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TRIS (Chemical Flame Retardant) (2)
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William P. Barr's Office Files
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Barr, William: Files
Folder Title: TRIS (Chemical Flame Retardant)
(2 of 3)
Box: 11
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
Continued from previous fulder
Tab C - CPSC and Justice letters
U.S. CONSUMER PRODUCT SAFETY COMMISSION
WASHINGTON, D.C. 20207
MAY 05 1981
Honorable Max Baucus
Ranking Minority
Subcommittee on Separation of Powers
Committee on the Judiciary
U.S. Senate
Washington, D.C., 20510
Dear Senator Baucus:
This letter is in response to your request for the
comments of the Consumer Product Safety Commission on S.
823, a bill
To provide for the payment of losses incurred as
a result of the ban on the use of the chemical
TRIS in apparel, fabric, yarn, or fiber, and for
other purposes.
For more than five years the Consumer Product Safety
Commission, the industry, consumers, scientists, the Con-
gress, the courts, the press, and even the world community
have been involved with TRIS-treated children's sleepwear.
In these comments we cannot adequately summarize all of the
facts that have developed and the issues that have arisen
during that time. Nevertheless, we will provide some
background information that we hope will be helpful to this
Committee's consideration of S. 823.
Between 1971 and 1976, the children's sleepwear industry
treated some of its sleepwear garments and fabric with a
chemical flame retardant called TRIS (2, 3-dibromopropyl)
phosphate to meet federal flammability performance standards.
Different types of firms within the industry played different
roles in this TRIS treatment. Chemical firms manufactured
the TRIS and sold it to converters and to manufacturers of
fiber, yarn, and fabric. No industry-wide description can
pinpoint the stage of the process at which TRIS was added--
it differed among the various manufacturing chains. One
generalization, however, is worth noting. When the sleep-
wear manufacturers (the cutters and sewers of the pajamas)
Honorable Max Baucus
Page -2-
bought fabric from the mills and other processing firms,
they did not necessarily know whether it was treated with
TRIS. They would have known that it met the federal government's
performance requirements for the flammability of children's
sleepwear. Most retailers similarly would not necessarily
have known what method had been used to assure that the
fabric met the flammability requirements.
A period of growing concern about possible health risks
presented by TRIS was focused in February 1977 when the
National Cancer Institute published preliminary results of
its rat and mouse TRIS feeding studies. These results
showed that TRIS caused cancer in both species. In that
same month, the Environmental Defense Fund petitioned the
Commission to ban TRIS-treated children's sleepwear. After
carefully evaluating the NCI cancer data and developing its
own scientific data on how much TRIS children could ingest
or absorb, the Commission concluded that TRIS-treated children's
sleepwear put children at risk of developing cancer.
Based on early scientific risk data, the industry had
voluntarily stopped treating children's sleepwear with TRIS
sometime during 1976. Therefore, the Commission's enforce-
ment actions against the sleepwear and fabric, beginning in
1977, primarily affected the goods that were on the shelves
of retail stores and were otherwise "caught" in the channels
of distribution. Since the CPSC was stopping the continued
retail sale of the TRIS goods, the industry as a whole was
forced to absorb economic losses from the goods that were
already manufactured but were now illegal to sell. The
fabric mills, the sleepwear manufacturers, other segments of
the industry, various trade associations, the federal govern-
ment, and a consumer group have struggled in the courts and
before congressional committees to resolve the issue of how
the losses should and would be allocated.
The Commission's enforcement activities continue to
this day because some of the goods caught in the pipeline in
1977 remain in storage and could appear in retail stores.
In June 1978 the Commission issued mandatory orders to all
Honorable Max Baucus
Page -3-
the firms it believed were holding TRIS goods. The orders
required firms to report the amount of TRIS-treated garments
and fabric they possessed and to notify the Commission prior
to any future disposition of their inventory. All the firms
responded to the order, and 76 reported inventories that
totalled approximately nine million TRIS-treated garments
and almost one million yards of TRIS-treated fabric.
Since the fall of 1979, the Commission staff has monitored
the storage of these TRIS inventories and the destruction of
more than 40 percent of the nine million garments. About
3.9 million garments and thousands of yards of fabric have
been cut into industrial wiping rags or have otherwise been
destroyed. An additional 1.4 million garments and 387,000
yards of TRIS-treated fabric are waiting to be cut into
industrial rags. Nevertheless, almost five million garments
and almost all of the yard goods identified in 1978 remain
in storage.
Unfortunately, the CPSC staff has found that a number
of garments have recently been offered for sale to consumers
in different parts of the country. One reason for this
continuing pressure on the retail market is that the economic
loss allocation issue remains open. Firms are apparently
reluctant to destroy or otherwise dispose of TRIS goods as
long as indemmification legislation might result in payments
to the firms that still hold them.
Government indemmification of private parties always
involves a difficult balancing of factors. Budget constraints
and the possible setting of unwarranted precedents are among
the factors that must be weighed. Since TRIS indemnification
is primarily an economic and policy issue, we defer to the
Administration's and the Congress' judgment on the overall
merits. However, the CPSC's expertise is safety and we must
point out that the enactment of indemmification legislation
could serve at least two safety-related purposes:
1. If some or all of the private parties now
holding TRIS goods are indemnified, they can be explicitly
required to give the goods to the government for destruction
or to destroy them under government supervision. This would
effectively assure that those TRIS goods will never be sold
to consumers.
Honorable Max Baucus
Page -4-
2. Some industry parties have held TRIS goods
over the years or have destroyed them because they would not
take the chance of letting them reach consumers. We believe
that other industry parties handling TRIS goods have acted
in less responsible ways. Therefore, any indemnification
legislation should bar payments to firms that are found to
have knowingly acted without sufficient regard for the public's
health and safety interests. This would send business the
message that the government does not reimburse firms that
choose to take any chances with health and safety.
The Commission appreciates this opportunity to submit
comments on this legislation. We would be happy to cooperate
with the Congress in providing any additional facts about the
TRIS situation or in exploring further the issues raised by
indemmification.
Sincerely,
Stuart M. Statler
Acting Chairman
CC: Hon. John P. East, Chairman
Subcommittee on Separation of Powers
David Stockman, Director
Office of Management and Budget
Hon. Strom Thurmond
U.S. Department of Justice
Office of Legislative Affairs
Office of the Assistant Attorney General
Washington. D.C. 20530
AUG 18 1981
Honorable David A. Stockman
Director
Office of Management and Budget
Washington, D. C. 20503
Dear Mr. Stockman:
This is in response to your request for the views of the
Department of Justice on S. 823, a bill "To provide for the pay-
ment of losses incurred as a result of the ban on the chemical
tris in apparel, fabric, yarn or fiber and for other purposes. "
--
This legislation passed the Senate on June 22, 1981.
In the early 1970's, the Department of Commerce and later the
Consumer Product Safety Commission, 1/ issued standards of flamma-
bility for children's sleepwear. As a result of these standards,
manufacturers of children's sleepwear developed technology to
"pad-on" chemical flame retardents to sleepwear. One of the most
widely used chemical flame retardents was Tris (2,-3 dibromopropyl)
phosphate, commonly known as Tris.
In 1976, the Consumer Products Safety Commission initiated a
study to ascertain whether claims that Tris was a potential
carcinogenic substance were justified. Significant review and
testing took place. As a result of the study, on April 7, 1977,
the Commission issued a determination that children's sleepwear
containing Tris was a "banned hazardous substance" under section
2g (l) (A) of the Federal Hazardous Substance Act, 15 U.S.C. 1261(g)
(1974) (the "Act") [42 F.R. 18850 - 18852 (1977)]. This action
triggered the repurchase obligations under the Act, 15 U.S.C.
1274, which requires retail establishments to provide refunds to
consumers who returned goods containing Tris and for manufacturers
to provide refunds to retail establishments which returned the
goods, in turn, to them. The manufacturers possessed no recourse
under the Act, and thus bore the loss.
1/ Under the Consumer Product Safety Act, 15 U.S.C. 2051 et seq.
(1972), the regulatory functions of the Secretary of Commerce
under the Flammable Fabrics Act, 15 U.S.C. 1591 et seq., were
transferred to the Consumer Product Safety Commission.
S. 823 attempts to remedy the financial burdens which result-
ed from those who used the chemical Tris in order to comply with
the flame-retardent standards issued by the Consumer Product
Safety Commission. The legislation evolves from the belief that
the actions of the Consumer Product Safety Commission in both
requiring a flame retardent material in children's sleepwear and
the subsequent banning of the substance selected by industry to
meet this standard are inconsistent actions of the Government and
that a reimbursement mechanism should be established.
To effectuate a reimbursement, S. 823 grants jurisdiction to
the United States Court of Claims to hear, determine, and render
judgment on claims submitted by producers, manufacturers, distrib-
utors, converters or retailers of material, which became children's
sleepwear, containing Tris. The Court of Claims will be permitted
to award judgments to each claimant. Congress will not retain
final authority over the number and amounts of judgments. S. 823
requires that the issue of the Government's liability be ascer-
tained separately for each claimant. Section (b) (1) of the bill
sets forth a series of factors to be considered by the Court of
Claims in determining liability.
As to the question whether the Administration should support
this legislation, the Department is aware that a significant
burden has befallen manufacturers of children's sleepwear who
turned to the chemical Tris to comply with the regulations of the
Consumer Product Safety Commission. Losses were brought about in
some fashion by efforts to comply with Government regulations.
This is particularly true in those firms who made a significant
effort to make and sell a safe product. The Department is unable
to say that a compensation plan available to such parties is
without merit. We do not believe it would be inappropriate for
those who undertook a significant effort to comply with Government
regulations and market a product in a responsible and reasonable
manner to be compensated for their losses in these circumstances.
In passing legislation such as the Federal Hazardous Substance
Act, Congress, at least implicitly, allocated where the risk of
the repurchase obligation would fall. Congress, by passing
legislation such as S. 823, would be readjusting this burden.
The Department, therefore, has no objection to the establish-
ment of a compensation plan. Whether the mechanism proposed by
S. 823 is appropriate involves determinations such as whether a
maximum cost of such a, plan can be ascertained, whether the neces-
sary funds are available, and whether resources will be made
- 2 -
available to the court system, this Department, and the Executive
Branch in general, to process and defend such suits. These are
determinations more within the responsibility of the Department of
the Treasury and the Office of Management and Budget.
Sincerely,
SIGNED
Robert A. McConnell
Assistant Attorney General
- 3 -
Tab D - Sen. Thurmond's and Rep. Campbell's letters to OMB
9421
CARROLL A. CAMPBELL JR.
COMMITTEE ON APPROPRIATIONS
4TH DISTRICT, SOUTH CAROLINA
SUBCOMMITTEES:
WASHINGTON OFFICE:
COMMERCE, JUSTICE. AND STATE, THE
JUDICIARY AND RELATED AGENCIES
ROOM 408
GANNON HOUSE OFFICE BUILDING
TREASURY, POSTAL SERVICE,
GENERAL GOVERNMENT
202-225-6030
LEGISLATIVE BRANCH
Congress of the United States
DISTRICT OFFICES:
P.O. Box 10183, FEDERAL STATION
house of Representatives
GREENVILLE, SOUTH CAROLINA 29603
803-232-1141
Washington, D.C. 20515
P.O. Box 1330
SPARTANBURG, SOUTH CAROLINA 29304
COI
803-582-6422
September 18, 1981
Honorable David Stockman
Director
Office of Management and Budget
Washington, D.C. 20503
Dear Dave:
I appreciate the consideration and attention of you and your
staff to my letter of July 14, concerning the Tris legislation
(H.R. 4011, S. 823).
My concern now is that it is fairly late into the year, and I
would very much like to convince the House Judiciary Committee
to move on this legislation during this session. As indicated
in my previous letter, however, we have virtually no chance of
doing that unless we have an indication that the Carter Adminis-
tration's position of several years ago does not reflect this
Administration's thinking.
Dave, as I have explained, what we are trying to do with the Tris
legislation is give the parties, which were injured by the govern-
ment, a chance for redress. I know that you, having voted for
similar legislation in the 95th Congress, understand the situation
and, based on the enclosed radio transcript from 1977, I believe
the President understands it as well.
I know that you are deeply involved in identifying necessary addi-
tional budget cuts, and I look forward to working with you in that
effort. The Tris bill, however, does not mandate government resti-
tution, but simply gives the injured parties a chance to be heard
in the courts. I believe they deserve that opportunity.
I understand that you do have Justice Department input now, and I
hope that OMB will be able to formulate a position on this legis-
lation in the near future. I hope, moreover, that that position
will be favorable.
With warm regards,
Danall
Carroll A. Campbell, Jr.
Member of Congress
CACJr/nm
8594
STROM THURMOND, d.c., CHAIRMAN
CHARLES McC. MATHIAS, JR., MD.
JOSEPH R. BIDEN, JR., DEL.
PAUL LAXALT. NEV.
EDWARD M. KENNEDY, MASS.
ORRIN G. HATCH. UTAH
ROBERT C. BYRD. W. VA,
ROBERT DOLE. KANS.
HOWARD M. METZENBAUM, OHIO
ALAN K. SIMPSON, WYO.
DENNIS DECONCINI. ARIZ.
JOHN EAST: N.C.
PATRICK J. LEAHY, VT.
CHARLES E. GRASSLEY. IOWA
MAX BAUCUS. MONT.
-r1
United States Senate
JEREMIAH DENTON. ALA.
HOWELL HEFLIN. ALA.
ARLEN SPECTER. PA.
COMMITTEE ON THE JUDICIARY
VINTON DEVANE LIDE. CHIEF COUNSEL
QUENTIN CROMMELIN, JR., STAFF DIRECTOR
WASHINGTON. D.C. 20510
BIJ
24
July 21, 1981
COR,
The Honorable David A. Stockman
Director, Office of Management
and Budget
Executive Office Building
Washington, D.C. 20503
Dear Mr. Stockman:
As you know, the Senate Judiciary Committee unanimously approved
and the Senate passed without objection S. 823, a bill to pro-
vide indemnification for manufacturers who suffered losses as a
result of two conflicting government regulations involving the
use of the flame-retardant treatment, Tris. I urge you to sup-
port this legislation, as you did in 1978 when it passed the
House.
