Tex. Ass'n of Mfrs. v. U.S. Consumer Prod. Safety Comm'n

• Decision Date: 01 March 2021
• Docket Number: No. 17-60836,17-60836
• Citation: 989 F.3d 368
• Parties: TEXAS ASSOCIATION OF MANUFACTURERS ; Texas Chemical Council ; Texas Association of Business; National Association Of Manufacturers; American Chemistry Council, Petitioners v. UNITED STATES CONSUMER PRODUCT SAFETY COMMISSION, Respondent
• Court: U.S. Court of Appeals — Fifth Circuit

989 F.3d 368

TEXAS ASSOCIATION OF MANUFACTURERS ; Texas Chemical Council ; Texas Association of Business; National Association Of Manufacturers; American Chemistry Council, Petitioners

v.UNITED STATES CONSUMER PRODUCT SAFETY COMMISSION, Respondent

No. 17-60836

United States Court of Appeals, Fifth Circuit.

FILED March 1, 2021

Aaron Michael Streett, Travis Lenti Gray, Esq., Baker Botts, Jonathan Mark Little, L.L.P., Houston, TX, for Pertitioner.

Scott R. McIntosh, Alexander K. Haas, U.S. Department of Justice Civil Division, Appellate Section, Washington, DC, for Respondent.

Jared Knicley, Aaron Strider Colangelo, Natural Resources Defense Council, Washington, DC, Allison M. Zieve, Public Citizen Litigation Group, Washington, DC, for Intervenors.

Moneen Susan Nasmith, Earthjustice, New York, NY, for Amicus Curiae.

Before OWEN, Chief Judge, and SOUTHWICK and HIGGINSON, Circuit Judges.

PRISCILLA R. OWEN, Chief Judge:

Pursuant to the Consumer Product Safety Improvement Act (CPSIA), the Consumer Product Safety Commission was tasked with studying the effects of phthalates in children's toys and child care articles. The Commission issued a final rule prohibiting the manufacture and sale of any children's toy or child care article that contains concentrations of more than 0.1 percent of any one of five phthalates. Petitioners seek direct review in this court, arguing that the Commission failed to give an adequate opportunity for comment, failed to apply the proper procedural standards, redefined the substantive standards, and arbitrarily and capriciously applied the scientific data. The Commission moves to dismiss or transfer the case for lack of jurisdiction. We hold that we have jurisdiction to review the rule and that the Commission procedurally erred in promulgating the final rule. In other respects, we affirm, and we remand to the Commission.

I

In 1972, Congress enacted the Consumer Product Safety Act (CPSA)¹ in order to "protect the public against unreasonable risks of injury associated with consumer products."² The CPSA established the Consumer Product Safety Commission,³ which "promulgate[s] consumer product safety standards"⁴ and declares when a product is a "banned hazardous product."⁵

In 2008, Congress enacted the Consumer Product Safety Improvement Act (CPSIA),⁶ which, among other things, directed the Commission to promulgate rules banning or regulating the use of phthalates in children's toys and child care articles.⁷ Phthalates are "a class of organic compounds used primarily" to soften and add flexibility to plastic.⁸ Some phthalates have antiandrogenic effects—that is, they affect the male reproductive system and can suppress the production of testosterone

and normal development.⁹

Congress addressed phthalates in three relevant ways. First, the CPSIA made it unlawful to "manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children's toy or child care article that contains concentrations of more than 0.1 percent" of three phthalates: di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), and benzyl butyl phthalate (BBP).¹⁰ Second, the CPSIA included an interim prohibition on "any children's toy that can be placed in a child's mouth or child care article that contains concentrations of more than 0.1 percent" of three other phthalates: diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or di-n-octyl phthalate (DnOP).¹¹ Third, the CPSIA directed the Commission to promulgate a final rule regarding phthalates.¹² By its terms, the interim prohibition remained in place until the Commission promulgated a final rule.¹³

To aid the rulemaking process, Congress directed the Commission to appoint a Chronic Hazard Advisory Panel (CHAP) to "study the effects on children's health of all phthalates and phthalate alternatives as used in children's toys and child care articles."¹⁴ The CHAP was charged with examining "the full range of phthalates that are used in products for children"¹⁵ and then preparing a report for the Commission with its findings and recommendations.¹⁶ After receiving the CHAP's report, the Commission was directed to:

(A) determine, based on such report, whether to continue in effect [the interim prohibition], in order to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety; and

(B) evaluate the findings and recommendations of the [CHAP] and declare any children's product containing any phthalates to be a banned hazardous product under section 8 of the [CPSA], as the Commission determines necessary to protect the health of children.¹⁷

