Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 14, 2003 Decided April 11, 2003
No. 02-5032
THE RELIABLE AUTOMATIC SPRINKLER CO., INC.,
APPELLANT
v.
CONSUMER PRODUCT SAFETY COMMISSION,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 01cv00025)
Stephen P. Murphy argued the cause for appellant. With
him on the briefs was Edward J. McAndrew.
Christine N. Kohl, Attorney, United States Department of
Justice, argued the cause for appellee. With her on the brief
were Roscoe C. Howard, Jr., United States Attorney, and
Douglas N. Letter, Attorney.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Before: GINSBURG, Chief Judge, and EDWARDS and GARLAND,
Circuit Judges.
Opinion for the Court filed by Circuit Judge EDWARDS.
EDWARDS, Circuit Judge: This case arises from an investi-
gation by appellee Consumer Product Safety Commission
(‘‘CPSC’’ or ‘‘the Commission’’) of automatic sprinkler heads
manufactured by appellant Reliable Automatic Sprinkler
Company (‘‘Reliable’’). Commission compliance officials in-
formed Reliable that they intended to make a preliminary
determination that the sprinkler heads present a ‘‘substantial
product hazard’’ as defined by the Consumer Product Safety
Act (‘‘the Act’’), 15 U.S.C. § 2064(a). They also requested
Reliable to undertake voluntary corrective action to address
the alleged hazards associated with the sprinkler heads. In
response, Reliable filed suit against the Commission in the
District Court, seeking a declaratory judgment that the agen-
cy lacks statutory authority to regulate Reliable’s sprinkler
heads, because they are not ‘‘consumer products’’ as defined
by the Act, 15 U.S.C. § 2052(a)(1). The District Court grant-
ed the Commission’s motion to dismiss for lack of final agency
action.
On appeal, Reliable contends that the District Court erred
in finding no final agency action. Reliable argues that the
Commission has pursued its investigation against the compa-
ny on the erroneous assumption that the disputed sprinkler
heads are ‘‘consumer products’’ under the Act. Thus, accord-
ing to Reliable, the Commission has taken final agency action
in determining that Reliable’s sprinkler heads are ‘‘consumer
products’’ under the Act and in assuming jurisdiction to
regulate them. We reject these contentions.
The Act makes it clear that the Commission has no authori-
ty to coercively regulate products before first conducting a
formal, on-the-record adjudication. It is undisputed here that
the Commission has yet to issue a complaint; it has yet to
authorize or conduct a hearing; it has yet to determine
conclusively its jurisdiction to regulate; it has yet to deter-
mine whether the sprinkler heads present a ‘‘substantial
product hazard’’; and it has yet to issue any compliance
3
orders against Reliable. CPSC has merely conducted an
investigation and issued a letter requesting voluntary compli-
ance. This does not constitute final agency action and is
therefore unreviewable. Accordingly, we affirm the judg-
ment of the District Court.
I. BACKGROUND
The Act, 15 U.S.C. § 2051 et seq., gives the Commission the
authority to conduct investigations on the safety of consumer
products. Id. § 2054(b). A principal responsibility of the
Commission is to determine ‘‘that a product distributed in
commerce presents a substantial product hazard and that
notification is required in order to adequately protect the
public from such substantial product hazard.’’ Id. § 2064(c).
If CPSC makes such a determination, it may order the
manufacturer, retailer, or distributor of the product to give
public notice of the defect, bring the product into compliance
with applicable safety standards, replace the product, or
refund the purchase price. See id. § 2064(c), (d). The
agency can make such a determination and issue a compliance
order only after affording interested persons an opportunity
for a hearing in accordance with the formal, on-the-record
adjudication requirements of the Administrative Procedure
Act (‘‘APA’’), 5 U.S.C. § 554. See 15 U.S.C. § 2064(c), (d), (f).
Prior to initiating the administrative proceedings required
under this statutory scheme, the Commission can ‘‘attempt to
protect the public from substantial product hazards by seek-
ing TTT voluntary remedies,’’ such as ‘‘corrective action
plans,’’ in which a firm sets forth the remedial action it will
voluntarily undertake. 16 C.F.R. § 1115.20. A corrective
action plan explains, inter alia, how a firm will notify the
public of the hazard, and whether the firm will repair or
replace the product, or refund the purchase price. Id.
§ 1115.20(a). This voluntary corrective action ‘‘has no legally
binding effect.’’ Id. If the Commission is unable to obtain a
firm’s voluntary corrective action, it may file an administra-
tive complaint, which initiates formal administrative proceed-
4
ings, see id. § 1025.11, including a trial-type hearing in accor-
dance with the Commission’s rules. See id. § 1025.
