CPSIA – Election Day is FINALLY Here

810 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA.

ELECTION DAY IS TOMORROW.

[Here's the long version of this clip, with people screaming out the windows "I'm as Mad As Hell and I'm NOT going to TAKE THIS anymore!"]

Tuesday is the BIG DAY, guys. We have an opportunity to pay back the perpetrators of the CPSIA in the voting booth. Don’t miss this opportunity – it’s your right as a citizen, speak out and tell them where you stand. Ideally, make them PAY with their jobs for their refusal to listen.

I have thrown my efforts into two Congressional campaigns – Bob Dold running in Illinois’ 10th district against Dan Seals, and Joel Pollak running in Illinois’ 9th district against CPSIA perpetrator Jan Schakowsky. As you know from this space, I have given up on the process of “dialogue” – no one in the Democratic Party will listen anymore (if they ever did). The next phase is politics. If they won’t listen, we will throw them out.

Tomorrow is the day we measure what we have achieved.

It didn’t have to be this way. When Inez Tenenbaum came on board as Chairman of the CPSC, she promised to engage in dialogue and to listen to all stakeholders. As far as I can tell, that was a bald-faced lie. If it wasn’t a lie, it turned out to be completely untrue. Sham processes like two-day workshops and comment periods were thrown up as a smoke screen to cover up a scheme to impose draconian regulatory change whether we wanted it or not.

Listening isn’t this CPSC’s forte. Nor is data analysis. With the cram downs evidenced in the final rules on the definition of “Children’s Product” and the public database, it is perfectly clear that Ms. Tenenbaum has no interest in views that diverge from hers, whether based on fact or data or reasoning. She’s on a mission – and there’s hell to pay if you stand in the way. Just look at her penalty record.

The next big event at the CPSC is implementation of the final rules on component testing and testing frequency/reasonable testing programs. This is coming SOON – all to ensure that the stay on testing requirements can be lifted in February – you know, so we can all be so damned safe. [Do you have a sense, by the way, that we are UNSAFE today - despite the stay? Oh yeah, that's data and reasoning again. Pah!] When they cram down those rules, your goose is cooked.

You’ve been warned (many times).

So tomorrow is your big chance to tell the Democrats that you aren’t going to take this anymore. That goes double for the people principally responsible for the CPSIA, like Jan Schakowsky, Henry Waxman, Bobby Seals, Barbara Boxer and other Democratic “luminaries” up for reelection. Here is a list of the members of the House Committee on Energy and Commerce – I hope you will vote AGAINST any and ALL Democrats on this Committee. NONE of them did ANYTHING to help us despite our pathetic pleas for help literally for years. They have PROVEN they don’t care – and you need to throw them OUT.

People ask me – how can I be so certain that the Republicans will help us? Will they be better than the Democrats, really? Aside from the fact that some Republicans have gone to great lengths to try to help us, taking political risk along the way (something I will never forget), I can say this with CONFIDENCE – I know EXACTLY what to expect from the Democrats. If we don’t make a change, we’re goners. So the Republicans are my choice and my strong recommendation to you. When they are in power, we’ll see what they will do. I am confident, but as voters, we all must remember that the proof is in the pudding. In the meantime, we need to make some serious changes NOW.

After the Election winds down, I have a long “to do” list and will publish a number of essays on CPSIA subjects that deserve your attention. In addition, we must engage in dialogue on how to fix the mess Ms. Tenenbaum and Mr. Waxman have created. That’s to follow . . . but as for now, you must vote.

MAKE THE CPSIA PERPETRATORS PAY WITH THEIR JOBS.

Read more here:
CPSIA – Election Day is FINALLY Here

CPSIA – Let’s Keep Sucking Our Thumbs . . . .

803 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 7 days left until Election Day.

Seven days to go! Go, baby, go!

I just found this article documenting the pain of some Illinois toy craftsmen owing to the CPSIA. Imagine, these guys are being held up by the noxious CPSIA and are essentially shut down. I have been reading these articles for almost three years now. Ho-hum.

Have any of you heard of Mattel or Hasbro going out of business because of this law? Me, neither.

Articles of this type are discouraging on several levels, not least of which is the lack of comprehension of almost everyone who gives a quote. The scale of the problem for small business, even the very nature of the problem presented by the law is unclear, apparently. No one asks the right questions like – why are we doing this? What are we achieving? Is it worth the cost? Can we even measure what we have accomplished?

Of course, the answers to these questions are all negative. No one knows why we’re doing this, other than a general love of children. Don’t know about you but a “general love of children” is a rather flimsy justification for killing off an entire industry (other than mass market companies like Mattel). Given that we have many fine universities here and train the occasional engineer in this country (I am one of them), I would think we could be a just a little more “science-y” in our analysis. So, if we can put our “general love of children” on the shelf for just a moment, why indeed are we doing this? To improve the health of children, right? That sounds good to me.

To assess whether we have had any impact on the health of children, presumably we would need to be able to describe what is WRONG with the health of children now. The zealots assure us that there is no safe level of lead. They also assure us that lead harms children “silently”, in other words, the harm cannot be measured accurately, but trust us, it’s there. In other words, there is no way to differentiate between lead “poisoning” in children not presenting symptoms – and a purely imaginary condition in those same children. The “real” problem and the imaginary problem present exactly the same way – no symptoms. Contrast banning pixie dust with banning lead-in-substrate – the issues are the same.

[Ed. Note: Apparently there ARE safe levels of lead in musical instruments made of brass if they are full-sized, but not if they are under-sized. This is part of the new interpretative rule on the definition of "Children's Products". Therefore, if you had a small trumpet (dangerous, subject to regulation) and you stretched it, making it into a full-sized trumpet with thinner walls of brass, it would become safe (no regulation)! Hmmm. This is not magic, this is the CPSIA!]

