OG/24/201 0 15:5 9 FA X 202493514 2 FA A* DM S @1001/02 3

UNITE D STATE S DEPA K FMEN T O FTRANSPORTATIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D C I n th e Matte r

of : TAT E AN D PARTNER S FA A Orde r

No . 2010- 7 Docke t No . CP04SO001 4 FDM S No . FAA-2004-17784 ' Served : Jun e 15,201 0 DECISIO N AN D ORDER S Administrativ e La w Judg e (ALJ ) Richar dC . Goodwi n is.sue dawritte n initia l decision- ^ o n Decembe r

12 , 2005 , holdin g tha t

Responden t

Tat e an dPartner s (Tate)' ' violate dth e regulation s allege di n th e complain t whe n it shippe dhazardou s material s withou t shippin g papers , labels , markings , prope r packaging , employe e training , an d emergenc y respons e information.' ' Th e AL J assesse dacivi l penalt y o f $25,000 . Material s filedi

n th e FAA Hearin g Docke t (excep t for material s filedi

n security case;; ) art ; als o availabl e fo

r viewin g a

t h/lp://wnrw.regularionn.trc^v . " Th e Administraior' s civi l penalty decisions , alon g wit h indexe s oflh e decisions , th e rule s of " practice , andothe r

information , ar

c availabl e o n th e Interne t a i ih e followin g address : http://\vww./ciagciv/about/qffjc e org/headquarrers_oJJtces/agc/pol_adjudicaiion/AGC400 / Civil_Penalry . I

n addition , Thomso n Rculers/Wes t Publishin g publishe s Federal Aviatio n Decisions . Finally , th e decision s arc availabl e throug h LF.XI S (TRAN S library ) an dWestLaw (FTRAN-FA A database) . Fo r additional information , se e ih e We b site . • A cop y o f

th e ALJ' s order

i s attached . Originally , th e complain t

als o name dTal e employe e Lili t Karapetia

n a s arespondent , but

th e FAA later amende dth e complain t

t o make lat e th e only respondent . ^ Specifically , ih e FA

A allege dthat

Tat e violated : 4 9 C.F.R . § 171.2(a) (offerin g hazardou s material for

transportatio n when no t

properl y clas.<?ed

, described , packaged , marked , labeled , and i n conditio n for

shipment) ; § 172.200(a ) an d§ 172.202(a)(l)-(5 ) (offerin g hazardou s material fo r transportatio n andfailin g t o describ e hazardou s material on shippin g papers) ; i j 172.204(a ) <i

r (c)(1 ) (offerin g hazardou s material fo r transportatio n an dfailin g t o certif y thai materia l wa s offere dfo r transportatio n i

n accordanc e wit

h regulation s b

y printin g acertificatio n on th e shippin g paper) ; § 172.204(c)(2 ) (offerin g hazardou s material t o aircrafl . operato r for transportatio n b

y air andfailin g t o provid e tw o copie s o f certification) ; § 172.204(c)(3 ) (offerin gOG/24/201 0 15:5 9 FA X 202493514 2 FA A * DM S 0002/02 3

UNITE D STAIE S DEPARTMEN T O FTRANSPORTATIO N FEDERA L AVIATIO N ADMINISTRATIO N

WASHINGTON , D C I D th e Matte r

of : TAT E AN D PARTNER S FA A Orde r

No . Docke t No . CP04SO001 4 FDM S No . FAA-2004-17784 '

Served : DECISIO N AN D ORDER S Administrativ e La w Judg e (ALJ ) Richar dC . Goodwi n issue dawritte n initia l decision' ' o n Decembe r

12 , 2005 , holdin g tha t

Responden t

Tat e an dPartner s (Tate)' ' violate dth e regulation s allege di n th e complain t whe n i t shippe dhazardou s material s withou t shippin g papers , labels , markings , prope r packaging , employe e training , an d emergenc y respons e information. ' Th e AL J assesse dacivi l penalt y o f $25,000 .

' Material s file din th e FAA Hearin g Docke t (excep t fo r material s file di

n security cases ) ar e als o availabl e fo

r viewin g a

t hilp://-\vww.reeulaiions.gov . ^ Th e Administrator' s civi l penalty decisions , alon g wit h indexe s o f

th e decisions , th e rule s o f practice , anil other

infonnation , are availabl e on th e Interne t a t ih c followin g address ; http://yvww.fac

L gov/about/qffjcejorg/headguarterx offices/agc/pol_adjudicalion/ A GC400 / CMl^Penalty . In addition , Thomso n Rcutcrs/Wes t Publishin g publishe s Federa l Aviatio n Decisions . Finally , th e decision s are availabl e throug h LEXI S (TRAN S library ) andWestLaw (FTRAN-FA A database) . Fo r additiona l information , se e th e Web site . ^ A cop y o f

th e ALJ' s order

i s attached . ' ' Originally , th e complain t als o name dTate employe e Lili t Karapetian a s arespondent , bu t th e FAA later amende dth e complain t

t o mak e Tat e th e only respondent . ' Specifically , th e FA

A allege dthat

Tat e violated : 4 9 C.F.R . § 171.2(a) (offerin g hazardou s materia l for

transportatio n whe n no t

properl y classed , described , packaged , marked , labeled , and in conditio n for

shipment) ; § 172.200(a ) and§ 172.202(a)( l )-(5 ) (offerin g hazardou s material for transportatio n an dfailin g t o describ e hazardou s material on shippin g papers) ; § 172.204(a ) o r (c) ( 1 ) (offerin g hazardou s material for transportatio n andfailin g t o certif y tha t material WEL-

J offere dfo r transportatio n i

n accordanc e wit

h regulation s b

y printin g acertificatio n o n th e shippin g paper) ; § i 72.204(c)(2 ) (offerin g hazardou s material to aircraf t operato r for transportatio n by air

an dfailin g t o provid e tw o copie s o f certification) ; § 172.204(c)(3 ) (offerin gOG/24/201 0 1G:0 0 FA X 202493514 2 FA A* DM S 0003/02 3

Tat e ha s appealed , arguing , amon g othe r things , tha t

th e civi l penalt y i s "grossl y excessive " i n ligh t

o f pas t cases . A s explaine dherein , thi s decisio n assesse s a$20,00 0 civi l penalty . 1 . Fact s Tate , locate di n Sant aMonica , California , i s afour-perso n compan y tha t produce s televisio n commercials . (Tr . 90 , 93 , 122. ) Tat e hire dadirecto r t o fil maMolso n bee r commercia l i n Toronto , Canada . (Tr . 96-97. ) I n lum , th e directo r hire dapro p masier , Damo n Cardwell . (Tr . 97. ) Cardwel l aske dTat e t o shi p thre e boxe s o f material s t o Toront o fo r

hi s us e a t

th e shoot . Tale' s productio n manager , Hug h Bacher , testifie dtha t th e boxe s wer e seale d whe n Cardwel l brough t h i i n th e boxes . (Tr . 102. ) Bache r testifie dtha t

h e aske d for ai r transportatio n hazardou s material andfailin g t o ad dt o certificatio n astatemen t tha t shipment wa s withi n limitation s prescribe dfo r passenger

or cargo-onl y aircraf

t - whicheve r

wa s applicable) ; § 172.300(a ) and§ 172.312(a)(2 ) (offerin g for transportatio n non-bulk

packagin g havin g inne r

packaging s containin g liqui dhazardou s material andfailin g legibl y t o mark outer packag e wit

h orientatio n markings) ; § 172.301(a) (offerin g hazardou s material fo r transportatio n i n non-bul k

packagin g andfailin g t o mar k packag e wit

h prope r shippin g nam e an didentificatio n number) ; § 172.40 0 an d§ 172.404(a ) (offerin g packag e containin g hazardou s material for transportatio n whe n packag e contain s hazardou s material s havin g different hazardclasse s packe d withi n same packaging , outsid e container , or overpac k an dfailin g t o labe l packaging , outsid e container , o r

overpac k a s require dfo

r eac h clas s o f

hazardou s material containe dinside) ; § 172.400(a) (offerin g hazardou s material for transportatio n in apermitte dpackag e or containmen t

devic e an dfailin g t o label packag e o r containmen t

devic e wit

h label s specifie dfor material) ; § 172.600(c ) (offerin g hazardou s material fo r transportatio n an dfailin g t o mak e emergenc y respons e informatio n immediatel y availabl e for us e a t all time s hazardou s material wa s presen t

andfailin g t o make suc h infonnation , includin g emergenc y respons e telephon e number , immediatel y availabl e to an y governmen t

agenc y respondin g to inciden t involvin g hazardou s material or

conductin g investigatio n that involve s hazardou s material) ; § 172.702(a) (offerin g hazardou s material for transportatio n an

dfailin g t o cn.sur

e tha t eac h hazma i employe e wa s trained) ; § 173. 1 (b ) (offerin g hazardou s material fo r transportatio n that

wa s no t prepare di

n accordanc e wit

h hazardou. t

material s regulations , an

dfailin g t o in.struct

eac h o f it s officers , agents , an demployee s havin g any responsibility fo r preparin g hazardou s material s fo r shipmen t a s t o applicabl e hazardou s material s regulations) ; and§ 173.20 1 (offerin g fo r transportatio n packag e containin g liqui dhazardou s materia l in Packin g Grou p I an dfailin g t o us e non-bul k packagin g andotherwis e t o confor mt o th e packagin g regulation s for thi s material) .OG/24/201 0 16:0 0 FA X 202493514 2 FA A• > DM S @j004/02 3

