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Neal R. Gross and Co., Inc.

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 U.S. DEPARTMENT OF ENERGY

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 CENTRAL AIR CONDITIONER REGIONAL STANDARDS

 ENFORCEMENT WORKING GROUP

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 PUBLIC MEETING

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 Wednesday

 September 24, 2014

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 The Public Meeting met in Suite GH019, 1000 Independence Avenue, S.W., Washington,

D.C., at 9:00 a.m., Neil Eisner, Meeting

Facilitator, presiding.

PRESENT

NEIL EISNER, Meeting Facilitator

DAN ARNOLD, NORDYNE 

TIMOTHY BALLO, Earthjustice

JORDAN DORIA, Ingersoll Rand

GARY CLARK, Goodman Global 

RAY ELLIS, Lincoln Electric Cooperative 

GARY FERNSTROM, California Investor Owned 

 Utilities 

JOHN GIBBONS, Carrier Corporation 

STEVEN GOERING, U.S. Department of Energy, 

 General Counsel

DAVID HUNGERFORD, California Energy 

 Commission 

JOHN HURST, Lennox International

CHARLES McCRUDDEN, Air Conditioning 

 Contractors of America 

JON MELCHI, HARDI 
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PRESENT: (cont'd)

KAREN MEYERS, Rheem Manufacturing Company

ELIZABETH NOLL*, Natural Resources Defense 

 Council

DOUG RAWALD, U.S. Department of Energy, 

 General Counsel

BRYAN ROCKY, Johnson Controls 

HARVEY SACHS, American Council for an 

 Energy-Efficient Economy

AMY SHEPHERD, Air-Conditioning, Heating and 

 Refrigeration Institute

CHARLES WHITE, Plumbing-Heating-Cooling 

 Contractors - National Association 

ALSO PRESENT 

KARIM AMRANE, Air-Conditioning, Heating, and 

 Refrigeration Institute

LAURA DEGITZ, Navigant Consulting

ALEX KROWKA, Department of Energy 

ANIRUDDH ROY, Goodman Manufacturing Company

ERIC STAS, American Council for an Energy-

 Efficient Economy

MEG WALTNER, Natural Resources Defense 

 Counsel

VINCENT MUCCIOLA*, National Comfort Products

*via teleconference 
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1 P-R-O-C-E-E-D-I-N-G-S

2 9:02 a.m.

3 MR. EISNER: All right. Why don't we

4 get started. An unusual morning. We don't have

5 the mics like we would have, as we would have in

6 the other room. So --

7 PARTICIPANT: Should I shut this?

8 MR. EISNER: Yeah, that would be good,

9 I think. Part of what we've got to watch out,

10 again, are the side conversations, because the

11 little microphones that are spread around will

12 pick that up and make it very difficult for the

13 court reporter to figure out what's supposed to

14 be on the record and what's not. So, let's be

15 careful of that.

16 Doug, as you know, teaches. He taught

17 last night and he will be here this morning by

18 about 10 o'clock. So, I thought we were going to

19 start off --- I thought there would be a couple

20 other people here from DOE and we could start off

21 with one of the issues that was on the action

22 items that needs taken care of during the
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1 meetings, but instead let's perhaps start off

2 with the first item that's on this list that

3 we've distributed.

4 It's AHRI and working on the FTC

5 label. So, we've got a report on that and what

6 happened between meetings.

7 MS. SHEPHERD: I think that would be

8 best to wait for Karim. He's been working on

9 that.

10 MR. EISNER: Okay.

11 MS. SHEPHERD: So, he should be -- he's

12 coming today.

13 MR. EISNER: Okay. Manufacturers,

14 we're also going to have some discussions between

15 meetings on --- they're going to go back and talk

16 to others about whether they could give more

17 details, but also I believe that they'll have

18 their full support for their proposal on the

19 label. Somebody want to talk on that?

20 MR. ROCKY: Yeah, I guess I can. This

21 is Bryan Rocky. So, there was discussions and

22 not -- we haven't caucused to start, but I
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1 believe everybody had a chance to go back and

2 talk to the appropriate engineering and

3 manufacturing groups.

4 So, what was proposed and discussed,

5 I think, is very doable. It's still a situation

6 that each manufacturer based on their own system

7 requirements and processes, it's not the same

8 implementation, time frame and things that

9 everyone is looking at. I do have a couple of

10 samples of what I can do with our rating plates

11 showing some of the proposed terms that we had

12 talked about. I did not forward that by email,

13 but I do have some samples.

14 The discussions: turns out that we

15 came to a consensus on agreement on term. And

16 so, I'm going to hand a couple of these things

17 around just to --- I'll just send them in

18 different directions here.

19 The idea is that the term on rating

20 plates or an additional label that would be

21 located near or adjacent to the rating plate

22 would be something in the verbiage of install
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1 prohibited in the southwest, or install

2 prohibited in southwest and southeast.

3 And there was discussion about adding,

4 if available room, text that would say something

5 about, for information, see DOE website. So,

6 that could be, see www.productinfo.energy.gov. 

7 So, I think every manufacturer, and

8 you guys correct me if I'm wrong, but this is a

9 doable thing and we can proceed forward. I did

10 not forward as well, but I have some pictures of

11 what these rating plates would look like on a

12 typical York air conditioner.

13 And with the font size that I have

14 available, these are readable from 12 to 15 feet

15 away from the unit. Not saying that that's, you

16 know, we did not come with a standardized font

17 size. Again, it depends on what each

18 manufacturer has available for them.

19 I have the luxury of a lot more real

20 estate and easier to modify rating plates than I

21 think some of the other guys -- other

22 manufacturers have today.
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1 MR. EISNER: Do you think we could

2 agree to a description that would fit all the

3 manufacturers?

4 MR. ROCKY: So the ---

5 MR. EISNER: You're saying different

6 font sizes depending on space.

7 MR. ROCKY: Yes.

8 MR. EISNER: So, some term like

9 readable from a foot away or two feet away-type

10 things?

11 MR. ROCKY: So, in the manufacturers'

12 discussions which included discussions with the

13 AHRI, URC, Unitary Regulatory Committee, that was

14 not brought up as a minimum font size or

15 readability. It was just brought up as

16 standardized text that all the manufacturers

17 could agree on.

18 Again, I think it makes a big

19 difference whether a manufacturer has the ability

20 to put something on the rating plate versus

21 having to do another label. And the bigger the

22 label, the more costly it's going to be for that
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1 manufacturer to make a change.

2 MR. EISNER: Is there a reason you

3 couldn't make the existing label bigger? Do you

4 have to find a different spot for the expanded

5 label?

6 MR. ROCKY: Yeah. So, it's a

7 combination, Neil, of size of the label, location

8 and then the processes that different

9 manufacturers have. In our case, the sample is

10 going around. This is a printed on-demand at the

11 assembly line-type label.

12 I happen to have the luxury that we

13 went through a standardization process about a

14 year ago. So, this is how much room I've got. 

15 There are other manufacturers that do not have

16 the luxury of this much real estate or this size

17 or this type of label today. So, there are

18 definitely issues with space, formatting, size of

19 fonts that can be put on different products.

20 MR. EISNER: And, again, and I'd like

21 to open it up to other suggestions or ideas,

22 maybe it's simply agreeing to, as close to the
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1 existing label as possible, depending on space on

2 the system, et cetera, but some text that would

3 give some idea about what is expected. Do other

4 people have ideas? Does anybody else have an

5 issue here?

6 MR. HURST: Yeah. This is John Hurst

7 from Lennox. I think it's probably reasonable

8 that, it is reasonable that we commit to a

9 certain size of font and that we, you know,

10 attempt to either put it on the label, or if it's

11 not on the label, reasonably close to where

12 somebody reading the nameplate would see it. We

13 don't want to hide it. It needs to be in an

14 easily recognizable location. That said, you

15 know, to Bryan's point, a lot of times it's just

16 real estate on the --- where you can affix the

17 actual nameplate.

18 So, I think we all have to come back

19 with what our specific proposals are, but I think

20 the wording in the agreement needs to say

21 something to the effect that it's going to be

22 near the nameplate, if not on the nameplate, a
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1 certain size where you can read it.

2 MR. FERNSTROM: So, this is Gary for

3 the California IOUs. I know we're working on the

4 details, but this is a major, major concession,

5 for lack of a better term, on the part of the

6 manufacturers that's going to make it really easy

7 to identify qualifying units in the field. So,

8 that's very much appreciated.

9 MR. EISNER: And that's good to hear. 

10 Now, as someone who is praising the industry for

11 doing that, is there some minimal language you

12 think would be fine that would be okay to the

13 manufacturers?

14 MR. FERNSTROM: Because of the fact

15 that the manufacturers have agreed to do this, I

16 want to be very open and flexible with respect to

17 how they do it.

18 MR. EISNER: Other comments or

19 suggestions? Harvey.

20 MR. SACHS: This is Harvey and I very

21 much want to support the concept of label and the

22 minimum font size. Years, decades ago when I was
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1 thinking about doing presentations, if I recall

2 correctly, the guideline was what was readable

3 was about the height in inches equivalent to the

4 audience distance in feet.

5 And I think that roughly translating

6 that 10 to 12-foot readability is a very good

7 goal and that would translate then to something

8 like 72 point, or one-inch type.

9 Now, I may be remembering wrong, but

10 I think that goal of being able to read the label

11 at a dozen feet is the kind of visual impact that

12 the manufacturers have suggested as I interpret

13 it is required.

14 MR. FERNSTROM: So, Harvey. This is

15 Gary. I thought the font size needed to be

16 inversely proportional to the audience's age.

17 (Laughter.)

18 MR. SACHS: I'm sorry, Gary. My

19 auditory assistance is not working and I'm hard

20 of listening.

21 MR. EISNER: Do we want to put some

22 words up on the screen and see if we can agree? 
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1 I mean, is some feeling here that the rule would

2 simply say the manufacturers showing clear

3 language either on the existing label or another

4 label easily accessible by the consumer, or

5 something like that, with the following kind of

6 information.

7 MR. FERNSTROM: I might just note for

8 the amusement --- this is Gary again --- of the

9 group that the folks in California worked with

10 the spa manufacturers to develop a voluntary

11 label. The industry actually proposed it and put

12 it forward.

13 Turns out the label is installed

14 inside behind the access panel of the spa. So,

15 you just absolutely can't see it from the

16 outside. It's not very helpful. We're in the

17 process of trying to rectify that.

18 MR. EISNER: Other thoughts?

19 MS. NOLL: So, I think the last time

20 we did discuss, though, that the language would

21 go on the nameplate. And if there wasn't room,

22 it would go right next to it. So, that should
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1 probably be part of ---

2 MR. EISNER: All right. What I'm

3 hearing is ---

4 MS. NOLL: -- to Gary's point.

5 MR. EISNER: What I'm hearing is that

6 some of the manufacturers may not have space next

7 to the label. Do you want it to say next to the

8 label, or as close as possible?

9 MR. SACHS: This is Harvey and I want

10 it to be on the outside of the condensing unit.

11 MR. EISNER: Okay. Sure.

12 MR. SACHS: And I think we have to

13 leave some discretion, but I think guidance such

14 as visible from the access panel to electric

15 components might be helpful, but I'm offering

16 that as a strawman for response.

17 MR. EISNER: And is that acceptable to

18 the manufacturers that it has to be on the

19 outside?

20 GROUP RESPONSE: Yes.

21 SPEAKER: That's fine.

22 MR. HUNGERFORD: And didn't someone use
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1 the term adjacent? It seems like that is

2 appropriate.

3 THE COURT REPORTER: I'm sorry. Who is

4 speaking?

5 MR. EISNER: That was Dave Hungerford.

6 THE COURT REPORTER: Thank you.

7 MS. MEYERS: So, this is Karen with

8 Rheem. We're all going to try to get it on the

9 nameplate. The last thing we want is another

10 label, but that may take some time and take some

11 reformatting.

12 So, I think, you know, the intent will

13 be to get it on the nameplate, but it may not be

14 possible especially by January 1st. So, whether

15 it's adjacent, whether it's next to, whether it's

16 outside on the condensing unit, I think you guys

17 are going to have to give us a little leeway.

18 I don't know where ours will be going

19 on all units. Larger units it's not going to be

20 an issue, but, you know, I just would ask that we

21 have a little flexibility. We want it on the

22 outside of the unit. When you're doing a
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1 manufacturing process, you don't want to have to

2 run around on the other side of the unit and put

3 on the other side.

4 So, you're going down this assembly

5 line. We're all going to try and get it either

6 on the nameplate, or as close to it as possible,

7 just for manufacturing purposes.

8 MR. FERNSTROM: So, this is Gary again. 

9 Having expressed flexibility in this from the

10 California Utilities' point of view, I do think

11 it's important that it be outside somewhere, yes.

12 MR. SACHS: This is Harvey and I'm

13 certainly comfortable with the language that

14 Karen and others have suggested that it be as on

15 or as near the nameplate as possible.

16 MR. EISNER: Okay. Anybody object to

17 that? The DOE has flexibility to take action if

18 they believe it could have been closer to the

19 original label, but it seems like everybody

20 doesn't feel this is going to be a problem.

21 So, I'm just trying to make sure we

22 have agreement on the language, because this is
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1 going to have to be something that we look at. 

2 So, on or as near to the unit's nameplate as

3 possible.

4 MS. MEYERS: Correct.

5 MR. EISNER: Any objections to the

6 language that's up here? Again, we can come back

7 to these things as we start to package and put it

8 all together. All right. That's a good way to

9 start off the meeting. We can give everybody a

10 break. It's a quarter after 9:00.

11 (Laughter.)

12 MR. EISNER: Okay. The next thing I

13 have on the list is manufacturers working on

14 alternative penalties to fines from DOE. I think

15 someone has to report on that.

16 MS. MEYERS: Can you repeat that, Neil?

17 MR. EISNER: It was manufacturers

18 working on alternative penalties to fines from

19 DOE.

20 MS. NOLL: So, I think it was along the

21 lines of alternatives to civil penalties that

22 could be put in place that manufacturers could do
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1 that would, work within the supply chain.

2 MS. MEYERS: In addition to the

3 prohibited act?

4 MS. SHEPHERD: Yeah, I'm not really

5 following you.

6 MS. MEYERS: Absent effort.

7 MS. NOLL: And we -- this is in

8 prohibited acts for other parties, what can

9 manufacturers do that would have influence on the

10 chain?

11 MR. HURST: Stop selling product.

12 (Laughter.)

13 MS. MEYERS: That's in the prohibited

14 act.

15 MR. HURST: Yes. I think we need to

16 caucus on that point.

17 MS. MEYERS: Yes. We -- that wasn't

18 something we discussed.

19 MR. SACHS: This is Harvey. Neil,

20 before we caucus on that, Karim has joined us.

21 MR. EISNER: Okay, Karim. Let's go

22 back to your issue. On the FTC label, you had
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1 some take-home work to do.

2 MR. AMRANE: Okay. All right. There

3 are two proposed labels and the one on the screen

4 is very similar to the current FTC label, but

5 it's only for the south and the southwest.

6 Now, those labels were developed on

7 the premise that DOE will issue the guidance

8 document that we discussed in previous meetings

9 that manufacturers will have to show the label

10 the least efficient product combination.

11 So, that one is for the south and the

12 southwest. We've had SEER. It's basically the

13 same version of the FTC, the current FTC label, 

14 except now that the range of comparability start

15 at 14 SEER because that's what is available in

16 the south and the southwest. And then you have

17 the EER table which shows, you know, what's

18 acceptable in the southwest.

19 MR. FERNSTROM: Karim, this is Gary. 

20 This is a little off the subject, but is there

21 really 26 SEER?

22 MR. AMRANE: Correct.
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1 MR. FERNSTROM: My goodness. That's

2 twice as efficient as the least efficient,

3 practically.

4 MR. AMRANE: That's what's in the ---

5 MR. FERNSTROM: Thank you.

6 THE COURT REPORTER: I'm sorry. I only

7 have microphones on the table, sir. So, if you

8 could stand a little closer to them, then I can

9 pick you up. Thank you.

10 MR. AMRANE: Not sure where the

11 microphones are, but ---

12 THE COURT REPORTER: If you stand right

13 there, actually, that will be fine. 

14 MR. AMRANE: Okay, good. So, yes,

15 those are possible units. 

16 MR. FERNSTROM: Thank you.

17 MR. AMRANE: And then you have the

18 second label, and that's --- this label would be

19 only for the north. And, again, in this case the

20 minimum is different, 13 SEER, but in this case,

21 for example, this condensing unit is matched with

22 several codes that range --- the SEER will range
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1 from 13 to 14.2.

2 But even if it's --- there is one

3 combination at 14.2, those units would only be

4 allowed in the north, not in the south, because

5 the least efficient is 13 SEER.

6 MR. SACHS: What's the fine print

7 below the notice?

8 MS. NOLL: The map.

9 MR. SACHS: Okay, good. Thank you. 

10 This is Harvey. Thank you, Karim.

11 MS. NOLL: This is Elizabeth. So, how

12 is this different or what would we need to be

13 proposing to FTC to ---

14 MR. AMRANE: Because FTC, so far, has

15 only one label. And for FTC, a unit comes, you

16 know, condensing unit would be match with

17 different codes that will give you, for example,

18 from 13 to 14.2. If you had one combination at

19 14 for FTC, that's a combination that is

20 acceptable in the south.

21 And now, what we're saying based on

22 the guidance that DOE will issue would say, no,
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1 that's not the case, because the least efficient

2 is 13. So, would not be allowed in the south.

3 MS. MEYERS: So, it's kind of a double4 check. This is Karen Meyers with Rheem. So, if

5 that minimum number right there is 13, it can't

6 be sold in the south.

7 Or the southwest. So, it's kind of a

8 double-check and it also has the map on there. 

9 So, that will be helpful to homeowners. So,

10 which is really what the Energy Guide label is

11 intended to do, but that can be torn off. We

12 know that.

13 So, that's why, you know, the

14 manufacturers decided to, you know, add the, you

15 know, or offer the suggestion to apply the extra

16 label that we just went over. But if the minimum

17 on that Energy Guide is 13, then --- and that's a

18 big font, Harvey. So, that should help you.

19 (Laughter.)

20 MR. SACHS: Thank you.

21 MS. MEYERS: So, that's a really big

22 font right there, in bold print. So, for any
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1 unit to legally be installed in the south or the

2 southwest, the minimum on that label has to be a

3 14, per the DOE guidance that we hope to be

4 receiving very soon.

5 MR. ROCKY: So, this is Bryan Rocky.

6 The other thing that we have just so

7 everyone else understands this, this has the

8 potential to drastically increase the number of

9 labels a manufacturer has to put on product.

10 Today, we don't have a range. We just

11 have one number for those loose coil systems. 13

12 or 14 or whatever it is. In this case, based on

13 each manufacturer's rating system match-ups, the

14 high end of that range will change model to

15 model, unit to unit, product family to product

16 family, potentially.

17 So, not to underestimate it, this is

18 another potential cost for manufacturers

19 especially if you're not --- if you're having to

20 pre-print these labels and keep inventory, which

21 is, again, what most manufacturers do today.

22 So, there would be in one product
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1 family I have today, there is in seven basic

2 models of a 13 SEER unit, I have five different

3 labels I have to put together now.

4 And keeping track of those for the

5 model they go on is done through a bar code scan

6 system, but the opportunity to put the wrong

7 label on is greatly multiplied the more labels

8 you have. And that's for each family.

9 So, in my case, I go from a single 13

10 SEER AC label and a single 14 SEER label to

11 somewhere between nine and 11 labels at this

12 point. So, this is a great idea, but it doesn't

13 make it easier for manufacturers.

14 MR. DORIA: This is Jordan with

15 Ingersoll Rand, and I want to just build on that

16 is, you know, we're still supporting the

17 approach, but the deeper we dig into it, the more

18 complexity it seems to bring up for us, in terms

19 of both deliberation of labels and, by

20 extension, deliberation of models, which is

21 something that typically you strive to keep in

22 check.
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1 So, we're still supportive, but I do

2 want to echo it is more probably of a burden than

3 we thought a couple weeks ago. Again, we're

4 still supportive of it, but I do think it's

5 important for everyone to realize that.

6 MR. EISNER: Do you have estimates that

7 you can supply on what you think would be the

8 extra cost or burden? Again, because of things

9 like the Paperwork Reduction Act, it's going to

10 have to be addressed in the rulemaking document.

11 MR. SACHS: Neil, this is Harvey and I

12 think I'm a little bit concerned about the

13 question. One, because they would have to get

14 together to discuss a kind of response that I

15 guess is each person's answer through AHRI,

16 presumably, but also because we're hearing

17 consensus support from the manufacturers, which I

18 translate as this is a pain in the butt, but it's

19 the least cost approach we can think of for the

20 entire system, including the downstream

21 participants. And, therefore, we're willing to

22 do it.
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1 It's a consequence of the agreement

2 reached five years ago on consensus, it's a

3 consequence of the DOE rulemaking and it's

4 stepping up to the plate. So, I think that in

5 terms of a rulemaking and paperwork reduction, I

6 would hope that OMB would give some deference to

7 what comes out of this negotiated rulemaking.

8 MR. EISNER: I don't disagree with what

9 you're saying. And if I was sitting on either

10 side of the table on this issue, I would agree

11 that OMB should believe that and should accept

12 it. That's not necessarily what will happen.

13 If DOE is willing to try, that's fine,

14 but they are required to talk about the total

15 burden hours imposed by a regulation, whether or

16 not it is acceptable. That's why I'm asking now

17 if people can give estimates that they can rely

18 on that will help them do their job.

19 MR. SACHS: I certainly appreciate your

20 bringing it up now so we don't get sandbagged

21 later with some other acceptable phrase.

22 MR. MELCHI: Harvey, this is Jon from
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1 HARDI. Just, I think to Neil's point, I forget

2 which industry it was recently the regulatory

3 body and the industry had come to an agreement on

4 a rule and OMB kicked it back because of the cost

5 even though there was an agreement between

6 industry and the regulatory entity. So, I think

7 that's probably what Neil is alluding to.

8 MR. EISNER: And I'm talking from the

9 same kind of experience when I was in the

10 government --

11 MR. MELCHI: Yes.

12 MR. EISNER: -- where I actually said

13 to them, so, you think you know better than

14 industry whether this is going to be very costly

15 or too burdensome or not worth doing?

16 The other side of it is, is a

17 political matter. I think we are all sensitive

18 to the issue that no matter how much everybody in

19 this room may agree, somebody else is going to

20 say, oh, DOE just issued another $10 million

21 rule, or whatever.

22 Everybody seems to be in agreement. 
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1 That is very, very good. I'm suggesting that DOE

2 may still need those numbers. And if those

3 numbers come from industry and are acceptable to

4 everybody else around the table, that should make

5 it much easier to convince the powers that be.

6 And I hear your arguments. It's not

7 my job to tell you you've got to have it. I'm

8 just trying to make sure we all know what may be

9 expected, especially since Doug isn't here.

10 MR. SACHS: So, it involves to a

11 request --- this is Harvey again. Can the

12 manufacturers give us a round number as a guess

13 of what compliance would cost?

14 MR. EISNER: It might even be, you

15 know, several manufacturers or a handful, a few

16 manufacturers. If this is not information you

17 want to share publicly, giving that information

18 to DOE so that DOE can say one manufacturer said

19 it would add 15 percent to their cost.

20 MR. CLARK: This is Gary Clark from

21 Goodman. If nothing else, I think it's probably

22 good to try to gather that information for future
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1 rulemaking, you know. If we start talking about

2 more regional standards in the future,

3 potentially, it would be good to understand all

4 the costs, right?

5 And this is something that I don't

6 think was anticipated in the original

7 discussions. And so, it would be good to capture

8 that, so that we have that in case we ever think

9 about regional standards in the future.

10 MR. EISNER: And this is not something

11 we have to resolve here today. I think it's

12 something people should think about we can then

13 talk to --- we can all talk to the DOE staff

14 about what it is they're going to need.

15 One of the reasons for one of the

16 advantages of using the negotiated rulemaking

17 process is it's easier for the Agency to get the

18 data it needs for things like its cost-benefit

19 analysis and paperwork reduction analysis.

20 MR. DORIA: This is Jordan with

21 Ingersoll Rand. I think it makes sense to flag

22 it for later, but we should make sure to fold in
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1 any other costs that we as OEMs at least expect

2 to bear as a result, do it all at once, provide

3 it all to AHRI and have them aggregate it and

4 just do that the one time.

5 MR. EISNER: I agree. That's a good

6 point. Any other questions, concerns or issues

7 on the subject of the labels? Any questions

8 about how --- and I've heard what I think is a

9 legitimate concern that there can be more

10 mistakes made when you have more labels to put on

11 a unit.

12 So, how this is going to be addressed

13 to ensure that mistakes are not made or kept to a

14 minimum.

15 MR. BALLO: This is Tim at

16 EarthJustice. I just had one thing to flag on

17 the label. It's not something I think this group

18 needs to resolve.

19 I just wanted to highlight that when

20 FTC, their recent proposal to amend the label for

21 split system central air conditioners to remove

22 capacity, which I think this mock-up of the label
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1 does reflect that proposed change, several of the

2 groups on the efficiency advocate side, as well

3 as several other groups not represented here,

4 submitted comments urging FTC to consider making

5 capacity presented on the label as a range also,

6 rather than eliminating it from the label.

7 It's not something I think we've

8 discussed with the manufacturers. So, I don't

9 think it's something we need to resolve either,

10 just flagging that if we agree to this label it's

11 sort of --- we haven't addressed that separate

12 issue and I don't think we need to address it in

13 this forum.

14 MR. EISNER: Other comments?

15 MS. NOLL: So, this is Elizabeth. I'd

16 like to go back to my original question of how

17 does this change, and does DOE's guidance impact

18 FTC in a way that they would revise the label, or

19 do we need to be having -- does that need to be

20 part of this conversation for what needs to be

21 changed?

22 MR. AMRANE: We presented to FTC
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1 similar label before, and FTC had some -- let us

2 know they had concern about it because it was --

3 the other label, there was concern that, you

4 know, 14.2 units, for example, would not be

5 allowed in the south where, in fact, it's 14.2. 

6 So, but the guidance that DOE is proposing to

7 issue will abide by that.

8 MS. NOLL: Right.

9 MR. AMRANE: So, yes, it will depend on

10 the DOE guidance.

11 MS. NOLL: Guidance would require FTC

12 to make modifications.

13 MR. AMRANE: Exactly.

14 MS. NOLL: Okay.

15 MR. AMRANE: So, it's very important

16 that DOE should issue it. 

17 MR. EISNER: Other questions? 

18 Everybody comfortable with this approach then?

19 Okay. The next issue I see is for the

20 distributors. They're going to bring back the

21 working group's, quote, violation for

22 distributors.
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1 MR. MELCHI: This is Jon from HARDI.

2 I think in the talk of the last

3 meeting there was a change that we made before we

4 left. So, if you could bring that definition up,

5 that would be helpful.

6 (Off record comments.)

7 MR. EISNER: Which --

8 MR. MELCHI: Okay. That's what we

9 ended up changing it to.

10 MR. EISNER: Okay.

11 MR. MELCHI: So, I met with our board

12 of directors last week -- this is Jon Melchi from

13 HARDI and I met with our board of directors last

14 week and we ended up coming up with -- I can't

15 believe we're going to do this, but really two

16 kind of separate violations that could occur for

17 the distributor.

18 We list right here it shall be a

19 violation for a distributor to knowingly sell a

20 product to a contractor or dealer with knowledge

21 that the entity will sell or install the product

22 in violation of any regional standard applicable
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1 to the product, you know.

2 The feedback that I got from my

3 members was if you, you know, if you want to put

4 that in there, you know, they're probably not

5 going to fight too much on it, but they don't

6 think they're going to know it.

7 And if they think it would be better

8 off if it was somehow worded towards -- and this

9 relates to the contractors and if there is a --

10 some sort of a -- generally using the term

11 "Blacklist" or a contractor that we know is

12 violating the law, we would rather it read that

13 if our members somehow know that there's somebody

14 that they're not allowed to sell, that gives us

15 more certainty than knowingly sell a product to

16 a, I mean, we're just likely not to have that

17 knowledge.

18 So, I mean, if people want to put it

19 in there, that's fine. We're not likely to have

20 that knowledge.

21 We would probably feel more

22 comfortable with knowledge of who we can and
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1 cannot sell a product to if that's where we end

2 up going.

3 The second violation that our members

4 thought would be under this umbrella would be

5 failure to provide the Department records upon

6 request to assist with the investigation of a

7 prohibited act.

8 MR. EISNER: Okay. Comments? 

9 Questions? And what was the response on that?

10 MR. MELCHI: The response from our

11 members was there are certain records that we

12 have, and I communicated this to Doug and I know

13 he'll be here a little later, there are certain

14 records that we have that our members feel like

15 in order to assist the Department with an

16 investigation, we need to provide to the

17 Department to have them.

18 Now, there are certain records that we

19 don't carry maybe to the -- as specific as some

20 would like, but I think those records that we

21 have -- and I've laid out for Doug kind of what

22 we do have, our members are fine keeping and
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1 making available upon request, you know, with

2 knowledge that adding additional records or

3 tweaking an ERP system is a significant cost

4 which of course goes into the scoring.

5 But, you know, I think our members are

6 aware that during the course of an investigation

7 that, quite frankly, that DOE can subpoena their

8 records anyways. So, you know, let's at least

9 have a boilerplate of what we need to be keeping

10 to aid with that investigation.

11 MR. DORIA: Jon, this is Jordan,

12 Ingersoll Rand.

13 I think that's good and appreciate

14 that you guys went back and got some clarity

15 there.

16 Just one thing you said that failure

17 to provide records will be a prohibited act, not

18 just a violation; is that right?

19 MR. MELCHI: No.

20 MR. DORIA: Okay.

21 MR. MELCHI: This is under the context

22 of violation.
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1 MR. DORIA: Okay. That's what I wanted

2 to hear.

3 MR. MELCHI: Under the context of

4 violation.

5 MS. SHEPHERD: This is Amy Shepherd

6 from AHRI.

7 So, the point of defining a violation

8 is because that's what the manufacturers need to

9 know.

10 So, like this just struck me as you

11 were talking about the record retention, then

12 that's saying that the manufacturers would have a

13 prohibited act for knowing to sell to somebody

14 who is failing to provide their records to DOE?

15 Is that the effect?

16 MR. MELCHI: Yes.

17 MS. SHEPHERD: And so for the records,

18 then, you're not open to a prohibited act on

19 that, it would just be the violation on that one

20 as well.

21 MR. MELCHI: Yes.

22 MR. DORIA: Well, this is Jordan with
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1 Ingersoll Rand.

2 Just to clarify, I think that -- the

3 failure to provide records would potentially have

4 to be determined to be routine, right?

5 MR. MELCHI: Yes.

6 MR. DORIA: Unless it was one in the

7 same, which could be a decision, but that hasn't

8 been made yet.

9 MR. MELCHI: Yeah, and I don't know

10 that -- I don't, you know, I don't know that my

11 members are -- I don't get the sense that my

12 members necessarily felt like somebody needed a

13 freebie on providing records, you know.

14 It's pretty basic. The request is

15 made. You either provide the records, or you

16 don't.

17 MS. SHEPHERD: So, this is Amy again.

18 So, what's the point of adding it as

19 a violation? Because if it's not a prohibited

20 act, DOE can't take any action against a

21 distributor for that.

22 So, that's just putting -- in my view,
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1 it seems like it's just putting another burden on

2 the manufacturer to say not only is it you can be

3 liable if you sell to someone who is doing this,

4 but you also can be liable if you sell to

5 somebody who's not providing records to DOE.

6 MR. MELCHI: Yeah, and I think that was

7 -- we were asked to come back with where we were

8 on this. I'm telling you where we're at on it.

9 Manufacturers have agreements with

10 their distributors that can include

11 record-keeping requirements, and oftentimes do. 

12 And so, that's where we're at on this.

13 MR. DORIA: So, this is Jordan with

14 Ingersoll Rand again.

15 I think there's another -- potentially

16 another way to look at that and it gets back to

17 the issue of who determines, you know, the

18 violation and in what capacity and who's

19 informed?

20 I mean, I think as I understand it,

21 what we're saying is that for the sake of

22 discussion if a single failure to provide records
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1 pursuant to an investigation and that were

2 determined by the Department, and we're saying

3 that one time would be effectively routine, then

4 that means we, as manufacturers, could not sell

5 to that party.

6 Presuming that DOE made that

7 determination publicly, that wouldn't mean that a

8 specific OEM couldn't provide it. It would mean

9 that no OEMs could sell product to that person.

10 So, that sounds like it's --

11 MR. EISNER: Can I ask for a

12 clarification here? We're talking -- I think

13 we're talking about two different things.

14 The statute is talking about the

15 violation being a violation of the standard, not

16 a records requirement.

17 When you talk about making a failure

18 to provide records being a prohibited act or just

19 a violation, are you intending to bring into the

20 record-keeping thing a knowingly or routinely

21 violate standard that is applicable I think only

22 to the violation of the energy standard right now
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1 under the statute?

2 Am I missing something?

3 MR. SACHS: Neil, maybe we can circle

4 back after we've heard from all the parties.

5 MR. EISNER: That's fine. I'm just --

6 I'm confused as to what was being discussed here. 

7 If others all understand it, that's fine.

8 MR. WHITE: Well, this is Chuck White

9 with PHCC and my attempt at clarifying it, the

10 prohibited act pertains to routine violators.

11 So, we need to know what they did

12 that's a violation. So, we've created these

13 things -- or attempting to create these things,

14 but that doesn't mean that if you did it once,

15 you're a routine violator.

16 It just means you did it once and,

17 yet, we have yet to tackle that 800-pound gorilla

18 of what "routine" means.

19 So, if we know it's a violation, we

20 now know the list of things that you did that are

21 wrong. Then we have to decide is it once? Is it

22 twice? Is it a hundred times? Is it -- so, the
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1 routine violator is only in the manufacturer

2 language. 

3 It's not in the distributor and it's

4 not in the contractor, because it's defining the

5 second part of that routine violator. It's

6 defining "violation."

7 Does that help clarify kind of where

8 we're going? The contractor or the distributor

9 to be a routine violator, has to do these things

10 and has to do them however many times, yet to be

11 determined.

12 Does that help?

13 MR. EISNER: From my perspective, it

14 helps with respect to the distributor violation.

15 Now, if we're saying the distributor

16 -- distributors don't agree that that violation

17 should be as a result of a prohibited act, I

18 understand it, but I thought it was coming up in

19 the context of failure to provide the records.

20 MR. McCRUDDEN: This is Charlie with

21 ACCA.

22 I think if we go to the next slide, we
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1 get to record retention and production. Now, I

2 don't -- this slide isn't broken out the same way

3 the previous one was with prohibited act or

4 violation, but it may be more appropriate to put

5 a similar framework, or it may not be, you know,

6 if we don't want to look at record retention and

7 production as a prohibited act or failure to

8 provide it as a prohibited act and only just a

9 violation.

10 I don't know if that's --

11 MR. EISNER: Well, if record retention

12 -- failure to provide records upon request has

13 nothing to do with whether this happens

14 routinely.

15 So, the way I read this, one time you

16 fail to do it, it's a prohibited act. If you

17 make it a prohibited act, the Agency can take

18 action.

19 MR. McCRUDDEN: Right. And I think

20 that's what Amy was suggesting and the way Jon

21 was sort of constructing this.

22 Correct me if I'm wrong.
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1 MS. SHEPHERD: No, I just -- yeah, I

2 was just trying to figure out what the -- kind of

3 the point of it is. Because if we -- which is,

4 you know, which is fine, but I think as to what

5 Jordan was saying, the only way a manufacturer is

6 ever going to know that a distributor did not

7 provide a request to DOE is if DOE somehow makes

8 that public.

9 MR. McCRUDDEN: Right.

10 MS. SHEPHERD: Because we will never

11 know. I mean, manufacturers will never know that

12 DOE made a request to anybody and they didn't

13 provide it.

14 So, that can't, I mean, and in that

15 case a dealer would have to just somehow make

16 that public to everybody so everybody would know.

17 I just don't -- otherwise I don't see

18 how that can be a violation that manufacturers

19 could be held responsible for.

20 MR. MELCHI: This is Jon from HARDI.

21 Putting on my hat receiving some

22 information from Doug over the week, you know, I
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1 think he's -- at least what I got was

2 requirements on contractors, distributors and

3 manufacturers for a certain type of records.

4 My understanding was that if they're

5 going to do an investigation, it's going to go up

6 the entire chain.

7 And, you know, if a manufacturer were

8 to get a records request from DOE regarding a

9 product or something along those lines, it's

10 reasonable that they would have an idea of who

11 the distributor was that was dealing with that

12 contractor or at least in that general market

13 vicinity where they could send out a notice to

14 the distributors in that general market vicinity

15 and say, hey, there's an investigation ongoing. 

16 If you get a request, comply with it.

17 MS. SHEPHERD: We're not going to know

18 -- the manufacturers aren't going to know whether

19 you did or not.

20 MR. MELCHI: Well, I --

21 MS. SHEPHERD: I think this is probably

22 -- we'll probably have to defer to Doug a little
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1 bit, because DOE doesn't make -- I think DOE's

2 premise when they start an investigation is they

3 keep it close hold --

4 MR. MELCHI: Yeah.

5 MS. SHEPHERD: -- right, for the

6 purposes of the investigation. It's not just

7 open to the world.

8 So, and in this case until DOE

9 actually -- we would have -- manufacturers

10 somehow have to be notified by either the

11 distributor or DOE that they had refused to

12 comply with the record retention before they

13 would know.

14 MR. MELCHI: Then I'm fine taking that

15 out, you know, if that's --

16 MS. SHEPHERD: I'm just saying that

17 that -- the only way I could see it would work is

18 if that was somehow made public so they would

19 know.

20 MR. BALLO: One thing I think we need

21 to remember -- this is Tim with EarthJustice --

22 the Department has subpoena authority.
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1 So, the notion that a distributor can

2 avoid penalties for not providing information

3 just seems odd to me because if the distributor

4 doesn't provide information, DOE can subpoena it.

5 If they still don't provide the

6 information, at that point they're liable for

7 contempt of court or civil fines or some other

8 thing. So, there's always consequences.

9 MR. MELCHI: And Steve had -- this is

10 Jon from HARDI.

11 Steve had mentioned to me -- Steve

12 Porter had mentioned to me that, you know, the

13 last time they had a case out on one of these

14 that shortly thereafter he did receive a subpoena

15 notice from DOE and, you know, or a request for

16 information and with the threat of subpoena by

17 not providing it and, you know, did make those

18 records available. So, yes, to Tim's point.

19 I think our point for if we were going

20 to codify what records was in an attempt to help

21 DOE and give Doug what he thought he needed for

22 investigation, whether that's a, you know, again
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1 a violation or prohibited act. Because to Tim's

2 point, they can subpoena the records. They have

3 that ability.

4 MS. MEYERS: So, this is Karen with

5 Rheem. I would have a clarifying question.

6 Often distributors carry more than one

7 brand of equipment. So, if there's an illegal

8 installation of brand Y and the distributor fails

9 to provide that information and it comes out,

10 does that mean the manufacturer of brand Z can no

11 longer sell to that company even though it had

12 nothing to do with my equipment?

13 MR. MELCHI: That's what it looks like.

14 MS. MEYERS: So, if a distributor is

15 selling Goodman and Rheem equipment, there's a

16 violation on an illegal Goodman installation,

17 that means Rheem can no longer sell to that

18 distributor even though the contract, you know,

19 that seems a little --

20 MR. MELCHI: Sell them what, though? 

21 Noncompliant equipment or --

22 MS. MEYERS: No, legal. I mean
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1 equipment, period.

2 MR. McCRUDDEN: This is Charlie with

3 ACCA.

4 I don't think we've ever answered

5 Jon's question as are you limited to being sold

6 noncompliant equipment?

7 I mean, basically, are you limited to

8 not being able to buy 13 SEER equipment? Because

9 that's the only noncompliant equipment that can

10 be installed somewhere.

11 Are you limited to being sold any

12 replacement parts? I mean, these are questions

13 that we haven't gotten --

14 MR. HURST: This is John Hurst with

15 Lennox, but to your point, Charlie, even beyond

16 that is are we talking about the distributor as a

17 full entity like, you know, Steve's not here, but

18 Johnstone Supply?

19 MR. McCRUDDEN: Right.

20 MR. HURST: Or are we talking about the

21 specific branch? We need to define those

22 parameters as well.
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1 MR. EISNER: Other thoughts? Other

2 comments?

3 MS. MEYERS: Neil, I guess I'm just

4 uncomfortable with the manufacturer being held

5 responsible for a distributor failing to retain

6 the proper records.

7 These are independent businesses and,

8 you know, we can make requests, but I guess I'm

9 uncomfortable with the burden coming back to the

10 manufacturer should a distributor fail to

11 maintain records.

12 I don't know that I can support that.

13 MR. SACHS: This is Harvey and it seems

14 to me that the only way to eat an elephant is one

15 bite at a time.

16 I wonder if we can't start nibbling

17 away at some of these questions as the

18 consequence, the inability to sell a distributor

19 the SEER 13 product or all product similarly for

20 the parts versus products and see if we can't

21 chip away at what we want this to look like

22 within the legal constraints.
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1 MS. SHEPHERD: We've asked them that

2 question and he's going to come back to us. It's

3 pending. The Department is dealing with it.

4 MR. McCRUDDEN: So, this is Charlie

5 with ACCA.

6 So, I think whoever is manning the

7 computer was about to do what I was going to

8 suggest that we take off the failure to

9 investigate as a violation on the distributors if

10 you agree --

11 MR. MELCHI: No, that's fine. I was

12 just for the context of --

13 MR. McCRUDDEN: Right. And then I

14 think let's go back though. Back, yeah, to the

15 screen you had on with the three there.

16 Are you okay with that?

17 MR. MELCHI: Yeah, and this is where we

18 were just -- our members just honestly did not, I

19 mean, for the purposes of getting, you know,

20 having minimal impact upon our members, you know,

21 to knowingly sell a product with knowledge that

22 the entity will sell or install the product in
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1 violation is just likely not going to occur. So,

2 I mean, if we want to move with that sort of

3 language, that's fine. 

4 It was suggested to us, though, if we

5 want enforcement to work that if a distributor is

6 somehow made aware of an entity that is violating

7 the law that maybe we don't know is, that it

8 would somehow improve enforcement.

9 But we need to know who that entity is

10 because my counter guy is just not going to know. 

11 I mean, there's, you know, the amount of stuff

12 that is going on at the counter at a busy time,

13 you know, it's just going to be really tough to

14 keep an ear open for I'm going to run across the

15 river and install this.

16 If we know who it is, we can put

17 something into the computer so when they attempt

18 to purchase that equipment, something will come

19 up that says, hey, you can't sell to Joe's

20 Heating and Cooling, he's a routine violator.

21 So, I don't know what that language

22 would look like, but that's just what I'm
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1 bringing back to the group as far as kind of the

2 guidance that our members were looking for.

3 MR. EISNER: The bottom line is the

4 distributors are willing to accept this language. 

5 Is it add to the regulation, or is it prohibited

6 act?

7 MR. MELCHI: Violation.

8 MR. EISNER: Well, I mean, it's listed

9 under prohibited act. So, you want it to just be

10 a violation?

