The Act is particularly relevant as it covers, includes or updates:
- The ban on the use of lead in children’s products, and mandatory third-party testing of imported children’s products
- Restrictions on Phthalates in Children’s Toys and Child Care Articles
- Greater access for the public to information trolled by plaintiff’s lawyers
- All-Terrain Vehicle standards
- Increased resources for the testing and inspection of products, including those coming into our nation’s ports.
On August 14, 2008, President Bush signed legislation amending the Consumer Product Safety Act (15 U.S.C. § 2051 et. seq.) to overhaul the Consumer Product Safety Commission (“CPSC”) and address product safety concerns. Public Law 110- 314. The Consumer Product Safety Improvement Act of 2008 (“the Act”) was introduced in Congress in response to a number of high profile recalls of imported consumer products, especially children’s toys, as well as complaints that the CPSC was inadequately staffed and funded to enforce existing consumer product safety laws. In response, members of the House of Representatives and Senate held hearings, appropriated additional funds for the increased testing and inspection of products coming into our nation’s ports, and introduced separate versions of this comprehensive legislation, one in the House and one in the Senate. These efforts were first discussed in the Winter 2008 issue of Reed Smith’s Federal Forecaster (Vol. IV, No. 1), available at http://www.reedsmith.com/_db/_documents/0802fedfor.pdf.Both the House and the Senate overwhelmingly passed their separate versions of this legislation and have reconciled the differences in conference. The purpose of this update is to advise Reed Smith clients about key provisions of the Act and how these provisions will affect the manufacture, import and sale of consumer products in the United States. Seven subject areas are covered:
- Restrictions on the Manufacture, Import, and Sale of Children’s Products
- Greater Transparency, Public Disclosure and Identification of all in the Supply Chain
- Increased Penalties, Restrictions and Greater Enforcement of Existing Laws
- Enhanced Recall Authority
- All-Terrain Vehicle Standards
- Increased Resources for the Consumer Product Safety Commission
I. Restrictions on the Manufacture, Import and Sale of Children’s Products
Prohibition on the Inclusion of Lead in Children’s Products – The Act bans the use of lead contained in children’s products, except for trace amounts, addressing a key concern with children’s products imported from China. Currently, the only restriction on lead in children’s products relates to any paint applied to the product that contains more than 600 parts per million of lead (ppm). 16 C.F.R. 1303.1. Section 101 of the Act requires the CPSC to reduce this standard to 90 ppm within one year of enactment. It also restricts the amount of lead allowed in the product itself. Initially, the lead limit would be established at 600 ppm total lead content by weight for any part of the product, effective 180 days after the Act is enacted into law. One year after enactment, that limit would be reduced to 300 ppm total lead content by weight for any part of the product. Three years after enactment, that limit would be reduced to 100 ppm total lead content by weight for any part of the product, unless the CPSC considers this limit to be not technologically feasible. If the limit is found to be not feasible, then the CPSC is required to establish a limit under 300 ppm that is feasible.
Exclusion of certain materials and products, as well as inaccessible components. The Act contains a number of exceptions to the lead prohibitions. For example, the Act allows the CPSC to exclude a specific product or material from the lead prohibition but only after it determines, based on the best scientific evidence available, that there is no danger of absorption by children and no other adverse impact on public health or safety. Further, the Act provides exceptions for component parts that are not “physically exposed by reason of a sealed covering or casing and does not become physically exposed through reasonably foreseeable use and abuse of the product.” Section 101(b)(2)(a). Reasonably foreseeable use/abuse includes, however, swallowing, mouthing, breaking or other children’s activities, as well as the aging of the product. Within one year after enactment, the CPSC will issue a rule providing guidance on what components will be deemed inaccessible. The Act states that merely covering the lead with non-lead paint or coatings or electroplating does not provide a sufficient barrier to lead in the substrate. For electronic devices, including those containing batteries, that the CPSC determines can not comply with the lead content prohibitions, the Act requires the CPSC to issue regulations as to what can be done to minimize the risk of exposure, if technologically feasible. The Act defines “technologically feasible,” but the terms are squishy and subject to interpretation.
Definition of Children’s Product. Children’s product is defined in Section 245 of the Act as “a consumer product designed or intended primarily for children 12 years of age or younger.” The 12-year age-limit was the preference of the Senate. The House-passed version of this Act included a lower age limit of 7 years, which was rejected.
