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PRODUCT RESPONSIBILITY
STATUS
The House passed the
conference committee report version of H.R.4040, the Consumer
Product Safety Improvement Act, on July 30, 2008. The Senate
passed it on July 31, 2008. The President signed the bill
into law on August 14, 2008 as Public Law 110-314.
Passage is the
culmination of a long process for this legislation. Different
versions of the bill were passed by each of the chambers
earlier in this Congress. The House approved its version on
December 19, 2007. A different version of the bill was
approved by the Senate on March 6, 2008 by a 79-13 margin. A
conference committee engaged in extensive negotiations that
produced the final compromise that incorporated aspects of
both versions and modified some other aspects.
BACKGROUND
The U.S. Consumer
Product Safety Commission (CPSC) has jurisdiction over about
15,000 types of consumer products. The CPSC draws its
authority from five statutes: the Consumer Product Safety Act
(CPSA); the Federal Hazardous Substances Act (FHSA), the
Flammable Fabrics Act (FFA), the Poison Prevention Packaging
Act (PPPA), and the Refrigerator Safety Act, (RSA). The CPSA
and FHSA are the most frequently invoked authorities.
The CPSA, enacted in
1972, establishes the CPSC, defines its basic authority, and
provides that when the CPSC finds an unreasonable risk of
injury associated with a consumer product it can develop a
standard to reduce or eliminate the risk. The CPSA also
provides the authority to ban a product if there is no
feasible standard, and it gives CPSC authority to pursue
recalls for products that present a substantial product
hazard.
The FHSA requires that
certain hazardous household products ("hazardous substances")
bear cautionary labeling to alert consumers to the potential
hazards that those products present and to inform them of the
measures they need to take to protect themselves from those
hazards. Any product that is toxic, corrosive, flammable or
combustible, an irritant, a strong sensitizer, or that
generates pressure through decomposition, heat, or other means
requires labeling. If the product may cause substantial
personal injury or substantial illness during or as a
proximate result of any customary or reasonable foreseeable
handling or use, including reasonable foreseeable ingestion by
children, labeling is required.
The FHSA gives the CPSC
authority to ban by regulation a hazardous substance if it
determines that the product is so hazardous that the
cautionary labeling required by the act is inadequate to
protect the public. Any toy or other article that is intended
for use by children and that contains a hazardous substance is
also banned under the FHSA if a child can gain access to the
substance. In addition, the act gives the CPSC authority to
ban by regulation any toy, or other article intended for use
by children, which presents a mechanical, electrical, or
thermal hazard.
Reporting
Under the CPSA, there
are three principal reporting requirements. Any manufacturer,
importer, distributor, or retailer of consumer products must
notify CPSC immediately if it could be concluded that one of
its products: (a) has a defect that creates a substantial risk
of injury to the public; (b) creates an unreasonable risk of
serious injury or death; or (c) violates a consumer product
safety standard or ban of the product. A manufacturer must
report to CPSC when any of its consumer products has been
involved in three or more lawsuits in a two-year period. Each
lawsuit must have alleged death or grievous bodily injury and
resulted in a settlement or a court judgment in favor of the
person who filed the suit. A manufacturer, distributor,
retailer, or importer of marbles, small balls, latex balloons,
or toys or games that contain such items must report to CPSC
any incidents of children choking on those items.
The National Electronic
Injury Surveillance System, (NEISS) monitors patients who come
into 100 hospital emergency rooms nationwide. From it, the
CPSC develops statistical estimates of product-related
injuries. Last year the NEISS system developed reports on
product-related injuries from over 360,000 emergency room
visits.
Enforcement
In addition to acting on
the reports required by the law, the CPSC enforces existing
regulations and laws by conducting both domestic surveillance
through inspections of the regulated industry and import
surveillance at ports of entry and by following up on injury
reports, consumer complaints, trade complaints, or other
allegations or indications that a firm is manufacturing or
distributing a consumer product not in compliance with the
law.
Under the CPSA, any
person who knowingly violates the CPSA is subject to a civil
penalty not to exceed $8,000 for each such violation. Under
the FHSA, the CPSC may seek a civil penalty of up to $8,000
per violation product, up to a maximum of $1.825 million for
any related series of violations. There are criminal
penalties and the CPSC can seek injunctive relief or seize
products.
