Archive for the 'Consumer Product Safety' Category

Illusory Process = Diminished Results

The CPSC staff is now collecting and cogitating on information about how phthalates—substances added as plasticizers to make plastics soft and pliable—are used to manufacture children’s toys and child care articles.  This activity is part of the agency’s effort (perhaps its only effort?) to minimize the burdens of third party testing, as required by Congress in P.L. 112-28.  If the agency can conclude that certain substances do not and cannot contain illegal phthalates, then it can determine that products made up of those substances do not need to be tested for phthalates.

The problem is that the way the agency is going about its inquiry is almost guaranteed to result in very little relief.  And since phthalates testing is very costly, an illusory process that is structured to minimize any relief available does not reduce the testing burden Congress was trying to achieve, much less what responsible regulators should insist on.  The problem with the phthalates inquiry is that the agency is requiring that stakeholders not only show that phthalates are not now being used in the manufacturing process, but also to show that it is impossible that they will be so used any time in the future, in any place in the world.  In other words no matter how much real world data one supplies, it cannot proof the negative as is being asked by the CPSC staff.  Although we all know the moon is not made of green cheese, who can say what will happen in the future.

The outcome of this inquiry is pretty clear.  Certain predictable substances, such as natural wood and fibers, will eventually receive exclusions from testing (after how many years of costly and unnecessary testing?).  The bulk of products that do not use phthalates but whose makers cannot now predict the future in the absolute terms required by the agency will not get relief.  The agency will claim this as an accomplishment and close up shop on any real burden reduction.

I do not understand why the agency has taken the approach it has.  A real and honest effort to understand where phthalates are used, where they are not and then address its compliance efforts at where they are used and its burden reduction efforts at where they are not would result in significant relief.  Rather than ask stakeholders to prove a negative, they should ask stakeholders to help them understand where the agency should be looking for phthalates.

The response, no doubt, is that a collaborative approach does not guarantee that phthalates will not be added by some unscrupulous manufacturer at some point in the future.  However testing relief does not relieve anyone of complying with the underlying phthalates prohibition.  And the agency has plenty of tools to address that eventually if it were to occur.  Because the phthalates prohibition must be complied with regardless of testing, the agency cannot say that its current constrained approach is required to be consistent with assuring compliance with the existing law.  Denying testing relief to the vast majority of manufacturers who do not use phthalates because of some imagined future scenario which the agency can address should it occur does not carry out the spirit of the law Congress passed.

$375,000: The Price for Peace

Yesterday the CPSC announced that it has reached a settlement with Craig Zucker, in the litigation to force a recall of Buckyballs.  The Commission alleged that 0727_buckyballs_630x420Buckyballs, although designed and marketed for adults, were defective because a number of children had sustained serious injuries after swallowing the tiny powerful magnetic balls.  The settlement calls for the CPSC staff to establish a recall trust fund to manage the recall. Mr. Zucker will fund an escrow account to dole out money to the trust fund up to $375,000.  In its press release, the CPSC trumpets that this is “a win for safety.”  Mr. Zucker, on the other hand, says that he hopes “the settlement will discourage the CPSC from wrongfully pursuing . . . entrepreneurs in the future.”

Who, then, won and who lost?  In the most simplistic terms, perhaps one could say that the agency won since it accomplished a recall that would not otherwise have occurred.  But what is that recall worth and at what price was the recall obtained?

Left on the table is the question of whether Buckyballs are defective.  The government’s theory of defect was that warnings are not sufficient to prevent injury to an unintended user group and therefore the product cannot be made and sold, even though there were no injuries to the intended user group.  In the settlement Mr. Zucker does not concede that Buckyballs are defective, and the settlement leaves unresolved the agency’s apparent philosophy that a product can be banned if warnings do not work.

Also left on the table is the question of whether the agency even had jurisdiction over Mr. Zucker in his personal capacity. The agreement makes clear that Mr. Zucker is not conceding the issue of jurisdiction and so the applicability of the Responsible Corporate Doctrine is not addressed by this agreement except to say that Mr. Zucker personally is released from all agency liability (assuming it existed in the first place).

The recall itself is very curious.  The CPSC staff will implement the corrective action plan and claims (accompanied by proof of purchase or an affidavit attesting to purchase location and price) must be presented within six months of the recall trust being established and consumers notified of the recall.  Refunds will be made in the order they are received and any consumers who either file after the six month period ends or after the funds have been depleted are out of luck.  A web site paid for out of the recall fund will be established and maintained by the Commission for five years. The escrow account funding the recall will be closed after 12 months with any remaining funds reverting back to Mr. Zucker.  But since the government does not have experience administering recalls and will, no doubt, have to hire a third party (paid for out of recall funds) to administer the fund and oversee the recall, it is pretty unlikely that there will be any monies going back to Mr. Zucker.

