Continuing with my analysis of the pending draft of the CPSIA Amendment:
Section 3 Application of Third Party Testing Requirements: Merry Christmas, this provision ends mandatory phthalate and lead-in-substrate testing! Yes, Virginia, you read that right - there is a Santa Claus after all. Of course, as noted in my earlier blogpost, you are still subject to broad standards applying to many of your products. How will you know if you comply without some testing? You won't. Hmmm - a Catch-22! The limitations in the definition of Children's Products echo here. Removing mandatory testing is not the whole solution, unfortunately.
You still must test for lead-in-paint, small parts, children's metal jewelry and certain juvenile products.
The provision does not remove the CPSC from the process of certifying labs. This needless expansion of the role of our government in this market has never had a sufficient justification, in my view. Why are they in this business? What problem does it solve? Can ANYONE provide evidence that the market wasn't "working" before the CPSC arrived on the lab certification scene? This CPSIA provision is probably a historic consumer group wish-list item or perhaps a staffer's stray term that was never removed. The CPSIA was drafted in a fever of "our government failed us", so it's only natural that the law inserted the CPSC into every nook and cranny of the market. In this case, their conscription has not proven valuable, just another wasteful expense of the federal government that we all will pay for (again and again and again).
Ironically, the provision seems to create even more involvement in certification by the agency, if it chooses to require third party testing. Among other things, the agency must assess testing "capacity". That should prove "interesting".
This section provides some exemption for crafters, products focused on disabled persons (this phrasing only awkwardly covers certain "special needs" children) and one-of-a-kind items. The definition of the exemption incorporates the unfortunate term "not economically practicable" for testing to be excused. I can only imagine the serious of hearings and "stakeholder" meetings required to define what is and is not covered by this new term. This anticipatory compromise (perhaps as a concession to as-yet-encountered resistance in the Senate) likely spoils the workings of this well-intended provision.
A small quantity exemption modeled on Henry Waxman's formula has survived into this draft, unfortunately. The rule incorporates an arbitrary and otherwise meaningless volume rule to identify those companies too small to be required to test. I have never understood why Congress would want to let small companies flaunt safety rules because of their size. Is it okay to be poisoned by a little company but not by a big one? Isn't this law about SAFETY first and foremost? Perhaps we would do better to home in on REAL problems and leave everything else basically unregulated? After all, the substantial product hazard standard gives the agency a LOT of power to change course if they identify a new and REAL problem at a later time.
Under this amendment, the amoeba that is the CPSIA spread in yet another new direction. Today's new priority is apparently small parts. Why? Not explained. Has someone concluded that the former reliance on voluntary standards for small parts failed? On what basis? Does a lab putting products through a choke tube really save lives over relying on voluntary compliance (without specifying the use of outside labs)? Perhaps the best solution is to hold companies responsible for compliance with ASTM F963 without requiring testing (thus preserving the agency's ability to enforce), and holding the line on lead-in-paint testing? After all, L-I-P is easily tested and probably should always be subject to testing owing to the nature of the hazard. I don't know that small companies deserve an "out" on L-I-P because of the ease of controlling sources of paint and getting documentation on lead content. On the other hand, I don't understand why small parts needs this special mention.
Perhaps the sweetest term in this entire document is the new requirement that the agency perform a cost-benefit analysis on ANY mandated third party testing and further, that the testing imposes the least possible burden. This is a pure post-midterm election "smaller government" provision and something to be cherished. This requirement will be applied retroactively on any mandatory testing passed after August 14, 2009. Nice!!!
Finally, this provision makes the "15 Month Rule" voluntary by the CPSC, rather than Congressionally-mandated. Does this mean that it's dead? I can't say for sure. Let's hope so. Better yet, why not change this provision to get the CPSC out of the business of telling us how to be reasonable? Reasonableness is a term that courts have successfully interpreted for years without Congress' help. Why not let the courts decide what's reasonable if there is a dispute?
Section 4 Application of and Process for Updating Durable Nursery Products Standards: I skipped this as it relates to cribs. Not my area.
Section 5 Application of Section 106 to FDA-Regulated Products: Pulls in FDA rules into mandatory toy safety standards enforceable by the CPSC. Does not apply to me, not sure which is you this will impact.
Section 6 Application of Phthalates Standard: This provision limits the application of the phthalates ban to only certain parts of a "toy" (as defined).
First, the rule makes ALL phthalates rules PROSPECTIVE from the date of enactment. For those of you sitting on old inventory with the vain hope that someday it will saleable, this might be your lucky day!
The rule also gives the agency the power to exempt products from the phthalates ban if deemed "not necessary to protect children's health". This can be done only by rule under the amendment, so don't expect anything quick or cheap. This will be a long, drawn-out and arduous process - in other words, it is highly unlikely to occur.
As noted above, the term "necessary to protect children's health" conflicts with (or at least differs from) the substantial product hazard standard already in use. This is wrong and should be changed. Congress should use ONE standard for all matters relating to health under the CPSA, namely substantial product hazard, and it should resist the urge to introduce new standards throughout this document. That will only confuse things and make matters worse.
The provision adds a firm deadline for the end of the ban of the three phthalates the subject of the CHAP, if the agency does not act promptly after the CHAP is concluded. This provision seems to express distrust between Congress and the current administration of the CPSC. Will safety zealots hijack the CHAP process? This provision aims to prevent it. Hmmm.
Subsection (e) fiddles with the definition of "toy" to align it with the definition in the now mandatory ASTM F963 standard. Not sure how this will affect you (or me). The ASTM standard includes many different age ranges (by item) so some may even expand. Many will contract.
Finally, the revised definition excludes parts that can only be "licked". Frankly, based on my recollection of the CPSC's serious approach to this in the past, I anticipate that they will assume children have serpent tongues making almost everything "lickable". Sadly, Congress probably can't rely on the CPSC to take a simple definition and let companies administer it. This provision is an invitation to make "rules". I would suggest that the amendment be modified to specifically permit companies to exercise their reasonable business judgment on what is "lickable". I would point out that in the absence of victims that people besides Diane Feinstein can identify, the need to treat the possible presence of phthalates in these items as a public health crisis is unsupported. The CPSC, on the other hand, WILL treat it as a crisis since Congress banned the substances in toys. That makes it quite serious for the agency. To restore sanity, Congress will either need to give very specific instructions to the CPSC, or mandate the use of risk assessment to resolve this matter.
Personally, I am tired of all this, and hope Congress can find a way to put this to bed. I don't relish another three years of hearings, comment letters, begging and the like. Let My People Go - build some easy rules, let us exercise judgment and re-focus the agency on substantial product hazards.
The rule does NOT limit the application of the ban to ONLY plasticized parts, meaning that testing costs to assure compliance may remain in place for wood, metal, labels and other sundry items. Believe it or not, that's where we are now. [The CPSC seems stuck on phthalates right now - no final rules have been promulgated on this simple ban and no labs have been certified since August 2008.] It is a complete waste of money, particularly since only Diane Feinstein knows of victims of this purported hazard. The rule should be revised to limit toy industry legal exposure for what is best characterized as a ban based on conjecture and fear, not actual science or identifiable injury victims.
Section 7 Exemption Authority for Tracking Labels Requirement: This provision gives the agency the ability (by regulation) to exclude specific products or classes of products from the tracking label requirement if the Commission determines that it is not "economically practicable" to apply tracking labels. Even for those products thrown a lifeline, they may still have to provide the information through alternative means devised by the CPSC.
I believe cynically that our very existence, the very fact that we are still breathing today, can be used to rebut the argument that tracking labels are not "economically practicable". A better rule would be to let us decide for ourselves whether we want to use tracking labels. Companies can be relied upon to decide on an economically rational basis. If it's a good use of money, we'll do it. Otherwise, we won't.
In the case of our company, in fact, that's what we used to do. Some of our items had tracking labels, most did not. Our motivation had nothing to do with recalls. That's because our recall record was so good that tracking labels never made sense as a "defensive" move. The few tracking labels we added were to assist us on quality issues (generally relating to the production of electronic items). We used product identifiers to improve our supply chain and raise our quality levels. Why not let businesses exercise judgment and live with the consequences? Make good decisions, innovate in value-added ways and profit, OR make bad decisions, cut corners and lose. Simple. This provision should be revised accordingly.
I have also suggested in the past that mandatory tracking labels be restricted to long-life, heirloom-style products, mainly juvenile products like cribs. These items have a checkered past, and are used with the most vulnerable children (babies). There is reason to believe tracking labels will have some value in this arena, and in addition, since these items are generally big ticket items, the cost of the labels is not material. As for everything else, forget it.
Section 8 Requirements for Public Database: The very encouraging changes proposed in this section would provide basic safety net protections to innocent companies possibly subject to unmerited attack in the database. I have not taken the time to compare these provisions to the Nord/Northup draft rule on the database, but believe they are consistent or at least Nord/Northup provided inspiration for these changes. The changes reduce the scope of people who can file a report, and gives companies more authority to resist publication of material inaccuracies.
The time frames for circulation of data needs to lengthened considerably. The prospect of "doom" flaunted by consumer groups needs to be downplayed. While the drama of pending disaster makes grist for the newspaper mill, it is unrealistic and has driven the database process in an abusive direction unnecessarily. Giving more time for back and forth means that the agency will have fewer occasions to knowingly publish false information. In addition, there is always the possibility that working together on a more relaxed schedule will allow the CPSC and businesses to work together better.
My interaction with the agency has reduced my confidence in getting a fair hearing on material inaccuracy. We presented information rebutting definitively an accusation made by a consumer, and we were told that we had not demonstrated "material inaccuracy". That seemed to fly in the face of the facts but we could not rebut what the filer "thought". I do not see anything in the new language that would prevent the agency from publishing that original filing. If good faith were the metric, I would worry about it. But today's CPSC is highly-politicized so I am not prepared to say I believe they will interpret clear language "clearly" or behave in a "reasonable" manner. I call on Congress and the CPSC to jointly figure out how to solve this trust problem. Should there be a way to appeal the judgment of the CPSC? It would have to be simple and cheap - something administrative and independent - to give companies a way to protect themselves if they feel they're not getting a fair shake. It may be worth the effort to restore faith in the database.
The database is a very expensive trifle. I question whether we can afford it. Think about how much time and resources will be devoted by the CPSC to the database. Is this really the best way to spend our money on safety? A "nice to have", perhaps, but probably not a "must have".
Misidentified products and reports proven materially inaccurate will not be allowed to be published under this amendment. Thank heavens . . . .
Section 9-11: Technical amendments as far as I can tell.
Showing posts with label Tracking Labels. Show all posts
Showing posts with label Tracking Labels. Show all posts
Monday, April 4, 2011
Thursday, November 4, 2010
CPSIA - Dear President Obama
An Open Letter to President Obama:
Dear President Obama,
Tuesday's election results were a message to your administration. The "shellacking" you experienced was a referendum on your economic policies as well as a passionate call for smaller government.
Readers of my blog have heard all about these issues for two years. It is frustrating to me that you and your administration remain in the dark. You weren't listening.
My industry, children's products, suffered mightily at the hands of your administration. Admittedly the problem began on Mr. Bush's watch but it was your Democrats who refused to relent or admit their errors. Since passage of the Consumer Product Safety "Improvement" Act in 2008, your party has refused to consider our industry's increasingly pathetic pleas for mercy. The result has been utter market chaos and dramatic financial loss. This regulatory "railroad job" has driven many of us into politics against you and your party out of desperation and profound anger over this undeserved and insensitive treatment.
If you take the midterm election results seriously, you must reexamine the impact of this law on our industry and promptly offer sensible relief.
The problems with the CPSIA can be divided into four categories - Cost, Complexity, Risk and Intrusion. Please give up the idea that these problems can be overcome with tax relief or some sort of economic incentive. If you break my leg, I won't be able to get up and run like an Olympic champion no matter how many carrots you dangle in front of my nose. It's time to be accountable for the damage that the CPSIA wrought - and then directly address it.
Cost: The many ridiculous new rules in the CPSIA dramatically raise the cost of operating our businesses. It goes far beyond the asphyxiating testing costs that the CPSIA imposes. Wasteful administrative costs are skyrocketing in every direction. For instance, tracking labels do not magically appear on our products - we must hire people to redesign each of our products and our manufacturing processes, and we must hire yet more people to make sure we don't screw up these tasks. We sell or manufacture literally thousands of skus (items) - but have had only one tiny recall in the last 26 years. This is PURE UNADULTERATED WASTE. We nevertheless must incur these costs to keep the CPSC happy.
These well-documented costs come from somewhere. You may wonder why we're not hiring. [In fact, I have previously disclosed in this space that our head count continues to decline, an uninterrupted trend since 2007 to this very day.] Well, we must fund these unproductive costs from productive activities - sales, marketing, product development - you know, activities that produce new revenue. [Please note: your proposed tax increases will be paid from the same kitty.] Unlike you, we can't solve our money problems by printing more dollar bills - we have to EARN them. If you make us waste our money, we must shrink our business to pay these new costs. WE GIVE UP GROWTH TO PAY THESE WASTEFUL COSTS.
I find it exasperating to have to explain this to you.
Complexity: We now face perhaps 3,000 pages of new safety rules and laws applicable to our business. I have never included rules on childcare or infant items in this total. For those miserable companies who stubbornly persist in making this kind of item, their total is probably well in excess of 3,000 pages. Each word of those pages is a possible felony.
The pre-CPSIA total was about 100 pages of rules, most of which were inapplicable to our business. There was very little to remember - which made it easy for us to administer our business. We could teach the rules, we could remember the rules, we could follow the rules, we could set up sensible priorities oriented around safety (not merely compliance). This is no longer the case.
Face it, President Obama, NO ONE understands these new rules. I include the CPSC on that list. There are just too many rules, and they are riddled with inconsistencies, flaws and head scratchers. The rules are also a mess, existing in many forms, in many places, never correlated or conformed, and are certainly not indexed. The rules have no underlying logic, so it is not possible to anticipate how any rule should work or does work - you have to find the rule and study it, preferably with an expensive lawyer helping you. Even finding a particular rule is quite a treasure hunt.
We are pretty busy - this does not enhance our productivity.
I believe that unless one is a rabbinic scholar or some kind of savant, it is not possible to master 3,000 pages of dense and inconsistent rules. The CPSC has done little to make sense of these rules.
Consider the paradox of musical instruments - full-sized musical instruments are not considered "Children's Products" even if marketed EXCLUSIVELY to children. Does that make ANY sense to you? Remember, these are SAFETY rules so if musical instruments are unsafe for some reason, wouldn't logic suggest that we should not let children interact with them? And if they're safe, then they shouldn't be regulated at all. Right? Interestingly, the CPSC says that if you shrink the same instruments down for children, they WOULD BE considered "Children's Products" and subject to the CPSIA, even if marketed side-by-side with slightly larger, full-sized instruments which are not regulated. This makes absolutely no sense, is completely indefensible as public policy and creates a terrible quandary for any business attempting to interpret and apply these rules.
The complexity and opacity of the rules outstrips EVERYBODY'S abilities. We are completely stymied - and it's your fault. You and your team refused our advice on how to resolve these issues.
Risk: The CPSIA is a tort lawyers' dream. With the coming public database, our industry will be a feeding trough for these vipers. To say the least, you have permitted the government to set up a system DESIGNED to be gamed by lawyers and litigants.
How do you think business people will react to this massive expansion of the tort system? Please note that NO ONE contends that there are more injuries to address - it is absolutely clear that the effect of the CPSIA is to create many more claims of action. More cost, more risk - and as a result, there WILL be less economic activity.
Good job, guys!
