CPSIA – WSJ’s 8th Editorial Against the CPSIA

Eight WSJ editorials on the same topic. Is it time to get Congress’ hearing checked???

REVIEW & OUTLOOK
MARCH 11, 2011

Get the Lead Out, Sir
Nutty test standards give Obama a real chance to help business.

President Obama has been on a campaign to shake his antibusiness reputation, so a good place to start would be to revisit the Consumer Product Safety Improvement Act, a mess of a law that has put new burdens on small businesses.

In 2008, Congress passed the law in a rush to do something after a scare over lead in toys imported from China. Its problems were quickly apparent, sweeping products from books to bicycles into the dragnet for lead standards. But while businesses pleaded, Democrats stood behind it as a pinnacle of consumer protection while blaming the Consumer Product Safety Commission for any enforcement problems.

The CPSC has done what it can to allay the fiasco of unintended costs and disruptions for small businesses, including staying large portions of the law. But as Commissioner Nancy Nord told House Democrats last year, the language of the bill is drafted in such a way that fixing all the problems is impossible because the “exclusions and exemptions process is not workable.”

Instead of being able to focus energy on products that present real risks to kids, the CPSC’s staff has had to regulate products that pose no harm. The likelihood of a toddler swallowing an all-terrain vehicle, for instance, didn’t stop that product from being swept into the maw.

The law also requires the CPSC to propose the parameters of a third-party lead testing regime, but the issue is so mired in complexity that the commission has yet to set those standards. Under the proposed version of this so-called “15 Month Rule,” Learning Resources Chairman Rick Woldenberg has estimated that supplying multiple testing samples on each of his company’s toys and products will cost his company some $15 million per year.

It gets worse. In August, the lead standard is set to go down to 100 parts per million from the current level of 300 parts per million. Like the earlier step down, the new standard is supposed to be retroactive when it goes into effect, meaning that it will apply to toys and children’s products manufactured before that date, which were perfectly legal when they were made. All five CPSC commissioners have said they don’t believe the new standards should be retroactive when they go into effect this summer.

At a hearing in the House Energy and Commerce Committee in February, California Democrat Henry Waxman defended the law as “necessary to protect kids and families across the country.” We wonder how he figures that, since the incidence of lead poisoning from toys made by domestic manufacturers is nil.

Energy and Commerce Chairman Fred Upton and Subcommittee Chair Mary Bono-Mack have said they will soon introduce a bill that would finally end a regime that has clobbered small businesses with ill-conceived regulations. If Mr. Obama wants to help small business job creation, he could agree that the government doesn’t need to mandate a lead testing protocol for every product known to man.

Read more here:
CPSIA – WSJ’s 8th Editorial Against the CPSIA

CSPIA – Treatment of Resale Goods under the Waxman Amendment

The new Waxman Amendment provides an arcane and inadequate resolution of the longstanding complaints about the treatment of resale shops and resale goods under the CPSIA. The amendment adds a new provision, Section 101(b)(3), to address the resale issues.

This short provision has a lot going on:

a. It only applies to lead restrictions. The exceptions for resale goods do NOT apply to the phthalates ban. This means that used toys are unlikely to reappear in resale shops. It also means that anything possibly affected by the phthalates ban, including certain clothing and childcare articles, will be dangerous to sell in resale shops.

The legal niceties are of little import here – these low revenue stores won’t go near trouble. Will they know what’s okay to sell and what’s not? Probably not. Of course, the CPSC could always put out a new guidance brochure for them – something to look forward to!

Arguably, the inability of the Dems to give a clean waiver to the resale industry means that the resale exemption grants little relief in practical effect. That’s my belief, at least. If resale shops do not feel comfortable that the responsible administration of their businesses will keep them out of harm’s way (including being free of the possibility of bad publicity), they are likely to stay out of the market for children’s goods entirely. Resale stores don’t have legal departments . . . . [Who knew?!]

b. The definition of a “used children’s product” is quite interesting:

“The term ‘used children’s product’ means a children’s product that was obtained by the seller for use and not for the purpose of resale or was obtained by the seller from a person who obtained such children’s product for use and not for the purpose of resale.”

This obtuse language is intended to forbid the bulk resale of merchandise by inventory liquidators while permitting charity or consignment sales of children’s product. “For profit” resale shops will also be snagged on this language.

The origins of this language is presumably Commissioner Bob Adler’s odd Solomonic recommendation that charity shops be allowed to sell used clothing but not “for profit” resale shops.

The new definition is confusing because of the peculiar word “obtain”. There is no question that under this provision, you cannot “obtain” children’s products for the purpose of resale. Does this restriction apply to donated goods? Probably not because the legislators presumably believe you don’t “obtain” a donation for a particular purpose. Of course, that’s a fiction – do you think the Salvation Army accepts donations of children’s products with no purpose in mind? Could this language be a backhanded way to approve the distribution of donated goods for free but not for a nominal price? Possibly.

