Before the. United States Department of .Transportation 

Federal Aviation Administration AUG " 2 j ^ 

In the matter of 

EMPIRE AIRLINES, INC 

FAA Docket No. CP09NM00b:9 .js 

FDMS No. FAA-2009-0586 7" '--^C; 

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Complainant's Reply Brie f 

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Pursuant to section 13.233(e) of the Rules of Practice for o^ 

o 

FAA Civil Penalty Actions, 14 C.F.R. § 13.233(e), the Complainant, 

Federal Aviation Administration ("FAA"), files this brief in the 

appeal of the Initial Decision of Administrative Law Judge ("ALJ") 

Richard C. Goodwin regarding FAA Docket No. CP09NM00q9. 

Statement-of—the-Gase—— 

The Complainant's statement of the case and facts are set 

forth in its Appeal Brief, which was filed on June 22, 2011. 

Issue 

Whether the ALJ correctly determined that Empire Airlines, 

Inc. ("Empire") violated 49 C.F.R. §§ 175.3, 175.30(a)(2), 

and 175.30(a)(3). 

Argument 

The ALJ correctly determined that Empire violated 49 C.F.R. 

§§ 175.3, 175.30(a)(2), and 175.30(a)(3). 

Empire advances two chief arguments in support of its quest 

for the reversal of the ALJ's finding that it violated Hazardous 

Material Regulation ("HMR") sections 175.3, 175.30(a)(2), and 

175.30(a)(3). First, Empire argues that Federal Express ("FedEx' 

was Empire's independent contractor • for accepting and loading 
^hazardous m_ater_ials_(J'HA2MAT") ..aboard..aircraft operated by. Empire. 

Building on this assertion, Empire avers that "[p]ast precedent 

and the plain language of Part 175 expressly allows for an 

independent contractor relationship for accepting hazardous 

material that limits the liability of the air operator." Empire 

Ap. Br. at 2, 8-13. Empire adds it "was not responsible for its 

independent contractor (i.e., FedEx) when the latter improperly 

accepted cargo under § 175.30(a)" and when its reliance on FedEx's 

actions was reasonable. Empire Ap. Br. at 2, 13-16. 

Empire also argues that while an "air operator must still 

ensure that the hazardous material complies with the requirements 

-of—§—1-7-5—3 0-(-a-)—i-nc-1-ud-i-ng—proper—shi-ppi-ng—papers~and-mark-ings-,-^i—thefacts of this case establish that Empire reasonably relied on 

FedEx's acceptance and loading activities to ensure regulatory 

compliance. Empire Ap. Br. at 2, 7-13. 

Empire's arguments are based on faulty analyses of applicable 

regulations, FAA Decisionmaker precedent, and the facts of this 

case. Contrary to Empire's assertions, the ALJ properly found 

that Empire violated HMR' sections'175.3, 175.30(a)(2), and 

175.30(a) (3) .^ 

^ Empire fails to accurately state the applicable standard of 

review of the FAA Decisionmaker. While Empire correctly 

references 14 C.F.R § 13.233(b)(1) in connection with the FAA 

Decisionmaker's review of ALJ factual findings, it adds that the 

"FAA's factual determinations are conclusive if they are supported 

by substantial evidence." Empire Appeal Br. at 6 (citing 

49 U.S.C. § 46110(c)). The substantial evidence standard of 
-. —.-„-..iv --Neithe^r the.HMRs. nor precedent. absolve Empire of its 

obligation to comply with 49 C.F.R. §§ 175.30(a)(2) and. (3), 

and section 175.3. 

• Empire's contention that certain terms of HMR part 175 in 

conjunction with precedent absolve it from its obligation to 

comply with the HMRs is without merit. In advancing its 

contention, Empire cites 49 C.F.R. §§ 175.1 and 175.30 for the 

proposition that "air carriers . . . may contract out accepting 

and. loading services to independent contractors." Empire Appeal 

Br. at 8. E^mpire then cites I n th e Matte r o f Federal - Express, FAA 

Order No. 2002-20 (Aug. 5, 2002), recon . denied , FAA Order 

No. 2003-2 (May 6, 2003), for the proposition that an air carrier 

'i-s—not—responsible—for-compl-yi-ng—wi-trh—the—HMRs—when—i-t—hi-res-an 

independent contractor to perform the functions designated by the 

regulations. 

A review of the very same regulations on which Empire relies, 

as well as related HMRs, indisputably establishes that aircraft 

operators like Empire have an independent and non-delegable 

responsibility to comply with the HMRs and cannot shift this 

review for factual determinations is applicable to a judicial 

review of an administrative decision. 5 U.S.C. § 706(2)(E). 

Indeed, section 46110 sets forth the authority of courts of 

appeals, and subsection (c) of that section states that 

"[f]indings of fact by the . . . Administrator, if supported by 

substantial evidence, are conclusive." 49 U.S.C. § 46110(c). 

Similarly, while Empire correctly references 14 C.F.R 

§ 13.233(b){2), it adds that "federal agency decisions must not be 

arbitrary, capricious, an abuse of discretion, or otherwise not in 

accordance with law." Empire Appeal Br. at 7. This standard, 

too, is applicable to a judicial review of an administrative 

decision..- 5 U.S.C. § 706(2) (A). 
-responsibility, through .any form of .contractual _ relationship._ _.To^_ 

the extent that Empire asserts that it can contract away its 

responsibilities via independent contractors, this assertion is 

contrary to law and policy. 

As a threshold matter, the HMRs in general place the onus on 

the carriers of HAZMAT to comply with HMRs applicable to them. 

Specifically, section 171.2(f) provides that " [n]o person may 

transport a hazardous material in commerce unless the hazardous 

material is transported in accordance with applicable requirements 

of . . . [HMR subchapter C] . . . ." 49 C.F.R. § 171.2(f). Thus, 

the burden is on HAZMAT carriers to ensure regulatory compliance 

'independent—from-contractua-1—arrangements—for^the—per-formance-of 

HMR-required functions. The only basis for absolving a carrier 

for failing to comply with an HMR applicable to its mode of 

transportation is where the carrier, reasonably relies on incorrect 

information provided by the offeror of HAZMAT or a prior carrier. 

