Petition for Writ of Certiorari — Jake's Fireworks, Inc., Petitioner v. Consumer Product Safety Commission, et al.

No.

In the Supreme Court of the United States

_________

J AKE ’S F IREWORKS I NC.,

Petitioner,

v.

U NITED S TATES C ONSUMER P RODUCT

S AFETY C OMMISSION, ET AL .,

Respondents.

_________

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

_________

PETITION FOR A WRIT OF CERTIORARI

_________

D AMIEN M. S CHIFF

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

M OLLY E. N IXON

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

O LIVER J. D UNFORD

Counsel of Record

Pacific Legal Foundation

4440 PGA Blvd., Suite 307

Palm Beach Gardens, FL

33410

(916) 503-9060

odunford@pacificlegal.org

TIMOTHY L. M ULLIN , J R .

D WIGHT W. S TONE II

Miles & Stockbridge PC

100 Light Street

Baltimore, MD 21202

Counsel for Petitioner

QUESTION PRESENTED

Through a series of Notices of Non-Compliance and

related communications, Respondent Consumer Product Safety Commission determined (a) that Petitioner

Jake’s Fireworks’ common backyard fireworks are

subject to certain regulations under the Federal Hazardous Substances Act and (b) that samples of Jake’s

products are “banned hazardous substances” thereunder. These Notices, issued by the Commission’s Compliance Office on official Commission letterhead, also

ordered destruction of Jake’s products and threatened

significant civil and criminal penalties for non-compliance. After Jake’s requests for further administrative

consideration were rejected, it sought judicial review

under the Administrative Procedure Act. The Fourth

Circuit affirmed the district court’s dismissal, reasoning—contrary to the holdings of this Court and other

circuit courts—that only the Commission’s formal enforcement was reviewable under the APA.

The question presented is whether judicial review

under the Administrative Procedure Act for such notices of violation is unavailable until the agency further acts through formal enforcement.

ii

PARTIES TO THE PROCEEDING AND

RULE 29.6 STATEMENT

Petitioner Jake’s Fireworks Inc. was plaintiff in the

district court and appellant in the court below.

Respondents were defendants in the district court

and appellees in the court below. They are the U.S.

Consumer Product Safety Commission (CPSC) and Alexander Hoehn-Saric, in his official capacity as Chairman of the CPSC.

Petitioner Jake’s Fireworks Inc. is a wholly owned

subsidiary of Marivest Holdings, Inc., and no publicly

held corporation owns any stock in it.

iii

STATEMENT OF RELATED CASES

These proceedings are directly related to the abovecaptioned case under Rule 14.1(b)(iii):

Jake’s Fireworks Inc. v. Consumer Prod. Safety

Comm’n, No. 23-1661 (4th Cir.), order denying petition for rehearing en banc entered August 26,

2024; opinion and judgment entered June 26, 2024

Jake’s Fireworks Inc. v. Consumer Prod. Safety

Comm’n, No. 8:21-CV-2058-TDC (D. Md.), judgment

entered April 24, 2023

Jake’s Fireworks, Inc. v. Consumer Prod. Safety

Comm’n, No. 19-CV-1161-PWG (D. Md.), judgment

entered Oct. 30, 2020

iv

TABLE OF CONTENTS

Petition for a Writ of Certiorari ................................. 1

Opinions Below ........................................................... 1

Jurisdiction ................................................................. 1

Statutory Provisions Involved .................................... 1

Introduction ................................................................ 3

Statement of the Case ................................................ 3

A. Statutory and regulatory background:

Jake’s fireworks are not banned hazardous

substances ....................................................... 3

B. The Commission nonetheless repeatedly

asserts that Jake’s fireworks are banned

hazardous substances ..................................... 4

C. The Fourth Circuit holds that final agency

action short of a formal enforcement

decision is not subject to judicial review...... 10

Reasons for Granting the Petition ........................... 12

I.

The Fourth Circuit’s Holding, that Only

Formal Enforcement Decisions are Final

Agency Actions under the APA, Squarely

Conflicts with Jurisprudence from This

Court and Other Circuits ............................... 12

A. Because judicial review of agency action is

presumed, this Court has long applied a

pragmatic “final agency action” analysis ..... 12

B. Other circuit courts follow this Court’s

jurisprudence and likewise reject the

Fourth Circuit’s conflation of finality with

formal enforcement ....................................... 16

v

C. The Fourth Circuit’s straightjacket

reliance on the availability of formal

enforcement clashes with this Court’s

and other circuit courts’ approach ............... 21

II. The Question Presented Is Important .......... 26

A. Agency manipulation of finality to achieve

“voluntary” compliance while avoiding preenforcement review would diminish both

the APA’s promise and this Court’s

presumption of review .................................. 26

B. Following the APA and requiring review

for final agency action short of formal

enforcement decisions has not opened the

litigation floodgates ...................................... 29

III. This Case Is an Excellent Vehicle ................. 30

Conclusion ................................................................. 32

APPENDIX

U.S. Court of Appeals for the Fourth Circuit

No. 23-1661, Order Denying Petition

for Rehearing En Banc (Aug. 26, 2024) .............. 1a

U.S. Court of Appeals for the Fourth Circuit

No. 23-1661, Opinion (June 26, 2024) ................ 2a

U.S. District Court, District of Maryland,

No. 8:21-CV-2058-TDC, Order Granting

Motion to Dismiss (Apr. 24, 2023) .................... 15a

U.S. District Court, District of Maryland,

No. 8:21-CV-2058-TDC, Memorandum Opinion,

2023 WL 3058845 (Apr. 24, 2023)..................... 16a

U.S. District Court, District of Maryland,

No. 8:19-cv-1161-PWG, Memorandum and Order,

498 F. Supp. 3d 792 (Oct. 30, 2020) .................. 40a

vi

U.S. Court of Appeals for the Fourth Circuit

No. 23-1661, Excerpts of Transcript of

Oral Argument held on May 8, 2024 ................ 66a

5 U.S.C. § 704 .......................................................... 70a

vii

TABLE OF AUTHORITIES

Page(s)

Cases

Abbott Labs. v. Gardner,

387 U.S. 136 (1967) .............................. 3, 12-14, 19

Almendarez-Torres v. United States,

523 U.S. 224 (1998) ............................................. 23

Appalachian Power Co. v. EPA,

208 F.3d 1015 (D.C. Cir. 2000)............................ 24

Bellion Spirits, LLC v. United States,

7 F.4th 1201 (D.C. Cir. 2021) .............................. 25

Bennett v. Spear,

520 U.S. 154 (1997) .... 10, 13, 15, 19, 21, 26, 29-30

Bowen v. Michigan Acad. of Fam.

