EA-97-145 - Cartier, Inc.
Gary A. Saage, Jr.
Vice President - Finance
Two Corporate Drive
Shelton, Connecticut 06484
SUBJECT: NOTICE OF VIOLATION AND PROPOSED IMPOSITION OF CIVIL PENALTY - $7,500 (NRC Inspection Report No. 999-90001/97-005070-02792/97-001)
Dear Mr. Saage:
This letter refers to the NRC inspection conducted in Shelton, Connecticut, on March 12, 1997, during which you and other Cartier staff confirmed that Cartier has distributed more than 16,000 timepieces containing up to 4.6 millicuries of tritium from your warehouse in Dallas, Texas, from 1985 through 1997 without an NRC license authorizing such distribution. Although you ceased such distribution in January 1997, the NRC issued you a Confirmatory Action Letter on March 14, 1997, which confirmed your commitment to not resume distribution until the NRC issued a license authorizing such use. At the time, you had already submitted an application for an exempt distribution license with the NRC Office of Nuclear Material Safety and Safeguards (NMSS), and NMSS issued you a license on April 29, 1997.
In our April 3, 1997 letter, forwarding you the inspection report, the NRC informed you that you could request a predecisional enforcement conference. In your May 1, 1997 response, you requested an enforcement conference which was held with you and other Cartier personnel on May 15, 1997, to discuss the violation, its causes, and your corrective actions. A copy of the enforcement conference report will be forwarded to you by separate correspondence.
Based on the inspection findings and the information you provided at the predecisional enforcement conference, the NRC has determined that a violation of NRC requirements occurred. The violation is described in the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice), and the circumstances surrounding it are described in detail in the subject inspection report. The NRC is principally concerned that for an extended duration, you bypassed the regulatory framework established to assure that possession, use, and distribution of radioactive materials is done safely and in accordance with requirements. By doing so, the NRC was unable to conduct inspections to determine whether the methods and controls you established for distributing radioactive material were in accordance with the terms and conditions of an NRC license. Given the importance of assuring that distribution of radioactive material is properly controlled, the violation is classified at Severity level III in accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600.
Normally, civil penalties are assessed according to the Civil Penalty Assessment Factors in Section VI.B.2 of the NRC Enforcement Policy. However, the NRC Enforcement Policy also recognizes in Section VII that discretion may be appropriate to ensure that the proposed civil penalty reflects the significance of the circumstances and conveys the appropriate regulatory message. After considering the regulatory significance of the violation which included the inability of the NRC to conduct inspections of your activities, the duration of the violation, and the costs of maintaining an NRC license which you avoided during the period of noncompliance; the NRC staff determined that it is appropriate to exercise enforcement discretion in this case and issue a civil penalty in the amount of $7,500.
In determining the amount of the civil penalty, recognition was given for corrective action. The NRC recognizes that you eventually identified the need for a license and ceased distribution in January 1997. The NRC recognizes that you initiated comprehensive corrective action, described at the conference, which included: (1) applying for an NRC license; (2) ceasing distribution of the materials; (3) recalling time devices from all of your Cartier stores; and (4) maintaining your operations in a shutdown condition until your license was issued. Consideration was also given to the length of time during which the NRC was unable to carry out its statutory responsibility. Between 1985 and 1997, Cartier, Inc. distributed approximately 16,000 timepieces containing byproduct material without a specific or general license in violation of NRC regulations. However, since the statute of limitations period for assessing civil penalties is only five years (28 USC 2462), the NRC only considered the period between June 1992 and January 1997 for purposes of determining the amount of the civil penalty.
Therefore, to emphasize the importance of conducting NRC activities only after receiving an NRC license, and adhering to the terms and conditions of that license, I have been authorized, after consultation with the Director, Office of Enforcement, and the Deputy Executive Director for Regulatory Effectiveness, Program Oversight, Investigations and Enforcement, to issue the enclosed Notice of Violation and Proposed Imposition of Civil Penalty (Notice) in the amount of $7,500 for the violation described in the enclosed Notice. In addition, issuance of this Notice constitutes escalated enforcement action that may subject you to increased inspection effort.
You are required to respond to this letter and should follow the instructions specified in the enclosed Notice when preparing your response. The NRC will use your response, in part, to determine whether further enforcement action is necessary to ensure compliance with regulatory requirements.
In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter, its enclosure, and your response will be placed in the NRC Public Document Room.
