Transcript of the Nov 20th Oral Hearing - Magnetsafety.org vs CPSC

In the matter of 22-9578 CPSC Magnetsafety.org, et al., Petitioners v. Consumer Product Safety Commission; Academy of Pediatrics,et al., Amici Curiae, the oral argument was on Wednesday, November 20, 2024 in Denver beginning at 9:00AM, and lasted for about 34 minutes.

A summary, and case details can be found here: What is CPSC vs MagnetSafety 

The computer generated transcript of the hearing is below, and accuracy is not guaranteed. Please confirm accuracy by referring to the audio.

If you have difficulty accessing the embedded file, the recording with captions with matching timing to the transcript can be found here: https://youtu.be/KIAmo-s6vqw 

The original source audio footage of the entire day of court activity in Courtroom #2 on 11/20/24, is provided by the Tenth Circuit here: https://www.youtube.com/watch?v=cwurir15RtY

Oral Hearing Transcript:

00:00:11:00 - 00:00:21:45

Judge 1

The honorable judges of the United States Court of Appeals for the 10th Circuit.

00:00:21:50 - 00:00:22:28

Adam Jed (DOJ)

Yea yea yea.

00:00:22:28 - 00:00:28:55

Judge 1

Yea yea yea. The United States Court of Appeals for the 10th Circuit is now in session. All those having business before this honorable.

00:00:28:55 - 00:00:29:58

Adam Jed (DOJ)

Court may now draw.

00:00:29:58 - 00:00:32:27

Judge 1

Near and they will be heard. God save the.

00:00:32:27 - 00:00:35:22

Greg Dolin (NCLA)

United States of this honorable court.

00:00:35:27 - 00:00:47:03

Judge 1

Thank you. Please be seated.

00:00:47:07 - 00:01:26:21

Judge 1

Morning, everyone. This panel will hear six cases this morning. We'll, probably take a break after the third case. And our first one today. we're hearing by, video, and I'll call it, and we'll proceed. cases magnet safety.org versus Consumer product safety Commission. The case number is 20 2-9578. counsel for petitioner. Mr. Dolan, are you ready to proceed?

00:01:26:25 - 00:01:53:51

Greg Dolin (NCLA)

Yes, Your Honor. Thank you very much. Good morning. The police department. Let me begin by just expressing all kinds of appreciation for the court's accommodation to allow us to present this argument via zoom. And as for emergency basis with that, let me, just go straight to the argument eight years ago, and then that is, this court vacated the president's rule presently being challenged because CPSC failed to conduct a proper cost benefit analysis.

00:01:53:56 - 00:02:24:34

Greg Dolin (NCLA)

Specifically, the court held failed to account for its own enforcement efforts and how that those enforcement efforts, affected the trend magnet Ingestions and that CPSC over counted magnet injury, thus inflating their costs and undercounting their benefits, and going back to the drawing board and promulgating a new rule. The Commission, although they tried to do better, ultimately committed the same fatal errors as cost benefit analysis suffers from five major flaws.

00:02:24:34 - 00:02:27:04

Greg Dolin (NCLA)

And I have to go through all of them.

00:02:27:09 - 00:02:37:05

Judge 1

first council commission just to kind of see us for one second as the clerk to turn down the volume just a little bit. Yes, sir.

00:02:37:10 - 00:02:41:14

Judge 1

Thank you. Excuse me, Mr. Dolan.

00:02:41:16 - 00:03:08:52

Greg Dolin (NCLA)

So first. Yeah. Go ahead. oh. Thank you. first, the commission treats all magnet injections and even suspected ones as cost attributable to high power magnets. But that's just wrong. High power magnets are particularly dangerous. Not nearly because they're small, after all. there are lots of small things that kids play with. as important as the commission and the court itself.

00:03:08:52 - 00:03:33:43

Greg Dolin (NCLA)

And, it's a magnet to recognize the peculiar danger of these magnets is that when they're injected in multiples, they can get stuck to each other and potentially pinch, tissues inside the body, causing necrosis or other problems. But when a single magnet, for example, is swallowed, the changes are no different than official swallows, a dime or a thumbtack or anything else.