Section 245 also provides the following factors in determining whether a consumer product is primarily intended for a child 12 years of age or younger: “1) a statement by a manufacturer about the intended use of such product, including a label on such product if such statement is reasonable; 2) whether the product is represented in its packaging, display, promotion or advertising as appropriate for use by children 12 years of age of younger; 3) whether the product is commonly recognized by consumers as being intended for use by a child 12 years of age or younger; and 4) the Age Determination Guidelines issued by Commission staff in September 2002, and any successor to such guidelines.”
2. Mandatory Third Party Testing of Children’s Products – The Act further addresses the problem of tainted imports of children’s products by requiring all manufacturers of a children’s product to have samples of those products tested by an independent assessment body for conformity with all applicable product safety rules before “importing for consumption or warehousing or distributing in commerce.” Section 102(a)(2). The Act requires the CPSC to implement a schedule for third-party testing, including requirements for “a third party conformity assessment body” that would conduct tests. The conformity assessment body must not be controlled in any way by the manufacturer; however, it can be owned or controlled in whole or in part by a government, if not subject to undue influence or preference by that government or its officials. The CPSC or an independent accrediting organization shall accredit their third-party testers and periodically audit them. After testing, the manufacturer must issue a certification that the product meets all applicable children’s product safety standards. The certificate must also include: “the date and place where the product was tested, each party’s name, full mailing address, telephone number, and contact information for the individual responsible for maintaining records of test results.” Section 102(g). The effective date for this requirement is 90 days after the enactment of the Act.
Children’s products that are not tested and certified by a third party would not be allowed to be imported or sold in the United States. Even for those products that are tested and certified, the CPSC is instructed to establish rules regarding periodic testing to ensure continued compliance.
3. Tracking Labels for All Children’s Products – Section 103 of the Act requires the manufacturers of a children’s product, both manufactured domestically and imported, to place a distinguishing mark on the product and its packaging to identify the manufacturer, production time period, and other identifying information such as batch and run number. This would help facilitate recalls and product alerts.
4. New Safety Standards for Durable Infant or Toddler Products – The Act requires the CPSC to establish safety standards for durable infant or toddler products. Under Section 104, the CPSC shall consult with representatives of consumer groups and industry, assess the effectiveness of voluntary consumer product safety standards for durable infant or toddler products, and come up with its own requirements that are either the same or tougher. The Act requires that rulemaking commence within one year of enactment of the Act.
Section 104(f)(1) defines durable infant or toddler products as a “durable product intended for use, or that may be reasonably expected to be used, by children under the age of 5 years.” Section 104(f)(2) lists a number of products included within this definition: “full-size cribs; toddler beds; high chairs, booster chairs, and hook-on chairs; bath seats; gates and other enclosures for confining a child; play yards; stationary activity centers; infant carriers; strollers; walkers; swings; bassinets and cradles.”
New Crib Standards and Danny Keysar. Section 104 is identified in the Act as the “Danny Keysar Child Product Safety Notification Act.” Danny Keysar was a 16-month-old child who was strangled to death at his daycare facility when his portable crib collapsed. The crib was still in use by the facility despite the fact that it had been recalled by the manufacturer. As a result, Congresswoman Schakowsky (D-Ill.-9) introduced the “Danny Keysar Child Product Safety Notification Act,” which was included in this broader consumer product safety legislation as Section 104. Section 104(c) specifically addresses the Danny Keysar case by making it a violation of the Consumer Product Safety Act to manufacture, sell, contract to sell or resell, lease, sublet, offer, provide for use, or otherwise place into the stream of commerce, cribs that do not meet the new safety standards, once promulgated. Section 104 makes clear that this applies to child care facilities as well as places of public accommodation, such as hotels.
Consumer Product Registration Requirement. Section 104 also requires manufacturers of durable infant or toddler products to provide consumers with postage-paid consumer registration forms; and maintain a record of names, addresses, e-mail addresses and other consumer contact information in order to facilitate recalls and safety alerts. The Act requires manufacturers to maintain the record of names for a mandatory six years after the date of manufacture of the product. The Act also requires manufacturers to permanently place manufacturer name and contact information, model name and number, and the date of manufacture on each durable infant or toddler product. The Act directs CPSC to promulgate rules relating to these requirements within one year after enactment.
5. Labeling Requirement for Advertising Toys and Games – Section 105 expands the labeling requirements for toys and games intended for children who are at least three years of age to require such labels to appear in catalogues, websites, or other advertisements where the toy or game can be purchased. This requirement applies to retailers as well, and takes effect 120 days (for websites) and 180 days (for catalogues) after enactment of the Act.
