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# n BEFOR E TH E DEPARTMEN T O F TRANSPORTATIO N

I nth e Matte r of : FEDERA L AVIATIO N ADMINISTRATION , Complainant , v s . TEXA S ARM Y NATIONA L GUARD , Respondent . 

# DECEIVE D JAN1 9 201 1 

# j^ooM^^^ GDOCKE

T CP09SO001 4 Civi l Penalt yActio n DM S No . FAA-2009-104 S FA ACas e No . 200 8 SO70038 9 

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Courtroo m1 ' i Home r Thornberr yJudicia l Bdg . 90 3 Sa nJacint o Boulevar d Austin , Texa s Tuesday, Januar y4 , 2 01 1 Th e above-entitle dmatte r cam e o nfo r hearing , pursuan t t o notice , a t 9:0 0 a.m . BEFORE : HON . RICHAR D C . GOODWI N

Administrativ e La wJudg e

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. 20005-370 1 www.nealrgross.co mAPPEARANCE S O nbehal f o f th e Complainant : GERAL D A . ELLIS , ESQ . Federa l Aviatio nAdministratio n Souther nRegion , A50 7 P.O . Bo x2063 6 Atlanta , Georgi a 30320-000 7 404-305-520 0

O nbehal f o f th e Respondent : MICHAE L C . CROWLEY , ESQ . Texa s Attorne yGeneral' s Offic e P.O . Bo x1254 8 Austin , Texa s 78711-254 8 512-475-420 8



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# r ^ INDE X WITNES S DIREC T CROS S REDIREC T RECROS S Stac i Baldwi n 1 1 1 6 Cathlee nGruetzne r 2 7 3 7 3 8

EXHIBIT S MAR K REC D Complainant' s C- 1 1 3 1 4



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r ^ Respondent ' s R - 1 R- 2 1 8 2 4 2 4 3 4

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# n 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 PROCEEDING S (9:1 0 a.m. ) JUDG E GOODWIN : Thi s i s th e cas e o f Federa l Aviatio nAdministratio nagains t th e Texa s ArmyNational Guard , docke t numbe r 2 009

- 104 5 Counsel , identif yyoursel f fo r th e record , please .

MR . ELLIS : Geral dElli s fo r th e FAA , You r Honor , Complainant .

MR . CROWLEY : Michae l Crowle yfo r th e Offic e o f th e Attorne yGeneral , appearin g o nbehal f o f th e Texa s Guard . W e ar e ready .

JUDG E GOODWIN : Okay . Acoupl e o f preliminar ymatters , an dI kno wMr . Elli s i s probabl yfamilia r wit hthis . Everythin g tha t

w e d o goe s o nth e Interne t a t Regulations.gov , s o wha t I' mgoin g t o as k yo u wit hal l exhibit s i s mak e sur e tha t yo u redac t persona l information : Socia l Securit ynumbers , date s o f birth , hom e addresses . It' s a s applicabl e t o th e FA

Aa s i t i s t o anybod yelse . I f i n doubt , redac t it , an dI brough t a blac k magi c

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 marker , i f tha t become s a problem . A s I indicated , I don' t car e ho w yo u mar k you r exhibits , a s lon g a s yo u don' t
us e th e sam e exhibi t numbers . A t th e en do f th e hearing , I'l l kee p th e exhibit s an dmak e sur e the yge t transmitted .

Let' s see . An yothe r preliminar y matters ? Mr . Ellis , ar e yo u read yt o cal l you r firs t witness ?

MR . ELLIS : Ther e I S on e preliminar ymatter . I nth e complaint , th e dat e o f th e shipmen t shoul db e 200 8 instea do f 2009 , an dtha t woul daffec t paragraph s 2 , 5
an d6 o f th e complaint .

JUDG E GOODWIN : S o yo u wan t t o amen dth e complaint . Whic h- - giv e m e th e paragrap h MR . ELLIS : Paragraph s 2 , 5 , an d6
o f th e complaint .

JUDG E GOODWIN : Okay . D o yo u hav e
anyobjectio nt o that , Mr . Crowley ?

MR . CROWLEY : N o objectio n

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Okay . Anythin g

else , Mr . Ellis ?

MR . ELLIS : That' s all . JUDG E GOODWIN : Okay . An dI don ' t kno who wman ywitnesse s yo u have . D o yo u wan t th e rul e o nwha t witnesse s - - d o yo u wan t th e witnesse s sequestered ?

MR . ELLIS : I don' t reall ythin k it' s necessar yi nthi s particula r case .

JUDG E GOODWIN : Okay . MR . CROWLEY : N o JUDG E GOODWIN : I t doesn' t mak e anydifferenc e t o me . Cal l you r firs t witnes s - - o r d o yo u wan t t o mak e a nopening . Mr . Ellis ?

You r Hono r MR . ELLIS : Jus t a shor t opening .

OPENIN GSTATEMEN T O NBEHAL F O F TH E COMPLAINAN T MR . ELLIS : Wit hth e fact s i nthi s complain t admitted . You r Honor , th e FAAwil l focu s o nprovin g tha t th e $30,00 0 civi l

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 penalt yrequeste di s supporte db yth e Agency' s

publishe dsanctio nguidanc e an d tha t th e matte r i s neithe r arbitrar y- - an d tha t th e penalt yi s neithe r arbitrar yno r capricious . An dthat' s goin g t o b e th e focu s o f ou r argumen t today ,

JUDG E GOODWIN : Okay , M r Crowley , d o yo u wan t t o argu e o r reserve?

MR . CROWLEY : Ver ybriefly , I' d lik e t o address . OPENIN GSTATEMEN T O NBEHAL F O F TH E RESPONDEN T MR . CROWLEY : You r Honor , mentione dearlie r t o Mr . Elli s tha t thi s wa s almos t lik e a n appellat e cas e i n tha t whil e w e ma ydisput e interpretation s o f certai nfacts , I don' t thin k w e disput e th e fact s themselves . Counse l i s correc t tha t w e hav e stipulate dt o th e liabilit yportion . W e fee l th e penalt y o f - - th e propose dpenalt yo f 30,00 0 i s excessive , give nth e conduc t o f th e Guar dfro m th e tim e the ylearne do f thi s situation .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Th e Guard , th e sam e mont hthi s

occurred , initiate da far-reachin g progra m tha t covere dth e entir e state , a progra mo f correction , an dstaye dwit hit . The ywer e prompt . The ystaye dwit hit . B yth e tim e a lette r ha dcom e fro mth e FAA , the ywer e abl e t o provid e th e FA Awit hinformatio no f wha t the ywer e doing .

Thi s i s th e firs t tim e thi s incidenc e happene dwit hth e Guard , an dwhil e i t i s certainl yno t a trivia l incident , i t coul dhav e bee nmuc hworse , bot hi ninjurie s t o person s an dproperty . I t wasn't , an dal l thes e factor s shoul dhav e bee nconsidered , an d

w e fee l wer e no t considered .

4 9 C.F.R . Sectio n13.16(c ) set s ou t th e criteri a fo r determinin g penalties , an dth e element s I jus t mentione dar e intende d t o b e considered , an dthe nAppendi xAt o 4 9 C.F.R. , Subpar t - - Par t 107 , Subpar t (d) , ha s som e interpretiv e comment s o nho wth e statutor ycriteri a shoul db e applied , an di n

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 there , the ydiscus s th e fac t tha t first-tim e

incidents , an dthe ystres s th e fac t tha t i f correctiv e actio ni s take nan di t i s extensiv e an di t i s prompt , tha t a significan t amoun t o f weigh t shoul db e give nt o that , an dw e fel t i t wasn' t Ther e i s a matri xtha t precede s thi s comment . Th e commen t i s a t pag e 5 0 o f Exhibi t - - o r ta b4 , an da t pag e 4 3 an d 44 , ther e i s a violatio nan da matri xviolatio n offerin g fo r transportation , hazardou s materia l withou t shippin g papers , markings , e t cetera . Th e baselin e assessmen t fo r tha t i s recommende dt o b e $15,000 .