Reliable is a manufacturer of automatic sprinkler heads
that are incorporated into automatic fire sprinkler systems
installed in commercial buildings. From 1973 to 1983, Reli-
able manufactured the ‘‘Model A Flush’’ sprinkler heads. In
1999, the Commission’s Office of Compliance began investi-
gating these sprinkler heads to determine whether they
present a substantial product hazard. On September 11,
2000, Commission compliance officials informed Reliable by
letter that ‘‘it is the intention of the Compliance staff to make
the preliminary determination that these sprinklers present a
substantial product hazard, as defined by TTT 15 U.S.C.
§ 2064(a).’’ Letter from Jimmie L. Williams, Jr., Counsel for
Office of Compliance, CPSC, to Paul D. Derounian, Counsel
for Reliable (Sept. 11, 2000), reprinted in Joint Appendix
(‘‘JA’’) 27. But prior to making the preliminary determina-
tion, the officials requested Reliable to take ‘‘voluntary cor-
rective action,’’ pursuant to 16 C.F.R. § 1115.20(a). Id.
To date, Reliable has not submitted a voluntary corrective
action plan. The Commission has not yet made a formal
determination that the sprinkler heads present a ‘‘substantial
product hazard,’’ or even filed an administrative complaint
initiating the administrative proceedings that would be re-
quired before the agency could make such a determination.
Indeed, the Commission has not as yet made a record deter-
mination that it has jurisdiction over Reliable’s sprinkler
heads. The Commission has brought administrative enforce-
ment proceedings pursuant to 15 U.S.C. § 2064 against sever-
al other manufacturers of sprinkler heads, see CPSC Admin.
Compl. ¶ 1, JA 59; CPSC Admin. Compl. ¶ 1, JA 166, but
Reliable is not a party to those proceedings.
On January 9, 2001, Reliable filed the instant suit against
the Commission in the District Court, seeking a declaratory
judgment that Reliable’s sprinkler heads are not ‘‘consumer
products’’ within the meaning of the Act, 15 U.S.C.
§ 2052(a)(1), which defines ‘‘consumer product,’’ subject to
certain exceptions, as:
5
any article, or component part thereof, produced or
distributed (i) for sale to a consumer for use in or
around a permanent or temporary household or
residence, a school, in recreation, or otherwise, or (ii)
for the personal use, consumption or enjoyment of a
consumer in or around a permanent or temporary
household or residence, a school, in recreation, or
otherwiseTTTT
Reliable contended that, because its sprinkler heads are not
consumer products within the meaning of the Act, the Com-
mission lacked statutory authority to regulate Reliable’s
sprinkler heads. See Complaint for Declaratory Judgment,
JA 5, 9-10. The District Court granted the Commission’s
motion to dismiss for lack of subject matter jurisdiction
pursuant to FED. R. CIV. P. 12(b)(1). See Reliable Automatic
Sprinkler Co., Inc. v. CPSC, 173 F. Supp. 2d 41, 52 (D.D.C.
2001). Relying on FTC v. Standard Oil Co. of Cal., 449 U.S.
232, 243 (1980) (holding that the agency’s issuance of an
administrative complaint averring reason to believe that the
plaintiff was violating the law is not final agency action), the
District Court held that the Commission’s investigatory steps
did not rise to the level of final agency action within the
meaning of the APA. Reliable, 173 F. Supp. 2d at 52.
II. ANALYSIS
We review de novo the District Court’s grant of appellee’s
motion to dismiss. Weyrich v. New Republic, Inc., 235 F.3d
617, 623 (D.C. Cir. 2001).
Under the APA, ‘‘[a]gency action made reviewable by stat-
ute and final agency action for which there is no other
adequate remedy in a court are subject to judicial review.’’ 5
U.S.C. § 704. As a threshold matter, the parties raise the
issue of whether the District Court’s dismissal of the case
pursuant to FED. R. CIV. P. 12(b)(1) was improper, because, in
cases such as this one, in which judicial review is sought
under the APA rather than a particular statute prescribing
judicial review, the requirement of final agency action is not
jurisdictional under Califano v. Sanders, 430 U.S. 99, 107
(1977) (holding that ‘‘the APA does not afford an implied
6
grant of subject-matter jurisdiction permitting federal judicial
review of agency action’’). We need not dwell on this issue,
for it raises a question of no significance in this case. If there
was no final agency action here, there is no doubt that
appellant would lack a cause of action under the APA.
Therefore, even though there was no basis for dismissal
under Rule 12(b)(1), we may properly affirm the District
Court’s judgment pursuant to Rule 12(b)(6). See EEOC v. St.
Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir.
1997).
Having disposed of the threshold issue, we turn now to the
question of finality. The District Court’s authority to review
the conduct of an administrative agency is limited to cases
challenging ‘‘final agency action.’’ 5 U.S.C. § 704. An agen-
cy action is deemed final if it is ‘‘ ‘definitive’ ’’ and has a
‘‘ ‘direct and immediate TTT effect on the day-to-day busi-
ness’ ’’ of the party challenging the agency action. Standard
Oil, 449 U.S. at 239 (quoting Abbott Labs. v. Gardner, 387
U.S. 136 (1967)). Final agency action ‘‘mark[s] the consum-
mation of the agency’s decisionmaking process’’ and is ‘‘one
by which rights or obligations have been determined, or from
which legal consequences will flow.’’ Bennett v. Spear, 520
U.S. 154, 178 (1997) (internal quotation marks and citations
omitted). Agency action is considered final to the extent that
it imposes an obligation, denies a right, or fixes some legal
relationship. Role Models Am., Inc. v. White, 317 F.3d 327,
331-32 (D.C. Cir. 2003).
Reliable acknowledges that there has been no final agency
action with respect to the question whether Reliable’s sprin-
kler heads present a substantial product hazard. Neverthe-
less, Reliable seeks judicial review of the Commission’s regu-
latory jurisdiction. Reliable contends that its sprinkler heads
are not ‘‘consumer products’’ under the Act, and that the
Commission therefore lacks statutory authority to regulate
Reliable’s sprinkler heads. Reliable argues that, because this
is a challenge to the agency’s statutory authority to regulate,
rather than to the substance of any substantial hazard deter-
mination, the agency’s pre-enforcement actions are sufficient-
7
ly final to warrant judicial review of the agency’s jurisdiction
at this stage. We reject this line of reasoning.
The agency’s conduct thus far amounts to an investigation
of appellant’s sprinkler heads, a statement of the agency’s
intention to make a preliminary determination that the sprin-
kler heads present a substantial product hazard, and a re-
quest for voluntary corrective action. These agency activities
do not constitute final agency action within the meaning of
the APA, 5 U.S.C. § 704. Certainly the agency’s investiga-
tion assumes for now that it has jurisdiction to regulate the
sprinkler heads. But the agency has not yet made any
determination or issued any order imposing any obligation on
Reliable, denying any right of Reliable, or fixing any legal
relationship. See Role Models, 317 F.3d at 331-32. The Act
and the agency’s regulations clearly prescribe a scheme
whereby the agency must hold a formal, on-the-record adjudi-
cation before it can make any determination that is legally
binding. Here, the agency has not yet taken the steps
required under the statutory and regulatory scheme for its
actions to have any legal consequences. In the event that the
agency should decide to pursue enforcement action against
Reliable, the agency must, in the course of the formal adjudi-
cation, afford Reliable the opportunity to convince the agency
that the term ‘‘consumer product’’ does not include Reliable’s
sprinkler heads and that the agency therefore lacks jurisdic-
tion to regulate them. But to date, the agency has not even
filed an administrative complaint against Reliable.
The leading Supreme Court case on final agency action,
Standard Oil, held that even the filing of an administrative
complaint does not constitute final agency action. See Stan-
dard Oil, 449 U.S. at 243. It follows that the Commission’s
actions here, which are merely investigatory and clearly fall
short of filing an administrative complaint, are not final
agency action. No legal consequences flow from the agency’s
conduct to date, for there has been no order compelling
Reliable to do anything. To be sure, there may be practical
consequences, namely the choice Reliable faces between vol-
untary compliance with the agency’s request for corrective
action and the prospect of having to defend itself in an
8
administrative hearing should the agency actually decide to
pursue enforcement. But the request for voluntary compli-
ance clearly has no legally binding effect. 16 C.F.R.
§ 1115.20(a). And, as the Supreme Court stated in Standard
Oil, the burden of responding to charges in an administrative
enforcement hearing ‘‘is different in kind and legal effect
from the burdens attending what heretofore has been consid-
ered to be final agency action.’’ Standard Oil, 449 U.S. at
242. See also Ticor Title Ins. Co. v. FTC, 814 F.2d 731, 742
(D.C. Cir. 1987) (Edwards, J.) (‘‘[T]he litigant’s interest in not
being forced to defend itself in an allegedly unauthorized
proceeding TTT is far less weighty than the court’s interest in
conserving its judicial resources and discouraging the flouting
of administrative procedures.’’). These consequences attach
to any parties who are the subjects of Government investiga-
tions and believe that the relevant law does not apply to
them. If the Government brings an enforcement proceeding,
such parties may defend themselves on the ground that the
agency lacks jurisdiction, but they may not preemptively
challenge the Government’s jurisdiction before the Govern-
ment has taken any action to enforce the law against them.