00:03:33:48 - 00:03:49:08

Greg Dolin (NCLA)

and yet the commission, despite recognizing that at least one third of injections were of a single magnet, attribute, all ingestion costs to the peculiar dangers posed by these small, high powered magnets. Well, Mr. Thomas.

00:03:49:10 - 00:04:28:44

Judge 1

Mr. Dolan, I can I have a question about that. That argument for the signal single magnet versus multiple mag magnets. so doesn't the record show that physicians need to monitor all magnet ingestion incidents in children, even if it turns out that the child swallowed just one magnet because the child could have swallowed more than one magnet. So if signal magnet ingestions contribute to the societal costs of these products, why was it unreasonable for the agency to count them in the rules?

00:04:28:44 - 00:04:31:23

Judge 1

Benefits?

00:04:31:28 - 00:04:49:12

Greg Dolin (NCLA)

Okay. And it's actually it's a great question and leads me to directly to my second point that I was going to make. And the reason it's unreasonable is not because physicians don't need to monitor. Of course they need to monitor. In fact, there is oftentimes get children even under suspicion that they swallow something, even if nothing was swallowed.

00:04:49:17 - 00:05:18:21

Greg Dolin (NCLA)

But that has nothing to do with peculiar cost of these high powered magnets. So these are merely societal costs of having small things around the house. Generally, like I said, thumbtacks, dimes, pennies, etc.. So, and since of course, the commission is not going to ban all small things. So the mere fact that we just need to monitor things that were ingested shows us nothing as to whether these high powered magnets are unreasonably dangerous.

00:05:18:36 - 00:05:33:45

Greg Dolin (NCLA)

So in order to do that, whether these magnets are unreasonably dangerous. What, commission needed to have done is figure out what costs associated with high powered magnets versus what are the benefits associated with high powered magnets, and then balance the two. Mr..

00:05:33:50 - 00:05:52:41

Judge 3

Oh. Go ahead. Go ahead. Mr. Dolan, this is Judge Federico. I also had a question about that. The, there was an amicus brief filed by the American Academy of Pediatrics, and they support the rule. And in their brief, there it was a bunch of medical organizations, and they called the magnet ingestion a pediatric health crisis.

00:05:52:46 - 00:06:06:57

Judge 3

and so I understanding your argument that the commission did not disaggregate data between small items and magnets, but, I did not see you reply or in your reply that you addressed this argument about, you know, the organization of physicians.

00:06:06:57 - 00:06:07:26

Judge 3

Calling this.

00:06:07:26 - 00:06:09:28

Judge 3

A health crisis. So I wanted to give you an opportunity.

00:06:09:28 - 00:06:31:04

Greg Dolin (NCLA)

To do that. Sure. And and again, so this is these questions are so they track my arguments. I very much appreciate them. one of the problems when I see counting is that it failed to account, for the fact that for reasons that I can't quite articulate on, I don't think, commission can. I think more studies needed.

00:06:31:06 - 00:07:04:36

Greg Dolin (NCLA)

It seems to be that since the prior rule was dedicated, there has been an increase in number of small item injections, period magnets or other items. And so I don't necessarily dispute, Aki's position that there is a crisis of magnet injections because there, again, only be a crisis of injections of generally small items. And but again, the rule then doesn't address, that problem or at least it doesn't take those trends that everything goes up into account.

00:07:04:40 - 00:07:30:01

Greg Dolin (NCLA)

and again, that's the only very problem that this court identified. last go around saying that in order to come up with a rule, annual commission needs to take into account general societal trends. Last time, that was the trend that the number of ingestions went down following, stepped up enforcement efforts. The commission simply ignored. This time is the trend that overall, for whatever reason, children seem to be shoving more things into their mouth.

00:07:30:01 - 00:07:42:13

Greg Dolin (NCLA)

Maybe because there's more home schooling, maybe because of, you know, there was people stayed longer at home during Covid or whatever the reason. But, that trend simply was not addressed in, in the commission's finding.

00:07:42:18 - 00:08:14:21

Judge 2

Could you go back to council? Council? Sorry. Judge Moore. Chair. Could you go back? Could you go back to the single versus the double or more multiple magnet ingestion? Can you address what data it is that you think the Commission could have relied on here? The commission explained its limited data, the the necess data and that it doesn't you know, they they did the best that they could with the data that they had.

