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CPSIA – Illinois Politics in the Gutter

August 25, 2010 by Rick Woldenberg, Chairman, Learning Resources, Inc.  
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742 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are 69 days left until Election Day.

After two years of banging my head against the wall on the CPSIA, it has become clear that much of the problem is in Congressional leaders from two states, California (Waxman, Boxer, Feinstein) and Illinois (Durbin, Rush, Schakowsky). [I hope I'm not forgetting any other "worthies".] I live in Illinois. The fact that our state is part of this disaster is no surprise. I get to follow the local political goings-on in the paper and on the Internet. Of course, people talk, too. We sure know how to pick ‘em in Illinois . . . .

I think it’s well-known that I am not a big fan of Ms. Schakowsky for her cheerleading for the noxious CPSIA and her leadership of the gang that stymied any effort to fix that awful law and its regulatory by-products. And it’s hard not to be utterly disgusted by her legislative agenda, which earned her the rank of NUMBER ONE SPENDER IN CONGRESS and which has been a job-killer of the first order. She provides many reasons to dislike her passionately . . . but did you also know that her husband is a FELON? As a lawyer, I have very little sympathy for felons. One never becomes a felon by accident. [As a matter of fact, the prospect of being accused of a felony under the CPSIA is one of my hottest "hot buttons" as I deeply resent that our government could make something that inappropriate possible under federal law.]

Yes, in fact, Schakowsky’s husband is a crook. Robert Creamer was convicted of financial crimes in 2005 (check kiting and tax evasion, a $2.3 million fraud committed against nine financial institutions to fund his salary, among other things) while Schakowsky was a sitting member of Congress, served five months in the pokey for his felonies and then was placed under house arrest with his member of Congress spouse for 11 months. Perhaps you think this is some sort of Illinois sitcom or perhaps a new kind of reality show. Here is Creamer’s jail release record, if you are curious.

Creamer’s criminal record is absent from his bio, interestingly enough. Anyone shocked to learn that Creamer was an important advisor to our very own Governor Blagojevich, a fellow felon? Creamer has quite a business going as a political consultant – Democrats from all over the country clamor for his help. Hmmm.

And the Illinois sewer continues to spew to this very day. Mr. Creamer, who was a critical thought leader and trainer for the 2008 Obama campaign (Obama is another Illinoisan with a CPSIA taint), is now apparently part of Democrat Alexi Giannoulias’ campaign for Senate against Mark Kirk. Here’s a still of Alexi Giannoulias posing with Mr. Creamer:

Also conversing with Mssrs. Giannoulias and Creamer is lobbyist Larry Suffredin. Here’s what Wikipedia says about his lobbying practice: “Suffredin is a registered lobbyist with Cook County, the City of Chicago, and the State of Illinois. Suffredin lobbyist clients include resort and casino company MGM Mirage, owners of the Grand Victoria Casino in Elgin, Illinois, and Penn National Gaming, owners of the Hollywood Casino, Aurora, Illinois, the Illinois Alliance of Competitive Telephone Companies, the Donors Forum of Chicago, the Illinois Arts Alliance, and Illinois Citizens for Handgun Control, the Chicago Bar Association, and Kankakee Regional Landfill LLC. He is also a registered lobbyist for Abbott Laboratories, Nursepower Services Corporation, and Quest Diagnostics.”

I assume the three of them were discussing the weather. “Pretty sunny out today, Bob.” “Larry, did you see that rain cloud as you drove in?” “Alexi, surely it won’t rain on your parade!”

This still is from a Giannoulias campaign video pitching an endorsement by Jan Schakowsky. Perhaps there are a few dots to connect here. . . . Giannoulias chats with Creamer at the 1:45 point in the video, check it out yourself:

An Illinois Senatorial candidate hanging out with a felon who stole from banks? Hey, isn’t that practically the very question that dogs Giannoulias in this campaign? How ironic! And then there’s the issue of members of Congress who consort with thieves. This is even more ironic given the Dems’ practice this year of viciously bashing banks and bank bailouts. Perhaps defrauding banks is okay, but keeping them afloat is not. there an odor in the room???

What integrity! How inspiring! Can’t wait to vote . . . .

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CPSIA – Illinois Politics in the Gutter

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CPSIA – What is a "Substantial Product Hazard"?