11 MR. DORIA: No, no.

12 MS. SHEPHERD: A violation.

13 (Simultaneous speaking.)

14 MR. MELCHI: So, I guess I'm asking for

15 the group's thoughts on do you guys think that

16 there is any tweaks that the group would be open

17 to, to maybe making that happen?

18 Harvey, I don't know if you have any

19 thoughts on this.

20 MR. SACHS: Without getting -- this is

21 Harvey.

22 Without getting into the larger
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1 questions, in the context of the discussions

2 we've had in the past about the potential for

3 growth of internet sales and other things, I

4 would like to at least propose that the language

5 contractor or dealer be changed to any party.

6 I think I've been convinced that

7 internet sales of condensing units are not now a

8 big deal, but I don't know how the market is

9 going to evolve.

10 MR. DORIA: Harvey, this is Jordan at

11 Ingersoll Rand.

12 I felt like we had addressed this

13 based on how we constructed the definitions of

14 contractor and dealer.

15 That was my recollection of how things

16 changed. That essentially by installing the

17 product even if you're not a contractor by trade,

18 you are a -- they're by law a contractor, and

19 therefore subject to the requirements.

20 MS. SHEPHERD: And, Harvey, I think

21 Doug wants to tie it off of the language that's

22 in the current prohibited act, which talks about
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1 distributors and contractors.

2 And that's when the manufacturer

3 knowingly does something vis-a-vis those parties,

4 which is why he felt more comfortable, I think,

5 from a DOE legal authority perspective based on

6 that.

7 Remember we had the conversation about

8 retailers?

9 MR. SACHS: All right. Well, this is

10 Harvey again and I'll climb back into my short

11 attention span cave.

12 I still feel that others like me might

13 grasp that language and say, I'm exempt. I only

14 sold this to Joe Sixpack who was neither a

15 contractor or dealer. It's sort of reinforcing

16 our intent with some plain language.

17 I'm certainly not going to be

18 insisting on that. It was my reaction on --

19 MR. MELCHI: Harvey, would this be

20 something that if we kept that language in that

21 almost immediately after the rule is finalized we

22 could ask DOE for guidance on and maybe they
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1 could broaden that out so that we would have that

2 ability?

3 MR. SACHS: I'm comfortable with all

4 sorts of resolutions. I think I've raised the

5 potential benefits of redundancy, but certainly

6 Amy is -- Amy and others are right in saying that

7 there are other ways we can deal with this.

8 If you all don't feel that the

9 Department of Redundancy Department shouldn't be

10 invoked here, I can live with that.

11 MS. DEGITZ: Maybe it's something

12 that could just be made very clear in the

13 preamble that this is a violation for contractors

14 and dealers, and this is how DOE defines

15 contractors and dealers so that if you do any of

16 these things, you are subject to this violation.

17 MR. SACHS: Well, this is Harvey and

18 that's okay with me if that's what the body

19 agrees, but it sure is a whole bunch more words.

20 So, let's move on. I'm hearing myself

21 seriously unconcensused.

22 (Laughter.)
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1 MR. MELCHI: Neil, would it be okay if

2 tentatively we take this language and place a

3 hold on it with the thought that if we come to

4 some sort of an agreement on a black list or a

5 prohibited installer's list that we revisit it? 

6 Because I think that will have an impact on what

7 this violation may actually be.

8 MR. EISNER: I think that's fine if

9 that's what the group would like to do. Most of

10 this stuff is dependent on how other terms get

11 defined and we're going to have to go back over

12 this after we agree to all those terms.

13 Is everybody acceptable to this

14 language being added to the rule as a violation

15 of the rules and not a prohibited act?

16 MS. NOLL: No.

17 MR. EISNER: Okay. So, we have one no

18 vote.

19 Do we have any other no votes?

20 MR. SACHS: This is Harvey.

21 I've had conversations with a bunch of

22 people around the table. My preference is still
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1 recognizing challenges that it be a prohibited

2 act for the distributor to knowingly sell and

3 that would require interpretation and guidance if

4 we go that way.

5 And I think that conversation is

6 dependent on what Doug reports to us, but I'm not

7 yet ready without Doug's input to take prohibited

8 act off the table.

9 MR. EISNER: So, both of you have the

10 same thing. You want it to be a prohibited act.

11 MR. SACHS: I'm not speaking for --

12 MS. NOLL: I'm not comfortable with

13 this as is being where we settle. I think

14 there's a lot of things/questions still out

15 there.

16 MR. HUNGERFORD: And I'll add my voice

17 to that. This is Dave Hungerford. I'm not quite

18 ready to let go of prohibited act for

19 distributors.

20 MS. NOLL: And adding to John's point

21 if you -- if the distributors feel that they have

22 no knowledge, then it's basically moot.
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1 So, you would almost argue that the

2 prohibited act is -- should be just as acceptable

3 as not if there is no knowledge there.

4 MR. DORIA: So, this is Jordan.

5 If I could just say, I mean, I think

6 this -- well, I recognize that and I think

7 there's reasons why there should be prohibited

8 acts along the chain.

9 It's always important to keep in mind

10 what the settlement said and I think that's a

11 significant point here for the distributors, I'll

12 let them chime in, but I think that that is, you

13 know, you can't lose sight of that.

14 There's a difference here with

15 different actors in terms of whether or not they

16 can be subject to prohibited acts.

17 MR. FERNSTROM: So, Neil, this is Gary

18 for the California Utilities and I agree with my

19 partners in my opinion on this.

20 MR. EISNER: Others?

21 MR. MELCHI: I thought I was your

22 partner. You're using my wifi.
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1 (Laughter.)

2 MR. BALLO: This is Tim.

3 I agree as well. I don't have a

4 problem with this language defining a violation. 

5 I just think that they do need a prohibited act

6 as well.

7 MR. FERNSTROM: Yeah, this is Gary

8 again.

9 We can't hold the distributors

10 responsible for something they don't know. But

11 if they were to know, it seems to me that ought

12 to be prohibited.

13 MR. EISNER: And so, the group then is

14 unanimous that Doug will have a draft of the rule

15 by tomorrow morning?

16 (Laughter.)

17 MR. RAWALD: Yeah, that's not a

18 problem.

19 MR. SACHS: And we really ought to

20 calculate the $5 a minute late fee for Doug.

21 MR. RAWALD: I managed to find the one

22 cab that does not take credit cards
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1 electronically in D.C. I didn't think that was a

2 possibility.

3 MR. HURST: I think that's a violation.

4 (Laughter.)

5 MR. RAWALD: So, I want to say I

6 appreciate John bringing forward the second

7 violation, but I don't think that's what we're

8 looking for, for the violations.

9 But I don't think from the

10 Department's point of view it makes sense to have

11 the manufacturer's prohibited act be tied around

12 the possibility of others not producing

13 documents. That's not what that prohibited act

14 is really geared towards.

15 So, I appreciate that concession, but

16 I don't think that's what we're looking for as

17 far as that goes.

18 But as far as his point on the

19 violation regarding -- they're going to have a

20 violation regarding reputation, I agree. I think

21 we kind of need both for distributors and here's

22 how I look at it.
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1 There's two kind of instances that

2 will take place with a distributor. One, the

3 distributor is selling to a guy who we know is

4 routinely violating.

5 So, it would be the identical language

6 we have for the manufacturer, essentially, what

7 we initially drafted, and that would be what

8 Jon's members are looking at.

9 And the second concept would be if in

10 the case of somebody had an email to the

11 distributor saying, I'm going to install in

12 Mississippi these 13 SEER items, can you give

13 them to me, and the manufacturer still -- or the

14 distributor still sold to them, then the

15 manufacturer should also know that the guy is

16 toxic and they shouldn't sell to that distributor

17 anymore.

18 So, that's what this second -- that's

19 what this one as currently drafted kind of

20 conjures.

21 So, I would say let's think about

22 having both be violations knowing that probably
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1 the cases in which a distributor is aware of

2 where it's going, it's going to be very, very

3 rare. But if it happens, I don't want to have

4 the distributor get away with that.

5 I want the distributor to feel like if

6 I know about it, I should stop it. So, I think

7 that's why we want to have both those and from

8 the Department's point of view, if that makes

9 sense.

10 And this is in regard to violations. 

11 So, I'm not talking about prohibited acts. I'm

12 talking about the violations that the

13 manufacturer will be responsible for dealing with

14 somebody who does these things.

15 MR. SACHS: So, this is Harvey and I'm

16 trying to think like Steve and that's hard.

17 MR. MELCHI: That's a dark hole you

18 don't want to go down.

19 (Laughter.)

20 MR. RAWALD: Like Steve Porter?

21 MR. SACHS: Yeah.

22 MR. RAWALD: Okay.
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1 MR. SACHS: Let's assume I'm a

2 distributor and I've got several hundred counter

3 men/counter people --

4 MR. RAWALD: Right.

5 MR. SACHS: -- at various branches. 

6 Would it suffice to post a sign next to your Fair

7 Labor Act and everything else that says, thou

8 shalt not sell a SEER 13 unit for installation in

9 the following states or a low EVR unit

10 dah-dah-dah-dah?

11 MR. RAWALD: Uh-huh.

12 MR. SACHS: Would that suffice to ward

13 off evil for the distributor?

14 MR. RAWALD: Well, I think that would

15 be -- that would go a long way, right? But if

16 the guy got to the counter and told the counter

17 person, I know your sign says this, but, come on,

18 I'm going to take these three units to

19 Mississippi, don't tell anyone, then we want the

20 counter person to say, you can't do that, and not

21 sell it to them. We want that counter person to

22 not do that, right?
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1 So, because the distributor has told

2 them, if you do that, then the manufacturer is

3 going to cut us off. So, don't do that.

4 So, I think the incentive from the

5 government would be -- it's never going to

6 happen, right? This is a rarity.

7 But I think that because it could

8 happen, that's how we want to have this kind of

9 pitched at, okay, the distributor tells those

10 people, hey, we're at risk if you sell it to a

11 guy telling you he's putting it someplace bad. 

12 Here are the bad places. Don't sell it to them

13 if they tell you these things.

14 So, everyone is kind of working

15 together in the chain, because they know it's

16 ultimately the manufacturer at risk and the

17 manufacturer will cut their contracts if they're

18 not cooperating.

19 MR. SACHS: But in practice -- again,

20 this is Harvey.

21 MR. RAWALD: Right.

22 MR. SACHS: That sign would suffice to
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1 immunize the distributor if it were posted at

2 each branch.

3 MR. RAWALD: Unless I heard the counter

4 woman came in and said, yeah, the guy told me

5 that and I said, oh, it's no big deal.

6 And I say, okay, well, then you've

7 transgressed.

8 MR. BALLO: Doug, just to be clear, the

9 examples you're giving revolve around the

10 distributor having actual knowledge that the

11 units were being installed.

12 MR. RAWALD: Right.

13 MR. BALLO: Not just should have known.

14 MR. RAWALD: Constructive knowledge,

15 right.

16 MR. BALLO: So, are you suggesting that

17 it be limited for distributors to actual

18 knowledge or --

19 MR. RAWALD: I think that the

20 constructive knowledge is worthy of discussion. 

21 I think it's a lot harder, right, than just

22 actual knowledge.
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1 So, I think the actual knowledge is

2 easier. So, I hope I'm making a clear point

3 about that.

4 I don't want to -- I don't want to

5 imply the duty to investigate on the distributor,

6 right?

7 So, the distributor, I don't -- I'm

8 not making -- adding people on the chain of

9 commerce investigators on behalf of DOE, you

10 know.

11 If they think, well, this guy could be

12 going back to Louisville as opposed to sitting

13 here in Cincinnati. So, I'm really concerned

14 about this, but I don't know. I'm not sure.

15 I don't want them to feel that they

16 have to then follow the guy to where the job site

17 is. That's not their job.

18 So, I definitely want to draw a line

19 here. So, if they have a reason to know, then

20 the question is what would constitute a reason to

21 know? That's what you're talking about with

22 this, right?
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1 So, I think that goes into a more gray

2 area and we can talk about it further, but I'm

3 very comfortable with the actual knowledge

4 scenario.

5 I think that we should retain that if

6 it has importance for the purposes of the

7 Department.

8 MR. MELCHI: One of the examples I

9 think that was brought up to us, so, I've got a

10 member with a distribution center in Fort Thomas,

11 Kentucky to sell to Cincinnati. And one of their

12 largest customers is right in Covington. It's

13 right along the border of Kentucky, but 75

14 percent of that company's business is in

15 Cincinnati and they do drop off a substantial

16 number of units to that contractor's facility

17 within Kentucky.

18 And, you know, they just want to make

19 sure that, okay, well, that's what we've been --

20 that's how we operate. That's how the contractor

21 operates, you know.

22 We want to make sure that we don't
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1 have a disruption of our current business

2 practices that have worked well for, you know, 50

3 years.

4 MR. RAWALD: Right. No, I get that and

5 I don't think --

6 MR. HUNGERFORD: This is David

7 Hungerford.

8 We've been focusing most of this

9 discussion around one particular use case. And

10 that is sort of the guy at the counter on the

11 border.

12 And I think the possibility from harm

13 for that -- from that particular scenario that

14 the unit gets installed on the wrong side of the

15 river is far less than the major situation of

16 someone shipping a large number of units into the

17 wrong region and then being sold.

18 I'm concerned from California with a

19 warehouse in Reno getting a whole lot of SEER 13

20 units and then they're available to contractors

21 in California or in Nevada that they could then

22 might install them incorrectly and
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1 inappropriately.

2 It's preventing those SEER 13 units

3 from ever getting to Nevada that is my major

4 concern. And that's where I'd like to focus the

5 one-off mistakes, the, I mean, the weather is

6 not really different on one side of the river

7 from the other. That's not the issue.

8 That's where there's no efficiency

9 harm, no lost savings harm there. The harm is

10 moving large numbers of units into the wrong

11 region. That's where I'm --

12 MR. MELCHI: This is Jon Melchi from

13 HARDI.

14 I know if Steve were here he would

15 tell you that they have a distribution center

16 located in Las Vegas that services not only the

17 southwest region, but the south region and also

18 the north region.

19 MR. HUNGERFORD: Right.

20 MR. MELCHI: And that's where it

21 becomes problematic, because they are servicing

22 three different regions from one warehouse that
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1 they invested a lot of -- a large amount of time,

2 money and have a lot of employees to service

3 those regions.

4 I think to Steve's point, they're not

5 going to be shipping 13 SEER from their DC to

6 Fresno. That's not going to happen.

7 But if you have a branch in -- that's

8 on the border of Oregon that services contractors

9 there, but it may be located on the California

10 side, you know, you would basically be limiting

11 your business opportunities if you don't at least

12 maybe carry some of that product to service your

13 customers over there with knowledge that this

14 product needs to be installed in Oregon, but you

15 would be telling your California businesses that

16 they couldn't compete.

17 I think at least from our members'

18 perspective that the large-scale shipping of

19 units into a prohibited area is probably, that's

20 not something that our members think is actually

21 going to happen. At least not from a legitimate

22 distributor or manufacturer and distribution
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1 perspective.

2 MR. EISNER: You raise a good point. 

3 You say a legitimate distributor.

4 Would there be benefits to a

5 legitimate distributor vis-a-vis or who's not

6 legitimate if this were a prohibited act?

7 MR. MELCHI: No. I think we've seen it

8 in certain instances that adding prohibited acts

9 or adding regulation doesn't always level the

10 playing field as much as we like to think it

11 will.

12 MR. McCRUDDEN: This is Charlie with

13 ACCA.

14 I mean, is a suggestion that shipping

15 a product is a prohibited act or a violation?

16 MR. RAWALD: Are you asking Dave?

17 MR. McCRUDDEN: I guess, yeah.

18 MR. RAWALD: So, I guess what Charlie

19 is getting at, Dave --

20 MR. HUNGERFORD: Well, if you know it's

21 going to be installed in, I mean, if you're

22 shipping it -- if you're shipping a SEER 13 unit
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1 to California or to Reno, you're pretty sure that

2 it's going to be installed in the wrong area. 

3 So, that's --

4 MS. McCRUDDEN: No.

5 MS. MEYERS: No.

6 MR. HURST: No.

7 MS. MEYERS: I don't agree.

8 MR. HURST: We serve out of our

9 distribution center in Ontario, California the

10 states of Oregon and Washington.

11 So, now, if a dealer comes to our

12 warehouse and purchases a truckload quantity of

13 13 SEER products and we know that they are based

14 in the LA basin, that's -- absolutely. But we

15 will ship copious amounts of 13 SEER product into

16 the South to be redistributed north out of our

17 distribution centers and into our branches, and

18 then to dealers.

19 And it would be a massive undertaking

20 if that was a prohibited act.

21 MR. HUNGERFORD: I'm afraid I don't

22 understand the difference why it would be a
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1 massive undertaking for if it were a prohibited

2 act versus a violation --

3 MR. HURST: Where am I going to put my

4 --

5 MR. HUNGERFORD: -- unless you're

6 assuming that they're going -- that you're going

7 to treat the products differently, that is, not

8 sell it in California versus shipping it to

9 Oregon from your warehouse in Ontario.

10 I don't understand the difference in

11 compliance between the definition of it as a

12 prohibited act versus a violation.

13 MR. HURST: Right.

14 MR. HUNGERFORD: You're still going to

15 act in the same way, that is you're not going to

16 sell them in California, right?

17 I don't understand why --

18 MR. HURST: Correct, but --

19 (Simultaneous speaking.)

20 MR. RAWALD: I don't think that John is

21 pointing at this as a violation to prohibited act

22 issue.
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1 What he's saying is that there

2 shouldn't be anything with the shipping or

3 storing of the product, because they do the

4 practical matter just store things in the south

5 to --

6 MR. HUNGERFORD: I completely agree.

7 MR. RAWALD: So, and that's the

8 question. So, you can --

9 MR. HUNGERFORD: Well, you can ship it

10 through a different region. That seems

11 reasonable.

12 MR. RAWALD: And so, then you posed the

13 question of, hey, well, we have things warehoused

14 in a place and then they --- is that being

15 indicative of where they're going to end up?

16 But how do we unravel that? How do we

17 as an effective enforcement regime us that

18 information?

19 Because what we're hearing from John

20 and we've heard from Gary, what we'd heard from

21 Jon and Steve all the time is there are always

22 hubs that are in the South. And so, we can't
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1 draw a linear conclusion from them being stored

2 there to that being actually installed in that

3 area.

4 So, how do we use that effectively to

5 bolster our enforcement plan? How do we use that

6 information and what can we do about that?

7 And it seems like that most people are

8 saying, absent some knowledge from the dealer

9 about where they're bringing the item and where

10 they're going to install it, we can't do a whole

11 lot with that information, is what I hear people

12 say from the industry point of view.

13 And I see Charlie shaking his head in

14 agreement. So, I don't know, Dave. I mean, I'm

15 open. I don't know. I'm giving you ideas, but I

16 think it's -- it's a question that I think is a

17 logical one. Gary has asked it several times as

18 well.

19 I don't think there's a solution that

20 we can get to that everyone agrees to that this

21 is how we could use the information effectively.

22 MR. HURST: But I do think, to an
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1 extent. So, all product goes to Ontario, and

2 then it goes to some branch near the border of

3 California or -- the folks that work at the

4 counter assuming that they didn't start last week

5 that have gotten to know their customers, and I

6 think I can speak for any one of the distributors

7 -- distributors are a relationship-based

8 business.

9 So, at some point you kind of know who

10 your customers are, you kind of know where they

11 operate, you kind of know where they go.

12 And I think it's reasonable that the

13 counter person that all of a sudden sells a

14 truckload quantity of condensing units to

15 somebody that usually installs in California,

16 something is up with that.

17 And I think it's incumbent upon the

18 distributor at that point, we're a distributor as

19 well, to say, this doesn't seem right.

20 Conversely, if you have your regular

21 customers that serve the Oregon side of the

22 border, you're going to know that as well.
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1 You're going to see different

2 patterns. Most people, I think, are going to

3 behave and do the right thing, but I think to

4 your earlier point you will know if you know

5 anything about your own business and your own

6 customers, you'll begin to see things that are

7 either adhering to the law or not adhering to the

8 law.

9 And then you have to decide what the,

10 you know, the terms that we've kind of batted

11 around which routinely isn't branch-specific, you

12 know.

13 I'm having a hard time getting to what

14 you do until we define those pieces of it.

15 MR. RAWALD: Right. And I think --

16 this is Doug.

17 So, part of what you're getting back

18 to is what Tim raised with me as to constructive

19 knowledge, right?

20 So, you kind of know the pattern of a

21 person you're buying from and they're typically

22 installing in the south and suddenly they're
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1 buying a bunch of things that you know aren't

2 good in the south. So, what do you do then, you

3 know?

4 So, the question is, we probably want

5 the distributor to not sell those, right? But

6 the distributor wants to make money. And so,

7 they want to do business and they don't want to

8 assume the worst of their customer.

9 So, how do we parse it out and how do

10 we develop effective regulations around

11 encouraging the right conduct and discouraging

12 the bad conduct?

13 So, I guess I don't know. I'm open

14 for that -- Harvey had his hand up.

15 MR. SACHS: This is Harvey and I'm

16 trying to pick up on this. And it seems to me

17 the critical element is that we've established

18 that distribution is often regional, and regions

19 can take on the full north-south gradient.

20 The other thing, it's my sense that

21 the dealer-contractor side of this is rarely more

22 than metropolitan. In some cases, it can be half
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1 a state, Rhode Island, but it's generally sort of

2 the scale of a metropolitan operation.

3 So, in that sense, accountability

4 would seem to me to require that routine

5 violations or violations in any sense include

6 knowingly shipping a whole bunch of SEER 13s to

7 the dealer in Mississippi regardless of where the

8 distribution point is.

9 The harder issue is shipping to a

10 dealer in Covington, but -- Covington, Kentucky,

11 but I think the existence proof, as it were, is

12 this dealer in Mississippi, that it is a bad

13 thing to do regardless of where distribution is,

14 to knowingly ship a bunch of SEER 13s to Biloxi.

15 MR. CLARK: This is Gary Clark and I

16 agree in the preponderance of cases, you know,

17 Harvey is right, but there are contractors --

18 just throwing one out there, J.R. Hobbs in

19 Atlanta, Georgia, they're one of the largest

20 multi-family contractors in the United States.

21 They build -- they go everywhere in

22 the United States and they take almost all their
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1 shipments into Atlanta certainly for the eastern

2 part of the U.S.

3 So, we will ship them truckloads of 13

4 SEER equipment, I guarantee it, that's headed for

5 someplace appropriate.

6 And then, you know, so, there are

7 those contractors out there. There's not many of

8 them. I agree with you the vast majority of them

9 are metropolitan. They're not going to go more

10 than, you know, a hundred miles.

11 I mean, that would be, you know, in

12 rural areas they might go a hundred miles from

13 Houston, Texas, they might go 10 miles, you know.

14 (Laughter.)

15 MR. CLARK: But there are these few

16 guys out there that are giants that take big

17 shipments of stuff. And then because of the way

18 that their jobs go, they redistribute it

19 themselves to manage the job.

20 So, it's, you know, it's this

21 incredible diversity of contractors we have out

22 there.
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1 MR. SACHS: This is Harvey.

2 Gary, thank you. That's very helpful

3 to think about the exceptions and not think about

4 the roving ground source installers as --

5 MR. CLARK: Yeah, there you go.

6 MR. SACHS: -- a few nationals who

7 drive their trucks anywhere for the right size

8 job.

9 MR. CLARK: They do.

10 MR. SACHS: But it seems to me that

11 that's an argument for DOE understanding that in

12 that case they have to go to that dealer to find

13 out where the installs were, not a reason to not

14 try to get a rule that is appropriate, but has

15 that flexibility of when you don't beat up, when

16 you look at the dealer records understanding that

17 this distributor is sending to that kind of a few

18 jobs.

19 MR. CLARK: Right. And I understand

20 what you're saying. I guess the concern I have

21 from your earlier comments, my concern was is

22 that a prohibited act, the direction we were
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1 headed was a prohibited event would be to send a

2 truckload of 13 SEER units to a contractor in

3 Atlanta.

4 MR. SACHS: Who is a known -- knowing

5 that he will be a violator.

6 MR. CLARK: Well, I worried that we

7 wouldn't have that last part on the sentence.

8 MR. SACHS: I absolutely agree to that

9 last part of the sentence.

10 MR. CLARK: Okay. I was worried that

11 we wouldn't have that last part.

12 MR. SACHS: All right. I think that's

13 entirely appropriate.

14 MR. DORIA: So, this is Jordan for

15 Ingersoll Rand.

16 We can go back to the example that we

17 had in this issue of constructive knowledge. 

18 There had been discussion I think at one point

19 about this idea of some kind of safe harbor

20 potentially if you were to report on something

21 like that.

22 So, just to use the example again, a
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1 distributor does see something, they know that

2 this contractor is serving the south and they're

3 just all of a sudden taking a lot of 13 SEER

4 product.

5 I think one approach to solving this,

6 to addressing this issue, what do you do with

7 information like that that supports enforcement

8 would be to say that you upon some sort of

9 positive notification to the Department that you

10 can continue to sell to that person up until the

11 time that, you know, they are determined to be a

12 routine violator by DOE.

13 I think the reason that's so important

14 is if you didn't do that, if you just said that

15 you as the distributor now cannot sell to that

16 person, what that actually would do is because

17 the broader industry wouldn't know, that

18 distributor -- or I mean that contractor would

19 just go to somebody else. You're actually

20 punishing good actors and rewarding bad ones.

21 So, I think the idea of some kind of

22 safe harbor where you can continue to sell so
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1 long as you report it, and report in a timely

2 manner, right, not maybe, you know, well, I knew

3 two years ago and I kept doing it.

4 There has to be some kind of time

5 period, but I think that could be a way that

6 could address this sort of constructive knowledge

7 issue, but not punish the good actors who are

8 trying to do the right thing.

9 MR. RAWALD: This is Doug.

10 So, I'm generally receptive to some

11 sort of concept like that. There is some

12 considerations, because the length of an

13 investigation can be a while.

14 And so, what I don't want to create is

15 an incentive for other people because we're going

16 to be asking for records, people that kind of

17 drag their feet along because they know they can

18 draw it out and keep making sales during that

19 time because we're not going to go make our

20 determination because the investigation is

21 ongoing.

22 So, I don't want the distributor or
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1 the manufacturer to be in a situation where they

2 say, well, I told DOE and now I'm just going to

3 keep selling to this guy until they tell me

4 something else.

5 So, what we do in our current context

6 is when we tell someone that something is -- that

7 we're investigating for noncompliance, typically

8 they stop making it because they know eventually

9 they have to pay for it because they made it

10 noncompliant.

11 So, it's a question of is there a way

12 that we can come to a different kind of a ground

13 where the manufacturer tells us about -- or the

14 distributor tells us about a complaint and then

15 we either make some sort of initial Notice of

16 Concern, or we say to the industry, hey, we're

17 looking into this particular matter, or what do

18 we do to kind of level the playing field as

19 you're concerned about here and get their

20 incentive, but also not allow people to continue

21 to sell until the investigation is over if the

22 investigation may take a while.
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1 I don't want to do that. I don't want

2 to keep selling noncompliant things to someone

3 that we think might be doing the wrong thing.

4 MS. NOLL: And this is Elizabeth.

5 I actually think of it slightly

6 different that I would rather put in place

7 something that if the person at the counter, if

8 somebody comes in and asks for a truckload to

9 Atlanta, that they are at least aware of a

10 potential violation or whatever, you know,

11 recourse when we come down that they would say,

12 hey, can you tell me where these are going and

13 why you need them to go to Atlanta?

14 And if that person has a reason, you

15 know, an explanation that is not unlawful, then

16 that person is covered.

17 If they don't ask and we haven't put

18 into place any mechanism that is going to trigger

19 them to ask the question, then we haven't done

20 our job. We haven't put in place an effective

21 enforcement plan.

22 MR. DORIA: But, Elizabeth, I think
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1 that -- I understand your point. But going back

2 to something Doug said before, we don't want

3 industry to be the investigators.

4 I know exactly what that suggestion

5 would do. It puts us in the position of being

6 investigators because it's fine to say, all

7 right, he asked the question. They say, I'm

8 going to do with it whatever I damn well please,

9 right?

10 What do you do then, right? Are you

11 required to say, well, now he didn't answer so I

12 think he's hiding something?

13 I mean, I don't -- I understand the

14 concept behind asking, but I just don't know what

15 that necessarily --

16 MS. NOLL: I'm suggesting asking in the

17 sense of if there is some sort of consequence

18 tied to an action, then people are going to think

19 twice before just wholesale I'm just going to

20 keep -- there's nothing stopping me from

21 continuing to do business as usual.

22 MR. CLARK: For what the practical --
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1 this is Gary from Goodman.

2 The practical question that we'd be

3 asked would be using the JR Hobbs people is that

4 we will ship you this if you in some way

5 recognize the fact that it is unlawful to sell

6 these units in the south.

7 Do you still want us to ship you these

8 units? Check "yes." They check "yes" and we

9 ship it to them.

10 MR. SACHS: Can you do that?

11 MR. CLARK: What?

12 MR. SACHS: Can you do that?

13 MR. CLARK: Well, I'm sure that, you

14 know, this is in a hypothetical, but, you know, I

15 don't think that what I just described is out of

16 the realm of possibility.

17 But from a practical standpoint, the

18 person who is a known violator will check that

19 box every single time. And so, how that protects

20 us, I don't really know, you know.

21 If somebody is going to lie to you,

22 they're going to lie to you, all right?
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1 MS. NOLL: But they're the ones that --

2 -

3 MR. CLARK: The guy on the receiving

4 end is going to say, okay.

5 MS. NOLL: But they're the ones --

6 MR. CLARK: It didn't change anything.

7 MS. NOLL: The repercussions are going

8 to come down on them, not you. But at least

9 you're put in a position of at least feeling like

10 I've done the right thing, I've asked the

11 question, I've put in place a mechanism that's

12 going to protect me.

13 And so, I think you might deter a

14 portion of the bad actors, but not all of them.

15 MR. CLARK: If what I describe protects

16 me as a company, then I'm -- hey I think that's

17 great.

18 I don't think the Department might

19 feel the same way --

20 (Laughter.)

21 MR. CLARK: I mean, that's my concern.

22 We go through all these steps and in fact it does
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1 nothing to protect us from, you know, further

2 inquiries, let's say --

3 MR. RAWALD: Right.

4 MR. CLARK: -- from the Department.

5 (Laughter.)

6 MR. RAWALD: This is Doug. I'm

7 laughing with Gary, I think.

8 So, I think that we're working on the

9 idea of what you don't want, because it's got

10 some possible areas to discuss more on.

11 MR. EISNER: Why don't we take a break

12 and see if we can come back and narrow this down? 

13 I think we should go on to another issue. Come

14 back in about 10 minutes.

15 (Whereupon, the proceedings went off

16 the record at 10:29 a.m. and went back on the

17 record at 10:46 a.m.)

18 MR. EISNER: Okay. We have someone

19 online, Vincent, who's got a comment he wants to

20 make.

21 Vincent, are you still there?

22 MR. MUCCIOLA: Can you hear me?
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1 MR. EISNER: Yes.

2 MR. MUCCIOLA: My question that I had

3 was we do have a distributor that does sell his

4 product to a prefab home builder. And, again, we

5 have one idea where those prefab homes are going

6 to end up at.

7 So, you know, in that case I hear, you

8 know, you want to add a letter or some knowledge

9 about where they're going to finally install

10 these properties, but I'm just throwing that out

11 that there's another chain of events that happens

12 in the real world there.

13 And the prefab builder can ship those

14 homes anywhere over the United States.

15 MR. EISNER: And I assume that they can

16 legally be moved from a northern site to a

17 southern site after they've been used?

18 MR. MUCCIOLA: Well, they could, but

19 most of his projects are prefab modulars that,

20 you know, are stacked into multifamily housing.

21 MS. MEYERS: Do they ship the outdoor

22 unit with the --
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1 MR. MUCCIOLA: Yes, they do.

2 MR. ROCKY: Then they're going to have

3 some fun adjusting.

4 MR. EISNER: Would it be a violation if

5 it were legal when installed, the housing unit

6 when it was installed, and then when it was

7 moved? Would that be legal or would that be a

8 HUD issue?

9 MR. RAWALD: Right. This is Doug.

10 So, the issue you're presenting is --

11 so, you're saying if the installation was going

12 to be a condensing unit attached to the indoor

13 unit, right?

14 So, that's going to be when the home

15 is in place and the condensing unit is going to

16 be installed. 

17 So, they're not traveling installed

18 because the condensing unit is not in place to be

19 installed.

20 So, and what you're presenting the

21 idea of is it's installed in the north, and then

22 they uproot the condensing unit and the home and
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1 they move it all to the south, which I think is

2 not likely to happen, but then we also have a new

3 product issue and there's a lot of legal

4 questions with that.

5 MR. EISNER: I'm also, I mean, we were

6 talking about when is it, quote, installed or

7 when is it a violation of the statute.

8 And maybe this is a question for you,

9 Vincent, you know, what happens to them? Are

10 they charged? Are they ever plugged in? Are

11 they ever run before they are put in their

12 permanent location?

13 MR. MUCCIOLA: They are charged and

14 they are installed.

15 MR. EISNER: Before they're moved to

16 wherever the person is going to install the home.

17 MR. MUCCIOLA: Yes.

18 MR. RAWALD: Well, Vincent, this is

19 Doug.

20 So, when we've talked about installed

21 here, I think Bryan Rocky had a good way of

22 putting it, which is when the condensing unit is
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1 actually attached to the indoor unit, everything

2 is turn on and run through its first shift.

3 So, that's done before the prefab unit

4 is shipped to its final destination? The

5 condensing unit is actually attached to the

6 indoor unit and run and everything is running on

7 the prefab unit before it's shipped to the final

8 location?

9 MR. MUCCIOLA: Yes.

10 MR. RAWALD: Why would that be?

11 This is very odd to me. So, okay,

12 we'll look into that more because it's an

13 interesting hypothetical. So, everyone here is

14 shaking their head like they haven't heard it

15 before. So, we'll look into that.

16 MR. EISNER: All right. We were in a

17 position where we asked what everybody thought if

18 what's up on the screen is a violation. We had a

19 number of negative votes.

20 Anybody want to speak further to the

21 concerns? Anybody have ideas on how to address

22 the concerns of those who want to vote
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1 negatively?

2 MR. RAWALD: This is Doug.

3 So, what I heard the concerns were not

4 that these things would constitute violations,

5 but that they'd only be violations.

6 The folks who had concern were saying,

7 no, no, no, we also want to have prohibited acts

8 in addition to the violations.

9 So, I think separating those two out

10 -- I didn't hear any concern that the violation 

11 has traction except for John's, which is, hey,

12 this knowing violation for selling to people is

13 not the actual case that we're going to encounter

14 with distributors. What we really want is to be

15 the violation similar to the manufacturer that

16 Amy Shepherd first proposed, which is the, hey,

17 selling to someone that we know is a routine

18 violator.

19 That's the one that's more applicable

20 to the case of distributors. That's why her job

21 is suddenly -- is everyone -- is that fair? But I

22 think that's where the real issue seems to be.
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1 MS. NOLL: Well, I also think, I mean,

2 this is in the context of just a

3 manufacturer-prohibited act.

4 MR. RAWALD: Right.

5 MS. NOLL: A little bit of concern, and

6 I don't want to speak for anyone, that then

7 everything is going -- the burden is completely

8 being placed on the manufacturer.

9 So, absent anything else, yes, maybe

10 there is a little bit of concern of piling on

11 violations to this one prohibited act.

12 MR. RAWALD: Right. So, this is Doug.

13 So, I don't think that we're piling

14 on. So, not we're adding things like the record

15 retention, which I think that's too far.

16 MS. NOLL: Right.

17 MR. RAWALD: So, I think there was a

18 concession Jon was trying to give us, which I

19 appreciate. I think that's too far. I don't

20 think we're asking for that.

21 What we're trying to really define is

22 the scope of what would be a violation here as in
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1 the statute we know we have that.

2 And I think this pretty much frames it

3 with the understanding that the distributors,

4 they also have kind of the second violation as

5 Amy had initially framed.

6 And I think from the point of view

7 we've got to have both be the violation. Both

8 the selling to the guy who is reputed to be a bad

9 person, and also the selling to someone that you

10 know is going to put it in the wrong place. The

11 guy that comes to your counter or orders from you

12 for tract housing and says, yes, I'm going to

13 install all these in Mississippi, and I

14 shouldn't.

15 So, as everyone says, it won't ever

16 happen, but we want to make sure that we cover

17 both those activities.

18 So, I think it's actually from the

19 Department's point of view, that would be the

20 best way of approaching the violation.

21 So, I think it's a little bit more

22 broad than what we have here, but that will be a
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1 violation.

2 And I didn't hear anyone saying, no,

3 no, we don't think those should be a violation. 

4 What we're saying is we think this should also be

5 used for prohibited acts to lessen the burden on

6 the manufacturers, possibly, but also hold us a

7 little accountable in the chain.

8 So, that's really the real fight that

9 I see that we're having for both reflecting

10 those.

11 This kind of belief by some that there

12 should be prohibited acts added, and the belief

13 by those that we should not add prohibited acts.

14 Is that --

15 MS. NOLL: I will agree with that.

16 MR. RAWALD: Okay.

17 MR. EISNER: So, with that, any further

18 discussion? I assume we still have the negative

19 votes or is somebody willing to change?

20 MR. BALLO: Well, if you change the

21 question. If you just say, does everyone agree

22 with this being a violation leaving aside the
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1 issue whether it should also be a prohibited act,

2 I could vote for it as a violation, but I can't

3 vote to agree that it should not be a prohibited

4 act.

5 MR. EISNER: Is there any reason we

6 should treat them separately? If we want this to

7 be a prohibited act, there are going to be

8 negative votes unless it is made a prohibited

9 act.

10 MR. RAWALD: Right. So, this is Doug.

11 So, I think academically we have to

12 treat them separately, because they're separate

13 questions.

14 I mean, there's a question of we have

15 to define the term, and the separate question

16 entirely is, should we add additional prohibited

17 acts to what we already have from statute to meet

18 other people's needs?

19 So, and the question has been asked to

20 me several times, and what I'll say again today

21 after two weeks of discussions, is that we're

22 still open to what the group wants to do.
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1 We want the group to look at this so

2 we don't -- we're not pushing for a particular

3 concept of adding prohibited acts.

4 MR. FERNSTROM: So, this is Gary.

5 If I understand it right, adding

6 prohibited act to a violation simply facilitates

7 or improves DOE's enforcement or compliance

8 action.

9 We're all in agreement that either way

10 these things we're talking about are violations.

11 The question is do we want to give DOE

12 the additional leverage associated with what

13 turning it a prohibited act offers?

14 And in my mind, we do. It isn't that

15 much additional trouble, difficulty, risk on the

16 part of those responsible for enforcement to

17 accept the additional burden of prohibited act.

18 Doug, would you please respond to

19 that? Am I perceiving this --

20 MR. RAWALD: Right. The underlying

21 facts would be the same for me whether I'm

22 investigating for a violation for assessing
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1 whether a manufacturer has committed a prohibited

2 act by dealing with them, or deciding whether

3 it's a prohibited act so I'm going to charge

4 money to the shipper or the dealer.

5 So, from my point of view from

6 working, it's not going to change how much work I

7 have to do.

8 What making it a prohibited act does,

9 it allows the Department to charge money to other

10 people in the chain besides the manufacturer. 

11 That's the only difference that we're professing.

12 MR. FERNSTROM: One more thing in

13 response. Other people in the chain are probably

14 going to be those large, mostly -- or largely

15 responsible.

16 So, it seems to me to be able to

17 charge money to those principally responsibility

18 -- principally responsible is a good thing.

19 MR. RAWALD: I understand that's your

20 point. I do. I do. And Harvey had a point,

21 too.

22 MR. SACHS: No, I -- this is Harvey and
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1 I have a question.

2 I have thought that the prohibited

3 acts are to extend to each party in the commerce

4 chain since they independently act. And that's a

5 philosophical point.

6 And I think it's time for me to ask

7 the pragmatic question which you've alluded to if

8 I don't have prohibited act for the distributor

9 which seems to be the sticky point right now, how

10 does this affect your ability to do your work?

11 Does it affect it significantly, or is

12 it more a matter of sort of philosophical that

13 I'm phrasing?

14 MR. RAWALD: This is Doug.

15 I mean, a lot of this is based upon

16 intuition and gut, right, not based upon any

17 empirical evidence, which is the unfortunate

18 reality because we haven't done this before. We

19 haven't enforced this from the public energy's

20 point of view.

21 So, I don't have data to compare to

22 the other agencies that would be comparable to
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1 kind of give an explanation.

2 What I think is that if we're not

3 going to be able to charge money to distributors

4 or contractors and dealers for doing some things,

5 we need to have something else to hang over their

6 heads.

7 Now, John Hurst brought up the fact

8 that manufacturers would think of some other

9 ideas that would be sticks or carrots to help out

10 at the last meeting. So, if I could hear those -

11 - but from my point of view the only thing that

12 we've offered that's even a possible -- another

13 stick would be is this finding of being a routine

14 violator which may have to put a market based

15 result on the individual that's even more

16 damaging than the $200 they get fined.

17 So, that's the only comparable kind of

18 thing that I can do to enforce that would be

19 available.

20 So, I think I could use that tool if

21 folks -- if we build a robust regime of, hey, the

22 Department has found someone to be a routine
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1 violator. So, therefore, the distributors are

2 actually no longer being sold anything from the

3 premier manufacturer, but I don't know where we

4 are on that.

5 So, I guess that's my response. 

6 You're looking at me for more.

7 MR. SACHS: This is Harvey again and

8 that's helpful looking at that linkage. In terms

9 of the practicalities, the obvious violation that

10 remains whether it's a prohibited act or not is

11 the failure of these records that you have

12 subpoenaed.

13 MR. RAWALD: Right. And so for the

14 failure to produce records if we don't have a

15 $200 violation, what do we have to encourage

16 people to produce records?

17 So, in Steve Porter's point before he

18 -- when he was here was we're so concerned with

19 the cost of filing a subpoena in court, that

20 we're going to comply.

21 So, that's one of the responses. So,

22 from the Department's point of view, we have
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1 found that people typically give us records.

2 I don't know if it's because they're

3 afraid of subpoenas or because of the monetary

4 figure. I can't ascribe what the difference,

5 because everyone that we ask records for

6 currently face both consequences.

7 So, merely to be offering an opinion,

8 and I'm not prepared to do that. I would be

9 guessing. I don't think it's fair to this group

10 for me to guess what would be the most likely

11 thing to encourage behavior to producing

12 documents.

13 I guess the contractors and dealers

14 could possibly opine what I think from their

15 point of view, from their folks. Steve has told

16 us, and I think that Jon is in line with him,

17 that the distributors view it to be enough of a

18 financial risk to litigate the subpoena. They

19 would give the documents because of that rather

20 than any concern over a financial penalty from

21 DOE.

22 So, I don't know how contractors and
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1 dealers feel about that.

2 MR. McCRUDDEN: Is that a question?

3 MR. RAWALD: Yes, I guess.

4 (Laughter.)

