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." v'-'^f^^ENT OF 

UNITED STATES DEPARTMENT OF TILVNSPORTATION'.5';Y:!SP0RTATI0N 

FEDERAL AVIATION ADMINISTRATION ' ^' '•" •"' *-'' tRATlOiVS 

In the Matter ol: 

EMPIRE AIRLINES. INC. 

2^1 ML 2q A S: 0 5 

FAA DOCKET CP09NM0OO9 

FAA Case No. 2007NM700155 

DMS No. FAA-2009-05l:l6 

RECEIVED 

Administrator, Federal Aviation AdmiDistration: 

JUL 2 e 2011 

REPLY BRIEF 

Pui-suant ro 14 C.F.R. § 13.233(d) under ihe Rules of Practice for FederaTAviafit 

Administration (FAA) Civil Penalty Actions, 14 C.F.R Part 13. Empire Airlines. Inc. 

("Hmpire"), by and through undersigned counsel, hereby files this Reply Brief response to the 

brief of Complainant. 

STATEMENT OF THE CASE 

On July 27, 2009, Complainant issued a complaint assessing a civil penalty of $20,000 

for ceitain violations of the Hazaidous Materials Regulations (TIMRi, 49 CFR parts 171-lSO. 

including^ 175.3. 175.30(a)(2), 175.30(a)(3), and 175.33(c)(3).' The particular legukiiion ai 

issue, § 175.33('c)(3t- requires The aircraft operator to have the infonmaiion retained in the notice 

to the pilot-in-command (NOPIC) be readily accessible at the airpon of departure and the 

intended airport of aiTival for the duration of the flii;ht leg." This information includes the 

location of hay.ardous materials aboard Ihe aircraft. Si-c 49 C.F.R. !i 175.33(a)(4). 

' The FA A also iiiiUiuovJ piut-Ccdiii^S ugnirisi Fi;dE.it Express i.^ cc^nncclud iv the .samL undurlyin-.' laciua] 

irLinSat-iHin.'; :ir ivvue here 2nd the law judge tr»und vinbtioiis for 49 C.F.R. §§ 175.3 and l75.30(ii). •S'cc' FAA Docket 

No. CK>'..»NM*X>ia DMS No. l'AA-20'jy-0721.1'AA Cubc Nu. 2(»07NM700I56. FedEx Expie.V5 did nor appeal. 

-This Reply Brief jddre.v.SL-.s i.ssuc^ of law and f.icT cnncerning hlighi 867S-22. rhe alleged violation of 175.33(e;i(3). 

sndadiujiini^ni «\'<JWI] pL:nijli) issue raised by Cunipltiinani in il^ Appeb! Brief. In a .separate, hut rclaicd appeal, on 

June 22, 2011, Empire Tiled .in appeal brief under 14 C.F.R. 6 13.233(d) reqtiesiing reversal of ihc ALJ\ Initial 

Decision as ii relaics lu violauon^ 0149 C.F.R. §§ \15.?. and 175..^f>uX2) and (3"). Therefore, ihi.s Reply Brief does 

noL subsmntively lepeai ihe aiguJiiems set fonli therein with regard le- ihe^e regulaiions und Empire Righi Rn77-22. 
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Empii'C disputed the Complainant's allegations and requested a hearing. See 

Respondent'.s An.swerand Statement of Affirmative Defenses (Sept. 16. 2009). The 

Admini?;rrative Law Judge ("ALJ") Richard C. Goodwin .set the hearing in this matter for, and it 

wa.s held on October 26 and 27, 2010. Order Continuing Case and Notice of Hearing Date^ (Jun. 

22, 2010). 

On March 28, 2011, the AU issued the Initial Decision, which found that Empire had 

violated !j 175.3, and 175.30(a)(2)-(3;. but that the Complaiiiiint had failed to prove the alleged § 

175.33(0(3,1 violation. The ALJ also assessed a total civjl penally of $12,000. 

The issues in dispute specificall)' relate to Flight 8678-22 and the relationship and roles of 

Empire and FedEx Express in making accurate notice to the pilot-in-command (NOPIC) 

information readily accessible at the airport of arrival located in Medford, Oregon. 

STATF\fENT OF THE FACTS 

Empire is an air cairier certificated under 14 C F.R. Pari 119 that provides supplemental 

or feeder airline service for Federal E.xprcss ("FedEx Express") pursuant LO a cuniraci. (Tr. at 

168; Exhibit C-11; Exhibit C.-16. An.swer at 1). Empire operations arc exclusive to the FedEx 

Express network with Empire providing access to rural areas from FedEx Express hub airports. 

(Tr. at 168; Tr. at 186). FedEx Express uses Empire to acces.s rural markets, such a.s the Medford 

area, instead of dedicating FedEx Express's trunk aircraft. (Tr. at 133-134). 

Empire's corrmiercial feeder operations are completely dependent upon and exclusive to 

FedEx Expres.s. (Tr. at 168). Empire, however, pays and trains its employees, including 

crewmembers, and provides them with uniforrrks. Tr. 169-170. Empire also retains operationril 

control of the aircraft, but FedEx Express owns the aircraft, which both display the FedEx 

Express logo and denote Empire's role. (Tr. at 68; Tr. at 149-150: Tr. at 186; Exhibit C-16). 

The aircraft utilized by Empire are listed on Empire's FAA-issued operations .specifications. 
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(Exhibit C-13). 

T*ursuani lo its contract with Empire, FedEx Express undertakes ccrifiin pre-tiansportaiion 

functions including accepting and loading services. (Tr. at 132-134). Empire docs not 

physically accept or load cargo and relies upon the instrumentalities, tools, facilities, and 

employees of FedEx Express. (Tr. at 30, 16-22; Tr. at f 33-136). When a FedEx Express main 

flight lands at the FedEx Express station ai Portland, Oregon, FedEx Express employees offiuad 

the cargo using FedEx Express unit load devices (ULDs) and bring the cargo to a FedEx Expjess 

sorting facility. (Tr. at 51). If the cargo is destined for an Empire aircraft, ihen FedEx Express 

employees place the cargo in FedEx Express carts that ajc tugged by FedEx Express employees 

to the Empire aircraft. (Tr. at 51-52). Once at the aircraft, the FedEx Express personnel load 

each aircraft by using FedEx Express rollers leading lo the aircraft. fTr. at 51-52: Tr. at 175-176; 

Tr. at lBl-182). 

Under Empire's FAA-approved General Operations Manual ("GOM"), the Empire 

crewmcmber supci"v'ises the FedEx Express accepting, processing, transponing, and loading 

process. (Exhibit C-111. Empire's GOM. Appendix G, requires that FedEx Express employees 

actually separate ihc hazardous material from other freight so that the Empire crcwmembcr may 

accomplish the pre-load in.speciion. (Tr. at 66; Tr. at 187-189. Tr. at 197-198: Exhibit C-ll). 

In executing this separation task, the FedEx Express loading personnel utilize inform.irion 

previously entered into FedEx Express clecitonic hazardous material tracking system. 

"AuioDG." (Tr. at 140-1441 Only FedEx Express employees have access to Auto DO. (Tr. at 

146.) Only FedEx Express employees trained in the use of the Auto DG system can update the 

database. (Tr. ai 146-147). Empire employees do not have access to AuioDG and. therefore, 

cannot correct database discrepancie.s. (Tr. at 149: Tr. al 175). Once the hazardous materials arc 

separated from other freight, FedE.x Express employees present the Empire crewmember wiih an 
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AutoDG manifest so that the pilot tnay sun-'ey the contents of the list against the separated 

packages. (Tr. at 173; Exhibit C-3; E.xhibit C-11. C-11-41). 

Under its GOM, Empire also maintains on hoard the aircraft a paper form, the Feeder 

Aircraft Load Control Sheet ("Load Control Sheet"), which notes the location of hay.ardous 

materials aboard the aircraft on the right-hand side of the document. (Tr. 28-29; Exhibit C-3). 

The Load Conm':>l Sheet may serve as the NOPIC or in conjunction with the AutoDG Manifest. 

