In the March 9th edition of the Product Safety Letter, Eric Stone published an analysis entitled "Is There a Need to “Recall to Repair” the Relationship Between the CPSC Compliance Staff and Business Community?"
My response: Amen, brother!
For those of you who don't know Eric, he is the former Director of the Legal Division of the CPSC and also former Acting Director of the Recalls and Compliance Division of the Office of Compliance at the CPSC. He is currently a partner at K&L Gates LLP. To say the least, he is an authoritative figure in all matters CPSC.
Please read Eric's Op-Ed.
Showing posts with label Recalls. Show all posts
Showing posts with label Recalls. Show all posts
Thursday, March 10, 2011
Wednesday, March 9, 2011
CPSIA - CPSC Punts on "Material Inaccuracy"
The war over the CPSIA Database continues at high pitch. In today's print edition of Politico, Consumers Union upheld its well-deserved reputation as a fear monger with the below ad entitled "Will this crib leave parents sleepless?" CU intones: "When you buy a crib, you want to know it's safe. Luckily for parents, the [CPSIA] created an easy-to-use database for the public to report unsafe products. But right now, some members of Congress want to stop that database, putting your children at risk. Don't let them."
The ad concludes with this warning "Congress: Don't play politics with our kids' safety."
At the same time, the National Association of Manufacturers launched its own campaign documenting the many incidents of inaccurate data and other related snafus in the database SO FAR. The body of the NAM letter is found here.
The objections to the CPSIA Database by manufacturers, importers, private labelers and retailers is all about inaccurate data. Filling the database with junky, incorrect or idle chatter masquerading as thoughtful analysis presents REAL threats to investments in companies, products and brands. Naturally, this also threatens jobs at many levels in our economy. Were the database maintained by the CPSC with clean and accurate data, I rather doubt the objections to this program would be so intense. However, industry stakeholders know that the media and our government are reactive by nature, tending to report, judge and act on stimuli before adequately investigating or resolving underlying accusations. Consider Toyota braking systems, DryMax diapers, Shrek glasses. It's a long list of manhandled companies or products. There are legitimate reasons to fear what a mismanaged "post it and forget it" database will do to industry.
I realize industry objections may seem theoretical or somehow calculated to serve a larger purpose. It is worth noting, however, that the NAM letter provides concrete illustrations of the problem facing industry. Likewise, it is important to remember that consumer groups gloss over the objections of companies to pluck heart strings - that's how they raise funds. To clarify the picture, I have a REAL EXAMPLE to share. It involves the first (and so far only) submission to the database about our company's products.
The following incident was filed against one of our products during the so-called "soft launch". The soft launch was intended to allow the CPSC to work the "kinks" out of the database and to practice interacting with the entire U.S. economy on consumer products. As you know from prior blogposts, Inez Tenenbaum has admitted in House testimony that the CPSC is not likely to be able to resolve questions of accuracy before posting the data (but they will try very hard). She said "That's what the rub is." Indeed. And you also know that once data appears on the Internet, its traces are all but impossible to remove. The long tail of misinformation is likely to affect brands and companies for years.
The subject product happens to be discontinued. We have protested this particular filing to the CPSC and they replied with the following decision: "[CPSC] staff concluded that the report would be posted in the database but for soft launch". In other words, as a CPSC policy matter, what follows is a legitimate posting to the database when it goes live.
Put yourself in the position of the CPSC and YOU MAKE THE CALL!
First, consider the final rule on the database. The database is to be populated with "reports of harm". What's that? "Report of harm means any information submitted to the Commission through the manner described in § 1102.10(b), regarding any injury, illness, or death; or any risk of injury, illness, or death, as determined by the Commission, relating to the use of a consumer product." And what is a "harm"? "Harm means injury, illness, or death; or risk of injury, illness, or death, as determined by the Commission." Who can file? Basically anyone. No direct knowledge of the "incident" is required.
The person making the filing does have to give their name to the manufacturer. In this case, we were faced with an unnamed accuser. Please note that Cheryl Falvey, General Counsel of the CPSC, said at ICPHSO this year that she couldn't imagine why anyone would withhold their identity in a complaint. This was our first "product incident". O for 1 so far, Cheri.
Here is what the anonymous filer said:
"I saw this product on the FAO Schwartz website. It looks like a nice idea not very well thought out. The product is called: 'Smart Snacks Sweet Heart Sayings'. The suggested age states: 2-7 yrs. By: Learning Resources. The Product Description: 'With 28 plastic hearts that lace together vertically and horizontally, 3 laces, candy scoop and storage jar, this Smart Snacks Sweet Heart Sayings set from Learning Resources® offer a delectable introduction to colors, shapes, matching and printed words. Little hands stay busy too as kids gain confidence in fine motor skills and hand-eye coordination. Charming lacing hearts features a word or picture on each side. Children can create colorful candy designs and cute messages while improving fine motor skills. Hearts are color-coded to help children make sentences.' These plastic 'beads' look very much like the candy conversation hearts sold around Valentines day. Maybe I am over concerned, but this seems like these beads could easily be mistakenly ingested or could pose a choking hazard." [Emphasis added]
I certainly hope the readers of this space are confident that, in fact, this item complies withU.S.
Put another way, this accusation has no basis in fact and thus cannot be a "report of harm" under any reasonable interpretation. It is unadulterated and inaccurate conjecture. We sent the CPSC our third party test reports and photographs of the parts proving that they won't pass through a choke tube to support our protest that this complaint is "materially inaccurate".
Nevertheless, the CPSC apparently determined the complaint states a "risk of harm" and thus should be published in the database.
To get a flavor of the "sympathetic" audience we received at the CPSC when we pushed back, please enjoy selections from the written response we received:
"I should make it clear from the outset that I am not the person within the agency with the delegated authority to handle material inaccuracy claims. This email reflects my opinions and not those of the Commission and has not been reviewed by the Commissioners. When you first approached me about this . . . I told you that my gut reaction was that despite the concerns you raised, the Commission staff handling these issues would take the consumer's report at face value as a claim raising a concern of a risk of harm. I explained then that your Firm could provide a comment with your objections to the report or object to the report as materially inaccurate. Given your concerns about the report, I raised the issue with the database team handling the issues and confirmed to you in our call last Friday that the response was the same. I also indicated that the claim of material inaccuracy would likely be denied. I explained that the personnel handling these matters were not making decisions as to whether the product was harmful but rather they would take a quick look at whether the report of harm articulates a risk of harm." [Emphasis added]
The ad concludes with this warning "Congress: Don't play politics with our kids' safety."
At the same time, the National Association of Manufacturers launched its own campaign documenting the many incidents of inaccurate data and other related snafus in the database SO FAR. The body of the NAM letter is found here.
The objections to the CPSIA Database by manufacturers, importers, private labelers and retailers is all about inaccurate data. Filling the database with junky, incorrect or idle chatter masquerading as thoughtful analysis presents REAL threats to investments in companies, products and brands. Naturally, this also threatens jobs at many levels in our economy. Were the database maintained by the CPSC with clean and accurate data, I rather doubt the objections to this program would be so intense. However, industry stakeholders know that the media and our government are reactive by nature, tending to report, judge and act on stimuli before adequately investigating or resolving underlying accusations. Consider Toyota braking systems, DryMax diapers, Shrek glasses. It's a long list of manhandled companies or products. There are legitimate reasons to fear what a mismanaged "post it and forget it" database will do to industry.
I realize industry objections may seem theoretical or somehow calculated to serve a larger purpose. It is worth noting, however, that the NAM letter provides concrete illustrations of the problem facing industry. Likewise, it is important to remember that consumer groups gloss over the objections of companies to pluck heart strings - that's how they raise funds. To clarify the picture, I have a REAL EXAMPLE to share. It involves the first (and so far only) submission to the database about our company's products.
The following incident was filed against one of our products during the so-called "soft launch". The soft launch was intended to allow the CPSC to work the "kinks" out of the database and to practice interacting with the entire U.S. economy on consumer products. As you know from prior blogposts, Inez Tenenbaum has admitted in House testimony that the CPSC is not likely to be able to resolve questions of accuracy before posting the data (but they will try very hard). She said "That's what the rub is." Indeed. And you also know that once data appears on the Internet, its traces are all but impossible to remove. The long tail of misinformation is likely to affect brands and companies for years.
The subject product happens to be discontinued. We have protested this particular filing to the CPSC and they replied with the following decision: "[CPSC] staff concluded that the report would be posted in the database but for soft launch". In other words, as a CPSC policy matter, what follows is a legitimate posting to the database when it goes live.
Put yourself in the position of the CPSC and YOU MAKE THE CALL!
First, consider the final rule on the database. The database is to be populated with "reports of harm". What's that? "Report of harm means any information submitted to the Commission through the manner described in § 1102.10(b), regarding any injury, illness, or death; or any risk of injury, illness, or death, as determined by the Commission, relating to the use of a consumer product." And what is a "harm"? "Harm means injury, illness, or death; or risk of injury, illness, or death, as determined by the Commission." Who can file? Basically anyone. No direct knowledge of the "incident" is required.
The person making the filing does have to give their name to the manufacturer. In this case, we were faced with an unnamed accuser. Please note that Cheryl Falvey, General Counsel of the CPSC, said at ICPHSO this year that she couldn't imagine why anyone would withhold their identity in a complaint. This was our first "product incident". O for 1 so far, Cheri.
Here is what the anonymous filer said:
"I saw this product on the FAO Schwartz website. It looks like a nice idea not very well thought out. The product is called: 'Smart Snacks Sweet Heart Sayings'. The suggested age states: 2-7 yrs. By: Learning Resources. The Product Description: 'With 28 plastic hearts that lace together vertically and horizontally, 3 laces, candy scoop and storage jar, this Smart Snacks Sweet Heart Sayings set from Learning Resources® offer a delectable introduction to colors, shapes, matching and printed words. Little hands stay busy too as kids gain confidence in fine motor skills and hand-eye coordination. Charming lacing hearts features a word or picture on each side. Children can create colorful candy designs and cute messages while improving fine motor skills. Hearts are color-coded to help children make sentences.' These plastic 'beads' look very much like the candy conversation hearts sold around Valentines day. Maybe I am over concerned, but this seems like these beads could easily be mistakenly ingested or could pose a choking hazard." [Emphasis added]
I certainly hope the readers of this space are confident that, in fact, this item complies with
Put another way, this accusation has no basis in fact and thus cannot be a "report of harm" under any reasonable interpretation. It is unadulterated and inaccurate conjecture. We sent the CPSC our third party test reports and photographs of the parts proving that they won't pass through a choke tube to support our protest that this complaint is "materially inaccurate".
