OI 1-2018-006, NRC Office of Investigations Report No. 1-2018-006, Dead Ringer, LLC EA-18-183

NRC Office of Investigations Report No. 1-2018-006, Dead Ringer, LLC EA-18-183

ML19016A359
Person / Time
Issue date:	05/09/2019
From:	Kevin Williams NRC/NMSS/DMSST
To:	Erdle J Dead Ringer LLC
Sophie Holiday
References
EA-18-183, OI 1-2018-006
Download: ML19016A359 (10)

Text

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 May 9, 2019 EA-18-183 Dead Ringer, LLC ATTN: Mr. Jesse Erdle, President 2144 Brighton Henrietta Town Line Rd.

Rochester, NY 14623

SUBJECT:

U.S. NUCLEAR REGULATORY COMMISSION OFFICE OF INVESTIGATIONS REPORT NO. 1-2018-006, DEAD RINGER, LLC

Dear Mr. Erdle:

This letter refers to the results of an investigation initiated by the U.S. Nuclear Regulatory Commission (NRC) Office of Investigations (OI) at Dead Ringer, LLC on July 26, 2018. The purpose of the investigation was to determine whether Dead Ringer, LLC, had continued1 to willfully distribute gun sights containing tritium, despite having asserted during its December 2017 pre-decisional enforcement conference that such sales had halted in early 2016 and that Dead Ringer was no longer selling gun sights containing tritium on Amazon. A factual summary of the OI report is provided in Enclosure 1.

Based on the results of this investigation, two apparent violations were identified and are being considered for escalated enforcement action in accordance with the NRC Enforcement Policy.

The current Enforcement Policy is included on the NRCs Web Site at http://www.nrc.gov/about-nrc/regulatory/enforcement/enforce-pol.html.

The apparent violations involve: (1) initially transferring, for sale or distribution, gun sights containing tritium (H-3), prior to obtaining an NRC license for such activity pursuant to Title 10 of the Code of Federal Regulations (10 CFR) 30.3, 30.19, 32.22; and (2) failure to request an evaluation for a sealed source or device pursuant to 10 CFR 32.210. These apparent violations are in addition to the previously identified apparent violations in EA-17-175.

The failure to obtain the required licenses for the distribution of these gun sights prior to distributing these products is significant because it resulted in the NRC not being able to conduct its regulatory responsibilities to ensure that the products were safe for distribution to members of the general public, and inhibited the process of regulatory oversight. These apparent violations are listed in Enclosure 1.

1 In response to the NRCs letter dated November 13, 2017 (Agencywide Documents Access and Management System (ADAMS) Accession No. ML17298C208), Dead Ringer, LLC participated in a PEC (ADAMS Accession No. ML17333A675) on December 12, 2017, for three apparent violations (EA-17-175) related to the initial transfer, for sale or distribution, gun sights containing tritium prior to obtaining an NRC license; failure to request an evaluation for a sealed source or device; and importing material (tritium) into the United States without having the required license for possession of the material containing byproduct material, issued by the Agreement State or the NRC.

J. Erdle 2 Additionally, the NRC is concerned that these apparent violations may have been willful in nature, based on the available information that is summarized in Enclosure 2. Willful violations are of significant concern to the NRC because the NRCs regulatory programs rely upon the integrity of entities, applicants, and licensees to comply with NRC requirements in order to ensure the health and safety of workers and the public.

During a May 8, 2019, telephonic exit meeting conducted with you, as Dead Ringer, LLCs CEO/President, Mr. Hipolito Gonzalez and Ms. Sophie Holiday, of the NRC, discussed these apparent violations, the significance of the issues, and the need for lasting and effective corrective actions.

As discussed with you, the NRC has not made a final determination regarding the apparent violations or willful misconduct, or that enforcement action will be taken against Dead Ringer, LLC. Since the NRC has not made a final determination in this matter, a Notice of Violation is not being issued at this time. In addition, please be advised that the characterization of the apparent violations may change as a result of further NRC review. Before the NRC makes its enforcement decision, we are providing you with an opportunity to respond in writing to the apparent violations addressed in Enclosure 2 within 30 days of the date of this letter.

