[00:00:00] Speaker 00: Case number 25-10-03, Hero's Technology US LLC, doing business as snuggle new organic petitioner versus consumer product safety commission. [00:00:11] Speaker 00: Ms. [00:00:11] Speaker 00: Rollins for the petitioner, Mr. Shi for the respondent. [00:00:15] Speaker 03: Good morning, counsel. [00:00:17] Speaker 03: Ms. [00:00:17] Speaker 03: Rollins, please proceed when you're ready. [00:00:21] Speaker 01: Thank you, Your Honor, and may it please the court. [00:00:23] Speaker 01: My name is Kara Rollins on behalf of the New Civil Liberties Alliance on behalf of Petitioner. [00:00:28] Speaker 01: I've requested one minute for rebuttal. [00:00:31] Speaker 01: This case is about agency power and regulatory shortcuts. [00:00:35] Speaker 01: Infant safety should never yield to administrative convenience, yet that is what happened here. [00:00:41] Speaker 01: Instead of promulgating the infant support cushion rule under the consumer product safety act's more thorough and comprehensive general rulemaking processes, the commission instead chose to regulate these products under the abbreviated regulatory process permitted for select infant and toddler goods. [00:00:58] Speaker 01: The problem with the CPSC's rulemaking approach, however, was that Congress never authorized CPSC to regulate infant support cushions under 15 USC 2056A, which only applies to durable infant or toddler products. [00:01:13] Speaker 01: Infant support cushions, as evidenced by the definition in the regulation, are not durable infant products within the meaning of 2056A. [00:01:21] Speaker 01: If I may take a moment, I'd like to describe my client's product as I believe it will be helpful for our discussion today. [00:01:26] Speaker 01: The Snuggle Me infant lounger is roughly two and a half feet long by a foot and a half wide. [00:01:32] Speaker 01: It features a padded bumper and an unpadded sling. [00:01:36] Speaker 01: What happens is that when you place the infant into the internal sling, it has a hammock-like effect and has the effect that mimics the baby's being held. [00:01:45] Speaker 01: It's meant to be a second set of hands for parents when they're eating a sandwich, folding laundry. [00:01:50] Speaker 01: And as the commission itself has admitted, products like my clients have utility for parents. [00:01:56] Speaker 01: Yet, they regulated these products under 2056A, regulatory shortcut, and effectively, for my client's product, removed them from the market altogether. [00:02:07] Speaker 01: Since 2007. [00:02:07] Speaker 04: Can you identify in the record where your client in the rulemaking process [00:02:18] Speaker 04: made a statutory authority objection? [00:02:22] Speaker 01: Yes, Your Honor. [00:02:24] Speaker 01: That actually occurs. [00:02:25] Speaker 01: And I apologize. [00:02:26] Speaker 01: I have to look at the exact. [00:02:31] Speaker 01: Sorry. [00:02:32] Speaker 01: In their comment, and this is at, I believe this is at JA 428, note 3, JA 434, JA 438, and JA 442. [00:02:44] Speaker 01: This is their comment. [00:02:45] Speaker 04: I read through that comment and I don't see this objection made. [00:02:51] Speaker 04: Can you point me to specific language where they said that this can't be regulated as a durable infant and toddler product? [00:03:00] Speaker 01: With respect to the 180 day period, and this is in the comment too, they say that one of the challenges is that these products [00:03:06] Speaker 01: do not fall under section 104. [00:03:08] Speaker 01: And that's in the rule itself. [00:03:10] Speaker 01: The commission recognized that both BAPI and Heroes Technology said that these do not fall under 104 because there wasn't a voluntary standard in place. [00:03:18] Speaker 01: Now, we've not maintained that challenge on appeal here. [00:03:21] Speaker 01: That's foreclosed by this court's decision in Finbin. [00:03:24] Speaker 01: But they did say in that comment that these products did not fall under that rule. [00:03:30] Speaker 01: And critically, I think, your honor, what you're getting at is the point, the question of waiver, which my friends on the other side have raised. [00:03:37] Speaker 01: This is a question of statutory interpretations about agency power. [00:03:40] Speaker 01: This court has routinely, as well as others, have said that when it goes to core powers like this, and it's just a matter, it's a substantive question of what the statute does or does not permit, that it's not necessarily