ACTION ON APPEAL

Violation No. 1 - Allowing employees to perform functions subject to the HMR, when Respondent failed to: (1) provide some of its employees with initial or recurrent general awareness, function-specific and safety training; (2) test its employees subsequent to training; (3) certify that it had trained its hazmat employees who had undergone training; and (4) create and maintain records of training, in violation of 49 C.F.R. §§ 172.702(a), (b) and (c), 172.704(a)(1), (2) and (3), (c)(2) and (d).

Violation No. 2 - Offering for transportation and transporting in commerce various hazardous materials, when Respondent: (1) executed shipping papers that contained improper shipping descriptions, incorrect identification numbers that changed the response information, incorrect packing groups, addition unauthorized information in the description, incorrect shipping names, and technical names that were not distinguished with parentheses; and (2) executed shipping papers that failed to contain units of measure and that were comprised of multiple pages without bearing a notation of total pages upon the first page, in violation of 49 C.F.R. §§ 171.2(a) and (b), 172.201(a)(4) and (c), 172.202(a)(1), (3) and (4), 172.202(c) and (d) and 173.22(a).

Discussion

Respondent, on appeal, requests dismissal of the case based on four arguments.

First, the Respondent argues that the HMR are prejudiced because they do not treat all parties equally. Respondent specifically takes issue with the provision of the HMR that allows mitigation of penalties based upon a respondent's financial condition. The HMR provide that mitigation is appropriate where imposition of a penalty amount would be more than the respondent is able to pay or would have an adverse effect on the respondent's ability to continue in business. 49 C.F.R. Part 107, Subpart D, Appendix A, IV, D. Respondent argues that this provision allows financially failed companies to continue in business, to continue to violate the HMR, and to compete unfairly with more successful companies that do comply with the HMR.

RSPA determines penalties on a case-by-case basis using the civil penalty guidelines in 49 C.F.R. Part 107, Subpart D, Appendix A, and after considering each of the criteria set out in the Federal Hazardous Materials Transportation Law. Financial condition is one of these statutory criteria. The Federal Hazardous Materials Transportation Law states, "In determining the amount of a civil penalty under this section, the Secretary shall consider...with respect to the violator...the ability to pay and any effect on the ability to continue in business." 49 U.S.C. § 5123(c)(2). Where RSPA has information regarding a respondent's financial condition, it must take that information into consideration in determining an appropriate civil penalty.

Generally, where a respondent's financial condition is such that it is unable to pay or where payment would threaten a respondent's ability to continue in business, RSPA offers mitigation rather than forgiveness of penalties. RSPA considers financial condition on a case-by-case basis and reduces penalties or allows payment plans where appropriate. See Part 107, Subpart D, Appendix A, IV.

Contrary to Respondent's assertion, it is not the policy or practice of RSPA to allow continuing violations of the HMR. RSPA is not limited to civil penalty actions for enforcing the HMR and for bringing violators into compliance. Where there are willful or continuing violations of the HMR, RSPA may bring injunctive actions in the federal courts or refer cases to the Department of Justice for criminal prosecution. See 49 C.F.R. §§ 107.333, 107.335, 107.337 and 107.339.

In determining the civil penalty assessed in the Order, RSPA's Chief Counsel properly took into consideration the statutory criteria. RSPA is not aware of any legal authority that would call into question these statutory criteria and Respondent has not offered any.

Second, Respondent argues that the HMR are confusing, and that the HMR are intended to encourage violations, to assess penalties and to collect money. Respondent provides a critique of various parts of the HMR, finding some to be acceptable, some to be in need of improvement and some to require substantial revision.

While Respondent finds the HMR confusing and in need of revision, it does not point to any confusing language in those sections of the HMR that Respondent has been found to have violated. In fact, Respondent takes no significant issue with the sections cited in the Order.

In violation no. 1, RSPA found that Respondent had violated HMR requirements for providing training to hazardous materials employees. Respondent specifically cites 49 C.F.R. § 172.704 as acceptable. Furthermore, Respondent had reason to know of the requirements for training hazardous materials employees since RSPA enforcement action TKT-96-105-TRN-EA cited Respondent for the same violation.

