Infant Safety Initiatives by the CPSC

Over the past several weeks, the U.S. Consumer Product Safety Commission (“CPSC“) issued new federal safety standards for the manufacture and importation of infant bath seats and infant baby walkers. These mandatory rules were prompted by Section 104 of the Consumer Product Safety Improvement Act (“CPSIA“), which requires the Commission to “study and develop safety standards for infant and toddler products” and either make the voluntary safety standards mandatory or impose a stricter standard.

Section 104 of the CPSIA applies to the following products: “full-size cribs and non full-size cribs; toddler beds; high chairs, booster chairs, hook on chairs; bath seats; gates and other enclosures for confining a child; play yards; stationary activity centers; infant carriers; strollers; walkers; swings; and bassinets and cradles.” This section does not allow the Commission to develop safety standards “as they see fit” or “on their own time,” it directed the Commission to “begin two rulemakings by August 14, 2009 and promulgate two more rules every six months until all products have mandatory safety standards.” According to the CPSC press release on May 20, 2010, “[t]he federal standard for infant bath seats is the first mandatory standard issued by CPSC as required under the [CPSIA] for a range of infant and toddler durable products.”

With respect to the infant bath seats, the CPSC voted 5-0 in favor of imposing a stricter standard than the current ASTM voluntary standard. This standard added the following:

stricter stability requirements to prevent the bath seat from tipping over, tighter leg opening requirements to prevent children from slipping through the leg openings and a larger permanent warning label alerting parents and caregivers that bath seats are not safety devices and that infants should never be left unattended in a bath seat.

The final mandatory rule for infant baby walkers also imposes additional requirements to the ASTM voluntary standard, including the following:

using the actual weight of a walker in a calculation to determine the launching distance for the stair fall test, specifying equipment used in the stair fall test, adding a parking brake test for walkers equipped with parking brakes.

These standards will become effective six months after publication to the Federal Register and bath seats or walkers manufactured or imported after that date must comply with these standards. Interestingly, the CPSC noted that no baby bath seat currently on the market complies with the new mandatory standard.

What we can expect is a number new mandatory standards for the types of products listed above. As with bath seats and walkers, the CPSC will likely impose additional standards beyond the voluntary ASTM standards. Counsel and management for companies selling these types of products need to be on the look out for these changing standards as to avoid non-compliance and hefty fines by the CPSC.

Celebrate Memorial Day

We here at Abnormal Use are observing Memorial Day today in honor and remembrance of all the men and women who have died serving the American military. Do you know the history of Memorial Day? Briefly, Memorial Day, originally called Decoration Day, was officially proclaimed on May 5, 1868 by General John Logan, national commander of the Grand Army of the Republic, as a time to honor those that gave their lives in the Civil War. After World War I, Americans honored those that died in all America’s wars on this day. In 1971, Congress declared Memorial Day an official federal holiday.

Many Americans celebrate this day by visiting memorials or attending family gatherings, including picnics, pool parties, and parades. If you are in fact heading to a pool party, take a look at the U.S. Consumer Product Safety Commission’s press release regarding its Pool and Safely campaign that was launched last week. This is campaign is a “first-of-its-kind national public education effort to reduce child drownings and non-fatal submersions, and entrapments in swimming pools and spas.” It will be interesting to see what directives come out of this campaign.

Whatever the case, the summer is now underway! Enjoy your day off.

Another Plaintiffs’ Friendly Post?

To my dismay, I was recently described as having written a post from a “plaintiff’s perspective.” The comment shook me to the core, as I have been sleepless, listless, and suffering from a psychological malaise deeper than our national debt. I remember reciting proudly with my incoming class at new lawyer orientation, “The plaintiff’s case is never meritorious.” My entire existence has been devoted to ensuring that no stone goes unturned in the search for the truth, which inevitably leads to the defense verdict. To say I am deeply offended at any intimation that I lean to the other side is an understatement of seismic proportions. After all, what is the point of the billable hour, if not to justify my very existence.