Cardwel l whethe r

th e shipmen t

containe dan y hazardou s materials, ' an dCardwel l replie d tha t h e ha dremove dth e hazardou s material s fromth e boxes , (Tr . 110. ) However , th e boxe s di dcontai n numerou s hazardou s material s - roughl y 4 0 o r 5 0 differen t products ^ ( 1 r . 64 ) - mos t o f whic h wer e labele d"flammable " o r "extremel y flammable."' (Tr . 27. ) Man y aeroso l can s wer e packe di n th e boxes , an don e bo x containe dabutan e lighte r a s wel l a s othe r

hazardou s materials . (Tr . 61. ) Accordin g t o

* Th e director' s lin e produce r ha dwarne dTat

e employee s o n th e da

y o f th e shipmen t

tha t th e pro p maste r

woul dnee dhi s kit s a

t th e shoo t an dthat th e hazardou s content s shoul db e remove d before Tat e shippe dthem . (Tr . 98 , 109-110. ) ^ Th e complain t

allege dthat

th e thre e boxe s contained : tw o 11-ounc e aeroso l container s o f Krylo n Crystal Clea

r Acryli c Coating " labele d"Extremel y Flammable " and"Content s Unde r Pressure" ; on e 1 6 V

i ounc e aeroso l containe r

o f 3 M "Super

7 7 Spray Adhesive " labele d "Extremel y Flammable " and"Content s under Pressure" ; five 5-ounc e aeroso l conlainer s o f "L e Brumisateu r

livian Ea u Mineral " labele d"Pressurize dContainer" ; tw o 16-ounc e container s o f "Reagent Alcohol " affixe dwit

h flammabl e liqui dlabel ; on e 25-ounc e plasti c containe r o f "Las t Rins e Sanitizcr" labele d"Corrosiv e t o Eyes" ; one 16-ounc e glas s containe r o f "Aqu aGel " labele dt o hav e apH o f

2 ; on e 1 l-ounc e aero.sol container o f "Krylo n Matt e Finis h Spra y Coatin g 1311 " labele d"Extremel y Flammable " and"Can Pressurized" , tw o 8-ounc c aeroso l container s o f "Streak s ' N Tips " labele d"Flammable " and"Content s under Pressure" ; on e 7-ounc e aeroso l containe r o f "Supe r 7 7 Spra y Adhesive " labele d"Extremel y Flammabl e an d"Content s unde r Pressure" ; tw o 38-gra

mmetal cylinder s o f

"CO j Power Clean " labele d"Carbo n Dioxid e Gas/Non-Flammabl e Gas/UN 1013/ORM-D" ; tw o "Magnu m4 4 Pennanen t Markers " labele d "Combustible" ; tw o "Marks-A-Lo t Permanen t

Markers " labele d"Flammable" ; one 4 Vi-ounce containe r of "Goof-Of

f labele d"Flammable" ; on e 2-ounc e plasti c containe r o f "Zi p Kicke r Accelerato r

fo r Super Glue " labele d"Flammable" ; on e 3-ounc e gla.s s containe r of "Weldwoo d Contac t Cemen f labele d"Extremel y Flammable" ; one 100-milliliter aeroso l containe r

of "WD 40 " labele d"Flammable " an d"Pressurize dContainer" ; on e 4-ounc e metal tub e o f "Liqui dNails " labele d"F.xlremcly Flammable" ; one butan e lighter labele d"Butan e Ga.<

? Unde r Pressure " and "Extremel y flammable" ; four 12-ounc e aeroso l container s o f "Krylo n Interior/Exterio r Paint " labele d"Extremel y Flammable " an d"Content s Unde r

Pressure" ; on e 12-ounc e aeroso l containe r o f "Krylo n Sandabl e Primer " labele d"Extremel y Flammable " and"Content s Under Pressure" ; on e 9-ounc e aeroso l containe r o f "Studi o Hair

Color " labele d"Extremel y Flammable" ; on e 16 - ounc e metal containe r

o f "Bestin e Solven t

andThinner " labele d"Extremel y Flammable" ; on e 16 - ounc e containe r

o f "Denature dAlcohol " labele d"Flammable " an d"Poison" ; on e 8-ounc e plasti c containe r o f "Go o Gone " labele d"Combustible" ; an don e 9 %-ounc e aeroso l containe r o f "Spray Moun t Arti.sl'. s Adhesiv e labele d"Extremel y Flammable " and"Content s Unde r Pressure, "

' Extremel y flammabl e hazardou s material s hav e alowe r flas h poin t

tha n flammabl e hazardou s materials . (Tr . 29 )t OG/24/201 0 1G:0 0 FA X 202493514 2 FA A^ DM S 0005/02 3

forme r FA A Specia l Agen t

Danie l Wahl. ' wh o investigate dthi s matte r an dtestifie da t th e hearing , i f

abutan e lighte r

i s no t package dproperly , i t

i s aforbidde n item." ' (M ) O n th e da y tha t

Cardwel l brough t

th e boxe s t o Tate , h e gav e Bache r thre e lists ; eac h lis t describe dth e content s o f on e o f th e thre e boxes , (Tr . 98-99. ) Bache r rea dth e list s befor e h e shippe dth e boxes , bu t h e di dno t

researc h th e natur e o f

an y o f th e liste d item s (Tr . Ill ) an ddi dno t ope n th e boxes . (Tr . 102. ) Bache r prepare daUP S invoic e fo r eac h box . Attache dt o eac h invoic e wa s Cardwell' s lis t o f th e content s o f

tha t particula r

box . (FA A Exhibi t

6. ) Th e pro p master' s list s di dno t includ e man y o f

th e hazardou s materials . Fo r example , Cardwel l faile dt o Hs t "WD-40, " "Liqui dNails, " "hae l lighter, " "Streak s ^* N Tips, " denature dalcohol , an dspra y mount . (Compar e FA A Exhibi t 5 an dFA A Exhibi t 6 ; Tr . 37-38. ) Whil e incomplete , th e pro p master' s list s di dinclud e "Supe r Glue " vjhic h i s anammflbl e material , an dothe r item s - i.e. , "glue, " "glu e sticks, " "glycerine, " an d "butyl " • tha t

coul dhav e indicate dtha t th e boxe s containe dhazardou s materials . (Tr . 34 - 36. ) A s Wah l explained , certai n glue , glu e sticks , glycerine , an dbuty l product s ar e hazardou s materials , bu t other s ar e not . " (Tr . 34-36. ) Fo r example , Elmer' s Glu e i s no t ahazardou s material . (Tr . 36. ) "Butyl, " h e explained , i s " acousi n o f alcohol, " an dth e

* At th e lim e o f

th e hearing , Wah l worke da t th e Departnen t

o f Homelan dSecurity . (Tr . 22. )

' " Unde r 4 9 C.F.R . § 173.21 , "Forbidde n material s andpackages, " th e offerin g o r transportatio n of package s containin g acigarett e lighter o r othe r simila r device , wit

h a n ignitio n elemen t

and containin g fiiel , i s prohibited . " "Butyl " i s define din Webster' s I L Ne w Rjver.sid

e University Dictionary a s "[a ] hydrocarbo n radical , C4H? , wit

h astructure o f

butan e an

dvalenc e 1. " (Tr . 43. ) "Glycerin " or "glycerol " i s define di n that dictionary a s " asyrup y sweet , colorles s o r yellowis h liquid , CjHjO.! , derive dfrom fat s an doil s a s aby-produc t o f th e manufacture o f

soap s an dfatt y acid s an duse da s asolvent , antifreez e andantifros t

fluid , plasticize r

an dsweetene r

andi n th e productio n o f

dynamite , cosmetics , liqui dsoaps , inks , andlubricants. "OG/24/201 0 1G:0 0 FAX 202493514 2 FA A+ DM S ilOOG/02 3



