CPSIA – Congress and CPSC in the Clouds . . . .

I have heard from an old friend today, a resale shop owner. The store owner is as frustrated as anyone by the CPSIA and has some interesting observations. The store owner’s point is that it is utterly impractical for store personnel to be up-to-date on recalls or to manage recall issues on a day-to-day basis. Think recalled baby monitors with “remedies” like a new warning label. Think also of the national chain of resale shops that told us that many of their MANAGERS are paid $8 per hour. Can you get a sense of the brilliance of Congress’ master plan yet?

The store owner sent me a picture worth a thousand words:

The store owner: “The photo I’ve attached is of my six-inch binder of printouts for every recall on children’s items since the early 90′s. The papers on the floor are the new recalls since September 2010. I printed those last week, so I need to go back and print the newer ones. I take this binder to all my events and strive to search it thoroughly to keep recalled items out of our events. I’m going shopping today to pick up a second six-inch binder as I’m obviously going to need it.” [Emphasis added]

Sounds very practical. I am sure Scott Wolfson and Sean Oberle have some useful tips for this store owner on how to manage all this data. It is worth NOTING that rifling through 20 years of CPSC recalls is not the store owner’s main business – their business is selling gently-used merchandise – but it probably seems like it nowadays.

The store owner is also a victim of unscrupulous “gaming” by a competitor who seeks to capitalize on fear and the ambitions of local politicians to put pressure on him/her. The store owner: “I’m no longer comfortable posting publicly about CPSIA since a local children’s resale full-time store owner has told several of her shoppers that she’s planning to call the [local] Attorney General to come investigate my next seasonal consignment event to be sure I’m in compliance with CPSIA. Since I don’t have XRF vision, there is no way to prove I’m in compliance with the instructions to not resell anything over the lead limits, despite the fact that I’m not required to test. I still don’t have a clue what do to about phthalates, but I’ve banned all bath books, bath toys, & teething toys from our events anyway.” [Emphasis added]

There’s a stimulus plan for you. . . .

Did you catch the store owner referring to any topic relating to safety, such as injuries or concern for the health of children? Nope. It isn’t the concern of the competing store owner or the local Attorney General, either. This is about officious bureaucracy, paperwork for paperwork’s sake, all to satisfy a neurotic anxiety without a basis in FACT.

I used to ask “Where are the victims?” The zealots in the last three years have been able to produce exactly ZERO injured children from lead or phthalates in children’s products. So I guess I have to nominate my friend the store owner – a prototypical victim of this law.

Job well done, Congress and CPSC!

Read more here:
CPSIA – Congress and CPSC in the Clouds . . . .

CPSIA – Watch Out, Resale Shops! The CPSC is Watching . . . .

An alert reader pointed out today that the 1.7 million “recalled” baby monitors (the ones that need a new sticker) can’t be sold at resale shops anymore. After all, they have been recalled so they are verboten now. Presumably they can only be sold accompanied by their anti-recall kit of the fancy new label restating the obvious, new instructions telling parents to come inside during rain storms and the clips (gotta have them clips!). As a practical matter, this will be impossible for resale shops to manage, so I hope resale shops everywhere are pulling these baby monitors to keep America safe.

In fact, the “hazard” that these devices present is common among all baby monitors so I certainly hope those shops stop selling all that merchandise immediately. Alert! Alert! No more baby monitors! And the hazard is found in everything with a cord that might be used near a crib – so you better stop selling humidifiers, lights, radios and the like. As the G-Men used to say, “Stop or I’ll shoot!”

Don’t forget, the CPSC has the U.S. Attorney ready and willing to put you out of business to protect . . . the . . . children. What would we do without those guys to keep us so darned safe?

And there will be penalties a-plenty, too, count on it. Jail time for selling a baby monitor? Well, we’ll have to see about that.

If you live the clean life and stop selling anything remotely connected to children, these issues won’t be a problem for you. Something to think about . . . .

I meant for the stores. Certainly not for Congress.

Read more here:
CPSIA – Watch Out, Resale Shops! The CPSC is Watching . . . .

CPSIA – A Quick and Incomplete Analysis of New Draft Waxman Amendment 2.0

With only a few hours to look over the new draft of the Waxman Amendment 2.0 before tomorrow’s meeting, I guess the idea is that we are supposed to drop what we are doing to complete an analysis fire drill. Power trip for the Waxman staffers? Possibly. Still, what choice do we have? I thought I would outline my preliminary comments to contribute to the debate.