Th e interpretiv e commentar y suggest s i ncase s suc ha s this , whe ni t i s on e incident , on e transactio nan deve nthoug h ther e ar e severa l - - an di nthi s case , it' s 1 9 counts , tha t penaltie s shoul db e levie do n one , an di na sense , th e other s subsumed . I gues s i ncrimina l law , tha t woul db e th e lesse r include doffens e typ e approach .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 W e woul dreques t tha t th e $15,00 0

penalt ytha t i s suggeste di nth e matri xfo r offerin g a hazardou s materia l fo r shipmen t withou t notic e o r marking s woul db e a fai r an d sufficien t penalty , an dtha t i s wha t w e wil l demonstrat e t o th e Court .

JUDG E GOODWIN : Okay . Mr . Ellis ? MR . ELLIS : Yes . Ar e yo u read y fo r witnesses . You r Honor ?

JUDG E GOODWIN : Yes . MR . ELLIS : Th e FAAcall s Specia l Agen t Stac i Baldwin .

JUDG E GOODWIN : Didn' t I las t se e yo u i nArlington ? Wher e di dI las t se e you ? We'v e bee ndoin g to o man yo f these , Mr . Ellis . W e loo k a t th e face s an dcan' t remembe r wher e
w e sa w- - stan dan drais e you r righ t hand . Whereupon , STAC I BALDWI N havin g bee nfirs t dul ysworn , wa s calle da s a witnes s herei nan dwa s examine dan d testifie d
a s follows :

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Pleas e b e seated .

Stat e you r ful l nam e an dspel l you r firs t an d las t nam e TH E WITNES S Stac i Lynett e Baldwin , S-T-A-C-I , B-A-L-D-W-I-N .

MR . ELLIS : I think , give nth e arrangemen t o f th e microphone s here , I bette r sta ywher e I am .

JUDG E GOODWIN : Ye s DIREC T EXAMINATIO N B YMR . ELLIS : Q Okay . Al l right . Agen t Baldwin , wil l yo u pleas e stat e you r nam e agai nan d spel l i t fo r th e record . A Stac i Lynett e Baldwin , S-T-A-C-I , B-A-L-D-W-I-N . Q Okay . Pleas e tel l u s a littl e bi t abou t you r educationa l background . A I hav e a bachelor' s i ncriminal justice , a master' s i ncrimina l investigativ e psychology , an dI' mcurrentl yworkin g o na Ph.D . i npubli c safety .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q An dwha t i s you r curren t positio n

wit hth e FAA ? A Q th e FAA ? A Ahazardou s material s specialist . An dho wlon g hav e yo u bee nwit h

Fo r abou t te nyears . Okay . Ho wdi dyo u becom e involve d wit hthi s case ? A I t wa s sen t t o u s throug hou r Louisvill e office . Q Al l righ t An dwha t i s th e propose damoun t o f civi l penalt yth e FA Ai s seekin g i nthi s case ? A$30,000 . Q Ar e yo u awar e o f th e FA Asanctio n guidanc e i nFA

AOrde r Numbe r 2150.3(b) , Appendi xC ?

Q Yes . An ddi dth e FA

Aus e tha t sanctio n guidanc e t o determin e th e civi l penalt yi n thi s case ? A Ye s

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Doe s th e sanctio nguidanc e

propose di nthi s cas e conside r Respondent' s correctiv e action ? AYes . MR . ELLIS : Okay . You r Honor , I' m goin g t o offe r Exhibi t C- 1 int o evidence .

(The documen t referre dt o wa s marke dfo r identificatio na s Complainant' s Exhibi t 1. ) MR . ELLIS : Responden t ha s a cop y o f it .

Q B YMR . ELLIS : I s thi s th e sanctio nguidanc e tha t yo u used . Agen t Baldwin? AYes , i t is . MR . ELLIS : You r Honor , we' dlik e t o offe r Governmen t - - excus e m e - - Exhibi t C

1 int o evidence .

MR . CROWLEY : N o objection . MR . ELLIS : That' s reall yth e onl y question s I have , You r Honor .

JUDG E GOODWIN : Okay . I t woul db e

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 helpfu l i f you' dgiv e th e Cour t a littl e bi t

o f backgroun da s t o wha t happened , becaus e al l I kno wno wi s - - th e onl ythin g i nevidenc e I'v e go t righ t no wi s sanction s guidance .

MR . ELLIS : An dth e complain t itself . You r Honor .

JUDG E GOODWIN : An dth e complaint , bu t I don' t hav e th e complain t wit hme , s o coul dyo u giv e m e jus t a littl e bi t o f background . MR . ELLIS : Absolutel y

JUDG E GOODWIN : An dC- 1 fo r identificatio ni s receive dint o evidenc e a s C

1 . (The documen t referre dto , havin g

bee npreviousl ymarke dfo r identificatio na s Complainant' s Exhibi t 1 , wa s receive di n evidence. ) MR . ELLI S I nessence . You r Honor , thi s i s a fairl ytypica l hazardou s materia l case , excep t fo r th e Responden t bein g

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 a Nationa l Guar dunit , bu t a s fa r a s wha t

triggere dth e FAA' s involvemen t i nth e case , it' s fairl ytypical , eve nth e mos t typica l kin do f HAZMAT , whic hi s paint . No t al l paint s ar e hazardous , bu t man yo f the mare .

An dthi s wa s a shipmen t tha t spille dou t afte r bein g offere dt o UP S Next
Da yAir . I t spille dou t i nKentucky , whic h
cause s UP S t o contac t th e FAA , an dou r Agenc y investigate dth e matter , an d- -

JUDG E GOODWIN : Okay . Di dthi s agen t d o th e investigation ?

MR . ELLIS : Thi s agen t wa s no t th e on-sit e investigator . I t wa s ou r Louisvill e perso nwh o wa s on-site . However , Ms . Baldwi n wrot e u p th e evidenc e an dwrot e u p th e cas e an ddi dth e initia l penalt yassessment .

JUDG E GOODWIN : Okay . Ho wmuc h pain t wa s there ?

MR . ELLIS : Fou r gallons . An d accordin g t o EP S - - let' s se e - - on e gallo n leaked .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : An dwha t kin do f

pain t wa s it ?

excus e m e MR . ELLIS : I t wa s a clas s I I - -

clas s 3 , whic hi s flammabl e liquid , packin g grou p III , whic hconnote s th e flas hpoin t o f th e material , paint . Th e bran d
nam e wa s Duran t Dur-A-Ple x800 , whic hI' msur e yo u won' t b e familia r with , bu t i t - -

JUDG E GOODWIN : Yes . I t wa s clas s 3 flammabl e - - wha t wa s th e - -

whic h- - MR . ELLIS : Packin g grou p III ,

JUDG E GOODWIN : Okay . Anythin g further , Mr . Ellis ?

MR . ELLIS : That' s th e basic s o f it , You r Honor .

JUDG E GOODWIN : Mr . Crowley ? MR . CROWLEY : I d o hav e a coupl e o f questions . You r Honor .

