Nestled in the morass known as the Consumer Product Safety Act (as amended by the dubiously titled Consumer Product Safety Improvement Act of 2008 and further amended in 2011) are provisions that can wreak havoc for businesses that manage, understandably, to overlook them. What was once a rather straightforward reporting and recall system involving a relatively small number of federal safety standards has evolved into a complex beast of certifications, third-party testing, and training programs. While it is beyond the scope of this post to identify and discuss all of the requirements of these laws, there are some provisions that our readers should know about. This article addresses one of the thorniest of all: children’s products.
A host of new requirements apply to children’s products, and the determination of what is – and what is not – a children’s product is now no easy matter. Generally speaking, a children’s product is one designed or intended primarily for children 12 years of age or younger, but the CPSC’s own complex “interpretive guidance” on the question betrays the superficial simplicity of this inquiry. There are almost no clear rules, and, on matters that could lend clarity to the situation, like a reliable product labeling/marking regime that would put the onus on parents and other responsible adults to keep certain products away from children, the CPSC manages to make things even murkier.
The impact of regulatory uncertainty. At the core is are very practical questions, including whether a company ought to take a risk that a product thought to appeal to, say, teenagers will be viewed in a manner that extends its likely usage to children within the regulated age range. Once a product falls into such a gray zone, a company may find itself on the receiving end of a CPSC investigation requiring it to justify its failure to apply the children’s product requirements of federal law. One might find regulators asking, "Why not?" -- as if the costs/compliance burdens were not a factor. One can imagine the difficulty of such a burden if, for example, a child twelve or under was injured while using the product. The CPSC, for its part, expects you to examine such amorphous questions as whether the product has a “declining appeal for teenagers,” and the CPSC’s regulations make clear that you are thin ice if you plan to rely on a manufacturer’s labeling to the effect that a product is not intended for use by children. You are all but asked to assume that labels will be ignored by parents. The task of keeping inappropriate products out of the hands of children shifts from parents and guardians to the manufacturer or retailer who must guess and wonder whether a product might be viewed as appealing to children too young to use it.
Consumer perceptions? Areas of close scrutiny include: how the product is marketed, e.g., whether children twelve years of age or younger (or perhaps even children who appear to fall within that age group) are depicted in advertising; where the product is sold, e.g., whether it is sold in catalogs or on Internet pages in close proximity to children’s products (this can be problematic if web pages generate product recommendations that could populate a page with children’s items; and the nebulous world of “consumer perception” as gleaned from sales data, market analyses, and focus groups.
In addition, a product may still be deemed a “children’s product” if it is sold with adult products (like candles, for example) as part of a set. Thus, if one part of that set is deemed to have some “play value” for a child twelve and under, the onerous children’s products rules could well apply – perhaps to the entire set. Also, virtually anything – from an air purifier to tissue boxes to curtains and ceiling fans – can be converted into a “children’s product” if it is “decorated or embellished with a childish theme.” What themes would be viewed as designed or intended for thirteen year olds, as opposed to twelve year olds, or fourteen year olds, or sixteen year olds? The lines of demarcation and sophistication between twelve year olds and older teens might be seen as negligible or rapidly diminishing. The fact twelve was chosen, as opposed to a younger cut-off that might make "children" more readily distinguishable from young adults, renders the task for business markedly more difficult and risky, of course.
Conclusion. All of this is important because the compliance requirements (and costs) for children's products are far more onerous than for non-children's products. Among other things, children’s products are required to undergo third-party testing by a certified laboratory under a “reasonable testing program,” be certified under a special Children’s Product Certificate, and bear permanent tracking information on the product and label (with special requirements for durable infant and toddler products). Manufacturers and importers (which can include retailers) must also, for example, institute a program to train employees in avoiding undue influence on third-party testing laboratories, and obtain employee certifications of compliance.
Showing posts with label CPSC. Show all posts
Showing posts with label CPSC. Show all posts
Tuesday, September 17, 2013
Friday, July 19, 2013
Report, Recall, or Both: Do You Know Your Obligations Under the Consumer Product Safety Act?
Manufacturers, importers, distributors, and retailers of consumer products have a legal obligation to report hazardous or dangerous products to the Consumer Product Safety Commission ("CPSC"). Failing to do so may result not only in large civil penalties, but also criminal prosecution. But, there are many common myths and misconceptions about this reporting requirement and how it relates to the separate question of whether a product recall ought to be commenced. Here are just a few:
Myth One: “I only need to report to the CPSC if someone is injured by a product I sell.”
In truth, a reporting obligation can arise if not a single consumer has been injured. The law requires the reporting of “unreasonably hazardous or dangerous” products that pose a risk to consumers—even if the risk of harm has never been realized. The possibility of harm, alone, triggers a reporting obligation.
