I.

II. 

### SERVED: AprillO, 2015 IN THE MATTER OF MARTINAIREAVIATION, LLC FAADOCKETNO. [TO BEASSIGNED] (Civil Penalty Action) FDMS NO.

**FAA~** 2013-0040 

# REC 

# \VED APR 13 2015 

## HEARING DOCKET

INITIAL DECISION OF ADMINISTRATIVE LAW JUDGE Keyterms

AMR FAA Buchanan DFW HM HMR Klimas Martinaire NOPIC NOPCP NTSB GOM PHMSA PIC Introductory Comment American Airlines Federal Aviation Administration, Complainant Bryan Edward Buchanan, HMR safety Manager, Ft. Worth, TX Dallas- Ft. Worth International Airport Hazardous Materials Hazardous Materials Regulations Paul Daniel Klimas Martinaire Aviation, LLC, Respondent Notification to Pilot-In-Command (Respondent uses NOPC) 1 Notice ofProposed Civil Penalty National Transportation Safety Board General Operations Manual Pipeline and Hazardous Materials Safety Administration Pilot in Command

On January 15,2013,the Federal Aviation Administration (hereinafter "FAA") filed a Complainant against Martinaire Aviation LLC, (hereinafter "Martinaire") seeking a civil penalty of$206, 550.00 for violation ofthe Federal hazardous materials transportation law and hazardous materialsregulations (hereinafter "HMR''). OnJuly 8, 2013, wefound that Martinaire violated 49 C.F.R. §§ 175.33(a)(/), 175.33(a)(/)(i), and 175.33(a)(7) asserted in the FAA's Complaint. The matter outstanding is the assessment ofpenalty. We find the FAA did not make a prima facie case with respect to the amount ofpenaltyrequested. We will reduce the penalty.

1 Tr. p. 70, 11. 14-17. 1III. Procedural History ByNotice ofProposed Civil Penalty dated May 30, 2012 and by Final Notice of Proposed Civil Penalty dated January 7, 2013, Martinaire was advised that the FAA proposed to assess a civil penalty inthe amount of$206,550.00. Martinaire filed a Request for Hearing dated January 9, 20 13. On January 15,2013, the FAA filed a Complaint alleging that Martinaire violated the following Department ofTransportation Hazardous Materials Regulations (Title 49 of the Code ofFederal Regulations):

a. Section 175.33(a) (1) (49 C.FR. § 175.33(a) (1) in that it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilot-in-command the proper shipping name, hazard class and identification number ofthe hazardous material aboard the aircraft. b. Section 175.33 (a) (1) (i) (49 CFR. § 175.33 (a) (1) (i) inthat it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilot-in-commandthe proper shipping name, hazard class, identification number and any additional descriptionrequirements provided in§§ 172.202, and 172.203 ofthehazardous material aboard the aircraft. c. Section 175.33(a) (7) (49 C.FR.§ 175.33(a) (7) in that it accepted hazardous material aboard an aircraft for transportationby air and failed to provide the pilot-in-commandthe date ofthe flight. OnJune 17, 2013, the FAA filed a Motion for Decision. In Martinaire's Answerthereto, Martinaire admitted each ofthe facts underlying the allegations inthe Complaint. On July 8, 2013, we found:

... Martinaire Aviation, LLC violated 49 CFR. §§ 175.33(a)(l), 175.33(a)(l)(i), and 175.33(a)(7) asserted in Complainant's (FAA's) Complaint. Bycontrast, the issue ofthe appropriate civil penalty is genuinely controverted. Martinaire has raised several valid defenses to Complainant's arguments in favor ofits proposed penalty amount. As such, that portion of Complainant's Motion for Decision is hereby DENIED. This proceeding will be limited to the issue ofthe appropriate civil penalty. A hearing was held June 18, 19 and 20,2014, inclusive, in, Dallas, TX 75202, on the issue ofpenalty. 2The FAA filed a Motion to Add an Exhibit dated June II, 2014. Martinaire filed an Objection dated June 12,2014. The FAA's Motion is denied. There are outstanding Motions for Limine filed by Martinaire whichwill be addressed herein. Posthearing briefs were filed bybothparties. The matter is now ready for decision. IV. Jurisdiction Martinaire was a Part 135 carrier (14 C.F.R. Part 135) and subject to the rules ofthe Department ofTransportation and 49 C.F.R. Part 175. V. Burden ofProof The FAAwas the petitioning party withthe initial burden ofproof(14 C.F.R. 

### § 13.224). VI. Surmnary ofFacts A. Agency's recitation offacts On July 8, 2011, the Federal Aviation Administration conducted a comprehensive hazardous material inspection at Martinaire's' headquarters, 4553 Glenn Curtis Drive, Addison, Texas and at Dallas FortWorth International Airport. As a result ofthe inspection, the FAA allegedthat Martinaire routinely failed to properly complete and comply with the requirements for theNotificationto Pilot-In-Command (hereinafter "NOPIC") for hazardous materials shipments On June 22,2011, the NOPIC for Martinaire flight number 637 (Woodward/ Oklahoma (WWR) to Oklahoma City, Oklahoma (OKC)) failed to include the proper shipping name and hazard class as required for a hazardous materials shipment classified as Compressed Gas, N.O.S., 2.2, UN1956 (tracking number IZ72642590100064105). On June 22, 2011, the NOPIC failed to provide the proper shipping name for two shipments properly classified as Dry Ice, 9, UN1845, PG III ontracking numbers 1ZW27E87WT86012673 and 1ZW9688XTJT44430534. The proper shipping names provided by Martinaire were "Boehringer" and "JCAH", respectively. OnJune 6, 20II, the NOPIC for Martinaire flight number 600 (Lansing, Michigan to Traverse, CityMichigan (SIC)) failed to properly provide the correct basic hazardous materials shipping description for a shipment classified as Paint, 3, UNI263, PGII (tracking number 124246510449376106). The packing group was not provided as required. The Martinaire 3NOPIC described the item as Paint, 3, UN1245. UN1245 was the identification number for another hazardous material, methyl isobutyl ketone. Methyl isobutyl ketone was a packing group II flammable liquid. OnJune 6, 2011, the NOPIC for Martinaire flight nnmber 682 (Wilmington, North Carolina (ILM) to Raleigh-Dnrham International Airport (RDU), Raleigh, North Carolina}failed to include the correct identification number as required for a hazardous materials shipment properly classified as Denatnred Alcohol, 3, NA1987, PG II (tracking number IZ2102770145719267). The NOPIC described the item as Denatnred Alcohol, 3, UN1087. The packing group was not provided. UN I087 was the identification number for a hazard class 2.1 item Vinyl methyl ether, stabilized. On May 26, 20II, theNOPIC for Martinaire flight number 806 (Houston, Texas (IAH) to SanAntonio, Texas (SAT)), failed to include the correct proper shipping name and packing group as required for two hazardous material shipments properly classified as Petrolenm Distillates, N.O. S., hazard class 3, UN1268, PG III, (airway bill number 8771203122 and 8771205111). Forthe NOPIC dated, May 26, 2011, Distillates was the proper shipping name provided for on the NOPIC. Air waybill number 8771203122 failed to include the correct identification number (listed on the NOPIC as "128"). "128" was not a recognized identification number. Additionally, neitherthe flight number nor the date was listed on the NOPIC. OnMay 24, 20II, the NOPIC for Martinaire flight number 666 (Abilene, Texas (ABI), to DFW) failed to include the complete proper shipping name, hazard class and correct identification nnmber as required for a hazardous material shipmentproperly classified as Helium, compressed, hazard class 2. 2, UNI046 (tracking nnmber IZ049169014416999). Forthe NOPIC dated May 24, 2011, Martinaire was unable to provide the associated hazardous materials shipping paper due to a typographical error onthe NOPIC involving the tracking number. The identification number listed on the NOPIC, "UN1064", was for a product that was forbidden for transportation on cargo aircraft, Methyl Mercatan, 2.3 (2.1) Nl064. OnMay 19,2011,the NOPIC for Martinaire flight number 601 (Lansing, Michigan (LAN), to Houghton County, Michigan ( CMX)) failed to include the complete proper shipping name, hazard class and packing group as required for a hazardous materials shipment properly classified as Organophosphorus Compound, Toxic, Liquid, N.O.S. (Diphenylphosphoryl Azide), 6.1 UN3278, PGII (tracking nnmber 129444340274593_550). The NOPIC identified the hazard class as "5.1". OnMay 14, 20II,theNOPIC for Martinaire flight nnmber 700 (RDU), to New Bern, North Carolina (EWN)), failed to include the complete proper shipping name and correct identification number as required for a hazardous mftterials shipment properly classified as Printing Ink, hazard class 3, UNI210, (tracking nnmber (IZ337E30446005).

4For the NOPIC dated May 14,2011, Martinaire was unable to provide the associated hazardous materials shipping paper due to a typographical error on the NOPIC involving the tracking number, The identification number listed, "UN1457" on the NOPIC is for a product classified as, Calciumperoxide, 5.1, UN1457. OnMay 13, 2011, the NOPIC for Martinaire flight number 688 (Columbia, South Carolina (CAE) to HiltonHead Island, South Carolina (HXD)), failed to include the complete proper shipping name andpacking group as required for a hazardous materials shipment properly classified as 11 Corrosive liquid, acidic, inorganic, N.O.S., hazard class 8, UN3264, (tracking number IZR91W8023572881). For the NOPIC dated May 13,2011,Martinaire was unable to provide the associated hazardous material shipping paper because ofthe typographical error on the NOPIC involving the tracking number. The proper shipping name was depicted on the NOPIC as "NOS". OnApril 14, 2011, the NOPIC for Martinaire flight 637 (WWRto OKC), failed to include the completeproper shipping name and packing group as required for a hazardous materials shipmentproperly classified as Chemical Kit, hazard class 9, UN3316 (tracking number 1ZSR91W60123229672). The proper shipping name was listed as "BECKMAN COULTER". For the NOPIC dated Aprill4, 2011, Martinaire failed to include the complete proper shipping name and packing group as required for a shipment properly classified as Sodium hydroxide Solution, hazard class 8, UN1824, (tracking number IZ5R91WSO 123218942)

. The proper shipping name was listed as "BECKMAN COULTER". Martinaire was unable to provide the associated hazardous materials shipping papers due to a typographical error on the NOPICS involvingthe tracking number, On April 12, 2011, the NOPIC for Martinaire flight number 637 (WWRto OKC), failed to include the proper shipping name and packing group for shipments ofitems classified as Lithium Metal Batteries Packed with Equipment, hazard class 9, UN3090, PO II (tracking numbers IZ8847490150235015 & IZ8847490150241628, respectively) as required. On April 12, 2011, the NOPIC for Martinaire flight number 685 (Eugene, Oregon (EUO) to Portland, Oregon (PDX)), failed to include the complete proper shipping name, hazard class, identification number and packing group as re.quired for a hazardous materials shipment properly classified as Caproic Acid, hazard class, UN2829, PO III (tracking number 1Z074E300205633517). The NOPIC described the shipment as 'Caret acid, hazard class 3, UN2800. Forthe NOPIC dated Aprill2, 2012, Hazard Class "3" is designated for flammable liquids and UN2800 is the identificationnumber for Battery, wet, non-spillable. On April 1, 2011, the NOPIC for Martinaire flight number 666 (ABI-DFW), failed to include the completeproper shipping name and packing group as required for a hazardous materials shipmentproperly classified as Sodiumhydroxide Solution, hazard class

