UNITED STATES DEPARTMENT OF TRANSPORTATION 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

In the Matter of: FROST AD ATELIER, INC. 

FAA Order No. 2013-5 

FDMS No. FAA-2011-02941 

Served: September 5, 2013 

DECISION AND ORDER2 

I. Introduction 

Complainant Federal Aviation Administration ("Complainant") has appealed the 

written initial decision of Administrative Law Judge ("ALJ") Richard C. Goodwin 

1 Materials filed in the FAA Hearing Docket (except for materials in security cases or 

materials under seal) are also available for viewing at the following Internet address: 

www. regulations. gov. 

In the instant case, the ALJ sealed most of the docket in an order dated August 10,2012. 

The ALJ explained that the sealed part of the docket "contain[ ed] non-segregable safety and 

security related information, the withholding of which from public disclosure [was] consistent 

with the safety and security responsibilities of the FAA." (Initial Decision at 8 n.9.) 

The ALJ wrote that his authority for 'sealing the docket was 14 C.F.R. Part 193 (entitled 

"Protection of Voluntarily Submitted Information") as well as 14 C.F.R. § 13.226(a) (authorizing 

an ALJ to order that any information inithe reco~d be withheld from public disclosure). (Initial 

Decision at 8 n.9.) The ALJ also stated. that withholding the sealed portion of the docket was in 

the public interest. (/d.) 

Subsequently, in his written initial decision, the ALJ wrote that the docket, including the 

post-hearing briefs, would remain sealed, for the reasons stated in his order sealing the docket. 

(Initial Decision at 8 n.9.) The ALJ, however, did not seal his written initial decision (a copy of 

which is attached), because, he wrote, nothing in it required withholding from public disclosure. 

The instant decision of the FAA decisionmaker, the Administrator, is not sealed for the 

same reason. 

2 The Administrator's civil penalty decisions, along with indexes of the decisions, the rules 

of practice, and other information, are available on the Internet atthe following address: 

www.faa.gov/about/office _ orglheadquarters _offices/age/pol_ adjudication/ AGC400/ 

Civil_Penalty. In addition, Thomson Reuters/West Publishing publishes Federal Aviation 

Decisions. Finally, the decisions are available through LEXIS (TRANS library) and WestLaw 

(FTRAN-FAA database). For additional information, see the Web site. 
assessing Respondent Frostad Atelier, 3 Inc. ("Respondent") a $5,000 civil penalty for 

violations of the Hazardous Material Regulations ("HMR"), 49 C.F.R. Parts 171-178.4 In 

its appeal brief, Complainant requests an increase in the civil penalty assessed by the ALJ 

to $37,500. This decision raises the civil penalty from $5,000 to $20,000. 

II. Facts 

Respondent is a small bronze casting foundry. (Exh. C-9;5 Tr. 208-209. 6

) 

3 "Frostad" is the owner's last name, while "Atelier" is from the French and means 

"workshop." See www.merriam-webster.com. 

4 Specifically, the ALJ found that Respondent violated the following regulations: 

49 C.F.R. §§ 171.2( e) (no person may offer a hazmat for transportation in commerce unless it is 

properly classed, described, packaged, labeled, and in condition for shipment), 172.200(a) 

(offeror ofhazmat must properly describe the hazmat on the shipping paper), 172.202(a)(l) 

(shipping paper must include the hazmat's identification number), 172.202(a)(2) (shipping paper 

must include the hazmat' s proper shipping name), 1 72.202( a)(3) (shipping paper must include the 

hazard class or division number), 172.202(a)(6) (shipping paper must include the total net mass 

per package), 172.202(a)(7) (shipping paper must include the number and type of packages), 

172.204(a) (offeror must certify that hazmat is offered according to this subchapter by printing 

one of two certifications) or (c)(!) (providing a certification that can be used in place of the 

certification required by (a)), 172.204( c)(2) (offeror for transportation by air must provide two 

copies of certification), 172.204( c )(3) (offeror must add to the required certification the statement 

"I declare that all of the applicable air transport requirements have been met"), 172.301 (a) 

(offeror of non-bulk packaging must mark the package with the proper shipping name and 

identification number), 172.600 (no person may offer a hazmat unless emergency response 

infonnation is immediately available for use at all times the hazmat is present and emergency 

response information, including the emergency telephone number, is immediately available to 

representative of a government agency responding to a hazmat incident or conducting an 

investigation involving a hazmat), 172.602(b )(3) (required information must be presented either 

(i) on a shipping paper; (ii) in another type of document that includes both the basic description 

and technical name of the hazardous material and the required emergency response information; 

or (iii) in a written notice to pilot-in-command or a dangerous cargo manifest), 172.604(a)(3) 

(offeror ofhazmat must provide an emergency response telephone number), and 173.1(b) 

(shipment of hazmat that is not prepared according to this subchapter may not be offered for 

transportation and each hazmat employer must ensure that each hazmat employee is trained 

according to this subchapter's requirements and persons who offer hazmat for transportation must 

instruct their officers, agents, and employees having any responsibility for preparing hazmat for 

shipment as to applicable regulations in this subchapter). 

The Appendix contains the text of these regulations. 

5 Exh. C-9 refers to Complainant's Exhibit 9. Similarly, Exh. R-1, R-2, etc. refer to 

Respondent's Exhibits. 

6 Tr. is used for citations to the transcript of the hearing. 

2 
Ms. Ronda ("Ronnie'') Frostad was an owner, operator, and employee of Respondent. 

(Jd.) Ms. Frostad testified that Respondent had "probably" six employees in 2010. 

(Tr. 251.) 

Respondent is located in McClellan, California, where Ms. Frostad sculpts and 

produces bronze art sculptures for artists. (!d.) Respondent ships the sculptures by truck 

to their destinations, and Ms. Frostad and a small crew travel by air to install the 

sculptures. (Exh. C-9.) Ms. Frostad testified that they apply chemicals to the sculptures 

with heat from a propane torch through a process called "patinization." (Tr. 212.) 

Ms. Frostad and her employees wear protective gear, including gloves and a chemical 

respirator, when performing this work. (Tr. 259, 261.) Some of her employees- in 

particular, welders- wear leather outerwear, goggles, and face masks. (Tr. 262.) 

Respondent orders chemicals from their manufacturers to use in its business. 

(Tr. 256-57.) The manufacturers enclose appropriate Material Safety Data Sheets 

("MSDS") with each of Respondent's orders. (Jd.) 

On May 29,2010, Ms. Frostad was returning from Springfield, Kentucky, where 

she and her crew of two employees had installed a sculpture of Abraham Lincoln at 

Springfield, Kentucky's new courthouse. (Jd.; Tr. 9, 11, 209.) Ms. Frostad and her crew 

were ticketed passengers on Southwest Airlines ("Southwest") Flight No. 2409, departing 

Louisville, Kentucky, for Sacramento, California, with an aircraft change in Chicago. 

(Tr. 10-11.) 

At the Louisville International Airport, Transportation Security Administration 

("TSA") agents searched a bag checked by Ms. Frostad. They found an undeclared 

shipment of hazardous materials: a clear plastic zip-type bag containing a 16.4-ounce 

3 
cylinder of propane and an 8-ounce spray can ofWD-40. (Exh. C-3, C-4, C-9.) The 

HMR classify both materials as hazardous. (Tr. 191.) There were no hazardous 

materials labels, markings, warnings, or other information required under the HMR on 

the bag. Respondent admitted that its employees had not taken the HMR-required 

training in the transport of hazardous materials by air. (Tr. 264.) 

Signs warning about the transportation of hazardous materials by air were 

displayed at the airport. There was a large poster at a line through which all passengers 

go. This sign warned passengers about the dangers of packing hazardous materials, 

including flammable liquids and aerosols, in their luggage. The sign advised passengers 

that "You must declare your hazardous materials to the airline," and warned that 

"Violators of the [HMR] may be subject to civil penalty of up to $110,000 for each 

violation and in appropriate cases, criminal penalty of up to 10 years imprisonment." 

(Tr. 43; Exh. C-1 at 2.) Additionally, there were warning signs at each airline ticket 

counter and in each baggage well. (Tr. 43, 44.) Ms. Frostad testified, however, that she 

did not see any of the hazardous materials signs. (Tr. 263, 264.) 

