CPSIA chronicles, May 11

  • At long last a House committee — the one on Small Business — has announced a hearing on CPSIA’s impact on small business, to take place Thursday. (I’m almost hesitant to report this as good news since the last time I did so it took only hours for the event to be called off). The Small Business panel does not have primary legislative authority in the area; that is vested in Rep. Henry Waxman’s Energy and Commerce Committee, whose CPSIA-overseeing subcommittee has chosen instead to hold hearings on that very urgent subject of public concern, college bowl championships. Rick Woldenberg recalls the fingers-in-ears techniques the House has used to shut out unwanted information up to now: first Waxman/Rush staffers prearranged “hearings” that heard nothing, after which they (successfully up to now) maneuvered to make sure critics of the law would not obtain any official Hill forum at which to air their grievances as public outrage built.
  • Hard to steer with no head

  • The Consumer Product Safety Commission has released new guidance (PDF) for thrift shops and other product resellers on compliance with CPSIA and other laws overseen by the agency. According to Ian at Musings at a Catholic Bookstore , the manual lays out policies that differ only slightly from what was known before, often by spelling out what will be made an enforcement priority, since the commission has no power to alter the law’s actual requirements. Thus it seems phthalates in older kids’ playthings, the kind unlikely to be placed in the mouth, are not going to be a high priority in reseller enforcement — which still doesn’t make it legal to resell those items. For many outside readers the biggest surprise seems to have been that the agency views its authority as extending to yard sales. As Ian notes, this isn’t actually news; it’s just that the new manual is spelling it out in a more visible way than it did at some earlier times.
  • “Toy Story 3: Emperor Uncle Sam Puts You Out of Business” [Rep. Joe Barton (R-Tex.), The Hill]
  • In the ongoing series of crises that is CPSIA, the next major crisis is due on or around August 14, as of which date newly made children’s goods must comply with new tracking and labeling requirements (touched on briefly in this space last month). The intent is to make it easier to trace and contain safety problems, enable recalls and so forth. For makers of children’s apparel, Kathleen Fasanella explains the complicated and sometimes expensive implications in posts here, here, and here. And apparel makers have it relatively easy, in part because they are already used to affixing permanent labels to most products, unlike many makers of items such as wooden toys and pencils, straw dolls, ceramic wall plaques, rubber spiders or bouncy balls, glass bead craft items, and so forth. Toy importer Rob Wilson writes, “this one clause will be enough to finish off a good majority of the companies that the other provisions of the law do not kill first. I personally know of many companies that are planning to close by August 15th if this provision is not amended.” The National Association of Manufacturers has requested (PDF) an emergency stay on the tracking and labeling rules; the CPSC has put off consideration of the request. Rick Woldenberg comments here and here. And tomorrow (Tues., May 12) at 1 p.m., the CPSC is holding a meeting, to which any interested member of the public is invited, to discuss the tracking and labeling rules. (Update: CPSC hearing is online as a webcast (h/t Woldenberg). Kathleen Fasanella has more, including links to more than 500 pages of protest letters, PDF, received by the CPSC on the issue).
  • One that fits

  • Cutting across multiple lines: per the Bulletin in Bend, Oregon, a local resident whose son got sick from salmonella (and recovered) appeared with Rep. Henry Waxman at a press conference to promote more effective federal food safety regulations; at the same time, though, “Christoferson said she can sympathize with the harm that poorly written rules can do to businesses” because her own resale store in the city of Bend, Stone Soup, has been harmed by CPSIA.
  • Whimsical Walney, who has written with passion about the CPSIA fight, has announced that she is closing the doors of her children’s business.

Public domain paper doll images courtesy Karen’s Whimsy.

Taxes and structured settlements

In structured settlements, injury compensation is paid in installments over years rather than as a lump sum up front. It has long been argued that arrangements of this sort should be strongly favored by public policy: many accident settlements are premised on the need to cover years of needed therapy or future income lost through disability, and if it’s spent down too quickly through mishandling or “lottery winner syndrome”, the victim could wind up an expensive public charge. For reasons of this sort, structured settlements have been accorded highly favorable tax treatment.

Then an industry sprang up that offered to turn structured settlements into quick cash on the barrel, a choice that many lawsuit beneficiaries might be tempted to make (or might make after being leaned on by family members). Although laws often require that conversions of this sort be submitted for review to a court, judicial review may be cursory in the absence of adversary process to call attention to the potential drawbacks of a conversion. Not only has the structured-settlement-conversion industry managed to thrive, but somehow, as Shaun Martin notes, Congress has even been prevailed on to bestow favorable tax treatment on its doings — the same doings that tend to undermine the public benefits thought to arise from the original tax-favored structured settlement. More details are to be found in this decision, PDF, in which an appeals court recently sided with the factoring companies in a series of Fresno, California disputes (also discussed at this new blog on structured settlements, via Dan Schwartz).

Tax incentives that encourage lottery-winner syndrome? To paraphrase what Martin says, it’s almost as if someone was managing to work the system.

NYC subway track totterer awarded $5.95 million

You can hardly blame the lawyers for the Metropolitan Transportation Authority if they thought the case looked defensible. John Hochfelder:

the jury heard evidence that on December 12, 2002, James Sanders fell onto the tracks as a subway car in Brooklyn was coming into the station at about 15 mph. The jury was also apprised of the facts that Sanders had been returning from methadone treatment and had drunk pure rum before entering the station (a fact he initially denied).

Then, there were these additional facts:

  • Sanders could not recall why he fell
  • the motorman’s speed was no more than 15 mph
  • witnesses testified that the train was no more than 20 feet away when Sanders fell onto the track

The “last clear chance” doctrine, as Hochfelder explains, provided enough of a basis for Sanders’ lawyer to persuade a jury that the subway motorman was 70 percent responsible for the accident.

More on tipsy track totterers: Feb. 19, etc.

If deathly allergic to burger condiments, consider checking for their absence

This vital step in an allergy-mitigation protocol appears not to have been undertaken by Darius Dugger of Portsmouth, Va., who says he specifically asked that Burger King omit the onions, tomato and pickle from his sandwich, but that they ignored his request, resulting in the severe allergic reaction for which he’d like $100,000. [Norfolk Virginian-Pilot via Patrick at Popehat] He says he’d already taken a bite and swallowed by the time he realized their error, as opposed to, you know, peeking under the bun to see. Earlier on West Virginia McDonald’s “hold the cheese” suit here.

“Landlord on hook for up to $44K even though bias case was dropped”

Dan Bader came to be “embroiled in a messy dispute with the state Department of Fair Employment and Housing and the Fair Housing Council of Orange County” when he used Craigslist to advertise a rental unit in his Newport Beach home as “Well suited for professional adults” and “Perfect for 1 or 2 professionals.” As the Orange County Register relates, it never resulted in an actual courtroom loss; the process was the punishment. Bader has a website on the experience: StateGoneCrazy.com (more on Craigslist and the wording of housing ads here, here, etc.).

“Prominent Arkansas Lawyer Probed Over Missing $9 Million”

“Prominent Arkansas plaintiffs’ lawyer Gene Cauley has landed in some hot water due to his apparent inability to produce more than $9 million in settlement money he was overseeing for clients, according to federal court records.” His lawyer, John Wesley Hall, told Judge Jed Rakoff at a hearing “that the missing settlement funds ‘are presently unavailable,’ but Hall declined to elaborate, citing Cauley’s privilege against self-incrimination.” He says, however, that Cauley is working to “find the money and pay it in 90 days” and expects to “make everyone 100% whole”. [WSJ Law Blog].