Myth Two: “I can avoid the need to report simply by sending a communication to my customers telling them how to avoid being injured by the product.”
Any time you believe that a customer communication is necessary in connection with a possible safety risk to customers—including by providing additional warnings or instructions—the CPSC will inevitably take the position that your should have reported the issue to them and worked with them to determine if the communication adequately addressed the perceived safety issue.
Myth Three: “I don’t manufacture the product, therefore I don’t have to worry about reporting safety concerns to the CPSC.”
The CPSC reporting obligation applies independently to all companies involved in the distribution of a consumer product—from manufacturers to final retail sellers. There are circumstances in which the retailer's reporting obligation can be satisfied by a communication to the manufacturer (with a copy to the CPSC), which is an option that all retailers should explore. But, the fact remains that a retailer can be penalized for a failure to report on a product it did not manufacture, including one sold by many other companies.
Myth Four: “Industry product safety standards are voluntary, and declining to meet them has no legal consequences in terms of reporting or recalling a product.”
Technically, industry standards are “voluntary.” However, if a company sells products that fail to meet such standards (either intentionally or because it was unaware of them), it may result in a reporting or recall obligation if it can be shown that application of the standard could have resulted in a safer product. In addition, meeting those standards can provide a solid defense to a claim that a product is unsafe.
Myth Five: “I only need to report a product as unsafe if it has a design defect.”
In reality, a product can be unsafe—and thus trigger a reporting requirement—for a number of reasons, including: (1) defective design; (2) defective manufacture; (3) lack of appropriate warnings; (4) poor instructions; and (5) a failure in any of these categories given reasonably anticipated customer misuse.
The obligation to report an unsafe or defective product to the CPSC is a tricky one. Compliance requires that companies establish internal policies and procedures for tracking safety issues from initial product design to post-sale consumer experiences, and understanding that the reporting obligation can arise even in cases where a recall is not required. Separating myth from reality can help to protect a company from a costly–and risky–CPSC investigation, penalty, or prosecution.
Myth One: “I only need to report to the CPSC if someone is injured by a product I sell.”
In truth, a reporting obligation can arise if not a single consumer has been injured. The law requires the reporting of “unreasonably hazardous or dangerous” products that pose a risk to consumers—even if the risk of harm has never been realized. The possibility of harm, alone, triggers a reporting obligation.
Myth Two: “I can avoid the need to report simply by sending a communication to my customers telling them how to avoid being injured by the product.”
Any time you believe that a customer communication is necessary in connection with a possible safety risk to customers—including by providing additional warnings or instructions—the CPSC will inevitably take the position that your should have reported the issue to them and worked with them to determine if the communication adequately addressed the perceived safety issue.
Myth Three: “I don’t manufacture the product, therefore I don’t have to worry about reporting safety concerns to the CPSC.”
The CPSC reporting obligation applies independently to all companies involved in the distribution of a consumer product—from manufacturers to final retail sellers. There are circumstances in which the retailer's reporting obligation can be satisfied by a communication to the manufacturer (with a copy to the CPSC), which is an option that all retailers should explore. But, the fact remains that a retailer can be penalized for a failure to report on a product it did not manufacture, including one sold by many other companies.
Myth Four: “Industry product safety standards are voluntary, and declining to meet them has no legal consequences in terms of reporting or recalling a product.”
Technically, industry standards are “voluntary.” However, if a company sells products that fail to meet such standards (either intentionally or because it was unaware of them), it may result in a reporting or recall obligation if it can be shown that application of the standard could have resulted in a safer product. In addition, meeting those standards can provide a solid defense to a claim that a product is unsafe.
Myth Five: “I only need to report a product as unsafe if it has a design defect.”
In reality, a product can be unsafe—and thus trigger a reporting requirement—for a number of reasons, including: (1) defective design; (2) defective manufacture; (3) lack of appropriate warnings; (4) poor instructions; and (5) a failure in any of these categories given reasonably anticipated customer misuse.
The obligation to report an unsafe or defective product to the CPSC is a tricky one. Compliance requires that companies establish internal policies and procedures for tracking safety issues from initial product design to post-sale consumer experiences, and understanding that the reporting obligation can arise even in cases where a recall is not required. Separating myth from reality can help to protect a company from a costly–and risky–CPSC investigation, penalty, or prosecution.
Monday, April 12, 2010
Are You Selling "Children's Products"?