The proper shipping name for propane is "Liquid petroleum gas." (Tr. 165-170; 

Exh. C-7.) Propane's hazard class is 2.1 (flammable gas), and its identification number is 

UN 1075. The HMR prohibit shipments of propane on passenger aircraft. (Tr. 169; 

49 C.F.R. § 172.101, Table ofHazmat; and Exh. C-7 at 5.) The correct label for propane 

is "FLAMMABLE GAS." 

As for the WD-40, its proper shipping name is "Aerosols, flammable," its hazard 

class is 2.1 (flammable gas), and its identification number is UN 1950. ( 49 C.F.R. 

§ 172.101, Table ofl-Iazmat; Exh. C-6 at 3.) The correct label for the WD-40 is 

4 
"FLAMMABLE GAS." According to Complainant's witness, Pershameron Cartrice 

Dye, Manager of the FAA's Atlanta Hazmat Field Office (Tr. 125), WD-40 may be 

shipped by air under 49 C.P.R.§ 173.306 (entitled "Limited quantities of compressed 

gases") if the quantity does not exceed 4 fluid ounces per container, but Respondent 

offered a container filled with 8 fluid ounces ofWD-40 for shipment by air. (Tr. 162-

163.) 

Ms. Frostad testified at the hearing, and the ALI found that "she generally was a 

credible witness." (Initial Decision at 4.) Ms. Frostad testified that she did not pack the 

propane and WD-40 and did not know that they were in the bag until after these materials 

were discovered by the TSA agents. She further testified that one of her employees, who 

was unfamiliar with flying and afraid of flying, packed the propane and WD-40. 

(Tr. 213-27, 260; see also Exh. C-9 at 1.) Ms. Frostad testified that she never supervises 

her employees when they are packing the baggage. (Tr. 221.) 

Ms. Frostad further testified that she never travels with propane. (Tr. 215.) Her 

company policy was to purchase propane locally to avoid traveling with it. (!d.) As for 

the WD-40, Ms. Frostad denied ever using it outside of the foundry and was baffled as to 

why it was in her baggage. (Tr. 216, 226.) None of her employees told her that they 

were packing propane or WD-40. (Tr. 226.) 

III. ALJ's Decision 

After a hearing, the ALJ found that Complainant had sustained its burden of proof 

regarding the violations. The ALJ held that Respondent was responsible for the 

violations because: (1) the trip was on Respondent's behalf; (2) employers are liable for 

their employees' actions within the scope of employment; and (3) Respondent's 

5 
employee packed the hazardous materials as part of the completion of the job in 

Springfield. 

The ALI wrote that it was not necessary for Complainant to show that 

Respondent or its employee actually knew the contents of Ms. Frostad's luggage or the 

hazardous nature of the propane and WD-40. The ALI pointed out that under the Federal 

hazardous materials transportation statute, 7 any person, including any corporation, 8 who 

"knowingly" violates the statute or a regulation issued under the statute is subject to a 

civil penalty. 49 U.S.C. § 5123(a)(l); see also 14 C.F.R. § 13.16(c) (to the same etiect). 9 

The ALI stated that the evidence proved that Respondent had actual knowledge through 

an employee that it was ofiering the luggage containing the propane and WD-40 for air 

transport, and that such knowledge was sufficient to prove that Respondent had acted 

"knowingly." 

The ALI also wrote that the statute does not require knowledge of the law. 

Persons are liable even if they do not know that they are breaking the law, the ALJ wrote, 

citing Riverdale Mills Corp., FAA Order No. 2003-10 at 5 (September 12, 2003) and 

Smalling, FAA Order No. 94-31 at 7 (October 5, 1994). 

7 49 U.S.C. §§ 5101-5127. 

8 The definition of"person" in the HMR includes corporations and companies. 49 C.F.R. 

§ 171.8. 

9 Under the statute: 

A person acts knowingly when -

(A) the person has actual knowledge of the facts giving rise to the 

violation; or 

(B) a reasonable person acting in the circumstances and exercising 

reasonable care would have that knowledge. 

Jd.; see also 14 C.F.R. § 13.16(c)(l)-(3) (to the same effect). 

6 
The AU held that the various hazardous materials warning signs at the airport 

provided "ample warning" to passengers about the risks associated with travel with 

hazardous materials. The AU found it irrelevant that Ms. Frostad testified that she did 

not see the signs because there was no duty to warn. 

The AU held that the $37,500 civil penalty sought by Complainant was too high 

and that $5,000 was appropriate instead. The AU stated that there was only a single 

underlying act, even though Complainant argued that for sanction purposes there were 

five separate violation groupings (involving required shipping papers, marking, labeling, 

emergency response information, and training). (Initial Decision at 8.) The AU stated 

that the proposed civil penalty would do little to advance the agency's policies of 

compliance and deterrence for this Respondent because Respondent does not need to be 

educated or lectured about the dangers of hazardous materials. The AU wrote: 

On the contrary, it [Respondent] is well aware of the risks broadly 

associated with chemicals. The very nature of its business warrants and 

compels such an awareness. Ms. Frostad testified that the company uses 

over one hundred different chemicals in casting. Employees performing 

their duties often must wear protective clothing (Tr. 256-62). Ms. Frostad, 

Respondent's owner and president, also testified that her business 

customarily bans the transport of these materials for reasons she well 

understands. It additionally is noteworthy when determining the penalty 

that Ms. Frostad credibly asserted that she was unaware that the propane 

and WD-40 had been packed in the company's luggage. 

The AU also wrote that the proposed civil penalty was much greater than those 

that Complainant proposed in two other cases that the AU considered "roughly 

comparable": 

(1) Kaden, FAA Docket No. CP05NM0024, DMS No. FAA-2005-22081, in 

which Complainant requested a $3,750 civil penalty (but the ALJ assessed 

$3,000) for an attempted undeclared shipment of two items forbidden on 

passenger flights- two cylinders of liquefied petroleum gas (hazard 

class 2.1, flammable gases) and at least 25 "strike anywhere" matches 

7 
(hazard class 4.2, flammable solids). 

(2) Macaulay, Docket CP02S00029, DMS No. FAA-2002-12591, in which 

Complainant sought a civil penalty of $3,750 for violations concerning a 

shipment of three !-gallon cans of concrete sealer (hazard class 3, packing 

group III, flammable liquid). The violations involved shipping papers, 

marking, labeling, emergency response information, and packaging (the 

hazardous material leaked). 

The ALI stated that he viewed "with skepticism" the agency's request for a civil penalty 

10 times the amount sought in Kaden and Macaulay, especially when the purpose of the 

sanction guidance was to increase the consistency of sanctions in various cases. 

The ALI did not accept Respondent's affirmative defense that it could not afford 

to pay the $37,500 civil penalty sought by Complainant because, he held, Respondent's 

evidence regarding its financial circumstances was insufficient to prove financial 

hardship. He noted, in particular, that Respondent's tax returns (for years 2009 and 

2010) were not signed by an officer of the company. 

The ALI concluded by assessing a civil penalty of $5,000 for the violations 

alleged in the complaint. He explained that $5,000 was the minimum recommended by 

the FAA sanction guidance in hazardous materials cases for a business entity that 

committed one category of violations of the HMR. (Initial Decision at 9.) 

IV. Appeal 

Respondent has not appealed the finding of violations, but Complainant has 

appealed the sanction amount. On appeal, Complainant asks for an increase in the civil 

penalty from $5,000 to $37,500. 

In 2010, when the violations occurred, the Federal hazardous materials 

transportation statute provided that the maximum civil penalty was $50,000 per violation 

for violations not involving death, serious illness, severe injury, or substantial destruction 

8 
of property. 49 U.S.C. § 5123(a)(l) (2010). 10 The minimum civil penalty for the training 

violation was $450, while the minimum civil penalty for the other violations was $250 

per violation. 11 49 U.S.C. § 5123(a)(l ), (3). 

Under the statute, the Administrator12 must consider the following factors in 

setting the sanction amount: 

(I) the nature, circumstances, extent, and gravity of the violation; 

(2) with respect to the violator, the degree of culpability, any history of 

prior violations, the ability to pay, and any effect on the ability to 

continue to do business; and 

(3) other matters that justice requires. 

