Advance Mach. Co. v. Consumer Product Safety Com'n
| Decision Date | 06 March 1981 |
| Docket Number | No. 3-80 Civ. 372.,3-80 Civ. 372. |
| Citation | 510 F. Supp. 360 |
| Parties | ADVANCE MACHINE COMPANY and Robert J. Pond, Plaintiffs, v. CONSUMER PRODUCT SAFETY COMMISSION, Defendant. |
| Court | U.S. District Court — District of Minnesota |
Dorsey, Windhorst, Hannaford, Whitney & Halladay by Edward J. Schwartzbauer, Minneapolis, Minn., for plaintiffs.
U. S. Dept. of Justice by Rosalind Avnet Lazarus, Washington, D. C., and Consumer Product Safety Commission by Susan Birenbaum, Washington, D. C., for defendant.
This matter comes before the court upon the motion of defendant Consumer Product Safety Commission "Commission" to dismiss pursuant to Rule 12(b) of the Fed.R. Civ.P. Memoranda were submitted on behalf of all parties, and oral argument was heard on December 19, 1980.
In July, 1977, the Commission commenced an action in United States District Court for the District of Columbia against plaintiffs Advance Machine Company and Robert J. Pond and several others, alleging that the automatic baseball pitching machines they manufactured and distributed were "imminently hazardous consumer products." Civil Action No. 77-1323. A consent judgment providing for corrective action was entered in May of 1978.
Subsequently, the Commission's Directorate for Compliance and Enforcement investigated whether the defendants in the District of Columbia action had complied with the reporting requirements of 15 U.S.C. § 2064(b). By letter of May 24, 1979, plaintiffs were notified of this investigation.
On April 23, 1980, the Commission voted to authorize the issuance of an administrative complaint against plaintiffs alleging a violation of the requirements of 15 U.S.C. § 2064(b). Plaintiffs were notified on May 15, 1980 that the Commission would issue a complaint in 30 days unless before then a settlement was reached.
On June 19, 1980, plaintiffs commenced the above-entitled action, alleging that they "are aggrieved by the acts of the defendant ... Commission in excess of its jurisdictional powers." In their complaint, plaintiffs requested1 preliminary and permanent injunctions preventing defendant from (1) proceeding with an administrative hearing for the purpose of assessing civil penalties against plaintiffs and with any discovery, motions or other matters preliminary to such hearing; and (2) "taking any steps to determine ... if plaintiffs ... have violated the Consumer Product Safety Act or to assess any penalty therefor against plaintiffs." In their complaint, plaintiffs also asked for "a declaration that: defendant has no power or jurisdiction to assess a civil penalty against plaintiffs, ... nor to determine ... by administrative procedure whether or not plaintiffs ... have violated the Consumer Product Safety Act nor to conduct any proceedings pursuant to the regulations adopted by the Commission, 45 Fed.Reg. 29206 (May 1, 1980); that neither plaintiff is a `manufacturer' of the products that are the subject of the Commission's allegations ... within the meaning of the Consumer Product Safety Act; and further that defendant is exceeding its jurisdictional limits by proceeding to administratively adjudicate the existence or nonexistence of such alleged violation and to assess a civil penalty for any such alleged violation."
On August 4, 1980, the Commission filed the motion which presently is before the court. The Commission requests that the Court dismiss the above-entitled action "because plaintiffs have failed to exhaust their administrative remedies" and "because no issue raised by the Complaint is ripe for review by the Court at this time."
On December 16, 1980, the Administrative Law Judge presiding over the administrative proceedings initiated by the Commission declined to rule on the issue of the Commission's jurisdiction to proceed and refused to authorize an interlocutory appeal of that decision.
In Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967), the Supreme Court indicated that the "basic rationale" of the "ripeness" doctrine is:
to prevent the courts through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.
The Abbott Court directed courts considering the "ripeness" issue to examine "the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration." Id.
Plaintiffs' complaint puts into controversy an issue that is "ripe" for judicial decision: the Commission's statutory power to proceed administratively for the purpose of assessing a civil penalty against plaintiffs. This issue is a purely legal one, and therefore fit for judicial decision. Id. In addition, plaintiffs may unnecessarily suffer the expense and inconvenience of participation in the Commission's proceedings if court consideration is withheld. Moreover, the administrative decision has been formalized, its effects are being felt by plaintiffs, and judicial resolution of this issue will not entangle the court in an abstract disagreement over administrative policies. Id. Finally, this issue must be "ripe" for decision now, for if it is not decided soon, the administrative hearings will have been held and the issue will be moot. Abstention on ripeness grounds clearly is not proper here. See generally Davis, Administrative Law Treatise § 21.01 (1958).
