Two Cheers for the Tenth Circuit’s Temporary Stay of the CPSC’s New Magnet Safety Standard

zen magnetsOn April 1—no joke—the Consumer Product Safety Commission’s troubling new standard for magnet sets was slated to go into effect.  However, thanks to the efforts of the sole remaining distributor of Small Rare Earth Magnets (SREMs) in the United States, Zen Magnets LLC, consumer freedom won a last-minute reprieve.

As companies wishing to challenge final rules of federal agencies may typically do, Zen Magnets filed a stay of enforcement directly in the U.S. Court of Appeals covering its home state, Colorado in this case.  In rapid response to Zen Magnets LLC’s motion for a stay, the Tenth Circuit issued a same-day order to temporarily “stay the enforcement and effect of the Safety Standard for Magnet Sets promulgated by respondent Consumer Product Safety Commission on October 3, 2014, which goes into effect on April 1, 2015.”  In addition, the Court ordered CPSC to file a brief in response on or before today (April 14) “to assist the court in its review of the motion.”

Under the Federal Rules of Appellate Procedure, the Court had to consider four factors in issuing the motion to stay: likelihood of success on the merits; threat of irreparable harm; absence of harm to the government; and risk of harm to the public interest.  Just because the Tenth Circuit has issued the stay does not mean that it has decided the motion to stay enforcement will succeed.  Still, if the Court were convinced that the arguments Zen Magnets has presented in opposition to the Magnet Safety Standard were frivolous or had little chance to prevail, it is unlikely the Court would have issued even a temporary stay.  Since the appeals court’s review marks the first time any entity outside the agency’s purview has had an opportunity to check CPSC’s work, it is encouraging to see the Tenth Circuit forcing the agency to explain its unprecedented actions here. Continue reading

Federal Regulators’ Disregard for Sound Science Displayed in Four Agencies’ Actions

4th CircuitHow federal regulators use—and abuse—science in the regulatory process has a profound impact on regulated businesses and consumers who purchase their products and services.  In addition to the financial impact, every time that an agency forces science and the scientific process to serve its ideological or political agendas, rather than be guided by the neutral data, the public becomes less trusting of government pronouncements based on science. Below are some troubling recent examples of regulatory junk science. The first example demonstrates that protections against junk science do exist in the courtroom. The subsequent three examples reflect the lack of similar protections in the rulemaking and adjudication contexts.

Fourth and Sixth Circuits Slap-down EEOC. For the second time in less than a year, a federal appellate court has rebuked the Equal Employment Opportunity Commission (EEOC) for its use of junk science in accusing an employer of discrimination for conducting criminal background checks in its hiring process. EEOC’s litigation crusade against criminal background checks has faltered since its outset, with federal district court judges in Ohio and Maryland separately dismissing Title VII claims in 2013. Last April, just 20 days after hearing oral argument, the U.S. Court of Appeals for the Sixth Circuit affirmed the Ohio trial judge’s decision in EEOC v. Kaplan. The court found the EEOC’s statistical proof of disparate impact—compiled and presented by expert witness Kevin Murphy, an industrial psychologist—unreliable and “based on a homemade methodology” not generally accepted in the scientific community. A WLF Legal Opinion Letter and a WLF Legal Pulse post, both published last spring, offer more detail on the ruling. Continue reading

Will Fourth Circuit Decision to Unseal a CPSC Case Be a Boon to Asbestos Defendants?

4th CircuitThe U.S. Court of Appeals for the Fourth Circuit issued a decision on April 16 in a case called Company Doe v. Public Citizen that signals hope for asbestos defendants who are seeking to combat fraudulent claims in North Carolina. Those claims were brought in connection with a bankruptcy proceeding styled as In re: Garlock Sealing Technologies, LLC et al. (“Garlock”). How could an anonymous CPSC case from Maryland affect a gasket company’s asbestos bankruptcy from North Carolina? In a word: transparency. Both cases involve the ability of third parties to gain access to documents enmeshed in public litigation.

In issuing its ruling in Company Doe, the Fourth Circuit surely had no inkling that its words might cheer long-suffering asbestos defendants. However, that court’s insistence on transparency and public access to the judicial process bodes well for an asbestos case in which similar issues have been percolating. When the district court (and perhaps eventually the Fourth Circuit) hears motions from asbestos defendants and others about divulging sealed documents from the Garlock asbestos bankruptcy docket, the recent decision in Company Doe will surely loom large. There is no guaranty as to where the Fourth Circuit ultimately will come down on the sealing issues in Garlock. But it does appear that a new day is dawning, and—if the Court of Appeals acts consistently with its stated policy favoring public access in Company Doe—it just might prove to be the Day of Reckoning for fraudulent asbestos plaintiffs and their trial lawyer accomplices.

Company Doe Takes Two Steps Forward in District Court

Company Doe v. Public Citizen, No. 12-2209 (“Company Doe”), started when the U.S. Consumer Product Safety Commission received a “report of harm” and sought to post it on its new government-run product safety database website. [Full disclosure: I worked as legal counsel to CPSC Commissioner Anne Northup from 2009 through 2010, but left before this report of harm was received.] The report alleged that a company’s product was related to the death of an infant, but the company strongly objected that the report of harm was not accurate. When the company could not obtain satisfaction through direct negotiations with the Commission, it was forced to file suit against the CPSC in federal district court in Maryland (where the CPSC is located) to enjoin the Commission from posting the erroneous report of harm. Continue reading