Q CROSS-EXAMINATIO N B YMR . CROWLE Y 

### Ms
. Baldwin , d o yo urecal l

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 receivin g a lette r date dOctobe r 24 , 2008 ,

fro ma representativ e o f th e Guard ? A No , I d o not . Q Yo u don't ? I'l l sho wyo u on e an d
se e i f refreshe s you r memory . Wh o i s Debora h G . Kennedy? A Q She' s mymanager . Okay . An dsh e initiall ywa s dealin g wit hthi s incident . I s tha t correct ? A Sh e wa s contacte dby , I think , a Lieutenan t Collins . Q Okay . D o yo u recal l i f sh e sen t a lette r t o th e Guard , requestin g informatio no n Septembe r 22 , 2 008 ? ANo , sh e di dnot . MR . CROWLEY : Ma yI approac hth e witness . You r Honor ? I' dlik e fo r th e - - I' d lik e t o sho whe r thi s - -

JUDG E GOODWIN : Oh , g o ahead . Sure . MR . ELLIS : Thi s i s ta b1 ?

MR . CROWLEY : Yes .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . ELLIS : I kno wyo u showe di t

t o m e before .

MR . CROWLEY : Yes . I wante dt o
as k he r abou t thes e tw o letter s tha t I showe d yo u befor e

Q B YMR . CROWLE Y Ms . Baldwin , I' dlik e t o sho wyo u wha t we'v e marke da s th e Respondent' s Exhibi t 1 . (The documen t referre dt o wa s

marke dfo r identificatio na s Respondent' s Exhibi t 1. ) B YMR . CROWLEY : Q An dtha t i s a lette r - - tha t say s it' s a lette r addresse dt o you . I s tha t correct ? A Q Yes . That' s wha t i t say s An dar e yo u sayin g yo u neve r receive dthat ?

Q No . I neve r receive dthi s D o yo u hav e anyide a ho w- - woul d yo u tur nt o th e nex t page .

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 A(Complying. )

Q An dtha t i s a lette r fro mwhom ? AMyself . Q Okay . Wh o signe dit ? AI did , Q Whos e nam e i s i t over ? AM ymanager' s Q Okay . Bu t yo u signe dit . ARight . An dnex t t o he r name , i t says . For , whic hmean s I signe di t fo r my manage r Q A Okay . I s tha t you r signature? Ye s Okay . D o yo u recal l signin g thi s lette r now ? A Thi s letter ? Yes . Thi s i s th e lette r w e sen t t o you r office . Thi s wa s ou r lette r o f investigation . Q Okay . An ddi dyo u receiv e any response ? 

### ANo , Idi dnot . Q 

### Di dyou r

agen t

receiv ean y

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 response ?

A Q response ? A Q I amth e agent . Okay . Di dyou r offic e receiv e any

N o Th e nex t severa l pages , I' dlik e t o as k yo u i f yo u - - the yar e a serie s o f correspondence s withi nth e Guard . D o yo u recal l eve r seein g thos e copie s attache d t o thes e othe r tw o letters ? A No t attache dt o these , bu t I hav e
see nthes e documents . Q Okay . S o yo u hav e receive dthose . AI've see nthem . Q An dwoul dyo u no t hav e receive d them ? AThe yweren' t sen t t o me , s o I didn' t receiv e them , bu t I hav e see nthes e document s an dreviewe dthem .

JUDG E GOODWIN : Mr . Crowley , th e exhibit s you'r e referrin g to , ar e the yi nta b 1 an d2 ?

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . CROWLEY : Ye s We ' r e

discussin g no wta b1 , an dle t m e g o ahea d an d formall yoffe r Respondent' s Exhibi t 1 .

JUDG E GOODWIN : I s tha t th e sam e thin g that' s i nth e folder ?

MR . CROWLEY : Yes , i t is . MR . ELLIS : H e wrot e th e cove r lette r MR . CROWLE Y Ye s I' mno t puttin g tha t in .

MR . ELLIS : Okay . MR . CROWLEY : strictl ywha t you'v e got . I' mputtin g i n

MR . ELLIS : Okay . JUDG E GOODWIN : D o yo u wan t t o pas s tha t back ?

MR . CROWLEY : I hav e n o furthe r questions . You r Honor .

MR . ELLIS : Yo u don' t hav e copies ? I jus t wan t t o mak e sur e I - -

JUDG E GOODWIN : Here . (Handin g document. )

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# r ^

r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . ELLIS : (Perusin g document. ) MR . CROWLEY : I hav e n o furthe r questions , You r Honor .

JUDG E GOODWIN : D o yo u hav e any redirect ? MR . ELLIS : Jus t a question . You r Hono r Wha t w e offere da s Exhibi t C- 1 i s publishe dsanctio nguidance .

JUDG E GOODWIN : Righ t MR , ELLI S An da s th e Administrator' s publishe dsanctio nguidance , w e d o as k fo r deferenc e t o it .

JUDG E GOODWIN : And , Mr . Crowley , I normall ytak e - - eac hon e o f th e FA A attorney s ha s thei r ow nstyle . Man yo f the m presen t th e 215 0 a s a nexhibit . I normall y tak e judicia l notic e o f it . I t doesn' t mak e anydifference . W e alway s revie wth e guidanc e whic hexiste da t th e tim e o f th e inciden t i norde r t o - - jus t becaus e it' s jus t
a matte r o f practice . Bu t I'v e accepte d Complainant' s 1 fo r identificatio na s

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# n

n

n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Complainant' s 1 . An dwhat' s you r positio no n

Respondent' s 1 ? You'v e marke d i t fo r identificatio n

offere di t MR . CROWLEY : Yes . An dwe'v e

JUDG E GOODWIN : An yobjection , Mr , Ellis , t o receivin g Respondent' s 1 ?

MR . ELLIS : I jus t wan t t o completel yloo k a t ever ypag e

JUDG E GOODWIN : Sure . G o ahead , Tak e you r tim e

MR . ELLIS : I kno wI'v e see ni t before . (Perusin g document. )

MR . CROWLEY : An da s fa r a s C-1 , I hav e n o preferenc e eithe r ho wi t come s in . eithe r way .

bot hways .

Hono r JUDG E GOODWIN : Well , I'v e don e i t

MR . ELLIS : N o objection . You r

JUDG E GOODWIN : Respondent' s 1 fo r identificatio ni s receive dint o evidenc e a s

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# r ^

r1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Respondent' s 1 (The documen t referre dto , havin g bee npreviousl ymarke dfo r identificatio na s Respondent' s Exhibi t 1 , wa s receive di n evidence. ) JUDG E GOODWIN : An yothe r evidence , Mr . Ellis ?

MR . ELLIS : No , You r Hono r JUDG E GOODWIN : yo u wan t t o b e heard ?

MR . CROWLEY : Mr . Crowley , D o

d o hav e Respondent' s Exhibi t 2 , a cop yo f whic hwe'v e provide dt o Mr . Ellis , an dh e indicate dh e didn' t hav e anyobjectio nt o it . It' s a t ta b

[The documen t referre dt o wa s marke dfo r identificatio na s Respondent' s Exhibi t 2. ) MR . ELLIS : Th e onl yobjectio nI hav e i s tha t it' s no t signed .

JUDG E GOODWIN : Well , th e Cour t

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 hasn' t see nit , s o - - MR . CROWLEY : It' s a t ta b2 . JUDG E GOODWIN : Well , wha t you'v e don e i s you'v e offere da nobjectio ntha t isn' t signed . D o yo u hav e a witnes s wh o ca n authenticat e it ? I mean , it' s certainl ygoin g t o g o t o weight .

MR . CROWLEY : author , Ms . Gruetzne r We'l l cal l th e

Oh , okay . JUDG E GOODWIN : Oh , wai t a minut e

MR . CROWLEY : An dI - - JUDG E GOODWIN : D o yo u wan t he r t o stil l si t u p here ? Yo u ca nste p down . I instruc t yo u no t t o discus s you r testimon y prio r t o th e conclusio no f th e case .

excused. ) (Whereupon , th e witnes s wa s

JUDG E GOODWIN : Let' s g o of f th e record , whil e she' s retrievin g - -

(Discussio nhel dof f th e record . JUDG E GOODWIN : Le t m e restat e

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# f ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 tha t fo r th e record . Whil e w e wer e of f th e record , Mr . Elli s an dMr . Crowle ybot haffirme dtha t the y hav e stipulate dt o th e fact s se t fort hi nth e complaint , excep t a s amende db yMr . Elli s a t th e beginnin g o f th e hearing , whic hchange d th e dat e o f th e shipmen t fro m200 9 t o 2008 , a s se t fort hi nparagraph s 2 , 5 an d6 . I s tha t correct , Mr . Ellis ?

