Schiff Hardin Consumer Products Safety Alert:
Consumer Product Safety Improvement Act Update

Our last Consumer Product Safety alert outlined the key obligations imposed generally on manufacturers and others dealing with consumer products as a result of the Consumer Product Safety Improvement Act (the "CPSIA") that was signed into law on August 14, 2008.

This follow-up alert focuses on important, but more narrowly applicable changes brought about by the CPSIA.

First, the alert highlights new conformity certification requirements that take effect as early as November 12, 2008 for products that already were subject before the CPSIA's enactment to a specific rule enforced by the Consumer Product Safety Commission (the "CPSC" or "Commission").

Second, this alert discusses the Commission's new proposed rules for print and online advertisements for children's toys and games.

Changes to Manufacturer / Importer's General Conformity Certification Requirements, Effective November 12, 2008, for Products Already Subject to Mandatory Rules Enforced by the CPSC

• In the past, manufacturers and importers of products subject to a specific mandatory rule under the Consumer Product Safety Act (for example, rules addressing bunk beds, lawnmowers, bicycle helmets and products with lead-containing paint) have been required to furnish certificates to the distributors or retailers of their products in which they certify that the products comply with the applicable rule.
• Effective November 12, 2008, these general conformity certification requirements will be expanded as follows:
  • The certification requirements will apply to products that are subject to a specific rule under any statute that is enforced by the CPSC, and which are "imported for consumption or warehousing or distributed in commerce."  For a list of products covered by specific CPSC rules, visit www.cpsc.gov/businfo/reg1.html.  This change sweeps in specific rules covering products such as bicycles, cleaning products, cosmetics, mattresses, baby cribs, children's sleepwear, and many toys and other children's products, issued under any of the following statutes:
  • the Federal Hazardous Substances Act ("FHSA") (note that bans imposed by the FHSA statute itself, rather than by a rule adopted by the Commission under the FHSA, are excluded from the certification requirements)
  • the Flammable Fabrics Act ("FFA")
  • the Poison Prevention Packaging Act ("PPPA")
  • the Refrigerator Safety Act ("RSA")
  • Unless the CPSC exempts a party from having to certify compliance with a specific rule, "every" manufacturer (which is defined to include importers and foreign manufacturers), and the private labeler if the product bears a private label, must issue a certificate of conformity for products subject to these rules. As in the past, the certificate must be based on a test of each product or on a "reasonable testing program." The obligation of "every" manufacturer and private labeler to provide this general conformity certification is separate and distinct from any third-party testing and certification requirements that become effective later under the CPSIA.
  • For products requiring certification, it will no longer suffice that the certificate only be "furnished" to distributors and retailers.  Under the language of the CPSIA, the certificate "shall accompany the applicable product or shipment of products covered by the same certificate and a copy of the certificate shall be furnished to each distributor or retailer of the product."  (emphasis added)
  • Products offered for importation must be refused admission into the United States if not "accompanied" by a certificate, and must be destroyed unless the Secretary of the Treasury permits them to be re-shipped out of the country.
  • Last week, the CPSC staff issued guidance on how the "accompany" and "furnish" requirements may be satisfied electronically, as an alternative to paper certificates:
  • "The CPSC staff's opinion is that so long as the Commission has reasonable access to the certificate electronically and it contains all of the information required by section 102 of the CPSIA, electronic certificates can be used to satisfy the CPSIA."
  • "CPSC staff believes that an electronic certificate is 'accompanying' a shipment if the certificate is identified by a unique identifier and can be accessed via a World Wide Web URL or other electronic means, provided the URL or other electronic means and the unique identifier are created in advance and available with the shipment."  (emphasis added)
  • "[T]he ['furnish'] requirement is satisfied if you provide your distributors and retailers a reasonable means to access the certificate."
  • In guidance provided last week, the CPSC staff also stated, "the law requires that each import (and domestic manufacturer) shipment be 'accompanied' by the required certificate.  The requirement applies to imports and products manufactured domestically."
  • The staff's guidance on "shipments" and the "accompany" requirement for certificates raises new questions while answering others. It is unclear, for example, whether an importer (who is a "manufacturer" under the statute and therefore must issue certificates to "accompany" certain products as they are imported and must "furnish" copies of those certificates to its distributors and retailers) must also then have its certificates "accompany" post-importation domestic shipments to its distributors or retailers. Either the staff intended its language "(domestic manufacturer) shipment" in the guidance it issued last week to exclude post-importation domestic shipments, or it would appear that the CPSC staff has conflated the "accompany" and "furnish" requirements with respect to any domestic shipment by the importer to its distributors and retailers. Absent further guidance from the staff, we believe the prudent course for an importer in this situation is to follow the staff's recommendation (above) for how to make its certificate electronically "accompany" a shipment to distributors and retailers. By following this procedure, the electronic certification should satisfy both the "accompany" and "furnish" requirements simultaneously.
  • Certificates will be required to identify, in English:
  • each applicable rule
  • the manufacturer or private labeler issuing the certificate and any third party on whose testing the certificate depends, by name, address and phone number
  • the date and place where the product was manufactured, and the date and place of testing
  • contact information for the person maintaining test records
  • The CPSC staff last week posted a sample certificate, along with instructions for completing the certificate, at www.cpsc.gov/about/cpsia/faq/elecertfaq.pdf Certificates need not be signed by the issuer(s) or filed with the government.
• Future Rules That Will Require General Conformity Certification Once They Take Effect
• new lead content limits (as phased in)
• new rules for durable infant and toddler products
• portions of the ASTM Toy Standard when made mandatory or strengthened
• phthalate bans
• rain covers when required by the Pool and Spa Safety Act
• requirements for portable gasoline containers

