U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS FEDERAL AVIATION ADMINISTRATION

FEDERAL AVIATION ADMINISTRATION, Complainant, FAADocketNo. 2015-0208 

# RECElVFr vs. WEBGISTIX CORPORATION, Respondent. 

## JUN 152015 HEARING DOCI'\.c

. WEBGISTIX CORPORATION'S RESPONSES TOFEDERAL AVIATION ADMINISTRATION'S REQUEST FORDISCOVERY Pursuant to Rule 26(b) and 34(a) ofthe Federal Rules ofCivil Procedure, the discovery guidelines set forth in case precedent, and Section 13.220 ofthe Rules ofPractice in FAA Civil Penalty Actions [14 C.P.R. §13.220], Webgistix Corporation ("Webgistix"), by counsel Patrick G. Byrne, Esq. and Justin A Shiroff, Esq., hereby submit this Response to Federal Aviation Administration's ("FAA") Request for Discovery. GENERAL OBJECTIONS AND RESERVATION OF RIGHTS The following general objections apply to every Requestfor Admission, Interrogatory, and Requestfor Production (collectively "Requests"). 1. Webgistix objects to the Requests to the extent they seek information and/or admission ofmaterials protected by the attorney-client privilege, the work product doctrine, or any other legally recognized privilege, immunity, or exemption from discovery. Webgistix hereby claims suchprivileges and protections and objects to the admission ofany inf01mation or materials subject thereto. This general objection is intended to prevent any waiver of these privileges or protections as to any specific document request. If any privileged or protected informationor materials are inadvertentlyproduced, Webgistix does not waive orintendto waive any privilege, protection, or claw-backrightpertainingto suchinformation ormaterials. 2. Webgistix objects to the Requests to the extent they seek to impose

**di<~~**obligations broader than, or inconsistent with, the Rules of Civil Procedure applicable to this matter. 3. In providing these responses, Webgistix does not waive or intend to waive: (a) objections as to competency, relevancy, materiality, or admissibility; (b) objections on any groundto the use ofthese responses in anyproceecling, including any hearingin this action or any other action; (c) objections as to burden, vagueness, overbreadth, or ambiguity; or (d) further objections on any groundto this or any other discoveryrequestinthis proceeding. 4. Webgistix's decision to provide information or material, notwithstanding the objectionable nature ofthe Requests, should not be construed as: (a) an admission or stipulation that the material is relevant, admissible in evidence, or reasonably calculated to lead to the discovery of admissible evidence; (b) a waiver of these General Objections or the objections asserted in response to specific document requests; or (c) an agreement that requests for similar informationwill be treated ina similarmanner. 5. Any production in response to FAA's Requests is subject to Webgistix's right to objectto the admission into evidence ofany and all suchproductions on the grounds thatthey, or any of them, are irrelevant to the issues in this action or otherwise inadmissible. These productions and objections are based upon Webgistix's' present lmowledge, information, and belief. 6. Webgistix reserves the right to use all documents, electronically stored information, and tangible things that are in the possession, custody, or control of any party. Webgistix also reserves the right to supplement theseresponses if more information becomes available. Without waiving these objections, Defendantresponds as follow: REQUESTS FORADMISSION REQUEST NO. 1: Admit Exhibit l, photograph 5a- 5mtruly and accurately depicts the shipment described inparagraphII.2 ofthe Complaint.

-2-RESPONSE: Admit RequestNo.2: Admit Exhibit 2, is a true and accurate copy ofthe MSDS Respondent submitted to UPS

onorabout October 12, 2012. RESPONSE: Admit RequestNo.3: Admit Exhibit 3, is a true and accurate copy ofthe MSDS for the product shipped on or about October 12, 2012, effectiveMarch 1, 2013. RESPONSE: Admit RequestNo.4: Admit Respondent did not prepare a Shipper's Certification or Declaration ofDangerous Goods forthefiberboard box described inparagraphII.2 ofthe Complaint. RESPONSE: Admit only that Webgistix did not prepare a Shipper's Certification or Declaration of Dangerous Goods for the fiberboard box described inparagraph II.2 ofthe Complaint; denied as to anyrequirementto do so. RequestNo.5 Admit Respondent did not prepare shipping papers for the fiberboard box described in paragraphII.2 ofthe Complaint as requiredby 49 C.F.R. §§ 172.200(a). and 172.202(a). RESPONSE: Admit only that Webgistix did not prepare shipping papers for the fiberboard box described inparagraphII.2 ofthe Complaint; denied as to anyrequirementto do so. RequestNo.6: Admit Respondent did not mark the fiberboard box described in paragraph 11.2 ofthe



