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Riegel Textile Corp. v. Celanese Corp.

UNITED STATES COURT OF APPEALS, SECOND CIRCUIT


decided: May 6, 1981.

RIEGEL TEXTILE CORPORATION, PLAINTIFF-APPELLANT,
v.
CELANESE CORPORATION, DEFENDANT-APPELLEE .

Appeal from an order of the United States District Court for the Southern District of New York, William C. Conner, J., dismissing plaintiff's complaint for failure to state a claim under Sections 1263 or 1974 of the Federal Hazardous Substances Act. Affirmed.

Before Feinberg, Chief Judge, Kearse, Circuit Judge, and Edelstein, District Judge.*fn*

Author: Edelstein

This is an appeal from an order of the Hon. William C. Conner, dismissing plaintiff's complaint, based upon federal and state law claims, for failure to state a claim upon which relief can be granted. We affirm.

Plaintiff Riegel is in the business of manufacturing and processing fabrics and garments including children's sleepwear. Defendant Celanese manufactures synthetic fibers.

In 1972, Celanese advised Riegel that it had developed a flame-retardant synthetic fiber (treated with TRIS), suitable for the manufacture of children's sleepwear.*fn1 After conducting its own tests for color-fastness and flammability, Riegel, between 1972 and 1976, issued to Piedmont Knitting Co. orders to purchase TRIS-treated yarn from Swift Spinning Mill, Inc. for knitting into fabric. Upon Riegel's instruction, Swift purchased sufficient TRIS-treated fiber from Celanese to make the yarn which Piedmont ordered.*fn2

In March 1976, a petition was submitted to the Consumer Product Safety Commission (CPSC) by the Environmental Defense Fund (EDF), seeking an order requiring labeling on TRIS-treated garments, directing that the garments be washed three times before they are worn. The basis of the petition was that TRIS might be a carcinogen. The CPSC did not hold hearings as required by 21 U.S.C. § 371(e) of the Food, Drug and Cosmetic Act, see 15 U.S.C. § 1262(a)(2), although it did solicit information from selected sources. In February, 1977, the EDF filed an additional petition with the CPSC seeking a ban on all TRIS-treated garments. Again, hearings were not held.

On April 8, 1977, the CPSC, acting under the provisions of the Federal Hazardous Substances Act (FHSA), announced that all children's clothing containing TRIS was a "banned hazardous substance" under 15 U.S.C. § 1261(q) (1)(A), and therefore was banned from interstate commerce. The CPSC also specified that the affected clothing must be repurchased pursuant to 15 U.S.C. § 1274.

On May 3, 1977, Judge George Hart, in deciding a motion for preliminary injunction in American Apparel Manufacturer's Association v. CPSC, No. 77-682 (D.D.C.), ordered the CPSC to expand its ban to include not only TRIS-treated apparel used or intended for use in children's clothing, but also TRIS-treated fabric, yarn and fiber. The purpose of the order was to broaden the economic burden of repurchase from manufacturers of children's apparel to include fabric manufacturers.*fn3 On June 1, 1977, the CPSC reissued an expanded ban on TRIS-treated material. The CPSC did not order repurchase, as it had done in its April 8 announcement, stating that it needed to clarify a number of questions concerning repurchase due to the existence of a "multiple manufacturer situation." The agency noted several types of manufacturers were involved, including manufacturers of the affected chemical, fiber, fabric, yarn, and garments.

Before such a clarification was issued, Judge Robert F. Chapman, in ruling on a motion for a permanent injunction in Springs Mills, Inc. v. Consumer Product Safety Commission, held that the CPSC ban on TRIS-treated materials was null and void because the CPSC had failed to follow the rule-making procedures required under the FHSA. 434 F. Supp. 416, 435 (D.S.C.1977). Judge Chapman held that (1) the CPSC must follow the rule-making procedures set forth in the Food, Drug and Cosmetic Act, 21 U.S.C. § 371(e), to declare an article a "banned hazardous substance"; (2) even where children are involved, the CPSC must first find an article to be a "hazardous substance" before declaring it a "banned hazardous substance"; (3) action banning TRIS was not an "interpretative rule" or "statement of policy" within the exemption from rule-making provided by the Administrative Procedure Act; and (4) the CPSC's failure to follow the procedural safeguards of a full rule-making hearing deprived plaintiff of due process. On the basis of these findings, the court ruled that the § 1274 repurchase obligations could not be triggered until the CPSC had conducted a hearing to decide whether TRIS was a "hazardous substance" within the meaning of the Act. Id. at 435.

