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UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFHCE OF HEARINGS 

WASHINGTON, D.C. 

In the Matter of: 

Federal Express Corporation 

Respondent 

FAA Docket No. CP09NM0010 

FAA Case No. 2007NM700156 

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The Honorable Richard C. GoodTrin 

POST-HEARING BRIEF OF RESPONDENT 

At the conclusion of the October 25, 2010 hearing in this matter, the Honorable 

Judge provided the parties the opportunity to file briefs on the issues. Pursuant to Section 

13.231(c) of the Rules of Practice in FAA Civil Penalty Actions (14 C.F.R. §13-231(c)). 

Respondent, by and through undersigned counsel* hereby files this Post-Hearing Brief. 

L INTRODUCTION 

This case arose out of an inspection by two Federal Aviation Administration 

("FAA") agents on or about August 21,2007 at the Medford, Oregon facility operated by 

Respondent, Federal Express Corporation d/b/a FedEx Express (hereinafter referred to as 

"FedEx Express"). During the course of the FAA'S inapcctionj the agents observed and 

gathered information conceimuttg two shipments tendered to and transported by FedEx 

Express, which they believed did not comply with the regulatory requirements for such 

goods. A Letter of Investigation was issued by the FAA and answered by FedEx Express. 

A Notice of Proposed Civil Penalty was issued and ultimately a Complaint was filed by 
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responsibility depending primarily on the shipper advising Ac carrier of the presence of 

hazardous materials / dangerous goods. (Tr. ai 151, lines 15-20.) 

During the testimony of FAA Special Agent Donald Stiger, he testified that the 

FedEx Express tracking documentation contained in Exhibit C-2 indicated how many 

times a package was physically scanned by FedEx Express personnel. (Tr. at 38-42,) 

However, on cross examinatiorL, Agent Stigex admitted that he did not know whether 

every entry on the tracjdng documentation contained in Exhibit C-2 represented physical 

or machine scans. (Tr. at 75-76.) In fact, automation plays a large role in FedEx Express 

operations. CSee generally. Tr. at 122-126.) Agent Stiger also testified that, despite 

indicating in his agent statement that each package had the ORM-D markiTLg on boih 

sides of the respective boxes, he did not have photographic evidence to support that. 

(Exhibits C-1 and C-3; Tr. at 78» line 4 — Tr. at 79, lines 1-7.) FedEx Eicpress Corporate 

Safety Advisor David Littlejohn testified that the ORM-D mark only need appear on a 

single side of the package. (Tr. at 145, lines 15-21.) This is consistent with 49 C.F.R. 

1172.316(a). 

Agent Stiger fiaiher testified that he believed that the classification of the item 

was ethanol/alcohol solutions, UN 1170, hazard class 3, Packing Group III. (See 

generally. Tr, at 34 and 53,) He testified that, for sanction determining purposes, he 

believed that the itam shipped was in Category B and not Category C. (Tr. at 87, lines 

20—Tr. at 88, lines 1-12.) 

Testimony was also provided conoeming the history of ORM-D as a hazard class 

(Tr. at 14^), the recognition problem experienced by carriers (Tr. at 148, lines 19 — Tr, 
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at 149, lines 1-9), and the acknowledgement of the problem by U.S. govermnent and 

international associations as well, (TV. at 152-154.) 

m . ARGUMENT 

A. The ORM-D mark on the two shipments at issue wa^ not sufficient indication 

to provide the rcq»fgite knowledge that the shipments cpntaim-^ Tiazardous 

materials / dangerous goods. 

FedEx Express does not deny that it transported the shipments at issue in this 

proceeding.^ However, die applicable regulations and FedEx Express policies establish 

a system by which shippers of hazardous materials / dangerous goods are to communicate 

the presence of those materials in a package. 49 C.F.R. §173.22. Here, specifically, the 

shipper did not provide any shipping papers or any verbal notification that either 

shipment contained hazardous materials / dangerous goods. This misrepresenution put 

FedEx Express at a disadvantage in having to discover that the shipper provided false 

infomution. 

Since the shipping labels affixed to the shipments were applied by the shipper and 

loaded into the fi^ighi container by the shipper, the opportunities for FedEx Express to 

have seen the insufficieat marking of ORM-D during processing operations were limited. 

This is especially salient given that there was no paperwork or notification provided by 

the shipper about the shipments containing hazardous materials / dangerous goods. 

