Kaiser Alum. & Chem. Corp. v. US CONSUMER, ETC.

• Decision Date: 11 March 1977
• Docket Number: Civ. A. No. 76-44.
• Citation: 428 F. Supp. 177
• Parties: KAISER ALUMINUM AND CHEMICAL CORPORATION, a corporation, Plaintiff, v. The UNITED STATES CONSUMER PRODUCT SAFETY COMMISSION et al., Defendants.
• Court: U.S. District Court — District of Delaware

428 F. Supp. 177

KAISER ALUMINUM AND CHEMICAL CORPORATION, a corporation, Plaintiff, v. The UNITED STATES CONSUMER PRODUCT SAFETY COMMISSION et al., Defendants.

Civ. A. No. 76-44.

United States District Court, D. Delaware.

March 11, 1977.

Charles S. Crompton, Jr., of Potter, Anderson & Corroon, Wilmington, Del., Arnold M. Lerman and Ronald J. Greene, of Wilmer, Cutler & Pickering, Washington, D. C., Max Thelen, Jr., Fredric C. Nelson and Kennedy P. Richardson, of Thelen, Marrin, Johnson & Bridges, San Francisco, Cal., Robert W. Turner and Dennis M. Day, of Kaiser Aluminum & Chemical Corp., Oakland, Cal., for plaintiff.

John H. McDonald, Interim U. S. Atty., Wilmington, Del., Thomas S. Brett and Edward B. Craig, IV, U. S. Dept. of Justice, Washington, D. C., Michael A. Brown and David Schmeltzer, U. S. Consumer Product Safety Commission, Washington, D. C., for defendants.

STAPLETON, District Judge:

This is an action brought by Kaiser Aluminum and Chemical Corporation challenging on several grounds¹ actions of the Consumer Product Safety Commission (hereinafter "CPSC" or "the Commission") with respect to aluminum branch circuit wiring. Kaiser sought both preliminary and permanent injunctive relief. The Commission moved to dismiss the complaint. In an earlier Opinion I denied both the motion to dismiss and the request for a preliminary injunction. Thereafter, the parties agreed to, and the Court approved, a stipulation severing for early trial the question of whether, by the actions complained of, the Commission exceeded its jurisdiction under the Consumer Product Safety Act, 15 U.S.C. § 2051, et seq. (hereinafter "CPSA" or "the Act"). The parties agreed to a trial of this question on affidavits and depositions. The written record is before the Court and the matter has been briefed and argued. It is now ripe for disposition.

In my earlier Opinion I denied the preliminary injunction because I found that Kaiser had not shown the requisite likelihood of irreparable injury. However, I concluded on the basis of the record then before me that it was more likely than not that Kaiser would succeed on its argument that the Commission does not have the jurisdiction which it claims. The Commission has not presented any factual data or legal arguments that sway me from that initial determination.

I. THE STATUTE.

The statute defines a consumer product as any article which is "produced or distributed"

(i) for sale to a consumer for use in or around a permanent or temporary household or residence, a school, in recreation or otherwise; or

(ii) for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation or otherwise;²

The Act explicitly excludes from its coverage

any article which is not customarily produced or distributed for sale to, or use by, or enjoyment of, a consumer.³

II. THE STATUTORY EXCLUSION.

The purpose of this exclusion is to exempt from the Act those products which may occasionally be sold to a consumer but which are, in fact, industrial products — that is, products which are not produced or distributed with the intention that they will be sold to or used by consumers in substantial quantities.⁴ The exclusion does not cover all products the majority of the sales of which are to commercial or industrial users. All that is required to give the Commission jurisdiction, I conclude, is that an article which a consumer uses in or around a household be regularly available to consumers through channels to which they have reasonable access and that there be substantial incidence of consumer sales.

