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+ + + + + HEARIN G

+ + + + + 

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. ^ I nth e matte r o f EMPIR E AIRLINES , IN C DM S No . FAA-2009-058 6

= d J FAADOCKE T N O CP09NM000 9 FAACas e No . 2007NM70015 5

Wednesda y Octobe r 27 , 201 0 U.S . Bankruptc yCour t fo r th e Distric t o f Orego n Portlan d Offic e 100 1 S W5t hAvenu e Portland , Orego n9720 4

Th e above-entitle dmatte r cam e o n fo r hearing , pursuan t t o notice , a t 9:0 3 p.m .
BEFORE : TH E HONORABL E RICHAR D C . GOODWI N

Administrativ e La wJudg e

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### 12 5 APPEARANCES : O nBehal f o f th e Federa l Aviatio n Administration ; SCOT T R . MORRIS , ESQ . of : Offic e o f Regiona l Counse l Federa l Aviatio nAdministratio n 160 1 Lind Avenue , S.W . Renton , Washingto n9805 7 (425 ) 227-141 7 fax-100 7

O nBehal f o f the Responden t



# r ^ COURTNE YE . FELTS , ESQ . Senio r Attorne y of : Federa l Express , Inc . 3 62 0 Hack s Cros s Roa d Building B , 3rd Floo r Memphis , Tennesse e 38125

- (901 ) 434-863 2 fax-828 3 •880 0

and LAWRENC E W . BIERLEIN , ESQ , 110 1 30t hStreet , N.W . Suit e 50 0 Washington , D.C . 2000 7 (202 ) 625-835 5 fax-436 3 ALS O PRESENT : Kyl e Lomazow , Esq. , FA A



# r ^

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# f ^ T-A-B-L- E 0- F C-0-N-T-E-N-T-S

WITNESSE S DIREC T CROS S REDIR , Patric k N . Oppenheime r 12 8 15 1 Richar dMill s 16 6 18 4 19 8 EXHIBIT S MARKE D RECEIVE D C-1 6 Contrac t Betwee n Empir e an dFEDE X 19 5



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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 P-R-0-C-E-E-D-I-N-G- S (1:3 0 p.m. ) JUDG E GOODWIN : The ywer e don e unde r a norde r o f sequestration , s o an y potentia l witnesse s wh o ar e no t actuall ygoin g t o testif yshoul dwai t ou t i nth e lobby .

Ms . Felts , yo u wan t t o cal l you r firs t witness ?

MS . FELT S Cal l Patric k Oppenheimer . Whereupon , PATRIC K OPPENHEIME R

a witness , wa s calle d b yCounse l fo r th e Responden t and , havin g bee nfirs t dul ysworn , assume dth e witnes s stan d an dwa s examine dan d testifie da s follows :

JUDG E GOODWIN : Pleas e b e seated . An dstat e you r ful l nam e an d spel l you r firs t

an dlas t names .

TH E WITNESS : M ynam e i s Patric k Nei l Oppenheimer . That' s spelle dtha t P-A-T-R-I-C- K 0-P-P-E-N-H-E-I-M-E-R . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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### 12 8



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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Counsel ? M S FELTS : On e quic k administrativ e matte r befor e w e do . You r Honor . JUDG E GOODWIN : Sure .

MS . FELTS : I wante dt o mak e sur e tha t th e binde r exhibi t i s u p ther e o nthe standwit hthe witness . Yes . Thank you .

DIREC T EXAMINATION BYMS . FELTS : Q Mr . Oppenheimer , ca nyo u pleas e stat e you r employe r andth e address ? AI a

m employe d byFedera l Express . And th e addres s i s 3 6 7 0 Hack s Cros s Road , Building Gi nCorporat e Safety , Memphis , Tennesse e 38125 . Q title ? A Program s position ?

(202 ) 234-443 3 

### Coul d yo u pleas e stat e you r jo b

Senio r Manager , Corporat e Safet y

Ho wlong hav e yo u bee ni ntha t

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 AI'v e bee ni nSafet yManagemen t i n Corporat e Safet yfo r abou t 1 5 years . I nthe curren t positio nabou t si xyears . Q Ho wlong hav e yo u bee nwit hthe compan yo nthe whole ? Thirt y- - 3 6 year s Ove r 3 6 years . Q And i nth e cours e o f you r dutie s a s th e Senio r Manage r o f Corporat e Safet y currentl ywha t ar e you r responsibilities ? AI' mresponsibl e fo r safet y program s whic hinclude s Dangerou s Good s Administratio nandth e Dangerou s Good s Hotline . I hav e two manager s tha t overse e thos e groups , and als o a manage r o f Industria l Hygiene , Fir e Prevention , Hearing Conservatio n andothe r miscellaneou s safet yprograms . Q Okay . I' d lik e t o tur nyou r attentio nnow , i f I could , t o th e exhibi t binder . Th e item a t Ta bC-1 , whic hi s th e Complainant' s Agen t Statement . I' d 'lik e t o direc t you r attentio nt o the botto mo f - - the

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 an dEmpir e canno t spea k t o ho wFEDE Xshipment s

go t i nth e system . It' s goin g t o b e relevan t t o Empire' s defens e t o describ e tha t

JUDG E GOODWIN ; Okay , G o ahea d

an das k i t MS . FELTS : Okay . Than k you .

B YMS . FELTS : Q Mr . Oppenheimer , i f I coul dno w tur nyou r attentio nt o Exhibi t C-7 , whic hi s

- - ar e yo u there ? AYes , I am . 7-1 ? Q Yes . Wha t i s tha t document ? AIt' s a documen t tha t shows , basically , conveyanc e an d scannin g updates , i f yo u will , ever ytim e a packag e change d conveyanc e o r custody . Q Th e firs t entr ymention s packagin g
an dtransmitte d t o FEDEX , an d then , befor e th e packag e i s picke d up , wha t doe s tha t mea no r ho wi s tha t possible ? ATha t tell s m e tha t th e shipmen t

wa s processe do nsom e typ e o f FEDE Xcustome r NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 proximit yo f tha t informatio ni nthere , i t - -

i t appear s that , lik e fo r Portland , Oregon , it' s a sor t facility . I imagin e that' s th e - - th e station . But , dependin g upo noperations , i t coul db e th e Portlan dstatio no r a Portlan d ramp . Sam e wit hMedford , Oregon . They'r e a FEDE Xfacility , bu t I can' t tel l i f it' s a packag e terminal/station , o r i f it' s jus t a

ramp Okay . An d the nI wan t t o hav e yo u fli p bac k fo r jus t a moment . I' msorr yfo r th e flippin g bac k an d forth . Bac k t o th e agent s statemen t a t C-1 . AOkay . Q An d i t mention s - - well , i nth e firs t paragraph , i t mention s th e Medford , Orego n- - ho wth e inspectio nstarte d a t th e Medford , Orego nlocatio nan d Empir e Airline s Aircraft . Ho wdi d a nEmpir e Airline s Aircraf t hav e FEDE Xpackage s o nit ? AWell , Empir e i s on e o f a niimbe r o f supplementa l operator s tha t w e utiliz e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 strictl yfo r Lionhau l Service s Andb y Lionhaul , w e basicall ytur npackage s ove r t o themt o b e flow

nfro musuall yschedule dorigi n anddestinatio nramps . W e us e the n predominantl yi nthe mor e rura l area s wher e th e packag e volum e doesn' t justif ywha t w e cal l a FEDE Xtrunk aircraft .

I nsome locations , i n- - fo r mos t o f thes e situations , the supplementa l operator s ar e bul k loade d aircraft . But , i n some instances , they'r e actuall ycontaine r loade d aircraft , i nwhic hw e jus t basicall y transloa dcontainer s fro m a FEDE Xaircraf t directl yont o theirs . But , i nthi s case , i t wa s a bul k loade daircraft . Q Okay . And I wan t t o g o bac k t o something yo u mentione dbefore . Yo u sai d w e transloa d the item s fromFEDE Xt o th e plan e Empire' s flying . Ca nyo u jus t tal k mor e abou t tha t - - tha t proces s andho whappens ? AWell , a t a FEDE Xramp , pe r se , inboundaircraf t and- - andinbound meanin g

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 the package s ar e coming i nfo r tha t delivery

are a o r regio n- - and , a t tha t point , FEDE X employee s wil l offloa d package s ou t o f a FEDE X aircraf t and/o r FEDE Xfreigh t containers . And the ntheywil l load thos e ont o the supplementa l aircraf t fo r a mor e downloa d typ e destination .

Again , usuall ya mor e rura l typ e area . And o nthe othe r typ e situation , it' s

- - it' s wher e package s ar e picke d u p i nthos e rura l areas , and the nthey'r e loade dbyFEDE X employee s - - handler s andram p employee s - - tha t the nload thos e packages . And then , a t th e hos t ramp , theyar e the nunloade d and the n reloade dint o FEDE XULD s o r freigh t containers , o r bul k loade do nFEDE Xaircraft . Q I wan t t o bac k up a momen t t o something yo u mentione dno wabou t whe nthe packag e i s picke dup . Whe na packag e i s picke d up , wha t typ e o f check s o r inspectio n i s don e o f the package ? AWell , al l - -

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MR . MORRIS : You r Honor , again ,

objection . Thi s i s no t dealing wit hthe acceptanc e b

yFEDEX , Th e violation s her e ar e imprope r acceptanc e b yEmpir e Air . W e don' t car e abou t wha t happen s i nth e eas t coast . Bu t w e car e abou t wha t happen s fromPortland t o Medford ,

Overruled . JUDG E GOODWIN :

BYMS . FELTS : I understand .

question ? A D o yo u wan t m e t o repea t m y

No . Okay . Th e the proces s tha t a packag e goe s throughwhe nit' s picke d up bya FEDE X employe e - - firs t o f all , al l FEDE Xemployee s g o throughawarenes s training . And whe nI sa y employees , whethe r it' s a courier , whethe r it' s a handler , whethe r it' s a custome r servic e agent , andthe courie r i s a nemploye e that' s traine di ncourie r practice s t o accep t