Would this limitation apply to consignment sellers who never take title – do they actually “obtain” the goods? Consignment sales may be okay but no doubt some factual inquiry will be required, a nice case-by-case analytical process to keep the CPSC busy! Ebay resellers and “for profit” resale shops are almost certainly not given relief by this language. The Resale Roundup is not in danger . . . .

The asserted distinction between a reseller of donated goods (a so-called charity shop), a consignment store and a “for profit” resale shop is flimsy and patronizing, in my view, reflecting a patrician view of society and the needs of the “lower class”. As I have explained in the past, the issue should be about safety, not compassion for the impoverished. Is it morally permissible to give dangerous products to children because they are poor? Please, don’t insult my intelligence. If the goods are safe, sell them – and if they’re not, throw them away. It has nothing to do with “needy” kids. This is yet another case of Dem legislators being unwilling to take a reasonable stand on what is and what is NOT safe. They are apparently willing to sacrifice the resale industry to their lack of courage.

c. As if the foregoing didn’t prove that the bill’s authors live in La La Land, the definition of “used children’s product” has several exceptions, namely children’s metal jewelry, painted children’s toys, children’s products comprised “primarily” of vinyl and any other children’s product later identified for this list by the Commission. I guess the charity shops are supposed to keep their eyes peeled.

So apparently the idea is that resale shops can get back into the children’s product business except . . . except . . . except . . . . The simple relief these shops need has been denied in favor of new uber complexity. To the intended beneficiaries of this “relief”, complexity alone will make the law unintelligible or at least unmanageable. Despite the “good intentions”, the effect of the relief will be moot – in other words, nada.

You should be OUTRAGED about this situation. The very FACT that this Dem-controlled Congress has been sucking its thumb over this issue for TWO YEARS, through two cold and snowy winters, is a national embarrassment. Frankly, it more shameful than that. When the Dems finally worked themselves into action, this is the best they could do?

The persistent inability of the Dem Congress to act sensibly on this issue is both demoralizing and illuminating. This situation is the Dems’ handiwork and yet, the disruption of this market affects the neediest Americans, and among them, the youngest and most vulnerable. Quite a departure from Democratic Party traditions. Not only is access to kids’ warm winter clothing impacted, but so many other important products are embargoed, from baby items to educational products to whathaveyou. And even though the needed goods are plentiful, the CPSIA made it prohibitive to offer them for sale at a low price. Too bad, Poor People!

The poor don’t deserve to live in the anti-economy just because the Dems have a phobia. The fact that the Dems can’t apparently empathize with people who really need their support is so shocking.

I hope you won’t support this bill regardless of its impact on you unless it gives real relief to those in need. If we are really a community, we must DEMAND true relief for the resale market. It’s time to take a stand against a stubborn, morally-numb, self-justifying Dem Congress.

Read more here:
CSPIA – Treatment of Resale Goods under the Waxman Amendment

CPSIA – Treatment of Section 101(b)(2) in the New Waxman Amendment

i have attached a conformed version of Section 101(b) reflecting the new Waxman amendment’s proposed changes for your reference.

The dilemma posed by the current Section 101(b)(2) is that exclusions to the lead standard are basically impossible to obtain. There have been several rejected exemption requests and much pleading by Nancy Nord and Anne Northup for changes providing flexibility.

Last December, Mr. Waxman (supposedly with input from Chairman Tenenbaum) launched a sneak effort to implement something called the “functional purpose” exemption to “solve” these issues. The original construct of this exemption applied to situations where the manufacturer could demonstrate that the lead served a “functional” purpose and could not be removed without consequences (not including economic loss). This provision would have permitted ATV manufacturers to assert the need to put lead in certain parts to strengthen the steel, for instance. The functional purpose concept derives from a similar procedure under the EU’s ROHS-WEEE and is also present in the treatment of electronics under the CPSIA.

Waxman’s functional purpose language generated howls of protest as the “solution” solved nothing for anyone. Later, the Commission could not agree on a functional purpose recommendation for its January 15h report, and the idea “died”.

In the new Waxman Amendment which emerged last week, a new version of the functional purpose exemption was introduced to modify Section 101(b)(2). You may find the conformed version of Section 101(b)(2) helpful in understanding how the new provision works.

My thoughts on the new language:

a. The limitations of the exemption process in Section 101(b)(1) are UNCHANGED. In other words, the problematic “any” language is still effective. The new functional purpose exception will be an exception to the exception. Get it?

b. The Section 101(b) structure which limits exceptions to specific products, materials (or component part, in the case of the functional purpose section) remains in place. The language does NOT permit exceptions by product class. You must apply product by product, material by material. The rule even specifies that each component must be individually considered. How many parts are in an ATV . . . .

c. The Commission is now allowed to act “on its own initiative” to exempt “a specific product, material, or component part”. A petitioner may also seek the same relief.

