Court Opinion

ID: 4663923
Source: CourtListenerOpinion
Date Created: 2021-03-02 01:00:21.941635+00
Date Added: 2024-06-11T08:02:32.342249
License: Public Domain

Case: 17-60836    Document: 00515761330    Page: 1   Date Filed: 03/01/2021

          IN THE UNITED STATES COURT OF APPEALS
                   FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                     Fifth Circuit

                                                                         FILED
                                                                      March 1, 2021
                                   No. 17-60836
                                                                      Lyle W. Cayce
                                                                           Clerk
TEXAS ASSOCIATION OF MANUFACTURERS; TEXAS CHEMICAL
COUNCIL; TEXAS ASSOCIATION OF BUSINESS; NATIONAL
ASSOCIATION OF MANUFACTURERS; AMERICAN CHEMISTRY
COUNCIL,

              Petitioners

v.

UNITED STATES CONSUMER PRODUCT SAFETY COMMISSION,

              Respondent

                      On Petition for Review of an Order of the
                       Consumer Product Safety Commission

Before OWEN, Chief Judge, and SOUTHWICK and HIGGINSON, Circuit
Judges.

PRISCILLA R. OWEN, Chief Judge:
        Pursuant to the Consumer Product Safety Improvement Act (CPSIA),
the Consumer Product Safety Commission was tasked with studying the
effects of phthalates in children’s toys and child care articles. The Commission
issued a final rule prohibiting the manufacture and sale of any children’s toy
or child care article that contains concentrations of more than 0.1 percent of
any one of five phthalates. Petitioners seek direct review in this court, arguing
   Case: 17-60836      Document: 00515761330         Page: 2     Date Filed: 03/01/2021

                                      No. 17-60836
that the Commission failed to give an adequate opportunity for comment,
failed to apply the proper procedural standards, redefined the substantive
standards, and arbitrarily and capriciously applied the scientific data. The
Commission moves to dismiss or transfer the case for lack of jurisdiction. We
hold that we have jurisdiction to review the rule and that the Commission
procedurally erred in promulgating the final rule. In other respects, we affirm,
and we remand to the Commission.
                                             I
       In 1972, Congress enacted the Consumer Product Safety Act (CPSA) 1 in
order to “protect the public against unreasonable risks of injury associated
with consumer products.” 2         The CPSA established the Consumer Product
Safety     Commission, 3     which    “promulgate[s]       consumer      product    safety
standards” 4 and declares when a product is a “banned hazardous product.” 5
       In 2008, Congress enacted the Consumer Product Safety Improvement
Act (CPSIA), 6 which, among other things, directed the Commission to
promulgate rules banning or regulating the use of phthalates in children’s toys
and child care articles. 7 Phthalates are “a class of organic compounds used
primarily” to soften and add flexibility to plastic. 8 Some phthalates have
antiandrogenic effects—that is, they affect the male reproductive system and
can suppress the production of testosterone and normal development. 9

       1 Consumer Product Safety Act, Pub. L. No. 92-573, 86 Stat. 1207 (codified as amended
at 15 U.S.C. §§ 2051-2089).
       2 15 U.S.C. § 2051(b).
       3 15 U.S.C. § 2053.
       4 15 U.S.C. § 2056.
       5 15 U.S.C. § 2057.
       6 Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, 122 Stat.

3016 (codified as amended in scattered sections of 15 U.S.C. §§ 2051-2089).
       7 See, e.g., 15 U.S.C. §§ 2056a, 2056b, 2057c.
       8 Prohibition of Children’s Toys and Child Care Articles Containing Specified

Phthalates, 79 Fed. Reg. 78,324, 78,324 (December 30, 2014) (“Proposed Rule”).
       9 Proposed Rule at 78,324; 78,326.

                                             2
  Case: 17-60836       Document: 00515761330   Page: 3   Date Filed: 03/01/2021

                                  No. 17-60836
      Congress addressed phthalates in three relevant ways. First, the CPSIA
made it unlawful to “manufacture for sale, offer for sale, distribute in
commerce, or import into the United States any children’s toy or child care
article that contains concentrations of more than 0.1 percent” of three
phthalates: di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), and
benzyl butyl phthalate (BBP). 10     Second, the CPSIA included an interim
prohibition on “any children’s toy that can be placed in a child’s mouth or child
care article that contains concentrations of more than 0.1 percent” of three
other phthalates: diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or
di-n-octyl phthalate (DnOP). 11 Third, the CPSIA directed the Commission to
promulgate a final rule regarding phthalates. 12 By its terms, the interim
prohibition remained in place until the Commission promulgated a final rule. 13
      To aid the rulemaking process, Congress directed the Commission to
appoint a Chronic Hazard Advisory Panel (CHAP) to “study the effects on
children’s health of all phthalates and phthalate alternatives as used in
children’s toys and child care articles.” 14     The CHAP was charged with
examining “the full range of phthalates that are used in products for
children” 15 and then preparing a report for the Commission with its findings
and recommendations. 16 After receiving the CHAP’s report, the Commission
was directed to:
             (A) determine, based on such report, whether to continue in
      effect [the interim prohibition], in order to ensure a reasonable
      certainty of no harm to children, pregnant women, or other
      susceptible individuals with an adequate margin of safety; and

      10 15 U.S.C. § 2057c(a).
      11 Id. § 2057c(b)(1).
      12 Id. § 2057c(b)(3).
      13 Id. § 2057c(b)(1).
      14 Id. § 2057c(b)(2)(A).
      15 Id. § 2057c(b)(2)(B).
      16 Id. § 2057c(b)(2)(C).

                                        3
   Case: 17-60836       Document: 00515761330         Page: 4     Date Filed: 03/01/2021

                                       No. 17-60836
             (B) evaluate the findings and recommendations of the
       [CHAP] and declare any children’s product containing any
       phthalates to be a banned hazardous product under section 8 of
       the [CPSA], as the Commission determines necessary to protect
       the health of children. 17
       Pursuant to the CPSIA, the Commission appointed a CHAP, 18 which
assessed the risks of phthalates in combination and in isolation. 19 For its
cumulative risk assessment, the CHAP employed a hazard index (HI). 20 To
determine the HI, the CHAP first calculated the hazard quotient (HQ) for each
phthalate by dividing the actual exposure to a particular phthalate by an
estimate of the level of exposure that would generally be acceptable. 21 An HQ
greater than one might cause “concern for antiandrogenic effects in the exposed
population due to the effect of an individual phthalate.” 22 Then, the CHAP
combined the HQs of the individual phthalates to determine the cumulative
HI. 23 The effects of active phthalates are additive in that doses of different
phthalates can combine to produce effects. 24 Accordingly, if an individual’s
cumulative HI is greater than one, “there may be concern for antiandrogenic
effects.” 25
       To determine the level of exposure that is acceptable or “negligible,” the
CHAP relied on three case studies examining the effects of phthalates in
rodents. 26 Next, the CHAP divided the no-effect level in rodents by ten to

       17  Id. § 2057c(b)(3).
       18  Proposed Rule at 78,325.
        19 Prohibition of Children’s Toys and Child Care Articles Containing Specified

Phthalates, 82 Fed. Reg. 49,938, 49,957 (Oct. 27, 2017) (codified at 16 C.F.R. § 1307) (“Final
Rule”).
        20 Proposed Rule at 78,327.
        21 Id. at 78,328.
        22 Id.
        23 Id.
        24 Id. at 78,326.
        25 Final Rule at 49,957.
        26 Proposed Rule at 78,326; see Final Rule at 49,951.

