CLE Seminars and Events

Publications

The Alliance

DRI Europe

Archive

In June, my brothers and I were fortunate enough to proudly celebrate the 50th wedding anniversary of our parents, John and Mary Holmstrand. As children of the Sixties, our formative years, for the most part, passed by unprotected by the oversight of a federal agency charged with the regulation of consumer products. Even after the formation of the Consumer Product Safety Commission in 1972, we still had to survive on our wits and pluck, as there were practically no rules specific to products marketed for children under the age of 12. Somehow, we all made it to adulthood.

This year also marked another anniversary: August 14, 2009 was the one-year anniversary of the passage of the Consumer Product Safety Improvement Act of 2008 (CPSIA or the Act), Public Law 110-314, 122 Stat. 3016 (codified in various sections of 15 U.S.C.). Born of the massive recall of imported children’s products by toy manufacturers in 2007, this sweeping statute effected a number of changes in the Consumer Product Safety Commission and its operation. Although many of its new provisions were directed to “children’s products” (such as lowering the amount of allowable lead and phthalates in certain products), its reach was not so limited. Manufacturers, distributors, retailers, importers and resellers have spent the last year grappling with CPSIA’s impact on their business operations. They and their counsel are attempting to navigate the regulatory maze wrought by the Act’s mandates and tight deadlines. (For CPSC’s timeline, see http://www.cpsc.gov/about/cpsia/rulemaking.pdf). Chances are that many attorneys with clients involved in almost any fashion with consumer products have dealt with or will deal with some aspect of CPSIA.

In addition to setting new standards for a variety of products (not only those marketed for use by children), CPSIA requires testing and certification of regulated products. It prohibits the sale of products subject to a mandatory or voluntary recall. It sets specific standards for all-terrain vehicles. Some of CPSIA’s new standards took effect on February 10, 2009 and still others took effect last month on its one-year anniversary. The documented impact of the CPSIA on product manufacturers, importers, sellers and resellers is broad (particularly where children’s products are involved) and CPSIA affects everything from component testing to product content to product labeling. Walter Olson’s must-read blog, Overlawyered.com, provides an excellent resource for delving into the impact of the CPSIA on businesses large and small. See http://overlawyered.com/tag/cpsia/. CPSC itself maintains a web portal related to CPSIA: http://www.cpsc.gov/about/cpsia/cpsia.html.

From a litigation standpoint, there have been few reported decisions addressing CPSIA’s impact and none in the product liability context. One decision, National Resources Defense Council, Inc. v. U.S. Consumer Product Safety Commission, 597 F.Supp.2d 370 (S.D.N.Y. 2009), addressed the scope of the CPSC’s ability to interpret the CPSIA. Finding that the Act unambiguously prohibited the sale of certain phthlates-containing products on or after February 10, 2009, the district court overturned a CPSC interpretation (made by its General Counsel) that CPSIA did not apply to inventory existing prior to February 10. In other words, a retailer could legally sell a particular item of inventory on February 9, but if it did not, the sale of the exact same item of inventory on February 10 would violate CPSIA.

The wide-ranging nature of the changes wrought by CPSIA is beyond the scope of this note, but this two-part article will focus on a few features that will likely impact product liability litigation. Today's section provides a brief background on CPSC, the enactment of CPSIA generally, CPSC’s view on the applicability of its provisions to various layers in the chain of distribution (hint: it is not just importers or manufacturers), and a couple of CPSC’s early interpretations of the Act. Next week, it will address several areas of CPSIA that may be of particular interest to product liability litigators, including its lead and phthlates bans, its provision for a publicly accessible database, preemption, the ability of state attorneys general to enforce CPSA provisions and the effect of the rule-making required by CPSIA.

BACKGROUND
In 1972, Congress passed the original Consumer Product Safety Act, Pub. L. No. 92-573, 86 Stat. 1207 (1972) (“CPSA”). In enacting CPSA, it stated:
(a) The Congress finds that—
     (1) an unacceptable number of consumer products which present unreasonable risks of injury are distributed in commerce;
* * *
     (4) control by State and local governments of unreasonable risks of injury associated with consumer products is inadequate and may be burdensome to manufacturers;* * *

(b) The purposes of this Act are—* * *
     (3) to develop uniform safety standards for consumer products and to minimize conflicting State and local regulations; and 15 U.S.C. § 2051 (1972). CPSA created the Consumer Products Safety Commission and vested it with broad authority over “consumer products” including the ability to set standards for product safety, to ban certain products from the US market, and to order product recalls. Of particular interest are the Congressional statements directed to the need for uniform and national safety standards applicable to consumer products.

CPSA has been amended several times over the next three decades. A 1981 amendment allowed the CPSC to rely on voluntary standards set by product manufacturers where “compliance with such voluntary standards would eliminate or adequately reduce the risk of injury addressed and it is likely that there will be substantial compliance with such voluntary standards.” 15 U.S.C. § 2056(b)(1). This amendment was consistent with CPSA’s goal of developing national and uniform safety standards.