It goes without saying that this is entirely my own work without the benefit of discussing it with others similarly situated and without the opportunity to compare notes. It is therefore likely that I have missed something important or made other mistakes. Sorry . . . . This post is also painfully long. Again, given that Mr. Waxman hardly cares about your problems or mine, I have little choice but to post this as one essay. Again, sorry . . . .

a. Modifications to Section 101(b)(2) Exemption Process:

• The idiotic post-exemption warnings provision has been deleted.
• The three-pronged exemption test remains in place, as does the ambiguous and troubling term “practicable”. “Practicable” is a sneaky Waxman approach to providing an escape hatch for big industries with narrow product definitions like ATVs and books. You’re not supposed to know this. Our laws aren’t for the little people anymore.
• The third prong of the exemption test has been clarified from no effect on “public health or safety” to no effect on “the user’s health or safety, taking into account normal and foreseeable use and abuse by all foreseeable users.” This change seems like new belts and suspenders to make it easy to deny an exemption. The Dem zealots want to be sure no one gets an exemption but ATVs and books, wink-wink-nudge-nudge.
• Poor applicants for exemptions are still obliged to wait hungrily by the door of the CPSC for the leavings of rich supplicants. Yes, small business owners who want exemptions like the big guys but can’t afford to pay the big bucks can reuse the big guys’ consultant’s reports provided the evidence is considered non-proprietary. [Whatever that might be.] Nice . . . if someone else has already paid for it and submitted it in an exemption process, and if you have access to it (and have found it), you can use it. Noblesse oblige, I guess. Thank You, Kind Sir. I speak for all the little people . . . . Oddly, this concept reappears in a confusing provision called “Previously Denied Petitions” that only refers to previously denied petitions in its title (I don’t get it).
• In another “how closely are you watching me?” change, the grounds for decision provision now permits the Commission to consider “only” evidence presented by “interested parties”, rather than the evidence presented by the party seeking such exceptions. So if you ever get as far as an exemption hearing, this provision turns it into a town meeting. How would you like it if anyone could enter and participate in your litigation without your consent . . . like your competitors or your business enemies? I have a good idea – why not just write into the law that Rachel Weintraub will be considered a party in interest to every action at the CPSC?
• The Narrowest Scope provision has been modified to clarify that you must not only address each component but also each material. The paranoia you sense in this legislation is just the precautionary principle at work. The staffer-gnomes who have been crafting this legislation are not thinking about how our markets work or should work – they are simply obsessing over how we business people might find loopholes. Of course, it is in the nature of business people to try to avoid laws, we are all so evil. Oh yeah, I forgot . . . .
• The Limitation of Exception provision now is framed in terms of “all foreseeable users” which I can only assume is meant to make the burden of proof higher for supplicants. After all, if you can foresee a so-and-so using the product (I won’t supply the colorful example), then the Commission must limit the exception. No possibility of risk can be tolerated by the precautionary principle folks.

As the provision for exclusions has not changed much, here is my analysis of the original language for your reference.

b. Treatment of Resale Shops by the Waxman Amendment:

• The provision defining a “used children’s product” seems to now mean (a) an actual used children’s product, and (b) new goods donated for a charitable purpose. This would seem to protect resale shops from liability for sale of items violating the lead provisions (but not the phthalates ban, notably) unless the seller or the person who supplied it to the seller knew it was in violation of the lead provisions. If that seems somewhat circular, it is. In this case, the law as drafted encourages resale shops to remain as ignorant as possible. This is Waxman’s “Don’t Ask, Don’t Tell” policy. Nice.
• There has been no clarification about the application of this provision to consignment shops. Do they “obtain” goods for resale if they never take title? Something fun to speculate about!
• In a little-noticed provision, the definition of “seller” includes lenders or donators of used children’s products. Thus, for lending libraries, they will be in the clear if they lend used goods, but will be on the hook if they lend new product. Does it become “used” after one loan, and if so, what does this mean? The legal department in your local children’s library will figure this out. Sure. As to people who donate, the provision is circular again. As best I can figure out, you are not subject to the lead rules (only) if you are donating something used for charitable purposes, but if you give away something new, you are on the hook. At least, that’s how I read it. So the bottom line is – don’t give anything new to a charity, just give them junk. This is what Mr. Waxman wants. And that means this is what Congress wants.

While these changes may be an improvement, they are sadly improvements without much impact. This provision remains convoluted and hard to understand. The definition has numerous exceptions and also avoids giving the same shelter to resale shops for all the other picayune provisions of the law, like the phthalates ban. Frankly, without a clean exemption for this industry, resale stores are all going to avoid this class of goods. The complexity alone will kill this exemption except for the most sophisticated participants in an industry not known for its legal skills or resources. These stores won’t hire lawyers to check their work. They can’t afford it.

This is my original criticism of this provision, which is still applicable.

c. Prospective Application of 100 ppm Lead Limits – this provision was not changed in the new draft.

d. Low Volume Manufacturer “Exceptions”:

• Thank heavens, they changed the term of art for these small fry to Small Batch Manufacturers. This was done at the insistence of the HTA. What a victory! Someone please explain this to me.
• The “In General” provision is basically unchanged, other than the fancy new name for the supposed beneficiaries of this largess. Notably, the last sentence was clarified to make sure no one could contend that Waxman inadvertently gave the Commission the power to grant “alternative testing methodologies” for ANYONE but the small batch guys. There’s so much trust and love flowing here . . . .
• The truly non-existent “relief” of this provision remains EXACTLY the same. Here it is, bask in its wonderfulness: “The Commission . . . may, by regulation, provide alternative testing requirements for covered products manufactured by small batch manufacturers in lieu of those required under subsection (a) or (b). Any such alternative requirements shall provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards. [Emphasis added] Standing ovation? These lucky micro-businesses must meet alternative TESTING methodologies that ASSURE compliance with the standards. In other words, they gotta test. They even added a “savings clause” to forbid any relief here (such as it is) if any foreseeable user might be foreseeably at risk. Some relief.