Where appropriate, based
on the nature of the hazard and the likelihood of injury
associated with the non-complying product, the CPSC staff will
request that the firm recall the product from the marketplace,
including from consumers who already own the product. It may
provide for the return of a product to the manufacturer or
retailer for a cash refund or a replacement product; for the
repair of a product; and/or for public notice of the hazard.
Once the CPSC staff
determines a product violates a specific statute or
regulation, CPSC compliance staff generally notifies the
responsible firm (the product manufacturer, importer,
distributor, or retailer). Notification to the responsible
firm is usually in the form of an official letter, referred to
as a Letter of Advice (LOA).
While the CPSC has the
authority to require a mandatory product recall, due to the
lengthy and costly nature of the proceeding that it must
undertake in order to issue such a recall, the majority of the
recalls are voluntary on the part of the recalling firm, the
details of which the CPSC negotiates with that firm, generally
after a significant exchange of information between the firm
and the CPSC.
Approximately half of
the recalls are initiated under a “Fast Track” recall
program. Under this program the subject firm agrees to
initiate a recall within 20 days after being contacted by the
CPSC, generally in exchange for the lack of a formal finding
by the CPSC that a product is defective and a substantial
product hazard exist.
In fiscal year 2006, the
CPSC announced 466 recalls of defective products, representing
over 120 million individual products. Other corrective
actions, short of a recall, including modifying the product,
issuing a consumer warning, or through other means, were
ordered for over 300 products directly involving a risk of
injury to children.
Import Safety
The United States
currently imports approximately $2 trillion worth of products
annually from more than 150 countries. In Fiscal Year 2006,
more than half of all imports to the United States originated
from five countries: Canada ($304 billion), China ($275
billion), Mexico ($192 billion), Japan ($143 billion), and
Germany ($86 billion).
NEW LAW
The Consumer Product
Safety Improvement Act of 2008 (CPSIA) represents a
dramatic change of course both in terms of regulatory and
enforcement philosophy, and a significant enhancement of the
role of the Consumer Product Safety Commission in regulating
the manufacture and sale of consumer products.
While much of the
attention has been focused on the safety of children’s
products in general, and lead and phthalates in children’s
products, there are also provisions that apply to most
consumer products. The following summary is not
all-inclusive. There are many details relating to the
regulatory process that we have not included. There are
provisions related to the funding and structure of the CPSC
which we have not included. There are also provisions related
to specific products.
CONSUMER PRODUCTS
IN GENERAL
Public Database
The CPSC shall establish
and maintain a database on the safety of consumer products,
and other products or substances regulated by the CPSC, which
is publicly available, searchable, and accessible through the
Internet website of the CPSC. The database shall contain
reports of harm relating to the use of consumer products, and
other products or substances regulated by the CPSC, that are
received by the CPSC from consumers; local, State, or Federal
government agencies; health care professionals; child service
providers; and public safety entities. It will also include
information derived from the CPSC’s own corrective action
programs.
Supply Chain
Identification
Under the CPSIA,
if the CPSC asks for it, every importer, retailer, or
distributor of a consumer product (or other product or
substance over which the CPSC has jurisdiction under the
CPSIA or any other Act) shall identify the manufacturer of
that product by name, address, or such other identifying
information to the extent that such information is known or
can be readily determined by the importer, retailer, or
distributor.
Every manufacturer shall
identify by name, address, or such other identifying
information each retailer or distributor to which the
manufacturer directly supplied a given consumer product (or
other product or substance over which the CPSC has
jurisdiction under the CPSIA or any other Act) as well
as each subcontractor involved in the production or
fabrication of such product or substance and each
subcontractor from which the manufacturer obtained a component
thereof.
Penalties
The maximum civil
penalties that the CPSC can assess are increased to a maximum
of $100,000 for a violation and a maximum of $15 million for a
series of related violations.
Recall and
Corrective Actions
The CPSC has been given
“enhanced” authority regarding recalls and corrective
actions. Congress has specified what it wants included in
recall notices.
State Attorneys
General
State Attorneys General
have been given new rights to initiate injunctive actions in
federal courts.