The CPSC, rather than attempting to ban TRIS through rule-making, on December 6, 1977, issued a "Statement of Policy" to the effect that the CPSC intended to enforce its belief that TRIS was a hazardous substance by bringing individual enforcement actions in federal courts "to prevent the sale and to require the statutory repurchase of such products."

The CPSC then undertook to prohibit the sale of TRIS-treated material through the seizure procedures of 15 U.S.C. § 1265. This use of the seizure procedures, without prior agency rule-making, was upheld in United States v. Articles of Hazardous Substance, 588 F.2d 39, 42 (4th Cir. 1978), rev'g 444 F. Supp. 1260 (M.D.N.C.1978). The Fourth Circuit found that the hearing required by due process on the issue whether TRIS-treated material is a "banned hazardous substance" would take place in a subsequent hearing on the merits of the condemnation proceeding.

In the case at bar, Riegel repurchased from its customers TRIS-treated pajamas pursuant to the CPSC's April 8 "interpretation." Riegel in turn sought to have Celanese repurchase from Riegel. After negotiations with Celanese failed, Riegel filed this action in the Southern District of New York. The district court, William C. Conner, J., dismissed the complaint for failure to state a claim, holding that under the criteria set forth in Cort v. Ash, 422 U.S. 66, 95 S. Ct. 2080, 45 L. Ed. 2d 26 (1975), neither § 1263 nor § 1274 of the Federal Hazardous Substances Act created an implied right of action. The court then dismissed plaintiff's seven state law claims, based on product liability, warranty and negligence, finding the exercise of pendent jurisdiction to be inappropriate. Riegel Textile Corp. v. Celanese Corp., 493 F. Supp. 511 (S.D.N.Y. 1980).

Discussion

A. Introduction

This case presents a question of first impression: whether a private right of action should be implied under sections 1263 or 1274 of the Federal Hazardous Substances Act.*fn4 Cort v. Ash, 422 U.S. 66, 78, 95 S. Ct. at 2087 (1975), establishes the criteria which must be examined to determine whether a private remedy is implicit in a statute not expressly providing one:

First, is the plaintiff "one of the class for whose especial benefit the statute was enacted," that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? (Citations omitted.)

Recent Supreme Court decisions have stressed that courts should be reluctant to imply private rights of action. See Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S. Ct. 242, 62 L. Ed. 2d 146 (1979); Touche Ross & Co. v. Redington, 442 U.S. 560, 99 S. Ct. 2479, 61 L. Ed. 2d 82 (1979); Piper v. Chris-Craft Industries, Inc., 430 U.S. 1, 97 S. Ct. 926, 51 L. Ed. 2d 124 (1977).*fn5 "(T)he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person." Cannon v. University of Chicago, 441 U.S. 677, 688, 99 S. Ct. 1946, 1953, 60 L. Ed. 2d 560 (1979). The Cort factors are not necessarily to be accorded equal weight. "The central inquiry remains whether Congress intended to create, either expressly or by implication, a private cause of action." Touche Ross & Co. v. Redington, supra, 442 U.S. at 575, 99 S. Ct. at 2489.

B. The Statutory Scheme

Before proceeding to the analysis under Cort v. Ash, it is useful to outline the history of the relevant statutes. The Federal Hazardous Substances Labeling Act, 15 U.S.C. §§ 1261 et seq., enacted in 1960, was essentially a labeling law and applied only to products packaged in containers intended for household use. The Act defined certain categories of "hazardous substances" and then prohibited their delivery and receipt in interstate commerce if "misbranded"; i. e., if they did not carry an appropriate warning label. Administration of the Act was vested in the Secretary of Health, Education and Welfare.

