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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September 03, 2009 | Posted by
Mark Kaster
New requirements for children's produts under the Consumer Product Safety Improvement Act (CPSIA) are now in effect. The requirements include:
Lead Content
The limit for lead in children's products drops from 600 parts per million (ppm) to 300 ppm. After August 14, it will be unlawful to manufacture, import, sell, or offer for sale, a children's product that has more than 300 ppm of lead in any part (except electronics) that is accessible to children.
Lead in Paint and Similar Surface Coating Materials
The limit for lead in paint and similar surface-coating materials for consumer use drops from 600 ppm to 90 ppm. The lead paint limits also apply to toys and other articles intended for children as well as certain furniture products. Products subject to these limits cannot be sold, offered for sale, imported or manufactured after August 14 unless they meet the new lower lead limits.
Civil Penalties
Civil penalties increase substantially to a maximum of $100,000 per violation and up to a maximum of $15 million for a related series of violations. Previously, civil penalties were a maximum of $8,000 per violation and up to a maximum of $1.825 million for a related series of violations.
Tracking Labels
Manufacturers must place permanent distinguishing marks (tracking label) on any consumer product primarily intended for children 12 and younger made on or after August 14, 2009. The permanent marks must enable consumers to ascertain basic information, including the manufacturer or private labeler, location, the date of manufacture, and more detailed information on the manufacturing process such as a batch or run number. The permanent distinguishing marks must appear on the product itself and its packaging to the extent practicable.
Catalog Advertising
Advertising for certain toys and games intended for use by children from three to six years old must have warnings regarding potential choking hazards to children younger than three. The requirement to include warnings in Internet advertisements went into effect on December 12, 2008. There was a grace period for the requirement for catalogues and other printed materials, but this grace period expired August 9, 2009. All catalogues and other printed materials distributed on or after August 9, 2009, regardless of when they were printed, must include the appropriate warnings.
Contact us if you require more information about these requirements.
September 03, 2009 | Posted by
Mark Kaster
The Consumer Product Safety Commission (CPSC) issued a final rule that certain materials do not exceed the lead content limits specified under section 101(a) of the Consumer Product Safety Improvement Act of 2008 (CPSIA).
A copy of the new CPSC exemption rule can be found by clicking here.
The following materials do not exceed the lead content limits under section 101(a) of the CPSIA, provided that these materials have not been treated or adulterated with materials that could result in the addition of lead into the product:
(1) Precious gemstones: diamond, ruby, sapphire, emerald;
(2) Semiprecious gemstones and other minerals, provided that the mineral or material is not based on lead or lead compounds and is not associated in nature with any mineral based on lead or lead compounds (excluding any mineral that is based on lead or lead compounds including, but not limited to, the following: aragonite, bayldonite, boleite, cerussite, crocoite, galena, mimetite, phosgenite, vanadinite, and wulfenite);
(3) Natural or cultured pearls;
(4) Wood ;
(5) Paper and similar materials made from wood or other cellulosic fiber, including, but not limited to, paperboard, linerboard and medium, and coatings on such paper which become part of the substrate;
(6) CMYK process printing inks (excluding spot colors, other inks that are not used in CMYK process, inks that do not become part of the substrate under 16 CFR part 1303, and inks used in after-treatment applications, including screen prints, transfers, decals, or other prints);
(7) Textiles (excluding after-treatment applications, including screen prints, transfers, decals, or other prints) consisting of:
(a) Natural fibers (dyed or undyed) including, but not limited to, cotton, kapok, flax, linen, jute, ramie, hemp, kenaf, bamboo, coir, sisal, silk, wool (sheep), alpaca, llama, goat (mohair, cashmere), rabbit (angora), camel, horse, yak, vicuna, qiviut, guanaco;
(b) Manufactured fibers (dyed or undyed) including, but not limited to, rayon, azlon, lyocell, acetate, triacetate, rubber, polyester, olefin, nylon, acrylic, modacrylic, aramid, spandex;
(8) Other plant-derived and animal-derived materials including, but not limited to, animal glue, bee's wax, seeds, nut shells, flowers, bone, sea shell, coral, amber, feathers, fur, leather.
