CPSIA – August, The Month To Scare (Oops, Save) The Populace

Well, it’s August, almost time for Congress to recess for elections which means it’s also time for your Dem friends to save you again. Makes a nice story for election time. Remember how Congress saved us two years ago, by passing a little bill called the Consumer Product Safety Improvement Act on August 14, 2008? I bet you’re getting ready for the bill’s second birthday party! Anyhow, the Congressional cicadian rhythm drove a couple Pelosi clones, Rep. Jan Schakowsky (D-IL) and Jackie Speier (D-CA), to timely release their latest legislative salvos designed to prove up their worth to you, the voters.

Ms. Schakowsky, one of Illinois’ “finest” who is rated the Number One Spender in Congress by the National Taxpayers Union (thanks, Jan!), offered up another CPSIA-like morsel, the noxious H.R. 5786 Safe Cosmetics Act of 2010. Before we go on, who’s against safe cosmetics? Everyone raise their hands . . . no one? Okay, we’re all for safe cosmetics. So what’s the problem?

• Annual registration with the FDA for all manufacturers, including much proprietary and confidential information.
• A federally-mandated schedule of new fees for the FDA to assess on the now poorer cosmetics companies.
• New safety labels (an old Schakowsky standby to make everyone so much safer).
• FDA review of the “physical, chemical and toxicological properties” of each chemical or mixture listed on the label. And lots of testing.
• New FDA regulations on banned chemicals and so on.
• New prohibitions, meaning that penalties and perhaps criminal actions are possible.
• Mandated public reporting of “adverse health effects”.

The trial bar has to be licking its chops. And Jan gets to claim to her constituents that they can’t live without her. After all, who else is going to save them??? Just like the CPSIA saved our company, our employees and our customers. So, so, soooooo safe and we get an even bigger federal government as an added bonus!

Not content to be outdone, savior-in-training Jackie Speier followed up her ratting out of safe McDonalds Shrek glasses with the newly-minted H.R. 5920 Toxic Metals Protection Act of 2010. Anyone against being protected from toxic metals??? Hmmm, no one? Thank heavens we have such an alert member of Congress ready to sweep in to protect us – right before elections! One of the big effects of this law is to make lots of things illegal and to specify civil and criminal liability for infractions. We really needed this!

Ms. Speier explains her “motivation”: “’Children’s developmental health in this country is threatened by exposure to products containing cadmium,’ said Congresswoman Speier. ‘In May, Wal-Mart removed cadmium-tainted jewelry from its shelves. Last month, McDonald’s recalled over 12 million glasses containing cadmium, and SmileMakers Inc. recalled 68,000 Children’s Happy Charm Bracelets and Football Rings for containing this toxic metal. It’s time to be smart and aggressive about the risks posed by toxic metals that can cause children harm. This legislation is aimed at protecting them from hazardous levels of metals in products they might use.’” Oops, she forgot to mention that the Shrek glasses were acknowledged to be safe by the CPSC or that none of these products is associated with a single injury. Details . . . .

Then there’s the swelling pile of Op-Eds and Editorials touting the “urgent” need to tighten the noose on chemicals (LA Times: “The new regulations will be burdensome on industry — and even more so if the state approves the recommendations we’ve listed here — but they should also pay dividends by lowering health care bills and environmental cleanup costs, as well as spawning a new industry dedicated to developing safer chemicals.”). [Ed. Note: I love the part about how the bill will lower costs! I wish newspaper editorial writers knew how to add and multiply - they could really figure stuff out with those skills.] Henry Waxman, current shield of the CPSIA and guardian of the rules and regulations that ensure the business death of the children’s product industry, wants to finish the job by making us account for every chemical in every product. TSCA Reform – super! We’ll all be so safe . . . in the unemployment line.

Your Congress at work – making the world safe from jobs and prosperity, an August tradition!

Read more here:
CPSIA – August, The Month To Scare (Oops, Save) The Populace

CPSIA – Comment Letter on the "15 Month Rule"

August 3, 2010

Todd A. Stevenson
Director, Office of the Secretary
Room 820
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814

Agency: Consumer Product Safety Commission (CPSC)

Re: Docket No. CPSC–2010-0038 Testing and Labeling Pertaining to Product Certification.

Dear Mr. Stevenson:

I am hereby submitting comments in response to the Solicitation of Comments on Testing and Labeling Pertaining to Product Certification (Docket No. CPSC–2010–0038) published in the Federal Register on May 20, 2010 (the “Proposed Rule”).

The End of (Business) Life As We Know It:

As I sit down to record my comments on this rule, I take comfort in knowing that the CPSC admits what it is doing here. In a section entitled “Caveats and Possible Market Reactions to Third Party Testing Requirements”, the agency acknowledges the severe impact of its new rule on manufacturers:

a. Significantly increased costs,
b. Incentive to redesign (presumably successful) products,
c. Incentive to reduce features on products,
d. Incentive to eliminate (presumably useful) components in finished goods,
e. Incentive to reduce product lines,
f. Exit the market altogether,
g. Go out of business,
h. Create barriers to entry for future business expansion, especially in specialty markets (non-mass market),
i. Devastate niche markets (noting particularly the “special needs” educational market – sorry, blind kids!), and
j. Incentive to delay or forgo product or manufacturing process improvements (to avoid testing costs).

Quite a stimulus program! Of course, the CPSC knows we can’t meet this challenge alone. In “The Potential Effects of the Proposed Rule”, the agency advises us to hire a few helpers:

a. Lawyers to review CPSC regulations,
b. Engineers and chemists to develop product specifications, conduct tests and design a program for production testing,
c. Statisticians or consultants to determine the frequency, sample size and collection method for production testing, and
d. Technicians, “perhaps working under the supervision of an engineer, chemist or similar professional”, to perform production tests.

This certainly is a Brave New World for us. Luckily we have the CPSC to tell us what to do. Unfortunately, we can’t afford an in-house legal department or teams of engineers, chemists or statisticians. We don’t even have technicians. Incredibly, somehow we bumble on in our blissful, almost charming ignorance, having had only one recall of 130 pieces (we recovered every unit) out of perhaps 1,000,000,000 units sold in the last 26 years. No doubt all the pain the CPSC is promising us will be worth it . . . gotta keep everyone so safe.

Seriously, Is Anyone Listening?

On page 28338 of the Federal Register, the Proposed Rule reproduces the “reasonable testing program” as it stood before the December 10-11, 2009 workshop at the CPSC. The workshop (which we attended with three people who were each asked to appear as a panelist) was ostensibly for the purpose of giving “stakeholder feedback” on the so-called “15 Month Rule” (the Proposed Rule) and the component testing rule (also up for comment today, posted under separate cover). We gave detailed feedback on these rules – none positive – yet the Proposed Rule seems to have preserved the original, deeply-flawed concepts intact.

