CPSIA – Do-Gooder Congress Ends The Green Toy Movement

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CPSIA – Do-Gooder Congress Ends The Green Toy Movement

CPSIA – The TIA Just Wants to HELP You!

• Our companies are members of the Toy Industry Association (TIA).
• We are on the record as opposing the Toy Safety Certification Program (TSCP).
• The dues of TIA members paid (and continue to pay) for the development of the TSCP, as well as the salaries and bonuses of the representatives mentioned below.
• The “15 month rule” will soon be released by the CPSC (on or before November 14). It will address, among other things, testing frequency and sample sizes for testing, and is expected to include the so-called component testing rule.

Did any of you watch the lengthy TSCP hearing (video link and text link) at the CPSC on October 14? This hearing was apparently jointly requested by the TIA, Consumers Union (CU) and Consumer Federation of America (CFA). Interesting bedfellows, huh? This hearing provided much to reflect upon. In this post, I will address the issues presented by the TIA’s program and the TIA’s authorship from a small business perspective. I will return to the consumer groups later.

[Some of my readers may be from outside the toy industry and may think "This does not apply to me!" Please bear with me and read on. This may not be your problem TODAY, but it is a sign of things to come.]

TSCP Basics:

The TSCP is a complicated initiative that is difficult to explain succinctly. Here is the document defining the TSCP. You can access the TSCP website here. While I will attempt to summarize it here, you should rely instead on the definitive documents published by the TIA.

The TSCP is a program designed by the TIA to ensure that toy companies comply with law. As Elizabeth Borrelli (Executive Director, TSCP) puts it: “TSCP is a conformity assessment system. It is not a testing program but a comprehensive, effective and efficient system to verify that toy manufacturers have satisfied requirements of the CPSIA (and retailers) and that their toys confirm to applicable safety standards.” The TIA says that the TSCP is a “work in progress”.

The TSCP goes far beyond the requirements of the CPSIA. [The TIA acknowledged this repeatedly at the hearing. For instance, see the video at 134:30 and 149:30.] It is also a “voluntary” program, not a requirement of law. The TIA wants to foster broad acceptance of its initiative. They presented it to the CPSC for the agency’s endorsement. Carter Keithley, President of the TIA, called the need for CPSC support “absolutely crucial”. [Also, see the video at 135:15.] According to the TSCP specifications, the program includes: “1) hazard analysis andor risk assessment for toy product design, 2) factory process control audits and 3) production sample testing to validate that the factory is producing, at the time of sampling, toys that meet U.S. safety standards. These three elements will be verified or audited by accredited certification bodies.”

A few details about the TSCP:

• Factory Ratings – There are three levels of factory compliance under the TSCP: Tier 3 (non-ISO 9001 factories), Tier 2 (ISO 9001 factories) and Tier 1 (ISO-9001 factories that have met unspecified additional criteria to be established by the TSCP). Mass market factories are highly likely to be Tier 1, and small fry factories are likely to be Tier 3 or Tier 2. The terms below, according to the TIA, are designed to provide an “incentive” for non-Tier 1 factories to raise their compliance to Tier 1 standards. [Too bad for you if you and your factory don't want to incur this expense.]
• Hazard assessment – This pre-production analysis must prepared by or under the supervision of a responsible officer of the company on a product-by-product basis and must be attested to in writing. [Remember this.]
• Testing Sample Sizes - Under 3′s: not less than 18 pieces; over 3′s: not less than 12 pieces; big or expensive items: not less than 3 pieces; under 1000 pieces sold per year: sample size TBD; minimum production run: 500-1000 pcs (whatever this means).
• Sampling procedure – Tier 3 – need outsider to select all samples; Tier 2 – outsider picks samples randomly 4-6 times per year; Tier 1 – The factories select samples themselves.
• Testing frequency – Tier 1: greater of once a year or every million pieces, plus one extra heavy metals test annually (Max – never more than four times a year); Tier 2: greater of twice-a-year or every 500,000 pcs. (Max – monthly); Tier 3: greater of quarterly or every 150,000 pcs. (Max – every other week). [You read that right.]
• Security – Samples must have special seals to avoid “adulteration”

The TIA insists that the TSCP was designed with small business in mind, has been vetted by small business interests and has been applauded by small businesses.

What Happened at the Hearing:

The TIA spent a great deal of time explaining the terms of the TSCP. The consumer groups spent their time explaining why this program that goes far beyond the law ISN’T ENOUGH. The CPSC Commission asked a lot of questions and spent a bit too much energy (in my view) complimenting the TIA on their work. One Commissioner (Anne Northrup) pushed back with probing questions about TSCP economics and the intiative’s impact on small business (see the video at 78:49 for about 15 minutes and later at 146:35).

What Does the TSCP Mean for Small Business?