58, UN1824, (tracking number 1Z751189011649924). The proper shipping name was listed on the NOPIC as "Corr". Forthe NOPIC dated April!, 2011, Martina,ire was unable to provide the associated hazardous materials shipping paper due to a typographical error on theNOPIC involving the tracking number. B. Respondent's recitation offacts Martinaire admitted paragraph 1ofthe Complaint, in that on or about July 8, 2011, the FAA conducted an inspection at its headquarters at 4553 Glenn Curtis Drive, Addison, Texas, and averred that the inspection included an FAAreview and audit ofapproximately 500-600 NOPICs for hazardous materials shipments transported on Martinaire's cargo-carrying fights from approximately April!, 2011 through July 7, 2011. As to paragraph 2 ofthe Complaint, Martinaire admitted the inspection included a review ofNOPICs for hazardous materials transported by cargo-carrying flights from approximately April!, 2011 through July 7, 2011. As to paragraph 3 ofthe Complaint, Martinaire admitted the NOPIC for Flight 637 did not include the full shipping name and hazard class. As to paragraph 4 ofthe Complaint, Martinaire admitted the NOPIC did notprovide the shipping names for two dry ice shipments. ' ' As to paragraph 5 ofthe Complaint, Martinaire admittedthe NOPIC for FlightNo. 600 described the item as UN\245 when it should have been described as UN\263. As to paragraph 6 ofthe Complaint, Martinaire admitted that UN 1245 was an identificationnumber for methyl isobutyl ketone, a packing group II flammable liquid. As to paragraph 7 ofthe Complaint, Martinaire admitted the NOPIC for Flight No. 682 described the item as UN1087, when it should have been described as UN\987. As to paragraph 8 ofthe Complaint, Martinaire admittedthat UN\087 was an identification number for vinyl methyl ether, stabilized. As to paragraph 9 ofthe Complaint, Martinaire admitted theNOPIC for Flight No. 806 did not include the proper shipping name and packing group for two shipments for petroleum distillates. As to paragraph 10 ofthe Complaint, Martinaire admittedthe NOPIC contained the shipping name "Distillates" and the identification number "128" and the flight number and date were not contained on theNOPIC.

6As to paragraph II ofthe Complaint, Martinaire admitted the NOPIC for Flight No. 666 contained a typographical error involving atracking number and listed an incorrect identification number UNI064. As to paragraph 12 ofthe Complaint, Martinaire admitted the NOPIC for FlightNo. 666 contained a typographical error involving a tracking number and listed an incorrect identification number UN1064. As to paragraph 13 ofthe Complaint, Martinaire admittedthe NOPIC for FlightNo 601 did not contain the complete shipping name, hazard class and packing group. As to paragraph 14 ofthe Complaint, Martinaire admitted theNOPIC for FlightNo 700 did not containthe complete shipping name, hazard class and packing group.

. ;" As to paragraph 15 ofthe Complaint, Martinaire admitted there was a typographical error on the NPIC dated May 14, 2011, involving the tracking number. As to paragraph 16 ofthe Complaint, Martinaire admitted the NOPIC for FlightNo. 688 did not contain the complete shipping name, hazard class and packing group. As to paragraph 17 ofthe Complaint, Martinaire admitted there was a typographical error onthe NOPIC dated May 13,2011, involving the tracking number. As to paragraph 18 ofthe Complaint, Martinaire admitted the NOPIC for FlightNo. 6327 did not contain the complete shipping name and packing group. As to paragraph 19 ofthe Complaint, Martinaire admitted the NOPIC for FlightNo. 637 did not contain the complete shipping name and packing group and there was a typographical error involving the tracking number. As to paragraph 20 ofthe Complaint, Martinaire admitted theNOPIC for FlightNo. 637 did not containthe complete shipping name andpacking group. As to paragraph 21 ofthe Complaint, Martinaire admittedthe NOPIC for FlightNo. 685 did not contain the complete shipping name, hazard class and packing group. As to paragraph 22 ofthe Complaint, Martinaire averred the Hazard Classes and UN identification numbers speak for themselves. As to paragraph 23 ofthe Complaint, Martinaire admitted the NOPIC for FlightNo. 666 did not Contain the shipping name and packing group. As to paragraph 24 ofthe Complaint, Martinaire admitted there was a typographical error involvingthe trackingnumber.



### 7As to paragraph 25 ofthe Complaint, Martinaire denied it violated Section 175.33(a)(1), 175.33 (a)(1)(i) and 175.33(a)(7) ofthe Department ofTransportation Hazardous Materials Regulations (hereinafter "HMRs"). With respectto each numbered paragraph ofthe Complaint, except as expressly admitted, Martinaire denied each and every, all and singular, allegations contained therein, and each and every partthereof, both generally and specifically, conjunctively and disjunctively. Answering Part III ofthe Complaint, Martinaire averred that HMRSection 107.329 and 49 US.C. Section 5123(a)(1) spoke for themselves, but denied that a civil penalty of$206,500, or any other amount was appropriate. Martinaire also asserted affirmative defenses as follows: First Affirmative Defense The sanction sought bythe FAA was unwarranted by the facts, safety in commerce and the public interest and was not only excessive, butfar exceeded policy, precedent and the FAA's own Sanction Guidance Table. Further, the sanction was compounded in violation ofthe FAA's own Sanction Guidance Table. Second Affirmative Defense The FAA's case was unwarranted and without basis orjurisdiction in law or fact. Third Affirmative Defense Martinaire alleged discrepancies with the requirements of49 C.F.R. 

### § 175.33 were the product ofsimple human error by non-management employees ofMartinaire in violation of Martinaire's own policies and procedures and contrary to the training and guidance the employees were provided by Martinaire and were in no way indicative ofMartinaire's regulatory compliance disposition. The majority ofthe employees involved were Martinaire pilots, who themselves preparedthe NOPICs, basedupon information given to themby third parties. In essence, the pilots were preparing the notifications themselves. The employees involved, although adequately trained and qualified under Martinaire'sthen FAA approved training program, including but not limitedto Martinaire's HAZMATTraining Program, have since received additional training. Moreover Martinaire, in an immediate response to the matters giving rise to this case revised and updated its HAZMATTraining Program, revised its standard NOPIC Formto more 'user friendly', mandated additional training not only for the personnel involved inthese alleged incidents, but all fight operations, pilot and dispatchpersonnel, and implemented aprogram ofinternal daily audits ofall NOPICs. Fourth Affirmative Defense Martinaire proactively mitigated any and all damages suchthat the FAA's action was 8unwarranted by policy or the need for safety. Specifically, Martinaire alleged, it: Counseled all pilots involved in the incident alleged in the Complaint; Counseled all flight department and dispatch personnel inthe interests of preventingrecurrence ofsuchincidents; Revised its HAZMAT Training Programto specifically address said problems and ensure future compliance; RevisedtheNOPIC From to make itmoreuser friendly; Provided its personnel with additional HAZMATtraining so as to prevent recurrence ofsuch incidents, including, Hazardous Material Regulations; acceptance and transport ofdangerous goods, andproper completion ofthe revisedNOPIC form; and Implemented a program ofdaily audits ofal NOPIC's which had since shownthat compliance had been achieved. Fifth Affirmative Defense Martinaire alleged it had taken all necessary corrective actions to avoid repeated mishaps such that penalties were redundant and will not result in any increase in safety Sixth Affirmative Defense Martinaire alleged: 1. TheFAArelied on FAA Order 2150.3B in determining the sanction in this case; 2. The FAA compounded the alleged violations and sanctions in contravention of FAA Order 2150.3B; 3. TheFAA sought civil penalties in excess ofthose suggested in FAA Order 2150.3B's Appendix C, Figure C-1, in further contravention ofsaid Order; 4. The FAA further contravened FAA Order 2150.3B in not taking into consideration the considerable corrective action thatwas immediatelythereafter taken by Martinaire; 5. 2150.3B, to the extentthat it treated Martinaire as a Group II carrier, was arbitrary, capricious and unenforceable. Specifically, Figure C-1 ofthe Sanction Guidance Table contained within said Order mandated that Martinaire be treated as a Group II carrier and accordingly be subjected to higher penalties than Group III or IV carriers. The sole reason for this is the number ofaircraft that Martinaire operated (39, including 24 owned and 15 leased aircraft), all ofwhich have a maximum gross takeoffweight ofless than 12,500 pounds. However, FAA Order 2150.3B and Table fail to account for the size ofthe aircraft or their payloads. Under the Order and Table, a carrier operating fewer, but larger, aircraft, carrying far greaterpayloads, and far greater numbers ofhazardous materials shipments and generated substantially greater revenues, could be treated as a smaller carrier andbe subjectto lesser penalties. Martinaire also asserted further distinctive offenses, including: 9• The FAA's case was devoid ofany sense ofproportion. • During the period oftime coveredbythe Complaint, Martinaire carried some 500-600 HAZMAT shipments, all Without incident. • TheNOPICs examinedbythe FAA inspection team onJuly 8, 2011, which gaverise to this case, covered a period of90 days. The total number of NOP!Cs examinedbythe FAA was 500-600. Ofthis total number, only 12 were observed to have any discrepancies. • As a small company (and a small business) that operated only small aircraft withless than 100 employees, the burden onMartinaire caused by a $206,550.00 penalty would be unsurmountable. VII. Summary ofTestimony All admitted testimonial and documentary evidence was reviewed and considered. Testimony is summarized herein. 1. Agency's Case Bryan Edward Buchanan Bryan EdwardBuchanan (hereinafter "Buchanan") was the manager ofthe hazardous materials safety branchinFort Worth, Texas, during the time ofthe within investigation. He supervised eight special agents who worked inthree different states. The agents conducted inspections and investigations ofviolations ofthe HMRs. Mr. Buchananhad worked with HMRs approximately 25 years2 Buchanan identified Martinaire as a Part 135 "on-demand" cargo carrier. Buchanan testified Martinaire had contracts with United Parcel Service and DHL. Martinaire was a feeder operation whichtookfreight from small markets to larger markets, and then back from larger markets to small markets on a contractbasis. Atthe time ofthe incident, Buchanan supervised the lead agent, Paul Daniel Klimas. The inspection which generated the violations tookplace at Martinaire's corporate office inAddison, Texas, as well as some ramp inspection activity at Dallas-Fort Worth International Airport (hereinafter "DFW"). 3 Buchanan identified the NOPIC as the document that detailed the 1-IMs that were accepted and transported on an aircraft, and their location and other information that couldbe used by emergencyresponders or the pilotincharge. Accordingto Buchanan, at remote locations, the UPS or the DI-lL trucks backedup to Martinaire aircraft. The pilot would go through an inspection, an acceptance process ofthose 1-IMs. He would fill out the NOPIC, place the materials on the aircraft in specific locations