MR . ELLIS : Correct . JUDG E GOODWIN : An dMr . Crowle y di dno t object .

MR . CROWLEY : That' s correct . You r Hono r JUDG E GOODWIN : Al l right . Cal l you r witness , Mr . Crowley .

MR . CROWLEY : W e cal l Cathlee n Gruetzner . JUDG E GOODWIN : Stan dan drais e you r righ t hand , pleas e Whereupon ,

CATHLEE NURSUL AGRUETZNE R

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n

n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 havin g bee nfirs t dul ysworn , wa s calle da s a

witnes s herei nan dwa s examine dan dtestifie d

a s follow s JUDG E GOODWIN : Pleas e b e seated . Stat e you r nam e fo r th e record , an dspel l you r firs t an dlas t name , please .

TH E WITNESS : M ynam e i s Cathlee n Ursul a Gruetzner , C-A-T-H-L-E-E-N , Gruetzner , G-R-U-E-T-Z-N-E-R ,

JUDG E GOODWIN : Counsel , g o ahead . MR . CROWLEY : Than k you , DIREC T EXAMINATIO N B YMR . CROWLEY ; Q M s Gruetzner , ho war e yo u employed ? AI amth e senio r officia l mai l manage r fo r th e National Guar do f Texas . Q Okay . An dyo u wor k ou t o f Camp Mabr yher e i nAustin ? AYes , sir . I a mstatione da t Camp Mabr ya t thi s time . Q Whe nyo u say , th e Stat e o f Texas ,

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# f ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 doe s tha t mea nyou'r e i n- - you r wor k require s

yo u t o b e involve di nbase s othe r tha nCamp Mabry ? A Yes , sir . I tak e car e o f th e Stat e an dth e nin e components . Q Okay . Ver ybriefly , woul dyo u describ e wha t yo u do . A amth e administrato r an d trainin g instructo r fo r m ymai l couriers , handlers , an dmanagers . M yjo bi s t o kee p abreas t wit hth e number s an damoun t o f money , processin g o f incoming/outgoin g mail . I wor k wit hth e Unite dState s Posta l Service , Militar yPosta l Servic e Agency , th e Nationa l Guar dBureau , Postmaste r General , Postmaste r Genera l U.S . Posta l Service , an dm yAdjutan t Genera l Mayorg a a t thi s time . Q An dyou'r e a civilia nemploye e I s tha t correct ? AYes , si r Al l right . Ho wlon g hav e yo u hel d thi s position ?

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r ^

n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 AI hel dthi s positio nfo r 1 8 years .

si r Q I f yo u g o bac k two-and-a-hal f year s to , say , Jul yo f 2008 , wer e you r employmen t dutie s comparabl e t o wha t you'v e jus t describe dnow ? A No , sir . A t th e time , I wa s stil l administrativ e clerk . I ha dno t bee n officiall ymove dt o th e positio no f managemen t unti l August . Q Oh , o f 2008 ? AYes , sir . Bu t I wa s stil l holdin g th e positio na s a manager . W e wa s jus t waitin g fo r th e paperwor k t o g o through . Q Al l right . Fro mevidenc e that' s alread ybee nadmitted , w e understan dtha t o n Jul y2008 , a certai nStaf f Sergean t Jackso n ou t For t Bliss , Texas , attempte dt o mai l b y ai r fou r one-gallo ncan s o f paint , an dwhil e th e UP S courie r je t wa s o nit s wa yt o Louisville , on e o f the mpoppe dopen . Wer e yo u
awar e o f thi s incident ?

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 AMyunderstanding , sir , tha t Staf f

Sergean t Jackso nha dair-freigh t fou r can s o f paint , an di t ha darrive di nKentucky , an d tha t th e can s the nbrok e insid e th e warehous e o f Kentucky . Q Al l right . Bu t yo u becam e awar e o f thi s inciden t when ? AImmediately . Q I nJul yo f 2008 ? AYes , sir . I receive da phon e cal l fro mth e manage r o f Kentuck ywarehouse , advisin g m e t o com e straigh t t o th e warehouse , bu t I wa s - - Q D o yo u recal l wha t - - th e inciden t
occurre do nJul y3 . D o yo u recal l approximatel ywhe nyo u receive dth e call ? AI t woul db e afte r - - sir , I hav e i t writte ndow ni nm ynotes . I don' t hav e m y note s wit hm e a t thi s time . Q lik e that ? A Ada yo r two ? Aweek ? Somethin g

No
. Sam eday
.

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# f ^



# n

n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Sam e day ? Okay . An dit' s i n

evidenc e tha t o nth e 22n do f July , yo u me t - - o r excus e me . Le t m e rephras e that . O nth e 24t ho f July , yo u me t wit hth e secon di n comman da t Camp Mabr yt o determin e wha t t o d o t o thi s situation . A Tha t woul db e th e Garriso n Commande r Madden , Q Okay . Di dyo u hav e a meetin g wit h hi ma s AYes , si r Q - - th e evidenc e indicates ? Okay . An djus t briefly , wha t kin do f pla ndi dyo u determin e t o take ? A Sir , a t tha t time , whe nI talke d wit hColone l Madden , w e ha dt o fin dou t exactl ywha t trainin g th e staf f sergean t i n For t Blis s had . H e wa s no t on e o f mine . H e wa s jus t th e National Guardsma nwh o wa s tol d t o sen di t out . W e neede dt o pus hfo r prope r trainin g t o reinstat e i t again , t o b e notifie d whe nmyofficia l mai l handlers , clerk s o r

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 managers , ar e n o longe r wit htha t unit , t o

contac t me , s o I coul dge t a replacemen t ther e a s quickl ya s possibl e tha t i s traine d jus t - - Q memory ? A Q T o preserv e th e institutiona l

Yes , sir , becaus e - - Al l right . I' dlik e t o sho wyo u Exhibi t - - Respondent' s Exhibi t 2

witness ? MR . CROWLEY : Ma yI approac hth e

JUDG E GOODWIN : Sure , B YMR . CROWLE Y An dI' dlik e yo u t o loo k a t th e dat e o f tha t lette r an das k yo u i f yo u recal l Di dyo u writ e tha t letter ? AYes , sir , I did . Q Okay . Wha t w e hav e befor e u s i s
a nunsigne dcopy . AYes , si r Q Di dyo u eventuall ysig ntha t
an d- - 

### ATheorigina ldi dg o t o ou r the n

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# r - 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 lega l advisor , Captai nTristan .

Q Okay . O nwha t date ?

Jun e Th e dat e I sen t it , o nth e 10t ho f

Q Okay . MR . CROWLEY : I mov e t o admi t Respondent' s Exhibi t Numbe r 2 i nevidence .

JUDG E GOODWIN : Mr . Ellis . MR . ELLIS : maintai nth e objection . An dI wouldn' t normall yd o this , excep t tha t ther e wa s correspondenc e wit h Responden t afte r th e informa l conferenc e i n thi s case , afte r whic hw e requeste dcorrectiv e action , an dpar t o f tha t origina l respons e wa s Respondent' s Exhibi t 1 , bu t i t di dno t contai n thi s lette r fro mMs . Gruetzner , an dneithe r di dth e respons e t o th e Agency' s motio nfo r summar yjudgment .