49 U.S.C. § 5123(c); see also 14 C.F.R. § 13.16(c) (to the same effect). 

The agency has issued sanction guidance to implement the statute. This guidance 

is found in FAA Order No. 2150.3B, "FAA Compliance and Enforcement Program," 

10 Before the 2005 Amendments to the statute, the maximum civil penalty was $25,000. 

The 2005 Amendments, Pub.L. 109-59, § 7120(a)(l), which became effective on August 10, 

2005, raised the maximum civil penalty to $50,000, except that in cases in which the violation 

results in death, serious illness, severe injury, or substantial destruction of property, the Secretary 

of Transportation could assess a civil penalty of$100,000 per violation. 

The maximum civil penalty for violations involving hazardous materials was raised again 

in 2012. The 2012 Amendments, Pub.L. 112-141, § 33010(1)(A), which became effective on 

October 1, 2012, raised the maximum civil penalty per violation to $75,000, except in cases of 

violations resulting in death, serious illness, severe injury, or substantial property destruction, 

when the Secretary could assess a civil penalty as high as $175,000 per violation. 

11 Congress has also provided for periodic adjustments for inflation, to maintain the 

deterrent effect of civil penalties and promote compliance with the law. 28 U .S.C. § 2461 (note), 

as amended by Public Law I 04-134 (April 26, 1996). Any applicable adjustments would be 

found in 14 C.F.R. Subpart H, entitled "Civil Monetary Penalty Inflation Adjustment." No such 

adjustments are present here. 

12 The FAA Administrator has the authority to enforce the statute and the HMR regarding 

the shipment of hazardous materials by air. 49 C.F.R. § 1.47U) ("[t]he Federal Aviation 

Administrator is delegated authority to: ... U)(l) ... carry out the functions vested in the Secretary 

by 49 U.S.C. § 5123 ... , with particular emphasis on the transportation or shipment of hazardous 

materials by air"). 

9 
Appendix C, "Sanction Guidance, Hazardous Materials Enforcement" (October 1, 

2007). 13 The sanction guidance "provides agency personnel with a systematic way to 

evaluate a case and arrive at an appropriate penalty, considering all the relevant statutory 

criteria, including mitigating and aggravating circmnstances, if any." FAA Order 

No. 2150.3B, Appx. C-2. The sanction guidance is "designed to promote better 

consistency so that similar penalties are imposed in similar cases." FAA Order 

No. 2150.3B, Appx. C-2. 14 

The sanction guidance requires agency personnel to do the following: 

(1) weigh the case by answering certain questions to arrive at a weight of 

minimum, moderate, or maximmn; 

(2) use the Matrix to find the appropriate sanction amount range; and 

(3) consider any other pertinent factors. 

FAA Order No. 2150.3B, Appx. C, ~~ 2, 8 (emphasis added). 

To determine the weight of the violations- whether minimmn, moderate, or 

maximum - the sanction guidance instructs agency personnel to consider a number of 

factors, including the nature of the hazardous material involved. Propane and WD-40 are 

each in hazard class 2.1 (flammable gas). (Tr. 160-162, 166, 167; Exh. C-6 at 3; Exh. C7 at 5.) Hazard class 2.1 materials fall within Risk Category "A," defined as: 

materials that when released in the confines of an aircraft can potentially 

have a catastrophic effect on the aircraft's ability to continue safe flight, 

resulting in a crash or emergency landing causing injury or death to 

13 The ALJ took judicial notice of this sanction guidance (Tr. 196), which was marked as 

Exh. C-1 0 but was not admitted. Presently, FAA Order No. 2150.38, Appx. C, is available on 

the FAA's Web site at http://www.faa.gov/regu1ations policies/orders notices/. 

The FAA published this sanction guidance in the Federal Register as "[FAA] Policy on 

Enforcement of the [HMR]: Penalty Guidelines," 64 Fed. Reg. 19443 (April21, 1999). 

14 "Appx. C-2" refers to FAA Order No. 2150.3B, Appx. C, p. C-2. 

10 
passengers and flight crew, as well as persons on the ground. 

(FAA Order No. 2150.3B, Appx. C, Figure C-2.) Risk Category "A" materials receive a 

maximum weight. 

Under the sanction guidance, the quantity of hazardous material is also 

considered. If the package exceeded the authorized quantity limitations by a significant 

amount, then, under the guidance, a moderate or maximum weight, depending on the 

degree to which the limitation was exceeded, should be considered. The quantity 

limitation for the WD-40, as a compressed gas" (see 49 C.F.R. § 173.306, "Limited 

quantities of compressed gases"), was 4 fluid ounces, but Respondent offered 8 fluid 

ounces for shipment. (Tr. 162-163.) 

The sanction guidance also recommends assigning a maximum weight if the 

package contained a forbidden material. (FAA Order No. 2150.3B, Appx. Cat C-6.) 

Because propane was forbidden on passenger aircraft, a maximum weight should be 

considered for the propane-related violations. (Id.) 

The hazardous materials sanction guidance includes recommended penalty ranges 

in a matrix for different categories of offenses, depending upon the violator's 

characteristics. The Matrix recommends the lowest sanction ranges for individuals, and 

higher penalty ranges for business entities. The Matrix recommends penalty ranges that 

are even higher for business entities that use or handle hazardous materials in their 

business. The weight of a particular violation determines whether a penalty at the 

bottom, middle, or top ofthe appropriate penalty range should be imposed. 

The offense categories are as follows: 

15 Hazard class 2 materials are "Compressed Gases." (FAA Order No. 2150.3B, Appx. C17.) 

11 
• Declared Shipment; 

• Undeclared16 Shipment within Hazmat Quantity Limitations; 

• Undeclared Shipment- Hazmat Forbidden on, or Exceeds Quantity Limits 

for, Passenger Aircraft; 

• Undeclared Shipment Forbidden on, or Exceeds Quantity Limits for, All 

Aircraft; 

• Intentional or Deliberate Violation, or Other Significant Aggravation; and 

• Violation Results in Death, Serious Illness, Severe Injury, or Substantial 

Destruction of Property. 

(FAA Order No. 2150.3B, Figure C-1 ). Each offense category is divided further into 

subcategories of violations involving: (1) shipping papers; (2) labels; (3) markings; 

( 4) packaging; (5) training; (6) emergency response information; (7) release into 

environment; and (8) other. (Id.) 

The appropriate offense category in this case was Undeclared Shipment Hazmat 

Forbidden on, or Exceeds Quantity Limits for, Passenger Aircraft. This is because the 

shipment was undeclared, the propane was forbidden on passenger aircraft, and the WD40 exceeded the quantity limits for passenger aircraft. 

The following is the excerpt from the Matrix (FAA Order No. 2150.3B, Appx. C, 

p. C-2) for penalties for undeclared shipments of hazardous materials that are forbidden 

on or exceed quantity limits on passenger aircraft: 

16 It is well settled that undeclared or hidden shipments pose a special danger. 

Envirosolve, FAA Order No. 2006-2 at 14 (February 2, 2006), citing Toyota Motor Sales, FAA 

Order No. 1994-28 at 12 (September 30, I 994). They are thus deserving of higher sanctions. 

12 
OFFENSE A. Individual B. Business C. Business D. Business 

CATEGORIES Entity Entity that entity that 

uses or regularly 

handles offers, 

hazmat in the accepts, or 

course of transports 

business hazmat 

III. Undeclared 

Shipment Hazmat 

For bidden on, or 

exceeds qty limits 

for, Passenger 

Aircraft 

1. Shipping 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

Papers 

2. Labels 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

3. Markings 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

4. Packaging ------- 5,000-16,200 7,500-22,000 I 0,000-32,500 

5. Training 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

6. Em erg. 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

Response 

7. Release 500-5,500 5,000-16,200 7,500-22,000 10,000-32,500 

into 

Environ. 

8. Other 500-5,500 5,000-16,200 7,500-22,000 I 0,000-32,500 

As the excerpt from the Matrix above shows, when the violator is a business 

entity, the penalty range for each offense subcategory for undeclared shipments of 

hazardous materials that are forbidden on, or exceed the category limitations for 

passenger aircraft is $5,000 to $16,200. However, when the business entity uses or 

handles hazardous materials in the course of its business, the recommended sanction 

range for the same violation subcategories is $7,500 to $22,500. 

The ALJ found only one violation, and he assessed a civil penalty of $5,000, 

which was at the very low end of the range for business entities. Complainant argues that 

the correct range is $7,500 to $22,500, and that a civil penalty at the very bottom of the 

range -$7,500- is appropriate in this case for each of the five applicable violation 

13 
subcategories (shipping papers, markings, labeling, emergency response information, and 

training). Complainant does not state how it arrived at a proposed civil penalty of 

$37,500, but multiplying the minimum civil penalty of$7,500 by five violations leads to 

a total of $37,500. Complainant argues for a minimum civil penalty per violation 

($7,500) even though the nature and amount of the materials, as discussed above, 

indicated that the case should be given a maximum weight. 

