Reply Brief — Jake's Fireworks, Inc., Petitioner v. Consumer Product Safety Commission, et al.

No. 24-693

In the Supreme Court of the United States

_________

J AKE ’ S F IREWORKS I NC .,

Petitioner,

v.

U NITED S TATES C ONSUMER PRODUCT

S AFETY C OMMISSION , ET AL .,

Respondents.

_________

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fourth Circuit

_________

REPLY BRIEF FOR PETITIONER

_________

D AMIEN M. S CHIFF

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

M OLLY E. N IXON

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

O LIVER J. D UNFORD

Counsel of Record

Pacific Legal Foundation

4440 PGA Blvd., Suite 307

Palm Beach Gardens, FL

33410

(916) 503-9060

odunford@pacificlegal.org

T IMOTHY L. M ULLIN , J R .

D WIGHT W. S TONE II

Miles & Stockbridge PC

100 Light Street

Baltimore, MD 21202

Counsel for Petitioner

TABLE OF CONTENTS

Introduction ................................................................ 1

Argument .................................................................... 3

I. The Court Should Grant the Petition to Align

the Fourth Circuit with the Pragmatic Inquiry

Required by the APA and This Court and

Faithfully Applied by Other Circuits................ 3

II. Summary Disposition Would Be

Appropriate ...................................................... 10

Conclusion ................................................................. 12

ii

TABLE OF AUTHORITIES

Page(s)

Cases:

Abbott Labs. v. Gardner,

387 U.S. 136 (1967) ........................... 2-3, 6-7, 9, 10

Bennett v. Spear, 520 U.S. 154 (1997) ........ 3-4, 6-7, 11

CNH Indus. N.V. v. Reese, 583 U.S. 133 (2018) ...... 11

Corner Post, Inc. v. Bd. of Governors of

Fed. Res. Sys., 603 U.S. 799 (2024) ....................... 9

Frozen Food Express v. United States,

351 U.S. 40 (1956) .............................................. 6-7

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

912 F.2d 1525 (D.C. Cir. 1990) .......................... 7-8

Sackett v. EPA, 566 U.S. 120 (2012) ....... 1-2, 4-6, 8-11

San Francisco Herring Ass’n v.

U.S. Dep’t of the Interior,

946 F.3d 564 (9th Cir. 2019) ................................. 8

Sexton v. Beaudreaux, 585 U.S. 961 (2018) ............. 10

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

578 U.S. 590 (2016) ............................ 2-3, 6-7, 9-11

United States v. Shelton Wholesale, Inc.,

34 F. Supp. 2d 1147 (W.D. Mo. 1999) ............... 5, 8

Regulation:

16 C.F.R. § 1000.21 ................................................. 1, 8

Rule:

Sup. Ct. R. 16.1 ......................................................... 10

INTRODUCTION

The following is undisputed. Beginning more than

ten years ago, CPSC’s Compliance Office issued Jake’s

Fireworks numerous Notices of Non-Compliance, on

official Commission letterhead, stating that Jake’s

sampled fireworks “are” banned hazardous substances because they violate (a) the Audible Effects

Regulation—which, according to CPSC’s public regulatory filings, does not even apply to the fireworks at

issue (see Pet. 3-5); or (b) a reports-labeling regulation—which CPSC has never identified (see id. 7 n.4).

Having received the Notices, Jake’s risks civil and

criminal sanctions for knowingly selling “banned”

products. Jake’s thus spent over five years pursuing

internal review through the Compliance Office, the office tasked with CPSC’s “compliance and administrative enforcement activities.” 16 C.F.R. § 1000.21. The

agency’s interpretive decisions were repeated and affirmed, and Jake’s has no further administrative options available. Pet. 8-10; BIO 5.

CPSC’s actions thus have “all of the hallmarks of

APA finality that [this Court’s] opinions establish,”

Sackett v. EPA, 566 U.S. 120, 126 (2012), and Jake’s

sought judicial review under the APA. Its primary

question was and remains a legal one: Do the asserted

regulations apply to Jake’s products or not? But the

courts below dismissed Jake’s APA claims because,

the Fourth Circuit concluded, CPSC’s Notices do “not

trigger any of the administrative, civil, or criminal

proceedings that the Commission could pursue.” Pet.

App. 9a.