Physicians,

476 U.S. 667 (1986) ............................................. 13

Califano v. Sanders,

430 U.S. 99 (1977) ............................................... 12

Ciba–Geigy Corp. v. EPA,

801 F.2d 430 (D.C. Cir. 1986) ........................ 18-20

City of Arlington, Tex. v. FCC,

569 U.S. 290 (2013) ....................................... 23, 26

Colum. Broad. Sys. v. United States,

316 U.S. 407 (1942) ............................................. 14

Corner Post v. Bd. of Governors of the

Fed. Res. Sys.,

603 U.S. 799 (2024) ............................................. 13

Doe v. Tenenbaum,

127 F. Supp. 3d 426 (D. Md. 2012) ..................... 27

Free Enterprise Fund v. PCAOB,

561 U.S. 477 (2010) ............................................. 28

Frozen Food Express v. United States,

351 U.S. 40 (1956) ............................................... 15

viii

Her Majesty the Queen in Right of

Ontario v. EPA,

912 F.2d 1525 (D.C. Cir. 1990)............................ 18

Ipsen Biopharms. v. Azar,

943 F.3d 953 (D.C. Cir. 2019) .................. 16-17, 24

MedImmune, Inc. v. Genentech, Inc.,

549 U.S. 118 (2007) ............................................. 28

Nat’l Automatic Laundry & Cleaning

Council v. Shultz,

443 F.2d 689 (D.C. Cir. 1971) ............................. 18

Navajo Nation v. Dep’t of Interior,

819 F.3d 1084 (9th Cir. 2016) ............................. 21

NLRB v. United Food & Com. Workers

Union, 484 U.S. 112 (1987) ................................. 13

Rhea Lana, Inc. v. Dep’t of Labor,

824 F.3d 1023 (D.C. Cir. 2016)....................... 17-18

Sackett v. EPA,

566 U.S. 120 (2012) ...... 10-11, 14, 21, 25-26, 29-31

San Francisco Herring Ass’n v. Dep’t of

Interior, 946 F.3d 564 (9th Cir. 2019)............ 20-21

U.S. Army Corps of Eng’rs v. Hawkes Co.,

578 U.S. 590 (2016) ....... 3, 13-16, 21, 25, 28, 30-31

United States v. Shelton Wholesale, Inc.,

34 F. Supp. 2d 1147 (W.D. Mo. 1999),

aff ’d on other grounds, 277 F.3d 998

(8th Cir. 2002), cert. denied,

537 U.S. 1000 (2002) .................................... 8-9, 24

United States v. Shelton Wholesale, Inc.,

Nos. 96-6131-CV-SJ, 97-6021-CV-SJ,

1998 WL 251273

(W.D. Mo. Apr. 28, 1998) ....................................... 9

Statutes

5 U.S.C. § 552(a)(1)(A) .............................................. 23

ix

5 U.S.C. § 702 ........................................................ 3, 12

5 U.S.C. § 704 ........................................................ 1, 23

7 U.S.C. § 1361 .......................................................... 20

15 U.S.C. § 1263(a) ..................................................... 4

15 U.S.C. § 1264 .................................................... 4, 11

15 U.S.C. § 1273(a) ..................................................... 6

15 U.S.C. § 2066(b) ..................................................... 6

15 U.S.C. § 2068(a)(1) ................................................. 4

15 U.S.C. § 2069 .................................................... 4, 11

15 U.S.C. § 2076(b)(10) ............................................. 13

15 U.S.C. § 2079(a) ..................................................... 5

28 U.S.C. § 1254 .......................................................... 1

29 U.S.C. § 216 .......................................................... 17

33 U.S.C. § 1319(b) ................................................... 14

33 U.S.C. § 1319(g) ................................................... 14

42 U.S.C. § 1396r-8(b)(3)(C)(ii)................................. 16

47 U.S.C. § 155(c)(7) ................................................. 13

Other Authorities

16 C.F.R. § 1000.21 .......................................... 6, 22-23

16 C.F.R. § 1500.14(b)(7) ............................................ 7

16 C.F.R. § 1500.17(a)(11)(i) ....................................... 4

16 C.F.R. § 1500.17(a)(11)(ii)(C)................................. 4

16 C.F.R. § 1500.17(a)(11)(ii)(D) ................................ 4

35 Fed. Reg. 7415 (May 13, 1970) ........................... 4-5

38 Fed. Reg. 27012 (Sept. 27, 1973) ........................... 5

55 Fed. Reg. 31069 (July 31, 1990) ............................ 4

56 Fed. Reg. 37831 (Aug. 9, 1991) .............................. 4

71 Fed. Reg. 5165 (Feb. 1, 2006) .............................. 23

x

Baumann, Beau J. & Mina, Greg,

Clowning Around with Final Agency

Action, 28 Cornell J.L. & Pub. Pol’y

329 (2018) ................................................. 22, 27-28

Hylas, Stephen, Final Agency Action in

the Administrative Procedure Act,

92 N.Y.U. L. Rev. 1644 (2017)............................. 26

S. Rep. No. 752, 79th Cong.,

1st Sess. (1945) .................................................... 13

PETITION FOR A WRIT OF CERTIORARI

Petitioner Jake’s Fireworks Inc. respectfully petitions the Court for a writ of certiorari to review the

judgment of the United States Court of Appeals for the

Fourth Circuit.

OPINIONS BELOW

The opinion of the court of appeals (App. 2a-14a) is

reported at 105 F.4th 627. The decision of the district

court (App. 16a-39a) is not reported but is available at

2023 WL 3058845.

JURISDICTION

The judgment of the court of appeals was entered

on June 26, 2024. A petition for rehearing was denied

on August 26, 2024. The Chief Justice granted Jake’s

Fireworks’ application to extend the time to file a petition for a writ of certiorari to December 24, 2024.

No. 24A397 (Nov. 1, 2024). This Court’s jurisdiction

is invoked under 28 U.S.C. § 1254.

STATUTORY PROVISION INVOLVED

5 U.S.C. § 704, “Actions Reviewable,” provides:

Agency action made reviewable by statute and

final agency action for which there is no other

adequate remedy in a court are subject to

judicial review. A preliminary, procedural, or

intermediate agency action or ruling not directly

reviewable is subject to review on the review of

the final agency action. Except as otherwise

expressly required by statute, agency action

otherwise final is final for the purposes of this

section whether or not there has been presented

or determined an application for a declaratory

order, for any form of reconsideration, or, unless

2

the agency otherwise requires by rule and provides that the action meanwhile is inoperative,

for an appeal to superior agency authority.

3

INTRODUCTION

This Court has long held that the Administrative

Procedure Act (APA) “embodies the basic presumption

of judicial review to one ‘suffering legal wrong because

of agency action, or adversely affected or aggrieved by

agency action within the meaning of a relevant statute.’ ’’ Abbott Labs. v. Gardner, 387 U.S. 136, 140

(1967) (quoting 5 U.S.C. § 702). The Court thus demands a “ ‘pragmatic’ approach” to determine whether

agency action is final for purposes of judicial review.

U.S. Army Corps of Eng’rs v. Hawkes Co., 578 U.S.

590, 599 (2016) (quoting Abbott Labs., 387 U.S. at

149).

The Fourth Circuit turns this analysis on its head,

jettisoning the Court’s pragmatic approach in favor of

a hyper-formalistic test that results in a presumption

against pre-enforcement judicial review. The court’s

decision will incentivize agencies to postpone—indefinitely—formal enforcement actions as a means of

evading judicial review of their asserted regulatory interpretations. Parties like Jake’s must either succumb, and comply with “unreviewable” agency decisions, or invite agency enforcement at the risk of potentially ruinous civil and criminal penalties. This

Court’s review is needed so that the Fourth Circuit’s

rigid presumption against finality does not become entrenched across the administrative state.

STATEMENT OF THE CASE

A. Statutory and regulatory background:

Jake’s fireworks are not banned hazardous

substances

Jake’s imports small consumer fireworks called reloadable aerial shells or reloadable tube aerial shells.

(They are “small” because their outside diameter is

4

1.75 inches or less.) These devices are common backyard fireworks intended to produce a visual display after being launched 40 to 50 feet into the air. Compl.,

ECF 1, ¶¶ 19-20, 57-58. 1

In 1990, pursuant to the Federal Hazardous Substances Act (FHSA), the Commission considered banning these fireworks, noting that, “[u]nder [its] [then]existing regulations, reloadable tube aerial shell fireworks devices are not banned hazardous substances.”