It is hard to imagine how this would take place – will a Commission of five people pick lucky companies or industries for random acts of kindness? Of course, the first products likely to be accorded this “on its own initiative” treatment would be books, ATVs and bikes because of political pressure. [Let's not call that "influence peddling".] More complex product categories, like school supplies (my industry), would be stuck without an effective means to seek exemption.

d. The process, regardless of who initiates it, will be subject to a notice and comment period. This is new and presumably is designed to enable consumer groups to “participate in” (read, slow down or obstruct) the exception process. You have to hand it to the authors of this provision – they found a way to make a slow, expensive and tedious process even worse.

e. The standard for obtaining a functional purpose exception has several parts (all of which must be satisfied) -

“(i) the product, material, or component part requires the inclusion of lead because it is not practicable or not technologically feasible to manufacture such product, component part, or material in accordance with subsection (a) by removing the excessive lead or by making the lead inaccessible.”

This clause has several tricky parts in it. First, the word “practicable” was supposedly chosen because of a Supreme Court decision holding that “practicable” implies consideration of economic factors. So bickering over what “practicable” means is almost certain under this provision. The legal standard will need to be developed to make this provision workable – another nice project for Cheryl Falvey and her CPSC legal department. No guidance has been provided on how much economic pain needs to be incurred before lead removal is deemed not “practicable”. Consider for instance the use of recycled metal for bike frames. When is removal of lead from bike frames not “practicable”? Each frame is presumably different. Virgin metal is available without lead. You figure it out, I can’t.

Let’s not forget that the amendment also uses the term “technologically feasible” as defined in CPSIA Section 101(d). The CPSIA definition omits any reference to economics – intentionally. So the phrase “is not practicable or not technologically feasible” means that it is either too expensive or impossible to remove lead. This makes no sense to me, as the term “practicable” with its advertised meaning incorporates technologically feasibility and makes inclusion of the latter term duplicative. If there is a reason to use both terms, I can’t figure it out. Readers?

In addition to the problematic standard of “practicable”, the petitioners must also demonstrate that it is both too expensive to remove the lead to levels below the standard AND also too expensive to make the part inaccessible. Since the standard for “too expensive” (not “practicable”) is not specified, this language means we must invite the CPSC, the Commission and (due to the notice and comment period) the general public and our competitors into our business processes. That rag-tag lot will get to decide whether the expense of money on the removal of lead from the subject product, material or component is “practicable”. Yes, that’s what it means – you must publicly expose your judgments and economic choices to the Commission for their feedback and approval. Presumably, this would require you to publicly disclose your costs to obtain the “not practicable” decision.

That really sounds like FUN! I can’t see a deterrent to submitting a petition . . . can you?

“(ii) the product, material, or component part is not likely to be placed in the mouth or ingested, taking into account normal and foreseeable use and abuse of such product, material, or component part by a child; and”

Two years ago, I might have thought this was reasonable language. In a world where logic prevails, this language is something that most companies could fairly easily (and probably already do) consider. However, after Ms. Tenenbaum’s testimony about rhinestones on September 10, 2009 in which she speculated about the ingestion of 50 rhinestones by a child, it is hard to predict which imaginary risk the CPSC will fixate on. Recent events suggest that “foreseeable” is now in the eyes of the beholder.

“(iii) an exception for the product, component part, or material will have no measurable adverse effect on public health or safety.”

This third plank in the exception standard is supposedly meant to connote that contact with a subject product which produces less than 1 micro-gram per deciliter change in blood lead levels (the smallest increment for measuring blood lead levels today) is okay. It does not say so explicitly but wink-wink-nudge-nudge, that’s what it means.

Unfortunately, the precision of this “standard” promises more than it delivers. There are few identifiable lead threats in children’s products that could foreseeably cause this kind of change in blood lead levels other than lead-in-paint (probably above 90 ppm, too) and lead in jewelry. So if each case must be argued and decided, isn’t the standard and the process some sort of sham? I think the difficulty and expense of proving the negative in this case is a strategy by the Dems to keep their ridiculous standard in place while appearing to be magnanimous in offering an exception process. Few companies will get exceptions.

Sadly, fear does not allow for the use of science. There’s a lot of hypocrisy here, too. Apparently, the risk from lead in handlebars of a bike is far more worrisome than lead in our air, water or food supply. Likewise, it must be far more serious than, say, lead-in-paint on cars and boats (both of which are perfectly legal). And for those cases which this law obsesses over, lead-in-substrate in children’s products, the zealots cannot agree on how to measure what’s safe – mainly because they don’t know. Let’s not forget that Commissioner Bob Adler wrote a lengthy paper )with 89 footnotes) on how there is NO safe level for lead. The non-scientists who now control this issue have even drafted a MOVING target for safety – it is dependent on what we can measure. If we can measure lead blood levels more precisely in the future, the exception standard will automatically tighten. Like a noose.

f. The Commission can require a warning label for those items afforded an exception under this strict standard. What? Are they going to warn us that the product is safe? No, it’s Proposition 65 creeping into federal law – apparently, the Dems think that the Commission may decide to warn the public that they weren’t able to rid these items of lead, even though they have determined in an investigation that the products are safe. Again, since the zealots think “there is no safe level for lead”, it is very scary for them to concede that anything could be safe if it contains lead. This is a belief system, stop trying to figure it out.