Nevertheless, the CPSC apparently determined the complaint states a "risk of harm" and thus should be published in the database.
To get a flavor of the "sympathetic" audience we received at the CPSC when we pushed back, please enjoy selections from the written response we received:
"I should make it clear from the outset that I am not the person within the agency with the delegated authority to handle material inaccuracy claims. This email reflects my opinions and not those of the Commission and has not been reviewed by the Commissioners. When you first approached me about this . . . I told you that my gut reaction was that despite the concerns you raised, the Commission staff handling these issues would take the consumer's report at face value as a claim raising a concern of a risk of harm. I explained then that your Firm could provide a comment with your objections to the report or object to the report as materially inaccurate. Given your concerns about the report, I raised the issue with the database team handling the issues and confirmed to you in our call last Friday that the response was the same. I also indicated that the claim of material inaccuracy would likely be denied. I explained that the personnel handling these matters were not making decisions as to whether the product was harmful but rather they would take a quick look at whether the report of harm articulates a risk of harm." [Emphasis added]
Our claim of material inaccuracy was denied - even though the issue was disposed by a valid third party test report directly on point . . . . Makes you wonder what WOULD be deemed "materially inaccurate".
So why didn't our test reports and photos PROVE "material inaccuracy"? After all, the filer states: "Maybe I am over concerned, but this seems like these beads could easily be mistakenly ingested or could pose a choking hazard." The CPSC explains:
"However, in assessing whether a report of harm articulates a risk of harm, the staff is not adjudicating whether the product actually presents such a risk of harm. We have other processes for making that determination which require an assessment of the risk by Commission staff, including a subject matter expert - in this case, a physiologist on the issues relating to the likelihood of a choking hazard to children . . . . As I explained on Friday, the database process is set up to allow the manufacturer to state its reasons why the report does not present a risk of harm and have that appear next to the consumer's report. The staff handling claims of material inaccuracy will not be determining the ultimate question of whether the product does, in fact, present a risk of harm. That would only occur after a full assessment of the risk of harm by the subject matters experts and ample opportunity for the firm to address the issues with our compliance staff. The disclaimer is intended to notify users that the information has not been evaluated and specifically states: The Commission does not guarantee the accuracy, completeness or adequacy of the contents of the Consumer Product Safety Information Database, particularly with respect to the accuracy, completeness, or adequacy of information submitted by persons outside of the CPSC."
Can anyone out there feel our outrage? Is this what Congress "intended"? Is it acceptable that the CPSC not exercise ANY judgment whatsoever on filings and that manufacturers be powerless to stop the posting of nonsense? Can't we expect more of this agency with its 500 employees?
The CPSC informs us that all is well BECAUSE even though the accusation is known to be false, we are allowed to post comments side-by-side with the accusation.
". . . it would be up to the Firm to decide whether it wants its test reports and photos posted as comments in response to the report. The conclusion was that this is the type of report that has been included in our databases in the past and would be included in the public database along with the manufacturer's comments and the mandatory disclaimer as to the accuracy of the information in the public database."
So, there you have it. The CPSC knows it is posting nonsense and other pap, refuses to filter out the bunk and then boldly asserts that it is up to the manufacturer to choose how it wants to counter the misinformation. The term "materially inaccurate" does not apparently extend to factually inaccurate accusations - I believe it only refers to misidentified products. [This is not the first tortured interpretation of the English language to emerge from the CPSC during this administration.] One wonders to what lengths the CPSC will go to post controversial complaints in the database. They have their justification - they must make consumers "safe" with errant complaint data. It is a rich irony that the CPSC doesn't even argue the complaints are true or accurate and then scurries to hide behind its website disclaimer when asked to defend its lame administrative approach.
No doubt twisting themselves into a linguistic pretzel is only the start for this CPSC.
This position is NOT mandated by the CPSIA - this is a political decision dictated by forces outside the law. Please note that in this case, the CPSC overlooked a valid third party test report mandated by the CPSIA that refutes a conjecture based on a photo posted on a website. Guess that test report doesn't count for much at the CPSC. But it is ESSENTIAL to keep kids safe. . . .
Right. And so is the rest of the CPSIA and this database. Right.
The CPSC didn't just "punt" on the meaning of "materially inaccurate" - they punted on the future of your business and the jobs you provide to your teammates. If only we could punt on the jobs of the people who were doing this to us. . . .
Monday, March 7, 2011
CPSIA - Age Limits under the CPSIA
As the House continues to dicker over how to amend the CPSIA (yes, they will give it a go soon, rumor has it), I thought the website Woot.com neatly illustrates the absurdity of the arbitrary and over-protective age grading rules inspired by Congress and the maniacal CPSIA. [Thanks to loyal reader Ben for this story!] In this case, the subject is the magnet rules spawned by the 2007 Magnetix deaths.
Perhaps you remember that last year the CPSC "in cooperation with" a company called Maxfield and Oberton LLC announced a recall of "Buckyballs", a magnetic ball toy for age grading issues. What age grading issues, in particular? To quote the CPSC: "The high powered magnets sets were labeled "Ages 13+" and do not meet the mandatory toy standard F963-08 (effective August 17, 2009) which requires that such powerful magnets are not sold for children under 14. Magnets found by young children can be swallowed or aspirated. If more than one magnet is swallowed, the magnets can attract each other and cause intestinal perforations or blockages, which can be fatal." [Emphasis added]
Woot.com sells this product and I love their spin on this safety "issue":
"Buckin’ Magnets, How Do They Work? If you’re 14 or older, Buckyballs promise hours of addictive magnetic fun! If you’re 13 or under, they promise fatal intestinal blockages!"
They continue to explain:
"When exactly does a child become an adult? Different societies have answered this question with different milestones . . . . Now the Consumer Product & Safety Commission has settled it once and for all: a child is an adult when they can be trusted not to accidentally swallow tiny but powerful magnets. This past spring, the CPSC told the Buckyballs people that they had to yank their compulsively play-withable little magnetic to- uh, 'desk decorations' to re-label them 'Keep Away From All Children'. It seems the previous label of 'Ages 13+' did not comply with consumer guidelines that 'such powerful magnets are not sold for children under 14', because even 13-year-olds were liable to swallow them and suffer perforated or blocked intestines. Yep, that year from your 13th birthday to your 14th makes all the difference. 'Consumers should take the Buckyballs® high powered magnets away from children under 14 immediately,' quoth the CPSC. Kids swallow the darnedest things!" [Emphasis added]
Indeed.
Of course, this illustrates the U.S. safety mania at its worst and its most damaging. Is this product actually dangerous? If it is, why does the CPSC allow it to remain on the market? Does labeling actually "solve" the problem? If there really is a difference developmentally between a 13-year-old and a 14-year-old on mouthing toys, I think it is incumbent on the CPSC to tell the public what it is. In the CPSC publication, "Which Toys for Which Child", the agency acknowledges what is generally accepted as true, namely that children over three don't put objects in their mouth: "Most children in [the 3, 4, 5 age group] can begin using toys with smaller components. If child is still mouthing objects, select toys with without small parts." Duh. But 13-year-olds? This is regulatory hypocrisy at its worst.
As long as the mania continues, and as long as Congress continues to try to meddle either legislatively or by applying political pressure to the agency, we will continue to see economic victims and economic losses. Jobs will be lost. And the safety zealots will never be able to prove that anyone is safer.
The only thing that will be beyond dispute is that there are fewer companies making fewer products for sale into a smaller market. In other words, the law and the CPSC will have engineered their very own mini-recession.
Nice!
Perhaps you remember that last year the CPSC "in cooperation with" a company called Maxfield and Oberton LLC announced a recall of "Buckyballs", a magnetic ball toy for age grading issues. What age grading issues, in particular? To quote the CPSC: "The high powered magnets sets were labeled "Ages 13+" and do not meet the mandatory toy standard F963-08 (effective August 17, 2009) which requires that such powerful magnets are not sold for children under 14. Magnets found by young children can be swallowed or aspirated. If more than one magnet is swallowed, the magnets can attract each other and cause intestinal perforations or blockages, which can be fatal." [Emphasis added]
Woot.com sells this product and I love their spin on this safety "issue":
"Buckin’ Magnets, How Do They Work? If you’re 14 or older, Buckyballs promise hours of addictive magnetic fun! If you’re 13 or under, they promise fatal intestinal blockages!"
They continue to explain:
"When exactly does a child become an adult? Different societies have answered this question with different milestones . . . . Now the Consumer Product & Safety Commission has settled it once and for all: a child is an adult when they can be trusted not to accidentally swallow tiny but powerful magnets. This past spring, the CPSC told the Buckyballs people that they had to yank their compulsively play-withable little magnetic to- uh, 'desk decorations' to re-label them 'Keep Away From All Children'. It seems the previous label of 'Ages 13+' did not comply with consumer guidelines that 'such powerful magnets are not sold for children under 14', because even 13-year-olds were liable to swallow them and suffer perforated or blocked intestines. Yep, that year from your 13th birthday to your 14th makes all the difference. 'Consumers should take the Buckyballs® high powered magnets away from children under 14 immediately,' quoth the CPSC. Kids swallow the darnedest things!" [Emphasis added]
Indeed.
Of course, this illustrates the U.S. safety mania at its worst and its most damaging. Is this product actually dangerous? If it is, why does the CPSC allow it to remain on the market? Does labeling actually "solve" the problem? If there really is a difference developmentally between a 13-year-old and a 14-year-old on mouthing toys, I think it is incumbent on the CPSC to tell the public what it is. In the CPSC publication, "Which Toys for Which Child", the agency acknowledges what is generally accepted as true, namely that children over three don't put objects in their mouth: "Most children in [the 3, 4, 5 age group] can begin using toys with smaller components. If child is still mouthing objects, select toys with without small parts." Duh. But 13-year-olds? This is regulatory hypocrisy at its worst.
