O'Keeffe's, Inc. v. U.S. Consumer Product Safety Com'n

• Decision Date: 13 August 1996
• Docket Number: No. 94-70580,94-70580
• Citation: 92 F.3d 940
• Parties: 96 Cal. Daily Op. Serv. 6034, 96 Daily Journal D.A.R. 9873 O'KEEFFE'S, INC., Petitioner, v. U.S. CONSUMER PRODUCT SAFETY COMMISSION, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 940

92 F.3d 940

96 Cal. Daily Op. Serv. 6034, 96 Daily Journal

D.A.R. 9873

O'KEEFFE'S, INC., Petitioner, v. U.S. CONSUMER PRODUCT SAFETY COMMISSION, Respondent.

No. 94-70580.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 9, 1996.

Submission Vacated Jan. 16, 1996.

Resubmitted Feb. 9, 1996.

Decided Aug. 13, 1996.

Mark I. Schickman, Fox and Grove, Chartered, San Francisco, California; Kathy D. Steel, O'Keeffe's, Inc., San Francisco, California, for petitioner.

David A. Levitt, Office of Consumer Litigation, United States Department of Justice, Washington, DC, for respondent.

On Petition for Review of a Decision of the U.S. Consumer Product Safety Commission.

Before SCHROEDER and TROTT, Circuit Judges, and REED, ^* District Judge.

Opinion by Judge SCHROEDER; Dissent by Judge REED.

SCHROEDER, Circuit Judge:

I. INTRODUCTION

This is a petition for review of a decision of the United States Consumer Product Safety Commission ("the Commission"), considering a request by the petitioner, O'Keeffe's, Inc. ("O'Keeffe's"). The Commission denied O'Keeffe's petition to amend the Commission's regulations setting impact standards for glass and other glazing materials used in doors, including storm doors, sliding glass doors, and shower and bathtub enclosures. O'Keeffe's is engaged in the business of manufacturing glazing material that is subject to the impact standards. It petitioned the Commission: 1) to expand the regulations to cover new transparent ceramic materials, made by a competitor, not presently covered by the regulations; and 2) to eliminate the exemption for wired glass in fire doors.

II. BACKGROUND

The Safety Standard for Architectural Glazing Materials was adopted in 1977 "to reduce or eliminate unreasonable risks of death or serious injury to consumers when glazing material is broken by human contact." 16 C.F.R. § 1201.1(a). The impact standards in the regulations apply to all "glass, including annealed glass, organic coated glass, tempered glass, laminated glass, wired glass; or combinations thereof" used for certain architectural purposes. 16 C.F.R. § 1201.2(a)(11). Since 1977, transparent ceramic materials, which have a crystalline structure and which do not meet the definition of glass, have been developed and manufactured. These new transparent ceramic materials are being used for similar architectural purposes but are not subject to the same safety standards as glass-based glazing materials.

In 1977, fire codes required the use of wired glass in fire doors, yet no wired glass existing then could meet the impact standards. Therefore, the regulations exempt "[w]ired glass used in doors or other assemblies to retard the passage of fire" from the impact standards imposed on other glazing materials. 16 C.F.R. § 1201.1(c)(1). Since 1977, technological advances have allowed for the production of glazing materials suitable for fire doors which would survive the impact standards, although wired glass continues to be exempt from the impact standards.

On March 6, 1992, O'Keeffe's submitted a petition to the Commission to amend the Safety Standard for Architectural Glazing Materials, 16 C.F.R. § 1201. O'Keeffe's requested that the Commission (1) amend 16 C.F.R. § 1201.2(a)(10) & (11) in order to subject glass substitutes such as transparent ceramic materials to the safety standards; and (2) revoke 16 C.F.R. § 1201.1(c)(1), which exempts wired glass used in fire doors from the safety standards. The voluminous record before us contains documentation of meetings, staff research, and evidence submitted by O'Keeffe's and others that was considered by the Commission.

On July 22, 1994, the Commission denied O'Keeffe's petition, concluding that: (1) there was no information available to suggest that either the exclusion of transparent ceramic materials or the wired glass exemption presents an unreasonable risk of injury; (2) such information is unlikely to be developed; and (3) the anticipated benefits of the proposed amendments would not bear a reasonable relationship to their cost. On September 20, 1994, O'Keeffe's timely filed a petition for review with this court.

