Before the United States Department of

# Tran~p',~QE Federal AviationAdministration

## IN**~i)** In the matter of EMPIRE AIRLINES, INC. ) ) 

### ) FAA Docket No. CP09NMOO'09 ) FDMS No. FAA-2009-0586 )

### --------------------------~) Complainant's Appeal Brief 

### Pursuant to section 13.233(d) of the Rules of Practice for FAA Civil PenaltyActions, 14 C.F.R. § 

### 13.233(d), the Complainant, FederalAviationAdministration ("FAA"), files this brief in the appeal of the Initial Decision ofAdministrative Law Judge ("ALJ") Richard C. Goodwin regarding FAA Docket No. CP09NM0009. Statement of the 

### Case The Complainant issued a complaint datedJuly 17, 2009, requesting that Respondent Empire Airlines, Inc. ("Empire") be assesseda civilpenalty in the amount of $20,000. The pertinent parts of the complaint are as follows: 

## * * * II. 

### 1. Empire holds an FAA air carrieroperating certificate issuedunder Part 119 and is authorized to carry cargo under 14C.F.R. Part 121.'

1 

### The complaint was amended at the outset of the hearing to reflect that Empire Airlines also was authorized to carrycargo under 14 C.F.R. part 135. Tr. 7.2 

### 2. On August 22, 2007, FAA special agents conducted a ramp inspectionof Empire civil aircraft N778FE, a CessnaModel 208B, at the Rogue Valley International Airport, Medford, Oregon. Empire operatedN778FE under 14 C.F.R. Part 121 as Flight No. 8678 from Portland, Oregon, toMedford, Oregon. 3. Incident to that inspection, the agents found that Empire had operated FlightNo. 8678 when:
a. TheAuto DG Manifest for the flight stated that all hazardous materials aboardN778FE were loadedin position 1, the main deck of the airplane. b. Five (5) shipments of class 8 hazardous materials were instead loaded inPod C, in the lower deck of the airplane. 4. Empire uses the Auto DG Manifest to complywith49 C.F.R. § 

### 175.33.
a. 49 C.F.R. § 

### 175.33(a)(4) requires the operator of the aircraft to provide the pilot-in-commandwithwritten. informationbefore the departure of the' aircraft that specifies the location of thepackages of hazardous materials aboard the aircraft. b. 49 C.F .R. §§ 

### 175.33(c)(2) and (c)(3) require the aircraft operator to retain a copy (or electronic image) of the notification ofpilot-in-command requiredby49 C.F.R. § 

### 175.33(a), and have the informationrequired to be retainedreadily accessible at the airport of departure and the intendedairport of arrival for the duration of the flight leg. 5. Further investigationrevealed that Empire had accepted the shipments of hazardous materials, described above, from Federal Express, and that neither Federal Express nor Empire personnel
. [had] correctlyentered the requiredinformation on the Auto DG manifest. 6. Further investigation also revealed that, on August 22, 2007, Federal Express offered two other shipments for**trans~ortation** 

### onFlight No. 8678 from Portland to Medford.2


### a. One shipment was offeredon FedEx Prior[ity] Overnight airwaybill no. 731703530562;

2 

### The actual flight number was 8677-22. C-1.3

b. The other shipment was offered on FedEx Priority Overnight airway[] bill no. 731703530530.
c. The shipping label for each shipment stated that AstraZeneca Pharmaceuticals, LP, was the shipper., 7. Eachof those shipments consisted of a fiberboard box containingNexium Hand Sanitizing Gel.
a. NexiumHand SanitizingGel is classifiedas a hazardous material under the Department of Transportation's [DOT's] Hazardous Materials Regulations (49 C.F.R. § 172.101). The proper shippingname for NexiumHand SanitizingGel is "Ethyl alcohol solutions," Hazard class 3, Packing Group III, and has an assigned identificationnumber of UNl170. b. 49 C.F.R. § 172.316(a)(1) requires the designation "ORM-D-AIR" for an ORM-D shipment prepared for air shipment.
c. Eachbox was marked "ORM-D," but not "ORM-D-AIR." d. Eachbox containedtwenty-four (24) 354-mlbottles of the product.
e. The screw-type closures for the bottles didnot have a positive means to hold them securely, tightly, and effectively inplace, as required in 49 C.F.R. § 173.27(d). f. Neither shipment was accompaniedby a shippingpaper indicatingthat the shipment containedhazardous materials. g. 49 C.F.R. §§ 172.200(a) and (b) require a hazardous material shippingpaper for anORM-D material if the material is offered or intended for transportationby air. 8. Empire'accepted for transportation and transported aboard Flight No. 867[7-22]
... each of the above-described shipments of hazardous materials when the hazardous materials were not prepared for shipment in accordance with 49 C.F.R. Chapter I, Subchapter C. 9. Empire accepted each of the above,-described shipments of hazardous material for transportation aboard an aircraft when it hadnot ensured that each hazardous material was:4

a. Described and certifiedon a shippingpaperprepared in accordance with 49 C.F.R. Part 172 or Subpart C. b. Marked in accordance with 49 C.F.R. Part 172, Subpart D. The Complainant alleged that Empire violated49 C.F.R. §§ 175.3, 175.30(a)(2), 175.30(a)(3), and 175.33(C)(3).3 Empire filed an answer to the complaint inwhich it denied the regulatory allegations.4 See Respondent's Answer and Statement of Affirmative Defenses '(Sept. 16, 2009) ("Answer"). Ahearingwas held in this ma'tter onOctober 26 and 27, 2010 in Portland, Oregon. Inhis written initial decision and

3 Section 175.3 provides that "[al hazardous material that is not prepared for shipment in accordance with this subchaptermay not be offered or accepted for transportation or transported aboard an aircraft." Section 175.30(a)(2) provides that "[nl0 person may accept a hazardous material for transportation aboard an aircraft unless the aircraft operator ensures that the hazardous material is
... (2) [dlescribed and certified on a shipping paperprepared induplicate in accordance,with subpart C of part 172 or as authorized in section 171.11 of this subchapter." Section 175.30(a)(3) provides that "[nlopersonmay accept a hazardous material for transportation aboard an aircraft unless the aircraft operator ensures that the hazardous material is (3) [mlarked
... in accordance with subpart Dof part 172 or as authorized in section 171.11 of this subchapter