Your written response should be clearly marked as a Response to Apparent Violation in NRC Investigation Report No. 1-2018-006; EA-18-183 and should include for each apparent violation: (1) the reason for the apparent violation or, if contested, the basis for disputing the apparent violation; (2) the corrective steps that have been taken and the results achieved; (3) the corrective steps that will be taken; and (4) the date when full compliance will be achieved. Your response may reference or include previously docketed correspondence, if the correspondence adequately addresses the required response. Your written response should be sent to the U.S. Nuclear Regulatory Commission, ATTN: Document Control Desk, Washington, DC 20555-0001, with a copy to Mr. Hipolito Gonzalez, Chief, Material Safety and Tribal Liaison Branch, Division of Nuclear Materials Safety, Security, State and Tribal Programs, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, within 30 days of the date of this letter.

In presenting any corrective actions, you should be aware that the promptness and comprehensiveness of the actions will be considered in assessing any civil penalty for the apparent violation. The guidance in the enclosed NRC Information Notice 96-28, Suggested Guidance relating to Development and Implementation of Corrective Action, (Enclosure 3) may be helpful.

If an adequate response is not received within the time specified or an extension of time has not been granted by the NRC, the NRC will proceed with its enforcement decision.

In addition, please be advised that the number and characterization of apparent violations described in the enclosure may change as a result of further NRC review. You will be advised by separate correspondence of the results of our deliberations on this matter.

In accordance with 10 CFR 2.390 of the NRCs Rules of Practice, a copy of this letter, its enclosure(s), and your response, if you choose to provide one, will be made available electronically for public inspection in the NRC Public Document Room or from the NRCs Agencywide Documents Access and Management System, accessible from the NRCs Web site at http://www.nrc.gov/reading-rm/adams.html. To the extent possible, your response should not include any personal privacy, proprietary, or safeguards information so that it can be made

J. Erdle 3 available to the Public without redaction. Any information forwarded to NRC should be clearly labeled on the first page with the case reference number EA-18-183.

Should you have any questions, please contact Mr. Hipolito Gonzalez of my staff at (301) 415-5637.

Sincerely,

/RA/

Kevin Williams, Deputy Director Division of Materials Safety, Security, State, and Tribal Programs Office of Nuclear Material Safety and Safeguards

Enclosures:

1. Apparent Violations Being Considered for Escalated Enforcement

2. Factual Summary of OI Investigation Report No. 1-2018-006

3. NRC Information Notice 96-28

J. Erdle 4

SUBJECT:

U.S. NUCLEAR REGULATORY COMMISSION OFFICE OF INVESTIGATIONS REPORT NO. 1-2018-006, DEAD RINGER, LLC Dated: 5/8/2019 ADAMS Accession No.: ML19016A359 *via email OFFICE MSST/MSLB MSST/MSLB MSST/MSEB NMSS/MSST NAME THerrera HGonzalez* SHoliday* KWilliams DATE 1/11/19 1/11/19 1/11/19 1/23/19 OFFICE OIP/ECNB OGC OE/EB NMSS/MSST NAME SBaker* SKirkwood* JPeralta/DFurst for/* KWilliams DATE 1/28/19 1/28/19 2/07/19 5/03/19 OFFICIAL RECORD

APPARENT VIOLATIONS BEING CONSIDERED FOR ESCALATED ENFORCEMENT Apparent Violation 1:

Title 10 Code of Federal Regulations (10 CFR) 30.3(a), "Activities requiring license" provides, in part, that no person shall manufacture, produce, transfer, receive, acquire, own, possess, or use byproduct material except as authorized in a specific or general license issued in accordance with the regulations in this chapter."

10 CFR 30.19(a), provides an exemption to the requirement for a license in 10 CFR 30.3(a) for persons who receive, possess, use, transfer, own or acquire tritium, krypton-85, or promethium-147 in self-luminous products manufactured, processed, produced, or initially transferred in accordance with a specific license issue pursuant to § 32.22, which license authorizes the initial transfer of the product for use under § 30.19, such as gun sights containing tritium.