And if you want to measure your impact on this dreaded problem, how would you do it? The health statistics are purely made up, because there are no symptoms. The reasoning goes – since there is “no safe level” for lead, then we must consider anything that could possibly cause a blip in blood lead levels as a causative agent, therefore, we must ban everything that COULD POSSIBLY make blood lead levels rise.

Given that blood lead levels are declining these days and are not considered a health risk by the EPA, FDA, NIH or CDC except in connection with certain specific hazards (leaded house paint, residual pollution from leaded gasoline, or other environmental factors like air pollution), we cannot measure any improvement in health. It’s literally impossible (remember, the “real” problem and the purely imaginary problem present exactly the same way). Thus, it will be impossible to measure how much we have achieved for our investment. We must cling to our assertion that there is “no safe level” for lead to assure ourselves that we have accomplished something. This is a logical argument, but there’s no evidence to support it.

So the entire exercise is speculative? The benefits cannot be measured. The problem can’t be measured or even described accurately. There weren’t any victims before, there aren’t any victims now. Seems like nothing has changed. Uh-oh.

Ah, thumb suckers, THAT isn’t true. Something fundamental has changed, thank you Congress. Safety hasn’t improved . . . but a few things have changed substantially:

1. Our regulator is no longer capable of exercising a judgment about what is and what is not safe. Consider the musical instrument example above. The CPSC has also become quite aggressive, perhaps to justify its existence and its new jumbo budget. Not pretty.
2. The cost of compliance has already skyrocketed. Those dollars are coming out of activities that would otherwise be used to grow our businesses.
3. You ain’t seen nothing yet on costs – wait for the CPSC to approve the 15 Month Rule on testing frequency and reasonable testing programs. Costs will rise by 10-100x for many companies if the rule is adopted as presently drafted. I’m not kidding.
4. Complexity and risk have skyrocketed. What do people do when they can’t figure out the rules or they get scared about the consequences of failure? They exit.

   [Here's another pre-Xmas threat by the ever-lovable Inez Tenenbaum: "'We will continue to recall their products and it will damage the brand. There will be penalties, there will be lost customers,' she said in an interview." She's quite a charmer, isn't she? Does this sound good to you? Want to enter the Children's Product market? Want all your family's wealth dependent on the health of a business in this market, being regulated by Ms. Tenenbaum? Hmmm, the line's out the door, everyone wants in!!!]

5. Products and markets are being dropped, or aren’t being entered in the first place. Profits are being lost (profit prevention) and jobs are being shredded. Lots of jobs . . . .
6. It’s not fun anymore to be in this business.

As for the Illinois wood toymakers, it’s a shame for them. We read about this kind of thing all the time. Maybe it will go away on its own. Maybe it’s all their imagination. Small businessmen are often so unsophisticated, they probably don’t know what they’re talking about. The U.S. government is just too smart to get something this wrong. If they really screwed up, they’ll fix it – the government’s not the enemy, you know. Something this big and stupid can’t be true. Somebody big and important, like a trade association, will save us. No, no, 60 Minutes or John Stossel will do an embarrassing story and that will break the logjam. [Ed. Note: been there, done that.] I’m too busy running my business to address this. You can’t fight City Hall. It will get fixed, don’t worry! Nothing this ridiculous lasts very long.

Boy, that thumb must be yummy! But at your age, thumb-sucking seems so inappropriate.

Don’t forget to vote on November 2nd. Even if this scourge won’t go away and has become entrenched, you can still strike a note for capitalism and for sanity by voting against the idiots and the venal people who want to destroy your businesses and deprive you of valuable products that you prize. You can defend yourself – and you MUST.

Read more here:
CPSIA – Let’s Keep Sucking Our Thumbs . . . .

CPSIA – What Are We Trying Achieve?

787 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 23 days left until Election Day.

Sean Oberle published a lengthy contemplation of the issue raised in my last post on the relationship between compliance and safety as objectives for regulators and for industry. Mr. Oberle’s essay speaks for itself, so I will not attempt to summarize it. He concludes with the following message: “Therein lies the frustrating and frightening aspect of product safety. Those of you tasked with ensuring product safety – industry rep, consumerist, and regulator alike – are trying to quantify ambiguity amid a chaos of demands … all of them in flux … I don’t envy you.”

Sean, boy are you right!

I think it’s worth discussing a few issues on compliance versus safety since Mr. Oberle devoted so much ink (or electrons) to the topic.

1. The law defines what the CPSC can and cannot do. It’s a shame no one told them . . . .

First and foremost, the CPSC exists because of the CPSA and its activities are governed by the CPSA. Recall authority is governed by Section 15 which limits the agency’s recall authority to “substantial product hazards”, namely a product that “. . . creates a substantial risk of injury to the public”. [Section 12 gives the agency additional powers to seek a court order for "imminent hazards".] In other words, the CPSC does not have the legislative authority to tilt at windmills – it cannot demand recalls for anything unless it presents a “substantial risk of injury to the public”.

Consider recalling 12 million glasses that the CPSC acknowledges in writing are SAFE. Substantial risk of injury?

Consider recalling more than seven million trikes sold over 14 years that caused six children to cut themselves. Children who were under three years of age and should have been under the care of attentive adults. Substantial risk of injury?

Consider recalling more than 400,000 Sarge cars because the little yellow dot on the wheel hubcap violated the lead-in-paint ban, and those dots were produced from two cans of paint. Substantial risk of injury?

One must distinguish between legerdemain and reality, between policy and what the law intended. It is a little focused-upon responsibility of the agency to exercise this judgment. Is it even possible for everything that happens to be a “substantial” risk? We know of cases where a single broken toy without an injury provoked an official investigation at the agency. Fair? Is this an activity that the CPSA authorizes? It is . . . if you are running the agency and you say it is. Arguably, the recall of the 480,000 Mattel Wheelies on September 30 was just such a case. Consumers apparently reported two broken cars with wheels that fell off, and no injuries were reported or implied. Substantial risk of injury? I question that.

