Archive for the 'Consumer Product Safety' Category

Defining “Wooden-Headedness”

In The March of Folly, historian Barbara Tuchman writes:

Wooden-headedness, the source of self-deception, is a factor that plays a remarkable large role in government.  It consists of assessing a situation in terms of preconceived fixed notions while ignoring or rejecting any contrary signs.  It is acting according to wish while not allowing oneself to be deflected by the facts.

Late last week the CPSC Commissioners voted to write Ms. Tuchman’s definition of “wooden-headedness”  into the Code Le_avventure_di_Pinocchio-pag046of Federal Regulations by issuing a direct final rule to give long-awaited “relief” from the burden imposed by its third party testing rules as directed by Congress way back in 2011[1].

The Commission has been promising relief from its burdensome testing requirements but has been doing everything it can to avoid doing anything since 2011 when Congress first directed it to take action.  Now after four years of study and promises to Congress (even as recently as last month), the Commission has found [INSERT LOUD DRUM ROLL HERE] that toys made from unfinished and untreated wood from the trunks of trees do not have to be tested for the presence of seven heavy metals regulated by the toy standard.

The Commission’s action last week is justified by a contractor’s study which is itself a study in the precautionary principle run amuck.  The contractor was tasked with doing a literature search looking at the same natural materials (untreated wood, fibers such as wool, linen, cotton or silk, bamboo and beeswax among other things) which the Commission exempted from testing for lead back in 2009.  Yet only for trunk wood was the contractor able to report sufficient data to show no presence of the suspect heavy metals in concentrations that violated the toy standard.  For most of the other materials there was insufficient evidence reported to show the absence of violative concentrations of the heavy metals. The contractor, however, did find that a report that wool from sheep dipped in arsenical pesticides (which are no longer used) had high concentrations of arsenic as did wool from sheep grazing next to a gold smelting mine.  In other words, if the contractor, in doing its literature search, found a study documenting a problem, then the material was disqualified.  If the contractor could not find a study documenting a problem, the material was also disqualified on the basis of insufficient information.

Back in 2009, the agency staff was able to make rather more expansive determinations quite quickly and efficiently, without expensive contractor studies, and to my knowledge, public health and safety has not been threatened by this action.  The current agency action seeks to take the smallest, most ineffectual step possible and then point to a constrained reading of the statute and an inconclusive contractor study to justify inaction.

Congress told the agency to take action to reduce testing burdens or report back if statutory impediments required Congressional action.  The agency has done neither.  Instead, the Commission, on several recent occasions, has promised Congress that action on test burden reduction will be forthcoming.  One hopes that limiting testing exemptions to toys made from tree trunks is not what the Commissioners had in mind when those statements were made.  It is hard to believe that Congress will find this a satisfactory response either.

So if you use bamboo or perhaps linen or beeswax in crafting your toy, you are out of luck because there is no evidence these materials are unsafe.  For those small businesses out there who might make a toy from a tree limb or decorate the toy with bark or twigs, you are also out of luck!  And if you are looking for clarity, too bad.  As one of my friends in the small business community said when she heard about this, “Is a branch 12 inches in diameter a trunk? Do I need to ask the lumber yard if the wood came from a trunk? Will they even know? Will I need to have proof the wood came from a trunk?  It just comes across as comical.  Is there value in this determination?  I suppose, but for many it is just too little, way too late. Four years late to be exact.”

The fact is that public health is not impacted by toys that include components of natural materials—the agency’s experience with lead has shown that.  Indeed, the natural materials exemption is a very narrow one and hardly opens the flood gates to testing avoidance. One must ask why the agency is so adverse to finding a workable solution to reducing testing burdens.  Wooden-headedness brings about wooden thinking.

[1] Direct final rules are reserved for those rules that are noncontroversial, and usually deal with routine, narrow or non-substantive matters. They go into effect unless someone objects.  In this case the rule, and the testing relief it proffers, could not be more narrow.

Off On New Adventures!