Add to this misery the current practice of this CPSC to press for recalls that do not meet the CPSA's legal standards for recalls (substantial risk of injury or death) and to impose huge vindictive penalties. The agency is on the war path, trying with all its might to scare us to death. This is an especially powerful economic depressant for small businesses which typically lack the resources to resist these pressures. Small businesses are more conservative and tolerate risk less comfortably as they manage their own money and see themselves as having more to lose than mass market companies or public companies.
The aggression of the new CPSC is out of control. The current Chairman likes to BRAG about her big penalties. Trust has been utterly destroyed in the manufacturing community. In two short years, the CPSC squandered its reputation as a partner in safety, someone to be trusted. Who in their right mind would trust this CPSC? If you doubt me, ask McDonald's how they feel about being pressured to recall 12 million acknowledged safe Shrek glasses (and the ensuing media frenzy over cadmium - all without ANY documented injuries from cadmium in children's products EVER). Or ask Schylling Associates or Daiso how they feel about penalties imposed on them for rule violations without any injuries. By all appearances, those penalties reflected regulatory anger, not endangered public safety.
[While you're at it, ask the CSPC why they never completed their FOIA disclosure to me on the Schylling penalty.]
Seemingly, almost any violation of these rules can be twisted into a felony charge now. We joke in our office about visiting each other in jail - but it's not really funny at all. I simply cannot fathom conducting my affairs in a way that risks being charged with a felony. As a lawyer, the criminal risk imposed by the CPSIA is completely unacceptable to me and highly offensive. I often say that felonies cannot be committed accidentally - except in the Children's Product industry. The unavoidable accumulation of trivial infractions with heavy penalty risk gives the CPSC winning leverage in any negotiation. The game is FIXED. Everyone knows it, too.
This is no stimulus plan, by the way.
Intrusion: It's this simple - we have a new partner who showed up two years ago - the U.S. government. They don't know anything about our business and have never run any operation similar to ours but they now reserve the right to check all our work and to second-guess us. Mother May I? That's the new game in our business.
Could we live without ANY of this? Yes, most definitely. While the zealots behind this self-destructive law like to emphasize the POSSIBILITY of injury from lead and love to repeat the simple-minded chestnut that there is "no safe level of lead", they FAIL utterly to tie these claims of POSSIBLE injury to data of ACTUAL injury. There is no "nexus". Lead may be "bad" but it has no history of causing injury in children's products. Leaded gasoline, house paint and industrial pollution are the culprits that caused blood lead levels to rise materially - that's undeniably true. Congress missed the boat entirely with the CPSIA - it's all cost, no benefit.
Lead injuries from children's products are virtually unknown. My study of CPSC recalls in 1999-2010 totals one death (from a piece of jewelry) and three unverified injuries from lead in 11 years. Given the truly massive size of our industry and the children's marketplace, and the literally trillions of interactions with our industry's products each year, this injury total is statistically equivalent to ZERO. Instead of punishing our industry, you should give us a good citizenship award. We have earned the trust of U.S. consumers.
The path forward is clear but frankly, I Still don't think you get it. Trust has been broken. Until you and your administration DEMONSTRATE that you are taking a DIFFERENT path, we will continue to conduct a war against the CPSC and Congress. This defective law deserves a FULL repeal. It is misconceived and has cost countless jobs. I hope you and your associates will not continue to deny the obvious, to fly in the face of data and reason. The voters are on to this scam. They voted many Democrats out of work in midterm elections. If you and your team don't wise up quickly, in the over-regulation of our industry and other industries, they'll vote the rest of you out in two years.
The problem was never the law. Before Congress "improved" it, the CPSA was a powerful law that enabled the CPSC to closely supervise children's markets. Let's not forget that the recalls in 2007/8 were conducted under PRIOR law - the unamended CPSA had plenty of teeth. The recalls in 2007/8 were clearly a COMPLIANCE problem, not a problem with the rules themselves. For various reasons, some people weren't following the law closely enough. As objectionable as that may be, it is also important to remember that the 2007/8 recalls were associated with virtually NO injuries. So what should we have done, in lieu of all the tough new standards and venal penalty provisions in the CPSIA?
The agency should have been reorganized to work on compliance more effectively. The agency needed to invest in education, outreach to industry and more effective partnership with industry. This idea that we in the business community can't be trusted is revolting and completely untrue - it is a populist idea you and your allies flogged to get elected. If you want to keep your jobs for much longer, you need to drop this caustic idea. We are not bad people or incompetent people - we can be trusted and can be good partners (as our record proves). No, not everyone will be good or conscientious. Bad people and incompetent organizations cannot be legislated away (at a reasonable cost). Still, the data indicates that a lower cost approach of partnership and education will produce very good results.
Fixing this law will be a stimulus plan that creates JOBS. Please give us back control of our financial statements and we will find a good way to spend our own money to grow our businesses. We don't need your help - we need you to GET OUT OF THE WAY.
Yours sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
Vernon Hills, Illinois
Dear President Obama,
Tuesday's election results were a message to your administration. The "shellacking" you experienced was a referendum on your economic policies as well as a passionate call for smaller government.
Readers of my blog have heard all about these issues for two years. It is frustrating to me that you and your administration remain in the dark. You weren't listening.
My industry, children's products, suffered mightily at the hands of your administration. Admittedly the problem began on Mr. Bush's watch but it was your Democrats who refused to relent or admit their errors. Since passage of the Consumer Product Safety "Improvement" Act in 2008, your party has refused to consider our industry's increasingly pathetic pleas for mercy. The result has been utter market chaos and dramatic financial loss. This regulatory "railroad job" has driven many of us into politics against you and your party out of desperation and profound anger over this undeserved and insensitive treatment.
If you take the midterm election results seriously, you must reexamine the impact of this law on our industry and promptly offer sensible relief.
The problems with the CPSIA can be divided into four categories - Cost, Complexity, Risk and Intrusion. Please give up the idea that these problems can be overcome with tax relief or some sort of economic incentive. If you break my leg, I won't be able to get up and run like an Olympic champion no matter how many carrots you dangle in front of my nose. It's time to be accountable for the damage that the CPSIA wrought - and then directly address it.
Cost: The many ridiculous new rules in the CPSIA dramatically raise the cost of operating our businesses. It goes far beyond the asphyxiating testing costs that the CPSIA imposes. Wasteful administrative costs are skyrocketing in every direction. For instance, tracking labels do not magically appear on our products - we must hire people to redesign each of our products and our manufacturing processes, and we must hire yet more people to make sure we don't screw up these tasks. We sell or manufacture literally thousands of skus (items) - but have had only one tiny recall in the last 26 years. This is PURE UNADULTERATED WASTE. We nevertheless must incur these costs to keep the CPSC happy.
These well-documented costs come from somewhere. You may wonder why we're not hiring. [In fact, I have previously disclosed in this space that our head count continues to decline, an uninterrupted trend since 2007 to this very day.] Well, we must fund these unproductive costs from productive activities - sales, marketing, product development - you know, activities that produce new revenue. [Please note: your proposed tax increases will be paid from the same kitty.] Unlike you, we can't solve our money problems by printing more dollar bills - we have to EARN them. If you make us waste our money, we must shrink our business to pay these new costs. WE GIVE UP GROWTH TO PAY THESE WASTEFUL COSTS.
I find it exasperating to have to explain this to you.
Complexity: We now face perhaps 3,000 pages of new safety rules and laws applicable to our business. I have never included rules on childcare or infant items in this total. For those miserable companies who stubbornly persist in making this kind of item, their total is probably well in excess of 3,000 pages. Each word of those pages is a possible felony.
The pre-CPSIA total was about 100 pages of rules, most of which were inapplicable to our business. There was very little to remember - which made it easy for us to administer our business. We could teach the rules, we could remember the rules, we could follow the rules, we could set up sensible priorities oriented around safety (not merely compliance). This is no longer the case.
Face it, President Obama, NO ONE understands these new rules. I include the CPSC on that list. There are just too many rules, and they are riddled with inconsistencies, flaws and head scratchers. The rules are also a mess, existing in many forms, in many places, never correlated or conformed, and are certainly not indexed. The rules have no underlying logic, so it is not possible to anticipate how any rule should work or does work - you have to find the rule and study it, preferably with an expensive lawyer helping you. Even finding a particular rule is quite a treasure hunt.
We are pretty busy - this does not enhance our productivity.
I believe that unless one is a rabbinic scholar or some kind of savant, it is not possible to master 3,000 pages of dense and inconsistent rules. The CPSC has done little to make sense of these rules.
Consider the paradox of musical instruments - full-sized musical instruments are not considered "Children's Products" even if marketed EXCLUSIVELY to children. Does that make ANY sense to you? Remember, these are SAFETY rules so if musical instruments are unsafe for some reason, wouldn't logic suggest that we should not let children interact with them? And if they're safe, then they shouldn't be regulated at all. Right? Interestingly, the CPSC says that if you shrink the same instruments down for children, they WOULD BE considered "Children's Products" and subject to the CPSIA, even if marketed side-by-side with slightly larger, full-sized instruments which are not regulated. This makes absolutely no sense, is completely indefensible as public policy and creates a terrible quandary for any business attempting to interpret and apply these rules.
The complexity and opacity of the rules outstrips EVERYBODY'S abilities. We are completely stymied - and it's your fault. You and your team refused our advice on how to resolve these issues.
Risk: The CPSIA is a tort lawyers' dream. With the coming public database, our industry will be a feeding trough for these vipers. To say the least, you have permitted the government to set up a system DESIGNED to be gamed by lawyers and litigants.
How do you think business people will react to this massive expansion of the tort system? Please note that NO ONE contends that there are more injuries to address - it is absolutely clear that the effect of the CPSIA is to create many more claims of action. More cost, more risk - and as a result, there WILL be less economic activity.
Good job, guys!
Add to this misery the current practice of this CPSC to press for recalls that do not meet the CPSA's legal standards for recalls (substantial risk of injury or death) and to impose huge vindictive penalties. The agency is on the war path, trying with all its might to scare us to death. This is an especially powerful economic depressant for small businesses which typically lack the resources to resist these pressures. Small businesses are more conservative and tolerate risk less comfortably as they manage their own money and see themselves as having more to lose than mass market companies or public companies.
The aggression of the new CPSC is out of control. The current Chairman likes to BRAG about her big penalties. Trust has been utterly destroyed in the manufacturing community. In two short years, the CPSC squandered its reputation as a partner in safety, someone to be trusted. Who in their right mind would trust this CPSC? If you doubt me, ask McDonald's how they feel about being pressured to recall 12 million acknowledged safe Shrek glasses (and the ensuing media frenzy over cadmium - all without ANY documented injuries from cadmium in children's products EVER). Or ask Schylling Associates or Daiso how they feel about penalties imposed on them for rule violations without any injuries. By all appearances, those penalties reflected regulatory anger, not endangered public safety.
[While you're at it, ask the CSPC why they never completed their FOIA disclosure to me on the Schylling penalty.]
Seemingly, almost any violation of these rules can be twisted into a felony charge now. We joke in our office about visiting each other in jail - but it's not really funny at all. I simply cannot fathom conducting my affairs in a way that risks being charged with a felony. As a lawyer, the criminal risk imposed by the CPSIA is completely unacceptable to me and highly offensive. I often say that felonies cannot be committed accidentally - except in the Children's Product industry. The unavoidable accumulation of trivial infractions with heavy penalty risk gives the CPSC winning leverage in any negotiation. The game is FIXED. Everyone knows it, too.
This is no stimulus plan, by the way.
Intrusion: It's this simple - we have a new partner who showed up two years ago - the U.S. government. They don't know anything about our business and have never run any operation similar to ours but they now reserve the right to check all our work and to second-guess us. Mother May I? That's the new game in our business.
Could we live without ANY of this? Yes, most definitely. While the zealots behind this self-destructive law like to emphasize the POSSIBILITY of injury from lead and love to repeat the simple-minded chestnut that there is "no safe level of lead", they FAIL utterly to tie these claims of POSSIBLE injury to data of ACTUAL injury. There is no "nexus". Lead may be "bad" but it has no history of causing injury in children's products. Leaded gasoline, house paint and industrial pollution are the culprits that caused blood lead levels to rise materially - that's undeniably true. Congress missed the boat entirely with the CPSIA - it's all cost, no benefit.
Lead injuries from children's products are virtually unknown. My study of CPSC recalls in 1999-2010 totals one death (from a piece of jewelry) and three unverified injuries from lead in 11 years. Given the truly massive size of our industry and the children's marketplace, and the literally trillions of interactions with our industry's products each year, this injury total is statistically equivalent to ZERO. Instead of punishing our industry, you should give us a good citizenship award. We have earned the trust of U.S. consumers.
The path forward is clear but frankly, I Still don't think you get it. Trust has been broken. Until you and your administration DEMONSTRATE that you are taking a DIFFERENT path, we will continue to conduct a war against the CPSC and Congress. This defective law deserves a FULL repeal. It is misconceived and has cost countless jobs. I hope you and your associates will not continue to deny the obvious, to fly in the face of data and reason. The voters are on to this scam. They voted many Democrats out of work in midterm elections. If you and your team don't wise up quickly, in the over-regulation of our industry and other industries, they'll vote the rest of you out in two years.
The problem was never the law. Before Congress "improved" it, the CPSA was a powerful law that enabled the CPSC to closely supervise children's markets. Let's not forget that the recalls in 2007/8 were conducted under PRIOR law - the unamended CPSA had plenty of teeth. The recalls in 2007/8 were clearly a COMPLIANCE problem, not a problem with the rules themselves. For various reasons, some people weren't following the law closely enough. As objectionable as that may be, it is also important to remember that the 2007/8 recalls were associated with virtually NO injuries. So what should we have done, in lieu of all the tough new standards and venal penalty provisions in the CPSIA?
The agency should have been reorganized to work on compliance more effectively. The agency needed to invest in education, outreach to industry and more effective partnership with industry. This idea that we in the business community can't be trusted is revolting and completely untrue - it is a populist idea you and your allies flogged to get elected. If you want to keep your jobs for much longer, you need to drop this caustic idea. We are not bad people or incompetent people - we can be trusted and can be good partners (as our record proves). No, not everyone will be good or conscientious. Bad people and incompetent organizations cannot be legislated away (at a reasonable cost). Still, the data indicates that a lower cost approach of partnership and education will produce very good results.
Fixing this law will be a stimulus plan that creates JOBS. Please give us back control of our financial statements and we will find a good way to spend our own money to grow our businesses. We don't need your help - we need you to GET OUT OF THE WAY.
Yours sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
Vernon Hills, Illinois
Monday, June 21, 2010
CPSIA - Comment Letter on "Children's Product" Definition
I apologize, the letter's long. . . .
June 20, 2010
Todd A. Stevenson
Director, Office of the Secretary
Room 502
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814
Agency: Consumer Product Safety Commission (CPSC)
Re: Docket No. CPSC–2010-0029 Interpretation of “Children’s Product”
Dear Mr. Stevenson:
I am hereby submitting comments in response to the Solicitation of Comments on the Interpretation of “Children’s Product” (Docket No. CPSC–2010–0029) published in the Federal Register on April 20, 2010 (the “Rule”).
In her statement supporting the proposed interpretive rule defining a “Children’s Product” dated March 31, 2010, CPSC Chairman Inez Tenenbaum noted that the issuance of the Rule is not required by the Consumer Product Safety Improvement Act (CPSIA) but was being issued by the CPSC in response to the demonstrated need of stakeholders. I am such a stakeholder. Our company is in the educational materials and educational toy business and is regulated by the CPSIA. Ms. Tenenbaum notes that the regulated community wants predictability and certainty in the rules that govern the marketplace. She notes that the Commission “listens to, hears, and greatly values the input of the regulated community and all stakeholders”.
Ms. Tenenbaum’s statement informs my comments on the Rule. I believe the Rule does not achieve the objectives set out in her statement and must therefore be amended significantly.