2. The notion that we need all this supervision flies in the face of injury statistics. But it sure makes the CPSC look irreplaceable, doesn’t it?

I have already published and discussed ad nauseum the historical injury statistics from lead based on CPSC recall notices – ONE DEATH and THREE UNVERIFIED INJURIES over 11 years (1999-2010). If we were facing such a dire public health crisis, why weren’t kids dropping like flies from lead poisoning over such a long time period of “lax regulation”? If the harm was so widespread and so devastating, why aren’t any of these actual victims known? Names, addresses, photos, case histories?

A friend replied to me recently reasoning that there is no safe level of lead. Okay, I concede that lead can be dangerous but it is absolutely true that lead in present throughout our environment and in the air, food and water that we consume every minute of every day. So since we take in lead from several sources all the time, we know we are building up lead and this leads to several questions. If lead is so harmful at all levels, why aren’t we ALL showing the effect of our cumulative build-up of lead? How can you demonstrate that children’s products contribute meaningfully to the asserted “problem”? How can you prove that “fixing” children’s products will meaningfully change lead blood levels? And if you could prove those things (which cannot be done), how can you measure the return on investment of our multi-billion dollar annual investment? Remember, we can only spend those dollars one time – so is flushing them down the toilet on test reports REALLY our best use of scarce and irreplaceable dollars? How would you measure that?

But the more that the CPSC enforces the law against “bad” corporations, the more they scam the public into thinking they needed the help all along. They talk about recall statistics but never put them in the context of injury statistics. The proponents never compare lead injury statistics to other injury statistics like swimming pools.

[Is a child injured by lead "worse" that a child killed in a pool? It better be - because we are spending billions to prophylactically eliminate the possibility of purported lead injuries while leaving swimming pools open to continue a continuing skein of killings of more than one child each day. That's okay according to our Democrat-run Congress. Tell that to the family of drowning victim - they can take comfort in knowing that their child didn't have lead poisoning thanks to the relentless and remorseless enforcement of the CPSIA . . . .]

So as the regulators abuse and confuse the definition of hazard, they create an atmosphere of dependence. Oh thank you Mother Government for saving me! What would I do without you?!

3. Mr. Oberle reminds us that “Lack of incidents may not mean a product is safe.” And just because you’re paranoid doesn’t mean they AREN’T out to get you.

Mr. Oberle does not take an offensive stance on this topic, btw. He is right, you can sometimes catch something dangerous before it creates harm. Presumably a quicker recognition of the hazard in Magnetix might have prevented injuries. Responsible companies need to always keep a lookout for insights that reveal latent hazards.

On the other hand, injury statistics are a useful tool. If, as is the case for lead, the assertion is that the hazard is widespread and present over a lengthy period of time, injury statistics become QUITE relevant. So, if lead was such a terrible problem in children’s products (putting lead-in-paint aside, long ago banned), injury statistics over many years would reveal a latent problem. Think of the breadth of the definition of “Children’s Products” and think of the years of recall data available for study. We are looking at TRILLIONS of interactions with children every year in the United States alone. Where are all the lead victims? We cannot say that we don’t know the scale of this problem. We have apparently been running an “experiment” on the U.S. public for decades in the period the zealots label as “lax regulations” or “lax enforcement”. If lead-in-substrate were so dangerous, wouldn’t you expect to see SOME evidence of it?

If we must imagine the scale of the danger, can we spend imaginary dollars to deal with it?

4. The compliance hawks want to frame this as a financial question – how much is your safety worth? I think that’s the wrong question – I think the question is “how long do you want to have a job?”

I have already reported that our compliance group is currently up to six people from a historical one or two, and of course, our products are no safer today than in the past. They were always safe and still are, but it costs us a lot more to operate. That’s not good for you or for me.

So how do we pay for all this new bureaucracy? We have not raised prices, that’s impossible these days. We are lucky to have customers and cannot spit in their faces with a price increase. Think of your business – it won’t fly.

We also need to hit profitability targets because we need to remain financable. We do not get money from “money fairies” – we have to deal with a bank, just like you. Our bank prefers to see that we make money. I know that doesn’t seem very civic-minded but I can’t fault them for their POV. In any event, I think it’s elementary that a business needs to make a profit to have the model sustain itself. Therefore, we cannot commit ourselves to ever-eroding profitability. When our costs rise, we cut elsewhere . . . just like you do.

Needless to say, we have skinnied up a lot since 2007. We have a much-reduced headcount and operate far more efficiently. This is how everyone behaved during the financial crisis and the jobs have not returned, in part because the economy remains sluggish. With our rising overhead relating to pointless regulations, what can we do? We must recover the money from activities that are focused on raising revenues. In effect, we are discontinuing activities that create growth to fund activities that are pure costs.

What’s the math behind this? Consider how we recover a dollar of bureaucratic cost from productive activities. If you are already operating efficiently and cannot wring out big productivity gains (as may be the case post-financial crisis cost reductions), then how do you pay for an additional dollar of overhead cost? When you eliminate a “productive” dollar of cost to pay for an unproductive dollar of cost (e.g., you trade a dollar of marketing promotion for a dollar of test costs), it’s not an even trade. No, because your dollar of productive cost creates gross margin whereas your overhead produces no profit whatsoever. Your productive dollar of cost produces gross profit which defrays your operating costs and produces marginal net profit on top of that. Wiping out the dollar of productive cost also wipes out the contribution to operating costs, so effectively, only the associated marginal net profit can defray the unproductive cost. Since profit percentages are generally low for most of us, the ratio of productive cost dollars needed to be sacrificed to cover unproductive costs is probably on the order of 2:1 or 3:1. Hire another QC person and fire the equivalent of two people elsewhere. In our case, we do it by attrition. We just shrink away.