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# r ^ 1 package s an d t o proces s - - proces s the m int o 2 th e syste ma s a - - an dthey'r e pick-u p an d 3 deliver ydrivers . Handlers , o nth e othe r 4 hand , hav e n o responsibilit yfo r acceptance . 5 An dthe nCS Areall yi s th e sam e practic e a s a 6 courier , excep t the yd o no t pic k u p o r delive r 7 thos e packages . The ydo , i nfact , al l o f 8 thos e employee s hav e annua l handle r dangerou s 9 code s awarenes s training . 1 0 An dtha t awarenes s trainin g allow s 1 1 the mt o properl yrecognize , properl ymark , 1 2 label , an dcertify , whe nrequired , dangerou s 1 3 package s a s wel l a s informatio no nbein g abl e 1 4 t o detec t hidde ndangerou s good s o r dangerou s 1 5 good s tha t ma yno t hav e bee noffere d a s such . 1 6 A t th e poin t th e packag e i s the n 1 7 processed , i f i t i s a marked , labeled , an d 1 8 properl ycertifie d dangerou s goods , a t tha t 1 9 point , hazar dlabel s and/o r marking s dictat e 2 0 t o th e employe e exactl yho wthe yhav e t o b e 2 1 handled . Fo r instance , som e dangerou s good s 2 2 hav e t o b e segregate dfro mothers . But , a s NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISUVN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 fa r a s a courie r o r CSA , thei r HAZMA T o r

dangerou s good s trainin g i s limite dt o handlin g an d recognitio no f dangerou s goods . A t tha t point , whe nth e package s ar e collecte d

an dtransporte d bac k t o th e station , anyknow n marked , labeled , an dcertifie d dangerou s good s package s ar e the nsegregate dof f t o th e sid e fo r anothe r employee . An d tha t employe e ma y b e a courier , i t ma yb e a CSA , i t ma yb e a handle r o r mayb e a D Gagent .

Bu t regardles s o f th e title , i f yo u will , thos e employee s ar e traine da s dangerou s good s specialist s an d the yunderg o
a significan t amoun t o f mor e training . Basically , it' s a 4 0 hou r initia l wit h

recurren t training . An d tha t allow s the mt o the nloo k a t th e package ; loo k th e shippin g papers ; inspec t i t properl ywit hth e dangerou s good s inspectio nchecklist ; an d determin e i f th e shipper s mad e an yerror s o nthos e - - o n th e package , o nth e - - whethe r i t b e marking , labeling , packaging , o r shippin g papers . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 And , a t tha t point , i f it' s

acceptable , theythe nente r th e informatio n int o th e FEDE XAuto-D T manifes t system , i n orde r fo r tha t packag e the ninformatio nt o b e assigne dt o a particula r conveyance , whethe r i t a uni t loaddevice , whethe r i t b e a feede r aircraft , o r whethe r i t b e a trunk aircraft . And , a t tha t point , everytime tha t packag e change s conveyance , simila r t o th e illustratio ntha t w e looke da t unde r seven , th e tracking information , a t tha t point , tha t informatio ni s the nchange s o r relayed . Now , i nthe even t tha t tha t packag e i s rejected , a t tha t point , th e checklis t i s complete d and the packag e i s the nreturne dt o th e shippe r t o mak e the necessarycorrection s befor e it' s accepted . Q Th e package s tha t ar e no t declare d marked , labele d a s DG , ho war e theyprocessed ? AWell , i f they- - it' s no t marke d
o r labele da s DG , a t tha t point , they'r e processe d a s regula r carg o a t a station . The y NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISUN D AVE. , N.W

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 woul dthe nb e - - g o dow nthe - - basically , an inpu t o r sor t belt , wher e handler s the nload thos e package s int o some typ e o f conveyance , whethe r i t b e a baggag e car t o r whethe r i t b e a uni t load devic e o r freigh t containe r that' s bee ntransporte d t o the ramp , i f it' s no t a ram p location . And , a t tha t point , thos e package s ar e the nloade d ont o th e outbound aircraf t Thank you . Yo u mentione da minut e ag o abou t Auto-DG . I wan t t o come bac k t o tha t becaus e that' s reference di nth e agent' s statemen t tha t w e looke da t i nC-1-1 . Coul d yo u pleas e describ e tha t system ? ATh e Auto-D Gsystem wa s on e o f the first , i f no t th e firs t electroni c automate d dangerou s good s manifestin g systemtha t I' m familia r with , a t least . AndI kno wtha t becaus e w e wor k veryclosel ywit hbot hFA Aand NTS B i n- - i nrelatio nt o that . And- - bu t wha t the systemallow s i s - - it' s a , firs t o f all , relationa l databas e tha t i s base d o nthe

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 prope r shipping name and U Nniimbe r tabl e fro

m th e Auto-regulations . Althoug hwe'v e als o adde dsome additiona l item s i nther e tha t w e accept , i nadditio nt o thos e dangerou s good s tha t ar e i nthe Aut o system , basicall yth e RMD typ e materials .

And , a s such , whe na nemploye e - - a dangerou s good s specialis t - - whe na packag e ha s complete d th e inspectio nprocess , the employe e enter s i nint o a compute r terminal , basically . And i t i s a mainfram e application . An dwhe ntheyente r th e U Nnumber , th e system the npopulate s and says , base d o nthi s U N number , selec t an

yo f th e appropriat e prope r shipping name s associate d wit htha t U Nnumber . Onc e tha t selectio ni s made , theythe nconfirm tha t the system

tell s them- - well , i f it's , fo r instance , a UN-1203 , i t tell s themtha t that' s a clas s three , packin g grou p two . The y confirmthat . The yente r th e quantit ythat' s ther e i nth e package . Th e systemwoul d the n als o hav e a nerro r chec k tha t woul d sayi f the

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### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 quantit ywa s allowe dfo r th e shipmen t i n

question , whethe r it' s authorize dfo r passenger/carg o aircraft , shippe r information , a s wel l a s an

yothe r specifi c informatio n that' s uniqu e t o tha t shipment . Whe ntha t systemwa s built , i t wa s buil t t o tryt o hav e a s muc herro r checking i ni t a s possible . Bu t everything can' t b e covered .

S o w e tryt o cove r tha t wit ha combinatio no f training , a s wel l a s erro r checking i ntha t application . Bu t onc e tha t shipmen t i s entere d int o tha t system , a t tha t point , the ram

p agent , dangerou s good s specialist , wil l the nassigntha t shipmen t t o whateve r conveyanc e they'r e loading i t into . I f it' s bein g loade d int o a uni t load devic e o r a freigh t container , they'l l identif ythat . I f it' s bein g bul k loade d int o a naircraft , they'l l identif ytha t it' s bein g loade d int o th e aircraf t and , a t tha t point , wha t location . Th e weigh t and balanc e system actuall yinteract s wit hth e Auto-D Gsystemt o

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 actuall yidentif yspecifi c loa dlocation s an d

s o forth . I t eve nha s erro r checkin g fo r a certai nmaterials , dependin g upo nth e typ e o f aircraf t an dth e acceptabl e loadin g locations . Bu t ever ytim e tha t packag e the nchange s conveyance , th e appropriat e responsibl e personne l g o i nan dthe nchang e th e locatio n o r assig nth e packag e t o tha t ne wconveyance , whethe r i t b e a ne wfreigh t container , uni t loa ddevice , o r whethe r i t b e a ne waircraf t

o r vehicle . An d so , onc e tha t syste mi s there , i nth e even t tha t ther e wa s a ninciden t

o r acciden t an d - - an d there' s quer ya s t o what' s o nboar d tha t aircraft , a s wel l a s a - - a ramp , whe nthey'r e expectin g thei r inboun d aircraft , the yar e abl e t o pul l tha t manifes t

u p an dse e exactl ywhat' s o nboar db yUN number , b yprope r shippin g name , an ds o forth . Now , th e regulation s - - tha t syste mgoe s beyon dth e regulations , i ns o fa r a s w e provid e sub-total s o f ever yhazar dclass , b y location , that' s loade d o nboar d tha t NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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### 14 4

1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 aircraft . And we'v e found tha t tha t wa s

beneficia l t o emergenc yresponders , eve n thoughthe regulation s didn' t requir e it . S o w e sub-tota l thos e hazar d classe s b ylocation . Bu t mos t o f th e content s o f Auto-D Gi s basicall ydictate db ythe regulations , a s fa r a s wha t w e hav e t o d o t o provid e the notificatio nt o pilot . And w e us e tha t same systemfo r drive r manifest s fo r over-the-roa d typ e routs , i f yo u will . However , a pick-up anddeliverydrive r ma yonl yhav e a shipping pape r fromthe packag e fo r a drive r manifest . Q Okay . Andho wi s thi s Auto-D G systemutilize d i nFEDE Xfeede r aircraf t operations ? AWell , th e - - i f i t wer e a post

ram p tha t the nlaunche s feede r o r supplementa l aircraft , the hos t ramp , i nfact , see s a listing o f the inbound dangerou s goods , and
no t onl yb

yU Nnumber , bu t als o b y destination ,

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### An

ds o tha t

give s them

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# r ^ 1 basically , give s the mth e informatio nthe y

2 nee dt o kno wwha t they'r e expectin g of f tha t 3 inboun daircraft . Thos e package s then , onc e 4 th e aircraf t come s in , they'r e the nreloade d 5 int o th e feede r aircraf t - - th e supplemental 6 aircraft . And , a t tha t point , th e Auto-D G 7 syste m

i s the naccesse d t o a nupdate , base do n 8 thi s trackin g numbe r therefor e i s o nthi s 9 aircraf t and , therefore , th e informatio n 1 0 associate dwit htha t trackin g number , th e 1 1 dangerou s good s relate d information , i s the n 1 2 there . An dtha t i s the ngive nt o th e pilo t i n 1 3 command , wh o sign s of f o ni t tha t basicall y 1 4 say s thi s i s you r loa d o f package s tha t ar e 1 5 dangerou s goods , a s wel l a s th e syste mi s 1 6 updated . An d tha t tells , basicall yanyon e 1 7 tha t ha s acces s t o a FEDE Xterminal , includin g 1 8 mysel f a t hom e o nm ylaptop , i f I'v e go t 1 9 connectivit yt o th e FEDE Xsystem . I coul d 2 0 pul l u p an yaircraft , a s fa r a s what' s o n 2 1 boar dtha t aircraft , whethe r i t b e a narrivin g 2 2 aircraft , a departin g aircraft , o r wha t hav e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 yo u D o anynon-FEDE Xemployee s hav e

acces s t o thi s system ? ANo t t o m yknowledge . Q Okay . ABut , i nth e even t tha t a non-FEDE X employee , lik e fo r instanc e a nemergenc y responder , woul d sa ywe'v e go t a proble mwit h thi s aircraf t o r w e wan t tha t information , a t tha t point , w e ca npul l u p th e informatio nan d eithe r fa xi t o r provid e tha t informatio nt o
a non-employee . Q Wha t abou t i nth e feede r aircraf t contex t i f ther e i s a nissu e o r discrepanc yo r chang e tha t need s t o b e made , ho wdoe s tha t chang e - - wh o make s tha t chang e an d ho wi s tha t made ? A Well , i t woul dhav e t o b e mad e b y
a FEDE Xpersonnel . They'r e —onl yFEDE X personne l tha t ar e traine d i nth e us e o f Auto