This Act was amended by the Child Protection Act of 1966, and the word "Labeling" deleted from its title. The coverage of the FHSA was extended to include any "hazardous substance" intended for household use or use by children. The 1966 amendments also permitted the administrative agency to ban from interstate commerce products which are so dangerous that no warnings could make the product safe for use.

Congress, finding inadequate the existing laws relating to toys, further amended the FHSA by the Child Protection and Toy Safety Act of 1969. The amendments were designed to provide protection to children from toys and other articles which are hazardous due to the presence of electrical, mechanical or thermal hazards. The 1969 amendments added a section requiring the repurchase of "banned hazardous substances" by manufacturers, distributors and dealers, including retailers. 15 U.S.C. § 1274.

In 1972, Congress enacted the Consumer Product Safety Act (CPSA), 15 U.S.C. §§ 2051 et seq.*fn6 This Act was an effort by Congress to do away with piecemeal legislative coverage and to consolidate within a single independent agency all federal safety-oriented regulation in the area of consumer products.*fn7

The CPSA established a new regulatory agency, the Consumer Product Safety Commission, to administer the Act and transferred to the CPSC the responsibility for administering the Federal Hazardous Substances Act. 15 U.S.C. § 2079. Like the FHSA, the CPSA was primarily directed to developing safety standards, with a consumer product to be banned only if no safety standard could be devised which would adequately protect the public. 15 U.S.C. §§ 2057, 2058.

Section 2059 of the CPSA authorizes "interested persons," including consumers or consumer organizations, to petition the CPSC to commence a proceeding for the issuance, amendment, or revocation of a consumer product safety rule; that is, a consumer product safety standard or a rule declaring a consumer product a "banned hazardous product." The CPSC is authorized to conduct such investigations or proceedings as are appropriate, and is required, within 120 days after a petition is filed, either to grant or deny the petition. If the petition is granted, the CPSC is required to commence rule-making promptly; if denied, the reasons for the denial must be published in the Federal Register. Upon denial of the petition, the petitioner may commence an action in district court to compel the CPSC to initiate a proceeding to take the action requested. If, in a de novo proceeding, the court finds, by a preponderance of the evidence, (1) that the product presents an unreasonable risk of injury, and (2) that the CPSC's failure to initiate rule-making unreasonably exposes consumers to a risk of injury, the court is required to order the CPSC to initiate rule-making. Thus, the Act provides consumers with specific procedures to bring particular product hazards to the attention of the CPSC.

The CPSA also provides two express private remedies. Section 2072 provides for a suit by any person injured by a knowing violation of any Commission rule or order. Section 2073 provides for an injunctive action seeking to enforce any Commission rule or order.

C. Implied Rights of Action

1. Section 1263

Section 1263 of the Federal Hazardous Substances Act provides, in relevant part, that:

(t)he following acts and the causing thereof are prohibited:

(a) the introduction or delivery for introduction into interstate commerce of any misbranded hazardous substances or banned hazardous substance.

Plaintiff argues that certain substances, including TRIS, are by definition "banned hazardous substances" under § 1261(q)(1)(A),*fn8 and thus no agency action defining the substance as such is required. Plaintiff argues that without a private right of action under § 1263, there would be a private remedy for products banned by agency action, see 15 U.S.C. § 2072,*fn9 but not for products banned by definition, without agency action. Therefore, a private right of action must necessarily be implied under § 1263 in order to fulfill the statutory purpose evidenced by the private remedy which § 2072 provides for violation of a prohibition established by CPSC rule or order.*fn10