00:08:14:25 - 00:08:20:53

Judge 2

do you are you suggesting there's something more that they could have done?

00:08:20:58 - 00:08:38:30

Greg Dolin (NCLA)

Absolutely. I don't think they did the best that they could. I, you know, I acknowledge that they did better than the last go around, but I don't think they did the best of it. So first, I think, as I mentioned in our brief and in the commission's own record, they themselves recognized that at least one third of these napkins a single man had ingestions.

00:08:38:31 - 00:09:03:05

Greg Dolin (NCLA)

And yet not proper discounting is not made. Second, I think as I was, in my answer to Judge Manson, I mentioned that it is not at all unreasonable for parents to take their small kids to E.R. or to urgent care center and have an image and mere suspicion they swallow something, even if they haven't. And as the Commission itself acknowledges, half of these ingestions.

00:09:03:05 - 00:09:05:21

Greg Dolin (NCLA)

And this also goes to just the Greek school council.

00:09:05:22 - 00:09:35:26

Judge 2

I don't think I I'm sorry. I don't think you're focusing on my question, which is I think we understand that point. But the problem that the commission has is the evidence that they have the evidence is available as these emergency room visits. It's not that granular. It's much more general. And they can only they can get so much out of it, but they can't necessarily identify whether it's a single or double magnet issue, even if they wanted to.

00:09:35:31 - 00:09:55:15

Judge 2

unless there happens to be that information. And so they explain which they're required to do when they have limited data, you know, how what they relied on and how they relied on it and why it's limited. What more are you suggesting that the commission could have done here? That's my question.

00:09:55:17 - 00:10:06:52

Greg Dolin (NCLA)

So I think I think if I can, address in kind of in two ways. One, I think there is the data is somewhat more granular. After all, for the when you do imaging studies, you can see.

00:10:06:52 - 00:10:10:48

Judge 2

Could you, could you slow down just a little? I'm sorry. Could you slow down just a little?

00:10:10:48 - 00:10:30:52

Greg Dolin (NCLA)

I'm sorry for the East Coast and so. Absolutely. so I think that there is data. Data can be made more granular because, after all, the commission itself acknowledges that, that's how they know that at least one third of these are single magnet ingestions. And the studies would show, like the imaging study would show what's inside the child.

00:10:30:57 - 00:11:02:56

Greg Dolin (NCLA)

Number two. again, so because that commission takes into account, for example, the imaging costs are actually somewhat irrelevant because what I call as one magnet, zero magnets or ten magnets, or when there was a magnet at all, the parents would take the child to the E.R. just to get imaging. And so the only costs attributable to the high powered magnets, as such, are costs that involve dealing with ingestion of high power magnets specifically, as opposed to ingestion.

00:11:02:57 - 00:11:33:25

Greg Dolin (NCLA)

Sometimes. So, for example, if the commission limited its counting, for example, to cost of surgeries, to cost of endoscopy, things that actually are attributable to the dangers posed specifically by high powered magnets, that would make sense. But they lumped together these costs that have nothing to do with high power magnets, quite high powered magnets. So I think both the data is available as being somewhat more granular, and they could have done a better job.

00:11:33:30 - 00:11:48:09

Greg Dolin (NCLA)

But even if it weren't, I think counting mirror imaging studies, that would happen no matter whether the chart on this wall or anything is just too much. Counting on the cost side.

00:11:48:14 - 00:11:49:49

Judge 1

Mr.. Mr. Dolan.

00:11:49:54 - 00:11:51:18

Greg Dolin (NCLA)

Thank you for question.

00:11:51:23 - 00:11:52:36

Judge 2

Yes. Go ahead.

00:11:52:40 - 00:12:26:12

Judge 1

Could I just approach similar? Maybe it's the same question, but in a slightly different way. The government argues that the figure for social cost here, 51.8 million, is a conservative number, and that it arguably could have been as high as 219.7 million. Why isn't the 51.8 million number conservative?

00:12:26:16 - 00:12:41:29

Greg Dolin (NCLA)

It's not conservative because it's the inputs are too broad. So in order to determine whether something is conservative or more permissive, I think we need to, desegregate relevant inputs. Well, that. No.

