10-YEAR SURVEY OF REPORTED PHMSA PENALTIES

Below is a survey of the penalties imposed by PHMSA upon fireworks businesses only for the previous ten-years; this does not include penalties paid upon the issuance of a ticket or, alternatively, by settlement or compromise. This information was accessed through the PHMSA website.

With respect to reported penalties, there is a discernible increase in terms of frequency—1 penalty in ’06, ’08, ’12, against 8 penalties in 2013 and, so far, 4 penalties in 2014 (a slight increase from 2013). Unfortunately, there is no reasonable or sensible method to evaluate or understand how the amount of the penalty imposed was derived or calculated. The only meaningful reference is the citations to the CFR regulations that accompany each reported enforcement decision, and I have totaled these citations in the last column of the table below.

One would theorize that the amount of the penalty imposed would be directly proportional to the number of citations described; but that is not supported by the reported facts as presented in the table below. Indeed, the three largest fines reported all involved 5 cited probable violations each. Interestingly, these five citations are either identical in two instances or, in the third instance, nearly identical, leading one to expect some uniformity in the actual penalty imposed. Here, the two enforcement decisions describing identical citations imposed penalties of, respectively, $24,000 and $25,000, indicating some uniformity. However, while the third instance matter matches four out of the five citations in the other two matters, the penalty imposed is nearly double, $42,000. The distinguishing citation in the third matter—6/11/12—is the reference to §173.52, regarding classification codes, whereas the other two enforcement decisions each refers to §173.51 among the five citations described.

It is noteworthy that the amount of the penalty imposed in connection with the reported enforcement decisions with the greatest number of cited violations, 9, is a fraction of the penalty imposed in the enforcement decisions describing far fewer probable violations. For example, 9 citations = $7,295; 8 citations = $7,400; 5 citations = $24,000, $25,000, $42,000.

Curiously, the fines imposed may vary significantly even when the number and description of the citations are identical: compare 1/2/2013= $11,250 with 11/12/2013 = $8,000, even though each enforcement decision explicitly mentions “one violation of the HMR”. The text and other information available to the author does not indicate nor suggest a basis, reasonable or otherwise, for the two differing penalties. From the perspective of chronology, one would have expected that a penalty imposed in November 2013 would be greater that the penalty issued ten months earlier, in January 2013. Compare these penalties with an enforcement matter citing seven (7) citations and explicitly describing “three violations of the HMR”, resulting in a penalty of only $5,375 (EN- this author had represented the business).

In conclusion, it appears that the penalties being imposed by PHMSA may lack consistency and uniformity, adding to the complications and frustrations associated in evaluating PHMSA enforcement matters. It would stand to reason that businesses that vigorously defend will obtain the best results lowest penalties.