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March 09, 2010 | Posted by
Scott Peterkin
The Consumer Products Safety Commission (“Commission”) has drafted its final rule interpreting factors to be considered when seeking civil penalties under the Consumer Product Safety Act (“CPSA”), the Federal Hazardous Substances Act (“FHSA”), and the Flammable Fabrics Act (“FFA”).
Background. Section 217 of the Consumer Product Safety Improvement Act of 2008 (“CPSIA”) amended the statutory criteria the Commission must consider when determining the amount of civil penalties for knowing violations of the CPSA, FHSA, and FFA and required the Commission to issue regulations interpreting those statutory factors. Section 217 of the CPSIA also increased the maximum penalty for violations from $5,000 to $100,000. The Commission issued an interim final rule on September 1, 2009 and sought public comment. Following the public comment period, the Commission posted its draft notice of the final rulemaking on its website on February 25, 2010. This rulemaking establishes a new Part 1119 in Title 16 of the Code of Federal Regulations.
Statutory Civil Penalty Factors. The CPSA, FHSA, and FFA, as amended by the CPSIA, each contain a similar set of statutory criteria for the Commission to consider when assessing civil penalties. See 15 U.S.C. § 2069(b) (CPSA factors), 15 U.S.C. § 1264(c)(3) (FHSA factors), and 15 U.S.C. § 1194(e)(2) (FFA factors). The factors include:
(1) the nature, circumstances, extent, and gravity of the violation (including the nature of the product defect under the CPSA and the nature of the substance under the FHSA); (2) the severity of the risk of injury; (3) the occurrence or absence of injury; (4) the number of defective products distributed (factor under the CPSA only) or the amount of substance distributed (factor under the FHSA only); (5) the appropriateness of such penalty, in relation to the size of the business of the person charged, including how to mitigate undue adverse economic impacts on small businesses; and (6) such other factors as appropriate.
Commission Interpretation of Statutory Factors. The Commission rejected adopting a formulaic or matrix approach to assessing civil penalties under the CPSIA. Rather, the Commission stated that it will review the facts and circumstances surrounding violations and the assessment of penalties based on the factors and framework described in the final regulations.
1. Nature, circumstances, extent, and gravity of the violation. Under this factor, the Commission will consider the totality of the circumstances and all other facts concerning a violation. In addition to the statutory factors, the Commission will consider those promulgated in the regulation under the catchall “other factors as appropriate.”
As part of its totality of the circumstances analysis, the Commission will consider the nature of the product defect associated with a CPSA violation or the nature of the substance associated with an FHSA violation. Certain violations of the CPSA, however, do not necessarily require that there be a product defect. In those cases, the Commission will still consider the other civil penalty factors.
2. Severity of the risk of injury. The Commission will consider the potential for serious injury, illness, or death (and whether any injury or illness required medical treatment including hospitalization or surgery), the likelihood of injury, the intended or reasonably foreseeable use or misuse of the product, and the population at risk (including vulnerable populations).
3. Occurrence or absence of injury. The Commission will consider whether injuries, illnesses, or deaths have or have not occurred with respect to any product or substance associated with a violation, and, if so, the number and nature of injuries, illnesses, or deaths. When addressing this factor, the Commission will consider both acute illness and the likelihood of chronic illness.
4. Number of defective products distributed. The Commission will consider the number of defective products or amount of substance distributed in commerce. However, this factor will not be used to penalize a person’s decision to conduct a wider-than-necessary recall out of an abundance of caution. Recalls conducted due to a person’s uncertainty with how many or which products should be recalled, on the other hand, will not avoid application of this factor.
5. Appropriateness of such penalty in relation to the size of the business of the person charged, including how to mitigate undue adverse economic impacts to small businesses. In considering business size, the Commission may look at the number of employees, net worth, and annual sales. However, a business’s size and its ability to pay a penalty are separate considerations. Relevant financial factors to determine a small business’s ability to pay include liquidity, solvency, and profitability.
With respect to mitigation of “undue” adverse economic impacts, the Commission may consider the business’s size and financial factors relating its ability to pay. The Commission’s Small Business Enforcement Policy at 16 C.F.R. § 1020.5 may also provide guidance on how to mitigate undue adverse economic impacts.
6. Other factors as appropriate. In addition to the statutory factors, the CPSA, FHSA, and FFA authorize the Commission to consider other factors it finds appropriate when determining the amount of a civil penalty. In these new regulations, the Commission has established the following additional factors that it may consider: (1) whether a person had at the time of the violation a reasonable and effective program or system for collecting and analyzing information related to safety issues; (2) a person’s history of noncompliance with the CPSA, FHSA, FFA, and other laws that the Commission enforces; (3) whether a person has benefited economically from a failure to comply; (4) whether a person has failed to respond in a timely and complete fashion to requests from the Commission for information; and (5) the duration of a violation.
