In the aftermath of the Year of the Recall, as 2007 was dubbed by some consumer groups and the media, Congress reacted by passing sweeping legislation to reform existing product safety laws.
The Consumer Product Safety Improvement Act (CPSIA), signed into law in August 2008, amended the Consumer Product Safety Act and related laws, and is having a dramatic impact on a wide swath of industry involved in making, importing and selling consumer products in the United States. Some of the most far-reaching aspects of CPSIA include its new lead limits and ban on phthalates (a plasticizer), as well as its testing and certification requirements.
Significantly, the lead limits and phthalates ban apply retroactively to inventory. CPSIA's effects have been felt by manufacturers, importers, retailers and consumers of products as varied as cribs and ATVs, and the apparel industry is certainly not immune.
The current lead content limit (as of February 10, 2009) is 600 ppm; the lead content limit will be further reduced to 300 ppm on August 14 and then to 100 ppm (if technologically feasible) on August 14, 2011. For any part of a children's product (defined as "a consumer product designed or intended primarily for children 12 years of age or younger").
The phthalates ban prohibits DEHP, DBP and BBP (as well as temporarily banning DINP, DIDP and DnOP) in amounts of 0.1 percent or more in any children's toy (defined 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"), or child care article (defined as "a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age three and younger, or to help such children with sucking or teething").
Failure to comply with CPSIA may result in significant civil and criminal liability, including maximum civil penalties of $15 million and felony prosecution for willful violations of safety standards and prohibited acts.
An update on where we stand
The Consumer Product Safety Commission issued a one-year stay of certain testing and certification requirements shortly before they were to go into effect, in part due to a recognition that compliance would have proved unfeasible because acceptable testing methods had yet to be determined. Importantly, however, the substantive requirements (such as the lead limits and phthalates ban) remain in effect.
Intended as a temporary reprieve, the stay has provided limited practical relief for manufacturers that are struggling to find ways to assure retailers that their products are compliant, as anecdotal evidence suggests that many retailers are still requiring manufacturers to certify that their products meet CPSIA's standards.
The commission has affirmed that apparel intended for children 12 and younger must comply with the lead limits. In an effort to further provide clear and reasonable guidance, the commission recently issued a statement of its enforcement policy with respect to the lead limits.
In its statement, the commission clarified certain exemptions and exclusions, including those for product classes whose lead content is consistently below the lead limits. Included in the exclusions are dyed or undyed textiles (not including leather, vinyl or PVC), and non metallic thread and trim used in children's apparel and other children's fabric products.
Although this would appear to provide substantial relief for the children's apparel industry, this exclusion explicitly does not include any such products if they have undergone further treatment that may impart lead, if they are ornamented with metal, rhinestones or other objects, or if they have plastic or metal fasteners with possible lead content (such as snaps, grommets, zippers or buttons).
Furthermore, if a person has actual knowledge that a particular product exceeds the lead limits, even if it otherwise fits within the excluded product category, such product cannot be sold and the violation must immediately be reported to the commission.
The commission has also previously indicated that products such as sleepwear intended for children three and younger "facilitates sleep" and therefore must comply with the phthalates ban.
However, the broad definition of child care article in the phthalates section of the law has lead to confusion over what products Congress intended to regulate.
Aware of this uncertainty, the commission has issued an interim enforcement policy for phthalates that will focus on the products most likely to pose a risk, such as bath toys and other small, plastic toys intended for young children.
In addition to the requirements relating to lead, phthalates and certification, CPSIA contains many others, some of which are also quite substantial.
Meeting the burdens head on
The commission remains mindful of the chaos and confusion created by CPSIA, and continues to provide guidance on a near-daily basis to the extent possible within the constraints of the law.
Nonetheless, it is apparent that manufacturers and retailers are finding compliance with the law to be extremely burdensome and bewildering.
Even so, despite all the uncertainty, there are some best practices that manufacturers, importers and retailer can implement to foster compliance with the law.
The most obvious is to make product safety a priority, internally and publicly, and consistently make good faith efforts to comply with CPSIA.
This should include establishing clear lines of communication and authority for product safety matters, not the least of which include setting up policies and processes for responding to and reporting any product safety hazards or concerns.
In the event that a hazard or possible hazard is found, it should be reported to the Commission; fewer than half of the reports to the Commission result in recalls.
Additionally, although certification is currently not required, documentation may prove to be extremely valuable in the event a defense is needed.
Whenever possible, obtain declarations of compliance, or indemnifications, not just from manufacturers to retailers, but also from suppliers to manufacturers. Finally, now may be an ideal time to review insurance coverage for product safety issues, including recalls.
At the end of the day, if children are actually safer as a result of the new regulations, then perhaps all the uncertainty and havoc created by CPSIA is worth it.
But it is not yet apparent that the approach taken by Congress in enacting such a prescriptive law, and the commission's efforts to enforce it, will produce a result that effectively and appropriately addresses the concerns that arose out of the Year of the Recall.
Chuck Samuels is a member of the Washington office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and head of the firm's Consumer Product Safety Commission (CPSC) practice group. The group includes experts in product liability litigation, insurance litigation and federal regulatory issues. Farrah Short is an associate in the firm's Washington, D.C. office, practicing in the federal section.
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