When Congress passed the Consumer Product Safety Improvement Act (the “CPSIA”) in 2008, it included a new definition of what constitutes a "children's product." Along with that new definition came a host of onerous testing, certification, and product design/composition standards. If the products you're selling fall into this category, your legal obligations expand dramatically to include third-party certification, substrate testing for lead, prohibitions on phthalates, product tracking labels, and more. And so, the question of "What is a children's product?" becomes extraordinarily consequential for wholesalers, retailers, "private labelers," and importers.
As is traditionally the case with "age grading" of products, the CPSIA's definition generalizes things to the point of providing very little practical guidance on many products. Under the new regime, a "children's product" is "a consumer product designed or intended primarily for children 12 years of age and under." While it is one thing to say roughly which products are intended for children who are two, or four, or six, or even eight, products of interest to many twelve-year-olds also appeal to older teens and even adults. Is a product primarily intended for twelve-year-olds if it broadly appeals to teenagers, for example? How closely must you parse the demographics of potential customers to figure out whether your audience is likely to be "primarily" twelve-year-olds? Coupling this with analysis of design aims and product "intentions" makes matters even more complex.
Into this analytical quagmire, the Consumer Product Safety Commission (“CPSC”) has now dropped 50 pages of industry guidance, including a brand new proposed regulation. Once you dive in, it doesn't take long to realize that some of the products you thought were children's items may not be. Worse yet, some products that you reasonably might have concluded were "not designed or primarily intended for children 12 years" or younger may well be viewed very differently by the CPSC. In other words, the CPSC has raised as many questions as it answers.
The CPSIA, itself, does provide some limited guidance as to "factors" to be considered in determining if you're selling a children's product. You are asked to consider: (1) manufacturer's statements (including those on labels), if such statements are reasonable; (2) whether packaging, display, promotion, or advertising present the item as appropriate for use by children 12 years of age or under; (3) whether the product is commonly recognized as being intended for children 12 years of age or under; and (4) the CPSC's own "Age Determination Guidelines" which were last published in 2002.
The problem with these "factors" is that none focus on the question of whether the product is "primarily" designed and intended for children twelve years of age or under. Moreover, the Age Determination Guidelines document from 2002 is a densely written quasi-scientific overview of cognition, motor skills, and psychological and emotional development in certain ranges of ages which offers very little practical help in close cases -- particularly at the older range of the continuum. One thing the document does is show that determining the proper age group for a product is much easier for the younger age groups, but gets very foggy for eleven- and twelve-years-olds. Indeed, the document itself notes that, at twelve, a child's thinking is more "adult-like." The Guidelines also note, problematically for any company trying to sort out the "intended age" question, that twelve-year-olds will be drawn (like a magnet, probably) to products that appeal to older teens.
What does the new guidance offer to rectify this? The regulation first divides products into two basic categories: "general use products" and “children's products.” General use products are those "not being marketed to or advertised as being primarily intended for use by children 12 years or younger and that are used by a significant proportion of the population older than 12 years of age." 16 C.F.R. 1500.92(b) (as proposed). The second half of this definition is poorly written and makes little sense. But, I think the language is intended to mean that a significant portion of the product’s users are older than 12 years of age. Additionally, because the definition is in the conjunctive ("and"), it would appear that a product is for "general use" as long as it is not "marketed or advertised" as intended for use by children 12 years of age or younger. This would make life easy for the industry: you can control your legal obligations by controlling your marketing.
But, the proposed definition of "children's product" muddies the water. The test for a “children’s product” is whether the product is "designed and commonly recognized as intended for use by a significant proportion of children 12 year of age or younger," and includes in the term "use" all reasonably foreseeable "misuse." In other words, a product can be a "general use product" and a "children's product" simultaneously -- even if (1) the sole projected “use” by children twelve and under is a “misuse” and (2) the product is not advertised or marketed to that age group.
Under the proposed regulation, Sellers are expected to make an assessment of what "common recognitions" are for use of the product -- with the specific proviso that such a determination likely involves "[m]arket analyses, focus group testing, and other marketing studies..." In other words, small and large companies alike must now engage in vigorous market studies in order to limit the risk that a product may, after the fact, be deemed a children's product by the CPSC.
The regulation is helpful in that it provides a list of product categories and explains how those products would be treated under the new guidelines. Even though such categories are filled with their own caveats, they do give sellers some degree of comfort in the areas that are expressly discussed. The categories include:
As is traditionally the case with "age grading" of products, the CPSIA's definition generalizes things to the point of providing very little practical guidance on many products. Under the new regime, a "children's product" is "a consumer product designed or intended primarily for children 12 years of age and under." While it is one thing to say roughly which products are intended for children who are two, or four, or six, or even eight, products of interest to many twelve-year-olds also appeal to older teens and even adults. Is a product primarily intended for twelve-year-olds if it broadly appeals to teenagers, for example? How closely must you parse the demographics of potential customers to figure out whether your audience is likely to be "primarily" twelve-year-olds? Coupling this with analysis of design aims and product "intentions" makes matters even more complex.