6. Mandatory Toy Safety Standards – Section 106 of the Act requires the CPSC to adopt within 180 days of enactment the voluntary consumer safety provisions for toy safety established by the American Society for Testing and Materials (ASTM), F963-07 Consumer Safety Specification on Toy Safety. After adopting the standards, Section 104 requires the CPSC to review them and decide within one year whether stricter standards are needed for toys containing magnets, toxic substances, spherical ends, cords, straps or elastics, and battery operated or hemispherically shaped objects. The Act also allows, upon proper notice, states to petition for stricter standards, which CPSC will consider based on both the impact on safety and on interstate commerce. To the extent that— at the time of enactment of this Act—state standards already exist that deal with the same risk of injury as those addressed by this Section, those state standards will remain in effect so long as the state files such requirements with the CPSC within 90 days after enactment of this Act.
7. Ban On Children’s Toys and Child Care Articles Containing Specified Phthalates – How to deal with the use of phthalates in children’s toys and child care articles was an object of contention between the House of Representatives and the Senate. Phthalates are alleged to damage reproductive development. The Senate-passed version of the Act included language restricting the use of phthalates in children’s toys and child care articles while the House-passed version did not. The compromise agreed to by both houses of Congress bans outright only three of six suspect phthalates, requiring further study and rulemaking on the other three.
Outright ban for certain phthalates used in any children’s toy or child care article. Beginning 180 days after enactment, the Act would make it unlawful “for any person to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children’s toy or child care article that contains concentrations of more than .1 percent of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP).” Section 108(a).
Interim prohibition for other phthalates used in any children’s toy that can be placed in a child’s mouth or child care article. From 180 days after the enactment of the Act until a final rule is promulgated (which could permit use), the Act would make it unlawful “for any person to manufacture for sale, offer for sale, distribute in commerce, or import into the United States any children’s toy that can be placed in a child’s mouth or child care article that contains concentrations of more than .1 percent of diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or di-n-octyl phthalate (DnOP).” Section 108(b).
Panel to study phthalates. The Act requires the CPSC to appoint a Chronic Hazard Advisory Panel to “study the effects on children’s health of all phthalates and phthalate alternatives as used in children’s toys and child care articles.” Section 108(b). The Panel is required by the Act to issue a report on its findings within two years of its appointment, and the CPSC is required to evaluate the report in order to decide whether to continue the interim prohibition discussed above. With respect to phthalate alternatives, the Act expressly provides that states can impose additional requirements so long as phthalate alternatives are not specifically regulated under the Consumer Product Safety Act. As for whether states can impose additional requirements on phthalates themselves, the Act is silent, but seemingly implicitly endorses the notion that any contrary state standards on the six phthalates specified would be preempted.
Children’s toy is defined as “a consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays.” Section 108(e)(1)(B). Child care article means a consumer product designed or intended by the manufacturer to facilitate sleep, relaxation, or the feeding of children age 3 and younger or to help such children with sucking or teething.”
II. Greater Transparency, Public Disclosure and Identification of all Entities in the Supply Chain
1. Creation of a Consumer Product Safety Database – A number of provisions in the Act are designed to give the public greater access to information about safety concerns for all consumer products, including those marketed to children. First, Section 212 of the Act requires the CPSC to create a searchable database that consumers (or attorneys) could use to get updated information about possible safety concerns relating to various products. The CPSC is responsible for creating a plan for the operation, content, maintenance and functionality of the database, and must provide this plan to Congress within 180 days of the enactment of the Act. It is then required to establish the database no later than 18 months after the date on which the plan is submitted. The Act requires the database to include: (1) reports of harm it receives related to the use of consumer products; (2) information regarding any voluntary corrective actions taken by manufacturers of which the Commission has notice; and (3) any comments from the manufacturer addressing the reports of harm. Also, the Act requires the database to be sortable and accessible by (1) the date on which information is submitted; (2) the name of the consumer product; (3) the model name; and (4) the manufacturer or private labeler’s name. Although the Commission requires the reporter of an incident to provide his or her contact information, unless express written consent is provided, the contact information cannot be disclosed to the manufacturer.
Redaction of confidential information. If the manufacturer deems any information to be confidential, it can request the CPSC to redact the information before it is placed in the database. Section 212(c)(2)(c). If the CPSC refuses, the manufacturer may bring an action in the district court of the United States in which it resides, has its principal place of business or in the District of Columbia, to seek removal of the information from the database.
