Window Covering Manufacturers Association v. CPSC ( 2023 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 24, 2023 Decided September 12, 2023
No. 22-1300
WINDOW COVERING MANUFACTURERS ASSOCIATION,
PETITIONER
v.
CONSUMER PRODUCT SAFETY COMMISSION,
RESPONDENT
On Petition for Review of a Final Rule
of the Consumer Product Safety Commission
Nicole A. Saharsky argued the cause for petitioner. With
her on the briefs were Avi M. Kupfer and Erika Z. Jones.
Tyler S. Badgley, Jordan L. Von Bokern, Brett A. Shumate,
Anthony J. Dick, Brinton Lucas, Charles E.T. Roberts, and
J. Benjamin Aguiñaga were on the brief for amicus curiae
Chamber of Commerce of the United States of America in
support of petitioner.
John J. Vecchione was on the brief for amicus curiae New
Civil Liberties Alliance in support of petitioner.
2
Paul W. Hughes and Andrew A. Lyons-Berg were on the
brief for amicus curiae National Association of Manufacturers
in support of petitioner.
Steven A. Myers, Attorney, U.S. Department of Justice,
argued the cause for respondent. With him on the brief were
Brian M. Boynton, Principal Deputy Assistant Attorney
General, and Daniel Tenny, Attorney.
Adina H. Rosenbaum and Michael T. Kirkpatrick were on
the brief for amici curiae Consumer Federation of America, et
al. in support of respondent.
Elizabeth B. Wydra, Brianne J. Gorod, and Brian R.
Frazelle were on the brief for amicus curiae Constitutional
Accountability Center in support of respondent.
Before: SRINIVASAN, Chief Judge, WILKINS and PAN,
Circuit Judges.
Opinion for the Court filed by Circuit Judge PAN.
PAN, Circuit Judge: The Consumer Product Safety
Commission (the “Commission”) issues safety standards for
potentially dangerous products. In 2022, the Commission
promulgated a rule that set stringent safety standards for the
operating cords on custom-made window coverings, based on
a finding that such cords pose a strangulation risk to young
children. The rule sought to eliminate the risk of injury by
essentially prohibiting corded window products, and it set an
aggressive timeline for industry compliance with the new
standards. The Window Covering Manufacturers Association
(“WCMA”) filed a petition in this court challenging the rule
and its compliance deadline. Because the Commission
breached notice-and-comment requirements, erroneously
3
relied on certain data in its cost-benefit analysis, and selected
an arbitrary effective date for the rule, we grant the WCMA’s
petition for review and vacate the rule.
I.
A.
In 1972, Congress enacted the Consumer Product Safety
Act (the “Act”) to “protect the public against unreasonable
risks of injury associated with consumer products.” 15 U.S.C.
§ 2051(b)(1). The Act created the Commission, an
independent regulatory agency, and gave it authority to
“promulgate consumer product safety standards” and ban
“imminently hazardous” products from the market. Id.§§ 2053, 2056(a), 2057, 2061. The Commission employs staff
members who perform regulatory analyses, correspond with
industry stakeholders, and make recommendations to the
Commission. E.g., 16 C.F.R. §§ 1031.4(a)(3), 1031.6(c)(2).
The discretion to promulgate safety standards, however, lies
with the Commission itself. See 15 U.S.C. § 2056(a).
The Commission has five commissioners, who are
appointed by the President with the advice and consent of the
Senate. 15 U.S.C. § 2053(a). Each commissioner must have
expertise in “areas related to consumer products.” Id. No more
than three commissioners may be members of the same
political party. Id. § 2053(c). The Act contains a for-cause
removal restriction: Commissioners “may be removed by the
President for neglect of duty or malfeasance in office but for
no other cause.” Id. § 2053(a).
When promulgating a safety standard, the Commission
must follow procedures mandated by the Act, as well as those
required by the Administrative Procedure Act (“APA”). See
4
15 U.S.C. § 2060(c) (stating that a reviewing court “shall have
jurisdiction to review the consumer product safety rule” in
accordance with the APA).
Four of the Act’s provisions are relevant in this case:
First, the Act provides that industry organizations, such as
the WCMA, may create “voluntary standards” that render
regulation unnecessary. The Commission must refrain from
issuing a safety standard if: (i) compliance with the voluntary
standard “would eliminate or adequately reduce the risk of
injury addressed”; and (ii) it is likely that the industry will
substantially comply with the voluntary standard. 15 U.S.C.
§ 2056(b)(1).
Second, the Act requires the Commission to conduct a
“final regulatory analysis” — i.e., a cost-benefit analysis —
before promulgating a safety standard. The analysis must
detail costs, benefits, and alternatives to the proposed standard,
and must address any issues raised by commenters. 15 U.S.C.
§ 2058(f)(2).
Third, the Commission must “make a host of findings”
before proposing a safety standard under the Act. Finnbin,
LLC v. Consumer Prod. Safety Comm’n, 45 F.4th 127, 131
(D.C. Cir. 2022). Those findings include: (1) “that the rule
(including its effective date) is reasonably necessary to
eliminate or reduce an unreasonable risk of injury associated
with [the] product”; (2) that any voluntary standard is not likely
to eliminate or reduce the risk of injury, or that it is “unlikely
that there will be substantial compliance” with the voluntary
standard; (3) that the rule’s benefits “bear a reasonable
relationship to its costs”; and (4) that the rule “imposes the least
burdensome requirement” to prevent or reduce the risk of
injury. 15 U.S.C. § 2058(f)(3)(A), (D), (E), (F).
5
Fourth, the Commission must set the proposed safety
standard’s effective date. The Act imposes a 180-day effective
date by default, “unless the Commission [1] finds, for good
cause shown, that a later effective date is in the public
interest[;] and [2] publishes its reasons for such finding.”
15 U.S.C. § 2058(g)(1). As noted, the Commission must find
that the effective date “is reasonably necessary to eliminate or
reduce an unreasonable risk of injury associated with [the]
product” regulated. Id. § 2058(f)(3)(A).
In addition, the Commission’s actions must comport with
the APA’s familiar requirements. A reviewing court must set
aside agency actions found to be “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706. And when an agency conducts a rulemaking,
as here, it must provide the public with notice and an
opportunity to comment on the content of the proposed rule.