There are three important factors that must be pointed out in
regard to this bill. First, it will not set a precedent because
of the unique circumstances of the case. The Consumer Product
Safety Commission in 1977 banned products containing Tris, claiming
that Tris might be a cancer-causing substance. Several years
earlier, the Commission promulgated a flammability standard for
children's sleepwear with the full knowledge that the regulation
would require the use of chemicals which never before had textile
and apparel uses. It is this unique conflict between two regula-
tions promulgated by the same agency that sets the Tris case apart
from other circumstances in which industries have sought or might
seek government indemnification. For this reason, the Tris case
is not precedent-setting.
Second, the bill gives the Court of Claims jurisdiction to hear
claims brought before it by manufacturers who suffered losses as
a result of the ban. The legislation provides a series of criteria
which a manufacturer must meet in order to be eligible for indemni-
fication by the Court. Thus, it is clear that it is not the
intent of this legislation to provide an automatic bail-out for
losses.
Third, this bill can serve as notice to the bureaucracy that its
mistakes can cause serious and needless harm to industry and con-
sumers. S. 823 clearly sends a message to the bureaucracy that
such grievous errors will not be tolerated.
The Honorable David A. Stockman
July 21, 1981
Page Two
Let me assure you that this bill is the result of extensive
hearings before both Houses of Congress in which testimony was
taken from all interested parties. This bill has passed the
Senate three times and the House once. It has had careful and
thoughtful consideration and seriously deserves your support
and the signature of the President.
Would you please let me have your thoughts on this most important
legislation at an early date.
Sincerely,
Strom Thurmond
Strom Thurmond
Chairman
ST: jkm
8468
CARROLL A. CAMPBELL, JR.
COMMITTEE ON APPROPRIATIONS
4TH DISTRICT, SOUTH CAROLINA
SUBCOMMITTEES:
WASHINGTON OFFICE:
COMMERCE, JUSTICE, AND STATE, THE
JUDICIARY AND RELATED AGENCIES
ROOM 408
CANNON HOUSE OFFICE BUILDING
TREASURY, POSTAL SERVICE,
202-225-6030
GENERAL GOVERNMENT
Congress of the United States
LEGISLATIVE BRANCH
DISTRICT OFFICES:
P.O. Box 10183, FEDERAL STATION
house of Representatives
GREENVILLE, SOUTH CAROLINA 29603
803-232-1141
Washington, D.C. 20515
P.O. Box 1330
SPARTANBURG, SOUTH CAROLINA 29304
803-582-6422
July 14, 1981
Honorable David Stockman
Director
Office of Management and Budget
Washington, D.C. 20503
Dear Dave:
Following up on our conversation Friday, I want to reiterate
my deep concern about the substance and political implica-
tions of your decision to oppose the Tris legislation (H.R.
4011, S. 823).
As to the merits of the decision, the Tris dilemma is a
classic case of government over-regulation of the type that
President Reagan campaigned against. As a matter of back-
ground, the Commerce Department in 1971 required a stringent
flammability standard for children's sleepwear, ignoring the
grave concerns voiced by the textile/apparel industry about
the possibility of unknown toxic effects of chemicals which
would be required to meet these standards. To stay in busi-
ness and in compliance with the law, manufacturers began to
use fabrics treated with Tris, which I understand was the
only flame retardant then available to effectively treat these
fabrics. Fabrics produced and used were subjected to and
passed the tests then known and required.
In the spring of 1976, when questions were raised about possible
carcinogenic effects of unwashed Tris-treated garments and a
warning label was proposed, the industry began phasing out the
use of Tris. On April 8, 1977, however, the Consumer Product
Safety Commission went far beyond the original labeling request
by banning entirely the sale of sleepwear treated with Tris,
and requiring the repurchase of all unsold or unwashed children's
garments made from Tris-treated fabric.
H.R. 4011/S. 823 would simply give those companies which were
caught in this bureaucratic whipsaw a chance to have their day
in court. It simply confers jurisdiction on the Court of
Claims to hear claims by those who unavoidably incurred losses
Honorable David Stockman
July 14, 1981
Page 2
because of the Tris ban. As a matter of fact, the bill con-
tains specific guidelines -- such as available alternatives,
known health hazards, reasonable testing, good faith efforts
to comply with existing Federal flammability standards, com-
pliance with the Tris ban and others -- which the court shall
consider in determining the validity of any claim under this
Act. And, it is only actual losses, not lost profits, which
are recoverable. Further, the bill requires proof of proper
disposal of Tris-treated goods before any payment can be made
under the Act, thus eliminating the possibility that Tris-
treated garments might find their way into the marketplace.
I believe the bill represents simple equity.
Aside from the merits, Dave, I am disturbed about the timing
of the decision. As we discussed, a matter of days before the
Tris decision was made public, the textile industry was rocked
by Chief Textile Trade Negotiator Peter Murphy's plans to go
to Geneva and present an unacceptably weak U.S. position on
renewal of the Multifiber Arrangement. The MFA is, of course,
the major international textile trade instrument and it is an
issue that is guaranteed to unite the entire textile and apparel
industries and their unions. You will remember from your days
in Congress the clout the industry can muster; on trade matters,
fully half the House and half the Senate can be expected to line
up behind them. Further, many of the Southern Democrat "Boll
Weevils" have heavy concentrations of textile and textile-re-
lated industries in their districts. Any perceived anti-textile
action by the Administration could have repercussions on the
whole Reagan economic plan. While I believe we have defused the
MFA situation, the Tris decision, coming at this time, really
amounted to adding insult to injury for the industry.
Finally, I would like to point out that neither Strom Thurmond,
major Senate sponsor, nor myself, as the lead House sponsor of
the Tris bill, were consulted or even informed of the OMB deci-
sion. Instead, we heard about it from the trade press. Even
after my discussion with you, no one out of Annelise Anderson's
office has attempted to contact me to discuss the matter.
The Tris legislation was approved by the 95th Congress, only to
be pocket-vetoed by then President Carter because it was sup-
posedly "precedent setting," the same rationale I understand
Mrs. Anderson is using now. In fact, the bill is not precedent-
setting. The Tris situation is unique: several years after
forcing chemical treatment (which at that time meant Tris) on
sleepwear manufacturers in spite of the industry's documented
Honorable David Stockman
July 14, 1981
Page 3
warnings of unknown health hazards, the same Federal govern-
ment then required the manufacturers to recall these garments
and pay for millions of dollars worth of goods which they
were forced by Federal regulation to treat chemically in the
first place.
During the last Congress and again this year, the Senate unani-
mously passed the Tris bill. Our only chance for action in
the Democratic House and in the Democratic House Judiciary
Committee, however, is with Administration backing.
I respectfully ask you to reconsider your position on H.R.
4011/S. 823.
With warm regards,
Canall
Carroll A. Campbell, Jr.
Member of Congress
CACJr/nm
Tab E - Carter Veto Message
FOR IMMEDIATE RELEASE
NOVEMBER 8, 1978
Office of the White House Press Secretary
THE WHITE HOUSE
MEMORANDUM OF DISAPPROVAL
I am withholding my approval of S. 1503, a bill which would
authorize Government indemnification, upon a judgment by the
U.S. Court of Claims, of businesses which sustained losses as
a result of the ban on the use of the chemical Tris in children's
sleepwear.
In 1971 and 1974 the Government established strict fabric
flammability standards on children's sleepwear to protect children
against burns. To meet these flammability standards, the clothing
industry treated fabric by using substantial quantities of the
flame-retardant chemical Tris. In 1975, information became
available that Tris was a carcinogenic risk to humans. Some
firms stopped using Tris after this test information became
available, but other firms did not.
On April 8, 1977, the Consumer Product Safety Commission
ruled that children's sleepwear containing Tris was banned as
a "hazardous substance" under the Federal Hazardous Substances
Act. This led to the removal of Tris-treated children's sleep-
wear from the marketplace. Both the imposition of flammability
standards and the subsequent ban on Tris-treated fabrics have
caused expenditures and losses by industry.
The imposition of strict flammability standards to protect
the Nation's children was fully justified. After it was dis-
covered that Tris was hazardous to health, the removal of
Tris-treated sleepwear from the marketplace, again to protect
the Nation's children, was also fully justified.
S. 1503 would establish an unprecedented and unwise use
of taxpayer's funds to indemnify private companies for losses
incurred as a result of compliance with a federal standard.
The Government could be placed in the position in the future
of having to pay industry each time new information arises which
shows that a product used to meet regulatory standards is
hazardous. This would be wrong. Producers and retailers have
a basic responsibility for insuring the safety of the consumer
goods they market.
If this bill became law the potential would exist for com-
pensation of firms who marketed Tris-treated material after
they knew, or should have known, that such products constituted
a hazard to the health of children. Extensive, costly, and
time-consuming litigation would be required to determine, in
each instance, the liability involved and the loss attributable
to the ban action in April 1977, without regard to profits the
claimants may have earned on Tris-treated garments in earlier
years.
While it is most regrettable that losses have resulted
from the regulatory actions taken to protect the safety and
health of the Nation's children, no basis exists to require
a potential Federal expenditure of millions of dollars when
the actions of the Government were fully justified. Accordingly,
I am compelled to withhold my approval from this bill.
JIMMY CARTER
# # # #
action
MEMORANDUM
OFFICE OF
POLICY DEVELOPMENT
THE WHITE HOUSE
1982 MAR 19 P 12: 36
WASHINGTON
March 18, 1982
TO:
Ed Harper
FROM:
Ken Duberstein Ken D.
SUBJECT:
TRIS Legislative Status Update
It now appears that George Danielson's replacement
as Chairman of the House Judiciary's Subcommittee
on Administration Law and Government Regulation will
be Sam Hall (D-TX), not Mike Synar, as we predicted
earlier.
Based upon this development and talks with Hall and
Carroll Campbell (R-SC), lead sponsor in the House
we assess it as follows:
1. It will be voted out of Committee
(probably sooner rather than later).
2. Campbell is willing to consider amendments.
3. It looks like this is going to be on a
relatively fast track, therefore, it
probably makes sense to begin working on
Administration amendments (damage control,
if you will).
4. The Senate situation has not changed.
MEMORANDUM
OFFICE OF
POLICY DEVELOPMENT
THE WHITE HOUSE
1982 MAR 12 P 4: 4
WASHINGTON
March 12, 1982
TO:
Ed Harper
FROM:
Ken Duberstein Ker D.
SUBJECT:
TRIS Indemnification Legislation
S. 823 passed the Senate June 18, 1982. The bill, as
you know, was passed without an Administration position.
Senator Thurmond, Chairman of Judiciary, seems to be the
main player in pushing this legislation. For several
reasons, he feels strongly about it. So, on the Senate
side, to state an Administration position counter to the
bill would upset some folks.
Currently, the legislation is stalled in the House Judiciary
Committee (Administrative Law and Government Regulation
Subcommittee). It has not moved, thanks to Chairman George
Danielson (D-CA). However, Danielson plans to accept a
judgeship and is therefore suffering from "lame duckitis."
For all practical purposes then, this subcommittee will
soon have a new chairman (probably Mike Synar (D-OK) who
is more liberal and certainly more aggressive than Danielson).
Carroll Campbell (R-SC), Thurmond's counterpart on the
House side, has indicated his willingness to at least
consider reasonable amendments which I believe Synar would
do also.
CC: Pam Turner
B. Oglesby
Sherrie Cooksey
John Scruggs
THE WHITE HOUSE
WASHINGTON
March 3, 1982
MEMORANDUM FOR KEN DUBERSTEIN
FROM:
EDWIN L. HARPER $
SUBJECT:
TRIS Indemnification Legislation (S. A-23/H.R. 4011)
Attached is a packet describing the need for the
Administration to arrive at a position on this legislation. A
key element in that decision is your assessment of action in
the House and Senate if we make it clear that we oppose the
bill.
There is a profound precedent involved in this legislation -
should the government indemnify an industry for the
unanticipated consequences of its efforts to comply with a
prior governmental ruling?
My personal inclination is that industries and people make
mistakes all the time, very often in response to laws or rules
established by the government. I don't feel the federal
government ought to indemnify me or anyone else for making a
mistake unless it can be proved that the government forced me
against my better judgment into a specific mistake.
ITEM 1 OF 1 IN SET 4
*** 97TH CONGRESS ***
ALL
H.R.4011
DATE INTRODUCED: 06/25/81
SPONSOR: Campbell
REFERRED TO: House Judiciary
COSPONSOR(S) CURRENT (9)
Hefner (A-10/14/81); Derrick (A-10/14/81); Wrden (A-10/14/81);
Sensenbrenner (A-10/14/81); Kindness (A-10/14/31):
Lantos (A-10/14/81); McKinney (A-10/14/81);
Napier (A-10/14/81): McDonald (A-11/19/31):
LATEST OFFICIAL TITLE:
OFFICIAL TITLE AS INTRODUCED AS OF 07/16/81
A bill to provide for the payment of losses incurred as a result of the ban on
the use of the chemical Tris in apparel, fabric, rann, or fiber, and for other
purposes.
LEGISLATIVE ACTIONS:
Jun 25, 81 Referred to House Committee on The Judiciary.
Jun 29, 81 Referred to Subcommittee on Administrative Law and
Governmental Relations.
Sep 16, 81 Executive Comment Requested from Consu
PAGE 1 OF 3. READY FOR COMMAND, OPTION OR PG #(FOR NXT PG, XMIT):
H.R.4011 (LG97) continued:
ABSTRACT: Grants the Court of Claims Jurisdiction over claims against the United States
for losses sustained by producers, processors, manufacturers, distributors, or
other persons resulting from the ban on children's sleepwear containing Tris
phosphate.
DIGEST: Grants the Court of Claims jurisdiction over claims against the United States
for losses sustained by producers, processors, manufacturers, distributors, or
other persons resulting from the ban on children's sleepwear containing Tris
phosphate.
Enumerates factors to be considered by the court in determining the validity
of claims. States that the amount of losses shall not include lost profits,
distress sale proceeds, attorney fees, or interest on losses. Sets forth the
masure of losses for the types of claimants.