The TSCP, if adopted, would be catastrophic for small toy companies or companies making toys with factories catering to the specialty market (rather than the mass market). Although the TIA denies this point (explicitly), the TSCP significantly favors mass market companies in an almost shameless way. Consider, for instance, the cost of participation in the TSCP. Rick Locker, outside counsel to the TIA, talked about a cost of $65 per item to enter the program. [He noted that for this $65, toy companies "now have $2 million of technology available to them" (123:48). Hey, TIA Members, do you realize what Mr. Locker means? The website they created cost $2 million. That's some fancy website they built with your money.] Upon questioning by Ms. Northrup, none of the TIA spokespeople would admit or guess at the overall cost to participate in the program (84:00 – and check out Northrup’s reaction at 85:15).

What might those costs be? Well, we know it costs $65 per item simply to key the product into the website. Then there’s the cost of the rating of the factory. [The TIA insists that this cost will not be borne by importers but instead by the factory. See video at 150:50. Apparently, this overhead is not passed along to the factory's customers, unlike all other factory overhead.] What might this cost? The TIA provided no estimates. I believe the one-time cost of becoming ISO 9001 is estimated at tens of thousands of dollars from a “standing start”. Likewise, the comparable compliance process with ICTI-CARE (Toy industry Code of Conduct) ain’t cheap. Figure TSCP ratings to cost thousands, and possibly much more, depending on the actions required to make the transition to the new TSCP standards. Then there’s the cost of regular audits and re-certifications. Many of the new requirements will likely lead to on-going, incremental administrative expenses at the factories, suggesting that product costs will float upward on a go-forward basis under the TSCP.

Finally, the TSCP costs will include all the usual safety tests required for each participating item, plus additional testing and processes. I have previously posted typical safety test costs in this space. [Rick Locker cited a cost of $300 per phthalate test in his testimony, as a point of reference.] INCREDIBLY, by publishing the TSCP terms, the TIA has apparently conceded that safety testing might be necessary or desirable multiple times per year. Testing frequency has NEVER been regulated by the U.S. government previously but will be addressed by the “15 month rule” shortly. I believe the TIA’s actions here will provide cover for the CPSC to impose similar testing requirements, despite the obvious market interference. How easy will it be for me, as an industry participant, to argue against testing frequencies put forth by my own trade association? Surely they are looking out for my best interests and would only suggest what’s reasonable and necessary – RIGHT?! Ummm, let me get back to you on that . . . .

Taking all of the above into account, I personally think the per-item cost to “pass” TSCP will be in the many thousands of dollars per item per year. For illustration purposes, however, I think we can confidently use a cost of $5,000 per item (all-in, blended). [Yes, I am predicting a blended cost of $5,000 per item to get this coveted certificate. Quite affordable . . . .]

How would a $5,000 TSCP cost affect you versus Big Toy? To answer this question, we must make some reasonable assumptions. For Big Toy, I am going to assume annual production of 1 million units of a hypothetical toy at a Tier 1 factory. For you, I am going to assume production runs of various sizes, all at a Tier 3 factory (which means you must test each time you produce, since you are unlikely to produce more often than twice-a-month!). For both you and Big Toy, I am going to assume a FOB factory cost of $5.00 per unit.

Here are the numbers:

Big Toy:

• COGS: $5.00
• TSCP: $5,000
• Production Size: 1,000,000 per run (or per year, doesn’t matter under Tier 1 rules)
• Cost per unit for testing: $5,000 divided by 1,000,000 ($.005, rounded to one penny)
• New blended cost, including testing: $5.01, or a cost increase of 0.1% – NOT BAD FOR BIG TOY!

You:

• COGS: $5.00
• TSCP: $5,000
• Production Size: Various run sizes illustrated below (as a Tier 3 factory, you will test each lot)
• Cost per unit for testing: 1,000 pcs – $5.00 per unit; 2500 pcs – $2.00 per unit; 5,000 pcs – $1.00 per unit; 25,000 pcs – $.20 per unit
• New blended cost, including testing: 1,000 pcs – $10.00 (a cost increase of 100%); 2,500 pcs – $7.00 per unit (40% increase), 5,000 pcs – $6.00 (20% increase); 25,000 pcs – $5.20 per unit (4% increase).

Call me crazy, but I think this is rather favorable to Big Toy. Let’s see, a cost increase of 0.1% versus a cost increase of 4-100%, which is better? Notably, for importers that sell to dealers, these cost increases are MULTIPLIED at retail, only compounding the competitive problem. The TSCP-induced gulf between specialty and mass markets costs will massacre specialty market toys. MASSACRE.

There is simply NO WAY that this program was vetted in any meaningful way by small business. If you were one of the small business reviewers, please announce yourself to my readers by commenting on this post (with name, email and phone number). Let’s have a debate!

There are other factors here that favor Big Toy, such as TSCP sampling methods and sample sizes which will punish small toy companies in more than one way, and TSCP’s required full traceability of components (also found in the RILA-BRC standards).