As long as the mania continues, and as long as Congress continues to try to meddle either legislatively or by applying political pressure to the agency, we will continue to see economic victims and economic losses. Jobs will be lost. And the safety zealots will never be able to prove that anyone is safer.
The only thing that will be beyond dispute is that there are fewer companies making fewer products for sale into a smaller market. In other words, the law and the CPSC will have engineered their very own mini-recession.
Nice!
Friday, March 4, 2011
CPSIA - Our Worst Nightmare: A Recall Involving Spiders!
In a shocking development, Mazda yesterday recalled 65,000 cars in North America because of spiders in the gas tank. Talk about hidden hazards! Lenore Skenazy pointed out in a recent article that five Americans die because of spider bites every year. And cars are coated in lead paint, to boot. Obviously, cars are just too dangerous to be on U.S. roads. Thank heavens Mazda took decisive action before tragedy struck. . . .
Needless to say, it is only a matter of time before Rep. Henry Waxman calls for hearings to interrogate Mazda management. Did they check the electronics? No, Mazda blamed the drivers for the spiders. . . . And what if Senator Dick Durbin reads about these spiders in the Chicago Tribune over breakfast? I can see another letter coming. And who will Dick Durbin write? The current Administrator of NHTSA is David Strickland, formerly the senior Senate staffer largely responsible for the Senate's role for creating our beloved CPSIA. Check out Rep. John Dingell's "gushing" remarks about the contribution of the Senate to that great legislative achievement. Durbin and Strickland, that "A Team" will get it done for the American public!
Spiders, cars and lead paint. It's a consumer advocate's worst nightmare. This requires a LEGISLATIVE SOLUTION, guys!
Needless to say, it is only a matter of time before Rep. Henry Waxman calls for hearings to interrogate Mazda management. Did they check the electronics? No, Mazda blamed the drivers for the spiders. . . . And what if Senator Dick Durbin reads about these spiders in the Chicago Tribune over breakfast? I can see another letter coming. And who will Dick Durbin write? The current Administrator of NHTSA is David Strickland, formerly the senior Senate staffer largely responsible for the Senate's role for creating our beloved CPSIA. Check out Rep. John Dingell's "gushing" remarks about the contribution of the Senate to that great legislative achievement. Durbin and Strickland, that "A Team" will get it done for the American public!
Spiders, cars and lead paint. It's a consumer advocate's worst nightmare. This requires a LEGISLATIVE SOLUTION, guys!
Friday, February 25, 2011
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:
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.
Thursday, February 24, 2011
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.
What a nauseating way to finish out such a lovely day.
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 - Nancy Nord Chimes in on Baby Monitors
You gotta read Nancy Nord's blog on the baby monitor recall. It speaks for itself and is basically on the topic of why they call certain actions "recalls" and others something else. In the controversial recall of Summer Infant baby monitor, Ms. Nord notably admits the involvement of the CPSC in this recall. Check it out. This is NOT my imagination.
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?
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?
Wednesday, February 23, 2011
CPSIA - Congress and CPSC in the Clouds . . . .
I have heard from an old friend today, a resale shop owner. The store owner is as frustrated as anyone by the CPSIA and has some interesting observations. The store owner's point is that it is utterly impractical for store personnel to be up-to-date on recalls or to manage recall issues on a day-to-day basis. Think recalled baby monitors with "remedies" like a new warning label. Think also of the national chain of resale shops that told us that many of their MANAGERS are paid $8 per hour. Can you get a sense of the brilliance of Congress' master plan yet?
The store owner sent me a picture worth a thousand words:
The store owner sent me a picture worth a thousand words:
The store owner: "The photo I've attached is of my six-inch binder of printouts for every recall on children's items since the early 90's. The papers on the floor are the new recalls since September 2010. I printed those last week, so I need to go back and print the newer ones. I take this binder to all my events and strive to search it thoroughly to keep recalled items out of our events. I'm going shopping today to pick up a second six-inch binder as I'm obviously going to need it." [Emphasis added]
Sounds very practical. I am sure Scott Wolfson and Sean Oberle have some useful tips for this store owner on how to manage all this data. It is worth NOTING that rifling through 20 years of CPSC recalls is not the store owner's main business - their business is selling gently-used merchandise - but it probably seems like it nowadays.
The store owner is also a victim of unscrupulous "gaming" by a competitor who seeks to capitalize on fear and the ambitions of local politicians to put pressure on him/her. The store owner: "I'm no longer comfortable posting publicly about CPSIA since a local children's resale full-time store owner has told several of her shoppers that she's planning to call the [local] Attorney General to come investigate my next seasonal consignment event to be sure I'm in compliance with CPSIA. Since I don't have XRF vision, there is no way to prove I'm in compliance with the instructions to not resell anything over the lead limits, despite the fact that I'm not required to test. I still don't have a clue what do to about phthalates, but I've banned all bath books, bath toys, & teething toys from our events anyway." [Emphasis added]
There's a stimulus plan for you. . . .
Did you catch the store owner referring to any topic relating to safety, such as injuries or concern for the health of children? Nope. It isn't the concern of the competing store owner or the local Attorney General, either. This is about officious bureaucracy, paperwork for paperwork's sake, all to satisfy a neurotic anxiety without a basis in FACT.
I used to ask "Where are the victims?" The zealots in the last three years have been able to produce exactly ZERO injured children from lead or phthalates in children's products. So I guess I have to nominate my friend the store owner - a prototypical victim of this law.
Job well done, Congress and CPSC!
Tuesday, February 22, 2011
CPSIA - Come On, Sean, Get Real!
Sean Oberle took issue with my analysis of the Summer Infant recall of baby monitors tonight in an essay in the Product Safety Letter. In my recent blogposts, I noted that sale of the Summer Infant baby monitors can't be resold without their kit of the label, the new instructions and the clips. True fact. As a practical matter, this is essentially a ban of resale of this item because in the REAL WORLD, resale shops do not have the time to lavish on researching this kind of nonsense.
Does ANYONE think a resale shop is going to verify that a baby monitor has the right sticker on it? What planet are you from? They WILL, however, note that this item has been recalled. In the mist of time, the reason WHY it was recalled will be long forgotten. Again, who has the time to figure all this out? Maybe Sean Oberle and Scott Wolfson, but the rest of us won't do it.
That the items can somehow be resold legally is simply a technicality. Ask any resale shop.
As for my "confusion" between the "reason" for the recall and the "remedy", I believe I was not confused at all. For one thing, the supposed "remedy" is no remedy at all. A warning label about the cord is superfluous by any definition and absurdly ineffective to prevent further harm. The "reason" for the recall has nothing to do with a hazard related to this item. It may relate to a proactive step recommended by the company's lawyers, given the likelihood that they have been sued over the two unfortunate accidents. I stand by my position that this hazard falls into the category of parental supervision, not a product "defect". I may not be alone in this view, to judge by the hundreds of comments on this MSNBC article.
More fantastic is Mr. Oberle's characterization of the recall and how "voluntary" it was. I have no person knowledge of this situation, so perhaps he is right. Then again . . . rumors of CPSC coercion on this kind of thing are rampant. Threats of penalties, preemptive press releases and possible litigation have been rumored in many cases. Ms. Tenenbaum is not above sabor rattling in speeches, either. Think of last year's ICPHSO keynote speech, for example. We have received at least one threat from the CPSC which I have thusfar restrained myself from discussing in this space. It's very real. "Voluntary" is in the eyes of the beholder.
I must also say that I don't see the benefit that the CPSC brings to this party IF the recall was "voluntary". If this was REALLY the company's idea, why does the CPSC have to sign off on it? Why is the CPSC in a better position to figure out how to best resolve this informational issue? After all, Summer Infant had 1.7 million reasons to get this right (plus an unknown number of lawsuits). I don't buy the idea promoted by Mr. Wolfson in the Chicago Tribune's hyperbolic article on pool drains: "CPSC spokesman Scott Wolfson declined to comment on AquaStar's actions. In general, though, he said: 'A company is not allowed to take unilateral action that is intended to fix a safety problem with their product without reporting and coordinating that action with the CPSC.'" Scott, where does it say that, precisely?
Even more to the point, why is this a "recall" anyhow? The CPSC could have avoided the entire issue by labeling this event an "alert". There would be no implications for resale shops had they chosen that path. Was it REALLY the company's idea to RECALL these items? Were they offered an "alert" but refused? Oh, sure.
At some point, I hope the CPSC will take more responsibility for its actions, rather than justify whatever they choose to do. Mr. Wolfson may have an answer for everything but that doesn't make the agency's actions right, fair or appropriate. The many comments on the MSNBC article indicate that no one is being fooled. Recall upon recall upon recall is alienating the public, NOT making them feel safer.
Come on, Sean, get real. The CPSC can raise its game, and as a member of the Fourth Estate, you can push them in that direction. I am not the enemy here.
Does ANYONE think a resale shop is going to verify that a baby monitor has the right sticker on it? What planet are you from? They WILL, however, note that this item has been recalled. In the mist of time, the reason WHY it was recalled will be long forgotten. Again, who has the time to figure all this out? Maybe Sean Oberle and Scott Wolfson, but the rest of us won't do it.
That the items can somehow be resold legally is simply a technicality. Ask any resale shop.
As for my "confusion" between the "reason" for the recall and the "remedy", I believe I was not confused at all. For one thing, the supposed "remedy" is no remedy at all. A warning label about the cord is superfluous by any definition and absurdly ineffective to prevent further harm. The "reason" for the recall has nothing to do with a hazard related to this item. It may relate to a proactive step recommended by the company's lawyers, given the likelihood that they have been sued over the two unfortunate accidents. I stand by my position that this hazard falls into the category of parental supervision, not a product "defect". I may not be alone in this view, to judge by the hundreds of comments on this MSNBC article.