Contrary to the above, Dead Ringer, Inc. distributed material to unlicensed persons without an NRC license to distribute. Specifically, between approximately May 2017 and January 2018, Dead Ringer, Inc., initially transferred, for sale or distribution, approximately 850 gun sights containing tritium, which is a byproduct material, to unlicensed persons without obtaining a specific license pursuant to 10 CFR 32.22.

Apparent Violation 2:

10 CFR 30.19(b) provides, in part, that any person who desires to initially transfer for sale or distribution self-luminous products containing tritium, krypton-85, or promethium-147 for use under 10 CFR 30.19(a) should apply for a specific license pursuant to § 32.22 and for a certificate of registration in accordance with § 32.210, which states that the product may be distributed by the licensee to persons exempt from the regulations pursuant to § 30.15(a).

Contrary to the above, Dead Ringer, LLC distributed gun sights containing tritium without having an evaluation by the NRC and a registration in the Sealed Source and Device Registry in accordance with 10 CFR 32.210, as is required by 10 CFR 32.22(a)(3)(ii).

Enclosure 1

FACTUAL

SUMMARY

OFFICE OF INVESTIGATIONS REPORT 1-2018-006 On December 12, 2017, the U.S. Nuclear Regulatory Commission (NRC) held a pre-decisional enforcement conference (PEC) with Dead Ringer, LLC and its CEO/President related to the apparent deliberate violations identified in the NRC letter dated November 13, 20171. During the December 2017 PEC, the CEO/President stated that he had stopped selling the gun sights containing tritium and had issued a recall for them. The CEO/President specifically called out Amazon and stated that Amazon did not have any more of Dead Ringers products. Following the PEC, the NRC staff identified products (gun sights containing tritium) for sale on the Dead Ringer Official Store on Amazon.

On July 26, 2018, the NRCs OI, Region I field office initiated an investigation to determine whether Dead Ringer, LLC, had continued to willfully distribute gun sights containing tritium, using Cammengas license number, without (1) obtaining an NRC license for activities pursuant to Title 10 Code of Federal Regulations (10 CFR) 30.3, 30.19, 32.22 prior to initially transferring, for sale or distribution, gun sights containing tritium; and (2) requesting an evaluation for a sealed source or device pursuant to 10 CFR 32.210, contrary to the statements presented at the December 2017 PEC that such sales had halted in early 2016. The investigation was completed on October 23, 2018, and was documented in the OI Report 1-2018-006.

The OI investigation revealed that between approximately May 2017 and January 2018, Dead Ringer, LLC initially transferred approximately 850 of these gun sights to unlicensed persons without having a NRC exempt distribution license. Supplemental information to OI Report 1- 2018-006 was issued on April 17, 2019. The supplemental information revealed that under the Vice-Presidents oversight, 400 out of the 850 gun sights containing tritium were transferred to Amazon for sale between May 2017 to December 2017.

The OI investigation confirmed through documents and correspondence from Amazon, that Dead Ringer, LLC was still selling gun sights containing tritium through Amazon through January 2018 (when Amazon halted the sales after NRC inquiries). As a result of the May 2017 OI investigation, the CEO/President of Dead Ringer, LLC directed the employees at Dead Ringer, LLC to cease sales of gun sights containing tritium. In his OI interview, the CEO/President of Dead Ringer, LLC stated that he had nothing to do with the Amazon account and that it was fully managed by the Vice-President of Dead Ringer, LLC.

In his OI interview, the Vice-President of Dead Ringer, LLC stated that he had sole responsibility for the Dead Ringer Official Store account on Amazon. Additionally, the Vice-President stated by his own admission that he recalled all of Dead Ringers products from big box stores, but that it was a mistake that he never got around to stopping the sales of tritium on Amazon.

