CPSIA - ICPHSO Update on Recall Law and Procedures

This panel discusses technical legal issues. You need to hire a lawyer to explore these issues. This blog is not a substitute for qualified legal representation. As previously noted, I am working off my notes, too. Please proceed with due and appropriate caution.

Panel included

• Eric Stone, K&L Gates LLP
• Georgia Ravitz, Arent Fox LLC
• David Baker, Law Offices of David Baker LLC

Eric Stone: Section 15(a) of CPSA limits the agency's authority to pursue only items presenting a substantial risk of injury or death. The agency has the right to sue for the same thing under Section 15(c) (mandatory recalls, very rare).

The prior law allowed manufacturers to elect the form of recall program. The CPSIA changed that, and gives the CPSC the authority to make those choices now.

Under Section 15(j), the agency can make a "substantial product hazard" findings across an entire product category, essentially by way of rulemaking. There are certain prerequisites to taking this action. The poster child for this is drawstrings in hoodies.

New violations of law INCLUDES reselling recalled items EVEN IF it was wholly voluntary or initiated entirely by the company without CPSC judgment. That recall is also enforceable in 51 jurisdictions. [Something to think about before you climb on the Fast Track Recall freight train . . . .] False statements or "attempting to mislead" the CPSC has dramatic implications under the new law. Don't go there . . . .

New penalty factors include a failure of the violator to respond "in a timely or complete fashion to the CPSC's requests for information and immediate action". Hmmm. Felony penalties now include asset forfeiture. Yep, that baby's raising its head again. In theory, the government can take your assets which it believes you have gotten through ill-gotten gains, like your house, your business, your buildings or plant. Hmmm. Love that CPSIA . . . .

David Baker:

1. "Substantial Risk of Injury" - no definition in the statute or in the legislative history. CPSC and the courts (Mirama Enterprises case) have interpreted it. Factors include death, grievous bodily injury (mutilation, dismemberment, severe burns, injuries likely to require extensive hospitalization). He asserts that MANY of the recalls initiated last year do NOT meet this standard. [RW: Where have I heard that before???] More than 1/3 of recalls do not involve injury AT ALL and many of the others fall far short of "grievous bodily injuries". DB: Should the CPSC be taking these cases? Should they simply say thanks for the report but no action is required? [Corrected at David Baker's request 4-11-11.]
2. Fast Track versus Slow Track - Express lane to a press release. No "finding" of a defect, possibly helpful in a product liability case. Fast Track cases aren't always so "fast". Are there cases in FT that because they have no injuries shouldn't be there? Is there still a slow track?
3. Penalty phase - "NO GOOD DEED GOES UNPUNISHED." Every recall files is reviewed by the General Counsel's office for late reporting, including those without injuries. There are MANY civil penalty cases being prosecuted out there now. [This could be you, baby.] Is the CPSC going after its own constituency? There is a very accomplished ex-U.S. Attorney now on staff at the CPSC (I think he is referring to Mary Murphy).

Ouch.

Last to present is Georgia Ravitz on Section 6(b) (unilateral press releases by the CPSC and their coercive power). Information that manufacturers submit to the CPSC are protected from disclosure to the public. Section 6(b) is the section governing procedures for releasing such information. [This is why Sectionn 6(b) is continually under attack by consumer groups. Their need for information trumps the interest of manufacturers in this confidentiality pledge. . . or at least so they say.]

CPSIA amendments to Section 6(b) gives the agency the right to issue unilateral press releases. The CPSC must "find" that the situation is so urgent that public interest in immediate release of information about a product hazard over the time permitted for review under Section 6(b).

Gives examples of such unilateral releases. The first one related to Simplicity bassinets. [They were already bankrupt and their assets had been auctioned off.] Other examples include the Witco "Recall to Repair" stadium light poles. GR notes that there is some concern that this release evidenced the CPSC acting in a rushed manner.

GR wondered aloud whether the right to preemptively issue press releases is being used "appropriately". [Georgia is very polite.] She quotes from the legislative record to note that Congress wanted to give the CPSC the ability to inform the public about "hazardous products". In other words, there must be certainty that the product is actually hazardous. She quoted from a speech from Chairman Tenenbaum where she indicated that the agency will use its powers to get its way, and then quoted from my December 2010 Senate testimony on coercive incidents at the agency. . . .

GR says that if the new powers under 6(b) are being used to coerce agreement, then the provision is being misused or being used in a way not intended by Congress. [I agree.] Coercion stifles meaningful dialogue. She thinks this provision should be used as a last resort and only use when there is no responsible party left (bankruptcy) or when the violator is clearly abusing the process through foot dragging.

GR calls for a return to "the way it used to be", namely a more open and less coercive deliberation at the agency over disputes. David Baker indicates that he has NEVER overturned a Preliminary Determination letter. [CPSC as judge and jury. That's a tough combo to overcome.]

Eric Stone: How do you overcome the impression that a company is "evil"? Baker - meetings at the agency are much rarer today, most communciations by phone call or email. Leads to more disagreements and makes disputes harder to resolve. Speed leads to this manner of communication. GR: My experience is that expressing a cooperative attitude with CPSC compliance officers will typically be reciprocated.

Gotta go catch my plane . . . .

CPSIA - ICPHSO Mock Civil Penalty Jury Exercise

There has been only ONE court decision relating to late reporting penalties, and it was a resounding victory for the government. A juice company lost a case in California in federal court. Since there is no little law on the subject, the presenters today assert that there is no way to predict how a future case might be decided.

The panel today:

• Eric Rubel, Arnold & Porter LLP
• Cheryl Falvey, GC of CPSC
• Sean Laane, Arnold & Porter LLP
• Richard Levie, retired Judge and current arbitrator/mediator
• Mary Murphy, Asst GC, Div. of Compliance, CPSC

The panel presentation was designed as a mock trial. Both sides of the case will be presented, and you can clearly how both sides will portray this incident and both are compelling.

First to present was Mary Murphy on behalf of the government. She emphasized the facts of the injury to the child. This is clearly how you and your company will be made to look worst. This is no surprise and is standard fare for a plaintiff in a lawsuit. She likewise related the prior reporting of the risk or incidents (to the company and to the CPSC) that suggested the hazard.

Needless to say, this is the reason that consumer groups want the database. They want to create a body of evidence to coerce product changes ahead of injuries. Of course, any responsible company monitors market data (such as consumer reports) to do just that sort of thing. The database, however, is fodder for lawsuits and facilitates this kind argument. The likely impact is that the cases of plaintiffs will be strengthened and awards will grow.

Shall we take a trip down memory lane and remind ourselves of the principal source of funding for the consumer groups active in children's product safety? Are you surprised to know that it is trial lawyers and the plaintiffs bar?

Back to the presentation of Ms. Murphy. She's doing a good job making the manufacturer look bad, almost venal. She links the injury back to a failure to report. This is because of the asserted critical role of the CPSC in keeping America safe. She poses the question "would this injury have occurred but for the failure to report?" She argues that ten reports from consumers (of the hazard, loose beads on a high chair, not injuries) created an obligation to report based on a substantial risk of injury or death. She likewise anticipates that the defense will be that the manufacturer had no duty to report. She says that the late reporting only took place when the manufacturer's back was "up against the wall". Again, Murphy emphasizes her story about the motivation or mental state of the company.

More evidence used against the company included multiple written reports by the CPSC to them of consumer complaints. Ms. Murphy is painting a clear picture of a company that is not acting on a known safety issue. She indicates that the company ignored this information based on poor advice, despite internal admissions that "this was an accident waiting to happen".

You can see that the facts of this hypothetical case opens manufacturers up to bad behavior portrayals. I applaud the effort to make this clear - you need to take this on board. The facts of this case appear extreme and objectionable. Media and political over-reaction to this kind of corporate behavior sent the REST OF US down the river under the CPSIA.