55 Fed. Reg. 31069, 31069 (July 31, 1990) (Advanced

Notice of Proposed Rulemaking). The decision is significant, for under the FHSA and the Consumer Product Safety Act (CPSA), banned hazardous substances

may not be imported into the United States or otherwise introduced into commerce. 15 U.S.C. §§ 1263(a),

2068(a)(1). Violations may result in civil and criminal

penalties, including imprisonment. Id. §§ 1264, 2069.

Ultimately, the Commission decided to ban only

those fireworks that use shells larger than 1.75 inches

in outer diameter. 56 Fed. Reg. 37831 (Aug. 9, 1991)

(Final Rule); see 16 C.F.R. § 1500.17(a)(11)(i) (codifying ban). As the Commission conceded below, this regulation does not ban Jake’s small aerial shells. See

Br. for Appellees (Doc. 19) at 6; see also 16 C.F.R.

§ 1500.17(a)(11)(ii)(C), (D).

B. The Commission nonetheless repeatedly

asserts that Jake’s fireworks are banned

hazardous substances

1. Over a half-century ago, the Commission’s predecessor enacted the Audible Effects Regulation.

1 Filings are from Jake’s Fireworks Inc. v. CPSC, No. 8:21-CV-

02058-TDC (D. Md.).

5

35 Fed. Reg. 7415 (May 13, 1970). 2 This regulation

applies to hand-held devices that are intended to produce, not a visual display, but an especially loud audible effect (a “report”); they’re often used by farmers to

scare away pests. Id. at 7415. The rule banned the

distribution of these hand-held devices (except to

farmers), but the rule’s preamble confirmed its “intention” “not to ban so-called ‘Class C’ [i.e., reloadable

aerial shell] common fireworks.” Ibid.; see Compl.

¶¶ 22-27.

Despite this express regulatory intent, the Commission has more recently determined that reloadable

aerial shells are subject to the Audible Effects Regulation. But this determination was not made through

formal rulemaking. Instead, the agency confirmed

this decision in a series of Notices of Non-Compliance

issued to Jake’s, related correspondence, and a meeting between Jake’s counsel and the Director of the

CPSC’s Office of Compliance and Field Operations

(Compliance Office) that took place between 2014 and

2021. 3 Thus, through its enforcement of the FHSA

2 The Regulation was adopted by the FDA, which was originally

charged with administering the FHSA. When the Commission

took over FHSA responsibility, 15 U.S.C. § 2079(a), it adopted

existing FDA regulations without change, 38 Fed. Reg. 27012

(Sept. 27, 1973).

3 Compl. ¶¶ 57-91. Jake’s attached to its Complaint a sampling

of the Notices and related correspondence. See id. Ex. C, ECF 13 (Sept. 18, 2018 Notice); Ex. E, ECF 1-5 (Aug. 19, 2014 Notice);

Ex. I, ECF 1-9 (May 20, 2015 Notice); Ex. J, ECF 1-10 (Mar. 7,

2016 Notice); Ex. K, ECF 1-11 (three Notices dated Dec. 20,

2018); Ex. L, ECF 1-12 (Apr. 9, 2019 Notice); Exs. F, ECF 1-6; H,

ECF 1-8; N, ECF 1-14; P, ECF 1-16 (Letters from Jake’s Counsel

to CPSC, dated May 26, 2016, Oct. 14, 2014, Nov. 13, 2020, &

Jan. 11, 2021); Ex. G, ECF 1-7 (Letter from Compliance Office to

6

and CPSA, the Commission has decided that the Audible Effects Regulation applies to Jake’s common

fireworks and that several samples of those fireworks

are banned hazardous substances.

The Commission’s Regulated Products Handbook

(Handbook) explains “how CPSC enforces its statutes.” Ex. B, ECF 1-2, at 7 (capitalization altered); see

also 16 C.F.R. § 1000.21 (providing that the Compliance Office, inter alia, “conducts compliance and administrative enforcement activities under all administered acts”). And a representative example shows

how the process worked here.

In March 2018, a Commission compliance officer,

pursuant to the agency’s authority under 15 U.S.C.

§§ 1273(a) and 2066(b), selected for testing four samples of Jake’s products held at a port of entry. Ex. A,

ECF 1-1. To determine if the Audible Effects Regulation applies to the samples—that is, to determine

whether particular shells are intended to have an audible effect, the Commission employs a “poof/bang”

“test.” This “test” involves Commission staff—perhaps an individual—launching a shell into the air—

under undisclosed conditions—and listening for a

“poof” or a “bang.” If staff thinks the shell made a

“bang,” rather than a mere “poof,” the device is (supposedly) intended to have an audible effect and is

thereby subject to the Audible Effects Regulation. See

Compl. ¶¶ 5, 46-47.

Several months later, after the Compliance Office

applied this “poof/bang” “test” to Jake’s products, the

Jake’s counsel, dated Oct. 3, 2014); Exs. O, ECF 1-15; Q, ECF 117 (Letters from Director of Compliance Office to Jake’s counsel,

dated Dec. 16, 2020 & Feb. 8, 2021). The terms “Ex.” or “Exs.” in

this Petition refer to these exhibits.

7

same compliance officer sent Jake’s a Notice of NonCompliance. Ex. C, ECF 1-3. The Notice, issued on

official CPSC letterhead, informed Jake’s that the

samples “failed to comply” with “the requirement” under the Audible Effects Regulation and, as a result,

the “sampled lots are banned hazardous substances.”

Ex. C at 1 (emphasis added); see also Ex. K (Dec. 20,

2018 Notice), ECF 1-11, at 1 (the tested lot “is a

banned hazardous substance”) (emphasis added).

This Notice also stated that “it is a prohibited act

to introduce or deliver for introduction into interstate

commerce or receive in interstate commerce any

banned hazardous substance.” Ex. C at 2-3. Any violation, the Notice continued, “could subject” Jake’s to

(a) “civil penalties of up to $110,000 per violation” and

up to a “maximum of $16.025 million” for a “related

series of violations,” and (b) criminal penalties, including up to five years’ imprisonment. Id. at 3. The

Notice also warned Jake’s of the “possibility of further

action, including reasonably anticipated litigation.”

Ibid. The Notice instructed Jake’s that it “must abide

by continuing legal obligation” to “preserve” all information related to the sampled products. Ibid. 4

Further, like most Notices issued to Jake’s, the

September 2018 Notice ordered, in bold, “The sampled lots must be destroyed within 90 days from

the date of this letter unless an extension of time

4 A few Notices also stated that some aerial shells were misla-

beled hazardous substances because they did not indicate the

presence of “reports.” See, e.g., Ex. E, ECF 1-5, at 1-2; Ex. G, ECF

1-7, at 2-3. Jake’s objects to this conclusion, too. Compl. ¶ 67.

The Commission has never identified the legal authority requiring labels for the “presence of reports.” And while certain specific

hazards identified in 16 C.F.R. § 1500.14(b)(7) must be included

on labels, “the presence of reports” is not among them.

8

is requested and approved by the [Compliance

Office.]” Ex. C at 2.

All Notices demanded a response “outlining the

specific corrective action” that Jake’s “plans to take to

address the future sale of these products and any

other products subject to the mandatory requirements.” Ex. C at 4.

2. Jake’s disagreed with the Notices’ legal conclusions and factual determinations, and followed the

process in the Commission’s Handbook, which tells

firms what to do when they contend that their products are not subject to the laws or regulations applied

or when they disagree with the agency’s findings of violation. Ex. B, ECF 1-2, at 5-6, 18-19.

