MCR Oil Tools v. TRAN
U.S. Court of Appeals for the Fifth Circuit
MCR Oil Tools v. TRAN, 102 F.4th 326 (5th Cir. 2024)
MCR Oil Tools v. TRAN
Opinion
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
___________ FILED
May 23, 2024
No. 24-60230
___________ Lyle W. Cayce
Clerk
MCR Oil Tools, L.L.C.,
Petitioner,
versus
United States Department of Transportation; Pete
Buttigieg, Secretary, U.S. Department of Transportation; Pipeline
and Hazardous Materials Safety Administration;
William S. Schoonover, in hisofficial capacity as Associate
Administrator of Hazardous Materials Safety, Pipeline and
Hazardous Materials Safety Administration,
Respondents.
______________________________
Petition for Review from an Order of the
Dept of Transportation, NTSB
Agency No. 49 CFR 171-80
______________________________
Before Jones, Higginson, and Ho, Circuit Judges.
Per Curiam:
the petition for
review is GRANTED. This matter is expedited to the next available
randomly designated regular oral argument panel.
No. 24-60230
The motions for stay pending review and for administrative stay
should be decided by the argument panel and are accordingly CARRIED
WITH THE CASE, consistent with our panel practice. See, e.g., Woodlands
Pride, Inc. v. Paxton, No. 23-20480 (5th Cir. Feb. 20, 2024) (order attached
as appendix). We express no opinion on the disposition of those motions.
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No. 24-60230
James C. Ho, Circuit Judge, concurring:
The dissent argues that the motions for a stay pending review and for
a temporary administrative stay should be granted. And that is indeed an
option available to the argument panel,
clear consistent with our panel practice. See, e.g., Woodlands Pride, Inc. v.
Paxton, No. 23-20480 (5th Cir. Feb. 20, 2024) (order attached as appendix).
In Woodlands Pride, I wrote separately to explain why our court should
have granted a stay pending appeal in that matter. My reasoning was simple:
Texas should be allowed to enforce its duly enacted laws designed to protect
children from sexually explicit content.
The panel in Woodlands Pride concluded that that was an issue for the
argument panel to decide in the first instance.
I see no reason why we should treat the movant in this case more
favorably than the movant in Woodlands Pride. If anything, the issues
presented in Woodlands Pride were much simpler as a matter of law and far
less fact intensive. And this case involves the commercial interests of a single
Texas business and its customers whereas Woodlands Pride involved the
innocence of every child in Texas.
***
MCR Oil Tools, L.L.C., can rest assured that the expedited argument
panel that will soon be assigned to this case will no doubt carefully consider
the issues presented by this motions panel just as in Woodlands Pride.
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No. 24-60230
Edith H. Jones, Circuit Judge, dissenting in part:
A small business filed this emergency motion for stay pending review
of the agency decision that threatens to kneecap it. The motion should be
granted. T
Transportation of
product has been totally safe for three decades. But the agency now decrees
that the Petitioner cannot ship it at all without undertaking significant
product reconfiguration, followed by testing and certification. The required
actions will be costly and time-consuming, with no certainty of ultimate
success with the agency.
enterprise and many licensees whose work is connected with it will suffer
irreparable injury.
The panel majority opts only to expedite the hearing to an oral
argument calendar, but carries the stay motion with the case. In the
will be compounded as other orders are foregone. I respectfully dissent from
nial of a stay and the embedded denial of a temporary
administrative stay.
Petitioner MCR Oil Tools, LLC, has manufactured and delivered
across the world a Radial Cutting RCT that is important to oil
The torch uses a patented
thermite mixture to cut steel pipe safely and cleanly, facilitating repairs and
continued production activities. MCR CEO attests that the company has
shipped its RCT over 35,000 times in thirty years without ever having
experienced a safety incident in transport or in its intended use.