### - 3 -Complaint "Corrosive". RESPONSE: Admit onlythat Webgistix did notmarkthe fiberboard box described in paragraph 11.2 of the Complaint "Corrosive"; denied as to anyrequirementto do so. Request No.7: Admit Respondent did not affix a "Corrosive" label to the fiberboard box described in paragraph 11.2 ofthe Complaint RESPONSE: Admit only that Webgistix did not affix a "Corrosive" label to the fiberboard box described inparagraph 11.2 ofthe Complaint "Corrosive"; denied as to any requirementto do so. RequestNo.8: Admit Respondent did not provide emergency response information with the fiberboard box describedinparagraph 11.2 ofthe Complaint. RESPONSE: Admit only that Webgistix did not provide emergency response information with the fiberboard box described inparagraph 11.2 ofthe Complaint; denied as to any requirement to do

so. Request No.9: Admit Respondent did not provide an emergency response telephone number with the fiberboard boxdescribed inparagraph 11.2 ofthe Complaint. RESPONSE: Admit onlythat Webgistix did notprovide an emergency response telephone number with the fiberboard box described inparagraph 11.2 ofthe Complaint; denied as to any requirement to do so. INTERROGATORIES InterrogatoryNo. 1: The name, occupation, and business address ofeach person Respondent intends to call as



### -4-awitness inthisproceeding. RESPONSE: Webgistix's prospective witnesses include Joe DiSorbo, CEO ofWebgistix; BeckyWood, CMO of Webgistix; Gary Low, Customer Support Manager of Webgistix; Angel Gomez, Warehouse Manager ofWebgistix; and Mike Manzione, ChiefOperating Officer ofWebgistix. InterrogatoryNo.2: The subject matter upon which each intended witness is expected to testify, the facts and opinions as to which each intended witness is expected to testify, and a summary ofthe .grounds for each opinion. RESPONSE: Each ofthe witnesses identified in Response to Interrogatory 1 is expectedto testify as to the facts and circumstances concerning the allegations set forth in the Complaint. Additionally, Joe DiSorbo will testifY on the details on volume of shipments Webgistix handles, the percentages of Webgistix shipments that go by air, Webgistix's general policy concerning refusing to knowingly ship hazardous products, as well as related testimony. Becky wood will testifY on Webgistix's immediate response to the alleged incident, including those actions taken against Future Health Today, Ltd. d/b/a Keavy's Korner ("Keavy's Korner"), the client responsible for the shipment, as well as related testimony. Gary Low will testifY on the nature of Webgistix's relationship with Keavy's Korner andtheir affirmative denial ofthe hazardous nature ofthe product, as well as related testimony. Angel Gomez will testifY on Webgistix's inspection process in receiving goods from clients and Webgistix's packaging and shipping process. Mike Manzione will testifY as to the current state ofWebgistix's training, policies, and other aspects of the business. InterrogatoryNo.3: IdentifY each expert witness you may call to testifY at a hearing onthis matter. For each expert witness identified, state the subject matter upon which each is expected to testifY, summarize the substance ofsuch expected testimony (including, withoutlimitation, the subject of

- 5 -expected opinion testimony) and state the grounds for each such opinion (including, without limitation, identification ofall facts, treatises, reports, records, documents or tangible evidence thatform the basisfor suchopinion). RESPONSE: Paul W. Gantt, M.Eng., CSP, CET. The tentative opinions he is expected to testify to are

as follows: 1) the sodium chlorite solution was an irritant and not a corrosive within the meaning ofthe hazardous materials definitions; and 2) Webgistix's remedial efforts and response to the alleged incident are not sufficienttojustifymore thanthe minimumfine withinthe context ofthe Sanction Guidance Matrix. Though Mr. Gantt's opinions are in a preliminary stage (pending further research and possible testing), he intends to opine that the 4x dilution of the sodium chlorite solution is an indicator that it was sufficiently dilute as to no longer be technically corrosive. He also opined that the MSDS for the solution contained glaring inconsistencies, at times treating the solution as I00% sodium chlorite while simultaneously proscribing clean-up and treatment directives that were only sufficient ifthe substance was an irritant. He also opined thatthe ground response to the alleged spill likely supports the contentionthat the substance was

