Q. What are the most significant elements of the recent amendments to the DOT's hazmat law?
A. The hazmat amendments, signed by President Bush on August 10, 2005, as part of broader highway legislation (see cover story), will have the most significant impact on agency enforcement of the law.
Some time ago, a U.S. Department of Transportation (DOT) inspector was sued personally for unreasonably holding up the delivery of a tank car. Although ultimately the inspector prevailed, it led the DOT's lawyers to ask Congress for clearer authority for their inspectors to stop and hold shipments that they questioned.
The new law states that a shipment can be stopped and inspected, and that the outer packaging — such as the vehicle or, in the case of a combination package, the outer box — may be opened. The inner packaging cannot be opened in the field but, if all other attempts to determine the contents are unsuccessful, the DOT may order the shipment to a safe and secure location to be opened and, if necessary, to have the contents tested to assess the hazards.
The new law also gives the DOT new authority to issue emergency orders to stop shipments and even to demand a recall without an opportunity for a hearing. The statute indicates the limited circumstances under which this power should be exercised.
Many people in industry are concerned that these new powers, if not exercised prudently, could disrupt the delivery of essential materials, result in the destruction or contamination of those materials, or compromise the certified packaging prepared by the shipper. In addition, the details of the conditions under which emergency orders might be issued need to be fleshed out.
For these purposes, DOT has been told by the legislation to issue temporary procedural regulations within 60 days of enactment, better defining what may be done by their inspectors. Permanent rules have to be adopted within a year. All affected industry should participate vigorously in this rulemaking, to assure that the procedures put in place include only those necessary for transportation safety/security.
Penalty provisions also have been increased. The ceiling for civil penalties has been raised to $50,000 for "knowing" violations and to $100,000 if such violations result in death, serious illness or severe injury to a person, or substantial property destruction. Criminal penalty provisions, formerly including heavy fines and potential imprisonment of up to 5 years, now include imprisonment for up to 10 years in any case in which a criminal violation involves the release of hazardous material that results in death or bodily injury to any person.
Criminal offenses also have been enlarged to encompass "reckless" as well as "willful" violations: "A person acts recklessly when the person displays a deliberate indifference or conscious disregard to the consequences of that person's conduct." The prosecutor's burden of proof for a "reckless" case is lighter than in a "willful" case, and as a consequence more criminal cases may be anticipated.
Registration fees are going to escalate, perhaps to the new ceiling of $3,000 per year, starting in July 2006. Shipping papers now have to be retained by shippers for two years instead of one. A study of undeclared hazmat entering the U.S. has been authorized, but it is unclear why such a study does not include domestic shipments. DOT exemptions once again will be called " special permits" and may be renewed for fouryear terms after an initial period of two years.
In short, the biggest impact should be expected in the DOT's multi-agency compliance program, with powers of inspection increasing as well as the penalties, fines and potential jail time for violations. It would be prudent for any hazmat company to carry out a rigorous self-inspection now, to avoid imposition of these new penalties and the related costs of defending against civil or criminal prosecution.
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].