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UNITED STATES DEPARTMENT OF TRANSPORTATION 

· FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, DC 

In the Matter of: TEXAS ARMY NATIONAL GUARD 

FAA OnlerNo. 2012·3 

Docket No. CP09S00014 

FDMS No.l AA~2009-1045 1 

Served: May 22, 2012 

DECISION AND ORDER2 

J. Introduction 

Respondent Texas Army National Guard (Respondentl has appealed the written 

initial decision of Administrative Law Judge (ALJ) Richard C. Goodwin.4 Th<:J ALJ 

a3sessed a $30,000 civil penalty for violations ~fthe Department ofTransportation 

(DOT) Hazardous Materials Regulations (HMR) (49 C.P.R. Parts 171-178V 

1 Materials !iled in the FAA Hearing Dock('t (except for materials tiled in security case~) 

are also available for viewing at the following lntcrnct address: )4iww.regu/ati<~!J-'~:g:.ov. 

2 The Administrator's civil penalty decisions, along with i11dexes ofthe decisions, the rules 

of practice, and other infonnation, are available on the internet at the following address: 

www.jaa. gov/aboutloffice -.orglheadquarrer.~ _ Q{fices/agclpol_ adjudication! AGC400/ 

Civil_Penalty. Tn addition, Thomson Reuters/West Publishing publishes f.~dcral Aviati..Qn 

Decisions. Finally, the dccit'ions are available through LRXfS (TRANS library) and WcstLaw 

(.FTRAN·F AA database). For additional infonnation, see the Web site. 

3 In the original complaint, Complainant captioned this case, Federal Aviation 

Admt11iMration v. Executive Office of the State ofTexas. In its answer, Respondent stated that its 

name is "Texas Army National Guard." Complainant amended its complaint accordingly. The 

r\LJ then changed the caption to In rhe Mat(er of Texas Army National Guard Order Granting in 

Part and Denying in Part Motion for Df;cision at 1 ,n.t (July g, 2010). 

~A copy ofthe ALl's written initial decision is att.ached. 

5 The Appendix contains the specific regulations at issue. 

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This decision af1irms the A f J' s decision. It holds that Respondent is not a federal 

agency that would be exempt from the FAA'sjurisdiction under the federal hazardous 

materials transportation law, 49 U.S.C. Chapter 51. Regarding the $30,000 sanction 

asses:;ed by the ALJ, this dccisi~m 1inds lhat it is within the parameters set by the 

agency's sanction guidance (which factors in all the statutorily required considerations), 

"• 

and that there is no reason to disturb it. 

II. Background 

On or about July 2, 2008, on~ ()!'Respondent's employees in Austin, Texas- Staff 

Sergeant Anthony Jackson, 1836111 Transportation Company, Fort Bliss, Texas- offered a 

fiberboard box containing four 1-gallon cans of a hazardous material (Durant Duraplex 

&00 Exterior Alkyd flat paint) for shipment to United Parcel Service (UPS). Jack:son 

addressed the shipment to Staff Sergeant Lynette Patterson, i\.m1ory, Killeen, Texas. 

The proper shipping nan1e of the material was Paint. It was in Hazard Class 3 

(Flammable Liquid), Packing Group III, with an assigned identification number of 

UN1263. The proper label was "FLAMMABLE LIQUID." 

On or about July 3, 2008~ UPS flew the shipment to its sort facility in Louisville, 

Kentucky. UPS ground personnel discovered that about I gallon of the paint had leaked 

into and through the fiberboard container. 

Respondent admitted in its Answer that it violated the HM R because the shipment 

lacked hazardous materials shipping papers, labels, markings, packaging, and emergency 

response infonnation. Further, Respondent admitted that it failed to train its employees 

as required by the HMR. 

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Because Respondent acknowledged liability, the 1\.LJ found that Respondent 

committed the alleged violations and limited the hearing to the issue of sanction. The 

AL.T found that the $30,000 civil penalty sought by Complainant was appropriate. He 

wrote that undeclared shipments of hazardou~ materials pose a special risk and that 

leakage is an aggravating factor. (Initial Decision at 4-5.) He rejected the idea that 

Respondent's first-time violator status should be mitigating, citing precedent to the effect 

that a violation-free history should be tl~e norm. (!d. at 5.) The ALJ stated that ; 

Respondent's actions following the incident were commendable, but were not "systemic 

or far-reaching," ~hich he said would be necessary to !ower an otherwise reasonable 

assessment. (!d.) The paint's failure to ignite, he said, was fortuitous, not mitigating; 

ignition would have been an aggravating factor. (/d.) finally~ he found that Midtown 

Neon Sign Corp., FAA Order No. 1996-26 (August 13, 1996) suggested that 

Complainant's proposed sanction of$30,QOO was reasonable. (ld.) Midtown involved an 

undeclared, leaking shipment of two 1-gallon cans of paint for which Midtown was fined 

$25,000. The ALJ pointed out that the maximmn penalty has gone up from a base of 

$25,000 in Midtown to $50,000. The ALJ concluded by assessing a $30,000 civil 

penalty, which 1Je said reflected all the facts and circumstances of the case, including the 

riskto air transportation. the need for deterrence, the statutory factors, and agency policy. 

