sustain it as to him being accepted 

6 as an expert. I don't think there's 

7 sufficient commendation. I think that Agency 

8 has established sufficient foundation to all 

9 the testimony on the subject, but not 

10 testimony as an expert. 

11 MS. BARBER: Okay. 

12 BY MS. BARBER: 

13 Q So, ln your position, as a 

14 hazardous materials manager and the person who 

15 investigated this case, how did you take into 

16 consideration that they were lithium 

17 batteries? 

18 A Lithium battery is a Class 9 

19 hazardous materials. We assign it a minimum 

20 risk level, according to the hazardous 

21 materials. Class 9 is a miscellaneous 

22 hazardous material with a minimum risk. That 

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1 being said, untested lithium battery is of a 

2 higher risk because lithium batteries have 

3 shown in testing to be unpredictable. 

4 MR. BLUMENTHAL: Your Honor, at 

5 this point, I understand Your Honor's remark 

6 that if the, under agency regulations, hearsay 

7 is, it would be admissible, but there has been 

8 no foundation laid about any tests showing 

9 that lithium batteries can be dangerous and 

10 would be most unreliable type of hearsay. 

11 ADMIN. LAW JUDGE GOODWIN: 

12 Understand the objection, but I think the 

13 problem is, the current inquiry is to as to 

14 how the sanctions were set up. Witness has 

15 testified that he's had training on lithium 

16 batteries, and as per that training, one 

17 presumes that, I think the technical issue 

18 you're describing, Mr. Blumenthal, is to 

19 whether the information they're giving is 

20 accurate. And I think that's probably beyond 

21 the scope of what I can do. 

22 If his training is that they're 

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1 told in their training that untested 

2 prototypes have a higher risk, then that's the 

3 instruction that he uses in determining the 

4 sanctions. Whether the underlining science is 

5 inaccurate, I think it's beyond the scope of 

6 what I can address. But it certainly goes to 

7 weight as to what I'm going to consider in 

8 determining whether or not the sanction asked 

9 for in this case was appropriate. 

10 You know, and if your position is 

11 that the underlining testing doesn't support 

12 what the Agency has done in classifying these, 

13 then that's something I think is well within 

14 the range of what the Court can do in 

15 determining whether the sanction is 

16 appropriate. At this point, well, anyway. 

17 MR. BLUMENTHAL: Okay. I 

18 understand, Your Honor. 

19 ADMIN. LAW JUDGE GOODWIN : It's 

20 still Monday morning. 

21 BY MS. BARBER: 

22 Q Ultimately, what was the civil 

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1 penalty that was sought against National Power 

2 Corporation? 

3 A The recommendation that we're 

4 talking about right now? 

5 Q Yes. 

6 A $66,000. 

7 Q And, excuse me --

8 ADMIN. LAW JUDGE GOODWIN: Do you 

9 want to take a break and get a drink of water? 

10 MS. BARBER: Sure, that would be 

11 great. 

12 ADMIN. LAW JUDGE GOODWIN: Okay. 

13 Why don't we do this, it's --

14 MS. BARBER: People have been 

15 talking for a while. 

16 ADMIN. LAW JUDGE GOODWIN: It's 

17 about 10:15. Let's take a ten minute break. 

18 I'm going to instruct the witness, you're not 

19 to discuss your testimony with anybody during 

20 this brief recess of ten minutes. 

21 (Off the record.) 

22 ADMIN. LAW JUDGE GOODWIN: I 

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1 remind the witness you're still under oath. 

2 THE WITNESS: Yes. 

3 ADMIN. LAW JUDGE GOODWIN: Ms. 

4 Barber? 

5 BY MS. BARBER: 

6 Q Mr. Zawarus, how does the F.AA 

7 and/or yourself determine the sanction in a 

8 hazardous materials violation's case? 

9 A We follow our enforcement order, 

10 2150.3, currently B, FAA compliance and 

11 enforcement. 

12 Q And is that document a public 

13 document? 

14 A Yes. 

15 Q And what does that guidance tell 

16 you? 

17 A It provides the factors that are 

18 taken into account to determine 

19 recommendations for sanction. 

20 Q And in this case the sanctioned 

21 amount was $66,000. Is that the maximum 

22 amount that could have been alleged or seeked, 

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1 sought from National Power Corporation? 

2 A No. It is not. 

3 Q And what would, if you know, what 

4 would be the maximum? 

5 A Under current compliance and 

6 enforcement guidelines, a penalty of hazardous 

7 materials regulations can be assessed up to 

8 $32,500 per violation. 

9 Q And so, in this case, where there 

10 four violations or six? 

11 A Four violations per shipment, I 

12 believe. 

13 Q So, essentially, it could have 

14 been much higher? 

15 A Correct. 

16 Q What considerations did you 

17 evaluate when determining the amount of the 

18 civil penalty assessed against the company? 

19 A Nature and circumstances of the 

20 shipment, the extent in gravity related to the 

21 shipment. The, any mitigating or aggravating 

22 circumstances there, the company's ability to 

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1 pay is taken into account. 

2 Q Was an inability to pay ever 

3 brought up to you in or anyone in the FAA to 

4 your knowledge ln regards to this case? 

5 A No. 

6 Q And is $66,000, is that an 

7 appropriate civil penalty for this type of 

8 case? 

9 A Yes. 

10 Q Do you take into consideration the 

11 nature of a business when looking at sanction? 

12 A It is factored in, yes. 

13 Q And what is the nature of National 

14 Power Corporation's business? 

15 A They're a battery manufacturer. 

16 Q And do they regularly ship 

17 batteries in their course of business? 

18 A Yes. 

19 Q What does that tell the FAA when 

20 looking at a sanction, why would you look at 

21 the nature of the business entity doing the 

22 shipping? 

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1 A Generally, a company who is in the 

2 business of manufacturing a hazardous material 

3 has a, is expected to have a higher degree of 

4 responsibility relative to that shipment, or 

5 to those materials that they ship. 

6 MS. BARBER: At this time, Your 

7 Honor, the Complainant has no further 

8 questions, but I reserve the right to 

9 redirect. 

10 ADMIN. LAW JUDGE GOODWIN: Sure. 

11 Mr. Blumenthal? 

12 MR. BLUMENTHAL: Thank you, Judge. 

13 CROSS EXAMINATION 

14 BY MR. BLUMENTHAL: 

15 Q Okay. Mr. Zawarus, I 'd 1 ike to go 

16 back to Exhibit, your Exhibit C-4. Do you 

17 have that in front of you? 

18 A Yes. 

19 Q Okay. And who's the consignee in 

20 that exhibit? 

21 A Agilent Technologies. 

22 Q Yes, and can you read us the 

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1 address on there? 

2 A 1400 Fountain Grove Parkway, Doc 

3 4LS, Santa Rosa, California 95403. 

4 Q Okay. And in the box called 

5 transport details, do you see where it says, 

6 airport of destination? 

7 A Yes. 

8 Q Okay. And what is the airport of 

9 destination? 

10 A Santa Rosa, California. 

11 Q Okay. And if you can please take 

12 a look at your Exhibit C-5. 

13 A Okay. 

14 Q Okay. And the consignee is also 

15 Agilent Technologies? 

16 A Correct. 

17 Q And it's also in Santa Rosa? 

18 A Yes. 

19 Q Okay and the airport at 

20 destination is also Santa Rosa, California? 

21 A Yes. 

22 Q Okay. Would it be fair to say 

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1 that Santa Rosa, California is domestic rather 

2 than international? 

3 A Correct. 

4 Q So, there would be no violation of 

5 any international standards concerning these 

6 two labels? 

7 A No, that would be incorrect. 

8 Q Why is that? 

9 A A hazardous materials shipper who 

10 utilizes the international standards in 

11 offering hazardous materials for 

12 transportation is required to be trained in 

13 those international standards. If you refer 

14 to the packing instruction column of this, of 

15 both of those shipping documents, the packing 

16 instruction 965 was provided. 965 packing 

17 instruction is specific to the IKO IATA 

18 regulation. 

19 Q And that would mean that even if 

20 it was going a domestic shipment, it would 

21 still have to follow international standards? 

22 A Correct. 

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1 Q Even though it wasn't being 

2 shipped internationally? 

3 A Yes. 

4 Q Okay. Now, those standards would 

5 only have to be used if it was an untested 

6 prototype, is that correct? Is that what your 

7 testimony was? 

8 A Could you clarify? 

9 Q When would these, when would the 

10 international standards come into play, even 

11 for a domestic shipment? 

