Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-01058/USCOURTS-caDC-13-01058-0/pdf.json

Parties Involved:
Lilliputian Systems, Inc.
Petitioner
Pipeline and Hazardous Materials Safety Administration
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 12, 2013 Decided January 31, 2014

No. 13-1058

LILLIPUTIAN SYSTEMS, INC.,

PETITIONER

v.

PIPELINE AND HAZARDOUS MATERIALS SAFETY

ADMINISTRATION,

RESPONDENT

On Petition for Review of the Pipeline 

and Hazardous Materials Safety Administration

Stephen A. Vaden argued the cause for petitioner. With him

on the briefs was Gregory S. Walden.

Dana L. Kaersvang, Attorney, U.S. Department of Justice,

argued the cause for respondent. With her on the brief were

Stuart F. Delery, Assistant Attorney General, Michael Jay

Singer, Attorney, Paul M. Geier, Assistant General Counsel for

Litigation, U.S. Department of Transportation, Peter J. Plocki,

Deputy Assistant General Counsel for Litigation, and Joy K.

Park, Trial Attorney.

Before: ROGERS and KAVANAUGH, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

USCA Case #13-1058 Document #1477725 Filed: 01/31/2014 Page 1 of 9
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Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: Lilliputian Systems, Inc.

manufactures micro fuel cells powered by butane, a highly

flammable liquified gas. Micro fuel cells are a portable source

of electricity, intended as an alternative to batteries to meet

consumers’ increasing demand for the use of portable electronic

devices. Lilliputian challenges the prohibition in a final rule

against airline passengers and crew carrying butane fuel cell

cartridges in their checked baggage as arbitrary and capricious

in light of the dissimilar treatment of other products, such as

aerosols containing flammable gas, that are not subject to the

rigorous safety specifications imposed on fuel cell cartridges. 

For the following reasons we remand the rule.

I.

The Secretary of Transportation is required to “prescribe

regulations for the safe transportation, including security, of

hazardous material in intrastate, interstate, and foreign

commerce.” 49 U.S.C. § 5103(b)(1). The Secretary is to

“ensure that, to the extent practicable, [hazardous materials

transportation] regulations . . . are consistent with standards and

requirements related to transporting hazardous material that

international authorities adopt.” Id. § 5120(b). The Secretary,

however, is “not require[d] . . . to prescribe a standard or

requirement identical to a standard or requirement adopted by an

international authority if the Secretary decides the standard or

requirement is unnecessary or unsafe.” Id. § 5120(c)(1). 

Further, the Secretary may “prescrib[e] a safety standard or

requirement more stringent than a standard or requirement

adopted by an international authority if the Secretary decides the

standard or requirement is necessary in the public interest.” Id.

§ 5120(c)(2). The Pipeline and Hazardous Materials Safety

Administration is charged with carrying out the Secretary’s

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duties and powers related to hazardous materials transportation

and safety. Id. § 108(f).

In 2010, the Safety Administration published a proposed

rule to amend the hazardous materials regulations in light of

amendments to the 2011–2012 edition of the Technical

Instructions for the Safe Transport of Dangerous Goods by Air

adopted by the United Nations International Civil Aviation

Organization (“ICAO”). See Notice of Proposed Rulemaking,

Hazardous Materials: Harmonization with International

Standards, 75 Fed. Reg. 52,070, 52,070 (Aug. 24, 2010) (“2010

NPRM”). The ICAO amendments permit airline passengers and

crew to carry up to two spare fuel cell cartridges in checked

baggage, including fuel cell cartridges containing liquified

flammable gases such as butane. See Int’l Civil Aviation Org.,

Technical Instructions for the Safe Transport of Dangerous

Goods by Air pt. 8;1.1.2(t)(6), ICAO Doc. 9284-AN/905

(2011–2012 ed.). The Safety Administration, however,

proposed a rule under which airline passengers and crew could

put certain spare fuel cell cartridges in their checked baggage,

but not fuel cell cartridges containing Divisions 2.1 (flammable

gas) or 4.3 (water-reactive) materials, including butane. 2010

NPRM, 75 Fed. Reg. at 52,089–90. Acknowledging that the

proposed prohibition on Division 2.1 flammable-gas fuel cell

cartridges was inconsistent with the ICAO Technical

Instructions, the Safety Administration stated that it “strongly

believes that the restriction should also include spare cartridges

containing Division 2.1 materials.” Id. at 52,090.

In comments opposing the proposed prohibition on

flammable-gas fuel cell cartridges in checked baggage

Lilliputian argued, in part, that the Safety Administration had

neither explained why safety specifications imposed on

flammable-gas fuel cell cartridges were insufficient to render

them safe to carry in checked baggage nor compared the risk of

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flammable-gas fuel cell cartridges with that of other articles

permitted in checked baggage that contain flammable gas (e.g.,

toiletry aerosols). The prohibition remained part of the final

rule. See Hazardous Materials: Harmonization with

International Standards, 76 Fed. Reg. 3308, 3382 (Jan. 19, 2011)

(“2011 Final Rule”) (codified at 49 C.F.R. § 175.10(a)(19)(iii)). 

