Dow Chemical v. Consumer Product Safety Com'n

• Decision Date: 01 November 1978
• Docket Number: No. 781166.,781166.
• Citation: 459 F. Supp. 378
• Parties: DOW CHEMICAL, USA, An operating unit of the Dow Chemical Co. Diamond Shamrock Corp., Ethyl Corporation, PPG Industries, Inc., Stauffer Chemical Company, Vulcan Materials Company, v. CONSUMER PRODUCT SAFETY COMMISSION.
• Court: U.S. District Court — Western District of Louisiana

459 F. Supp. 378

DOW CHEMICAL, USA, An operating unit of the Dow Chemical Co. Diamond Shamrock Corp., Ethyl Corporation, PPG Industries, Inc., Stauffer Chemical Company, Vulcan Materials Company, v.CONSUMER PRODUCT SAFETY COMMISSION.

No. 781166.

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

November 1, 1978.

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

Frances O. Allen, Asst. U. S. Atty., Shreveport, La., John R. Fleder, Consumer Affairs Section, Antitrust Division, U. S. Dept. of Justice, Washington, D.C., Margaret A. Freeston, Acting Gen. Counsel, D. Stephen Lemberg, Asst. Gen. Counsel, David Melnick, Atty., Consumer Product Safety Commission, Washington, D.C., for defendants.

OPINION

VERON, District Judge.

This action challenges certain regulations promulgated on June 13, 1978 by the Consumer Product Safety Commission("CPSC") pursuant to the Consumer Product Safety Act, 15 U.S.C. § 2051 et seq. and the Federal Hazardous Substances Act, 15 U.S.C. § 1261 et seq., because the CPSC failed to follow the notice and comment provisions of the Administrative Procedure Act,5 U.S.C. § 553(b), (c).Published at 43 Fed.Reg. 25658 and proposed to be added as a new Part 1040 to Title 16 of the Code of Federal Regulations, these regulations entitled "Interim Policy and Procedure for Classifying, Evaluating, and Regulating Carcinogens in Consumer Products," relate to the classification, evaluation, and regulation of substances in consumer products that are suspected of causing cancer.In addition to general provisions, these "interim regulations" consist of three types of provisions: (1) internal procedures which describe the steps the CPSC staff will follow in reviewing and analyzing information which it receives concerning possible health risks associated with substances used in consumer products (§§ 1040.12,1040.23, and1040.24;43 Fed.Reg. 25661, 2566364); (2) a description of the types of information and factors that the staff and commission will examine in assigning priorities for the detailed investigation of products containing classified substances (§§ 1040.11,1040.23,1040.31and1040.33;43 Fed.Reg. 25659 and XXXXXXXXXX); and (3) a statement of certain general scientific and regulatory principles which the CPSC will apply in classifying substances.(§§ 1040.21and1040.22;43 Fed.Reg. 2566163).

Plaintiff, Louisiana Chemical Association, is a Louisiana corporation which represents 58 chemical companies throughout the State of Louisiana, including facilities in this district and division, which are adversely affected by the subject interim regulations.The individually named corporate plaintiffs manufacture and sell chemicals including perchloroethylene ("perc"), a chemical widely employed in dry cleaning and other applications.Plaintiff, PPG Industries, manufactures perc at its plant in Lake Charles, Louisiana.Defendant, Consumer Product Safety Commission, is an agency of the federal government and is charged with responsibility for administering the Consumer Product Safety Act, 15 U.S.C. § 2051 et seq. and the Federal Hazardous Substances Act, 15 U.S.C. § 1261 et seq.

Plaintiffs filed their complaint on September 12, 1978 seeking to permanently enjoin and restrain defendant and its agents or employees from enforcing or applying the interim regulations or any provision thereof found to be unlawful to perchloroethylene or any other substance.

Although the plaintiffs have pleaded several jurisdictional grounds,¹the court finds that it has jurisdiction of this matter by virtue of 28 U.S.C. § 1337, which provides:

The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce . . ..

The general purpose of the Consumer Product Safety Act is to protect individuals who use consumer goods and suggests a Congressional intention to regulate commerce.²The regulation of commerce aspect of this legislation was explicitly set forth in 15 U.S.C. § 2051(a)(6):

The Congress finds that . . . regulation of consumer products the distribution or use which affects interstate or foreign commerce is necessary to carry out this chapter.

