______________________________
                              )
In the Matter of Chec Soda    )
and Refrigeration Co., INC.,  )
                              )  Ref. No. 95-93-SC-HQ
                              )
                              )
Respondent.                   )
______________________________)

On October 30, 1997, the Chief Counsel, Research and Special Programs Administration (RSPA), U.S. Department of Transportation, issued an Order to Chec Soda and Refrigeration Co., Inc. (Respondent) assessing a penalty in the amount of $15,000 for four violations of the Hazardous Materials Regulations (HMR), 49 C.F.R. Parts 171-180.

The Order, which is incorporated herein by reference, found that Respondent knowingly offered carbon dioxide in cylinders for transportation in commerce without placarding its vehicles containing the carbon dioxide cylinders (violation No. 1), without labeling the cylinders (violation No. 2), without describing the hazardous material on a shipping paper (violation No. 3), and without training its employees that performed functions subject to the HMR (violation No. 4), in violation of 49 C.F.R. ¤¤ 171.2(a), 172.200(a), 172.400(a), 172.500(a), 172.702(a) and 172.704(a).

The Order reduced the $19,570 civil penalty originally proposed in the April 28, 1995 Notice of Probable Violation (Notice). By letter dated November 7, 1997, Respondent submitted a timely appeal of the Order.

Discussion

Respondent rents, services, and installs soda equipment, including cylinders of carbon dioxide, a hazardous material. In this case, RSPA's inspectors observed two of Respondent's trucks, loaded with carbon dioxide cylinders ready for delivery, that were not placarded. The cylinders did not have the required labels (the photographs in the inspection report are not clear enough to show whether the cylinders were marked as required). There was no shipping paper describing the shipments of hazardous material, as required. Further investigation revealed that Respondent had not provided the required hazmat training to its employees that fill and deliver these cylinders.

Respondent does not deny that it failed to comply with the HMR's requirements for hazard communication and training. In its appeal, it challenges the statement in the Order that Respondent "knowingly" committed these four violations of the HMR. It also states that "the shipping papers submitted which you state were incorrect was a result of incorrect information furnished us by DOT representatives several different times." On the same day as its appeal letter, Respondent wrote Senator John Warner, of Virginia, stating:

1. Offering for transportation in commerce a hazardous material, hydrochloric acid solution, in unauthorized packagings (fiberboard boxes containing one-gallon plastic bottles that were not strong enough for their contents and lacked any marking that they met an authorized specification or performance standard), in violation of 49 C.F.R. §§ 171.2(a) and 173.263(a) (as authorized until October 1, 1996) or, alternatively, 49 C.F.R. §§ 171.2(a) and 173.202 (as authorized on and after January 1, 1991).

I still maintain since corrective action has been taken on alleged violations that the assessed civil penalty of $15,000 is extreme, particularly for a small business and should not be imposed.

I would appreciate any help you might be able to render to void this penalty.  

As explained in the Notice and further correspondence, the "knowingly" standard does not require proof of intentional or willful conduct. Respondent need not actually know of, or intend to violate the regulations; rather, it must have actual or constructive knowledge of the facts giving rise to the violations. There is no evidence that Respondent was unaware of the facts that its vehicles were not placarded, the carbon dioxide cylinders were not labeled, that there were no shipping papers describing the carbon dioxide cylinders, and that its employees had not been trained in the three required subject areas (general awareness, function-specific, and safety). In response to an inquiry from my staff following Respondent's appeal, Respondent recited the actions it had taken to correct these violations; it failed to provide any information to show that it was unaware of the facts that gave rise to these violations.

Respondent also failed to provide any support for its general assertion that unnamed "DOT representatives" furnished incorrect information about shipping papers. Although asked for details as to who provided this allegedly incorrect information, when it was provided, and in what form, Respondent simply responded: "A vague inexact guideline had been provided to us in the past." This is insufficient when Respondent provided its driver with only a delivery list, by location, and completely failed to prepare any shipping paper that described the carbon dioxide cylinders in accordance with the HMR's requirements.

Respondent's corrective actions were properly and appropriately considered in the Order, and the penalty originally proposed in the Notice was reduced by approximately 25%, to $15,000, in accordance with RSPA's penalty guidelines. See Section IV.A. to Appendix A to 49 C.F.R. Part 107, subpart D. However, Respondent's corrective actions cannot justify completely waiving penalties for the serious, long-standing violations in this case.