Prescribes the respective measures of losses for producers, converters,
manufacturers. distributors, and retailers of Tris-treated sleepwear or the
ALL, PAGE 2 OF 3. READY FOR COMMAND, OPTION OR PG #(FOR NXT PG, XMIT):
H.R.4011 (LG97) continued:
fabric, Yarn, or fiber. Prohibits class action claims. Directs the
subrogation of the United States to successful claimants' rights to recover
losses.
Prohibits any payments under this Act until such time as the claimant produces
proof of the proper disposal of such goods.
INDEX TERMS:
HAZARDOUS SUBSTANCES/CLOTHING INDUSTRY/GOVERNMENT LIABILITY/JURISDICTION/CLAIMS
/TEXTILE INDUSTRY AND FABRICS
ALL, PAGE 3 OF 3. READY FOR NEW COMMAND, OPTION OR FG #:
ITEM 1 OF 1 IN SET 3.
*** 97TH CONGRESS ***
ALL
3.323
DATE INTRODUCED: 03/27/81
CALENDAR NO: 156
SPONSOR: Thurmond
S.REPT.97-130
REFERRED TO: House Judiciary
Senate Committee on the Judiciary
REPORTED BY: Senate Committee on the Judiciary
COSPONSOR(S)
CURRENT (8)
Kennedy; Brrd, of VA; Hollings; Warners Helms; Heflin; Denton;
East:
LATEST OFFICIAL TITLE:
OFFICIAL TITLE AS INTRODUCED AS OF 03/30/81
A bill to provide for the parment of losses incurred as a result of the ban on
the use of the chemical Tris in apparel, in fabric, varn, or fiber, and for
other purposes.
LEGISLATIVE ACTIONS:
Mar 27, 81 Read second time and referred to Senale Committee on Judiciary.
Apr 6, 81 Committee on Judiciary. Referred to Subcommittee on
Separation of Powers for a period not to exceed thirtr days,
whereupon, unless the bill has been reported sooner, the
PAGE 1 OF 4. READY FOR COMMAND, OPTION OR PG #(FOR NXT PG, XMIT):
S.823 (LG97) continued:
subcommittee shall be discharged from its further
consideration
Mar 4, 81 Subcommittee on Separation of Powers. Hearings held.
(May 5, 81).
Mar 6, 81 Committee on Judiciary. Subcommittee on Separation of Powers
discharged.
Mar 12, 81 Committee on Judiciary. Ordered to be reported with an
amendment ir, the nature of a substitute favorably.
Dec 15, 81 Committee on Judiciary. Provisions of measure incorporated
into measure H.R. 4755 ordered to be reported.
Jun 3, 81 Committee on Judiciary. Reported to Senate by Senator East for
Senator Thurmond Favorably with an amendment in the nature of a
substitute. With written report No. 97-130.
Jun
3, 81 Placed on Senate Legislative Calendar under Regular Orders.
Calendar No. 156.
Jun 18, 61 Passed Senate with an amendment by Voice Vote.
Jun 22, 81 Referred to House Committee on The Judiciary.
Jun 24, 31 Referred to Subcommittee on Administrative Law and
Governmental Relations.
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S.823 (LG97) continued:
Apr 2, 82 Executive Comment Requested from Consumer Product Safety
Commo Justice, OMB.
ABSTRACT:
Grants the Court of Claims Jurisdiction over claims against the United States
for losses sustained by producers, processors, manufacturers, distributors, or
other persons resulting from the ban on children's sleepwear containing Tris
phosphate.
DIGEST:
06/18/81 (Measure considered in Senate)
Grants the Court of Claims Jurisdiction over claims against the United States
for losses sustained by producers, processors. manufacturers: containing distributors, Tris or
claspwear
phosphate.
Enumerates factors to be considered by the court in determining the validity
of claims. States that the amount of losses shall not include lost profits,
distress sale proceeds, attorney fees, or interest on losses. Sets forth the
measure of losses for the trpes of claimants.
ALL, PAGE 3 OF 4. READY FOR COMMAND, OPTION OR PG #(FOR NXT PG, XMIT):
S.823 (LG97) continued:
Prescribes the respective measures of losses for producers, converters,
manufacturers, distributors, and retailers of Tris-treated sleepwear or the
fabric, Yarn, or fiber. Prohibits class action claims. Directs the
subrogation of the United States to successful claimants' rights to recover
losses.
Prohibits any payments under this Act until such time as the claimant produces
proof of the proper disposal of such goods.
INDEX TERMS:
CLOTHING INDUSTRY/GOVERNMENT LIABILITY/HAZARDOUS SUBSTANCES/JURISDICTION
ALL, PAGE 4 OF 4. READY FOR NEW COMMAND, OPTION OR PG #:
file TRIS
16
affected by this either, in the apparel industry or fabric manufac-
turers or chemical industry, but primarily because of my interest
aroused as a Member of the Subcommittee on Oversight and Inves-
tigations of the Interstate and Foreign Commerce Committee,
chaired by Congressman John Moss, the committee which held
extensive hearings on the whole subject.
The Consumer Product Safety Commission ban on Tris-treated
children's sleepwear has resulted, I think, in a serious injustice to
the garment industry. It is highly appropriate that the Congress
consider the need for Federal assistance.
I have not come here today to criticize the CPSC's decision to
ban Tris. The decision was based on sound scientific evidence and a
legitimate concern for the health of American children. In fact, if I
were to criticize the CPSC, it would be for failing to adequately
warn the public about the dangers of continued use of washed Tris-
treated garments and for the delay in finally banning Tris-treated
sleepwear from the market after they had received information
that harmful results could come from those garments.
As the Chairman is aware, the CPSC's decision to ban Tris has
become a regulatory nightmare. Legal challenges by the mills in
South Carolina have resulted in the original April 1977 ban being
overturned on procedural grounds. The district court ruling has
forced the CPSC to seek individual court injunctions against the
sale of Tris.
While this substitute strategy has effectively prevented the retail
sale of the poisoned garments, it has not permitted a fair and
equitable distribution of the financial loss along the sleepwear
manufacturing chain. For the small sleepwear manufacturing in-
dustry, the South Carolina decision was greeted not with acclaim
but with horror. Although the ban and repurchase requirements
have been suspended, market pressures forced these small, often
family run companies, to accept returns from the retail outlets.
The textile mills have adamantly refused to accept any responsi-
bility for the economic loss resulting from the sleepwear ban. In
fact, some textile representatives in testimony before the Senate
have even questioned the scientific validity of the ban itself.
It is both absurd and unjust that the garment manufacturers
should be forced to absorb the full cost of the ban. In many re-
spects, the garment manufacturers are the least culpable parties in
the sleepwear manufacturing chain. The textile mills, not the gar-
ment manufacturer, purchase Tris from the chemical company and
applied it to the fabric. In many cases the garment manufactur.r
did not even know what Tris was. They merely bought flame
retardant fabric from the mills and cut it into garments.
Further, the garment manufacturer is the industry segment least
able to absorb the financial losses of the ban. For some companies,
the losses from the Tris recall will exceed their total worth. That
the garment industry should absorb the total losses of the Tris ban
is a regulatory and economic injustice.
The legislation currently before the subcommittee, S. 1503 and
H.R. 7158, would, in varying degrees, give the U.S. Court of Claims
authority to indemnify for losses resulting from the Tris ban.
Generally, I oppose Federal indemnification for industry losses in
the absence of Government wrongdoing. Economic loss resulting
43
Mr. KINDNESS. Thank you, again, Mr. Chairman.
Mr. Merow, it is my understanding that a U.S. district court
judge in South Carolina ruled in the Spring Mills case that the
Tris ban could not be enforced against Spring Mills. Is any other
mill affected by that ruling, other than those located in that dis-
trict?
Mr. MEROW. The exact status of the ban order is a matter of
some dispute at the present time. The Division of the Department
of Justice which handled that is the Consumer Unit in the Anti-
trust Division, and at the present time they are involved in that
litigation in the fourth circuit where that has been appealed.
There is also litigation pending in New York City with a motion
to transfer that to the same jurisdiction as the Spring Mills case,
where the Government is trying to compel repurchase by the mills.
It is a suit against Burlington Mills and other mills in New York
and they have moved to transfer that to South Carolina, I believe.
So, the issue of the actual status of the ban order is not one that
is very clear at this time. The enforcement action is going forward
on an individualized basis, and the interpretation that these are
banned, hazardous products has not been overturned, so proceed-
ings can be brought on an individual basis, against any company
who would try to sell the item at the present time. And that is how
it is operating at the present time.
Mr. KINDNESS. Judge Chapman in the South Carolina District
Court, in effect, ruled that the Consumer Product Safety Commis-
sion did not follow the Administrative Procedure Act due process
requirements. If the Fourth Circuit upholds Judge Chapman's de-
termination there, is that likely to have any effect on the position
of the Justice Department with respect to this legislation?
Mr. MEROW. No. I think it would not.
Our view would be that the only prior precedent that we think is
close is Mizokami, the spinach case, and that would require a
showing of actual wrongdoing on the merits by the Consumer
Product Safety Commission. Some aspect of negligence or wrongdo-
ing to establish—
Mr. KINDNESS. To establish legal liability?
Mr. MEROW. A basis for indemnity, and it would be our view a
procedural defect would not come within that category.
Mr. KINDNESS. Is it your theory there is a tort in that case?
Mr. MEROW. In the Mizokami case? It is in the nature of a tort in
that regard. It would be a negligent action.
Mr. KINDNESS. And in a case like this, is it the position of the
Department of Justice that there is no conduct that approaches
that measurement of fault or harm?
Mr. MEROW. Yes. We have noted that the witnesses continually
do not criticize either the imposition of flammability standards to
protect children or the ban again to protect children from cancer-
causing properties, so we cannot see where the basis for indemnity
really rests in the theory of the act.
Mr. KINDNESS. Because you are not out of pocket.
Mr. MEROW. I understand that. We perfectly well understand the
loss situation and the problems caused, but we don't think it's
unique in that regard.
13
automobiles. The Environmental Defense Fund testified that the Tris in children's
:leepwear represented less than 50 percent of the Tris used in this country. If this is
so, why was the CPSC order limited solely to children's sleepwear? Why was one
industry singled out?
The CPSC ban also made a distinction between washed garments and unwashed
garments. The thrust of the rationale was that three or more washings would
remove the carcinogenic properties from the clothing. However, there is a serious
scientific dispute as to whether or not washings remove the cancer-causing proper-
ties from the clothing. Suffice it to say, this distinction was a highly questionable
one and it confused consumers and retailers alike.
Last, the ban imposed a repurchase order on the manufacturer of the garments
containing the Tris. There are five industries involved in the apparel manufacturing
process. These consist of: (1) The chemical company; (2) the fiber company; (3) the
fabric manufacturer; (4) the garment manufacturer; and (5) the retailer. The CPSC
ban was applied 80 that the entire financial loss would fall solely on the garment
manufacturer-one level of this industry. Ironically, the Tris was already in the
fabric before the garment manufacturer received it to cut and sew and ship it to the
retailers. They didn't make the chemical. They didn't make the fabric. They didn't
retail it. Yet, they were made totally responsible under the terms of the ban.
Over 70 percent of the manufacturers in the apparel industry are small business-
men. The percentage of profits are generally low in the apparel industry as a whole.
Once it became evident that the burden of the ban was to fall solely on one level,
serious problems developed. These small manufacturers, already drastically under-
capitalized, saw their normal sources of credit dry up. The lack of business confi-
dence seriously curtailed their ability to borrow money from banks or their suppli-
ers. Product liability insurance also became increasingly difficult to obtain or main-
tain. While some Small Business Administration loans were made available, the
equity required in terms of personal assets was a serious dewrrent to applications. I
know of at least three individual small manufacturers who were forced to close
their businesses as a result of this ban.
Again, I want to emphasize that I view indemnification, in the context of hazard-
ous products, as a drastic and unusual remedy. But I do strongly urge the members
of this Subcommittee to give serious consideration to some form of a remedy for the
small apparel manufacturers, who have been unfairly singled out in this situation.
They acted in good faith to comply with anti-flammability standards. In a sense,
they were caught in a crossfire between two competing regulatory aims. Serious
consideration should be given to allowing these small manufacturers an opportunity
to go to the court of Claims and recover their actual losses resulting from the Tris
ban.
I appreciate this opportunity to share my views with the Subcommittee on this
issue and welcome any questions you may have.
Mr. COHEN. Mr. Chairman, the Consumer Product Safety Com-
mission ban on the Tris treated children's garments from the
American marketplace was a decision I think that reflected a very
valid public health concern on the part of both Government offi-
cials and consumer advocates, and with a very real possibility that
Tris-treated goods cause cancer, I think these products were right-
fully banned.
But while this was a legitimate regulatory action in a general
sense, the Commission's overall conduct in the Tris affair can only
be portrayed as clumsy and inept. The initial terms of the Tris ban
were both illogical and unfair, in my opinion.
It was structured so that almost the entire brunt of the repur-
chase costs were borne by the garment manufacturers. Despite
subsequent judicial and administrative attempts to redefine the
repurchase responsibilties later on, the apparel manufacturers
have still been saddled with an inordinate share of the responsibili-
ty and loss.
I will pass over the comment by the Washington Post in my
prepared remarks, but they had an appropriate editorial entitled,
"The Tris Mess."
31-454 o 79 2
file TRIS
416
434 FEDERAL SUPPLEMENT
1. Trade Regulation 863
SPRINGS MILLS, INC., Plaintiff,
Under rule-making procedures of the
Food, Drug, and Cosmetic Act, incorporated
V.
in the Federal Hazardous Substances Act,
CONSUMER PRODUCT SAFETY COM-
all persons affected by proposed regulations
MISSION, S. John Byington, R. David
declaring flame retardant for children's
Pittle, Barbara Franklin, Lawrence M.
sleepwear to be a "banned hazardous sub-
Kushner, Thaddeus Garrett, Richard E.
stance" were entitled to advance notice of
Rapps, Defendants,
rule making, a delayed effective date of
regulation, right to file objections within 30
and
days, right to automatic stay of effective
Environmental Defense Fund,
date, right to public hearing and decision
based on fair evaluation of all evidence of
Defendant-Intervenor.
record, and judicial review, and the Con-
Civ. A. No. 77-891.
sumer Product Safety Commission had no
authority to declare a "banned hazardous
United States District Court,
substance" without going through the steps
D. South Carolina,
required for the issuance of regulations.