49 C.F.R. § 171.2(f).^ There is no provision in the HMRs that 

relieves a carrier from complying with an HMR pursuant to a 

^ Section 171.2(f) contains a second sentence that provides: 

Each carrier who transports a hazardous material in commerce 

may rely on information provided by the offeror of the 

hazardous material or a prior carrier, unless the carrier 

knows or, a reasonable person, acting in the circumstances 

and exercising reasonable care, would have knowledge that the 

information provided by the offeror or prior carrier is 

incorrect. . • 

49 C.F.R. § 171.2(f). 
_^.^ ..-Contractual, arrangement, and, given _the_ absence of such ^.language, _ 

it would be inappropriate to construe the HMRs as such. - (Compare 

Federa l Express, FAA Order No. 2002-20 at *5 (where the FAA 

Decisionmaker, strictly reading the HAZMAT governing statute and 

HMRs, rejected the Complainant's argument that the law required 

HAZMAT training of .independent contractors, stating that " [i]t is 

inappropriate to read into the statue or regulation a requirement 

for training of independent contractors that is not specified in 

either place")). 

The applicability section to part 175, which applies to the 

carriage of HAZMAT by aircraft, indicates that air carriers are 

—i-ndependent-1-y—responsible—for—complyi-ng-wi-th—regulations—in—that— 

•part. Part 175 "applies to the offering, acceptance, and 

transportation of hazardous material in commerce by aircraft 

. . . ." 49 C.F.R. § 175.1(b). Part 175 is applicable to "any 

person who performs, attempts to perform, or is required to 

perform any function subject to [HMR subchapter C] . . . ." Jd. 

Such persons include "air carriers . . . and their . . . contract 

personnel (including . . . loading and unloading personnel) 

. . . ." 49 C.F.R. § 175.1(b)(1) (emphasis added). The use of 

the conjunctive "and" in section 175.1(b) indicates that the 

requirements of part 175 independently apply to an air carrier 

notwithstanding whether it elects to contract the performance of 

functions specified in the HMRs to "contract personnel.." 
^Conversely, ^nothing., in _the .applicability sectio_n. to..part 175__.. 

serves a basis to absolve a carrier of its responsibility to 

comply with the HMRs through contract or any other form of barter 

That section 175.1 applies independently to aircraft. 

operators and contractors is evident from regulatory history 

pertinent to section 175.1. In 2004, the Department of 

Transportation ("DOT") acknowledged that section 175.1(b) 

warranted clarification as to the applicability of part 175. 

Prior to the aforementioned clarification, section 175.1 provided 

that "[t]his part prescribes requirements . . . applicable to 

aircraft operators transporting hazardous material aboard . . . 

-ai-rcra-f-t^" 4-9-G-^F-^R-;—§^1-7-5^1—(-2-0 04-)-; T-he-DOT—amended 

section 175.1 to provide that part 175 applied to, among others, 

"air carriers . . . and their .' . . contract personnel." 69 Fed. 

Reg. 65294, 65295 (Nov. 10, 2004). The purpose of this amendment 

was to make it clear that part 175 applied to air carriers and to 

persons who are not air carriers but perform the same functions. 

The DOT stated: 

We believe there is some confusion over, the applicability of 

the HMR, specifically, part 175 [,] to persons who are not air 

carriers, such as freight forwarders. .Although the language 

of § 175.1 refers to aircraft operators, part 175 als o 

applies to persons who are not direct air carriers but 

perform these functions. 

69 Fed. Reg. at 65295 (emphasis added). Accordingly, 

section' 175.1 is not intended to allow an air carrier to contract 

out its regulatory responsibilities. Rather, its purpose is to 
make., clear .that jan air.c_arrier, and persons it uses to P^^form air^ 

carrier functions related to the transportation of HAZMAT, are 

responsible for complying with the HMRs. 

Empire was charged with violating section 175.30(a)(2) 

and (3). This section provides that: 

[n]o person may accept a hazardous material for 

transportation aboard an aircraft unless the aircraft 

operator ensures that the hazardous material is . . . 

(2) Described and certified on a shipping paper prepared in 

duplicate in accordance' with part 172 of [subchapter C] or as 

authorized by subpart C of part 171 of [subchapter C] . . . 

[and] 

(3) Marked and labeled in accordance with subparts D and E of 

part 172 or as authorized by subpart C of part 171 of 

[subchapter C] . . . . 

49 C.F.R. § 175.30(a)(2) and (3). The plain terms of this 

regulation proscribe persons, which would seem to include' 

contractors, from accepting HAZMAT for air transportation unless 

the aircraft operator ensures that the HAZMAT meets the 

requirements at subparagraphs (a)(1) and (a)(2). Nonetheless, the 

baseline requirement for this regulation is imposed on "the 

aircraft operator," who must "ensure" that the HAZMAT meets the 

provisions at subparagraphs (a)(1) and (a)(2). Thus, whether the 

person accepting the HAZMAT is the air carrier or an entity 

contracted by the air carrier, the air carrier is the entity 

-responsible for ensuring compliance with 175. 30 (a) (2) and (3).-^ 

^ Empire concedes this point in its appeal brief. For example. 

Empire states that "[tjhe air operator must still ensure that the 
..B,eypnd .that., .even.if the "p_erson" accepting HAZMAT has_ contracted 

to do so with the aircraft operator, sections 171.2 (f) and 

175.1(b) make it clear that the air operator is independently 

responsible for complying with section 175.30(a). A contractor 

may also be liable for violating section 175.30(a), but a 

contractual arrangement alone does not absolve the carrier for 

violations committed by the contractor. 

Regulatory history relating to section 175.30 supports the 

Complainant's position that an aircraft operator's responsibility 

to comply with that section is independent and non-delegable. The 

first version of section 175.30(a) provided that "[n] o person may 

-aecept-a—ha-zardous—material—for^transpor tat ion-aboard_an-air craft— 

unless the hazardous material [meets, among other requirements, 

those related to shipping'papers and markings]." 49 C.F.R. 

§ 175.30 (1976). The DOT.stated that this section "[s]pecifies 

the responsibilities of aircraft operators with respect to 

accepting hazardous material shipments for transportation." 