MR . CROWLEY : Bu t ou r discover y respons e did . Th e reques t fo r productio ntha t

w e complie dwit hi nNovembe r containe dtha t copy .

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# r1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . ELLI S Fo r th e record , w e

jus t maintai nth e objection .

JUDG E GOODWIN : Okay . I' mgoin g t o overrul e th e objectio nan dreceiv e Respondent' s 1 a s Respondent' s 1 . Respondent' s 1 fo r identificatio ni s receive d int o evidenc e a s Respondent' s 1 .

MR . CROWLEY : It' s 2 . JUDG E GOODWIN : I' msorry . Respondent' s 2 fo r identificatio ni s receive d int o evidenc e a s Respondent' s 2 . Respondent' s 1 ha s alread ybee nadmitted .

(The documen t referre dto , havin g bee npreviousl ymarke dfo r identificatio na s Respondent' s Exhibi t 2 , wa s receive di n evidence. ) B YMR . CROWLEY : Q Ms . Gruetzner , woul dyo u - - th e middl e o f tha t lette r set s ou t i nnumber s certai nactions . D o yo u se e that ? A Yes , si r

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Wer e thos e th e action s tha t yo u

implemente dth e yea r before , i nJul yo f 2008 ? A Yes , si r Q Wer e the yi neffec t whe nyo u wrot e thi s lette r i nJul yo f 2009 ? ANo , sir , o nth e ground s tha t the y state dthe ydi dno t hav e th e educationa l fundin g a t tha t time . Q Okay . ABu t w e di dfin da wa yt o g o aroun d it , t o giv e i t free . Q Okay . Ho wdi dyo u d o that ? A Sharo nJone s i s ou r HAZMA T manage r fo r th e Nationa l Guard . Sh e wa s abl e t o g o throug hLittl e Rock , Arkansas , wher e w e hav e th e educationa l center , an dthe yha donlin e fre e t o al l militar ypersonne l an dcivilian s thi s training , s o w e wer e abl e t o d o i t o nou r computer s durin g ou r off-time . Q An ddi dyo u ensur e tha t th e trainin g wa s take nbyth e - - A 

### Yes , sir
. Everybod yget s alittl e

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 certificate , a smal l card , tha t show s tha t

the yhav e fulfille dth e cours e recommendations . Q An dd o yo u monito r wh o i s takin g i t an dwhe nthe yaren' t takin g it ? A Yes , sir , w e do . An dw e kee p goin g bac k t o them . Hey , guys , yo u nee dt o d o this , o r els e i t wil l becom e a nArticl e 15 , whic hi s a blac k mar k o nthei r records . S o the yusuall ydo . Sharo nJone s get s a cop yo f th e certificat e card , an dI ge t notification . Q Okay . A s I recall , i n2 008 , whe n yo u wer e talkin g t o th e deput ycommander , yo u wer e talkin g abou t usin g UPS . AYes , sir . W e wante dt o g o throug h th e UP S progra mo nHAZMA T an dfreigh t training , bu t i t wa s 5,00 0 pe r student . W e jus t di dno t hav e th e money . Q Al l right . Than k you . MR . CROWLE Y 

### questions
. You r

Hono r Ihav en o furthe r

JUDG EGOODWIN

: Cross , Mr
. Ellis ?

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . ELLIS : Yes . CROSS-EXAMINATIO N B YMR . ELLIS : Q Respondent' s counse l jus t aske d
som e question s abou t thei r Exhibit s 1 an d Exhibit s 2 . I' mgoin g t o focu s o n Respondent' s Exhibi t 2 , whic hi s th e Jun e 10 , 2009 , letter . A Yes , sir . JUDG E GOODWIN : I thin k sh e ha s th e origina l

Q B YMR . ELLI S Thi s documen t doesn' t lis t th e name s o f anyo f th e employee s wh o too k thi s training , doe s it ? AThat' s correct , sir . Q An di t doe s no t hav e a recor do f th e test s the ywoul dhav e taken . ATha t i s correct , sir . Q An dyo u mentione dtha t ther e wa s onlin e trainin g fro mUPS . A 

### No , sir
. Fromth eeducationa l

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 cente r i nLittl e Rock .

Q S o thi s documen t doesn' t contai n that ? ADoe s not , sir .

MR . ELLIS : N o furthe r questions . You r Honor . JUDG E GOODWI N Redirect , M r Crowley ?

Q REDIREC T EXAMINATIO N B YMR . CROWLEY : D o yo u recal l i nOctobe r o f 200 8 sendin g informatio nt o Ms . Stac i Baldwi no f th e FAA ? A No , sir , I don't . I probabl y did . I writ e everythin g down , sir , s o - - di dI writ e it ?

MR . CROWLEY : Ma yI approac hth e witnes s an dse e i f thi s refreshe s - -

JUDG E GOODWIN : Sho wi t t o Mr . Elli s first .

MR . CROWLEY : (Handin g document. ) JUDG E GOODWIN : I s tha t - - wha t

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1 2 3 wa s it ? - - ta b1 ?



# r ^ 6

7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . CROWLEY : It' s th e cove r

lette r t o ta b1 tha t I di dno t - -

JUDG E GOODWIN : Okay . That' s th e on e tha t yo u objecte dt o

MR . ELLIS : Correct . I believ e th e question' s bee naske dan danswered . though . JUDG E GOODWIN : Well , let' s - - I don' t kno wwha t qualit yi s yet .

TH E WITNESS : (Perusin g document. ) Oh , yes . I go t al l this . I
sen t he r bac k - - yes . I d o remember .

B YMR . CROWLEY : Okay . S o yo u recal l sendin g thi s t o he r o nOctobe r 24 , 2008 ? A Yes , si r Q Di dyo u eve r ge t an yresponse , askin g fo r mor e detail s o r mor e clarificatio no f wha t you' dsent ? ANo t unti l thi s year , sir . MR . CROWLEY : Okay . Than k you .

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 N o furthe r question s JUDG E GOODWIN : Mr . Ellis ? Anythin g else ?

recros s MR . ELLIS : N o redirec t - - n o

JUDG E GOODWIN : Okay . Anythin g else , Mr . Crowley ?

MR . CROWLEY : No , You r Honor . JUDG E GOODWIN : Ma'am , yo u ca n ste p down . I d o instruc t yo u no t t o discus s you r testimon ywit hanybod yprio r t o th e conclusio no f th e case . Yo u don' t hav e t o remai ni nth e courtroo munles s yo u wan t to .

TH E WITNESS : Than k you . Judge . (Whereupon , th e witnes s wa s excused. ) JUDG E GOODWIN : Anythin g els e fro meithe r party ?

MR . ELLIS : No , You r Honor , JUDG E GOODWIN : D o yo u wan t t o argu e o r submit ? I mean , d o yo u wan t t o brie f i t o r submit ?

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# n

n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . CROWLEY : I woul dalway s

rathe r mak e th e ora l argument .

JUDG E GOODWIN : Okay . Ge t i t ou t
o f th e way ?

Ellis ? MR . CROWLEY : Yes .

JUDG E GOODWIN : Al l right . Mr .

MR . ELLIS : Coul dyo u giv e m e a coupl e minutes ?

JUDG E GOODWIN : Let' s d o this . Let' s tak e a brea k unti l - - I can' t tel l i f it' s 2 0 minute s o f 10:0 0 o r te nminute s o f 8:00 . MR . ELLIS : Twent yo f 10:00 .

JUDG E GOODWIN : Okay . It' s th e perspectiv e o nth e clock . Let' s tak e a brea k unti l fiv e minute s o f th e hour . We'l l g o of f th e record .

taken . (Whereupon , a shor t reces s wa s

JUDG E GOODWIN : Mr . Ellis , d o yo u wan t t o b e heard ?