More fantastic is Mr. Oberle's characterization of the recall and how "voluntary" it was. I have no person knowledge of this situation, so perhaps he is right. Then again . . . rumors of CPSC coercion on this kind of thing are rampant. Threats of penalties, preemptive press releases and possible litigation have been rumored in many cases. Ms. Tenenbaum is not above sabor rattling in speeches, either. Think of last year's ICPHSO keynote speech, for example. We have received at least one threat from the CPSC which I have thusfar restrained myself from discussing in this space. It's very real. "Voluntary" is in the eyes of the beholder.
I must also say that I don't see the benefit that the CPSC brings to this party IF the recall was "voluntary". If this was REALLY the company's idea, why does the CPSC have to sign off on it? Why is the CPSC in a better position to figure out how to best resolve this informational issue? After all, Summer Infant had 1.7 million reasons to get this right (plus an unknown number of lawsuits). I don't buy the idea promoted by Mr. Wolfson in the Chicago Tribune's hyperbolic article on pool drains: "CPSC spokesman Scott Wolfson declined to comment on AquaStar's actions. In general, though, he said: 'A company is not allowed to take unilateral action that is intended to fix a safety problem with their product without reporting and coordinating that action with the CPSC.'" Scott, where does it say that, precisely?
Even more to the point, why is this a "recall" anyhow? The CPSC could have avoided the entire issue by labeling this event an "alert". There would be no implications for resale shops had they chosen that path. Was it REALLY the company's idea to RECALL these items? Were they offered an "alert" but refused? Oh, sure.
At some point, I hope the CPSC will take more responsibility for its actions, rather than justify whatever they choose to do. Mr. Wolfson may have an answer for everything but that doesn't make the agency's actions right, fair or appropriate. The many comments on the MSNBC article indicate that no one is being fooled. Recall upon recall upon recall is alienating the public, NOT making them feel safer.
Come on, Sean, get real. The CPSC can raise its game, and as a member of the Fourth Estate, you can push them in that direction. I am not the enemy here.
Monday, February 21, 2011
CPSIA - Watch Out, Resale Shops! The CPSC is Watching . . . .
An alert reader pointed out today that the 1.7 million "recalled" baby monitors (the ones that need a new sticker) can't be sold at resale shops anymore. After all, they have been recalled so they are verboten now. Presumably they can only be sold accompanied by their anti-recall kit of the fancy new label restating the obvious, new instructions telling parents to come inside during rain storms and the clips (gotta have them clips!). As a practical matter, this will be impossible for resale shops to manage, so I hope resale shops everywhere are pulling these baby monitors to keep America safe.
In fact, the "hazard" that these devices present is common among all baby monitors so I certainly hope those shops stop selling all that merchandise immediately. Alert! Alert! No more baby monitors! And the hazard is found in everything with a cord that might be used near a crib - so you better stop selling humidifiers, lights, radios and the like. As the G-Men used to say, "Stop or I'll shoot!"
Don't forget, the CPSC has the U.S. Attorney ready and willing to put you out of business to protect . . . the . . . children. What would we do without those guys to keep us so darned safe?
And there will be penalties a-plenty, too, count on it. Jail time for selling a baby monitor? Well, we'll have to see about that.
If you live the clean life and stop selling anything remotely connected to children, these issues won't be a problem for you. Something to think about . . . .
I meant for the stores. Certainly not for Congress.
In fact, the "hazard" that these devices present is common among all baby monitors so I certainly hope those shops stop selling all that merchandise immediately. Alert! Alert! No more baby monitors! And the hazard is found in everything with a cord that might be used near a crib - so you better stop selling humidifiers, lights, radios and the like. As the G-Men used to say, "Stop or I'll shoot!"
Don't forget, the CPSC has the U.S. Attorney ready and willing to put you out of business to protect . . . the . . . children. What would we do without those guys to keep us so darned safe?
And there will be penalties a-plenty, too, count on it. Jail time for selling a baby monitor? Well, we'll have to see about that.
If you live the clean life and stop selling anything remotely connected to children, these issues won't be a problem for you. Something to think about . . . .
I meant for the stores. Certainly not for Congress.
CPSIA - CPSC Recalls Baby Product for Missing Warning Label
Striking a new low for the Nanny State, the CPSC last week recalled 1.7 million baby monitors/cameras for a missing warning label.
Let me repeat - this recall was over a missing warning label.
There is no sign from the announcement that the warning label was required by law - this is apparently an ex post facto requirement dreamt up by the CPSC.
Anyone ever heard of cost/benefit analysis in the U.S. government???
So what was the hazard? As with many baby product recalls, there were two deaths of infants involved. Two children, one six months old and one 20 months old, strangled on cords attached to baby monitors made by a company called Summer Infant. As Summer Infant notes on its recall notice, there have been seven strangulations since 2004 involving cords on baby monitors placed in or near cribs, but only two involved Summer Infant products. This is NOT a product recall, as they clarify - they are providing new stickers, a new guide and some clips to hold cords. It was a "voluntary" recall, or so the company says.
Let me get this out of the way: I am as regretful as the next person about the tragic death of two toddlers. I do not discount the significance of that loss.
However . . . dangling cords near a crib is a bad idea that most parents recognize. This is not specific to baby monitors, either. Check out the CPSC's illustration of the hazard:
This is the same hazard as ANY electrical device near a crib - a light, a radio, a humidifier, you name it. This is NOT a specific hazard of the baby monitor in question, nor of any specific electrical device. One wonders why the CPSC chose to recall this product or why they called their action a "recall".
It is unfortunately elemental that cords near a crib can maim or kill. This is no different than the hazard presented by the cords on blinds near a crib. It is very sad that such terrible accidents have happened seven times over eight years. That's seven unnecessary tragedies no doubt caused by mistake or simple error. Nonetheless, it is NOT the responsibility of the manufacturer or the State to guarantee good luck or good parenting. Some hazards are for the parents to manage. At a certain point, individual responsibility must be asserted.
As a manufacturer, the fiat of a federal agency issuing a RECALL for a missing warning label is terrifying, especially under these circumstances. Of course, consumers are becoming jaded by endless recalls, too. As the agency loses ALL perspective on which hazards deserve regulatory attention (everything seems to be a hazard these days), and blaring headlines numb everyone to the signficance of recalls in general, it is hard to resist cynicism. The CPSC with all the good intentions in the world . . . is starting to make a mockery of itself.
It's a mania. Somebody help us.
Let me repeat - this recall was over a missing warning label.
There is no sign from the announcement that the warning label was required by law - this is apparently an ex post facto requirement dreamt up by the CPSC.
Anyone ever heard of cost/benefit analysis in the U.S. government???
So what was the hazard? As with many baby product recalls, there were two deaths of infants involved. Two children, one six months old and one 20 months old, strangled on cords attached to baby monitors made by a company called Summer Infant. As Summer Infant notes on its recall notice, there have been seven strangulations since 2004 involving cords on baby monitors placed in or near cribs, but only two involved Summer Infant products. This is NOT a product recall, as they clarify - they are providing new stickers, a new guide and some clips to hold cords. It was a "voluntary" recall, or so the company says.
Let me get this out of the way: I am as regretful as the next person about the tragic death of two toddlers. I do not discount the significance of that loss.
However . . . dangling cords near a crib is a bad idea that most parents recognize. This is not specific to baby monitors, either. Check out the CPSC's illustration of the hazard:
This is the same hazard as ANY electrical device near a crib - a light, a radio, a humidifier, you name it. This is NOT a specific hazard of the baby monitor in question, nor of any specific electrical device. One wonders why the CPSC chose to recall this product or why they called their action a "recall".It is unfortunately elemental that cords near a crib can maim or kill. This is no different than the hazard presented by the cords on blinds near a crib. It is very sad that such terrible accidents have happened seven times over eight years. That's seven unnecessary tragedies no doubt caused by mistake or simple error. Nonetheless, it is NOT the responsibility of the manufacturer or the State to guarantee good luck or good parenting. Some hazards are for the parents to manage. At a certain point, individual responsibility must be asserted.
As a manufacturer, the fiat of a federal agency issuing a RECALL for a missing warning label is terrifying, especially under these circumstances. Of course, consumers are becoming jaded by endless recalls, too. As the agency loses ALL perspective on which hazards deserve regulatory attention (everything seems to be a hazard these days), and blaring headlines numb everyone to the signficance of recalls in general, it is hard to resist cynicism. The CPSC with all the good intentions in the world . . . is starting to make a mockery of itself.
It's a mania. Somebody help us.
Monday, November 29, 2010
CPSIA - Wingnut or Dingbat, You Make the Call!
Hey, it's her words - is Deborah Blum a "wingnut" or a "dingbat"? In her blogpost from earlier today, Ms. Blum takes Inez Tenenbaum to task for her sins in not clamping down HARDER on American businesses stupid enough to continue selling children's products. Ms. Blum is apparently a journalism professor at the University of Wisconsin.
As an aside, I must say I had the mildest twinge of sympathy for Ms. Tenenbaum after I read Blum's blogpost. This is not my usual emotion when thinking about the CPSC Chairman, but heck, there's no winning for her, is there? I don't want her job.
Ms. Blum's contention is so asinine that it hardly bears repeating except that apparently Twitter is alive with tweets and re-tweets of her blogpost. Her thesis is that Ms. Tenenbaum tolerates excessive amounts of lead in children's products and explains it thus:
"So I’ve come up with a nice little conspiracy theory. You and your business partners are tired of low-income consumers. They can only afford dirt-cheap crap from China, their purchases don’t add up enough to float the balance sheets. So, of course, you aren’t protecting them with tougher regulations. Of course, American corporations aren’t investing in safer products. Slowly but surely, one piece of jewelry, one pair of plastic boots at a time, you’re getting rid of everyone who doesn’t matter enough to be kept safe. Sure it sounds crazy. But is it any crazier than importing poisoned goods for almost ten years without looking for alternatives or better safety systems? I don’t think so. So who’s the wingnut now?" [Emphasis added]
Hey, Ms. Blum, I can answer that one - YOU are the wingnut.