As if this weren’t bad enough, it’s also a recipe for disaster or business death in a worst case. The continued erosion of productive spending to finance unproductive spending has a dramatic impact on growth. Revenue flattens out or stays in a downward trend. It’s no surprise – you are starving your company of investment dollars as you spend at constant levels. You have simply shifted your spending from productive uses favoring growth to unproductive uses that will not create growth. Presumably, those of you with children have discussed the merits of eating fruits and vegetables versus eating potato chips. It’s no different for a business and how it consumes dollars. We will never grow up to be big and strong if Mother Government restricts our financial diet this way.

Sean’s right. I don’t envy you . . . or me. This makes me very pessimistic about the future.

I hope you are mad as hell and won’t take it anymore. In 23 days, you will get to vote. DO IT!

Read more here:
CPSIA – What Are We Trying Achieve?

CPSIA – Comment Letter on "Children’s Product" Definition

I apologize, the letter’s long. . . .

June 20, 2010

Todd A. Stevenson
Director, Office of the Secretary
Room 502
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814

Agency: Consumer Product Safety Commission (CPSC)
Re: Docket No. CPSC–2010-0029 Interpretation of “Children’s Product”

Dear Mr. Stevenson:

I am hereby submitting comments in response to the Solicitation of Comments on the Interpretation of “Children’s Product” (Docket No. CPSC–2010–0029) published in the Federal Register on April 20, 2010 (the “Rule”).

In her statement supporting the proposed interpretive rule defining a “Children’s Product” dated March 31, 2010, CPSC Chairman Inez Tenenbaum noted that the issuance of the Rule is not required by the Consumer Product Safety Improvement Act (CPSIA) but was being issued by the CPSC in response to the demonstrated need of stakeholders. I am such a stakeholder. Our company is in the educational materials and educational toy business and is regulated by the CPSIA. Ms. Tenenbaum notes that the regulated community wants predictability and certainty in the rules that govern the marketplace. She notes that the Commission “listens to, hears, and greatly values the input of the regulated community and all stakeholders”.

Ms. Tenenbaum’s statement informs my comments on the Rule. I believe the Rule does not achieve the objectives set out in her statement and must therefore be amended significantly.

Having read other comment letters on the definition of “Children’s Product”, I feel that the legal and technical details of the proposed interpretative rule will be adequately addressed by other stakeholders without my further input. I believe that this interpretative rule extends the reach of the CPSIA to many new products not covered or intended to be covered by the law, and furthermore, changes the “Children’s Product” test from one defined by “primarily” to something more mathematical (as in a 51/49 test). However, I will rely on the other letters to make the case on these points.

In this letter, I will focus on the impact of the Rule on the marketplace. In particular, I will focus on whether the Rule is consistent with the mission of the agency, is fundamentally sound as policy, meets Ms. Tenenbaum’s objective of clarity, certainty and predictability. I conclude that the Rule needs sharp revision.

The Definition of “Children’s Product” is Inconsistent with the Mission of the Agency: I think it is important to think about the Rule in the context of the goals of the agency as set forth in its enabling legislation, the Consumer Product Safety Act (CPSA). Notably, Section 2(b) of the CPSA states:

“(b) The purposes of this Act are – (1) to protect the public against unreasonable risks of injury associated with consumer products; (2) to assist consumers in evaluating the comparative safety of consumer products; (3) to develop uniform safety standards for consumer products and to minimize conflicting State and local regulations; and (4) to promote research and investigation into the causes and prevention of product-related deaths, illnesses, and injuries.”

The definition of “Children’s Product” has been incorporated into this legislative scheme designed to “protect the public against unreasonable risks of injury associated with consumer products”. Of course, “Children’s Products” is now a defined term in the CPSA and interpretation of that term, broadly or narrowly, will affect the scope of the law. Under the terms of the CPSIA, the definition of “Children’s Product” draws products into the coverage of the CPSIA, most notably in the regulation of lead-in-substrate and triggers the imposition of many other significant obligations (such as tracking labels). Nothing in the CPSIA overrides the purposes of the CPSC as set forth in the CPSA. Thus, the definition of “Children’s Product” must be evaluated in light of the agency’s mission to protect against unreasonable risk of injury.

How risky are children’s products for their lead content? The data in the CPSC’s historical recall database best describes the risk, in my opinion. These recalls reflect the evolving view of the agency on the threat posed by lead in its various manifestations in children’s products, and reflects the dangers posed by lead via the reported injuries. I analyzed the recalls posted on the CPSC website over the past 11 years and this data indicates that, over a period of approximately 11 years (from March 5, 1999 to April 15, 2010), the CPSC issued a total of 899 recalls of children’s products for all hazards (including lead and lead-in-paint). In this period, 247 recalls were associated with lead and resulted in one death, the well-known death of a four-year-old in Minnesota who swallowed a jewelry charm. [The data can be found at http://bit.ly/aOK4iS] These 247 recalls were also associated with three reported but unverified injuries from lead. Thus – over 11 years – the reported injuries from lead are four – one death and three unverified injuries.

Contrast this with the injuries associated with swimming pools and spas, a well-known source of childhood injuries. According to the CPSC’s press release dated May 24, pool and spa-related drowning deaths have averaged 385 per year for children under 15 (including 299 per year for children under five years of age) and serious injuries requiring emergency room treatments have averaged 4,200 per year. Consider this data in light of lead: lead produced one death and three unverified injuries in 11 years while pools and spas produced more than one death and 11.5 serious injuries PER DAY in recent years. Pools and spas produce more deaths and far more injuries on the average day than lead produced in the last 11 years IN TOTAL according to the CPSC’s own statistics.

The CPSC’s 2010 response to the daily deaths and maimings of children in pools and spas was a short public relations blitz. The CPSIA has imposed annual expenses in the billions of dollars on the children’s product industry to reduce deaths and injuries from lead.