The settlement agreement does raise a side issue that may be interesting to lawyers or students of regulatory policy.  The Antideficiency Act prohibits a federal agency from obligating the government to pay out money before funds have been appropriated and a real question exists as to whether this agreement violates the Antideficiency Act.  Further, administering recalls is not within the specified functions of the Commission and the act is rather specific in stating that recalls will be undertaken by the product seller.  It is not clear to me that the agency has the authority to take the actions specified in the agreement but it is also not clear who (other than the agency’s inspector general) would be in a position to object.

Going back to the question of winners and losers, it seems that there are lots of losers but I don’t see any winners.  The agency lost since it has spent substantial public resources (would it not be interesting to know how much the government has spent on this?) to reach an agreement that is about half a percent of what it initially wanted.   The agency lost because the issues that were central to the litigation were left unresolved.  Mr. Zucker lost because he, no doubt, ended up spending more in legal fees than the value of the recall and basically paid the government to get them off his back.

But at the end of the day, consumers lost. Scarce public resources were spent to achieve a recall that cannot be effective both because of how it is structured and what it is trying to accomplish.   Past experience shows that very few of these products will be returned, thereby achieving little added safety even if the government’s theory of hazard is correct.  And if the past is prologue, then the government achieved very little at a very great cost with consumers footing the bill.

 

 

I saw it on the Internet; it must be true

Earlier this week a friend told me that unfair and misleading information had been put on his Wikipedia page without his knowledge. While I have no idea how things get cautionposted on Wikipedia, I do know that, with greater frequency, Wikipedia posts are being cited as fact. And I could not help but think about how the process of morphing disinformation into “factual” information would be accelerated if the federal government could cite, use, and repost information found on the internet without making efforts to verify the validity of that information.

Unfortunately, that is exactly what the CPSC is suggesting it be able to do in a proposed rule that would “modernize” its regulations dealing with information disclosure. The law requires that the public disclosure of any information obtained by the agency that identifies a manufacturer or product be accurate and fair. The current regulations set out a process for checking with the product manufacturer to verify the accuracy and fairness of the information proposed to be disclosed. The agency now proposed to substantially change the rules with respect to how it carries out its responsibility to assure the accuracy of the product-specific information it publicly discloses.

Among other things, the agency wants to republish with impunity information about a product that has already been made public, including information on the internet.  The agency would have no obligation to go back to the manufacturer to verify the accuracy of the information it proposes to republish. Apparently checking the validity of such information is just too much of a burden. And publishing unverified information by the federal government lends credence to that information, regardless of its accuracy.

While I leave to others to opine on whether this comports with the letter of the law, it certainly violates the law’s spirit. My friend discovered that, on the web, anyone can say anything about you. But is it right that this behavior be condoned and promoted by the federal government?

There are a number of other troublesome changes being proposed by the CPSC’s proposed rule on information disclosure. Comments on the proposal (Docket No. CPSC-2014-0005) are due on April 28. Anyone concerned about agency fairness should read the proposal, go to regulations.gov and submit comments.

What’s Wrong With This Picture?

[I]ndependent regulatory agencies should consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them. . .”.  President Barack Obama, Executive Order 13579, July 2011.

 

mattress on fireA small announcement in the March 17 Federal Register noted that the CPSC would be collecting information on compliance with the mattress flammability standard that deals with fires caused by smoldering cigarettes, 16 CFR 1632. Why would anyone notice or care?

For those who took President Obama at his word when he announced his executive order, this is just another reminder of how one agency, the CPSC, in its push to regulate, has chosen to ignore basic principles of good government.  Here’s the back story.

Years ago, the CPSC promulgated a safety standard for mattresses addressing the risk of fires caused by smoldering cigarettes.  The test in the standard consisted of laying several of the hottest burning commercially available cigarettes—unfiltered Pall Mall’s—on a mattress and measuring char length after a prescribed time.

In 2006, the agency issued another safety rule addressing the risk of mattress fires caused by small open flames from such things as candles, lighters and matches, 16 CFR 1633.  The test for that standard consists of holding two propane burners to the mattress and measuring the time it takes the mattress to ignite.  This test is a much more rigorous test than that required by the earlier cigarette smoldering test.