See the indecency here, where Polson Enterprises, The Boating Information Company, complimented a previous post concerning a jury’s awarding $3.8 million to a teenager who was struck by a boat propeller when his friend backed over him in the water. I didn’t actually intend to suggest that boat propellers be redesigned to look something like an oscillating fan, which was essentially what Plaintiff’s counsel argued in that case, so perhaps I need to take a more definitive stand when I believe the Plaintiff’s argument is off base. And so while I pledge to do so in future posts, this is not one such topic. A plaintiff I actually could potentially support is one who takes on Miley Cyrus. Not so much because the tween “role model” allegedly gives lap dances in bars or always seems to be involved in some photo scandal, as those issues are outside the scope of this blog. This time, Miley is in the news for a recall of her jewelry line, which was sold exclusively at Wal-Mart stores, after test results showed the jewelry contained high levels of the toxic metal cadmium.

Although Wal-Mart initially continued to sell the jewelry, reportedly telling the Consumer Product Safety Commission that testing items already on store shelves would be too difficult, it eventually changed its approach, issuing a statement that it had pulled “the few products that did not” comply with its new testing regimen. Studies reportedly have shown that girls of the age of most Cyrus fans, ages 6 to 11, are at higher risk for absorbing more cadmium than other children or adults. In any event, the affected items have, at this point, been pulled from the shelves. Only time will tell if this causes future damage to the Miley Cyrus brand.

CPSC Approves Final Rule on Factors Affecting Civil Penalties

On March 16, 2010, the U.S. Consumer Product Safety Commission (“CPSC”) approved, by a 4-1 vote, additional factors that the Commission must consider when determining a civil penalty amount for knowing violations of CPSC laws.

Prior to this amendment, the Commission considered the following factors in its determination of the amount of a civil penalty: “the severity of the risk of injury; the occurrence or absence of injury; and the number of defective products or the amount of substance distributed.” Now, the Commission is required to consider the following additional factors:

(1) the nature, circumstances, extent and gravity of the violation, including the nature of the product defect or the substance; (2) the appropriateness of the penalty in relation to the size of the business or of the person charged, including how to mitigate undue adverse economic impacts on small businesses; and (3) other factors as appropriate.

Of interest is not that the Commission now has additional factors to consider but some of the reasons that this was not a unanimous vote of approval. Chairman Inez M. Tenenbaum, Commissioner Robert S. Adler, Commissioner Thomas H. Moore, and Commissioner Nancy Nord voted to approve this rule. Chairman Tenenbaum, along with Commissioners Adler and Moore filed a joint statement of approval, and Commissioner Nord filed an independent statement of approval. [PDF]. Commissioner Anne M. Northup, on the other hand, “voted against the proposed Final Rule Interpreting Civil Penalty Factors because it fail[ed] to take the agency where [she] believe[d] it should arrive five years from now.” [PDF].

Commissioner Northup explained that in her view “[t]he [Consumer Product Safety Improvement Act (“CPSIA”)] imposes so many new requirements all at once–including arbitrary lead and phthalates limits (not based on risk), third-party testing, certification, tracking labels, etc.–that it challenges the capacity of both small and large consumer product companies to comply.” Commissioner Northup is concerned that the CPSIA increases the cost to introduce products into the market to an extent that enforcement and regulation will cause market exit, job loss, and reduction in product variety.

Specifically with respect to the proposed amendments to the rules, Commissioner Northup found that the new rules should have specifically stated that the Commission will treat technical violations differently than substantive violations. Without this explanation, there is room to consider technical violations differently but people are still guessing. Further, she did not approve of the fact that the rule did not give “credit to companies for their good faith in following compliance policies and good efforts in reacting to the occasional problems that will inevitably arise.” Finally, Commissioner Northup criticized the language of the rules as “too vague and flexible to reliably sort the good from the bad and instead catches everyone in the same net and tests to presume that anyone caught in the net is bad.”

