U.S. DEPARTMENT OF TRANSPORTATION 

OFFICE OF HEARINGS 

WASHINGTON, D.C. 

Federal Aviation Administration, 

Complainant, 

FAA Docket No. CP10GL0212 

v. 

DMS No. FAA-2013-0620 

National Power Corporation, 

! 8 2015 

H lNG DOCI<ET 

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 Brief to Complainant's Appeal Brief and in support thereof states as follows: 

A. The FAA first argues that the ALJ erred with respect to his decision that the Respondent did 

not violate 49 C.F.R. § 173.185(f). The FAA states that the ALJ referred to the revised text of that 

section number which was revised in 2014, not to the text of that section number that was in 

effect at the time the alleged violation occurred. It appears to NPC that the govermnent is correct 

in its assertion that the ALJ did not consider this regulation as it was at the time of the alleged 

violation. 

NPC submits that the resolution of this issue would be best done by the ALJ who had the 

opportunity to hear the evidence and judge the credibility of the witnesses. Pursuant to 49 C.F .R. 

§13.2330) "The FAA decisionmaker may ... remand the case for any proceedings that the FAA 

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decisionmaker determines may be necessary." NPC therefore urges the Decisionmaker to remand 

the case to the ALJ to modify his opinion as necessary. 

B. The ALJ Was Correct in Reducing the Penalty. 

The FAA's second argument is that the ALJ erred in reducing the civil penalty from $66,000 to 

$12,000. (NPC contends in its Appeal Brief that it should have been reduced even further.) 

"b. General Sanction Guidance. Multiple violations ordinarily result in high sanction 

amounts. Such sanction amounts ordinarily are not determined by simply adding up the 

individual penalties for multiple violations set forth in the table, however. Simply adding up the 

individual penalties for each violation could result in compounding a sanction in a 

disproportionately harsh manner for the conduct involved." FAA Order 2150.3B Chap. 7 6.b. 

The order further provides that: 

"c. Single Act of Noncompliance Resulting in Multiple Violations. When a single 

instance of noncompliance results in multiple violations of general and specific regulations 

involving the same or similar conduct, the FAA ordinarily does not compound the sanction to 

reflect the amount of sanction recommended in the table for each regulatory violation. In 

calculating the amount of sanction for multiple violations, FAA enforcement personnel consider 

the totality of circumstances relating to the multiple violations, including the alleged violator's 

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degree of culpability, and whether the alleged violator had taken steps, although unsuccessful, to 

prevent the violations." 

Thus, the strict application of 49 U.S.C. §5123(a), as the government urges, is mollified by the 

application of FAA Order 2150.3B Chap. 7 6.b. and c. The pattern of the alleged 11 shipments 

was uniform based on the Respondent's good-faith belief it was in compliance with the law and 

regulations. NPC's argument for further reduction of the penalty is in its Appeal Brief. 

C. The FAA is Wrong in its Position that the Batteries Were Not Tested. 

At page 105 of the transcript the NPC' s witness testified as to the issue of whether the batteries 

shipped were 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 already tested. The definition in the regulations. They were just configured differently. The 

FAA is mistaken that the batteries in question were not tested. Therefore, the government's 

witness' testimony was in error when he testified that the batteries were untested and were in a 

higher risk category. (Tr. 63-4:13-3) and Complainant's brief on page 15. 

D. Scienter is Required as an Element of the Offense 

The government errs in its assertion that intent is not an element of any of the violations cited in 

its complaint. (Page 18 of Complainant's Brief). 

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The relevant statute states "49 U.S.C. §5123 (a) Penalty.-(!) A person that knowingly violates 

this chapter or a regulation, order, special permit, or approval issued under this chapter is liable 

to the United States Government for a civil penalty of at least $250 but not more than $50,000 

for each violation. A person acts knowingly when-

(A) the person has actual knowledge of the facts giving rise to the violation; or 

(B) a reasonable person acting in the circumstances and exercising reasonable care would have 

that knowledge." (Emphasis supplied) 

During his testimony, Mr. Zawarus, admitted that 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 of the regulation is scienter. Since the FAA did not establish 

scienter on the part ofNPC for the alleged violation of the regulations cited, any other evidence 

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is moot. Not only did the sole witness for the FAA not establish the scienter element of the 

regulation, he negated this element by his admission above that the alleged violations were not 

deliberate. In the Matter of Falcon Crest Aviation Supply, Inc. FAA Order No. 2007-6 at page 7. 

The FAA did not meet its burden of proof for any of the alleged violations. 

IfNPC did not knowingly violate the regulations, it cannot be subject to penalty. Logically, how 

could a penalty deter future behavior, if the behavior in question was not intended? Whether or 

not NPC violated a regulation is not the sole element of the offense. It must have violated the 

regulation and meant to do so. 

Assuming arguendo that NPC violated the regulations regarding the shipments identified in the 

complaint, the FAA has to prove scienter on NPC's part, Its witness confessed that there was 

none. This issue alone would moot any other argument that the government makes since no 

penalty would be imposed if a necessary element were not proved. 

E. Conclusion 

For the foregoing reasons, Respondent prays that the FAA Decisionmaker sustain the rulings of 

the ALJ to the extent not inconsistent with its position taken in its own brief appealing the 

decision of the ALI. 

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Respectfully submitted: 

National Power Corporation by 

Martin A. Blumenthal, its Attorney 

Martin A. Blumenthal 

Attorney for the Respondent 

1 Northfield Plaza #300 

Northfield, IL 60093 

847-441-2687 

marty@blumenthallaw.com 

--~ 

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CERTIFICATE OF SERVICE 

I hereby certifY that the foregoing Respondent's Reply Brief was sent via First-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 of the Chief Counsel 

800 Independence Ave, S.W. 

Washington D.C. 20591 

Attn.: Charles Raley 

Date: 13 November 2015 

Signed: 

Martin A. Blumenthal 

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