for Review of the Consumer Products Safety Commission (CPSC
No. CPSC 2012 0050)
C. Japha, Law Offices of David C. Japha, P.C., Denver,
Colorado, for Petitioner.
Tenny (Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, Adam C. Jed, and Mark R. Freeman, Attorneys, on the
brief) U.S. Department of Justice, Washington, D.C., for
GORSUCH, EBEL, and BACHARACH, Circuit Judges.
Zen Magnets, LLC ("Zen") challenges a regulation
promulgated by Respondent Consumer Product Safety Commission
("the Commission") restricting the size and
strength of the rare earth magnets that Zen sells.
See Final Rule: Safety Standard for Magnet Sets, 79
Fed. Reg. 59, 962 (Oct. 3, 2014) (codified at 16 C.F.R.
§§ 1240.1-1240.5). We conclude that the
Commission's prerequisite factual findings, which are
compulsory under the Consumer Product Safety Act, 15 U.S.C.
§§ 2051-2089, are incomplete and inadequately
explained. Accordingly, we VACATE and REMAND to the
case concerns sets of small, high-powered magnets
("magnet sets") that users can arrange and
rearrange in various geometric designs. The component magnets
are unusually small (their diameters are approximately five
millimeters) and unusually powerful (due to rare earth metal
cores, their magnetic flux index ranges from 400 to 500
kG2mm2). A set typically comprises on the order of 100 to 200
identical spherical magnets, coated in reflective silver or
other bright colors. Magnets of this type were introduced to
the United States circa 2009. They have since been marketed
and sold to consumers-by Zen and other distributors-as
desktop trinkets, stress-relief puzzles, and toys, and
apparently also for educational and scientific purposes.
the strength of these magnets is part of their appeal, it can
also pose a grave danger when the magnets are misused.
Specifically, if two or more magnets are ingested-a
temptation to which children are especially at risk-they can
cause serious damage to intestinal tissue that becomes
tightly clamped between them. Attendant medical consequences
can include hospitalization and surgery for such injuries as
perforations, infections, gastrointestinal bleeding, and
tissue death. The danger is compounded when parents and
medical personnel remain unaware of the type of magnets
ingested and their heightened risks.
danger caught the attention of the Consumer Product Safety
Commission. The Commission is an independent regulatory
agency that administers and enforces the Consumer Product
Safety Act ("the Act"), 15 U.S.C. §§
2051-2089, a primary purpose of which is "to protect the
public against unreasonable risks of injury associated with
consumer products, " id. § 2051(b)(1). In
pursuit of that goal, the Commission is authorized to
"promulgate consumer product safety standards"
establishing performance or warning requirements for consumer
products, id. § 2056(a), as well as to ban
hazardous products altogether, id. § 2057.
Commission's regulatory approach towards magnet sets
progressed as follows. In 2008, Congress adopted as mandatory
safety standards certain requirements developed by the
American Society for Testing and Materials ("ASTM")
to address hazards associated with children's toys.
See generally 15 U.S.C. § 2056b; AR 142. With
respect to magnets, those requirements prohibit any product
"designed, manufactured, or marketed as a plaything for
children under 14 years of age" from containing a loose
magnet that (1) has a flux index greater than 50 kG2mm2 and
(2) is small enough to fit within a standardized "small
parts cylinder." ASTM International Standard F963-11
Consumer Safety Specifications for Toy Safety §§
3.1.37 (definition of "hazardous magnet"), 3.1.81
(definition of "toy"), 4.38-4.38.1 (prohibition of
hazardous magnets in toys), and Fig. 3 (defining the small
parts cylinder's dimensions to be a diameter of 31.7 mm
with a height that, due to a sloped bottom surface, ranges
from 25.4 mm on one side to 57.1 mm on the opposite
side). The purpose of those restrictions is to
ensure that permissible magnets are either large enough to
discourage ingestion or weak enough to avoid tissue
strangulation upon ingestion. See ASTM F963-11 4.38;
cf. Final Rule: Safety Standard for Magnet Sets, 79
Fed. Reg. at 59, 968.