If massive numbers of pool deaths and injuries merit only a public awareness campaign by the CPSC, the definition of “Children’s Products” should be downsized appropriately to reflect the relative nature of the “threat” posed by lead. The agency’s recall data on lead injuries has never been challenged by any advocate. Evidence that lead-in-substrate meets the “unreasonable risk of injury” standard set forth in Section 2(b) of the CPSA has never been disclosed. It is well-known that the CDC and the EPA link evidence of lead poisoning to only two environmental causes – leaded house paint (the primary cause) and the residual effects of pollution from leaded gasoline (generally found in dirt near inner city housing) and from industrial pollution.

The health impact of lead-in-substrate in ATVs, bikes, pens, clothing, apparel, even toys, is entirely absent from the literature as is any empirical evidence that these items could even theoretically cause lead poisoning. The advocates against lead cite studies that lead can be dangerous in small amounts and highlight the assertion that lead harms “silently”. In other words, advocates claim that because harm can befall children from lead undetected, it follows, ergo, that this kind of harm might also caused by children’s products containing trace amounts of lead. This notion is best summed up by the slogan “there is no safe level for lead”. Yet lead poisoning has never been positively identified from ANY children’s product beyond the one death and three unverified lead-in-paint injuries reported in the CPSC’s recall data over the past 11 years.

This absence of data of detectable lead-in-substrate poisoning means that the definition of “Children’s Product” in the Rule must be narrow. The mission of the agency under the CPSA does not permit it to divert resources for anything less than an “unreasonable risk of injury”. The Rule specifies a definition that is too broad for the documented minimal risk of injury from lead-in-substrate.

The Definition of “Children’s Product” Knowingly Permits Children to Remain in Danger: The Rule permits children to remain in “danger” of lead poisoning through its technical interpretation of the CPSIA. If lead-in-substrate is a public health issue suitable for the agency’s attention, this is unacceptable. The CPSC must adopt a clear rule that logically draws the line between regulated and unregulated commerce.

Let me explain:

The Rule attempts to distinguish items of “general use” and items that are primarily intended for children. The Rule notes that items of general use are not included in the definition of “Children’s Product”. An item of general use may in fact be used by children but because it is intended for a general audience, it is outside regulation by the CPSIA. This is an interpretation of the CPSIA under the Rule. The contrast in the treatment of items of general use and Children’s Products under the Rule is quite dramatic: obligations for safety testing, tracking labels, reporting, whistleblower risk, liability risk are all lifted for general use items. Children’s Products suffer the full brunt of the extensive new safety rules, presumably because of an asserted higher “risk” of injury to children.

An irony of the Rule is its acceptance of not regulating “items of general use” even if they are known to be widely or even universally used by children. The illogical and worrisome disparity in treatment of these items is best illustrated by pens. According to the Rule, pens are typically items of general use and are therefore (as a general rule) NOT regulated by the CPSIA. This result is quite helpful to the agency, as the pen industry has purportedly informed the CPSC that ball points must be made with brass, and brass has minimal lead content as a basic ingredient. No one argues that brass ball points have ever exposed anyone to injury from lead poisoning, not do “human factor” experts contend that contact with ball points are likely to present a risk of lead poisoning. Thus, the inclusion of pens in the broad reach of the CPSIA has been called an “unintended consequence”. So the “right” answer for all concerned is that pens shouldn’t be included in the CPSIA. The CPSC has consistently held that pens are outside the definition of “Children’s Products”.

Notably, it is well-known that close to 100% of school-age children routinely use ball point pens. Children carry pens in their backpacks and use them every day in school. Pens are a particularly ironic choice for this rulemaking example because pens are known to be routinely mouthed (chewed) by all ages of consumers including adults. However, use of pens by kids is deemed “unregulated” under the CPSIA and the Rule because pens have been held to be items of general use. Strangely, pens are in fact subject to regulation under the CPSIA if “decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value”. The Rule holds that if the embellishments are “likely” to attract a child’s interaction with a pen, then it would be considered a “Children’s Product”. So the operation of the Rule is that a pen is subject to regulation if it has an embellishment but not subject o regulation if it omits the embellishment. The CPSC does not indicate that the embellishment itself is a public health or safety concern nor argues that the presence of the embellishment will raise the likelihood of use of a pen by children. The CPSC concedes that children are widely using pens now.

This flaw in the Rule will subject the CPSC and its rules to ridicule. There is no justification for the agency’s safety regulations applying only to some pens, not based on evidence of risk but because of a hyper-technical interpretation of the definition of “Children’s Product” under the CPSIA. The Rule simply makes no sense as public health policy. If the presence of lead in ball points is an actual health risk (which it is not), then there is no excuse to omit any pens from supervisory regulation. If the presence of lead in ball points is NOT an actual risk to health, then there is no excuse to regulate ANY pens under this law. Writing an interpretative rule that can’t seem to make up its mind is, frankly, worse than no rule at all.

The Definition of “Children’s Product” Does Little to Add Clarity for Regulated Companies: The convoluted definition of “Children’s Product” set forth in the Rule fails to bring clarity to the broad reach and operation of the CPSIA. Regulated companies will never be able to consistently apply the Rule in the real world, and worse still, will never be able to find peace (agreement) with their retailers (dealers) on the application of the Rule. Chaos is certain to ensue. This problem is again best illustrated by pens. Pens are items of general use and thus deemed to be unregulated under the CPSIA. The Rule notes an important exception, however: “when a general use, such as a pen, is decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value, the general ruse product may be converted or transformed into a children’s product due to these additional features of characteristics.” [Emphasis added]