During this period, the company passed multiple audits conducted by
the Pipeline and Hazardous Materials Safety Administration PHMSA
an agency within the Department of Transportation. The agency long
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No. 24-60230
permitted MCR
without special approval. Sw. Rsch. Inst., Energetic Properties
of Thermites 33 (Nov. 27, 2019).1 As recently as February 2022, albeit
MCR was authorized by the agency to ship
its thermite as a Division 4.1 flammable solid, pursuant to the Hazardous
Materials Regulations, 49 C.F.R. §§ 171.1-180.605. Robertson Declaration, Ex. D at 1. As a consequence, MCR -containing product could be shipped within (as pertinent here) PHMSA approval.49 C.F.R. § 173.212
(b).
Beginning in June 2023, however, the agency reached an opposite
conclusion regarding MCR rmite prepackaged in
a fully disassembled RCT. Robertson Declaration Ex. F at 7. The agency
now characterizes thermite, when inserted in steel components of the RCT,
cannot be transported at all until it has
undergone testing by an agency-approved entity and been certified by the
agency. See 49 C.F.R. § 173.56(a), (b).
A stay pending appeal is warranted only if the movant satisfies the four
criteria stated by the Supreme Court. See Nken v. Holder, 556 U.S. 418
(2009). The most important are likelihood of success on the merits and
irreparable harm. I believe those criteria are fulfilled here.
1. MCR is likely to succeed on appeal. Stripped to essentials, MCR
contention is that this PHMSA determination is arbitrary and capricious for
several reasons. First, MCR argues that the configuration of thermite within
_____________________
1
https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2020-03/Energetic-
Properties-of-Thermites.pdf. Thermite formulations are mixtures of two powders that,
Id.
Thermite is commonly used in numerous applications like specialty welding and is even a
subject of home experiments described and captured on video for the internet.
5
No. 24-60230
steel parts of a disassembled RCT design
49 C.F.R. § 173.56(a). I agree. Read
in context of the regulations as a whole, this definition does not encompass
MCR -tested method of shipment, in which the disassembled
components cannot function as an RCT and are indistinguishable from
. Therefore, no new testing/certification or
changes in manufacture and design of the RCT was legally required.
Second, MCR asserts various studies that went unaddressed by the
PHMSA when it reached its new decision. It is arbitrary and capricious for
an agency to Genuine Parts
Co. v. , 890 F.3d 304, 312(D.C. Cir. 2018); see also City of Kansas City v. Dep t of Hous. & Urb. Dev.,923 F.2d 188, 194
(D.C. Cir. 1991)
( Agency action based on a factual premise that is flatly contradicted by the
agency s own record . . . cannot survive review under the arbitrary and
capricious standard. ). These studies, attached to MCR
this court, are comprehensible even to non-scientific legal minds. The
studies photos of experiments, along with the reported results, showed
clearly that the thermite as packaged in the disassembled components of an
RCT does not pose the dangers that the PHMSA theorized. In fact, such
packaging passed tests from the United Nations Manual of Tests and Criteria
on which the PHMSA has relied. Yet the PHMSA now claims that one
study was conducted by an y, the Southwest Research
Institute, even though the Southwest Research Institute
own contractor to study thermite.
Last, the PHMSA conjures up a generalized fear of the greater risk of
explosion posed by . Refusing to reference
MCR
enough. But the PHMSA here contradicts its own study, which found that
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No. 24-60230
act with greater violence under confinement
not appear to
increase the burn rate of thermites; rather, [confinement] appears to contain
and suppress the explosion. Safety Mgmt. Servs., Thermite
Research Report 11 (Sept. 28, 2023) (emphasis added).2
2. MCR will suffer irreparable harm in the absence of a stay. The
the PHMSA
Radial Cutting Torch, constitutes over 75% of annual
sales (about $20 million) and the remainder of its sales are associated
products. Robertson Declaration at 3. The agency order has forced it to
sideline from delivery over $1 million in completed, packaged orders, and
forego or forestall over a million more in sales during this litigation. The
company suffers credible reputational injury from being unable to fulfill
orders and from the charge of unsafe practices. Its relationships with
licensees who install and service the RCT are also being damaged.
