The CPSIA : One (Difficult) Year Later

Overview of the CPSIA

A bipartisan reaction to the rash of product recalls in 2007, the CPSIA amended the 1973 Consumer Product Safety Act and revamped the overseeing agency, the Consumer Products Safety Commission (CPSC). The CPSIA governs both the manufacturing and distribution of children's products, children's toys, and child care articles. The CPSIA retroactively restricts the amount of lead allowed in children's products and bans particular levels of certain phthalates ' a class of chemicals used to soften plastics ' from children's toys and child care articles. It orders manufacturers of children's products to perform pre-market independent testing for lead and phthalates and to procure third-party laboratory certification confirming that products conform to the CPSIA and incorporated regulatory safety standards. Further, the CPSIA mandates that all manufacturers mark their products so that goods can be tracked by the CPSC and consumers. The CPSIA also requires the CPSC to create a public consumer database chronicling the injuries and deaths allegedly resulting from consumer products.

The CPSIA provides the CPSC with broad recall authority and the power to seek both civil and criminal penalties for CPSIA violations. It also includes a “whistleblower” provision, prohibiting retaliation against employees who report violations, and it authorizes State Attorneys General to obtain injunctions against products they consider unsafe under the CPSIA and applicable state consumer protection laws. In addition, the CPSC is also saddled with the task of overseeing the implementation of the Federal Hazardous Substances Act, Flammable Fabrics Act, Poison Prevention Packaging Act, Refrigerator Safety Act and Virginia Graeme Baker Pool and Spa Safety Act.

Recent CPSIA Activity

Since the CPSIA's enactment, the CPSC has issued several advisory opinions as well as interim guidance documents in an attempt to explain and clarify certain sections of the CPSIA. The following is an outline of the most significant advisory opinions as well as Final Rules published by the CPSC since November 2008.

Products Covered by the CPSIA

The CPSIA governs the manufacturing and distribution of children's products, child care articles, and children's toys. Section 108 of the CPSIA defines “children's product” as “a consumer product designed or intended primarily for children 12 years of age or younger” and defines “child care article” as “a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething.” That same section of the CPSIA further defines a “children's toy” as a “consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays.” Notably, with regard to children's toys, the CPSC looked to the ASTM International voluntary standard for guidance on what constitutes a “toy.” To that end, the CPSC made ASTM International voluntary standard, ASTM F963, a mandatory standard effective Feb. 10, 2009.

Product Testing and the Feb. 9, 2009 CPSC Enforcement Stay

Much of the concern over the effects of the CPSIA stems from Section 102 of that Act requiring manufacturers and importers of consumer products to go through mandatory third-party laboratory testing and acquire proper certification that their products comply with CPSIA standards governing children's products, children's toys, and child care articles. Section 102, along with others, was scheduled to go into effect on Feb. 9, 2009. However, on Jan. 30, 2009, the CPSC voted to stay enforcement of this provision along with certain others until Feb. 10, 2010, providing a temporary reprieve in exposure for businesses. See Statement of Acting Chairman Nancy Nord on the Stay of Enforcement of Certain Testing and Certification Requirements of the Consumer Product Safety Information Act of 2001, Op. CPSC (Jan. 30, 2009). The delay in enforcement also has afforded the CPSC more time to “develop and issue rules” while simultaneously giving Congress an opportunity to revisit the hastily crafted provisions of the CPSIA. However, the stay in enforcement does not excuse non-compliance. As it stands, the CPSC has declared that only importers and domestic manufacturers are required to provide certificates, based upon a “reasonable testing program” by an accredited testing laboratory. See Certificates of Compliance, 73 Fed. Reg. 68328 (Nov. 18, 2008) (amending 16 CFR ' 1110).

Though the stay has provided some relief for manufacturers and importers, it does not relieve them of their obligations to comply with the new lead and phthalate limits that went into effect on Feb. 9, 2009. Thus, while manufacturers and importers are not required to abide by the strict requirements of the CPSIA with regard to testing, in reality, they must nevertheless develop reasonable testing and certification practices now ' not only to ensure that the products do not exceed the lead and phthalate limits, but also to ready themselves for certification as of Feb. 10, 2010.

Section 102 of the CPSIA has also sparked confusion over what entities are subject to its mandates. For example, while charities, thrift shops, resellers, and small retailers are required to abide by applicable lead and phthalate limits, they are not under any obligation to actively test and certify compliance of the children's products they sell or distribute, even after Feb. 10, 2010. They too, however, should develop some reasonable methodology to ensure the products they sell and distribute do comply with lead and phthalate limits, though not mandated, in order to avoid the penalties and enforcement litigation that may result from inadvertently selling or distributing non-compliant products.

