Auto-Mark, Inc. v. Consumer Product Safety Commission

Background

Auto-Mark, Inc., doing business as Sea Foam Sales Company (Sea Foam), is a Minnesota company that has manufactured fuel-additive and lubricant products since 1942. Its flagship product, Sea Foam Motor Treatment, is poured into engine fuel tanks or oil reservoirs to clean deposits and improve engine performance. The Environmental Protection Agency (EPA) classifies Sea Foam's products as fuel additives, not fuels, and maintains separate registries for each. Sea Foam's products cannot substitute for gasoline or diesel and are not used to produce heat or power independently.

In 2020, Congress passed the Portable Fuel Container Safety Act of 2020 (the Act) to address deaths and injuries from 'flame jetting'—the dangerous propagation of flame back into a portable fuel container that can cause an explosion. The Act directed the Consumer Product Safety Commission (the Commission) to require 'flame mitigation devices' on portable fuel containers, defined as containers intended for 'flammable liquid fuels with a flash point of less than 140 degrees Fahrenheit, including gasoline, kerosene, diesel, ethanol, methanol, denatured alcohol, or biofuels.' The Act also permitted the Commission to adopt an existing voluntary industry standard developed by ASTM International rather than conducting a full notice-and-comment rulemaking.

In January 2023, the Commission published a 'Determination' formally adopting ASTM standard F3429 as the governing rule. Within the Determination, in response to a commenter's question about whether fuel additives qualify as 'fuels,' the Commission stated that any 'liquid with a flash point less than 140 degrees Fahrenheit intended to be used as, or in, a fuel mixture to support combustion, is a fuel' under the Act. The Determination took effect July 12, 2023.

Sea Foam had concluded that the Act did not apply to its products and was unaware of any flame-jetting incident involving its products in over 80 years of operation. After learning of the Determination, Sea Foam wrote to the Commission in May 2023 seeking clarification and arguing that fuel additives were not covered. The Commission's Office of Compliance and Field Operations (Compliance Office) responded in a May 2023 Letter stating that the rule applied to 'fuel additives and engine cleaners' and warning that non-compliance could result in civil or criminal penalties, while granting a one-year enforcement extension. After Sea Foam wrote again in May 2024, a July 2024 Letter extended the enforcement deadline to July 12, 2025, declined to remove fuel additives from the rule's scope, and again warned of possible penalties. Sea Foam filed this lawsuit in December 2024 seeking declaratory and injunctive relief under the Administrative Procedure Act (APA), the federal law that allows courts to review agency decisions.

Procedural Posture

Both parties moved for summary judgment on the administrative record alone, before any discovery. Summary judgment is appropriate when there are no genuine disputes of material fact and a party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).

Threshold Issues: Subject-Matter Jurisdiction

Timeliness and Venue Under 15 U.S.C. § 2060(a)

The Commission argued that Sea Foam's lawsuit was time-barred and filed in the wrong court because 15 U.S.C. § 2060(a) requires challenges to Commission rules to be filed within 60 days in the U.S. Court of Appeals for the D.C. Circuit or the relevant regional circuit. The court disagreed. Section 2060(a) uses the permissive word 'may' rather than mandatory terms like 'shall' or 'must,' indicating Congress did not make appellate review exclusive. Critically, section 2060(e) contains a savings clause stating that the remedies in section 2060 are 'in addition to and not in lieu of any other remedies provided by law.' The court distinguished the Commission's cited Eighth Circuit precedent involving the EPA's direct-review statute (which contained no such savings clause) and aligned with two older district court decisions—Dow Chemical (W.D. La. 1978) and Kaiser Aluminum (D. Del. 1976)—that reached the same conclusion. The court therefore held that Sea Foam's APA challenge was properly filed in federal district court and was not time-barred.

Final Agency Action

APA review requires a 'final agency action.' Under Bennett v. Spear, 520 U.S. 154 (1997), an agency action is final when (1) it marks the consummation of the agency's decisionmaking process (not merely tentative or interlocutory), and (2) rights or obligations have been determined or legal consequences flow from it.

The court held that the Determination—including the definition of 'fuel' set out in its Section III response to public comments—was a final agency action. Section IV of the Determination explicitly stated that the Commission's decision was based on 'consideration of the comments submitted,' meaning the Section III responses were part of the agency's completed decisionmaking, not merely informal staff views. Clear legal consequences flowed from the definition the Commission announced: it is now using that definition to seek compliance and warn of penalties.

By contrast, the court held that the May 2023 Letter and July 2024 Letter from the Compliance Office were not final agency actions. Following the Fourth Circuit's analysis in Jake's Fireworks Inc. v. U.S. Consumer Product Safety Commission, 105 F.4th 627 (4th Cir. 2024), the court reasoned that the Compliance Office is a subordinate body without delegated rulemaking authority and that its letters did not represent the consummation of the agency's decisionmaking process. Accordingly, Count III—Sea Foam's claim that the letters bypassed required notice-and-comment rulemaking—was dismissed as moot.

Merits: Statutory Authority (Count I)

The court applied the foundational principle of statutory interpretation that courts start with the text and presume Congress means what it says. The Act grants the Commission authority to regulate 'portable fuel containers'—defined as containers intended for 'flammable liquid fuels.' The Commission's Determination defined 'fuel' to encompass any liquid with a flash point below 140 degrees Fahrenheit 'intended to be used as, or in, a fuel mixture to support combustion.'

The court found this definition exceeded the Commission's statutory authority for two principal reasons:

First, the phrase 'fuel mixture' does not appear in the Act. The Act refers to 'fuels' and 'flammable liquid fuels,' not 'fuel mixtures.' By introducing 'fuel mixture,' the Commission's definition could sweep in any liquid that is merely mixed with or added to fuel—including nonfuel substances—thereby expanding regulatory authority beyond what Congress granted.

Second, all of the dictionary definitions of 'fuel' agreed upon by both parties require that a substance be burned to produce heat or power. Sea Foam's fuel-additive products do not meet this standard: they are used to clean engine components and stabilize fuel systems, they cannot substitute for gasoline or diesel, and they do not produce heat or power on their own. The EPA's separate registration systems for fuels and fuel additives further supports this distinction. The court rejected the Commission's argument that Sea Foam's products qualify as fuels simply because they are flammable (flash point below 140°F), noting that Congress authorized regulation of 'flammable liquid fuels,' not all flammable liquids.

The court also addressed the Commission's internal argument that 'fuel mixture' should be read narrowly to cover only liquids both capable of and actually used for combustion—and concluded this narrower reading would also exclude Sea Foam's products, since the record shows they are not used for the purpose of combustion but rather to clean and protect engine components.

Disposition

The court granted Sea Foam's motion for summary judgment on Count I (excess of statutory authority) and denied the Commission's motion in its entirety. Having resolved Count I in Sea Foam's favor, the court declared the remaining claims—Count II (arbitrary and capricious rulemaking) and Count IV (unconstitutionally vague rule)—moot. The case was dismissed with prejudice, and judgment was entered for Sea Foam.