00:12:41:34 - 00:13:10:04

Judge 1

Excuse me for interrupting, but but didn't didn't they exclude certain inputs? In other words, didn't they exclude ingestion incidents where magnets were mentioned but not confirmed and didn't they exclude incidents where ingestion could not be confirmed? And didn't they exclude unidentified products in calculating that number? Sure.

00:13:10:06 - 00:13:17:12

Greg Dolin (NCLA)

I honor, but that still doesn't get to the problem of Manasquan magnet. So sure.

00:13:17:16 - 00:13:33:15

Judge 1

I don't understand why. What do you mean? Magnets? Qua magnets? If they've excluded incidents where they couldn't confirm it's a magnet, then it seems to me that addresses your magnets. Magnets?

00:13:33:19 - 00:13:55:22

Greg Dolin (NCLA)

respectfully, I don't think it does. I think if someone swallows a single magnet, for example. And that is confirmed on an X-ray or after the magnet passes through the child's enteric system. So it's now confirmed. But the cost associated with taking the child into the yard has not to do with the fact that there's a danger from the magnet itself.

00:13:55:24 - 00:14:31:14

Judge 1

Didn't the convention and the Council didn't didn't the commission calculate when the calculated social costs way serious ingestion incidents more heavily? And wouldn't that arise from ingestion of multiple magnets instead of single magnets? Because, as I understand it, the risk is much higher and the incident much more serious. If at the end of the visit it turns out it was multiple magnets and the Commission's weighing that more heavily in its 51.8 million.

00:14:31:19 - 00:14:35:28

Judge 1

Why isn't that reasonable? Is that arbitrary?

00:14:35:33 - 00:14:52:37

Greg Dolin (NCLA)

It's reasonable, certainly, to weigh more heavily. I think it's unreasonable to take into account costs that have nothing to do with magnets, especially hyper magnets as such. I see that I'm sort of into my rebuttal time. I'm happy, of course, to keep going, but if the work permits me, I would like to reserve the rest of the time for rebuttal.

00:14:52:44 - 00:14:55:19

Judge 1

Thank you. Counsel.

00:14:55:24 - 00:14:58:01

Greg Dolin (NCLA)

Thank you. Judge.

00:14:58:06 - 00:15:00:54

Judge 1

Mr.. Jad.

00:15:00:59 - 00:15:35:03

Adam Jed (DOJ)

Good morning, Your Honors. Adam. Chad, for the United States. And again, thank you very much for the court's indulgence in, allowing us to argue remotely, given the circumstances. And may it please the court. It seems like a number of the questions this morning were focused on this issue of whether the Commission's approach here somehow over countered the potential harms being inflicted by these products by relying on emergency room reports that do not necessarily distinguish between a single magnet ingestion or a multiple magnet ingestion.

00:15:35:07 - 00:15:57:07

Adam Jed (DOJ)

And as I think a number of the questions got to the agency, ultimately just had to make a number of methodological choices. Those methodological choices yielded a highly conservative estimate. And then with that highly conservative estimate in hand, the agency was well aware of potential noise in that data and then took that into account when it undertook a sensitivity analysis.

00:15:57:07 - 00:16:23:47

Adam Jed (DOJ)

So if I could just briefly explain each piece of this. First of all, I think that my friend is just misunderstanding the way that the Commission created that initial. They called it at times base case or sort of primary analysis, that initial estimate of harm. There's a specific known hazard that is unique to these products. we know that that known hazard would be less likely to crop up in the data in the first place.

00:16:23:47 - 00:16:47:49

Adam Jed (DOJ)

If, for example, you just swallowed a single magnet, it may very well just pass through unnoticed. For example, child doesn't have a stomach ache. No reason to take the child to the doctor in the first place. But more to the point, contrary to what I think may be the premise of my friend's argument generally, and my friends, I guess newfound, reliance in the reply brief on one study that was cited within the preamble.

00:16:47:49 - 00:17:09:30

Adam Jed (DOJ)

I think that's what he's pointing to for his one third data. This was not just a count of incidents. It wasn't just how many times did a child need to be treated for a magnet ingestion. Rather, it took account of the costs. And so if you look probably the cleanest place you can find, this is any excerpts of record that we filed, volume three pages 591 to 592.

