The Consumer Product Safety Improvement Act (“CPSIA”) was enacted in August 2008, following thousands of toy recalls during and after the 2007 holiday season. CPSIA is an ambitious undertaking, seeking to fundamentally reform consumer product safety in the United States. The law, however, has created a legal minefield for manufacturers, importers, warehousers, retailers, lenders and other participants in the consumer products industry.
This article provides a brief introduction to CPSIA, including a summary of some of the key provisions and an update on agency rulemaking. Throughout the article, we provide important tips for navigating the law. For additional insight, please visit our consumer products safety blog at www.ConsumerProductsLaw.com.
Duty to Test and Certify Consumer Products
Although CPSIA has received great attention for its impact on children’s products, the law includes a provision which significantly expands product testing requirements for many products. CPSIA requires every manufacturer and importer of a product that is subject to a consumer product safety rule, ban, standard, or regulation under any Act enforced by the Consumer Product Safety Commission (“CPSC”) to adopt a reasonable product testing program and then certify compliance.
A product requires certification if it is regulated in any way by the CPSC. Determining whether a product is regulated can be difficult, and requires analysis of a large range of laws and regulations, and even requires interpretive guidance. The CPSC enforces not only the Consumer Product Safety Act but also consumer products regulated under the Federal Hazardous Substances Act, the Flammable Fabrics Act, the Poison Prevention Act, the Children's Gasoline Burn Prevention Act, the Refrigerator Safety Act and the Virginia Graeme Baker Pool and Spa Safety Act.
The CPSC stayed enforcement of most CPSIA testing and certification requirements until February 10, 2010, but the stay does not provide much relief. First, the stay does not delay implementation of lead or phthalate content limits, it merely delays the requirement that manufacturers or importers of regulated products “prove” compliance through testing and certification. Second, the stay does not bind state attorneys general (AG’s) and thus the state AG’s may opt to enforce the testing and certification provisions. Moreover, third-party lawsuits may also challenge the stay.
It is thus important for manufacturers and importers to commence a program of testing to assure that products regulated by the CPSC comply with applicable rules, standards and guidance. In fact, states like California, Minnesota, and others have already begun to fashion their own product safety statutory frameworks.
New Requirements for Children’s Products
CPSIA requires an additional level of testing and several other requirements for “children’s products.” The scope of this new term of art has been subject to much debate in recent months.
A “children’s product” is defined under CPSIA as “a consumer product designed or intended primarily for children 12 years of age or younger.” In determining whether a consumer product is “primarily intended for children 12 years of age or younger,” several specific factors must be considered, including the manufacturer’s statement about the intended use of the product and whether children under 12 commonly recognize the product as intended for their use.
Given the dearth of authoritative guidance, applying the term to specific products is complex and precarious, particularly in light of the enhanced enforcement arsenal at the CPSC. We encourage companies to exercise caution when making this determination and to seek legal counsel to help address uncertainties and manage risks.
Lead Content Limit
CPSIA adopted a retroactive lead content limit for children’s products which is already in effect. As of February 10, 2009, children’s products moving through the stream of commerce may not have more than 600 parts per million (ppm) lead content by weight for any part of the product. The lead content limit will get progressively lower over the next three years, decreasing to 300 ppm on August 14, 2009, and then to 100 ppm on August 14, 2011, if technically feasible. This aggressive reduction of lead content in children’s products is proving traumatic to the industry.
Recently, the CPSC issued an enforcement policy indicating that it will not impose penalties against anyone for making, importing, distributing, or selling:
children's products made of certain natural materials, such as wood, cotton, wool, or certain metals and alloys that the CPSC has recognized rarely, if ever, contain lead;
ordinary children's books printed after 1985; or
dyed or undyed textiles (not including leather, vinyl or PVC) and non-metallic thread and trim used in children's apparel and other fabric products.
Companies may also find refuge in one of the three exemptions to the lead content limit once the CPSC completes its rulemaking. So far, the CPSC has not issued any rules with respect to the first two exemptions, which allow the CPSC to exempt a product if there is no risk of lead absorption or to exempt parts of a product that are inaccessible to a child.
The CPSC has issued rules relating to the third exemption, which allows the CPSC to establish alternative lead limits for electronic devices that cannot feasibly meet the 600 ppm lead content limit. On February 12, 2009, the CPSC published its Interim Final Rule on this exemption. The Rule exempts certain lead-containing component parts in children’s electronic devices that are unable to meet CPSIA lead limits due to technological infeasibility and in which the use of lead is necessary for the proper functioning of the component part. It also establishes new lead limits for specific products. Lastly, the Rule exempts components of electronic devices that are removable and replaceable, like batteries or light bulbs, and that are inaccessible when the product is assembled and in functional form.
Phthalate Ban: Children’s Toys and Child Care Articles
As of February 10, 2009, children’s toys and child care articles may not contain more than 0.1% of certain phthalates, which are chemicals used to soften plastic. Like the lead content standard, this standard has been held to apply retroactively to all products in inventory.
The scope of products which must comport with the phthalates ban is unclear. Under CPSIA, “children’s toy” means a children’s 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 and the term “child care article” means 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. The CPSC is evaluating many product categories to determine the scope of the regulation.
CPSC and State Enforcement
CPSIA magnified the CPSC’s recall authority, as well as civil and criminal penalties for noncompliance. The maximum civil penalty for violations of the consumer product safety laws is now $100,000 (previously $5,000) for each violation, up to $15,000,000 (previously $1,250,000) for a series of related violations. Willful and knowing violations of consumer product safety laws could lead to five years (previously one year) imprisonment. Directors, officers and agents of the manufacturer no longer must have actual notice of a violation to be criminally liable. In addition, the law includes a whistleblower provision to protect employees who report violations. State AG’s are also empowered to enforce CPSIA and may seek injunctive relief to stop the sale of products that do not meet federal requirements.
Compliance with the CPSIA may not be enough – Impact of State Laws
The preemptive reach of the Consumer Product Safety Act as amended by the CPSIA is unclear. For instance, CPSIA explicitly allows states to regulate consumer products if the state requirements are identical to the federal requirements. It also specifies that the CPSC may not expand the preemptive effect of the statutes it enforces through rulemaking. In addition, CPSIA provides that it does not preempt or affect certain state warning requirements (e.g., California’s Prop 65).
We continue to track the evolution and application of several state consumer product safety laws with care and will provide regular updates. If you are a business subject to CPSC regulation, it is very important to remain up-to-date on state consumer product regulations. States across the country are at various stages of adopting laws which require warning labels or other chemical content limits in children’s products.
Navigating the minefield of consumer product safety laws requires vigilance and careful risk management. If you manufacture, import, market, distribute, license, sell or resell a product that is subject to CPSC oversight or state consumer product regulations, you must be proactive. Develop a program for testing and certification of regulated products and confirm that your products are safe. Failure to implement a consumer products safety program for your company may have dire consequences, including product recalls, product confiscation or disposal, increased regulatory costs, enhanced enforcement penalties, damage to reputation, liability to customers, liability to license partners and increased risk of product liability.