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David W. Williams- SBN 141065 

16372 Underhill Lane 

Huntington Beach, CA 9264 7 

714-745-5610 

Attorney for Respondent 

FROST AD ATELIER lNC. 

RECEIVED 

DEC 1 8 2012 

HEARING DOCKET 

UNITED STATES DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS, W ASHlNGTON, D.C. 

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lNRE: ) 

Case No.: FAA-2011-0294 

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FROST AD ATELIER lNC. ) 

) RESPONDENT'S POST HEARING BRIEF 

RESPONDENT. ) 

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19 Respondent FROST AD ATELIER lNC. hereby submits this Post Hearing Brief in 

20 defense ofthe action against it. 

21 1. BURDEN OF PROOF: 

22 There is no dispute that the Agency bears the Burden of Proof in this matter. Likewise, 

23 there is no dispute, that the charge filed by the Agency requires specific intent. Therefore it is 

24 the burden of the Agency to establish, by a preponderance of evidence, that respondent 

25 knowingly attempted to transport hazardous materials as alleged in the Complaint. There is no 

26 evidence what-so-ever to establish intent. 

27 (1) A person that knowingly violates this chapter or a regulation 

2 8 prescribed or order issued under this chapter is liable to the United States 

Government for a civil penalty of at least $250 but not more than $25,000 for 

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49 usc 5123. 

each violation. A person acts knowingly when- (A) the person has actual 

knowledge of the facts giving rise to the violation; or (B) a reasonable person 

acting in the circumstances and exercising reasonable care would have that 

knowledge. (2) A separate violation occurs for each day the violation, committed 

by a person that transports or causes to be transported hazardous material, 

continues. (b) Hearing Requirement. - The Secretary of Transportation may fmd 

that a person has violated this chapter or a regulation prescribed under this chapte 

only after notice and an opportunity for a hearing. 

There was no evidence that Respondent had any knowledge or intent to transport any 

prohibited items. 

A corporation only acts and wills by virtue of its employees. As such, a 

corporation's knowledge is made up of all of the knowledge acquired by its 

employees in the scope of their duties. Restatement (Third) of Agency § 5.03 

(2006); Steere Tank Lines, Inc. v. United States, 330 F.2d 719, 722 (5th Cir. 

1963). Similarly, corporate intent depends on the intent of specific 

employees. Saba v. Compagnie Nationale Air France, 78 F.3d 664, 670 (D.C. Cir. 

1996); see also United States v. Philip Morris USA Inc., 566 F.3d 1095, 1118 

(D.C. Cir. 2009) ("[c]orporations may be held liable for specific intent offenses 

based on the 'knowledge and intent' of their employees"). 

The only employee of Respondent that testified was Rhonda Frostad. Mrs. Frostad 

testified that she had no knowledge that any prohibited items were packed or otherwise presented 

for transportation. Mrs. Frostad testified as to the corporation's policy on transporting hazardous 

materials. In short, she testified that the corporation's policy is to NEVER transport the items 

alleged to have been submitted for transportation. With respect to the butane, she testified that 

while it is used during the process in the field, it is the policy to purchase the disposable canisters 

at the location of the project and to leave the butane on site. With respect to the WD-40 alleged 

to have been submitted for transport, Mrs. Frostad testified that oil based products are NEVER 

used as part of the process, and consequently never transported. Mrs. Frostad further testifed tha 

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WD-40 is sometimes, although seldom, used at the main facility to lubricate one of the machines 

in the foundry. She testified that Respondent still has the original can it obtained when the 

foundry opened. 

The government presented no evidence what-so-ever to address the critical element of 

Knowledge by the Respondent. The Agency was aware ofthe names of those persons travelling 

with Mrs. Frostad, and certainly could have called them to testi:f'y. Simply put, the Agency failed 

to meet its burden of proof. 

The witness presented by the Agency, Krista Hynes was a Customer Service Supervisor. 

Ms. Hynes was not credible in any of her testimony. In short, she testified that she was called by 

the airport TSA to identi:f'y a bag that was claimed to have been checked by one of the passengers 

ofthe airlines she worked for. She could not describe the bag. She could not describe the 

contents of the bag. She could not describe the room in which the bag was located. She further 

testified that she paged Mrs. Frostad and was confident that any passenger anywhere in the 

airport could have heard the announcement. However, she could not describe what time the 

announcement was made, nor how many times she paged Mrs. Frostad. 

The government simply did not carry its burden of establishing liability. No penalty 

should issue. 

2.PENALTY: 

The penalty to be assessed should consider, among other factors, the degree of culpability 

and the corporation's ability to pay any penalty assessed. 

(c) Penalty Considerations.-In determining the amount of a civil penalty under this 

section, the Secretary shall consider-

(!) 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. 

The degree of culpability has been addressed above. There should be no penalty issued. 

All other factors mitigate against any penalty. The evidence is uncontroverted and supported by 

Federal Tax Retnrns that Respondent is not in any position to pay. The corporation, since it's 

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inception has lost money consistently. Should penalty be imposed, Respondent simply be forced 

to cease doing business. Respondent has no history of any other violations, and poses no threat 

to the public. 

CONCLUSION 

The Agency has failed to meet its burden to establish corporate liability in this matter. 

This is not a strict liability offense. The mere fact that Respondent is claimed to have items in 

the checked baggage of one of its employees does not give rise to automatic penalties. The 

Agency has failed to establish the critical element of "knowledge." All evidence illustrates that 

not only did Respondent NOT know of the items claimed to have been in employees' bags, but 

that Respondent has specific policies in place to prevent such actions. Further, Respondent has 

never had a profitable year. The imposition of any penalty such as the Agency suggests will 

simply put it out of business. This is specifically contrary to the letter and intent of the Code. 

No penalty should issue. 

Date: December 7, 2012 

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FAA DOCKET NO. Not Assigned 

FDMS No. FAA-2011-0294 

CERTIFICATE OF SERVICE 

I hereby certify that on this date I have placed in the United States mail, postage prepaid, 

the executed original and one copy of the RESPONDENT'S POST HEARING BRIEF 

addressed as follows: 

and a true copy to: 

Also by facsimile: 

Also by facsimile: 

Hearing Docket 

Federal Aviation Administration 

Wilbur Wright Building, Suite 2Wl 000 

Attn: Hearing Docket Clerk, AGC-430 

800 Independence Avenue, S.W. 

Washington, DC 20591 

The Honorable Richard W. Goodwin 

Administrative Law Judge 

U.S. Department of Transportation 

Office of Hearings, M-20 

East Building Ground Floor 

Room El2-320 

1200 New Jersey Avenue, S.E. 

Washington, D.C. 20590 

(202) 366-7536 

F.A.A. 

P.O. Box 92007 

Los Angeles, CA 90009 

Attn: Lisa Toscano 

(310) 725-6816