2011, in response to reports of injured children, Commission
staff began evaluating whether the magnet sets currently on
the market complied with ASTM F963 ("the toy
standard"). The Commission found that the individual
magnets in those sets tended to be ten times more
powerful-or, alternatively, six times smaller-than is
permissible to market to children under the toy standard.
See ASTM F963-11 §§ 3.1.37, 4.38-4.3.81;
Final Rule: Safety Standard for Magnet Sets, 79 Fed. Reg. at
59, 976-77. Accordingly, Commission staff issued Notices of
Noncompliance to companies that labeled or marketed these
powerful magnet sets to appeal to children younger than
fourteen years old, and warned other firms not to market
their sets to children below that age.
distributors took steps to comply with the toy standard,
including implementing labeling enhancements and marketing
restrictions. However, "into spring 2012, staff
continued to identify additional firms offering [magnet sets]
on the Internet with labeling and marketing violations."
Proposed Rule: Safety Standard for Magnet Sets, 77 Fed. Reg.
53, 781, 53, 782 (proposed Sept. 4, 2012) (to be codified at
16 C.F.R. §§ 1240.1-1240.5). Moreover, reports of
child injuries from magnet ingestion continued.
Commission stepped up its enforcement efforts. In May 2012,
the Commission required the thirteen leading magnet set
distributors to report any information of which they were
aware reasonably supporting the conclusion that their magnets
did not comply with an applicable safety standard, contained
a defect, or created an unreasonable risk of serious injury.
See 15 U.S.C. § 2064(b) (requiring distributors
to report potential noncompliance with safety standards,
defects, and risk of serious injury). Based on that
information, by July 2012 Commission staff had negotiated
agreements with ten of those companies to cease importation
and distribution of magnet sets. Commission staff then
initiated administrative complaints against the remaining
three companies (including Zen), arguing that their magnet
sets constituted "substantial product hazards" that
must be prohibited and recalled because they failed to comply
with the toy standard and/or contained a product
defect. See 15 U.S.C. § 2064(a)
(defining "substantial product hazard" to be a
product that either (1) fails to comply with an applicable
safety standard or (2) contains a product defect), (c)
(authorizing the Commission to order a seller to cease
distributing and to recall products that constitute a
"substantial product hazard").
months after eliminating ten of the leading magnet set
distributors, the Commission proposed a new safety standard
aimed at regulating the size and strength of all magnet sets.
See Proposed Rule: Safety Standard for Magnet Sets,
77 Fed. Reg. 53, 781. In effect, the proposed standard
extended the size and strength restrictions applicable to
children's toys under ASTM F963 to magnets marketed,
intended, or used for adult entertainment. After receiving
comments and holding a public hearing, the Commission
promulgated the proposed rule as a final safety standard on
October 3, 2014. See Final Rule: Safety Standard for
Magnet Sets, 79 Fed. Reg. at 59, 962, 59, 966-72.
final rule requires that, "Each magnet in a magnet set .
. . that fits completely within the cylinder described in 16
CFR 1501.4 must have a flux index of 50 kG2 mm2 or less when
tested in accordance with the method described in §
1240.4." 16 C.F.R. § 1240.3. The referenced
cylinder is the same small parts cylinder as that used in the
toy standard. Compare 16 C.F.R. § 1501.4
with ASTM F963-11 § 3.1.37 and Fig. 3. And the
flux index limit of 50 kG2 mm2 is the same limit as that used
in the toy standard. See 16 C.F.R. § 1240.4
(incorporating the flux index measurement procedure of ASTM
F963-11 §§ 8.24.1-8.24.3). As a result, the primary
difference between the two standards is their scope of
intended consumers. Unlike the toy standard, the final rule
is not limited to magnets designed or marketed as toys for
children under fourteen years of age, but rather applies to
all magnet sets that meet the following definition: "Any
aggregation of separable magnetic objects that is a consumer
product intended, marketed or commonly used as a manipulative
or construction item for entertainment." 16 C.F.R. §
the only remaining importer and distributor of the magnet
sets targeted by the final rule. Over the years, Zen has made
efforts to comply with the toy standard by implementing
fourteen-and-under age restrictions and placing warnings on
its website and packaging, as well as by imposing sales
restrictions on its retail distributors. Its magnet sets,
however, do not comply with the strength and size
restrictions of the final rule set forth at 16 C.F.R. §
1240.3. Accordingly, Zen seeks review of that safety standard
pursuant to 15 U.S.C. § 2060(a), which provides that any
person adversely affected by a rule promulgated by the
Commission "may file a petition with the United States
court of appeals . . . for the circuit in which such person .