                                              4
  Case: 17-60836      Document: 00515761330    Page: 5   Date Filed: 03/01/2021

                                    No. 17-60836
extrapolate from rodents to humans. 27 Due to the differences in how members
of the same species may react to a chemical, the CHAP divided that number
by ten again. 28 As a result, the CHAP used a no-effect level for humans that
was 100 times lower than that for rodents.
      The CHAP used data from three surveys to determine how much
exposure humans actually have to phthalates, two involving human-
biomonitoring (HBM) and one involving exposure scenario analysis. 29 First,
the CHAP used the Department of Heath and Human Services’ National
Health and Nutrition Examination Survey (NHANES). 30 The NHANES is an
HBM survey that measures phthalates and other chemicals in human urine
and blood based on spot sampling of pregnant women. 31 For the second study,
the CHAP used the Study for Future Families (SFF), an HBM study of mother-
child pairs before and after birth by the National Institutes for Health and the
Environmental Protection Agency. 32 Finally, the CHAP relied on a scenario-
based method to provide information on sources of exposure. 33
      The Commission responded to general comments about its use of HBM
data collected via spot sampling, concluding that it could extrapolate average
daily exposure based on the spot sampling data. 34       More specifically, the
Commission maintained that the spot samples were collected at different sites,
at different times of day, and on different days of the week, and participants
were selected randomly, and therefore, the data is representative of “estimated

      27 Final Rule at 49,952.
      28 Id.
      29 Proposed Rule at 78,327.
      30 Id.
      31 Id.
      32 Id.
      33 Id.
      34 Final Rule at 49,955.

                                         5
   Case: 17-60836      Document: 00515761330        Page: 6    Date Filed: 03/01/2021

                                     No. 17-60836
population per capita phthalate exposure across the 2-year NHANES cycle.” 35
Spot tests cannot differentiate between sources of phthalates, and most studies
conclude that “food, rather than children’s toys or child care articles, provides
the primary source of exposure.” 36         Moreover, phthalates are metabolized
quickly and the amount of phthalates detected “depends to a large extent
on . . . how long it has been since the last meal.” 37 Applying the NHANES and
SFF data, the CHAP determined that “up to 10 percent of pregnant women
and up to 5 percent of infants” had an HI greater than one. 38
      The CHAP recommended that the Commission lift the interim
prohibition on two phthalates—DIDP and DnOP. 39 Those phthalates did not
contribute to the HI. 40         However, the CHAP recommended that the
Commission (1) issue a permanent prohibition for DINP at levels greater than
0.1 percent in all children’s toys and child care articles, not just toys that can
be placed in a child’s mouth; 41 and (2) issue a permanent prohibition on
children’s toys and child care articles containing diisobutyl phthalate (DIBP),
di-n-pentyl    phthalate     (DPENP),      di-n-hexyl    phthalate     (DHEXP),      and
dicyclohexyl phthalate (DCHP) at levels greater than 0.1 percent. 42 DIBP,
DPENP, DHEXP, and DCHP were not prohibited by the CPSIA, but the CHAP

      35  Id.
      36  Proposed Rule at 78,327.
       37 Minutes of Commission Meeting Re: Final Phthalates Rules, Index No. 462 (Oct.

18,    2017)     (Statement    of  Comm’r    A.    Buerkle),    https://www.cpsc.gov/s3fs-
public/ACHBuerklesPhthalatesfinalrulestatement10302017.pdf?1N0bigFnYyn_CGtgCEGQ
ZJrjTnsjv3RO; see also CHAP at 75, https://www.cpsc.gov/s3fs-public/CHAP-REPORT-With-
Appendices.pdf.
       38 Proposed Rule at 78,328.
       39 Id. at 78,329-30.
       40 See id.
       41 Id. at 78,329.
       42 Id. at 78,330.

                                            6
   Case: 17-60836       Document: 00515761330         Page: 7     Date Filed: 03/01/2021

                                       No. 17-60836
concluded that “they contribute to the cumulative risk” and should be
prohibited permanently. 43
       The Commission issued a proposed rule (Proposed Rule) that
implemented the CHAP’s recommendations. 44 In explaining its rationale for
the Proposed Rule, the Commission agreed with the CHAP that “the acceptable
risk is exceeded when the HI is greater than one.” 45                    Accordingly, the
Commission decided that an HI less than one “is necessary ‘to ensure a
reasonable certainty of no harm to children, pregnant women, or other
susceptible individuals with an adequate margin of safety.’” 46 The Commission
found it particularly pertinent that the HI was greater than one for ten percent
of pregnant women, and the HI at the 95th percentile was five. 47
       After publication of the Proposed Rule, the NHANES released updated
data sets. 48 Using the new data, the Commission had its staff “replicate the
CHAP’s methodology.” 49 However, unlike the CHAP, which studied pregnant
women, the staff “used women of reproductive age” (WORA) due to a lack of
data on pregnant women. 50 The staff found that the risk decreased with the
updated data. 51 The HI at the 95th percentile was now less than one. 52 The
staff estimated that, using the updated data, between 98.8 and 99.6 percent of
WORA had HIs less than or equal to one. 53 The staff was “unable to estimate

       43 Id. It also appears that DPENP, DHEXP, and DCHP were not included in the HI
metric. Id. at 78,328 (Table 1 “summarized” the CHAP’s findings and did not include those
phthalates.).
       44 Id. at 78,343.
       45 Id. at 78,334.
       46 Id.
       47 See, e.g., id. at 78,328, 78,332-33.
       48 Final Rule at 49,939.
       49 Id.
       50 Id.
       51 Id. at 49,958.
       52 Id.
       53 Id.; see also id. at 49,963 (“CPSC staff determined that approximately 99 percent of

WORA in the U.S. population now have an HI less than or equal to one.”).
                                              7
  Case: 17-60836        Document: 00515761330         Page: 8   Date Filed: 03/01/2021

                                     No. 17-60836
the percentage of WORA with an HI greater than one,” 54 but noted that
“between two and nine real women from the sample of 538 WORAs had an HI
greater than one.” 55
      The Commission concluded that “phthalate exposures and risks in
WORA probably underestimate the risks to infants and children” because
“infants’ exposures generally are two- to threefold greater than adults.” 56 The
Commission also noted that exposure to DINP increased “approximately five-
fold” since the CHAP’s report, despite the decrease in exposure to phthalates
on the whole. 57 Based on the new data, the Commission, by a 3-2 vote,58
promulgated a final rule (Final Rule) substantively identical to the Proposed
Rule. 59 The Final Rule prohibits “the manufacture for sale, offer for sale,
distribution in commerce, or importation into the United States of any
children’s toy or child care article that contains concentrations of more than
0.1 percent of [DINP], [DIBP], [DPENP], [DHEXP], and [DCHP].” 60                         To
summarize, the Final Rule (1) makes the CPSIA’s interim prohibition on DINP
permanent, (2) extends the scope of the CPSIA’s interim prohibition on DINP
to “any children’s toy or child care article,” and (3) prohibits four phthalates
not prohibited by the CPSIA: DIBP, DPENP, DHEXP, and DCHP. 61
      Petitioners, trade associations representing chemical manufacturers,
now seek direct review in this court. Natural Resources Defense Council, Inc.,
Environmental Justice Health Alliance for Chemical Policy Reform, and

      54 Id. at 49,958.
      55 Id. at 49,961.
      56 Id. at 49,958.
      57 Id. at 49,963.
      58 Id. at 49,938 n.1.
      59 Id. at 49,982.
      60 Id.
      61 Compare id., with 15 U.S.C. § 2057c(b)(1).