The CPSC also determined that certain metals and alloys do not exceed the lead content limits under section 101(a) of the CPSIA, provided that no lead or lead-containing metal is intentionally added. These include:
(1) Surgical steel and other stainless steel within the designations of Unified Numbering System, UNS S13800 S66286, not including the stainless steel designated as 303Pb (UNS S30360); and
(2) Precious metals: gold (at least 10 karat); sterling silver (at least 925/1000); platinum; palladium; rhodium; osmium; iridium; ruthenium, titanium.
The CPSC has stated that the determination that materials do not contain lead does not relieve a product from lead testing if the product or material is altered or modified so as to exceed the lead content limits
Important Practice Pointer:
The CPSC has stated that material safety data sheets (MSDS) are insufficient for purposes of demonstrating compliance with the lead limits. (See, 74 FR at 10478)
The CPSC is aware that there are many questions regarding component part testing and certification for lead content given that children's product may be made with a number of materials and component parts. The questions regarding testing and certification are significant because not all component parts may need to be tested if they fall under the scope of the exclusions approved by the CPSC.
The CPSC provides examples pertinent to the testing issue, noting that component parts would not need to be tested if they: (1) are inaccessible, as set forth under the Commission's regulations at 16 CFR 1500.87; (2) are or contain an electronic device exempt under the CPSC's regulations at 16 CFR 1500.88; or (3) are made of material determined by CPSC to fall under lead content limits.
However, all other accessible component parts in a product still need to tested and certified under section 102 of the CPSIA. The CPSC intends to address component part testing and the establishment of protocols and standards for ensuring that children's products are tested for compliance with applicable children's products safety rules, as well as products that fall within an exemption, in an upcoming rulemaking.
Please contact us if you have any questions.
September 03, 2009 | Posted by
Mark Kaster
The CPSC has issued proposed guidance to govern the assessment of civil penalties for alleged violation of product safety laws and regulations.
A copy of the CPSC proposed rule can be obtained by clicking here>
The CPSC is required by statute to consider certain factors in determining the amount of any civil penalty for violation of laws and regulations governed by the agency. These factors differ among the various CPSC administered laws (i.e., the CPSA, FHSA, FFA and CPSIA), but generally include the nature, circumstances, extent and gravity of the violation, the nature of the product defect, the severity of the risk of injury, the occurrence or absence of injury, the number of defective products distributed, and the appropriateness of the penalty in relation to the size of the business.
In July 2006, the CPSC published a proposed interpretative rule (71 FR 39248) that identified additional factors to be considered in assessing and compromising civil penalties under sections 20(b) and © of the CPSA. The factors identified in the proposed rule were in addition to those already required to be considered by statute in evaluating the appropriateness and amount of a civil penalty, and included: (1) a firm's previous record of compliance ; (2) timeliness of a firm's response; (3) safety and compliance monitoring; (4) cooperation and good faith; (5) economic gain from any delay or noncompliance; (6) a product's failure rate; and (7) any other pertinent factors.
The CPSC has withdrawn the July 2006 proposed interpretive rule, in favor of new guidance, which will govern CPSC’s penalty considerations. The new guidance illuminates the following factors that the CPSC must consider in determining a civil penalty:
(1) The nature, circumstances, extent and gravity of the violation. Under this factor, the CPSC will consider the totality of the circumstances surrounding a violation, including how many provisions of law were violated. The CPSC will continue to look at the enumerated statutory factors, as well as other factors (as described in subsection (b) below) that the CPSC may determine are appropriate, and consider all of the factors in determining the civil penalty amount.