Rock Hill Division.
Federal Hazardous Substances Act,
§§ 2(q)(1)(A), 3(a)(1), 15 U.S.C.A.
June 23, 1977.
§§ 1261(q)(1)(A), 1262(a)(1); 5 U.S.C.A.
§ 553; Federal Food, Drug, and Cosmetic
Act, §§ 409(f), (g)(2), 701(e)(1-3), 21 U.S.
Textile manufacturer brought action
C.A. §§ 348(f), (g)(2), 371(e)(1-3).
seeking permanent injunction restraining
2. Constitutional Law
318(2)
the Consumer Product Safety Commission
Trade Regulation
863
from enforcing or attempting to enforce
regulations finding flame retardant used in
Congressional intent was that the Con-
children's sleepwear to be a "banned haz-
sumer Product Safety Commission proceed
ardous substance." The District Court,
with rule-making procedures as set forth in
Chapman, J., held that: (1) the Commission
the Food, Drug, and Cosmetic Act and not
attempt to make final decision having na-
did not have authority to declare an article
tionwide impact without affording affected
a "banned hazardous substance" without
parties the basic requirements of due proc-
going through the steps required for the
ess, and thus the Commission could not fit
issuance of regulations set forth in the
its action banning flame retardant for chil-
Food, Drug, and Cosmetic Act; (2) action
dren's sleepwear within exemption provided
banning flame retardant could not be fit
by the Administrative Procedure Act for
within exemption provided by the Adminis-
"interpretative rules and statements of poli-
trative Procedure Act as "interpretative
cy." Federal Food, Drug, and Cosmetic
rules and statements of policy"; (3) the
Act, § 701(e-g), 21 U.S.C.A. § 371(e-g); 5
Commission could not declare article a
U.S.C.A. § 553(d)(2).
"banned hazardous substance" without first
deciding that it was a "hazardous sub-
3. Administrative Law and Procedure
382
stance" even though children were involved,
and (4) since the Commission failed to fol-
Whether agency action involves an in-
low procedural safeguards adopted by Con-
terpretation or a substantive regulation
gress and failed to provide a full rule-mak-
turns on the complexity and pervasiveness
ing hearing with respect to its ban, it de-
of the rules issued, the drastic changes ef-
fected in existing law by the rules, the
prived plaintiff of due process, and bans of
flame retardant and amendments thereto
degree of retroactivity and its impact, and
the confusion and controversy engendered
were null and void.
by practical difficulties of compliance with
Injunction issued.
the new rule. 5 U.S.C.A. § 553(d)(2).
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
417
Cite as 434 F.Supp. 416 (1977)
4. Constitutional Law 318(2)
association to act for it in the prior case and
Congress intended that repurchase
where the prior case involved only the ex-
remedy with respect to a "banned hazard-
tent of the ban and not the basic issue of
ous substance" be used only after a full due
the constitutionality of such a ban.
process hearing. Federal Hazardous Sub-
9. Constitutional Law
318(2)
stances Act, § 15, 15 U.S.C.A. § 1274.
Where the Consumer Product Safety
5. Trade Regulation 863
Commission failed to provide procedural
The Consumer Product Safety Commis-
safeguards enacted by Congress and failed
sion may not declare an article a "banned
to provide a full rule-making hearing with
hazardous substance" without first deciding
respect to its ban of flame retardant for
that it is "hazardous substance" and the
children's sleepwear as a "banned hazard-
fact that children may be involved does not
ous substance," it deprived textile manufac-
obviate the necessity that the Commission
turer of due process, and thus such bans
by proper rule-making procedures first
and amendments thereto were null and
make the determination that article is a
void. Federal Hazardous Substances Act,
"hazardous substance." Federal Hazardous
§§ 2(q)(1)(A), 3(a)(1), 15 U.S.C.A.
Substances Act, § 2(f)(1)(A), (q)(1)(A), 15
§§ 1261(q)(1)(A), 1262(a)(1); 5 U.S.C.A.
U.S.C.A. § 1261(f)(1)(A), (q)(1)(A).
§ 553; Federal Food, Drug, and Cosmetic
Act, §§ 409(f), (g)(2), 701(e)(1-3), 21 U.S.
6. Constitutional Law 48(1)
C.A. §§ 348(f), (g)(2), 371(e)(1-3).
Unconstitutional construction of stat-
ute must be avoided by courts when possi-
ble.
Wesley M. Walker, Mark Holmes, Leath-
erwood, Walker, Todd & Mann, Greenville,
7. Constitutional Law
318(2)
S. C., Emmet J. Bondurant, II, Kilpatrick,
Trade Regulation
861
Cody, Rogers, McClatchey & Regenstein,
The Federal Hazardous Substances Act
Atlanta, Ga., for plaintiff.
can fairly be interpreted as meeting due
process requirements by requiring that the
Thomas E. Lydon, Jr., U. S. Atty., Colum-
Consumer Product Safety Commission use
bia, S. C., James D. McCoy, III, Asst. U.S.
the rule-making procedure provided therein
Atty., Greenville, S. C., Arthur E. Korkosz,
and outlined in the Federal Food, Drug, and
Atty., Consumer Affairs Section, Antitrust
Cosmetic Act, requiring a proper finding,
Division, U. S. Dept. of Justice, Wash-
after adequate notice and fair hearing, that
ington, D. C., of counsel; Theodore J. Garr-
an article is a "hazardous substance" before
ish, Gen. Counsel, Alan Shakin, D. Stephen
proceeding to determination that it is a
Lemberg, Consumer Product Safety Com-
"banned hazardous substance." Federal
mission, Washington, D. C., for defendants.
Hazardous Substances Act, §§ 2(q)(1)(A),
Robert J. Rauch, William Butler, Wash-
3(a)(1), 15 U.S.C.A. §§ 1261(q)(1)(A),
ington, D. C., Herbert Buhl (local counsel),
1262(a)(1); Federal Food, Drug, and Cos-
Columbia, S. C., for defendant-intervenor.
metic Act, § 701, 21 U.S.C.A. § 371.
FINDINGS OF FACT, CONCLUSIONS
8. Action
53(1)
OF LAW AND ORDER
Judgment 678(7)
Prior action was not res judicata of
CHAPMAN, District Judge.
textile manufacturer's claim that ban of
This matter was tried before the Court on
flame retardant for children's sleepwear
June 13, 1977, as to the first cause of action
was unconstitutional, and present action did
in the complaint brought by plaintiff
not constitute impermissible attempt by
Springs Mills, Inc. against Consumer Prod-
manufacturer and an association of textile
uct Safety Commission, the members of the
manufacturers to split a cause of action,
Commission and the Director for Compli-
where manufacturer did not authorize the
ance and Enforcement of said Commission.
418
434 FEDERAL SUPPLEMENT
Springs seeks a permanent injunction re-
and substantive due process of law as guar-
straining Consumer Product Safety Com-
anteed by the 5th amendment to the Consti-
mission (CPSC) from enforcing or attempt-
tution of the United States.
ing to enforce its regulations relating to
This issue was tried before the Court
TRIS, a flame retardant used primarily in
without a jury and the evidence received
children's sleepwear, technically known as
consisted of various affidavits, correspon-
(2, 3 Dibromoprotyl) phosphate. CPSC has
dence, reports, transcripts of Commission
issued regulations finding TRIS to be a
meetings and stipulations, but no witnesses
"banned hazardous substance" within the
testified at the trial.
meaning of 15 U.S.C. § 1261(q)(1)(A), which
is the Federal Hazardous Substances Act,
After consideration of the evidence
15 U.S.C: §§ 1261-74. The regulations is-
presented and a study of the legal issues
sued by CPSC were published in the Feder-
the Court, pursuant to Rule 52 of the Fed-
al Register on April 8, April 20, April 26,
eral Rules of Civil Procedure, makes the
May 5 and June 1, 1977. (See 42 Fed.Reg.
following
18850, 2479, 21274, 22878 and 28060.) These
regulations declare that all fabrics, yarns
FINDINGS OF FACT
and fibers containing TRIS, and all gar-
1. The plaintiff, Springs Mills, Inc., is a
ments made from such fabrics, yarns and
corporation organized and existing under
fibers intended for use in manufactured
the laws of the State of South Carolina and
children's wearing apparel are "banned haz-
is engaged in the business of spinning,
ardous substances".
weaving, knitting, refinishing and market-
By declaring these articles to be "banned
ing a large variety of textile products,
hazardous substances", the provisions of 15
which until mid 1976 included fabrics treat-
U.S.C. § 1274 requiring the repurchase
ed with a chemical flame retardant known
thereof came into effect.
as TRIS.
On May 24, 1977, this Court after a hear-
2. The defendants are the United States
ing in Greenville, South Carolina, issued a
Consumer Products Safety Commission, the
preliminary injunction against the CPSC
Chairman and Commissioners thereof, the
and its Commissioners preventing them
Executive Director for Compliance and En-
from attempting to enforce against Springs
forcement of said Commission and Environ-
any of the TRIS regulations issued by de-
mental Defense Fund, Inc., which was al-
fendants. Subsequent thereto Environmen-
lowed to intervene as a party defendant in
tal Defense Fund, Inc. (EDF) moved the
the case.
Court to intervene as a party defendant in
3. In 1953 Congress enacted the Flam-
this action. This motion was granted on
mable Fabrics Act, 15 U.S.C. § 1191 et seq.
June 9 with the understanding that EDF
covering the standard for measuring
would be present at the trial scheduled for
flammability of wearing apparel. There-
June 13 and would make no effort to delay
after the Secretary of Commerce was
such trial because of its late entry into
granted authority by the Congress to issue
litigation.
mandatory flammability standards and in
The complaint sets forth four causes of
1971 the Secretary issued his apparel
action, but in the interest of time, and since
flammability standard FF-3-71 (16 C.F.R.
all parties felt that the first cause of action
§ 1615) prohibiting the sale in interstate
might be dispositive of the case, the trial
commerce of all children's sleepwear sizes 0
held on June 13, 1977 involved only such
to 6X that fail to comply with certain
first cause of action, which alleges that the
flammability standards. In order to comply
actions of the Commission in adopting the
with this standard it was necessary that
TRIS regulations are unconstitutional, null
this size children's sleepwear be treated
and void because they are allegedly in viola-
with a chemical flame retardant, and TRIS
tion of the plaintiff's right to procedural
was the only flame retardant available to
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
419
Cite as 434 F.Supp. 416 (1977)
effectively treat polyester, acetate and tri-
information obtained from NCI. The min-
acetate fabrics used for children's sleep-
utes of this meeting show the data supplied
wear, which would enable the sleepwear to
by NCI was unverified, uninterpreted and
comply with the Secretary's standards.
uncertain.
This had the practical effect of the Federal
7. The Commission thereafter had meet-
Government ordering that TRIS be used.
ings with EDF personnel, including Robert
Now another department of the same
J. Rauch, counsel of record for EDF in the
Government has not only banned TRIS, but
present case, and received a letter from
ordered the repurchase of articles contain-
Rauch, Drs. Harris and Highland, all of
ing it.
EDF, outlining the procedure to be used by
4. On or about March 24, 1976, CPSC
CPSC in banning TRIS treated garments,
received from EDF a petition to require
which is the procedure that CPSC has at-
labeling of TRIS treated sleepwear direct-
tempted to follow under § 1261(q)(1)(A).
ing that it be washed three times before
8. During this same period members of
wearing. CPSC did not publish the con-
the Commission received information and
tents of this petition, or any proposed regu-
opinions from outside sources by telephone.
lation suggested thereunder, and took no
9. At a meeting of the technical staffs
official action thereon. However, CPSC so-
of CPSC and EDF held in Bethesda, Mary-
licited information from certain selected
land on February 18, 1977, the various tests
sources, including EDF itself. In October
and results of tests were discussed and indi-
1976, EDF complained of the Commission's
cated that the tests done on mice, rats and
lack of action on its March 24 petition and
rabbits relating to the ingestion and absorp-
CPSC responded in a letter dated December
tion of TRIS were anything but conclusive,
16, 1976, which stated in part:
that the effects were not necessarily
"We agree that section 701(e) of the Fed-
cumulative and Dr. Harris of EDF stated
eral Food, Drug and Cosmetic Act (21
frankly that there was no scientific method
U.S.C. § 371(e) ) applies to your petition
for extrapolating from animals to humans
(See also an applicable regulation at 16
in terms of carcinogenicity and near the
C.F.R. 1500.201(a)
end of the meeting Mr. Rauch, representing
Nothing was done by CPSC to notify inter-
EDF at such meeting, and presently in this
ested parties of the petition or to set a
court, stated at page 31:
hearing or otherwise allow interested par-
"One of our concerns here, of course, is
ties the opportunity to present their views
the Commission act promptly on this. I
thereon as set forth in 21 U.S.C. § 371(e).
think a concern that has developed in my
mind as I listened to some of the discus-
5. On February 8, 1977, EDF filed an
sion this afternoon is that certainly we
additional petition with CPSC seeking a
want to get all of the necessary informa-
ban on the sale of all wearing apparel con-
tion to make this judgment. But it
taining TRIS, and CPSC failed to publish
seems to me some decisions are going to
this petition and failed to afford interested
have to be made with certain questions
persons an opportunity to comment, but
you cannot get perfect answers for, as
continued to receive data from selected
you all know; there is always some de-
sources such as EDF, NCI and certain doc-
gree of uncertainty.
tors and professors. All of these contacts
EDF has now had some petition pending
represent ex parte communications with the
before you for quite some time. This is
Commission at a time when it had petitions
not a new problem. We now have the
pending.
NCI data. It seems to us in the interest
6. On February 4, 1977, officials of
of protecting public health, if there is any
CPSC and NCI held a meeting to review
doubt in this case, that the public has got
the data and findings of NCI. Notice of
to be given the benefit of that doubt;
this meeting was not given to Springs or
therefore, we would like to see the Com-
anyone else who might be affected by the
mission, of course, act promptly on this.