It is difficult not to conclude that the process of providing feedback to this CPSC is a sham. While Chairman Tenenbaum has long touted her “policy” of seeking feedback from all stakeholders including industry, judging from this rule, the commitment to seeking feedback does not involve maintaining an open mind. It appears that the most likely feedback to be well-received is feedback that ratifies what the agency already plans to do. Other feedback is “wrong”, I guess. I doubt you will find this letter useful.

As time ebbs on and as the drumbeat of a CPSC bent on our destruction becomes more and more clear, the incentive to waste a few days preparing detailed comments also ebbs. Nevertheless, owing to the importance of this Proposed Rule, I am hereby submitting comments. I have no reason to be optimistic that you will consider my point of view with an open mind. This rule has all the earmarks of a fait accompli.

Deeply Flawed Economic Analysis.

The Proposed Rule devotes pages and pages to a tortured analysis of its purported compliance with the Regulatory Flexibility Act (“RFA”). This section of the Proposed Rule is a virtual admission of how unworkable the rule is (and the CPSIA testing scheme in general). As a starting point, the rule states: “The objective of the rule is to reduce the risk of injury from consumer products, especially from products intended for children aged 12 years and younger.” In my recent study of CPSC recall data posted on its website, I have found exactly ONE DEATH and THREE ASSERTED INJURIES from lead or lead-in-paint from 1999-2010. Please keep this statistic in mind as I review the economics of your “injury reduction” effort.

The flaws in the RFA analysis are clear in its discussion of testing costs for toys. The analysis acknowledges that it only accounts for out-of-pocket testing costs, nothing else. Significant additional (and ignored) costs include samples destroyed or damaged in testing, transportation of samples, administrative costs for managing testing, administration costs for managing the testing data, administrative costs for managing recordkeeping, an allocation of general management time, legal expenses relating to testing and so on. Depending on the scale of the business, I estimate that these costs (and distractions) will add 15%-50% to the out-of-pocket testing costs.

The RFA analysis concludes that testing a typical toy will cost $1,262 per product. As an average, this might be a good number for our business. I would note, however, that the Proposed Rule posits that we will test multiple samples, sending in perhaps four separate samples per item to satisfy the bizarre “required high degree of assurance” standard. [The rule states clearly that testing one sample is never enough. Interestingly, we have never had the experience in the last 20 years that multiple safety tests of the same product reveals anything useful other than rapidly approaching poverty.] The rule’s four-sample regime takes the testing cost per toy up to $4,848 (by the calculation in the document) plus another $2,500 for mechanical tests (because the rule posits that we will submit FIFTY samples for mechanical tests). That brings us up to $7,348 per item, plus 54 destroyed samples. This implies a rough “all-in” cost of $10,000 per item. We have 1,500 catalog items in our product line. Without a “reasonable testing program” in place (see below), we will have to test each item annually. This is a cost of $15 million for our company EVERY YEAR. [We also sell custom items, a business that would presumably be terminated by this testing rule. That’s several jobs down the drain.]

Does it surprise you to know that $15 million in testing costs exceeds our annual profit? By far?

The RFA analysis is deeply flawed in other ways, too. The rule duly reports that “[a]ccording to a representative of a trade association, there are an estimated 50,000 to 60,000 individual toys on the market.” Oh, really? Perhaps the CPSC shouldn’t have consulted the International Hubcap Manufacturers Association for this information. A quick visit to the Amazon.com website reveals listings of 808,465 toys and games on August 3rd (http://amzn.to/djtTVX). Amazon is a customer of ours – I estimate that they list about one-third of all toys and games sold in the consumer market. Call it 2.5 million toys and games available to consumers in the U.S. But that’s not all – the category also includes specialty items not present on consumer sites. For instance, our industry, the education industry, is largely invisible on consumer sites. I estimate that about one million SKUs are available to purchase at the annual convention of the International Reading Association. Millions of other SKUs are displayed at the national math show, the national science show and the national early childhood show. Add in special needs and other sub-markets – and you get well in excess of 4-5 million toys and games. So the RFA analysis might be off by 100x in its assessment of the toy market ALONE. That’s not close. . . .

The RFA analysis goes on to conclude that the ENTIRE MARKET of products affected by the rule is 100,000–150,000 products. This includes “wearing apparel, accessories, jewelry, juvenile products, children’s furniture, etc.”, plus non-children’s products and other children’s products like ATVs, bikes, bunk beds and so on. It is hard to dignify this ridiculous data with a retort, except to note that it is absurd on its face. The apparel industry ALONE offers as many as 8,000,000 different children’s SKUs for sale. The RFA analysis is fatally flawed.

At $10,000 per SKU, the projected children’s product testing costs will easily exceed $50 billion per year. Remember the 11-year CPSC statistic on lead deaths and injuries – one death and three ASSERTED injuries? [There are no recorded injuries from phthalates or cadmium, by the way.] The 11-year compliance cost will exceed $550 billion (in 2010 dollars), expended by U.S. companies to “reduce” this risk of injury. It would cost a lot less to wrap every American child in bubble wrap.

Small Businesses CANNOT SURVIVE THIS RULE.

Assuming we are supposed to take this rule seriously, the Proposed Rule is perhaps the best friend of the mass market yet invented by an agency seemingly bent on the destruction of the small business community. This letter documents again and again the unrealistic expectations and assumptions made by the authors of this rule with respect to businesses in general and small businesses in particular. Thousands of small businesses of every stripe and color will be affected by this rule. Are you seriously thinking that they will all hire statisticians, chemists and engineers to prepare the reams of data, plans and reports the CPSC expects? Once this massive, herculean effort is completed, who will be safer anyhow? I can think of someone – mass market companies who have been handed a game-ending cost advantage on a silver platter by the CPSC. This, combined with mass market companies’ ability to create certified firewalled in-house labs, favors the big guy dramatically. No wonder the rule states again and again how prejudicial this rule is to small business. The CPSC knows what it’s doing.

Small businesses will strain to even understand what is expected of them. The rule is obtuse, long-winded and full of arcania. Small business people may not have the time or skills to master this complex rule. When the CPSC turns to its attention to enforcement (as promised for 2011) and selects a few small businesses to whip into shape, the market will take note of the pain and a mass exit will result. I realize, however, that Cassandra-like predictions haven’t influenced the CPSC in recent times. One of the Commissioners has even been quoted as saying that “anecdotes aren’t evidence”. It feels like we have to die to prove we were right. A few small businesses might just do that, if the agency waits long enough.