This enforcement-proceeding requirement is plainly wrong on the merits and, more critically, the Fourth

Circuit’s final-agency-action analysis is flatly incon-

2

sistent with the APA, contradicts this Court’s precedents, and cements an inflexible presumption against

judicial review.

Not surprisingly, the Commission defends its advantage and, like the Fourth Circuit, it spurns the

APA’s “generous review provisions.” Abbott Labs. v.

Gardner, 387 U.S. 136, 141 (1967) (citation omitted).

As a result, the Commission claims effectively unreviewable authority to decide whether regulated parties may be permitted to seek judicial review.

But this Court’s long-settled precedents confirm

that agency action need not “trigger” enforcement proceedings to be final, and regulated parties need not

wait for agencies to pursue enforcement before seeking judicial review. Here, the Commission has arrived

at a definitive conclusion on the applicability (and violations) of the Audible Effects Regulation and the

non-existent reports-labeling regulation. The Commission “may still have to deliberate over whether it

is confident enough about this conclusion to initiate

litigation, but that is a separate subject.” Sackett, 566

U.S. at 129.

***

In the Fourth Circuit, regulated parties like Jake’s

are stuck in limbo, unable to challenge agencies’ considered legal interpretations without risking potentially ruinous civil and criminal penalties. And agencies like CPSC are incentivized to postpone enforcement proceedings indefinitely to evade judicial review.

The Petition should be granted so that regulated

parties in the Fourth Circuit may “have their day in

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

578 U.S. 590, 600 (2016).

3

ARGUMENT

I. The Court Should Grant the Petition to

Align the Fourth Circuit with the Pragmatic

Inquiry Required by the APA and This

Court and Faithfully Applied by Other

Circuits

A. This Court has long held that the APA’s “generous review provisions must be given a hospitable interpretation” and that “only upon a showing of clear

and convincing evidence of a contrary legislative intent should the courts restrict access to judicial review.” Abbott Labs., 387 U.S. at 141 (cleaned up; citations omitted). Accordingly, this Court requires a

pragmatic approach to regulated parties’ APA claims,

subject to a presumption of judicial review. Id. at 14041, 149.

The Fourth Circuit paid only lip service to this

well-settled standard. It acknowledged the two finality conditions from Bennett v. Spear, 520 U.S. 154

(1997). Pet. App. 7a. But contrary to Bennett and related precedents, the court failed to acknowledge that

these conditions are not prescribed elements that

must be strictly proved, but rather, that they represent a “distill[ation] from [this Court’s] precedents . . .

that generally must be satisfied for agency action to

be ‘final’ under the APA.” Hawkes, 578 U.S. at 597,

601-02.

The Commission’s response to Jake’s Petition suffers from the same flaw. Rather than presuming judicial review, the Commission’s standard effectively requires regulated parties to present clear and convincing evidence that agencies have achieved Platonic finality. Indeed, like the Fourth Circuit’s opinion, the

4

Commission’s briefs here and before the Fourth Circuit never once use the word “pragmatic” or “presumption” (or “presume”).1 This Court’s pragmatic approach is thus repudiated in favor of a hyper-formalistic test that resolves all doubt against judicial review.

Nowhere is this clearer than in CPSC’s reading of

Sackett. In Sackett, EPA argued that its so-called

“compliance order” was just “a step in the deliberative

process” because the order merely sought to “resolv[e]

the issues through voluntary compliance” and couldn’t

be enforced except through a separate enforcement

proceeding. 566 U.S. at 127-29. This Court rejected

the argument. It held that EPA’s order “mark[ed] the

‘consummation’ of the agency’s decisionmaking process” because “EPA’s ‘deliberation’ over whether the

[challengers] are in violation of the [Clean Water] Act

is at an end[.]” Id. at 129. Despite this Court’s clear

holding, the Commission maintains that Sackett is

distinguishable on the ground that EPA had issued a

“binding” order under statutory authorization. BIO

10; see also Pet. App. 9a, 12a. Not so.