(ld. at 5-6.) 

III. Jurisdiction 

Complainant brought this case under the federal hazardous materials 

transportation law, which provides that: "a person that knowingly violates this chapter or 

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a regulation ... issued under this chapter is li~ble to the United States Govemment for a 

civil penalty .... " 49 U.S.C. § 5123(a)(l). For purposes of this law, the term person: 

includes a government ... or authority of a government ... offering 

hazardous material for transportatioJi in commerce , .. but docs not include 

... a depattmcnt, agency, or instrumentality of the LFcdcral] Government. 

49l.J.S.C. § 5102(9). 

Respondent claims to.be a federal agency and argues that Complainant therefore 

does not have jurisdiction over it. (Appeal Brief at 5-6.) It states that this is so, quoting 

the U.S. Court of Appeals for the Fifth Circuit, "because of the federal nature of the 

employees fthat it) supervises and the subshmtive tederallaw that govcms [its) duties." 

Lipscomb v. FLRA, 333 F.3d 611 (5th Cir. 2003), reh 'g and reh 'g en bane denied (5111 

Cir. 2003), cert. denied, Cross v. FLRA, 541 U.S. 935 (2004). It contendsthat its civilian 

technician named Cathleen Gruetzncr, who is in charge ofRespondenL's mailing 

procedures, is a federal employee tmder 32 U.S.C. § 709, which gc>Verns National Guard 

technicians ("Technicians: employment, use, status"). 

Respondent's argument that it is a federal agency is not compelling for the 

following reasons. Gruetzncr did not become involved until after the incident, when .she 

attempted to take corrective action on Respondent's behalf. (Exhibits R-1 and R·2.) 

' 

Respondent relies on the l-ipscomb case quoted ab'ove for the proposition that state 

national guards are federal agencies, but the Lipscomb court expressly limited its holding 

to cases involving the .Federal Service Labor·Managemcnt Relations Act Lipscomb, 333 

. ' 

F.3d at 613. 'The instant case, however, involves the federal hazardous materials 

transportation law. According to prct:edent, a state national guard is not a federal agency 

for purpo$eS of the federal hazardous materials transportation where the guard bas not 

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b~en ordered inlo federal service. Louisiana Air National Guard, I 59th Fighter Wing, 

FAA Order No. 2002-23 at 7 (November 22, 2002). Respondent does not claim that it 

was ordered into federal service. 

In conclusion, Respondent is not a federal agency for purpose~ of the 1(:,deral 

hazardous materials transportation law. As a result, the FAA has subject-matter 

jurisdiction over Respondent in this matter under 49 U.S.C. § 5123. 6 

IV. Sanction 

. Th(.) ALJ assessed a $30,000 civiJ penalty. Respondent challenges the sanction 

amount on appeal. 

At the tirne of the violations in this case, the maximum civil penalty that 

Complainant could assess under the federal hazardous materials transportation law was 

$50,000 per violation, unless the violation caused death, serious illness, severe injury, or 

substantial destruction of property (not the case here), in which case the maximum was 

$100,000 per violation. 49 U.S.C .. § 5123(a)(1 ), (2). The minimum civil penalty was 

$250 except in the case of a training violation, in which case the minimum was $45007 

49lJ.S.C. § 5123(a)(l), (3). 

The civil penalty guidelines that apply to this case are found in FAA Order 

No. 2150.3B, entitled "FAA Compliance and Fnforc~::ment Program," Appendix C, 

6 Complainant arg,ucs that Respondent waived personal jurisdiction by not raising it until 

the l:lppeal. This case involves subject~matter jurisdiction, however, not personal jurisdiction. 

Subject-mauer jurisdiction is governed by legislative authorization (in this case, 49 U ;S.C. 

§ 5123). l Moore's Federal Practice§ 3.02[a]. ·n1e Supreme Court has stated that, "A litigant 

generally may raise ... subject-matter jurisdiction at ariy time in the same civil action, even 

initially atthe highest appellat.e instance." Kontrick v. Ryan, 540 U.S. -143, 455 (2004), 

7 Congress has also pnwided for periodic adjustments tor inflation. 2~ U.S.C. § 2461 

(note), as amended by Public Law I 04-134 (April26, 1996). Any applicable adjustments arc 

found in 14 C.F.R. Subpart H. 