Based on the evidence gathered during the May 2017 investigation, it appears that the Vice-President of Dead Ringer, LLC was aware of the existence and applicability of the NRC licensing requirements to his business. Further, it appears that despite his awareness of the NRC licensing requirements, the Vice-President of Dead Ringer, LLC deliberately continued to distribute gun sights containing byproduct material between approximately May 2017 to January 2018 without having the necessary NRC licenses, in apparent violation of 10 CFR 30.3(a), 30.19(a), 30.19(b), 32.22, and 32.210.

1 Letter to Dead Ringer, LLC, dated November 13, 2017. Agencywide Documents and Access Management System (ADAMS) Accession No. ML17298C208 Enclosure 2

UNITED STATES NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS WASHINGTON, D.C. 20555 May 1, 1996 NRC INFORMATION NOTICE 96-28: SUGGESTED GUIDANCE RELATING TO DEVELOPMENT AND IMPLEMENTATION OF CORRECTIVE ACTION Addressees All material and fuel cycle licensees.

Purpose The U.S. Nuclear Regulatory Commission (NRC) is issuing this information notice to provide addressees with guidance relating to development and implementation of corrective actions that should be considered after identification of violation(s) of NRC requirements. It is expected that recipients will review this information for applicability to their facilities and consider actions, as appropriate, to avoid similar problems. However, suggestions contained in this information notice are not new NRC requirements; therefore, no specific action or written response is required.

Background

On June 30, 1995, NRC revised its Enforcement Policy, to clarify the enforcement program's focus by, in part, emphasizing the importance of identifying problems before events occur, and of taking prompt, comprehensive corrective action when problems are identified. Consistent with the revised Enforcement Policy, NRC encourages and expects identification and prompt, comprehensive correction of violations.

In many cases, licensees who identify and promptly correct non-recurring Severity Level IV violations, without NRC involvement, will not be subject to formal enforcement action. Such violations will be characterized as "non-cited" violations as provided in Section 2.3.2 of the Enforcement Policy. Minor violations are not subject to formal enforcement action.

Nevertheless, the root cause(s) of minor violations must be identified and appropriate corrective action must be taken to prevent recurrence.

If violations of more than a minor concern are identified by the NRC during an inspection, licensees will be subject to a Notice of Violation and may need to provide a written response, as required by 10 CFR 2.201, addressing the causes of the violations and corrective actions taken to prevent recurrence.

In some cases, such violations are documented on Form 591 (for materials licensees) which constitutes a notice of violation that requires corrective action but does not require a written response. If a significant violation is involved, a predecisional enforcement conference may be held to discuss those actions.

The quality of a licensee's root cause analysis and plans for corrective actions may affect the NRC's decision regarding both the need to hold a predecisional enforcement conference with the licensee and the level of sanction proposed or imposed.

Enclosure 3

2 Discussion Comprehensive corrective action is required for all violations. In most cases, NRC does not propose imposition of a civil penalty where the licensee promptly identifies and comprehensively corrects violations. However, a Severity Level III violation will almost always result in a civil penalty if a licensee does not take prompt and comprehensive corrective actions to address the violation.

It is important for licensees, upon identification of a violation, to take the necessary corrective action to address the noncompliant condition and to prevent recurrence of the violation and the occurrence of similar violations. Prompt comprehensive action to improve safety is not only in the public interest, but is also in the interest of licensees and their employees. In addition, it will lessen the likelihood of receiving a civil penalty. Comprehensive corrective action cannot be developed without a full understanding of the root causes of the violation.

Therefore, to assist licensees, the NRC staff has prepared the following guidance, that may be used for developing and implementing corrective action. Corrective action should be appropriately comprehensive to not only prevent recurrence of the violation at issue, but also to prevent occurrence of similar violations. The guidance should help in focusing corrective actions broadly to the general area of concern rather than narrowly to the specific violations.

The actions that need to be taken are dependent on the facts and circumstances of the particular case.

The corrective action process should involve the following three steps:

1. Conduct a complete and thorough review of the circumstances that led to the violation.

Typically, such reviews include:

Interviews with individuals who are either directly or indirectly involved in the violation, including management personnel and those responsible for training or procedure development/guidance. Particular attention should be paid to lines of communication between supervisors and workers.

