CPSIA – Phthalates and Lead Limits in Waxman Amendment

Two minor but important points in the new Waxman Amendment relate to the ban on phthalates and the 100 ppm lead standard looming in August 2011.

Phthalates: The phthalates ban has been clarified to exclude “inaccessible” components, thus reducing the cost of testing for victims of this poorly-conceived law. The definition of “inaccessible” is based on foreseeable use and abuse by children. The term “reasonably foreseeable use and abuse” is defined, lest anyone misconstrue what the Waxmanis want it to mean, and hence new concepts have been incorporated: “breaking” as well as “the aging of the product”. In the past, “reasonably foreseeable use and abuse” has been interpreted to exclude intentional misuse. The term did not typically include aging since most worn-out products are either handled differently or discarded. The changes wrought by this amendment fundamentally alter the common meaning of “reasonably foreseeable” in quirky ways, making a confusing law all the more difficult to understand or apply.

If “reasonably foreseeable use and abuse” includes breaking the toy, it’s hard to know which parts will ever be considered “inaccessible”. Reading this language by its plain English meaning, I cannot imagine what might survive this legislative test. Worthless. I sense another rulemaking process for the long-suffering CPSC.

The amendment also clarifies that the CPSC can revoke this exception to protect the public health and safety. Remember, we are talking about a rule affecting mandatory testing of internal components that may or may not contain phthalates. Can anyone tell me what threats to the public health and safety could POSSIBLY result from an internal component made with phthalates? Phthalates have been in use in this country for more than 50 years – wouldn’t we know about “leaping phthalates” by now? Oh yeah, I’m sorry, i forgot that reasoning and science don’t matter anymore. . . .

Perhaps concerned that the CPSC was running out of things to do, the authors added yet another rulemaking on “inaccessibility” for this new exception. They are free to adopt the definition already set for lead. It’s up to them. Study up, guys! Can’t wait to give comments . . . .

Can you say . . . mania?

It is worth noting that in taking this route to “resolve” the pain points on phthalates, the Dems have chosen to NOT address a pending issue between the CPSC and California. Attorney General Jerry Brown of California sent a hot letter to the CPSC last year indicating his unwillingness to accept testing of the entire product for phthalates ban purposes. In the wake of his letter, the agency reversed course and rescinded its rule permitting a single test on the entire product. This would have been inexpensive for manufacturers.

It is pure fantasy that the Dems would take on Jerry Brown since our Congressional overlords are largely from CA (Waxman, Pelosi, Boxer, Feinstein) and are busy trying to California-ize the rest of the country. Henry Waxman would certainly never preempt Jerry Brown for the national good. Hence the half-a-loaf approach here.

Lead: The Waxman Amendment makes the pending 100 ppm lead standard prospective. This is a tiny bone thrown in our direction. You may consider it a nod of acknowledgement of your pain from the retroactive application of the lead standards and phthalates ban. Nonetheless, this is all you will get.

Again, this is only half-a-loaf. A more thoughtful and helpful change would have been to draw a FIRM LINE under the 300 ppm standard, eliminating the 100 ppm standard altogether as well as the rule ratcheting down the lead standard in the future (forgot about that one, right?). They could have said that the CPSC would be free to lower the lead standard in the future if necessary to protect public health and safety (taking into account the cost and benefit of any such new rules). But they didn’t.

The Waxmanis have no interest in such concessions. Whether out of zealotry or pride of authorship, no amendments will emerge if they reflect any concession of error or misjudgment in the Perfect Legislative Process. Thus, the 100 ppm standard can’t be removed because they put it there for a reason. We must live with it . . . so they say.

Rumorville has it that the Waxmanis are about to deliver a message to leaders of the business community to fall in line behind this “wonderful” amendment or else . . . they’ll get NOTHING. Don’t you love this? And I used to think THEY worked for US. What an idiot I am!

And on that note, I encourage you to read ONE more blogpost about this toxic amendment. I still need to show you how the authors are trying to deceive you and gut the system that regulates safety of safeguards against governmental abuse. That is, abuse of the interests of your businesses. It’s really something to see.

