Jake's Fireworks Inc. v. United States Consumer Product Safety CommissionJake's Fireworks Inc. v. United States Consumer Product Safety Commission
PUBLISHED
Argued: May 8, 2024 Decided: June 26, 2024
Before DIAZ, Chief Judge, WILKINSON, Circuit Judge, and MOTZ, Senior Circuit Judge.
Affirmed by published opinion. Judge Motz wrote the opinion, in which Chief Judge Diaz and Judge Wilkinson joined.
ARGUED: Oliver J. Dunford, PACIFIC LEGAL FOUNDATION, Palm Beach Gardens, Florida, for Appellant. Daniel Tenny, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Damien M. Schiff, Sacramento, California, Molly E. Nixon, PACIFIC LEGAL FOUNDATION, Arlington, Virginia; Timothy L. Mullin, Jr., Dwight W. Stone II, MILES & STOCKBRIDGE PC, Baltimore, Maryland, for Appellant. Brian M. Boynton, Principal Deputy Assistant Attorney General, Cynthia A. Barmore, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Erek L. Barron, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellees.
DIANA GRIBBON MOTZ, Senior Circuit Judge:
Jake‘s Fireworks Inc., a large importer and distributer of consumer fireworks, seeks judicial review of several warning notices it received from the U.S. Consumer Product Safety Commission. The district court dismissed the complaint after determining that the notices do not constitute final agency actions under the Administrative Procedure Act. For the reasons explained below, we affirm.
I.
Congress created the Consumer Product Safety Commission (“the Commission” or “the agency“) in 1972 “to protect the public against unreasonable risks of injury associated with consumer products.” See
Jake‘s Fireworks Inc. (“Jake‘s Fireworks“) is a large importer and distributer of consumer fireworks. From 2014 to 2018, the Commission‘s staff sampled fireworks imported by Jake‘s Fireworks. About one-third of those samples indicated that the fireworks were dangerously overloaded with explosive material, rendering them “banned hazardous substances” under the agency‘s regulations. See
The Commission‘s Compliance Office accordingly sent Jake‘s Fireworks several “Notice[s] of Non-Compliance.” E.g., J.A. 102.1 These Notices, though worded slightly differently, all informed Jake‘s Fireworks of test results indicating that the fireworks were banned hazardous substances. The Notices then stated that “the staff requests that the distribution of the sampled lots not take place and that the existing inventory be destroyed.” E.g., J.A. 165. Each Notice also set forth a procedure for documenting the destruction of the fireworks if Jake‘s Fireworks “chose to destroy the goods” in question, and provided a 90-day deadline by which to do so. E.g., J.A. 103. The Notices concluded by warning of potential statutory penalties, including civil fines and criminal liability, for distributing and selling banned hazardous substances.
Jake‘s Fireworks, not pleased with this advice, has twice sought to obtain judicial review of it. First, in 2019, Jake‘s Fireworks sued the Commission in federal court, seeking injunctive and declaratory relief from the agency‘s enforcement of its fireworks regulations via the Notices. The district court determined that the Notices did not rise to the level of reviewable final agency actions under the Administrative Procedure Act because the Notices did not consummate the Commission‘s decisionmaking process. See Jake‘s Fireworks Inc. v. U.S. Consumer Prod. Safety Comm‘n, 498 F. Supp. 3d 792, 806-07 (D. Md. 2020). In reaching this conclusion, the court relied on two rationales. First, the court noted that Jake‘s Fireworks could request an informal hearing with the Compliance Office to seek reconsideration of the Notices. Id. at 803, 806. Second, the court determined that the Commission, not its Compliance Office, had final decisionmaking authority on whether to pursue legal enforcement. Id. at 803. Because the Notices thus represented only the “intermediate ruling[s] of a subordinate official,” the court dismissed the lawsuit without prejudice for lack of jurisdiction. Id. at 803, 807.
Following the dismissal of its first lawsuit, Jake‘s Fireworks in November 2020 requested an informal hearing with the Compliance Office to contest the Notices. The Compliance Office declined to hold a hearing or to revisit its findings, and advised Jake‘s Fireworks that the Notices expressed only “an initial determination in the Commission‘s process.” J.A. 318. The Compliance Office also stated that the Commission had made no final determination on whether the products violated the prohibition of dangerously overloaded fireworks at
In response, Jake‘s Fireworks again filed suit — this action — once more challenging the Commission‘s supposed enforcement of its fireworks regulations via
II.
The only question presented is whether the Notices constitute reviewable final agency actions.
A.
The Administrative Procedure Act (“APA“) waives the federal government‘s sovereign immunity “to permit judicial review of only ‘final agency action[s].‘” Nat‘l Veterans Legal Servs. Program v. U.S. Dep‘t of Def., 990 F.3d 834, 839 (4th Cir. 2021) (quoting
An agency action must satisfy two conditions in order to be deemed “final” under the APA: “First, the action must mark the consummation of the agency‘s decisionmaking process — it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow.” U.S. Army Corps of Eng‘rs v. Hawkes Co., 578 U.S. 590, 597 (2016) (quoting Bennett v. Spear, 520 U.S. 154, 177-78 (1997)) (emphasis added). An action must meet both prongs of the Bennett test to be final. Golden & Zimmerman, LLC v. Domenech, 599 F.3d 426, 432 (4th Cir. 2010).