Whistleblower
Protections
No manufacturer, private
labeler, distributor, or retailer, may discharge an employee
or otherwise discriminate against an employee with respect to
compensation, terms, conditions, or privileges of employment
because the employee, whether at the employee's initiative or
in the ordinary course of the employee's duties (or any person
acting pursuant to a request of the employee):
- provided,
caused to be provided, or is about to provide or cause to be
provided to the employer, the Federal Government, or the
attorney general of a State information relating to any
violation of, or any act or omission the employee reasonably
believes to be a violation of any provision of the CPSIA
or any other Act enforced by the CPSC, or any order, rule,
regulation, standard, or ban under any such Acts;
- testified
or is about to testify in a proceeding concerning such
violation;
- assisted
or participated or is about to assist or participate in such
a proceeding;
- objected
to, or refused to participate in any activity, policy,
practice, or assigned task that the employee (or other such
person) reasonably believed to be in violation of any
provision of the CPSIA or any other Act enforced by
the CPSC, or any order, rule, regulation, standard, or ban
under any such Acts.
A “whistleblower” would
pursue a complaint through an administrative process that
involves the U.S. Department of Labor and a court appeals
process is provided. Relief could include all relief
necessary to make the employee whole, including injunctive
relief and compensatory damages, including reinstatement with
the same seniority status that the employee would have had,
but for the discharge or discrimination; the amount of back
pay, with interest; and compensation for any special damages
sustained as a result of the discharge or discrimination,
including litigation costs, expert witness fees, and
reasonable attorney's fees.
Pre-emption
The pre-emption issue is
a complicated one and there remain various schools of thought
regarding exactly what state laws might or might not be
pre-empted. The CPSIA does provide that the law known
as Proposition 65 in California is specifically not
pre-empted: “Nothing in this Act or the Federal Hazardous
Substances Act shall be construed to pre-empt or otherwise
affect any warning requirement relating to consumer products
or substances that is established pursuant to State law that
was in effect on August 31, 2003.”
DEFINITION OF A
CHILDREN’S PRODUCT
The process of
understanding the requirements of the CPSIA as they
apply to children’s products must begin with the definition.
The term “children's product” means a consumer product
designed or intended primarily for children 12 years of age or
younger. In determining whether a consumer product is
primarily intended for a child 12 years of age or younger, the
following factors shall be considered:
- A
statement by a manufacturer about the intended use of such
product, including a label on such product if such statement
is reasonable.
- Whether
the product is represented in its packaging, display,
promotion, 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 CPSC
LEAD
Any children's product
that contains more lead than the limit established by the
CPSIA shall be treated as a banned hazardous substance
under the existing Federal Hazardous Substances Act (FHSA).
Beginning on February 10, 2009, the lead limit will be 600
parts per million (ppm) total lead content by weight for any
part of the product. Beginning on August 14, 2009, the lead
limit will be 300 ppm total lead content by weight for any
part of the product. Beginning on August 14, 2011, the level
will be lowered to 100 ppm, unless the CPSC determines that a
limit of 100 ppm is not technologically feasible for a product
or product category. The CPSC may make such a. determination
only after notice and a hearing and after analyzing the public
health protections associated with substantially reducing lead
in children's products.
The CPSC may, by
regulation, exclude a specific product or material from the
prohibition if the CPSC, after notice and a hearing,
determines on the basis of the best-available, objective,
peer-reviewed, scientific evidence that lead in such product
or material will neither result in the absorption of any lead
into the human body, taking into account normal and reasonably
foreseeable use and abuse of such product by a child,
including swallowing, mouthing, breaking, or other children's
activities, and the aging of the product; nor have any other
adverse impact on public health or safety.
The lead limits
established shall not apply to any component part of a
children's product that is not accessible to a child through
normal and reasonably foreseeable use and abuse of such
product, as determined by the CPSC. A component part is not
subject to the lead limits if such component part is not
physically exposed by reason of a sealed covering or casing
and does not become physically exposed through reasonably
foreseeable use and abuse of the product. Reasonably
foreseeable use and abuse shall include swallowing, mouthing,
breaking, or other children's activities, and the aging of the
product. Paint, coatings, or electroplating may not be
considered to be a barrier that would render lead in the
substrate inaccessible to a child, or to prevent absorption of
any lead into the human body, through normal and reasonably
foreseeable use and abuse of the product.
By August 14, 2009, the
CPSC shall promulgate a rule providing guidance with respect
to what product components, or classes of components, will be
considered to be inaccessible.
If the CPSC determines
that it is not technologically feasible for certain electronic
devices, including devices containing batteries, to comply
with the lead limits, the CPSC, by regulation, shall issue
requirements to eliminate or minimize the potential for
exposure to and accessibility of lead in such electronic
devices, which may include requirements that such electronic
devices be equipped with a child-resistant cover or casing
that prevents exposure to and accessibility of the parts of
the product containing lead.
