At 4:40 a.m. this morning the House of Representatives voted 235-189 to pass H.R. 1, the continuing resolution to appropriate funds for the remaining of Fiscal Year 2011.

Included among the many amendments were several the National Association of Manufacturers had taken positions on. One was considered Friday, and we’re pleased to report that the outcome reflected the NAM’s position identified in a “Key Vote” letter sent to the House on Thursday.

By a vote of 239-183, the House approved an amendment sponsored by Rep. David McKinley (D-WV) to block the Environmental Protection Agency (EPA) from moving forward its plans to classify coal combustion residuals or coal ash as a hazardous waste under the Resource Conservation and Recovery Act. As Rep. McKinley explained in a news release when introducing the amendment:

Among other effects this proposed designation would create a legal and marketing stigma for products made with recycled CCBs – including wall board, concrete, and fertilizer – harming thousands of small businesses across the country in addition to the coal operators and power generators that recycle these by-products for business-to-business sale.

“Electricity costs will sharply rise and West Virginians will lose their jobs if the EPA is allowed to regulate fly ash as a ‘hazardous’ material,” McKinley said.

The House also voted 234-187 to approve Amendent 545 sponsored by Rep. Mike Pompeo (R-KS) to block funding for implementation of the Consumer Product Safety Commission’s new product safety complaint database. The NAM e-mailed a letter to the House urging support for the amendment as needed to delay and ultimately improve the complaint database, which as currently planned would provide too many opportunities for false or inaccurate reports. The result could unjustly tarnish a product or company and through the bad information actually undermine consumer product safety. (See earlier post, “CPSIA Update: How to Fix the CPSC Erratabase.”)

Testifying at a House hearing Thursday, Vice President Wayne Morris of the Association of Home Appliance Manufacturers (AHAM) did an able job reporting the concerns of manufacturers about a new product safety complaint database being launched by the Consumer Product Safety Improvement Act.

Morris was a witness at the House Energy and Commerce Subcommittee on Manufacturing and Trade’s hearing, “A Review of CPSIA and CPSC Resources.” (His prepared statement is here.) As AHAM’s news release summarizes:

AHAM’s testimony supports the creation of a public database and supports the funding necessary to properly execute this undertaking. However, it also AHAM’s viewpoint that the current design and operation of the web site decreases the quality and accuracy of information that will keep consumers safe, places unreasonable burdens on manufacturers, and does not require timely resolution of good faith material inaccuracy claims.

Manufacturers have proposed many ways to fix the database, Saferproducts.gov, as Morris made specific recommendations:

• Information should not be added to the public database while there is a pending claim of material inaccuracy.
• Eligible reporters to the database should be limited to those with first-hand information about the harm or with a relationship to the consumer – which, AHAM pointed out, was Congress’s intent.
• Registration of model or other descriptor information should be required where available. AHAM acknowledged that such information would be difficult to determine for some consumer products (such as rubber balls).

In her prepared statement, CPSC Commissioner Anne Northup called for Congress to enact two major changes to the way the commission does business, including modifications to improve the value of the product safety database. She testified that Congress, through the appropriations process, could immediately: (continue reading…)

The House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade has an excellent line-up of witnesses scheduled for its hearing Thursday on the Consumer Product Safety Commission and the Consumer Product Safety Improvement Act.

The first panel includes two CPSC commissioners, Chairman Inez Tenenbaum and Anne Northup. The second panel:

• Ms. Jolie Fay, founder of Skipping Hippos and secretary for the Handmade Toy Alliance.
• Mr. Wayne Morris, vice president for division services, Association of Home Appliance Manufacturers
• Mr. Rick Woldenberg, chairman of Learning Resources, Inc., an educational games and resources company
• Ms. Nancy A. Cowles, executive director of Kids In Danger

The Handmade Toys Alliance has emerged as the most effective grassroots organization in explaining how the CPSIA has done so much damage to small business operators who make hand-crafted products at home or in small shops. Many have been driven out of business by the CPSIA’s regulatory inflexibility and costs.

Wayne Morris represents manufacturers and will offer views of the threat posed by the new product safety database, which the CPSC has designed in such a way to invite inaccurate or even false complaints that could do damage to a company’s reputation with no effective recourse. Most troubling is the CPSC’s decision to expand the definition of those who can make complaints via the database, potentially allowing trial lawyers or activists to submit inflammatory comments for pecuniary or political reasons.

Rick Woldenberg is the tireless advocate for regulations that recognize the real world of business — the real world, period. His advocacy at the blog, CPSIA – Comments & Observations, has really moved the debate.

