Am. Apparel & Footwear Ass'n v. Schroeder

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AMERICAN APPAREL & FOOTWEAR ASSOCIATION, INC.; HALLOWEEN INDUSTRY ASSOCIATION, INC.; JUVENILE PRODUCTS MANUFACTURERS ASSOCIATION, INC.; and THE TOY ASSOCIATION, INC., Plaintiffs, v. JAMES SCHROEDER, in his official capacity as Interim Director of the Oregon Health Authority^[1]; and ELLEN ROSENBLUM, in her official capacity as Attorney General for the State of Oregon, Defendants.

No. 3:21-cv-1757-SI

United States District Court, D. Oregon

January 24, 2023

James T. McDermott and Dwain M. Clifford, McDermott Weaver Connelly Clifford llp, Of Attorneys for Plaintiffs.

Keith A. Ketterling, Steven C. Berman, and Lydia Anderson-Dana Stoll Stoll Berne Lotking & Shlachter pc, Special Assistant Attorneys General for Defendants.

OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiffs are four trade associations that represent manufacturers of children's products. Plaintiffs seek to enjoin both the Interim Director of the Oregon Health Authority (OHA) and the Oregon Attorney General (Defendants) from enforcing portions of Oregon's Toxic-Free Kids Act (TFK Act)^[2] and two of its implementing regulations. The TFK Act directs the OHA to establish and maintain a list of high priority chemicals of concern for children's health (HPCCCHs) when used in children's products and to issue regulations implementing this law. Oregon's list of HPCCCHs^[3] contains 73 chemicals, 16 of which are also regulated by relevant federal law.

Plaintiffs initially asserted that the Federal Hazardous Substances Act (FHSA)^[4] and the Consumer Product Safety Act (CPSA)^[5] preempt three provisions of the TFK Act and its implementing regulations. These provisions are Oregon Revised Statutes (ORS) § 431A.258 (the “Notice Statute”), Oregon Administrative Rule (OAR) 333-016-2060 (the “Notice Regulation”), and OAR 333-016-3015 (the “Exemption Regulation”). Plaintiffs requested that the Court declare these provisions void and enjoin Defendants from enforcing them. Plaintiffs also brought a state law claim, contending that the OHA exceeded its statutory authority when it promulgated the Exemption Regulation.

Defendants previously moved to dismiss the preemption claims to the extent they are based on the FHSA, and Plaintiffs moved for summary judgment on all claims. In June 2022, the Court dismissed Plaintiffs' claims based on the FHSA denied Plaintiffs' motion for summary judgment for their claims based on federal law, and deferred ruling on the state law claim.

Defendants now ask the Court to dispose of the remainder of Plaintiffs' case, and Plaintiffs cross-move for summary judgment in their favor. Defendants seek summary judgment on Plaintiffs' claims and allegations based on or arising under the CPSA. Defendants also seek summary judgment on Plaintiffs' state law claim, arguing that this claim is barred by the Eleventh Amendment. Alternatively, Defendants propose that the Court deny supplemental jurisdiction for this claim or grant their motion for summary judgment on the merits. Plaintiffs cross-move for summary judgment on their state law claim as well as the CPSA claims. Plaintiffs argue that the CPSA expressly or impliedly preempts the Notice Statute, the Notice Regulation, and the Exemption Regulation. Plaintiffs ask the Court to declare these provisions void and to enjoin their enforcement.

BACKGROUND

In the Court's Opinion and Order dated June 22, 2022, the Court provided relevant background about the CPSA and its relevant provisions. Am. Apparel & Footwear Ass'n, Inc. v. Allen (Am. Apparel I), 2022 WL 2235907, at *3-7 (D. Or. June 22, 2022). The Court will now briefly summarize the relevant provisions of the TFK Act and its implementing regulations.

The Notice Statute requires manufacturers of children's products, or the manufacturers' trade associations, to provide biennial notices when a children's product that is sold or offered for sale in Oregon contains a chemical listed as a HPCCCH, at or above a de minimis level. ORS § 431A.258(1)(a), (6).

The Notice Regulation, promulgated by the OHA under the TFK Act, specifies that a manufacturer's (or trade association's) notice must include the amount of the chemical used in each “unit” (defined as each “component part”) within each product category, reported as a range. OAR 333-016-2060(5)(d), (1); see also OAR 333-016-2010(9) (defining “component part”). The Notice Regulation also sets the calendar for when notices are due according to a biennial notice schedule. See OAR 333-016-2060(3), (4). The Court refers to the Notice Statute and Notice Regulation together as the “Notice Provisions.”

The Exemption Regulation lists criteria for when a children's product containing an HPCCCH is exempt from the TPK Act's “removal or substitution” requirement, which is discussed in another provision not challenged by Plaintiff. OAR 333-016-3015(2). A manufacturer may apply for an exemption in any of the following four circumstances:

(a) The children's product contains a HPCCCH used in children's products at levels that are at or below allowable levels for children's products as established by the Consumer Product Safety Improvement Act of 2008, P.L. 110-314, 122 Stat. 3016, as in effect on July 27, 2015.

(b) A manufacturer is in compliance with a federal consumer product safety standard adopted under federal law that establishes allowable levels for children's products of a high priority chemical of concern for children's health used in children's products.

(c) The State of Washington has granted an exemption for the removal or substitution of a HPCCCH in the same children's product model for which the exemption is requested under OAR 333-016-3015.

(d) A children's product has been tested under applicable EN-71 standards, by a laboratory that is accredited to conduct such testing under the current edition of ISO/IEC 17025 by an accreditation body that is a signatory to the International Laboratory Accreditation Cooperation mutual recognition arrangement.

Id. To obtain an exemption, a manufacturer must submit appropriate documentation to the OHA, along with a $1,500 fee. OAR 333-016-3015(4); OAR 333-016-2080(1)(e) (fee amount). When a manufacturer seeks an exemption due to compliance with a federal consumer product safety standard under subsection 2(b), the supporting documentation must include a citation to the federal consumer product safety standard that establishes an allowable level of a HPCCCH in children's products. OAR 333-016-3015(4)(b). Finally, “[m]ore than one product model may be submitted in a single exemption request.” OAR 333-016-3015(3).

STANDARDS

A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient ....” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

When parties file cross-motions for summary judgment, the court “evaluate[s] each motion separately, giving the nonmoving party in each instance the benefit of all reasonable inferences.” ACLU of Nev. v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006) (quotation marks and citation omitted); see also Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 674 (9th Cir. 2010) (“Cross-motions for summary judgment are evaluated separately under [the] same standard.”). In evaluating the motions, “the court must consider each party's evidence, regardless under which motion the evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011).

“Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). Thereafter, the nonmoving party bears the burden of designating “specific facts demonstrating the existence of genuine issues for trial.” Id. “This burden is not a light one.” Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a “metaphysical doubt” as to the material facts at issue. Matsushita, 475 U.S. at 586.

DISCUSSION

After this Court's Opinion and Order dismissing Plaintiffs' preemption claims “to the extent” that they are based on the FHSA, the remaining issue concerns only the preemptive effect of the CPSA. Federal law may preempt state law under the Supremacy Clause in three ways: “(1) express preemption; (2) field preemption (sometimes referred to as complete preemption); and (3) conflict preemption.” Ting v. AT&T, 319 F.3d 1126 1135 (9th Cir. 2003). In any preemption analysis “[t]he purpose of Congress is the ultimate touchstone.” Retail Clerks Int'l Ass'n, Local 1625 v. Schermerhorn, 375 U.S. 96, 103 (1963). Only express preemption and implied conflict preemption are...