See Standard Oil, 449 U.S. at 243 (‘‘Judicial review TTT
should not be a means of turning prosecutor into defendant
before adjudication concludes.’’).
The reason to preclude such interlocutory challenges to
agency jurisdiction inheres in the purpose of the final agency
action rule. ‘‘The interest in postponing review is powerful
when the agency position is tentative. Judicial review at that
stage improperly intrudes into the agency’s decisionmaking
process. It also squanders judicial resources since the chal-
lenging party still enjoys an opportunity to convince the
agency to change its mind.’’ Ciba-Geigy Corp. v. EPA, 801
F.2d 430, 436 (D.C. Cir. 1986) (citations omitted). Reliable is
mistaken in its claim that a special rule applies when a
litigant challenges the agency’s authority to regulate rather
than the merits of an agency’s act of regulation. The policy
undergirding the finality requirement ‘‘is no less applicable to
piecemeal appeals on issues of statutory authority than to
piecemeal appeals on other points.’’ Aluminum Co. of Am. v.
9
United States, 790 F.2d 938, 942 (D.C. Cir. 1986). So long as
Reliable retains the opportunity to convince the agency that it
lacks jurisdiction over Reliable’s sprinkler heads, it makes no
sense for a court to intervene. It conserves both judicial and
administrative resources to allow the required agency deliber-
ative process to take place before judicial review is undertak-
en.
Reliable points out that the Commission has already
brought administrative proceedings against several other
manufacturers of automatic sprinkler heads and taken the
position in those proceedings that sprinkler heads are ‘‘con-
sumer products.’’ But in all but one of those cases, only
administrative complaints were issued, putting them squarely
within the Standard Oil realm. And in the one case in which
an ALJ actually rendered an opinion resolving a manufactur-
er’s jurisdictional objection, the Commission never passed on
the issue because the case was settled. In short, the Com-
mission itself has never considered the issue raised by Reli-
able, neither in this case nor any other. Moreover, it does
not follow from the fact that the CPSC has brought adminis-
trative proceedings against other manufacturers that the
agency will use its resources to proceed against Reliable.
The agency’s letter to Reliable merely stated an ‘‘intention of
the Compliance staff to make the preliminary determination
that these sprinklers present a substantial product hazard.’’
Letter from Williams to Derounian, JA 27. We do not know
whether the agency will bring administrative enforcement
proceedings against Reliable. Cf. Am. Tel. & Tel. Co. v.
EEOC, 270 F.3d 973, 976 (D.C. Cir. 2001) (finding no final
agency action where it was unclear whether the agency had
decided to sue the plaintiff). If the agency does decide to
pursue a complaint, Reliable will be afforded a hearing in
which it will have ample opportunity to convince the agency
against the assertion of regulatory jurisdiction and create a
record for judicial review should that later be deemed neces-
sary. And a hearing before the Commission will not be an
idle gesture, because the agency has made it clear that the
interpretation of ‘‘consumer product’’ with respect to sprin-
10
kler heads remains to be determined. See Appellee’s Br. 17,
24, 26.
Relying on three pre-enforcement cases in which agency
action was determined to be sufficiently final to allow for
judicial review, Ciba-Geigy; Atlantic Richfield Co. v. U.S.
Dep’t of Energy, 769 F.2d 771 (D.C. Cir. 1985) (‘‘ARCO’’);
and Athlone Industries, Inc. v. CPSC, 707 F.2d 1485 (D.C.
Cir. 1983), Reliable argues that we should interpret Standard
Oil narrowly here, and find that the agency’s actions in this
case are also sufficiently final to warrant judicial review. We
reject this invitation, because the cases cited by Reliable do
not support review here.
In Ciba-Geigy, the Environmental Protection Agency
(‘‘EPA’’) imposed a deadline for labeling changes for a regis-
tered pesticide without affording registrants the notice and
hearing procedures set forth in the statute. When an affect-
ed party sought judicial review, this court concluded that the
letters that EPA sent to the plaintiff
unequivocally stated EPA’s position on the question
whether registrants were entitled to a cancellation
hearing before labeling changes could be required.
Not only did the statement of position admit of no
ambiguity, but it gave no indication that it was
subject to further agency consideration or possible
modification. The letter emphatically required
Ciba-Geigy’s ‘‘immediate compliance.’’
