Recalls in Review: A monthly spotlight on trending regulatory enforcement issues at the CPSC.

As more communities lift pandemic-based restrictions on travel and social gathering sizes, Americans will increasingly begin moving homes and renovating furnished rental and guest rooms—which often includes replacing older mattresses.  Historically, mattresses were highly flammable and contributed significantly to house fires, leading Congress to address the safety concern through its enactment of the Flammable Fabrics Act (FFA) in the 1970s.

Through the FFA, the Consumer Product Safety Commission has authority to regulate mattresses and mattress pads, including setting a federal flammability standard (16 C.F.R. § 1632), which was promulgated in 1973 to require ignition resistance of mattresses and mattress pads to smoldering cigarettes.  The standard applies to mattresses—including traditional mattresses of all sizes, crib mattresses, futons, mattresses in sleeper sofas and campers, and water bed and air mattresses containing upholstery materials—and mattress pads and covers.  The federal Standard for the Flammability (Open-Flame) of Mattress Sets (16 C.F.R. § 1633), which became effective in 2007, was designed to increase the time that consumers have to discover and escape bed fires by limiting the size of the fire generated by a mattress set.  Mattresses must meet the performance, labeling, and record keeping requirements of both standards as applicable before the products can be entered into commerce in the United States.

Continue Reading Recalls in Review: Mattress Recalls

Playtime For Kids

Shortly after taking office, President Biden announced an “all of government” approach to achieving environmental justice. In Executive Order (E.O.) 14008, “Tackling the Climate Crisis at Home and Abroad,” President Biden stated that his administration would secure environmental justice for all Americans by addressing the disproportionately high and adverse health and environmental impacts in minority communities. In the several months that have passed since E.O. 14008 was issued, federal agencies, including the U.S. Consumer Products Safety Commission (“CPSC”), have begun implementing the administration’s policy by prioritizing equity and evaluating cumulative impacts in their policymaking.

In March 2021, CPSC Acting Chairman Robert Adler released an unprecedented statement emphasizing the CPSC’s “strong and ongoing commitment to diversity and equity.” The first of CPSC’s two-part 2021 Mid-Year Plan seeks to address the disproportionate safety risks that minority communities face with respect to consumer products. Under the plan, the CPSC will conduct safety equity studies to “determine whether there are specific areas of risk within ethnic, racial, socioeconomic, and other diverse populations” that face more danger from high-risk products. Specifically, the study will evaluate safety risks amongst different demographic groups, particularly in falls, drownings, and poisonings. The agency will use this data to inform future outreach and develop equitable safety standards. In addition, the CPSC has allocated funding to safety campaigns that highlight the unique risks and needs of diverse and vulnerable communities. Campaign messaging will include topics such as poison prevention, consumer product chemical safety, and other safety education information targeted to vulnerable communities. Continue Reading Biden’s Environmental Justice Push and its Impact on Retailers’ ESG Considerations

Upholsterer Installing Fabric on Seat Cushion with Air Stapler

The Consumer Product Safety Commission has issued new guidance and labeling instructions for the nationwide standard for upholstered furniture flammability.  On May 19, 2021, the CPSC published an online Q&A that provides important information to industry and previews the agency’s enforcement outlook.

The Q&A guidance confirms that the standard is effective as of June 25, 2021 but does not apply to items manufactured, imported, or reupholstered before June 25, 2021.  Industry has more time to implement the new labeling requirements:  the Q&A restates that the labeling requirement begins on June 25, 2022 and only applies to upholstered furniture manufactured, imported, or reupholstered on or after that date.

Continue Reading CPSC Issues Guidance on New Upholstered Furniture Flammability Standard

In a recent Law360 article titled, “Navigating NFT Brand Management Risks And Rewards,” David Ervin, Kayvan Ghaffari and Carissa Wilson explain what brand and business owners should know about NFT opportunities and corresponding risks, particularly with respect to trademark, licensing, anti-counterfeiting and advertising law.

Click here to read the full article.

Recalls in Review: A monthly spotlight on trending regulatory enforcement issues at the CPSC.

As people increasingly turn to online shopping over traditional brick-and-mortar stores, consumers, safety advocacy groups, and regulators alike have begun to pay more attention to the authenticity and safety of products.  One particular concern is the presence of lead in consumer products, which is toxic if ingested and can cause adverse health issues.