Strangely, on the eve of the hearing, Chairman Tenenbaum has chosen to publish a blog post about the complaint database cosigned by U.S. PIRG’s public health advocate, Liz Hitchcock. The post urges U.S. PIRG members to use the public safety database, but Congress never approved making such “consumer activist” groups acceptable reporters under the CPSIA. The definition of who qualifies to lodge a complaint was expanded far beyond the statute by a majority vote of the CPSC, led by Chairman Tenenbaum, and it’s that expansion that debases the database. Tenenbaum’s co-blogging at the site of a leading left-leaning activist group immediately before the hearing almost looks like a conscious poke in the eye to committee members.

UPDATE (9:20 a.m. Thursday): Rick Woldenberg covers the news leading up to today’s committee hearing.

The Consumer Product Safety Commission on Tuesday, Feb. 1, voted 4-1 to extend the deadline to Dec. 31 for third-party product testing and certification for lead content under the Consumer Product Safety Improvement Act. Only Commissioner Robert Adler voted against the extension.

The CPSC’s news release is here, and the draft statement for the Federal Register is here.

Commissioner Nancy Nord said:

This extension will … give the agency more time to complete the component testing proposed rule and the testing and certification proposed rule. Both these rules need to be in place before the stay of enforcement is lifted. While I would have preferred to specifically tie the lifting of the stay to the issuance of these rules, the December date gives everyone—the agency and manufacturers–a bit more time to prepare.

The stay of enforcement does not relieve anyone from complying with the underlying lead regulations. Therefore, consumer safety is not impacted by the agency’s action. Instead we have pushed off for a bit longer this burdensome third-party testing requirement. However, unless Congress changes the law, the testing requirement will go into effect at the end of December.

The National Association of Manufacturers and members of the NAM’s CPSC Coalition had sought the extension. We appreciate the CPSC’s decision that reflects the real obstacles businesses had encountered in trying to meet the unworkable requirements, and certainly agree with Commissioner Nord that Congress needs to fix the fundamentally flawed Consumer Product Safety Improvement Act.

More …

• Statement of Chairman Inez M. Tenenbaum on the Commission Approval of a Final Extension of the Lead Content Testing and Certification Stay of Enforcement, February 2, 2011 (pdf)
• Statement of Commissioner Robert S. Adler Regarding the Extension of CPSC Stay of Enforcement of Testing and Certification Requirements on Lead Content in Children’s Products, February 1, 2011 (pdf)
• Statement of Commissioner Anne M. Northup on the Extension of the Stay of Enforcement on the Testing and Certification of Certain Children’s Products for Total Lead Content, February 2, 2011 (pdf)

The Consumer Product Safety Commission has a nice Monday morning surprise, a “soft launch” of the new consumer product safety complaint database, SaferProducts.gov, which the National Association of Manufacturers believes is ripe for abuse.

Alston and Bird reported the news in a client advisory last Thursday, “Consumer Product Safety Commission Database to Become Operational on January 24, 2011, Weeks Earlier than Expected“:

This early “soft launch” was announced during a CPSC presentation on January 20, 2011. Manufacturers and others affected by the database now effectively have one full business day to prepare for the database’s launch….

Although the CPSC indicated that consumer reports of harm submitted during the soft launch would not be publicly viewable during the launch period, clients should still be prepared to respond promptly to reports of harm. Today’s unexpected announcement also suggests that clients should be prepared for other unexpected actions by the CPSC with regard to the database.

UPDATE (10:25 a.m.): To be fair, we should repeat the CPSC’s important note about the “soft launch”: “Reports and manufacturer comments collected during Soft Launch will not be published and searchable in the Database, even after the official launch in March 2011.” Rest of the post continues below …

The NAM detailed manufacturers’ objections in a Jan. 13 Capital Briefing, “CPSC to Roll out Product Safety Database“:

This database has alarmed manufacturers, who fear that it will become a poorly monitored site that encourages reputation-harming complaints. Unfortunately, the new rule invites the gaming of the database to the detriment of manufacturers of safe products, even to the point of expanding the definition of “consumer” and “public safety entities” those who can register an online complaint to include trial lawyers and activist groups.

Advertising Age’ latest report also spots the problems. From “Marketers, Meet the Feds’ Very Own Yelp“: (continue reading…)

The National Association of Manufacturers and numerous other business associations have sent a letter to the Consumer Product Safety Commission requesting a further extension of the stay delaying enforcement of the testing and certification requirements under Section 102(a) of the Consumer Product Safety Improvement Act (CPSIA) with regards to the lead substrate standard.