Btw, have any of you ever tried selling a children’s product with such a warning label? At our company, we would drop such an item rather than try to sell it. No one will buy such a product for their child or for use in their classroom. The imposition of a Prop. 65-style lead warning on a children’s product is a tacit ban.

g. The petitioner has the burden of proof in applying for an exception under this provision. That means a small business has to make the same case as a Big Business. Why not simply say that small businesses can’t have an exception under this provision?

The petitioner may utilize data submitted by other petitioners in making its case, but there is no requirement that such data be made publicly available. In recent cases, the submission of the petitioners has not always been made public.

h. The language allows a sunset date to be imposed for the exceptions, even though the very terms of the exception requires that the CPSC conclude that public health and safety will not be imperiled by sale of the product. I am made to understand that the motivation behind this illogical provision is that exceptions should not last forever. Why not? I think it’s the belief system again, or it could be some sense of unjust enrichment. In any event, the CPSC would be empowered to force the continued gratuitous erosion of a company’s cost structure for no particular reason other to remedy the offense of an exception to the rule.

i. The exception will have retroactive effect unless otherwise specified by the Commission. This sounds good . . . other than the fact that we have been shooting our businesses in the foot since August 2008. The ability to give retroactive effect to exceptions might have been valuable two years ago. To put it in an amendment now, two years too late, is an insult to the regulated community. Alternatively, it is yet more evidence of the absolute inability of Democratic legislators to even SIMULATE understanding of business issues under this law.

Next up – discussion of the Resale Shop Exception under Section 101(b)(3).

Read more here:
CPSIA – Treatment of Section 101(b)(2) in the New Waxman Amendment

CPSIA – The New Waxman Amendment Analyzed

On Friday, House Democrats began to circulate a discussion draft of a new amendment to the CPSIA. This draft follows the abortive effort by Chairman Henry Waxman of the House Committee on Energy and Commerce to slip a CPSIA amendment to his own liking into omnibus legislation last December. [That effort was disclosed and discussed in this space from December 11-16, 2009.] The crash-and-burn of the first Waxman amendment created a new dynamic in CPSIA negotiations as it was the first (tacit) public acknowledgement by Waxman that the law was flawed AND that the CPSC could not fix it by itself. The failure of the secret amendment effort also showed that Mr. Waxman isn’t invincible. So, a step in the right direction.

Recently, in the wake of the January 15th recommendations of the CPSC Commission, the Dems reignited the simmering discussion of CPSIA changes by engaging various stakeholders on how the first Waxman amendment could be improved. This process was constrained by the Dems’ insistence that comments be in the form of changes to the first Waxman amendment, thereby eliminating anything too “blue sky”. Consistent with the recent (and short-lived) post-Massachusetts Dem preference for bipartisan “cooperation”, the Dems actually asked House Republicans what they thought. Let’s just say the Republicans see some basic flaws in the law. . . . Anyhow, the Republicans having provided their feedback, largely rebuffed, this draft emerged.

The procedural process forward is unclear. The standard (and appropriate) process would be a hearing followed by a “mark-up”. The Senate also has something to say on this legislation (their position is not clear although Senate Dems more readily acknowledge the need to fix the law). It remains to be seen whether Waxman will allow a real hearing on the CPSIA to take place. Dissenting views are not well-tolerated in this era of Congress. Anyhow, the Dems are asking stakeholders to send comments by this Friday.

I intend to discuss this proposed legislation in several essays. In this essay, I would like to discuss global issues. I will return to discuss the specifics of the law, notably the treatment of Section 101(b), in later posts.

A few thoughts, generally:

a. The amendment dodges most of the serious issues in the law. My list of changes is comprehensive, and the draft legislation avoids most of it. This amendment makes no effort to respond broadly to the well-documented flaws in the law. No one can argue anymore that the CPSC can fix these problems. The legislation reads (to me) like the position of someone almost completely in denial.

Let’s face FACTS – the CPSIA was passed on August 14, 2008. It is now March 14, 2010. That’s a long time. The CPSC has blown countless deadlines, and has failed to resolve MANY critical issues so far, like the phthalates test standard, the 15 month rule and so on. They are working around the clock. This thing is not going to fix itself, and the agency’s future is literally at stake.

The Dems refusal to face up to these issues is a betrayal of you, your customers and your marketplace.

b. You might ask – WHY are the Dems avoiding all of these serious issues? Are they deaf?

I think the answer is that they are hardly deaf but have little interest in opposing viewpoints. The CPSIA is their legacy and as such, no amendment will be blessed by them if it admits a defect in their original thinking or their asserted Perfect Legislative Process. An “acceptable” amendment must therefore pay homage to the original law and its structure. By working within the law’s original structure, the Dems ensure that the basic defects will survive amendment – and the consequences to your business, your market and to the regulators themselves will remain devastating.

[The Dems' "legacy" also survives if they can delay change long enough to make it impractical or impossible to unwind all rules and regulations implementing the misguided CPSIA. After all, we business people have no choice but to upend our businesses to follow these rules, and would incur more damaging expense to change our processes a second time. There seems little doubt that the forces behind the CPSIA want the law's infrastructure to be impossible to untangle by future Congresses or CPSC Commissions.]

