______________________________
                              )					  
In the Matter of SKYLINE      )
   BEAUTY SUPPLY CORPORATION, )
                              )     Ref. No. 95-69-SB-WE 
Respondent.                   )
______________________________)

On May 14, 1998, the Chief Counsel, Research and Special Programs Administration (RSPA), U.S. Department of Transportation, issued an Order to Skyline Beauty Supply Corporation (Respondent) assessing a penalty in the amount of $15,975 for five 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 for transportation in commerce two different flammable liquids, acetone and isopropanol, in unauthorized nonspecification, nonstandard packagings (violation No. 1), that were not marked with the identification numbers for these materials and, in the case of the isopropanol, were not marked with the proper shipping name (violation No. 2), and which were accompanied by a shipping paper that did not contain the total quantity of the flammable liquids in appropriate units of measurement in association with the shipping description (violation No. 4), in violation of 49 C.F.R. §§ 171.2(a), 172.202(a)(5), 172.202(c), 172.301(a), and 173.119(a) and (b) (as authorized until October 1, 1996) or, alternatively with respect to the required packagings, § 173.202 (as authorized on and after January 1, 1991).

The Order also found that Respondent had not trained its hazmat employees as required (violation No. 3), and that Respondent had represented and certified packagings as meeting the UN 4G performance standard in the HMR when the packagings had not been subjected to the required design qualification testing (violation No. 5), in violation of 49 C.F.R. §§ 171.2(c), 172.702(b), 172.704(d), 178.2(b), and 178.601(d). Based on evidence of actions taken to correct these violations, the Order reduced the $19,310 civil penalty originally proposed in the May 10, 1995 Notice of Probable Violation. By letter dated June 9, 1998, Respondent submitted an appeal of the Order.

The record in this case establishes that Respondent shipped a "truck load" of 240 boxes (each containing four-one gallon bottles) of acetone and isopropanol from its facility in California to its customer in Boston. Photographs taken by the Boston Fire Department confirm that the boxes were not marked as meeting an authorized DOT specification or UN performance standard, as required, and that the boxes were not marked with the identification numbers for these materials. In the case of the isopropanol, the boxes were incorrectly marked "ALCOHOL." As originally prepared by Respondent, the shipping paper intended to accompany this shipment had no description of the materials but, after requests by the carrier, the shipping paper finally read:

1 TRUCK LOAD
NAIL BEAUTY SUPPLY AND
ACETONE (UN 1090 Class #3, Packing Group II)

APLU 480311
240 cs (950 gals) 6720

After receiving information and photographs concerning this shipment from the Boston Fire Department, RSPA inspected Respondent's California facility and observed other fiberboard boxes marked as meeting the UN 4G performance standard. Respondent had ordered boxes with this marking from its box broker, but the boxes had never been tested to determine that they met the performance standard marked on them. In addition, Respondent acknowledged that it had never trained its hazmat employees.

Respondent has not disputed any of these violations, and it has taken action to correct them. Based on those corrective actions, the penalty assessed in the Order was reduced a total of 25% from the baseline amounts in RSPA's penalty guidelines. See Appendix A to 49 C.F.R. Part 107, subpart D (25% is normally the maximum reduction allowed for corrective actions). Prior to its appeal, Respondent did not provide information on its financial condition.

In this action, I am further reducing the penalty for these violations based on (1) Respondent's size and its financial condition, as reflected in copies of 1996 and 1997 tax returns, and (2) the fact that the shipping paper originally prepared by Respondent was largely corrected at the carrier's insistence.

In its original response to the Notice, Respondent stated that it is a "small, family-owned business." In its July 10, 1998 letter forwarding copies of its 1996 and 1997 tax returns, Respondent stated that it has "about seven employees." Although those tax returns show that net income is quite small for the past two years, total sales are in the millions of dollars. Respondent also has a positive net worth, which has increased over the past two years, and it has significant cash on hand. Nonetheless, some reduction of the total penalty and allowance of installment payments appear appropriate because of Respondent's small size.

The penalty originally proposed and assessed for violation No. 4 more properly corresponds with the form of the shipping paper which Respondent originally tendered to the carrier, rather than after the corrections made by Respondent at the carrier's insistence. After those corrections, the shipping paper that accompanied the truckload shipment still failed to describe one of the two flammable liquids, and it failed to properly associate the quantity and weight with the shipping description of the material described. However, the initial emergency response action is similar for both acetone (which was described on the shipping paper) and isopropanol (which was omitted). Moreover, the total quantity of the flammable liquids in the shipment was indicated on the shipping paper, although not in the format required.

For these reasons, I am reducing the total penalty to $10,000 which Respondent may pay in 10 monthly installments of $1,000 each. The total penalty is allocated to the five violations as follows:

Violation No. 1 (unauthorized packaging) - $3,700
Violation No. 2 (improper marking) - $1,300
Violation No. 3 (no hazmat training) - $900
Violation No. 4 (shipping paper) - $400
Violation No. 5 (untested UN packagings) - $3,700.

I have determined that there is sufficient information to warrant mitigation of the civil penalty assessed in the Chief Counsel's Order. I find that a civil penalty of $10,000 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 May 14, 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. The $10,000 civil penalty is payable in 10 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.

Each installment payment must be made 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 $10,000 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. 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 these amounts against any payment due Respondent.

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

/s/ Stephen Van Beek for
Kelley S. Coyner
Administrator

Date Issued: December 21, 1998

Enclosure