CPSIA – Age Limits under the CPSIA

As the House continues to dicker over how to amend the CPSIA (yes, they will give it a go soon, rumor has it), I thought the website Woot.com neatly illustrates the absurdity of the arbitrary and over-protective age grading rules inspired by Congress and the maniacal CPSIA. [Thanks to loyal reader Ben for this story!] In this case, the subject is the magnet rules spawned by the 2007 Magnetix deaths.

Perhaps you remember that last year the CPSC “in cooperation with” a company called Maxfield and Oberton LLC announced a recall of “Buckyballs”, a magnetic ball toy for age grading issues. What age grading issues, in particular? To quote the CPSC: “The high powered magnets sets were labeled “Ages 13+” and do not meet the mandatory toy standard F963-08 (effective August 17, 2009) which requires that such powerful magnets are not sold for children under 14. Magnets found by young children can be swallowed or aspirated. If more than one magnet is swallowed, the magnets can attract each other and cause intestinal perforations or blockages, which can be fatal.” [Emphasis added]

Woot.com sells this product and I love their spin on this safety “issue”:

“Buckin’ Magnets, How Do They Work? If you’re 14 or older, Buckyballs promise hours of addictive magnetic fun! If you’re 13 or under, they promise fatal intestinal blockages!”

They continue to explain:

“When exactly does a child become an adult? Different societies have answered this question with different milestones . . . . Now the Consumer Product & Safety Commission has settled it once and for all: a child is an adult when they can be trusted not to accidentally swallow tiny but powerful magnets. This past spring, the CPSC told the Buckyballs people that they had to yank their compulsively play-withable little magnetic to- uh, ‘desk decorations’ to re-label them ‘Keep Away From All Children’. It seems the previous label of ‘Ages 13+’ did not comply with consumer guidelines that ‘such powerful magnets are not sold for children under 14′, because even 13-year-olds were liable to swallow them and suffer perforated or blocked intestines. Yep, that year from your 13th birthday to your 14th makes all the difference. ‘Consumers should take the Buckyballs® high powered magnets away from children under 14 immediately,’ quoth the CPSC. Kids swallow the darnedest things!” [Emphasis added]

Indeed.

Of course, this illustrates the U.S. safety mania at its worst and its most damaging. Is this product actually dangerous? If it is, why does the CPSC allow it to remain on the market? Does labeling actually “solve” the problem? If there really is a difference developmentally between a 13-year-old and a 14-year-old on mouthing toys, I think it is incumbent on the CPSC to tell the public what it is. In the CPSC publication, “Which Toys for Which Child“, the agency acknowledges what is generally accepted as true, namely that children over three don’t put objects in their mouth: “Most children in [the 3, 4, 5 age group] can begin using toys with smaller components. If child is still mouthing objects, select toys with without small parts.” Duh. But 13-year-olds? This is regulatory hypocrisy at its worst.

As long as the mania continues, and as long as Congress continues to try to meddle either legislatively or by applying political pressure to the agency, we will continue to see economic victims and economic losses. Jobs will be lost. And the safety zealots will never be able to prove that anyone is safer.

The only thing that will be beyond dispute is that there are fewer companies making fewer products for sale into a smaller market. In other words, the law and the CPSC will have engineered their very own mini-recession.

Nice!

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CPSIA – Age Limits under the CPSIA

CPSIA – New HTS Import Tariff Schedules Due to CPSIA

Please note the following alert from the TIA on new harmonized tariff schedules (HTS) for toys. This change was requested by the CSPC and believe me, it’s because of the CPSIA and their fixation to zap you at the port. You will also note that this goes beyond toys, including jewelry and festive articles. For all I know, it goes well beyond the TIA’s list. You should consult with your import specialist or your lawyer. The age grading sets up the agency to police the ports with ever greater care and scrutiny.

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CPSIA – New HTS Import Tariff Schedules Due to CPSIA

CPSIA – ICPHSO Update on Recall Law and Procedures

This panel discusses technical legal issues. You need to hire a lawyer to explore these issues. This blog is not a substitute for qualified legal representation. As previously noted, I am working off my notes, too. Please proceed with due and appropriate caution.