{Exhibit C-11, C-11-41). The conicnts of the Load Control Sheet are not computer generated and 

the fomi must be filled out by hand by the FedEx Express DG .specialist. (Exhibit C-3). When 

completed, both the Empire crewmember and FedEx Express DG specialist certify the contents 

of the document. (Exhibit C-3; Tr. at 29; Tr. at 179-180). 

If the load position of ihe hazardous material package changes from what is listed on the 

Load Control Shcci. ihe FedEx Express DG .ipecialisr can correct and iniiiLd the change with a 

pen and the Empire crewmember then certifies this change. (Exhibit C-11, C-11-42). Empire 

has no access to AutoDG or the ability to change or update the system. (Tr. at 80-81; Tr. 146-

149; Tr. at 175; Exhibit C-11). However, FedEx Express procedures require that its employees 

update the AutoDG every.time a hazardous material shipment changes conveyances so that 

emergency responders can have current database access to the infoniiation upon request. (Tr. 

143). Once entered befoie take-off, this information may be printed and accessed at a down-line 

station in the form of an Inbound Dangerous Good (DG) Alert. (Tr. at 23-25; Exhibit C-2). 

On August 22, 2007, FAA agents conducted an inspection at the FedEx Express facility 

at Medford. Oregon. (Ti. at 17; Tr. at 94: E.xhibit C-1). The KAA agents requested thai FedEx 

Express personnel produce certain information related to two flights, including Fliglil S678-22 

operated by Empire, ("fr. at 19; Exhibit C-2). Upon the arrival of Flight i>678-22 from Portland, 
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Oregon, the FAA agents observed the offloading of the aircraft, a Cessna 208B, by FedEx 

Express personnel. (Tr. at 26-27). 

The FA A agents sought to determine whether their observations during oflloading 

corresponded with the information provided by FedEx E.xpress ai the down-line .station. (Tr. at 

19). The FAA agents reviewed FedEx Express Inbound DG Alert for Flight 3678-22. (Tr. 21-

22; 45. Exhibit C-2). The Inbound DG Alert for flight 8678-22 indicated that certain hazardous 

materials - specifically, corrosives, a Class 8 hazardous material - were onboard the aircraft 

located in the main deck. lExhibit C-2; Tr. at 23). The Inbound DG Alen also indicated that no 

hazardous materials were located in the pods or lower deck of the aiicrafi. (Exhibit C-2; Tr. 24). 

However, when the FAA special agents observed the offloading of Flight 8678-22, the corrosive 

material was located in Hod C (Tr. at 26-27; Exhibit C-4). 

Before Flight 8678-22 deparicd for Ponland, Oregon, and following ihe pie-board 

inspection, the Empire crewmember requested that the corrosives be moved from the main deck 

to the pod. (Tr. at 29-30; Tr. at 81-82; Tr. at 162-163; Tr. at 191-192;). The Fed Ex DG 

specialist made a handwritten note updating the Load Control Sheet, which was consistent with 

the procedures .set forth in Empire^s GOM. (Tr. at 179-180; Exhibit C-11, C-11-42). 

Specifically, the Li^ad Control Sheet for Flight 8678-22 was marked to show that the corrosives 

had been loaded into Pod C. (Exhibit C-3; Tr. at 28-29). Empire then expected the KedEx 

Express DG speciali.st to enter this new information into the AutoDG system. Tr. at 179: Tr. al 

192-I93y The AutoDG .system was not updated during the course of the flight and, therefore, 

the Inbound DG AieiT reviewed by the FAA agents reflected incorrect information on the 

location oif the corro.sives. (Exhibit C-3: Tr. at 32; Tr. at 179-180). The actual lociuion of the 

corrosives aboard Flight 8671^ -22 was listed on the Load Control Sheet, known to the Empire 

crewmember onboard the aircraft and FedEx Express DG specialist at Portland, Oregon, hut not 
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readily accessible on documentation at ihc intended airport of arrival. Medford. Oregon. (Tr ai 

31-32: Tr. at 81-82; Tr. at 162-163; E.xhibit C-3). 

THE ADMINISTRATIVE LAW .lUDGF/S INITIAL DECISION 

The ALJ dismi.ssed the violations of § 175.33(c)(3) after carefully reviewing the 

circumstances involved in the ease.' Initial Decision, at 4. The ALJ noted thai evidence 

demonstrated that Empire crewmember decided prior to takeoff from Portland to move the 

corrosives to Pod C after being originally located in the main deck. Id. at 3. Tiie FedEx Express 

DO specialist in Portland noicd the movemeni on the Load Control Sheet and the pilot signed off 

on the change and w.^s given a copy of the form. Id. But no computer entry in the AutoDG 

system, exclusively controlled by FedEx Express, was entered. Id. As a resuli the updated data 

on the location of the corrosives was not scntdown-Jine. Id. That is why Ihc records chc FAA 

agenis obtained at the airport of arrival, Medford, reflected the old locaiion of the ha7ardous 

material. Id. Under such circumstances, the air carrier cannot be held liable I'or "every failure of 

performance" tinder § 175.33(c)(3). Id. at 4. 

The ALJ recognized that Empire's lespon.sibihiy for compliance under the HMR cannot 

be delegated as a result of its elevated duty of care. Id. ("the highest possible degree of care"). 

However, the ALJ interpreted thi.s elevated duty of care within the facts of this ca.se and the 

context of the liMR, including its requirement of con.structive knowledge and allowance for ihc 

exercise of reasonable care. Id. (citing 49 C.F.R. § 171.2(f)). 

In this case. Empire possessed a wrilten record of the change. Id. Moreover, FedEx 

Express routinely performed the task Empire relied upon. Id. Therefore, the AU held: "[I]t was 

reasonable to a.'^.'^ume that the necessaiy computer entry also would be made in due course by the 

FedEx official responsible." Such circumsianccs do not create a duty to mvestigate further and 

the concomitant knowledge of what an investigation would have revealed. Id.. [VV(^reover, the 
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regulation did not require thai Empire undertake overly burdensome or greatly inconvenient 

steps to ensure compliance. Id. 

After reviewing the totality of the circumstances, other civil penalty actions, and FAA 

penalty guidelines, the ALJ assessed a civil penalty of $12,000. Such a penally, even if lower 

than the .S20,000. appropriately reflected the nature and extent of the risk to air transportation 

Safety created by Empire, while giving appropriate weight to other salient factors. Id. at IL 

Among other considerations, ihe AU found it niifigaiing that Empire relied on incorrect 

information from the prior offeror(s) - missing shipping papers. Id., at 10-11. Additionally, 

Empire was "[IJacking a warning" that hazardous material was on board the aircraft. Id. 

STANDARD OF REVIEW 

The FAA decisionmaker reviews issues of facts and law when considering an appeal and 

may affirm, modify, or reverse the initial decision, make any necessary findings, or remand the 

case for any proceedings that the FAA decisionmaker determines to be necessary. 14 C.F.R. ii 

13.233. 

The specific facts underlying a situation must be derermined before the legal standard 

may be correctly applied. Hlakemore v. Coleman. 701 F.2J 967 {D.C. Cir. 19831 The ALJ's 

findings of fact must be upheld if supported by a preponderance of reliable, probative, and 

substantial evidence. 14 C.F.R. § 13.233t'bi. An agency's factual determinations are conclusive 

if they are .-iupported by substantial evidence. 49 U.S.C. § 46110(e); iec also 5 U.S.C. § 

706(2)(El (courts must .set aside agency actions which are "'unsupported by substantial 

evidence"). Substantial evidence is such relevant evidence as a reasonable mind might accept as 

adequate lo support a conclusion taking into account whatever in the record fairly deiracis from 

its weight. Ickes v. FAA, 299 F.3d 260. 264 (3d Cir. 2002) {citations and quotation marks 

omitted). Ultimaiely, the agency's decision must provide a satisfactory explanation thai draws a 

rational connection between the facts found and the choice made, dry ofSnnta Monica v. /-"A.^, 
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631 F.3d 550. 554 (D.C. Cir. 2011) (cilins Motor Vehicle Mfrs. Ass'n v. Stale Farm Mut. Auto. 

Ins Co., 463 U.S. 29, 43 (U.S. 1983) and 49 U.S.C. § 46110(c)). 