The threshold inquiry under Cort v. Ash is whether the plaintiff is one of the class for whose especial benefit the statute was enacted. Recent Supreme Court decisions make clear this question is answerable by looking to the language of the statute itself. Cannon v. University of Chicago, supra, 441 U.S. at 689, 99 S. Ct. at 1953; see Transamerica Mortgage Advisors v. Lewis, supra, 444 U.S. at 16, 100 S. Ct. at 245. By its terms, § 1263 does not provide a private judicial remedy to a party injured by the introduction into interstate commerce of a banned or misbranded hazardous substance. The language simply prohibits such introduction. Thus, the language of section 1263 contrasts markedly with that of other statutes which the Supreme Court has stated expressly identify the classes Congress intended to benefit. See Cannon v. University of Chicago, supra, 441 U.S. at 690 n.13, 99 S. Ct. at 1954 n.13. However, recognizing that there is no "talismanic incantation" necessary to create a private right of action, we note that other sections of the FHSA, particularly section 1261(q) (1), which defines a "banned hazardous substance", evince an intent to benefit the buyers of household products, and especially children for whom toys are purchased. Riegel, however, is clearly not within such a class.*fn11 We therefore find the first Cort inquiry weighs against implying a private right of action under section 1263.

The second inquiry under Cort requires an examination of the legislative history to determine whether Congress intended either to create or deny a private remedy. Cannon v. University of Chicago, supra, 441 U.S. at 694, 99 S. Ct. at 1956. Recent cases state this inquiry is the most important.*fn12 See Touche Ross & Co. v. Redington, supra, 442 U.S. at 575, 99 S. Ct. at 2489.

The legislative history of the FHSA and the CPSA*fn13 offers little illumination on whether or not Congress intended to create a private right of action under section 1263.*fn14 The underlying purpose of these Acts, as indicated by their history, was to achieve nationwide uniformity in the regulation of certain hazardous products. To this end, the emphasis of the FHSA and the CPSA was preventive, not remedial. The Acts focus on the prevention of injury, and not the recompense of injury after it has occurred. To fulfill this purpose, Congress created the CPSC as an independent regulatory agency, giving it primary responsibility for enforcement of the statutes, and provided limited private remedies for situations in which the CPSC fails to act upon or denies a petition, or when a rule or order of the CPSC is violated.

The history of the Acts demonstrates Congress' intent that the FHSA enforcement provisions parallel those of the Food, Drug and Cosmetic Act. Section 1263, which specifies that certain acts are prohibited, is "largely patterned after the corresponding section of the Federal Food, Drug and Cosmetic Act." H.R.Rep.No.1861, 86th Cong., 2d Sess. (1960), reprinted in (1960) U.S.Code Cong. & Ad.News 2833, 2840. The FHSA, as originally enacted, focused on the labeling of certain products, with enforcement solely through agency action, as in the Food, Drug and Cosmetic Act. In expanding the FHSA to allow for a direct ban on certain products where a cautionary label would not suffice to protect consumers, the legislative history does not indicate a change in the Congressional intent that enforcement be by the agency.

The third Cort inquiry is whether a private cause of action is "consistent with the underlying purposes of the legislative scheme." To be sure, implication of a private right of action would provide an additional enforcement tool; however, it is not our role to legislate. "The ultimate question is one of congressional intent, not one of whether this Court thinks it can improve upon the statutory scheme that Congress enacted into law." Touche Ross & Co. v. Redington, supra, 442 U.S. at 578, 99 S. Ct. at 2490; Rogers v. Frito-Lay, Inc., 611 F.2d 1074, 1085 (5th Cir.), cert. denied, 449 U.S. 889, 101 S. Ct. 246, 66 L. Ed. 2d 115 (1980) ("To determine the message to be found in the void of express Congressional statement, we resort neither to our own notions of sound policy nor to our concept of what best suits the public weal.").

The Federal Hazardous Substances Act and the Consumer Product Safety Act contain a comprehensive set of administrative and judicial remedies. Section 1264 provides for criminal penalties for violation of the FHSA. Section 1265 provides for a seizure action, and section 1267 provides for injunctive proceedings. Section 1268 provides that all criminal, seizure and injunctive actions be brought "by and in the name of the United States." Section 2059 provides for petitions to the CPSC for a product safety rule, and for a civil action if the CPSC fails to act on or denies the petition. Section 2069 grants the CPSC the authority to proceed administratively for the purpose of assessing civil penalties. Advance Machine Co. v. Consumer Product Safety Commission, 3-80 Civ. 372 (D.Minn. March 6, 1981). Section 2070 provides for criminal penalties for violation of the CPSA, and section 2071 provides for injunctive enforcement and seizure actions under the CPSA. Section 2072 provides for private suits for damages due to the violation of any CPSC rule or order. Section 2073 provides for private suits to enforce any CPSC rule or order by injunction.