### Hazardou s Material s Tabl e (set fort h at 4 9 C.F.R . § 172.101) , accordin g t o th e special agent , list s man y buty l products . (Tr . 41. ) H e explaine dthat whil e th e liste dterm "butyl " migh t

hav e bee n mean t

t o describ e buty l alcohol , ahazardou s material , i t might als o hav e bee n mean t

to indicat e tha t

th e bo x containe dbuty l rubber , anonhazardou s material . (Tr . 35. ) Hence , h e stated , th e pro p manager' s lis t di dno t provid e sufficient identifyin g infomnatio n abou t th e nature of

th e packe ditem s describe da s "glue, " "glu e sticks, " "glycercine " and"butyl, " an dh e woul dnee dto loo k a t thos e item s t o determin e whethe r they wer e hazardou s materials . (Tr . 24. ) Tate' s productio n manage r shippe dth e boxe s vi aUP S to Radk c Film s in Toronto , Canada , o n o r

abou t Augus t 7 , 2000 . Thi s wa s a

n undeclared , o r

"hidden, " shipmen t becau.s e th e boxe s di dno t indicat e i n an y wa y that the y containe dhazardou s materials . (Tr . 20. ) UP S llc w th e boxe s t o aUP S facilit y in Louisville , Kentucky , astoppin g of f poin t o n th e way t

o Canada , wher e i t

discovere dtha t

th e shipmen t

containe dhazardou s materials.' ^ (Tr . 33, ) Afte r openin g th e boxes , UP S prepare dathree-pag e lis t o f th e shipment' s contents , whic h i t provide dt o th e FAA afte r contactin g th e FAA . (Tr . 21-22 ; FAA Exhibi t

5. ) Th e lis t

compile db y UP S for

th e content s o f

eac h bo x include dmany more item s than th e pro p master' s lists . 11 . Cas e Histor y Th e FA A filed acomplain t seekin g a$30,00 0 civi l penalty for Tate' s allege d violation s o f

th e hazardou s material s regulations . I n aletter t o th e ALJ , Tate , whic h wa s no t represente db y counse l a

t th e time , state dtha

t i t di dno t deny that i t ha dshippe dth e hazardou s materials , bu t

i t argue dtha

t th e propose dpenalty wa s excessive .

'^ The FA A special agen t

testifie dthat

the haz-ardou s material s wer e discovere ddurin g "th e cours e o f adocumen t

search. " (Tr . 20. )OG/24/201 0 1G:0 0 FA X 202493514 2 FA A-s - DM S 0007/02 3



### Th e FA A move dt o deemth e allegation s admitte dan dt o hav e ahcarhi g o n tlli e sanctio n only . Th e ALJ denie dth e FAA' s motion , statin g tha t h e di dno t

wan t to "summaril y preclud e apr o s e responden t no t familia r wit h th e Rule s frompresentin g evidence. " Tate hire dcounsel , an dth e AL J preside dover

ahearing . I n hi s writte n decision , th e AI J foun dthat th e FA A showe db y apreponderanc e o f th e evidenc e tha

t Tat e "knowingly " offeredth e shipmen t for ai r transport . (Initial Decisio n a

t 4. ) T o comrni t

aviolatio n under

th e Federal hazardou s material s statute , 4 9 U.S.C . § 5123(a) , aperso n mus t ac t "knowingly. " A perso n act s "knowingly " unde r Sectio n 5123(a)(1 ) no t

jus t whe n h e o r

sh e ha s actual knowledg e o f th e fact s givin g ris e t o th e violation , bu t

als o whe n areasonabl e perso n i n th e circumstance s usin g reasonabl e car e woul dhav e that

knowledge. " Accordin g t o th e ALJ , Tate' s productio n manage r "wa s awar e of

th e possibility that hazardou s material s coul dbe , an dma y hav e been , apai l o f thi s shipment. " (Initial Decisio n a

t 3. ) A s th e ALJ noted , th e lin e producer o n th e shoo t

tol dBache r

that .sh e ha d reminde dth e pro p maste r no t t o includ e hazardou s material s in th e shipmen t an dth e pro p maste r tol dBache r

that h e ha dno t

include dhazardou s material s i n th e boxes . (Initial Decisio n at

3. ) Th e ALJ foim

dthat Tate' s productio n manage r ha dreviewe dth e pro p master' s list s containin g entrie s tha t shoul dhav e prompte dfurther inquiry , accordin g t o th e testimony - "glu e sticks, " "butyl. " "glues , "Supe r Glue, " an d"glycerine " (FAA . lixh .

' ^ 4 9 U.S.C . § 5123(a)(1 ) provide s a s follows : (a ) PENALTY.—(1 ) A perso n tha t knowingl y violate s thi s chapte r or aregulatio n prescribe dor

orde r issue dunder

thi s chapter

i s liabl e to th e Unite dState s Govemmen l fo r acivi l penalty o f a t leas t $25 0 bu t no t mor e tha n $2.5,000 fo

r eac h violation . A perso n act s knowingl y when— (A ) th e perso n ha s actual knowledg e o f th e fad s givin g ris e to th e violation ; or (B ) area.s()nablc perso n actin g i n th e circumstance s andexercisin g reasonabl e car e woul d hav e tha t knowledge .OG/24/201 0 1G:0 0 FA X 202493514 2 FA A • > DM S 12006/02 3

6 a t 2 , 4 , 6 ; Tr . 24 , 34-36 ) an dye t h e faile dt o loo k

insid e th e boxes . H e hel dtha t Tale' s productio n manage r woul dhav e foun dth e hazardou.<5 material s i n th e prope r exercis e o f

hi s duty . Th e ALJ , therefore , hel dtha t th e productio n manage r ha d knowledg e oflh e hazardou s material s unde r 4 9 U.S.C . § 5123(a)(1) , an dfoun dtha t Tal e wa s liabl e tliroug h hi mbecaus e h e wa s a n employe e actin g witlii n th e scop e o f hi s employment . Thus , th e AL J conclude dtha t Tat e knowingl y offere dth e shipmen t o f hazardou s material s t o UP S becaus e areasonabl e perso n i n th e circumstance s an d exercisin g reasonabl e car e woul dhav e know n th e content s o f th e shipment . (Initia l Decisio n a t

4. ) Th e AL J assesse dacivi l penalt y o f $25,000,'' ' H e di dno t

asses s th e FAA' s propose dcivi l penalt y o f $30,00 0 becaus e h e foun dtha t th e FA A faile dt o conside r adequatel y tha i Tat e di dno t normall y shi p hazardou s material s an dwa s unfamilia r •wit h th e regulations . (Initia l Decisio n a t 5. ) II L Discussio n Fat e argue s o n appea l tha t th e civi l penalt y o f

$25,00 0 i s "grossl y disproportionate " t o th e penaltie s i n previou s hazardou s material s case s an di s "manifestl y excessive " give n tha i "th e violatio n occurre da s adirec t resul t o f a n affirmativ e misrepresentatio n b y a n independen t contracto r

who mTat e ha dn o rea.so n t o disbelieve. " (Appea l Brie f a t 2. ) A . Federa l Hazardou s Material s Stiitut e Th e startin g poin t

i n thi s analysi s i s th e Federa l hazardou s material s statute . Th e statut e provide s tha t

i n determinin g th e sanction , th e relevan t factor s are : th e nature ,

' * For alis t o f th e regulations , xe

e footnot e 5 .OG/24/201 0 1G:0 0 FAX 202493514 2 FA A + DMS 21009/02 3



### circumstances , exten t

andgravit

y oflh e violation ; th e degre e o f culpability o f

th e violator ; an y history o f

pas t violations ; th e ability t o pay ; an y effect o n th e abilit

y t o continu e t o d o business ; an dother matter s a s justic e requires . 4 9 U.S.C , § 5123(c) . B . FA A Sanctio n Guideline s T o implemen t

th e statute , th e FA A issue dpenalty guideline s entitled , "Federal Aviatio n Administratio n Polic y o n Enforcemen t o f th e Hazardou s Material s Regulations : Penalty Guidelines. " 6 4 Fed . Reg . 19,44 3 (Apri l 21 , 1999) . ITie guideline s in effect a t th e lim e o f

th e violation s wer e se t

fort h i n FAA Order

No . 2150.3 A ("Comphanc e an d Enforcemen t

Program") , Chang e 26 , Appendi x 6. " Th e purpos e o f th e guideline s i s t

o provid e agenc y personne l wit h " asystemati c wa

y t o evaluat e acas e an darriv e a t a n appropriat e penalty , considerin g al l th e relevan t statutor y criteria , includin g any mitigatin g an daggravatin g circumstances," a s wel l a s l o promot e consistenc y s o that "similar penalties are impose di n simila r cases. " FAA Order

