EA-99-043 - Metorex, Inc.

August 19, 1999

EA 99-043

John I. H. Paterson, Ph. D.
President
Metorex, Inc.
Princeton Crossroads Corporate Center
250 Phillips Boulevard
Ewing, NJ 08618

SUBJECT:

NOTICE OF VIOLATION (NRC Inspection Report 98-001 and NRC Investigation Report No.1-98-036)

Dear Dr. Paterson:

This refers to the NRC inspection conducted on August 20, 1998, and a subsequent investigation conducted by the NRC Office of Investigations (OI). The investigation was conducted after the former President informed the NRC that Metorex, Inc. had distributed approximately 25 x-ray fluorescence analyzer devices containing radioactive material (iron-55, cadmium-109, and americium-241) between October 1997 and July 1998 prior to obtaining NRC authorization to do so. The investigation was initiated to determine, in part, whether the company's actions were willful.

Based on the investigation, OI concluded, that (1) the former Vice President/Radiation Safety Officer (RSO) deliberately failed to stop shipments of the devices between January 1998 and July 1998, knowing that Metorex was not authorized to distribute them; and (2) the former RSO deliberately failed to submit quarterly reports to the NRC regarding the transfer of the material for the fourth calendar quarter of 1997 and the first calendar quarter of 1998. A copy of the synopsis of the OI investigation was forwarded to you with our letter, dated July 26, 1999.

Based on the inspection and OI investigation, three apparent violations of NRC requirements were identified. In a letter dated July 26, 1999, the NRC informed you of the apparent violations. Prior to the letter, the NRC also informed you that it might not be necessary to conduct a predecisional enforcement conference in order to enable the NRC to make an enforcement decision. Rather, the NRC provided you an opportunity to either (1) respond to the apparent violations discussed in the letter within 30 days of the date of the letter, or (2) request a predecisional enforcement conference. You initially requested a conference which was to be held on August 16, 1999 to discuss the apparent violations, their causes, and your corrective actions. However, on August 10, 1999, your attorney, Mr. Dave Lewis, informed Ms. Judy Joustra of my staff that if the NRC could reach an enforcement decision without conducting an enforcement conference, Metorex would have no objection to responding in writing in lieu of a conference. Your response was provided to the NRC in a letter dated, August 12, 1999.

Based on the information developed during the investigation, and the information provided in your response, three violations of NRC requirements are being cited. The violations, which are described in the enclosed Notice of Violation (Notice), involve (1) unauthorized transfer, between October 1997 and July 1998, of devices containing millicurie quantities of radioactive material (this violation was deliberate in that the former Vice President failed to stop such transfers when he became aware in January 1998 that the devices were being distributed without NRC approval); (2) deliberate failure to submit to the NRC the required quarterly reports when such transfers of the devices were made to persons for use under a general license during the fourth calendar quarter of 1997 and the first calendar quarter of 1998; and (3) as of June 30, 1998, the individual named as the Radiation Safety Officer on your license was no longer employed by your company.

The first two violations are of particular concern because of their deliberate nature. It is essential that the NRC be able to maintain the highest trust and confidence that licensees and their employees will act with integrity, communicate with candor, and abide by requirements designed to protect the health and safety of the public. Therefore, the first two violations have been classified as a Severity Level III problem in accordance with the "General Statement of Policy and Procedures for NRC Enforcement Actions" (Enforcement Policy), NUREG-1600, Revision 1. The third violation is classified at Severity Level IV.

In accordance with the Enforcement Policy, a base civil penalty in the amount of $2,750 is considered for a Severity Level III violation or problem. Because the violations were willful, the NRC considered whether credit was warranted for Identification and Corrective Action in accordance with the civil penalty assessment process in Section VI.B.2 of the Enforcement Policy. Credit for identification is warranted since the violations were identified by your former President and reported to the NRC. Credit for corrective actions is warranted because your corrective actions were considered prompt and comprehensive. These corrective actions were described in your referenced August 12, 1999 letter, as well as a previous letter, dated August 28, 1998, from the former President of Metorex, in response to a Confirmatory Action Letter issued by the NRC on August 12, 1998. These actions included: (1) immediately stopping distribution of the unauthorized probes, and obtaining registration of the probes; (2) amending your license to identify a new RSO; (2) training the staff on NRC requirements, including instruction regarding your penalties associated with willful violations, which you stated will result in immediate termination; and (4) conducting an audit of the entire radiation safety program.

