| BEYOND THE CPSC: HOW OTHER REGULATORY FRAMEWORKS AFFECT PRODUCT SAFETY |
| Author: Sheila A. Millar |
While the statutes administered by the U.S. Consumer Product Safety Commission (CPSC) set out a product safety legal framework that includes many detailed requirements, a broad array of other statutes, regulatory regimes, and policy issues implicate product safety.
Data Management
In this connected age, companies amass large amounts of data, both directly from customers or consumers, or purchased from data brokers. Data may be obtained through traditional offline sources, like customer service desks and comment cards, but increasingly is generated digitally through websites, apps, and “other media.” Data may be used, independently or in combination, to target existing and prospective consumers, obtain feedback, and improve and develop products. The landscape is now further complicated by the growth in connected devices, including wearables, that themselves generate data, and a host of social media outlets that discuss – not always accurately - products and product risks.
Privacy and data security issues are two of today’s most hotly debated consumer protection questions. However, for product safety purposes, the focus should be on whether data management policies and procedures — largely geared to marketing activities — are capable of allowing the company to manage reports implicating safety or quality. Since information about product risks, hazards or incidents may trigger requirements to report to national authorities, it is essential to:
- Distinguish quality issues from safety issues
- Manage and evaluate returns, complaints and consumer feedback
- Establish a process to make decisions about the information reviewed.
Many companies also monitor social media commments about their products, recognizing that comments are often unreliable and that even the largest companies cannot possibly monitor everything. Managing this data is part and parcel of how companies evaluate when information reaches a sufficient threshold to trigger reporting, and who will determine when that threshold is reached. With increasing civil penalties for failure to report, now is a good time to consider whether data management processes could be improved.
Environmental and Green Chemistry Considerations
Other agency actions may affect product safety both directly and indirectly. For example, the Environmental Protection Agency’s (EPA) restrictions on hydrofluorocarbons in an effort to address global warming will ultimately require companies that make appliances, air conditioners, building insulation, and and a host of other consumers products to switch to alternatives. Flammable alternatives require new safety measures in plants, may require changes to building codes and standards, and clearly create new risks that must be assessed. In addition to these direct safety considerations that affect engineering, manufacturing and development, testing to evaluate safety and compliance will likely consume substantial laboratory capacity in coming years, implicating timelines and potentially costs for companies in completely separate lines of business.
Further, under § 8(d) of the Toxic Substances Control Act (TSCA), companies may be required to report health and safety studies to the Agency. Several years ago EPA proposed a direct final rule that would have required reporting on cadmium, but the rule was quickly withdrawn when commenters objected to, among other things, EPA’s departure from statutory authority and precedent to propose that data evaluating the presence of a chemical should be reported. TSCA reform legislation is under consideration in the Congress.
Some chemicals are regulated under state green chemistry laws and international chemical control regimes. In the EU, the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals, or REACH, limits the production and use of certain chemicals based on the risk they pose to human and environmental health, including in products. A complementary piece of legislation is the Restriction on Hazardous Substances (RoHS) Directive, which applies to various electronic and electrical equipment, and the closely-related Waste of Electrical and Electronic Equipment (WEEE) Directive. Approaches to chemical regulation are inconsistent across jurisdictions, creating challenges for manufacturers seeking to market products globally. Lack of harmonization is not only a problem between nations, it is a problem in the U.S. Laws like Proposition 65 require labeling of substances known to the state of California to cause cancer or reproductive toxicity. Other states have adopted warning requirements. Products that must bear a warning label despite being “safe” under federal law sow market confusion and add to unnecessary anxiety about chemicals.
So-called “green chemistry” laws have been adopted in some states, including California, Connecticut, Maine, Minnesota, Oregon, Vermont, and Washington, and localities like New York’s Albany County (among others). These laws vary, but typically require that companies report the presence of chemicals at certain thresholds, e.g., contaminants at 100 parts per million (ppm) or greater, or intentionally-added chemicals present at any amount above the practical quantification level (PQL) as set by statute or a regulatory agency. With the exception of California, all these laws apply only to children’s products, but efforts to expand reporting to cover all consumer products continue.
Vermont, one of the latest states to adopt a green chemistry reporting law, just released its implementing regulation. While the rule must be reviewed by a Vermont legislative committee before taking effect, in its present form the regulation would require reporting not just by product category (as has been common in other states), but by brand and product name. With the first reporting period slated to begin on January 1, 2016, the rule will likely impose a significant burden on businesses, especially small businesses. Further, some state green chemistry laws require an alternatives assessment (AA) to determine whether other chemicals can be safely substituted for the relevant chemicals of high concern. Decades of experience with the phaseout of ozone-depleting chemicals has taught us that alternatives necessarily involve tradeoffs. Product risk assessments cannot simply look at chemical risks in a vacuum; they must consider overall safety, as well as costs and benefits, and the existing suite of mandatory and voluntary standards that may apply.
Advertising and Labeling
Advertising claims about product safety and performance (including label claims) also implicate
product safety. The Federal Trade Commission (FTC), the nation’s advertising watchdog, considers claims about safety, performance, and price as material to consumers. Material claims must be truthful and not misleading, and must be substantiated by a reasonable basis at the time the claim is made. When advertising claims about safety or performance are inconsistent with safety instructions and warnings, problems can ensue.
Environmental claims about products are also often material to consumers, and the FTC’s Guides for the Use of Environmental Marketing Claims (or The Green Guides) outline how the FTC views such claims. Although not independently enforceable, the Green Guides represent the FTC’s view of how particular claims would be evaluated under § 5 of the FTC Act. The FTC’s guidance on several environmental claims addressed in the Green Guides, like “free of” and “non-toxic” are worth mentioning because of their product safety implications, and the FTC’s detailed guidance on certifications and seals has broader relevance.
Conclusion
Many seemingly unrelated laws and regulations affect product safety decisions, reporting, and regulatory compliance obligations. The ability to identify issues and then to address them will enhance regulatory compliance, reduce liability exposure, and improve your reputation with customers and consumers.
Sheila A. Millar is a partner with Keller and Heckman LLP’s Washington, D.C. office.
E-mail: [email protected] |
|