The Dems’ homage to the original law is evident in several places. For instance, the concept of a “low volume manufacturer” is designed to provide a very (VERY) limited opportunity to craft an exception to the original testing requirements. Even so, the language clearly states that exceptions benefiting the LVMs must still “assure certification based on compliance with the relevant consumer product safety standards.” [Emphasis added.] In other words, no exception will be given to the little guys from the law’s basic premise that manufacturers must prove compliance before sale. [More on LVMs later.]

The proposed rules on the so-called “functional purpose” exception also kowtows to the law’s concept that everyone must ask for permission to be excused from lead requirements. In other words, the Dems reject the notion that the law can be narrowed rationally and appropriately without a burdensome bureaucratic process. Even action by the agency on its own initiative will be a major ordeal. The Dems know (because they have been told) that the exception process is effectively a closed door for all but the most well-capitalized companies. You may interpret the legislative language as the Dems’ response to this small business issue.

Another good example of the Dems’ sticking with the original law’s structure is the use of the word “practicable” in the Section 101(b) changes. This change is the doorway for the ATV’rs and book publishers to argue for exceptions to the lead-in-substrate standards. I am told that this word was chosen because of a Supreme Court decision (that I have not read) holding that “practicable” incorporates concepts of economics. Ah, I see. In other words, this language is a way to make the law look just like the original one, but still provide a faint hope for business people that they can somehow wriggle out of ridiculous lead-in-substrate restrictions. It’s obscure, to say the least, but leaves the original legislative structure in place – the Dems’ principal goal.

c. The new amendment ADDS more complexity to an already blindingly complex law. I have written about complexity numerous times, and recently posted a video explaining the frustrating challenge of trying to understand this law fully. Complexity in this case does not reflect the difficulty in creating a safe market for children’s products. Actually, that issue is long-resolved. The complexity stems entirely from a defective legal structure and its consequences. If the Dems insist on keeping the original CPSIA structure in place, you must get used to complexity spawning more complexity in your business life. It will only get worse.

This is what Big Government looks like. Hope you like it.

d. CRITICAL ISSUES are absent and unaddressed in this legislation. Examples:

• Risk Assessment by the CPSC and/or the Commission.
• Changes in age limits for the lead standards and phthalates ban.
• Narrowing of the scope of “Children’s Product” to eliminate many categories of products unthinkingly pulled into this law by its overly broad language.
• True reform to protect small businesses.
• Tracking labels relief.

And so on. As noted above, to take these steps would mean acknowledging that the original law was grossly defective. The Dems would rather eat lead-free glass than admit their career achievement was fundamentally defective. Ironically, the Republicans have no such reluctance, despite voting for the original law. The sad prospect is that unless the Dems have a change of outlook (soon), real reform may need to wait for a change in gavel (bye, bye, Mr. Waxman).

Hence my excitement over the prospect of voting in November.

More to follow.

Read more here:
CPSIA – The New Waxman Amendment Analyzed

CPSIA – Draft of Second Waxman Amendment Is Released

The House Democrats just released the first publicly available draft of their proposed corrective amendment to the CPSIA. The draft may be viewed at this link. The next step in the legislative process will be either a hearing or a “mark-up”, neither of which has been scheduled. While the Dems had originally offered to follow the usual procedure for such important legislation, namely a public hearing followed by negotiation of the language (the “mark-up”), of late this idea has seemingly drifted away. Let’s hope it resurfaces. At this time, the Dems have requested comments on this draft from various interested parties by next Friday.

Please NOTE that this draft is a result of recent backroom negotiation, such as it is with Mr. Waxman, and thus reflects the Dems’ view of “middle ground”. The “bipartisan” nature of the drafting process leaves something to be desired, as Mr. Waxman and his team have insisted that the bill be based on his failed unilateral CPSIA amendment of last December, and have resisted the larger changes necessary to restore rationality to the law. While some issues are addressed by this draft, other problems move backwards or are simply ignored or buried. As you might imagine, this has not pleased everyone. Time will tell whether the Dems will continue to exhibit selective hearing as the process moves forward.

For now, enjoy reading the latest. I will provide analysis in due course, and in any event, look forward to your comments.

Read more here:
CPSIA – Draft of Second Waxman Amendment Is Released

CPSIA – Game Playing with Phthalates

Last Wednesday during ICPHSO, CPSC General Counsel Cheri Falvey made a direct statement about phthalates testing: You only need to test plasticized parts and paints for phthalates. She also noted that internal components still need to be tested, ridiculous (and expensive) as that may be.

In my post of February 17, I admitted that I hadn’t seen this in writing previously and asked for citations. A reader who knows more than me sent me this link. We think she is refering to this language:

“Not all plastics, however, contain phthalates. Certain plastics, such as polyethylene and polypropylene, generally do not require plasticizers. However, surface coatings and adhesives may contain phthalates. In addition, phthalates could be used in some plastics even though they are not required. Phthalates might also be used in some elastomers or synthetic rubbers. . . .