Panel included

• Eric Stone, K&L Gates LLP
• Georgia Ravitz, Arent Fox LLC
• David Baker, Law Offices of David Baker LLC

Eric Stone: Section 15(a) of CPSA limits the agency’s authority to pursue only items presenting a substantial risk of injury or death. The agency has the right to sue for the same thing under Section 15(c) (mandatory recalls, very rare).

The prior law allowed manufacturers to elect the form of recall program. The CPSIA changed that, and gives the CPSC the authority to make those choices now.

Under Section 15(j), the agency can make a “substantial product hazard” findings across an entire product category, essentially by way of rulemaking. There are certain prerequisites to taking this action. The poster child for this is drawstrings in hoodies.

New violations of law INCLUDES reselling recalled items EVEN IF it was wholly voluntary or initiated entirely by the company without CPSC judgment. That recall is also enforceable in 51 jurisdictions. [Something to think about before you climb on the Fast Track Recall freight train . . . .] False statements or “attempting to mislead” the CPSC has dramatic implications under the new law. Don’t go there . . . .

New penalty factors include a failure of the violator to respond “in a timely or complete fashion to the CPSC’s requests for information and immediate action”. Hmmm. Felony penalties now include asset forfeiture. Yep, that baby’s raising its head again. In theory, the government can take your assets which it believes you have gotten through ill-gotten gains, like your house, your business, your buildings or plant. Hmmm. Love that CPSIA . . . .

David Baker:

1. “Substantial Product Hazard” – no definition in the statute or in the legislative history. CPSC and the courts (Mirama Enterprises case) have interpreted it. Factors include death, grievous bodily injury (mutilation, dismemberment, severe burns, injuries likely to require extensive hospitalization). He asserts that MANY of the recalls initiated last year do NOT meet this standard. [RW: Where have I heard that before???] More than 1/3 of recalls do not involve injury AT ALL and many of the others fall far short of “grievous bodily injuries”. DB: Should the CPSC be taking these cases? Should they simply say thanks for the report but no action is required?
2. Fast Track versus Slow Track – Express lane to a press release. No “finding” of a defect, possibly helpful in a product liability case. Fast Track cases aren’t always so “fast”. Are there cases in FT that because they have no injuries shouldn’t be there? Is there still a slow track?
3. Penalty phase – “NO GOOD DEED GOES UNPUNISHED.” Every recall files is reviewed by the General Counsel’s office for late reporting, including those without injuries. There are MANY civil penalty cases being prosecuted out there now. [This could be you, baby.] Is the CPSC going after its own constituency? There is a very accomplished ex-U.S. Attorney now on staff at the CPSC (I think he is referring to Mary Murphy).

Ouch.

Last to present is Georgia Ravitz on Section 6(b) (unilateral press releases by the CPSC and their coercive power). Information that manufacturers submit to the CPSC are protected from disclosure to the public. Section 6(b) is the section governing procedures for releasing such information. [This is why Sectionn 6(b) is continually under attack by consumer groups. Their need for information trumps the interest of manufacturers in this confidentiality pledge. . . or at least so they say.]

CPSIA amendments to Section 6(b) gives the agency the right to issue unilateral press releases. The CPSC must “find” that the situation is so urgent that public interest in immediate release of information about a product hazard over the time permitted for review under Section 6(b).

Gives examples of such unilateral releases. The first one related to Simplicity bassinets. [They were already bankrupt and their assets had been auctioned off.] Other examples include the Witco “Recall to Repair” stadium light poles. GR notes that there is some concern that this release evidenced the CPSC acting in a rushed manner.

GR wondered aloud whether the right to preemptively issue press releases is being used “appropriately”. [Georgia is very polite.] She quotes from the legislative record to note that Congress wanted to give the CPSC the ability to inform the public about “hazardous products”. In other words, there must be certainty that the product is actually hazardous. She quoted from a speech from Chairman Tenenbaum where she indicated that the agency will use its powers to get its way, and then quoted from my December 2010 Senate testimony on coercive incidents at the agency. . . .

