Remembering John Byington

It was with real sorrow that I learned of the passing earlier this month of S. John Byington, the former chairman of the CPSC.  Like many others in the product safety world, I counted John as a true friend who was always ready to provide valued advice and counsel.

A pharmacist and a lawyer by training, John brought a respect for both law and science to the agency.  As chairman from 1976 through 1978, during the early years of the agency when it was easy to demagogue issues, he insisted that the agency have a strong basis in both science and the law before tackling the important issues before it.

John was a man of many interests.  After leaving the CPSC, his career included not only traditional law practice but also a number of entrepreneurial pursuits as varied as starting a microbrewery and a leading legal recruiting firm, LegalLeaders.  I had lunch with John earlier this year and, as always, marveled at his enthusiasm for life and his willingness to reach out with friendship and caring to those around him.  He made important contributions to product safety and will be missed.

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A Few More Bites at the Apple

Next week the CPSC Commissioners will hold a hearing on whether to grant a petition to ban a wide range of consumer products containing organohalogen flame retardants (OFRs).  The petition, filed in 2015, is overly board and seeks to treat in the same way a wide class of chemicals that differ one from another. It seeks to ban a broad range of consumer products with OFRs that vary in use and exposure patterns. It seeks a ban in spite of the fact that the scientific data to justify this action is, charitably, sketchy at best. For these and many other reasons, the petition, on its face, presents sufficient reason for denial.  (See here.)

Nevertheless, the agency held a hearing on the petition in late 2015, put it out for public comment, and has devoted a considerable amount of staff resource to considering the issues presented by the petition.  After a thorough examination of the data in the petition, the hearing record and the public comments, in May the agency staff recommended that the petition be denied for a variety of reasons.  In spite of all this, the Commissioners apparently do not believe that they have sufficient information to make up their minds on the matter and so are having yet another hearing.

It is not clear what this hearing is intended to accomplish, other than to give the petitioners another chance to explain why the agency staff was in error in its conclusions. Presumably some Commissioners will offer helpful hints on how to recast the petition to avoid the shortcomings identified.  Perhaps there will be some conversation about why the petitioners brought the issue to the CPSC when it is more properly before the EPA.  No doubt some on the dais will decry the statutory requirement to balance risks with costs, a requirement the petitioners cannot come close to meeting.

While the hearing will be interesting, one wonders why the agency has devoted such a significant level of resource to this activity.  If the Commissioners vote to overrule their staff and grant the petition, then the level of activity required for rulemaking would have the agency busy for years to come.  If the Commissioners agree with the staff and vote to deny the petition, then what was the point of the hearing?  Among other things, it certainly raises questions about the stewardship of public resources.

 

Saw Hearing Shows Need to Sharpen CPSC Regulatory Tools

 

Last week the CPSC held a hearing to address its pending proposed rule to require active injury mitigation (“AIM”) technology on table saws.  In recent years, too often CPSC hearings have devolved into little more than theater, obviously intended to generate press but little understanding of the complex issues the agency is so often called upon to decide. Last week’s hearing was different.  For much of the hearing, the Commissioners were actually discussing the complex regulatory issues the NPR presents and doing it in a knowledgeable, engaged and interested manner.

To recap, the proposed rule would require that all table saws use the AIM technology to help prevent the 33,000 injuries that occur each year from use of these saws. Such technology can detect human contact with the saw blade and stop the saw before that contact occurs.  However, the only available technology that meets the standard is owned, patented and being sold by one table saw producer, a company called Saw Stop.  Because Saw Stop has so many patents, the agency recognizes that it is unlikely that other technology that would not violate those patents could be developed to meet the proposed standard. While the technology owner states that he is willing to license it to the rest of the industry, he is unwilling to enter into a legally-enforceable commitment to do so either with a voluntary standards organization or before a mandatory rule is finalized.  By mandating AIM, the agency will both create a monopoly and significantly increase the price of the saws.  The agency recognizes that both will occur.