The media frenzy surrounding the product recalls of 2007 – especially those involving children’s products – led Congress to revisit CPSA and to pass CPSIA. Title I of CPSIA added specific requirements for “children’s products,” defined under 15 U.S.C. § 2052(a)(2) to mean a “consumer product designed or intended for children 12 years of age or younger.” It essentially codified voluntary ASTM International Standard F963-07 Consumer Safety Specifications for Toy Safety (ASTM F963), 15 U.S.C. § 2056b(a) and directed the CPSC to assess within the year the effectiveness of ATSM F963 with respect to specific types of toys and potential hazards such as ingestible magnets, toxic substances, and battery-operated toys. 15 U.S.C. § 2056b(b)(1). It further directed CPSC to thereafter promulgate rules “that take into account other children’s product safety rules for those products, 15 U.S.C. § 2056b(b)(2); and to then consider the effectiveness of ATSM F963 with respect to other children’s products and make rules as necessary based on that assessment. 15 U.S.C. § 2056b(d). CPSIA also amended 15 U.S.C. § 2063 to add specific product certification and third-party testing requirements for children’s products and to mandate labeling on such products in order to allow for identification of products subject to recall. (for CPSC’s Policy Statement regarding tracking labels, see http://www.cpsc.gov/about/cpsia/sect103policy.pdf).

CPSIA’s reach was not limited to children’s products. Title II of the Act, “Consumer Product Safety Commission Reform,” added various provisions generally applicable to the CPSC including essentially doubling its budget and setting certain staffing requirements. 15 U.S.C. § 2068 was amended to prohibit the sale of any product subject to a mandatory or voluntary recall. As CPSC has made clear in its recent publication, CPSC Handbook for Resale Stores and Product Resellers, http://www.cpsc.gov/cpscpub/pubs/thrift/thrguid.pdf, this ban applies to “thrift stores, consignment stores, charities, and individuals holding yard sales and flea markets,” id. at 2, and extends as well to "any other product violating a CPSC safety standard, ban, rule, or regulation.” Id. Section 212 of CPSIA also mandates the creation of a publicly available, web-based, searchable database containing – among other things – “reports of harm relating to the use of consumer products” received from a variety of sources, including consumers, governmental agencies, health care providers, and others. 15 U.S.C. § 2055a(a)(1) and (b)(1). Significantly, in light of the prior Congressional findings on the need for national standards, section 232 of CPSIA permitted for the first time enforcement of CPSA provisions by state attorneys general. Section 219 added protection for “whistleblowers” who report to state or federal agencies acts or omissions of their employers that the employee reasonably believes violated an act the CPSC enforces (i.e., not just CPSIA). 15 U.S.C. §2087(a). Finally, CPSIA sets specific standards for all-terrain vehicles. 15 U.S.C. § 2089.

Some of CPSIA’s new standards took effect on February 10, 2009 and still others took effect last month, on its one-year anniversary. In January of this year, though, CPSC announced it was issuing a one-year stay on enforcement of certain of the testing and certification rules under CPSIA. In its statement announcing the enforcement stay, the Commission pointed out: "Significant to makers of children’s products, the vote by the Commission provides limited relief from the testing and certification requirements which go into effect on February 10, 2009 for new total lead content limits (600 ppm), phthalates limits for certain products (1000 ppm), and mandatory toy standards, among other things. Manufacturers and importers – large and small – of children’s products will not need to test or certify to these new requirements, but will need to meet the lead and phthalates limits, mandatory toy standards and other requirements." Release #09-115, Consumer Products Safety Commission (January 30, 2009) at 1. In other words, while the CPSC will not take enforcement action regarding the testing and certification provisions during the stay, products will still have to meet the underlying standards.

The statement further noted that the stay would not apply across the board to all standards including:
• Four requirements for third-party testing and certification of certain children’s products subject to:
o The ban on lead in paint and other surface coatings effective for products made after December 21, 2008;
o The standards for full-size and non full-size cribs and pacifiers effective for products made after January 20, 2009;
o The ban on small parts effective for products made after February 15, 2009; and
o The limits on lead content of metal components of children’s jewelry effective for products made after March 23, 2009.

• Certification requirements applicable to ATV’s manufactured after April 13, 2009.

• Pre-CPSIA testing and certification requirements, including for: automatic residential garage door openers, bike helmets, candles with metal core wicks, lawnmowers, lighters, mattresses, and swimming pool slides; and

• Pool drain cover requirements of the Virginia Graeme Baker Pool & Spa Safety Act.

Id. at 1-2. CPSC also emphasized that “all businesses, including, but not limited to, handmade toy and apparel makers, crafters and home-based small businesses, must still be sure that their products conform to all safety standards and similar requirements, including the lead and phthalates provisions of the CPSIA.” Id. In other words, just because your client is not a Fortune 500 company does not mean you will not have to consider CPSIA when evaluating its potential exposures under CPSA.

In July, CPSC denied a request from the Fashion Jewelry Trade Association (http://www.cpsc.gov/library/foia/foia09/petition/pp41.pdf) to exclude crystal and glass beads contained in children’s products from CPSIA’s lead content requirements. In her statement accompanying the vote (http://www.cpsc.gov/pr/tenenbaum071709.pdf), new CPSC Chairman Inez Tenenbaum (from whom DRI Products Liability Committee members will be hearing more in the near future) explained that CPSIA’s mandatory language precluded her from using a risk analysis in determining whether to grant the requested exclusion. Because of the mandatory language of the Act, Chairman Tenenbaum stated that factors such as “bioavailability of the lead, accessibility of the lead to children, foreseeable use and abuse, duration of exposure, marketing, and life cycle of the product” could not be considered. Id. at 2. This strongly suggests that CPSC will strictly interpret CPSIA when exercising its rule-making authority for setting safety standards. See also, Children’s Products Containing Lead; Determinations Regarding Lead Content Limits on Certain Materials or Products; Final Rule, 74 Fed.Reg. 43031 (2009) (to be codified at 16 C.F.R. § 1500.91) (available at http://www.cpsc.gov/businfo/frnotices/fr09/leadcontent.pdf).

Jeffrey A. Holmstrand (jaholmstrand@mandblaw.com)
McDermott & Bonenberger, PLLC
Wheeling, West Virginia