The Commission has asked for feedback on how to address these issues. The complexity of the CPSIA safety rules proves that they are unworkable. To repair this damage, the Commission must ask Congress to restore its ability to assess risk. I am assuming that the Commission would exercise this discretion with more common sense than is embodied in this rule. CPSC rules should be trimmed back to things that MATTER, only. Second, the agency should build its rules and its enforcement activity around DATA. Injury statistics tell the agency what is important. If a particular hazard generates ONE DEATH AND THREE ASSERTED INJURIES OVER 11 YEARS, you can safely relax your rules quite a bit (there are worse problems out there). Education might make a difference, however.

Finally, the Commission should NOT take ANY step if there is EVEN A SHRED OF DOUBT about the impact on small business. Small business is the major jobs creator in America. When you promulgate rules that choke the life out of small business or sharply reduce their incentive to invest, you are killing our economy. You have a heavy responsibility to keep this place running, even if it’s an imperfect world. While it’s sad that a child ever dies, the pain and suffering imposed on countless families from lost jobs, lost capital, lost access to needed products, and so on likely far exceeds it.

Reasonable Testing Program – Busy Work to Keep Us From Running Our Businesses.

The “Reasonable Testing Program” (“RTP”) represents a choice presented to manufacturers of children’s products under this rule. If we endure the expense and disruption of a RTP, we can cut our testing frequency (read, testing costs) in half. A very tempting prospect but the cost of a RTP seems too high, leaving us with a Hobson’s Choice. We can’t afford annual testing and we cannot afford a RTP. What should we do? What will anyone do?

Owing to the burden and complexity of RTPs, I predict EVERY REGULATED COMPANY will violate these rules. Since Ms. Tenenbaum has promised to turn to enforcement in 2011, the CPSC regulators should have a pretty easy time finding juicy targets. Every company will provide wonderful enforcement opportunities.

Although our testing program has been highly-effective over the last 26 years, our program would never meet these standards. We do not maintain the volume of paperwork that the new CPSC rule now requires. We know what we’re doing, but we have not organized our files into a how-to manual. Perhaps the agency thinks every company in the country is an ISO 9001 company. They’re not, and this kind of documentation is rare and breathtakingly expensive to prepare.

Having endured the CPSIA spectacle for two years now, I do not trust the seemingly flexible definition of necessary documentation. The pattern is that these seemingly open-ended terms (which may or may not describe our current recordkeeping) will mature into something rigid down the line. Even if they don’t, we still face the risk that we will not measure up to the expectations of the CPSC enforcement officer at the time of reckoning. The feeling that we are being set up is inescapable. As noted above, given our record of performance, the agency should have NO concerns about how we go about our business. Nonetheless, I feel certain that these rules will bite me in the future.

Sample selection under the rule should not be based on any statistical formula (per the baffling presentation of Dr. Michael Greene at the December 2009 workshop). If the overall safety results of the company are strong, the choice of samples by the company or factories should be presumed compliant without further inquiry. Random selection (taking one off the shelf . . . without the assistance of a statistician) works just fine in our experience, and there is no evidence that testing multiple samples will accomplish anything but will certainly raise costs. Better sampling won’t lower injury rates that already approach zero.

We currently do not use production testing and have zero production testing plans in place. With one recall in 26 years, I would assert this kind of testing is superfluous in our business and basically useless from a safety standpoint. It will significantly raise costs, however. The tedious exercise of preparing a pallet load of production testing plans to meet the new requirements is just plain busy work. One must ask what the CPSC was thinking when it penned this description of a production testing plan: “A production testing plan may include recurring testing or the use of process management techniques such as control charts, statistical process control programs, or failure modes and effects analysis (FMEAs) designed to control potential variations in product manufacturing that could affect the product’s ability to comply with the applicable rules, bans, standards or regulations.” Fancy words but . . . what planet are they from?

The requirement to list all the tests applicable to our items, again and again, to satisfy the RTP requirements is typical of mindless busy work asked of us. Does the CPSC think this will make ANY difference? Most businesses confirm safety tests with their testing lab partners anyhow. More bureaucracy, taken to new heights.

We don’t have any remedial plans in place either. We are quite familiar with how to appropriately resolve compliance and quality issues, and have never had a problem with regulators in the exercise of our business judgment. The requirement to prepare a detailed written plan, just in case we have another recall in the next 26 years, is pure officiousness. This is yet another waste of our time, our money, our resources and our intellect.

The recordkeeping requirements of a RTP is well beyond our ability or interest to preserve for 1500 products produced in thousands of lots over the course of a year. Taking a “Dear Diary” approach to how we source, test, move, remediate, repair, investigate and otherwise manage children’s products is completely unreasonable. This is especially ridiculous given our track record.

The Commission has asked what a RTP might cost us. I have a hard time estimating it because all the fun in our business would be gone. If we had to endure the bureaucratic nightmare this rule envisions, if anyone actually expects us to do all this to make simple plastic toys for schools, I would have to seriously consider our alternatives. So it might cost us our entire company. That’s the whole enchilada, guys.

Remember, we don’t have to make children’s products, nor do we have to stick around for the next act of this tragedy. If the CPSC persists in ruining what was once a rather safe industry with a strong track record, the cost will be the entire market for children’s products.

Is that a high enough price to give you pause? I know, I know, more anecdotes . . . .

The Requirement to Document Procedures against Undue Influence is Unreasonable.

The “Undue Influence Procedures” requirement (“UIP”) is essentially a requirement to document efforts to avoid fraud. If you’re not inclined to commit fraud, there’s little reason to set out your plan to not commit fraud. Here’s our current policy – “Don’t break the law or commit fraud”. This has worked well for us, as we have never exerted undue influence in the last 26 years and have no plans to start now.

I am really sorry that there are bad people in the world, some small number of which may have at one time attempted to exert undue influence over one or more test labs. Perhaps the CPSC should concern themselves with the bad guys and leave the rest of us alone.

Material Change Rules Place Too Much Risk on Manufacturers.

The CPSC’s rule on when to test after a “material change” is sufficiently open-ended to render the judgment on when to test fairly obvious – ALWAYS TEST. Deep within the Proposed Rule, Section 1107.10(b)(2)(ii) instructs “A material change is any change in the product’s design, manufacturing process, or sourcing of component parts that a manufacturer exercising due care knows, or should know, could affect the product’s ability to comply with the rules . . . .” “Due care” is defined as “the degree of care that a prudent and competent person engaged in the same line of business or endeavor would exercise under similar circumstances.”

