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CPSC bill, increasing litigation, regulation, litigation

The conference report for H.R. 4040, Consumer Product Safety Modernization Act, is already scheduled on today's House suspension calendar, so an overwhelming vote for passage is expected. It could go to the Senate for a Friday vote and observers expect the President to sign it into law.

The full, 183-page conference report has been posted as a .pdf at the NAM's blog, Shopfloor.org, here.

The conference report reflects quite a bit of business input to bring balance to the legislation, in particular ameliorating Senate language (S.2045S.2663) or adding provisions to protect from the wildest of litigation. But the self-styled consumer activist groups, symbiotes of the trial bar, are still extremely pleased at the victory over "special interests." (Joint news release here and Consumer Affairs.com article.) Meanwhile, the Hill reports that the U.S. Chamber opposes the bill because it increases litigation and rejects sound science, such as in provisions banning phthalates. (UPDATE: Chamber lettter here.) An ugly precedent, that's for sure, as Congress moves toward a European "precautionary principle."

Key provisions from a litigation standpoint:

  • State attorneys general (Section 218) will have the authority to file for injunctive relief in federal court against products that violate a standard, are sold in violation of a recall, or violate new certification provisions in the act. An AG must also provide the CPSC a 30-day notice before court action, but there's a big loophole: Any time the attorney general alleges there is a substantial product hazard, he can file the suit immediately without any notice. So you won't have 50 self-appointed CPSC state officials running around enforcing their own state standards, but there's plenty of possible mischief in the law.
  • Whistleblower provisions (Section 219): Employers are prohibited from firing or punishing any employee who reports violations of consumer product safety laws. The self-identified "whistleblower' can file a complaint with the Secretary of Labor about such retribution and then can go on to U.S. District Court for satisfaction. Some corporate counsels are comparing these provisions to the whistleblower provisions in Sarbanes-Oxley. In any case, employment law has just expanded into new product safety areas -- Get in on the ground floor!
  • Public database (Section 212): The bill details, and we mean details a public database to disseminate consumer complaints, including anonymous complaints, naming manufacturers and products. The manufacturers get a chance to respond and unfounded or inaccurate will be corrected or explained. Supposedly.

More as the bill proceeds.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.