                                             8
   Case: 17-60836       Document: 00515761330          Page: 9     Date Filed: 03/01/2021

                                       No. 17-60836
Breast Cancer Prevention Partners (Intervenors) intervened in support of the
Final Rule.
                                              II
       As a threshold matter, we address two challenges to our jurisdiction.
Intervenors assert that the Petitioners lack standing to pursue these claims.
The Commission also moved to dismiss this action, arguing that we lack
jurisdiction because the Final Rule is not a “consumer product safety rule,” and
we therefore lack statutory authorization for direct review.
                                              A
       Petitioners bear the burden of showing they have standing for each type
of relief sought. 62 To establish standing to seek injunctive relief, the plaintiff
must show
       (1) it has suffered an “injury in fact” that is (a) concrete and
       particularized and (b) actual or imminent, not conjectural or
       hypothetical; (2) the injury is fairly traceable to the challenged
       action of the defendant; and (3) it is likely, as opposed to merely
       speculative, that the injury will be redressed by a favorable
       decision. 63
Petitioners are five trade associations that seek to establish standing using a
theory of associational standing. Associations may assert the standing of their
own members. 64 “An association has standing to bring a suit on behalf of its
members when its members would otherwise have standing to sue in their own
right, the interests at stake are germane to the organization’s purpose, and
neither the claim asserted nor the relief requested requires the participation
of individual members in the lawsuit.” 65 The only issue in this case is whether

       62 Summers v. Earth Island Institute, 555 U.S. 488, 493 (2009).
       63 Friends of the Earth, Inc. v. Laidlaw Envt’l Servs. (TOC), Inc., 528 U.S. 167, 180-81
(2000) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).
       64 Summers, 555 U.S. at 494.
       65 Friends of the Earth, 528 U.S. at 181.

                                              9
  Case: 17-60836        Document: 00515761330          Page: 10     Date Filed: 03/01/2021

                                       No. 17-60836
any member of the Petitioner associations has standing to bring the claim in
its own right.
       According to Intervenors, Petitioners have not established that “at least
one identified member ha[s] suffered or would suffer harm” from the Final
Rule. In response, Petitioners attached to their Reply Brief an additional
affidavit by Christopher Wallace, an employee of ExxonMobil Chemical
Company (EMCC). EMCC is a member of Texas Chemical Council (TCC), one
of the Petitioners.         Even without the additional affidavit, the record
demonstrates that EMCC is a producer of DINP. It is less clear, however,
whether EMCC manufactures DINP for the use in products that will become
children’s toys or child care articles. The record does not contain any indication
that EMCC’s products are used or have been used in children’s toys or child
care articles. The injury need not be actualized; a threatened injury suffices if
it is “real, immediate, and direct.” 66            A high risk of economic injury is
sufficiently real, immediate, and direct. 67             The Supreme Court routinely
recognizes probable economic injury resulting from governmental actions that
alter competitive conditions. 68 While the issue is a close one, we are satisfied
that the threat of reduced sales to companies that manufacture children’s toys
and child care articles is sufficiently concrete that EMCC, and by proxy TCC,
has standing to challenge the Final Rule as it relates to DINP.
       Petitioners further argue that they have standing because of the
“stigma” inflicted by the Final Rule. According to one affidavit, in response to
pressure from groups citing the Commission’s rulemaking process, major
flooring retailers announced they would no longer carry flooring tile that

       66 Davis v. Federal Election Com’n, 554 U.S. 724, 734 (citing Los Angeles v. Lyons, 461
U.S. 95 (1983).
       67 Pac. Gas & Elec. Co. v. FERC, 106 F.3d 1190, 1195 (5th Cir. 1997).
       68 Clinton v. City of New York, 524 U.S. 417, 433 (1998) (quoting 3 K. Davis & R. Pierce,

Administrative Law Treatise 13-14 (3d ed. 1994)).
                                              10
  Case: 17-60836         Document: 00515761330         Page: 11    Date Filed: 03/01/2021

                                        No. 17-60836
contains phthalates. EMCC experienced losses in its flooring market revenue
that it attributes to the Final Rule. Petitioners argue that we should apply the
same standards as the D.C. Circuit when assessing whether these facts
support standing. 69 In Tozzi, the Department of Health and Human Services
published a revised list of substances known or reasonably anticipated to cause
cancer and upgraded the chemical “dioxin” from “reasonably anticipated” to
“known.” 70 The petitioner, a manufacturer of medical devices that emit dioxin
when incinerated, sued to vacate the rule. 71 The D.C. Circuit held that the
petitioner had standing because the agency’s action was a “substantial factor”
in the decisions of purchasers to reduce or end purchases of PVC plastics
contained in the petitioner’s devices. 72 Further, the court noted that “[w]hen
the government attaches an inherently pejorative and damaging term such as
‘carcinogen’ to a product, the probability of economic harm increases
exponentially.” 73
          According to Petitioners, CPSC’s decision to prohibit certain phthalates
from children’s toys and child care articles is likewise a “substantial factor” in
causing EMCC’s economic injury. We agree. EMCC’s evidence of lost sales
sufficiently demonstrates an injury in fact traceable to the Final Rule.
Accordingly, TCC has demonstrated that it has standing to challenge the Final
Rule as it relates to DINP. Even though the other petitioners have not named
members that manufacture the prohibited phthalates, the presence of one
petitioner with standing is sufficient for Article III purposes. 74

          69 See Tozzi v. United States Dep’t of Health and Human Servs., 271 F.3d 301 (2001).
          70 Id. at 303.
          71 Id. at 306-08.
          72 Id. at 309.
          73 Id.
          74 Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47, 52 n.2

(2006).
                                               11
  Case: 17-60836        Document: 00515761330          Page: 12      Date Filed: 03/01/2021

                                        No. 17-60836
       However, standing is not dispensed in gross; plaintiffs must demonstrate
standing “for each claim [t]he[y] seek[] to press” and “for each form of relief
that is sought.” 75 Defining a “claim” in this context is somewhat elusive. 76 For
example, the Supreme Court in Blum v. Yaretsky held that plaintiffs had
standing to challenge one aspect of the Medicaid Act but not others. 77 In Blum,
nursing home patients brought suit after the state of New York determined
that they no longer needed the care they were receiving and should be
transferred to a lower level of care. 78 The Court agreed that the patients had
standing to challenge the decision to transfer them to a lower level of care but
held that they could not challenge the procedures for transferring patients to
higher levels of care because “[n]othing in the record . . . suggest[ed] that any
of the individual respondents [had] been” transferred to higher care, and
“assessing the possibility now would ‘tak[e] [the Court] into the area of
speculation and conjecture.’” 79
       On the other hand, in Davis v. Federal Election Commission, a candidate
had standing to challenge both the asymmetrical contribution limitations
under § 319(a) of the Bipartisan Campaign Reform Act of 2002 80 and the
disclosure requirements under § 319(b) when the record indicated that the
limits likely would have applied to the candidate. 81 Section 319 created rules

       75   Davis v. Federal Election Comm’n, 554 U.S. 724, 734 (2008) (internal quotation
marks omitted) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)).
        76 See 13B CHARLES ALAN WRIGHT & ARTHUR R. MILLER,                    FED. PRACTICE &
PROC.§ 3531.16 Scope Of Standing, (3d ed.) (“It is easy enough to agree that a challenge to a
state tax abatement is a claim separate from a challenge to a municipal tax abatement.
Equally easy distinctions will be drawn in other cases. But still other cases will present
difficult line-drawing challenges.”).
        77 457 U.S. 991 (1982).
        78 Id. at 995.
        79 Id. at 1001 (third alteration in original) (quoting O’Shea v. Littleton, 414 U.S. 488,

497 (1974)).
        80 116 Stat. 109 (codified at 52 U.S.C. § 30117).
        81 Davis, 554 U.S. at 733-35.