D Gca nupdat e th e system . An dth e FEDE XAuto

D Gsystem , i f yo u wer e t o sig no nt o i t a s a n NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 employee , yo u woul db e abl e t o vie wth e

information . Bu t unles s yo u ha d Auto-D G training , yo u coul d no t updat e th e information . Q Okay . An dho wman ysupplemental feede r - - o r supplementa l aircraf t o r ofte n know na s feede r operator s - - doe s FEDE X utilize ? AApproximatel y350 . An d that' s a goo destimate . An dthe yrang e fro mth e Cesn a aircraft , th e AT Raircraft , whic har e al l bul k loaded , t o als o 757 s an d727 s tha t som e peopl e migh t refe r t o the ma s we t lease , bu t they'r e stil l supplementa l feede r aircraft . Q Ho wman yoperator s o f thos e aircraf t - - us e thos e aircraft ? APrimarily, si xo r seven . Q Okay . AI don' t dea l wit hthe mdirectly . Q An di s th e proces s yo u outlined , wit hregar dt o th e packag e transfe r an d th e Auto-D Ginformation , i s tha t processe d th e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 sam e wit hal l o f th e operators ? Yes . Q Th e feeder ? Okay . I wante dt o com e bac k briefl yt o somethin g yo u mentioned . Whe nI aske d yo u abou t i f a discrepanc yo r chang e neede dt o b e mad e t o th e Auto-D G system , wh o woul d mak e tha t change . An dyo u sai dFEDE Xpersonnel . I wan t t o direc t yo u t o som e fact s tha t ar e i nthi s case . Lookin g a t th e agent' s statement , bac k - - we'r e stil l o n C-1-1 . Th e secon d ful l paragrap hwhic hstart s wit hth e Auto-D Gmanifes t carrie db yEmpir e fligh t 8678-22 . D o yo u se e wher e i t say s tha t th e manifes t liste d a nincorrec t aircraf t location , bu t th e pilo t carrie d wit hhi ma feede r aircraf t loa d contro l shee t tha t ha d th e correc t location ? D o yo u se e that ? A Yes . Q D o yo u - - ca nyo u explai nho wtha t possibl y- - ho wtha t happened , o r wha t wa s th e issu e there ?

MR, MORRIS : 

### Objection , Your

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Honor . Tha t i s speculatio nan dhe' s no t

identifie da s a nexpert .

JUDG E GOODWIN : I wil l sustai n unles s yo u ca nla ya foundation ,

MS . FELTS : Okay .

Q B YMS . FELTS : Le t m e reformulat e tha t question . I'l l nee da moment , please . Yo u mentione d earlie r tha t a chang e i nAuto-D Gwoul dhav e t o b e mad e b ya FEDE Xemployee . Correct ? AYes . Q I f ther e wa s incorrec t informatio n

- - i f someon e othe r tha na FEDE Xemploye e brough t notic e o f incorrec t information , woul d tha t employe e b e abl e t o mak e - - woul dtha t non-employe e b e abl e t o inpu t th e change ? ANo , the ywoul dnot . Q Let' s g o bac k t o th e actua l flee t th e supplementa l aircraf t fleet . Yo u mentione d approximatel y350 . Ar e thos e FEDE X aircraf t - - FEDE Xowne d aircraft ? ATh e majorit yo f the mar e FEDE X

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 owned .

Q Okay . AThey'r e FEDE Xowned . The yhav e th e FEDE Xliver yo r signag e o nthat . Bu t the y ar e no t operate d b yFEDE Xemployees . They'r e no t maintaine d b yFEDE Xemployees . They'r e maintaine dby , basically , th e - - th e operator s tha t we'v e basicall yawarde dcontract s to , t o operat e an d maintai nthos e aircraft . Th e majorit yo f thos e ar e no t owne d- - I' msorry , th e majorit yar e owne d b yFEDEX . There' s som e aircraft , though , tha t ar e - - ar e large r tha t

- - th e 727 s an dth e 75 7 an d s o forth , tha t ar e

we t leased , S o that' s that' s th e difference , i f yo u will . But , whe npeopl e refe r t o feede r aircraf t that' s utilize d i n th e FEDE Xsystem , fo r th e mos t part , thos e ar e owne daircraf t b yFEDEX , Q Than k you . I hav e nothin g furthe r fo r thi s witness .

JUDG E GOODWIN : Cross ? CROS S EXAMINATIO N NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 training , t o b e abl e t o recogniz e ORMDs .

Q Okay . Now , di d yo u revie wth e transcrip t o f Mr . Waddy , th e perso nwh o accepte dthi s shipmen t bac k o nth e eas t coast ? AI did , a t on e time . Yes . Q Okay . AI'v e no t recentl yreviewe d it . Q Now , yo u talke dabou t th e training . Bu t yo u recal l Mr . Waddy' s testimon ydurin g hi s deposition , tha t h e didn' t kno wwha t "NORD " markin g was . AYes . Q An dh e didn' t kno wwher e th e shippin g paper s were . S o ho wdoe s tha t matc h wit hyou r peopl e wh o accep t thes e shipment s bein g familia r wit hth e indicator s o f potentia l hazardou s materials ? AWell , th e - - I - - I d o recal l als o lookin g a t th e trainin g record s fo r tha t individua l kno wtha t tha t employe e ha d multipl e year s o f awarenes s training . But , a t th e sam e time , i f that' s no t thei r ever yda y NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 functio n- - i nothe r words , i f the ydon' t se e

frequen t dangerou s good s package s an d s o forth , it' s a challeng e fo r the mt o recal l al l th e informatio ntha t the yreceive di ntha t
course , a s wel l a s man yothe r trainin g course s tha t w e requir e the mt o learn . Now , wh ythe y didn' t recogniz e th e ter mORMD , I ca nsa yi f yo u probabl y- - i f yo u talke d t o a dangerou s good s specialist , the ywoul d sa yI recogniz e that . An dman ynon-specialist s woul d recogniz e that . Bu t becaus e i t reall yisn' t

a commo ndangerou s o r HAZMA T term , eve nthoug h

w e giv e the mtha t typ e trainin g ever yyear , I' mreall yno t tha t surprise d tha t ever yonc e i na whil e you'l l se e someon e tha t - - tha t doesn' t immediatel yrecogniz e it . Q I jus t wan t t o mak e sur e I hear d

an dunderstan d you r testimony . Ar e yo u sayin g tha t th e ORM D markin g i s no t commonl ysee ni n transportation ? AI' msayin g th e ORM D markin g ha s n o pictoria l hazar d labe l tha t goe s wit hit . S o NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1



### 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 therefore , i nanemployee' s association , wher e

thei r regula r jo bi s no t dangerou s good s handling , tha t ma yb e a challenge . Q Okay . Now , fo r a perso nthat' s handling on e o f you r packages , ho wd o they kno wwher e a give nshipmen t i s going , give n th e spee d a t whic hFEDE Xpride s itsel f i n processin g thes e case s o r processin g thes e shipments ? AWell , a lo t o f tha t i s don e electronically . The y- - i f a shippe r ha s processe d the shipmen t o na automate dtyp e system , the system wil l the npu t i nwha t w e cal l a nURS Arouting cod e o nthere . And t o b e brutall yhones t wit hyou , th e employe e reall y doesn' t car e wher e it' s going becaus e the systemi s the ngoing t o rout e tha t package , base do npackag e scans . Q And that' s wha t I wa s getting at . the packag e scans . I f yo u turnt o Exhibi t C

8- 2

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### Yes , sir .

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Th e photograph . D o yo u se e th e

photograph > AYes . Q Now , whe nthi s shipmen t cam e of f

o f - - a t Portland , an d wa s bein g broke ndown , i t ha dt o hav e bee nscanned , correct ?

Yes . Okay , And , a s par t o f tha t scanning , i nth e proces s i nPortland , the yha d t o pu t stuf f i nvariou s area s o r bins , becaus e no t al l aircraf t fl yt o th e sam e location . AThat' s correct . Q S o ho wwoul d someon e a t Portlan d b e abl e t o identif ytha t thi s bo xwa s goin g t o th e Medfor dairport ? AB yth e URS Aroutin g code . Q An d i s tha t tha t XHMMRA ? AYes , i t is . Q Okay . Wha t doe s X H represent ? AActually , I couldn' t - - I believ e i t - - i t ha s t o d o wit hth e typ e produc t service ,

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Okay . Priority , overnight ?

AYes . On e o f th e services . Q Okay . An d th e MMR Ai s th e indicatio nfo r Medfor d Airport ? ARight . Q S o th e perso nwh o i s handlin g thi s bo xoff-loadin g it , afte r it' s bein g broke n down , an dscannin g it , ha s t o loo k a t th e MMR A t o kno wokay , thi s i s goin g t o Medford , a s oppose dt o goin g t o Bend , Oregon , a s a n example . ATh e - - i f th e package s wer e bein g handle dseparately , yes . It' s - - it' s als o - - sometime s the ywoul d hav e ULD s o f packages , wher e th e UL D i s identified , o r freigh t container s identifie da s needin g t o g o t o a particula r destination . Q Okay . D o w e hav e an yindicatio n tha t a 20 8 ca nhandl e a ULD ? AActually , w e kno wi t can't . Q W e kno wi t cannot , correct ? ATha t i s correct . Thi s i s no t a

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 containerize d loade daircraft .