420
434 FEDERAL SUPPLEMENT
This afternoon I have dictated a letter
Dr. Rauch: I think it is clear the intent
which would be arriving to each Commis-
of the statute is when the Commission
sioner requesting a meeting on this early
receives something which appears reason-
next week. We realize your need to ac-
able on its face that it get it out for
cumulate additional information, but I
public comment and notice. And it just
would like a sense of how soon you think
is not acceptable to the Commission to
you are going to be able to act on this."
just internalize the process and keep the
Later at page 34 of the transcript of said
Commission within the petition without
meeting Mr. Rauch continues:
going ahead as the statute requires."
"If you look at the statute, the section
(emphasis added)
quoted back and forth in several letters
10. On March 8, 1977, a meeting of
dealing with what the Commission is re-
CPSC was held and Mr. Rauch, an attorney
quired to do upon receipt of a petition
for EDF, Dr. Harris and Dr. Highland of
showing reasonable ground, I would like
EDF appeared and argued for immediate
to know whether in your judgment right
action on the EDF petition. The record
now the petition we have submitted
does not indicate that there were present
presents reasonable grounds for action?
any representatives from the chemical in-
Mr. Brown (an attorney for CPSC):
dustry, the textile industry, the apparel
manufacturers industry or any other group
There is no way an Executive Director-I
or individual that might be affected by a
am just saying the Commission is very
ruling or other Commission action. At
jealous of its prerogatives.
page 16 of the transcript of this meeting
Dr. Rauch: But that is a legal determina-
Mr. Rauch stated:
tion.
"Of course, it seems to us at this time
Mr. Brown: That is right. And that is
that your appropriate action will be first,
what the General Counsel's office will
to declare that Tris is a hazardous sub-
look at.
stance under the Federal Hazardous Sub-
Dr. Rauch: As I read this statute it is
stance Act. And then using the authori-
clear to me once that determination has
ty of Section 2(q)(1)(A) to determine that
been made, and presumably it can be
children's garments containing Tris are
made fairly promptly, you don't have to
banned hazardous substances.² (Empha-
have complete evidence, it is 'reasonable
sis added)
grounds', but you are required to publish
The statute is very clear. The only ac-
the petition or some form of it in the
tion required of you to move forward on
Federal Register and that will start the
this now is to make the determination
process moving. This has not happened
under the statute that Tris is a hazardous
to date and on our earlier petition sub-
substance. The rest of it falls right into
mitted a week or so ago.
place."
I would like to have a sense of when the
11. Most of the remainder of the March
legal machinery starts to move.
8 meeting was taken by Dr. Harris and
Mr. Brown: Having spoken to the Com-
attorney Rauch attempting to convince the
missioners in their session last Wednes-
five CPSC Commissioners that they should
day, how soon is the legal analysis going
move with dispatch, not worry about any
to be here, it was promised to be there, it
legal challenges, and not wait for "the NCI
was scheduled to be March 4th and it was
results". These produced a statement by
promised earlier-
Commissioner Kushner:
1. Mr. Rauch is sometimes referred to as Dr.
in 15 U.S.C. § 1261(f)(1)(A), by following the
Rauch, but it appears from the record that he is
procedures of the Federal Food, Drug and Cos-
one and the same.
metic Act; second, then decide if it should be a
"banned hazardous substance" under
2. This is the basic position of Springs in the
present action: First, CPSC must determine
$ 1261(q)(1)(A).
that TRIS is a hazardous substance, as defined
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
421
Cite as 434 F.Supp. 416 (1977)
"Once again, there are so many assump-
14. At the March 8 meeting several
tions that are involved here. And it
Commissioners raised serious questions as
seems to me that the figures there, if we
to the value of the studies that had been
are going to rely on those figures to back
made. These questions were answered by
up a case, are simply not overwhelming.
Dr. Harris of EDF giving not only his opin-
Not only are they not overwhelming, they
ions but quoting from alleged opinions of
are not terribly convincing at that level
other doctors who were not present to veri-
of exposure."
fy the opinions or to be questioned by the
12. Later Dr. Harris is quoting a Dr.
Commissioners.
Mybach and produced the response from
15. The medical reports presented to
Chairman Byington at page 44:
CPSC by its own staff physicians are any-
"Transatlantic telephone call does not re-
thing but conclusive on the question of dan-
place face to face meetings to talk about
gers from TRIS. These reports refer to
major studies."
problems of "dosage", "an inestimable num-
13. At this meeting EDF threatened
ber of imponderable questions", "exposure",
suit against CPSC to require it to act upon
"impossibility of calculation", "no hazard to
the EDF petition by March 15, 1977. At
humans", "impossibility of extrapolation of
page 47 of the transcript Commissioner By-
animal data to humans", "that there are a
ington states:
thousand chemicals known to produce can-
"One of the things I would suggest, and I
cer in animals and about 30 of these have
guess bothers me a bit in your letter, is
also been found to be carcinogenic in man".
that in the conclusion of your letter you
16. A meeting of the Commission, closed
indicate that if we had not made a deci-
to the public, was held on April 4, 1977 with
sion by the 15th we would be forced to
two members of its legal staff and four
conclude this refusal to act means a deni-
members of its Office of Public Affairs
al of the Commission.
present to discuss whether TRIS should be
You pointed out that should no action be
banned and under what section of the law.
forthcoming by that date, EDF intends to
The primary choice was between 15 U.S.C.
pursue whatever legal remedy is availa-
§ 1261(q)(1)(A) or (B) of the same section.
ble to it to require the Commission to
Section (A) applies to:
assume its statutory responsibility.
"Any toy or other article intended for use
I would only suggest that if such a suit in
by children, which is a hazardous sub-
those few days might be very counterpro-
stance, or which bears or contains a haz-
ductive. And the reason I say it can be
ardous substance in such manner as to be
very counterproductive is since we are
susceptible of access by a child to whom
working on a very short time frame, both
such toy or other article is entrusted;"
of us, and both of us I think have tried
very forthrightly and openly to keep each
and (B) covers:
other informed as to what we have,
"Any hazardous substance intended, or
where we are going and what we are
packaged in a form suitable, for use in
doing, and if the Commission has not
the household, which the Secretary by
made a decision, and I am not suggesting
regulation classifies as a 'banned hazard-
that they won't by the 15th, but if they
ous substance' on the basis of a finding
haven't, and if the Commission is still
that, notwithstanding such cautionary la-
trying to get certain pieces of informa-
beling as is or may be required under this
tion over the schedule, I have kind of a
chapter for that substance, the degree or
problem with the suggestion that we are
nature of the hazard involved in the pres-
looking at two to three months to move."
ence or use of such substance in house-
3. This ratio of lawyers to public relations peo-
was more concerned with its image than with
ple, together with the transcript of such meet-
the legal basis of its action.
ing, convince this Court that the Commission
422
434 FEDERAL SUPPLEMENT
holds is such that the objective of the
(2) Uncut fabric, intended for sale to con-
protection of the public health and safety
sumers for use in children's wearing ap-
can be adequately served only by keeping
parel, which contains TRIS (2, 3-Dibromo-
such substance, when so intended or
prophyl) phosphate and which is in inter-
packaged, out of the channels of inter-
state commerce on April 8, 1977 or which
state commerce
"
is introduced into interstate commerce af-
17. Although no formal vote was taken
ter that date or which has not yet been
of the Commission at the April 4 meeting,
washed (even if it has been sold before
there appeared in the April 8, 1977 Federal
that date)."
Register the ban on TRIS treated articles
which generated this lawsuit. The notice
18. At the closed meeting of the Com-
at page 18853 indicates that "Commission
mission on April 4, 1977, it was apparent
proposes to amend 16 CFR 1500.18 by add-
that the members were still receiving ex
ing a new subsection (d)",4 and this action is
parte advice, evidence and information, but
said to be pursuant to the provisions of the
were quite concerned with the possibility of
Federal Hazardous Substances Act, 15
having to explain their decision or any ac-
U.S.C. § 1261(f)(1)(A), (g), (q)(1)(A) and
tions taken to a United States District
§ 1269(a). This ban provides:
Court. The general counsel for the Com-
"(d) Toys and other children's articles
mission said he had talked with Rauch the
presenting toxicity hazards. Under the
morning of the meeting and Rauch was
authority of sections 2(f)(1)(A), 2(g),
concerned about manufacturers or retailers
2(q)(1)(A), and 10(a) of the Act, the Com-
dumping TRIS products on the market, al-
mission has declared that the following
though he had no evidence that this was
articles are banned hazardous substances
happening. Attorney Rauch made the
because they are toys or other articles
same statement to this Court, but again had
intended for use by children that are haz-
nothing to back up this claim. The Com-
ardous substances, or bear or contain haz-
mission also discussed a letter received from
ardous substances in such manner as to
Professor Bruce N. Ames of the University
be susceptible of access by a child to
of California at Berkeley which strongly
whom they are entrusted, based on the
recommended the TRIS ban. This letter
fact that they may cause substantial per-
sonal injury or substantial illness during
was sent to the Commission following its
or as a proximate result of any customary
telephone conversation from Professor
or reasonable foreseeable handling or use,
Ames to Commissioner Franklin on Febru-
including reasonably foreseeable in-
ary 28, 1977 in which Ames expressed his
gestion by children, because of their tox-
views on the carcinogenicity of TRIS and
icity:
Commissioner Franklin suggested he put
(1) Children's wearing apparel made
his views in a letter. (See plaintiff's exhib-
from fabric which contains TRIS (2, 3-Di-
it 3-P). Some of the Commissioners felt
bromoprophyl) phosphate and which is in-
the letter and its lengthy appendix 5 were
terstate commerce on April 8, 1977 or
impressively worded, but they were unsure
which is introduced into interstate com-
of his conclusions. It was decided to refer
merce after that date or which has not
the letter to one Rosenthal (first name not
yet been washed, (even if it has been sold
given) for his opinion. Then followed this
before that date;) and
dialogue at page 74 of the transcript.
4. Inclusion of the word "proposes" must have
knowledgements" he thanks, among others,
been a "Freudian Slip", since this would have
Robert Harris (of the Environmental Defense
been the proper way to give notice and begin a
Fund) for help. This is the same Dr. Robert
rule making process. This was changed by
Harris who presented the case for EDF in other
correction dated April 13, 1977, FR 21274, leav-
appearances before CPSC at which no repre-
ing out "proposes to".
sentatives of parties manufacturing TRIS, chil-
dren's sleepwear or retailing the same were
5. The appendix contains information support-
present.
ing the conclusions of Ames and under "Ac-
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
423
Cite as 434 F.Supp. 416 (1977)
"Mr. Clay (member of the office of Public
der 15 U.S.C. § 1274 upon the apparel man-
Affairs of CPSC): And I don't know how
ufacturers, was improper and should be ex-
long it will take.
panded to include TRIS-treated fabric, fiber
Commissioner Byington: There is [sic] a
and yarn incorporated in or intended to be
couple of ways to do it. That he could
incorporated into children's wearing appar-
either have a chance to read this letter
el. The presiding judge in that case, on his
and have some of his people check a
own motion, indicated that some represent-
couple of things out.
ative of the fabric manufacturers should be
Mr. Clay: He has seen the letter.
before the court and in effect interplead
Commissioner Byington: And talk to any
American Textile Manufacturers Institute
of the Commissioners individually about
(ATMI) a non-profit corporation whose
it or write a memorandum to the Com-
membership includes Springs and more
mission on the letter.
than 190 other textile manufacturers. This
Commissioner Pittle: That is okay.
intervention was not on behalf of Springs,
Commissioner Byington: A memorandum
or any particular members of the ATMI,
is a hell of a lot worse. It is going to
and was not authorized by Springs. It was
become a part of the record. And he is
an action by the court that ATMI under the
going to want to take a lot more time to
circumstance was compelled to accept. In
write a memorandum than he would give
that action (Civil Action No. 77-682 in the
you in an off-the-top-of-the-head
District Court for the District of Columbia)
Mr. Clay: He is very sensitive to what he
the Judge issued an Order dated May 3,
1977 finding that CPSC had acted arbitrari-
is going to be saying.
ly and capriciously in too narrowly defining
Commissioner Byington: Because the
"banned hazardous substances" in its April
memorandum will find itself in front of a
8, 1977 ban on the sale of certain TRIS-
judge. A telephone conversation that he
treated wearing apparel by placing the en-
is willing to discuss with you the pros and
tire economic burden resulting from the
cons of any of the paragraphs in there is
ban upon manufacturers of children's wear-
a different thing.
ing apparel, and the Court extended the
But I would suggest that we wait until
ban to include all fabric, yarn or fiber
tomorrow afternoon or Wednesday and
which contains TRIS and which is used or
let any of the Commissioners just kind of
intended to be used in children's wearing
chat with Bob."
apparel.
19. At the April 4 meeting Commission-
21. As a result of this Order, CPSC on
ers and members of the staff felt that the
May 5. 1977. published the Order in the
total recall of TRIS treated children's sleep-
Federal Register, page 22878, and cited the
wear could reach 120,000,000 units and as
Order as the authority to extend the ban
much as $900,000,000. In 42 Federal Regu-
and then complied with the Order by
lations 18852 the Commission stated that it
amending the original ban to include all
estimated that there were approximately
fabric, yarn or fiber containing TRIS and
20,000,000 garments or 7,000,000 yards of
used or intended for use in children's wear-
fabric in the "pipeline" between the fabric
ing apparel.
manufacturer, the garment manufacturer,
22. On or about May 12, 1977, the Unit
the retailer and the purchaser.
ed States Court of Appeals for the District
20. On April 20, 1977, the American Ap-
of Columbia stayed the District Court's Or-
parel Manufacturing Association (AAMA)
der and the Commission's May 5 ban.
brought suit against CPSC in the United
Thereafter on May 19 said Court of Appeals
States District Court for the District of
lifted the stay and vacated the district
Columbia contending that the Order of the
court's Order upon representation of the
Commission banning TRIS, which put the
Commission that it would take prompt and
entire economic burden for repurchase un-
decisive action in the matter, the Commis-
424
434 FEDERAL SUPPLEMENT
sion having indicated to the Court that it
straining order of May 24, 1977 had been
would expand the ban pursuant to its own
filed, the Commission expanded the ban
authority rather than under the Judge's
again and this time preceded it with a
May 3 Order.
lengthy history, explanation and certain
23. On Friday, April 22, 1977, represent-
findings, which are found in Federal Regis-
atives of the Independent Cutters and Sew-
ter, Volume 42, No. 105 at page 28060. The
ers of Children's Sleepwear met with the
ban itself reads the same as that published
Commission and submitted a petition to re-
on May 5, but the statutory findings pre-
consider the form of the Commission's April
ceding the ban give the statutory defini-
8 ban to include fabric, yarn and fiber. On
tions of "hazardous substance", "toxic" and
April 26 the Commission received a letter of
"banned hazardous substance" and go on to
EDF requesting similar extension of the
explain reasons why the Commission had
ban. In neither case did the Commission
worded the ban in the manner set forth.
notify Springs or any representative of the
At 28063 it states:
manufacturers or producers, who might be
"There were other important reasons, be-
adversely affected by these petitions, that
sides washing by consumers, why the
such petitions had been filed or were under
Commission framed its ban in the manner
consideration by the Commission.
it did. These include the massive mar-
24. On the same day, Friday, April 22,
ketplace disruption that such a ban would
1977, the Commission held an executive ses-
undoubtedly involve; the increased and
sion to consider the petition filed that day,
needless anguish that the parents of chil-
and to also consider what action should be
dren who have been exposed to the
taken in relation to the matter pending
washed clothing and fabric would feel;
before the district court in the District of
and the practical difficulties associated
Columbia. A transcript of this executive
with tracing and repurchasing approxi-
session, which has been marked "restricted
mately 120 million items that are years
data" and "confidential" was produced by
old and often lacking identifying labels.