Additionally, the shipper^s past practice of never offering hazardous materials/ dangerous 

goods shipments for air transportation amplified the potential for the shipper's 

misrepres entation. 

^ It is important to clarify wliat is provided in tlte Procedural Sununary of ihe FAA's. brief regarding what 

FedExBTpressadmitccd in its AJUWCT. (CompUioam'sBrief atp. l.)IaSectionIK4H^)of its Answer, 

FedEx Eicpress admincd only that it naxispoited the shipments &t issue. In Section V of its Answer, JedBx 

Express deoied any allegation not specifically addressed. 
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"V^ith regard to the Consumer Commodity^ / ORM-D mack itselt; the mark is not 

required to appear in a particular location on a. package, nor is it required to be of a 

specific size or color. 49 C.F.R. §172.316. The only reference to dimensions is that the 

rectangular border sutroundmg the ORM-D mark must be Vi" from the lettei-s, but 

nothing prescribes the size of the letters. Although FA A Agent Stiger said the ORM-D 

mark was on two sides of both packages, no regulation requires dual marking. Further* 

the FAA offered no photographic evidence confirming that the mark appeared on two 

sides of the shipments ati issue. (Exhibits C-1 and C-3; Tr. at 78» line 4 — Tr. at 79, lines 

1-7.) Based on the evidence, one can only conclude that the mark was in only one 

location, 

B. The ORM-D mark has been confusing for years. an4 the U.S. through the 

United Natinng hae ^limttnaed that confusion through rulemaking. 

All regulatory codes based upon the United Nations CUN") Model Regulations 

on the Transport of Dangerous Goods, including the International Civil Aviation 

Organization ("ICAO*') Technical Instructions, utilize a 100 mm x 100 mm colored 

diamond, bearing a symbol of the hazard and the number of the UN classification, to 

communicate the presence of hazardous material. (United Nations Model Regulations on 

the Transport of Dangerous Goods, 5.2.2; International Maritime Dangerous Goods 

CodC: 5.2.2.2.2; ICAO Technical Listructions, Chapter 3, section 3.5.1.1: Transport 

Canada Transport of Dangerous Goods Regulations, 4,6 and 4.7.)* 

The ORM-D mark is unique to the United States, It was not in the ICAO 

Technical Instructions, which include the shipping description "Consumer commodity. 

^ Consumer cosiaoditles are materials able to be classified as suitable for retail sale for personal and 

household use purposes, 0C AO Packing ^istniction Y9G3.) 

* ImematiQnal codes are adopted by the U.S. ifarough 49 C.F.R. 5171.12 and §171.23. 
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ID SOOO*' but require a diamond-shaped Class 9 label and fiill shipping document. (ICAO 

List of Dangerous Goods and Packing Instruction Y963.) 

By divergent shape, lack of prescribed color, and lack of prescribed size or 

location, the ORM-D mark is unique. A unique provision is particTJlarly difficult to teach 

to thousands of personnel handling packages in international air commerce who 

otherwise are told that a diamond is the primary signal by which to designate a hazardous 

material / dangerous goods, (Tr, at 128, line 21 — Tr. at 129, lines 1-9). 

The United States delegate to the UN chaired the UN Committee of Experts when 

this subject of non-harmonized maridng of small packaged products was raised, (Uscussed 

in several meetings, and ultimately resolved in an effort to change to a more effective, 

coherent, and harmonized standard hazardous materials mark. That resolution, adopted 

by the UN in December 200S, calls for a 100 mm x 100 mm diamond mark, and that 

mark is now in effect in all modes of international commerce (ICAO Technical 

InstTOCtions, Chapter 4. section 4.5; International Maritime Dangerous Goode Code, 

3.4.5; European Agreement Concerning the Intemanonal Carriage of Dangerous Goods 

by Road (ADR) 3.4,7 and 3.4.8.0.) It has been implemented in final form by the United 

Stales through rulemaking Docket No. PHMSA 2009-0126 CHM-215K). 76 Fed. Reg. 

3308 (January 19,2011). 