The Consumer Product Safety Commission has regulated lead in consumer products since the 1970s.  However, the Commission’s ability to regulate lead in children’s products was strengthened in 2008 with the enactment of the Consumer Product Safety Improvement Act (“CPSIA”).  CPSIA Section 101 limits lead content in accessible component parts  children’s products (15 U.S.C. § 1278a).  Section 101 and CPSC regulations (16 CFR Part 1303) also govern the use of lead in paints and other surface coatings on all children’s products and certain furniture products.  Movable pieces of furniture that contain surface coatings—such as beds, bookcases, and chairs—are covered by the regulation.

The CPSC very actively regulates and monitors products for violations of the federal safety standards regarding lead.  Nearly four hundred lead-related recalls have been conducted, with 317 of those recalls occurring since 2001.  As you can see from the below chart, the Commission paid great attention to excessive levels of lead in consumer products from 2006 to 2010.  The steep increase in lead-related recalls resulted in the enactment of the CPSIA in 2008.

Shockingly, the issue of lead in children’s products persists despite aggressive Commission action and strong congressional mandates.  In just the first two months of 2021, the CPSC issued 16 notices of violation for excess lead in children’s products.  Most of those actions involved publication of the product at issue as well as an immediate stop sale and agreement to correct future production but did not involve a consumer level recall.

Although not nearly as drastic as the last “enforcement spike,” the Commission may be turning its focus towards lead in consumer products once again.  Nine lead-related recalls were conducted in 2020, which is up from only one such recall in 2019, six in 2018, and four in 2017.  This increase occurred despite a sharp reduction in the overall number of toys recalled in fiscal year 2020—discussed in a November 2020 CPSC News Release.

Lead-related recalls have targeted a wide variety of products over the years.  Unsurprisingly, the most commonly recalls product types include toys (37%) and children’s jewelry (25%).  Other more frequently recalled product types include furniture, clothing, sports equipment, and art supplies.

According to information provided by the CPSC recall announcements, seventy percent of the recalls address violations of standard for lead in paint and surface coatings and thirty percent address violations of the standard for total lead content.  In addition to addressing lead paint violations, one 2006 recall also addresses a laceration hazard and a 2014 recall addresses choking and injury hazards.

The public can monitor children’s product recalls on CPSC.gov or SaferProducts.gov for violations of the federal lead standards.  According to the CPSC recall announcements, the vast majority of products (97%) are recalled despite having no reported incidents involving consumers.  Of the ten recalls that had reported incidents involving consumers, six involved reports of elevated blood-lead levels in children, two involved reports of lead poisoning, and two involved reports of the product breaking.

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About Recalls in Review:  As with all things, but particularly in retail, it is important to keep your finger on the pulse of what’s trending with consumers.  Regulatory enforcement is not different—it can also be subject to pop culture trends and social media fervor.  And this makes sense, as sales increase for a “trending” product, the likelihood of discovering a product defect or common consumer misuse also increases.  Regulators focus on popular products when monitoring the marketplace for safety issues.

As product safety lawyers, we follow the products that are likely targets for regulatory attention.  We share our observations with you through Recalls in Review.

Consumer protection

Could the end of Section 6(b) of the Consumer Product Safety Act (CPSA) actually be near?  Time will tell.  But last week’s development on Capitol Hill in the saga of “Section 6(b)” is noteworthy, and, one day in the not-so-distant future, may be recognized as the beginning of the end for this controversial provision of the law.

On April 22, Senator Richard Blumenthal (D-CT) and Representatives Jan Schakowsky (D-IL) and Bobby Rush (D-IL) introduced legislation—the Sunshine in Product Safety Act—to fully repeal Section 6(b) of the CPSA.  This is the first time in recent memory that Members of Congress have introduced legislation to do away with Section 6(b) altogether.  For example, in the last Congress, Representative Rush introduced the “SHARE Act,” which sought primarily to scale back one of Section 6(b)’s most important protections for firms—allowing a company to judicially challenge the U.S. Consumer Product Safety Commission’s (“CPSC” or “the Commission”) decision to release information about a firm, or one of its products, prior to its disclosure.  But that legislation left the rest of Section 6(b)’s procedures and protections intact.  This current bill, therefore, is much more ambitious, and stakeholders should take note.

