Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Zak is an associate in the Litigation Department in Morrison Foerster’s New York office.Zak’s practice focuses on class actions, commercial litigation, white collar defense, government investigations, and antitrust litigation and counseling. He has represented clients before federal and state courts in complex commercial matters, as well as in arbitration tribunals.Zak received his J.D. from New York University School of Law in 2018, where he was inducted into the Order of the Barristers. During law school, Zak also served as the Marden executive editor for the NYU Law Moot Court Board. In 2013, Zak received his B.A. and M.A. in political science from Yale University, receiving honors in his major and the Ellsworth Prize for Best Senior Essay in the Social Sciences.

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Zak Newman

Mitchell A. Hokanson is an associate in the Litigation Department of Morrison Foerster’s San Diego office.Mitchell’s practice focuses on commercial litigation and consumer class actions. He has extensive experience with civil litigation, including managing day-to-day strategy, propounding and responding to discovery, taking and defending depositions, and engaging in motion practice. He also has experience providing regulatory advice to clients, including pro bono partners and multinational corporations. Mitchell maintains an active pro bono practice.After law school, Mitchell worked as a judicial clerk for Justice Susan M. Carney of the Alaska Supreme Court, where he drafted bench memoranda and opinions on a wide range of state and federal law topics. Prior to joining MoFo, Mitchell worked for another international law firm, where he was a member of the Complex Civil Litigation practice group, in Los Angeles, California.Mitchell received his J.D. from Columbia Law School, where he was honored as a James Kent Scholar and Harlan Fiske Stone Scholar. While in law school he was the senior executive editor of the Columbia Journal of Environmental Law and worked as a judicial intern for Judge Sandra S. Ikuta of the United States Court of Appeals for the Ninth Circuit and Judge George B. Daniels of the United States District Court, Southern District of New York. Prior to that, Mitchell earned his B.A. from Stanford University.

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Mitchell Hokanson

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FDA Seeks to Phase Out Synthetic Color Additives

Client Alert: Jury Returns Verdict in “Manufactured in the USA” False Advertising Case

ICPHSO 2025: CPSC at ICPHSO

ICPHSO 2025: State Regulation in Response to Trump’s Push for Federal Deregulation

Everyone Please Stand: Supreme Court to Consider Standing Requirements for Class Actions, With the Potential to Resolve Long-standing Multi-circuit Split.

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“My Google Home Mini was inadvertently spying on me 24/7 due to a hardware flaw,” wrote a tech blogger who purchased Google Inc.’s latest internet of things (IoT) device. Following the incident, a pact of consumer advocacy groups insisted the U.S. Consumer Product Safety Commission recall the Google smart speaker due to privacy concerns arising when the device recorded all audio without voice command prompts.The CPSC is charged with protecting consumers from products that pose potential hazards. Traditionally, this has meant hazards that may cause physical injury or property damage. But as internet-connected household products continue to proliferate, issues like the “always-on” Google Home Mini raise an important question: Where does cybersecurity of consumer IoT devices fit within the current legal framework governing consumer products?Please see our full article as published on <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blta6b29dc043b75540/6273154ea1a1dd2aa9f6c96e/180105-connected-devices-liability-changes.pdf" target="_blank" rel="noopener">Law360</a>.

Fertility Center Litigation

Fitbit

MicroPort

Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

Leading Chemical Company

Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

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Co-Chair, Litigation Department

Erin Bosman is the global co-chair of Morrison Foerster’s litigation department. Erin is also the founder and co-head of the Artificial Intelligence group and former chair of the Complex Litigation + Advisement practice group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is the Global Co-Chair of Morrison Foerster’s Litigation Department. Erin is also the founder and co-head of the Artificial Intelligence Group and former chair of the Complex Litigation + Advisement Practice Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

An orthopedic implant company

A children&rsquo;s monthly subscription service product

A fertility company

A major technology company

A smart fitness equipment company

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Julie Park provides analytic and strategic counsel for issues in product life cycle, product liability and defective products, consumer class actions, and more.