For several years now, I have been asking the question why require two separate tests when it is likely that one will suffice to measure the flammability characteristics of mattresses.  It is unlikely that a mattress could pass the open flame test but fail the cigarette smolder test. The agency now has sufficient experience with the more rigorous open flame standard to determine whether the cigarette smoldering standard is really needed.  Would it not be a new and interesting experience to see the CPSC consider actually repealing a standard as being unneeded?

A perversely amusing aspect of this question is the fact that the unfiltered Pall Mall cigarettes required to be used for the testing were phased out by the manufacturer several years ago.  Further, all 50 states now prohibit the sale of any cigarettes other than reduced ignition propensity (RIP) cigarettes—those that go out if the smoker does not continually puff on them.  The CPSC’s reaction to these developments was not to question the need for the underlying regulation but instead to use public funds to develop a new test cigarette.  This new government-developed cigarette is available for purchase from the National Institute for Standards and Technology.

Where does all this leave us?  The CPSC continues to enforce a standard that on its face does not comport with what is happening in the real world.  Mattress manufacturers are forced to buy cigarettes that no one will ever smoke to perform a test that may well be irrelevant. The consumer pays the cost of excessive testing.  And the CPSC, rather than asking the important question of whether this regulation is even needed, instead issues a Federal Register notice telling us about its plans for enforcing it.  Does anyone else see something wrong with this picture?

The $57 Million Shakedown

The CPSC’s action to force a recall of Buckyballs–small powerful magnets the Commission believes to be unsafe but which are still being legally sold by others—has raised many serious questions about whether the agency acted properly.  But its efforts to blow up the concept of limited liability by individually suing one of the company’s founders–absent any allegation of wrongdoing–has elevated this action into one that could impact all businesses. 

Recently Craig Zucker, a founder of the now-defunct company that sold Buckyballs and the object of CPSC’s ire, and I discussed this case with the U.S. Chamber of Commerce. Calling the long-term implications of this case shocking, the Chamber has now produced a video that details the concerns this case poses for American businesses.  As a former safety regulator, a mother and, of course, a consumer, I strongly believe the agency could have addressed any safety concerns with this product without the unprecedented overreach taken in this case.

Go to FreeEnterprise.com to see the video for yourself.  Here is a link:

CPSC Burden Reduction Mantra: “Maybe One of These Years . . .”

An interesting op-ed in last week’s Wall Street Journal pointed to how the regulatory process impedes efforts called for by President Obama, among others, to shore up this country’s infrastructure.  The piece, written by Philip Howard, President of the nonpartisan reform group Common Good, focused on how interminable environmental review can stymy public projects and made several interesting suggestions for change.

As I read Mr. Howard’s article, I could not help but think about how the regulatory process has been used at the CPSC to slow activity, mandated by Congress and required by common sense, to reform the product testing regime dictated by CPSC regulations.  Recall that the testing rules setting the parameters for when products must be tested by independent third party testing labs imposed such impressive costs on the system that Congress told the agency to find ways to reduce those costs.  That was in 2011.  As we head into 2014, the agency has managed to avoid adopting any concrete relief to those who are now required to conduct unnecessary and expensive testing.  The Commission has done this by repeatedly asking for public comment on the same questions over and over again.

Last week the Commissioners met to adopt an operating plan for the rest of FY 2014.  Predictably, the issue of reducing testing burdens came up and, predictably, the Commissioners again punted.  This time, the agency staff was directed to finish their analysis of the public comments on a limited set of suggestions for relief by the end of FY 2014.  A majority of Commissioners rejected the notion of asking Congress for statutory changes suggested by the agency staff to make operation and review of safety processes more efficient.  Clearly, a majority of CPSC Commissioners do not see reducing unnecessary testing burdens as a core duty of the agency.

It is remarkable that for the past three years, product manufacturers have been conducting expensive testing that most (outside of a handful of advocates with a political agenda and several CPSC Commissioners) do not see as necessary to assure the safety that American families rightly expect.  That those families have to shoulder the costs of this added weight to the system seems to be a forgotten fact. I know that I have written about this issue before.  But as a consumer, I am mad.  I am mad that my choices are being limited and that, for example, I cannot buy beloved toys that are safe but are no longer being imported only because of the CPSC testing rules.  I am mad that I have to overpay for safety regulations of questionable value.

