• New Federal Consumer Products Law: Tighter Lead, Phthalate Standards, Stronger CPSC Authority
  • November 13, 2008 | Authors: Christopher M. Young; George J. Gigounas
  • Law Firms: DLA Piper - San Diego Office ; DLA Piper - Washington Office ; DLA Piper - San Francisco Office
  • Landmark legislation has greatly expanded the regulatory powers of the Consumer Product Safety Commission (CPSC).

    The Consumer Product Safety Improvement Act of 2008 (the Act) substantially strengthens consumer product safety standards, mandates testing of children’s products and dramatically increases penalties for violations.

    Perhaps most notable are new, stringent restrictions on lead and phthalate content in consumer products, which will significantly affect companies that manufacture, import, distribute, wholesale or retail a wide range of consumer goods. Those engaged in such businesses should be fully advised of the new requirements and standards imposed by this legislation.

    The Act (15 U.S.C. § 2051 et. seq.), signed into law on August 14, 2008, represents in part a response to recent high-profile recalls of children’s toys containing lead in amounts above federal standards. The Act effectively bans lead in children’s products by setting a standard for lead at no more than trace amounts – starting at 600 parts per million for any product part and decreasing over time to 100 parts per million within three years (unless “technologically infeasible”). These are now the toughest lead standards in the world.

    The Act also permanently bans children’s products containing more than 0.1 percent of three types of phthalates—a class of plastic additives commonly used to make PVC plastic pliable and to disperse synthetic fragrances—and it temporarily prohibits three other types of phthalates pending review by a hazard advisory panel.

    The Act introduces further key changes, including new testing, packaging and reporting requirements, increased penalties and broader individual liability for violations, and whistleblower protection for employees. It also strengthens other consumer product safety standards, provides increased funding for the CPSC and expands the powers of the CPSC in enforcing its consumer product safety laws.

    Below is a brief summary of the provisions of the Act, followed by more detailed summaries of key provisions. A complete copy of the Consumer Product Safety Improvement Act may be read here: www.cpsc.gov/cpsia.pdf.

    Brief Summary

    Children’s products lead ban: Imposes gradually stricter limits on the amount of lead allowed in children’s products and bans products that violate these limits. Note: companies should also consider the effect of limits and testing standards imposed by state law, e.g., California Health & Safety Code § 25214.1, et seq.

    Children’s products phthalates ban: Also prohibits the use of certain phthalates in children’s toys or child care articles effective January 11, 2009.

    Mandatory third-party certification and testing of children's products: Places responsibility on manufacturers and private labelers to certify their products and to test for lead.

    Tracking labels for all children's products: Requires manufacturers of all children’s products, beginning August 14, 2009, to place "to the extent practicable" permanent distinguishing marks on the product and its packaging sufficient to identify information relevant for potential recall.

    Standards and consumer registration of durable nursery products: Directs the CPSC to study and develop safety standards for nursery products and either make the existing voluntary safety standards mandatory or enact stricter standards.

    Mandatory Toy Safety Standards: Requires that the current voluntary standards for toy safety be issued as mandatory standards enforced by the CPSC.

    Labeling Requirement for Advertising Toys and Games: Provides that when a toy or game requires a cautionary statement (e.g., regarding a choking hazard) the advertising for the product, including Internet sites and catalogues, must also bear that cautionary statement.

    All-Terrain Vehicle (ATV) Standard: Prohibits, beginning September 13, 2008, the importation or distribution in the US of three-wheeled ATVs. until a mandatory safety standard is adopted by the CPSC.

    Prohibition on Stockpiling: Extends provisions relating to consumer product stockpiling (i.e., collecting inventory prior to the effective date of a safety standard) to all statutes enforced by the CPSC.

    Identification of Supply Chain: Expands inspection and recordkeeping requirements on importers, retailers and distributors of consumer products by requiring the identification of the manufacturer of a product by name and address.

    Enhanced Recall Provisions: Authorizes the CPSC to use its recall authority when any rule under this Act or any other regulation or standard enforced by the CPSC is violated.