Notably, the reach of this section has now been limited to “covered products”. This new term, which incorporates a three-prong test (this is the second three-pronger of this amendment so far, but not the last). [See below.] Please NOTE that this new term means that the ONLY relief the CPSC can grant is to these small fry products. A product that exceeds the limits of a “covered product” will NOT enjoy any theoretical testing relief, even if made by a business qualifying for relief overall. Should you care? Well, in my view, if you have to endure the burden of full compliance with one product, you have to build the full infrastructure and bear the related liabilities. Thus, these micro-businesses supposedly being saved here are actually at substantial risk of suffocation if even ONE product sells well. Too bad for them.

The absurd and utterly inappropriate definition of a “low volume manufacturer” has been completely jumbled and incorporates the new concept of “covered products”, too. Let me try to sort out this for you.

- As noted above, only “covered product” enjoy any potential relief under this section. The “covered products” test is a three-prong test: (i) manufactured not more than 5,000 “units” of the product in the prior fiscal year, (ii) had not more than $30,000 in sales of the product in the prior fiscal year, AND (iii) had no more than $500,000 in total sales in the prior fiscal year. [Do you feel vines growing over your brain yet?] Dollars are indexed for inflation. Notably, the definition ONLY applies to the manufacture of these items, NOT importation. Too bad, importers. GOTCHA!

The implication of this definition is that if you grow to over $500,000 in total sales, all exemptions applicable to any of your low volume items goes up in smoke instantly. That last dollar is gonna HURT. You also cannot get relief for any individual product if your sales of THAT item are greater than 5,000 “units” per year or $30,000 in sales. Here’s another compliance tip: don’t grow your business! Too hard? Don’t worry, the other policies of this government should help you meet this goal . . . .

- The definition of a “small batch manufacturer” defines who should be treated with special charity by the CPSC under this marvelous section of the amendment. It’s not going be a long list. Who wants to see another three-prong test?! Okay, break out your calculator so you can figure out if they are referring to you: (a) AT LEAST TWO-THIRDS of “the manufacturer’s products” (I love that term) meets this two-part test: (i) the manufacturer manufactured or imported not more than 5,000 units of the product in the prior CALENDAR year, AND (ii) the manufacturer had not more than $30,000 in sales of the product in the prior CALENDAR year, AND (b) the manufacturer had not more than $500,000 in sales in the prior CALENDAR year.

This is getting fun! Okay, first we need to decide – is it a two-prong test with one prong having two sub-prongs, or is it a three-prong test? This is a rather metaphysical question . . . but I say it’s our third three-prong test of this short amendment. [Imagine how many three-prong tests are in the health care bill.] I welcome your insights on this question.

There are some interesting quirks in the Small Batch Manufacturer definition. First, this provision applies to imported products, but the “covered products” definition does not. Gotcha! What does this mean? Who knows. The head spins . . . . Even better, the definition of “Small Batch Manufacturer” is based on calendar year calculations and the definition of “covered products” is based on fiscal year calculations. Love it. I learn so much from Mr. Congress. Apparently, Congress wants it to work this way because there must be some sort of dangerous loophole for people who have fiscal years which are not the calendar year. Mr. Waxman is onto your game, you desperadoes! There’s no escape!

At least the Waxmanis kept it simple. Good job, guys, it’s artful!

Btw, they added a little provision to make sure that the Commission investigates the structure of your business’ “affiliations”. Clearly, the Commission needs to make SURE they correctly tote up your revenues for this ornate determination. [Little known fact: the CPSC uses clacker balls for this work.] The reach of the Obamist/Waxman government into your private affairs, in ways completely and utterly unrelated to public interest or safety, apparently knows no bounds. Get your files ready, little businesses – the CPSC wants to take a peek. Perhaps check out your tax returns and . . . oops, it appears you took a few deductions that you weren’t entitled to. We can just let our sister agency know, you don’t have to do ANYTHING, we’re just here to help.

Small business people, you should be flipping mad over this pathetic attempt to “help” you. My original criticism of this provision is still largely applicable.

e. Phthalates Ban Exception for Internal Components: This is largely intact from the prior draft although they did add a provision modifying the Commission’s right to adopt the definition of an internal component from the lead accessibility standard. The Commission must now, “as appropriate”, consider whether the component can be placed in the mouth. We are talking about internal components here.