Into this analytical quagmire, the Consumer Product Safety Commission (“CPSC”) has now dropped 50 pages of industry guidance, including a brand new proposed regulation. Once you dive in, it doesn't take long to realize that some of the products you thought were children's items may not be. Worse yet, some products that you reasonably might have concluded were "not designed or primarily intended for children 12 years" or younger may well be viewed very differently by the CPSC. In other words, the CPSC has raised as many questions as it answers.
The CPSIA, itself, does provide some limited guidance as to "factors" to be considered in determining if you're selling a children's product. You are asked to consider: (1) manufacturer's statements (including those on labels), if such statements are reasonable; (2) whether packaging, display, promotion, or advertising present the item as appropriate for use by children 12 years of age or under; (3) whether the product is commonly recognized as being intended for children 12 years of age or under; and (4) the CPSC's own "Age Determination Guidelines" which were last published in 2002.
The problem with these "factors" is that none focus on the question of whether the product is "primarily" designed and intended for children twelve years of age or under. Moreover, the Age Determination Guidelines document from 2002 is a densely written quasi-scientific overview of cognition, motor skills, and psychological and emotional development in certain ranges of ages which offers very little practical help in close cases -- particularly at the older range of the continuum. One thing the document does is show that determining the proper age group for a product is much easier for the younger age groups, but gets very foggy for eleven- and twelve-years-olds. Indeed, the document itself notes that, at twelve, a child's thinking is more "adult-like." The Guidelines also note, problematically for any company trying to sort out the "intended age" question, that twelve-year-olds will be drawn (like a magnet, probably) to products that appeal to older teens.
What does the new guidance offer to rectify this? The regulation first divides products into two basic categories: "general use products" and “children's products.” General use products are those "not being marketed to or advertised as being primarily intended for use by children 12 years or younger and that are used by a significant proportion of the population older than 12 years of age." 16 C.F.R. 1500.92(b) (as proposed). The second half of this definition is poorly written and makes little sense. But, I think the language is intended to mean that a significant portion of the product’s users are older than 12 years of age. Additionally, because the definition is in the conjunctive ("and"), it would appear that a product is for "general use" as long as it is not "marketed or advertised" as intended for use by children 12 years of age or younger. This would make life easy for the industry: you can control your legal obligations by controlling your marketing.
But, the proposed definition of "children's product" muddies the water. The test for a “children’s product” is whether the product is "designed and commonly recognized as intended for use by a significant proportion of children 12 year of age or younger," and includes in the term "use" all reasonably foreseeable "misuse." In other words, a product can be a "general use product" and a "children's product" simultaneously -- even if (1) the sole projected “use” by children twelve and under is a “misuse” and (2) the product is not advertised or marketed to that age group.
Under the proposed regulation, Sellers are expected to make an assessment of what "common recognitions" are for use of the product -- with the specific proviso that such a determination likely involves "[m]arket analyses, focus group testing, and other marketing studies..." In other words, small and large companies alike must now engage in vigorous market studies in order to limit the risk that a product may, after the fact, be deemed a children's product by the CPSC.
The regulation is helpful in that it provides a list of product categories and explains how those products would be treated under the new guidelines. Even though such categories are filled with their own caveats, they do give sellers some degree of comfort in the areas that are expressly discussed. The categories include:
- Furniture and furnishings: These are generally not considered children's products unless they are decorated with a child's theme, have play value, or are sized for a child. "Decorative items that are intended only for display, with which children are not likely to interact, are generally not considered children's products, since they are intended to be used for adults."
- Collectibles: Collectibles, even those that might otherwise qualify as children's products, can avoid this categorization if they have features that preclude use by children during play, "such as high cost, limited production, [and] display features, and [if they] are not marketed alongside children's products."
- Jewelry: The test is whether the product is generally sized, themed, and marketed to children. Factors to consider include, among other things: very low cost; play value; childish themes on the jewelry; sale with other children's products (such as a children's dresses); sales with children's books, toys, or party favors; and sale in store (or catalog/web site) that mainly sells children's products.
- DVDs, Video Games, and Computers: Logically, most computer products and electronic media devices are not considered children's products. However, handheld video games "with software intended for children...younger than 12 years" may qualify as such.
- Art Materials: The marketing and labeling of these are given high priority.
- Sporting Goods and Recreational Equipment: Regulation-sized sporting equipment and recreational equipment (like roller blades, camping gear, bicycles, and fitness equipment) are generally not considered children's items, unless they are sized for children and/or are decorated with childish themes.
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