Id. § 553(b)–(c).
B.
The United States window covering market boasts sales of
roughly $6.7 billion annually and includes approximately
1,900 manufacturers and retailers. Safety Standard for
Operating Cords on Custom Window Coverings, 87 Fed. Reg.
73,144, 73,149 (Nov. 28, 2022) (to be codified at 16 C.F.R. pt.
1260) (“Final Rule”).
The industry divides window coverings into two types:
“stock” and “custom.” “Stock” window coverings are
“completely or substantially fabricated” before being sold to
consumers, including pre-assembled products that are modified
or adjusted before sale. See Final Rule, 87 Fed. Reg. at 73,148;
see also J.A. 1328. “Custom” window coverings refer to “any
window covering that is not classified as a stock window
6
covering.” See Final Rule, 87 Fed. Reg. at 73,148; see also
J.A. 1328. As one commenter explained, custom products are
based on a consumer’s “desired specifications, including
dimensions, fabrics, colors, control mechanisms[,] and
mounting techniques.” J.A. 709. Custom products account for
44% of unit sales and a “disproportionate amount of revenue”
in the market. Final Rule, 87 Fed. Reg. at 73,149. Their prices
“can be as high as $5,000” per covering, and custom prices “are
on average higher than similar stock products sold by mass
retailers.” Id.
Some window coverings are operated with cords, while
others are cordless. Final Rule, 87 Fed. Reg. at 73,147. Corded
window coverings are at issue in this case. The industry has
developed three varieties of corded window coverings. First,
“cord-lock[]” systems “consist[] of two or more cords” that the
user pulls to raise the covering and lock it into place. Id. at
73,148. Second, “retractable cord-lift” systems require users
to pull a solid, plastic wand to raise the window covering,
which retracts into a headrail. See id.; see also Opening Br. 12.
Finally, “continuous-loop” systems have a beaded cord or
chain strung in a loop. Final Rule, 87 Fed. Reg. at 73,148. A
user can pull the loop one way to raise the covering or pull in
the opposite direction to lower the covering. Id.
Corded window coverings pose a deadly risk to children.
When children become tangled in operating cords, they can
strangle themselves or suffer serious injuries. Final Rule, 87
Fed. Reg. at 73,150. To reduce that risk, the industry has
developed modifications to corded systems. For example,
continuous-loop systems can be installed with a “tension
device” — a piece of metal or plastic that attaches to a wall and
holds the loop taut. Another safety device is a “rigid cord
shroud,” which encases the operating cord in a hard material,
7
thus “allow[ing] the user to use the pull cords while eliminating
access to the hazardous cords.” Id. at 73,158.
C.
The WCMA is a trade association that “represents the
interests of window covering industry manufacturers,
fabricators, and assemblers.” Opening Br. 20. In 1996, the
WCMA adopted a voluntary safety standard to mitigate the
strangulation risk posed to children by operating cords. The
voluntary standard established length requirements for
operating cords, required that products include safety warnings
and tags, and eliminated loop-ended operating cords. Since
then, the WCMA has revised its voluntary standard seven
times, most recently in 2018 and 2022. The WCMA publishes
its voluntary standards through the American National
Standards Institute (“ANSI”), a nonprofit organization that
administers such standards in U.S. markets. See J.A. 737–39.
The 2018 voluntary standard “[e]liminated corded stock
window coverings” altogether “by requiring that these products
be cordless, have only inaccessible cords, or have a short helper
cord.” J.A. 739; see also J.A. 1328. That standard, however,
did not apply to custom products.
Beginning in late 2021, both the WCMA and the
Commission took steps to make custom window coverings
safer. The WCMA first presented revisions to its voluntary
safety standard in January 2022, proposing to eliminate free-
hanging cords, to require rigid cord shrouds to pass tests
showing that they kept cords inaccessible, and to impose strict
requirements to ensure that tension devices kept cords held
taut. J.A. 520. The Commission expressed concerns that the
WCMA’s revisions did not adequately mitigate the risk to
children of strangulation. The WCMA nevertheless approved
8
its revisions on August 15, 2022, and the ANSI published the
voluntary standard on December 23, 2022. The WCMA’s
2022 voluntary standard does not take effect until June 2024.
Meanwhile, on January 7, 2022, the Commission
published a notice of proposed rulemaking “to require that
operating cords on custom window coverings meet the same
requirements as [those for] stock window coverings.” Safety
Standard for Operating Cords on Custom Window Coverings,
87 Fed. Reg. 1014, 1014 (Jan. 7, 2022) (“Proposed Rule”). In
effect, the Commission proposed to eliminate corded products.
See id.The Commission received 2,060 written comments and
heard oral comments from stakeholders at a March 16, 2022,
hearing. On November 28, 2022, the Commission
unanimously approved the Final Rule and published it in the
Federal Register. Final Rule, 87 Fed. Reg. at 73,144. The Final
Rule requires custom window coverings to be cordless, to have
inaccessible operating cords, or to have operating cords “equal
to or shorter than 8 inches.” Id. at 73,145. The Final Rule
discusses the 2018 and 2022 versions of the WCMA’s
voluntary standard, responds to comments, and makes specific
findings about costs and benefits. Over the objections of
hundreds of commenters, the Small Business Administration,
and the Commission’s own staff, the Commission set a 180-
day effective date for the industry to comply with the Final
Rule — May 30, 2023. Id. at 73,190.
With the Final Rule’s effective date fast approaching, the
WCMA petitioned this court for review and moved for a stay
pending appeal. A special panel granted that motion, stayed
the promulgation of the Final Rule, and ordered an expedited
briefing schedule.
9
The WCMA has representational standing in this matter,
as its members consist of companies who are the “object of the
action . . . at issue.” Bonacci v. TSA, 909 F.3d 1155, 1159
(D.C. Cir. 2018). We have jurisdiction to review the Final Rule
under 15 U.S.C. § 2060(c).
II.
On appeal, the WCMA challenges the safety standard
adopted in the Final Rule, arguing that the Commission:
(1) violated notice-and-comment requirements under the APA;
(2) acted arbitrarily and capriciously under the APA and
violated the Act by giving insufficient weight to the voluntary
standard and by performing an erroneous cost-benefit analysis;
(3) set an arbitrary 180-day effective date for the Final Rule, in
violation of the APA and the Act; and (4) had no authority to
promulgate the challenged rule because its members are subject
to an unconstitutional for-cause removal provision. For the
following reasons, we find several of the WCMA’s arguments
under the APA and the Act meritorious. We therefore vacate
the Final Rule. Accordingly, we need not reach the WCMA’s
constitutional argument.