The ineffectiveness of the ORM-D communication was recognized by FedEx 

Express prior to the Pipeline and Hazardous Materials Safaty Administration's 

("PHMSA") rulemaking activities, (Tr. at 148, line 19 — Tr. at 149, lines 1-9.) FedEx 

Express formally petitioned PHMS A to eliminate this marking and to revise consumer 

commodity requirements to address the inconsistent requirements for ground and air 
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shipping of such items and to be consastcnt with worldwide regulations, (Id. and 

RespoudenVs Exhibits A-C.) The PHMS A response to the FedEx Express petition for 

rulemaking acknowledged the inadequacy of the ORM-D mark as a means of hazard 

communication: "We agree that increasing the visibility of the consumer commodity 

packages to enhance package marking and labeling would make them more readily 

identifiable during transportation.'' (Ti, at 152, lines 8-12; Respondent's Exhibit B.) 

F A A has characterized FedEx Express' regulatory efforts on ORM-Ds as efforts 

to change a regulation FedEx Express opposes, (Complaioant's Brief at p. 12.) Such a 

characterization misses the point FedEx Express presents such information to 

demonstrate its active regulatory involvement regarding the ORM-D mark and the 

recognition problem it presents for carriers and shippers alike. PHMSA' S rulemaking 

activities on the matter evidences the govenimeni*s acknowledgement that a problem 

exists and regulatoiy action is necessary to address it. FedEx Express would submit that 

the FAA, in determining that a penalty was required and in setting the penalty amount, 

failed to give adequate consideration to this widely-known problem with a nonhflimonized mark under the statutory considerations of "the nature, circumstances, extern, 

and gravity of the violation" required by 49 U.S.C. §5123(c)-

C. The proposed civil penalty is not appropriate under Thz facts and 

circumstances of this case. 

The proposed civil penalty of S37,500 is excessive and should be substantially 

reduced by the COUTL^ Pursuant to 14 C.F.R. §13.224(a), the Complainant must show 

tiiat the proposed civil penalty is appropriate. In the Matter of William A. Li^er. Jr.. 

2010 FAA LEXIS 99, FAA Docket "No. CP09SW000a, at *14. Tlie FAA has 
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promulgated guidance for proposing penalties, but '*this Guidance [sic] is not binding on 

respondents or administrative law judges In setting penalties." Id. 

FedEx Express would also point out that Administrative Law Judges, under the 

provisions of the FA A Civil Penalty Administrative Assessment Act and the provisions 

of 14 C.F.R, §13.16, have the statutory and regulatory authority to reduce the penalty to 

an amount that they deem just and ^propriate: 

Unless an appeal is filed with the FAA decisionmaker in a timely manner, 

an initial decision or order of an adminiartrative law judge shall be 

considered an order assessing civil penalty if an a<iministrative law Judge 

finds thai an alleged violation occurred, and determms thca a civil 

penalty, in an amount found appropriate by the administrative law Judge, 

is warranted (Emphasis added.) 14 C.F.R §13.16(d)(3). 

The clear and tmambiguous ]ai^:uage of that regulation indicates that the Administrative 

Law Judge not only has the authority and obligation to determine whether a regulatory 

violation has occurred, but is also tasked with deciding whether a civil penalty is 

warranted at all, and if so, for what amount FedEx Express acknowledges that a 

reasonable amount of deference is to be afforded to the FAA's enforcement mechaiusms, 

including the Administrator's Sanction Guidance, but contends that such deference does 

not equate to a "rubber stamp." 

FedEx Express disagrees with the FAA's categorization of the items contained in 

the two shipments at issue here as Risk Category B, (Tr. at 62-63.) The Administrator's 

Sanction Guidance when adopted and when incorporated by the FAA appropriately 

assigns the highest penalty assessments to tibe most hazardous materials such as 

^ FedEx Express does not contend, for che purposes of this argument, that it lacks the ability to pay the civil 

peniUry or that the penalty would at&ct its ability to cootinue in busm«sj. 
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explosives and toxic inhalation hazards. (Exhibit C-10.) It is a declining scale, however, 

where llie lower the hazard, the less the figure to be applied in utilizing the matrixThe lowest category references ORM-D materials. (Exhibit C-10.) Consumer 

commodity, ORM-D, is not subject to any regulations in. the rail, highway, or water 

modes of transpoTtation under 49 C.F.R. (Tr. at 137, lines 13-19.) The Sanction 

Gmdance does not say "ORM-D-AlR" meaning those materials properly prepared for air 

transport. Instead, the Guidance describes those materials for which the ORM-D option 

would be available. 

The Sanction Giudance also does not say that materials must have been packaged 

for air transport or declared as ORM-D. Here, the shipments offered by AstraZeneca 

werp marked ORM-p. (Tr. at 78, lines 8-16.) Tie sliipments coniaincd hand sanitizer. 