May 17, 2010 by Rick Woldenberg, Chairman, Learning Resources, Inc.  
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How does the CPSC decide which items to recall and which ones to permit to remain in the market?
The basis for a CPSC recall is found in Section 15(c) and 15(d) of the Consumer Product Safety Act. The CPSC is only entitled to recall items which present a “substantial product hazard”, defined in section 15(a) in relevant part as: “a product defect which (because of the pattern of defect, the number of defective products distributed in commerce, the severity of the risk, or otherwise) creates a substantial risk of injury to the public.“
Can the CPSC designate anything it wants as a “substantial product hazard”? Not in my opinion, if this legal standard is to have any meaning. Some things are substantial product hazards, and some things are lesser hazards. Those lesser hazards may still be of concern to the CPSC, but the agency lacks the legal authority to order their recall. Other solutions, such as public warnings or voluntary action by the industry, can appropriately address less severe risks adequately.
It gets tricky when there are injuries to children. [This legal dilemma has previously been parodied by The Onion - eerily anticipating the recall of dart guns pictured here.] If there are injuries or deaths, will the product always be considered a “substantial product hazard”? What if the accidents occur because of product abuse, recklessness or age-inappropriate behavior? If injuries under those circumstances constitute a “substantial product hazard”, will ALL similar abuses of products be considered a “substantial product hazard”? I would think this line of reasoning would make many things, including guns, knives and even forks, suitably for urgent recall. What about broken glass – if a kid eats broken glass or ceramic, wouldn’t he/she be terribly injured? Should the CPSC now recall everything made of glass? What about newspapers – paper can burn and cause injury. Recall the Chicago Tribune? [This is my fantasy.]
And if you can go this far, why must the abuse or inappropriate behavior even have to take place? Why not recall items just because you can imagine an injury occurring from an abuse that may have never happened? Is that a “substantial product hazard”? Is this pure fantasy or could recalls occur on this basis? Read on.
When there are injuries to kids, emotions run high, and the “substantial product hazard” standard expands. Add in newspaper headlines, and anything seems possible nowadays. Let’s not forget that in the last eleven years, there has been ONE death from lead, when a four year old swallowed a lead jewelry charm – and, BINGO, we were gifted the CPSIA as a result. The law gives a lot of wiggle room to the motivated regulator. Some recent recalls call into question whether the substantial product hazard” standard is being observed at all.

Case 1: Cadmium jewelry. It is accepted that cadmium has been used in jewelry for decades, although not widely. Nevertheless, to my knowledge, there has never been a reported case of “cadmium poisoning” from jewelry. Pediatricians have virtually no awareness of cadmium poisoning as a health threat. The low probability of childhood injury from cadmium in children’s products is also evidenced by the CPSC’s lack of data on the health impact of ingesting cadmium in this form – it never came up until the Associated Press sounded the “alarm”. The available data on cadmium relates only to workplace exposure or airborne cadmium.
It is equally well-accepted that children inappropriately mouth jewelry. It is also known that children can and do swallow jewelry, which happens thousands of times each year. No child thinks jewelry is food – but these things happen.
Cadmium is in (some) children’s jewelry. Kids are known to mouth and/or swallow jewelry. Cadmium is a dangerous metal and can be harmful if swallowed. So, does this mean that cadmium in jewelry a “substantial product hazard”? Given that there has NEVER been a reported case of injury, it is hard to describe the risk of “severe” or even “substantial”. It is best described as “possible”. Yet, the CPSC has recalled cadmium jewelry three times now.
Unfortunately, the CPSC has chosen to respond to the stimulus of newspaper headlines and the ill-informed action of state legislatures, rather than the discipline imposed by its own statutory legal standard. By labeling this hazard “substantial”, the CPSC creates many problems that could have lasting impact on the market. It imposes high costs on the industry for something that may not matter much, dilutes the impact of recalls of more dangerous products (have you noticed that the pace of recalls has really picked up at the agency – does that help or hurt the CPSC’s mission?), and diverts the resources and attention of the CPSC staff away from larger and more pressing issues.
Perhaps worst of all, contrary to the assertions of Inez Tenenbaum, the confidence of the marketplace is being eroded by the deluge of recalls. Who can you trust anymore? Is the message that you can only trust Mother Government? If so, is Mother Government planning to take over the manufacturing of all children’s products next? No one will have enough capital to survive this style of “regulating” for much longer so they better get ready to take over. This is no market stimulus program.