**an~** notate that onthe NOPIC. Before takeoff, the pilot would contact the dispatch office to provide the information onthe NOPIC form to a dispatcher who would write it down onthe form kept atthe dispatch office. Then there was a

2 Tr. p. 25, I. 10 top. 27, I. 1. 1 Tr. p. 27, I. 2 top. 28, I. 6. 10record atthe dispatch office, as well as with the pilot. Then the pilot would start his/herjourney to the larger station.4 According to Buchanan, NOPICs were important because the form providedpilots with the information on what was loaded on an aircraft, where itwas located, and other emergency information. In addition, it provided emergency responders with information about aircraft cargo so they were able to reactto a situation with a hazardous material. 5 During the inspection on July 11, 2011, the inspectors documented seventeen (17) discrepancies. Buchanandiscussed the application ofFAA Order 2150.3B and its applicability to the facts ofthis case. Inhis opinion Martinaire was a Group II Air Carrier, with a gross revenue less than $100 million annually. In his opiilion Martinaire had 50 or less pilots and it had 25 or more aircraft. Buchanan testifiedthis type ofcarrier was heldto a high standard. Buchananthen discussed Martinaire's past violation history. 6

Buchanan explained that Martinaire's procedure for preparing the NOP!Cs differed from that utilized by large carriers. Buchanan explained that at large carriers transportation workers or a computerprogram generated aNOPIC for the pilot and gave itto the pilot. At Martinaire, the pilot generatedthe NOPIC after she/he conducted an inspection and accepted stowage ofthe hazardous material. When Martinaire conducted feeder flights for DHL and UPS, the pilot received a coupon from DHL and/or UPS which showedthe pilot the hazardous material, the UN number, the quantity, the commonname, the technical name, and other information. Buchanan explainedthe DHL/UPS coupon would have the same information which was required to be on the NOPIC. 7 Buchanantestified Martinaire had a binder whichhad the dispatch copy ofall the HM shipments for the pastninety (90) days. During the period ofJuly 2011 there were several hundredNOPICs inthe binder, ofwhich seventeen (17) showed discrepancies. There were no other discrepancies found at DFW8 ..• Buchananreiterated that inhis opinion Martinaire was a Group II carrierbecause its revenue was less than a 100 million a year and it had less than fifty (50) pilots but more than twenty-five (25) aircraft. In his opinion it made no difference whether Martinairc owned, borrowed or leased the airplanes. Nor did it make any difference what size aircraft were involved. He acknowledged that Martinaire operated smaller aircraft including Cessna 208 Caravans and "Twin Beeches". He also acknowledged ifMartinaire operated with larger aircraft and fewer pilots with the same revenue, it could be a Group Ill or IV carrier and be exposed to

4 Tr. p. 28, 1. 13 top. 29, 1. 20. 5 Tr. p. 42, 1. 9 top. 44, 1. 4. 6 Tr.p.32,1.1 top.42,1.19. AgencyEx.IOO.Ol. 7 Tr. p. 45, 1. 15 top. 48, 1. 3. 8 Tr. p. 48, 1. I top. 40, 1. 10. 11lower penalties9 Buchanan acknowledged that Martinaire appeared to have taken corrective action. He testified the purpose ofHMR Section 175.33 was to insure the operator ofthe aircraftprovided the PIC with accurate written information concerning the shipping name, hazard class, identification number ofthe materials, so the pilotknewwhat he or she had on board the airplane. The NOPIC, according to Buchanan, was developed based on recommendations ofthe National Transportation Safety Board (hereinafter "NTSB"), but there was no policy from the FAAthatNOPICs were available for the use offirst responders. 10 Buchanantestifiedthat inthe past 17 years, inhis experience, the average dollar amount ofcivil penalties for NOPIC violations was between $30,000 and $50,000; that the FAA had never, ever soughtcivil penalties for NOPIC violators in excess of$200,000; and that the FAA was generally satisfied with Martinaire stepping up to the plate and implementing corrective actions. 11 Redirect No weight was givento the redirecttestimony as it was well beyondthe scope ofthe direct and cross-examination and was the subject ofan objectionbythe Respondent which was sustained. Re-cross On re-cross Mr. Buchananresponded that the NOPICs reviewed were the dispatch copies ofthe NOPICs; they were based upon information that the pilot had called in to dispatch; to the extent that there were gaps or errors in the dispatch copies ofthe NOP!Cs, Buchanan had no idea what the pilot's own copy ofthe NOPIC said. 12 Paul DanielKlimas Paul Daniel Klimas (hereinafter "Klimas") was a special agent, hazardous materials for the FAA. He was responsible for the inspection ofair carriers, hazardous materials shippers, hazardous materials freight-forwarding companies, FAA-certifiedrepair stations as it pertained to theirhazardous materials programs and the application oftheir programs. He hadbeen with the FAA fifteen (15) years. Priorto that he was with the Federal Railroad Administration. He had a total oftwenty-five (25) years ofexperience with hazardous materials. 13 Klimas' testified that Martinaire was a feeder operation for DHL and UPS. 14

9 Tr. p. 50, I. II top. 52, 1. 16; Respondent Ex.# R-1. 10 Tr. p. 53, 1. 7 top. 57, 1. 15. 11 Tr. p. 57, I. 20 top. 59, I. 7. 12 Tr. p. 70, I. 13 top. 71, I. 12. 13 Tr. p. 75, I. 10 top. 77, I. 8. 14 Tr. p. 77, II. 14-19. 12On July 8, 2011, Klimas conducted a routine comprehensive inspection ofMartinaire, with Jay Sorah. Theybegan by monitoring in-bound and out-bound flights at DFWthen proceeded to Addison, where Martinaire maintainedtheir headquarters. AtAddison they were joinedbyDennis Juenemann. Among items inspected were theNOPICs (also known as NOPCs) for Martinaire. Klimas described the NOPIC as a summary ofthe hazardous materials that were on board a flight, a briefdescription as well as the locationwhere those items were loaded on the aircraft. 15 The inspection uncoveredmany conflicting NOPICs regarding proper UN identification numbers. Each hazardous material had a definitive identification number, which in the case ofMartinaire, conflicted with proper shipping names, hazard class. Klimas also found missing special permit numbers. During the investigation Klimas reviewed approximately 400 NOPICs and found discrepancies in twelve (12) NOPIC forms covering seventeen (17) shipments. 16
In Klimas' opinion, the NOPIC records were in poor shape. For example, the NOPIC for 6/22/11 contained three shipments ofhazardous materials. The first was missing a proper shipping name. The second one- the second line onthat first shipment, the UN number indicated 19

-- UN number 1956, compressed gas NOS, but yet they listed a hazard class as class I which was an explosive item. The second tracking number for 6/22/11 listed a shipping name ofBoehringer, but there was no HMwith that nan1e. The third tracking number for 6/22/11 listed proper shipping name being JCAH, but Klimas testified there was no proper shipping name for JCAH. Klimas had to go to United Parcel Service to obtain the proper documentation for the 6/22/11 flight. 17

Klimas testified that Martinaire had no discrepancies during the comprehensive inspection at DFW. Martinaire had no discrepancies at Addison ofits training records for pilots and dispatches and no discrepancies ofin its 'stores1 ' records. 18 Klimas testified that he had examined the dispatch copy ofthe NOPICs and Klimas did not know who authored those forms, whether it was the pilot or whether it was the dispatcher transcribing certain information given by the pilot. Hetestified they were toldthe information was radioed in from the crew members or telephoned in and transcribed by the dispatchers. He testified further he did not know whether the errors were transcription errors onthe part ofthe dispatcher orthe result ofsome other error. He testified, whenthe pilot accepted the HMs shipment from DHL orUPS, he/she received a coupon whichbasicallyhad the very same informationthat would go in the Martinaire NOPlC form, with the exception ofthe location ofthe HM onboard the aircraft. 19

15 Tr. p. 78, I. 20 to 80, I. 4. 16 Tr. p. 80, I. 13 top. 81, I. 18. 17 Tr. p. 83, I. 14 top. 89, I. 3. Agency Ex. 100.01, page 6 of25. 18 Tr. p. 94, I. 9top. 94, I. 20. 19 Tr. p. 95,!. 18 top. 98, l: II. 13Klimas testified the HMR 175.33 did not state the NOPIC was to beused for emergency response procedures or be available for emergency responders. There was a Pipeline and Hazardous Materials Safety Administration (hereinafter "PHMSA") letter ofinterpretation that alluded to the information being available to emergency responders in event ofan incident, but there was nothing inFAR 119 or FAR 135 that required a carrier to be familiar with PHMSA interpretations. Further, Martinaire's general operating manual or GOM did not require they be familiar with PHMSA interpretations. There were no FAA handbooks or orders that stated that the NOPIC, in addition to serving as a notice to the pilot-in-command was to be used for emergency response procedures. He further testifiedthat with the major carriers, theNOPIC was preparedby someone and givento the flight crew?0 Klimas testifiedthat in its August 2, 2011, reply to theNotiee ofProposed Civil Penalty (hereinafter "NO PCP") Martinaire outlinedthe corrective actions ithad taken in response to the investigation. InKlimas' opinion, Martinaire addressed the FAA's concerns, took swift, comprehensive, corrective action. Inhis opinion there was nothing that Martinaire should have done that they did not do in response to the investigation21 Klimas testifiedthere was another inspection inDecember 2013 which found additional NOPIC violations. After the December 2013, Klimas testified, Martinaire implemented an extensiveprogramto deal with NOPICsn Withrespect to prior violations involving NOPICs, Klimas testified that in the prior NorthwestMountain caseY1the PIC did not prepare the NOPIC becausehehad run out of forms. The case was settled. In the prior Great Lakes case,121 which settled, the PIC washed the plane using a HM substance without the knowledge or permission ofMartinairer31
Evidence The Agency introduced the statement ofPaul Klimas which contained copies of Martinaire NOPICs. The exhibit was admitted. 2. Respondents' Case Alan Rusinowitz Alan Rusinowitz (hereinafter "Rusinowitz") was the Executive Vice President, chief operating officer ofMartinaireD Martinaire was a part 135 cargo carrier, with fewer than ninety (90) employees and thirty-four (34) aircraft. Ofthethirty- four (34) aircraft, Martinaire owned