A.
When an agency seeks to promulgate a rule, the APA
requires it to provide “notice” of “either the terms or substance
of [a] proposed rule or a description of the subjects and issues
involved,” and then “give interested persons an opportunity to
participate in the rule making through submission of written
data, views, or arguments.” 5 U.S.C. § 553(b)(3), (c). The
WCMA argues that the Commission violated notice-and-
comment requirements by failing to disclose injury-incident
data on which the Proposed Rule and Final Rule relied, by
changing its cost-benefit analysis in the Final Rule without
10
industry input, and by ignoring revisions to the industry’s
voluntary standard that made the Final Rule unnecessary. We
agree that the Commission erred by failing to disclose its
injury-incident data but reject the WCMA’s other arguments.
1.
In performing the statutorily required cost-benefit analysis
for its proposed safety standard, the Commission evaluated the
potential benefits of the Final Rule by estimating how many
injuries would be avoided if the Final Rule took effect. See
J.A. 580 tbl.15 n.*; see also J.A. 582 tbl.17. The Commission
relied on a proprietary database of its own creation to estimate
the number of injuries that have been caused by corded window
coverings. See Final Rule, 87 Fed. Reg. at 73,152.
“Based on newspaper clippings, consumer complaints,
death certificates purchased from states, medical examiners’
reports, reports from hospital emergency department-treated
injuries, and in-depth investigation reports,” the Commission
found that at least 209 fatal and near-miss strangulations
involving operating cords had occurred between January 2009
and December 2021, among children who were eight years old
and younger. Final Rule, 87 Fed. Reg. at 73,151–52, 73,152
tbl.2a. The Commission could not determine the type of
window covering (i.e., stock or custom) for 123 of the 209
reported incidents. Id. at 73,152 tbl.2b.
The Commission projected that the Final Rule would yield
benefits of approximately $23 million if it were enacted. That
figure relied on the Commission’s estimate of annual deaths
and injuries that would be caused by corded window coverings
in the absence of the Final Rule, the “value of a statistical life”
of each child who might be injured, and the distribution of
expected injuries across different types of window coverings.
11
Final Rule, 87 Fed. Reg. at 73,182. At many steps in this
analysis — for example, when estimating the annual deaths and
injuries caused by custom window coverings — the
Commission relied on its injury-incident database.
According to the WCMA, the Commission violated the
APA by failing to disclose internally compiled reports
concerning the 209 injury incidents included in the database.
Instead, the Commission shared redacted versions of the
incident reports, but only after the WCMA filed multiple
Freedom of Information Act (“FOIA”) requests. The
Commission then produced an undated spreadsheet
summarizing the purported injuries, but only after this lawsuit
began. The Commission argues that it met the APA’s
requirements by providing “summaries of each incident, which
were discussed in the notice of proposed rulemaking, and
[were] made available to [the WCMA] in connection with this
litigation.” Comm’n Br. 49. That approach was proper, in the
Commission’s view, “to appropriately protect [the victims’]
sensitive personal and medical information.” Id. at 50.
“[W]e have cautioned that the most critical factual
material that is used to support the agency’s position on review
must have been made public in the proceeding and exposed to
refutation.” Air Transp. Ass’n of Am. v. FAA, 169 F.3d 1, 7
(D.C. Cir. 1999) (emphasis omitted); accord Ass’n of Data
Processing Serv. Orgs., Inc. v. Bd. of Governors of Fed.
Reserve (ADPSO), 745 F.2d 677, 684 (D.C. Cir. 1984). It “is
the agency’s duty to identify and make available technical
studies and data that it has employed in reaching the decisions
to propose particular rules.” Owner-Operator Indep. Drivers
v. FMCSA, 494 F.3d 188, 199 (D.C. Cir. 2007) (cleaned up).
“Disclosure of staff reports allows the parties to focus on the
information relied on by the agency and to point out where that
information is erroneous or where the agency may be drawing
12
improper conclusions from it.” Nat’l Ass’n of Regul. Util.
Comm’rs v. FCC (NARUC), 737 F.2d 1095, 1121 (D.C. Cir.
1984).
The Commission violated the foregoing principles and
acted arbitrarily by failing to disclose the individual incident
reports underlying its injury-incident dataset. To make its
statutorily mandated cost-benefit assessment, the Commission
estimated the number of injuries that would be caused by
custom window coverings if the Final Rule were not
promulgated, based on historical information from its
proprietary dataset. Thus, the injury-incident dataset contained
“critical factual material” that supported the rulemaking. Air
Transp. Ass’n of Am., 169 F.3d at 7. A “genuine interchange”
about the accuracy of the data did not occur during the
rulemaking, Conn. Light & Power Co. v. NRC, 673 F.2d 525,
530 (D.C. Cir. 1982), because no usable information was
provided to the public at that time. Instead, the agency
provided “about one-third of the reports” in “heavily redacted”
form to the WCMA in response to certain FOIA requests.
Reply Br. 21; see also J.A. 737 n.8. And the agency’s summary
of the underlying data was disclosed only to the WCMA, long
after the Final Rule was published, during the pendency of this
litigation. See Comm’n Br. 49.
We have noted that “requiring agencies to obtain and
publicize the data underlying all studies on which they rely
would be impractical and unnecessary.” Am. Trucking Ass’ns
v. EPA, 283 F.3d 355, 372 (D.C. Cir. 2002) (internal quotation
marks omitted). But that concern is inapposite in this
circumstance, where the agency “possessed the underlying data
but failed to include it in the rulemaking record.” Coalition of
Battery Recyclers Ass’n v. EPA, 604 F.3d 613, 623 (D.C. Cir.
2010). Although the Commission later disclosed injury-
incident summaries to the WCMA, those summaries should
13
have been made public during the rulemaking itself — not
provided to a single party during a post hoc judicial proceeding.
See Air Transp. Ass’n of Am., 169 F.3d at 7. In any event, we
are skeptical that the minimal information in the summaries
satisfies the APA’s disclosure requirements. To provide a
meaningful opportunity for commenters to provide substantive
feedback, the Commission should have made public the
incident reports that it used to support its calculation of
benefits.