waived and the court can hear the challenge. [00:03:54] Speaker 01: We believe that it is not waived. [00:03:56] Speaker 01: We believe that this court's case law suggests that where is here, [00:03:59] Speaker 04: There's also Supreme Court case law and case law from our circuit that says that if you don't raise a specific challenge in the rulemaking process, it's forfeited. [00:04:11] Speaker 01: I believe one of those concerns is that then it doesn't give fair notice to the agency. [00:04:15] Speaker 01: In this instance, this exact challenge was raised by Boppy, another manufacturer, and that they did have the opportunity to consider it and actually did. [00:04:25] Speaker 01: It's in the comments they did respond to and they said, no, we do have the power. [00:04:28] Speaker 04: I look at Boppy's comments and I don't see them making this specific challenge, which is that this isn't a durable infant and toddler product. [00:04:36] Speaker 01: Boppy's challenge is that pillow-like products, textiles, do not fall under 2056A. [00:04:42] Speaker 01: And that's consistent with, I mean, now we've added more to explain why that is. [00:04:47] Speaker 01: We've provided dictionary definitions of that. [00:04:50] Speaker 01: But I think Boppy's comment is very clear. [00:04:52] Speaker 01: They say pillow-like products, textiles, are not covered under 2056A's powers. [00:04:57] Speaker 02: I mean, is there any way, is there anything about this rulemaking or the nature of the underlying statute that that can be distinguishable from our waiver cases like Delaware, South Coast and Southern Pacific? [00:05:13] Speaker 01: Yes, your honor. [00:05:13] Speaker 01: I think one of the things that comes out in the Delaware case is that was under the Clean Air Act's limited judicial review provision. [00:05:19] Speaker 01: And as I understand that particular provision, it explicitly is that you have to raise it in the proceeding. [00:05:27] Speaker 01: Some of the more generalized APA cases, as this is, [00:05:31] Speaker 01: suggests that if the issue is raised before the agency and it is addressed by the agency, then it can be raised on appeal by any party. [00:05:40] Speaker 01: And that is exactly what we have done here. [00:05:43] Speaker 01: And the other thing with the Delaware Natural Resources case is that, apologies, I lost my train of thought. [00:05:51] Speaker 01: is that in addition to being a Clean Air Act case, one of the things that the court says in that is, well, we're going to look at sort of the whole of the comment. [00:06:01] Speaker 01: And is it inconsistent? [00:06:02] Speaker 01: Now, if you were completely for the rule before, it would be inconsistent to come here and challenge the rule after the fact. [00:06:07] Speaker 01: But I think the clear thrust of my client's comment to the agency is that they did not support the rule at all beyond the registration statement, which mind you, as we say, both in the comment and elsewhere, they already had in place a voluntary registration process, a notification process to allow consumers to know if there are sort of subsequent concerns about the product. [00:06:27] Speaker 01: So it's not really that much of a surprise that they would say, Hey, we have no problem with this one aspect that you're going to make us do something that we're already doing. [00:06:34] Speaker 01: Um, but I do think that if you look at the overall comment on balance, it is clearly opposed to the rule. [00:06:40] Speaker 04: And I believe that the, uh, your, your clients said that J four 27. [00:06:47] Speaker 04: We support CPSC's proposed amendment to add infant loungers to the list of durable infant products that must comply with the product registration requirements in 16 CFR Section 1130. [00:07:06] Speaker 04: Did I say that correctly? [00:07:08] Speaker 01: Yes, Your Honor. [00:07:10] Speaker 04: So why isn't that forfeiture or waiver? [00:07:17] Speaker 01: Again, Your Honor, what the Delaware Department of Natural Resources says is we look at the comment on balance. [00:07:22] Speaker 01: And again, on balance, there are other statements in the comment that suggest that our client believed that these weren't durable infant or toddler products. [00:07:33] Speaker 01: For example, as I mentioned, J428, when our client talks about that there is a failure to provide risk benefit analysis, risk hazard analysis, and consumer choice analysis. [00:07:42] Speaker 01: Those are all requirements that would