In other words, the agency’s 20-20 hindsight can construct a case for testing for a material change for just about anything that “might” or “could” affect results or that a hypothetical “prudent person” might think of investigating. Of course, this issue only comes up in the context of an injury or a recall, so what are the odds that any judgment to NOT test would withstand inquiry by an angry CPSC? Zilch. So either you always test or you take a big risk. This is completely unfair and unreasonable.

Testing Frequency Must Be Left to the Manufacturer and to the Market.

A rule requiring manufacturers to test according to these standards every year is going to kill us and many other businesses. No one can afford the testing scheme outlined above, we least of all. If we must test according to these standards, we will be out of business quickly. It is equally unrealistic to imagine that testing cost savings from maintaining a RTP will hold much appeal since that project is so wasteful and gargantuan. Of course, a firewalled in-house lab would be nice for all of us small businesses, but that’s unrealistic, too (not to mention undesirable). We have no realistic way to moderate these costs. Please see my other August 3 comment letter for an explanation of why I believe component and composite testing will likewise provide no relief.

Testing is supposed to assure product quality and compliance. If we have a good, long term record of safety, why can’t we just carry on as we have, and deal with issues as they arise? That worked for 26 years. The new way is just unaffordable.

The “High Degree of Assurance” Standard is Unreasonable and Not Derived from the CPSIA.

The rule seems to conclude that a “high degree of assurance” is a necessary element of any “reasonable testing program”. The importance of the “reasonable testing program” which was incorporated into the CPSIA as an alternative to third party testing for non-children’s products, has been imputed to the children’s product area as a way to reduce testing frequency, and with it, the “high degree of assurance” standard (“HDA”) was likewise imputed. Thus, sliding down this slippery slope, the HDA standard has become part and parcel of the “15 Month Rule”. Abracadabra.

The Commission has requested feedback on the meaning of the definition of HDA in Section 1107.2. Happily, the agency has rejected a strict statistical interpretation requiring “95% probability” of compliance. What should the definition be interpreted to mean? The “high degree of assurance” should be based on an overall assessment of the safety record of the company. It should NOT be based on the results of an individual product, even if recalled or deemed dangerous. In our case, we have done business for 26 years, had one recall of 130 pieces of out of about 1,000,000,000 pieces sold. All of these units were recovered. Thus, we believe there is zero probability that a recalled product is in the market. Our historical recall rate is approximately 130/1,000,000,000 or 0.00001% over a 26-year period.

With this record over so many years, our company should be deemed to have satisfied this HDA requirement and be endorsed as having a reasonable testing program without further inquiry. And if we DON’T deserve the HDA designation, then the CPSC should articulate what level of safety achievement would earn the designation.

Notably, the entire children’s product industry also meets this requirement. Of the 899 recalls of children’s products from 1999-2010, only one death and three asserted injuries from lead were recorded by the CPSC. Thus, the probability of being injured from lead by a children’s product is nearly zero, given that literally billions of children’s products are sold every year. [The apparel and footwear industry claims annual sales of about 4 billion units ALONE.] Industry recall rates are likewise well under 1% per annum. With injury statistics and recall rates in hand, the CPSC should GREATLY loosen the strictures of the “high degree of assurance” standard to focus its resources on activities that might actually injure someone.

One-to-One Product Testing Will Punish the Smallest Companies.

The prophylactic approach to testing adopted by the CPSC will inevitably put many small or micro businesses into bankruptcy, or drive them into unregulated markets to avoid the CPSIA’s wasteful bureaucratic costs. If the law does not permit the agency to adopt sensible rules that allow businesses to manage their compliance risk as best they can (where the standards remain in place, but the government stops trying to tell businesses HOW to comply), then the Commission must finally tell Mr. Waxman what he doesn’t want to hear – that his law is broken and can’t be fixed. [Notably, these mini businesses most at risk have an exemplary record of safety and very low recall rates. NOTHING is gained by rules that crush the little guy.]

We in the small business community have suffered for two solid years while regulators have sought any possible way to avoid delivering this “unpleasant” message. I get the impression that the demise of our businesses would not be too great a cost for the agency to incur to avoid telling Congress what it doesn’t want to hear. If the Commission is genuinely interested in a fix, it must take action with Congress. I do not believe the agency can devise sensible regulations to fix this problem short of a legislative change.

Ban on Retesting Will Unnecessarily Create Crises at Small Businesses.

In our experience, test labs are neither infallible nor definitive in their understanding of U.S. safety laws and regulations. It is not unusual to experience failed test reports for reasons besides safety problems. In addition, children’s products are not so pure and perfect in their composition that every test produces the same result. The CPSC itself instructed manufacturers to audit their test labs in the ironically-dated April 1, 2010 version of the Proposed Rule in response to industry complaints that test results varied from test lab to test lab. By forbidding retesting, the Proposed Rule removes discretion and appropriate problem resolution techniques from a commonplace quality event. You don’t need to manage a very large portfolio of products before the probability of an ordinary course testing problem rises exponentially. This is a matter of mathematics. If retesting is banned, the CPSC is legislating a crisis of the week.

Again, CPSC injury data informs us that the nature of the problem is extremely modest. Historical injury rates are VERY low. This retesting rule is completely unnecessary and penal to all companies except perhaps mass market companies with greater resources. Small businesses won’t have teams of engineers or statisticians around to save the day. Many small businesses will naively call the CPSC for “help”, only to find out that they have created a worse crisis. Some small businesses may miss this point in the Proposed Rule and continue to retest, only to be punished later when the CPSC finds evidence of retesting at the time of a recall. Is this really how you want to regulate?

I would note that the justification for all this is bad acts: “[Retesting] may tempt unscrupulous parties to attempt to ‘test the product into compliance’. . . .” To my knowledge, this behavior has little precedence and even so, it is an abuse that can be dealt with other ways. If honorable and law-abiding companies use retesting to resolve honest problems, no harm is being done. Punishing good guys because you are afraid that otherwise bad guys might benefit is excessive and inappropriately harsh.

The 10,000 Piece Limit for One-Time Testing is Arbitrary and Unfair.

The CPSC has failed to persuade that the 10,000 limit is an appropriate break point for testing. First of all, the limit is cumulative, not related to sales in a period or per annum. Second, the threshold bears no relationship to risk of injury. In other words, it’s completely arbitrary. Why 10,000? Why not? In my view, that’s not enough to justify this rule. Many of the micro businesses that might benefit from this rule have NEVER had a recall. These are the people this rule will restrict. And the logic of this is . . . what, exactly?