I wish I had a laugh track for my blog . . . .

f. Removal of CPSA Section 6(b) Due Process Rights of Manufacturers: has been eliminated from the draft.

g. Voluntary Recall Standards to be Matched to Mandatory Recalls: has been eliminated from this draft.

h. Imminent Hazard Panic Attacks by the Commission: has been eliminated from this draft.

i. Subpoena Power for Underlings at the CPSC: This provision was trimmed back partially to apply only to physical and documentary evidence. This modest restructuring of this new right does not in any way address the issues I have pointed out in the past (here and here). This new subpoena power is not essential to the operation of the CPSC, regardless of their assertions, and represents a significant degradation of procedural protections that encourage business people to invest. When all trust is destroyed among the regulated community and its safety regulator, who will want to invest? Hello, Congress?

CONCLUSIONS:

The Waxman Amendment has been improved mainly by deletions of several truly awful and duplicitous provisions. Many defective provisions in the original draft survived the revisions. What’s left provides little substantive relief to the unwashed masses, but promises some sub rosa relief to the book industry and ATV’rs without giving the appearance of favoritism. There is little to cheer here for resale shops, small businesses (even micro-businesses, hello HTA, are you there?), education companies, apparel companies, you-name-it.

And many important issues are left completely unaddressed. I have previously provided my most discrete list of CRITICAL missing elements that must be part of any meaningful amendment of the CPSIA:

• 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.

My full list of needed changes is found here.

More fun to follow tomorrow, I am sure.

Read more here:
CPSIA – A Quick and Incomplete Analysis of New Draft Waxman Amendment 2.0

CPSIA – More Data on Devastation of Resale Industry

Can any sensible person continue to deny the pain inflicted on resale and consignment shops by the CPSIA? The issues have been well-documented for almost two years now. Not only were these small businesses needlessly harmed by this law and forced out of the children’s market, but the neediest American families dependent on these outlets were left in the lurch, too. Congressional Democrats left them there with the justification that it was for their own good. Spoken like someone with warm clothing on.

NorthJersey.com published an interesting piece on the plight of these retail outlets yesterday entitled “Some Thrift Shops Hurt by Lead-free Law“. It starts out:

“Janis Nelson, owner of Growing Kids consignment shop in Riverdale, points to a heavy book of lead-paint recalls as explanation for the store’s decision to stop selling second-hand children’s toys . . . . she could not risk a $25,000 fine, which is possible under the law if a single toy with lead were to slip past the heavy book of recalls.”

And the shops aren’t the only losers. The article continues:

“Besides hurting the stores financially, [store owner Lorraine] DeHart said that the law can also hurt consumers, who may be turning to thrift shops because they cannot afford department store prices. ‘People can’t afford to buy it new,’ she said. They might turn to garage sales, she said, where there tends to be less scrutiny over products sold. Yet even garage sales are not exempt from the new law. ‘If you’re going to have a garage sale, be careful what gets sold because if someone gets hurt they can sue you,‘ said Kathleen Reilly, public affairs specialist for the U.S. Consumer Product Safety Commission.” [Emphasis added]

What a calming effect the CPSC has on this market! I can’t wait to see what the CPSC’s Small Business Ombudsman does to earn his wages. Perhaps he will roam the land assuring small businesses that by complying with the thousands of pages of rules under the CPSIA, they can avoid getting sued, fined or jailed.

Crazy? Remember the words of Inez Tenenbaum: “‘CPSC’s new authority to seek higher civil penalties does not mean we will ignore serious violations by small businesses,’ said CPSC Chairman Inez Tenenbaum. ‘We will continue to take enforcement action against any business, large or small, that violates the Commission’s product safety laws and regulations.’”

And the market reality for the resale industry today? Ask the National Association of Resale & Thrift Stores: “NARTS members have reported significant increases in both sales and incoming inventory, according to NARTS, but those that sold children’s products did not fare as well with 44.2 percent experiencing a decrease in sales due to the challenges of complying with the consumer act of 2008.”

It’s time for Congress to stop sucking its thumb and do something for the neediest members of our society. Of course, some modest risk will be required to fix the mess they made in 2008. Resale shops deserve a bright line rule to encourage them back into the business of selling used children’s products. The law’s focus should be on recalled items only. The rest of the used children’s product category should be saleable without risk of liability unless the store has actual knowledge of a hazard. The strictures of the CPSIA will slowly and effectively clear out old inventory over time.

The resale industry has NO HISTORY of selling dangerous products or harming children. The “risk” of restoring the market sanity that prevailed before the lead mania of 2007/8 is trivial but the harm inflicted by the CPSIA fix is real and profound.

It’s time to ‘fess up and fix the law, guys!

Read more here:
CPSIA – More Data on Devastation of Resale Industry

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 – In Defense of Lead

Perhaps you have been expecting it. After all the “heat” in this blog over the past year, finally, my defense of lead. Hope you’re happy now. . . .

Last Friday, Commissioner Bob Adler posted his long-awaited position paper on lead and related CPSIA issues. Weighing in at 21 pages and 89 footnotes, Mr. Adler’s paper includes a thorough recitation of facts as well as his recommendations about the law. Among other things, he recommends making the lead exemption process more flexible and allowing clothing to be sold through charity resale shops. He also left the door open to changes that would ease the economic burden of the CPSIA on small businesses and low-income consumers. I agree with all of these changes – but I also think many other and more extensive changes are needed, too. I do not agree with the basis of Mr. Adler’s reasoning, however, and that makes all the difference.