5 MR. McCRUDDEN: So, this is Charlie,

6 ACCA.

7 I think the contractors, and I'll let

8 Chuck say his part, too, would view the request

9 for information with the follow-up possibility of

10 a subpoena to be enough to comply with that

11 request for information.

12 MR. EISNER: Neil, we've been

13 approaching this from an enforcement perspective. 

14 What will make it easier for Doug to find out

15 who's violated the statutory standards.

16 What about from the compliant side? 

17 Would making this a prohibited act or not making

18 it a prohibited act be more beneficial in terms

19 of getting people to comply, or less beneficial?

20 Do you see it as a good tool for

21 compliance and not worrying about getting to the

22 enforcement stage, or don't you think it will
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1 make a difference?

2 And I recognize this is kind of a new

3 area. But based on your experience with these

4 kinds of things, would it help, or would it not

5 help?

6 And I don't mean about production of

7 documents themselves. I mean about compliance

8 with the standard for the unit that's being sold.

9 MR. McCRUDDEN: Right. So, this is

10 Charlie with ACCA again.

11 I don't want to answer that

12 specifically yet, because I think when we look at

13 what is a routine violation, when we define

14 routine violation if there's a threshold and if

15 we define how that routine violation is made

16 public or noticed, I would like to have that

17 information sort of -- and I know that that's

18 where we're sort of -- we're leading to.

19 And I say that because if there is

20 this sort of hammer that could come down from 

21 manufacturers, that we aren't going to touch a

22 contractor who is either a routine violator or is
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1 showing up on this on these public notices

2 whether or not it's just notice we've begun an

3 investigation or we've concluded an

4 investigation. And I don't think we've got that

5 all the way out. That potentially could be

6 enough.

7 And also what I'll throw in, too, is

8 what specifically does that limit that contractor

9 or that distributor, I guess, also from engaging

10 -- what practices are they prohibited from. Is it

11 just the noncompliance, or is it all products?

12 And as Amy, I think you weren't here

13 yet, but I think Amy -- or, no, I think Karen

14 posed a question about you've got dealers that

15 are multiple or contractors that are multiple

16 dealers.

17 MR. RAWALD: Right. So, I can answer

18 that one question, because I promised I would. 

19 And I did email Amy as I was driving in. I have

20 answered that question.

21 (Laughter.)

22 MR. RAWALD: So, we have talked
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1 internally in the Department and I think this is

2 an important question that really needs to be

3 answered as of Neil's question how we define that

4 in that particular phrase.

5 And so, the way that we would define

6 it would be is to simplify this, and I like to

7 simplify things as much as possible, is that if

8 someone was a routine violator, it would be

9 unlawful to sell that routine violator any

10 central air conditioner. Anything under the

11 Department's rubric of central air conditioner,

12 because this is how we define the term "product."

13 MR. McCRUDDEN: So, it covered product.

14 MR. RAWALD: Right. So, we have to

15 cover product level with that word "product." 

16 So, that means that if somebody is a routine

17 violator installing 13 SEER in a region that

18 requires 14 SEER, you can't sell them 15 SEER,

19 you can't sell them heat pumps, you can't sell

20 anything under the rubric of a central air

21 conditioner.

22 Now, you can sell them filters. You
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1 can sell them compressors. That's the John Hurst

2 nuclear option I think that he asked about last

3 meeting, but you can't sell them anything that

4 falls under the term "central air conditioner" as

5 a product defined by Congress and that we've

6 dealt with it that way.

7 MR. McCRUDDEN: Any product, or that

8 specific covered product under subject to

9 regional standards?

10 So, in other words --

11 MR. RAWALD: Such as --

12 MR. McCRUDDEN: Just central air

13 conditioners.

14 MR. RAWALD: Central air.

15 MR. HURST: Central air conditioners is

16 defined by condensing units, heat pumps,

17 residential package units.

18 MR. RAWALD: Right. Right. Central

19 air conditioner as defined. So, everything would

20 be under 430.16. So -- or 430.32(c), I think, or

21 429.16.

22 MR. HURST: That's limited nuclear. I
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1 mean, that's --

2 MR. RAWALD: It is. It is. I

3 understand that. And this is not -- this is an

4 interpretation of the statute based upon our

5 current practice.

6 MR. WHITE: So, this is Chuck White.

7 So, does that mean Karen can't do it,

8 but John could, or does that mean all

9 manufacturers cannot?

10 MR. RAWALD: Right. So, this is Doug.

11 And the question I heard from Karen

12 was if they're violating by selling, you know,

13 Bryan Rocky's products, can I still sell them my

14 products? And the question is no.

15 If we know that person is a routine

16 violator because they're installing 13s and the

17 region requires 14, that person cannot be sold

18 central air conditioners or you will be in

19 violation.

20 If you're selling -- if someone is a

21 routine violator and you're selling to them

22 whether they're buying your products or someone
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1 else's products, you can no longer sell them

2 products.

3 That's how we interpret the breadth of

4 the product in the statutory prohibited act.

5 MR. WHITE: You can forget about your

6 $200.

7 MR. RAWALD: It seems to me that this

8 is a very effective tool that can countermand the

9 loss of a possible prohibited act.

10 So, that's why I'm saying to you in

11 response to Harvey's question, I think that this

12 particular item can actually have more teeth and

13 more effectiveness from a market point of view

14 than the Department will have from following up

15 with $200 fines to individual contractors.

16 So, from a programmatic point of view

17 it's going to be very difficult for us. I mean,

18 look at the orders of magnitude. I'm dealing

19 with seven manufacturers, 50 to 200 or 300

20 distributors and a hundred thousand contractors.

21 So, you know, the fines seem to -- they

22 become a little bit more difficult for those
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1 orders of magnitude. 

2 MS. MEYERS: So, this is Karen with

3 Rheem.

4 That's very helpful. But, again, from

5 my company's perspective, I don't sell to any

6 contractors.

7 So, then, again, how am I held liable

8 at all for any contractor installing an illegal

9 product?

10 MR. RAWALD: Right. So, this is Doug.

11 So, the only way you'd be held

12 responsible would be if a distributor that you're

13 dealing with is routinely -- the second violation

14 I discussed that's not on the board currently,

15 the one where the distributor keeps on dealing

16 with people that they know are bad people. You

17 can't deal with that distributor.

18 I mean, if we said Distributor X is a

19 violator, you can't sell to that distributor.

20 MS. MEYERS: But the distributor can

21 sell to them because they don't have a prohibited

22 act.
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1 So, does that --

2 MR. HURST: Well, sometimes the

3 distributor --

4 MS. MEYERS: Does that mean no OEM can

5 sell to that distributor?

6 MULTIPLE RESPONSES: Yes.

7 MS. SHEPHERD: Well, an OEM that knew

8 that they were a violator.

9 MR. SACHS: Once it's been noticed.

10 MS. SHEPHERD: Right.

11 MR. DORIA: Well, no, I think that

12 assumes too much. Yes, it is all OEMs -- this is

13 Jordan.

14 It is all OEMs assuming there is a

15 notice. We haven't actually resolved that,

16 right?

17 MR. McCRUDDEN: So, this is Charlie

18 with ACCA.

19 Let me ask Karen especially again. 

20 Karen doesn't sell to any contractors, but a

21 contractor has been found -- well, we haven't

22 gotten to --
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1 MR. DORIA: So, we totally violate

2 whatever the definition --

3 MR. McCRUDDEN: The contractor is a

4 routine violator. Karen had the knowledge of

5 this contractor as the bad actor.

6 Is there no connection?

7 MR. RAWALD: Right. So, Karen is not

8 selling to a dealer. So, she --

9 MR. McCRUDDEN: Right.

10 MR. RAWALD: -- cannot assume the

11 liability for what the contractor's actions are.

12 I think it would be very difficult for

13 me to say otherwise. I mean, I think it's very

14 logical what she said.

15 MR. McCRUDDEN: Right. Okay.

16 MR. RAWALD: So, what seems to me is

17 that Karen has to make sure the distributors

18 she's dealing with aren't the bad distributors.

19 That's her concern. It's from her

20 business mind.

21 MR. McCRUDDEN: Yes.

22 MR. MELCHI: And this is Jon from
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1 HARDI.

2 Just to walk me through this, so

3 Charlie is my contractor. He's knowingly

4 violating the law. It's noticed throughout the

5 channel.

6 And in the course of your

7 investigation of Charlie's company you find that,

8 hey, my, you know, Jon's distribution company was

9 colluding with him and knew this was going on.

10 MR. RAWALD: Right.

11 MR. MELCHI: Charlie has got emails

12 that say, hey, can I get this in 10 SEER?

13 At that point, there would be a notice

14 to the public, really, but specifically to the

15 OEMs that say, you got -- everybody has to cut

16 off Jon's distribution company because we have

17 found that they have been knowingly and routinely

18 violated.

19 MR. RAWALD: Correct. Correct. And

20 that will be Karen's concern then, because she

21 would say, oh, I've been dealing with Jon, but

22 Jon's been selling to Charlie and Charlie's a bad
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1 guy and Jon's a bad guy. So, I can't sell to Jon

2 either.

3 But I keep selling to Jon even if he's

4 selling it ultimately to Bryan Rocky or to

5 Harvey. It doesn't matter who Jon is selling to,

6 because Jon is now toxic. I have to stay away

7 from Jon.

8 MR. MELCHI: This is Jon from HARDI.

9 Just walking down this path, a

10 distributor would not necessarily be cut off if

11 they were unaware that Charlie's Heating and

12 Cooling was installing it in the wrong place.

13 You know that as we've talked about

14 that. But, you know, if there is a legitimate --

15 MR. RAWALD: Has to be a knowing

16 violation with the contractor.

17 MR. MELCHI: Yes, okay. Okay.

18 MS. MEYERS: So, here's my question. 

19 You said I have to make sure I'm working with

20 good distributors.

21 So, you're saying it's my requirement

22 to make sure that the distributor is --
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1 independent wholesale distributor, which I have

2 absolutely no, you know, I do not own, have no

3 physical -- I'm responsible for making sure that

4 they are operating their business --

5 MR. RAWALD: I'm shaking my head no as

6 you're talking.

7 MS. MEYERS: You said I have to make

8 sure that my distributors are abiding by -- so,

9 I'm suddenly -- you made me the police.

10 MR. RAWALD: No, that's not what I'm

11 saying.

12 MR. HURST: I think I got it.

13 MR. RAWALD: Okay.

14 (Laughter.)

15 MR. HURST: Charlie is a bad dealer

16 and he gets caught somehow. The Department

17 recognizes Charlie is bad. We all now know

18 Charlie is bad.

19 Jon can't and should not sell to

20 Charlie, but Jon's a bad distributor. He decides

21 to continue to sell to Charlie who's been

22 recognized as a bad dealer. Now, Jon's in
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1 trouble.

2 Now, we all know that Jon is bad. 

3 Karen shouldn't sell to Jon, because he has sold

4 to Charlie and we all recognize those two as bad.

5 If you continue to sell to Jon, and

6 Jon continues to sell to Charlie, I gain market

7 share.

8 (Laughter.)

9 MR. RAWALD: It doesn't matter if Jon

10 is still selling to Charlie. We know Jon is bad.

11 So, Karen can't sell to Jon anymore. But if she

12 does, then Karen is going to get a fine. She has

13 to know who the bad people are to be bad.

14 MR. SACHS: Right. This is Harvey and

15 I think the key concern is the look back --

16 MR. RAWALD: Right.

17 MR. SACHS: -- that I would assume

18 Karen would want to keep some kinds of records

19 which she keeps, but she would not be fined for

20 having sold stuff to bad guys, to Jon in

21 particular as a bad guy, before DOE had noticed

22 that Jon is a bad guy or his picture is in the
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1 post office.

2 MR. RAWALD: Right. So, this gets to

3 the exact question that Jordan and I have

4 discussed like four or five times which is, is

5 knowledge going to be only limited to a

6 DOE-official proclamation that someone is a bad

7 person, or is there something else too?

8 So, if the manufacturer gets an email

9 from Jon saying, yes, I'm dealing with Charlie, I

10 don't care, you guys have to figure it out, then

11 the manufacturer is on notice.

12 So, from the Department's point of

13 view, there should also be at least an actual

14 knowledge requirement.

15 If there's actual knowledge on the

16 part of the manufacturer that the person they're

17 dealing with is a violator routinely, then that

18 also should be sufficient in comparison to the

19 notice on our part.

20 I think the notice is -- everyone

21 agrees if we put out a notice, that's a baseline. 

22 But if you had actual knowledge independent of
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1 any notice, you shouldn't be allowed to keep

2 dealing with that person because DOE hasn't

3 caught on yet. So, that's not okay.

4 MR. SACHS: But that's where you get

5 -- this is Harvey again.

6 That's where you get that -- the first

7 incentive --

8 MR. RAWALD: Right.

9 MR. SACHS: -- that now Karen knows

10 that Jon is a bad guy and she better quit

11 selling, but it's an opportunity for Jon.

12 MS. MEYERS: Right.

13 MR. RAWALD: And I hear that. So, the

14 question is, how do we incentivize manufacturers

15 to then give us that information.

16 It seems like the best way to do it is

17 Jordan's safe harbor like to say, hey, tell us

18 what's going on and we won't fine you for what

19 happened in the past.

20 Something like that, that seems to be

21 the solution the group has been coming to or at

22 least around that.
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1 MS. MEYERS: Do you think distributors

2 should have actual knowledge if a violation is

3 taking place?

4 So, I'm supposed to turn in my

5 customer essentially if I have actual knowledge

6 and DOE does not, that they're doing something

7 wrong.

8 So, then I'm supposed to then tell my

9 customer who buys $100 million worth of equipment

10 with me and if you cut him off, I'm going to be

11 closing all my factories that, you know.

12 So, I guess I don't want to be put in

13 the position where I got to go say -- that's kind

14 of why I like the prohibited act, because I think

15 it helps to -- to Neil's question, it makes

16 compliance easier.

17 If everyone has a prohibited act, you

18 have one choice. It actually helps in

19 compliance.

20 Regardless of what happens on the

21 enforcement side, I think it makes it easier to

22 comply. Because then you as that entity have to
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1 do things to -- in your business to prevent an

2 illegal installation.

3 I don't want to be the very first

4 person in the chain responsible for those other

5 entities not putting in the business practices

6 that are required to prevent the illegal

7 installation, because I don't want to play the

8 cop.

9 And I don't want Jon to pick up market

10 share because I notice something and it's three

11 years before the Department makes a rule. So, I

12 lose all this market share because the -- so,

13 that's why I think it's a good thing.

14 MR. MELCHI: This is Jon Melchi from

15 HARDI.

16 So, you currently have a distribution

17 agreement with your customers already requiring

18 them to do certain things.

19 So, I mean --

20 MR. SACHS: Including acting wrongly.

21 MR. MELCHI: Including acting

22 wrongfully. So, I mean --
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1 MR. SHEPHERD: But -- this is Amy

2 Shepherd.

3 How is the manufacturer going to know

4 who the distributors own? I mean, that's the --

5 if this is what this all is going to hinge off

6 of, how are they going to know?

7 MR. McCRUDDEN: This is Charlie.

8 I think the triggers here are

9 essentially the notification that you --

10 MS. SHEPHERD: But I'm hearing from

11 DOE that they don't want notification. So, how

12 else are we going to -- how else are

13 manufacturers going to know?

14 MR. McCRUDDEN: And this is the due

15 process part that concerns me as a contractor. I

16 mean, if someone says, hey, I think the

17 contractor is doing the wrong thing, what

18 recourse do they have, somebody might be put on

19 this list and may not even know it. And so, how

20 do they -- was there due process and -- how do

21 they prove or get themselves off this list at

22 some point?
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1 MR. DORIA: So, this is Jordan.

2 If I could maybe just try and put --

3 I think these are all obviously important

4 questions, but I was trying to think, well, what

5 are -- we're talking about knowledge and we have

6 some guidance on what constitutes knowledge

7 knowingly.

8 But I think as we're talking about it,

9 we're sort of talking around these different

10 things. And I think they could each be different

11 triggers and treated a little differently at

12 least potentially.

13 And the way I understand it, there's

14 maybe three ways that we can think of knowledge

15 here.

16 The first is actual, right? You are

17 told someone has violated, is violating, will

18 violate, right?

19 Constructive which is that sort of fit

20 to Jon's point. You know what that individual

21 contractor business looks like and you think

22 something is amiss. And then a DOE
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1 determination, an actual -- or a DOE notice or

2 determination.

3 Are there other forms of knowledge?

4 PARTICIPANT: Warranty database.

5 MS. MEYERS: Warranty.

6 PARTICIPANT: If you see something

7 show up in your --

8 MS. MEYERS: Yes. So, if I was a

9 manufacturer and my warranty database shows that

10 Distributor A has sold five illegal units because

11 they've been registered in my warranty database,

12 what am I supposed to do?

13 I had no knowledge when I was making

14 the sale. I changed my distributor agreement. I

15 made, you know, my distributor agreement. Harvey

16 says he must lawfully do all this stuff and, you

17 know, but I now have knowledge.

18 What the heck do I do?

19 MR. EISNER: And you had asked the

20 question earlier about actual knowledge or

21 violation.

22 In this case, you know it's been
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1 installed in the wrong place. You don't know

2 whose done it.

3 If Karen sent that information to you

4 and said, I have this information that the unit

5 has been installed in the wrong place, I don't

6 know who did this act, so I don't know if have

7 to stop dealing with someone, what do you advise

8 me to do in the future, that's her hold harmless.

9 She's now asked you. Whatever you

10 tell her will be available to everybody. So,

11 they'd be subject to the same requirement and

12 wouldn't do business with them.

13 MS. MEYERS: But, Neil, then I've

14 turned in my customer. I don't want to turn in

15 my customer, because I don't know by serial

16 number who I sold that unit to.

17 MR. EISNER: No, I understand, but I'm

18 thinking in the chain. You don't know if your

19 customer, the distributor or the dealer did

20 anything wrong. The contractor may have

21 purchased it and moved it to another state to

22 install it.
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1 So, you're asking basically the

2 Department of Energy to investigate and let you

3 know whether you need to stop dealing.

4 MS. MEYERS: Well, then they're going

5 to go call my customer and say --

6 MR. EISNER: What's wrong with that if

7 your customer didn't violate the standard?

8 MS. MEYERS: I don't want to play the

9 cop here. I mean, I don't want to -- I don't

10 want to be the one going to the Department of

11 Energy and saying, you know, I sold five units to

12 Distributor A and they've all been registered in

13 my database and because they -- I can tell that

14 they were installed in an illegal area

15 MR. DORIA: So, Karen, this is Jordan.

16 I think we could potentially, I mean,

17 I don't know if everyone agrees, but we could

18 separate that out, because I think that that is a

19 different approach.

20 Like you said, it turns us into

21 investigators. With the --

22 MS. MEYERS: Well, you're talking about
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1 knowledge and --

2 MR. DORIA: Yes, but the three other

3 forms -- actual means somebody has provided you

4 with something, actual knowledge, not that you

5 went out and obtained it.

6 And I think the same is true for the

7 constructive. It's just that you're not quite as

8 sure. And DOE determination, again, it's a

9 matter of public record.

10 In my mind, these are all things that

11 effectively come to -- let's say using us as an

12 OEM. These are things that come to us that we

13 are provided with, not that we have to go out and

14 find.

15 I think that's an important

16 distinction, because one is we're simply

17 responding to things that come to us in the

18 course of doing business, and the other is we're

19 investigating it.

20 MS. MEYERS: So, if it comes to us in

21 the normal process of doing business, then we're

22 not responsible?
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1 MR. DORIA: No, I think if it comes to

2 us in the course of doing business, there could

3 be obligations. I think that's what we're sort

4 of circling around.

5 MS. SHEPHERD: See, and I think that's

6 Karen's question, though. She's sitting

7 constructively on this knowledge. She's got the

8 warranty information, she's got the serial

9 number.

10 So, constructively if you look at this

11 extra definition of knowing, would a reasonable

12 person put those two together and instead you ask

13 DOE what do I do, I think her situation is

14 falling within a knowledge bucket.

15 MS. MEYERS: I'd like us to find a way

16 to protect the distributor in this as much as

17 possible, believe it or not.

18 I know it doesn't sound like that, but

19 I want my customer protected.

20 MR. McCRUDDEN: And this is Charlie

21 with ACCA.

22 I'm going to throw in one more fly in
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1 this ointment. As I said before, there are

2 contractors who file warranty cards with the

3 wrong address deliberately, because their concern

4 is about what the manufacturer may do with that

5 information.

6 So, it could be a situation on a

7 border state where the contractor is putting in

8 his personal -- his business address with the

9 warranty cards on a product that he installed

10 legally in the other states.

11 And so, the data you have shows these

12 products -- and the warranty information that I

13 have shows these are installed illegally, that

14 may not be the case.

15 MS. MEYERS: Okay. Well, scenario

16 Number 2. We have a bunch of TXV valves out in

17 our marketplace that are very bad, massive

18 industry failure -- Gary is shaking his head.

19 So, we all go and find those units,

20 because we have to do a lot of, you know, you got

21 to do a field fix because they're failing

22 prematurely. Well, through that process you find
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1 these illegal installations.

2 I've got my service technicians out

3 there. I mean, it's a -- so, what do you do?

4 (Off the record comments.)

5 MS. MEYERS: I mean, I typically go

6 right down to where the rubber hits the road. 

7 So, that's why I'm wanting processes in place for

8 all of parts of the chain so it makes it almost

9 impossible for that to happen.

10 I know that there's always going to be

11 the bad actors. But if you have processes that

12 said this person has to do this, this person has

13 to do this, you're kind of protecting and you're

14 following the rules laid out in the enforcement

15 rule. I don't know how you can ever get a

16 violation unless you're, you know, a really good,

17 you know, the one person that's always going to

18 do it.

19 MR. CLARK: Well, Karen, I guess the

20 way I'm thinking about this a little bit is there

21 is the routinely, right, part of this. It's

22 knowingly and routinely.
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1 And so, to your point about the, you

2 know, all of a sudden you get a bad, you know, a

3 13 SEER unit being registered in the south, okay.

4 So, you know, let's say it's one time

5 that shows up and you track it down and you know

6 it went to -- you shipped the unit to a

7 distributor in Chicago, but somehow it got

8 installed in Florida.

9 At that point, I don't think that your

10 distributor has violated the law because it, one,

11 is, to me, not routinely. But to notify that

12 distributor that this has occurred, I think,

13 would be appropriate, right?

14 MS. MEYERS: I think that's what the

15 enforcement rule needs to outline is what are the

16 requirements for each party in the chain.

17 And that way you follow those, you

18 check those boxes and I think Doug's out of work. 

19 He doesn't have anything to do.

20 MR. RAWALD: I don't do air

21 conditioning cases anyway.

22 (Laughter.)
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1 MS. MEYERS: So, I mean, I'm trying to

2 make it that simple if each party in the chain

3 does A, B, and C, then we have met the

4 requirements of the Department and you cannot be

5 in violation.

6 So, I don't care if the civil penalty

7 is $500,000 a unit. I checked A, B and C. You

8 can't get me.

9 So, you know, that's, I guess, what

10 I'm trying to --

11 MR. SACHS: This is Harvey and the

12 thing that woke me up more rudely than anything

13 else in this morning's conversation was the

14 discussion of nuclear and limited nuclear

15 options, things that destroy the business at

16 whatever level that is.

17 The problem of nuclear options is it

18 takes a long time before one can invoke them. 

19 There's a lot of due process that's got to be

20 done.

21 And I guess -- I think that's a --

22 potentially unproductive route and we really need
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1 to pay some attention as it relates to what

2 Karen's been looking at.

3 What are the things we can do that

4 speed up and make compliance work better and

5 perhaps have graduated noncompliance warnings or

6 whatever else it is, can we de-escalate this and

7 again time, is what I'm asking.

8 Karen's road maps or checklists may be

9 one avenue that everybody's got skin in the game,

10 but it doesn't feel like it's philosophically

11 objectionable because it's a path to compliance

12 rather than a gotcha.

13 MR. EISNER: Well, you know, addressing

14 what I think was a legitimate concern Karen had

15 that she doesn't want to go in and get her

16 customer in trouble, but if everybody has

17 responsibility, would it be the kind of thing

18 where Karen can call a distributor instead of

19 Doug and say, we all have responsibility in this

20 chain, I just got information, it's warranty

21 information or something that's even clearer and

22 I'm passing in on to you so you can shut down the
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1 chain to find out where the violation is.

2 I mean, are there other ways? Because

3 I think she's got a legitimate concern. People

4 are not going to want to get their longtime big

5 customers in trouble especially if they think

6 they have good operators, they don't know what

7 happened, but maybe that's the way each one has

8 to go down the chain and at some point it may

9 have to get sent to DOE to resolve.

10 MR. ARNOLD: Yes, this is Dan Arnold

11 with NORDYNE. That's kind of what I'm struggling

12 with is, you know, in the scenario that's been

13 presented here, you know, Jon sells to Charlie,

14 we think Charlie is the bad guy.

15 But when Charlie is accused of selling

16 13 SEER units to the south, what do most people

17 do when they're accused of something? They deny

18 it at first, right?

19 Well, no, wait a minute, I'm selling

20 these to my brother-in-law. I get a good price

21 from Jon. So, he ships them back up north. I'm

22 really not a bad guy, but we still think he's a
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1 good guy.

2 And then when we cross the threshold

3 of, you know, okay, Karen thinks he's a bad guy,

4 Jon thinks he's a bad guy, we can't prove it, how

5 long is the DOE investigation? And then somebody

6 says, okay, well, DOE may think he's a bad guy,

7 but we're not the police.

8 Is the threshold then would everybody

9 stops selling when we start the investigation, or

10 if it takes a long time, we're going to finish it

11 because Charlie said, wait a minute, I should be

12 innocent until proven guilty, you guys come catch

13 me, you know.

14 He's a bad guy, but he's denying he's

15 a bad guy. And until you have the goods, you

16 know, again, there's other explanations for, you

17 know, reasons he could be purchasing the

18 equipment that are legitimate.

19 They're probably fairly far-fetched,

20 but I could think of some scenarios. So, where's

21 the smoking gun? When does the manufacturer --

22 when do we say, okay, we've now crossed the
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1 threshold and we have the smoking gun, he's the

2 bad guy, we're all going to do what's right?

3 I mean, if that can be defined, then

4 I think we're all for it.

5 MR. AMRANE: Could be when do you

6 publish the information or make it public?

7 MR. SACHS: Karim, this is Harvey and

8 that's what concerns me that that is the nuclear.

9 And I sure would prefer something

10 that's self-reinforcing that Karen notices a set

11 of events. And I'm going to call that a single

12 thing that she checks her database once a month

13 or once every three months.

14 At that point, I sure would like to

15 see something, I think, that says, okay, at that

16 point my job is to share that with my

17 distributors, say we've got a suspicious pattern,

18 we have to make sure that that doesn't become a -

19 - damn, that term always escapes me -- a routine

20 violation and that's just sort of an internal

21 notice.

22 I'm not sure that Doug has to be
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1 notified at that point, but that's letting the --

2 getting the distributor into the team rather than

3 playing gotcha.

4 I don't know if that's realistic. I

5 just don't want to spend three years

6 investigating somebody who's selling 500

7 multifamily jobs illegally before we can do

8 anything that will go bankrupt instead of

9 replacing those units.

10 MR. BALLO: I just want to spin out

11 this possibility of Karen finding in her warranty

12 database that there are -- there's the appearance

13 of some potentially noncompliant installations.

14 Because at that point, arguably the

15 manufacturer begins to have some constructive

16 knowledge that there may be a problem with their

17 distributor.

18 If those noncompliant installations

19 are discovered through some other process,

20 someone notices the tag and it comes back to DOE

21 through that route, DOE is going to go to

22 presumably eventually the manufacturer and say,
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1 well, when did you know?

2 And at that point if the manufacturer

3 has warranty information that's suggesting a

4 problem, if they've had that information for a

5 while, at some point it crosses that threshold

6 that the manufacturer should have known there was

7 a problem with their distributor.

8 So, by not turning in your customer,

9 you're essentially opening up that possibility

10 then that it becomes your problem down the line

11 if it's discovered that there is a noncompliante

12 installation by somebody else.

13 MR. DORIA: Tim, this is Jordan.

14 The problem with that is the product

15 that's installed is by a dealer contractor. That

16 provides no indication, I mean, the warranty

17 database will provide no indication on what

18 distributor was even involved in that

19 transaction, I don't think, on any sort of

20 routine basis.

21 PARTICIPANT: You'd have to look at the

22 serial number.
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1 MR. DORIA: Well, yes, I mean, yes, you

2 could figure it out, but --

3 MR. HURST: You'd have to research it.

4 MR. DORIA: Correct, yes.

5 MR. ROCKY: Yes. So, this is Bryan

6 from JC.

7 So, what I see as the unintended

8 consequence of this direction of line of thought

9 is if I'm as a manufacturer become known that

10 we're searching our database for violations and

11 illegal installations and that passes through to

12 our distribution chain or our factory branches to

13 contractors, contractors are going to stop

14 registering warranties, because that's going to

15 be the thing that triggers all of this activity.

16 Even in good faith I go to one of our

17 HARDI members and they go to Charlie and they

18 say, how did this happen, Charlie? And he says,

19 well, God, they must have tracked the damn

20 warranty number, the serial number.

21 MS. MEYERS: At this point I'm going to

22 say I don't want you to register anymore, because
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1 I don't want to be put in a position --

2 MR. ROCKY: So, we lose god benefits

3 for our customers and we lose good benefits for

4 us as manufacturers, as Karen brought up, if

5 there is a field problem that is related to a

6 component or a manufacturing defect or whatever.

7 Now, we can't go find those units,

8 because our customers through the contractors

9 have learned not to register warranties. So, I -

10 -

11 MR. EISNER: Isn't that assuming that

12 that is the only way that Karen can -- for

13 example, we have a unit built by Company X in

14 your yard. You read an article that it's

15 supposed to be 14 SEER. Yours was just

16 installed. It's 13 SEER.

17 So, you don't have anybody else to

18 call. Maybe the person who installed it has gone

19 out of business. So, you call the manufacturer.

20 MR. ROCKY: So, Neil, to answer that,

21 it's not a responsibility of a contractor to

22 register the warranty. It's the responsibility
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1 of the homeowner if they want the benefits.

2 MR. EISNER: I'm not talking about

3 that. I'm talking about a situation where they

4 merely all the company to say, I've got a product

5 manufactured by you, the contractor who installed

6 it is no longer around, I want to know if I'm in

7 violation of the law. I just realized it doesn't

8 meet the standard. What do I do? Do you know

9 how I can fix this?

10 She now has information that it was

11 illegally installed.

12 MR. ROCKY: But it will be for units

13 built on or after January 1, 2015 --

14 MR. EISNER: I'm assuming --

15 MR. ROCKY: After July 1st, of 2015 or

16 '16, whatever our sell-through period is. I

17 understand.

18 MR. EISNER: Okay. And I'm saying

19 there could be other ways. There could be other

20 ways that information can get out.

21 MR. DORIA: Yes, this is Jordan again.

22 I think we, I mean, the warranty
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1 discussion is a good one, but what we're really

2 again talking about is what are the different

3 mechanisms by which various parties come into

4 knowledge and what form is that knowledge, right?

5 I mean, we could say as a group that

6 we don't think warranty information should be a

7 tool relied upon for enforcement. I think that's

8 something we can talk about doing and saying

9 there are other forms of knowledge.

10 We've talked about a number of other

11 examples. We just said that there is potentially

12 a very significant downside not only for us, but

13 more importantly for our customers with this with

14 the warranty agreements.

15 So, we could say that's off the table

16 and focus on the others.

17 MR. McCRUDDEN: This is Charlie.

18 I think warranty information is

19 completely unreliable for this purpose. And I

20 think it should not be relied on.

21 I don't know if we should say it

22 shouldn't be relied on, but I also think that
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1 maybe we just stay silent on it as a group. I

2 don't know how to work that out.

3 I think the critical thing here is not

4 so much how did you get the information, because

5 the information doesn't just become available,

6 but it's the old Washington axiom, what did you

7 know and when did you know it, okay?

8 So you as a manufacturer suspect

9 something is bad. Is that the point at which a

10 clock starts, so that if any time after that

11 clock starts it comes back that there was a

12 violation, is that enough to bring you in? Or is

13 it a point in which DOE makes a notice of some

14 information that there is a suspicion, or does

15 DOE wait for the threshold that it's more than a

16 suspicion, it's a found violation, then that

17 becomes a constructive piece of information.

18 I think, Jordan, when you were trying

19 to break out ---- we have three pieces of

20 information, I think, where you said constructive

21 ---- you said actual, constructive and DOE

22 notice. I think a DOE notice is actual.
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1 MR. DORIA: I think it is a form of

2 actual. 

3 MR. McCRUDDEN: I think it's a form of

4 actual. So, I think we're stuck with two. The

5 actual ---- how you work it out, that I don't

6 know. It's this gray area of constructive or

7 what do you do with this and what responsibility

8 --

9 MR. DORIA: The responsibility of to

10 provide information to someone.

11 MR. McCRUDDEN: Anybody. Any one of

12 us, including the homeowner that we all are, or

13 the resident, needs to survive out there. What

14 do we do with that information? What are we

15 responsible for?

16 The problem or the trick is if we

17 start -- prohibited acts, to me, are things you

18 can't do, not things you should do.

19 Should you inform? How do you

20 regulate that? Should you make a call? I just

21 don't know how to do that.

22 I think we're stuck with things you
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1 can't do. And I think that, as Doug put it, it's

2 easier for him to deal with the few than the

3 hundreds of thousands.

4 MR. FERNSTROM: This is Gary.

5 It seems to me that serial number

6 tracking is too burdensome, you know. We've

7 talked about that.

8 It would probably be, in the end, as

9 close to foolproof as we can get, but it's

10 probably too burdensome and expensive for the

11 benefit we'd get.

12 MR. RAWALD: And, Gary, this is Doug

13 Rawald.

14 So, serial number tracking in what

15 way? At the DOE level, or finding individual

16 actors in record retention?

17 MR. FERNSTROM: Either way.

18 MR. RAWALD: Okay.

19 MR. FERNSTROM: I think that the notice

20 of -- or the notion of recording violators is not

21 a very practical solution either. Because

22 whoever is doing the calculating, is probably
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1 disinclined to notify anyone.

2 So, to hold distributors,

3 manufacturers responsible for selling to

4 violators, well, sure, if they know. But they're

5 not likely to know because whoever is doing it is

6 going to be very disinclined to tell.

7 Same thing with reporting. If we rely

8 on a warranty system, especially if the violator

9 is the one mailing in the warranty card, they're

10 probably not going to put the correct information

11 on it.

12 So, if we really wanted to do bottom

13 sweep, so to speak, we can go out to the field

14 and survey some customers we think may have had

15 this equipment installed.

16 I pointed that out as an option

17 before. That's kind of a threat that no matter

18 what you do, what you don't do, what you say,

19 what you don't say, in the end there's some,

20 perhaps small, risk you're going to get caught.

21 MR. RAWALD: And I think what I hear

22 you saying, Gary, as to what you said before is,
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1 if caught, you need to face some sort of

2 consequence or else getting caught won't matter.

3 MR. FERNSTROM: That's correct.

4 MR. RAWALD: Okay.

5 MR. FERNSTROM: And I think the

6 efficiency group here, you know, wants to see

7 some penalty albeit small, associated with that.

8 MR. RAWALD: For the contractors.

9 MR. FERNSTROM: Yeah. Not just the

10 violation, but -- what is the other term?

11 MR. RAWALD: You want to actually see

12 a prohibited act by which the Department can

13 charge money.

14 MR. FERNSTROM: Yes. Prohibited act.

15 MR. RAWALD: Right. I get that.

16 MR. FERNSTROM: And all this stuff in

17 the middle, we can talk about it, but it's really

18 not actionable.

19 MR. DORIA: So, this is Jordan.

20 I mean, going back to the one

21 prohibited act, which we have in statute, which

22 is the one prohibited act for private labeler,
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1 you know, the problem that we have -- and unless

2 we identify what are the violations, what

3 constitutes the team, or the distributors in

4 particular, I don't know how this act can be

5 enforced. And I certainly don't know what I can

6 tell my business to do or not to.

7 So, I understand from your perspective

8 saying that, you know, ultimately this is about

9 what's installed where. I don't intuitively

10 disagree with that.

11 But to try and fulfill the obligation

12 that we have here, I think we still need to be

13 focused on answering those questions on

14 definitions.

15 MR. FERNSTROM: And Jordan, to respond,

16 I think it's very unlikely the distributor is

17 going to knowingly sell a product. Because

18 whoever is buying it with the intention of

19 violating is certainly not going to tell the

20 distributor.

21 So, would one contractor report on

22 another? Maybe, but I think that's unlikely.
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1 MR. DORIA: Well, I bet the -- this is

2 Jordan.

3 I bet the contractor's way in that, if

4 you think that somebody is consistently

5 undercutting you by doing something illegal,

6 right, I think that would be potentially a pretty

7 strong competitive motivation to do that.

8 MR. McCRUDDEN: And this is Charlie

9 with ACCA.

10 I'll weigh in for the contractors in

11 that we had a board meeting two weeks ago and we

12 talked about some of the stuff. And there was

13 earnest interest in the whistleblower type of

14 situation.

15 I know that's not the word we're

16 supposed to use, but the ability to report 

17 violations, potential violations, suspected

18 violations.

19 MR. FERNSTROM: So, this is Gary again.

20 Whistleblower is a good term because

21 it's reasonably descriptive of what we're talking

22 about here.
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1 My experience comes from the pool pump

2 situation in California where a good number of

3 pool pumps, I believe, are installed, which are

4 not in compliance with the California Energy

5 Commission's regulations.

6 Now, one pool pump contractor may have

7 suspicion that another is undercutting, but they

8 don't necessarily have direct knowledge.

9 And in order to allege a complaint,

10 you pretty much have to have direct knowledge. 

11 So the whistleblower system doesn't work very

12 well in that regard.

13 By direct knowledge, I needn't know

14 where your competing contractor installed the

15 noncompliant unit.

16 MR. DORIA: So, Gary, this is Jordan.

17 I can see why that approach would be

18 hard when you set the burden so high, but I don't

19 know -- there's certainly nothing that mandates

20 we would need to do that. Not that I'm aware of

21 anyway.

22 MR. McCRUDDEN: And this is Charlie
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1 with ACCA.

2 I mean, we had a similar situation as

3 I mentioned before with Section 608 Clean Air Act

4 compliance rules with HCSCs.

5 And contractors have tried and have

6 made calls to the EPA hotline on this. In fact,

7 part of our board meeting, we had EPA folks in --

8 - and we're going to follow up with some meetings

9 with the enforcement folks on this.

10 The problem with compliance with 608

11 is you're talking about a gas that's been vented. 

12 It's gone.

13 The situation here is you've got a

14 product in the basement. It's still there, okay.

15 And so, there's a way to sort of

16 figure out, how did this get here, you know, this

17 shouldn't be here.

18 And then I essentially leave it up to

19 DOE to figure that, and how to aggressively

20 attack that, but I think that --- I think that

21 the contractors will see violations and be able

22 to report violations based on how much they
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1 already tried to report on essentially what is an

2 unenforceable rule dealing with gas, but knowing

3 what they told me, too, two weeks ago.

4 MR. FERNSTROM: Well, let me follow up

5 with some questions on that. So, suppose I have

6 an ethical contractor being undercut by one who

7 is installing noncompliant equipment.

8 I have a suspicion that this is going

9 on. I don't have names and addresses, the

10 concrete evidence that I was previously deferring

11 to.

12 So, I call up Doug and I say, hey,

13 Doug, I think this contractor is cheating. Well,

14 Doug is faced then with the opportunity to

15 investigate this or not.

16 He's most likely going to say, well,

17 what evidence do you have? Well, I just think

18 so.

19 Well, you know, that's not going to be

20 very compelling for Doug to launch an

21 investigation.

22 So I still believe that unless you
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1 have compelling evidence of cheating ---

2 MR. HURST: This is John Hurst for

3 Lennox.

4 Gary, I think you would have

5 compelling evidence in the form --- two forms

6 that I would see. To Charlie's point, the gas is

7 vented and you have to know what you're looking

8 at. It's odorless and colorless and you don't

9 really see it.

10 A condensing unit will sit on the side

11 of the house for 12, 15, sometimes 20 years.

12 So, you have a unit, you have a serial

13 number, you know when it was made -- or even

14 before that, if I'm a dealer, if I'm Chuck and I

15 go in and I look at -- you know, sometimes a

16 consumer will say, here's the other two bids that

17 I got.

18 And you look at them -- and I get

19 these all the time because my friends fax them to

20 me or email. And they say, I'm confused, what am

21 I looking at?

22 Well, you're looking at two bids for
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1 a 14 SEER system and a 95 percent furnace and

2 you're looking at a noncompliant, against the

3 law, illegal 13 SEER condensing unit that, by

4 law, cannot be installed in your state.

5 Well, that's a pretty good body of

6 evidence. So, I wouldn't call --- if I'm a

7 contractor out there, I'm not going to call Doug

8 with a feeling. I'm going to call him with a PDF

9 of a work ticket that says they just bid on a

10 job, and it's at this customer's location in this

11 state that's in the south.

12 Or when I go in on my first repair

13 call, I've got the condensing unit sitting right

14 there with a serial number that says, this was

15 made in 2015 or 2016, and that's your body of

16 evidence.

17 Then if everybody is retaining records

18 ---- and I do think it's reasonable for people to

19 retain records of what they sold to whom, because

20 we do it today -- they do their investigation and

21 say, hey, distributor, who did you sell this to? 

22 Or manufacturer, which distributor did you sell
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1 this to?

2 And I think there's a pretty good

3 chain of custody of where that piece of equipment

4 came from and where it went to, specifically if

5 you have it installed at the side of the house in

6 the wrong state.

7 MR. FERNSTROM: So, this is Gary.

8 Where do you get copies of competing

9 bids? Who would you be, the competing contractor

10 that gets copies, or the distributor, or ---

11 MR. HURST: Yeah -- I think all of the

12 above, because I think, you know, who in this

13 room that works in the HVAC industry has not

14 gotten bids from neighbors or friends or

15 relatives to say, hey, check this out, what am I

16 looking at?

17 Anybody not ever gotten that?

18 (Laughter.)

19 MR. FERNSTROM: Well, neighbors,

20 relatives, friends, sure, because ---

21 MR. HURST: Everybody's got a guy

22 though. That's how this business works. You
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1 call --- you phone a friend and, you know, I'll

2 talk to friends of friends, people that I've

3 never met before, but I've got a friend that's

4 getting a new ---- and, you know, there's a lot

5 of us in this industry.

6 I think a lot of people --- consumers

7 do as much research as they can on the internet

8 and they phone a friend.

9 MR. FERNSTROM: Okay. So ---

10 MR. HURST: You did it to me a couple

11 weeks ago. I'm pointing at Elizabeth Noll from

12 NRDC.

13 (Laughter.)

14 MR. FERNSTROM: So, that's an excellent

15 point. And I've, in this sense, been a friend to

16 people.

17 MR. HURST: And I'm going to ask you

18 about my pool pump because I don't know if I'm

19 compliant.

20 MR. FERNSTROM: And I've seen a lot of

21 cases of noncompliance, but I don't phone up

22 David and say, hey, this contractor installed a
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1 noncompliant pool pump at this location. I don't

2 feel comfortable doing that.