. . resides or has his principal place of business for
judicial review of such rule."
jurisdiction pursuant to 15 U.S.C. § 2060(c), we review
the magnet set safety standard in accordance with the
provisions for judicial review set forth in the
Administrative Procedures Act ("APA"), 5 U.S.C. ch.
7. See 15 U.S.C. § 2060(c) ("[T]he court
shall have jurisdiction to review the consumer product safety
rule in accordance with chapter 7 of title 5, and to grant
appropriate relief . . . as provided in such chapter . . .
."). Accordingly, "our review is 'very
deferential to the agency.'" Andalex Res., Inc.
v. Mine Safety & Health Admin., 792 F.3d 1252, 1257
(10th Cir. 2015) (quoting Ron Peterson Firearms, LLC v.
Jones, 760 F.3d 1147, 1161 (10th Cir. 2014)).
Notwithstanding that deferential standard, we conclude that
the Commission failed to meet the Consumer Product Safety
Act's requirements for issuing a safety standard, for the
reasons explained below.
The Consumer Product Safety Act
speaking, the Act sets forth a two-step process for
promulgating a safety standard. See D. D. Bean & Sons
Co. v. Consumer Prod. Safety Comm'n, 574 F.2d 643,
649 (1st Cir. 1978). First, the Commission must
"consider" and "make appropriate
findings" regarding the social and economic costs and
benefits of the rule. See 15 U.S.C. §
2058(f)(1), (2). Specifically, the Commission must make
findings identifying (1) the degree and nature of the risk of
injury sought to be prevented; (2) the approximate number and
type of products subject to the rule; (3) the public's
need for those products, and the probable effect of the rule
on the utility, cost, and availability of the products; and
(4) any means of reducing the risk of injury while minimizing
adverse effects on competition or other commercial practices.
the Commission must balance the costs and benefits identified
in its findings to determine whether a safety standard is
justified. See 15 U.S.C. § 2058(f)(3).
Specifically, the Commission can only promulgate a safety
standard if it reaches and articulates four conclusions: (1)
"that the rule . . . is reasonably necessary to
eliminate or reduce an unreasonable risk of injury"; (2)
that the . . . rule is in the public interest"; (3)
"that the benefits expected from the rule bear a
reasonable relationship to its costs"; and (4)
"that the rule imposes the least burdensome requirement
which prevents or adequately reduces the risk of injury for
which the rule is being promulgated." See 15
U.S.C. § 2058(f)(3)(A), (B), (E), (F).
then, the determination "involves 'a balancing test
like that familiar in tort law: The regulation may issue if
the severity of the injury that may result from the product,
factored by the likelihood of the injury, offsets the harm
the regulation imposes upon manufacturers and
consumers.'" Southland Mower Co. v. Consumer
Prod. Safety Comm'n, 619 F.2d 499, 508-09 (5th Cir.
1980) (quoting Aqua Slide 'N' Dive Corp. v.
Consumer Prod. Safety Comm'n, 569 F.2d 831, 839 (5th
Cir. 1978)); see also 15 U.S.C. § 2056(a)
(requiring that "[a]ny requirement of such a [safety]
standard shall be reasonably necessary to prevent or reduce
an unreasonable risk of injury associated with such
provides that a court may not uphold a safety standard unless
the Commission's statutorily required findings and
conclusions are "supported by substantial evidence on
the record taken as a whole." 15 U.S.C. § 2060(c).