41 Fed. Reg. 15973, 15988 (Apr. 15, 1976). 

•-"In 2006, the DOT amended the first sentence of 

section 175.30(a) to set forth the language in effect at the time 

of the violations in this case (and currently in effect). Nothing 

in the regulatory history to this amendment indicates that an 

hazardous material complies with the requirements of § 175.30(a] 

including proper shipping papers and markings." Empire Appeal 

Br. at 14. 
..aircraft operator_c.ould. absolve . itself ,of its..long-.s_tanding 

responsibility to comply with section 175.30(a) by contract or. 

otherwise. To the contrary, the preamble to-the final rule 

focused on clarifying what constitutes a "knowing" violation of an 

aircraft operator. 71 Fed. Reg. 14586, 14592 (Mar. 22, 2006) 

("[a] carrier knowingly violates the HMR when the carrier acceptsor transports a hazardous material with actual or constructive 

knowledge that a package contains a hazardous material not 

properly packaged, marked, labeled, or described on a shipping 

paper as required by the HMR"). 

Earlier this year, the DOT implemented a final rule 

-establishing-procedures—in—connection-with—the-enhanced — — 

enforcement authority conferred by the Safety and Security 

Reauthorization Act of 2005.. The DOT again emphasized the 

carrier's independent responsibility to comply with 

section 175.30: 

- Air carriers in particular bear responsibility for accepting 

declared shipments of hazardous material in violation of 

49 CFR 175.30, which requires air carriers to conduct an 

inspection ensuring that the shipment is, among other things, 

within quantity limitations, accompanied by shipping papers 

that properly described the material, and is marked, labeled 

and packaged in accordance with the HMR. An air carrier's 

failure to conduct a proper inspection could result in a 

violation of 49 CFR 175.30 or 175.3, which prohibits an air 

carrier from offering or accepting for transportation, or 

transportation aboard an aircraft,.hazardous materials that 

are not prepared for shipment in accordance with 4 9 CFR part 

175. 
10 

... .76.Fe_d.. ...Reg.. ^ at...1157_0,._11_5 81_.(M.a.r ^.2,_ 2.01_1)..__... Simply. p_u^^^ 

section 175.30 imposes upon aircraft operators a duty to ensure 

compliance with, among other HMR requirements, those related to 

shipping papers, markings, and labeling. 

In its appeal brief in this matter, the Complainant argued 

that Empire had an independent and non-delegable duty to comply 

with 49 C.F.R. § 175.33(c)(3). See Complainant's Appeal 

Br. at 13-21. The Complainant based this argument on the plain 

language of section 175.33(c)(3) as well as other salient factors, 

including Empire's general maintenance manual ("GOM"), relevant 

case law regarding the non-delegable character of air carrier 

—regul-ator-y—Gompl-iance—responsi-bi-l-ity-,—and—publ-ic—pol-icy-.—Al-thoughthese factors were discussed in the context of - the 

section 175.33(a) (3) allegation in this case, they are no less 

significant -in connection with Empire's non-delegable duty to 

comply with the provisions of sections 175.30(a) (2) and (3) . A 

review of these factors also reveals that Empire's reliance on the 

Federa l Express case, which is the.linchpin of its- effort to avoid 

regulatory responsibility, in misplaced. 

Empire's GOM shows that Empire was aware of its independent 

responsibility to comply with part 175. Indeed, the GOM provides 

that its employees "are responsible for compliance with all 

provisions of the Hazardous Material Regulations . . . ." C-11 
11 

.^^_8_. -In the context of .accepting and loading HAZMAT, Empire'.s._ 

GOM states: 

This Hazardous Materials Operations Manual shall be followed 

by each crewmember and person performing or directly 

supervising any of the following job functions involving any 

item for transport on board .. . an aircraft: acceptance, 

rejection, handling, storage incidental to transport .. . or 

loading. 

C-11 at 8."* The GOM specifies that: 

Loading and unloading of DO [i.e., dangerous goods] is 

handled by FedEx ramp personnel. During loading the DG is 

separated from other freight so the crewmember may accomplish 

the pre-load inspection. .. . A crewmember must supervise 

the loading of DG. 

C-11 at 41. Empire's GOM comports with the section 175.30(a) 

requirement that as the aircraft operator Empire must 

independently ensure the proper description, certification, 

marking, and labeling of HAZMAT shipments. Consistent with the 

provisions of the GOM and the requirements of section 175.30(a), 

Mr. Mills acknowledged that Empire flight crews are responsible 

for inspecting HAZMAT before it is loaded on an aircraft operated 

by Empire. Tr. 188-189. Nothing in Empire's GOM suggests that it 

may avoid responsibility for regulatory compliance through 

contract. 

Applicable FAA Decisionmaker case law further supports the 

conclusion that.Empire's responsibility to comply with 

"* Among other HMR provisions that Empire employees are required to 

follow are those relating to shipping documents, certification, 

marking, and labeling, which.shadow requirements of 

section 175.30(a)(2) and(3). C-11 at 9-12. 
12 

..section 1.7.5.._3 0.(a_) .(2)„.and..(3)..cannot..be..delegated.pursuant.,to a_ 

contractual arrangement. Chief among the cases standing for the 

proposition that an air carrier's duties are non-delegable is In 

t h e Matte r of Alaska Airlines, FAA Order No. 2004 (Oct. 4,. 2004). 

As noted in the Complainant's appeal brief, in Alaska Airlines, 

the FAA Decisionmaker concluded that Alaska Airlines ("Alaska") 

was responsible for faulty maintenance performed on Alaska 

aircraft by its contractors notwithstanding whether Alaska knew 

or, through the exercise of reasonable diligence, could have known 

of the violation. The FAA Decisionmaker relied on 14 C.F.R.. 

§ 121.363, which stated that air carriers were "primarily 

~-responsibl-e—for-^—:—:—the—airworthiness-of—i-ts—ai-rcraf-t^^—and—cou-ldnot avoid this responsibility though contractual agreements with 

other entities for the performance of maintenance. 14 C.F.R. 

§ 121.363(a) and (b). 

In connection with her ruling in Alaska Airlines, the FAA 

Decisionmaker stated that "an air carrier's duties, which include 

a statutory duty to exercise the highest possible degree of care, 

are non-delegable." FAA Order No. 2004-8 at 6 (footnotes 

onfiitted) . She reasoned that " [t]he rationale is one of public 

policy -- it is that the duties of common carriers are too 

important to permit them to transfer them to someone else." Id. 