The defense was offered by Sean Laane. He noted the responsible behavior of the company by repeatedly testing the goods using CPSC standards and CPSC-accredited independent labs. Noted that the CPSC tested the product TWICE after reports of incidents from consumers - and the products passed! [Note that any safety system that overly depends on testing will ALWAYS expose a company to risk if it is distracted from or chooses to ignore contrary information from the market. This is a basic flaw in the reasoning of the consumer groups and the folks behind the CPSIA.] He goes on to note that the CPSC can't have it both ways, since it never concluded that action was required based on the incidents it was aware of. After all, the CPSC had several reports and did nothing. Claims the CPSC takes a "gotcha" approach because although it claims "late reporting", it was well-aware of the issue long before the injury - and did nothing.

Laane notes the extensive investment of this company in safety. He questions whether there was a reasonable basis to conclude that there was an unreasonable risk of injury or death. Clearly the CPSC didn't feel it was an unreasonable risk itself! Also notes that you don't have to tell the CPSC about information the agency already possesses. Notes repeatedly that the CPSC's actions or inaction are based on their expertise and fact findings, thus confirming the reasonableness of the company's approach. Notes that companies have no obligation to make products utterly indestructible.

Laane noted that the person inside the company who called the condition "an accident waiting to happen" was not a QC person or responsible manager. Instead, he was a customer service rep, and relayed that message to the QC department for their evaluation. Child who was injured later fully recovered, and the company chose to immediately initiate a Fast Track recall.

An interesting point made by Levie is that the company's awareness of similar issues in similar products can be held against them. If they knew or SHOULD HAVE KNOWN about other recalls or notorious injury incidents reflects on their later decisions or inaction. [I am glad I don't make baby monitors . . . . This is a good lesson on the reality of the problem of "emerging hazards". Note that you are going to be judged not just on what you know, but also on what they assert you SHOULD have known.]

CF: One of the most persuasive arguments made by defendants is a track record of reporting to the CPSC. This shows a commitment to safety and cooperation with the CPSC, demonstrating trust that the CPSC will not recall product everytime.

Levie agreed that this fact pattern will also be persuasive to a judge.

All market participants need to think about this kind of issue and how they might fare if they face a similar dilemma.

CPSIA - ICPHSO Update on the Database

Cheryl Falvey announced at the beginning of this overtime Q&A session that she wants to have a civilized discussion of the problems of the database, because they want to solve problems. That said, she said she'd cut it short if it turns into a gripe session about the database "because I know you hate the database".

Nice, at least the General Counsel of the CPSC has an open mind! This reminds me of her aggressive and utterly unsympathetic suggestion at the November 2008 CPSC Lead Panel that we should all have a big "yard sale" of products that exceed the lead standard. Gave me a warm feeling then, gives me a warm feeling now.

I will try to craft some questions that she will find acceptable.

CF: Need to have your licensees register as part of the database. Licensors can also be listed as a "viewer" under the DB. They may not want that, because there could be liability issues.

[RW: Hmmm, I thought this database was all about empowering consumers. Liability? Empowering consumers to do WHAT?]

CF: More details given to licensors [aimed at Disney, who must have raised this question offline] plus some legal advice on how they should structure their licensing agreements "right now".

CF: It's a "complaint" database, not a "causation" database. [RW: This makes NO sense based on the stories they all tell about why they want the database implemented, especially the fantastic story told by Inez Tenenbaum in her keynote speech. She says she feels good when someone removes a product from use while the CPSC is working on a recall. This is CLEARLY all about making a JUDGMENT on the products - in other words, CAUSATION. It's a tall tale to contend that the general public will understand that this is a complaint database. Consume groups promote the database as a warehouse of the truth, not just a "blog". Cheryl Falvey is spinning yarns to justify her work on the database.]

CF: You are raising policy questions and this meeting is not about policy. We were dealt this hand and were told by the Commission to get the database up and running. If you disagree with the policy, you need to take it to the Hill. I am going to take other questions now.

[RW: So we cannot complain about the consequences of CPSC action on the database because they're just doing their job. We must hold them harmless and "get used to it". This is an old argument used by Falvey in past speeches - don't be in denial, it's coming, get used to it, take it on board. My question for you - do you like being treated this way? I don't.]

Q: We have been the victim of fraud where people submit pictures of "injury" pulled from the Internet. We also don't get enough data from you, may not have consumer's contact information and don't have the time or resources to properly research or resolve these accusations before the ten days are up. At that point, the damage is irreversible. What can we do to protect ourselves?

A: We have not had bad experiences in the "soft launch". We don't want you to be hurt, you should "raise" these issues. [Didn't she say this morning that they received so many photos that they had to get new servers? No problelms . . . .]

[RW: Fingers-in-ears. This does not correspond to the rules, Cheryl, and you didn't answer the question. The question notes that there won't be enough time or information to verify or sort out the claim before it's published. Why are you deaf to this? You know that your publication of this data CANNOT be remedied. Oh yeah, you are just doing your job.]

Q: Why can't you just test this system with people who have already registered and learn about the issues from this experience?

A: Your idea is a "great idea" and we will see if we can run with it.

[RW: Don't hold your breath.]

CF: We really want to talk about the brand and license issue!

Q: What will happen to me if an injury report blaming me for an exploding battery is actually counterfeit?

A: The interest is in protecting the public, that's the policy issue. The disclaimer seems to mean a lot to Cheryl, cures all these ills. She poses the question of whether bulking up the disclaimer.

[RW: The answer to all of these question boils down to the fact that manufacturers have no due process rights because their rights are deemed inferior to consumers. This is a policy decision, too, and is NOT part of the law. It's the philosophy of the CPSC these days, and is political in nature. Using Falvey to announce the policy makes it look more like a legal judgment, however. Falvey has not explained HOW due process rights guaranteed by the Constitution have been removed for U.S. corporations under the CPSIA.]

CF: Can't put off the March 11th implementation of the database.

[RW: Recall my remark about an open mind. This isn't a gripe session, this is a venting session hosted by Cheryl Falvey. She has no interest in making any changes - consumer groups get their way. Mike Pompeo's amendment better become law. The CPSC will do NOTING to address known defects in the database. As Falvey says, these are "policy" issues, outside her job spec.]

Q: Can manufacturers reply or comment privately?

A: Nope, if you comment, the comments need to be published. Only the confidential parts of the comment won't be posted. [RW: This is so unbelievably one-sided. It's victory for the left wing. They put their people in charge and let them run amok.]

Q: We share brands with other companies (think of celebrity brands). How will you handle notification tied to such brands on multiple products?

A: The tracking labels would really solve all of these problems! We need to be able to send the notice to somebody. We understand the gap and are working to make the system better. We have a lot of brand information already.

Q: We traditionally get written notices that identify us as a manufacturer of a halogen table lamp. We make 20 halogen table lamps. What will happen under the database?

A: You'll get the notice and if you can't give us information on the product, one of us will have to call the customer. In any event, the data will go up on the database.

[RW: This is a classic problem illustrating how manufacturers will be unable to verify information or contest information before it's posted. As Falvey demonstrates, CPSC policy is that this is the manufacturer's problem. This is a travesty. Ironically, the issue was subtle enough that the questioner (a large company) could not see that he is prevented from identifying the product - even to verify that he made it - but will be labeled the source of a product "incident". And Falvey says that a claim this lame will still make the cut to be published. Is that true? I wonder about that. If it doesn't make the cut, then Falvey can't match the rules to a scenario accurately. One way or another, it's a screwing. Thanks, CPSC!]

Q: If Li & Fung registers and gives my name as importer of record, who gets the notice?

A: We will go off the consumer complaint. Whoever is named will get the complaint. If they are registered, they will get it by email. If they are not, they get it snail mail. It's still going up in ten days.

[RW: It's worth recalling that I testified at the original database hearing. As was the case in three of my five appearances at the CPSC, it was at the CPSC's request. I gave a very detailed dissection of the database, and distinctly recall being cut off by the Commission for going past ten minutes. They asked me to give comments, fly out at my own expense, and then cut me off. This abysmal attempt at public policy is the result. Screwing from square one.]

What a nauseating way to finish out such a lovely day.

CPSIA - ICPHSO Update on Compliance and Field Operations

Marc Schoem moderated a discussion involving four other heads of department (he is an acting department head, too):

• Dean Woodard, Dir., Defect Investigation Div.
• Mary Toro, Dir., Regulatory Enforcement Div.
• Dennis Blasiua, Eastern District Div., Field Investigations Div.
• Kathleen Lisius, Compliance Investigator, Import Surveillance Div (standing in for the director today).

