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'"^ ^ 

•.p-neiTo^ RECEIVED 

Scott R. Morris •:Al :.3 ^OHi"ATiGi • ^ »- 1 V 1 ^ 1^^ 

FAA Office of Regional Counsel ; ,.: ' CPtRAl A'MS MAP | 5 2fltt 

1601 Lind Ave., SW Ui-Ar^ . 

Renton, Washington98057 - 5 --n ^h P \- ^^, ^cARIN G DOCKF T 

Telephone: 425/227-1417 --'-- J ^ ^- ^-' - ' ^ R^VVUrVC 1 

Facsimile: 425/227-1007 

UNITED STATES OF AMERICA 

FEDERAL AVIATION ADIM1NISTRATION 

OFFICE OF HEARINGS 

WASHINGTON, D.C. 

In the Matter of 

FEDERAL EXPRESS, INC. 

. 

FAA DOCKET NO. CP09NM0010 

DMS NO. FAA-2009-0721 

FAA Case No. 2007NM700156 

COMPLAINANT'S REBUTTAL BRIEF 

INTRODUCTION 

Respondent makes three general arguments: 

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a. the transportation vmique ORM-Drriarkings that were located next to the scanning bar 

documents placed on the box by its employees or agents were not sufficient to place its 

personnel trained in hazardous materials (hazmat) to recognize that the box was a hazmat 

shipment. 

b. the ORM-D marking was confiising; and, 

c. the proposed sanction is not appropriate. 

ARGUMENT 

A. The transportation unique ORM-D marking is sufficient to provide Respondent with the 

requisite knowledge that the shipments contained hazardous materials. 

Complainant largely refers the Administrative Law Judge (ALJ) to its original brief 

COMPLAINANT'S REBUTTAL BRIEF - CP0 9NM0010, 

2007NM00156 

FEDERAL EXPRESS 

Pag e 1 o f 8 

SCOTT R . MORRIS , FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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Respondent's argument is an interesting one. First, let's assume for argument's sake, there 

is credible evidence in the record that the shipper, not a Federal Express (FedEx) driver, loaded into 

a freight container the ORM-D shipments. The Respondent is still responsible for the actions of the 

shipper when it delegates it responsibilities to that entity. Respondent ignores its independent 

obUgation to inspect the shipment prior to placing it aboard its aircraft. See 49 C.F.R § 175.30. It 

cannot escape liability by delegating loading functions to those that it accepts shipments from. And 

if Respondent has delegated the authority to conduct the pre-inspection, it has provided no evidence 

that its agents were properly trained. Respondent asserts without any underlying facts, that the 

shipper has never previously offered hazardous material for air transportation. It seems that one 

would exercise even greater caution towards a shipper under those circumstances. Further, the 

disclaimer is only to air transport. Respondent is remarkably silent about whether the shipper 

previously had offered hazardous material for ground transport. 

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B. The ORM-D marking is a transportation unique marking that is not confusing and Respondent's 

efforts to change a rule that it disagrees with is irrelevant. 

Complainant again relies primarily on its original brief. 

Respondent devoted pages in its reply brief arguing generically about the ORM-D marking 

itself and how it is confusing. Respondent's Brief at 5-7. What Respondent cannot escape are the 

facts of this case: the testimony of the Agents and the photographs of shipments.' In this case, the 

transportation unique marking is literally inches from the document Respondent uses to process 

each shipment. The marking is in bold lettering with a rectangle around the letters ORM-D. There 

could not be a more compelling example of being placed on notice that these packages are telling 

the carrier that the contents of those packages contained hazardous materials. 

COMPLAINANT'S REBUTTAL BRIEF - CP09NM0010, 

2007NM00156 

FEDERAL EXPRES S 

Pag e 2 o f 8 

SCOTT R . MORRIS, FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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Respondent's efforts to change a regulation are not mitigating whatsoever in the context of 

its obligation to comply with the regulations that exist at the time of the incident. Respondent is to 

be commended for its efforts to participate in the process of developing or modifying regulations. 

However, Respondent's objections to the ORM-D provisions of the hazardous material regulations 

do not equate to a "widely-known problem." There are many occasions where the regulated object 

to the rules implemented by the regulators. Regulators must balance the interests of all parties not 

just those that object to provisions that arguably impact a corporation's business model. 

Respondent's argument that it should receive credit for its regulatory activism would subject the 

Agency to a well known trap - that oi regulatory capture - whereby a regulator draws so close to 

those with whom it deals on a daily basis that it ends up elevating industry's private interests above 

its own regulatory mission.'^ Respondent forgets that the public at large, not just large corporations, 

are the stakeholders here. 

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Complainant challenged the requirements of inspecting ORM-D materials when it was fu-st 

proposed, but was overruled in the rulemaking process. In 2006, the Pipeline and Hazardous 

^ Pictures are worth a thousand words. See Exhibit C-3 photographs. 

^ For a more thorough discussion of this phenomenon, see MALCOLM L. SPARROW, THE REGULATORY CRAFT: 

CONTROLLING RISKS, SOLVING PROBLEMS, AND MANAGING COMPLIANCE 35 -36,63 - 64 (2000). 