...." Section 175.33(c)(3) provides that"[tlhe aircraft operatormust . . . have the information required to be retainedunder
... paragraph [section 175.33(c)l readily accessible at the airport,of departure and the intended airport 'of arrival for the durationof the flight."
4 Empire appeared to admit the allegations set forth at sections II. 1., 2., 3., 4. Empire also admits sections II. 7. and 8. in that it transported hazardous materials (HAZMAT), but denies it acceptedHAZMAT. Empire either denied orprovided. non-responsive answers to the other allegations.5 order, the ALJ found that Empire violated sections 175.3 and 175.30(a)(2) and (3). TheALJ dismissed the section 175.33(c)(3) allegation. He assessed a civil penalty of $12,000. .ptatement of Facts Empire is an air carrier certificatedunder 14 C.F.R. part 119 that provides regional cargo carrying service for Federal Express ("FedEx") pursuant to an agreement. Tr. 168, .C-11 at 1, C-16, Answer at 1. According to RichardMills, Empire's director of quality assurance, Empire carries packages for FedEx to and from hub airports·and rural areas in the United States.Tr. 168. While the aircraft Empire uses for its services to FedEx are ownedby FedEx and display the FedEx logo (Tr. 149-150), Mr. Mills testified that Empire is solely responsible for the operational control of the aircraft (Tr. 186), see also C-16 (FedExAircraft Dry Lease and Service Agreement) at 31-32 ("Federal [Express] and Lessee [i.e., Empire] agree that Lessee is solelyresponsible for the operational control of the aircraft andLessee's operations,as that term is defined in the Federal Aviation Regulations")
. Empire is required to identifywith signage on its aircraft that its flights are operatedby Empire in conformance with6 14 C.F.R. § 119.9(b).5 Tr. 68. Patrick oppenheimer, senior manager for corporate safetyprograms at FedEx, testified that Empire aircraft "are not operatedbyFedEx employees [and]
are not maintainedby FedEx employees." Tr. 150. Empire also has FAA-issuedoperations specifications. C-13. SectionD085-1 consists of a list of aircraft Empire has beenauthorizedby the FAA to operate. C-13, Tr. 101. The two aircraft referenced-in the complaint in this case are lIsted on Empire's operations specifications. Tr. 26, 43, 189, C-14. Empire flight crew members are paidbyEmpire, wear Empire uniforms during the performance of their duties, and are trained byEmpire. Tr. 169-170.


### a. Flight 8678-22 On August 22, 2007, FAA special agents Donald Stiger and Thomas Kenny conducted

# aroutine ramp inspection of Empire at Rogue Valley InternationalAirport, Medford, Oregon ("MFR") Tr. 17, 94, C-l. Agent S-tiger is assigned to the FAA's

5Section 119.9(b) provides, inpart: No personmay operate an aircraft under part 121 or part 135 of this chapterunless the name of the certificate holder who is operating the aircraft, or the air carrier or operating certificate number of the certificate holder who is operating the aircraft, is legibly displayed on the aircraft and is clearlyvisible and readable from the outside of the aircraft to a person standing on the ground at any time except during flight time. 14 C.F.R. § 11.9.(b).7 

### Portland, OregonHazardous Materials ("HAZMAT") Inspection Detachment. C-1. Agent Kenny is the manager of theHAZMAT SecurityFieldOffice inRenton, Washington. Tr. 92-93. As part of the inspection, Agents Stiger and Kenny requested FedExpersonnel at the MFR FedEx stationto produce an InboundDangerous Goods Alert ("InboundDG Alert") for Empire flights arriving atMFR. Tr. 19, 21, C-2. FedExpersonnel provided the agents an Inbound DGAlert for Empire flight 8678-22, which departed from Portland toMFR. Tr. 21-22, 45,. C-2. The InboundDG Alert for flight 8678-22 indicated that HAZMAT was onboard the aircraft located in "position 1," or the main deck. C-2 at 1, Tr. 23. The HAZMAT included corrosives, a class 8 HAZMAT. C-2 at 1. The InboundDG Alert also indicated thatno HAZMAT was located inthe pods of the aircraft." C-2 at 2, Tr. 24. Agent Stiger saw civil aircraft N778FE, a Cessna Model 208B, operatedas flight 8678-22, arrive at MFR and observed the freight offloading operation from the aircraft. Tr. 26-27. He noted that N778FE was listedon Empire's operations specifications. Tr. 26, C-14. Agent Stiger observed the offloading of corrosives from pod C. Tr. 26-27, C-4.

" Pods are storage spaces located inthe lower cargoportion of the Cessna 208 below the main deck. Tr. 27.8 Mr. Mills statedthatbefore flight 8678-22's departure from Portland, the pilot for the flight requested of FedEx's dangerous goods.specialist that the corrosives be relocated from the main deck to the pod. Tr. 179. Mr. Mills added that the DG specialist made a "penandpaper change of theAuto DG, which

. inour 

### [i.e., Empire's] manual at that time, it was an acceptable practice." Tr. 179. Specifically, the Feeder Aircraft Load Control Sheet for flight 8678-22 was marked to show that the corrosives hadbeen loaded intopod C. C-3, Tr
. .28-29. Mr. Mills added that the "expectationwas that, after that [change] hadbeenmade, he [theDG specialist] would go back
. to the computer and change the computer to reflect

. how the aircraft had actuallybeen loaded. Tr. 179, 192-193. The computer change was not made in this case. Tr. 179-180. Empire relies on FedEx's electronic manifesting system, which is referred to as the "AutoDG." Tr. 80-81, 139-14l. Mr. Oppenheimer statedthat FedEx employees use AutoDG to enter information relating to HAZMAT shipments. Tr. 139-142. Mr. Oppenheimer added that FedEx employees shouldupdate the Auto DG everytime a HAZMAT shipment changes conveyances so that emergency responders can have current database access to the information inthe event of an incident or accident. Tr. 143. Mr. Oppenheimer statedthat, to the best of his knowledge, only9 