Q S o i t ha s t o - - eve ni f somethin g
cam e fro mMemphi s t o Portland , an yULD , i t ha s t o b e take nou t o f th e UL D s o i t ca nb e packe d int o a Cesn a 208 ? AIf , i nfact , tha t rout e ha s a 20 8 assigne dt o it , that' s correct . Q An d wel l w e kno wi t ha s a 2 08 , i n thi s case , don' t we ? AI nthi s cas e i t did , yes . Q Okay . S o w e kno wtha t someon e ha d t o physicall ymov e tha t packag e fro meithe r a UL D o r a pallet , brea k i t down , an dthe nsca n i t t o pu t i t ont o a shipmen t goin g o na Cesn a 2 08 , that' s boun dfo r Medford ? AThat' s correct . Q Okay . S o w e kno wthat , a t th e time , someon e ha d t o loo k a t tha t sca ni n Portlan dt o sca nit , t o kno wtha t it' s goin g t o Medford ? AThat' s correct . Q Okay . S o ho w- - d o yo u hav e any

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### 15 8

1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 explanatio nfo r ho wthe person , no t onl yo n

th e eas t coast , bu t th e perso ni nPortland wh o ha s tha t scanbar , literall yadjacen t t o the ORMD , woul dmis s something lik e that , give n the training yo u sa ytha t yo u giv e t o you r courier s andhandlers ? AYes , sir . Th e handle r tha t i s handlin g a packag e tha t ha s alread ybee ni n conveyanc e i s - - i s no t doing an ytyp e o f inspectio nfo r acceptance . They'r e basicall y handling the package , base do nth e routing and , a s yo u indicated , th e XH , a t tha t point , theykno wit' s jus t a norma l genera l commodit y typ e package . And whe nyo u loo k a t a package , thes e - - thes e package s ar e brownand they seemt o hav e - - onl yhav e tha t on e markin g nea r th e tracking number , a s wel l a s a gree n labe l tha t I' mno t familia r with . Bu t many package s hav e go t produc t marking , tracking , instruction s t o the end delivere r and s o forth . An dI'l l b e brutall yhones t wit hyou , afte r the poin t o f acceptance , a t tha t point .

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 there' s no t a lo t o f detai l looke d a t fo r

othe r tha nhazar d marking s an d label s an d- - an ds o forth . Now , i nth e even t - - thi s particula r case , i f thei r inboun d manifes t ha d tol dthe mther e wer e ORMD s tha t wer e i ntha t package , the ywoul db e lookin g fo r thos e package s an d makin g sur e tha t the ywer e processe dcorrectl yan dmatche d th e Dangerou s Good s Manifest , Q Okay , An d I appreciat e th e challeng e tha t FEDE Xhas . Bu t FEDE Xsyste m seem s t o b e designe d i non e o f tw o ways . I f it' s identifie da s HAZMA T acceptance , i t goe s throug hon e channel . I f it' s no t identifie d

a s HAZMAT , i t goe s throug hanothe r channel . Bu t isn' t th e rea l challeng e i nth e HAZMAT , a s yo u allude dto , i s whe nit' s improperl ymarke d

o r improperl yidentifie d an dthere' s a nissu e o f HAZMAT ? Ar e yo u sayin g tha t FEDE Xha s n o syste mi nplac e o r anyresponsibilit yt o catc h tha t o r anyo f th e subsequen t ai r operator s t o catc htha t whil e it' s i nai r transport ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ASaf e transportatio no f dangerou s

good s i s everybody' s responsibility . An d - - an dw e conside r tha t a responsibilit ya t th e tim e o f acceptance , a s wel l a s an ytim e th e package s tha t ar e - - tha t jus t happe nt o b e identifie da s no t bein g proper , onc e the yg o pas t th e poin t o f acceptance , tha t woul db e brough t u p t o a - - a prope r dangerou s good s specialis t Q S o yo u acknowledg e tha t a nai r operato r canno t tur na blin dey e t o a readil y apparen t indicatio ntha t there' s hazardou s materia l that' s inconsisten t wit hwhat' s bein g describe do npaper s o r no t bein g describe do n shippin g papers ? AWell , I - - I can' t tel l yo u abou t othe r carriers . Bu t I ca ntel l yo u tha t w e d o no t tur na blin d ey e t o othe r indication s i t migh t b e a dangerou s goods . Bu t yes , I'l l - - I'l l agre e wit hyo u o non e thing , an dtha t is , i t i s a challenge . An d that' s th e reaso ntha t

w e inves t i nou r employee s an d- - an d trai n NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ou r employee s wit ha lo t mor e frequenc ytha n

th e regulation s require . Q Okay . Now , yo u talke d abou t th e D Gsyste mi s use d b ysi xo r seve nseparat e operators , earlier . Correct ? AOu r feede r aircraf t operator s ar e
a numbe r o f primar ycontractors , i f yo u will . Q Okay . Yes . Okay . An d yo u talke d abou t ho wFEDE Xown s al l thes e aircraft . A Yes , si r Q Ar e yo u aware , i n th e aviatio n industry , i t i s commo nfo r companie s wil l us e lik e Unite d o r Delt a o r Frontier , no t t o ow n th e aircraft , bu t t o actuall yleas e thei r aircraft ? ASure . Q S o tha t fac t tha t on e own s a n aircraf t i s no t indicativ e tha t the yar e th e operato r o f th e aircraft , i s it ? AAbsolutel ynot . Q 

### Because , wha

t drive s th etrai no n wh o th eoperato r

is , i s wha

t thei r ai r carrie r

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 certificat e says , correct ' That , no wI' m- - I don' t thin k tha t I' mknowledgeabl e enoug hi ntha t are a t o b e abl e t o commen t o ntha t

Okay . Well , yo u allude d to . earlier , whe nth e pilo t o nan ygive nfligh t i s ultimatel yresponsibl e fo r hi s o r he r aircraft . Yo u acknowledge d tha t standar di n th e aviatio nindustry ? AI acknowledg e th e standard . Yes . Q Okay . An dso , th e pilo t i nth e on e case , i nth e firs t fligh t tha t arrive d i n Medford , Oregon , h e mad e th e decisio nt o chang e th e locatio no f tha t HAZMA T carg o loa d location . An d h e ha s th e authorit yt o d o that , doesn' t he ? AThat' s correct . Q Becaus e it' s hi s responsibilit y fo r tha t aircraf t an deverythin g aboar d it , whethe r i t b e carg o o r persons . The yhav e th e fina l say . Correct?

Ye s

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Jus t sa yye s o r

n o TH E WITNESS : Ye s

B YMR . MORRIS : Q Okay . And , i nthi s case , i ntha t particula r case , ther e was , i nfact , a chang e i nth e locatio no f th e hazardou s material s fro mth e mai ncargo , a s indicate db yth e D G program , t o wha t wa s actuall yth e actua l locatio no f th e hazardou s materia l whe ni t arrive di nMedford ? AYes . Ther e wa s a chang e tha t wa s dictate db yth e captain . Q Okay . An dtha t chang e wa s no t reflecte ddow nline , becaus e i t wa s no t inpu t b ysomebod yi nth e D Gsystem ? AIt' s m yunderstandin g tha t th e pilo t ha d a naccurat e version , bu t th e onlin e syste mwa s no t updated . That' s correct . Q Okay . Nothin g further , sir . JUDG E GOODWIN : Redirect ? MS . FELTS : No , You r Honor .

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 JUDG E GOODWIN : Ar e yo u finishe d

wit hthi s witnes s then ?

MS . FELTS : Yes , You r Honor . JUDG E GOODWIN : Okay . Again , you'r e instructe d no t t o discus s you r testimon yo r an yothe r matte r o f th e hearing . I s h e goin g t o b e subjec t t o recall ? Th e saf e thin g t o d o i s hav e hi mwai t outside ,

MS , FELTS : W e don' t anticipat e recallin g him . You r Honor .

JUDG E GOODWIN : Okay . The nyo u ca nremai ni n th e hearin g room . But , i n doin g so , h e won' t b e subjec t t o recall .

MS . FELTS : Understood . JUDG E GOODWIN : Al l right .

excused. )

witness ? (Whereupon , th e witnes s wa s

JUDG E GOODWIN : D o yo u hav e a nex t

MS . FELTS : Yes , You r Honor . W e cal l Richar d Mills .

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 o nboard , I thin k I' mgoin g t o ste p ou t fo r a

minute ,
(Whereupon , of f th e recor d9:4 2

a.m . unti l 9:4 4 a.m . fo r brea k an dtap e change. ) JUDG E GOODWIN : Pleas e b e seated , stat e you r ful l nam e fo r th e record , an d spel l you r firs t an dlas t names .

TH E WITNESS : Yes , sir . M ynam e i s Richar d Mills . That' s R-I-C-H-A-R- D M-I-L-L-S . JUDG E GOODWIN : Than k you . Okay , Counsel . Whereupon , RICHAR D MILL S

a witness , wa s calle d b yCounse l fo r th e Responden t and , havin g firs t bee ndul ysworn, assume dth e witnes s stan d an d wa s examine dan d testifie da s follows :

DIREC T EXAMINATIO N B YMS . FELTS :

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Mr . Mills , woul d yo u pleas e stat e

th e nam e o f you r employe r an d you r busines s address ? AM yemploye r i s Empir e Airlines . Th e addres s i s 1155 9 Nort hAtla s Road . That' s locate di nHayden , Idaho . That' s H-A-Y-D-E-N . An dth e Zi p i s 83858 . Q Wha t i s you r jo btitl e a t Empir e Airlines ? ACurrently , m yjo btitl e a t Empir e Airline s i s th e Directo r o f Qualit yAssurance . Fo r FAApurposes , I a mth e Chie f Inspector . Q Ho wlon g hav e yo u bee ni ntha t position ? AI'v e bee ni ntha t positio n approximatel yon e yea r Q Hav e yo u ha dpreviou s position s wit hEmpir e Airlines ? AYes , I did . I wa s previousl yth e Directo r o f Safet yan d Compliance , a jo btha t I hel dwit hEmpir e fro mth e tim e o f th e initiatio no f m yemploymen t o nOctobe r 1s t o f NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2001 , unti l abou t a yea r ag o

A Unti l abou t a yea r ago ? Yes . Q Let' s focu s o nyou r jo bdutie s an d responsibilitie s i ntha t title , sinc e tha t kin do f correspond s wit hth e tim e o f th e issue s raise di nthi s matter . Pleas e describ e wha t you r jo bdutie s an d responsibilitie s wer e
a s th e Directo r o f Safet yan dCompliance . AA s th e Directo r o f Safet yan d Compliance , I ha d a numbe r o f responsibilities , no t th e leas t o f whic hwa s th e developmen t an d th e - - th e fosterin g o f a

- - a safet ycultur e a t Empir e Airlines , bot h fo r purpose s o f fligh t safet yan d fo r industria l safet yfo r ou r mechanics . I t wa s
m yresponsibilit yt o develo p ou r safet y progra man dw e di d that , basically , i n accordanc e wit hth e guidanc e tha t ha s bee n availabl e wit hregar dt o safet ymanagemen t system s I wa s responsibl e fo r th e developmen t an d th e maintenanc e o f a n NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 emergenc yrespons e progra mfo r th e company .

