Archive for the 'Public Database' Category



“Due Process is a flexible concept. . .” Huh?!

When our agency is considering rules, we are required by the Administrative Procedure Act to give the public notice and opportunity to comment. If we change fundamentally the ideas we put out for comment, due process requires us to re-propose the rule so the public can comment on these major changes.

With respect to the public database vote last week, the majority did not take this approach. Instead the majority simply dismissed due process with the hollow statement, in the preamble to the rule, that “due process is a flexible concept.” Brushed aside were facts: the definitions of who can submit complaints disregarded the public comments we had received and fundamentally changed a core definition; the posting of materially inaccurate information was fundamentally changed from what had been proposed. No comment was sought on these major changes.

When it comes to due process, that’s not flexibility. That’s inexcusability. It’s regulation by surprise.

Here’s Your Turkey, Early

Unfortunately, today the Commission voted to approve a highly flawed final rule to establish a public database of consumer complaints. While, on its face, this seems like a worthy project, once you get into the details of what will and will not be posted, the problems with the majority’s proposal are like ingredients in a bad holiday recipe. In addition, the lack of any effort by the majority to reach out and come to a consensus on the issues Commissioner Northup and I raised in our substitute proposal is glaring.

Instead of limiting the people who can post a complaint to those with first-hand information about the incident, anyone can post a complaint–trial lawyers trolling for clients, unscrupulous competitors looking to damage a business or its reputation, or the gossiping neighbor down the street who heard the story “through the grapevine.”

Instead of requiring submitters to at least put the location of the incident or the model number of the product, complaints could be filled with only sketchy information that is of little use to anyone.

Instead of verifying that the information posted to the database is correct, CPSC is under no obligation to confirm the accuracy of information submitted, even when the accuracy is challenged. And while it is clear the CPSC will not investigate most of these claims, when we do, we are not planning on telling consumers the results. It appears once the complaint’s there—accurate or not, it’s there indefinitely.

We had the chance to make the database a helpful tool for consumers, but instead it will potentially become just another sink hole for complaints, but with the apparent ‘seal of approval’ that comes from being on a federal government website. We had the opportunity to get it right but instead have chosen to spend taxpayers dollars (approximately $29 million of them) to construct something that could well mislead consumers and undermine our safety mission. Consumer safety is not advanced by such a result.

This expensive bird is burnt, dried out and not fit for serving the consumer.

Here’s my official statement  on the issue.

A Wrong Way and A Right Way—Which Will We Choose?

On November 17, the agency will vote on the rule finalizing the blueprint for the public database of consumer complaints mandated by the CPSIA.

Everyone seems to agree that the purpose of the database is to assist consumers in understanding risks, and in making well-informed choices about products they buy and use.  Indeed, in a recent article, an advocate for the database argued that folks should stop fighting about it and that “time would be better spent in ensuring it is as accurate and useful as possible.”  At last, something we can all agree on! 

My colleague, Commissioner Northup, and I agree that the database will be a useful tool for consumers only if it is accurate.  We have spent hours debating this point with the other commissioners.  On November 17, we will once again make the point that the database will not serve its purpose if it is a “garbage in/garbage out” grab bag of unsubstantiated complaints from any source. 

With respect to the database, there is a right way to do it and a wrong way to do it.  Unfortunately, so far a majority of my colleagues have not chosen the right way.  This is unfortunate because the approach insisted upon by the majority will not allow the database to achieve its objective.  While there are a number of objectionable provisions in the draft final rule, here are two issues that are especially problematic:

  • Who can submit complaints—Congress provided us with a list of those whose complaints should go up on the public database.  We have contorted the plain language Congress used into definitions that have no meaning.  For example, Congress told us to accept complaints from “consumers.”  The majority has determined that since everyone consumes something, we need to accept complaints from everyone—no need for any relationship to the product, harm or incident.  Think plaintiff lawyers trolling for clients or unscrupulous competitors wishing to harm a product’s reputation. 
  • Treatment of inaccurate information—Consumers are not served, and could be harmed, by a database with inaccurate information.  While Congress seemed to suggest a process for correcting inaccuracies, the rule has been written so that the agency is under no obligation to address such misinformation.  There is a real chance this could be a “post it and forget it” exercise.    