The critical holding of Sackett, for purposes of Bennett’s consummation prong, is that the nature of the

order (binding or non-self-executing) is not dispositive. The dispositive question is whether an agency

has reached a final interpretive decision, i.e., whether

the agency’s interpretive “deliberation . . . is at an

end.” Sackett, 566 U.S. at 129. Therefore, while EPA’s

order in Sackett, like the Commission’s Notices here,

“must be enforced by the Agency in a plenary judicial

1 This error runs deep.

In the two district court opinions below

(Pet. App. 16a-65a), “pragmatic” appears once (id. 55a), and the

word “presumption” or “presume” never.

5

action[,] . . . the APA provides for judicial review of all

final agency actions, not just those that impose a selfexecuting sanction.” Id.2

Perhaps anticipating this point, the Commission

further argues that EPA’s order was final because it

was not subject to further review within the agency.

BIO 10. But the same is true here. The key question,

elided by CPSC here, is whether the regulated party

may obtain (additional) administrative review, not

whether the agency “is confident enough about [its]

conclusion to initiate litigation[;]” that, after all, is “a

separate” final decision. Sackett, 566 U.S. at 129.

Therefore, while an agency may decide not to enforce its considered view of the law, that decision is

distinct from, and thus its potential does not de-finalize, the agency’s prescinding legal determination.

This principle is doubly violated by the Fourth Circuit’s ruling: Not only is the Commission’s enforcement discretion (i.e., enforcement it “could” pursue

(Pet. App. 9a)) distinct from any conclusions of regulatory application or findings of violation, but the

Commission doesn’t offer the public an administrative

process through which those conclusions and findings

(i.e., Notices) can be disavowed by the Commission itself.

Nonetheless, under CPSC’s (and the lower courts’)

rationale, Jake’s is “blocked from access to the courts”

“[u]ntil [CPSC] sues,” and CPSC “may wait as long as

it wants before deciding to sue.” Sackett, 566 U.S. at

2 As Jake’s noted (Pet. 8-9, 24), CPSC enforced its interpreta-

tion of the Audible Effects Regulation in United States v. Shelton

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

history omitted). And CPSC has never wavered from its assertion that this Regulation so applies.

6

132 (Alito, J., concurring). The only way Jake’s can

obtain judicial review then is by selling “banned” products and risking potentially ruinous sanctions. This

runs afoul of this Court’s settled law, which emphasizes that regulated parties need not “wait[] for [an

agency] to ‘drop the hammer’ in order to have their

day in court.” Hawkes, 578 U.S. at 600 (quoting Sackett, 566 U.S. at 127).

The Commission (BIO 11) tries a different tack and

faults Jake’s for citing cases involving “formal” agency

determinations (e.g., formally adopted rules). This objection fails for at least two reasons. First, “the APA

provides for judicial review of all final agency actions,”

Sackett, 566 U.S. at 129 (emphasis added), not just

formal ones. Therefore, Jake’s reliance on cases involving different types of final agency action does not

at all undermine its argument. Second, the cases in

question (see Pet. 14-16) support the long-standing

proposition that an agency “order” may be immediately reviewable even though the order “ha[s] no authority except to give notice of how the Commission

interpret[s]” the law. Hawkes, 578 U.S. at 599-600

(quoting Abbott Labs., 387 U.S. at 150; citing Frozen

Food Express v. United States, 351 U.S. 40, 44-45

(1956)). Thus, contrary to CPSC’s argument, the

“mere fact that [future, hypothetical enforcement] decisions are reviewable should not suffice to support an

implication of exclusion as to other agency actions

. . . .” Id. at 602 (cleaned up; citations omitted).

B. The Commission’s attempts to harmonize the

Fourth Circuit ruling with cases from other circuit

courts—cases that involve informal agency actions—

do not withstand scrutiny.

The Commission argues that two D.C. Circuit

cases cited by Jake’s were decided before Bennett’s

7

supposed “clarification of the governing legal framework.” BIO 12. But Bennett did not change “the ‘pragmatic’ approach [this Court has] long taken to finality.” Hawkes, 578 U.S. at 599 (citing earlier cases); see

id. at 604 n.* (Ginsburg, J., concurring) (stating that

Bennett “does not displace or alter the approach to finality established by” Abbott Laboratories and Frozen

Food Express). CPSC’s wish to evade this Court’s

pragmatic and review-presuming standard fails.

CPSC’s attempt to distinguish Her Majesty the

Queen in Right of Ontario v. EPA, 912 F.2d 1525 (D.C.