GR says that if the new powers under 6(b) are being used to coerce agreement, then the provision is being misused or being used in a way not intended by Congress. [I agree.] Coercion stifles meaningful dialogue. She thinks this provision should be used as a last resort and only use when there is no responsible party left (bankruptcy) or when the violator is clearly abusing the process through foot dragging.

GR calls for a return to “the way it used to be”, namely a more open and less coercive deliberation at the agency over disputes. David Baker indicates that he has NEVER overturned a Preliminary Determination letter. [CPSC as judge and jury. That's a tough combo to overcome.]

Eric Stone: How do you overcome the impression that a company is “evil”? Baker – meetings at the agency are much rarer today, most communciations by phone call or email. Leads to more disagreements and makes disputes harder to resolve. Speed leads to this manner of communication. GR: My experience is that expressing a cooperative attitude with CPSC compliance officers will typically be reciprocated.

Gotta go catch my plane . . . .

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CPSIA – ICPHSO Update on Recall Law and Procedures

CPSIA – ICPHSO Update on Strategic Plan Panel Discussion

Next up (after audio problems are “fixed”) is the panel discussion on the Strategic Plan. The panel includes:

• Ken Hinson, Executive Director (moderator)
• Matt Howsare, Chief of Staff to Chairman Tenenbaum
• Cheryl Falvey, General Counsel, CPSC
• Jay Howell, Director, Hazard Identification and Reduction, CPSC
• Richard O’Brien, Director, International Programs and Intergovernmental Affairs, CPSC
• DeWayne Ray, Dep. Dir., Hazard Identification and Reductions, CPSC
• Marc Schoem, Dep. Dir., Office of Compliance and Field Operations, CPSC
• Neal Cohen, Small Business Ombudsman, CPSC
• Scott Wolfson, Dir., Information and Public Affairs, CPSC

Update on rulemaking (CF): Final rules issued in 2010 – crib rule, database rule (launching on March 11), “Children’s Product” rule and the civil penalty rule. Also, the mandatory recall rule, infant walkers and bath seat rules.

Draft rules: bike standard, two 15(j) rules on substantial product hazard list (drawstrings and hair dryers), component rule, 15 Month Rule and bassinets.

Rules coming up: cadmium rule (deferred for six months), toddler beds, lead paint and HD-XRF test methods, bed rails, bunk beds, swings, bicycle rules, testing and certification rules, 15(j) rules, 100 ppm lead standard, and notice of proposed rules on play yards and another “safe sleep” initiative category.

[One thinks that after they regulate bunk beds swings, bikes and so on that all the fun will be gone from childhood, bringing to mind an effective cure for cancer (killing the patient). Well, at least kids can still play with rocks . . . . OMG, rocks have lead in them!]

JH: They intend to double the number of rules in place in 1990. [Nice! More rules, more safety!] Rule-making activity is “abating” but have a growing compliance and enforcement workload. The burden is “shifting” to the compliance team. Working with all stakeholders to make sure they are compliant. [Safety is not the word used but instead "compliant". The notion is that compliance is tantamount to safety. Anyone want to discuss this topic?]

Why did the agency take such a “collaborative” approach to the Strategic Plan? MH – The “comprehensiveness” of the collaborative process was incredible. Went through all sorts of “painstaking” efforts to interview so many people in this room. [Perhaps Matt is referring to Raachel Weintraub - who else needed to be consulted, after all?] The Strategic Plan reflects the “consensus” view of the agency’s strategy. The “collaborative” process was designed to guarantee “buy-in”. The Chairman’s focus under the Strategic Plan is the preventative portion. Spoke of Neal Cohen’s area as a focal point. [There's an insight - we small business people are the problem! Thank heavens Neal Cohen can educate up.]

MH also points to “boots on the ground” in China as another feature of the CPSC’s efforts to prevent disaster. He did not say what kind of boots those might be. Jackboots?