20 Tr. p. 98, l. 14 top. 102, l. 16. 21 Tr. p. 104, l. 8Jo p. 107, l. 6. 22 Tr. p. 107, l. 7 top. 109, l. 6. IllNorthwest Mountain Regional Office, FAA 121 GreatLakes Regional Office, FAA; referred to as the "Purple Power" case because ofthe name ofthe liquid used to clean the aircraft and thereafter flown on the aircraft without the knowledge ofMartinaire. 1 31Tr. p. 109, l. 7 top. 112, l. 4. 23 Tr. p. 116, l. 1top. 121, l. 7. 14twenty-one (21), the restwere leased. Martinaire was a limited liability company (hereinafter "LLC") with three (3) people members ofthe LLC. Rusinowitz's recollection was that in2011 Martinaire made in the neighborhood of$200,000 in profit. During the period 2011, 2012 and 2013, Martinaire operated about 1500 flights per month orflight hours. Martinaire did not earn a profit in 2012 or 2013 and was not earning a profit in 2014 as ofthe time ofthe hearing. Over the three years prior to the hearing the number ofemployees and aircraft utilized by Martinaire declined due to the economy.24 Rusinowitztestifiedthe purpose oftheNOPIC was to provide information to the pilot of what he/she was carryingthat was a hazard or potential danger. He was aware ofno requirement inthe HMRs that specified that NOPICs were to be used for first responders. Rusinowitz described that HMR loads were delivered to Martinaire at an outstation, they were not picked up, but brought out from a sort facility to the aircraft. The pilot inspected every package that would go on the airplane. He/she was there to supervise and, ifneeded, assist in the loading ofthe aircraft. Martinaire had a good relationship with DHL and UPS. UPS/DHL would put aside HM packages and malce sure the pilot personally inspected- six-side inspection -the packages, make sure they were not leaking, broken, et cetera, as required by the regulations; insure packages were properly labeled. After Martinaire hadthe proper information it would fill out a NOPIC. When UPS/DHL delivered a HM shipment, it typically carne with a couponthat informed the pilotwhat was in the package, includingthe UN ID number, proper shipping name, packing class, group, restrictions and weight. The pilotwould use the coupon to prepare the NOPIC form. As a result, the coupon andNOPIC should have contained the same information. However, the NOPIC contained additional information indicating date, pilot, aircraft, and where the shipment was onthe airplane. In effect, the pilotrecopied the coupon information onto the NOPIC, which was actually redundant, because the pilot had the coupon with the required information. Thepilot then called all the information including dates, et al, into dispatch. The Martinaire 90-day file maintained at Martinaire's offices in Addison had the dispatch copies of the NOPICs, andrepresented the information that had been called in to dispatch by the pilot. As aresult, any errors on the Martinaire 90-dayNOPIC file copy would have been the result of dispatch either transcribing it wrong or leaving it out. In the opinion ofRusinowitz, the pilot would have had the correct information, but the pilot'sNOPICs were notretained25 As a result ofthe July 11 inspection, Rusinowitz met with representatives from the FAA and Martinaire agreed to update its training program, retrain their pilots and dispatchers, continue with every year training, revise the NOPIC form so it was more in compliance with the regulatory requirements at the time, auditprocedures, revise the General Operations Manual (hereinafter "GOM") as necessary, all ofwhich Martinaire did. Rusinowitz referred to Respondent Exhibit#R-1, which was transmitted to the FAA after the July 2011 briefing to demonstrate howMartinaire had updated theirprocedures and taken corrective action. Rusinowitz further testifiedthat while HM training was required to be given biannually, Martinaire performed the training annually in conjunctionwith annual recurrent training. Respondent Exhibit#R-1 also contained the redesigned NOPIC26

24 Tr. p. 121, I. 8 to p. 126, I. I. 25 Tr. p. 126, I. 7 top. 132, 1. 20. 26 Tr. p. 134, I, 6 top. 138,1. 13. 15Rusinowitz testified that Part 135 regulations required flight followers, while the name "dispatcher" was actually a Part 121 requirement. Martinaire always hired the most experienced flight followers, and Martinaire called the department "dispatch," but in its operations the terms were synonymous.27 Martinaire ultimately retrained everyone after the July 20II inspection and revised the HAZMA T training syllabus.28 Rusinowitztestified that withrespectto one priorNorthwest Mountain violation, the pilot who was assigned the route, flew it all thetime. Itwas his assigned route. He landed at his destination, got inspected, and didn't have aNOPIC for aHAZMATpackage that was onboard. He hadthe coupon, buthe didn't have theNOPIC itselffilled out. Hehad called inthe informationbut didn'thave his copy, because he had used the last form in his possession. Rusinowitz called the violationthe human factor ofstupidity. Withrespect to the second prior violation- the Great Lakes case - the pilot flew for Martinaire, but washed planes on the weekends. He went to the store andpicked up Purple Power, which was like a Simple Green degreaser, cleanser. He put it onthe airplane in the front compartment where he stuck his bag, and flew down to Lansing. He figured it was his personal carriage and it didn't have to be declared. He didn't tell anyone. When Martinaire settledthese cases, it was without admission ofliability. 29 With respect to the December 2013 incidents, Rusinowitz testified the FAAfound discrepancies withthe NOPICs. Inhis opinion it basically came down the human factor, because these werejusthuman editorial errors. There was no doubt in Rusinowitz's mind that the pilot had every piece ofrequired information he was supposed to have when he flew the flights. Ultimately Martinaire contracted with a companyto develop a computer-based application that will performthis function,

**basicall~** an electronic NOPIC that the dispatcher can use, which will costbetween $10,000 and 15,000. 0 Evidence

Martinaire introduced R-1, which consisted ofa letter dated August 2, 20II, and attachments A through M, inclusive. The exhibit was admitted. Other Evidence Martinaire's Trial Briefwas offered and admitted at Court Exhibit "ALJ-1". VIII. Summary ofEvidence Inits Answer to the Complaint Martinaire admitted the violations. The evidence is set

27 Tr. p. 138, I. 14 top. 139, I. 3. 28 Tr. P. 139, I. 8top. 141, p. 20; Exhibit#R-1, Attachments I, J, k, LandM. 29 Tr. p. 142, I. 15, top. 146, I. 16. 30 Tr. p. 148, I. 2 top. 154, I. 17. 16forth herein above for purposes ofdetermining the penalty. IX. Analysis offacts Agency argument The FAA addressed Martinaire's argumentthat the sanction guidance or the sanction in the amount of$206,550 was outside the range. The FAA asked the Court to give deference to the FAA's order 2150.3B, Appendix C, the sanction guidance, hazardous material enforcement provisions. The FAA submitted the civil penalty amount of$206,550 was within the 2150.3B range and was warranted and reasonable. The low amount orthe floor amount for the civil penalty within the Group II range for the hazardous material regulations violations was $5,000. The highpointrange per violation was $16,200. The FAA argues there were seventeen (17) separate shipments. The FAA argued the civil penalty range was not set atthe high end, but was within the guidelines ofthe 2150.3B. The FAA asked that we give deference to the Complainant's argument withregard to the civil penalty. The FAA argued to determine an appropriate civil penalty to be assessed under 49 US.C.A. § 5123(c) Penalty considerations, nine factors must be taken into consideration. These factors were (I) nature, (2) circumstance, (3) extent, and (4) gravity ofthe violation; (5) the degree ofculpability ofthe violator; (6) anyhistory ofpastviolations; the violator's (7) ability to pay, and (8) abilityto continue to do business; and (9) other matters asjustice may require. The FAA argued it had the burden ofproving the first five factors. The FAA had established policy guidance for determining these five factors and assigning them weight. 64 Fed. Reg. 19443 (Apri/21, 1999); FAA Order 2150 38, Appendix C, FAA Sanction Guidance, Hazardous Materials Enforcement (October 

### I, 2007). The FAA argued a penalty calculated in accordance withthe FAA's policy guidance should stand, absent a showing ofthe Respondent's inability to pay, inability to continue to do business:or some other matter required byjustice. Financial hardship was an affirmative defense thatthe respondent bore the burden ofproving. The FAA argued it was entitled to substantial deference in establishing an appropriate civil penalty. It argued the agency's "choice ofa sanction was not to be overturned unless 'it is unwarranted in law' or 'withoutjustificationin fact."' (NL Industries, Inc. v. Department of Transportation, FederalAviationAdministration, 901 F.2d 141 (1990)). The FAA argued: Four ofthe (17) seventeen shipments that contained a risk Category "A" hazardous material were incorrectly listed onthe NOPICs. A risk category "A" hazardous material posed a catastrophic riskto the safe flight ofan aircraft when released on an aircraft. Four ofthe shipments that contained 

### arisk category "B" hazardous material were incorrectly listed on the NOPICs. A risk category "B" hazardous material did not pose an immediate risk to the flight ofan aircraft, but it could cause death or injury ifreleased inthe confines ofan aircraft. Four ofthe 17shipments that contained a risk category "C" were incorrectly listed on the NOPICs. A risk category "C" were hazardous materials that presented the least amount ofrisk to the transportation system. Five ofthe shipments contained risk category "A", "B", or "C" hazardous materials and were incorrectly listed on the NOPICs. The FAA argued improperly completedNOPICs posed a serious threat to the health and safety ofthe pilots who flew the aircraft and the first responders who might have been called to a crash or a fire aboard the aircraft. Without knowledge ofthe specific properties ofa hazardous material, first responders would be incapable ofresponding to an emergency in a safe manner. Martinaire held an Air Carrier Certificate issued under Part 119 ofthe Federal Aviation Regulations ("FAR") and operations specifications issued underPart 135 ofthe FAR. Martinaire operated thirty-four (34) airplanes. Itownedtwenty-one (21) ofthe aircraft and leased the remainder. Martinaire was an American cargo airline that operated feeder flights for overnight package delivery services for UPS and DHL. Martinaire regularly accepted and transported hazardous materials. The FAA argued because Martinaire was a Part 135 cargo carrier, it was held to the highest standard ofcare. Itowed a higher duty ofcare to its pilots, first responders and the public at large. The FAA argued the degree ofculpability for Martinaire was extremely high. The FAA arguedthe prior violations furtherjustified the imposition ofthe penalty requested. Although Martinaire's earnings inthe two (2) years prior to the hearing were flat, these earnings were notindicative ofits inabilityto pay a civil penalty of$206,550.00. The FAA argued that Martinaire failed to submitinto evidence any financial statements or tax returns to support its assertions that a civil penalty of$206,550.00 would be insurmountable to the company. Consequently, Martinaire failed to show a nexus between the proposed civil penalty and a negative effect onthe company. The FAA argued Martinaire did not put any evidence on during the hearing to show that a civil penalty of$226,550.00 would put Martinaire out ofbusiness. The FAAreferred to portions ofthe deposition ofRusinowitz on May 16,2013, aboutthe impact ofa civil penalty on Martinaire's ability to continue its business. However, that deposition is not in evidence and arguments with reference thereto will notbe considered from eitherparty. The FAA arguedthe civil penalty of$206,550.00 was reasonable based on the totality of circumstances in this case. Under the agency sanction guidance, the failure to provide the pilotin-command with an accurate and complete NOPIC warranted a civil penalty for each individual shipmentbetween $5000.00 and $16,000.00. The midpoint ofthe range was $10,600.00. A civil penalty of$206,550.00 based on the totality ofcircumstances in this case did not exceed the civil penalty sanction guidelines set forth in the 2150.3B Order. The FAA argued Martinaire did not perform corrective action that exceeded the legal 18