The Rule goes on to note that there is an exception to the exception: “However, there also are ‘novelty’ pens that could appeal to children 12 years of age or younger as well as older children and adults; such novelty pens would not be considered to be primarily intended for children. For example, a simple ball point stick pen bearing an elementary school’s name, without any other decorations, would likely appeal to anyone (i.e., students, teachers, parents) connected with the school. A pen with a silly head on the top, not associated with any particular mass media (and not sold in toy stores) may have just as much appeal to adults as it would to children. Pens with puzzle features that allow the user to take them apart and reconfigure the design also are likely to appeal to children and adults alike, and thus, are not likely to be considered children’s products because they are not primarily intended for children.” [Emphasis added]

The fact that children were already “interacting” with pens in the absence of the “childish” embellishments seems to be irrelevant under the Rule, raising the issue of how to tell when a product’s use by children is deserving of safety testing or the application of tracking labels. These are “big dollar” questions for the regulated community. If an embellishment is “appealing” to children, then if children “interact” with the pen based on foreseeable use and misuse of the product, it is apparently considered a children’s product . . . unless the embellishment has “just as much appeal” to adults or children, in which case it is a product of general use. And if the pen is unadorned but used by every child due to a marketing scheme directly aimed at the kids market, no testing or labeling is required (see discussion of musical instruments below).

It seems so obvious . . . .

The clear holding of this “policy” is that stick pens used by every child every day in every classroom do NOT require testing. Were you to remove those ordinary pens from the classroom and apply a “childish” embellishment with inks or paint supplied by the CPSC (stipulated to be entirely lead-free) and then return them to the children, the pens would now need to be tested and labeled. This, of course, makes absolutely no sense, and gives the necessary impression that the CPSC is more concerned with technical compliance issues (test reports without meaning or significance) than with notions of safety. How are regulated companies supposed to follow such incomprehensible or nonsensical rules? There is no answer to this question. Retailers (dealers) take a different tack when confronted by nonsensical rules – they crawl into a shell and invent their own “safety rules” designed to create a cushion between their practices and whatever 20-20 hindsight analyses could be used by regulators. This creates a Wild West of safety rules and practices for manufacturers: chaotic, unpredictable, penal and extremely expensive.

The Rule seems to delight in this convoluted reasoning. Consider the Rule’s stance on the marketing of musical instruments to schools: “Products with a marketing strategy that targets schools, such as instrument rentals, would not convert such products into children’s products if such products are intended for general use, regardless of how the instruments are leased, rented or sold. These instruments are intended by the manufacturer for use primarily by adults, although there also may be incidental use by children through such programs.” Incidental use? In many schools, the “incidental use” induced by these targeted programs is nearly 100% of the kids. It is difficult to take the CPSC seriously about its “passion” for eliminating lead in all manifestations when it enacts a rule that openly permits unregulated use of brass musical instruments by school kids while banning brass in toy wheel assemblies or requiring testing for certain pens because of the brass content in their ball points. This policy is best described as “two-faced”.

Let’s not forget that this Rule is hardly restricted to pens. Paper clips are known to be in wide use throughout society and also by children in the regulated age ranges. As products of “general use”, paper clips are specifically cited in the Rule as exempt from testing and the other requirements of the CPSIA. That makes sense – despite the uncontested fact that paper clips are routinely chewed on by adults AND children. I assume that the lead content in paper clips would have an equal (or greater) ability to erase IQ points as lead in children’s products that also might be mouthed – but let’s not worry about that now. The Rule sensibly draws the line at paper clips for the foregoing reasons, and whatever “hazard” chewing or sucking on paper clips may present has been overlooked as a public health risk. Unfortunately for our education business, it’s not that simple: “Manufacturers may also include a general use item as one of several items packaged together, such as a paper clip included in a magnet set primarily intended for children ages 7 through 10 years old. The paper clip may be a general use item but when included as part of the magnet set, it would need to be tested to the applicable children’s product safety rules since the product is targeted primarily to children 12 years of age or younger.”

What is achieved by this rule? High expense, much confusion, many arguments with retailers and sharply-reduced respect for the CPSC’s rules.

Please note that the Rule leaves all elements of these subjective judgments open to doubt. Consider pens again – because the Rule encourages us to reason from the pen example. The CPSC took no definite position on anything applying to pens other than that an undecorated stick pen is outside the CPSIA. Anything with an “embellishment” presumably will be the subject of endless debate in the regulated community under the Rule. If you guess wrong on the application of the Rule, the law provides (and CPSC practice now reinforces) tremendous liability risk. Let’s not forget that we in regulated community know about the $2.05 million penalty assessed against Daiso for five recalls of less than 700 units in total. Liability risk under the CPSIA seems virtually unlimited nowadays. Subjective interpretative rules applied with 20-20 hindsight by regulators would likely expose manufacturer to the highest risk at the worst possible time, namely when there’s a real problem. How can manufacturers defend themselves? The wishy-washy design of the Rule provides nothing for a manufacturer to rely upon.

The Rule makes same similar confusing distinction on DVDs and CDs and seems to imply that many promotional products will be subject to doubt under this Rule. Almost anything useful that has a so-called “childish” embellishment might be regulated now, possibly without the manufacturer even knowing! The Rule states that manufacturers “should expect” that adults will give their embellished or “childish” products to children even if made specifically for adults (the example cited is a stuffed animal sold with a candle). The fact that some businesses target adults with such items (intent!), or the fact that the Rule contemplates that adults are often drawn to the same items as children, seems to be forgotten here. At a minimum, the Rule seems entirely subjective. This not being confusing enough, the Rule notes that if the items that children are drawn to happen to be considered “collectibles”, then perhaps they won’t be considered children’s products. Or maybe they will.

To put a bow on the confusion, the Rule concludes that classic games like checkers or Chinese checkers (among other common games) are NOT children’s products. I simply cannot imagine a toy company DARING to leave these classic games untested yet the CPSC has now officially ruled that certain classic games are exempt from the CPSIA. However, if the manufacturer is foolish enough to promote these games with images “or other features . . . that make [the games] more attractive to or suitable for children than a general use product would normally be”, well then they are magically transformed into children’s products.

