National Tank Truck Carriers, Inc. — Hazardous Materials Safety Interpretation

Page 1• • U.S. Department of Transportation Office of th hief Counse 400 Seventh St.. S.W. Washington, D C. 20590 Research and Special Programs Administration Int. No. 89-1-RSPA INTERPRETATION SOURCE: President Mr. Clifford J. Harvison National Tank Truck Carriers, Inc. 2200 Mill Road Alexandria, Virginia 22314 FACTS: National Tank Truck Carriers, Inc. (NTTC) has requested follow-up interpretation to Int. No. 88-1-RSPA concerning persons responsible as "offerors" (or "shippers") under regulations issued pursuant to the Hazardous Materials Transportation Act (HMTA) • The essence of Int. 88-1-RSPA is as follows: Any person who performs, attempts to perform, or, under the circumstances involved, is contractually or otherwise responsible to offeror perform, any of the functions assigned to the responsible under the HMR or shipper by the for their proper HMR is legally performance. Performance or attempted performance of any offeror or shipper functions may be evidence of responsibility under the HMR for performance of other commercial act, such offeror or shipper functions• as a sale or transfer of No single that responsibility. ownership, is necessarily determinative of NTTC's request also recognizes that the earlier Interpretation statedes at ere he Hazardous Matermans Regulations (FeR, 49 CFR Parts 1/1-179, is determining which parties perform which based on all relevant facts. runctions and that this involves a case-by-case determination Accepting that premise and recognizing that answers to detailed hypothetical questions may not be appropriate or applicable to actual cases occurring in the future, NTTC nevertheless sets a series of hypothetical fact patterns and requests answers#

Page 22 Many of NTT's questions seem to assume erroneously that there is only one offeror in any given fact situation. In actuality there may be one or more offerors, jointly and severally responsible dapending upon for compliance with the HMR, in any transportation scenario-- the details of that scenario. INTERPRETATION: NT's hypothetical fact patterns and related questions are set forth below, the answer of the Research and Special Programs Administration. and each question is followed by FACT PATTERN #1 Products Company A is engaged in the production and marketing of petroleum products which are considered "flammable" and "combustible" under the Hazardous Materials Transportation Act. In order to facilitate distribution of these products, Company A operates these products from several facilities, the primary function of which is to transfer its own production and/or storage facilities distribution to retail outlets owned or otherwise controlled by into tank motor vehicles, owned by Company I, for subsequent Company A. trucks are loaded at Company A's "facilities" Company Z is a motor common carrier. Company Z's product to the "retail outlets". There and transport the are no prior or existing agreements, between Company A and Company Z, regarding product ownership or taking title to the product. Question -- 1s Company posee shippers or torter 02"CER Parts 170-179, Answer-- is In Fact Pattern #1, absent additional facts, Company A an offeror of hazardous materials for transportation and, as such, is responsible for compliance for all offeror and shipper. end in! 172.3, 173.1, and 173.22). Although there are no facts responsibilities (e.g., §§ 171.2, • 3% no the indicating that Company Z loads its own vehicles or issues shipping papers, it is an offeror, if Company Z would be performing offeror functions and be responsible for doing so in compliance with the HMR. Also, Company Z is a carrier and may not accept for transportation or transport hazardous materials without complying with numerous HMR provisions applicable to those functions (e.g., §§ 171.2 and 177.817).#

Page 33 FACT PATTERN #2 products which are considered "flammable" Company A is engaged in the production and marketing of petroleum and "combustible" under the Hazardous Materials Transportation Act. In order to facilitate distribution of these products, Company A operates several facilities, the primary function of which is to transfer these products from its own production and/or storage facilities into tank motor vehicles, owned by Company I, for subsequent distribution to retail outlets owned or otherwise controlled by Company A. Company Zis a motor common carrier. Company Z's trucks are loaded at Company A's "facilities" and transport the product to the "retail outlets". By prior contractual agreement, Company A agrees to permit Company Z to load its trucks (at Company A's "facilities") 24 hours a day with no representative of Company A in attendance during the loading operations. Access to Company A's facilities is accomplished by keys and/or electro-mechanical devices provided by Company A. Question-- For the purposes is Company A the "shipper" (or "offeror")? of applicability of 49 CFR Parts 170-179, Answer-- Company A and Company Z are both offerors. Either or both would be responsible for compliance with particular requirements of the HMR. Nothing in the given facts has relieved Company A of its responsibilities shipping papers, certify the shipment (§ 172.204), anc to classify the materials, prepare Company Z performs offeror functions, provide required placards (§ 172.507). However, if that it do so in accordance with the HMR. HiR!' Surequires 185173320 1(2) and 13924 thing 15519530 and 177.834). Companies The extent of the joint and several responsibility of A and Z as offerors would be determined, in part, by the terms of their contract with each other.#

