Thanks to our readers for the more than respectable showing Overlawyered made in the “Best Law Blog” section of the 2008 WeblogAwards. The winner was the very deserving Volokh Conspiracy.
Also while we’re on popularity, my piece yesterday at Forbes on the Consumer Product Safety Improvement Act (CPSIA) is #6 top rated among the magazine’s articles at the moment. Thanks!
I’ve got a new opinion piece up at Forbes.com on one of the worst pieces of legislation I’ve seen in many a year, the Consumer Product Safety Improvement Act, and the need to repeal it before it capsizes tens of thousands of small businesses:
Hailed almost universally on its passage last year–it passed the Senate 89 to three and the House by 424 to one, with Ron Paul the lone dissenter–CPSIA is now shaping up as a calamity for businesses and an epic failure of regulation, threatening to wipe out tens of thousands of small makers of children’s items from coast to coast, and taking a particular toll on the handcrafted and creative, the small-production-run and sideline at-home business, not to mention struggling retailers. How could this have happened?
(cross-posted from Point of Law). For our earlier coverage, follow our CPSIA tag.
P.S. The piece as first posted included a Vermont publication’s quote attributed to David Arkush of Public Citizen; that organization almost immediately wrote in to point out that Arkush has disavowed the quote in question, so I substituted a different one. The conversation at Greco Woodcrafting tracing the matter is well worth a close look.
Much of the alarm over the Consumer Product Safety Improvement Act (CPSIA), the federal law enacted last year in response to panics over Chinese toys with lead paint and the phthalates found in plastic, has focused on the effect it will have on toys and related kids’ products, driving many of them from the market because it is too costly for handcrafters and small-run manufacturers to pay for the testing of every lot. (One protest site is entitled National Bankruptcy Day, after Feb. 10, the day the law is set to go into effect.) But the law is much wider in application than that. It also applies to a sweeping array of children’s goods including clothing, bedding, Scouting patches, and countless other fabric and textile goods for kids’ use; paper goods, school supplies, homeschooling kits, as well as library books and audiobooks, board games, baseball cards, and the like; outdoor gear, bikes, backpacks, telescopes and sporting equipment; home furnishings when marketed for use in kids’ rooms; and much more.
Endangered Whimsy is “a gallery of handmade products endangered by the CPSIA”. Just Add Charm has a CPSIA Awareness Series with other examples of products that could soon be withdrawn. There’s at least one Flickr group, too.
And that just scratches the surface. A familiar high point of many ethnic and heritage festivals is the children’s dance or ceremonial troupe in traditional costume. Yet handcrafted kids’ clothing, especially if intricate and including numerous components (beads, pendants, lace inserts, etc.) is likely to be highly expensive to test in compliance with the law. The same applies to the moccasins, buckskins, and dance gear that are cherished traditions for many Native American kids at powwows.
Some of the local press has been paying attention in recent days and the issue is beginning to reach the national press as well. The Wall Street Journal editorializes today. That attention has come only after weeks of mounting outrage at the grass-roots level, which as John Tozzi at Business Week has noted, has offered an emblematic example of the role of the new social media in giving voice to public concerns: besides alarm-raising at hundreds of blogs and forums (including Etsy and eBay), there’s been a torrent of Twitter discussion, a Ning group, YouTube, and nine Facebook groups so far. Even six month old babies are upset, or so their relatives say.
The initial reaction of many small businesspeople was to ask for as slight a modification in the law as they could, but it has become apparent that the law’s unreasonableness is across-the-board and systematic. Rick Woldenberg explains why a maze of exemptions and proliferation of categories would itself prove highly onerous, perhaps unworkable, for small businesses. Sarah at Just Add Charm writes, “it seems to me that a repeal of the CPSIA may be a better solution than trying to amend it to make it workable”. More on that idea here. I agree. Congress must repeal this bad law.
In our previous posts about the Consumer Product Safety Improvement Act (CPSIA), the federal law passed by Congress last year in the wake of the panic over Chinese toys with lead paint, we noted that it threatened to drive out of business a lot of small makers of wooden toys and other childrens’ products who cannot afford to spend thousands of dollars per lot to confirm the absence of lead paint (or phthalates, another banned substance) in their wares. A group called Handmade Toy Alliance has formed to call attention to the law’s burden on small manufacturers, and offers further detail at its website.