DW: This division has four teams. Fast Track Recall program does not let you off the hook for reporting violations. It does avoid a "Preliminary Determination". This is a very "successful" and very "positive" program. Less bureaucracy and less "red tape". "Saves lives" and "limits your exposure" to whatever issues there may have been.

[RW: It is ALSO one of the most remarkably coercive programs administered by the CPSC. You are very often, if not always, given a short period of time to decide whether to participate. By "short", this could mean HOURS to decide. Hope you are always at the ready!]

MT: Four teams based on hazard. Four team leaders and 16 compliance officers. Different backgrounds on the team, lots of tech know-how and skills. This team does a lot of advising and gives a lot of guidance to industry. Have more than double the previous total of regulations that they have to enforce. Field staff goes out to do inspections. Develop field investigation programs for the year. Now MUST report under Section 15 for a violation of a mandatory standard. [Them's a lot of reports!] All such items also have a certification requirement.

DB - Does hundreds of inspections annually. Surveys, too. Visits to consumer homes and "no one leaves in handcuffs". [He said this in a joking manner.] Has roughly 100 investigations but gets tens of thousands of complaints annually. [RW: Now all that crap will go into the database. Can we see any issues here?] Emphasizes the politeness of his investigators. [RW: I appreciate this approach. I take him at his word.]

DB: Says we need to monitor the Internet for consumer complaints online. The CPSC is monitoring it so you better. Hmmm. DB says this may warrant investigation or spawn an investigation. More and more will send out investigators or ask for proof of destruction of recalled merchandise. Apparently, the re-export of recalled merchandise is up to Tim Geithner. [Fortunately, he's not too busy . . . .]

KL: Import Surveillance Div: Last year, not surprisingly, set a record of samples taken at port. 91% of the samples were violations, but only two products were recalled. Stopping at the port prevented the recalls. [This is interesting data. Are they clairvoyant or does everything coming into this country violate this godforsaken law in SOME way?] In apparel imports, the "first thing they look for" is drawstrings. Don't go there. . . .

Q&A: What if you disagree with the conclusions of your compliance officer? What are your due process rights?

MS: You are encouraged to call "up the chain". We are concerned to be responsive and want to know if you feel something is amiss.

60% of recalls come in under the Fast Track Recall program. In other words, this decision is made to pick up the "benefits" of the FTR program but also muddy the water about the state of the law on "substantial product hazards".

[RW: This is a total cop-out on the part of the agency and contributes significantly to the confusion on the workings of the law. In addition, the defects in the FTR program make everything worse. Marc Schoem admitted during Q&A that you often have only a DAY to decide whether or not to participate, which is inherently coercive. For most companies, unprepared for a federal agency descending on them with an "offer that you can't refuse" with an eight hour time limit, the pressure can be overwhelming. It is not unusual to get this "fine" offer before all relevant facts are known, and even when basically NO relevant facts are known. One wonders if the Shrek glasses recall was one such event. See no evil, hear no evil, speak no evil?]

Why call everything a "recall"? MS: We like the word "recall" and think it's most effective to "get the word out". [See Nancy Nord's blogpost from earlier today. The word also has tremendous under the CPSIA - perhaps Mr. Schoem's favorite word needs to be revisited since things have changed. It is also a tough word when there is litigation going on.]

CPSIA - ICPHSO Update on CPSC Hazard ID and Reduction Efforts

Breakout session with Jay Howell and DeWane Ray.

Has 19 team members in ports of entry. Dedicated to working with Customs to ensure compliance with regulation. Looking over manifests and are focusing on problems products and "problem importers".

Jay's and DeWane's department also accredits labs. This is mandated by the CPSIA. Working on rules on how to get accreditation recognition and how you can lose that accreditation. Likewise, they are starting an audit function.

RW: It's amazing that we lived without all this until 2008. Has a single incident been revealed that justify this use of government funds? Not to my knowledge.

JH: Have 90 days to start using labs and if there are not enough labs within 90 days, the CPSC MAY stay the requirement until there are insufficient labs. Don't want to shut down an industry.

There are more lead-in-paint labs than anything else (more than 200).

New lab update: Located in Rockville, anticipating a Spring 2010 move-in.

Heavy metals work is focused on the eight metals mentioned in ASTM F963, Looking at it from a risk-assessment standpoint. [RW: That's somewhat odd these days. One wonders what constitutes a risk now. We can only hope that professional staff will exercise the same care as in the pre-looney era to assess real risks. Otherwise, your Toxic Metals Substitution Committee better stop substituting selenium for lead. I heard about you guys!]

JH: Reminded the group that 100 ppm lead standard is mandated by law unless deemed technologically infeasible [Brace for it . . . .]

Commission is not sure there is a real phenomenon of "recall exhaustion", meaning that the deluge of recalls has numbed consumers. Voluntary recalls are often driven entirely by the CPSC and that the CPSC doesn't even see the product.

RW: Then again . . . .

Again, Jay seemed the voice of reasonableness. It would be great to return to an era of trust with this agency. But when?

CPSIA - ICPHSO Keynote Speech by Inez Tenenbaum

This speech will no doubt be posted on the CPSC website shortly. I will add the link later, please forgive any errors in these notes.

Reviewed 2010 efforts and achievements.

1. New crib standards ("vastly improved").
2. Baby bath seats and walker rules
3. Cadmium in jewelry and children's products (held off what might have been a repeat of the lead recall fiasco). Turned back some shipments at the port. Are now screening for cadmium when they find low lead levels in children's products. Looking at cadmium in substrate in toys and in children's products generally. Technical staff has made their position on these issues "abundantly clear".
4. Toy safety improved. Recalls reduced from 172 in 2008 to 50 in 2009 to 44 in 2010. Lead recalls in 2010 were THREE. [RW: Obviously, lead is a huge issue.] This has helped to "restore" consumer confidence in toys.
5. Drywall initiative with HUD. Warnings about sleep positioners and baby slings.

As for 2011,

1. Looking forward to a "civil discussion" of the issues in 2011. The Commissioners go out to lunch together and aren't like the Sopranos. The Commission is not fractious. 85% of our votes are unanimous. We do disagree from time to time, but "hope to do so without personal or disparaging attacks".
2. 2010 was the year of the Consumer and 2011 will be "the year to get connected with the CPSC". [RW: Last year she promised us that 2011 would be the year of enforcement. I guess that lays ahead . . . .]
3. Will implement the Five Year Strategic Plan
4. Wants to use Neal Cohen's office
5. Launch the new database, assuming the government is "still open".
6. Continuing new Section 104 rules, Pool Safely initiative, educating consumers about safe sleep.

"Knocking on the door" on being the global leader in consumer product safety. Looking for an "even more rigorous" identification process for product hazards. Will turn hazard identification into injury reduction. Want "safety built into the products intended for our store shelves."

Touts her agency's agreement with the Chinese government on toy safety. Sampling and testing in China will help assure safety.

Touts Neal Cohen's efforts, and the efforts of the CPSC Beijing office. Re Small Business Ombudsman, it is dedicated "touch point" for small business for education. Many manufacturers might not know where to turn for information or to fully implement the new rules. Not trying to take away business from outside counsel. [She really said this.] Wants to facilitate the transfer of knowledge across industries.

[No mention of SBO advocating for small business or playing an active role in RESOLVING rules disputes or problems. Hmmm. A shoulder to cry on?]

Looking at a shifting supply base, bringing other countries into play. We're looking to prevent a repeat of the China problems.

Re toxic metals, lead and cadmium requirements are intended to create safeguards for the future. Need to expand our vision beyond lead and cadmium. She's got a nice long list of new things to be scared of. We want to be "leaders" in preventing harm from these metals. Need to avoid exposure from the substrate of toys or other products.

[RW: I think a few more tests will do us ALL a lot of good! I am CRAZY to stick around in this industry.]

Back to new crib standards. Cribs must be replaced by end of 2012 to come into compliance with the new rules. [RW: Stimulus plan!] Cribs compliant with the new rules will be available by June, we hope. Lots new rules in "safe sleep" and other juvenile products.

