______________________________
)
In the Matter of Kesselring )
Gun Shop, Inc. )
) Ref. No. 98-108-SE-CE
Respondent. )
______________________________)
ACTION ON APPEAL
Background
On May 29, 1998, the Office of the Chief Counsel of the Research
and Special Programs Administration (RSPA), U.S. Department
of Transportation (DOT), issued an Order to Kesselring Gun
Shop, Inc. (Respondent) finding that Respondent had knowingly
committed the following two violations of the Hazardous Materials
Regulations (HMR), 49 C.F.R. Parts 171-180, and assessing
a penalty in the amount of $11,550:
1. Offering for transportation in commerce a hazardous
material, Propellant, solid, as smokeless powder for small
arms without using the proper shipping description, including
the proper shipping name, class, classification code, UN number,
and approval number. Respondent failed to adhere to the provision
in the HMR that allows shipping of Propellant, solid, as smokeless
powder for small arms if, among other requirements, the total
weight of the shipment does not exceed 16 pounds, 49 C.F.R.
§§ 171.2(a), 173.56, 172.202(a), 172.301(a)(1) and 172.400(a).
2. Offering for transportation in commerce a hazardous
material, Propellant, solid, in a non-standard packaging,
49 C.F.R. §§ 171.2(a), 173.60(a) and 173.62.
The Order, which is incorporated herein by reference, modified
the $15,400 civil penalty originally proposed in the March
16, 1998 Notice of Probable Violation (Notice). By an undated
letter, which was received by RSPA on June 23, 1998, Respondent
submitted a timely appeal of the Order.
Discussion
Respondent sells guns and ammunition and ships solid propellants
and smokeless powder for small arms to consumers across the
country. RSPA's Office of Hazardous Materials Enforcement
(OHME) received a complaint alleging that Respondent, as well
as several other companies, was misclassifying smokeless powder
shipments, repacking smokeless powder shipments in unapproved
packages, and transporting smokeless powder on company vehicles
in quantities exceeding 100 pounds. On March 13, 1997, an
OHME inspector visited Respondent to investigate the complaint
and conduct a compliance inspection of Respondent's facility.
At the time of the compliance inspection, the inspector was
unable to verify the allegations raised in the complaint.
The only violation of the HMR that the inspector did discover
was a minor training violation, for which Respondent was issued
a warning letter from OHME's Western Region. If the inspector
had discovered any additional violations, including ones alleged
in the complaint, the inspector would have immediately notified
Respondent of his findings and additional enforcement action
would have been taken against Respondent.
In September 1997, OHME's Central Region continued to follow
up on the complaint. Because several of the companies named
in the complaint only filled and shipped orders of smokeless
powder in response to specific orders, OHME determined that
the only way to properly investigate the complaint was to
place orders for smokeless powder with the named companies.
OHME placed such an order with Respondent and on October 1,
1997, received the shipment that is the subject of this appeal.
OHME, through a third party, ordered 23 pounds of smokeless
powder from Respondent. OHME did not give Respondent any instructions
on how to ship the product. Respondent shipped all 23 pounds
of the smokeless powder in one box. The box contained one
8-pound metal can, two 5-pound metal cans and five 1-pound
plastic bottles of powder. Federal regulations contain an
exception allowing propellant, solid, to be shipped as smokeless
powder if, among other things, it is packaged in inner containers
not exceeding 8 pounds, secured in a DOT-approved box that
has been tested to the highest standard, and the total weight
of the smokeless powder in any one box does not exceed 16
pounds. 49 C.F.R. § 173.171. In this case, the total net weight
of the smokeless powder in the box was 23 pounds. In addition,
the box Respondent used to ship the smokeless powder was originally
tested with four 8-pound metal containers. By Respondent's
changing the inner components of a box that had been previously
approved by DOT, the box was no longer DOT-approved and was
no longer authorized for shipment of hazardous materials.
The seriousness of the first violation is illustrated by
the fact that emergency personnel have different methods of
responding to an accident involving propellant, solid, which
is an explosive, and smokeless powder, which is flammable.
The second violation is also serious because once a DOT-approved
package is changed, the integrity of the package cannot be
established without further testing. Considering the type
of material that Respondent was shipping, both violations
are very serious.
