Are We Having Fun Yet? The Consumer Products Safety Improvements Act - A Year in Review
Joanne M. Murray, Esq. on 9/4/2009
About The Author
Antheil Maslow & MacMinn
Retail sales of traditional toys in 2007 totaled approximately $22.2 billion according to the U.S. Toy Industry Association, the nation’s leading toy trade association. The same source reports that sales of video games reached approximately $21.4 billion in 2007. Add to these figures the nearly $2 billion in products exported by the U.S. toy industry in that year and it becomes clear that the toy industry is not just kids’ stuff.
In August 2008, Congress passed the Consumer Product Safety Improvement Act of 2008 (the “CPSIA”), codified at 15 U.S.C. §§ 2051 et seq. This law was passed in response to the significant increase in the number of product recalls in 2007, particularly recalls of toys imported from China containing dangerous levels of lead.
Some of the requirements contained in the CPSIA are already in force, some are scheduled to go into effect in the coming months, and the implementation of some has been stayed for a year or more. To say the least, it has been a tumultuous year for the Consumer Product Safety Commission (the “CPSC”) and the consumer product industry.
The CPSIA has had a sweeping impact on manufacturers and importers of consumer products. As required by the CPSIA, the CPSC quickly issued regulations interpreting the new legislation, with the promise of more regulations to come. The bulk of the new requirements imposed by the CPSIA involve children’s products. In general, the CPSIA defines “children’s products” as a consumer product primarily designed or intended for children age 12 or younger. 15 U.S.C. § 2052.
The following is a summary of the key components of this legislation.
Section 102(a)(1) of the CPSIA (codified at 15 U.S.C. § 2063(a)(1)) requires manufacturers and/or importers to certify, based on a test of the product or a reasonable testing program, that the product complies with all applicable rules, bans, standards and regulations under the Consumer Product Safety Act (the “CPSA”) or any other law that is enforced by the CPSC. This certificate is referred to as a “general conformity certificate.” These rules were scheduled to go into effect on November 12, 2008, but enforcement by the CPSC was stayed in February 2009 for one year. 74 Fed. Reg. 6,396 (2009).
The product testing may be done by the manufacturer itself, or the manufacturer may elect to have an independent third party laboratory test the product (unless the manufacturer creates children’s products where, as discussed below, independent third party testing is or will be required). Although it is an added cost, one advantage of having an outside lab test the product is the potential defense it affords the manufacturer against product liability claims.
As noted above, “children’s products” are generally products that are designed or intended primarily for children age 12 and younger. A list of accredited labs may be found on the CPSC’s website (www.cpsc.gov). The law does permit the establishment of manufacturer in-house testing laboratories, but imposes stringent requirements on those laboratories (which are called “firewalled labs”).
Because of the confusion and public outcry regarding this rule, the CPSC issued a one-year stay of enforcement (the “Stay”) of the third party testing requirement for certain (but not all) products. 74 Fed. Reg. 6,396 (2009). The Stay is intended to enable the CPSC to refine and clarify its regulations, and it provides a much-needed (although decidedly imperfect) reprieve for the business community. Although the Stay temporarily relieves manufacturers from the obligation to have certain toys tested by an independent third party laboratory, manufacturers are still required to comply with the underlying bans as and when they become effective. For example, while a manufacturer is not required to certify, based on third party testing, that an item does not contain lead in excess of the acceptable level identified in the statute, the manufacturer is still prohibited from distributing products containing lead in excess of those levels. Similarly, importers are prohibited from distributing foreign-made products with excessive lead content. The only relief is that the CPSC will not enforce these regulations until February 2010.
As a result of the Stay, testing for total lead content and phthalate levels will go into effect in February 2010. The Stay does not affect the third party testing requirement for the following products, which went into or will go into effect on the dates set forth below:
Third Party Testing Required
Cribs and pacifiers
Lead content in children’s metal jewelry
Baby bouncers, walkers and jumpers
Children’s product safety rules
Section 103 of the CPSIA (15 U.S.C. § 2063(a)(5)) requires that to the extent practicable, manufacturers must affix a tracking label or permanent mark on all children’s products and their packaging that identifies the source of the product, the date of manufacture and more detailed information about the manufacturing process (such as a batch number). Note that this new provision applies not only to toys but also to other children’s products such as clothing, accessories, and shoes. This requirement went into effect on August 14, 2009.
The tracking label requirement generated much controversy, as some manufacturers expressed concern about the feasibility of affixing a label or mark on small products, items sold in bulk, and items for which such permanent labels would be aesthetically displeasing (such as jewelry). Manufacturers producing smaller quantities of products were concerned about the expense to restructure their manufacturing processes to include lot, batch and run labeling systems.
In response to this industry uproar, the CPSC recently issued a policy statement to assist manufacturers in their compliance efforts. In this statement, the CPSC recognizes that the tracking label regulation is not a “one-size-fits-all” regulation; rather, the CPSC admits that compliance is up to the manufacturer’s reasonable judgment. When evaluating a manufacturer’s compliance, the CPSC will consider the individual manufacturer’s situation, along with the practices of its peers. The CPSC also notes that the tracking label requirement is subject to a practicability standard and suggests that in the following situations, marking the product itself might not be practicable:
- If a product is too small to be marked;
- If a toy is meant to be stored in a box, such as a board game (the board itself and the box must be marked, but the individual game pieces need not be marked);
- If a product is sold through a bulk vending machine (similar to the vending machines selling capsules containing small toys in a supermarket lobby);
- If a physical mark would damage the product or impair its utility;
- If the aesthetics of the product would be adversely affected (for example, small pieces of jewelry); and
- If the product surface would be difficult to mark, such as small pieces of fabric, beads, and elastic (for example, hair ornaments, jewelry, etc.).
The CPSIA contains different acceptable levels for different types of phthalates. These standards went into effect in February 2009, although the CPSC stayed the enforcement of these rules until February 2010. As discussed above, this stay does not relieve manufacturers from their obligation to comply with the underlying standards. Notably, the CPSC has opined that the new standards apply only to products manufactured after the effective date and not to products in inventory on that date.
Section 108 also charges the CPSC with the task of establishing a Chronic Hazard Advisory Panel to study the effect of phthalates on children’s health.
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