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FOUNTAINHEAD GROUP v. CONSUMER PROD. SAFETY COMMN.

December 7, 1981

The FOUNTAINHEAD GROUP, INC., Marimar Manufacturing Company, Inc., D. B. Smith & Company, Inc., and Blue Mountain Products, Inc., Plaintiffs,
v.
CONSUMER PRODUCT SAFETY COMMISSION; Nancy Harvey Steorts, as Chairman of the Consumer Product Safety Commission; Stuart M. Statler, R. David Pittle, Edith B. Sloan, Sam Zagoria, as Commissioners of the Consumer Product Safety Commission; and Todd A. Stevenson, as Freedom of Information Officer of the Consumer Product Safety Commission, Defendants



The opinion of the court was delivered by: MUNSON

MEMORANDUM-DECISION AND ORDER

The plaintiffs have instituted this action for declaratory and injunctive relief to review the defendants' decision to release certain information to the public pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552. The gravamen of their complaint is that the determination by the Consumer Product Safety Commission (Commission) to release certain materials pertaining to the plaintiffs is in violation, inter alia, of the Consumer Product Safety Act (CPSA), 15 U.S.C. § 2051 et seq., and of the Administrative Procedure Act (APA), 5 U.S.C. § 500 et seq. Jurisdiction lies under 28 U.S.C. § 1331.

Presently before the Court is a motion by the plaintiffs Marimar Manufacturing Company, Inc., (Marimar), and D.B. Smith & Company, Inc., (D.B. Smith), *fn1" for a preliminary injunction against the release of this information. For the reasons set forth below, this motion is granted.

 I.

 The following facts emerge from the parties' papers and from the evidentiary hearing held on November 16, 1981.

 The plaintiffs Marimar, D.B. Smith, and Blue Mountain Products, Inc., (Blue Mountain), are wholly owned subsidiaries of the plaintiff The Fountainhead Group, Inc. (Fountainhead). In this regard, Marimar manufactures a line of compressed air sprayers; D.B. Smith distributes these sprayers under its own label, as well as under other labels; and Blue Mountain labels certain sprayers and sells them under the "Parco" label.

 After two investigations of incidents that possibly called into question the safety of the plaintiffs' products, the Commission, on November 6, 1979, initiated an investigation at Marimar's facilities. The investigator for the Commission requested and received copies of all accident reports and complaints made by customers to D.B. Smith, which included correspondence from consumers, distributors and retailers, and copies of various internal materials, which included information with respect to the thickness of the bottom of the plaintiffs' compressed air sprayers. Before turning over all such information, the plaintiffs orally advised the investigator that they were claiming the information to be confidential commercial information. On this score, the plaintiffs had made no attempt to verify the accuracy of all the reported accidents, because they had turned the reports immediately over to their insurance carriers. Additionally, to date the plaintiffs have continued to supply the Commission with any accident reports that they might have received; again, the plaintiffs have not verified the accuracy of any reported incidents.

 Following the inspection by the Commission investigator, in a letter dated November 16, 1979, Marimar and D.B. Smith expressed to the Commission their willingness to cooperate in any investigation to determine whether one of their products posed a safety hazard, and their willingness to discuss with the Commission an appropriate press release. In this same letter, the companies also requested

 
pursuant to 5 U.S.C. § 552(b)(4) and 16 C.F.R. § 1015.18, that the names and addresses of our customers, the number of sprayers manufactured by Marimar and sold by Smith under any label, and our testing results be exempt from disclosure as confidential commercial information.

 In May, 1980, the plaintiffs voluntarily recalled on a nationwide basis the possibly defective sprayers. The recall was accomplished, in part, by a joint press release issued by the Commission and the plaintiffs, by a point-of-purchase poster, by listings in certain national lawn and garden magazines, and by mailings to the plaintiffs' customers.

 In the fall of 1980, the Commission informed the plaintiffs that it had received several requests under the FOIA for the disclosure of information regarding the plaintiffs' sprayers. The Commission submitted to the plaintiffs the pertinent material that possibly fell within the scope of the FOIA requests, and invited the plaintiffs to comment on the accuracy of the information, pursuant to Section 6(b)(1) of the CPSA, 15 U.S.C. § 2055(b)(1), and to interpose any claims of confidentiality against the disclosure of possible proprietary information, pursuant to exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4), and to Section 6(a)(2) of the CPSA, 15 U.S.C. § 2055(a)(2).

 Thereafter, in January and March, 1981, the plaintiffs' counsel raised specific objections to the disclosure of certain documents, on the ground that these materials contained information whose accuracy had not been established or which pertained to confidential proprietary matters or to personal information about users of their products. Furthermore, the plaintiffs' counsel contended that because their clients had voluntarily recalled the affected sprayers, disclosure of the accident reports would not be reasonably related to the purposes of the CPSA.

 During the summer of 1981, the Commission held a meeting for the purpose of reviewing draft proposed regulations regarding the disclosure of documents under the FOIA. Although, to date, the Commission has not promulgated any disclosure regulations, the agency has adopted several staff guidelines on this subject that follow the proposed rules. These guidelines require, inter alia, that a manufacturer or labeler be afforded an opportunity to comment on the materials; that any such comments accompany the released documents; and that the disclosed materials be placed in context through the use of the appropriate explanatory language to the effect that although the Commission generally has not independently investigated all reported accidents, the Commission believes the reports to be generally accurate descriptions of individuals' beliefs about the information they report and valuable indications of product hazards. With respect to the adoption of these guidelines, the Commission concluded that while it had insufficient resources to conduct in-depth investigations of all consumer complaints responsive to FOIA complaints, investigations would be made of reports which, on their face, suggested inaccuracy, and of reports to which a manufacturer or labeler submitted information suggesting inaccuracy. Additionally, the Commission expressed its belief that the withholding of consumer complaints would be inconsistent with its statutory responsibilities. Furthermore, the Commission indicated that the public has a right of access to documents upon which decisions are based, in order that the public may evaluate whether the agency is complying with its obligations regarding public safety and health. Finally, the Commission delegated authority to an Information Group to make decisions in particular cases regarding disclosure.

 With these guidelines of the Commission, the Information Group met and assessed the plaintiffs' objections to the disclosure of information regarding their product. In reaching its decision to release certain materials, the Group first decided that several inaccuracies noted by the plaintiffs should be corrected prior to disclosure. The Group also observed that a follow-up on-site investigation had confirmed the results of an earlier in-depth investigation. Additionally, the Group determined that information regarding the thickness of the bottom of the plaintiffs' product was not confidential commercial material, because, in the view of the Group, any purchaser of the product could ascertain the thickness. Moreover, the Group concluded that disclosure of three in-depth investigations and of consumer complaints that had not been investigated, along with the issuance of the Commission's suggested explanatory statement, ...


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