08/03/201 1 15:46 FAX 2024935ia 2 FAA - DMS @]001/010 

-F'ARTMENTO F 

•^^IM^JSPORTATION 

' •:r:KFTOPFRATIONS 

'*"•"" ^'ii«-'*^^'^ PfECElVED 

0_V_5R.NLGHTMAM. 

Federal Aviation Administration 

800 Independence Avenue, SW. 

Washington, DC 20S91 ^cAR/^J Q QQf^^f^ ^ 

Attn Hearing Docket Clerk, AGC-430 "-^A t ? 

Wilbur Wrighi Building- Suite 2W1000 

ATTN: HEARING DOCKET CLERK 

Re: In the Mallei' of D & M Custom Injection Molding Corporation 

FAA Case No. 2009-GL-70-03 14 

Enclosed herein please find our .response to the Federal Aviation Administration's 

Complaint in the above-entitled action for filing. 

We concur with the FAA's request of June 24, 2011 that the hearing in this matter be 

held in the Chicago area 

Please address all communications for D & M Custom Injection Molding Corporation to 

the attention of Mike Teofilovich, President. D&M Custom Injection Molding 

Corporation, P.O. Box 158, 150 French Road, Burlington, 11.60109. 

Sincerely, 

Mike Teofilovich 

President 
08/03/201 1 15.4G FAX 2024935142 FAA - OMS 0002/01 0 

In the Matter of D & M Custom Injection Molding Corporation 

FAA Case No 2009-GL~70-0314 

RESPONSE TO COMPLAINT SERVED JUNE 27. 2011 

D & M Plastics Coiporaiion f"D&M") hereby files it Response to the Complaint of (he 

Federal Aviation Administration TFAA"), dated June 27, 2011 and states as follows: 

1 

On July 1, 2010, D&M was advised through a Nofice of Proposed Civil Penalty 

that the FAA proposed to assess a civil penalty in the amount of $168,000. On June 7, 

2011, a Final Notice of proposed Civil Penalty in the amount of S168 000 was issued; 

and, on June 16, 2011, D&M submitted a written request for a hearing 

II 

D&M does not dispute the FAA's account of the circumstances described in their 

complaint of June 27, 2011 

III. 

D&M does not dispute the violations as outlined in the FAA complaint of June 

27.2011. 
08/03/201 1 15 as FAX 2024935^ 2 FAA ' O^'IS 12003/010 

VI 

1. D&M does not dispute the computation under 49 U S C. SS5123 of $168,000 

However, D&M docs dispute the appropriateness of the imposition of such a penally 

given the following fi-om other relevant sections of 49 US C. SS5123' as it applies to 

imposition of a penally: 

I'Jic SL\ rcfc/n .\/k7// /f/i/yo.se ij penaln tnulcrdiis .st^Lfifm /'\ yivini: ihc /'ciwnii 

wiinrti iiuikc (if the itmotnif (>f /hepc.ncrln. (c> }\'/uifn'' 'uu.'ihh'ri//Ji>/t.s. -[n 

ik'ii.'1'nfiniii^ ihi^ uniunni of o civil(>tHiaitv under (his stzClivn. ihi^ Secrcnux :,hall 

Lonsidcr - (I) the ruiturt:. cirtnm'^Jani.cs, fXTtc/r:, and^ra\ in nf the vhtJauon; (j) 

will) n:.\pccf !o J he vjoknoi. ihc dc-^ix't: ofcdlikilyliiv. am hisin}\ iif}}ri<>r 

yu'lulJt»i'<. rhc nhilin' topLn\ uiuf iniv cffj-cj nn flw ohihrt- /i* n^jiti^in: u? d<^ 

h)i->iii(.'ss; Liiui (3) c/fu'r iiiaitcrs ihui //istfcc reqtiircs. 

2 la particular, D&M has pre.<;eiii«?'J information and evidence to niitiuate the 

Limoun) uttho penalty OIKI. to date, has not received any ^specific response to th:U 

information aud evidence, retiiriiig ir or olherv^ise. despite it^' compelling n^iiure: 

n. D&M WHS nox informed a^y to the presence ofhar.aidous maierial.s in the products 

it uas engaged lu a.ssembie by its cujitomer. Ruynn America. Inc.. ('Ruyan'") 

Minneapolis. MN 

h The n:ituie of the project was siith ihal tlie evidence ot llic presence of haziirJous 

iniiteriaL'i in the products was nol apparent and \vas not required lo he so evidcni 

in order to complete the project as directed by Kuyan. 
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c. D&M h;i:; no hi.story of previous violations 

d. D&M has no jirior hi.slor> of dealing with ha7.ardous materials and heheved. i)[ the 

time of its engagement by Ruvan that i[ would not be dealing ha.7nrdous niateriak 

nt any rime 

e The impo.^ition orihc penalty ar the le\el imposed would pose a serious risk tu 

D&M's fniaiKial siability and irs ability to contuiue to do busines.*; as it has 

UadiiionaJly clone in its coinnmnity. 

