Kaiser Aluminum and Chemical Corp. v. US Consumer Product Safety Com'n, Civ. A. No. 76-44.

• Decision Date: 27 May 1976
• Docket Number: Civ. A. No. 76-44.
• Citation: 414 F. Supp. 1047
• 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

414 F. Supp. 1047

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.

May 27, 1976.

COPYRIGHT MATERIAL OMITTED

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

W. Laird Stabler, Jr., 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.

OPINION

STAPLETON, District Judge:

On October 27, 1972, the Consumer Product Safety Commission ("CPSC" or "the Commission") was launched pursuant to the Consumer Product Safety Act ("CPSA" or "the Act"). The CPSC was given regulatory authority over "consumer products" as defined in the Act.¹ That regulatory authority included the power to "collect, investigate, analyze, and disseminate injury data, and information" regarding hazards associated with consumer products.² It also included the power to develop safety standards respecting the products under its jurisdiction,³ and to promulgate these standards by rule where "reasonably necessary to eliminate or reduce an unreasonable risk of injury associated with such product."⁴ In addition, the Commission's authority included the power, after conducting an adjudicatory-type hearing, to declare appropriate products to be "substantial product hazards" with certain potentially dire consequences to the products in question and their manufacturers and sellers.⁵

About a year after it came into existence, the Commission made an official determination that it had jurisdiction "to deal with those hazards to consumers which may result from the use of aluminum wiring in homes."⁶ Soon after that decision the Commission contracted with the National Bureau of Standards for the assistance of its Technical Analysis Division ("TAD") in evaluating the safety of aluminum wiring.⁷ Then, in the Spring of 1974, the Commission held public hearings in Washington, D. C., and Los Angeles, California, on the subject of "fire hazards associated with electrical wiring systems utilizing aluminum conductors".⁸

July of 1975 found the Commission deciding to make a public statement about what it had come to call the "aluminum wiring problem". In an issue of N.E.I.S.S. News,⁹ an official publication of the Commission, it was stated that:

Electrical failures in homes wired with aluminum have become a matter of concern for the U.S. Consumer Product Safety Commission. The Commission has received almost 500 reports of aluminum wiring incidents involving electrical malfunctions that have occurred in single-family dwellings between 1967 and 1975. Most of the reported aluminum wiring electrical failures resulted in damage to the electrical component or to the structure rather than resulting in injury.

. . . . .

Data on aluminum wiring hazards were gathered primarily through CPSC area offices by investigators who followed up on leads from outside sources. The major sources of electrical failure reports involving aluminum wiring have come from individual consumers, home owner and tenant associations, fire marshals and electrical inspectors, and the National Fire Protection Association. Many complaints involving aluminum wiring were received by the Commission's hot line from the New York area after an article on aluminum wiring appeared in a local newspaper.

The reports received by the Commission recorded damage ranging from the failure of an electrical component to fires resulting in 12 deaths and over a quarter of a million dollars in property damage. . . .¹⁰

It next developed that, on August 7, 1975, the Commission voted unanimously to commence a safety standard development proceeding respecting "aluminum wire in sizes AWG No. 10 and smaller and devices intended for use with it in branch circuits. . . ."¹¹ and, by a split vote, to prepare for the commencement of a "substantial product hazard" proceeding respecting "`old technology' aluminum wire<sup>12</sup> in sizes AWG No. 10 and smaller and wiring devices intended for use with, or that could reasonably have been expected to be used with, `old technology' wire in new installations."¹³ These actions were followed in September, 1975, by the publication of a document called a "Technical Fact Sheet", which stated in part:

There is a potential fire hazard with aluminum which can develop in the following steps:

—an oxide film which does not conduct electricity forms naturally on aluminum.

—unless electrical connectors adequately maintain current flow through breaks in the oxide film, electrical resistance can build up and cause sustained overheating.

—the overheating can lead to rapid destruction of insulating material which can cause a fire.