From the letter:

Consumer product safety is of the utmost importance to U.S. manufacturers and the retail community. Our organizations are deeply committed to ensuring a well-functioning and credible product safety regime – one that gives all stakeholders the confidence they need that children’s products are safe and appropriate to use. This means having definitive, clear and comprehensive rules that all companies can realistically be expected to comply with, combined with a predictable and transparent enforcement regime. Our businesses must be able to make decisions with a reasonable understanding of how to comply with federal safety rules. (continue reading…)

The Washington Post today previews the Consumer Product Safety Commission’s new product safety database in a page one story, “U.S. opening product safety records to public.”

[Major] manufacturing and industry groups have raised concerns about the public database, saying it may be filled with fictitious slams against their brands. Competitors or others with political motives could post inaccurate claims, business leaders say, and the agency will not be able to investigate most of the complaints.

Arguing that this could present a new burden in an already difficult economic environment, they are working behind the scenes to delay or revamp the project.

“We’re not opposed to a database,” said Rosario Palmieri, vice president of the National Association of Manufacturers. “We’re opposed to a database that’s full of inaccurate information.”

It’s a page one story. If only the Consumer Product Safety Improvement Act, which created the database, had received such a thorough journalistic examination when Congress was considering it. The NAM certainly made its objections known.

The CPSC’s web conference on the database begins at 10:30 a.m. on Tuesday. Details.

Good commentary recently in several legal areas of interest to manufacturers…

Writing at Forbes.com, Rich Samp of the Washington Legal Foundation covers the CSX Transportation Inc. suit against a Pittsburgh law firm. As we reported yesterday, the Fourth Circuit just revived the case, CSX v. Gilkison. From “Asbestos Lawsuits as Racketeering Scheme?”

Some defendants have successfully targeted absestos trial lawyers for their shady behavior (a WLF Web Seminar last April highlighted one example), and victims of asbestos litigation abuse had great hopes for a federal racketeering suit railroad firm CSX filed in 2007.  Those hopes flagged, however, when in March 2008, a federal trial judge dismissed CSX’s Racketeer Influenced and Corrupt Organizations (RICO) Act and state fraud claims as barred by the limitations periods of those two laws.

This week, the U.S. Court of Appeals for the Fourth Circuit, at the urging of CSX and a score of amici, including WLF (our brief here), vacated the district court’s opinion on the limitations issue and remanded the claims for further proceedings.

Walter Olson writing at Cato@Liberty welcomes the change in the leadership of the House Energy and Commerce Committee, “The Fall of the House of Waxman“:

Some lawmakers can talk a decent game about lean ‘n’ smart regulation, but no one ever accused Waxman of having a light touch. (The 900-page Waxman-Markey environmental bill, mercifully killed by the Senate, included provisions letting Washington rewrite local building codes.) He’s known for aggressive micromanagement even of agencies run by putative allies: his staff has repeatedly twisted the ears of Obamanaut appointees to complain that their approach to regulation is too moderate and gradual. More than any other lawmaker on the Hill, he’s stood in the way of any meaningful reform of the 2008 CPSIA law, which piles impractical burdens on small makers of children’s products, thrift stores, bicycles and others.

Chicago Tribune editorial, Dec. 23, “Lawsuit Loan Sharks“:

The offense of “champerty” has a long history in the law, and don’t let the Medieval-sounding name fool you: It’s alive and well in 21st-century Illinois.

Champerty involves financing someone else’s lawsuit in exchange for a cut of the payoff. The practice has expanded for more than a decade, thanks to weak laws, aggressive lobbying and erosion in ethical standards. Nowadays, litigation money-lenders woo potential plaintiffs with TV ads inviting anyone who has been in a car accident to give a call. They make upfront loans at enormous interest rates, getting paid back only if the case succeeds.

To protect the public against predatory practices, those loans should be covered by the same laws that govern any other type of consumer lending. Instead, litigation lenders have been pushing a bill in Springfield that would give them carte blanche to pocket a huge share of judgments won by individual plaintiffs with only a pretense of regulation. The Illinois Senate has approved a version of it, and a House committee has reviewed it with an eye toward a vote in January.

The bill is SB3322, and it’s being heard today in the Senate House Judiciary Committee. Travis Akin, executive director of Illinois Lawsuit Abuse Watch, has more on the bill here. If it becomes law in Illinois, look for other state legislatures to consider similar bills.