Pot calling the kettle black, I think Ms. Blum shows why some blogs must be "discounted". She makes about every possible reactive error in assessing the lead "problem" in children's products:
As an aside, I must say I had the mildest twinge of sympathy for Ms. Tenenbaum after I read Blum's blogpost. This is not my usual emotion when thinking about the CPSC Chairman, but heck, there's no winning for her, is there? I don't want her job.
Ms. Blum's contention is so asinine that it hardly bears repeating except that apparently Twitter is alive with tweets and re-tweets of her blogpost. Her thesis is that Ms. Tenenbaum tolerates excessive amounts of lead in children's products and explains it thus:
"So I’ve come up with a nice little conspiracy theory. You and your business partners are tired of low-income consumers. They can only afford dirt-cheap crap from China, their purchases don’t add up enough to float the balance sheets. So, of course, you aren’t protecting them with tougher regulations. Of course, American corporations aren’t investing in safer products. Slowly but surely, one piece of jewelry, one pair of plastic boots at a time, you’re getting rid of everyone who doesn’t matter enough to be kept safe. Sure it sounds crazy. But is it any crazier than importing poisoned goods for almost ten years without looking for alternatives or better safety systems? I don’t think so. So who’s the wingnut now?" [Emphasis added]
Hey, Ms. Blum, I can answer that one - YOU are the wingnut.
Pot calling the kettle black, I think Ms. Blum shows why some blogs must be "discounted". She makes about every possible reactive error in assessing the lead "problem" in children's products:
- She confuses CPSC lead recalls (according to her, 289 since 2001 - "more than 30 recalls every single year") with lead injuries. Hysteria over the POSSIBILITY of injury without bothering to assess the PROBABILITY of injury is how we got into this mess in the first place. I am sorry Ms. Blum is so easily rattled but isn't the data on injuries relevant? I have documented one reported death and three unverified injuries from lead in this period of time. Should we turn our lives upside down to reduce that risk further? This only amplifies my call for a National Xanax Fund.
- She reasons from headlines but shows little mastery of the actual facts. She cites the recall of McDonald's Shrek glasses ("McDonald’s recalled more than 12 million “Shrek 3″ glasses contaminated with the toxic metal cadmium (and also a little lead)") but fails to note that the CSPC has acknowledged in WRITING that the glasses were safe. She also cites the AP's recent report of lead and cadmium in enamel baked on certain glasses, but fails to note that the AP also admitted that the health risk was low or that the presence of these heavy metals is LEGAL in enamels of this type. Congress did that, and how could we EVER doubt Congress?!
- Ms. Blum repeats the junk science notion that if lead is bad in some cases, it MUST be bad in all cases. She absurdly compares lead in enamel with lead in drinking water, and then asks why there aren't standards to protect adults from the dangers of lead in enamels. Ms. Blum, can I see your turnip truck?
- Ms. Blum plays the China card, a jingoistic line of reasoning used by blamestormers. We make many of our products in China, and I consider this kind of finger pointing a contemporary form of racism. I have a lot of experience with Chinese sources, and have good reason to trust our trading partners. Ms. Blum regrettably has no idea what she is talking about when she blames "China", as though we all buy from the government of China. We do business with other privately-owned companies, not "China". It may make the world seem less complex to equate "cheap" with "poor quality" or "dangerous". It is not accurate, however.
If the Deborah Blums of the world get the upper hand in this regulatory mess, they will solve the lead problem, I am sure. It won't be a solution you will like, nor will it be effective. Lead was here before Deborah Blum roamed the Earth and will here after she's gone - it's an ELEMENT, after all. No law can banish it, and no economy can survive if lead must be eliminated in all forms from all products, even in unharmful trace amounts.
She will succeed, however, in killing off all companies that make children's products. That will solve the "problem" she is apparently obsessed with, but will create other, more serious ones.
Let's hope we don't continue to slide down this slippery slope led by people who can't decide if they are wingnuts or dingbats. It's a tough call, I'll admit. She might be both.
Monday, October 18, 2010
CPSIA - Appropriate Recall Points Out The Real Problem
795 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 15 days left until Election Day.
The CPSC today announced a recall of a product called "Bathtub Subs". The battery-operated bathtub submarine toy is "yellow, has a smiling face, turquoise windows, an orange propeller and an orange periscope that turns the toy on and off. The intake valve has a water pump that sucks in water to propel the submarine." The cringe-worthy problem: "The intake valve on the bottom of the submarine toy can suck up loose skin, posing laceration hazard to children. . . . CPSC and the company are aware of 19 incidents of lacerations to boys' genital area. One of the incidents required medical attention."
By Julie Everett (Florida)
By Pamela Beightol (Falconer, NY United States)
I had the same thing happen to my 15 month old when he was playing with the toy. His skin from his penis got cut after about 3 minutes play with the toy. I would not let my 5 year old play with it either.
I would have given it no stars if possible, August 26, 2010
By Kendall Tupker
The same thing happened to my 13 month old son. We had just given him this toy to play with in the bathtub and within a few minutes he was screaming in pain. While he was holding it in the water near his lap it caught his foreskin and cut him. Needless to say the sub ended up in the garbage and I made a complaint to the company. Never, ever buy this toy."
This was publicly available on Amazon for months before either the company or the agency did anything about it. By all appearances, neither did Amazon.
Let's face it, this item is not exactly a dire threat to our way of life. That being said, this kind of insensitivity to consumer needs and expectations is how unjust laws like the CPSIA get written, passed and revered. It is also raw, red meat for a headline-mad CPSC anxious to justify its existence and its budget. Do I hear massive penalties?! Manufacturers have to think ahead and consider whether they want stories like this told about them. This is a compliance issue, a duty of care issue. It is NOT an issue that requires legislation. Unfortunately, nothing is routine at our regulator these days. Who knows what the implications will be flowing from this recall.
One last thought: among the many reasons that I truly HATE the CPSIA, it is the rising specter of a liability feeding frenzy over children's product safety. This can ruin what we are doing, and in any event, I don't relish planning my business around protecting myself from ravaging trial attorneys. Paranoid? Well, I received notice of this recall at 5:40 PM CST and in the next 15 minutes found these two sites devoted to this very recall:
Lawsuit Settlement Funding and Lawyers-and-Settlements.com. The latter website invites: "If your child has suffered an injury related to the use of this product, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation." Remember, this was up within 15 minutes of the announcement of the recall.
Think of the chaos that will follow the much-anticipated public database. We can only pray that a Republican Congress will de-fund the database before it gets off the ground. Or else we'll all be in the ground . . . .
Vote on November 2nd. It's your duty!
The CPSC today announced a recall of a product called "Bathtub Subs". The battery-operated bathtub submarine toy is "yellow, has a smiling face, turquoise windows, an orange propeller and an orange periscope that turns the toy on and off. The intake valve has a water pump that sucks in water to propel the submarine." The cringe-worthy problem: "The intake valve on the bottom of the submarine toy can suck up loose skin, posing laceration hazard to children. . . . CPSC and the company are aware of 19 incidents of lacerations to boys' genital area. One of the incidents required medical attention."
This product has a real safety issue, and it has nothing to do with lead. We can understand the problem because the issues can be described accurately and the injuries can be measured. This is how we can measure the right response. The product was aimed at very young children (toddlers) in bath-time play. It seems foreseeable that the toy might rest against "sensitive" areas. The product was not apparently designed with this risk in mind. Please contrast your ability to assess the issue here with, say, rocks, fossils, pens, ATVs, bicycles, musical instruments, children's underwear, shoes, books and other products that have famously run afoul of the CPSIA's restrictions on lead without demonstrating any apparent safety issues.
As a toy maker, I hate when this kind of problem happens. It makes all of us look bad, even we had nothing to do with the issue. We all get blamed for problems caused by other companies. This is how CPSIA's are born.
There were 19 incidents in the last year with this product. Makes you wonder what it takes to get someone to do something about the issue. Do you think this was a "mystery"? Here's what you find on the Amazon.com review page today (before it gets taken down):
"Dangerous toy, May 25, 2010
By Tyler Warren
I bought this toy for my 12 month old son. He was playing with it in the bath one evening and put it down in his lap. It sucked up some skin on his penis and cut it. I called and put in a complaint to Munchkin and I am very disappointed that this toy is still on the market a month later. This toy is dangerous and should not be given to children.
Comment Initial post: June 15, 2010 8:37 PM PDT
Julie Everett says:
The same thing happened to my 19 month old son tonight. I reported it to the CPSP [sic]. You should do the same since the company didn't take you seriously. My son has injuries to his penis and testicles. Here is the link if you like. https://www.cpsc.gov/cgibin/incident.aspx
By Julie Everett (Florida)
My son loves this toy. Tonight he was playing with it in the tub and also set it in his lap and it sucked some of the skin from his penis and his testicles and cut both of them. I will be filing a complaint with the company as well. Do not buy this for your child!
By Pamela Beightol (Falconer, NY United States)
I had the same thing happen to my 15 month old when he was playing with the toy. His skin from his penis got cut after about 3 minutes play with the toy. I would not let my 5 year old play with it either.
I would have given it no stars if possible, August 26, 2010
By Kendall Tupker
The same thing happened to my 13 month old son. We had just given him this toy to play with in the bathtub and within a few minutes he was screaming in pain. While he was holding it in the water near his lap it caught his foreskin and cut him. Needless to say the sub ended up in the garbage and I made a complaint to the company. Never, ever buy this toy."
This was publicly available on Amazon for months before either the company or the agency did anything about it. By all appearances, neither did Amazon.
Let's face it, this item is not exactly a dire threat to our way of life. That being said, this kind of insensitivity to consumer needs and expectations is how unjust laws like the CPSIA get written, passed and revered. It is also raw, red meat for a headline-mad CPSC anxious to justify its existence and its budget. Do I hear massive penalties?! Manufacturers have to think ahead and consider whether they want stories like this told about them. This is a compliance issue, a duty of care issue. It is NOT an issue that requires legislation. Unfortunately, nothing is routine at our regulator these days. Who knows what the implications will be flowing from this recall.