12 A Any shipment that was prepared 

13 using the international standards. 

14 Q Are the international standards 

15 stricter, the same or less strict than 

16 domestic? 

17 A They are, the international 

18 requirement, there are differenCEs between 

19 them. But for the most part they are similar. 

20 Q Okay. So there's really no 

21 difference between domestic and international 

22 requirements for these types of shipments? 

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1 A No, I did not say that. There are 

2 differences between them. 

3 Q Okay. Are they stricter, the same 

4 or less? 

5 MS. BARBER: Objection, Your 

6 Honor. 

7 ADMIN. LAW JUDGE GOODWIN: 

s Overruled. You can answer the question. 

9 THE WITNESS: With your, I guess I 

10 need you to clarify your question in general 

11 or with regard to these shipments? 

12 BY MR. BLUMENTHAL: 

13 Q Well, in general. 

14 A I, there, there are differences 

15 between the regulations. In some instance 

16 they are more restrictive, but for the most 

17 part they are the same as the domestic. 

18 Q So, for the sake of argument, even 

19 if these batteries were shipped by a person 

20 who didn't have the specific training in 

21 international shipments, or didn't use 

22 precisely the type of packaging required for 

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1 international shipments, there's really no 

2 difference, isn't that correct? 

3 A In this instance, they were used, 

4 they were prepared using the packing 

5 instruction in the IKO technical instructions. 

6 There are no packing instructions in the 

7 domestic 49CFR. There, let me rephrase that. 

s There are packing, packagingrequirements,but 

9 the packing instructions as indicated in the 

10 IKO do not exist in 49CFR. 

11 Q Okay. In packing instruction in 

12 965, is that stricter, the same or less 

13 restrictive than the way you've testified it 

14 should have gone out? 

15 A It should be the same. 

16 Q Okay. You've also testified that 

17 the number on the, Exhibits C-1 through C-11, 

18 at the bottom, the emergency telephone number, 

19 was that of National Power, is that how you 

20 testified? 

21 A Correct, that's what I was told. 

22 Q Okay. Now, did you also look at 

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1 the shipping labels for these particular, the 

2 shipments that pertained to those Exhibits C-1 

3 through C-11? 

4 A The, I'm sorry, can you say that 

5 again? 

6 Q Did you actually look at the 

7 shipping labels that were on the boxes? 

8 A I was provided examples of the 

9 hazard, or the lithium battery shipping 

10 handling label, yes. 

11 Q Okay. And was there a phone 

12 number on those labels? 

13 A Yes, there was. 

14 Q Okay and what phone number was 

15 that? 

16 A That was Chemtrec. 

17 ADMIN. LAW JUDGE GOODWIN: Could 

18 you spell that, please? 

19 THE WITNESS: C-h 

20 ADMIN. LAW JUDGE GOODWIN: You 

21 already did. C-h-e-rn 

22 THE WITNESS: E-m-t-r-e-e. 

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1 ADMIN. LAW JUDGE GOODWIN: Okay. 

2 BY MR. BLUMENTHAL: 

3 Q Now, except for Exhibits C-4 and 

4 C-5, which went to California, were the 

5 consignees and the airport of destination the 

6 same on the rest of those exhibits? 

7 A Yes, they were. 

8 Q Okay. That was Creation 

9 Technologies in Burnaby, British Columbia, 

10 Canada? 

11 A Correct. 

12 Q And all the ship, all these 

13 shipments to Creation Technologies were the 

14 same, they were consistent in the manner in 

15 which they were handled? 

16 A How do you mean? 

17 Q Was the same batteries being 

18 shipped? The same class? The same packing 

19 group? The same quantity and type of packing, 

20 and the same packing instruction? 

21 A They have different quantities. 

22 Q Okay, the quantit.ies, the only 

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1 difference was the quantity? 

2 A I was not provided specific 

3 information relative to the battery, nor was 

4 a I provided UN test reports upon request, so 

5 I couldn't say. 

6 Q But as far as the shipping 

7 documents go, the airway bills that are 

8 Exhibits C-1 through C-11, except for the ones 

9 that went to California, they're consistent in 

10 how they read for the type of shipment it was, 

11 for the lithium ion batteries? 

12 A With the exception of quantity, 

13 yes. 

14 Q They're all UN3480? 

15 A Yes. 

16 Q Okay. And they were all signed by 

17 Maria Munoz? 

18 A Yes. 

19 Q Now, you also testified that the, 

20 that the batteries that were in these 

21 shipments in C-1 through C-11 were untested, 

22 correct? 

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1 A That's the information that was 

2 provided to me at the time of inspection, yes. 

3 Q So, how did you know the batteries 

4 were untested? 

5 A At the, when the company provided 

6 me examples of the packaging used to prepare 

7 shipments, they also provided me lithium 

8 battery handling labels and indicated that 

9 they use both to ship their lithium batteries. 

10 I asked why they were shipping by two 

11 different methods, one accepted using the 

12 lithium handling label and one fully 

13 regulated. And I was told that the fully 

14 regulated shipments were untested batteries 

15 being sent to customers, potential customers. 

16 Q And who told you this? 

17 A Mr. Alpipirt. 

18 Q Did Mr. Alpipirt later told you 

19 that these batteries were untested but there 

20 were similar batteries that were tested? 

21 A I was, I believe in the response 

22 that I was told that the cells for the 

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1 batteries were tested. 

2 Q Isn't it true that in the 

3 regulation, the regulations state that if a 

4 battery pack does not differ more than 20 

5 percent in weight, that is, it doesn't require 

6 any more testing? 

7 A I believe there are additional 

8 testing requirements, or exceptions, but that 

9 is one of them, correct. 

10 Q Okay. And in fact, this, the 

11 batteries that were shipped were just a 

12 different configuration of batteries that had 

13 already, battery packs that had already been 

14 tested and passed? 

15 A To my knowledge, I was told that 

16 the batteries were untested and in the 

17 response I was provided no information that 

18 indicated that they were tested. 

19 Q And under paragraph three of your 

20 Exhibit C-12, where it says that the remainder 

21 of these shipments are less than 100 watt hour 

22 battery packs, classified as small and 

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1 designed to meet the requirements of each test 

2 in UN Manual of Tests and Criteria using only 

3 lithium ion cells a type proven to meet the 

4 requirements of the UN Manual of Tests and 

5 Criteria were offered for shipment under a 

6 reasonable and good faith basis, believing 

7 they were in conformance with all applicable 

8 regulations. Do you see that? 

9 A I do. 

10 Q Okay. But with, and I '11 continue 

11 for the sake of completeness. But without the 

12 knowledge of that special approval buy PHMSA, 

13 it's P-H-M-S-A for the record, was needed? 

14 A Sir, I, if that's what it says. 

15 Q Okay. Now would special approval 

16 had been needed had these battery packs been 

17 tested? 

18 A No. 

19 Q Okay. So, if these battery packs 

20 were, in fact, not materially different from 

21 battery packs that had already been tested, no 

22 PHMSA letter would have been needed? 

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1 A If they had met the requirements 

2 in the UN Manual of Tests and Criteria, 

3 correct. 

4 Q But you didn't do any further 

5 investigation regarding the testing of the 

6 battery pack that was --

7 A I was provided no further 

8 information to indicate that those batteries 

9 had met any requirements. 

10 Q Okay. You also testified that you 

11 were unable to verify if a notice was put on 

12 the website as paragraph six says in C-12? 

13 A Correct. 

14 Q Why were you unable? Did you try? 

15 A I did look periodically, and I 

16 never saw anything. 

17 Q Okay. And when did you look? 

18 A I don't recall. 

19 Q So, ln fact, you don't know if it 

20 was, if it was corrected? 

21 A I don't, no. 

22 Q Now, your testimony regarding the 

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1 amount of penalty in this case, the $66,000. 

2 That came from you? 

3 A Yes, it was my recommendation. 

4 Q Okay. FAA counsel had nothing to 

5 do with determining that amount? 

6 A Well, initially, when the case 

7 went up, it included other shipping 

8 documentationbut, so it was a higher penalty. 

9 Q Okay. But the recommendation 

10 comes from you, not the FAA counsel? 

11 A Correct. 

12 Q Okay. You also said that there's 

13 a enforcement order 2150.3? 

14 A Yes. 

15 Q And that's a public document? 

16 A Yes. 

17 Q And there are factors in there for 

18 you to consider? 

19 A Correct. 

20 Q Okay. What are the, what are 

21 those factors is, there are factors in 

22 mitigation? 