(citations omitted). The same rationale is no less applicable in 

the context of the instant case. That air carriers ensure 
13 

.compliance . with the . provisions at section 175 . 30 (a) (2) and (_3) _is_ 

critical to aviation safety. The purpose of these requirements 

are communicative in nature and are designed to provide HAZMAT 

information to personnel who handle the material in air 

transportation so that appropriate measures can be taken to ensure 

the safe transportation of the material and effective emergency 

response, if necessary. See, e.g.. In th e Matte r of Paul A. Carr, 

FAA Order No. 98-2' (Mar. 10, 1998) (setting forth the safety 

rationale of marking and labeling requirements for HAZMAT in air 

transportation) . 

The facts of this case support the Complainant's position 

—that^Empi-re—is—independently—responsible—for—comply.ing-with 

sections 175.30(a)(2) and (3), as well as section 175.3. It is 

indisputable that Empire is an aircraft operator in this case.^ 

Richard Mills, Empire's director of quality assurance, agreed that 

Empire was solely responsible for operational control over all its 

aircraft, Tr. 186, which would include flight 8677-22. 

Empire flight 8677-22 transported a shipment containing 24 

bottles of Nexium hand sanitizing gel, which is classified as a 

HAZMAT .under the HMRs, Tr. 47-49, 54-58, C-1 at 1-2. The proper 

shipping name for this material is ethanol/alcohol solutions or 

ethanol. It carries identification number UN1170.- It is in 

hazard class 3 and packing group III. Tr. 55-56, 57-58, C-9. 

^ An "operator" is defined as "a person who controls the use of an 

aircraft, vessel, or vehicle." 49 C.F.R. § 171.8. 
14 

This shipment was prohibited from air transportation due to the 

absence of positive means to secure the bottle caps as required by 

49 C.F.R. § 173.27(d). Tr. 49-50, 55. The material safety data 

sheet for the gel indicated a flammability of "3" and a flashpoint 

of 74 degrees Fahrenheit.^ Tr. 58, C-9 at 2. The gel is 

considered "flammable due to alcohol content." C-9 at 2. 

Handlers are cautioned to "[a]void contact with ignition sources 

since the product is flammable." C-9 at 2. 

Empire transported the gel without the requisite shipping 

papers and the proper marking for air transportation as required 

by section 175.30(a)(2) and (3). Tr. 50. The two boxes had the 

marking "ORM-D. C-1 at 1-2, Tr. 49. To have been-authorized for 

air transportation the shipment was required to have been marked 

"ORM-D-Air." Tr. 49-50. Empire's improper carriage of a shipment 

containing a flammable gel not authorized for air transportation 

jeopardized the safety of Empire flight 8 6 77-22 and could have 

produced catastrophic consequences. 

It was Empire's responsibility, as an air carrier required to 

exercise the highest standard of care, to ensure compliance with 

section 175.30(a)(2) and (3) by rejecting the shipment. Tr. 64-5, 

99, C-11 at 12. Further, the plain terms of section 175.30(a)(2) 

and (3) indicate that such compliance was non-delegable. While a 

^ The flashpoint of a HAZMAT is the minimum temperature at which a 

liquid gives off vapor within a test vessel in sufficient 

concentration to form an ignitable mixture with air near the 

s'urface of the liquid. 49 ClF.R. § 173..'120 (c)~. 
15 

carrier -- such as Empire --is free to retain contract personnel 

for the performance of HAZMAT-related functions, the actions of 

such personnel, by the plain terms of section 175.30(a), canno t 

shield the carrier from regulatory violations for the failure to 

ensure that HAZMAT is properly described and certified (as 

required by section 175.30(a) (2)). and marked and labeled (as 

required by section 175.30(a) (3).) . 

Empire's attempt to distinguish prior cases decided.by the 

Decisionmaker that hold air carriers to the highest standard of 

care, including Alaska Airlines, is wide of the mark. Empire 

argues that Alaska Airline s is inapplicable to this case because 

Alaska_Airline s involved 14 C.F.R.. § 121.363, which states that 

air carriers are "primarily responsible for the airworthiness of 

its aircraft." Empire Appeal Br. at 20. Empire notes,' in 

contrast, that section 175.30(a)(2) and (3) allows an air carrier 

transporting HAZMAT who has.reasonably relied on incorrect 

information provided by an offeror or a prior carrier of the 

HAZMAT to avoid liability for a violation of that section on 

account of such reliance. Empire Appeal Br. at 21; se e als o 

49 C.F.R. § 171.2(f). 

Empire does not challenge the paramount reason Alaska 

Airline s is applicable to the instant case, i.e., that air 

carriers are held to the highest standard of care and, as such, 

their regulatory imposed duties cannot be delegated. In fact. 
16 

Empire acknowledges this principle, stating that "air carriers 

must- exercise the highest degree of safety," although it seems to 

assert that this; standard does not apply where an independent 

contractor accepts HAZMAT for a carrier or a carrier takes 

reasonable methods to ensure .compliance with section 175.30(a) . 

The fact that Empire's responsibilities cannot be delegated 

through contract, however, overrides the bases Empire sets forth 

in its effort to distinguish Alaska Airlines. 

That Alaska Airlines was "primarily responsible" under 

section 121.363 for ensuring the airworthiness of its aircraft and 

could not avail itself of a reasonable reliance provision in a 

requlation -(such as section 171.2(f)) does nothing to weaken 

Alaska Airlines ' control over the instant case. Both Alask a 

Airline s and the instant case' are a testament to deciding cases 

based on the plain language of regulations. 

In Alaska Airline's, the Decisionmaker recognized that the 

applicable regulation -- section 121.363 -- comported with the 

statutorily-based precept that a carrier is held to the highest 

standard of care and that its duties cannot be delegated through 

contract. Alaska Airlines, 2004-8 at *7 ("[s]ection 121.363 does 

not provide that air carriers are primarily responsible for 

maintenance except when the hire an entity independently 

certificated by the FAA to perform their maintenance"). In this 

case, as discussed above, the.plain language of the applicable 
17 

HMRs establishes that Empire, as the air carrier that transported 

the HAZMAT in question, is required to comply with 

sections 175.30(a)(2) and (3) notwithstanding whether it 

contracted with another entity to perform acceptance and loading 

duties. The plain language of the HMRs recognizes a single 

exception to an air carrier's violation of these sections, i.e., 

when the carrier reasonably relies on incorrect information 

provided by the offeror of HAZMAT or a prior carrier. 4 9 C.F.R. 

