Thursday, June 10, 2010

CPSIA - Statute of Limitations Applicable to Schylling

To close the loop on the Schylling fine fiasco, I wanted to provide you with the language governing the statute of limitations applicable to this matter (and all other CPSC matters unless specifically overridden by statute).

For those of you who don't know, a "Statute of Limitations" is a provision in the law which states a maximum time after the occurrence of an event in which legal proceedings can be initiated. In the case of CPSC penalties, in the absence of a "tolling" agreement in which the warring parties agree to extend the time limit, these provisions are intentional limitations on the CPSC's power. There is longstanding public policy that underlies the concept of a statute of limitations going back to ancient English common law.

The applicable statute is 28 U.S.C. §2462 entitled "Time for Commencing Proceedings". It reads as follows: "Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon." [Emphasis added]

The Schylling lead-in-paint violations were clearly beyond the statute of limitations. By the way, there is no exception to the provisions of a statute of limitations if the regulator is "really mad" or if the violator is a "bad guy". It's an ABSOLUTE rule and works effectively even against serious violations; for instance, prosecution of felonies can be closed off by statutes of limitations. The issue with respect to Schylling's separate (but related) violation of "failure to report" is somewhat more controversial. When did the failure to report "occur"? The CPSC may be taking the position that the period relating to the failure to report begins when a report is finally made. In effect, then, the CPSC has interpreted the statute of limitations away for failures to report.

Arguably, this means that the CPSC reserves the right to penalize people for a failure to report going back to 1972, the year in which the agency was formed. Why not, they have the power . . . . . Everybody, keep an eye on your mailbox!

Don't tell me that this surprises you nowadays.

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