### FedEx employees have access to the Auto DG. Tr. 146. Only FedEx employees trained in the use of the Auto DG canupdate th.e Auto DG database. Tr. 146-147. Empire employees donot have direct access to the AutoDG system to correctAuto DG discrepancies. Tr. 149, 175. While handwriting on FeederAircraft**~oad** 

### Control Sheet showed that the corrosives were inpod C (C-3 

### at 1, Tr. 28-29),
anentry inthe FedEx electronic manifesting system to reflect the repositioning of this material was not accomplished. Tr. 32, C-3 

### at 2). The actual location of the corrosives aboard flight 8678-22, therefore, was not readily available at the intended airport of arrival, i.e., 

### MFR. Tr. 32. 

### b. Flight 8677-22 During theirAugust 22, 2007 ramp inspection of Empire at MFR, Agents Stigerand Kenny observedthe arrival and offloading of Empire flight 8677-22, a flight from Portland toMFR. Tr. 41, 47-48. Empire used civil aircraftN940FE ("N940FE"), a Cessna 208, to conduct thi's flight. Tr. 42. N940FE is listed
on Empire's operations specifications. Tr. 43,·C-14. 

### Agent Stiger's reviewof the InboundDG Alert for flight 8677-22 indicated that the aircraft carriedno HAZMAT. Tr. 41-2, C-5. AFedEx tracking document indicated that flight 8677-22 carried two shipments associa·ted with FedEx trackingnumbers 731703530562 and 731703530530. Tr. 45-46. Agent StigerlO 

### observed two fiberboard boxes bearing tracking numbers 731703530562 and 731703530530 being offloaded from flight 8677-22. Tr. 49, C-8 at 2. The packages were marked "Consumer CommodityORM-D" onboth sides of eachbox; one such marking was near the shipping label. C-l at l-2, Tr. 49. The two shipments were acceptedbyFedEx fromAstraZeneca in Baltimore, Maryland onAugust 2l, 2007. C-l at l-2. Agent Stiger testifiedthat an "ORM-D" marking indicates that the packages contained "consumer commodity" HAZMAT and was not authorized for shipment by air. Tr. 49, 53. To have been authorized for air transportation the shipment was required to have beenmarked "ORM-D-Air." Tr. 49-50. No shippingpapers indicating that HAZMAT was contained inthe two packages accompanied the packages. Tr. 50. The HAZMAT was not recorded
on a notificationto**pilot~in-command.** 

### Tr. 53. The FedExMFR stationmanager openedbothpackages at the agents' request. Tr. 54, 56. The packages contained 24 bottles of Nexiumhand sanitizinggel, which is classifiedas ethanol/alcohol solutions or ethanol, identification number UNll70, hazard class 3, packing group III. Tr. 55-56, 57-58, C-9. This HAZMAT was contained inplastic bottles with
screw caps withno positivemeans over the caps as requiredby 49 C.F.'R. § 

### l73.27. Tr.55. Because of the absence of positive
means overthe caps,the material was prohibited from being11 reclassified as**ORM-D~Air** and, thus, was prohibited from air shipment. Tr. 49-50, 55. BothAgents Stiger and Kenny referencedportions of the Empire General Operations Manual (;'GOM") for HAZMAT. See C-11. The GOM stated that Empire employees are responsible for compliance with all the provisions of the HAZMAT regulations. Tr. 98, C-11 at 8. Non-compliant HAZMAT shipments are required to be rejected and segregated from all other cargo shipments to prevent accidental introduction of the material into the transportation system. Tr. 64-5, 99, C-11 at 12. Under Empire's GOM, pilots are responsible for supervising the loading of HAZMAT aboard Empire aircraft. Tr. 52, 66, 100, C-11 at 41. During the loading, HAZMAT must be separated from other freight
so the crewmember may accomplish the pre-load inspection. Tr. 66, C-11 at 41. ALJ's Initial Decision In dismissing the section 175.33(c)(3) allegation (which relates to flight 8678-22), the ALJ found that "in these circumstances, [Empire] may not be held legally responsible for the fact that a change in the hazmats' locationfailed to be reflected in the downline record." Initial Decision at 4. While the ALJ acknowledged that section 175.33(C)(3) obligated an "operator," such as Empire, to "ensure that data showing the location of hazmats onboard is12 'readilyaccessible' at the operator's destination," he added that 49 C.F.R. § 171.2(f) allows a carrier transporting HAZMAT to reasonablyrely on informationprovidedby an offeror of HAZMAT. Id. Here, according to the ALJ, Empire could have reasonably assumed that FedEx wouldmake the necessary computer entry to ensure that the change in the location of the HAZMAT
was communicated to the intended destination airport. Id. In finding that Empire violated sections 175.3, 175.30(a)(2), and 175(a)(3) (which relates to flight 8677-22), the ALJ concluded that "Empire has a full and independent obligation to complywith the HMRs." Id. at 6. Thejudge found that this obligationis compelledbytheHMRs (citing 49 C.F.R. § 171.1) and Empire's ownGOM. Id. at 6-7. Although the ALJ noted that FedEx employees loaded the HAZMAT in this case, he found that the Empire pilot's duty of ensuring that the packages
were shipped in compliance with the HMRs was "not delegable or transferable." Id. at 7. TheALJ assessed a civil penaltyof $12,000, representing $3,000 for each of the four violations he found in this case, i.e., shippingpaper andmarking violations for two packages. Id. at 11. He found that the lack of shippingpapers for the HAZMAT aboard flight 8677-22 "must be considered a mitigating factor" in that sucha circumstance created the "natural

-- though not excusable

-- [tendency tol relax one's guard and fail13
to look for problems with the same vigilance one might perform otherwise." Id. at 10. ·Issues 1. Whether the ALJ erredinfinding that Empire didnot violate section 175.33(c)(3) of the HMRs. 2. Whether the ALJ erredinreducing the civil penalty requestedby the Complainant. Argument 1. TheALJ erredin finding that Empire didnot violate section 175.33(c)(3) of the HMRs. The ALJ erred in dismissing the section 175.33(c)(3) violation against Empire. The ALJ correctly found that Empire "is responsible as the operator for compliance with the HMRs," and that "this responsibility is so critical
. . . that it may not be delegated." Initial Decision at 4. The ALJ, however, erred in finding that section 171.2(f) served to**e~onerate** Empire from a violationof section 175.33(c)'(3). Any suggestion that Empire couldrely on FedEx to fulfill the requirements of section 175.33(c)(3) is meritless. In short, Empire violated

.section 175.33(c)(3) and shouldbe held accountable for the

violation. A. Empire is independentlyresponsible for complying with section 175.33(c)(3). The HMRs plainly state that aircraft operators
-- .such as Empire

-- have an independent and non-delegable responsibility to comply with the requirements of the HMRs, including14 section 175.33(C). Part 175 of the HMRs sets forth requirements that apply to the "offering, acceptance, and transportation of hazardous materials in commerce by aircraft to, from, or within the united States
. 

