What did they know, and when did they know it?

What did they know, and when did they know it?

What is “constructive knowledge” of a hazmat violation?

This has been a hot topic on the enforcement side of the hazmat field for air carriers, but because of recent rulemaking by the U.S. Department of Transportation in HM-229, it is about to become a problem in all modes of transportation.

This issue flows from phrasing in the civil penalty section of the hazmat law, 49 U.S. Code 5123(a). Someone can be held liable for a civil penalty for violating the hazmat regulations if they acted “knowingly.” This term is defined as actual knowledge of the facts giving rise to the violation, or when “a reasonable person acting in the circumstances and exercising reasonable care would have that knowledge.”

This latter type of knowledge — where after the fact someone is construed by the government to have “known” something, even if they did not know it in fact — is called “constructive knowledge.” It has been used often by the Federal Aviation Administration and the DOT to impose civil penalties on air carriers for accepting undeclared cargo that government inspectors later contend the carrier should have recognized and refused as being hazmat.

These situations come to light today for air carriers, and with implementation of HM-229 will be a headache for all carriers, when the carriers make required reports to DOT about shipper “discrepancies” they find in packages or paperwork.

With the benefit of time and facts as confirmed by the carrier's report that the package contained hazmat, government inspectors are susceptible to the recognized syndrome of “hindsight bias,” also known as the “I knew it all along” phenomenon.

According to Carnegie Mellon's Baruch Fischhoff, “In hindsight, people consistently exaggerate what could have been anticipated in foresight. They not only tend to view what has happened as having been inevitable, but also view it as having appeared to be ‘relatively inevitable' before it happened. People believe that others should have been able to anticipate events much better than was actually the case.”

With hindsight, and now-known facts, it is simple for FAA/DOT to contend that a word on a document or some mark on the package should have triggered the carrier's rejection of a package. The law, however, requires the DOT to consider what a reasonable person “acting in the circumstances” would have known, without the benefit of hindsight.

As several air carriers testified recently, millions of packages are moved daily, with fewer than 1% being hazmat. In these fast-moving circumstances, particularly when the shipper has failed to meet the duty to mark, label and declare the presence of hazmat on a shipping document, it is hard to see how a carrier employee could catch some of the subtle clues that have been alleged in civil penalty proceedings.

The DOT's recent expansion of undeclared hazmat reporting to all modes of transportation was coupled with a statement that the new requirement is not intended to create a “compliance trap” for reporting carriers. The common human failing of hindsight bias, however, will be hard if not impossible to cut out of the enforcement system.

What the DOT should do, in the interest of receiving better information — widely and freely reported — is to establish controlled reporting immunity. Shooting the messenger, whether with hindsight bias or not, is not the best way to enhance data collection with regard to undeclared hazardous materials shipments, acknowledged by everyone to be one of the largest safety and security problems in hazmat transportation today. Other agencies and, indeed, other parts of the DOT have operated successful reporting immunity programs, thereby enhancing safety and security in transportation. It is time to apply these positive lessons to the hazmat field. LT

Lawrence Bierlein is a partner with McCarthy, Sweeney & Harkaway, P.C. in Washington, D.C. His practice is devoted to issues involving transportation of hazardous materials. He can be reached at 202.775.5560, [email protected].

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January, 2004

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