Even more remarkable is the rule’s insistence that these low volume items be tested annually after passing the 10,000 piece threshold. Small companies will never have a RTP so annual testing (or more frequently, if for instance the item is hand-assembled) will be mandated. Consider a product selling 2,000 piece per year. Under these rules, the incentive to drop it once it crosses the 10,000 threshold will be powerful. This reminds me of the incentive on small businesses to not hire a 26th employee to avoid an onslaught of Obamacare obligations. A tacit cap on sales will be imposed by this rule. Nice!

The solution to this problem is to require one-time testing before sale, and thereafter according to the business judgment of the manufacturer. Remember, the retailers that buy from the manufacturer will also have something to say about testing frequency, too. Not all solutions are better if imposed by the government.

Alternative Testing Technologies.

The ability to test at low cost with XRF is attractive. For our business, it is tempting to use an XRF gun but for two reasons: (a) cost, and (b) health risk. XRF guns cost $30,000 each and have high annual maintenance costs (several thousand dollars a year). We might need several guns to manage our inventory volumes, a very costly prospect. XRF guns are portable x-ray machines. Notwithstanding the assurance of XRF gun manufacturers, I am quite reluctant to place an x-ray machine in the hands of a warehouse worker in our facility. This is an invitation to disaster. We likewise have no interest in hiring a highly-paid technician to wield the gun, or technicians to wield the guns. In any event, we cannot expose our employees to a possible risk of x-ray genetic damage. I am surprised that the CPSC doesn’t take this risk more seriously. Is lead a worse problem than x-rays?

In any event, I fail to understand what would be accomplished by a XRF solution for small businesses. The process of XRF testing may be inexpensive, but would be disruptive. In any event, I don’t see a connection to safety so I prefer a solution that restores sanity to our safety practices. Burning in a wasteful and disruptive process will only bog down our economy and our competitiveness. Until the CPSC can point to a risk factor relating to the little guys, one cannot rationally conclude that XRF makes this regulation better, just somewhat less worse.

In sum, the Proposed Rule is a dangerous rule with the acknowledged prospect of doing severe market damage. The CPSC knows this, having admitted it in writing in the text of the rule. There is no excuse to push forward with a defective rule on this scale. The Commission must talk honestly with Congress . . . before it’s too late.

Thank you for considering my views on this important subject.

Sincerely,

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

Read more here:
CPSIA – Comment Letter on the "15 Month Rule"

Lenore Skenazy has a Few Things to Say about All Those CPSC Recalls

Lenore Skenazy who writes the Free Range Kids Blog, has an op-ed on Forbes.com about all those CPSC recalls (previously covered on this blog here and here).

She doesn’t mince words.

Money quotes:

“And so it goes in the unbrave new world, where nothing is safe enough. It’s a world brought to us by the once sane, now danger-hallucinating Consumer Product Safety Commission.”

and

“[CPSC] actively engages in fear mongering, perhaps to give it something to do. After it rid the world of leaping lawnmowers and exploding frying pans, it turned its sights on the also-rans of corporate reprehensibility. The tricycle with a protruding screw. The stuffed animal whose button eyeball contains lead paint. And to remain relevant, it acts as if there is really no distinction between a bucking chain saw and a Little Tykes “choking hazard” the size of a salt shaker. And it just keeps getting more irrational.”

Read the entire op-ed: “Students Aren’t Allowed to Touch Real Rocks.”

Posted by the Staff of the Alliance for Children’s Product Safety

Read more here:
Lenore Skenazy has a Few Things to Say about All Those CPSC Recalls

GUEST BLOG – BOSTON GLOBE WRITER TAKES NOTICE OF ALL THOSE CPSC RECALLS

Rick has blogged in this space about how the onslaught of recalls by the CPSC is numbing to consumers. Boston Globe writer Sylvia Pagán Westphal has taken notice in a column over the weekend:

Boston Globe

The safety scare
Separate dangerous products from those that pose little risk
By Sylvia Pagán Westphal | July 7, 2010

IF YOU’RE the parent of a young child and want to be very scared, don’t waste time looking for horror movies on TV. Just go to the US Consumer Product Safety Commission’s website for child product recalls. You won’t be able to sleep for days.

The site features an interminable selection of common children’s products that have been recalled. Some of the depictions are downright gruesome: in cases of defective cribs, for example, there are pictures of baby dolls with necks pinned down between rails, or of their little faces pressed against a mattress, as if suffocating. The intent is, to be sure — for I see no other reason to scare the wits out of an unsuspecting, Internet-roaming mother — to jolt parents into action if they own one of the products.

One recent afternoon, I was clicking through the recalls page when I realized, to my dismay, that during my 9-year stint as a parent I have owned several of the featured items. My colorful rainforest-themed baby swing was there, and so was one of my cribs. The baby sling I used with my son was recalled after three babies suffocated in 2009. The kinds of bath seats I used (and loved) with my daughter aren’t sold anymore, following various recalls.

I never found out about these announcements. Had I taken the time to register each product I might have heard from the manufacturers, but I didn’t do it, and neither do most of the parents I know. Some pediatricians’ offices and stores post selected recall sheets, and there is an e-mail list from Consumer Product Safety Commission one can opt into, but with over 100 of these announcements per year it’s hard to keep track of the information.

Part of the problem is that recall announcements don’t explicitly distinguish between problems with products that are truly dangerous and defective versus products with sub-optimal design that, when used properly, pose little risk. For example, the commission recently recalled a bed because one child got his head stuck in its storage compartment. Not to take away from that kid’s pain, but I have numerous compartments in my home where my children’s heads would fit if they tried hard enough.

In a way, some of the announcements appear to be directed at shielding us from our own parental incompetence. Millions of baby bath seats and walkers are no longer sold due to drownings and falls suffered by babies who were basically left unsupervised. The recent high-profile recalls of drop-side cribs were prompted by deaths that, in some cases, were caused by cribs that were incorrectly put together or were subjected to shoddy home repairs.

Don’t get me wrong: to the extent that these recalls remove poorly designed products from the market the efforts should be praised. If motels and hotels are forced to carry safer cribs, that’s a good thing. But the Consumer Product Safety Commission and other safety advocacy groups should be mindful of putting each recall into perspective, so as not to unnecessarily scare the public. For example, the multiple recalls (and likely national ban) on drop-side cribs comes after 32 documented deaths over the last 10 years and millions of cribs sold. That’s surely 32 deaths too many, but more children die each year choking on food.

There is a real downside to a system that feeds into our nation’s growing safety paranoia, which isn’t healthy either. Many of my overseas friends have a hard time understanding our obsession with safety — we put locks on our toilet seats, cover the corners of tables with rubber guards, and use hand sanitizer with ever-intensifying zeal. Taking that baby walker away, just like covering the table corners, is a bit like avoiding air travel for fear of crashing, while still driving a car every day. The world is a very dangerous place to raise a child. Leave the house and there are hard edges, pointy rocks, and steep inclines everywhere. As much as we’d like to, we just can’t childproof those too.

