The Consumer Product Safety Commission’s persecution of a baby-products company illustrates the need for administrative reform.
The Consumer Product Safety Commission’s persecution of a baby-products company illustrates the need for administrative reform.
T he Consumer Product Safety Commission (CPSC), which made headlines earlier this year for its claims about the purported dangers of gas stoves, has the power to trap small-business owners in administrative proceedings for years before they get the chance to make an argument in federal court. The case of Leachco, an Oklahoma baby-products company with about 40 employees, illustrates the constitutional problems with the CPSC and other independent agencies like it.
Leachco produces the Podster, a pillow with sides that cup infants to keep them in place. Leachco has sold over 180,000 Podsters. Two babies died while using a Podster, but in both cases, the product was used improperly. In one case, a day-care worker broke state law and the center’s rules by leaving a baby unattended for an hour and a half. In the other case, two parents accidentally smothered their baby while co-sleeping.
The CPSC is using these incidents as pretext to take the Podster off the market. No consumer complained about the alleged unsafety of the Podster. The CPSC initiated the complaint with itself. Once the administrative proceedings against Leachco were in motion, sellers such as Amazon stopped carrying the Podster, and sales of the product have tanked.
Leachco has insisted on fighting the CPSC. Initially, it did so with private counsel, but when that became prohibitively expensive, it turned to the public-interest law firm Pacific Legal Foundation. As I wrote in January, PLF sees a bigger constitutional issue at play. It argues that the organizational structure of the CPSC is unconstitutional and that cases such as Leachco’s should be heard in federal courts.
The administrative trial for the Leachco case took place earlier this month at the CPSC’s offices. “One of the strange things about this is that the agency that is bringing the case against you also hosts the trial,” PLF attorney Oliver Dunford told National Review. “It would be like if a prosecutor had the trial in a U.S. attorney’s office.” The administrative-law judge (ALJ) is an employee of a different federal agency, and if the CPSC doesn’t like his decision, it can appeal it — to the CPSC.
So the CPSC initiated a complaint with itself, gets to hold a quasi-trial in its own offices to adjudicate its own complaint, and then if it doesn’t like the decision, it gets to make its own decision anyway. Only after that entire process is complete can businesses targeted by the agency take their case to federal court.
In addition to representing Leachco in the CPSC proceedings, PLF has also filed suit in federal court to challenge the CPSC’s structure on constitutional grounds. It has tried to get an injunction to stop the proceedings against Leachco while that case makes its way through the courts, but those efforts have so far been unsuccessful.
PLF argues that the agency’s structure is unconstitutional because commissioners are protected from removal by the president and ALJs are doubly protected. Article II says that executive power is vested in the president, and that ought to include the power to remove executive-branch officers. PLF also argues that the agency’s structure violates the Constitution’s separation of powers because executive, or Article II, officers are carrying out what ought to be judicial, or Article III, tasks.
In an op-ed, PLF attorney Adi Dynar explained that this problem goes beyond the CPSC. “Dozens of federal agencies employ in-house tribunals,” Dynar wrote. “If an agency brings the case in a real Article III court, they have to convince a jury of your peers that you have broken the law. When the agency chooses instead to bring the case in-house, they deny litigants the right to jury trial that the Seventh Amendment guarantees.”
“Also unlike real courts, these in-house tribunals don’t have to follow any set rules of procedure or evidence,” Dynar wrote. Not only do the rules that exist often favor the agency, the hearing officer can often change them on the fly.
“I just think they have no idea how much stress they cause by doing this,” said Dunford of the CPSC and its prosecution of Leachco. “Most of the time, companies will just agree to the commission’s demands, either in a voluntary recall or they will put new warnings on it, or something like that. But Leachco was convinced they didn’t do anything wrong and fought it.”
When conducting depositions for the proceedings against Leachco, it became clear that none of the CPSC employees had ever been deposed before, Dunford said. That helps illustrate how one-way these proceedings usually are.
The statute that empowers the CPSC is vague enough that the agency doesn’t even have to prove that any injuries occurred to consumers, only that there’s a potential risk. “They didn’t call any of the witnesses that witnessed the incidents firsthand,” said Dunford of the two incidents the CPSC cited as reasons to target Leachco. The agency relied on documentary evidence that would have been considered hearsay in a courtroom.
“The judge said, and he was right under the current law, that this is an administrative hearing, and he can consider hearsay if he thinks it’s necessary,” Dunford said. Some of that evidence included CPSC employees’ summaries of interviews, which Dunford described as “layers of hearsay.”
Despite those procedural shortcomings, Dunford said the case they put before the ALJ was strong and he believes they have a decent shot at succeeding. But he expects that even if the ALJ rules for Leachco, the CPSC will appeal to itself and rule against them. At that point, which would be about two and a half years after the proceedings began, Leachco would get its first chance before a federal judge.
While the Leachco case has been ongoing, the Supreme Court ruled in the case Axon Enterprise v. FTC. The petitioners in Axon made arguments similar to PLF’s about the constitutionality of agency structures. In a unanimous decision, Justice Elena Kagan wrote the Court’s opinion. It did not address the core constitutional question but said that parties may bring cases about the constitutionality of agency structures directly to federal court, bypassing the administrative processes.
That was a step in the right direction toward ending these administrative abuses. In a concurring opinion, Justice Clarence Thomas wrote of the larger constitutional issue: “I have grave doubts about the constitutional propriety of Congress vesting administrative agencies with primary authority to adjudicate core private rights with only deferential judicial review on the back end.” The Supreme Court should consider that question in a future case, he wrote.
If it does, it should put a stop to these sham trials. Americans shouldn’t have to suffer for years at the hands of an agency that thinks gas stoves and baby pillows are dangerous before they get the fair trial the Constitution guarantees for them.