' PHMSA's response to industries' comments on this issue were: 

Section 175.30(d) excepts materials classed as ORM-D from the inspection requirements. In the 

NPRM, we proposed to remove this exception. Materials reclassed as ORM-D should be subject to 

the inspection requirements of § 175.30(b) and (c) to ensure all packages containing hazardous 

materials are in proper condition for transportation aboard aircraft. 

ATA; UPS; Association of Ha2mat Shippers (AHS); and FedEx Express ask PHMSA to leave the 

exception provided in § 175.30(d) for consumer commodities and not remove it as proposed. ATA 

states removing the exception would result in inconsistency with the ICAO acceptance procedures 

m part 7; 1.1.1(b) for similar shipments under Packing Instruction 910. ATA suggests PHMSA 

provided no safety justification for removing the exception, noting the break down and rebuilding 

a unit load device (ULD) containing ORM-D materials provides more opportunity to damage those 

packages. In addition, ATA suggests removal of the exception could lead to international 

consistency and competitive issues where foreign operators will offer their customers expedited 

processing while U.S. carriers will have to spend more time processing their packages individually. 

COMPLAINANT'S REBUTTAL BRIEF - CP0 9NM0010, 

2007NM00156 

FEDERAL EXPRESS 

Pag e 3 o f 8 

SCOTT R . MORRIS, FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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Material Safety Administration (PHMSA) ~ the regulators — balanced the interests of industry and 

the general public and made the following determination: "Today's fransportation environment 

also warrants inspection of materials reclassed as ORM-D to ensure the safety and security of the 

hazardous materieil shipment. Inspection is one of the only means available to ensure packages 

containing hazardous materials are ui proper condition for transportation aboard aircraft." 71 

Fed. Reg. 14586,14592 (Mar. 22,2006). 

C. The proposed sanction is appropriate and supported bv the evidence and the Administrator's 

sanction guidance. 

Complainant again relies primarily on its original brief 

Respondent initially argues that a Consumer Commodity, ORM-D is not subject to any 

regulations." It misstates the regulations. See 49 C.F.R. § 172.316,172.700. To gain the benefits 

of using the ORM-D marking, the shipment must still meet the exception criteria set forth in 49 

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C.F.R. §§ 173.150-173.156, even for rail, highway, or water modes of transportation. 

Respondent argues that the Administrator misapplied its sanction guidance because it 

considered the Ethyl alcohol solution in the packages marked ORM-D as a Risk Category B rather 

than a Risk Category C. Respondent argues that the guidance only refers to "materials" and since 

this material was an ORM-D it qualifies for the lower risk category. Its position is illogical. 

Following Respondent's logic, if a shipper offered an Explosive, Division 1.1, but marked it as an 

UPS and AHS also comment there is no incident history to justify removal of the exception and the 

increased handling could lead to greater costs for U.S. operators and increased damages during 

handling. 

We disagree with the commenters and are adopting the proposal to remove the exception in § 

175.30(d) for materials classed as ORM-D. 

71 Fed. Reg. 14586, 14592 (Mar. 22, 2006). 

COMPLAINANT'S REBUTTAL BRIEF - CP0 9NM0010, 

2007NM00156 

FEDERAL EXPRESS 

Pag e 4 o f 8 

SCOTT R . MORRIS, FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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ORM-D, Respondent apparently believes that the violator, would be entitled to the mimmum weight 

of a sanction because it was marked as such. This is not the intent of the guidance. A violator only 

receives the benefit of the lower risk category if it meets the criteria of the lower risk category at the 

time it's offered. For example, the sanction guidance provides "if there is more than one type of 

hazardous material involved in a shipment, use the hazardous material in the highest risk category." 

Exhibit C-10, page 10-6, Guidance Note. The guidance must be understood in the context of the 

mode that is being regulated ~ the air mode. If this shipment could have flown by air as an ORMD-Air it would be considered a Risk Category C. However, the very packaging of this shipment 

disqualified it for transport by air," increasing the risk of harm, and therefore the increase in the risk 

category. The Administrator is in the best position to interpret its own guidance. As long as the 

Complainant's interpretation of its own guidance is reasonable it is entitled to deference of that 

interpretation. Chevron v. Nat'I Resources Defense Counsel 467 U.S. 837 (1984). 

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Respondent attempts to argue certain factors that the Administrator has clearly stated 

are not mitigating. Complainant reminds the court that a lack of a prior violation history is not 

mitigating as an unblemished record is the expected norm. See, e.g., Pony Express Courier 

Corporation, FAA Order 94-19 (June 22, 1994). "The fact that no damage occurred as a 

result of the shipment is not a mitigating factor." 49 Fed. Reg. 19445, column 3, para. 3. 

Respondent erroneously argues that Complainant did not consider that Respondent 

received some erroneous information about the shipments. Respondent's Brief at 11. Despite 

its argument, Complainant did consider the fact that someone other than Respondent prepared 

* For this shipment to be authorized for transport in air commerce, the inner packaging bottles were required to have 

a positive means across the screw-type cap to prevent movement. 49 C.F.R. § 173.27. See Tr. at 32 - 34, and Tr. at 

48, lines 2-8 . 

