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Since the Consumer Product Safety Commission ("CPSC") began issuing its own import detention notices in June, some companies have struggled to obtain the release of detained products, particularly to determine the process the CPSC would follow and minimize the detention period.  The CPSC has now issued frequently asked questions ("FAQs") to help companies navigate the process.  Historically, Customs and Border Protection ("CBP") had issued notices for potential CPSC violations, so CPSC hopes to eliminate CBP as the middleman.

CPSC will send a detention notice to the importer of record, broker, and CBP, typically by e-mail.  If CBP has also detained the product, those issues will be resolved first.  CPSC will only detain products described in the notice, so the importer or broker should contact CBP to obtain the release of other products in the shipment.  Conditional release or exportation of products is also possible on a case-by-case basis.  Detention notices are not subject to protest, but companies will have five days to submit information supporting admissibility of the product and can request an administrative hearing.  CPSC will try to make admissibility decisions within 30 days of detention.

Given these new procedures, importers of consumer products should be in close contact with their brokers and respond quickly to detention notices.  Companies may also take a proactive approach by working with the CPSC compliance officer at CPSC headquarters to facilitate communications with the CPSC representative at the relevant port.

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The Consumer Product Safety Commission has announced proposed rules regarding the requirements for a “reasonable testing program” and other certification testing and the requirements for component part testing pursuant to the Consumer Product Safety Improvement Act. Domestic manufacturers and importers of children’s products and other products subject to a CPSC regulation or ban should track the development of the proposed rules and may consider incorporating some of the provisions now, in anticipation of a final rule.

Please view the Kelley Drye client advisory for more details regarding the "15 Month Rule" and component parts testing.

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This post was written by Megan L. Olsen and Christie L. Grymes.

On March 31, 2010, the U.S. Consumer Product Safety Commission (CPSC) announced a Final Rule that identifies and interprets factors the CPSC will consider when seeking civil penalties for knowing violations of the Consumer Product Safety Act (CPSA), Federal Hazardous Substances Act (FHSA), and Flammable Fabrics Act (FFA). As required by section 217(b)(2) of the U.S. Consumer Product Safety Improvement Act (CPSIA), this rule “provides the Commission’s interpretation of the civil penalty factors found in” section 20(b) of the CPSA, section 5(c)(3) of the FHSA, and section 5(e)(2) of the FFA. The Commission voted 4-1 to approve the Final Rule as amended. Chairman Tenenbaum and Commissioners Nord, Adler, and Moore voted to approve the Final Rule as amended, and Commissioner Northup voted not to approve the Final Rule.

This Final Rule has particular significance because the CPSIA expanded the actions subject to civil penalties, and increased the maximum civil penalty amounts from $8,000 to $100,000 for each “knowing” violation and from $1.825 million to $15 million for any related series of violations. The statutory factors the Commission must consider include: the nature, circumstances, extent and gravity of the violation, including the nature of the product defect or of the substance; the severity of the risk of injury; the occurrence or absence of injury; the number of defective products distributed or the amount of substance distributed; the appropriateness of the penalty in relation to the size of the business, including how to mitigate undue adverse economic impacts on small businesses; and such other factors as appropriate. The Final Rule provides the Commission’s interpretation of those statutory factors and identifies four additional factors: (1) safety/compliance program and/or system relating to a violation; (2) history of noncompliance; (3) economic gain from noncompliance; and (4) failure to respond in a timely and complete fashion to the Commission’s requests for information or remedial action. The Commission declined to consider the relative complexity of identifying and confirming the presence of a defect in a product.

In light of this Final Rule and the new civil penalty cap of $15 million, a company should take the opportunity now to review all aspects of its current product safety practices, including product development, vendor requirements, compliance with the conformity certificate and other technical requirements of the CPSIA, and how the company interfaces with the Commission. Such proactive steps now could drastically improve the company’s position in the event of a civil penalty investigation later. More information on the Final Rule and civil penalty factors can be found in Kelley Drye & Warren’s April 1, 2010 client advisory.

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This post was written by Megan L. Olsen and Christie L. Grymes.