Julie Park

Julie Park | Product Liability Lawyer

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

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Connected Devices Bring New Product Liability Challenges

New California IoT Law Requires Security for Connected Devices

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“My Google Home Mini was inadvertently spying on me 24/7 due to a hardware flaw,” wrote a tech blogger who purchased Google Inc.’s latest internet of things (Io

Connected Devices Bring New Product Liability Challenges

Nearly ten years after the first three phthalates were banned from children’s toys by Congress, the U.S. Consumer Product Safety Commission (CPSC) <a href="https://www.federalregister.gov/documents/2017/10/27/2017-23267/prohibition-of-childrens-toys-and-child-care-articles-containing-specified-phthalates">issued a final rule</a> on October 27 prohibiting five more.  The rule bans the manufacture for sale, offer for sale, distribution in commerce, or importation of children’s toys and products containing more than 0.1% of five phthalate chemicals.  Phthalates are a group of chemicals used to soften plastics and make them pliable and easier to grip and are found in numerous household products, including children’s toys.  The long-awaited final rule continues to face significant controversy regarding its scope and the data used to support it.Years in the making Due to concerns that phthalates can act as endocrine disruptors, Congress originally prohibited certain phthalates in the Consumer Product Safety Improvement Act of 2008 (CPSIA).  The CPSIA permanently banned three phthalates (DEHP, DBP, and BBP) and imposed an interim ban on an additional three (DINP, DNOP, and DIDP).  Section 108 of the CPSIA then required CPSC to convene a group of experts called the Chronic Hazard Advisory Panel (CHAP) to assess the risks of phthalates and phthalate alternatives.Thereafter, CHAP convened and ultimately recommended banning five additional phthalates in a July 2014 final report.  In addition to recommending that the interim ban on DINP be made permanent, CHAP recommended banning DIBP, DPENP, DHEXP, and DCHP.  According to the CPSIA, CPSC was required to issue a final rule addressing whether to make the interim ban permanent and whether to add any more phthalates to the ban no later than 180 days after the CHAP report was issued.  However, no rule was issued before the deadline and the final rule did not follow until this October—over two years and nine months later.The rule also ends litigation against CPSC for its delay in issuing the final rule.  The Natural Resources Defense Council and other groups had sued CPSC in December 2016 for failing to meet its January 14, 2015 deadline.  On October 31, 2017, that suit was dismissed with prejudice in light of CPSC’s issuance of the final rule.The final rulePredictably, the U.S. will now permanently ban toys containing the eight phthalates identified by CPSC in the proposed rule from 2014— DEHP, DBP, BBP (the three originally prohibited in the CPSIA) and DINP, DIBP, DPENP, DHEXP, DCHP (the five recommended by CHAP for a ban).  The rule takes effect on April 25, 2018.Controversy about the rule The final rule passed by a vote of three to two commissioners, reflecting the political divide on the Commission as well as the contentiousness surrounding a ban on phthalates.  Sensing the likelihood of litigation, CPSC Commissioner Elliot F. Kaye <a href="https://www.cpsc.gov/s3fs-public/CommissionerKayeStatementonPhthalatesFR10.18.17.pdf?jRKlsAV2JN8BremnAWRku2vzRlvmYn56">issued a statement</a> defending the rule and highlighting “how thorough the CHAP was and how its methods and conclusions were validated by a substantial peer review.”  He implored “judges and law clerks who may look over this record” to study Congress’s directive to the CPSC in the CPSIA, the science, and how the CPSC reviewed public comments during the rulemaking.Then-CPSC Commissioner Joseph P. Mohorovic, who voted against the rule, <a href="https://www.cpsc.gov/about-cpsc/commissioner/joseph-mohorovic/statements/statement-of-commissioner-joseph-p-mohorovic-2">issued a statement</a> that the Commission “missed [an] opportunity to pass a reasoned, evidence-based rule prohibiting the phthalates that pose actual risk to consumers.”  He stated that the standard for a phthalate to survive the ban—“reasonable certainty of no harm”—was inconsistently applied by CPSC throughout the rulemaking process.  Additionally, he noted that there is “scant evidence showing that the products covered by the Final Rule—toys and child care articles—contribute in any measureable way to overall phthalate exposure for the vulnerable population.”  Instead, he pointed to dietary sources as contributing “the most to overall phthalate exposure.”  Acting CPSC Chairman Anne Marie Buerkle <a href="https://www.cpsc.gov/s3fs-public/ACHBuerklesPhthalatesfinalrulestatement10302017.pdf?1N0bigFnYyn_CGtgCEGQZJrjTnsjv3RO">also published a statement</a> agreeing with some of the criticisms raised by Commissioner Mohorovic.  Their criticisms echo those raised by phthalate manufacturers that the CHAP report, and now the final rule, relied on outdated data from 2005.Challenges ahead Litigation and industry challenges are certain to follow.  The Toy Association issued a statement that it does not believe the rule is fully supported by scientific evidence.  Other industries may be subject to scrutiny for phthalate use in the future, including cosmetics and dietary sources, as raised by Commissioner Mohorovic.  Manufacturers outside of the toy and child product industries should monitor the controversy and seek counsel to determine whether their products may be at issue.

