Alston & Bird LLP — Hazardous Materials Safety Interpretation

Page 1U.S. Department of Transportation 400 Seventh St., S.W. Washington, D.C. 20590 Special Programs Research and Administration JUN 42004 Ms. Laura Lewis Owens Ref. No. 04-0141 Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309-3424 Dear Ms. Owens: This is in response to your letter of May 25, 2004 requesting confirmation that discharged lithium ion batteries as described in your letter are not subject to the Hazardous Materials Regulations (HMR; 49 CFR Parts 171-180) when transported by highway in the United States. In your letter you state that the subject batteries contain one cell and that the equivalent lithium content of the cell is calculated to be 0.26 grams. You indicate that these lithium ion batteries are part of a voluntary recall that Verizon Wireless is in the process of implementing in cooperation with the Consumer Product Safety Commission. The batteries, which are counterfeit, are susceptible to overcharging and may overheat during or soon after charging. Under the proposed recall program, Verizon Wireless would request that a customer cease charging the battery and leave the phone on to allow the phone to discharge for three days prior to return shipment. A customer would place the discharged battery in a strong fiberboard box, provided by Verizon Wireless. You state that the packaging material and configuration complies with the requirements in 49 CFR 173.185(b)(4) which requires that lithium batteries be packaged in manner to prevent short circuits. The customer would return the battery to Verizon Wireless via ground shipment by U.S. mail. You further state that you are working with the U.S. Postal Service (USPS) to ensure that transportation is limited to ground shipments and that such shipments will comply with any additional requirements of the USPS. Under 49 CFR 173.185(b), a lithium ion cell that contains 1.5 grams or less equivalent lithium content and a lithium ion battery that contains 8 grams or less equivalent lithium content are not subject to the requirements of HMR if they comply with the provisions in 49 CFR 173.185(b)(3), (4) and (5). In addition, 49 CFR 173.21(c) states that electrical devices which are likely to create sparks or generate a dangerous quantity of heat are orbidden for transportation unless packaged in a manner which precludes such a ccurrence. As the entity causing these batteries to be transported. it is the responsibilit The procedures which you have described, if effectively communicated to the person: of Verizon Wireless to ensure compliance with the applicable provisions of the HMF returning these batteries, appear adequate to ensure that these batteries are eligible for the 173185 040141#

Page 2exceptions provided in 49 CFR 173.185(b) and are not forbidden for transportation under the provisions of 49 CFR 173.21(c). I trust this satisfies your inquiry. If we can be of any further assistance, please contact us. Sincerely, le lead : Magulle Edward T. Mazzullo Director, Office of Hazardous Materials Standards#

Page 3Gal 04-0141 ALSTON&BIRD LIP 113,155 www.siston.com Lumro Lewis Owens Direct Dinl: 404-H81-7363 -mull: lowcny@alviun.com May 25, 2004 VIA: FACSIMILE & UNITED PARCEL SERVICE Rescarch and Special Programs Administratior Deputy Associate Administrator for Hazardous Materials Safety Department of Transportation DHM-1 400 7th St., S.W. ! Washington, DC 20590-0001 Re: Request for Confirmation of Non-Applicability of the Hazardous Materials Regulation: (40 C.F.R. Parts 171-185) Dear Mr. Wybenga: I write on behalf of Verizon Wireless to request the Deparyment of Transporlation's confirmation that discharged lithium ion batteries, as described bolow, are not subject to the federal Hazardous Materials Regulations, 40 C.F.R. Part 171-185 (the "HMR") when transported by ground in strong packagings. In voluntary coperation with the U.S. Consumer Product Safety Commission ("CPS"), Verizon Wircless is in the process of implementing a program for the voluntary exchange of certain lilhium ion batteries that may be counterfeit. The CPSC has requested that Verizon Wireless notify le Department of Transportation (DOT) of Verizon Wireless' proposed ballery exchang rogram. That program and Verizon Wireless' conclusions as to the regulatory status o the transportation of such discharged batteries are described below. Background The subject batteries bear the external outward appearance of LG Electronics ("LG") TM-510 batteries used in LG's TM-510 model cellular telephone. Baph battery contains one lithium ion cell. Because the counterfeit batteries may be susceptible to overcharging, they may overbeat during or soon after charging. Verizon Wireless proposes to aler a custome to these pansit i, had ded popsed to lie ra replacement battery. 101 South Tryon Sirect, Suito 1000 Bank of America Plaza 90 Park Avenic Churlogic, NC 28280-1000 New York, NY 10016 3201 Beechleuf Court, Suite o0n lux: 704-144-1111 704-411-1000 lax: 312-210-9.144 212-210-2400 Roleigh, NO 27604-1062 601 Pennsylvania Avenue, N.W PAx: 919-862-2260 919-862-2200 Washna, DE: 20 +-271 Fian: 202-7:00-3333 202-7563300#

