September 13, 2007

Senate Bill Introduced Would Make Sweeping Changes at CPSC
New law could substantially increase enforcement and penalties for industry

On September 12, 2007, Senator Mark Pryor (D-Arkansas), with Senator Daniel Inouye (D-Hawaii), introduced the CPSC Reform Act of 2007 (S.2045), which, if enacted, would make sweeping changes at the Consumer Product Safety Commission (CPSC). Prompted in part by recent recalls of imported toys and other products, this bill would alter many other aspects of the CPSC?s rulemaking and enforcement functions.

The Senate Commerce Committee (which will have jurisdiction over this bill and is chaired by co-sponsor Senator Inouye) has not yet announced any hearings or other action on this bill. ISPA anticipates that parallel legislation may be introduced soon in the House.

ISPA's Government Relations Committee is taking the lead for our association on this legislation and will be pursuing a variety of tactics to defeat the more onerous aspects of the bill noted below.

ISPA is also participating in a larger CPSC Coalition sponsored by the National Association of Manufacturers in responding to this proposed legislation. Please monitor ISPA's Legislative Action Center for more news and steps you can take to inform your elected officials about how this bill will affect your business.

Of direct interest to ISPA members, the bill limits the extent to which CPSC standards may preempt application of different state rules. As you may recall, when the CPSC issued the final version of its open-flame mattress standard in 2006, it announced a new policy encouraging courts to dismiss product liability lawsuits against mattress manufacturers if they can demonstrate compliance with Part 1633. The bill seeks to reverse this new policy and clarify the impact that CPSC standards have on different state rules. This change could have a significant impact on producers that sell mattresses in more than one state.

Other highlights of this bill include:

*  Up to 80-fold increase in civil penalties: Increases maximum civil fines from $5,000 to $250,000 per violation, and raises the cap for related violations from $1.825 million to $100 million

*  Five-fold increase in criminal penalties: Increases criminal penalties from one year to five years in jail for those who knowingly and willingly violate product safety laws
Increased liability for directors, officers and agents: Makes it easier for directors, officers or agents that willfully violate a standard to be held criminally liable

*  Asset forfeitures: Allows government to seize assets associated with a criminal violation

*  Broad requirements for children's products that could apply to at least some mattresses: Requires independent, third party safety certification and extra labeling on every children?s product made in or imported into the United States, and defines "children's product" as a product intended for use by a child under 7 years of age

*  Gives states financial incentive to sue manufacturers for safety violations (similar to state lawsuits against tobacco industry): Allows state Attorneys General to file lawsuits on behalf of their residents to enforce product safety laws and obtain damages and restitution

*  Encourages employees to be bounty hunters against their employers: Authorizes employees of a manufacturer, importer, private labeler or retailer that provide information to CPSC or a state Attorney General against their employer concerning a product safety violation to receive between 15-25% of any civil penalty recovered from that employer

*  Employee whistleblower protection: Protects employees that provide or are about to provide evidence of a safety standard violation to the CPSC or a state Attorney General from discharge or retaliation

*  Bonding requirements: Authorizes CPSC to require manufacturers and distributors to post bonds to cover potential recall costs

*  Increased CPSC funding and staff: Substantially increases CPSC funding and staff levels so agency can regulate and enforce product safety rules more actively

Visit ISPA's Legislative Action Center to voice your opposition to this legislation.


ISPA encourages members to forward any media inquiries regarding this proposal to Ryan Trainer for a reply.
rtrainer@sleepproducts.org