Tell CPSC What You Think

One of the very positive hallmarks of the new leadership at the CPSC is a desire to hear from all interested stakeholders on how to more effectively push forward the agency’s safety mission. The agency has offered several opportunities for input and for those of us who share that goal, these opportunities should not be ignored.

First, the agency will be conducting a workshop on ways to improve the recall process, including the effectiveness of recalls.  Recall effectiveness is a perennial topic of conversation at the agency so it is gratifying that the agency is again looking at this topic, but hopefully from a new perspective.  Both as a Commissioner and now, in private law practice, I often hear complaints about the opaqueness of the process. Participation in the workshop offers an opportunity to give real suggestions on how to make the recall process work better.  The workshop will be held on July 26, 2017 at the agency headquarters in Bethesda.  Those interested in participating must sign up with the agency no later than July 3.  Here is more information about the workshop.

Second, the agency is requesting comments on ways to reduce the regulatory burden imposed by agency rules in ways that do not diminish safety.  This effort is especially welcome since many of the regulations issued by the agency over the past eight years did not consider ways to accomplish safety goals in less burdensome ways.  When Congress told the agency to try to find ways to reduce the burden of testing, the agency went through a fantasy effort to comply and, not surprisingly, came up with very little.  Indeed, about the best it could do was exempt from testing toys made entirely from untreated wood from the trunks of trees (but not the branches—who knows what could be in branches!).  (See here.)

Reducing unnecessary regulatory burden is important since this engenders respect and support for the agency. Rules that are outdated, overly complex, or impose requirements without regard to real and measurable safety results should be identified and either changed or repealed.  The agency’s effort to collect information on burdens imposed by its regulations is a welcome first step in this process.

 

Steps Forward; Steps Back

Now that August is over and Labor Day is but a memory, it is time to focus on how the CPSC spent the closing days of summer.  On a positive note, the agency was able to push forward helpful initiatives that ease compliance costs without diluting safety.  Then they had to put a damper on this positive glow with threats of resurrecting the discredited and flawed proposals dealing with voluntary recalls and public information (the §6(b) rule).

Forward Steps

The recently published NPR interpreting the fireworks rule is one of those steps forward.  The fireworks regulation has been on the books for several decades and is sorely in need of updating.  Among many other things, the regulation is designed to address overloaded fireworks but does so in a less-than-straight-forward manner.  It bans fireworks “intended to produce audible effects” if those “audible effects” are produced by using more than 2 grains of pyrotechnic composition.  Rather than measure the pyrotechnic materials in the fireworks device to determine compliance, for years the staff has listened for the intensity of the sound produced by the device to determine if it was intended to produce audible effects or whether the sound produced was merely incidental to the operation of the device.  The staff’s determination as to how loud the device was, based on what a staffer heard, was hardly either objective or measurable and has resulted in compliance actions that have been criticized for lack of objectivity.

The American Pyrotechnic Association has a standard that actually measures the presence of materials that may be used to produce an audible effect.  The APA standard has been adopted by the Department of Transportation regulations that deal with the shipment of fireworks.  The proposal, which has been pushed by Commissioners Robinson and Mohorovic in particular, would adopt the APA standard as the testing measure for the CPSC as well. An objective standard would add clarity both for the staff who must make compliance decisions, and the industry which can stop worrying that compliance is dependent on a staffer’s ear.

Another example of a “step forward” is a proposal determining that four types of plastics used extensively in children’s products do not need to be tested for the presence of phthalates.  This proposal would put into action what product manufacturers have been telling the agency for some time—phthalates are not added to these substances and so testing for them both is unnecessary from the standpoint of safety and is costly and burdensome.  This proposal, which has been a long time in the making, compliments the flexibility found in the 2009 statement of policy on phthalates testing and, hopefully, should provide some relief to a number of manufacturers and importers.