have come into play under Section 2058. [00:07:46] Speaker 01: And so on balance, there were concerns that what the commission was doing here wasn't in conformity with the statute and the regulatory requirements themselves. [00:07:56] Speaker 03: I was just asking if the comment says the proposed amendment is to add infant loungers to the list of durable infant products. [00:08:02] Speaker 03: Let's just stop there, because it did say that. [00:08:07] Speaker 03: Is that consistent with saying that as a statutory matter, it's not a durable infant product? [00:08:14] Speaker 03: How can it be added to the list of durable infant products if it doesn't fit within the statute's allowance for regulating durable infant products? [00:08:24] Speaker 01: I think it needs to be read in context with added for purposes of registration. [00:08:29] Speaker 01: And again, I believe it's the next line after that. [00:08:32] Speaker 01: Our client goes on to say that they already have a voluntary registration process in. [00:08:36] Speaker 01: So I think one way to look at that is they're saying, we're not concerned about this particular aspect. [00:08:42] Speaker 01: particular requirement of what you're putting onto us, so we're not going to comment on that because we already have this. [00:08:47] Speaker 01: Now, when we look at the 180-day comments, this is later in it, one of the things that they raise is the problem here is these products are not durable infant goods under 104, and the 180-day effective date is not sufficient. [00:09:01] Speaker 01: And so I do think that there's at least internal inconsistency within the comment itself and consistent with this court's prior determinations. [00:09:09] Speaker 01: It may hear this case because, again, it goes to core statutory power. [00:09:14] Speaker 02: Ms. [00:09:14] Speaker 02: Valenz, even if you are able to get past the waiver and forfeiture point, what is your best statutory argument that this isn't a durable infant or toddler product? [00:09:27] Speaker 02: Because to me, I mean, from what I understand about what this product is, is it sounds a lot like the other items in the list of items that are included as durable and fit products. [00:09:39] Speaker 01: I would actually distinguish it from those 12 in the product list. [00:09:42] Speaker 01: If you look at those items, what we're typically seeing are broader categories, furniture, products that are predominantly made with wood, metal, plastic. [00:09:51] Speaker 01: And we're looking at the overall durability and longevity of a product. [00:09:55] Speaker 01: Because again, the definition as we posit it is that durable infant and toddler products are consumer goods that last a long time without significant deterioration. [00:10:04] Speaker 01: These are textile products. [00:10:07] Speaker 02: So as an infant carrier, so as a crib mattress, you know, so are parts of many baby and toddler swings, bassinets. [00:10:20] Speaker 01: I think that there's a critical distinction in that these are fully comprised of textiles, as opposed to having component parts that may or may not have textiles. [00:10:27] Speaker 01: But a critical distinction with the sling carriers, for example, is that when those were adopted as a part of the durable infant goods standard, the commission looked at the 12 product lists and said, this is like those, because infant carrier is explicitly stated in the statute. [00:10:44] Speaker 01: and sling carriers are infant carriers. [00:10:47] Speaker 01: That was the analysis of the CPSC adopted. [00:10:49] Speaker 01: What they have done here is that they have looked at their regulations for sling carriers and crib mattresses and called those soft, durable goods, which is atextual, [00:11:01] Speaker 01: And by the way, as we outline our papers, soft, durable goods, soft, durables, semi-durables are non-durable goods. [00:11:08] Speaker 01: Your Honor, I see my time has expired. [00:11:11] Speaker 01: May I finish my response? [00:11:14] Speaker 01: And so our point in regards to that is that there's a tacit understanding with the agency itself by calling these items soft, durable goods and not comparing them to the statutory category list, that these are not durable goods themselves. [00:11:27] Speaker 01: We believe that we respectfully request that this court vacate the rule. [00:11:32] Speaker 03: Thank you. [00:11:32] Speaker 03: Council will give you a little time for rebuttal as you requested. [00:11:39] Speaker 