Doe v. Tenenbaum

• Decision Date: 09 October 2012
• Docket Number: Civil Action No. 8:11–cv–02958–AW.
• Citation: 900 F.Supp.2d 572
• Parties: Company DOE, Plaintiff, v. Inez TENENBAUM et al., Defendants.
• Court: U.S. District Court — District of Maryland

900 F.Supp.2d 572

Company DOE, Plaintiff,

v.Inez TENENBAUM et al., Defendants.

Civil Action No. 8:11–cv–02958–AW.

United States District Court,

D. Maryland,

Southern Division.

Oct. 9, 2012.

Baruch A. Fellner, Gibson Dunn and Crutcher LLP, Daniel J. Davis, Cooley LLP, Washington, DC, for Plaintiff.

Neil R. White, Office of the United States Attorney, Greenbelt, MD, Roger Joseph Gural, United States Department of Justice, Washington, DC, for Defendants.

REVISED MEMORANDUM OPINION

ALEXANDER WILLIAMS, JR., District Judge.

Plaintiff Company Doe initiates this action against the following Defendants: (1) Inez Tenenbaum, in her official capacity as Chairwoman of the Consumer Product Safety Commission; and (2) the Consumer Product Safety Commission. Plaintiff asserts four related claims under the Administrative Procedure Act (“APA”). Concerning its APA claims, Plaintiff contends that the Commission's decision to publish a report implicating Plaintiffs product in [redacted] is arbitrary and capricious, an abuse of discretion, in excess of its statutory authority, and otherwise not in accordance with the law. See5 U.S.C. § 706(2). Plaintiff also asserts a Fifth Amendment claim predicated on purported due process and takings violations. In addition to an exhaustive review of the record, the Court held a motions hearing on February 1, 2012. The Parties have fully briefed the outstanding motions and the Court deems any further hearings unnecessary. For the reasons articulated herein, the Court issues the ensuing rulings: (1) the Court GRANTS IN PART Plaintiff's Motion to Seal; (2) DENIES AS MOOT Plaintiff's Motion for Preliminary Injunction; (3) GRANTS, nunc pro tunc, Plaintiff's Motion for Oral Argument; (4) DENIES the Consumer Groups' Motion to Unseal Filings; (5) DENIES the Commission's Motion for Summary Judgment; and (6) GRANTS Plaintiff's Cross–Motion for Summary Judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

[redacted] Plaintiff manufactures a consumer product known as [redacted] Plaintiff describes [redacted] as [redacted] Pl.'s Mem. Supp. Mot. Prelim. Inj. 2, Doc. No. 9–1. The Court herein refers to [redacted] in general terms (e.g., [redacted] ).

Defendant Inez Tenenbaum is Chairwoman of the Consumer Product Safety Commission. Defendant Consumer Product Safety Commission is an independent federal regulatory agency responsible for enforcing the Consumer Product Safety Act, 15 U.S.C.A. §§ 2051 et seq. (West 2009). As Plaintiff has sued Defendant Tenenbaum in her official capacity, the Court refers to Tenenbaum and the Consumer Product Safety Commission collectively as “the Commission.”

In August 2008, Congress passed the Consumer Product Safety Improvement Act of 2008 (“CPSIA”), Pub.L. No. 110–314, 122 Stat. 3016 (2008) (codified in scattered sections of 15 U.S.C.A.). According to its preamble, in passing the CPSIA, Congress sought to “establish consumer product safety standards and other safety requirements for children's products and to reauthorize and modernize the Consumer Product Safety Commission.” CPSIA, 122 Stat. at 3016. Section 212 of the CPSIA establishes a consumer product safety database. 15 U.S.C.A. § 2055a (West 2009). Specifically, § 212 requires the Commission to “establish and maintain a database on the safety of consumer products, that is—(A) publicly available; (B) searchable; and (C) accessible through the Internet website of the Commission.” Id. § 2055a(a)(1). In relevant part, the database must include “[r]eports of harm relating to the use of consumer products ... that are received from ... local ... government agencies.” Id. § 2055a(b)(1) (emphasis added). The Commission launched the database on March 11, 2011. See SaferProducts.gov, CPSC.gov, http:// www. saferproducts. gov (last visited June 17, 2012).

The Parties' dispute traces to the Commission's planned publication of a report about the [redacted] On [redacted], an unidentified local government agency submitted an incident report to the Commission. AR000009–11. The report reads as follows:

[redacted]

AR000009.

On [redacted], Plaintiff argued in a letter that the report was “materially inaccurate” within the meaning of the CPSIA and demanded that the Commission refrain from publishing it. AR000030–33. Plaintiff so argued pursuant to CPSIA provisions empowering manufacturers to contest the publication of reports on the ground that they contain materially inaccurate information. See15 U.S.C.A. § 2055(c) (West 2009). Plaintiff maintained that the report contained confusing and contradictory statements. For instance, the report states that [redacted] See AR000009.