Ciba-Geigy, 801 F.2d at 436-37 (footnote and citations omit-
ted). In the instant case, however, there has been no un-
equivocal statement of the agency’s position on the meaning
of ‘‘consumer product’’ or on the agency’s jurisdiction over
Reliable’s sprinklers. The agency has requested voluntary
corrective action, but has not ordered Reliable to comply.
What is more, in Ciba-Geigy, the agency denied the plaintiff
any opportunity to be heard; whereas here, a hearing will
take place in due course should the Commission decide to
pursue enforcement against Reliable.
Reliable’s further argument on the basis of Ciba-Geigy
that, in this case, a ‘‘series of agency pronouncements,’’ 801
11
F.2d at 436 n.7, can make out final agency action is misplaced.
Although we so held in Ciba-Geigy and in Barrick Goldstrike
Mines, Inc. v. Browner, 215 F.3d 45, 49 (D.C. Cir. 2000)
(holding that ‘‘a preamble plus a guidance plus an enforce-
ment letter from EPA could crystallize an agency position
into final agency action within APA § 704’s meaning’’), nei-
ther of those cases involved a situation in which, as here, the
agency is required by statute to bring an administrative
proceeding before it may make any legally binding determi-
nation. Here, the agency has not yet done that which the
statutory scheme requires for its conduct to constitute final
agency action.
In Athlone, plaintiff sued to enjoin the assessment of civil
penalties in an administrative proceeding that the Commis-
sion had initiated, on the ground that the agency lacked the
statutory authority to proceed administratively. In holding
that the plaintiff did not have to exhaust the prescribed
administrative remedies before gaining judicial review of the
agency’s statutory authority, this court emphasized ‘‘the pure-
ly legal nature of the issue presented,’’ which required ‘‘[n]o
factual development or application of agency expertise.’’ Ath-
lone, 707 F.2d at 1489. We also emphasized the ‘‘likely
futility of further resort to’’ administrative proceedings, since
it was ‘‘highly unlikely that the Commission would change its
position if the case were remanded to it.’’ Id. In the instant
case, by contrast, the question whether the statutory term
‘‘consumer product’’ includes Reliable’s sprinkler heads is not
a purely legal one, since the application of the statutory term
to the sprinkler heads would clearly involve the resolution of
factual issues and the creation of a record. And agency
expertise may be relevant to the question whether sprinkler
heads are ‘‘consumer products.’’
Although appellant claims that it is highly unlikely that the
agency will change its position and that resort to the agency’s
adjudicatory proceeding would be futile, nothing in the record
indicates that the outcome of a hearing, where Reliable will
have the opportunity to present its arguments to the agency,
is preordained. Appellant argues that the Commission’s ad-
12
ministrative proceedings against other sprinkler manufactur-
ers establish that the agency has taken a definitive position as
to its jurisdiction over automatic sprinkler heads in general.
But as the District Court reasoned, Reliable ‘‘may be able to
persuade an administrative law judge that the manner in
which its sprinklers are produced and marketed, and the
locations in which [they] are installed, demonstrate that they
are not ‘consumer products.’ ’’ Reliable, 173 F. Supp. 2d at
51 (citation omitted).
Finally, in ARCO, which applied Athlone, this court held
that the doctrines of exhaustion and ripeness did not bar a
challenge to the Department of Energy’s authority to adjudi-
cate remedial orders and impose discovery sanctions in such
proceedings. Again, the question of the agency’s statutory
authority was a strictly legal issue for which factual develop-
ment and agency expertise were unnecessary, and resort to
the agency would have been futile, because the agency ‘‘struc-
tured its regulatory processes on the premise that it has
power to act in an adjudicatory capacity.’’ ARCO, 769 F.2d
at 782. In addition, ARCO was ‘‘faced with the dilemma of
having to [choose] between complying with allegedly ultra
vires discovery orders – and thus revealing materials that
otherwise would remain confidential – and flouting the orders
and facing the consequences should the Department ultimate-
ly be found to have had the power to issue the orders.’’ Id. at
783-84.
Reliable’s dilemma of having to choose between voluntary
corrective action or defending itself in an administrative
proceeding, should the agency decide to bring one, is not
analogous to the plaintiffs’ dilemma in ARCO. The discovery
orders in ARCO were legally binding orders, whereas here,
there is no order, only the possibility of Reliable having to
defend itself at an enforcement hearing if Reliable does not
undertake certain voluntary action, and if the agency decides
to proceed against it.
III. CONCLUSION
We affirm the judgment of the District Court. The Com-
mission’s activities to date do not constitute final agency
13
action. We therefore dismiss this action pursuant to FED. R.
CIV. P. 12(b)(6), because appellant has failed to state a cause
of action.