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

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TABLE OF CONTENTS

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

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

1a

FILED: August 26, 2024

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

___________________

No. 23-1661

(8:21-cv-02058-TDC)

___________________

JAKE’S FIREWORKS INC.

Plaintiff – Appellant

v.

UNITED STATES CONSUMER PRODUCT SAFETY

COMMISSION; ALEXANDER HOEHN-SARIC, in

his official capacity as Chairman of the CPSC

Defendants – Appellees

___________________

ORDER

___________________

The petition for rehearing en banc was circulated

to the full court. No judge requested a poll under Fed.

R. App. P. 35. The court denies the petition for rehearing en banc.

For the Court

/s/ Nwamaka Anowi, Clerk

2a

Filed: 06/26/2024

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

___________________

No. 23-1661

___________________

JAKE’S FIREWORKS INC.,

Plaintiff – Appellant,

v.

UNITED STATES CONSUMER PRODUCT SAFETY

COMMISSION; ALEXANDER HOEHN-SARIC, in

his official capacity as Chairman of the CPSC,

Defendants – Appellees.

___________________

Appeal from the United States District Court for the

District of Maryland, at Greenbelt. Theodore D.

Chuang, District Judge. (8:21-cv-02058-TDC)

___________________

Argued: May 8, 2024

Decided: June 26, 2024

___________________

Before DIAZ, Chief Judge, WILKINSON, Circuit

Judge, and MOTZ, Senior Circuit Judge.

___________________

Affirmed by published opinion. Judge Motz wrote the

opinion, in which Chief Judge Diaz and Judge Wilkinson joined.

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___________________

ARGUED: Oliver J. Dunford, PACIFIC LEGAL

FOUNDATION, Palm Beach Gardens, Florida, for

Appellant. Daniel Tenny, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. ON BRIEF: Damien M. Schiff, Sacramento,

California, Molly E. Nixon, PACIFIC LEGAL FOUNDATION, Arlington, Virginia; Timothy L. Mullin, Jr.,

Dwight W. Stone II, MILES & STOCKBRIDGE PC,

Baltimore, Maryland, for Appellant. Brian M.

Boynton, Principal Deputy Assistant Attorney General, Cynthia A. Barmore, Civil Division, UNITED

STATES DEPARTMENT OF JUSTICE, Washington,

D.C.; Erek L. Barron, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore, Maryland, for Appellees.

___________________

DIANA GRIBBON MOTZ, Senior Circuit Judge:

Jake’s Fireworks Inc., a large importer and distributer of consumer fireworks, seeks judicial review of

several warning notices it received from the U.S. Consumer Product Safety Commission. The district court

dismissed the complaint after determining that the

notices do not constitute final agency actions under

the Administrative Procedure Act. For the reasons explained below, we affirm.

I.

Congress created the Consumer Product Safety

Commission (“the Commission” or “the agency”) in

1972 “to protect the public against unreasonable risks

of injury associated with consumer products.” See 15

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U.S.C. §§ 2051(b)(1), 2053(a). The Commission is composed of up to five Commissioners, each appointed by

the President and confirmed by the Senate. Id.

§ 2053(a). The Commission regulates consumer fireworks under the Federal Hazardous Substances Act

and the Consumer Product Safety Act. See id. §§ 2079,

1261(q)(1)(B), 1263(a); id. § 2068(a)(1), (2)(D); see also

16 C.F.R. pt. 1507 (safety regulations for fireworks).

The staff of the Commission includes the Office of

Compliance and Field Operations (“Compliance Office”), which aids in investigatory and enforcement

matters and provides guidance to industry on complying with product safety rules. See 16 C.F.R. § 1000.21.

Jake’s Fireworks Inc. (“Jake’s Fireworks”) is a

large importer and distributer of consumer fireworks.

From 2014 to 2018, the Commission’s staff sampled

fireworks imported by Jake’s Fireworks. About onethird of those samples indicated that the fireworks

were dangerously overloaded with explosive material,

rendering them “ banned hazardous substances” under the agency’s regulations. See 16 C.F.R

§ 1500.17(a)(3); see also Govt. Br. at 5, 11.

The Commission’s Compliance Office accordingly

sent Jake’s Fireworks several “Notice[s] of Non-Compliance.” E.g., J.A. 102.1 These Notices, though

worded slightly differently, all informed Jake’s Fireworks of test results indicating that the fireworks

were banned hazardous substances. The Notices then

stated that “the staff requests that the distribution of

the sampled lots not take place and that the existing

inventory be destroyed.” E.g., J.A. 165. Each Notice

1 Citations to “J.A. __” refer to the Joint Appendix filed by the

parties in this appeal.

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also set forth a procedure for documenting the destruction of the fireworks if Jake’s Fireworks “chose to

destroy the goods” in question, and provided a 90-day

deadline by which to do so. E.g., J.A. 103. The Notices

concluded by warning of potential statutory penalties,

including civil fines and criminal liability, for distributing and selling banned hazardous substances.

Jake’s Fireworks, not pleased with this advice, has

twice sought to obtain judicial review of it. First, in

2019, Jake’s Fireworks sued the Commission in federal court, seeking injunctive and declaratory relief

from the agency’s enforcement of its fireworks regulations via the Notices. The district court determined

that the Notices did not rise to the level of reviewable

final agency actions under the Administrative Procedure Act because the Notices did not consummate the

Commission’s decisionmaking process. See Jake’s

Fireworks Inc. v. U.S. Consumer Prod. Safety

Comm’n, 498 F. Supp. 3d 792, 806-07 (D. Md. 2020).

In reaching this conclusion, the court relied on two rationales. First, the court noted that Jake’s Fireworks

could request an informal hearing with the Compliance Office to seek reconsideration of the Notices. Id.

at 803, 806. Second, the court determined that the

Commission, not its Compliance Office, had final decisionmaking authority on whether to pursue legal enforcement. Id. at 803. Because the Notices thus represented only the “intermediate ruling[s] of a subordinate official,” the court dismissed the lawsuit without

prejudice for lack of jurisdiction. Id. at 803, 807.

Following the dismissal of its first lawsuit, Jake’s

Fireworks in November 2020 requested an informal

hearing with the Compliance Office to contest the No-

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tices. The Compliance Office declined to hold a hearing or to revisit its findings, and advised Jake’s Fireworks that the Notices expressed only “an initial determination in the Commission’s process.” J.A. 318.

The Compliance Office also stated that the Commission had made no final determination on whether the

products violated the prohibition of dangerously overloaded fireworks at 16 C.F.R. § 1500.17(a)(3).

In response, Jake’s Fireworks again filed suit—

this action—once more challenging the Commission’s

supposed enforcement of its fireworks regulations via

the Notices, and claiming it had been unable to sell

more than $2.6 million dollars’ worth of fireworks for

fear of penalties. The district court again determined

that the Notices did not constitute reviewable final

agency actions because they “only request voluntary

compliance” and because the Compliance Office could

not independently pursue enforcement. Jake’s Fireworks Inc. v. U.S. Consumer Prod. Safety Comm’n, No.

8:21-cv-02058-TDC, 2023 WL 3058845, at *8 (D. Md.

Apr. 24, 2023). The court dismissed the lawsuit without prejudice. Id. at *9. Jake’s Fireworks’s timely appeal of the dismissal of its second lawsuit is now before us.

II.

The only question presented is whether the Notices constitute reviewable final agency actions.

A.

The Administrative Procedure Act (“APA”) waives

the federal government’s sovereign immunity “to permit judicial review of only ‘final agency action[s].’ ”

Nat’l Veterans Legal Servs. Program v. U.S. Dep’t of

Def., 990 F.3d 834, 839 (4th Cir. 2021) (quoting 5

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U.S.C. § 704). Because “sovereign immunity is jurisdictional in nature,” finality under the APA is a jurisdictional requirement. City of New York v. U.S. Dep’t

of Def., 913 F.3d 423, 430 (4th Cir. 2019) (quoting

FDIC v. Meyer, 510 U.S. 471, 475 (1994)) (cleaned up).

We thus review the district court’s finality determination de novo. Id.

An agency action must satisfy two conditions in order to be deemed “final” under the APA: “First, the action must mark the consummation of the agency’s decisionmaking process—it must not be of a merely tentative or interlocutory nature. And second, the action

must be one by which rights or obligations have been

determined, or from which legal consequences will

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

U.S. 590, 597 (2016) (quoting Bennett v. Spear, 520

U.S. 154, 177-78 (1997)) (emphasis added). An action

must meet both prongs of the Bennett test to be final.

Golden & Zimmerman, LLC v. Domenech, 599 F.3d

426, 432 (4th Cir. 2010).

We “first look” to the statutes and regulations that

govern the agency action at issue to determine

whether it is final. See, e.g., Flue-Cured Tobacco Coop.

Stabilization Corp. v. EPA, 313 F.3d 852, 858 (4th Cir.

2002). When examining the consummation prong of

Bennett, “[t]he decisionmaking processes set out in an

agency’s governing statutes and regulations are key

to determining whether an action is properly attributable to the agency itself and represents the culmination of that agency’s consideration of an issue.” Soundboard Ass’n v. FTC, 888 F.3d 1261, 1267 (D.C. Cir.

2018). An action that is “informal, or only the ruling

of a subordinate official, or tentative” ordinarily does

not conclude an agency’s decisionmaking process. Id.

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(quoting Abbott Labs. v. Gardner, 387 U.S. 136, 151

(1967)).

The Compliance Office’s Notices of Noncompliance

are not final—they do not “mark the consummation of

the agency’s decisionmaking process.” See Hawkes,

578 U.S. at 597 (cleaned up). It is the Commission itself, not its Compliance Office, that makes final determinations on whether goods are banned hazardous

substances under the Federal Hazardous Substances

Act and the Consumer Product Safety Act. See 15

U.S.C. §§ 1274(a)–(b), 2064(c)–(d). Only the Commission itself may vote to authorize an administrative

complaint seeking to compel a firm to take corrective

action. 16 C.F.R. § 1025.11(a). Only the Commission

itself may refer matters to the Department of Justice

for potential civil or criminal enforcement in court.

See 15 U.S.C. § 2076(b)(7). Furthermore, the Commission takes these actions in consultation with the Office of the General Counsel, see 16 C.F.R. § 1000.14,

and typically only after providing regulated parties

with notice and an opportunity to be heard, 15 U.S.C.

§§ 1266, 1274(e), 2064(f); 16 C.F.R. § 1119.5.

The Commission’s regulatory scheme provides its

Compliance Office with a role that is subordinate, investigatory, and advisory to the Commission. The

Compliance Office’s responsibilities include “develop[ing] surveillance strategies and programs designed to assure compliance,” “conduct[ing] inspections and in-depth investigations,” “identifying and

addressing safety hazards in consumer products,” and

“promoting industry compliance with existing safety

rules.” 16 C.F.R. § 1000.21. Notices of Noncompliance

fit squarely within the Compliance Office’s advisory

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and investigatory functions. As the agency’s Handbook guide explains, a Notice of Noncompliance “informs the firm of the specific product and violation

that has occurred; requests that the firm take specific

corrective actions[;] . . . and informs the firm of legal

actions available to the Commission.” U.S. Consumer

Prod. Safety Comm’n, The Regulated Products Handbook 5 (May 6, 2013) (“Handbook”). Notices of Noncompliance therefore represent the conclusions and

advice of agency staff, not of the Commission itself.

Thus the Notices from the Compliance Office

hardly constitute the culmination of the Commission’s

decisionmaking process. For a Notice of Noncompliance does not trigger any of the administrative, civil,

or criminal proceedings that the Commission could

pursue. If a party ignores a Notice of Noncompliance,

“the staff may request the Commission approve appropriate legal proceedings, including the issuance of an

administrative complaint.” Id. at 19 (emphasis

added). But the power to make a final determination

as to whether a violation has occurred and whether to

pursue enforcement rests with the Commission itself;

its Compliance Office lacks authority to issue binding

decisions on behalf of the agency. See 15 U.S.C.

§§ 1274(a)–(b), 2064(c)–(d). Nor does any statute, regulation, or Handbook language require the Commission to follow the recommendation of its Compliance

Office. A Notice of Noncompliance thus constitutes

“the ruling of a subordinate official” which, at most,

functions “more like a tentative recommendation than

a final and binding determination.” See Dalton v.

Specter, 511 U.S. 462, 469-70 (1994) (quoting Franklin

v. Massachusetts, 505 U.S. 788, 798 (1992)).