The Acts give the CPSC a broad range of enforcement powers to implement the statutory purposes. Implicit in this enforcement scheme is the need of the CPSC to evaluate the exercise of its enforcement power in light of a broad range of policy considerations, particularly the development of a coordinated regulatory program. Because litigants in pursuit of a private remedy are unconstrained by institutional policies of uniformity, they could, by instituting multiple lawsuits, undermine the Acts' goal of a coordinated regulatory program. Private litigation could deprive the CPSC of an opportunity to build upon the foundation provided by the FHSA and the CPSA in establishing a sound and strong federal regulatory policy governing hazardous substances. Specifically, such litigation would diminish the discretion of the CPSC to decide whether a substance can be made safe merely through cautionary labeling or must be banned from the marketplace. Thus, we conclude that the agency should determine whether a substance is a "banned hazardous substance" for purposes of prohibition under section 1263.

As was stated by this circuit in denying a private right of action under section 404(b) of the Federal Aviation Act, 49 U.S.C. § 1374(b):

The implication of a private right to sue for damages does not inevitably complement the work of the agency charged by Congress with the enforcement of a statute. Private litigation tends to transfer regulatory interpretation and discretion from the agency to the courts, which are ill-equipped to undertake the burdens thus imposed upon them. Inconsistency in enforcement may well ensue. Moreover, the deterrent effect of damage litigation is largely incidental, and Congress may conclude that statutory compliance will be better achieved by more efficient and less expensive means.

Caceres Agency, Inc. v. Trans World Airways, Inc., 594 F.2d 932, 934 (2d Cir. 1979) (citations omitted).

We note that "over the last decade rule-making has been increasingly substituted for adjudication as a regulatory technique, with the support and encouragement of courts, at least where the regulation involves specialized scientific knowledge." National Nutritional Foods Association v. Weinberger, 512 F.2d 688, 698 (2d Cir.), cert. denied, 423 U.S. 827, 96 S. Ct. 44, 46 L. Ed. 2d 44 (1975); see NLRB v. Wyman-Gordon Co., 394 U.S. 759, 89 S. Ct. 1426, 22 L. Ed. 2d 709 (1969); National Association of Pharmaceutical Manufacturers and National Pharmaceutical Alliance v. Food and Drug Administration, 637 F.2d 877, at 881 (2d Cir. 1981). This preference for rule-making results from a recognition of the value of agency expertise. Here, regulation of hazardous substances is a subject which benefits greatly from the specialized knowledge of the CPSC by virtue of its sophistication and experience in this area. As this circuit has pointed out:

the case-by-case adversary proceeding has frequently proved to be an unsuitable method of enforcing the law, since it often resolves narrow issues of importance only to the immediate adversaries rather than broad questions of interest to the industry or the public. The rule-making proceeding, on the other hand, provides the agency with an opportunity first to receive a wide spectrum of views proffered by all segments affected by the proposed rule (e. g., manufacturers, vendors, consumers) and then in a legislative fashion to consider and choose from several alternatives or options rather than limit its decisions to narrow issues controlling a particular case.

National Nutritional Foods Association v. Weinberger, supra, 512 F.2d at 698.

Moreover, implying a private right of action under § 1263 would be inconsistent with the statutory scheme as evidenced by sections 2058, 2072 and 2073. A suit directly under section 1263 would allow a consumer to bypass the CPSC, a result not intended by Congress in light of the detailed consumer petition provisions of section 2058 and the private remedies under sections 2072 and 2073 for failure to comply with a CPSC rule or order.

Recently, Congress amended 28 U.S.C. § 1331 to eliminate the $10,000 amount in controversy requirement for all cases "aris(ing) under the Constitution, laws, or treaties of the United States." However, Congress specifically retained the $10,000 amount in controversy requirement for suits under § 2072. See note 9 supra. Implying a private right of action under § 1263 may allow plaintiff to defeat this jurisdictional requirement, thus frustrating the intent of Congress that only private damage suits under the CPSA which involve more than $10,000 in controversy be litigated in federal court.

