Why contract lawyers need to understand administrative law

From Holland & Knight's Aviation: Centerline newsletter for May, 2010, "Developments in HAZMAT Regulations: Shipping Lithium Batteries by Air" by Jonathan Epstein:

The pace of changes in the hazardous materials (HAZMAT) regulations governing the transporting of lithium batteries (and equipment containing lithium batteries) continues to create confusion among shippers and carriers. Further, the shipment of lithium batteries by air remains a top enforcement priority for the Federal Aviation Administration (FAA), the agency which enforces transport of HAZMAT by air in the U.S. ...

The Hazardous Materials Regulations (HMR) apply to shipments to, from, or through the United States. However, when transporting batteries by air, virtually all carriers require shipments be made in accordance with the IATA Dangerous Goods Regulations. As a practical matter, such terminology is correct. However, as a legal matter, the HMR incorporates by reference the ICAO Technical Instructions (ICAO TI), subject to certain U.S. variations. In particular, certain lithium-metal batteries are prohibited for shipment on passenger aircraft under U.S. law and must be marked "PRIMARY LITHIUM BATTERIES – FORBIDDEN FOR TRANSPORT ABOARD PASSENGER AIRCRAFT." The IATA Regulations essentially restate and provide additional amplifying information to the ICAO TI. Thus, when a carrier requires that a shipment comply with IATA, it seeks compliance with the ICAO TI subject to U.S. variations and additional IATA amplifying instructions. ...

In 2009, the ICAO TI (and IATA Regulations) significantly changed the labeling and documentation requirements for packaging and marking lithium batteries and equipment containing or packed with lithium batteries. Although substantial, these changes did not mirror the more stringent U.S. requirements already in place. The "Packing Instruction" and supplemental guidance documents provided by IATA and ICAO are the key elements to consider when determining the applicable requirements.

Confusion Over Requirements

Because the requirements differ depending on the size and type of battery, whether the battery is in or with equipment, and the number of cells or batteries in a "package," there is ample room for confusion. As most major carriers and logistics providers have been targeted by the FAA for HAZMAT compliance, the FAA may be quick to question labeling by shippers and apply blanket conservative policies. Hence, for routine shipments through major commercial carriers, it may take some time to resolve the confusion arising out of the requirements. ...

What the purchase order or contract specifies for shipping may confuse matters and skew liability. Thanks to Lexology for the pointer. EMM