The agency has to grapple with a number of important issues.  Obviously, the AIM technology would reduce the number of serious injuries associated with the product and addressing those injuries is a priority for the agency.  However, the technology is currently in the marketplace and available to consumers who wish to pay for it. Is it the proper government role to require people to buy technology that they have determined they do not wish to pay for?  Should the CPSC, a safety agency, be concerned about the market distortions its rules may bring about?  Everyone, including the CPSC, anticipates that the rule will result in significant price increases. Will those increases create disincentives for consumers to buy new  AIM-equipped saws, with the result that old saws will stay in use longer than expected and injuries will increase, at least in the short run? Has the agency’s analysis of the costs and benefits of the rule correctly considered these issues?

These are all serious questions and it is good that the agency is giving them serious thought.  The agency has now received comments from the George Washington University Regulatory Studies Center. These comments to the proposed rule look at the way the agency did its required cost-benefit analysis and finds that there is room for improvement.  The methodology the agency uses for such analyses has not changed in years; nor has it received much critical review.  Since both analyzing regulatory costs and benefits and regulating in the least burdensome way that effectively addresses safety concerns are mandated by the law, this analysis should be a more important regulatory tool than it has been in practice.

The GW comments show sufficient weaknesses in the analysis to raise questions about the validity of the conclusions the agency reaches.  For example, the agency may be overstating the benefits of the rule given the lack of detail in the injury incident data the agency relies on.  (The shortcoming in the data has also been recognized by the Commissioners who have directed the staff to develop more data.)  The agency’s estimates of the societal costs are also predicated on suspect data and open to challenge, as the report points out. The GW study not only finds fault with the agency’s analysis of potential benefits of the proposed rule but also its disregard for the negative impact market distortions may have on consumers.  It concludes that if the “CPSC finalizes these standards it is more likely to produce a market failure by creating a monopoly than to address an existing one.”

Given the concerns raised by the GW comments and by others, one can rightly ask whether it is good policy for the agency to create a monopoly on the basis of flawed data.  And even if the data is good, one still must ask whether creating a monopoly is appropriate government regulatory behavior. Considering the serious and important policy questions this proposed rule presents, the Commissioners are right to give it a more thorough evaluation than what has occurred to date.

 

 

 

 

 

Tell CPSC What You Think

One of the very positive hallmarks of the new leadership at the CPSC is a desire to hear from all interested stakeholders on how to more effectively push forward the agency’s safety mission. The agency has offered several opportunities for input and for those of us who share that goal, these opportunities should not be ignored.

First, the agency will be conducting a workshop on ways to improve the recall process, including the effectiveness of recalls.  Recall effectiveness is a perennial topic of conversation at the agency so it is gratifying that the agency is again looking at this topic, but hopefully from a new perspective.  Both as a Commissioner and now, in private law practice, I often hear complaints about the opaqueness of the process. Participation in the workshop offers an opportunity to give real suggestions on how to make the recall process work better.  The workshop will be held on July 26, 2017 at the agency headquarters in Bethesda.  Those interested in participating must sign up with the agency no later than July 3.  Here is more information about the workshop.

Second, the agency is requesting comments on ways to reduce the regulatory burden imposed by agency rules in ways that do not diminish safety.  This effort is especially welcome since many of the regulations issued by the agency over the past eight years did not consider ways to accomplish safety goals in less burdensome ways.  When Congress told the agency to try to find ways to reduce the burden of testing, the agency went through a fantasy effort to comply and, not surprisingly, came up with very little.  Indeed, about the best it could do was exempt from testing toys made entirely from untreated wood from the trunks of trees (but not the branches—who knows what could be in branches!).  (See here.)

Reducing unnecessary regulatory burden is important since this engenders respect and support for the agency. Rules that are outdated, overly complex, or impose requirements without regard to real and measurable safety results should be identified and either changed or repealed.  The agency’s effort to collect information on burdens imposed by its regulations is a welcome first step in this process.

 

Fighting the Magnet Wars

 

This morning I watched the oral arguments before the CPSC in the staff appeal of the ALJ’s decision in the Zen Magnets case.  I felt as if I was watching World War One trench warfare in modern dress.  And like trench warfare where the combatants refuse to give an inch, insisting on holding their positions, what we saw this morning was both wasteful and futile, made worse by a predetermined outcome.