Mr. Adler devotes about half of his statement to a detailed analysis of lead safety, reciting many facts not in dispute. Unfortunately, he then leaps to familiar conclusions that we have seen in recent Commission meetings and which are also found in many of his written statements. He does signal some extremely limited flexibility on lead, more or less hewing to the line put forth by Central Casting.

Ironically, Mr. Adler’s statement sometimes leaves you wondering where he stands, since he seems so sympathetic to both sides. It is frustrating to not have a clear picture of how he really sees the world. I fail to find persuasive his argument that the lead rules are good for us when they lead to ridiculous results like the banning of brash bushings on toy cars. Mr. Adler himself noted in the Learning Curve hearing that the brass bushings pose NO risk to children at a hypothetical tipping point with blood lead levels (in other words, the toys were incontrovertibly safe) – and then voted to ban them because the law compelled it. This should trigger a sense of outrage in the Commissioner . . . but it doesn’t.

To me, as an ex-lawyer, the illogical results documented in the Learning Curve case are intolerable. It is proof of a defective law and a defective system. Banning acknowledged safe products is a SIGN of problems, not something to rejoice in. As you know, it costs money to toss away perfectly good product. It also costs a lot of money to employ CPSC staff and Commissioners to decide silly cases like the brass bushing case. Something’s quite wrong if we are celebrating a system so obviously broken.

i believe there are fundamental flaws in Mr. Adler’s views on lead which prompt him to make recommendations basically defending a broken, illogical and self-destructive legislative system. Let me start by stating what I considered to be incontrovertible facts:

• Lead is bad
• Lead can be dangerous to children
• Harming children is bad, and unacceptable if reasonably foreseeable.
• Lead poisoning in children is largely if not entirely the fault of lead house paint and leaded gasoline

Mr. Adler makes the latter point in his footnote 83: “Clothing is not a significant source of lead poisoning. Far and away the greatest source of lead poisoning is lead paint in older housing, lead-saturated soil from gasoline emanated over the years from automobile exhausts, and lead-saturated dust (both from paint and gasoline).” [Other citations omitted] It is important to remember that Mr. Adler KNOWS that blood lead level problems stem from house paint and the long term consequences of years of leaded gasoline use (particularly in the inner city).

Mr. Adler tries to prove that lead is bad – but that fact beyond dispute. He goes further and builds the case that there is no “safe” level of lead, providing citations. Thus established, he then seems to justify the legislation’s strict terms based on the logic that if science hasn’t identified a safe level for lead, every instance of lead is therefore dangerous: “We may have currently reached the outer limits of our ability to measure negative effects of exposure to small amounts of lead, but that does not mean that no adverse effects are occurring. It basically means that we do not know.” Scary stuff. . . but what does he really think?

It’s hard to tell. Notwithstanding his assertion that no level of lead is safe, Adler seems oddly reassured by the permitted levels set by Congress: “[Given] that lead remains ubiquitous and often unavoidable, policymakers who are fully aware of lead’s risks, have sought to determine some level of lead that would be acceptable – at least until new information becomes available.” And these all-knowing policymakers (Congress) set a retroactive scheme of rapidly declining permitted lead levels. In other words, what was considered “safe” (meaning legal) on February 9, 2009, was “unsafe” on February 10, 2009, and what was considered “safe” on February 10, 2009 became “unsafe” on August 14, 2009, and what was “safe” on August 14, 2009 promises to become “unsafe” on August 14, 2011. Mr. Adler analyzes retroactivity under the CPSIA in his statement and then endorses it. Huh?

I fail to grasp the logic of either Congress or Mr. Adler here. Is lead in substrate dangerous or is it not? Is there a safe level for lead or is there not? Is lead safe on one day, and not safe on the next day? If so, can someone explain the science of that safe/unsafe trigger to me? I believe Mr. Adler’s accommodative attitude toward the lead standards and retroactivity is best explained by politics than by any notions of safety or risk.

It is even harder to take Adler’s stern tones on lead seriously when you consider the volume of lead elsewhere in a child’s life. Will regulation of lead in substrate in children’s products have any material impact on blood lead levels? Can anyone prove that it will, or that the cost of getting rid of all the lead is worth the cost? Remember that we could redeploy the same money for more impactful projects, like eliminating high lead levels in drinking water in schools or remediating soil contaminated with lead. We have already covered the fact that Mr. Adler knows that blood lead levels are fundamentally tied to exposure to leaded house paint and contaminated soil. It is also well-known that cars are coated in lead paint, legally under our laws. Lead is also in our food chain, is found in nature – and enters our bodies every day. [For data on this topic, see "Eat My Dust".] By obsessing on children’s products in the face of these facts, Congress ensured that its new legislation would fail to deliver measurable results.