Database ready to roll in two weeks. Don't forget to ask CF "more questions" today at 4 PM. ["More" questions?] She respectfully disagrees with objections to the database. Her pledge is that they will educate consumers that the report should be accurate and safety-based. Let's not let perfect be the enemy of the good. Data warehouse will promote greater efficiency. Consumers will be more "empowered". If consumers withdraw products while the CPSC is working behind the scenes to issue a recall, that's a good thing in her view.

[RW: Is it a "good thing" if they withdraw from using products that are safe or are not subject to recall? Hmmm. That question was unaddressed.]

Recounts her advice on how to amend the CPSIA (functional purpose exception, should get the lead out if it's "practical" to be removed, 100 ppm should be prospective only, and small businesses and small batch manufacturers deserve some relief). Will work with Congress on other changes.

She says, change it but don't end it. Hmmm. Certainly remains open to making old suggested changes to the law.

Finally, pleased to share that starting on March 1, will launch the Chairman's Commendation Circle Program. There will be more details about the nomination process. Wants to highlight innovators and those who are working to prevent injuries every day. [Hmmm.]

Have the right team in place, willing to take action against those who don't follow the law. Forging a new regulatory approach with predictability and consumer confidence. If all of us can be partners in this effort, can build on the progress made in recent years.

RW: This is BY FAR the least threatening speech by Ms. Tenenbaum since she ascended to her chairmanship. Let's hope this signals a significant shift in tone and direction.

CPSIA - ICPHSO Database Panel

Cheryl Falvey, Moderator - I am so excited about this panel because I know how much everyone loves the database.

I assume she was joking. Of course, she might have been thinking of the New York Times . . . .

Members of the panel:

• DeWayne Ray, Dep. Dir., Hazard Identification and Reduction, CPSC
• Mark Schoem, Dep. Dir., Office of Compliance
• Melissa Hampshire, Asst. GC, Div of Enforcement and Information, CPSC
• Scott Wolfson, Dir., Information and Public Affairs, CPSC

Won't accept anonymous submissions but will only share the info if the reporter ("consumer") checks a box to allow it. Will prosecute false filings. Won't publish for ten days after sending out the info to the manufacturers. You get the "whole" ten days.

RW: I am feeling all tingly now!

I just received a comment on my blog: "I think the coming government shutdown is good in so many ways."

CF: First picture submitted to the database was of a baby's behind.

And I thought it would be of a horse's behind . . . .

SF: We are a data-driven agency. Where have we typically received our data? DR: We get data electronically from hospitals and buy death certificates. Put up a bizarre slide with arrows, clouds, pointers, illegible type and so on. This apparently outlines where the data comes from and goes. They call this slide the "cartoon".

I am getting too much material here. . . .

DR: We really this new data warehouse which will bring real value to the CPSC. This is where they get the tools they need to "do the job".

The description of the database did not incorporate any response to the vigorous and legitimate concerns of industry. Wayne Morris referred to the database as a "blog". Ahem - CPSC, any reply?

Which reports of harm will be "public-facing"? MH: Many specific requirements before they can move forward with notifying the manufacturer or publish in the database.

MS: Rarely will postings result in a call to a company. There will be a "triage" team to sort through the data looking for serious issues.

What kinds of "product incidents" will be included in the database? DR: We have an internal process for "material inaccuracy".

What if they identify the wrong manufacturer? MH: It would be so "great" if you register, since you will get immediate notice after we complete our review of the data for meeting minimum manufacturer. We don't want to identify the wrong manufacturer.

[RW: Most of the time, manufacturers will not have sufficient data to evaluate that information, nor does ten days provide sufficient time to get this work done. Let's not forget that there's a lot to do in running a business. It is not acceptable that this database becomes the top priority of our company. It's just not fair or sensible to make filings in this database a daily emergency. In addition, very often, identification of the product is the least of the worries. What about the substance of the accusation? What happened to "findings of fact" or determinations of responsibility? The database is very likely to become a standard part of litigation strategy. There's a shocker for you!!]

How can manufacturers make comments on the "report of harm"? MH: Manufacturers can make any comment it wants. In addition, you can object to the inclusion of "confidential information". Can also claim that the filing is "materially inaccurate".

[RW: The latter two objections are as likely to be successful as an exemption from the "any lead" requirement. What, there are exemptions possible - look at the CPSIA . . . . So far, there are zero exemptions issued in three years. And there will be very few or no legitimate objections that stand up in the database process.]

CF: We rarely if ever receive confidential information from consumers. Todd Stevenson says it has happened twice since 1972. Staff will scrub the information to prevent this, too. Material inaccuracy is defined as false and misleading and so substantial as to materially mislead consumers. Burden of proof is on the manufacturer to supply EVIDENCE to support their claim of materially inaccuracy. The issue they will be most concerned about is materially inaccuracy relating to hazards. The agency EXPECTS manufacturers to call consumers in those ten days to figure out whether the claim is legitimate.

CF: We have received so many pictures during the soft boot of the database that we need new servers. It's pretty astounding.

[RW: OMG. This is going to be a feeding frenzy when Scott Wolfson puts his machinery into motion. Why do we need the government to play this role in the market? How are we going to stay in business when the government is encouraging litigation and brand destruction???]

CF: The database has a disclaimer that the agency can't verify or stand behind the accuracy of the database. We have no opinion on "causation".

RW: We are SOOOO screwed.

CF: Mentioned the DryMax diaper crisis that took a full year to resolve. [Under the database, every single claim would appear for a year until it emerges that each and every one was false and wrong. Too bad for P&G, I guess.]

RW: So so so screwed.

MH: Discussed link between the database filings and Section 6(b) disclosures. Ditto for FOIA process. [Based on my experience, FOIA couldn't take much of their time, since finishing off FOIA responses is . . . not a priority.]

Tell us about "education and outreach" about the database. SW: This is a tool for consumers. It's all about the back end.

RW: Now you know where you'll be getting it.

SW: It is extremely important to sign up for the portal. "Snail mail" won't work "as effectively". Think of the ten day window. 700 companies have signed up but it should be in the thousands.

RW: Maybe Aston Kutcher can help!

SW: On the consumer side, Hotline should take fewer calls. Watns to see the reports shift to the database. Will use the Twitter platform to publicize the database, plus blogs. Will continnue to promote the database because they see it as a benefit to consumers. Expects the database to start filling in March but it may as long as a month to have enough "data" to make the searching function to become "useful".

RW: Plaintiff lawyers, take note! Don't worry, they have . . . .

No questions taken. Apparently there's nothing to discuss. Maybe later . . . . Thanks, Cheryl! We get it.

CPSIA - ICPHSO Update on Strategic Plan Panel Discussion

Next up (after audio problems are "fixed") is the panel discussion on the Strategic Plan. The panel includes:

• Ken Hinson, Executive Director (moderator)
• Matt Howsare, Chief of Staff to Chairman Tenenbaum
• Cheryl Falvey, General Counsel, CPSC
• Jay Howell, Director, Hazard Identification and Reduction, CPSC
• Richard O'Brien, Director, International Programs and Intergovernmental Affairs, CPSC
• DeWayne Ray, Dep. Dir., Hazard Identification and Reductions, CPSC
• Marc Schoem, Dep. Dir., Office of Compliance and Field Operations, CPSC
• Neal Cohen, Small Business Ombudsman, CPSC
• Scott Wolfson, Dir., Information and Public Affairs, CPSC

Update on rulemaking (CF): Final rules issued in 2010 - crib rule, database rule (launching on March 11), "Children's Product" rule and the civil penalty rule. Also, the mandatory recall rule, infant walkers and bath seat rules.

Draft rules: bike standard, two 15(j) rules on substantial product hazard list (drawstrings and hair dryers), component rule, 15 Month Rule and bassinets.

Rules coming up: cadmium rule (deferred for six months), toddler beds, lead paint and HD-XRF test methods, bed rails, bunk beds, swings, bicycle rules, testing and certification rules, 15(j) rules, 100 ppm lead standard, and notice of proposed rules on play yards and another "safe sleep" initiative category.