Tell us about small business ombudsing, Neal! NC: Start by listening. There’s a lot of confusion, and there are ways to use the work done by the CPSC “to your favor”. [Hmmm, I'd like to know more about that.] NC: I’m not a policy maker at the agency. [RW - that's the rub, ain't it?] NC: I am spreading the word about the problems within the agency. NC has his own website (www.cpsc.gov/sbo). Putting out “plain English” documents to explain the law and the rules. Three tips on compliance: (a) know your product and your supply chain, (b) proactively educate your suppliers, and (c) don’t “assume”. [This is sound advice. It doesn't protect you from anything, however. Were you to follow Neal's advice, it would count for NOTHING if you get recalled. It should but it won't.]

All kidding aside, people have nice things to say about Neal. What he can achieve remains to be seen, however. I have yet to hear about him making problems go away. Most of the problems people are dealing with are nonsense, so if he could move heaven and earth, I think I would start to hear about him going to bat and getting something done for these beleaguered little companies.

International (RO’B): No sign of harmonization efforts in Mr. O’Brien’s presentation. He is leading the effort to get other world regulators to join us in our safety mania.

Scott Wolfson’s turn – “What about consumers and how do they fit into this?” SW: Pool Safely Initiative shows what we can do if we have money to get our messages out. [How have injury statistics changed, Scott? WS: Won't know for years. . . .] Concerned about “sustainability” ($$$). We’re hitting the road to get the message out. Have built a network to get info out. Working on a new logo.

Scott did not update us on Aston Kutcher. Maybe during the Q&A . . . .

RW: This all sounds good as far as it goes. Of course, he does not discuss the impact of OTHER decisions his office makes, like communication of “hazards” like cords on baby monitors or recalls of Shrek glasses. It’s all well and good that the CPSC has a couple billboards up about pool safety, but what about the mania on lead and their communication of those hazards?

Why does the CPSC need to train manufacturers? Why is it the agency’s role? JH: There are various levels of sophistication out in the marketplace. To drive the prevention effort, need to make sure manufacturers understand the rules of the road. [RW - this is one of my original suggestions for the agency in my first speech on the CPSIA. Failures in outreach is one of the main causes of the storm behind the CPSIA.]

JH: We are focusing our efforts around priorities to increase impact and to avoid dilution.

Jay Howell usually sounds pretty sensible. It would be great if the agency sounded more reasonable more of the time. Perhaps Jay can be an agent in that process.

MS: Trying to reduce the time taken to negotiate recalls. [RW: Two-edged sword here, since the concept of due process is flying out the window with the justification that they are "saving lives".] MS: If you’re right, you’re right – just convince us. Also need to get information out to consumers quicker.

RW: This is agency policy talking, probably not Marc Schoem.

SW: We are going out on all platforms, like Twitter, news media, Facebook, blogs – multiple times. MSNBC is doing a monthly “round-up” of recalls.

There was time for only two questions from the audience. Filibuster! I got to ask one of them. Here’s my question:

“I have testified five times at the CPSC, three times at your invitation. I have repeatedly told you that your policies and the CPSIA together are killing small businesses, killing products and killing markets. Last week, the bicycle industry testified that large bike manufacturers have reduced their product lines and small companies have left the market. Given this testimony, what do you think the agency’s responsibility is to small business and how does the Strategic Plan relate to protecting the right of small business to sell children’s products?”

KH: That’s why we have had such a collaborative process in the Strategic Plan. We need to identify hose issues and figure out a solution. RW: But we’re dying now. KH: We do what we do and violative products have to come off the market.

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CPSIA – ICPHSO Update on Strategic Plan Panel Discussion

CPSIA – ICPHSO Presentation on CPSC Strategic Plan

You know they have a strategy . . . .

I am at ICPHSO for the next couple days, reporting from this safety convention “live” for the third year in a row.

As in the past, I am working “live” and off my notes, so take it for what it’s worth. I may make some mistakes (which I regret), but heck, this is a blog. According to my critics, you shouldn’t believe half of what I say anyhow . . . .

