U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

WASHINGTON, D.C. Federal Aviation Administration, Complainant, FAA DocketNo. CP10GL0212 v. DMS No. FAA-2013-0620 National Power Corporation, 

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The Honorable Richard C. Goodwin Respondent. RESPONDENT'S REPLY BRIEF Respondent, National Power Corporation (NPC), pursuant to 14 C.F.R. §13.233(e), hereby files its Reply Briefto Complainant'sAppeal Briefand 

### in support thereofstates as follows:
A. The FAAfirst argues thatthe ALJ erred withrespect to his decisionthat the Respondent did not violate 49 C.F.R. §173.185(f). The FAA states that the ALJ referred to the revised text ofthat section number which was revised in 2014, not to the text ofthat section number that was 

### in effect at the time the alleged violation occurred. It appears to NPCthat the govermnent is correct 

### in its assertion thatthe ALJ did not consider this regulation as it was atthe time ofthe alleged violation.
NPC submits that the resolution ofthis issue would be best done by the ALJ who hadthe opportunityto hearthe evidence andjudge the credibility ofthe witnesses. Pursuant to 49 C.F.R. §13.2330) "The FAA decisionmaker may ... remand the case for any proceedings that the FAA 1decisionmaker determines maybe necessary." NPC therefore urges the Decisionmaker to remand the case to the ALJ to modify his opinion as necessary.
B. The ALJ Was Correct inReducing the Penalty.
The FAA's second argument is thatthe ALJ erred inreducing the civil penalty from $66,000 to $12,000. (NPC contends inits Appeal Briefthat it should have been reduced even further.)
"b. General Sanction Guidance. Multiple violations ordinarilyresult inhigh sanction amounts. Such sanction amounts ordinarily are not determined by simply adding up the individual penalties for multiple violations set forth inthe table, however. Simply adding up the individual penalties for each violation could result in compounding a sanction in a disproportionatelyharsh manner for the conduct involved." FAA Order 2150.3B Chap. 7 6.b.
The order further provides that:
"c. Single Act ofNoncompliance Resulting in Multiple Violations. When a single instance ofnoncompliance results inmultiple violations ofgeneral and specific regulations involvingthe same or similar conduct, the FAA ordinarily does not compound the sanction to reflect the amount ofsanction recommended in the table for eachregulatory violation. In calculating the amount ofsanction for multiple violations, FAA enforcement personnel consider the totality ofcircumstances relating to the multiple violations, including the alleged violator's 2degree ofculpability, and whetherthe alleged violator had taken steps, although unsuccessful, to preventthe violations." Thus, the strict application of49 U.S.C. §5123(a), as the government urges, is mollified bythe application ofFAA Order 2150.3B Chap. 7 6.b. and c. The pattern ofthe alleged 11 shipments was uniform based onthe Respondent's good-faithbeliefit was incompliance withthe law and regulations. NPC's argument for further reduction ofthe penalty is in its Appeal Brief.
C. The FAA is Wrong in its Position that the Batteries WereNot Tested.
Atpage 105 ofthe transcript the NPC's witness testified as to the issue ofwhether the batteries shippedwere tested: 

### Q Okay. Now, was this particular 20 battery pack, the SM206 ever tested? 21 A Yes. 22 

### Q Okay. And what kind of tests did 

### Page 106 1 it undergo? 2 A It went through UL's safety 3 testing, UL2054 to be exact. And, but 4 eventually the UN38.3 batteries, battery of 3

### 5 tests. 6 

### Q Okay. Now, is that, are there 7 other battery packs that you ship that are 8 similar to this one? 9 A I, absolutely. 10 

### Q Okay. And would that be, if I, 11 Your Honor, if I may introduce for 12 demonstrative purposes, I'm just going to show 13 you Exhibit E, would this be one of those 14 battery of packs? 15 (Petitioner's Exhibit P-E was 16 marked for identification.) 17 A Yes, it is. 18 

### Q Okay. Would you describe that? 19 A Sure, it's our model SM201-6. 20 Again, assembled with six 18-650 lithium ion 21 rechargeable cells for a total watt hours of, 22 47 watt hours, it says on the label for me to Page 107 1 do the math, so. Again, assembled with a 2 safety circuit, a common safety circuit to 