Even the liability risks under the TSCP favor Big Toy which can afford to provide expensive lawyers to back-up company officers. Notably, the TSCP requires a written personal attestation by a senior company officer of the TSCP product hazard assessment. Do you want to sign this little piece of paper and take on some serious personal liability? If that sounds really good to you, please consider the remarks of Chuck Rogers, Senior Technical Director for the TSCP, at the hearing (139:28): “. . . under CPSIA, when that company official signs that attestation, and it becomes part of what is required to get a safety mark [under the TSCP], I can tell you company officials I have talked to take that very, very seriously and they’re going to be extremely cautious and prudent before they sign that. AND IF SOMEONE DOES SIGN AN IMPROPER ATTESTATION, AND THAT PRODUCT IS LATER FOUND TO HAVE A SIGNIFICANT DEFECT, YOU KNOW, IT WOULD BE WITHIN THE COMMISSION’S PURVIEW, I SUSPECT, TO ASK FOR THAT ATTESTATION.” [Emphasis added.] So, in other words, the TIA is trying to sell this program to the CPSC as a source of evidence to be used against its members and its industry. Love it! Where do I sign up?

A Few More Hearing Highlights:

- Ms. Tenenbaum asked about counterfeit certificates. The continuing interest of the CPSC in the “switcheroo” and other nefarious acts mystifies me. What is the basis for treating me and all other members of our industry as scumbag cheaters? Why is this kind of question even posed? Of course, the TIA only feeds these suspicions by specifying tamper-proof seals on samples. Why would such a thing be necessary, other than a conviction that toy companies are such creeps that consumers and the government can’t only trust them? How often does this kind of fraud happen, and if the CPSC knows about it, why haven’t they acted decisively against the bad guys? Your guess is as good as mine.

- The hearing featured several TIA assertions that small businesses will be so, so grateful for the TSCP. The most surreal sell job was by Chuck Rogers, who illustrated virtually every remark with anecdotes from his days at Sunbeam and Wal-Mart. Very relevant to this topic. . . . Rick Locker twice gave detailed explanations of how small businesses will save money with the TSCP (at 77:30 emphasizing reduced record keeping and at 87:50 emphasizing safety test cost savings). Mr. Locker seemed to confuse the cost of factory audits with the cost of safety tests under the CPSIA – he used an example of 20 customers requiring 20 different tests, thereby multipying testing costs 20x. This scenario makes no sense to me since only certain specific safety tests are required to comply with the CPSA, as amended. You don’t need a different safety test report for each customer – but you might need a different audit report for each mass market customer. Factory audits, notably, are a mass market phenomena, and typically confront small businesses only when dealing with mass market customers.

- The TSCP is good news for you, according to Elizabeth Borrelli (90:40): “If [the TSCP] was significantly additive [to costs], then our membership and our Board wouldn’t support us moving forward with it, frankly.” Feel better yet?

Final Thoughts:

The astounding TSCP initiative crafted by the TIA is a BUSINESS. The TIA, in proposing it, is going into business in competition with certain of its members. This move is troubling for a trade association. In addition, the TSCP adds significantly to the burden of the already excessively burdensome CPSIA. To promote this change to a regulator seemingly predisposed to treat our industry harshly is reckless and shortsighted. It is known, however, that certain toy companies are already planning to take these compliance steps and more. [In response to a question by Commissioner Adler, Hasbro's representative at the hearing confirmed that Hasbro will exceed the TSCP requirements.] Was the TIA acting with the notion that what’s good for Big Toy is good for everyone else? Amazingly, this disruptive program is clearly favorable to only a small handful of TIA members and seemingly disadvantageous to a far larger number of toy companies. [I don't put much stock in the hand waving by TIA representatives at the hearing - show me the detailed analysis proving that this initiative saves money for any small business.] Given the heavy presence of mass market companies behind the development of this program, the mass market benefits and focus come as no surprise (to me).

It is worth noting one more full disclosure item: Earlier this year, I asked the TIA to help defray our advocacy expenses in opposition to the CPSIA. Despite their massive lobbying budget, they turned me down for several reasons. In a remarkable phone call, they explained to me that, among other things, (a) the TIA would not contribute to the expenses of the Alliance for Children’s Product Safety unless I would allow them to exercise control over its activities, and (b) they believe the law would never be changed and preferred to channel the TIA’s “limited” resources into efforts to live with the law. [There is obviously a gulf between my views and theirs.] In any event, whether it is cause or effect, the TSCP seems to have attracted a multi-million dollar investment by the TIA and essentially it appears that the TIA burned the bridges behind it – promoting the TSCP now is a primary focus of the TIA.

For those TIA members who have gotten this far in this long post, you may want to ask a few questions of TIA officers and board members.

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CPSIA – The TIA Just Wants to HELP You!

CPSIA – My Answer to Sean Oberle on Resale Shops and Tenenbaum

Some of you may have been following the recent debate in the Product Safety Letter (PSL) on the CPSC’s noxious Resale Roundup program. A wave of unfavorable media coverage has dogged the new CPSC initiative, noting the risk of high fines and the unwelcome intrusion of federal regulators into an innocent American ritual, the garage sale. A highly-publicized Fox News piece apparently triggered a response by CPSC Chairman Inez Tenenbaum in PSL on October 3 entitled “Garage Sales and CPSC — Sorting the Facts from the Myths“. In this piece, Ms. Tenenbaum promised not to fine garage sale operators, and chose to emphasize the CPSC’s noble goal of ending the resale of recalled products.