Backward Steps

However, the Commissioners could not end the summer on a positive note.  Instead, on the last day of August, the Commissioners met to talk about their regulatory priorities for the upcoming fiscal year.  Observers of the agency are well aware of the controversy engendered by the agency proposal to significantly change the way voluntary recalls are negotiated and agreed to.  Similarly the proposed changes to §6(b) dealing with how information about individual products is made public would distort the statute and surely subject the agency to needless litigation. I have discussed the problems with these proposals in detail, and the Congress has told the agency to cease and desist.

Chairman Kaye has repeatedly expressed his lack of interest in moving forward with these two troublesome proposals.  However, each time he has been given the opportunity to vote to remove them from the agency’s regulatory priorities list, he has refused to do that.  At the recent priorities hearing he was given yet another chance to do that and he did not step up.  Instead, Commissioner Adler, a staunch foe of §6(b) and a supporter of the voluntary recall rule, announced that he would be trying to draft a “compromise” to offer at some unknown point in the future (and not specifying if that would be before or after the elections).  For those who thought that perhaps these two ill-conceived proposals were behind you, do not be so sure.  Commissioner Adler’s gambit may provide the excuse 3 Commissioners need to defy logic, good public policy and the Congress to promulgate these divisive and poorly thought-through rules.

Saying It’s a Recall Doesn’t Make It So

With the CPSC’s blessing, a large furniture company recently sent out wall anchors for its children’s dressers to address a tipping hazard and the accompanying CPSC press release did not refer to the activity as a recall. Subsequently a child was killed when one of the dressers fell. Chaffing under criticism from its decision to allow the company to do a “non-recall recall”, the powers-that-be at the CPSC have now apparently decided that every corrective action or other announcement about a product must be labeled a “recall.”  Commissioner Buerkle has pointed out why this rigid adherence to labels is bad policy.  And this past week we have seen why her concerns are well-founded.

The issue involves the agency’s investigation of flooring made in China and sold by Lumber Liquidators, which allegedly emitted dangerous levels of formaldehyde. After the issue was described in a 60 Minutes segment in March, 2015, the company responded by agreeing not to sell the Chinese flooring and to test the flooring of those consumers who so requested. After over a year of extensive study, testing and investigation by several different agencies, no formaldehyde emissions above government guidelines were found.

Rather than announce this good news and put consumers’ minds at ease, last week the CPSC instead chose to cast the announcement in terms of a “recall.”  The “recall” that the agency announced is a first ever “recall to test”, with the company agreeing to continue what it has been doing from the beginning–that is, test for formaldehyde emissions the flooring of consumers who request that.  No promises of a refund, a repair or return of the flooring are made (although the release does hint that a consumer maybe, possibly could get some replacement flooring under undescribed circumstances at the company’s discretion). Buried in the press release is the admonition that consumers are not to pull up flooring they may be concerned about because that action could be dangerous.

I saw many press stories reporting that the investigation did not find a problem with the company’s product.  I did not see stories that discussed the fact that the company was doing a “recall” (although perhaps I may have missed some). This is a good thing since, by trying to unnaturally shoehorn the announcement of the investigation results into the concept of a recall, the release is both confusing and misleading to consumers.   And it belies the agency’s oft-stated notion that the press will ignore releases that do not include “recall” in the headline. It is an example of what happens when, like a myrmidon, the agency insists on rigid adherence to rules without concern as to appropriateness under the circumstances.  As Commissioner Buerkle notes, the CPSC should never say never.

Such a Tiny Product; Such a Large Issue

On a recent overseas trip, in one of the trendiest shops in one of the trendiest Western European capitals, I saw a display of tiny spherical rare earth magnets (SREM’s) with signs extolling the coolness of the product.  I almost bought up the entire display but thought about the possibility, when I got back to the States, of CPSC investigators confiscating the whole batch and hauling me off as an importer of deadly banned products.  If only I were kidding.

Remember that, here in the U.S., SREM’s were once a very popular product, intended as an adult desk toy or for making remarkable sculptures and art works.  However, if children swallowed the tiny magnets, they could cause serious internal injury.  Therefore, the CPSC set out to force the product off the market–through a series of recalls aimed at individual importers together with strong pressure on retailers not to sell the product. The agency also issued a rule banning the sale of tiny powerful magnets when used as a manipulative.  Only one company—little Zen Magnets in Boulder, CO, whose CEO is not yet 30 years old—refused to knuckle under and decided to fight the government.