Tours and observations of the area where the violation occurred, particularly when those reviewing the incident do not have day-to-day contact with the operation under review. During the tour, individuals should look for items that may have contributed to the violation as well as those items that may result in future violations. Reenactments (without use of radiation sources, if they were involved in the original incident) may be warranted to better understand what actually occurred.

Review of programs, procedures, audits, and records that relate directly or indirectly to the violation. The program should be reviewed to ensure that its overall objectives and requirements are clearly stated and implemented.

Procedures should be reviewed to determine whether they are complete, logical, understandable, and meet their objectives (i.e., they should ensure compliance with the current requirements). Records should be reviewed to determine whether there is sufficient documentation of necessary tasks to

3 provide a record that can be audited and to determine whether similar violations have occurred previously. Particular attention should be paid to training and qualification records of individuals involved with the violation.

2. Identify the root cause of the violation.

Corrective action is not comprehensive unless it addresses the root cause(s) of the violation. It is essential, therefore, that the root cause(s) of a violation be identified so that appropriate action can be taken to prevent further noncompliance in this area, as well as other potentially affected areas. Violations typically have direct and indirect cause(s). As each cause is identified, ask what other factors could have contributed to the cause. When it is no longer possible to identify other contributing factors, the root causes probably have been identified. For example, the direct cause of a violation may be a failure to follow procedures; the indirect causes may be inadequate training, lack of attention to detail, and inadequate time to carry out an activity. These factors may have been caused by a lack of staff resources that, in turn, are indicative of lack of management support. Each of these factors must be addressed before corrective action is considered to be comprehensive.

3. Take prompt and comprehensive corrective action that will address the immediate concerns and prevent recurrence of the violation.

It is important to take immediate corrective action to address the specific findings of the violation. For example, if the violation was issued because radioactive material was found in an unrestricted area, immediate corrective action must be taken to place the material under licensee control in authorized locations. After the immediate safety concerns have been addressed, timely action must be taken to prevent future recurrence of the violation. Corrective action is sufficiently comprehensive when corrective action is broad enough to reasonably prevent recurrence of the specific violation as well as prevent similar violations.

In evaluating the root causes of a violation and developing effective corrective action, consider the following:

1. Has management been informed of the violation(s)?

2. Have the programmatic implications of the cited violation(s) and the potential presence of similar weaknesses in other program areas been considered in formulating corrective actions so that both areas are adequately addressed?

3. Have precursor events been considered and factored into the corrective actions?

4. In the event of loss of radioactive material, should security of radioactive material be enhanced?

5. Has your staff been adequately trained on the applicable requirements?

4

6. Should personnel be re-tested to determine whether re-training should be emphasized for a given area? Is testing adequate to ensure understanding of requirements and procedures?

7. Has your staff been notified of the violation and of the applicable corrective action?

8. Are audits sufficiently detailed and frequently performed? Should the frequency of periodic audits be increased?

9. Is there a need for retaining an independent technical consultant to audit the area of concern or revise your procedures?

10. Are the procedures consistent with current NRC requirements, should they be clarified, or should new procedures be developed?

11. Is a system in place for keeping abreast of new or modified NRC requirements?

12. Does your staff appreciate the need to consider safety in approaching daily assignments?

13. Are resources adequate to perform, and maintain control over, the licensed activities?

Has the radiation safety officer been provided sufficient time and resources to perform his or her oversight duties?

14. Have work hours affected the employees' ability to safely perform the job?

15. Should organizational changes be made (e.g., changing the reporting relationship of the radiation safety officer to provide increased independence)?

16. Are management and the radiation safety officer adequately involved in oversight and implementation of the licensed activities? Do supervisors adequately observe new employees and difficult, unique, or new operations?

17. Has management established a work environment that encourages employees to raise safety and compliance concerns?

18. Has management placed a premium on production over compliance and safety?

Does management demonstrate a commitment to compliance and safety?

19. Has management communicated its expectations for safety and compliance?

20. Is there a published discipline policy for safety violations, and are employees aware of it? Is it being followed?