§ 171.2(f). In contrast, there is no provision in the HMRs that 

relieves a carrier from complying with an HMR pursuant to a 

contractual arrangement. Thus, unless Empire was able to show 

that it reasonably relied on incorrect information from an offeror 

or prior carrier, it is liable for the violations alleged in 

connection with flight 8677-22. As will be discussed below, the 

facts establish that Empire cannot avail itself of the reasonable 

reliance defense. 

In addition. Empire asserts that FedEx was a "prior offeror" 

that- was primarily responsible for regulatory compliance in this 

case, apparently to suggest that primary responsibility is akin to 

sole responsibility. Empire Appeal Br. at 21. FedEx, however, 

was not an offeror as the term is defined at 49 C.F.R. § 171.8. 

As stated at section 171.8: 

A carrier is not an offer when it performs a function 

required by this subchapter as a condition of acceptance of a 

hazardous material for transportation in commerce. .. . or 

_ . when it transfers a hazardous material to another carrier for 
18 

continued transportation in commerce without performing a 

pre-transportation function. 

49 C.F.R. § 171.8 (def. of "Person who offers or offeror"). In 

any event, Empire bases its contention on a DOT HMR interpretation 

set forth at 63 Fed. Reg. 30411, 30412 (Jun. 4, 1998). In 

actuality, the DOT stated in the interpretation that the offeror 

"bears the primary responsibility for a hidden shipment." Jd. 

at 30412. As will be discussed below, the shipment in question 

could not reasonably be construed as a hidden shipment. 

Regardless, even if an offeror may be in violation of HMRs related 

to the proper declaration of a shipment, a carrier is liable for 

failing to take all reasonable measures relating to the inspection 

of a shipment in accordance with sections 175.30(a)(2) and (3). 

Empire's attempts to distinguish other case s i n which the 

Decisionmaker concluded that a carrier is held to the highest 

standard of care are hollow. These cases are as follows: In the 

Matte r of WestAir Commuter Airlines, FAA Order No. 96-16 (May 3, 

1996) ; I n th e Matte r of USAir, orde r on recon. , FAA Order 

No. 92-70 (Dec. 17, 1992); and I n th e Matte r of Empire Airlines, 

FAA Order No: 2000-13 (Jun. 8, 2000) {''Empire 2000-13"). Empire 

narrowly reads these cases to suggest that they "do [] not address • 

issues of acceptance by independent contractors under the HMR or 

speak to the reasonable methods by which an air operator may 

'ensure' pursuant to § 175.30(a) . . . ." Empire Appeal 

Br. at.17. Empire also suggests, that the relationships between 
19 

the different contracting parties in WestAir, USAir, and Empire 

2000-13 constitute a material difference between those cases.and 

the instant case. While WestAir, USAir, and Empire 2000-13 are 

not necessarily on all fours, they are persuasive in the 

resolution of the instant case in favor of the Complainant. 

In USAir, the Decisionmaker denied USAir's petition for 

reconsideration, reaffirming its finding that USAir violated 

14 C.F.R. §§ 121.153(a)(2) and 91.13 based on its operation of an 

aircraft that had been damaged during a pushback operation. The 

Decisionmaker concluded that USAir was on notice of the damage 

since a contract pusliback operator, who saw the damage occur, was 

_USAir.Ls_Jlagent^servant_._:: FAA Order No. 92-70 at 2-3; se e .als o In 

t h e Matte r of USAir, FAA Order No. 92-48 at 9 (1992). 

Significantly, the Decisionmaker alternatively rejected 

USAir's argument that it was not responsible for the failures of 

the pushback operator since the operator was an independent 

contractor. The Decisionmaker stated: 

Even if Elsinore [the company performing the pushback 

operation] is an independent contractor, as . . . [USAir] 

claims, . . . [USAir] would still be responsible for 

Elsinore's negligent acts, because .' . . [USAir] is under a 

duty to perform its pushback operations with care . . . .' 

Air Carriers have the duty to perform their services with the 

highest possible degree of safety under the Federal Aviation 

Act ... . If Elsinore was an independent contractor, . . . 

[USAir] would remain responsible for its acts or omissions 

because the duty of care to protect others is non-delegable 
20 

FAA Order No. 92-70 at 4 (citations omitted). Thus, contrary to 

Empire's implication that the decision in USAir turned only on the 

concept that Elsinore was USAir's agent (Empire Appeal Br. at IB), 

the Decisionmaker made it clear that whether the corporate 

relationship was one of agency or that of an independen t 

contractor , the carrier -- which is held to the highest standard 

of care --is ultimately responsible for complying with the 

regulations. ' 

The Decisionmaker, in Empire 2 0 00-13, in dicta, reiterated 

the USAir holding regarding air carrier responsibility in the 

context of violations involving maintenance discrepancies.^ The 

_Decisionmaker_reiected Empire's argument -- similar to the one 

that the carrier makes in this case -- that it was "entitled to 

rely on the services performed by Cohair [i.e., a repair 

station]." FAA Order No. 2000-13 at *6. The Decision stated: 

While under the regulations, an air carrier can arrange with 

other persons to perform maintenance on its aircraft, the 

carrier cannot delegate away its primary responsibility for 

the airworthiness of its aircraft. 

^ Specifically, the Decisionmaker concluded that Empire had 

violated 14 C.F.R. §§ 43.13(a) and 121.376(b) when its maintenance 

contractor, with Empire's knowledge, performed an unauthorized 

aircraft repair. 
21 

FAA Order No. 2000-13 at *6 (citing 14 C.F.R. § 121.363).® The 

Administrator added that "[a]llowing an air carrier to delegate 

its primary responsibility for the safety of its aircraft would 

not serve the public interest." Td. While its true that this 

case, like Alaska Airlines, referenced the "primarily 

responsibility" language of section 121.363, the overarching 

consideration is that an air carrier must perform its duty to the 

highest standard of care. As the Decisionmaker observed in Alask a 

Airlines, it is this statutory provision that informs the 

"primarily responsibility" language of section 121.363. 

In WestAir, the Decisionmaker held an air carrier -- WestAir 

._i^responsible for violating a Federal Aviation Regulation' ("FAR") 

requiring the presence of an airport ground security coordinator. 