However, plaintiffs' requests that the court declare that the Commission lacks power to assess a civil penalty against plaintiffs and issue an injunction to prevent the Commission from assessing such a penalty are not "ripe" for adjudication. Although a resolution of the issue of the Commission's power to assess an administrative penalty may be necessary in resolving the statutory power of the Commission to proceed, as an independent issue it is not "ripe" for adjudication at this time. Plaintiffs will not suffer hardship if the court withholds consideration of this issue, since the Commission will decide whether it has the power to assess a civil penalty against plaintiffs before it does so, and since an adverse decision will be appealable to a federal court as a final order under the Administrative Procedure Act. Moreover, the administrative decision to assess a civil penalty against plaintiffs has not been formalized, nor have its effects been felt in a concrete way by plaintiffs. See Abbott Laboratories v. Gardner, supra, at 148, 87 S.Ct., at 1515.
In West v. Bergland, 611 F.2d 710 (8th Cir. 1979), cert. denied, ___ U.S. ___, 101 S.Ct. 79, 66 L.Ed.2d 23 (1980), the United States Court of Appeals for the Eighth Circuit declared that exhaustion of administrative remedies should not be required unless the governmental interests served by exhaustion outweigh the interests served by immediate judicial resolution of the matter. As regards the Commission's statutory power to proceed administratively, plaintiffs' interest in immediate judicial review outweighs the slight governmental interest in requiring exhaustion.2
Plaintiffs will expend time and money in the administrative appeal process unnecessarily if the Commission in fact lacks jurisdiction to conduct a proceeding to assess a civil penalty and immediate judicial review is denied. In contrast, the Government gains little if exhaustion is required. Exhaustion of administrative remedies almost certainly would not result in the Commission's correcting any error it has made in proceeding. It is unlikely that the Commission will decide that it lacks jurisdiction to proceed under regulations which took five years to promulgate. Moreover, the administrative law judge has indicated that he will not consider the issue of the Commission's jurisdiction to proceed until after all other issues are decided, thus rendering useless any challenge to the statutory validity of the proceedings themselves. In light of the futility of pursuing administrative remedies on the issue before the court, plaintiffs cannot be said to be "flouting" the administrative process. See id., at 715. There simply is no reason to require exhaustion of administrative remedies where the remedies are futile, since the governmental interests served in such a case are minimal. Id., at 720. See Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1960); Chambers v. Local Union No. 639, 578 F.2d 375 (D.C.Cir.1978); Goclowski v. Penn Central Transp. Co., 571 F.2d 747 (3d Cir. 1977).
However, exhaustion of administrative remedies should be required on plaintiffs' request for a declaration that they are not "manufacturers" of products within the meaning of the Consumer Product Safety Act. Substantial governmental interests are served by permitting the Commission to apply its special competence to the question of whether plaintiffs are "manufacturers." See West v. Bergland, supra, at 715. In light of the desire to discourage the flouting of administrative remedies, id., and in view of the absence of irreparable harm resulting from a denial of judicial review, the court finds that the governmental interest in requiring exhaustion on this question outweigh plaintiffs' interest in immediate judicial review.3
Upon the foregoing,
IT IS ORDERED That defendant's motion to dismiss be and it hereby is granted in part and denied in part.
IT IS FURTHER ORDERED That:
1. Plaintiffs' claims for an injunction prohibiting defendant from assessing a civil penalty against plaintiffs and for a declaration that defendant lacks the power to assess such a penalty be and they hereby are dismissed as not "ripe" for judicial resolution.
2. Plaintiffs' claim for a declaration that plaintiffs are not "manufacturers" within the...
To continue reading
Request your trial
-
U.S. v. Shelton Wholesale, Inc.
...560 F.Supp. 288 (N.D.N.Y.1983); Advance Machine Co. v. Consumer Product Safety Comm'n, 666 F.2d 1166 (8th Cir.1981), reversing 510 F.Supp. 360 (D.Minn.1981). 31. Shelton argues that because "[t]he all-important disjunctive `or' is not found within subsection B, but only between subsections ......
-
United States v. Advance Mach. Co.
...the Commission possessed authority to assess civil penalties through administrative hearings. Advance Machine Co. v. Consumer Product Safety Commission, 510 F.Supp. 360, 364-66 (D.Minn.1981). Relying upon a statutory amendment passed after Judge Alsop's decision, the Eighth Circuit Court of......
-
Roach v. National Transp. Safety Bd.
...is similar to the impact of other civil sanctions so that this factor is not decisive. Cf. Advance Machine Company v. Consumer Product Safety Commission, 510 F.Supp. 360, 366 n. 7 (D.Minn.) rev'd on other grounds and remanded, 666 F.2d 1166 (8th Cir.1981) ("Here, the only one of the seven M......
-
U.S. v. Athlone Industries, Inc.
...penalty. The district court upheld the Commission's authority to proceed administratively. Advance Machine Company v. Consumer Product Safety Commission, 510 F.Supp. 360, 364-365 (D.Minn.1981). The Eighth Circuit Court of Appeals, however, reversed the Minnesota district court's ruling on D......