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1 A Yes. 

2 Q Okay. Such as corrective action? 

3 A Correct. 

4 Q What other factors in mitigation 

5 are there? 

6 A Factors, what do you mean by 

7 mitigation? 

8 Q That mitigation, in other words, 

9 making the, that would make the penalty lower. 

10 A If a company had gone above, above 

11 the requirement of the regulation to ensure 

12 future safety. Taking immediate and corrective 

13 action upon notification. Those types of 

14 things. 

15 Q Okay. And are one those factors 

16 of mitigation, the intent of the company? 

17 A Not necessarily, no. And a person 

18 acting with knowledge relative to the material 

19 that their shipping, there's an exception that: 

20 they'll prepare it and offer it properly. 

21 Q In the course of your 

22 investigation, did you make a determination as 

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1 to whether the alleged violations were 

2 deliberate? 

3 A No. It wasn't. 

4 Q Okay. Did you, when you were 

5 coming up with the amount of the penalty, are 

6 there, and according to enforcement order 

7 2150.3, are there factors in aggregationtha·t 

8 you consider? 

9 A Yes. 

10 Q Okay. And what would be those 

11 factors in aggregation? 

12 A Release of the hazardous material, 

13 shut down of transport artery, injury, death, 

14 things like that. 

15 Q Were any of those factors here? 

16 A No, no. 

17 Q So, there were no factors ln 

18 aggregation? 

19 A No. 

20 Q Does enforcement oJ::·der 2150.3 give 

21 you specific monetary amounts? 

22 A Provides ranges. 

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1 Q And what is the range per single 

2 violation? 

3 A I believe the minimum is 250 and 

4 the maximum is $32,500, statutorily. 

5 Q So, you have a lot of digression, 

6 isn't that true? 

7 A Correct. 

8 Q Did you make a determination on a 

9 per violation amount and multiply that by the 

10 number of alleged violations or was there 

11 another method you used? 

12 MS. BARBER: Objection, Your 

13 Honor, his specific method of his 

14 determination is protected by attorney client 

15 privilege and privilege of FAA. 

16 ADMIN. LAW JUDGE GOODWIN: I think 

17 counsel has a right to enquire in how he got 

18 to a specific number. There are areas, 

19 certainly, that it's, that I don't think this 

20 is it, so I'll overrule the objection. 

21 BY MR. BLUMENTHAL: 

22 Q Okay. Should I repeat the 

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1 question? 

2 A Please. 

3 Q Okay. Are there, regarding 

4 enforcement order 2150.3, are there specific 

5 monetary amounts per violation? 

6 A I factor, I take into account each 

7 of the violations, yes. 

8 Q Okay. Now, when you came up with 

9 a $66, 000 number, was there a number you came 

10 up with per violation and multiple it by the 

11 number of alleged violations, or was there 

12 some other method? 

13 A Each transaction is provided a 

14 sanction recommendation. 

15 Q Okay. Now, what was your 

16 recommendation per sanction? 

17 A I don't recall. 

18 Q Okay. So you're telling us that 

19 we really can't get to the essence of the 

20 reasonableness of that sanction? 

21 

22 

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1 A I can't really answer that 

2 question. 

3 ADMIN. LAW JUDGE GOODWIN: Well, 

4 his testimony was that his original 

5 recommendation was a higher number than 

6 ultimately showed up in the complaint. 

7 BY MR. BLUMENTHAL: 

8 Q How did you, when you had 

9 originally wanted to assess a higher penalty, 

10 was that on a per violation and multiplied by 

11 the number of alleged violations or was it 

12 just a number you came up with? 

13 A My initial sanction recommendation 

14 was based on additional instances. 

15 Q But you did not, so, would it be 

16 fair to say that the $66,000 number is totally 

17 arbitrary? 

18 A No. 

19 Q What basis did you use to come up 

20 with the $66,000? 

21 A The compliance and enforcement's 

22 guidance that we have in our compliance and 

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1 enforcement order. 

2 Q Did that give you a specific 

3 amount per v i o l a t i o n ? 

4 

5 A No, it does not. 

6 Q So, it was arbitrary as to the 

7 number you came up with, isn't that correct? 

8 A I have latitude, yes. 

9 Q Latitude meaning it's arbitrary? 

10 A If you want to call it arbitrary, 

11 yes. 

12 Q What would you call it? Latitude? 

13 A Sure. 

14 Q Isn't that just another word for 

15 arbitrary? 

16 MS. BARBER: Objection, Your 

17 Honor. 

18 ADMIN. LAW JUDGE GOODWIN: Yes. 

19 Sustained. The Court gets the point. 

20 BY MR. BLUMENTHAL: 

21 Q By the way, Mr. Zawarus, what's 

22 the purpose of the sanction or the penalty? 

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1 What purpose does it serve? 

2 A To promote future compliance. 

3 Q Anything else? 

4 A No, sir. 

5 Q Would it serve as a deterrent? 

6 A Sure. 

7 Q So, you just told us that you had 

8 no reason to believe that there was any 

9 deliberate violation of the regulations here, 

10 so how would $66,000 ensure future compliance 

11 or deter National Power from violating the 

12 regulations in the future? 

13 MS. BARBER: Objection, Your 

14 Honor, speculation. It's calling for him to 

15 speculate on how it may or may not 

16 

17 ADMIN. LAW JUDGE GOODWIN: I'll 

18 allow limited inquiry to the extent that it's 

19 relevant to the case. 

20 MR. BLUMENTHAL: So, it's 

21 overruled? 

22 ADMIN. LAW JUDGE GOODWIN: I'll 

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1 overrule it but allow limited inquiry. 

2 BY MR. BLUMENTHAL: 

3 Q You can answer me. 

4 A Based on our compliance and 

5 enforcement guidelines, the nature of the 

6 shipment, the civil penalty was appropriate. 

7 Q Okay. Let's say you're, let's say 

8 for the sake of argument, $30,000. Would that 

9 be enough to ensure compliance in this case? 

10 MS. BARBER: Objection, Your 

11 Honor, calls for speculation. 

12 ADMIN. LAW JUDGE GOODWIN: 

13 Overruled. 

14 THE WITNESS: In this case, the 

15 following the compliance and enforcement 

16 order, sanction came out to $66,000. 

17 BY MR. BLUMENTHAL: 

18 Q Okay. So you don't know if 

19 $30,000 would have worked? Even $1500 would 

20 have served to ensure future compliance? 

21 A I make a recommendation based on 

22 the facts and circumstances of the case, ln 

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1 accordance with our compliance and enforcement 

2 program. 

3 MR. BLUMENTHAL: May I have just a 

4 second, Your Honor? 

5 ADMIN. LAW JUDGE GOODWIN: I'm 

6 sorry, sure. 

7 MR. BLUMENTHAL : No further 

s questions, Your Honor. 

9 ADMIN. LAW JUDGE GOODWIN: 

10 Redirect? 

11 REDIRECT EXAMINATION 

12 BY MS. BARBER: 

13 Q When you look at a hazardous 

14 materials case, does whether or not a company 

15 or person sends anything deliberately come in 

16 or matter to the hazardous materials 

17 regulations? 

18 A If it's determined that somebody 

19 deliberately sent something relative to 

20 violation of hazardous materials regulations, 

21 that would be considered a criminal action in 

22 most cases, and that's outside of the scope of 

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1 our compliance and enforcement program. 

2 Q What is the anticipation of the 

3 FAA with the hazardous materials regulations 

4 in regards to a violation history? 

5 A Can you clarify that? 

6 Q Yes. Does it matter to a, in 

7 regards to the sanction, whether or not a 

8 person or company has a violation free 

9 history? 

10 A We do review violation history 

11 with regard to companies that are fined in 

12 violations, yes. 

13 Q Is it a, considered a corrective 

14 action or mitigating factor if they have a 

15 violation f r e e h i s t o r y ? 

16 

17 A No. 

18 Q So, what then is the anticipation 

19 for the FAA in regards to all companies that 

20 deal in hazardous materials? 

21 A That they have no violation 

22 history. 

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1 Q Mr. Blumenthal asked you on cross 

2 examination in regards ·to how you came about 

3 the $66,000. And you had mentioned before 

4 that it was more. Why did it, why was it so 

5 much more but it ended up only being $66, 000? 

6 A Due to the age of some of the 

7 shipments. They had reached their stale 

8 point. 

9 Q And how many more were there? 

10 A I don't know, specifically, but it 

11 was in excess of 20 I believe. 