COMPLAINANT'S REBUTTAL BRIEF - CP09NN0010, 

2007NM00156 

FEDERAL EXPRESS 

Pag e 5 o f 8 

SCOTT R . MORRIS, FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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the shipment and that Respondent was not the shipper. Tr. at 63, lines 7-19.^ Note that this 

testimony is inmiediately prior to the testimony reference by Respondent in its brief 

Complainant balanced that information with the fact that this air carrier accepted and 

transported a shipment clearly marked ORM-D and one caimot transport a shipment marked 

ORM-D in air commerce - a fact commonly know in the aviation industry. Respondent 

correctly points out in its brief that the shipper is primarily responsible for complying with the 

hazardous material requirements for any shipment it offers. However, Respondent has an 

independent duty under the regulations in its acceptance and transport role in air commerce. 

See 49 C.F.R. Part 175. Finally, Respondent wants placed on a different footing under the 

regulations because it "handles more hazardous materials / dangerous goods shipments per day 

than any carrier in the world...." Respondent's Brief at 12. Respondent has made this 

argument before and it has been properly rejected. In the Matter of Federal Express, FAA No. 

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CP09GL0004 (May 5,2010), 2010 WL 1843815 (hiitial Decisionr 

Finally, Respondent seeks credit for its meager corrective actions. Reiterating policies, 

distributing job aids, and actually requiring its personnel to physically scan all shipping labels 

is the least one would expect of an air carrier to correct the problems associated with these 

shipments. Any corrective action by Respondent must not just correct a problem, but must 

^ Q: Is the violator the manufacturer of the hazardous material in this case. 

A: No; it is not. 

Q: Ok. Did someone other than the violator prepare the shipment for transportation? 

A: The shipper would have prepared the shipment for transportation. 

Q: Ok. So that would be mitigating, somewhat, in this case; is that correct? 

A: That is correct. 

^ "The large number of hazardous materials carried by Federal Express carries with it a concomitant responsibility. 

The carrier's obligation to conform to the laws governing the handling and transportation of dangerous goods is the 

same as any other entit>'. When it fails in that duty, it must answer. The volume of its operations simply is beside the 

pouit." Id., at *6 

COMPLAINANT'S REBUTTAL BRIEF - CP09NM0010, 

2007NM00156 

FEDERAL EXPRESS 

Pag e 6 o f 8 

SCOTT R . MORRIS, FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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exceed the minimuin requirements. Id. at 19444, column 3,1*' full paragraph. Respondent's 

actions are not the kind of systemic change that the Administrator requires in order to lower an 

otherwise reasonable assessment. See, e.g.. Seven's Paint & Wallpaper Co., FAA Order 2001-

6 (May 16,2001), at *6. 

CONCLUSION 

Respondent has provided nothing in its brief that either exonerates it of the violations or 

mitigates the proposed sanction. Complainant has provided overwhelming evidence of the 

violations and demonstrated a reasonable basis for its proposed sanction. The proposed sanction 

will achieve the deterrent effect desired and required. As the self-proclaimed world's largest 

hazardous material air carrier, it is important that the penalty imposed on the Respondent 

represents something greater than simply a cost of doing business. 

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RESPECTFULLY SUBMITTED this 7th day of March, 2011. 

^^cottRMorris 

FAA Attorney 

COMPLAINANT'S REBUTTAL BRIEF - CP09NM0 010 , 

2007NM00156 

FEDERAL EXPRESS 

Pag e 7 o f 8 

SCOTT R . MORRIS , FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7 
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CERTIFICATE OF SERVICE 

I hereby certify that the foregoing Complainant's Rebuttal Brief, has been served via Facsimile 

and Certified Mail this date, to the following: 

The Honorable Richard C. Goodwin 

Office of hearings, M-20 

1200 New Jersey Avenue, S.E. 

East Building (jiound Floor, Rm El2-320 

Washmgton, D.C. 20590 

FAX: 202.366.7536 

Attn: Hearing Docket Clerk, AGC-430 

Federal Aviation Administration 

800 Independence Ave SW 

Wilbur Wright Bldg. - Suite 2W1000 

Washington, D.C. 20591 

FAX: 202. 493.5142 

Courtney E. Felts 

Staff Attomey, Federal Express, Inc. 

3620 Hacks Cross Road 

Building B, 3^*^ Floor 

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Memphis, TN 38125-8800 

FAX: 901.434.8283 

Dated this 7* day of March, 2011. 

DANA STEPHI 

Office of Regional Coimsel (ANM-7) 

Federal Aviation Administration 

1601 Lind Ave. SW 

Renton, W A 98057 

TEL: 425.227.2164 

FAX: 425.227.1007 

COMPLAINANT ' s REBUTTAL BRIEF 

2007NM00156 

FEDERAL EXPRESS 

Pag e 8 o f 8 

CP09NM0010, SCOTT R . MORRIS , FAA ATTORNEY 

TEL: 425.227.1417 ; FAX: 425.227.100 7