No . 2150,3A , App . 6 , p . 3 . C . Weightin g Question s Th e FAA' s penalty guideline s contai n aserie s o f question s t o hel p evaluat e a particular case . FAA Order

No . 2150.3A , App . 6 , p . 5 . Th e question s revie w th e statutory criteria , which , a s discusse dabove , includ e th e nature , circumstances , extent , an dgravit y o f th e violation , th e violator' s degre e of culpability , any history of prio r violations , th e ability t o pay , any effec t o n th e ability t o d o business , an dany other matter s that

justic e ma

y require. FAA Orde r

No . 2150. 3 A , App . 6 , p . 2 . Th e weigh t assigne daparticular

cas e depend s o n thes e statutor y factors , a s refiecte di n th e penalt y

^ ' FAA Orde r

No . 2150. 3 A , Chang e 26 , Appendi x 6 , ma y b e foundat : hup://www.airweb.faa.gov . Onc e a t thi s We b site , clic k

o n "Orders/Notices. " Ente r "2150.3A, " Clic k o n "2I50.3 A Complianc e an dEnforcement Program[Incorporate dChange s 1 thr u 28]. " Finally , selec t

"Order2150.3aPartl2.pdf " Appendi x 6 start s o n p . 12 1 o f

thi s 140-pag e PD Ffile .OG/24/201 0 1G:0 1 FAX 202433514 2 FA A . DM S 0010/02 3



### guidelines , wit

h higher weight s Justifyin g highe r penalties . Th e guideline s provid e recommende dpenalty range s correspondin g t o th e variou s weight s i n apenalt y matri x tha i als o consider s several other relevan t factors . Belo w i s adiscussio n o f th e question s pertinen t t o thi s case . 1 . fVha i materia l i s a t

i.vsue ? Thi s questio n i s pertinen t becaus e th e mor e hazardou s th e shippe dmaterial is , th e highe r th e civi l penalty shoul dbe . TTi c guideline s divid e hazardou s material s int o variou s ris k categories . Categor

y A i s th e highes t

ris k group , an di s define da s "material s that , whe n release di n th e confine s o f an aircraft , ca

n potentiall y hav e acatastrophi c effec t o n a n aircraft' s ability t o continu e saf e flight, resultin g i n acras h or

emergenc y landin g causin g injur y o r death t o passenger s an d flighicrcw , a s wel l a s person s o n th e ground. " FA

A Order No . 2150.3A , App . 6 , pag e 18 . Violation s involvin g Category A material s warran t maximu mweight , unde r

th e guidelines . Id . Th e guideline s state : "I f

there i s mor e tha

n on e typ e o f

ha z mat involve di n th e shipment , answer

thi s questio n usin g th e ha z ma t i n th e highes t

ris k category. " VA

A Orde r No . 2150. 3 A , App . 6 , p . 6 . Th e guideline s further provid e that

" ashipmen t

o f a singl e packag e containin g severa l different hazardou s material s [a s i n th e instan t case ] ma y presen t a n aggravatin g factor. " FAA Order No . 2150.3A , App . 6 , p . 9 . There were man y type s o f hazardou s material s shippe di n thi s cas e includin g som e item s that

belonge di n Category A . 2 . Wer e ther e multipl e package s i n the shipment ? Th e guidanc e indicate s that a moderat e or

maximu mweight

shoul db e considere di f

th e answe r

i s yes , dependin g on th e number

o f package s an dtota l amoun t o f hazardou s material . Thre e boxe s wereyo/^'t/^ui u ib:t n i-AX 202493514 2 PA A '^'^ * DM S @!011/02 3 

### shipped . 3 . Di dsomeon e othe r

tha n the violato r

prepar e th e shipment

fo r transportation ? Accordin g t o th e guidance , whe n someon e other tha n th e violato r

prepare dth e shipment , aminimu mt o moderat e weigh t i s considered . Th e pro p master packe dth e boxes . 4 . Di dth e violato r

reasonabl y rel y o n incorrec t informatio n fro manothe r source ? A s explaine di n th e guidance , "detrimenta l o r reasonabl e relianc e on anothe r part y ma y b e amitigatin g factor whe n considerin g th e violator' s degre e o f culpability. " Th e pro p maste r

assure dBachma

n tha t ih c hazardou s material s ha dbee n removed . Whether i t was reasonabl e fo

r Bachman t o rel y upo n thi s representatio n i s discusse din sectio n D , entitle d"Final Aggregat e Weight, " o f thi s analysis . O . Fina l Aggregat e Weigh t Th e guideline s requir e on e t o weig h th e answer s t o th e question s discusse dabov e andthe n t o determin e th e fma l aggregat e weigh t

o f th e case , whethe r

minimum , moderate , o r

maximum . Accordin g t o th e guidelines : Generally , i f

th e answer

to aparticula

r questio n demonstrate s th e facto r a t issu e represent s amore significant aspec t of acase , greate r

consideratio n shoul db e give n t o tha i answer . Fo r example , violation s involvin g a n extremel y dangerou s substance , eve n in minut e quantities , migh t warran t a penalty a t th e maximu mendo f

th e rang e o r

even apenalty exceedin g th e matri x range.,. . It

i s possibl e tha

t asingl e weightin g facto r

ma y outweig h al l others . FAA Orde r

No . 2150.3A , App . 6 , p . 9 . Tate offere dthre e boxe s to UP S for shipment , an dthes e thre e boxe s containe dmany hazardou s materials , mostl y flammable an dextremel y flammable items , a s wel l a s abutan e lighter . Consideratio n o f thes e factors , in isolation , woul dresul t

in th e impositio n o f

amaximu mweigh t

civi l penalty . 1 0OG/24/201 0 1G:0 1 FAX 202493514 2 FA A* DMS 0012/02 3



### However , Caldwel l - no t

aTat e employe e ~ packe dth e boxes , an dCaldwel l prepare dth e incomplet e list s containin g inadequat e description s o f th e contents . Th e list s di dno t includ e th e mos t

hazardou s items . Some o f th e description s o f

item s o n th e list s wer e ambiguous . Fo r

example , "glues " an d"butyl " coul dhav e describe dprohibite d hazardou s item s o r

coul dhav e describe dnonhazardou s item s that are permitte do n board aircraft . Further , th e evidenc e indicate dtha t Bacher di das k whethe r th e hazardou s material s ha dbee n remove dandwa s tol db y th e pro p maste r that Ihc y ha dbeen . Hence , while , a s th e AL

J found , Tate i s liabl e fo

r knowingl y violatin g th e regulations , Tate i s no t a s culpable a s i t

woul dhav e bee n if

on e o f it s employee s hadpacke dth e many different hazardou s items , includin g th e lighte r an dth e many product s tha i ha dwarnin g label s o n them . Thus , rather

tha n assignin g amaximu mfinal aggregat e weigh t for sanctio n purpose s t o thes e violations , amoderat e aggregat e weigh t woul db e mor e appropriate . E . Matri x Th e riexi ste p i s t

o us e th e matri x i n th e guidelines . FA A Order No . 2150.3A , ''^PP- 6 , p - 9 . l"h

e matri x contain s sanctio n range s for diilcrcn t type s o f violation s b y (a ) a n individual ; (b ) abusines s entity ; (c ) abusines s entity tha t use s o r handles hazardou s material s i n th e cours e o f business ; and(d ) abusines s entity that regularl y offers , accepts , or

transport s hazardou s materials . Tat e fall s withi n th e categor y o f "Busines s Lntity. " Th e sanctio n range s fo r a"busines s entity " arc lowe r tha n th e range s fo r th e other tw o busines s categories . Th e matri x indicate s that

$1,50 0 - $7,50 0 i s th e appropriate civi l penalty rang e fo r

1 1OG/24/201 0 1G:0 1 FAX 202493514 2 FA A^ DMS 0013/02 3

eac h categor y o f

offense' * b y abusines s entit y involvin g undeclare dshipment s withi n th e quantit y limitations. " FA A Orde r No . 2150.3A , App . 6 , p . 14 . On e ca n deduc e tha t th e moderat e portio n o f

th e rang e woul db e $3,30 0 - $5,50 0 fo r eac h offens e category . Tate' s offense s involve dth e lac k of : (1 ) shippin g papers ; (2 ) labels ; (3 ) markings ; (4 ) prope r packaging ; (5 ) employe e training ; an d(6 ) emergenc y respons e information . Applyin g amoderat e final aggregat e weight , a n appropriat e civi l penalt y fo r th e si x violation s unde r th e matri x guidanc e woul db e betwee n $19,80 0 an d$33,000 . In ligh t o f th e fac t tha t Tal c di dno t

pac k th e boxes , tlia t

th e packin g list s wer e incomplet e an dth e ambiguit y o f

th e description s ofth c liste ditem s tha t th e inspecto r

sai dcoul dhav e bee n hazardous , asanctio n a t th e lowe r

en do f th e moderat e rang e i s appropriate . A $20,00 0 civi l penalt y i s sufficien t i n hgh t o f al l o f th e factor s involve di n thi s case.' " Tat e argue s tha t

it s lac k o f hazardou s material s experienc e shoul dresul t i n a lowe r penalty . " Th e $20,00 0 civi l penalt y adequatel y take s Tate' s lac k o f experienc e