WestAir presented the defense that it'had entered into a 

contractual agreement with another air carrier -- United Airlines 

-- to provide the ground security coordinator for WestAir and. that 

this agreement removed WestAir's obligation to comply with the 

relevant regulation. The Decisionmaker rejected this argument, 

stating: 

While it may be true that WestAir had every reasonable 

expectation that United would honor its contractual 

obligations, and that it had no knowledge of the failure to 

^ In addition to citing 14 C.F.R. §§ 121.363(a)(1) and (b) as 

support for this proposition, the Decisionmaker also cited 14 

C.F.R. § 121.379(a). The latter section generally allows for 

contracting the performance of maintenance, preventive 

mairitehance, ahd^ alterations. ' ' . " '"" ~ ' 
22 

have a ground security coordinator present, WestAir remains 

respohsibre" for" the'-'se""curity violations at" issue .^ -- .. 

FAA Order No. 96-16 at *3. The Decisionmaker stated that even 

WestAir, in its brief to the Decisionmaker, observed that a 

carrier is held to the highest standard of care. Id . He 

concluded: 

As the law judge pointed out, an air carrier's 

responsibilities are too critical to permit it to transfer 

its obligations to another. It makes no difference that 

WestAir's reliance was on another carrier. 

Jd. Significantly, the Decisionmaker reached this conclusion 

without relying on a regulatory section holding an air carrier 

primarily responsible for regulatory compliance (e.g., 

section 121.363). 

The gist of WestAir, USAir, and Empire 2000-13, as well as 

Alask a Airlines, is that if ah air' carrier is responsible "for 

complying with an FAR it may not delegate this responsibility 

through agreement with another entity by contract because an air 

carrier is held to the highest standard of care. As previously 

stated in the Complainant's appeal brief in this matter. 

Congressional recognition that air carriers are to perform duties 

with the highest possible degree of safety in the public interest' 

is a long-standing policy- and common law-based concept that is 

not limited to air carrier activities conducted pursuant to the 

FAA's governing statute. Complainant's Appeal Br. at 18. Rather, 
23 

given the broad underpinnings of the principal, it applies to the 

carriage of HAZMAT in air commerce as well. 

Empire's suggestion that In the Matte r of Federa l Express, 

FAA Order No. 2002.-20, is at all applicable to this case 

constitutes a gross misreading of that case. Empire argues that 

Federa l Express stands for the principle that an air. carrier is 

not responsible for complying with HMRs relating to the improper 

offer or acceptance of HAZMAT where these activities were 

performed by an independent contractor to the air carrier. Empire 

Appeal Br. at 9-10. 

In Federa l Express, Scharff International Courier and Cargo, 

_S^^A^_( "Scharf f") , a courier operating in Lima, Peru, accepted a 

box of hazardous material and delivered the box to American 

Airlines'for international tra'n'sportatio"n "by air".'' "FedEx '" "' ' 

independently contracted for Scharff's services. Prior to 

delivering the box to American Airlines, a Scharff employee placed 

the box in a courier bag, covering the required labeling, marking, 

and shipping papers. Because the box was hidden inside the bag, 

American Airlines personnel could not see the dangerous goods 

label or the orientation arrows on the box. The American Airlines 

flight landed in Miami and a FedEx employee took the box to 

custpms, where the HAZMAT was detected. The Decisionmaker found 

that the shipment violated the HMRs in a number of ways, including 

that the shipment was "hidden" given that the courier bag covered 
24 

the required labeling, marking, and shipping papers'. FAA Order . 

No. 2002-20 at *1. The Decisionmaker, however, reversed the ALJ's 

determination that FedEx was responsible for the violations. 

The Decisionmaker engaged in a two-pronged analysis in 

finding that FedEx was not responsible. First, the Decisionmaker 

found- that "the record does not support a finding that Federal 

Express was acting as an air carrier at the time the hidden 

shipment was offered in air transportation." FAA Order 

No. 2002-20 at *2. The Decisionmaker added that "the standard of 

care applied to air carriers, as well as cases stating that an air 

carrier's duty of care may not be delegated to an independent 

contractor, are accordingly inapplicable." Id . (citing Empire 

2000-13 and USAir) . Second, after finding that FedEx was not 

acting' as an' air carrier of "the HAZMAT'in question, the" " ' " "" 

Decisionmaker found that FedEx was not liable for the actions of 

Scharff --an independent contractor to FedEx. FAA Order 

No. 2002-20 at *3. 

Since Empire was acting as an air carrier in this case. 

Federa l Express provides no support for Empire's argument. As the 

Decisionmaker in Federa l Express stated, "an air carrier's duty of 

care may not be delegated to an independent contractor . . . ." 

FAA Order No. 2002-20 at *2. Not only does Federa l Express not 

support Empire's argument, it actually runs contrary to it and 

ultimately supports the Complainant's position that Empire, as an 
25 

air carrier of HAZMAT in air commerce, was responsible for the HMR 

violations alleged in the complaint and found established by the 

ALJ. 

Empire may have constructed a business model whereby it 

relied on FedEx for the loading of HAZMAT aboard Empire aircraft 

pursuant to a contractual agreement. Nonetheless, Empire, an 

FAA-certificated air carrier solely responsible for the 

operational control of its aircraft, could not contract away its 

non-delegable responsibility for complying with 

sections 175.30(a)(2) and (3), and section 175.3. While " [a] t '• 

common law, a principal generally is not responsible for an 

_indep.endent contractor's acts or omissions,'" Federa l Express, 

2002-20 at *3, Empire clearly was responsible to prevent the 

^ac5ceptahce' and carriage of "noh-compliant HAZMAT aboard the ' 

aircraft it operates. This is evident from both the plain 

language of section 175.30(a)(2) and (3) and Empire's HAZMAT GOM.^ 

Under these circumstances, the arrangement between Empire and 

FedEx regarding the loading of HAZMAT aboard Empire aircraft 

^ Empire asserts that "Although Empire had the right to 'supervise' 

the accepting and loading process, nothing in the record indicates 

that thi£3 right extended into directing the detailed physical 

perfozTTiance of FedEx Express personnel." Empire Appeal Br. at 11. 

Empire is required to independently comply with the HMRs. 

Presumably, Empire can choose a variety of ways to achieve such 

compliance, including working with FedEx personnel to ensure that 

non-compliant HAZMAT is not loaded aboard Empire aircraft. That 

approach would seem to be an aspect of the supervision of the 

loading process required by Empire's GOM. C-11 at 41. In any 

event, the fact remains that Empire is independently responsible 

for compliance with the HMRs alleged in this case: 
26 

resembled an agency relationship since Empire was required to 

prevent personnel from accepting non-compliant HAZMAT shipments on 

its behalf and transporting those shipments aboard its aircraft. 