(Tr. at 32, lines 13-16.) In 49 C.F.R- §172.101, this material, an alcohol mixture that 

might have been initially described as "UN 1170, Ethyl alcohol solutions, 3, PG UV" is 

authorized for transport aboard passenger aircraft in inner receptacles having a capacity 

of 60 liteis. It is referred to the limited quantity relief described in 49 C.F.R. §173.150. 

That section, in paragraph (c) states that materials meeting these size limits, may be 

shipped as consumer commodities. 49 C.F.R. §173,150(o). 

The position taken by the FAA is that the Sanction Guidance requires a material 

to meet ttic requirements of ORM-D-AIR in order to fit the lowest penalty category. The 

Sanction Guidance does not say that, nor does that Federal Re^gister page of Docket No. 

HM-228 cited by FAA counsel (Tr. at 166, line 13). which pertained only to the 

imposition of acceptance inspection ciitcria of 49 C.F.R. §175.30 on ORM coateriais. 
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Furthermore, The Sanction Guidance: document at page C-8 docs not require the 

material to have been properly prepared for air shipment. "That the material could have 

been shipped as a consumer cormaiDdrty can also be a mitigating fector," (Emphasis 

added; FA A Order 2150.3B, Appendix C at C-8,) This shipment not only could have 

been, but was shipped as a coiisumer commodity. The fact that added steps with regard 

to the packaging and documentation would have been required to convert this to an 

ORM-D-AIR shipment is not relevant to the fact that under the DOT regulations this 

material could have been and was shipped as ORM-D. 

The FA A mis^plied the Sanction Guidance in this instance, and made a mistake 

when calculating the penalty figure. They applied a higher hazard category than 

described in the matrix, which clearly offers the lowest dollar amoimt for materials that 

could have been shipped as ORM-D and, in fact, were shipped as ORM-D in this case. 

By the FAA's designation and the MSDS for the hand sanitizer that was shipped, 

the substance contains ethyl alcohol. (Tr. at 52, lines 15-19.) Elhyl alcohol is the primary 

hazardous material in alcoholic beverages. Exceptions for Class 3 in 49 C.F.R. 

§173.150(d) provide full relief from all regulation by passenger aircraft when alcoholic 

beverages are in checked or carry-on baggage up to 5 liters. 49 C.F.R. §173.150(d). The 

hand saniti2er shipped was not an alcoholic beverage, but the level of safety is 

established by the 49 C.FJt §173.150 for ethyl alcohol products. While this shipment 

would have been subject to regulations becatise it is not potable, that parallel as it 

establishes an acceptable level of safety should have been considered in the penalty 

calculation process and should have resulted in a penalty assessment at a lower level. 

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The FA A also minimized the corrective action taken by FedEx Express in 

connection with this matter. (Tr. at 5S, lines 7-20; Tr. at 82-85.) There was substantial 

testimony at trial that FedEx Express takes its regulatory responsibilities very seriously 

and has created a huge infiastructure to ensure that its transportation of hazardous 

materials / dangerous goods is accomplished reliably and safely. JScc generally- Tr. at 

104-114.) FedEx Express handles more hazardous materials / dangerous goods shipments 

per day than any carrier in the world, estimated by FedEx Express Corporate Safety 

Senior Manager Patrick Oppenheimer as less than 1 percent of the more ihan 3 million 

packages accepted daily. (Tr. at 115, line 6.) "When an error is discovered concerning a 

hazardous materials / dangerous goods shipment that has been offered to FedEx Express, 

the company's Dangerous Goods Administration team immediately conducts an 

investigation and works with management of the facility where the shipment at issue was 

processed and the shipper to address the situation, all of which was done in this matter. 

(Tr. at 144-145; Exhibit C-9.) 

Specifically in this matter, management was notified and the shipper was 

contacted, (Tr. at 144, lines 1-^; Exhibit C-9.) Hazardous materials / dangerous goods 

shipments fi:om this shipper were embargoed until proof of hazardous materials / 

dangerous goods training was provided. (Tr. at 144, Lines 7-11; Exhibit C-9.) 

Managemeiit reiterated coireot policies and procedures and distributed an ORM-D j ob aid 

10 aU employees at their facility to help avoid a similar occurrence. (Exhibit C-9.) 