And , i n addition , th e complianc e portio no f m y responsibilitie s ha d t o d o specificall ywit h regar dt o interactio nwit hth e FAA , primaril y i nth e are a o f fligh t standards , bu t - - bu t hazardou s material , a s well . Q Wha t typ e o f service s doe s Empir e Airline s provide ? AEmpir e Airline s provide s a regional carg o service . The yd o tha t fo r Federa l Express . The yessentiall ycarr y package s fo r FEDE Xfro mhub s t o mor e rura l portion s o f Americ a an d retur nt o th e hub s wit hpackage s tha t ar e - - tha t ar e accepte db y FEDE Xa t thos e remot e station s Q Doe s Empir e provid e tha t servic e fo r an yothe r company ? AThe yd o not . Q And , wit hregar d t o th e servic e i t provide s fo r FEDEX , ho wi s tha t arrangemen t

se t up ? I s i t documente do r i s i t jus t o n a no dan d a han d shake ? How ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 AI' mquit e sur e it' s documented . I

- - I - - t o b e candi d wit hyou , wit hregar dt o th e - - th e mechanic s of f th e - - o f th e agreemen t betwee nFEDE Xan dEmpir e Airlines , I' mno t necessaril ypriv yt o those . I d o kno w tha t th e aircraf t tha t Empir e Airline s operate s ar e al l owne d b yFEDEX . Al l o f thos e aircraf t ar e essentiall yprovide dt o Empir e Airline s b yFEDE Xan d ar e o nEmpir e Airline s FAAoperatin g certificate , specificall yi nth e operation s specifications . Q An d you r answe r preempte d tw o o f

m ynex t questions . S o than k yo u fo r you r efficiency . AOh , I' msorry . Sure . Q Th e nex t questio nI hav e i s wit h regar dt o th e cre wmember s tha t fl ythes e planes . Ar e the yEmpir e employees ? AThe yar e Empir e Airline s employees , yes . Q The ywea r Empir e uniforms ? AYes , the ydo .



### NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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< ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Empir e pay s them ?

AI' msorry ? Q Empir e pay s them ? AYes . Q Okay . Let' s tal k no wabou t thes e cre wmember s an dth e trainin g the yreceiv e fro mEmpire . Yo u mentione dearlie r tha t that' s par t o f you r purvie wa s th e Safet yan d Complianc e Director . Wha t typ e o f trainin g i s provide dt o Empir e Airline s employee s - - cre w members . 

### assuming ? Specifically , pilots

.

Crew members , yes , si r I ' m

AOkay . Cre wmembers . Empir e Airline s provide s a variet yo f training . Eithe r - - eithe r directl yo r b ycontract , a s on e migh t expect . I nthi s da yan dage , a lo t

o f th e trainin g i s out-source d t o operation s simila r to , fo r example , fligh t - - Fligh t Safet yInternational , wh o provide s training , specificall yfligh t training , simulato r NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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# r ^ 1

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 trainin g an dsom e groun d training . Empir e

Airline s directl yprovide s it s cre wmember s wit htrainin g tha t i s specifi c t o Empir e Airline s policie s an dprocedures , thos e tha t

ma ydiffe r fro m- - fro mmanufacturers ' recommendation s wit hregar d t o th e aircraft . An dthe yals o provid e training , familiarizatio ntrainin g wit hhazardou s material s An dlet' s tal k mor e abou t tha t aspec t o f th e training . Tha t goe s t o th e nex t questio nI have . Tel l u s mor e abou t th e hazardou s material s familiarizatio ntrainin g yo u mentioned . AI - - i nal l candor , th e - - I ca n tel l yo u abou t th e - - I ca ntel l yo u abou t th e duratio no f tha t training . Typically , i t i s abou t on e day s wort ho f trainin g b y- - b you r trainin g personnel . An dagain , tha t - - it' s

- - it' s familiarizatio no n- - o nhazardou s materia l requirement s an d- - an d it' s hel di n
a - - i na classroo msituation , a s a - - a s par t NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 o f groun dschool .

Q Doe s tha t trainin g cove r cre w members ' responsibilities , expectations , an d dutie s wit hregar dt o FEDE Xpackages ? AI woul d sa yye s i t does . Q An dwha t doe s tha t cover ? AEssentially , th e - - th e trainin g ha s t o d o wit hth e cre wmember s - - th e expectatio ntha t Empir e ha s wit hregar dt o th e cre wmember s a s - - during , fo r example , th e loadin g proces s and , mor e specifically , th e genera l loadin g proces s an dth e dangerou s good s loadin g loadin g proces s Th e expectatio ni s that , firs t o f all , th e - - th e pilo t - - hi s primar yresponsibility , a s I' m
sur e you'r e - - you'r e aware , i s t o perfor ma pre-fligh t o f th e aircraf t an dt o insur e tha t th e aircraf t i s ai r worthy . An d par t o f tha t ai r worthines s i s als o tha t th e cre wi s expecte dt o monito r th e loadin g o f th e aircraft , no t specificall ywit hregar dt o th e individua l packages , bu t mor e abou t th e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 loadin g fro m a weigh t an dbalanc e standpoint , whic hi s als o a n- - a nai r worthines s issue . Th e - - th e trainin g specifi c t o hazardou s material s ha s t o d o wit hth e paperwor k tha t the yma y- - the yma yexpec t t o se e delivere d t o th e aircraft , t o them , specifically , b yth e dangerou s good s specialis t o r th e FEDE X dangerou s goo dspecialist , wh o present s the m wit ha lis t o f thos e item s tha t ar e goin g t o b e carrie d aboar d th e aircraft . Th e captai n o r th e - - th e cre wmembe r i s traine dwit h regar dt o insurin g tha t the y- - firs t o f all , tha t the yhav e al l th e prope r - - prope r paperwor k befor e departure . An dthey'r e als o traine dspecificall ywit hregar d t o insurin g tha t th e - - th e package s tha t ar e - - tha t ar e presente da s dangerou s goods , hazardou s materials , matc hwhat' s o nth e - - what' s o n th e Auto-DG . An d I' msur e there' s bee nenoug h discussio nabou t Auto-D Gtha t I don' t nee dt o g o int o that . Q Okay . Ver ygood . Wit hregar dt o

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 th e D Gpaperwor k tha t Empir e woul dreceiv e

fro mFEDEX , a s yo u mentioned , wha t i s a cre w member , a nEmpir e cre wmembe r traine dt o d o wit hrespec t t o wha t h e o r sh e shoul dd o i f the ynotic e somethin g ou t o f sor t o nth e paperwor k o r incorrect , o r somethin g needin g change ? AThe yar e instructe d tha t i f the y

- - i f the yfin dsomethin g - - i f the yfin da - - a disagreement , i f yo u will , betwee nth e Auto

D Gpaperwor k an dth e - - an d tha t materia l that' s presented , let' s say , fo r example , i f there' s - - i f there' s a nadditiona l packag e tha t doe s no t - - i s no t show no nth e --o nth e Auto-DG , the yar e instructe d t o ge t togethe r wit hth e D Gspecialis t an dd o on e o f tw o things . Eithe r t o hav e - - hav e the minsur e tha t tha t - - tha t particula r packag e i s note d

o n- - o nth e Auto-DG , o r t o remov e i t fro mth e shipmen t an d no t - - s o tha t i t wil l no t b e carrie do nboar dth e aircraft . Q Okay .

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ATh e - - if , fo r example , ther e i s a

- - ther e i s a packag e show no nAuto-D Gtha t isn' t presented , the nth e cre wmembe r i s expecte dt o hav e th e D Gspecialis t correc t th e Auto-D Gt o reflec t exactl ywha t goe s o nth e airplan e Doe s th e cre wmembe r hav e acces s t o th e Auto-D Gsyste mt o mak e tha t correctio n hi mo r herself ? AThe yd o not . The yd o not . I t i s
a computerize d- - a computerize d system . I don' t hav e an yfirs t han d familiarit ywit hit . But , a s a - - a s a standar dpractice , w e - - we , bein g Empir e Airline s - - ar e awar e tha t w e hav e - - hav e n o acces s t o FEDE Xcompute r mainframe , whic hi s apparentl ywher e thi s - - tha t - - tha t particula r materia l i s kept . Q Okay . An d yo u mentione dearlie r abou t loadin g - - par t o f th e pilot' s pre fligh t responsibilities , yo u mentione d loading . D o th e pilot s actuall yphysicall y loa d th e plan e wit hpackages ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ANo , ma'am . The yd o not ,

Q Wh o doe s that ? ATh e ramp agent s fo r FEDEX , folk s wh o ar e traine dspecificall yt o loa dth e aircraf t an d t o conduc t th e loadin g operations , Q Okay , An dthe nlet' s kin do f

narro wou r focu s no wan dtal k abou t thi s subjec t matte r that' s th e subjec t o f thi s littl e penalt yaction . Ho wdi d yo u firs t becom e awar e tha t th e FAAha dinitiate d a n investigatio nint o Empir e regardin g thes e matters ? Considerin g i t wa s a lon g tim e ago , I believ e th e firs t - - th e firs t notic e tha t I ha d wa s tha t w e receive da - - a lette r o f investigatio nfro m- - fro mMr . Steiger . Q Ha d yo u eve r bee ninvolve d i na simila r situatio n- - deal t wit ha simila r situatio nbefor e a nFAAinvestigatio n regardin g hazardou s materials ?