### " 49 C.F.R. § 175.1(b). These requirements apply to "anypersonwhoperforms, attempts to perform, or is required to perform any function subject to [49 C.F.R. subchapter C

-- Hazardous Materials Regulationsl including
... [alir carriers
... and their flight and non-flight employees, agents, and contract personnel
. . . 

### " 49 C.F.R. § 175.1(b)(1). Among other requirements inHMR part 175, Empire, as an aircraft operator/air carrier, is required to complywith section 175.33(c)(3).7 section 175.33(c)(3) specifies that "[tlhe aircraft operatormust [hlave the information required to be retainedunder this paragraph 

### [i.e., shipping papers and notifications of pilot-in-commandl accessible at

. . . the intended airport of arrival for the duration of the flight leg." 49 C.F.R. § 175.33(C)(3). The notification to the pilot-in-commandmust include, among other things, "accurate" informationregarding the location of HAZMAT aboard an aircraft. 49 C.F.R. § 175.33(a)(4}. The use of the word "must" in
7The word "Operator" is definedby the HMRs as "a personwho controls the use of an aircraft, vessel, orvehicle." 49 C.F.R. § 171.8. Empire does not dispute that it had operational control over all its aircraft, Tr. 186, including that used for flight 8678-22.15 section 175.33{C)(3) underscores that an aircraft operator's compliance with the requirements of that section ismandatory. Accordingly, while Empire may opt to arrange for another entity to perform the functions requiredby section 175.33{c)(3) on its behalf, the regulation, by its terms, ultimately holds Empire

-- the aircraft operator
-- responsible for compliance. Empire's independent obligation as a carrier of HAZMAT by aircraft to complywith the HMRs is reiteratedby its GOM. Empire's GOM provides that its employees "are responsible for compliance with all provisions of the Hazardous Material Regulations
. . C-l1 at 8. Among otherHMR provisions withwhichEmpire employees must comply is one shadowing the requirements of section 175.33{c){3): A copyof each notification of pilot-in-commandmust be retained at the airport of departure or the operator's principalplace of business for 90 days. This information must be readily accessible at the airport of departure and the intendedairport of arrival for the duration of the flight leg C-ll at 20. As Mr. Mills testified, Empire employees are required to complywith the Empire GOM. Tr. 187. Thus, by the terms of its own GOM, Empire retainedultimate responsibility for complying with section 175.33{c)(3). Case law regarding air carrier responsibility supports a conclusion that an air carrier's responsibilities requiredby safety regulations cannot be delegated. The seminal case in16 this regard is In theMatter ofAlaskaAirlines, FAA Order No. 2004 (Oct. 4, 2004). InAlaskaAirlines, the FAA Decisionmaker concluded that AlaskaAirlines ("Alaska") was responsible for faultymaintenance performed onAlaska aircraft by its contractors notwithstanding whetherAlaska.knew or, through the exercise of reasonable diligence, couldhave known of the violation. The Decisionmaker observed that a regulation pivotal to the resolution of the case -- 14 C.F.R. § 121.363 stated that air carriers, like Alaska, were "primarily responsible for
. the airworthiness of its aircraft" and could not avoid this responsibility though contractual agreements with other entities for the performance of maintenance. 14 C.F.R. § 121.363(a) and (b). The Decisionmaker concluded: "[t]hus, the regulation does not allow air carriers to evade theirprimaryresponsibilities bydelegating their maintenance obligations to thirdparties." FAA OrderNo. 2004 at 6. 8

8 See aiso In theMatter ofEmpireAirlines, FAA Order No
.. 2000-13 (Jun. 8, 2000) ("[a]llowing an air carrier to delegate its primary responsibility for the safety of its aircraft would not serve the public interest"); In the Matter of WestAir CommuterAirlines, FAA OrderNo. 96-16 at 6-7 (May 3, 1996) ("[f]t has also been stated inprevious cases that air carriers have a statutorymandate toperform their services with the highest possible standard of care, and that an air carrier's .responsibilities are too critical to permit it to transfer its

obligations toanother"); In theMatter ofUSAir, FAA Order No. 92-70 (Dec. 17, 1992) (carrier was responsible for the operation of anunairworthy aircraft causedby the failures of17 The Decisionmaker inAlaskaAirlines further observed that the FAA's governing statute supported her conclusion thatAlaska
was required to complywithsafetyregulations applicable to carriers: The courts and the Administrator.
. have indicated repeatedly inpast cases that an air carrier's duties, which include a statutory duty to exercise the highest possible degree of care, are nori-delegable. The rationale is one of public policy**-~** it is that the duties of common carriers are too important to permit them to transfer them to someone else. FAA Order No. 2004 at 6 (citations omitted). The FAA's governing statute refers to the duty of an air carrier to provide service with the highest possible degree of safety in the public interest. See 49 U.S.C. § 44701(d)(1)(A) (promulgation of regulations and standards); 49 U.S.C. § 44702 (issuance of certificates). That the HAZMAT statute does.not contain a similarprovisionfor air carriers does not mean that air carriers are relieved from their duty to act with the highest possible degree of care when conducting activities related to the transportation of HAZMAT. In enacting the enabling statute regarding civil aviation, Congress recognized the heightened importance of air carrier responsibilities as a matter of public policy. In the civil Aeronautics Act of 1938, Congress empowered the newly created

its contract pushback operatorbe·cause the carrier's duty to complywith safetyregulations is non-delegable)
.18 CivilAeronautics Authority (CAA) to promote aviation safetyby, among other things, prescribingregulations necessary to provide for safety in air commerce. See CivilAeronautics Act (CA Act) of 1938 § 601(a)(6). In so doing, Congress required the CAA to "give full consideration to the duty resting upon air carriers to perform their services with the highest possible degree of safety in the public interest
. 