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Jake’s Fireworks nonetheless insists that the Commission has delegated authority to its Compliance Office to issue final determinations on behalf of the

agency. But though the Commission could delegate

this authority to its staff, see 15 U.S.C. § 2076(b)(10),

the Commission has not done so. In arguing to the contrary, Jake’s Fireworks solely relies on 16 C.F.R. §

1000.21, the housekeeping regulation that establishes

the Compliance Office’s general duties. That provision

states that the Compliance Office “conducts compliance and administrative enforcement activities under

all administered acts” and “conduct[s] administrative

litigation.” 16 C.F.R. § 1000.21. The provision lacks

any delegation authorizing the Compliance Office to

issue final orders binding regulated parties, or to

make recommendations that bind the Commission.

Rather Section 1000.21 is entirely consistent with the

Commission’s retention of final decisionmaking authority for itself—the very arrangement that Congress established in the statute. See 15 U.S.C.

§§ 1274(a)–(b), 2064(c)–(d).

Moreover, the Commission reports that it has

made no such delegation to the Compliance Office, either in 16 C.F.R. § 1000.21 or anywhere else. Govt. Br.

at 22, 34. We “pay particular attention” to the Commission’s views on the meaning of 16 C.F.R. § 1000.21

in light of the agency’s obvious expertise in writing

and administering its own regulations. See Vanda

Pharm., Inc. v. Ctrs. for Medicare & Medicaid Servs.,

98 F.4th 483, 491 (4th Cir. 2024) (quoting County of

Maui v. Haw. Wildlife Fund, 590 U.S. 165, 180

(2020)). Given that Jake’s Fireworks’s position would

turn the agency’s decisionmaking hierarchy upside

down, we find the agency’s interpretation far more

persuasive. See id.

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B.

Examination of the language of the Notices confirms that they convey preliminary findings and advice from agency staff rather than a final determination from the Commission itself.2 The Notices informed Jake’s Fireworks that sampling results indicated violations of the agency’s fireworks regulations

and stated that “the staff requests” that Jake’s Fireworks destroy the products. E.g., J.A. 165 (emphasis

added). Subsequent Notices stated that “the staff reiterates its requests.” E.g., J.A. 187-88 (emphasis

added). The Handbook referenced in the Notices explains the advisory nature of the Notices; the Notices

do not command any action. Handbook 5-6. Nor has

the Compliance Office even recommended that the

Commission take enforcement action. Govt. Br. at 24.

Jake’s Fireworks argues that the Notices impose

an obligation because some of them state that the fireworks “must be destroyed within 90 days from the

date of this letter unless an extension of time is requested and approved by” the Compliance Office. J.A.

103. But the same Notice that Jake’s Fireworks

quotes indicates that these procedures for documenting the destruction of the fireworks apply only if

Jake’s Fireworks “chose to destroy the goods.” Id. (emphasis added). Other language in the Notice that

2 Though we think the language of the Notices is consistent

with our conclusion, we are also guided by the process set forth

in the Commission’s governing statutes and regulations. Soundboard Ass’n, 888 F.3d at 1267. Regardless of the language used,

it is clear that the Notices are nonfinal because the agency has

yet to take the steps required before it can order Jake’s Fireworks to take action.

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Jake’s Fireworks points to—for example, “it is a prohibited act to introduce or deliver . . . or receive in interstate commerce any banned hazardous substance,”

J.A. 103-04—merely track the general statutory prohibition on selling such substances. See 15 U.S.C. §§

1263(a), (c). In sum, the Commission’s Compliance Office simply lacks authority to issue binding final orders on behalf of the Commission itself, or to independently pursue enforcement action, rendering this

90-day deadline advisory.

Indeed, when the Commission itself does issue orders, it says so, stating that they are “final decisions

and orders” to perform clearly binding commands.

See, e.g., Final Decision and Order, In re Zen Magnets,

LLC, CPSC Docket No. 12–2, at 1, 54-56 (C.P.S.C. Oct.

26, 2017) (ordering that Zen Magnets “shall cease”

from selling certain products). The agency’s final orders come from the Commission itself, not agency staff

in the Compliance Office, and issue only after the

Commissioners have voted to authorize an administrative complaint and an administrative law judge

has held a hearing. See id. at 1, 4-6, 56. None of that

has happened here.

In an attempt to salvage its case, Jake’s Fireworks

relies on precedents arising from other regulatory contexts, each of which differs markedly from the one before us today. For example, Sackett v. EPA concerned

a compliance order issued via EPA’s authority to enter

binding administrative orders under the Clean Water

Act. 566 U.S. 120, 123 (2012) (citing 33 U.S.C. §

1319(a)(3)). But here the Compliance Office lacks authority to issue binding orders independently of the

Commission and the process set forth in its governing

framework. And in U.S. Army Corps of Engineers v.

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Hawkes Co., the Army Corps’s own regulations

deemed the jurisdictional determination at issue a “final agency action.” 578 U.S. at 598 (quoting 33 C.F.R.

§ 320.1(a)(6)). Here, in contrast, the Commission’s

Handbook clarifies the Notices are only advisory.

Handbook 5, 19. The Notices also have little in common with legislative rules or final certifications issued

by federal and state agencies after notice-and-comment. See Abbott Labs., 387 U.S. at 138; Sierra Club

v. W. Va. Dep’t of Env’t Prot., 64 F.4th 487, 496-98, 500

(4th Cir. 2023).3

The Notices at issue here simply do not represent

the Commission’s last word on this matter. They

merely provide preliminary findings and warnings by

agency staff, like countless other letters and guides

that federal agencies issue throughout the year. The

position that Jake’s Fireworks advances “would

quickly muzzle any informal communications between agencies and their regulated communities—

communications that are vital to the smooth operation

of both government and business.” See Golden, 599

F.3d at 432 (quoting Indep. Equip. Dealers Ass’n v.

EPA, 372 F.3d 420, 428 (D.C. Cir. 2004) (Roberts, J.)).

If the APA made informal advice like these Notices

subject to judicial review, it seems “likely that many

3 The out-of-circuit cases on which Jake’s Fireworks relies

similarly provide it little support. See Ipsen Biopharm., Inc. v.

Azar, 943 F.3d 953, 956 (D.C. Cir. 2019) (agency did not dispute

Bennett’s consummation prong); S.F. Herring Ass’n v. U.S. Dep’t

of Interior, 946 F.3d 564, 567-68, 578 (9th Cir. 2019) (warning

letters became reviewable once Park Service officers relied on

them to order fishermen to stop fishing); CSI Aviation Servs., Inc.

v. U.S. Dep’t of Transp., 637 F.3d 408, 412 (D.C. Cir. 2011)

(agency warning letter ripe for review when “taken together”

with corresponding final exemption order).

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voluntary and helpful comments from agency staff

would be withheld altogether.” See Sanitary Bd. of

Charleston v. Wheeler, 918 F.3d 324, 338 (4th Cir.

2019). We decline to adopt that view today.4

III.

For the reasons set forth above, the judgment of the

district court is

AFFIRMED.

4 Because the Notices do not consummate the agency’s decisionmaking process, we need not determine if they have “direct

and appreciable legal consequences” under the regulatory

scheme. See Hawkes, 578 U.S. at 598 (quoting Bennett, 520 U.S.

at 178).

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Filed 04/24/23

UNITED STATES DISTRICT COURT

DISTRICT OF MARYLAND

JAKE’S FIREWORKS INC.,

Plaintiff,

v.

UNITED STATES CONSUMER

PRODUCT SAFETY COMMISSION and ALEXANDER

HOEHN-SARIC, in his official

capacity,

Civil Action No.

TDC-21-2058

Defendants.

_______________________________

ORDER

For the reasons set forth in the accompanying

Memorandum Opinion, it is hereby ORDERED that:

1. Defendants’ Motion to Dismiss, ECF No. 16, is

GRANTED.

2. The case is DISMISSED WITHOUT PREJUDICE.

3. The Clerk shall close the case.

Date: 4/21/2023

s/ Theodore D. Chuang

THEODORE D. CHUANG

United States

District Judge

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Filed 04/24/23

UNITED STATES DISTRICT COURT

DISTRICT OF MARYLAND

JAKE’S FIREWORKS INC.,

Plaintiff,

v.

UNITED STATES CONSUMER

PRODUCT SAFETY COMMISSION and ALEXANDER

HOEHN-SARIC, in his official

capacity,

Civil Action

No. TDC-212058

Defendants.

_______________________________

MEMORANDUM OPINION

For the second time, Plaintiff Jake’s Fireworks Inc.

(“Jake’s Fireworks”) has filed a civil action in this

Court alleging that the United States Consumer Product Safety Commission and its Chairman (collectively

“the CPSC”) have applied certain regulations and

testing procedures to its “Excalibur” line of fireworks

in an arbitrary and capricious manner, in violation of

the Administrative Procedure Act (“APA”), 5 U.S.C. §

706 (2018). Jake’s Fireworks seeks declaratory and injunctive relief as well as attorney’s fees and costs. The

CPSC has filed a Motion to Dismiss for lack of subject

matter jurisdiction, which is fully briefed. Having reviewed the submitted materials, the Court finds that

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no hearing is necessary. See D. Md. Local R. 105.6. For

the reasons set forth below, Defendants’ Motion to

Dismiss will be GRANTED.

BACKGROUND

The factual background and procedural history of

this dispute prior to October 2020, as well as the relevant legal framework, are set forth in detail in the

opinion of the Court in Jake’s Fireworks’s first civil

action against the CPSC, Jake’s Fireworks v. CPSC

(“Jake’s Fireworks I ”), 498 F. Supp. 3d 792 (D. Md.

2020), in which Judge Paul W. Grimm dismissed a

nearly identical case for lack of subject matter jurisdiction because there had been no final agency action.

Id. at 799-800. Judge Grimm’s opinion in Jake’s Fireworks I is incorporated by reference in its entirety,

and this Court will therefore only summarize the pre2020 background and will focus on the events following the issuance of that opinion.

I. Notices of Non-Compliance

Jake’s Fireworks is among the largest importers

and distributors of consumer fireworks in the United

States, with distribution centers in seven states from

which it sells fireworks to consumers in over 20 states.

Among the consumer fireworks sold by Jake’s Fireworks are those classified as “reloadable aerial shell”

fireworks, which are shot from a mortar tube or

launch tube. Compl. ¶ 19, ECF No. 1. Reloadable aerial shell fireworks are classified as either “Display

fireworks,” which must be launched by licensed operators, or as “Consumer fireworks,” which may be

launched by ordinary consumers. Id.

At various points from 2014 to 2019, Compliance

Officers from the CPSC Office of Compliance and

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Field Operations (“OCFO”) issued to Jake’s Fireworks

multiple Notices of Non-Compliance (“Notices”),

sometimes referred to by the CPSC as Letters of Advice, which asserted that certain reloadable aerial

shell fireworks violated regulations under the Federal

Hazardous Substances Act (“FHSA”), 15 U.S.C.

§ 1261(q)(l)(B) (2018), particularly based on the finding from sample testing that they were “intended to

produce audible effects’’ and “the audible effect is produced by a charge of more than 2 grains of pyrotechnic

composition.” 16 C.F.R. § 1500.17 (2023); Compl. ¶ 66.

Jake’s Fireworks has responded to the Notices by requesting that the CPSC rescind the Notices based on

its position that its reloadable Aerial Shell Fireworks

(“the Aerial Shell Fireworks”) are not banned hazardous substances because they are not “fireworks devices intended to produce audible effects,” 16 C.F.R. §

1500.17(a)(3), and that the CPSC’s testing methodology is improper. Though the OCFO staff at one point

agreed to re-test certain of the sampled fireworks

products and on that basis rescinded some of the relevant Notices, Compl. ¶ 74, the OCFO staff continued

to conduct sample tests on the Aerial Shell Fireworks

and to issue Notices to Jake’s Fireworks.

Pursuant to procedures outlined in the OCFO Regulated Products Handbook (“the Handbook”), Jake’s

Fireworks made written submissions in support of its

position and also received an in-person meeting with

OCFO Director Robert Kaye and OCFO staff on December 14, 2017. At the meeting, however, the staff

reiterated that they intended to enforce the existing

regulations as they understood them. Since the meeting, OCFO has continued to issue Notices. For example, an April 9, 2019 Notice, signed by an OCFO Compliance Officer, stated that based on certain testing,

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“the sampled lot is a banned hazardous substance” under FHSA regulations, and that “the staff requests

that the distribution of the sampled lots . . . not take

place and that the existing inventory be destroyed.”