2. Identification of Supply Chain – Under Section 215 of the Act, every importer, retailer, or distributor of a consumer product shall identify the manufacturer by name, address or other identifying information, upon request of the CPSC. Further, every manufacturer shall identify, upon request of the CPSC, each retailer or distributor to which the manufacturer directly supplied a consumer product, as well as each subcontractor involved in production or from which the manufacturer obtained a component.
III. Increased Penalties, Restrictions and Enforcement of Existing Laws, Including by Members of the Public Via Whistleblower Protections and State Attorneys General
The Act has a number of restrictions in place to help enforce both its provisions and the provisions of existing consumer protection laws.
Restriction on Sale or Import of Recalled Products – The Act expands the prohibition on manufacturing for sale, offering for sale, distributing in commerce, or importing into the United States certain products under the Consumer Product Safety Act. Under 15 U.S.C. § 2068, it is unlawful to do this for products that are either (1) not in conformity with a consumer product safety standard or (2) have been declared a banned hazardous product (as defined under 15 U.S.C. § 2057). The Act expands the products prohibited from sale to include (1) a product not in conformity with either a consumer product safety rule under this Act or any similar rule, regulation, standard, or ban under any other Act enforced by the CPSC; (2) a product that is subject to a voluntary corrective action taken by the manufacturer in consultation with the CPSC; (3) a product that is subject to an order issued under Section 12 of the Consumer Product Safety Act (related to imminent hazards) or Section 15 (related to notice and recall of products); (4) a banned hazardous substance as defined under the Federal Hazardous Substances Act (15 U.S.C. § 1261(q(1)).
Restriction on Export of Recalled Products – Under 15 USC § 2067, the restrictions of the Consumer Product Safety Act do not apply to any product exported from the United States. Section 216(a)(15) of the Act modifies this to prohibit the export of a product that is (1) subject to an order issued under Section 12 of the Consumer Product Safety Act (related to imminent hazards) or Section 15 (related to notice and recall of products), or is a banned hazardous substance as defined under the Federal Hazardous Substances Act (15 U.S.C. § 1261(q(1)); or (2) is subject to a voluntary corrective action taken by the manufacturer in consultation with the CPSC. Additionally, Section 221 allows the CPSC to prohibit the export of any consumer product that is not in conformity with an applicable consumer product safety rule, unless the importing country accepts importation of such product.
Increased Penalties – It also increases the civil penalties under the Consumer Product Safety Act (15 U.S.C. § 2069(a)(1)). Under Section 217 of the Act, the maximum civil penalty increases to $100,000 per violation (up from the current $8,000 cap per violation) with a cap at $15 million (up from the current $1.825 million cap). It also creates a criminal penalty of not more than five years in prison for a knowing and willful violation of consumer product safety laws. It also gives the CPSC the authority to include the forfeiture of assets associated with the violations as part of a criminal penalty. Within one year of enactment of the Act, CPSC must issue a final regulation providing its interpretation of the penalty factors.
Two new enforcement provisions relate to members of the public and to state attorneys general. First, the Act forbids an employer from discharging or otherwise discriminating against an employee if that employee provides information regarding a violation of the Act or testifies or participates at a government proceeding regarding a violation of the Act. The wronged employee can file a complaint with the Secretary of Labor and the burden on the employer is to show by clear and convincing evidence that the employee was not fired as a retaliatory measure. Relief includes back pay, compensatory damages, and attorneys’ fees.
Second, state attorneys general may also takes steps to obtain injunctive relief when they have reason to believe a violation of any consumer product safety rule, regulation, standard, certification or labeling requirement has occurred. The CPSC must receive notice and has the right to intervene. With the exception of whistleblower claims, however, no separate state attorney general’s action may be initiated if the same alleged violation is already the subject of a pending civil or criminal action by the United States under the Act.
IV. Enhanced Recall Authority
Under the Consumer Product Safety Act, the CPSC already has the authority to require the manufacturer or any distributor or retailer of a product distributed in commerce that presents a “substantial product hazard” to give (1) public notice; and after doing so, (2) repair, replace or refund the product. 15 USC § 2064. Substantial product hazard is defined as a failure to comply with a consumer product safety rule or a product defect that causes a substantial risk of injury to the public. 15 USC § 2064(a).