Candidly , a t thi s point , I don' t

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 - - don' t believ e tha t I had . I believ e thi s

- - thi s wa s m yfirst . Q Okay . Mr . Mills , let' s tal k abou t th e lette r o f investigatio nyo u received . And , specifically , I wan t t o tal k abou t wha t yo u di di nrespons e t o it . An dcoul dyo u pleas e describ e that ? AWhe nw e receive dth e lette r o f investigation , typically, par t o f m y responsibilitie s a s a s th e th e complianc e perso nwit hEmpir e Airline s i s t o consul t wit hth e particula r departmen t tha t

ma yb e involve di na - - i na lette r o f investigation . Typically , th e one s tha t w e se e - - candidly , th e one s tha t w e se e mor e - - mor e frequentl yar e - - ar e letter s o f investigatio nfro ma fligh t standard s aspect . An dthos e ar e generall ydispose d o f relativel y quickly . Bu t wit hregar d t o - - wit hregar dt o thi s particula r situation , I consulte dwit hm y Directo r o f Operations , wh o i s immediatel y responsibl e fo r ou r cre wmember s an dthei r NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 activitie s wit hregar d t o hazardou s materials .

An ds o that' s exactl ywha t I did . M yDirecto r o f Operation s an dI consulte do nth e issue . Bein g thei r immediat e supervisor , h e contacte d th e cre wmember s tha t wer e involved . H e gathere dth e information ; di dth e interview s wit hth e cre wmember s t o determin e wha t the y

- - what , i f anything , the y- - the ykne wabou t thes e - - thes e particula r situations ; and , base do nthat , m yDirecto r o f Operation s an d I crafte dou r respons e t o tha t lette r o f investigation . Q An dwha t typ e o f follow-u p o r correctiv e actio nwa s don e b yEmpir e i n respons e t o o r i nconnectio nwit hth e matter s raise di nthi s issu e wit hth e lette r o f investigation ? AWell , specifically , considerin g ther e wer e tw o - - ther e wer e tw o particula r incident s kin do f i non e o nthis , le t m e - - le t m e addres s the mseparately . Wit hregar d t o th e positionin g o f HAZMA T material s fro m NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 th e mai ndec k o f th e aircraf t t o th e - - t o th e

pod , wha t w e wer e - - wha t w e wer e tol d an d- - an dwha t w e believe dt o hav e happene dwa s tha t th e - - th e captai nrequeste do f th e D G specialis t tha t tha t particula r loa db e place d i nth e pod . Th e D Gspecialis t ha dn o - - ha d

n o reaso nwh y- - wh ytha t couldn' t b e done . H e sai dtha t wa s acceptabl e An d h e appropriatel ydi da pe nan din k chang e - - o r
a pe nan dpenci l -- a pe nan dpape r chang e o f th e Auto-DG , which , i nou r - - i nou r manua l a t tha t time , i t wa s a nacceptabl e practice . Th e

- - i f th e - - i f th e D Gspecialis t mad e a chang e t o th e - - t o th e Auto-D Gan d i f a packag e wa s moved , h e coul dmak e tha t chang e i npe nan dink . An d th e expectatio nwa s that , afte r tha t ha d bee nmade , h e woul dg o bac k t o

- - g o bac k t o th e compute r an d chang e th e compute r t o reflec t wha t ha d actuall y- - ho w th e aircraf t ha d actuall ybee nloaded . A s - - a s I' msur e it' s alread ybecom e abundantl y clear , tha t chang e - - th e electroni c chang e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 wa s no t made . And , a s a result , m yDirecto r 2 o f Operation s an d I consulte d o nthi s an d 3 determine dtha t th e appropriat e thin g t o d o 4 wa s no t pu t ourselve s i njeopard yi nth e 5 futur e an dtha t an ychang e tha t wa s mad e t o 6 th e Auto-DG , prio r t o departure , th e D G 7 specialis t woul d hav e t o g o bac k an dinitiat e 8 tha t chang e electronically , reprin t th e Auto

9 DG , an dpresen t hi mwit ha printe dcop yo f ho w 1 0 exactl yth e aircraf t wa s loaded . Wit hregar d 1 1 t o th e - - th e othe r situation , frankly , w e - - 1 2 ther e - - ther e wa s n o apparen t chang e t o - - 1 3 tha t - - tha t w e coul d reasonabl ymak e tha t - - 1 4 tha t migh t preven t tha t - - th e ORM D boxe s fro m 1 5 bein g loade d aboar d- - aboar dth e aircraft . 1 6 Th e captai nhad , i ntha t particula r case , ha d 1 7 n o - - ha dno t ide a a t al l tha t thos e boxe s ha d 1 8 bee npresente dbecause , firs t o f all , ther e 1 9 wa s n o paperwor k o nthos e - - o nthos e boxes . 2 0 A s - - a s certainl yw e - - w e responde di nou r 2 1 - - i nou r lette r i nrespons e t o th e - - i n 2 2 respons e t o th e lette r o f investigation , it' s NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 typica l an d anyon e - - anyon e wh o - - wh o i s

familia r wit hramp operation s an dha s watche d loadin g i s awar e that , i f yo u hav e a bo xtha t i s longe r i non e dimensio ntha nth e others , typically, whe nth e - - whe nthos e boxe s ar e pu t o nth e bel t loade r an d the yar e han d loade d ont o th e aircraft , they'r e typicall y pu t longitudinall yo nth e - - o nth e bel t loader , en dt o end . An d I thin k th e picture s eve ni nth e - - tha t wer e provide d wit hth e lette r o f investigatio nshowe dtha t wha t ORN D markin g wer e ther e wer e o nth e end s o f th e box . An dreasonably , th e - - th e captai ni s no t - - n o cre wmembe r i s expecte dt o handl e eac han d ever ybox . And , fo r purpose s o f thi s particula r incident , thi s wa s jus t anothe r box , becaus e ther e wa s n o paperwor k wit hit . The yha dnothin g t o - - n o visua l cu e - - n o cu e
a t al l tha t thos e particula r boxe s migh t contai nanythin g bu t grandmother' s cookie s o r

- - o r whateve r else . S o - - s o w e - - w e consulte dabou t it . W e discusse dit . And , NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 quit e frankly , ther e wa s nothin g - - ther e wa s

nothin g w e fel t tha t wa s practica l fo r u s t o

- - t o pu t i nplac e t o - - t o tr yt o preven t a recurrence . Q An dwh yi s that ? ABecaus e Empir e Airline s di dno t accep t th e - - di dno t accep t thos e boxe s fo r shipment . The y- - and , lik e I said , ther e wa s
n o - - wa s n o paperwor k wit hthem . Agai n- - an dagain , th e captai n- - th e captain' s responsibilit yi s no t t o handl e eac han d ever y box . Th e captain' s responsibilit ylie s wit h th e aircraft , insurin g th e ai r worthines s an d t o mak e sur e tha t i nth e - - whe nth e aircraf t i s ultimatel yloaded , tha t i t i s loade d withi n th e limitation s o f weigh t an dbalance . Q An d I kno wwe'r e talkin g abou t tw o flights . Thi s lette r o f investigatio n reference d tw o flights .

Yes . Q Ho wman ycre wmember s wer e workin g
eac hflight ?

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 A On e On e cre wmembe r wit heac h

flight . Th e captai no f - - o f tha t aircraft . Q Okay . Than k you . Nothin g furthe r fo r thi s witness . You r Honor .

JUDG E GOODWIN : Cross ? CROS S EXAMINATIO N B YMR . MORRIS : Q Mr . Mills , jus t t o g o ove r a coupl e o f things . Th e pilot' s wearin g a n Empir e uniform ? AYes , sir . That' s correct . Q They'r e traine d b yEmpire ? AThe yare . Q They'r e pai d b yEmpire ? AYes , sir . The yare , Q Eac ho f th e aircraf t tha t Empir e operate s ha s a noperate db yEmpir e Ai r sticke r o nit , dow nb yth e carg o door , doesn' t it ? AI believ e i t does . Yes . Q That' s becaus e it' s require d unde r 119-9 B o f th e Federa l Aviatio nRegulation s t o identif ywh o th e operato r o f th e aircraf t is , NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 right ? Yes , si r

Q S o you . talke d abou t fligh t standards . Let' s tal k abou t tha t fo r a littl e bit . I' massumin g yo u understan d th e ai r carrie r certificatio nconcept? AYes , sir . Q An d Empir e ha s a nai r carrie r certificate ? AYes , sir . I t does . Q I t doesn' t sa yFEDE Xdoe s it ? ANo , sir . I t doe s not . Q I t say s Empir e Airlines . AI t does , indeed . Q Okay . An d par t o f th e ai r carrie r certificate s ar e it s operatio nspecifications ? ATha t i s affirmative . Q An dth e operation s specification s
ar e basicall yth e contrac t wit hth e FAAabou t th e thing s tha t i t ca nan d canno t d o wit hit s maintenance , it s operations , wher e i t ca nfly , whe ni t ca nfly , an dwha t aircraf t i t ca nfly . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Correct ?

A Yes , sir . Q An dD-8 5 o f Empir e Aircraft' s operation s specification s tell s yo u whic h aircraf t ar e o nEmpir e Air' s operation s specifications , doe s i t not ? ATha t i s correct . Q Okay . An dtha t mean s Empir e Ai r
ca nonl yoperat e thos e give naircraf t o nit s operation s - - fo r it s operations ? AYes , sir , unde r tha t particula r certificate . Tha t i s correct . Q Okay . An d ther e i s a proces s b y which , i f Empir e want s t o ad d o r delet e a n aircraf t of f it s op-specs , tha t i t ha s t o d o
s o i ncoordinatio nwit hth e FAA ? AYes , sir . That' s correct . Q An d th e reaso nfo r tha t i s there' s a ninteres t i nidentifyin g whic hai r carrie r i s operatin g whic haircraf t i nai r commerce . AI ca nonl ypresum e tha t that ' s correct . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 Q Okay . You r aircraf t ar e no t o n

FEDEX' S operatio nspecifications , ar e they ? ANo , sir . The yar e not . Q The yar e solel yyou r own ? AYes , sir . That' s correct . An d Empir e Aircraf t ha s operationa l contro l ove r al l o f it s aircraft . don' t they ? A Yes , sir , Q Because , i f the ydon' t hav e operationa l control , the ydon' t hav e a nai r carrie r certificate , d o they ?