### minimum requirement whichwouldjustify areduction in civil penalty. Based on the totality ofcircumstances, the FAA requested a civil penalty of$206,550.00 be rendered against Martinaire whichthe FAA argued was within the 2150.3B range and was warranted and reasonable. Martinaire argument Martinaire argued it was a small, Addison, Texas, based "on-demand" cargo airline. It 

### was a non-public limited liability company, having only three (3) members and less than ninety (90) employees. It

### operatedthirty- four (34) single-pilot aircraft; eighteen (18) Cessna 208's (single engine, fixed landing gear) that it owned, and thirteen (13) leased Cessna 208's and three (3) Beech 1900's (twin engine) under Part 135 ofthe Federal Aviation Regulations (FAR's). In 2011, Martinaire's net profit was $197,169 or a mere $12.64 per flight. Subsequent to 2011 and continuing into the present year, Martinaire had been operating at a loss. Martinaire suggested the FAA's decision to impose a $206,550 civil penalty was based on the FAA's position that: 1. The NOPIC's contained inthe 90-day file were incomplete or in error; 2. Martinaire violatedthe cited HMR's innotproviding full information to the pilot in command, thereby putting the pilots' well-being atrisk; 3. Martinaire (through its dispatch office) putthe well-being ofnot only first responders, but "the public at large" at risk; 4. Martinaire's priorviolations, and a December 2013 inspection demonstrate that "its conduct ofviolating the

... (HMR's) is systematic"; and 5. Martinaire can affordto pay the penalty. Martinaire argued the FAA's approach was overly simplistic. It

### not only convoluted the facts, the law and plain logic, but violated both the law and established precedent. Martinaire conceded there was no dispute the NOPIC's in the 90-day file, prepared by dispatch personnelbased upon information called in bythe pilots, evidencedtranscription or other human errors. Martinaire citedportions ofthe HMRs (49 C.F.R. § 175.33) 

### which provide in part: § 175.33 

### Shippingpaper and notification ofpilot-in-command. (a) When ahazardous material subject to the provisions ofthis subchapter is carried in an aircraft, a copy ofthe shipping paper required by §175.30(a)(2) 

### must accompany the shipment it covers during transportation aboard the aircraft, and the operator of the aircraft mustprovide thepilot-in-commandwith accurate andlegible written 

### information as early as practicable before departure ofthe aircraft, which specifies at least the following: 19(I) Theproper shipping name, hazardclass andidentification number of the material, including any remaining aboard from prior stops

... (2) The total number ofpackages

... (3) The net quantity or gross weight, as applicable

... (4) The location ofthe packages aboard the aircraft; (5) Confirmation thatno damaged or leaking packages have been loaded onthe aircraft; (7) The date of theflight

.... (emphasis addedbyMartinaire) Martinaire arguedthat unlike most major carriers which prepare NOPIC's and provide themto their flight crews, Martinaire's pilots received HazMatparcels from UPS or DHL, accompaniedby a UPS- or DHL-preparedticket containing all ofthe data specified in the above cited HMR's (except for flight number and specific locationupon whichthe parcel has been loaded onthe aircraft). Before departure, Martinaire pilots called the NOPIC information into dispatch. Dispatchpersonnel transcribed this information onto a NOPIC form and inserted the form into the "90-day file". The pilots had the.required NOPIC information in the form ofa coupon - prepared byDHL or UPS

- whichhadthe very same information that would go onthe MartinaireNOPIC form except for the location ofthe material on board the aircraft and date of the flight. The pilot copies ofthe NOPIC's were discarded after each flight; the dispatch copy was retained for 90 days. Martinaire arguedthe NOPIC was intendedto be used onlyby and for the benefit ofthe pilot in command; the very same pilot, who prepared theNOPIC, based upon information containedin the UPS and DHL tickets/coupons, and who supervised the loading ofthe aircraft. Martinaire also argued there was nothing in the HMR's, FAR's, or any otherregulation, any FAA Order or Handbook, or any otherpublicly available documentthat statedthat the NOPIC was or should be prepared for the benefit offirst responders in the event ofan aircraft mishap. Martinaire argued that the United States Supreme Court placed an important limit onthe deference courts should accord to a Federal administrative agency's interpretation ofits own regulations citing Christopher v. Smith Kline Beecham Corp. (132 S.Ct. 2156 (2012)]. Invoking principles of"fair warning" and "unfair surprise," the Court held that deference does not apply, at leastretrospectively, where an agency's "interpretation ofambiguous regulations [would] impose potentially massive liability on [aregulated eritity

### Jtor conduct that occurred well before that interpretation was announced." There had beenno regulatory reference, testimony or documents suggestingMartinaire should have known ofa requirement to prepare NOPIC's to assist first responders. Martinaire suggested no regulatory violations ofthe cited HMR occurred.

20Martinaire argued the NTSB, in an apparent response to an accident investigation may have recommendedthat NOPIC's be made available to emergency responders, and while another agency, PHMSA, mayhave issued an interpretation, the evidence was very clear thatthe sole "beneficiary" ofthe cited HMRwas the pilot in command. There was nothing in the regulation, nor for that matter in any other regulation, FAAhandbook, order or other publicly available informationthatmandated that a NOPIC be prepared or givento first responders. As admirable and useful as providing first responders with such information maybe, there was simply no regulatory or legal requirement. While the Department ofTransportation and/orthe FAA could have amended the regulation, they had not. While the Department and/or the FAA could have disseminated some publicly available guidance interpreting the regulation so as to require that the NOPIC be prepared and made available to first responders, they had not. Simply stated, no air carrier or aircraft operator should be found in violation ofa regulatory requirement that does not exist. Martinaire argued the $206,550 Civil Penalty was excessive, unreasonable and unwarranted. In supportthereof, Martinaire argued the FAA didnot allege and did not produce any evidence thatpilot-in-commandNOPIC's were in any way deficient orthatthe pilots in command did not possess required NOPIC information. Certainly, the DHL or UPS coupons that accompanied each parcel and givento the pilots contained the HMR-required information. Absent any evidence that the pilots did notreceive the information required to be conveyed to them, the FAA's case must fail andno penalty should be assessed. Inasmuch as it was the Martinaire pilot who authored the NOPIC, it would defy logic to hold that the pilot was not given this information. Martinaire argued the FAA's assertionthatthis was an aggravated case which compelled the imposition ofa civil penalty far in excess ofthat which the FAA had ever sought because there were two prior isolated hazardous materials cases and similar findings in an FAA inspectionthat occurred two years later was not evidence ofa systemic corporate culture guilty ofregulatory disregard. Martinaire settled both prior cases without admission ofliability or wrongdoing. Martinaire argued the totality ofthe facts did not establish a pattern ofconduct of HMR violations. X. Law A. Hazardous Materials Violations 49 CFR Part 107 sets forth the Hazardous Materials Program Procedures. 49 C.F.R. 107.329 sets forth the maximum penalties. 49 U.S. C.§5123 provides in pertinent part: (a) Penalty. (1) 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 ofnot more than $75,000 for

. 21each violation. A person acts knowingly when-- (A) the personhas actual knowledge ofthe facts giving rise to the violation; or (B) areasonable person acting in the circumstances and exercising reasonable care would have that knowledge. (2) Ifthe Secretary finds that a violation under paragraph (I) results in death, serious illness, or severe injury to any person or substantial destruction of property, the Secretary may increase the amount ofthe civil penalty for such violation to not more than $175,000. (3) Ifthe violation is related to training, apersondescribed in paragraph (1) shall be liable for a civil penalty ofat least $450. (4) A separate violation occurs for each day the violation, committed by a person thattransports or causes to be transported hazardous material, continues.

(c) Penalty considerations.--In determining the amount ofa civil penalty under this section, the Secretary shall consider-- (1) the nature, circumstances, extent, and gravity ofthe violation; (2) with respect to the violator, the degree ofculpability, any history of prior violations, the ability to pay, and any effect onthe ability to continue to do business; and (3) other matters thatjusticerequires. 49 C.F.R. 

### § 175.33 provides inpertinentpart: (a) When a hazardous material subject to the provisions ofthis subchapter is carried in an aircraft, a copy ofthe shipping paper required by §175.30(a)(2) must accompany the shipment it covers during transportation aboard the aircraft, and the operator ofthe aircraft mustprovide the pilot-in-command with accurate and legible writteninformation as early as practicable before departure ofthe aircraft, which specifies at least the following: (1) The proper shipping name, hazard class and identification number of the material, including any remaining aboard from prior stops, as specified in §172.101 ofthis subchapter orthe ICAO Technical Instructions. In the case of Class 1materials, the compatibility group letter also must be shown. Ifa hazardous material is described bythe proper shipping name, hazard class, and identification number appearing in: 22(i) Section 172.101 ofthis subchapter. Except for the requirement to indicate the type ofpackage, any additional description requirements provided in §§ 172.202, and 172.203 ofthis subchaptermust also be shown on the notification. (ii) The ICAO Technical Instructions (IBR, see §171.7 ofthis subchapter), any additional information required to be shown on shipping papers by subpart C ofpart 171 ofthis subchapter must also be shown in the notification. (2) The total number ofpackages; (3) The net quantity or gross weight, as applicable, for each package except those containing Class 7 (radioactive) materials. For a shipment consisting ofmultiple packages containing hazardous materials bearing the same proper shipping name and identification number, only the total quantity and an indication ofthe quantity ofthe largest and smallest package at each loading location needto be provided; (4) The location ofthe packages aboardthe aircraft; (5) Confirmation that no damaged or leaking packages have been loaded onthe aircraft; (6) For Class 7 (radioactive) materials, the number ofpackages, overpacks or freight containers, their category, transport index (ifapplicable), and their location aboardthe aircraft; (7) The date ofthe flight; (8) The telephone number ofa person not aboard the aircraft from whom the information contained inthe notification ofpilot-in-command canbe obtained. The aircraft operator must ensure the telephone number is monitored at all times the aircraft is in flight.. The telephone number is not required to be placed on the notification**ofpilot-in-c~rnmand** ifthe phone number is in a location in the cockpit available and known to the flight crew. (9) Confirmation that the package must be carried only on cargo aircraft if its transportation aboard passenger-carrying aircraft is forbidden; and (I0) An indication, when applicable, that a hazardous material is being carried under terms ofa special permit. (11) For UN1845, Carbon dioxide, solid (dry ice), only the UN number, proper shipping name, hazard class, total quantity in eachhold aboard the aircraft, and the airport at which the package(s) is to be unloaded must be provided. (12) For shipments oflithium cells orbatteries (UN3090 or UN3480) offered for transportation, or transported in accordance with §173.185(c)(4)(v) of this subchapter, onlythe UNNumber, proper shipping name, hazard class, and the total quantity at each specific loading location and whether the package must be loaded on a cargo only aircraft. (b) A copy ofthe written notification to pilot,in-command shall be readily available to the pilot-in-command during flight. Emergency response information required by subpart G ofpart I72 ofthis subchapter must be maintained in the same marmer as the writtennotificationto pilot-in-command during transport of 23the hazardous material aboard the aircraft. (c) The aircraft operator must- (!) Retain a copy ofthe shipping paper required by §175.30(a)(2) or an electronic image thereof, that is accessible at orthrough its principal place of business and must make the shipping paper available, upon request, to an authorized official ofa federal, state, or local government agency at reasonable times and locations. For ahazardous waste, each shipping paper copy must be retained for three years after the material is accepted by the initial carrier. For all other hazardous materials, each shipping paper copy must be retained by the operator for one year after the material is accepted bythe initial carrier. Each shipping paper copy must include the date ofacceptance bythe carrier. The date on the shipping paper maybe the date a shipper notifies the air carrier that a shipment is ready for transportation, as indicated onthe air bill or bill oflading, as an alternative to the date the shipment is picked up or accepted by the carrier. Only an initial carrier must receive and retain a copy ofthe shipper's certification, as required by §172.204 ofthis subchapter. (2) Retain a copy ofeach notification ofpilot-in-command, an electronic image thereof, or the information containedtherein for 90 days at the airport of departure orthe operator's principal place ofbusiness. (3) Have the information required to be retained under this paragraph readily accessible at the airport ofdeparture and the intended airport ofarrival for the duration ofthe flight leg. (4) Make available, upon request, to an authorized official ofa Federal, State, or local government agency (including an emergency responder(s)) at reasonable times and locations, the documents or information required to be retained bythis paragraph. Inthe event ofa reportable incident, as defined in §171.15 ofthis subchapter, make immediately available to an authorized official ofa Federal, State, or local government agency (including an emergency responders), the documents or information required to be retainedbythis paragraph. (5) Retain a copy ofthe alternative written documentation when provided in accordance with §173.185(c)(4)(v)(B) ofthis subchapter or an electronic image thereof, or the information contained therein for 90 days atthe airport ofdeparture or the operator's principal place ofbusiness.· (d) The documents required by paragraphs (a) and (b) this section may be combined into one document ifit is given to the pilot-in-command before departure ofthe aircraft. ·