The ALT'S conclusions of law must be upheld if made in accordance with applicable law, 

precedent, and public policy. 14 C.F.R. § 13.233(b.). More generally, federal agency decisions 

must noi be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 

5 U.S.C. § 7(J6("2)(.'\); see also Garvey v. NTSB, 190 F.3d 571, 577 (D.C. Cir. 1999). A federal 

agency decision is arbitrary and capricious if the agency has relied on factors which Congress 

has not intended it lo consider, entirely failed to consider an important aspect of the problem, 

offered an explanation' for its decision that mns counter to the evidence before the agency, or is 

so implausible that it could not be a.scribcd to a difference in view or the product of agency 

experti.se. Moior Vehicle Mfr^. Ass'n., 463 U.S. at 43. 

ARGUMENT 

1. The ALJ's finding that Empire lacked constructive knowledge and exercised 

rea.sonable care under § 175.33(c)(3) is supported by substantial evidence and is 

consistent with applicable law, precedent, and policy. 

The ALJ's dismis.sal of violations under § 175.33(c)(3) is supported by a preponderance 

of substantial evidence and consistent wnh applicable, law, precedent, and policy. A 

preponderance of substantial evidence demonstrates that Empire lacked consiruciive knowledge 

and exercised reasonable care when executing its functions under § 175.33(c)(3). The .MJ's 

analysi.s nf Empire's lack of constructive knowledge and theexerci.se t)f reasonable care under § 

175.33(c)f3) is consistent with applicable law, precedent, and policy. It is Complainant thai is 

mistakenly interpreting an air carrier's elevated .standard of care to preclude an analy.sis of 

constRictive knowledge when determining liability under the HMR. Part of this confusion 

stems frojii the fact that the knowledge of an ;ur carrier's independent contractors is not \ 

automatically imputed to ihe air carrier under the HMR. Even if ihe FAA decisionmaker 

considers Complainant's line reasoning, the precedent cited to support Complainant's imposition 
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of liability is substantially different from the circumstances of Empire's actions and 

responsibilities under § 175.33(cK?)- Therefore, the KAA decisionmaker should affirm the 

fmding that Empire did not violation § 175.33(c)(3). 

a. A preponderance orsubstanCiaJ evidence demoastrafcs ihai Empire }iicked 

con.su-uetive knowledge and exercised reasonable care when executing its 

functions under i> 175.33(cK3). 

The duty of care exercised by the air operator, ihe reasonableness of it.s eCfort, must be 

mea.<ured by the precise circumstances involved and within the applicable regulatory context. 

FAA V. Federal blxpfess Corporavion, FAA Docket No. CP0iNM00]5, 2002 FAA LEXIS 570 

(Oct. 31,2002Kat*10(nrm^/J^//7€viJ. Paquet Cruises, inc., 1(^9^.2A 169 (2 Cir. 1983): 

Pros.ser. The Law of Jons § 34, p. 181 (4th cd. 1971)). In an enforcement proceeding, such an 

inquiry is always involves a question of fact, to be determined by the fact-finder. See 63 Fed. 

Reg. 30411, 30412. Becau.se innumerable fact patterns may exist, it is not practicable to set forth 

a list of specific criteria to govern whether or not an air carrier has sufficient constructive 

knowledge under a particular regulation to support a violation. Id. 

In this case, when determining whether Empire exerci.sed its duty of care, the ALl 

thoroughly examined ilie relationship of the actors in the chain of custody and within the precise 

regulatory context of the HMR and § 175.33(c)(3). The record adequately suppons the ALJ's 

conclusion that Empire took reasonable actions within the chain of custody to carry its burden of 

c-^Q under the particular circumstances ot § 175.33(c)(3). 

Part 175 applies to the transportation of hazardous materials in commerce aboard aircraft. 

Section 175.1 noics that Subchapter A of Part 175 applies to air carriers and their contract 

personnel, including hading personnel. Thus, Pari 175 acknowledges that air carriers do not act 

alone in the chain.of custody of ha/.ardoi)s mioterial.s and n)ay contracj oui ccrta'm ^crvice.-i to 

independent contraciors, including functions required under § 175.33. 
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Section 175.33 requires that when hazardous nidiciial i.s transported by air. a copy of the 

shipping paper must accompany the shipment during transportation, and the aircraft operator 

mti.st provide the pilot-in-command of the aircraft written information relative to the hazaidous 

materials on board the aircraft (i.e.. the NOPIC). The particular regulation at i.s.sue. 5 

175.,33(c)(3), requires the aircraft operator to have the infonnarion retained in the NOPIC be 

readily accessible at the airport of depaiture and the intended airport of arrival for the duration of 

the flight leg. This information includes the location of hazardous materials aboard the aircraft. 

5V.? 49 C.F.R. § 175.3?(aK4). 

Importantly, the regulation does not precisely proscribe how the air operator may relay or 

make the NOPIC mformation "readily accessible" at the intended airport of arrival (i.e.. the 

downline station). (Tr. 80-81.) When first proposing this requirement, DOT di.savowed 

mandating ihat air carrier's u.se a computerized tracking system and suggested the use of a 

reference phone number for obtaining information contained in the NOPIC. 67 Fed. Reg. 6669, 

6671-6672 (Feb. 13, 2002). During the final mlemaking, instead of proscribing specific methods 

or technological means, DOT stressed that ac.cessibiliry of information from a source other than 

the crewmember onboard the aircraft was central U) satisfying the agency's concerns. 6S Fed. 

Reg 14341, 14343(Mar. 25.200.3). 

DOT explained that the air carrier's duty under § 175.33(c) required that airports of 

arrival "must only have the means available to retrieve"' NOPIC information such that this data 

can be received and transmitted in a "timely manner" to emergency responders. 68 Fed. Reg. 

14341. 14343-14344. For cxitmplc. wirh facsimile machines and email capabiliiies, air carrier's 

can easily .store the infonnarion m the airport of departure and then, when necessary, transimi it 

10 the airpon of arrival very quickly. Id. 

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When considering the standard care required under § 175.33(c)(3). it is also helpful to 

review what DOT deemed non-mandaiory or exceeding the standard. DOT was particularly 

mindful of the resources of small operators. Id. The agency observed that a computer tracking 

.sysfem whi/e not m.inciatory woa/d enhance rhe rransmissron ofliHzai'ciou:^ maic&dl inSonn-diion 

and was an acceptable method of compliance. Id. DOT stressed that nothing in the rule requires, 

however, that an aircraft operator has to fa\ every NOPIC lo its final destination before a flight 

takes-off or lands: in other words, no written record at the airport of arrival is necessary to 

achieve compliance. Id. DOT further suggested that retaining personnel at both airports of 

amval and destination while an aircraft is in flight exceed the standard of care required. Id. 

Consistent with this regulatoiy context. Empire complies with the NOPIC and shipping 

paper requiremenis of ij 175.33 through a multi-layered system. First, Empire crewmembers 

physically luaintam onboard the aircraft the Load Control Sheet, which notes the location of 

hazardous materials liboard the aurcraft on the right-hand side of the document. (Tr. 28-29; 

Exhibit C-3). Under Empire's GOM, the Load Control Sheet is defined as follows; 

This dual-purpose form shows the amount and location of all loaded cargo and the 

class and location of DG loaded on the aircraft. The Load Control Sheet may he used 

as the notiftciiiion of PIC or in conjunction with the. AutoDG Manifest. Tf ihe Load 

Control Sheet is without an AutoDG Manifest, then the Shipper's Declaration mu.st 

also be with the Load C(mtrol Sheet. The Load Control Sheet and Shipper's 

Deelaration(s) contain the information required per HMR 175.33. (example in GOM 

Chapter 15). (T:xhibit C-11, C-11-41) (emphasis added). 

The contents of the Load Control Sheet are not compuier generated and the form must be 

filled out by hand. (Exhibit C-2). When completed, both the Empire crewniember and FedEx 

Express DG speciali:;t certify the contents of the document. (Exhibit C-3). 

Second, m Older To fulfil! its NOPIC requirements. Empire contracts v'-iih FedEx Express 

and uriti7.es the AutoDC system. iTr. 80-81). Empire's air tran.sporlalion ser\'ices are wholly 

dependent upon being a feeder airhne in FedEx Express's larger network. (Tr. at 133-140.) 
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AutoDG is FedEx Express's electronic automated dangerous goods manifesting system and 

similar to the computer tracking envisioned by DOT as enhancing the tran.srnission of NOPIC 

information. (Tr. ai 140-142). 

