EA-96-065 - Industrial Marine Testing Laboratories, Inc.
Mr. Samuel Boykin, President
Industrial Marine Testing Laboratories, Inc.
3167 Commercial Street
San Diego, California 92113
SUBJECT: ORDER IMPOSING CIVIL MONETARY PENALTY - $1,500
Dear Mr. Boykin:
This refers to your letter dated July 1, 1996, in response to the Notice of Violation and Proposed Imposition of Civil Penalty (Notice) sent to you by our letter dated June 6, 1996. Our letter and Notice described one Severity Level III violation involving your deliberate failure to obtain an NRC license prior to conducting radiography in areas of exclusive federal jurisdiction. To emphasize the significance of making a deliberate decision to violate an NRC requirement and the importance of complying with all NRC requirements in the future, a civil penalty of $1,500 was proposed. The NRC exercised discretion, in accordance with VII.B.6 of the NRC Enforcement Policy, to assess a reduced civil penalty based on the circumstances described in our June 6 letter.
In your July 1 letter, you acknowledged that Industrial Marine Testing Laboratories, Inc. (Industrial Marine), knowingly conducted radiography in exclusive federal jurisdiction without an NRC license or the filing of an NRC Form 241. By separate letter dated July 1, 1996, you also requested further reduction of the civil penalty because paying the $1,500 penalty would hurt the company financially. You also acknowledged that the NRC had considered the size of the company in arriving at the reduced, $1,500 proposed civil penalty.
After consideration of your response, we have concluded for the reasons given in the Appendix attached to the enclosed Order Imposing Civil Monetary Penalty that the civil penalty should not be mitigated any further. Accordingly, we hereby serve the enclosed Order on Industrial Marine Testing Laboratories, Inc., imposing a civil monetary penalty in the amount of $1,500.
The NRC's Enforcement Policy provides, ". . . it is not the NRC's intention that the economic impact of a civil penalty be so severe that it puts a licensee out of business (orders, rather than civil penalties, are used when the intent is to suspend or terminate licensed activities) or adversely affects a licensee's ability to safely conduct licensed activities." Therefore, in view of your statement concerning your financial hardship, we are prepared to permit you to pay this civil penalty over time. If you make arrangements to pay in installments, interest will be assessed and there may be other administrative charges. If you wish to pay in installments, you are to inform Mr. James Lieberman, Director, Office of Enforcement, within 15 days of the date of this letter, and arrange the terms and conditions of payment.
We will review the effectiveness of your corrective actions during a subsequent inspection.
In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice", a copy of this letter and the enclosure will be placed in the NRC's Public Document Room.
Sincerely, Joseph R. Gray, Acting Director Office of Enforcement
Docket No. 150-00004
License No. CA 2799-80
Enclosure: As Stated
State of California
In the Matter of ) ) INDUSTRIAL MARINE TESTING LABORATORIES, INC. ) Docket No. 150-00004 San Diego, California ) License No. CA 2799-80 ) EA 96-065
Industrial Marine Testing Laboratories, Inc. (Industrial Marine or Licensee) is the holder of Radioactive Materials License No. CA 2799-80 issued by the state of California, an Agreement State, on December 27, 1993. The license authorizes the Licensee to possess and use sealed radioactive sources in conducting industrial radiography at specific locations in San Diego, California and at temporary jobsites in areas not under exclusive federal jurisdiction throughout the state of California in accordance with the conditions specified therein. Pursuant to NRC practice, the Licensee may conduct the same activities in areas under NRC jurisdiction provided that the NRC is notified and the provisions of 10 CFR 150.20 are followed. Otherwise, an NRC license is required for such activities in accordance with the requirements of 10 CFR 30.3.
An inspection and investigation of the Licensee's activities was conducted during June 13, 1995, through February 15, 1996. The results of the inspection and investigation indicated that the Licensee had not conducted its activities in full compliance with NRC requirements. A written Notice of Violation and Proposed Imposition of Civil Penalty (Notice) was served upon the Licensee by letter dated June 6, 1996. The Notice stated the nature of the violation, the provision of the NRC's requirements that the Licensee had violated, and the amount of the civil penalty proposed for the violation.