These are serious violations that appear to have continued, on a regular basis, over many years. The combined lack of placards, labels, and shipping papers means that, in the event of an accident, there would have been essentially no information to alert emergency responders that hazardous materials were being transported, or the nature of those materials. Moreover, Chec Soda's drivers and other employees were not trained in either the HMR's requirements applicable to transporting these cylinders or safety measures to protect themselves from the hazards associated with this material and the methods and procedures for avoiding accidents. It is only good fortune that Respondent's employees or emergency responders have not been injured from the carbon dioxide in an accident.

Although the company has declined to provide specific financial information, a January 1998 Dun & Bradstreet report indicates that Chec Soda has only six employees. In its letter to Senator Warner, it stressed that it is a small business. Based on the company's small size, I am reducing the penalty to $12,000 and allowing payment in 12 monthly installments of $1,000 each. The total penalty is allocated to the four violations as follows:

Violation  No. 1 (placards)		- $5,000
Violation  No. 2 (labels)		- $2,500
Violation  No. 3 (shipping papers)	- $3,500
Violation  No. 4 (training)		- $1,000

Findings

I have determined that there is sufficientto warrant mitigation of the civil penalty assessed in the Chief Counsel's Order. I find that a civil penalty of $12,000 is appropriate in light of the nature and circumstances of these violations, their extent and gravity, Respondent's culpability, Respondent's lack of prior offenses, Respondent's ability to pay, the effect of a civil penalty on Respondent's ability to continue in business, and all other relevant factors.

Therefore, as modified herein, the Order of October 30, 1997, is affirmed as being substantiated in the record and as being in accordance with the assessment criteria prescribed in 49 C.F.R. ¤ 107.331. The $12,000 civil penalty is payable in 12 monthly installments of $1,000 each, with the first payment due within 30 days of the date of issuance of this Action on Appeal and each succeeding payment due every 30 days thereafter until the entire amount is paid. If Respondent defaults on any payment of this payment schedule, the entire amount of the remaining civil penalty shall, without further notice, become immediately due and payable as of the date that the first installment is due.

Form of Payment

Each installment payment must be made in one of the following two ways:

(a)     by wire transfer, through the Federal Reserve Communications System (Fedwire), to the account of the U.S. Treasury. Detailed instructions are contained in the enclosure to this Order. Questions concerning wire transfers should be directed to: Financial Operations Division (AMZ-320), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25770, Oklahoma City, OK 73125 (Telephone 405-954-4719).

(b)     by sending a certified check or money order (containing the Ref. No. of this case) payable to "U.S. Department of Transportation" to the Financial Operations Division (AMZ-320), Federal Aviation Administration, Mike Monroney Aeronautical Center, P.O. Box 25770, Oklahoma City, OK 73125.

Note: Any single payment of more than $10,000 (if Respondent elects to combine payments or pay the entire penalty in one payment) may only be made by wire transfer, as described in (a), above.

If the $12,000 civil penalty is paid in accordance with the terms of this Action on Appeal, no interest will be charged. If, however, the civil penalty is not paid in accordance with the terms of this Action on Appeal, the Financial Operations Division of the Federal Aviation Administration will assess interest and administrative charges, and initiate collection activities on the debt and those charges. Interest on the debt will accrue from the date of issuance of this Action on Appeal at the applicable rate in accordance with 31 U.S.C. ¤ 3717, 4 C.F.R. ¤ 102.13, and 49 C.F.R. ¤ 89.23. Pursuant to those same authorities, a late-payment penalty of six percent (6%) per year will be charged on any portion of the debt that is more than 90 days past due. This penalty will accrue from the date this Action on Appeal is received.

Final Administrative Action

This decision on appeal constitutes the final administrative action in this proceeding.

/S/ Kelly S. Coyner
Kelley S. Coyner
Acting Administrator

Date Issued: June 1, 1998

Enclosure

CERTIFIED MAIL - RETURN RECEIPT REQUESTED

Original to:

Mr. Charles D. Curtis
President
Chec Soda and Refrigeration Co., Inc.
3410 Little Hunting Creek Drive
Alexandria, VA. 223009