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . ELLIS : Yes . I f i t please s

You r Honor , I' mgoin g t o sta ya t th e table , becaus e I hav e a lo t o f document s I ma yhav e t o refe r t o JUDG E GOODWIN : Sure . CLOSIN GARGUMEN T O NBEHAL F O F TH E COMPLAINAN T MR . ELLIS : Firs t o f all , than k you . You r Honor , fo r hearin g thi s matter . Than k yo u t o Responden t fo r appearin g a s well . Th e FAA' s purpos e i nthes e matter s i s no t onl yt o penalize , bu t als o t o instruc t wher e w e fee l lik e ther e need s t o b e som e instructions , an dw e don' t hol danyil l wil l t o anyon e wh o ask s fo r thes e hearings , an d

w e leav e i t t o th e Judg e t o mak e th e fina l decision , an dw e wil l accep t that .

Unde r th e regulator yauthority , whic hbegin s i n4 9 U.S.C . Sectio n5123 , an d unde r th e FA

Asanctio nguidance , whic h appear s i nFA

AOrde r Numbe r 2150.3(b) , Appendi xC , th e FA Aca nsee k a maximu mcivi l

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# r - 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 penalt yo f $50,000 , multiplie db yeac han d

ever ydistinc t regulatio ncite di nth e complaint , i f necessary .

Ther e i s als o a regulatio nwhic h periodicall yraise s th e maximu msanctio n unde r 1 4 C.F.R . Sectio n13. 3 01 , an d there' s a tabl e unde r Sectio n13.305(d ) whic hshow s th e inflationar yadjustment s t o th e civi l penalties . Her e th e FAA , however , i s seekin g a penalt yo f $30,000 . Thi s amoun t
wa s decrease dfro mth e origina l amoun t o f $33,950 , t o giv e consideratio nt o Respondent' s attempt s a t correctiv e action , eve nthoug hth e Agency , a s w e wil l explain , th e trainin g - - i ntrainin g record s sen t t o th e FA Aa s correctiv e actio ndi dno t mee t th e requirement s o f th e regulations .

Th e FA Aoriginall ypublishe dth e FA Apolic yo nenforcemen t o f th e hazardou s material s regulation s penalt yguideline s bac k i nApri l 2 1 o f 1999 , an dI' mhapp yt o sa yI wa s on e o f th e author s o f tha t

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 origina l penalt yguidance . I' mver y

familia r wit hit , an dthi s polic ywa s publishe di nth e Federa l Registe r a t tha t tim e a s well . I t i s no wincorporate da s Appendi xC t o FA

AOrde r Numbe r 2150.3(b) . An dunde r thi s policy , a civi l penalt yi s determine db yanalyzin g th e statutor yfactor s presen t i nth e Federa l Hazard s Material s Transportatio nstatute . A s I mentione dbefore , 4 9 U.S.C . 5123(a ) include s th e nature , circumstances , exten t
an dgravit yo f th e violation , th e degre e o f culpabilit yo f th e violator , an yhistor yo f pas t violations , th e abilit yt o pay , an dany effec t o nth e abilit yt o continu e t o d o busines s an dothe r matter s a s justic e require s Th e statutor yfactor s ar e the n give na specifi c weigh t t o determin e th e aggregat e weigh t o f th e case , an dthe n finally , w e us e a matri xt o furthe r narro w th e penalt yrange , an di nthi s case , i t wa s

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 don e a s follows : Unde r th e curren t policy , th e firs t categor yo f factors , whic hg o t o th e natur e o f th e materia l itself , nature , circumstances , exten t an dgravit yo f th e violation , analyze s th e materia l itsel f an d th e potentia l danger s i t presented . Respondent' s shipmen t involve dflammabl e liqui do r clas s 3 hazardou s materials , an d unde r th e curren t polic ythi s materia l i s classifie da s categor yB material , whic h carrie s a moderat e weigh t o r moderat e fina l aggregat e weight .

Nex t th e polic yrequire s th e FA A t o conside r th e violator' s degre e o f culpability , an dw e foun dther e t o b e n o mitigatin g o r aggravatin g factor s i nthi s category . Th e sanctio nguidanc e state s tha t
a Respondent' s lac k o f a violatio nhistor y ma yb e aggravating , bu t i s no t mitigating . Aviolation-fre e histor yi s expecte dt o b e th e norm . An dtha t I cit e i nth e matte r o f

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 TC I Corporation , FA AOrde r Numbe r 92-7 7 fro m 199 2 Therefore , th e fina l aggregat e weigh t o f thi s cas e wa s considere d t o b e moderate , an dafte r assignin g a naggregat e weigh t o f moderat e t o th e case , th e nex t ste p i s t o firs t defin e th e matrix . Becaus e thi s shipmen t containe da nundeclare d shipmen t tha t wa s withi nth e quantit y limitations , thi s cas e fall s int o offens e categor y2 unde r th e matrix , an dthi s determinatio nwoul db e mad e b ylookin g u p th e prope r shippin g nam e o f th e hazar d material , i nthi s case , paint , an dth e correspondin g column s 9(a ) an d(b ) o f th e 4 9 C.F.R . Sectio n172.101 , hazardou s material s tabl e Thi s cas e woul dfal l unde r a t leas t column(b ) o f th e matrix , whic hi s busines s entity , an dw e say , a t least , becaus e th e Responden t i s no t a nindividual , bu t w e didn' t fee l tha t w e shoul drais e

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# n

r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 thei r categorizatio nt o th e poin t o f bein g

somebod ytha t regularl yhandle s HAZMAT , s o
w e pu t the mi nth e nex t categor yafte r individuals , whic hi s busines s entity , whic h i s categor y2 , column(b ) o f th e matrix .

An dtha t carrie s a rang e o f penaltie s fro m1,50 0 fo r minimu mweigh t
case s t o $8,20 0 fo r maximu mcase s fo r eac h violation . Th e moderat e rang e o f th e matri x range s fro mapproximatel y$3,73 3 t o approximatel y$5,966 , an dth e media no f th e rang e i s $4,850 . An dth e original $33,95 0 propose dcivi l penalt ywoul dhav e bee n supporte dbyassignin g a $4,85 0 penalt yfo r eac hviolatio ngroup .

Th e FAAwoul dhav e bee njustifie d i nchoosin g anypenalt yi nth e moderat e rang e fo r seve nviolatio ngroups , s o eve n thoug hther e ar e multipl e violation s cite d i nth e complaint , w e grou p them , i nthi s case , int o seve ncategories , on e fo r eac ho f th e following : shippin g papers , labels .

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 marking , packaging , lac k o f training ,

releas e o f th e material , an dlac k o f emergenc yrespons e information , whic h produce da tota l amoun t o f $33,950 .

Now , th e FA

Agav e Responden t credi t fo r th e trainin g i t implemente d b y reducin g th e penalt yt o $30,00 0 whe ni t issue dit s fina l notice .

Now , I wan t t o tal k a littl e bi t
mor e abou t mitigation . Eve nthoug hth e evidenc e indicate s tha t Respondent' s correctiv e actio ndoesn' t mee t th e requirement s o f th e regulation , I'l l sa ya littl e bi t mor e abou t wh yi na minute . A s a good-fait hoffe r o f settlement , th e FAAha s mitigate dth e civi l penalt yfro mth e justifie dorigina l amount . Responden t wa s provide dwit ha ninforma l conferenc e o nMa y 2 0 o f '09 . Th e FA Ainforme dResponden t tha t i t neede dt o se e documentatio no f an y correctiv e actio ni t wante dth e FAAt o

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# n

r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 conside r byJun e 3 . Awee k afte r tha t

deadlin e date , o nJun e 10 , Responden t provide dth e document s the ywante dth e FA A t o consider , an dw e di dpreviousl yattac ha cop yo f thos e t o ou r motion , bu t it' s prett y muc hsimila r t o eithe r ta b1 o r ta b2 o r both . Thes e document s di dno t mee t th e applicabl e trainin g requirement s o f 4 9 C.F.R . Sectio n172.700 , e t seq . Fo r example , th e documen t contain s n o documentatio no f anyo f th e type s o f trainin g require db y4 9 C.F.R. , Sectio n 172.704(a) . Th e Jul y28 , '09 , letter , everythin g that' s liste dunde r th e fiv e type s o f correctiv e actio ntha t ar e described , they'r e al l prospective . Nothin g ha dbee ncomplete da t tha t time . Additionall y- - on e moment . You r Honor .