Sylvia Pagán Westphal is a regular contributor to the Globe opinion pages.

Posted to Rick’s Blog by Alliance for Children’s Product Safety Staff

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GUEST BLOG – BOSTON GLOBE WRITER TAKES NOTICE OF ALL THOSE CPSC RECALLS

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

I apologize, the letter’s long. . . .

June 20, 2010

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

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

Dear Mr. Stevenson:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Let me explain:

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

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

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

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

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

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

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

It seems so obvious . . . .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you for considering my views on this important topic.

Sincerely,

Richard Woldenberg

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

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

CPSIA – Recall of Safe Products Continues to Reverberate

The national convulsions (call it “brain softening”) induced by the CPSC’s action in forcing McDonald’s to recall admittedly SAFE Shrek drinking glasses continued to spin out of control today. Following their usual election year script of harshly dealing with invented crises to impress the easily-duped public, Henry Waxman and Bart Stupak, two Democratic leaders on the House Energy and Commerce Committee, sent letters today to McDonald’s and the manufacturer of the glasses, ARC International, demanding information to blow this non-issue up into a mega-crisis.

Before I summarize how Waxman and Stupak worked to spread regulatory disease far and wide, I think we all owe a big THANK YOU to the CPSC for so vigilantly protecting us from these safe products. There is no doubt that we were all victims of a false sense of security, not knowing that atoms of cadmium might be lurking on the outside of drinking glasses. Of course, cadmium atoms also lurk in our food, in our water, in our air, in our dirt AND on countless glasses in our homes sold over preceding decades without incident – but, heck, that’s a little too science-y, don’t you think? Only by exposing that these glasses are SAFE while at the VERY SAME TIME pushing for a highly-publicized recall and resulting media panic, did the CPSC reveal that we were actually safe without even knowing it – and yet they STILL acted to protect us! What a great bunch of guys and gals we have at the CPSC, we are so lucky. No really, thank YOU Consumer Product Safety Commission!

Mssrs. Waxman and Stupak sent off two letters demanding lots of “incriminating” information, such as:

• A list of all manufacturers and distributors that supply McDonald’s with children’s products. McDonald’s interest in keeping its suppliers’ identities confidential as a trade secret is no never mind. After all, the glasses they recalled are SAFE, so you can’t take ANY chances. And let’s not forget the FACT that the other McDonald’s items are NOT suspected of ANY violation of ANY law. This is Mr. Waxman’s wizardry to keep us all so safe. . . .
• A list of all the “steps” McDonald’s takes to ensure that children’s products do not contain hazardous materials. The FACT that the CPSC has declared these glasses SAFE does not apparently matter in this inquiry, raising the question of what Waxman and Stupak mean by “hazardous materials”. Presumably then, the presence of an atom of cadmium might meet their “standard” for hazardous materials. In utopia, there is no cadmium. Waxman and Stupak represent the 1st and 8th Congressional Districts of Utopia, respectively.
• The identity of the supplier of the enamel on the SAFE glasses. This identity had previously been withheld by ARC, showing character by attempting to keep the crisis away from an innocent supplier. As ARC said in a recent newspaper report, “[it] could have been any glass company. . . . We all do the same thing using materials from the same suppliers.”

I find it ironic that the Ranking Member of the Subcommittee on Oversight and Investigations is none other than Michael Burgess. Burgess is a doctor (M.D.). Maybe he has a sense of what constitutes an actual hazard to human health. If he does, I hope he shares it with his colleagues on the other side of the aisle. . . .

Hey, let’s not get too paranoid here. No one is going to pay attention to this mass hysteria or change how they regard the federal safety laws. This mega-screwing of two reputable companies over admittedly SAFE products is not relevant to the rest of us. Why? They’ll never be interested in us because we all make . . . SAFE PRODUCTS.

Oh, crap.

Read more here:
CPSIA – Recall of Safe Products Continues to Reverberate

CPSIA – McDonald’s Fallout Continues

The spectacle of the McDonald’s cadmium “scare” continued to unfold today.

Let’s not forget that this recall was “urged” by the CPSC although the CPSC admits in writing that the glasses are “non-toxic”. In other words, the glasses are safe. As the manufacturer notes: “‘It could have been any glass company,’ said Ron Biagi, an executive with Arc International, which made the glasses. ‘We all do the same thing using materials from the same suppliers.’” McDonald’s clearly had no choice in the matter, suffering a terrible loss of prestige no matter what the outcome. So the CPSC, Rep. Jackie Speier, one anonymous tipster and a hyperbolic press forced a highly wasteful and destructive recall.

The tumult, chaos and confusion thoughtlessly spawned by the CPSC continues to unfurl in almost predictable fashion: “But the returns [to McDonald's] are just the beginning of the next chapter in the cadmium debate, with the CPSC poised to set new limits on the metal even as it downplays the McDonald’s recall and environmental advocates aim to use the episode to build momentum for reform of federal toxics law.”

A terrible move deserves an even worse follow-up.

What’s the cause for alarm here? The glasses are safe, so says the CPSC . . . as it dramatically lowers the standard for cadmium. Yeah, nobody’s worried.

The consumer group talking heads can’t resist chiming in: “Don Mays, senior director of product safety for Consumer Reports, said cadmium was being used in some manufactured goods to replace lead, which has been eliminated from many products in response to heavy regulation and widespread health concerns. Many of those goods were once commonly associated with lead, like paint and inexpensive jewelry. ‘We’re just starting to see this,’ Mr. Mays said. ‘It’s starting to creep into a lot of consumer products that never had it before.’”

Does anyone care that the CPSC SAYS THIS ISN’T TRUE? “After an Associated Press investigation first uncovered the high cadmium levels in some children’s jewelry, CPSC Chairwoman Inez Tenenbaum publicly warned manufacturers in Hong Kong not to replace lead with cadmium or other toxic metals. Tenenbaum told senators in April that ‘we really don’t think’ companies are deliberately swapping out lead for other hazardous chemicals, ‘but we think they’re being careless and not realizing that you cannot use these metals in children’s products.’” [Emphasis added]

Some in the press aren’t persuaded. After all, urban myths are true . . . aren’t they? “[David Lazarus of the LA Times] notes that Cadmium has probably stayed off the radar for so long because people weren’t widely aware of its use. The focus has primarily been on the danger of lead products, and lead product replacements weren’t a primary concern. Chinese manufacturers began using Cadmium insted [sic] of lead to get the same vivid pigments in product colors.” Right. David Lazarus knows all about this.