The Commission asserts that disclosing the injury-incident
reports would have been improper because that would have
revealed protected “personal, medical, or manufacturer-
specific information.” Comm’n Br. 50. That argument misses
the mark. The deaths and injuries enumerated in the dataset no
doubt raise personal-privacy concerns. But the Commission
could have redacted sensitive information from the reports
before releasing them. The Commission has not justified its
decision to withhold critical information altogether because of
generalized personal-privacy concerns.1
1
Although the Commission cites 15 U.S.C. § 2055(a) for the
proposition that “certain information obtained by [the] Commission
[is] confidential,” Comm’n Br. 50, it overstates that statute’s scope.
Section 2055(a)(1) restates a general rule that information “otherwise
protected by law from disclosure to the public” shall remain
confidential. 15 U.S.C. § 2055(a)(1). The remainder of that
subsection designates trade secrets and information relating to a
“manufacturer” or “private labeler” of a consumer product — i.e.,
those who manufacture, import, or own a consumer product’s brand
or trademark — as confidential. Id. § 2055(a)(2)–(3). Section
2055(a) does not, as the Commission suggests, impose a categorical
confidentiality requirement on all personal information obtained
during an informal rulemaking. Nor does it suggest that the
Commission may solve any privacy concerns by withholding the
14
2.
Notice-and-comment violations are subject to “the rule of
prejudicial error.” 5 U.S.C. § 706. We “will not set aside a
rule absent a showing by the petitioner[] ‘that [it] suffered
prejudice from the agency’s failure to provide an opportunity
for public comment.’” Am. Radio Relay League v. FCC, 524
F.3d 227, 237 (D.C. Cir. 2008) (quoting Gerber v. Norton, 294
F.3d 173, 182 (D.C. Cir. 2002)). A petitioner may demonstrate
prejudice “by showing that it ‘ha[s] something useful to say’”
about undisclosed information “that may allow it to ‘mount a
credible challenge’ if given the opportunity to comment.” Id.at 237–38 (first quoting Chamber of Com. v. SEC, 443 F.3d
890, 905 (D.C. Cir. 2006); then quoting Gerber, 294 F.3d at
184). “A petitioner is not required to show that its comments
would have persuaded the agency to reach a different outcome
in order to establish prejudice.” 1 KRISTIN E. HICKMAN &
RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE
§ 5.3.2 (6th ed. 2019).
The WCMA has made the requisite showing of prejudice
from the Commission’s nondisclosure of its injury-incident
dataset and underlying incident reports. In the WCMA’s
comment on the Proposed Rule, the WCMA expressed several
concerns about the Commission’s data that might have been
further developed or amplified if the WCMA had been given
access to the incident reports. The WCMA noted: (1) a “spike”
in injuries for 2009 and 2010 that may have stemmed from a
specific type of window covering, “Roman shade[s],” which
the WCMA “swiftly and decisively” addressed by amending
data altogether. Cf. United States v. Am. Honda Motor Co., Inc., 143
F.R.D. 1, 8–9 (D.D.C. 1992) (reviewing Commission procedures for
creating “a hot line and a central library depository” to disclose
information about all-terrain vehicle injuries while allowing
manufacturers to raise § 2055(a) objections).
15
the voluntary standard; (2) the use of “anecdotal” data, which
the WCMA claimed did not “support inferences based on the
percentage of incidents attributed to different product types”;
and (3) the fact that the injury dataset “[did] not identify the
age of the custom window coverings involved in the incidents,”
making it impossible to draw conclusions about the
effectiveness of the WCMA’s voluntary standard “in reducing
the risk of incidents and injuries.” J.A. 745–47, 749–50. The
Commission ignored those comments when promulgating the
Final Rule. The arguments made by the WCMA during the
rulemaking demonstrate that it “had something useful to say”
about the underlying incident reports, and that it was prejudiced
by its inability to evaluate critical information relied upon by
the agency. Chamber of Com., 443 F.3d at 905.
3.
We reject the WCMA’s remaining notice-and-comment
objections.
First, the WCMA claims error in the Commission’s failure
to discuss the 2022 revision to the voluntary standard “until the
[F]inal Rule itself.” Opening Br. 43–44. In other words, the
WCMA believes that the Proposed Rule should have addressed
the 2022 revision. But the Commission published its notice of
proposed rulemaking on January 7, 2022, long before the 2022
revision to the voluntary standard was approved by the WCMA
on August 15, 2022. Nothing in the Act or the APA required
the Commission “to evaluate an unfinished draft when
promulgating its rule.” Comm’n Br. 44. The Final Rule was
then published on November 28, 2022; and the 2022 revision
to the voluntary standard was published on December 23, 2022.
See J.A. 103–04. The Final Rule discussed the 2022 revision
as an alternative to the adopted safety standard. Final Rule, 87
Fed. Reg. at 73,165–67. Under the circumstances, the
16
Commission was not required to address the 2022 revision any
earlier in the rulemaking process.
Second, the WCMA argues that the Commission “made
substantial changes to its cost-benefit analysis” in the Final
Rule without industry input. Opening Br. 45–46. That
criticism lacks merit because commenters “should have
anticipated” that such changes were possible, and they
therefore had an opportunity to comment. See Int’l Union,
United Mine Workers of Am. v. MSHA, 626 F.3d 84, 94–95
(D.C. Cir. 2010). In the Proposed Rule, the Commission
explained the “[m]any sources of uncertainty” in its cost-
benefit analysis — such as cost estimates, the value of a
statistical life, and the number of window coverings in use —
and suggested that it might increase the compliance-cost
estimate. Proposed Rule, 87 Fed. Reg. at 1044, 1047. Those
statements by the Commission gave commenters meaningful
notice that the cost-benefit analysis might change, and thus
provided an opportunity for them to comment. AFL-CIO v.
Donovan, 757 F.2d 330, 338 (D.C. Cir. 1985). The WCMA
took advantage of that opportunity by extensively critiquing the
proposed cost-benefit analysis in a comment. See J.A. 767–70.
