Wednesday, December 11, 2013

Fireworks Display Operator Cleared

A very important fireworks case has been winding its way through the Courts in England.  A fireworks display operator was accused of 7 counts of reckless or negligent homicide resulting from a fireworks display which were reduced to "failure to insure the safety of others".    The accident on M5 in Somerset, England resulted in seven people being killed and 51 were injured.  The fireworks display operator was cleared of breaching health and safety laws by a jury at Bristol Crown Court on the direction of a judge.  In the United States this is called a "directed verdict".

A "directed verdict" is rather rare and only occurs when the Judge is convinced as a finder of fact that there is no possible way that a conviction should occur.  In those cases where a "directed verdict" is granted, the Judge takes the guesswork out of the jury system and decides the case or orders the jury to decide the case in favor of the Defendant.  The Government is not entitled to a directed verdict.

This case resulted from a massive multi car accident on a major highway in Great Britain.  The fireworks operator, Geoffrey Counsell, was charged because the fireworks show that he was conducting caused some smoke to waft its way over the highway.  Mr. Counsell was accused by the Government of not insuring the safety of others when he was conducting a fireworks display well off the highway at a rugby club, at least 200 meters.   The night was foggy anyway and the smoke did not clear right away.  Drivers encountered a complete "whiteout" of conditions.  Mr. Counsell has been accused of causing these deaths and injuries from the fireworks display.  Nothing was ever said about the motorists failing to recognize the danger and slowing their vehicles down.  Witnesses testified that the fireworks smoke was actually drifting away from the highway.

The Judge in the case decided that there was no violation of the fireworks law or the Health and Safety Code because there was no recognized danger from fireworks smoke.  Mr. Counsell provided a statement which indicated that the prosecution was motivated by "finding someone to blame" for the accident.

This is an important decision for fireworks companies not only in Great Britain, but in the United States as well.   Had the government prevailed, then it is conceivable that future fireworks operations could have been subject to criminal prosecution when something would happen, even if tangentially involved.

The prosecution of fireworks display operators is not unknown in the United States, but generally those prosecutions have been for blatant violations of the law.  {Remember the tour manager in The Station fire in West Warwick Rhode Island plead guilty to 27 counts of manslaughter for his role in that fireworks tragedy}.   However there was one prosecution in Wisconsin (Michael Rose) where the pyrotechnic operator was charged with several felony and misdemeanor counts after 11 people were injured as a result of a malfunction of a fireworks device in a tube.  It was determined that in Mr. Rose's case, the fireworks display set up was in direct contravention of accepted industry practices for being too close to the crowd, but a permit was granted by the local AHJ which approved the set up.  However the AHJ was never charged.

The permit should have been the document that prevent prosecution, but an overzealous prosecutor wanted to blame somebody for the 11 people being hurt, focused her attention on Mr. Rose.  After all of the posturing and quibbling, Mr. Rose plead "no contest" to 3 misdemeanor counts of "negligent use of burning materials" and had to pay a fine.  This prosecution of Mr. Rose was similar to the witch hunt of Mr. Counsell in Great Britain.

Fireworks display operators are charged with the safe operation of fireworks displays and when an accident occurs, they are generally found to be responsible.  That responsibility should not rise to the level of criminal activity except when the display operator consciously ignores the rules and safety standards to create a situation that will harm and potentially kill people. 

Anyone remember the tragedy in Charlevoix, MI?  That operator created a situation and convinced the local AHJ to allow a "killing field" near the docks in Charlevoix.  He was not charged nor did he face any charges.  To the best of my knowledge, no AHJ has ever had to face a criminal or even a civil jury when their "approval" allows a violation of the NFPA Codes and there is death or destruction.

The clearing of Mr. Counsell is a significant victory for fireworks operators all over the world.  However the message is very clear that government prosecutors and the media will try and blame fireworks and those people that conduct the shows whenever they can stretch the truth to fit their own anti-fireworks agenda.

Friday, August 16, 2013

USDOT/PHMSA POLICY CHANGES EVERY FIREWORKS COMPANY SHOULD KNOW

The USDOT/PHMSA makes policy decisions everyday, but most of them are not published in the Federal Register.  Some of the decisions that are made by policy makers at PHMSA clearly show little if any understanding of the fireworks industry and its operations.  Investigators will be sent out to importers and other companies to examine the DOT/PHMSA "paperwork" and find errors or violations.  These field investigators then issue "Exit Briefings" that detail the violations that they found and could serve as the basis for future monetary sanctions.