Recall Authority Expanded to Include Any Rule Under Any Act Enforced by the CPSC – Section 214 of the Act enhances and expands this recall authority. It expands the definition of “failure to comply” to include not just the failure to comply with a consumer product safety rule, but also with any rule either under this Act or any similar rule, regulation, standard or ban under any other Act enforced by the CPSC. Section 214(a)(1). It also expands the products covered to include not just consumer products but any other “product or substance over which the [CPSC] has jurisdiction,” other than motor vehicle equipment. Section 214(a)(2).
Recall Authority Expanded to Include Imminently Hazardous Consumer Products – Section 214 of the Act also provides the CPSC with the authority to recall not just products that are a substantial product hazard, but also “imminently hazardous consumer products.” Section 214(a)(3). As defined in 15 § USC 2061(a), an imminently hazardous consumer product is one that “presents imminent and unreasonable risk of death, serious illness, or severe personal injury.”
Section 214 also provides the CPSC with the ability to require manufacturers to cease distribution of the product. The CPSC can also require manufacturers to notify appropriate state and local public health officials.
Requirements for Recall Notices – Section 214(i) of the Act requires the CPSC to establish guidelines for what is to be included in recall notices. The Act states that notices should include: (1) a description of the product, including model number of stock keeping unit (“SKU”); (2) a description of the action being taken; (3) the number of units of the product with respect to the action being taken; (4) a description of the substantial product hazard; (5) an identification of the manufacturer and significant retailers; (6) the dates between which the product were sold; (7) the number and description of any injuries or deaths associated with the product; and (8) a description of any remedy available.
V. Preemption of Federal, State, or Local Law or Any Cause of Action
Section 231 of the Act addresses preemption concerns. First, it states that certain specified preemption provisions from the Consumer Product Safety Act, Federal Hazardous Substances Act, Flammable Fabrics Act, and Poison Prevention Packaging Act of 1970 may not be altered by Agency rules or policy statements. Second, it states that the CPSC “may not construe any such Act as preempting any cause of action under State or local common law or State statutory law regarding damage claims.” Section 231(a).
Preservation of Certain State Law – Section 231 also states that “nothing in this Act or the Federal Hazardous Substances Act shall be construed to preempt or otherwise affect any warning requirement relating to consumer products or substances that is established pursuant to State law that was in effect on August 31, 2003.” Section 231(b).
VI. All-Terrain Vehicle Standards
Mandatory Standard for Four Wheel All-Terrain Vehicles – Under Section 232 of the Act, the CPSC is instructed to make mandatory the American National Standard for Four Wheel All-Terrain Vehicle Equipment Configuration and Performance Requirements developed by the Specialty Vehicle Institute of America (American National Standard ANSI/SVIA – 1-2007). Section 232(a). Once the standard takes effect, a manufacturer or distributor shall not import into or distribute in commerce in the United States “any new assembled or unassembled” all-terrain vehicle (“ATV”) unless (1) the ATV complies with each applicable provision of the standard; (2) the ATV is subject to an “ATV action plan,” approved by the CPSC, which describes actions taken to promote rider safety; (3) the manufacturer or distributor is in compliance with all provisions of the action plan. Section 232(a)(2).
Ban on Three Wheel All-Terrain Vehicles – The Act bans Three-Wheel ATVs from being imported or distributed in commerce into the United States until such time as a mandatory standard is promulgated.
Addressing the Use of All-Terrain Vehicles by Youth – When promulgating its All-Terrain Vehicle rule, the CPSC may categorize ATVs according to (1) weight; (2) maximum speed; (3) velocity; (4) the age of children expected to operate the ATV; and (5) the average weight of children expected to operate the ATV. Section 232(d)(2).
VII. Increased Resources for the Consumer Product Safety Commission
The CPSC is the key federal agency regulating the safety of consumer products manufactured and sold in the United States, including those imported from overseas. It has faced numerous criticisms that, because of reduced personnel and static funding levels, it has been unable to fulfill its mission. In response to these complaints, the Act increases the CPSC’s funding and allocates a specific portion to increased personnel, especially at our nation’s ports. First, the Act increases funding levels for the CPSC over the next seven years, starting at $118.5 million in Fiscal Year 2010 and increasing to $136.4 million by Fiscal Year 2014. In addition, the Act would increase full-time staffing levels from the current 420 to at least 500 by 2013, including more agents at the ports of entry into the United States.
Now that this much-anticipated Act is Law, Reed Smith’s Regulatory attorneys, Product Liability attorneys and Import Safety Team members will continue to monitor CPSC’s implementation of the Act through regulation, and will update Reed Smith clients accordingly.