And then there are our Democratic leaders in Congress. It’s election season so there’s little incentive to be a calming influence. “Congresswoman Jackie Spear [sic], who first received the anonymous tip about the Shrek cups, doubts Europe is the Cadmium culprit due to its strict manufacturing rules. Spear [sic] suspects either a subcontractor or ingredient provider in China; China is one of the leading Cadmium producers in the world. . . . Spear [sic] says she has legislation in the works that would expand the Cadmium ban in U.S., specifying removing its use in any product for children.”

And the basis for Rep. Speier’s hunch is . . . what, exactly? The glasses were made in a U.S. factory: “In contrast to the Chinese-made children’s jewelry recalled earlier in the year, the drinking glasses were manufactured in the United States, by the Millville, N.J.-based company ARC International. Ron Biagi, vice president for North American sales at ARC, said he was surprised by the recall and vouched for the safety of the glasses. While environmental and consumer groups pointed to the importance of identifying the producer of the cadmium-tainted enamel used on the McDonald’s glasses, Biagi declined to name ARC’s supplier. ‘It’s not fair for me to pull them in,’ he said.” OMG, somebody decent is left in the world! I had about given up hope.

Having set off the blaze, CPSC Director of Public Affairs Scott Wolfson again spewed more of his patented mixed signals sure to sow seeds of doubt: “‘What’s so important is for parents to understand the difference. … Children are not at an acute risk; the glasses are not toxic,’ Wolfson said, adding that ‘there are no signs we’re looking at a wave here of cadmium becoming the next lead.’” Which is why, Scott, you and your agency acted so promptly to push for a recall of this non-toxic product made of common materials in wide distribution in this country for years without any detectable adverse health effect? Which is why you told America to stop using the oh-so-safe glasses “immediately” in your OnSafety blog? Do I have this wrong? Clear as mud. Very believable, too.

There are terms for this that are too crass for a family publication like my blog. Let your imagination run. How will all this resolve itself? Of course, not very well. Justified by fear of “bone softening” (that sounds HORRIBLE, doesn’t it?) and other bizarre maladies that supposedly COULD befall us from unspecified exposure to cadmium, we will get many new and ineffective regulations imposing yet more devastating costs and devastating risk on the children’s product industry.

While hatred of government is a necessary by-product of the massive self-inflicted injury of the CPSIA, we will more pertinently be faced with the difficult challenge of protecting our life’s work – our businesses. The livelihoods of our friends and associates at our company, the economic well-being of our customers and suppliers (often our close friends, too) and in our case, the economic future prospects of the kids who are being educated with our products, all hang in the balance. I don’t know what stops this freight train before it tragically collides with reality. Certainly not leadership or a show of character from our government.

I hate to close these essays sounding like a Tea Bagger (not that I resent the label). I don’t wish to be marginalized for having strong views about an abdication of leadership and judgment by our government leaders. Say what you will, the McDonald’s fiasco was fomented by politicians with agendas. Many companies and people – and our economy – will be severely damaged as a result.

There’s nothing to be proud of here.

Read more here:
CPSIA – McDonald’s Fallout Continues

CPSIA – Freedom of Information Act Request – Follow-up

As sent today:

Dear Sir,

It has now been almost two months since I submitted the below request for information under the Freedom of Information Act. Your office acknowledged receipt of this request on April 1 and stated the following:

“Due to certain procedural steps we are required to take under our statute, there may be delays in providing the records. Please be assured that every effort is being made to process each request as equitably as possible, and that the records or information that you have requested will be made available to you at the earliest possible date.”

My request relates to pending legislation currently under consideration in the U.S. House of Representatives. As such, the request is both relevant to the development of this legislation and rather time-sensitive. The public has a right to know about these documents. Disclosure of these documents is in the public’s interest – transparency in how we are governed is a paramount interest of U.S. citizens. The disclosure of these documents are very relevant to the development of the Consumer Product Safety Enhancement Act, the subject of a recent hearing by a subcommittee of the House Committee on Energy and Commerce. I testified at that hearing.

Notwithstanding the assertion in the April 1 letter above, the requested documents have not been disclosed yet. This is especially disappointing as the documents involved in this request are few, easily-located and in the possession of very few, easily-identified people at the CPSC. The effort to gather, review, redact (if necessary, which seems unlikely), duplicate and transmit these documents is almost certainly inconsequential. I find the delay inexplicable and inexcusable under your statute.

I urge you to rapidly comply with this request for disclosure. As I noted in my original request, your agency’s rules demand it – “disclosure is the rule and withholding is the exception.”

Thank you for your prompt consideration of this matter.

Richard Woldenberg
Chairman
Learning Resources, Inc.

——————————————————————————–
From: Rick Woldenberg
Sent: Tue 3/23/2010 3:44 PM
To: ‘cpsc-foia@cpsc.gov’
Subject: Fast Track FOIA Request Relating to Draft House Legislation Know as “Consumer Product Safety Enhancement Act of 2010”

I am making this document request pursuant to the Freedom of Information Act and 16 CFR §1015. I would like to receive copies of all documents (written or electronic, including notes and staff briefing packages) relating to (a) interactions between Chairman Inez Tenenbaum and/or Commissioner Robert Adler and/or their staff and the House Committee on Energy and Commerce (and/or staff associated with that committee or its members) relating to the Consumer Product Safety Enhancement Act (CPSEA), and (b) any CPSC legal analyses or legal opinions relating to the CPSEA. Since the CPSEA is presently being circulated in draft form on Capitol Hill and since the committee’s staff is seeking feedback from various stakeholders at this time, time is of the essence for this information request. Please accord this request “fast track” status.

In making this request, I note the following statement in 16 CFR §1015(b): “The Commission’s policy with respect to requests for records is that disclosure is the rule and withholding is the exception. All records not exempt from disclosure will be made available. Moreover, records which may be exempted from disclosure will be made available as a matter of discretion when disclosure is not prohibited by law or is not against the public interest.”

My contact information is found below. Thank you for your cooperation.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.

Read more here:
CPSIA – Freedom of Information Act Request – Follow-up

CPSIA – New York Times Highlights Big Government at CPSC

The New York Times today highlighted the explosion in regulations under President Obama, particularly noting the CPSC and the controversy over the CPSIA. Here’s what Inez Tenenbaum had to say about our problems:

“‘I don’t want to put anyone out of business,’ said Inez Tenenbaum, chairwoman of the Consumer Product Safety Commission, who was appointed by Mr. Obama. ‘But if anything will help the marketplace, it is to make sure that people have confidence in the products that they buy.’” [Emphasis added]

Let’s be clear about something – this is pure opinion. It may sound like fact, but there’s nothing factual about that self-justifying remark. I am not aware of ANY data to support this point of view. I believe the tenor of Ms. Tenenbaum’s remark is that she knows what’s best for our markets, namely a lot more regulation. I thought her job was to make people safe . . . . She apparently contends that the market for children’s products was sinking under the weight of declining consumer confidence and the CPSIA was some sort of stimulus bill intended to save our market with lots of confidence-restoring regulations.