3 MR. DORIA: Well, this is Jordan again.

4 I mean, I think going back to thinking

5 about how this may compare to the current state -

6 --- and Doug, please chime in if this is

7 incorrect. I believe when you talked about how

8 DOE investigations against manufacturers are

9 triggered today -- I don't know if you said it

10 was a majority of the time, but you said that

11 it's a very common occurrence that it's one

12 person in industry suggesting that DOE

13 investigate someone else.

14 MR. RAWALD: That happens often.

15 MR. DORIA: It happens often. So, I

16 don't know why we wouldn't assume that would

17 continue to be true here. It's competitive

18 pressures that drive it. 

19 So again, I mean, the point here of

20 what we're saying is there a cost to compliance.

21 The inverse of that is that there is

22 a cost savings for noncompliance and somebody is
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1 losing out as a result of somebody else doing

2 that.

3 Just like we, as manufacturers today,

4 can report on somebody not meeting a requirement

5 for the manufacturer, I think you can see the

6 same thing, you know.

7 MR. HURST: Yeah, I would say also ---

8 this is John Hurst for Lennox, you know, we use

9 the example of permitting in California.

10 There is a financial disincentive for

11 the contractor to do the right thing today and we

12 all know why it's not working well.

13 To Jordan's point, there is a

14 financial incentive for Charlie's good

15 contractors, guys like Chuck, to ensure that

16 there is an even playing field and that there

17 aren't rogue actors.

18 And so, you know, professional

19 organizations police themselves. You might call

20 it ratting each other out, but attorneys and

21 doctors ---- and even HVAC professionals who are

22 the professionals in the industry, have an
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1 incentive, a financial incentive, an economic

2 incentive to do the right thing or to out those

3 who are not complying with the statute.

4 MR. WHITE: But --- this is Chuck

5 White.

6 If I'm not a good actor, I also have

7 an incentive to call up and say, I think

8 Charlie's Heating and Air Conditioning isn't

9 working right, and get Doug to come over to his

10 place and start going through all his records and

11 taking up his time with unfounded claims, which

12 drives up his overhead and gives me a better edge

13 because I've taken his time away from doing work.

14 MR. BALLO: That's sinister.

15 MR. WHITE: To have unfounded

16 accusations against people is not fair.

17 MR. CLARK: I thought --- this is Gary

18 Clark from ---

19 MR. WHITE: One more thing to finish. 

20 Karen doesn't want to be the policeman. We don't

21 want to be the policeman either. Distributors

22 don't want to be the policeman.
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1 I'm just telling it like it is. We

2 don't want to rat out our friends. We might want

3 to rat out our enemies, but ---

4 MR. HURST: I don't want to rat out

5 friends or enemies. I want to rat out people

6 that aren't abiding by the law.

7 And, you know ---- we've all seen, you

8 know, TV reports of, you know, some loon calling

9 911 because McDonald's ran out of chicken

10 nuggets. And then there's a penalty against

11 people that call 911 for stupid reasons, but I

12 don't know if the DOE could do something similar

13 when you call 1-800-BAD-SEER, but there's got to

14 be some sort of way to parse through that.

15 MR. CLARK: This is Gary Clark with

16 Goodman and I guess I'm a little bit confused by

17 the conversation, yet to Charlie's point, you got

18 a unit sitting up there.

19 I thought we were putting on the unit

20 --- we said we would put on the unit if the unit

21 was compliant or not. It's going to sit outside

22 somebody's house for 15 or 20 years, hopefully,
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1 right, if it's been put in appropriately.

2 And this idea of diverting attention

3 and stuff, I think Doug would say, well, what's

4 your proof?

5 It's like, if you've got six pictures

6 of rating plates that show that it's

7 noncompliant, then Doug's probably likely more --

8 - is more likely to act than if you say, well, I

9 think this guy is, you know, he's undercutting on

10 my bids and so I think he's cheating.

11 MR. HURST: Yeah, I'm not going to give

12 you the name, but I think he's cheating. Click.

13 MR. CLARK: But I thought we were

14 trying to --- if putting this information on the

15 rating plate is not of benefit, then I don't want

16 to do it.

17 If it is, then let's, you know ----

18 but I thought that's why we were doing that, so

19 that there could be some policing available so

20 that if Chuck or Charlie's HVAC goes out and

21 services a unit and it's like, holy smokes, every

22 time I, you know, go out on a call, I find these
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1 noncompliant units. Gee, what's going?

2 MR. FERNSTROM: This is Gary for the

3 California IOUs.

4 Let me make a position statement. I

5 don't think that whistleblowing is going to work

6 very well.

7 That does not mean that it should not

8 be an option, because obviously in some cases

9 Doug finds out about these situations.

10 MR. CLARK: I'm not interested in

11 adding cost to my equipment if it's not something

12 important.

13 MR. FERNSTROM: It is important.

14 MR. CLARK: You just said it wasn't.

15 MR. FERNSTROM: I didn't ---

16 MR. CLARK: You just said it wasn't.

17 MR. FERNSTROM: I didn't say it wasn't

18 important. Whether the report of noncompliance

19 comes in by competitor through a whistleblowing

20 process or whether it's observed by a building

21 inspector through an official approval process,

22 having a label is important. I never said it
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1 wasn't important.

2 I don't think the whistleblowing

3 process as a matter of compliance is going to 

4 work very well. However, that doesn't mean we

5 shouldn't leave that avenue open. Of course we

6 should.

7 I just think some additional process

8 is needed to follow up on a broad-based basis to

9 catch those potential violations that don't come

10 in through a whistleblowing process.

11 MR. RAWALD: So, I want to interject,

12 Gary and --- both Garys, and say that from the

13 Department's point of view, the concession by the

14 manufacturers -- the voluntary decision to put on

15 the products ---- that they should not be

16 somewhere, is probably the best thing to come out

17 of this eight days we've had so far.

18 So, I think that's --- that's the

19 thing I've gone back to the Department with the

20 most pride from this group's progress. So I

21 think it's really important from the Department's

22 point of view.
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1 I think it adds a lot of value. I

2 think it helps deter contractors from putting in

3 bids because they're easier to be caught. I

4 think it makes it easier for violations to be

5 reported. I think it makes it easier for

6 violations to be found. I think it's very

7 important.

8 So, I do want to stress that fact. I

9 think it's really important. I appreciate that.

10 MR. WHITE: This is Chuck White.

11 I'd like to clarify ---- I think the

12 label is important, too, and I think it's going

13 to help up and down the chain.

14 I'm all for product that's installed

15 in front of your face, obviously this is wrong,

16 but suspicions, accusations, unfounded, baseless

17 things -- if it's tangible, obvious, here it is

18 right in front of you, that's obviously a

19 violation.

20 But making accusations against people

21 because you have this gut feeling or even though

22 you have an estimate in front of you, there's a
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1 lot of bait and switch going on. 

2 Oh, yeah, that's right. I forgot. 

3 That's my form I use somewhere else. I can still

4 do the job, but it's going to cost a little more.

5 I don't buy into that, but there are

6 certainly errors that get made in paperwork.

7 MR. RAWALD: This is Doug.

8 Well, I'm very sensitive to the idea

9 of folks feeling like they're being turned in

10 merely to waste their time. We get that already.

11 So, in the very real world scenario

12 where someone will complain about a

13 manufacturer's product, and then I go to the

14 manufacturer and have them produce records,

15 manufacturers who --- on many occasions have come

16 back and said, why are you bothering me with

17 this? This person --- somebody just ratted me

18 out, didn't they, they're just trying to waste

19 your time. Oh, you heard from Jon who hates me. 

20 That's who called you, isn't it?

21 So, we have to be very judicious in

22 how we use our time and resources, because I have
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1 a lot of things to follow up on in my plate,

2 right?

3 So, the complaints that are more

4 verifiable, like with the name plate, or with the

5 bid, are things that are more likely followed up

6 on than the John Hurst, worst-case ---- he's a

7 bad actor, hang up, you know. I'm probably not

8 going to follow up on those.

9 So if it will make the contractors

10 feel better, perhaps we can establish, as part of

11 an investigative-type rule, a threshold of what

12 minimum evidence should be provided to the DOE to

13 then trigger an investigation. That may be

14 something that we can consider.

15 John, you support that?

16 MR. HURST: Strongly support that.

17 MR. RAWALD: Okay. So I mean, we can

18 do that. We can say, in order to initiate an

19 investigation on a contractor, dealer or

20 distributor, you should provide DOE with the

21 following information. And that could be ---

22 once again, when we have the webpage submission. 
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1 And when you have the voice mailbox, you can say,

2 please provide the following information if you

3 want DOE to follow up on it.

4 Those are things that we can consider

5 having out there and I'm interested in them.

6 I don't want to waste people's time

7 and I certainly don't want to be used as a tool

8 for competitive advantage, right?

9 I don't go using us in order to get

10 ahead. So that's not the point of the

11 government's time or resources here. So, I get

12 that.

13 So, I don't mind working on that if

14 that's something that you folks are interested

15 in.

16 MR. CLARK: Thank you.

17 MR. RAWALD: Okay.

18 MR. EISNER: All right. This is

19 probably a good time to take a break for lunch.

20 MR. RAWALD: If I could --- so, a

21 couple of record keeping things. So people may

22 have noticed that Scott Harris has not been back
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1 since the first meeting.

2 We heard today that he's withdrawn

3 from the group. So, Dave Hungerford is carrying

4 all the water for ASRAC for this group at this

5 point.

6 MR. SACHS: We're in trouble.

7 MR. RAWALD: What's that?

8 MR. SACHS: We're in trouble.

9 MR. RAWALD: I know. The group keeps

10 getting smaller and smaller. It's like we're

11 Survivor. We're throwing people off the island. 

12 They're winning instead.

13 (Laughter.)

14 MR. RAWALD: I do have copies of a

15 very, very draft version of the circular that we

16 would want to have for the Department, to inform

17 people of what we are doing.

18 So I'm going to give it to you folks

19 to comment on liberally. Understand that this is

20 a very early stage meant to help us get a

21 discussion, because I know people want to look at

22 it, especially Harvey, and give me their
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1 comments.

2 So, I want to give it to you to look

3 at now. Want to look at it at lunch? Want to

4 look at it tonight? We can talk about it

5 whenever you folks want, but I want you to have

6 it so you can look at it and give us ideas, okay,

7 and give us your thoughts.

8 I think it's pretty nice. I think

9 it's a good start, but I want to at least start a

10 discussion on that.

11 MS. NOLL: This is Elizabeth.

12 I have a question along those lines

13 going back to the very first topic of the day --

14 on the manufacturer label.

15 Is there a PDF that could be shared

16 with the groups so we can share it with our

17 people?

18 MR. ROCKY: Sorry. Are you referring

19 specifically to the one that I sent out or passed

20 out?

21 MS. NOLL: Any example that

22 demonstrates what we're talking about here.
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1 MR. ROCKY: So, I have no problem

2 sending --- I have it.

3 MR. RAWALD: Of the intended label?

4 MR. ROCKY: Yeah, which we sent --- I

5 gave a couple copies that are circulating --

6 MS. NOLL: He didn't see the copy.

7 MR. ROCKY: Oh.

8 MS. NOLL: He wasn't here.

9 MR. ROCKY: He wasn't here. You're

10 right.

11 I had sent copies around, Doug. I'm

12 assuming that people have put them in their

13 pockets, because I didn't get them back. I

14 figured Gary was taking that one.

15 So, ahead of discussion, this is what

16 I can do today.

17 MR. RAWALD: Okay.

18 MR. ROCKY: And as far as the text and

19 everything else we had the discussion of should

20 there be a specific font size and text size and

21 everything else. And it's all based on real

22 estate that's available, right?
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1 So Doug, you can have those, but I'll

2 send the PDF to you or to Laura or whoever and we

3 can send this out. It's nothing unique to this.

4 I will point out there is one error on

5 this format that was pointed out to me

6 afterwards.

7 The actual data shown is for a

8 three-phase unit, not a single-phase unit. So it

9 was not specifically applied, but that's because

10 I pulled up the wrong model from my set to look

11 at.

12 MR. RAWALD: I'm sure one of your

13 fellow manufacturers pointed it out to you.

14 MR. ROCKY: No, but actually I had Jeff

15 Nichols, in our engineering group, pointed out

16 that I was using an invalid model number.

17 MR. RAWALD: Okay. Thank you, Bryan.

18 MR. ROCKY: But anyway, I'll send that

19 to you and we can just distribute it. There's

20 nothing there --- this is actual size. It's what

21 I can do today. It's not what everybody else can

22 do, as we talked about, but it's from a format
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1 that matches what the AHRI Unitary, Regulatory

2 and Compliance Committee has talked about as far

3 as verbiage in it being presented. So, this is

4 an example of how this could look.

5 The other thing in particular, the one

6 that's prohibited in southwest and southeast ----

7 I'll add a picture, but taken about eight feet

8 away from the unit and it's legible at that

9 distance.

10 MR. RAWALD: Okay.

11 MR. ROCKY: As we lead into discussion,

12 it said there was no intent to make this legible

13 from 20 feet or 10 feet or whatever, but it's,

14 again this is real size. This is what I can do.

15 Actually, I sent the picture to Laura. 

16 So if you zoom out, Laura, that picture is taken

17 roughly seven feet away from the unit with my

18 iPhone. And you can see the text right there in

19 the middle. It's pretty straightforward of what

20 it shows.

21 MR. RAWALD: Okay.

22 MR. ROCKY: So ---
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1 MR. FERNSTROM: So this is Gary.

2 I'd just like to observe there's a

3 whole piece of the side of the unit there that

4 doesn't have any label at all on it.

5 (Laughter.)

6 MR. EISNER: So, do you want an

7 additional label or ---

8 MR. ROCKY: So, I will point out that

9 below that I have a service panel with this nice,

10 big, pink label and another label below that. 

11 And that some manufacturers do not put that label

12 in that location because of the opportunity to

13 have it burned by the service torch from the guys

14 installing his line sets, that the space of the

15 sheet metal that's available is not consistent

16 between manufacturers.

17 It just happens that this model for

18 me, I have lots of room whereas other

19 manufacturers don't.

20 And we also, as I think I've already

21 stated, we took an opportunity a year ago to

22 standardize a font and a format to my rating
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1 plate that consolidated two other labels into one

2 label.

3 Because every time you put a label on

4 and it's costing, we all are about having cost

5 competitive solutions for our homeowners.

6 MR. FERNSTROM: Okay. So, I was just

7 kidding.

8 (Simultaneous speaking.)

9 MR. EISNER: It's time to break for

10 lunch. Let's come back after 1:00.

11 (Whereupon, the proceedings went off

12 the record at 12:04 p.m. for a lunch recess and

13 went back on the record at 1:05 p.m.)

14 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N

15 1:05 p.m.

16 MR. EISNER: All set? Okay. Let's get

17 started. I would suggest that we take a break

18 from distributors and go through the list of

19 things that DOE was supposed to look at between

20 meetings.

21 The first one I think you've already

22 talked about. Product definition.
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1 MR. RAWALD: So, I'm not looking at the

2 ---- if Laura can bring up the list of do-outs.

3 MS. DEGITZ: This?

4 MR. RAWALD: No, this one we're looking

5 at -- action items.

6 MR. EISNER: The second one for

7 everybody's information is the Department's

8 opinion on definitions.

9 MR. RAWALD: So the terms we defined to

10 date are dealer, contractor and installer. So,

11 we all had a general feeling about -- that they

12 are sufficient.

13 The Department has some ---- just some

14 wordsmithing they want to do to make sure it's -

15 --- that these are the best definitions.

16 I'll bring those to you guys tomorrow. 

17 We can look at them, but it seems like for the

18 most part they're very comfortable with what you

19 guys proposed. So, I don't think that's an

20 issue.

21 MR. EISNER: All right. The next one

22 is bringing back violations for
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1 dealers/contractors and distributors.

2 MR. RAWALD: Right. And that's what we

3 were talking about at length this morning were

4 the violations as proposed.

5 And so, what we're comfortable with is

6 as Laura has these three violations of types that

7 we have here.

8 So, the two types in the distributor

9 world, both the selling to someone that you know

10 is going to do something bad, and also selling to

11 someone that you know is reputed to be a bad

12 person, and then the contractor installing or

13 selling in a place that shouldn't be. So, we're

14 comfortable with that.

15 Once again, there's some possible

16 wordsmithing they want to do with the, it shall

17 be a violation, term. Which ---- when we get

18 around to actually hammering out how to write it

19 as a regulation, we would do, but the substance

20 is very --- we're comfortable with here. I think

21 we're all comfortable with that.

22 MR. EISNER: Okay. The next one is
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1 split opinions on prohibited acts.

2 MR. RAWALD: Right. And I think I

3 mentioned earlier this morning the Department

4 still is not taking a position on whether we

5 should or should not adopt prohibited acts.

6 We're really hoping for the group to

7 come to a consensus on the issue and come to us

8 with that. I think that's where we are.

9 MR. DORIA: Doug, this is Jordan.

10 I'm sorry, if I can just ask a

11 question on the 2 distributors -- what is the

12 difference between the two?

13 MR. RAWALD: So, the first is a person

14 walks into the distributor and says I'm going to

15 go to Mississippi with this thing, and you sell

16 it to them anyway. So, that's a violation for

17 the distributor to do that.

18 The second is the distributor sells to

19 a guy who's on the list that Jon was talking

20 about. They're on the list and the distributor

21 still sells to them anyway. So, that's basically

22 the two differences.
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1 MR. DORIA: Okay, thank you.

2 MR. EISNER: Okay. Then does DOE have

3 the legal authority to require contractors to fix

4 installations?

5 MR. RAWALD: Okay. So, when I talked

6 to Tim Ballo about this last week ---- just to

7 give them where we were because I want to give

8 the advocates a chance to look at some of this a

9 little bit further, because they presented it.

10 So the Department's very conservative

11 legal opinion is that we do not have the

12 authority to require this, but we're open ---- if

13 there's any sort of other research out there, any

14 sort of things for us to look at, but we have not

15 found in our own research, in our own

16 understanding of EPCA -- the authority to require

17 our installers to replace a noncompliant unit

18 with a compliant unit.

19 Cell phone is going off there.

20 And so, absent any sort of further

21 information from the advocate folks, we're going

22 to take that pretty conservative position on
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1 that.

2 What we do feel we have the authority

3 to require is a contractor to notify his customer

4 that they received that noncompliant unit, which

5 will then give the customer the ability to sue

6 the contractor or take whatever action that may

7 be appropriate to resolve it on their own,

8 consistent with what we do from the manufacturing

9 of noncompliant products currently, which is

10 where the manufacturer notifies those who are

11 downstream who then can then take their own

12 individual actions against the manufacturer.

13 So that's the Department's

14 conservative legal position, but I do want to

15 open it up to see if any of the advocates have

16 any more information after I've talked to him and

17 want more time to look at the issue possibly.

18 MR. BALLO: This is Tim and we did

19 discuss the sum of the email over the last few

20 days.

21 And I think the fact that it's in the

22 DOE civil penalty guidance that remediation gets
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1 weighed on the calculation of the civil penalty

2 is helpful.

3 One of the ideas that I think, maybe

4 Charlie Harak, threw out is there possibly an FTC

5 role here in that -- is the installation of a

6 product outside the region, could that

7 potentially raise to the level of an unfair,

8 deceptive act or practice in trade such that FTC

9 could enforce and require remediation for the

10 consumer.

11 So, Charlie's suggestion was maybe

12 some kind of MOU or understanding where DOE will

13 advise FTC of bad actors who have engaged in a

14 pattern or practice of misleading customers and

15 installing, or assisting in the installation, of

16 noncompliant equipment within FTC taking

17 enforcement action as appropriate on getting

18 these referrals from DOE to the extent that they

19 may raise to the level of an unfair and deceptive

20 act or practice.

21 So I don't know if that's something

22 that needs to be bounced off of FTC, whether they
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1 think there's anything that --- a role for them

2 in reinforcing this.

3 MR. RAWALD: So, I can ask Hampton the

4 question -- Hampton being the FTC gentleman that

5 came in the second week of the meeting.

6 I would guess what he would say is, it

7 depends, because he's a lawyer. That's a very

8 lawyerly answer.

9 So he'll say, the facts could rise and

10 that would give him a possible action, but he

11 couldn't say offhand with a hypothetical. So --

12 but I think they would at least be willing to

13 entertain the notion.

14 But the idea of us advising them of

15 bad actors -- I think that's what we're talking

16 about anyway with the whole routine violator

17 thing.

18 So, I think adding FTC to the list of

19 who we would advise, in addition to OEMs, would

20 make sense and I don't see why I wouldn't do

21 that. So, or at least give Hampton advice to

22 keep an eye on that for his own purposes.
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1 So we could do that and then of course

2 the advocacy groups can then call Hampton and

3 say, look, did you see this on here and, you

4 know, make sure you go after this person or at

5 least look at it. So to possibly help him because

6 he may not know it or he may have a lot of other

7 things on his mind and could use some nudging.

8 So ---- but I'll talk to him about the

9 general question that you've asked.

10 MR. EISNER: I think ---

11 MR. RAWALD: I'm sorry. So, Tim, also

12 brought up the point of -- that in our penalty

13 guidance, we do say that's subsequent remedial

14 actions.

15 So, things that people do to make up

16 for the bad thing they made, will be considered

17 in assessing what will be the ultimate civil

18 penalty.

19 So, that would be of note if we ever

20 wanted to actually charge contractors money than

21 for doing the thing that it would be less money

22 to be charged because they're replacing the item.
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1 If we're having no prohibited act

2 against the contractor and there's no money being

3 charged, that wouldn't play into it, but it might

4 be a way of getting off the bad actor list or

5 never getting on in the first place.

6 So, if we may say, well, this person

7 did something bad five times, but they replaced

8 all of them. Don't put them on the routine

9 violator list, because they've actually proven to

10 be --- they've fixed all the errors.

11 Some reason that we could consider ---

12 - I guess that would be analogous or at least

13 somewhat like that.

14 MR. EISNER: Any other comments on

15 this? Any questions?

16 (No response.)

17 MR. EISNER: Okay. The next issue is

18 length of time records must be kept.

19 MR. RAWALD: Right. So, the

20 Department's opinion is five years. So our

21 statute of limitations is five years for us. And

22 that goes from -- according to a Supreme Court
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1 case in 2013, from the date the act is completed

2 by the manufacturer.

3 So, even if we were able to find

4 something eight years later in the scenario

5 Harvey and I were discussing last meeting, we

6 wouldn't be able to do anything about it at that

7 point because it would already be too far past

8 the time when the action was completed.

9 So, there's no reason to keep --- make

10 people keep records if we can't do anything with

11 it.

12 So, our statute being five years, our

13 preference would be to have a five-year record

14 retention scheme.

15 Yes, John.

16 JOHN HURST: For clarification, you

17 said manufacturer --- the act actually occurs at

18 installation --

19 MR. RAWALD: Right.

20 JOHN HURST: ---- would it be five

21 years from installation or ---

22 MR. RAWALD: You're correct. It would
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1 be five years from installation.

2 JOHN HURST: Okay.

3 MR. RAWALD: So, we would consider the

4 action to be complete the date it was installed

5 in noncompliance.

6 JOHN HURST: Okay.

7 MR. RAWALD: So, if it took us eight

8 years to figure out that it was a noncompliant

9 unit, we would be past the point of being able to

10 take an action upon it.

11 MR. EISNER: Any other questions or

12 comments on that?

13 MR. MELCHI: Doug, you said five years,

14 would that --- for my members, that would be five

15 years from the date it leaves their store as

16 well?

17 MR. RAWALD: That's not --- so, I

18 passed around record retention language with

19 Charlie and Chuck and Jon and also Steve Porter,

20 and I think we've gotten pretty close to

21 something workable and I really appreciate the

22 help they've given me.
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1 I think that the way I phrased it was

2 ---- it will be five years when it leaves your

3 hands.

4 MR. MELCHI: Okay. I just wanted to

5 make sure in case, you know, some guy holds onto

6 a piece of equipment for ---

7 MR. RAWALD: Right. You can't know

8 when it's going to be installed --

9 MR. MELCHI: Yes.

10 MR. RAWALD: It's from when it leaves

11 your shop. So, that way you can keep your own

12 record retention practice.

13 You can say, hey, you know, I know

14 five years from today I can throw this away. So,

15 whatever practice you obtain for doing that.

16 MR. McCRUDDEN: So, this is Charlie

17 with ACCA.

18 So, five years from the point when it

19 leaves your hands ---- for the contractor, that's

20 technically being installed.

21 MR. RAWALD: Right.

22 MR. McCRUDDEN: Okay.
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1 MR. EISNER: Any other comments?

2 (No response.)

3 MR. EISNER: Okay. The next one is

4 skeleton of rulemaking. 

5 MR. RAWALD: So, Laura has been ably

6 working on something, but we're not going to

7 share ---- we're getting ahead of the eight ball.

8 So, I mean, our whole point here is to

9 make things move as soon as this is over so we

10 can get things going.

11 So, like I say, we're already working

12 on things. So, I think that we're making

13 progress where it should be.

14 So, folks should feel comfortable that

15 we're going to do what we need to do to get this

16 in place as soon as possible when we finish up --

17 -- hopefully next week.

18 MR. EISNER: Any comments? Questions?

19 (No response.)

20 MR. EISNER: Okay. That brings us up

21 to the tri-fold ideas for group to review, and

22 you passed that out at lunchtime.
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1 MR. RAWALD: Right. So, I passed it

2 around. So, this is our basic idea of what will

3 be a helpful item.

4 What we will want to do is we have a

5 webpage. This will be downloadable from the

6 webpage. You can link to our webpage or to the

7 actual docket of folks who download it.

8 The contractor goes into a form ----

9 make sure to slide that across the table ---- to

10 a customer so they're aware of what's going on. 

11 So, that's the kind of basic thing.

12 We have not worked with a mock-up of

13 something the distributors could hang up or

14 anything like that, but we've talked about that

15 idea as well.

16 So this is the basic information

17 pamphlet. This is completely in the working

18 stages.

19 So, any ideas you have, any input you

20 have we are very receptive to. We want to make

21 sure it's both effective and also understandable.

22 So, you know, if you want to look at
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1 it tonight, come back with any ideas or thoughts,

2 that would really help us move this along to be a

3 constructive document.

4 MR. HUNGERFORD: I have one off the

5 top.

6 MR. RAWALD: Okay. 

7 MR. HUNGERFORD: Under the heading,

8 "Why Should I Follow the Rules and Buy Central

9 Air Conditions that Meet Standards," the text

10 relating to that is all about how much you can

11 get in trouble.

12 MR. RAWALD: Yes.

13 MR. HUNGERFORD: And it seems like

14 you'd probably want to lead with ---

15 MR. RAWALD: The benefits?

16 MR. HUNGERFORD: -- the benefits,

17 right.

18 MR. RAWALD: Yeah, I noticed that as

19 well. I was thinking about it last night. So,

20 okay.

21 MR. HUNGERFORD: And I'd also want you

22 --- I also want, rather than wrapping
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1 southwestern into southern to call out the

2 southwestern region as well.

3 MR. RAWALD: Okay.

4 MR. HUNGERFORD: It happens in a couple

5 -- three different places.

6 MR. RAWALD: How about having a

7 different one for the southwest versus the

8 southeastern? 

9 Would that be helpful? Would that

10 make it easier, or more complicated?

11 MR. HUNGERFORD: Only if it --- the

12 purpose of it was to explain EER versus SEER.

13 MR. RAWALD: Right. Here's what I'm

14 getting at is, more people are living in the

15 southeast than the southwest because there's more

16 states.

17 So -- but I mean California is a large

18 state. So, that means there's more people in the

19 southwest possibly, but it seems to me that they

20 don't even know some of the stuff that

21 southwestern folks might.

22 So, I guess just offhand ---- do
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1 people think there's maybe more value in having a

2 separate southwestern one and a separate

3 southeastern one for purposes of dealing with

4 southeastern clients.

5 MR. HUNGERFORD: Oh, you mean an entire

6 different brochure.

7 MR. RAWALD: Yes, exactly.

8 MR. ROCKY: Actually --- this is Bryan.

9 Doug, I'd rather see one for heat

10 pumps and one for AC.

11 MR. RAWALD: Okay.

12 MR. ROCKY: And, I mean, I know we're

13 talking about regional, but the intent of this is

14 to explain the regional impacts on central air

15 conditioners, not the national standard for heat

16 pumps.

17 MR. RAWALD: Okay.

18 MR. ROCKY: So, I think referencing

19 heat pumps in this document is ---

20 MR. RAWALD: Confusing?

21 MR. ROCKY: Yeah, it's confusing -- not

22 redundant, but it's a good idea to have one for
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1 heat pumps on 14 SEER as a change just for

2 communication, but this document to me is really

3 trying to explain the regional AC standards.

4 MR. RAWALD: No, I'm with you.

5 MR. DORIA: This is Jordan.

6 I'm not, I mean, I guess we can't put

7 down all the information, but, I mean, with heat

8 pumps it's date of manufacture, it's business as

9 usual, it's what we've been doing forever.

10 I guess I'm not sure I see tremendous

11 value in having it.

12 MR. RAWALD: So, Jordan, do you think

13 he should at least take out heat pumps that are

14 referred to there?

15 MR. DORIA: Yes, I agree with that.

16 MR. ROCKY: So, yeah, Jordan. So, my

17 point is if we talk about heat pumps in this,

18 then you put some text in there that references

19 that. I think to me it's easier to have a

20 separate document for heat pumps if the

21 Department thinks that has value.

22 MR. RAWALD: Right. So, there's
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1 several places where we refer to heat pump. So,

2 I guess what you're recommending is, take out the

3 reference to the heat pump wherever we have it at

4 the very least because it's unduly confusing

5 because they're not subject to the 13.

6 MR. ROCKY: It gives you a little more

7 space to talk about air conditioners or the --

8 MR. RAWALD: Sure.

9 MR. ROCKY: -- the ERR requirement for

10 the southwest or something else.

11 MR. RAWALD: Okay.

12 MR. SACHS: Doug, I'm confused. This

13 is Harvey.

14 I realize that's not uncommon, but I

15 heard this given out as an assignment to be

16 discussed tomorrow, and then I hear us discussing

17 it.

18 MR. RAWALD: I said people can discuss

19 it tomorrow, but people had ideas and wanted to

20 volunteer today. So, I didn't stop them ---

21 MR. SACHS: No point in having one

22 discussion if we can have two.
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1 MR. RAWALD: Right.

2 (Laughter.)

3 MR. RAWALD: We've can have four or

4 five.

5 (Laughter.)

6 MR. ROCKY: Two won't be enough.

7 MR. RAWALD: We're going to be talking

8 about this for three or four meetings.

9 MR. SACHS: Thank you very much. I'm

10 suitably reprimanded.

11 MR. DORIA: This is Jordan.

12 The one thing I would say, I mean, I

13 think most of it is fine, but I think it might be

14 worth just sort of pointing out to people, you

15 know, that if you don't get a product that's

16 compliant, you didn't get what you were paying

17 for. You didn't get what you were supposed to

18 get, because that is a kind of message that

19 really cuts across different people's viewpoints,

20 right? I mean, some people care about energy and

21 CO2 emissions, and some will not.

22 The idea of not getting what you paid
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1 for is pretty universally disliked. So, I would

2 recommend some language to that effect.

3 MR. RAWALD: Okay. I'd also like to

4 add something about the manufacturer label, you

5 know, look for this thing. So, if there's some

6 sort of way of pitching that.

7 So, I don't know if the folks who are

8 working on the uniform label could think of

9 possibly a way of phrasing that would be uniform

10 across all manufacturers ---- to be fair to you

11 so that, okay, we're looking at the same thing,

12 we're looking at this condensing unit to make

13 sure it's compliant.

14 MR. EISNER: Any other comments?

15 MR. SACHS: This is Harvey. I don't

16 know if DOE has its own spin doctors, but in the

17 context of the get what you pay for, it has to

18 have some preparatory language that lets them

19 know that manufacturers, distributors and

20 contractors are doing their best. If you don't

21 get this, you've got a problem. You have been

22 shortchanged.
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1 MR. RAWALD: Yes, I hear --- I

2 understand what you're saying and we do have

3 people who spend a lot of time thinking of these

4 things. More time than I do. So, I'll ask them

5 to look at that then.

6 MS. SHEPHERD: This is Amy Shepherd.

7 But I think that we do need to make

8 sure that we're clear as to -- what this can

9 address is that you didn't get what you should

10 have gotten based on where you live, sort of. 

11 It's not necessarily you didn't get what you paid

12 for.

13 MR. RAWALD: Okay.

14 MS. SHEPHERD: Does that make sense?

15 MR. RAWALD: Yeah, absolutely.

16 MS. SHEPHERD: Okay.

17 MR. RAWALD: And I think also, Amy, you

18 made the point earlier that some people did get

19 what they paid for. They actually colluded to

20 get ---

21 (Simultaneous speaking.)

22 MR. RAWALD: So, I don't want to
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1 oversell that point, but I am sensitive to your

2 comment on that.

3 (Simultaneous speaking.)

4 MR. GIBBONS: This is John with Carrier

5 and I see this as a good piece. I can see that

6 contractors would see it as a good piece more

7 proactive so that if I'm a law-abiding

8 contractor, I could show a homeowner why Mr.

9 Arnold's Heating/Air shouldn't be selling 13

10 SEER.

11 The thing they might get confused on

12 is that I was good until this last page I guess

13 it will be as where, you know, we have the grace

14 period.

15 They may get very confused on that

16 because I could still sell 2014-built compliant

17 unit, you know. Now, they're trying to compare

18 pineapples and apples and might get confused.

19 MR. RAWALD: Yeah, I think I mentioned

20 to you I think you or Steve brought up initially

21 was I don't know the best way to message this

22 particular topic. And I think the people doing
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1 this don't either.

2 So, any thoughts people have on how to

3 effectively message the sell-through to a

4 consumer, I'm open to ideas on that.

5 MR. ARNOLD: This is Dan Arnold.

6 You mentioned label. I was going to

7 mention the Energy Guide label is still sort of

8 in flux, but, I mean, maybe you could put

9 something in there, look for the label.

10 Because if it's reached after December

11 31st, it should have that label on it and they

12 would be able to look at the label and say, yes,

13 this is the right product or not irrespective of

14 when it was manufactured.

15 MR. RAWALD: Right.

16 MR. ARNOLD: So, maybe on the side of

17 the Energy Guide label and that --

18 MR. DORIA: Was that the Energy Guide

19 label, or the label --

20 MR. ARNOLD: Well, I threw out both.

21 MR. DORIA: Okay.

22 MR. ARNOLD: They're both kind of in
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1 flux, but --- so, I don't know if you can

2 finalize it.

3 MR. DORIA: But the outdoor unit that

4 we're talking about would be easiest, right? I

5 mean, if you have those, you know it shouldn't be

6 there, period, right? Because then the date of

7 manufacture is not an issue anymore.

8 MR. RAWALD: Right. I think that's a

9 really easy thing to message. I just don't know

10 how uniform you folks decide to make the message

11 on the label.

12 I see what Bryan is suggesting. I

13 just don't know how if everyone is on the same

14 accord with him.

15 So, I guess picking a way that you

16 guys would all say the same thing so somebody

17 would be able to identify it no matter what words

18 you use, would be nice to know.

19 MR. ARNOLD: This is Dan Arnold again.

20 I mean, again, could we say, look for

21 the Energy Guide label and not necessarily since

22 we haven't decided our label, but look for the
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1 label on the end of it. Do I have an Energy

2 Guide label which will define, you know, if it's

3 legal for your area.

4 MR. RAWALD: Right. I don't mind

5 explaining the Energy Guide label. I think it

6 will be helpful.

7 MR. ROCKY: Doug, this is Bryan.

8 Just to clarify, I think the verbiage

9 that was on the proposed label is what came out

10 of our AHRI Unitary Regulatory Committee ---

11 Compliance Committee discussion as verbiage that

12 we can all accept as manufacturers.

13 The actual placement, font size,

14 etcetera, is what we were leaving up to the

15 manufacturers.

16 MR. RAWALD: Okay.

17 MR. ROCKY: But the verbiage, I think,

18 is something we had all agreed to.

19 MR. RAWALD: Okay.

20 MR. ROCKY: I think that was right.

21 MR. RAWALD: Okay. And I know Harvey

22 wanted to place hold that to bring back his
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1 labeling aficionados to talk to them about it.

2 MR. SACHS: I don't --- this is Harvey. 

3 I don't --- I can't think of a problem now, but I

4 do want to just let them know what's happening.

5 I also just would have a suggestion

6 that the warm fuzzies of air conditioners may or

7 may not be as useful as actually a small version

8 of the Energy Guide label.

9 MR. RAWALD: Okay.

10 MR. SACHS: Whether or not we need the

11 manufacturer name plate label and all that, I

12 don't have any opinion on, but I do think giving

13 them guidance to what to look for --- giving the

14 consumers guidance would be helpful.

15 MS. MEYERS: The first bullet under if

16 you live in the south ---

17 MR. RAWALD: Uh-huh.

18 MS. MEYERS: -- should have July 1st,

19 2016, instead of July 2016.

20 MR. RAWALD: Sure.

21 MR. WHITE: So, in the paragraph about

22 the 369,100,000 metric tons, are those estimated
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1 to be avoided? And at the end it says, "as a

2 result of the last standards". I don't think

3 that reads right.

4 MR. RAWALD: Okay. And I'm sure this

5 came directly from some language that was in the

6 standards rule. So, I'll have them go back and

7 look at it.

8 MR. McCRUDDEN: This is Charlie at

9 ACCA.

10 In the middle of what I guess would be

11 the page with the map, it says, if you live in

12 the north, the amended standards that impact the

13 northern region are based on the product's date

14 of manufacture. Therefore, units manufactured

15 before January 1st have to meet the standard that

16 was in effect before. And then after, have to

17 meet the amended standard, but it's the same

18 standard in the north.

19 MR. MELCHI: I think that was probably

20 in reference to heat pumps.

21 MR. McCRUDDEN: Yeah, I think that's

22 the reference for heat pumps.
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1 MR. HURST: I just put on the table

2 that has the sell-through whether it's unlimited

3 sell-through 18-month grace period, that might

4 clear a lot of it up, if only for dealers.

5 MR. McCRUDDEN: I'm sorry.

6 MR. HURST: Just put a table in and you

7 can say, okay, if I'm in this region, here's what

8 I can sell through. 18 months for unlimited sell

9 through or ---

10 MR. McCRUDDEN: Right. I guess what

11 I'm saying is since the standard in the north

12 doesn't change ---

13 MR. HURST: It does for heat pumps.

14 MR. McCRUDDEN: If we're taking out

15 heat pumps ---

16 MR. HURST: And we should have package,

17 because package unit is different too.

18 I would suggest just a table, but I

19 can give you an example that I think would work.

20 MR. RAWALD: That would be helpful.

21 MR. McCRUDDEN: So, my question is,

22 what's the intended audience for this?
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1 MR. RAWALD: I think it's

2 consumer-oriented.

3 MR. McCRUDDEN: Okay.

4 MR. RAWALD: This is meant to go to the

5 person who is going to be buying the product.

6 MR. McCRUDDEN: And that's what I want. 

7 And how are we going to say --- because I think

8 there's many ways to dumb this down, the language

9 that we don't use because we're better than ---

10 we use a different language.

11 MR. RAWALD: That's fine. I mean, I

12 don't sit in the living rooms of the people

13 selling them air conditioning. I let you folks

14 do it.

15 MR. McCRUDDEN: Okay.

16 MR. RAWALD: Okay. So, we'll have

17 another discussion of this tomorrow it looks

18 like.

19 (Laughter.)

20 MR. EISNER: Any other questions?

21 (No response.)

22 MR. EISNER: All right. That brings us
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1 down to the last big bullet, record retention.

2 MR. RAWALD: And I put this in a

3 sub-bullet before. So, I passed around draft

4 record retention language with the distributors

5 and the contractors to look at.

6 We also included in that some ideas

7 for manufacturers to help manufacturers

8 understand what we think would be helpful.

9 Understand that manufacturers already

10 are keeping these records, but I thought it might

11 be helpful to have that in there as well. So,

12 and then help them understand how it all works

13 together to investigate.

14 So, this language is meant to once

15 again discuss what you are required to retain,

16 not produce. So, what are the things you should

17 keep. And then so if I ask for certain things,

18 you could have them on hand.

19 We did have some discussion on

20 searchability, other concerns. And there's

21 really no requirement of the Department that

22 records be electronic versus paper or be
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1 searchable as long as when we ask for them, you

2 can figure them out and give them to us when we

3 need them.

4 So, we're not going to impose a

5 requirement on how they're kept beyond the

6 ability of you have to be able to look through

7 them and figure out what's there and give us what

8 we need when we ask for it.

9 So, and if you think things are

10 confidential, then you of course can tell us it's

11 confidential and declare that to the appropriate

12 process that we could explain as well.

13 And we do explain whenever we ask for

14 -- we always explain what the confidentiality

15 process will be.

16 So, I do want to sit down with the

17 contractors and distributors and work on a couple

18 of details before I give the bigger group what

19 we're working on.

20 So, hopefully by tomorrow I can throw

21 something up on the bulletin board and we can go

22 look at our ideas, but I think we're very, very
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1 close. I feel pretty good about it.

2 MR. HURST: Can I be included in that

3 distributor ---

4 MR. RAWALD: Yeah, of course. That

5 makes sense, John. I'm sorry I didn't think of

6 that before.

7 MR. DORIA: Yeah, I would like to as

8 well.

9 MR. RAWALD: Okay, Jordon.

10 MR. EISNER: Any comments or questions?

11 (Off record comments.)

12 MR. EISNER: All right. Guess that

13 takes us back then to the distributor issue.

14 MR. RAWALD: Well, I don't know if the

15 distributor issue so much as the prohibited act

16 issue, right?

17 So, I think -- that to me seems to be

18 the ---

19 MR. MELCHI: Would it be helpful if I

20 talk for a minute?

21 MR. RAWALD: Yeah, okay.

22 MR. MELCHI: So, this is Jon from
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1 HARDI.

2 So, in all honesty, here's where we're

3 at. I've talked to some of you about this

4 already.

5 Had a meeting with our board of

6 directors last week and the orders I got were

7 less than six months ago all the parties in this

8 room with the exception of Ray, Gary and Chuck

9 White agreed to a settlement agreement which

10 included language saying that DOE would not

11 assess --- or agrees to not assess civil penalty

12 upon distributors.

13 Now, for our membership, that was the

14 only reason that there was a settlement. Had

15 that not been included, there would have been no

16 settlement. 

17 I don't know if this needs to go on

18 the record or off the record. We had legal

19 strategies prepared to kick this thing for

20 another two years if we needed to and were

21 prepared to do so.

22 We did not initiate settlement talks. 
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1 So, we were asked, what would it take to settle

2 this case?

3 We said what it would take to settle

4 this case, and that included a non-penalty upon

5 distributors.

6 For our members, this is the only

7 reason that we settled the case and I do not have

8 authority to agree to a prohibited act which

9 would subject my members to civil penalties.

10 I, you know, I don't know how I can be

11 more clear. Those are the orders that I had. 