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CPSIA – Phthalates and Lead Limits in Waxman Amendment

CPSIA – Sean Oberle Takes a Pot Shot

How dare I express anger at irresponsible or incompetent consumer groups! I guess I am not a right thinking individual . . . like Sean Oberle, owner of the Product Safety Letter.

Today, Mr. Oberle made an oblique reference to me in his editorial entitled “Zhu Zhus: Who Loses?”. In this essay, Mr. Oberle expresses the view that, like negative sales spillover effects from recalls, consumer groups may suffer some reduction in reputation from the actions of the inaptly-named “GoodGuide”, famous for attacking Zhu Zhu Pets this week. [Courtesy of the fast action of the CPSC over the weekend in defense of the victimized Cepia LLC, the product was promptly cleared.] After snuffling up a few tears for the consumer groups, nobles one and all, Mr. Oberle carries on with a reference to my recent essay on this sad episode:

“But the current doesn’t stop at humor. It runs into hostility. Indeed, one anti-CPSIA advocate this week went so far as to use publicly the irresponsibly offensive (yet laughable) slander, terrorists, to describe consumer groups when reacting to the Zhu Zhu story.”

I don’t mind being singled out, or even insulted in a condescending manner, for the content or choice of words in my essay on Zhu Zhu Pets. It is hard to interpret the concerted (in fact, coordinated) efforts of many consumer groups to destroy our industry as anything other than terrorism. The annual spectacle of consumer groups frightening the public by spreading fear and misunderstanding about toys is revolting and deserves public shame. Consider the recent successes of CEH in getting shoes and sandals recalled by the CA AG for having too much lead in soles and insoles. Wow, we really are safe now. That’s quite a public service, isn’t it? [Mattel's fines paid for CEH's sleuthing.] Likewise, Illinois PIRG’s failure to find much to complain about in current toys on the shelf didn’t stop them from making up a new safety standard (lead in the toys are below the federal standard but above ZERO!). In another case, the “Trouble in Toyland” report this year hauled in a bounty featuring as its big catch a zipper pull. Still, it was a great opportunity to go on TV and make out like the problems were still dire. Hey, it’s a living. . . .

And the media is biting down hard, swallowing hook, line and sinker. Consider the WSJ and the Washington Post coverage of the “GoodGuide” episode:

• WSJ: “The developments underscore the role that consumer groups can play in helping the government regulate children’s products, but also the confusion they can bring.” [Emphasis added] Helping? By doing what, spreading misleading information and causing a massive emergency by incompetently attacking the year’s leading toy? That kind of help I think the CPSC can live without.
• Washington Post: “A ratings Web site, GoodGuide, reported Saturday that it had found high levels of antimony in the Zhu Zhu Pets’ ‘Mr. Squiggles’ model. Antimony is used as a fire retardant in textiles and plastics, and chronic exposure to it can cause heart and lung problems and other health effects. Federal laws require that toys contain no more antimony than 60 parts per million. GoodGuide reported that it had tested Mr. Squiggles and detected antimony between 93 and 106 parts per million.” High levels? What exactly constitutes “high levels” of antimony, anything over the limit? Is that because even one part-per-million of antimony over the federal limit on the product’s nose is deadly? I dare say NOT. How many slices of filet-of-nose-of-Zhu-Zhu-Pet must be consumed before you get “heart and lung problems and other health effects”? My opinion: the Washington Post has absolutely NO IDEA. However, what’s the story if a paper can’t use strong words to describe minor issues?

Don’t worry, the Washington Post hasn’t lost its edge. It tried again the very next day to help stir the pot some more.

Despite Mr. Oberle’s indignation over my choice of words to describe the saintly consumer groups, most Americans are getting sick and tired of the stunts the self-appointed advocates pull annually. A little bit of this is a good thing, a mass terror campaign not so much . . . .