B. Sanctions guidance FAA Order 2150.3B Appendix C sets for the penaltypolicy ofthe FAA. 31 As a general matter, a sanction shouldbe imposedthat is a sufficient deterrent butnot excessive, in order to

31 Folsom'sAirService, Inc., FAA Order No. 2008-11, 2008 WL 4948488 (November 6, 2008). 24comply with the underlying purposes ofthe Federal hazardous material transportation law and HMR. The FAA considers a variety offactors when determining an appropriate civil penalty, including: (I) the nature and circumstances ofthe violation; (2) the extent and gravity ofthe violation; (3) the person's degree ofculpability; (4) the person's history ofpriorviolations, if any; (5) theperson's ability to pay thecivilpenalty; (6) the effect on the person's ability to stay in business; and (7) other matters asjustice mayrequire32 Any determination ofpenalty should weigh whether the violation was inadvertent or deliberate, the private or public character ofthe violation, and the attitude ofthe violator. 33 The agency should also considerthe respondent's size, particularly in determining the offender's ability to absorb the sanction. An appropriate civil penalty must reflect the totality ofthe circumstances surrounding the violations. EasternAir Center, Inc., FAA Order No. 2008-3 (January 28, 2008). Finally, the civil penalty shouldprovide sufficient incentive to deter the respondent and similarly-situated entities from future violations. Folsom'sAirService, Inc., Id, p. 20. The FAAhas the burden of justifyingthe amount ofcivil penalty sought.34 The FAA's proposed sanction is no more than a proposal or a recommendation to the ALJ35 The FAA must prove to the AUhowitused the sanction guidance to arrive at its proposal36 The FAA must also prove the existence ofaggravating factors and must showhowitused aggravating or mitigating factors to adjust the suggested sanction. Evidence ofswift comprehensive corrective action mustbe considered as a mitigating factor. Significant weight has been given to respondent's efforts to ensure that a violation will not reoccur37 Thetestimony ofa credible, independent witness maybe sufficient to prove financial hardship, even without supporting documentary evidence38
FAA Order 2150.3B states: When a single instance ofnoncompliance results in multiple violations ofgeneral and specific regulations involving the same or similar conduct, the FAA ordinarily does not compound the sanctionto reflectthe amount ofsanction recommended inthe table for each regulatory violation

....39 IfFAA enforcementpersonnel were simply to add the recommended amounts ofpenalty for each flight or day that constitutes a separate violation, the resulting sanction amount could be

32 Id. See also EasternAir Center, Inc., FAA OrderNo. 2008-3, 2008 WL 345386 (2008). 33 Pinnacle Airlines Inc., FAA Order 2009-0180, 2009 WL 4796753 (December II, 2009). 34 In The Matter ofPhyllis Jones Luxemburg, 1994 WL 899676 (1994), citingIn the Matter of NorthwestAirlines, FAA OrderNo. 90-37 at 7 (November 7, 1990). 35 In the Matter of EasternAir Center, Inc., FAA OrderNo. 2008-3, 2008 WL 345386 (2008). 36 In the Matter ofWarbelow'sAir Ventures, Inc., FAA Order 2000-3, 2000 WL298578 (2000). 37 In the Matter of AmericanAirNetwork, Inc., FAA OrderNo. 2006-5, 2006 WL 465369 (2006). See also In the Matter of AirtranAirways, Inc., DocketNo. FAA- 2010-0193, Initial Decision (June 23, 2010). 36 In the Matter ojB!ueRidgeAirlines, FAA Order No. 99-15, 1999 WL 1279832 (1999). 39 FAA Order 2150.38, Chapter 7, 6 c. pages 7-10 and 7-11. 25disproportionately harsh for the misconduct involved, in an average case. XI. Argument ofthe parties A. Violations Martinaire was charged with violations of49 

### C.FR.:

a. Section I75.33(a) (I) (49 

### C.FR.§ I75.33(a) (I) inthat it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilotin-command the proper shipping name, hazard class and identificationnumber of the hazardous material aboard the aircraft. b. Section I75.33 (a) (I) (i) (49 

### C.FR.§ I75.33 (a) (I) (i) in that it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilot-in-command the proper shipping name, hazard class, identification number and any additional descriptionrequirements provided in §§ 172.202, and 172.203 ofthe hazardous material aboard the aircraft.

c. Section 175.33(a) (7) (49 

### C.FR.§ I75.33(a) (7) in that it accepted hazardous material aboard an aircraft for transportationby air and failed to provide the pilotin-command the date ofthe flight. B. Testimony and evidence Martinaire admitted each ofthe allegations in the Complaint. Martinaire was a Group II carrier as defined in FAA Order 2150.3B: Group II is comprised ofair carriers and other commercial operators that have an arrnual operating revenue ofless than $100,000,000, and have 50 or more pilots and operate 25 ormore aircraft. Other aircraft operators ofthe same size are included in Group II for hazmat sanction guidance purposes. The testimony from all witnesses was consistent that: most major carriers had NOPlCs prepared and provided to their flight crews; Martinaire's pilots received HazMatparcels from UPS orDHL, accompanied by UPS- or DHL-preparedtickets containing all ofthe data specified in the cited HMR's (except for flight number and specific location ofthe cargo within the aircraft); before departure Martinaire pilots called the NOPIC information into dispatch; dispatch personnel transcribed this information onto aNOPIC form and inserted the form into the "90-day file"; pilot copies ofthe NOPIC's were discarded after each flight; the dispatch copy ofthe NOPIC was retained for 90 days. There was no evidence or testimony thatthe FAA inspected any ofthe pilot generated NOPICs. 

### 26There was no evidence ortestimony that Martinaire pilots involved did not receive nor have in their possession during any ofthe flights the information required by the regulations. The FAA did not allege and did not produce any evidence that pilot-in-commandNOPIC's were in any way deficient or thatthe pilots in command did not possess required NOPIC information. There was no evidence or testimony that there was any regulatory authority, FAA handbook, order or other publicly available information which mandated that a NOPIC be prepared or givento first responders, nor be available to first responders. The testimony ofthe FAA's witnesses was to the contrary. The FAA's witness testified the FAA has never, ever sought civil penalties for NOPIC violations in excess of$200,000. C. Penalty 

### 1. FAA Position: The FAA arguedthat based on the totality ofcircumstances in this case a civil penalty of $206,550.00 was warranted and reasonable. The FAA presented testimony and evidence, consistent withpolicy guidance, showing the penalty was supported be evaluating the five (5) factors and assigning them appropriate weight. (64 Fed Reg. I9443 (Apr.21, 1999); FAA Order 2150 38, Appendix C, FAA Sanction Guidance, Hazardous Materials Enforcement (October I, 2007)). The FAA argued a penalty calculated in accordance with the FAA's policy guidance should stand, absent a showing ofthe Respondent'sinability to pay, inability to continue to do business, or some other matter required byjustice. Financial hardship was an affirmative defense that the respondent bore the burden of proving. In re TWA, FAA OrderNo. 1999-120; In re Dominion Concepts, Inc., FAA OrderNo. 2005-4, I0, n.l6 (Mar. I0, 2005). The FAA argued it was entitledto substantial deference in establishing an appropriate civil penalty. The United States Court ofAppeals for the District ofColumbia Circuit in NL Industries, Inc. v. Department ofTransportation, FederalAviationAdministration, 901 F.2d 141 (1990), enunciated the standardbywhich to evaluate the reasonableness ofa civil penalty assessed underthe Federal hazardous material statute. The courtheld that the agency's "choice ofa sanction is notto be overturned unless 'it is unwarranted in law' or 'withoutjustification in fact."' NL Industries at p .144 (quotingPanhandle CooperativeAss'n v. EPA, 771 F.2d 1149, 1152 (8th Cir. 1985) (quoting Butz v. GloverLivestock Comm'n Co., 411 U.S. 182, 185-186, 93 S.Ct. 1455, 1457-58,36L.Ed. 2d 142 (1973)). Thus, the amount ofcivil penalty assessed in a particular case was a matter ofadministrative discretion. See, Beall Construction Co. v. Occupational Safety & Health Review Commission, 507 F.2d 1041, 1046 (8th Cir.l974); Tempo Trucking & Transfer Corp. v. Dickenson, 405 F. Supp. 506, 514 (E.D.N.Y. 197 5). 2. Martinaire position 27Excessive, unreasonable and unwarranted Martinaire argued the $206,550 Civil Penalty was excessive, unreasonable and unwarranted and no regulatory violation occurred. Citing the HMR, Martinaire argued the operator must provide the pilot-in-command with accurate and legible writteninformation. It further argued nothing in that regulation, nor for that matter in any other regulation, FAAhandbook, order or other publicly available information that mandatedthat aNO PIC be prepared or given to first responders. Martinaire pointed out that all the testimony was consistent andthat the NOPICs inspected were prepared bydispatchers from information communicated to them bythe pilots. The FAA did not knowwhat the pilotNOPICs did or did not contain. Martinaire argued the two prior violations and the December 2013 inspection were not indicative ofa systemic corporate culture guilty ofregulatory disregard. Martinaire settled both cases without admission ofliability or wrongdoing. Martinaire argued the totality ofthe facts did not establish a pattern ofconduct ofHMR violations. All witnesses testified that regardless ofwhat was contained inthe dispatch copies ofthe NOPlCs, the pilots had the UPS and DHL coupons containing the information required by the HMRs.Consistency ofpenalty Martinaire argued the penalty sought was inconsistent with prior cases and cited the following examples: Order Assessing Civil Penalty, FAA Case No. 2012SW700081: Atlantic Southeast Airlines, Inc., involving 4 separate shipment,s ofoxygen generators, the last ofwhich was intentionally concealed. The FAA originally proposed a civil penalty of$88,000, but settled for $77,000.00; Order Assessing Civil Penalty, FAA CaseNo. 2011 SW700155: Southwest Airlines, involving the improper handling ofa battery powered wheelchair which resulted in the wet battery spilling. The FAA originally proposed a civil penalty of$42,500, but settled for $32,000.00; Order Assessing Civil Penalty, FAA CaseNo. 20l!SW700182: Ethiopian Airlines, involving the shipment ofoxygen generators without shipping papers and which had not been packed and labeled. The FAA proposed a civil penalty of$195,000, but settled for $160,000.00;