Some might find it a surprising way to celebrate the start of the Independence Day weekend by announcing a new job.  Nevertheless, I wanted readers to know that after leaving the CPSC 18 months ago, I have decided to come out of “retirement” and have become affiliated with Olsson, Frank, Weeda, Terman & Matz, a Washington law firm with a regulatory, public policy and litigation practice. Since the firm includes not only exceptional lawyers and policy advisors, but also scientists, doctors and other technical professionals, it brings a special kind of creativity to problem solving that is unmatched in Washington. It is this creativity and “spunk” that convinced me OFW was the right place for me.

Since leaving CPSC, I have spent my time writing, speaking and working on interesting projects of my choosing dealing with regulatory policy and safety issues.  While I intend to continue these interests, my affiliation with OFW will bring another dimension to these activities.

I also intend to continue writing this blog.  Its purpose is to educate and to provide commentary—sometimes complementary and often critical—about what is happening at the agency from my unique perspective.  I try not to pull punches and my affiliation with OFW will not change that.

Measure Twice; Cut Once

A couple of years ago, I did an addition to my house.  Everyone who has done this knows the steps.  I sat down with an

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architect to discuss exactly what I wanted to accomplish with the project.   A rough design was done and then refined in a set of blueprints that was put out for bid.  Since my budget was limited, the plans had to be readjusted to fit both my needs and my resources before they could be finalized.  Only then did we go to the relevant regulatory bodies to seek the required permits and approvals to do the project.

I thought of this process last week while I listened to the CPSC Chairman and Commissioners describe their desire to greatly expand the agency’s import surveillance system at an oversight hearing before the Senate Commerce Committee.   In 2011, in response to Congressional direction, the agency initiated a pilot program to identify imports that violate safety standards.  The current pilot program subjects certain products from certain countries/suppliers to surveillance prior to import under a computer rule set that predicts the possibility of violations. In other words, the computer looks at what is coming in and, using the rule set, flags those products that should be further examined by CPSC personnel.  As a pilot, it has worked well.  The agency now seeks to extend the program to all imports under its jurisdiction.  Such a program will be expensive and the agency has asked Congress for a significantly increased appropriation to build out the program and the authority to impose user fees on importers as a way to fund the program on a continuing basis.

The agency has a great deal of regulatory housekeeping to do before such a system is feasible.  The program will only work if the agency has the statutorily-required certificates of compliance from importers available in an electronic form.  These electronic certificates will provide the basic information to allow both the CPSC and its sister agency, Customs, to make initial judgments about compliance.  In 2013, the agency proposed to update its rules governing the creation and filing of e-certificates (at 16 C.F.R. §1110).  Unfortunately, the agency, in a good example of “wants” exceeding “needs”, proposed a rule that goes well beyond what is required by the statute, and, if finalized, would require importers to redesign reporting systems and impose many new and costly requirements.  I looked at the cost of the proposed system when I was a Commissioner and using agency estimates, determined that it would cost annually over $400 million – that is almost $1/2 billion—for importers to compile the paperwork to document tests and generate the certificates that reflect those tests. That is a lot of money for paper!

This rule has been one of the most controversial in the history of the agency.  Many comments have been filed and most of them have been critical of the proposed rule.  The agency now proposes to establish a pilot program to see if the rule will work.  Unfortunately, rather than establishing a pilot based on the learning found in the comments to the rule, the pilot will look much like the proposed rule.  And because it is so tied to the expanded import surveillance system, this rule remains on the agency’s near-term agenda for completion.

At the hearing last week, several commissioners discussed the agency’s import surveillance activities.  Chairman Kaye argued that seeking authority to expand its import surveillance activities is consistent both with Congressional desires expressed in the CPSIA and with the Presidential direction for closer coordination among agencies that handle imports.  However, the ever-thoughtful Commissioner Beurkle pointed out that the agency has yet to undertake a requirements analysis to identify the capabilities of an expanded system.  Both she and Commissioner Mohorovic expressed grave concerns about the status and substance of the agency’s proposed rule on electronic certificates with Commissioner Mohorovic suggesting that the agency was greatly underestimating the number of certificates that it would have to process. He also argued that the agency has yet to demonstrate how the rule would improve targeting of violators and suggested that a “trusted trader” program should be part of any final program.    Commissioner Beurkle suggested that an “incremental” approach to building out the system was a more prudent one than what the agency proposed.