If we are ever to pull ourselves out of this miasma as a society, we’re going to have to get away from consumer education through fear mongering. The issue confronting us is safety. Safety . . . not compliance, these are two different things. Perhaps there is something more to the virulence of the campaign than meets the eye. There are those among us who have a political agenda, in addition to an interest in safety. Let’s not confuse the two. Revving up in Congress is an effort to recast the Toxic Substances Control Act. This next phase of the CPSIA descent-into-hell aims to make all chemicals suspect until proven safe. Sounds good to you? Well, consider what this approach to regulation has done to all aspects of the children’s products industry over only TWO such chemicals (lead and phthalates). The same luminaries who brought you this mess have a mega mess to sell next.

Don’t let it happen.

Read more here:
CPSIA – Sean Oberle Takes a Pot Shot

CPSIA – An Open Letter on the Testing Stay

To all of my loyal readers:

You may not realize it, but we face a serious crisis right now. Last week, the CPSC held a hearing that discussed the possible extension of the testing and certification stay. The Commission is under pressure to ramp up implementation of the awful CPSIA and this therefore puts the testing stay in peril. Chairman Tenenbaum has heard the concerns of regulated businesses that some advance warning is needed, so Rumorville in forecasting a quick consideration of the question – possibly as early as next week. Commissioner Nancy Nord commented on the implications of the stay in her blog last week. At least one Commissioner, Bob Adler, is openly hostile to continuation of the stay. This is a big deal to companies regulated by the CPSIA.

What kind of disaster would the termination of the Stay in February mean to you? Let me count the problems:

• The “15 Month Rule” was never issued when due on November 14th. The “15 Month Rule” was supposed to address testing frequency, sampling regimes, the need for additional testing, component testing rules, etc. [Component testing rules were cited as critical by Nancy Nord when the original stay was issued on January 30, 2009. How time flies . . . .] There is a workshop to be held on Thursday and Friday this week to solicit feedback from stakeholders. More than 200 people will attend and many more will watch and participate online in the web simulcast. Presumably this feedback needs to be fully digested before the Commission acts on the stay.
• Comments on the “15 Month Rule” issues are due on January 11. For perspective, the original comments on the penalty factors were due in late December 2008, and a second round of comments were due on October 1. The revised penalty factors have not been released, and we are now within days of a full year since the first comment letters were received. With this as precedent, we are clearly MANY months from a completed “15 Month Rule”. Arguably, without a fully articulated “15 Month Rule”, an active testing requirement will be incomplete and utterly confusing.
• The CPSC has not issued its phthalate testing standard.
• The CPSC has not certified ONE phthalates lab yet.
• The CPSC admits that it has not certified enough labs to handle a full burden of testing for many product classes or safety tests. They have not provided any quantification of this deficit besides acknowledging that for bikes, based on current accredited labs, it would take a full year to complete testing on all bikes on the U.S. market. That’s one round of testing only, btw.
• The CPSC has not certified labs for ASTM F963 testing yet.
• The CPSC has not defined “children’s product”, “toy”, “play” or “childcare article” yet, making the application of the rules completely opaque.
• The CPSC has not leveled the playing field, acknowledging that fixed test costs place a disproportionately high burden on small businesses. This competitive disadvantage has no ready solution under current rules.
• The CPSC has acknowledged that many companies have not acted to fill market gaps like component testing because the rules are not final (or even drafted in this case).
• The CPSC is on its third enforcement policy on lead and lead-in-paint. With the enforcement-policy-of-the-week, the agency ensures that companies will have devote considerable resources to relearning the rules that they had previously mastered, leading to confusion and exhaustion. Imposing a further layer of incomplete, vague and unarticulated testing policies and plans will only reinforce chaos as the working standard for the children’s product industry.
• The rules that the CPSC has implemented are so ornate, confusingly worded, scattered among multiple documents, letters, and even video testimony, that only the most obsessive observers can claim an accurate understanding of every nuance. This group would not even include me, even though I have given up sleeping in favor of the CPSIA.

The Commission’s sense of urgency to get this irritant off their plate is creating rumors that they intend to act as soon as the next business day after the workshop. As outrageous as this might seem, it’s really worse – the workshop is not about the stay. The workshop is about component testing, frequency of testing, sampling schemes, when to require additional testing, etc. The CPSC has not asked for comments about the lifting of the stay but at least one Commissioner has reasoned that if it was a “big deal”, the CPSC might have heard from more than the Handmade Toy Alliance. [Apparently, both Bob Adler and Jay Howell believe that the CPSC has had not heard from anyone other than the HTA on the stay, which is certainly not true.] This kind of thinking is worrisome in the extreme.