As we reported in two prior posts–“Manufacturers, Importers, Distributors, and Retailers Beware: Unilateral Recall for Lead Violations may not be Enough” and “Lead and Now Cadmium: More Trouble for American Retailers“–the CPSC is imposing large civil penalties upon manufacturers, importers, distributors, and retailers for violations of the CPSIA. Commissioner Northup’s criticisms and concerns are important as the CPSIA develops and if not addressed, as she warned, could result in market exist, job loss, and reduction in product variety. The development of the CPSIA is important for all product dealers and all corporate counsel to follow.

Manufacturers, Importers, Distributors, and Retailers Beware: Unilateral Recall for Lead Violations may not be Enough

On February 4, 2010, the U.S. Consumer Product Safety Commission (“CPSC”) announced that Schylling Associates (“Schylling”) had agreed to pay a $200,000 civil penalty for lead paint violations that occurred between 2001 and 2003. This agreement is the result of CPSC staff allegations that Schylling distributed children’s toys for sale to consumers that contained more than 600 part per million in lead, which was the legal limit at the time of the alleged violations, and failed to report such violations to the CPSC. Schylling had denied that it knowingly or intentionally violated any provision of the Consumer Product Safety Act (“CPSA”) and the settlement agreement [PDF] between the CPSC and Schylling provides that the agreement does not constitute an admission that it knowingly violated the CPSA.

What is important to know for manufacturers, importers, distributors, and retailers as well as practitioners defending these entities are the facts that gave rise to this settlement agreement. From January 2002 to March 2002, Schylling imported tin pails from one of its manufacturers in Hong Kong. On March 2, 2002, testing results ordered by Schylling revealed that certain wooden handles on these pails were not in compliance with the CPSA. As a result, on March 26, 2002, Schylling performed a unilateral recall.

Additionally, between June 2001 and July 2002, Schylling imported approximately 66,000 spinning tops from another one of its Hong Kong manufacturers. On June 30 and July 1, 2002, Schylling received a report, upon its request, which provided that the wooden handles on certain samples of these tops were not in compliance with the federal lead limit. Schylling thought that it had discovered the issue before any tops had been imported into the U.S. and solved the problem by instructing its manufacturer to only use plastic handles. Schylling was wrong.

Five years later, in August 2007, a news reporter from the Chicago Tribune contacted Schylling reporting that he had purchased a non-compliant top from a U.S. consumer. As a result, Schylling submitted a report to the CPSC regarding both the tops and pails it imported from 2001 to 2003. The CPSC announced a recall of these items on August 22, 2007 and Schylling reported to its customers that they were working to resolve the issue and ensure the safety of all future products.

The CPSC has provided that while Schylling’s March 26, 2002 unilateral recall succeeded in recovering 85 percent of the non-compliant pails, the rest of the pails were not recovered and in the hands of consumers for five years. CPSC Chairman, Inez Tenenbaum stated that “[m]anufacturers, importers, distributors and retailers have a legal obligation to ensure that no banned products are introduced into or distributed in the U.S. marketplace, and to inform CPSC as soon as they become aware of information that must be reported under our laws.” Further, she warned that the CPSC would “continue to penalize companies that do not follow these basic requirements.”

The Schylling recall and resulting settlement agreement has provided all manufacturers, importers, distributors, retailers and their counsel instructions that the CPSC must be notified when there is even a potential risk of violation and that unilateral recall and investigation will not protect against this type of civil penalty.

New CPSC Recommendations for Lead Content/Lead Paint Limits

On January 15, 2010, at the direction of Congress, the Consumer Product Safety Commission made recommendations for the improvement of Section 101 of the Consumer Product Safety Improvement Act (CPSIA) [PDF]. Section 101 establishes lead content limits and lead-in-paint limits. The initial lead content limit established under the CPSIA took effect on February 10, 2009 and was 600 parts per million (ppm). This limit was reduced to 300 ppm on August 14, 2009. On that same date, the 90 ppm lead-in-paint limit also took effect. Recently, Congress asked the CPSC to assess enforcement efforts and make recommendations for improvement.

In its January 15, 2010 statement, the CPSC reported that “[i]n Fiscal Year 2009, the Office of Compliance identified 338 violations relating to lead content limits of the CPSIA.” These violations were identified through voluntary reports, market surveillance, and most often screening at ports using x-ray fluorescence technology. With respect to lead content enforcement, the CPSC identified three hurdles.