4/9/19 Notice at 3, Compl. Ex. L, ECF No. 1-12. It further outlined certain steps that must be followed, if

Jake’s Fireworks chose to destroy the inventory, in order to provide proper documentation. The April 9,

2019 Notice also warned Jake’s Fireworks that selling

a banned hazardous substance would violate the law

and subject it to civil penalties and possibly criminal

prosecution. Finally, the Notice informed Jake’s Fireworks that if it disagrees with the OCFO staff ’s position, it can follow the procedure in the Handbook to

present its views and supporting evidence, and it requested a response on how Jake’s Fireworks would respond to the Notice. As a result of the Notices, Jakes’s

Fireworks asserts that it has not sold the Aerial Shell

Fireworks alleged to be banned hazardous substances, which has caused it significant financial

harm.

II. Jake’s Fireworks I

In 2019, Jake’s Fireworks filed Jakes Fireworks I,

alleging that the CPSC’s Notices and determinations

that the Aerial Shell Fireworks violated the FHSA

constituted arbitrary and capricious agency action in

violation of the APA and also violated Jake’s Fireworks’s right to due process of law under the Fifth

Amendment to the United States Constitution. Jake’s

Fireworks I, 498 F. Supp. 3d at 800. The CPSC filed a

motion to dismiss for lack of subject matter jurisdiction in which it argued that the Notices did not constitute “final agency action” as is required before a plaintiff may file a civil action under the APA. See 5 U.S.C.

20a

§ 704.

To determine whether the CPSC’s actions constituted final agency action, Judge Grimm applied the

two-pronged approach mandated by Bennett v.

Spear, 520 U.S. 154 (1997), which requires that (1) the

action mark the “consummation of the agency’s decisionmaking process”; and (2) the action be “one by

which rights or obligations have been determined, or

from which legal consequences will flow.” Id. at 178

(citations omitted); see Jake’s Fireworks I, 498 F.

Supp. 3d at 802. As to the first prong, Judge Grimm

concluded that the Notices were not the “consummation of the Commission’s decision-making process.”

Jake’s Fireworks I, 498 F. Supp. 3d at 806. In particular, Judge Grimm found that the Notice at issue was

“an intermediate ruling of a subordinate official” who

lacked the “independent authority to initiate enforcement action that could expose Jake’s Fireworks to civil

or criminal penalties without first obtaining the approval of the Commission’s Office of the General

Counsel.” Id. at 803. Rather, as noted in the Handbook, if the subject of a Notice “declines to take corrective action, the staff may request the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint, injunctive action, seizure action, or such other action as may be appropriate.” Id. Judge Grimm noted that although after discussions with the subject of the Notice, the

CPSC staff “may request that the Commission . . . approve appropriate legal proceedings and, generally,

will provide a written notification before that happens,” “[no] enforcement proceedings have been initiated, and the Notice does not indicate in any way that

an enforcement action will be pursued by the staff.”

Id. at 804. Judge Grimm further noted that “[w]hile

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the process may be nearing its end, there are still

steps that Jake’s Fireworks may take, such as request

a hearing or reconsideration.” Id. at 806. Because Bennett requires that both prongs be satisfied, Judge

Grimm concluded that the failure to satisfy the first

prong warranted dismissal for lack of subject matter

jurisdiction. Id. at 806-07.

I.

Post-Jake’s Fireworks I Events

Since Jake’s Fireworks I, Jake’s Fireworks has

taken additional steps. In a November 13, 2020 letter

to OCFO Director Kaye, Jake’s Fireworks requested

that OCFO either inform it of what steps it could take

to “perfect the informal hearing process,” including requesting another meeting, or confirm that Jake’s Fireworks had “exhausted [its] administrative appeals

and that your determinations expressed in the Notices

stand.” 11/13/20 Letter at 2-3, Compl. Ex. N, ECF No.

1-14. In a responsive letter dated December 16, 2020,

Director Kaye clarified that while the lots of imported

fireworks referenced in the Notice were conditionally

released to Jake’s Fireworks under an “import and entry bond,” OCFO staff had never requested that U.S.

Customs and Border Protection (“CBP”) take any action such as demanding the return of the fireworks,

the conditional release periods had all expired, and as

a result neither OCFO staff nor CBP could take further action regarding the bonds such as to require the

return of the fireworks. 12/16/20 Letter at 1, Compl.

Ex. O, ECF No. 1-15. Director Kaye further stated

that Notices “are an initial determination in the Commission’s process,” and that “issuance of a Notice of

Non-Compliance by a Compliance Officer does not

constitute a final determination by the Commission

subject to enforcement in federal court, nor does it

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complete the agency’s decision-making process.” Id. at

1-2. Director Kaye noted that Jake’s Fireworks could

still submit “information bearing upon the samples’

compliance with the requirements of 16 C.F.R. §

1500.17(a)(3).” Id. He further clarified that in order to

take an enforcement action, OCFO staff would have to

refer the matter to the CPSC Office of the General

Counsel (“OGC’’), and that the five-member Commission (“the Commission”) would have to approve any

recommendation for a referral for an enforcement action. Director Kaye also informed Jake’s Fireworks

that if an enforcement action were to be taken by the

CPSC, whether to seek civil penalties or an injunction,

Jake’s Fireworks would be notified in writing prior to

the commencement of any such enforcement action.

Thus, Director Kaye concluded “there has been no final determination by the Commission with respect to

the samples identified in the Notices.” Id. at 3.

In a letter dated January 11, 2021, Jake’s Fireworks reiterated its request that Director Kaye confirm that it had exhausted the informal hearing process or, in the alternative, that the CPSC grant Jake’s

Fireworks an in-person hearing with CPSC staff or

confirm that it is free to sell the Aerial Shell Fireworks

“without risk of civil or criminal penalties.” 1/11/21

Letter at 6, Compl. Ex. P, ECF No. 1-16. Jake’s Fireworks also re-stated its arguments on the non-applicability of 16 C.F.R. § 1500.17(a)(3) to the Aerial Shell

Fireworks, including by stating that its reloadable

Aerial Shell Fireworks are not “intended to create an

audible effect.” 1/11/21 Letter at 5. Director Kaye responded by sending a letter on February 8, 2021 in

which he stated that the request for a hearing was

“premature” because the CPSC had “made no final determination regarding Jake’s or the samples that were

23a

the subject of the Notices.” 2/8/21 Letter at 1, Compl.

Ex. Q, ECF No. 1-17.

II.

The Complaint

On August 13, 2021, Jake’s Fireworks again filed

suit to challenge the Notices based on its position that

the agency action is now final. Jake’s Fireworks asserts three counts of violations of the APA based on

alleged arbitrary and capricious agency actions arising from the Notices, including (1) the CPSC’s application of 16 C.F.R. § 1500.17(a)(3) to deem the Aerial

Shell Fireworks to be banned hazardous substances

under the FHSA; (2) the CPSC’s imposition of a labeling

requirement

pursuant

to

16

C.F.R.

§ 1500.14(b)(7); and (3) the CPSC’s use of a particular

test to assess fireworks’ compliance with the regulations. The Notices at issue, as attached to the Complaint are those dated August 19, 2014; September 18,

2018; December 20, 2018; and April 9, 2019. Compl.

Exs. C, E, K, L, ECF Nos. 1-3, 1-5, 1-11, 1-12. Jake’s

Fireworks seeks declaratory and injunctive relief to

prevent CPSC from applying 16 C.F.R. § 1500.17(a)(3)

and 16 C.F.R. § 1500.14(b)(7) to its Aerial Shell Fireworks.

In the Complaint, Jake’s Fireworks alleges that

Director Kaye’s letters of December 16, 2020 and February 8, 2021, along with the earlier Notices, demonstrate that the CPSC has taken final agency action on

the issues underlying the Complaint. Jake’s Fireworks argues that these communications demonstrate

that the CPSC’s decision-making process has in fact

been consummated, and that the failure to acknowledge that it is complete is a “strategy to evade judicial

review permanently while prohibiting Jake’s [Fireworks] from selling its lawful products.” Compl. ¶ 91.

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As a result, Jake’s Fireworks faces “clear legal jeopardy” and is deprived “of the ability to avail itself of

significant business opportunities with respect to the

affected products.” Compl. ¶ 89.

DISCUSSION

In its Motion to Dismiss, the CPSC alleges that

this case should be dismissed for lack of subject matter jurisdiction because (1) Jake’s Fireworks lacks

standing; (2) any agency action is not final and is

therefore unreviewable; and (3) the matter is not ripe.

I.

Legal Standard

Federal Rule of Civil Procedure 12(b)(1) allows a

defendant to move for dismissal for lack of subject

matter jurisdiction. When a defendant asserts that

the plaintiff has failed to allege facts sufficient to establish subject matter jurisdiction, the allegations in

the complaint are assumed to be true under the same

standard as in a Rule 12(b)(6) motion, and “the motion

must be denied if the complaint alleges sufficient facts

to invoke subject matter jurisdiction.” Kerns v. United

States, 585 F.3d 187, 192 (4th Cir. 2009). When a defendant asserts that facts outside of the complaint deprive the court of jurisdiction, the Court “may consider

evidence outside the pleadings without converting the

proceeding to one for summary judgment.” Velasco v.

Gov’t of Indonesia, 370 F.3d. 392, 398 (4th Cir. 2004);

Kerns, 585 F.3d at 192. A court should grant a Rule

12(b)(1) motion based on a factual challenge to subject

matter jurisdiction “only if the material jurisdictional

facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Evans v. B.F. Perkins Co., Div. of Standex Int’l Corp., 166 F.3d 642, 647

(4th Cir. 1991) (quoting Richmond, Fredericksburg &

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Potomac R. Co. v. United States, 945 F.2d 765, 768

(4th Cir. 1991)). It is the plaintiff ’s burden to show

that subject matter jurisdiction exists. Evans, 166

F.3d at 647.

II.

The Regulatory Scheme

Before considering the specific arguments in the

Motion, the Court first identifies the statutory and

regulatory framework at issue. “The decisionmaking

processes set out in an agency’s governing statutes

and regulations are key to determining whether an action is properly attributable to the agency and represents the culmination of that agency’s consideration of

an issue.” Soundboard Ass’n v. Fed. Trade Comm’n,

888 F.3d 1261, 1267 (D.C. Cir. 2018).

The CPSC and CBP, a component agency of the

United States Department of Homeland Security,

jointly operate a monitoring program for imported

goods under which they have authority to examine

samples of an imported product, determine if it is a

banned hazardous substance under the FHSA, and

then order any such product destroyed or exported

back out of the United States. 15 U.S.C. § 2066(h);

§§ 1273(a), (b). Under this system, imported goods

subject to examination may be conditionally released

to the importer on a bond pending a decision on

whether the product at issue constitutes a banned

hazardous substance. 15 U.S.C. § 1273(b). Pursuant

to the bond, the importer agrees that conditionally released imported product must be returned to CBP if a

determination is made that the product fails to comply

with laws such as the FHSA and CBP makes a demand for redelivery of the product within 30 or 60

days after the initial release of the product. 19 C.F.R.

§ 113.62(d). At that point, CBP may order that the

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product be destroyed, that it be modified if that would

bring the product into compliance with the FHSA, or,

upon application of the product owner or importer,

that it may be exported back out of the United States.

15 U.S.C. §§ 2066(c), (e). Before such action is taken,

the owner is notified in writing that the product is

subject to refusal of admission, and there may be an

informal hearing on the product’s admissibility or on

whether modification could bring the product into

compliance with the FHSA. 16 C.F.R. § 1500.268. If,

at the conclusion of this process, the owner does not

destroy the product, the owner is liable for the costs of

destruction by the United States government. 15

U.S.C. § 2066(f).

Because conditional release bonds expire within 30

to 60 days, 19 C.F.R. § 113.62(d), CBP must make a

determination on the admissibility of the product

within that time period. After the expiration of the

conditional release bond, the product may be subject

to “liquidation” by CBP in that any duties are finally

computed and the product enters interstate commerce. 19 C.F.R. § 159.1. After liquidation, CBP may

not demand the return of product, even if the product

was previously subject to a conditional release bond.

19 C.F.R. § 141.113(h) (establishing the time limitation on demands for return to CBP custody); id.

§ 141.113(d) (authorizing CBP to demand the return

of unliquidated products to CBP custody). With limited exceptions not relevant here, all imported products are deemed liquidated by operation of law one

year after the date of entry to the United States. 19

C.F.R. § 159.11. At that point, CBP’s border authority

to order imported products destroyed or exported out

of the United States on the basis that they violate the

FHSA ends. Id. § 141.113(h).