03: Mr. Shi? [00:11:40] Speaker 05: May it please the court? [00:11:41] Speaker 05: Mike Shi for the government. [00:11:43] Speaker 05: The statutory question in this case is straightforward, as petitioners comment before the agency illustrates. [00:11:49] Speaker 05: The key question is whether an infant support cushion is a durable infant or toddler product. [00:11:56] Speaker 05: And there's no dispute that the ordinary meaning of durable is able to exist for a long time without significant deterioration in quality or value. [00:12:04] Speaker 05: The commission clearly explained why infant support cushions are durable under that standard. [00:12:10] Speaker 05: They're not disposable. [00:12:11] Speaker 05: They have a useful life of several years. [00:12:14] Speaker 05: They're often used by many children in a row, and they're resold and widely available on the secondary marketplace. [00:12:20] Speaker 05: And so the commission's decision to regulate infant support cushions as durable infant or toddler products under the Act was reasonable. [00:12:28] Speaker 04: Are you forfeiting your forfeiture argument? [00:12:30] Speaker 05: No, Your Honor. [00:12:31] Speaker 05: We think that, as I noted at the very beginning of my presentation, if you look at the part of the comment that Your Honor quoted, Heroes Tech made very clear that they thought that infant support cushions were durable infant or toddler products when they said that they could be subjected lawfully to the product registration requirements. [00:12:53] Speaker 05: And that position is incompatible with the position that Heroes Tech is taking out now. [00:12:59] Speaker 05: The thrust of Heroes Tech's comments before the agency was a dispute over what the mandatory safety standard ought to say. [00:13:09] Speaker 05: That is a separate question from whether the commission has any authority to issue a mandatory safety standard at all. [00:13:17] Speaker 05: And the law governing when the commission can issue a mandatory safety standard under the Danny Keyser Act is the same as the law governing when product can be subjected to the mandatory product registration requirements under the Danny Keyser Act. [00:13:31] Speaker 05: everything just ties into whether you are a durable infant or toddler product. [00:13:35] Speaker 05: And here, having taken that position, it would be odd to allow Heroes Tech to take the diametrically opposite position with respect to the agency's statutory authority. [00:13:45] Speaker 04: Your friend on the other side says that subsequent language in their comment made clear that they believe that there was a separate regulatory path [00:13:58] Speaker 04: that the commission should follow outside of the durable infant and toddler product path. [00:14:07] Speaker 04: What's your response to that argument? [00:14:09] Speaker 05: It's honestly quite confusing to me, Your Honor. [00:14:12] Speaker 05: As the commission understood that argument, it pertains to an argument that this court rejected in the Finbin case about Section 104, as I think my friend on the other side recognized during her presentation. [00:14:23] Speaker 05: But that kind of oblique challenge to the commission's authority doesn't step back from just the fundamental language that we've been discussing at the very first page of their comment, which makes very clear that they are, at least before the commission, they were fine with the idea that infant support cushions could be durable infant or toddler products. [00:14:46] Speaker 05: In fact, they said, we support the proposed amendment to add infant support cushions to the list of durable infant or toddler products. [00:14:53] Speaker 04: Your friend on the other side says that VAPI made this objection, and so there's no fair notice problem to the Commission, because at least someone, even if we were to conclude that HERO's technology didn't make this statutory objection, someone did, and so there's really no prejudice to the Commission for us to hear this challenge. [00:15:19] Speaker 04: You all noticed [00:15:21] Speaker 05: That's true as far as it goes, Your Honor, but the cases discussing waiver before agencies have distinguished that situation from a different situation. [00:15:31] Speaker 05: And if you don't mind, let me try to set forth the two sort of strands here. [00:15:36] Speaker 05: There is a strand of case law saying that there is an exception to the party forfeiture rule under ordinary admin law principles