Who is Company Doe Anyway? Appeals Court To Consider How Much To Disclose When Companies Challenge Complaints On CPSC's Online Database
Seller Beware: Consumer Protection Insights for Industry
As we previously reported, last year, for the first time ever, a federal district court enjoined the Consumer Product Safety Commission (CPSC) from publishing a complaint "implicating" a consumer product on its online database, saferproducts.gov. The district court concluded that CPSC failed to "establish the necessary nexus" between the product and the reported harm, such that the complaint was too misleading to be published on the database. Significantly, the district court also allowed the company to proceed under the pseudonym "Company Doe" and sealed court records to prevent the disclosure of the database complaint.
On October 31, 2013, the U.S. Court of Appeals for the Fourth Circuit will hear oral arguments in an appeal of this decision by consumer advocacy organizations. The appeal focuses on the district court's decision allowing Company Doe to stay anonymous throughout the suit and to seal court records about the complaint. (CPSC also appealed the district court's decision but dropped the appeal before its brief was due.)
The battle lines are clear. According to consumer advocacy groups, Company Doe's only potential harm—corporate reputational criticism—is insufficient to seal records and overcome the public interest in open judicial proceedings. Company Doe and representatives of industry, including the National Association of Manufacturers, argue that a company must be allowed to stay anonymous during the suit and to seal records regarding the complaint. Otherwise, they say, the fact of the lawsuit itself could draw unfair attention to the company and the consumer complaint—whether accurate or not—and thus defeat the very purpose of the limitation in the law barring CPSC from posting "materially inaccurate" information on the database, as well as the company's suit against CPSC to enjoin the release of the complaint.
No matter the outcome, the decision undoubtedly will affect a company's calculation in deciding whether to challenge CPSC's release of information that the company believes is materially inaccurate. Stayed tuned for more information.
© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.