The ALJ rejected Complainant's argument that there were five violations because, 

he said, there was only a single underlying act. According to the ALJ, "Complainant's 

calculation smack[ ed] of 'piling on,' a policy the Administrator frowns upon in nonegregious circumstances such as these." As support, the ALJ cited Carr, FAA Order 

No. 1998-2 at 11-12 (March 12, 1998). Carr, however, held that "violation of general, 

introductory sections of the [HMR] should not necessarily count as separate violations for 

sanction purposes when violations of more specific regulatory requirements are proven." 

Id. at 12. In the instant case, Complainant has not sought a separate sanction for general 

provisions in the instant case. Thus, Carr is inapposite. 

The Mole-Master case, FAA Order No. 2010-11 at 14 (June 16, 201 0), however, 

is relevant. The respondent in Mole-Master, like the ALJ in the instant case, asserted that 

there was a "piling on" of violations by Complainant and that the violation was a single 

act of shipping materials. As the Administrator stated in Mole-Master: 

There was no piling on. Although this may have been a single event, it 

was not a single violation. Under the sanction guidance, Mole-Master 

violated six different categories of violations. 

ld The instant case also involved a single event, but there were five categories of 

violations (shipping papers, marking, labeling, emergency response information, and 

14 
training). Each violation required proof of a fact that the other did not, the test for 

multiplicity established by the U.S. Supreme Court. Ball v. United States, 470 U.S. 856, 

861 (1985). Also, as Complainant points out, each of the five categories of violations 

(shipping papers, marking, labeling, emergency response information, and training) 

involve separate and distinct means of communication and are essential components of 

the regulatory scheme that has been developed to ensure safety in the transportation of 

hazardous materials. (Appeal Brief at 16-17.) Thus, the ALJ erred in finding only one 

violation for sanction purposes. 

Under the statute, other factors affecting the sanction amount include the 

violator's ability to pay, any effect on the violator's ability to continue to do business, 

and any other matters that justice requires. 49 U.S.C. § 5123(c). "Determination of the 

appropriate penalty does not involve a simple mathematical formula ... but instead 

requires the exercise of discretion and judgment." Dominion Concepts, Inc., FAA Order 

No. 2005-4 at 5 n.l5 (March 8, 2005). 

Respondent has asserted an inability to pay and an inability to continue in 

business. Because Respondent's financial information was within its own control, 

Respondent bore the burden of proving any inability to pay or to continue in business. 

Giuffrida, FAA Order No. 1992-72 (December 21, 1992). 

The ALJ rejected Respondent's affirmative defense of financial harm on the 

ground that Respondent had failed to show that the civil penalty would cause it grievous 

harm. According to the ALJ, Respondent did not show a nexus between the proposed 

civil penalty and a negative result. Also, the tax returns offered by Respondent were not 

signed by a company officer. The ALJ ruled that Respondent failed to prove that it was 

15 
unable to pay any penalty. 

Respondent introduced its Federal tax returns for 2009 and 2010. (Exh. R-1 and 

R-2; Tr. 240.) Ms. Frostad testified that the 2009 and 2010 tax returns were true and 

correct copies of the returns that Respondent filed with the Federal government. 

(Tr. 230,232, 241-242.) She testified that she knows that the 2010 return was filed byemail and she received a copy of it. (Tr. 232.) She has an accountant, and presumably the 

accountant filed the tax returns. She testified that to the best of her knowledge, the 

information in the 2009 and 2010 returns was correct. (Tr. 232, 242.) The ALJ held that 

she was a generally credible witness. (Initial Decision at 4.) Under the circumstances, 

the ALJ did not err in admitting the tax returns. Further, because the 2009 and 2010 tax 

returns are consistent with Ms. Frostad's testimony, they are entitled to some weight 

regarding the company's financial circumstances. 

Ms. Frostad testified that Respondent did not make any money in 2009 or 2010, 

and that she has taken no salary since Respondent was incorporated in 1999. (Tr. 215, 

241, 244, 251.) In fact, she testified that Respondent has never had a profitable year. 

(Tr. 251.) She also testified that if Respondent were ordered to pay Complainant's 

sought-after penalty of$37,500, the company would not be able to continue to operate. 

(Tr. 262.) 

The ALJ correctly found that the evidence is insufficient to prove that a $37,500 

civil penalty would force Respondent to go out of business. Respondent has operated at a 

loss since its inception and it has not yet gone out of business. For this reason, it is 

unclear that a $37,500 civil penalty would force it out of business. Ms. Frostad's 

conclusory, self-serving statement that the company would not be able to operate if it 

16 
were ordered to pay a $37,500 civil penalty is insufficient proof. 

However, the tax returns, combined with Ms. Frostad's testimony, provide 

evidence that Respondent does not have the financial means to pay a civil penalty as high 

as $37,500. The tax returns showed that Respondent's costs of doing business exceeded 

its gross receipts in both 2009 and 2010. Additionally, the returns indicate that the 

company has no significant assets upon which it can draw to pay the $37,500 civil 

penalty appropriate under the Matrix and sought by Complainant. 

The $37,500 civil penalty sought by Complainant was appropriate at the outset, 

but in light of the evidence described above regarding Respondent's financial situation, a 

somewhat lower civil penalty is warranted. A civil penalty of $20,000 will accomplish 

these purposes. 17 

Finally, the question is whether "any other matters that justice requires" compel 

further adjustment of the penalty. This category includes factors such as corrective 

action, including hazardous materials training for employees, if such an action is 

sufficiently swift and comprehensive. Atlas Frontiers, LLC, FAA Order No. 2010-10 at 

13 (June 16, 201 0). Respondent did not assert that it provided relevant training or that it 

took any other corrective action as affirmative defenses. 

The ALI stated that he would not assess Complainant's proposed sanction of 

$37,500 because Complainant proposed a far lower sanction- only $3,750- in two cases 

that the ALI thought were "roughly comparable." Kaden, FAA Docket No. 

CP05NM0024, DMS No. F AA-2005-22081, and Macaulay, FAA Docket No. 

17 The evidence that Respondent introduced demonstrated that Respondent's financial 

circumstances are challenging. However, Respondent did not provide evidence regarding the 

amount of a penalty that it can pay. The penalty assessed in this decision reflects both 

Respondent's limited means and the seriousness of the violations, and should not be deemed as a 

factual conclusion regarding Respondent's available financial resources. 

17 
CP02S00029, DMS No. FAA-2002-12591. 

In the first ofthe cases cited by the ALJ, Kaden, FAA Docket No. CP05NM0024, 

DMS No. FAA-2005-22081, Complainant requested a $3,750 civil penalty but the ALJ 

assessed $3,000 for an undeclared shipment of two cylinders ofliquefied petroleum gas 

(hazard class 2.1, flammable gases) and at least 25 "strike anywhere" matches (hazard 

class 4.2, flammable solids). Both items are forbidden on passenger flights. 

In the second case, Macaulay, FAA Docket CP02S00029, DMS No. FAA-2002-

12591, Complainant sought a civil penalty of$3,750 relating to an undeclared shipment 

of three !-gallon cans of concrete sealer (hazard class 3, packing group III, flammable 

liquid). Respondent defaulted and the ALJ assessed a civil penalty of $3,750 as sought in 

the complaint. 

Kaden and Macaulay are distinguishable from the instant case in at least several 

important respects. The respondents in those cases were individuals rather than 

businesses. The civil penalties for individuals are lower. Also, the cited cases are 

significantly older than the instant case. The alleged violations occurred in February 

2000 in Macaulay and in April 2005 in Kaden. The maximum civil penalties in those 

cases, per violation, was $25,000, as opposed to the $50,000 maximum civil penalty in 

the instant case. 18 

18 The amounts sought by Complainant in the other two cases and the sanctions actually 

imposed by the ALJ in those cases are not precedent binding upon the Administrator in 

subsequent cases. In contrast, decisions of the FAA Administrator are precedent in other civil 

penalty cases. The Rules of Practice provide that: 

A final decision and order of the Administrator after appeal is precedent in any 

other civil penalty action. Any issue, finding, or conclusion, order, ruling, or 

initial decision of an [ ALJ] that has not been appealed to the FAA decisionmaker 

is not precedent in any other civil penalty action. 