I literally do not know how to apply a rule so full of convoluted logic and word games. Likewise, I cannot envision smoothly functioning markets governed by a rule like this.

Notably, the weight placed on advertising portrayals with children will only intensify arguments between manufacturers and their customers about what is and what is not a children’s product. For instance, we sell magnifiers and tape measures that are identical to those sold at Home Depot. By any definition (and as acknowledged in the Rule), these items are items of general use. We happen to photograph them with children for our catalog and website to illustrate the products’ utility in educational settings. How are we supposed to determine definitively that these items are not children’s products under the law, much less get our customers to agree with us? To date, no customer has agreed with this conclusion. NOT ONE.

The Rule posits a bizarrely unrealistic deliberative process in which each photograph is “weighed” against each other to determine its “true nature”, as though that were possible: “The prominence, conspicuousness, and/or other emphasis given to each portrayal of a product’s use or intended users on packaging or in advertising media can be weighted differently according to which images or messages are the strongest and most obvious to the consumer at the point of purchase.” This language makes me want to scream. To avoid business risks under this rule, businesses may have to produce catalogs and websites that look like this: http://bit.ly/d4vtZo.

The Rule confounds by assigning responsibility to the manufacturer for its retailers’ independent choices on where they place items in their stores or in their various catalogs, web pages and ads. Of course, each retailer will make this choice differently, possibly store-by-store, catalog-by-catalog, ad-by-ad, web page-by-web page, region-by-region, country-by-country and so on. In reality, this standard is even vaguer than that, as the judgment is whether the images “could imply [the product’s] suitability for a certain age group”. [Emphasis added] In any event, we manufacturers have neither control over, nor knowledge of, these choices by third parties.

All this makes me wonder why the Rule doesn’t simply state that the CPSC will decide after the fact what is and is not a “Children’s Product” based on its subjective personal opinion at the time? That rule formulation would at least be honest and clear.

I believe the agency has given scant thought to the reality of living with this rule. How does the CPSC envision that a manufacturer and a retailer would resolve a dispute over whether a product is subject to regulation? Think about people who sell pens. What is the likelihood that there ever be agreement that a particular embellished pen is outside this law? I fear the effect of this vague, quirky and completely indeterminate rule will be that everyone associated with children’s products will throw up their hands and assume that everything is subject to the full brunt of the CPSIA. If that’s the intent, I wish the CPSC would just come out and say it.

What Should the CPSC Do? The answer to this question is clear in light of two factors: (a) in the Chairman’s statement, she indicated a strong interest in bringing certainty to this rule and further notes the importance of certainty to the marketplace, and (b) the extremely low incidence of injury and death reported from lead in the last 11 years. As noted in great detail above, there is nothing “certain” about the Rule as presently written. It includes far too many phrases like “may”, “could”, “in general”, “weighting”, “factors” and so on. The Rule as written is the antithesis of clarity and certainty.

The CPSC has as its mission “to protect the public against unreasonable risks of injury associated with consumer products”. With so few injuries and one death from lead over the course of 11 years, the perils of lead have not been demonstrated to rise to the level of an “unreasonable risk of injury”, particularly when viewed in light of the known impact of so many other dangers regulated by the CPSC (such as small parts or pool injuries).

For a rule to bring “certainty” to the market, there must be a way to make a definitive judgment, one that can be relied upon. Subjective judgments and weighing of factors may make sense for a court but has little value to regulated companies in an active marketplace. Who gets to decide which judgment is “right”? Under the present Rule, no one does.

The way to resolve this dilemma is to learn from the statistically significant history of low injuries from lead, and make a concession in favor of certainty. The right rule for the definition of “Children’s Product” is to state that the “reasonable judgment” of the manufacturer on what is and what is not a “Children’s Product” under the CPSIA will be RESPECTED by the CPSC. I believe the term “reasonable judgment” is understood in the marketplace, and is also a well-defined term in the common law. It has been clarified in countless cases, providing clear guidance to all concerned (regulators, regulated companies and consumers). The CPSC should further indicate that it will NOT review the judgments made by manufacturers in the absence of fraud, a recall situation or other serious violations of law or CSPC regulations. Retailers should be entitled to rely on the reasonable determinations of manufacturers by RULE.

My concept is that the reasonable business judgment of manufacturers will appropriately shape the range of products regulated under the CPSIA. In actual fact, the reasonable judgment of manufacturers on determinations of “Children’s Products” is tightly confined by the CPSIA, so little risk to the “will of Congress” can be anticipated. In addition, given the long track record of so few documented injuries from lead (going back for many years before the CPSIA’s enactment), there is little reason to believe this practical rule will expose children to more injuries. In any event, this will allow the agency to focus its energies on greater threats. The agency also has plenty of legislative authority to draft other rules to address lead concerns if the need arises.

A rule drafted in the vague, quirky, subjective, indefinite and convoluted manner of the Rule achieves little other than amplifying the frustration and confusion of the regulated community. Having filed numerous comments letters over the last two years, testified before Congress and the CPSC on several occasions, had personal meetings with CPSC staff, written blog posts, attended rallies, and so on, I can attest to the deep frustrations associated with implementation of the CPSIA. After all this time and effort, we manufacturers are still “in the soup”. With this Rule, the CPSC begins the final stage of the implementation of the law, and potentially, places the capstone on our ruin. This Rule, plus the so-called “15 Month Rule”, taken as a whole, has the potential to put many companies out of business. I do not know how we survive both of these rules in their present form. It’s time for the CPSC to take a reality check. If the Chairman is serious about bringing certainty to the market and to regulate without putting companies out of business, it’s time to make some concessions and let the good companies who produce children’s products run their businesses and accountably produce safe products using reasonable judgment. This strategy will work. Policies like the Rule will not.

Thank you for considering my views on this important topic.

