Dow Chemical v. CONSUMER PRODUCT SAFETY COM'N

• Citation: 464 F. Supp. 904
• Decision Date: 13 February 1979
• Docket Number: Civ. A. No. 781166.
• Parties: DOW CHEMICAL, USA, an Operating Unit of the Dow Chemical Company, Diamond Shamrock Corp., Ethyl Corporation, PPG Industries, Inc., Stauffer Chemical Company, Vulcan Materials Company, Louisiana Chemical Association v. CONSUMER PRODUCT SAFETY COMMISSION.
• Court: U.S. District Court — Western District of Louisiana

464 F. Supp. 904

DOW CHEMICAL, USA, an Operating Unit of the Dow Chemical Company, Diamond Shamrock Corp., Ethyl Corporation, PPG Industries, Inc., Stauffer Chemical Company, Vulcan Materials Company, Louisiana Chemical Association v. CONSUMER PRODUCT SAFETY COMMISSION.

Civ. A. No. 781166.

United States District Court, W. D. Louisiana, Lake Charles Division.

February 13, 1979.

Theodore L. Garrett and Corinne A. Goldstein, Covington & Burling, Washington, D. C., Gene W. Lafitte, John M. Wilson, and J. Berry St. John, Jr., Liskow & Lewis, New Orleans, La., George H. Robinson, Jr., Liskow & Lewis, Lafayette, La., Oliver P. Stockwell, Stockwell, Sievert, Vicellio, Clements & Shaddock, Lake Charles, La., for plaintiffs.

Charles R. McConachie, Chief, Consumer Affairs Section, Antitrust Division, Dept. of Justice, Washington, D. C., J. Ransdall Keene, U. S. Atty., Frances O. Allen, Asst. U. S. Atty., Shreveport, La., for defendants; Margaret A. Freeston, Acting Gen. Counsel, D. Stephen Lemberg, Asst. Gen. Counsel, David M. Melnick, Consumer Product Safety Commission, Washington, D. C., of counsel.

MEMORANDUM RULING ON DEFENDANT'S MOTION FOR RECONSIDERATION

VERON, District Judge.

This court on September 28, 1978 issued a preliminary injunction, pending a final determination on the merits, prohibiting the Consumer Product Safety Commission (CPSC) from provisionally classifying perchloroethylene or any other consumer product pursuant to the regulations promulgated by the CPSC on June 13, 1978, 43 Fed. Reg.25658665. In our opinion dated November 1, 1978 this court determined that the CPSC's "Interim Policy and Procedure for Classifying, Evaluating and Regulating Carcinogens in Consumer Products" is a substantive rule subject to the advance notice and public comment requirements of the Administrative Procedure Act (APA), 5 U.S.C. § 553. This court further held that these administrative regulations were not issued in accordance with the APA's prior notice and opportunity for public comment procedures. Dow Chemical v. Consumer Product Safety Comm., 459 F.Supp. 378 (W.D.La.1978).

On November 24, 1978 the CPSC filed a Notice of Appeal to the Fifth Circuit from our order granting the preliminary injunction pursuant to 28 U.S.C. § 1292(a)(1).¹ The CPSC now moves this court to reconsider and vacate its September 28, 1978 order pursuant to Federal Rule of Civil Procedure 60(b)(5) and (6) on the basis of a "Clarification of Commission Intent and Reopening of Comment Procedure" issued by the CPSC on December 20, 1978. Oral argument on this motion was set for January 30, 1979 but the court deferred to the parties' preference of submitting this motion to the court exclusively on written briefs.

In partial response to the CPSC's motion for reconsideration, plaintiffs have challenged this court's jurisdiction to entertain the motion on the grounds that the invoked provisions of Federal Rule of Civil Procedure 60(b) do not apply to the non-final order encountered here. This argument is convincing since Federal Rule of Civil Procedure 60(b), as amended in 1948, applies only to a "final judgment, order or proceeding." See generally II C. Wright & A. Miller, Federal Practice and Procedure § 2852 at 145 (1973); 7 Moore's Federal Practice ¶ 60.20 at 242 (1978). Thus, the fact that a district court could grant a properly filed Rule 60(b) motion after an appeal has been filed See generally Lairsey v. Advance Abrasives Co., 542 F.2d 928, 932 (5th Cir. 1976); II C. Wright & A. Miller, Federal Practice and Procedure § 2873 at 265 (1973); 9 Moore's Federal Practice ¶ 203.11 at 736 n.12 (1978); Note, Disposition of Federal Rule 60(b) Motions During Appeal, 65 Yale L.J. 708 (1956) is simply irrelevant to this case as is the fact that defendant has complied with the procedures endorsed by the Fifth Circuit in Rule 60(b) cases.²

The defendant in filing this motion for reconsideration is actually relying on the inherent power of the rendering district court to afford such relief from interlocutory judgments (here a preliminary injunction) as justice requires. Neither party, however, even mentions the relevant controlling Federal Rule of Civil Procedure, Rule 62(c). Rule 62(c) authorizes the trial court to suspend, modify, restore, or grant an injunction during the pendency of an appeal in injunctive cases.³