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### 3 manage the pack and a fuel gauge all wrapped 4 in UL2054VO plastic. 5 Q Okay. So, in terms of watt hours, 6 it's the same as SM201? 7 A Well, according to the UN38.3, it 8 doesn't differ by more than 20 percent in the 9 reg. But 20 percent or greater change in the 10 anode, cathode or electro light in mass, which 11 equates to actually, watt capacity. No it 12 doesn't, it's similar in construction. Thus, the batteries were "tested" because they did not differ significantly from the batteries that were alreadytested. The definition 

### inthe regulations. They werejust configured differently. The FAA is mistaken that the batteries in question were not tested. Therefore, the government's witness' testimonywas in error when he testified thatthe batteries were untested and were in a higher risk category. (Tr. 63-4:13-3) and Complainant's briefonpage 15.
D. Scienter is Required as an Element ofthe Offense
The government errs in its assertionthat intent is not an element ofany ofthe violations cited 

### in its complaint. (Page 18 ofComplainant's Brief).


### 5The relevant statute states "49 U.S.C. §5123 (a) Penalty.-(!) A person that knowingly violates this chapter ora regulation, order, special permit, or approval issued under this chapter is liable to the United States Government for a civil penalty ofat least $250 butnot more than $50,000 for each violation. A person acts knowingly when- (A) the personhas actual knowledge ofthe facts giving rise to the violation; or (B) a reasonable person acting inthe circumstances and exercising reasonable care would have that knowledge." (Emphasis supplied) During his testimony, Mr. Zawarus, admittedthat National Power did not have the requisite intent to violate the regulations he testified about. Trial Transcript P. 84 

### 21 Q In the course of your 22 investigation, did you make a determination as Page 85 1 to whether the alleged violations were 2 deliberate? 3 A No. It wasn't. A necessary and crucial element ofthe regulation is scienter. Since the FAAdid not establish scienter onthe part ofNPC for the alleged violation ofthe regulations cited, any other evidence 

### 6is moot. Not only did the sole witness for the FAA not establish the scienter element ofthe regulation, he negated this elementbyhis admission above that the alleged violations were not deliberate. 

### In the Matter ofFalcon CrestAviation Supply, Inc. FAA OrderNo. 2007-6 at page 7. The FAA did not meet its burden ofprooffor any ofthe alleged violations.
IfNPC didnotknowingly violate the regulations, it cannot be subject to penalty. Logically, how could a penalty deter future behavior, ifthe behavior inquestion was not intended? Whether or notNPC violated a regulation is not the sole element ofthe offense. It must have violated the regulation and meant to do so. Assuming 

### arguendo thatNPC violated the regulations regarding the shipments identified in the complaint, the FAAhas to prove scienter onNPC'spart, Its witness confessed that there was none. This issue alone would moot any other argumentthatthe government makes since no penalty would be imposed ifa necessary element were not proved.


### E. Conclusion Forthe foregoing reasons, Respondentprays thatthe FAA Decisionmaker sustainthe rulings of the ALJ to the extentnot inconsistent with its positiontaken inits own briefappealing the decision ofthe ALI.

7Respectfully submitted:
National Power Corporation by Martin A. Blumenthal, its Attorney

Martin A. Blumenthal Attorney for the Respondent 1Northfield Plaza#300 Northfield, IL 60093 847-441-2687 marty@blumenthallaw.com **--~**

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### CERTIFICATE 

### OF SERVICE I hereby certifY thatthe foregoing Respondent's Reply Briefwas sent viaFirst-Class Mail to: Attn: Hearing Docket Clerk, AGC-430 Federal Aviation Administration 800 Independence Avenue, S.W. Wilbur Wright Building, Suite 2WIOOO Washington, D.C. 20591

Federal Aviation Administration Office ofthe ChiefCounsel 800 Independence Ave, S.W. Washington D.C. 20591 Attn.: Charles Raley
Date: 13 November 2015 Signed:
MartinA. Blumenthal

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