While the Senate Committee did not dwell on the subject of user fees, there were differences of opinion both on the Committee and among the commissioners.  Again, Chairman Kaye voiced strong support for the notion of user fees to fund import surveillance activities while Commissioner Beurkle expressed concerns about the wisdom and the constitutionality of such a system.

It seems pretty apparent that the agency has much more planning to do before it should get the permits to build out this addition to its regulatory house.  The fact that so much of the planning and preparatory work that needs to proceed such a program is still “under construction” should give policy makers pause.  And the issue of how to fund the program does raise many policy issues.  User fees have a certain attractiveness and have been used before.  But the policy and legal implications of such an option should be more fully explored.  In this regard, last month the George Washington University Regulatory Studies Center published a study looking at the on-budget cost of regulations.  Among other things the study found that “in general, agencies that are at least partially funded by fees on the entities they regulate continue to grow at a faster rate than those that depend on appropriations from general funding” and that “agencies with independent funding authority will have significant increases in their outlays over the two-year 2015-2016 period.”  While this may or may not be a bad or a good result, it is something that should be understood before Congress, the agency and its stakeholders go down this road.

Planning is important.  It appears that the agency needs to work on its blueprint before it jumps into this new undertaking, not matter how important.

Penalty Factors Ought to Mean Something

For some time the product safety bar has been concerned about the apparently arbitrary manner in which penalties are assessed at the CPSC.  In 2010 the Commission adopted a rule that set forth the factors that must be considered in determining how penalties are assessed.  Unfortunately, since then, the agency has given only the slightest head-nod to these factors and has not applied them in any kind of rigorous, disciplined, or transparent manner.  Yet such transparency is important in helping the regulated community better understand how the agency defines the concept of “substantial product hazard” which is at the center of most penalty matters.

The problem with the Commission’s approach is well-illustrated by the $3.4 million settlement recently negotiated with Office Depot.  This case involved 1.4 million office chairs sold by the retailer over a ten year period.  Over those ten years, the company received 153 incident reports with 25 reported injuries only some of which required medical attention.  Commissioner Mohorovic has written a thoughtful statement in which he does apply the Commission’s penalty factors to this case.  His conclusion is that had the penalty factors actually been properly applied, the resulting penalty should have been much lower.  His statement is well worth reading.

The current chairman and former acting chairman have made public statements that penalties should, as a matter of course, increase across the board to reflect their view of Congressional intent in increasing the agency’s penalty authorities.  If it is going to be agency policy to push for increased penalties, then the agency owes it to the public to have a more transparent process for imposing penalties.  As Commission Mohorovic notes, currently there is little coherence in the agency’s approach to penalties. As a consequence, parties before the agency are left to struggle with an opaque process where the rules are written after the fact.  Such a result is bad public policy.

The Real World Speaks; The Government Does Not Hear

Last week I traveled to St. Louis University to speak to students attending the school’s Product Safety Managementst-louis-cityscape Course.  This executive education course is presented by the Center for Supply Chain Management Studies at the Cook School of Business at the University and is unique in presenting a concentrated focus on product safety-related issues.  I was asked to discuss how the CPSC is organized and how agency policy and decisions get made and I discussed my perspectives, as a former commissioner, on the agency’s seemingly more contentious and less collaborative approach to product safety.

The class was made up of professionals from small, medium and global businesses with backgrounds that included law, engineering, business and science. The joy of opportunities like this is not only having several hours with engaged and very smart professionals in the classroom, but also having time outside of class to interact informally.  While I hope I imparted knowledge, I know that I learned a great deal.

Boiling it down to a sentence, here was my message to the class:  The CPSC is moving to more aggressive and expansive regulations and more aggressive and punitive enforcement.  For companies that want to stay out of the agency’s sights, they should consider, among other things,

  • implementing strategies to update and fine-tune their compliance programs;
  • making sure that they have appropriate written procedures for addressing safety complaints and can demonstrate those procedures are followed;
  • having and being able to show good control over their supply chain;
  • keeping good records to show a testing program, test results and compliance with applicable regulations; and
  • registering for the Business Portal of the Public Database as one device to know what some consumers are saying about their products.