Since Congress has been clear in its direction to establish a public database, let’s try to do it right.  Commissioner Northup and I have redrafted the proposed rule to try to address the many issues that were raised in the comments the agency received.  If you click here, you will be directed to that redrafted rule.  Time is of the essence since the vote is in a little more than a week.  Please quickly send back your reaction to this draft. Help us get it right.  We intend to offer it as a substitute when the commission takes up this matter on November 17.  Please send me your reaction to the proposal either post it here on the blog or email it to me at Commissioner_Nord@cpsc.gov

Gaveling Down Public Discussion of Small Business

Today the CPSC was briefed by staff about the complex public database required by the CPSIA.  This was the opportunity for Commissioners to ask staff questions in preparation for voting on the database final rule.  A number of very substantive questions were raised by Commissioners, both from the standpoint of what the proposed rule means and how the project will work. A number of other issues could have been raised.  Unfortunately for the public, the majority gaveled the meeting to a close before Commissioners had the opportunity to complete their questions. 

For example, I had several questions about the regulatory flexibility analysis that states the database will have no significant impact on small business. I strongly disagree with this analysis and wanted all of us to learn more about why the staff came out where they did. The majority did not allow me to ask those questions.  Apparently, we will be voting on this proposal without the benefit of a public discussion with staff of major issues. What a strange way to encourage transparency!  You should watch the tape, from start to finish, since we touched upon many issues that fundamentally affect how this database will operate, how good the information will be that is made available to the consumer, how dramatic the effect may be on manufacturers, large and small, and finally, how the majority can close off public discussion.

Loss of Faith in Regulators

This past weekend I had the opportunity to travel to High Point, North Carolina to meet with furniture manufacturers during the industry’s biannual trade show.  I was blown away by the high level of creativity and workmanship I saw in the various furniture showrooms.  They were blown away by the requirements that the CPSC is imposing on them. 

The message I heard over and over was that the requirements we are imposing, along with the growing list of other federal and state regulatory requirements they are facing, is becoming an overwhelming burden that is pushing a once-proud American industry off-shore.  Several manufacturers that I visited described to me in detail the safety and quality control procedures they have in place–procedures that are working well–and were very critical of our insistence that they change what is working.  They were especially angry that changes are being required when there is no demonstrable evidence that enhanced safety will result but there is demonstrable evidence of the significant costs that will be incurred.  One furniture company CEO made the point that, in business, costs must be measured against the benefits that will come from additional expenditures.  He rightly asked why this principle did not apply to government. 

While I expected to hear criticism (and did I!) about the testing requirements we are imposing, I was surprised to hear the strong outrage that was leveled against our proposal to create a public database.  I heard that the agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company.  I heard that the agency has an unrealistic view of how and whether a company can reasonably respond to database complaints. I heard story after story about how the database could be used in a pernicious manner by unscrupulous competitors, trial lawyers and advocates for special causes who could salt it with unfounded complaints.  I heard that the agency is ignoring these concerns and the sense of trust that you can get a fair shake at the CPSC has been seriously eroded. 

We should be working cooperatively with those who make and sell products to assure that safety is built into their products without costly, unproductive regulations.  “Loss of faith in government regulations to further safety without unnecessary costs”—that’s an unacceptable report I bring back from this meeting. It’s very troubling and could be avoided with some common sense.

Deadlines Looming

Over the past few months the agency has been busy issuing for public comment proposed rules required by CPSIA. Consumer safety is unquestionably our goal at the CPSC, however, some of these proposals are questionable in how consumer safety might be achieved, and unclear at what expense. Some of these proposals are aimed at specific products, some are administrative in nature and some are very significant and will have a profound impact, for better or worse, on the cost and availability of consumer products.  It is so important that those who will be affected by these proposed rules let us know how they will impact you.  Your comments can indeed shape the final product.  In past blogs, I have discussed the importance of getting comments from those affected by our actions.  Because the public comment period for many of these proposals is closing over the upcoming summer months, I thought it would be useful to list some of them and the end date for comments.  So here goes:

Interpretation of Children’s Product — June 21, 2010

Publicly Available Consumer Complaint Database — July 23, 2010

Testing Rules for Component Parts — August 3, 2010

Testing and Labeling Pertaining to Product Certification (15 Month Rule) — August 3, 2010

We also have out for comment several proposed rules dealing with specific products such as toddler bed, bassinets, and drawstrings on children’s outwear, among others. 

While these proposed rules are important, I don’t have to remind you they impose a real impact on those who make consumer products.  Since the agency has abandoned cost/ benefit analysis of these rules, we will not have information on the real world impact of our rules – unless you tell us.

Two Sides of the Same Coin

In a recent podcast for the Federalist Society, I discussed with my fellow commissioner Bob Adler our differing views on the CPSIA, as well as how we reached those conclusions.  I welcome these kinds of opportunities to openly discuss the consequences of the CPSIA and possible solutions for the future.  Everyone agrees that the CPSIA needs some fixing.  Let’s hope that Congress steps up to the plate.  Anyway, have a listen, and give me some feedback on what you think. 