12 We've talked about it. We talked through every

13 scenario with my board and that's what they voted

14 and that's what they told me to bring to the

15 table.

16 In our folks' minds, they're not ---

17 this isn't something that they do every day, not

18 typically really regulated by DOE. The products

19 we sell are, and there was --- there was simply

20 no interest in walking back from something that

21 we signed six months ago that was the cornerstone

22 of a lawsuit settlement.
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1 And that's where we're at today -- at

2 least from the HARDI perspective. Those are my -

3 -- that's what I --- those are my orders, if you

4 will.

5 MR. FERNSTROM: So, this is Gary.

6 Let me make sure I understand the

7 lawsuit settlement. A suit was initiated against

8 this rule-making. And in order to settle that

9 suit and allow this rule-making to move forward

10 as it has, your terms were that civil penalties

11 could not and would not be applied to

12 distributors; is that correct?

13 MR. MELCHI: Yes.

14 MR. FERNSTROM: Okay. Well, so far as

15 I'm concerned, that's a precedent that I think

16 we're just going to have to live with and I guess

17 I'm prepared to give up my interest in civil

18 penalties against distributors because the only

19 way I could find them culpable is if they

20 knowingly sold to contractors who were installing

21 out of compliance, and I don't think they would

22 know. So, it's kind of a moot issue.
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1 MR. MELCHI: This is Jon from HARDI.

2 Thank you, Gary. And, you know, I

3 think that's why leaving that meeting, Doug, I

4 was, you know, as far as the records and --- we

5 understand that we have a role to help you, give

6 you tools for an investigative process. And, you

7 know, that's why our members have said, tell them

8 what we have and they can use whatever we have,

9 you know. That's what we want to do.

10 But it would be extremely challenging

11 for us to go back to membership who said you can

12 settle, but only under terms X, Y, Z and say,

13 well, we're going to strike X from what we've

14 been telling you was the terms of the settlement

15 not less than six months later, and that's just

16 the fact today.

17 MR. RAWALD: Right. And I appreciate

18 your honesty. I do. I appreciate --- so, as I

19 said before, from the Department's point of view,

20 in order to go and change this policy that we

21 have, it would really create --- it would really

22 need some sort of consensus of the room here for
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1 us to do that, the driving need to change. 

2 Otherwise, we have established the status quo.

3 So, I'm hearing from Gary that he

4 feels that given what we know and what we're

5 aware of at the moment, that he's comfortable at

6 least asking the distributors from any sort of

7 prohibited acts that would have financial

8 penalties.

9 How does everyone else feel?

10 MR. FERNSTROM: This is Gary again.

11 I'd add, frankly, I feel the same way

12 about the manufacturers because, you know,

13 they're not ---

14 (Speaking off mic.)

15 MR. RAWALD: So, let's focus on

16 distributors then because we have that on the

17 plate and we have it kind of discussed.

18 Does anyone feel --- anyone else want

19 to support what Gary and what Jon has asked for

20 and how do folks feel generally?

21 MR. HURST: I was part of the

22 negotiation and Jon and I have spoken and whether
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1 we like it or not, that's what was agreed to in

2 the settlement agreement.

3 So, you know, I have no dog in the

4 hunt, because I don't count as a distributor as

5 it was defined. But the way I feel about it is

6 fair is fair and we have to find a way to still

7 find --- we still have to find a way to enforce

8 with this, this situation. It's what we all

9 collectively agreed to.

10 And I would feel as a manufacturer if

11 we didn't abide by that settlement, we would be

12 going back against the lawsuit.

13 So, I know we all may not like that,

14 but it is what it is.

15 MR. EISNER: Others? Any comments?

16 (No response.)

17 MR. EISNER: Anybody object to not

18 making it a prohibited act?

19 MR. SACHS: As much as I try to live by

20 a commitment to integrity, I still want to

21 understand what we lose, if anything, if the

22 distributor cannot be held liable when, in fact,
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1 the distributor's obligation is to make data

2 available and that's already enforceable through

3 the subpoena.

4 So, if we walk away from my

5 philosophical bent that everybody ought to have

6 skin in the game except me, what have I lost?

7 (Laughter.)

8 MR. HURST: I'm also a little confused

9 as we've talked about the nuclear option, the

10 semi-nuclear option or the limited nuclear

11 option.

12 If I'm a distributor and I've done

13 something wrong and I can't sell product, that's

14 not their decision to make.

15 It's the manufacturer precluding the

16 distributor from selling product because they

17 violated.

18 So, technically I guess it's not a

19 prohibited act for a distributor. But if they

20 can't get product, it's kind of like having a

21 weapon and not having any bullets.

22 I guess you've got to, you know, swing
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1 it around and hope to hit something. But if I

2 don't give you bullets, you can't commit any

3 violations because you don't have any condensing

4 units to sell.

5 That's a pretty ---

6 MR. MELCHI: So, Harvey ---

7 MR. HURST: -- heavy act.

8 MR. MELCHI: -- this is Jon from HARDI.

9 As we talked to the board about this

10 and distributors around the country, we made some

11 --- there are some pretty big carrots, I think

12 you will --- or carrots or sticks depending on

13 which perspective, but the distributor's

14 agreement with their manufacturer is something

15 that is --- that is always a concern.

16 And quite frankly although it's not

17 the purview of this agency, we have consistently

18 told our members that they are --- if they are

19 collaborating with a contractor who is knowingly

20 installing a product where they shouldn't be

21 installing it particularly in multifamily homes

22 in that scenario, that you could be liable for an
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1 FTC violation of defrauding a consumer who thinks

2 they're purchasing compliant equipment when

3 they're not.

4 And there are a lot of big threats out

5 there that we've kind of told our members about. 

6 I would be happy to work with, you know, with you

7 on an MOU or anything that we can do to satisfy

8 your needs outside of the purview of DOE.

9 MR. SACHS: So, this is Harvey and I've

10 now heard from Jon and from John that in a

11 practical world, in a practical sense we are not

12 at serious risk of losing anything in terms of

13 the ability to assure compliance and do

14 enforcement.

15 I'm looking at Amy, who might be

16 thinking about ways that that's not true, but

17 others might agree.

18 So, if I can recast the question, is

19 that the consensus I'm hearing in the room?

20 MR. HURST: I'd like to ask one

21 question before I answer that question. Are the

22 distributors willing to maintain records?
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1 MR. MELCHI: Yes.

2 MS. MEYERS: Is there anything else

3 they're willing to do to ensure compliance with

4 the regional standards?

5 MR. EISNER: Can you speak up?

6 MS. MEYERS: My question is there any

7 other things that the distributors would be

8 willing to do to ensure compliance?

9 I agree that we don't need to go back

10 on the settlement agreement.

11 MR. MELCHI: Yeah, I think that we

12 would be open to --- I haven't heard anything

13 else to suggest it to a site from record keeping

14 and reporting violators that we would do, but I'm

15 certainly open to listening to those things which

16 would not constitute a prohibited act and just

17 would be willing to listen to that.

18 MS. NOLL: So, I have one comment to

19 make. On the record retention, though, you're

20 saying that they are willing to, but what happens

21 when they don't and you subpoena them and they

22 don't?
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1 MR. RAWALD: Right. So, if someone

2 does not comply with the subpoena, then we go to

3 the court and we get a court order.

4 And if they don't comply with the

5 court order, then they're held in contempt by the

6 court to which federal courts have the ability to

7 then begin fines and all the things that fall

8 under the court.

9 So, those wouldn't be DOE enforceable. 

10 They would be enforced by the Department of

11 Justice on behalf of the Department of Energy. 

12 But that's the process that we would go through.

13 And so, what I heard from Steve Porter

14 and I think Jon would agree with this, is that

15 most distributors view the expense of going

16 through litigation over the subpoena and then the

17 public outrage of what they were doing could be

18 not worth the effort of not giving us the

19 information we requested.

20 MR. MELCHI: And, quite frankly, if

21 they are --- this is Jon from HARDI, you know. 

22 If somebody is doing something where they know
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1 it's bad and they know they're going to get

2 caught, then, you know, they deserve to get

3 caught, you know.

4 Or if they're not providing those

5 records, then they deserve to, you know, face

6 whatever injunction comes down from justice on

7 that, because they should be doing it as a

8 participant.

9 MR. HURST: Speaking on behalf of a

10 manufacturer, we would start to get a little

11 nervous about dealing with a distributor that was

12 being subpoenaed and was potentially obstructing

13 justice. There's another layer for that.

14 MR. ROCKY: So, John, how do you know

15 that?

16 MR. HURST: This industry is

17 exceptionally poor at keeping any secrets.

18 (Laughter.)

19 MR. RAWALD: And so we in the

20 Department ---We can publicize that.

21 MR. MELCHI: Yeah, that's a matter of

22 public record. I just filed with the court.
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1 MR. HURST: I think the second somebody

2 gets a subpoena, it flies through the industry

3 faster than the speed of light. That's my --- if

4 anybody disagrees ---

5 MR. MELCHI: And this is Jon from HARDI

6 and this is only speaking as an association, but

7 we've, for instance, had distributor-member

8 companies found guilty or pled to charges with

9 the EPA for violations and they have been

10 excommunicated from membership.

11 I mean, there are things that the

12 industry --- that our channel has done to shine a

13 spotlight on bad actors and this would fall under

14 that purview.

15 MR. DORIA: So, this is Jordan.

16 Sounds like what we're really saying

17 is whether record retention is a prohibited act

18 or not, the net effect is the same. You don't do

19 it, you get fined.

20 So, to me, I, you know, it wouldn't be

21 for the distributors. I don't know why we need

22 that.
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1 MR. RAWALD: Well, I mean, it's more

2 complicated, right? So, for DOE to fine someone

3 is very simple. I just initiate an action, but

4 if DOE goes through the court and getting a court

5 order and getting a contempt to that and the

6 Department of Justice --- those are longer term

7 things. They take longer. It's a longer process

8 and outside the Department of Energy's control. 

9 So, that's the one caveat.

10 The other one is I would agree with

11 you it's essentially the same consequence

12 ultimately.

13 MR. McCRUDDEN: This is Charlie with

14 ACCA.

15 I think if we fold to this violation

16 issue, okay, there are still consequences for

17 knowingly selling whether you're a distributor or

18 a contractor that comes from the manufacturers or

19 that comes down to the manufacturers.

20 So, I don't think anybody who is on

21 that page without a prohibited act is getting off

22 Scott-free in any way.
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1 And the other point I'll make is that

2 I know we talked about training or outreach

3 efforts by everyone in the chain. And I think --

4 I know that we're going to do it, you know. 

5 We're going to help train the contractors about

6 these rules and how they work.

7 It's highly likely our relationship

8 with the distributor is in that we're probably

9 going to be doing that at the distributor's

10 location, because it's the easiest way to get

11 contractors together.

12 And so, I suspect that -- I don't know

13 if that satisfies what you're looking for as what

14 other ways or means that we can help promote that

15 compliance.

16 MS. MEYERS: Yeah, I think it goes back

17 to what I was saying earlier this morning.

18 I think it would be helpful if instead

19 of focusing on is it a violation or prohibited

20 act, what is each entity in the selling chain

21 willing to do to, you know, what are the

22 procedures to ensure that everyone has knowledge
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1 of the legal requirements of the law?

2 So, for manufacturers, you may ask for

3 the guidance on the --- on how you rate your

4 product. So, the FTC guide label or putting a

5 label on the units. We're going to sort the AHRI

6 directory based upon, I think, the zip code. I

7 think that's what we decided on.

8 So, those are some actual things that

9 we're doing to help distributors and contractors

10 and homeowners have knowledge of the legal

11 requirements involved.

12 So, it's not how you can enforce it,

13 necessarily, but how are you going to comply? 

14 What are those steps that you are going to do?

15 So, it's not --- it doesn't have to

16 get to a court, you know. I think we need to

17 kind of shift the conversation a little bit.

18 So, are you as a distributor going to

19 ensure that every person that you sell to --- I'm

20 making this up, you know --- signs a terms and

21 conditions or goes through a training course and

22 you're going to keep a record on file for, you
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1 know, five years that they have been and

2 understand the training, whatever.

3 Are contractors going to have to, you

4 know, do -- I can't think of it here. I'm

5 drawing a blank here.

6 So, what are those steps that will

7 ensure that every person understands the legal

8 requirements of the law?

9 MR. MELCHI: Yes.

10 MS. MEYERS: Records retention is a

11 great first step. I'm just asking is there

12 anything else we want to put in there?

13 MR. SACHS: Karen, I think --- this is

14 Harvey. I think it's very helpful. And I can

15 give an example on the contractor side of the

16 kind of things that would possibly be helpful

17 which is that on an ACCA and PHHC prepared

18 standard proposal forms which have a check box. 

19 This is in the south or the southwest.

20 I've disclosed. I've given the

21 customer of the DOE flyer.

22 MR. EISNER: Can you speak up, Harvey?
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1 MR. SACHS: If this is the standard bid

2 form template that some of the contractor

3 organizations might provide without a check box,

4 if this is in an affected region, I've provided

5 the customer with the DOE flyer, that would be

6 the kind of thing.

7 And I think that what I'm hearing is

8 that Karen has offered to work with her peers on

9 a list of things that they will be doing, which

10 we've heard part of.

11 And I'm almost hearing a request of

12 Jon and Charlie and Chuck to bring in sort of a

13 here's what we're giving at the office.

14 MR. WHITE: This is Chuck White with

15 PHCC and in case you haven't noticed, I like

16 parallels.

17 So, three years ago, four years ago

18 EPA, there's changes to the Safe Drinking Water

19 Act.

20 As a result of change to the Safe

21 Drinking Water Act, brass fittings in potable

22 water as we now it changed dramatically.
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1 Going to be problems for the plumbing

2 industry. Going to be installation issues.

3 We started along with several

4 manufacturers and some other groups about two

5 years ahead of the implementation, they gathered

6 information assembling training materials,

7 putting together pamphlets through the

8 distribution chain of supply houses, lots of

9 people around the table put together a great

10 program.

11 Went out to conferences, conventions

12 whether it's inspectors, engineers, installation

13 people.

14 We did it hundreds of times around the

15 country. Personally, I did it a bunch of times

16 and we went and talked to groups. Here's what's

17 happening. Here's what's going to change and

18 you're going to poison some person. This is a

19 health and safety issue with water. Someone

20 could get sick. That's what we did for that.

21 We didn't have to have a check box. 

22 We didn't have to have record keeping, but all
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1 kinds of things on health and safety issue and

2 we're doing it.

3 We're making sure that we get our

4 product out. We --- I see we will do very

5 similar things. We will get together. I haven't

6 talked directly with Charlie on any kind of

7 formal basis, but a high probability we will

8 collaborate. Probably HARDI as well and

9 manufacturers who are probably going to get

10 together and try to put a uniform message

11 together.

12 We're going to go to conferences,

13 conventions and I have chapter meetings of 10

14 people and they're always looking for speakers.

15 So, we're going to have this

16 educational component and we're going to try our

17 best --- I know I'm going to try my best to get

18 the word out to everybody I know, because the

19 bottom line, the interpretation he gave us

20 earlier today, you do this wrong, you're going to

21 be out of business. And that's going to

22 resonate.
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1 MR. SACHS: Much appreciate that,

2 Chuck, but sort of like Jon, but less formally

3 the advocate is going to have to go back and sell

4 it to our community as well.

5 MR. WHITE: Well, absolutely.

6 MR. SACHS: And I don't know if this

7 should be involved or shouldn't. That's your

8 professional judgment for your members and other

9 contractors.

10 But having a couple of pieces of paper

11 that talk about the commitments that have been

12 made --

13 MR. WHITE: I love this.

14 MR. SACHS: -- again, I don't want to

15 make that judgment. Here's what contractors are

16 pledging to do in November. There are no

17 penalties, but they regard this as important for

18 their above-board business and this is why they

19 are doing it and here's what we are doing as

20 distributors like what the manufacturers have

21 done.

22 Having that kind of information to
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1 show that this thing is --- has got a lot of

2 incentives for compliance, a lot of things

3 leaning toward compliant that would be very

4 helpful to us as we take it to the skeptics in

5 our community.

6 MR. MELCHI: This is Jon from HARDI. 

7 I'm happy to do that. The one good thing I can

8 say about at least all the manufacturers in this

9 room that I've dealt with is that all ---

10 especially those who work with distribution

11 training for their customers, dealer meetings,

12 that sort of thing on a regular basis that our

13 members are a part of and, you know, that's a

14 great opportunity for outreach to those people.

15 And a lot of them have already been

16 doing it for years now especially even prior to

17 the dismissed furnace standard. And I think

18 those are going to be great opportunities.

19 I've had some folks suggest some

20 pretty inventive things about those that have the

21 ability to put something on a receipt or a billet

22 and making sure that that's on their, you know,
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1 flyers to the counter.

2 There are a lot of different things

3 that I can bring those back to you.

4 MR. SACHS: It would be easier for me

5 if I have a bullet list of things that people are

6 "pledging".

7 MR. MELCHI: Yes.

8 MR. SACHS: And that's in air quotes.

9 MR. McCRUDDEN: This is Charlie with

10 ACCA. I am amazed the manufacturers have come

11 together the way they have to do --- to make the

12 changes to the label. I mean, it's tremendous

13 and it's something I never thought would happen,

14 but there's fewer of you. Distributors, there's

15 more. And contractors, there's way more.

16 And so, the pledges that we can make

17 and the efforts that we can offer is harder to

18 sort of police in a very loose term or police

19 facts and how it works.

20 Remember, the FTC rules require the

21 contractor to show the label itself, the label

22 that we'll get for the manufacturers, because the
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1 manufacturers are required to place that label,

2 not just the information of that label, that

3 label on their websites and on all materials they

4 have, and that's what they do.

5 So, the training that we've talked

6 about that we're putting together, I mean, I'll

7 be frank. There is a very good business

8 opportunity for an association on this training

9 aspect and how these new rules work and we're

10 going to take advantage of all that.

11 It's just the trust for the folks who

12 are hopeful that this shows effort in terms of

13 how we're going to show what we're giving for

14 compliance is going to have to be greater just

15 because there's way more of us that are out

16 there.

17 MR. DORIA: So, this is Jordan. I

18 think, you know, and, Harvey, jump in if this is

19 not correct, but I think there's maybe sort of

20 two different levels of things that people can do

21 that would support the clients.

22 The pretty firm line for me is that we
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1 as manufacturers aren't going to be able to

2 label, which is something that I think supports

3 actually both compliance and enforcement, is

4 something we're saying will be in the rule,

5 right?

6 I think when Harvey was talking about

7 "pledges in air quotes", I didn't take that to

8 mean something in the rule, right?

9 MR. SACHS: Absolutely not.

10 MR. DORIA: Right.

11 MR. SACHS: What I can carry back and

12 the converse example because it hasn't come to

13 fruition yet was EER by bin and the 210 240s

14 would get disclosed. We haven't gotten there

15 yet. We're still working on it.

16 (Comments off mic.)

17 MR. SACHS: The point is that we all

18 have our disappointments in life, but I need to

19 be able to present this to my community as what

20 people are trying to do.

21 We recognize that you don't represent

22 every contractor. There are some you don't want
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1 to represent. And we've tried to help out with

2 QI and stuff like that, will continue to try, but

3 you all are setting the bar, you're setting the

4 example and we just will be helped in our fight

5 to be able to say what you all are giving it a

6 try to help with that.

7 MR. WHITE: This is Chuck White again. 

8 I would really like to find a way this is going

9 to work and we can make it happen, but it's kind

10 of hard to pledge too many things to the giant

11 moving target we've had.

12 We keep trying to narrow in the

13 circle. But I think as we get closer, it's going

14 to be much easier for us to say for this, we can

15 do this, this and this to achieve this thing,

16 this component of it.

17 And until we've kind of narrowed down

18 your skeleton a little better, it's hard to be

19 specific about everything we can and can't do.

20 I know we can put together great

21 PowerPoints and reach out to our conventions. 

22 But exactly what I'm going to put on those
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1 PowerPoints, I can't say because I don't know.

2 MR. DORIA: Chuck, this is Jordan. 

3 Just when you talk about the moving target, I

4 think we all feel the same way.

5 Is there a particular area that is the

6 most important one? Is it the subject of routine?

7 I guess what I'm asking is, what is

8 that thing where if we got greater certainty, you

9 would start to be able to have that greater level

10 of focus.

11 And it seems true I think for future

12 reference as well, but ---

13 MR. WHITE: Certainly the routine

14 becomes --- we've been kicking that can down the

15 road for several weeks now. 

16 I think that will help --- probably

17 help you guys as well to know this is how we're

18 going to direct this. And if somebody dos this X

19 many times or however that comes to be defined, I

20 think that's important that we have a piece with

21 the interpretation today, but exactly how we

22 think that should be implemented or how that's
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1 going to come together, we have things that

2 obviously we are not in agreement on that we've

3 got to find that common ground and find our way

4 to say, okay, here's how it's going to be and

5 then here's what we can do.

6 MR. DORIA: This is Jordan. I'm just

7 going to say we are, I think, past the point

8 where we can continue to kick some of the

9 thorniest issues down the road. We are, right?

10 We have including today, I think six

11 days scheduled left, right, including the middle

12 of October meetings which we were actually saying

13 maybe we wouldn't have to have, right?

14 So, I'm not necessarily saying we need

15 to do it today, but very soon, tomorrow, I don't

16 know, we need to really talk about that, I think.

17 MR. HURST: So, as we look at this ---

18 this is John Hurst with Lennox. As we look at

19 the issue of routine, Doug, it would be helpful

20 if --- if you have an opinion or if you don't, it

21 would be helpful to know, but is there a way to

22 do kind of a graduated scale of violations?
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1 First violation, slap on the wrist. 

2 Second violation, something else. Stern warning,

3 you get your car keys taken away. I don't know. 

4 I've got teenagers. So, these are the penalties

5 I'm familiar with.

6 MR. WHITE: They have extra keys.

7 MR. HURST: They don't have an extra

8 iPhone. But then the third violation and I'm not

9 saying that this is the right way, but the idea

10 of a graduated punishment scale and also the

11 egregiousness of the event.

12 So, if it's a one trucker who makes a

13 mistake or maybe doesn't make a mistake versus

14 kind of a Smokey and the Bandit guy that's, you

15 know, buying truckload quantities and shipping

16 south, if we could get to kind of definitions of,

17 okay, one-offs I don't think it's really going to

18 change massively the energy savings or lack of

19 energy savings versus routine, habitual violators

20 who just kind of wave their hand at the law.

21 So, maybe that's a starting point, but

22 I offer that as a point of discussion and maybe
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1 your commentary to see if we can kind of kick

2 that part off.

3 MR. RAWALD: So, for the routine point

4 of view, I think what I am most comfortable with

5 is what Neil has proposed from the beginning

6 which is kind of to factorize the approach.

7 These are the factors to consider when

8 assessing the routine and that we think about

9 what factors make sense for us to put into

10 consideration. So, there can be some sort of

11 scaling.

12 Now, as far as what you're talking

13 about with different reactions, I think that's a

14 --- that I would almost approach as how do we

15 investigate cases.

16 So, if we find you have one violation,

17 it's not going to be a routine violation, but

18 we're going to issue a warning notice and let

19 people know, hey, this guy already had one

20 violation, possibly, if we agree to do that.

21 And then we could help that kind of

22 cement --- that builds the case for the routine
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1 violators. That kind of helps us build a house.

2 So, I think it has a place in that

3 context, because we're not elevating the

4 consequences because all the consequences to us

5 are either you're a routine violator or you're

6 not.

7 But if we had these kind of lower

8 activities we could initiate that put people

9 notice in the community that, hey, this person is

10 someone to at least be wary of or to encourage

11 them to comply since they're, you know, the

12 manufacturer can call the distributor or the

13 distributor can call the dealer and say, hey, by

14 the way, I know you did this one time, but don't

15 do it again or else I'm going to stop selling to

16 you, that might be helpful.

17 So, another idea that was floated

18 inside the Department that I wanted to bring up

19 was that in the SEC, what they do is when they

20 start an investigation they issue I guess what's

21 called a Notice of Concern or some sort of thing.

22 They let people know, hey, this is
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1 something we're looking into. So, there may be

2 some sort of desire for us to put them on notice

3 when we start investigating a contractor, dealer

4 or distributor, see what they did and that may do

5 a couple things.

6 It may encourage a contractor and

7 dealer to give us the records faster because they

8 want to get their name off that list. They want

9 to be, oh, yeah, no, I gave you everything you

10 wanted, and now I'm in the clear, everything is

11 fine.

12 And it may also give everyone kind of

13 the notice of, okay, we should probably be weary

14 of this person or at least be encouraging them to

15 play along in the market chain appropriately.

16 So, I think that may serve that

17 purpose. So, there's at least that kind of

18 concept that we can kick around as well.

19 MR. EISNER: When I was working on drug

20 testing and alcohol testing in the Department, I

21 learned a very interesting statistic that when

22 picked up for drunken driving, the average person
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1 has already driven while drunk five times before.

2 So, my question for you is in your

3 area, your industry when you find a violation,

4 what is the likelihood the person is already a

5 routine violator however we define it?

6 Two times, three times or all these

7 other factors, is it usually the first time they

8 violated when you find out about it?

9 MR. RAWALD: Are you asking me this

10 question?

11 MR. EISNER: Yes.

12 MR. RAWALD: Okay. So, I mean, I would

13 really be using gut intuition because we haven't

14 had this before. So, I don't have good,

15 empirically-based information to give that.

16 So, if we analogize to the

17 manufacturer consequence, there are plenty of

18 manufacturers that make one noncompliant product. 

19 They don't make all their products noncompliant. 

20 There's plenty of reasons why one product may

21 slip through the efficiency or the quality

22 assurance process and become noncompliant and
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1 it's not the manufacturer's modus operandi to

2 cheat always.

3 So, that could very well be the case

4 with an installer or dealer. So, I don't know.

5 So, I can't opine more to say that

6 there are probably guys who are going to be

7 cheaters, and there are probably people who will

8 be cheat when the opportunity is presented

9 because it's going to be the right thing to do

10 for them at the time with their money and their

11 economics and what they're looking at.

12 So, I don't know what the case we're

13 going to be dealing with on a regular basis will

14 be.

15 MR. HUNGERFORD: This is David. Just

16 on probabilities, though, it's like speeding. 

17 The person who drives the speed limit all the

18 time and occasionally go over the speed limit is

19 -- the probability of getting caught is far lower

20 than someone who speeds all the time and may

21 occasionally get caught.

22 So, who's going to get caught in the
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1 net is the probabilities are heavily weighted

2 towards the folks that are violating on a regular

3 basis.

4 Even discounting the idea that someone

5 who gets turned in or caught is someone has drawn

6 somebody else's attention and is recorded or some

7 other way attention is brought to them.

8 MR. RAWALD: Right. I think that's a

9 fair assessment of human behavior. I would agree

10 with that.

11 MR. HURST: So, another question on if

12 you retain records, and you somehow find out that

13 somebody is allegedly violating and you subpoena

14 the records, you get the records and you start

15 thumbing through 30, 60, 90 days worth of work

16 tickets and there's one. Wow, there's another

17 one, too.

18 Do those count as individual

19 violations as well, or can you only investigate

20 the one violation?

21 MR. RAWALD: No, it's an open book to

22 me. So, that's what I'm doing. If I'm looking
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1 at your records, I'm looking at your records, you

2 know, and anything I see that's of concern is

3 going to be added to the complaint.

4 So, if I, you know, let's take the

5 scenario of Charlie installs the unit and that

6 shouldn't be there. Chuck goes to service it and

7 Chuck calls me and says, I'm sitting in the back

8 of Mrs. Smith's yard. Charlie McCrudden

9 installed a bad unit here. Here's a picture of

10 the unit with the data, with the name plate from

11 Gary's company, let's look at it.

12 So, then I will ask Charlie for his

13 records. And if Charlie gives me his records and

14 I look at them and I start seeing, oh, Charlie

15 did this in Mr. Jones' yard, did this in Mr.

16 Arnold's yard, then I'm going to say, okay, these

17 are all different things and now I begin to see a

18 pattern that I might consider to be routine based

19 upon, you know, if this is 90 percent of

20 Charlie's business and is doing this, then he's

21 clearly a routine violator.

22 MR. HURST: So, yeah, you can get to
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1 that threshold fairly quickly.

2 MR. RAWALD: I think so, yeah. That's

3 how we would approach it.

4 MR. CLARK: So, it's a little different

5 than the speeder, right?

6 MR. HURST: Uh-huh, right.

7 MR. CLARK: Because those five times

8 that he didn't get caught --

9 (Simultaneous speaking.)

10 MR. WHITE: This is Chuck White. You

11 further have some scale questions. If Charlie

12 works by himself and you did it five times,

13 that's one thing. But if I have a business with

14 25 guys and I did it five times, is there a

15 difference there?

16 MR. EISNER: And that's where I think

17 I was coming from when I suggested -- and where

18 Doug is coming from, I think, from an enforcement

19 perspective they want to give the enforcer some

20 discretion to react to that.

21 Maybe you're finding three violations

22 right away, but maybe it was because the person
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1 misunderstood the requirement and you come in and

2 they say, no, I didn't know that, I will stop

3 doing it that way.

4 It's the first time you caught them,

5 but it's also maybe the first time they

6 understood they were doing something wrong.

7 So, that's why sometimes it's better

8 to have factors than to have absolute numbers. 

9 Three violations and you're done. But from the

10 manufacturer's perspective, that's definitive.

11 I know they did it three times. I got

12 to stop dealing with them as opposed to

13 weighting.

14 It's not an easy choice, but it's

15 something I think you as a group have to decide.

16 Which way do you want to go? And then

17 if it's factors, what other kinds of factors you

18 want them to be able to weigh.

19 You don't have to necessarily say this

20 will be given so much weight and this will be

21 given very little weight, but you've got to

22 figure out what those factors are going to be and
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1 that will help you at least have something a

2 little bit more definitive.

3 MR. RAWALD: I mean, if you wanted to

4 make my job easier to do, then factors is the way

5 to go because it gives me the ability to build

6 cases that are tailored to the situation we're

7 dealing with.

8 If we use rigid criteria, then we're

9 going to -- it's going to be a lot more difficult

10 for me to effectively enforce because how I treat

11 a big company and a small company is going to be

12 the same, but it's not going to be fairly

13 evident.

14 So, there's a lot of things that need

15 to be -- a factorized approach allows me to kind

16 of really focus in on the facts that are unique

17 to each case. I think that's the best reinforced

18 point of view to do that.

19 MR. HURST: Can we ask if anybody is

20 opposed to the factor approach?

21 MR. EISNER: Anybody opposed to the

22 factor approach -- do you want to speak first?
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1 MR. McCRUDDEN: This is Charlie. 

2 Reserving the right to oppose, I'd like to ask a

3 follow-up on that.

4 So, if you're looking at the

5 factor-based approach --

6 MR. RAWALD: Right.

7 MR. McCRUDDEN: -- how does

8 essentially the notification occur? Because the

9 thing that concerns me the most is in the

10 information that, as John says, flows very

11 quickly and freely with the industry and the

12 suspicion that you may be on a list is an issue.

13 So, how would a factor -- can you walk

14 me through essentially a violation, but using a

15 factor-based approach?

16 MR. RAWALD: Right. So, and there's a

17 couple layers here. So, the process that we

18 would get to making a finding --

19 MR. McCRUDDEN: Right.

20 MR. RAWALD: -- versus what would

21 constitute the finding. So, the factors are what

22 would be, okay, I see now that Charlie over the
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1 course of the past six months has installed 25

2 percent of the time noncompliant units. That out

3 of his operation of installing, you know, other

4 installers that work for him, his 10 techs, they

5 all are doing it. It's very clear that he's

6 regularly doing this. I'm going to say based upon

7 all the factors and, you know, his company given

8 the size and everything, it seems like it's a

9 very routine thing that they're doing all the

10 time no matter who's involved, no installers, in

11 particular it's all the contractors' modus

12 operandi, I'm going to say, okay, Charlie's a

13 routine violator.

14 That's how I look at the factors kind

15 of I look at the whole pot, everything in there,

16 you know, the size of the company, how these

17 things are selling, how often you're selling

18 them, how many are bad ones versus good ones. 

19 That would all kind of measure in to me being

20 important.

21 But then I would say, okay, now,

22 what's the process? So, the first step of the
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1 process would be the complaint. Then it would be

2 investigation.

3 During the investigation I would ask

4 Charlie for your records. And then I would also

5 ask your distributors for the records, too,

6 because I want to make sure they correspond that

7 you're not hiding things from me that I can track

8 kind of how this thing happened.

9 And if necessary, I would ask the

10 manufacturer for records to kind of track these

11 up the tree. Though, I would probably not start

12 there. I would probably end there later on.

13 And then as I'm building my case, the

14 question becomes at what point do people want me

15 to let the people know that I'm looking at

16 Charlie? Is it when I've reached the decision,

17 or is it when I'm looking at Charlie initially

18 like when will be the right point. I think the

19 group has to talk about that.

20 So, once I announce the finding, then

21 the question becomes, now, what is your ability

22 to contest that? So, do you have an opportunity
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1 to do that?

2 And I think that we would want that. 

3 We want there to be a process in place to do

4 that.

5 And so we have at the Department is we

6 have one office that hears appeals of certain

7 issues.

8 And so, I haven't talked to them yet,

9 but I'm going to at least ask them if they're

10 interested and possibly a group that's interested

11 in me doing that, ask them if they put in place

12 for the contractor to be able to appeal that body

13 and say, hey, look, Doug got all his evidence,

14 but here's what those things really were about.

15 Now, I'm probably going to have

16 already asked you about the individual

17 transactions before I ever make a finding. I

18 think it's good to be thorough.

19 But if you decide you want to play

20 fast and loose with me and not give me

21 information, I'm going to make my finding. And

22 then you can of course appeal to this body if you
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1 want to.

2 I think it's probably the best way to

3 ensure this is where a process is involved so you

4 have at least this level to appeal.

5 And then after that, you know, you

6 always have the right to sue an agency for an

7 action it takes. So, that will be the next

8 action you can bring to court and say, well, it's

9 not fair what's happening to me.

10 But I think that's the process as I

11 would envision in a very basic, bare bones level

12 as I'm sitting here talking to you folks.

13 MR. McCRUDDEN: This is Charlie at

14 ACCA. So, I guess -- so, I'm not -- I think I

15 would prefer a factor-based approach. I think

16 you believe it's better. And my guess is when we

17 get beyond a certain point, there's probably a

18 way that if the contractor does remediate, then

19 you would --

20 MR. RAWALD: That would be a factor.

21 MR. McCRUDDEN: That would be a factor

22 and then perhaps they can say -- it's what I'm
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1 most concerned about is just the vagueness of the

2 fact that the manufacturers are the only ones

3 with any hammer coming down on them. And they're

4 just going to transfer it down to the

5 contractors.

6 That's the gray part which is when

7 does a contractor end up on their internal list,

8 which is this guy has shown up once or twice, or

9 this guy -- we've had inquiries from DOE looking

10 for records on this contractor twice now.

11 MR. RAWALD: From the distributor.

12 MR. McCRUDDEN: Or just it's Doug has

13 come up the chain and he's going to -- nothing

14 has happened, but --

15 MR. HURST: But I would presume that --

16 John Hurst with Lennox. I would presume that

17 through your investigation you would very easily

18 be able to determine who the manufacturer of that

19 equipment is.

20 MR. RAWALD: I would hope so, yeah.

21 MR. HURST: So, I think there's a chain

22 of custody once again of where the equipment came
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1 from.

2 MR. RAWALD: But I think Charlie's

3 concern is if I investigate Charlie once, is Jon

4 going to stop dealing with Charlie?

5 MR. McCRUDDEN: I mean, because Doug is

6 going to make a threshold upon what is routine. 

7 And it's whether it's a whole bunch at once or

8 whether it's one at a time, but you all probably

9 have yours.

10 MR. HURST: Would you go back to

11 factors for distributors and manufacturers?

12 MS. SHEPHERD: Well, I think -- this is

13 Amy Shepherd from AHRI, and I think that's the

14 point is I understand that Doug has a lot of

15 benefits, flexibility in his factors, but we

16 don't unless manufacturer end liability is only

17 tied to some sort of publication or notice

18 officially with DOE.

19 The manufacturers have to make that

20 same judgment before you guys do looking at the

21 factors.

22 And if the factors are so vague that
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1 we can't tell what DOE is going to do, then it's

2 going to lead onto the conservative side where

3 just one or two things, well, we don't know how

4 DOE defines this and what they're going to think

5 is routine. So, they're going to have to take

6 action at that point.

7 So, I just think that's a balance we

8 have to consider as we're talking about this,

9 because I think what helps the industry is the

10 certainty.

11 And what helps your ability to enforce

12 it is the flexibility. So, it's kind of figuring

13 out how to best balance those.

14 MR. EISNER: But even if it's just

15 something simple like numbers if he finds one and

16 starts investigating to see if there's a second

17 and a third because it requires three violations,

18 the company is going to know you're

19 investigating.

20 They don't know where you're going to

21 find three violations, because it may not be one

22 you sold. It could be something that another
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1 distributor sold or another manufacturer sold.

2 So, isn't there still some uncertainty

3 no matter what you do until they come out and

4 say, we found three, or we found enough factors

5 to say they violated it three times.

6 MR. CLARK: This is Gary Clark with

7 Goodman. To that point I agree with what you

8 just said.

9 We would probably prefer not to know

10 who you are investigating until there is action

11 going forward.

12 We can provide information, you know,

13 as Karen has mentioned, we don't sell to

14 contractors for the most part.

15 And so, in those kind of situations we

16 can tell you where we've shipped things, right,

17 but we don't have to know that you're

18 investigating Charlie if you just want to know

19 where these serial numbers were shipped, you

20 know.

21 We can say, oh, we shipped those units

22 to this distributor. Well, that distributor can
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1 sell it to, you know, thousands of different

2 contractors, you know.

3 It would get our antenna up, but it

4 certainly wouldn't get us into a situation where

5 we're trying to make business decisions, I don't

6 think.

7 MR. McCRUDDEN: Just a quick

8 clarification. When you talk about factors, are

9 you talking about factors in essentially the

10 penalty, or factors in determination of a routine

11 violation?

12 MR. RAWALD: The second.

13 MR. McCRUDDEN: Okay. Then I have to

14 rethink everything I just said, because I was

15 thinking --

16 MR. RAWALD: Because we're not talking

17 about quality of the contractor.

18 MR. McCRUDDEN: Yeah, okay. That makes

19 it even -- okay.

20 MR. RAWALD: Yes.

21 MR. McCRUDDEN: And that --

22 MR. RAWALD: We're talking about
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1 factors to determine whether someone is routinely

2 violating.

3 So, and I think there are, you know,

4 one violation every six months? If we want to

5 put numbers on, it's hard.

6 So, if it's a small business and

7 they've done five jobs and the five jobs have all

8 been bad, then it seems that they're a routine

9 violator.

10 MR. McCRUDDEN: Okay. I think I still

11 support factors. I just had to think that

12 through.

13 MR. RAWALD: So, if folks like, what I

14 can do tonight, I can lay out a thumbnail sketch

15 of a process with some language for some factors

16 and bring that back in the morning for some kind

17 of talk about it.

18 MR. EISNER: Do you want us to use the

19 usual process? Just start naming some factors

20 that you put up on a list that you can try to put

21 together.

22 You can probably as a group think of
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1 50 or 60 factors. It won't do that much good

2 probably for the enforcement attorney to have to

3 consider that many factors.

4 It's, you know, did they mitigate, for

5 example, might be important to you. How many,

6 you know, compared to the size of the company,

7 how many violations have they had? Were they

8 clearly intentional, or were they mistakes? That

9 kind of thing.

10 You guys should determine how

11 important you think they are, especially the

12 people who, you know, might be in danger of

13 violating the rule.

14 And then maybe give a rough sketch. 

15 You don't have to agree to what goes on the list,

16 but something for Doug to start with as an

17 enforcement attorney to come back and say here's

18 what would be helpful to me, here's how I put it

19 together.

20 And I think that might save you a

21 little time if there's some up front input into

22 it.
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1 So, anybody want to start off with it?

2 MR. HUNGERFORD: I'd like to -- this is

3 David. I'd like to think through a little bit

4 about --

5 THE COURT REPORTER: I'm sorry. Who is

6 speaking?

7 MR. HUNGERFORD: David Hungerford. I'd

8 like to think a little bit about the intent idea

9 and I guess that goes back to how the installer

10 obtained the incorrect unit or the noncompliant

11 unit.

12 Was it something that they actively

13 sought as in going out of their way to get it

14 like driving to Chicago from Florida or some

15 similar -- or always trying to buy units from the

16 north in order to bring them and importing them

17 in the south.

18 Is it something that he just stumbled

19 across it or it happened to be in a warehouse and

20 he ended up installing it because he had it?

21 Or was there a distributor involved

22 that because they can't be penalized, a bad
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1 distributor might choose to bring a few pallet

2 loads of SEER 13 units to the south or to the

3 west and try to sell them at a discount.

4 And, you know, those are all sort of

5 different circumstances. In one of them, the

6 contractor is actually a victim and makes you --

7 so, I guess -- I don't want all the bricks to

8 fall on contractors. It doesn't seem fair if

9 they're just trying to survive in a market where

10 they're being provided these -- the wrong units.

11 And so, I guess I was just sort of

12 brainstorming on the idea of intent.

13 MR. RAWALD: Okay.

14 MR. HUNGERFORD: How much effort

15 they're putting in to try and put in that

16 noncompliant unit.

17 MR. ROCKY: So, I'm sorry, David. This

18 is Bryan. I'm really -- I heard what you said

19 and I'm trying to just knee jerk reaction, but a

20 violation is the act of installing a noncompliant

21 unit that is done by a contractor or an

22 installer.
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1 So, how is that contractor or

2 installer a victim of installing a unit against

3 the regulation?

4 They're the one conducting the act. 

5 How are they the victim?

6 MR. HUNGERFORD: Because it's made

7 available to them and they're surviving because

8 they're trying to compete against the other guys

9 in the same neighborhood with access to the same

10 supplier.

11 It may be an extreme and unusual and

12 unlikely case. But when we're taking about

13 setting up these kinds of rules and these kinds

14 of criteria, we do have to consider the unlikely

15 and extreme cases and possibilities.

16 MR. ROCKY: And at this point, the only

17 prohibited act is one against the manufacturer to

18 make sure that that doesn't happen.

19 So, again, if the manufacturer is the

20 one being held responsible as a prohibited act,

21 but the actual violating act is installing

22 noncompliant equipment, what you're suggesting is
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1 leads us back to the distributor bringing product

2 into an area with the intent to sell noncompliant

3 units.

4 MR. HUNGERFORD: Yes, exactly.

5 MR. McCRUDDEN: This is Charlie with

6 ACCA. I think, you know, when we look at the

7 violations, there is a knowing standard for the

8 contractor to make an illegal installation. So,

9 as a contractor, I don't know if I can defend a

10 contractor knowingly violated.

11 So, and if it's going the other way,

12 there's no way I can defend a contractor who goes

13 the other way that causes a violation.

14 The only way I can see a contractor

15 being sort of like an innocent bystander in a

16 sense is the case where manufacturers have tested

17 and rated the product at 14 and ends up when one

18 of them drops a dime on the other at 13.

