Archive for the 'Information Disclosure' Category

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.

Advertisements

An Interesting Year So Far

So far, 2014 has been an interesting year.  In January and February, the talk among those who follow CPSC matters closely was about the agency’s efforts to fundamentally change the voluntary recall process under the guise of merely “tweaking” the process.  In March, the conversation is all about the agency’s efforts to dilute the protections that §6(b) of the Consumer Product Safety Act provides to assure that information coming out of the agency is accurate and fair.  I wonder what April will bring.

The proposed changes to the §6(b) information disclosure rule which are now out for public comment alter the current rule and practice in very fundamental ways.  Any company that is regulated by the CPSC should look at the proposal closely to understand how the CPSC proposes to change the rules of the road. As a starting point in this analysis, I recommend that you read an article recently published by the Washington Legal Foundation and written by former CPSC general counsel Cheryl Falvey.  This article gives an overview of the changes the commission proposes and why they are important.  Then you should read the proposal for yourself and start writing comments to the CPSC.

Wanted: Corporate Psychic

§This past week the CPSC voted to publish for public comment a notice of proposed rulemaking to amend long-standing regulations (16 CFR 1101) dealing with psychic-readerinformation disclosure under §6(b) of the Consumer Product Safety Act. The stated rationale for the NPR is to “modernize” regulations written in 1983, and which, by most accounts, have been working well.  Given the opaque nature of the discussion around this NPR, a Ouija board may be a helpful tool as you read through this NPR.

The §6(b) proposed rule is a continuation of the apparent on-going effort of the Commission altering the collaborative partnership that, over many years,  resulted in successful results for consumers—altering it to one that is both more formalistic, rigid and in my view, less protective of consumers.  This effort includes mandating intrusive compliance programs in inappropriate settings, changing the voluntary recall process to add delay and rigidity among other things, and now, proposing to erode important information disclosure protections mandated by Congress and that form the basis for much of the success of the fast track recall program among other things.

Whether the agency has statutory authority to proceed as proposed is questionable but from the stand point of good public policy, there is no question that the agency seems set on a course that could change the balance that has been the hallmark of its success.

To quickly summarize, §6(b) of the statute, with accompanying regulations, states that before the agency can release information it obtains about a product that identifies a manufacturer or private labeler, it must take certain steps to assure that the disclosure is fair and accurate.  The regulations, written in 1983, seem to be working well except that they do not contemplate electronic communications (something that can be easily rectified).  Further, in its briefing to the Commissioners, the staff did not identify in specific terms how the changes would improve efficiencies.  Instead viewers of the briefing were treated to general statements, speculative scenarios and threats to go into executive session so the public could not benefit from the agency reasoning that provided the basis for the proposed rule.

The proposed rule makes a number of changes to the 1983 regulations that go well beyond “modernizing” those rules.  Taken as a whole, the proposal changes the emphasis from the agency having the proactive obligation to act in a careful and deliberate manner.  Instead information–perhaps in response to that pulled from the internet or from the latest (and generally flawed) toxic product hit list or perhaps stale information where context has changed–can go out the door and, only if the company has a psychic on staff, will it know the release is coming or be able to object. But even more important, this seems like an effort to minimize work for the agency without thought to whether consumers get better information or companies must correct inaccurate innuendos.   

The NPR will soon be available in the Federal Register for comment.  Stakeholders who care about this latest attempt to dilute the deliberate balance Congress struck in the Consumer Product Safety Act should read this proposal carefully and give the agency your views.

The Side Effects of Tweaking

Much has been written here and in other publications about the substantive impacts of the CPSC’s proposed changes to the rules dealing with voluntary recalls.  The substantive nature of the proposed amendments cannot be discounted even though certain commissioners persist in describing them as only “tweaks.”

As commenters analyze the impacts of the proposed changes, it is important to look at how these changes impact other rules that stakeholders and the commission operate under, specifically those dealing with submission of information under §15(b) and disclosure of information under §6(b) of the Consumer Product Safety Act.  Former CPSC general counsel Cheryl Falvey has written an interesting piece that discusses that interrelationship.  It is worth reading and thinking about.

Information submitted to the agency under §15(b) is exempt from disclosure except under limited circumstances as described in §6(b)(5).  This protection is to provide incentive for companies to fully report information the agency needs to analyze a risk without having to worry that sensitive product information is made public unfairly or prematurely.  One of the exemptions to this protection is when the Commission has accepted in writing a “remedial settlement agreement” (see §6(b)(5)(B)).

Here is the question:  is the voluntary recall (or specifically the recall’s corrective action plan) a remedial settlement agreement?  The regulations currently say that the recall agreement is not enforceable.  The agency now proposes to make the recall agreement enforceable.  Is the effect of that to make any information submitted under §15(b) subject to disclosure where it otherwise would not have been?

What is the Commission’s current position on this issue?  Reading the NPR or listening to the debate does not provide any answers.  But one thing is clear:  with all this tweaking, some transparency is called for.

§6(b): Get Ready for More “Tweaking”

Rumor has it that the CPSC staff will soon be sending up to the Commission suggestions for “modernizing” the §6(b) regulations (16 CFR 1101) dealing with disclosure oftweak image company and product-specific information. “Modernizing” is a word that covers a lot of ground and it will be instructive to see how the agency staff and commissioners define it.

The §6(b) regulations were written in 1983 and do not, for example, contemplate communication by email—hence the perceived need for modernization. But if the Commission’s recent proposal with respect to voluntary recalls—where significant substantive changes are being proposed under the rubric of “tweaking” an interpretive rule—are any indicator, then interested stakeholders should pay close attention to the proposed §6(b) rule when it comes up for Commission review.

§6(b), along with §15(b) and the voluntary recall process are three legs of the stool that supports a collaborative and cooperative relationship between the Commission and product sellers.  This cooperation, in large part, is what makes the agency as effective as it is.  §15(b) requires submission of information indicating a product hazard, but most companies, up to now, heed the oft-stated advice of “when in doubt, report”, reporting information before, or even absent, the statutory obligation.   This happens because §6(b) protects the disclosure of information that is not fair or accurate.  (Here is a link to an article that discusses the consumer protection aspects of §6(b).) Taken together, the statute provides incentives for companies to give information to the agency earlier than they otherwise would because those companies have the assurance that information about specific products will be used internally but will not be prematurely released to the public, before the agency has determined if there is a problem.  The voluntary recall process compliments this statutory framework by allowing recalls to be made quickly and, in some cases, before there is a determination that a substantial hazard does, in fact, exist.

The important role that §6(b) plays in making the statute work is not appreciated by some within the agency.  That is unfortunate.  If the Commission decides to use this proposed §6(b) modernization rule as an opportunity to make more substantial changes (as it did with the voluntary recall proposed rule), it threatens to further erode the foundation of cooperation that is so vital to an effective CPSC.


Enter your email address to subscribe to my blog and receive notifications of new posts by email.

Join 968 other followers

Archives

RSS CPSC Breaking News & Recent Recalls

  • An error has occurred; the feed is probably down. Try again later.

Let’s keep the conversation going on Twitter. You can find me at @NancyNord.

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Nancy's Photos

  • 85,060 visits
Advertisements