We therefore conclude that the cost-benefit analysis in the
Final Rule was a “logical outgrowth” of the one included in the
Proposed Rule. See Air Transp. Ass’n of Am. v. Civil
Aeronautics Bd., 732 F.2d 219, 224 (D.C. Cir. 1984).
B.
Next, the WCMA challenges the Commission’s factual
findings. It argues that the Commission gave insufficient
weight to the efficacy of the 2018 and 2022 versions of the
voluntary standard; made errors in performing its cost-benefit
analysis; and arbitrarily imposed a 180-day effective date.
17
We may not uphold a safety standard unless the
Commission’s findings and conclusions are “supported by
substantial evidence on the record taken as a whole.” 15 U.S.C.
§ 2060(c). “Substantial evidence is not a high bar.” DHSC,
LLC v. NLRB, 944 F.3d 934, 937 (D.C. Cir. 2019). “It means
— and means only — such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.”
Biestek v. Berryhill, 139 S. Ct. 1148, 1154 (2019) (internal
quotation marks omitted).
“When applied to rulemaking proceedings, the substantial
evidence test ‘is identical to the familiar arbitrary and
capricious standard.’” S. Carolina Pub. Serv. Auth. v. FERC,
762 F.3d 41, 54 (D.C. Cir. 2014) (quoting Wis. Gas Co. v.
FERC, 770 F.2d 1144, 1156 (D.C. Cir. 1985)). Under the
arbitrary and capricious standard, an agency must “articulate a
satisfactory explanation for its action including a ‘rational
connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc.
v. United States, 371 U.S. 156, 168 (1962)). The agency’s
explanation must “enable us to conclude that the [agency’s
action] was the product of reasoned decisionmaking.” Id. at
52.2
2
The WCMA claims that the Act’s reference to “substantial
evidence” imposes a heightened standard of review. See Opening
Br. 21–22. Not so. We once alluded to (but did not decide) the
“interesting question” that the Act’s substantial evidence standard
might impose “more strict” procedural requirements than an arbitrary
and capricious standard of review. Forester v. Consumer Prod.
Safety Comm’n, 559 F.2d 774, 789 n.22 (D.C. Cir. 1977). The Fifth
Circuit adopted that view shortly thereafter. Aqua Slide ‘N’ Dive
Corp. v. Consumer Prod. Safety Comm’n, 569 F.2d 831, 837 (5th
Cir. 1978). But we later rejected such an interpretation. In an
18
We conclude that the Commission properly weighed the
voluntary standard, but erred in performing its cost-benefit
analysis and setting the Final Rule’s effective date. We take
each issue in turn.
1.
When a regulated industry has imposed a voluntary
standard, the Commission may not promulgate a safety rule
unless it finds that: (i) compliance with the voluntary standard
“is not likely to result in the elimination or adequate reduction
of [the] risk of injury”; or (ii) “it is unlikely that there will be
substantial compliance” with the voluntary standard. 15 U.S.C.
§ 2058(f)(3)(D); see also id. § 2058(b)(2). Here, the
Commission fulfilled its obligation to examine the 2018
voluntary standard, which was the standard in effect at the time
of the rulemaking; and the Commission properly issued the
required findings based on the 2018 standard when it
promulgated the Final Rule. See Final Rule, 87 Fed. Reg. at
73,192–94. Additionally, the Commission assessed whether
the 2022 proposed revisions to the voluntary standard would
sufficiently mitigate the risk of injury, even though the 2022
revision had not yet been published at the time of the
rulemaking. See id. at 73,183–84.
The WCMA essentially claims that the Commission’s
required findings about the efficacy of the voluntary standard
were not supported by substantial evidence. We disagree. The
opinion by then-Judge Scalia, we emphasized “that the distinction
between the substantial evidence and the arbitrary or capricious test
is largely semantic” and that the two tests “are one and the same.”
ADPSO, 745 F.2d at 683–684 (cleaned up). The WCMA’s contrary
view is “no longer viable.” Zen Magnets, LLC v. Consumer Prod.
Safety Comm’n, 841 F.3d 1141, 1148 n.8 (10th Cir. 2016).
19
Commission found that the voluntary standard failed to
adequately address the risk of strangulation associated with
custom products. Final Rule, 87 Fed. Reg. at 73,194. That
finding was clearly explained and well supported by evidence.
Although the WCMA insists that the voluntary standard
effectively reduced the risk of injury from corded window
products, the Commission apparently took the permissible
position that such risk should be eliminated. We highlight
three flaws that the Commission found with the 2018 and 2022
versions of the voluntary standard.
First, the 2018 revision allowed “hazardous operating
cords” that were either “long enough for a child to wrap around
their neck” or capable of becoming “tangled and creat[ing] a
loop large enough for a child to insert [its] head.” Final Rule,
87 Fed. Reg. at 73,157. Although that revision required
window coverings to be operated with wands instead of
operating cords, purchasers of custom products could override
the wand requirement. Id. at 73,160 (“Firms typically allow
consumers to easily change the default options during the
custom order process.”). The 2018 revision also mandated that
operating cords could not exceed 40% of a window covering’s
height, but such operating cords could still be dangerous to
children when extended. See id. at 73,157; see also J.A. 1329.
Second, the 2018 revision permitted manufacturers to sell
continuous-loop systems, provided that the products used cord
tension devices. J.A. 1329. The Commission rejected this
potential solution. “[C]onsumers must use or install [a tension
device] separately” from the window covering itself, which
allows them to avoid utilizing the tension device. Final Rule,
87 Fed. Reg. at 73,161. And “depending on how taut the cord
loop is, it can still allow a child’s head to enter the opening”
when a tension device is used. Id. at 73,161, 73,192. The
Commission noted that several reported injuries involved
20
continuous-loop systems that had tension devices installed. Id.
at 73,161. Because the 2022 revision continued to rely on
tension devices, the Commission deemed it inadequate. The
Commission reasoned that consumers could still “set up the
window covering in an unsafe manner . . . by removing the
tension device from the loop” or “by leaving the tension device
on the loop, but not attaching it on the wall.” Id. at 73,165–66.
Moreover, the Commission reiterated that a tension device,
even when properly installed, “still allows an accessible
hazardous loop.” Id. at 73,166–67.