If the stay is lifted on two months notice with all these rules open, undrafted or in process, utter chaos will break out, not only between CPSC regulators and their regulated companies and industries, but also between (a) consumer groups, regulators and regulated companies, (b) State AGs and regulated companies, and (c) regulated companies and their dealers/retailers. By lifting the stay under these uncertain conditions, the Commission is risking complete market chaos. While this would rain down misery across all regulated companies and industries, there is cold comfort in knowing that the Commission would eat its own cooking, suffering a devastating drop in reputation for taking such an economically insensitive and irresponsible act. It would also create whole new class of crises for the agency to deal with, rendering the agency crippled with overwork, inefficiencies and wear-and-tear. Not exactly a magic pill for good agency morale. If the Commission chooses to take this step, it will be shooting at the agency’s feet as well as ours.

We need your help to stop this terrible step. First, it is ESSENTIAL that everyone attending the workshop SCREAM BLOODY MURDER on the issue of the stay. If the stay is lifted, you will be held responsible for complying with unwritten rules by your customers, your local newspaper, your State AG and the like. Your arguments with that cast of characters will get even more intense and distracting (if that’s even possible). The upcoming workshop is your unique opportunity to make your voices heard.

Second, you need to let the Commission know directly how you feel. Here are the email addresses of the five Commissioners – send them an email THIS WEEK expressing your deep concern over the possible lifting of the stay. Please feel free to cc. me at rwoldenberg@learningresources.com.

Chairman Inez Tenenbaum itenenbaum@cpsc.gov

Commissioner Bob Adler radler@cpsc.gov

Commissioner Thomas Moore tmoore@cpsc.gov

Commissioner Nancy Nord nnord@cpsc.gov

Commissioner Anne Northup anorthup@cpsc.gov

Make your voices heard – don’t let this issue catch you napping. We all have the power to help ourselves. It’s time to take action on behalf of your company, your customers, your suppliers, your teammates. Please help us by contributing your voice to this critical issue THIS WEEK.

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CPSIA – An Open Letter on the Testing Stay

CPSIA – Proposition 65 Provides Funding Mechanism for CEH Crusaders

Has the Center for Environmental Health (CEH) gone into the business of finding violations of law for profit? You gotta wonder.

This past week, CEH capped off a six-week investigation of 250 children’s items at the request of or in partnership with the CA Attorney General’s office, finding seven mildly offending items. As detailed in my blogpost last Wednesday, this rogue’s gallery of offenders include a pair of shoes (soles), sandals (insoles), a poncho, a small patch of material on a bicycle accessory and the like. The CA AG issued cease-and-desist orders on his own, cutting the CPSC out of the picture, and a media feeding frenzy ensued. Presumably to the delight of the CEH troublemakers, Oregon followed up with its own action. [To Oregon's credit, they indicate they would inform the CPSC of their concerns, not take a direct recall action like the CA AG.] Perhaps other States plan to follow the CA lead and jump down the retailers’ throats for these trivial defects.

How did this come to pass? It turns out that the starting point was a tip by CEH on another lead case, this one involving Mattel. As you know, Mattel was responsible for some major lead-in-paint recalls in 2007/8. These recalls were a result of a violation of longstanding federal law, and the authority for the recall was found in the CPSA (before its amendment by the CPSIA). [In other words, the new law was not required to force Mattel to recall these items.] It turns out that California’s Proposition 65, its notorious consumer-right-to-know law, was also violated by those recalls. The insidious Prop. 65 (explicitly exempted from preemption under the CPSIA by the powerful California Congressional delegation including Senators Boxer and Feinstein and Reps. Pelosi and Waxman) requires that products exceeding (in this case) its lead standard be labeled to “inform” the consumer. Prop. 65 lead standards now match the federal standards. By violating the federal standards, Mattel also violated the Prop. 65 label requirements, thus giving California the chance to extend its palm for penalties and other concessions.