Effective Date. The Commission discussed the draft final rule at its public meeting on March 3, 2010, and the Commission planned to vote on the draft final rule the week of March 8, 2010. The regulations will become effective once published in the Federal Register.
Scott Peterkin is an Associate in the Regulatory Affairs Department at Dorsey & Whitney, LLP. Please see our web site at www.dorsey.com.
March 11, 2010 | Posted by
Sarah Kerbeshian
On July 15, 2009, the California Environmental Protection Agency’s Office of Environmental Health Hazard Assessment (OEHHA) received a petition from the Natural Resources Defense Council, asking OEHHA to initiate the process for listing bisphenol-A (BPA) as a reproductive toxicant under the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). OEHHA is the California agency charged with implementing Proposition 65.
BPA is a chemical produced in large quantities for use primarily in the production of polycarbonate plastics and epoxy resins. BPA is found in many products, including food and drink packaging, such as water and infant bottles, compact discs, impact-resistant safety equipment, and medical devices. It is also used in the coatings of metal products, such as food cans, bottle tops, and water supply pipes. BPA is also present in some dental sealants and composites.
BPA is currently not listed under Proposition 65 as a substance known to the State of California to cause cancer or reproductive toxicity. One of the ways a chemical may be added to the Proposition 65 list is via the authoritative bodies mechanism established by Cal. Health & Safety Code section 25249.8. Under this mechanism, a chemical must be listed under the Proposition 65 regulations when OEHHA determines that two conditions are met:
(1) The evidence considered by the authoritative body meets the sufficiency criteria contained in the regulations; and (2) An authoritative body formally identifies the chemical as causing reproductive toxicity.
After an authoritative body has made a determination about a chemical, OEHHA evaluates whether listing under Proposition 65 is required. OEHHA has determined that BPA appears to meet the criteria for listing as a reproductive toxicant under Proposition 65, based on findings of the National Toxicology Program’s Center for the Evaluation of Risks to Human Reproduction (NTP-CERHR, 2008). A 2008 NTP-CERHR report concludes that BPA causes developmental toxicity at high levels of exposure, and OEHHA has concluded that the chemical appears to satisfy the authoritative bodies’ listing criteria in the Proposition 65 regulations.
If BPA is added to the list, Proposition 65’s warning and labeling requirements will apply to products containing BPA. Once a chemical is listed, businesses have 12 months to comply with the warning requirements. Proposition 65 also prohibits companies that do business within California from knowingly discharging listed chemicals into sources of drinking water. Once a chemical is listed, businesses have 20 months to comply with the discharge prohibition.
The OEHHA has requested public comment concerning whether BPA meets the criteria in the Proposition 65 regulations for authoritative body listings. After reviewing all of the comments OEHHA will determine whether BPA meets the regulatory criteria for listing. If listing proceeds, OEHHA will publish a Notice of Intent to List and provide an additional comment period. In order to be considered, comments must be received by OEHHA by 5:00 p.m. on Tuesday, April 13, 2010.
For more information or to submit a comment, see the OEHHA’s Request for Information.
Sarah Kerbeshian is an Associate in the Regulatory Affairs Department at Dorsey & Whitney, LLP. Please see our web site at www.dorsey.com.
March 19, 2010 | Posted by
Kieran Dwyer
The Consumer Product Safety Commission has issued a proposed interpretive rule that would interpret the term “children’s product” as it is used in the Consumer Product Safety Improvement Act of 2008 (CPSIA). The proposed rule would further clarify what must be considered when evaluating whether a product is a children’s product and subject to specific standards.
Background
CPSIA amends the Consumer Product Safety Act (CPSA) by creating a new definition of “children’s product.” CPSIA defines a children’s product in part as “a consumer product designed or intended primarily for children 12 years of age or younger.” Products that fall into this category are subject to a series of requirements. For example, a children’s product may not contain more than 300 parts per million of lead, a limit that will be further reduced to 100 parts per million in 2011. CPSIA also imposes third-party testing, labeling requirements and safety standards for certain children’s products. Parties who violate the CPSA requirements may be subject to civil and criminal penalties.
Statutory Definition
The CPSIA establishes four factors to determine whether a consumer product is designed or intended primarily for children 12 years of age or younger and thereby a “children’s product.” The four factors are:
-Manufacturer’s statement about the intended use of the product.
-Whether the product is displayed through packaging or advertising as appropriate for use by children 12 years of age or younger.
-Whether the product is commonly recognized by consumers as being intended for use by a child 12 years of age or younger.
-The Age Determination Guidelines issued by the Consumer Product Safety Commission staff.
Proposed Rule
The proposed rule discusses the statutory definition of “children’s product” and would provide guidance for manufacturers to evaluate whether their products will be classified as such and subject to regulation. The proposed rule lists considerations that would apply to the manufacturer’s statement, product presentation, what is commonly recognized by consumers as intended for children, and the Age Determination Guidelines. Furthermore, the proposed rule also offers examples of what is considered a children’s product and what is considered a general use product.
