On May 18, the Eighth Circuit held that NHTSA’s informal letters determining that certain aftermarket products violate Federal Motor Vehicle Safety Standard 108 constitute final agency action reviewable under the Administrative Procedure Act (APA). The 2-1 decision reverses the district court’s dismissal and remands for consideration of a preliminary injunction. The holding has implications well beyond the automotive-safety context and shows how the Eighth Circuit evaluates whether informal enforcement correspondence qualifies as final agency action.

The dispute arose after NHTSA’s four-year investigation concluded that certain Pulse Modules — aftermarket devices that cause center high-mounted brake lamps to pulse before holding steady — violate FMVSS 108’s “steady burning” requirement. NHTSA’s acting chief counsel sent informal letters to certain distributors stating that dealers installing the modules violate 49 U.S.C. § 30122(b) of the Safety Act, demanded their customer lists, and threatened civil penalties of up to $26,315 per day. The distributors sued under the APA seeking an injunction against NHTSA. The district court dismissed sua sponte by concluding the informal letters were not final agency action.

The Eighth Circuit reversed, holding that distributors had satisfied the two-part Bennett v. Spear test. The panel explained that the letters — issued after a multi-year investigation by an official with delegated interpretive authority — represented NHTSA’s definitive (and not a tentative) conclusion that Pulse Modules render brake lights noncompliant. The court held that NHTSA went beyond expressing an abstract view of the law: It applied its authoritative interpretation of FMVSS 108 to the specific products at issue and concluded they “cannot be installed for their intended use on motor vehicles consistent with Federal law.” Thus the court determined that the informal letters were actionable-final agency action.

The court also rejected the argument that the distributors’ anticipated loss of business was merely a practical harm without legal effect. Citing Hawkes Co. v. U.S. Army Corps of Engineers, the panel held that agency action presenting a regulated entity with a catch-22 — incur compliance costs, forgo lawful activity, or face enforcement penalties — carries legal consequences sufficient for finality. NHTSA’s letters to the distributors’ customers, threatening civil penalties of up to $27,874 per-installation, would exert a “powerful coercive effect” that virtually prohibits installation. The court further held the district court abused its discretion in denying a preliminary injunction based on the erroneous finality ruling and remanded for full consideration under the controlling Dataphase factors.

Judge Kobes’ dissent argued that the letters did not satisfy the second Bennett factor because they impose no direct legal obligation on the distributors — no one disputes the distributors can continue selling Pulse Modules as they have for years. In his view, the majority’s real concern is that customers might stop buying modules if NHTSA follows through and takes additional regulatory action, making the challenged letters non-final. He noted that an anticipated market impact is a practical consequence and that adverse economic effects accompany many forms of non-final government action.

The decision extends the Eighth Circuit’s pragmatic approach to final agency action beyond the automotive-safety context, with implications for federal agencies using informal correspondence to effect policy goals. The opinion builds on Eighth Circuit precedent permitting pre-enforcement review whenever an agency letter applies a statutory or regulatory interpretation to specific conduct that implicates enforcement penalties — a pattern common across the EPA, FDA, OSHA, and other regulatory bodies. Such actions may give companies the option to immediately challenge them in court rather than endure an administrative enforcement process and subsequent litigation. This option can be especially attractive because the agency must justify its decisions based on the record it had when the decision was made — versus after an opportunity for the agency to develop a record during the administrative proceedings.