Next, Rob Wilson of Challenge and Fun, Inc., a Massachusetts-based toy company, published an Op-Ed in PSL on October 9 entitled “Consumer Confusion Comes From CPSC Guidance, Not the Media” in which he noted that the fear Ms. Tenenbaum sought to calm came not from media reports but instead from CPSC policy. In particular, he pointed out the impractical and confusing advice given in the CPSC’s own CPSC Handbook for Resale Stores and Product Resellers. Mr. Wilson closed with the following observation: “Chairman Tenenbaum vowed at her Senate confirmation hearing to bring a common sense approach to CPSIA implementation. We are still waiting for signs of common sense from the agency regarding CPSIA.” Ah, that “common sense” thing again!

Sean Oberle, owner, publisher and editor of PSL, replied to Mr. Wilson in his own publication on October 13 in an editorial entitled “Clarity and Accuracy — CPSC, the Media and Garage Sales” in which he defended Ms. Tenenbaum on the grounds that her limited statement did not constitute a comprehensive summary of her feelings or actions on the CPSIA. It’s a remarkable piece, I hope you will read it. [In his editorial, Mr. Oberle makes the following observation: "a quick search of the blogosphere and other new-media sites finds more pieces running the gamut from mild warnings to doomsday predictions" - hmmm.] Interestingly, Mr. Oberle stresses his “neutrality” and “defense of accuracy and clarity” THREE TIMES. Draw your own conclusions.

Well, I sent Mr. Oberle MY Op-Ed reply to the debate he not only published but contributed to. Suffice it to say, he turned me down. I am publishing the Op-Ed here for your review and consideration. I would be interested in your thoughts.

I think it is critical to reflect on this rebuff and to delve into its deeper meaning. [My ego can take it, btw.] The Product Safety Letter (along with BNA) was cited by John “Gib” Mullan (Assistant Executive Director, Office of Compliance and Field Operations, CPSC) as the definitive source for information on safety issues at last February’s ICPHSO meeting. An august publication, apparently. Yet, what does a stilted debate in PSL’s pages signify? Only Mr. Oberle can say for sure. My article asks Ms. Tenenbaum to be accountable for the actions of the CPSC in implementing the defective CPSIA. Mr. Oberle has already publicly stated his neutrality on agency issues several times. [Quoting from Hamlet, "The lady doth protest too much, methinks."] What’s going on here?

The American way of life is frankly dependent on our Constitutionally-guaranteed freedom of speech. The foundation of the visionary American system of a free media is its INDEPENDENCE. What if the media organs we depend on lose their independence? What if fear of retribution or a possible chilling in access to information challenges editorial decisions? In thinking about the end of the debate about the CPSC’s Resale Roundup in PSL, these questions resonate. I hope this is not the Obama Revolution we have all been hearing about.

My Op-Ed for your reading pleasure:

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CPSIA – My Answer to Sean Oberle on Resale Shops and Tenenbaum

CPSIA – My Ruling on Brass Bushings

The Learning Curve request for exemption for brass bushings on their toy cars is still pending at the CPSC. It is supposedly up for a vote this week. As I have noted in two prior blogposts, this decision will set an important precedent for a number of other products. If, as expected, the Commission votes down the LCI request, brass will be essentially banned in all children’s products, except for the pretzel logic of the pen decision (previously derided in this space). [The logic in the pen decision has never reappeared in another CPSC decision, and therefore should not be used as precedent for ANY other situation under the CPSIA until it actually reappears as part of CPSC common law. The pen decision was simply a gift to the writing implement industry, such as a convoluted and fantastic legal decision can be a gift.]

Among the anticipated victims of the LCI decision (to recap):

• Toys
• Connectors of all kinds
• Brass zippers, grommets and other apparel and footwear components and accessories
• Brass instruments (rentals to schools, certainly), musical bells and certain strings used in string instruments
• Children’s jewelry

It is worth noting, amateur scientists in Congress, that brass has germicidal properties which is one reason why brass is used in doorknobs (icky germs!). Might actually be useful in some children’s products for this reason . . . .

The presence of brass in daily life is an immutable fact. If the CPSC bans brass in children’s products because of the idiotic CPSIA, NOTHING will eliminate the following uses of brass in the daily life of children:

• House keys (good for sucking)
• Doorknobs and locks (touching and licking?)
• Plumbing fixtures and drinking fountains (touching and sucking)
• Pipes to convey potable water (assuming those pipes aren’t made of pure lead)
• Components in cell phones (definitely good for licking)
• Clocks, antiques, artwork (touching)
• Railings (licking)
• Jewelry (sucking)
• Guns and ammunition (no comment)
• Tools (you can poke out an eye with a tool!)
• Etc. etc. etc.