                                              12
  Case: 17-60836     Document: 00515761330         Page: 13     Date Filed: 03/01/2021

                                    No. 17-60836
that applied to self-funding candidates contributing more than $350,000 of
their own funds to the campaign. 82 The candidate intended to contribute more
than $350,000 and made the disclosures required by subsection (b), giving him
standing to challenge that provision. 83        The Federal Election Commission
argued that the candidate did not have standing to challenge the asymmetrical
contribution limits because they did not apply at the outset of the suit or at
any point in time during the race at issue. 84 The Court held that there was a
sufficient probability that the asymmetrical contribution limits would apply,
and accordingly the candidate could challenge both provisions. 85
      The Ninth Circuit has held that an Americans with Disabilities Act
plaintiff who was impeded by obstacles at one store could challenge all the
obstacles to his mobility at that store, even the ones he was not aware of at the
time he brought the suit. 86 That decision relied partially on the Supreme
Court’s instructions that courts take a “broad view of constitutional standing
in civil rights cases,” but the decision focused on whether the plaintiff had a
sufficient personal stake “as to assure that concrete adverseness which
sharpens the presentation of issues” upon which the court must rule. 87
      In an analogous case, the D.C. Circuit held that plaintiffs had standing
to challenge every aspect of a Bureau of Land Management (BLM) decision
that aggrieved them. 88 In WildEarth Guardians, an environmental group
challenged the BLM’s decision to issue a lease to mine federal lands in
Wyoming, arguing that the mine would injure their aesthetic and recreational

      82 52 U.S.C. § 30117(a)(1).
      83 Davis, 554 U.S. at 733.
      84 Id. at 734.
      85 Id. at 734-35.
      86 Doran v. 7-Eleven, Inc., 524 F.3d 1034, 1041-44 (9th Cir. 2008).
      87 Id. at 1043 (citations omitted).
      88 WildEarth Guardians v. Jewell, 738 F.3d 298, 309 (D.C. Cir. 2013)

                                           13
  Case: 17-60836           Document: 00515761330   Page: 14   Date Filed: 03/01/2021

                                      No. 17-60836
interests. 89      Plaintiffs claimed a procedural injury, alleging that the
Environmental Impact Statement (EIS) was deficient in its consideration of
local pollution and global greenhouse gas emissions. 90 The district court and
the D.C. Circuit agreed that plaintiffs had standing to challenge the EIS with
respect to local pollution because “the local pollution that causes their
members’ aesthetic and recreational injuries follows inexorably from the
decision to authorise leasing” on the tract. 91 The district court held that the
organization did not have standing to challenge the global greenhouse
emissions because those emissions did not affect the aesthetic and recreational
interests; the circuit court disagreed. 92 According to the D.C. Circuit, the
plaintiffs could challenge any alleged deficiencies in the EIS because their
injuries were “caused by the allegedly unlawful [lease] and would be redressed
by vacatur of the [lease] on the basis of any of the procedural defects identified
in the [EIS]. 93
       Applying these principles, EMCC has standing to bring its challenge to
the Final Rule.       The possibility of reduced sales of DINP along with the
stigmatic effect of the rule provides standing to pursue its claim.            Those
injuries were caused by an allegedly unlawful rule and would be redressed by
vacatur of the rule on the basis of any of the grounds raised. Further, the claim
that CPSC violated various procedural requirements, if successful, would
require us to grant relief that would apply to the entirety of the Final Rule, as
the portions of the Final Rule pertaining to each individual phthalate are the
result of the same administrative decision-making process.

       89 Id. at 302.
       90 Id. at 305-06.
       91 Id. at 306.
       92 Id. at 306-07.
       93 Id. at 308.

                                           14
  Case: 17-60836          Document: 00515761330         Page: 15      Date Filed: 03/01/2021

                                         No. 17-60836
                                                B
       Federal courts of appeals are courts “of limited subject matter
jurisdiction . . . authorized to review decisions and orders of administrative
agencies only as provided by acts of Congress.” 94 Section 2060(a) of the CPSA
provides that “[n]ot later than 60 days after a consumer product safety rule is
promulgated by the Commission,” a person may file a petition for “judicial
review of such rule” in the court of appeals. 95 The parties contest whether the
Final Rule is a “consumer product safety rule” subject to the § 2060(a)’s
procedure for judicial review.
       Section 2052(a)(6) of the CPSA defines a “consumer product safety rule”
as “a consumer products safety standard described in section 2056(a) of this
title, or a rule under this chapter declaring a consumer product a banned
hazardous product.” 96 In its phthalate provisions, the CPSIA provides that
“any rule promulgated under [§ 2057c](b)(3) shall be considered consumer
product safety standards under the [CPSA].” 97                       The Final Rule was
promulgated under § 2057c(b)(3), 98 so, pursuant to the CPSIA, it is a consumer
product safety standard under the CPSA. 99 As a consumer product safety
standard, the Final Rule is a consumer product safety rule as defined in
§ 2052(a)(6). The Final Rule is consequently subject to the procedures for
judicial review established by § 2060(a). 100 We have jurisdiction to review the
Final Rule.

       94   Xavier Univ. v. Nat’l Telecomms., 658 F.2d 306, 307 (5th Cir. Unit A 1981) (citations
omitted).
       95 15 U.S.C. § 2060(a).
       96 15 U.S.C. § 2052(a)(6).
       97 15 U.S.C. § 2057c(f).
       98 Final Rule at 49,940.
       99 See 15 U.S.C. § 2057c(f).
       100 15 U.S.C. § 2060(a).

                                                15
  Case: 17-60836       Document: 00515761330        Page: 16     Date Filed: 03/01/2021

                                      No. 17-60836
       Each of the Commission’s arguments to the contrary is unavailing. First,
the Commission argues that the Final Rule is not a consumer product safety
standard described in section 2056(a). That argument ignores that the Final
Rule is statutorily defined to be a consumer product safety rule. The
Commission’s other main argument is that Congress only intended phthalate
rules to be consumer product safety rules for purposes of preemption. The
subsection of the CPSIA at issue is titled “Treatment as consumer product
safety standards; effect on State laws.” 101          The subsection’s first sentence
provides that “any rule[s] promulgated under subsection (b)(3),” including the
Final Rule, “shall be considered consumer product safety standards.” 102 The
second sentence states that “[n]othing in this section or the [CPSA] shall be
construed to preempt or otherwise affect any State requirement with respect
to any phthalate alternative not specifically regulated in a consumer product
safety standard under the [CPSA].” 103 Congress clearly contemplated that it
was both defining phthalate rules as consumer product safety standards and
expressing the scope of preemption.              The Commission’s argument to the
contrary is without merit. Further, the Commission considers the Final Rule
to be a consumer product safety standard for purposes of testing and
certification requirements under the CPSA. 104 The Commission cannot have
its cake and prevent our review by relying on the same provision. The Final
Rule is defined by Congress as a consumer product safety standard, and we
have jurisdiction to review it.