Substantial evidence is "such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion." Fowler v. Bowen, 876 F.2d 1451,
1453 (10th Cir. 1989) (quoting Richardson v.
Perales, 402 U.S. 389, 401 (1971) ("The [Supreme]
Court has adhered to that definition in varying statutory
situations.")); see also Am. Textile Mfrs. Inst.,
Inc. v. Donovan, 452 U.S. 490, 522-23 (1981) (adhering
to that definition when reviewing whether safety standards
issued by the Occupational Safety and Health Administration
were "reasonably necessary" under 29 U.S.C. §
652(8)). A court may "neither reweigh the evidence nor
substitute [its] judgment for that of the agency."
Andalex Res., 792 F.3d at 1257 (quoting Branum
v. Barnhart, 385 F.3d 1268, 1270 (10th Cir. 2004)).
Nonetheless, "[t]he substantiality of evidence must take
into account whatever in the record fairly detracts from its
weight." Norris v. NLRB, 417 F.3d 1161, 1168
(10th Cir. 2005) (internal quotation marks omitted).
The Commission's findings
instance, the Commission's rulemaking analysis fails at
the first step of the Act's two-step process: the initial
cost and benefit findings. Specifically, the Commission's
analysis neglected to address critical ambiguities and
complexities in the data underpinning the Commission's
findings as to (1) the degree of the risk of injury caused by
magnet sets, and (2) the public's need for the sets and
the rule's effect on their utility and availability,
see 15 U.S.C. § 2058(f)(1)(A), (C). As a result
of those omissions, the Court is unable to ascertain whether
the Commission's findings meet the substantial evidence
standard-let alone to proceed to the next step of reviewing
the Commission's balancing of the safety standard's
costs and benefits.
Risk of injury
analyzing a nationwide sampling of emergency room injury
reports, the Commission estimated that the final rule would
prevent approximately 900 magnet set-ingestion injuries
annually, for a savings of $28.6 million. See Final
Rule: Safety Standard for Magnets, 79 Fed. Reg. at 59,
978-80; 16 C.F.R. § 1240.5(e)(2), (3). The
Commission's benefit analysis, however, gives short
shrift to two aspects of the injury data set that cast doubt
on the Commission's findings.
first problem stems from the data set's time frame. In
performing its cost-benefit analysis, the Commission chose to
rely on data spanning January 2009 through June 2012.
See Final Rule: Safety Standard for Magnets, 79 Fed.
Reg. at 59, 978-80; 16 C.F.R. § 1240.5(e)(2), (3). But
that data set does not reflect the subsequent significant
market changes triggered by the Commission's compliance
activities beginning in May 2012. As of July 2012, ten of the
thirteen largest distributors had agreed, "at
[Commission] staff's request, " to stop selling and
start recalling magnet sets; by December 2012, the dominant
firm in the market had ceased operating. Id. at 59,
964, 59, 978. Sales of magnet sets dropped commensurately (in
the Commission's words, they dropped
"dramatically"). See id. at 59, 978
("[A]s a result of these actions and events, sales of
the subject magnet sets currently are dramatically lower than
they were at the time of the enforcement actions."); 16
C.F.R. § 1240.5(b) (estimating that magnet set sales,
which totaled 2.7 million from 2009 to 2012, dropped to fewer
than 25, 000 per year after 2012).
might be expected, injuries associated with ingestion of
magnets from magnet sets also declined. According to the
Commission's calculations regarding the eighteen months
following June 2012, the estimated number of
emergency room visits due to magnet sets dropped by about 100
incidents a year. See 16 C.F.R. 1240.5(a). Inasmuch
as the Commission estimated the expected useful life of
magnet sets to be about one year, the injury rates appeared
poised to continue to drop. See Final Rule: Safety
Standard for Magnets, 79 Fed. Reg. at 59, 982. Indeed, the
number of incidents reported directly to the Commission
receded from 52 in 2012, to 13 in 2013, to only 2 in 2014.
See id. at 59, 962.