Effective August 14,
2009, the limit for lead in paint is .009 percent.
CHILDREN’S
PRODUCTS IN GENERAL
Testing and
Certification
Before importing for
consumption, warehousing, or distributing in commerce any
children's product that is subject to a children's product
safety rule, every manufacturer of such children's product
(and the private labeler of such children's product if such
children's product bears a private label) shall submit
sufficient samples of the children's product, or samples that
are identical in all material respects to the product, to a
third-party accredited conformity assessment body to be tested
for compliance with such children's product safety rule; and
based on such testing, issue a certificate that certifies that
such children's product complies with the children's product
safety rule based on the assessment of a third-party
conformity assessment body accredited to conduct such tests.
A manufacturer or
private labeler shall issue either a separate certificate for
each children's product safety rule applicable to a product or
a combined certificate that certifies compliance with all
applicable children's product safety rules, in which case each
such rule shall be specified.
Every certificate
required by law shall identify the manufacturer or private
labeler issuing the certificate and any third-party conformity
assessment body on whose testing the certificate depends. The
certificate shall include, at a minimum, the date and place of
manufacture, the date and place where the product was tested,
each party's name, full mailing address, telephone number, and
contact information for the individual responsible for
maintaining records of test results.
Every certificate
required by law shall be legible and all content required
shall be in the English language. A certificate may also
contain the same content in any other language. Every
certificate shall accompany the applicable product or shipment
of products covered by the same certificate and a copy of the
certificate shall be furnished to each distributor or retailer
of the product.
The CPSIA sets
forth a framework for accreditation, what constitutes
third-party testing, and various other aspects of the testing
and certification process. It also establishes a process for
the adoption of mandatory standards for specific toys
including the interim adoption of ASTM International Standard
F963-07 Consumer Safety Specifications for Toy Safety (ASTM
F963) as a mandatory standard.
The CPSIA sets
forth a timetable for establishing accreditation requirements
for various product categories. For example, not later than
December 12, 2008, the CPSC shall publish notice of the
requirements for accreditation of third-party conformity
assessment bodies to assess conformity with the requirements
of the CPSIA with respect to children's metal jewelry.
The CPSC will be
required to establish protocols and standards:
- for
ensuring that a children's product tested for compliance
with an applicable children's product safety rule is subject
to periodic testing, when there has been a material change
in the product's design or manufacturing process, including
the source of component parts.
- for the
testing of random samples to ensure continued compliance.
- for
verifying that a children's product tested by a conformity
assessment body complies with applicable children's product
safety rules.
Tracking Labels
Effective August 14,
2009, the manufacturer of a children's product shall place
permanent, distinguishing marks on the product and its
packaging, to the extent practicable, that will enable:
- the
manufacturer to ascertain the location and date of
production of the product, cohort information (including the
batch, run number, or other identifying characteristic), and
any other information determined by the manufacturer to
facilitate ascertaining the specific source of the product
by reference to those marks;
- the
ultimate purchaser to ascertain the manufacturer or private
labeler, location and date of production of the product, and
cohort information (including the batch, run number, or
other identifying characteristic).
Advertising for
Toys and Games
Any advertisement by a
retailer, manufacturer, importer, distributor, or private
labeler (including advertisements on Internet websites or in
catalogs or other printed materials) that provides direct
means for the purchase or order of a product for which a
cautionary statement is required by law shall include the
appropriate cautionary statement displayed on or immediately
adjacent to that advertisement,
PHTHALATES
Beginning on February
10, 2009, it shall be unlawful for any person to manufacture
for sale, offer for sale, distribute in commerce, or import
into the United States any children's toy or child care
article that contains concentrations of more than 0.1 percent
of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP),
or benzyl butyl phthalate (BBP).
There will be an interim
prohibition on other phthalates until the CPSC decides whether
they should be exempt. Beginning on February 10, 2009, and
until the CPSC decides otherwise, it shall be unlawful for any
person to manufacture for sale, offer for sale, distribute in
commerce, or import into the United States any children's toy
that can be placed in a child's mouth or child care article
that contains concentrations of more than 0.1 percent of
diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or
di-n-octyl phthalate (DnOP).
OUTLOOK
There are many
regulatory projects the CPSC must take on to fill in many of
the details. In addition, there is almost certain to be legal
challenges to interpretations of the law.
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