Baseline Penalties Increase

Written on: December 2, 2013 by SprayTM

transportation-iconIn the July 2013 issue of Spray, I detailed the increase in minimum and maximum civil penalties published in the U.S. Dept. of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) final rulemaking, HM-258, on April 17, 2013. In that article I stated that “the maximum civil penalty, as amended by the Moving Ahead for Progress in the 21st Century Act (MAP-21) signed into law on Oct. 1, 2012, is increased from $55,000 to $75,000 for each violation. The maximum civil penalty is increased from $110,000 to $175,000 for each violation that results in death, serious illness or injury to any person, or substantial destruction of property.”


Well, just a few weeks ago (Oct. 2, 2013 – 78 FR 60726), PHMSA published another final rulemaking, HM-258C, which revises the agencies’ policy statement with respect to the baseline assessments for frequently-cited violations of the Hazardous Materials Regulations (HMR). The final rule substantially increases the baseline assessments and clarifies additional factors that affect the penalty amounts. The baseline assessments are used by the agencies’ field operatives and attorneys as guidelines when assessing a civil penalty against an alleged violator.


The increase in the baseline assessments for those frequently cited violations of the HMR reflect inflationary and statutory adjustments as well as the safety risks associated with each type of material. For example, offenders that improperly prepare Packing Group I (most dangerous) materials can expect to receive penalties that are considerably higher (up to five or six times more) than those who improperly prepare Packing Group III (least dangerous) hazardous materials.


In the 20-page rulemaking, PHMSA lists those sections of Title 49, Code of Federal Regulations (49 CFR) that are most frequently-cited in civil penalty actions, some of which are highlighted in the table on the facing page.


The baseline assessments described at the bottom of this article are only a fraction of the initial penalty amounts that are outlined in the final rule. The baseline assessments are typically adjusted up or down by as much as 25-50%, depending upon the aggravating and mitigating circumstances of the case. Also taken into consideration is the alleged violator’s ability to pay the penalty and ability to stay in business after the fine is levied, as well as “…other matters that justice may require.” The last factor, “other matters,” simply means that the regulatory agency may wish to make an example of the offender and use the case as a warning to other potential violators against those types of infractions.

A copy of the Final Rule can be obtained here.


In my July 2013 article in Spray, I offered some very good advice to the reader, which I now repeat so as to reinforce the importance of compliance with the regulatory requirements for the transport of hazardous materials and to avoid these potentially costly and damaging penalties:


When in Doubt, Leave it Out! If you’re not sure, don’t ship. Call and ask for assistance. SPRAY