       101  15 U.S.C. § 2057c(f).
       102  Id.
        103 Id.
        104 See 82 Fed Reg 49,767, 49,768 (“The Commission’s phthalates rule is considered a

‘consumer product safety standard.’ 15 U.S.C. 2063c(f).”) The Commission cited to 2063c(f)
for this proposition but that statute does not exist. Presumably, the Commission meant to
cite to § 2057c(f), which defines the phthalate rule as a consumer product safety standard.
                                            16
  Case: 17-60836      Document: 00515761330       Page: 17    Date Filed: 03/01/2021

                                    No. 17-60836
                                          III
       Petitioners ask the court to set aside the Final Rule because, in their
view, the Commission failed to give an adequate opportunity to comment on
the rulemaking, failed to apply the proper procedural standards, redefined the
substantive standards, and arbitrarily and capriciously applied the scientific
data. We address each in turn and hold that the Commission procedurally
erred by not providing an adequate opportunity to comment on the rule and by
failing to consider the costs of a portion of the rule.
                                           A
       Petitioners argue that the Commission did not provide an adequate
opportunity to comment on its use of data at the 99th percentile to justify its
prohibition.    The APA requires agencies to publish a notice of proposed
rulemaking that includes “either the terms or substance of the proposed rule
or a description of the subjects and issues involved.” 105 Final rules under APA
notice-and-comment rulemaking must be the “logical outgrowth” of the
proposed rule. 106 The objective is fair notice. 107 “If interested parties ‘should
have anticipated’ that the change was possible, and thus reasonably should
have filed their comments on the subject during the notice-and-comment
period, then the rule is deemed to constitute a logical outgrowth of the proposed
rule.” 108
       Petitioners do not object to a substantive change in the text of the
Proposed Rule and the Final Rule, but to the change in the justification for the

       105 5 U.S.C. § 553(b)(3).
       106 Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007) (citations
omitted); see also ConocoPhilips Co. v. EPA, 612 F.3d 822, 834 (5th Cir. 2010) (citation
omitted).
       107 Long Island, 551 U.S. at 174.
       108 American Coke & Coal Chemicals Inst. v. EPA, 452 F.3d 930, 938-39 (D.C. Cir.

2006) (citing City of Waukesha v. EPA, 320 F.3d 228, 245 (D.C. Cir. 2003)).
                                          17
  Case: 17-60836     Document: 00515761330         Page: 18    Date Filed: 03/01/2021

                                    No. 17-60836
Proposed Rule and the justification for the Final Rule. The Commission’s
primary justification for the Proposed Rule was data demonstrating that ten
percent of pregnant women had an HI greater than one, which exceeded the
acceptable risk, and that the average HI was five at the 95th percentile. 109
However, when the Commission examined the updated data released after the
publication of the Proposed Rule, it found that the risk of antiandrogenic
effects had decreased, and that the HI at the 95th percentile had decreased
from five to less than one. 110 The Commission could not determine exactly
what percentage of the women studied had an HI greater than one, 111 but did
state that “between two and nine real women from the sample of 538 WORAs
had an HI greater than one.” 112 The Commission relied on this new data when
promulgating the Final Rule. 113
      According to Petitioners, the Commission did not provide fair notice
when it changed its justification for the prohibition from data showing that the
average HI was greater than one in the 95th percentile to data including
individual spot samples with HIs greater than one. 114                  We agree.   The
Commission’s justification for the Proposed Rule was based on data showing
that a statistically stable percentage of the women studied had an HI that
indicated an unacceptably high risk of antiandrogenic effects. After new data
became available, the Commission replicated the CHAP’s methodology and
determined that there were too few samples with an HI above one to estimate
the number of women and children in the general population who are

      109 Proposed Rule at 78,328, 78,334.
      110 Final Rule at 49,958.
      111 Id.
      112 Id. at 49,961.
      113 Id.
      114 Compare Proposed Rule at 78,328, with Final Rule at 49,961.

                                          18
  Case: 17-60836      Document: 00515761330         Page: 19     Date Filed: 03/01/2021

                                     No. 17-60836
negatively affected by the phthalates at issue. 115 Because the Commission
could no longer justify the rule based on the ten percent of women who had
risky exposures, it justified the Final Rule because between two and nine
individual samples had HIs deemed unacceptable.
      The Commission provided some notice that it was relying on new data
and asked for comments. 116 One commenter objected to the use of spot checks
at the 99th percentile, and the Commission responded to that comment. 117 The
Commission argues that the public was therefore aware that it was
“considering the matter,” and the Commission provided sufficient notice under
the APA. 118 We disagree. The agency’s rationale for the rule must be made
clear and subjected to public comment. 119              In the notices to which the
Commission refers, statements about statistically unstable data dominate, and
any reference to spot samples is not clearly communicated as a new
justification to support the rule and supplant the unstable statistical
analysis. 120 Thus, while the Commission did provide some opportunity for
comment on its reliance on spot samples, it did not make clear it was inviting
comments on the use of spot samples as a new justification for why the Final
Rule is necessary to protect the health of children.                 The fact that one
commenter suggested that data above the 95th percentile is too unstable for
rulemaking does not relieve the Commission of its burden to provide notice and

      115 See 80 Fed. Reg. 35,938 (June 23, 2015); 82 Fed. Reg. 11,348 (Feb. 22, 2017).
      116 See 80 Fed. Reg. 35,938; 82 Fed. Reg. 11,348.
      117 Final Rule at 49,961.
      118 See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 175 (2007).
      119 See Corrosion Proof Fittings v. EPA, 947 F.2d 1201, 1212 (5th Cir. 1991).
      120 See 80 Fed. Reg. 35,938; 82 Fed. Reg. 11,348.