By way of background, Section 6(b) requires the CPSC to engage in certain procedural steps before publicly disclosing information from which the identity of a manufacturer of a product can be readily ascertained.  Those include taking reasonable steps to ensure that the information to be disclosed publicly is fair, accurate, and reasonable related to effectuating the purpose of the product safety laws.  Practically speaking, this means notifying the manufacturer of the potential disclosure, providing either a summary of what the agency intends to disclose, or the actual disclosure itself, and providing the company with the opportunity to comment, typically 15 days, though that time period can be shortened by the CPSC with a “public health and safety finding.”  Other regulators, like FDA and NHTSA, do not have similar statutory constraints on the release of product information nor do they have due process protections around data release, whether those be adverse events or vehicle accidents. Continue Reading New Bills Seek to Repeal Controversial Provision of Product Safety Act

American Politics & Money - Supreme Court & polititans campaign donations

Last week the Supreme Court unanimously held that §13(b) of the Federal Trade Commission Act does not give the Federal Trade Commission the power to seek equitable monetary relief such as disgorgement or restitution. The Court’s opinion in AMG Capital Management LLC v. Federal Trade Commission removes a powerful tool that the FTC has long relied on to pursue monetary relief for consumers in both consumer protection and competition matters.

By way of background, the FTC has authority to protect consumers from unfair or deceptive acts or practice (“UDAP”) and unfair methods of competition (“UMC”) with an overlapping but distinct set of tools it can use to pursue its dual consumer protection and competition missions:

  • Administrative Proceeding: The FTC can initiate an administrative proceeding to seek a cease and desist order for either a UDAP or UMC violation from an administrative law judge. If necessary, the FTC can later bring a contempt proceeding in federal court seeking to enforce the terms of an administrative order. A defendant may respond by arguing that it has “substantially complied” with the terms of the order. If the FTC prevails in such a case, it can seek civil penalties and other equitable relief necessary to enforce the order (however monetary relief only applies to UDAP violations).
  • Rulemaking: The FTC has authority to promulgate rules that define UDAP with specificity. Generally, this requires a lengthy, formal rulemaking process that allows for public comment, and a final rule can be challenged in federal court. If a defendant later violates a duly enacted UDAP rule, the FTC can seek civil penalties for a knowing violation. The FTC can also file suit in federal court and obtain monetary relief “to redress consumer injury,” including an order compelling “refund of money or return of property,” but only if “a reasonable man would have known under the circumstances [that the challenged conduct] was dishonest or fraudulent.”
  • Federal Court: The FTC can sue in federal court under §13(b) of the FTC Act to enjoin a defendant when the defendant “is violating, or is about to violate” a law that the FTC enforces and such an injunction is in the public’s interest. While courts have historically read §13(b) as giving the FTC an implied right to recover equitable monetary relief in addition to injunctive relief, the Supreme Court’s ruling now limits the FTC to seeking injunctive relief only.

Continue Reading The Supreme Court Limits FTC’s §13(b) Powers

Consumer Protection. Laws, regulations and data security. Pencils, wooden stamps on orange paper

On April 15, 2021, the FTC filed its first complaint under the COVID-19 Consumer Protection Act (the CCP Act). The complaint, filed in the United States District Court for the Eastern District of Missouri, alleges that an in-state chiropractor and his company violated both the CCP Act and the FTC Act by deceptively marketing Vitamin D and Zinc products to treat COVID-19.

According to the complaint, St. Louis-based Eric A. Nepute and his company, Quickwork LLC, promote scientifically proven representations that the Wellness Warrior products containing Vitamin D and Zinc will provide equal or better protection against COVID-19 than currently available COVID-19 vaccines.  Additionally, Nepute’s videos claimed that “COVID-19 Patients who get enough Vitamin D are 52% less likely to die” and that people who consume enough Vitamin D3 “have a 77% less chance of getting infected in the first place.”

In May 2020, Nepute received a warning letter advising him to review the claims for his products and to cease making representations unsupported by reliable scientific evidence. According to the complaint, despite the warning letter, the defendants “ramped up their unsubstantiated claims regarding Vitamin D and Zinc.” The FTC is now seeking monetary penalties and a preliminary injunction that bars defendants from making health claims unless they are true and can be substantiated by competent and reliable scientific evidence.

The COVID-19 Consumer Protection Act 

Titled the “COVID-19 Consumer Protection Act” (see page 2094 here), the law lasts for the duration of the COVID-19 public health emergency declared pursuant to section 319 of the Public Health Service Act (42 U.S.C. 247d).