Having read other comment letters on the definition of “Children’s Product”, I feel that the legal and technical details of the proposed interpretative rule will be adequately addressed by other stakeholders without my further input. I believe that this interpretative rule extends the reach of the CPSIA to many new products not covered or intended to be covered by the law, and furthermore, changes the “Children’s Product” test from one defined by “primarily” to something more mathematical (as in a 51/49 test). However, I will rely on the other letters to make the case on these points.
In this letter, I will focus on the impact of the Rule on the marketplace. In particular, I will focus on whether the Rule is consistent with the mission of the agency, is fundamentally sound as policy, meets Ms. Tenenbaum’s objective of clarity, certainty and predictability. I conclude that the Rule needs sharp revision.
The Definition of “Children’s Product” is Inconsistent with the Mission of the Agency: I think it is important to think about the Rule in the context of the goals of the agency as set forth in its enabling legislation, the Consumer Product Safety Act (CPSA). Notably, Section 2(b) of the CPSA states:
“(b) The purposes of this Act are – (1) to protect the public against unreasonable risks of injury associated with consumer products; (2) to assist consumers in evaluating the comparative safety of consumer products; (3) to develop uniform safety standards for consumer products and to minimize conflicting State and local regulations; and (4) to promote research and investigation into the causes and prevention of product-related deaths, illnesses, and injuries.”
The definition of “Children’s Product” has been incorporated into this legislative scheme designed to “protect the public against unreasonable risks of injury associated with consumer products”. Of course, “Children’s Products” is now a defined term in the CPSA and interpretation of that term, broadly or narrowly, will affect the scope of the law. Under the terms of the CPSIA, the definition of “Children’s Product” draws products into the coverage of the CPSIA, most notably in the regulation of lead-in-substrate and triggers the imposition of many other significant obligations (such as tracking labels). Nothing in the CPSIA overrides the purposes of the CPSC as set forth in the CPSA. Thus, the definition of “Children’s Product” must be evaluated in light of the agency’s mission to protect against unreasonable risk of injury.
How risky are children’s products for their lead content? The data in the CPSC’s historical recall database best describes the risk, in my opinion. These recalls reflect the evolving view of the agency on the threat posed by lead in its various manifestations in children’s products, and reflects the dangers posed by lead via the reported injuries. I analyzed the recalls posted on the CPSC website over the past 11 years and this data indicates that, over a period of approximately 11 years (from March 5, 1999 to April 15, 2010), the CPSC issued a total of 899 recalls of children’s products for all hazards (including lead and lead-in-paint). In this period, 247 recalls were associated with lead and resulted in one death, the well-known death of a four-year-old in Minnesota who swallowed a jewelry charm. [The data can be found at http://bit.ly/aOK4iS] These 247 recalls were also associated with three reported but unverified injuries from lead. Thus – over 11 years - the reported injuries from lead are four – one death and three unverified injuries.
Contrast this with the injuries associated with swimming pools and spas, a well-known source of childhood injuries. According to the CPSC’s press release dated May 24, pool and spa-related drowning deaths have averaged 385 per year for children under 15 (including 299 per year for children under five years of age) and serious injuries requiring emergency room treatments have averaged 4,200 per year. Consider this data in light of lead: lead produced one death and three unverified injuries in 11 years while pools and spas produced more than one death and 11.5 serious injuries PER DAY in recent years. Pools and spas produce more deaths and far more injuries on the average day than lead produced in the last 11 years IN TOTAL according to the CPSC’s own statistics.
The CPSC’s 2010 response to the daily deaths and maimings of children in pools and spas was a short public relations blitz. The CPSIA has imposed annual expenses in the billions of dollars on the children’s product industry to reduce deaths and injuries from lead.
If massive numbers of pool deaths and injuries merit only a public awareness campaign by the CPSC, the definition of “Children’s Products” should be downsized appropriately to reflect the relative nature of the “threat” posed by lead. The agency’s recall data on lead injuries has never been challenged by any advocate. Evidence that lead-in-substrate meets the “unreasonable risk of injury” standard set forth in Section 2(b) of the CPSA has never been disclosed. It is well-known that the CDC and the EPA link evidence of lead poisoning to only two environmental causes – leaded house paint (the primary cause) and the residual effects of pollution from leaded gasoline (generally found in dirt near inner city housing) and from industrial pollution.
The health impact of lead-in-substrate in ATVs, bikes, pens, clothing, apparel, even toys, is entirely absent from the literature as is any empirical evidence that these items could even theoretically cause lead poisoning. The advocates against lead cite studies that lead can be dangerous in small amounts and highlight the assertion that lead harms “silently”. In other words, advocates claim that because harm can befall children from lead undetected, it follows, ergo, that this kind of harm might also caused by children’s products containing trace amounts of lead. This notion is best summed up by the slogan “there is no safe level for lead”. Yet lead poisoning has never been positively identified from ANY children’s product beyond the one death and three unverified lead-in-paint injuries reported in the CPSC’s recall data over the past 11 years.
This absence of data of detectable lead-in-substrate poisoning means that the definition of “Children’s Product” in the Rule must be narrow. The mission of the agency under the CPSA does not permit it to divert resources for anything less than an “unreasonable risk of injury”. The Rule specifies a definition that is too broad for the documented minimal risk of injury from lead-in-substrate.
The Definition of “Children’s Product” Knowingly Permits Children to Remain in Danger: The Rule permits children to remain in “danger” of lead poisoning through its technical interpretation of the CPSIA. If lead-in-substrate is a public health issue suitable for the agency’s attention, this is unacceptable. The CPSC must adopt a clear rule that logically draws the line between regulated and unregulated commerce.
Let me explain:
The Rule attempts to distinguish items of “general use” and items that are primarily intended for children. The Rule notes that items of general use are not included in the definition of “Children’s Product”. An item of general use may in fact be used by children but because it is intended for a general audience, it is outside regulation by the CPSIA. This is an interpretation of the CPSIA under the Rule. The contrast in the treatment of items of general use and Children’s Products under the Rule is quite dramatic: obligations for safety testing, tracking labels, reporting, whistleblower risk, liability risk are all lifted for general use items. Children’s Products suffer the full brunt of the extensive new safety rules, presumably because of an asserted higher “risk” of injury to children.
An irony of the Rule is its acceptance of not regulating “items of general use” even if they are known to be widely or even universally used by children. The illogical and worrisome disparity in treatment of these items is best illustrated by pens. According to the Rule, pens are typically items of general use and are therefore (as a general rule) NOT regulated by the CPSIA. This result is quite helpful to the agency, as the pen industry has purportedly informed the CPSC that ball points must be made with brass, and brass has minimal lead content as a basic ingredient. No one argues that brass ball points have ever exposed anyone to injury from lead poisoning, not do “human factor” experts contend that contact with ball points are likely to present a risk of lead poisoning. Thus, the inclusion of pens in the broad reach of the CPSIA has been called an “unintended consequence”. So the “right” answer for all concerned is that pens shouldn’t be included in the CPSIA. The CPSC has consistently held that pens are outside the definition of “Children’s Products”.
Notably, it is well-known that close to 100% of school-age children routinely use ball point pens. Children carry pens in their backpacks and use them every day in school. Pens are a particularly ironic choice for this rulemaking example because pens are known to be routinely mouthed (chewed) by all ages of consumers including adults. However, use of pens by kids is deemed “unregulated” under the CPSIA and the Rule because pens have been held to be items of general use. Strangely, pens are in fact subject to regulation under the CPSIA if “decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value”. The Rule holds that if the embellishments are “likely” to attract a child’s interaction with a pen, then it would be considered a “Children’s Product”. So the operation of the Rule is that a pen is subject to regulation if it has an embellishment but not subject o regulation if it omits the embellishment. The CPSC does not indicate that the embellishment itself is a public health or safety concern nor argues that the presence of the embellishment will raise the likelihood of use of a pen by children. The CPSC concedes that children are widely using pens now.
This flaw in the Rule will subject the CPSC and its rules to ridicule. There is no justification for the agency’s safety regulations applying only to some pens, not based on evidence of risk but because of a hyper-technical interpretation of the definition of “Children’s Product” under the CPSIA. The Rule simply makes no sense as public health policy. If the presence of lead in ball points is an actual health risk (which it is not), then there is no excuse to omit any pens from supervisory regulation. If the presence of lead in ball points is NOT an actual risk to health, then there is no excuse to regulate ANY pens under this law. Writing an interpretative rule that can’t seem to make up its mind is, frankly, worse than no rule at all.
The Definition of “Children’s Product” Does Little to Add Clarity for Regulated Companies: The convoluted definition of “Children’s Product” set forth in the Rule fails to bring clarity to the broad reach and operation of the CPSIA. Regulated companies will never be able to consistently apply the Rule in the real world, and worse still, will never be able to find peace (agreement) with their retailers (dealers) on the application of the Rule. Chaos is certain to ensue. This problem is again best illustrated by pens. Pens are items of general use and thus deemed to be unregulated under the CPSIA. The Rule notes an important exception, however: “when a general use, such as a pen, is decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value, the general ruse product may be converted or transformed into a children’s product due to these additional features of characteristics.” [Emphasis added]
The Rule goes on to note that there is an exception to the exception: “However, there also are ‘novelty’ pens that could appeal to children 12 years of age or younger as well as older children and adults; such novelty pens would not be considered to be primarily intended for children. For example, a simple ball point stick pen bearing an elementary school’s name, without any other decorations, would likely appeal to anyone (i.e., students, teachers, parents) connected with the school. A pen with a silly head on the top, not associated with any particular mass media (and not sold in toy stores) may have just as much appeal to adults as it would to children. Pens with puzzle features that allow the user to take them apart and reconfigure the design also are likely to appeal to children and adults alike, and thus, are not likely to be considered children’s products because they are not primarily intended for children.” [Emphasis added]
The fact that children were already “interacting” with pens in the absence of the “childish” embellishments seems to be irrelevant under the Rule, raising the issue of how to tell when a product’s use by children is deserving of safety testing or the application of tracking labels. These are “big dollar” questions for the regulated community. If an embellishment is “appealing” to children, then if children “interact” with the pen based on foreseeable use and misuse of the product, it is apparently considered a children’s product . . . unless the embellishment has “just as much appeal” to adults or children, in which case it is a product of general use. And if the pen is unadorned but used by every child due to a marketing scheme directly aimed at the kids market, no testing or labeling is required (see discussion of musical instruments below).
It seems so obvious . . . .
The clear holding of this “policy” is that stick pens used by every child every day in every classroom do NOT require testing. Were you to remove those ordinary pens from the classroom and apply a “childish” embellishment with inks or paint supplied by the CPSC (stipulated to be entirely lead-free) and then return them to the children, the pens would now need to be tested and labeled. This, of course, makes absolutely no sense, and gives the necessary impression that the CPSC is more concerned with technical compliance issues (test reports without meaning or significance) than with notions of safety. How are regulated companies supposed to follow such incomprehensible or nonsensical rules? There is no answer to this question. Retailers (dealers) take a different tack when confronted by nonsensical rules – they crawl into a shell and invent their own “safety rules” designed to create a cushion between their practices and whatever 20-20 hindsight analyses could be used by regulators. This creates a Wild West of safety rules and practices for manufacturers: chaotic, unpredictable, penal and extremely expensive.
The Rule seems to delight in this convoluted reasoning. Consider the Rule’s stance on the marketing of musical instruments to schools: “Products with a marketing strategy that targets schools, such as instrument rentals, would not convert such products into children’s products if such products are intended for general use, regardless of how the instruments are leased, rented or sold. These instruments are intended by the manufacturer for use primarily by adults, although there also may be incidental use by children through such programs.” Incidental use? In many schools, the “incidental use” induced by these targeted programs is nearly 100% of the kids. It is difficult to take the CPSC seriously about its “passion” for eliminating lead in all manifestations when it enacts a rule that openly permits unregulated use of brass musical instruments by school kids while banning brass in toy wheel assemblies or requiring testing for certain pens because of the brass content in their ball points. This policy is best described as “two-faced”.
Let’s not forget that this Rule is hardly restricted to pens. Paper clips are known to be in wide use throughout society and also by children in the regulated age ranges. As products of “general use”, paper clips are specifically cited in the Rule as exempt from testing and the other requirements of the CPSIA. That makes sense – despite the uncontested fact that paper clips are routinely chewed on by adults AND children. I assume that the lead content in paper clips would have an equal (or greater) ability to erase IQ points as lead in children’s products that also might be mouthed – but let’s not worry about that now. The Rule sensibly draws the line at paper clips for the foregoing reasons, and whatever “hazard” chewing or sucking on paper clips may present has been overlooked as a public health risk. Unfortunately for our education business, it’s not that simple: “Manufacturers may also include a general use item as one of several items packaged together, such as a paper clip included in a magnet set primarily intended for children ages 7 through 10 years old. The paper clip may be a general use item but when included as part of the magnet set, it would need to be tested to the applicable children’s product safety rules since the product is targeted primarily to children 12 years of age or younger.”
What is achieved by this rule? High expense, much confusion, many arguments with retailers and sharply-reduced respect for the CPSC’s rules.
Please note that the Rule leaves all elements of these subjective judgments open to doubt. Consider pens again – because the Rule encourages us to reason from the pen example. The CPSC took no definite position on anything applying to pens other than that an undecorated stick pen is outside the CPSIA. Anything with an “embellishment” presumably will be the subject of endless debate in the regulated community under the Rule. If you guess wrong on the application of the Rule, the law provides (and CPSC practice now reinforces) tremendous liability risk. Let’s not forget that we in regulated community know about the $2.05 million penalty assessed against Daiso for five recalls of less than 700 units in total. Liability risk under the CPSIA seems virtually unlimited nowadays. Subjective interpretative rules applied with 20-20 hindsight by regulators would likely expose manufacturer to the highest risk at the worst possible time, namely when there’s a real problem. How can manufacturers defend themselves? The wishy-washy design of the Rule provides nothing for a manufacturer to rely upon.
The Rule makes same similar confusing distinction on DVDs and CDs and seems to imply that many promotional products will be subject to doubt under this Rule. Almost anything useful that has a so-called “childish” embellishment might be regulated now, possibly without the manufacturer even knowing! The Rule states that manufacturers “should expect” that adults will give their embellished or “childish” products to children even if made specifically for adults (the example cited is a stuffed animal sold with a candle). The fact that some businesses target adults with such items (intent!), or the fact that the Rule contemplates that adults are often drawn to the same items as children, seems to be forgotten here. At a minimum, the Rule seems entirely subjective. This not being confusing enough, the Rule notes that if the items that children are drawn to happen to be considered “collectibles”, then perhaps they won’t be considered children’s products. Or maybe they will.
To put a bow on the confusion, the Rule concludes that classic games like checkers or Chinese checkers (among other common games) are NOT children’s products. I simply cannot imagine a toy company DARING to leave these classic games untested yet the CPSC has now officially ruled that certain classic games are exempt from the CPSIA. However, if the manufacturer is foolish enough to promote these games with images “or other features . . . that make [the games] more attractive to or suitable for children than a general use product would normally be”, well then they are magically transformed into children’s products.
I literally do not know how to apply a rule so full of convoluted logic and word games. Likewise, I cannot envision smoothly functioning markets governed by a rule like this.
Notably, the weight placed on advertising portrayals with children will only intensify arguments between manufacturers and their customers about what is and what is not a children’s product. For instance, we sell magnifiers and tape measures that are identical to those sold at Home Depot. By any definition (and as acknowledged in the Rule), these items are items of general use. We happen to photograph them with children for our catalog and website to illustrate the products’ utility in educational settings. How are we supposed to determine definitively that these items are not children’s products under the law, much less get our customers to agree with us? To date, no customer has agreed with this conclusion. NOT ONE.