Jake’s responded in writing to the Notices and

maintained (and still maintains), inter alia, that the

Audible Effects Regulation does not apply to Jake’s

aerial shells; that the “poof/bang” test is arbitrary and

capricious; and that because the Audible Effects Regulation does not apply to Jake’s products, they cannot

and do not violate the Regulation. Compl. ¶¶ 65, 68,

70-71.

The Compliance Office, however, rejected Jake’s

objections to the application of the Audible Effects

Regulation and reaffirmed that various samples of

Jake’s products were unlawful. See, e.g., Ex. G, ECF

1-7, at 2 (citing United States v. Shelton Wholesale,

Inc., 34 F. Supp. 2d 1147, 1158 (W.D. Mo. 1999), aff ’d

on other grounds, 277 F.3d 998 (8th Cir. 2002), cert.

denied, 537 U.S. 1000 (2002)). The Compliance Office’s reliance on the Commission’s lawsuit in Shelton

is noteworthy for two reasons. First, in Shelton, “the

CPSC argue[d] that the [Audible Effects R]egulation

may be applied to . . . products [that produce aerial

9

visual displays],” like Jake’s products here. 34 F.

Supp. 2d at 1158. Second, the Commission sought

penalties for “knowing” violations of the FHSA based

on the importer’s receipt of non-compliance notices.

See United States v. Shelton Wholesale, Inc., Nos. 966131-CV-SJ, 97-6021-CV-SJ, 1998 WL 251273, at *11

(W.D. Mo. Apr. 28, 1998).

Jake’s got nowhere, even after meeting with the Director of the Compliance Office in 2017. During that

meeting, Jake’s was informed that staff intended to

enforce the regulations, as articulated in the Notices,

and that there was no further decisionmaking process

on these issues. Compl. ¶ 78. And Jake’s received Notices after this meeting. Id. ¶ 79.

3. Jake’s initially sought judicial review of CPSC’s

determinations in 2019. But the district court dismissed the action without prejudice (App. 40a-66a),

asserting that the Commission had not yet taken “final agency action” because, “[w]hile the process [was]

nearing its end, there [we]re still steps that Jake’s

Fireworks [could] take, such as request a hearing or

reconsideration.” App. 64a.

Jake’s followed the district court’s instruction and

re-engaged the Commission. Jake’s wrote to the Compliance Office Director and restated its contentions.

Jake’s also noted the district court’s instruction to request a hearing and asked for one, if necessary, but

otherwise sought confirmation that Jake’s had no further administrative appeal. Compl. ¶¶ 84, 86; Ex. N,

ECF 1-14; Ex. P, ECF 1-16. In response, the Director

claimed that no final decision had been made and dismissed Jake’s request for an informal hearing as

“premature because we have not notified you that the

Commission intends to take further action against

10

Jake’s or the products.” Compl. ¶¶ 85, 87-88; Ex. Q,

ECF 1-17, at 2 (emphasis added).

C. The Fourth Circuit holds that final agency

action short of a formal enforcement decision is not subject to judicial review

Having followed the district court’s direction to reengage with the Commission, and with no administrative path available, Jake’s again sought judicial review of the Commission’s legal and factual determinations. Compl. ¶¶ 104-118. But the district court again

dismissed without prejudice for lack of final agency

action. App. 16a-39a.

The Fourth Circuit affirmed, holding that the Commission had not consummated its decisionmaking process under Bennett v. Spear, 520 U.S. 154, 178 (1997).

App. 2a-14a. But the court’s rationale, which departs

from this Court’s jurisprudence, conflated finality

with formal enforcement. App. 7a-9a. According to

the court, the final determinations made in the Notices (and related written and oral statements) were

irrelevant, because only the Commission, not the

Compliance Office, could compel corrective action

through a formal administrative enforcement action

or a referral to the Justice Department. App. 8a.

Therefore, the court reasoned, the Notices “hardly

constitute the culmination of the Commission’s decisionmaking process” because a Notice “does not trigger any of the administrative, civil, or criminal proceedings that the Commission could pursue.” App. 9a.

The court reached this decision by misreading the

Court’s decision in Sackett v. EPA, 566 U.S. 120

(2012). According to the Fourth Circuit, Sackett involved “a compliance order issued via EPA’s authority

to enter binding administrative orders under the

11

Clean Water Act.” App. 12a (emphasis added). But in

Sackett, EPA’s “compliance” order was not self-executing. Id. at 129. Indeed, precisely because EPA’s order

sought voluntary compliance, the government argued

that the order was non-final and could be enforced

only through a formal enforcement action. Id. at 12829. This Court nonetheless held that finality does not

turn on the possibility of future enforcement. Rather,

the Court held that (a) the determinations in EPA’s

compliance order and (b) decisions to proceed with formal enforcement were independent final decisions under the APA. Ibid.

By rigidly considering only whether the Commission here had statutory authority to initiate a formal

enforcement action, the Fourth Circuit failed to apply

a “pragmatic” finality analysis. It thus ignored all indicia of finality—unwavering statements about the

applicability of the Audible Effects Regulation, the

lack of any indication that the interpretation was preliminary or interim, the application of the Regulation

to specific samples of Jake’s products (i.e., not merely

a restatement of law), the potential that Jake’s receipt

of the Notices subjects it to civil and criminal penalties

for knowing violations, and Jake’s powerlessness to

initiate further administrative review.

***

Jake’s remains in limbo, quarantining more than

$2.6 million of fireworks (Compl. ¶ 81) because selling

them could trigger the sanctions threatened in the Notices, including criminal and civil penalties for “knowing” violations based on Jake’s receipt of the Notices.

15 U.S.C. §§ 1264, 2069.

12

REASONS FOR GRANTING THE PETITION

The Fourth Circuit’s holding that judicial review is

unavailable for these final agency actions clashes with

the APA’s presumption of judicial review—as confirmed by this Court and other circuits. The question

presented is crucial for Americans whose good-faith

attempts to follow regulation are met with confusing,

arbitrary, and unpredictable interpretations and applications. If the Fourth Circuit’s opinion stands, regulatory agencies will be able to compel broad “voluntary” compliance with novel and shifting statutory

and regulatory interpretations, while evading pre-enforcement APA review. The Court should grant the

petition.

I.

The Fourth Circuit’s Holding, that Only

Formal Enforcement Decisions are Final

Agency Actions under the APA, Squarely

Conflicts with Jurisprudence from This

Court and Other Circuits

A. Because judicial review of agency

action is presumed, this Court has long

applied a pragmatic “final agency

action” analysis

This Court has confirmed that the APA “evinces

Congress’ intention and understanding that judicial

review should be widely available to challenge the actions of federal administrative officials.” Califano v.

Sanders, 430 U.S. 99, 104 (1977). The APA “embodies

the basic presumption of judicial review to one ‘suffering legal wrong because of agency action, or adversely

affected or aggrieved by agency action within the

meaning of a relevant statute.’ ’’ Abbott Labs., 387

U.S. at 140 (quoting 5 U.S.C. § 702); see id. 139-41 (describing Congress’s strong preference—both before

13

and after enactment of the APA—for judicial review of

agency action). This “basic presumption,” alongside

“our deep-rooted historic tradition that everyone

should have his own day in court,” was reaffirmed just

last Term. Corner Post v. Bd. of Governors of the Fed.

Res. Sys., 603 U.S. 799, 824 (2024) (cleaned up).

