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CPSIA – Daiso Death Penalty

Ole’ paranoid Rick of the vivid imagination has been suggesting that the massive powers accorded to the CPSC by the CPSIA may be used with few controls. This can lead to serious excess. Crazy, right?

Remember the Japanese company Daiso? I mentioned them last October for the first phthalates recall in U.S. history. That recall was for 40 uninflated toy baseball bats, something that could be held in one hand. Not even one box full. Clearly a national emergency. Interestingly, this urgent recall violated the promise of CPSC staff made at ICPHSO in February 2009 that the focus of enforcement of the phthalates ban would be on chew toys and bath toys, neither of which includes inflatable baseball bats. Broken promise by regulators? Details, details. I know, I’m just picky.

Anyhow, I mentioned Daiso again a few weeks ago for the absurd penalty assessed against them in the amount of $2.05 million. Absurd, unless you are Daiso, then perhaps you don’t think it’s so absurd. This penalty was assessed for a pattern of behavior that included five recalls of 19 items and 698 total units over two years, including the 40″dangerous” baseball bats. Daiso apparently also had various undisclosed disputes over imports stopped at the ports. Clearly something else was going on . . . but $2.05 million? I made the point that this is excessive and lacked any apparent effort to measure the agency response and escalate it in some appropriate way. Instead, it was escalated from zero to $2.05 million.

Notably, the CPSC signalled its “seriousness” by sic’ing the U.S. Attorney on Daiso, taking the unusual step of seeking an injunction. Hmmm. Nightmare scenario, all because of 698 units recalled. Anything goes nowadays.

I hate the idea that Daiso is precedent that could justify just about . . . anything. Now consider Chairman Inez Tenenbaum’s own words about the Daiso situation (from the recent Consumer Federation of America conference):

“To show how serious we are about enforcement at the ports and holding importers accountable, all of you should know that just last week we levied a serious fine – a $2 million fine – against a west coast importer named Daiso. Daiso repeatedly ignored our warnings to stop importing children’s products that violated federal rules on lead paint, lead content and small parts. Now the fine was large, but that wasn’t the big news. The big news is that we are being more creative in the use of our enforcement actions. We secured an injunction that completely stops Daiso from importing children’s products into the country. We worked closely with the Justice Department on this case, and Daiso has a very high hurdle to jump over to EVER get back in the import business again. The company must hire a safety professional and prove to us that it knows our laws and is in compliance with our laws.”

[Emphasis added]

So Ms. Tenenbaum believes she has the right to use her powers to put companies out of business. In this case, it appears that she really does not want to be crossed. Daiso, for whatever reason, didn’t measure up to agency expectations. Could be venality. Could be incompetence. Could be big company-itis. I have no idea. Nonetheless, it is clear that there were no penalties along the way (at least, not announced). There were no publicly-announced regulatory interim steps at all other than the five recalls of trivial amounts of product. Could it be that five recalls totally 698 units with no injuries reported might not seem like an emergency? Not anymore – stop the presses if it happens to you. The U.S. Attorney may be coming soon! Then – boom! – you’re out of business, courtesy of the U.S. government.

This could happen to you. And me, especially for writing this blog. That makes me “uncooperative”. It’s a “Father Knows Best” world now.

[For more info on how the CPSC is in the pocket of "consumer advocates" who are haters of companies who dare (stupidly) to cater to children's markets, read the rest of Ms. Tenenbaum's speech at the CFA meeting.]

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CPSIA – Daiso Death Penalty