28Order Assessing Civil Penalty, FAA Case No. 2011SW700093: Federal Express Corporation, involving 9 acceptances ofhazardous materials without shipping papers. The FAA originally proposed a .civil penalty of$32,500, but settled for $24,500.00; OrderAssessing Civil Penalty, FAA Case No. 201OSW700184: Southwest Airlines, involving the shipment ofa fuel control unit which had not been drained and which containedfuel and the package had notbeenmarked or labeled. The FAA originally proposed a civil penalty of$78,000, but settled for $62,000.00; Order Assessing Civil Penalty, FAA Case No. 2010SW700147: ExpressjetAirlines, Inc., involving that carrier's offering for shipment an oxygen compressor which was not only not markedto showthatit was a hazardous material, butwas marked to showthat it was a non-hazardous material. TheFAAoriginally proposed a civil penalty of$5,500.00, but settled for $5,000.00; OrderAssessing Civil Penalty, FAA Case No. 2008SW700060: American Airlines, Inc., for sevenNOPIC violations. The FAA originallyproposed a civil penalty of$49,000.00, but settled for $41,500.00; Order Assessing Civil Penalty, FAA Case No. 2008SW700102: AmericanAirlines, Inc., for six NOPIC violations. The FAA originally proposed a civil penalty of$63,600.00, but settled for $45,000.00; Order Assessing Civil Penalty, FAA Case No. 2008SW700123: American Airlines, Inc., for 13 NOPIC violations. The FAA originally proposed a civil penalty of$32,000, but settled for $22,500.00; Order Assessing Civil Penalty, FAA Case No. 2010SW700146: Continental Airlines, Inc., for eightNOPIC violations. The FAAhad proposed a civil penalty of$35,850.00 but settled for $32,000.00; and OrderAssessing Civil Penalty, FAA Case No. 2007SW700311: World Airways, Inc., for oneNOPIC violation involving the acceptance and carriage ofbiohazardous materials in the cabin ofa passenger aircraft without shipping papers. The FAAhad proposed a civil penalty of$32,500.00 but settled for $25,000.00. Mitigation As evidencedby Exhibit R-1 and the testimony ofthe FAAwitnesses and Mr. Rusinowitz, Martinaire's response to the FAA inspection ofJuly 8, 2011, and its implementation ofcorrective actions was swift, immediate and comprehensive, consistent with Order 2150.38, Page C-11. Specifically: 1. Withinthree days ofthe audit and FAA out briefing, Martinaire revised, printed and disseminated a newNOPIC form; 292. Within days, Martinaire revised its HazMat training programfor pilots and dispatchers; 3. Within days, dispatchers underwent supplemental HazMattraining; 4. Within days, Martinaire's ChiefPilot sent a broadcast email to all pilots instructing them onhow to prepare the revisedNOPIC and then sent a follow-up broadcast email to them on July 26, 2011; and 5. Martinaire implemented additional corrective actions, including daily auditing of NOPIC's, to ensure accuracy. FAAwitnesses testified they were satisfied withthese corrective actions and there was nothing more Martinaire couldhave done. With respectto the December 2013 inspection which revealed similarNOPIC discrepancies, the evidence was clear and uncontroverted that Martinaire devoted immediate and undivided attention to their corrective action, spent countless time and resources in developing a computer software program to remove any possibility or chance ofhuman error from the NOPIC transcription/preparation process and did so at considerable expense to Martinairc. Ability to pay According to sworn testimony ofMartinaire's witness, Martinaire did not earn a profit in 2012 or 2013 and was not earning a profit in 2014 as ofthe time ofthe hearing. The testimony was unrebutted.

XII. Outstanding motions 1. FAA's Motion to Add Exhibit The FAA filed a Motionto AddExhibit dated June 11, 2014. The FAA seeks to supplement its exhibit with Special Agent Paul Klimas' statement, identified as exhibit 100.01. The FAA argues Opposing Counsel was given a copy ofthese documents with Complainant's EIRdisclosure, which

**~as** providedpriorto the Informal Conference. Martinaire filed its objection on June 12,2014. A hearing was held June 18, 19 and 20,2014, inclusive, in, Dallas, TX 75202. The time for presentation and admission ofevidence and testimony has passed. The motion will be denied. 2. Martinaire outstanding motions a) Motion in LimineNo. 1-Motionto Preclude Complainant's Evidence Relating to Computation and/or Reasonableness ofSanction

30In its Motionto Preclude Complainant'.s Evidence Relating to Computation and/or Reasonableness ofSanction Martinaire prays: 1. Complainantbe excluded from submitting any evidence as to how it determined the appropriateness ofand/or calculated the subject sanction; and 2. Complainant's counsel be ordered not to make any mention or reference thereto inopening statements, during trial, in argument or closing, and to direct persons under their control likewise to avoid suchmention. Martinaire's arguments were set forth in its Motion. Itargued the gross disproportion between the Sanction Guidance tables, as well as any sanctions previously sought by the FAA against any other air carrier for similar violations, and the sanction sought in this matter, absent any evidence ofhow Complainant arrived at said amount, suggestedthat there was no basis for the amount sought. The FAA responded on May 27,2014, arguing in effect that Martinaire's prayer for relief violated case law and was directly contrary to the U.S. Department ofTransportation Federal Aviation AdministrationNational Policy Order 2150.3B ("FAA Order 2150.3B"). "In determining the amount ofthe penalty, the decisioJW1aker must consider the 'nature, circumstances, extent and gravity ofthe violation,' and with respect to the violator, 'the degree of culpability, any history ofprior violations, the ability to pay, and any effect on the ability to continue to do business,' and 'other matters thatjusticerequires"' (49 U.S. C.§ 5123 (c)). In addition, the FAA Order 2150.3B stated "in determining the sanction to be assessed, penalty criteria set forth in49 U.S. C.§ 5123 must be considered." To make this determination, the Court must hear from the Federal Aviation Administration's ("FAA") witnesses who have investigated Martinaire's conduct in this case. The FAA witnesses were familiar with the factors set forth in 49 U.S. C.§ 5123(c) as they related to Martinaire's violation ofthe hazardous material regulations. Consequently, the FAA requestedthat the Court deny Martinaire's request for an Order as stated above because it was contrary to case law and the FAA's Order 2150.38. Examination ofthe record reveals the FAA submittedno evidence or testimony ofhow it determined the appropriateness ofand/or calculatedthe subject sanction. The FAA's statements with respect to the penalty were primarily conclusions unsupportedby the record, as set forth herein. The Motionwill be denied. The objection will go to the weight giventhe FAA's argument on sanction. b) Motion in Limine No.2. -Motionto Preclude Testimonyby PersonsNot Previously Identifiedby Complainant and Complainant's Expert Witness and/or Opinion Testimony · In its Motion to Preclude Testimony by Persons Not Previously Identified by Complainant and Complainant's Expert Witness and/or Opinion Testimony dated May 29, 2014, Martinaire prayed we issue an Orderprecluding:

31I. Testimony ofpersons notpreviously identified by Complainant inprehearing discovery; 2. Messrs. Klimas and Buchananfrom testifying in Complainant's case in chiefwith respectto the facts and violations alleged in the Complaint, as those facts and violations have been deemed established under the Order Granting in Part and Denying in Part Complainant's Motion for Decision; 3. Messrs. Klimas and Buchananfrom testifying in Complainant's case in chiefwith respect to the appropriateness or reasonableness ofthe sanction; 4. Expert witness testimony; and 5. Opinion testimony. In its response received May 27,2014, the FAA averred it intended to call both ofthese witnesses to testify about the civil penalty factors listed in 49 US. C. 

### § 5123(c) as it pertained to the Martinaire's hazardous material violations. These criteria included the nature, circumstances extent and gravity ofthe violation; the degree ofculpability ofthe violator; the history ofpast violations (ifany); the ability to pay; the effect on the ability to continue to do business; and other matters asjustice requires. Two witnesses testified onbehalfofthe FAA BryanBuchanan and Paul Klimas. Both were identified in discovery and deposed. The court finds their testimony was relevantto the issues before the court. The Motionwill be denied. The objection will go to the weight given the FAA's argument on sanction. c) Motionin Limine No. 3 -Motionto Preclude Testimony that HMR Section 175.33 Has BeenPromulgated and Serves to Assist First Responders In its Motion to Preclude Testimony that HMR Section 175.33 Has Been Promulgated and Serves to Assist First Responders dated May 14, 2014, Martinaire prayed we prohibit: 1. Any testimony or other evidence as to the.purpose ofthe NOPIC other than those specifically enumerated in HMR Section 175.33; and 2. Preclude the offering or receipt ofany testimony or other evidence that NOPIC's are required to assist first responders in the event ofan aircraft mishap. The FAA, in its response dated May 23,2014, statedthe overall purpose ofthe Federal Hazardous Material TransportationLaw and the Hazardous Material Regulations was safety as forth in the statute. In addition, the FAA averred, the regulation sought to protect not only the pilot-in-command, but to insure safety for anyone whether the pilot, a person on the ground, or a first responder. This goal was consistentwiththe regulatory purpose ofthe hazardous material regulatory scheme-safety. The statute speaks for itselfand will be reviewed and applied accordingly.

32The Motion will be denied. The objectionwill go to the weight given the FAA's argument on sanction. XIII. Analysis ofEvidence, Testimony and Law As a result ofinspections in 2011 and 2013, Martinaire was charged with the following violations of49 C.F.R.:

a. Section 175.33(a) (I) (49 C.F.R. § 175.33(a) (1) inthat it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilotin-commandthe proper shipping name, hazard class and identificationnumber of the hazardous material aboard the aircraft. b. Section 175.33 (a) (I) (i) (49 C.F.R. 

### § 175.33 (a) (1) (i) inthat it accepted hazardous material aboard an aircraft for transportationby air and failed to provide the pilot-in-command the proper shipping name, hazard class, identification number and any additional description requirements providedin §§172.202, and 172.203 ofthe hazardous material aboard the aircraft.

c. Section 175.33(a) (7) (49 C.F.R. 