One last thought: among the many reasons that I truly HATE the CPSIA, it is the rising specter of a liability feeding frenzy over children's product safety. This can ruin what we are doing, and in any event, I don't relish planning my business around protecting myself from ravaging trial attorneys. Paranoid? Well, I received notice of this recall at 5:40 PM CST and in the next 15 minutes found these two sites devoted to this very recall:
Lawsuit Settlement Funding and Lawyers-and-Settlements.com. The latter website invites: "If your child has suffered an injury related to the use of this product, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation." Remember, this was up within 15 minutes of the announcement of the recall.
Think of the chaos that will follow the much-anticipated public database. We can only pray that a Republican Congress will de-fund the database before it gets off the ground. Or else we'll all be in the ground . . . .
Vote on November 2nd. It's your duty!
Monday, October 11, 2010
CPSIA - Schylling Penalty Update
788 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 22 days left until Election Day.
You may recall that I expressed outrage over the mega penalty imposed on Schylling Associates earlier this year (see my posts on February 6, June 8, June 9, and June 10). There were many troubling aspects to this penalty, such as an expired statute of limitations and its arbitrary and massive size. This penalty was quite scary, especially in light of Bob Adler's remark at the March 3rd Commission meeting: "I personally wouldn't want to tie our hands by saying that the only time we can hit you with a big civil penalty is when there was a death or a serious injury. There may be an immense potential for death and serious injury which just through fortuity did not occur." There were no injuries in this case. No one has clarified the "immense potential for death and serious injury" in this ordinary and minor lead-in-paint case.
When you read on, don't forget - you could be next.
I submitted a FOIA request for documents relating to this penalty on June 9th.
Four months later, I received a very partial disclosure of documents from Schylling. The CPSC has not disclosed anything to me directly yet - they routed documents to Schylling who routed them to me, redacted for confidential financial information.
I don’t intend to belabor the inadequacy of the CPSC's disclosure right now, except to note that failure to provide full disclosure is against the explicit policy of the agency. Not that policy or the law matters at the CPSC these days if they want to do something else. It’s great to be King, ain’t it? My original FOIA filing included this paragraph:
“In making this request, I note the following statement in 16 CFR §1015(b): ‘The Commission's policy with respect to requests for records is that disclosure is the rule and withholding is the exception. All records not exempt from disclosure will be made available. Moreover, records which may be exempted from disclosure will be made available as a matter of discretion when disclosure is not prohibited by law or is not against the public interest.’”
Enough whining. I will pursue the missing documents with the CPSC but for now, want to give you a clue on how penalties are being imposed by this agency. Quick summary: my original blogposts above were pretty accurate (we're all screwed).
I was given four documents that were not previously available publicly:
1. Letter of March 5, 2010 to CPSC from Patton Boggs LLP, counsel to Schylling.
2. Letter of March 5, 2010 to Patton Boggs from Cheryl Falvey, General Counsel, CPSC
3. Letter of April 21, 2010 to CPSC from Shook, Hardy & Bacon LLP, counsel to Schylling (missing attachments, see below)
4. Email exchange between Trial Attorney, Office of Compliance and Patton Boggs, counsel to Schylling, from September 4-9, 2009.
Schylling also provided me with the letter dated August 10, 2009 from late Senator Ted Kennedy to the Commission protesting the original suggested penalty of $600,000. The penalty was later to reduced to $200,000, approved, rescinded and then doubled to $400,000 by an angry Commission. [Why they got so angry remains a mystery, but their anger oddly is only tangentially related to this discussion today. All permutations of the penalty were unreasonable - before, during and after the Commission got angry.] Finally, Schylling also provided me with missing attachments from the April 21 letter – hate mail they received.
Here’s what I learned about this penalty:
a. There are few apparent constraints on the CPSC when it comes to arbitrary penalty assessment. That's how Schylling got zinged for $400K and probably explains how Daiso got whacked for $2.05 million.
The big issue confronting the CPSC in deciding on this penalty appears to be the profitability of the company and whether the owners collected too much money from the company. It is worth noting that the CPSC chose to weigh in on owners' salaries and bonuses and ALSO on whether the company DISTRIBUTED too much money to the owners. Cash distributions from a S Corp is a RETURN OF CAPITAL - in other words, that cash is the property of the owners. They are legally free to remove it without corporate law or tax implications (as long as the distribution doesn't bankrupt the company, not an issue in this case).
Do you think it is any business of this federal agency whether YOU take YOUR money out of YOUR company? Apparently it is the CPSC's concern and equally, they assert that they can approve or disapprove such transfers after the fact.
Is there a law somewhere that gives them this power?
There is no evidence in the papers that the CPSC weighed ANY mitigating factors, including the lack of injuries.
The CPSC requested the following documents to assess their penalty:
Hmmm.
The March 5th Patton Boggs letter states "When you informed me on February 24 that the Commission had rescinded its provisional approval of the Schylling settlement, you indicated that there was concern that Schylling had misled the Commission regarding the financials, and/or had made exorbitant payments to its owners. Any such allegation is false."
I find this dialogue chilling. Please consider that the CPSC might have been talking about YOU. And might be talking about you soon.
The Patton Boggs letter pleads "Submitted herewith [is] a chart showing the annual salaries and distributions of the three owners of this S-Corp, 2007-2009 . . . . As this shows, the compensation paid to the owners is well within the reasonableness zone for companies of Schylling's size" and continues "salaries paid to the three owners are reasonable and have not increased - except for modest cost of living adjustments - over the past 4 years." [Emphasis added]
Intrusive? Over-reaching? Humiliating? Ready to do this yourself when the time comes???
Does this agency have too much power? What do you think, Commissar?
This letter may be the reason Anne Northup revoked her vote in favor of the $200,000 penalty., even though Kennedy's letter proceeded the decision by almost six months and referred to a penalty THREE TIMES the size presented to the Commission.
Have you done the math in your head about what you would be paying if the CPSC got pissed off at you? Do you have a fund set up to finance this kind of setback? Hmmm.
It's a shame that our legal system provides no way for a company to defend itself against government gone MAD without taking fantastic financial, regulatory or business risks. I fondly remember the days when we had a working legal system in this country and when decisions were subject to review, you know before government power was expanded so dramatically and individual rights were extinguished.
I know, I know, we have to protect the CHILDREN! That makes everything okay. The agency can do no wrong. . . .
I remember those days fondly. I will be thinking of them on November 2nd, too.
In the meantime, I will see if I can get the CPSC to cough up a few more documents for the public to see. They have a policy on this, you know . . . .
You may recall that I expressed outrage over the mega penalty imposed on Schylling Associates earlier this year (see my posts on February 6, June 8, June 9, and June 10). There were many troubling aspects to this penalty, such as an expired statute of limitations and its arbitrary and massive size. This penalty was quite scary, especially in light of Bob Adler's remark at the March 3rd Commission meeting: "I personally wouldn't want to tie our hands by saying that the only time we can hit you with a big civil penalty is when there was a death or a serious injury. There may be an immense potential for death and serious injury which just through fortuity did not occur." There were no injuries in this case. No one has clarified the "immense potential for death and serious injury" in this ordinary and minor lead-in-paint case.
When you read on, don't forget - you could be next.
I submitted a FOIA request for documents relating to this penalty on June 9th.
Four months later, I received a very partial disclosure of documents from Schylling. The CPSC has not disclosed anything to me directly yet - they routed documents to Schylling who routed them to me, redacted for confidential financial information.
I don’t intend to belabor the inadequacy of the CPSC's disclosure right now, except to note that failure to provide full disclosure is against the explicit policy of the agency. Not that policy or the law matters at the CPSC these days if they want to do something else. It’s great to be King, ain’t it? My original FOIA filing included this paragraph:
“In making this request, I note the following statement in 16 CFR §1015(b): ‘The Commission's policy with respect to requests for records is that disclosure is the rule and withholding is the exception. All records not exempt from disclosure will be made available. Moreover, records which may be exempted from disclosure will be made available as a matter of discretion when disclosure is not prohibited by law or is not against the public interest.’”
Enough whining. I will pursue the missing documents with the CPSC but for now, want to give you a clue on how penalties are being imposed by this agency. Quick summary: my original blogposts above were pretty accurate (we're all screwed).
I was given four documents that were not previously available publicly:
1. Letter of March 5, 2010 to CPSC from Patton Boggs LLP, counsel to Schylling.
2. Letter of March 5, 2010 to Patton Boggs from Cheryl Falvey, General Counsel, CPSC
3. Letter of April 21, 2010 to CPSC from Shook, Hardy & Bacon LLP, counsel to Schylling (missing attachments, see below)
4. Email exchange between Trial Attorney, Office of Compliance and Patton Boggs, counsel to Schylling, from September 4-9, 2009.
Schylling also provided me with the letter dated August 10, 2009 from late Senator Ted Kennedy to the Commission protesting the original suggested penalty of $600,000. The penalty was later to reduced to $200,000, approved, rescinded and then doubled to $400,000 by an angry Commission. [Why they got so angry remains a mystery, but their anger oddly is only tangentially related to this discussion today. All permutations of the penalty were unreasonable - before, during and after the Commission got angry.] Finally, Schylling also provided me with missing attachments from the April 21 letter – hate mail they received.
Here’s what I learned about this penalty:
a. There are few apparent constraints on the CPSC when it comes to arbitrary penalty assessment. That's how Schylling got zinged for $400K and probably explains how Daiso got whacked for $2.05 million.
The big issue confronting the CPSC in deciding on this penalty appears to be the profitability of the company and whether the owners collected too much money from the company. It is worth noting that the CPSC chose to weigh in on owners' salaries and bonuses and ALSO on whether the company DISTRIBUTED too much money to the owners. Cash distributions from a S Corp is a RETURN OF CAPITAL - in other words, that cash is the property of the owners. They are legally free to remove it without corporate law or tax implications (as long as the distribution doesn't bankrupt the company, not an issue in this case).
Do you think it is any business of this federal agency whether YOU take YOUR money out of YOUR company? Apparently it is the CPSC's concern and equally, they assert that they can approve or disapprove such transfers after the fact.
Is there a law somewhere that gives them this power?
There is no evidence in the papers that the CPSC weighed ANY mitigating factors, including the lack of injuries.
The CPSC requested the following documents to assess their penalty:
- Federal tax returns for one entity from 2005-2009 and for another entity for 2008-2009
- Federal tax returns for the three family members employed as executives at the company for 2007-2009.