Sincerely, Hubert J. Miller Regional Administrator
Docket No. 999-90001
License No. N/A
Enclosure: Notice of Violation and Proposed Imposition of Civil Penalty
State of New York
State of Texas
PROPOSED IMPOSITION OF CIVIL PENALTY
Cartier, Inc. Docket No. 999-90001 Shelton, Connecticut License No. N/A EA 97-145
During an NRC inspection on March 12, 1997, a violation of NRC requirements was identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," (Enforcement Policy), NUREG-1600, the NRC proposes a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended (Act), 42 U.S.C. 2282 and 10 CFR 2.205. The violation and associated civil penalty are set forth below:
10 CFR 30.3 provides in part that, except for persons exempt as provided in Part 30 and Part 150, no person shall manufacture, produce, transfer, receive, acquire, own, possess, or use byproduct material except as authorized in a specific or general license.
10 CFR 30.15(a) provides in part that persons who initially transfer for sale or distribution certain items containing byproduct material are not exempt from the requirements for a license.
Contrary to the above, between 1985 and January 1997, Cartier, Inc., which did not fall within the exemptions of the regulations in Part 30 or Part 150, distributed approximately 16,000 timepieces containing byproduct material consisting of up to 4.6 millicuries of tritium and did not possess a specific or general license.
This is a Severity Level III violation (Supplement VI).
Civil Penalty - $7,500.
Pursuant to the provisions of 10 CFR 2.201, Cartier, Inc. (Licensee) is required to submit a written statement or explanation to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, within 30 days of the date of this Notice of Violation and Proposed Imposition of Civil Penalty (Notice). This reply should be clearly marked as a "Reply to a Notice of Violation" and should include for each alleged violation: (1) admission or denial of the alleged violation, (2) the reasons for the violation if admitted, and if denied, the reasons why, (3) the corrective steps that have been taken and the results achieved, (4) the corrective steps that will be taken to avoid further violations, and (5) the date when full compliance will be achieved. If an adequate reply is not received within the time specified in this Notice, an Order or a Demand for Information may be issued as why the license should not be modified, suspended, or revoked or why such other action as may be proper should not be taken. Consideration may be given to extending the response time for good cause shown. Under the authority of Section 182 of the Act, 42 U.S.C. 2232, this response shall be submitted under oath or affirmation.
Within the same time as provided for the response required above under 10 CFR 2.201, the Licensee may pay the civil penalty by letter addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, with a check, draft, money order, or electronic transfer payable to the Treasurer of the United States in the amount of the civil penalty proposed above, or the cumulative amount of the civil penalties if more than one civil penalty is proposed, or may protest imposition of the civil penalty in whole or in part, by a written answer addressed to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission. Should the Licensee fail to answer within the time specified, an order imposing the civil penalty will be issued. Should the Licensee elect to file an answer in accordance with 10 CFR 2.205 protesting the civil penalty, in whole or in part, such answer should be clearly marked as an "Answer to a Notice of Violation" and may: (1) deny the violation listed in this Notice, in whole or in part, (2) demonstrate extenuating circumstances, (3) show error in this Notice, or (4) show other reasons why the penalty should not be imposed. In addition to protesting the civil penalty in whole or in part, such answer may request remission or mitigation of the penalty.
In requesting mitigation of the proposed penalty, the factors addressed in Section VI.B.2 of the Enforcement Policy should be addressed. Any written answer in accordance with 10 CFR 2.205 should be set forth separately from the statement or explanation in reply pursuant to 10 CFR 2.201, but may incorporate parts of the 10 CFR 2.201 reply by specific reference (e.g., citing page and paragraph numbers) to avoid repetition. The attention of the Licensee is directed to the other provisions of 10 CFR 2.205, regarding the procedure for imposing a civil penalty.
Upon failure to pay any civil penalty due which subsequently has been determined in accordance with the applicable provisions of 10 CFR 2.205, this matter may be referred to the Attorney General, and the penalty, unless compromised, remitted, or mitigated, may be collected by civil action pursuant to Section 234c of the Act, 42 U.S.C. 2282c.
The response noted above (Reply to Notice of Violation, letter with payment of civil penalty, and Answer to a Notice of Violation) should be addressed to: James Lieberman, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738, with a copy to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region I.
Because your response will be placed in the NRC Public Document Room (PDR), to the extent possible, it should not include any personal privacy, proprietary, or safeguards information so that it can be placed in the PDR without redaction. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information that should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.
Dated at King of Prussia, Pennsylvania
this 18th day of June 1997