Before loading feeder aircraft, FedEx Express personnel separate and load hazardous 

material based on information entered into the AutoDG System. (Exhibit C-11, C-11-41; Tr. at 

66, Tr. at 187-1R9; Tr. at 197-198: Tr. at 140-144). Once the hazardous materials are separated 

from other freight. FedEx Express employees present the Empire crewmember with the AuioDCi 

Manifest so ihat the pilot may sur\'ey the contents of the li.st against the separated packages. (Tr. 

at 173: Exhibit C-3). The separating and loading of hazardous material by FedEx Express is 

performed so that the Empire crewmember may accomplish the pre-load inspection, i^xhibit Cll,C-n-4r). 

Third, during this pre-board inspection, in the case of a discrepancy or change, Empi?e 

takes active measures to ensure that hazardous materials information is accurately 

communicated. For example, Empire's GOM expressly allows that if the load position of ihe 

hazardous material package changes from what is listed on the Load Control Sheet, the FedEx 

Express DG speciiilist can correct and initial the change (with a penl and the Empire 

crewmember then certifies this change, (^xhibit C-11, C-11-42). These procedures also allow 

another person to pciform the pre-board inspection and then provide the Empire crewinember 

with written notification, which is kept with (he Empire crewmember during the flight. (Exhibit 

C-11, C-1 1-20) (Pilot-in-Conuiiand Notification). 

Empire ha?; no access U) AutoDG or the ability change the AutoDG manifest. (Tr. at 

156). Only FedEx Express personnel that are trained in the use of AutoDG can access and 

update Ihe system. (Tr. at 146: Tr, at 149). Therefore, an Empire crewmember can only request 

and expect that FedEx Express personnel make changes to AuioDG. (Tr. atl79; Tr. at )92-]9-3). 

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According to FedEx Express procedures, its employees update ihe AutoDG every time a 

hazardous material shipment changes conveyances so that emergency responders can have 

current database access lo the information upon request. (Tr. 143). 

Finally, under its contract as a feeder airline exclusively within ihc FedEx Express 

network. Empire benefits from the pre.scnce of HedEx Express personnel at each of the locations 

where Empire depatts and arrives. (Tr. 51-52". Tr. 144-148: Tr. 168). Given that FedEv Express 

employees load Empire's aircraft and sign off on the Load Control Sheet, emergency responders 

can contact a FedEx Express employee at an airport of depaiture to determine information 

concerning hazardous material on board Empire aircraft. (Tr. 174-175; Tr. 190-193). 

Here, when FedEx Express personnel were loading Flight 8678-22 ai Ponland, OR, the 

Empire crewmember requested thai the position of the corrosives be changed to Pod C from the 

main deck of the aircraft. (Tr. 29-30; Tr. Si-82; Exhibit C-1; Exhibit C-3). In accordance with 

the GOM, the FedEx Express DG specialist then noted the change in 'pen and ink" on the Load 

Control Sheet. (Tr. 179-lRO). The Empire crewmember then certified this change in location by 

executing the document. (Exhibit C-3). Tlius. the Empire crewmember had accurate and 

verified notification as to the location of the corrosives on board the aircraft.. (Exhibit C-3; Tr. ai 

28-29; Tr. 162-163). This entire process to update to the Load Control Sheet was consistent with 

Empire's FAA-approved GOM. (Exhibit C-11, C-11-42, Tr. at. 179). 

The Empire crewmember then requested that the FedEx Express DG specialist update 

AutoDO to reflect the re-positioning of the hazardous material. (Tr. 191-192.) The FedEx 

Express DG specialist agreed to enter the new infoi ination into the electronic tracking system. 

(Tr. ar )92h This would ensure that the AutoDG system would reflect accurate data, which 

would he readily accessible at the FedEx Express facihty in Medford, OR. (Tr. at 192-193). 

Despite this agreement, the FedExpres DG specialist failed to update AuioDG. (Tr. 21-25: 

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Exhibit C-2.) As a result, the Inbound DG Alert reviewed by the FAA special agents w.is not 

consistent with Load Control Sheet (the NOPTC) on board the aircraft. (Tr. at 24; Tr. at 36; 

Exhibit C-2.) 

A.S the AU determined, these circumstances substantially support a tiading that Empire 

exercised reasonable care and. therefore, lacked constructive knowledge of violating 49 C.F.R. § 

175.33(c)(3)."' (Initial Deci.sion, at 4-5.) hi fact, because the FedEx Express DG specialist at the 

aii-port of departure (PorUaud) was aware of the correct information, he could have faxed or 

emailed this information to the airpon of arrival (Medford) upon the reque.^i of appropriate 

authorhies. (Tr at 29-32; Tr. 179-180). This is similar to the solution DOT deemed exceeded 

the mandatory requirements of § 175.33(c)(3). 68 Fed. Reg. 14341. 14343-14344. 

More generally, under its Gi)M and the ij 175.33(c)(;3) Empire was not required to 

physically supervise the entering of data into AuioDG and could instead reasonably rely on 

FedEx Express's affirmation and past practice to update the AutoDG system. Empire took active 

and reasonable mea.sures, wiihin the air carrier's control, to communicate accurate hazardous 

m:iterial information wai readily accessible at the down-line station. In contrast, there is not 

substantial evidence thai Empire should have known ur had a reason to know that FedEx Express 

would not do as promised. Empire pos.sessed an old and obsolete AutoDG manifest. (Exhibit C3; Tr. 35-36). However, following the change, there was no new information available to 

Empire that the FedEx Express DO specialist would not uphold his end of the agreement to 

update AutoDG. An investigation of the available information and material would not bring to 

iighr the compuier omission by the FedEx Expres.s DG specialist. There was nothing to lead 

Empire to suspect that FedEx Express would noi follow its routine company procedures lo 

update AutoDG following the change in conveyance. (Tr. at 143; Tr. at 179). 

Complainani ha.s nor .ilJeged ihat Empire h.nl JCIUHI knowJedpe ci'ihh vjoihtion. 

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According to Complainani. this l>T>e of searching reasonable care analysis is "mcntless" 

becau.se Empire is an air carrier. Complainant's Appeal Bnef, at 13. However, Complaint's 

proposed strict imposition of liability is what ignores applicable law, precedent, and policy. 

b. The .MJ^s analv.<^is of Empire's lack of constructive knowled^^e and exercise of 

reasonable care under J; 175.33(0(3) is consistent wjrh applicable law, precedenr. 

and polity. 

The HMR recognizes ihat there may be various actors within the chain of custody of a 

hazardous materials shipment and accounts for the various factual circumstances involving prior 

offerors, initial air carriers, and their contractors and agents. jt".^(j., 49 U.S.C. § 171.2. Many of 

the difficult questions of liability under the HMR arise along the chain of custody when the 

actions of a third party are the cause for non-perforrnance. but the air carrier or offeror is 

unaware of the facts giving rise to this violation. See generally, 63 Fed. Reg. 30411 (Jun. 4, 

I9y8_(. Under such circumstances, air carriers .such as Empire are permitted to exercise 

reasonable care under § 175.33(e)(3) and the HMR. This conclusion is consistent with 

applicable .statutes, regulations, formal inierprelalions. policy guidance, and enforcement 

precedent. 

'fhe Hazardous Materials Transponatinn Act (Hazmat Act), 49 U.S.C. § 5101 et seq.. is 

the basic statute regulating hazardous materials tran.^poriaiion in the United States. In order for 

(iahihiy to be imposed under Haz.mat Act, a person must "knowingJy" violate ihc stature and 

corresponding regulations, orders, or exemptions. 49 U.S.C. § 5123(a). A person acts knowingly 

when the person has actual knowledge ot the facts giving rise to the violation; or a rea.sonable 

person acting in the circumsianccs at hand and exercising reasonable care would have that 

knowledge (-constructive knowledge"). Id. (n short, through constructive knowledge, the 

Hazmat Act mtrodiiccs the exerci.^^e of reasonable cure analysis. 