(Pause. ) MR . ELLIS : Ther e wa s n o recor d
o f trainin g i nth e document s a s well .

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Again , i nth e Jun e 10 , '09 , letter , a s th e

witnes s testifie dthi s morning , ther e wer e
n o name s o f employee s traine dunde r tha t - - a t tha t tim e a s well , an dthi s wa s a yea r afte r th e origina l incident . Als o th e languag e i ntha t wa s als o prospective , s o ther e wa s reall yn o documentatio nunde r th e regulation s tha t th e FA Awoul drequire , an d thes e requirement s ar e se t ou t ver yclearl y i n4 9 C.F.R . Sectio n172.704(d) , whic h require s wha t i s necessar yfo r a prope r trainin g record .

A s w e state dearlier , n o mitigatin g factor s ar e present . Eve ni f th e correctiv e actio nResponden t submitte d
wa s - - i s considere dbyth e Judg e t o b e legall ysufficient , accordin g t o th e HMRs , th e kin do f correctiv e actio nResponden t presente dca nb e considere dneithe r timel y no r comprehensive , an dI' mcitin g a TS I Corporation , whic hi s Orde r Numbe r 92-77 , pag e 21 , fro m1992 , whic hstates , " A

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 carrier' s swif t actio ndesigne dt o bette r

ensur e futur e complianc e ma ywarran t suc ha reduction. " Bu t th e DO T ha s als o - - th e Administrato r ha s als o state dtha t n o credi t shoul db e give nfo r trainin g tha t i s legall y require dfo r Respondent' s employee s an d agents , s o eve ndoin g trainin g afte r bein g notifie do f a violation , doin g th e trainin g that' s require db yth e regulation s i s no t somethin g tha t cause s th e FAAt o requir e any reductio ni ncivi l penalty , bu t w e wante dt o giv e som e credi t fo r th e effor t tha t the y showe dus . Bu t w e woul db e remis s i n allowin g peopl e t o thin k tha t record s tha t don' t mee t th e requirement s o f th e regulatio nar e sufficient .

I als o wante dt o cit e FA AOrde r 2150.3(b) , Appendi xC , a t C-11 , whic hsays ,

" Acorrectiv e actio ntha t result s i n mitigatio ni s remedia l actio ntha t exceed s th e minimu mlega l requirements. "

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# f ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Th e transportatio no f hazardou s

material s i s inherentl ydangerous . A hazardou s material i s define di nth e HM Ra s a substanc e o r materia l tha t th e Secretar y o f Transportatio nha s determine di s capabl e o f posin g a nunreasonabl e ris k t o health , safet yan dpropert ywhe ntransporte di n commerce , an di t ha s bee ns o designated . That' s 4 9 C.F.R . Sectio n171.8 .

Therefore , shipper s o f inherentl y dangerou s materials , suc ha s hazardou s materials , hav e a ver yhig hdut yo f care , eve ni f the yar e a first-tim e shipper , becaus e o f th e natur e o f thes e materials . The ypresen t a dange r unt o themselves , regardles s o f th e inten t o f th e perso n offerin g it , s o a perso ncanno t prepar e an d offe r a shipmen t withou t th e prope r trainin g an dpreparation , packaging , marketin g an d labelin g o f th e shipment .

I nadditio nt o th e inheren t dange r o f thi s material , th e particula r

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 shipmen t wa s undeclared , meanin g ther e wa s

n o paperwork , marking s o r labels , t o le t th e carrier , th e pilot , o r anyon e els e kno wth e danger s insid e tha t box . A nundeclare d shipmen t destroy s th e entir e regulator y schem e se t u p t o preven t suc hpackage s fro m bein g transported .

Ther e wa s n o emergenc yrespons e informatio no r telephon e numbe r wit hth e shipment , t o le t th e pilo t kno who wt o properl ysegregat e th e materia l o r t o le t th e firs t responder s reac t properly , i f ther e wa s a spil l o f th e materia l a s ther e wa s i nthi s case . A s explaine di ndetai l above . Responden t ha dth e knowledge , o r i f i t exercise dreasonabl e care , woul dhav e ha d knowledg e tha t th e shipmen t containe d hazardou s materials , an dunde r th e circumstances , th e propose dcivi l penalt yi s supporte db yth e statute , th e regulation , th e policy , an dth e cas e law .

I jus t wante dt o addres s on e

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 thin g Responden t sai di nopenin g regardin g

th e regulation s an dth e sanctio nguidance . Responden t state dthos e wer e no t th e FAA' s sanctio nguidance . Thos e wer e pipelin e an d hazardou s material s sanctio nguidance . Eac h DO T mod e i s allowe dt o d o it s ow nsanctio n guidance , an dbein g th e ai r mode , th e FAA' s sanctio nguidanc e tend s t o hav e th e highes t penalties , becaus e naturally , onc e a packag e i s i nth e air , there' s reall ynothin g tha t
ca nb e don e onc e it' s pu t u p there , s o al l th e regulation s exis t t o preven t undeclare d HAZMAT s fro mgettin g o nth e plane , an dth e sanction s are , therefore , higher .

Wherefor , i nconclusion . You r Honor , th e Complainan t request s th e Administrativ e La wJudg e t o issu e a norde r fixin g th e civi l penalt ya t th e requeste d amount , $30,000 .

JUDG E GOODWIN : Mr . Crowley . CLOSIN GARGUMEN T O NBEHAL F O F TH E RESPONDEN T

MR . CROWLEY : Ma yi t pleas e th e

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; 5



# n

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Court , Counsel , a s I mentione di nmyopenin g

statement , th e Guard , fro mth e outset , ha s responde dt o thi s situation . The yhav e no t fough t th e liabilit ypart . The yassume d responsibilit yfo r it . I nth e sam e month , Jul yo f 2008 , Ms . Gruetzne r - - an dI hop e I pronounc e he r nam e righ t - - wa s acting , developin g a pla no nho wt o implemen t correction s t o compl ywit hth e regulations .

Sh e sen t a cop yo f tha t t o th e FA Ai nOctober , an dthat , wha t sh e sent , i s ther e i nExhibi t 1 . Sh e di dno t receiv e any feedbac k tha t tha t pla nwa s inadequat e o r tha t othe r matter s shoul db e addresse d b y it . The nthi s actio nfo r a civi l penalt y wa s filed . Th e Agency , th e Guard , di dno t oppos e o r contes t th e liabilit yportions , bu t fel t th e initia l penalt yan dth e ultimat e penalt yo f 30,00 0 wa s excessive , an dI hav e t o agre e wit hthat .

Whe nyo u conside r al l th e factor s - - an dcounse l ma ywel l b e right . I

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ma yhav e - - I' m no t goin g t o conced e th e poin t righ t now , bu t th e Appendi xAtha t I mentione dma yno t b e applicable , bu t counsel' s ow nexhibi t basicall yemploy s th e sam e criteria , an dI thin k it' s fai r fo r u s t o argu e thos e criteria .