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After the product is deemed to have cleared the

border and entered interstate commerce, a different

regime applies based on the CPSC’s authority to enforce the FHSA as to products in domestic commerce.

If after importation the product is still believed to be

a banned hazardous substance, the CPSC may order

that the seller give notice to consumers that the product is hazardous; that the seller make modifications to

bring the product into compliance; or that the seller

replace or refund the banned hazardous product. 15

U.S.C. § 1274(a), (b). Those remedies must be ordered

by the Commission and only after notice and the opportunity for a formal hearing on the record. 15 U.S.C.

§ 1274(e); 16 C.F.R. § 1025.1 (providing that remedies

under 15 U.S.C. § 1274 “are required by statute to be

determined on the record after opportunity for public

hearing”).

Alternatively, the CPSC may seek seizure of the

product, civil penalties, or injunctive relief through an

enforcement action in federal court. 15 U.S.C.

§§ 1264(c), 1265, 1267. To pursue such an action,

OCFO must make a recommendation as to what specific enforcement action should be sought; OCFO itself

does not carry out mandatory enforcement actions or

proceedings in federal court. 16 C.F.R. § 1000.21. Any

enforcement action for civil penalties in federal court

is subject to a review by OGC and Commission approval before the commencement of the action. 15

U.S.C. § 2076(b)(7)(A); 16 C.F.R. § 1000.14. Before the

CPSC seeks a civil penalty, the product owner must

be notified in writing and is entitled to submit evidence and arguments against the imposition of a civil

penalty and the particular penalty amount. 16 C.F.R.

§ 1119.5. Finally, the Commission, advised by OGC,

28a

may refer the matter to the U.S. Department of Justice (“DOJ’’) for criminal investigation or prosecution.

15 U.S.C. § 1264(a), 1266, 2076(b)(7)(B); 16 C.F.R.

§ 1000.14. By statute, the CPSC must provide “appropriate” notice and an opportunity to present oral or

written information before it reports the violation to

DOJ for prosecution. 15 U.S.C. § 1266.

Here, the Aerial Shell Fireworks were subject to a

60-day bond. Notice of Conditional Release at 1,

Compl. Ex. A, ECF No. 1-1; 19 C.F.R. § 113.62(d). As

noted by Director Kaye in his December 16, 2020 letter, CBP has not directed that Jake’s Fireworks destroy or export the Aerial Shell Fireworks out of the

country, and the bonds relating to the fireworks at issue in the Notices have expired, as has period of time

to CBP to direct such action. 12/16/20 Letter at 1. Accordingly, the CPSC’s issuance of the Notices are

properly construed as pursuant to the CPSC’s domestic authority as outlined above.

III.

Standing

As an initial matter, the CPSC argues that Jake’s

Fireworks lacks standing to seek injunctive relief because it is not under threat of an injury in fact based

on the Notices. Because Article III of the Constitution

limits the jurisdiction of federal courts to “Cases” and

“Controversies,” plaintiffs in federal civil actions must

demonstrate standing to assert their claims. Lujan v.

Defs. of Wildlife, 504 U.S. 555, 560 (1992). The “irreducible constitutional minimum” requirements of

standing consist of three elements: (1) the plaintiff

must have suffered an “injury in fact”; (2) the injury

must be fairly traceable to the actions of the defendant; and (3) it must be “likely’’ that the injury will be

29a

“redressed by a favorable decision.” Id. at 560-61 (citations omitted). “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of

a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural

or hypothetical.” Spokeo, Inc. v. Robins, 578 U.S. 330,

339 (2016). In the present case, only the first two

prongs are at issue.

Jake’s Fireworks has successfully alleged an injury in fact traceable to the Notices. The Notices identify the Aerial Shell Fireworks as banned hazardous

substances, and based on the warnings provided in

the Notices themselves, Jake’s Fireworks faces potential civil and criminal penalties if it sells those fireworks. Jake’s Fireworks has asserted that based on

the Notices, it has refrained from selling the Aerial

Shell Fireworks that are subject to the Notices, which

have a value of over $2.6 million, and has lost the ability to “avail itself of significant business opportunities” relating to such fireworks. Compl. ¶ 89. Where

Jake’s Fireworks has withheld its products from commerce as a direct consequence of its receipt of the Notices, this economic loss is fairly traceable to the

CPSC. Where the voluntary compliance regime evidenced by the Notices is intended to produce this exact

effect of causing companies to refrain from selling potentially offending products, the CPSC cannot credibly claim that Jake’s Fireworks has not suffered an

injury traceable to the Notices. See Spirit Airlines,

Inc. v. U.S. Dep’t of Transp., 997 F.3d 1247, 1253 n.3

(D.C. Cir. 2021) (finding that a regime for voluntary

compliance with approved airline schedules for Newark International Airport was not truly voluntary

where the Federal Aviation Administration warned

30a

that deviation from the schedule could result in a return to strict controls because a “request for help

backed by a threat hardly seems a call for voluntary

action”).

Even if the economic loss resulting from the failure

to sell the fireworks were deemed to be the result of a

purely voluntary choice, Jake’s Fireworks still faces

an imminent injury because if it were to sell the fireworks in defiance of the Notices, as it has stated that

it would do in the absence of the Notices, it would

likely face civil penalties. Opp’n at 11-12, ECF No. 17;

see, e.g., 4/9/19 Notice at 4. As Jake’s Fireworks points

out, certain courts have found that the facts that fireworks failed a CPSC test and Notices were issued can

constitute evidence that a violation was “knowing” for

purposes of civil penalty actions in federal court. See,

e.g., United States v. Shelton Wholesale, Inc., No. 966131-CV-SJ, 1998 WL 251273, at *3, *11 (W.D. Mo.

1998). Thus, the injury here, whether actual or imminent, is not conjectural or hypothetical, nor is it based

on a “speculative chain of possibilities.” Clapper v.

Amnesty Int’l USA, 568 U.S. 398, 414 (2012). Where

the injury is also traceable to the issuance of the Notices, Jake’s Fireworks has established standing to

seek injunctive relief.

IV.

Final Agency Action

Jake’s Fireworks contends that in light of the two

most recent letters by Director Kaye in which he denied its request for a finality determination, the Notices are effectively final agency actions as defined in

the APA, which includes an agency ‘‘order,” ‘‘sanction,” or denial of “relief.” 5 U.S.C. § 551(13). CPSC

contends that the Notices are not agency actions at all,

and that if they are agency actions, they are not “final

31a

agency action[s]” suitable for judicial review. Mot.

Dismiss at 14, ECF No. 16-1. This Court will assume

without deciding that the Notices were agency actions

and will instead focus on the issue of whether they

were final agency actions. Jake’s Fireworks I, 498 F.

Supp. 3d at 805.

Standing is a constitutional inquiry; the APA’s final agency action requirement is statutory. 5 U.S.C.

§ 704. Nevertheless, a final agency action is a jurisdictional requirement in an APA action. City of New York

v. U.S. Dep’t of Defense, 913 F.3d 423, 430 (4th Cir.

2019); Am. Acad. of Pediatrics v. Food & Drug Admin.,

379 F. Supp. 3d 461, 474 (D. Md. 2019). The United

States Supreme Court has established a two-pronged

test to determine whether an agency’s action is final.

“First, the action must mark the consummation of the

agency’s decisionmaking process” and “must not be of

a merely tentative or interlocutory nature.” Bennett,

520 U.S. at 177-78. Second, “the action must be one by

which rights or obligations have been determined or

from which legal consequences will flow.” Id. Both

prongs must be satisfied before a court may review

purported agency action. Golden & Zimmerman, LLC

v. Domenech, 599 F.3d 426, 432 (4th Cir. 2010).

In its Motion, the CPSC argues that no final

agency action has been taken or consummated in the

form of an enforcement action, and that any future enforcement action requires independent decision-making by entities other than OCFO staff, including the

Commission itself. In Jake’s Fireworks I, Judge

Grimm already determined that the Notices were not

“consummation of the Commission’s decision-making

process.” Jake’s Fireworks I, 498 F. Supp. 3d at 806.

Rather, the Notices constitute “intermediate ruling[s]

32a

of a subordinate official” who lacked the “independent

authority to initiate enforcement action that could expose Jake’s Fireworks to civil or criminal penalties

without first obtaining the approval of the Commission’s Office of the General Counsel.” Id. at 803. That

ruling remains sound and will not be revisited. In this

new case, Jake’s Fireworks argues that the first prong

is now satisfied because (1) Judge Grimm stated in

Jake’s Fireworks I that “[w]hile the process may be

nearing its end, there are still steps that Jake’s Fireworks may take, such as request a hearing, or reconsideration,” id. at 806; and (2) since that ruling, Jake’s

Fireworks has, in fact, made a request for a hearing

that was denied by Director Kaye, such that there are

no further steps that Jake’s Fireworks can take to appeal or otherwise challenge the determinations made

in the Notices.

This argument misreads Jake’s Fireworks I and

the statutory scheme underlying the CPSC’s enforcement of the FHSA. Judge Grimm’s observation that

Jake’s Fireworks still needed to request a hearing in

relation to one of the Notices identified a necessary,

but not sufficient, condition to consummate the

agency’s decision. Those steps arguably would exhaust available procedures within OCFO; they do not

demonstrate that CPSC has taken a final agency action. Darby v. Cisneros, 509 U.S. 137, 144 (1993) (stating that “the judicial doctrine of exhaustion of administrative remedies is conceptually distinct from the

doctrine of finality”).

While the Notices state that the OCFO staff ’s position is that the Aerial Shell Fireworks are banned

hazardous substances under the FHSA, they do not

actually order Jake’s Fireworks to take any action.

33a

Rather, each Notice takes the same approach: it requests destruction of the fireworks and mandates the

procedures for destruction should Jake’s Fireworks

choose to take that action, and it warns of the possibility of legal action if Jake’s Fireworks sells banned

hazardous substances to the public. For example, in

the September 18, 2018 Notice, an OCFO Compliance

Officer stated that OCFO “requests that the distribution of the [fireworks] not take place and that the existing inventory be destroyed,” then informed Jake’s

Fireworks that if it “chose to destroy the goods,” it

must take certain steps to confirm compliance with local requirements for safe destruction. 9/18/18 Notice

at 2, Compl. Ex. C, ECF No. 1-3. Likewise, in the December 20, 2018 Notice, the OCFO Compliance Officer

“request[ed] that the distribution of the sampled lots

. . . not take place and that the existing inventory be

destroyed.” 12/20/18 Notice at 2, Compl. Ex. K, ECF

No. 1-11. Though the Notices and the Handbook procedures allow the product owner to submit additional

information and to request an informal hearing with

the OCFO staff, see, e.g., 9/18/18 Notice at 3; Handbook at 18, Compl. Ex. B, ECF No. 1-2, the completion

of any such processes does not end the agency’s activities. At this point, all that has occurred is that the

OCFO staff has requested voluntary compliance. See

Holistic Candlers Consumers Ass’n v. Food & Drug

Admin., 664 F.3d 940, 942, 944 (D.C. Cir. 2012) (holding that Food and Drug Administration “Warning Letters” sent to manufacturers and distributors of ear

candles which stated that the agency considered the

candles to be “adulterated and misbranded medical

devices” did not constitute final agency action because

they provided an opportunity for voluntary corrective

action before any enforcement action was taken and

34a

stated only that the failure to correct deviations “may”

result in enforcement action and that the parties

“should” take action to correct deviations). As discussed above, if the subject of the Notice “continues to

disagree with CPSC staff and declines to take corrective action, the staff may request the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint, injunctive action, seizure action, or such other action as may be appropriate.” Handbook at 18-19; Jake’s Fireworks I,

498 F. Supp. 3d at 803.

To pursue an administrative enforcement action,

the OCFO staff would have to secure approval from

the Commission itself, which could commence and impose an administrative enforcement action only after

notice and an opportunity to be heard. 15 U.S.C.

§ 1274(e). To pursue either civil penalties or criminal

prosecution in federal court, the OCFO staff would

have to make a recommendation to the Commission,

which would consult with OGC to make a determination of whether to refer the matter to DOJ, and any

such referral would occur only with notice and an opportunity to be heard provided to the product owner.

Jake’s Fireworks I, 498 F. Supp. 3d at 803; 15 U.S.C.