an irritant, not a corrosive, as there is no indication that neutralizing agents or other specialized equipment was used to clean up the alleged spill. Webgistix reserves its right to supplement this response as additional informationcomes to light. InterrogatoryNo. 4: Please describe evidence of any corrective or remedial action taken as a result ofthis matterincludingthe date such actionwas implemented. RESPONSE: Webgistix audited all inventory at each of its warehouses to identify any product that could potentially fall into a Hazmat category and immediately stop shipping any such product. Additionally, Webgistix asks all clients for a Material SafetyData Sheet ("MSDS") for any liquid product or product that otherwise could be considered Hazmat. Webgistix will review new products with UPS to confirm that such products do not qualify as Hazmat Materials and do not

- 6-have any special shippingrequirements. Additionally, Webgistix's air shippingis less than .1% of its LasVegas shipments (and approximately 2% ofthe company's shipments altogether). Each of Webgistix's warehouse manages received official Hazmat training. While not formal Hazmat certification training, Webgistix's Warehouse Managers also conduct monthly safety andtraining meetings for all warehouse employees, includingthose responsible for product intake and handling. While the safety topics vary, Hazmat training is one of the topics addressed. I have attached at Tab 3 the sign-in sheet for the January 2014 training meeting, which was dedicated exclusivelyto Hazmat issues. Webgistix remains open to require additional employeesto secure suchtraining. The facilities in question, however, are small in size, allowing the Warehouse Manager to have a solid handle on all operations. Atthe time ofthe incident, the Las Vegas facility was only 25,000 square feet. Ithas since expandedto 50,000 square feet. As a result ofthis incident

- and before the FAA provided its notice ofproposed civil penalty (August 6, 2013)- Webgistix made several changes to improve its operating procedures to prevent the inadvertent shipping ofHazmat materials. While no process is perfect, Webgistix has appropriate checks andbalances to enforce its policy. InterrogatoryNo.5: For eachrequest for admission not admitted or denied, please state indetail the reason for the denial ornon-admission. RESPONSE: As Webgistix contends that the substance may not actually be a Corrosive within the meaning ofthe Hazardous Materials rules, Webgistix does not admitthatitwas obligatedto act in accordance with any ofthe hazmat guidelines upon which the FAAbases the Complaint and its Requests for Admission. InterrogatoryNo.6: Please state the specific facts upon which you base your response that you are without lmowledge to admit or deny Paragraph II.6 of your Answer and Affirmative Defenses to Complaint.



### - 7 -RESPONSE: No witness from Webgistix was present in Louisville, KY on the date of the alleged incident at the moment the purportedly leaking package was identified; as a result Webgistix is without sufficient lmowledge to admit or deny the identity ofwho discovered any potential leak inthe shipment. InterrogatoryNo.7: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.7 of your Answer and Affirmative Defenses to Complaint. RESPONSE: Itis unknown ifthe contents were exactly as described inthis paragraphorifthe shipment contained additional products. As a result, Webgistix is without sufficient lmowledge to admit or denythe allegation. InterrogatoryNo.8: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.8 of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, by and through its employees, did not conduct any investigation into the alleged leak; as a result, Webgistix is without sufficient knowledge to admit or deny the approximate amount ofliquidthatmay ormay nothave leaked. InterrogatoryNo.9: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.9 of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, as only anintermediary shipper andnotthe product's manufacturer, is without