CPSC upon motion of the plaintiff, for in
As already mentioned, sections 2(f)(1)(A)
camera inspection by the Court. The Court
and 2(g) of the FHSA defined the terms
finds that the information revealed by this
'hazardous substance' and 'toxic'. The
hearing is important to the case and is
Commission believes that the TRIS prod-
making the transcript a part of the record
ucts it has banned, on April 8 and in the
as the Court's Exhibit No. 1.
order issued below, fall clearly within
25. It is obvious from reading the actual
both of those definitions. Since they are
language of the commissioners that they
also intended for use by children, they are
considered "interpretations" to be handled
banned by section 2(q)(1)(A) which
by press releases. That these "interpreta-
defines the term 'banned hazardous sub-
tions" would be handled by Commission ac-
tance'. As the legislative history states,
tion upon recommendation by its general
[t]oys or other articles intended for use
counsel in order to clear up confusion that
by children which bear or contain a haz-
had resulted from its April 8 ban. It is also
ardous substance are banned by the lan-
obvious from this transcript that the Com-
guage of the bill itself
(Sen-
mission was of the opinion that the Judge
ate Report No. 1551, 89th Cong., 2nd
handling the AAMA case was going to ex-
Sess., pg. 2).
tend the ban to fabric, yarn and fiber and
The Commission has the discretion under
their concern was whether to submit lan-
section 3(a) of the FHSA, to conduct a
guage of a proposed expansion of the ban to
rulemaking procedure before it declares a
the Judge, or to await his Order and allow
substance to be a hazardous substance.
the Order to speak for itself.
This provision is available for use '[w]hen-
26. On June 1, 1977, after the present
ever in the judgment of the [Commis-
action was begun and the temporary re-
sion] such action will promote the objec-
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
425
Cite as 434 F.Supp. 416 (1977)
tives of this Act by avoiding or resolving
cause substantial illness based upon their
uncertainty as to its application
toxicity must be banned without any de-
If the Commission had any uncertainty
lay."
about whether the TRIS products were
27. In the statutory findings accompa-
hazardous substances, it would have con-
nying the April 8 ban there was no finding
ducted a rule-making procedure accord-
that the evidence supporting the risk of
ing to the procedures described in sec-
illness presented by TRIS products was
tions 701(e)(f), and (g) of the Federal
overwhelming. In the background infor-
Food, Drug and Cosmetic Act, as required
mation set forth in the April 8 and the June
by § 3(a)(2) of the FHSA.
1 bans there is continued reference to infor-
The Commission found, however, that the
mation supplied by Environmental Defense
evidence supporting the risk of illness
Fund, codefendant in the present case,
presented by the TRIS products is over-
Hooper and Ames, a research associate and
whelming. The two-year NCI feeding
professor of biochemistry at the University
study shows the potency of TRIS as a
of California in Berkeley to the report of
carcinogen in animals. The strong link
the National Cancer Institute, Bureau of
between animal carcinogens and human
Bio-Medical Science, a division of CPSC,
carcinogens is supported by numerous au-
and reports from Dr. Harris of EDF. None
thorities. The available tests concerning
of which have been tested by cross exami-
absorption of TRIS through the skin are
nation and are ex parte communications.
persuasive and the resulting risk assess-
28. That on September 27, 1973, the
ments performed by NCI have enormous
Commission published in the Federal Regis-
implications for the health of children
ter, 38 Fed.Reg. 27012 (a regulation codified
who would continue to wear TRIS-treat-
as 16 C.F.R. § 1500.3(c)(2)) which prescribes
ed clothing. The fact that the cases of
a test for determining whether a substance
cancer will not appear immediately does
is toxic within the meaning of § 1261(g),
not minimize the seriousness of the
and this regulation has remained in force at
present risk.
all times thereafter and is the only publish-
Separate from the question of a proceed-
ed regulation in the Commission setting
ing under section 3(a) of the FHSA, there
forth the test for determining whether a
is the consideration that the Administra-
substance will be determined "toxic" by the
tive Procedure Act imposes requirements
Commission. This publication was obvious-
on agencies for notice of proposed rule-
ly an interpretation since it set forth the
making, opportunity for public participa-
number of white rats or rabbits to be used
tion, and a delayed effective date (5
in various experiments, the size or weight
U.S.C. 553). However, these require-
of such animals and the effect of the sub-
ments are not applicable to interpretive
stance upon them in order to be labeled
rules or general statements of policy and
"toxic". This publication also gave defini-
are therefore not applicable to the inter-
tions for "irritant," "strong sensitizer",
pretation announced in this document.
"flammable", "extremely flammable", "ex-
Even if the rules were to be considered
tremely flammable contents of self-pressur-
general rulemaking, the Commission for
ized container", "substantial personal injury
good cause finds that notice and public
or illness", "proximate results" and other
comment and a delayed effective date are
terms which needed to be more fully
contrary to the public interest because
defined. However, these interpretations
the statutory intent and structure of the
and definitions did not attempt to define
FHSA is that children's articles that may
any particular substance, element or article
6. CPSC in this June 1st publication was obvi-
the D.C. Court. This language of June 1st is
ously trying to strengthen its case in this Court
simply a self-serving declaration set forth in
and revive its ban which had already been
the Federal Register.
corrected twice and expanded once by order of
426
434 FEDERAL SUPPLEMENT
as being toxic, hazardous or a banned haz-
fabric containing TRIS and that any contin-
ardous substance under the Act, but just
ued sale of the fabric was prohibited and
explained certain requirements and defini-
subject to penalties provided by law and
tions.
advising that inspection of "randomly se-
29. That the TRIS regulation published
lected firms" would be conducted by the
April 8, 1977 and all amendments and addi-
Commission to insure compliance with the
tions thereto are based in part on a finding
ban. This letter also threatened injunction
by the Commission that TRIS is a "toxic"
and/or criminal prosecution in the event a
substance under § 1261(g) and a "hazardous
firm did not initiate appropriate corrective
substance" under § 1261(f)(1)(A), but CPSC
action.
did not follow the statutes in making these
34. That on or about May 17, 1977, the
findings.
Commission filed an action against F. W.
30. That before adopting and publishing
Woolworth Co. in the United States District
any of the TRIS regulations CPSC did not
Court for the Southern District of New
publish notice of the proposed regulation in
York alleging that Woolworth had contin-
the Federal Register, did not afford Springs
ued to sell TRIS-treated children's wearing
an opportunity to present its views thereon
apparel in violation of the Commission's
and did not give any type of notice, that
April 8 ban. This action resulted in an
could be considered "public notice" of its
entry of final judgment, which was in ef-
actions or intended actions.
fect a consent order enjoining Woolworth
31. That on May 9, 1977, Springs Mills
from selling such articles and requiring
tendered to CPSC for filing at its office in
Woolworth to reimburse CPSC $5,000 to
Washington, D.C. plaintiff's "objections to
cover the cost of the action. In said action
statutory interpretation and request for
it was alleged that "On April 8, 1977, the
public hearing", and CPSC has refused to
Commission published an Order declaring
accept these objections for filing.
the following children's wearing apparel
32. That since the publication of the
and related articles and products treated
TRIS regulation on April 8, 1977 and the
with TRIS are 'banned hazardous sub-
subsequent amendments and additions
stances'
"
(emphasis added).
thereto CPSC has failed to afford Springs a
35. The final judgment of the Court for
hearing on its objections to the TRIS regu-
the Southern District of New York also
lation, has failed to accept for filing the
objections of Springs to the regulation and
refers to the April 8 action of the CPSC as
request for public hearing, has failed to
an "order" and later as a "regulation"."
publish a notice in the Federal Register
36. That the action by CPSC in adopting
specifying those parts of the TRIS regula-
the TRIS ban and the amendments thereto
tion stayed by the filing of objections of the
has caused havoc in the children's sleepwear
plaintiff, has failed to recognize any possi-
market and generated confusion, lawsuits
ble stay of the regulation by the objection
and uncertainty among all who retail these
and has failed to take any steps to cause a
products, manufacture such products or
public hearing to be convened for the pur-
manufacture the fabric used in such prod-
pose of receiving evidence on the issues
ucts. CPSC admits litigation among the
raised by the objections.
various segments of this industry could go
33. That on April 13, 1977, Richard E.
on for years as a result of the Commission's
Rapps, acting associate executive director
action which invokes the repurchase provi-
for compliance and enforcement dispatched
sions of § 1274. That the loss to Springs as
a letter to Springs advising it of the ban on
a result of the CPSC TRIS ban will total at
all children's wearing apparel made from
least $2,000,000.00.
7. The U.S. Attorney for the Southern District of
pretation", which is the label CPSC is trying to
New York knew he was enforcing a CPSC
sell in the District of South Carolina.
regulation, rule or order and not some "inter-
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
427
Cite as 434 F.Supp. 416 (1977)
CONCLUSIONS OF LAW
result of any customary or reasonably
A. This action is brought under the laws
foreseeable handling or use, including
and under the Constitution of the United
reasonably foreseeable ingestion by chil-
States. It seeks declaratory judgment and
dren."
the Court has jurisdiction of all parties pur-
Various words used in this definition are
suant to 28 U.S.C. §§ 1331, 1337, 1346 and
further described, but only "toxic" is appli-
2201. The venue is properly laid in this
cable to this case. § 1261(g) provides:
district.
"The term 'toxic' shall apply to any sub-
B. The basic issue is whether plaintiff
stance (other than a radioactive sub-
has been denied due process of law because
stance) which has the capacity to produce
of actions taken by the Consumer Product
personal injury or illness to man through
Safety Commission in declaring TRIS a
ingestion, inhalation, or absorption
"banned hazardous substance" within the
through any body surface."
meaning of 15 U.S.C. § 1261(q)(1)(A) in not
Section 1261(q)(1) provides:
conducting a rule-making hearing with
"The term 'banned hazardous substance'
proper notice to those affected by the pro-
means (A) any toy, or other article in-
posed ban and an opportunity for it to
tended for use by children, which is a
appear, present testimony and cross-exam-
hazardous substance, or which bears or
ine witnesses presented by the Commission
contains a hazardous substance in such
and test the weight and sufficiency of the
manner as to be susceptible of access by a
evidence considered by the Commission.
child to whom such toy or other article is
This claimed denial of due process could
entrusted; or (B) any hazardous sub-
result from either an unconstitutional inter-
stance intended, or packaged in a form
pretation placed upon the law by CPSC or
suitable, for use in the household, which
from a finding that the statute itself is
the Secretary by regulation classifies as a
unconstitutional.
'banned hazardous substance' on the basis
In the brief of CPSC the issue is stated
of a finding that, notwithstanding such
succinctly:
cautionary labeling as is or may be re-
"The Commission has not engaged in for-
quired under this chapter for that sub-
mal rule-making process provided for by
stance, the degree or nature of the haz-
15 U.S.C. § 1262(a)(2) or 21 U.S.C.
ard involved in the presence or use of
§ 371(e), nor has it afforded Springs Mills
such substance in households is such that
an opportunity for a hearing.
the objective of the protection of the
Only the legal issue of whether the Com-
public health and safety can be adequate-
mission was required to engage in rule-
ly served only by keeping such substance,
making in accordance with 15 U.S.C.
when so intended or packaged, out of the
§ 1262(a)(2) remains for resolution by this
channels of interstate commerce: Provid-
Court."
ed, That the Secretary, by regulation, (i)
C. The Federal Hazardous Substances
shall exempt from clause (A) of this para-
Act, 15 U.S.C. §§ 1261-1274 at
graph articles, such as chemical sets,
§ 1261(f)(1)(A) defines the term "hazardous
which by reason of their functional pur-
substance" as follows:
pose require the inclusion of the hazard-
"(1)(A) Any substance or mixture of sub-
ous substances involved or necessarily
stances which (i) is toxic, (ii) is corrosive,
present an electrical, mechanical, or ther-
(iii) is an irritant, (iv) is a strong sensitiz-
mal hazard, and which bear labeling giv-
er, (v) is flammable or combustible, or (vi)
ing adequate directions and warnings for
generates pressure through decomposi-
safe use and are intended for use by
tion, heat or other means, if such sub-
children who have attained sufficient ma-
stance or mixture of substances may
turity, and may reasonably be expected,
cause substantial personal injury or sub-
to read and heed such directions and
stantial [injury] during or as a proximate
warnings, and (ii) shall exempt from
428
434 FEDERAL SUPPLEMENT
clause (A), and provide for labeling of,
(B) the scope of judicial review of such
common fireworks (including toy paper
order shall be in accordance with the
caps, cone fountains, cylinder fountains,
fourth sentence of paragraph (2) and
whistles without report, and sparklers) to
with the provisions of paragraph (3) of
the extent that he determines that such
section 348(g) of Title 21." (emphasis
articles can be adequately labeled to pro-
added)
tect purchasers and users thereof.