§§ 1264(a), 1266, 2076; 16 C.F.R. § 1000.14. Thus,

OCFO, even if it has completed its assessment of

whether the Aerial Shell Fireworks constitute banned

hazardous substances, does not have the final word

within the CPSC on that issue.

The facts that the Notices only request voluntary

compliance, and that under the applicable statutory

and regulatory regime, the Commission itself or OGC

must act before any enforcement action may proceed,

demonstrate that no final agency action has occurred.

35a

In Reliable Automatic Sprinkler Co. v. Consumer

Product Safety Commission, 324 F.3d 726 (D.C. Cir.

2003), a manufacturer of automatic sprinkler heads

challenged the CPSC’s preliminary determination, expressed in a letter to the manufacturer requesting voluntary corrective action, that the sprinkler heads presented a “substantial product hazard” in violation of

the Consumer Product Safety Act (“CPSA”), 15 U.S.C.

§ 2064(a). Reliable Automatic Sprinkler, 324 F.3d at

730. After the company filed suit seeking a declaratory judgment that its product did not violate the

CPSA, the court upheld the dismissal of the case

based on the lack of a final agency action because

“[t]he agency ha[d] not yet made any determination or

issued any order imposing any obligation” on the company, and “the agency ha[d] not yet taken the steps

required under the statutory and regulatory scheme

for its actions to have any legal consequences.” Id. at

732. In particular, CPSC had not initiated any administrative enforcement proceedings against the company, and if it filed such a complaint, the company

would then have the right to a hearing before the

Commission before any sanction would be imposed.

Id. at 733.

Similarly, in Soundboard Association v. Federal

Trade Commission, 888 F.3d 1261 (D.C. Cir. 2018),

the court held that a letter issued by the staff of the

Federal Trade Commission (“FTC”) that followed “extensive investigative efforts” and included “some definitive language” was not a final agency action for

purposes of subject matter jurisdiction. Id. at 1267.

The court rejected the argument that the letter constituted “the consummation of agency decisionmaking

for ‘all intents and purposes’ ” in part because under

36a

the particular statutory and regulatory scheme at issue, if the FTC staff sought to bring an enforcement

action, the Commission itself would have to decide

whether the staff ’s interpretation was correct and

vote on whether to issue a complaint. Id. at 1269 (noting that “the manner in which the agency’s governing

statutes and regulations structure its decisionmaking

processes is a touchstone of the finality analysis”).

Here, the CPSC, through OCFO, has to date only

requested voluntary corrective action. In order to

make a determination imposing any obligation on

Jake’s Fireworks, such as civil penalties, the OCFO

staff would have to refer the matter to the Commission itself or OGC for additional action. As noted in

Director Kaye’s December 15, 2020 letter, OCFO staff

has taken no action to date to do so. Where there is

“only the possibility” that a party will “hav[e] to defend itself at an enforcement hearing” if it “does not

undertake certain voluntary action,” there is no final

agency action. Reliable Sprinkler, 324 F.3d at 735; see

Holistic Candlers, 664 F.3d at 945 (finding no final

agency action in part because the Food and Drug Administration could “only ban devices after going

through a formal process that it has not undertaken

here”).

Jake’s Fireworks’ arguments to the contrary do not

alter this conclusion. Although Jake’s Fireworks asserts, based on U.S. Army Corps of Engineers v.

Hawkes Co., 578 U.S. 590 (2016), that a decision to

initiate an enforcement action is not required to establish final agency action, the discussion of this issue

in Hawkes focused on the second Bennett prong of “direct and appreciable legal consequences.” Hawkes,

578 U.S. at 598 (citing Bennett, 520 U.S. at 178). It

37a

was undisputed that the action at issue, the issuance

of a ‘jurisdictional determination” by the U.S. Army

Corps of Engineers was, pursuant to a regulation, the

consummation of the agency’s decision. Hawkes, 578

U.S. at 597. Similarly, Sackett v. Environmental Protection Agency, 566 U.S. 120 (2012), relied upon by

Jake’s Fireworks, is distinguishable because the order

deemed to be a final agency action actually ordered,

rather than requested, compliance, and the court

found that the findings and conclusions in the compliance order were not subject to any further review

within the Environmental Protection Agency. Id. at

127. In contrast, here, as in Reliable Sprinkler and

Soundboard Association, the CPSC operates under an

independent commission structure where the statutory and regulatory regime contemplates review and

a determination by either the Commission itself or

OGC before any binding order can be entered. In cases

in which notices seek voluntary compliance and the

steps required to impose a mandatory order upon the

subject have not yet occurred, no final agency action

has occurred. See Reliable Sprinkler, 324 F.3d at 733;

Soundboard Ass’n, 888 F.3d. at 1267.

Jake’s Fireworks also argues that because it “faces

the choice of either complying with CPSC’s dictates by

not selling the products deemed banned or risking severe sanctions for knowing violations of the FHSA if

it does not[*] sell its products,” the agency action has

been consummated. Opp’n at 22. This precise argument was rejected in Reliable Sprinkler, in which the

court found no final agency action even though the

[*] [Counsel for Jake’s Fireworks here notes a typographical error

in the district court’s opinion: This “not” does not appear in the

Opposition Brief at 22.]

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CPSC’s letter seeking voluntary compliance imposed

the “dilemma” and “practical consequence[]” of the

product owner having to choose “between voluntary

compliance with the agency’s request for corrective action and the prospect of having to defend itself in an

administrative hearing should the agency actually decide to pursue enforcement.” Reliable Sprinkler, 324

F.3d at 732. Notably, the fact that only some of Jake’s

Fireworks’s Aerial Shell Fireworks have been marked

as banned hazardous substances, but 66 percent of

those sampled have not, makes future CPSC enforcement action far from certain. Furthermore, Jake’s

Fireworks’s reliance on Doe v. Tenenbaum, 127 F.

Supp. 3d 426 (D. Md. 2012), is misplaced because the

final agency action at issue was the publication of a

report pursuing to the Consumer Product Safety Improvement Act, an entirely different scenario from

that presented here. Id. at 465.

Finally, Jake’s Fireworks argues that the Notices

effectively impose legal consequences upon it because

in other cases, including United States v. Shelton

Wholesale, Inc., No. 96-6131-CV-SJ, 1998 WL 251273

(W.D. Mo. Apr. 28, 1998), such Notices have been used

as evidence of a “knowing” violation of the FHSA, as

needed to establish civil penalties should the CPSC

choose to pursue them. See 15 U.S.C. §§ 1264(a), (c)(1).

In Shelton Wholesale, however, the court found only

that a factfinder could consider the knowledge that

fireworks had failed CPSC compliance testing as evidence of a knowing violation of the FHSA, not that it

definitively established such state of mind. Shelton

Wholesale, 1998 WL 251273, at *11. Even if the potential for the notice to impact the determination of

whether a civil penalty may be imposed could be

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deemed to constitute a legal consequence, that conclusion would relate to the second prong of Bennett, the

requirement that the action be one from which “legal

consequences will flow.” Bennett, 520 U.S. at 178. It

would not demonstrate that the first prong, the consummation of the agency’s decisionmaking, had been

established.

Because both Bennett prongs must be satisfied to

establish a final agency action, and the Court finds

that the first prong has not been satisfied, the Court

concludes that there has been no final agency action.

The Motion to Dismiss will therefore be granted.

CONCLUSION

For the foregoing reasons, the CPSC’s Motion to

Dismiss will be GRANTED, and the Complaint will be

DISMISSED WITHOUT PREJUDICE. A separate

Order shall issue.

Date: April 21, 2023

s/ Theodore D. Chuang

THEODORE D. CHUANG

United States

District Judge

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Filed 10/30/20

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

Southern Division

JAKE’S FIREWORKS INC.,

Plaintiff,

v.

UNITED STATES CONSUMER

PRODUCT SAFETY COMMISSION, et al.,

Case No. PWG

19-cv-1161

Defendants.

_______________________________

MEMORANDUM AND ORDER

Jake’s Fireworks Inc. (“Jake’s Fireworks”) seeks

injunctive and declaratory relief against the United

States Consumer Product Safety Commission (the

“Commission” or “CPSC”) and Ann Marie Beurkle, in

her official capacity as Acting Chairman of the Commission.1 Am. Compl. ¶ 1, ECF No. 16. The Commission is a regulatory agency charged with enforcing the

Consumer Product Safety Act (“CPSA”), 15 U.S.C. §§

2051 et seq., and the Federal Hazardous Substances

1 Defendants report that on October 1, 2019, Ann Marie

Buerkle was replaced by Robert S. Adler as Acting Chairman of

the United States Consumer Product Safety Commission. Reply

n.1, ECF No. 23; see also https://cpsc.gov/About-CPSC (last visited Oct. 20, 2020).

41a

Act (“FHSA”), 15 U.S.C. §§ 1261 et seq. Id. at ¶ 6.

Jake’s Fireworks, a nation-wide retailer of consumer

fireworks, alleges that it received enforcement letters

from the Commission requiring the impound of some

of its merchandise for failure to satisfy certain regulations. Id. at ¶ 4. In its four-count complaint, Jake’s

Fireworks seeks this Court’s declaration that the statutory and regulatory provisions enforced by the Commission that are at issue do not apply to their particular consumer fireworks or, alternately, that the Commission’s enforcement of the statutes and regulations

is arbitrary and capricious. Id.

Defendants filed the pending motion to dismiss all

claims brought against them in the Amended Complaint for lack of jurisdiction under Federal Rule of

Civil Procedure 12(b)(1). Mot. ECF No. 17. In the alternative, Defendants seek to dismiss the fourth cause

of action—a Fifth Amendment void-for-vagueness

challenge—for failure to state a claim under Federal

Rule of Civil Procedure 12(b)(6) and argue that Jake’s

Fireworks’ requests for injunctive relief are moot. Id.;

Mot. Mem. 3, ECF No. 17-1. Because I conclude that

this Court does not have subject-matter jurisdiction,

Defendants’ Motion to Dismiss, ECF No. 17, is

GRANTED,2 and the Amended Complaint is DISMISSED WITHOUT PREJUDICE.

2 Because I find that this court lacks subject-matter jurisdiction, I need not reach the other grounds raised by the Defendants

in their motion to dismiss.

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BACKGROUND

I. Regulatory Overview

The Consumer Product Safety Act (“CPSA”) was

enacted, in part, “to protect the public against unreasonable risks of injury associated with consumer products.” 15 U.S.C. § 2051(b). The CPSA created the Consumer Product Safety Commission and authorized it,

among other things, to conduct research on and test

consumer products, to promulgate consumer product

safety standards, and to ban hazardous products. 15

U.S.C. §§ 2053, 2054, 2056, 2057. The Commission

also inherited from the Food and Drug Administration

responsibility for enforcing the Federal Hazardous

Substances Act (“FHSA”), 15 U.S.C. §§ 1261 et seq. See

15 U.S.C. § 2079. The FHSA prohibits “the introduction or delivery for introduction into interstate commerce” of “hazardous substance(s),” 15 U.S.C. § 1263,

and provides for penalties, 15 U.S.C. § 1264, and seizures of misbranded or banned products, 15 U.S.C.

§ 1265.3

The Commission works with importers and the

United States Custom and Border Protection (“CBP”)

to sample imported fireworks devices and examine

them for possible violations of the FHSA. 15 U.S.C.

§ 1273(a). The Commission’s multi-step process for

3 Consumer fireworks are regulated under the FHSA, and

Jake’s Fireworks challenges the applicability to its reloadable

aerial shells of two fireworks regulations, specifically, 16 C.F.R.

§ 1500.17(a)(3), and 16 C.F.R. § 1500.14(b)(7). See Am. Compl.

¶¶ 16-41. Jake’s Fireworks also asserts that the “poof/bang” test

that the Commission uses to test fireworks has not been promulgated through notice and comment rulemaking, or otherwise

been publicized; thus the test is unreasonable, arbitrary, and capricious. Id. at ¶¶ 42-56.

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sampling, notifying the importer, and enforcing its

statutes and implementing regulations is described in

detail in The Regulated Products Handbook (the

“Handbook”), which was developed to help importers

understand their responsibilities and procedural options when informed of a violation. Mot. Ex. 4, ECF

No. 17-6.4 The Handbook provides this summary in

the Preface:

When CPSC staff determines that a product

violates a specific statute or regulation, CPSC

Office of Compliance and Field Operations generally notifies the responsible firm (the product

manufacturer, importer, distributor, or retailer) of the violation and requests a specific

remediation of the problem.

