Far too often, we look at each rule an agency issues as a standalone rule impacting the specific stated regulatory objective. With regard to the long-awaited revisions to the U.S. Consumer Product Safety Commission’s Information Disclosure Rules under section 6(b) of the Consumer Product Safety Act, expected to be released shortly, all eyes will be looking to see what consequences the rule may have for confidential treatment of manufacturer self-reporting under section 15(b). Taking a broader view of how a change to one rule may affect agency practices under another statutory provision or rule can be helpful in identifying agency intentions or avoiding unintended consequences.
Such is the case with the CPSC’s currently pending proposed rule on the voluntary recall process. We have previously written an in-depth analysis of how the voluntary recall rule will affect manufacturers and retailers negotiating voluntary corrective action plans with the CPSC. A more nuanced point, however, is how the proposal to require all such plans to be enforceable settlement agreements will impact the section 6(b) confidentiality of materials submitted under section 15(b).
Currently, section 6(b)(5) restricts the disclosure to the public of any information that a manufacturer or private labeler submits pursuant to section 15(b) of the CPSA unless one of four things happens:
(i) the Commission has sued the firm in an administrative action (such as the case against Buckyballs);
(ii) the Commission has accepted “in writing a remedial settlement agreement dealing with such product;”
(iii) the submitter has agreed to its disclosure; or
(iv) the Commission publishes a finding that the public health and safety requires public disclosure.
Changing the voluntary recall rule to convert all voluntary corrective action plans into enforceable settlement agreements would seem to eliminate section 6(b) protection for section 15(b) reports and submissions. The current rule, 16 CFR § 1115.20(a), specifically states that a voluntary corrective action plan “has no legally binding effect.” Consent order agreements, covered by 16 CFR § 1115.20(b), carry the indicia of a “remedial settlement agreement” in as much as they require an admission of jurisdictional facts and the effective date of the agreement, as well as provisions regarding whether the agreement constitutes and admission of liability and the like, and are expressly legally binding. If all voluntary corrective actions become enforceable settlement agreements, all of the information that manufacturers share with the CPSC during section 15(b) submissions and conversations lose their special protections under section 6(b)(5) and become eligible for public release.
It is important to identify and address these more nuanced and legalistic issues in the rulemaking process to ensure that the interpretations and practices of the CPSC are transparent and out in the open. Perhaps the CPSC already considers a voluntary corrective action plan to meet the definition of a written remedial settlement agreement such that the confidential protections for manufacturer self-reports of product incidents and complaint data have been lost every time a recall is announced. If not, changing the legal effect of a voluntary corrective action plan has significant information disclosure ramifications. But if so, the CPSC should explain the policy and legal rationales driving its rules that directly relate to the statutory interpretation of a congressionally-mandated exception and impinge on the confidentiality of this information. This is especially true given that manufacturer self-reports have served as a driver for agency recall action. The decisions on the voluntary recall rule could affect the decision-making on how, when, and what manufacturers report as well as how to negotiate a corrective action plan with the CPSC.
Stakeholders on all sides of the issues have an interest in full disclosure and transparency on statutory interpretation and agency information disclosure practices. When changes to one rule can have ripple effects on other rules, identifying and addressing those consequences will contribute to agency transparency.