In essence, the slogan “no safe level for lead” connotes a risk-free condition. “Risk-free” is an unrealistic standard and FAR too expensive as public policy. Mr. Adler uses this formulation in his lengthy analysis of used clothing sales: “In sum, I cannot state with certainty that a “safety” threshold of, say, 1 µg/dL blood level change would never occur from zipper sucking. . . . The fact that I cannot say there is no risk is why I characterize the choice [between allowing and banning resale of used clothing] as between bad and worse.” [Emphasis added] Mr. Adler is not following a legal principle here, he is asserting one. This is the precautionary principle, the famous Nanny State being implemented before your very eyes.

It is difficult to diffuse an argument based on the elimination of all possible risk. If we wish to organize our society around the elimination of risk, rather than the management of risk, we are doomed. All of us, not just the children’s product industry. The sad truth is that no one in the Federal government can prove that the policies of the last 35 years on lead caused injury. Mr. Adler implicitly asserts that our inability to prove that it DIDN’T is enough justification to throw the old system out. This is a belief system, not science.

The fear of risk is fanned by the threat of undetectable dangers. Mr. Adler notes: “To say the effects [of lead on healthy children] are not directly observable is not to say that that they are minor.” He amplifies this point by implying a link to children’s products to lead injuries without any proof of a relationship: “[MRI] technology has permitted us to identify permanent damage in adults stemming from childhood lead exposures.” Exposure to what, precisely? ABC blocks or the soil next to an inner-city apartment building in the leaded gasoline era? Mr. Adler’s assertion that we just don’t know what the harm is dodges the real question – how do you know there is any harm resulting from THESE USES OF LEAD? No answer is supplied because no one can answer that question.

The Adler statement paints a pretty compelling picture and the 89 footnotes were presumably intended to add academic gravitas to his arguments. However, not all academics agree with Adler. Here are videos of the presentations of two Ph.D.s who specialize in risk assessment in children’s products and lead issues taking an opposite view: Richard Reiss of Exponent and Barbara Beck of Gradient. They both note that the dose makes the poison and that only through true risk assessment will a sensible safety system be possible.

A couple brief notes:

- Mr. Adler talks a lot about retroactivity in the CPSIA. At the end of the day, he comes down . . . get ready for it . . . in favor of retaining retroactivity, but also for the recommendation of the Commission to make the pending 100 ppm lead standard prospective. I am not commenting on his arguments other than to say that I think relaxation of this provision would bring considerable economic relief without any possibility of physical harm to anyone. That’s enough reasoning for me.

- In calling for change to the lead exemption process, Adler is apparently willing to support only “a modest expansion in the amount of discretion granted to the Commission”. I find this rather curious and unexplained – he only wants a little discretion. Why? Does he worry that the Commission can’t handle the responsibility for full discretion? Again, why? I wonder if greater powers suggested this very limited recommendation out of a lack of “trust”, namely trust of future Commissions not hand-picked by this Dem-dominated Congress. No matter the explanation, it is curious indeed to see a Commissioner ask Congress to extend his Commission limited discretion.

- Adler devotes considerable space to sale of children’s clothing at resale shops. He ultimately recommends that charity resale shops be allowed to sell children’s clothing (possibly subject to posted Proposition 65-like warnings, see footnote 88). Adler’s logic in this section is puzzling to me. Is Adler trying to defend children or defend the CPSIA? He concedes that clothing has no history of causing injury from lead but is apparently troubled that it cannot be proven that a child couldn’t be harmed by clothing. Incredibly, he resolves the dilemma by distinguishing between resales made by charity shops and by for-profit shops, leaving the latter out of his proposed exemption. So is he approving the sale of unsafe products by charity resale shops to poor people so they can stay warm? Or is he saying that the clothes are probably safe, but can’t be sold by for-profit stores for . . . what reason? If the clothing is safe to sell, sell it . . . and if it isn’t, don’t. WHO sells it shouldn’t matter. But apparently it does.

An aside: Mr. Adler uses some strong language to discuss those of us who have pushed back on this law: “As I have waded into the debate, I have encountered many thoughtful, sincere, and anguished concerns about the CPSIA. I have also heard numerous overheated arguments, scanned many bloviating blogs, and read great numbers of error-laden emails (and letters) commenting on the law.” For those of you who don’t know this SAT word, “bloviating” is defined as “[to] discourse at length in a pompous or boastful manner” on dictionary.com. I wish our government officials would stick to the issues and avoid attacking the exercise of Free Speech by U.S. citizens. This is particularly the case here, since after a long fight, many of those bloviaters have been proven right. I don’t expect thanks, but I think this is out of line.

I could go on, but I won’t. Mr. Adler’s voice in the debate is an important one and I appreciate his efforts to set the record straight. I don’t agree with him and appreciate the opportunity to reply.

You be the judge!

Read more here:
CPSIA – In Defense of Lead

CPSIA – Commission Report to Congress on CPSIA Changes

The CPSC Commission issued its January 15 Congressional report on recommended changes to the CPSIA last Friday. As promised by Inez Tenenbaum, the Commissioners were afforded the opportunity to present individual statements to accompany the Commission report. Four of the Commissioners (Tenenbaum, Adler, Nord and Northup) chose to present their own statements. Adler also promised a supplemental statement on the subject of lead, which has not been released yet to my knowledge.