Manufacturers either know or should know what materials and components go into the products they make, and if the product or its components contain one of the plasticizers specified in section 108 of the CPSIA, the manufacturer or importer certifying the product must test the component or product to ensure that it complies with the CPSIA. Failure to comply with section 108 of the CPSIA is a prohibited act under section 19 of the Consumer Product Safety Act (CPSA) and can result in civil and criminal penalties. Likewise, failure to have a product subject to section 108 of the CPSIA tested by an accredited third-party laboratory and have the appropriate certification for that product is also a prohibited act under section 19 (CPSA).” [Emphasis added]

Aha, that’s it! Or is it? Here’s some more from this document:

“Examples of materials that do not normally contain phthalates and, therefore, might not require testing or certification are:
• Unfinished metal.
• Natural wood, except for coatings and adhesives added to wood. . .
• Mineral products such as play sand, glass, and crystal.”

I wrote about this provision in my comment letter on the second proposed phthalates standard (see paragraph 7). All the risk is on the manufacturer, there are no safe harbors other than comprehensive testing (even for wood, metals, sand and crystals), and there is no way to assure a dealer of the validity of an “incomplete” test report.. This rule remains an utterly unworkable and confusing standard – nowhere near as simple as Ms. Falvey implies. Although few wars are raging with test labs over this provision (since testing isn’t mandatory yet, “anything” goes), the possibility or probability of chaos remains profound.

I feel strongly that it is wrong of CPSC General Counsel Falvey to make light of this risky situation with an unsupported blanket statement, particularly since she is prone to “tisk tisk” you if you ignore one of her many oral warnings. If her words have the power of law, which they certainly don’t, then presumably they also provide cover. Are you ready to make that bet? In this case, if anyone relies on her statement, they are risking civil penalties or criminal charges according to Falvey’s own written policy.

Oops- that’ll teach you to listen to the General Counsel!

Read more here:
CPSIA – Game Playing with Phthalates

CPSIA – Waxman Language Dropped from Defense Bill

In a triumph for rationality (?), the Waxman CPSIA amendment has been DROPPED as an attachment to the Defense Appropriations Bill. It is dead and will not become law (the bill is posted on the House Rules Committee page and does not include this amendment). The people have spoken! Apparently, no one particularly liked the process dreamt up by the Waxmanites, and with full rebellion by various industry groups, certain CPSC Commissioners, other House Democrats, the Senate and of course, the slighted Republicans, the language was killed.

Notably, the very fact that Waxman himself proposed this amendment is a strong concession that something needs to be done legislatively to fix the law. This is also an acknowledgement from the top that the CPSIA can’t be fixed by the CPSC alone. Furthermore, it is clear that the language didn’t go nearly far enough to address the many well-known issues or put the CPSC in a position to take sensible steps to fix the mess. Finally, I sense a growing desire among legislators to work cooperatively and in a bipartisan way to fix the law. Perhaps more than a year of vicious fighting is wearing everyone down. Let’s not forget that the CPSIA was originally the product of bipartisanship. The withdrawal of the Waxman amendment is a strong vote AGAINST poisonous relations across the aisle, at least as it relates to safety.

Because of its evident flaws, the demise of the Waxman amendment is a very positive development, although I would (of course) prefer to see the law fixed. But fixing the law needs to be done the right way. It’s time to move beyond message control and the false notion that any amount of lead is dangerous somehow like uranium. We are all adults here, and know that something less than an outright ban of trace levels of lead would work just fine to protect consumers. There may be legitimate consumer concerns over toy safety and the safety of other children’s products, but the CPSIA (a law borne in anger) is misconceived as a solution.

Perhaps this crash-and-burn will bring about real change. The best outcome would be an overall change in atmosphere. There is NO REASON that all the stakeholders must continually fight like cats and dogs. When it comes to safety, this is a particularly ridiculous situation. The common interest of all adults is to protect children – NO ONE opposes safety. However, the issues in safety are procedural and economic in nature, which must be acknowledged, and the solution is more complex than may be apparent. It is my belief that a reconsideration of the CPSC’s relationship with the market may provide the best “pop” for safety. A reinvigorated CPSC committed to industry outreach and partnership would work wonders. Rebuilding a genuine sense of mutual trust, rather than a mutual sense of fear and loathing, will provide the best long term protection of consumer interests.

This is NOT a pipe dream! In the wake of the demise of the Waxman amendment , we need to move forward TOGETHER to recast the law to facilitate the strength of the U.S. marketplace while protecting the legitimate interests and rights of consumers. No one needs to lose in this process. And a lot of jobs can be saved – if we act promptly and with insight.