15 
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Thi^ constructive knowledge requirement is evident in the Ha7.mat Act's legislative 

history. Congress authorized DOT lo assess civil penalties against a person vvho knew about the 

act that constituted a violation, but may have been unaware of the law. In the Matter of TCI 

Corporation, FAA Order No. 92-77 at 9, n. 13 (December 22, 1992). As noted by fhe FAA 

Administrator in TCI Corporation, the conference report accompanying H.K. 15223, which w-as 

later enacted, cleariy incorporates the constructive knowledge test: "(4)... that a civil penalty 

may be imposed onh upon prou/that the defendant knowingly committed the act which 

constimtes the violation (it is not necessary to show that he knew the act constituted a 

violation).,." Id. (quoting S. Conf Rep. No. 1347, 93rd Cong., 2d Sess., reprinted in 1974 U.S. 

Code Cong. & Ad. News 7669, 7686). 

The Hazmat Act's constructive knowledge test is linked to the concept of reasonable 

reliance in the HMR. For example, 49 C.F.R. § 171.2(b) states that each offeror may rely on 

information provided by another offeror, unless that offeror knows or, a rea.sonable person, 

acting in the circumstances and exercising reasonable care, w'ould have know'ledge that the 

information provided by the other offeror is incorrect. This pruiciple is reiterated in § 171.2(f). 

a<; note by the AU, which stales that each carrier who transports a hazardous material in 

commerce may rely on information provided by the offeror of the hazardous material or a prior 

carrier, unless the carrier knows or. a reasonable person, acting in the circumstances and 

exercising reasonable care, would have knowledge that the information provided by the offeror 

or prior carrier is incorrect. See Initial Decision, al 4. It should be noted that air carrier's like 

Empire reasonably rely on such regulatory language when drafting the contents of FAAapproved GOM. (Exhibit C-11, C-11-9) (describing circumstances when Empire can rely on 

mformation of prior offerors/shippers). 

16 
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In 1998. the DOT issued a formal inierprciation of the HMR concerning the 

responsibilities of a carrier when accepting hazardous materials for transportation in commerce. 

63 Fed. Reg. 30411. Tlie DOT affirmed that a carrier must "knowingly" violate the HMR when 

the carrier accept-s or transports a hazardous material with actual or constructive knowledge that 

the shipment does not comply with the HMR, 63 Fed. Reg. 30411, 3f)412, An air carrier may 

not ignore readily apparent facts that indicate non-compliance with the HMR such as either (1) a 

shipment declared lo contain a ha^.ardous material is not properly packaged, marked, labeled, 

placarded, or described on a shipping paper, or (2) a shipment actually contains a hazaidous 

marerial governed by the HMR de.spiie the fact that ii is not marked, labeled, placarded, or 

described on a shipping paper as containing a hazardous material. Id. All relevant facts must be 

considered to determine whether or not a reasonable person acting in the circumstances and 

exercising reasonable care would realize the non-compliance wiih HMR requirements. Id. 

DOT specifically acknowledges ihat a carrier "regardless of the mode of transportation" maybe 

"irtily innocent" under 49 U.S.C. § 5123(a) if such carrier lacks the requisite knowledge. Id. 

FAA guidance material regarding hazardous material enforcement also incorporates the 

exercise of reasonable care analysis. Order 2150.3B contains policies, procedures, and 

guidelines for the FAA's compliance and enforcement program. Appendix C of Order 2150.3B 

serves as the "Sanction Guidance for Hazardous Materials Enforcement" (ihe "'Saneiion 

Guidelines"). According to the Sanction Guidelines, only a "knowing violation" of the HMR 

can lead to a civil penidiy. Sec al.so 64 Fed. Reg. 19443, 19444 (Apr. 21, 1999). A person acts 

knowingly when the person has actual knowledge of the ("acts giving ri.se to the violation; or a 

reasonable person acting in the circumstances and e.n.ercising reasonable care w-ould have that 

knowledge. Order 2150.3B, Exhibit C. C-2 (cilini; 49 U.S.C. § 5123(a)). 

17 
07/29/201 1 08:0 1 FAX 2024935142 FAA - QMS 0018/03 1 

Past HMR enforcement precedent further indicates that FAA must review the duty of 

care exercised by the air operator, and ihe reasonableness of its effort, against the precise 

circumstances involved. FAA v. Federal Express Corporation, FAA Docket No. CP01NM(X)15. 

2002 FAA LEXIS 570 (Oct. 31, 2002). at *W (citing Raincv v. Paquet Crime..'^. Inc., 709 F.2d 

169 (2 Cir. 1983,): Prosser, Tlic Law of Torts § 34, p. 181 (4th ed. 1971 f). Accordingly, even 

with an elevated .standard of care, the basic principle behind the carrier's duty remains 

unchanged: it is whal is requiredof any entity charged with a legal duty- i.e., the conduct of a 

"reasonable man" of ordinary prudence under the particular circumstances. Id. 

c. ComBJainani i.s^misiakenly interpreting an air carrier's elevaied standard o( care lo 

preclude an analysis of constructive knowledge when determining liabiliiv under 

the HMR, 

The Federal Aviation Act of 1958 charges air c-arncrs wjrh the duty to provide .service 

with the "highest possible degree of care in the public interest." 49 U.S.C. § 44701(d)(r)(A) 

(promulgation of regulations and standards); 49 U.S.C. § 44702 (issuance of certificates). Ba.sed 

on litis principle. Complainant has mainiained that air carrier responsibility for functions such as 

airworthiness, security and maintenance cannot be delegated. See generally In the Matter of US 

Air. Inc.. FAA Order No. 92-70, 1992 FAA LEXIS 352 (Dec. 21, 1992.) (airworthiness); In the 

Matter of Vf'estAir Commuter,V\M:n^Ct^O. 9(>-\fi, 1995 FAA LEXIS 342 (May 3, 1995) 

(security); In the Matter of Empire Airlines, FAA Older No. 2000-13, 2(X)0 FAA LEXIS 648 

(June 8, 2000) (maintenance); and In the Matter of Alaska Airlines, FAA Older 2004-8, 2004 

FAA LEXIS 905 lOci. 4, 2004) (maintenance). 

In inierpreting and applying this precedent, however. Complainant is creating an absolute 

standard of liability for air carriers under the Ilazmai Act and HMR that precludes 

deicroiinarion.s of con.srructive knowledge. In support. Complainant quotes dicta in Ala.^ka 

Airliner that if applied in accordance with Complainant's theory would render the ^'knowledge" 
07/29/201 1 08:0 1 FA)( 2024935142 FAA - DMS ^019/03 1 

requirement meaningless. Complainant's Reply Brief, at 21 (."a holding that lack of knowledge 

alone exempts air carriers from respon.sibility could provide air carriers with incentive to look the 

(Uher way and avoid all knowledge of maintenance proprieties..,"). 

In ihis case. Complainant concludes that since the information on certain paper work at 

the intended airport of arrival was not compliant under § 175.33('a»(3), then Empire 

automatically violated <? 175.33(a)(3). 5t;<? Complainant's Reply Brief, at 26-30. The legal and 

factual inquiry is over. Issues of rea^ionable reliance, cxerci.se of reasonable care, and 

constructive knowledge are meritless side shows when determining i.ssucs of fact and law under 

the HMR. Consideration of the flexibility DOT offered to air carriers in the original rulemaking 

is discarded. An air carrier cannot under any circumstances escape or transfer liability for a , 

violation of the HMR even when an air carrier exercised the utmosi care to prevent the violation 

and had no knowledge of the facts giving ri.sc lo the violation. Complainant's theory of air 

carrier liability under the HMR may be summarized as follows: "non-delcgable duty" is 

equivalent to 'strictly-imposed habilily." 