Thus, it is clear that the Consumer Product Safety Act can be included under the umbrella of § 1337.³Furthermore, section 1337 constitutes an appropriate basis for the review of an administrative decision.Davis v. Romney,490 F.2d 1360(3d Cir.1974).Venue in this district is proper under 28 U.S.C. § 1391(e).⁴

The CPSC has considered at various administrative stages⁵ the classification of perc as a Category A substance under the regulations, i. e. a substance which the Commission finds to possess strong evidence of carcinogenicity based on criteria set forth in the rules (Section 1040.22(a);43 Fed.Reg. 25663.)The Commission had decided to formally vote on the provisional classification of perc as a Category A substance at a meeting on September 14, 1978.

The court entertained plaintiff's motion for a temporary restraining order on September 14, 1978.After deliberate consideration we issued a temporary restraining order prohibiting the CPSC, its employees, agents, or successors from provisionally classifying perc pursuant to the June 13, 1978 promulgations.⁶

Plaintiffs, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure, subsequently moved this court to grant a preliminary injunction barring enforcement of the challenged regulations.Plaintiffs urged that such an injunction be granted because the June 13, 1978 interim regulations comprise rules that were enacted in violation of the Administrative Procedure Act,5 U.S.C. § 553(b), (c).The motion was heard on September 28, 1978 and the court at that time considered the arguments presented there as well as the competent, extensive briefs and exhibits submitted by the parties in arriving at its decision.

The court at oral argument was satisfied that the prerequisites for injunctive relief were met.Cognizant of the impending expiration of our previously granted temporary restraining order, we issued an order that enjoined the defendants, "pending a final determination of the merits of this action or until further order of this court, from provisionally classifying perchloroethylene or any other consumer product pursuant to the regulations promulgated by defendant on June 13, 1978, 43 Fed.Reg. 25658665."

At the September 28 hearing we also heard and denied defendant's motion to dismiss on the grounds that plaintiffs had failed to exhaust their administrative remedies and that they had failed to state a claim upon which relief could be granted.

We are, of course, aware of the ramifications of and interest in our decision reviewing these administrative promulgations regulating suspected cancer-causing products.Through this opinion the court makes good its previous promise to discuss and elucidate more fully its reasons for the denial of the motion to dismiss and the issuance of the preliminary injunction.We will first address the motion to dismiss, for if the court had found this motion to be meritorious, the need for the court to reach the question of compliance with the APA would have been eliminated.

I.MOTION TO DISMISS

The CPSC's motion to dismiss closely echoes its view as to the merits of the case.The Commission argues that its June 13, 1978 action does not constitute rule-making subject to the notice and comment provisions of the APA and therefore the plaintiffs have not stated a claim upon which relief can be granted.The court's response to that argument appears in Part II-A of this opinion.

The Commission, additionally and quite similarly, contends that these interim regulations constitute a general statement of policy more analogous to a "press release" than final agency action.The defendant further argues that judicial review is inappropriate at this time because plaintiffs have failed to exhaust their administrative remedies in proceedings involving particular consumer products.The agency finally alleges that plaintiffs should seek judicial review in the court of appeals after the Commission acts to ban a consumer product.

A.RIPENESS

5 U.S.C. § 702 provides that "a person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof."Defendant's position is that the interim regulations do not constitute a final order within the statutory meaning of 5 U.S.C. § 704.

The CPSC's June 13, 1978 regulations are final agency action subject to review.The law of ripeness is now happily a matter of practical common sense.See, e. g., Mathews v. Eldridge,424 U.S. 319, 326-332, 96 S.Ct. 893, 47 L.Ed.2d 18(1976);United States v. Storer Broadcasting Co.,351 U.S. 192, 76 S.Ct. 763, 100 L.Ed. 1081(1956);Frozen Food Express v. United States,351 U.S. 40, 76 S.Ct. 569, 100 L.Ed. 910(1956);Natural Resources Defense Council, Inc. v U. S. Nuclear Regulatory Comm.,539 F.2d 824, 836-38(2d Cir.1976), vacated as moot,434 U.S. 1030, 98 S.Ct. 759, 54 L.Ed.2d 777(1978).For example, in Columbia Broadcasting System, Inc. v. United States,316 U.S. 407, 418-20, 62 S.Ct. 1194, 86 L.Ed. 1563(1942), the Supreme Court held reviewable a rule of the Federal Communications Commission setting forth certain proscribed contractual arrangements between chain broadcasters and local stations.The Commission exercised its rule-making power by adopting regulations whose operation was not subject to future administrative...