1 h) siippon of these mitigating ciicumsranccs. D&VI provides the atTidavit of 

William ? B;uikovvski. who was its comact at Ruyan ai the titne of the project 

:-ind through the project 

.". I'nder the facts and circum.^tances of this case, panicularly given the mitigating 

circumstance.^ pursu;mt to 49 IJ S.C. SS5 I2.v D&M has utVered to pay an appropiKile 

civil pen.^lty of S2.^.00(J 

WFTEREFORE, D&M respeatiilK requests that the Admini-Strative Law Judge 

enter an order as.sessing D&M a civil penalty of no more than S2^.000. given the 

compelling mitigating circumsiances surround this incident. 

Respectfully Submitted. 

Mike Teotiknieh 

Prciidenr 

D&M Plastics 
chh - DMS 0005/01 0 

0e/03/20 U 15:46 FAX 2024935142 FAA 

Kc: In the Matter of D&M Custom Injection Molding Corporation 

FAA Case No. 2<H*9-GL'7«-0514 

Affidavit ofWinimn P. Bartkowski 

State or Minnesota 

Cuuaty of Hennepin 

BEFORE ME, the undersigned Notary. Roger Nielsen on this 21" day of July, 2011, 

personally appeared "William P. Barlkowski, 59, who being by me first duly swom, on his 

oath, deposes and says: 

1. My name is William B. Bankowgld. I am 59 years. Currenrtv, \ provide 

consulting services for a variety of businesses. From Sqjtember of 2008 through 

August of 2010, i served as the President of Ruyan America, Inc.. Minneapolis, 

MN 55419. r reside at 5223 Malibu Drive, Edina. MN 55436. 

2. Ruyan America, Inc. ("RAF') was a joint venture 49% owned by Minnesota USAbased Chong Corporation and 51% o\vned by China based Ruyan Group 

Holdings, Ltd. ("Ruyan Group"). 

^. The business of RAI was to import -what aie now called electronic cigarettes and 

accessories manufacmrcd by Ruyan Ciroup and market, merchandise and sell 

these prodvicls through established distribution and letail channels as smoking 

alternatives. 

4. These electronic cigarettes contained nicotine, suspended in an inert carrierpropylene glycol, which would vaporize into a amokc-likc vapor when a user 

drew on one end of the device, flipping a switch, activating a lithium battery* and 

engaging a vaporizer. 
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5 Between January of 2008 and March of 2009, RAI ixxcived a number of 

shipments of these products irnm China via Dllk Air without incident. 

6. In March of 2009, the US Food and Drag Administration ("FDA"),issued an 

import alen widi regard to all electronic cigarettes, raisinfi the concern ±at these 

products were unapproved drug delivery and drug products; and instructing US 

Customs and Border Security ("USCBS") to detain all such product containing 

the active ingredient nicotine. 

7. In May of 2009, RAI had a shipment of approximately 2,000 units detained by 

USCBS. Appeals to the FDA were futile. Tlie FDA claimed thai the presence of 

mcotioe in the wnits made them a smoking cessation product and, as such, 

required that such products required the submission of a New Drug Application to 

the FDA and a lengthy and costly approval process. 

8. Tn June of 2009, RAI, consulted with industry experts; and, made the decision to 

reformulate the product. Instead of nicotine, RAI dctemiined tliat an FDAexempt formula containing a well-established dietary supplement Lobelia, would 

be used. Rather than importing a fully-assembled and formulated model, it was 

determined that there were distinct marketing and merchandising advemtages to 

soui-ce and formulate Lobelia in the US and add the active ingredient to the 

product in a US based facility. 