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entitled "Sanction GuidanctJ, Hazardous Materials Enforcement" (October 1, 2007) 

(Exhibit C·l; Tr. 12~14) .

8 

The FAA previottsly published the guidelines in the Federal 

Register as "[F AAJ Policy on Enforcement of the [HMRJ: Penalty Guidelines," 64 ·Fed. 

Reg. 19443 (Apri121, 1999). 

On appeal, Respondent argues that the ALJ improperly relied on a I5~year old 

case to support the sanction amount, Midtown Neon Sign, FAA Order No. I 996-26, when 

he should have relied on a more recent case, Atlas Frontiers, LlC, FAA Order No. 20 J 0-

10 (June 16, 2010). Respondent also argues that its "prompt and extensive'' corrective 

actions (Appeal Brief at 8), including providing hazardous materials training to its 

employees, justi:fy a reduction in the $30,000 civil penalty assessed by the ALJ. Tt states 

again, as it did before the ALJ, that it has no prior violations. 

As previously held, "[a]bsent extraordinary cin.;Ltmstances, reliance on past 

sanctions will not be grounds for reducing sanctions that fall within the parameters set by 

the sanction guidance." Tate and Partners, F.Ai\. Order No. 2010-7 at 15 (June 15, 2010). 

Thus, in this case in which extraordinary circumstances do not exist, the question is 

whether the $30,000 sanction falls within the parameters set by the sanction guidance. 

K Respondent incorrectly slates that the applicable civil penalty guidelines are found at 

49 C.F.R. Part 107, lSubpart D), Appendix A. (Appeal Brief at. 7.) ActuaHy, Appendix A 

contains the penalty guidelines published by the Pipdine and Hazardous Materials Safety 

Administration (PHMSA) for the transpo11ation ofha7,ardous materials by ground. Allers 

Frontiers. FAA Order No. 2010-10 atJO (June 16, 2010). 

The PHMSA is the administration within the Department of Transportation (DOT) that. 

promulgates the .HMR. The FAA has the delegated authority to enforce the federal hazardous 

llll!terials transportation law and HMR regarding air shipment of hazardous materials. f'AA 

Order No. 2150.3A, Appendix C, ,f I.e, citing 49 C.P.R. § 1.47(j). 

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As noted in the sanction .guidance in FAA Order No. 2150.3.8, Appendix C, ,12 

(Exhibit C~ 1 ), the federal hazardous materials transportation law requires the 

consideration of the following factors in setting the civil penalty: 

(1) 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); 14 C.P.R.§ 13.16(c). The agency factored these considerations into 

the sanction guidance. FAA Order No. 2l50.3B, Appendix C, ~,12, 8. 

The sanction guidance requires: (1) weighing the case by answering a list of 

questions to arrive at a weight of Minimum, Moderate, or Maximum; (2) using the Matrix 

to find the appropriate sanction amount range; and (3) considering any other statutory 

factors, such as (in this case) possible corrective action. !d. at, 8. 

Weighing this case leads to a final aggregate weight ofModeratt:. The guidelines 

state in Figure C-2 that a flammable liquid in packing group III, like the paint in the 

instant case, is a "Category B'' material, which carries a Moderate weight under the 

guidelines. (Exhibit C·l.) The shipment leaked, which also points to at least a Moderate 

weight As the ALJ wrote, while Respondent did not have previous violations, a 

violation· free history is expected to be the norm. Atlas Frontiers, FAA Order No. 201 0~ 

10 at 14 n.I6 (June 16, 2010). 

Turning to the Matrix (Exhibit C-1, Figure C-1 ), Respondent was not an 

"Individual" as defined by the Sanction Guidance. Respondent should be regarded as at 

least a "Business Entity," which is the category Complainant selected, because it is an 

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organization. (Reply Brief at 11.) Complainant also selected "Undeclared Shipment 

Within 1-lamat Quantity Limitations." The following seven 'violation types are relevant-

(I) shipping papers; (2) labels; (3) markings; (4) packaging; (5) training; (6) emergency 

response information; and (7) release into the environment. 

Based on the selections of"Business Entity" and "Undeclared Shipment within 

Hazmat Quantity Limitations," the civil penalty range in the Matrix for each violation 

type, from Minimum to Maximum, is $1,500-&,200. The Moderate range, according to 

Complainant, is from approximately $3,733 Lo $5,966, and the median is $4,850. (Reply 

Brief at 11.) Complainant multiplied this figure by seven (one for each violation type). 