That is a pretty rosy reconstruction of the CPSIA, don’t you think? I love a good work of fiction!

I have a message for our overlords in Washington – thanks for all your help but frankly, I would prefer to run my business without your assistance. We know our customers, our suppliers, our products and most definitely, our markets – and you do NOT. You say our market needs a boost of consumer confidence. I say that if it does, we’ll take care of it ourselves. You have no right to enter our market and tell us how to run our businesses more successfully. That’s the ultimate in regulatory arrogance and is completely contrary to the capitalist system prevailing in this country. We are the efficient capital allocators, not YOU.

This is all Washington “spin”. The noxious regulations choking our businesses are indefensible for their safety impact so now our regulators are telling us the new rules have been designed to be GOOD for our markets. Pass me a barf bag.

I would like to close by quoting the May 12 HTA letter on the Waxman Amendment:

“Finally, we hope to settle any confusion regarding our intent in endorsing the CPSEA. We endorsed it as our only available alternative. We truly believe that many of our members will be forced out of business after February 10, 2011 without meaningful, clear reform provided by your committee.“

Thanks, Congress and CPSC, for boosting our markets so well with all your new regulations. It’s a brave new world for all of us. Yippee.

Read more here:
CPSIA – New York Times Highlights Big Government at CPSC

CPSIA – HTA Letter Blasts Imperfect Waxman Amendment (CPSEA)

[Emphasis added. Actual Letter can be viewed here.]

May 12, 2010

To:

The Honorable Bobby Rush
Chairman, Subcommittee on Commerce, Trade and Consumer Protection

The Honorable Ed Whitfield
Ranking Member, Subcommittee on Commerce, Trade and Consumer Protection

The Honorable Henry Waxman
Chairman, Committee on Energy & Commerce

The Honorable Joe Barton
Ranking Member, Committee on Energy & Commerce

Re: The Consumer Product Safety Enhancement Act (CPSEA)

To the Leadership of the House Commerce Committee:

Thank you again for the opportunity to testify before your committee and for your continued attention to the needs of our small businesses. We would like to reiterate our position on the CPSEA and the relief we are seeking for our members.

We have previously endorsed the CPSEA because it is the only opportunity currently available to save small batch manufacturers from extinction after February 10, 2011, when the CPSC’s stay of enforcement of third party testing requirements expires. Under the CPSIA as it currently stands, many of our members are substantially limiting the products that they offer–some foregoing children’s products altogether–while others are laying off employees or limiting their business growth.

We have stated clearly that the CPSEA can and should be improved to reduce unnecessary regulatory burdens on small businesses without compromising safety. The CPSEA as currently written will likely save some of our member businesses. With improvements, however, you can save almost all of them. For the record, we would like to review the improvements we would like you to consider.

First and foremost, we would like the CPSEA to clearly state that small batch manufacturers are exempt from third party testing requirements. While report language to that affect would be helpful, a more explicit exemption within the language of the bill itself would provide more immediate and substantial relief. You can accomplish this by allowing:

* the use of XRF testing as an alternative testing method for lead in paint and lead in substrate

* alternative testing methods for products intended for use in classrooms or for children ages 7-12

* EN-71 testing as an alternative testing method

* CPSC rulemaking to allow for alternative testing methods based on risk analysis

* exemptions for small batch toymakers from ASTM F-963 testing

This language should be in the bill itself, not just in the report language. In the intervening days since our initial endorsement of the CPSEA, we have heard conflicting answers from several different CPSC commissioners as to the commission’s willingness or ability to provide affordable alternative testing methods for small batch manufacturers. If this bill is truly meant to benefit small batch manufacturers, it must be more clear and explicit in the exemptions it provides.

Second, we wish to reiterate our belief that alternative testing methods should be available to all companies. The Small Business Administration defines toy and clothing manufacturers with less than 500 employees as small businesses, which is far in excess of the CPSEA’s $1 million limit. If a revenue limit is used, it should be based only on income generated by the manufacture or importation of children’s products without including other unrelated business income. A manufacturer’s ability to pay for testing any given product is a function of the revenue it generates from that particular product, not the overall size of the company.

Third, we stated publicly during the April 29 hearing that the functional purpose exemption for products exceeding 300ppm/100ppm lead will not benefit our members because of the narrow scope of the exemption and the cost required to obtain it. The CPSC should instead be given authority to make exemptions to specific materials or product categories based on risk analysis. For example, the commission should have the power to exempt brass as a material and children’s saddles or microscopes as a product category. This is the only way in which small businesses would be able to take advantage of the functional purpose exemption.

Fourth, we believe that small batch manufacturers should be entirely exempted from mandatory labeling requirements.

Finally, we hope to settle any confusion regarding our intent in endorsing the CPSEA. We endorsed it as our only available alternative. We truly believe that many of our members will be forced out of business after February 10, 2011 without meaningful, clear reform provided by your committee. We believe that the CPSEA can and should be improved to better target risk and provide more comprehensive relief for our members, who were never the source of unsafe products in the first place.

We remain hopeful that the democratic process can prevail and that a meaningful and bipartisan reform of the CPSIA can be enacted. We urge members of the committee to mark up the CPSEA and allow open discussion within the product safety subcommittee. The CPSIA was a bipartisan bill—its reform should be, too.

You hold the livelihoods of hundreds of small businesses in your hands. Please, make this work.

On behalf of the 435 small business members of the Handmade Toy Alliance, we thank you again for your attention to this important issue.

Respectfully,

The Handmade Toy Alliance

savehandmadetoys@gmail.com
http://www.handmadetoyalliance.org/

Board members:

Cecilia Leibovitz, Craftsbury Kids, VT
Dan Marshall, Peapods Natural Toys, MN
Jill Chuckas, Crafty Baby, CT
Mary Newell, Terrapin Toys, OR
Jolie Fay, Skipping Hippos, OR
Marianne Mullen, Polkadotpatch, VT
Rob Wilson, Challenge & Fun, MA
Randy Hertzler, euroSource, PA
Kate Glynn, A Child’s Garden, MA

Read more here:
CPSIA – HTA Letter Blasts Imperfect Waxman Amendment (CPSEA)

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