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Jul 2009
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July 27, 2009

And The New Product Safety 'Hits' Just Keep On Comin' Are You Prepared for the CPSIA?

The recently enacted Consumer Product Safety Improvement Act of 2008 (CPSIA) has proven to be the widest-sweeping, most aggressive product safety enactment since the creation of the U.S. Consumer Product Safety Commission (CPSC) in 1972. The Act greatly expands the authority of the CPSC, places new obligations on manufacturers, importers, distributors and retailers of consumer products and includes massive increases in allowable civil penalties effective August 14, 2009.

While much of the CPSIA focuses on children's products, many of its provisions apply across the board to all consumer products, i.e. any product used in or around the home, in schools or during recreation. Provisions of the Act applicable to all consumer products include:

General Conformity Certification: Manu­facturers, private labelers and importers of any consumer product subject to a consumer product safety rule (or any similar rule, ban, standard or regulation enforced by the CPSC) must issue a General Conformity Certificate for each product certifying that the product complies with applicable rules, bans or standards. The General Conformity Certificates must be based on product tests or reasonable testing programs and must specify each rule, ban, standard or regulation applicable to the product. For purposes of the General Conformity Certificate, product testing or testing programs need not be conducted by a CPSC-accredited third-party lab and parties may rely on supplier testing.

Heightened Reporting Requirements: Prior to the CPSIA, manufacturers, distributors and retailers of consumer products were required to immediately report to the CPSC (and potentially initiate a product recall) when they obtained information that their product contained a defect that could create a "substantial product hazard," which was generally understood to mean a hazard that could create an unreasonable risk of serious injury or death. Under the CPSIA, companies must now not only immediately report to the CPSC when they learn of substantial product hazards, but also when their product fails to comply with any rule, standard or ban enforced by the CPSC, presumably without regard to any potential risk of harm. Rules, standards and bans enforced by the CPSC include not only those under the Consumer Product Safety Act (CPSA) but also those set forth under the Federal Hazardous Substances Act, Flammable Fabrics Act, Poison Prevention Packaging Act and Refrigerator Safety Act.

Increased Civil Penalties: The CPSIA substantially increases monetary penalties for failure to comply with rules, standards and bans enforced by the CPSC. Under the Act, the maximum civil penalty will increase from $8,000 to $100,000 for each violation. The maximum total civil penalty for any series of related violations will increase from $1.825 million to $15 million. The new penalties go into effect on August 14, 2009.

The CPSIA's largest impact will be on manufacturers, importers, distributors and retailers of children's products. And, as defined by the Act, children's products include much more than just toys. A "children's product" is defined as any consumer product designed or intended primarily for children 12 years of age or younger. This includes clothing, footwear, furniture, books, crafts, jewelry, blankets, games, CDs/DVDs, strollers, sports equipment, bicycles, off-road vehicles and just about any other product imaginable that is designed for use by children 12 and under. New CPSIA require­ments for children's products include:

Ban on Lead: The CPSIA significantly lowers allowable lead content in all children's products. Under the Act, any children's product that contains more than 600 parts per million (ppm) of lead in any accessible part is deemed a banned hazardous substance. The same limit applies to lead content of paint used on children's products. These limits went into effect on February 10, 2009, which was the first step in the CPSIA's planned three-year phase-down of lead content limits.

Ban on Phthalates: The Act permanently bans the manufacture, import and sale of toys and child care articles containing concentrations of more than 0.1 percent of di-(2-ethylhexyl) phthalate (DEHP), dibutyl phthalate (DBP), or benzyl butyl phthalate (BBP). The Act also places an interim ban on the manufacture, import or sale of any children's toy that can be placed in a child's mouth or child care article that contains concentrations of more than 0.1 percent of diisononyl phthalate (DINP), diisodecyl phthalate (DIDP), or di-n-octyl phthalate (DnOP).

Adoption of ASTM F963: The CPSIA adopted as mandatory the toy safety specifications set forth in ASTM F963–07e1. The standard sets forth safety requirements, labeling requirements and test methods for certain toys and hazards including: (1) hazards caused by the ingestion or inhalation of magnets in children's products; (2) toxic substances; (3) toys with spherical ends; (4) hemispheric-shaped objects; (5) cords, straps, and elastics; and (6) battery-operated toys. All toys manufactured after February 10, 2009, must comply with ASTM F963-07e1. Recently, ASTM proposed and CPSC approved substantially all of a revised standard, ASTM F963-08. Effective August 17, 2009, the revisions in ASTM F963-08 (except for revisions addressing toy chests) become man­datory consumer product safety standards.