This does not even address the widespread presence of lead in, among other things, our food system, our potable water and our air. There are federal safety standards for allowable lead content in each category. Children are known to consume food, water and air throughout their daily lives without interruption. The obliviousness of the CPSIA in setting such stiff standards for bio-unavailable lead-in-substrate in children’s products in the context of these other lead instances is shameful – and the source of the current issues with brass.

The CPSC Staff has determined that the CPSIA does not allow an exemption for brass bushings. In the understatement of the year, the staff concluded “that the estimated exposure to lead from children’s contact with the [LCI] die-cast toys would have little impact on the blood lead level.” Staff states clearly that they consider brass bushings safe and that the lead transmission from brass bushings is inconsequential and certainly not rising to the level of a hazardous substance. Unfortunately, the Commission has thus far shown no interest in taking bold stands and rejecting the legitimate legal (but nonsensical) conclusions of the CPSC Staff under the CPSIA. Common sense be damned.

In a perfect world (what a joke), the Commission’s decision in this case would hold that although LCI brass bushings are caught up in the limits of the CPSIA, they present NO substantial hazard to children, and therefore using their seldom-used discretion, the Commission grants an exemption for brass bushings in children’s products conditionally. The decision would explicitly state that this decision should be taken as precedent for brass in all children’s products (to cut down on repetitive exemption requests). The decision would be dependent on TWO CONDITIONS, namely that: (a) the particular use of brass in children’s products is not known or held by CPSC Staff to present a substantial hazard to children under the FHSA, and (b) the exemption will be lifted when Congress acts to ban brass from everyday life and takes concrete steps to retrofit America for a brass-free future, replacing all brass doorknobs, artwork, cell phones, keys and locks, plumbing fixtures and water pipes (including, what the heck, lead pipes, too) and so on. For so long as brass remains part of children’s daily life in their home and school environments, the CPSC will not act to restrict brass in children’s products.

The Commission, using common sense not previously known in the CPSIA era, would note that banning brass bushings would be utterly ineffective to change the net exposure of children to lead in their lives but would wreak terrible losses upon the marketplace. Senseless economic destruction is un-American and lacks a social conscience since the losses will be spread ratably throughout society among suppliers, sellers and consumers of all things brass. Finally, the Commission would note that unless and until its decisions to restrict children’s products materially impact safety, the Commission will not keep safe products or components off the market for technical violations of the CPSIA. Brass bushings, in my fantasy, would be granted an exemption to the awful CPSIA.

This idle fantasy can come true if the Commission summons up the courage to act sensibly and to stop being complicit in the shoddy legislative work of Congress. As an independent agency of the U.S. government, NOT a subsidiary of the legislative branch or an organ of the House Energy and Commerce Committee, the CPSC has the authority to make up its own mind and to set rational policy. It’s time that the Commission draw a line for one and all to see. Especially Mr. Waxman.

Read more here:
CPSIA – My Ruling on Brass Bushings

CPSIA – Recall Insurance Update

One of my eagle-eyed friends noticed an article (or ad masquerading as an article) offering a new recall insurance product in Earnshaws in its most recent issue on page 36. The subject of recall insurance has been on everyone’s mind since passage of the CPSIA. The new law considerably increases the risk and expense exposure from recalls in a multiplicity of industries. Earnshaws caters to the apparel industry, but the issues are the same elsewhere in the children’s products marketplace. The insurance broker here is HUB International. For those of you in the toy business, you may be familiar with them from messages sent under the auspices of the TIA. HUB International is endorsed insurance broker to the TIA.

The Earnshaws “article” touches on some important points:

• “. . . with thousands – or in some cases millions – of units with an untold number of components and coatings, it’s not unreasonable to imagine that even the most careful company could inadvertently end up shipping goods that don’t comply [with the CPSIA]. The consequences of such an error would be costly and possibly catastrophic.”
• “HUB has developed the Children’s Apparel Recall Expense (C.A.R.E.) program to cover well-meaning wholesales, importers and distributors of children’s apparel and footwear. . . .”
• One happy customer noted: “We do not want to accept the risks of the threats we cannot control . . . .” [Emphasis added]

I particularly appreciate the tone of doom and regulatory randomness in this “article”. Of course we should all mortgage our houses to buy this insurance. As HUB notes, the consequences of an “inadvertent” error is “possibly catastrophic”. This point is not lost on their customer either, who notes that the risk cannot be controlled. Even “well-meaning” companies will be subject to this capricious fate. At least they can get insurance . . . . Ouch.

Hmmm, I wonder why the HUB customer thinks that CPSIA risks cannot be controlled. Could it be that Target was whacked with a $600,000 penalty for using reasonable QC procedures and meeting its standard of care, but nonetheless somehow failing to find a lead-in-paint violation in time. [Of course, they had passing test reports and turned themselves in as soon as they found the problem, but they're very nice in Minnesota. Nice, but $600K lighter now.] Could it be that Mattel paid for a massive recall, settled with California, settled with Arizona and 38 other states, paid a $2.3 million fine to the CPSC . . . AND still had to process and pay an extortionate class action settlement with plaintiffs attorneys to the tune of tens of millions of dollars – all for a violation that resulted in NO deaths and NO injuries? Nah, must be something else. . . .