In the following days, Plaintiff submitted medical evidence to the Commission to buttress its contention that the report was materially inaccurate. [redacted]

[redacted]

Id.

Additionally, [redacted] and presented his findings in a report to the Commission. AR000069–72. [redacted] Pl.'s Mem. Supp. Mot. Prelim. Inj. 9, Doc. No. 9–1. [redacted]

On [redacted], Dr. [redacted] reviewed the report of harm to determine whether it described a risk of harm related to [redacted] AR000046. Dr. [redacted] is an engineering psychologist for the Commission. Dr. [redacted] concluded that the report described [redacted] See id. Regarding the risk of harm the report purports to describe, Dr. [redacted] reasoned:

[redacted]

Id. Further attempting to associate the risk of harm to [redacted] Dr. [redacted] continued:

[redacted]

Id. In a declaration prepared after the commencement of the litigation, J. De Wane Ray, Assistant Executive Director of the Office of Hazard Identification and Reduction at the Commission, states that he agrees with Dr. [redacted]'s assessment. AR0000195.

On [redacted], the Commission notified Plaintiff that the information in the incident report that Plaintiff identified as materially inaccurate met the definition of materially inaccurate information in 16 C.F.R. § 1101.26 (2011). AR000078. In a bid to rid the report of the material inaccuracy, the Commission thus redacted it:

[redacted]

Id.

The day after, Plaintiff filed another material inaccuracy claim. AR00082–84. Plaintiff argued, inter alia, that the second report compounded the first report's inaccuracy by suggesting a relationship between a [redacted] and the [redacted] To buttress its argument, Plaintiff highlighted [redacted]

On [redacted] or thereabouts, the Commission notified Plaintiff that the information in the report's second version was materially inaccurate. AR000090. For the second time, the Commission tried to purge the report of its material inaccuracy, producing a third iteration:

[redacted]

Id.

On the same day, Plaintiff lodged a Complaint in this Court. Compl., Doc. No. 1. Contemporaneously, Plaintiff filed a Motion for Leave to Seal Case and to Proceed Under a Pseudonym (“Motion to Seal”). Pl.'s Mot. Seal, Doc. No. 2. In its Motion to Seal, Plaintiff requests the Court to enter an order “requiring all pleadings, documents, and forms to be filed under seal” and “allowing it to proceed under the pseudonym Company Doe.” Id. at 1.

Plaintiffs Complaint seeks to enjoin the Commission from publishing the third incident report. Plaintiff impugns the third report as baseless and inflammatory and contended that its publication, besides being unlawful, would cause irreparable harm to its reputation and financial well-being.

The Complaint contains four counts. Count I is for abuse of discretion. That is, Plaintiff alleges that the Commission abused its discretion by deciding to publish the third report and, as a result, ran afoul of the Administrative Procedure Act (“APA”). See5 U.S.C. § 706(2)(A). Count II avers that the Commission's decision to publish the report constitutes arbitrary and capricious conduct in contravention of 5 U.S.C. § 706(2)(A). Count III, for its part, contends that the Commission's actions exceeded its statutory authority in transgression of 5 U.S.C. § 706(2)(C). Lastly. Count IV asserts a two-prong Fifth Amendment claim. The first prong alleges a due process violation. The second prong posits a violation of the Takings Clause. In its prayer for relief, among other things, Plaintiff asks the Court to issue a preliminary injunction enjoining publication of the report.

Consistent with its prayer, on October 21, 2011, Plaintiff filed a Motion for Preliminary Injunctive Relief (“Motion for Preliminary Injunction”). See Pl.'s Mot. Prelim. Inj., Doc. No. 9. Plaintiff makes numerous arguments in its Motion for Preliminary Injunction, of which a triumvirate is salient: (1) the Commission's publication of the report would amount to arbitrary and capricious conduct; (2) the Commission's publication of the report would be an abuse of discretion; and (3) Plaintiff has otherwise satisfied the prerequisites for a preliminary injunction.

The Commission filed a Memorandum in Opposition to Plaintiff's Motion for Preliminary Injunction (“Opposition to Motion for Preliminary Injunction”) on November 4, 2011. Def.'s Mem. Opp'n Pl.'s Mot. Prelim. Inj., Doc. No. 16. The Commission allots substantial space in its Opposition to Motion for Preliminary Injunction to the argument that its construction of the CPSIA merits deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Moreover, in passing, the Commission intimates that its decision to publish the report is not “final agency action” under the APA.

On November 20.2011, Plaintiff filed an Unopposed Motion Requesting Oral Argument on Plaintiff's Motion for Preliminary Relief (“Motion for Oral Argument”). Mot. Oral Arg., Doc. No. 20. The Court scheduled an oral argument for February 1, 2012, on which date both Parties appeared and presented their positions before the Court. The Court grants this Motion nunc pro tunc. In the interest of clarity, the Court defers discussing the Parties' oral argument until it has discussed other procedural aspects of the case.

Originally, Pl...