Sounds like the “trial lawyer tax break,” doesn’t it?

In an interview last week on the Hugh Hewitt Show, Rep. Fred Upton (R-MI), the incoming chairman of the House Energy and Commerce Committee, detailed the committee’s plans for action and oversight in the first few months of the 112th Congress. The Environmental Protection Agency’s aggressive agenda of regulatory excess will be a major area of attention. As Upton said, “From the start, we’ve said we’re not going to let this administration regulate what they’re unable to legislate.”

From the transcript, Chairman-elect Upton:

Lisa Jackson, the administrator of EPA, I think she might have testified one time before our committee the last two years. And we made the point of making sure that we don’t know whether we’re going to have to report to the IRS that she’s going to get free parking as a benefit up here on Capitol Hill, but she’s going to be up here a lot more. She’s going to need to defend what EPA is trying to do.

And I will say this. You know, since I talked to you last, EPA had threatened to do these boiler regulations. You know, this is involving, really, most businesses across the country. And we sent some pretty tough letters over the last four, six weeks. And they backed off on them. So that was a good sign.

And as we look at all these regulations that EPA has got their hands in, we’re going to be looking at all of them. And you might remember that as a matter of the Pledge, something that Kevin McCarthy did really good work on, and most Republicans, including myself, embraced this last fall, one of the planks in that was that we want to examine all of the regulations that impose costs that exceed, I want to say, it was $200 million dollars on businesses across the country.

So we’re going to take that up as an issue, and it’s one of the reasons why we’ve assigned Cliff Stearns to be the chairman of the very important subcommittee on oversight and investigations. And I would imagine that they’re going to, and I saw Cliff yesterday, he’s already got about his next three months of hearings, maybe as many as two a week, and beginning to plan out, and EPA’s going to be a part of that. And John Shimkus, too.

Throughout the wide-ranging interview, Upton is politically punctilious about the central role the Energy and Commerce subcommittees and their chairmen will play. He includes the Consumer Product Safety Improvement Act as one topic for legislative scrutiny under the newly renamed Commerce, Manufacturing and Trade Subcommittee, chaired by Rep. Mary Bono Mack (R-CA).

There’s also a brief discussion of John Engler’s move from the National Association of Manufacturers to the Business Roundtable.

Thank you to Hugh Hewitt and his team for producing the transcripts from his show. It’s an extra effort that helps make his show of such valuable for people who follow manufacturing policy.

Stephen Lamar, executive vice president of the American Apparel & Footwear Association, is testifying this morning before a Senate Commerce Committee’s subcommittee hearing, “Oversight of the Consumer Product Safety Commission Product Safety in the Holiday Season.”

Although speaking on behalf of the apparel and footwear industry, Steve’s prepared remarks are right in line with the points the National Association of Manufacturers has raised since the 2008 passage of the Consumer Product Safety Improvement Act (CPSIA). We’re glad he reminded the committee members of manufacturers’ diligent efforts to ensure the safety of consumer products, and of industry’s support for additional funding and staffing for the CPSC during the congressional debates.

Still, there can be no doubt the legislation does not comport with the real word. In other words, what an expensive, jobs-killing message. From Lamar:

It goes without saying that industry, consumer advocacy groups, bloggers, the media, and various other stakeholders across the spectrum have become more engaged than ever in product safety.

Regrettably, the legislation also mandated a series of controversial changes to the nation’s product safety rules that have created endless confusion, extensive burdens, huge costs, job losses, and irreparable damage to the business community. In many cases, these adverse consequences have come without improvements in product safety or public health. Among other things, the law mandated very strict lead and phthalate content restrictions. It required certifications of compliance for all consumer products for all safety standards, mandating third party testing for those standards involving children’s products (defined as 12 and under). It created a public database of product safety incidents. It authorized enforcement by state attorneys general and created whistleblower provisions. While many of these provisions reflect good intentions, the language of the CPSIA makes many of them difficult, if not impossible, to implement and enforce. Tight deadlines, rigid definitions, retroactively applied standards, requirements that do not reflect risk, and a “one size fits all approach” are all among the many problems that have made CPSIA implementation
challenging.

His testimony addresses one important issue that would make most people’s eyes glaze over, lead substrate. While “consumer activists” can speak broadly and high-mindedly about risks, threats and safety, manufacturers must tackle practical considerations making consumer products.

Steve closes with eight recommendations on product safety, many of which will require Congressional action in 2011.

Stephen Lamar’s prepared statement is here, and the hearing is being webcast here.