In the first of many settlements relating to its recalls, Mattel and other companies settled
a Prop. 65 lawsuit and paid a collective $1.56 million in penalties and fees. [The CA AG extracted similar penalties from Target, TRU and KMart for lead violations earlier this month.] It turns out that this $550,000 penalty case stemmed from a rat out by CEH: “This agreement settles a lawsuit filed by the State of California and the LA City Attorney in November 2007, after receiving notices of violation from the Center for Environmental Health, As you Sow, and the Environmental Law Foundation.” Part of the money extracted ($550,000) was applied to a fund “to test toys for lead and improve outreach about future recalls.”

So how did Mattel’s misery pay off for CEH? The CA AG’s press release tells all: “In 2008, Brown’s office reached a settlement with several major toy companies over excessive levels of lead in their products. The settlement allocated $548,000 in funding for consumer safety groups to monitor lead levels in consumer goods and to provide outreach about product recalls. The Center for Environmental Health discovered the current violations with a grant from the Public Health Trust, which administers the settlement fund.”

So, here’s the game – CEH finds violations of the law, and then puts in for grants to find more violations, all funded by the violators. CEH is a not-for-profit – it is not a business, does not make or sell products or services for a profit and its officers and employees have no source of funding other than contributions . . . until now. Proposition 65 is their new funding source. Shaking down corporations under the auspices of Prop. 65 to provide funds for new hires, salaries, raises, perhaps even bonuses. Thus, the unholy alliance of plaintiff lawyers and consumer groups is made even more cozy. Consumer protection as a plaintiff lawyer’s dream. Job well done, CEH!

CEH and its ilk want you to believe that they are simply out there to protect your interests, which is the reason presented to explain their “passionate” search for “scofflaws”. But does that explanation hold water when the consumer group is essentially working on a commission for pay? Can you really be sure these violations are actually dangerous when it is clear that CEH must find them to pay its rent or keep its officers on the job? And what about the interests of the local politicians in this dynamic? Jerry Brown wants to be California’s governor – what are his incentives in this case, being egged on by the pay-by-the-violation consumer group?

Does anyone see the possibility of conflicts of interest here? What is that odor I smell?

Aside from the OUTRAGE of CEH taking money for its escapades, the entire Proposition 65 gambit seems to be a parallel safety law allowing a local politician to upstage and trump federal regulation, all the while shaking down companies with duplicative penalties for the same offense. Mattel, no particular object of sympathy in my book, was hit with Prop. 65 penalties (collectively with others, $1.56 million), a “consumer fraud” settlement with 38 states for $12 million, a CPSC fine of $2.3 million and a class action settlement said to be worth more than $50 million. Since Proposition 65 is exempted from preemption by our wise Congress, this liability bonanza will continue to plague the toy industry for a long time to come (forever?).

What is the consequences of the long term, relentless, pointless (from a social good standpoint) assault on our industry under Proposition 65? A poisoned well. What do you think will happen to small business vendors to retailers who have been hounded and hunted under this law? The ultimate in skittishness. It is just not possible to satisfy their hunger for safety mania. As an example, a large national retailer has been demanding that our company test every product for lead-in-paint . . . regardless of whether it has any paint on it. That can only make sense in a world where the consequences of violations are too horrible to contemplate.

Is a violation of this law really worse than mass murder? I think not. This week’s CEH violations are innocent and have not and will not harm anyone. They are minor manufacturing defects and can be corrected easily and inexpensively. By making each such trivial violation into a capital case, the cost of doing business skyrockets, profit incentive crashes and many players exit. We have already seen one offering memorandum for a customer of ours who can’t take it anymore. Most of the exits are quieter and harder to detect. See my post about Whimsical Walney. If we allow regulators to run roughshod over our industry this way, there won’t be anything left to protect. That would be terrible for all Americans. Sometimes you don’t know what you have until you lose it.

This is your country. Think about the corruption of fee-driven consumer groups and marauding State AGs who don’t answer to the CPSC. What are you going to do about it???