Therefore, I have been authorized, after consultation with the Director, Office of Enforcement, to not issue a civil penalty in this case. If not for your identification and corrective actions, a civil penalty would have been issued. In addition, issuance of this Notice constitutes escalated enforcement action that may subject you to increased inspection effort.

The NRC has concluded that information regarding the reason for the violations, and the corrective actions taken and planned to correct the violations and prevent recurrence, were already described adequately in your August 28, 1998 and August 12, 1999 letters to the NRC. Therefore, you are not required to respond to this letter unless the description therein does not accurately reflect your corrective actions or your position. In that case, or if you choose to provide additional information, you should follow the instructions specified in the enclosed Notice.

In accordance with 10 CFR 2.790 of the NRC's "Rules of Practice," a copy of this letter and its enclosure, will be placed in the NRC Public Document Room.

		Sincerely,
		Original Signed by: James T. Wiggins
		Hubert J. Miller Regional Administrator

Docket Nos. 030-34247; 030-34246
License Nos. 29-30342-02G; 29-30342-01

Enclosure: Notice of Violation

cc w/encl:
State of New Jersey

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ENCLOSURE

NOTICE OF VIOLATION

 

Metorex, Inc. Ewing, New Jersey

Docket Nos. 030-34247; 030-34246 License Nos. 29-30342-02G; 29-30342-01 EA 99-043

During an NRC inspection conducted on August 20, 1998, as well as a subsequent investigation conducted by the NRC Office of Investigations (OI), violations of NRC requirements were identified. In accordance with the "General Statement of Policy and Procedure for NRC Enforcement Actions," (Enforcement Policy), NUREG-1600, the violations are set forth below:

A.	10 CFR 30.3 requires, in part, that except for persons exempted, no person shall transfer or use byproduct material except as authorized by a specific or general license issued pursuant to NRC regulations. Contrary to the above, from October 1997 to July 31, 1998, the licensee transferred 26 SIPS probes containing millicurie quantities of cadmium-109 and iron-55 to unauthorized persons without a valid NRC license authorizing such transfers, and was not exempt from the requirements for a license. (01013)
B.	10 CFR 32.52(a) requires, in part, that each person licensed under 32.51 to initially transfer devices to generally licensed persons shall report to the Director of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, all transfers of such devices to persons for use under the general license in 10 CFR 31.5. The report must cover each calendar quarter and must be filed within 30 days thereafter. Contrary to the above, as of August 1998, the licensee did not report to the Commission all transfers of devices to persons for use under a general license. Specifically, the licensee transferred devices to persons for use under a general license during the fourth calendar quarter of 1997 and the first calendar quarter of 1998 and did not submit the required quarterly reports. (01023)
These violations represent a Severity Level III problem (Supplements VI and VII).
C.	Condition 11.B of License No. 29-30342-01 identifies the Radiation Safety Officer (RSO) by name. Contrary to the above, from June 30, 1998 to November 12, 1998, the individual named as the RSO on the license was no longer the RSO. Specifically, as of June 30, 1998, the individual named as the RSO was no longer employed by the licensee during that time, and a license amendment naming a new RSO was not submitted to the NRC until November 9, 1998, and not approved until November 12, 1998. (02014)

This is a Severity Level IV violation (Supplement VI)

The NRC has concluded that information regarding the reason for the violations, and the corrective actions taken and planned to correct the violation and prevent recurrence were adequately described during inspection, and are already adequately addressed on the docket in the licensee's letters dated August 28, 1998, and August 12, 1999. However, you are required to submit a written statement or explanation pursuant to 10 CFR 2.201 if the description therein does not accurately reflect your corrective actions or your position. In that case, or if you choose to respond, clearly mark your response as a "Reply to a Notice of Violation," and send it to the U.S. Nuclear Regulatory Commission, ATTN:  Document Control Desk, Washington, DC 20555 with a copy to the Regional Administrator, Region I, within 30 days of the date of the letter transmitting this Notice of Violation (Notice).

If you contest this enforcement action, you should also provide a copy of your response, with the basis for your denial, to the Director, Office of Enforcement, United States Nuclear Regulatory Commission, Washington, DC 20555-0001.

If you choose to respond, your response will be placed in the NRC Public Document Room (PDR). Therefore, to the extent possible, the response should not include any personal privacy or proprietary information so that it can be placed in the PDR without redaction.

Dated this 19th day of August 1999