- Federal tax returns for a family trust over 2007-2009 plus financial statements for such entity.
- Information about ownership structure, all affiliated entities with "explanations as to how each relates to [the others]".
- Consolidating and individual financial statements for each entity for full year 2009 (this request is not entirely clear, but this is my interpretation of what the CPSC requested).
Hmmm.
The March 5th Patton Boggs letter states "When you informed me on February 24 that the Commission had rescinded its provisional approval of the Schylling settlement, you indicated that there was concern that Schylling had misled the Commission regarding the financials, and/or had made exorbitant payments to its owners. Any such allegation is false."
I find this dialogue chilling. Please consider that the CPSC might have been talking about YOU. And might be talking about you soon.
The Patton Boggs letter pleads "Submitted herewith [is] a chart showing the annual salaries and distributions of the three owners of this S-Corp, 2007-2009 . . . . As this shows, the compensation paid to the owners is well within the reasonableness zone for companies of Schylling's size" and continues "salaries paid to the three owners are reasonable and have not increased - except for modest cost of living adjustments - over the past 4 years." [Emphasis added]
Intrusive? Over-reaching? Humiliating? Ready to do this yourself when the time comes???
Does this agency have too much power? What do you think, Commissar?
[Btw, the fact that the company's testing budget ballooned from $144K in 2006 to $645K in 2009 didn't save them. It was noted in the letter, but the Commission still whacked them with the $400K penalty.]
In the April 21 Shook Hardy letter, counsel to Schylling makes even clearer what was going on here: "The inference appears to be that Schylling could have afforded to pay a higher civil penalty had its principals not taken excessive compensation or that Schylling and its principals attempted to hide the assets of the business prior to action by the CPSC. This view does not reflect the facts."
To judge by these letters, the agency's goal was to hit Schylling as hard as possible without killing it, and so the debate turned to whether Schylling could withstand the blow. The agency questioned owner compensation because Schylling's disclosure might frustrate the plan to hit them with an epic penalty. To defend the mega penalty, the CPSC actually needed to prove that Schylling was playing games with its disclosure, something their lawyers hotly contested. The issue of safety is lost in the hunt for retribution. How far the CPSC has fallen . . . .
My mind wanders . . . might this CPSC also want a big headline? Hold that thought for a little while.
Don't forget, NO ONE was hurt by the products Schylling recalled. The recalls were YEARS OLD by the time the CPSC decided to make an example of Schylling, arguably past the statute of limitations (for those of you who are small-minded enough to care about the Rule of Law). The company's conduct, good or bad, seems irrelevant to the discussion in these pages.
Can you imagine what it would like to defend yourself against this kind of foe? How can you protect yourself against a vengeful government agency unconstrained by checks-and-balances? I can tell you - Schylling was scared "witless". They had no practical ability to litigate, despite the injustice of this excessive and unfair penalty. In the face of undocumented government threats, the ugly reputation of this agency's tactics whispered among practitioners these days, who would face them down? Bet the company - good idea until it's your company.
Let me know when you figure out what you would do.
b. Schylling's ancillary losses or penalties were substantial. The CPSC was also not accountable for its torts or mistakes. Buyer beware!
Can you trust the CPSC today? I think one can form a better opinion of the trustworthiness of this federal agency after reading the Schylling case documents.
Here are a few additional Schylling punishments and penalties noted in the papers:
- They were forced to withdraw from an important acquisition in May 2009 when threatened with a $600,000 cash penalty (which was later cut by two-thirds).
- They incurred massive legal bills, not to mention costs relating to the recalls.
- The highly-publicized remarks of a CPSC spokesman to the Chicago Tribune in which he discussed the "diminished financial condition" of Schylling led to problems with Schylling's lender. This comment to the press violated the confidentiality of discussions between Schylling and the CPSC - but I guess confidentiality that doesn't apply when the Chicago Tribune calls. I am not aware of any apology from the CPSC about this flagrant violation of trust.
The adverse publicity which resulted from the recall, and fed by a publicity-hungry agency desperate to appease the media and Congressional overlords, led to hate mail like this:
"Being Untruthful about lead in paint has cost you our business. We will tell everyone we know that none of your products can be trusted. This will be painful for your bottom dollar sales. The lack of leadership in your company and caring about the bottom dollars is evident. We hope your made in China policy is worth it!"
and
"Actually, This isn't about the RECENT recall, this is about the SNOW JOB recall you never reported. You people are REAL pieces of sh*t, I lived up there when you distributed these toys, you're about to have you ASS sued off. In case you forgot, I'll help you remember that you are MORTAL ! Maybe you need someone to bring some lead into your life you piece of sh*t. I hope you make the right choice as to just what to do with yourself. Technically, this isn't the same damn email XXX got. btw, you people soon enough won't even BE in the toy business."
[Emphasis added]
Do you get mail like this? What do you think about a federal agency engaging in conduct that produces this kind of extreme response . . . for what is essentially a dispute about administrative procedures involving a no-injury recall of a small number of toys several years ago? Did I mention that there is no way to bring this agency to account? Remorseless pursuit of scary headlines leading to threats of violence against toymakers - I guess this is that famous "change you can believe in".
Yes, we can.
Senator Kennedy noted that the penalty was "disproportionate to penalties recently assessed against other substantially larger companies for the same type of violations." Arbitrary and capricious, perhaps? Kennedy provides DATA to back up his assertion, noting CPSC penalties against Family Dollar Stores, Hobby Lobby Stores, First Learning Company, Ltd., Michaels Stores, A&A Global Industries, Raymond Geddes & Co., Downeast Concepts and Mattel (oh, Mattel . . . ) - ranging between 0.001% and 0.316% of sales. The proposed penalty on Schylling - 2% of sales, ultimately reduced to 1.33% of sales.This letter may be the reason Anne Northup revoked her vote in favor of the $200,000 penalty., even though Kennedy's letter proceeded the decision by almost six months and referred to a penalty THREE TIMES the size presented to the Commission.
Have you done the math in your head about what you would be paying if the CPSC got pissed off at you? Do you have a fund set up to finance this kind of setback? Hmmm.
It's a shame that our legal system provides no way for a company to defend itself against government gone MAD without taking fantastic financial, regulatory or business risks. I fondly remember the days when we had a working legal system in this country and when decisions were subject to review, you know before government power was expanded so dramatically and individual rights were extinguished.
I know, I know, we have to protect the CHILDREN! That makes everything okay. The agency can do no wrong. . . .
I remember those days fondly. I will be thinking of them on November 2nd, too.
In the meantime, I will see if I can get the CPSC to cough up a few more documents for the public to see. They have a policy on this, you know . . . .
Thursday, September 30, 2010
CPSIA - Recall the CPSC
778 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 32 days left until Election Day.
In a remarkable demonstration of the anti-business bias of the current CPSC, Chairman Inez Tenenbaum took to the air today to bash toys and to take our old friend Mattel to task for four recalls of more than eleven million units.
Uh-oh, Mattel's at it again. Hope this doesn't mean it's time for another CPSIA. It is Election time, after all.
Some background:
The CPSC Commission hosed us on Wednesday with its decision on the definition of "Children's Products". [Here is the approved definition.] I will write about this in the next few days. In typical Tenenbaum fashion, rather than face intense and negative media attention on the bungled decision in which the agency knowingly effectively banned hands-on science education in the United States (see The New York Times and Associated Press on this issue), announced several high profile recalls and a scary "warning" about popular but apparently deadly infant products to distract the media and possibly you, too.
The four recalls and the warning are each prominently displayed on the CPSC website. Each was announced by press release so as to garner maximum attention. The new definition of "Children's Products" was not announced, although there are three Commissioner's Statements currently up on the website (Adler, Nord and Northup; Northup has also written a blogpost on the topic). The draft of the new rule is nowhere to be found on the CPSC website. There was no press release for the decision and no reference to the decision on the website other than the buried statements of the (warring) Commissioners. Hmmm.
Probably just a little oversight, right Scott??? More on this later.
The five matters released to distract you were:
a. A warning to stop using Infant positioners in cribs. Twelve babies died in 13 years.
b. Fisher-Price recall of 2.925 million inflatables for choking hazard. Sold over NINE YEARS, 14 small parts found in kids' mouths, three kids were "beginning to choke", no injuries.
c. Fisher-Price recall of 1.075 million high chairs for laceration risk. Sold over NINE YEARS, seven injuries requiring stitches and one "tooth injury".
d. Fisher-Price recall of 120,000 "Wheelies" for choking hazard. Each set includes four cars, so the universe of affected "Wheelies" is actually 480,000. Two broken toys discovered among the half million out in the marketplace (wheels fell off). No injuries.
e. Fisher-Price recall of 7.15 million Children's Tricycles for risk of "serious injury". Sold over FOURTEEN YEARS, ten injuries with six requiring medical attention (cuts).
Interestingly, when these recalls were brought to my attention this morning, the CPSC website simply listed the four Fisher-Price recalls as it normally does for recalls. However, by midday the marketing of the "crisis" had begun with a screaming headline in large print on the home page reading "Fisher-Price Recalls More than 10 Million Products". No doubt the presentation was changed as a public service (these products are sooooo dangerous) . . . . The link under the headline leads to a blogpost about the four "grisly" recalls noting the following "information":
"Fisher-Price did the right thing in agreeing to provide consumers with free remedies for these products. But all companies must do better. They must give more attention to building safety into their products. They must work to ensure that they are adhering to safety standards. And if any company finds itself with a defective product or one that is causing injuries, it must report the problem to CPSC immediately. Meanwhile, as moms, dads and caregivers, you, too, have a role. We thank the dozens of you who reported these incidents. Thanks to you, CPSC was able to investigate, work with Fisher-Price on a remedy and recall these products. If a toy breaks in your child’s hands or if your child suffers an injury from a product, tell us so that we can investigate. And if you own one of these recalled products, stop using it and contact Fisher-Price for free repair kits and replacement products." [Emphasis added]
Is this about Fisher-Price (Mattel) or about you and me? Did we do something wrong? Apparently we must have. We were spanked in this blogpost. Was it a "teachable moment" for you? Was it as good for you as it was for me?