The Rule posits a bizarrely unrealistic deliberative process in which each photograph is “weighed” against each other to determine its “true nature”, as though that were possible: “The prominence, conspicuousness, and/or other emphasis given to each portrayal of a product’s use or intended users on packaging or in advertising media can be weighted differently according to which images or messages are the strongest and most obvious to the consumer at the point of purchase.” This language makes me want to scream. To avoid business risks under this rule, businesses may have to produce catalogs and websites that look like this: http://bit.ly/d4vtZo.
The Rule confounds by assigning responsibility to the manufacturer for its retailers’ independent choices on where they place items in their stores or in their various catalogs, web pages and ads. Of course, each retailer will make this choice differently, possibly store-by-store, catalog-by-catalog, ad-by-ad, web page-by-web page, region-by-region, country-by-country and so on. In reality, this standard is even vaguer than that, as the judgment is whether the images “could imply [the product’s] suitability for a certain age group”. [Emphasis added] In any event, we manufacturers have neither control over, nor knowledge of, these choices by third parties.
All this makes me wonder why the Rule doesn’t simply state that the CPSC will decide after the fact what is and is not a “Children’s Product” based on its subjective personal opinion at the time? That rule formulation would at least be honest and clear.
I believe the agency has given scant thought to the reality of living with this rule. How does the CPSC envision that a manufacturer and a retailer would resolve a dispute over whether a product is subject to regulation? Think about people who sell pens. What is the likelihood that there ever be agreement that a particular embellished pen is outside this law? I fear the effect of this vague, quirky and completely indeterminate rule will be that everyone associated with children’s products will throw up their hands and assume that everything is subject to the full brunt of the CPSIA. If that’s the intent, I wish the CPSC would just come out and say it.
What Should the CPSC Do? The answer to this question is clear in light of two factors: (a) in the Chairman’s statement, she indicated a strong interest in bringing certainty to this rule and further notes the importance of certainty to the marketplace, and (b) the extremely low incidence of injury and death reported from lead in the last 11 years. As noted in great detail above, there is nothing “certain” about the Rule as presently written. It includes far too many phrases like “may”, “could”, “in general”, “weighting”, “factors” and so on. The Rule as written is the antithesis of clarity and certainty.
The CPSC has as its mission “to protect the public against unreasonable risks of injury associated with consumer products”. With so few injuries and one death from lead over the course of 11 years, the perils of lead have not been demonstrated to rise to the level of an “unreasonable risk of injury”, particularly when viewed in light of the known impact of so many other dangers regulated by the CPSC (such as small parts or pool injuries).
For a rule to bring “certainty” to the market, there must be a way to make a definitive judgment, one that can be relied upon. Subjective judgments and weighing of factors may make sense for a court but has little value to regulated companies in an active marketplace. Who gets to decide which judgment is “right”? Under the present Rule, no one does.
The way to resolve this dilemma is to learn from the statistically significant history of low injuries from lead, and make a concession in favor of certainty. The right rule for the definition of “Children’s Product” is to state that the “reasonable judgment” of the manufacturer on what is and what is not a “Children’s Product” under the CPSIA will be RESPECTED by the CPSC. I believe the term “reasonable judgment” is understood in the marketplace, and is also a well-defined term in the common law. It has been clarified in countless cases, providing clear guidance to all concerned (regulators, regulated companies and consumers). The CPSC should further indicate that it will NOT review the judgments made by manufacturers in the absence of fraud, a recall situation or other serious violations of law or CSPC regulations. Retailers should be entitled to rely on the reasonable determinations of manufacturers by RULE.
My concept is that the reasonable business judgment of manufacturers will appropriately shape the range of products regulated under the CPSIA. In actual fact, the reasonable judgment of manufacturers on determinations of “Children’s Products” is tightly confined by the CPSIA, so little risk to the “will of Congress” can be anticipated. In addition, given the long track record of so few documented injuries from lead (going back for many years before the CPSIA’s enactment), there is little reason to believe this practical rule will expose children to more injuries. In any event, this will allow the agency to focus its energies on greater threats. The agency also has plenty of legislative authority to draft other rules to address lead concerns if the need arises.
A rule drafted in the vague, quirky, subjective, indefinite and convoluted manner of the Rule achieves little other than amplifying the frustration and confusion of the regulated community. Having filed numerous comments letters over the last two years, testified before Congress and the CPSC on several occasions, had personal meetings with CPSC staff, written blog posts, attended rallies, and so on, I can attest to the deep frustrations associated with implementation of the CPSIA. After all this time and effort, we manufacturers are still “in the soup”. With this Rule, the CPSC begins the final stage of the implementation of the law, and potentially, places the capstone on our ruin. This Rule, plus the so-called “15 Month Rule”, taken as a whole, has the potential to put many companies out of business. I do not know how we survive both of these rules in their present form. It’s time for the CPSC to take a reality check. If the Chairman is serious about bringing certainty to the market and to regulate without putting companies out of business, it’s time to make some concessions and let the good companies who produce children’s products run their businesses and accountably produce safe products using reasonable judgment. This strategy will work. Policies like the Rule will not.
Thank you for considering my views on this important topic.
Sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061
June 20, 2010
Todd A. Stevenson
Director, Office of the Secretary
Room 502
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814
Agency: Consumer Product Safety Commission (CPSC)
Re: Docket No. CPSC–2010-0029 Interpretation of “Children’s Product”
Dear Mr. Stevenson:
I am hereby submitting comments in response to the Solicitation of Comments on the Interpretation of “Children’s Product” (Docket No. CPSC–2010–0029) published in the Federal Register on April 20, 2010 (the “Rule”).
In her statement supporting the proposed interpretive rule defining a “Children’s Product” dated March 31, 2010, CPSC Chairman Inez Tenenbaum noted that the issuance of the Rule is not required by the Consumer Product Safety Improvement Act (CPSIA) but was being issued by the CPSC in response to the demonstrated need of stakeholders. I am such a stakeholder. Our company is in the educational materials and educational toy business and is regulated by the CPSIA. Ms. Tenenbaum notes that the regulated community wants predictability and certainty in the rules that govern the marketplace. She notes that the Commission “listens to, hears, and greatly values the input of the regulated community and all stakeholders”.
Ms. Tenenbaum’s statement informs my comments on the Rule. I believe the Rule does not achieve the objectives set out in her statement and must therefore be amended significantly.
Having read other comment letters on the definition of “Children’s Product”, I feel that the legal and technical details of the proposed interpretative rule will be adequately addressed by other stakeholders without my further input. I believe that this interpretative rule extends the reach of the CPSIA to many new products not covered or intended to be covered by the law, and furthermore, changes the “Children’s Product” test from one defined by “primarily” to something more mathematical (as in a 51/49 test). However, I will rely on the other letters to make the case on these points.
In this letter, I will focus on the impact of the Rule on the marketplace. In particular, I will focus on whether the Rule is consistent with the mission of the agency, is fundamentally sound as policy, meets Ms. Tenenbaum’s objective of clarity, certainty and predictability. I conclude that the Rule needs sharp revision.
The Definition of “Children’s Product” is Inconsistent with the Mission of the Agency: I think it is important to think about the Rule in the context of the goals of the agency as set forth in its enabling legislation, the Consumer Product Safety Act (CPSA). Notably, Section 2(b) of the CPSA states:
“(b) The purposes of this Act are – (1) to protect the public against unreasonable risks of injury associated with consumer products; (2) to assist consumers in evaluating the comparative safety of consumer products; (3) to develop uniform safety standards for consumer products and to minimize conflicting State and local regulations; and (4) to promote research and investigation into the causes and prevention of product-related deaths, illnesses, and injuries.”
The definition of “Children’s Product” has been incorporated into this legislative scheme designed to “protect the public against unreasonable risks of injury associated with consumer products”. Of course, “Children’s Products” is now a defined term in the CPSA and interpretation of that term, broadly or narrowly, will affect the scope of the law. Under the terms of the CPSIA, the definition of “Children’s Product” draws products into the coverage of the CPSIA, most notably in the regulation of lead-in-substrate and triggers the imposition of many other significant obligations (such as tracking labels). Nothing in the CPSIA overrides the purposes of the CPSC as set forth in the CPSA. Thus, the definition of “Children’s Product” must be evaluated in light of the agency’s mission to protect against unreasonable risk of injury.
How risky are children’s products for their lead content? The data in the CPSC’s historical recall database best describes the risk, in my opinion. These recalls reflect the evolving view of the agency on the threat posed by lead in its various manifestations in children’s products, and reflects the dangers posed by lead via the reported injuries. I analyzed the recalls posted on the CPSC website over the past 11 years and this data indicates that, over a period of approximately 11 years (from March 5, 1999 to April 15, 2010), the CPSC issued a total of 899 recalls of children’s products for all hazards (including lead and lead-in-paint). In this period, 247 recalls were associated with lead and resulted in one death, the well-known death of a four-year-old in Minnesota who swallowed a jewelry charm. [The data can be found at http://bit.ly/aOK4iS] These 247 recalls were also associated with three reported but unverified injuries from lead. Thus – over 11 years - the reported injuries from lead are four – one death and three unverified injuries.
Contrast this with the injuries associated with swimming pools and spas, a well-known source of childhood injuries. According to the CPSC’s press release dated May 24, pool and spa-related drowning deaths have averaged 385 per year for children under 15 (including 299 per year for children under five years of age) and serious injuries requiring emergency room treatments have averaged 4,200 per year. Consider this data in light of lead: lead produced one death and three unverified injuries in 11 years while pools and spas produced more than one death and 11.5 serious injuries PER DAY in recent years. Pools and spas produce more deaths and far more injuries on the average day than lead produced in the last 11 years IN TOTAL according to the CPSC’s own statistics.
The CPSC’s 2010 response to the daily deaths and maimings of children in pools and spas was a short public relations blitz. The CPSIA has imposed annual expenses in the billions of dollars on the children’s product industry to reduce deaths and injuries from lead.
If massive numbers of pool deaths and injuries merit only a public awareness campaign by the CPSC, the definition of “Children’s Products” should be downsized appropriately to reflect the relative nature of the “threat” posed by lead. The agency’s recall data on lead injuries has never been challenged by any advocate. Evidence that lead-in-substrate meets the “unreasonable risk of injury” standard set forth in Section 2(b) of the CPSA has never been disclosed. It is well-known that the CDC and the EPA link evidence of lead poisoning to only two environmental causes – leaded house paint (the primary cause) and the residual effects of pollution from leaded gasoline (generally found in dirt near inner city housing) and from industrial pollution.
The health impact of lead-in-substrate in ATVs, bikes, pens, clothing, apparel, even toys, is entirely absent from the literature as is any empirical evidence that these items could even theoretically cause lead poisoning. The advocates against lead cite studies that lead can be dangerous in small amounts and highlight the assertion that lead harms “silently”. In other words, advocates claim that because harm can befall children from lead undetected, it follows, ergo, that this kind of harm might also caused by children’s products containing trace amounts of lead. This notion is best summed up by the slogan “there is no safe level for lead”. Yet lead poisoning has never been positively identified from ANY children’s product beyond the one death and three unverified lead-in-paint injuries reported in the CPSC’s recall data over the past 11 years.
This absence of data of detectable lead-in-substrate poisoning means that the definition of “Children’s Product” in the Rule must be narrow. The mission of the agency under the CPSA does not permit it to divert resources for anything less than an “unreasonable risk of injury”. The Rule specifies a definition that is too broad for the documented minimal risk of injury from lead-in-substrate.
The Definition of “Children’s Product” Knowingly Permits Children to Remain in Danger: The Rule permits children to remain in “danger” of lead poisoning through its technical interpretation of the CPSIA. If lead-in-substrate is a public health issue suitable for the agency’s attention, this is unacceptable. The CPSC must adopt a clear rule that logically draws the line between regulated and unregulated commerce.
Let me explain:
The Rule attempts to distinguish items of “general use” and items that are primarily intended for children. The Rule notes that items of general use are not included in the definition of “Children’s Product”. An item of general use may in fact be used by children but because it is intended for a general audience, it is outside regulation by the CPSIA. This is an interpretation of the CPSIA under the Rule. The contrast in the treatment of items of general use and Children’s Products under the Rule is quite dramatic: obligations for safety testing, tracking labels, reporting, whistleblower risk, liability risk are all lifted for general use items. Children’s Products suffer the full brunt of the extensive new safety rules, presumably because of an asserted higher “risk” of injury to children.
An irony of the Rule is its acceptance of not regulating “items of general use” even if they are known to be widely or even universally used by children. The illogical and worrisome disparity in treatment of these items is best illustrated by pens. According to the Rule, pens are typically items of general use and are therefore (as a general rule) NOT regulated by the CPSIA. This result is quite helpful to the agency, as the pen industry has purportedly informed the CPSC that ball points must be made with brass, and brass has minimal lead content as a basic ingredient. No one argues that brass ball points have ever exposed anyone to injury from lead poisoning, not do “human factor” experts contend that contact with ball points are likely to present a risk of lead poisoning. Thus, the inclusion of pens in the broad reach of the CPSIA has been called an “unintended consequence”. So the “right” answer for all concerned is that pens shouldn’t be included in the CPSIA. The CPSC has consistently held that pens are outside the definition of “Children’s Products”.
Notably, it is well-known that close to 100% of school-age children routinely use ball point pens. Children carry pens in their backpacks and use them every day in school. Pens are a particularly ironic choice for this rulemaking example because pens are known to be routinely mouthed (chewed) by all ages of consumers including adults. However, use of pens by kids is deemed “unregulated” under the CPSIA and the Rule because pens have been held to be items of general use. Strangely, pens are in fact subject to regulation under the CPSIA if “decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value”. The Rule holds that if the embellishments are “likely” to attract a child’s interaction with a pen, then it would be considered a “Children’s Product”. So the operation of the Rule is that a pen is subject to regulation if it has an embellishment but not subject o regulation if it omits the embellishment. The CPSC does not indicate that the embellishment itself is a public health or safety concern nor argues that the presence of the embellishment will raise the likelihood of use of a pen by children. The CPSC concedes that children are widely using pens now.
This flaw in the Rule will subject the CPSC and its rules to ridicule. There is no justification for the agency’s safety regulations applying only to some pens, not based on evidence of risk but because of a hyper-technical interpretation of the definition of “Children’s Product” under the CPSIA. The Rule simply makes no sense as public health policy. If the presence of lead in ball points is an actual health risk (which it is not), then there is no excuse to omit any pens from supervisory regulation. If the presence of lead in ball points is NOT an actual risk to health, then there is no excuse to regulate ANY pens under this law. Writing an interpretative rule that can’t seem to make up its mind is, frankly, worse than no rule at all.
The Definition of “Children’s Product” Does Little to Add Clarity for Regulated Companies: The convoluted definition of “Children’s Product” set forth in the Rule fails to bring clarity to the broad reach and operation of the CPSIA. Regulated companies will never be able to consistently apply the Rule in the real world, and worse still, will never be able to find peace (agreement) with their retailers (dealers) on the application of the Rule. Chaos is certain to ensue. This problem is again best illustrated by pens. Pens are items of general use and thus deemed to be unregulated under the CPSIA. The Rule notes an important exception, however: “when a general use, such as a pen, is decorated or embellished by adding certain features that may appeal to children, such as childish themes or play value, the general ruse product may be converted or transformed into a children’s product due to these additional features of characteristics.” [Emphasis added]
The Rule goes on to note that there is an exception to the exception: “However, there also are ‘novelty’ pens that could appeal to children 12 years of age or younger as well as older children and adults; such novelty pens would not be considered to be primarily intended for children. For example, a simple ball point stick pen bearing an elementary school’s name, without any other decorations, would likely appeal to anyone (i.e., students, teachers, parents) connected with the school. A pen with a silly head on the top, not associated with any particular mass media (and not sold in toy stores) may have just as much appeal to adults as it would to children. Pens with puzzle features that allow the user to take them apart and reconfigure the design also are likely to appeal to children and adults alike, and thus, are not likely to be considered children’s products because they are not primarily intended for children.” [Emphasis added]
The fact that children were already “interacting” with pens in the absence of the “childish” embellishments seems to be irrelevant under the Rule, raising the issue of how to tell when a product’s use by children is deserving of safety testing or the application of tracking labels. These are “big dollar” questions for the regulated community. If an embellishment is “appealing” to children, then if children “interact” with the pen based on foreseeable use and misuse of the product, it is apparently considered a children’s product . . . unless the embellishment has “just as much appeal” to adults or children, in which case it is a product of general use. And if the pen is unadorned but used by every child due to a marketing scheme directly aimed at the kids market, no testing or labeling is required (see discussion of musical instruments below).