I' m sorry . Woul d yo u restat e tha t question ? Ye s I f yo u don ' t hav e operationa l contro l o f th e aircraft , yo u don' t ge t t o hav e a nai r carrie r certificate . correct? That' s correct . Q Okay . An don e o f th e thin g tha t i s require di nth e ai r carrie r certificat e i s t o hav e variou s manual s tha t ar e eithe r NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 accepte do r acceptabl e t o th e administrator ?

AYes , sir . Q Okay . An d on e o f thos e i s th e genera l operation s manual .

Yes , sir . I t is . And , withi n you r genera l operation s manual , sinc e yo u wer e th e Directo r o f Safety , I' massumin g tha t you'r e awar e o f th e extrac t dealin g wit hEmpir e Ai r a s a wil l

carr yai r carrie r o f hazardou s materials ? AYes , sir . I am . Q An d i ntha t excerp t fro myou r genera l operation s manual , th e compan yi s require dt o follow , a s par t o f it s contrac t fo r it s ai r carrie r certificat e fo r th e FAA , i s i t not ?

Q Yes , sir , Okay . Woul d yo u tur nt o C-11 ? O n pag e 11-44 . Excus e me , 11-41 . AAl l right , sir . Go t it . Q D o yo u se e o nth e to p wher e i t talk s abou t Appendi xG , FEDE Xprocedures ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 AI do . 2 Q I nloading ? 3 AYes . 4 Q Wha t doe s A- 2 sa yi s th e 5 responsibilit yo f th e cre wmembe r is ? 6 ATh e - - a - - a cre wmembe r mus t 7 supervis e th e loadin g o f DG . 8 Q Okay . 9 ATh e requirement s o f compatibility , 1 0 separatio ndistances , accessibility , security , 1 1 an dpackag e orientatio nmus t b e checked , usin g 1 2 Empir e Airline' s EA-DG L form . Dangerou s Good s 1 3 Loading . 1 4 Q Okay . An dA- 1 say s what ? 1 5 ALoadin g an d unloadin g o f D Gi s 1 6 handle db yFEDE Xramp personnel . Durin g th e 1 7 loading , th e D Gi s separate dfro mothe r 1 8 freigh t s o th e cre wmembe r ma yaccomplis hth e 1 9 pre-loadin g inspection . 2 0 Q S o th e cre wmembe r i s responsibl e 2 1 fo r inspectin g wha t goe s o nhi s o r he r ow n 2 2 aircraft , a s par t o f th e pre-inspection ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 AI' dsa ytha t wa s - - tha t wa s

accurate . Yes . Q Okay . Now , i f yo u woul dtur nt o photograph s i nC-8 . G o t o C-8-1 , AOkay , Q An d th e numbe r 940FRX , that' s a n Empir e Ai r aircraft , right ? ATha t i s o nou r operatin g specifications , yes , Q Okay . An dd o yo u se e ho w- - se e ho wthes e package s ar e o nth e rollers ? AYes , sir . I do . Q D o yo u se e ho wthey'r e sideway s lik e that ? AI do . Q An dthat' s ho wthey'r e loade dan d unloade dbecaus e i t save s spac e an deas e i n th e speedin g o f th e loadin g an d unloadin g o f th e packages , correct ? AI don' t kno wtha t thi s i s a representativ e photograp ho f - - o f th e typica l loadin g operation s I personall y

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 personall ywitnesse d- - witnesse d loadin g tha t

di dno t - - didn' t loo k lik e this . Q Okay . Bu t I wil l represen t t o yo u tha t thi s photograp hwa s take no n Augus t 22 , 2007 , durin g th e off-loadin g operation s a t Medford , Oregon . ANo , I don' t hav e an ydoub t o f that . Q Okay . D o yo u se e wher e th e - - se e ho wth e label s ar e al l facin g on e direction ? AYes . Actuall y- - an d ma yI as k a question ? Q No . AAl l right . The nI won't . Q Okay . Now , goin g bac k t o th e inciden t wher e th e pilo t mad e th e chang e i n th e locatio no f th e aircraft . Th e pilo t ha s ever yauthorit yt o d o that , doesn' t he ? AYes , h e does . Q Becaus e h e i s ultimatel y responsible , o r sh e i s ultimatel yresponsibl e fo r th e saf e operatio no f tha t aircraft . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 ATha t i s correct .

Q An dwhethe r i t b e h e o r sh e i s uncomfortabl e wit hth e locatio no f th e HAZMA T i nrelation s t o them , o r a weigh t an dbalance , o r a loadin g issue , the yca nmak e tha t cal l becaus e the yar e representin g Empir e Ai r i n th e operatio no f Empir e Air' s aircraft . correct? A Absolutely . Okay . And , i ntha t case , yo u acknowledg e tha t th e pilo t directe dth e chang e i nth e locatio no f tha t D Gfro mth e mai nhold , dow nint o th e po dseat ? AThat' s wha t I believe , yes . Q Okay . Wha t didn' t happe nwa s hi s desir e bein g communicate d throug hsom e sor t o f system , sayin g hey , I'v e mad e thi s change , handl e it . N o chang e i nth e paperwork . ANo , sir . I don' t thin k that' s a clea r - - that' s a clea r characterization . M y understandin g i s th e cre wmembe r ha da conversatio nspecificall ywit hth e D G NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 specialis t an drequeste d tha t i t b e done . An d

th e D Gspecialis t agreed . An d the y- - an dh e mad e th e chang e o nth e pape r an dh e hande di t t o th e - - t o th e cre wmember , an dthe ymove d th e - - move d th e box . Q Okay . So , i nthi s case , h e sa w tha t h e ha dHAZMA T - - h e ha d clas s Acorrosiv e material , okay . Ba dthing s fo r airplanes . right ? AOkay . Q Corrosive s ten dt o ea t aluminum . AOkay . Q So , i s tha t correct? AThat' s correct . Q Okay . S o h e ha d th e authorit yan d mad e th e directio nt o chang e th e locatio nfro m th e fuselage , dow nint o th e pod ? AThat' s correct . Q An dh e communicate d tha t t o someon e else , wit hth e expectatio ntha t tha t communicatio nwoul d b e continue dt o Empire' s en dstation , dow nrange ? NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 That' s correct . Tha t statio n

woul dalso , o f course , b e FEDEX' S en d station . Q Right . Understood . Now , i f I understan dcorrectly, yo u talke d abou t yo u wer e no t quit e familia r wit hth e mechanic s o f th e agreemen t betwee nEmpir e Ai r an d FEDEX ? ATha t i s correct . Q Ar e yo u awar e o f th e pressure s associate dwit hth e o n tim e requirement s fro m FEDE Xt o Empir e Air ?

MS . FELTS : Objection . JUDG E GOODWIN : Overruled . TH E WITNESS : I' mawar e tha t ther e i s a n expectatio no n th e par t o f ou r custome r

- - ou r custome r bein g FEDE X- - tha t w e wil l provid e servic e o n time . Tha t i s correct .

Q B YMR . MORRI S Ar e yo u awar e tha t th e contrac t provide s a 9 8 percen t rat e o f completio no n al l route s an d a 9 8 percen t o n tim e a t arrival/departur e rate ? AI' mno t awar e o f that . An d - - an d

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 le t m e b e mor e specific . I - - I' mno t certai n

tha t that' s a naccurat e representation . Q Oh . Okay , AOr , a t least , I hav e n o knowledg e o f that . (Whereupon , a brief , of f th e recor ddiscussion. )

MS . FELTS : I hav e a copy . That' s fin e MR . MORRIS : I' d hav e thi s marke d

nex t i norde r --i t woul db e what , C-1 5 o r 11 ?

JUDG E GOODWIN : Sixteen . MR . MORRIS : Thi s woul d b e C-16 ? JUDG E GOODWIN : Fiftee ni s a ful l pictur e o f Novembe r 8 , 2007 . S o thi s wil l b e marke d a s Complainant' s 16 . (Whereupon , th e documen t

w a s marke d a s 

### Complainant' s 1 6 fo r th e record. )

Q

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YMR

. MORRIS : Now , I' dlik eyo ut o g o - - jus t t o NEA LR

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 mak e i t easier , I' mgoin g t o fin d i t fo r you .

Le t m e as k you r indulgenc e fo r a moment , sir . I t i s twelv e page s fro mth e back . Doesn' t th e contrac t betwee nEmpir e an d FEDE Xsa ylesse e wil l maintain , durin g eac hschedule dmont ho f th e term , a s determine db yFedera l - - meanin g Federa l Expres s - - a 9 8 percen t rat e o f completio no nal l route s an da 9 8 percen t o n tim e arrival/departur e rate , exclusiv e o f cancellation s o r delay s cause db yweathe r o r
anyothe r reaso ndeeme dsufficien t b yFederal , afte r consultatio nwit hth e lessee .

MS . FELTS : You r Honor , I' mgoin g t o object . Mr . Mills , b yhi s ow ntestimony, sai d h e wa s uninvolve d wit hthes e contrac t negotiation s o r ha s n o knowledg e o f th e contract . H e i s no t priv yt o thes e details .

JUDG E GOODWIN : Overruled .

tha t - -

Ms

. Felt s TH

EWITNESS : I t

appear s t o sa y

JUDG EGOODWIN : I t

goe s t o weight

.