Notification to the responsible firm is usually in the form of an official letter, referred to

in this Handbook as the Letter of Advice or a

Notice of Noncompliance from the Office of

Compliance and Field Operations (collectively

referred to in this Handbook as LOA). Firms

should review this Handbook in conjunction

with the LOA sent by CPSC staff that identifies

the applicable statutes and regulations violated. The LOA informs the firm of the specific

product and violation that has occurred; requests that the firm take specific corrective actions (including stopping the sale and distribution of the product; recalling the product from

distributors, retailers, and/or consumers; quar-

4 The Handbook, specifically Chapter 3, is referenced in the

Amended Complaint, Exhibit B, Exhibit D, and Exhibit H.

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antining and disposing of inventory of the product; and changing future production of the

product); and informs the firm of the legal actions available to the Commission (including

civil and criminal penalties and injunctive relief). In addition, the LOA informs the firm that

if it disagrees with CPSC staff ’s determination

that a violation has occurred or believes the

product is not subject to the Commission’s jurisdiction, it may question staff ’s findings and

present evidence to support its position. See

Chapter 3 of this Handbook.

Handbook 5-6. Chapter 3 contains the procedures to

be followed:

RESPONDING TO THE CPSC LETTER OF

ADVICE (LOA)

When the CPSC staff notifies you in a LOA

that a product that you manufacture, import,

distribute, sell, or offer for sale fails to comply

with a CPSC statute, rule, regulation, standard, or ban, you may present evidence supporting your view if you disagree with staff ’s determination.

The LOA will state that the firm may present evidence that a violation does not exist or

that a product is not covered by the applicable

statute or regulation. The letter will indicate to

whom the response should be addressed and

will give you a timeframe for the expected response. You may submit, to the indicated recipient, all evidence and arguments that support

why you believe the product is not violative; not

subject to a specific statute, rule, regulation,

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standard, or ban; or, should not be refused admission in the United States (if the violation involves an import detained at the port) or seized

by CBP.

A firm may respond to a notice of noncompliance orally or in writing, and the firm may

request an informal hearing to meet personally

with Office of Compliance or Import Surveillance Division staff to present orally views and

evidence. Such evidence may consist of:

• results from testing that supports certificates of compliance;

• results of tests indicating the product complies with the applicable regulation;

• marketing data indicating the product is

not intended for the population group protected

by the regulation or standard; or

• any other relevant data to support the

claim of compliance.

CPSC RESPONSE TO FIRM RESPONSE

Any additional evidence or arguments that

a firm presents are reviewed by the appropriate

CPSC Office of Compliance or Import Surveillance Division staff, including appropriate technical and legal staff. If the information you present, in the staff ’s opinion, does not refute

staff ’s claim that the product is violative or covered by a specific statute, rule, regulation,

standard, or ban, Commission staff, as a general rule, will notify you in writing before staff

pursues any enforcement action against the

products or your firm.

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If a firm continues to disagree with CPSC

staff and declines to take corrective action, the

staff may request the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint, injunctive

action, seizure action, or such other action as

may be appropriate.

Id. at 18-19.

To enforce its statutes and regulations, the Commission prefers to work cooperatively with industry

“but initiat[es] litigation when necessary.” Id. at 7. It

may impose sanctions for violations, including both

civil and criminal penalties. Id. at 8. “In addition,

firms and individuals may be enjoined from continuing to violate CPSC statutes and regulations, and pursuant to court order, violative products may be seized

to prevent distribution in commerce.” Id.; see also id.

at 14 (quoting 15 U.S.C. § 1267 to state that United

States district courts have jurisdiction to restrain violations of the FHSA). As referenced above, Chapter 3

provides detailed procedures to follow if a firm disagrees with the Commission’s staff ’s determination

that a product is in violation of a statute or regulation,

including how a firm may respond to a Letter of Advice (“LOA”) or notice of noncompliance and the steps

that follow such a response. Id. at 18. Ultimately, “[i]f

a firm continues to disagree with CPSC staff and declines to take corrective action, the staff may request

the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint, injunctive action, seizure action, or such other

47a

action as may be appropriate.” Id. at 19.5 Chapter 4

provides the details for handling of regulated products

at ports of entry. Id.

II. Factual and Procedural Background

Jake’s Fireworks is one of the nation’s largest importers and distributors of consumer fireworks with

distribution centers from coast to coast. Am. Compl.

¶¶ 5, 57. One of its best sellers is the Excalibur product line of small reloadable aerial shells,6 which it purchases and imports from a Chinese manufacturer. Id.

at ¶ 57. When Jake’s Fireworks imports these shells,

it must certify that the fireworks comply “with all

rules, bans, standards, or regulations applicable.” Id.

at ¶ 59 (quoting CPSA, 15 U.S.C. § 2063(a)(1)(A)).

Since about 2010, Jake’s Fireworks has used American Fireworks Standards Laboratory, an independent

non-profit third-party testing laboratory, to test its

fireworks for compliance with the Commission’s regulations. Id. at ¶ 60. The Commission inspects and

samples products, including the fireworks at issue, at

United States ports of entry to ensure compliance with

5 Before a civil or criminal penalty is sought, the regulated

entity must be notified and provided an opportunity to present

views or submit evidence and arguments. 15 U.S.C. § 1266; 16

C.F.R. § 1119.5. Additionally, the Commission must approve any

settlement by the Office of General Counsel (“OGC”) of a civil

penalty or OGC recommendation to refer to the United States

Department of Justice an action seeking to assess a civil penalty.

15 U.S.C. § 2069(b), (c).

6 Also referred to as reloadable tube aerial devices. Am.

Compl. ¶ 57, n.1. According to Jake’s website, these explosive devices are “known for great color” and “thunderous breaks.” Mot.

Mem. 2 (quoting Jake’s Fireworks, https://www.jakesfireworks.com/fireworks/artillery-shells (last visited September 24,

2019)).

48a

the safety statutes and regulations, and products are

not allowed to be distributed in commerce until the

Commission has determined the product’s admissibility. Id. at ¶ 62.

When the Commission’s testing reveals a violation

of an applicable requirement—such as improper audible effects or improper labeling—it follows the process

described in the Handbook for advising the importer.

Id. at ¶ 63. Ultimately, the Commission either authorizes release of the product or requests that the shipment be destroyed, subject to civil and criminal penalties if the products are sold without having been released. Id. Jake’s Fireworks alleges that the Commission increased its sampling of Jake’s Fireworks’ imports of its reloadable aerial shells beginning in the

spring of 2014, and between March 19, 2014 through

July 20, 2018, the Commission detained, at least temporarily, an approximate market value of over $3.7

million worth of its reloadable aerial shells. Id. at

¶ 64.7 Jake’s Fireworks alleges that the Commission

continues to sample and detain these products at an

increasing rate. Id. at ¶ 64.

Jake’s Fireworks received Notices of Non-Compliance (which the Commission also refers to as “Letters

of Advice,” Handbook at 5) from the Commission requesting that it stop the sale of certain products and

destroy them, advising that violations were subject to

civil and criminal penalties. Id. at ¶¶ 65-68 (attaching

7 The Commission states that all products at issue were released from import holds, and Jake’s Fireworks agrees that the

products have been released from import holds. See Pl.’s Resp. 2,

21 n.13.

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Exhibits B-D as examples).8 Jake’s Fireworks responded to the notices and requested that the Commission rescind them and release the fireworks without condition. Id. at ¶ 70-71 (attaching Exhibit E as

an example response).9 On October 3, 2014, the Commission reiterated its position that the reloadable aerial shell fireworks violated applicable statutory and

regulatory requirements and requested that they be

destroyed. Id. at ¶ 72 (attaching the letter as Exhibit

F).10 Jake’s Fireworks responded by letter, again asking that the Commission rescind the notices. Id. at

¶¶ 72-73 (attaching the letter as Exhibit G).11 At some

point, Jake’s Fireworks inquired whether the Commission’s October 3, 2014 letter constituted final

8 Exhibit B is Notice of Non-Compliance dated September 18,

2018, sent by email to Jake’s Fireworks from a Commission Compliance Officer, and included a laboratory report. ECF No. 16-2.

Exhibit C is an example of a laboratory report, which was also

part of Exhibit B. ECF No. 16-3. Exhibit D is a Notice of NonCompliance dated August 19, 2014, sent by certified mail to

Jake’s Fireworks from a Commission Compliance Office, and included a laboratory report. ECF No. 16-4.

9 Exhibit E is a letter dated May 26, 2016, sent by email from

counsel, Miles & Stockbridge, retained by Jake’s Fireworks for

the purpose of responding to three specific notices. ECF No. 165.

10 Exhibit F is a letter dated October 3, 2014, sent by email

and certified mail to Jake’s Fireworks and its counsel, Miles &

Stockbridge, from a Commission Compliance Officer. ECF No.

16-6. It notes that Jake’s Fireworks provided no evidence to dispute the violations, but instead questioned the validity of the regulations, so the Commission staff stands by its determination of

the violations. Id.

11 Exhibit G is a letter dated October 14, 2014, sent by email

to a Commission Compliance Officer from Jake’s Fireworks’

counsel, Miles & Stockbridge. ECF No. 16-7.

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agency action. Id. at ¶ 73.12 On December 8, 2014, the

Commission’s staff orally indicated that it would retest samples, and Jake’s Fireworks believes that the

re-testing occurred before February 13, 2015. Id. at

¶ 73. On May 20, 2015, the Commission issued another Notice of Non-Compliance, including the reports

of its re-tests with a determination that two shipments, upon re-testing, complied with regulations, but

that other shipments violated regulations. Id. at

¶¶ 74-75 (attaching the notice as Exhibit H).13 The

Commission reiterated its request that sales stop and

the violative products be destroyed. Id. The Commission continues to sample Jake’s Fireworks’ imports for

compliance with regulations, some of which comply

while others do not. Id. at ¶ 64; Mot. Mem. 11 (attaching examples). The Commission states that it has not

initiated any enforcement action against Jake’s Fireworks or its products for violations of the FHSA (and,

12 In Plaintiff ’s response to Defendant’s motion, it included a

letter, Exhibit 4, which indicates that counsel from Mayer Brown

spoke with a Commission Compliance Officer on November 25,

2014. ECF No. 22-4. The letter reveals that counsel was informed

that the staff letter of October 3, 2014 was not the final agency

action. Id. The letter notes the costs of delay and contains a request for a final decision. Id.

13 Exhibit H is a Notice of Non-Compliance dated May 20,

2015, sent by email and certified mail to counsel for Jake’s Fireworks, Mayer Brown, from the Commission’s Lead Compliance

Officer, and included a laboratory report. ECF No. 16-8. It responds to correspondence of December 22, 2014 sent from Mayer

Brown to the Commission staff, and it states that at Jake’s Fireworks’ request, staff agreed to conduct re-testing of certain products, which were found to be in compliance. Id. It indicates that

CBP was asked to release those items from bond. Id. Other samples continue to exhibit non-compliance. Id. Jake’s Fireworks asserts that this notice is a final agency action. Am. Compl. ¶¶ 10,

90, 94, 101; Pl.’s Resp. 2, ECF No. 22.

51a

indeed, that it could not do so without further approval from the Commission’s Office of General Counsel, which, in turn, must refer the matter to the Department of Justice for approval of enforcement action). Mot. Mem. 11; Reply 8 n.4.

Jake’s Fireworks alleges that the Commission is

applying inapplicable regulations to their reloadable

aerial shells in an arbitrary, capricious manner that

constitutes an abuse of discretion. Am. Compl. at

¶¶ 76-80. Specifically, Jake’s Fireworks alleges four

causes of action in its Amended Complaint:

• First Cause of Action – Violation of the Administrative Procedure Act for Abuse of Discretion and

Unlawful, Arbitrary and Capricious Agency Action (Application of 16 C.F.R. § 1500.17(a)(3));

• Second Cause of Action – Violation of the Administrative Procedure Act for Abuse of Discretion

and Unlawful, Arbitrary and Capricious Agency

Action (Application of Non-existent Reports Labeling Requirement);

• Third Cause of Action – Violation of the Administrative Procedure Act for Abuse of Discretion

and Unlawful, Arbitrary and Capricious Agency

Action (Use of “Poof/Bang” Test);

• Fourth Cause of Action – Unlawful Agency Action under the Administrative Procedure Act

Based on the Commission’s Violation of the Fifth

Amendment to the United States Constitution.