There is only one reported case that this court can locate involving the highly unusual situation where an appeal from a preliminary injunction is lodged before a motion for reconsideration is filed with the trial court. The Second Circuit in Ideal Toy Corporation v. Sayco Doll Corp., 302 F.2d 623, 625 (2d Cir. 1962), held that the power of the trial court under Rule 62(c) is only to preserve the status of the case as it sits before the court of appeals and leave of the appellate court is required before the district court, during the pendency of an appeal, can modify an injunction:

This rule Rule 62(c) is described as "merely expressive of a power inherent in the court to preserve the status quo where, in its sound discretion, the court deems the circumstances to justify."

Of course, absent an appeal, a district court has complete power over its interlocutory orders . . .

Once the appeal is taken, however, jurisdiction passes to the appellate court. Thereafter the appellant is not unusually entitled as of right to present new evidence or argument to the trial court, which in the exercise of a sound discretion will exercise jurisdiction only to preserve the status quo as of the time of appeal. Appellant's proper procedure is then to request leave of the court of appeal to proceed in the lower court . . But absent permission of the appellate court to reopen, sound judicial administration demands that unless the judge is satisfied that his order was erroneous he shall use his power under Rule 62(c) only to preserve the status of the case as it sits before the court of appeals.

(Citations omitted). This jurisdictional issue, as far as we know, has never been addressed by the Fifth Circuit. We, however, find the reasoning of the forceful dissent of Judge Clark in Ideal Toy Corp. v. Sayco Doll Corp., supra, 302 F.2d at 628, to be more compelling:

The purpose and sole function of a preliminary injunction is to preserve the status quo pending litigation. Of course such an order in actual effect substantially alters the prior relations of the parties, so that the "status quo" that is actually preserved is one grounded on the court's estimation of the respective legal rights of the parties. The injunction preserves what the court believes to be the lawful situation. Thus if for any reason the court were to change its estimation of the validity of plaintiff's case, its estimation of the lawful status quo would also change. In such a situation, dissolving the preliminary injunction would be the proper way of maintaining the correct state of affairs. . . .

I see, therefore, no basis for the rule now laid down that parties must seek leave of the Court of Appeals before raising questions of this nature with the district court. No rule commands such a practice, and no court has ever imposed such a limitation on the salutory functioning of Rule 62(c).

(Citations omitted). In our view, the arguments in favor of requiring appellate leave are unpersuasive. Can't a district court recognize non-meritorious Rule 62(c) motions? Isn't the trial court in a better position to pass upon the issues presented in a Rule 62(c) motion considering its familiarity with the case and its reasons for granting the injunction?

The Fifth Circuit does not require appellate leave when a Rule 60(b) motion has been filed after an appeal has been noticed even in pre-mandate cases. Lairsey v. Advance Abrasives Co., supra, 542 F.2d at 732; Ferrell v. Trailmobile, Inc., 223 F.2d 697 (5th Cir. 1955). Additionally, we find the recent United States Supreme Court opinion in Standard Oil Company v. United States, 429 U.S. 17, 97 S.Ct. 31, 50 L.Ed.2d 21 (1976), to be persuasive authority supporting our jurisdiction to consider this motion. There the high court first recognized the split of authority in the circuit courts and then held that a district court may entertain a Rule 60(b) motion without leave of the appellate court in post mandate cases. The Court in making its ruling specifically cited with approval a dissent by Judge Clark criticizing the appellate leave requirement in this analogous situation:

The appellate-leave requirement adds to the delay and expense of litigation and also burdens the increasingly scarce time of the federal appellate courts. We see no reason to continue the existence of this "unnecessary and undesirable clog on the proceedings." S. C. Johnson & Son v. Johnson, 175 F.2d 176, 184 (CA 2 1949) (Clark, J., dissenting).

Id. at 19, 97 S.Ct. at 32. Subsequent to this decision at least one circuit court which previously required appellate leave, extended the Standard Oil Company rationale to apply to pre-mandate cases under limited circumstances. Williams v. McKenzie, 576 F.2d 566, 570 (4th Cir. 1978). We therefore hold that this court has jurisdiction under Federal Rule of Civil Procedure 62(c) to entertain defendant's motion to dissolve our injunction despite the fact that the defendant has not sought leave to proceed in the district court from the Fifth Circuit.

However, our determination that we have jurisdiction to consider CPSC's motion for reconsideration is a Pyrrhic victory for the Commission, since on the merits the clarification proffered by the Commission does not in our opinion justify a reversal of our previous decision.

According to the Commission's brief filed herein, in light of the court's November 1 opinion the CPSC reexamined the "interim policy and procedure" and concluded that certain provisions should be clarified. Accordingly, defendant issued a "Clarification of Commission Intent and Reopening of Comment Procedure" on December...