Share your thoughts, post a comment, and engage in this important debate.

Data…Data…Data…what’s the real story?

This week the Commission voted to publish for comment a seriously flawed proposal to create a public database of consumer complaints. My colleague, Commissioner Northup, and I tried to make the database a more useful tool for consumers, but ran into partisan 3-2 votes.  This means this proposal seriously falls short of serving the interests of the public–both consumers and product sellers. Too bad for the public that the majority did not agree to inject some practical, common sense requirements into the rule.

  • The proposed database will allow virtually any information from anyone–not necessarily someone who used the product or was hurt, but even people who have only secondhand or thirdhand knowledge of an event.  This includes information from advocacy groups, lawyers and competitors who may have their own reasons to “salt” the database.
  • The requirements for a report to be posted are so minimal that people who read about an incident in the newspaper can submit a report for posting.
  • We tried to require reports to have basic information such as the approximate date and location of the incident.  How can a manufacturer investigate an incident without that? No go with the majority.
  • While every effort will be made to prevent the disclosure of personally identifiable information, the majority rejected giving parents the ability to take down information posted by third parties about incidents involving their family. Where is the sense of privacy?
  • A product report will be sent to the manufacturer, however it is up to the manufacturer to comment on its accuracy.  If the manufacturer comments that the report is materially inaccurate, it is likely staff will post the comments with the report, rather than take the report down.  Staff is not required to investigate the report,–only to validate that the correct boxes were checked.
  • While it is stated that staff will review the data, it will be very brief. Complaints and comments will not necessarily be investigated. Staff investigations will depend on resources. Answer to our request for a resource estimate? Not yet been done.
  • And, in a real stretch, the proposed rule states it will have no impact on small business since those companies probably will not be subject of very many complaints and, besides, it would only take a couple of hours for them to deal with complaints (this is based on unverified, sketchy information).  Never mind that one inaccurate report that goes viral on the internet can cause irreparable injury to a small business.

I truly believe we could and should create a useful, searchable data site for consumers to see what others have said about incidents with products that could cause injury.  But to make the database helpful for consumers, we need to capture the best facts about an incident. Thanks to this proposal, chances will be hit or miss at best.

Help change those chances by commenting on this document. Speak up in this debate, and help us get a unanimous vote for the consumer and give you a database you want to have and that you can really use.

Small Biz: Don’t Worry, Be Happy

CPSC staff has determined that the publicly available database of consumer complaints required by CPSIA will have little or no economic impact on small businesses.

This finding was included in a notice of proposed rulemaking (NPR) which was discussed by the Commission last week and on which we will be voting Thursday, April 21.  The discussion of this issue will be webcast (at 9 am EDT) on the CPSC website.  

The database is scheduled to be operational in March 2011, and will provide a readily searchable format for people to access reports of harm caused by consumer products submitted by consumers, plaintiffs’ attorneys, advocacy organizations and trade competitors, among others on a rather expansive list. We are planning a national education effort to encourage the public to report incidents of harm caused by consumer products. While we do not know how many reports we will get, it could be quite significant. 

Though the staff will review each submittal before posting, staff will not investigate each incident for accuracy.  Instead, manufacturers will be given 10 days to comment on the accuracy of reports identifying their products.  It is the responsibility of the manufacturer to provide proof of any inaccuracy.  I can see where inaccurate information may be posted and seen by consumers for an indefinite period of time before a correction is made, if a correction is ever made at all.  This would be a great disservice to consumers and could adversely affect the sales and use of a product.   

 Here is what the proposed rule says about how the data base will impact small businesses:

 because of their smaller sales volumes, small manufacturers are less likely to experience any impacts.  And, even if a small firm chooses to respond to an incident report, the amount of time to do so would not likely be more than a few hours . . .

Note that reputational harm due to an inaccurate report is not considered an adverse impact on business. 

I am not comfortable with the staff’s assertion that the new public database will not have an economic impact on small entities and discussed this point during our public briefing last Wednesday.  However, I’m not the expert; you are.

  •  Do you really think because your sales volumes are smaller, it is less likely that your products will find their way into this database? 
  • If someone files a complaint, it will only take a few hours to respond (and deal with the ensuing investigation by staff)? 

If you disagree with our staff that taking a few hours out of your business day to respond to inaccurate reports is of no consequence, then you need to let us know that.

When the Notice of Proposed Rule for the Publicly Available Consumer Product Safety Information Database is printed in the Federal Register it will be posted on CPSC’s website and you will have an opportunity to comment.  Let us know what you think!


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