The U.S. Consumer Product Safety Commission has collected data on approximately 500 incidents involving aluminum wiring that occurred in single family dwellings, mobile homes, and multi-family dwellings between 1967 and 1975. The data includes some reports of fires with extensive structural damage to the home. Twelve deaths were reported. The Commission has conducted research and testing through the National Bureau of Standards concerning the aluminum wire problem. . . .¹⁴

On November 4, 1975, the Commission issued the required public notice of the authorized safety standard development proceeding, in which notice the following statements were made:

Prior to August 1974, the Commission had received 165 reports of electrical failures involving aluminum wire. . . .

On August 29, 1974, an article discussing the hazards of aluminum wire was published in NEWSDAY, a Long Island, N.Y., newspaper. The article suggested that consumers report electrical problems to the Consumer Product Safety Commission's "hotline". Between August 29 and September 17, the Commission received 404 phone calls from the New York area relating to aluminum wire. 179 calls were from homeowners who had observed danger signals or had electrical malfunctions involving aluminum wire. . . .

Hazardous conditions such as burned wire insulation, burned receptacles, fires in receptacles or wall switches, odor of burning wires and smoldering in walls, and electric arcing of switches and receptacles were reported by 96 homeowners. Another 30 homeowners reported symptoms of hazardous conditions such as overheated receptacles and switches, scorched walls, and melted receptacles and wire insulation. 53 callers reported flickering lights or inoperative switches and outlets. The Commission's staff made follow-up investigations of HOTLINE calls from Medford, N.Y., and confirmed the validity of several reported incidents.

* * * * * *

The National Bureau of Standards (NBS) has performed laboratory studies for the Commission to determine what potential mechanisms of failure exist with aluminum wire and various connections. NBS reported that electrical failures and overheating can be reproduced with certain types of connections to aluminum wire.

The Commission, on the basis of the public hearing record, hazard analysis reports, hotline data and the NBS and other studies preliminarily determines that aluminum wire systems as defined in section C(1) of this notice present an unreasonable risk of injury.¹⁵

In conjunction with this notice of proceeding, the CPSC issued a written press release, stating in part:

The Commission has preliminarily determined that hazards associated with aluminum wire systems present an unreasonable risk of injury or death on the basis of testimony received at two public hearings held in Washington, D.C., and in Los Angeles in March and April 1974, research at the National Bureau of Standards, and hundreds of hotline calls and letters received from consumers detailing problems with aluminum wire systems. The Commission has collected reports of over 165 aluminum wiring failures and numerous aluminum wiring related fires.

Between August 29 and September 17, 1974, the Commission's hotline received 404 phone calls from the New York area in response to a newspaper article discussing the hazards of aluminum wire. Of those calls, 179 homeowners reported hazardous conditions such as burned wire insulation, burned receptacles, fires in wall switches, the odor of burning wires, overheated switches, scorched walls, and melted wire insulation.¹⁶

Sections 6(b)(1) and (2) of the CPSA, 15 U.S.C. § 2055(b)(1), (b)(2) provide, in part, as follows:

(b)(1) Except as provided by paragraph (2) of this subsection, not less than 30 days prior to its public disclosure of any information obtained under this chapter, or to be disclosed to the public in connection therewith (unless the Commission finds out that the public health and safety requires a lesser period of notice), the Commission shall, to the extent practicable, notify, and provide a summary of the information to, each manufacturer or private labeler of any consumer product to which such information pertains, if the manner in which such consumer product is to be designated or described in such information will permit the public to ascertain readily the identity of such manufacturer or private labeler, and shall provide such manufacturer or private labeler with a reasonable opportunity to submit comments to the Commission in regard to such information. The Commission shall take reasonable steps to assure, prior to its public disclosure thereof, that information from which the identity of such manufacturer or private labeler may be readily ascertained is accurate, and that such disclosure is fair in the circumstances and

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