______________________________
                              )
In the Matter of              )
                              )
CUSTOM CORRUGATED BOX CORP.,  )
                              )  Ref. No. 97-110-BM-EA
                              )
Respondent.                   )
______________________________)

On January 14, 1998, the Chief Counsel, Research and Special Programs Administration (RSPA), U.S. Department of Transportation, issued an Order to Custom Corrugated Box Corp. (Respondent) assessing a penalty in the amount of $7,400 for two 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 had knowingly represented, marked, certified, offered and sold fiberboard boxes, marked UN 4G as meeting the requirements of the HMR, when design qualification testing had not been conducted (violation No. 1), and that Respondent had failed to train its hazmat employees (violation No. 2), in violation of 49 C.F.R. ßß 171.2(c), 172.702(a), 172.704(a) & (d), 178.601(d), and 178.601(l). The Order modified the $9,900 civil penalty originally proposed in the May 30, 1997 Notice of Probable Violation (Notice).

By letter dated January 23, 1998, Respondent submitted a timely appeal of the Order.

Discussion

Both Respondent and its parent corporation, Key Container Corporation (Key), make and sell corrugated boxes. Between April 1996 and March 1997, Respondent made and sold to ULTRA Scientific Corporation more than 3,200 boxes marked "UN 4G/Y5/S/97/USA/CUSTOM CORRUGATED, LINCOLN, RI." This marking signified that these boxes had been successfully tested as meeting the UN 4G performance standard in the HMR. 49 C.F.R. ß 178.2(b); see also ß 178.503(a).

Following his observation of some of these packagings at ULTRA Scientific in February 1997, RSPA's inspector determined that Respondent had never had this packaging tested to the UN 4G performance standard, notwithstanding that its former sales manager had issued to ULTRA Scientific a written "Certificate of Compliance" dated September 9, 1996, stating that Respondent "manufactures and tests corrugated containers in compliance with the latest 49 CFR regulations." Exhibit 4 to report of inspection/investigation. When questioned by RSPA's inspector, Respondent's current sales manager admitted that Respondent had never trained its sales or production employees in the requirements for testing and certifying packagings to the UN performance standards. Exhibit 5.

Respondent has not denied these violations. In its written response to the Notice, Respondent stated that it purchases "all corrugated board" from Key and that "Key tests their board for mullin, edge crush, flat crush and pin adhesion strength." According to Respondent, "Key uses a dynamic compression tester . . . The end result is a corrugated container capable of safely transporting our customers goods." However, it is clear that neither Respondent nor its parent company ever tested this completed packaging. Respondent simply relied on a belief that "our performing these tests [of the corrugated board] attempts to accomplish much of the principle mentioned in" the stacking test requirements in 49 C.F.R. ß 178.606(c). At no time has Respondent provided evidence or mentioned the drop test requirements in ß 178.603.

After RSPA's inspector notified it of these violations, Respondent took appropriate corrective actions. Over the June-September 1997 period, Respondent had this box successfully tested by an independent third-party testing laboratory, first to the Packing Group III standard and, ultimately, to the Packing Group II standard (to which this box was originally marked). Respondent provided copies of the test reports along with a letter it had sent to ULTRA Scientific (after RSPA's inspection) with instructions on proper closure of the box (as required by 49 C.F.R. ß 178.2(c)). Respondent also conducted training on "hazardous materials packaging" on June 6, 1997 for its employees (as well as employees of Key), and it provided a copy of the training roster and the test administered at the conclusion of this training session.

Based on these documented corrective actions, the penalty proposed in the Notice was reduced by slightly more than 25%, to $7,400. Under RSPA's penalty guidelines, 25% is generally the maximum reduction for corrective action. See Section IV.A. of Appendix A to 49 C.F.R. Part 107, subpart D.

Respondent's appeal does not present any new information or arguments that justify further reduction of the penalty in this case. In its January 23, 1998 appeal letter, it simply refers to the materials previously submitted, which were fully considered before the Order was issued, and asks me to "reconsider the penalty and find that a stern warning is the appropriate remedy."

Although the issuance of warning letters is authorized by 49 C.F.R. ß 107.309, this is not an appropriate case for that sanction because of the serious nature of these two violations. As in this case, the absence of training is often the root cause of substantive violations of the HMR. Without testing, there is no assurance that a packaging will safely contain hazardous materials during normal transportation. Moreover, in addition to marking the UN performance standard certification on the outside of the box, Respondent separately certified in writing to its customer that the boxes had been "manufacture[d] and test[ed] in compliance with" the requirements in the HMR. In all of its previous submissions, Respondent has not adequately explained what appears to be a deliberate misrepresentation which, by itself, might well justify a greater penalty than assessed in the Order.

Findings

I have determined that there is not sufficient information to warrant mitigation of the civil penalty assessed in the Chief Counsel's Order. I find that a civil penalty of $7,400 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, the Chief Counsel's January 14, 1998 Order is affirmed as being substantiated in the record and as being in accordance with the assessment criteria prescribed in 49 C.F.R. ß 107.331.

Form of Payment

Payment must be made within 30 days in one of the following two ways:

(1) 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).

(2) 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.

If the $7,400 civil penalty is paid within 30 days of the date of issuance of this Action on Appeal, no interest will be charged. If, however, the civil penalty is not paid by that date, 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. ß 3717, 4 C.F.R. ß 102.13, and 49 C.F.R. ß 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: April 13, 1998

Enclosure

CERTIFIED MAIL - RETURN RECEIPT REQUESTED

Original to:
Mr. David A. Strauss, President
Custom Corrugated Box Corp.
P.O. Box 2410
Pawtucket, RI 02861

DCC-10: Hilder: 3-26-98