18 
Moreover, it is unnecessary to compare the cases. As previously held, "[a]bsent 

extraordinary circumstances, ... past sanctions will not be grounds for reducing sanctions 

that fall within the parameters set by the sanction guidance." Texas Army National 

Guard, FAA Order No. 2012-3 at 6 (May 22, 2012), quoting Tate and Partners, FAA 

Order No. 2010-7 at 15 (June 15, 201 0). The rationale for this is that "comparing 

sanctions [whether proposed or actual] across cases is not just diflicult, but it is 

unworkable" because "there are simply too many variables in each case." Tate, FAA 

Order No. 2010-7 at 6 (June 15, 2010). 

If an ALJ assesses a civil penalty that is not consistent with the guidance, the 

Administrator has both the authority and the duty to impose the agency's sanction 

guidance on appeal. War below's, FAA Order No. 2000-30 at 20 (February 3, 2000). 

"[C]oncerning matters of agency law and policy, administrative law judges are subject to 

the agency." American Airlines, FAA Order No. 2002-16 at 7 (May 20, 2002), quoting 

Northwest Airlines, FAA Order No. 1990-37 at 8 (November 7, 1990). 

The ALJ stated that the sanction amount suggested by Complainant would do 

little to advance the agency's policies of compliance and deterrence in this case, in part 

because Respondent is well aware, due to the nature of its business, of the risks 

associated with chemicals. However, Respondent failed to demonstrate awareness of the 

risks associated with offering hazardous materials for air transportation when it shipped 

the propane and WD-40. Respondent admitted that it had not trained its employees in the 

shipment of hazardous materials. The fact that the company was well aware of the risks 

associated with these hazardous materials makes the violation more egregious and 

warrants a more serious civil penalty. 

14 C.F.R. § 13 .233(j)(3). 

19 
Conclusion 

Complainant's appeal is granted in part. The civil penalty assessed by the ALI, in 

the amount of $5,000, is too low. A civil penalty in the amount requested by 

Complainant- $37,500- was perfectly appropriate at the outset because it was in the 

correct range and was not undermined by any case law. However, a $37,500 civil penalty 

is higher than necessary, in light of the evidence described above regarding Respondent's 

financial situation, and as a result, this decision assesses a civil penalty in the amount of 

$20,000. This amount appropriately reflects the sanction guidance, the statutory factors, 

and the totality of the circumstances. This amount will promote compliance and deter 

future violations by Respondent and others. 19 

Federal Aviation Administration 

19 This order shall be considered an order assessing civil penalty unless Respondent files 

a petition for review within 60 days of service of this decision with the U.S. Court of Appeals for 

the District of Columbia Circuit or the U.S. court of appeals for the circuit in which Respondent 

resides or has its principal place of business. 14 C.F.R. §§ 13.16(d)(4), 13.233(j)(2), 13.235 

(2009). See 71 Fed. Reg. 70460 (December 5, 2006) (regarding petitions for review of final 

agency decisions in civil penalty cases). 

20 
APPENDIX 

Section 171.2(e)20 provides: 

(e) No person may offer or accept a hazardous material for transportation 

in commerce unless the hazardous material is properly classed, described, 

packaged, marked, labeled, and in condition for shipment as required or 

authorized by applicable requirements of this subchapter .... 

Section 172.200(a) provides: 

(a) Description of hazardous materials required . ... [E]ach person who 

ofiers a hazardous material for transportation shall describe the hazardous 

material on the shipping paper in the manner required by this subpart. 

Sections 172.202(a)(l)-(3), (6)-(7) provide: 

(a) The shipping description of a hazardous material on the shipping paper 

must include: 

( 1) The identification number prescribed for the material ... ; 

(2) The proper shipping name prescribed for the material ... ; 

(3) The hazard class or division number prescribed for the material ... ; and 

( 6) ... the total net mass per package ... ; 

(7) The number and type of packages ... . 

Section 172.204(a) provides: 

(a) General. ... [E]ach person who offers a hazardous material for 

transportation shall certify that the material is offered for transportation in 

accordance with this subchapter by printing ... on the shipping paper ... the 

certification contained in paragraph (a)(l) of this section or the certification ... in 

paragraph (a)(2) of this section. 

(1) "This is to certify that the above-named materials are properly 

classified, described, packaged, marked and labeled, and are in proper condition 

for transportation according to the applicable regulations of the Department of 

Transportation." .... 

(2) "I hereby declare that the contents of this consignment are fully and 

accurately described above by the proper shipping name, and are classified, 

packaged, marked and labelled/placarded, and are in all respects in proper 

condition for transport according to applicable international and national 

governmental regulations." 

20 All citations are to the Januaty I, 2009, edition of Title 49 of the Code of Federal Regulations 

(CFR), which was in effect at the time, as the violations occurred in May 2010 and the regulations were 

not revised again until October I, 20 I 0. 
Section 172.204(c)(l) provided: 

(c) Transportation by air--(1) General. Certification containing the following language 

may be used in place of the certification required by paragraph (a) of this section: 

I hereby certifY that the contents ofthis consignment are fully and accurately described 

above by proper shipping name and are classified, packaged, marked and labeled, and in 

proper condition for carriage by air according to applicable national governmental 

regulations. 

Section 172.204( c )(2) provided: 

(c) ... (2) Certificate in duplicate. Each person who offers a hazardous material 

to an aircraft operator for transportation by air shall provide two copies ofthe 

certification required in this section ..... 

Section 172.204(c)(3) provided: 

(c) Additional certification requirements . ... (3) [E]ach person who offers a 

hazardous material for transportation by air must add to the certification required in this 

section the following statement: 

"I declare that all of the applicable air transport requirements have been met." 

Section 172.30l(a) provided: 

(a) [E]ach person who offers a hazardous material for transportation in a 

non-bulk packaging must mark the package with the proper shipping name and 

identification number (preceded by "UN" or "NA," as appropriate) for the 

material as shown in the § 172.101 Table .... 

Section 172.600 provided: 

(c) General requirements. No person to whom this subpart applies may offer for 

transportation, accept for transportation, transfer, store or otherwise handle during 

transportation a hazardous material unless: 

(1) Emergency response information conforming to this subpart is immediately 

available for use at all times the hazardous material is present; and 

(2) Emergency response information, including the emergency response telephone 

number, required by this subpart is immediately available to any person who, as a 

representative of a Federal, State or local government agency, responds to an incident 

involving a hazardous material, or is conducting an investigation which involves a 

hazardous material. 

Section 172.602(b)(3) provided: 

2 
(b) Form of information. The information required for a hazardous material by 

paragraph (a) of this section must be: 

(3) Presented-

(i) On a shipping paper; 

(ii) In a document, other than a shipping paper, that includes both the basic 

description and technical name of the hazardous material as required by§§ 172.202 and 

172.203(k), the ICAO Technical Instructions, the IMDG Code, or the TDG Regulations, 

as appropriate, and the emergency response information required by this subpart (e.g., a 

material safety data sheet); or 

(iii) Related to the information on a shipping paper, a written notification to pilotin-command, or a dangerous cargo manifest, in a separate document (e.g., an emergency 

response guidance document), in a manner that cross-references the description of the 

hazardous material on the shipping paper with the emergency response information 

contained in the document. Aboard aircraft, the ICAO "Emergency Response Guidance 

for Aircraft Incidents Involving Dangerous Goods" and, aboard vessels, the IMO 

"Emergency Procedures for Ships Carrying Dangerous Goods," or equivalent 

documents, may be used to satisfy the requirements of this section for a separate 

document. 

Section 172.604(a)(3) provided: 

(a) A person who offers a hazardous material for transportation must 

provide an emergency response telephone number, including the area code or 

international access code, for use in the event of an emergency involving the 

hazardous material. The telephone number must be-

(3) Entered on a shipping paper, as follows: 

(i) Immediately following the description of the hazardous material required by 

subpart C of this part; or 

(ii) Entered once on the shipping paper in a clearly visible location. This provision 

may be used only if the telephone number applies to each hazardous material entered on 

the shipping paper, and if it is indicated that the telephone number is for emergency 

response information (for example: "EMERGENCY CONTACT: * * *). 