That these injuries are irreparable is confirmed by our decision in
Wages & White Lion Investments, LLC v. Food & Drug Administration, 16 F.4th
1130 (5th Cir. 2021). First
decision arises from the perilous position in which MCR has been placed.
Second, in any suit
Id. at 1142. But here,
MCR is expending thousands each day that this continues (with little income
coming in) while attempting to perform the manufacturing acrobatics that
may change its product and shipping configuration sufficiently to appease the
_____________________
2
https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/2024-04/Thermite-
Research-Report-DOT-Contract-693JK320C000005-Sept-28-2023.pdf.
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No. 24-60230
PHMSA. This effort, too, will be unrecoverable in the event MCR
succeeds in this court.
3. As Nken
by allowing MCR to continue to ship the disassembled RCT as it has been
doing. It is hard to beat a clean thirty-year track record of transportation
safety. The balance of hardships plainly favors MCR
p Texas v.
Biden, 10 F.4th 538, 560 (5th Cir. 2021).
With due respect to my colleagues on this panel, I trust that a panel to
which this case is expedited will see the light.
8
Case: 23-20480 Document: 91-1 Page: 1 Date Filed: 02/20/2024
United States Court of Appeals
for the Fifth Circuit
___________
No. 23-20480
___________
The Woodlands Pride, Incorporated; Abilene Pride
Alliance; Extragrams, L.L.C.; 360 Queen Entertainment,
L.L.C.; Brigitte Bandit,
Plaintiffs—Appellees,
versus
Warren Kenneth Paxton, In an official capacity as Attorney General
of Texas,
Defendant—Appellant.
______________________________
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:23-CV-2847
______________________________
UNPUBLISHED ORDER
Before Jones, Higginson, and Ho, Circuit Judges.
Per Curiam:
IT IS ORDERED that Appellant-Texas Attorney General’s
opposed motion for a stay of the injunction pending appeal is CARRIED
WITH THE CASE. This motion does not request either emergency relief
or expedited consideration. The Texas Attorney General has instead sought
multiple extensions of the deadline to file his opening brief. Accordingly, the
Case: 23-20480 Document: 91-1 Page: 2 Date Filed: 02/20/2024
No. 23-20480
motion for stay pending appeal should be decided by the merits panel. We
express no opinion on the disposition of that motion.
2
Case: 23-20480 Document: 91-1 Page: 3 Date Filed: 02/20/2024
No. 23-20480
James C. Ho, Circuit Judge:
The State of Texas asserts a profound interest in shielding children
from sexually oriented content. See, e.g., Ginsberg v. New York, 390 U.S. 629,
639(1968) (“The well-being of its children is of course a subject within the State’s constitutional power to regulate,” “justify[ing] . . . limitations . . . upon the availability of sex material to minors”); FCC v. Pacifica Foundation,438 U.S. 726, 749
(1978) (“Bookstores and motion picture theaters . . . may be prohibited from making indecent material available to children.”); New York v. Ferber,458 U.S. 747, 757
(1982) (“we have sustained legislation aimed at protecting the physical and emotional well-being of youth even when the laws have operated in the sensitive area of constitutionally protected rights”); Thompson v. Oklahoma,487 U.S. 815, 824
(1988) (in all “50 States,” “no one under age 16 may purchase pornographic materials”); see also Pope v. Illinois,481 U.S. 497
, 516 n.11 (1987) (Stevens, J., dissenting) (“As for prohibiting sale or exhibition of sexually explicit material to minors . . . it has long been established that the State may go beyond the constitutional definition of obscenity.”). This same interest in protecting the innocence of children is likewise reflected in other laws that shield minors from other adult activities. See, e.g., 21 U.S.C. § 387f(d)(5) (tobacco);23 U.S.C. § 158
(alcohol);Conn. Gen. Stat. § 12-576
(gambling).
Texas law defines sexually oriented content to include only that which
appeals to the prurient interest in sex. Plaintiffs insist they do not offer such
content—and not in the presence of children, in any event. If that is so, then
they should have no quarrel with Texas law.
The motion for a stay pending appeal should be granted. Under the
order issued today, the argument panel can do so.
3
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