Defendants assert that because the notices and letters transmitted to Jake’s Fireworks do not constitute

final agency action, the Court lacks subject matter jurisdiction to review them. Mot. Mem. 1-3. Defendants

52a

also argue that the fourth cause of action should be

dismissed for failure to state a claim, and that the requests for injunctive relief are moot. Id.

STANDARD OF REVIEW

“[W]hether an agency’s action ‘constituted final

agency action under the APA so as to be reviewable in

court’ is ‘a question of subject matter jurisdiction.’ ”

Am. Acad. of Pediatrics v. Food & Drug Admin., 379

F. Supp. 3d 461, 474 (D. Md. 2019) (quoting Invention

Submission Corp. v. Rogan, 357 F.3d 452, 458 (4th

Cir. 2004)).14 When subject matter jurisdiction is challenged under Federal Rule of Civil Procedure 12(b)(1),

the plaintiff has the burden of proving that subject

matter jurisdiction exists. Evans v. B.F. Perkins Co.,

166 F.3d 642, 647 (4th Cir. 1999) (citing Richmond,

Fredericksburg & Potomac R. Co. v. United States, 945

F.2d 765, 768 (4th Cir.1991)).

When a defendant moves to dismiss pursuant to

Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction, asserting a facial challenge that “a complaint

simply fails to allege facts upon which subject matter

jurisdiction can be based,” as Defendants do here, “the

facts alleged in the complaint are assumed to be true

and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a 12(b)(6)

consideration.” Adams v. Bain, 697 F.2d 1213, 1219

(4th Cir. 1982).

14 “There is a split among Courts of Appeals concerning the

standard of review for challenges to ‘final agency action.’ ” See

New Mexico v. McAleenan, 450 F. Supp. 3d 1130, 1190 (D.N.M.

2020) (citing cases). However, in this circuit, whether an agency

action is final is a jurisdiction issue. See City of New York v. U.S.

Dep’t of Defense, 913 F.3d 423, 430 (4th Cir. 2019).

53a

Pursuant to Rule 12(b)(6), a plaintiff ’s claims are

subject to dismissal if they “fail[ ] to state a claim upon

which relief can be granted.” Fed. R. Civ. P. 12(b)(6).

A pleading must contain “a short and plain statement

of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), and must state “a plausible claim for relief,” Ashcroft v. Iqbal, 556 U.S. 662,

678-79 (2009). “A claim has facial plausibility when

the plaintiff pleads factual content that allows the

court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,

556 U.S. at 678. Rule 12(b)(6)’s purpose “is to test the

sufficiency of a complaint and not to resolve contests

surrounding the facts, the merits of a claim, or the applicability of defenses.” Velencia v. Drezhlo, No. RDB12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012)

(quoting Presley v. City of Charlottesville, 464 F.3d

480, 483 (4th Cir. 2006)).

Whether considering a Rule 12(b)(1) challenge or a

Rule 12(b)(6) motion, the Court may take judicial notice of “fact[s] that [are] not subject to reasonable dispute” because they “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). Additionally, the Court may “consider documents that are explicitly incorporated into the complaint by reference.”

Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166

(4th Cir. 2016); see also Sposato v. First Mariner Bank,

No. CCB-12-1569, 2013 WL 1308582, at *2 (D. Md.

Mar. 28, 2013) (“The court may consider documents

attached to the complaint, as well as documents attached to the motion to dismiss, if they are integral to

the complaint and their authenticity is not disputed.”); CACI Int’l v. St. Paul Fire & Marine Ins. Co.,

566 F.3d 150, 154 (4th Cir. 2009); Fed. R. Civ. P. 10(c)

54a

(“A copy of a written instrument that is an exhibit to

a pleading is a part of the pleading for all purposes.”).

Moreover, where the allegations in the complaint conflict with an attached written instrument, “the exhibit

prevails.” Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991); see

Azimirad v. HSBC Mortg. Corp., No. DKC-10-2853,

2011 WL 1375970, at *2-3 (D. Md. Apr. 12, 2011).

Here, the Plaintiff attached letters and notices to

its Amended Complaint, and Defendants’ Motion also

included attachments of letters and notices as well as

the referenced Handbook. There are no challenges to

the authenticity of these documents, and I may consider them when deciding the dismissal motion.

DISCUSSION

“Judicial review under the APA . . . is limited to ‘final agency actions.’ ” City of New York v. U.S. Dep’t of

Def., 913 F.3d 423, 430 (4th Cir. 2019) (quoting 5

U.S.C. § 704). Generally, “two conditions must be satisfied for agency action to be ‘final.’ ” Vill. of Bald Head

Island v. U.S. Army Corps of Eng’rs, 714 F.3d 186,

194-95 (4th Cir. 2013) (quoting Bennett v. Spear, 520

U.S. 154 (1997)). The first requirement is that “the action must mark the consummation of the agency’s decisionmaking process—it must not be of a merely tentative or interlocutory nature.” Id. (quoting Bennett,

520 U.S. at 177-78 (citation and quotation marks

omitted)). The second is that “the action must be one

by which rights or obligations have been determined

or from which legal consequences will flow.” Id. (quoting Bennett, 520 U.S. at 178 (citation and quotation

55a

marks omitted) (emphasis added)). 15 Stated differently, “[t]he core question is whether the agency has

completed its decisionmaking process, and whether

the result of that process is one that will directly affect

the parties.” Franklin v. Massachusetts, 505 U.S. 788,

797 (1992). “[T]he measure of finality is also ‘pragmatic’; an agency action is ‘immediately reviewable’

when it gives notice of how a certain statute will be

applied even if no action has yet been brought.” Int’l

Refugee Assistance Project v. Trump, 883 F.3d 233,

285 (4th Cir.), as amended (Feb. 28, 2018) (Gregory,

C.J., concurring) (quoting U.S. Army Corps of Eng’rs

v. Hawkes Co., ––– U.S. –––, 136 S. Ct. 1807, 1815

(2016)), cert. granted, judgment vacated on other

grounds, ––– U.S. –––, 138 S. Ct. 2710 (2018).

Jake’s Fireworks alleges that the May 20, 2015 Notice of Non-Compliance16 (“the Notice”) constitutes final agency action. Am. Compl. ¶¶ 10, 90, 94, 101; Pl.’s

15 Whether an agency action creates legal consequences does

not necessarily address finality concerns, and some courts have

instead considered this factor as affecting the definition of

“agency action” under 5 U.S.C. § 551(13) rather than the meaning of “final” agency action under § 704. See City of New York,

913 F.3d at 431; Vill. of Bald Head Island, 714 F.3d at 193.

16 Am. Compl. Ex. H, ECF No. 16-8; see also ECF No. 17-3.

In its response to the Commission’s motion, Jake’s Fireworks

adds that the March 7, 2016 Notice of Non-Compliance, which

was attached to the Commission’s Motion as Exhibit 9, ECF

No. 17-11, is also a final agency action. Pl.’s Resp. 2 n.1. Defendants argue that “the complaint may not be amended by the briefs

in opposition to a motion to dismiss.” Reply 2 (quoting McDonald

v. LG Electronics USA, Inc., 219 F. Supp. 3d 533, 541 (D. Md.

2016)). However, Jake’s Fireworks’ contentions were only that

the 2016 notice appears to be similar to the 2015 Notice, both of

which differ from the prior notices and demonstrate finality. See

Pl.’s Resp. 2 n.1, 3 n.2, 5, 8, 9-10, 11, 15, 20-21. I accept it for this

56a

Resp. 2. “ ‘The term “action” as used in the APA is a

term of art that does not include all conduct’ on the

part of the government.” City of New York, 913 F.3d

at 430-31 (quoting Vill. of Bald Head Island, 714 F.3d

at 193). The alleged “action” at issue here is an “order”

or “sanction.” Pl.’s Resp. 6; see 5 U.S.C. § 551 (6), (10),

(13) (defining agency action, order, and sanction). I

shall review the Notice to determine if it satisfies both

prongs of the Bennett test such that the action can be

considered final. See Golden and Zimmerman, LLC v.

Domenech, 599 F.3d 426, 432 (4th Cir. 2010) (indicating that both Bennett requirements must be satisfied);

COMSAT Corp. v. National Sci. Found., 190 F.3d 269,

274 (4th Cir. 1999) (“[A]n agency action may be considered ‘final’ only when the action signals the consummation of an agency’s decisionmaking process and

gives rise to legal rights or consequences.”) (italics in

original).

I. Consummation of Process

Under the first Bennett prong, I must evaluate

whether the Notice represents the culmination of the

Commission’s decision-making process rather than a

“tentative” or intermediate step. See Franklin, 505

U.S. at 797. It also cannot be the ruling of a subordinate official that needs approval from the agency’s

head before it becomes final. Abbott Labs. v. Gardner,

387 U.S. 136, 151 (1967); see also Soundboard Ass’n v.

FTC, 888 F.3d 1261, 1267 (D.C. Cir. 2018) (“The decisionmaking processes set out in an agency’s governing

statutes and regulations are key to determining

whether an action is properly attributable to the

limited purpose, rather than as an attempt to amend the complaint and reference to the Notice herein includes acknowledgment that the 2016 notice is similar.

57a

agency itself and represents the culmination of that

agency’s consideration of an issue.”). And there must

be no indication that the decision will be revised in the

future, that there is an appeal or further review pending, or that there is any entitlement to further action.

See Sackett v. EPA, 566 U.S. 120, 127 (2012) (“The

mere possibility that an agency might reconsider in

light of ‘informal discussion’ and invited contentions

of inaccuracy does not suffice to make an otherwise final agency action nonfinal.”).

Here, the decision-making process is outlined in

the Handbook. The Handbook describes a back-andforth communication process, which both parties

agree occurred here. After multiple communications,

the Notice was sent from the “Lead Compliance Officer” of the Regulatory Enforcement Division responding to earlier correspondence and details retesting results of multiple devices. The retesting and review resulted in multiple findings, including that

some devices were found to be in compliance and released from bond, some devices were found to be in violation of a different requirement, which allowed for

them to be reconditioned or relabeled, and some were

found to continue to exhibit non-compliance requiring

corrective action. The Handbook, which was attached

to the Notice, states that “[a] firm may respond to a

notice of noncompliance orally or in writing, and the

firm may request an informal hearing to meet personally with Office of Compliance of Import Surveillance

Division staff to present orally views and evidence.”

Handbook at 18. However, Jake’s Fireworks did not

request a hearing and opportunity to present evidence. The Handbook also states that “[i]f a firm continues to disagree with CPSC staff and declines to

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take corrective action, the staff may request the Commission approve appropriate legal proceedings, including the issuance of an administrative complaint,

injunctive action, seizure action, or such other action

as may be appropriate.” Id. at 19. Thus, the Lead Compliance Officer lacks the independent authority to initiate enforcement action that could expose Jake’s Fireworks to civil or criminal penalties, without first obtaining the approval of the Commission’s Office of

General Counsel, which, in turn, must refer the matter to the Department of Justice, which then must decide whether to bring an enforcement action. Reply 45, 8 n.4. On this basis, the Notice appears to be an intermediate ruling of a subordinate official, and it does

not, as contended, clearly reflect the culmination of a

series of communications.

Jake’s Fireworks contends that the determination

of non-compliance was definitive, and the Notice, unlike examples provided of earlier notices, did not invite further discussion, did not include instructions for

disputing the determination, and did not refer to the

Handbook chapter about how to dispute a determination. Pl.’s Resp. 8-10. But Jake’s Fireworks puts too

sharp a point on this argument, as it disregards the

fact that the Notice did include the Handbook as an

attachment (which clearly explains how Jake’s Fireworks could dispute a determination, including the

opportunity to request an informal hearing, which

Jake’s Fireworks chose not to pursue, see Pl.’s Resp. 4,

9-10), used language such as “reiterates its requests,”

and ended with “Please submit your response . . .

within 10 days from the date you receive this letter

outlining the specific corrective action that Jake’s

Fireworks plans to take to address the future sale of

these products and any other products subject to the

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mandatory requirements.” This type of language can

be distinguished from the definitive language used in

the cases that Jake’s Fireworks cited. See, e.g., Doe v.

Tenenbaum, 127 F. Supp. 3d 426 (D. Md. 2012) (contesting the Commission’s planned publication of an

agency report); Scenic America, Inc. v. United States

Dep’t of Transp., 836 F.3d 42 (D.C. Cir. 2016) (challenging a guidance memorandum issued by the Federal Highway Administration); City of Dania Beach,

Fla. v. FAA, 485 F.3d 1181 (D.C. Cir. 2007) (petitioning for review of a FAA letter changing runway use

procedures at airport); American Bar Ass’n v. United

States Dep’t of Educ., 370 F. Supp. 3d 1 (D.D.C. 2019)

(challenging loan forgiveness denial letters).

