Jerri's Ceramic Arts, Inc. v. Consumer Prod. Safety Com. - 874 F.2d 205 (4th Cir. 1989)

Rule:

The Consumer Product Safety Commission's characterization of its statement as an exposition of its policy or interpretation of the standard does not preclude the court's finding that it is something more. Courts are in general agreement that interpretative rules simply state what the administrative agency thinks the statute means, and only remind affected parties of existing duties. In contrast, a substantive or legislative rule, pursuant to properly delegated authority, has the force of law, and creates new law or imposes new rights or duties. 

Facts:

The Consumer Product Safety Commission issued a statement that changed the enforcement policy of the Small Parts Rule (rule), 16 C.F.R. § 1501.1 (1988). The statement added fabric, string, rubber bands, and other similar articles to the required list of hard components that were subjected to testing as potential health hazards. Petitioner challenged the order contending that it was a substantive amendment to the rule, and because the Commission did not comply with the statutory procedures of notice and comment required for such amendments it must have been set aside.

Issue:

Was the "Statement of Interpretation" issued by the Consumer Product Safety Commission an interpretation of an existing regulation?

Answer:

No.

Conclusion:

The court noted that the Commission’s characterization of its statement as interpretative did not preclude the court's finding that it was something more. In deciding whether the statement was interpretative the court considered the Commission’s intent in authorizing it, as ascertained by an examination of the provision's language, its context, and any available extrinsic evidence. In conclusion, the court held that the Commission’s characterization of the statement as interpretative was incorrect, and that it was a legislative rule that was not preceded by the procedural requirements. Therefore, petitioner's application to set it aside was granted.