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Leachco, Inc. v. Consumer Product Safety Commission.

No. 22-7060. 6/4/2024. E.D.Okla. Judge Ebel. Administrative Complaint—Preliminary Injunction—Irreparable Harm—Unconstitutionally Structured Agency.

June 4, 2024

Leachco, Inc. manufactures and markets various products, including the “Podster,” an infant lounger that was involved in two incidents resulting in an infant’s death. The Consumer Product Safety Commission (CPSC) authorized the issuance of an administrative complaint against Leachco alleging that the Podster presents a “substantial product hazard” under 15 USC § 2064. Leachco then filed a complaint in district court for injunctive and declaratory relief against the CPSC and its commissioners asserting, as relevant here, that the removal protections for CPSC commissioners and for administrative law judge (ALJ) Young—the presiding officer in Leachco’s proceedings—violate the separation of powers and Article II of the US Constitution. Leachco also moved for a preliminary injunction under Fed. R. Civ. Proc. 65(a) to prevent the CPSC from continuing its administrative proceeding against Leachco during this litigation. The district court denied the motion on the ground that, even if Leachco’s constitutional arguments were meritorious, the alleged constitutional violations were insufficient to establish that Leachco would suffer irreparable harm without the injunction.

On appeal, Leachco argued that it is entitled to a preliminary injunction because the CPSC adjudication irreparably harms it by (1) causing reputational and economic harm and (2) subjecting it to an administrative proceeding carried out by an unconstitutionally structured agency. Leachco maintained that the CPSC is unconstitutionally structured because the provision regarding removal of CPSC officers and ALJ Young violates Article II and the separation of powers by restricting the president’s power to remove CPSC commissioners for neglect of duty or malfeasance in office, and by restricting the ALJ’s removal based on a finding of good cause. As relevant here, to obtain a preliminary injunction, the movant must show that it would suffer irreparable harm if the injunction was denied. Leachco did not assert reputational and economic harm before the district court and failed to assert how this alleged harm would survive plain error review, so it waived the first argument. As to the alleged constitutional injury, Tenth Circuit precedent establishes that violations of certain individual constitutional rights alone can constitute irreparable harm, but violations of the Constitution’s separation of powers provisions do not. And under current US Supreme Court precedent, succeeding in a constitutional challenge to an agency official’s removal protections is insufficient, by itself, to warrant relief from proceedings before that agency official. Rather, the plaintiff must show that the unconstitutional removal protections made a difference in its case. Here, Leachco failed to show that, but for the allegedly unconstitutional removal provisions, the CPSC commissioners or ALJ Young would have been removed; the CPSC proceedings against it would not be occurring; or the proceedings would be different. Therefore, Leachco failed to establish that it would suffer future irreparable harm if the preliminary injunction was denied. Accordingly, even assuming that Leachco established that the removal protections for CPSC commissioners and ALJs are unconstitutional, it failed to establish entitlement to a preliminary injunction.

The denial of the preliminary injunction was affirmed.

The full opinion is available at

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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