The evidence in this case shows that branch circuit wiring is available for sale to consumers through ordinary consumer channels. Before reviewing that evidence, I note that I have not considered aluminum branch circuit wiring as a product distinct from other branch circuit conductors. Kaiser has proffered no persuasive rationale for distinguishing aluminum from other branch circuit conductors. The hazards associated with each may differ but functionally the products are the same. Thus, if analysis were to show that, generically, branch circuit wiring is a consumer product, I would conclude that the CPSC could regulate aluminum branch circuit wiring for whatever hazards might be unique to it.⁵

The sales data submitted by the parties took a variety of forms. Results of a field survey, a mail survey, and a telephone survey have been filed, along with numerous affidavits from a wide array of individuals who have some tie to the distribution and regulation of branch circuit wiring. Much of the information is marginally useful because it deals solely with sales of aluminum wiring and no other conductor. Nevertheless, there is an ample record to show that a small but significant portion of branch circuit wiring is produced for sale to consumers.

Affidavits of officials of Sears, Roebuck and Company, the nation's largest retailer, and Wickes Lumber, the nation's largest retailer of building supplies, reveal that both companies stock branch circuit wiring for regular sale to consumers.⁶ Commission investigators posing as consumer/doit-yourself homeowners who wished to purchase electrical wiring visited "hundreds" of wholesale and retain outlets of various kinds, e. g., hardware stores, electrical wholesalers, building supply houses. They were able to purchase wiring at 58 establishments in various locations throughout the country. Although many stores did not carry wiring, very few of those who did refused to sell to do-it-yourselfers.⁷ Some did require that wire be purchased in lengths of 250 or 500 feet.⁸

In his affidavit, George Ganzenmuller, editor of Electrical Wholesaling, reported the results of a survey his magazine conducted in 1975 among electrical wholesalers. It showed that, among those who responded, retailers or the general public accounted for 6.3% of their total sales.⁹ The telephone survey conducted among wholesalers and retailers which Kaiser commissioned and which its authors say can be generalized to reflect the complete national sales picture shows that 35% of the retailers of hardware and building supply materials stock house wire.¹⁰

On this record, I feel confident in concluding that branch circuit wiring is produced and distributed in part for sale to consumers. If that were the complete test of what is a consumer product, I would yield to the Commission's judgment that it has jurisdiction over the product. But the statute requires more. The product not only must be produced or distributed for sale to consumers; it must also be for use by a consumer "in or around a . . . household".

III. USE "IN OR AROUND" A HOUSEHOLD.

There can be no honest dispute that the product we are dealing with here is a building supply material intended for incorporation in a branch wiring system of a home. While the Commission's briefing makes much of a proposed distinction between regulating the design and composition of aluminum branch wiring and regulating its use in branch circuit wiring systems,¹¹ I conclude that this distinction lacks practical substance in the context of a product which is produced and distributed solely for installation in branch wiring systems. This wiring simply cannot be used by a consumer unless and until it is installed as part of the branch wiring system, and the CPSC has pointed to no hazards associated with aluminum wiring other than as a part of an installed branch wiring system. On the record before me, it would appear that there are none.

The actions of the Commission show that its interest is in aluminum branch wiring systems. The publications of which Kaiser here complains all refer to hazards which the Commission perceives to exist with respect to residential aluminum branch wiring systems. The scope of its concern is also evidenced by the notice commencing the development of a consumer product safety standard.¹² The CPSC there stated that the standard would be applicable to "household wiring systems involving . . aluminum wire and various connections. . . ." Both the wire and "all products, devices and assemblies which are used for the purpose of connecting, terminating, bonding, splicing, joining or otherwise maintaining electrical continuity" were named in the list of products to be regulated under the standard that is being developed.¹³ But wholly apart from the scope of the Commission's past activities in this area, this Court is mindful that it must give a practical and administratively feasible construction to the regulatory scheme established in the Act. I think it highly unlikely, to say the least, that Congress contemplated a construction of the Act which would require the CPSC to address any problem that may exist with aluminum branch wiring other than in the context of its use by consumers. The notice of the Commission's safety standard proceedings clearly suggests that it shares this view. Accordingly, the crucial question, I believe, is whether Congress intended that branch wiring systems would be within the scope of the responsibility of the CPSC or some other agency. In order to decipher this intent we must look to the statutory definition of a consumer product and to the legislative history.

As I observed in my original Opinion, it strains the language employed by Congress to say that something which is a part of a home is for use by a consumer "in or around" a home, and that is a necessary element of the statutory test of a consumer product. As I also pointed out at that...