(2) Nature of the product defect. The CPSC will consider the nature of the product hazard/substance for which a penalty is sought. A product defect under this factor includes violations for products that contain defects which could create substantial product hazards as referenced in the CPSA and defined and explained in 16 CFR 1115.4; regulatory violations of a rule, regulation, standard or ban; or product hazards presented by any other violation of the prohibited acts of section 19 of the CPSA.
(3) Severity of the risk of injury. Consistent with its discussion of severity of the risk at 16 CFR 1115.12, the CPSC will consider, among other factors, the potential for serious injury or death (and whether any injury required actual 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 such as children, the elderly, or those with disabilities).
(4) The occurrence or absence of injury. The CPSC will consider whether injuries have or have not occurred with respect to any product associated with the violation.
(5) The number of defective products distributed. The CPSC will consider the actual number of products or amount of substances imported or placed in the stream of commerce to distributors, retailers, and consumers.
(6) 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. The CPSC is required to consider the size of a business in relation to the amount of the proposed penalty. This factor reflects the relationship between the size of the business of the person charged and the deterrent effect of civil penalties. In considering business "size," the CPSC may look to several factors including the firm's number of employees, net worth, and annual sales. The CPSC may be guided, where appropriate, by any relevant financial factors to help determine a violator's ability to pay a proposed penalty including: liquidity factors; solvency factors; and profitability factors.
The CPSC is required by statute to consider how to mitigate the adverse economic impacts on small business violators only if those impacts would be "undue." What the CPSC considers to be "undue" will vary based upon the violator's business size and financial condition as well as the nature, circumstances, extent and gravity of the violation(s). When considering how to mitigate undue adverse economic consequences, the CPSC may also follow its Small Business Enforcement Policy set forth at 16 CFR ยง1020.5.
(7) Other factors as appropriate. In determining the amount of any civil penalty to be pursued when a knowing violation of the prohibited acts section of the CPSA, FHSA, or FFA has occurred, the CPSC may consider, where appropriate, other factors in addition to those listed in the statutes. Both the CPSC and the alleged violator are free to raise any other factors they believe are relevant in determining an appropriate penalty amount. Additional factors which may be considered in an individual case include, but are not limited to, the following:
(i) Safety/Compliance Program and/or System: The CPSC may consider, for example, whether a violator had at the time of the violation, a reasonable program/or system for collecting and analyzing information related to safety issues, including incident reports, lawsuits, warranty claims, and safety-related issues related to repairs or returns; and whether a violator conducted adequate and relevant premarket and production testing of the product(s) at issue.
(ii) History of noncompliance: The CPSC may consider if the violator has a history of noncompliance with the CPSC and whether a higher penalty should be assessed for repeated noncompliance.
(iii) Economic Gain from Noncompliance: The CPSC may consider whether a firm benefited economically from a delay in complying with statutory and regulatory requirements.
(iv) Failure of the violator to respond in a timely and complete fashion to the CPSC’s requests for information or remedial action: The CPSC may consider whether a violator's failure to respond in a timely and complete fashion to requests from the CPSC for information or for remedial action should increase the amount of the penalty.
Practice Pointer
The CPSC penalty factors will be codified at 16 CFR Part 1119. The CPSC staff will be required to follow the guidance, but can deviate as circumstances warrant. The CPSC does not intend to adopt a specific penalty matrix. We do expect to see some internal civil penalty consistency among various categories of CPSC enforcement actions.
In all CPSC enforcement actions, the alleged violator will be placed on notice that the CPSC believes a penalty is warranted. The alleged violator will be allowed to submit evidence and arguments that it is not subject to such a penalty, or that such penalty should be mitigated.
If you are notified of a potential CPSC civil penalty, it would be prudent to seek counsel to assist in response to the agency. The penalty factors need to be carefully enumerated and conveyed to the agency to mitigate penalty exposure.
Please contact us if we can assist you in CPSC enforcement matters.
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