Welcome to Dorsey's Consumer Products Law blog. This blog provides visitors with informative, up-to-date and easy-to-understand commentary on consumer products matters. Our purpose is to help manufacturers, importers, warehousers, retailers, e-tailers, consumers, and lenders better understand the legal issues impacting the consumer products industry.
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March 07, 2009 | Posted by
Nena Street
This week, the United States Supreme Court issued a ruling in Wyeth v. Levine sending shockwaves through the already precarious minefield of consumer products regulation. It is hard to anticipate just how much Wyeth will impact the preemptive effect of CPSC regulations under the CPSIA and other Acts, but it could be significant.
On Wednesday, March 4, the Supreme Court held that even if a drug company complies with all FDA regulations and receives FDA approval, the company is not insulated from state consumer liability lawsuits. Concluding that Congress did not intend to bar state failure-to-warn suits, the court denied companies safe harbor under the FDA warning regulations.
The preemptive reach of the Consumer Product Safety Act as amended by the CPSIA is currently unclear. For instance, the CPSIA explicitly allows states to regulate consumer products if the state requirements are identical to federal requirements. It also specifies that the CPSC may not expand the preemptive effect of the statutes it enforces through rulemaking. In addition, the CPSIA provides that it does not preempt or affect state warning requirements that were in effect on August 31, 2003 (e.g., California’s Prop 65). When read together, the preemption provisions of the Consumer Product Safety Act (as amended by the CPSIA) could be construed narrowly, and, under Wyeth, courts may not be willing find preemption in such murky waters.
We continue to track the evolution and application of several state consumer product safety laws with care and will provide regular updates. If you are a business subject to CPSC regulation, it is very important to remain up-to-date on state consumer product regulations, as well. Note that states across the country are at various stages in adoption of laws which require warning labels or other chemical content limits in children’s products. We will continue to keep readers apprised of the influence Wyeth has on future delineation of the preemptive effect of federal consumer product safety laws and regulations.
March 10, 2009 | Posted by
Mark Kaster
The Consumer Product Safety Commission will hold a public meeting March 12 to discuss how the agency will administer and enforce section 108 of the Consumer Product Safety Improvement Act that regarding phthalates in children’s products.
Phthalates are a family of chemicals often used to soften plastics. They have been identified as a hazardous material and banned in children's toys and child care articles.
The CPSC meeting will cover the ban, testing procedures and compliance guidelines.
The CPSC meeting will begin at 1 p.m. at the CPSC headquarters in Bethesda, Maryland. Additional information is available at http://www.cpsc.gov/cgibin/phth.aspx.
Guidelines for phthalate testing can be found at http://www.cpsc.gov/about/cpsia/phthalatesop.pdf
March 11, 2009 | Posted by
Mark Kaster
NEW TO OUR BLOG - A FEATURE WE CALL OUR QUESTION OF THE WEEK
We will be putting up a consumer product safety question each week. The answers will be forthcoming the following week along with a new question. Check back frequently and let us know if you have a question.
We recently posed Question #2:
Does the CPSIA allow me to export a product if I have not yet instituted a program of testing and I don't know if my product is compliant with a CPSC rule, ban, standard or regulation?
Response
All U.S. exporters must notify CPSC at least 30 days before they expect to ship products that do no comply with consumer product safety regulations. During this time CPSC will inform the recipient foreign government of the shipment and also provide the name of the consignee. Officials of the receiving country may then make an informed judgment as to whether to permit entry of these goods which do not comply with CPSC safety and health standards.
The export notification regulations apply not only to banned or non-complying consumer products (under the Consumer Product Safety Act) but also to fabric or upholstered furnishings which fail to comply with flammability standards (under the Flammable Fabrics Act) and substances which have been banned or fail to comply with labeling requirements (under the Federal Hazardous Substances Act).
Products already marketed in the United States that do not comply with CPSC standards may not be exported. These products can't be "dumped" by the manufacturers onto unaware foreign nations.
Under CPSC regulations at 16 CFR 1019, exporters must provide the following information before shipping noncompliant products:
- name, address and phone number of the exporter
- anticipated date of shipment
- country and port of destination
- quantity of goods to be shipped
- description of the goods, including brand or model number
- description of how the goods fail to comply with CPSC regulations
- name and address of the consignee.
The CPSC's export controls were recently enhanced by the Consumer Product Safety Improvement Act (CPSIA). Under Section 221 of the new law, the CPSC may prohibit a person from exporting a product that is not in comformity with a CPSC safety rule unless the importing county has notified the CPSC that it accepts the importation. The law now requires an affirmative acceptance of the products before shipment can be commenced.
The CPSIA requires "manufacturers" of products to conform to new standards and to provide testing and certificates of conformity attesting to product compliance. In the case of children's products and child care articles, the standards for lead and phthalates apply retroactively such that products in inventory that do not meet the standards are banned from sale as of February 10, 2009. The CPSC has stayed enforcement of the requirement for testing and certification, but the underlying safety standards are still the law and may be enforced.