00:17:09:30 - 00:17:35:58

Adam Jed (DOJ)

That's the preamble to the final rule I was. You can find this throughout the preamble. But this is a just kind of chart that I think assembles, all of the data pretty nicely. what you can see is that the agency kind of broke down the costs based on the place of treatment. If someone was just treated in a doctor's office, if someone was treated in an emergency room or in two different categories where they were where a child was admitted to the hospital, either admitted from an emergency room or admitted directly.

00:17:36:03 - 00:18:02:00

Adam Jed (DOJ)

And if you look at that data, what you can see is that of the $51.8 million estimated harm, 41.7 of that was from hospital admissions. So, you know, look, is it theoretically possible that some extremely conservative doctor would decide to admit somebody to the hospital, even if they're showing no symptoms or even if there's not necessarily a cause for concern, you know, anything is possible.

00:18:02:00 - 00:18:22:03

Adam Jed (DOJ)

But as you look at the preamble, what they explain is what's mostly driving this data are incidents where there's a radiological study, they see magnets, they see multiple magnets. There are follow up radio, radiological studies, endoscopy. These have to be done CT scans have to be done. Surgical procedures have to be done. That's what's driving the vast majority of these costs.

00:18:22:15 - 00:18:45:44

Adam Jed (DOJ)

And those sorts of incidents are even if it might be theoretically possible, extremely unlikely to be driven by these sort of single magnet ingestions that I think my friend is relying on. And I mean, in addition, just to looking at the data recall that obviously the prior rule does serve as a natural experiment. We do see this trend where the number of incidents dropped significantly when the prior rule was announced in in effect.

00:18:45:45 - 00:18:51:22

Judge 1

So in in surges when Mr.. Jets Mr.. Jet could I just jump in.

00:18:51:27 - 00:18:52:04

Adam Jed (DOJ)

Of course Your honor.

00:18:52:06 - 00:19:14:19

Judge 1

Would would you then say based on everything that you just, presented, that, it is appropriate in calculating costs, social costs to include our incidents when it turns out it was just a single single, as opposed to, multiple magnets.

00:19:14:24 - 00:19:15:15

Adam Jed (DOJ)

Well.

00:19:15:19 - 00:19:21:00

Judge 1

Is that well, well, is that is that in the 51.8 or is it not.

00:19:21:05 - 00:19:31:01

Adam Jed (DOJ)

The 51.8 is just being drawn from those. Any excess reports, as the agency spells out? Very clearly, those often lack kind of detailed specifics.

00:19:31:06 - 00:19:45:52

Judge 1

I, I specific my specific question is whether single single magnet ingestion costs of emergency room visits and treatments are included in the 51.8.

00:19:45:57 - 00:20:01:06

Adam Jed (DOJ)

They may well be. We don't definitively know because the 51.8 is being generated from those. A sort of brief emergency room notes where a doctor is, you know, obviously more focused on trying to save a child's life than, you know, kind of documenting. So do we know every single thing that they're observing?

00:20:01:06 - 00:20:06:43

Judge 1

Do we not know then, whether this one third claim is even accurate?

00:20:06:48 - 00:20:32:16

Adam Jed (DOJ)

we do not. The one third claim is being driven from, I believe it was a single study. Again, we're getting this for the first time and the reply brief, but it's being drawn from a single study, that is referenced in the preamble. now, I should point out, even if you did just do a kind of across the board one third discount to the 51.8 million estimate, you would still land right around 35 million, which is the very, very upper bound of the estimated cost of this rule.

00:20:32:31 - 00:20:50:51

Adam Jed (DOJ)

But more to the point, it's not uniform. In other words, if that one third of cases, even if one third is the number and we don't know if it's the number, but even if that is the number that one third of cases would be tend to be, and almost certainly are the least expensive of the incidents rather than the most expensive of the incidents.

00:20:50:58 - 00:21:00:15

Adam Jed (DOJ)

So it wouldn't just be some kind of a one third discount. But more to the point, I think this is where the sensitivity analysis comes in, your honor. Because any again the the.

00:21:00:19 - 00:21:15:56

Judge 1

Okay I okay, I'm going to I'm going to interrupt you again. sorry about that, but I need to ask you some questions, please. so you mentioned a couple of minutes ago, pages 591 and 592.