Section 173.l(b) provided: 

(b) A shipment of hazardous materials that is not prepared in accordance with this 

subchapter may not be offered for transportation by air, highway, rail, or water. It is the 

responsibility of each hazmat employer subject to the requirements of this subchapter to 

ensure that each hazmat employee is trained in accordance with the requirements 

prescribed in this subchapter. It is the duty of each person who offers hazardous 

materials for transportation to instruct each of his officers, agents, and employees having 

any responsibility for preparing hazardous materials for shipment as to applicable 

regulations in this subchapter. 

3 
' 

SERVED: JANUARY 14, 2013 

' . I . . 

U.S. DEPARTMENT OFTRANSPORTATION 

OFFICE OF HEAR.INGS 

WASHINGTON, DC 

FEDERAL AVIATION ADMINISTRATION: 

) 

) 

) 

Complainant; ) 

v. FAA Docket No. [To Be Assigned) 

(Civrl Penalty Action) 

FROST AD ATELIER, INC. 

) 

) 

) 

) 

) 

Respondent. ) FDMS No. FAA-2011-0294 

) 

INITIAL DECISION 

OF ADMINISTRATIVE LAW JUDGE RICHARD C. GOODWIN :!, ,'i : 

. ' 

Found: 1. Respondent violated §§171.2(e), 172.200(a), 172.202(a)(1), 172.202(a)(2), 

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

172.204(c)(2), 172.204(c)(3), 172.30l(a), 172.600 and 172.602(b)(3), 

172.604(a)(3), and 173.i(b) as charged; and 

2. Respondent is assessed a civil penalty of $S,000. 

I. Background 

This matter originated with the' discovery by authorities of certain restricted 

substances in the luggage of a passenger preparing to board an aircraft. 

On May 29, 2010, Ronda (Ronnie)·Frostad, a ticketedpassenger on Southwest 

Airlines, prepared to depart Louisville, KY for Sacramento, CA.' She was travelling 

1 Tr. 211. The Complaint stated the date as May 7, 2010. Complainant later served an erratum to the.Complaint 

correcting the date of the iricidentto May 29, 2010. See Tr: :ho:'( ' ' 
2 

\ ' J·. ' 

on behalf of a company she owns and runs,. Respondent Frostad Atelier, Inc., of McClellan and. 

Sacramento, CA. (''Respondent" or ''the company"). Respondent is a bronze casting foundry 

(Tr. 208-09; Exh. C-9, p. 1). Ms. Frostad and the two Respondent employees travelling with her 

were returning after completing a job that the company had been contracted to perform (Tr. 209-

12). 

Agents of the Transportation Security Administration ("TSA"/ searched a bag ch.ecked 

by Ms. Frostad and found two substances inside warranting further examination:· a 16.4-ounce 

can of propane and an 8-ounce cont!Uner of an aerosol lubricant popularly known as WD-40 

(Exhs. C-2 and C-4). They determined that both substance.s were classified as hazardous 

materials ("hazmats'') under the Department's Hazardous Materials Regulations ("HMRs"); 49 

C.P.R. §§171-180, 

The HMRs are designed to facilitate. proper handling of inherently dangerous goods and 

to alert first responders in the event of an incident. As such, hazardous waterials offered for 

transportation by air must comply with detailed marking, labeling, packing, and informational 

requirements spelled out therein. Certain training obligations must be observed as well. 49 

C.P.R. §172. Ms. Prostad's tender had been undeclared: that is, the luggage in question had 

contained no warning or notice of the hazardous nature;ofits contents. MtdtownNeonSign 

Corporation, P AA Order No. 96-26 (August 13, 1996), p, 2. '' I I,, :, I ' 

. Based on the foregoing, the Complaint ()fthe F~dera!Aviation Administration 

. ("Complainant," "P AA," or ''the agency") cited Respondent for the following fourteenHMR 

violations: § 171.2( e), in offering hazardous materials for transportation improperly classed, 

described, packaged, marked, andlabel~d; §§ 172.~00(a), 172.202(a)(l ), 172.202(a)(2), 

172.202(a)(3),172.202(a)(6),and 172.202(a)(7), in offering hazardous materials for 

transportation without propetly describing the material on shipping papers, including the failll!e 

to set out the materials' identification number, shipping name, hazard class or division, the total 

net mass per package, and the number and type of packages; §172.204(a) or (c)(!), in offering a 

hazardous. material without certifying that the material was offered in accordance with applicable 

HMRs; § 172.204( c )(2), in offering a hazardous material and failing to provid~< two copies of the 

certification; § I 72 .204( c )(3 ), in offering a hazardous material and failing to add prescribed 

language to the certification; §172.30l(a), in offering hazardous materials in a non· bulk package 

not marked with the proper shipping names and identification numbers; §§172.600and 

172.602(b)(3), in offering hazardous materials without providing emergency response 

information in the manner required; § 172.604(a)(3), in offering a. hazardous material without 

providing a 24-hour emergency response teleph9ne number; and § 173.1 (b), in offering 

hazardous materials without instructing its ageniSand employees in preparing such goods for 

shipment. Complaifilmt asked for a civil penalty \md~r 49 U .S.C. §5123( a) .of $3 7 ,500. . . ' 

Respondent denied the charges. tt raised several substantive defenses to liability. and to 

mitigate or avoid the civil penalty sought. It also asserted that the imposition of a civil penalty 

would constitute. a financial hardship for the company. ' ' J 

2 A witness asserted that the "S" in "TSA" stands for "Safety." This is incorrect, S~e Tr. 28, 
3 

· I held a hearing in San Francisco, CA., on July 10, .2012 .. The parties have filed briefs . 

and the matter is now ready for decision. 3 .· · · · 

Complainant beai:s the burden of proving its case. 14 C.P.R. § 13.224. It also bears th~ 

burden of proving that the penalty it seeks is appropriate. See, e.g., American Air Network, FAA 

Order No. 2006-5 (February 10, 2006), 2006 WL 265369, p. 9 n. 19. Financial hardship may 

constitute grounds for a reduction of an assessment which is otherwise fitting. Conquest 

Helicopters, FAA Order No. 1994-29 (June 22, 1994), p. 3. The plea ofinability to pay, 

however, is an affirmative defense. On that issue it is Respondent which assumes the burden of 

proof. 14 C.F.R. §i3.224(c). As the Administrator has explall1ed, this assignment ofthe burden 

is ''reasonable and necessary'' because the Respondent has corttrpl ofits financial information. 

Salvatore Giuffrida, FAA Order No. 1992-72 (Decemb'er 21, 1992), p. 2. Claims of such a 

nature must be substantiated to be credited. See,. e.g., Michael John Costello, FAA Order No. 

93c!O (March 24, 1993), 1993 WL 833110, p. 4. 

II. Discussion and Findings and Conclusions 

I find and conclude that Complainant has sustained its burden of proof on its allegations. 

Respondent is found in violation of each of the fourteen charges preferred against it. I will 

assess a civil penalty against Respondent of$5,000. . ' 

The facts which make up the charges are straightforward and may be. briefly summarized: 

On May 29,2010, the evidence showed, Ms. Frostad and two employees of the company were 

preparing to board Southwest Airlines at the Louisville International Airport in Louisville, KY. 

(''the Airport").4 They had been working in ):he Louisville area on a job for Respondentand were 

returning home. Luggage Ms. Frostad had checked at .Southwest's ticket counter was. flagged by 

agents of the TSA. Inside the luggage the agents observed a Ziploc-type plastic see.-through bag. 

Inside the bag they found an 8-ounce spray can ofWD-40 and a 16.4-ounce cylinder Of propane 

(Tr. 9-11,30-31,58-61,65,69-70,76, 108;Exhs. C-2 andC•3, and C-9, p. 1). • · 

Both substances are listed by the Depai:tm~t's tJMRs as hazardous materials (Tr; ·19 l; 

See §172.101 HazardousMaterials Table;see also Exh,.iC-7 andTr, 164-70,175, 179 (propane); 

Exh. C-6 and Tr. 157-61 (WD-40)). As noted, when such items are offered for shipment certall1 

marking and labeling conventions must be observed. The HMRs require that propane be 

described as "Petroleum gases, liquefied, Hazard Class 2.1 (flammable gases)." The substance is 

assigned the United Nations ("UN") identification number kllown as UN 1075. This material is, 

as the parties stipulated, notpermitted in passenger air transportation (Tr. 137, 152-53). The 

second hazmat found in Ms. Frostad's luggage, Wb-40, is properly described for shipping 

purposes as "Aerosol, flammable, Hazard Class 2.1." Its assignedidentification numberis UN 

1950. The correct label for both the. propane and the WD-40 is ''FLAMMABLE GAS," 

(emphasis and caps in original). Respondent recognized that WD-40 also is con$idered a 

3 Complainant's Brief will be referred to as "Compl. Br."; Respondent's as "Resp. Br."; aitd Cllmplainant' s Rebuttal 

Brief as "Compl Rebut. Br." . 4 The three-letter identifying code for the Airport is .SDF. Tr. 82; see, e.g., Exh.C"2, p. 5. 

