Last Friday, Congress approved the Consumer Product Safety Improvement Act of
2008. President Bush is expected to sign the measure in the coming days. This
legislation includes sweeping changes to the Consumer Product Safety Act and
will impose significant new obligations for product manufactures, importers,
distributors, and retailers. The Act is intended to provide greater consumer
protection for children’s products, to increase penalties for non-compliance,
and to expand the Consumer Product Safety Commission’s authority. Noteworthy
provisions include the following:
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Significantly increases civil and criminal
penalties. The Act increases civil fines from $5,000 to $100,000 per
violation, and increases the maximum civil penalty for a series of related
violations to $15,000,000. In determining penalty amounts, the Commission
will consider the nature, circumstances, extent, and gravity of the
violation of the Act, including the nature of the product defect, the
severity of the risk of injury, the occurrence or absence of injury, the
number of defective products distributed, the appropriateness of such
penalty in relation to the size of the business of the person charged, and
other such factors as appropriate. Within a year of enactment, the
Commission will issue a final regulation providing its interpretation of
these penalty factors. New civil penalty provisions will take effect on the
date such regulations are issued, or one year after the Act’s enactment.
Willful violations of the Act are punishable by up to five years
imprisonment or a fine. The Act also permits the seizure of company assets.
- Imposes broader requirements for certification.
Manufacturers or
distributors of products subject to Commission-enforced standards, bans, or
regulations must certify compliance with all requirements.
- Establishes labeling and certification requirements for Children’s
Products. Children’s Products will now also be subject to labeling and
independent third-party testing and certification requirements. The Act
defines a “Children’s Product” as an item intended primarily for children
twelve years old or younger. Within one year from enactment, manufacturers
are required to label Children’s Products and packaging with tracking
information sufficient for consumers to determine the manufacture location
and date of production.
- Lowers permissible lead levels and lead paint levels in Children’s
Products. Within 180 days of enactment, Children’s Products may not contain
more than 600 parts per million total lead content by weight. Within one
year, the permissible lead level drops to 300 parts per million and within
three years decreases to 100 parts per million, unless such a reduction is
not technologically feasible. Additionally, within a year, paint on
Children’s Products may not contain more than 0.009% lead.
- Establishes a database for publicly available information.
Within 180
days of enactment, the Act directs the Commission to transmit a detailed
plan to Congress for establishing a searchable internet database of consumer
product information. The database must be operational no later than 18
months after the Commission’s plan is submitted. The database will include
reports of alleged harm relating to the use of consumer products received by
the Commission from consumers, federal and non-federal government agencies,
health care professionals, child service providers, and public safety
entities. Information about companies’ voluntary corrective actions will
also be in the database.
Within five days of receiving a report of harm, the Commission will
transmit the report to the relevant manufacturer, importer or private
labeler for comment. A manufacturer, importer, or private labeler may
request the Commission to include its comment in the database. The
Commission must post reports of harm to the database within 10 business days
of receipt. Comments are to be made available in the database at the same
time as a related report is posted or as soon as practicable thereafter. The
Commission may redact confidential or inaccurate information contained in a
report of harm.
- Expands the Commission’s staff. The number of full-time Commission
employees will be at least 500 by 2013, including personnel assigned to
staff ports of entry and inspect foreign manufacturing facilities.
- Enlarges the Commission’s enforcement authority. If the Commission
determines that a product presents a substantial product hazard or one that
is imminently hazardous, the Commission can stop further dissemination of
the product at all points in the distribution chain. In addition, the
Commission may request that parties in the chain of distribution identify
product manufacturers by name and address.
- Creates a right of action by State Attorneys General. State Attorneys
General may bring civil actions against manufacturers, distributors,
importers, and retailers on behalf of the state’s citizens to enforce the
Consumer Product Safety Act and to obtain damages.
- Requires standards and consumer registration for Durable Nursery
Products. Within a year of enactment, the Commission will begin promulgating
safety standards for “Durable Infant or Toddler Products,” which are defined
as long-lasting products intended for use by children under five (such as
cribs, toddler beds, and strollers). Also within a year of enactment, the
Commission will establish a rule to require each manufacturer of these
products to provide consumers with a postage-paid consumer registration form
with each product and to maintain a record of the names and contact
information of consumers who choose to register. Such registration is
intended to improve the effectiveness of manufacturer campaigns to recall
these products.
- Prohibits phthalate-containing toys and child care articles. Within 180
days, toys or Children’s Products containing 0.1% or more of DEHP, DBP, or
BBP phthalates are banned from manufacture, sale, or distribution. The
Commission will 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 items. Within 18 months after its appointment, the Panel will
complete its examination of the full range of phthalates that are used in
products for children. It will then report to the Commission its findings
and recommendations within 180 days.
- Shortens the deadline for companies to object to public disclosure of
information. A company has 15 calendar days to object to certain information
as inaccurate, misleading, a trade secret or otherwise confidential to
prevent its release to the public by the Commission.
- Limits preemption. The Commission will consider applications by state
and local governments for the exemption of their consumer product standards
from preemption, possibly exposing a manufacturer, importer, distributor, or
retailer to liability for noncompliance with standards at federal, state,
and local levels. State and local governments may continue to enforce
existing safety requirements for children’s products that are in effect
prior to the Act’s enactment.
- Forbids industry-sponsored travel. No Commissioner or employee of the
Commission is permitted to accept travel or related expenses for attendance
at any meeting or similar functions related to his or her official duties.
- Expands the scope of activities prohibited under the Act. The Act makes
it unlawful to offer for sale or import any regulated product not in
conformity with product safety rules. Other prohibited acts include failing
to furnish a required certificate, providing a false certification, making a
misrepresentation to a Commission agent, exercising undue influence on a
third party-testing body, or exporting a recalled product from the United
States.
- Protects whistleblowers. No manufacturer, private labeler, distributor,
or retailer may discriminate against an employee because the employee
provided information regarding a violation of the Act or Commission
regulation, or refused to participate in an activity that the employee
reasonably thought to be a violation. A person who believes such
discrimination has occurred can file a complaint with the Secretary of Labor
within 180 days. A United States district court has jurisdiction to compel
an employer’s compliance with an order of the Secretary of Labor remedying
the discrimination.
- Permits the amendment or revocation of an approved recall action plan.
If the Commission finds that an approved recall action plan is not
effective, or that the manufacturer, retailer, or distributor is not
executing an action plan effectively, the Commission may amend the plan. The
Commission may withdraw its approval of an action plan if a party fails to
substantially comply with its obligations. The manufacturer, retailer, or
distributor to which the action plan relates is prohibited from distributing
its product after an action plan has been revoked.
This new legislation grants the Commission increased rule-making power over a
wide variety of consumer products. The full effects of the Act will not be
realized until the Commission promulgates regulations to enforce the statute.
However, it is already clear that manufacturers, importers, and distributors
will need to establish protocols for certifying products, responding to consumer
complaints, and revising labeling practices. Effective recordkeeping and
information management will also be increasingly important. Any company that
manufactures, imports, distributes, or sells consumer products should
immediately begin to evaluate this Act and actions necessary to ensure
compliance.
The McGuireWoods
Consumer
Product Safety Team represents clients in risk management, regulatory and
litigation matters involving the
Consumer
Product Safety Commission. We have more than three decades of experience in
this field, and our clients include domestic and international manufacturers,
importers, and retailers of some of the world’s best-known products.