00:21:16:01 - 00:21:26:51

Judge 1

In the appendix. Yes, sir. Okay. Yes. It just so happened I have them right in front of me, and I had a terrific I had a question about those. So it seems like.

00:21:26:51 - 00:21:29:06

Adam Jed (DOJ)

All right I'm now going to pull those up as well.

00:21:29:06 - 00:21:32:24

Judge 1

But good.

00:21:32:29 - 00:21:34:01

Adam Jed (DOJ)

no, no I'm sorry. Please, please go ahead.

00:21:34:15 - 00:22:02:37

Judge 1

Well, my question is this on 591, if I'm reading it correctly, there's a discussion on the third column about unidentified products, and at one point it said that the societal costs for unidentified product ingestion injuries could be as much as 167.9 million. so far, so good.

00:22:02:42 - 00:22:03:03

Adam Jed (DOJ)

Yes.

00:22:03:16 - 00:22:40:41

Judge 1

Okay, so here's what I'm not understanding. If you go over to the next page and you look at table eight, which is the table that gets you to 51.8, the heading up. Yet the heading on it, if you read through it towards the end says that it includes treatment for injuries for unidentified magnets. So I'm having a, some trouble reconciling the table with the narrative on the previous page and wondering if that was a mistake.

00:22:40:46 - 00:22:51:09

Judge 1

on the table because am I right that unidentified products weren't factored in to the benefits number?

00:22:51:14 - 00:23:19:14

Adam Jed (DOJ)

You are correct that they weren't factored into the benefits number. And if you look at the bottom right of that page 591, which you have in front of you, it says I'm quoting the because CPSC does not know precisely how many of these products would fall within the scope of the rule. CPSC conservatively has not included them in the primary benefits analysis summarized above, and that primary benefits analysis summarized above, if you look at it, will then sort of match on to the table that Your Honor has pointed to.

00:23:19:19 - 00:23:33:29

Adam Jed (DOJ)

in candor, I had not previously noticed that. and so my assumption is that is just, some mistake in that header. if the court were interested to know more, I could certainly follow up with the commission and send in a letter if that would be of any assistance.

00:23:33:34 - 00:23:38:44

Judge 1

Well, it did it did catch my eye. So that's why I'm asking you.

00:23:38:49 - 00:24:01:53

Adam Jed (DOJ)

yeah. No. Absolutely. And and, you know, look, obviously, Your Honor, that that 167.9 figure, obviously couldn't be reflected in that table because the highest possible number on that table is 51.8. but what we do know is that 167.9 figure is just kind of one of the many ways in which the 51.8 estimate was incredibly conservative.

00:24:01:53 - 00:24:22:35

Adam Jed (DOJ)

I mean, the 51.8 estimate. first, if you look at, 2-309 volume to page 309, it is only about incidents that clearly involve a magnet ingestion. So if there's a reference to a magnet, but it's not clear it was ingested, or there's a reference to an ingestion, but it's not clear what the object was or even if you have both words.

00:24:22:44 - 00:24:46:37

Adam Jed (DOJ)

But it's not certain exactly that something got swallowed, doesn't get counted at all. then if you look at three er, 571 and 591, you get that, that sort of unidentified product issue that if they couldn't definitively identify, even within magnet ingestions, the category of product was at issue and they just didn't count it at all. That's 167.9 figure that you're on a reference.

00:24:46:42 - 00:25:12:18

Adam Jed (DOJ)

The agency also didn't count. It was approximately 2 to $4 million attributable to the death of children. So even that 51.8 million base case is just so much larger than the very highest conceivable end of costs, 35.35 million. That's obviously fits into the agency's sensitivity analysis. But as the agency explained, the theoretical upper bounds of the benefits of this rule are so significantly higher.

00:25:12:23 - 00:25:35:13

Adam Jed (DOJ)

even just adding that 167.9 figure, it gets you up to 209.7. and so, you know, just again, if we fully concede that data is not perfect, that is the nature of regulation. You can't definitively know you rely on the best data that you have, and then you create the best estimates that you can. And then the agency here did so using conservative steps across the board.