On March 2, 2010, the Consumer Product Safety Commission (“CPSC” or “Commission”) announced a settlement agreement with Daiso Holding USA Inc., Daiso Seattle LLC, Daiso California LLC, and one of the companies’ officers (collectively, “Daiso”). The consent decree, filed by the Department of Justice on behalf of the CPSC, requires Daiso to pay a $2.05 million civil penalty and prohibits the company from importing, selling, or distributing children’s products and toys in the United States unless Daiso satisfies numerous requirements regarding product evaluation and incident review. The CPSC alleges that Daiso violated the Consumer Product Safety Act (“CPSA”), the Federal Hazardous Substances Act (“FHSA”), and the Consumer Product Safety Improvement Act (“CPSIA”) by importing, distributing, and selling toys with illegal levels of lead, lead paint, and phthalates, toys that had small parts intended for children younger than three years old, and products that lacked required warning labels.

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Late Friday the Consumer Product Safety Commission ("Commission" or  "CPSC") sent to Congress a report with recommendations for improving the Consumer Product Safety Improvement Act ("CPSIA"):

• Provide greater flexibility in granting exclusions from Section 101(a) of the CPSIA.  The CPSA has already tried to reduce any unduly burdensome effects of Section 101(a) where Congress may not have intended to include certain products within the scope of the lead content limits, but needs additional flexibility to grant exclusions for certain products, inicluding youth ATVs and bicycles, sporting equipment, and ordinary books.
• Exclude ordinary children's books and other children's paper-based printed materials.  Although the Commission has provided some relief for newer ordinary children's books, the staff has determined that some books printed before 1985 contain highly illustrated pages with lead content above the strict lead ban.  Congress may not have intended for the CPSIA to cover those books.
• Apply the 100 ppm Lead Content Limits Prospectively Only, Not Retroactively.  Based on the CPSC's experience implementing the lead content limits retroactively, market disruption may occur if the 100 ppm lead content limits are applied retroactively.  The new tracking label requirements will help to ensure that products manufactured after the 100 ppm deadline becomes effective are compliant.
• Address Concerns of Low-Volume Manufacturers.  The Commission will continue to consider the concerns of small manufacturers and crafters as it develops the mandatory rule on testing and certification.  The Commission stated that it remains committed to working with Congress to explore other ways to reduce the burdens on those entities, but offered no specific recommendation to Congress.

Chairman Tenenbaum and Commissioners Nord, Adler, and Northup issued individual statements in connection with the report.  The Commission prepared the report in response to a request from the House and Senate Appropriates Committees, the House Energy and Commerce Committee, and the Senate Commerce, Science, and Transportation Committee.

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On December 28, 2009, the Consumer Product Safety Commission (“CPSC” or “Commission”) issued a notice extending the stay of enforcement on lead-content testing and certification of certain children’s products pursuant to Section 102 of the Consumer Product Safety Improvement Act (“CPSIA”). The stay is for an additional year, to February 10, 2011^[1]. Chairman Inez Tenenbaum said in a statement, “The extension of the stay was needed in order to give the agency more time to promulgate rules important to the continued implementation of the CPSIA and for the agency to educate our stakeholders on the requirements of those new rules.” Although the Commission approved an extended stay on testing and certification for certain products, all products must continue to comply with applicable standards and bans.

Section 102 of the CPSIA and the CPSC’s related rule require every domestic manufacturer or importer of consumer products subject to any product safety rule under the CPSIA or similar rule, ban, standard, or regulation under any act enforced by the CPSC – and (1) imported for consumption and warehousing or (2) distributed in commerce – to issue certificates of conformity with the applicable standards. Those certificates must accompany all shipments of such products and be furnished to each distributor and retailer of the product. On February 9, 2009, the Commission announced a stay of enforcement for certain products that would remain in effect until February 10, 2010, when the Commission would vote on whether to terminate the stay. The stay only applied to the testing and certification requirements – the applicable mandatory safety requirements, such as the reduction in lead content and phthalates, continued to apply.

Since issuance of the stay, the Commission issued more than 20 Federal Register notices, statements of policy, guidance documents, proposed rules, interim final rules, and final rules pertaining to the CPSIA, and most of those documents related to testing and certification issues. Given that flurry of activity and the need for additional rulemaking and lab accreditation, the Commission in December announced the following phased-in approach of the testing and certification requirements.

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