The Licensee responded to the Notice in a letter dated July 1, 1996. In its response, the Licensee admitted the violation but requested further mitigation of the civil penalty, asserting that imposition of the civil penalty would hurt Industrial Marine financially.
After consideration of the Licensee's response and the statements of fact, explanation, and argument for mitigation contained therein, the NRC staff has determined, as set forth in the Appendix to this Order, that the violation occurred as stated and that the penalty proposed for the violation designated in the Notice should be imposed.
In view of the foregoing and pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, IT IS HEREBY ORDERED THAT:
The Licensee pay a civil penalty in the amount of $1,500 within 30 days of the date of this Order, by check, draft, money order, or electronic transfer, payable to the Treasurer of the United States and mailed to Mr. James Lieberman, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738.
The Licensee may request a hearing within 30 days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time must be made in writing to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission Washington, D.C. 20555, and include a statement of good cause for the extension. A request for a hearing should be clearly marked as a "Request for an Enforcement Hearing" and shall be addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission Washington, D.C. 20555, with a copy to the Commission's Document Control Desk, Washington, D.C. 20555. Copies also shall be sent to the Assistant General Counsel for Hearings and Enforcement at the same address and to the Regional Administrator, NRC Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, Texas 76011.
If a hearing is requested, the Commission will issue an Order designating the time and place of the hearing. If the Licensee fails to request a hearing within 30 days of the date of this Order (or if written approval of an extension of time in which to request a hearing has not been granted), the provisions of this Order shall be effective without further proceedings. If payment has not been made by that time, the matter may be referred to the Attorney General for collection.
In the event the Licensee requests a hearing as provided above, the issues to be considered at such hearing shall be:
Whether on the basis of the violation admitted by the Licensee, this Order should be sustained.
FOR THE NUCLEAR REGULATORY COMMISSION Joseph R. Gray, Acting Director Office of Enforcement
Dated at Rockville, Maryland
this 31st day of July 1996
On June 6, 1996, a Notice of Violation and Proposed Imposition of Civil Penalty (Notice) was issued for a violation identified during an NRC inspection and investigation. Industrial Marine Testing Laboratories, Inc. (Industrial Marine or Licensee) responded to the Notice on July 1, 1996. The licensee admitted the violation but requested mitigation on grounds that the imposition of the civil penalty would hurt the company financially. The NRC's evaluation and conclusion regarding the licensee's requests are as follows:
Summary of Licensee's Request for Mitigation
In its July 1, 1996, "Answer to a Notice of Violation," the Licensee stated that it is a very small business and that although the NRC has already taken that into consideration, the imposition of the proposed civil penalty in the amount of $1,500 would hurt the company financially. The Licensee did not want to imply that the NRC was being unfair in arriving at the amount, but noted that it was financial duress that helped to create the problem.
NRC Evaluation of Licensee's Request for Mitigation
The base civil penalty for the uncontested Severity Level III violation is $5,000. However, considering the circumstances, including the fact that Industrial Marine is a small business, the NRC exercised discretion and reduced the civil penalty to $1,500. The reduced civil penalty is roughly equivalent to the fees the Licensee would have paid to remain in compliance.
In cases such as this, an NRC enforcement action is used as a deterrent to emphasize the importance of compliance with requirements. In this regard, further reduction of the penalty would do little to emphasize the importance of compliance with the involved requirements.
However, NRC's Enforcement Policy also provides, "... it is not the NRC's intention that the economic impact of a civil penalty be so severe that it puts a licensee out of business (orders, rather than civil penalties, are used when the intent is to suspend or terminate licensed activities) or adversely affects a licensee's ability to safely conduct licensed activities."
Therefore, to balance these considerations and to be responsive to the potential financial hardship to the licensee, rather than mitigating the civil penalty the licensee should be permitted to pay it in monthly installments.
The NRC has concluded that the violation occurred as stated and that Industrial Marine did not provide an adequate basis for further reduction of the civil penalty. Consequently, the proposed civil penalty in the amount of $1,500 should be imposed. However, to be responsive to the potential for further financial hardship, the NRC should permit Industrial Marine to pay the civil penalty in monthly installments.