Children's Toys Sold Through the Internet or Printed Materials

• In general, the CPSIA requires Internet Web sites and print materials offering children's toys for sale to include the same warnings (for example, warning about a choking hazard because of small parts) that accompany the products when purchased in person.
• Internet Web sites must comply with the new rules by December 12, 2008.
• Catalogs and other printed materials must comply with the new rules by August 9, 2009 under the CPSC's proposal. Congress originally set February 10, 2009 as the date by which printed materials must comply with the new requirements, but allowed the CPSC to provide a 180-day grace period. The Commission has proposed to do so, owing to the lead-time necessary for most catalog production.
• The proposed Internet and print advertisement rules include:
• a statement that existing rules for product warnings (16 CFR 1500.121) are generally an appropriate guide for cautionary labeling in advertisements
• specific requirements for the type sizes of warnings, and the locations and manner in which the warnings must appear
• At a public meeting on October 20, CPSC staff offered guidance on the advertising rules imposed by the new statute:
• Advertisements that simply direct consumers to physical stores, without providing a means to place an order, will not be required to include the warnings. Only advertisements that facilitate ordering (for example, with order forms, toll free numbers or Internet "shopping carts") are required to display the warnings.
• Business-to-business catalogs and Web sites may or may not be exempt. The CPSC may allow companies to forego warnings under certain circumstances, such as where there are minimum quantities larger than consumers would typically purchase, or where no price is included because price is negotiated between the businesses. However, promotional materials sent to schools and daycare centers will not be exempted even under those circumstance, as the items purchased by schools and daycare centers are typically provided to children.

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Schiff Hardin LLP represents manufacturers, retailers, importers and distributors in the full range of matters relating to product safety, regulatory compliance, product recalls and litigation.  We advise our clients on how and when to report potentially hazardous products to the CPSC, and on addressing the litigation, regulatory and public relations issues they encounter in that process.  We assist clients with internal compliance programs;  evaluating product risks;  reporting under Sections 15(b) and 37 of the CPSA;  developing, negotiating and implementing product recalls with CPSC staff;  and responding to CPSC enforcement investigations.  When necessary, we are also trial lawyers who handle complex, high-risk product liability and class action litigation coast to coast.  Our lawyers have:

• Handled complex product liability matters in 48 states, Puerto Rico and Guam

• Tried major product liability jury cases in 40 different jurisdictions

Please let us know if we can assist you in determining how to comply with the new consumer product safety law and its related regulations.

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