Manufacturer’s Statement
As it applies to the manufacturer’s statement, the proposed rule specifies that the statement about the product’s use should be reasonably consistent with the expected use patterns for the product. A statement that the product is not intended for children will not preclude it from being a children’s product if consumers would commonly use that product for children.
Product Presentation
The proposed rule explains that product presentation can be either express or implied. Representations on the packaging, text, illustrations, or photographs depicting children using the product may all indicate the product is a children’s product. However, location of the product in stores, on websites, or packaged with other children’s products may also be a factor in determining consumer perceptions of the intended age group. If a product is displayed with toys for young children, this may create the inference that the product is meant for children.
Recognized as Intended for Children
The proposed rule states that a manufacturer, when considering whether a product is intended primarily for a child, should evaluate not only actual and reasonably foreseeable uses of the product but also foreseeable misuses of the product. Specifically, the features, principal affordance, cost considerations, and children’s interaction with the product should all be evaluated when determining whether the product is intended for children.
Age Determination Guidelines
The proposed rule directs manufactures to the Age Determination guidelines. The proposed rule explains that the guidelines are based on the appeal of a product to children of various age groups and the capabilities of children at certain ages to interact with the product.
Examples
The proposed rule also provides a series of examples of what will be considered a children’s product. The examples include such things as coat hooks. A coat hook, even if used in a home or school to hang a child’s coat is considered a general use item. However, if the hook is part of a children’s product such as a child-sized desk or the hook is decorated with a child’s theme, the hook will then be considered a children’s product. The list of examples distinguishing children’s products and general use items includes examples of furnishings and fixtures, collectibles, jewelry, DVDs, video games and computers, art materials, books, science equipment, sporting goods and recreation equipment, and musical instruments.
Conclusion
The proposed rule, if adopted, will provide more clarity for many manufacturers in determining whether their product is considered a children’s product, but the rule may also result in certain products that manufacturers assumed were not children’s products being classified as such. With the penalty for violations of the CPSA being raised to $100,000 it is advisable for manufacturers to consult an attorney about whether their product will be considered a children’s product.
March 22, 2010 | Posted by
Kristin M Stastny
On March 10, 2010, the Consumer Product Safety Commission (CPSC) released a briefing package for its Notice of Proposed Rulemaking for Bassinets and Cradles under Section 104(b) of the Consumer Product Safety Improvement Act (CPSIA). The draft proposed rule makes the applicable voluntary standard—ASTM F2194-07a Standard Consumer Safety Specification for Bassinets and Cradles—mandatory and imposes a number of additions and modifications to strengthen the standard.
Section 104(b) of the CPSIA requires the CPSC to review current industry standards for durable nursery products and to implement mandatory requirements for such products. In developing standards under section 104, the CPSC is required to consult with representatives of consumer groups, product manufacturers, and experts to evaluate voluntary standards and to determine whether more stringent standards would further reduce the risk of injury associated with the products being regulated.
The CPSC initiated the consultation process with respect to bassinets and cradles in October 2009 during the ASTM International subcommittee meeting regarding the ASTM bassinet and cradle voluntary standard. Based on this ongoing consultation process and the evaluation of CPSC staff, the CPSC has determined to adopt the ASTM standards as mandatory standards with some additions and changes.
The ASTM Standard Consumer Safety Specification for Bassinets and Cradles was most recently revised in 2007 and addresses the following issues:
-Lead in paints
-Hazardous sharp edges or points
-Small parts
-Wood parts
-Scissoring, shearing, pinching
-Unintentional folding
-Openings
-Labeling
-Fasteners
-Corner posts
-Toy accessories
-Bassinet/cradle attachments to play yards/non-full sized cribs
-Spacing of rigid sized bassinet/cradle components
-Openings for mesh fabric sided bassinets/cradles
-Static load
-Stability
-Sleeping pad properties
-Protective components
The modifications to the ASTM standards recommended by the CPSC staff include updated warnings and new recommended performance requirements. Specifically, the CPSC rule proposes to limit the rocking/swinging angle and rest angle of certain rocking/swinging cradles, reduce the probability of fabric sided products forming bounded areas which may suffocate infants, and require a flatness performance requirement.
A bassinet/cradle is defined under the ASTM standards as “a small bed for infants supported by free-standing legs, a wheeled base, a rocking base, or one that can swing relative to a stationary base.” The proposed rule would update the ASTM definition to provide additional clarity to producers of what products are subject to the rule.
All of the recommended change to the ASTM standard are summarized in the Notice of Proposed Rulemaking.
Kristin Stastny is an Associate in the Regulatory Affairs Department at Dorsey & Whitney, LLP. Please see our web site at www.dorsey.com.
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