Strict liability generally refers to the principle that a person is liable for harm to persons 

or property stemming from an activity, regardless of a rinding nf fault, due to the dangerous 

nature of the activity. In other words, one who carries on an abnonnally dangerous activity is 

subject to liability for harm resulting from ihc activity even if he has exercised the utmo.st care to 

prevent the harm. Warrter v. Norfolk & W. R. Co., 758 F, Supp. 370, 372 (W.D. Va. 199j) 

(citing Re.siaiement (Second) of Tons § 519 (1977)). Liability is imposed regardless of whether 

the person's behavior was reasonable under the circumstances. Restatement (Second) of Toits !i 

519, cmt. b (1977). A person cannot be determined to be "truly innocent" and free from liability 

due to dangerous nature of the activity iiself Restatement (Second) of Torts § 519, cmt. d 

("1977). 
07/29/2011 08:01 FAX 2024935142 FAA . DMS 2)020/031 

However, the existence of a non-delegable duly docs not translate to strictly imposing 

liability devoid of any analysis of whether a common carrier exercised rea.'^onable care under the 

.specific context involved. Cf Karuba v. Delta Air Lines. Inc., 1991 U.S. Dist. LEXIS 4204 

(S.D.N.Y. Apr. 2, 1991) (air carrier's duty to pas.senger.s and exercise of reasonable care): Raube 

V. Am. Airlines, Inc.. 539 F. Supp. 2d 1028, 1035 (N.D. 111. 200S) (air earner not "absolute 

insurer*' of the safety of its passengers) (citation omitted); Andemnn v. Lore.ntzen, 160 F.2d 173 

(2d Cir. N.Y. 1947) (maritime vessel's non-delegable duty, includes reasonable care analysis). 

The degree of care required is always that wliich is reasonable, but the application of rea.sonable 

changes with the circumstances of each particular case. Catalina Cruises v. Luna (In re 

Catalimi Cruises), 137 F.3d 1422, 1425 (9th Cir. Cal. 1998) (emphasis added). 

The construcijve knowledge and exerci.se of reasonable care analysis under the Hazmat 

Act and HMR is more similar to the doctrine of negligence ihan sirici liability. Under negligence, 

liability is imposed for the failure to do what a rt:a.sonable and prudent person would ordinarily have dorte 

under the circumstances of the siiuaiion. R.R. Co. v. Jones, 95 U.S. 439, 441-442 (U.S. 1877). The 

duly is dictated and mea.sured by (he faciual conte.vt and the standard esiabli.shed by law for the protection 

of others against unrenbonable li.sk of harm. Restatement (Second! of Toits § 282 (1977). The 

standard of conduct is that of a reasonable man under like circumstances. Restatement (Second) 

of Tons ij 2S3 (1977). This standard provides sufficient flexibility and leeway to permit due 

allowance to be made for all of die particular circumstances of ihe case which may reasonably 

affect the conduct required. Re.statement (Second) of Tons *; 283, cmt. c (1977). 

The .searchina inquiry of negligence into the duty and conduct of a reasonable man under 

like circum.stanccs is analogous to ihc process of defining "constructive knowledge" and 

deiermining the exercise of reasonable care under the Hazmat Act and HMR. hi defining 

isiructive knowledge, the FAA must measure the knowledge a reasonable person would have con: 

20 
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if acting in the ciicumsianccs at hand and exercising reasonable care. 49 U.S.C § 5123(a). A 

subsequent offeror or carrier who transports a hazardous material in commerce may rely on 

information provided by the offeror of the hazardous material or a prior carrier, unless the carrier 

or offeror knows or. a reasonable person, acting in the circumstances and exercising reasonable 

care, would have knowledge ihai the information provided by the offeror or prior carrier is 

incorrect. 49 C.F.R ij 171.2. All relevant facts mu.st be considered to detemnine whether or not a 

rea.sonabk person acting in the cireum.stances and exercising rea>;onablc care would realize the 

non-compliance with HMR requiremenis. 63 Fed. Reg. 3041 1. 30412; FA^\ v. Federal Express 

Corporation. FAA Docket No. CPOlNMOOl5, 2002 FAA LEXIS 570 (Oct. 31, 2002), at * 10 

(ciTing Rainey v. Paquet Cruises. Inc., 709 F.2d 169 (2 Cir. 1983); Prosser, The Law of Tons (j 

34. p. 181 (4th ed. 1971)). Complainant's theory cannot be correct if even an air earner has ihe 

opportunity to be determined '"truly innocenf under 49 U.S.C. § 5123(a) vi,hen lacking fhe 

requisite knowledge. 63 Fed. Reg. 30411, 30412 

Moreover. FAA precedent cleariy shows that an air carrier does not automatically assume 

liability for violations of the HMR, such as when an air carrier rea.sonably relies on an 

independent contractor. In the Matter of Aero Cominenie. S.A.. FAA Order No. 2003-8, 2003 

FAA LEXIS 432, =^=22 (Sept. 12, 2003) iciiation omitted). 

d. The knowledge of an air carrier's independent contractors is not autoinatically 

imputed to the air carrier under the HMR. 

The FA A decisionmaker has actually considered circum.stances involving a nondelegable responsibility and construciive knowledge as it relates to an air carrier and its 

independent contractor. HMR enforcement precedent demonstrates that liability is not 

automatically transferred between an air carrier and its independent contractor. In contrast to 

Complainants implicit objective, the knowledge of an air caiiier's independent contractors is not 

automatically imputed to the air carrier under the HMR. 

21 
07/29./201 1 08.0 1 FAX 2024935142 FAA - DMS §]022/03 1 

With respect to acceptance of hazaidous material, the FAA Administrator has reviewed 

whether an air carrier is liable for the action.': of its independent contractor. In the Maner of 

Federal E.xpress, KAA Order No. 2002-20 (Aug. 5, 2002), reconsideration denied. FAA Order 

No. 2003-2, 2003 FAA LEXIS 194 (May 6. 2003). In Federal Express, the councr service failed 

to provide TO the air carrier any informaiion. mcluding any shipping papers, that the shipment 

involved hazardous materials. Id. at 3. The "key question" was whether the air carrier wa.s 

responsible for the courier's improper offer and acceptance of hazardous materials in air 

transportation. Id., at 5. The FAA Administrator held thai the courier was in fact an independent 

contractor (as opposed to ageni) and, therefore, liability could not be transferred to the air carrier. 

Id, at 9. 

The FA A Administrator found that ihc courier wa.^ an independent connacror because the 

courier had command of its employees (hired and fired its own personnel), supplied its own 

instrumentalities and tools (vehicles), exercised ct>ntrol over the work and space (determined its 

own routes). Id. at 7. 10. The principal air cartier did not have power lo control the "detailed 

physical performance" and "day-to-day operations" of the courier. Id. ai 7-8 (citing United 

Stares v. Orleans, 425 U.S. 807, 814 (1976) (quotation omitted)); .\ee ah c Kesiaiement (Second) 

of Agency ?j 220(2) (1958). 

Similarly in Aero Continente. the b.^A Administrator considered a ca.se where there was 

no evidence indicating that the air carrier had actual knowledge of the facts giving rise to the 

vioJaiion ot the HMR. In the MorrerofAero Coruinente, S.A., FAA Order No. 2(->03-8, 2003 

FAA LEXIS 432. ^^22 (Sept. 12, 2003). The FAA Administraior acknowledged the air c^nriers 

had certain non-delegable duties and considered the question of whether the .^ir carrier should be 

held responsible for the actions token by a third party in light of the fact that the air carrier had 

delegated amhonty to the pariy to secure certain aircraft parts. Id. The issue of liability came 
07/29/201 1 08:0 1 FAX 2024935142 FAA - QMS [a023/03 1 

down to whether the third party was an agent or independeni contractor. Id. The FAA 

Administrator held that the knowledge of an air carrier's agent of the underlying facts can be 

imputed, an air carrier will not be held liable for its independent contractor. Id. (ciiing In the 

Matter of Federal Express, FAA Order No. 2002-20 (August 5. 2002). reconsideration denied, 

FAA Order No. 2003-2 (May 6, 2003)). 

This precedent stems from agency law' where employers are not responsible for their 

independent contractor'.^ acts or onussions. Wilson v. Good Humor, 757 F.2d 1293, 1301 (T).C. 