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CPSIA – Waxman Language Dropped from Defense Bill

CPSIA – Waxman Amendment Update

A few tidbits:

1. The Waxman amendment is expected to be attached to H.R. 3326 Department of Defense Appropriations Act, 2010. It has not been added yet, but will be done just before it goes to the floor of the House, presumably sometime tomorrow. It is expected to appear on the House Rules Committee website at that time. Speaker Pelosi is apparently going to Copenhagen on Wednesday which is also expected to be the last day that the House is in session this year. Thus, this amendment is expected to pass into law by Wednesday as part of this unstoppable appropriations bill.
2. Despite a flurry of frantic back room conversations, there appears little likelihood of change in the pending amendment language or terms. Mr. Waxman’s staff is telling one and all that the amendment is the “best we can do” and if we don’t like it, too bad for us. As noted, this amendment was written unilaterally by the Democrats with the cooperation of the Democrats on the Commission and without even showing the language to the Republicans on the House Energy and Commerce Committee or on the CPSC Commission. Hearings, naturally, are OUT OF THE QUESTION. Nancy Nord commented on the Democrats’ slight today: “While the amendment is less than clear legislative drafting, with its passage, Congress does acknowledge, for the first time, what many of us at the agency have been saying for many months–the inflexible nature of the CPSIA has limited the ability of the CPSC to minimize the unintended consequences of the law–hurting product sellers and limiting consumer choice while not advancing safety. This amendment was drafted in a closed and partisan process, without input from relevant stakeholders and its shortcomings reflect this flawed process.” [Emphasis added.]
3. The subterfuge of Mr. Waxman and his allies on the Commission has resulted in almost no media attention to this critical amendment. The press has barely picked up on it (there was a tentative mention in the Product Safety Letter tonight, but that’s it as far as I can tell). This plays right into their hands by keeping the dissatisfied members of Congress at bay, something that’s not particularly difficult when there is so much attention diverted to “fat cat bankers” and health care legislation, among other things. Still, keeping it out of the papers helps quite a bit.

One can only hope that these tactics will backfire. This much appears clear – the legitimate interests of the regulated community, the well-documented issues of businesses (large and small) under the CPSIA, have been totally ignored. Only a small group of politically-connected industries had the power to jump the queue. Nice for them, but lousy for those of us left behind.

Read more here:
CPSIA – Waxman Amendment Update

CPSIA – WSJ’s 6th Editorial BASHING the CPSIA

REVIEW & OUTLOOK

NOVEMBER 7, 2009

Congress’s Brass Knuckles
Another casualty of the lead toy ‘safety’ law.

The wheels on the bus won’t go ’round and ’round in many playrooms this year if the Consumer Product Safety Commission has its way. On Wednesday, the Commission voted against a petition to exempt small pieces of brass used in the wheels on toy cars, tractors and buses from draconian lead standards. The fiasco is one more sign that Congress must address the chaos created by its 2008 law regulating lead in toys.

Lead is a typical component of brass but poses minuscule risk to children through toys. As the CPSC’s own staff remarked, “the estimated exposure to lead from children’s contact with the die-cast toys would have little impact on the blood lead level.” But no matter, the language of the law says the Commission can’t consider risk in granting exclusions. Any potential absorption of lead at all is grounds for a ban, despite its presence in other common brass fixtures kids get their hands on regularly, like doorknobs and keys.

Democrats in Congress have insisted that problems with the law they wrote are the fault of the CPSC charged with implementing it. How’s that going? Following the Commission’s 3-2 vote against the brass exemption, CPSC Commissioner Anne Northrop noted that the decision not to grant a brass exemption shows that “the Commission does not believe there is any [flexibility] written into the law.” Without action from Congress to address the chaos it created, Ms. Northrop said, “More small businesses will be forced to shut down.”

CPSC Chairman Inez Tenenbaum has insisted that changing the law would be “premature.” Yet it has already been more than a year of bedlam for manufacturers and retailers negotiating these rules. In February, the CPSC’s one year stay of enforcement on testing will expire, opening the field to more crackdowns on small businesses.

Many of the worst problems were apparent when the bill was written but lawmakers ignored the warnings in order to satisfy Naderite interest groups. Democrats have refused to fix this mess, at great cost to businesses, and further underscoring government’s reputation for unfairness and incompetence.

Read more here:
CPSIA – WSJ’s 6th Editorial BASHING the CPSIA

CPSIA – Brass Bushings Petition Rejected – Now What?

Disclaimer: I am in a bit of a rush today, but wanted to get this out to you. I normally give you quotes and citations, but today am working on a deadline. If I get a small detail wrong, my apologies – please correct me. I will try not to put the wrong words in people’s mouths . . . .
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As expected today, the CPSC Commission rejected the petition of Learning Curve to exempt brass bushings in the wheel assemblies of its toy cars. I have written about this several times in recent weeks, most recently issuing my own “ruling”. This innocent request was a loser from the start, not because of any safety issue but because of a very rigid and technical law that caught up brass bushings in its terrible web.

Some quick comments and tidbits:

a. Anne Northup emerged as the beacon of rationality in this debate, constructively offering a lawyer’s argument that the word “any” means de minimus amounts of lead, not none. She pointed out that Congress okayed 300 ppm lead content in substrate suggesting that it considered some amount of lead to be tolerable. Adler called this analysis “brilliant” but disagreed with it, contending that the clear meaning of the word “any” is . . . “any”. [The word "any" is critical to derive meaning from Section 101(b), the lead exemption section of the CPSIA. He also pointed out that the precedent in prior Commission decisions is that "any" means "any". [Who knew they'd read all those old decisions anyhow?!] Mr. Adler dipped into the consumer group handbook and stressed the health dangers of lead and repeated the “no safe level of lead” mantra. [It is hard to defend lead, and I have no intention of doing so, but as a matter of science, I think this is flat out wrong. Aside from the fact that we all consume lead by breathing, eating and drinking every day and must therefore being slowly poisoned with the government's apparent permission, toxicologists will tell you that the dose makes the poison. Thus, there are in fact safe levels for lead, notwithstanding that lead is a known neurotoxin.]