00:25:35:13 - 00:25:58:41

Adam Jed (DOJ)

Every conceivable tie basically went against regulation and then conducted a sensitivity analysis where even at the highest possible end of the cost of this rule, the benefits still exceeded the costs. Mr.. Yeah. This is, what Judge Federico, the I just heard Mr. Dolan say a minute ago that the commission did better than it did last time before this court struck down the 2014 rulings and magnets.

00:25:58:46 - 00:26:21:47

Adam Jed (DOJ)

I think I can glean from your brief how it is you would say you did better. The. Can you give me the wave tops on that and just tell me what the commission did differently? Sort of the bullet points that, should lead to the this court denying or affirming the rule this go around. So. Absolutely. So I think there were three concerns that this court raised in the prior sand magnets decision.

00:26:21:52 - 00:26:53:47

Adam Jed (DOJ)

this time around, the agency I think, not only addressed them, but went kind of out of its way to belt and suspenders to address the concerns that this court raised. so first, this court flagged the concern that previously the agency, when it counted the potential benefits, were counting incidents that were attributable to unknown products. here what the agency did is, first, as it made very clear, you know, again, it sort of spelled out in that sensitivity analysis that it was conservatively not including any of those unknown incidents.

00:26:54:00 - 00:27:16:23

Adam Jed (DOJ)

I should point out the agency did actually conduct analysis, which would lead to the conclusion that many, if not most, of the unknown incidents are attributable to the subject magnet products. I think even just with that analysis consistent with some magnets, the agency could have counted maybe with some sort of a discount. Those, incidents. But again, conservatively, the agency did not.

00:27:16:28 - 00:27:42:34

Adam Jed (DOJ)

number two, the court ins and magnets raised the concern that the agency was relying on data that may have been somewhat stale and was not taking into account changes in the market. in so here, although obviously parts of the preamble go back to data from I think it's 2010 for the purposes of creating these accounts, the agency looked at 2017 to 2021, the most recent period, a period of time that post states vacant or of the prior rule.

00:27:42:43 - 00:28:02:33

Adam Jed (DOJ)

And then the agency also conducted that trends analysis. now that trends analysis, we think is actually quite corroborative of the agency's other conclusions, but it does also make sure that the agency was not missing changes in the market. And it's not like the problem was somehow disappearing and the agency was just relying on stale data by mistake.

00:28:02:38 - 00:28:27:33

Adam Jed (DOJ)

and then finally, Your Honor, I think in Z magnets, the court expressed concern that, potential use for math and science education and research was not necessarily being taken into account in the agency's analysis of the cost of the rule. And here the agency did so in two different ways. First, the rule itself carves out products that are sold solely to educators or researchers or sold commercially for educational or research use.

00:28:27:34 - 00:28:56:00

Adam Jed (DOJ)

You can find that at section 1260 2.2 of the rule. But second, the agency discussed the effects on education and innovation. probably the best examples or just that discussion generally are going to be our excerpts of records, pages 585 and 589. In the van, the agency made very clear that when it was conducting its cost modeling, it was a sort of market based modeling that that modeling does then take into account any lost educational or innovation, innovative uses.

00:28:56:00 - 00:29:03:35

Adam Jed (DOJ)

And you can find that discussion at page 593 of the excerpts of record, unless the question has any question.

00:29:03:37 - 00:29:37:57

Judge 2

Quick question Council. just for clarification, one of the arguments that I don't think it's been mentioned much here that that, the appellants make is that the that the correlation evidence that you had is inaccurate. In particular, I think you you studied the, magnet ingestions while the, you know, the, the rule, was previously in effect and then after to show the correlation between the two and, and how the ingestions increased when the rule was no longer in effect.

00:29:38:02 - 00:29:49:37

Judge 2

My question is, really you made an interesting argument and said that that I think that that argument correlation argument had been weighed. Is that right?

00:29:49:42 - 00:29:52:08

Adam Jed (DOJ)

I mean, we we have a number of responses to that argument.

00:29:52:08 - 00:30:07:25

Judge 2

One of I just I'm just trying to I just want to get your response to see if if that was waived or if we could, address it as an obvious problem that's readily apparent from the data itself.