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CPSC Issues Final Rule Expanding Phthalate Ban

CPSC Issues Final Rule Expanding Phthalate Ban

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Nearly ten years after the first three phthalates were banned from children’s toys by Congress, the U.S. Consumer Product Safety Commission (CPSC) issued a fina

A federal district court in Wisconsin recently hit Spectrum Brands Inc. (Spectrum) with civil penalties of $1.9 million for violations of the Consumer Products Safety Act (CPSA).<a href="#_ftn1" name="_ftnref1">[1]</a>  The court’s 23-page opinion is a strong reminder of how devastating the impact can be for waiting to report violations and also shows the consequences of failing to implement robust CPSA compliance and recall programs.This judgment provides insight into the costs and benefits of litigation versus settlement following a CPSC civil penalties investigation.  Companies may benefit from the court’s analysis of effective compliance programs when attempting to shore up their own product safety compliance and product recall procedures.  And for companies looking to acquire another company or its product line, this decision also provides strong incentives to double down on CPSA due diligence to make sure they are not acquiring a significant liability.Case BackgroundIn November 2014, Spectrum, a consumer products company, merged with Applica Consumer Products, Inc., which owned and sold a Black & Decker SpaceMaker line of coffee machines.  Applica began selling the SpaceMaker in 2008.  About a year later, customers started complaining to Applica that the SpaceMaker’s carafe handle was suddenly cracking and breaking.  By May 2009, Applica had received 60 reports of broken handles and 4 reports of burns.  CPSC contended that this triggered Applica’s obligation to “immediately” report a product hazard to CPSC within 24 hours.  16 C.F.R. § 1115.14(e).  Applica did not report for almost three years, until April 2012.  By that time, they had been sued in a consumer class action and had received over five dozen reports of injury.  In addition, Applica inadvertently sold an additional 641 units after recalling the SpaceMakers.So where does Spectrum fit into all of this?  In the 2014 merger, Spectrum assumed all of Applica’s assets and liabilities.  So when CPSC and DOJ teamed up in 2015 to file an enforcement action against Applica, Spectrum was on the hook.During the enforcement litigation, Spectrum admitted liability for the sale of recalled products but contested liability for failure to report timely. As we <a href="http://classdismissed.mofo.com/consumer-products/court-decision-cpsc-enforcement-action">reported previously</a>, the court ruled against Spectrum on the government’s failure-to-report claim, holding it liable for failing to submit a timely report to CPSC.  On September 29, 2017, after holding a hearing to determine the appropriate amount of civil penalties and injunctive relief for these reporting and sale violations, the Wisconsin federal court ordered Spectrum to pay the government $1.9 million in civil penalties and granted the government injunctive relief.  Here we walk through the court’s penalty calculation for key takeaways.Penalty CalculationPenalty Cap: $15 Million, Post-CPSIA Statutory Maximum AppliedThe CPSA’s current statutory maximum penalty for “any related series of violations” is $15 million.  15 U.S.C. § 2069(a)(1).  And because Spectrum’s violations (late reporting to CPSC and sale of recalled products) counted as two separate “related series of violations,” the court held that the maximum penalty could not exceed $30 million (adjusted for inflation).Notably, Spectrum did not persuade the court that the much lower $1.25 million penalty cap—which existed before the Consumer Product Safety Improvement Act of 2008 (CPSIA), and was in effect when Spectrum’s obligation to report arose—applied to the reporting violation.  The court dismissed this as a “thinly recast version of [Spectrum’s] unsuccessful argument” (<a href="http://classdismissed.mofo.com/consumer-products/statute-of-limitations-taking-the-steam-out-of-cpsc-backed-enforcement-action/" target="_blank" rel="noopener">which we covered previously</a>) that the government’s claims were time barred.  Because Spectrum did not actually report until 2012, long after CPSIA was enacted, the post-CPSIA $15 million penalty cap applied.Art, Not Science: CPSA and Regulatory Factors AppliedThe court next considered the CPSA’s guidance to CPSC regarding an appropriate civil penalty.  