When President Obama signed into law H.R. 2715 on Aug.12, many in the bulk vending welcomed the news. The bill was intended to clarify and "fine tune" the Consumer Product Safety Improvement Act of 2008. To provide more detail on what the law means to vending operators and suppliers, VT's Hank Schlesinger caught up with Quinn Dodd, National Bulk Vendors Association attorney and lobbyist.
Dodd is sole practitioner in the field of U.S., state and international product safety law. He represents and advises testing labs, manufacturers, importers and retailers of consumer products on all aspects of statutory and regulatory requirements related to mandatory and voluntary product safety standards. His main area of expertise is product under the jurisdiction of the U.S. Consumer Product Safety Commission. Prior to initiating his own practice this year, Dodd was a partner with the Washington office of the law firm of Mintz Levin and previously served as chief of staff at the CPSC. He has also served in senior legislative staff capacities for members of Congress.
VT: The CPSIA reform bill has been signed into law. What was wrong with the original bill?
Quinn Dodd: A lot was wrong with the original reform legislation. It was pushed through Congress to respond to media attention surrounding defective products from China as much as it was to enact truly needed reforms and modernization of the statutes the CPSC was in charge of implementing. Most significantly and visibly, the CPSIA contained an unrealistic ban on lead and phthalates in children's products -- bans that were not supported by science, and that ignored the core function of the agency to assess actual risk to consumers and allocate limited resources accordingly.
The law also, for the first time, required certification of children's products to all mandatory standards, which caught many in affected industries, including bulk vending, off guard. For the first time, children's products were presumed guilty until proven innocent. There were a number of other controversial provisions of the CPSIA, including the creation of new and overly broad public database for consumer complaints, and generally unreasonable time lines for implementation that were very difficult for industry to adjust to, let alone the generally understaffed CPSC.
Q: Is this type of reform legislation common for regulatory bills?
A: In my approximately 20 years in Washington working both in Congress and in the private sector on many public policy and regulatory issues, this was the first significant legislation that literally threw out accepted notions of deference to agencies and regulation based on need and that simply said "We, Congress, want to punish industry, and damn the consequences."
Q: Did the CPSC fight the reforms? And is it true the legislation had bipartisan support?
A: Considering the overwhelming media and public support for "tough" consumer product safety reform, as well as political considerations in a presidential election year, CPSIA became a legislative freight train that no one, Democrats nor Republicans, wanted to publicly oppose. So the bill did pass with overwhelming majorities in the House and Senate. Also, most members of Congress did not understand the substantive issues enough to know exactly what they were passing, and many have since admitted as much, from both sides of the aisle. Unfortunately, at least early on, both Republicans and Democrats blamed the CPSC for implementing the law that they passed, over the very substantive concerns voiced earlier by former CPSC director Nancy Nord, objections that were the basis of the congressionally decried "unintended consequences" of the legislation.
Q: What were the key elements of the new piece of legislation that relate to the bulk vending industry?
A: By most accounts, HR 2715 truly was a compromise bill. It doesn't go nearly as far as many wanted in terms of CPSIA reform, but it forced the Democrats for the first time to admit that the bill did contain serious flaws. With regard to bulk vendors, in my view the new law contains five key provisions:
1) It makes the lead substrate limits of the CPSIA prospective rather than retroactive in application. So the new 100 parts per million lead substrate limit for children's products applies only to products made after Aug. 14, 2011, not to all existing inventory. Existing inventory cannot have more than 300 ppm.
2) It requires the CPSC to review the costs of third-party testing for children's products, especially for smaller businesses, and consider ways in which to mitigate those costs, including expanding the availability of "alternative" test methods.
3) It empowers the agency to grant "functional purpose" exemptions for the lead substrate limits so that lead in brass and possibly certain substances, like recycled plastics and metal alloys, would be allowed to have more than 100 ppm lead.
4) It exempts "inaccessible" (essentially not touchable or mouthable) phthalates from the CPSIA limit of 1,000 ppm for six specified phthalates. This is a good example of a much-needed change to a provision of the CPSIA that simply made no sense.
5) Finally, it grants the CPSC specific authority to exempt products or product categories (like bulk vended products) from the burdensome but so far lightly enforced "tracking label" mandate of the CPSIA. (I worked earlier with the NBVA to secure an informal exemption for bulk vended products at the CPSC, but this law should enable the agency to make that formal, and binding on state attorneys general and others).
Q: What do these changes mean for operators and suppliers in the short and long terms?
A: While I don't anticipate that these changes will fundamentally change the way in which bulk vendors' suppliers or operators conduct their product safety programs, they should provide some relief from the otherwise very strict and unforgiving provisions of the CPSIA. Suppliers, individually or collectively, may want to petition the CPSC for functional purpose exceptions from the lead substrate limits and should in any case heed CPSC guidance to date on where they are most likely to enforce that standard, as well as the mandatory phthalates and toy standards. Operators will likewise receive something more of a "safe harbor" for these and other children's product standards. In general, however, I advise all my clients to make sure products do, in fact, meet all applicable CPSC standards, and to allocate limited funds to verify and monitor that to those standards and issues (like lead and cadmium in children's products) where the risk of enforcement action is highest.