                                            19
  Case: 17-60836       Document: 00515761330          Page: 20     Date Filed: 03/01/2021

                                       No. 17-60836
an opportunity to comment on the clearly articulated justification for its use of
such data. 121
       Because it was justified with reference to individual spot samples rather
than an estimable percentage of the population that had potentially harmful
exposure to the phthalates in question, the Final Rule is not a logical
outgrowth of the Proposed Rule. As one of the commissioners pointed out, that
change in methodology—whether right or wrong—was not reasonably
foreseeable based on the Proposed Rule. 122              Accordingly, the Commission
violated the APA’s notice-and-comment procedures by not adequately allowing
for comment after it changed its primary justification for the rule but before
adopting a final rule.
                                             B
       Petitioners argue that the Final Rule declares five phthalates to be
“banned hazardous products” under § 2057c and consequently should have
complied with § 2057’s requirements for such a ban.                    This argument is
premised on § 2057c(b)(3)(B), which empowers the Commission to “declare any
children’s product containing any phthalates to be a banned hazardous product
under Section 8 of the Consumer Product Safety Act (15 U.S.C. 2057).” 123 We
review the Commission’s actions under the familiar framework of Chevron
U.S.A. Inc. v. National Resources Defense Council, Inc. 124

       121 See Fertilizer Inst. V. EPA, 935 F.2d 1303, 1312 (D.C. Cir. 1991) (“The fact that
some commenters actually submitted comments suggesting the creation of administrative
exemptions is of little significance.”).
       122 Minutes of Commission Meeting Re: Final Phthalates Rules, Index No. 462, at 23

(Oct. 18, 2017) (Statement of Comm’r J. Mohorovic).
       123 15 U.S.C. § 2057c(b)(3)(B).
       124 Chevron U.S.A. Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837 (1984); Michigan

v. E.P.A., 135 S.Ct. 2699, 2707 (“Chevron directs courts to accept an agency’s reasonable
resolution of an ambiguity in a statute that the agency administers.”).
                                             20
  Case: 17-60836       Document: 00515761330    Page: 21   Date Filed: 03/01/2021

                                     No. 17-60836
      The Commission may ban a consumer product under § 2057 when it
finds that the product presents an unreasonable risk of injury and “no feasible
consumer product safety standard under this chapter would adequately protect
the public from the unreasonable risk of injury associated with such
product.” 125 Section 2057 in turn requires the Commission to comply with
§ 2058 when declaring products “banned hazardous products.” 126                The
Commission indisputably did not comply with § 2058, which requires, among
other things, findings as to: (1) “the degree and nature of the risk of injury,”
(2) the approximate number of products subject to the rule, and (3) “any means
of achieving the objective of the order while minimizing adverse effects on
competition.” 127
      The Commission argues that it was not required to comply with § 2058
because it was authorized to promulgate the Final Rule by the CPSIA, which
contains its own detailed requirements for rulemaking in § 2057c(b)(3).
Section 2057c(b)(3) directs that “the Commission shall, pursuant to section 553
of Title 5, promulgate a final rule.” 128 Section 553 of Title 5 sets forth the
general notice-and-comment rulemaking process under Administrative
Procedures Act (APA). 129 In addition, § 2057c(b)(3)(B) directs the Commission
to “evaluate the findings and recommendations of the [CHAP]” and ban
products containing phthalates “as the Commission determines necessary to
protect the health of children.” 130 According to the Commission, the specific

      125 15 U.S.C. § 2057.
      126 Id.
      127 15 U.S.C. § 2058.
      128 15 U.S.C. § 2057c(b)(3).
      129 See 5 U.S.C. § 553.
      130 15 U.S.C. § 2057c(b)(3).

                                         21
  Case: 17-60836       Document: 00515761330          Page: 22     Date Filed: 03/01/2021

                                       No. 17-60836
controls over the general, 131 and the specific requirements contained in
§ 2057c(b)(3) are incompatible with the requirements imposed by § 2058.
Further, the Commission argues that if there is ambiguity, its interpretation
is entitled to Chevron deference.
       The Commission’s reading of § 2057c is correct. Rather than direct the
Commission to follow its general rulemaking procedures, § 2057c(b)(3)
authorizes rulemaking under the APA’s notice-and-comment procedures. The
standard for promulgating rules is also different—whereas § 2058 requires the
Commission to find that a product poses “an unreasonable risk of injury” before
promulgating a rule, 132 § 2057c(b)(3)(B) requires the Commission to
promulgate a phthalate rule on a finding that the rule is “necessary to protect
the health of children.” 133 Further, § 2057c(b)(3)(A) empowers the Commission
to promulgate a rule continuing Congress’s interim prohibition “to ensure a
reasonable certainty of no harm to children, pregnant women, or other
susceptible individuals with an adequate margin of safety.” 134 While there
may be substantial overlap in the standards imposed by § 2057c(b)(3) and §
2058, Congress phrased the standards differently, indicating that Congress
intended the standards in § 2057c(b)(3) to apply instead of the standards laid
out in § 2058. The Commission did not procedurally err in promulgating the
Final Rule pursuant to § 2057c(b)(3).
                                             C
       Alternatively, Petitioners argue that the Commission ignored statutory
standards for rulemaking and instead promulgated rules to provide “absolute

       131 See United States v. Marshall, 798 F.3d 296, 318 (5th Cir. 2015) (“[I]t is familiar
law that a specific statute controls over a general one.”) (internal quotation marks omitted)
(quoting Bulova Watch. Co. v. United States, 365 U.S. 753, 758 (1961)).
       132 15 U.S.C. § 2058.
       133 15 U.S.C. § 2057c(b)(3)(B).
       134 Id. § 2057c(b)(3)(A).

                                             22
  Case: 17-60836        Document: 00515761330          Page: 23     Date Filed: 03/01/2021

                                       No. 17-60836
certainty of no risk.” Subsection (A) empowers the Commission to continue the
interim prohibition on DINP “to ensure a reasonable certainty of no harm to
children, pregnant women, or other susceptible individuals with an adequate
margin of safety.” 135 Subsection (B) of § 2057c(b)(3) empowers the Commission
to ban children’s products containing phthalates as “necessary to protect the
health of children.” 136 According to Petitioners, the Commission misread these
two separate standards together as a mandate to “demand an absolute
certainty of no risk.”
       In its description of the rationale behind the Final Rule, the Commission
cited the standards in § 2057c(b)(3)(A) and (B). 137 In promulgating the specific
prohibitions, it referred to the standards applicable to its decision on each
phthalate. The Commission continued the prohibition on DINP because the
prohibition is “still necessary to ‘ensure a reasonable certainty of no harm’ to
children and pregnant women with an ‘adequate margin of safety.’” 138 The
Commission also extended the prohibition to all “children’s toy and child care
articles,” not just those “that can be placed in a child’s mouth,” because it found
that such a rule was necessary both “to ensure a reasonable certainty of no
harm and to protect the health of children.”                139   When the Commission
determined that it was not necessary to continue the interim prohibition on
DNOP and DIDP, it properly employed the “reasonable certainty of no harm”
standard. 140 Finally, the Commission referred to the “necessary to protect the

       135 Id.
       136 Id. § 2057c(b)(3)(B).
       137 Final Rule at 49,938; 49,957 (“to meet the CPSIA’s criteria of reasonable certainty

of no harm and protection of the health of children, it is necessary to prohibit children’s toys
and child care articles containing concentrations of more than 0.1 percent of . . . DINP, DIBP,
DPENP, DHEXP, and DCHP”).
       138 Id. at 49,966.
       139 Compare id. at 49,966-67, with 15 U.S.C. § 2057c(b)(1).
       140 Final Rule at 49,968.