Accordingly, when deciding whether an agency action is subject to judicial review, the Court gives the

APA’s “generous” review provisions a “hospitable” interpretation. Abbott Labs., 387 U.S. at 141. The

Court has emphasized that “ ‘[v]ery rarely do statutes

withhold judicial review;’ ” otherwise, “ ‘statutes would

in effect be blank checks drawn to the credit of some

administrative officer or board.’ ” Bowen v. Michigan

Acad. of Fam. Physicians, 476 U.S. 667, 671 (1986)

(quoting S. Rep. No. 752, 79th Cong., 1st Sess., 26

(1945)). And “statutory preclusion of judicial review

must be demonstrated clearly and convincingly.”

NLRB v. United Food & Com. Workers Union, 484

U.S. 112, 131 (1987). 5

This Court has “distilled” two conditions that “generally speaking” must be satisfied for finality: the action (1) must be the “consummation of the agency’s decisionmaking process” and (2) “must be one by which

rights or obligations have been determined, or from

which legal consequences will flow.” Hawkes, 578 U.S.

at 597 (quoting Bennett, 520 U.S. at 178). But the

5 Congress knows how to overcome the presumption of judicial

review. Compare 47 U.S.C. § 155(c)(7) (requiring a filing of an

application for review by the full Federal Communications Commission before judicial review of actions taken by staff under delegated authority) with 15 U.S.C. § 2076(b)(10) (allowing CPSC to

delegate any of its functions or powers, except issuing subpoenas,

to any officer or employee and providing no such limitation on

judicial review).

14

Court continues to require a “ ‘pragmatic’ approach” to

final-agency-action determinations. Id. at 599 (quoting Abbott Labs., 387 U.S. at 149).

In Sackett, 566 U.S. 120, EPA’s Director of Ecosystems, Tribal and Public Affairs, at EPA Region 10, issued landowners a non-self-executing “compliance order.” 6 As discussed above, the Court rejected the government’s claim—copied by the Commission here—

that since EPA had not formally enforced this voluntary order, it was merely an intermediate step in the

deliberative process. 566 U.S. at 128-29.

This Court held that the order “mark[ed] the ‘consummation’ of the agency’s decision-making process”

even though—like the Notices of Non-Compliance

here—that order could be enforced only through a separate, formal enforcement action. 7 Id. at 127. The

Court recognized that “the EPA’s ‘deliberation’ over

whether the [challengers] are in violation of the

[Clean Water] Act is at an end; the [EPA] may still

have to deliberate over whether it is confident enough

about this conclusion to initiate litigation, but that is

a separate subject.” Id. at 129. This pragmatic understanding of finality pre-dates the APA. See Colum.

Broad. Sys. v. United States, 316 U.S. 407, 417-18

(1942) (A final order “does not cease to be so merely

because it is not certain whether the Commission will

institute proceedings to enforce the penalty incurred

under its regulations for non-compliance.”) (citation

omitted). Thus, contrary to the Fourth Circuit’s rea-

6 See Sackett v. EPA, No. 2:08-cv-185-EJL (D. Idaho), Compl.

Attachment A, ECF 1-2.

7 EPA may seek enforcement through administrative or judicial

actions. 33 U.S.C. § 1319(b), (g).

15

soning, the availability of formal enforcement—administrative or judicial—does not make final agency

action non-final.

Similarly, in Hawkes, mining companies sought review of a “jurisdictional determination”—a U.S. Army

Corps of Engineers decision issued to property owners

as to whether a particular property contains “waters

of the United States” subject to the Clean Water Act.

578 U.S. at 593. While the government conceded that

the jurisdictional determination satisfied the first

Bennett condition, the Court’s analysis of the second

condition is instructive. Again, the Court rejected the

government’s argument that agency action—the jurisdictional determination—was not final merely because it didn’t trigger enforcement proceedings. Id. at

599-600; compare App. 9a (Fourth Circuit’s relying on

the fact that Notices “do[ ] not trigger any of the administrative, civil, or criminal proceedings that the

Commission could pursue”).

The Court in Hawkes relied in part on Frozen Food

Express v. United States, 351 U.S. 40 (1956), which involved an ICC order that “had no authority except to

give notice of how the Commission interpreted the relevant statute, and would have effect only if and when

a particular action was brought against a particular

carrier.” Hawkes, 578 U.S. at 599-600 (cleaned up).

Emphasizing the “pragmatic approach [it had] long

taken to finality,” the Court “held that the [ICC] order

was nonetheless immediately reviewable.” Ibid. Like

the Notices’ effect on Jake’s here, the order in Frozen

Food “warn[ed] every carrier, who does not have authority from the Commission to transport those commodities, that it does so at the risk of incurring criminal penalties.” 351 U.S. at 44.

16

Finally, the Court in Hawkes recognized that “the

Clean Water Act makes no reference to standalone jurisdictional determinations, so there is little basis for

inferring anything from it concerning the reviewability of such distinct final agency action.” 578 U.S. at

601 (cleaned up). The “mere fact that [future, hypothetical enforcement] decisions are reviewable should

not suffice to support an implication of exclusion as to

other agency actions . . . .” Id. at 602 (cleaned up).

B. Other circuit courts follow this Court’s

jurisprudence and likewise reject the

Fourth Circuit’s conflation of finality

with formal enforcement

1. Because the D.C. Circuit adheres to this Court’s

final-agency-action holdings, it routinely concludes

that even guidance documents from lower-level staff

constitute reviewable final agency action.

In Ipsen Biopharms. v. Azar, 943 F.3d 953, 954, 959

(D.C. Cir. 2019), the court held that a “series of letters” from the Centers for Medicare and Medicaid Services (CMS) constituted final agency action. These

letters designated pricing information that Ipsen was

required to report to CMS. Id. at 954. The court

agreed that Ipsen’s receipt of the letters “significantly

increased its risk of a statutory civil penalty being levied for ‘knowingly provid[ing] false information,’ ” ibid.

(quoting 42 U.S.C. § 1396r-8(b)(3)(C)(ii)), despite

CMS’s argument—like the Commission’s—that the

letters were merely “relevant evidence” that did not

result in legal consequences because no regulation announces that actions contrary to the agency’s position

will be deemed willful, id. at 958. Further, like Jake’s

here, Ipsen had “no further agency action . . . to invoke

or to exhaust to plead its cause.” Ibid. The regulatory

17

scheme left Ipsen “in a quandary: Either accept CMS’s

interpretation to avert civil penalties . . . or proceed in

defiance of that risk, with penalties growing each

quarter.” Id. at 959. Finally, again as here, CMS’s

letters “expressly applied [its] interpretation of the

governing law to the specific facts of Ipsen’s case.”

Ibid. As such, “the agency action at issue here closely

resembles an individual adjudication, which is a wellrecognized form of final agency action.” Ibid.

Similarly, in Rhea Lana, Inc. v. Dep’t of Labor, 824

F.3d 1023 (D.C. Cir. 2016), the court held that the Department of Labor had reached final agency action

when a district director of the Department’s Wage and

Hour Division advised Rhea Lana by letter that the

Division considered Rhea Lana’s volunteer workers to

be employees under the Fair Labor Standards Act

(FLSA) and entitled to wages. Id. at 1025-26. The

district director’s letter stated that no penalty was being imposed then but that Rhea Lana “will be subject

to . . . penalties” “[i]f at any time in the future [it] is

found to have violated the monetary provisions of the

FLSA.” Id. at 1026. Under the relevant statutory

scheme, the Labor Secretary could have issued an administrative determination, giving a responding party

15 days to object, after which a hearing would have

been held. 29 U.S.C. § 216. But Rhea Lana sued under the APA to challenge the determination that its

volunteers were employees. The district court granted

the Department’s motion to dismiss on the basis that

there was no final agency action. Id. The D.C. Circuit

reversed. While it found that the letter created no legal obligations beyond those already imposed under

the FLSA, it nevertheless concluded “that legal consequences flow[ed] from the [l]etter because it ma[de]

18

Rhea Lana eligible for civil penalties in any future enforcement action.” Id. at 1028.