Third, the Commission disagreed with the 2018 revision’s
finding that retractable cord-lift systems were an acceptable
safety feature. The Commission noted that those systems still
posed a strangulation risk because the retractable cords, when
pulled, had a “low retraction force” and exposed enough cord
such that “a child [could] manipulate the cord and wrap the
cord around their neck.” Final Rule, 87 Fed. Reg. at 73,157–
58. Although the 2022 revision mandated that retractable cord-
lift systems use wands instead of cords, it still allowed a length
of exposed cord, or “stroke length,” of thirty-six inches when
pulled, which poses a strangulation risk. Id. at 73,165.
Ultimately, the Commission made the common-sense
observation that “[h]aving no operating cords effectively
eliminates the strangulation hazard . . . because there is no cord
to cause strangulation.” Final Rule, 87 Fed. Reg. at 73,162.
The WCMA’s argument that the Commission relied on “old
data, hypotheticals, and speculation,” Reply Br. 6–7, to make
that finding lacks merit. See Nasdaq Stock Mkt. LLC v. SEC,
38 F.4th 1126, 1142–43 (D.C. Cir. 2022) (rejecting a criticism
of an agency’s “purely theoretical” concern because the agency
relied on industry comments and its own experience when
promulgating a rule); cf. Associated Gas Distribs. v. FERC,
824 F.2d 981, 1008 (D.C. Cir. 1987) (“Agencies do not need to
21
conduct experiments in order to rely on the prediction that an
unsupported stone will fall.”). The Commission reasonably
relied on data, industry comments, and its own expertise when
determining that the voluntary standards would not sufficiently
address the risk of strangulation.3
2.
The WCMA asserts that the Commission erred by finding
that the rule’s expected benefits bore a “reasonable
relationship” to expected costs. Opening Br. 29 (citing 15
U.S.C. § 2058(f)(3)(E)). Furthermore, the WCMA claims that
the Commission’s analysis is “not accurate” because it
underestimates costs and overstates benefits. Id. at 30. We
agree with the WCMA that the Commission’s estimate of cost
increases from implementation of the Final Rule is flawed
because it relies on price data for stock products, not custom
products. Id. at 30–31. That error undermines its finding about
the relationship between expected benefits and costs.
We review cost-benefit analyses deferentially. Nat’l Ass’n
of Home Builders v. EPA, 682 F.3d 1032, 1040 (D.C. Cir.
2012). “Such cost-benefit analyses epitomize the types of
decisions that are most appropriately entrusted to the expertise
of an agency.” Off. of Commc’n of United Church of Christ v.
FCC, 707 F.2d 1413, 1440 (D.C. Cir. 1983). But “a serious
3
Referring to the Commission’s database of injury incidents, the
WCMA implies that the Commission “relied on injury data that did
not capture subsequent regulatory actions” reducing the injury rate,
suggesting that conclusions drawn from that injury data are
unreliable. See Opening Br. 26–27; Reply Br. 6–7. But the
Commission also referenced studies that independently and
substantially supported its finding that the voluntary standards would
not sufficiently reduce the risk of strangulation. Final Rule, 87 Fed.
Reg. at 73,153–54.
22
flaw” in a cost-benefit analysis “can render the [resulting] rule
unreasonable” and warrant vacatur on arbitrary and capricious
grounds. Nat’l Ass’n of Home Builders, 682 F.3d at 1040; see
also Thompson v. Clark, 741 F.2d 401, 405 (D.C. Cir. 1984)
(reasoning that “an unreasonable assessment of social costs and
benefits” can render a rule arbitrary and capricious). An
agency contravenes the APA when it “fails to examine the
relevant data,” which could reveal “that the figures being used
are erroneous.” Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d
46, 57 (D.C. Cir. 2015).
Here, the Commission crafted its cost estimate by:
(i) making low-end and high-end estimates of the percentage
increase in manufacturing costs resulting from the Final Rule;
then (ii) multiplying those estimates by the mean price of
different types of window covering units. J.A. 572–73. To find
the mean prices, the Commission appears to have relied on a
third-party study that averaged prices for products listed in the
online catalogs of two major retailers. See id. at 572 n.20,
1289–90 & n.1. Virtually all of the products surveyed in this
study were stock products. Id. at 1289. According to the
WCMA, these selectively sourced prices created an
“artificially low” cost estimate. Opening Br. 31. One
commenter complained that this data was based on “mass-
produced, high volume, low end window coverings,” and
provided its own (much higher) estimates of mean unit prices
for custom products. See J.A. 720–21. Moreover, both the
Commission and its underlying study acknowledged that
custom products are more expensive on average than stock
products. See Final Rule, 87 Fed. Reg. at 73,193; J.A. 1290.
Nothing in the Rule or the final regulatory analysis
demonstrates that the Commission reckoned with the
discrepancy between the prices for stock and custom window
coverings, an issue that was repeatedly brought to its attention.
23
The Commission erroneously argues that it accounted for “data
relating to stock products” by producing low-end and high-end
cost estimates, implying that the high-end estimate adequately
incorporated costs relating to custom products. See Comm’n
Br. 37. But both the low-end and high-end cost estimates were
derived by applying expected percentage increases in cost to
the inaccurate mean unit prices. See J.A. 572 tbl.9, 573 tbl.10.
If the mean unit prices were too low, as the WCMA contends,
then both the low-end and high-end estimates would increase
as a result of any corrections. It is not just that “the low-end
estimate was too low,” Comm’n Br. 37, but that the entire range
of cost estimates would shift upward if the mean unit prices
were corrected to account for custom products.4
While we could speculate about the Commission’s
justifications for relying on stock window covering data, it is
not our role to “supply a reasoned basis for the agency’s action
that the agency itself has not given.” Bowman Transp., Inc. v.
Ark.-Best Freight Sys., Inc., 419 U.S. 281, 285–86 (1974)
(citing SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)). On
this administrative record, we cannot say that substantial
evidence supports the Commission’s finding that the Final
Rule’s expected benefits bore a “reasonable relationship” to its
4
Additionally, there appear to be many discrepancies in the
Commission’s calculations when quantifying costs and benefits.
Consider one example: When estimating annual window covering
shipments for interior shutters, the Commission suggested that
54.4% of 134,867 shipments is equal to zero. See J.A. 574 tbl.11;
see also, e.g., J.A. 572 tbl.9 (wrongly stating for cellular shades that
4% of 94.51 is 5.67, rather than 3.78). While most of the
discrepancies are minor — perhaps resulting from rounding or
transcription errors — the number of arithmetic mistakes undermines
the Commission’s analysis and suggests that greater care is
warranted on remand.