The Safety Administration stated that it adopted the prohibition

“[b]ecause Division 2.1 flammable gases are generally

prohibited in air transportation on a passenger-carrying aircraft

as cargo and due to the questionable integrity of such articles

when packed in a passenger’s checked baggage.” Id. at 3337.

Lilliputian filed an administrative appeal, see 49 C.F.R.

§§ 106.110–130, and in response the Safety Administration

solicited further public comment “for the limited purpose of

gathering information to help . . . determine whether or not to

allow fuel cell cartridges containing Division 2.1 flammable gas

to be carried aboard a passenger-carrying aircraft in checked

baggage.” Notice of Proposed Rulemaking, 77 Fed. Reg.

31,274, 31,277 (May 25, 2012). Upon consideration of the

received comments and other administrative appeals, the Safety

Administration amended the 2011 Final Rule in certain respects

but denied Lilliputian’s appeal. See Hazardous Materials:

Harmonization with International Standards, 78 Fed. Reg. 1101,

1101, 1104 (Jan. 7, 2013) (“2013 Final Rule and Denial”). The

Safety Administration gave five reasons for retaining the

prohibition: (1) “Many of the critical safety requirements of the

[hazardous materials regulations],” such as labeling and

notification requirements, “do not apply to passengers;”

(2) “Passengers are not trained to recognize potential hazards,”

and are therefore “unlikely to be aware of the safety implications

if certain commodities are subject to improper packaging or

handling;” (3) “[A]ircraft fire detection and suppression systems

do not prevent fires nor are they designed to completely

extinguish fires;” (4) The design of a product containing

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hazardous material “must be tested and demonstrate a certain

level [of] safety prior to being authorized onboard passengercarrying aircraft;” and (5) “[W]hen new passenger

authorizations are granted consideration must be given to the

cumulative risk of the new authorization combined with existing

authorizations.” Id. at 1104. Lilliputian petitions for review. 

See 49 U.S.C. § 5127.

II.

Lilliputian contends that the prohibition on flammable-gas

fuel cell cartridges in checked airline baggage is arbitrary and

capricious because the Safety Administration failed to provide

any explanation of its risk assessment methodology, thereby

“making it impossible . . . to counter the . . . unstated rationale.” 

Pet’r’s Br. 8. Further, Lilliputian contends, it failed to provide

a reasoned explanation for its prohibition, including failing to

explain why it declined to follow the presumption that federal

hazardous materials regulations be harmonized with

international standards, how and why it disagreed with the safety

analyses considered sufficient by international regulators, why

it disagreed with the test results of the Federal Aviation

Administration regarding fuel cell cartridge safety, and why it

prohibited butane fuel cell cartridges when it permits other, less

stringently tested items containing butane in checked baggage. 

The arbitrary and capricious standard in the Administrative

Procedure Act, 5 U.S.C. § 706(2)(A), “includes a requirement

that the agency . . . respond to ‘relevant’ and ‘significant’ public

comments,” Pub. Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C.

Cir. 1993) (quoting Home Box Office, Inc. v. FCC, 567 F.2d 9,

35 & n.58 (D.C. Cir. 1977)); see also Nat’l Ass’n of Home

Builders v. EPA, 682 F.3d 1032, 1042 (D.C. Cir. 2012). An

agency’s failure to respond to relevant and significant public

comments generally “demonstrates that the agency’s decision

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was not ‘based on a consideration of the relevant factors.’” 

Thompson v. Clark, 741 F.2d 401, 409 (D.C. Cir. 1984) (quoting

Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416

(1971)). 

Federal hazardous materials regulations require each fuel

cell and fuel cartridge carried on a passenger aircraft to conform

to safety specifications promulgated by the International

Electrotechnical Commission (“IEC”). See 49 C.F.R.

§§ 171.7(u), 175.10(a)(19)(vii). These specifications require

fuel cell cartridges to withstand several tests designed to ensure

durable and safe construction, including two drop tests (from

approximately four feet and six feet), a crush test (based on

approximately 220 lb.), a pressure test (based on approximately

14 lb./in2

 of pressure), and a temperature test (with temperatures

ranging from -40o F to 158o F). Federal regulations permit

passengers and crew to carry in their checked baggage

“medicinal and toilet articles for personal use” that contain

flammable gases (e.g., aerosols), see 49 C.F.R. § 175.10(a)(1)(i),

without any particular safety specifications other than having a

cap or “other suitable means to prevent inadvertent release,” id.