### " Id. at § 601(b). Congress adopted this provision in the Federal AviationAct of 1958 (FAAct) at 49 U.S.C. §§ 601(a) and (b). It also retained this requirement in the subsequent amendment (49 U.S.C. §§ 1421(a) and (b)) and recodification (49 U.S.C. §§ 44701(a)(5) and (d)(1)(A) (1994)) of Title 49. Congressional recognition that air carriers are to perform duties "with the highest possible degree of safety in the public interest" is a long-standingpolicy- and common law-based concept.that is not limited to air carrier activities conductedpursuant to the FAA's governing statute. Rather, given the broad underpinnings of the principal, it applies to the carriage of HAZMAT in air
commerce as well. WhileAlaskaAirlines, and the related cases cited in footnote 8 of this brief, ultimately require carriers to comply with regulations that ensure the airworthiness of the aircraft theyoperate, the principle articulatedin these cases cannot fairlybe limited to a maintenance context. The point of the19 

### AlaskaAirlines line of cases is that an air carrierhas a responsibility to complywith regulations intended to ensure safe commercial transportationby aircraft and that this responsibility is so important that it cannotbe delegated. Section 175.33(c)(3), too, is intended to advance safety in the aviation context bygiving emergencyresponders sufficient information to address HAZMAT-related emergencies aboard an aircraft at or near the destination airport. In 2003, the DOT published a final rule that set forth the safetybasis for section 175.33(c)(3), highlighting the unique challenges facing emergency responders in- the aviation context. The DOT stated: [E]mergencies involving hazardous materials transported by aircraftprovide difficulties- to emergency responders not usually encountered in othermodes of transportation. The flight crewmay not have time or otherwise be able to provide information-during or immediately after the emergency. An aircraft involvedmaybe damaged to such an extent the information cannot be retrieved from it. 68 Fed. Reg. 14341, 14343 (Mar. 25, 2003). Agent Stiger explained that having informationregarding the location of HAZMAT aboard aircraft readily available at the intended arrival airport is important to emergency responders, should there be any HAZMAT-related incident at ornear the arrival airport. Tr. 33. He stated that emergencyresponders should "have complete, and accurate, and timely information of
. not only whatwas
-onboard
. . [but] where it's on board, and any20 additional information that is needed to . . respond to an emergency." Tr. 33. Agent Stiger, who hadbeen a pilot, stated that in the event of an emergency, including an aircraft accident, a pilot would likelybe more focused on freeing himself from the aircraft than gatheringpaperwork indicating the location of HAZMAT. Tr. 14, 34-35. Furtherhighlighting the safety-significance of Section 175.33(c)(3) is the fact that that regulationwas a result of a recommendationby the National Transportation Safety Board ("NTSB"). The NTSB recommend that the DOT: [rJequire
. that air carriers transportinghazardous materials have the means, 24 hours per day, to quickly retrieve andprovide consolidated specific information about the 

### identity. ., hazard class, quantity, number of packages, and location of all hazardous material on an airplane ina timelymanner to emergency responders. 68 Fed. Reg. at 14341. According to Agent Stiger, the NTSB recommendation arose from concerns that the information required by section 175.33(c)(3) was not timely available to emergency response personnel following four FedEx aircraft incidents. Tr. 33-34. The publicpolicybehindpreventing an air carrier from delegating the responsibility for compliance with section 175;33(c)(3) is abundantly clear. Simplyput, an air carrier's responsibility is too important to be transferred to another. While Empire may elect to enter into an agreement with21 FedEx under which FedExperforms the functions requiredby section 175.33(C)(3) on Empire's behalf, Empire shouldnot be allowed to barter away its responsibility to complywith this safetyrequirement. If this were allowed, an air carrier could avoid regulatory compliance simply through contractual agreements. See, e.g., AlaskaAirlines, FAA Order 2004-8 ("[aJ holding that lack of knowledge alone exempts air carriers from responsibility couldprovide air carriers with incentive to look the other way and avoid all knowledge of maintenance improprieties.
.")
. In sum, the plain language of

-- as well as the safety and public policybases for

-- section 175.33(C)(3) establishes that air carriers that choose to carryHAZMAT in air commerce have an independent obligation to fully complywith the terms of that section. B. TheALJmisapplied section 171.2(f) in dismissing the section 175.33(c) violation against Empire. The ALJ's reliance on section 171.2(f) in finding that Empire was absolved from the requirements of section 175.33(c) is misplaced. section 171.2(f) provides: No personmay transport a hazardous material incommerce unless the hazardous material is transported inaccordance with applicable requirements of this subchapter Each carrierwho transports a hazardous material in commercemayrelyon informationprovidedby the offeror

### of the hazardousmaterial ora prior carrier, unless the carrierknows or, 

### a reasonableperson, acting in the circumstances and exercisingreasonable care, wouldhave22 knowledge that the informationprovided by the offeror or prior carrier is incorrect. 49 C.F.R. § 171.2(f) (emphasis added). The ALJ construed "a paper copy reflecting the locational change [of the HAZMATJ" as ·"informationprovidedby.the offeror or a prior carrier" (Initial Decision at 4). Section 171.2(f) is not amenable to the ALJ's expansive application. In 2005, the DOT published the final rule associatedwith section 171.2(f). The final rule amended the HMRs to add a definition for a "personwho offers" or an "offeror" to codify longstanding interpretations on the applicability of those regulations. 70 Fed. Reg. 43638 (Jul. 28 2005). One aspect of the final rule was to define the responsibilities of offerors of HAZMAT, i.e., those that performpre-transportationfunctions as defined at 49 C.F.R § 171.8. 70 Fed. Reg. at 43638. The final rule spec.ified that offerors are responsible for the specific functions they are required to perform. 70 Fed. Reg. 43640 ("[wJe are adopting in § 171.2 the language proposedin.the NPRM to clarify that each offeror is responsible only for the specificpre-transportation functions itperforms oris required to perform") .9