24
expected costs because the cost calculation failed to properly
examine the relevant data.5
3.
Under the Act, consumer product safety standards have a
presumptive 180-day effective date unless the Commission
finds, for “good cause shown,” that “a later effective date is in
the public interest.” 15 U.S.C. § 2058(g)(1). A safety standard
also must include a finding “that the rule (including its effective
date) is reasonably necessary to eliminate or reduce an
unreasonable risk of injury associated with [the regulated]
product.” Id. § 2058(f)(3)(A) (emphasis added). Here, the
Commission declined to find “good cause shown” that a later
date was “in the public interest”; and it affirmatively found that
the 180-day deadline was “reasonably necessary” to eliminate
or reduce the risk of injury posed by corded custom window
coverings. Final Rule, 87 Fed. Reg. at 73,194.
At the threshold, the Commission suggests that the Act’s
references to “good cause shown” and “public interest” commit
5
The WCMA further argues that the cost-benefit analysis
“completely ignore[d] the commercial side of the custom market,”
underestimated industrywide compliance costs, and improperly
assumed that custom window products were involved in over 40%
of accidents despite representing 20% of window coverings in use.
Opening Br. 31–34. We reject those challenges. An administrative
agency must “exercise its expertise to make tough choices” about
costs and benefits, which often means “hazard[ing] a guess” in
“conditions of serious uncertainty.” Pub. Citizen v. Fed. Motor
Carrier Safety Admin., 374 F.3d 1209, 1221 (D.C. Cir. 2004). While
commenters might disagree with the agency’s assumptions and
reasoning, such judgments fall within the agency’s purview when
conducting a cost-benefit analysis.
25
the effective-date decision to agency discretion, requiring
“highly deferential[]” review, if any. See Comm’n Br. 51–52.
We disagree. The APA “codifies the traditional exception that
agency action is unreviewable” when “committed to agency
discretion by law.” Sierra Club v. EPA, 47 F.4th 738, 745
(D.C. Cir. 2022). That exception applies only when “courts
have no legal norms pursuant to which to evaluate the
challenged action, and thus no concrete limitations to impose
on the agency’s exercise of discretion.” Physicians for Soc.
Resp. v. Wheeler, 956 F.3d 634, 643 (D.C. Cir. 2020) (cleaned
up). To be sure, an effective-date extension requires “good
cause shown,” 15 U.S.C. § 2058(g)(1), which is an
“unrestricted and undefined” term, Clifford v. Peña, 77 F.3d
1414, 1417 (D.C. Cir. 1996). But we have reviewed such a
determination despite the Commission’s “broad discretion,”
observing that “the requirement of reasoned decisionmaking
has vitality as to such deferral measures.” ASG Indus., Inc. v.
Consumer Prod. Safety Comm’n, 593 F.2d 1323, 1335 (D.C.
Cir. 1979). Moreover, the Commission must separately find
that the effective date is “reasonably necessary” to mitigate
injury risks. 15 U.S.C. § 2058(f)(3)(A). Regardless of the
standard the Commission relied on, its justifications for a 180-
day effective date do not reflect the “reasoned decisionmaking”
required by the APA. Allentown Mack Sales & Serv., Inc. v.
NLRB, 522 U.S. 359, 374 (1998) (quoting State Farm, 463 U.S.
at 52).
At least 401 industry commenters informed the
Commission that a 180-day compliance deadline was not
feasible. Final Rule, 87 Fed. Reg. at 73,177; see also, e.g.,
J.A. 699 (“There are countless changes by numerous parties
throughout the supply chain that would be required to be made
in a short amount of time.”); id. at 717 (“Even if it were
possible to just substitute all lost corded product volume with
a cordless version of the same product (which is not possible),
26
we still would not be able to meet the 180-day timeline.”). The
Small Business Administration also “expressed concerns”
about the compliance deadline. Final Rule, 87 Fed. Reg. at
73,179. Even the Commission’s own staff emphasized that a
short-term effective date “ha[d] the potential to be very
disruptive for producers and consumers” and that postponing
the effective date “would reduce the benefits of the rule by only
a very small amount as most noncompliant window coverings
will take years to cycle out of use.” J.A. 590. For these and
other reasons, the staff recommended an effective date of either
one or two years, depending on the product. Id. Nevertheless,
the Commission declined to extend the deadline, relying
instead on the comment of a single manufacturer, Safe T Shade,
LLC, which asserted that “a 180-day lead time is more than
sufficient for a painless [i]ndustry implementation.” See Final
Rule, 87 Fed. Reg. at 73,177. Under the circumstances, that
decision was arbitrary. The Commission did not explain why
it chose to credit the opinion of Safe T Shade’s company
president, see id. at 73,177, 73,189, over the contrary feedback
that it received from 401 other commenters, the Small Business
Association, and its own staff.
Moreover, the Commission’s stated reasons for declining
to find “good cause” to extend the compliance deadline were
flawed. See Final Rule, 87 Fed. Reg. at 73,177.
First, the Commission highlighted that its economic
analysis “[did] not conclude that a longer effective date creates
a material reduction in the estimated costs of the rule, and
commenters [did] not show that this would be the case.” Final
Rule, 87 Fed. Reg. at 73,177. That statement makes little
sense. The “estimated costs of the rule” refers to the total cost
to the window covering industry that would result from the
Final Rule. See J.A. 581 tbl.16. That figure appears to bear
little relationship to determining whether an extended
27
compliance deadline is in the public interest. Indeed, when
assessing good cause for an extension, the agency looked to a
different cost: “the possibility that some styles of custom
window coverings may be less available during a transition
period.” Final Rule, 87 Fed. Reg. at 73,194.
Second, the Commission noted that stock window
coverings have been subject to a voluntary standard since 2018
that essentially prohibits corded products, and that the same
compliance methods “can be used for, or at a minimum can be
adapted to, custom window coverings.” Final Rule, 87 Fed.