    As attorneys that have represented fireworks companies for over a quarter of a century, we have found that the field investigators decisions do not always translate into an automatic fine and enforcement action.  Many times the USDOT/PHMSA attorneys have to review the material and then can not justify the actions of the field investigators.  There are many occasions when the USDOT/PHMSA attorneys will file Notice of Probable Violations only to dismiss them when the full story is explained to them.  We have had a few occasions recently where the USDOT/PHMSA attorneys have dropped cases or made policy decisions because the field or internal positions were not correct.  Here are a few that we have experienced in the last couple of months:

     1.  USDOT/PHMSA can not Impose Sanctions on Broker.  We have had 3 cases in the past several months where USDOT/PHMSA has attempted to impose significant monetary sanctions against Brokers in China or Hong Kong.  In one matter the USDOT/PHMSA asked for a fine of over $300,000 because of supposed EX and shipping issues.
     Under the DOT regulations, a person that is not involved in the shipping or pre-transportation process can not be held responsible for any violations.  49 CFR sec. 171(a)(1 and 2).  The regulations spell out several specific functions that a person or entity must perform before they can be held responsible.  The DOT/PHMSA investigators do not fully understand the entire process in China and believe that the Broker is the entity that actually physically loads the container, issues the documents, determines the EX numbers to be assigned and is intimately involved in the process.  What I really think happens is that the Broker is the only entity that the DOT/PHMSA can attack in the process.
     What happens in these cases, the DOT/PHMSA attorney was provided details of the entire process and how shipments really work.  Once they understood that the Broker is not defined in the regulations as meeting this criteria, the cases are quickly dropped.  The Brokers were not fined any amount from the USDOT/PHMSA.
    This could mean that enforcement actions against Brokers in the future could diminish.

     2.  Finale Chains and EX Approvals.  For the past several months, the USDOT/PHMSA investigators have created violations for chained finale shells that exceed the number of shells on the approval documents.  For example if a manufacturer had approval for 10-3" shells in a chain and shipped a chain of 24, then the uninformed investigator would create a violation.  This has caused some turmoil in the supply process.
     The basis for the "violation" was that the approval said 10 shells and there are 24 shells in this chain and therefore it is a "new explosive" and needs its own EX number.  This clearly shows a complete lack of understanding of the regulations and what constitutes a "new explosive".  49 CFR sec. 173.56(a) has this definition.  A "new explosive" is one that has had a change in formulation or design "so as to alter the properties of the explosive...".  Furthermore, the explosive must have a difference in hazard characteristics from the explosive previously approved.  Adding some additional shells to the chain does not meet this definition.  The investigators are not properly trained nor do they understand the physical and chemical properties of the devices.  They arbitrarily determine that if the approval is for 10 and the chain has 24, then this is a "new explosive".  To them, it does not matter how the devices are packed or sold.  One field investigator in the Midwest did not care what the regulations stated, how the devices were packed or that APA 87-1, sec. 4.4 approves combination devices.  Luckily he was set straight, but he still refuses to withdraw the "violation" on his Exit Brief.
    Once again the attorneys had to file a Notice of Probable Violation and then be educated on this entire process.  The technical people at the DOT admitted that this particular device with the increased number of shells in the chain really was not a "new explosive" and the violations were withdrawn.

     3.  Shells or devices that have "color" issues will not serve as a basis for a violation.  Another popular violation topic was the issue of different colors from the approval document.  A field investigator may find that a device is described as  "purple changing to gold brocade" and the approval document only allows red, blue, orange, silver, gold or yellow.  The field investigator immediately seizes upon a "violation" because the color purple was not "approved".  This has caused all sorts of turmoil in the manufacturing and importation areas.
     Once again, the field investigators training has failed them and maybe a refresher in elementary art might be appropriate so that they understand the difference in "primary", "secondary" or "tertiary" colors.  Maybe better yet, lets get them some simple color wheels so they understand that red and blue can make purple or that blue and yellow will make green.
      The USDOT/PHMSA attorneys will not proceed with Notice of Violations for matters involving a difference of color only on shells or devices.  This means that if a note is received from a field investigator that says that the "color is not approved" then there will be no violation and that should be withdrawn.  Some field investigators are stubborn and even when told this refuse to admit their error.

     These are some important and changing decisions from USDOT/PHMSA that everyone in the fireworks industry has suffered through these past few years.  The arbitrariness of the inspection process, the decisions that are made on the "fly" by field investigators has caused a great deal of turmoil because PHMSA needs to justify its own prior actions.

    If you are faced with a DOT/PHMSA or even a DOT/FMCSA audit or review, you have the right to contact  an attorney and discuss the matter with them, during the course of the Audit.  You also have the right to close at the end of your normal business day and not incur overtime expenses.

    If you have questions or a situation arises during the course of an audit, call us at 800-481-0900.  Ask for John Brooke or John Stevens. 

Thank you.

John H. Brooke

DOT/PHMSA-Policy Changes from Active Cases

US DOT/PHMSA makes some interesting rules even when they do not publish in the Federal Register.  Sometimes they save some of their best decisions for active cases or their internal operating procedures.  Anyone that has ever dealt with PHMSA knows that internal policy issues are a moving target depending on the day, the person and the pressure from Congress.  Most of the "policy makers" make certain decisions that can not be justified.  However in the context of active cases where the Agency wants to impose significant fines, there is a different story.