Commission recognized that the decrease in injuries was
"[l]ikely due to [Commission] enforcement and regulatory
activity beginning in mid-2012." Id. It appears
that the Commission's regulatory activity was predicated
at least in part on enforcing the preexisting toy standard,
see id. at 59, 962, 59, 978 n.14 (incorporating
administrative complaint by reference), which prohibits
designing and marketing magnet sets to children, see
ASTM F963-11 §§ 3.1.37, 4.38-4.38.1. Most of the
pre-enforcement reported and estimated injuries concerned
young children. See id. at 59, 964 (stating that
eighty-seven of the 100 incidents reported directly to the
Commission concerned children younger than twelve years old,
and 65% of the estimated injuries involved children between
four and twelve years old). The Commission's benefits
findings, however, do not adequately account for the reduced
injury rate (and therefore reduced need for a new standard)
resulting from its recent apparent enforcement of the
existing safety standard addressed specifically to toys and
general, where there is a known and significant change or
trend in the data underlying an agency decision, the agency
must either take that change or trend into account, or
explain why it relied solely on data pre-dating that change
or trend. See, e.g., Cty. of Los Angeles v.
Shalala, 192 F.3d 1005, 1020-22 (D.C. Cir. 1999)
(remanding a Medicare rate-setting for the agency to explain
why it relied on data collected under its former payment
regime, where more recent data collected under its current
regime showed a marked downward trend in relevant hospital
discharge times); Seattle Audubon Soc. v. Espy, 998
F.2d 699, 703-04 (9th Cir. 1993) (finding that an agency
preparing an environmental impact statement erred in failing
to address an intervening, independent report indicating that
an endangered species' "population [wa]s declining
more substantially and more quickly than previously
Since agencies "have an obligation to deal with newly
acquired evidence in some reasonable fashion, "
Catawba Cnty. v. EPA, 571 F.3d 20, 45 (D.C. Cir.
2009), or to "reexamine" their approaches "if
a significant factual predicate" changes, Bechtel v.
FCC, 957 F.2d 873, 881 (D.C. Cir. 1992), an agency must
have a similar obligation to acknowledge and account for a
changed regulatory posture the agency creates-especially when
the change impacts a contemporaneous and closely related
Portland Cement Ass'n v. EPA, 665 F.3d 177, 187
(D.C. Cir. 2011) (holding that, before issuing a new rule
based on the predicted emissions of certain pollutant
sources, an agency should have considered the effect that a
parallel pending rulemaking would have on those same
emissions). "The refrain that [an agency] must
promulgate rules based on the information it currently
possesses simply cannot excuse its reliance on that
information when its own process [may have] render[ed] it
the downward trend in injury rates is obvious, and appears to
speak directly to the question of whether the new rule is
"reasonably necessary." 15 U.S.C. § 2056(a).
Yet the Commission offered no explanation or rationale for
its apparent assumption that the observed reduction in injury
rates would not endure. Rather, in addressing its decision to
rely solely on pre-enforcement injury data, the Commission
Because [Commission] compliance actions have significantly
altered the state of the market, the environment before these
actions occurred represents the best approximation of how the
market would have operated in the absence of [Commission]
intervention and is the appropriate reference baseline for
evaluating the impact of the rule.
Rule: Safety Standard for Magnet Sets, 79 Fed. Reg. at 59,
978. That conclusory statement is insufficient to fulfill the
Commission's duty to explain why the downward
trend in post-enforcement injury rates was not relevant to
its evaluation of the benefits of the new rule. See
Portland Cement, 665 F.3d at 187; Shalala, 192
F.3d at 1020-21.
Court stands ready and willing to defer to agency expertise
and discretion, properly exercised. See Andalex, 792
F.3d at 1257. But "[i]t is not the role of the courts to
speculate on reasons that might have supported an
agency's decision." Encino Motorcars, LLC v.
Navarro, 136 S.Ct. 2117, 2127 (2016); see
also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)
("We may not supply a reasoned basis for the
agency's action that the agency itself has not
given.'") (quoting SEC v. Chenery Corp.,
332 U.S. 194, 196 (1947)). "Whatever potential reasons
the [Commission] might have given, the agency in fact gave .