9 More particularly the final rule provides: [E]achperson is liablefor its own violations that may involve noncompliance in: (1) Preparing a shipment of hazardous material for transportation
...; (2) accepting23 Notwithstanding its delineation of responsibilities of offerors, the DOT stated that it was "clarifying that each offeror or carriermayrely on informationprovidedby a previous offeror or carrierunless the offeror or carrierknows or, a reasonable person acting inthe circumstances and exercising reasonable care, wouldhave knowledge that the informationprovided is correct.n 70 Fed. Reg. at 43638. Versions of this provision were ultimatelypublishedat 49 C.F.R. § 171.2(b) (regardingHAZMAT offerors) and 49 C.F.R. § 171.2 (f) (regarding HAZMAT transporters). The regulatoryhistory reveals that section 171.2(f) is inapplicable in this casebecause the requirement of section 175.33(c)(3) that Empire have accurate information regarding the location of HAZMAT aboard the aircraft it was operating readily accessible at MFR was Empire's individual and non-delegable responsibility. Accordingly, section 171.2(f) cannot serve to exonerate Empire for its reliance on inaccurate informationpurportedly generatedby FedEx (i.e., the Feeder Aircraft Load Control Sheet) regarding the location of HAZMAT aboard Empire flight 8678-22.

for transportation a shipment of hazardous material that does not conform to the requirements in the HMR; or (3) failing to handle or transport a shipment of hazardous material in the manner required by the HMR. 70 Fed. Reg. 43640 (emphasis added).24 Moreover, theALJ misunderstoodwhat actuallyconstituted the "information" upon which the Empire pilot relied. Empire, through its pilot, didnot, as the

### ALJ found, relyon-"apaper copy reflecting the Iocational change [of the HAZMATJ" as "informationprovidedby the offeror
. . . or a prior carrier" (Initial Decision at 4) as provided in section 171.2(f). Rather, according to Mr. Mills, Empire, through its pilot, relied on the undocumented "expectation" that FedExwould enter that information in its Auto DG electronicmanifesting system. Tr. 179. The Empire pilot's expectation followed the request by the pilot of flight 8677-22 to the FedExDG specialist in Portland to relocate the corrosives from the main deck to pod C and the DG specialist's relocation of the corrosives _to pod C. Tr.-179. The pilot's "expectation" is not the type of written "information" contemplatedby section 171.2(f). As stated in the regulatoryhistory to the final rule for section 171.2(f), the information contemplatedby section 171.2(b) J'.nd (f) is in the nature of that related to, for example, the packaging, markings, labels, or shippingpapers requiredby the HMR. See, d 10 e.g., 70 Fe
. Reg. 43638.

10 In the regulatoryhistory to section 171.2(f), the DOT stated that where-a carrier accepting HAZMAT knows a package does not document information in compliance with the HMRs, itmust reject the package or ensure the correction of discrepancies.
_ Specifically, the DOT stated:25
In any event, Empire had reason to know that the location of the corrosives was not accuratelydocumented, which should have led to further investigationby Empire personnel consistent with its regulatory obligations. Exhibit C-3, which included the.FeederAircraft Load Control Sheet andAircraftDG Position Summary (C-3 at 1-2), was usedbyEmpire tomeet the pilot notificationrequirement of the HMRs. Tr. 35-36, C-11 at 1. Accordingly, Empire, through the pilot of flight 8678-22, knew
or should have know about the discrepancybetween the Feeder Aircraft LoadControl Sheet (which indicated the corrosives were inpod-C ) and the Aircraft DG Position Summary (which indicated that the corrosives were inposition I). Rather than having the "expectation" (Tr. 179) that FedEx would enter the change in its electronic manifesting system, Empirepersonnel should have taken appropriate measures to ensure that the discrepancy was
more than, as Mr. Mills described, "apen andpaper change."

Note that a carrier that knows that information accompanying a hazardous material shipment is incorrect may not accept the shipment for transportationunless anduntil the informationhas been corrected and any discrepancies involving this shipment have beenresolved. Indeed, a carrier that knowS that a hazardous materials shipment do.es

.not complywith the HMR in any respect (e.g., packaging,

markings, labels, shippingpaper) may not accept the shipment for transportationunless anduntil the problems are corrected and any discrepancies resolved. 70 Fed. Reg. at·43639.26 Tr. 179. Stated.differently, Empire shouldhave taken the action necessary to ensure compliance with section 175.33(c)(3). The ALJ, accordingly, misapplied section 171.2(f) in dismissing the section 175.33(c) violation against Empire. 