" Th e guidanc e set s fort

h eigh t offens e categoric; : (1 ) "Shippin g Papers; " (2 ) "Labels; " (3 ) "Markings; " (4 ) "Packaging; " (5 ) "Training; " (6 ) "Emerg . Response" ; (7 ) "Releas e int o Environ.; " an d(8 ) "Other. "

" Th e FA A believe dthat

becaus e ther e wii s aforbidde n materia l (th e butan e lighter ) i n th e shipment , th e offense s fell i n th e categor

y o f "Undeclare d.ihipmeni s forbidde n on or exceedin g quantit y limitation s fo

r al l aircraft. " Bu t

th e FAA ha s state dtha t

fo r purpose s o f

determinin g th e civi l penalt

y t o propos e in thi s case , i t decide dl o us e th e comparativel y les s seriou s category o f "Undeclare dshipmen t

withi n quantity limitations, " which carrie s lowe r penaliic.<! , becaus e o f

th e smal l siz e o f

Tate' s company . (Repl y Brie f a t 14. ) Ih e Administrato r

wil l no t second-gues s thi s exercis e o f

prosecutoria l discrelio n i n di e respondent' s favor . " Th e case s relie do

n b y Tat e ar e no t

sulticientl y analogou s s o a s t o provid e persuasiv e guidanc e on th e amoun t

o f th e penalty i

n thi s case . I

t i s ver y difficult t o compar e on e cas e t o anothe r for th e purpos e o f

determinin g whethe r

th e assesse dpenalty i s impermissibl y disproportionate . No t onl y are suc h comparison s difficult becaus e o f

factua l differences , acertai n amoun t o f disparity i s th e inevitabl e resul t

of th e exercis e o f

prosecutorial discretion . Se e infr aat p . 14 . " Also , th e ALJ too k

thi s factor

Tate' s lack

o f experienc e wit

h hazardou s material s int o accoun t in arrivin g a

t th e $25,00 0 civi l penalty . He rejecte dth e $30,00 0 civi l penalt y sough t b y th e FA A andassesse da$25,00 0 civi l penalty insteadbecause , i n hi s view , th e FAA di dno t conside r 1 2OG/24/201 0 16:0 1 FAX 202493514 2 FA A+ DMS 0014/02 3



### int o accoun t

becaus e i t

i s base dupo n th e matri x sanctio n range s appropriat e for a busines s entity , rather

tha n th e highe r

sanctio n range s fo

r violation s by abusines s tha t use s o r handle s hazardou s material s i n ih c cours e of business^ " or

abusines s tha t regularl y offers , accept s o f transport s hazardotu s materials.^ ' Tat e argue s that

th e civi l penalty shoul db e lowere ddu e t o it s history o f n o violations . A s many pas t case s hav e stated , "[a ] violation-fre e history i s considere dth e norman ddoe s no t

lea dt o areductio n in a

n otherwis e appropriat e civi l penalty. " See , ^•S- , ICI , FA A Order

No . 1992-7 7 at

2 0 (December

22 , 1992) . I f

Tal e ha dcommitte d violation s previously , tli e civi l penalty woul dhav e bee n higher . Tate argue s that

it ha s take n "aggressive " step s t o revis e it s policie s andeducate it s worklbrcc. Whil e .swif t correctiv e actio n can b e amitigatin g factor , dependin g o n th e circumstances , Tate' s offic e manage r testifie dtha t

th e company' s hazardou s material s polic y afte

r th e incident

(Tat e Exhibi t

8 ) wa s essentiall y th e sam e a s before th e incident . (Tr . 118. ) Tate' s offic e manage r furthe r testifie dtha

t althoug h sh e ha s n o hazardou s material s training , sh e wrot e th e polic y guidelines . Further , sh e testified , Tat e simpl y gav e th e guideline s t o it s employee s an dfreelanc e producers , bu t di dno t requir e the mt o sig n anythin g t o indicat e tha t the y ha drea dan dunderstoo dth e guidelines . (Tr . 122-23. ) •Jhes e step s are no t

"aggressive, " an dFA A Special Agent Hanso n testifie dthat

the y adequatel y that

Tate normall y di dnot

shi p hazardou s material s andwa s unfamilia r wit h th e hazardou s material s regulations , ^ ^ Under th e matrix , th e sanctio n rang e for eac h offens e category involvin g a n undeclare d shipmen t withi n th e FIMR' s quantity limitalion s b y abusines s entit y that use s o r handle s hazardou s material s in the cours e o f busines s i s $2,50 0 t o 10,000 . " Unde r th e malrix , th e sanctio n rang e for eac h offens e categor

y involvin g a

n undeclare d shipmen t withi n th e HMR' s quantity limitalion. s b y abusines s entit y tha t regularl y offers , accepts , o r

transport s hazardou s material s i s $10,00 0 t o 27,500 . 1 3OG/24/201 0 16:0 1 FAX 202493514 2 FA A ^ DM S 0015/02 3



### woul dno t preven t aSimila r inciden t i n th e future . (Tr . 125. ) Tat e ha s pointe dt o nothin g i n th e recordthat

woul dcas t

doub t o n th e ALJ' s finding that Tate' s ne w polic y guideline s hav e littl e valu e becaus e tlie y d o no t mandate trainin g andlac k a n enforcement mechanism . For

thes e reasons , th e AL

J di dno t er r in findin g that

Tate' s revise d guideline s wer e no t

amitigatin g factor . F . Preceden t Tate argue s iha

t th e sanctio n i s grossl y excessiv e whe n compare dwith pas t hazardou s material s cases . Pas t case s hav e state dtha t

"i t i s oltc n difficult

t o compar e sanction s acros s case s becaus e ther e ar e s o many variable s involve di n eac h case. " AJik a Aviation . Inc. . FAA Orde r No . 1999-1 4 at

1 2 n.2 0 (December

22,1999) , quotin g Pacifi c Aviatio n hitcrnational . FA A Orde r No . 1997- 8 a

t 7 (Fcbniary 20 , 1997) . A s tim e ha s passed , however , i t ha s become apparen t

that comparin g sanction s acros s case s i s no t

jus t difficult , bu t

i t i s tmworkable . Ther e are simpl y to o many variable s i n eac h case . N o tw o case s are alike whe n i t come s to al l th e relevan t

statutory factor s t o consider , wliic h include : th e nature , circumstances , extent , an dgravit y ofth c violation ; th e violator' s degre e o f culpability ; any history o f prio r violations ; th e abilit

y t o pay ; an y effec t o n th e ability to d o business ; an dan y other matter s that

justic e may require.'' ' Ther e i s acatchal l phras e at th e en doflh e cite dpassag e whic h is : "an dan y othe r matter s that justic e may require. " I

t include s correctiv e acfio n unde r th e sanctio n guidanc e and cas e law . Als o fallin g withi n th e catchal l i s th e maximu msanctio n amoun t i n effec t a t th e time . Congres s sometime s raise s th e maximu mcivi l penalt y fo r certai n violations . Thus , th e maximu mcivi l penalty i n on e cas e ma y b e $10,000 , an dth e on e unde r

^' ^ Se e supr aat

p . 7 . 

### 1 406/24/201 0 1G:0 1 FAX 202493514 2 FA A + DMS 0O1G/O2 3

consideratio n ma y b e $25,000 . Fo r thes e reasons , absen t

extraordinar y circumstances , relianc e o n pas t sanction s wil l no t b e ground s fo r

reducin g sanction s tha t fal l withi n th e parameter s se t b y th e sanctio n guidance . Thus , Tate' s argumen t base do n pas t

case s tha t

th e sanctio n i s to o high , i n thi s cas e i n whic h Tat e wa s assesse dasanctio n belo w tha t i n th e sanctio n guidance , fails . IV . CoDclusio D Tate' s appea l i s grante di n part . A $20,00 0 civi l penalt y i s assessed.^ ^ L ^ . RANDOLP H BABBIT T ADMINISTRATO R Federa l Aviatio n Administratio n

^ ^ Thi s decisio n shal l b e considere da n orde r assessin g civi l penall y unles s Responden t file.i a petitio n for

revie w withi n 60 day s o f servic e o f

thi s decisio n wit

h th e U.S . Court

o f Appeal s fo

r th e Di.'Jtric

t o f Columbi aCircui t

o r th e U.S . court

o f appeal s for

th e circui t

i n whic h th e responden t

reside s o r

ha s it s principal plac e o f

business . 1 4 C.F.R . § § 13.16(d)(4) , 13.233([j)(2) , 13-235 . Se e 7 1 Fed . Reg . 7046 0 (Decembe r 5 , 2006 ) (regardin g petition s fo r revie w o f

fina l agenc y decisions i

n civi l penalt

y cases) . 1 506/24/201 0 16:0 2 FA X 202493514 2 FA A * DM S 0017/02 3 

# 5n n 5' » SERVE D DE C I 2 280 5 UNITE D STATE S DEPARTMEN T O FTRANSPORTATIOl^j: I OFFIC E OFHEARING S V- ' WASFUNGTON, V C . i^. » X I ••" • FEDERA L AVIATIO N ADMINISTRATION .