- 8 -sufficient knowledge to admit or deny the specific nature ofthe allegedly hazardous material at the center ofthe allegations in the Complaint. Additionally, the MSDS is internally inconsistent in labeling the product as a possibly corrosive substance while simultaneously describing symptoms, precautionary measures, treatment guidelines, and clean-up commensurate with an irritant substance, not a corrosive within the definition ofthe Hazmat guidelines. InterrogatoryNo. 10: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.lO of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, as only an intermediary shipper and notthe product's manufacturer, is without sufficient knowledge to admit or deny the specific nature ofthe allegedly hazardous material at the center ofthe allegations in the Complaint. Additionally, the MSDS is internally inconsistent in labeling the product as a possibly corrosive substance while simultaneously describing symptoms, precautionary measures, treatment guidelines, and clean-up commensurate with an irritant substance, not a corrosive withinthe definition ofthe Hazmat guidelines. InterrogatoryNo. 11: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.ll of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, as only an intermediary shipper and notthe product's manufacturer, is without sufficient knowledge to admit or deny the specific nature ofthe allegedly hazardous material at the center ofthe allegations in the Complaint. Webgistix also cannot admit or deny what papers mighthavebeenrequired for the shipment. InterrogatoryNo. 12: Please state the specific facts upon which you base your response that you are without

-9-knowledge to admit or deny Paragraph II.12 of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, as only an intermediary shipper and notthe product's manufacturer, is without sufficient knowledge to admit or deny the specific nature ofthe allegedly hazardous material at the center ofthe allegations in the Complaint. Webgistix also cannot admit or deny what papers mighthave beenrequired for the shipment. InterrogatoryNo. 13: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.13 of your Answer and Affirmative Defenses to Complaint. RESPONSE: Webgistix, as only an intermediary shipper andnotthe product's manufacturer, is without sufficient knowledge to admit or deny the specific nature ofthe allegedly hazardous material at the center of the allegations in the Complaint. Webgistix also carmot admit or deny what packagingmighthave beenrequired for the shipment. InterrogatoryNo. 14: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.14 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at 1ssue m the Complaint is not, in fact, corrosive within the meaning ofthe Hazmat guidelines. InterrogatoryNo. 15: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.l5 of your Answer and Affirmative Defenses to Complaint.

- 10-RESPONSE: There is evidence suggesting that the allegedly hazardous material at 1ssue m the Complaintis not, infact, corrosive withinthe meaning oftheHazrnat guidelines. InterrogatoryNo. 16: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.16 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at 1ssue m the Complaintis not, in fact, corrosive withinthe meaning ofthe Hazmat guidelines. InterrogatoryNo. 17: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.17 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at issue m the Complaintis not, infact, corrosive within the meaning oftheHazmat guidelines. InterrogatoryNo. 18: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.l2 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at 1ssue m the Complaint is not, in fact, corrosive withinthe meaning ofthe Hazmat guidelines. InterrogatoryNo. 19: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.l9 of your Answer and Affirmative Defenses to

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-Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at Issue m the Complaintis not, infact, corrosive withinthe meaning oftheHazrnat guidelines. InterrogatoryNo. 20: Please state the specific facts upon which you base your response that you are without lmowledge to admit or deny Paragraph II.20 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at Issue m the Complaintis not, infact, corrosive within the meaning ofthe Hazrnat guidelines. InterrogatoryNo. 22: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.l2 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at Issue m the Complaintis not, infact, corrosive withinthe meaning ofthe Hazmatguidelines. InterrogatoryNo. 23: Please state the specific facts upon which you base your response that you are without knowledge to admit or deny Paragraph II.23 of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at Issue m the Complaint is not, infact, corrosive withinthemeaning ofthe Hazrnat guidelines. InterrogatoryNo. 24: Please state the specific facts upon which you base your response that you are without

- 12-knowledge to admit or deny Paragraph II.24 (a) through (ff) of your Answer and Affirmative Defenses to Complaint. RESPONSE: There is evidence suggesting that the allegedly hazardous material at Issue m the Complaint is not, in fact, corrosive withinthe meaning oftheHazmatguidelines. InterrogatoryNo. 25: Please state the specific facts upon which you base your affirmative defense that "Pursuant to 49 U.S.C. 5123(c), the alleged circumstances of the incident do not warrant a monetary civilpenalty" as stated inyourAnswer and AffirmativeDefenses to Complaint. RESPONSE: Webgistix incorporates its Response to Interrogatory 4. As a foundational concern, Webgistix does not concede that the substance at issue in the Complaint is, in fact, a Corrosive substance. The MSDS is internally inconsistent in labeling the product as a possibly corrosive substance while simultaneously describing symptoms, precautionary measures, treatment guidelines, and clean-up commensurate with an irritant substance, not a corrosive within the definition ofthe Hazmat guidelines. Also, Webgistix fits within the description ofa category B business entity