    Import and Export Restrictions: Expands the list of products prohibited from sale or import to the US.

    Whistleblower Protections: Establishes new whistleblower protections for employees of manufacturers, private labelers, distributors, or retailers of consumer products.

    Penalties: Significantly increases the civil penalties for violations of the Consumer Product Safety Act, the Federal Hazardous Substances Act, and the Flammable Fabrics Act, and broadens individual liability under these laws.

    Further Detail

    Children’s Products: Lead Ban

    The Act imposes gradually stricter limits on the amount of lead allowed in children’s products and bans products that violate the limits. A “children’s product” is defined as any consumer product designed or intended primarily for children 12 years of age or younger. See Section 108(e)(B). A “consumer product” is defined as “any article, produced or distributed (i) for sale to a consumer for use or (ii) for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, as school, in recreation, or otherwise.” See 15 U.S.C. § 2052(a)(1).

    The determination of whether a product is a “children’s product” hinges on several factors, including (i) the manufacturer’s own statement regarding the intended use of the product; (ii) whether the product is packaged, displayed or advertised as appropriate for use by children; and (iii) whether the product is commonly recognized as being intended for use by children. The CPSC may also follow the Age Determination Guidelines it issued in 2002 or any successor guidelines. See 15 U.S.C. § 2052(a)(2).

    The lead content limits for children's products – which are subject to certain important exclusions discussed below – are as follows (NOTE: companies should also consider the effect of limits and testing standards imposed by state law, e.g., California Health & Safety Code § 25214.1, et seq.):

    a. 600 ppm by weight, by January 11, 2009: Within 180 days after enactment, all children's products manufactured are to contain less than 600 ppm lead by weight for any part of the product. See Section 101(a)(2)(A).

    b. 300 ppm by weight, by August 14, 2009: Within 1 year after enactment, all children's products manufactured are to contain less than 300 ppm lead by weight for any part. See Section 101(a)(2)(B).

    c. 100 ppm by weight, by August 14, 2011, if not technologically infeasible: Within 3 years, 100 ppm is the standard, unless the CPSC determines that reaching 100 ppm would be "technologically infeasible." Such a determination may only be made after notice and a hearing. If 100 ppm is technologically infeasible, the CPSC must establish the lowest feasible level (below 300 ppm at least). See Section 101(a)(2)(C-D). The levels in these sections must be reviewed and reassessed every 5 years. See Section 101(a)(2)(E).

    d. Important exceptions regarding lead accessibility: The Act recognizes an important truth about many consumer products – while certain components may contain lead above allowable levels, if those components are inaccessible under reasonably foreseeable use conditions, they do not present a significant health risk. The Act exempts from the above lead limitations "any component part of a children's product that is not accessible to a child through normal and reasonably foreseeable use and abuse of such product, as determined by the CPSC." This includes parts that are not physically exposed because of a sealed covering or casing. "Reasonably foreseeable use and abuse" includes swallowing, mouthing, breaking, other children's activities and aging of the product. See Section 101(b)(2)(A).

    Within a year, the CPSC will provide guidance indicating which component parts are considered inaccessible. It will also evaluate whether certain electronic devices, including battery-operated devices, must comply with these limits. Importantly, the Act provides that paint, similar surface coatings and electroplating are not considered barriers that would make any lead content inaccessible to a child. See Section 101(b)(3).

    e. Lead paint ban becomes more stringent by August 14, 2009 – with exception for small surface areas: Effective 1 year after enactment, the ban on lead in surface coatings (16 CFR 1303.1) will be reduced from .06 percent (600 ppm) to .009 percent (90 ppm). See Section 101(f)(1).

    The Act recognizes need to exempt products with very small areas of surface coating. Manufacturers may use special screening techniques, such as x-ray fluorescence, to measure lead in paint on products with surface coatings no greater than 10 milligrams or no greater than 1 square centimeter. The maximum lead by weight in such products is 2 micrograms. See Section 101(f)(3). The CPSC is to develop regulations for testing protocols for these small amounts.