Page 4Mr. Frits Wybenga May 25, 2004 Page 2 immediately cease charging the recalled battery and leave the phone on to illow the Under that proposed program, Verizon Wireless would request that a customer phone to discharge for threa (3) days prior to return shipment. A customer would exchange a discharged battery for a replacement battery by placing the dischargud battery in a strong fiberboard box provided by Verizon Wireless and retuming the lattery to Verizon Wireless via ground shipment by U.S. mail. A specimen of this packaging is attached hereto as Exhibit "A". Verizon Wireless is working with the U.S. Postal Service "USPS") to ensure that transportation will be limited to the ground and that such shipments will satisfy any additional requirements under USPS regulations. Regulatory Status of the Batteries Under the HMR Under the HMR, most lithium batteries are regulated as Class 9 materials. However, subject to the satisfaction of certain conditions, 49 C.F.R. § 173.185(b) provides an exception to the HMR's requirements for lithium ion cells and batteries. not more than 1.5 grams of "equivalent lithium content" and a lithium-ion battery Specifically, $ 173.185(b)(1) and (2) except from regulation a lithium ion cell containing containing an aggregate quantity of not more than 8.0 grams of equivaleml lithium content. Equivalent lithium content is calculated to be 0.3 times the rated cupacity in ampere-hours of a lithium ion cell. See id. § 173.185(a). In turn, "Ic]he lithium- equivalent content of a battory equals the sum of the grams of lithium-equivalent content contained in the component cells of the battery." Id. If a lithium ion battery satisfies the equivalent lithium content limits of § 173.185(b)(I) and (2), then it is not subject to regulation under the HMR, provided that it is (i) packed in such a way so as jo prevent short circuits, and (i) packed in a strong packaging. See id. § 173.185(b)(4)' Relying on information provided by LG and analysts with the engine ring firm Exponent, and with the assistance of Andy Altemos with HMT Associates, Verizon Wireless has investigated the application of 49 C.F.R. $8 173.185(b) and 173.2i1(c) 1o the Wireless has been advised that the fier sement of he discared baleries l should not be subject to the HMR, and (ii) should not run afoul of $ 173.21(c)'s proljibition on offering for transportation electrical devices that are likely to create sparks or generate a dangerous quantity of heat. While batteries qualifying for § 173.185's exception may be transported by any mode, Verizon Wireless nevertheless intends to limit the retum shipment of baltories solely to ground transport. liquid or solid carhodes. Thus, the conditions set forth at § 173.185(b)(3) and (5) should not apply to their ' The engineering firm Exponent has advised Verizon that the lithium ion batteriès at issuo do not contain transportarion.#

Page 5Mr. Frits Wybenga May 25, 2004 Page 3 established in 49 C.F.R. § 173.185(b)(1) and (2). Verizon Wireless has obtained First, the subject batteries' equivalent lithium content should fall below he limits confirmation fiom LG that a standard LG lithium ion coll has a rated capacity: of 0.875 ampere-hours, Verizon Wireless also has obtained independent confinnation from Exponent that a rated capacity of 0.875 ampere-hours is a typical rating for a lifhium ion cell used in a cellular telephone, which based on the regulations is calculated io have a lihium-equivalent content of 0.20 grams. Under any scenano, theretore, we are advised that the equivalent lithium content of the cells subject to the exchange program is expected to fall below the 1.5 grams limit contained in the HMR. one lithium ion cell, we are advised that the aggregate equivalent lithium ion content of Similarly, because the lithium ion batteries subject to exchange each comtain only an exchanged battery also is expected to fall short of the DOT's 8.0 grams limit on telephone battery currently in use is known to have a rated capacity that could cause aggregate equivalent lithium ion content. Indeed, according to Exponent, no cellular the equivalent lithium content limitations of § 173.185(b)(1) and (2) to be expeeded. Sccond, Verizon Wireless intends to ship the batteries in accordance with the in such a way as to prevent short circuits. For the relur ground shipment of discharged conditions of § 173.185(b)(4), which requires batteries to be packed in strong packaging batteries, Verizon Wireless intends to provide rigid, good quality packagings that are able to contain and protect the battery under conditions normally inpident to transportation. Batteries will be packed one battery per packagc, and the packaging should prevent significant movement of the battery during transportation. Further Verizon Wiroless docs not intend to include any electrically conductive materials in the packaging that would cause or contribute to a short circuit. Exponent has advised Verizon Wireless thal, when so packaged and when the batteries are in a discharged state, they should present little or no risk of short circuiting. In light of the forgoing, the lithium ion batteries subject to exchange should not be subject to regulation under jhe HMR. For similar reasons, the shipment of the batteries should not be forbidden by; operation of 49 C.F.R. § 173.21(c). hipments of discharged lithium ion batteries, as described above, should not be subjec Consequently, Verizon Wireless requests DOT's confirmation thal retun 1o regulation under the HMR when transported by ground in strong packagings. We look forward to the DOT's response to this request. In the meantime, please do not hesitate to contact me or Verizon Wircless should you require further information or have any questions. Very truly yours, Laura 2.Owere Laura Lewis Owens#