[One thinks that after they regulate bunk beds swings, bikes and so on that all the fun will be gone from childhood, bringing to mind an effective cure for cancer (killing the patient). Well, at least kids can still play with rocks . . . . OMG, rocks have lead in them!]

JH: They intend to double the number of rules in place in 1990. [Nice! More rules, more safety!] Rule-making activity is "abating" but have a growing compliance and enforcement workload. The burden is "shifting" to the compliance team. Working with all stakeholders to make sure they are compliant. [Safety is not the word used but instead "compliant". The notion is that compliance is tantamount to safety. Anyone want to discuss this topic?]

Why did the agency take such a "collaborative" approach to the Strategic Plan? MH - The "comprehensiveness" of the collaborative process was incredible. Went through all sorts of "painstaking" efforts to interview so many people in this room. [Perhaps Matt is referring to Raachel Weintraub - who else needed to be consulted, after all?] The Strategic Plan reflects the "consensus" view of the agency's strategy. The "collaborative" process was designed to guarantee "buy-in". The Chairman's focus under the Strategic Plan is the preventative portion. Spoke of Neal Cohen's area as a focal point. [There's an insight - we small business people are the problem! Thank heavens Neal Cohen can educate up.]

MH also points to "boots on the ground" in China as another feature of the CPSC's efforts to prevent disaster. He did not say what kind of boots those might be. Jackboots?

Tell us about small business ombudsing, Neal! NC: Start by listening. There's a lot of confusion, and there are ways to use the work done by the CPSC "to your favor". [Hmmm, I'd like to know more about that.] NC: I'm not a policy maker at the agency. [RW - that's the rub, ain't it?] NC: I am spreading the word about the problems within the agency. NC has his own website (www.cpsc.gov/sbo). Putting out "plain English" documents to explain the law and the rules. Three tips on compliance: (a) know your product and your supply chain, (b) proactively educate your suppliers, and (c) don't "assume". [This is sound advice. It doesn't protect you from anything, however. Were you to follow Neal's advice, it would count for NOTHING if you get recalled. It should but it won't.]

All kidding aside, people have nice things to say about Neal. What he can achieve remains to be seen, however. I have yet to hear about him making problems go away. Most of the problems people are dealing with are nonsense, so if he could move heaven and earth, I think I would start to hear about him going to bat and getting something done for these beleaguered little companies.

International (RO'B): No sign of harmonization efforts in Mr. O'Brien's presentation. He is leading the effort to get other world regulators to join us in our safety mania.

Scott Wolfson's turn - "What about consumers and how do they fit into this?" SW: Pool Safely Initiative shows what we can do if we have money to get our messages out. [How have injury statistics changed, Scott? WS: Won't know for years. . . .] Concerned about "sustainability" ($$$). We're hitting the road to get the message out. Have built a network to get info out. Working on a new logo.

Scott did not update us on Aston Kutcher. Maybe during the Q&A . . . .

RW: This all sounds good as far as it goes. Of course, he does not discuss the impact of OTHER decisions his office makes, like communication of "hazards" like cords on baby monitors or recalls of Shrek glasses. It's all well and good that the CPSC has a couple billboards up about pool safety, but what about the mania on lead and their communication of those hazards?

Why does the CPSC need to train manufacturers? Why is it the agency's role? JH: There are various levels of sophistication out in the marketplace. To drive the prevention effort, need to make sure manufacturers understand the rules of the road. [RW - this is one of my original suggestions for the agency in my first speech on the CPSIA. Failures in outreach is one of the main causes of the storm behind the CPSIA.]

JH: We are focusing our efforts around priorities to increase impact and to avoid dilution.

Jay Howell usually sounds pretty sensible. It would be great if the agency sounded more reasonable more of the time. Perhaps Jay can be an agent in that process.

MS: Trying to reduce the time taken to negotiate recalls. [RW: Two-edged sword here, since the concept of due process is flying out the window with the justification that they are "saving lives".] MS: If you're right, you're right - just convince us. Also need to get information out to consumers quicker.

RW: This is agency policy talking, probably not Marc Schoem.

SW: We are going out on all platforms, like Twitter, news media, Facebook, blogs - multiple times. MSNBC is doing a monthly "round-up" of recalls.

There was time for only two questions from the audience. Filibuster! I got to ask one of them. Here's my question:

"I have testified five times at the CPSC, three times at your invitation. I have repeatedly told you that your policies and the CPSIA together are killing small businesses, killing products and killing markets. Last week, the bicycle industry testified that large bike manufacturers have reduced their product lines and small companies have left the market. Given this testimony, what do you think the agency's responsibility is to small business and how does the Strategic Plan relate to protecting the right of small business to sell children's products?"

KH: That's why we have had such a collaborative process in the Strategic Plan. We need to identify hose issues and figure out a solution. RW: But we're dying now. KH: We do what we do and violative products have to come off the market.

CPSIA - ICPHSO Presentation on CPSC Strategic Plan

You know they have a strategy . . . .

I am at ICPHSO for the next couple days, reporting from this safety convention "live" for the third year in a row.

As in the past, I am working "live" and off my notes, so take it for what it's worth. I may make some mistakes (which I regret), but heck, this is a blog. According to my critics, you shouldn't believe half of what I say anyhow . . . .

The Opening Session today featured Ken Hinson, the Executive Director of the CPSC. Ken is a relatively new addition to the senior staff of the agency.

Mr. Hinson argues that employment at the CPSC is directly correlated to safety. Reported incidents are skyrocketing, but investigations are declining. This statistic does not capture what the agency is DOING as a result of those investigations, notably.

The agency is "extremely excited" about the product database. One wonders what they are so "extremely excited" about, given the extensive testimony about the problems with the database. Wayne Morris of AHAM testified in Congress last week that when erroneous information is posted, as it certainly will be, there is NOTHING that can be done to remove it from the Internet. He compared the database to a "blog". A blog! I testified in the same Congressional hearing that the effect of the database will be to encourage consumers to NOT communicate directly with us about product issues but instead to post to the database, and since the CPSC restricts our access to this data, it is likely that the database will INCREASE safety risks.

Lots to be "extremely excited" about, indeed!

The CPSC Strategic Plan is now online. I requested to be interviewed as part of the process of developing the Strategic Plan, as I was invited to do, but somehow they failed to call. Hmmm.

Five goals:

1. Leadership in Safety
2. Commitment to Prevention
3. Rigorous Hazard Identification
4. Decisive Response
5. Raising Awareness

First goal: Will create annual plans to address the most pressing merging safety hazards. Supposedly will be working closely with stakeholders, you know, like readers of this blog. Okay, not us, but somebody. I bet consumer groups might be on that list . . . .

Second goal: They want us to "build safety into consumer products". Presumably the CSPC thinks this is a new idea because with an ex post facto approach to safety, any injury means the manufacturer screwed up. We're always wrong, thus inviting the government to get involved in what we do to make things "better". As Ronald Reagan said, the most frightening sentence in the English language is "We're the government and we're here to help!"

They're going to give us proactive education on how to design our products more safely and will create incentives to encourage us. I can imagine those "incentives" might be based on penalties imposed and threats made by the agency in recent years.

Third goal: This is the scary one - they will be looking deeply for hazards, like cords on baby monitors . . . . Presumably, when they find a "hazard", well, you know what happens next. They are working on increasing their ability to obtain, analyze and act on information of "hazards".

My problem with this is that the definition of what constitutes a "hazard" has been lost. Perhaps this is a picky point, but they don't have the legislative authority to do whatever they want. They are restricted to work on SUBSTANTIAL PRODUCT HAZARD. In fact, they are limited by the law. Someone should tell them about this.

Mr. Hinson: "This is all about speed." There's a confidence builder for me - hasty judgments are always better by definition.

Fourth goal: The CPSC plans to act fast and "hold manufacturers responsible". It's all about "speed". Again, agency policy seems to be to encourage hasty judgments. Based on industry chatter, this policy does not involve dithering or considering defenses or due process. The CPSC is judge and jury, legislature and executive branch. In fact, often it is a junior and inexperienceds staffer who is judge and jury. See how you like it when you are on the receiving end.

This will be SUPER until all products are finally killed off.