(Tr. 47-48.) The result was $33,950. (Reply Brief at 11.) Complainant performed this 

calculation, originally proposed an amount of$33,950, and then lowered its proposed 

sanction to $30,000 when it Issued its Final Notice of Proposed Civil Penalty. (Tr. 48f 

Regarding other statutory factors, Respondent asks for a reduction based on 

corrective action. Corrective action is not specifically listed in 49 U.S.C. § 5123(c), but it 

falls with1n the catcha11 category of "other matters that justice requires." Atlas Frontiers, 

FAA Order No. 2010-10 at 7 (June 16, 2010); Tate, FAA Order No. 2010-7 at 14. To 

result in a reduced civil penalty, the corrective action must exceed minimum legal 

requirements. FAA Order No. 2150.38, Appendix C, ,18(g)(2);At/as Frontiers, FAA 

Order No. 2010-10 at 7. ln addition, the corrective actionmust be sw({t, comprehensive, 

' and positive. Mole-Master Services Corp., l.;AA Order No. 20 I 0-11 at 11 (June 16, 

9 Complainant's calculations resulting in a proposed figure of $33,950 were useful as a 

way offinding an approximate Moderate civil. penalty. It is !.rue that "ld]ctermination of the 

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

exercise of discreti(m andjudgmcnl." Dominion Concepts, Inc., FAA Order No. 2005-4 at 5 n.IS 

(March 8, 2005). However, the record shows that Complainant did not stop its analysis after 

concluding its calculations but th<1t it went on t~ weigh possible mitigating factors. (Tr. 48-54.) 

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2010) (emphasis added). "Positive" means action to prevent fi.lture violations. See, e.g., 

Atlas Frontiers, fAA Order No. 2010~10 at 7. 

Respondent argues that the following corrective action supports a 

reduction in the civil penalty: 

• Respondent's employee Gruetzner told Jackson about his mistakes 

with the shipment on July 22, 2008 (20 days after the incident), 

told him to take a UPS refresher course, and told him to ask UPS 

how to complete a hazardous materials torm. 

• By July 28, 2008 (26 days after the incident), Gruetzner and the 

Deputy Garrison Commander at Camp Mabry decided to take 

certain actions such as requiring certain personnel to receive 

training and updating the mail handlers Standard Operating Procedure (SOP). 

• After July 2008 (about a year after the incident), Respondent 

distributed hazardous materials training materials to its personnel 

and asked the1n Louse the materials and submit a certificate of 

completion. 

• Respondent also did certain other :rt:linor things alter the incident, 

such as telling its personnel to use the UPS and United States 

Postal Service (USPS) Weh sites Lo obtain inl(nmation on shipping hazardou5 11la1crials. 

(Appeal Brief at 2-4; Exhibits R·l & R·2.) T'hcsc measures do not represent swift, 

' comprehensive action. Regarding several items, involving Respondent training 

its personnel, there is no proof of actual action or completion. In any event, 

training is required by the regulations, and as stated above) simply meeting 

minimum legal requir~::ments does not constitute corrective action. Gruetzner's 

instructions to Jackson, which came 20 days after the incident, represented neither 

swift nor comprehensive action. FinaJJy, such measures as telling its personnel to 

use lJPS and USPS Web sites to obtain hazard9us.materials shipping information 

were far from comprehensive. 

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This case simply does not present a situation involving the type of swift and 

comprehensive corrective action that would warrant a reduction in an otherwise 

reasonable civil penalty. The sanction assessed by the ALJ in the amount of $30,000 

falls within the parameters i>et by the· sanction guidance, and there is no reason to disturb 

it. 

Respondent's appeal is denied. This decision atJirms the $30,000 civil penalty 

assessed by the ALJ. 10 

Ml HAEL P. 'RTA 

AC lNG ADMIN"TSTRATOR 

Federal Aviation Administration 

10 

This order shall be considered an order assessing civil penalty unless Respondent fi1es 

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

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

resides or has its principal place of business. 11 C . .F.R. §§ 13.16(d)(4). l3.233(j)(2), 13.235 

(2009). See 7! Fed. Reg. 70460 (December 5, 2006) (regarding petitions 1hr review of final 

agency decision~ in civil penalty cases). 

IO 

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APPENDIX 

Section 171.2(eY1 provides: 

No person may offer or accept a hazardous material for 

transpottation in commerce unless the hazardous material is properly 

classed, described> packaged, marked, labeled, and in condition tor 

shipment as required ot· authorized by applicable requirements of this 

subchapter .... 