19 Now, the contractors install the 13

20 product, but we know that DOE doesn't go after

21 the contractor in that situation. They don't go

22 after the homeowner. They never have in those
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1 situations. So, you know, I don't know the remedy

2 there.

3 MR. RAWALD: Well, I think we discussed

4 before I think when I came up with the scenario.

5 MR. HUNGERFORD: Yes.

6 MR. RAWALD: So, because we have this

7 knowledge requirement for the contractor, they

8 wouldn't have knowledge because they would assume

9 that's a 14 product.

10 MR. HUNGERFORD: Right.

11 MR. RAWALD: And so, it would be on the

12 manufacturer. So, that's how we --

13 MR. HUNGERFORD: Today that's how it

14 goes.

15 MR. RAWALD: Right.

16 MR. WHITE: This is Chuck White and I

17 think there is an opportunity for legitimate

18 errors that I put my hand up, I've put the wrong

19 voltage on a unit at a time in my life.

20 It's right on the name plate. I know

21 what the switch was. I opened it up and turned

22 it on.
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1 The wrong product came out of the

2 warehouse and I didn't look. I hooked it up and

3 I never looked.

4 I mean, you could be on an apartment

5 project with 500 units you're putting in. After

6 about the fifth one, you're going to quit looking

7 at every tag because you're in production mode. 

8 You're slapping them in.

9 So, there are going to be some

10 opportunities where it was an honest area. A

11 border area where you're loading trucks as you're

12 going to Louisville, a guy's going to

13 Clarksville, and you got the wrong unit on the

14 wrong truck.

15 There's going to be some opportunity

16 for error, but they should be checking, but there

17 are going to be some occasions.

18 It's really hard, because like Doug

19 said, this doesn't exist. And it's going to be a

20 while before we really have significant units to

21 have any kind of statistical basis for what is

22 the error rate going forward particularly with
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1 the sell-through division.

2 So, I think you have to have in your

3 method, it was a legitimate mistake. It was an

4 error.

5 And a company that makes an error

6 shouldn't have ten of them a week unless they

7 gotten units from the distributor because they

8 were mislabeled or whatever that you didn't

9 check, but there will be some mistakes.

10 A guy that is taking his truck and

11 making a run for the border and not for Taco

12 Bell, that's pretty obvious. He's cheating.

13 MR. BALLO: It seems like we're

14 circling around the concept of having as a factor

15 sort of the degree of bad faith exhibited by a

16 party.

17 Driving to Chicago to get units to

18 install in Florida just seems a whole lot more --

19 MR. WHITE: That seems pretty obvious.

20 Mr. RAWALD: But it's also not very

21 smart, right? There's no cost savings there. 

22 That's a lot of money wasted.
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1 MR. HURST: Well, that's my earlier

2 point on is there a graduated scale because, you

3 know, you used the example of speeding.

4 There's five over and you can get

5 pulled over for that, and then there's doing 90

6 in a school zone.

7 And both are speeding, but I think

8 there's a very different intent in both

9 violations.

10 And so, that's why I was advocating if

11 you can establish intent, you know, sure you can

12 make a mistake, but there are things that we're

13 putting in place to avoid mistakes.

14 The consumer has to receive the label,

15 the FTC label. We're putting the label on the

16 equipment.

17 For most of my life I've always known

18 what state I'm in. So, I'm not too confused by

19 that.

20 I think, you know, dealers that are

21 going to be operating on, you know, the line, I

22 think they're going to be a little more
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1 hypersensitive to it than maybe somebody that,

2 you know, gets the wrong piece of equipment

3 shipped to them by accident.

4 But I agree with you, Chuck. Mistakes

5 will happen, but I think you have to establish

6 what the intent was.

7 MR. WHITE: Yeah, you can't make 10

8 mistakes a week. That looks pretty bad.

9 MR. RAWALD: Okay. So, what I've heard

10 Chuck mention is number of times over a length of

11 time are also a factors.

12 MR. McCRUDDEN: Yeah, I think -- this

13 is Charlie at ACCA. Number, absolute number,

14 term? Is it a ratio?

15 Well, and it could be effort to

16 remediate. Do you foresee a situation where you

17 make -- inform a contractor, hey, we're looking

18 at these. And then within three days he comes

19 back and says, you're right and I've already

20 changed those out.

21 So, is that possible how you conduct

22 an investigation?
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1 MR. RAWALD: I think it's what we went

2 back to with what Tim was talking about.

3 MR. McCRUDDEN: Right.

4 MR. RAWALD: So, that would be

5 something that would kind of meet their consumer

6 advocacy need and also give some incentive in

7 doing --

8 MR. MELCHI: That was a question that

9 one of my guys had that said their customer finds

10 out that one of their techs is installing air

11 conditioners illegally and that company takes a

12 step terminating that employee and making that

13 end.

14 Would that factor into DOE's --

15 MR. RAWALD: I think that should be a

16 factor actually by the contractor eliminating

17 that installer who's a bad installer.

18 That's what went into when I was

19 talking about the point of every one of the techs

20 are doing it versus one tech is doing it. I

21 think it's important.

22 So, we didn't have this in the record
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1 retention, but it might be good to keep from a

2 contractor view who did the installation? Who on

3 your staff was doing the install?

4 That might be important to keep. Was

5 that Tech 71 versus Tech 54, you know? However

6 which way you keep track of your people on your

7 timecards.

8 MR. HURST: Conversely, the dealer that

9 starts shredding documents the second you make

10 your phone call --

11 MR. RAWALD: Right.

12 MR. HURST: That might be a factor as

13 well.

14 MR. RAWALD: But I think cooperation,

15 level of cooperation, that could be a factor.

16 (Laughter.)

17 MR. EISNER: Other suggestions?

18 MR. RAWALD: It's almost resolved.

19 MR. HURST: I would change degree of

20 bad faith, bad/good, because there's going to be

21 good faith as well and acknowledge the good actor

22 as well.
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1 If remediation is going to be a

2 factor, then certainly good faith should be a

3 part of that or if the public knows.

4 MR. HUNGERFORD: I don't know where

5 this fits. This is Dave Hungerford again. I am

6 a little concerned with, Doug, when you're

7 talking about how the process works.

8 I start getting a little worried about

9 a small contractor who faces a bureaucratic

10 process that they just can't handle, that they

11 don't have the resources to cope with.

12 And I'm wondering how -- I don't know

13 how that fits into this particular part of it,

14 but how does DOE handle an individual contractor

15 or small contractor who is making some errors or

16 how do they determine without ruining his life.

17 MR. RAWALD: Right.

18 MR. HUNGERFORD: I mean, look, you

19 know, somebody with 20 trucks has some resources.

20 MR. RAWALD: Right.

21 MR. HUNGERFORD: Someone with one

22 truck, doesn't.
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1 MR. RAWALD: Valid question and I will

2 say is the level of size does not indicate the

3 level of sophistication. So, some very large

4 companies are still not very sophisticated as far

5 as their record keeping and what they're prepared

6 to deal with from the government.

7 So, and this is something we deal with

8 today. Because when we deal with from a

9 manufacturing point of view, there are

10 manufacturers who are large like a lot of people

11 here, and there are manufacturers who aren't who

12 are regulated by DOE and we're bringing actions

13 against them.

14 And so, we take every case that comes. 

15 And so, we deal with the individuals we're

16 dealing with and we understand a particular

17 situation.

18 Now, the problem is there's nothing in

19 the regulation saying, you know, if you're size,

20 we're going to be this long, if you're this size,

21 we're going to be that long.

22 We use our discretion, which people
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1 have to trust we're going to be reasonable with,

2 to make sure that we give people what they need

3 in order to respond to us adequately and we help

4 people along.

5 I mean, I spend as much time educating

6 people I regulate as I do, you know, actually

7 charging them money.

8 So, a lot of my time is spent helping

9 people to become compliant. And so, I think that

10 would be the same way we would approach this is

11 we would spend a lot of time talking to the

12 contractor, educating them on the concerns and

13 trying to help them figure out what we need and

14 why we need it and then help them work through

15 how to show it to me.

16 And then if worse came to worse, you

17 know, I could envision possibly be flying out

18 there to say, okay, let's sit down and go through

19 your records. Let's see what we can figure out

20 here. 

21 So, that would be a worst case

22 scenario for a lot of reasons, but I can see that
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1 kind of thing happening if necessary.

2 MR. McCRUDDEN: I can see a lot of

3 contractors in Hawaii suddenly having Doug show

4 up.

5 MR. RAWALD: Unfortunately, I don't do

6 air conditioners. So, I won't be there.

7 MR. EISNER: Let me just point out,

8 too, and tell me if I'm wrong, but there are

9 statutory requirements that the agency has to go

10 through.

11 So, if they send an enforcement

12 investigator in to look at records or something

13 like that, they have to advise the party

14 especially meant for small entities that you have

15 a right to complain about the way Doug treated

16 you during this investigation. You have a right

17 to go to an independent ombudsman who can look

18 into this matter and get an answer.

19 Doug, that's applicable to what you

20 do, isn't it? And that helps the little guy.

21 MR. RAWALD: I never tell anyone to

22 complain about me. I usually give them a comment
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1 card and say, please fill out favorably.

2 So, that's true. I mean, people have

3 all these abilities. We do advise people of all

4 the things they can do.

5 MR. McCRUDDEN: So, this is Charlie

6 with ACCA. I don't know if this falls under

7 intent, but essentially the type of error or the

8 type of -- let's say it's an error based on a no

9 match as you're walking your way through.

10 You've got a no match because of a fat

11 finger error somewhere. So, you're showing up

12 somewhere and you're saying, okay, I'm looking

13 for this because apparently you have this.

14 And I don't know if you informed

15 anybody but that contractor. And maybe it turns

16 out to be nothing, maybe it does turn out to be

17 something. I don't know if that's a factor. I

18 don't know if record keeping compliance could be

19 a factor.

20 I mean, if we want record keeping

21 compliance, you have to comply, but there are

22 probably easier ways to comply or better ways to
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1 comply.

2 I mean, everybody knows this is coming

3 down the pike. So, even if that contractor

4 doesn't even have a sophisticated system, they

5 still know they have to keep certain records.

6 Those who comply and those who can

7 sort of demonstrate compliance, to me, has an

8 understanding of the rules that should be a

9 factor for you.

10 And then finally, perhaps there is

11 something that you can consider which is evidence

12 of training or education of the technicians.

13 So, let's say ACCA has put together

14 this training module and we make it, you know, we

15 voluntarily sort of make it a downloadable form

16 that you can stick -- and each service tech has

17 watched this webinar, a certificate that says,

18 I've watched this webinar, it's in my file.

19 You show up and they say, well, this

20 was an honest mistake and here's how we can prove

21 it was an honest mistake. We've trained all our

22 folks. They all understand how it's written,
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1 perhaps.

2 MR. RAWALD: Yeah, I think it's worth

3 taking into consideration. So, and Harvey

4 actually made this point I think several meetings

5 ago that he thought that that would certainly be

6 helpful in that way. I think that's a valid

7 consideration.

8 MR. EISNER: Any other suggestions?

9 (No response.)

10 MR. EISNER: All right. So, we give

11 Doug the assignment of visiting with his kid for

12 the first time today and then coming back

13 tomorrow anyway with a response on this.

14 MR. RAWALD: Okay. So, we have routine

15 kind of fleshed out. So, now that Jordan left

16 and he doesn't have to worry about it.

17 We have violation kind of fleshed out. 

18 So, really the question is going to be what

19 process it would be for assessing or finding

20 someone to be a routine violator and then come up

21 with a better robust idea for you folks tomorrow

22 on that how I see it.
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1 And then we had the open question that

2 we kind of diverged from which was the prohibited

3 acts which at least some of the room was saying,

4 hey, we're willing to at least exempt

5 distributors from having a prohibited act or not

6 pursue that any further in light of the

7 settlement and everything else, but we have to

8 resolve that.

9 Do we want to resolve that today, or

10 do we want to think about it and come back

11 tomorrow and talk about that?

12 I don't know if some folks need to go

13 home and talk to people that they represent

14 possibly before --

15 MR. HUNGERFORD: We need to talk to

16 someone.

17 MR. RAWALD: Okay. So, we'll come back

18 tomorrow. And then we hadn't really talked about

19 the reasons for having a prohibited act for

20 contractor and dealers.

21 You guys brought up some ideas, but we

22 were really focused on distributors. And
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1 obviously you're different, because you don't

2 have a settlement agreement that binds you.

3 MR. McCRUDDEN: Right. Yeah, this is

4 Charlie and I made a point that -- because I

5 think you asked that at one point, but for me it

6 was I'd like more information about what's a

7 violation -- not what's a violation, but what's a

8 routine violation and how we're going to -- and I

9 think we're closer.

10 I'd still like some more certainty

11 about what -- how this is all going to fit

12 together.

13 When you're talking about now, I just

14 --

15 MR. RAWALD: Maybe we should do it

16 tomorrow then once we have the process figured

17 out.

18 MR. McCRUDDEN: Okay.

19 MR. RAWALD: And then maybe we can use

20 the rest of the day today and I can meet with the

21 contractors and distributors, talk about record

22 retention and we have discussion with the group
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1 tomorrow if people are amenable to that idea.

2 MR. MELCHI: I mean, would it be wise

3 that any manufacturers have distribution

4 interests should probably be in that as well?

5 MR. RAWALD: Yeah, actually I think

6 both John and Jordan asked that very question. 

7 So, yeah.

8 (Simultaneous speaking.)

9 MR. RAWALD: Hold on. Hold on. Jordan

10 is trying to make a point.

11 MR. DORIA: So, I just had a question. 

12 On the definition of routine, I don't see

13 anything there on the -- who makes a

14 determination on those again back to the -- if

15 that wasn't discussed, I'm just saying is that

16 something we'll discuss tomorrow or --

17 MR. RAWALD: Right. So, we haven't

18 discussed that. I think we're still at the

19 Jordan versus Doug kind of dichotomy here.

20 And so, I'll come back tomorrow and

21 kind of paint the ideas out.

22 MR. DORIA: Okay. All right. Sounds
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1 good.

2 MR. SACHS: Just this is Harvey and

3 just foreshadowing tomorrow's discussion on

4 prohibited acts, I think we've come a long way on

5 the distributors.

6 From listening as carefully as I can

7 today and thinking about it otherwise, I'm not

8 ready to agree that contractors are incapable of

9 doing prohibited acts.

10 And part of it is the demographics of

11 the industry is -- Charlie in particular has

12 reminded us and I think it's true for you as

13 well, Chuck, that there may be gradations, but we

14 can divide that industry into real businesses and

15 much smaller operations that are thought to be

16 more likely to try to cut corners.

17 And I think for reasons of

18 installation quality and many training and many

19 others, I would hate to give up the prohibited

20 act for contractors as being one of the

21 mechanisms to encourage proper installation of

22 compliant equipment.
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1 So, that's just announcing a stake in

2 the ground. I'm not saying that I'm going to

3 live or die by it, but here we go.

4 MR. McCRUDDEN: I heard you.

5 MR. SACHS: Okay.

6 MR. BALLO: This is Tim and I have one

7 other criteria or factor I think that's making it

8 a little difficult for me to accept the lack of a

9 prohibited act for contractor than it is for

10 distributor not that I think waiving it for

11 distributors is a good idea.

12 If I am dinged and I'm a contractor,

13 I imagine, and maybe I'm wrong on this, but it's

14 much easier for a contractor to go print up a new

15 shingle and come back as some other entity with a

16 clean slate than it is for a distributor to do

17 that if you want to avoid becoming a routine

18 violator.

19 So, maybe I'm wrong on that. But if

20 that's true, I would suggest that civil penalties

21 have a more important role to play in penalizing

22 the contractors maybe than they do for
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1 distributors.

2 MR. FERNSTROM: Well, Tim, this is

3 Gary. I'd like to add that I think we've come to

4 general agreement that the contractors know where

5 these products were installed.

6 (Laughter.)

7 MR. FERNSTROM: And the distributors

8 may likely not. So, I'm much more interested in

9 penalties for contractors than we have for

10 distributors.

11 MR. RAWALD: Just as a point of just

12 sheer analysis. So, we run into this problem

13 currently where small manufacturers who are

14 facing civil penalties declare bankruptcy and

15 then we can't touch that or it becomes more

16 difficult.

17 So, I don't even with these little

18 penalties, the bankruptcy and reincorporation

19 problem would still possibly exist for the

20 Department just for your purposes.

21 So, I don't think this will solve

22 that, but it certainly -- we could certainly try
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1 to get money from them before they declare

2 bankruptcy and disappear, but it is a problem

3 that exists currently.

4 MR. SACHS: Your point is well taken. 

5 Again, I'd like to sort of trial balloon my

6 thinking which is the contractor who does decide

7 to disappear and reappear in a community in a

8 metro area is still going to have the problems of

9 the grapevine and difficulties with getting

10 credit the next time, all these other things.

11 So, I still think it's a piece of the

12 compliance puzzle.

13 MR. RAWALD: Understood. So, is

14 everyone comfortable with us adjourning and me

15 focusing on the record retention folks for the

16 rest of the evening and --

17 MR. SACHS: Delighted.

18 MR. RAWALD: Okay.

19 MR. EISNER: All right. See everybody

20 tomorrow at 9:00.

21 (Whereupon, at 2:42 p.m. the meeting

22 was adjourned.)
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A

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191:16 255:15

bent 216:5

best 4:8 97:20 121:16

165:16 177:15 197:20

199:21 229:17,17

248:17 253:2 256:13

bet 151:1,3

better 10:5 26:13 33:7

121:10 135:4 161:12

168:10 206:9 235:18

247:7 253:16 276:22

278:21

beyond 48:15 208:5

253:17

bid 156:9 168:5 227:1

bids 155:16,22 157:9

157:14 163:10 166:3

big 7:18 21:18,21 53:8

65:5 80:16 136:4

175:10 207:1 217:11

218:4 248:11

bigger 7:21 8:3 208:18

billet 231:21

Biloxi 79:14

bin 234:13

binds 280:2

bit 24:12 45:1 96:5,10

97:21 112:22 132:20

162:16 180:9 225:17

248:2 261:3,8

bite 49:15

black 56:4

Blacklist 33:11

blank 226:5

board 32:11,13 113:14

151:11 153:7 208:21

210:5 211:13 217:9

body 26:3 55:18 156:5

156:15 252:12,22

boilerplate 35:9

bold 21:22

bolster 75:5

bones 253:11

book 244:21

border 67:13 68:11

70:8 76:2,22 131:7

266:11 267:11

bothering 167:16

bottom 52:3 148:12

229:19

bounced 182:22

box 88:19 226:18 227:3

228:21

boxes 133:18

brainstorming 262:12

branch 48:21 65:2 70:7

76:2

branch-specific 77:11

branches 63:5 72:17

141:12

brand 47:7,8,10

brass 227:21

breadth 112:3

break 16:10 90:11

145:19 169:19 176:9

176:17

bricks 262:7

bring 23:18 31:20 32:4

39:19 145:12 177:2

177:16 202:22 211:14

227:12 232:3 240:18

253:8 259:16 261:16

262:1

bringing 25:20 52:1

60:6 75:9 177:22

264:1 273:12

brings 189:20 206:22

broad 97:22

broad-based 165:8

broaden 55:1

broader 83:17

brochure 193:6

broken 42:2

brother-in-law 136:20

brought 7:14,15 67:9

103:7 142:4 184:12

199:20 244:7 279:21

Bryan 2:4 4:21 22:5

93:21 111:13 117:4

141:5 173:17 193:8

201:12 202:7 262:18

Bryan's 9:15

bucket 130:14

build 23:15 79:21

103:21 240:1 248:5

builder 91:4,13

building 164:20 251:13

builds 239:22

built 142:13 143:13

bullet 203:15 207:1

232:5

bulletin 208:21

bullets 216:21 217:2

bunch 55:19 56:21 78:1

79:6,14 131:16

228:15 255:7

burden 24:2,8 25:15

38:1 49:9 96:7 98:5

100:17 152:18

burdensome 26:15

147:6,10

bureaucratic 272:9

burned 175:13

business 67:14 68:1

70:11 76:8 77:5 78:7

87:21 115:20 118:4

123:1,5 125:21

127:12 129:18,21

130:2 131:8 134:15

142:19 150:6 157:22

194:8 229:21 230:18

233:7 245:20 246:13

258:5 259:6

businesses 49:7 70:15

282:14

busy 51:12

butt 24:18

buy 48:8 167:5 191:8

261:15

buying 77:21 78:1

111:22 150:18 206:5

238:15

buys 122:9

bystander 264:15

C

C 134:3,7

cab 59:22

calculate 59:20

calculating 147:22

calculation 182:1

California 1:16,19 10:3

12:9 15:10 58:18

68:18,21 70:9,15 72:1

72:9 73:8,16 76:3,15

152:2,4 160:9 164:3

192:17

call 128:5 135:18

138:11 142:18,19

146:20 154:12 156:6

156:7,8,13 158:1

160:19 161:7 162:11

162:13 163:22 184:2

192:1 240:12,13

271:10

called 167:20 240:21

calling 162:8

calls 153:6 245:7

capacity 29:22 30:5

38:18

capture 28:7

car 238:3

card 148:9 276:1

cards 59:22 131:2,9

care 3:22 120:10 134:6

196:20

careful 3:15

carefully 282:6

Carrier 1:17 199:4

carrots 103:9 217:11,12

carry 34:19 47:6 70:12

234:11

carrying 170:3

case 8:9 19:19,20 21:1

22:12 23:9 28:8 43:15

45:8 46:13 61:10 68:9

81:12 91:7 95:13,20

126:22 131:14 186:1

188:5 211:2,4,7

227:15 239:22 243:3

243:12 248:17 251:13

263:12 264:16 273:14

274:21

cases 62:1 78:22 79:16

133:21 158:21 164:8

239:15 248:6 263:15

catch 137:12 165:9

caucus 17:16,20

caucused 4:22

caught 118:16 121:3

148:20 149:1,2 166:3

221:2,3 243:19,21,22

244:5 246:8 247:4

causes 264:13

cave 54:11

caveat 223:9

Cell 180:19

cement 239:22

center 67:10 69:15 72:9

centers 72:17

central 1:3 29:21

109:10,11,20 110:4

110:12,14,15,18

111:18 191:8 193:14

certain 9:9 10:1 34:11

34:13,18 44:3 71:8

123:18 207:17 252:6

253:17 277:5

certainly 15:13 25:19

54:17 55:5 80:1 150:5

150:19 152:19 167:6

169:7 219:15 236:13

258:4 272:2 278:5
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Neal R. Gross and Co., Inc.

289

284:22,22

certainty 33:15 236:8

256:10 280:10

certificate 277:17

cetera 9:2

chain 17:1,10 44:6 58:8

64:15 66:8 91:11 98:7

101:10,13 102:4

123:4 127:18 132:8

133:16 134:2 135:20

136:1,8 141:12 157:3

166:13 224:3,20

228:8 241:15 254:13

254:21

challenges 57:1

challenging 213:10

chance 5:1 180:8

change 8:1 22:14 30:1

30:17 32:3 89:6 98:19

98:20 101:6 194:1

205:12 213:20 214:1

227:20 228:17 238:18

271:19

changed 30:21 53:5,16

126:14 227:22 269:20

changes 227:18 232:12

changing 32:9

channel 116:5 222:12

chapter 229:13

charge 101:3,9,17

103:3 149:13 184:20

charged 93:10,13

184:22 185:3

charges 222:8

charging 274:7

CHARLES 1:20 2:7

Charlie 41:20 48:2,15

50:4 71:12,18 75:13

106:5 107:10 114:17

116:3,11,22 118:15

118:17,18,20,21

119:4,6,10 120:9

124:7 130:20 136:13

136:14,15 137:11

141:17,18 144:17

151:8 152:22 182:4

187:19 188:16 204:8

223:13 227:12 229:6

232:9 245:5,8,12,13

245:14 246:11 249:1

249:22 251:4,16,17

253:13 255:3,4

257:18 264:5 269:13

276:5 280:4 282:11

Charlie's 116:7,22

117:11 155:6 160:14

161:8 162:17 163:20

182:11 245:20 250:12

255:2

cheat 243:2,8

cheaters 243:7

cheating 154:13 155:1

163:10,12 267:12

check 21:4 23:22 88:8,8

88:18 133:18 157:15

226:18 227:3 228:21

267:9

checked 134:7

checking 266:16

checklists 135:8

checks 138:12

Chicago 133:7 261:14

267:17

chicken 162:9

chime 58:12 159:6

chip 49:21

choice 122:18 247:14

choose 262:1

Chuck 40:8 106:8 111:6

155:14 160:15 161:4

163:20 166:10 187:19

210:8 227:12,14

230:2 235:7 236:2

245:6,7 246:10

265:16 269:4,10

282:13

Cincinnati 66:13 67:11

67:15

circle 40:3 235:13

circling 130:4 267:14

circular 170:15

circulating 172:5

circumstances 262:5

civil 16:21 46:7 134:6

181:22 182:1 184:17

210:11 211:9 212:10

212:17 283:20 284:14

claims 161:11

clarification 39:12

186:16 258:8

clarify 37:2 41:7 166:11

202:8

clarifying 40:9 47:5

clarity 35:14

Clark 1:15 27:20,20

79:15,15 80:15 81:5,9

81:19 82:6,10 87:22

88:11,13 89:3,6,15,21

90:4 132:19 161:17

161:18 162:15,15

163:13 164:10,14,16

169:16 246:4,7 257:6

257:6

Clarksville 266:13

clean 153:3 283:16

clear 12:2 55:12 65:8

66:2 198:8 205:4

211:11 241:10 250:5

clearer 135:21

clearly 245:21 260:8

Click 163:12

clients 193:4 233:21

climb 54:10

clock 145:10,11

close 8:22 9:11 13:8

15:6 45:3 147:9

187:20 209:1

closer 15:18 19:8

235:13 280:9

closing 122:11

CO2 196:21

code 23:5 225:6

codes 19:22 20:17

codify 46:20

coil 22:11

collaborate 229:8

collaborating 217:19

collectively 215:9

colluded 198:19

colluding 116:9

colorless 155:8

combination 8:7 18:10

20:3,18,19

come 6:16 9:18 16:6

26:3 27:3 38:7 50:2

51:18 56:3 63:17

85:12 86:11 89:8

90:12,13 107:20

129:11,12,17 137:12

144:3 161:9 165:9,16

167:15 176:10 179:7

179:7 191:1 232:10

234:12 237:1 247:1

254:13 257:3 260:17

278:20 279:10,17

281:20 282:4 283:15

284:3

comes 20:15 25:7 47:9

72:11 86:8 97:11

129:20 130:1 139:20

145:11 152:1 164:19

221:6 223:18,19

236:19 269:18 273:14

Comfort 2:14

comfortable 15:13

31:18 33:22 54:4 55:3

57:12 67:3 159:2

177:18 178:5,14,20

178:21 189:14 214:5

239:4 285:14

coming 4:12 32:14

41:18 49:9 121:21

246:17,18 254:3

277:2 278:12

comment 90:19 170:19

199:2 219:18 275:22

commentary 239:1

comments 10:18 30:4

30:14 32:6 34:8 49:2

81:21 132:4 171:1

185:14 187:12 189:1

189:18 197:14 209:10

209:11 215:15 234:16

commerce 66:9 102:3

Commission 1:19

Commission's 152:5

commit 9:8 217:2

commitment 215:20

commitments 230:11

committed 101:1

Committee 7:13 174:2

202:10,11

common 159:11 237:3

communicated 34:12

communication 194:2

community 230:4 231:5

234:19 240:9 285:7

companies 222:8 273:4

company 2:2,11 47:11

89:16 116:7,8,16

142:13 143:4 245:11

248:11,11 250:7,16

256:18 260:6 267:5

270:11

company's 67:14 113:5

comparability 18:14

comparable 102:22

103:17

compare 102:21 159:5

199:17

compared 260:6

comparison 120:18

compelling 154:20

155:1,5

compete 70:16 263:8

competing 152:14

157:8,9

competitive 151:7

159:17 169:8 176:5

competitor 164:19

complain 167:12

275:15,22

complaint 85:14 152:9

245:3 251:1

complaints 168:3

complete 187:4

completed 186:1,8

completely 74:6 96:7

144:19 190:17

complexity 23:18

compliance 27:13

73:11 100:7 106:21
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Neal R. Gross and Co., Inc.

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107:7 122:16,19

135:4,11 152:4 153:4

153:10 159:20 165:3

174:2 202:11 212:21

218:13 219:3,8

224:15 231:2 233:14

234:3 276:18,21

277:7 285:12

compliant 106:16

158:19 162:21 180:18

196:16 197:13 199:16

218:2 231:3 274:9

282:22

complicated 192:10

223:2

comply 44:16 45:12

104:20 106:10,19

122:22 220:2,4

225:13 240:11 276:21

276:22 277:1,6

complying 161:3

component 142:6

229:16 235:16

components 13:15

compressors 110:1

computer 50:7 51:17

concept 10:21 61:9

84:11 87:14 100:3

241:18 267:14

concern 29:9 31:2,3

69:4 81:20,21 85:16

89:21 95:6,10 96:5,10

105:20 115:19 116:20

119:15 131:3 135:14

136:3 217:15 240:21

245:2 255:3

concerned 24:12 66:13

68:18 85:19 104:18

212:15 254:1 272:6

concerns 29:6 94:21,22

95:3 124:15 138:8

207:20 249:9 274:12

concession 10:4 60:15

96:18 165:13

concluded 108:3

conclusion 75:1

concrete 154:10

condensing 13:10

14:16 19:21 20:16

53:7 76:14 92:12,15

92:18,22 93:22 94:5

110:16 155:10 156:3

156:13 197:12 217:3

conditioner 1:3 6:12

109:10,11,21 110:4

110:19

conditioners 29:21

110:13,15 111:18

193:15 195:7 203:6

270:11 275:6

conditioning 1:20

133:21 161:8 206:13

conditions 191:9

225:21

conduct 78:11,12

269:21

conducting 263:4

conferences 228:11

229:12

confidential 208:10,11

confidentiality 208:14

confused 40:6 155:20

162:16 195:12 199:11

199:15,18 216:8

268:18

confusing 193:20,21

195:4

Congress 110:5

conjures 61:20

connection 115:6

consensus 5:15 24:17

25:2 179:7 213:22

218:19

consequence 25:1,3

49:18 87:17 141:8

149:2 223:11 242:17

consequences 46:8

105:6 223:16 240:4,4

conservative 180:10,22

181:14 256:2

consider 30:4 168:14

169:4 185:11 187:3

239:7 245:18 256:8

260:3 263:14 277:11

consideration 239:10

278:3,7

considerations 84:12

considered 184:16

consistent 175:15

181:8

consistently 151:4

217:17

consolidated 176:1

constitute 66:20 95:4

219:16 249:21

constitutes 125:6 150:3

constraints 49:22

constructed 53:13

constructing 42:21

constructive 65:14,20

77:18 82:17 84:6

125:19 129:7 139:15

145:17,20,21 146:6

191:3

constructively 130:7,10

Consulting 2:10

consumer 12:4 155:16

182:10 200:4 218:1

268:14 270:5

consumer-oriented

206:2

consumers 158:6

203:14

cont'd 2:1

contempt 46:7 220:5

223:5

contest 251:22

context 35:21 36:3

41:19 50:12 53:1 85:5

96:2 197:17 240:3

continue 83:10,22

85:20 118:21 119:5

159:17 235:2 237:8

continues 119:6

continuing 87:21

contract 47:18

contractor 32:20 33:11

41:4,8 44:12 53:5,14

53:17,18 54:15 67:20

82:2 83:2,18 107:22

108:8 113:8 114:21

115:3,5 116:3 117:16

124:15,17 125:21

127:20 131:7 140:15

142:21 143:5 150:21

152:6,14 154:6,13

156:7 157:9 158:22

160:11 168:19 177:10

178:12 181:3,6 185:2

188:19 190:8 199:8

217:19 223:18 226:15

227:2 232:21 234:22

241:3,6 252:12

253:18 254:7,10

258:17 262:6,21

263:1 264:8,9,10,12

264:14,21 265:7

269:17 270:16 271:2

272:9,14,15 274:12

276:15 277:3 279:20

283:9,12,14 285:6

contractor's 67:16

115:11 151:3

contractors 1:21 2:7

33:9 44:2 54:1 55:13

55:15 68:20 70:8

79:17,20 80:7,21

103:4 105:13,22

106:7 108:15 112:15

112:20 113:6 114:20

131:2 141:13,13

142:8 149:8 151:10

153:5,21 160:15

166:2 168:9 180:3

184:20 197:20 199:6

207:5 208:17 212:20

224:5,11 225:9 226:3

230:9,15 232:15

250:11 254:5 257:14

258:2 262:8 264:19

275:3 280:21 282:8

282:20 283:22 284:4

284:9

contracts 64:17

control 223:8

Controls 2:4

conventions 228:11

229:13 235:21

conversation 30:20

54:7 57:5 134:13

162:17 225:17

conversations 3:10

56:21

converse 234:12

Conversely 76:20

271:8

convince 27:5

convinced 53:6

Cooling 51:20 117:12

cooperating 64:18

cooperation 271:14,15

Cooperative 1:16

cop 123:8 128:9

cope 272:11

copies 157:8,10 170:14

172:5,11

copious 72:15

copy 172:6

corners 282:16

cornerstone 211:21

Corporation 1:17

correct 6:8 16:4 18:22

42:22 73:18 116:19

116:19 141:4 148:10

149:3 186:22 212:12

233:19

correctly 11:2

correspond 251:6

cost 22:18 24:8,19 26:4

27:13,19 35:3 104:19

159:20,22 164:11

167:4 176:4 267:21

cost-benefit 28:18

costing 176:4

costly 7:22 26:14

costs 28:4 29:1

Council 2:3,5,12

Counsel 1:18 2:4,13

count 215:4 244:18

counter 51:10,12 63:2

63:16,16,20,21 65:3

68:10 76:4,13 86:7
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97:11 232:1

countermand 112:8

country 217:10 228:15

couple 3:19 5:9,16 24:3

158:10 169:21 172:5

192:4 208:17 230:10

241:5 249:17

course 35:4,6 116:6

129:18 130:2 165:5

184:1 208:10 209:4

225:21 250:1 252:22

court 3:13 14:3,6 19:6

19:12 46:7 104:19

185:22 220:3,3,5,6,8

221:22 223:4,4

225:16 253:8 261:5

courts 220:6

cover 97:16 109:15

covered 86:16 109:13

110:8

Covington 67:12 79:10

79:10

create 40:13 84:14

213:21

created 40:12

credit 59:22 285:10

criteria 248:8 263:14

283:7

critical 78:17 145:3

cross 137:2

crossed 137:22

crosses 140:5

culpable 212:19

current 18:4,13 53:22

68:1 85:5 111:5 159:5

currently 61:19 105:6

113:14 123:16 181:9

284:13 285:3

custody 157:3 254:22

customer 78:8 122:5,9

127:14,15,19 128:5,7

130:19 135:16 140:8

181:3,5 190:10

226:21 227:5 270:9

customer's 156:10

customers 67:12 70:13

76:5,10,21 77:6

123:17 136:5 142:3,8

144:13 148:14 182:14

231:11

cut 64:3,17 116:15

117:10 122:10 282:16

cuts 196:19

D

D.C 1:11 60:1

dah-dah-dah-dah 63:10

damaging 103:16

damn 87:8 138:19

141:19

Dan 1:14 136:10 200:5

201:19

danger 260:12

dark 62:17

data 28:18 102:21

131:11 173:7 216:1

245:10

database 126:4,9,11

128:13 138:12 139:12

140:17 141:10

date 177:10 186:1

187:4,15 194:8 201:6

204:13

Dave 14:5 57:17 71:16

71:19 75:14 170:3

272:5

David 1:19 68:6 158:22

243:15 261:3,7

262:17

day 171:13 211:17

280:20

days 165:17 181:20

237:11 244:15 269:18

DC 70:5

de-escalate 135:6

deal 53:8 55:7 65:5

113:17 147:2 273:6,7

273:8,15

dealer 32:20 43:15 53:5

53:14 54:15 72:11

75:8 79:7,10,12 81:12

81:16 101:4 115:8

118:15,22 127:19

140:15 155:14 168:19

177:10 231:11 240:13

241:3,7 243:4 271:8

dealer-contractor

78:21

dealers 55:14,15 72:18

103:4 105:13 106:1

108:14,16 205:4

268:20 279:20

dealers/contractors

178:1

dealing 44:11 50:3

62:13 101:2 112:18

113:13,15 115:18

116:21 120:9,17

121:2 127:7 128:3

154:2 193:3 221:11

243:13 247:12 248:7

255:4 273:16

dealt 110:6 231:9

decades 10:22

December 200:10

deceptive 182:8,19

decide 40:21 77:9

201:10 247:15 252:19

285:6

decided 21:14 201:22

225:7

decides 118:20

deciding 101:2

decision 37:7 165:14

216:14 251:16

decisions 258:5

declare 208:11 284:14

285:1

deeper 23:17

defect 142:6

defend 264:9,12

Defense 2:2,13

defer 44:22

deference 25:6

deferring 154:10

define 48:21 77:14

96:21 99:15 107:13

107:15 109:3,5,12

202:2 242:5

defined 56:11 110:5,16

110:19 138:3 177:9

215:5 236:19

defines 55:14 256:4

defining 36:7 41:4,6

59:4

definitely 8:18 66:18

definition 32:4 73:11

115:2 130:11 176:22

281:12

definitions 53:13

150:14 177:8,15

238:16

definitive 247:10 248:2

defrauding 218:1

DEGITZ 2:10 55:11

177:3

degree 267:15 271:19

deliberately 131:3

deliberation 23:19,20

Delighted 285:17

demographics 282:10

demonstrate 277:7

demonstrates 171:22

deny 136:17

denying 137:14

Department 1:1,18 2:3

2:11 34:5,15,17 39:2

45:22 50:3 55:9,9

67:7 83:9 89:18 90:4

101:9 103:22 109:1

112:14 118:16 123:11

128:2,10 134:4

149:12 165:19 170:16

177:13 179:3 194:21

207:21 220:10,11

221:20 223:6,8

240:18 241:20 252:5

284:20

Department's 60:10

62:8 97:19 104:22

109:11 120:12 165:13

165:21 177:7 180:10

181:13 185:20 213:19

depend 31:9

dependent 56:10 57:6

depending 7:6 9:1

217:12

depends 6:17 183:7

describe 89:15

described 88:15

description 7:2

descriptive 151:21

deserve 221:2,5

desire 241:2

destination 94:4

destroy 134:15

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giant 235:10

giants 80:16

GIBBONS 1:17 199:4

give 4:16 9:3 14:17 16:9

20:17 25:6,17 27:12

46:21 61:12 96:18

100:11 103:1 105:1

105:19 121:15 163:11

170:18,22 171:2,6,7

180:7,7 181:5 183:10

183:21 205:19 208:2

208:7,18 212:17

213:5 217:2 226:15

241:7,12 242:15

246:19 252:20 260:14

270:6 274:2 275:22

278:10 282:19

given 187:22 195:15

214:4 226:20 247:20

247:21 250:7

gives 33:14 161:12

195:6 245:13 248:5

giving 27:17 65:9 75:15

203:12,13 220:18

227:13 233:13 235:5

Global 1:15

go 4:15 5:1 12:21,22

17:21 23:5,9 30:16

41:22 44:5 50:14

56:11 57:4,18 62:18

63:15 76:11 79:21

80:9,12,13,18 81:5,12

82:16 83:19 84:19

86:13 89:22 90:13

122:13 128:5 129:13

131:19 132:5 135:15

136:8 139:8,21

141:16,17 142:7

148:13 155:15 156:12

163:22 167:13 169:9

176:18 179:15 184:4

204:6 206:4 208:21

210:17 213:11,20

219:9 220:2,12

229:12 230:3 243:18

247:16 248:5 255:10

264:20,21 274:18

275:9,17 279:12

283:3,14

goal 11:7,10

god 141:19 142:2

GOERING 1:18

goes 35:4 60:17 67:1

76:1,2 163:20 185:22

190:8 223:4 224:16

225:21 245:6 260:15

261:9 264:12 265:14

going 3:18 4:14,15 5:16

7:22 8:10 9:21 10:6

14:8,17,18,19 15:4,5

15:20 16:1 24:9 26:14

26:19 28:14 29:12

31:20 32:15 33:5,6

34:2 41:8 43:6 44:5,5

44:17,18 46:19 50:2,7

51:1,10,12,13,14 53:9

54:17 56:11 60:19

61:11 62:2,2 63:18

64:3,5 66:12 70:5,6

70:21 71:21 72:2 73:3

73:6,6,14,15 74:15

75:10 76:22 77:1,2

80:9 84:15,19 85:2

86:12,18 87:1,8,18,19

88:21,22 89:4,7,12

91:5,9 92:2,11,14,15

93:16 95:13 96:7

97:10,12 99:7 101:3,6

101:14 103:3 104:20

107:21 112:17 116:9

119:12 120:5 121:18

122:10 124:3,5,6,12

124:13 128:4,10

130:22 132:10,17

136:4 137:10 138:2

138:11 139:21 141:13

141:14,21 148:6,10

148:20 149:20 150:17

150:19 153:8 154:8

154:16,19 156:7,8

158:17 159:4 161:10

162:21 163:11 164:1

164:5 165:3 166:12

167:1,4 168:8 170:18

171:13 178:10 179:14

180:19,21 188:8

189:6,10,15 190:10

196:7 200:6 206:5,7

208:4 212:16 213:13

215:12 220:15 221:1

224:4,5,9 225:5,13,14

225:18,22 226:3

228:1,2,17,18 229:9

229:12,15,16,17,20

229:21 230:3 231:18

233:10,13,14 234:1

235:8,13,22 236:18

237:1,4,7 238:17

239:17,18 240:15

243:6,9,13,22 245:3

245:16 247:22 248:9

248:9,11,12 250:6,12

252:9,15,21 254:4,13

255:4,6 256:1,2,4,5

256:18,20 257:11

261:13 264:11 266:6

266:9,12,12,15,17,19
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280:8,11 283:2 285:8

good 3:8 10:9 11:6 16:8

19:14 20:9 27:1,22

28:3,7 29:5 35:13

71:2 78:2 83:20 84:7

93:21 101:18 106:20

117:20 123:13 132:16

136:6,20 137:1

141:16 142:3 144:1

151:20 152:2 156:5

157:2 160:14 161:6

169:19 171:9 193:22

199:5,6,12 209:1

231:7 233:7 242:14

250:18 252:18 260:1

271:1,21,21 272:2

282:1 283:11

Goodman 1:15 2:11

27:21 47:15,16 88:1

162:16 257:7

goodness 19:1

goods 137:15

gorilla 40:17

gotcha 135:12 139:3

gotten 48:13 76:5

114:22 157:14,17

187:20 198:10 234:14

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government 26:10 64:5

273:6

government's 169:11

grace 199:13 205:3

gradations 282:13

gradient 78:19

graduated 135:5

237:22 238:10 268:2

grapevine 285:9

grasp 54:13

gray 67:1 146:6 254:6

great 23:12 89:17

226:11 228:9 231:14

231:18 235:20

greater 233:14 236:8,9

greatly 23:7

ground 81:4 85:12

237:3 283:2

group 1:3 12:9 13:20

29:17 52:1,16 56:9

59:13 99:22 100:1

105:9 121:21 144:5

145:1 149:6 170:3,4,9

173:15 179:6 189:21

208:18 247:15 251:19

252:10 259:22 280:22

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171:16 184:2 228:4

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49:3,8 52:14 71:17,18

78:13 81:20 104:5

105:10,13 106:3

108:9 122:12 132:19

134:9,21 162:16

183:6 185:12 192:22

194:6,10 195:2

199:12 201:15 204:10

205:10 209:12 212:16

216:18,22 236:7

240:20 253:14,16

261:9 262:7,11

guessing 105:9

guidance 13:13 18:7

20:22 22:3 30:17 31:6

31:10,11 52:2 54:22

57:3 125:6 181:22

184:13 203:13,14

225:3

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200:17,18 201:21

202:2,5 203:8 225:4

guideline 11:2

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gut 102:16 166:21

242:13

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63:16 64:11 65:4

66:11,16 68:10 85:3

89:3 97:8,11 117:1,1

119:21,22 121:10

136:14,22 137:1,3,4,6

137:14,15 138:2

157:21 163:9 179:19

188:5 238:14 239:19

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275:20

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35:14 52:15 80:16

119:20 120:10 137:12

160:15 175:13 177:16

177:19 201:16 236:17

243:6 246:14 255:20

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habitual 238:19

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hammer 107:20 254:3

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184:2

hand 5:16 78:14 207:18

238:20 265:18

handful 27:15

handle 272:10,14

hands 188:3,19

hang 103:5 168:7

190:13

happen 8:12 25:12

52:17 64:6,8 70:6,21

93:2 97:16 132:9

141:18 232:13 235:9

263:18 269:5

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136:7 251:8 254:14

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228:17 253:9 275:1

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91:11 93:9 122:20

159:14,15 175:17

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121:17

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152:18 235:10,18

259:5 266:18

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232:17

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32:13 43:20 46:10

69:13 116:1 117:8

123:15 141:17 210:1

212:2 213:1 217:8

220:21 222:5 229:8

231:6

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harmless 127:8

Harris 169:22

Harvey 2:5 10:19,20

11:14 13:9 15:12

17:19 20:10 21:18

24:11 25:22 27:11

49:13 52:18,21 53:10

53:20 54:10,19 55:17

56:20 62:15 64:20

78:14,15 79:17 81:1

101:20,22 104:7

117:5 119:14 121:5

126:15 134:11 138:7

170:22 186:5 195:13

197:15 202:21 203:2

217:6 218:9 226:14

226:22 233:18 234:6

278:3 282:2

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he'll 34:13 183:9

head 75:13 94:14 118:5

131:18

headed 80:4 82:1

heading 191:7

heads 103:6

health 228:19 229:1

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75:11 90:22 91:7

95:10 98:2 103:10

121:13 148:21 195:16

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74:20,20 94:14 95:3

111:11 167:19 170:2

195:15 218:10 219:12

220:13 227:10 262:18

269:9 283:4

hearing 13:3,5 24:16

55:20 74:19 124:10

214:3 218:19 227:7

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heat 109:19 110:16

193:9,15,19 194:1,7

194:13,17,20 195:1,3

204:20,22 205:13,15

Heating 2:6,9 51:20

117:11 161:8

Heating/Air 199:9

heavily 244:1

heavy 217:7

heck 126:18

height 11:3

held 43:19 49:4 113:7

113:11 215:22 220:5

263:20

help 21:18 25:18 41:7

41:12 46:20 103:9

107:4,5 166:13

170:20 184:5 187:22

191:2 207:7,12 213:5

224:5,14 225:9 235:1

235:6 236:16,17

239:21 248:1 274:3

274:13,14

helped 235:4

helpful 12:16 13:15

21:9 32:5 81:2 104:8

113:4 182:2 190:3
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237:21 240:16 260:18