Finally, under the fourth Cort inquiry, plaintiff's claims, grounded in product liability, negligence and breach of warranty, are traditionally the concern of state law. Plaintiff's state remedies are no less viable because the products may also be regulated under the FHSA or the CPSA. See 15 U.S.C. § 2072(b). Nor will relegation of plaintiff to state law remedies frustrate any statutory purpose or national interest. Compare J. I. Case v. Borak, 377 U.S. 426, 84 S. Ct. 1555, 12 L. Ed. 2d 423 (1964) (private cause of actions implied when relegating the litigants to a state remedy would frustrate the purpose of § 14(a) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78n(a)). Therefore, the fourth Cort factor militates against implying a private cause of action under section 1263.*fn15

Thus, under the Cort analysis, we conclude that it would be inappropriate to imply a private right of action under § 1263 in favor of plaintiff.

2. Section 1274

Plaintiff also argues that a private right of action should be implied under section 1274 to compel defendant to repurchase the TRIS-treated material sold to plaintiff.

Section 1274 provides, in relevant part, that:

(a) In the case of any article or substance sold by its manufacturer, distributor, or dealer which is a banned hazardous substance (whether or not it was such at the time of its sale), such article or substance shall, in accordance with regulations of the Secretary, be repurchased as follows:

(1) The manufacturer of any such article or substance shall repurchase it from the person to whom he sold it

(2) The distributor of any such article or substance shall repurchase it from the person to whom he sold it

(3) In the case of any such article or substance sold at retail by a dealer, if the person who purchased it from the dealer returns it to him, the dealer shall refund the purchaser the purchase price paid for it and reimburse him for any reasonable and necessary transportation charges incurred in its return.

In deciding whether a private party can proceed directly under section 1274 to enforce repurchase, much of the analysis of whether a private cause of action should be implied under section 1263 is also applicable here.*fn16

Plaintiff is a member of the class for whose especial benefit section 1274 was enacted. In enacting this section, Congress was primarily concerned with the allocation of the economic burden which would result from the banning of a product.*fn17 Congress intended that the party responsible for introducing the product into commerce bear the ultimate loss, thus providing an incentive to manufacturers to produce safe goods.

Unlike section 1263, section 1274 is not a general prohibition of conduct. Rather, this section sets forth the chain of repurchase to be followed once a product is determined to be a "banned hazardous substance." Thus, section 1274 specifies a well-defined class of persons to which it applies. Plaintiff, by falling within this chain of repurchase, is therefore a member of the class for whose benefit the statute was enacted.

We turn next to a determination whether Congress intended to create or deny a private remedy. The legislative history of section 1274 indicates the concern of Congress regarding "who should bear the cost for the losses incurred by the removal of those defective products which happen to get into the stream of commerce before they are detected." Remarks of Senator Prouty, 115 Cong.Rec. 17761 (1969).

Plaintiff argues that the following statements evidence an intent on the part of Congress to create a private right of action.

The bill also provides that in the case of a banned item, the manufacturer would have to repurchase the items from the retailers. This protects the retail store owner from being stuck with unsellable stock, and places the loss where it properly belongs on the manufacturer of the dangerous toy.

Remarks of Rep. Keith, 115 Cong.Rec. 24347 (1969).

Another feature of this bill which should have a dampening effect on those who would knowingly sell dangerous products is the requirement for repurchase. It starts at the top and extends down to the ultimate purchaser. The buyer of the article may return it to his retailer who must repurchase it. The retailer then may do the same with his distributor, who may in turn make his appropriate claim on the manufacturer.

Remarks of Rep. Springer, 115 Cong.Rec. 24347 (1969). These statements, and those of Senator Prouty,*fn18 do no more than point out the scope of the repurchase obligation.