These references are to procedures set up
(2) Proceedings for the issuance, amend-
under the Food, Drug and Cosmetic Act.
ment, or repeal of regulations pursuant
[1] Under the rule-making procedures
to clause (B) of paragraph (1) of this
of the Food, Drug and Cosmetic Act, that
subsection shall be governed by the provi-
are incorporated by Congress in the Federal
sions of § 371(e), (f), and (g) of Title 21:
Hazardous Substances Act, all persons ad-
Provided, That if the Secretary finds that
versely affected by the proposed TRIS reg-
the distribution for household use of the
ulations are entitled to advance notice of
hazardous substance involved presents an
rule making (section 371(e)(1)), a delayed
imminent hazard to the public health, he
effective date of the regulation (section
may by order published in the Federal
371(e)(1)), the right to file objections within
Register give notice of such finding, and
30 days (371(e)(2)), the right to automatic
thereupon such substance when intended
stay of the effective date of portions of any
or offered for household use, or when so
regulations to which objections are filed
packaged as to be suitable for such use,
(section 371(e)(2)), the right to a public
shall be deemed to be a 'banned hazard-
hearing on such objections and a decision
based on a fair evaluation of all the evi-
ous substance' pending the completion of
dence of record at such hearing, (section
proceedings relating to the issuance of
348(f) and 371(e)(3)) and to judicial review
such regulations."
under 348(g)(2).
Regulations declaring hazardous sub-
CPSC contends that under § 1261(q)(1)(A)
stances are covered by § 1262 of the Act,
and § 1262(a)(1) it has authority to declare
paragraph (a)(1) provides:
an article a "banned hazardous substance"
"Whenever in the judgment of the Secre-
without going through the steps required
tary such action will promote the objec-
for the issuance of regulations set forth in
tives of this chapter by avoiding or re-
the Food, Drug and Cosmetic Act. The
solving uncertainty as to its application,
Commission, therefore, claims the right to
the Secretary may by regulation declare
declare without any notice, hearing or op-
to be a hazardous substance, for the pur-
portunity of interested parties to comment
poses of this chapter, any substance or
that an article is a "banned hazardous sub-
mixture of substances which he finds
stance", if the Commission concludes from
meets the requirements of subparagraph
testimony and statements not subject to
(1)(A) of section 1261(f) of this title.
cross examination, from data not subject to
(2) Proceedings for the issuance, amend-
public scrutiny or examination, and from ex
ment or repeal of regulations under this
parte conversations and communications
from lawyers, physicians and research per-
subsection and the admissibility of the
sonnel interested in obtaining a ban, that
record of such proceedings in other pro-
such article is or contains a hazardous sub-
ceedings, shall in all respects be governed
stance and is susceptible to access by a
by the provisions of § 371(e), (f), and (g)
child. The Commission further asserts that
of Title 21, except that-
under § 1262(a)(1) the Commission has the
(A) the Secretary's order after public
discretion as to whether to grant a hearing
hearing (acting upon objections filed to
or just issue an edict. For its own conve-
an order made prior to hearing) shall be
nience, and to prevent the application of
subject to the requirements of section
either the Food, Drug and Cosmetic Act or
348(f)(2) of Title 21; and
the rule-making provisions of the Adminis-
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
429
Cite as 434 F.Supp. 416 (1977)
trative Procedure Act, 5 U.S.C. § 553 the
much costly litigation, with different
Commission refers to these orders, which
courts and juries reaching different re-
have the effect of law, as "interpretations".
sults, unless some mechanism for authori-
The Commission, which has the duty of
tatively resolving this uncertainty short
requiring adequate labels and warnings to
of litigation is devised. We realize that,
be affixed to articles, should not apply a
on the one hand, in view of the broad
false label to its own action in an effort to
sweep of the bill, and because of the
deprive the plaintiff of its right to a hear-
constant development of new useful but
ing and constitutional due process. If
hazardous substances suitable for house-
CPSC thinks it has authority under either
hold use, the inclusion of a statutory list
,§ 1261(q)(1)(A) or § 1262(a)(1) to bypass the
of covered substances (an analogy to the
rule-making procedure, why has it expend-
list in the Federal Caustic Poison Act)
ed so much energy trying to convince the
or, the limitation of coverage to sub-
parties, the public and this Court that the
stances listed by regulation would not be
TRIS ban is merely an interpretation?
feasible. And while, on the other hand,
we would prefer elimination of the "if"
The Commission relies upon the legisla-
clause altogether from the point of facili-
tive history of the Federal Hazardous Sub-
ty of enforcement, we recognize that the
stances Act and particularly a letter from
inclusion of some such clause can be justi-
the Secretary of Health, Education and
fied.
Welfare dated August 20, 1959 to the
It is feasible, however, and we strongly
Chairman of the House Committee on In-
urge, that the committee include in the
terstate and Foreign Commerce, which is
bill provisions deeming a substance to be
printed in U.S.Code Congressional and Ad-
hazardous where the Secretary by regula-
ministrative News 1960-179 at page 2849
tion declares it to be such upon the basis
under the heading of "Declaratory Regula-
of a finding that it meets the require-
tions as to Coverage". The Secretary of
ments of the bill's basic definition of 'haz-
HEW is expressing his concern about the
ardous substance'. The Secretary should
"if clause" contained in § 1261(f)(1)(A).
be authorized to take such action whenev-
The term "hazardous substance" is defined
er in his judgment this will promote the
followed by this language:
objectives of the bill by avoiding or re-
if such substance or mixture
solving uncertainty. (The failure of the
of substances may cause substantial per-
Secretary to take such action, of course,
sonal injury or substantial illness during
should not absolve anyone from the con-
or as a proximate result of any customary
sequences of noncompliance with the la-
or reasonably foreseeable handling or use,
beling requirements of the bill in the case
including reasonably foreseeable in-
of a substance which is 'hazardous' under
gestion by children."
the basic definition.) We would not ob-
The letter of the Secretary states:
ject to making the issuance, amendment,
"It is apparent that, even with the above-
or repeal of these declaratory regulations
suggested clarifications, the application
subject to procedural safeguards [with
of the second part (i.e. the so-called "if"
opportunity for administrative hearing,
clause) of the basic definition of 'hazard-
and for judicial review on the basis of the
ous substance' in the bill is so largely
hearing record] such as those contained in
dependent on judgmental factors-e. g.,
sections 701(e)-(g) of the Federal Food,
what is 'reasonably foreseeable'-that it
Drug and Cosmetic Act." (emphasis add-
will lead to considerable uncertainty and
ed)
8. Formerly 15 U.S.C. §§ 401 et seq. now re-
9. The language in brackets was omitted from
pealed in the body of the statute listed various
EDF's version of this letter as set forth in its
"dangerous caustic or corrosive substances"
brief.
covered by said act by both name and chemical
formula, all of which were commonly known
poisons.
430
434 FEDERAL SUPPLEMENT
[2] The continuous reference to "regula-
from the existing law, since the United
tion" in the applicable parts of the statute
States Government through the Commerce
and in the legislative history clearly indi-
Department originally required TRIS to be
cate the congressional intent that the Com-
used in children's sleepwear to meet anti-in-
mission proceed with rule-making proce-
flammatory standards set by the Depart-
dures, as set forth in the Food, Drug and
ment and TRIS was the only anti-inflam-
Cosmetic Act, and not attempt to make
matory product then available, capable of
final decisions having nationwide impact
meeting the requirements of the law. Now
without affording affected parties the basic
CPSC, another agency of the same govern-
requirements of due process.
ment, makes a drastic change by not only
[3] The Commission cannot fit its action
demanding that TRIS be no longer used in
banning TRIS within the exemption provid-
the process, but that the repurchase provi-
ed by the Administrative Procedure Act, 5
sions of 15 U.S.C. § 1274 become effective.
U.S.C. § 553(d)(2) as "interpretative rules
The degree of retroactivity and its impact
and statements of policy." Interpretative
are enormous, since merchants, manufac-
rules are statements as to what an adminis-
turers of TRIS treated pajamas and manu-
trative officer thinks the statute or regula-
facturers of fabric or fiber used therein
tion means,¹⁰ while "regulations", "substan-
must buy back products sold years ago.
tive rules" or "legislative rules" are those
Confusion and controversy engendered by
which create law, usually implementary to
practical difficulties of compliance with the
existing law. National Motor Freight Traf-
new rules are evident by the litigation that
fic Assn. V. U. S., 268 F.Supp. 90 (D.C.D.C.
has resulted, the confusion among the com-
1967). Under Continental Oil Co. V. Burns,
missioners as evidenced by the various tran-
317 F.Supp. 194 (D.C.Del.1970) and Ameri-
scripts of their meetings and their admis-
can Bancorp, Inc. V. Board of Governors,
sions that litigation between retailers, man-
509 F.2d 29 (8th Cir. 1974) four criteria
ufacturers and others in the children's
have been established to determine whether
sleepwear pipeline may go on for years.
agency action involves an interpretation or
a substantive regulation, as follows: (1) the
That any agency of the United States
complexity and pervasiveness of the rules
Government should try to hide such far
issued, (2) the drastic changes effected in
reaching and drastic measures under the
existing law by the rules, (3) the degree of
label of an "interpretation" is scandalous.
retroactivity and its impact and (4) the con-
It is particularly shocking when these same
fusion and controversy engendered by prac-
commissioners are in a position to pass upon
tical difficulties of compliance with the new
labels, warnings and brands placed upon or
rules.
accompanying articles in commerce within
this country. Their action is the most fla-
The TRIS bans issued by CPSC fit each
grant misbranding imaginable. The new
one of the above criteria. The Commission
TRIS ban is not an interpretation but a new
action banning TRIS is complex, as evi-
rule having the effect of a law with the
denced by the continuous press releases of
most far reaching consequences.
CPSC to explain it, and the fact that it has
on four occasions amended, corrected or ex-
[4] By finding TRIS-treated children's
panded the regulation published April 8.
sleepwear to be a "banned hazardous sub-
The regulation is pervasive since it is far
stance" the Commission set in motion the
reaching and influences every party han-
provisions of § 1274, one of the most drastic
dling TRIS. It represents a drastic change
procedures known to law. Congress could
10. The proper use of "interpretative rules" is
to a particular product, compound, chemical,
found in 16 C.F.R. 1500 where CPSC defines in
article or combination thereof.
detail the meaning of such words as: "toxic,"
"highly toxic," "irritant", "strong sensitizer",
11. § 1274 Repurchase of banned hazardous
etc. None of these definitions mention or refer
substances; procedure; definitions.
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
431
Cite as 434 F.Supp. 416 (1977)
not have provided such a remedy without
based on a fair evaluation of the entire
intending that it be used only after a full
record of the hearing" and must be accom-
due process hearing.
panied by a "statement setting forth in
[5] Defendants' argument that the
detail the findings and conclusions upon
Commission may declare an article a
which the order is based." Obviously, Con-
"banned hazardous substance" under
gress did not intend for matters under the
§ 1261(q)(1)(A) without first deciding that
Federal Hazardous Substances Act to be
it is a "hazardous substance" under
handled or decided on the basis of ex parte
§ 1261(f)(1)(A) is unpersuasive. The Court
communications with members of the Com-
is also unpersuaded by its argument that
mission or without effective notice so that
§ 1262(a)(1) gives the Commission the op-
objecting parties could appear, present evi-
tion of going through the rule-making proc-
dence and test the validity of the informa-
ess or of just issuing its mandate that some
tion presented. As Justice Frankfurter has
article is suddenly a "hazardous substance"
stated:
or a "banned hazardous substance".
Fairness can rarely be obtain-
This position is not supported by the lan-
ed by secret, one-sided determination of
guage of the statute or by the legislative
facts decisive of rights
[A
history. This history, mentioned above,
n]o better instrument has been devised
shows clearly that Congress intended the
for arriving at the truth than to give a
Secretary to act "by regulation" which
person in jeopardy of serious loss notice
would mean under the rule-making process.
of the case against him and opportunity
Congress also indicated its concern for the
to meet it." Joint Anti-Fascist Refugee
powers given CPSC by requiring rule mak-
Committee V. McGrath, 341 U.S. 123, 71
ing under the Federal Food, Drug and Cos-
S.Ct. 624, 95 L.Ed. 817.
metic Act rather than the Administrative
This fairness, which is another way of say-
Procedure Act in matters relating to haz-
ardous substances. The Administrative
ing due process, is completely lacking in the
Procedure Act allows certain rules to be
actions of CPSC banning TRIS.
made on a "notice and comment" basis, but
Defendants argue that a special rule ap-
§ 371(e), (f), and (g) of the Food, Drug, and
plies when the rights of children are in-
Cosmetic Act require a notice of a hearing,
volved and that (q)(1)(A) allows an immedi-
the right of the objecting party to cross
ate "banned hazardous substance" finding
examine witnesses presented by the Com-
on toys or other articles intended for use by
mission and to present evidence in opposi-
children without first finding that an arti-
tion thereto, and other evidence which may
cle is a "hazardous substance" as defined in
be relevant or material to the issues, and
§ 1261(f)(1)(A). The fact that children may
the Commission is required to issue an Or-
be involved does not obviate the necessity
der based solely 12 on the evidence of record
that CPSC by proper rule-making proce-
at the public hearing. This order "shall be
dure determine that an article is a "hazard-
(a) In the case of any article or substance sold
turn of such article or substance in connec-
by its manufacturer, distributor, or dealer
tion with its repurchase, and
which is a banned hazardous substance
(C) if the manufacturer requires the return of
(whether or not it was such at the time of its
such article or substance in connection with
sale), such article or substance shall in accord-
his repurchase of it in accordance with this
ance with regulations of the Secretary, be re-
purchased as follows:
paragraph, reimburse that person for any
(1) The manufacturer of any such article or
reasonable and necessary expenses incurred
substance shall repurchase it from the person
in returning it to the manufacturer.
to whom he sold it, and shall-
Subparagraph 2 provides for repurchase by a
(A) refund that person for the purchase price
distributor and subparagraph 3 provides for
paid for such article or substance,
repurchase by a retailer.