To recap, this morning’s exercise was the latest in the long running battle between the CPSC and Zen Magnets which sells small rare earth magnets (“SREMs”).  The agency argues that the magnets are defective because small children can ingest them with resulting severe injuries.  In addition, the agency argues that the magnets are “toys” and violate the toy safety standard which prescribes how powerful magnets used in toys can be.  The agency brought an administrative action to recall the magnets but the administrative law judge who heard the case did not buy the CPSC’s arguments. Instead, he found that the magnets were not defective when accompanied with proper warnings and age restrictions and that the toy standard does not apply to such magnets. The agency staff does not accept this determination and instead appealed it to the Commission—the same body that voted to bring the administrative action in the first place.  I have not found even one person who believes that a majority of the Commissioners will not vote to overturn the ALJ’s decision and order a recall.  At that point, the order will be final agency action and ripe for judicial review.

The ALJ’s decision is not the only skirmish on this subject that the agency has lost.  At the end of last year, the Tenth Circuit U.S. Court of Appeals overturned a federal safety standard issued by the Commission which effectively banned the sale of SREMs by restricting the permissible strength and size of the magnets. The court found that the agency failed to properly address the degree of the risk posed by the product and also the utility of the product.  As a result of these shortcomings, the court overturned the rule. A majority of the Commissioners have now voted to re-propose the rule to correct the deficiencies identified by the court—in other words, beef up the record but still ban the product.

Today’s hearing covered a lot of ground.  For example, even though the agency put incident data into the administrative record, the staff sidestepped shortcomings found in the data (since the incidents could not be attributed to Zen), indicating that no injuries or incidents are needed to support a defect finding.  There was a great deal of discussion about the role of consumer misuse, and the adequacy of warnings and labels.  The Commission asked about the applicability of the toy standard to a general use product

While this all may be interesting to students of martial arts or administrative law, what should be of concern is that consumer safety has gotten lost in these protracted battles—and this must be laid at the doorstep of the agency.  Putting Zen Magnets out of business—which seems to be the objective of the exercise—will not stop SREMs from getting into the hands of consumers.  By shutting down the remaining U.S. company that has aggressive warnings and marketing practices that minimize children’s exposure to the product, the agency leaves the field open to the many other companies, based outside the U.S., that are now selling the product without warnings—and without any interference from the CPSC.

If the agency had spent the resources that it has devoted to this case to looking at what is now going on in the market, rather than seeking to stop the leading proponent of safe and responsible magnet use and who is seeking to bring better safety awareness to the industry, it would be fulfilling its safety mission.  If the agency had accepted the many offers that have been made to educate the public on magnet safety, it would be fulfilling its safety mission.  Instead, it just feels like the agency is fighting a grudge match—what a waste!

The futility of the agency’s position is also maddening.  The magnet recalls that have been done resulted in a dismal return rate.  In other words, the public likes the product—not just because it is very cool but also because it has high utility as an educational, creative and artistic product. While the agency discounts these uses, the public does not.  What the agency has not done and refuses to do is consider whether there are any ways to reconfigure the packaging, beef up the warnings, put in place marketing restrictions, and engage in education efforts so that the public can have access to the product with safety considerations part of the equation. It has done this with other products that present much greater risks to children—button batteries, for example. However, this would require the agency to get out of the trenches and this it refuses to do.  So the magnet wars continue into the future and real consumer safety is the main casualty.

 

 

 

 

Regulatory Tools Are Only As Good As The Craftsmen Who Use Them

There has been a great deal of discussion, and in some circles much hand-wringing, measure twiceabout President Trump’s regulatory reform initiatives and how they will impact independent agencies like the CPSC. The Office of Information and Regulatory Affairs (OIRA) within OMB is a key player in the debate since OIRA reviews and can influence changes in the significant regulations coming out of cabinet agencies. Whether OIRA should have that same authority over rules issued by independent agencies is the subject of “hot” debate in administrative law circles. Neomi Rao, a law professor from George Mason University, is the President’s pick to lead OIRA. Professor Rao has made known her views that OIRA should have greater control over independent agencies.

This coming week, the CPSC is about to hand those who wish to see greater control and oversight of independent agencies by OIRA at major argument to use in that debate. The CPSC is scheduled to vote on whether to issue a notice of proposed rulemaking (NPR) to require that all table saws (including bench saws, contractor saws and cabinet saws) have what is known as “active injury mitigation (AIM) systems” – that is, saws should be able to sense when a user’s finger is coming close to the blade and automatically shut itself off, preventing injury. While superficially this may sound like a good idea, and, at the end of the day, perhaps may even be one, there are a number of reasons why the agency’s actions to start the last stage of rulemaking to require this technology should draw the attention of OIRA.