The Act makes it unlawful under Section 5 of the Federal Trade Commission Act for any person, partnership, or corporation to engage in a deceptive act or practice in or affecting commerce associated with the treatment, cure, prevention, mitigation, or diagnosis of COVID–19 or a government benefit related to COVID–19. The Act provides that such a violation shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under Sec. 18(a)(1)(B) of the FTC Act enabling the FTC to obtain civil penalties.

The FTC’s Efforts to Enforce the COVID-19 Consumer Protection Act 

The FTC has made it clear by sending hundreds of warning letters during the COVID-19 pandemic that it is closely monitoring deceptive COVID-19 acts and practices. Advertisers cannot make any express or implied claims that their products or services are effective against preventing or curing coronavirus absent competent and reliable scientific evidence. Now, the FTC is armed with the power to seek civil penalties and we should expect additional lawsuits under the CCP Act as  it continues to monitor the marketplace.

Blind person using computer with braille computer display and a computer keyboard. Blindness aid, visual impairment, independent life concept.

After more than two years of deliberation, the Eleventh Circuit issued its decision in Gil v. Winn-Dixie on April 7, 2021.  Writing for the majority, Judge Elizabeth Branch reversed a trial court decision and found that Winn-Dixie’s website, which is incompatible with screen reading software used by the plaintiff, who is blind, did not violate Title III of the Americans with Disabilities Act (“ADA”).  In doing so, the court’s opinion in this closely-watched case advances the law in several frequently litigated issues in ADA Title III website accessibility disputes.

The Appellate Court’s Opinion

The Eleventh Circuit’s decision includes two key takeaways: (1) that websites are not “places of public accommodation” under the ADA; and (2) a rejection of the “nexus” standard, notably adopted by the Ninth Circuit.  In what it described as a strict textual reading of the ADA, the majority concluded that the retailer’s website was not a “place of public accommodation” within the meaning of the ADA.  Judge Branch emphasized that the statute includes an “expansive list” of examples of public accommodations—all of which are physical locations, not websites.  The court further reasoned that the website’s functionality did not interfere with the plaintiff’s right to “full and equal enjoyment” of a place of public accommodation, because he had visited its physical locations on many occasions.

The majority also rejected the plaintiff’s theory that the grocery store violated the ADA because its website was a “nexus” to its physical locations, and thus must be accessible to people with disabilities.  Among other courts, the Ninth Circuit adopted the “nexus” theory in its widely-publicized 2019 opinion in  Robles v. Domino’s.

The Eleventh Circuit also rejected the plaintiff’s alternative theory of liability under the ADA.  Gil argued that the website’s inaccessibility created an “intangible barrier” to the goods and services at the brick-and-mortar store.  The court rejected this claim, focusing on the fact that the website had “limited use” and was not the sole access point to the store.  Language in the majority opinion supports a relatively narrow interpretation of the statutory “auxiliary service” issue that is frequently litigated in ADA Title III cases.  See 42 U.S.C. § 12182(b)(2)(A)(i)-(ii).

Penning a dissent as long as the majority’s opinion, Judge Jill Pryor explained, “[t]he ADA is a sweeping piece of legislation; it is hardly surprising that its terms prohibiting discrimination are broad and inclusive.”  By narrowing the applicability of the ADA, Judge Pryor worried about the unintended consequences.  “As I read it, the majority opinion gives stores and restaurants license to provide websites and apps that are inaccessible to visually-impaired customers so long as those customers can access an inferior version of these public accommodations’ offerings.” Continue Reading Website Wars: Eleventh Circuit Rules in a Split Decision That Websites are Not Public Accommodations for Purposes of the Americans With Disabilities Act

Promotional products seller Gennex Media LLC and its owner, Akil Kurji, have settled Federal Trade Commission (“FTC”) charges that they made false, misleading, or unsupported advertising claims that their “Brandnex” customizable promotional products were “all or virtually all” made in the United States. Despite numerous claims that the company’s novelty items were “Made in the USA,” “USA Made,” and “Manufactured Right Here in America!”, the items were wholly imported from China.

The settlement requires Gennex and Kurji to pay the FTC a monetary judgment of $146,249.24. In addition to the payment, the parties are required to follow post-settlement remediation measures. Some of these measures include: (1) providing customer information to the FTC in order to ensure proper customer redress; (2) submitting compliance reports to the FTC one year post-settlement; and (3) maintaining certain business records for five years. Continue Reading Made in USA Settlement for Chinese Imports