                                              23
  Case: 17-60836       Document: 00515761330          Page: 24     Date Filed: 03/01/2021

                                       No. 17-60836
health of children” standard when it finalized its ban on DIBP, DPENP,
DHEXP, and DCHP. 141
                                              1
       Petitioners contend that the Commission exceeded its mandate to protect
against “harm” and instead issued a Final Rule that protected against “risk.”
Risk is “the chance of injury, damage, or loss.” 142 Harm, on the other hand, is
actual “[i]njury, loss, damage[,] [or] material or tangible detriment.”143
According to Petitioners, the Commission overprotected consumers by
prohibiting products with phthalates based on evidence of risk, not harm.
       We disagree.       Adopting the standard used in the CHAP report, the
Commission interpreted the phrase “necessary to protect the health of
children” to require “an HI less than or equal to one.” 144 The Proposed Rule
explained:
       If the HI is greater than one, there may be a concern for
       antiandrogenic effects in the exposed population due to the
       cumulative effects of phthalates. . . . Having a HI greater than
       one does not necessarily mean that adverse effects will occur;
       however, this possibility cannot be ruled out. 145
Accordingly, the Commission determined that preventing exposure to an HI
greater than one was necessary to ensure that adverse effects—i.e., harm—
will not occur. The HI method itself is not controversial, though Petitioners
argue that the Commission was overly conservative in setting the benchmark.
       Petitioners also argue that Congress required only “reasonable
certainty,” not “absolute certainty.”          In Petitioners’ view, the Commission

         Id. at 49,969-70.
       141

         Risk, BLACK’S LAW DICTIONARY (10th Ed. 2014); see Risk, MERRIAM-WEBSTER
       142

COLLEGIATE DICTIONARY (11th Ed. 2009) (defining “risk” as “the possibility of loss or injury”).
     143 Harm, BLACK’S LAW DICTIONARY (10th ed. 2014).
     144 Final Rule at 49,968.
     145 Proposed Rule at 78,328 & n.8.

                                              24
  Case: 17-60836      Document: 00515761330         Page: 25   Date Filed: 03/01/2021

                                     No. 17-60836
exceeded this mandate when it (a) considered risks at or above the 99th
percentile of spot samples, and (b) did not consider costs of the regulation to
determine whether the regulation could prevent harm “with reasonable
certainty.”
      Both parties agree that statistical data above the 99th percentile is not
stable, i.e., is not reliable. 146 Petitioners argue that the Commission initially
relied on scientifically valid 95th-percentile data and then moved the goalposts
when there was not significant risk at that level. 147              The Commission
responded to this argument in its Final Rule, asserting that the instability at
the 99th percentile “mean[s] that [the Commission is] precluded from
estimating the precise number of WORA with HIs greater than one in the
larger population from which the sample was selected.” 148               Instead, the
Commission urges that the rule is “not based on any particular percentile, but
on the observation that actual women from the NHANES sample have HIs
greater than one.” 149
      In the abstract, protecting the 99th percentile from harm is not per se
unreasonable and may be required by subsection (A). The Commission is
required to continue the interim prohibition on DINP to “ensure a reasonable
certainty of no harm . . . with an adequate margin of safety.” 150 The District of
Columbia Circuit recently examined the meaning of a comparable requirement
to provide an “ample margin of safety” in Sierra Club v. EPA. 151 The EPA had
been authorized to set a health threshold for acid gases that included an

      146 See Final Rule at 49,961.
      147 See Proposed Rule at 78,328, 78,332-33.
      148 Final Rule at 49,961.
      149 Id.
      150 15 U.S.C. § 2057c(b)(3)(A).
      151 895 F.3d 1, 12-13 (D.C. Cir. 2018).

                                           25
  Case: 17-60836       Document: 00515761330         Page: 26     Date Filed: 03/01/2021

                                      No. 17-60836
“ample margin of safety.” 152 The EPA employed a model based on conservative
assumptions, including worst-case weather and worst-case population
proximity, and set a standard that resulted in most of the country having a
hazard quotient of below one (the level at which there was a risk to human
health). 153 However, in the model, the EPA projected that some people would
be exposed to the regulated gases if both worst-case scenarios came to pass.154
The D.C. Circuit concluded that the EPA’s determination of how a margin of
safety could be built into the emission standard deserved deference, but struck
down the standard in question because it did not build in an any margin of
safety. 155
       Applying the logic of Sierra Club, the Commission was arguably required
to prohibit DINP if even a single person had an HI greater than one and the
prohibition would prevent exposure and therefore “provide an adequate
margin of safety.” 156 Petitioners analogize to cases interpreting the phrase
“unreasonable risk” to show that Congress intended the cost of the regulation
to be one factor in determining what is necessary to ensure a reasonable
certainty of no harm. 157          The Commission considered the meaning of
“reasonable certainty of no harm” in its Final Rule and rejected some
commenters’ suggestion that the phrase meant “reasonably necessary to
prevent or reduce an unreasonable risk of injury,” 158 ultimately concluding
that the phrase “calls for a highly protective standard, but not 100 percent

       152 Id.
       153 Id.
       154 Id. at 12.
       155 Id. at 13.
       156 Compare id. at 12-13, with 15 U.S.C. § 2057c(b)(3)(A).
       157 See Forester v. CPSC, 559 F.2d 774, 788-89 (D.C. Cir. 1977) (upholding regulations

where the cost was slight); Aqua Slide ‘N’ Dive Corp. v. CPSC, 569 F.2d 831, 844 (5th Cir.
1978) (requiring the commission to consider costs and benefits to determine whether there
was “reasonable necessity” for a standard).
       158 Final Rule at 49,944.

                                             26
  Case: 17-60836      Document: 00515761330         Page: 27    Date Filed: 03/01/2021

                                     No. 17-60836
certainty of no harm.” 159 Attempting to protect the 99th percentile from harm
did not exceed the Commission’s mandate to “ensure a reasonable certainty of
no harm.” 160
      However, the Commission ignored the first portion of the standard: it
must be “reasonably necessary.” We have required regulations to use a cost-
benefit analysis based on the word “reasonable.” 161 We interpreted the similar
phrase “reasonable necessity” to require the Commission to “take a hard look,
not only at the nature and severity of the risk, but also the potential the
standard has for reducing the severity or frequency of the injury, and the effect
the standard would have on the utility, costs or availability of the product.”162
The Supreme Court rejected EPA regulations authorized if the agency found
the regulation was “appropriate and necessary” because the EPA did not
consider costs to determine whether the regulations were “appropriate.” 163 The
Court rejected the EPA’s arguments that it need not consider costs because
Congress used that language only because of its uncertainty about whether the
regulation at issue would be needed. 164 The Court noted that “if uncertainty
about the need for regulation were the only reason [Congress delegated
authority to regulate], Congress would have required the Agency to decide only
whether the regulation remains ‘necessary.’” 165 Accordingly, the Commission
was required to at least consider the costs, as well as the effect on utility and
availability of products containing DINP to determine whether to continue the
interim prohibition to “ensure a reasonable certainty of no harm.” 166

      159 Id.
      160 Id. at 49,939.
      161 Aqua Slide, 569 F.2d at 844.
      162 Id.
      163 Michigan v. E.P.A., 135 S.Ct. 2699, 2708-10 (2015).
      164 Id. at 2710.
      165 Id.
      166 15 U.S.C. § 2057c(b)(3)(A).