As reports in the last week make clear, however, a second economic disaster is also looming: thrift and secondhand stores around the country sell a large volume of clothing, toys and other items meant for use by those under 12, and are now exposed to stringent liability under the law. “The reality is that all this stuff will be dumped in the landfill,” predicted Adele Meyer, executive director of the National Association of Resale and Thrift Shops. Among the biggest losers if stores stop selling secondhand kids’ items: poorer parents who would have trouble dressing a growing family if they had to buy, say, winter coats new for $30 rather than used for $5 or $10. The regs are scheduled to take effect Feb. 10.
On January 8, as press coverage mounted, the Consumer Product Safety Commission (CPSC) rushed out a supposed clarification of the regulations: thrift shops, eBay sellers and other second-hand retailers would not be compelled to institute testing programs on all items sold, the way manufacturers would. But the commission made clear that if the stores do wind up selling any secondhand products containing the substances — phthalates, for example, are often found in bendy plastics — they face both criminal liability and civil fines (which run up to $100,000). It isn’t required that the store know or should have known that a pre-2009 item was in violation, and of course it isn’t required that anyone be harmed by the good (the entire episode has gone on with a near-total absence of any showing that actual kids had been harmed by the products swept from American shelves).
None of which seems to faze some advocates of the new measure. At Law and More, Jane Genova quotes Sue Gunderson, executive director of an anti-lead-paint group called ClearCorps:
What thrift stores seem to be requesting [in Gunderson’s view] is for the right to expose children to health and safety hazards. “Let’s get our priorities straight,” she insists. She goes on to pose this rhetorical question: “Mmmmmm, do we want cheap, second-hand toys that could damage children?” She frames this issue as a “business” one which the thrift-store industry will have to solve just as will every other business impacted by the new act.
If you think this is all too crazy to actually be happening, wait until you read the Boston Phoenix’s piece on the law’s threat to libraries:
“We are very busy trying to come up with a way to make it not apply to libraries,” said [Emily] Sheketoff [associate executive director of the American Library Association]. But unless she succeeds in lobbying Capitol Hill for an exemption, she believes libraries have two choices under the CPSIA: “Either they take all the children’s books off the shelves,” she says, “or they ban children from the library.”
About two weeks ago SSFN posted an item on the threat to independent toymakers of a new law passed by Congress in response to the lead-paint-on-Chinese-toys panic. A day or two later the Washington Post covered the issue and the story has been spreading to other media. Maybe the next Congress, though not exactly business-friendly in many other ways, will act before any general wipeout of the economy’s handcrafted-toy sector.
The Consumer Product Safety Act of 2008, sponsored by Illinois Congressman Bobby Rush and quickly signed into law by President Bush, soon goes into effect. Sold as a measure to protect children from the perils of Chinese and other foreign-made toys which may contain lead paint, the law was written with good intentions. Unfortunately, good intentions sometimes produce bad consequences. While this law may never save a child, it will certainly have consequences for small businesses which produce toys, as well as other products intended primarily for children under 12.
As always, the devil is in the details, and Publius Endures has given the details careful scrutiny. Among other little details, this law may require toy manufacturers and importers to perform costly outside testing, at a cost of over $4000, on each lot of toys shipped. If the law is so interpreted by the people who draft its enabling regulations, that will simply put small manufacturers out of business, leaving the American toy market to giants such as Mattel or driving more of the business to overseas competitors who produce on a larger scale and can absorb the cost. The result, probably not intended at all by lawmakers, may be monopoly or oligopoly in the American toy market, accomplished through regulation rather than market forces.
For more on this example of unintended consequences of hasty lawmaking in response to a panic, see Upturned Earth, which suggests that congress or regulators might be persuaded to amend or sensibly interpret the law, if only they understood what a potential monster they’ve created.
Andrew M. Grossman and James L. Gattuso analyze the CPSC Reform Act, S. 2663 (the update to S. 2045). We discussed Feb. 20 and Feb. 25, as well as briefly Jan. 1. Update: After the jump, Senator DeMint’s office provides the “Top Ten Reasons to Oppose the CPSC “Reform” Act (S. 2663)”