      As an attorney that handles these cases, I have found out first hand some policy changes that PHMSA does not like to promote or even publish.    PHMSA understood in the context of active litigation that the some of the policies were not justified or supportable in an actual court of law.  The USDOT/PHMSA attorneys are the ones that have to try and justify these concepts and many times have to drop them because in reality they make no sense.

     1.  Imposition of Fines and Penalties against Foreign Brokers.  For years, PHMSA allowed anyone to obtain EX numbers for the commercial transportation of explosives.   There was no requirement for a manufacturer or even an importer to have the EX numbers.  Many of the early EX numbers were assigned to trade groups like the APA or some other entity.  This changed in 2011 when PHMSA made the unilateral decision to only allow manufacturers to apply for and obtain EX numbers.  This means that many of the EX numbers issued to brokers or others were still valid and useable.
          The DOT has attempted to impose significant sanctions (in one case over $350,000) against companies that may have shipped items to customers.  There may have been issues with the EX number and the product, so the DOT tried to impose these sanctions on the broker in China.   The broker only supplies the documentation from the manufacturer and has the export license in China to move product out of the country to the customers in the US.  The broker does not control the documents from the manufacturer nor do they meet the definition of being involved in transportation as set forth in 49 CFR sec. 171.1(b) or (c).  It is clear that while the officials in the DOT/PHMSA may not understand how commerce is conducted, the attorneys are getting educated on this process.  The USDOT/PHMSA attorneys have dropped cases against 3 different brokers because they did not meet the regulations and were not involved in pre transportation functions or movement of product issues as defined in the regulations. 
      
     2.  Issues with designation of "color" in devices.  Much has been made by DOT/PHMSA inspectors about aerial shells or devices with descriptions that include colors not in the official approval.  Many DOT/PHMSA investigators automatically have determined that a violation exists because the official application for a device has the color "gold" and the description on the shipping documents may refer to "yellow" or even "green".  This was an automatic violation that DOT/PHMSA inspectors would prevent merchandise from entering the marketplace and being held in the warehouse.
         In several cases with the DOT/PHMSA when Notice of Probable Violations were issued, the DOT/PHMSA position has changed.  No longer will issues of "color" solely be the basis for a violation or the banishment of the product from commercial transportation.  One investigator in the Midwest refuses to recognize the directive from not only his own attorneys, but also from the technical personnel and still has blocked the shipment of finale chains from a Chinese manufacturer to customers because of the issue of "color" [the approval documents had a wide range of color options, but did not include specific colors like "purple" or "aqua" eventhough red, blue, yellow, orange, white, gold, silver, violet and some other colors were approved.-I think that this investigator better go back to elementary school and try and understand the "color wheel" on how primary and secondary colors work-ED.]

     3.  Chained Finale Shells- For quite some time DOT/PHMSA investigators have singled out finale chains of shells that are greater in number than the approval documents as a violation.  If a manufacturer has obtained an approval for 10 chained together shells and they ship 24 in a chain, uniformed and overzealous DOT/PHMSA investigators would immediately seize on that issue and claim that the product was not approved for shipment since it was a "new explosive" and did not have a specific EX number for the chain of 24.  As ridiculous as this sounds, the investigators believed that the sheer number of shells chained together was sufficient to create a whole separate "hazard" that needed a new EX number.  The training that these investigators received before being foist upon the fireworks and explosives industry was ludicrous.  They don't even know their own regulations.
     The regulations for a "new explosive" is found at 49 CFR sec. 173.56.  They don't understand that for a "new explosive" the change must be "so as to alter any of the properties of the explosive..."  Furthermore, there must be "...significant differences in the hazard characteristics from the explosive previously approved."  49 CFR sec. 173.56(a)(2).  These criteria are not met when just changing a finale chain from 10 to 24 of 3" shells.  Furthermore APA 87-1, sec. 4.4 governs combination devices and allows this type of device to exist.
     This change in policy has corrected many, many "Exit Briefings" issued by uninformed investigators that saw a number of finale shells approved and then saw a different number of shells on the packing lists. 

     These are significant and important changes within the DOT/PHMSA inspection process that all importers must consider before allowing the DOT/PHMSA investigators to interrupt your inventory and sales.   This product has cost you a great deal of money just to get it to your warehouse and you should not let an investigator that has a minimal amount of understanding of the entire process prevent you from your distribution.

   If you have questions, even questions during a DOT/PHMSA inspection, you have the right and ability to contact an attorney and seek legal advice.  We are available to work with you and even attend inspections.  Please call us if you need help.  phone:  800-481-0900.  Ask for John and you will get either John Brooke of John Stevens.

Thank you.  

John H. Brooke