Jake’s Fireworks also argues that the process culminating in the Notice is similar to the informal adjudication that took place in Tenenbaum, which was

found to qualify as a final agency action. Pl.’s Resp.

10. There, Judge Williams of this court rejected the

Commission’s arguments about the intermediate nature of its decision to publish a report, concluding instead that the decision was the consummation of a

lengthy informal adjudication, and even if subsequent

action remained a possibility, it was final for purposes

of judicial review. Tenenbaum, 127 F. Supp. 3d at 46465. He found that the notice and procedural requirements obligated the Commission to make a legal determination and included an adversarial process with

the provision of evidence “with a view to meeting the

‘burden of proof.’ ” Id. at 462-63 (quoting 16 C.F.R.

§ 1102.26(b)). But here, the process, as outlined in the

Handbook, does not require the issuance of a final “notice” at the end of the back-and-forth communications,

but rather, it states that at the end of the process, the

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staff may request that the Commission (and thereafter, the DOJ) approve appropriate legal proceedings

and, generally, will provide a written notification before that happens. No enforcement proceedings have

been initiated, and the Notice does not indicate in any

way that an enforcement action will be pursued by the

staff.

Jake’s Fireworks responds to the lack of an enforcement action by arguing that the threat of enforcement hangs over its head like a Damoclean sword, and

the Commission does not actually need to bring an enforcement action to be “final.” Pl.’s Resp. 15 (citing

Hawkes, 136 S. Ct. at 1815 and Sackett, 566 U.S. at

129). And by its filing of supplemental authority,

Jake’s Fireworks notes that a series of letters may

constitute final action because “receipt of the letters

significantly increased its risk of a statutory civil penalty being levied. . . .” Ipsen Biopharmaceuticals, Inc.

v. Azar, 943 F.3d 953, 954 (D.C. Cir. 2019). However,

the “increased risk” argument made in Ipsen supported a finding of finality under Bennett’s second

prong. Id. at 955. The parties had agreed that the action was the consummation of the agency’s decisionmaking process and only the second prong was in dispute. Id. at 955-56. Likewise, the Hawkes and Sackett

courts considered enforcement risk after deciding that

there had been a consummation of the decision-making process and were evaluating whether there was

any other adequate remedy under the Clean Water

Act. See Hawkes, 136 S. Ct. at 1813-15; Sackett, 566

U.S. at 127-29. Notably, the Sackett court concluded

that the compliance order marked the consummation

of the decision-making process because the Sacketts

had asked for—and been denied—a hearing. 566 U.S.

at 127.

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Jake’s Fireworks argues that the Notice comes to

a “definitive conclusion” like the finding in Scenic

America. Pl.’s Resp. 8-9. In Scenic America, the Federal Highway Administration issued guidance criteria

for the regulation of billboard lighting, withdrawing

discretion from the states’ divisional offices. 836 F.3d

at 46. The guidance included a statement that it “may

provide further guidance in the future as a result of

additional information.” Id. at 56. The Scenic America

court interpreted the language as a “boilerplate” indication that the agency might issue further interpretations “at some point in the indeterminate future.” Id.

The court primarily relied on Bennett’s second prong,

because the revised criteria for the agency’s offices to

use in approving or rejecting state regulations created

legal consequences for regulated parties. Id. There is

no comparable language in the Notice or the Handbook, and the action at issue here is a sanction, not a

rule-making action. Rather than presenting a definitive conclusion, the Notice presents multiple conclusions with multiple options for response, and it invites

a response.

In Dania Beach, the court rejected the FAA’s assertion that the letter it sent was not an order that

changed existing procedures without a proper review,

but merely information about existing procedures. 485

F.3d at 1187-88. The court reasoned that the letter

provided a new interpretation of the airport runway

restrictions related to the noise compatibility program, and nothing about it was open to further consideration. Id. Jake’s Fireworks argues that the Notice is like the FAA letter, and, unlike previous letters,

did not invite further discussion and did not offer information about possible avenues of further appeal or

reconsideration. Pl.’s Resp. 9. But the Notice is subject

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to the procedures outlined in the Handbook, which

was attached to the Notice, and unlike providing a

new interpretation of a program, it was consistent

with the prior example letters provided, each of which

stated that products in violation of the standard may

not be sold and must be destroyed. Compare Exs. B,

D, F, with H. Each letter also referred to an attached

Affidavit of Destruction of Fireworks. See id. Also, the

language in each letter consistently uses the word “request” and provides a time for a response. See id. Unlike the FAA letter, the Notice does not contain “new

marching orders.” Dania Beach, 485 F.3d at 1188.

Jake’s Fireworks argues that “courts also look to

the way in which the agency subsequently treats the

challenged action.” Pl.’s Resp. 11 (quoting American

Bar Ass’n, 370 F. Supp. 3d at 21). In American Bar

Ass’n, law school graduates challenged the Department of Education’s letters reversing determinations

of loan forgiveness, alleging that the Department had

changed its interpretation of its regulations, but the

Department argued that the denial letters sent to the

plaintiffs were not final agency actions. 370 F. Supp.

3d at 10, 19. Under the first Bennett prong, the court

determined that the definitive language in the letters

demonstrated the Department’s final determination

that plaintiffs did not qualify for the loan forgiveness

program. Id. at 20. The letter sent to one of the plaintiffs was “less-than-definitive,” but none of the plaintiffs received any additional communications from the

Department that suggested that the letters were not

final determinations, and even after the lawsuit, the

determinations remained unchanged. Id. The American Bar Ass’n court also considered “whether the impact of the [agency action] is sufficiently ‘final’ to war-

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rant review,” and found that the letters had an immediate and significant impact on the plaintiffs. 370 F.

Supp. 3d at 22. Jake’s Fireworks has not alleged any

significant impact from the Notice that differed from

any of the other letters received that would indicate

the Notice was any more final than the earlier letters.

All of the letters sent to Jake’s Fireworks state the potential sanctions using the same language. I also note

that Jake’s Fireworks is aware of how to inquire

whether a letter is a final decision, it previously inquired whether a particular letter was a final agency

action, and it received a response to the inquiry. See

infra n.12. Jake’s Fireworks has not alleged that it

made that same inquiry of the Notice.

In Holistic Candlers, a case cited by the Commission, the court found that the FDA’s warning letters

“plainly” did not demonstrate the consummation of

the agency’s decision-making process because the

agency’s procedures manual describes the warning

letters “as giving ‘firms an opportunity to take voluntary and prompt corrective action before it initiates an

enforcement action.’ ” 664 F.3d at 944. Similarly, the

Handbook describes the Commission’s warning letters

as notifications that inform the recipient of violations,

request corrective action, informs what legal actions

may be taken (including “the maximum sanctions to

which the firm and/or individual may be subject”), and

informs the steps to take to question the findings.

Handbook at 5-6, 11, 18-19. Importantly, the Handbook describes what steps to take upon being informed

of a violation, which includes the ability to present evidence, requesting an informal hearing, conditional

release, and a possible opportunity to bring the violative product into compliance. Id. at 18-22. It specifically states that “the firm may request an informal

64a

hearing to meeting personally with Office of Compliance or Import Surveillance Division staff to present

orally views and evidence.” Id. at 18. “If the information you present, in the staff ’s opinion, does not refute staff ’s claim that the product is violative . . . Commission staff, as a general rule, will notify you in writing before staff pursues any enforcement action

against the products or your firm.” Id. Jake’s Fireworks has not alleged that it requested a hearing that

was denied nor that it requested reconsideration and

was denied.

In sum, based on my review of Jake’s Fireworks’

allegations as well as the letters and Handbook, I conclude that the Notice was not the consummation of the

Commission’s decision-making process. While the process may be nearing its end, there are still steps that

Jake’s Fireworks may take, such as request a hearing

or reconsideration. Therefore, Jake’s Fireworks has

failed to satisfy the first prong of the Bennett test.

II. Bennett’s Second Prong

For the Notice to be reviewable as a final agency

action, it must satisfy both prongs of the Bennett test.

See Domenech, 599 F.3d at 432; COMSAT, 190 F.3d at

274. Because I have concluded that Jake’s Fireworks

has not met the burden of showing that the Notice satisfied the first prong of the Bennett test, I need not and

do not conduct a full analysis of the second prong.

CONCLUSION

Having concluded that Jake’s Fireworks has not

satisfied its burden to show that the Notice was a final

agency action, this Court does not have subject-matter

jurisdiction to proceed. Accordingly, the Commission’s

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motion shall be GRANTED, and the Amended Complaint is DISMISSED WITHOUT PREJUDICE.

ORDER

For the foregoing reasons, it is, this 30th day of October, 2020, hereby ORDERED that:

1. Defendants’ Motion to Dismiss, ECF No. 17, is

GRANTED.

2. Plaintiff ’s Amended Complaint, ECF No. 16, is

DISMISSED WITHOUT PREJUDICE.

3. The Clerk of Court is directed to CLOSE this

case.

/s/

Paul W. Grimm

United States District Judge

66a

Excerpts of Transcript of

Oral Argument held on May 8, 2024

(Pages 1, 2, 3 (Lines 1-7), 18 (Lines 1-11),

23 (Lines 9-18), and 47)

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 23-1661

JAKE’S FIREWORKS INC.,

Plaintiff – Appellant

v.

UNITED STATES CONSUMER PRODUCT SAFETY

COMMISSION; ALEXANDER HOEHN-SARIC, in

his official capacity as Chairman of the CPSC,

Defendants – Appellees.

ORAL ARGUMENT

HELD ON

WEDNESDAY, MAY 8, 2024

BEFORE

HONORABLE ALBERT DIAZ, CHIEF JUDGE

HONORABLE J. HARVIE WILKINSON, III,

CIRCUIT JUDGE

HONORABLE DIANA MOTZ,

SENIOR CIRCUIT JUDGE

LEWIS F. POWELL, JR. COURTHOUSE

1100 EAST MAIN STREET

RICHMOND, VIRGINIA 23219

67a

(800) 528-3335 NAEGELI DEPOSITION & TRIAL

NAEGELIUSA.COM

APPEARANCES

Appearing on behalf of the Plaintiff-Appellant:

OLIVER J. DUNFORD, ESQUIRE

Pacific Legal Foundation

4440 PGA Boulevard, Suite 307

Palm Beach Gardens, Florida 33410

(561) 691-5000

odunford@pacificlegal.org

Appearing on behalf of the Defendants-Appellees:

DANIEL TENNY, ESQUIRE

U.S. Department of Justice

950 Pennsylvania Avenue Northwest

Washington, D.C. 20530

(202) 514-1838

ORAL ARGUMENT

HELD ON

WEDNESDAY, MAY 8, 2024

BEFORE

HONORABLE ALBERT DIAZ, CHIEF JUDGE

HONORABLE J. HARVIE WILKINSON, III,

CIRCUIT JUDGE

HONORABLE DIANA MOTZ,

SENIOR CIRCUIT JUDGE

68a

***

MR. TENNY: Thank you, Your Honor. May it

please the Court, Daniel Tenney representing the

Commission. The key point in this case is that the

Commission has not made a determination on the legal and factual issues.

CHIEF JUDGE DIAZ: Will it ever?

MR. TENNY: It may, or it may not.

CHIEF JUDGE DIAZ: Well, that’s kind of—that’s

not a very satisfactory answer. I don’t think, for someone who’s trying to comply with the law.

***

CHIEF JUDGE DIAZ: So can I ask a question

about the content of the notices which are sometimes,

you know, written in a—in a sort of guidance-forward

looking way? But with 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. So how are they supposed to

deal with that?

***

CERTIFICATE

I, Carolyn Daigle, do hereby certify that the proceeding named herein was professionally transcribed

on the date set forth in the certificate herein; that I

transcribed all testimony adduced and other oral proceedings had in the foregoing matter; and that the

foregoing transcript pages constitute a full, true, and

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correct record of such testimony adduced and oral proceeding had and of the whole thereof.

IN WITNESS HEREOF, I have hereunto set my

hand this 11th day of October, 2024.

s/Carolyn Daigle

(800) 528-3335 NAEGELI DEPOSITION & TRIAL

NAEGELIUSA.COM

70a

5 U.S.C. § 704

§ 704. Actions reviewable

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 the agency otherwise requires by rule and provides that the action

meanwhile is inoperative, for an appeal to superior

agency authority.