## c. Empire violated section 175.33(c)(3) and its efforts to place the blame on FedEx for the violation are meritless. The Complainant has provenby a preponderance of the evidence that Empire violated section 175.33(c)(3). Presumably pursuant to a business decision, Empire elected to use the FedEx Auto DG system tomeet the requirements prescribedby section 175.33(C)(3). Tr. 80-81. FedEx, in turn, used its Auto DG system tomake readily available information regarding the location ofHAZMAT aboard aircraft to intended airports of arrival. C-11 at 1, Tr. 141. In this case, the pilot of flight 8678-22 requested the FedExDG specialist inPortland to relocate corrosives from the main deck to pod C. Tr. 179. The DG specialist complied and the HAZMAT was relocated to the pod. Tr. 179. The DG specialist, according to Mr. Mills, made a·"pen and paper change of the Auto DG." Tr. 179. In actuality, the DG Specialist completed the Feeder Aircraft Load Control Sheet indicating that the corrosives were inpod C. C-3 at 1. The Auto DG documentation, whichwas attached to the FeederAircraft Load Control Sheet, still showed the corrosives to be inposition 1, or the main deck. C-3 at 2,27 Tr. 36. The Empire pilat, according toMr. Mills, had the "expectatian
. . . that, after that [change] hadbeenmade, ·he [the DG specialist] wouldgo back
. . . to the camputer and change the computer to reflect
. . . how the aircraft had actuallybeen loaded. Tr. 179, 192-193. The camputer change, however, was notmade. Tr. 32, 179-180. Accordingly, the informatian readily available at the intendedairpart .of arrival shawed that the carrosives were located in the maindeckwhen theywere actually inpad C. Tr. 36. Since the information regarding the location .of the HAZMAT was not accurate, as required by section 175.33(a)(4), Empire didnat complywith the requirements .of section 175.33(c)(3). Empire presented testimany at the hearing in aneffort to distance itself fram its responsibility to camplywith section 175.33(c)(3) andplace compliance respansibilitywholly
on FedEx.11 Mr. Mills testified that FedEx owns the aircraft that Empire operates far the purpose praviding regianal cargo carrying service ta FedEx. Tr. 168. Messrs. Oppenheimer and Mills testified that only FedEx employees have access to Auta DG. Tr. 146, 175. Only FedExemployees trained inthe use 11 To the extent that Empire claims it didnot violate section 175.33·(c)(3) because it relied on FedEx to perform the functions requiredby that section, and .only FedEx was·required to perform thase functions, Empire fashians a pasition in the nature of an affirmative defense. Apartywho has asserted an affirmative defense has the burden of praving the affirmative defense. 14 C.F.R. § 13.224(c).28 of Auto 

### DG canupdate the Auto 

### DG system. Tr. 146-147. Empire employees do not have direct access to the Auto 

### DG system to correctAuto 

### DG discrepancies. Tr. 149, 175. Rather, according to Mr. Mills, the Empire pilot for flight 8677-22 expected FedEx personnel tomake the change in FedEx's electronic manifesting system and, apparently,
.had no reason to believe that this would not be done. Tr. 179, 

### seealso Post-Hearing Brief of Respondent at 10. Empire's reliance on FedEx's performance of functions to suggest that it didnot know it hadnot complied with section 175.33(c)(3) misses the obvious point that Empire

-- the aircraft operator
-- was independentlyresponsible for having accurate information relating to the location of HAZMAT readily available at the intended airport of arrival pursuant to section 175.33(c)(3)

## .'2 While Empire claims to fall within FedEx's corporate shadow, Empire's status as·a carrier independent from FedEx is

12 Mr. Mills testified, without support, that a "pen and paper change" to the Auto 

### DG hadbeen an "acceptable practiGe" at the time of the inspection. Tr. 179. As to whether a FedEx employee was permitted at the time to make· changes in· handwriting to the Auto 

### DG is not relevant in the analysis of ·this case. Empire is required to ensure that any handwritten changes relating to the location of HAZMAT aboard aircraft are ultimatelymade readily available at the intended airport of arrival consistent with the requirements of section 175.33(c)(3)
.29 amply evident from the record. The following facts are undisputed:

• Empire is an air carrier certificatedunder 14 C.F.R. part 119 (Tr. 168, C-11 at 1, Answer at 1);

• Empire is solely responsible for the operational control of its aircraft (Tr. 186);

• Empire has FAA-issued operation specifications (C-13), andboth aircraft involve in the flights in this case are on Empire's operations specifications (Tr. 26, 43, 189, C-14);
• Under the terms of the FedExAircraft DryLease and Service Agreement, "Federal [Express] and
. . . [Empire] agree that
. . . [Empire] is solely responsible for the operational control of the aircraft and
... [Empire's] operations, as that term is defined in the Federal Aviation Regulations" (C-16 at 31-32);
• Under the terms of the lease agreement, FedEx is not liable to Empire for acts.or omissions of Empire's agents or employees (C-16 at 16);

• Empire is required to identifywith signage on its aircraft that its flights are operatedby Empire in conformance with 14 C.F.R. § 119.9(b) (Tr. 68);

• Empire aircraft are neither operatednor maintainedby FedEx (Tr. 150);

• Empire flight crewmembers are paidby Empire, wear Empire uniforms during the performance of their duties, and are trained byEmpire (Tr. 169-170). The ALJ erroneouslyaccepted the concept that Empire reasonably expected that FedEx would fulfill Empire's duty to complywith section 175.33(c)(3). In this regard, the ALJ stated that "[t]he HMRs
. .. . do not charge the operator with a30 duty to investigate and the concomitant knowledge of what an investigationwould have revealed." Initial Decision at 4. He added that "[t]he risk of non-compliance was small, and the inconvenience to Empire comparatively great." Id. It is true that the HMRs do not specificallyrequire an aircraft operator to investigate whether anentityupon which the operator relies has performed the operator's requirements set forth at section 175.33(c)(3). Section 175.33(c)(3), however, required Empire's compliance; the method of compliance chosenby Empire
was up to Empire. 13 Whether complianceproved difficult (or costly),for'Empire is not relevant. 14 Empire had an opportunity to ensure compliance with section 175.33(c)(3) but did not.

13 It is worthnoting that Empire has takenmeasures to better ensure that it complies with the section 175.33(c)(3) requirement. According to Mr. Mills, Empire now requires FedEx to present its pilots computer generated documentation showing that any HAZMAT location change had been entered into the Auto DG system. Tr. 179-180. The ALJ found that "[t]he fact .',that Empire has since implemented a method of ensuring that this situation 

### [i.e., the failure to comply with section 175.33(a)(3)] is not repeated should not suggest that the carrierwas duty-bound to employ the method in the first place." Initial Decision at 5. Whether Empire was "duty-bound" to complywith anyparticular corrective action is not at issue in this case, however. The issue is whether Empire was required to comply with section 175.33(a)(1) but failed to do so.
14 It is also debatable whether'Empire's inconvenience wouldhave been,"comparatively great." It does not appear to have been difficult for Empire to have taken the steps necessary to ensure that FedExput the information from the FeederAircraft Load Control Sheet in its computer system so'that the information wouldbe available atMFR.31 2. TheALJ erred inreducing the civil penaltyrequested by the Complainant. The ALJ erred inreducing the $20,000 civil penalty sought by the Complainant to $12,000. The ALJ's basis for reducing the civil penalty