. . no reasons at all." Id.
agency may not simply ignore without analysis important data
trends reflected in the record. See Portland Cement,
665 F.3d at 187; Shalala, 192 F.3d at 1020-21. To
the extent the Commission's findings rely solely on
pre-enforcement injury rates, the Commission must offer a
credible record-supported explanation as to why
those rates accurately reflect the benefits of the new
second problem with the Commission's injury findings
arises from the imprecision of the injury report narratives.
The Commission used a keyword search to identify magnet
set-related injuries within a representative sample of
emergency room reports. See Final Rule: Safety
Standard for Magnets, 79 Fed. Reg. at 59, 978. To the
resulting injury count, the Commission applied a cost model
to extrapolate the overall number of injuries
nationwide. See id. at 59, 979. We take issue not
with the Commission's methodology, but rather with the
degree of uncertainty the Commission condoned when
implementing it: According to the Commission, ninety
percent of the injury reports on which it ultimately
relied only "possibly" involved the subject magnets
sets. See id. at 59, 978, 59, 980
("[A]bout 90 percent of the cases upon which the table
[estimating medical costs] was based were described as only
possibly involving the magnets of interest . . . ."),
59, 985 ("[T]here was an annual average of about 929
medically attended magnet ingestions that were defined as at
least 'possibly of interest' during the period from
2009 through June 2012.").
provides that the Commission cannot promulgate a safety
standard unless it concludes "that the rule . . . is
reasonably necessary to eliminate or reduce an unreasonable
risk of injury." 15 U.S.C. § 2058(f)(3)(A).
Underlying findings that peg the risk of injury as a mere
"possibility" provide the Court no assistance in
assessing that conclusion. See Gulf S. Insulation v.
Consumer Prod. Safety Comm'n, 701 F.2d 1137, 1148
(5th Cir. 1983) (finding the Commission failed to show an
unreasonable risk of injury because the equivocal predictions
that the increased cancer risk could be "up to 51 in a
million, " and that "somewhat less than 20% of the
population may respond" to the given toxicity level,
"provides [the court] no basis for review");
Southland Mower, 619 F.2d at 510 ("Without
reliable evidence of the likely number of injuries that would
be addressed . . ., we are unable to agree that this
provision is reasonably necessary to reduce or prevent an
unreasonable risk of injury."). Almost anything is
"possible." Therefore, the Commission's finding
that 90% of the predicate injuries only "possibly"
involved magnet sets provides the Court with little guidance
as to where, on the spectrum from ninety to 900 annual
injuries, the real injury rate lies.
not decide here what would be an acceptable degree of
uncertainty in a benefits finding; it may vary depending on
the inherent factual uncertainties in a given context.
However, we are confident that mere possibility falls short
of the appropriate standard. See Morall v. Drug Enf't
Admin., 412 F.3d 165, 176 (D.C. Cir. 2005)
("Substantial evidence 'means evidence which is
substantial, that is, affording a substantial basis of fact
from which the fact in issue can be reasonably inferred.
Substantial evidence is more than a scintilla, and must do
more that create a suspicion of the existence of the fact to
be established.'") (quoting NLRB v. Columbian
Enameling & Stamping Co., 306 U.S. 292, 299-300
(1939); Greater Yellowstone Coal., Inc. v. Servheen,
665 F.3d 1015, 1028 (9th Cir. 2011) ("It is not enough
for the [agency] to simply invoke 'scientific
uncertainty' to justify its action.") (citing
State Farm, 463 U.S. at 52); Vera-Villegas v.
I.N.S., 330 F.3d 1222, 1231 (9th Cir. 2003)
("[C]onjecture is not a substitute for substantial
evidence.") (quotation omitted)).
the Commission is certainly free to rely on the emergency
room injury report data set, it may not do so in a way that
cloaks its findings in ambiguity and imprecision, and
consequently hinders judicial review. We leave it to the
Commission to determine whether its methodology and data set
can in fact support a higher standard. We find only that the
Commission's benefits statistics must instill in the
Court a greater degree of confidence in their accuracy than
is currently present here. In so holding, we offer no
opinion on the number of injuries that would support issuance
of a new magnet set safety standard.