Section 172.200(a) provides: 

Description of hazardous materials required . ... [E]ach person 

who offers a ha£:ardous material for transportation shall describe tl:te 

hazardous material on the shipping paper in the manner required by this 

subpart. 

Sections 172.202(a)(l)-(4), (6)-(7) provide: 

The shipping description of a ha7.ardous material on the shipping 

paper must include: 

( l) 1 'he identification number prescribed for the material ... ; 

(2)The proper shipping name prescrib(:}d for the rnaterial ... ; 

(3) The hazard class or J.ivision number ... ; 

( 4) The packing group ... ; and 

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

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

Section 172.204(a) provides: 

[E jach 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 arc properly 

classiJied, described, packaged, marked and labeled, and arc 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 propc.r shipping name, and are 

classified, packaged, marked and labelled/placarded, and ro-e in all respects 

----------- 11 All citations arc to the October J, 2007, c.:dition ofTitle '19 ofthc Code ofFeJcral 

Regulations (Cl•R), which was in effect at the 1.ime, as the violations occurred i11 July 2008. The 

regulations wen: not revised e~gain until October 1, 2008. 

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in prop~r condition for transport according to applicable intemati<>nal and 

national governmental regulations." 

Section I 72.204(c)(2) provided: 

Certtficate in duplicate. Each person who offers a hazardous material to 

an aircraft operator fbr transportation by air shall provide two copies of the 

certification required in this section, .... 

ScGtion 1 72.204(c)(3) provided: 

Additional certification requirements . ... [EJach person who offers a 

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

met" "I declare Lhat all of Lhe applicable air transport requirements have been 

Section 172.300(a) provided: 

Each person who offers a hazardous material for transportation 

shall mark each package ... containing the hazardous material in the 

manner required hy this subpart 

Section 172.30I(a) provided: 

LE]ach person who offers a hazardous materia11br transportation in 

a non-hulk 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 172.312(a)(2) provided: 

.. , lEJach non-bulk combination package having inner packagings 

containing liquid hazardous materials must be ... 

(2) Legibly marked with package orientation markings .... on two. 

opposite vertical sides of the package with the arrows pointing in the 

concct upright direction ... , 

Section 172.400(a) provides: 

fE]ach person who offers for transpOltation or transports a 

hazardous material in any oftl1e following packages or containment 

devices, shall label the package or containment device with the labels 

specified for the material in the § 172. I 01 table and in this subpart .. , . 

Section 172.600( c) provided; 

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... No person to whom this subpart applies may offer for transportation, 

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

a hazardous materia) unless: 

(1) Emergency response information conforming to this subpart is 

im.rnedjatcly available for usc at all times the ha:t:ardous material is present; and 

(2) Emergency response infom1ation ... is immediately available to any 

person who, as a representative of a Federal, state or local govcnunent agency, 

responds to an incident involving a haz.ardous material, or is conducting an 

investigation which involves a hazardous material. 

Section 172.702(a) provided: 

A hazmat employer shall ensure that each of its l1azmat employees 

is trained in accordance with the requirements prescribed in this subpart. I 

Section 173 .24(b )( 1) provided: 

Each package used for the shipment of hazardous materials under 

this Stlbchapter shall be designed, constn!Cled, maintained, filled, its 

contents so limited, and closed, so that under conditions nom1ally incident 

to transportation--

(1) Except as otherwise pnwided in this subchapter, there will be 

no identifiable (without the use ofinstmments) release of hazardous 

materials to the environment; 

Section 173.27(d) provided: 

Closures. Stoppers~ corks or other such friction-type closures must 

be held securely, tightly and effectively in }">lace by positive means. Each 

screw-type closure on any packaging must be secured to prevent closure 

from loosening due to vibration or substantial change. in temperature. 

Section 173 .173(a)-(b) provided: 

(a) When the Sec. 172.1 0 1 table specifies that a hazi:tfdous material 

be packaged under this section, the following requirements apply. Except 

as otherwise provided in this part, the description "Paint" is the proper 

shipping name for paint, lacquer, enamel, stain, shellac, vam1sh, liquid 

aluminum, liquid bronze, liquid gold, liquid wood filler, and liquid lacquer 

base_ The description "Paint-related material'• is the proper shipping name 

for a paint thinning, drying, reducing o•· removing compound. However, if 

a more specific description is listed in the Sec. 172.101 table of this 

subchapter, that description must be used. 

(b) Paint, paint-related material, adhesives, ink and resins must be 

packaged as follows: 

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(1) As prescribed in Sec. 173.202 of this part ifit is a Packing 

'Grotlp II material or Sec. 173:203 of this part if it iS a Packing Group III 

material; .... 

4