It seems so obvious . . . .
The clear holding of this “policy” is that stick pens used by every child every day in every classroom do NOT require testing. Were you to remove those ordinary pens from the classroom and apply a “childish” embellishment with inks or paint supplied by the CPSC (stipulated to be entirely lead-free) and then return them to the children, the pens would now need to be tested and labeled. This, of course, makes absolutely no sense, and gives the necessary impression that the CPSC is more concerned with technical compliance issues (test reports without meaning or significance) than with notions of safety. How are regulated companies supposed to follow such incomprehensible or nonsensical rules? There is no answer to this question. Retailers (dealers) take a different tack when confronted by nonsensical rules – they crawl into a shell and invent their own “safety rules” designed to create a cushion between their practices and whatever 20-20 hindsight analyses could be used by regulators. This creates a Wild West of safety rules and practices for manufacturers: chaotic, unpredictable, penal and extremely expensive.
The Rule seems to delight in this convoluted reasoning. Consider the Rule’s stance on the marketing of musical instruments to schools: “Products with a marketing strategy that targets schools, such as instrument rentals, would not convert such products into children’s products if such products are intended for general use, regardless of how the instruments are leased, rented or sold. These instruments are intended by the manufacturer for use primarily by adults, although there also may be incidental use by children through such programs.” Incidental use? In many schools, the “incidental use” induced by these targeted programs is nearly 100% of the kids. It is difficult to take the CPSC seriously about its “passion” for eliminating lead in all manifestations when it enacts a rule that openly permits unregulated use of brass musical instruments by school kids while banning brass in toy wheel assemblies or requiring testing for certain pens because of the brass content in their ball points. This policy is best described as “two-faced”.
Let’s not forget that this Rule is hardly restricted to pens. Paper clips are known to be in wide use throughout society and also by children in the regulated age ranges. As products of “general use”, paper clips are specifically cited in the Rule as exempt from testing and the other requirements of the CPSIA. That makes sense – despite the uncontested fact that paper clips are routinely chewed on by adults AND children. I assume that the lead content in paper clips would have an equal (or greater) ability to erase IQ points as lead in children’s products that also might be mouthed – but let’s not worry about that now. The Rule sensibly draws the line at paper clips for the foregoing reasons, and whatever “hazard” chewing or sucking on paper clips may present has been overlooked as a public health risk. Unfortunately for our education business, it’s not that simple: “Manufacturers may also include a general use item as one of several items packaged together, such as a paper clip included in a magnet set primarily intended for children ages 7 through 10 years old. The paper clip may be a general use item but when included as part of the magnet set, it would need to be tested to the applicable children’s product safety rules since the product is targeted primarily to children 12 years of age or younger.”
What is achieved by this rule? High expense, much confusion, many arguments with retailers and sharply-reduced respect for the CPSC’s rules.
Please note that the Rule leaves all elements of these subjective judgments open to doubt. Consider pens again – because the Rule encourages us to reason from the pen example. The CPSC took no definite position on anything applying to pens other than that an undecorated stick pen is outside the CPSIA. Anything with an “embellishment” presumably will be the subject of endless debate in the regulated community under the Rule. If you guess wrong on the application of the Rule, the law provides (and CPSC practice now reinforces) tremendous liability risk. Let’s not forget that we in regulated community know about the $2.05 million penalty assessed against Daiso for five recalls of less than 700 units in total. Liability risk under the CPSIA seems virtually unlimited nowadays. Subjective interpretative rules applied with 20-20 hindsight by regulators would likely expose manufacturer to the highest risk at the worst possible time, namely when there’s a real problem. How can manufacturers defend themselves? The wishy-washy design of the Rule provides nothing for a manufacturer to rely upon.
The Rule makes same similar confusing distinction on DVDs and CDs and seems to imply that many promotional products will be subject to doubt under this Rule. Almost anything useful that has a so-called “childish” embellishment might be regulated now, possibly without the manufacturer even knowing! The Rule states that manufacturers “should expect” that adults will give their embellished or “childish” products to children even if made specifically for adults (the example cited is a stuffed animal sold with a candle). The fact that some businesses target adults with such items (intent!), or the fact that the Rule contemplates that adults are often drawn to the same items as children, seems to be forgotten here. At a minimum, the Rule seems entirely subjective. This not being confusing enough, the Rule notes that if the items that children are drawn to happen to be considered “collectibles”, then perhaps they won’t be considered children’s products. Or maybe they will.
To put a bow on the confusion, the Rule concludes that classic games like checkers or Chinese checkers (among other common games) are NOT children’s products. I simply cannot imagine a toy company DARING to leave these classic games untested yet the CPSC has now officially ruled that certain classic games are exempt from the CPSIA. However, if the manufacturer is foolish enough to promote these games with images “or other features . . . that make [the games] more attractive to or suitable for children than a general use product would normally be”, well then they are magically transformed into children’s products.
I literally do not know how to apply a rule so full of convoluted logic and word games. Likewise, I cannot envision smoothly functioning markets governed by a rule like this.
Notably, the weight placed on advertising portrayals with children will only intensify arguments between manufacturers and their customers about what is and what is not a children’s product. For instance, we sell magnifiers and tape measures that are identical to those sold at Home Depot. By any definition (and as acknowledged in the Rule), these items are items of general use. We happen to photograph them with children for our catalog and website to illustrate the products’ utility in educational settings. How are we supposed to determine definitively that these items are not children’s products under the law, much less get our customers to agree with us? To date, no customer has agreed with this conclusion. NOT ONE.
The Rule posits a bizarrely unrealistic deliberative process in which each photograph is “weighed” against each other to determine its “true nature”, as though that were possible: “The prominence, conspicuousness, and/or other emphasis given to each portrayal of a product’s use or intended users on packaging or in advertising media can be weighted differently according to which images or messages are the strongest and most obvious to the consumer at the point of purchase.” This language makes me want to scream. To avoid business risks under this rule, businesses may have to produce catalogs and websites that look like this: http://bit.ly/d4vtZo.
The Rule confounds by assigning responsibility to the manufacturer for its retailers’ independent choices on where they place items in their stores or in their various catalogs, web pages and ads. Of course, each retailer will make this choice differently, possibly store-by-store, catalog-by-catalog, ad-by-ad, web page-by-web page, region-by-region, country-by-country and so on. In reality, this standard is even vaguer than that, as the judgment is whether the images “could imply [the product’s] suitability for a certain age group”. [Emphasis added] In any event, we manufacturers have neither control over, nor knowledge of, these choices by third parties.
All this makes me wonder why the Rule doesn’t simply state that the CPSC will decide after the fact what is and is not a “Children’s Product” based on its subjective personal opinion at the time? That rule formulation would at least be honest and clear.
I believe the agency has given scant thought to the reality of living with this rule. How does the CPSC envision that a manufacturer and a retailer would resolve a dispute over whether a product is subject to regulation? Think about people who sell pens. What is the likelihood that there ever be agreement that a particular embellished pen is outside this law? I fear the effect of this vague, quirky and completely indeterminate rule will be that everyone associated with children’s products will throw up their hands and assume that everything is subject to the full brunt of the CPSIA. If that’s the intent, I wish the CPSC would just come out and say it.
What Should the CPSC Do? The answer to this question is clear in light of two factors: (a) in the Chairman’s statement, she indicated a strong interest in bringing certainty to this rule and further notes the importance of certainty to the marketplace, and (b) the extremely low incidence of injury and death reported from lead in the last 11 years. As noted in great detail above, there is nothing “certain” about the Rule as presently written. It includes far too many phrases like “may”, “could”, “in general”, “weighting”, “factors” and so on. The Rule as written is the antithesis of clarity and certainty.
The CPSC has as its mission “to protect the public against unreasonable risks of injury associated with consumer products”. With so few injuries and one death from lead over the course of 11 years, the perils of lead have not been demonstrated to rise to the level of an “unreasonable risk of injury”, particularly when viewed in light of the known impact of so many other dangers regulated by the CPSC (such as small parts or pool injuries).
For a rule to bring “certainty” to the market, there must be a way to make a definitive judgment, one that can be relied upon. Subjective judgments and weighing of factors may make sense for a court but has little value to regulated companies in an active marketplace. Who gets to decide which judgment is “right”? Under the present Rule, no one does.
The way to resolve this dilemma is to learn from the statistically significant history of low injuries from lead, and make a concession in favor of certainty. The right rule for the definition of “Children’s Product” is to state that the “reasonable judgment” of the manufacturer on what is and what is not a “Children’s Product” under the CPSIA will be RESPECTED by the CPSC. I believe the term “reasonable judgment” is understood in the marketplace, and is also a well-defined term in the common law. It has been clarified in countless cases, providing clear guidance to all concerned (regulators, regulated companies and consumers). The CPSC should further indicate that it will NOT review the judgments made by manufacturers in the absence of fraud, a recall situation or other serious violations of law or CSPC regulations. Retailers should be entitled to rely on the reasonable determinations of manufacturers by RULE.
My concept is that the reasonable business judgment of manufacturers will appropriately shape the range of products regulated under the CPSIA. In actual fact, the reasonable judgment of manufacturers on determinations of “Children’s Products” is tightly confined by the CPSIA, so little risk to the “will of Congress” can be anticipated. In addition, given the long track record of so few documented injuries from lead (going back for many years before the CPSIA’s enactment), there is little reason to believe this practical rule will expose children to more injuries. In any event, this will allow the agency to focus its energies on greater threats. The agency also has plenty of legislative authority to draft other rules to address lead concerns if the need arises.
A rule drafted in the vague, quirky, subjective, indefinite and convoluted manner of the Rule achieves little other than amplifying the frustration and confusion of the regulated community. Having filed numerous comments letters over the last two years, testified before Congress and the CPSC on several occasions, had personal meetings with CPSC staff, written blog posts, attended rallies, and so on, I can attest to the deep frustrations associated with implementation of the CPSIA. After all this time and effort, we manufacturers are still “in the soup”. With this Rule, the CPSC begins the final stage of the implementation of the law, and potentially, places the capstone on our ruin. This Rule, plus the so-called “15 Month Rule”, taken as a whole, has the potential to put many companies out of business. I do not know how we survive both of these rules in their present form. It’s time for the CPSC to take a reality check. If the Chairman is serious about bringing certainty to the market and to regulate without putting companies out of business, it’s time to make some concessions and let the good companies who produce children’s products run their businesses and accountably produce safe products using reasonable judgment. This strategy will work. Policies like the Rule will not.
Thank you for considering my views on this important topic.
Sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061
Wednesday, May 12, 2010
CPSIA - HTA Letter Questions Imperfect Waxman Amendment (CPSEA)
[Emphasis added. Actual Letter can be viewed here.]
May 12, 2010
To:
The Honorable Bobby Rush
Chairman, Subcommittee on Commerce, Trade and Consumer Protection
The Honorable Ed Whitfield
Ranking Member, Subcommittee on Commerce, Trade and Consumer Protection
The Honorable Henry Waxman
Chairman, Committee on Energy & Commerce
The Honorable Joe Barton
Ranking Member, Committee on Energy & Commerce
Re: The Consumer Product Safety Enhancement Act (CPSEA)
To the Leadership of the House Commerce Committee:
Thank you again for the opportunity to testify before your committee and for your continued attention to the needs of our small businesses. We would like to reiterate our position on the CPSEA and the relief we are seeking for our members.
We have previously endorsed the CPSEA because it is the only opportunity currently available to save small batch manufacturers from extinction after February 10, 2011, when the CPSC's stay of enforcement of third party testing requirements expires. Under the CPSIA as it currently stands, many of our members are substantially limiting the products that they offer--some foregoing children’s products altogether--while others are laying off employees or limiting their business growth.
We have stated clearly that the CPSEA can and should be improved to reduce unnecessary regulatory burdens on small businesses without compromising safety. The CPSEA as currently written will likely save some of our member businesses. With improvements, however, you can save almost all of them. For the record, we would like to review the improvements we would like you to consider.
First and foremost, we would like the CPSEA to clearly state that small batch manufacturers are exempt from third party testing requirements. While report language to that affect would be helpful, a more explicit exemption within the language of the bill itself would provide more immediate and substantial relief. You can accomplish this by allowing:
* the use of XRF testing as an alternative testing method for lead in paint and lead in substrate
* alternative testing methods for products intended for use in classrooms or for children ages 7-12
* EN-71 testing as an alternative testing method
* CPSC rulemaking to allow for alternative testing methods based on risk analysis
* exemptions for small batch toymakers from ASTM F-963 testing
This language should be in the bill itself, not just in the report language. In the intervening days since our initial endorsement of the CPSEA, we have heard conflicting answers from several different CPSC commissioners as to the commission's willingness or ability to provide affordable alternative testing methods for small batch manufacturers. If this bill is truly meant to benefit small batch manufacturers, it must be more clear and explicit in the exemptions it provides.
Second, we wish to reiterate our belief that alternative testing methods should be available to all companies. The Small Business Administration defines toy and clothing manufacturers with less than 500 employees as small businesses, which is far in excess of the CPSEA's $1 million limit. If a revenue limit is used, it should be based only on income generated by the manufacture or importation of children's products without including other unrelated business income. A manufacturer's ability to pay for testing any given product is a function of the revenue it generates from that particular product, not the overall size of the company.
Third, we stated publicly during the April 29 hearing that the functional purpose exemption for products exceeding 300ppm/100ppm lead will not benefit our members because of the narrow scope of the exemption and the cost required to obtain it. The CPSC should instead be given authority to make exemptions to specific materials or product categories based on risk analysis. For example, the commission should have the power to exempt brass as a material and children's saddles or microscopes as a product category. This is the only way in which small businesses would be able to take advantage of the functional purpose exemption.
Fourth, we believe that small batch manufacturers should be entirely exempted from mandatory labeling requirements.
Finally, we hope to settle any confusion regarding our intent in endorsing the CPSEA. We endorsed it as our only available alternative. We truly believe that many of our members will be forced out of business after February 10, 2011 without meaningful, clear reform provided by your committee. We believe that the CPSEA can and should be improved to better target risk and provide more comprehensive relief for our members, who were never the source of unsafe products in the first place.
We remain hopeful that the democratic process can prevail and that a meaningful and bipartisan reform of the CPSIA can be enacted. We urge members of the committee to mark up the CPSEA and allow open discussion within the product safety subcommittee. The CPSIA was a bipartisan bill—its reform should be, too.
You hold the livelihoods of hundreds of small businesses in your hands. Please, make this work.
On behalf of the 435 small business members of the Handmade Toy Alliance, we thank you again for your attention to this important issue.