In its letter of appeal and a subsequent letter dated September
28, 1998, Respondent asserted that it had not knowingly violated
the regulations and that it had shipped smokeless powder as
it was told by the carrier. Respondent stated that "[i]t is
so frustrating to us because we know we didn't purposely commit
these violations and it seems that your office has no intention
of believing us."
As explained in the Notice and in subsequent conversations
with Respondent, the "knowingly" standard is defined in 49
C.F.R. § 107.3 as "... acting or failing to act while (1)
Having actual knowledge of the facts giving rise to the violation,
or (2) Having the knowledge that a reasonable person acting
in the same circumstances and exercising due care would have
had." Respondent need not actually know of or intend to violate
the regulations. Part of Respondent's business is to sell
and ship solid propellants and smokeless powder to consumers.
It is not unreasonable to expect a business to be aware of
and in compliance with the various regulations that govern
the business's activities. In this case, it is obvious that
smokeless powder is a regulated material and, therefore, Respondent
should have been aware of the requirements for shipping the
material.
Respondent's claim that it had relied on the carrier's advice
is irrelevant. Respondent stated that its packages had been
returned by the carrier because the packages had not been
properly marked and, as a result, Respondent had told its
staff to mark the packages as the carrier directed. Although
Respondent does not explain what the marking problems were,
there is no indication that the carrier knew that Respondent
had filled the boxes too full to qualify for the smokeless
powder shipping exception or that the carrier knew that Respondent
had changed the inner components of the box. The ultimate
responsibilty for properly preparing packages for shipment
lies with the shipper, not with the carrier.
Respondent alleges that it was entrapped by OHME. Respondent
claims that the inspector who conducted the on-site inspection
of Respondent's facility purposely did not tell Respondent
what it was doing wrong in order to entrap Respondent. Entrapment
is not established just because Government agents afford opportunities
or facilities for commission of the crime or engage in deceit.
OHME did not encourage Respondent to commit the violations.
Rather, OHME gave Respondent the opportunity to fill an order
- which Respondent could have done in compliance with the
regulations but instead chose to do in noncompliance with
the regulations. Although OHME, through a third-party buyer,
directed where the shipment was to go, OHME did not instruct
the company on how to prepare and send the shipment. That
is not entrapment.
Respondent also stated that OHME allowed Respondent to continue
shipping in violation of the regulations for over eight months.
That statement is incorrect. As previously stated, the inspector
did not discover any shipping violations during his inspection.
If he had, he would have immediately notified Respondent and
worked with Respondent to correct the situation.
Respondent states that, prior to shipment, it had contacted
the OHME inspector to tell him that it was shipping the smokeless
powder and how it planned to ship the product. The inspector
denies this claim. Furthermore, the smokeless powder was purchased
by a third party and not RSPA. Therefore, it is unlikely that
Respondent had any contact with the inspector prior to shipment
of the material.
Concerning the civil penalty assessed in the Order, Respondent
stated that paying that amount could force it to lose an employee,
reduce merchandise for sale or reduce owners' wages. Specific
financial information ultimately submitted by Respondent,
however, shows that Respondent has significant retained earnings
and net worth, is able to pay the $11,500 civil penalty, and
would not have its ability to continue in business adversely
affected by that penalty.
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 $11,550
is appropriate in light of the nature and circumstance 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 Order of May 29, 1998 is affirmed as being
substantiated in the record and as being in accordance with
the
United States v. Myers, 692 F.2d 823, 835 (quoting
Sorrells v. United States, 287 U.S. 435 (1932) and United
States v. Russell, 411 U.S. 423 (1973).
Therefore, the Order of May 29, 1998 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
Payment must be made 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).
If the $11,550 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. § 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 that 90 days past due. This
penalty will accrue from the date this Action on Appeal is
received. This debt and associated charges are also subject
to referral to the Department of the Treasury for collection,
and the Department of the Treasury may offset this amount
against any payment due Respondent. 4 C.F.R § 102.3.
Final Administrative Action
This decision on appeal constitutes the final administrative
action in this proceeding.
/s/ Stephen Van Beek for
Kelley S. Coyner
Administrator
Date Issued: June 1, 1999
Enclosure
CERTIFIED MAIL - RETURN RECEIPT REQUESTED
Original to:
Mr. Ronald E. Kesselring
President
Kesselring Gun Shop, Inc.
400 Old Highway 99 North
Burlington, Washington 98233
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