Raising awareness is critical to empowering consumers, so says Mr. Hinson. I question whether empowering them to panic or make judgments based on scant, erroneous or inappropriate data is a really good idea or good public policy. The "good news" is that they have set this plan in motion, so your opinions and mine don't matter.

Fifth goal: The raising awareness goal certainly incorporates the wonderful new database. Likewise, Neal Cohen and the small business liaison office is part of this plan.

Btw, raising awareness is a really good goal for the agency but if it doesn't know what a hazard is, or have good processes to encourage trust among manufacturers, they can do a lot of damage with their clean heart and good intentions. Sucking up to left wing politicians and consumer groups does not necessarily produce good public policy. The agency might consider taking more seriously criticism of its activities and actually taking on board suggestions by knowledgeable stakeholders, including ex-CPSC staff.

CPSIA - Game Playing with Phthalates

Last Wednesday during ICPHSO, CPSC General Counsel Cheri Falvey made a direct statement about phthalates testing: You only need to test plasticized parts and paints for phthalates. She also noted that internal components still need to be tested, ridiculous (and expensive) as that may be.

In my post of February 17, I admitted that I hadn't seen this in writing previously and asked for citations. A reader who knows more than me sent me this link. We think she is refering to this language:

"Not all plastics, however, contain phthalates. Certain plastics, such as polyethylene and polypropylene, generally do not require plasticizers. However, surface coatings and adhesives may contain phthalates. In addition, phthalates could be used in some plastics even though they are not required. Phthalates might also be used in some elastomers or synthetic rubbers. . . .

Manufacturers either know or should know what materials and components go into the products they make, and if the product or its components contain one of the plasticizers specified in section 108 of the CPSIA, the manufacturer or importer certifying the product must test the component or product to ensure that it complies with the CPSIA. Failure to comply with section 108 of the CPSIA is a prohibited act under section 19 of the Consumer Product Safety Act (CPSA) and can result in civil and criminal penalties. Likewise, failure to have a product subject to section 108 of the CPSIA tested by an accredited third-party laboratory and have the appropriate certification for that product is also a prohibited act under section 19 (CPSA)." [Emphasis added]

Aha, that's it! Or is it? Here's some more from this document:

"Examples of materials that do not normally contain phthalates and, therefore, might not require testing or certification are:
• Unfinished metal.
• Natural wood, except for coatings and adhesives added to wood. . .
• Mineral products such as play sand, glass, and crystal."

I wrote about this provision in my comment letter on the second proposed phthalates standard (see paragraph 7). All the risk is on the manufacturer, there are no safe harbors other than comprehensive testing (even for wood, metals, sand and crystals), and there is no way to assure a dealer of the validity of an "incomplete" test report.. This rule remains an utterly unworkable and confusing standard - nowhere near as simple as Ms. Falvey implies. Although few wars are raging with test labs over this provision (since testing isn't mandatory yet, "anything" goes), the possibility or probability of chaos remains profound.

I feel strongly that it is wrong of CPSC General Counsel Falvey to make light of this risky situation with an unsupported blanket statement, particularly since she is prone to "tisk tisk" you if you ignore one of her many oral warnings. If her words have the power of law, which they certainly don't, then presumably they also provide cover. Are you ready to make that bet? In this case, if anyone relies on her statement, they are risking civil penalties or criminal charges according to Falvey's own written policy.

Oops- that'll teach you to listen to the General Counsel!

CPSIA - The Text of Inez Tenenbaum's Keynote Speech at ICPHSO

The CPSC has posted Ms. Tenenbaum's fiery speech on their website. Here is the link. If you want to share the experience we had at ICPHSO, here is the video of the speech itself. Enjoy!

CPSIA - Some ICPHSO Humor

After a day at ICPHSO when

• The General Counsel quizzed the audience perhaps ten times about who was tweeting (my spies indicate that three people tweeted from that session, including me), ribbing us (me?) for letting you know what she was saying. [I blogged live from last year's event, which was noted with shock by some participants.]
• The Chairman instructed us not to believe "Internet rumors" and to only believe websites ending in "dot gov". You know, you can always believe your government!
• The Chairman told us to stop fighting old battles - in other words, give up, guys!
• The Chairman heralded the work of the Center for Environmental Health, one of the most noxious of the consumer group terrorists active in today's market. Their tactic of extracting coercive settlements under CA Proposition 65 to set precedent and to fund their activities has been well-documented in this space.
• The looming reality of the public database was shoved in our faces (Tenenbaum: It's time to get prepared). We confronted the realization that we will be forced to treat every consumer report as an emergency simply because of the database, and
• The Chairman pointed to the Toyota feeding frenzy as the model for future regulatory action on "slow" recalls in this era of populist corporation bashing,

where do you think the ICPHSO planners sent everyone on last night's social event?

To see "Sheer Madness", of course!

You have to admit, it was a perfect choice.

CPSIA - ICPHSO Update - Q&A with CPSC

Q&A's from this afternoon's session. Gib Mullan responding unless otherwise noted.

A taste of things to come:

1. The biggest impact of the Public Database is how quickly you will have to reply. Hmmm, where have we heard this before??? Hope you are never on vacation. . . .
2. On confidentiality in the Public Database, it is going to be "hard to deal with". Info from consumers won't be confidential. Info from businesses will either be confidential or not, perhaps at the company's pleasure, but it will be hard to act on info businesses provide WITHOUT making it public. RW: Don't forget to make comments,guys. Your silence will be taken as your approval, trust me.
3. The plan for the DB is to let companies have "every bit of the time" specified in the statute "AND NOTHING MORE". There will be "minimal CPSC review". Aha, just like Tenenbaum said, time to get prepared. . . for the first Tuesday in November.
4. One questioner noted that the recalls on cribs has so rattled consumers that it has stimulated the return of co-sleeping arrangements, known to be one of the most dangerous baby scenarios. Hmmm. The CPSC will be doing education to counteract this development. RW: It is inconceivable that their publicity will match the media frenzy over crib recalls. It's probably safest just to stop having kids.
5. Will there be a mandatory standard for window coverings - because there is (said to be) one death a month. The CPSC says that they are working on it. For you at home, it's probably safer to just take down all window coverings and let Mrs. Kravitz have a big day.
6. Somebody called for new regulations on the "end of life", just like in Japan. OMG . . . . Hey, they mean the end of your product's life! What were you thinking? The CPSC is watching how this system works but has no present plans to expand its current regulatory scheme.
7. When will a promotional product become a "Children's Product"? Does it become a Children's Product if screened with the wrong thing? Cheri Falvey responded that you can't read the WIMA letter (the pen decision) to address this question. It was a "result-oriented" opinion from a two-person Commission. The new rule on Children's Products, to be voted on by five Commissioners, will sort this out. Might incorporate the pen decision and broaden it, or it might not. So there you go, might be okay, might not, you should wait and see. [RW: I hate the pen decision because it attempts to solve a compliance issue on a technicality with absolutely no regard for safety. Is a pen safe? The decision cannot be reconciled against that question because it only matters what was intended by the manufacturer. Safety is irrelevant when considering compliance . . . ?]
8. Eric Stone noted that changes in the definition of "Children's Products" may have consequences for manufacturers and asked if the agency has the legal authority to operate prospectively. Falvey declined to give a legal opinion, but noted her personal opinion that the definition could broaden in the new rule. She noted that she has warned about that in the past. Oh, I see, we are to write down her every word, savoring them like pearls, because her oral warnings in any setting are going to be taken as precedent. We were warned. Too bad for those of you who weren't here to hear her words. Ha Ha Ha Ha! And you can't use this blog as a citation, either. Remember, my URL doesn't end in "dot gov". I am a liar.
9. When the law goes into effect on cribs, Falvey told us this AM that the standards will be RETROACTIVE. A member of the juvenile products industry referred to this news as a "bomb". He said there could be 20 or 30 million cribs that don't comply and would be instantly illegal. Gib says the new rule would be retroactive only for cribs in "public settings" like hotels, motels, day care centers. He says that the Commission has the authority to go even further. Oooh, could be a great chance for the government to come into your home - nice! I really like the concept of this rule - it's really simple, see, it will be retroactive for some people and prospective for others. Apparently, the CPSC and Congress still haven't figured out that the U.S. economy is rather complex. I see years of fun ahead for the regulators.
10. Learning Curve asked if all document attachments on the Public Database would be made public. Gib said yes. LCI then asked about consumer-obtained test reports and whether they would also be made public without scrutiny. Gib said he hadn't thought of that one. I can think of a few plaintiff's lawyers who would be happy to run a real life seminar about this in the future . . . . This Q illustrates the incredible disarray that awaits us all because of this insanely self-destructive provision fobbed off on us by the consumer groups.
11. Gib: not everything in the database will be public. Some area will be explicitly confidential. Some 15(b) disclosures will not appear in the DB.
12. No decision on whether media reports will be included in the DB. I find this hard to be envision - I trust eventually the consumer groups will force all the trash into the DB to help with all their searches. Oh how I look forward to the new era of Sudden Business Death.
13. Will the agency will reconcile multiple reports of the same incident? One of Cheri Falvey's associates said they would address it in the rule. The rule is now over 25 pages long. Trust me, it won't be that short when released.