12 Q And so, when you determined the 

13 sanction, do you go through each specific CFR 

14 or hazardous materials regulation specifically 

15 that's violated, or do you do it in 

16 categories? 

17 A In categories. 

1.8 Q What type of process do you go 

19 through? 

20 A I take into account, you know, 

21 whether it's a shipping paper violation, a 

22 marking, a labeling, training, emergency 

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1 response information. Things like that. 

2 Q And is your sanction analysis 

3 reviewed by people? 

4 A Yes. 

5 Q Who is it reviewed by? 

6 A My immediate supervisor. 

7 Q And after your supervisor reviews 

8 l t ' then what happens? 

9 

10 A It's reviewed by the region. 

11 Q Okay and then after the region 

12 reviews your sanction analysis, then who 

13 reviews it? 

14 A Legal counsel. 

15 Q So, after several layers of review 

16 and analysis, that is when the sanction is 

17 finally put into place? 

18 A Correct. 

19 MS. BARBER: Okay. No further 

20 questions, Your Honor. 

21 ADMIN. LAW JUDGE GOODWIN: Any 

22 questions based on the redirect? 

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1 MR. BLUMENTHAL: Yes, Your Honor. 

2 RECROSS EXAMINATION 

3 BY MR. BLUMENTHAL: 

4 Q When you submit your 

5 recommendation to your immediate supervisor, 

6 did he ask you to explain how you came up with 

7 that number? 

8 A No. 

9 Q So, he just looked at the number 

10 and said, it's okay? 

11 A My case laid out the facts of the 

12 investigation. 

13 Q But he didn't ask you specifically 

14 how you came up with $66,000? 

15 A No. 

16 Q Did any of the higher ups ask you 

17 how you came up with that number? 

18 A No. 

19 Q Okay. Legal counsel didn't ask 

20 you for that number, or how you came up with 

21 that number? 

22 A The facts of the case in concert 

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1 with our 2150 compliance and enforcement order 

2 are the, the way we come up with our sanction 

3 recommendations. The facts of the case are 

4 laid out as such so that that information is 

5 available. 

6 Q Okay. So you provide your 

7 supervisor with the facts of the case and your 

8 recommendation? 

9 A Urn-huh. 

10 MR. BLUMENTHAL: Okay. Nothing 

11 further. 

12 ADMIN. LAW JUDGE GOODWIN: 

13 Anything else with this witness? 

14 MS. BARBER: No, Your Honor. 

15 ADMIN. LAW JUDGE GOODWIN: Sir, 

16 I 1 m going to instruct you again, you 1 re not to 

17 discuss your testimony with anybody throughout 

18 the conclusion of the case. You 1 re excused as 

19 far as the Court's concerned. It's up to Ms. 

20 Barber whether you'll have to remain. You can 

21 step down. 

22 THE WITNESS: Thank you. 

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1 ADMIN. LAW JUDGE GOODWIN: Ms. 

2 Barber, anything further? 

3 MS. BARBER: No, Your Honor. We 

4 have nothing further at this time. 

5 ADMIN. LAW JUDGE GOODWIN: Mr. 

6 Blumenthal, you can take your case now or we 

7 can take a break for lunch and we can come 

8 back and put your case on then. Your call. 

9 Let's go off the record for a second. 

10 (Off the record.) 

11 ADMIN. LAW JUDGE GOODWIN: Ms. 

12 Barber, while I'm thinking about, if you and 

13 I have anymore cases, I 'm not going to be 

------...J.4 scheduling anything until January. So, if 

15 you've got some dates, January, February that 

16 you, you know, talk to opposing counsel, get 

17 them to me and I'll put you on the docket. 

18 MS. BARBER: Okay. 

19 ADMIN. LAW JUDGE GOODWIN: Mr. 

20 Blumenthal? 

21 MR. BLUMENTHAL: Are we back on 

22 the record now? 

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1 ADMIN. LAW JUDGE GOODWIN: Sure, 

2 yes. Thanks though. We always have to check. 

3 MR. BLUMENTHAL: Okay. Your 

4 Honor, I call Thomas Vrablik 

5 ADMIN. LAW JUDGE GOODWIN: Okay. 

6 Sir, you want to approach? Stand, stand here. 

7 Raise your right hand. Please be seated. 

8 State your full name for the record and spell 

9 your first and last name. 

10 THE WITNESS: Full name is Thomas 

11 M. Vrablik. T-h-o-m-a-s, last name, V-r-a-b12 1-i-k. 

13 ADMIN. LAW JUDGE GOODWIN: Okay. 

14 There's an extra set of exhibits up here, Mr. 

15 Blumenthal if you need them. 

16 MR. BLUMENTHAL: Oh, okay. Thank 

17 you. 

18 Whereupon, 

19 THOMAS VRABLIK 

20 was called as a witness and, after being first 

21 duly sworn, was examined and testified, as 

22 follows: 

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1 DIRECT EXAMINATION 

2 BY MR. BLUMENTHAL: 

3 Q Mr. Vrablik, what is your position 

4 with National Power? 

5 A I'm executive vice president. 

6 Q Okay. And how long have you been 

7 associated with National Power? 

8 A Approximately 25 years. 

9 Q And what is your function at 

10 National Power as vice president? 

11 A My primary function is in the role 

12 of sales. 

13 Q Okay. And are you familiar with 

14 the products that National Power manufactures? 

15 A Very. 

16 Q Okay. And are you involved in 

17 their design? 

18 A Yes. 

19 Q Okay and your work, does National 

20 Power employ engineers to design the various 

21 batteries that you manufacture? 

22 A Yes, we do. 

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1 Q Okay. Now, you don't, you design 

2 battery packs, correct? 

3 A Yes. 

4 Q Okay and in what type of equipment 

5 are these battery packs used? 

6 A All types of equipment. There's 

7 medical equipment, military equipment, land 

8 surveying, we would just fall under an 

9 industrial type scenario. Geophysical 

10 equipment, that, high end expensive equipment. 

11 Q Okay. Now, what goes into the 

12 manufacture of a battery pack? 

13 A The electronic components, basic 

14 building blocks are rechargeable lithium ion 

15 cells, which are procured from our suppliers. 

16 And along with some active and passive safety 

17 components and it all gets wrapped up with 

18 some type of way to get power in and out of it 

19 from its environment. 

20 Q It's, so it's the cells that 

21 actually supply the electricity in the battery 

22 packs? 

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1 A The cells store electricity, yes. 

2 Q Okay. But you don't manufacture 

3 the cells, yourself? 

4 A No. 

5 Q Okay. Who does the manufacturing 

6 of these, of the cells? 

7 A Large corporations such as 

8 Panasonic, Sanyo Energy Corporation, Samsung 

9 Electronics, LG, those types of companies. 

10 Q Okay. And you buy these cells and 

11 then you put them together? 

12 A Yes, we do. 

13 Q Okay. You also stated that there 

14 was safety circuitry in the battery packs, 

15 correct? 

16 A Yes, there is. 

17 Q Okay and what is that consist of? 

18 A Basically a, an IC that controls 

19 fets or gates for electricity to move through. 

20 And the IC would be, if it's, well, if it's a 

21 passive component, it would rely on such 

22 things as over voltage or under voltage or 

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1 over current to close the gates so electricity 

2 would stop flowing. 

3 Q Okay. And where did you get these 

4 circuits? 

5 A The components, again, are 

6 manufactured, normally by large Japanese 

7 conglomerates, such as Mitsumi. The safety 

8 circuits, we have sub assembled for us in 

9 various locations from Canada to Asia. 

10 Q Okay. Then all these components 

11 are shipped to you, okay, and you put these 

12 together depending on what they're designed 

13 for? 

14 A Correct. 

15 Q As an example, for example, if we 

16 take the Government's Exhibit C-4, these 

17 lithium ion batteries, could you describe what 

18 these lithium ion batteries look like? 

19 A C-4? I don't have that exhibit. 

20 ADMIN. LAW JUDGE GOODWIN: Should 

21 be right, there's a copy right there. 

22 MR. BLUMENTHAL: May I? 

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1 ADMIN. LAW JUDGE GOODWIN: Yes, 

2 take them. Ms. Barber, that's the set that 

3 you put up there? 

4 MS. BARBER: I believe so, yes. 

5 THE WITNESS: Shipments to Agilent 

6 Technologies, that would be our National Power 

7 model SM206. 