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CPSIA – Proposition 65 Provides Funding Mechanism for CEH Crusaders

CPSIA – ICPHSO Toronto Update

I attended this week’s ICPHSO meeting in Toronto. The meeting was located in Toronto and focused much attention on the proposed amendment to Canada’s 40-year-old Hazardous Products Act (the so-called Bill C-6). The meeting was attended by more than 250 people, largely comprised of Health Canada officials (the analog to the CPSC), CPSC staff, including Chairman Inez Tenenbaum directly from China, a variety of testing companies, mass market companies, Canadian companies, lawyers and other interested parties.

I thought I would share a few tidbits from the meeting:

Chairman Tenenbaum’s Keynote Speech: Chairman Tenenbaum addressed the conference on Wednesday morning. Her speech is posted on the CPSC website. The speech included a few hints of movement toward accommodation of businesses under the CPSIA, but unfortunately, it is only provides hints at this point. It is worth noting that sidebars at the conference suggest that there is more sensitivity to business concerns than CPSC public statements might suggest, but then again, we can only rely on real action, not just words. The next development to look for is a change in tone and a change in actions. When we can triangulate from words to actions, and see a real easing of the intense pressure on businesses, then we can take the off-line assurances more seriously.

Some highlights from the speech:

• The “good”: The “15 Month Rule” is due soon. Tenenbaum promised a special two-day workshop on this rulemaking IN ADDITION to normal public outreach. She emphasized that they want to “get it right”. [Ed. Note: Rumorville has it that this rulemaking will be delayed, and the two day workshop may precede the issuance of the draft rule. Likewise, there is growing suspicion that the testing stay may therefore have to be stayed. There are multiple reasons why this may have to happen.]
• She emphasized a need to minimize the burden on small businesses. [Minimize is a relative term, let's not get too giddy yet. Need to see what they have up their sleeves.]
• The CPSC is reaching out to SAGs to make them partners in the safety process. She wants to minimize competition between the CPSC and the SAGs. I consider this a major advancement in CPSC practice and a nice contribution by Ms. Tenenbaum in the early days of her administration. Arguably, the 2007-8 crush of State legislation and SAG grandstanding evidenced strong State feelings of isolation and legal impoverishment (in addition to a general desire of local politicians to appeal to the populace before elections). A proactive approach by the CPSC to working with the SAGs is the best chance for ANY OF US to neutralize or minimize the disruptive behavior of States and SAGs in the future.
• Ms. Tenenbaum announced a substantial change to the penalty factors when she said: “In cases where CPSC may impose a financial penalty on a U.S importer for violations, CPSC may to take into account whether the importer has safety or compliance programs in place and whether they conducted pre-market and production testing to minimize safety risks.” Gib Mullan also acknowledged that the penalty factors will be changing. This is another faint sign that we are being heard. The penalty factors were very harsh in the first draft. After a bit of an uproar, it appears now that the agency is going to moderate its approach somewhat. If this turns out to be a “real” shift, it is good news indeed.
• The “bad”: The overall tone of the speech remained harsh and somewhat threatening, at least that’s how it felt to me. Phrases such as the following were reminders that the CPSC has a big club and intends to use it:

- “Chinese suppliers and U.S. importers are now on notice from both governments that it is a mistake to depend on good intentions and a few final inspections to ensure compliance with safety requirements.”

- “We will enforce in a firm but a fair manner the new federal law that puts strict limits on lead and phthalates in children’s products and makes all toy requirements mandatory.” [The emphasis was hers in the live speech.]

- “As I have consistently stated, we intend to enforce this law that Congress put in place in a firm but fair manner. CPSC also has a federal rule making underway that puts U.S. importers on notice.”

- “Another area that we at CPSC are rethinking is the singular approach used in the past to identify risks and simply recall products when necessary. This is one aspect of enforcement that will not work if pursued alone.”

So Ms. Tenenbaum maintained the tough tone but gave hints of a coming thaw. We’ll see in due course if I am imagining things. Needless to say, I hope not!