First, the CPSC explained that “given the breadth of the definition of children’s products, there were numerous products that were technically noncompliant” but that would not likely cause lead absorption into the human body. While the CPSC utilized exclusions under the CPSIA, certain products such as youth all-terrain vehicles, children’s bicycles, lead crystals and rhinestones in children’s apparel, and brass materials in toys were denied exemption requests.

An additional hurdle identified by the CPSC was the provision of the CPSIA relating to the retroactive application of the lead content limits. Essentially, the CPSIA made it unlawful to sell products that exceeded the lead content limits regardless of their manufacture date. This provision created numerous problems for retailers with large inventories when the limits went into effect and second-hand stores. These problems were especially significant for retailers that sold used books. Finally, the CPSC noted that the costs of third-party product testing was expensive and was creating a huge burden for small manufacturers.

With respect to lead-in-paint limit enforcement, the CPSC reported 117 violations during Fiscal Year 2009, most of which were found during staff screening. Interestingly, the CPSC reported that they had “not seen the same implementation and enforcement issues with regard to lowering the lead paint limits as it has seen with the lead content limits.” Therefore, it did not identify any hurdles or make any improvement recommendations to Congress with respect to lead-in-paint.

After identifying the above hurdles to enforcement and implementation, the CPSC made four recommendations to Congress with respect to lead content enforcement. The first addressed products that were out of compliance but posed no risk of danger to children. The CPSC recommended “additional flexibility within this section to grant exclusions from the lead content limits in order to address certain products.” The second recommendation addressed printed materials, which would grant an “exclusion for ordinary children’s books and other children’s paper-based printed materials. The third addresses the proposed reduction of lead content limits from 300 ppm to 100 ppm in August 2011. The CPSC recommended prospective application of this limit as opposed to the now retroactive application of limits. The CPSC’s final recommendation addresses required testing and proposes that testing and certification requirements be based upon volume of production and channels of distribution.

All manufacturers and retailers first need to be aware of the lead limits now in effect as well as the proposed lower limits to be implemented in August 2011. However, based on the tone of the recommendations made to Congress, it appears that the CPSC is trying to address the burdens that these restrictions put on manufacturers and retailers without compromising the safety of our children. We all should be on the look out for possible revisions to the current CPSIA and its possible effect on liability for violations.

1.5 Million Graco Strollers Recalled; Manufacturer Takes Advantage of Social Media Outlets to Inform Consumers

Graco Children’s Products, Inc. of Atlanta and the Consumer Product Safety Commission announced on January 20, 2010 an enormous recall of Graco children’s strollers. This decision was made after Graco received seven reports of injury resulting from children placing their fingers in the stroller’s canopy hinge mechanism while the canopy was being opened or closed. Five finger amputations and two fingertip lacerations were reported.

In all, 1.5 million units, including the Graco Passage, Alano and Spree Strollers, and Travel Systems, were recalled, making it the largest stroller recall in history.

This latest recall is not the first of its kind. In November 2009, approximately 1 million strollers were recalled by the CPSC and the British manufacturer Maclaren after twelve reports of children’s fingertips being amputated by a hinge mechanism similar to that involved in the latest Graco recall. In 2005, 1.1 million Graco-manufactured strollers were recalled as a result of their failure to latch properly, causing some strollers to unexpectedly collapse during use.

In this latest stroller recall, Graco has reportedly acted swiftly and cooperated with the CPSC in taking corrective measures for consumers. Graco immediately set up an interactive blog and FAQ page to provide information and instructions for consumers to order a free protective cover repair kit. Graco, taking advantage of all aspects of social media, has also been praised by some for its prompt responses to consumers’ questions and concerns on its Twitter account.

Lead and Now Cadmium: More Trouble for American Retailers

On December 29, 2009, the Consumer Product Safety Commission (“CPSC”) announced its unanimous vote to impose a $1.25 million civil penalty on RC2 Corporation for selling products that contained lead that exceeded the allowable limits. Federal regulations governing lead levels in children’s products have been in effect since 1978. These regulations prohibit children’s products from containing more than 0.06 percent lead by weight in paint or surface coatings.