Although the scope of the repurchase obligation is clear, the legislative history does not indicate who may enforce this provision. As originally proposed, section 1274 appears to have been self-executing, such that it would take effect "immediately" upon a finding by the secretary that an article was a "banned hazardous substance."*fn19 In enacting section 1274, however, Congress deleted the word "immediately" and provided that repurchase be "in accordance with regulations of the secretary." While no reason is stated for the change, given the complexity of relationships between manufacturers, distributors, and retailers, it appears Congress believed a self-executing repurchase provision would prove unworkable. Thus, Congress intended that the repurchase obligation be initiated only upon action by the Secretary. This is wholly consistent with the statutory purpose that enforcement of the Acts commence with agency action. Congress intended that the agency responsible for determining whether a substance is hazardous and enforcing any ban, would also define and order any repurchase.

Moreover, in sections 2072 and 2073 Congress expressly provided private parties with the right to sue in federal court once a CPSC order requiring repurchase is violated. Thus, the existence of private suits under sections 2072 and 2073 and the change in the language of the section 1274 indicate an intent to deny direct suits under section 1274.

Plaintiff suggests a number of policy reasons to support its argument that a private right of action under § 1274 is consistent with the underlying purpose of the legislative scheme. Plaintiff argues that a private remedy will encourage a manufacturer to comply with its obligation to repurchase, deter the sale of dangerous products by making it unprofitable to do so, and place the economic loss on the party responsible for its introduction into commerce. However, these goals can be accomplished through the express remedies of the FHSA and the CPSA. The commission's criminal, civil penalty, seizure, and injunctive powers, the consumer petition provisions, as well as the private remedy and injunctive provisions for a knowing violation of a CPSC rule or order all serve to encourage repurchase, to deter the sale of dangerous products, and to place the economic loss on the responsible party. Moreover, private actions directly under section 1274 may lead to the imposition of inconsistent repurchase obligations.

Plaintiff also asserts that CPSC's limited resources make necessary a private remedy under § 1274 because "it would be impossible for the CPSC to commence enough suits on behalf of private parties to enforce this section in a fair or consistent manner." This section, however, can be enforced by private parties under sections 2072 and 2073 once the CPSC issues a rule or order finding a product to be a "banned hazardous substance" and orders repurchase. And, as Judge Mulligan has stated:

Whatever force this argument might once have had, see J. I. Case Co. v. Borak, supra, 377 U.S. at 432, 84 S. Ct. 1555, (at 1559) is seriously undermined by the Court's observation in Piper that "institutional limitations alone do not lead to the conclusion that any party should have a cause of action for damages." 430 U.S. at 41, 97 S. Ct. at 949. The argument that a regulatory agency is confessedly unable properly to regulate as charged by Congress and detailed by its own regulations, and that therefore the federal courts should find a damage remedy implicit in an act which studiously avoided giving one to the class sought to be represented here, is simply unpersuasive."

Redington v. Touche Ross & Co., 592 F.2d 617, 633-34 (2d Cir. 1978) (Mulligan, J., dissenting), rev'd, 442 U.S. 560, 99 S. Ct. 2479, 61 L. Ed. 2d 82 (1979) (footnote omitted). Therefore, private suits under section 1274 to enforce repurchase would be inconsistent with the statutory scheme.

The analysis of the fourth Cort inquiry under section 1263 is equally applicable here. Plaintiff's claims are of the type traditionally the concern of state law.

Finally, when Congress has intended that there be private enforcement of a repurchase provision, it has explicitly so stated. For example, in the National Traffic and Motor Vehicle Safety Act of 1966, 15 U.S.C. §§ 1381 et seq., Congress explicitly provided distributors and dealers with a private right of action if a manufacturer or distributor refused to comply with the repurchase or repair provisions of the Act. See 15 U.S.C. § 1400(b).*fn20

Thus, under the Cort analysis, we conclude that it would be inappropriate to imply a private right of action under § 1274.

D. Pendent Jurisdiction

The court below, having concluded that plaintiff had no private right of action under the Federal Hazardous Substances Act, correctly dismissed the plaintiff's state law claims. Without a surviving federal claim, pendent jurisdiction cannot be relied upon to sustain federal jurisdiction over state claims. IIT v. Vencap, Ltd., 519 F.2d 1001, 1015 (2d Cir. 1975); see United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 1139, 16 L. Ed. 2d 218 (1966).

The judgment of the district court is affirmed.


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