- a business entity, which does not use orhandle Hazmatinthe course ofits regular business. The incident in question wasnot a result ofa conscious decisionto ship Hazmatmaterials; itwas anunintentional oversight because ofthe customer's misrepresentation (whether negligent or intentional) coupled with the nature ofthe consumer product, which was intended to be consumed in drinking water. Webgistix did not intendto ship Hazmatmaterials. Webgistix assumes the FAA'spositionis aresult ofamisunderstanding inthe language in Webgistix Customer Manual. The manual contains the following language: "Further, additional handling charges may be applied to the account for any hazardous material." This language is intended to justify charges Webgistix will levy ifit discovers, after the fact, that a customer has placedproducts withWebgistixthat classify as Hazmatmaterials, and Webgistixis then forced to

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-remove/dispose ofsuch products. Webgistix subsequently amended this language to clarify tl1at it does not, under any circumstances, accept Ha=atmaterials. The Matrix also addresses a number offactors the FAA should consider when assessing the penalty range. Most ofthese appear to favor a minimum penalty. For example, the product type (Class 8 PGII liquid (sodium chlorite diluted to 22.4%) with a small quantity (4 ounces) ("Mitigating factors may also exist fuat have not been adequately considered. For example, a shipment containing a de minims quantity ofmaterial.

..."). Anothermitigating factor is whether Webgistix reasonably relied on incorrect information from another source. Here, Webgistixrelied onfue representations ofthe Keavy's Korner as well

as the product labeling which included no Hazmat warnings. Webgistix's procedures were not perfect

- and that this incident would likely have been prevented with ilie redundancy ofthe amended procedures

- but the product type and overall misleading labeling resulted in ilie Webgistix employee not checkingthe actual product ingredients. Anofuer factor that should be given serious consideration is the corrective steps that Webgistix has taken to prevent future incidents- steps that were takenbefore ilie notice ofa civil penalty, including Hazmat training, amending the contract language with its customers, closer product inspection at intake (including demanding MSDS when appropriate) and utilizing the expertise ofits shipping partner UPS to screennewproducts. As the Guidelines state: "Systemic change intended to prevent future violations should be given greater consideration. Similarly, corrective action that commences upon the violator's first notice ofthe violation ordinarily is given greater creditthan corrective action fuat commences only after the Notice ofProposed Civil Penaltyhasbeen issued." REQUESTS FORPRODUCTION Requestfor Production No. 1: To the extent that any expert witness is expected to testify, reports and records that form the basis for this testimony.

- 14-RESPONSE: Mr. Gantt only reviewed documents produced by the FAA in its Discovery Requests. Webgistix reserves the right to supplement this response in the event that Mr. Gantt reviews additional reports orrecords. Request forProduction No.2: Copies ofany documents which Respondent intends to introduce into evidence and which have not already been submitted to the Agency. Please identify those documents which have already been submittedto the Agency. RESPONSE: None at this time; Webgistixreserves the right to supplementthis response. Requestfor Production No.3: Please provide evidence of any corrective or remedial action taken as a result of this matter. RESPONSE: Webgistixpreviously submitted suchevidence as atachmentsto correspondence. To the extentthat any additional documentary evidence comes withinWebgistix's possessionor control, Webgistixreserves the right to supplementthis response. Dated: June 5, 2015 SNELL & WILMER L.L.P.

. / // // By:



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**Pa~&i'** @fByrne NevadaBarNo. 7636 JustinA. Shiroff Nevada BarNo. 12869 3883 HowardHughes Parkway, Suite 1100 Las Vegas, NV 89169 Attorneys for Webgistix Corporation

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-CERTIFICATE OF SERVICE

I hereby certifY that a copy of the foregoing Webgistix Corporation's Responses to Federal Aviation Administration's Request for Discoveryhas beenmailedthis date by First Class Mail to the following: (Sent viaFirstClassMail Original and One Copy) Hearing Docket Clerk FAA, AGC-430, Suite 2W1000 WilburWright Building 600 Independence Avenue, SW Washington, DC 20591 (SentviaFirstClass Mail) RashawnRich George Office ofthe Regional Counsel, AS0-7 Federal Aviation Administration, Southern Region 1701 ColumbiaAvenue Suite 530 College Park, GA 30337

DATED June 5, 2015.

21699697.1

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