Congress Passes Consumer Product Safety Improvement Act of 2008

August 8, 2008

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:

  • 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.