The Report and the accompanying statements make interesting reading. I do not propose to summarize the documents here, but have set out a few thoughts:

a. The Commission’s Consensus is Important. The Commissioners made a big effort to speak with one voice in the report. While they certainly did not agree on everything, their effort to achieve bipartisanship agreement in the report sends a good message. The Commission needs to work harder to find this middle ground more consistently and less fractiously. There is NO JUSTIFICATION for turning safety into a game of political football. If the Commission can work better together, confidence in their administration will grow and extremes will be avoided.

The prohibition against full Commission meetings in private (the Sunshine Act) is a hidden factor in the report. Since the Commission ill-advisedly voted down a public discussion of the report, the Commissioners were prevented from meeting in groups of three, four or five. When you read this report, imagine how it might have read if the five Commissioners were allowed to sit in a room and duke it out. It might have been a better document, more complete and more prescriptive.

b. Where’s the Functional Purpose Exception??? The report is as interesting for what it DOESN’T say as for what it does say. Most importantly, the functional purpose exemption is GONE. Rumorville has it that the functional purpose exception became more and more ornate and complex as the Commissioners struggled to write a recommendation until even its most ardent supporters had to concede that it wasn’t going to work. This was set up to be Waxman’s excuse to do nothing or nearly nothing. It’s not there anymore.

Too bad for Henry, huh?

c. The Commissioners’ Statements Reveal that Common Sense is Divided on Party Lines. The Commissioners’ statements reveal a lack of communication within the Commission. I know they were talking but it appears that some messages weren’t being heard. The statements of the two Democrats (Moore apparently did not prepare a statement) were straight out of Central Casting. Disappointingly, Ms. Tenenbaum chose to repeat a fairy tale about the law’s origins:

“In response to the flood of dangerous imported products, which were involved in tragic fatalities, poisonings and injuries involving children, Congress closely examined the needs of the CPSC and the statutory changes necessary to enhance the regulatory safety net maintained by the agency. Congress spent considerable time reviewing these needs and continually consulted with the agency’s leaders, staff, consumer groups, and the regulated community in order to carefully craft the proper legislation to achieve this end. Seeing a clear need to reauthorize and reinvigorate CPSC with new energy and purpose, Congress passed a sweeping law.” [Emphasis added]

The re-characterization of what was essentially an anger-fueled legislative mania into some sort of group hug is apparently the Democrats’ effort to justify a passive or inert approach to fixing the law. In addition, both Tenenbaum and Adler repeated the misleading togline about the dangers of lead, although I don’t think that’s news anymore. It’s also not really relevant to discussing the issues under the law – and their persistent refusal to acknowledge this is disappointing.

The Republicans (Nord and Northup) delivered rational and balanced statements that calmly and appropriately diagnosed the issues with the law. They are cognizant of the excesses of the law, the dramatic impact on both the regulated community and the hobbled agency itself. The Reps make no effort to prop up the CPSIA – you know, the law passed by REPUBLICANS AND DEMOCRATS ALIKE. There’s no pride of authorship by the Reps – to their credit, these Commissioners seem to be trying to restore a rational system of law and regulation designed to provide appropriate levels of safety at an affordable cost.

I am tired of the Dems on the Commission simply being good Dem soldiers rather than committed stewards of safety. The ANGER expressed in Massachusetts today is a strong message to the Dems – America is sick and tired of government aggressively inserting itself into every aspect of our lives, including by way of the CPSIA and its precautionary principle. See tonight’s Wall Street Journal for more details. It will be interesting to see if Massachusetts impacts the CPSIA amendment process.

d. Does it Matter What’s Safe Anymore? I am struck again by the absurdity of the debate over lead. As I see it, the debate is over which incidents of lead that are illegal should be permitted. This is different from defining what constitutes safe lead. This used to be a simple decision. Now the premise is that there is NO safe level of lead. Is that really TRUE?

Think of ALL cases where lead is found in children’s products. Now separate them into two piles, one that is labeled “safe” and one that is labeled “not safe”. How do these piles compare to the piles made by the CPSIA, FHSA and CPSA? Well, that question never comes up in the debate. The big question is about compliance with law, not safety.

This is not a rational system for administering risk. First of all, if lead were so deadly that it needed to be eliminated in all cases in all children’s products, then presumably we would be even MORE motivated to remove it from our food, water and air (not to mention dirt). After all, we consume food etc. and the lead in the food gets into our bloodstreams. But this isn’t an issue today because the CPSIA didn’t make it illegal – and apparently the CPSC does not feel lead is dangerous in food, water or air (or else it would have acted on the threat under the FHSA). It gets worse – consider that lead paint is illegal on children’s products but not on cars. If lead is so dangerous and mere contact with lead-in-substrate is so dangerous that it is utterly intolerable in a modern, sophisticated society likes ours, then why does the CPSC permit kids to touch or even ride in cars? After all, the zipper pull on a kid’s golf bag is illegal if it has a dot of lead paint on it. But a whole car dripping with lead paint, that’s fine.