Cir. 1990), is especially perplexing, as it describes a

situation substantially identical to this case. As CPSC

explains, Her Majesty involved “letters that expressed

‘a definitive position’ by a senior agency official [EPA’s

Acting Assistant Administrator for Air and Radiation]

who ‘was speaking for the EPA,’ ” and the D.C. Circuit

“emphasiz[ed] that [it] had ‘no reason to question his

authority’ to do so.” BIO at 12-13. Here, the Notices

confirm CPSC’s application of the Audible Effects

Regulation and, in some cases, the (non-existent) reports-labeling regulation; they further state that

Jake’s sampled product “is a banned hazardous substance[,]” “fails to bear adequate cautionary labeling[,]” and “must be destroyed[.]” Compl., Ex. E,

ECF 1-5, at 1, 3 (italicized emphasis added); see Pet.

5-8. The Notices, issued on official CPSC letterhead,

are signed by a “Compliance Officer” in CPSC’s “Regulatory Enforcement Division.” Ex. E at 4. The legal

conclusions and factual determinations were affirmed

by the Compliance Office’s Director. Exs. O, Q. CPSC

Notices are expressly contemplated in CPSC’s Handbook, which explains “how CPSC enforces its statutes.” Compl., Ex. B, ECF 1-2, at 5, 7 (emphasis

added, capitalization altered). And, as noted above,

8

the Compliance Office is authorized to conduct the

agency’s “compliance and administrative enforcement

activities.” 16 C.F.R. § 1000.21. Accordingly, as in

Her Majesty, the Fourth Circuit had no reason to question the authority of CPSC’s Compliance Office to issue (or its Director to affirm) Notices of Non-Compliance—no reason, that is, except the Commission’s

post-hoc litigation position.

Next, the Commission claims that in San Francisco Herring Association v. U.S. Department of the Interior, 946 F.3d 564 (9th Cir. 2019), “unlike here, it

was clear that the agency ‘ had arrived at a definitive

position.’ ” BIO 13 (emphasis added). Once again, the

Commission’s position here was repeatedly conveyed

to Jake’s, affirmed when Jake’s requested review, and

has been enforced against a similarly situated regulated party in federal litigation. See Shelton, 34 F.

Supp. 2d at 1158. Thus, the Commission cannot defend its claim that the Notices represent “just ‘a step

in the deliberative process’ when [it] rejected [Jake’s]

attempt to obtain a hearing and when the next step

will either be taken by [Jake’s] (if [it] compl[ies] with

the [Notices]) or will involve [an enforcement proceeding] (if the [Commission] brings an [] action).” Sackett,

566 U.S. at 129.

Finally, with respect to several D.C. Circuit cases

involving correspondence from lower-level officials,

CPSC notes that the government didn’t contest the

consummation prong. BIO 12. That the government

takes inconsistent positions depending on the circuit

only underscores the importance of this Court’s review. CPSC’s long-standing practice of evading judicial review through strategic maneuverings (see Pet.

26-27) must be stopped. Regulated parties deserve

9

their day in court without having to risk civil and

criminal sanctions.

C. The Fourth Circuit’s and the Commission’s

warnings, that allowing regulated parties like Jake’s

to seek judicial review of Notices “could have significant detrimental effects[,]” BIO 14, cannot be squared

with the circumstances here. For the reasons discussed in the Petition and above, the Notices are not

“mere[] preliminary findings[,]” “informal communications[,]” or “voluntary and helpful comments[.]” Id.

(quoting the Fourth Circuit’s opinion). They do not

express hesitancy or doubt, but provide a formal and

repeated conclusion as to the application (and existence) of CPSC’s regulations. In any event, this Court

has rejected similar “count your blessings” arguments.

See Hawkes, 578 U.S. at 602.

And on “the other side of the ledger,” BIO 14, Sackett expressly concluded that “[t]he APA’s presumption

of judicial review is a repudiation of the principle that

efficiency of regulation conquers all,” 566 U.S. at 130;

see also Corner Post, Inc. v. Bd. of Governors of Fed.