First, this rule will be a major rule—the type that OIRA usually examines. The CPSC estimates table saw injuries costs the U.S. economy $4 billion annually. It estimates that costs of the rule to manufacturers will be between $170 million and $345 million annually. The CPSC issues very few major rules so both the benefits and the costs the agency proposes are eye-popping.

Second, the AIM technology is patented by an inventor who is now marketing table saws equipped with it. His network of patents is quite extensive and he recently successfully challenged the only other company that had tried to develop a version of this technology. He has stated his willingness to license the technology to the industry should the CPSC mandate it, and the agency estimates that this will result in approximately $35 million coming his way each year in annual licensing fees. The CPSC staff, by its own admission, does not know how extensive his patent network may be and, hence, does not know if it is possible to develop AIM technology without infringing on his patents.

Third, and most important, the agency has not done its homework properly and therefore, issuing an NPR is premature. In 2007 the Commission directed agency staff to study the types and severity of injury associated with types of table saws. In addition to the ’07-’08 study, in 2014, the agency staff looked at injuries reported directly to the agency. As was discussed extensively at its briefing last month, both of these studies are seriously and critically flawed and would not support the rule, if the Commission were to issue it. So the agency is now proposing a rule and asking for public comment even though it does not know such basic information as what type of saw causes injury or whether certain saws can be eliminated from the requirement of the proposed rule. The agency has no information on injury patterns from different types of saws and has little information on whether new safeguards on saws are being used or are working.

The agency proposes to close this embarrassing data gap by doing a study throughout 2017 to develop the missing information, even while it has the proposed rule out for public comment. However, if it proposes a rule and asks the public for comment without providing this vital data, it defeats the purpose of public comment. It may well need to seek further comment or risk a successful court challenge.

It is curious why a majority of the commissioners are so eager to advance a proposal that is missing critical information to make the public comment period useful and that would allow both the agency and the public to better assess the competing issues the rule presents. It suggests that the real purpose of the 2017 study is merely to augment an administrative record that is currently too weak to support the proposed rule and not to influence the direction of the proceeding. And that suggests minds may already be made up. If so, then OIRA is right to take a look at this activity since that is not how rules should be made.

Welcoming New Leadership at the CPSC

Although it took a while, new leadership has come to the Consumer Product Safety Commission.  After a flurry of last minute activity—and a rejection of the Administration’s direction concerning new regulations—earlier this week, Elliot Kaye stepped down as agency chairman. He has announced that he plans to remain as a commissioner. Commissioner Ann Marie Buerkle, who was recently elected as agency vice chairman, now takes over as Acting Chairman of the agency until a permanent chairman is nominated by the President.

Trained as both a nurse and lawyer, Chairman Buerkle brings the type of experience the statute contemplated when it directed that commissioners be appointed by reason of “background and expertise in areas related to consumer products and protection of the public. . . .”  Having a former medical professional lead the agency will be an interesting and useful change of perspective.  And as a former Member of Congress from New York (where she served on the Committee on Oversight and Government Reform), she can work to mend the current strained relationship the agency has with the Hill.

Chairman Buerkle will not have a working majority as she seeks to reorient the agency.  For readers who keep score, here is the commissioner line-up:

  • Commissioner Marietta Robinson (D) – term ending October 2017
  • Acting Chair Ann Marie Buerkle (R) – term ending October 2018
  • Commissioner Joe Mohorovic (R) – term ending October 2019
  • Commissioner Elliot Kaye (D) – term ending October 2020
  • Commissioner Bob Adler (D) – term ending October 2021

Nevertheless, Chairman Buerkle can make incremental changes even without a working majority of commissioners.  Perhaps the most significant will be to let all stakeholders—consumers groups and industry alike—know that their perspectives are valued.  Changing the current philosophy with respect to product sellers from “us v. them” could go a long way to bringing the agency back to a collaborative relationship that focuses first and foremost on solving safety problems and less on punishment and distrust.

It was a real pleasure to have Chairman Buerkle as a colleague when I was a member of the commission.  She is thoughtful, listens carefully and truly wants to understand how agency actions impact folks outside the Washington beltway. As we have heard before, change is good.


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