There is so much more to say about this:
1. I find it shocking that the CPSC would so shamelessly try to cover its tracks on the approval of the final "Children's Product" definition. It's not only an embarrassment to the agency, but it's an insult to your intelligence. How this reflects the agency's view of the media, I will leave it to you to divine. It ain't a compliment.
In a remarkable demonstration of the anti-business bias of the current CPSC, Chairman Inez Tenenbaum took to the air today to bash toys and to take our old friend Mattel to task for four recalls of more than eleven million units.
Uh-oh, Mattel's at it again. Hope this doesn't mean it's time for another CPSIA. It is Election time, after all.
Some background:
The CPSC Commission hosed us on Wednesday with its decision on the definition of "Children's Products". [Here is the approved definition.] I will write about this in the next few days. In typical Tenenbaum fashion, rather than face intense and negative media attention on the bungled decision in which the agency knowingly effectively banned hands-on science education in the United States (see The New York Times and Associated Press on this issue), announced several high profile recalls and a scary "warning" about popular but apparently deadly infant products to distract the media and possibly you, too.
The four recalls and the warning are each prominently displayed on the CPSC website. Each was announced by press release so as to garner maximum attention. The new definition of "Children's Products" was not announced, although there are three Commissioner's Statements currently up on the website (Adler, Nord and Northup; Northup has also written a blogpost on the topic). The draft of the new rule is nowhere to be found on the CPSC website. There was no press release for the decision and no reference to the decision on the website other than the buried statements of the (warring) Commissioners. Hmmm.
Probably just a little oversight, right Scott??? More on this later.
The five matters released to distract you were:
a. A warning to stop using Infant positioners in cribs. Twelve babies died in 13 years.
b. Fisher-Price recall of 2.925 million inflatables for choking hazard. Sold over NINE YEARS, 14 small parts found in kids' mouths, three kids were "beginning to choke", no injuries.
c. Fisher-Price recall of 1.075 million high chairs for laceration risk. Sold over NINE YEARS, seven injuries requiring stitches and one "tooth injury".
d. Fisher-Price recall of 120,000 "Wheelies" for choking hazard. Each set includes four cars, so the universe of affected "Wheelies" is actually 480,000. Two broken toys discovered among the half million out in the marketplace (wheels fell off). No injuries.
e. Fisher-Price recall of 7.15 million Children's Tricycles for risk of "serious injury". Sold over FOURTEEN YEARS, ten injuries with six requiring medical attention (cuts).
Interestingly, when these recalls were brought to my attention this morning, the CPSC website simply listed the four Fisher-Price recalls as it normally does for recalls. However, by midday the marketing of the "crisis" had begun with a screaming headline in large print on the home page reading "Fisher-Price Recalls More than 10 Million Products". No doubt the presentation was changed as a public service (these products are sooooo dangerous) . . . . The link under the headline leads to a blogpost about the four "grisly" recalls noting the following "information":
"Fisher-Price did the right thing in agreeing to provide consumers with free remedies for these products. But all companies must do better. They must give more attention to building safety into their products. They must work to ensure that they are adhering to safety standards. And if any company finds itself with a defective product or one that is causing injuries, it must report the problem to CPSC immediately. Meanwhile, as moms, dads and caregivers, you, too, have a role. We thank the dozens of you who reported these incidents. Thanks to you, CPSC was able to investigate, work with Fisher-Price on a remedy and recall these products. If a toy breaks in your child’s hands or if your child suffers an injury from a product, tell us so that we can investigate. And if you own one of these recalled products, stop using it and contact Fisher-Price for free repair kits and replacement products." [Emphasis added]
Is this about Fisher-Price (Mattel) or about you and me? Did we do something wrong? Apparently we must have. We were spanked in this blogpost. Was it a "teachable moment" for you? Was it as good for you as it was for me?
There is so much more to say about this:
1. I find it shocking that the CPSC would so shamelessly try to cover its tracks on the approval of the final "Children's Product" definition. It's not only an embarrassment to the agency, but it's an insult to your intelligence. How this reflects the agency's view of the media, I will leave it to you to divine. It ain't a compliment.
2. Inez Tenenbaum went on TV today to stoke fear of toys. She did this on what is essentially the kick-off day for the Xmas toy season, September 30. Yes, our government sent its top safety official on national TV to scare the crap out of consumers and to warn them not to trust the companies making toys right as they were going out to the store to buy Xmas presents. This is a Barack Obama stimulus plan in action! Thanks for ALL the help, guys. Doin' the Lord's work every day . . . .
Here are a few quotes from Tenenbaum's ABC News interview:
ABC: "It's a major recall involving four different products."
ABC: [Re High Chairs] "The problem with the high chair, I understand, is these pegs. What's the problem there?"
Tenenbaum: "There pegs stick out and children have fallen on these pegs. Several have been injured and seven have required stitches."
[Tenenbaum smirks as she neglects to advise that the seven injuries requiring stitches took place over NINE YEARS and were all minor injuries.]
ABC: [Re Trikes] “The hazard is a fake key that protrudes from the bike frame.”
Tenenbaum: “These tricycles have this key which sticks up and little girls have jumped on this key and have had serious cuts.”
ABC: “Serious injuries.”
Tenenbaum: “Serious injuries.”
[Another minor omission - Tenenbaum neglects to mention that the six injuries requiring medical attention affected six children among more than seven million users, took place over 14 years and involved toddlers that were supposed to be under parental supervision. Do you think she was helpful enough to the ambitious reporter who wanted a scary story? At least she took the hint and characterized the injuries as "serious injuries".]
. . . .
ABC: "There's a message in this for all manufacturers."
Tenenbaum: "Manufacturers need to build safety into the product from the very beginning so that we don't have to recall on the back end." [Emphasis added]
[This is my Xmas gift from Tenenbaum. Mattel is the cause of this, and it's Mattel that screwed up if ANYONE screwed up. Still, Ms. Tenenbaum can't miss the opportunity to use TV to tell MY customers to not trust ME. Thanks so much. And this Administration is MYSTIFIED about why we can't get our job market going again. I'm stumped, too. . . .]
ABC: "In a statement this morning, Fisher-Price said it wanted to reassure parents that its products are 'overwhelmingly safe'. But if you have any of THESE products, you SHOULD call the company. They will offer a fix for some of them . . . others will be replaced outright." [Emphasis added]
[Lest anyone mistake this for yet another idiotic and reactive series of recalls, ABC tries to portray Mattel as untrustworthy with the quote about the overwhelming safety of the 11 million recalled toys . . . then tells you to get them out of your house pronto.]
3. The Wall Street Journal was able to put a happy face on this sorry episode. Mattel's 2010 earnings will only shrink by a penny a share because of the massive recalls. Anyone want to organize a telethon to help out a buddy in distress? How will Mattel make up that penny? Oh, the horror of it. . . .
4. I would be remiss if I didn't remind you that Mattel has succeeded in certifying about ten of its corporate labs to test its products. I call on the CPSC to release the Mattel test reports behind these recalled items. I can't wait to see the first recall of a Mattel item tested in a CPSC-certified Mattel lab. You'll never know about it, because the CPSC and Mattel will move heaven and earth to keep you from finding out.
5. The recall of the Mattel "Wheelies" will be known as the original "broken toy standard" recall. Please consider the ominous nature of this development. The Mattel toy cars were reported by eager and enthusiastic consumers because they found a broken toy. The CPSC is calling for this kind of "help" so you can expect a LOT more of this in the future. To be precise, two broken toys were found in this case. No one was hurt. No allegation has been made public that any child was even possibly in danger. No disclosure was made about how the toys broke.
The CPSC apparently intervened to "investigate". These investigations often begin with a warning to the manufactuerer - you can participate in the CPSC's Fast Track Voluntary Recall program and avoid a formal investigation and possible penalty, or you can take your chances on what determination we will make months or years later. This kind "offer" is generally a short-lived one, possibly allowing only a few hours to decide. [This dirty secret is certainly true - ask around . . . or wait for the call.] The facts may be just like this one - a broken toy has been discovered (horrors), do you want to recall (today)? Mattel decided to recall in the case of the "Wheelies", based on two broken toys and perhaps on a conversation with the kind folks at the CPSC.
Do you get this one? If a consumer reports a single broken toy to the CPSC, the agency may investigate you and you may be forced to recall the item immediately. No injuries are required, just the POSSIBILITY of injury. Do you see ANY problems with that standard? Do you think the possibility of injury is the same as the certainty of injury??? Are your products indestructible? Is this a standard for recalls you are prepared to meet? And how do you plan to blunt this regulatory attack?
Having fun yet?
You heard it here first. The "broken toy" standard - that's the rule now. I'm not kidding.
For those of us idiots who persist in making children's products, these recalls are chilling, particularly in light of the decision on "Children's Products". The CPSC is busily engaged in shrinking our market through scare tactics and reactive regulation of the markets. They are also building barriers to entry that protect mass market companies and ensure the demise of small business. How many of you can withstand the cost, damage and disruption of a 11 million piece recall? None of you. This will cost Mattel ONE PENNY. Aw, poor Mattel. Who will be left to compete with them? Hasbro. And you? You're screwed. The CPSC doesn't even bother with lip service on this one anymore.
The new definition of what constitutes a " substantial product hazard" under the CPSA is now . . . everything. Anything that might possibly cause injuries is implicitly an "imminent threat" and must be recalled. There is no defense to the possibility of injury. Heaven forbid that there may have been injuries of any kind. Then you are dead. You'll find out your penalties in a few years but right now, the recalls must proceed. Doesn't matter what percentage of the items cause injury. Doesn't matter how many years it took to accumulate the injuries. Doesn't matter if the consumer was at fault or if there was dereliction of duty on the part of adults. The company is always at fault.
We are aiming for a Utopian society now, guys. Do you doubt this? Read this article carefully from the top a second time. The message is clear: Manufacturers, get out of Dodge, unless you are Mattel.
RECALL THE CPSC! This madness will kill us all. This is all about a mania and political leadership hired to foment this change in approach. There is little reason to believe these people will change - it's time to start over.
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