The Administrative Procedure Act requires that the agency give interested persons the right to petition for issuance, amendment, or repeal of a rule, 5 U.S.C. § 553(e); and the Commission is required to act on any such petition, 15 U.S.C. § 2058(i). This court has jurisdiction to review final actions of the agency under 15 U.S.C. § 2060.

III. STANDARD OF REVIEW

The Administrative Procedure Act states that a final agency action shall be set aside if it is arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2)(A). A decision is arbitrary and capricious if the agency "has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983); accord Hawaii Helicopter Operators Ass'n v. Federal Aviation Admin., 51 F.3d 212, 214-15 (9th Cir.1995). Review under the arbitrary and capricious standard is narrow, and the reviewing court may not substitute its judgment for that of the agency. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 376, 109 S.Ct. 1851, 1860-61, 104 L.Ed.2d 377 (1989).

IV. DISCUSSION

A. Transparent Ceramic Materials

O'Keeffe's argues that the Commission failed to consider relevant factors necessary to determine whether ceramics pose an unreasonable risk of injury. O'Keeffe's first contends that the Commission failed to deal adequately with the risk of injury associated with transparent ceramic materials. Underlying O'Keeffe's position is the assumption that, because transparent ceramic materials and the glazing material manufactured by O'Keeffe's are being used for similar architectural purposes, and because the glazing material O'Keeffe's manufactures is regulated, the same level of risk of injury must be associated with transparent ceramic materials as the Commission associated with glass materials in 1977.

This assumption is not correct. To establish an unreasonable risk of injury, the Commission is statutorily required to look specifically at transparent ceramics to determine the nature and the extent of the risk of injury associated with transparent ceramics, the need for transparent ceramics, and the probable effect of the amendment on the utility, cost, and availability of transparent ceramics. See 15 U.S.C. § 2058(f)(1). Additionally, the Commission must make and support findings that the amendment is "reasonably necessary" to eliminate or reduce an unreasonable risk of injury associated with the product; that the expected benefits of the amendment bear a reasonable relationship to its costs; and that the amendment imposes the "least burdensome requirement" that prevents or adequately reduces the risk of injury under consideration. 15 U.S.C. § 2059(f)(3). Therefore, the Commission is not statutorily required to compare the breakage characteristics of regulated glazing material with the breakage characteristics of transparent ceramic materials. The Commission's acknowledgment that, if transparent ceramics had existed in 1977, they may have been subject to the regulations is not dispositive. Although similar breakage characteristics may indicate a similar risk of injury, the Commission is required to look at the risk of injury associated with the unregulated product at the current time and in light of data developed since 1977 when the regulations were promulgated. Furthermore, the Commission pointed out that, even if transparent ceramics had existed in 1977, the standard would not necessarily have been written to encompass them. The standard allows for the use of noncomplying glass in several products. 16 C.F.R. § 1201.1(c)(2)-(4).

Upon consideration of the relevant factors, the Commission determined that the evidence does not support a conclusion that transparent ceramic materials pose an unreasonable risk of injury. The Commission considered the information submitted by O'Keeffe's about one incident involving transparent ceramics. That incident involved an item of transparent ceramic in a school door which was broken by a student's elbow. However, O'Keeffe's did not specify whether an injury resulted, and if so, the severity of the injury.

The Commission also recognized that the National Electronic Injury Surveillance System ("NEISS") data does not distinguish between injuries involving transparent ceramics and those involving glass. O'Keeffe's argues that, consequently, the Commission cannot rely on the NEISS data to determine whether an unreasonable risk of injury exists and that the Commission must develop more specific data and modify the NEISS database to distinguish between causes of the injuries. However, O'Keeffe's is incorrect in its assertion. The Commission is not statutorily required to conduct an exhaustive study or to revise its data-gathering systems in response to a request for rulemaking. See Consumer Fed'n of America v. Consumer Prod. Safety Comm'n, 883 F.2d 1073, 1078 (D.C.Cir.1989) (holding that in determining whether to commence rulemaking under the Federal Hazardous Substances Act, 15 U.S.C. § 1261, the Commission is not obligated to conduct special studies).

O'Keeffe's also suggests that the risk of injury is demonstrated by the fact that local agencies and other regulatory bodies have already imposed some standards upon transparent ceramic materials because of risk of injury on impact. The Commission, however, fully took this into account and concluded that such action by other bodies made regulatory action by the Commission less, rather than more,...