The Opening Session today featured Ken Hinson, the Executive Director of the CPSC. Ken is a relatively new addition to the senior staff of the agency.

Mr. Hinson argues that employment at the CPSC is directly correlated to safety. Reported incidents are skyrocketing, but investigations are declining. This statistic does not capture what the agency is DOING as a result of those investigations, notably.

The agency is “extremely excited” about the product database. One wonders what they are so “extremely excited” about, given the extensive testimony about the problems with the database. Wayne Morris of AHAM testified in Congress last week that when erroneous information is posted, as it certainly will be, there is NOTHING that can be done to remove it from the Internet. He compared the database to a “blog”. A blog! I testified in the same Congressional hearing that the effect of the database will be to encourage consumers to NOT communicate directly with us about product issues but instead to post to the database, and since the CPSC restricts our access to this data, it is likely that the database will INCREASE safety risks.

Lots to be “extremely excited” about, indeed!

The CPSC Strategic Plan is now online. I requested to be interviewed as part of the process of developing the Strategic Plan, as I was invited to do, but somehow they failed to call. Hmmm.

Five goals:

1. Leadership in Safety
2. Commitment to Prevention
3. Rigorous Hazard Identification
4. Decisive Response
5. Raising Awareness

First goal: Will create annual plans to address the most pressing merging safety hazards. Supposedly will be working closely with stakeholders, you know, like readers of this blog. Okay, not us, but somebody. I bet consumer groups might be on that list . . . .

Second goal: They want us to “build safety into consumer products”. Presumably the CSPC thinks this is a new idea because with an ex post facto approach to safety, any injury means the manufacturer screwed up. We’re always wrong, thus inviting the government to get involved in what we do to make things “better”. As Ronald Reagan said, the most frightening sentence in the English language is “We’re the government and we’re here to help!”

They’re going to give us proactive education on how to design our products more safely and will create incentives to encourage us. I can imagine those “incentives” might be based on penalties imposed and threats made by the agency in recent years.

Third goal: This is the scary one – they will be looking deeply for hazards, like cords on baby monitors . . . . Presumably, when they find a “hazard”, well, you know what happens next. They are working on increasing their ability to obtain, analyze and act on information of “hazards”.

My problem with this is that the definition of what constitutes a “hazard” has been lost. Perhaps this is a picky point, but they don’t have the legislative authority to do whatever they want. They are restricted to work on SUBSTANTIAL PRODUCT HAZARD. In fact, they are limited by the law. Someone should tell them about this.

Mr. Hinson: “This is all about speed.” There’s a confidence builder for me – hasty judgments are always better by definition.

Fourth goal: The CPSC plans to act fast and “hold manufacturers responsible”. It’s all about “speed”. Again, agency policy seems to be to encourage hasty judgments. Based on industry chatter, this policy does not involve dithering or considering defenses or due process. The CPSC is judge and jury, legislature and executive branch. In fact, often it is a junior and inexperienceds staffer who is judge and jury. See how you like it when you are on the receiving end.

This will be SUPER until all products are finally killed off.

Raising awareness is critical to empowering consumers, so says Mr. Hinson. I question whether empowering them to panic or make judgments based on scant, erroneous or inappropriate data is a really good idea or good public policy. The “good news” is that they have set this plan in motion, so your opinions and mine don’t matter.

Fifth goal: The raising awareness goal certainly incorporates the wonderful new database. Likewise, Neal Cohen and the small business liaison office is part of this plan.

Btw, raising awareness is a really good goal for the agency but if it doesn’t know what a hazard is, or have good processes to encourage trust among manufacturers, they can do a lot of damage with their clean heart and good intentions. Sucking up to left wing politicians and consumer groups does not necessarily produce good public policy. The agency might consider taking more seriously criticism of its activities and actually taking on board suggestions by knowledgeable stakeholders, including ex-CPSC staff.

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CPSIA – ICPHSO Presentation on CPSC Strategic Plan

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