In violation no. 2, RSPA found that Respondent violated various shipping paper requirements, including improper shipping descriptions and technical names. Respondent rates the shipping paper sections of the HMR as, "could be improved but the foundation is there." Respondent states that the Table of Hazardous Materials and Special Provisions and related sections require improvement, but does not explain how any confusion in those sections contributed to the violation. Moreover, Respondent receives Material Data Safety Sheets from its suppliers that contain proper shipping descriptions for each of its products.

The HMR organize a large amount of information and some sections are technical and detailed. However, each company transporting hazardous materials need only comply with the sections relating to its activities and its particular hazardous materials. Respondent cannot base an appeal of violations of sections which it admits are understandable. Neither can it base an appeal on alleged complexities in portions of the HMR that are not applicable to its hazardous materials or operations.

Respondent's assertion that the HMR are intended to encourage violations and to collect money simply misstates the nature and purpose of the HMR and RSPA's enforcement program. The purpose of the Federal Hazardous Materials Transportation Law and the regulations flowing from it are "to provide adequate protection against the risks to life and property inherent in the transportation of hazardous material in commerce." 49 U.S.C. § 5101. That purpose is reflected in the mission of RSPA's Office of Hazardous Materials Safety, which is "to promulgate a national safety program that will minimize the risks to life and property inherent in commercial transportation of hazardous materials." See hazmat.dot.gov/whoweare.htm. RSPA also assists the regulated community in complying with the HMR by offering training materials, providing interpretations of the regulations, and making information available on its website and through its toll-free information center.

Third, Respondent argues that an exchange between the Respondent's owner and RSPA's counsel during the June 5, 2003, Informal Conference is cause for dismissal of this case. The discussion, which Respondent characterizes as "very heated," concerned the sufficiency of documentation of corrective actions related to the hazardous materials training violation. Respondent believes that its April 11, 2003, letter certifying completion of training was sufficient to demonstrate that it had completed the training. The Order indicates that RSPA's counsel requested additional documentation showing that training had been completed in each of the three required areas. Generally, RSPA prefers to receive copies of direct evidence of training such as attendance rosters, training materials and training certificates rather than a summary certification, so the request for additional documentation was not inappropriate.

Respondent asserts that the exchange demonstrates that RSPA's counsel was prejudiced toward Respondent and was acting as a bully. The record indicates that RSPA's counsel took action to remove the added penalty for the prior ticket as being too far in the past, agreed to each request to extend Respondent's time to reply to the Notice, reviewed Respondent's shipping papers for correct format and responded to Respondent's questions regarding the HMR. RSPA's counsel twice offered to compromise the penalty amount and offered to consider Respondent's financial condition. RSPA's counsel provided information regarding the possibility of a payment plan and Respondent's right to appeal. These actions do not indicate prejudice or bullying.

Fourth, Respondent takes exception to various portions of the Order. Respondent also restates its position that the HMR are confusing and that Respondent has been subjected to prejudice and discrimination. Finally, Respondent argues that it did not receive sufficient credit for its corrective actions given its time, effort and money expended in undertaking corrective actions.

Respondent's exceptions and clarifications to the Order, even considered together and in the light most favorable to the Respondent, do not provide a basis to dismiss the case. Respondent does not dispute the information in the Inspection/ Investigation Report and the exhibits. Neither does Respondent allege that RSPA has failed to follow the procedural provisions of the HMR in bringing this civil penalty action.

Respondent believes that it should receive mitigation as a reshipper since it receives hazardous materials from suppliers and forwards them to customers without repackaging the hazardous materials. RSPA will discount the applicable baseline penalty for a shipper that forwards a noncomplying packaging without opening or altering the packaging. See Part 107, Subpart D, Appendix A, IV, B. In this case, however, the violations do not involve noncomplying packagings and Respondent was not acting in reliance on a prior shipper. Respondent prepared its own shipping papers and was solely responsible for training its employees.

As to mitigation for corrective actions, the baseline penalty amount (without any increase for prior violations) for the two violations is $6,750. As stated in the Order, the Notice amount should have been $6,225 after a $525 reduction for corrective action. The Order further reduced the penalty amount by $1,325 (21% from the Notice penalty) for corrective actions, size and unspecified other factors.

