The United States District Court for the District of Maryland recently decided Company Doe v. Inez Tenenbaum et al., which marks the first challenge to date to the Consumer Product Safety Improvement Act of 2008 (“CPSIA”). The decision on July 31, 2012, but made available on October 22, addresses the U.S. Consumer Product Safety Commission’s (“CPSC”) agency database.
The plaintiff in Tenenbaum was an unnamed company, who claimed the CPSC wrongfully decided to publish a complaint report about its product. The plaintiff contended that the report was materially inaccurate and therefore misleading. Judge Alexander Williams, Jr. held that the CPSC’s decision to publish the report was arbitrary and capricious, as well as an abuse of discretion under the Administrative Procedure Act. The District Court further held that the agency decision constituted a final agency action meriting judicial review.
The crux of the District Court’s opinion centered around an analysis of the CPSIA’S statutory language establishing a consumer product safety database. Specifically, the database must include “reports of harm relating to the use of consumer products.”
The District Court decided that the proper interpretation of “relating to” necessitated a connection between the report of harm and the consumer product. Only then can a report of product harm qualify for publication on the CPSC’s database. The District Court found that the initial report about the unnamed company’s product failed to identify the product as the source of harm.
The District Court then held that the CPSC’s decision to publish the report in its database was both arbitrary and capricious and an abuse of discretion. Without a link between the product and the harm, the CPSC’s “decision to publish the report bears no sensible relation to the purpose the CPSIA aims to advance: to enhance the Commission’s capacity to disseminate information to consumers regarding unsafe products.” As support for its holding, the Court relied on the CPSC’s complete failure to address the inconsistency between its conduct in the immediate case and its prior approvals of material inaccuracy claims. The CPSC based its prior approvals on the fact that “the evidence in the report of harm did not show that the product was the source of the problem.”
In its defense, the CPSC argued that the database website warned that the accuracy of the product complaints was not guaranteed. The District Court held that the disclaimer was merely boilerplate and would not interest a typical customer.
In rejecting the CPSC’s argument, the Court also held that the decision to publish the report was a final agency action subject to judicial review.
The impact of Tenenbaum is not lost on the legal world, particularly consumer product manufacturers. For such manufacturers, the holding of Tenenbaum means protection against inaccurate consumer complaints. First, the decision holds the CPSC accountable for the information it publishes in its agency database. It provides manufacturing companies with more leverage should they wish to generate a database complaint. Secondly, manufacturers now have the authority to assert that the publication of a product report or complaint constitutes a final agency decision meriting judicial review. Lastly, the Court’s holding concerning boilerplate disclaimers provides a defense to manufacturers looking to lodge a database complaint. Tenenbaum is a case worth watching as it makes its way to the Fourth Circuit on appeal.
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