Case 2: Dart Guns. I am in the educational toy business and have children of my own. So I am prejudiced – I have no idea why anyone makes toys of this nature. Our company certainly doesn’t, and we never allowed them in our home either. However, in our society, guns and dart guns have a certain appeal and they apparently sell well. Family Dollar Stores sold 1.8 million units of a small dart gun set for $1.50 in recent years (pictured above). It looks pretty generic to me, and for $1.50, it is clearly a cheap, disposable novelty toy.
Sadly, two boys (9 and 10 years old, respectively) died in separate incidents in which they were chewing on these darts and aspirated them. The dart suction cup blocked their airways, leading to tragedy. These terrible accidents are sad confirmation of the unnecessary risk posed by dart guns as toys. But do these circumstances meet the “substantial product hazard” standard? If they don’t, how can the CPSC recall this item?
My argument is that while this toy is very objectionable and apparently capable of harming children, I do not know if they rise to the level of a “substantial” product hazard just because of the two accidental deaths (especially in light of 1.8 million sets sold, plus many millions more of similar items already in the market presenting the same “risk”). The statute does not provide that deaths automatically constitute substantial product hazards. Presumably, if that’s what Congress meant, it might have said so. The tragic accidents occurred when two children were doing something they shouldn’t. They were also at an age where they were supposed to know better. That doesn’t make the loss of these boys any less painful but it does suggest that these incidents were terrible accidents rather than substantial product hazards. It may be that the families’ remedies should be in the courts, not via the CPSC. In any event, if we (as a society) don’t like dart guns, that’s fine – we should ban them. Notably, the CPSC is not taking that position in this case.
Recalls cost a lot of money, and it is naive to believe that the market will not respond to an erosion in the legal standard for recalls. Legal standards are an important part of the “rules of the road”. If the rules change, the entire game changes. In this case, if we are all exposed to the risk of a massive, multi-year recall of our legal products because of accidents and tragedies arising out of misuse, we will have to change our business models in ways very disadvantageous to consumers. No one has the profit margin to accommodate these unplanned and random expenses. We have no answer for this business problem – we are not clairvoyant.
For small, niche businesses like ours, the erosion of expected legal protections is very scary. These recalls are a gross expansion of capricious government power, no matter how scary cadmium jewelry is or how much we might be angry at dart gun makers. With an increasingly reactive CPSC demanding recalls to meet the expectations of newspaper headlines, randomness is complicating business planning and generally demoralizing the regulated community.
I may sound like a broken record, but this style of government is stoking voter anger. We have little recourse over these policies or over the intransigence of the Dems in Congress other than in the voting booth. I, for one, won’t forget all this. We need a new sheriff in town.

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CPSIA – What is a "Substantial Product Hazard"?

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CPSIA – Crain’s Says We’re About to Get Sued

September 30, 2009 by Rick Woldenberg, Chairman, Learning Resources, Inc.  
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In this week’s Crain’s Chicago Business, the news periodical speculate on which mass tort action could succeed asbestos as the next gravy train for plaintiff’s attorneys. And guess who makes a guest appearance??? Asbestos and the legal black hole By: Steven R. Strahler September 28, 2009 Asbestos has lived up to its Greek origin — “inextinguishable” — on legal and medical landscapes alike: Mass tort actions involving asbestos have bankrupted more than 60 makers and users of the once-widespread insulating material, starting with Johns-Manville Corp. in 1982 and claiming Chicago’s USG Corp. in 2001. Odds are, corporate defendants won’t see another mass tort topic like it: more than 700,000 claims pending against 8,000-plus defendants and estimated costs exceeding $250 billion. Because asbestos-related symptoms can take 30 years or more to manifest, the litigation is expected to last until mid-century. . . . . “No, there is no asbestos-like gravy train pulling up in front of the American Bar Assn.,” says Robert Hartwig, president of the Insurance Information Institute. Still, he says, “there are great unknowns, like climate change and latent manifestation of occupational disease.” Among the most likely post-asbestos targets for plaintiffs’ attorneys: . . . . Product liability The Consumer Product Safety Improvement Act of 2008 requires independent testing of children’s products, including cribs and metal jewelry, empowers state attorneys general to file federal actions and increases penalties, all of which will boost opportunities for mass-tort suits.

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CPSIA – Crain’s Says We’re About to Get Sued

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