8 MR. BLUMENTHAL: Okay. And for 

9 demonstrative purposes, Your Honor, I'd like 

10 to introduce Exhibit D, which is the SM206. 

11 I've already showed it to counsel. May I 

12 approach the witness? 

13 (Petitimer's Exhibit P-D was 

14 marked for identification.) 

15 ADMIN. LAW JUDGE GOODWIN: Yes. 

16 BY MR. BLUMENTHAL: 

17 Q Is this the SM206? 

18 A Yes, it is. 

19 Q Okay. And what's inside the 

20 SM206? 

21 A The basic building blocks of the 

22 lithium ion cells. There's six cells that are 

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1 18 millimeters in diameter and 65 millimeters 

2 long. Therefore, they're called 18-650 in the 

3 jargon on the industry. So, they're six 18-

4 650 were chargeable lithium ion cells in here. 

5 All coupled together with a safety circuit and 

6 in this particular case, a fuel gauge. 

7 Q Okay. And if you were to describe 

8 the capacity or the power of this, of the 

9 SM206, how would you describe it? Would you 

10 use the term in terms of voltage or wattage? 

11 A Watt hours would be complete 

12 because includes the volts and the amp hours. 

13 So it would be 11.1 volts times 4. 6 amp hours. 

14 Q Okay. Now, this is, so, this is 

15 what you sent to, this is the lithium ion 

16 battery you sent to Agilent Technologies, 

17 correct? 

18 A Yes, it is. 

19 Q Okay. Now, was this particular 

20 battery pack, the SM206 ever tested? 

21 A Yes. 

22 Q Okay. And what kind of tests did 

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1 it undergo? 

2 A It went through UL' s safety 

3 testing, UL2054 to be exact. And, but 

4 eventually the UN38.3 batteries, battery of 

5 tests. 

6 Q Okay. Now, is that, are there 

7 other battery packs that you ship that are 

8 similar to this one? 

9 A I, absolutely. 

10 Q Okay. And would that be, if I, 

11 Your Honor, if I may introduce for 

12 demonstrative purposes, I'm just going to show 

13 you Exhibit E, would this be one of those 

14 battery of packs? 

15 (Petitioner's Exhibit P-E was 

16 marked for identification.) 

17 A Yes, it is. 

18 Q Okay. Would you describe that? 

19 A Sure, it's our model SM201-6. 

20 Again, assembled with six 18-650 lithium ion 

21 rechargeable cells for a total watt hours of, 

22 47 watt hours, it says on the label for me to 

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1 do the math, so. Again, assembled with a 

2 safety circuit, a common safety circuit to 

3 manage the pack and a fuel gauge all wrapped 

4 in UL2054VO plastic. 

5 Q Okay. So, in terms of watt hours, 

6 it's the same as SM201? 

7 A Well, according to the UN38.3, it 

8 doesn't differ by more than 20 percent in the 

9 reg. But 20 percent or greater change in the 

10 anode, cathode or electro light in mass, which 

11 equates to actually, watt capacity. No it 

12 doesn't, it's similar in construction. 

13 Q Okay. And the reason they would 

14 be in different shapes is because it's going 

15 into different equipment? 

16 MS. BARBER: Objection, Your 

17 Honor, leading. 

18 ADMIN. LAW JUDGE GOODWIN: Yes, 

19 rephrase the question. 

20 BY MR. BLUMENTHAL: 

21 Q And why are they different, in 

22 different packaging? 

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1 A They would be assembled in 

2 different shapes according to the product 

3 requirements that it needs to fit inside of. 

4 Q Okay. So, for example, when you 

5 sent this battery pack to Agilent 

6 Technologies, was that so they, was that so 

7 they could see if it was suitable for their 

8 equipment? 

9 MS. BARBER: Objection, Your 

10 Honor, leading. 

11 ADMIN. LAW JUDGE GOODWIN: 

12 Overruled. 

13 BY MR. BLUMENTHAL: 

14 Q You can answer the question. 

15 A It was for the purpose of their 

16 approval to proceed. 

17 Q Okay. Did they give you the 

18 specifications for the battery they wanted? 

19 A They gave us the basic electrical 

20 specifications. We decided to pursue this 

21 model as one of our standard offerings. 

22 Therefore bears our trade name of SM Ener·gy, 

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1 which is where the prefix comes from SM201, 

2 SM206. 

3 Q Okay. Do you know what kind of 

4 equipment that was going to go into, by the 

5 way? 

6 A The Agilent? 

7 Q Yes. 

8 A It goes into a test of measurement 

9 machine. Agilent specializes in measuring 

10 waves of cable bands, things like that. So, 

11 it's test of measurement of some other 

12 electrical device. 

13 Q Okay. Was the SM201 tested? 

14 A It was also tested to UL at the 

15 time 60950-1. And also to UN.38.3 Manual of 

16 Test and Criteria. 

17 Q So, did that, did it differ by 

18 more than 20 percent, either in the anode, 

19 cathode or electro light amassed from the 

20 SM206? 

21 A No. 

22 Q Okay. And you're familiar with 

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1 the regulations for shipping lithium ion 

2 batteries? 

3 A I'm familiar with them. 

4 Q Okay. So, was it your 

5 understanding that the two batteries were the 

6 same per the regs as far as shipping 

7 requirements? 

8 A Yes. 

9 Q Okay. How were the, so this was, 

10 now, let me back up a second, Agilent wanted 

11 the battery for testing purposes, is that what 

12 you stated? 

13 A No, to actually run a piece of 

14 equipment that they manufactured that performs 

15 test functions. 

16 Q Okay. Oh, it was to power a 

17 machine that --

18 A Power a test device for it. 

19 Q So, would you say that this was a 

20 prototype of something that they may, in the 

21 future, order? 

22 A For them it was a prototype. For 

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1 us, it's a finished product. 

2 Q Okay. So, what shipping standard 

3 would you use to send a tested battery? A 

4 tested lithium ion battery? 

5 A It would fall under class two, I'm 

6 sorry, Group I I container of the regulations. 

7 Q Okay. 

8 A Packing instruction 965. 

9 Q Okay. And in fact, is that how 

10 you shipped it? How National Power shipped 

11 it? 

12 A Yes. 

13 Q Okay. Regarding the exhibits, the 

14 Government's Exhibits C-1 through C-11, the 

15 phone number, the emergency telephone number 

16 was 1-800-813-9468. Do you recall that? 

17 A Do I recall? 

18 Q Do you recall that testimony? 

19 A I do recall that testimony, yes. 

20 Q Okay. Is that the same number 

21 that would appear on the labels on the boxes 

22 that were shipped? 

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1 A No. 

2 Q Okay. What number appeared on the 

3 labels, on the boxes that were shipped on 

4 these airway bills? 

5 A The Chemtrec 24 hour hotline. 

6 Q Okay. Why was there a difference 

7 between the Chemtrec number on the labels and 

8 the number that appeared on the airway bill? 

9 A Because the labels were pre10 printed with the correct information. And the 

11 typographical error listed on this, these 

12 documents was propagated over time. It was 

13 never corrected. 

14 Q Okay. So no one ever noticed that 

15 it was National Power 1 s number, not Chemtrec 1 s 

16 number? 

17 A No, no. 

18 Q Had you known that it was the 

19 wrong number, what would you have done? 

20 A I would have not been happy. I 

21 would have corrected it. 

22 Q Do you ever review the regulations 

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1 and the shipping instructions from FedEx 

2 regarding how batteries should be shipped? 

3 A Counselor, that's kind of a tricky 

4 question. I'll tell you why. Because the 

5 common carrier's, FedEx and UPS have been 

6 known to give us incorrect information. 

7 Q But as far as you're concerned, 

8 National Power employees are instructed as to 

9 how to properly ship batteries? 

10 A Yes. 

11 Q Okay and they've received training 

12 and how to ship batteries? 

13 A Absolutely. 

14 Q Especially lithium ion batteries? 

15 A Especially lithium ion batteries. 

16 Q Okay. And who typically provides 

17 that training? 

18 A A third party. 

19 Q And these third parties, do these 

20 third parties have credentials to provide that 

21 type of instruction? 

22 A Yes. 

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1 Q So, for example, Maria Munoz's 

2 name appears on these typical, these airway 

3 bills that the Government has introduced, to 

4 the best of your knowledge, had she received 

5 proper training? 

6 A If she's involved in the shipment, 

7 she received proper training, yes. 

8 Q Okay, now after the FAA came in 

9 and audited National Power, pointed out the 

10 things that Mr. Zawarus testified to today, 

11 what did National Power do after these alleged 

12 deficiencies were pointed out? 