This approach is long-standing in the D.C. Circuit.

In Her Majesty the Queen in Right of Ontario v. EPA,

the court considered letters from EPA’s Acting Assistant Administrator for Air and Radiation. 912 F.2d

1525, 1531-32 (D.C. Cir. 1990). EPA argued that the

letters were not final agency action because, among

other things, the letters included a disclaimer by the

Acting Assistant Administrator, who wrote that the

response “represent[ed] only my thoughts on this issue, and does not necessarily reflect the position of the

[EPA] Administrator.” Id. at 1530. But the court held

that the letters were final agency action. The court

explained that “agency inaction may represent effectively final agency action that the agency has not

frankly acknowledged.” Id. at 1531 (citation omitted). 8 Therefore, the “absence of a formal statement

of the agency’s position . . . is not dispositive” because

an agency “may not, for example, avoid judicial review

‘merely by choosing the form of a letter to express its

definitive position on a general question of statutory

interpretation.’ ” Ibid. (quoting Ciba–Geigy Corp. v.

EPA, 801 F.2d 430, 438 n.9 (D.C. Cir. 1986)). The

court observed that the Acting Assistant Administrator was obviously speaking for EPA, that he was the

“principal advisor to the Administrator in matters

pertaining to air and radiation programs,” and there

See also Nat’l Automatic Laundry & Cleaning Council v.

Shultz, 443 F.2d 689, 698 (D.C. Cir. 1971) (“The issue of finality

is . . . determined not by the name assigned by the agency to its

action but in a pragmatic way. The Court has found final action

in a wide array of pronouncements and communications having

the contemplation and likely consequence of expected conformity.”) (cleaned up).

8

19

was “no reason to question his authority to speak for

the EPA.” Id. at 1532 (citations omitted). Finally,

there was “nothing tentative” about EPA’s interpretation of Section 115, and there was nothing new about

EPA’s view. Ibid. Therefore, although no decision

was made on the Section 115 petitions, the Acting Assistant Administrator’s letters did—like the Notices

here, see above at 4-10—set forth a definitive legal interpretation.

Finally, in Ciba-Geigy, after EPA advised companies that labeling changes were required for a certain

pesticide, Ciba-Geigy sought clarification from the Director of EPA’s Office of Pesticide Programs. 801 F.2d

at 432-33. Ciba-Geigy maintained that EPA could not

require labeling changes without going through the

process set forth in the Federal Insecticide, Fungicide,

and Rodenticide Act (FIFRA). Id. at 433. The Director responded that “the Agency does not agree with

your interpretation” of FIFRA. Ibid. Ciba-Geigy then

sued in federal court. Ibid. The D.C. Circuit held that

the Director’s response was final agency action under

the pragmatic “balancing” of the Bennett factors. Id.

at 434. Ciba-Geigy’s complaint raised only a “pure legal question as to what procedures EPA was obliged

to follow before requiring a labeling change. That narrow legal question [was] entirely independent of and

separable from the largely factual question whether

[the pesticide] poses a substantial danger . . . .” Id. at

435. The court had “no reason to believe that the EPA

Director of Pesticide Programs lack[ed] authority to

speak for EPA on this issue or that his statement of

the agency’s position was ‘only the ruling of a subordinate official’ that could be appealed to a higher level

of EPA’s hierarchy.” Id. at 437 (quoting Abbott Labs.,

387 U.S. at 151). Once again, APA review was allowed

20

despite the agency’s authority to pursue administrative enforcement (7 U.S.C. § 1361).

2. The Ninth Circuit, too, splits from the Fourth

Circuit’s overly formal test. In San Francisco Herring

Association v. Department of the Interior, for example,

the court held that final agency action was reached after a series of formal written notices—in which the

National Park Service asserted authority over commercial herring fishing in certain waters, stated that

this fishing was prohibited under federal law, and

warned that violations could lead to civil penalties and

jail—and in-person warnings to fishermen by park officials and California wildlife wardens. 946 F.3d 564,

567-68 (9th Cir. 2019). The fishermen understood

that by ignoring the government officials and continuing to fish, they risked criminal prosecution. Id. at

572-73.

After the fishermen sued, the Service claimed that

no final decisions had been made because the Service

had merely restated what already existed in statutes,

regulations, and rulings. Id. at 577. The court rejected that argument: “ordering fishermen not to fish

on pain of fines and imprisonment—backed by formal

agency notices clearing up the ‘reported confusion

over the jurisdiction of the [Service]’ in the [waters at

issue]—is not analogous to a mere ‘restatement’ of the

law.” Ibid. Further, applying this Court’s “pragmatic”

approach, the court held that the government’s actions did constitute the consummation of its decisionmaking authority. Id. at 578. The government

had, for years, “definitively assert[ed] federal jurisdiction” over the waters in question and exposed commercial fishermen to civil penalties and jail; this was followed by orders from subordinate government officials

21

to stop fishing or risk civil and criminal penalties.

Ibid.

Thus, the Service had “arrived at a definitive position,” namely, that “it had jurisdiction over [certain]

waters . . . and the fishermen . . . were violating federal

law by fishing there.” Ibid. (citation omitted). The

court relied on an earlier decision, which likewise relied on this Court’s decisions in Bennett, Sackett, and

Hawkes: “[a]s to the first Bennett requirement, an

agency’s determination of its jurisdiction is the consummation of agency decisionmaking regarding that

issue.” S.F. Herring, 946 F.3d at 578 (quoting Navajo

Nation v. Dep’t of Interior, 819 F.3d 1084, 1091 (9th

Cir. 2016); citing Hawkes, 578 U.S. at 598 (citing

Sackett, 566 U.S. at 131 (Ginsburg, J., concurring))).

Like the Commission and its determination that

the Audible Effects Regulation applies to Jake’s products, the Service did “not suggest it is still in the middle of trying to figure out its position on whether it

ha[d] jurisdiction.” Ibid. And the fishermen, like

Jake’s, had no entitlement to further agency review.

Id. at 579. Finally, the court explained, “a central rationale of the final agency action requirement is to

prevent premature intrusion into the agency’s deliberations; it is not to require regulated parties to keep

knocking at the agency’s door when the agency has already made its position clear.” Ibid.

C. The Fourth Circuit’s straightjacket

reliance on the availability of formal

enforcement clashes with this Court’s

and other circuit courts’ approach

1. Unlike this Court and other circuit courts, the

Fourth Circuit eschews a pragmatic consideration of

the facts and focuses solely on the agency’s authority

22

to initiate a formal enforcement action. As noted

above, this overly formalistic approach conflated finality with enforcement here: “the Notices from the Compliance Office hardly constitute the culmination of the

Commission’s decisionmaking process [because] . . . a

Notice of Noncompliance does not trigger any of the

administrative, civil, or criminal proceedings that the

Commission could pursue.” App. 9a.

But, as demonstrated above, the availability of formal enforcement does not render final action non-final. The Fourth Circuit ignored this precedent emphasizing a pragmatic inquiry and the presumption of

judicial review; it instead fixated on the Commission’s

regulatory scheme, even deferring to the Commission’s interpretation of it. App. 8a-10a. Cf. Beau J.