CPSIA - ICPHSO Update on Public Database

Remarks of Ming Zhu and Chad Tompkins, Office of Info Technology, on the Public Database. This presentation will apparently be posted online at www.saferproducts.gov.

• They are very excited about the database. They acknowledge that they are IT guys, not lawyers. Gotcha.
• Will give access to "far more" product info than previously available. Will provide much faster access to the info.
• Corporate participants can also get incident reports much more quickly and act much more quickly. [This is an obvious set up for an opportunity to judge the speed of your surveillance and response. I think it's best understood as the basis for compelling a certain helter skelter speed to respond. The populace demands it . . . .]
• Chairman Tenenbaum noted that www.saferproducts.gov has gone live, although the database is not yet functional. She says you can track the progress of the database on the website and kick the tires of its new design before its March 2011 rollout.
• They are looking forward to enhanced early detection of hazards.
• Consumers will have access to all consumer reports and manufacturer replies when making consumer product choices. Oooh, this is a good one. I am so glad I gave comments on this database. Why not just let us put our comment letters through the shredder ourselves?
• Will capture info on the submitters and the incident on the site.
• Phase I is to "turn on the fire hose" and phase II is where the agency improves its infrastructure to handle it. They recounted the overall IT improvement plan.
• Will use Social Media to drive traffic. Earlier in the day, Cheri Falvey noted the popularity of the video showing a carrot being severed by a stroller. Cute!
• They want us to talk about our website at our Tupperware parties. Something to think about.

CPSIA - ICPHSO Update -Remarks of Chairman Inez Tenenbaum

Inez Tenenbaum gave a keynote address at lunch at ICPHSO today. I would have preferred to rely on the actual text of the speech before writing about it (not yet available online at the CPSC website), but wanted to give you my impressions quickly. If I took erroneous notes, I apologize and will correct errors, if any, later.

Critical points from the speech:

• The speech was tough and hostile to "uncooperative" businesses.
• She gave plugs to Consumers Union, PIRG and CEH. Draw your own conclusions. She balanced those plugs with a hearty pat on the back for RILA which she said has proposed its own uniform testing "problem". Oops, Freudian slip . . . she corrected herself to clarify that it is actually a uniform testing program. Program, problem - these are synonyms at the new CPSC.
• She wants to dispel the "rumor" that the agency is overwhelmed by mandates and is distracted from its mission. Further to this point, with regard to Internet "rumors" like the foregoing, she recommends that you only believe websites that end in "dot gov".

Let me repeat that last one: Tenenbaum says you should ONLY believe websites that end in "dot gov". That means you shouldn't believe me, just her. Don't be cynical, guys. Speaking for myself, when a high public official tells me not to believe the media chatter, just to believe them, I always take the heartfelt advice. After all, they only mean to protect me from scurrilous gossip that I am too dumb to figure out for myself. For instance, I still believe everything John Edwards says . . . .

• Regarding recalls involving a death, Tenenbaum warned companies NOT to blame parents in the press even if they are involved in litigation with the family. If they do, Tenenbaum promised (in strong terms) to "call [them] out". I was floored by this. Is she our mother now? Our mother government, perhaps.
• She urged us to "stop fighting old battles" and get prepared. She was referring to the new era of the Public Database. Hmmm. We are to stop fighting old battles. Okay, everyone, put down your arms!
• She reiterated that the CPSIA was the "most substantial and positive" development in the CPSC's (recent) history. She noted her love of the tracking labels provision and the removal of lead from zippers. Apparently my many comments and objections to tracking labels were ALL wrong. Darn! I must learn to love tracking labels. Repeat five hundred times, I must learn to love . . . .
• On the subject of voluntary standards, she emphasized that if industry doesn't move fast to do it the CPSC's way, the agency will just put out mandatory standards more to its liking. She specifically cited the JPMA and ASTM on the crib standards. She sounds really open-minded on that one. Tenenbaum also recommends that industries proactively make their standards more stringent so the agency can make them MANDATORY. Or . . . the agency will just do it itself. Nice! I feel trust building, building, building.
• She noted that the law applies to big and small companies ALIKE "for good reason". Hey, crafters, get the message - there will no free pass for you. Of course, this actually makes sense because product injuries should not be okay simply because the manufacturer is small. The way to fix things for small companies is to rework the definition of hazard to be limited to ACTUAL hazards only, which will focus safety efforts in a logical fashion, thereby helping out the small guys. The crafters are a victim not of fair rules that are blind to small business interests - but instead of a terrible law that is so fatally flawed that no business can deal with it.

Here's the best part:

1. Chairman Tenenbaum said that she won't tolerate resistance to recalls that the agency wants to make. If you do dare resist, the agency will use its many tools to force the "right" outcome. Chairman of the CPSC or Chairman of the Politburo? Individual rights and due process are apparently a secondary consideration now, to judge from Tenenbaum's fiery speech. There's a big incentive to invest, right?
2. Tenenbaum cited Toyota as an example of how "this government" will NOT tolerate slow recalls. Oh boy. Think of the Toyota food fight when you imagine the future of CPSIA enforcement. Recall first, ask questions later and let the media sort out the details. And be sure to bring the mighty down low. That sounds so fair!

There are many industries that are going to be victimized by this new enforcement regime. The list will be LONG.

Lots of tough talk, saber rattling and scare tactics. Of particular concern is the implicit erosion in corporate legal rights and the continuing demonization of businesses and business people. The Obamist populist rhetoric was quite recognizable, and one must wonder who Tenenbaum really intended to reach with the speech. Whoever they are, I hope they were happy. As for me, I got the willies and thought that whatever progress I sensed earlier today was an illusion.

Will the Dems ever learn?

CPSIA - ICPHSO Update - Strategic Plan Process

Remarks of Booz Allen Hamilton, Inc., consultants responsible for the new Five Year Strategic Plan for the CPSC.

BAH says

• Agency is committing to protecting consumers (that's the angle).
• The agency is committed to inclusiveness and transparency, so they will be asking for input from stakeholders throughout the process.
• Will have focus groups and seminars in the near future. Looking for input and to validate their thinking.
• Will keep you posted on progress and their ideas along the way. Can send in questions for clarification.
• They NEED our input. Transformation efforts need engagement of all stakeholders.

CPSIA - ICPHSO Stay Tuned

From a CPSC Media Alert:

"CPSC Chairman Inez Tenenbaum will be giving a major address on the state of product safety, including a strong message to industry about meeting their responsibilities to consumers when it comes to recalls. Tenenbaum will also detail her consumer agenda for 2010, unveil a new Web site being launched and talk about crib safety."

This will take place at lunch today.

CPSIA - ICPHSO Update - Remarks of Mary Toro and Kris Hatlelid on Toxicity and Risk

Mary Toro is the head of the FHSA Enforcement Division.

• Reviewed regulatory scheme in a fair amount of detail.
• Incorporation of ASTM F963 brought into the law a solubility standard for heavy metals in surface coatings.