Cir. 1985). An independent contractor has a duty to his employer to aci with a standard of care 

and with the skill which is standard in the locality for the kind of work which he is employed to 

perform and, in addition, to exercise any special skill that he has. £.^., Re.statement (Second) of 

y\gcncy § 379 (1958). An independent contractor is a person who contracts with another to do 

sometliing for him, but who is not controlled by the other or subject to the other's right to control 

with respect to his physical conduct in ihe performance of the undertaking. Id. at § 2(3). If a 

person ha.s the right to conirol only "the result of the work" by another person, and "'not the 

means" by which it is accomplished, an independent contractor relationship exists. In the Matter 

of Aero Confinenie, S.A.. FAA Order No. 2003-8, 2003 FAA LEXIS 432, *23 (Sept. 12, 2003), 

citing In re Coupon Clearing Service. Inc.. IIS F3 d lOOl. 1099 (9ih Cir. J997). In contrast, an 

agency relationship exists when the principal has the authority to control the detailed physical 

performance and day-to-day operations of the entity acting on its behalf Id. 

In this ca.sc. Empire was also not legally responsible because FedEx Express .served as an 

independent contracior of Empire for making NOPIC information readily available through 

AuioDG. First, hedKx Express hired, fired and trained its own personnel (command power); 

utilized AutoDG and its own tracking number system for cargo (instrumentalities and tools); and 

determined the method for accepting, processing, and loading packages (exercised control over 

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details) (Tr. at 45-47; Tr. al 51-52; Exhibit C-7; Tr. at 133-140; Tr. at 144-145; Tr. at 175-176; 

Tr. at 182, lines 6-16; and see generally. Answer). Indeed, the sorting and acceptance process 

for feeder airlines occurred at the FedEx Express station in Portland. Oregon, utilizing FedE.v 

Express sorting equipment, ULDs, carts, and rollers controlled by FedEx Express employees. 

(Tr. at 51-52; Tr. at 134-135.) There is no allegation implying or record evidencing that Empire, 

the feeder airline, oversaw the day-to-day operations of FedEx Express, the principal airline. 

With regard to NOPIC information. Empire had the right to certify the results of the Load 

Control Sheet and AutoDG manifest, but nothing in the record indicates that this right e.vicnded 

into physically directing the FedE.x Express iXi specialist to enter infonnaiion into AutoDG. 

(Tr. ai 80-81; Tr. at 146-149: Tr. at 175; Exhibit C-11, C-11-41), Indeed, the record indicates 

that Empire crewmembers could only request ihat FedEx Express update the AutoDG system 

following a change in location of hazardous materials. (Tr. at 179-180; Exhibit C-11, C-11-42) 

Empire did not control the AutoDG manifest, which could serve as part of the NOPIC in 

conjunction with the Load Control Sheet. (Exhibit C-11, C-11-41). In fact, once the hazardous 

materials are separated from other freight. FedEx Express employees present the Empire 

crewmember with an AuioDG manifest so that the pilot may survey ihe contents of the list 

again.stthe separated packages. (Tr. at 173; Exhibit C-3: Exhibit C-11. C-11-41). 

Empire's written procedures reveal that FedEx Express could play an independent and 

critical lole in fulfilling the NOPIC requirement, (Exhibit C-11), Empire\s FAA-approved 

GOM describes the NOPIC process, in part as follows: 

"...If The PIC loads the aircraft, that individual must pert'orm the pre-board inspection 

required. If someone other than the PIC loads the aircraft and conducts the pre-board 

inspection, thai per.^son shall provide the PTC with written notification. A copy of the PIC 

notification must be readily available to the PlC during flight..." 

(E.\hibil C-1 K C-11-20). 

24 
07/29/201 1 080 2 FAX 2024835142 FAA - DMS 0)025/03 1 

In other words. Empire's supervision, under the FAA-approved procedure, could be 

contingent upon and .sub.sequent to FedEx Express personnel carrying out the pre-board 

inspection and filling-out the written notification - e.g.. the Load Control Sheel. 

As noted, the Load Control Sheet, which an Empire crewmember could actually lay his 

hands on. could serve as the NOPIC (Exhibit C-IL C-11-41). If the load position of the 

hazardous material package changes from what is listed on the Load Control Sheet, the FedEx 

Express DG .specialist can correct and initial the change with a pen and the Empire crewmember 

then certifies this change. (Exhibit C-1 L C-1 1-42). 

In sum. Empire could only control the result of FedEx Expres.s"s efforts to provide 

readily acces.sible NOPIC information at the airport of arrival. Empire could not direct or control 

the means through AutoDG. This is not agency. Since FedEx Express was an independeni 

contractor for this purpcsc under 175.33(c)(3}, Empire cannot be held liable for FedEx 

Express's omissions in this case. See In the Matter of Federal Express, FAA Order No. 2002-20 

(Aug. 5, 2002), reconsideration denied, FAA Order No. 2003-2, 2003 FAA LEXIS 194 (May 6, 

2003): see also In the Matter of Aero Continente. 5.A., FAA Order No. 2003-8, 2003 FAA 

LEXIS 432, +22 (Sept. 12, 2003). 

e. Precedent cited to support Complainant" s imposiuon of liability is substandally 

different from the circumstances of Empire's actions and responsibilities under § 

175.33CC-M3). 

Complainant is attempting to apply the principle of non-delegable duty to HMR 

enforcement a manner analogous lo strict liability, foreclosing an analysis of reasonable care. As 

noted, the Hazmat Act and applicable regulations, policy, and precedent stand in the way of this 

far reaching and Hawed attempt to create new law. However, even if the FAA decisionm;dcci 

would to consider following Complainant's proposed standard of liability it would be 

inappropriate to do so based on the facts of this case. The precedent cited by Complainant is 

25 
07/29/201 1 08 02 FAX 2024835142 FAA . DMS I2|026/03 l 

substantially different and distinguishable Irom Empire's actions and responsibilities under § 

175.33(c)(3). Unlike these cases. Empire did not fail to uphold its duty of reasonable care under 

the regulations or have sufficient knowledge to support a civil penalty. 

First, Empire did not ignore any readily apparent facts or have reason to suspect that 

FedEx Express would not update AutoDG as agreed. (Tr. at 179.) There was no new 

informaiion lo cause suspicion and Empire could reasonably expect that FedEx Express would 

keep its word and follow its routine procedures. (Tr. at 143; Tr. 192-193). In contrast, in the US 

Air case, the FAA decisionmaker was persuaded thai the air cairier had rea.son to know of the 

airworthiness issue due to a loud noise heard by the pilot. In the Matter of US Air. Inc. FAA 

Order No. 92-70, 1992 FAA LEXIS 352. *2-*8 (Dec. 2L 1992). Instead of undertaking an 

investigation of the noise to uncover the damage sustained, the pilot unreasonably relied on the 

push back operator's affirmation. Id. at *6-"^7. 

Second, the Empire crewmember took active measures within his control to meet ihc air 

carrier's obligations under §175.33('c)(_3l including certifying handwritten updates to the Load 

Control Sheet and requesting that FedEx Express correct the AutoDG system. (Tr. 179-180; 

Exhibit C-3, Exhibit C-11. C-11-42). In comparison in the WestAir case, the air operator relied 

upon another air carrier for the provision of certain security services. In the Matter of WestAir 

Commuter, FAA Order No. 96-16, 1995 FAA LEXIS 342 (May 3. 1995). However, the .^ir 

operator did not lake active steps to supervise the security services, winch would have 

reasonably led to the discovery that the security personnel failed to even show. Id. at * 10. 

Third, Empire did not have any access to controlling information concerning ihe violation 

and could not become aware of the failure of FedEx Express to update the AutoDG system. (Tr. 

at 80-81 :Tr. at 146-149; Tr. at 175; Exhibit C-11, C-11-41). In comparison, in the Empire 

Airlines case the air carrier possessed and had direci access to the inf<irmatJon (maintenance 

26 
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records) that accurately described the flawed repair by a Part 145 station. In the Matter of 

Empire Airlines, FAA Order No. 2000-13, 2000 FAA LEXIS 648, *23 (June 8, 2000). 

Moreover, employees of the air carrier testified actually seeing the damage prior to the repair and 

the faulty repair itself Id., at *21. 