00:30:07:30 - 00:30:11:42

Adam Jed (DOJ)

I'm sorry, I see my time is expired. If if I may answer that, please. It's on the table.

00:30:11:42 - 00:30:13:59

Judge 1

Please do.

00:30:14:04 - 00:30:38:11

Adam Jed (DOJ)

yes. So, the petitioners did not present that argument to the agency. it is hardly an an obvious argument. and, indeed, the petitioners, I think, are actually relying on extra record evidence to advance that argument, even though the Judicial Review Commission says that review of this rule is based on the evidence that is in the record, as we do spell out in our brief.

00:30:38:11 - 00:31:05:24

Adam Jed (DOJ)

And because we're short on time. And of course, I'm happy to spell this out in more length, but if you look at pages 32 to 36 in our brief, we do explain why it is that they just also misunderstood those trends. it they seem to be looking at some trends that they say began in 2018. And so what they're misunderstanding is both that the, incident numbers dropped when the prior rules announced and in effect, that the surge began in 2017, before the trends that they point to.

00:31:05:24 - 00:31:11:00

Adam Jed (DOJ)

And actually, as we point out on page 35 of our brief, if you look at the data that again, they've generated and they're presenting.

00:31:11:00 - 00:31:12:01

Judge 2

To the council, I.

00:31:12:01 - 00:31:12:43

Adam Jed (DOJ)

See it.

00:31:12:45 - 00:31:21:09

Judge 2

I saw your arguments on that point. I just really wanted clarification on whether you thought that this was obvious from the data itself.

00:31:21:14 - 00:31:36:34

Adam Jed (DOJ)

I understood and, no, we do not think that it was obvious from the data. I mean, you know, obviously the trends did not form a primary part of the agency's analysis. It was just corroborative. And what they're suggesting about trends. Thank you. Thank you, thank you.

00:31:36:39 - 00:31:41:30

Judge 1

Jen, we have some rebuttal time.

00:31:41:35 - 00:32:14:34

Greg Dolin (NCLA)

Not here. thank you, Your Honor. let me just pick up, if I may. I'll wear, my, learned co-counsel and, opposing counsel and Judge Morris left off. we disagree, of course, that this argument was waived. And we do think it was apparent from the data after all. this is not some, these trends are not some there's not a separate study that Madigan says, do you solve for any of our other clients of conduct that this is a we just extracted this data straight from any I assess, report themselves.

00:32:14:36 - 00:32:24:42

Greg Dolin (NCLA)

It's also a very important one, which, the commissioner rely in terms of the number of ingestions of other small objects versus amendments, etc..

00:32:24:46 - 00:32:43:12

Judge 2

Well, but your argument that there's some, some logical fallacy within the, comparison or the correlation that is the to me, the argument that may not be obvious from the data itself, as explained by the Commission.

00:32:43:17 - 00:33:06:27

Greg Dolin (NCLA)

Your Honor, I think, logical fallacy is that it's always a logical fallacy merely to assert that, you know, post hoc and appropriate hoc. And the Commission simply said, well, during the 2014 to 2016 years when the rule was in effect, the number of ingestions was lower, and now it's higher and deeper. Well, maybe, but it's the question is always as compared to what?

00:33:06:32 - 00:33:44:06

Greg Dolin (NCLA)

And if you compare it to the rest of the ingestion, that just simply tracks throughout. And the last point that I want to make, if I may, is, in terms of counting the benefits, of, of having these metrics out of the cost of the rule, as we explained in our brief, one of the issues is that the commission, although they did make some exceptions for sales of these items to education institutions, they did under account of benefits such as, by ignoring the fact that lots of education happens at home, even for homework or homeschooling and, the benefits that kids may have in school by having, excuse me,

00:33:44:13 - 00:34:00:00

Greg Dolin (NCLA)

miss kids for, for example, doing their homework, home or homeschool schools, being denied them. And, you know, that at least should have been taken into account with that unless there's any further questions. we're happy to submit on the rest of the briefs.

00:34:00:05 - 00:34:22:55

Judge 1

Thank you. Council, thanks to both of you, for the, arguments. I'm pleased we were able to do this, today via video. And, at least from, where we sit, it seemed like it worked pretty well. So thank you to both of you for the arguments. the case will be submitted, and council are excused.