Page 44 FACT PATTERN #3 products which are considered "flammable" and "combustible" under Company A is engaged in production and marketing of petroleum the Hazardous Materials Transportation Act. In order to facilitate distribution of these products, Company A operates several facilities, one function of which is to transfer these products from its own production and/or storage facilities into tank motor vehicles, owned by Company Z, for subsequent distribution to retail outlets owned or otherwise controlled by Company M. trucks are loaded at Company A's Company Zis a motor common carrier. "facilities" and transport the Company I's product to the "retail outlets" Company M is engaged in the retail and/or wholesale distribution of petroleum products under the brand names of Company A. By prior agreement between Companies A ownership of the product shall and M it is agreed that pass from Company A to Company M, prior to agreement" further specifies transportation from Company A's facilities. Said "prior that Company Z will provide transportation services between Company A's facilities and Company M's facilities. Questions-- (1) For the purposes of applicability of 49 CFR Parts 170-179, is Company A the "shipper" (or "offeror")? (2) For the purposes 170-179, is Company M the "shipper" (or "offeror")? of applicability of 49 CFR Parts Answer-- As discussed in the Fact Pattern #1 answer, Company A is an offeror, and Company Z would be responsible for undertakes. proper performance of any offeror functions which it by virtue of its Company M has not become an offeror solely hazardous materials prior to transportation. If acquisition of ownership of the Company M directs the activities of Company A or otherwise responsible for their proper performance. This issue undertakes offeror functions, Company Mis was discussed in Int. No. 88-1-RSPA: No single factor •.. conclusively performance of "offeror" functions determines legal responsibility for under the HMR. For example, transfer of ownership of the hazardous materials from the oil company to the purchaser does not, absolve the oil company performance of "offeror" functions of responsibility under the HMR for or impose them upon the purchaser.#

Page 5• 5 company's original ownership does On the other hand, the oil not necessarily result in the oil company being responsible under the 'offeropperformance of all functions. The ownership of the hazardous materials before, durina or after the transportation of hazardous materials is only one of many relevant factors which must regulatory liability under the HMR. be considered in determining FACT PATTERN #4 Same fact pattern as that described in #3 (above), except that "prior agreement" stipulates that the transportation will be performed in motor vehicles owned by Company M. Questions-- 170-179 Pus Comsany apthe ashipper" (or "offeror")? 170-179, is Company A the (2) 190-179, 4s Coms ny a ple bilper° (or cofferor")? purposes Answer-- Company A is an offeror. On the "offeror" issue, this are no facts indicating that Company M is an offeror. fact pattern is the same as Fact Pattern #1, and there If Company M directs the activities of Company A or otherwise undertakes offeror functions, Company Mis responsible for their proper performance. FACT PATTERN #5 Same fact pattern as that described in #3 (above), except that the agreement specifies that Company M will Marrange for transportation" Questions-- (190-179, 4s Company atle blipper° (on cofferor")? (2) For the purposes of applicability of 49 CFR Parts 170-179, is Company M the "shipper" (or "offeror")?#

Page 66 Answer-- Company A is an offeror. More information would be required concerning Company M's undertaking to "arrange for transportation in order to determine to what extent, if any, Company M is an offeror. If Company M is contractually or otherwise responsible to perform any of the functions assigned by the HMR to the offeror, it is legally • responsible under the HMR for the proper performance of those functions. FACT PATTERN #6 She greement specifies that company A will arrange cer tha transportation" Questions-- (1) For the purposes of applicability of 49 CFR Parts 170-179, is Company A the "shipper" (or "offeror")? (2) 170-179, 45 Company a the blipper° (or corteror",? Answer-- Company A is an offeror. As in Fact Patterns $3 an *4, there are no facts sufficient to indicate tha Company M is an offeror. ADDITIONAL QUESTION A Would there be any change in the determination of "shipper" (or "offeror") if the prior stipulated that ownership or title to the product transferred "at agreement between Companies A and M the time of delivery" to Company M's facilities? Answer-- Company A remains an offeror, and there is no basis on Assuming that this question refers to Fact Pattern #3, which to determine that Company M is an offeror. ADDITIONAL QUESTION B Would there be any change in the determination of "shipper" (or "offeror") if the prior agreement between Companies A and M stipulated that ownership or title to the product transferred at the time of loading (or transfer)" into cargo tanks (regardless of ownership of the cargo tanks)?#

Page 77 Answer-- Again assuming that this question refers to Fact Pattern #3, Company A remains an offeror. However, Company M has not become an offeror solely by virtue of its acquisition of ownership of the hazardous materials at the time of loading or transfer into cargo tanks -- a time later than that hypothesized in Fact Pattern #3. Amy Flesh Chief Counsel George Date Issued: APR 1 4 1989 CERTIFIED MAIL - RETURN RECEIPT REQUESTED :#

Page 8Interpretation 89-1-RSPA: ABSTRACT All relevant facts are considered in determining which persons are responsible for compliance with HMR provisions imposing responsibilities upon offerors of hazardous materials. from whose facilities bulk liquid hazardous materials are A company transported generally is an offeror of those hazardous materials regardless of the ownership of those materials. persons may become jointly and severally liable as offerors under However, other bilities imposed upon the HMR by undertaking, or contracting to undertake, responsi- offerors by the HMR.#

Page 9Interpretation 89-1-RSPA: KEY WORDS Hazardous Materials, Offer of for Transportation Hazardous Materials, Ownership of Offeror Offering Ownership Shipper#

Page 10: • Interpretation 89-1-RSPA: SECTIONS AFFECTED 49 CFR 171.2 49 CFR 172.3 49 CFR 172.204 49 CFR 172.507 49 CFR 173.1 49 CFR 173.22 49 CFR 173.24 49 CFR 173.30 49 CFR 177.817 49 CFR 177.834#