Complainant , V . TAT E AN D PARTNERS, '

Respondent . FA A DOCKE T NO . CP04SO001 4 (Civi l PenaltyAction )

DM S NO . FAA-2004-1776 4 "" ! 

# > c INITIA L DECISIO N O F ADMINISTRATIV E LA W JUDG E RICHAR D C . GOODWI N Found : 1 ) Kesponden t

violate dth e section s o f 4 9 CJJ t

liste di n th e pamgnp h WOTT ; an d 2 ) Responden t

I s Uabi e t o an di s hereb y assesse daclv H penalt y o f S25,000 . J . Backgronn d Tat e an d Partner s (hereinafte r"Tate " o r"Respondent" ) ha s stipulate d tha t o n Augus t 7 , 2000 , i t offere d a n undeclare d shipmen t o f thre e boxe s o f hazardou s material s t o Unite d Parce l Servic e ("UPS" ) fo rtransportatio n b yair. ^ I n thi s actio n th e Federa l Aviatio n Administratio n (hereinafte r"Complainant. " "FAA. " o r"th e agency" ) charge s tha t Tat e "knowingly " offere d th e shipmen t t o UP S i n violatio n o f th e followin g twenty-on e section s o rsubsection s o f th e Hazardou s Material s Regulation s ("HT^/IRs") , 4 9 CF R §§17 1 etseq. , 171.2(a) . 172.200(a) , 172.202(a)(1-5) , 172.204(a) , 172.204(c)(1-3) . 172.300(a) , 172.301(a) , 172.312(a)(2) . 172.400 , 172.400(a) , 172.404(a) , 172.600(c) , 172.702(a) , 173.1(b) , an d 173.201 . T^^ e provision s involv e mainl ylabeling , packaging , an d trainin g requirements .

' Th e matte

r was originBll

y captione d"Lili t

Karapeda n Tate an dPaiinars, " but

Respondent' s firs t

amended complaint , daiedJanuar

y 18.2005 . rftmow d"Lili t Karapedan " and1 adopte dA e current caption . * Respondent' s Tria

l Brie t filedMa y 13 . 200 5 (hereinafte

r "Trial Brief) , PP

- 2-4 ; Tr . 6 , lO-H , 50 . "Undeclared " mean s iha

t th e shipment

containe dD

O YrHmin g o r notic e o f th e hazardou s natur

e o f it s contents , Midtaw n Neo

n Sign Corporation . FA

A Orde r No . 96-2 6 (Augus t

13,1996) , p . 2 . ^ Th e partie s stipulatedspecifically that th e shiprocnt

containe dhazardou s matoriBl s and/or dangerou s good s and (a ) wa s i»o t accompaniedb y aShipper' s CeniScatio n o r Declaratio n o f

Dangerou s Good s o

r an y othe r shippin g pape n require db

y la w o r regulatio n fo

r th e shipment

o f dangerou s goods ; (b ) di dno t posses s th e oute

r containe r marking s an dlabelin | require db y la w or regulationfor

th e shipment

of dangerou s goods ; (c ) was mo l contained i n authorize dcombination packagin g require dby la w o r legulario n IL

r the shipment

o f dangerou s j^s ; an

d(d ) wa s no t accompanie db

y that emergenc y respons e infonnaiiDn requir J b y la w o r regulatio n fo

r the shipmen

t o f dangerou s goods . Tria

l Brief , pp . 3-4 , Tr . 11 .Oe/24/201 0 16:0 2 FAX 202493514 2 FA A• > DMS 0018/02 3

Tat e denie s lega l responsibilit yfo rth e shipment . Eve n i f th e violation s occurred , i t states , the ywer e committe d "unknowingly " (Tria l Brief , p . 2) . Thu s th e Issu e i s joined . FA A seek s a civi l penalt yunde r4 9 U.S.C . §5123(a ) an d 4 9 CF R §107,32 9 o f $30,000 . Reeportden t counter s tha t eve n i f i t i s foun d liable , th e propose d fin e i s disproportionat e t o th e transgressio n (Tr . 78) . A hearin g wa s hel d or . Ma y16 , 2005 , i n Gardena . CA . I detenrtine d tha t a writte n decisio n wa s reasonabl e an d mos t appropriat e unde rth e circumstance s (Tr . 16) , Th e partie s submitte d brief s an d th e cas e i s no w read yfo rdecision . W e hol d Tat e i n violatio n o f th e cite d HMR s an d se t a civi l penalt yo f $25,000 . 

### II , Fact s an dConclugJon s Tate , a corporatio n base d i n Sant a Monica , CA , i s a four-perso n commercia l productio n company ; tha t is , i t make s televisio n commercial s fo radvertisin g agencie s (Tr . 93-94,114) . Sometim e prio rt o Augus t 7 , 2000 , i t wa s hire d t o shoo t a Molso n bee rcommercia l i n Toront o (Tr . 96) . Tat e di d no t hav e a directo ro n staff , s o i t hire d on e fo rth e shoo t - a practic e commo n i n th e Industry . Th e director , i n turn , hire d a prc) p manager , Damo n Cardwel l (Tr . 96-97) . A pro p manager , o rpropmaster , supplie s prop s fo ra se t (Tr . 95) . Cardwell , lik e Tate , i s base d i n th e Lo s Angele s are a (Tr . 117) . H e aske d Tat e t o shi p t o Toront o thre e boxe s o f material s h e neede d fo rth e shoo t Cardwel l assure d Tat e productio n manage rHug h Bacher , wh o processe d th e shipment , tha t an yhazardou s material s ha d bee n remove d firom th e shipmen t an d tha t non e o f th e boxe s containe d anythin g unsuitabl e fo rtransportatio n b yair(Tr . 98 , 110 , 120-21 ; RX-7) . Cardwell' s statemen t prove d incorrec t O n o rabou t Augus t 7 , 2000 , Bache rtendere d th e boxe s t o UPS, * Non e containe d an yindicatio n tha t hazardou s material s wer e inside . Bu t UP S employee s a t it s sor t facilit yi n Louisville , K Y learne d o f th e content s (Tr , 33) . The yfoun d hazardou s material s i n eac h box , uncoverin g dozen s o f hazardou s item s altogether. ^ Th e carrie rnotifie d FA A specia l agen t Danie l Wah l (Tr . 20) . UP S unpacke d th e boxe s an d provide d a handwritte n lis t o f th e dangerou s good s t o agen t Wah l (Tr . 20 - 22 , 33 , 40 ; GX-5) .