Rather than blindly defending regulations that are costing consumers without advancing safety, the CPSC should give them a thanksgiving gift:  how about getting down to work and stopping the procrastination on this.  It is time for big strides, not baby steps.

Changes

Tomorrow, after 8½ years, my term as a member of the Consumer Product Safety Commission ends. It has been quite a ride—smooth at times, bumpy at others, but always interesting.Change I will let others judge my successes and failures, but I have always striven to help the American consumer by ensuring that their products are safe and their options plentiful. It is my deep conviction that this agency does its job best when it works alongside stakeholders, not against them. All sides have valid concerns. All deserve to be heard. As a commissioner and then as acting chairman and then again as a commissioner, I have always tried to work collaboratively with my colleagues and with stakeholders. I am proud of the work that we do here at the CPSC, and I will be more than a little interested to see where the agency goes in the future.

As a matter of fact, more than just staying interested, I plan to stay engaged. (After having been involved with the agency in some way or another for nigh on 30 years, you wouldn’t expect me to just disappear, would you?) I have very much enjoyed writing this blog since I started it in 2009, and I’ll be keeping it up. There will be posts about the CPSC, and perhaps about other subjects like administrative law and regulatory policy. I won’t just be posting because I’m interested—I’ll be posting because all of us who know and work with the CPSC have a responsibility to stay engaged with the agency. Regulators and the regulated (and other interested parties like yours truly) have to keep talking with each other, not going back into our shells, in order to avoid the kind of groupthink that leads to bad decisions or an us-versus-them mentality. So let’s keep the conversation going.

Magnets Hearing: Let Us Hear From You

The CPSC has scheduled a hearing on October 22, 2013, to hear from the public about the pending proposed rule to ban small, powerful magnets. The hearing will take place at the CPSC headquarters in Bethesda, MD. To present oral comments at the meeting, send your request, along with the text of your comments, to cpsc-os@cpsc.gov.  You can find more information through the draft Federal Register notice here. Folks who wish to be heard should contact the agency by October 15th.

This hearing is required by Section 9 of the Consumer Product Safety Act which sets the procedures for the agency to issue many of its safety standards and bans (many of the CPSIA-mandated rules do not require this kind of public input.)

This issue presents troubling and conflicting concerns for the agency.  Obviously, the injuries that occur when toddlers swallow these small powerful magnets are of great concern to us. We have heard from many doctors about the serious nature of these injuries. On the other hand, this product is made and sold for adults, is extremely popular, and is being safety used by those it was intended for. Banning a product because unintended users are being injured through misuse is a serious and fairly novel undertaking for this agency.

This rulemaking also presents some troublesome process issues—issues of the agency’s own making. Separately, the Commission brought an administrative action against manufacturers that refused our request to recall a product that would be covered under the proposed rule. One cannot help but wonder how the rulemaking will impact the administrative litigation—both as a matter of law and as a matter of fact.

These are all important and interesting questions for the Commission to grapple with. I am looking forward to hearing what the public thinks on Oct. 22.

CPSC Safety Academy in Seattle

Last year, the CPSC held its first Safety Academy here in Washington D.C. The agency-sponsored event featured panels of experts, academics, and stakeholders addressing a wide range of issues facing the agency, including flammable fabrics, the 6(b) process, and the testing rule. The event was webcast, and many of the presentations are still available online if you missed them.

The event provided the regulated community, experts, and consumer advocates the opportunity to both learn from and engage with the agency on the important issues the agency has been working on. Educating the public on what we do here at the CPSC is a critical function—especially with the flood of complex rules that have been issued recently–so I am very pleased that we have decided to hold another open educational forum. This year, the CPSC is holding another Safety Academy in Seattle, Washington on September 18, 2013.

I strongly urge anyone on the West Coast who is interested in CPSC issues to attend. If you’d like to participate on a panel, you can e-mail your information and a short abstract to business@cpsc.gov by June 10th.

Focusing on Consumer Protection

This week is National Consumer Protection Week, and I think more than ever we need to focus on how we can best protect consumers against unreasonable risks of harm. Though we have done an admirable job of that over the years (doing things like improving portable generators and improving crib safety), we need to zero in on our priorities, given our limited resources. The sequester cut CPSC’s budget, so we must be sure that we are laser-focused on our mission. We cannot afford to waste resources chasing secondary violations, paperwork slip-ups, and minor infractions. Although they may technically be violations, they often do not pose safety issues. We need to identify where and when there is the greatest risk of harm from a consumer product, and be there to protect the consumer from it.


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