Those congressionally identified factors are:  the nature, circumstances, extent, and gravity of the violation, including the nature of the product defect; the severity of the risk of injury; the occurrence or absence of injury; the number of defective products distributed; and the appropriateness of such penalty in relation to the size of the business.The court also looked to the CPSA’s regulatory guidance about civil penalties, which exist to promote policies of deterring violations, providing just punishment, promoting respect for the law, and protecting the public, among others.Finally, the court considered four specific regulatory factors:  (1) safety/compliance program and/or system relating to a violation; (2) history of noncompliance; (3) economic gain from noncompliance, and (4) failure to timely respond to CPSC’s requests for information or remedial action.Limited Evidence on Penalty Factors Mitigated DamagesInterestingly, the court found that most of the factors weighed in Spectrum’s favor, due to the lack of sufficient evidence to substantiate the government’s position.For example, although the carafe handles were clearly defective, the severity of the defect was unclear.  The government did not show how far the broken handles separated from the carafe, making it difficult to assess the risk of “catastrophic failure” that could lead to severe injuries from broken glass or hot coffee.On injury, the government also provided “no evidence regarding any injuries that a customer actually sustained by virtue of a failed handle (as opposed to those self-reported by customers),” and the court pointed out that only “one customer indicated receipt of medical attention.”Similarly, the government provided “no evidence” on whether Spectrum had a history of failing to comply with the CPSA or whether it responded appropriately to CPSC correspondence.No Robust Compliance Program a Big Factor in the Penalty PhaseThe biggest  issue for Spectrum related to its safety and CPSA compliance programs.  The court found that although Spectrum had systems in place, they were inadequate.  The court noted that those systems failed to (a) flag the defect, (b) prompt Spectrum to report timely that information was accumulating on failed coffee makers, and (c) identify “the dangerous trend emerging from the sale of the defective carafes over time.”The court specifically pointed out the disconnect between information being gathered by Spectrum’s engineers about quality, and the information being gathered by consumer complaint specialists about safety.Penalties for Selling Recalled Products Exceed Those for Untimely ReportingFor untimely reporting, the court imposed a graduated penalty scale, with higher penalties per complaint received as time went on and complaints mounted.  For each complaint received in the first six months after Spectrum’s reporting obligation arose, the court set the per-complaint penalty at $10, which represented the “rough profit on the sale of [each of] those defective products.”  For complaints received in the next six months, the court increased the per-complaint penalty to $75, representing the defective product’s purchase price.  And for each six-month period after that, the per-complaint penalty doubled ($150 per complaint, then $300, then $600, and so on) to reflect the “increasingly egregious failure to report.” All told, the final penalty for the reporting violation was $821,675.For selling recalled products—which the court found to be the more egregious violation—the court imposed a $1,000 and $2,000 per-unit-sold penalty (the more expensive one for later shipments).  The final penalty for selling recalled products was $1,115,000, or 56% of the total penalty.  This more punitive per-unit amount was justified, the court said, given “Spectrum’s size and sophistication,” its lack of “defined procedures for executing the recall,” lack of “pro-active material oversight on recalled product,” and lack of “automation to prevent outbound shipments” of recalled coffee makers.Injunctive Relief Focused on Compliance Programs and Education Spectrum was also ordered by the court to maintain “sufficient systems, programs, and internal controls to ensure compliance with the CPSA” and its regulations, including reporting requirements.  Spectrum was required to file a notice with the court indicating the improvements implemented.Additionally, the court ordered Spectrum to send a copy of its civil penalty and summary judgment opinions and orders to its directors, officers, management-level employees, and in-house attorneys involved in the sale, manufacture, distribution, or importation of consumer products.ConclusionSpectrum’s $1.9 million penalty and injunctive order highlight the need for consumer products companies to regularly audit their safety, compliance, and recall procedures to ensure they quickly identify, escalate, report, and remediate potential consumer hazards.  This case also underscores the need for high-level company management and in-house counsel to be familiar and comfortable with CPSA requirements so they can quickly mobilize if the company identifies a product hazard, triggering a reporting obligation or recall.  Finally, Spectrum serves as a warning to consumer products companies involved in mergers or product line acquisitions.  Performing robust due diligence on a target product or company regarding CPSA compliance can prevent acquisition of a significant liability down the road in the event of a CPSC investigation and increasingly common enforcement action.<a href="#_ftnref1" name="_ftn1">[1]</a> United States v. Spectrum Brands, Inc., No. 15-CV-371-WMC, 2017 WL 4339677, at *9 (W.D. Wis. Sept. 29, 2017).