* Tr . 99-100 . Bache r

sigoe dth e nam e o f

Lili t Karapetia n t o eac hbo x a s th e offeror . Tr . 99» 1 DO ; se s GX-6 , pp . 1 , 3 , an d5 . Karapeda n (no w Lili t Shaghoian ) wa s th e Tat e employe e wh o normall y shippe ditem s oc . th e company' s behal f

an dwa s programme da s Respondent' s defaul t contact . Tr . 83 , 85,87-89 , 91 . 100 . Ms . ICaropctian heisclfwa s unavailabl e a t th e time , bein g ou t

o f th e country . Tr . SO-83 . ' Ih e lis t o f th e shipment' s hazardou s i/iaterials , se t ou t i n Paragrap h6 o f

th e agency' s Complaint , i s reproduce d i n th e Appendi x l o thi s Initia l Decisio n (hereinafte r "l.D.") -OG/24/201 0 1G:0 2 FAX 202493514 2 FA A^ DMS 0019/02 3

• ! I Liabilit yattache s unde rth e penalt ystatute , 4 9 U.S.C . §6123(a)(1) , t o a perso n I (includin g a partnershi p o rcorporation ) wh o "knowingl yviolates ' a n HMR . A perso n I act s knowingl ywhen : I (A ) th e perso n ha s actua l knowledg e o f th e j fact s givin g ris e t o th e violation ; o r I (B ) areasonabl e perso n actin g i n th e circumstance s an dexercisin g reasonabl e car e woul dhav e tha t knowledge . M Th e circumstance s demonstrate , I find, tha t Tat e shoul d hav e know n tha t th e

boxe s containe d hazardou s materials . Thu s Responden t i s liabl e unde r §5123(a)(1)(B) , Whe n th e propmaster , Carelwell . tendere d th e thre e boxe s fo rshippin g t o Tat e productio n manage rBacher , h e gav e Bache rthre e handwritte n list s representin g th e Item s purportedl yinsid e eac h o f th e boxe s (Tr . 99,100 , 111 ; GX-6 , pp , 2 , 4 . an d 6) . Mos t o f th e Item s o n eac h lis t wer e innocuous . Bu t som e shouk i hav e raise d suspicio n abou t thei rnatur e an d suitabilit yfo rshipping . Th e name s o rdescription s o f thes e item s shoul d hav e alerte d a perso n exercisin g reasonabl e car e t o thei rpossibl y hazardou s character . Amon g th e latte rwer e 'glu e sticks " (GX-6 . p . 2 ; Tr . 24 . 34) , "butyl, " "glues. ' "Supe rGlue " (GX-6 , p . 4 ; Tr . 24 , 35) , ari d "glycerine " (GX-6 . p . 6 ; Tr . 24 , 36) . Supe rGlue , a bran d o f glue . I s i n fac t considere d a hazardou s materia l (Tr . 24, " 36) . Th e othe rdescription s ar e genera l categorie s unde rwhic h certai n item s constitut e hazanJou s material s an d other s d o no t (se © Tr . 34-36) . Som e type s o f butyl , fo rexample , ar e liste d a s hazandou s substance s I n th e HMR s (Tr , 24 , 41) . Th e salien t poin t i s tha t th e list s shoul d hav e pu t a reasonabl e perso n o n notic e o f th e possibilit yo f th e presenc e o f hazardou s materials . Bache rreviewe d th e lists. ' H e di d no t kno w wha t coul d o rcoul d no t b e shippe d o rwhethe ran yo f th e item s constrtute d hazardou s material s (Tr , 98,102) . H e ha d ha d n o trainin g i n hazanJou s material s shippin g (Tr . 110-11) . Bache rfelled t o loo k insid e an yo f th e boxes . Althoug h the ywer e sealed , th e evidenc e show s tha t h e mad e n o reques t o reffor t t o ope n the m (Tr . 100-02,111) . Ye t h e wa s awar e o f th e possibilit ytha t hazardou s material s coul d be , an d ma yhav e been , a par t o f thi s shipmen t Th e lin e produce ro n th e shoo t tol d Bache rtha t sh e ha d reminde d Cardwell , th e propmaster , t o remov e hazardou s material s prio rt o tenderin g th e boxe s t o Bache r(Tr , 98 , 109-110) . Th e topi c o f hazmat s als o cam e u p i n conversatio n betwee n Bache ran d Cardwell , a s w e hav e note d (I.D. , p . 2) . Agains t thi s background , th e fiv e item s note d o n th e list s shou W hav e prompte d a reasonabl e individua l t o mak e furthe rinquir y(Tr . 24 , 34-35) . Th e la w charge s Bache ri n thi s situatio n wit h th e dut yo f reasonabl e inquir yand , further , wit h th e knowledg e tha t reasoriabl e inquirywoul d hav e produced .

* Tr . 101 . Thes e list s ar e differen t an dles s comprehensiv e tha n th e dangeroui-good s list s prepare db y UP S an d tome dove r

t o agen t Wahl , Tr . 36-38,40 ,OG/24/201 0 1G:0 2 FAX 202493514 2 FA A ^ DMS @l020/02 3

W e hol d tha t Bacher , i n th e prope rexercis e o f hi s duty , woul d hav e teamed o f th e existenc e o f th e hazardou s material s late rfoun d i n th e shipmen t Thu s h e i s charge d wit h tha t knowledge . An d Tat e i s liabl e throug h Bacher . Bacher , o f course , wa s a Tat e employee . Ther e i s n o questfo n tha t h e wa s actin g withi n th e scop e o f hi s employmen t (Tr . 94) . Employer s ar e responsibl e fo rhazardous-material s violation s committe d b ythei rempk>yees . Riverdal B Mill s Corporstion , FA AOrde rN o 2003-1 0 (Septembe r12 , 2003) . I fin d an d conclud e tha t Complainan t showe d b ya preponderanc e o f th e evidenc e tha t Tat e "knowingl yoffered ' th e shipmen t i n questio n becaus e i n th e exercis e o f reasonabl e car e i t woul d hav e know n o f tii e content s o f th e shipment . Se e Interstat e Chsmica l Company , Inc. , FA A Orde rNo , 2002-2 9 (Decembe r6 , 2002) , p . 14 . Constructiv e knowledg e o f th e act s constitutin g violation s i s al l tha t i s require d fo rliabilit yunde rth e Hazardou s Material s Unifor m Safet yAct . Scot t H . SmalHng , FA A Orde rNo . 94-3 1 (Octobe r5 , 1994) , p . 7 , n . 8 . Tat e thu s i s liabl e fo r th e violation s se t ou t i n th e Complaint ^ II L Penall y I wil l asses s a civi l penalt yagains t Tat e an d Partner s o f $25,000 . Complainan t ask s fo ra civi l penalt yo f $30,000 . I t bear s th e burde n o f provin g th e appropriatenes s o f thi s amoun t b ya preponderanc e o f th e evidence . Phillip s Buildin g Supply , FA A Orde rNo . 2000-2 0 (Augus t 11 , 2000) . p . 8 . I n detemiinin g th e amoun t o f th e penalty , th e decisionmake rmus t conside r "th e nature , circumstances , extent , an d gravit yo f th e violation, " and , wit h respec t t o th e violator , "th e degre e o f culpability , an yhistor yo f prio rviolations , th e abilit yt o pay , an d an yeffec t o n th e abilit yt o continu e t o d o business; * an d "othe rmatter s tha t justic e requires " (4 9 U.S. C §5123(c)) . Specia l Agen t Donal d Hanso n testifie d tha t th e FAA' s recommendatio n wa s grounde d o n th e numbe ro f product s uncovere d an d thei rcompatibilit ywit h eac h othe ran d wit h othe rproduct s (Tr . 65) . A s th e Appendi xshows , th e shipmen t containe d a lon g lis t o f undeclare d items . Shippin g an yundeclare d dangerou s goo d unacceptabl ycompromise s th e safet yo f fligh t Th e Administrato rha s emphasize d tha t "undeclare d shipment s o f hazardou s material s pos e a specia l risk " (see , e.g. , Interstat e Chemica l Company , Inc. , FA AOrde rNo . 2002-2 9 (Decembe r6 , 2002) , p . 16) , Safet yissue s fo ral l thos e wh o ma yb e affecte d b ysuc h item s - handlers , passengers , an d cre w - ar e particularl yacut e sinc e hazardou s material s b ythei rver y natur e carr ysignifican t risks o f danger . Som e o f th e material s i n thi s shipmen t wer e labele d flammable , an d eve n "extremel yflammable ' (Tr . 28 , 29 ; see , e.g. , Exh . GX-7 ,

' Complainan t

als o ai^ue dtha t

Tat e i s liabl e o n th e giouo dtha t Cardwel l wa s fiinctionall y it s employe e o r agen t in connectio n •wit

h th e shoot . Post-Hearin g Brie f o f Closin g Argument , pp . 7-8 , Responden t countere dtha t Cardwel l wa s an independen t contractor . T r