This past weekend, in a battle of David v. Goliath proportions, Zen finally got a win.  Here’s what happened.  When Zen refused to voluntarily recall the SREM’s he was importing and selling, the CPSC filed a lawsuit to force a mandatory recall.  A trial was held before an Administrative Law Judge (ALJ) to determine if the magnets, when sold, were defective and constituted a substantial product hazard and therefore must be recalled. After a long trial and much deliberation, the ALJ found what most of us, except the CPSC, already knew:  that ingesting SREM’s can create a risk of injury but that proper use of the magnets pose no threat and that, when sold with appropriate warnings and proper age recommendations, the magnets do not pose a substantial product hazard.  The ALJ rejected the agency’s argument that warnings cannot be effective because the spheres can become separated.  He also rejected the agency argument that the product was so inherently dangerous to children that proper use by adults must give way.  Significantly, this is the first judge to examine the underlying theory of the agency’s actions forcing recalls and he found the agency’s proof to be wanting.

Even though Zen won this battle, it has not won the war. The agency lawyers now have ten days to appeal the ALJ’s decision.  That appeal will be heard and decided by the five members of the CPSC—the same group who voted to sue Zen, who voted to issue the related rule banning the product, and several of whom have made public statements that suggest where they will come out on the appeal.  In other words, Zen doesn’t stand a chance before the Commission.  The Commission’s decision can then be appealed to the appropriate Court of Appeals.   If Zen has the resources and is scrappy enough to continue the fight, it will be a long one indeed.

Solving At Least One Magnet Issue

On a related matter, the Commission has stepped up to address a flaw in its rules governing trials before ALJ’s.  When the agency was trying to force the recall of SREM’s sold under the name “Buckyballs”, and when the company had the “hutzpah” to say “no” to the agency’s demand that it recall its magnet product, the agency voted to sue Buckyballs as well.  After the Commissioners voted to bring the action against the company, the agency staff took it upon itself to expand the complaint to sue the CEO of the company in his personal capacity.  While this case was ultimately settled, the settlement did not address whether the staff acted properly in expanding the complaint without an affirmative vote of the Commission.

The agency is currently updating its rules of practice for adjudicative proceedings and those proposed rules are now out for public comment.  Commissioner Mohorovic was able to get into the proposal – unanimously – an amendment that expressly requires the ALJ to refer to the Commission “any proposed amendment [that] would have the effect of adding or removing any person as a respondent to the complaint or adding or removing any count.” Just in case an ALJ tried to reason in such a way that an amendment that should come to the Commission didn’t actually add a party (by, say, reasoning that the CEO of a company is de facto on the complaint already, so it’s fine to add him by name) and thus could be done without Commission approval, the proposal also creates an interlocutory appeal right for any ruling on an amendment made without a Commission decision.

Admittedly, this language is overly broad since one would not want to capture situations where staff needs to add a DBA, for instance, nor should the agency give an interlocutory appeal for amendments that clearly are within staff’s administrative authority, but, for the handful of times in a decade that the agency actually litigates something, the burden of work from overbreadth seems to be insignificant compared to the risk to Commission authority from being too narrow. The staff’s action with respect to the Buckyballs situation demonstrates the need for this kind of correction.  Since the proposed amendments make a number of other changes to the adjudicative procedures, they should be carefully reviewed and comments provided the agency.

The proposed changes to the agency’s adjudicative proceedings are now out for public comment.  Those who practice before the agency and other interested parties should read them carefully and take the time to comment.  As we have seen from the Zen case, this stuff matters.

Killer Coffee Mugs?! Really?!

Did anyone else notice CPSC’s recall last week of ceramic mugs?  The agency is concerned about 4400 mugs with hairline cracks.  The hazard is not that they break and cut the user, or that there may be sanitary issues with germs being trapped in those cracks, but that hot liquids might seep through the cracks and cause a burn—not that any burns have been reported.