Lead Limits

Currently, under Section 101 of the CPSIA, children's products may contain no more than 300 ppm of lead. This is a reduction from the Feb. 10, 2009 limit of 600 ppm of lead that went into effect on Aug. 14, 2009. The limit will be further reduced on Aug. 14, 2011 to 100 ppm, if technologically feasible, or otherwise to the lowest level feasible if above 100 ppm. Also, on Aug. 14, 2009, the lead limit for lead paint was reduced to 90 ppm. Pursuant to the CPSIA, third-party laboratory testing and certification is required for all lead paint manufactured and utilized after that date.

In calculating the total lead content of a children's product, 16 CFR
' 1500 dictates that those component parts of a product “that are not accessible to a child” are not included. The CPSC, as it was required under the CPSIA, issued an interpretive rule providing guidance as to what components are deemed inaccessible ' the final rule was issued Aug. 7, 2009. The rule is embodied in 16 CFR ' 1500.87, which dictates that “accessibility probes” ' i.e., probes that simulate the size of children's fingers, be used to determine what portions of the product may be reached by the probe. If the probe cannot reach the product, it is “inaccessible” under the CPSIA. The product must also be able to withstand anticipated use and abuse ' the severity of which varies based on the age of the children the products are intended for'such that any lead-containing component remains inaccessible during the foreseeable life of the product.

In an effort to reduce the burden of the CPSIA, the CPSC issued a rule for exemption, found in 16 CFR ' 1500.91, determining which products, by their very nature, will not contain lead so as to exceed even the 100 ppm requirement in August 2011. Though one may view this rule for a complete listing, the products outlined tend to be those utilized in a natural state, not subject to any alteration, and include gemstones, wood, plants and the by-products thereof, and various natural fibers. That same rule also outlines which metals and alloys will not exceed 100 ppm of lead, and includes most stainless steels and precious metals.

Phthalate Limits

The CPSIA also regulates the inclusion of phthalates in children's toys and child care articles prohibiting more than .1% concentration of di-(2-ethylhexyl) phthalate (“DEHP”), dibutyl phthalate (“DBP”), and benzyl butyl phthalate (“BBP”) on a permanent basis, and diisononyl phthalate (“DINP”), diisodecyl phthalate (“DIDP”), and di-n-octyl phthalate (“DnOP”) on a temporary basis until further studies regarding their toxicity (or lack thereof) are concluded. (See “The CPSIA, CA's Phthalate Regulation, and Proposition 65: Living in Harmony?” By Michals and Epand in the November issue of this newsletter.) The testing and certification requirements for phthalates in most children's products, like those for lead, have been stayed until Feb. 10, 2010. Though initially there was some controversy surrounding whether the ban would apply only to newly created children's products (as of February 2009), as adjudicated in NRDC, Inc. v. United States Consumer Prod. Safety Comm'n, 597 F. Supp. 2d 370 (S.D.N.Y. 2009), ultimately, businesses must ensure that all products sold or distributed, no matter when manufactured, comply with the phthalate limits. Those limits apply only to the plasticized component parts of the items. See Test Method: CPSC-CH-C1001-09.2 ' Standard Operation Procedure for Determination of Phthalates, July 27, 2009 available at http://www.cpsc.gov/ABOUT/Cpsia/sect108.html.

Label and Warning Requirements For Children's Products

Pursuant to Section 103 of the CPSIA, manufacturers are required “to place permanent, distinguishing marks on children's products and their packaging to the extent possible.” Section 103 applies to all children's products, regardless of their lead and phthalate content. Though the mandates of this provision were initially stayed by the CPSC, as of Aug. 14, 2009, manufacturers are required to abide by its terms. To provide some guidance as to the breadth of Section 103, the CPSC released a Statement of Policy issued on July 17, 2009 noting that it was up to the “reasonable judgment of each individual manufacturer” how they choose to label and package their products to comply with Section 103(a) of the CPSIA. See Statement of Policy Concerning Tracking Label Requirements in Section 103(a) of the CPSIA, Op. CPSC (July 20,2009). Additionally, the CPSC decided that small volume manufacturers and crafters “need not create a labeling system incorporating the use of lot, batch, or run numbers so long as such manufactures can keep adequate records of the components used in their products.” Though the provisions of Section 103(a) are currently in force, the CPSC has acknowledged that “manufacturing changes cannot occur overnight” and maintained that it would work with manufacturers if additional time is needed to make labeling changes.

Books

The CPSIA triggered a number of concerns regarding the extent to which books were covered by its provisions. The CPSC addressed these concerns explaining that the lead limits of Section 101 do not apply to “ordinary books” because such books are “not intended or designed primarily for children.” See Op. CPSC, Legal Counsel No. 323 (Jan. 15, 2009). Moreover, the CPSC issued a ruling that most components of new books, which may in fact be intended for those 12 and younger, are not lead-containing, effectively exempting such books from the certification and testing requirements. See 16 CFR ' 1500.91. However, the CPSC explained that while most books would not be subject to phthalate and lead analysis, those books with “play value” for children 12 years and younger would be subject to such testing.

As neither manufacturers nor importers under the CPSIA, libraries are not required to test the books they lend out, however, this does not alleviate libraries and other purveyors of antique children's books from the burden of ensuring that these older books, whose components may be lead-containing, comply with the applicable lead laws. As a result, the CPSC intends to issue a “Statement of Policy addressing the treatment of older children's books.” See Children's Products Containing Lead; Determinations Regarding Lead Content Limits on Certain Materials or Products, Final Rule (Draft Federal Register Notice, Aug, 19, 2009).

The conclusion of this article will address recent activity relating to products such as electronics, bicycles and ATVs, the challenges imposed by implementation and the future of the CPSIA.

Jonathan I. Handler is a partner in the Boston office of Day Pitney LLP where, as part of his practice in complex commercial litigation, he represents product manufacturers in disputes and advises them on risk mitigation. William S. Rogers, Jr. is a partner resident in in the same office, where he is a member of the Commercial Litigation, Product Liability, and Nanotechnolgy Practices. Meredith French is an associate.

In August 2008, former President Bush signed into law the Consumer Product Safety Improvement Act of 2008 (the “CPSIA” or the “Act”) in an effort to enhance the powers of the Consumer Product Safety Commission (the “CPSC”) to protect American consumers from unsafe domestic and imported products. See Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314. Though its enactment was well-intentioned, implementation of the CPSIA has been a logistical nightmare ' largely because this far-reaching law was enacted without providing adequate resources to the CPSC to enforce it or giving sufficient forethought to its implications for the affected businesses.

Some History

Since November 2008, the CPSC has issued a number of regulations, advisory opinions, and revised guidelines to clear up confusion concerning the scope and effect of the CPSIA. In an effort to resolve much of the uncertainty and hardship surrounding compliance with the CPSIA's provisions, Legislators have introduced competing bills in the House and Senate. Though such proposals seek to amend the CPSIA to limit the great financial and logistical burdens of compliance, hope for sweeping overhaul of the CPSIA's provisions based on this legislation is unduly optimistic, particularly given the Obama administration's general support for increased government oversight and regulation of the consumer products industry. Accordingly, businesses and their counsel should be aware that, as the CPSC is provided with a larger budget, increased enforcement of the CPSIA's provisions is inevitable, and the consequences of noncompliance in the form of statutory civil and criminal penalties, product recalls, and private litigation, will be unavoidable and potentially severe.

Overview of the CPSIA

A bipartisan reaction to the rash of product recalls in 2007, the CPSIA amended the 1973 Consumer Product Safety Act and revamped the overseeing agency, the Consumer Products Safety Commission (CPSC). The CPSIA governs both the manufacturing and distribution of children's products, children's toys, and child care articles. The CPSIA retroactively restricts the amount of lead allowed in children's products and bans particular levels of certain phthalates ' a class of chemicals used to soften plastics ' from children's toys and child care articles. It orders manufacturers of children's products to perform pre-market independent testing for lead and phthalates and to procure third-party laboratory certification confirming that products conform to the CPSIA and incorporated regulatory safety standards. Further, the CPSIA mandates that all manufacturers mark their products so that goods can be tracked by the CPSC and consumers. The CPSIA also requires the CPSC to create a public consumer database chronicling the injuries and deaths allegedly resulting from consumer products.

The CPSIA provides the CPSC with broad recall authority and the power to seek both civil and criminal penalties for CPSIA violations. It also includes a “whistleblower” provision, prohibiting retaliation against employees who report violations, and it authorizes State Attorneys General to obtain injunctions against products they consider unsafe under the CPSIA and applicable state consumer protection laws. In addition, the CPSC is also saddled with the task of overseeing the implementation of the Federal Hazardous Substances Act, Flammable Fabrics Act, Poison Prevention Packaging Act, Refrigerator Safety Act and Virginia Graeme Baker Pool and Spa Safety Act.

Recent CPSIA Activity

Since the CPSIA's enactment, the CPSC has issued several advisory opinions as well as interim guidance documents in an attempt to explain and clarify certain sections of the CPSIA. The following is an outline of the most significant advisory opinions as well as Final Rules published by the CPSC since November 2008.

Products Covered by the CPSIA

The CPSIA governs the manufacturing and distribution of children's products, child care articles, and children's toys. Section 108 of the CPSIA defines “children's product” as “a consumer product designed or intended primarily for children 12 years of age or younger” and defines “child care article” as “a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething.” That same section of the CPSIA further defines a “children's toy” as a “consumer product designed or intended by the manufacturer for a child 12 years of age or younger for use by the child when the child plays.” Notably, with regard to children's toys, the CPSC looked to the ASTM International voluntary standard for guidance on what constitutes a “toy.” To that end, the CPSC made ASTM International voluntary standard, ASTM F963, a mandatory standard effective Feb. 10, 2009.

Product Testing and the Feb. 9, 2009 CPSC Enforcement Stay

Much of the concern over the effects of the CPSIA stems from Section 102 of that Act requiring manufacturers and importers of consumer products to go through mandatory third-party laboratory testing and acquire proper certification that their products comply with CPSIA standards governing children's products, children's toys, and child care articles. Section 102, along with others, was scheduled to go into effect on Feb. 9, 2009. However, on Jan. 30, 2009, the CPSC voted to stay enforcement of this provision along with certain others until Feb. 10, 2010, providing a temporary reprieve in exposure for businesses. See Statement of Acting Chairman Nancy Nord on the Stay of Enforcement of Certain Testing and Certification Requirements of the Consumer Product Safety Information Act of 2001, Op. CPSC (Jan. 30, 2009). The delay in enforcement also has afforded the CPSC more time to “develop and issue rules” while simultaneously giving Congress an opportunity to revisit the hastily crafted provisions of the CPSIA. However, the stay in enforcement does not excuse non-compliance. As it stands, the CPSC has declared that only importers and domestic manufacturers are required to provide certificates, based upon a “reasonable testing program” by an accredited testing laboratory. See Certificates of Compliance, 73 Fed. Reg. 68328 (Nov. 18, 2008) (amending 16 CFR ' 1110).

Though the stay has provided some relief for manufacturers and importers, it does not relieve them of their obligations to comply with the new lead and phthalate limits that went into effect on Feb. 9, 2009. Thus, while manufacturers and importers are not required to abide by the strict requirements of the CPSIA with regard to testing, in reality, they must nevertheless develop reasonable testing and certification practices now ' not only to ensure that the products do not exceed the lead and phthalate limits, but also to ready themselves for certification as of Feb. 10, 2010.

Section 102 of the CPSIA has also sparked confusion over what entities are subject to its mandates. For example, while charities, thrift shops, resellers, and small retailers are required to abide by applicable lead and phthalate limits, they are not under any obligation to actively test and certify compliance of the children's products they sell or distribute, even after Feb. 10, 2010. They too, however, should develop some reasonable methodology to ensure the products they sell and distribute do comply with lead and phthalate limits, though not mandated, in order to avoid the penalties and enforcement litigation that may result from inadvertently selling or distributing non-compliant products.

Lead Limits

Currently, under Section 101 of the CPSIA, children's products may contain no more than 300 ppm of lead. This is a reduction from the Feb. 10, 2009 limit of 600 ppm of lead that went into effect on Aug. 14, 2009. The limit will be further reduced on Aug. 14, 2011 to 100 ppm, if technologically feasible, or otherwise to the lowest level feasible if above 100 ppm. Also, on Aug. 14, 2009, the lead limit for lead paint was reduced to 90 ppm. Pursuant to the CPSIA, third-party laboratory testing and certification is required for all lead paint manufactured and utilized after that date.

In calculating the total lead content of a children's product, 16 CFR
' 1500 dictates that those component parts of a product “that are not accessible to a child” are not included. The CPSC, as it was required under the CPSIA, issued an interpretive rule providing guidance as to what components are deemed inaccessible ' the final rule was issued Aug. 7, 2009. The rule is embodied in 16 CFR ' 1500.87, which dictates that “accessibility probes” ' i.e., probes that simulate the size of children's fingers, be used to determine what portions of the product may be reached by the probe. If the probe cannot reach the product, it is “inaccessible” under the CPSIA. The product must also be able to withstand anticipated use and abuse ' the severity of which varies based on the age of the children the products are intended for'such that any lead-containing component remains inaccessible during the foreseeable life of the product.

In an effort to reduce the burden of the CPSIA, the CPSC issued a rule for exemption, found in 16 CFR ' 1500.91, determining which products, by their very nature, will not contain lead so as to exceed even the 100 ppm requirement in August 2011. Though one may view this rule for a complete listing, the products outlined tend to be those utilized in a natural state, not subject to any alteration, and include gemstones, wood, plants and the by-products thereof, and various natural fibers. That same rule also outlines which metals and alloys will not exceed 100 ppm of lead, and includes most stainless steels and precious metals.

Phthalate Limits

The CPSIA also regulates the inclusion of phthalates in children's toys and child care articles prohibiting more than .1% concentration of di-(2-ethylhexyl) phthalate (“DEHP”), dibutyl phthalate (“DBP”), and benzyl butyl phthalate (“BBP”) on a permanent basis, and diisononyl phthalate (“DINP”), diisodecyl phthalate (“DIDP”), and di-n-octyl phthalate (“DnOP”) on a temporary basis until further studies regarding their toxicity (or lack thereof) are concluded. (See “The CPSIA, CA's Phthalate Regulation, and Proposition 65: Living in Harmony?” By Michals and Epand in the November issue of this newsletter.) The testing and certification requirements for phthalates in most children's products, like those for lead, have been stayed until Feb. 10, 2010. Though initially there was some controversy surrounding whether the ban would apply only to newly created children's products (as of February 2009), as adjudicated in NRDC, Inc. v. United States Consumer Prod. Safety Comm'n , 597 F. Supp. 2d 370 (S.D.N.Y. 2009), ultimately, businesses must ensure that all products sold or distributed, no matter when manufactured, comply with the phthalate limits. Those limits apply only to the plasticized component parts of the items. See Test Method: CPSC-CH-C1001-09.2 ' Standard Operation Procedure for Determination of Phthalates, July 27, 2009 available at http://www.cpsc.gov/ABOUT/Cpsia/sect108.html.

Label and Warning Requirements For Children's Products

Pursuant to Section 103 of the CPSIA, manufacturers are required “to place permanent, distinguishing marks on children's products and their packaging to the extent possible.” Section 103 applies to all children's products, regardless of their lead and phthalate content. Though the mandates of this provision were initially stayed by the CPSC, as of Aug. 14, 2009, manufacturers are required to abide by its terms. To provide some guidance as to the breadth of Section 103, the CPSC released a Statement of Policy issued on July 17, 2009 noting that it was up to the “reasonable judgment of each individual manufacturer” how they choose to label and package their products to comply with Section 103(a) of the CPSIA. See Statement of Policy Concerning Tracking Label Requirements in Section 103(a) of the CPSIA, Op. CPSC (July 20,2009). Additionally, the CPSC decided that small volume manufacturers and crafters “need not create a labeling system incorporating the use of lot, batch, or run numbers so long as such manufactures can keep adequate records of the components used in their products.” Though the provisions of Section 103(a) are currently in force, the CPSC has acknowledged that “manufacturing changes cannot occur overnight” and maintained that it would work with manufacturers if additional time is needed to make labeling changes.

Books

The CPSIA triggered a number of concerns regarding the extent to which books were covered by its provisions. The CPSC addressed these concerns explaining that the lead limits of Section 101 do not apply to “ordinary books” because such books are “not intended or designed primarily for children.” See Op. CPSC, Legal Counsel No. 323 (Jan. 15, 2009). Moreover, the CPSC issued a ruling that most components of new books, which may in fact be intended for those 12 and younger, are not lead-containing, effectively exempting such books from the certification and testing requirements. See 16 CFR ' 1500.91. However, the CPSC explained that while most books would not be subject to phthalate and lead analysis, those books with “play value” for children 12 years and younger would be subject to such testing.

As neither manufacturers nor importers under the CPSIA, libraries are not required to test the books they lend out, however, this does not alleviate libraries and other purveyors of antique children's books from the burden of ensuring that these older books, whose components may be lead-containing, comply with the applicable lead laws. As a result, the CPSC intends to issue a “Statement of Policy addressing the treatment of older children's books.” See Children's Products Containing Lead; Determinations Regarding Lead Content Limits on Certain Materials or Products, Final Rule (Draft Federal Register Notice, Aug, 19, 2009).

The conclusion of this article will address recent activity relating to products such as electronics, bicycles and ATVs, the challenges imposed by implementation and the future of the CPSIA.

Jonathan I. Handler is a partner in the Boston office of Day Pitney LLP where, as part of his practice in complex commercial litigation, he represents product manufacturers in disputes and advises them on risk mitigation. William S. Rogers, Jr. is a partner resident in in the same office, where he is a member of the Commercial Litigation, Product Liability, and Nanotechnolgy Practices. Meredith French is an associate.