Baumann, Greg Mina, Clowning Around with Final

Agency Action, 28 Cornell J.L. & Pub. Pol’y 329, 331,

350 (2018) (noting “the emerging formalism of the

lower federal courts with respect to . . . the final

agency action requirement” and recognizing that “the

Fourth and Sixth Circuits have adopted formalistic

tests for final agency action despite the Court’s repeated calls for pragmatism”).

Further, the Fourth Circuit’s focus on the Commission’s statutory authority to initiate formal enforcement blinded the court to the Commission’s own structure in the finality analysis. See 16 C.F.R. § 1000.21

(providing that the Compliance Office, inter alia, “conducts compliance and administrative enforcement activities under all administered acts”); Handbook,

Ex. B, ECF 1-2, at 7 (explaining “how CPSC enforces

its statutes” through compliance officials) (capitalization altered). The court referred to § 1000.21 as a

“housekeeping regulation.” App. 10a.

23

But the APA itself compels the Commission to issue

§ 1000.21 (see 71 Fed. Reg. 5165 (Feb. 1, 2006)) by requiring agencies to inform the public of “the employees . . . from whom, and the methods whereby, the

public may obtain information, make submittals or requests, or obtain decisions.” 5 U.S.C. § 552(a)(1)(A).

The APA then gives the public a mechanism to challenge those decisions, which is what Jake’s has tried

for years to do here. Id. § 704. To sweep away the

Commission’s APA-required rule as nugatory “housekeeping,” when that information is intended to help

parties like Jake’s navigate agency interactions, adds

insult to injury for Americans trying to comply with

the “vast and varied federal bureaucracy and the authority administrative agencies now hold over our economic, social, and political activities.” City of Arlington, Tex. v. FCC, 569 U.S. 290, 313 (2013) (Roberts,

C.J., dissenting) (cleaned up); cf. Almendarez-Torres

v. United States, 523 U.S. 224, 266 n.6 (1998) (Scalia,

J., dissenting) (observing that the majority opinion

“offer[ed] no support for [its] confident characterization” of a statute as a “housekeeping measure”).

Thus, the Commission’s own rules and Handbook

confirm what this Court has long held: agencies may

issue final, reviewable decisions short of formal enforcement actions.

2. The Fourth Circuit’s overly formalistic test leads

to absurd results—as this case demonstrates. Because the Fourth Circuit considered only the Commission’s authority to initiate a formal enforcement action (or refer a matter to the Justice Department for

civil or criminal enforcement), the court ignored all

the indicia of finality that confirm finality here:

24

•

•

•

•

The agency actions—in particular, the Commission’s interpretation of its regulations—are documented in writing (the Notices and the followup letters from the Compliance Office Director)

on official agency letterhead.

The Notices assert the Commission’s consistent

interpretation of its regulations. If any question remained, the Commission has argued in

federal court its determination that the Audible

Effects Regulation applies to the fireworks at

issue here. See Shelton, 34 F. Supp. 2d at 1158.

The Notices apply the Commission’s interpretation of the law to specific facts and reach definitive determinations. 9

The Commission used definitive and mandatory language with respect to those determinations. 10

9 See Ipsen Biopharms., 943 F.3d at 959 (finding final agency

action when agency letters “expressly applied [the agency’s]

interpretation of the governing law to the specific facts of Ipsen’s

case”).

10 See Appalachian Power Co. v. EPA, 208 F.3d 1015, 1023

(D.C. Cir. 2000) (holding that EPA “guidance” document was

final agency action notwithstanding agency disclaimers in part

because “[i]t commands, it requires, it orders, it dictates”).

The relevant interpretations in the CPSC Notices here can be

contrasted with separate and explicitly preliminary decisions in

the same Notices. Compare Ex. E, ECF 1-5 (Aug. 19, 2014 Notice

of Non-Compliance) at 1 and 3 (The “sampled lot is a banned

hazardous substance” and “must be destroyed . . . .”), with id.

at 3 (stating that the CPSA “gives the CPSC staff authority to

preliminarily determine if a substantial product hazard exists”

under that Act) (italicized emphasis added).

25

•

•

•

•

•

The determinations were not labeled or characterized as advisory, preliminary, or interim. 11

The Commission’s action was an affirmative

choice; it was not solicited. 12

The regulated party subject to agency action

has pursued all possible avenues for administrative reconsideration of (a) the legal interpretations asserted in the Notices and (b) the

agency’s application of its interpretations. 13

The Commission affirmed that it was not (and

is not) in the process of reconsidering, nor will

it do so before it makes a separate decision to

enforce, which it admits, in briefing and at oral

argument below, may never occur.

Another government agency treats the Notices

as definitive. Here, the Compliance Office retested some samples of Jake’s products and

found that they complied with the Audible Effects Regulation. As a result, upon the Compliance Office’s instruction, U.S. Customs and

Border Protection released those samples. Ex.

I, ECF 1-9, at 1.

11 See Sackett, 566 U.S. at 128-29.

12 See Hawkes, 578 U.S. at 602 (rejecting a “count your blessings” argument as an “[in]adequate rejoinder to the assertion of

a right to judicial review under the APA”).

13 See Bellion Spirits, LLC v. United States, 7 F.4th 1201, 120809 (D.C. Cir. 2021) (taking into consideration that advisory letter

did not provide any other avenue for plaintiff to affirmatively

seek relief).

26

II. The Question Presented Is Important

A. Agency manipulation of finality to

achieve “voluntary” compliance while

avoiding pre-enforcement review will

diminish both the APA’s promise and

this Court’s presumption of review

If an agency’s indefinite postponement of formal

“finality” renders all other agency action non-final,

numerous regulatory agencies will be able to subvert

the APA’s judicial-review mechanism. See Stephen

Hylas, Final Agency Action in the Administrative Procedure Act, 92 N.Y.U. L. Rev. 1644, 1666 (2017) (“[T]he

finality requirement creates incentives for agencies to

strategically abuse the prongs of the Bennett test to

avoid judicial review.”); Sackett, 566 U.S. at 131 (rejecting agency argument that would “enable the

strong-arming of regulated parties into ‘voluntary

compliance’ without the opportunity for judicial review”); cf. City of Arlington, 569 U.S. at 315 (Roberts,

C.J., dissenting) (“It would be a bit much to describe

the result as ‘the very definition of tyranny,’ but the

danger posed by the growing power of the administrative state cannot be dismissed.”).

Agencies already have enormous power to obtain

voluntary compliance with their statutory and regulatory interpretations due to the expense and risk of litigation. If, as the Fourth Circuit reads the APA, agencies are also permitted to collapse otherwise final

agency action with an agency’s decision to formally enforce its determinations, regulated parties will be denied pre-enforcement review in even more situations.

And all but the largest and deep-pocketed regulated

parties will be forced to “voluntarily” comply.

27

The Commission has not been reluctant to press

this advantage. Despite sending numerous Notices of

Non-Compliance to Jake’s, all of which reflected consistent interpretations of Commission regulations and

threatened civil and criminal penalties, when asked

during oral argument whether the Commission itself

would ever formally make those determinations

through administrative or judicial enforcement, the

Commission’s attorney replied: “It may or it may not.”

App. 68a (Tr. 18:3-11). 14

This evasion-of-finality practice is nothing new for

the Commission. In Doe v. Tenenbaum, the court observed that the Commission’s “repeated use of the

words ‘may’ and ‘could’ demonstrate that it has no serious design on taking future action in connection

with [its] report.” 127 F. Supp. 3d 426, 465 (D. Md.