Respectfully,
The Handmade Toy Alliance
savehandmadetoys@gmail.com
http://www.handmadetoyalliance.org/
Board members:
Cecilia Leibovitz, Craftsbury Kids, VT
Dan Marshall, Peapods Natural Toys, MN
Jill Chuckas, Crafty Baby, CT
Mary Newell, Terrapin Toys, OR
Jolie Fay, Skipping Hippos, OR
Marianne Mullen, Polkadotpatch, VT
Rob Wilson, Challenge & Fun, MA
Randy Hertzler, euroSource, PA
Kate Glynn, A Child's Garden, MA
May 12, 2010
To:
The Honorable Bobby Rush
Chairman, Subcommittee on Commerce, Trade and Consumer Protection
The Honorable Ed Whitfield
Ranking Member, Subcommittee on Commerce, Trade and Consumer Protection
The Honorable Henry Waxman
Chairman, Committee on Energy & Commerce
The Honorable Joe Barton
Ranking Member, Committee on Energy & Commerce
Re: The Consumer Product Safety Enhancement Act (CPSEA)
To the Leadership of the House Commerce Committee:
Thank you again for the opportunity to testify before your committee and for your continued attention to the needs of our small businesses. We would like to reiterate our position on the CPSEA and the relief we are seeking for our members.
We have previously endorsed the CPSEA because it is the only opportunity currently available to save small batch manufacturers from extinction after February 10, 2011, when the CPSC's stay of enforcement of third party testing requirements expires. Under the CPSIA as it currently stands, many of our members are substantially limiting the products that they offer--some foregoing children’s products altogether--while others are laying off employees or limiting their business growth.
We have stated clearly that the CPSEA can and should be improved to reduce unnecessary regulatory burdens on small businesses without compromising safety. The CPSEA as currently written will likely save some of our member businesses. With improvements, however, you can save almost all of them. For the record, we would like to review the improvements we would like you to consider.
First and foremost, we would like the CPSEA to clearly state that small batch manufacturers are exempt from third party testing requirements. While report language to that affect would be helpful, a more explicit exemption within the language of the bill itself would provide more immediate and substantial relief. You can accomplish this by allowing:
* the use of XRF testing as an alternative testing method for lead in paint and lead in substrate
* alternative testing methods for products intended for use in classrooms or for children ages 7-12
* EN-71 testing as an alternative testing method
* CPSC rulemaking to allow for alternative testing methods based on risk analysis
* exemptions for small batch toymakers from ASTM F-963 testing
This language should be in the bill itself, not just in the report language. In the intervening days since our initial endorsement of the CPSEA, we have heard conflicting answers from several different CPSC commissioners as to the commission's willingness or ability to provide affordable alternative testing methods for small batch manufacturers. If this bill is truly meant to benefit small batch manufacturers, it must be more clear and explicit in the exemptions it provides.
Second, we wish to reiterate our belief that alternative testing methods should be available to all companies. The Small Business Administration defines toy and clothing manufacturers with less than 500 employees as small businesses, which is far in excess of the CPSEA's $1 million limit. If a revenue limit is used, it should be based only on income generated by the manufacture or importation of children's products without including other unrelated business income. A manufacturer's ability to pay for testing any given product is a function of the revenue it generates from that particular product, not the overall size of the company.
Third, we stated publicly during the April 29 hearing that the functional purpose exemption for products exceeding 300ppm/100ppm lead will not benefit our members because of the narrow scope of the exemption and the cost required to obtain it. The CPSC should instead be given authority to make exemptions to specific materials or product categories based on risk analysis. For example, the commission should have the power to exempt brass as a material and children's saddles or microscopes as a product category. This is the only way in which small businesses would be able to take advantage of the functional purpose exemption.
Fourth, we believe that small batch manufacturers should be entirely exempted from mandatory labeling requirements.
Finally, we hope to settle any confusion regarding our intent in endorsing the CPSEA. We endorsed it as our only available alternative. We truly believe that many of our members will be forced out of business after February 10, 2011 without meaningful, clear reform provided by your committee. We believe that the CPSEA can and should be improved to better target risk and provide more comprehensive relief for our members, who were never the source of unsafe products in the first place.
We remain hopeful that the democratic process can prevail and that a meaningful and bipartisan reform of the CPSIA can be enacted. We urge members of the committee to mark up the CPSEA and allow open discussion within the product safety subcommittee. The CPSIA was a bipartisan bill—its reform should be, too.
You hold the livelihoods of hundreds of small businesses in your hands. Please, make this work.
On behalf of the 435 small business members of the Handmade Toy Alliance, we thank you again for your attention to this important issue.
Respectfully,
The Handmade Toy Alliance
savehandmadetoys@gmail.com
http://www.handmadetoyalliance.org/
Board members:
Cecilia Leibovitz, Craftsbury Kids, VT
Dan Marshall, Peapods Natural Toys, MN
Jill Chuckas, Crafty Baby, CT
Mary Newell, Terrapin Toys, OR
Jolie Fay, Skipping Hippos, OR
Marianne Mullen, Polkadotpatch, VT
Rob Wilson, Challenge & Fun, MA
Randy Hertzler, euroSource, PA
Kate Glynn, A Child's Garden, MA
Thursday, April 15, 2010
CPSIA - A Quick and Incomplete Analysis of New Draft Waxman Amendment 2.0
With only a few hours to look over the new draft of the Waxman Amendment 2.0 before tomorrow's meeting, I guess the idea is that we are supposed to drop what we are doing to complete an analysis fire drill. Power trip for the Waxman staffers? Possibly. Still, what choice do we have? I thought I would outline my preliminary comments to contribute to the debate.
It goes without saying that this is entirely my own work without the benefit of discussing it with others similarly situated and without the opportunity to compare notes. It is therefore likely that I have missed something important or made other mistakes. Sorry . . . . This post is also painfully long. Again, given that Mr. Waxman hardly cares about your problems or mine, I have little choice but to post this as one essay. Again, sorry . . . .
a. Modifications to Section 101(b)(2) Exemption Process:
- The idiotic post-exemption warnings provision has been deleted.
- The three-pronged exemption test remains in place, as does the ambiguous and troubling term "practicable". "Practicable" is a sneaky Waxman approach to providing an escape hatch for big industries with narrow product definitions like ATVs and books. You're not supposed to know this. Our laws aren't for the little people anymore.
- The third prong of the exemption test has been clarified from no effect on "public health or safety" to no effect on "the user’s health or safety, taking into account normal and foreseeable use and abuse by all foreseeable users." This change seems like new belts and suspenders to make it easy to deny an exemption. The Dem zealots want to be sure no one gets an exemption but ATVs and books, wink-wink-nudge-nudge.
- Poor applicants for exemptions are still obliged to wait hungrily by the door of the CPSC for the leavings of rich supplicants. Yes, small business owners who want exemptions like the big guys but can't afford to pay the big bucks can reuse the big guys' consultant's reports provided the evidence is considered non-proprietary. [Whatever that might be.] Nice . . . if someone else has already paid for it and submitted it in an exemption process, and if you have access to it (and have found it), you can use it. Noblesse oblige, I guess. Thank You, Kind Sir. I speak for all the little people . . . . Oddly, this concept reappears in a confusing provision called "Previously Denied Petitions" that only refers to previously denied petitions in its title (I don't get it).
- In another "how closely are you watching me?" change, the grounds for decision provision now permits the Commission to consider "only" evidence presented by "interested parties", rather than the evidence presented by the party seeking such exceptions. So if you ever get as far as an exemption hearing, this provision turns it into a town meeting. How would you like it if anyone could enter and participate in your litigation without your consent . . . like your competitors or your business enemies? I have a good idea - why not just write into the law that Rachel Weintraub will be considered a party in interest to every action at the CPSC?
- The Narrowest Scope provision has been modified to clarify that you must not only address each component but also each material. The paranoia you sense in this legislation is just the precautionary principle at work. The staffer-gnomes who have been crafting this legislation are not thinking about how our markets work or should work - they are simply obsessing over how we business people might find loopholes. Of course, it is in the nature of business people to try to avoid laws, we are all so evil. Oh yeah, I forgot . . . .
- The Limitation of Exception provision now is framed in terms of "all foreseeable users" which I can only assume is meant to make the burden of proof higher for supplicants. After all, if you can foresee a so-and-so using the product (I won't supply the colorful example), then the Commission must limit the exception. No possibility of risk can be tolerated by the precautionary principle folks.
As the provision for exclusions has not changed much, here is my analysis of the original language for your reference.
b. Treatment of Resale Shops by the Waxman Amendment:
- The provision defining a "used children's product" seems to now mean (a) an actual used children's product, and (b) new goods donated for a charitable purpose. This would seem to protect resale shops from liability for sale of items violating the lead provisions (but not the phthalates ban, notably) unless the seller or the person who supplied it to the seller knew it was in violation of the lead provisions. If that seems somewhat circular, it is. In this case, the law as drafted encourages resale shops to remain as ignorant as possible. This is Waxman's "Don't Ask, Don't Tell" policy. Nice.
- There has been no clarification about the application of this provision to consignment shops. Do they "obtain" goods for resale if they never take title? Something fun to speculate about!
- In a little-noticed provision, the definition of "seller" includes lenders or donators of used children's products. Thus, for lending libraries, they will be in the clear if they lend used goods, but will be on the hook if they lend new product. Does it become "used" after one loan, and if so, what does this mean? The legal department in your local children's library will figure this out. Sure. As to people who donate, the provision is circular again. As best I can figure out, you are not subject to the lead rules (only) if you are donating something used for charitable purposes, but if you give away something new, you are on the hook. At least, that's how I read it. So the bottom line is - don't give anything new to a charity, just give them junk. This is what Mr. Waxman wants. And that means this is what Congress wants.
While these changes may be an improvement, they are sadly improvements without much impact. This provision remains convoluted and hard to understand. The definition has numerous exceptions and also avoids giving the same shelter to resale shops for all the other picayune provisions of the law, like the phthalates ban. Frankly, without a clean exemption for this industry, resale stores are all going to avoid this class of goods. The complexity alone will kill this exemption except for the most sophisticated participants in an industry not known for its legal skills or resources. These stores won't hire lawyers to check their work. They can't afford it.
This is my original criticism of this provision, which is still applicable.
c. Prospective Application of 100 ppm Lead Limits - this provision was not changed in the new draft.
d. Low Volume Manufacturer "Exceptions":
- Thank heavens, they changed the term of art for these small fry to Small Batch Manufacturers. This was done at the insistence of the HTA. What a victory! Someone please explain this to me.
- The "In General" provision is basically unchanged, other than the fancy new name for the supposed beneficiaries of this largess. Notably, the last sentence was clarified to make sure no one could contend that Waxman inadvertently gave the Commission the power to grant "alternative testing methodologies" for ANYONE but the small batch guys. There's so much trust and love flowing here . . . .
- The truly non-existent "relief" of this provision remains EXACTLY the same. Here it is, bask in its wonderfulness: "The Commission . . . may, by regulation, provide alternative testing requirements for covered products manufactured by small batch manufacturers in lieu of those required under subsection (a) or (b). Any such alternative requirements shall provide for reasonable testing methodologies to assure certification based on compliance with the relevant consumer product safety standards." [Emphasis added] Standing ovation? These lucky micro-businesses must meet alternative TESTING methodologies that ASSURE compliance with the standards. In other words, they gotta test. They even added a "savings clause" to forbid any relief here (such as it is) if any foreseeable user might be foreseeably at risk. Some relief.
Notably, the reach of this section has now been limited to "covered products". This new term, which incorporates a three-prong test (this is the second three-pronger of this amendment so far, but not the last). [See below.] Please NOTE that this new term means that the ONLY relief the CPSC can grant is to these small fry products. A product that exceeds the limits of a "covered product" will NOT enjoy any theoretical testing relief, even if made by a business qualifying for relief overall. Should you care? Well, in my view, if you have to endure the burden of full compliance with one product, you have to build the full infrastructure and bear the related liabilities. Thus, these micro-businesses supposedly being saved here are actually at substantial risk of suffocation if even ONE product sells well. Too bad for them.
The absurd and utterly inappropriate definition of a "low volume manufacturer" has been completely jumbled and incorporates the new concept of "covered products", too. Let me try to sort out this for you.
- As noted above, only "covered product" enjoy any potential relief under this section. The "covered products" test is a three-prong test: (i) manufactured not more than 5,000 "units" of the product in the prior fiscal year, (ii) had not more than $30,000 in sales of the product in the prior fiscal year, AND (iii) had no more than $500,000 in total sales in the prior fiscal year. [Do you feel vines growing over your brain yet?] Dollars are indexed for inflation. Notably, the definition ONLY applies to the manufacture of these items, NOT importation. Too bad, importers. GOTCHA!
The implication of this definition is that if you grow to over $500,000 in total sales, all exemptions applicable to any of your low volume items goes up in smoke instantly. That last dollar is gonna HURT. You also cannot get relief for any individual product if your sales of THAT item are greater than 5,000 "units" per year or $30,000 in sales. Here's another compliance tip: don't grow your business! Too hard? Don't worry, the other policies of this government should help you meet this goal . . . .
- The definition of a "small batch manufacturer" defines who should be treated with special charity by the CPSC under this marvelous section of the amendment. It's not going be a long list. Who wants to see another three-prong test?! Okay, break out your calculator so you can figure out if they are referring to you: (a) AT LEAST TWO-THIRDS of "the manufacturer's products" (I love that term) meets this two-part test: (i) the manufacturer manufactured or imported not more than 5,000 units of the product in the prior CALENDAR year, AND (ii) the manufacturer had not more than $30,000 in sales of the product in the prior CALENDAR year, AND (b) the manufacturer had not more than $500,000 in sales in the prior CALENDAR year.
This is getting fun! Okay, first we need to decide - is it a two-prong test with one prong having two sub-prongs, or is it a three-prong test? This is a rather metaphysical question . . . but I say it's our third three-prong test of this short amendment. [Imagine how many three-prong tests are in the health care bill.] I welcome your insights on this question.
There are some interesting quirks in the Small Batch Manufacturer definition. First, this provision applies to imported products, but the "covered products" definition does not. Gotcha! What does this mean? Who knows. The head spins . . . . Even better, the definition of "Small Batch Manufacturer" is based on calendar year calculations and the definition of "covered products" is based on fiscal year calculations. Love it. I learn so much from Mr. Congress. Apparently, Congress wants it to work this way because there must be some sort of dangerous loophole for people who have fiscal years which are not the calendar year. Mr. Waxman is onto your game, you desperadoes! There's no escape!
At least the Waxmanis kept it simple. Good job, guys, it's artful!
Btw, they added a little provision to make sure that the Commission investigates the structure of your business' "affiliations". Clearly, the Commission needs to make SURE they correctly tote up your revenues for this ornate determination. [Little known fact: the CPSC uses clacker balls for this work.] The reach of the Obamist/Waxman government into your private affairs, in ways completely and utterly unrelated to public interest or safety, apparently knows no bounds. Get your files ready, little businesses - the CPSC wants to take a peek. Perhaps check out your tax returns and . . . oops, it appears you took a few deductions that you weren't entitled to. We can just let our sister agency know, you don't have to do ANYTHING, we're just here to help.
Small business people, you should be flipping mad over this pathetic attempt to "help" you. My original criticism of this provision is still largely applicable.
e. Phthalates Ban Exception for Internal Components: This is largely intact from the prior draft although they did add a provision modifying the Commission's right to adopt the definition of an internal component from the lead accessibility standard. The Commission must now, "as appropriate", consider whether the component can be placed in the mouth. We are talking about internal components here.
I wish I had a laugh track for my blog . . . .
f. Removal of CPSA Section 6(b) Due Process Rights of Manufacturers: has been eliminated from the draft.
g. Voluntary Recall Standards to be Matched to Mandatory Recalls: has been eliminated from this draft.
h. Imminent Hazard Panic Attacks by the Commission: has been eliminated from this draft.
i. Subpoena Power for Underlings at the CPSC: This provision was trimmed back partially to apply only to physical and documentary evidence. This modest restructuring of this new right does not in any way address the issues I have pointed out in the past (here and here). This new subpoena power is not essential to the operation of the CPSC, regardless of their assertions, and represents a significant degradation of procedural protections that encourage business people to invest. When all trust is destroyed among the regulated community and its safety regulator, who will want to invest? Hello, Congress?