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Fortune Favors the Quick (to Report): Judge Slaps Spectrum Brands with $1.9 Million Penalty in DOJ/CPSC Tag-Team Enforcement Action

Fortune Favors the Quick (to Report): Judge Slaps Spectrum Brands with $1.9 Million Penalty in DOJ/CPSC Tag-Team Enforcement Action

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A federal district court in Wisconsin recently hit Spectrum Brands Inc. (Spectrum) with civil penalties of $1.9 million for violations of the Consumer Products 

On October 4, the U.S. Senate Committee on Commerce, Science, and Transportation approved Ann Marie Buerkle’s (R-NY) nomination to the position of Chair of the Consumer Product Safety Commission (CPSC) after a two-day hearing.  Acting Chairman Buerkle’s nomination to another seven-year term as a CPSC Commissioner, beginning October 27, 2018, was also approved in a narrow 14-13 vote along party lines.As we recently <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt87ff5299fa271ad4/6273155f4d9f89297129014b/170725-law360-shift-in-cpsc-leadership.pdf">reported</a>, Acting Chairman Buerkle will likely lead a Republican-majority CPSC should the Senate approve President Trump’s <a href="http://classdismissed.mofo.com/cpsc/trump-to-nominate-new-commissioner-to-cpsc/">nomination </a>of Dana Baiocco to replace Democratic Commissioner Marietta Robinson.  Buerkle currently serves as Acting Chairman of CPSC and has consistently advocated for decreased penalties. In lieu of penalties, she emphasizes a cooperative approach between CPSC and consumer products manufacturers and suppliers to address product safety issues with minimal regulation.During her confirmation hearing, Acting Chairman Buerkle expressed the view that while Congress has directed mandatory rules for some products, CPSC should focus on pursuing a regime of voluntary standards.  According to Acting Chairman Buerkle, voluntary standards will achieve “buy-in” from standards setting organizations, which has resulted in substantial compliance from consumer products providers in the past.<a href="#_ftn1" name="_ftnref1">[1]</a>Buerkle’s nomination heads to the Senate, where she is expected to be confirmed.<a href="#_ftnref1" name="_ftn1">[1]</a> <a href="https://www.bna.com/senators-question-cpsc-n73014470262/">https://www.bna.com/senators-question-cpsc-n73014470262/</a>