Remarks of Gib Mullan: Gib Mullan, the CPSC chief enforcement officer, gave a short speech summarizing the CPSIA and recent events. I must say I found some of this speech positively chilling. For one thing, Mr. Mullan noted with apparent satisfaction the first recall of a toy for violations of the phthalates ban. I believe this refers to the recall of 40 inflatable toy baseball bats previously highlighted in this space. Aside from the fact that Mr. Mullan confirmed that the enforcement focus of the agency is (supposedly) bath squeeze toys, which certainly does not include inflatable baseball bats, this micro-recall of 40 bats is highly suggestive of a strict liability enforcement policy. If that is so, then what is the purpose of pointing out this recall to the crowd at ICPHSO? I would suggest that it is intended to scare the business community. Mission accomplished?!

Further to that mission, Mr. Mullan announced that the agency is attempting to be more “consistent” and “rigorous” in assessing penalties. Okay kids, think of Target’s $600,000 penalty – if the CPSC is going to be “consistent”, what does that precedent mean for the rest of us? If Target gets hit with a massive penalty after it performed preshipment testing, had no actual knowledge, was increasing its safety surveillance and turned itself in voluntarily after catching its own errors, what should we expect from a “consistent” penalty practice at the agency now? Mr. Mullan continued by noting (again, with a bit too much relish) the rising tide of penalties assessed by the agency in 2009, and further noted that they haven’t even cracked the 2007 lead-in-paint violations yet. He said larger penalties should be expected now, given the new powers allowed the agency under the CPSIA.

What is the purpose of this announcement? What else could it be, besides an intent to scare you and me? And, hats off to the chef, it succeeded. Among the many outrages of this new practice is the focus on retribution for old recalls with new penalties. Why is this a problem in my view? Well, for one thing, no one can do anything about the 2007 recalls at this point. Is the CPSC under the impression that the toy industry hasn’t “learned its lesson” yet? If that isn’t their view, then why lay on mega-penalties for matters that were apparently closed with significant expense now almost three years ago?

At what point is our penance complete? I can only supply a couple suggestions to explain this new penalty practice – (a) vindictiveness (as in CPSC meting out “justice”, rather than simply ensuring a safe marketplace), and (b) terrorizing the corporate community into “compliance”. Both rationales are wrongheaded and destructive. I continue to return to my original comment (December 17) on the penalty factors – CPSC penalties can only be consistent, rigorous, purposeful and (importantly) predictable if they are restricted to egregious conduct. Until the CPSC disciplines itself to a fairer penalty system, ALL OF US will assume we are next in line to get whacked like Target. After all, the CPSC has said publicly that they intend to be consistent and rigorous on penalties – in other words, they are telling us that we can and should learn from Target’s experience. That message unleashes a parade of horribles. The CPSC needs to take this on board.

One last observation about Mr. Mullan’s speech – he noted that recalls from China fell by 40% in 2009, the first fall in years. This is of course good news for everyone, most of all the children’s product industry. As we know, success has many fathers but failure is an orphan. Many pundits point to the CPSIA as the reason that recalls have fallen. Mr. Mullan added another factor, the deep recession of 2009. Both of these factors contributed, but I think the real “father” of this success is that the notorious publicity of the new law and the new strict enforcement of the lead-in-paint rules (under the old law) led various companies and industry organizations to get mobilized to address safety practices. Who among us wasn’t shocked and horrified by the suicide of the owner of a Chinese factory that supplied Mattel with lead-in-paint toys? The horrors of the recall frenzy and everything it entailed led to changes in practice. The remaining hubbub of the new law is just a hang-over IMHO, and does not explain the good recent reduction in recalls. For this reason, I believe the focus of the CPSC and its enforcement activities can and should SHIFT toward maintaining these gains through industry outreach, education, targeted and focused enforcement, and development of new and modern systems appropriate to the changing marketplace. It even calls into question the value of the law’s kneejerk requirement of prophylactic testing, something I am on record opposing.

Health Canada and Bill C-6: Frankly, I have not had time to dig into the Bill C-6 yet but it got a lot of air-play at ICPHSO. Much of the brass at Health Canada was there, and I attended several talks by these professionals. I must say I left impressed with the Health Canada leadership. They were incredibly approachable and engaged. I was not made to feel like the “enemy”. Especially notable was their TONE. They don’t even imply that businesses are populated with bad or untrustworthy people. They repeatedly pledged to work cooperatively with businesses and noted that they have done well for 40 years with voluntary recalls and non-confrontational relationships. Hmmm, could it really be true that you catch more flies with honey than with vinegar?