278:6

helping 274:8

helps 41:14 122:15,18

166:2 240:1 256:9,11

275:20

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74:13 85:16 86:12

89:16 95:11,16

103:21 116:8,12

121:17 124:16 154:12

156:21 157:15 158:22

188:13 239:19 240:9

240:13,22 252:13

269:17 279:4

hide 9:13

hiding 87:12 251:7

high 22:14 152:18

229:7

highlight 29:19

highly 224:7

hinge 124:5

hit 217:1

hits 132:6

Hobbs 79:18 88:3

hold 45:3 56:3 59:9

98:6 127:8 148:2

202:22 281:9,9

holds 188:5

hole 62:17

holy 163:21

home 91:4 92:14,22

93:16 279:13

homeowner 143:1

146:12 199:8 264:22

homeowners 21:9

176:5 225:10

homes 91:5,14 217:21

honest 266:10 277:20

277:21

honestly 50:18

honesty 210:2 213:18

hooked 266:2

hope 22:3 25:6 66:2

217:1 254:20

hopeful 233:12

hopefully 162:22

189:17 208:20

hoping 179:6

hotline 153:6

hours 25:15

house 155:11 157:5

162:22 240:1

houses 228:8

housing 91:20 92:5

97:12

Houston 80:13

hubs 74:22

HUD 92:8

human 244:9

hundred 40:22 63:2

80:10,12 112:20

hundreds 147:3 228:14

Hungerford 1:19 13:22

14:5 57:16,17 68:6,7

69:19 71:20 72:21

73:5,14 74:6,9 170:3

191:4,7,13,16,21

192:4,11 193:5

243:15 261:2,7,7

262:14 263:6 264:4

265:5,10,13 272:4,5

272:18,21 279:15

hunt 215:4

Hurst 1:20 9:6,6 17:11

17:15 48:14,14,20

60:3 72:6,8 73:3,13

73:18 75:22 103:7

110:1,15,22 114:2

118:12,15 141:3

155:2,2 157:11,21

158:10,17 160:7,8

162:4 163:11 168:6

168:16 186:16,20

187:2,6 205:1,6,13,16

209:2 214:21 216:8

217:7 218:20 221:9

221:16 222:1 237:17

237:18 238:7 244:11

245:22 246:6 248:19

254:15,16,21 255:10

268:1 271:8,12,19

HVAC 157:13 160:21

163:20

hypersensitive 269:1

hypothetical 88:14

94:13 183:11

I

idea 5:19 9:3 23:12

44:10 82:19 83:21

90:9 91:5 92:21 163:2

167:8 183:14 190:2

190:15 193:22 196:22

238:9 240:17 244:4

261:8 262:12 278:21

281:1 283:11

ideas 8:21 9:4 75:15

94:21 103:9 171:6

182:3 189:21 190:19

191:1 195:19 200:4

207:6 208:22 279:21

281:21

identical 61:5

identify 10:7 150:2

201:17

illegal 47:7,16 113:8

123:2,6 126:10

128:14 132:1 141:11

151:5 156:3 264:8

illegally 131:13 139:7

143:11 270:11

imagine 283:13

immediately 54:21

immunize 65:1

impact 11:11 30:17

50:20 56:6 204:12

impacts 193:14

implementation 5:8

228:5

implemented 236:22

imply 66:5

importance 67:6

important 15:11 24:5

31:15 58:9 83:13

109:2 125:3 129:15

164:12,13,18,22

165:1,21 166:7,9,12

230:17 236:6,20

250:20 260:5,11

270:21 271:4 283:21

importantly 144:13

importing 261:16

impose 208:4

imposed 25:15

impossible 132:9

improve 51:8

improves 100:7

inability 49:18

inappropriately 69:1

incapable 282:8

incentive 64:4 84:15

85:20 121:7 160:14

161:1,1,2,7 270:6

incentives 231:2

incentivize 121:14

inches 11:3

include 38:10 79:5

included 7:12 207:6

209:2 210:10,15

211:4

including 24:20 123:20

123:21 146:12 237:10

237:11

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incorrectly 68:22

increase 22:8

incredible 80:21

incumbent 76:17

Independence 1:10

independent 49:7

118:1 120:22 275:17

independently 102:4

indicate 273:2

indication 140:16,17

indicative 74:15

individual 103:15

112:15 125:20 147:15

181:12 244:18 252:16

272:14

individuals 273:15

indoor 92:12 94:1,6

industry 10:10 12:11

26:2,3,6,14 27:3

75:12 83:17 85:16

87:3 131:18 157:13

158:5 159:12 160:22

221:16 222:2,12

228:2 242:3 249:11

256:9 282:11,14

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269:17

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27:16,17,22 43:22

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74:18 75:6,11,21 83:7

106:9,11 107:17

121:15 127:3,4 130:8

131:5,12 135:20,21

138:6 140:3,4 143:10

143:20 144:6,18

145:4,5,14,17,20

146:10,14 148:10

163:14 168:21 169:2

177:7 180:21 181:16

190:16 194:7 220:19

228:6 230:22 233:2

242:15 249:10 252:21

257:12 280:6

informed 38:19 276:14

Ingersoll 1:15 23:15

28:21 35:12 37:1

38:14 53:11 82:15

initial 85:15

initially 61:7 97:5

199:20 251:17

initiate 168:18 210:22

223:3 240:8

initiated 212:7

injunction 221:6

innocent 137:12 264:15

input 57:7 190:19

260:21

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inside 12:14 240:18

insisting 54:18

inspector 164:21
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install 5:22 6:1 32:21

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93:16 97:13 127:22

264:19 267:18 271:3

installation 47:8,16

63:8 92:11 123:2,7

140:12 182:5,15

186:18,21 187:1

228:2,12 264:8 271:2

282:18,21

installations 132:1

139:13,18 141:11

180:4

installed 12:13 22:1

48:10 65:11 68:14

70:14 71:21 72:2 75:2

92:5,6,16,17,19,21

93:6,14,20 127:1,5

128:14 131:9,13

133:8 140:15 142:16

142:18 143:5,11

148:15 150:9 152:3

152:14 156:4 157:5

158:22 166:14 187:4

188:8,20 245:9 250:1

284:5

installer 177:10 243:4

261:9 262:22 263:2

270:17,17

installer's 56:5

installers 81:4 180:17

250:4,10

installing 53:16 77:22

109:17 111:16 113:8

117:12 154:7 175:14

178:12 182:15 212:20

217:20,21 250:3

261:20 262:20 263:2

263:21 270:10

installs 76:15 81:13

245:5

instance 222:7

instances 61:1 71:8

Institute 2:6,10

integrity 215:20

intended 21:11 172:3

205:22

intending 39:19

intent 14:12 54:16

174:12 193:13 261:8

262:12 264:2 268:8

268:11 269:6 276:7

intention 150:18

intentional 260:8

interest 151:13 211:20

212:17

interested 164:10 169:5

169:14 252:10,10

284:8

interesting 94:13

241:21

interests 281:4

interject 165:11

internal 138:20 254:7

internally 109:1

International 1:20

internet 53:3,7 158:7

interpret 11:12 112:3

interpretation 57:3

111:4 229:19 236:21

intuition 102:16 242:13

intuitively 150:9

invalid 173:16

inventive 231:20

inventory 22:20

inverse 159:21

inversely 11:16

invested 70:1

investigate 50:9 66:5

128:2 154:15 159:13

207:13 239:15 244:19

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100:22 129:19 139:6

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35:6,10 39:1 44:5,15

45:2,6 46:22 84:13,20

85:21,22 108:3,4

116:7 137:5,9 154:21

156:20 168:13,19

240:20 251:2,3

254:17 269:22 275:16

investigations 159:8

investigative 213:6

investigative-type

168:11

investigator 275:12

investigators 66:9 87:3

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Investor 1:16

invoke 134:18

invoked 55:10

involved 140:18 225:11

230:7 250:10 253:3

261:21

involves 27:10

IOUs 10:3 164:3

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irrespective 200:13

island 79:1 170:11

issue 9:5 14:20 17:22

18:7 20:22 25:10

26:18 30:12 31:7,16

31:19 38:17 69:7

73:22 79:9 82:17 83:6

84:7 90:13 92:8,10

93:3 95:22 99:1

177:20 179:7 181:17

185:17 201:7 209:13

209:15,16 212:22

223:16 228:19 229:1

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249:12

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item 4:2 75:9 112:12

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J.R 79:18

January 14:14 143:13

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JC 141:6

Jeff 173:14

jerk 262:19

job 25:18 27:7 66:16,17

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95:20 138:16 156:10

167:4 248:4

jobs 80:18 81:18 139:7

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Joe's 51:19

John 1:17,20 9:6 48:14

60:6 73:20 74:19

103:7 110:1 111:8

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186:15,16,20 187:2,6

199:4 209:5 218:10

221:14 237:18 249:10

254:16 281:6

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Jon 1:21 25:22 32:1,12

35:11 42:20 43:20

46:10 69:12 74:21

96:18 105:16 115:22

116:21 117:1,3,5,6,7

117:8 118:19 119:2,3

119:5,6,9,10,11,20,22

120:9 121:10,11

123:9,14 136:13,21

137:4 167:19 179:19

187:19 209:22 213:1

214:19,22 217:8

218:10 220:14,21

222:5 227:12 230:2

231:6 255:3

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116:16,22 117:1

118:20,22 125:20

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Jordan 1:15 23:14

28:20 35:11 36:22

38:13 43:5 53:10 58:4

82:14 114:13 120:3

125:1 128:15 140:13

143:21 145:18 149:19

150:15 151:2 152:16

159:3 179:9 194:5,12

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233:17 236:2 237:6

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judgment 230:8,15

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judicious 167:21

July 143:15 203:18,19

jump 233:18

justice 220:11 221:6,13

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K

Karen 2:2 14:7 15:14

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114:19,20 115:4,7,17

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135:14,18 137:3

138:10 139:11 142:4

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18:19 20:10 138:7

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51:14 58:9 84:18 85:3

86:2 87:20 117:3

119:18 121:1 183:22

186:9,10 188:11

207:17 225:22 235:12

271:1,4,6 277:5

keeping 23:4 34:22

35:9 169:21 207:10

219:13 221:17 228:22

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79:10
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kept 29:13 54:20 84:3

185:18 208:5

key 119:15

keys 238:3,6

kick 210:19 237:8 239:1

241:18

kicked 26:4

kicking 236:14

kid 278:11

kidding 176:7

kind 11:11 12:5 21:3,7

24:14 26:9 32:16

34:21 41:7 43:2 52:1

60:21 61:1,19 64:8,14

76:9,10,11 77:10,20

81:17 82:19 83:21

84:4,16 85:12,18 97:4

98:11 103:1,17 107:2

122:13 132:13 135:17

136:11 148:17 182:12

190:11 196:18 200:22

212:22 214:17 216:20

218:5 225:17 226:16

227:6 229:6 230:22

235:9,17 237:22

238:14,16,20 239:1,6

239:21 240:1,7

241:12,17 248:15

250:14,19 251:8,10

256:12 257:15 259:16

260:9 266:21 270:5

275:1 278:15,17

279:2 281:19,21

kinds 107:4 119:18

229:1 247:17 263:13

263:13

knee 262:19

knew 84:2 114:7 116:9

know 3:16 6:16 9:9,15

10:3 14:12,18,20

18:17 20:16 21:12,13

21:14,15 23:16 26:13

27:8,15 28:1 31:2,4

33:1,3,4,6,11,13

34:12 35:1,5,8 36:9

37:9,10,10,13 38:17

40:11,19,20 42:5,10

43:4,6,11,11,16,22

44:7,17,18 45:13,15

45:19 46:12,15,17,22

47:18 48:17 49:8,12

50:19,20 51:7,9,10,11

51:13,16,21 52:18

53:8 58:13 59:10,11

61:3,15 62:6 63:17

64:15 66:10,14,19,21

67:18,21 68:2 69:14

70:10 71:20 72:13

75:14,15 76:5,9,10,11

76:22 77:4,4,10,12,20

78:1,3,13 79:16 80:6

80:10,11,13,20 83:1

83:11,17 84:2,17 85:8

86:10,15 87:4,14

88:14,14,20,20 90:1

91:7,8,20 93:9 95:17

97:1,10 104:3 105:2

105:22 107:17 111:12

111:15 112:21 113:16

116:8 117:13,14

118:2,17 119:2,10,13

122:11 124:3,6,13,19

125:20 126:15,17,22

127:1,6,6,15,18 128:3

128:11,17 130:18

131:20 132:10,15,16

132:17 133:2,2,4,5

134:9 135:13 136:6

136:12,13 137:3,13

137:16,17 139:4

140:1 143:6,8 144:21

145:2,7,7 146:6,21

147:6 148:4,5 149:6

150:1,4,5,8 151:15

152:13,19 153:16

154:19 155:7,13,15

157:12 158:1,4,18

159:9,16 160:6,8,12

160:18 162:7,8,8,12

163:9,17,22 168:7

170:9,21 178:9,11

182:21 184:4,6 188:5

188:7,13,13 190:22

192:20 193:12 196:15

197:5,7,16,19 199:13

199:17,21 201:1,5,9

201:13,18 202:2,21

203:4 209:14 210:17

211:10,10 212:22

213:2,4,7,9 214:4,12

215:3,13 216:22

218:6 220:21,22

221:1,2,3,5,14 222:20

222:21 224:2,4,4,12

224:21 225:16,20

226:1,4 229:17,18

230:6 231:13,22

233:18 235:20 236:1

236:17 237:16,21

238:3,15 239:19

240:11,14,22 243:4

243:12 245:2,4,19

247:2,11 250:3,7,16

251:15 253:5 256:3

256:18,20 257:9,12

257:17,18,20 258:1,2

259:3 260:4,6,12

262:4 264:6,9,20

265:1,1,20 268:3,11

268:20,21 269:2

271:5 272:4,12,19

273:19 274:6,17

276:6,14,17,18 277:5

277:14 279:12 284:4

knowing 36:13 61:22

82:4 95:12 117:15

130:11 154:2 264:7

knowingly 32:19 33:15

39:20 50:21 54:3 57:2

79:6,14 116:3,17

125:7 132:22 150:17

212:20 217:19 223:17

264:10

knowledge 32:20 33:17

33:20,22 35:2 50:21

57:22 58:3 65:10,14

65:18,20,22 66:1 67:3

70:13 75:8 77:19

82:17 84:6 91:8 115:4

120:5,14,15,22 122:2

122:5 125:5,6,14

126:3,13,17,20 129:1

129:4 130:7,14

139:16 144:4,4,9

152:8,10,13 224:22

225:10 265:7,8

known 65:13 82:4

88:18 140:6 141:9

268:17

knows 121:9 272:3

277:2

KROWKA 2:11

L

LA 72:14

label 4:5,19 5:20 7:21

7:22 8:3,5,7,11,17 9:1

9:10,11 10:21 11:10

12:3,4,11,13 13:7,8

14:10 15:19 17:22

18:4,9,13 19:18,18

20:15 21:10,16 22:2

23:7,10,10 29:17,20

29:22 30:5,6,10,18

31:1,3 164:22 166:12

171:14 172:3 175:4,7

175:10,10,11 176:2,3

197:4,8 200:6,7,9,11

200:12,17,19,19

201:11,21,22 202:1,2

202:5,9 203:8,11

225:4,5 232:12,21,21

233:1,2,3 234:2

268:14,15,15

labeler 149:22

labeling 203:1

labels 18:3,6 22:9,20

23:3,7,11,19 29:7,10

176:1

Labor 63:7

lack 10:5 238:18 283:8

laid 34:21 132:14

language 10:11 12:3,20

15:13,22 16:6 41:2

51:3,21 52:4 53:4,21

54:13,16,20 56:2,14

59:4 61:5 187:18

197:2,18 204:5 206:8

206:10 207:4,14

210:10 259:15

large 68:16 69:10 70:1

101:14 192:17 273:3

273:10

large-scale 70:18

largely 101:14

larger 14:19 52:22

largest 67:12 79:19

Las 69:16

late 59:20

laughing 90:7

Laughter 11:17 16:11

17:12 21:19 55:22

59:1,16 60:4 62:19

80:14 89:20 90:5

106:4 108:21 118:14

119:8 133:22 157:18

158:13 170:13 175:5

196:2,5 206:19 216:7

221:18 271:16 284:6

launch 154:20

Laura 2:10 173:2

174:15,16 177:2

178:6 189:5

law 33:12 51:7 53:18

77:7,8 116:4 133:10

143:7 156:3,4 162:6

225:1 226:8 238:20

law-abiding 199:7

lawfully 126:16

lawsuit 211:22 212:7

215:12

lawyer 183:7

lawyerly 183:8

lay 259:14

layer 221:13

layers 249:17

lead 174:11 191:14

256:2

leading 107:18

leads 264:1

leaning 231:3

learned 142:9 241:21
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

300

leave 13:13 153:18

165:5

leaves 187:15 188:2,10

188:19

leaving 98:22 202:14

213:3

leeway 14:17

left 32:4 237:11 278:15

legal 47:22 49:22 54:5

92:5,7 93:3 180:3,11

181:14 202:3 210:18

225:1,10 226:7

legally 22:1 91:16

131:10

legible 174:8,12

legitimate 29:9 70:21

71:3,5,6 117:14

135:14 136:3 137:18

265:17 267:3

length 84:12 178:3

185:18 269:10

Lennox 1:20 9:7 48:15

155:3 160:8 237:18

254:16

lessen 98:5

let's 3:14 4:1 17:21 35:8

50:14 55:20 61:21

63:1 90:2 129:11

133:4 163:17 176:10

176:16 214:15 245:4

245:11 274:18,19

276:8 277:13

letter 91:8

letting 139:1

level 71:9 85:18 109:15

134:16 147:15 182:7

182:19 236:9 253:4

253:11 271:15 273:2

273:3

levels 233:20

leverage 100:12

liability 115:11 255:16

liable 38:3,4 46:6 113:7

215:22 217:22

liberally 170:19

lie 88:21,22

life 234:18 265:19

268:17 272:16

light 222:3 279:6

likelihood 242:4

limit 108:8 243:17,18

limitations 185:21

limited 48:5,7,11 65:17

110:22 120:5 134:14

216:10

limiting 70:10

Lincoln 1:16

line 15:5 52:3 66:18

105:16 140:10 141:8

175:14 229:19 233:22

268:21

line-type 8:11

linear 75:1

lines 16:21 44:9 171:12

link 190:6

linkage 104:8

list 4:2 16:13 32:18

40:20 56:4,5 124:19

124:21 176:18 177:2

179:19,20 183:18

185:4,9 227:9 232:5

241:8 249:12 254:7

259:20 260:15

listed 52:8

listen 219:17

listening 11:20 219:15

282:6

litigate 105:18

litigation 220:16

little 3:11 14:17,21

18:20 19:8 24:12

34:13 44:22 47:19

96:5,10 97:21 98:7

112:22 125:11 132:20

162:16 167:4 180:9

195:6 216:8 221:10

225:17 235:18 246:4

247:21 248:2 260:21

261:3,8 268:22 272:6

272:8 275:20 283:8

284:17

live 55:10 198:10

203:16 204:11 212:16

215:19 283:3

living 192:14 206:12

loading 266:11

loads 262:2

located 5:21 69:16 70:9

location 8:7 9:14 93:12

94:8 156:10 159:1

175:12 224:10

logical 75:17 115:14

long 63:15 84:1 134:18

137:5,10 208:1

273:20,21 282:4

longer 47:11,17 104:2

112:1 143:6 223:6,7,7

longtime 136:4

look 6:11 16:1 38:16

42:6 49:21 51:22

60:22 81:16 94:12,15

100:1 107:12 112:18

119:15 130:10 140:21

155:15,18 170:21

171:2,3,4,6 173:10

174:4 176:19 177:17

180:8,14 181:17

184:3,5 190:22 197:5

198:5 200:9,12

201:20,22 203:13

204:7 207:5 208:6,22

237:17,18 245:11,14

250:14,15 252:13

264:6 266:2 272:18

275:12,17

looked 266:3

looking 5:9 52:2 60:8

60:16 61:8 85:17

104:6,8 135:2 155:7

155:21,22 156:2

157:16 177:1,4

197:11,12 218:15

224:13 229:14 241:1

243:11 244:22 245:1

249:4 251:15,17

254:9 255:20 266:6

269:17 276:12

looks 47:13 125:21

206:17 269:8

loon 162:8

loose 22:11 232:18

252:20

lose 58:13 123:12 142:2

142:3 215:21

losing 160:1 218:12

loss 112:9

lost 69:9 216:6

lot 6:19 9:15 57:14

65:21 68:19 70:1,2

75:11 83:3 93:3

102:15 131:20 134:19

158:4,6,20 166:1

167:1 168:1 184:6

198:3 205:4 218:4

231:1,2,15 232:2

248:9,14 255:14

267:18,22 273:10

274:8,11,22 275:2

lots 175:18 228:8

Louisville 66:12 266:12

love 230:13

low 63:9

lower 240:7 243:19

lunch 169:19 171:3

176:10,12

lunchtime 189:22

luxury 6:19 8:12,16

M

magnitude 112:18

113:1

mailbox 169:1

mailing 148:9

maintain 49:11 218:22

major 10:4,4 68:15 69:3

majority 80:8 159:10

making 30:4 35:1 39:17

52:17 66:2,8 84:18

85:8 101:8 106:17,17

118:3 126:13 166:20

189:12 215:18 225:20

229:3 231:22 249:18

267:11 270:12 272:15

283:7

manage 80:19

managed 59:21

mandates 152:19

manner 84:2

manning 50:6

manufacture 194:8

201:7 204:14

manufactured 143:5

200:14 204:14

manufacturer 5:6 6:7

6:18 7:19 8:1 22:9

27:18 38:2 41:1 43:5

44:7 47:10 49:4,10

54:2 61:6,13,15 62:13

64:2,16,17 70:22 85:1

85:13 95:15 96:8

101:1,10 104:3 120:8

120:11,16 124:3

126:9 131:4 137:21

139:15,22 140:2,6

141:9 142:19 145:8

156:22 160:5 167:14

171:14 181:10,12

186:2,17 197:4

203:11 215:10 216:15

217:14 221:10 240:12

242:17 251:10 254:18

255:16 257:1 263:17

263:19 265:12

manufacturer's 22:13

60:11 167:13 243:1

247:10

manufacturer-prohib...

96:3

manufacturers 4:13

6:22 7:3,11,16 8:9,15

10:6,13,15 11:12 12:2

12:10 13:6,18 16:13

16:17,22 17:9 18:9

21:14 22:18,21 23:13

24:17 27:12,15,16

30:8 36:8,12 38:9

39:4 43:11,18 44:3,18

45:9 98:6 103:8

107:21 111:9 112:19

121:14 124:13 142:4

148:3 159:8 160:3

165:14 167:15 173:13
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

301

175:11,16,19 197:10

197:19 202:12,15

207:7,7,9 214:12

223:18,19 225:2

228:4 229:9 230:20

231:8 232:10,22

233:1 234:1 242:18

254:2 255:11,19

264:16 273:10,11

281:3 284:13

manufacturing 2:2,11

5:3 15:1,7 142:6

181:8 273:9

map 20:8 21:8 204:11

maps 135:8

market 44:12,14 53:8

103:14 112:13 119:6

123:9,12 241:15

262:9

marketplace 131:17

massive 72:19 73:1

131:17

massively 238:18

match 20:16 276:9,10

match-ups 22:13

matched 19:21

matches 174:1

materials 228:6 233:3

matter 26:17,18 74:4

85:17 102:12 117:5

119:9 129:9 148:17

149:2 165:3 201:17

221:21 250:10 257:3

275:18

McCRUDDEN 1:20

41:20 42:19 43:9 48:2

48:19 50:4,13 71:12

71:17 72:4 106:2,5

107:9 109:13 110:7

110:12 114:17 115:3

115:9,15,21 124:7,14

130:20 144:17 146:3

146:11 151:8 152:22

188:16,22 204:8,21

205:5,10,14,21 206:3

206:6,15 223:13

232:9 245:8 249:1,7

249:19 253:13,21

254:12 255:5 258:7

258:13,18,21 259:10

264:5 269:12 270:3

275:2 276:5 280:3,18

283:4

McDonald's 162:9

mean 12:1 33:16,18

38:20 39:7,8 40:14

43:11,14 47:10,22

48:7,12 50:19 51:2,11

52:8 58:5 69:5 71:14

71:21 75:14 80:11

83:18 87:13 89:21

93:5 96:1 99:14

102:15 107:6,7 111:1

111:7,8 112:17

113:18 114:4 115:13

123:19,22 124:4,16

128:9,16 132:3,5

134:1 136:2 138:3

140:16 141:1 143:22

144:5 149:20 153:2

159:4,19 164:7 165:4

168:17 189:8 192:17

193:5,12 194:6,7

196:12,20 200:8

201:5,20 206:11

222:11 223:1 232:12

233:6 234:8 242:12

248:3 255:5 266:4

272:18 274:5 276:2

276:20 277:2 281:2

means 39:4 40:16,18

47:17 109:16 129:3

192:18 224:14

meant 170:20 206:4

207:14 275:14

measure 250:19

mechanism 86:18

89:11

mechanisms 144:3

282:21

meet 99:17 143:8 191:9

204:15,17 270:5

280:20

meeting 1:5,10,11,13

16:9 32:3 103:10

110:3 151:11 153:7

160:4 170:1 183:5

186:5 210:5 213:3

285:21

meetings 4:1,6,15 18:8

153:8 176:20 196:8

229:13 231:11 237:12

278:4

MEG 2:13

Melchi 1:21 25:22 26:11

32:1,8,11,12 34:10

35:19,21 36:3,16,21

37:5,9 38:6 43:20

44:20 45:4,14 46:9

47:13,20 50:11,17

52:7,14 54:19 56:1

58:21 62:17 67:8

69:12,12,20 71:7

115:22 116:11 117:8

117:17 123:14,14,21

187:13 188:4,9

204:19 209:19,22

212:13 213:1 217:6,8

219:1,11 220:20

221:21 222:5 226:9

231:6 232:7 270:8

281:2

member 67:10

members 33:3,13 34:3

34:11,14,22 35:5

37:11,12 50:18,20

52:2 61:8 70:17,20

141:17 187:14 211:6

211:9 213:7 217:18

218:5 230:8 231:13

membership 210:13

213:11 222:10

men/counter 63:3

mention 200:7 269:10

mentioned 46:11,12

153:3 179:3 199:19

200:6 257:13

merely 105:7 143:4

167:10

message 196:18

199:21 200:3 201:9

201:10 229:10

met 1:10 32:11,13

134:3 158:3

metal 175:15

method 267:3

metric 203:22

metro 285:8

metropolitan 78:22

79:2 80:9

Meyers 2:2 14:7 16:4

16:16 17:2,6,13,17

21:3,4,21 47:4,14,22

49:3 72:5,7 91:21

113:2,20 114:4

117:18 118:7 121:12

122:1 126:5,8 127:13

128:4,8,22 129:20

130:15 131:15 132:5

133:14 134:1 141:21

203:15,18 219:2,6

224:16 226:10

mic 214:14 234:16

microphones 3:11 19:7

19:11

mics 3:5

middle 149:17 174:19

204:10 237:11

miles 80:10,12,13

million 26:20 122:9

mind 58:9 100:14

115:20 129:10 169:13

184:7 202:4

minds 211:16

minimal 10:11 50:20

minimum 7:14 10:22

19:20 21:5,16 22:2

29:14 168:12

minute 59:20 136:19

137:11 209:20

minutes 90:14

mislabeled 267:8

misleading 182:14

missing 40:2

Mississippi 61:12

63:19 79:7,12 97:13

179:15

mistake 238:13,13

267:3 268:12 277:20

277:21

mistakes 29:10,13 69:5

260:8 267:9 268:13

269:4,8

misunderstood 247:1

mitigate 260:4

mock-up 29:22 190:12

mode 266:7

model 22:14,15 23:5

173:10,16 175:17

models 23:2,20

modifications 31:12

modify 6:20

modulars 91:19

module 277:14

modus 243:1 250:11

moment 214:5

monetary 105:3

money 70:2 78:6 101:4

101:9,17 103:3

149:13 184:20,21

185:2 243:10 267:22

274:7 285:1

month 138:12

months 138:13 205:8

210:7 211:21 213:15

250:1 259:4

moot 57:22 212:22

morning 3:4,17 59:15

178:3 179:3 224:17

259:16

morning's 134:13

motivation 151:7

MOU 182:12 218:7

move 51:2 55:20 93:1

189:9 191:2 212:9

moved 91:16 92:7

93:15 127:21

moving 69:10 235:11

236:3

MUCCIOLA 2:14 90:22

91:2,18 92:1 93:13,17

94:9
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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multi-family 79:20

multifamily 91:20 139:7

217:21

multiple 108:15,15

114:6

multiplied 23:7

N

name 163:12 168:4

203:11 241:8 245:10

265:20

nameplate 9:12,17,22

9:22 12:21 14:9,13

15:6,15 16:2

names 154:9

naming 259:19

narrow 90:12 235:12

narrowed 235:17

national 2:7,14 193:15

nationals 81:6

Natural 2:2,13

Navigant 2:10

near 5:21 9:22 15:15

16:2 76:2

necessarily 25:12

37:12 87:15 117:10

152:8 198:11 201:21

225:13 237:14 247:19

necessary 251:9 275:1

need 17:15 20:12 27:2

28:14 30:9,12,19,19

34:16 35:9 36:8 40:11

45:20 48:21 51:9 59:5

60:21 86:13 103:5

128:3 134:22 149:1

150:12 152:20 189:15

198:7 203:10 208:3,8

213:22 214:1 219:9

222:21 225:16 234:18

237:14,16 248:14

270:6 274:2,13,14

279:12,15

needed 11:15 37:12

46:21 165:8 210:20

needn't 152:13

needs 3:22 9:13,20

28:18 29:18 30:20

70:14 99:18 109:2

133:15 146:13 182:22

210:17 218:8

negative 94:19 98:18

99:8

negatively 95:1

negotiated 25:7 28:16

negotiation 214:22

neighborhood 263:9

neighbors 157:14,19

Neil 1:11,13 8:7 16:16

17:19 24:11 26:7 40:3

49:3 56:1 58:17

106:12 127:13 142:20

239:5

Neil's 26:1 109:3

122:15

neither 54:14

nervous 221:11

net 222:18 244:1

Nevada 68:21 69:3

never 43:10,11 64:5

158:3 164:22 185:5

232:13 264:22 266:3

275:21

new 93:2 107:2 158:4

233:9 283:14

nibbling 49:16

nice 171:8 175:9 201:18

Nichols 173:15

night 3:17 191:19

nine 23:11

Noll 2:2 12:19 13:4

16:20 17:7 20:8,11

30:15 31:8,11,14

56:16 57:12,20 86:4

87:16 89:1,5,7 96:1,5

96:16 98:15 158:11

171:11,21 172:6,8

219:18

non-penalty 211:4

noncompliance 85:7

108:11 135:5 158:21

159:22 164:18 187:5

noncompliant 47:21

48:6,9 85:10 86:2

139:13,18 152:15

154:7 156:2 159:1

163:7 164:1 180:17

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184:11 185:19 186:19

186:22 187:3,7,17

188:7,10,21 189:5

190:1 191:6,12,15,18

192:3,6,13 193:7,11

193:17,20 194:4,12

194:22 195:8,11,18

196:1,3,7 197:3 198:1

198:13,15,17,22

199:19 200:15 201:8

202:4,16,19,21 203:9

203:17,20 204:4

205:20 206:1,4,11,16

207:2 209:4,9,14,21

213:17 214:15 220:1

221:19 223:1 239:3

242:9,12 244:8,21

246:2 248:3 249:6,16

249:20 253:20 254:11

254:20 255:2 258:12

258:16,20,22 259:13

262:13 265:3,6,11,15

267:20 269:9 270:1,4

270:15 271:11,14,18

272:17,20 273:1

275:5,21 278:2,14

279:17 280:15,19

281:5,9,17 284:11

285:13,18

Ray 1:16 210:8

reach 235:21

reached 25:2 200:10

251:16

react 246:20

reaction 54:18 262:19

reactions 239:13

read 10:1 11:10 33:12

42:15 142:14

readability 7:15 11:6

readable 6:14 7:9 11:2

reading 9:12

reads 204:3

ready 57:7,18 282:8

real 6:19 8:16 9:16

91:12 95:22 98:8

167:11 172:21 174:14

282:14

realistic 139:4

reality 102:18

realize 24:5 195:14

realized 143:7

really 10:6 17:4 18:21

21:10,21 32:15 51:13

59:19 60:14 66:13

69:6 88:20 95:14

96:21 98:8 109:2

116:14 132:16 134:22

136:22 144:1 148:12

149:17 155:9 165:21

166:9 179:6 187:21

191:2 194:2 196:19

201:9 207:21 211:18

213:21,21 222:16

235:8 237:16 238:17

242:13 248:16 252:14

262:18 266:18,20

278:18 279:18,22

realm 88:16

reappear 285:7

reason 8:2 66:19,20

81:13 83:13 86:14

99:5 185:11 186:9

210:14 211:7

reasonable 9:7,8 44:10

74:11 76:12 130:11

156:18 274:1

reasonably 9:11 151:21

reasons 28:15 58:7

137:17 162:11 242:20

274:22 279:19 282:17

recall 11:1

recast 218:18

receipt 231:21

receive 46:14 268:14

received 181:4

receiving 22:4 43:21

89:3

receptive 84:10 190:20

recess 176:12

recognizable 9:14

recognize 58:6 88:5

107:2 119:4 234:21

recognized 118:22

recognizes 118:17

recognizing 57:1

recollection 53:15

recommend 197:2

recommending 195:2

record 3:14 32:6 36:11

42:1,6,11 45:12 90:16

90:17 96:14 129:9

132:4 147:16 169:21

176:12,13 186:13

187:18 188:12 207:1

207:4 209:11 210:18

210:18 219:13,19

221:22 222:17 225:22

228:22 270:22 273:5

276:18,20 280:21

285:15

record-keeping 38:11

39:20

recorded 244:6

recording 147:20

records 34:5,11,14,18

34:20 35:2,8,17 36:14

36:17 37:3,13,15 38:5

38:22 39:16,18 41:19

42:12 44:3,8 46:18,20

47:2 49:6,11 81:16

84:16 104:11,14,16

105:1,5 119:18

156:17,19 161:10

167:14 185:18 186:10

207:10,22 213:4

218:22 221:5 226:10

241:7 244:12,14,14

245:1,1,13,13 251:4,5

251:10 254:10 274:19

275:12 277:5

recourse 86:11 124:18

rectify 12:17

redistribute 80:18

redistributed 72:16

reduction 24:9 25:5

28:19

redundancy 55:5,9

redundant 193:22

refer 195:1

reference 195:3 204:20

204:22 236:12

references 194:18

referencing 193:18

referrals 182:18

referred 194:14

referring 171:18

reflect 30:1

reflecting 98:9

reformatting 14:11

Refrigeration 2:6,10

refused 45:11

regard 62:10 152:12

230:17

regarding 44:8 60:19

60:20

regardless 79:7,13

122:20

regime 74:17 103:21

region 68:17 69:11,17

69:17,18 74:10

109:17 111:17 182:6

192:2 204:13 205:7

227:4

regional 1:3 28:2,9

32:22 78:18 110:9

193:13,14 194:3

219:4

regions 69:22 70:3

78:18

register 141:22 142:9

142:22

registered 126:11

128:12 133:3

registering 141:14

regular 76:20 231:12

243:13 244:2

regularly 250:6

regulate 146:20 274:6

regulated 211:18

273:12

regulation 25:15 52:5

71:9 178:19 263:3

273:19

regulations 78:10

152:5

regulatory 7:13 26:2,6

174:1 202:10

reincorporation 284:18

reinforced 248:17

reinforcing 54:15 183:2

related 142:5

relates 33:9 135:1

relating 191:10

relationship 224:7

relationship-based

76:7

relatives 157:15,20

relied 144:7,20,22

rely 25:17 148:7

remains 104:10

remedial 184:13

remediate 253:18

269:16

remediation 181:22

182:9 272:1

remedy 265:1

remember 45:21 54:7

232:20

remembering 11:9

reminded 282:12

remove 29:21

Reno 68:19 72:1

repair 156:12

repeat 16:16

repercussions 89:7

replace 180:17

replaced 185:7

replacement 48:12

replacing 139:9 184:22

report 4:5 16:15 82:20
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84:1,1 150:21 151:16

153:22 154:1 160:4

164:18

reported 166:5

reporter 3:13 14:3,6

19:6,12 261:5

reporting 148:7 219:14

reports 57:6 162:8

represent 234:21 235:1

279:13

represented 30:3

reprimanded 196:10

reputation 60:20

reputed 97:8 178:11

request 27:11 34:6 35:1

37:14 42:12 43:7,12

44:8,16 46:15 106:8

106:11 227:11

requested 220:19

requests 49:8

require 31:11 57:3 79:4

180:3,12,16 181:3

182:9 232:20

required 11:13 25:14

87:11 123:6 207:15

233:1

requirement 39:16

117:21 120:14 127:11

160:4 195:9 207:21

208:5 247:1 265:7

requirements 5:7 38:11

44:2 53:19 133:16

134:4 225:1,11 226:8

275:9

requires 109:18 111:17

256:17

requiring 123:17

research 141:3 158:7

180:13,15

Reserving 249:2

resident 146:13

residential 110:17

resolutions 55:4

resolve 28:11 29:18

30:9 136:9 181:7

279:8,9

resolved 114:15 271:18

resonate 229:22

resources 2:2,13

167:22 169:11 272:11

272:19

respect 10:16 41:14

respond 100:18 150:15

274:3

responding 129:17

response 13:16,20

24:14 34:9,10 101:13

104:5 112:11 185:16

189:2,19 206:21

215:16 278:9,13

responses 104:21

114:6

responsibility 101:17

135:17,19 142:21,22

146:7,9

responsible 43:19 49:5

59:10 62:13 100:16

101:15,18 113:12

118:3 123:4 129:22

146:15 148:3 263:20

rest 280:20 285:16

result 29:2 41:17

103:15 160:1 204:2

227:20

retailers 54:8

retain 49:5 67:5 156:19

207:15 244:12

retaining 156:17

retention 36:11 42:1,6

42:11 45:12 96:15

147:16 186:14 187:18

188:12 207:1,4

219:19 222:17 226:10

271:1 280:22 285:15

rethink 258:14

review 189:21

revise 30:18

revisit 56:5

revolve 65:9

rewarding 83:20

Rheem 2:2 14:8 21:4

47:5,15,17 113:3

Rhode 79:1

right 3:3 12:22 13:2

16:8 18:2 19:12 21:5

21:22 28:4 31:8 32:18

35:18 37:4 39:22

42:19 43:9 45:5 48:19

50:13 54:9 55:6 63:4

63:15,22 64:6,21

65:12,15,21 66:6,22

67:12,13 68:4 69:19

73:13,16 76:19 77:3

77:15,19 78:5,11

79:17 81:7,19 82:12

84:2,8 87:7,9,10

88:22 89:10 90:3 92:9

92:13 94:16 96:4,12

96:16 99:10 100:5,20

102:9,16 104:13

107:9 108:17 109:14

110:18,18 111:10

113:10 114:10,16

115:7,9,15 116:10

119:14,16 120:2

121:8,12 125:16,18

132:6,21 133:13

136:18 138:2 144:4

149:15 151:6 156:13

160:11 161:2,9 163:1

166:18 167:2 168:2

169:8,18 172:10,22

174:18 177:21 178:2

179:2 185:19 186:19

188:7,21 190:1

191:17 192:13 194:22

196:1,20 200:13,15

201:4,6,8 202:4,20

204:3 205:10 206:22

209:12,16 213:17

220:1 223:2 234:5,8

234:10 237:9,11,13

238:9 243:9 244:8

246:5,6,22 249:2,6,16

249:19 251:18 253:6

257:16 265:10,15,20

267:21 269:19 270:3

271:11 272:17,20

275:15,16 278:10

280:3 281:17,22

285:19

rigid 248:8

rise 183:9

risk 64:10,16 100:15

105:18 148:20 218:12

river 51:15 68:15 69:6

road 132:6 135:8

236:15 237:9

robust 103:21 278:21

Rocky 2:4 4:20,21 7:4,7

7:11 8:6 22:5,5 92:2

93:21 117:4 141:5

142:2,20 143:12,15

171:18 172:1,4,7,9,18

173:14,18 174:11,22

175:8 193:8,12,18,21

194:16 195:6,9 196:6

202:7,17,20 221:14

262:17 263:16

Rocky's 111:13

rogue 160:17

role 182:5 183:1 213:5

283:21

room 3:6 6:4 8:14 12:21

26:19 157:13 175:18

210:8 213:22 218:19

231:9 279:3

rooms 206:12

rough 260:14

roughly 11:5 174:17

round 27:12

route 134:22 139:21

routine 37:4 39:3 40:10

40:15,18 41:1,5,9

51:20 79:4 83:12

95:17 103:13,22

107:13,14,15,22

109:8,9,16 111:15,21

115:4 138:19 140:20

183:16 185:8 236:6

236:13 237:19 238:19

239:3,8,17,22 240:5

242:5 245:18,21

250:9,13 255:6 256:5

258:10 259:8 278:14

278:20 280:8 281:12

283:17

routinely 39:20 42:14

61:4 77:11 113:13

116:17 120:17 132:21

132:22 133:11 259:1

roving 81:4

ROY 2:11

rubber 132:6

rubric 109:11,20

rudely 134:12

ruining 272:16

rule 12:1 26:4,21 54:21

56:14 59:14 81:14

123:11 132:15 133:15

154:2 168:11 204:6

234:4,8 260:13

rule-making 212:8,9

rulemaking 24:10 25:3

25:5,7 28:1,16 189:4

rules 56:15 132:14

153:4 191:8 224:6

232:20 233:9 263:13

277:8

run 15:2 51:14 93:11

94:2,6 267:11 284:12

running 94:6

rural 80:12

S

S-E-S-S-I-O-N 176:14

S.W 1:10

SACHS 2:5 10:20 11:18

13:9,12 15:12 17:19

20:6,9 21:20 24:11

25:19 27:10 40:3

49:13 52:20 54:9 55:3

55:17 56:20 57:11

59:19 62:15,21 63:1,5

63:12 64:19,22 78:15

81:1,6,10 82:4,8,12

88:10,12 101:22

104:7 114:9 119:14

119:17 121:4,9

123:20 134:11 138:7

170:6,8 195:12,21

196:9 197:15 203:2
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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203:10 215:19 218:9