CONCLUSIONS:
The Waxman Amendment has been improved mainly by deletions of several truly awful and duplicitous provisions. Many defective provisions in the original draft survived the revisions. What's left provides little substantive relief to the unwashed masses, but promises some sub rosa relief to the book industry and ATV'rs without giving the appearance of favoritism. There is little to cheer here for resale shops, small businesses (even micro-businesses, hello HTA, are you there?), education companies, apparel companies, you-name-it.
And many important issues are left completely unaddressed. I have previously provided my most discrete list of CRITICAL missing elements that must be part of any meaningful amendment of the CPSIA:
- Risk Assessment by the CPSC and/or the Commission.
- Changes in age limits for the lead standards and phthalates ban.
- Narrowing of the scope of "Children's Product" to eliminate many categories of products unthinkingly pulled into this law by its overly broad language.
- True reform to protect small businesses.
- Tracking labels relief.
My full list of needed changes is found here.
More fun to follow tomorrow, I am sure.
Sunday, April 4, 2010
CPSIA - It's Raining Paper . . . .
I have previously made the point (again and again) that the paperwork involved in complying or even understanding the CPSIA has escalated to absurd and previously unimaginable levels. When I recently posted my latest video blog, I noted that MY count of the pages of rules implementing the CPSIA was over 1800. [The CPSC has not promulgated a list of these documents and some of them may not even be publicly available, so that's just my count - no one knows the true number.]
Since then, the paper shower has continued unabated. Here are a few new shovel fulls from your CPSC:
Definition of "Children's Products": 52 pages
Standard Operating Procedure for Determination of Phthalates: 8 pages
Proposed Rule: Conditions and Requirements for Testing Component Parts of Consumer Products: 69 pages
Draft Notice of Proposed Rule -Publicly Available Consumer Product Safety Information Database: 172 pages
Proposed Rule: Testing and Labeling Pertaining to Product Certification: 160 pages
Staff Briefing Package CPSIA Certification & Testing, April 1, 2010: 110 pages
Total pages: 571
In addition, public meetings of the Commission on Wednesday morning and all day on Thursday this week will feature major topics of great importance to those companies affected by the CPSIA. These will be Must Watch hearings. Hope you aren't too busy running your business to stop what you are doing and tune in all day.
There cannot be any rational expectation by the CPSC that businesses interested in the development of CPSIA implementation rules could POSSIBLY keep up with this torrent of paper and hearings. The impracticality of participating in this process means that it is a railroad job, plain and simple. It is intentional, too - overwhelming the regulated community is one way to silence the critics.
Despite the absence of any credible evidence that such a massive expansion in safety rules is justified by injury statistics or any form of safety data from marketplace, the CPSC is in the process of gleefully converting the safety rules governing children's products into something approaching the Internal Revenue Code in complexity. The compliance burden on businesses will be overwhelming - or simply impossible in a practical sense. As important as Ms. Tenenbaum's instant death rules are, running our operating businesses will take priority for most people.
With this inundation of complexity, the point of capitulation is upon us. Add to this the known risk of mega penalties. Remember, this CPSC has warned businesses not to dare resist it. The consequences of resistance can be interpolated from the Daiso penalty - $2.05 million for recalls of 698 pieces in five recalls of 19 products over two years without a single reported injury. [Imagine what Mattel or RC2 would pay today under this enforcement scheme. I wonder if my calculator has enough digits for that number . . . .] Ms. Tenenbaum has demonstrated that she will have no reluctance to sic the U.S. Attorney on us for our transgressions without regard to actual market impact, striving to impose "a very high hurdle to jump over to ever get back in the import business again".
This approach to regulation is an irresponsible act by our government and very damaging to the market. It's naive and shortsighted, but in the "Father Knows Best" world wrought by Mr. Obama, it's useless to attempt to reason with the regulators. The promised "dialogue" with the regulated community has been exposed as a sham. It's hard not to conclude that businesses have now been deemed evil by nature. Otherwise, how do you explain the paper blizzard? Sadly, none of this holds any prospect of making kids safer.
I hate the feeling of shouting in a vacuum. I am not sure what will trigger a revolt against this insanity. Does another work assignment of 600 pages anger you . . . yet? The mountain is at about 2500 pages to read now, and there's more to come. What outrages will have to take place before you resist?
This may be too urgent to wait for November. Think about how you will deal with penalties for complying with rules you have never read, cannot possibly read and may not even understand. This regulator has already acted to put a minor player out of business. Are you next?
It's time to act with a sense of urgency. Your customers, your employees, your stakeholders are counting on you.
Since then, the paper shower has continued unabated. Here are a few new shovel fulls from your CPSC:
Definition of "Children's Products": 52 pages
Standard Operating Procedure for Determination of Phthalates: 8 pages
Proposed Rule: Conditions and Requirements for Testing Component Parts of Consumer Products: 69 pages
Draft Notice of Proposed Rule -Publicly Available Consumer Product Safety Information Database: 172 pages
Proposed Rule: Testing and Labeling Pertaining to Product Certification: 160 pages
Staff Briefing Package CPSIA Certification & Testing, April 1, 2010: 110 pages
Total pages: 571
In addition, public meetings of the Commission on Wednesday morning and all day on Thursday this week will feature major topics of great importance to those companies affected by the CPSIA. These will be Must Watch hearings. Hope you aren't too busy running your business to stop what you are doing and tune in all day.
There cannot be any rational expectation by the CPSC that businesses interested in the development of CPSIA implementation rules could POSSIBLY keep up with this torrent of paper and hearings. The impracticality of participating in this process means that it is a railroad job, plain and simple. It is intentional, too - overwhelming the regulated community is one way to silence the critics.
Despite the absence of any credible evidence that such a massive expansion in safety rules is justified by injury statistics or any form of safety data from marketplace, the CPSC is in the process of gleefully converting the safety rules governing children's products into something approaching the Internal Revenue Code in complexity. The compliance burden on businesses will be overwhelming - or simply impossible in a practical sense. As important as Ms. Tenenbaum's instant death rules are, running our operating businesses will take priority for most people.
With this inundation of complexity, the point of capitulation is upon us. Add to this the known risk of mega penalties. Remember, this CPSC has warned businesses not to dare resist it. The consequences of resistance can be interpolated from the Daiso penalty - $2.05 million for recalls of 698 pieces in five recalls of 19 products over two years without a single reported injury. [Imagine what Mattel or RC2 would pay today under this enforcement scheme. I wonder if my calculator has enough digits for that number . . . .] Ms. Tenenbaum has demonstrated that she will have no reluctance to sic the U.S. Attorney on us for our transgressions without regard to actual market impact, striving to impose "a very high hurdle to jump over to ever get back in the import business again".
This approach to regulation is an irresponsible act by our government and very damaging to the market. It's naive and shortsighted, but in the "Father Knows Best" world wrought by Mr. Obama, it's useless to attempt to reason with the regulators. The promised "dialogue" with the regulated community has been exposed as a sham. It's hard not to conclude that businesses have now been deemed evil by nature. Otherwise, how do you explain the paper blizzard? Sadly, none of this holds any prospect of making kids safer.
I hate the feeling of shouting in a vacuum. I am not sure what will trigger a revolt against this insanity. Does another work assignment of 600 pages anger you . . . yet? The mountain is at about 2500 pages to read now, and there's more to come. What outrages will have to take place before you resist?
This may be too urgent to wait for November. Think about how you will deal with penalties for complying with rules you have never read, cannot possibly read and may not even understand. This regulator has already acted to put a minor player out of business. Are you next?
It's time to act with a sense of urgency. Your customers, your employees, your stakeholders are counting on you.
Tuesday, December 29, 2009
CPSIA - Workshop on the Public Database Jan. 11/12
The CPSC has scheduled another two day workshop in January, this time for the dreaded and much-feared public database. This workshop comes on the heels of a lightly-attended hearing on the same subject held November 10 at CPSC headquarters. [You can watch the hearing at this link.] I testified at this hearing, one of two companies to participate (there were also a few trade associations presenters and the usual assortment of highly-motivated consumer "advocates"). There has been no response by the agency to this information-gathering exercise other than to schedule the workshop.
No never mind, they really want to hear from us. According to a blanket email I received from Scott Wolfson, "Education and advocacy are at the center of our priorities, which means strengthening partnerships with community leaders like you . . . . We hope for significant participation and we greatly value your input." Wow, I am touched.
Of course, it is nice that the agency is attempting to show an interest in dialogue and exchange of views with stakeholders. I certainly appreciate being afforded the opportunity to speak at these events. However, I find this particular workshop opportunity somewhat grating. Here are a few reasons why I am so easily annoyed:
a. I testified at the November 10th hearing at the request of the Commission. I was not planning to attend the hearing, as I have made many trips to Washington in the last year - all at company expense and at the sacrifice of my "regular" job. The CPSC staff made it clear that they not only wanted me to attend, but that I should present. This may have been particularly important because as of the beginning of the week of the hearing, there were only two people committed to speaking (including me). Okay, so I go to Washington, study up on the issue, write a little speech, and try to keep it short. They have a strict time limit, you see. This wasn't always a problem. At my first hearing (lead panel, Nov. 6, 2008), my speech was impromptu and they let me speak for 23 minutes (other speeches were longer). That flexibility is a mere memory now, as I learned at the tracking labels hearing (May 12) when I was cut off at the ten minute mark. And, drat, at the public database hearing, I again ran a bit over. Even with hardly anyone in the room, the time limit police stopped me at ten minutes, mid-sentence.
So I find it irritating that they asked to fly in to tell them my thoughts in November, but limited me to ten minutes, and now they want me to pony up for more flight and travel expenses, so they can . . . what, cut me off again?
b. I would take this process a bit more seriously if they gave ANY sign of listening at the last workshop. Why so cynical, Rick? Well, wasn't it this Commission who moved to act on the testing stay only three business days after we attended the LAST workshop (December 10/11, on the so-called "15 Month Rule")? There was no time to process the testimony at the 15 Month Rule workshop before the stay decision was made (those three days were devoted to complete chaos, courtesy of Henry Waxman and his unilateral amendment of the CPSIA). The fact that the agency spent two days intensively gathering information from 250 stakeholders on the impact of the 15 Month Rule and then the Commission almost immediately disregarded it in one of their most important decisions of the year made me feel the workshop was a SHAM. And if that one was a sham, this one promises to be an even greater sham. Since the last hearing has apparently generated no work product or further dialogue and since it was so lightly attended, the January workshop appears to be entirely for show.
I can talk to myself at home for free.
c. Finally, does the CPSC think drafting implementing rules for the CPSIA is some sort of hobby for the business community - or is it a plot to make the conduct of regulated business impossible? Do they really think any ordinary business can sacrifice its leadership to monthly trips to Washington to blather on to regulators who are only slightly interested in what they have to say? [Let's not forget about the CPSC's pet organization, ICPHSO, which bookended meetings in late October 2009 and mid-February 2010. ICPHSO meetings are essentially unofficial CPSC workshops/hearings.] Who can afford this financially, as a matter of priorities or allocation of scarce corporate resources? It seems obvious to me that the more frequently the CPSC holds these meetings, the fewer participants they will garner. The scheduling of meetings and hearings every month by the CSPC seems naive and sinister at the same time.
I won't be there.
All Roads Lead to Rome, as the old saying goes. Why the nuttiness here? I have the usual explanation:
No never mind, they really want to hear from us. According to a blanket email I received from Scott Wolfson, "Education and advocacy are at the center of our priorities, which means strengthening partnerships with community leaders like you . . . . We hope for significant participation and we greatly value your input." Wow, I am touched.
Of course, it is nice that the agency is attempting to show an interest in dialogue and exchange of views with stakeholders. I certainly appreciate being afforded the opportunity to speak at these events. However, I find this particular workshop opportunity somewhat grating. Here are a few reasons why I am so easily annoyed:
a. I testified at the November 10th hearing at the request of the Commission. I was not planning to attend the hearing, as I have made many trips to Washington in the last year - all at company expense and at the sacrifice of my "regular" job. The CPSC staff made it clear that they not only wanted me to attend, but that I should present. This may have been particularly important because as of the beginning of the week of the hearing, there were only two people committed to speaking (including me). Okay, so I go to Washington, study up on the issue, write a little speech, and try to keep it short. They have a strict time limit, you see. This wasn't always a problem. At my first hearing (lead panel, Nov. 6, 2008), my speech was impromptu and they let me speak for 23 minutes (other speeches were longer). That flexibility is a mere memory now, as I learned at the tracking labels hearing (May 12) when I was cut off at the ten minute mark. And, drat, at the public database hearing, I again ran a bit over. Even with hardly anyone in the room, the time limit police stopped me at ten minutes, mid-sentence.
So I find it irritating that they asked to fly in to tell them my thoughts in November, but limited me to ten minutes, and now they want me to pony up for more flight and travel expenses, so they can . . . what, cut me off again?
b. I would take this process a bit more seriously if they gave ANY sign of listening at the last workshop. Why so cynical, Rick? Well, wasn't it this Commission who moved to act on the testing stay only three business days after we attended the LAST workshop (December 10/11, on the so-called "15 Month Rule")? There was no time to process the testimony at the 15 Month Rule workshop before the stay decision was made (those three days were devoted to complete chaos, courtesy of Henry Waxman and his unilateral amendment of the CPSIA). The fact that the agency spent two days intensively gathering information from 250 stakeholders on the impact of the 15 Month Rule and then the Commission almost immediately disregarded it in one of their most important decisions of the year made me feel the workshop was a SHAM. And if that one was a sham, this one promises to be an even greater sham. Since the last hearing has apparently generated no work product or further dialogue and since it was so lightly attended, the January workshop appears to be entirely for show.
I can talk to myself at home for free.
c. Finally, does the CPSC think drafting implementing rules for the CPSIA is some sort of hobby for the business community - or is it a plot to make the conduct of regulated business impossible? Do they really think any ordinary business can sacrifice its leadership to monthly trips to Washington to blather on to regulators who are only slightly interested in what they have to say? [Let's not forget about the CPSC's pet organization, ICPHSO, which bookended meetings in late October 2009 and mid-February 2010. ICPHSO meetings are essentially unofficial CPSC workshops/hearings.] Who can afford this financially, as a matter of priorities or allocation of scarce corporate resources? It seems obvious to me that the more frequently the CPSC holds these meetings, the fewer participants they will garner. The scheduling of meetings and hearings every month by the CSPC seems naive and sinister at the same time.
I won't be there.
All Roads Lead to Rome, as the old saying goes. Why the nuttiness here? I have the usual explanation:
- an irrational, over-reaching law is impossible to implement sensibly;
- the regulatory agency is left with no discretion under the new law and has no power to alter the ridiculous, irresponsible or impossible language of the statute;
- Congress won't listen and would prefer that the CPSC make the problem go away, perhaps even at the expense of breaking the law Congress passed;
- The agency gamely tries its best to carry on, with increasing chaos and market damage inflicted; and
- Businesses (particularly small businesses) are the big losers, with the agency itself a close second.
So we have another two-day session to help the CPSIA create an over-arching database that will likely harm American businesses, create liability storms, eliminate jobs (except at plaintiff law firms and at consumer groups) and generally fail at whatever starry-eyed objective underlay its conception. A good time for all, no doubt.
Let me know how it goes.
Wednesday, December 16, 2009
CPSIA - Tracking Labels Answer Received Today
The CPSC answered my letter of September 18 regarding tracking labels today. In a nutshell, my question was about how small businesses are supposed to ascertain "cohort information" from fungible products if we are permitted to not use lot markings. The answer to that question was not clear (to me) from the Tracking Labels Guidance.