13 A We implemented corrective action, 

14 corrective action plans for them. 

15 Q Okay. Could you give an example 

16 of one of those? 

17 A Employees that were involved in 

18 shipments, offering shipments for carrier that 

19 were trained in DOT hazmat then received 

20 additional training in IATA hazmat with regard 

21 to packaging instruction 965 and with regard 

22 to offering hazmat for shipment. 

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1 Q Okay. 

2 A We also applied for the special 

3 approval letter through the, I can't think of 

4 the legal name here, it's special approval 

5 through, I forgot the name. 

6 Q Yes, and you received the special 

7 approval? 

8 A Yes. 

9 Q How long did it take you to get 

10 that special approval? 

11 A About seven months. Competent, 

12 the competent authority. 

13 Q So, at all times, you and other 

14 National Power employees made all shipments in 

15 good faith believing that all the regulations 

16 were followed? 

17 MS. BARBER: Objection, Your 

18 Honor, leading. 

19 ADMIN. LAW JUDGE GOODWIN: 

20 Overruled. You can answer the question. 

21 THE WITNESS: The employees 

22 involved in the shipments have received the 

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1 proper training, yes. 

2 BY MR. BLUMENTHAL: 

3 Q Okay. And at all times, they 

4 believed they were shipping the batteries 

5 according to the proper regulations? 

6 A Absolutely. 

7 MR. BLUMENTHAL: Nothing further 

8 at this time, Your Honor. 

9 ADMIN. LAW JUDGE GOODWIN: Now as 

10 to the exhibits, the two exhibits were marked 

11 for identification. Was it your intention to 

12 introduce them into evidence or just mark them 

13 for identification? 

14 MR. BLUMENTHAL: Just mark them 

15 for identification. 

16 ADMIN. LAW JUDGE GOODWIN: What 

17 I I d 

18 like the two of you to talk about, Ms. Barber, 

19 is because they've been identified, they 

20 should be apart of the administrative record. 

21 But I don't want the batteries. So if we can 

22 figure out a way to Xerox them or something 

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1 like that with the identifying information. 

2 And what I would do if it were my 

3 case, I'd take a ruler, put it on the Xerox 

4 machine, set the battery next to it so we've 

5 got some concept of scale and the identifying 

6 information. And that way, it's part of the 

7 administrative record, but it's not in 

8 evidence. So you two work that out. 

9 MR. BLUMENTHAL: I think --

10 ADMIN. LAW JUDGE GOODWIN: Why 

11 don't you work it out, send it to me by e-· 

12 mail. 

13 MR. BLUMENTHAL: Okay. 

14 ADMIN. LAW JUDGE GOODWIN: All 

15 right. 

16 I mean, is that satisfactory to you, Ms. 

17 Barber? 

18 MS. BARBER: Yes, Your Honor. 

19 ADMIN. LAW JUDGE GOODWIN: All 

20 right. I had a case where we, a hazmat case 

21 that involved a filling station gas nozzle. 

22 Well, the problem is that nozzle floated 

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1 around my office and the Appellant for three 

2 or four years. 

3 And it was, it was proprietary 

4 because of the way, I didn't know enough about 

5 it to understand it, but I took the word of 

6 the Respondent that it was proprietary and we 

7 wanted to make sure it got returned. I don't 

8 want to run into that problem here. 

9 MR. BLUMENTHAL: Okay. We' 11 take 

10 care of it. 

11 ADMIN. LAW JUDGE GOODWIN: Ms. 

12 Barber? 

13 MS. BARBER: If you can just give 

14 me one moment, Your Honor? 

15 THE WITNESS: Your Honor, may I 

16 leave these here? 

17 ADMIN. LAW JUDGE GOODWIN: Yes, 

18 she's going to ask you some questions. 

19 THE WITNESS: All right. 

20 ADMIN. LAW JUDGE GOODWIN: 

21 Probably, maybe. Ms. Barber, if you want to 

22 take a minute? 

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1 MS. BARBER: No, I'm good. I just 

2 

3 ADMIN. LAW JUDGE GOODWIN: Okay. 

4 I don't want to rush either one of you. If 

5 either one of you needs a couple minutes, 

6 we'll do that. 

7 MS. BARBER: Okay. 

8 ADMIN. LAW JUDGE GOODWIN: Go 

9 ahead. 

10 MS. BARBER: Just grab my exhibits 

11 real quick. 

12 CROSS EXAMINATION 

13 BY MS. BARBER: 

14 Q Mr. Vrablik, did I pronounce it 

15 incorrectly? 

16 A That's good, yes. 

17 Q Okay. 

18 A That's fine. Thank you. 

19 Q Exhibit, in the exhibits marked C 

20 through 11, each shipping paper is marked with 

21 the lithium ion batteries. Is the same 

22 battery shipped in each one of these instances 

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1 on the shipping papers? 

2 A The same battery? 

3 Q The same type of battery. 

4 A Oh, the same, yes. 

5 Q Okay. And that is the SM201-6? 

6 Or the SM206? 

7 A 206. 

8 Q Is the ones that were shipped? 

9 A Yes. On what exhibits? 

10 Q C-1 through C-11. 

11 A No, that is not the same battery 

12 that was shipped on all the shipments. But 

13 each shipment contained the same battery. 

14 Q Okay. Each of these shipments 

15 contain the same battery? Is that correct? 

16 A There was no mixed models in any 

17 of the shipments, correct. 

18 Q Okay. How do you know which model 

19 was sent? 

20 A The consignee. It's what the 

21 consignee ordered. 

22 Q Okay. And there in which, which 

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1 one of the batteries was the one that was 

2 shipped in all of these that we're talking 

3 about up there? 

4 A The SM206. 

5 Q Okay. And that was the untested 

6 model, correct? 

7 A That's how it was shipped, 

8 correct. 

9 ADMIN. LAW JUDGE GOODWIN: Now, 

10 the SM206 was shipped with the respect to 

11 which exhibit numbers? One, two 

12 THE WITNESS: Agilent. 

13 ADMIN. LAW JUDGE GOODWIN: Well 

14 I'm assuming that four and five is one type of 

15 battery and the other ones were the second 

16 type of batteries? 

17 THE WITNESS: Correct. Yes, Your 

18 Honor. 

19 ADMIN. LAW JUDGE GOODWIN: So, 

20 Exhibit 4 and 5 is which battery? 

21 THE WITNESS: Four and five is the 

22 SM206. 

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1 ADMIN. LAW JUDGE GOODWIN: And 

2 what was the other one? The nomenclature of 

3 the battery that was shipped? 

4 THE WITNESS: The balance of the 

5 shipments? 

6 ADMIN. LAW JUDGE GOODWIN: Yes. 

7 THE WITNESS: That would be, we 

8 haven't talked about that model, it's a 520-

9 libat-2, I 

10 believe. 

11 MS. BARBER: Okay. 

12 ADMIN. LAW JUDGE GOODWIN: How do 

13 you spell libat? 

14 THE WITNESS: L-i-b-a-t. 

15 ADMIN. LAW JUDGE GOODWIN: And 

16 then, 520-libat, and what's the rest of it? 

17 THE WITNESS: Dash two, I believe, 

18 Your Honor. 

19 ADMIN. LAW JUDGE GOODWIN: Okay. 

20 I'm just trying to make sure the Court didn't 

21 get them confused. Last thing either one of 

22 you want to do is confuse the Court. I'm 

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1 confused enough. 

2 BY MS. BARBER: 

3 Q So, it's fair to say that in every 

4 single one of these shipments, C-1 all the way 

5 through 11 that we put into evidence here 

6 today, none of the batteries that were shipped 

7 are, were tested? 

8 A Yes. 

9 Q Okay. 

10 ADMIN. LAW JUDGE GOODWIN: All 

11 right, the Court's confused. I thought you 

12 said earlier that the batteries themselves had 

13 been tested but when you put them into the 

14 package that you got there, that had not been 

15 tested? 

16 THE WITNESS: At the time of these 

17 shipments? 

18 ADMIN. LAW JUDGE GOODWIN: Yes. 

19 THE WITNESS: They were not tested 

20 to UN38.3. 

21 ADMIN. LAW JUDGE GOODWIN: In 

22 other words, the two things that you, the 

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1 SM206 and the 520-libat-2, which essentially, 

2 you buy lithium batteries and you put them 

3 into a package? 