-- the lack of shippingpapers for the HAZMAT aboard flight 8677-22

-- is insufficient. In determining the sanction amount in FAA enforcement actions involving the HMRs, the governing statute requires .considerationof: (1) the nature, circumstances, extent, and gravityof the·violations; (2) with respect to the violator, the degree of culpability, anyhistory of prior violations, the ability to pay, andany effect on the ability to continue to do business; and (3) othermatters that justice requires. 49 U.S.C. § 5123(a). See also 14 C.F.R. § 1316(a)(4) (listing the
same factors). ·Indetermining the appropriate penalty, it is improper to take the mathematical, formulaic approachof multiplying the number of violations by a set dollaramount. See In the Matter ofInterstate Chemical Co., Inc., FAA Order No. 2002 (Dec. 2, 2002)

## .'5 Here, the Complainant's civil penaltyrequest was based on HMR violations occurring in connection with two separate flights. The Complainant consideredEmpire's HMR violations within the context of certain sanction assessment factor

15 Since the violations in this case tookplace inAugust 2007, FAA Order 2150.3Agoverned the sanction determination.32 questi9ns. These questions addressed factors involving the nature, circumstances, extent, and gravityof the violations, Empire's degree of culpability, and Empire's violationhistory. See, e.g., Tr. 70-77, C-12 (64 Fed. Reg. 19443, 19445). Following its analysis of assessment factors, the Complainant applied the facts of this case to the sanction matrix for air carriers. Empire is a Group II air carrier. Tr. 74, C-12 (64 Fed. Reg. at 19448). Concerning flight 8677-22, Empire committed four separate violations: two acceptances of HAZMAT without shippingpapers (inviolation of section 175.30(a)(2)) and two acceptances of HAZMAT without proper markings (inviolation of section 175.30 (a)'(3)). The sanctionrange for Group II carriers for section 175.30(a)(1)-(4) violations is $5,000 to $27,500 perviolation. Tr. 74, C-12 (64 Fed. Reg. at 19448)'. Concerning flight 8678-22, Empire committed one violation when it failed to have accurate information about the location of HAZMAT aboard the aircraft readily accessible at MFR (inviolationof section 175.33(c)(3)). This constitutes one of the ·other part 175 violations" not specified in the matrix. Tr. 74-75. The sanctionrange for Group II carriers for ·otherpart 175 violations" $5,000 to $15,000 per violation. Tr. 75, C-12 (64 Fed. Reg. at 19448). Accordingly, the sanction range for all Empire's violations in this case is from $25,000 to $125,000.33 The Complainant's request for a $20,000 civil penalty falls below the lowest end of the range set forth in the sanction ,. matrix. A further reduction given the facts of·this case wouldbe unreasonable. Agent Stiger testified that the boxes containing the Nexiumhand sanitizing gel were marked "Consumer Commodity ORM-D" on 

### both sides of eachbox; one suchmarkingwas near the shipping label. C-1 at 1-2, Tr. 49. The ALJ foundAgent Stiger's testimony "credible." Initial Decision at· 2. The ORM-D marking indicates that the packages contained "consumer commodity" HAZMAT andwas not authorized for shipment by air. Tr. 49, 53. Empire's GOM for HAZMAT provides that Empire crewmembers are responsible for compliance with all the provisions of the HAZMAT regulations regarding the acceptance of HAZMAT. Tr. 98, C-11 at 8. While FedExmay have performed the loading of HAZMAT (C-11 at 41), the GOM provides that Empire pilots are responsible for supervising the loading of HAZMAT aboard aircraft operatedby Empire. Tr. 52, 66, 100, C-11 at 41. The markings on each end of eachbox were sufficient to communicate to an Empire pilot charged with overseeingthe loading of HAZMAT aboard an aircraft he was to pilot that the shipments at issue containedHAZMAT and were not tobe34 transported by air.16 HadEmpire exercisedreasonable care it, at minimum, wouldhave observed the ORM-D markings and inquired whether the shipments contained HAZMAT. Giventhe objective indicia of HAZMAT displayed on the shipments which shouldhave been spottedbyan Empire employee, notwithstanding the absence of shippingpapers, theALJ erred in further reducing a civil penaltythat the Complainant had already calculatedbasedon the totality of the circumstances. In sum, the Complainant's request for a civilpenalty of $20,000 for Empire's violations of sections 175.3, 175.30(a)(2), 175.30(a)(3), and 175.33(c)(3) should not be subject to future reduction. Conclusion The ALJ erred in dismissing the section 175.333(c)(3) allegation against Empire. The ALJ also erred inreducing the $20,000 civilpenalty sought by the Complainant to $12,000. We, therefore, request that the Decisionmakerreverse the ALJ's dismissal of the section 175.33(C)(3) violation and the civil penaltyreduction. We request that the Decisionmaker find

16 The ORM-D marking indicates that the packages contained "consumer commodity" HAZMAT and was not authorized f·or shipment by air. Tr. 49, 53. To have been authorized for air transportation the shipment was required to be marked ORM-D-Air. Tr. 49-50.35 that Empire violated section 175.33(c)(3) and assess a civil penalty in the amount of $20,000. Respectfully submitted, Peter J. Lynch Assistant Chief Counsel



### By: for Enforcement, AGC-30Q

Tel: (202) 267-8198 Fax: (202) 267-5106 Dated: June 22, 201136 Certificate of Service I hereby certify that on this date I have placed in the U.S. mail, postage prepaid, certifiedreturn-receipt, a copyof the Complainant's Appeal Brief in the case of In theMatter of EmpireAirlines, Inc., FAA Docket No. CP09NM0009, addressed to: Glen P. Wicks, Esq. Roncervert D. Almond, Esq. The wicks Group, PLLC 1215 17th street, NW SumnerAnnex, Fourth Floor Washington, DC 20036 In addition, I hereby certifythat'on this date I have placed in the U.S. mail, postage prepaid, certified return-receipt, the original and two copies of the foregoing document to: Federal AviationAdministration 600 Independence Avenue, SW Wilbur Wright Building

- Suite 2W1000 Washington; D.C. 20591 Attn: Appellate Docket Clerk, AGC-430

Dated: