In February 2006, four-year old Jarnell Brown died when he swallowed a toy. The Centers for Disease Control and Prevention reports that each year, 873 children ages 14 and under die from airway obstruction injuries, some of them caused by chocking on toys.
But Jarnell did not choke to death. He died of "lead encephalopathy" - severe brain swelling caused by ingesting a charm that was found to be 99.1 percent lead. The heart-shaped charm was attached to a bracelet that was given away with the purchase of Reebok shoes. A Reebok spokesperson told the press that the bracelets were made by an independent contractor in China.
The U.S. Consumer Product Safety Commission (CPSC) estimates that, in recent years, about 28,200 consumers have died each year from preventable injuries related to consumer products. Jarnell's case was different from most of these: It was noticed. Widespread press coverage of the boy's death, coupled with a rash of agency recalls aimed at lead in toys and renewed interest by a Democratic-controlled Congress, spurred an examination of the CPSC, the agency responsible for regulating the safety of over 15,000 consumer products.
The CPSC is an independent federal regulatory agency born of the 1960s-era consumer movement. In 1968, President Lyndon Johnson, responding to the public's demand for safer products, established the National Commission on Product Safety. When the commission found that an estimated 20 million Americans were injured annually by consumer products- and approximately 30,000 were killed - Congress established the CPSC when it passed the Consumer Product Safety Act of 1972.
Almost from its inception, the agency has been subject to political pressure from Congress, the consumer product industry and consumer interest groups. It was nearly abolished by two presidents, Jimmy Carter and Ronald Reagan. Its annual budget is one of the smallest of any federal health and safety agency-about $50 million to $60 million over the last several years. Compare this to the roughly $1.5 billion budget of the FDA, another federal agency charged with keeping consumers safe.
Originally, the commission was to be composed of five commissioners, with no more than three affiliated with the same political party. In 1986, Congress restricted funds for commissioners' salaries, and since then, the CPSC has functioned with only three commissioners. In addition, its staff has been severely cut. The agency now has fewer than 500 full-time employees, down from about 900 in the late 1970's.
The CPSC's status as an underfunded agency, while known in Washington, usually comes as a surprise to those living outside the Beltway. Despite what many consumers believe, the CPSC does not test products before they reach the market. As a New York Times article published last year noted, "A lone employee is charged with testing suspected defective toys" that have already reached the market.
The agency limped along in its weakened condition at a time when the United States has been importing many more consumer products, especially toys. According to the Consumers Union, which publishes Consumer Reports, the number of China-made products recalled by the CPSC has doubled in the last five years. Chinese products now account for two-thirds of the products the agency regulates. And according to the Toy Industry Association, toys manufactured in China make up 70 percent to 80 percent of all toys sold in the United States.
The influx of foreign products like the one that killed Jarnell Brown drew new attention to the reality that under the commission's traditional way of doing business, it could take years to make products on the market safer. There were two main reasons for this.
First, the CPSC's procedures promoted the creation of voluntary standards negotiated with the industry. And in cases where the situation was serious enough to bypass voluntary standards, or in cases where no agreement could be reached on those standards, the agency had to initiate long rule-making processes, during which manufactures could slow the agency's investigation of a product's safety. Second, the reductions in the agency's budget and staff meant it was ill-equipped to investigate products and work on rule makings.
Under the Bush administration, some consumer groups and trial lawyers argued, a third problem with the commission emerged. The agency took liberties to change the law, but not through the legal rule-making process. In a rule-making set to take effect July 1, 2007, addressing flammability of mattresses, the agency added language in the preamble of the rule preempting states' rights of legal action.
The language declared that "the federal standard will preempt all non-identical state requirements" (including more strict safety standards) and declared that the preemption provisions preempted "court-created requirements." In one short preamble, the small agency had declared the executive branch more powerful than the judiciary and had taken away states' rights to improve safety standards for products sold within their borders.
So as 2007 began, consumer advocates saw the CPSC as a weak agent of consumer protection. The agency's budget had been cut; many of its long-time employees had left; its commissioners had been reduced from five to three; and it had begun making legally questionable declarations about the constitutional balance of power among branches and levels of government. But now a Democratic -controlled Congress was in office and cases such as Jarnell Brown's had come to light, just when American's concern over the importation of unsafe products from overseas was growing.
After an unprecedented number of toys were in 2007, parents, consumer protection groups, and some toy retailers called for radical change. On August 14, 2008, they got it: Congress passed and President Bush signed, the first significant legislation (since the agency was created) to give the commission new regulatory muscle to more vigorously police product safety. It included new funding and power for the agency, specific safety standards for some products, and important language clearly stating that the federal product safety laws the CPSC enforces do not preempt state common or statutory law.
Time for Reform
Both the House and Senate Commerce Committees initially drafted legislation to reform the CPSC in 2007. Both bills- S. 2045, authored by Sens. Daniel Inouye (D-Haw.) and Mark Pryor (D-Ark.), and H.R> 4040, introduced by Rep. Bobby Rush (D-Ill.) - would significantly increase the agency's budget. The bills instructed the commission to hire more staff and increased its civil penalties cap from $1.25 million to $10 million in the House version originally introduced, and $100 million in the original Senate version.
By last spring, both the Senate and House passed their versions of the bill and began to "conference" the legislation together, working out the differences between the two versions to produce a single compromise bill. One of the issues addressed-with help from pressure from consumer groups and trial lawyers- was preemption. Consumer advocates in Congress and the CPSC were concerned by the Bush administration's attempt to preempt state statutory and court authority in the 2007 mattress flammability standard. Some agreed-upon language began to solve the issue, by declaring that the agency was prohibited from including regulatory language that established preemption-even if that language was in a preamble, or statement of policy.
In addition, a new civil penalties cap was agreed upon: the CPSC would now be able to fine wrongdoers up to $15 million, up from $1.25 million.
But as of early July, with the August recess soon to begin and the congressional clock ticking, several issues posed hurdles to reaching a final agreement, including the public disclosure of product information and a ban on the use of chemicals called phthalates in children's toys.
Public disclosure. Until now, the law on public disclosure of information about potentially hazardous products began with the warning that "all information obtained by the commission shall be considered confidential and not be disclosed." Section 6(a) (3) of the Consumer Product Safety Act went on to say that before disclosing any information that would allow consumers to identify the manufacturer or private labeler of a potentially hazardous product, the commission must "offer the manufacturer or private labeler an opportunity to mark such information as confidential" and bar it from disclosure.
Specifically, 30 days before releasing information, the commission would have to notify the manufacturer, provide a summary of the information, and allow the company a "reasonable opportunity" to submit comments to the commission regarding the information. Although business groups said this language protected legitimate trade secrets, consumer advocates believed this procedure allowed those suspected of introducing hazardous products into the stream of commerce to cover up their actions.
When the Senate passed its version of the legislation in early 2008, the bill's language shortened the time a manufacturer had to answer a commission notification from 30 to 15 days, and it required the commission to post on its Web site a publicly available, searchable database including any reports of injury, illness, or death related to a product. The House bill, which passed in December 2007, also reduced the manufacturer's response time to 15 days but included a weaker version of the database provision. The House version asked the commission to evaluate its current system of gathering product hazard information from across the country. This system, called the Injury Information Clearinghouse, contains statistical, summary and other information gleaned from hospital emergency room cases and other sources, such as death certificates. Agency employees provide information to those who request it directly from the agency.
Specifically, the House bill ordered the commission to
examine....the efficacy of the Injury Information Clearinghouse maintained by the commission... and to transmit to Congress...a detailed plan for maintaining and categorizing such information on a searchable Internet database to make the information more easily available and beneficial to consumer's, with due regard for the protection of personal information."
Consumer groups argued that the House version would not give the public the information it needs. But some members of the House Energy and Commerce Committee believed that publishing uninvestigated injury data would be unfair to manufacturers. A compromise on the issue would have to be reached before the CPSC's long-overdue reform could take place.
Phthalates. Because of the difficulty of establishing more stringent product-safety standards through the CPSC's rule-making process, consumer advocates have the rare times when Congress passed any bill on a CPSC matter to add new product standards to the proposed legislation.
On 13 occasions, Congress has banned and recalled products, outlined specific standards for products, and directed the promulgation of specified standards for products. At times, Congress performed these actions by placing the product under the jurisdiction of the Consumer Product safety Act. At other times, lawmakers bypassed the act by directly ordering bans, recalls, or standards in stand-alone or other legislation-usually with the strong encouragement of trial lawyers and consumer groups.
For instance, Congress directed the CPSC to recall lead-lined drinking water coolers that leached lead into drinking water and banned the sale of butyl nitrite and alkyl nitrite- chemicals that had been used as "club drugs." It also banned the sale of small balls (with a diameter of 1.75 inches or less) made for children under the age of three.
On some occasions, Congress directed the agency to develop specific standards for products such as refrigerator doors and cellulose insulation. The two versions of the CPSC reform bill took different approaches to the question of specific product standards. Both bills set standards for the amount of lead that could be contained in products. But beyond that, the language of the bills varied dramatically.
The Senate version included safety standards for four-wheeled all-terrain vehicles (ATVs), residential garage door operators, and equestrian helmets. It also gave the CPSC deadlines for issuing rules relating to portable generators and cigarette lighters. But the most controversial product specific language of the Senate bill concerned phthalates.
Phthalates are chemicals used to soften plastics. The Senate version of the bill proposed to ban certain phthalates from children's products under the Federal Hazardous Substances Act. Some states, such as California, recently restricted the chemicals' use because of evidence that they might affect children's hormonal and neurological systems and possibly cause cancer.
The House bill differed in key respects. Aside from the lead standards, it did not address any specific product's safety. But Senate Democrats were insistent on keeping the phthalates ban.
As members of the two chambers went to conference to put together a compromise, it looked doubtful that agreement could be reached on this issue. As Rep. Joe Barton (R-Tex.), the powerful ranking member of the House Energy and Commerce Committee- and the phthalates ban's chief critic- said, members would "have to shut the door and yell and scream at each other for a while" before a compromise bill could be reached.
Preemption
Between the time the House version of the bill was passed in December 2007 and the Senate version was passed in March 2008, a Supreme Court case- Riegel v. Medtronic - was handed down that highlighted the impact of federal agencies' ability to preempt state law claims.
Charles Riegel and his wife sued Medtronic, a medical device maker, when a balloon catheter made by the company burst during Charles's angioplasty. Medtronic claimed the preemption language of the Medical Device Amendments (MDA) to the Food, Drug and Cosmetics Act protected it from state law claims regarding devices that received premarket approval from the FDA.
The Riegels contended that without clear language, the statute could not be widely interpreted as preempting state law. But on February 20, 2008, the Supreme Court held that the statute's preemption language barred state claims against the makers of devices that gained premarket approval under the MDA.
A couple of months later, the Texas Supreme Court adopted the Supreme Court's Medtronic holding to say that a products liability claim based on the use of a BIC lighter was preempted by federal law. The CPSC had adopted regulations requiring that lighters be child resistant. Despite these standards, a six year old child was burned when her dress was set afire by another child. The company that made the lighter, BIC Pen Corp., claimed that, in light of Medtronic, the plaintiff's state law products liability claim could not be pursued. While Medtronic had met the MDA's requirement for premarket approval, BIC noted that it had followed CPSC regulations in making the lighter.
The Bush administration's push for preemption language in statutes, coupled with the Supreme Court's willingness to construe such language as restricting states' rights, had consumer advocates worried. Trial lawyers and other consumer groups launched a federal lobbying effort to prevent preemption language from taking away consumers' rights under state law. The resulting language was strong.
The language states that, with regard to preemption, "the commission may not construe any such act as preempting any cause of action under state or local common law or state statutory law regarding damage claims. " In addition, the language makes it clear that preemption of a rule or any statement of policy accompanying a rule-making.
Compromise
Finally, days before Congress's August recess, it passed a compromise version of the CPSC reform bill, and the president signed it into law. The compromise gave the agency more money and personnel, increased the amount it could penalize companies that manufactured and sold unsafe products, and strengthened its rule making process. But what about the details-especially the controversial issues that kept the conferees fighting until the very end?
On public disclosure, the reform law's language requires the CPSC to establish and maintain a searchable, public database 18 months after submitting plans to Congress detailing how the database will be run. The database will contain "reports of harm...received by the commission from consumers: local, state or federal government agencies; health care professionals; child service providers; and public safety entities.
The public database will include comments by product manufacturers. Once the commission receives a report of injury, it will, within five days, transmit that report to the manufacturer, allowing the company an opportunity to comment in the database if the manufacturer requests it.
Also, the manufacturer may request that some information be considered confidential. The commission must then determine whether that information contains a trade secret as defined by federal law. If it does, the commission must remove the information from the database. If the commission determines that the information does not contain a trade secret, the manufacturer may bring action in district court to seek its removal. The commission can also determine that a piece of information in a report or comment is inaccurate and may decline to add it or may remove it from the database.
The new law raises safety standards for ATVs, improves pool and spa safety, more stringently controls the amount of lead in children's products, and forces the CPSC to examine -and possibly raise-standards for "durable infant or toddler products" such as cribs.
As for phthalates, 180 days after enactment, the act will make it illegal for anyone to manufacture, distribute, import or sell any child's toy or child care article containing more than 0.1 percent of three types of phthalates. It will also be illegal to manufacture, sell, import or distribute toys containing phthalates if the toys can be placed in a child's mouth.
So what does the new and improved CPSC mean for consumers? There is no question that the reform law strengthens the agency. Additional resources will inject the CPSC with new power, new direction, and new sense of purpose. Higher penalty caps will help deter potential wrongdoers.
For trial lawyers, the new anti-preemption language might be the most important part. The new language will protect states' rights to hold accountable those who place hazardous products into the stream of commerce.
Many product manufacturers and sellers will continue to make high-quality products that adhere to the spirit and letter of the law, but some will test the commission's ability to enforce its new rules. Time will tell how well the reformed agency will serve the consumers that the Congress of 1972 sought to protect.
Posted with permission of Trial (November 2008). Copyright American Association for Justice, formerly Association of Trial Lawyers of America (ATLA).
