Federal hazmat chief safety officer not constitutionally appointed

A federal court of appeals has vacated a Pipeline and Hazardous Materials Safety Administration fine after finding that the chief safety officer who handed down the civil penalty was not constitutionally appointed.

On Jan. 27, the Sixth Circuit Court of Appeals vacated a $14,460 civil penalty against Polyweave Packaging. Polyweave Packaging argued that that the hazmat agency’s chief safety officer that levied the penalty was “unconstitutionally insulated from removal.” The New Civil Liberties Alliance, which represents Polyweave, claims dozens of companies may have been subject to similar fines.

The group petitioned for a review of a decision by the hazmat agency’s chief safety officer to assess a civil penalty of $14,460 against Polyweave. According to a news release from the National Civil Liberties Alliance, the safety officer was a career civil servant who is not politically accountable and lacked the appropriate authority to levy the fine.

The agency has since conceded that the chief safety officer was not properly appointed at the time of the decision in October 2021.

According to Polyweave’s opening brief, the hazmat agency’s administrative proceeding against the company “was rotten from the start: it began with allegations of regulatory violations based on evidence that a PHMSA inspector altered.”

Additionally, even though a civil penalty is authorized only against a person who “knowingly violated … a regulation,” Polyweave alleged that the agency imposed a penalty

Furthermore, the hazmat agency’s final decision was not issued until October 2021, more than seven years after the violations allegedly occurred in 2015. That “runs afoul of the five-year statute of limitations,” Polyweave argued.

“Constitutional infirmities are especially pronounced in this case because the final agency decision was issued by the chief safety officer, who is not politically accountable and so lacked authority to adjudicate this case,” Polyweave argued in its opening brief. “The chief safety officer’s decision on appeal is thus defective from beginning to end and cries out for correction by this court.”

Article II of the Constitution provides that an “officer” must be appointed by “the president, a court of law, or a head of department.” Polyweave argued that the hazmat agency’s chief safety officer that handed down the civil penalty had not been appointed by either. The federal government conceded to that point and asked to have the penalty vacated and the case remanded back to the agency.

Although the hazmat agency did conceded that the chief safety officer was unconstitutionally appointed, the New Civil Liberties Alliance claimed the administration has yet to concede that its in-house proceedings suffer from many of the other statutory and constitutional defects the alliance raised in its opening brief. That included the statute of limitations and Polyweave being denied jury rights after being accused of knowingly violating a regulation.

“Polyweave is not the only company that was improperly assessed a civil penalty by PHMSA’s unconstitutionally appointed chief safety officer,” Sheng Li, litigation counsel for the New Civil Liberties Alliance, said in a statement. “PHMSA allowed the same officer to impose fines against dozens of other small businesses, even though the agency knew or should have known since the Supreme Court’s 2017 Lucia decision that he lacked authority to do so. Unfortunately, most of those small businesses did not fight the agency through pro bono counsel and so paid fines that the agency now admits should be vacated.” LL