·• ! 
4 

hazardous materil:ll (Tr. 152). See also table following §172.101 of the HMks; §172AOO; 

§172.417. s . 

. The luggage had been undeclared. No labeling, marking, warnings or other information 

required under the HMRs were present (Tr. 170; seidrlitialDecision{"I.D."), p. 2). Nor had the. 

company's employees undergone the HMR-requiredtraining in the transport by air ofhazmatsa fact Respondent conceded (Tr. 264). · . 

Ronda Frostad testified for Respondent Frostad Atelier, In: c. She generally Wl:IS a credible 

witness. Ms. Frostad acknowledged that Respondent had offered the luggage in question for 

transport (Exh. C-9, p. 1). But in defen,se to the charges she insisted that she wasnot aware that 

the offending materials were in it. She 'did not paek them, she said. She assert!ld that she never 

travels with propane. It was used on the Louis:villejob,.yes; but company policy is to purchase 

propane locally and to avoid travelling with it. The presence ofWD-40is a bigger mystery, Ms. 

Frostad insisted; while it is used at the foundry in California, Ms. Frostad denied using it on this 

job. One of the employees travelling with her packed the hazmats, She added (Tr. 213-27, 260). 

These circumstances do not avail Respondent; they do not absolveit from legal. 

responsibility stemming from the tender of the luggage. The trip manifestly was carried out on 

behalf of Respondent. Respondent, of course, had been hired in order to. perform and had 

performed the work for which the travel had been undertaJ<_en. The airline tickets were 

purchased referencing the company address(Exh. C-2, p. 2). All matters involving the trip, 

including the tender; are properly the company's responsibility. In any event employers are 

vicariously liable for the acti0n,s of their employeesaptin9.within the scope oftheiremployment 

(see, e.g., Warbelow'sAir Ventures, I~:~c., FAA OrabrJ:(Td, 2000-3 (February3, 2000), p. 5, 

reconsid den., FAA Order No. 2000-14, ~une 8, 2000;pet den. 19 Fed.Appx, ()06(unpublished 

opn., September 20, 2001)). The offending materials were packed as part of the winding up of 

the job that had just been completed. The conduct underlying the charges, then, was within.the · 

scope ... Ms. Frostad acknowledged also that the tools of the trade (which, the evidence showed, 

included both items under review) are the property ofRespondent (Tr. 221-24). The 

circumstances described above show, Lponclude; that Respondent is obligated to answer for the 

conduct of its employee a:p.dto accept responsibility for the consequences of the presence of the 

offending materials in Ms. Frostad's luS!,lage. ' 

It is not necessary to Complainant's proof to show that Respondent or one of its agents or 

employees actually knew what was inside Ms. Frostad's luggage. Nor is it necessary for the 

agency to demonstrate that Respondent or one of these individuals was aware that either or. both 

of the offending items in fact were regulated or prohibited ltazardousmaterials. The governing 

statute contains no such requirements. It subjects any persop. to a' civil penalty who hM .· 

"knowingly committed an act which is a violation ... " "Knowingly'' mea:p.s only that aperson . 

(the definition of which includes a business) has actual knowledge of thefacts givip.g rise to the 

violation (49 U;S.C. §5123(a)(l)). In: this matter, it means that Respondent -through an agent 

5 Complainant's witness P. Cartrice Dye, a security specialist whqlf<:view¥'1 the agency's investigative file, stated 

that WD-40 is pennitted to be shipped by air ina quantity II(! great~r than four fluid ounces, citing 49 C.FJl 

§ 173.306. Tr. 162. The particular item at issue, however, was stored in an aerosol can of eight fluid ounces. Ms. 

Dye reiterated that the HMRs prohibit the movenient of propane ill air transportation in any quantity. Tr. 169. 
5 

or employee, of course -- knew that it was offering the luggage in question for air transport. 

This, of course, was proven. The statute also makes clear that knowledge of the law is 

unnecessary to a finding of violation; persons are liable even if they do not know they are 

breaking the law. Riverdale Mills Corporation, FAA Order No. 2003-10 (September 12, 2003), 

p. 5; Scott H Smalling, FAA Order No. 94-31 (October 5, 1994), p. 7. Congress intended to 

prevent individuals from relying on ignorance hfthe law as an excuse in civil hazardous 

materials cases. 6 · . 

Ms. Frostad also asserted that she failed to see any signs at the Airport warning 

passengers of such things as categories of restricted or prohibited hazardous materials, hazmats' 

associated risks and dangers, and the possible adverse consequences of attempting air transport 

of such substances (Tr. 263-64). · The evidence showed that the Southwest Airlines .area where 

passengers tender their checked baggage features a large poster board containing pictures and· 

descriptions of items which may not be packed or brought aboard aircraft. The c::arrier also had 

posted notifications at the counter on either side of the baggage wells where passengers place 

their bags for tagging and weighing. The signs advise that violators are subject to fines of up to 

$110,000 (Tr. 42-47; Exh. C-1, p.2). 

The various signs provided ample warning to would-be passengers of the risks associated 

with travelling with hazmats. But Ms. Frostad's failure to spot any of them is in any event 

irrelevant to .the charges. No duty to warn existed. The finding of violations is grounded simply 

on proof that Respondent offered the luggage containing the restricted or prohibited materials for 

carriage in passenger air transportation undeclared. The luggage failed to conform to pertinent 

HMRs. . ' 

Pursuant to the foregoing discussion, it is concluded that Complainant proved its case. 

Respondent is found in violation of the HMRs as charged in the Complaint: §§17l.2(e), 

172.200(a), l72.202(a)(l), 172.202(a)(2), 172.202(a)(3),172.202(a)(6), 172.202(a)(7), 

172.204(a) or (c)(!), 172.204(c)(2), 172.204(c)(3);172.600, 172.602(b)(3), 172.604(a)(3), and 

§173.l(b) (Tr. 191). 

lll. Penalty 

I will assess against Respondent a civil penalty of$5,000. 

A. Standards 

In determining the amount of the penalty; 1\l.e decisionmaker must consider "the nature; 

circumstances, extent, and gravity of the violation," and, with respeCt to the violator, "the degree 

6 Scott H. Smalling, p. 7. The legislative history ofthe Hazardous Material Transportation A¢t.confirms that 

Congress intended to impose civil penalties on persons who knew about the act constituting the violation but did not 

know about the law. The conference substitute explains that "a civil penalty may be imposed only upon proof that 

the defendant knowingly committed the act which .constitutes the violation (it is not necessary to show that he knew . 

the act constituted a violation) . .. (emphasis supplied)!' S. Conf. Rep. No. !347, 93"' Cong., 2nd Sess,, reprinte41n 

1974 U.S. CodeCong. & Ad. News 7669, 7686; see also TCJ Corporation; FAA Order No. 92-77 (December 22, · 

1992), pp. 8-9 n. 13. · · · · 
.6 

of culpability, any history of prior violations, the ability to pay, and any effect on the ability to 

continue to do business" and "other mattersthatji:tstice requires'' (49U.S.C. §5123(c)}. 