Mandatory Third-Party Testing/Cer­tifi­ca­tion: Under the Act, manufacturers and importers of children's products must test their products using a CPSC-accredited independent testing lab and, based on the testing, must certify that the products meet all applicable CPSC requirements. Products may not be imported or sold in the U.S. without the required testing and certifi­cation. On January 30, 2009, the CPSC issued a one-year stay of enforcement of the new testing/certification requirement as it applies to certain standards. Specifically, third-party testing/certification for compli­ance with the new total lead content limits, phthalates limits and ASTM mandatory toy standards will not be required until February 10, 2010. Although no third-party testing or certification will be required under these standards, products must still comply with the new lead, phthalate and mandatory toy standards. The CPSC stay of enforcement does not apply to third-party testing/certification for compliance with (1) new lead limits for paint and surface coatings, (2) regulations for cribs and pacifiers, (3) the small parts toy regulations, or (4) lead content requirements for children's metal jewelry. Products subject to these standards are required to be tested and certified by CPSC-accredited labs prior to sale.

While several new rules for children's products have already taken effect, many are yet to come. Since enactment of the CPSIA, the CPSC continues (almost weekly) to roll out new rules and regulations. The month of August 2009 will be no exception, during which three significant changes are scheduled to take effect:

Product Tracking Labels: Effective August 14, 2009, all manufacturers and importers must place permanent, distinguishing marks on children's products and their packaging to enable the end-purchaser to determine (1) the name of the manufacturer or private labeler, (2) the location of production, and (3) the date of production along with cohort information (including the batch, run number, or other identifying characteristic). Recently, the CPSC rejected industry requests to stay enforcement of the tracking label requirement and, on July 21, 2009, issued guidance on interpretation of the new rule. According to the CPSC, a required "permanent" mark is "a mark that can be reasonably expected to remain on the product during the useful life of the product." All product tracking information need not be marked in one discrete location (or on one label) and the CPSC will instead evaluate the totality of information permanently marked on the product or package. Under certain circum­stances, manufac­turers will be permitted to mark only the packaging and not the product (e.g. if a product is too small to be marked). As to initial enforcement, the CPSC indicates that it may not seek penalties for inadvertent omissions of marks if a company can show good-faith efforts to comply with the rule.

Product Warnings in Advertising: Under the Federal Hazardous Substances Act, the packaging for certain toys and games is required to contain warnings regarding choking hazards. The CPSIA requires that any advertising that provides a direct means of purchase for these products must also contain an appropriate warning. Advertising "providing a direct means of purchase" includes (1) hard-copy product catalogs and other printed materials that contain order blanks, telephone numbers or fax numbers for placing orders, and (2) Internet Web sites that enable consumers to purchase a product online or through the use of a telephone or fax number. Under the new rule, when a product's packaging requires a warning, the advertising for the product must also bear an appropriate warning. CPSC regulations set forth specific requirements for layout, type, language, color and placement of the warnings. The warnings requirement for advertise­ments in catalogs and other printed materials becomes effective on August 9, 2009. Internet sites were required to be compliant by December 12, 2008.

Lower Lead Limits: Effective August 14, 2009, the total lead content limit for children's products will drop to 300 ppm. The limit for lead paint surface coatings will drop to 90 ppm.

In addition to issuing new child-safety regulations, the CPSC has recently sent the clear message that it will aggressively enforce its rules. From April through July 2009, the CPSC issued record-high civil penalties totaling more than $5.1 million against manufacturers, importers and sellers of children's products for violation of child safety rules. Because of the CPSC's stepped-up enforcement efforts, it is especially important for manufacturers, importers, distributors and retailers to become informed about the CPSIA, determine which requirements apply to their products and timely implement any necessary changes.

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Warner Norcross & Judd's Consumer Product Safety Group is actively advising clients regarding CPSIA interpretation and compliance. Members of the group have represented clients in CPSC matters for nearly 30 years and routinely counsel clients in all areas of consumer product regulatory compliance. The group represents manufacturers, distributors and retailers in reporting to the CPSC under Sections 15 and 37, conducting product recalls and defending CPSC enforcement actions. A substantial portion of the group's practice is also devoted to helping clients take proactive measures to minimize risk and avoid costly recalls and enforcement actions. The group frequently advises clients regarding product development and testing, product safety policies, recall procedures, product warnings and instructions, document control and product advertising. If a recall becomes necessary, members of the group have the depth of knowledge and experience with the CPSC necessary to achieve the best possible results. Members of the group have prepared, negotiated and conducted small and large-scale recalls involving all types of consumer products, including furniture, appliances, electrical components, crafts, toys and other children's products. In a landmark CPSC action, WNJ attorneys organized and negotiated one of the nation's largest consumer product recall programs involving the entire U.S. household furnace and boiler industry along with manufacturers of plastic vent pipes. Regardless of the size of the project or client, WNJ's Consumer Product Safety Group is committed to offering unparalleled CPSC regulatory expertise, client service and cost-effective solutions. If you have questions about the CPSIA or other product regulation issues, please contact Chris Predko, chair of the Consumer Product Safety Group, at 616.752.2190 or cpredko@wnj.com.

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