Lilliputian’s comments before the Safety Administration

repeatedly pointed to the IEC safety specifications imposed on

fuel cell cartridges, emphasizing that such specifications are

“extremely stringent,” and urging therefore that flammable-gas

fuel cell cartridges were safe to transport in checked airline

baggage. See Comments on Proposed Rule at 2 (Oct. 22, 2010);

Administrative Appeal at 3 (Feb. 18, 2011); Comments on

Proposed Rule at 2–3 (July 23, 2012). Its comments also

contrasted the Safety Administration’s allowance of medicinal

and toilet articles containing flammable gas in checked baggage,

even though such articles are not required to satisfy the IEC

safety specifications. See Comments on Proposed Rule at 4, 6

(Oct. 22, 2010); Administrative Appeal at 5 (Feb. 18, 2011);

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Comments on Proposed Rule at 4–5 (July 23, 2012). In

promulgating the 2011 Final Rule, the Safety Administration

stated that Division 2.1 flammable gases are generally

prohibited on passenger aircraft and questioned the integrity of

such articles in passenger checked baggage. See 76 Fed. Reg. at

3337. It elaborated in denying Lilliputian’s administrative

appeal, giving five reasons in support of the prohibition. See

2013 Final Rule and Denial, 78 Fed. Reg. at 1104. Although

Lilliputian agrees with the relevance of the substantive factors

considered by the Safety Administration, it maintains that the

conclusion in support of the prohibition is arbitrary and

capricious by failing to address the rigor of the IEC safety

specifications and the comparative laxness of safety

requirements for medicinal and toiletry articles containing the

same hazardous material.

As a general matter, an agency cannot treat similarly

situated entities differently unless it “support[s] th[e] disparate

treatment with a reasoned explanation and substantial evidence

in the record.” Burlington N. & Santa Fe Ry. Co. v. Surface

Transp. Bd., 403 F.3d 771, 777 (D.C. Cir. 2005). On the record

before the court, the medicinal and toilet articles containing

flammable gas that are allowed in checked baggage are similarly

situated to flammable-gas fuel cell cartridges. Both contain the

same Division 2.1 class of hazardous material; if permitted in

checked baggage both would be packed by passengers and

handled by airline baggage handlers; and when stowed in

passenger luggage neither would be subject to the labeling or

notification requirements for limited-quantity cargo, see 49

C.F.R. §§ 172.315(b), 173.230(g), 175.33. Yet flammable-gas

fuel cell cartridges are prohibited from airline checked baggage

while medicinal and toilet articles containing flammable gas are

not. Compare id. § 175.10(a)(1)(i), with id. § 175.10(a)(19)(iii).

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The only hint that the Safety Administration considered the

disparate treatment was its statement about “cumulative risk.” 

See 2013 Final Rule and Denial, 78 Fed. Reg. at 1104. The

entirety of that statement was: “Cumulative risk of additional

passenger authorizations. We believe that when new passenger

authorizations are granted consideration must be given to the

cumulative risk of the new authorization combined with existing

authorizations.” Id. The most that can be gleaned from this

opaque statement is that the Safety Administration “considered”

the “cumulative risk” of permitting flammable-gas fuel cell

cartridges in checked baggage alongside medicinal and toilet

articles containing flammable gas. It says nothing about how it

evaluated the cumulative risk or why its evaluation led to the

prohibition of one category of similarly situated articles and not

the other. More significantly, the “cumulative risk” statement

does not respond to Lilliputian’s comments pointing out, in view

of the IEC testing regime, that medicinal and toilet articles

containing flammable gas are less safe in airline luggage than

fuel cell cartridges containing flammable gas, implying that if

only one of the two kinds of products were to be permitted in

checked baggage due to concerns about “cumulative risk,” it

should be the latter. The Safety Administration acknowledged

in promulgating the 2011 Final Rule that “fuel cell cartridges

themselves are subject to much more stringent construction,

testing, and packaging requirements than for similar articles

(e.g., aerosols),” 76 Fed. Reg. at 3335, but nowhere adequately

addressed the safety implication of that acknowledgment.

Largely for the reasons Lilliputian suggests, we agree that

the Safety Administration has so far failed to provide the

required “reasoned explanation and substantial evidence” for

this disparate treatment. See Burlington Northern, 403 F.3d at

777. Because it is “plausible” that the Safety Administration

“can redress its failure of explanation on remand while reaching

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the same result,” Black Oak Energy, LLC v. FERC, 725 F.3d

230, 244 (D.C. Cir. 2013), and because the Safety 

Administration states without contradiction that vacatur of the

prohibition would “cause unnecessary disruption for third

parties who own or manufacture” other types of fuel cell

cartridges that are permitted in checked baggage, Resp’t’s Br.

22; see N. Air. Cargo v. U.S. Postal Serv., 674 F.3d 852, 860–61

(D.C. Cir. 2012), we remand the 2013 Final Rule for the Safety

Administration to provide further explanation for the prohibition

on airline passengers and crew carrying flammable-gas fuel cell

cartridges in their checked baggage, including its response to

Lilliputian’s comments.

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