Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-2-2005

Mahoney v. US Consumer Prod
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-3953




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                                                          NOT PRECEDENTIAL

                    UNITED STATES COURT OF APPEALS
                         FOR THE THIRD CIRCUIT


                                    No. 04-3953


               JEROME J. MAHONEY; REBECCA G. MAHONEY,
                    Husband and Wife, in Their Own Right,
                                                      Appellants

                                         v.

            U.S. CONSUMER PRODUCTS SAFETY COMMISSION;
            U.S. CONSUMER PRODUCTS SAFETY COMMISSION 1




                  On Appeal from the United States District Court
                     for the Eastern District of Pennsylvania
                           (D.C. Civil No. 04-cv-01833)
                    District Judge: Honorable Robert F. Kelly




                                Argued July 14, 2005

              Before: SLOVITER, McKEE and WEIS, Circuit Judges

                            (Filed: September 2, 2005)


Shanin Specter
Andrew S. Youman (Argued)
Kline & Specter, P.C.
Philadelphia, PA 19102

     Attorneys for Appellants
Peter D. Keisler
       Assistant Attorney General
Eugene M. Thirolf
       Director
Drake Cutini     (Argued)
       Trial Attorney
Office of Consumer Litigation
U.S. Department of Justice
Washington, D.C. 20044

John Gibson Mullan
      Acting General Counsel
      Of Counsel
Melissa V. Hampshire
      Attorney
U.S. Consumer Product Safety Commission
Bethesda, Maryland 20814

       Attorneys for Appellee


                                        OPINION


SLOVITER, Circuit Judge.

       This case arises from an administrative enforcement action brought by the United

States Consumer Products Safety Commission (“CPSC”) against the Daisy

Manufacturing Company (“Daisy”). On January 30, 2003, CPSC accepted a settlement

offer proffered by Daisy. Plaintiffs, Jerome J. Mahoney and Rebecca G. Mahoney, seek

to have the settlement agreement set aside.

                                              I.

       Because the parties are familiar with the factual and procedural background of this



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case, we refer only to those facts that are pertinent to our disposition. On October 30,

2001, the CPSC issued an administrative complaint against Daisy alleging that certain

models of its air powered rifles (popularly known as “BB guns”) presented a substantial

product hazard within the meaning of the Consumer Product Safety Act (“CPSA”), 15

U.S.C. §§ 2064(c), (d), and a substantial risk of injury to children within the meaning of

the Federal Hazardous Substances Act (“FHSA”), 15 U.S.C. §§ 1274(c)(1), (2). The

complaint targeted a latent defect in certain gun models — a BB could become lodged in

such a manner that the gun would appear empty; the lodged BB could then subsequently

dislodge and be fired, even though the user had not loaded the weapon.

         The administrative action was litigated through the discovery stage. On November

5, 2003, Daisy submitted a settlement offer to the CPSC. The offer was provisionally

accepted and posted for public comment in the December 10, 2003 issue of the Federal

Register. A total of twenty-one timely comments were received by the CPSC. Nineteen

supported the settlement and/or were critical of the administrative case, and two opposed

the settlement.1 On January 30, 2004, the CPSC accepted the provisional settlement as

final.

         The Mahoneys, whose son, Tucker Mahoney, died from an injury caused by the

latent defect in a Daisy BB gun, filed the present action in the District Court on April 28,




                     1
                      The Mahoneys submitted an untimely comment to the
              CPSC that was not considered by the Commission.

                                              3
2004, seeking to set aside the settlement because it failed to include a corrective action

plan requiring replacement, repair, or refund of the purchase price of the outstanding

guns.2 On September 30, 2004, the District Court granted CPSC’s motion to dismiss,

holding that plaintiffs did not have Article III standing and that the remedy chosen by the

CPSC was within the agency’s discretion and not subject to judicial review.

       The Mahoneys filed a timely notice of appeal.

                                             II.

       We review the District Court’s legal conclusions de novo. See, e.g., AT&T

Communications of N.J., Inc. v. Verizon N.J. Inc., 

, 168 (3d Cir. 2001);

Raymond Proffitt Found. v. U.S. Army Corps of Eng’rs, 

, 203 (3d Cir.

2003). Because we agree with the District Court that the CPSC’s decision to accept

Daisy’s settlement is not subject to judicial review, we will assume, without deciding, that

the Mahoneys have standing to bring the present case. Philadelphia Fed’n of Teachers v.

Ridge, 

, 323 n.2 (3d Cir. 1998).

        As a general principle, “[a] person suffering legal wrong because of agency

action, or adversely affected or aggrieved by agency action within the meaning of a

relevant statute is entitled to judicial review thereof.” 5 U.S.C. § 702. Certain agency

actions, however, are “committed to agency discretion by law.” 5 U.S.C. § 701(a). In




                    2
                     The Mahoneys previously filed suit against Daisy for the
            death of their son, which they settled before trial for $19,000,000.

                                              4
Heckler v. Chaney, 

(1985), the Supreme Court held that, except in limited

circumstances, there is a presumption that agency enforcement decisions are not subject

to judicial review. This presumption is applicable to decisions by the agency to enter into

settlement agreements with the parties it regulates. See, e.g., Baltimore Gas and Elec. Co.

v. F.E.R.C., 

, 460 (D.C. Cir. 2001); New York State Dep’t of Law v. FCC,

, 1214 (D.C. Cir. 1993).

       The presumption against unreviewability is not absolute. In Heckler, the Court

stated that the presumption can be overcome where “the substantive statute has provided

guidelines for the agency to follow in exercising its enforcement 

; see also Am. Disabled for Attendant Programs Today v. U.S. Dept. of Housing &

Urban Dev., 

, 384 (3d Cir. 1999).

        We agree with the District Court that in the present case there are no guidelines

governing the agency’s decision to accept Daisy’s proposed settlement. As the District

Court stated, there are “no provisions limiting the discretion of the Commission, no

instructions to follow in making its determinations, and no factors to be considered in

making a decision.” App. at 16a. The governing statute, 15 U.S.C. § 2064, states only

that the Commission may order action “if [it] determines . . . that a product distributed in

commerce presents a substantial product hazard.” Likewise, the FHSA, 15 U.S.C. §

1274(a) (b), allows agency action against a “banned hazardous substance,” as that term is

defined by the Commission. The applicable regulation, 16 C.F.R § 1025.26(f), provides



                                              5
merely that, “[t]he Commission shall rule upon all transmitted offers of settlement.” The

CPSC’s own Rules of Practice for Adjudicative Proceedings, 16 C.F.R. § 1025.26(c),

state that a proposed “offer of settlement shall contain . . . if appropriate, a detailed

statement of corrective action(s).” 

see also 16 C.F.R. §

1115.20(a)(1) (“Corrective action plans shall include, as appropriate . . . .”) (emphasis

added). The decision of what, if any, corrective action is “appropriate” is left to the sole

discretion of the agency. Thus, as stated by the District Court, “[t]he criteria enumerated

in the statutes [and regulations] establish the Commission’s ‘broad discretion, not just the

limited discretion inherent in every agency action,’ and as a result do not provide the

Court with any indication as to how it would evaluate such a question.” App. at 16a

(citing Raymond Proffitt Found. v. U.S. Army Corps of Eng’rs, 

, 205 (3d

Cir. 2003)).

       Accordingly, we hold that the decision of the CPSC to settle its administrative

action against Daisy without requiring corrective action is unreviewable under the APA.

                                              III.

        For the reasons given above, we will affirm the decision of the District Court.




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