This means that significant quantities of existing inventory may be non-compliant. If a "manufacturer" knows that a product is non-compliant, under the CPSC export control laws, these products can not be shipped without approval from the destination country.
Interestingly, the export control laws apply to any "person," so even a retailer or distributions must not export a product if they know the product is noncompliant with safety regulations. It is unclear how or whether the CPSC's current stay of enforcement for testing certification will be applied to export control limitations. If a retailer does not have a certificate from the manufacture (because it’s not required under the stay of enforcement), can the retailer export products it has removed from the shelves because the products may not comply with CPSC standards? The CPSC has not yet provided guidance on this or similar questions.
Let's take an example of a company (or even a retailer making inter-company shipments) that exports bikes and bike component parts. If the bikes lack safety reflectors required by CPSC regulations, the company may not export the bikes unless it first gets approval from the receiving country either to accept entry of the non-complying products or to make arrangements to equip the product with safety features. Similarly, if the company is selling component parts that exceed the lead or phthalate limits, the company would now be precluded from exporting the parts without first getting necessary approvals. These are perhaps unintended consequences of the CPSIA law, but nonetheless they have to be considered as part of an overall consumer product safety compliance mandate.
In conclusion, the CPSC restricts export of products that do not comply with any CPSC rule, law, ban, standard or regulation. A person should exercise reasonable diligence in exporting consumer products to avoid any implication that noncom plying products were shipped (or dumped) to avoid CPSC regulations. There may be substantial penalties for noncompliance.
Now for our Question of the Week #3.
A company has received several reports of injuries associated with the use of its product. The company has heard of the CPSC Fast Track Recall program and wants to know if it should participate in the program. What factors should the company consider before entering into the fast track program?
Check back with us next week for our response. Also, let us know what you think of our blog and questions you may have about consumer product safety. MRK
March 19, 2009 | Posted by
Sara Peterson
The South Coast Air Quality Management District recently joined the growing list of government entities seeking to regulate consumer products. On March 6th, the District's Board voted 12-0 to adopt a rule limiting the level of volatile organic compounds (VOCs) in consumer paint thinners and multi-purpose solvents sold in the Los Angeles area. SCAQMD Rule 1143 establishes an interim VOC limit of 300 grams/liter (g/l), effective January 1, 2010, and a VOC limit of 25 g/l effective January 1, 2011, for all consumer paint thinners and multi-purpose solvents. These limits are more stringent than those proposed in a state-wide regulation currently under consideration by the California Air Resources Board (CARB), which would not impose the 25 g/L limit until 2013.
March 27, 2009 | Posted by
Nena Street
On March 20, 2009, CPSC Acting Chairman Nancy Nord provided Representative John Dingell with a detailed assessment and critique of CPSIA implementation requirements. In a politically-savvy move, Nord herself contributed only a cover letter to the memorandum which was prepared and signed by the most senior CPSC career staff. The assessment presents thorough and well-reasoned answers to specific inquiries made by Rep. Dingell on March 4, 2009.
The staff assessment provides a disturbing account of the inequities mandated under the law and the lack of discretion left to the agency to exercise its judgment regarding reasonable exemptions. I encourage anyone following this issue to read the letter yourself and for that reason I will not detail its contents here.
I will, however, offer this quote from the letter which I find poignant:
“A law like the CPSIA that outlaws sales of previously lawful products will, by its nature, hurt retailers more than manufacturers and hurt resellers even more than retailers (given the fact that products are typically in consumer’s hands for several years at the least before they reach second-hand stores). . . dealing with retroactivity across the board would be the most effective way to deal with the inequities presented by the current law . . .”
I quote this passage because it cuts to the fundamental issue impacting all stakeholders in the consumer products industry – who should bear the risk of unsafe products?
Last year the CPSIA was run ram shod through Congress after a groundswell of populist frenzy, fueled by myriad toy recalls during the 2007 holiday season, convinced lawmakers that consumers generally, and children particular, should not bear the risk of unsafe consumer products. As a result, CPSIA unequivocally shifts the risk to industry participants by arming CPSC with new enforcement mechanisms, including criminal and civil sanctions.
In addition to imposing penalties for unsafe products, the CPSIA adds a slew of new regulatory mandates aimed to ensure products are safe prior to entering the stream of commerce. Despite the laudable and truly banal goal of ensuring products are safe, the CPSIA achieves this by mandating that industry participants jump through several regulatory hoops and incur tremendous costs before products hit the market. The CPSC is charged with crafting and tending to those regulatory hoops.
Most troubling to me is that risk allocation defined in the CPSIA prohibits the CPSC from using common sense in its rulemaking. The CPSIA does not allow the agency to use any risk-benefit analysis to determine the prudence of adopting expensive and complex regulatory requirements to address de minimis risks. The March 20 staff memo makes a strong case that the CPSIA must be tempered and provides several concrete and reasonable steps toward that end.