    Children’s Products: Phthalates Ban, Effective January 11, 2009

    The Act prohibits the use of certain phthalates in children’s toys or child-care articles effective January 11, 2009. Like a “children’s product,” a “children’s toy” is defined by the Act as a 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.” A “child care article” is defined as a “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.” See Section 108(e).

    Toys or articles containing concentrations of more than 0.1% of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP) or benzyl butyl phthalate (BBP) are permanently prohibited. Children’s toys which can be placed in a child’s mouth or other child-care articles containing concentrations of more than 0.1 percent of diisononyl phthalate (DINP), diisodecyl phthalate (DIDP) or di-n-octyl phthalate (DnOP) are prohibited until final rules are enacted by the CPSC following a study on the effects of phthalates on children’s health. See Section 108.

    Mandatory Third-Party Certification and Testing of Children's Products

    A key provision of the Act places responsibility on manufacturers and private labelers to certify their products and to test for lead. This provision is designed to address historical problems with products manufactured in China.

    The practical effect of this provision on foreign manufacturers (who are, for the most part, unlikely to be prosecuted for violations in the United States) is unclear. It appears likely that, in most cases, importers, wholesalers, distributors and retailers may effectively have to take responsibility for the certification and testing requirements. See Section 102(a).

    a. General conformity certification, by November 12, 2008: Every manufacturer of a product (and the private labeler of such product if the product bears a private label) which is subject to a CPSC consumer safety rule and which is "imported for consumption or warehousing or distributed in commerce” shall: (1) certify based on testing that the product meets all applicable rules; and (2) list all of those applicable rules. See Section 102(a)(1).

    b. Third party testing and certification requirement, timing is contingent: Every manufacturer or private labeler of a children’s product shall: (1) submit sufficient samples of each product to an accredited third party testing facility; and (2) provide a certificate showing that the product passed all applicable testing. See Section 102(a)(2).

    The timing of this requirement is dependent on the issuance of laboratory accreditation standards by the CPSC. The date by which CPSC must develop these accreditation standards varies by category. Parties then have 90 days from that date to actually implement the testing program.

    The earliest of the deadlines for implementation will be for lead paint (December 22, 2008), cribs and pacifiers (January 2009), and CPSC “small parts” (February 2009) and metal jewelry (March 2009). See Section 102(a)(3)(B).

    Tracking Labels for All Children's Products, by August 14, 2009

    Effective August 14, 2009, manufacturers of all children’s products must place, "to the extent practicable," permanent distinguishing marks on the product and its packaging sufficient to identify the manufacturer, production time period, source of production and other relevant information to facilitate the recall of the product if necessary. The provision applies to all children’s products, including items such as clothing or shoes. See Section 103. Note that the language of this section (and the logistics of what is required) put the responsibility on the manufacturer to provide such markings. Effective October 12, 2008, the Act also prohibits manufacturers from referring to any safety standard on product packaging, advertisements or labels unless the product actually complies with that standard. See 103(c).

    Standards and Consumer Registration of Durable Nursery Products

    The Act requires the CPSC to study and develop safety standards for nursery products and either make the existing voluntary safety standards mandatory or enact stricter standards. Two of these rules are to be promulgated by August 14, 2009, and the CPSC will continue to promulgate two more rules every six months until all products have mandatory standards. See Section 104(b).

    Moreover, the Act makes it a violation to manufacture, sell, contract to sell or resell, lease, sublet, offer, provide for use or otherwise place into the stream of commerce any crib that does not meet the new standards once such standards are promulgated. This not only applies to child care centers and family child care facilities but also to places of public accommodation such as hotels. See Section 104(c).

    On August 14, 2009 the CPSC will issue a final rule requiring manufacturers of durable nursery products to provide a postage prepaid registration card so as to facilitate the recall process for these products. See Section 104(d). A durable nursery product is defined as “a durable product intended for use, or that may be reasonably expected to be used, by children under the age of 5 years” including full-size cribs and nonfull-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, bassinets and cradles. See Section 104(f).