Further, were a catastrophe to occur aboard flight 8677-22 due to 

the non-compliant shipment of Nexium hand sanitizing gel. Empire's 

attempt to blame FedEx for the regulatory violations intended to 

prevent such an occurrence would ring hollow. Simply put, an air 

carrier is not allowed to avoid regulatory accountability through 

contract. Empire's failure to fulfill its regulatory 

responsibility resulted in its violation of sections 175.30(a) (2) 

and (3) and 175.3. 

2. Empire failed to establish that it reasonably relied on 

a hidden shipment loaded on its aircraft by FedEx. 

Citing 49 C.F.R. g 171.2^ Empire takes the position that its 

"reasonable reliance" on the actions of FedEx warrants a finding 

that Empire did not violate sections 175.30(a)(2) and (3). Empire 

Appeal Br. at 2, 13-16. Empire suggests that several factors 

support its position. It asserts that the shipment of Nexium hand 

sanitizing gel was not accompanied by shipping papers and, thus, 

the pilot's knowledge that the package contained HAZMAT was 

compromised. Empire Appeal Br. at 16. Empire conj ectures that 

the boxes were not grouped with other HAZMAT by FedEx personnel as 

is required for HAZMAT shipments and were placed on a loading belt 

in a manner that obscured the "Consumer Commodity ORM-D" marking. 

Empire Appeal Br. at 16. Empire concludes that under these 
27 

circumstances, it "took reasonable steps to fulfill its 'ensuring 

mandate' such as supervising or monitoring the acceptance process 

consistent with the FAA-approved General Operations Manual . . . 

and being aware of perceptible facts under its control. " Empire 

Appeal Br. at 2. 

Empire did not present sufficient evidence in support of its 

contention that it reasonably relied on FedEx's actions that 

resulted in Empire's carriage of a hidden -shipment. To the extent 

that Empire claims it did not violate section.175.30(a)(2) and (3) 

and section 175.3 because it relied on.FedEx to perform the 

functions required by those sections. Empire presents a position 

_in _the_,nature__of an affirmative defense-. A party who has asserted 

an affirmative defense has the burden of proving the affirmative 

defense . 14 C .F.R. § 13 . 2 2 4 (cV. "An affirmative de"fense is ~'~[a] 

defense that introduces new matter, which,-even if the . . . 

allegations are true, constitutes a defense to the complaint. An 

affirmative defense goes beyond the mere denial of the 

allegations." Jn the Natter of Interstate Chemical Co., Inc. , 

2002-29 (Dec. 2, 2000) (citation omitted). Empire, of course, 

does not dispute that the shipments of the Nexium hand sanitizing 

gel were not accompanied by shipping papers and were not marked in 

accordance with the HMRs. Empire also does not dispute that the 

packages were accepted and transported aboard its aircraft in air 

commerce.• Rather, Empire asserts that it could not reasonably 
28 

have been informed of the contents of the packages containing the 

gel because FedEx "failed to provide any shipping papers or 

information to Empire that hazardous material were being accepted 

and loaded onto Flight 8677-22." Empire Appeal Br. at 19. 

Whether or not Empire's defense is construed as an 

affirmative defense, it failed to produce sufficient evidence to 

support its position that the ALJ erred in finding it in violation 

of sections 175.30(a)(2) and (3) and 175.3. The most critical 

component of Empire's contention is that the shipment of Nexium 

hand sanitizing gel constituted a "hidden shipment." Empire 

Appeal Br. at 15-16. Empire relies on Federa l Express, 2002-20, 

_to_suggest_that_the shipment of the gel was a "hidden shipment." 

Empire asserts that in Federa l Express the Decisionmaker 

"determined that the packages were 'hi~dden sliipmenfs"' even""though~~ 

there were inconspicuous dangerous good . . . labels on the 

outside near the air carrier's affixed shipping labels." Empire 

Appeal Br. at 10. Empire appears to analogize the Decisionmaker's 

hidden shipment discussion in Federa l Express to the instant case 

where "Consumer Commodity ORM-D" markings were printed.on both 

ends of the package containing, the gel and its conjecture that the 

boxes were placed on a loading belt in a manner to obscure the 

"Consumer Commodity ORM-D" marking. Empire Appeal Br. at 16. 

The packaging for the Nexium hand sanitizing gel differedsignificantly from the shipment involved in the Federa l Express 
29 

case. The Decisionmaker in Federal' Express accurately described 

the shipment as "a 'hidden shipment,' given that the required 

labeling, marking, and shipping papers were hidden inside the 

courier bag." FAA Order No. 2002-20 at *1. Since the shipment 

was concealed in a courier bag, any indication that it was HAZMAT 

was truly hidden from American Airlines -- the carrier that 

transported the hidden shipment. 

In contrast, the packages containing the Nexium hand 

sanitizing gel could not reasonably be construed as a hidden 

shipments. As Agent Stiger testified, the boxes containing the 

gel were marked "Consumer Commodity ORM-D."^° Tr. 49. These 

markings were not in some obscure location. Rather, Agent Stiger 

testified that the markings were on both sides of each box; one • 

suchrmark"ing on eacln^box was near the shippi"hg^laber: CT~at ~ 

1-2, C-8 at 2, Tr. 49. The placement of the markings was 

consistent with HMR requirements, which provide, in part: 

Each non-bulk packaging containing a material classed as 

ORM-D must be marked on at least one side or end with the 

ORM-D designation immediately following or below the proper 

shipping name of the material. 

49 C.F.R. § 172.316(a). Agent Stiger stated that the packages, 

themselves, are usually offloaded one at a time from a conveyance 

^° The ALJ found Agent Stiger's testimony "credible." Initial 

Decision at 2. 

^^ That the markings were near the FedEx labels on each box 

suggests that they were not in a difficult-to-find location. 

Tr. "49, C'8 at 2," "4 . " '" " " 
30 

to the aircraft with the Empire pilot observing such activity. 

Tr. 52. Had the Empire pilot for flight 8677-22 properly 

supervised the loading process as required by the GOM and HMRs, he 

would have noticed the conspicuous "Consumer Commodity ORM-D" 

markings on both ends of each box. Indeed, the purpose of a 

marking is to communicate to those involved in the transportation 

of HAZMAT the fact that the package contains HAZMAT. A carrier 

ignores such markings at its peril. 