As a further corrective step, a processing change was implemented whereby 

personnel physically scan all shipping labels when affixed to packages offered by this 

shipper, (Tr. at 144, lines 12-15; Exhibit C-9.) This practice was instituted to assist 

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specifically in preventing further occurrences such as the one involved in the case at bar 

and is the type of systemic change that should be afforded the type of "greater 

consideration" referenced in the Administrator's Sanction Guidance. (See Exhibit C-10 at 

19447.) It should also be noted that all the corrective measures described here were taken 

shortiy after FedEx Express became aware of the two shipments at issue here, as opposed 

to being taken after the issuance of a Notice of Civil penally.^ 

FAA Agent Stiger, in explaining his recommendation for a penalty figure, did not 

credit any of the FedEx Express corrective actions. In his vlcrw^ actions above and 

beyond the regulations need to have been taken to validate credit on a penalty calculation. 

(Tr. ai 58, lines 3-20.) No such criterion appears in the Sanction Guidance. Fuithcnnore, 

as outlined above, FedEx Express took several actions such as the embargo that are not 

required by any regulation. 

FedEx Express beUeves that the Administrative Law Judge has ample evidence in 

the record to order a substantial reduction of the civil penalty assessed in this case, given 

the misuse of the Sanction Guidance by the FAA. FedEx Express does not deny that it 

has an FAA hazardous materials/dangerous goods compliance history, which the FAA 

considered an aggravating factor when calculating the $37,500 civil penalty. However, 

FAA Agent Stiger, indicated during his testimony tiiat he was unaware of the fact that 

FedEx Express normally transports approximately 30,000 regulated hazardous 

materials/dangerous goods shipments daily. (Tr. at 90, lines 18-22; Tr. at 91, lines 1-2; 

Tr. 115, lines 4-6.) He refused to acknowledge that the opportunity for human error could 

be greater for a carrier transporting such a high number of shipments on a daily basis 

^ FedEx Express' Letter of Response to iht FAA'S Letter of InveadgatiQD "^vas submitted OD or about 

Septwnber 6,2007. CExbJbir C-9.) The FAA Issa&d. & Notice of Proposed Civil Penalry on the matter on or 

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•wbcD. compared to one transporting a substantially lesser amount (Tr. at 91, line 18 — 

Tr. at 92, lines 1-5,) FedEx Express asserts that the extensive infi-astructure that it has 

created, in the form of training programs and systems, to ensure the safe and compliant 

transportation of hazardous materials/dangerous goods, is indicative of a positive 

regulatory attitude, and not a **recalcitrant" one as characterized by the FAA. 

(Complaiiiant*s Brief at p. 10.) This should be considered a mitigating fector in the 

equation for assessing any penalty. 

TV. CONCLUSION 

Respondent, Federal Express Corporation d/b/a FedEx Express, respectfully 

requests thai, in light of the foregoing discussion and argument, the proposed civil 

penalty of $37,500 is excessive and should be substantially reduced by the Court. 

Rcspectfiilly submitted, 

FEDERAL EXPRESS CORPORATION 

Courtney E. Felts 

Senior Attorney - Regulatory Affairs 

Federal Express Corporation 

3620 Hacks Cross Road 

Building 3,3"* Floor 

Memphis, TN 38125 

(901)434-8632 

(901) 434-8283 FAX 

Lawrence W, Bierlein 

1101 30th Street, NW 

Suite 500 

Washington, DC 20007 

(202)625-8355 

(202) 625^363 FAX 

about Februaiy 26,200$. (See Complaint, Section Z; Answer^ S«ction I.) 

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CERTIFICATE OF SERVICE 

I certify that a tcue and correct copy of the foregoing was forwarded via facsimile 

and FedEx Ovemighi delivery on the I ^f^ day of February, 2011, to: 

The Honorable Richard C. Goodwin, Administrative Law Judge 

Ofiicc of Hearings, M-20 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

East Building Ground Floor, Room El2-320 

Washington, DC 20590 

FAX: (202) 366-7536 

Federal Aviation Administration 

800 Independence Avenue, SW 

Wilbur Wright Building, Suite 2W1000 

Washington, DC 20591 

Attn: Hearing Docket Clctfc, AGC-430 

FAX: (202) 493-5142 

Mr. Scott R, Morris, Esq. 

Federal Aviation Administration 

Office of the Regional Counsel -Northwest Mountain Region 

1601 Lind Avenue SW 

Rcnton, W A 98057 

FAX: (425) 227-1007 

Courtney E.telts 

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