    Mandatory Toy Safety Standards

    The Act makes the current voluntary standards for toy safety (ASTM F963) mandatory consumer product safety standards issued by the CPSC. See Section 106.

    Labeling Requirement for Advertising Toys and Games

    The Act provides that when a toy or game requires a cautionary statement (i.e., regarding choking hazards) the advertising for the product, including Internet sites and catalogues, must also bear that cautionary statement. See Section 105. Requirements also exist governing the layout, type, language, color and placement of the statement. See Section 105(c)(1)(C).

    Manufacturers are required to inform retailers of any cautionary statement requirement, and retailers must also inquire whether there is any such requirement. When retailers inquire whether such requirements exist and the manufacturer supplies them with false information, or fails to reply at all, then the retailers will not be liable for violations of the labeling requirement. See Section 105(c)(1)(B).

    All-Terrain Vehicle (ATV) Standard

    Beginning September 13, 2008, three-wheeled ATVs cannot be imported or distributed in the US until a mandatory safety standard is adopted by the CPSC. The Act also makes the current voluntary standard for four-wheeled ATVs a mandatory consumer product safety standard to be published by the Federal Register by November 12, 2008. The standard will become effective 150 days after such publication. At that time, new ATVs must comply and have an ATV Action Plan approved by the CPSC setting safety requirements and a label certifying compliance with the action plan. See Section 232.

    Prohibition on Stockpiling

    The Act extends provisions relating to consumer product stockpiling to all statutes enforced by the CPSC. This effectively prohibits the manufacturing or importing of a consumer product in advance of the effective date of a new product safety rule at a rate greater than the rate at which that product was produced or imported prior to the promulgation of that rule. See Section 213.

    Identification of Supply Chain

    The Act expands inspection and recordkeeping requirements on importers, retailers and distributors of consumer products by requiring the identification of the manufacturer of a product by name and address. Manufacturers are also required to keep records of all retailers and distributors of the consumer product as well as the subcontractors used in the manufacture of the product. See Section 215(c).

    Enhanced Recall Provisions

    The Act authorizes the CPSC to use its recall authority when any rule under this Act or any other regulation or standard enforced by the CPSC is violated. This includes not only consumer products but any product over which the CPSC has jurisdiction.

    The Act also gives the CPSC authority to recall “imminently hazardous consumer products,” which are defined as presenting “imminent and unreasonable risk of death, serious illness, or severe personal injury.” Finally, the Act establishes guidelines for the information that should be included in recall notices. See Section 214.

    Import and Export Restrictions

    The Act expands the list of products prohibited from sale or import to the US to include those products not in conformity with any rule, standard or other act enforced by the CPSC, not just consumer product safety standards and banned hazardous products. Other products prohibited from sale or import include those subject to a voluntary corrective action taken by the manufacturer in consultation with the CPSC, products subject to an order issued under the imminent hazards or recall of products provisions, and banned hazardous substances as defined by the Federal Hazardous Substances Act. See Section 216.

    In addition, the Act prohibits the export of these products to countries outside the US and allows the CPSC to prohibit the export of any product not in conformity with a product safety rule (unless the country notifies CPSC that it will accept the product). See Section 221.

    Whistleblower Protections

    The Act establishes new whistleblower protections for employees of manufacturers, private labelers, distributors or retailers of consumer products. Such employees are protected from any retaliatory action resulting from the employee’s supply of information to the employer or the state or federal government relating to any violation of any laws enforced by the CPSC. These protections became effective upon enactment, on August 14, 2008. See Section 219.

    Penalties

    The Act significantly increases the civil penalties for violations of the Consumer Product Safety Act, the Federal Hazardous Substances Act and the Flammable Fabrics Act from $8,000 to $100,000 for each violation. The maximum fine for a related series of violations is increased from $1.825 million to $15 million.

    Furthermore, criminal liability may now include penalties of up to $500,000, up to 5 years imprisonment, or both.

    The Act also allows the Commission to seek asset forfeiture as a penalty and removes the previous requirement that directors, officers and agents could only be penalized for a company’s non-compliance if they violated federal consumer product safety standards knowingly. See Section 217.