76 ; Respondent' s Pojt-Hcarin g Closin g Argumen t an dBrief

, p . 2 . I n vie w o f

m y decision , I d o no t

reac h thi s issue . I hav e considere dal l o*e r argument s an drejec t

the ma s withou t

meri tOG/24/201 0 1G;0 2 FAX 202493514 2 FA A* DMS 1021/02 3

pp . 18 , 19) . Agen t Hanso n adde d tha t unmarked , unlabele d boxe s suc h a s tlies e ar e generall yloade d nex t t o othe rpassenge ran d carg o items . A fir e o rexplosio n i n th e mids t o f severa l differen t type s o f shipment s increase s th e likelihoo d o f catastroph e (Tr . 55) . Thes e circumstance s warran t a substantia l fine . Mitigation , however , i s suggeste d b yth e fac t tha t Tat e neithe ri s i n th e busines s o f handlin g hazardou s material s no rdoe s i t normall yshi p the m inciden t t o it s business . Tat e indee d ship s - bu t item s i n furtheranc e o f It s commercia l productio n activities , suc h a s tapes , video , an d relate d document s (Tr . 104 , 116 ; RX 7) . I t ha d neve rshippe d a ki t lik e thi s befor e (Tr . 105 , 116) . Indeed , i t neve rintende d t o shi p thes e item s (Tr . 126) . Good s terKlere d i n furtheranc e o f a shoot , moreover , normall yar e shippe d b yth e clien t o rar e obtaine d i n han d a t th e productio n local e (whic h i n thi s cas e wa s Toronto ) (RX-7 ; Tr . 117 , 120) , Unfamiliarit ywit h th e HMR s whic h i s reasonabl e unde rth e circumstance s ma yb e considere d i n determinin g a civi l penalt yassessment . 7"C / Corporation , FA A Orele rNo . 92-7 7 (Decembe r22 . 1992) , pp . 18 . 20 . Th e factor s describe d lea d m e t o conclud e tha t Tate' s unfamiliarit y wit h th e HMR s wa s reasonable . Complainan t i n it s penalt ysuggestion , I find , faile d t o giv e thi s facto rdu e consideration . I als o fin d tha t n o othe rmitigatin g factor s ar e present ' I n weighin g al l relevan t issue s I fin d an d conclud e tha t a civi l penalt y assessmen t o f $25,00 0 I s warranted . I t fairi yaccount s fo rth e totalit yo f th e circumstance s o f th e cas e I n th e contex t o f th e statutor yfactor s (se e I.D. , p . 4) . Th e fin e ha s appropriat e "bite " a s well ; I conclud e tha t i t wil l suitabl ypromot e th e agency' s policie s o f complianc e an d deterrence . Tat e an d Partner s i s hereb yassesse d a civi l penalt yo f $25,00 0 fo rviolation s o f th e followin g HMRs : §§171.2(a) , 172.200(a) , 172.202(a)(1-5) , 172.204(a) , 172.204(c)(1-3) , 172.300(a) , 172.301(a) , 172.312(a)(2) , 172.400 , 172.400(a) , 172.404(a) . 172.600(c) , 172.702(a) , 173.1(b) , an d 173.201..' . Rich a n d C . 5oodv/i n ^\.l j Administrativ e La w Judg e Attachment s - Appendi x

Servic e Lis t

' Tal c profibre dwritte n shippin g guideline s i t ha s generate dfo r

freelancers an dit s ow n employees . Tr . 1 1 ft, 122 - 23 ; RX-8 . I agre e wit hspecia l agen t Hanson , however , tha t

th e guidelines , whic hd o no t mandat e trainin g an d hav e n o enforcemen t

mechanism , ar e wea k

an dcan y littl e value . Se e Tr . 125-27 , Therefor e I d o no t conside r th e guideline s amitigatin g factor . An y appea l fromth e Initia l Decisio n t o th e Administrato r mus t b e i n accotdonc e wit hsectio n 13.23 3 o f th e Rule s o f Practice , whic h require s 1 ) tha t anotic e o f

appea l b e file dn o late r tha n 1 0 day s (plu s a n additiona l 5 fo r mailing ) iror o th e dat e o f thi s orde r

an d2 ) tha t

th e appea l b e perfecte dwithawritte n brie f o r memorandu mno t late r tha n 5 0 day s (plu s 5 fo r mailing ) fromth e dat e o f thi s order . Eac hi s t o b e seo T t o th e Appellat e Docke t Clerk , Roo m924-A , Federa l Aviatio n Administration , 80 0 Independenc e Avenue , Wa-^ington , D C 20591 , an d t o ugcnc y counsel . Servic e upo n th e presidin g judg e i s optional .OG/24/201 0 1G:0 3 FA X 2024935U 2 ^^ ^ ^ QM S l^u-i^/^- -



### Appendi x Paragr^ h 6 o f

Sectio n I I of th e Complain

t list s th e following hazardou s material s and/or dangerou s good s foundi n th e thre e boxe s ofth c shipment under review :

• On e (] ) eleven-ounc e aeroso l containe r o f "Kiylo n Crysta l Clear

Acryli c Coatin g 1303 " labele d"Extremel y Flanunable " an d"Content s Unde r Pressure, "

• On e (1 ) 1 6 '/2-DTjnc

e aeroso l containe r

o f 3 M "Stape

r 7 7 Spra y Adhesive " labele d "Extremel y Flammable " an d"Content s Unde r Pressure, "

• Fou r (4 ) five-ounc e aeroso l container s o f "L e Brunusateu r

Evia n Ea u Mineral " labele d "Pressurize dContainer. "

• On e (1 ) sixteen-ounc e plasti c containe r o f "Reagen t

Alcohol " affixe dwit h aflammable liqui dlabel . • On e (1 ) l-wenty-five-oimc e plasti c containe r o f "Las t Rins e Sanitizer " labele d"Corrosiv e t o Eyes. "

• On e (1 ) sixteen-ounc e glas s containe r o f "Aqu aGel " labele dt o hav e aP h o f 2 . • On e (1 ) eleven-ounc e aeroso l containe r o f "Kiylo n Matt e Finis h Spra y Coatin g 1311 " labele d"Extremel y Flammable " an d"Can Pressurized. " » On e (1 ) eight-ounc e aeroso l container s o f "Streak s ' N Tips " labele d"Flammable " an d Content s Unde r

Pressure. "

• On e (1 ) seven-ounc e aeroso l containe r o f "Supe r 7 7 Spray Adhesive " labele d"Extremel y Flaminable " an d"Content s Unde r Pressure. "

• On e (1 ) five-ounce aeroso l containe r o f "L e Brumisateu r

Evia n Ea u Mineral " labele d "Pressurize dContainer. "

• Tw o (2 ) thirty-eight-gra mmeta l cylinder s o f "C0 2 Powe r

Clean " labele d"Carbo n Dioxid e Ga s / Non-Flammabl e Gas /

U N 101 3 /

ORM-D. " On e o f

th e container s wa s attache dt o a spra y nozzl e an dth e othe r wa s package di n asingl e fol dfiberboardcontainer , ' Tw o (2 ) "Magnu m4 4 Permanen t Markers " labele d"Combustible. "

• Tw o (2 ) "Marks-A-Lo t Permanen t

Markers " labele d"Flammable, "

• On e (1) 4 l4-ounc e meta l containe r o f "Goo f Of f labele d"Flammable. "O B ^ DM S '^"" ' /24/201 0 1B:0 3 FA X 2024935U 2 ^A A



### • On e (1 ) two-ounc e plasti c containe r o f "Zi p Kicke r

Accelerato r

fo r Supe r Glue " labele d "Flammable. "

• On e (1 ) three-ounc e glas s containe r o f "Weldwoo dContac t

Cement " labele d"Extremel y Flammable" . • On e (1 ) 100-millillite r

aeroso l containe r

o f "WD-40 " labele d"Flammable " an d "Pressurize dContainer" . • On e (1 ) four-ounc e meta l tub e o f "Liqui dNails " labele d"Extremel y Flammable" . • On e (1 ) butan e lighte r

labele d"Butan e Ga s Unde r Pressure " an d"Extremel y Flammable" . • Fou r (4 ) twelve-ounc e aeroso l container s o f "Krylo n Interior/Exterio r Pamt " labele d "Extremel y Flammable " an dContent s Unde r Pressure. "

• On e (1 ) twelve-ounc e aeroso l containe r o f "Krylo n Sandabl e Primer " labele d"Extremel y Flammable " an d"Content s Unde r Pressure. "

• On e (1 ) eleven-ounc e aeroso l containe r o f "Krylo n Crysta l Clear

Acryli c Coating " labele d "Extremel y Flammable " an d"Content s Unde r Pressure, "

• On e (I ) nine-ounc e aeroso l containe r o f "Studi o Hai r

Color " labele d"Extremel y Flammable. "

• On e (1 ) eight-ounc e aeroso l containe r o f "Streak s ' N Tips " labele d"Flammable " an d "Contente Under

Pressure. "

• On e (1 ) sixteen-ounc e meta l containe r o f "Bestin e Solven t

an dThinner " labele d "Extremel y Flammable, " » On e (1 ) sixteen-ounc e meta l containe r o f "Denature dAlcohol " labele d"Flammable " an d "Poison. "

• On e (1 ) eight-ounc e plasti c containe r o f "Go o Gone " labele d"Combustible, "

• On e (1 ) sixteen-ounc e plasti c containe r o f "Reagen t Alcohol " affixe dwith aflammable liqui dlabel . • On e (1 ) 9 Va-ounce aeroso l containe r o f "Spra y Moxm t Artist* s Adhesive " labele d "Extremel y Flammable " an dContent s Unde r Pressure. "