2012). “Indeed, during oral argument, the Court expressed concern that the Commission’s decision ‘could

never be final’ and the Commission conceded that

‘[t]hat may be.’ ” Id.

The Fourth Circuit’s position thus denies regulated

parties their statutory right of review by trapping

them in limbo through agency-manipulable processes.

Cf. Baumann & Mina, Clowning Around with Final

Unsophisticated parties who have not parsed the relevant

agency’s delegations manual or organization chart (if such documents even exist and are made public) will reasonably assume

that a “Notice of Non-Compliance,” or any other similarly formal

warning of unlawful conduct, is the agency’s final decision. A

judge on the panel below acknowledged the obvious effect of the

Notices’ mandatory language. App. 68a (Tr. 23:12-18) (“[W]ith

respect to the orders of destruction, ‘You are hereby ordered to

destroy these fireworks within 90 days.’ I mean, that’s pretty definitive. And so Jake’s has one option, or two options, either do it

or not, in which case they violated an order of the—of the

agency.”).

14

28

Agency Action, 28 Cornell J.L. & Pub. Pol’y at 361 (“It

is not difficult to imagine that the Fourth and Sixth

Circuits’ approach [to final agency action] could be

used to game federal jurisdiction.”). The Fourth Circuit’s deference to agencies on finality will undercut

pre-enforcement APA review, giving the government

a trump card—through manipulation of its own decisionmaking process—to employ at will.

None of this gamesmanship comports with the

Court’s precedent.

In Free Enterprise Fund v.

PCAOB, the Court stated that it “normally do[es] not

require plaintiffs to ‘bet the farm . . . by taking the

violative action’ before ‘testing the validity of the law’ ”

to obtain their day in court. 561 U.S. 477, 490 (2010);

see also MedImmune, Inc. v. Genentech, Inc., 549 U.S.

118, 128-29 (2007) (“[W]here threatened action by government is concerned, we do not require a plaintiff to

expose himself to liability before bringing suit to challenge the basis for the threat.”). But that’s precisely

what the government says Jake’s must do here. See,

e.g., Br. for Appellees (Doc. 19) at 34 (“If Jake’s believes that the Compliance Office’s legal conclusions

are indefensible, nothing prevents Jake’s from ignoring the notices and selling the shipments.”).

Neither the APA nor this Court’s precedents require Jake’s to “assume [the risk] while waiting for

[the Commission] to ‘drop the hammer’ in order to

have [its] day in court.” Hawkes, 578 U.S. at 600. To

the contrary, the APA’s promise of judicial review alleviates this dilemma for regulated parties, and Bennett’s distillation of “two conditions that generally

must be satisfied” should not be construed to give

agencies a roadmap for accomplishing their regulatory goals while postponing—or entirely evading—judicial review. 578 U.S. at 597.

29

B. Following the APA and requiring

review for final agency action short of

formal enforcement decisions has not

opened the litigation floodgates

Contrary to the government’s repeated assertion

(given credence by the Fourth Circuit) that finality

here would chill informal agency communication with

regulated parties, judicial review of final agency actions short of formal enforcement would not change

existing practice. That is because the many indicia of

finality, combined with standing doctrine and the second part of the Bennett analysis, would continue to

properly cabin reviewable action to that which is functionally final. Genuinely informal staff advice—no

doubt helpful to regulated parties attempting to comply with the web of federal regulations—would be unaffected.

Further, this Court has already responded to the

government’s (and the Fourth Circuit’s) arguments

concerning speculative disincentivizing effects on lessformal communication. In Sackett, the government

warned that EPA would be “less likely to use the [voluntary compliance] orders if they are subject to judicial review.” 566 U.S. at 130. But the Court found no

reason to think that the Clean Water Act was

“uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the

opportunity for judicial review.” Id. at 130-31. “The

APA’s presumption of judicial review is a repudiation

of the principle that efficiency of regulation conquers

all.” Id. at 130. The same is true for statutes administered by the Commission.

30

Finally, while regulated entities no doubt benefit

from communication with regulators and even, perhaps, from unsolicited warnings, it beggars belief that

the legal limbo resulting from the issuance of such

warning letters, coupled with an agency’s unilateral

power to deny further review, is a legitimate government objective that this Court should countenance.

Indeed, in response to similar arguments from the

government about the purported benefits of such

agency action, the Court rightly recognized that “such

a ‘count your blessings’ argument is not an adequate

rejoinder to the assertion of a right to judicial review

under the APA.” Hawkes, 578 U.S. at 602; see also

Sackett, 566 U.S. at 131 (“Compliance orders will remain an effective means of securing prompt voluntary

compliance in those many cases where there is no substantial basis to question their validity.”).

III. This Case Is an Excellent Vehicle

This case comes to the Court on the assumption

that there was agency action. See App. 31a (assuming

Notices were agency actions). And because the Fourth

Circuit held only that the Notices and follow-up communications did not consummate the agency’s decisionmaking process, App. 14a n.4, this Court can also

assume, for purposes of analyzing the question presented here, that legal consequences—potential for

civil and criminal sanctions—flow from the agency action, satisfying the second Bennett prong. 15 The question before the Court is thus cleanly presented.

15 This Court’s consideration of the question presented is also

narrowed by the determinations in the Notices that Petitioner is

not challenging. Specifically, Jake’s has not challenged here the

determinations that its products are subject to the FHSA or the

31

Further, the Fourth Circuit’s analysis is egregiously wrong and cannot be squared with this Court’s

analysis of APA finality. See, e.g., Sackett, 566 U.S. at

129-31; Hawkes, 578 U.S. at 597-602. The Fourth Circuit’s approach flouts the central reasoning in these

(and other) decisions and relies instead on a rigid test

that allows agencies to forever postpone pre-enforcement judicial review by leaving open the possibility of

formal enforcement. And the lower court’s test plainly

splits with the pragmatic approach applied by other

courts of appeals that reviewed materially similar notices issued by agencies whose statutes allowed for

formal enforcement actions. See supra, Part I.

Finally, the Fourth Circuit’s formalistic approach

requires Jake’s and all regulated parties in the Fourth

Circuit to either yield to “unreviewable” agency action

or obtain review by inviting a formal enforcement action—and thereby risk civil and criminal penalties

based on the Notices themselves. This “option” denies

regulated parties their right to judicial review, and is

contrary to the APA, precedent, fairness, and logic.

This Court should grant the petition, reverse the

Fourth Circuit’s opinion, and confirm that a legal and

factual determination by an agency is reviewable even

though the agency has reserved its decision to enforce

that determination.

CPSA; that the Commission has the authority to collect and test

samples of imported fireworks; that a certificate of conformity is

required for products entered into commerce; that other

Commission regulations apply to Jake’s products; or that the

Commission may promulgate a notice-and-comment regulation

to adopt the interpretation of the Audible Effects Regulation set

forth in the Notices.

32

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

D AMIEN M. S CHIFF

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

M OLLY E. N IXON

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

O LIVER J. D UNFORD

Counsel of Record

Pacific Legal Foundation

4440 PGA Blvd., Suite 307

Palm Beach Gardens, FL

33410

(916) 503-9060

odunford@pacificlegal.org

TIMOTHY L. M ULLIN , J R .

D WIGHT W. S TONE II

Miles & Stockbridge PC

100 Light Street

Baltimore, MD 21202

Counsel for Petitioner

D ECEMBER 2024