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 MS . FELTS : Than k you . You r Honor , JUDG E GOODWIN : G o ahead . TH E WITNES S Th e documen t tha t yo u jus t hande d m e appear s t o sa ythat . I hav e n o knowledg e o f thi s document , i f yo u will . Let' s sa ytha t it' s abov e m y- - abov e
m ypa ygrade . I don' t kno wth e specific s o f thi s particula r thi s particula r requirement . I' mawar e tha t ther e i s - - tha t ther e i s a budgete dexpectatio no f ou r - - o f

ou r abilit yt o deliver . Bu t I ha d n o knowledg e o f th e 9 8 - - o f thi s 9 8 percen t rat e o f completio no r o ntim e wit hregar d t o thi s document . I nfact , I kno w- - I ca n- - I ca n onl yassum e tha t thi s i s - - thi s i s th e contrac t betwee n- - betwee nFEDE Xan d Empir e Airline s B YMR . MORRIS : Q Woul dyo u a t leas t conced e tha t ther e i s pressure , i f no t tremendou s pressur e fo r spee di nth e proces s o f - - betwee nth e arriva l o f th e aircraf t an d th e loadin g o f th e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 aircraf t an d th e unloadin g o f th e aircraft ? MS . FELTS : Objection . JUDG E GOODWIN : Sustained . Aske d

an danswered ,

Q MR . MORRIS : Nothin g further , sir . JUDG E GOODWIN : Redirect ? REDIREC T EXAMINATIO N B YMS . FELT S Mr . Mills , I wante dt o tur nyou r attentio nt o th e ite mtha t yo u wer e lookin g a t wit hMr . Morri s befor e th e agreement , th e genera l operation s manual . Specifically , Exhibi t C-11 , pag e 44 . I' msorry , pag e 41 , excus e me , C-11-41 . AOkay . Go t it . Q Ar e yo u there ? AYes , I am . Q I wan t t o g o ove r agai nwit hyo u thi s A- 1 language . Coul d yo u rea d tha t secon d

- - o r I'l l rea d it . Durin g loading , th e D Gi s separate dfro mothe r freigh t s o th e cre w membe r ma yaccomplis hth e pre-loa d inspection . NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 I s tha t wha t tha t says ? I' m sorry . I a mo n 41 . Thi s i s A ? A-1 . A

A A- 2 Th e secon d sentence .

i s correc t Q Oh , okay . Durin g loadin g - - tha t

An d wha t doe s tha t pre-loa d inspectio nentail ? ATh e pre-loa dinspectio ni s essentiall ya s - - a s I characterize dbefore , th e expectatio ntha t th e cre wmembe r i s goin g t o - - th e cre wmembe r i s goin g t o loo k a t th e material s tha t wer e presente d- - presente dfo r carriag e an d th e Auto-D Gan d compar e th e two , t o insur e tha t the ymatc hone-another , an d th e othe r thin g tha t they'r e lookin g fo r i s they'r e lookin g fo r a sticke r tha t i s pu t o n th e packag e b yth e - - b yth e D Gspecialist , tha t indicate s tha t i t ha s bee ninspecte d b y th e D Gspecialis t an d i s - - an d i s read yfo r shipmen t an d i s properl ymarke d an d s o o n an d NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 s o forth . Wha t doe s tha t pre-loa dinspectio n

no t include ? AWha t doe s i t no t include ? Q Wel l mayb e I shoul drephras e that . AOkay . Q Tha t pre-loa d inspectio nisn' t includin g acceptanc e - - inspectin g th e packag e fo r acceptance ? AI wouldn' t necessaril ycal l i t acceptance . I woul dcharacteriz e i t a s eligibilit yfo r carriag e becaus e it' s go t th e prope r - - go t th e prope r marking s o ni t an d- - an di s properl y- - an di t properl yliste do n th e - - o nth e Auto-DG . I' msorry . Hav e I
answere dyou r question ? Q Than k you . That' s fine . Than k yo u MS . FELTS : Nothin g furthe r fo r thi s witness , You r Honor .

MR . MORRIS : Nothing , sir . JUDG E GOODWIN : Anythin g furthe r

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 o f thi s witness ? MS . FELTS : No , You r Honor . JUDG E GOODWIN : Sir , yo u ma yste p down . Bu t yo u ar e instructe d tha t yo u ar e no t t o discus s you r testimon ywit hanybod yprio r t o th e conclusio no f th e hearing .

TH E WITNESS : Yes , sir .

excused. ) (Whereupon , th e witnes s wa s

JUDG E GOODWIN : I assum e h e i s subjec t t o recall ?

MS . FELTS : No , You r Hono r I n fact , he' s ou r fina l witnes s

JUDG E GOODWIN : S o yo u rest ? MS . FELTS : Yes , You r Honor , JUDG E GOODWIN : Let' s g o of f th e
recor dfo r a minute ,

(Whereupon , of f th e recor d fro m 10:2 0 a.m . unti l 10:3 4 a.m. )

JUDG E GOODWIN : Bac k o nth e record . Th e Exhibi t C-6-16 , whic hwa s marke d consist s o f 4 4 pages . And , jus t t o clea r u p NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 th e record , th e pag e tha t Counse l referre dt o

i ncros s i s actuall y3 2 o f 44 , pag e 3 2 o f 44 , jus t s o w e hav e tha t i nth e record . An y rebuttal , Mr . Morris ?

MR . MORRIS : N o sir . JUDG E GOODWIN : Anythin g els e i n thi s case ? MS . FELTS : No , You r Hono r

JUDG E GOODWIN ; D o yo u wan t a brief ? MS . FELTS : Yes , You r Honor , Mr , Morri s an d I wer e discussing .

JUDG E GOODWIN : D o yo u wan t t o d o th e sam e schedule ?

MR . MORRIS : Exactl yth e sam e schedule , sir .

JUDG E GOODWIN : Tha t wil l see n fair . I almos t type dth e orde r u p las t night . Bu t I figure di f I type di t up , you' dwan t a differen t schedule . Al l right . I'l l publis h th e orde r a s muc hnow . I s ther e any proprietar yinformatio ni nthi s tha t an yon e NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISUN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 o f yo u i s awar e of ? MR . MORRIS : I' mnot , sir . Again , I didn' t offe r i t fo r admission .

JUDG E GOODWIN : Bu t it' s a par t o f th e administrativ e recor dtha t goe s int o it ?

MR . MORRIS : Right . MS . FELTS : Tha t contrac t might . You r Honor , JUDG E GOODWIN : Wh ydon' t yo u tak e
a quic k look ? I f there' s an yproprietar y information , w e ca nredac t thos e page s o r I

ca nsea l thi s particula r contract .

MR . MORRIS : I hav e n o objectio n t o that . M S . FELTS : contract ? Tha t woul d- • Coul dw e sea l th e

JUDG E GOODWIN : Okay . S o wh y don' t I jus t - - wha t I' mstartin g t o d o whe n I sea l i s tha t I stic k a piec e o f pape r i n ther e tha t say s thi s documen t i s sealed . S o I'l l sea l th e contract . An d we'r e no t awar e o f anyothe r problem s wit han yo f th e othe r NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

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1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 exhibits ? MS . FELTS : No , no t fro mhere .

You r Honor . JUDG E GOODWIN ; Okay , The nth e hearin g bein g concluded , th e Cour t wil l publis hyou r pre-hearin g briefin g orde r i ndu e course . An dwe'l l g o of f th e record .

(Whereupon , th e hearin g wa s conclude da t 10:3 6 a.m. )

(202 ) 234-443 3 NEA L R . GROS S COUR TREPORTER S AN D TRANSCRIBER S 132 3 RHOD E ISLAN D AVE. , N.W

. WASHINGTON , D.C

. 20005-370 1 www.nealrgross.co mabilit y196:1 1

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annua l137: 8 answe r 169:1 2 answere d197: 4 199:1 6 anticipat e164: 9 anybod y200: 5 apparen t 160:1 2 180:1 2 apparentl y175:1 6 APPEARANCE S 125: 1 appear s 133: 2 195:1 9 196: 4 Appendi x187:2 2 applicatio n132: 1 141:1 1 142:1 1 appreciat e159:1 0 appropriat e141:1 4 143: 6 180: 3 appropriatel y 179: 9 approximatel y 147: 9 149:2 0 166:1 6 are a135:2, 9 162: 3 168: 5 area s 134: 5 135:1 1 155:1 0 arrangemen t 168:2 0 arriva l196:2 2 arrival/departur e 193:2 1 195: 9 arrive d162:1 2 163:1 1 arrivin g 145:2 1 aske d130: 8 148: 5 197: 3 aspec t 171:1 1 177:1 7 assig n142:1 4 143: 8 assigne d139: 5 157: 7 associate d141:1 5 145:1 0193: 9 Pag e20 4

associatio n154: 1 assum e196:1 5 200:1 0 assume d127:1 5 165:1 9 assumin g 170:1 3 184: 5 187: 8 Assuranc e166:1 1 Atla s 166: 5 AT R147:1 1 attentio n129:19,2 2 131: 9 197:1 0 Attorne y125:1 0 Augus t 130:1 4 190: 4 authorit y162:1 5 190:1 8 192:1 5 authorize d142: 2 Aut o 141: 5 146:2 0 146:2 1 174:1 0 180: 8 automate d140:1 6 154:1 2 automatio n132: 1 Auto-D G140:1 1 140:1 5 142:2 2 144:6,1 4 145: 6 147:2,2 2148:6,1 2 149: 9 173:19,2 0 174:15,1 9 175:2, 5 175: 8 179:11,1 4 180: 6 198:1 5 199:1 5 Auto-D T139: 3 Auto-regulation s 141: 2 availabl e167:2 0 Avenu e124:1 7 125: 5 aviatio n125:2, 5 161:1 1 162: 9 183:2 1 awarde d150: 8 awar e161:1 1 172:1 6 175:1 4 176:1 1 181: 3 187: 8 193:8,13,1 8

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Nea l R . Gros s & Co .

202-234-443 3 In c195:1 2

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Nea l R . Gros s & Co. ,

202-234-443 3 Inc ,flip 133:1 1

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Nea lR

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Nea l R . Gros s & Co. ,

202-234-443 3 Inc ,Pag e 21 0

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Nea lR

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202-234-443 3 Inc ,provid e143:2 1

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202-234-443 3 In c145:1 7

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202-234-443 3 I n c11194:1 1

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# r ^ 21 6 CERTIFICAT E

Thi s i s t o certif ytha t th e foregoing transcrip t

I nth e matte r of : Empir e Airlines , Inc .
Before : u S Departmen t o f Transportatio n

Date : 10-27-1 0

Place : Portland , Orego n

wa s dul yrecorde dand accuratel ytranscribe dunde r m ydirection ; further , tha t sai dtranscrip t i s a tru e andaccurat e recor d o f th e proceedings .

Cour t Reporte r

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