4 THE WITNESS: Yes. 

5 ADMIN. LAW JUDGE GOODWIN: And the 

6 package has the two names as described, had 

7 the batteries themselves been tested by that 

8 manufacturer or --

9 THE WITNESS: Oh the components 

10 themselves, Your Honor? 

11 ADMIN. LAW JUDGE GOODWIN: Yes. 

12 THE WITNESS: Yes. Those were 

13 tested. 

14 ADMIN. LAW JUDGE GOODWIN: Okay. 

15 But when you put them into your package, 

16 ESM206 or the 520-libat, that had not been 

17 tested? 

18 THE WITNESS: That battery 

19 assembly had not been tested to UN38.3. 

20 ADMIN. LAW JUDGE GOODWIN: Okay. 

21 THE WITNESS: At the time of these 

22 shipments. 

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1 ADMIN. LAW JUDGE GOODWIN: All 

2 right. Not trying to confuse you either, tvls. 

3 Barber. 

4 MS. BARBER: Oh, that's okay. 

5 BY MS. BARBER: 

6 Q So, just for more clarification, I 

7 apologi3e, the, in order to make what we are 

8 looking at today, a battery, it's composed of 

9 cells, is that correct? 

10 A Yes, that's correct. 

11 Q The cells by themselves are not an 

12 actual battery? 

13 A That is correct. 

14 Q So, what you're manufacturing at 

15 National Power Corporation is an actual 

16 battery? 

17 A Yes. 

18 Q And it's composed of the cells 

19 which you get from the manufacturers in Japan, 

20 as you spoke of earlier. But that by itself 

21 is not considered a battery, it's, correct? 

22 A The component cells are not 

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1 considered a battery. 

2 Q Okay. So, but after it leaves 

3 your, National Power, it is cons ide red a 

4 battery? 

5 A Yes, it is. 

6 Q Okay. Do you currently have the 

7 special approval that you applied for and 

8 received after the shipments? 

9 A Yes, we do. 

10 Q But you did not have the special 

11 approval at the time of the shipments? 

12 A We did not. 

13 MS. BARBER: No further questions, 

14 Your Honor. 

15 ADMIN. LAW JUDGE GOODWIN: 

16 Redirect? 

17 REDIRECT EXAMINATION 

18 BY MR. BLUMENTHAL: 

19 Q Okay. When you just stated that 

20 the battery that was actually shipped was not 

21 tested, did you believe it needed testing? 

22 A Our shipping department believed 

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1 it needed testing. 

2 Q The, your model SM201 did receive 

3 testing? 

4 A Received UN39.310 testing and 

5 passed, yes. 

6 Q Okay. And the SM206 was not 

7 different from the SM201? 

8 A According to UN3 8. 3, it was not 

9 different. 

10 Q Okay. So, therefore, it did not 

11 need testing? 

12 A Therefore, we could, we could say 

13 that, we could take that position. 

14 Q Okay. According to the 

15 regulations? 

16 A Yes. 

17 Q Okay. But subsequently, you had 

18 it tested anyhow? 

19 A Yes, we have all our models 

20 tested. 

21 Q Okay. Okay, the letter that you, 

22 I mean the battery that you shipped on the 

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1 other shipments to the, to Canada, what types 

2 of batteries were those? 

3 A Again, lithium ion batteries. 

4 Q Okay. Did they differ from the 

5 SM201 and SM206 in appearance? 

6 A Yes. 

7 Q Okay. 

8 MR. BLUMENTHAL: Your Honor, may I 

9 approach? 

10 ADMIN. LAW JUDGE GOODWIN: Sure. 

11 MS. BARBER: Your Honor, I object 

12 to beyond the scope of my redirect. He's 

13 entering into 

14 ADMIN. LAW JUDGE GOODWIN: Well, 

15 technically it is. Here's the Court's 

16 problem, I'm trying to wrap myself around it. 

17 I think it's, the Court has some latitude in 

18 developing the record in order so that the 

19 record's clear. 

20 And I'm going to tell you now, I'm 

21 going to ask both of you to brief this case. 

22 Because I think it's important issue and it's 

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1 important nuances. And ask that the two of 

2 you have the opportunity to develop. 

3 And a part of that is the Court's 

4 ability to understand what's going on. And 

5 for a couple of reasons, not just this case. 

6 But as you know, Ms. Barber, this is not the 

7 first lithium ion battery case the FAA has 

8 had, and it's an issue that, I don't know, but 

9 I suspect it's an issue important to the FAJl, 

10 and PHMSA and some others as well as to the 

11 Respondent. 

12 So, I'm going to note the 

13 objection, overrule it, and allow some 

14 latitude and also allow you, Ms. Barber allow 

15 you the latitude to cross it, without waiving 

16 your objection. 

17 MR. BLUMENTHAL : Okay. Thank you, 

18 Your Honor. 

19 BY MR. BLUMENTHAL: 

20 Q Okay. I'm going to show you what 

21 I've marked as Exhibits E-1 and E-2. Could you 

22 describe Exhibit 

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1 E-1? 

2 (Employer's Exhibits E-1 and E-2 

3 were marked for identification.) 

4 Sure, it's an assembly with two 

5 Sanyo 103450, that's ten millimeters thick, 34 

6 millimeters wide, 50 millimeters high. Two of 

7 those cells assembled into a battery with 

8 safety circuitry and a way to, and a way for 

9 the power to see the outside world. 

10 Q Okay. And I'm also going to show 

11 you Exhibit E-2. Could you describe that? 

12 Yes, it's an assembly with two of 

13 the Sanyo 103450 lithium ion rechargeable 

14 cells. Again, assembled into a battery pack 

15 with a safety circuit and a way for the 

16 outside world to tap into it. 

17 Q Okay. And are those the batteries 

18 that were shipped to the Canadian customer? 

19 A One of these was. 

20 Q Okay. Which one was that? 

21 A This one. 

22 Q Okay and that's marked as? 

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1 A Exhibit E-1. 

2 Q Now, how did you, how did you ship 

3 that battery? 

4 A National Power offered these 

5 shipments as Class 9 hazmat ln Group II 

6 packaging. 

7 Q Okay, are, is that battery tested? 

8 A Today? 

9 Q No, no. At the time, was it 

10 tested? 

11 A At the time, it was not tested at 

12 the time. 

13 Q But you had it subsequently test? 

14 A Yes. 

15 Q And it passed that test? 

16 A Yes. 

17 Q So, as an untested, would you 

18 classify that as a prototype, as well? So, it 

19 was an untested prototype? 

20 A I think that's what the 

21 regulations would classify it as, since it's 

22 not tested. I don't know if there's another 

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1 way to, another area you could put that. 

2 Q Okay. So, you shipped that 

3 battery according to the regulations using the 

4 untested prototype standard? 

5 A That's the way our shipping 

6 department offered it for shipment, yes. 

7 MR. BLUMENTHAL: Okay, okay. 

8 Nothing further, Your Honor. 

9 ADMIN. LAW JUDGE GOODWIN: Ms. 

10 Barber, would you like to inquire? 

11 MS. BARBER: You know, if I could 

12 have a moment, please? 

13 ADMIN. LAW JUDGE GOODWIN: Sure. 

14 MS. BARBER: No further questions. 

15 ADMIN. LAW JUDGE GOODWIN: Mr. 

16 Blumenthal, anything further of this witness? 

17 MR. BLUMENTHAL: No, Your Honor. 

18 We rest. 

19 ADMIN. LAW JUDGE GOODWIN: Okay. 

20 Sir, you can step down, leave the exhibits 

21 there. So, you said the Respondent rests? 

22 MR. BLUMENTHAL: Yes, Your Honor. 

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1 ADMIN. LAW JUDGE GOODWIN: 

2 Rebuttal? 

3 THE WITNESS: Your Honor 

4 ADMIN. LAW JUDGE GOODWIN: If you 

5 want, you can step down. Do you want to take 

6 a minute and decide what you want to do? 

7 MS. BARBER: I would like to take 

8 a minute, please. 

9 ADMIN. LAW JUDGE GOODWIN: All 

10 right. I've got ten minutes after one. We're 

11 going to take a break until 20 minutes after. 

12 But before we go off the record to counsel, 

13 the Court's got the same issue with all the 

14 batteries we discussed. You two figure out 

15 how they've been identified. 

16 They're not in evidence. You two 

17 figure out between you how you want to get a 

18 copy or into the record so I have something to 

19 refer to, but the Court doesn't need the 

20 originals. Just figure it out as a part of 

21 your process. Okay. So, we're going to go 

22 off the record for ten minutes. 