March 27, 2009 | Posted by
Mark Kaster
NEW TO OUR BLOG - A FEATURE WE CALL OUR QUESTION OF THE WEEK
We will be putting up a consumer product safety question each week. The answers will be forthcoming the following week along with a new question. Check back frequently and let us know if you have a question.
We recently posed Question #3:
A company has received several reports of injuries associated with the use of its product. The company has heard of the CPSC Fast Track Recall program and wants to know if it should participate in the program. What factors should the company consider before entering into the fast track program?
Response:
The Fast Track Program can be very effective in helping companies resolve product safety issues. Companies should seriously consider using the Fast Track Program if a product recall is necessary, especially in connection with product compliance under the new Consumer Product Safety Improvement Act of 2008.
The Consumer Product Safety Act (CPSA) requires that companies (manufacturers, importers, distributors and retailers) notify the Consumer Product Safety Commission (CPSC) if they obtain information that reasonably supports the conclusion that a product distributed in commerce (1) fails to meet a consumer product safety standard or ban, (2) contains a defect that could create a substantial products hazard to consumers, (3) creates an unreasonable risk of serious injury or death, or (4) fails to comply with a voluntary standard upon which the CPSC has relied.
Section 15b of the CPSA requires companies to “immediately” report product defects. The CPSC interprets this to mean that a company should report within 24 hours of obtaining information that a product violates a standard, contains a defect which creates a substantial product hazard, or creates an unreasonable risk of injury. The CPSC encourages companies to report potential product hazards even while their own investigations are continuing. However, if a company is uncertain whether information is reportable, the company may spend a reasonable time investigating the matter, but generally not exceeding ten working days.
It is noted that the CPSA also requires manufacturers to report information about settled or adjudicated lawsuits, if a particular products is the subject to three or more civil actions involving serious injury or death. The law also has separate reporting requirements for choking incidents involving children. The agency also requires reporting under its other jurisdictional laws (Flammable Fabrics Act, Federal Hazardous Substances, Act, Poison Prevention Packaging Act, Refrigerator Safety Act, Virginia Graeme Baker Pool and Spa Safety Act).
In order to facilitate rapid reporting and corrective actions, the CPSC adopted the Fast Track Product Recall Program. If a company reports a potential product defect and, within 20 working days of the notification, proceeds to implement with the CPSC a voluntary recall, the CPSC will not make a determination that the product contains a defect which creates a substantial product hazard. This program allows the CPSC and the company to work together on a corrective action plan, rather than spending time to investigate and determine whether a defect rises to the level of a substantial product hazard.
The Fast Track Recall Program provides for electronic submittal of an initial report to the CPSC. Thereafter, the company submits a corrective action plan for agency approval. While no two corrective action plans are identical, there are some common elements. Companies faced with a voluntary recall under the Fast Track program should be prepared to answer the following questions:
-What is the defect that causes the product hazard?
-What caused the product defect to occur?
-Where are the unsafe products? How may are there?
-Did the product fail to comply with a safety standard?
-Has the company discontinued shipments?
-Has the company notified retailers to stop sales?
-Does the company have a register of customers?
-Does the company have a press release to announce the recall?
-What other forms of public notice are needed?
-Does the company have a toll-free number to handle consumer calls?
-Does the company have an internet site to inform customers?
-Does the company have the personnel in place to handle the recall?
-Does the company have replacement parts?
-Does the comapny have the ability to exchange defective products?
-Does the company have a plan to ship replacement parts or products?
-How will distributors and retailers be participating?
-Can the company effectively monitor the recall effort?
-How is the company upgrading its quality control?
The objective of a Fast Track Recall is to locate all defective products as quickly as possible. This requires effective communication and coordination within the company so that defective products with consumers and in the chain or distribution can be retrieved, repaired or replaced.
CONCLUSION. The Fast Track Recall Program is an important tool for compliance with consumer product safety laws. We think the Fast Track Program will become especially important for compliance with the Consumer Product Safety Improvement Act of 2008 (CPSIA), especially for children’s products that are found to contain excess lead or phthalates or fail to meet the mandatory ASTM safety standards.
There is a new emphasis today on consumer product safety. Companies have to redouble their efforts and take a proactive approach to emphasize product safety, especially for products imported from overseas. Where products are found to be non-compliant with safety standards, the Fast Track program should be considered for compliance. The program has a good track record and can demonstrate that a company is committed to safety--which can have a strong influence on how consumers view a company and its product in the future.
Now for this weeks new Question of the Week #4
What are the new whistleblower provisions of the CPSIA and how might they affect my company?
Check back with us next week for our response. Also, let us know what you think of our blog and questions you may have about consumer product safety. MRK
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