I am a potter.  I have a pottery studio and on most weekends you can find me at my pottery wheel.  But I am not a very good potter and I have made my share of ceramic mugs with hairline cracks.  The problem comes about when a pot that is not fully dried is put into the kiln or when the kiln temperature is either too low or too high for the type of clay and glaze being used.  And although, in those circumstances, it is possible to get small cracks in the surface, it is not possible for liquid to quickly flow out through those cracks. As the agency says in its press release, liquids can seep through, and by the time they get to the outer wall, it is just not possible for those liquids to be so hot as to cause a burn.  An annoying moisture ring on your table, yes, but a burn, no.

This is another example of the agency conflating product quality issues with product safety issues.  In this case, presumably the manufacturer reported the issue in an abundance of caution, probably under the agency’s Fast Track program. It used to be that not every report resulted in a recall and that the agency compliance staff was encouraged to exercise judgment and common sense in determining whether a recall was warranted.  But the position of Director of Compliance has gone unfilled for over three years so it is not surprising that leadership direction to the staff is lacking and staff may not feel empowered to make the sensible judgment calls without risking criticism.

As I have written before, when the agency turns a quality issue into a safety issue, it is wandering way outside its mandate.  Unfortunately, the agency has generated such confusion—and fear–in the regulated community with its enforcement policies that companies feel compelled to report things like mugs with hairline cracks.  That the agency compounds the problem by agreeing to a recall in such a case means that the definition of a safety hazard is totally unpredictable.  Apparently a hazard is whatever the agency says it is. Objective indicators, such as the existence of injuries, have no place in that calculation, replaced instead by speculative conjecture.

It is not clear how consumer safety is furthered by this result.  Perhaps it is time to change the agency’s name from the Product Safety Commission to the Product Quality Assurance Commission. It seems as if that is what the agency is trying to do.

If the Public Doesn’t Buy it, Keep Selling it Anyway

Today, the CPSC is reannouncing a recall because the original announcement garnered such a low response rate—under one percent.  Today’s action and the original recall – done in May, 2014—illustrate how the agency overuses and misuses the recall system.

Here’s the background.  In May, 2014, the agency announced a recall of portable adult bed handles used to assist getting in and out of bed.  According to the agency release, the bed handles could shift and create a gap with the mattress; three individuals in adult care facilities became entrapped and died in the gap between the mattress and the handle.  The agency is concerned about 113,000 bed handles manufactured between 1994 and 2007.  The remedy that the agency proposed is for those who have the bed handles to contact the company to get a set of straps (and 3 pages of instructions) to use to hold the handles in place.  And, yes, did I mention that they also get a sticker to put on the handle to remind them to use the straps?

The agency has taken a business-as-usual, cookie-cutter approach to a problem that needs more creative thinking to solve.  The home health care and adult care industries have traditionally not been ones that have had to deal with the CPSC. And while greater availability of products in the general marketplace makes for greater responsibility on the part of providers, safety regulators also have a role to play in reaching out to those it newly seeks to regulate.  Efforts to craft a safety standard for this product have now been over two years in the making, so writing a standard apparently is not necessarily an easy undertaking.  In the meantime efforts to encourage an industry safety campaign to educate caregivers—perhaps even giving out safety straps where needed–could go a long way to addressing the risks the agency has identified. But up to now the agency has been absent on that front. [Commission Adler and I will be on a program before the home health care industry next month addressing some of these issues.]  My point is that such an educational program would reach more caregivers in a more effective way than the 2014 press release and today’s reannouncement.  Yet, the CPSC is wedded to the notion that only a recall and press release will suffice, in spite of evidence to the contrary.

The recall is trying to reach products that are quite old.  The newest bed handles subject to the recall have been in the market for at least eight years and who knows how many are still being used.  The remedy that is proposed also appears to be somewhat hard to accomplish and that may also explain why so few people have responded. The statute states that a recall remedy shall be a “repair”, a “replacement”, or a “refund”; it does not say a “re-jiggering.”  Yet, that is what this feels like.