They also stressed their interest in hearing about “lessons learned” and engaging in real dialogue as the new bill is crafted and refined. They noted some real gaps in their enforcement empowerment under the existing law, which they characterize as outmoded, but then again, they also stressed that these powers are intended to be used only if necessary. What a different tone they struck. They convinced me that they are nice people who mean to be partners in safety with industry. A refreshing change.

The contrast with the last year of CPSC hostility was palpable. It gave me reason to reflect on the course of my own relationship with the CPSC. Interestingly, I was a big fan of the agency until about two years ago. For 17 years I trusted them, I consulted with them, I had no reluctance to work with them and thought of them as partners, I advised friends to trust them, I did not see them as the ‘enemy”. The CPSIA and the feeding frenzy of the last two years sadly eroded that trust. Trust has to be earned, of course. I believe trust in the CPSC can be restored but not without real effort and real action. The Health Canada folks struck the right tone, and we can only hope that the CPSC was listening. Industry and the CPSC do not have to be at loggerheads, and there can be trust (there MUST BE trust). To get there, the “new” CPSC may need to make some concessions, but a path to this worthy karma level does exist. This detente does not need to involve endangering children, either. Health Canada implicitly recognizes that industry has no interest in harming children. Considerable efforts by industry are expended to avoid this terrible outcome. The presence of a few bad or incompetent actors in a massive marketplace of many thousands of companies and millions of different products does not make the rest of the market participants into bad guys, too. This is the notion that must be abandoned.

Final Thoughts: ICPHSO was a great event for networking, off-line conversations and sharing of perspectives. I feel that there is room for more dialogue. We can only hope that some barriers are being broken down, and that we may see some positive surprises (for a change). It is also clear, as Health Canada demonstrated, that a regulator can be effective and non-confrontational at the same time. We know the CPSC has a big stick, perhaps they can stop reminding us with harsh rhetoric and harsh actions (we won’t forget about the stick, trust me). Next on the agenda is a rationalizing of the rules to allow businesses to function economically. Unfortunately, I cannot conceive of this development without a change in the law. To do this, the CPSC must summon up its resolve and TELL Congress that changes are needed. I do not see any way to avoid this. Time has a value, too, so the CPSC leadership must weigh the consequences of waiting – costs are mounting rapidly as time goes by.

I hope I’m not dreaming. This can be done. The coming weeks will reveal a lot about the direction and resolution of the pending issues confronting the business community.

Read more here:
CPSIA – ICPHSO Toronto Update

CPSIA – Crain’s Says We’re About to Get Sued

In this week’s Crain’s Chicago Business, the news periodical speculate on which mass tort action could succeed asbestos as the next gravy train for plaintiff’s attorneys. And guess who makes a guest appearance??? Asbestos and the legal black hole By: Steven R. Strahler September 28, 2009 Asbestos has lived up to its Greek origin — “inextinguishable” — on legal and medical landscapes alike: Mass tort actions involving asbestos have bankrupted more than 60 makers and users of the once-widespread insulating material, starting with Johns-Manville Corp. in 1982 and claiming Chicago’s USG Corp. in 2001. Odds are, corporate defendants won’t see another mass tort topic like it: more than 700,000 claims pending against 8,000-plus defendants and estimated costs exceeding $250 billion. Because asbestos-related symptoms can take 30 years or more to manifest, the litigation is expected to last until mid-century. . . . . “No, there is no asbestos-like gravy train pulling up in front of the American Bar Assn.,” says Robert Hartwig, president of the Insurance Information Institute. Still, he says, “there are great unknowns, like climate change and latent manifestation of occupational disease.” Among the most likely post-asbestos targets for plaintiffs’ attorneys: . . . . Product liability The Consumer Product Safety Improvement Act of 2008 requires independent testing of children’s products, including cribs and metal jewelry, empowers state attorneys general to file federal actions and increases penalties, all of which will boost opportunities for mass-tort suits.

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CPSIA – Crain’s Says We’re About to Get Sued