Finally, the HMR provides flexibility to yir carriers to determine the reasonable methods 

to carry out the functions of § 175.33(c)(3). In contrast, in Alaska Airlines the air carrier was 

held responsible for the maintenance deficiencies of its independent contractors because: (1) 14 

C.F.R. § 121.363 provides that carriers are "^primarily responsible" for maintenance; (2) the FAA 

had issued guidLmce emphasizing that carriers have ''unrestricted and unconditional 

responsibility" for their independent maintenance contractors; and (3) one of the air carrier's 

operations specifications required it to ^'ensure" that its contractors performed all substantial 

maintenance '\vithoutdeviation" according lo its maintenance program. Alaska Airlines. Inc., 

T-\A Order 2004-8, 2004 FAA LEXTS 905, *2-*3 (Oct. 4. 2004): see also In the Matter of 

Empire Airlines, FAA Order No. 2000-13. 2000 FAA LEXIS 648. *23 (June 8, 2000) (noting 

that air carriers aic "piimai'ily" responsible fur airwtmhiness and ciiing 14 C.F.R. §§ 121.363 

and 121.379(a)) 

I.Jnlike the airworthiness eases, there are no express conditions or restrictions on how an 

operating carrier may rca.sonably comply §175.33(c,l{3). During the rulemaking, DOT studiously 

avoided strict mandates on how to make information "readily accesible" at the airport of arrival. 

The comments of the National Transportation Safely Board (NTSB) did not include a prescribed 

method of compliance and suggested that rule require that the air carrier have the "capability" to 

provide hazardous mformntion ro emergency tesponders. 68 Fed. Reg, 14341. 14343 DOT 

followed that the ^'readily accessible'" requirement does not mandate communicating the NOPIC 

information in wnlien form (faxing) to the fmal destination prior to each flight or landing nor 

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does it require an airline to retain staff at both airports during llight. 68 Fed, Reg. 14341. 14344. 

Instead, "readily accessible" means that airports of arrival "must only have the means available 

to retrieve" NOPIC information such that this data can be received and iransmilted in a "tjmely 

manner' to emergency responders. Id. This can be accompli.shed through individual faxes or 

emails fiom the air carrier. Id. DOT noted that even though a computer tracking system was an 

accepiablc method of compliance, such a system was not mandatory. Id. Mandating all aircraft 

operators to install such a system would "greatly disadvantage smaller air carriers." Id. 

Thus. DOT'S tlexible requirement under $ 175.33(c)(3) to make infonnaiion "readily 

acces.sible" docs not align with Complainant's view thai an air carrier must take all essential and 

conceivable steps to ensure compliance. Complainant's Appeal Brief, at 25-26. Moreover, 

unlike the airworthiness cases cited by Complainant, the language of § 175.33(c)(3) doe^ not 

require that an air operator must "ensure" that information is made readily accessible "without 

deviation" to the intended airport of arrival. Instead, Empire undertook reasonable and 

permissible measures to ensure that accurate NOPIC information was "'readily accessible"' and 

capable of being timely transmitted and received at the airport of arrival under § 175.33(c)(3). 

The Empire crewmember certified the handwritten correction marking the re-positioning <.)f 

hazardous material on the Load Control Sheet, and then requested that the FedEx Express DG 

specialist update AutoDG to reflect this new information. When the FedEx E.x.press DG 

iipecialist agicod to enter the correct infonnaiion into the AuioDG sysiem consistent with past 

practice and policy, then Empire had no reason to know that any violation would occur. 

11. The ATJ's: decisLon to reduce the civil penalty is supported by substantial evidence 

and consistent with applicable law, precedent and policy. 

As noted. Empire is appealing the very findings that uudcrtie the asses.sment of the civil 

penalty subjeci to Complainant's appeal. However, in the alternative, and to the extent liability 

is found for violations §§ 175.3 and 175.30(a)(2) and (3). Empire submit.s that the ALJ'.s decision 

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to reduce the civil penalty is supported by substantial evidence and consistent with applicable 

law, precedent, and policy. 

Determination of an appropriate civil penalty involves a number of factors, which the 

ALJ did when a^ilcvlat'ing the lotal. The AL/musi weigh 'the nature, circumstances, extent, and 

gravity of the violaiion[:i]," and, with respect to the violator, "the degree of culpability, any 

history of prior violations, [and] the ability to pay" as well as "other matters that justice 

requires." See 49 U.S.C. §5123(c). The principal elements in this analysis are the nature of the 

respondent's conduct and the totality of the circumstances. See Initial Decision, at 7 (citing 

Envirosolve. LLC. FAA Order No. 2006-2 (Febniary 9, 2006), p. 13"). 

More-over, the ALJ gave due consideration to the Sanction Guidance, which provides the 

FAA Administrator's "general views" about the civil penalty ranges appropriate for different 

types of violations. Id., at 8 (citing Folsvm'.s Air Service. Inc., FAA Order-No. 2008-1 1 

(November6,2008). 2008 WL 4948488, p. 13.) Nor are the guidelines binding. Id. An ALJ is 

not required to follow this Sanction Guidance a.s AUs are not agency personnel. Id. (citing 

FoUom's). However, the FAA Administrator has asserted the power to impose the agency's 

Sanction Guidance on appeal if an A O assesses a civil penalty that is not consistent with the 

Guidelines. Id. (citing Warhelon-'^ Air Ventures. Inc., FAA Order No. 2000-3 (Febniary 3, 

2000). p. 20; Nfmhwest Airlines. FAA Order No. 1990-37 (November 7, 1990), pp. 8-10). 

In this case, after reviewing the totality of the circumstances, other civil penalty actions, 

and Sanction Guidelines, ihe ALJ asses.scd a civjl penalty of $12,000. Ainong other 

considcraiions, the ALl found il mitigaijng ihai Empire relied on incorrect informaiion fruin ihc 

prior offeTor(s) - missing shipping papers. Id., at 10-11. Additionally, Empire was "lllacking a 

warning" that hazardous material was on board the aircraft. Id. These factors, however, arc 

exphcitly listed in the Sanction Guidelines for consideration as mitigating circumstances. See 

generally. FAA Order 21 5.306; See also 64 Fed. Reg. 19443 (Apr. 21, 1999). 

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07/29/201 1 08 03 FAX 2024335142 FAA - DMS @]030/031 

CONCLUSION 

For the reasons set forth above the ALJ did not err in dismissing violations under 49 

C.F.R § 175.33(c)(3;j and reducing the civil penalty sought by Complainant from $20,000 to 

$12,000. Therefore, Empire Airlines, Inc. respectfully requests thai the FAA decisionmaker 

uphold the Initia.1 Decision as it relates to these two is.-^ues. 

Respectfully Submitted, 

Dated July 27, 201 I. 

'icks 

icevert D. Almond 

The Wicks Group, PLLC 

1215 17'''Street, NW 

Sumner Annex, Fourth Floor 

Washington, DC 20036 

Tel: (202)457-7790 

Fa-x: (202) 457-7799 

Courtney E. Felts 

Senior Attorney - Regulatory Affairs 

Federal Express Corporation 

3620 Hacks Cross Road 

BuildmgB,3"^Floor 

Memphis, TN 38125 

Tel: (901) 434-8632 

Fax: (901) 434-8283 

Counsel for Empire Airlines. Inc. 

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07/29/2011 08 03 FAX 2024935142 FAA - DMS 031/031 

CERTIFICATE OF SERVICE 

I hereby certify that the foregoing document has been sent via facsimile and expedited 

courier service to; 

Federal Aviation Administration 

600 Independence Avenue. SW 

Wilbur Wright Building—Suite 2W1000 

Washington, DC 20591 

Attention: Hearing Docket Clerk, AGC-430 

Fax: (202) 493-5142 

Two (2) copies and original 

Mr. James A. Barry, Senior Attorney 

Enforcement Division, AGC-300 

Office of Ihe Chief Counsel 

Federal Aviation Administration 

800 Independence Avenue, SW 

Washington, DC 20591 

Tel: (202-) 267-8198 

Fax: (202)267-5106 

One(1)copy 

Mr. Scott Mortis, Attorney 

Federal Aviation Administration 

Office of the Regional Counsel (ANM-7) 

1601 LindAve., S.W. 

Renton, WA 98057 

Tel: (425)227-1417 

F;^\: (425) 227-1 K)7 

One (1) copy 

DatedJuly 27, 2011 

Concevert D. AllSiond 

The Wicks Group, PLLC 

1215 17'^ Street, NW 

Sumner Annex, Fourth Floor 

Washington, DC 20036 

Tel: (202) 457-7790 

Fax: (202)457-7799 

Counsel for Empire Airliner. Inc. 

31