(B) if that person has repurchased such article
or substance pursuant to paragraph (2) or
12. Not one that is based on ex parte contacts
(3), reimburse him for any amounts paid in
and communications with the Commissioners.
accordance with that paragraph for the re-
432
434 FEDERAL SUPPLEMENT
ous substance", before it may go on to find
ing that CPSC use the rule-making proce-
that it is a "banned hazardous substance."
dure provided therein and outlined in 21
The due process requirements of the Con-
U.S.C. § 371. All this requires is that there
stitution do not fly out of the window when
be a proper finding, after adequate notice
the rights of children come in the door.
and a fair hearing, that an article is a
Even a person, who admits committing the
"hazardous substance" before proceeding on
most grievous crime against a child, is still
to the next determination-"banned haz-
entitled to due process of law, and the fact
ardous substance".
that a child may use a toy or an article does
Any other construction would allow the
not deny due process protection to the re-
commissioners to deprive hundreds of per-
tailer, manufacturer or supplier of a compo-
sons of millions of dollars without a hear-
nent part of such article. The obvious in-
ing, without notice of a hearing, without an
tent of Congress was that after a proper
opportunity to present evidence, without
finding 13 of "hazardous substance", if the
the opportunity to cross examine and other-
toy or article was obviously intended for
wise test the credibility and validity of evi-
use by children, then the term "banned
dence presented, and such an interpretation
hazardous substance" could be applied to it
would also allow and condone the closed
and thereby invoke the repurchase provi-
meetings between proponents of such a ban
sions of § 1274.
and the commissioners, together with sub-
mission of ex parte communications, mate-
[6] To interpret § 1261(q)(1)(A) and
rial and information to a quasi-judicial
$ 1262(a)(1) as urged by the defendants
body, when it is deliberating an important
would require a finding that Congress had
case, which is exactly what has happened in
enacted a patently unconstitutional law.
this matter.
This construction must be avoided by the
Court when possible.
The Supreme Court has carefully protect-
"It is axiomatic that statutes are to be
ed the right to due process. See Fuentes V.
interpreted to avoid constitutional issues
Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32
unless their plain and explicit meaning
L.Ed.2d 556 (1972). The Supreme Court
found the replevin laws of Florida and
requires that constitutional issues be met
and decided. U. S. V. Perez, 488 F.2d
Pennsylvania unconstitutional as being vio-
lative of the due process clause, since no
1057, 1059 (4th Cir. 1974). See also Inter-
national Association of Machinists V.
hearing was afforded to the possessor of
personal property prior to the seizure of
Street, 367 U.S. 740 (1961) at page 749, 81
this property, even though seizure was al-
S.Ct. 1284, 6 L.Ed.2d 1141:
lowed under state law, was accompanied by
Federal statutes ought to be so construed
a bond to cover any damages resulting
as to avoid serious doubt of their consti-
therefrom, and seizure was under a condi-
tutionality. 'When the validity of an Act
tional sales contract whereby the possessor
of Congress is drawn in question, and
lacked full legal title to the goods. The
even if a serious doubt of constitutionali-
goods seized in Fuentes were a stove, a
ty is raised, it is a cardinal principal that
stereo, a table and a bed. They were not
this Court will first ascertain whether a
the necessities of life, and as the Court
construction of the statute is fairly possi-
pointed out, the possessor "lacked full title
ble by which the question may be avoid-
to the chattels; and their claim even to
ed'. Crowell V. Benson, 285 U.S. 22, 62,
continued possession was a matter in dis-
52 S.Ct. 285, 76 L.Ed. 598, 619."
pute." However, the Court struck down
[7] The Federal Hazardous Substances
the state statutes as not providing a notice
Act, particularly § 1261(q)(1)(A) can fairly
and an opportunity to be heard before los-
be interpreted as meeting the due process
ing only temporary possession of these
requirements of the Constitution by requir-
household items. Fuentes also held that it
13. Under the procedures set forth in the Federal Food, Drug, and Cosmetic Act.
SPRINGS MILLS, INC. V. CONSUMER PRODUCT SAFETY
433
Cite as 434 F.Supp. 416 (1977)
was fundamental that there be a right to
Commission, 555 F.2d 677 (9th Cir.1977).
notice and an opportunity to be heard at a
That case resulted from CPSC banning all
meaningful time and in a meaningful man-
self-pressurized products intended or suit-
ner, and this meant before seizure. At
able for household use and containing vinyl
page 81, at page 1994 of 92 S.Ct. it is
chloride. These articles were banned under
stated:
§ 1261(q)(1)(B). The Commission followed
"If the right to notice and a hearing is to
only the first step of the rule-making proc-
serve its full purpose, then, it is clear that
ess by publishing a proposed regulation
it must be granted at a time when the
banning such items and receiving com-
deprivation can still be prevented. At a
ments. In its report CPSC mentioned link-
later hearing, an individual's possessions
ing the deaths of industrial workers from
can be returned to him if they were un-
cancer of the liver to vinyl chloride expo-
fairly or mistakenly taken in the first
sure (although but one death had been re-
place. Damages may even be awarded to
ported) and citing certain laboratory experi-
him for the wrongful deprivation. But
ments conducted in a European University.
no later hearing and no damage award
Interested persons were invited to comment
can undo the fact that the arbitrary tak-
on the proposed regulation. After receiv-
ing that was subject to the right of proce-
ing nine comments, three of which were
dural due process has already occurred.
critical, the Commission promulgated its
'This Court has not
embraced
Order classifying as "banned hazardous
the general proposition that a wrong may
substances" all aerosol products containing
be done if it can be undone.' Stanley V.
vinyl chloride and intended or suitable for
Illinois, 405 U.S. 645, 647, 92 S.Ct. 1208,
household use. Pactra was one of the par-
1210, 31 L.Ed.2d 551, 556."
ties objecting to the ban and was denied a
It is important to realize that Fuentes in-
hearing. CPSC found the objections "prac-
volved a few household items, a small
tically void of reference to factual informa-
amount of money, a bond to cover any
tion which the Commission believed would
damages that might result and the possibili-
lead to a contrary conclusion." It decided
ty that the property would be returned. In
that Pactra had not stated "reasonable
the present case the Commission's action
grounds" necessitating a hearing and a
affects thousands of retailers, hundreds of
hearing was denied.
manufacturers, millions of articles and
many millions of dollars. The tragedy is
The 9th Circuit Court stated:
that unlike a replevin action, where the
"The procedural prerequisites to rulemak-
property may be returned, the action of the
ing under section 371(e) serve to impose a
CPSC has put the market in children's
discipline on the agency's decision-making
sleepwear in such a state of confusion and
process, forcing it to present ordered
disarray that the CPSC itself has no esti-
proof to support its position. These pro-
mate or idea of when the turmoil may end.
cedures permit affected parties to express
To prevent the Florida people from using
in a direct and participatory manner their
their replevin process without prior notice
opposition and criticism of governmental
and prior hearing, but to allow CPSC, with-
action before it becomes final. The pub-
out notice and a hearing, to ban TRIS-
lic, and the regulated industries, as well
treated children's sleepwear as a "banned
as the agency, develop a better under-
hazardous substance", invoking the repur-
standing of the problem at hand by fol-
chase provisions of § 1274, would be un-
lowing these procedures, and the result-
thinkable.
ing regulation may be a more refined and
This is not the first case in which CPSC
precise statement of agency policy. The
has attempted to avoid due process by by-
procedural restrictions imposed on the
passing the rule-making provisions of the
agency by section 371(e) are admittedly
Food, Drug and Cosmetic Act. See Pactra
severe, but they are stated with particu-
Industries, Inc. V. Consumer Product Safety
larity in the rule-making statute, and we
434 F.Supp.-10
434
434 FEDERAL SUPPLEMENT
can find no reason to dispense with these
ban and not the basic issue of the constitu-
procedures in this case. If the Commis-
tionality of such ban. The cases cited by
sion believes that a substance should not
the Commission in support of its res judica-
be used where it has been shown to be
ta argument are not applicable to the
potentially carcinogenic under intensive
present facts.
exposure conditions, its determination de-
This Court is particularly concerned by
serves thorough public examination. To
the number and type of ex parte communi-
implement that determination the agency
cations received and considered by the Com-
must therefore follow the procedures
mission during its deliberation of the TRIS
Congress has prescribed.
matter and strongly urges the commission-
The very absence of a formal record in
ers to read the recent case of Home Box
this case makes it difficult for us to eval-
Office, Inc. V. Federal Communications
uate the agency's assertion that no record
Commission (D.C.Cir. March 25, 1977), in
is needed or that the evidence on which it
which the Court of Appeals remanded a
relies is sufficient to support its determi-
decision to the FCC and required the ap-
nation. At oral argument, the agency
pointment of a Special Hearing Examiner
stated that its rule is supported by all of
to determine the nature and source of all ex
the files in its possession. The agency
parte pleas and other approaches made to
may not so neatly frustrate the formal
the Commission or its employees after the
judicial review intended by Congress
issuance of the first notice of proposed rule
when it enacted the strict procedural re-
making. If the commissioners of CPSC are
quirements of section 371(e). In the in-
to make decisions drastically affecting the
stant case the statute specifically predi-
lives and businesses of citizens, they should
cates judicial review on the existence of a
conduct their quasi-judicial proceedings in
formal record and further requires that
public, consider only the evidence produced
that record be established by evidence
at such public hearings and refrain from all
adduced at a public hearing.
ex parte communications. They may not
Both the failure to hold public hearings
avoid this ethical requirement by failing or
and the failure to produce the formal
delaying the filing of a petition so as to
record mandated by the statute are de-
prevent the public from knowing a matter
fects that invalidate the Commission's
is under consideration. This was done in
regulation in this case. Accordingly, the
the present case, since CPSC gave no notice
Commission's order promulgating 16
of the March 1976 petition of EDF, but
C.F.R. § 1500.1710(a)(10) is set aside."
continued to obtain information, which was
used in its final decision, without providing
An Order of clarification was filed by the
an opportunity to interested parties to par-
Pactra court on June 13, 1977, which did not
ticipate.
change the effect of the decision.
It is evident from the methods used by, as
[8] The Commission's argument that
well as the legal procedures avoided by,
Springs and American Textile Manufactur-
CPSC in the Pactra case and in the present
ers Institute are attempting to split a cause
case that the Commission does what it
of action between the AAMA case in the
pleases with little concern for the restric-
District of Columbia and the case in this
tions or limitations placed upon it by the
court is without merit. The ATMI was
Congress or the Constitution. These con-
brought into the AAMA case at the insis-
tinuing acts are classic examples of the
tence of the Judge, on very short notice and
arrogance of bureaucracy and the abuse of
the issues are not the same. ATMI and
power. They are confirmation of Justice
Springs Mills are not in privity with one
Frankfurter's warning in NcNabb V. U. S.,
another, so the action of one does not bind
318 U.S. 332, 347, 63 S.Ct. 608, 616, 87 L.Ed.
the other. Springs did not authorize the
819 (1943): "The history of liberty has
ATMI to act for it in the AAMA case,
largely been the history of observance of
which involved only the extent of the TRIS
procedural safeguards."
WESTCHESTER GEN. HOSP., INC. V. DEPT. OF H. E. W.
435
Cite as 434 F.Supp. 435 (1977)
[9] Since CPSC has failed to follow the
against Department of Health, Education
procedural safeguards enacted by Congress,
and Welfare and fiscal intermediary of De-
has failed to provide a full rule-making
partment, seeking to prevent fiscal interme-
hearing with respect to any of its TRIS
diary from disclosing plaintiff's medicare
bans, it has deprived the plaintiff of due
cost reports, and plaintiff moved for prelim-
process of law. Therefore, all of such TRIS
bans and the amendments thereto are null
inary injunction. The District Court,
and void.
Charles R. Scott, J., held that: (1) plaintiff
established substantial likelihood of success
Accordingly, its attempts to amend 16
C.F.R. § 1500.18 by either adding a new
on merits of its claim that regulation re-
subsection (d) or by later amending said
quiring disclosure of medicare cost reports
subsection (d) to include as a "banned haz-
was invalid, in view of fact that it was
ardous substance" children's wearing appar-
likely that such disclosure would violate
el made from fabric containing TRIS as
statute prohibiting disclosure by any feder-
well as all fabric, yarn or fiber containing
al employee of confidential trade and finan-
TRIS used or intended for use in children's
cial information supplied federal agencies,
wearing apparel, beginning with its publica-
and (2) plaintiff was entitled to preliminary
tion in the Federal Register of April 18,
injunction preventing fiscal intermediary
1977 and running through its publication in
from disclosing plaintiff's medicare cost re-
said register of June 1, 1977, must be and
port, in view of fact that plaintiff estab-
the same are hereby set aside.
lished substantial likelihood of success on
IT IS FURTHER ORDERED that the
merits of its claim, disclosure of such report
Consumer Product Safety Commission be
would adversely affect plaintiff's competi-
and it is hereby enjoined and restrained
from attempting to apply or enforce
tive position, no remedy was available for
against any party, any article, fabric, yarn
such harm to plaintiff, no harm would re-
or fiber any of its previously adopted TRIS
sult to fiscal intermediary as result of such
regulations until such time as the Commis-
injunction, and such injunction would result
sion shall comply with the hearing proce-
in no disservice to public interest.
dures set forth in 21 U.S.C. § 371(e), (f) and
Motion for preliminary injunction
(g).
granted.
AND IT IS so ORDERED.
Smort
KEY NUMBER SYSTEM
1. Injunction
136(3), 137(1, 2, 4)
In order to obtain preliminary injunc-
tive relief, plaintiff must satisfy each of
four criteria: (1) irreparable injury because
WESTCHESTER GENERAL HOSPITAL,
of unavailability of adequate remedy at
INC., Plaintiff,
law; (2) substantial likelihood of success on
V.
merits; (3) threatened injury to plaintiff
DEPARTMENT OF HEALTH,
outweighs any possible harm to defendant,
EDUCATION & WELFARE
and (4) granting preliminary injunction will
et al., Defendants.
not disserve the public interest.
No. 77-364-Civ-J-T.
2. Records
2
United States District Court,
Purpose of Freedom of Information
M. D. Florida,
Jacksonville Division.
Act is to make agency records more accessi-
ble to public. 5 U.S.C.A. § 552.
June 27, 1977.
3. Records
14
Provider of health care services to
Commercial or financial information is
medicare beneficiaries brought action
"confidential" within meaning of Freedom