if some party before the agency, not this specific commenter has raised the issue, [00:15:49] Speaker 05: And so in a circumstance where somebody in a comment has said a thing, but the particular petitioner did not and just didn't say anything at all about it, this court has said, well, that's fine. [00:16:01] Speaker 05: The agency was on notice. [00:16:02] Speaker 05: We will address that on the merits. [00:16:04] Speaker 05: That's distinct from what occurred here. [00:16:06] Speaker 05: And the cases talking about waiver distinguish between the situation here and that situation I just described, where [00:16:14] Speaker 05: One party did in fact raise the question of statutory authority, that was the Boppy company, and you can see the commission's discussion of that at page 621 of the Joint Appendix. [00:16:25] Speaker 05: Here, Heroes Tech not only addressed that question, but took the opposite question, took the opposite position from Boppy because there's no way to reconcile a recognition that infant support cushions are durable infant or toddler products on the one hand, [00:16:39] Speaker 05: with an idea that there's no regulatory authority under the Danny Keyser Act over infant support cushions at all. [00:16:46] Speaker 05: And in that circumstance, notwithstanding the fact that a different commenter did, in fact, raise the issue, the court has looked to basic principles of fairness. [00:16:55] Speaker 05: It almost sounds a little bit like estoppel the way the court has discussed it to say that it just wouldn't make sense to allow. [00:17:02] Speaker 02: One of the other cases [00:17:07] Speaker 02: you know, that are cited for this waiver principle, they involve statutory schemes that have mandatory issue exhaustion. [00:17:15] Speaker 02: And we don't have that in this statute. [00:17:18] Speaker 02: And I wonder if that's a basis for distinguishing the waiver or forfeiture question here. [00:17:23] Speaker 02: It's a purely legal question as to the agency's statutory authority. [00:17:28] Speaker 05: It's true that there's no specific party presentation requirement in this statute, Your Honor. [00:17:33] Speaker 05: It's not clear why that would make a difference given the reasoning of the court's decision, which turned on just basic principles of, you know, fairness to the agency in the sense that a party that has prevailed on a particular legal dispute, namely, is there or is there not statutory authority? [00:17:49] Speaker 02: You know, the prevailing party question is interesting, too, because here I don't think [00:17:53] Speaker 02: the government is not contesting whether Heroes is actually aggrieved or harmed by this regulation. [00:18:01] Speaker 02: We are not. [00:18:02] Speaker 02: Whereas, you know, I don't think that was the same in those other cases. [00:18:07] Speaker 05: That's true, Your Honor. [00:18:08] Speaker 05: Like, this case is different from those cases. [00:18:09] Speaker 02: I think that is one way of distinguishing it as well. [00:18:12] Speaker 05: It is different from those cases in the sense that, you know, heroes tech still is aggrieved by the substance of the mandatory safety standard. [00:18:21] Speaker 05: And in those cases, at least you didn't have that divide. [00:18:25] Speaker 05: And it's true as far as it goes that those cases therefore didn't have the opportunity to address a situation like this. [00:18:31] Speaker 05: It's not clear to me, though, why the analysis ought to be different, even if [00:18:35] Speaker 05: you know, like Heroes Tech concededly, you know, did challenge a little bit of this rule, why they shouldn't nevertheless be held to the view of the statute that they articulated before the agency when that question was in dispute. [00:18:49] Speaker 05: We're not here saying, for example, that Heroes Tech can't bring their arbitrary capricious challenges to the, you know, the content of the mandatory safety standard. [00:18:58] Speaker 05: And I'm happy to address those on the merits, if Your Honor would like. [00:19:01] Speaker 05: But [00:19:01] Speaker 05: But with respect to the key statutory question, which is whether there is authority to regulate infant support cushions under the act, it's really hard to look at the comment that Heroes Tech submitted before the agency and come to any conclusion other than they thought the agency did have that authority. [00:19:18] Speaker 05: And now that the agency has exercised that authority in a manner that