Pursuant to the CPSIA, the Commission appointed a CHAP,¹⁸ which assessed the risks of phthalates in combination and in isolation.¹⁹ For its cumulative risk assessment, the CHAP employed a hazard index (HI).²⁰ To determine the HI, the CHAP first calculated the hazard quotient (HQ) for each phthalate by dividing the actual exposure to a particular phthalate by an estimate of the level of exposure that would generally be acceptable.²¹ An HQ greater than one might cause "concern for antiandrogenic effects in the exposed population due to the effect of an individual phthalate."²² Then, the CHAP combined the HQs of the individual phthalates to determine the cumulative HI.²³ The effects of active phthalates are additive in that doses of different phthalates can combine to produce effects.²⁴ Accordingly, if an individual's cumulative HI is greater than one, "there may be concern for antiandrogenic effects."²⁵

To determine the level of exposure that is acceptable or "negligible," the CHAP relied on three case studies examining the effects of phthalates in rodents.²⁶ Next, the CHAP divided the no-effect level in rodents by ten to extrapolate from rodents to humans.²⁷ Due to the differences in how members of the same species may react to a chemical, the CHAP divided that number by ten again.²⁸ As a result, the CHAP used a no-effect level for humans that was 100 times lower than that for rodents.

The CHAP used data from three surveys to determine how much exposure humans actually have to phthalates, two involving human-biomonitoring (HBM) and one involving exposure scenario analysis.²⁹ First, the CHAP used the Department of Heath and Human Services’ National Health and Nutrition Examination Survey (NHANES).³⁰ The NHANES is an HBM survey that measures phthalates and other chemicals in human urine and blood based on spot sampling of pregnant women.³¹ For the second study, the CHAP used the Study for Future Families (SFF), an HBM study of mother-child pairs before and after birth by the National Institutes for Health and the Environmental Protection Agency.³² Finally, the CHAP relied on a scenario-based method to provide information on sources of exposure.³³

The Commission responded to general comments about its use of HBM data collected via spot sampling, concluding that it could extrapolate average daily exposure based on the spot sampling data.³⁴ More specifically, the Commission maintained that the spot samples were collected at different sites, at different times of day, and on different days of the week, and participants were selected randomly, and therefore, the data is representative of "estimated population per capita phthalate exposure across the 2-year NHANES cycle."³⁵ Spot tests cannot differentiate between sources of phthalates, and most studies conclude that "food, rather than children's toys or child care articles, provides the primary source of exposure."³⁶ Moreover, phthalates are metabolized quickly and the amount of phthalates detected "depends to a large extent on ... how long it has been since the last meal."³⁷ Applying the NHANES and SFF data, the CHAP determined that "up to 10 percent of pregnant women and up to 5 percent of infants" had an HI greater than one.³⁸

The CHAP recommended that the Commission lift the interim prohibition on two phthalates—DIDP and DnOP.³⁹ Those phthalates did not contribute to the HI.⁴⁰ However, the CHAP recommended that the Commission (1) issue a permanent prohibition for DINP at levels greater than 0.1 percent in all children's toys and child care articles, not just toys that can be placed in a child's mouth;⁴¹ and (2) issue a permanent prohibition on children's toys and child care articles containing diisobutyl phthalate (DIBP), di-n-pentyl phthalate (DPENP), di-n-hexyl phthalate (DHEXP), and dicyclohexyl phthalate (DCHP) at levels greater than 0.1 percent.⁴² DIBP, DPENP, DHEXP, and DCHP were not prohibited by the CPSIA, but the CHAP concluded that "they contribute to the cumulative risk" and should be prohibited permanently.⁴³

The Commission issued a proposed rule (Proposed Rule) that implemented the CHAP's recommendations.⁴⁴ In explaining its rationale for the Proposed Rule, the Commission agreed with the CHAP that "the acceptable risk is exceeded when the HI is greater than one."⁴⁵ Accordingly, the Commission decided that an HI less than one "is necessary ‘to ensure a reasonable certainty of no harm to children, pregnant women, or other susceptible individuals with an adequate margin of safety.’ "⁴⁶ The Commission found it particularly pertinent that the HI was greater than one for ten percent of pregnant women, and the HI at the 95th percentile was five.⁴⁷

After publication of the Proposed Rule, the NHANES released updated data sets.⁴⁸ Using the new data, the Commission had its staff "replicate the CHAP's methodology."⁴⁹ However, unlike the CHAP, which studied pregnant women, the staff "used women of reproductive age" (WORA) due to a lack of data on pregnant women.⁵⁰ The staff found that the risk decreased with the updated data.⁵¹ The HI at the 95th percentile was now less than one.⁵² The staff estimated that, using the updated data, between 98.8 and 99.6 percent of WORA had HIs less than or equal to one.⁵³ The staff was "unable to estimate the percentage of WORA with an HI greater than one,"...