The Adrrlinisti'ator has provided policy guidance· for agency employees to follow wh¢n . 

recommending an appropriate civil penalty in hazardous-materials cases. The guidance is fol.Uld 

· in the agency's Penalty Guidelines ("the Guidelines"). The Guidelines have been published as 

FAA Order 2150 .3B, Appendix C. They were marked (but not admitted) in this proceeding as 

Exhibit C-10, of which I took judicial notice (Tr. 196). (I will refer to itas "Exh.C"lO" even 

though it was not admitted). The Guidelines assess all relevant statutory criteri~ including 

mitigating and aggravating circumstances. They additionally aid Complainant's penalty 

determination through a Sanction Guidi!D;Ce Mlltrix ("the Matrix"). The Matrix sets out specific 

penalty ranges. for each· input, cross-referencing such pertinent factors as the respondent's size; 

. the quantity ofthe. violative materialoffeted, the extent of the respondent's \lsnal dealings with ·· 

hazmats, the relative risk of harm posed by the substances involved, and any adver~e . 

consequences associated with the hazmats' transp<>rt. · · 

The Guidelines are intended to indicate the Administrator's "general views" about the 

civil penalty ranges appropriate for different types of violations. Folsom ~s Air Service, Inc., 

FAA Order No .. 2008-11 (November 6, 2008), 2008 WL4948488,p. 13. They are not binding. 

Each situation, being dependent on so many variables, is unique. "Evaluation of the case/' the 

FAA has emphasized, "is based on the totality of the facts and circumstances."7 · · · 

An .administrative law judge ("ALJ") is not required to follow the g1lidelines .. The .. 

guidelines are intended for agency personnel, andALJs are not agency personnel. Folsom'$, . 

supra, p. 14, ALJs make decisions i11dependently, and the ALJ determines (subject to agency 

review) whether a civil penalty is to be assessed, and if so, in what amount: The Guidelines 

nonetheless must berespected as an expression ofagency sanction policy. They representan · 

effort to produce consistent results in similar cases; The Administrator bas asserted the power to 

impose the agency's sanction policy on appeal if aq AI} assesses a civil penalty that is not . · · 

consistentwith theGuidelines. Warbelow 's; sU]Jra, p. 2'0; Northwest Airlines, FAA OrderNo. 

1990-37 (November 7,1990), pp. 8-10. · ' ·· 

B. Complainant's Position 

Complainant seeks a civil penalty totaling $37,500. It calculated the sum as follows: 

first, by slotting the HMRs violated into five categories (shipping papers, labels, markings, 

training, and emergency response) and then by describing Respondent per the Guideline category 

"Business Entity that uses or handles hazmat in the course ofbusimiss" (Exh. C-10, p. 14; 

Com pl. Br., pp. 9-10). The Matrix suggests a range of $7,500 tq $22,0.00 per vioh1tion category 

for this type of business entity found to have offered an undeclared shipment: ofa hazmat 

exceeding quantity limits or forbidden on passenger aircraft (Exh. C"l2, Fig. C-1, intersectionof 

7 FAA Policy on Enforcement ofthe HazardousMateriillsRegulations: PenaltyGuid~lines, 64Fed.Reg.l9443, 

19444, 1999 WL226610 (F.R.)(April2l, 1999); also published on Aprill4, 1999, as Change26,Appendix 6,to 

FAA Order 2150.3A. Order2150.3B,.effective October l, 2007, updated ll!ld superseded the original guidelines. 

See 72 Fed.Reg. 55853. FAA Otder 2150.3B may also be found at www.airweb.faa:gov and rgLfaa;gov.See Tr. 

194. 
8 

penalty necessarily is grounded on five;Violationgtoupings, andthen calculating the proposed · 

assessment on that basis, fails to account for this fundamental fact. Complainant is not 

sufficiently appreciative of the Administrator's warning that deriving an assessment simply by 

multiplying the number of violations by the penalty recommended per sanction "· even a ·· 

category minimum -- could result in a fine .disproportionately severe. War below's Air Ventures, 

Inc., FAA Order No.2000-3 (February 3, 2000), pp. 20-21, pet. for reconsid den., Order No. 

2000~ 14 (June 8, 2000). Complainant's calculation smacks of"piling on," a policy the 

Administrator frowns upon in non-egregious circumstances such as these. PaiJl A. Carr, FAA 

OrderNo. 98-2 (March 12, 1998), pp. 11-12. 

· The fine suggested also would do little to vindicate the agency's policies ofcdmplillllce 

and deterrence for this Respondent. Frostad Atelier, Jnc. is an. entity which does not.rteed to be 

educated or lectured about the dangers ofh~~Zardous sUbstances. On the contrary, it is well aware 

of the risks broadly associated with chemicals, The·. very nature of its business warrants and · 

compels such an awareness. Ms. Frostad testified that the companyuses over dne hundred 

different chemicals in casting. Employees performing their duties often must wear protective 

clothing (Tr. 256-62). Ms. Frostad,Respondent's owner and president, alsotestifiedthather 

business customarily bans the transport of these materials forrea8o11s she well understands,. }t 

additionally is noteworthy when determining penalty thatMs; Frostad credibly aSserted thatshe 

was unaware that the propane and WD740 had been packed in the company's luggage. Against 

this background, a fine of the magnitude suggested clearly would do little to impress upon this 

company the agency's policies of Compliance ·or deterrence. 

Finally, it bears mention thatthe civil penalty suggested is much greater than the agency 

has sought in roughly comparable. matters .. In one case the agency asked for an assessment of 

$3,750 for the attempted undeclared shipment on a passenger-carryingflight of"strikeanywhere" matches and two cylinders ofcompressed gas. These are substances. which are 

banned from passenger air transportation under alf circumstances. 8 In another instance, the 

FAA sought a civil penalty in the same amount.for the failure to jltoperly mark, label, and 

package a shipment of three one•gallon cans ofconcrete sealer(Berthan Macaillay, Docket 

CP02S00029 (DMS 12591 )). Kaden and Macaulay are not unlike the instant case. 

It is true, of course, that the agency has virtually unfettered discretionin suggesting civil . 

penalty totals. Moreover, because each case presents a:'unique set. of circumstances, comparisons 

with other proceedings can be elusive. But the request of the agency-· whose Guidelin~s are 

designed to produce consistent results insirnil~ c~es (see I .D., p. 6) -to seek a civil penalty ten 

times the amount sought in the referenced matters must, Without additional justification, be 

viewed with considerable skepticism. 

I have considered all other arguments advanced by both parties and reject them as 

without merit. 9 

8 Todd Kaden, FAA Docket No. CP05NM0024, Initia!Decision of Administrative LawJudge Richard C. Goodwin, 

served June 22, 2006. The Respondent was found to have violated the HMRs as charged and was assessed a civil 

fenalty of $3,000. · . . ' .·. · Two more matters require attention. The first concerns. the fact that the docket in this case has been sealed. See 

Order Sealing Docket .served August I 0, 2012. The docket, now incll!dingthe briefS, will remain seal¢for the· 
9 

Weighing all the circumstances discussed above,I conclude.thata civil penaltyof$5,000 

is warranted. The amount equals the minimum suggested by the Guidelines for a business entity 

committing one category ofhazmat violation. Suchan assessment best reflects the totality ofthe 

circumstances in the context of the statutory factors. The fine also will fittingly promote the 

agency's policies of compliance and deterrence for simnarly-situated entities. It is substantial 

but not unduly punitive. In the circurnstan~;eS it is appiapnate. 

RespondentFrostad Atelier, Inc. is hereby asses8eda civil penalty of $5,000 for 

violations of the following HMRs: §§171.2(e), 172.200(a), 172.20Z(a)(l), 172.202(a)(2), 

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

172.30l(a), 172.600 and 172.602(b)(3),J72.604(a)(3), and §173.1(b). 10 · · 

Attachments - Service List 

I< • 

' ' :"( ::' 1 ,!' 

,, i,, 

'\: 

~··· 

reasons stated in the Order, but this Initial Decision, l hold, does not touch on any subject appropriate for 

withholding from public disclosure an<!, therefore, is not subject to that Order. The. I. D. may be freely disseminated. 

The second matter concerns Complainant's Motion to Strike ("Motion") Respondent's Post Hearing Brief, dated 

DecemPer 17, 2012, on the grounds thatthe brief was one business day late. The Motion, failingto deinonstrate any 

ftrejudice to Complainant, is denied.. · . . . · 0 Any appeal from the Initial Decision to the Administrator must be in accordaitce with section 13.233 · oftbe Rules 

of Practice, which requires l) that a notice of appeal be filed no later than 10 days (plus an additi0nal5 for mailing) 

from the date of this order and 2) that the appeal be perfected with a written briefor memorandljltl not later than 50 

days (plus 5 for mailing) from the date of this order. Each is to.be sent to the Appellate Docket Clerk, Room 924-A, 

Federal Aviation Administration, 800 Independence Ave)lue, WashJ)lgton, DC 20591, and to.agency counsel. 

Service upon the presiding judge is optional.