The CPSC has overused the recall device to the point that even when the agency yells, often people don’t listen.  It has underused its ability to take on safety campaigns, either solely or in cooperation with other allies who could help it leverage its resources and broaden its reach.  That is too bad.

Shihan vs Goliath, Addendum

It is nice to know that folks out there read what I write.  When I started this blog I really wanted to have a conversation with people who are impacted by the actions of the CPSC, both positively and otherwise.  In response to my last blog post, I got a response from Shihan Qu, among others, and I thought I would share his comments.

Shihan takes issue with my notion that the magnets rule applies only to magnet sets that are intended to be used as adult desk toys and manipulatives.  He reminds me that the final rule blew a hole through this interpretation when the Commission added the phrase “commonly used” to the definition of magnet set.  The definition states “magnets sets are aggregations of separable magnetic objects that are marketed or commonly used as a manipulative or construction item.”  By expanding the definition this way, all powerful small magnet spheres may well end up within this definition since it is the end user, not the manufacturer, who determines whether the product is regulated or not.  One problem is that US based industrial magnet companies who never considered themselves within the definition may well be in for a nasty surprise if their products fall into the hands of the wrong user.

In response to my observation that magnets are easily available for sale online, Shihan responds, “Indeed you can still purchase magnet spheres easily by searching “neocube” or “buckyball” online. The rest of the companies are based in China, and are not easily targeted by the CPSC like we are. As long as there is demand, there will continue to be suppliers who will provide them. What can the CPSC do about them, if anything?”

Finally, I again emphasize that, in its latest action, the CPSC has targeted Mr. Qu personally, as it did when it went after Craig Zucker, in his individual capacity, in the Buckyballs matter.  It seems that the agency is really prickly when it comes to young entrepreneurs who still think that they can challenge the government.  Oh, when will they grow up?!

However, for those who are not willing to accept the notion that the government is always right, this is a troubling development.  And for CPSC attorneys who represent small companies, best let your clients know that, apparently if you want to fight the CPSC, be prepared to put your entire bank account on the line.

Shihan vs Goliath

As the saga of the magnets ban continues to unfold, last week another chapter was added when the CPSC brought yet another action against Zen Magnets, the one company that has refused the CPSC’s demand to do a recall.  But this time the agency sued not only the company but also its young founder, Shihan Qu, in his personal capacity.  The CPSC alleges that Zen purchased, and then illegally resold, the inventory of a competitor, Magnicube, that was negotiating a recall with the CPSC.

The law is pretty clear—it prohibits the sale of a product which a manufacturer (including an importer) has recalled.  However, Mr. Qu argues forcefully in the attached newsletter that the products were totally fungible, one magnet being indistinguishable from another, and it was still legal for him to sell magnets identical to those sold by his competitor.  Mr. Qu argues that Magnicube could have sent its remaining inventory back to the factory in China to be comingled with other identical magnets and then shipped to Zen–a more complex transaction but achieving the same result.

In raising this latest action by the federal government against tiny Zen Magnets, it is not my purpose to argue the merits of the case being brought.  Instead, I raise it because, to me, it poses questions of proportionality and discretion. I have repeatedly expressed my concerns about the agency’s troubling willingness to disregard fair process in an “ends justifies means” mindset, at least with respect to this product.   This latest action seems to smack of a vendetta against the one company that did not give in to the agency’s demands, especially since the issue of whether Zen’s magnets should be recalled is well into the latter stages of litigation and, presumably, will be resolved soon.

The government is no doubt arguing that its latest action is needed to keep products it sincerely believes are unsafe out of the hands of consumers.  However, as noted above, the exact same magnets were easily available to Zen from China at the time so the agency’s action would not accomplish this purpose.   Further, with a ban on prospective sales of these products now going into effect (unless it is overturned by judicial review at some point down the road), consumers seem to be protected.

Recalls—the remedy the agency was originally ostensibly seeking from Zen—have been totally ineffectual in getting this product out of consumers’ hands. (It seems consumers like the product and do not want to hand it over, even for money.)  And remember, in spite of the CPSC’s rule banning magnet sets sold as adult desk toys, it is possible to go online to buy sets of magnets, like those at issue here.  I did so this morning.  As long as they are not advertised as having entertainment value, they can be sold.