I agree with Adler’s legal analysis and support reading the law using the plain English meaning of the words. I prefer the OUTCOME offered by Northup, but a rational set of laws depends on use of the plain meaning of the words. I am also supportive of respecting precedent if we want to maintain a sense of the Rule of Law. So . . . this means we are stuck with this awful law and its awful strictures until it is amended.

b. I wasn’t the only one who realized that Congress needs to get engaged for the Commission to emerge from this corner. The debate on this topic was vigorous and fascinating. I recommend that you check out the video at your convenience. Adler pointed out that the language of the law is stringent (“rarely seen anything this emphatic”), intentionally so. Nord expressed severe reservations over this removal of discretion, noting that the CPSC is “the expert agency”.

Nord and Northup wanted the vote on the LCI petition delayed or enforcement stayed until the CPSC could seek guidance from Congress or feedback from OMB. Adler would have none of it. He cited the super-majority that voted for the law and expressed the view that Congress didn’t need to hear from the CPSC on this subject because of its decisive action. There were echoes in Adler’s argument of assertions by House staffers that the CPSIA didn’t need amendment because of its “perfect legislative process”, implying an all-knowing, never incorrect or regretful Congress. He said Congress “shot real bullets” and went so far as to state that not only would Congress refuse to act if CPSC approached it, but that it might actually harden its stance ESPECIALLY if the CPSC reached out. In other words, according to Adler, going to the Hill to get relief or guidance might not make things better, it might antagonize them and make things worse. Believe it or not.

c. Northup noted that she was the only Commissioner who has served in Congress and confirmed . . . (are you sitting down?) that some members of Congress do not master every nuance of every bill. Some might not read the bills at all. OMG! Anyhow, she says that the exemption section was likely considered by members of Congress voting for the CPSIA to be a real, if stringent, exemption process, not the inert and impotent process that it has become. This argument did not seem to persuade Adler or Tenenbaum. Adler said he had seen no indication yet that Congress was interested in changes to the law. This got a hot reply from Nord who offered him her file of letters from members of Congress asking for change in the law (including a letter from Senator Klobuchar (MN) specifically on the point of the meaning of “any”).

The meeting veered off in a schizophrenic direction at the end when Northup and Nord asked for a public debate to be scheduled on the meaning of this precedent and its far reaching implications. Adler replied that he wanted to see their “letter” because he said he might be “very sympathetic”.

I found this last exchange extremely confusing. Adler gave me the impression of speaking out of both sides of his mouth. Tenenbaum remained basically silent, which was disappointing, given the importance of this decision and of her leadership role on the Commission. She can provide more leadership to this group than by simply presiding over the meeting. A lack of coordination among the Commissioners or perhaps off-line dialogue seems to be missing. In any event, I may be some kind of political idiot but the Commission’s strategy or even the thinking about how to resolve this terrible impasse is not apparent to me. For them to reject the LCI petition (voted down 3-2, with the deciding vote cast by a MIA Thomas Moore), refuse the opportunity to kick the can down the road by asking Congress for guidance and then to seem interested in reaching out in some way anyhow, left me utterly confused. Should we trust them to guide us home, or are they lost, too? What’s the path forward, and why won’t they ‘fess up to both their problems and their strategy? What happens next and who will protect us? These are troubling questions.

The business community will be understandably horrified and demoralized by this decision. The strict interpretation of the CPSIA has now been blessed by a full Commission. They have hardened on the plain meaning of the law. While the Rule of Law has been upheld, and that’s a good thing, it also means that the worst parts of the law will be respected, too. Thus, the economic destruction that we have been predicting based on the plain meaning of the law was given a boost today by the Commission. If you want to see the future, read the law. It’s all in there. Until proven otherwise, this Commission has yet to signal an interest in going across town to talk to Mr. Waxman and his lot.

Interesting Side bar: Learning Curve apparently brazenly and openly continued to sell these items during the pendency of this petition. That risky strategy involved knowingly selling a product that they believed was illegal (that’s why they asked for an exemption). That’s a no-no, although it had no safety consequences for anyone (as acknowledged by CPSC Staff and certain Commissioners in today’s debate). Notably, Mr. Adler asserted that the CPSC Staff would let their own kids play with these cars even if the kids’ blood lead levels were right at some sort of hypothetical lead “tipping point” – in other words, the cars are perfectly safe, no point denying it. Nevertheless, Mr. Adler upbraided LCI for this procedural faux pas. He cited them for bad “optics”.

Bad optics – after today’s decision, I think that’s something for the Commission to think about.

Read more here:
CPSIA – Brass Bushings Petition Rejected – Now What?

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