Of course, safety must always be a core value of the company, and at all levels, including senior management.  Unless that is true, none of these efforts will be truly effective in minimizing a company’s exposure.

I also learned a great deal from the students.  One message especially resonated since it came from several different class members from different types of companies.  These students described the importance their companies placed on regulatory compliance in the face of very constrained resources.  They described the challenges of complying with different regulatory approaches to addressing the same risks, on local, state, national and international levels.  They described different testing methods to measuring compliance—tests mandated by regulatory bodies in the U.S and abroad and by cautious retail customers who want to assure that the CPSC does not appear on their doorstep and have the market power to make those tests happen—with all these tests differing one from the other.  The complaint I heard was that there is an expectation of compliance with no realistic understanding of the level of resource needed for full compliance, given the complexity of the myriad rules that have now been issued.  Nor is there any effort, or feeling of responsibility, on the part of the government to simplify those rules to make them less burdensome so that compliance can be more realistically achieved.

Bottom line from my Midwest journey:  The real world speaks but the government does not hear.

Phthalates NPR: A No-Win for CPSC

Assuming that the Commission does not vote to again extend it, the period for filing comments on its proposal to permanently ban certain phthalates closes in a few days.  At that point the monkey will be really on the back of the agency and none of its choices are very good.

Because the way the statute was written, the Chronic Hazard Advisory Panel (CHAP) that Congress directed the agency establish to study the health effects of phthalates, without strong direction from the management of the agency, easily could move into policy issues and this is what has happened with its recommendations.  If the agency holds with the recommendations of the CHAP, it faces sure, and probably successful, litigation at the end of the process.  If it tries to walk back the CHAP recommendations, it gets accused of disregarding “scientific” recommendations protecting children. A real no-win for the agency.

I have written before in this blog about the serious regulatory policy issues that the phthalates rulemaking raises.  For those who are interested in this issue and those who are concerned about the use of cumulative risk assessments, I wanted to bring to your attention an article I authored that appeared today in The Hill Congress Blog publication.  You can find it here.

Should Congress decide to do oversight of the CPSC, there are a number of issues that need examining.  This issue should be added to the list.

Note to CPSC: You Really Dropped a Stitch Here!

I am a knitter.  Knitting teaches patience and is a great way to pass time on an airplane.  While traveling, I missed a recent CPSC recall and am thankful to my friendclip-art-knitting-981445 Lenore Skenazy, the author of the blog Free Range Kids, for bringing to my attention important information about a silent killer—yarn.  Since she said it better than I could, the following is from her blog post:

Gracious me! This brand of yarn can unravel! Have you ever heard of such a thing? It’s just too scary! How irresponsible can a yarn maker be? No wonder the Consumer Product Safety Commission just issued this dire warning:

Name of Product: Bernat Tizzy Yarn

Hazard: In finished knit or crochet items, the yarn can unravel or snag and form a loop, posing an entanglement hazard to young children.

Incidents/Injuries: Bernat has received two reports of children becoming entangled from unraveling or snagging yarn blankets. No injuries have been reported.

Remedy: Consumers should immediately stop using the yarn or finished yarn projects, keep them out of the reach of young children, and contact Bernat for a full refund.

Remember! Children are only safe near items that can never unravel or make a loop. Kindly avoid all necklaces, ponytails, jumbo rubber bands, snakes, shoelaces, licorice whips, octopi, thread, phone cords, scarves, kites, jump ropes, taffy (long form), fishing line, string cheese, and, of course, marionettes. – L.

What is the agency thinking?  While unraveling yarn may be a quality problem (for the company to address with unhappy customers), turning a quality problem into a safety issue takes the agency way outside its mandate.

In an earlier post I addressed my concern that silly recalls can serve to make consumers stop listening.  This certainly qualifies as a silly recall. Consumer safety is not advanced by such a result.  However, if the agency persists in pushing its mandate so that product quality problems are viewed as safety issues warranting a recall, what unravels is any predictable definition of a safety hazard and then safety becomes what the agency says it is at any given time. Now that is a snag folks should be worried about.


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