they don't like, they have switched their position before this court. [00:19:26] Speaker 03: I take it the government doesn't take the position that we are bound in a steel company sense or something like that to do waiver forfeiture first no matter what. [00:19:35] Speaker 03: I mean in theory we could say [00:19:37] Speaker 03: It's a close waiver question. [00:19:39] Speaker 03: There's cross currents. [00:19:40] Speaker 03: But because we want to get to the merits, we can just choose to do that anyway. [00:19:46] Speaker 05: We haven't raised the argument that waiver is a threshold question along those lines. [00:19:50] Speaker 05: And the way this court has talked about waiver doesn't make it sound like a threshold question along those lines. [00:19:55] Speaker 05: But all we are pointing out is that the stretch for a question here is quite straightforward. [00:20:02] Speaker 05: And you don't just need to take our word for it. [00:20:04] Speaker 05: You can also take theirs. [00:20:07] Speaker 04: Does the forfeiture analysis, waiver analysis, has it changed because of the demise of Chevron? [00:20:17] Speaker 04: Because part of the rationale for it previously was, well, you need to give the agency an opportunity to respond and interpret the statute. [00:20:28] Speaker 04: And that interpretation might get some deference. [00:20:32] Speaker 04: But in the Loper-Brighton role, it doesn't, I mean, we don't ignore what the agency says, but it doesn't get the same type of deference. [00:20:42] Speaker 04: So does that weaken the reasoning for finding forfeiture here? [00:20:49] Speaker 05: It doesn't seem like it would, Your Honor, because those cases discussing waiver don't discuss waiver in the sense of we think the agency will then weigh in and then the court will then look to what the agency says and then give tremendous deference to what the agency says. [00:21:05] Speaker 05: The cases, as I said earlier, sound a lot more like, you know, they're invoking General Estoppel principles of, you know, fairness and party presentation. [00:21:13] Speaker 05: And those principles were not at issue in Loper-Brite and clearly survived Loper-Brite. [00:21:18] Speaker 05: So it's not clear that Loper-Brite had any impact on, you know, this court's waiver doctrine. [00:21:23] Speaker 04: Thank you. [00:21:26] Speaker 03: Thank you, counsel. [00:21:27] Speaker 03: Thank you, your honor. [00:21:31] Speaker 03: Mr. Rollins, we'll give you the one minute that you asked for for rebuttal. [00:21:34] Speaker 01: Thank you, Your Honor. [00:21:35] Speaker 01: And I'd like to start with the last question regarding the demise of Chevron. [00:21:38] Speaker 01: This is an interesting regulation, where it was proposed before Chevron was ended and finalized after. [00:21:44] Speaker 01: So I do think there's an aspect of futility, is that I think that, and the CBC has already argued, we have a reasonable interpretation of the statute. [00:21:53] Speaker 01: If we were standing here on different ground, it wouldn't be a surprise, I think, to anyone in this room that Chevron would have been invoked. [00:21:59] Speaker 01: And so in that regard, I do think that the demise of Chevron plays some role in the statutory interpretation waiver question. [00:22:04] Speaker 01: One thing that did not come up, and I was remiss not to mention it earlier, is that we raised this exact statutory interpretation question to CPSC in an administrative stay request of the rule. [00:22:17] Speaker 01: They said nothing. [00:22:18] Speaker 01: They simply denied the request. [00:22:20] Speaker 01: So it was raised to the commission prior to being raised to this court. [00:22:24] Speaker 01: And I think that that's a critical factor. [00:22:27] Speaker 02: But after the rulemaking and after the rulemaking after it was promulgated. [00:22:32] Speaker 01: Yes, your honor. [00:22:33] Speaker 01: But it was raised to this court. [00:22:35] Speaker 01: And there are some cases that we set in our paper that say, if there is some opportunity for the agency to respond, then there is no waiver. [00:22:43] Speaker 01: And there was a substantive response, coupled with the fact that Boppy did raise this during the rule. [00:22:48] Speaker 01: I see my time has expired. [00:22:51] Speaker 03: Thank you. [00:22:52] Speaker 03: Thank you, counsel. [00:22:52] Speaker 03: Thank you to both counsel. [00:22:53] Speaker 03: Thank you. [00:22:53] Speaker 03: We'll take this case under submission.