Remarks of Kris Hatlelid, Health Sciences:

• Wealth of data on cadmium is from worker exposure or inhalation. There is almost nothing out there about ingestion, including whether it is a carcinogen when ingested. Studies also need to consider life stages. Longer term studies are done on mature animals, which might not be relevant to children. The challenge from the data and its inadequacies are considerable.
• Among other things, Hatlelid noted the importance of dose-response evaluation. This reminds one of the old toxicologists' saying that "the dose makes the poison." She also mentioned exposure assessment and risk characterization. It is comforting to be reminded that CPSC scientists are still aware of these issues (I never had a doubt). How can we get the message to the junior scientists in Congress?

The notes on toxicity gives perspective on cadmium and the panic over jewelry. I hope someday the CPSC regains the upper hand on setting safety policy from the Associated Press.

CPSIA - ICPHSO Update - Remarks of Gib Mullan, Head of CPSC Enforcement

Gib Mullan's remarks on enforcement:

• Import surveillance staff is now up to 18 people.
• Using Commercial Targeting Analysis Center (CTAC) to stop things at the port. Can see what's coming in before it arrives.
• Is working with the International Trade Commission, the folks responsible for HTS Codes (Harmonized Tariff Schedule). The CPSC is trying to "piggyback" on HTS code to identify the products of interest to the agency. Making "significant headway".
• Imports samples rising at a rapid rate. Only about half of the samples fail.
• Use of XRF is one of the agency's "secrets for success". Will use for cadmium, too. Only one-tenth of items scanned are being sampled. This implies that less than 5% of items scanned fail. Most items are not inspected, which is just a numbers game.
• Field Investigation Division is back to a "growth mode", in 55 locations with 89 investigators. Expanding to Internet surveillance. They have seen a surge in eBay sales of recalled items after recalls are announced. Interesting!
• Created email address for the public to report sales of recalled products. Now everyone can be on a cop on the beat, how wonderful. Hope I can still trust my kids. . . .
• Retailer reports are rising. Participants in this program include WalMart, Sears, Amazon and others. 20,000 reports a year. Also reports by email and on the hot line 800 number are jumping. The total number of reports is cresting at 50,000 per year. All of this is BEFORE the public database. [Soon a system will be fully constructed that will make doing business in the U.S. children's product industry impossible, something to look forward to (this is my thought, not Gib's remarks).]
• Field "blitzes" are increasing. Examples are pool and spas, drywall, drawstrings, cribs. This is a new activity although blitzes at the port are old hat, in my experience.
• Defect Investigations Division has 19 compliance officers.
• Recalls in 2009 DECLINED from 563 to 466. Number of units went up to an all-time high, 229 million units. Lots of big recalls in 2009. Should we feel safer now? I wonder . . . . Gib himself questions whether this is "good or bad".
• Fast Track recalls are pretty steady. "Fast tracks" are recalls initiated by companies and brought to the CPSC's attention by the company itself. CPSC-initiated recalls are steady in the 50-60 range. Cases stemming from regulatory violations declined from 167 to 47.
• Early warning system relating to cribs, bassinets and play yards is resulting in faster recalls. [No info on the availability of cribs and so on was provided, or the cost of those goods now.]
• Joint recalls with Canada was done first on February 19, 2009 (that fills in a hole!). Total of 13 joint recalls in 2009 and 16 in 2010 to date. Expects more joint recalls in the future, broadening to other countries. Gib thinks this makes it simpler for companies going through recalls. Again, not sure how I feel about this but am not opposed in principle.
• Regulatory Enforcement Division has 18 Compliance Officers now. This includes Chemical, Children's, Flammability and Mechanical hazards. Letters of Advice ("LOAs") fell a bit in 2009 by perhaps 12%. Only a small percentage result in recalls. In 2009, found 338 lead content violations and 118 lead in paint violations, mainly at the port. Recalls have come down considerably, almost to zero. Stops at the port are higher than that, but don't result in recalls necessarily. Those are declining, too.
• Compliance Division now has 14 of its own attorneys
• Civil penalties rose a lot in 2009. Gib specifically noted that he was not being "gleeful" about penalties but simply noting that penalties are a more serious risk now. I am okay with this tone, it is common sense. Penalties totalled nearly $9 million. I just hope that penalties moderate and become more purposeful, rather than political.
• Made a STRONG point about fraudulent testing. The CPSC caught fraud in lighter testing and it led to criminal charges. They are working on another case now. This is great news as far as I am concerned. Cheating is a REAL problem (an actual problem, not an imaginary problem). The CPSC should find the bad guys and punish them. The resources of the agency are well-served if focused on removing these unscrupulous people from the market.
• The agency is forging new alliances with the State AGs. They have a monthly conference call with this group. This is the CPSC's proactive effort to reign in the State AGs by making them part of the process. If this works, great. Again, we need to watch out for the lowest common denominator risk.
• Working with China on implementing "best practices". Getting better, faster. China recalls went DOWN in 2009 and he anticipates improved safety in Chinese products. This, too, is a good use of agency resources. If we really are getting better, faster, Gib and his team should take a bow. Safety benefits everyone. Next up, consideration of the relationship between these initiatives and cost. Safety is an inherently economic subject. We need recognition of this basic fact.

I have omitted all reference to drywall here. This is a one-of-a-kind problem that seems unrelated to the CPSIA as far as I can tell. Likewise, I have not attempted to summarize the issues relating to ATVs and other tangential product/safety issues brought up by Gib. [He did say that repairs to the Rhino seem to be working well, btw.]

To Gib's credit, I found his presentation quite balanced with no particular effort to frighten. I appreciate the choice of tone for what could be a quite intimidating topic.

Gib's presentation was one of the few I can recall in the last two years on the topic of enforcement that did not materially raise my blood pressure or make me think dark thoughts about the future. Let's hope that the CPSC can build on this base to restore trust among the business community. Safety and fear mongering is an unholy alliance. The CPSC needs the cooperation and trust of the manufacturing base.

CPSIA -- ICPHSO Update - Remarks of Jay Howell on Hazard Reduction

Remarks of the CPSC's Jay Howell on Hazard Identification and Reduction (again, this is not a transcript, just the points I found interesting or notable on issues typically discussed here):

Reasonable Testing Program is applicable for "non-children's products". There are several elements to this:

• product specs
• applicable certification test
• product testing plan
• remedial action plans
• program design and implementation documentation

Howell says these are common sense good business practices. I agree, by and large. Some of this is bureaucratic, however, and sets expectations better suited to mass market businesses than to small businesses. Will small businesses devote the considerable resources to this kind of paper pushing? If not, do these requirements set up those small businesses for possible big penalties? Perhaps.

Howell also discussed the need for "event-triggered testing". Again, this is mainly common sense. On "periodic testing", Howell acknowledges that there is no "one size fits all" answer to questions of frequency. He points out that testing frequency relates to the potential size of recalls. The more frequently you test, the smaller the batch size and the smaller the potential recall (with tracking labels). This is interesting if they actually will allow businesses to make this assessment themselves. The ability to make risk-reward choices would be a step in the right direction. One can only hope . . . .

He advises that you consider these factors:

• severity of possible injury
• production volume
• variability in test results
• test results close to applicable limits
• testing costs
• product complexity or uniqueness
• hidden hazards
• history of incident reports, warranty claims and returns.

Again, I consider this list to be sensible and basically a description of how to make a "duty of care" decision about your products. This kind of coaching by the CPSC is highly constructive and valuable. My only worry is whether this is a set-up for gotchas. I hope to someday restore my trust of the agency so that I can stop worrying about gotchas. This could be a "gotcha". The CPSC needs to make sure that coaching is coaching, not a set-up.

The CPSC is sensitive to the issues of small volume producers, custom products, and the need for component part testing rules. There are a lot of issues buried in here. WATCH OUT for these rule releases and REMEMBER that your silence will be taken as TACIT APPROVAL. You will NEED TO send in detailed comments.

Jay also confirmed to me earlier today that the CPSC is now doing some recalls jointly with Health Canada. I noticed this last week but don't know when it started. Not sure whether this is good or bad, especially since safety issues for manufacturers should be dealt with across all sales regions. Not sure how this will affect costs or risk. Legal actions in other countries can be excruciatingly expensive, and if encountered, has the potential to kill small businesses instantly.