So the ways to waste money on the awful CPSIA expands now to include Recall Insurance. Yet another reason for businesses to hang it up. And then, consumer advocates rejoice!, there will be fewer and fewer children’s product recalls to worry about – because there will be fewer and fewer children’s products available for purchase. What-a-country!

Read more here:
CPSIA – Recall Insurance Update

CPSIA – Henry Waxman to Regulate Balloons Now?

Dan Marshall reports a new legislative initiative by Henry Waxman to protect kids, namely regulating hot air balloons, a clear danger to children. Where is the media coverage for this new groundbreaking legislation? I am sure the CPSC will be glad to learn of its new TOP priority.

You have to admire Congress – there is no problem too small for them to solve. Thank heavens for Congress!

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CPSIA – Henry Waxman to Regulate Balloons Now?

CPSIA – News Round-up

What a day for news on our favorite subject!

a. A sad, almost pathetic, illustration of the ill-effects of the CPSIA is found here: “Police Switch To Handing Out Books To Children” (WISC-TV, Channel3000.com). Be SURE to check out the embedded video, too. In this article, this Wisconsin television station shares the news that police cannot give out teddy bears anymore to children who witness traumatic events like a robbery or the arrest of a parent. For years, the police had been trying to soften those blows with comforting teddy bears. But no more! The CPSIA straightened them out: “The new Consumer Product Safety Improvement Act . . . has law enforcement officers rethinking handing out stuffed animals because of the chemicals they might contain. . . . Mueller said that he used to hand out Teddy bears or other stuffed toys to children. Now, Middleton police are using the books to make sure they’re in compliance with new federal regulations.”

The local police are scared of the consequences of breaking this law: “‘One of the reasons for that is we get older toys that come in and they’re perfectly fine to give out, but we don’t know if they were made under the new requirements,’ [Middleton police Sgt. Don Mueller ] said. . . . The new federal law is retroactive so the departments like Middleton are no longer using any stuffed animals as they can be held liable.”

How charming! The CPSIA is actually taking teddy bears away from traumatized children, nice. At least we know the kids will be so, so safe now.

Btw, as you all know, our company makes educational products, including readers, so I am hardly opposed to giving books to kids. I would observe, however, that there are a couple obvious issues here. First of all, it’s an odd message to a kid that just saw a parent being arrested to receive a book. Hey, kid, go read this book and try not to think about where we’re taking your folks. Not much solace in that, certainly compared to a teddy bear. A second objection is, here’s a shocker, not everyone speaks English. Giving a book in English to a traumatized child who does not speak English or has poor reading skills could even be seen as a kind of insult.

b. For a view from the scary people behind the law, check out: “Toxic Toy Law Criticized For ‘Lack Of Enforcement” (WBZ Boston). In this alarming article full of inaccuracies, fear of the unknown is given a great deal of unquestioning credibility. “‘They don’t really know if lead or phthalates are in their products, so we don’t know either,’ said [Environmental activist Laura Spark]. Her daughters have a playroom full of toys that she can only hope are free from lead and other toxic chemicals.” In other words, Ms. Sparks doubts everything about everyone, and feels free to spread this doubt among the populace. The grounds for this latest libel of the toy industry: HealthyStuff.org’s recent spot check of pet products, automobiles and women’s handbags.

HealthyStuff.org (formerly known as HealthyToys.org) has been the subject of criticism in the past for its shoddy field work. Among other things, the Wall Street Journal published an article entitled “Guerrilla Toy Testers Take Aim at Lead” on December 16, 2008 documenting their maligning of a toy company. Now the presence of “dangerous chemicals” in pet products is enough to convince a TV station that the entire children’s products industry can’t be trusted?

To compound the sense of fear, the article also completely misstates the Target fine, asserting that it was a “knowing” lead-in-paint violation, which is patently untrue. See my recent blogpost on Target.

c. For a glimpse of the future of litigation under the CPSIA, check out “Mattel Settles Suit Over Lead in China-Made Toys ” (WSJ). Mattel has already paid big settlements in California and Arizona, as well as a serious CPSC fine, and paid many millions more for the expense of its mega recall. It’s not enough, apparently: “Co-plaintiff lead counsel Whatley Drake & Kallas said in a statement the settlement provides ‘tens of millions of dollars in monetary relief as well as significant injunctive relief.’” That’ll teach ya!

While my heart does not bleed for Mattel (“The world’s largest toy maker previously recorded charges to reserve for the litigation. The company, based in El Segundo, Calif., said final settlement won’t be material to its operating results. . . . Mattel shares were up 2.9% to $19.41 in recent trading amid a broad market rally.”), this case is at the heart of one of the worst risks embedded in the CPSIA – the possible onslaught of litigation opened up by recalls under the new law.