The evidence is far too tenuous to suggest that, the "Consumer 

Commodity ORM-D" marking was blocked from the view of the pilot. 

Empire baldly states that "the FedEx Express personnel load each 

_aircraft_by_placing boxes longitudinally on roller leading to the 

aircraft and providing no apparent visual cues as to markings on 

The ends of~the package." Empire AppeaF^r. at b. in suppert~~o'f 

this contention, however. Empire merely relies on Mr. Mills' 

general testimony that the boxes are "typically" placed end-to-end 

v;hen they travel to the belt loader and that this would have made 

it difficult for a pilot to see the "Consumer Commodity ORM-D" 

markings. Tr. 181. Empire did not present the testimony of the 

pilot-in-command of flight 8677-22 or of anyone present during the 

loading of flight 8677-22 to state how the boxes were actually 

placed on the loading belt. While Mr. Mills goes on to state that 

the pilot had "no cue at all that those particular boxes might 

contain anything but grandmother's cookies," Tr. 181, the evidence 
31 

reveals that the boxes had appropriately placed "Consumer 

Commodity ORM-D" markings, which indicated that the boxes 

contained HAZMAT. Tr. 181. In any event, Mr. Mills, like Agent 

Stiger, testified that the boxes are "hand loaded" on the 

•aircraft, Tr. 181, see als o Tr. 52, an activity that would give a 

prudent pilot ample opportunity to inspect the outside of boxes. "'^ 

It is true that the shipment of Nexium hand sanitizing gel 

was not accompanied by shipping papers, as Empire asserts. The 

evidence is less than certain that packages containing the gel 

were not separated from non-HAZMAT.. Notwithstanding the absence 

of shipping papers and the conjecture that the packages were not 

.grouped_with_other .HAZMAT packages, the markings on each end of 

each box were sufficient to communicate to a reasonably prudent 

Empire pilot that the shipments at issue contained~HAZMAT^t]Ta"t was 

prohibited to be transported by air. This is especially true 

since Empire has charged its pilots to supervise the loading of 

HAZMAT aboard an aircraft and Empire is required by 

section 175.30(a) to inspect HAZMAT shipments. A reasonable 

Empire pilot acting under the circumstances of this case should 

have known that HAZMAT shipments marked "Consumer Commodity ORM-D" 

^^ It. is troubling that Empire attempts to hide behind conjecture 

that the boxes" were conveyed on a belt loader in a manner that 

obscured the "Consumer Commodity ORM-D" marking. Empire was not a 

helpless bystander during the loading process. It was the 

FAA-certificated air carrier that was proscribed by regulation to 

allow the loading of packages on its aircraft that were prohibited 

from air carriage. ' ' ' "~ 
32 

are forbidden from transportation by air. Had Empire, through its 

pilot, exercised reasonable care, it would have spotted the 

"Consumer Commodity ORM-D" markings. "This should have triggered 

an inquiry as to whether the shipment complied with HAZMAT 

requirements. Empire could have reasonably been expected to have 

prevented the gel from being loaded aboard flight 8677-22 since 

the shipment was prohibited from air transportation due to the 

absence of positive means to secure the bottle caps. Tr. 49-50, 

55. 

Empire's contention that it can be absolved of these 

violations on the ground that it reasonably relied on FedEx's 

_fal.lures__oyerlooks that Empire, itself, was in a position t^_ 

ensure regulatory compliance. Empire^s GOM for HAZMAT provides 

that Empire crewmembers are responsible for compTiance with alT ' 

the provisions of the HAZMAT regulations regarding the acceptance 

of HAZMAT. Tr. 98, C-11 at 8.. While FedEx may have performed the 

loading of HAZMAT (C-11 at 41), the GOM provides that Empire 

pilots are responsible for supervising the loading of HAZMAT 

aboard aircraft operated by Empire. Tr. 52, 66-, 100, C-11 at 41. 

This supervision requirement is consistent with section 175.30(a), 

which requires Empire' to ensure that HAZMAT set to be loaded 

aboard Empire aircraft conform to HMR requirements, including 

those related to shipping papers and proper markings. Accepting 

Empire's argument that it is not liable for the violations cited 
33 

in this case would absolve it, and any carrier, from complying 

with HMRs where it contracts out HMR-mandated responsibilities 

notwithstanding the existence of markings that put the carrier on 

notice as to the existence of HAZMAT. Surely, the HMR's did not 

intend such a result. 

I Conclusion 

The ALJ properly concluded that Empire's failure to properly 

inspect HAZMAT shipments placed on its aircraft warranted a 

i 

finding the Empire violated sections ll75.3, 175.30(a)(2), and 

I 

175.30(a)(3). 

I 

The Complainant, therefore, requests that the Decisionmaker 

..af f irin.. the finding_in_this_ regard.. .' L.. _.___ 

Respectfully submitted, 

Peter J. Lynch 

Assistant Chief Counsel 

for Enforcement, AGC-300 

'fWttA^, 

By: Jaipes A. Barry 

Senior Attorney 

Enforcement Division, AGC-300 

Office of the Chief Counsel 

Federal Aviation Administration 

800 Independence Avenue, S.W. 

Washington, D.C. 20591 

Tel: (202) 267-8198 

Fax: (202) 267-5106 

Dated: July 27, 2011 
34 

Certificate ofl Service 

I hereby certify that on this date' I have placed in the U.S. 

mail, postage prepaid, certified return-receipt,' a copy of the 

Complainant's Reply Brief in the case of Jn the Matte r of Empire 

Airlines, Inc. , FAA Docket No. CP09NM0009, addressed to: 

I 

Glen P. Wicks, Esq. ; 

Roncervert D. Almond, Esq. | 

The Wicks Group, PLLC ' 

1215 17^^ Street, NW { 

Sumner Annex, Fourth Floor j 

- Washington, DC 20036 : 

In addition, I hereby certify that on this date I have placed 

in the U.S. mail, postage prepaid, certified return-receipt, the 

original and two copies of the foregoing document to: 

Federal Aviation Administration i 

600 Independence Avenue, SW ' 

Wilbur Wright Building - Suite 2'wiOOO 

" Washi ng t on, DTCT~2"0"5"9"1 

Attn: Appellate Docket Clerk, AGC~430 

Dated: July 27,, 201 2 01 1