The public's need for magnet sets
the Commission's evaluation of the costs of the rule to
magnet distributors was adequate, its evaluation of the costs
to consumers was incomplete. Specifically, the Commission
failed to address an entire aspect of magnet sets'
utility- namely, the public's need for the sets as
scientific and mathematics education and research tools-and
the rule's probable effect on magnet sets'
availability and usefulness for those purposes. See
15 U.S.C. § 2058(f)(1)(C).
comments received by the Commission indicated that teachers
and researchers use magnet sets to model and explain physics,
biology, and geometry concepts. The Commission's
findings, however, contain no substantive discussion of those
uses. The Commission's analysis does not examine how
widespread the claimed uses are, or whether substitute
products, such as larger magnetic spheres or alternative
construction toys, are (or could be made) available to serve
those uses. Instead, the Commission's cost finding
referred only to "some unknown quantity of lost
utility." 16 C.F.R. § 1240.5(e)(6), (h)(2).
though the task may be difficult, the Commission is required
to advance some explanation that allows a reviewing court to
evaluate whether the cost of the lost utility is in fact
outweighed by the benefits of the rule. See Aqua
Slide, 569 F.2d at 840 ("The Commission does not
have to conduct an elaborate cost-benefit analysis. It does,
however, have to shoulder the burden of examining the
relevant factors and producing substantial evidence to
support its conclusion that they weigh in favor of the
standard.") (citation omitted). In this instance, the
Commission abdicated that responsibility by failing to assess
the demand for and usefulness of magnet sets as research and
teaching tools. Without that information, the Court cannot
accurately gauge the full costs of the safety
standard. Cf. id at 839-40 (citing
Forester v. Consumer Prod. Safety Comm'n, 559
F.2d 774, 790-91 (D.C. Cir. 1977) (remanding safety
requirements for bicycles because the "Commission has
evidently not considered the utility of specific items that
will be prohibited by the regulations")).
Zen's remaining arguments
the remainder of Zen's challenges to the rule
unpersuasive. To begin, we do not reach Zen's alternative
argument that the safety standard is in effect a ban. Because
we find the Commission's underlying cost and benefit
findings are inadequate, we have no cause to decide whether,
in the next stage of cost-benefit balancing, the Commission
would be required to meet the arguably higher standard
applicable to bans. See 15 U.S.C. §
2058(f)(3)(C) (requiring, in the case of a ban, that the
Commission find "that no feasible consumer product
safety standard under this chapter would adequately protect
the public from the unreasonable risk of injury associated
with such product").
we find no merit in Zen's contention that the Commission
did not comply with the APA's notice-and-comment
procedures. See 5 U.S.C. § 553(b), (c). Zen
complains it did not receive adequate notice of the scope of
the final rule because it was not given an opportunity to
comment on the Commission's insertion of the phrase
"or commonly used" into the final definition of
subject magnet sets. See 16 C.F.R. § 1240.2(b)
("Magnet set means: Any aggregation of
separable magnetic objects that is a consumer product
intended, marketed or commonly used as a manipulative or
construction item for entertainment . . . .") (emphasis
added). However, "[i]t is a well settled and sound rule
which permits administrative agencies to make changes in the
proposed rule after the comment period without a new round of
hearings." Beirne v. Sec'y of Dep't of
Agric., 645 F.2d 862, 865 (10th Cir. 1981).
primary limitation on that principle is that a final rule
must be a "logical outgrowth" of the proposed rule.
Am. Mining Cong. v. Thomas, 772 F.2d 617, 637 (10th
Cir. 1985). "A final rule qualifies as a logical
outgrowth if interested parties should have anticipated that
the change was possible, and thus reasonably should have
filed their comments on the subject during the
notice-and-comment period." CSX Transp., Inc. ...