Sincerely,

Richard Woldenberg

Chairman
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061

Read more here:
CPSIA – Comment Letter on "Children’s Product" Definition

CPSIA – Tenenbaum/Adler Comments Revealed

A little birdie dropped off what are purportedly the comments of Chairman Inez Tenenbaum and Commissioner Bob Adler on the Waxman Amendment. This is one interesting document. First of all, it’s quite secret (but not anymore). You can’t find it on the CPSC website. Other members of the CPSC community haven’t seen it and have been refused a copy. It also doesn’t have Tenenbaum’s or Adler’s name on it so it has appropriate deniability. Oddly, it speaks in sentence fragments. Hmmm. In an era of greater “transparency”, this secrecy is something of a shock. Perhaps the Prince of Darkness is at work here.

Among the “highlights”:

• The comments recommend incorporation in the legislative report of the consumer group belief system assertion that there is no safe level of lead. If enacted, this change would enable, if not instruct, the Commission to reason from this “principle” and presumably ban many safe products. The hypocrisy of this position (or its obliviousness) in light of the permitted lead in our air, water and food is part and parcel of the CPSIA.
• The suggested report language clarifying the “no measurable adverse effect on public health and safety” will perpetuate the exemption morass confronting the Commission and regulated community. The comments state explicitly that anything that can be empirically measured will be impermissible, the exemption process will remain a hollow shell, a phantom provision. Why not just delete the exemption process and save everyone a lot of time, money and aggravation?
• Tenenbaum and Adler seem to miss the point that requiring a warning label for a product deemed safe is fatally inconsistent. Why warn for something determined to be safe in an exemption process? They ask for more discretion – to do what? What exactly is the risk here?
• The Commissioners note an openness to using a different term than “low volume manufacturer”, such as “small batch manufacturer”. This is apparently important to the HTA but seems to connote nothing of substance as both phrases are just terms or labels. I am stumped.
• The Commissioners basically go along with the definition of “low volume manufacturer”. As if to dispel any notion that they favor relief for small business, they note simply that the $200,000 revenue limit should be restricted to manufacturing or importing revenue. The fact that this revenue level is both absurdly low and that the provision itself is designed to be useless to almost everyone did not garner comment from Tenenbaum and Adler.
• Their comment about the need to “assure” compliance by LVMs confirms my reading of the Waxman Amendment that it is NOT designed to change testing requirements on small companies – they must ALL “assure” compliance through a reasonable testing program. The “assurance” will require third party testing. Here is the comment offered by Tenenbaum and Adler: “At this time, CPSC staff believe that reasonable testing methodologies meeting this criterion could be developed for only a few of the CPSIA testing requirements and that third party testing will still be required in many instances. However, this provision could provide greater relief in the future as new technologies develop that the agency may be able to recognize as capable of ensuring compliance through reasonable testing methodologies.” I guess LVMs can lump it . . . .
• The comments clarify that “imminently hazardous consumer products” incorporate the definition in Section 12 of the CPSA. Here is the definition from the CPSA: “[The] term ‘‘imminently hazardous consumer product’’ means a consumer product which presents imminent and unreasonable risk of death, serious illness, or severe personal injury.” The comments simply remove any reference to “being made aware of” – perhaps to avoid the implication that the CPSC has to act before it has “identified” the risk, whatever that may mean. Remember, current law requires going to court – the new language merely requires that the agency “identify” the risk. That’s quite a change – especially if you are on the receiving end. Think baby slings.

The comments by Tenenbaum and Adler did not comment on the perils of the “technical” provisions in the Waxman Amendment previously documented in this space. As I have noted, Rumorville has it that some or all of these changes appeared on a mysterious and secret document sent by Tenenbaum to the Hill with her 20 requests for changes to the CPSA and CPSIA. This secret document has not been revealed yet. It is therefore no surprise that her comments would endorse the approach of the Waxman Amendment (as in the foregoing tweaks). Perhaps Rumorville is right that these changes were made at her request or with her consent.

Consider the noxious changes to Section 6(b) of the CPSA – Tenenbaum and Adler apparently see nothing to comment on. Did you realize that the Waxman changes permit release of information based on a phone call? Say you make a Section 15 report, the CPSC does some interviews, creates internal documents, sends letters and emails back and forth to you – and a plaintiff’s attorney calls for disclosure of these confidential exchanges and papers. The CPSC may simply ask how quickly the lawyer needs them. Did you also know that this release can be done without notice or even the knowledge of the parties affected by the information release? Did you know that the new language even permits the CPSC to release information it knows to be FALSE? Due process doesn’t matter when you are protecting kids!

Can you believe that Tenenbaum and Adler had no comments on this terrible provision?

Or, how about the problems associated with damage to physical evidence subpoenaed by the CPSC which are also the subject of a civil suit? There is apparently substantial risk that this would be held against the defendant (you) under a principal called “spoliation of evidence“. What might happen? If the evidence is damaged, “[the] finder of fact can review all evidence uncovered in as strong a light as possible against the spoliator and in favor of the opposing party.” Ouch – that means you lose, big.

To judge by their comments, it appears that Tenenbaum and Adler don’t believe we deserve any procedural protections here.

It would appear that the “governing principle” demonstrated by yesterday’s passage of the health care bill applies here. There is little need for Democrats to try to build a consensus. They have control, so bipartisan support will only be achieved when those with opposing views capitulate or are outvoted. Brave New World, I feel so safe now. . . .

Very disappointing.

Read more here:
CPSIA – Tenenbaum/Adler Comments Revealed

CPSIA – A 52-Page Morsel for You to Nibble On!

How many pages do you think are necessary to define “Children’s Product”?

Okay, I bet you said 52 pages. That’s cheating! Here is the CPSC’s stab at the definition. No, I haven’t read it yet. It’s 1 AM and I have decided to take a little nap before the sun comes up.

I will be back to you on this important document.

Read more here:
CPSIA – A 52-Page Morsel for You to Nibble On!

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