A nundeclare dshipmen t happened , an dth e penalt yfo r tha t i s $15,000 , an d that' s wha t w e sugges t i s a prope r civi l penalty , becaus e th e Guar dtoo k action , too k actio npromptly , too k actio nextensively . The ydidn' t jus t disciplin e Staf f Sergean t Jackso no r focu s thei r effort s o nFor t Bliss . The ymad e a statewid e - - the y develope dstatewid e program s an dfollowe du p o nthem , an dthe ysen t copie s o f wha t the y wer e doin g t o th e FA Ai nth e fal l o f 2008 . Th e natur e o f thi s shoul db e considered . Paint , yes , i s flammabl e substance , an dyo u shoul dno t shi p i t withou t complyin g wit hever yregulatio ntha t i s applicable . Bu t o nth e othe r hand , i t

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# n

r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 wasn' t a crat e o f grenade s o r somethin g tha t

Sergean t Jackso nsent . Th e pain t di dcom e open , an di t spilled . An dfortunatel yi t didn' t ignite . I nfact , non e o f th e othe r package s wer e eve nhurt . The ywer e abl e t o shi p the moff . Fou r gallon s o f paint , on e gallo ncam e open .

Th e Guar dtoo k responsibility . I t too k correctiv e actio nextensivel yan d promptly . Ther e ha s bee nn o repea t o f this . Thi s i s th e firs t tim e th e Guar dha s bee n face dwit hthi s situation , an dI think , i f anything , a $15,00 0 fin e i s appropriate , becaus e u p unti l righ t now , thi s day , neithe r I no r th e Guar dha s bee nawar e o f wha t i s lackin g i nth e safet yprogram s tha t hav e bee nimplemented . Ther e ha s bee nn o feedbac k fro mth e FA Afo r ove r tw o year s a s t o wha t wa s inadequate .

Whe nth e informa l conferenc e wa s held , i t simpl ycam e dow nt o a reques t fo r documentatio no nwha t ha dbee nimplemented .

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# n 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 W e sen t it , go t n o response . Fou r month s

later , w e ge t th e notic e tha t th e fina l penalt yi s goin g t o b e imposed , an donl y afte r that , i nrespons e t o mylette r expressin g surprise , wer e w e tol dthat , well , i t wa s inadequate . An dwe'v e neve r bee ntol dhow .

Ther e wa s a referenc e simpl yto . Se e 172.700 , e t seq. , whic hi s abou t fiv e o r si xsections . A s indicate di nou r brief , th e action s take nb yth e Guar dd o compl y wit htha t particula r section , 172.70 3 an d 704 . An dusin g th e criteri a o f th e regulation , 13.16(c) , I thin k i t i s fai r t o hol dth e Guar du p a s a nentit ytha t i s a mode l o nho wt o respond .

Unti l thi s fina l argument , I ha d

n o ide a wha t wa s lackin g i nth e Guard' s program s tha t the yimplemented , an dno w we'r e tol dtha t th e record s don' t mee t th e requirement s o f th e regulation . I respectfull ydisagree . Bu t ha dw e bee ntol d

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2 yo u know , w e coul dhav e take nmor e 3 correctiv e action . 4 I don' t kno wwha t mor e th e Guar d 5 coul dhav e done , an dI thin k i t i s fai r i n 6 assessin g a penalt yt o asses s a penalt yfo r 7 undeclare dshipment , $15,000 . Th e othe r 8 allegation s shoul db e subsume dwithi nthat , 9 becaus e the yar e par t o f th e sam e 1 0 transaction . An dI represen t governmenta l 1 1 entitie s i nmypractice . 1 2 Th e Attorne yGenera l represent s 1 3 stat e agencie s whe nthe yge t t o court , an d I 1 4 kno who wagencies , whe nthe ypu t a comb- - 1 5 star t combin g throug hthei r ow nregs , ca n 1 6 marsha l significan t numbe r o f violation s i n 1 7 th e sam e transaction . That' s what' s 1 8 happene dhere , an dw e woul das k tha t th e 1 9 Cour t tak e a common-sens e approach , fin e th e 2 0 Guar dfo r undeclare dshipmen t $15,000 , an d 2 1 i nfairnes s t o th e effort s th e Guar dha s 2 2 made , subsum e th e res t o f th e fine s int o

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 tha t amount . Jus t mak e on e fin e fo r

everythin g tha t happened .

An dprobabl yt o th e relie f o f everybody , I' mno t goin g t o g o int o mor e detail . I woul das k th e Cour t t o rea dou r memorandum , becaus e tha t doe s describ e som e o f th e specific s an dho ww e thin k the y apply , an dI d o than k th e Cour t an dcounse l fo r al l o f you r time .

rebuttal ?

Hono r JUDG E GOODWIN : Mr . Ellis , any

MR . ELLIS : Jus t a bit . You r

REBUTTA L CLOSIN GARGUMEN T O NBEHAL F O F TH E COMPLAINAN T MR . ELLIS : Again , Responden t mentione ddocumentatio nsen t t o th e FAAi n Octobe r o f '08 , I believe . Again , ou r record s don' t sho wan yreceptio no r receivin g o f thes e documents , an d a s I indicate di nmyclosing , yo u know , th e document s tha t wer e sent , eve nafte r th e

(202 ) 234-443 3 NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 informa l conference , stil l don' t mee t th e 2 requirement s o f th e regulation , an d 3 certainl yb yth e tim e th e informa l 4 conferenc e arrive s i s reall yto o lat e t o 5 conside r Respondent' s correctiv e action s t o 6 b e i nanywa yswift . 7 An di t i s no t th e Agency' s 8 responsibilit yt o trai nRespondent' s counse l 9 o r fo r the mt o - - o r t o infor mthe mho wthe y 1 0 hav e t o trai nthei r personnel . I nfact , i n 1 1 mos t cases , i t wouldn' t b e possibl e fo r th e 1 2 Agenc yt o d o that , no t knowin g th e specifi c 1 3 natur e o f th e employe e structur e an d 1 4 employee s i nth e location s tha t tha t 1 5 trainin g woul db e affecte d by . 1 6 A s I als o state dearlier , w e d o 1 7 wan t i t t o b e clea r tha t w e di doffe r th e 1 8 reductio nw e offere dbecaus e w e d o thin k 1 9 the ygav e a neffort . However , again , w e 2 0 woul db e remis s i nofferin g anymor e tha n 2 1 that , becaus e thes e record s ar e al l 2 2 prospective . I mean , the yd o sho wa neffor t

(202 ) 234-443 3 NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 t o d o something , bu t it' s incomplete . Ever yste p i nth e earlie r Jul y2 8 lette r i s describin g a ste p i nth e future , an deve nth e lette r a yea r later , th e trainin g tha t the ydescribed , fo r example , th e UP S modules , ar e als o prospective , s o thi s i s no t somethin g tha t coul db e considere dt o b e meetin g th e requirement s o f Sectio n172.704(d) .

An djus t i nconclusion , th e FAA obviousl yput s a grea t dea l o f wor k i n settin g thes e civi l penalties . The yar e th e foca l poin t o f al l thes e HAZMA T cases , becaus e w e kno wtha t i t i s th e par t o f th e cas e tha t wil l b e scrutinize db yResponden t
an db yth e ALJ , an di ndoin g that , w e pu t a grea t dea l o f wor k i nou r sanctio nguidance .

An di t i s wha t wa s followe d precisel yi nthi s case . Al l statutor y factor s wer e considered , an dth e penalt yo f $30,00 0 wa s se t accordingly , an dw e as k You r Hono r t o fi xth e penalt ya s such .

(202 ) 234-443 3 NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Okay . Than k you ,

gentlemen . We'l l g o of f th e record . A decisio nwil l b e forthcoming .

(Whereupon , a t 10:2 0 a.m. , th e hearin g i nth e above-entitle dmatte r wa s concluded. )

(202 ) 234-443 3 NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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