On September 26, 2007, RC2 Corporation recalled a number of toys in the Thomas & Friends Wooden Railway product line after it discovered that the surface paint contained lead in excess of the 0.06 percent limit. These toys were imported from China and distributed by RC2 Corporation for sale to individual consumers. This recall of more than 1.5 million toys “spawned numerous class-action lawsuits in state and federal courts, alleging the company marketed and advertised the toys nationwide as safe for kids.” 20 No. 12 ANPRODLLR 3. These actions were settled in 2008 for $30 million, “providing eligible class members with cash refunds or replacement toys.” Id.

This recall also led to the CPSC imposing a $1.25 million civil penalty on RC2. CPSC Commissioner Anne M. Northup recently commented [PDF] on the imposition of this civil penalty stating that “it is entirely appropriate for the agency to assess civil penalties against companies that mistakenly import products in violation of the federal safety standards.” Further, Northup stated this type of penalty is intended to serve as a “financial deterrent against companies taking a casual approach toward their product safety compliance responsibilities” and to “serve as a further reputational disincentive.” Interestingly, Northup also opined that the agency must clarify its application of the statutory definition of “knowing” in 15 U.S.C. § 2069(d) used by the agency to impose such penalties before the standard is challenged by manufacturers. Clarification of this term might be a fertile field for litigation.

Finally, as a result of this recall, Congress passed the Consumer Product Safety Improvement Act, which reduced the allowable lead limit to 0.009 percent. The aim of stricter regulations on lead levels was to protect the safety of children. However, it appears that Chinese manufacturers may have just found a replacement for lead—a known carcinogen, cadmium. The Associated Press reported on January 11, 2009 that Chinese manufacturers have been substituting cadmium for lead and that “U.S. product safety authorities say they are launching an investigation into the presence of the toxic metal cadmium in children’s jewelry imported from China after disclosure of lab tests showing that some pieces consisted primarily of the dangerous substance.” (See this site’s previous coverage of this issue here.). While the CPSC has not recalled an item with cadmium, the CPSC has already stated that it is “moving swiftly to deal with the replacement of lead with cadmium in certain children’s products imported from China.”

As with the highly publicized recall of the Thomas & Friends Wooden Railway project line, the public can expect that the anticipated recalls of cadmium containing products sold throughout the United States will spawn litigation by consumers, further regulation by the CPSC of the consumer market, and the imposition of large civil penalties on American retailers. American retailers should be aware of this shift to the use of cadmium and have measures in place to protect themselves, as it appears that Chinese manufacturers are continuing to expose American corporations to liability in the millions of dollars.

Cadmium in the News

Cadmium, a transition metal with possible carcinogenic effects, has garnered a fair amount of press coverage of late, as it appears that foreign manufacturers are now using it instead of lead in the production of toys, including children’s jewelry. On January 11, 2010, Inez Tenenbaum, Chairman of the Consumer Products Safety Commission, issued a videotaped statement to be delivered to the Asia-Pacific Economic Cooperation Toy Safety Initiative/Dialogue in Hong Kong, in which she stressed that children’s products must be free of heavy metals. She also stated that voluntary efforts to ensure that children’s toys are free of cadmium might only be marginally effective. The CPSC reports that it continues to investigate this issue.

In a related news report , the Associated Press reports that New York Senator Charles Schumer (D – New York) intends to propose legislation in response to the reports of cadmium being found in toys manufactured in the People’s Republic of China. (See Senator Schumer’s January 13 press release on this topic here.). As quoted by the AP, Senator Schumer stated that his legislation, if passed, would “put an end to the use of cadmium in our children’s jewelry and toys once and for all . . . whether it’s made here or in China or anywhere else. It will just stop it cold.” The AP report also also referenced laboratory testing conducted by the news agency ” . . . on 103 pieces of low-priced children’s jewelry [which] found 12 items with cadmium content above 10 percent of the total weight. Some were as much as 90 percent cadmium.”