226:13 227:1 230:1,6

230:14 232:4,8 234:9

234:11,17 282:2

283:5 285:4,17

safe 82:19 83:22 121:17

227:18,20

safety 228:19 229:1

sake 38:21

sale 126:14

sales 53:3,7 84:18

sample 8:9

samples 5:10,13

sandbagged 25:20

satisfies 224:13

satisfy 218:7

save 260:20

savings 69:9 159:22

238:18,19 267:21

saying 6:15 7:5 20:21

25:9 36:12 38:21 39:2

41:15 43:5 45:16 55:6

61:11 74:1 75:8 81:20

92:11 95:6 98:2,4

112:10 117:21 118:11

120:9 128:11 143:18

144:8 148:22 150:8

159:20 198:2 205:11

210:10 219:20 222:16

224:17 234:4 237:12

237:14 238:9 273:19

276:12 279:3 281:15

283:2

says 51:19 63:7,17

97:12,15 124:16

126:16 137:6 138:15

141:18 156:9,14

179:14 204:1,11

245:7 249:10 269:19

277:17

scale 79:2 237:22

238:10 246:11 268:2

scaling 239:11

scan 23:5

scenario 67:4 68:13

131:15 136:12 167:11

186:4 211:13 217:22

245:5 265:4 274:22

scenarios 137:20

scheduled 237:11

scheme 186:14

school 268:6

scope 96:22

scoring 35:4

Scott 169:22

Scott-free 223:22

screen 11:22 18:3

50:15 94:18

searchability 207:20

searchable 208:1

searching 141:10

SEC 240:19

second 19:18 34:3 41:5

60:6 61:9,18 97:4

113:13 177:6 179:18

183:5 222:1 238:2

256:16 258:12 271:9

secrets 221:17

Section 153:3

see 6:5,6 9:12 11:22

12:15 31:19 43:17

45:17 49:20 75:13

77:1,6 83:1 90:12

98:9 106:20 126:6

130:5 138:15 141:7

149:6,11 152:17

153:21 155:6,9 160:5

172:6 174:18 181:15

183:20 184:3 193:9

194:10 199:5,5,6

201:12 229:4 239:1

241:4 245:2,17

249:22 256:16 264:14

274:19,22 275:2

278:22 281:12 285:19

seeing 245:14

seen 71:7 158:20 162:7

SEER 18:12,15,21

19:20,22 20:5 23:2,10

23:10 48:8 49:19

61:12 63:8 68:19 69:2

70:5 71:22 72:13,15

79:6,14 80:4 82:2

83:3 109:17,18,18

116:12 133:3 136:16

142:15,16 156:1,3

192:12 194:1 199:10

262:2

self-reinforcing 138:10

sell 32:19,21 33:14,15

34:1 36:13 38:3,4

39:4,9 47:11,17,20

49:18 50:21,22 51:19

57:2 61:16 63:8,21

64:10,12 67:11 73:8

73:16 78:5 83:10,15

83:22 85:21 88:5 91:3

109:9,18,19,19,22

110:1,3 111:13 112:1

113:5,19,21 114:5,20

117:1 118:19,21

119:3,5,6,11 150:17

156:21,22 179:15

199:16 205:8,8

211:19 216:13 217:4

225:19 230:3 257:13

258:1 262:3 264:2

sell-through 143:16

200:3 205:2,3 267:1

selling 17:11 47:15

61:3 85:3 86:2 95:12

95:17 97:8,9 111:12

111:20,21 115:8

116:22 117:3,4,5

119:10 121:11 136:15

136:19 137:9 139:6

148:3 178:9,10,13

199:9 206:13 216:16

223:17 224:20 240:15

250:17,17

sells 76:13 136:13

179:18,21

semi-nuclear 216:10

send 5:17 44:13 82:1

173:2,3,18 275:11

sending 81:17 172:2

sense 28:21 37:11

60:10 62:9 78:20 79:3

79:5 87:17 158:15

183:20 198:14 209:5

218:11 239:9 264:16

sensitive 26:17 167:8

199:1

sent 127:3 136:9

171:19 172:4,11

174:15

sentence 82:7,9

separate 30:11 32:16

99:12,15 128:18

193:2,2 194:20

separately 99:6,12

separating 95:9

September 1:8

serial 127:15 130:8

140:22 141:20 147:5

147:14 155:12 156:14

257:19

serious 218:12

seriously 55:21

serve 72:8 76:21

241:16

service 70:2,12 132:2

175:9,13 245:6

277:16

services 69:16 70:8

163:21

servicing 69:21

serving 83:2

set 138:10 152:18

173:10 176:16

sets 175:14

setting 235:3,3 263:13

settle 57:13 211:1,3

212:8 213:12

settled 211:7

settlement 58:10 210:9

210:14,16,22 211:22

212:7 213:14 215:2

215:11 219:10 279:7

280:2

seven 23:1 112:19

174:17

shaking 75:13 94:14

118:5 131:18

shalt 63:8

share 27:17 119:7

123:10,12 138:16

171:16 189:7

shared 171:15

sheer 284:12

sheet 175:15

Shepherd 2:6 4:7,11

17:4 36:5,5,17 37:17

43:1,10 44:17,21 45:5

45:16 50:1 52:12

53:20 95:16 114:7,10

124:1,2,10 130:5

198:6,6,14,16 255:12

255:13

shift 94:2 225:17

shine 222:12

shingle 283:15

ship 72:15 74:9 79:14

80:3 88:4,7,9 91:13

91:21

shipments 80:1,17

shipped 94:4,7 133:6

257:16,19,21 269:3

shipper 101:4

shipping 68:16 70:5,18

71:14,22,22 73:8 74:2

79:6,9 238:15

ships 136:21

shop 188:11

short 54:10

shortchanged 197:22

shortly 46:14

show 18:9 126:7 163:6

199:8 231:1 232:21

233:13 274:15 275:3

277:19

showing 5:11 12:2

108:1 276:11

shown 173:7 254:8

shows 18:17 126:9

131:11,13 133:5

174:20 233:12

shredding 271:9

shut 3:7 135:22

sick 228:20

side 3:10 15:2,3 25:10

26:16 30:2 68:14 69:6
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

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106:16 122:21 155:10

157:5 175:3 200:16

226:15 256:2

sight 58:13

sign 63:6,17 64:22

signed 211:21

significant 35:3 58:11

144:12 266:20

significantly 102:11

signs 225:20

silent 145:1

similar 18:4 31:1 42:5

95:15 153:2 162:12

229:5 261:15

similarly 49:19

simple 134:2 223:3

256:15

simplify 109:6,7

simply 8:22 12:2 100:6

129:16 211:19

Simultaneous 52:13

73:19 176:8 198:21

199:3 246:9 281:8

single 23:9,10 38:22

88:19 138:11

single-phase 173:8

sinister 161:14

sir 19:7

sit 155:10 162:21

206:12 208:16 274:18

site 66:16 91:16,17

219:13

sitting 25:9 66:12 130:6

156:13 162:18 245:7

253:12

situation 5:5 68:15 85:1

130:13 131:6 143:3

151:14 152:2 153:2

153:13 215:8 248:6

258:4 264:21 269:16

273:17

situations 164:9 257:15

265:1

six 163:5 210:7 211:21

213:15 237:10 250:1

259:4

Sixpack 54:14

size 6:13,17 7:14 8:7,16

8:18 9:9 10:1,22

11:15 81:7 172:20,20

173:20 174:14 202:13

250:8,16 260:6 273:2

273:19,20

sizes 7:6

skeleton 189:4 235:18

skeptics 231:4

sketch 259:14 260:14

skin 135:9 216:6

slap 238:1

slapping 266:8

slate 283:16

slide 41:22 42:2 190:9

slightly 86:5

slip 242:21

small 148:20 149:7

203:7 248:11 259:6

272:9,15 275:14

284:13

smaller 170:10,10

282:15

smart 267:21

Smith's 245:8

smokes 163:21

Smokey 238:14

smoking 137:21 138:1

sold 21:6 48:5,11 54:14

61:14 68:17 104:2

107:8 111:17 119:3

119:20 126:10 127:16

128:11 156:19 212:20

256:22 257:1,1

solution 75:19 121:21

147:21

solutions 176:5

solve 284:21

solving 83:5

somebody 4:19 9:12

26:19 33:13 36:13

37:12 38:5 61:10

62:14 76:15 83:19

86:8 88:21 98:19

109:16 124:18 129:3

137:5 139:6 140:12

151:4 159:22 160:1,4

167:17 201:16 220:22

222:1 236:18 244:6

244:13 269:1 272:19

somebody's 162:22

someplace 64:11 80:5

somewhat 185:13

soon 22:4 189:9,16

237:15

sophisticated 273:4

277:4

sophistication 273:3

sorry 11:18 14:3 19:6

171:18 179:10 184:11

205:5 209:5 261:5

262:17

sort 30:11 33:10 42:21

51:2 54:15 56:4 68:10

79:1 83:8 84:6,11

85:15 87:17 102:12

107:17,18,20 125:9

125:19 130:3 138:20

140:19 149:1 153:15

162:14 180:13,14,20

196:14 197:6 198:10

200:7 213:22 214:6

225:5 227:12 230:2

231:12 232:18 233:19

239:10 240:21 241:2

255:17 262:4,11

264:15 267:15 277:7

277:15 285:5

sorts 55:4

sought 261:13

sound 130:18

sounds 39:10 222:16

281:22

source 81:4

south 18:5,11,16 20:4

20:20 21:2,6 22:1

31:5 69:17 72:16 74:4

74:22 77:22 78:2 83:2

88:6 93:1 133:3

136:16 156:11 203:16

226:19 238:16 261:17

262:2

southeast 6:2 174:6

192:15

southeastern 192:8

193:3,4

southern 91:17 192:1

southwest 6:1,2 18:5

18:12,16,18 21:7 22:2

69:17 174:6 192:7,15

192:19 195:10 226:19

southwestern 192:1,2

192:21 193:2

spa 12:10,14

space 7:6 8:18 9:1 13:6

175:14 195:7

span 54:11

speak 76:6 94:20 96:6

148:13 219:5 226:22

248:22

SPEAKER 13:21

speakers 229:14

speaking 14:4 52:13

57:11 73:19 176:8

198:21 199:3 214:14

221:9 222:6 246:9

261:6 281:8

specific 9:19 34:19

39:8 48:21 110:8

172:20 235:19

specifically 107:12

108:8 116:14 157:4

171:19 173:9

speed 135:4 222:3

243:17,18

speeder 246:5

speeding 243:16 268:3

268:7

speeds 243:20

spend 139:5 198:3

274:5,11

spent 274:8

spin 139:10 197:16

split 29:21 179:1

spoken 214:22

spot 8:4

spotlight 222:13

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staff 28:13 271:3

stage 106:22 170:20

stages 190:18

stake 283:1

stand 19:8,12

standard 32:22 39:15

39:21,22 107:8 128:7

143:8 193:15 204:15

204:17,18 205:11

226:18 227:1 231:17

264:7

standardization 8:13

standardize 175:22

standardized 6:16 7:16

standards 1:3 28:2,9

106:15 110:9 191:9

194:3 204:2,6,12

219:4

standpoint 88:17

start 3:19,20 4:1,22

16:7,9 18:14 28:1

45:2 49:16 76:4 137:9

146:17 161:10 171:9

171:9 221:10 236:9

240:20 241:3 244:14

245:14 251:11 259:19

260:16 261:1 272:8

started 3:4 176:17

228:3

starting 238:21

starts 145:10,11 256:16

271:9

STAS 2:12

state 79:1 127:21 131:7

156:4,11 157:6 159:5

192:18 268:18

stated 175:21

statement 164:4

states 63:9 72:10 79:20

79:22 91:14 131:10

192:16

statistic 241:21

statistical 266:21

status 214:2

statute 39:14 40:1 93:7
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step 226:11 250:22

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stepping 25:4

steps 89:22 225:14

226:6

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Steve 46:9,11,11 62:16

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104:17 105:15 187:19

199:20 220:13

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STEVEN 1:18

stick 103:13 277:16

sticks 103:9 217:12

sticky 102:9

stop 17:11 62:6 85:8

127:7 128:3 141:13

195:20 240:15 247:2

247:12 255:4

stopping 87:20

stops 137:9

store 74:4 187:15

stored 75:1

storing 74:3

straightforward 174:19

strategies 210:19

strawman 13:16

stress 166:8

strike 213:13

strive 23:21

strong 151:7

Strongly 168:16

struck 36:10

struggling 136:11

stuck 146:4,22

stuff 51:11 56:10 80:17

119:20 126:16 149:16

151:12 163:3 192:20

235:2

stumbled 261:18

stupid 162:11

sub-bullet 207:3

subject 18:20 29:7

53:19 55:16 58:16

110:8 127:11 195:5

211:9 236:6

submission 168:22

submitted 30:4

subpoena 35:7 45:22

46:4,14,16 47:2

104:19 105:18 106:10

216:3 219:21 220:2

220:16 222:2 244:13

subpoenaed 104:12

221:12

subpoenas 105:3

subsequent 184:13

substance 178:19

substantial 67:15

sudden 76:13 83:3

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suddenly 77:22 95:21

118:9 275:3

sue 181:5 253:6

suffice 63:6,12 64:22

sufficient 120:18

177:12

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205:18 219:13 231:19

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51:4 246:17

suggesting 27:1 42:20

65:16 87:16 140:3

159:12 201:12 263:22

suggestion 21:15 71:14

87:4 182:11 203:5

suggestions 8:21 10:19

271:17 278:8

suit 212:7,9

suitably 196:10

Suite 1:10

sum 181:19

supplier 263:10

supply 17:1 24:7 48:18

228:8

support 4:18 10:21

24:17 49:12 168:15

168:16 214:19 233:21

259:11

supporting 23:16

supportive 24:1,4

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supposed 3:13 122:4,8

126:12 142:15 151:16

176:19 196:17

Supreme 185:22

sure 13:11 15:21 19:10

27:8 28:22 55:19

66:14 67:19,22 72:1

88:13 97:16 115:17

117:19,22 118:3,8

129:8 138:9,14,18,22

148:4 157:20 173:12

177:14 184:4 188:5

190:9,21 194:10

195:8 197:13 198:8

203:20 204:4 212:6

229:3 231:22 251:6

263:18 268:11 274:2

survey 148:14

survive 146:13 262:9

surviving 263:7

Survivor 170:11

suspect 145:8 224:12

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suspicion 145:14,16

152:7 154:8 249:12

suspicions 166:16

suspicious 138:17

sweep 148:13

swing 216:22

switch 167:1 265:21

system 5:6 9:2 22:13

23:6 24:20 29:21 35:3

148:8 152:11 156:1

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table 18:17 19:7 25:10

27:4 56:22 57:8

144:15 190:9 205:1,6

205:18 211:15 228:9

tackle 40:17

Taco 267:11

tag 139:20 266:7

tailored 248:6

take 14:10,10 15:17

37:20 42:17 50:8 56:2

57:7 59:22 61:2 63:18

78:19 79:22 80:16

85:22 90:11 169:19

176:17 180:22 181:6

181:11 187:10 194:13

195:2 211:1,3 223:7

231:4 233:10 234:7

245:4 256:5 273:14

take-home 18:1

taken 3:22 161:13

174:7,16 238:3 285:4

takes 134:18 137:10

209:13 253:7 270:11

talk 4:15,19 5:2 25:14

28:13,13 32:2 39:17

67:2 144:8 149:17

158:2 171:4 184:8

194:17 195:7 203:1

209:20 230:11 236:3

237:16 251:19 258:8

259:17 279:11,13,15

280:21

talked 5:12 93:20

108:22 117:13 144:10

147:7 151:12 159:7

173:22 174:2 176:22

180:5 181:16 190:14

210:3 211:12,12

216:9 217:9 224:2

228:16 229:6 233:5

252:8 279:18

talking 26:8 28:1 36:11

39:12,13,14 48:16,20

62:11,12 66:21 93:6

100:10 118:6 125:5,8

125:9 128:22 143:2,3

144:2 151:21 153:11

171:22 178:3 179:19

183:15 193:13 196:7

201:4 234:6 239:12

253:12 256:8 258:9

258:16,22 270:2,19

272:7 274:11 280:13

talks 53:22 210:22

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target 235:11 236:3

taught 3:16

teaches 3:16

team 139:2 150:3

tech 270:20 271:5,5

277:16

technically 188:20

216:18

technicians 132:2

277:12

techs 250:4 270:10,19

teenagers 238:4

teeth 112:12

teleconference 2:16

tell 27:7 63:19 64:13

69:15 85:3,6 86:12

121:17 122:8 127:10

128:13 148:6 150:6

150:19 208:10 213:7

256:1 257:16 275:8

275:21

telling 38:8 64:11 70:15

162:1 213:14

tells 64:9 85:13,14

template 227:2

ten 267:6

tentatively 56:2

term 5:15,19 7:8 10:5

14:1 33:10 99:15

109:12 110:4 138:19

149:10 151:20 178:17

223:6 232:18 269:14

terminating 270:12

terms 5:11 23:18 25:5

56:10,12 58:15 77:10

104:8 106:18 177:9

212:10 213:12,14

218:12 225:20 233:12

tested 264:16

testing 241:20,20
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Texas 80:13

text 6:4 7:16 9:2 172:18

172:20 174:18 191:9

194:18

thank 14:6 19:5,9,16

20:9,10 21:20 81:2

169:16 173:17 180:1

196:9 213:2

they'd 95:5 127:11

thing 6:9 14:9 16:12

22:6 29:16 35:16

39:20 45:20 46:8

57:10 77:3 78:20

79:13 84:8 86:3 89:10

101:12,18 103:11,18

105:11 123:13 124:17

134:12 135:17 138:12

141:15 145:3 148:7

160:6,11 161:2,19

165:16,19 174:5

179:15 183:17 184:16

184:21 190:11 196:12

197:5,11 199:11

201:9,16 210:19

227:6 231:1,7,12

235:15 236:8 240:21

243:9 246:13 249:9

250:9 251:8 260:9

275:1

things 5:8,16 7:10 16:7

24:8 28:18 39:13

40:13,13,20 41:9 53:3

53:15 55:16 62:14

64:13 74:4,13 77:6

78:1 86:2 95:4 96:14

100:10 103:4 107:4

109:7 123:1,18

125:10 129:10,12,17

134:15 135:3 146:17

146:18,22 166:17

168:1,5 169:4,21

176:19 180:14 184:7

184:15 189:9,10,12

198:4 207:16,17

208:9 219:7,15 220:7

222:11 223:7 225:8

226:16 227:9 229:1,5

231:2,20 232:2,5

233:20 235:10 237:1

241:5 245:17 248:14

250:17 251:7 252:14

256:3 257:16 268:12

276:4 285:10

things/questions 57:14

think 3:9 4:7 5:5 6:7,21

7:1,18 9:7,18,19

10:12 11:5,10 12:19

13:12,13 14:12,16

15:10 16:14,20 17:15

24:4,7,12,19 25:4

26:1,6,13,17 27:21

28:6,8,11,12,21 29:8

29:17,22 30:7,9,12

32:2 33:6,7 34:20

35:5,13 37:2 38:6,15

38:20 39:12,21 41:22

42:19 43:4 44:1,21

45:1,20 46:19 48:4

50:6,14 52:15 53:6,20

54:4 55:4 56:6,8 57:5

57:13 58:5,6,10,12

59:5 60:1,3,7,9,16,20

61:21 62:6,16 63:14

64:4,7 65:19,21 66:1

66:11 67:1,5,9 68:5

68:12 70:4,17,20 71:7

71:10 73:20 75:16,16

75:19,22 76:6,12,17

77:2,3,15 79:11 81:3

81:3 82:12,18 83:5,13

83:21 84:5 86:3,5,22

87:12,18 88:15 89:13

89:16,18 90:7,8,13

93:1,21 95:9,22 96:1

96:13,15,17,19,20

97:2,6,18,21 98:3,4

99:11 102:6 103:2,8

103:20 105:9,14,16

106:7,22 107:12

108:4,12,13,13 109:1

110:2,20 112:11

114:11 115:12,13

118:12 119:15 120:20

122:1,14,21 123:13

124:8,16 125:3,4,8,10

125:14,21 128:16,18

129:6,15 130:1,3,5,13

133:9,12,14,18

134:21 135:14 136:3

136:5,14,22 137:6,20

138:4,15 140:19

143:22 144:6,7,18,20

144:22 145:3,18,20

145:22 146:1,3,4,22

147:1,19 148:14,21

149:5 150:12,16,22

151:4,6 153:20,20

154:13,17 155:4

156:18 157:2,11,12

158:6 159:4 160:5

161:7 163:3,9,10,12

164:5 165:2,7,18,21

166:1,2,4,5,6,9,11,12

171:8,8 175:20

176:21 177:19 178:20

179:2,8 181:21 182:3

183:1,12,15,18

184:10 187:20 188:1

189:12 193:1,18

194:12,19 196:13,13

197:8 198:7,17

199:19,20,22 201:8

202:5,8,17,20 203:3

203:12 204:2,19,21

205:19 206:1,7 207:8

208:9,22 209:5,17

212:15,21 213:3

217:11 219:11 220:14

222:1 223:15,20

224:3,16,18 225:6,7

225:16 226:4,13,14

227:7 231:17 233:18

233:19 234:2,6

235:13 236:4,11,16

236:20,22 237:7,10

237:16 238:17 239:4

239:8,13 240:2

241:16 244:8 246:2

246:16,18 247:15

248:17 251:18 252:2

252:18 253:2,10,14

253:15 254:21 255:2

255:12,13 256:4,7,9

258:6 259:3,10,11,22

260:11,20 261:3,8

264:6 265:3,4,17

267:2 268:7,20,22

269:5,12 270:1,15,21

271:14 274:9 278:2,4

278:6 279:10 280:5,9

281:5,18 282:4,12,17

283:7,10 284:3,21

285:11

thinking 11:1 127:18

132:20 159:4 191:19

198:3 218:16 258:15

282:7 285:6

thinks 137:3,4 194:21

218:1

third 238:8 256:17

Thomas 67:10

thorniest 237:9

thorough 252:18

thou 63:7

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24:3 34:4 41:18 46:21

56:3 58:21 94:17

102:2 141:8 161:17

162:19 163:13,18

207:10 232:13 278:5

282:15

thoughts 12:18 49:1

52:15,19 171:7 191:1

200:2

thousand 112:20

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three 50:15 63:18 69:22

123:10 125:14 129:2

138:13 139:5 145:19

178:6 192:5 196:8

227:17 242:6 246:21

247:9,11 256:17,21

257:4,5 269:18

three-phase 173:8

threshold 107:14 137:2

137:8 138:1 140:5

145:15 168:11 246:1

255:6

threw 182:4 200:20

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188:14 208:20

throwing 79:18 91:10

170:11

thumbing 244:15

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ticket 156:9

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tie 53:21

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Tim 29:15 45:21 59:2

77:18 140:13 180:6

181:18 184:11 270:2

283:6 284:2

Tim's 46:18 47:1

time 5:8 12:19 14:10

29:4 39:3 42:15 46:13

49:15 51:12 70:1

74:21 77:13 83:11

84:4,19 88:19 102:6

133:4 134:18 135:7

137:10 145:10 155:19

159:10 161:11,13

163:22 167:10,19,22

169:6,11,19 176:3,9

181:17 185:18 186:8

198:3,4 240:14 242:7

243:10,18,20 247:4,5

250:2,10 255:8

260:21 265:19 269:11

274:5,8,11 278:12

285:10

timecards 271:7

timely 84:1

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75:17 99:20 120:4

185:7 228:14,15

236:19 242:1,6,6

246:7,12,14 247:11

257:5 269:10

TIMOTHY 1:14
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Neal R. Gross and Co., Inc.

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today 4:12 6:22 8:17

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99:20 156:20 159:9

160:3,11 170:2

172:16 173:21 188:14

195:20 212:1 213:16

229:20 236:21 237:10

237:15 265:13 273:8

278:12 279:9 280:20

282:7

told 63:16 64:1 65:4

85:2 105:15 125:17

154:3 211:14 217:18

218:5

tomorrow 59:15 177:16

195:16,19 206:17

208:20 237:15 278:13

278:21 279:11,18

280:16 281:1,16,20

285:20

tomorrow's 282:3

tonight 171:4 191:1

259:14

tons 203:22

tool 103:20 106:20

112:8 144:7 169:7

tools 213:6

top 191:5

topic 171:13 199:22

torch 175:13

torn 21:11

total 25:14

totally 115:1

touch 107:21 284:15

tough 51:13

toxic 61:16 117:6

track 23:4 133:5 251:7

251:10 271:6

tracked 141:19

tracking 147:6,14

tract 97:12

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trade 53:17 182:8

train 224:5

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226:2 228:6 231:11

233:5,8 277:12,14

282:18

transaction 140:19

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translate 11:7 24:18

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treat 73:7 99:6,12

248:10

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tree 251:11

tremendous 194:10

232:12

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trick 146:16

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141:15

trouble 100:15 119:1

135:16 136:5 170:6,8

191:11

truck 266:14 267:10

272:22

trucker 238:12

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82:2 86:8 238:15

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272:19

true 129:6 159:17

218:16 236:11 276:2

282:12 283:20

trust 233:11 274:1

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27:22 81:14 125:2

150:11 215:19 229:10

229:16,17 235:2,6

259:20 262:3,15

282:16 284:22

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43:2 62:16 78:16 84:8

96:18,21 125:4 134:1

134:10 145:18 163:14

167:18 194:3 199:17

234:20 235:12 258:5

261:15 262:9,19

263:8 274:13 281:10

turn 94:2 122:4 127:14

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turned 127:14 167:9

244:5 265:21

turning 100:13 140:8

turns 5:14 12:13 128:20

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tweaking 35:3

tweaks 52:16

twice 19:2 40:22 87:19

254:8,10

two 7:9 18:3 32:15

39:13 61:1 84:3 95:9

99:21 119:4 130:12

146:4 151:11 154:3

155:5,16,22 176:1

178:8 179:12,22

195:22 196:6 210:20

228:4 233:20 242:6

256:3

TXV 131:16

type 8:17 11:8 44:3

151:13 276:7,8

types 178:6,8

typical 6:12

typically 23:21 77:21

85:7 105:1 132:5

211:18

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U.S 1:1,18 2:3 80:2

Uh-huh 63:11 203:17

246:6

ultimate 184:17

ultimately 64:16 117:4

150:8 223:12

umbrella 34:4

unanimous 59:14

unaware 117:11

uncertainty 257:2

uncomfortable 49:4,9

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152:7 163:9

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underlying 100:20

understand 28:3 38:20

40:7 41:18 72:22

73:10,17 81:19 87:1

87:13 100:5 101:19

111:3 125:13 127:17

143:17 150:7 170:19

198:2 207:8,9,12

212:6 213:5 215:21

226:2 255:14 273:16

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understanding 44:4

81:11,16 97:3 180:16

182:12 277:8

understands 22:7

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understood 247:6

285:13

undertaking 72:19 73:1

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Unfortunately 275:5

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166:16

uniform 197:8,9 201:10

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unintended 141:7

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unit 6:15 13:10 14:16

14:22 15:2 19:21

20:15,16 22:1,15,15

23:2 29:11 63:8,9

68:14 71:22 91:22

92:5,12,13,15,18,22

93:22 94:1,3,5,6,7

107:8 127:4,16 133:3

133:6 134:7 142:13

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156:3,13 162:18,19

162:20,20 163:21

173:8,8 174:8,17

175:3 180:17,18

181:4 187:9 197:12

199:17 201:3 205:17

245:5,9,10 261:10,11

262:16,21 263:2

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unit's 16:2

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202:10

United 79:20,22 91:14

units 10:7 14:19,19

19:15 20:3 31:4 53:7

63:18 65:11 67:16

68:16,20 69:2,10

70:19 76:14 82:2 88:6

88:8 110:16,17

126:10 128:11 131:19

136:16 139:9 142:7

143:12 164:1 204:14

217:4 225:5 250:2

257:21 261:15 262:2

262:10 264:3 266:5

266:20 267:7,17

universally 197:1

unlawful 86:15 88:5

109:9

unlimited 205:2,8

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URC 7:13

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use 13:22 68:9 75:4,5

75:21 82:22 103:20

151:16 160:8 167:3

167:22 184:7 201:18

206:9,10 213:8 248:8

259:18 273:22 280:19

useful 203:7
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Neal R. Gross and Co., Inc.

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usual 87:21 194:9

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Utilities 1:17 15:10

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V

vague 255:22

vagueness 254:1

valid 273:1 278:6

value 166:1 193:1

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valves 131:16

various 63:5 144:3

vast 80:8

Vegas 69:16

vented 153:11 155:7

verbiage 5:22 174:3

202:8,11,17

verifiable 168:4

version 18:13 170:15

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73:8,12 192:7,12

207:22 238:13,19

249:20 250:18 270:20

271:5 281:19

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victim 262:6 263:2,5

view 15:10 37:22 60:10

62:8 75:12 97:6,19

101:5 102:20 103:11

104:22 105:15,17

106:8 112:13,16

120:13 165:13,22

213:19 220:15 239:4

248:18 271:2 273:9

viewpoints 196:19

Vincent 2:14 90:19,21

93:9,18

violate 39:21 115:1

125:18 128:7

violated 106:15 116:18

125:17 133:10 216:17

242:8 257:5 264:10

violating 33:12 51:6

61:4 111:12 116:4

125:17 150:19 244:2

244:13 259:2 260:13

263:21

violation 31:21 32:19

32:22 34:3 35:18,22

36:4,7,19 37:19 38:18

39:15,15,19,22 40:12

40:19 41:6,14,16 42:4

42:9 43:18 47:1,16

50:9 51:1 52:7,10,12

55:13,16 56:7,14 59:4

60:3,7,19,20 71:15

73:2,12,21 86:10 92:4

93:7 94:18 95:10,12

95:15 96:22 97:4,7,20

98:1,3,22 99:2 100:6

100:22 104:9,15

107:13,14,15 111:19

113:13 117:16 122:2

126:21 132:16 134:5

136:1 138:20 143:7

145:12,16 149:10

166:19 178:17 179:16

218:1 223:15 224:19

238:1,2,8 239:16,17

239:20 242:3 244:20

249:14 258:11 259:4

262:20 264:13 278:17

280:7,7,8

violations 32:16 60:8

61:22 62:10,12 79:5,5

95:4,5,8 96:11 100:10

141:10 150:2 151:17

151:17,18 153:21,22

165:9 166:4,6 177:22

178:4,6 217:3 222:9

237:22 244:19 246:21

247:9 256:17,21

260:7 264:7 268:9

violator 40:15 41:1,5,9

51:20 82:5 83:12

88:18 95:18 103:14

104:1 107:22 109:8,9

109:17 111:16,21

113:19 114:8 115:4

120:17 148:8 183:16

185:9 240:5 242:5

245:21 250:13 259:9

278:20 283:18

violators 40:10 147:20

148:4 219:14 238:19

240:1

vis-a-vis 54:3 71:5

visible 13:14

visiting 278:11

visual 11:11

voice 57:16 169:1

voltage 265:19

voluntarily 277:15

voluntary 12:10 165:14

volunteer 195:20

vote 56:18 94:22 99:2,3

voted 211:13

votes 56:19 94:19

98:19 99:8

W

wait 4:8 136:19 137:11

145:15

waiving 283:10

walk 116:2 216:4

249:13

walking 117:9 211:20

276:9

walks 179:14

WALTNER 2:13

want 4:19 9:13 10:16,21

11:21 13:7,9 14:9,21

15:1 23:15 24:2 27:17

33:3,18 42:6 49:21

51:2,5 52:9 57:10

60:5 62:3,5,7,18

63:19,21 64:8 66:4,4

66:15,18 67:18,22

78:4,7,7 84:14,22

86:1,1 87:2 88:7 90:9

91:8 94:20,22 95:7,14

96:6 97:16 99:6 100:1

100:11 107:11 119:18

122:12 123:3,7,9

124:11 127:14 128:8

128:9,10 130:19

135:15 136:4 139:5

139:10 141:22 142:1

143:1,6 149:11

161:20,21,22 162:2,2

162:4,5 163:15

165:11 166:8 169:3,6

169:7 170:16,21

171:2,3,3,5,5,9 175:6

177:14 178:16 180:7

181:14,17 190:4,20

190:22 191:14,21,22

198:22 203:4 206:6

208:16 213:9 214:18

215:20 226:12 230:14

234:22 241:8,8

246:19 247:16,18

248:22 251:6,14

252:2,3,19 253:1

257:18 259:4,18

261:1 262:7 276:20

279:9,10 283:17

wanted 29:19 36:1

148:12 184:20 188:4

195:19 202:22 240:18

241:10 248:3

wanting 132:7

wants 53:21 78:6 90:19

99:22 149:6

ward 63:12

warehouse 68:19 69:22

72:12 73:9 261:19

266:2

warehoused 74:13

warm 203:6

warning 238:2 239:18

warnings 135:5

warranties 141:14

142:9

warranty 126:4,5,9,11

130:8 131:2,9,12

135:20 139:11 140:3

140:16 141:20 142:22

143:22 144:6,14,18

148:8,9

wary 240:10

Washington 1:10 72:10

145:6

wasn't 12:21 17:17

164:14,16,17 165:1

172:8,9 281:15

waste 167:10,18 169:6

wasted 267:22

watch 3:9

watched 277:17,18

water 170:4 227:18,21

227:22 228:19

wave 238:20

way 16:8 30:18 38:16

42:2,15,20 43:5 45:17

49:14 57:4 63:15

73:15 80:17 84:5

85:11 88:4 89:19

93:21 97:20 100:9

108:5 109:5 110:6

113:11 121:16 125:13

130:15 132:20 133:17

136:7 142:12 147:15

147:17 151:3 153:15

162:14 185:4 188:1

188:11 197:6,9

199:21 201:15 212:19

214:11 215:5,6,7

223:22 224:10 232:11

232:15 233:15 235:8

236:4 237:3,21 238:9

240:14 244:7 247:3

247:16 248:4 253:2

253:18 261:13 264:11

264:12,13,14 271:6

274:10 275:15 276:9

278:6 282:4

ways 55:7 125:14 136:2

143:19,20 206:8

218:16 224:14 276:22

276:22

we'll 44:22 94:12,15

206:16 232:22 279:17

281:16

we're 4:14 10:3 12:16

14:8 15:5 20:21 23:16

24:1,3,16,21 32:15

33:16,19 38:8,12,21
(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

314

39:2,12,13 41:8,15

44:17 56:11 60:7,16

64:10 74:19 76:18

84:15,19 85:7,16 90:8

95:13 96:13,14,20,21

98:4,9 99:21 100:2,9

100:10 101:11 103:2

104:18,20 107:18,18

125:5,8,9 129:16,18

129:21 130:3 137:7

137:10 138:2,4

141:10 144:1 146:4

146:22 151:15,21

153:8 159:20 170:6,8

170:10,11 171:22

177:4 178:5,13,20,21

179:6 180:12,21

183:15 185:1 189:6,7

189:11,12,15 193:12

196:7 197:11,12

198:8 201:4 205:14

206:9 208:4,19,22

210:2 212:1,16

213:13 214:4 222:16

224:4,5,8 225:5,9

227:13 229:2,3,12,15

229:16 233:6,9,13,13

234:4,15 236:17

239:18 240:3 241:1

243:12 248:6,8 256:8

258:5,16,22 263:12

267:13 268:12,15

269:17 273:12,15,20

273:21 274:1 279:4

280:8,9 281:18

we've 3:9 4:3,5 18:12

30:7 40:4,12 48:4

50:1 53:2 67:19 68:8

71:7 74:20 77:10

78:17 93:20 97:7

103:12 106:12 108:2

108:3,4 110:5 117:13

137:22 138:17 144:10

147:6 162:7 165:17

187:20 190:14 194:9

196:3 211:12 213:13

216:9 218:5 222:7

227:10 233:5 235:1

235:11,17 236:14

237:2 254:9 257:16

277:21 282:4 284:3

weapon 216:21

weary 241:13

weather 69:5

webinar 277:17,18

webpage 168:22 190:5

190:6,6

website 6:5

websites 233:3

Wednesday 1:7

week 32:12,14 43:22

76:4 180:6 183:5

189:17 210:6 267:6

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weeks 24:3 99:21

151:11 154:3 158:11

236:15

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weighted 244:1

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90:15,16 129:5 133:6

157:4 176:11,13

228:11,16 270:1,18

weren't 108:12

west 262:3

whistleblower 151:13

151:20 152:11

whistleblowing 164:5

164:19 165:2,10

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111:6 112:5 161:4,5

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203:21 210:9 227:14

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235:7,7 236:13 238:6

246:10,10 265:16,16

267:19 269:7

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98:19 183:12 218:22

219:3,8,17,20 224:21

279:4

winning 170:12

wise 281:2

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woke 134:12

woman 65:4

wonder 49:16

wondering 272:12

word 109:15 151:15

229:18

worded 33:8

wording 9:20

words 11:22 55:19

110:10 201:17

wordsmithing 177:14

178:16

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51:5 76:3 101:6

102:10 133:18 135:4

145:2 146:5 152:11

156:9 161:13 164:5

165:4 205:19 208:17

218:6 224:6 227:8

231:10 233:9 235:9

244:15 250:4 274:14

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190:12

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11:19 16:13,18 31:21

64:14 90:8 101:6

117:19 160:12 161:9

169:13 189:6,11

190:17 197:8 208:19

234:15 241:19

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207:12 232:19 246:12

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167:11 178:9 218:11

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worry 278:16

worrying 106:21

worse 274:16,16

worst 78:8 274:21

worst-case 168:6

worth 26:15 122:9

196:14 220:18 244:15

278:2

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83:17 127:12 156:6

159:16 183:20 185:3

186:6 220:9 222:20

237:13 258:4 265:8

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wrapping 191:22

wrist 238:1

write 178:18

written 277:22

wrong 6:8 11:9 23:6

40:21 42:22 68:14,17

69:10 72:2 86:3 97:10

117:12 122:7 124:17

127:1,5,20 128:6

131:3 157:6 166:15

173:10 216:13 229:20

247:6 262:10 265:18

266:1,13,14 269:2

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wrongfully 123:22

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198:15 199:19 204:21

209:4,7,21 219:11

221:21 224:16 241:9

245:22 246:2 254:20

258:18 269:7,12

278:2 280:3 281:5,7

year 8:14 175:21

years 10:22 25:2 68:3

84:3 123:11 139:5

155:11 162:22 185:20

185:21 186:4,12,21

187:1,8,13,15 188:2

188:14,18 210:20

226:1 227:17,17

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York 6:12

Z

Z 47:10 213:12

zip 225:6

zone 268:6

zoom 174:16

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1:00 176:10

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10 3:18 11:6 80:13

90:14 116:12 174:13

229:13 250:4 269:7

10:29 90:16

10:46 90:17

1000 1:10

11 23:11

12 6:14 155:11

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13 19:20 20:1,5,18 21:2

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(202) 234-4433 Washington DC www.nealrgross.com

Neal R. Gross and Co., Inc.

315

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15 6:14 27:19 109:18

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16 143:16

18 205:8

18-month 205:3

1st 14:14 143:15 203:18

204:15

2

2 131:16 179:11

2:42 285:21

20 155:11 162:22

174:13 272:19

200 112:19

2013 186:1

2014 1:8

2014-built 199:16

2015 143:13,15 156:15

2016 156:15 203:19,19

210 234:13

24 1:8

240s 234:13

25 246:14 250:1

26 18:21

3

30 244:15

300 112:19

31st 200:11

369,100,000 203:22

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429.16 110:21

430.16 110:20

430.32(c) 110:20

5

50 68:2 112:19 260:1

500 139:6 266:5

54 271:5

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60 244:15 260:1

608 153:3,10

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71 271:5

72 11:8

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9
NEAL R. GROSS

COURT REPORTERS AND TRANSCRIBERS 

1323 RHODE ISLAND AVE., N.W. 

(202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 

C E R T I F I C A T E

This is to certify that the foregoing transcript 

In the matter of: 

Before: 

Date: 

Place: 

was duly recorded and accurately transcribed under 

my direction; further, that said transcript is a 

true and accurate record of the proceedings. 

 

 ----------------------- Court Reporter 

316

Central Air Conditioner Regional

Standards Enforcement Working Group

US DOE

09-24-14

Washington, DC