CPSIA - A Warlord Announces Himself

Our country's Federal system of law is based on a concept of legal hierarchy. Under the Supremacy Clause in Article VI of the Constitution, Federal law reigns supreme over State and local laws. Arguably, this provision was essential to the forging of a single nation from 13 Colonies by the Founding Fathers. Supremacy of Federal Law enables our Federal government to impose rules that benefit us as a nation over the parochial interests of States that might be contrary to the common weal. We depend on this system.

Unfortunately, the CPSIA by design degrades the supremacy of Federal law by giving wide latitude to State Attorneys General (SAGs) to independently enforce the law as they see fit. States also have the right to create their own safety laws with few restrictions because of weak preemption. Congress did this by plan. Notably, to do otherwise would have caused conflict with California's cherished Proposition 65 Consumer "Right to Know" law. As business people and as consumers, should we really care about this legal "technicality"? To answer this question, let’s look at the alternative.

Not every country has the benefit of a well-organized federal system. Some balkanized countries suffer from independent and uncooperative internal territories. This was the case in Europe before the European Union, as each country had its own rules and regulations, enforcement policies and courts. Trade is often a casualty of balkanization as internal boundaries or borders become points of resistance – or taxation. These internal divisions may not even be legal in nature, but rather tribal or power-based. This is the situation in Iraq.

The Americans got a rude surprise when the reality of the Iraq invasion set in: Iraq was not like home. What they believed could become a homogeneous nation was in fact a fractured, tribal land ruled by competing warlords. To move from place to place safely, Coalition forces had to negotiate and cultivate, territory by territory, appealing to each local leader (warlord) for support and cooperation. There was no way to implement rules centrally – they had to be negotiated neighborhood by neighborhood. This was and remains an uphill battle. Interestingly, similar problems bedevil the Americans in Afghanistan.

The CPSIA empowers SAGs to become modern American Warlords. These often ambitious local elected officials have no obligation to abide by CPSC policy, legal opinions or even Commission decisions, nor do they have any obligation to even inform the CPSC of their enforcement activities (until they file suit). Thus, as created by Congress under the terms of the CPSIA, there are now essentially 51 schemes of laws and 51 safety warlords governing the children's products marketplace. This remarkable "improvement" in the law is said to be sacrosanct to our Congressional leaders (read, Democrats) and not up for discussion. This is very worrisome to me – I think I do care about this. Are the SAGs going to behave consistently with national policy, only stepping in when the CPSC is not following its own rules – or will they do as they please, damn the consequences? Might the SAGs even make up their own law? Will the States behave themselves and play for the common good?

For answers, let us look westward. On March 25, California Attorney General Edmund Brown wrote a letter to the CPSC responding to its call for comments on the new phthalates test method and the draft approach for determining which products are subject to Section 108 phthalate ban.. See http://www.learningresources.com/text/pdf/CalAGPhthalateLetter25Mar09.pdf. Never mind that the CPSC has issued its interpretation of the CPSIA on phthalate testing and the phthalate bans, Warlord Brown will be doing things differently in his tribal region, California. In this remarkable letter, Warlord Brown announces that notwithstanding whatever test procedure the CPSC might settle on, the tribal region of California intends to enforce its phthalates ban component by component. Take that, Federal system! In a friendly gesture, Warlord Brown encourages the CPSC to see things his way. He also notes strongly that phthalates concentrations of 0.1% should be considered an overall limit, not phthalate by phthalate, which implies another serious division in enforcement policy. I am sure California businesses are rejoicing over Warlord Brown’s enlightened stance.

[Interestingly, one of Warlord Brown's arguments is that the CPSIA is modeled on the California ban, and thus, the interpretation of the law must follow California’s (namely, his). As a resident of Illinois, I am somewhat less sympathetic to this view. I did not have a chance to vote for or against this elected official and used to think that Federal policy was allowed to vary from that of California.]

The implications of the Brown letter are shattering. This letter is tantamount to a declaration of the supremacy of California law over Federal law. All hail Sacramento, our new national Capitol! The failure of Congress to create a simple, clear, prophylactic preemption rule, and to drive SAGs out of the children's products safety law enforcement business, will have a severe depressing effect on commerce. Of course, the CA power broker gang of Pelosi, Waxman, Boxer and Feinstein is not likely to permit any restrictions to be placed on their home state SAG. The reality is that the vast majority of companies cannot manage different legislative schemes governing their products. Most U.S. companies do not employ lawyers on their staff and even if they did, could not afford to monitor, much less accommodate, the shifting sands of 50 States' rules and enforcement policies. Presumably then, businesses will either learn to live with trade-inhibiting local rules with all the risk that goes along with it, or just give in to the most aggressive Warlords. Of course, were the latter to occur, a competition between Warlords would result, to determine which one is the toughest hombre on the range. Many companies would leave the marketplace were that to occur. I think you can count on this Democratic- controlled Congress to sit idly by and watch the spectacle with delight.

This is but one of many terrifying aspects of the CPSIA. It is not the one on people’s minds today because it is not generating expense . . . yet. This kind of risk will hit someone, sometime. So far, California has announced a broad settlement with toy companies over violations of local lead laws (http://ag.ca.gov/newsalerts/print_release.php?id=1636), and 39 SAGs feasted on Mattel for $12 million in another action (https://mail.learningresources.com/exchweb/bin/redir.asp?URL=https://mail.learningresources.com/exchweb/bin/redir.asp?URL=http://www.azag.gov/press_releases/dec/2008/Mattel%252520CJ.pdf ). When this moves downstream, the children's markets we depend on, that you depend on, will shrivel before your eyes. You heard it here first. It’s time to Amend the CPSIA before it's too late.