Res. Sys., 603 U.S. 799, 823-25 (2024) (rejecting “pleas

of administrative inconvenience” and assertions that

interpretation of APA limitations period “spells the

end of the United States as we know it”); Abbott Labs.,

387 U.S. at 154-56 (rejecting similar government arguments).

***

The Commission’s position—articulated in Notices

and advanced in litigation—is final. If the Commission’s indecision as to enforcement renders the

agency’s stated and consistent view somehow non-final for regulated entities prior to such enforcement,

10

the Fourth Circuit has charted a path for federal agencies to evade and effectively nullify much pre-enforcement judicial review under the APA. And shown a

course by which agency pronouncements are deemed

unreviewable, agencies will have a powerful incentive

to use it in regulating the public, rather than going

through the APA-specified (and congressionally mandated) methods of regulating. Such a circumvention

of the APA and this Court’s precedent must be rejected.

II. Summary Disposition Would Be Appropriate

A specific request is not required for this Court to

enter summary disposition (Rules of the Supreme

Court of the United States, Rule 16.1), but if the Court

agrees with the Commission (BIO 13) that the Fourth

Circuit’s “fact-bound” decision does not warrant review, Jake’s submits that the Court may wish to consider summary vacatur of the judgment and remand.

The decision below involves a clear error of practical

importance to all litigants in the Fourth Circuit. Indeed, the court’s enforcement requirement is “not just

wrong,” but it “also committed fundamental errors

that this Court has repeatedly admonished courts to

avoid.” Sexton v. Beaudreaux, 585 U.S. 961, 967

(2018). As demonstrated above and in Jake’s Petition,

this Court has repeatedly and definitively held that

plaintiffs “need not assume” civil and criminal penalty

“risks while waiting for [the agency] to ‘drop the hammer’ in order to have their day in court.” Hawkes, 578

U.S. at 600 (quoting Sackett, 566 U.S. at 127). And,

again, the Fourth Circuit failed to even acknowledge,

much less apply, the Court’s longstanding precedents

demanding a “flexible” and “pragmatic” approach to

11

finality or the APA’s “presumption” of judicial review.

Abbott Labs., 387 U.S. at 140, 149-50.

The posture here would allow the Court to confirm

that the Fourth Circuit’s approach is incorrect without drawing any further conclusions about the finality

of CPSC’s Notices. Because the Fourth Circuit did not

address the second Bennett prong, the Court may, but

need not, decide whether the APA finality requirement is fully satisfied.3

Summary disposition of this case would be proper

to correct the Fourth Circuit’s clear misapplication of

Sackett, Hawkes, and this Court’s long line of cases requiring a pragmatic approach to finality. See CNH Indus. N.V. v. Reese, 583 U.S. 133, 134 (2018) (per curiam) (granting vacatur and remanding because the

Sixth Circuit’s decision “cannot be squared” with Supreme Court precedent).

3 CPSC claims that Jake’s “has not identified any broader effect

on its business beyond its reluctance to sell the specific shipments identified in the notices[;] it has not received a similar

notice of noncompliance since 2019.” BIO 14. Given the Notices’

assertions that those shipments are banned hazardous substances that must be destroyed at the risk of civil and criminal penalties, “reluctance” is an understatement. But even without these

threatened penalties, the Fourth Circuit’s strict “consummation”

test would still preclude Jake’s from judicial review.

And while the Commission did voluntarily cease sending Jake's

Notices in 2019, BIO 5, that’s the same year Jake’s began the

now-six-year process of trying to get a court to review the propriety of CPSC’s decisions. Absent action from this Court on the

finality issue, there is no reason to believe the Notices will not

resume, with CPSC now safe in the knowledge that any finding,

assertion, or threatened enforcement contained in them is insulated from judicial review.

12

CONCLUSION

The Petition should be granted.

Respectfully submitted,

D AMIEN M. S CHIFF

Pacific Legal Foundation

555 Capitol Mall,

Suite 1290

Sacramento, CA 95814

M OLLY E. N IXON

Pacific Legal Foundation

3100 Clarendon Blvd.,

Suite 1000

Arlington, VA 22201

O LIVER J. D UNFORD

Counsel of Record

Pacific Legal Foundation

4440 PGA Blvd., Suite 307

Palm Beach Gardens, FL

33410

(916) 503-9060

odunford@pacificlegal.org

T IMOTHY L. M ULLIN , J R .

D WIGHT W. S TONE II

Miles & Stockbridge PC

100 Light Street

Baltimore, MD 21202

Counsel for Petitioner

M ARCH 2025