### § 175.33(a) (7) inthat it accepted hazardous material aboard an aircraft for transportation by air and failed to provide the pilotin-commandthe date ofthe flight. Martinaire admitted the allegations set forth in the complaint. We found the violations alleged. The FAA argued thatthe penalty requested of$206,000 was not a high civil penalty, because air carriers are obligatedto perform their services withthe highest possible standard of care. Martinaire had two prior violations. One violation occurred because the pilot did not have NOPIC forms to fill out. The second violation occurredwhen a pilot, unbeknownst to Martinaire, purchased cleaning fluid to cleanthe plane, then stowed it withhis personal baggage under the assumptionthe cleaning fluid need notbe declared. In December 2013 the FAA conducted another inspectionwhich disclosed additional discrepancies with NOP!Cs. The only records reviewed were the dispatch copies ofthe NOP!Cs, which all witnesses testifiedwere generated from information providedbythe pilots, butfilled out bythe dispatchers. None ofthe pilotNOPIC forms were inspected. With the exception ofthe dispatchNOPIC forms, there were no other violations found during the inspections ofMartinaire. Martinaire was cooperative and responsive to FAA's concerns with the NOPICs. The FAAhad a cooperative working relationship with Martinaire. Once notified ofthe NOPIC discrepancies, Martinaire took swift, comprehensive 33corrective action. The FAA was satisfied with Martinaire's responses to the July 2011 and 2013 investigations. There was nothing Martinaire should have done that it did not do in responding to the investigations. Martinaire was developing a computer program to deal with the NOPICs at considerable expense. The FAA arguedthese events evidence a systemic corporate culture guilty ofregulatory disregard. We disagree, especially in light ofMartinaire's swift and immediate actions to correct the problems identified. There were no publicly available documentation, opinions, anything which stated that the NOP!Cs were to be used for assisting emergency responders. Overthe past seventeen years (17), the average civil penalty that was sought by the FAA in NOPIC cases was somewhere between $30,000 and $50,000. The FAA has never sought a civil penalty for NOPIC violations in excess of$200,000. As setforth elsewhere, in determining the amount ofa civil penalty under this section, the Secretary shall consider-- (I) The nature, circumstances, extent, and gravity ofthe violation Martinaire was chargedwith and found to have violated the regulations. The FAA failed to inspect any pilotNOP!Cs. Testimony and evidence was that the dispatch records inspected were generated from information communicatedbythe pilot to the dispatcher, then transcribed by the dispatcher onto a copy ofthe NOPIC maintained in a 90cday folder at the dispatch office. The dispatch records were at best second hand information. 49 C.F.R. 

### § 175.33 requires the operator ofan aircraft to provide the pilot-incommand with accurate and legible written information. The regulations sets forth no additional requirements oruses for the information. There was no testimony and/or evidence that pilots-in-command did not have the information required by the regulation. (2) With respectto the violator, the degree ofculpability, any history ofprior violations, the abilitytopay, and any effect onthe ability to continue to do business The violations were admitted to byMartinaire. Thehistory ofprior violations was not evidence ofa systemic corporate culture guilty ofregulatory disregard, especially in light of Martinaire's swift and immediate actions to correct the problems identified and lack of violations with respectto otherrecords inspected. We make no conclusions withrespect to Martinaire's ability to continue in business. Itwas uncontroverted that Martinaire failed to make aprofit in 2012 and 2013 and had made no profit as ofthe date ofthe hearing in 2014. Itwas uncontroverted that 34Martinaire had fewer aircraft and employees that at the time ofthe 2011 violations. (3) Other matters thatjusticerequires. The FAA offered no rebuttal to Martinaire's assertions thatthe penalty requested was excessive, unreasonable and unwarranted. There was no evidence and/or testimony to suggest that the NOPIC discrepancies were anything other than transcription errors. There was no evidence and/or testimony thatthe pilots didnot have any and all information required by the regulations. The evidence and testimony was that Martinaire took swift, comprehensive correct action to correct the NOPIC discrepancies. The unrebutted evidence ofMartinaire was that the violations were inadvertent, not deliberate. The FAA argued the lower end ofthe penalty range was $5,000, the higher end $16,200 and the midpoint $10,600. There were seventeen (17) violations alleged. The FAAthen argued atotal penalty of$206,500 was therefore warranted and reasonable. The FAA failed to produce any testimony and/or evidence ofhow it arrived atthe figure of$206,500. Dividing $206,500 bythe number ofviolations results in a figure of$12,150 per violation. We are left to speculate howthe figures of$12,150 and/or $206,500 were determined. Additionally, all seventeen (17) violations were related to NOPIC discrepancies. While the informational discrepancies varied from NOPIC to NOPIC, the testimony and evidence demonstrated thatthe causation for the NOPIC discrepancies was the result ofpilots obtaining coupons from DHL/UPS upon delivery ofshipments, reviewing them, then calling the information into Martinaire dispatchers who transcribed what theyheard or thought they heard onto a "duplicate" copy ofthe NOPIC located at Martinaire. The "duplicates" were meant to be "acopy exactly like an original" butwere only as good as the information the dispatcherheard and/ortranscribed onto the form. The violations all relatedto the same procedural/operational error related to NO PIC informationbeing called into the dispatcher who transcribed an oral message onto aform. Martinaire had one defect in it operational procedures which generated all ofthe violations. While a penalty calculated in accordance with the FAA's policy guidance should stand, absent a showing ofthe Martinaire's inability to pay, the evidence and testimony did not support the penalty requested. While the FAA was entitled to substantial deference in establishing an appropriate civil penalty, we cannot ignore our role to evaluate the testimony and evidence. XIV. FINDINGS OF FACTS: After consideration and review ofall the evidentiary facts, testimony and evidence herein, by a preponderance ofthe evidence standard, we make the following findings offact: I. All the witnesses for both parties were credible.

352. Martinaire was a Part 135 cargo carrier; had less than ninety (90) employees; operatedthirty-four (34) aircraft, ofwhich it ownedtwenty-one (21); was a limited liability company, havingthree (3) members ofthe LLC. 3. In 2011, Martinaire earned inthe neighborhood of$200,000 inprofit; Martinaire did not earn a profit in 2012 or 2013; Martinaire had not earned a profit as ofthe date ofthe hearing in June 2014. 4. Over the three year period prior to the date ofthe hearing the number ofpeople employedbyMartinaire declined and the number ofaircraft operated by Martinaire had declined. 5. Ofthe thirty-four (34) aircraft operatedby Martinaire, thirty-one (31) were Cessna Caravans, which held approximately 3,000 pounds ofcargo, based on the average volume ofa UPS or a DHL shipment, about 450 cubic feet ofcargo; were flown by one pilot and had one engine. The other aircraft were Beech 1900 twinengine turboprop aircraft thatwere flown by one pilot and couldhold approximately 4,500 pounds ofcargo. 6. Martinaire was classified as a Group IIcarrier. 7. TheNOPIC forms maintained inthe dispatch 90-days folder contained numerous discrepancies. 8. Martinaire took swift, comprehensive, immediate corrective action. 9. There was no testimony and/or evidence that pilots-in-command did not have the informationrequired by the regulation. I0. Thehistory ofprior violations was not evidence ofa systemic corporate culture guilty ofregulatory disregard. 11. Martinaire admitted to seventeen (17) violations. 12. The seventeen (17) numerous inadvertent, multiple violations resulted from a single act or omission, i.e., NOPIC procedural defects (the PIC orally transmitting information from coupons to a dispatcher who transcribed what he/she heard or thought they heard onto a form). 13. Martinaire demonstrated a good cooperative attitude dealing with the FAA. 14. The FAA failed to prove the existence ofaggravating factors other than the citation ofseventeen (17) violations for the same conduct. 15. The FAA failed to demonstrate howit used the sanction guidance to arrive at its proposed penalty. 16. The FAA failed to demonstrate howits proposed civility penalty was appropriate to the alleged violation. 17. The FAAfailed to give adequate weight to matters in mitigation ofthe penalty requested. 18. Thepenaltyrequested herein was in substantial deviation from past penalties requested for similar violations. 19. Precedent dictates that a fine of$206, 550.00 would be an excessive penalty in the circumstances ofthis case. 20. A penalty of$12,150 is more commensurate withthe totality ofthe circumstances, including the nature, extent and gravity ofthe violation, degree of culpability, history ofpriorviolations, financial situation, ant other matters as justice may require, including aggravating and mitigating factors. 36

### 21. We find the FAA failed to carry his burden ofproofwith respect to the amount ofpenalty requested. WHEREFORE, evidence andtestimony having been heard and considered it be and is hereby ORDERED as follows:

a. The FAA's Motionto Add Exhibit dated June 11, 2014, and Martinaire's Response and Objection dated June 12,2014,having beenread and considered, the FAA's Motion to Add Exhibit be and is hereby DENIED; and b. Martinaire's Motionto Preclude Complainant's (FAA's) Evidence Relating to Computation and/or Reasonableness ofSanction and the FAA's response thereto having beenread and considered, Martinaire's Motion be and is hereby DENIED; and c. Martinaire's Motionto Preclude Testimony by Persons NatPreviously Identified by Complainant and Complainant's Expert Witness and/or Opinion Testimony and the FAA's response thereto having been read and considered, Martinaire's Motionbe and is hereby DENIED; and d. Martinaire's Motionto Preclude Testimonythat HMR Section 175.33 Has Been Promulgated and Serves to Assist First Responders having been read and considered and the FAA's response thereto having been read and considered, Martinaire's Motion be and is hereby DENIED; and e. Martinaire be and is hereby assessed a penalty in the amount of$12, !50.

Richard C. Goodwin U.S. Administrative LawJudge Attachment- Service List

37SERVICE LIST ORIGINAL & ONE COPY Federal Aviation Administration 800 Independence Avenue, S.W. Washington, DC 20591 Attention: Hearing Docket Clerk, AGC-430 Wilbur Wright Building-Suite 2Wl000 1 ONE COPY Michael L. Dworkin, Respondent's Counsel Michael L. Dworkin and Associates Law Offices 465 California Street, Suite 210 San Francisco, CA 94104-1808 TEL: 415-421-2500 FAX: 415-421 ., James Archier, Complainant's Counsel Agency Attorney, Office ofthe Regional Counsel Southwest Region Federal Aviation Administration 2601 Meacham Blvd., Suite 6E Fort Worth, TX 76137 TEL: 817-222-5074 FAX: 817-222-5092 The Honorable Richard C. Goodwin,Administrative Law Judge Office ofHearings, M-20 U.S. Department ofTransportation 1200NewJersey Avenue, S.E. (Ell-310) Washington, DC 20590 TEL: 202-366-5121 StaffAssistant FAX: 202-366-7536 FDMS No. FAA-2013-0040 (Civil Penalty Action)

1 Service was by U.S. MaiL For service in person or by expedited courier, use the fOllowing address: Federal Aviation Administration, 600 Independence Avenue, S.W., Wilbur Wright Building Suite 2W I000, Washington, DC 20591, Attention: Hearing Docket Clerk, AGC-430.38