I wonder whether this latest action, rather than making the government appear strong, makes it appear vindictive and petty, given the force the federal government can bring against a tiny company that dares to challenge it.  I wonder whether the government could not have advanced whatever safety purpose it had in a less Goliath-like way. I am curious what you think.

Note to CPSC: You Really Dropped a Stitch Here!

I am a knitter.  Knitting teaches patience and is a great way to pass time on an airplane.  While traveling, I missed a recent CPSC recall and am thankful to my friend Lenore Skenazy, the author of the blog Free Range Kids, for bringing to my attention important information about a silent killer—yarn.  Since she said it better than I could, the following is from her blog post:

Gracious me! This brand of yarn can unravel! Have you ever heard of such a thing? It’s just too scary! How irresponsible can a yarn maker be? No wonder the Consumer Product Safety Commission just issued this dire warning:

Name of Product: Bernat Tizzy Yarn

Hazard: In finished knit or crochet items, the yarn can unravel or snag and form a loop, posing an entanglement hazard to young children.

Incidents/Injuries: Bernat has received two reports of children becoming entangled from unraveling or snagging yarn blankets. No injuries have been reported.

Remedy: Consumers should immediately stop using the yarn or finished yarn projects, keep them out of the reach of young children, and contact Bernat for a full refund.

Remember! Children are only safe near items that can never unravel or make a loop. Kindly avoid all necklaces, ponytails, jumbo rubber bands, snakes, shoelaces, licorice whips, octopi, thread, phone cords, scarves, kites, jump ropes, taffy (long form), fishing line, string cheese, and, of course, marionettes. – L.

What is the agency thinking?  While unraveling yarn may be a quality problem (for the company to address with unhappy customers), turning a quality problem into a safety issue takes the agency way outside its mandate.

In an earlier post I addressed my concern that silly recalls can serve to make consumers stop listening.  This certainly qualifies as a silly recall. Consumer safety is not advanced by such a result.  However, if the agency persists in pushing its mandate so that product quality problems are viewed as safety issues warranting a recall, what unravels is any predictable definition of a safety hazard and then safety becomes what the agency says it is at any given time. Now that is a snag folks should be worried about.

Shopping the Global E-Mall, Round 2

In my last post, I discussed the growing phenomenon of e-commerce sales directly to consumers from foreign (Chinese) manufacturers. My concern is that the regulatory stance of the CPSC—asserting that a foreign manufacturer is legally responsible for compliance with all U.S. safety standards when a U.S. consumer buys a product directly from that manufacturer—is both naïve and unenforceable.

Therefore, I was interested to see the announcement last week from the CPSC that it has entered into a voluntary agreement with Alibaba, the Chinese e-commerce direct sales company, to work with the agency to try to monitor its platforms for dangerous products.  Kudos to the agency for negotiating this agreement, as modest as it is.

According to press reports, Alibaba handles more e-commerce business than Amazon.com and eBay Inc. combined and, as a platform for third parties, it controls as much as 80 per cent of the Chinese e-commerce business.  Obviously, Alibaba can be a potent ally in policing the marketplace for unsafe products.

Looking at the reported details of the agreement, it is not clear whether it will prove to advance consumer safety in the global e-mall or merely serve as a fig leaf to which the parties can point to show they are doing something.  Alibaba has apparently agreed to block sales of up to 15 recalled products upon request from the CPSC.  Since a substantial number of the over-400 recalls the CPSC does each year are of products from China, there should be no problem finding candidates for this list.  All concede that this agreement is not enforceable. It remains to be seen how aggressive Alibaba will be carrying it out over time.

More interesting is the company’s agreement to make available information about safety requirements to importers into the United States.  U.S. safety requirements are not easily understood, especially those issued since 2009 in response to the CPSIA—see the labyrinthine regulations dealing with testing and certification for examples. Any way to get information to those who are honestly trying to comply can do nothing but help.

Whether this agreement is a modest, but effective first step or just another counterfeit product remains to be seen.  Stay tuned.