                                            27
  Case: 17-60836      Document: 00515761330       Page: 28   Date Filed: 03/01/2021

                                      No. 17-60836
      The Commission expressly “did not prepare a regulatory analysis of the
costs and benefits of the rule.” 167 It did give some thought to the costs of testing
and responded to commenters about the costs of testing on small businesses. 168
That is not enough. Congress required the Commission to consider whether
the regulation is “reasonably necessary,” and the Commission failed to
undertake that analysis. Even under the deferential lens of Chevron, the
Commission cannot ignore Congress’s directive. Accordingly, the Commission
procedurally erred by failing to take a hard look at the costs and benefits of
continuing Congress’s interim prohibition.
                                             2
      However, a different standard applied to the Commission’s expansion of
the DINP prohibition and its prohibition on products containing DIBP,
DPENP, DHEXP, and DCHP. Congress required the Commission to “declare
any children’s product containing any phthalates to be a banned hazardous
product . . . as the Commission determines necessary to protect the health of
children.” 169 Congress did not add a “reasonable” qualifier to the Commission’s
authority under subsection (B), nor was it required to provide any margin of
safety. Accordingly, the Commission was entrusted with discretion to
promulgate rules with the singular purpose of “protect[ing] the health of
children.” 170
      Petitioners argue that the Commission only paid lip service to the
statutory standards but failed to apply the standard in its reasoning and
decision. Petitioners cite to Natural Resources Defense Council v. Pritzker as
an analogous case. 171 In that case, the Ninth Circuit invalidated a regulation

      167 Final Rule at 49,974.
      168 See id. at 49,967, 49,970.
      169 15 U.S.C. § 2057c(b)(3)(B).
      170 Id.
      171 828 F.3d 1125, 1135 (9th Cir. 2016)).

                                            28
  Case: 17-60836      Document: 00515761330         Page: 29     Date Filed: 03/01/2021

                                     No. 17-60836
by the National Marine Fisheries Service that it held did not satisfy the
enabling legislation’s “least practicable adverse impact standard.” 172              The
agency there stated that it had reviewed the proposed regulation and
determined that it would “effect the least practicable adverse impact on marine
mammals.” 173    The Ninth Circuit held that agency did “not meaningfully
discuss how the mitigation measures meet that ‘stringent standard.’” 174
      Unlike the agency in NRDC v. Pritzker, the Commission here engaged in
a thorough analysis of the health risks of phthalates. To start, the Commission
reviewed the multi-year findings of the CHAP and discussed them in depth. 175
It then assessed those findings and adopted the Proposed Rule to mirror the
recommendations of the CHAP. 176 The Final Rule justified the risks differently
by referring to actual women exposed to HIs greater than one, but did give
more than mere lip service to the statutory standards. 177 Accordingly, the
Commission did not change the standard set by Congress.
      Ultimately, the Commission applied the proper health standards to its
rulemaking. It applied the “reasonable certainty of no harm” standard to
continue its prohibition on DINP, and the “necessary to protect the health of
children” to expand its prohibition on DINP and prohibit DIBP, DPENP,
DHEXP, and DCHP. However, the Commission did not give an adequate
opportunity to comment when it changed its underlying rationale for the final
rule. It also erred by failing to consider the cost of continuing the interim
prohibition of DINP.

      172 NRDC, 828 F.3d at 1129.
      173 Id. at 1135 (quoting 77 Fed Reg. 50,290, 50,294).
      174 Id. (citation omitted).
      175 Proposed Rule at 78,326-34; Final Rule at 49,945-50.
      176 Proposed Rule at 78,339.
      177 Final Rule at 49,961.

                                           29
  Case: 17-60836       Document: 00515761330        Page: 30     Date Filed: 03/01/2021

                                      No. 17-60836
                                            IV
       Petitioners argue that the Commission’s Final Rule is arbitrary and
capricious. Petitioners specifically mention six decisions.                    First, the
Commission calibrated the HI according to the “most sensitive health effect,”
which Petitioners argue is not proven to be harmful. Second, the Commission
used data that Petitioners deem unreliable. Third, the Commission assumed
that humans are more sensitive to phthalates than rodents, which petitioners
contend was erroneous. Fourth, the use of spot samples overestimated the
actual exposure of individuals. Fifth, adding together the HIs of each
individual phthalate resulted in an overestimation of the risk.                     Sixth,
petitioners argue that the link between pre-natal exposure and antiandrogenic
effects means that it is unreasonable to ban children’s toys, which are certain
to be used post-natal.
       We are not free to second-guess the Commission’s determinations as to
statistical methods and scientific data. 178 In reviewing an agency decision,
“[o]ur task is to determine whether the agency examined the pertinent
evidence, considered the relevant factors, and articulated a ‘reasonable
explanation for how it reached its decision.’” 179            This standard is highly
deferential; we apply a presumption of validity and may not substitute our
judgment for that of the agency. 180 The Supreme Court has said that courts
should “uphold a decision of less than ideal clarity if the agency’s path may
reasonably be discerned.” 181 Having reviewed the record and the Final Rule,
we can discern the Commission’s path for each of the six decisions above. Its

       178 Sw. Elec. Power Co. v. E.P.A., 920 F.3d 999, 1019 (5th Cir. 2019).
       179 Assoc’d Builders and Contractors of Texas v. NLRB, 826 F.3d 215, 219-20 (5th Cir.
2016) (quoting Tex. Office of Pub. Util. Counsel v. FCC, 183 F.3d 393, 410 (5th Cir. 1999).
       180 Id. (citing FCC v. Fox Television. Stations, Inc., 556 U.S. 502, 513 (2009)).
       181 Fox Television, 556 U.S. at 513 (quoting Bowman Transp., Inc. v. Arkansas-Best

Freight System, Inc., 419 U.S. 281, 286 (1974)).
                                            30
  Case: 17-60836        Document: 00515761330          Page: 31      Date Filed: 03/01/2021

                                        No. 17-60836
explanations are not “so implausible that it could not be ascribed to a difference
in view or the product of agency expertise.” 182
                                               V
       Having found that the CPSC violated the APA by failing to allow proper
notice-and-comment for its new justification and failing to consider the costs of
continuing Congress’s interim prohibition on DINP, the only remaining
question is what remedy is appropriate. Petitioners urge vacatur. We are
required to “set aside agency action . . . found to be . . . arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with the law.”183
However, “[o]nly in ‘rare circumstances’ is remand for agency reconsideration
not the appropriate solution.” 184 Remand, not vacatur, is generally appropriate
when there is at least a serious possibility that the agency will be able to
substantiate its decision given an opportunity to do so. 185 In this case, there is
a serious possibility that the CSPC will be able to remedy its failures. 186 The
Commission must allow industry to comment and consider the new
justification for the Final Rule.            Further, it must consider the costs of
continuing Congress’s interim prohibition on DINP to determine whether the
rule is “reasonably necessary” to protect from harm.

                                       *        *       *

       Accordingly, we retain jurisdiction and REMAND to the Commission to
resolve the defects in its rule.

       182  Sw. Elec. Power Co., 920 F.3d at 1013 (quoting Motor Vehicle Mfrs. Ass’n of U.S.,
Inc. v. State Farm Mutu. Auto Ins. Co., 463 U.S. 29, 43 (1983)) (internal quotations omitted).
        183 5 U.S.C. § 706(2).
        184 O’Reilly v. U.S. Army Corps of Eng’rs, 477 F.3d 225, 238-39 (5th Cir. 2007) (citation

omitted).
        185 Central and South West Servs., Inc. v. EPA, 220 F.3d 683, 692 (5th Cir. 2000).
        186 Cf Allied-Signal, Inc. v. N.R.C., 988 F.2d 146, 150-51 (D.C. Cir. 1993) (explaining

that “[a]n inadequately supported rule . . . need not necessarily be vacated”).
                                              31