The answer – it doesn’t matter what’s safe when it comes to lead, it only matters what’s legal. The Dems prefer to portray what’s illegal as unsafe, and imply that what’s legal is safe. [Call this the All-Knowing Congress argument.] It’s hard to take this seriously. It’s time for them to drop the precautionary principle pretense and start being accountable for the rationality of their regulatory positions. If lead is a crisis as they say, then please ban everything with lead in it, including our entire food chain. I am ready to be safe, finally.

e. What Has Been Accomplished in the Last 18 Months??? Does it bother you as much as me that so little has been accomplished by the last 18 months of chaos? The many steps and achievements documented in the report and statements might make a bureaucrat blush with pride but how have injury statistics changed? [Recall statistics are a poor measure of the effectiveness of safety rules.] How much did we pay as a society for these extremely meager achievements? If you add in the cost to our society of a crippled safety agency, the price we paid is staggering. The waste is sickening. It’s not possible for me to read the recounting without a sense of loss.

f. Does Anyone Else Want An Exemption? Umm, Yeah! It’s important to note that the low number of exemption requests does not reflect a lack of interest in exemptions. Exemption requests are very expensive to prepare and are complex. In many cases, the exemption request will obviously be rejected or is too broad to state in any compelling way. For instance, educational products span so many categories that it is impossible to state a coherent exemption request. More importantly, the real inhibition to filing is a fear of losing the request. For many companies, it just doesn’t pay to ask for permission – they prefer to beg for forgiveness if a problem ever arises.

Anne Northup correctly notes in her statement that it is bad law to require that regulated companies line up for exemptions. She is not arguing on behalf of the companies – she focuses on the huge burden these requests place on the CPSC and the Commission. She is TOTALLY correct. The idea that we should have a safety system based on exceptions would only appeal to the IRS. Somebody needs to listen to Northup on this point.

g. The Report Whitewashes Ineffective Help for Resale Shops. It is a sad joke to assert that coaching resale shops with the CPSC’s guidance document and a few workshops is somehow a solution to the massive problem caused by the CPSIA. For one thing, it is quite clear that this message has not reached its audience. The CPSC’s approach is inherently inefficient and unlikely to bring relief to many affected stores. A better law is the necessary solution. Second, it is apparent that the CPSC’s efforts did not relieve anxiety – the stores are still dropping children’s items. This lack of accountability begins to look cynical when you consider that only last week, Scott Wolfson was warning people not to sell cheap jewelry on auction sites or in resale shops. Hmmm, that sounds very reassuring, doesn’t it? Problem solved!

If the Commission truly cares about resale shops, then a more effective approach (including a communication strategy) needs to be implemented.

With the issuance of the report and statements, the shuttlecock has been batted back to Congress. The next step is to work on a long-needed amendment of this awful law. Stay tuned.

Read more here:
CPSIA – Commission Report to Congress on CPSIA Changes

CPSIA – CPSIA Casualty of the Week January 7

The Alliance for Children’s Product Safety’s “CPSIA Casualty of the Week” highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

Congress and the CPSC need to address the problems with CPSIA implementation to help small businesses by restoring “common sense” to our nation’s product safety laws.

CPSIA Casualty of the Week for January 11, 2010

NEW SAFETY LAW CLEANING OUT “THE KIDS CLOSET”

Kitty Boyce worked for 18 years to build her resale shop, The Kids Closet, located in Rochester, IL, into a well-known resale shop. With its colorful signage, brightly decorated interior and whimsical whale logo, The Kids Closet built its reputation on offering customers quality second-hand children’s products at great values.

Shortly after being voted the “Number One Place to Shop Resale” by the Illinois Times, Kitty announced that because of CPSIA she was converting her store to sell predominately teen and adult clothing, home accessories and furniture, and changing its name to Remarkable Resale. The loss of revenue in her shop due to the changes in inventory forced her to lay off several employees.

“CPSIA has been devastating for us,” said Kitty. “We just decided to get rid of all the toys and furniture. It’s just not worth the risk.”

While the Consumer Product Safety Commission has temporarily stayed requirements for testing and certifying products, all resale shops still must comply with the new lead and phthalate standards. Realistically, resale shops cannot be 100 percent certain that the used items meet the new requirements.

Due to the over-reaching law, Kitty Boyce’s dedicated attempts to provide children and families with reasonably priced, gently used baby equipment, furniture and toys have been shut down. For Kitty and others, the risk of enforcement action by state attorneys general or private groups is too great. The result is that during one of the worst economies in decades, resale shops around the country are avoiding selling winter clothing for kids and other children’s products.

This winter, ask Congress how denying a perfectly safe used winter coat to a child whose parents can’t afford to buy a new one is protecting that child’s health.

For more information about Kitty Boyce, visit http://www.thekidscloset.net/closet.htm

For additional information on the Alliance for Children’s Product Safety and CPSIA, and to view previous “Casualties of the Week, visit http://www.AmendTheCPSIA.com/.

Read more here:
CPSIA – CPSIA Casualty of the Week January 7

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