We “first look” to the statutes and regulations that govern the agency action at issue to determine whether it is final. See, e.g., Flue-Cured Tobacco Coop. Stabilization Corp. v. EPA, 313 F.3d 852, 858 (4th Cir. 2002). When examining the consummation prong of Bennett, “[t]he decisionmaking processes set out in an agency‘s governing statutes and regulations are key to determining whether an action is properly attributable to the agency itself and represents the culmination of that agency‘s consideration of an issue.” Soundboard Ass‘n v. FTC, 888 F.3d 1261, 1267 (D.C. Cir. 2018). An action that is “informal, or only the ruling of a subordinate official, or tentative” ordinarily does not conclude an agency‘s decisionmaking process. Id. (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 151 (1967)).
The Compliance Office‘s Notices of Noncompliance are not final — they do not “mark the consummation of the agency‘s decisionmaking process.” See Hawkes, 578 U.S. at 597 (cleaned up). It is the Commission itself, not its Compliance Office, that makes final determinations on whether goods are banned hazardous substances under the Federal Hazardous Substances Act and the Consumer Product Safety Act. See
The Commission‘s regulatory scheme provides its Compliance Office with a role that is subordinate, investigatory, and advisory to the Commission. The Compliance Office‘s responsibilities include “develop[ing] surveillance strategies and programs designed to assure compliance,” “conduct[ing] inspections and in-depth investigations,” “identifying and addressing safety hazards in consumer products,” and “promoting industry compliance with existing safety rules.”
Thus the Notices from the Compliance Office hardly constitute the culmination of the Commission‘s decisionmaking process. For a Notice of Noncompliance does not trigger any of the administrative, civil, or criminal proceedings that the Commission could pursue. If a party ignores a Notice of Noncompliance, “the staff may request the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint.” Handbook at 19 (emphasis added). But the power to make a final determination as to whether a violation has occurred and whether to pursue enforcement rests with the Commission itself; its Compliance Office lacks authority to issue binding decisions on behalf of the agency. See
Jake‘s Fireworks nonetheless insists that the Commission has delegated authority to its Compliance Office to issue final determinations on behalf of the agency. But though the Commission could delegate this authority to its staff, see
Moreover, the Commission reports that it has made no such delegation to the Compliance Office, either in
B.
Examination of the language of the Notices confirms that they convey preliminary findings and advice from agency staff rather than a final determination from the Commission itself.2 The Notices informed Jake‘s Fireworks that sampling results indicated violations of the agency‘s fireworks regulations and stated that ”the staff requests” that Jake‘s Fireworks destroy the products. E.g., J.A. 165 (emphasis added). Subsequent Notices stated that ”the staff reiterates its requests.” E.g., J.A. 187–88 (emphasis added). The Handbook referenced in the Notices explains the advisory nature of the Notices; the Notices do not command any action. Handbook 5–6. Nor has the Compliance Office even recommended that the Commission take enforcement action. Govt. Br. at 24.
Jake‘s Fireworks argues that the Notices impose an obligation because some of them state that the fireworks “must be destroyed within 90 days from the date of this letter unless an extension of time is requested and approved by” the Compliance Office. J.A. 103. But the same Notice that Jake‘s Fireworks quotes indicates that these procedures for documenting the destruction of the fireworks apply only if Jake‘s Fireworks “chose to destroy the goods.” Id. (emphasis added). Other language in the Notice that Jake‘s Fireworks points to — for example, “it is a prohibited act to introduce or deliver . . . or receive in interstate commerce any banned hazardous substance,” J.A. 103–04 — merely track the general statutory prohibition on selling such substances. See
Indeed, when the Commission itself does issue orders, it says so, stating that they are “final decisions and orders” to perform clearly binding commands. See, e.g., Final Decision and Order, In re Zen Magnets, LLC, CPSC Docket No. 12–2, at 1, 54–56 (C.P.S.C. Oct. 26, 2017) (ordering that Zen Magnets “shall cease” from selling certain products). The agency‘s final orders come from the Commission itself, not agency staff in the Compliance Office, and issue only after the Commissioners have voted
In an attempt to salvage its case, Jake‘s Fireworks relies on precedents arising from other regulatory contexts, each of which differs markedly from the one before us today. For example, Sackett v. EPA concerned a compliance order issued via EPA‘s authority to enter binding administrative orders under the Clean Water Act. 566 U.S. 120, 123 (2012) (citing
The Notices at issue here simply do not represent the Commission‘s last word on this matter. They merely provide preliminary findings and warnings by agency staff, like countless other letters and guides that federal agencies issue throughout the year. The position that Jake‘s Fireworks advances “would quickly muzzle any informal communications between agencies and their regulated communities — communications that are vital to the smooth operation of both government and business.” See Golden, 599 F.3d at 432 (quoting Indep. Equip. Dealers Ass‘n v. EPA, 372 F.3d 420, 428 (D.C. Cir. 2004) (Roberts, J.)). If the APA made informal advice like these Notices subject to judicial review, it seems “likely that many voluntary and helpful comments from agency staff would be withheld altogether.” See Sanitary Bd. of Charleston v. Wheeler, 918 F.3d 324, 338 (4th Cir. 2019). We decline to adopt that view today.4
III.
For the reasons set forth above, the judgment of the district court is
AFFIRMED.