Reg. at 73,177. That assertion “failed to consider an important
aspect of the problem.” State Farm, 463 U.S. at 43. Industry
commenters emphasized that the safety features used in stock
products — e.g., cordless technologies — are not yet feasible
for custom window coverings. See, e.g., J.A. 740 (“Size,
weight, and location requirements for custom products prevent
the use of many of the cordless lift systems offered for stock
products, despite [the Commission’s] claims to the contrary.”);
id. at 849–50 (explaining that, for one product, changing from
a continuous-loop system to a cordless system would “reduce
the maximum available product size” and “add a $105
surcharge” to each unit). Moreover, the Commission failed to
address whether the proposed adaptations, even if feasible,
could be implemented during the 180-day grace period.
Third, the Commission reasoned that a short timeline
would not affect compliance because manufacturers have been
on notice of Canada’s regulations for window coverings, which
contain restrictions on operating cords and apply equally to
stock and custom products. Final Rule, 87 Fed. Reg. at 73,177.
That conclusion, however, relies on a false assumption that the
Final Rule and the referenced Canadian regulations impose the
same safety requirements. To the contrary, as the WCMA
points out, the two rules use different tests for “cord
28
accessibility” and “rigid shrouds and restraining devices.”
Opening Br. 39–40. The Canadian regulations assess cord
length only when the cord is not in use, but the Final Rule
imposes length requirements on operating cords even when
pulled. Id. at 39; compare Stay Add. 32–33, with Final Rule,
87 Fed. Reg. at 73,190, and J.A. 1334, 1336. Thus, it is not
fair to assume that industry compliance with the Canadian
regulations would also satisfy the requirements of the Final
Rule, thereby justifying a shorter effective date for the Final
Rule.6
Fourth, the Commission stated that “manufacturers have
been aware of [the Commission’s] proposed rule for at least
one year already,” since the Commission issued its notice of
proposed rulemaking. Final Rule, 87 Fed. Reg. at 73,177. That
is, the Commission suggested that window covering
manufacturers should have begun complying with the new
safety standard as soon as they learned of the Proposed Rule.
We reject that argument and its implications. Agency action is
not “final” until a conclusion is reached that “mark[s] the
6
The Commission appears to suggest that the WCMA has
forfeited any argument about how “the Canadian rule impacts
compliance” with the Final Rule because industry commenters
assertedly did not address that issue in the administrative
proceedings. Comm’n Br. 54 (citing Fla. Power & Light Co. v.
Lorion, 470 U.S. 729, 743 (1985)) (indicating that a reviewing court
must assess “the administrative record already in existence, not some
new record made initially in the reviewing court” (cleaned up)); see
also Final Rule, 87 Fed. Reg. at 73,177. But the Proposed Rule
acknowledged differences between the Canadian regulations and the
WCMA’s 2018 voluntary standard, including those referenced by the
WCMA on appeal. Proposed Rule, 87 Fed. Reg. at 1033. The
WCMA’s argument is therefore firmly grounded in the
administrative record.
29
consummation of the agency’s decisionmaking process,” from
which “rights or obligations have been determined” or “legal
consequences will flow.” Bennett v. Spear, 520 U.S. 154, 177–
78 (1997) (cleaned up). Here, the culmination of the agency’s
yearlong revision process was the Final Rule, and
manufacturers of window coverings had no new compliance
obligations until the Final Rule was promulgated. We will not
credit an agency explanation that requires regulated entities to
tailor their operations to adhere to an agency’s proposed rules.
That would make the subsequent notice-and-comment
proceedings superfluous and undermine the entire rulemaking
process.
Finally, the Commission also erred in finding that a 180-
day effective date was “reasonably necessary to address the
unreasonable risk of strangulation from operating cords on
custom window coverings.” Final Rule, 87 Fed. Reg. at
73,194. That finding was not supported by substantial
evidence. Although the Commission extensively discussed the
risk of strangulation posed by corded window coverings, see
supra Section II.B.1, neither the Final Rule nor the
administrative record examined how the timing of the effective
date would affect the risk of injury. The Commission therefore
had no apparent basis to conclude that the risk of injury
necessitated a 180-day effective date, as opposed to a one-year
or two-year deadline. Indeed, a comment from Commission
staff supported a contrary conclusion, suggesting that near-
term implementation of the Final Rule was not necessary. See
J.A. 590 (postponing effective date “would reduce the benefits
of the rule by only a very small amount”).
The Commission argues that interpreting § 2058(f)(3)(A)
to require a separate reasonable-necessity finding would read
§ 2058(g)(1)’s good-cause provision “out of the statute” and
render it “a nullity.” Comm’n Br. 52–53. But it is a “cardinal
30
principle of interpretation that courts must give effect, if
possible, to every clause and word of a statute.” Liu v. SEC,
140 S. Ct. 1936, 1948 (2020) (quoting Parker Drilling Mgmt.
Servs., Ltd. v. Newton, 139 S. Ct. 1881, 1890 (2019)). The
Commission’s interpretation asks us to violate that principle by
ignoring § 2058(f)(3)(A)’s mandate for the Commission to find
that “the rule (including its effective date) is reasonably
necessary to eliminate or reduce an unreasonable risk of injury
associated with [the regulated] product.” 15 U.S.C.
§ 2058(f)(3)(A) (emphasis added). The two provisions at issue
are reconcilable because they impose separate obligations: If
the Commission wishes to extend a safety standard’s effective
date, it must find good cause to do so; and regardless of such
an extension, the Commission must find that the effective date
is reasonably necessary to reduce or eliminate a risk of injury.
See id. § 2058(g)(1), (f)(3)(A).
C.
The WCMA claims that the Commission’s decision should
be vacated because its commissioners are “unconstitutionally
insulated from Presidential oversight” by their for-cause
removal restriction. Opening Br. 49; see also Seila Law LLC
v. CFPB, 140 S. Ct. 2183, 2201 (2020). Because other flaws
in the Commission’s rulemaking lead us to vacate and remand
the Final Rule, we need not reach that argument. See Bond v.
United States, 572 U.S. 844, 855 (2014) (recognizing the
“well-established principle” that a federal court “will not
decide a constitutional question if there is some other ground
upon which to dispose of the case” (quoting Escambia Cnty. v.
McMillian, 466 U.S. 48, 51 (1984) (per curiam))).
31
* * *
For the foregoing reasons, we grant the petition for review,
vacate the Final Rule, and remand this matter to the
Commission for further proceedings.
So ordered.