This problem will continue to bite the children’s product industry HARD. My previous blogpost highlighted the snarling lawyers poised at the gate, eyeing us eagerly. Oh joy.

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CPSIA – News Round-up

CPSIA – Must Read in the Denver Post

Let me say, here and now, that if I am chosen for next year’s committee, THIS GUY gets my vote for Nobel Peace Prize in 2010!

Opinion

Harsanyi: They’re tragically delicious

By David Harsanyi

Posted: 10/14/2009 01:00:00 AM MDT

How can Americans be expected to wrestle with the myriad of dangers that confront them each day? Insalubrious cereal? Unregulated garage sales? Pools of death? Sometimes it’s too much to process.

You know what we are desperately crying out for? An army of crusading federal regulatory agents with unfettered power. Who else has the fortitude and foresight to keep us all safe?

Mercifully, as The Washington Post recently reported, many of President Barack Obama’s appointees “have been quietly exercising their power over the trappings of daily life . . . awakening a vast regulatory apparatus with authority over nearly every U.S. workplace, 15,000 consumer products and most items found in pantries and medicine cabinets.”

If there’s anything Americans are hankering for in their everyday lives, it’s a vast regulatory apparatus. Hey, it’s dangerous out there.

That’s why the new chairman of the Consumer Product Safety Commission recently unleashed 100 agency inspectors to investigate whether or not swimming pools in America were equipped with a drain cover to prevent children from entrapment.

Nearly 0.9 children fall prey to this sadistic killer each year. With the compassionate guidance of federal officials, we will almost surely see this number plunge to 0.8 children per year.

It should be noted that each tragic year that passes by, an estimated 300 children under the age of 4 drown in swimming pools. Why our government sits idly by as this watery assassin targets
the most vulnerable among us is a mystery.

Don’t get me started on food. Washington will not rest until every one of our children is forcing down some gravel-based Mueslix after morning calisthenics in the name of a glorious preventive care revolution. I get it. They’re fat.

This is why I am grateful that one courageous soul has finally stood up to the menacing influence of Big Cereal. Yes, Food and Drug Administration commissioner Margaret A. Hamburg has had enough of deceitful infiltration of Cheerios, demanding that General Mills cease and desist a marketing campaign that peddles the fallacious claim that the oat-based cereal can lower cholesterol.

Why stop with oats? Trix are not only for kids, you know. Lucky Charms are nowhere close to being “magically” delicious.

What Lucky Charms does do is perpetuate the stereotype that the Irish are a bunch of oft-inebriated jerks — which everyone knows is only true about 70 percent of the time.

Isn’t there a statute we can pass in Congress to end the hate?

Then again, it’s not only those scheming Irish that are hawking their wares — unregulated — on concrete suburban driveways and inner city thrift stores across this country.

The “Resale Round-up,” launched by the CPSC, finally limits the power of these merchants of death who recklessly barter second-hand toys to unsuspecting civilians at low prices. Consider that Tonka truck — the one that you somehow outlasted — contraband. If not, you could be fined thousands of dollars.

The only question now is how did any of us survive this long?

Michael Livermore, executive director of the Institute for the Study of Regulation at New York University Law School, points out that “In the Bush administration, the problem was that the political folks were hostile to the mission.”

It is no surprise that Bush administration — a close second to Big Cereal in wickedness — was hostile to regulating the rhinestones on your kids’ denim jackets. Apparently the depths of its depravity knew no bounds.

The mission? Simple. Keeping you safe. Because everyone knows that parents aren’t equipped to keep their children safe until a bureaucrat explains exactly how it’s done.

And those parents who are neglecting their children’s safety, well, they always care more once government gets involved. Right?

E-mail David Harsanyi at dharsanyi@denverpost.com.

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CPSIA – Must Read in the Denver Post

CPSIA – Washington Post Notes Zealous CPSC Enforcement Actions

In today’s Washington Post, Lyndsey Layton wrote an article entitled “A Vigorous Push From Federal Regulators” in which the current enforcement approach of the CPSC is given considerable space. The Post notes the decision by the CPSC to make rhinestones illegal as an example of “getting tough” on the law. [Btw, for those of you playing along at home, the CPSC has yet to deign to call me or answer my letter on rhinestones dated September 17. I shouldn't be surprised, after all they have thousands of similar unanswered questions on their desks - what's so special about me?!]

The Post sums up the problem as follows: “‘It’s “shoot first and ask who we shot later,”‘ said Gary L. Yingling, a lawyer and pharmacist who worked for a decade in the FDA general counsel’s office and now represents companies regulated by the agency. ‘My concern is whether they’ve dotted their i’s, crossed the t’s, understand the statutory regulations and understand what the agency did yesterday. That’s a real concern.’”

Ms. Tenenbaum, from the same article: “We are enforcing the law; that’s what we do.”