9. In June and July of 2009.1 and others at RAI were referred to D & M Plastics, 

Inc. of Burlington, IL 60018. D& M was experienced in assembly, was certified 

in certain manufacturing process and was interested in doing the work. 
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10 The work was described to them as follows: Ruyan Group would ship partially 

assembled units to D <fe M. Additionally, they would ship other componcntsspecifically, cartridges and caps and materials for labeling and packaging. D& M 

was instructed to fill the cartridges with formula provided by RAI, insert the 

cartridges imo the units, cap the cartridges and then individually label and 

package the units for distribution. They agreed to do this work and a purchase 

order was provided to them by RAJ. At no time, was there any discussion of 

these units containing a lithium battery and/or flammable formula being a part of 

the assembly or formulating process. The purcha^tc order did not contain any 

description of the product or the formula that would have indicated the presence 

of a hazardous materinL It is my belief, that since these were products intended 

for hinnan consumption and presumptively regulated similarly to vitamins and 

other dietary supplemenis, it did not occur to D & M to inquire as to the nature of 

the components since no activity on their part required them to dissemble the part 

of the unit that contained the lithium ion battery, which would have revealed the 

presence of the lithium ion battery. In fact, dissembling the units, which would 

have revealed the presence of a lilhium ion battery, would have rendered the units 

unfit f'lr as.-^embly and unusable. 

1J. Historically, RAJ had relied on the inteznatJOiial shipping experts at Ruyan Group 

to provide all of its guidance with respect to shipping product and those shipments 

appeared to be properly and appropriately labeled. 

12. In -Tuly of 2009, RAI placed an order of approximately 2500 units with Ruyan 

Group, The units were manu^tured and partially assembled in China. They 
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were shipped from China directly to D&M. For reasons not known to me then or 

at this lime, the product was shipped in cartons and packaging that provided no 

information as to what was contained in the product. All relevant customs 

materials described the conlenls of the cartons as "electronic components." And, 

they were shipped by Ruyan Group by air, clearing customs in Cincinnati and 

then sent by ground to D&M's facility. 

13. D&M assembled the product and, pursuant to directions from us, sent the product 

overnight via Federal Expicsa (Fed Ex) to our Minneapolis location. Various 

delays in thi.s entire process- due to manufacturing and asseoibly delays in Chinamade their arrival in Miimcapohs a particularly urgent matter. 

14. So, to detail the specific circumstances surrounding the shipment, let me reiterate: 

a. D&M had no information at the time of shipping that the products 

contained hazardous mfltcrials. 

b. D&M would have been unable to discover the presence of hazardous 

materials from the packaging that was provided when tt was sent by air via 

DHL from China. 

c D&M would not have been able to discover ihe presence of hazardous 

materials Irom our discussions as to the use and purpose of the product- ro 

be used as aiLFpA -exempt dietary supplement-type producT intended for 

human consumption. 

d. D&M would not have discovered the presence of hazardous materials as a 

result of tmdcrtaking, managing or completing the process of assembly 

pursuant to the purchase order that they were provided. 
08/03/201 1 15-4 7 FAX 202433514 2 FAA - OMS QOOS/OI O 

e. D&M would have logically assumed that the product contained no 

hazardous materials and, as such, was appropriate for shipping via air in 

the US, given that that was how the product was shipped and transported 

to it from China by Ruyan Group. 

f As a Insult of the forgoing, there was no attempt by O&M to intentionally 

mislabel the product or mislead the carrier as to the contents of the 

products intended lo be shipped to Minneapolis. They completed all 

shipping documcnlaiion consistent with the documentation they received 

from China and consistent with the packaging that it arrived In. 

g. By the same token, given how Ruyan Group had traditionally sent us the 

product in Miimeapolis- we were expecting the shipment to us fi-cvn D&M 

to be expedited consistent with how it had been shipped intcmaiionally 

fir^m Ruyan Group. In fact it was shipped in that manner. 

h. The circumstances of the shipment and the project were such that D&M 

could not have logically discovered the presence of hazardous materials in 

the product and, thereby, shipped it in accordance with FAA regulations 

and guidelines. 

15. Addirionally, our own investigation as to the cause of the incident revealed that 

Ruyan Group, the manufecturer, had made an unauthorized design change in the 

product. ITiis information was provided to the FAA as a part of its investigation 

in the Fall of 2009. 
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16. Finally, as a result of the incomplete and, in the case of Ruyan Group, inaccurate 

information provided D&M by Ruyan Group and RAI, I believe that their 

euJpabilrty and their proposed civil penalty should be significanriy mitigated. 

ijmJ-Ls.^^. ^ 

William P. Bartkowski 

5223 Malibu Drive 

Minneapolis, MN 55436 

Subscribed and sworn to before me, this 21i:t day of My. 2011. 

[Notary Seal:] 

l[^^^¥wfrbf Notaryj 

Nielsen 

NOTARY PUBLIC 

My commission expires: J C ^^3 I , 20 / V