In today's response, the CPSC seems to indicate more flexibility than I had read into the Guidance. Tony Cook of the Office of General Counsel states: "Your letter suggests that the manufacturer lacks flexibility regarding information that must be 'ascertainable'. As with the 'marking' requirement, the manufacturer's reasonable judgment and consideration of the manufacturer's particular circumstances, are guiding issues." He carries on helpfully: "Without such an approach, an absolute requirement to have ascertainable all required information would in effect swallow the Commission's considered course with respect to marking." This is the conflict that motivated my concern.
On the other hand, Mr. Cook states ". . . what can be marked and what can be ascertainable are separate questions". This is the rub, of course. This means that even if you can't mark the item, you might still have to be able to ascertain the cohort information. How do you do that? Well, you can't.
It all boils down to what is considered "reasonable judgment". In fact, I have never found this a challenging standard to meet in our business but that was before there were huge penalties and possibly jail time to consider.
In an environment where the regulators want us to exercise sound judgment, there needs to be some recognition that the incentive to take the risk of exercising judgment only makes sense when that judgment is PROTECTED. No one wants to risk huge fines for doing their job (or let their teammates incur this risk). Thus, I think the CPSC needs to look at the question about ascertainability again. The CPSC needs to say flat out that it will respect the judgment of manufacturers on how they determine which information, if any, can be ascertainable, as long as the decision on marking was deliberate, consistent and made on a good faith basis.
In the case of our business, tracking labels serve no particular purpose except to slow us down and waste our money. We have recalled 130 pieces since 1984 (out of an estimated one billion shipped, all units believed recovered) so the risk to consumers, at least thus far, seems controlled. I would like the authority to decide how much to spend on tracking labels and information retention/accessibility, based on my knowledge of our products, our market, our track record and our legal obligations. Then, if we exercise good faith and are reasonable and consistent in our approach to markings and cohort information, the CPSC should respect our decisions. thus, a failure to mark or ascertain would not be held against us unless our balancing of the equities is demonstrated to be unreasonable.
None of this would be necessary except for the ridiculous penalties and fines possible under the CPSIA. The indiscriminate manner of penalizing under the law makes minor issues (even inconsequential errors) into potentially serious problems. In addition, given that the CPSC recent practice of doling out penalties for long ago settled disputes, the long tail of 20-20 hindsight makes this dilemma particularly uncomfortable.
I appreciate the CPSC's effort in replying to me, and look forward to working with them to bring more clarity to this very important point.
In today's response, the CPSC seems to indicate more flexibility than I had read into the Guidance. Tony Cook of the Office of General Counsel states: "Your letter suggests that the manufacturer lacks flexibility regarding information that must be 'ascertainable'. As with the 'marking' requirement, the manufacturer's reasonable judgment and consideration of the manufacturer's particular circumstances, are guiding issues." He carries on helpfully: "Without such an approach, an absolute requirement to have ascertainable all required information would in effect swallow the Commission's considered course with respect to marking." This is the conflict that motivated my concern.
On the other hand, Mr. Cook states ". . . what can be marked and what can be ascertainable are separate questions". This is the rub, of course. This means that even if you can't mark the item, you might still have to be able to ascertain the cohort information. How do you do that? Well, you can't.
It all boils down to what is considered "reasonable judgment". In fact, I have never found this a challenging standard to meet in our business but that was before there were huge penalties and possibly jail time to consider.
In an environment where the regulators want us to exercise sound judgment, there needs to be some recognition that the incentive to take the risk of exercising judgment only makes sense when that judgment is PROTECTED. No one wants to risk huge fines for doing their job (or let their teammates incur this risk). Thus, I think the CPSC needs to look at the question about ascertainability again. The CPSC needs to say flat out that it will respect the judgment of manufacturers on how they determine which information, if any, can be ascertainable, as long as the decision on marking was deliberate, consistent and made on a good faith basis.
In the case of our business, tracking labels serve no particular purpose except to slow us down and waste our money. We have recalled 130 pieces since 1984 (out of an estimated one billion shipped, all units believed recovered) so the risk to consumers, at least thus far, seems controlled. I would like the authority to decide how much to spend on tracking labels and information retention/accessibility, based on my knowledge of our products, our market, our track record and our legal obligations. Then, if we exercise good faith and are reasonable and consistent in our approach to markings and cohort information, the CPSC should respect our decisions. thus, a failure to mark or ascertain would not be held against us unless our balancing of the equities is demonstrated to be unreasonable.
None of this would be necessary except for the ridiculous penalties and fines possible under the CPSIA. The indiscriminate manner of penalizing under the law makes minor issues (even inconsequential errors) into potentially serious problems. In addition, given that the CPSC recent practice of doling out penalties for long ago settled disputes, the long tail of 20-20 hindsight makes this dilemma particularly uncomfortable.
I appreciate the CPSC's effort in replying to me, and look forward to working with them to bring more clarity to this very important point.
Friday, September 18, 2009
CPSIA - Letter to CPSC re Tracking Labels Guidance 9-18-09
September 18, 2009
VIA FEDERAL EXPRESS
Todd Stevenson
Director, Office of the Secretary
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, MD 20814
Re: Section 103 Tracking Labels Guidance
Dear Mr. Stevenson:
I am writing on behalf of the Alliance for Children’s Product Safety, an organization comprised of small businesses in many industries impacted by the Consumer Product Safety Improvement Act (CPSIA). I request your prompt consideration of an urgent matter regarding the impact of Section 103 tracking labels guidance issued on July 21 (the “Guidance”) on small businesses in America.
By way of background, I would like to draw your attention to the fact that I have expended considerable effort to help the agency avoid mishap in the implementation of the CPSIA’s troubling tracking labels provision in recent months. I have testified before the CPSC on tracking labels (May 12 hearing, second panel), wrote a comment letter on Section 103, sent a letter to Rep. John Dingell in part addressing tracking labels and posted no less than 38 blog entries related to tracking labels, including a comprehensive list of “unanswered questions” about the Guidance. To date, none of my “unanswered questions” have been addressed by the agency in any form as far as I know.
The Guidance was originally heralded as a document sensitive to the interests of small businesses. Some terms seemed to offer relief to small lot manufacturers who did not already mark products with lot information. This regulatory approach was forecast by Commissioner Moore in his May 13 statement explaining his vote on the NAM tracking labels stay petition, when he noted that tracking labels implementation would be “a learning process for all of us and not an excuse to punish an unwitting mistake.”
Unfortunately, the Guidance also specified that all of the information in Section 103 needed to be “ascertainable” by both the manufacturer and consumers. This has been interpreted to mean that manufacturers must be able to produce “detailed production information, including the means to distinguish products made from different factories, made with different components, at different times” for any product pulled from any store shelf anywhere and at any time. The Commission made it clear that this is a serious legal obligation. As Mr. Moore wrote on July 20, “those who fail to keep the information required by the tracking label provision . . . will not find a very sympathetic ear at the Commission.”
The issue of what “ascertainable” means gets to the heart of the issue that Mr. Moore highlighted. It is also at the heart of the tracking labels dilemma for small businesses. In my “unanswered questions” blogpost on August 14, I posed the following question:
The Guidance states: “The question of what should be ascertainable is a different question than whether that specific information can be marked on the product or packaging.” [Emphasis added.] Thus, it appears that the CPSC will not permit ANY manufacturers to sell ANY children’s product for which the specified Section 103 information is not “ascertainable”. In other words, if a consumer calls up to inquire about the Section 103 information for any unit of a children’s product made on or after August 14, regardless of whether made by a small lot manufacturer, that information must be available – or less. Correct?
Elsewhere in the Guidance, the CPSC advises that small lot manufacturers need not create a lot marking system if one does not currently exist. So, essentially, the rules require that co-hort information be “ascertainable” on items without lot markings. This is, for all practical purposes, impossible. An unmarked item is fungible with all other similar unmarked items. If small businesses are not required to mark by lot, then it will be impossible to distinguish products by lot.
This is a massive problem for small businesses. It is not solvable as far as I can tell. The Guidance says on one hand that we do not need to mark by lot, and on the other hand, says we will be exposed to civil and criminal penalties if we cannot “ascertain” lot information. This is faulty “guidance” at a minimum. It is tantamount to requiring universal marking of products by lot – although the Guidance states the exact opposite.
Please do not overlook the fact that Section 103 applies to every children’s product sold in this country without exception. It is a common misconception in the market that tracking labels are only required for items subject to the new lead limits or the phthalates ban. Thus, the scale of affected industries and product classes is incomprehensibly large.
As I have testified and written extensively on the issues relating to tracking labels for businesses catering to low volume specialty markets, I will not highlight again the many reasons why this rule is impractical in the extreme. Please consider, however, a very practical business problem. Many specialty items are low-priced and have not been designed optimally for tracking labels. The Guidance recognized the seriousness of this issue for the bulk vending industry, but overlooked it for everyone else. Frankly, the practical issues for items that sell for $0.25 are virtually identical for items that sell for $10. In any event, “ascertaining” co-hort information on any children’s product without a lot marking is basically impossible (without changing every lot in some physical way, a manufacturing “solution” likely to quickly degrade into utter chaos or commercial disaster). It is therefore likely that most products sold into specialty markets will violate the Guidance unless they incorporate permanent lot markings.
Members of the Alliance for Children’s Product Safety are facing a profound disaster as a consequence of this rule. Products are already being dropped for an inability to meet the “ascertainable” rule, particularly under threat of penalties under the CPSIA. No one working for a children’s product manufacturer will risk going to jail over co-hort information; they are much more likely to drop products to avoid the issue entirely. The economic damage will be deep and wide – and will contribute nothing to consumer safety. It is ironic that declining product availability as a result of implementation of Section 103 may lead to fewer recalls, thus giving the misimpression that children are safer. In fact, children will simply go to poorly-stocked schools and enjoy a lower standard of living.
I call on the Commission to review and modify the Guidance to provide real and meaningful relief from the requirement on “ascertainability” for small businesses catering to specialty markets. Your prompt attention to this urgent issue will save jobs, products and industries.
Thank you for your prompt consideration of this important matter.
Sincerely,
Richard Woldenberg
Chairman
Alliance for Children’s Product Safety
cc: Chairman Inez Tenenbaum
Commissioner Robert Adler
Commissioner Thomas Moore
Commissioner Nancy Nord
Commissioner Anne Northrup
VIA FEDERAL EXPRESS
Todd Stevenson
Director, Office of the Secretary
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, MD 20814
Re: Section 103 Tracking Labels Guidance
Dear Mr. Stevenson:
I am writing on behalf of the Alliance for Children’s Product Safety, an organization comprised of small businesses in many industries impacted by the Consumer Product Safety Improvement Act (CPSIA). I request your prompt consideration of an urgent matter regarding the impact of Section 103 tracking labels guidance issued on July 21 (the “Guidance”) on small businesses in America.
By way of background, I would like to draw your attention to the fact that I have expended considerable effort to help the agency avoid mishap in the implementation of the CPSIA’s troubling tracking labels provision in recent months. I have testified before the CPSC on tracking labels (May 12 hearing, second panel), wrote a comment letter on Section 103, sent a letter to Rep. John Dingell in part addressing tracking labels and posted no less than 38 blog entries related to tracking labels, including a comprehensive list of “unanswered questions” about the Guidance. To date, none of my “unanswered questions” have been addressed by the agency in any form as far as I know.
The Guidance was originally heralded as a document sensitive to the interests of small businesses. Some terms seemed to offer relief to small lot manufacturers who did not already mark products with lot information. This regulatory approach was forecast by Commissioner Moore in his May 13 statement explaining his vote on the NAM tracking labels stay petition, when he noted that tracking labels implementation would be “a learning process for all of us and not an excuse to punish an unwitting mistake.”
Unfortunately, the Guidance also specified that all of the information in Section 103 needed to be “ascertainable” by both the manufacturer and consumers. This has been interpreted to mean that manufacturers must be able to produce “detailed production information, including the means to distinguish products made from different factories, made with different components, at different times” for any product pulled from any store shelf anywhere and at any time. The Commission made it clear that this is a serious legal obligation. As Mr. Moore wrote on July 20, “those who fail to keep the information required by the tracking label provision . . . will not find a very sympathetic ear at the Commission.”
The issue of what “ascertainable” means gets to the heart of the issue that Mr. Moore highlighted. It is also at the heart of the tracking labels dilemma for small businesses. In my “unanswered questions” blogpost on August 14, I posed the following question:
The Guidance states: “The question of what should be ascertainable is a different question than whether that specific information can be marked on the product or packaging.” [Emphasis added.] Thus, it appears that the CPSC will not permit ANY manufacturers to sell ANY children’s product for which the specified Section 103 information is not “ascertainable”. In other words, if a consumer calls up to inquire about the Section 103 information for any unit of a children’s product made on or after August 14, regardless of whether made by a small lot manufacturer, that information must be available – or less. Correct?
Elsewhere in the Guidance, the CPSC advises that small lot manufacturers need not create a lot marking system if one does not currently exist. So, essentially, the rules require that co-hort information be “ascertainable” on items without lot markings. This is, for all practical purposes, impossible. An unmarked item is fungible with all other similar unmarked items. If small businesses are not required to mark by lot, then it will be impossible to distinguish products by lot.
This is a massive problem for small businesses. It is not solvable as far as I can tell. The Guidance says on one hand that we do not need to mark by lot, and on the other hand, says we will be exposed to civil and criminal penalties if we cannot “ascertain” lot information. This is faulty “guidance” at a minimum. It is tantamount to requiring universal marking of products by lot – although the Guidance states the exact opposite.
Please do not overlook the fact that Section 103 applies to every children’s product sold in this country without exception. It is a common misconception in the market that tracking labels are only required for items subject to the new lead limits or the phthalates ban. Thus, the scale of affected industries and product classes is incomprehensibly large.
As I have testified and written extensively on the issues relating to tracking labels for businesses catering to low volume specialty markets, I will not highlight again the many reasons why this rule is impractical in the extreme. Please consider, however, a very practical business problem. Many specialty items are low-priced and have not been designed optimally for tracking labels. The Guidance recognized the seriousness of this issue for the bulk vending industry, but overlooked it for everyone else. Frankly, the practical issues for items that sell for $0.25 are virtually identical for items that sell for $10. In any event, “ascertaining” co-hort information on any children’s product without a lot marking is basically impossible (without changing every lot in some physical way, a manufacturing “solution” likely to quickly degrade into utter chaos or commercial disaster). It is therefore likely that most products sold into specialty markets will violate the Guidance unless they incorporate permanent lot markings.
Members of the Alliance for Children’s Product Safety are facing a profound disaster as a consequence of this rule. Products are already being dropped for an inability to meet the “ascertainable” rule, particularly under threat of penalties under the CPSIA. No one working for a children’s product manufacturer will risk going to jail over co-hort information; they are much more likely to drop products to avoid the issue entirely. The economic damage will be deep and wide – and will contribute nothing to consumer safety. It is ironic that declining product availability as a result of implementation of Section 103 may lead to fewer recalls, thus giving the misimpression that children are safer. In fact, children will simply go to poorly-stocked schools and enjoy a lower standard of living.
I call on the Commission to review and modify the Guidance to provide real and meaningful relief from the requirement on “ascertainability” for small businesses catering to specialty markets. Your prompt attention to this urgent issue will save jobs, products and industries.
Thank you for your prompt consideration of this important matter.
Sincerely,
Richard Woldenberg
Chairman
Alliance for Children’s Product Safety
cc: Chairman Inez Tenenbaum
Commissioner Robert Adler
Commissioner Thomas Moore
Commissioner Nancy Nord
Commissioner Anne Northrup
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