Of course, the obvious problem here is that these regulators refuse to exercise judgment. They tend to hide behind their claimed responsibility to enforce the law (implying that this process must proceed without an exercise of judgment) and fail to explain or justify their use of force on any grounds rationally related to safety. Perhaps they feel this cleanses them of responsibility for their actions, as they didn’t write the law. It’s a classic bureaucrat’s excuse – don’t talk to me, I am just following orders. There is historical precedent for fearing government officials with this attitude.

Perhaps he CPSC will go on its merry way and put us all out of business, hobble a great industry and harm millions of kids by depriving them of essential products necessary to their development or preservation of their standard of living – but only YOU can stop them. The agency (which used to brag about its broad “enforcement discretion” back in the olde days at the beginning of the year) will respond to its Congressional overlords. You need to carpetbomb them with emails, calls and letters expressing your concern. Make sure to let them know how you have been victimized by the law and how it is harming kids in your community. We need to raise a holy stink if we want any chance to stopping the vigorous enforcers.

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CPSIA – Washington Post Notes Zealous CPSC Enforcement Actions

CPSIA – Scary Brass!

In anticipation of the Learning Curve decision about “dangerous” brass bushings, I thought I would provide some information about the uses of brass in society and its current restrictions.

According to Wikipedia, brass has been widely used since prehistoric times. Of course, brass is used in many places: “Brass is a substitutional alloy. It is used for decoration for its bright gold-like appearance; for applications where low friction is required such as locks, gears, bearings, doorknobs, ammunition, and valves; for plumbing and electrical applications; and extensively in musical instruments such as horns and bells for its acoustic properties. It is also used in zippers. Because it is softer than most other metals in general use, brass is often used in situations where it is important that sparks not be struck, as in fittings and tools around explosive gases. Brass has a muted yellow color, somewhat similar to gold. It is relatively resistant to tarnishing, and is often used as decoration and for coins. In antiquity, polished brass was often used as a mirror.” Other sites tout brass for its utility for plumbing, its most ubiquitous use.

It’s obvious that children will encounter brass regularly in their daily lives, like when they handle doorknobs or handle keys. The even-handed CPSIA, as administered by the new “common sense” CPSC, seems nonetheless to place an unusual burden on those knuckleheads like me still left in the children’s market. WE are not allowed to use brass with more than 0.03% lead content by weight (300 ppm), falling inevitably to 0.01% lead by weight (100 ppm) in two years. Here are a couple more “fun facts” about brass: brass typically has 2% lead by weight AND 90% of brass alloys (including bronze) are recycled. In other words, it is hard to control the lead content of this environmentally-friendly metal. Hmmm.

We know that brass pipes are used for plumbing everywhere, even in Mr. Waxman’s house. Children will come in contact with brass when they wash their hands in warm water that travelled through brass pipes or drink from the drinking fountain at school. Oops, did I mention high levels of lead in drinking fountains? Like the 92% in LA Unified School District Schools that remain unrepaired to this day? Sad but true. The LAUSD situation is apparently not NEARLY the crisis presented by brass bushings or brass connectors in toys, clothing or shoes. The CPSIA in its infinite wisdom has determined that children’s businesses should close or their owners should go to jail if they use such things – but other uses of brass in daily life are fine, just fine.

But what about brass in those other uses – are they restricted at all? According to Wikipedia, keys must now contain less than 1.5% lead by weight in California to avoid Proposition 65 labeling. To clarify, keys with greater content than 1.5% are still legal to sell in CA but would need to be labeled under Prop. 65. The approved lead content in keys is 50x the legal limit on lead content in brass in children’s products. Yeah, that makes sense. And in California and in Vermont, brass plumbing fixtures and pipes used to convey water for human consumption must have not more than 0.25% lead by weight by January 1, 2010 – 9x the legal limit on lead in brass in children’s products. [The CA limit is a weighted average, so individual components can exceed this limit.] I do not believe this law requires retrofitting existing California’s pipes. The current limit on lead in California pipes is 8% by weight, a mere 267x the legal limit on lead content in brass used in children’s products.

I cannot find any other restrictions on brass in any products in our country. I probably missed something but no restriction will exceed the zeal of the CPSIA. It is unique as a regulation, both for its sense of sanctity and its overreaching, penal ineffectiveness. Trumpets don’t have legal lead limits, despite being made of brass and intended to be mouthed. Leaded fountains remain in schools across the country, and bad plumbing is everywhere. Nonetheless it is the children’s product industry alone that must endure upheaval from the loss of brass as a basic material. Need I mention that brass was at the heart of the pens crisis earlier this year?

When the CPSC makes its inevitable decision to shut down Learning Curve’s business over its use of brass bushings, they will intone that it’s not their fault, the darned law made ‘em do it. The leadership will then later issue some press releases about vigorously enforcing the law and making everyone safe. There will be no acknowledgement of their role as a tool in the wanton destruction of a valued industry. Not their fault. . . .

Wake me when the nightmare is over.

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CPSIA – Scary Brass!

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