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1 (Off the record. ) 

2 ADMIN. LAW JUDGE GOODWIN: Ms. 

3 Barber? 

4 MS. BARBER: Yes, Your Honor. I 

5 do have a rebuttal. 

6 ADMIN. LAW JUDGE GOODWIN: Oh, 

7 okay. I forgot where we were, that's why I 

8 asked you. 

9 MS. BARBER: Okay. 

10 ADMIN. LAW JUDGE GOODWIN: Go 

11 ahead. 

12 MS. BARBER: The Complainant calls 

13 mister, recalls Mr. Zawarus. 

14 ADMIN. LAW JUDGE GOODWIN: All 

15 right, sir, stand and approach. I remind you 

16 that you are still under oath. 

17 THE WITNESS: Yes, sir. 

18 ADMIN. LAW JUDGE GOODWIN: 

19 Counsel. 

20 Whereupon, 

21 CHRISTOPHER ZAWARUS 

22 is recalled as a witness herein, having been 

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1 previously duly swom, resumed the stand and 

2 testified as follows: 

3 DIRECT EXAMINATION 

4 BY MS. BARBER: 

5 Q Mr. Zawarus, did you hear on the 

6 Respondent's, during the Respondent's case, 

7 that the emergency response number was on the 

8 shipping label. Do you recall that testimony? 

9 A Yes. 

10 Q However, it was not on the 

11 shipping paper, is that correct? 

12 ADMIN. LAW JUDGE GOODWIN: Well, 

13 ask the question, it's really, you're trying 

14 to cross examine your own witness. 

15 MS. BARBER: Okay. 

16 ADMIN. LAW JUDGE GOODWIN: 

17 Rephrase the question 

18 BY MS. BARBER: 

19 Q What is the difference between 

20 having an emergency phone number on a shipping 

21 paper and a shipping label? 

22 A The hazardous materials 

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1 regulations require the emergency response 

2 telephone number to be on the shipping paper. 

3 That's so that it is available to the pilot in 

4 command during flight and also to emergency 

5 responders in the event of an incident. 

6 Q Why would they not be able to use 

7 the shipping label? 

8 A Because that would be affixed to 

9 the package and aboard the aircraft where it 

10 is not accessible. 

11 Q I would like to draw your 

12 attention to the batteries that they used 

13 today, National. Power used today for 

14 demonstrative purposes. What did those 

15 batteries that they talked about today, what 

16 impact did that have on the case, the 

17 batteries that were shipped on the shipping 

18 labels, or the, on the exhibits C through 11? 

19 A The, during the inspection when I 

20 requested what, or I asked whether the 

21 batteries contained in the shipments were 

22 tested. And after being told that they were 

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1 prototype, I was told that they were not 

2 tested. 

3 Subsequently, based on that 

4 information and not having test that relative 

5 to the batteries, our office sent out a letter 

6 of investigation notifying National Power 

7 Corporation of our alleged violations, we were 

8 not provided any test data in response to our 

9 letter of investigation. There was no 

10 information available to determine that they 

11 were tested 

12 batteries. 

13 Q Were you ever provided any test 

14 information about any type of battery? 

15 A Yes, in the letter of response, we 

16 were provided test data for, that was relevant 

17 to two shipments. And as a result, we did not 

18 pursue those shipments. 

19 Q And could, would it matter if 

20 someone, or would it matter if National Power 

21 shipped a untested battery that was similar to 

22 a tested battery? 

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1 A According to the UN Manual of Test 

2 and Criteria, as long as it's within the 

3 allowances for watt hours and voltage, they, 

4 they can do that. But it would also have to 

5 be a type that would not materially change the 

6 test results. 

7 Again, we were provided no 

8 information in response to our letter of 

9 investigation that would allow us to make that 

10 determination. 

11 Q So, as we sit here today, it 

12 stands that all the batteries that were 

13 shipped by National Power, as exhibited in C 

14 through 11 were untested batteries? 

15 A The FAA has received no 

16 information indicating that they were tested 

17 batteries. 

18 MS. BARBER: No further questions. 

19 ADMIN. LAW JUDGE GOODWIN: Mr. 

20 Blumenthal? 

21 CROSS EXAMINATION 

22 BY MR. BLUMENTHAL: 

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1 Q If subsequent correspondence with 

2 counsel and the FAA provided test results and 

3 explanations, would you have been provided 

4 those? 

5 A I did receive a e-mail which 

6 provided the test report, but not knowing the 

7 configuration of the batteries, we couldn't 

8 make a determination whether it was the test 

9 report applicable to those shipments. 

10 Q Okay. So, did you ask for further 

11 clarification? 

12 A Yes, I did. 

13 Q Okay. And to whom did you ask? 

14 A I relayed that information to Ms. 

15 Barber. 

16 Q So, you've received nothing else 

17 from the FAA regarding follow-up documentation 

18 on test results provided to you? 

19 A No. 

20 Q Okay. So if they received it and 

21 didn't tell you about it, there would be no 

22 other way for you to find out, isn't that 

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1 correct? 

2 A I received no further information. 

3 MR. BLUMENTHAL: Okay. Nothing 

4 further, Your Honor. 

5 ADMIN. LAW JUDGE GOODWIN: Ms. 

6 Barber? 

7 MS . BARBER: Nothing further, Your 

8 Honor. 

9 ADMIN. LAW JUDGE GOODWIN: Sir, 

10 you can step down. Again, until the case has 

11 concluded I remind you not to discuss your 

12 testimony with anyone. Any further evidence or 

13 testimony counsel? 

14 MR. BLUMENTHAL: No, Your Honor. 

15 ADMIN. LAW JUDGE GOODWIN: Okay. 

16 It appears to the Court that the two of you 

17 discussed the possibility of getting 

18 transcripts. Normally it takes about two 

19 weeks for the transcript to become available. 

20 And the way this works, Mr. 

21 Blumenthal, is they typically mail it to FAA 

22 headquarters and Ms. Barber may or may not 

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1 find out in the near, short or middle term 

2 that it's available, but she will. What 

3 I'm going to ask the two of you to do, Ms. 

4 Barber, when you get the transcript, if you 

.5 will call Mr. Blumenthal, one of, the two of 

6 you work out a briefing schedule. 

7 Now, just for your benefit, you 

8 can do all the briefing you want to, but I'm 

9 not going to get a chance to get to it until 

10 first part of next year. I don't know what 

11 your leave status is Ms. Barber, but the 

12 problem you run into in the government, is you 

13 get user leave and all sorts of other things. 

14 So, if your briefing schedule runs 

15 into next year, don't worry about it. If you, 

16 if you'll just, once you agree, 

17 Ms. Barber, if you'll send me an 

18 order, I'll sign it. And then if either one 

19 of you runs into a problem, talk with each 

20 other and if you need to extend it, just let 

21 me know. I try to be flexible on, it makes, 

22 there's some lssues that are worth while 

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1 developing in this case. 

2 And in large part because I think 

3 there's some issues that could be presidential 

4 in 

5 how the FAA and Respondents in the future view 

6 this. You know, talk to you about some of them 

7 as we go along. 

8 But I think it's an, there are 

9 some important issues we need to address. So, 

10 we want to make sure that we, you know, fully 

11 brief it, fully develop it, and go from there. 

12 As I've already talked to you 

13 about 

14 the batteries and the two of you work that 

15 out, e-mail me whatever you want to do ln 

16 place of the exhibits 

17 and I'll put them in the file. Anything else 

18 further? 

19 MR. BLUMENTHAL: No, Your Honor. 

20 MS. BARBER: No, Your Honor. 

21 ADMIN. LAW JUDGE GOODWIN: Okay. 

22 You're not on the case Wednesday, are you? 

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1 MS. BARBER: No, Chris Zurales. 

2 ADMIN. LAW JUDGE GOODWIN: Okay, 

3 all right. Thank you and we'll go off the 

4 record. Thank you very much. 

5 (Whereupon, at 1:33 p.m., the 

6 hearing in the above-entitled matter was 

7 concluded.) 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

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(202) 234-4433 Washington DC www.nealrgross.com 
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C E R T I F I C A T E 

This is to certify that the foregoing transcript 

In the matter of: Federal Aviation Administration v. 

National Power Corporation 

Before: us DOT 

Date: 09-29-2014 

Place: Chicago, Illinois 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

(202) 234-4433 

Court Reporter 

NEAL R. GROSS 

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

WASHINGTON, D.C. 20005-3701 www.nealrgross.com