In reviewing the record, Respondent appears committed to meeting the requirements of the HMR and has taken prompt and substantial actions to correct the violations and to prevent recurrences. As noted before, RSPA prefers to receive source documents as evidence of corrective actions rather than summaries, and RSPA will require that Respondent produce actual training records rather than summaries in any future inspection. However, in this instance, I will accept Respondent's certification as sufficient evidence of completion of training and provide full mitigation for its corrective actions. Taking into consideration Respondent's corrective action and status as a small business, I will further reduce the penalty amount as follows:

• Violation 1 - $1,050 reduced from $1,170 in the Order.
• Violation 2 - $3,300 reduced from $3,730 in the Order

Respondent states that it is "angry, upset and disappointed" by what it believes to be unfair treatment. These feelings appear to have arisen from misunderstandings and/or miscommunication between RSPA and Respondent. While this breakdown in communication is regrettable, it does not constitute sufficient cause to dismiss this case. Respondent has not challenged the evidence or denied committing the violations. Neither has Respondent demonstrated that RSPA failed to follow the procedures set out in the HMR or failed to provide Respondent notice and opportunity for a hearing. Beyond adjusting the penalty amount, no further relief is warranted.

Findings

I have determined that there is not sufficient information to warrant dismissal of this case. I have determined that further mitigation of the civil penalty assessed in the Chief Counsel's Order is warranted. I find that a civil penalty of $4,350 is appropriate in light of the nature and circumstance of these violations, their extent and gravity, Respondent's culpability, the date of Respondent's 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, the Order of August 14, 2003, is modified as to the penalty amount only. In all other regards, the Order 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.

Form of Payment

Due date. The first $435 of the payment plan is due within 30 days of the date of this Action on Appeal. An additional $435 is due each 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. Respondent may make full payment of the penalty amount or outstanding balance at any time.
Payment Method. Respondent must pay the civil penalty by (1) wire transfer, (2) certified check or money order, or (3) credit card via the Internet:

(1) Wire Transfer.

Detailed instructions for sending a wire transfer through the Federal Reserve Communications System (Fedwire) to the account of the U.S. Treasury are contained in the enclosure to this Order. Please direct questions concerning wire transfers to:

Financial Operations Division (AMZ-120)
Attn: Jacqueline Murphy
Federal Aviation Administration
Mike Monroney Aeronautical Center
P.O. Box 25082
Oklahoma City, OK 73125
Telephone (405) 954-4719.

(2) Check or Money Order.

Make check or money order payable to "U.S. Department of Transportation" (include the Ref. No. of this case on the check or money order) and send to:

Financial Operations Division (AMZ-120)
Federal Aviation Administration
Attn: Jacqueline Murphy
Mike Monroney Aeronautical Center
P.O. Box 25082
Oklahoma City, OK 73125.

(3) Credit Card.

To pay electronically using a credit card, visit the following website address and follow the instructions:

http://hazmat.dot.gov/hmenforce.htm

If Respondent pays the civil penalty by the due date, no interest will be charged. If Respondent does not pay by that date, the FAA's Financial Operations Division will start collection activities and may assess interest, a late-payment penalty, and administrative charges under 31 U.S.C. § 3717, 31 C.F.R. § 901.9, and 49 C.F.R. § 89.23.

The rate of interest is determined under the above authorities. Interest accrues from the date of this Action on Appeal. A late-payment penalty of six percent (6%) per year applies to any portion of the debt that is more than 90 days past due. The late-payment penalty is calculated from the date Respondent receives the Order.

Treasury Department Collection.

FAA's Financial Operations Division may also refer this debt and associated charges to the U.S. Department of the Treasury for collection. The U.S. Department of the Treasury may offset these amounts against any payment due Respondent. 31 C.F.R. § 901.3.

Under the Debt Collection Act (see 31 U.S.C. § 3716(a)), a debtor has certain procedural rights prior to an offset. You, as the debtor, have the right to be notified of: (1) the nature and amount of the debt; (2) the agency's intention to collect the debt by offset; (3) the right to inspect and copy the agency records pertaining to the debt; (4) the right to request a review within the agency of the indebtedness and (5) the right to enter into a written agreement with the agency to repay the debt. This Action on Appeal constitutes written notification of these procedural rights.

Final Administrative Action

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

/S/

Date Issued:       November 4, 2003

Enclosure

Original to:    Action Paper & Chemical Co., Inc.
                230 Quigley Blvd
                New Castle, DE 19720
                ATTN: Mr. Alan Glazar
                President