Overlawyered: Chronicling The High Cost Of Our Legal System

Enjoy American artisanal/craft beers?

glassofbeer
Thank Carter-era deregulation for that. In 1979 the nation was known for bland, uniform and mass-produced beer, and there were but a mere 44 breweries in the entire country, most of their products very like each other. But legal restrictions were lifted. “Three decades later, the U.S. boasts 1,463 breweries, including 975 brewpubs”, and a culture of beer connoisseurship with few if any equals around the world.

And all just from repealing some unnecessary laws. It’s kind of like running the CPSIA tape in reverse.

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CPSIA: Powersports, crystals, and stranded inventories

With large inventories of kid-sized motorbikes, mini-ATVs, and similar products rendered worthless and unsalable under tarps or in back storage rooms, the Motorcycle Industry Council now estimates that the economic damage from the Consumer Product Safety Improvement Act in its sector of the economy alone could reach $1 billion in 2009 if Congress does not act to restore the products’ legality. Joe Delmont at DealerNews has more information on how that figure was arrived at. Two weeks ago we cited an estimate that the frozen inventory alone exceeds $100 million in value; the larger figure adds in the cost of payroll and insurance at dealerships while they wait for the ban to be lifted, lost service and accessory sales, and so forth. It apparently does not count harms to tourism and recreation sectors in parts of the country that draw a family vacation trade based on use of the vehicles (see, e.g., ShareTrails.org, Americans for Responsible Recreational Access). Since the vehicles are intended for outdoor use, the weeks leading up to and including spring — in other words, now — are ordinarily their prime selling season. Some recent coverage previously unlinked: Chico, Calif., Enterprise-Record, WDAY Fargo, N.D., Orlando, Fla. Local6, WCTV Tallahassee, Fla., Gloversville, N.Y. Leader-Herald, Kingsport, Tenn. Times-News. Forums: cpsia-central, VitalMX, Motorcycle Addicts, and many more.

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The minibikes fall into a category of products for which the drafters of CPSIA made it particularly hard to obtain exemptions, namely products that concededly do contain a more than infinitesimal quantity of lead in a normal and accessible component. Yesterday, the CPSC published (PDF) its proposed rule on the subject. In it, the commission staff explain the stringent legal requirements governing such waivers, and why they often do not allow the commission to grant “common sense” waivers even where risks of harm are very low and costs of regulation are very high (pp. 7 et seq of the document, which fall on pp. 9 et seq of the PDF). In other words, the minibike dealers are out of luck unless they can convince (or persuade Congress to take the issue away from) the implacable Henry Waxman, who in turn tends to take his cue on these matters from Public Citizen and that group’s allies.

The powersports dealers aren’t the only ones stranded. At The Smart Mama, lawyer/lead testing consultant Jennifer Taggart ponders what might amount to “the end of bling” in kids’ wear. Genuine crystals by definition include lead, as do many rhinestones, although cheaper plastic imitations will more often be free of it. Trade groups have petitioned for an exemption, but given the law’s stringency (calling for the submission of peer-reviewed data, for example) it is far from clear that the commission can grant their requests. It will be easy in some quarters to dismiss the whole matter with a wave: who cares about mere embellishments, anyway?
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It’s not so easy to be dismissive if you’re, say, a teacher of Irish step dancing, with a stock of performance dresses in youth sizes (quite possibly with crystals, rhinestones or sequins, since nothing picks up stage lights the way they do). That stock of costumes, which might even be your most costly asset, by law at least may now occupy the same frozen contraband category as those tarped-over new youth minibikes at the sports dealer’s. As message-boarder “GailV” put it, “The dresses are worn for about 15 minutes at a time, the possibly lead-containing parts never touch the child, but it’s still illegal.” For more on the dismay CPSIA has struck into the Irish dance apparel community, see Irish Dance Moms, Fashion Incubator Forums, and Voy Forums comments here, here, and here (“Heidi”: “Most of us would like to be successful and running legitimate (law abiding) businesses. I want to grow my business, not hide in the shadows looking for ways to circumvent the law. Besides, the jealous world of Irish dance is full of potential whistle blowers.”)

More: In comments, Jennifer Taggart reports more distress in the bling sector.

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Milberg hires judge who ruled in its favor

Last year New York trial judge Herman Cahn ruled in favor of class-action giant Milberg in a high-profile dispute over whether it could share its winnings from past cases with disgraced felon and former name partner Melvyn Weiss, the firm’s former driving force. Judge Cahn stepped down from the New York bench in December, and now it develops has been hired by Milberg as its “distinguished” new attorney. And you — with the Wall Street Journal’s editorialists today — certainly have a suspicious mind. There probably won’t be any shortage of funds with which to pay the former jurist: an American Lawyer headline last month read “Milberg Among Plaintiffs Firms Awarded $120 Million in Xerox Class Action”.

