The Product Safety Report©

October, 2007
Law Offices of David H. Baker LLC 

Why You Never Want to See How Sausage, or Legislation is Made! 

2007 will, without question, go down in history as the busiest year in the CPSC’s thirty five year existence. Yes, there was the flurry of litigation in the late 1970’s (when CPSC lost most of its cases), and the very busy Ann Brown era, when penalties soared to $1.5 million. However, never before has the CPSC been front page news in the New York Times, the Washington Post, the Chicago Tribune and the Wall Street Journal. I even got a call from a Rolling Stone reporter last week! All of the Presidential candidates have positions on the CPSC (some can not properly say it, but they have positions.) Moreover, there have been thirteen legislative hearings on product safety so far this year and more are scheduled. And there are better than ten bills introduced in the House and Senate on product safety issues

What is likely to happen in these circumstances? In my opinion, the most likely vehicle for a CPSC bill is Senator Pryor’s (D-AR) CPSC Reform Act of 2007, S. 2045, introduced on September 12, 2007. Pryor serves as Chair of the Senate Commerce Committee Subcommittee on Consumer Affairs, Insurance and Automotive Safety, which has jurisdiction over the CPSC . Moreover, the bill is co-sponsored by Commerce Committee Chair, Daniel Inouye (D-HI). Hence, it will easily pass out of Subcommittee and the full Committee, if they decide to move the bill along. Senator Pyror held a hearing on the bill on October 4, 2007 and seems intent on moving the bill along. Whether the Majority Leader, Harry Reid (D-NV), will show any interest in a product safety bill is another question. There are bigger issues out there such as the budget, the war, the sub prime market, etc.

While the current version of the bill is 52 pages in length and has 25 provisions, it is likely that if a bill passes in this session (2007), which has only 20 plus legislative days left, it will contain at best, a few of the following provisions:

Section 3: Reauthorization of the Agency. 

The Senate bill authorizes an increase in the CPSC’s budget from approximately $69 million in fiscal 2007 to $80 million in fiscal 2009, $88 million in 2010 and so on. In theory, the bill increases the agency’s budget by about 10% each year through 2015. This reauthorization sounds terrific, but unless the Congress appropriates the money in the 2009 budget and beyond, these are empty words. I believe that it is likely that Congress will authorize more money for the CPSC for 2009 and it is likely that the CPSC will get some more money for fiscal 2009. However, in my opinion, it may not be as much as $80 million, and there probably will not be 10% increases each year.

Section 4: Personnel. 

The Senate bill directs the CPSC to increase its fulltime personnel from the current 401 FTEs to 500 FTEs by October 1, 2013. In my opinion, this provision is fluff and is unlikely to be enacted, and if enacted, it is unlikely to be followed. And 2013 is a long time away – long enough for the provision to be amended, if it is enacted.

Section 5: Full Commission. 

The Senate bill requires the CPSC to have five commissioners. This will not happen. The CPSC is an agency that already has too many chiefs, and not enough Indians.

This section also would extend the CPSC quorum for an additional nine months, if a third CPSC commissioner is not confirmed by the date of enactment of the bill. The quorum runs out in late January of 2008, so if this provision is enacted this year, it would extend the quorum to the summer of 2008. I think that if a bill is enacted in 2007, it will include a provision extending the quorum.

Section 8: Rulemaking Procedures. 

The Senate bill would give the CPSC the option of skipping the Advance Notice of Proposed Rulemaking (“ANPR”) stage. This is a good idea, but I suspect that it will require more study and more discussion in a public hearing. Normally, Congress does not willy nilly amend rulemaking procedures, particularly procedures that have been in place over thirty years. I don’t expect to see this provision in a final bill this year.

Section 10: Third Party Certification. 

The Senate Bill proposes that in order to enter children’s products from abroad, they must pass a third party certification. If the toy industry supports this provision, it will make it. Currently, the toy industry is in agreement with the concept, but is still studying the specific language. I expect that some form of third party certification will be in the final bill.

Section 17: Penalties. 

This Senate bill proposes to have a cap of $100 million on civil penalties. This is not a realistic number. The real world number is probably a maximum of $20 million, which is what I suspect that Pryor is really looking for. Other bills offer $10 million to $20 million. If a CPSC bill passes in 2007, it will most certainly have a provision that increases civil penalties to at least $10 million.

There are also provisions in this section which would permit a knowing and willful violation of the CPSA to be used to sentence an officer or director for up to five years in prison, and to allow for civil forfeiture of profits (a Department of Justice favorite.) It is highly unlikely that either of these provisions will survive, in my opinion. However, if they do, think twice about signing your next Full Report!

Section 23: Lead. 

The Senate bill would increase the lead in surface coatings standard from 600 parts per million to 90 parts per million. Some tightening of this standard is almost certain.

No one that I have spoken to on the Hill really understands this issue, or the role that exposure or risk assessment plays in this debate. However, they are all hell bent on tightening things up. If a bill passes in 2007 or 2008, it will most certainly include a more restrictive lead in surface coatings provision. It may also include a total lead standard for children’s products (which would be a first). Like sausage, you do not want to watch how this one is made.

Section 25: Furniture Rulemaking. 

The Senate bill contains a provision directing that the CPSC complete this rulemaking, which began back when I had hair – about twelve years ago. It is unlikely to pass. There are a host of industries that would love to get their pet issues added to the bill. It is unlikely that any of these “Section 26” provisions will be included in a bill passed in 2007 (Section 26 for additional provisions that are floating around the Hill, hoping to be added to this bill, or the expected House bill.)

In summary, a 2007 bill will include more money, an extension of the quorum, increased civil penalties, a toy certification provision, and most certainly a lead provision.

A 2008 bill, which is subject to more public hearings and testimony, may well include several other provisions, including revising the rulemaking procedures, changing the disclosure requirements under existing Section 6(b) of the CPSA and possibly some industry specific provisions.

The legislative process is a strange one, and things change rapidly. We will report again once the House version of a product safety bill is introduced.

David H. Baker October 6, 2007