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California towns ban speedboarding

No doubt there are also other reasons why councilors might vote to keep daredevil and extreme skateboarders off public streets, as the L.A. Times is reporting, but the liability climate can’t help:

In 2004, a 17-year-old boy skating down a Mission Viejo street hit “an alleged defect in the street and took a tumble. In a bicycle he would have rolled right over it,” [self-insurance pool executive Jonathan] Shull said.

The boy suffered a brain injury and his family filed suit, alleging municipal negligence and asking for money to help care for him for the rest of his life.

Under state liability law, a city might have to pay the full settlement if a jury finds it was even 1% liable for the injury, according to Shull.

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CPSIA chronicles, February 24

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  • More thrift store and reseller reports, not linked earlier: Blacksburg, Va. (“a lot of customer complaints at the YMCA at Virginia Tech since the thrift shop pulled kids’ toys off its shelves”), Chapel Hill/Carrboro, N.C. (“many patrons are upset” at absence of children’s items), Sioux City, Iowa (“To be on the safe side, Goodwill removed from the sales floors nearly all its used children’s clothing and all its toys”), Le Mars, Iowa (youngster’s outing ends in tears; items in storage for now).

    And yet at many other stores — in other states or cities, maybe even down the block in the same town — decisions on what to drop have been much more selective. Thus New Orleans (large thrift store in St. Charles Parish “no longer accepting small toys, painted wood items or clothing with trinkets or toys attached to them,” those being, of course, a small fraction of the items that could lead to an inadvertent CPSIA violation), and Lufkin, Texas (list of goods Goodwill won’t accept includes bunk beds, bicycle helmets, embellished books, and many others, but a good bit narrower than CPSC guidance would suggest). The shop I visit most often, in a relatively prosperous NYC suburb, had a sparser-looking-than-usual selection yesterday, which nonetheless included items that would raise a definite eyebrow under the CPSC guidelines, such as kids’ athletic shoes with metal lacing grommets. And it’s not hard to find thrift outlets with relatively high profiles in their community — I won’t name names for fear of getting them into trouble — that don’t seem to have dropped much of anything. You’d hardly imagine that CPSIA was supposed to be a uniform national law.
  • Related: Riverside, Calif. Press-Enterprise, “Goodwill Industries International said it could potentially lose $134 million nationwide in the coming year if forced to dispose of all children’s clothing and products, according to spokeswoman Lauren Lawson.” And the Naperville, Ill., Sun covered the headaches of maternity and children’s reseller Connie Ballas (From My Room).
  • Hugh Hewitt’s popular conservative radio show devoted an hour to the law yesterday, interviewing attorney Gary Wolensky of Snell & Wilmer, who represents manufacturers and whose discussion primarily focused on the headaches they face. The show drew a strong call-in reaction and has already led to a flurry of online interest in CPSIA reform.
  • Meanwhile, Jennifer Grinnell of Sherborn, Mass. writes that CPSIA reform needs to be approached as more than a right-vs.-left, blue-red, Dem-Rep political football [Change.org]
  • When the New Orleans Times-Picayune interviewed local toy stores, the independent retailer was finding the law “burdensome” and “very cumbersome” as she tried to communicate with all the producers of items in her stock, while the franchise operator seemed to be having a much easier time of it because he carried only items on a checklist from national and could piggyback his compliance paperwork on headquarters’. Yes, that sounds about right.
  • Don’t toss those pre-’85 kids’ books, thrifters! Set them aside and await orders from D.C.! That seems to be the advice of Examiner columnist (and former children’s bookseller) Diane Petryk Bloom, who’s confident that a law this bad will be amended and suggests that in the mean time some civil disobedience might be in order, advice that might not be taken readily by resellers staring down the business end of those $100,000 potential fines.

    Let’s assume she’s right that most people in the thrift store business can’t bring themselves to leave perfectly good children’s books out on the curb, and instead tuck them into storage for the time being or look the other way while an employee “borrows” them for home use. What happens next, as the weeks turn into months (or perhaps years) with no action from Henry Waxman & co.? The main mechanism by which we will lose older books is not so much that thrift stores will toss them in the trash, as that they’ll refuse to accept them as donations or consignments in the first place, while other outlets worried about legal liability (such as online auction sites) adopt similar policies. Once there’s no convenient way to dispose of the books even as donations, families will simply discard most of them (with occasional collectible/rarity exceptions) when the kids grow up, when moving house, or when winding up a family estate. It’s not as if there’s likely to be much press coverage of these micro-events, which doesn’t make them less than real.

    ParentDish and Etsy also have active threads in progress on the issue of older children’s books.

  • Some other blog talk: Blue Rose Girls, Kora in Hell/WordSmoker (rude language), Lex Fortis (satire), and of course leading CPSIA-watchers Deputy Headmistress/Common Room (on press coverage, Consumers’ Union and dragons) and Valerie Jacobsen (what? you mean CPSC would target small business with punitive actions?)

    • yorkiebarrette

  • Sorry, even if your little girl has been saving up her allowance for one of our pretty hair barrettes, we can’t sell it to you, unless you want it for her dog [MaidenUS]

Public domain image: Grandma’s Graphics, Mabel Betsy Hill; dog image from MaidenUS.

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