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Buerkle Poised to Take Her Seat

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On October 4, the U.S. Senate Committee on Commerce, Science, and Transportation approved Ann Marie Buerkle’s (R-NY) nomination to the position of Chair of the 

Buerkle Poised to Take Her Seat

In a split across party lines, the U.S. Consumer Product Safety Commission (CPSC or the “Commission”) recently voted on a largely unprecedented course of action: to ban an entire class of chemicals from popular consumer products.  Specifically, CPSC adopted a petition for rulemaking that sought to prohibit a highly popular flame retardant from certain consumer products.  Although this decision is noteworthy because of its potential reach, it is still possible that the vote could end up having no impact on manufacturers once the political balance on the Commission shifts under President Trump.The origins of this vote go back to 2015, when a group of ten non-governmental organizations (NGOs) filed a petition for rulemaking with CPSC.  In their petition, the NGOs argued that non-polymeric organohalogen flame retardants should be banned from four categories of consumer products—children’s products, mattresses, electronic casings, and furniture—because the flame retardants migrate from those products and put consumers at risk of harm.<a href="#_ftn1" name="_ftnref1">[1]</a>Concern about flame retardants in consumer products is not new.  Virtually every major constituent—i.e., the federal government, state governments, and manufacturers—has voiced an opinion about it in the past.  For example, CPSC banned a class of flame retardants from children’s clothing in 1977;<a href="#_ftn2" name="_ftnref2">[2]</a> California began requiring labels on upholstered furniture in 2014 if the product included a flame retardant;<a href="#_ftn3" name="_ftnref3">[3]</a> and the nation’s largest furniture manufacturer stopped adding flame retardants to its foam cushions in 2015.<a href="#_ftn4" name="_ftnref4">[4]</a>  This petition nonetheless remains rare because of its application to an entire class of chemicals rather than specific chemicals shown to have particular risks of harm.Indeed, CPSC staff issued a brief on May 24, 2017, recommending that the Commission deny the petition because of its breadth.  Based on the research that was available, the staff wrote that organohalogen flame retardants demonstrated varying degrees of toxicity and exposure potential.  Therefore, the staff found that “under the [Federal Hazardous Substances Act] . . . one cannot conclude that all products in the four categories containing any [organohalogen flame retardants] are ‘hazardous substances.’”<a href="#_ftn5" name="_ftnref5">[5]</a>Despite the staff’s recommendation, CPSC voted on September 20, 2017 to adopt and begin the rulemaking process described in the petition.<a href="#_ftn6" name="_ftnref6">[6]</a>  The vote was strictly along party lines:  the three Democratic-appointed commissioners voted in favor of the petition while the two Republican-appointed commissioners voted against the petition.<a href="#_ftn7" name="_ftnref7">[7]</a>  In addition, the same Democratic majority voted to issue a sweeping guidance letter directed towards manufacturers, importers, distributors, retailers, and consumers.  The message was very clear:  one should not use, make, or sell children’s products, furniture, mattresses, or electronic casings with organohalogen flame retardants during the pendency of the rulemaking process.<a href="#_ftn8" name="_ftnref8">[8]</a>  And “consumers, especially those who are pregnant or with young children, [should] inquire and obtain assurances from retailers that such products do not contain” organohalogen flame retardants.<a href="#_ftn9" name="_ftnref9">[9]</a>Although the guidance letter is broad and forceful, it is not a binding or enforceable rule.  Nor does CPSC’s vote on the petition mean that the ban has taken place or necessarily will take place.  Rather, an advisory panel will begin to gather data and draft proposed regulations, and any final rule would need to pass through the customary notice and comment period.  In addition to those customary procedural hurdles, this particular rule’s fate faces a stern test from the political arena.As we wrote last week, President Trump has nominated Dana Baiocco to replace current CPSC Commissioner Marietta Robinson, who had been appointed by President Obama.<a href="#_ftn10" name="_ftnref10">[10]</a>  If Ms. Baiocco is confirmed, the makeup of the CPSC will shift from Democratic majority to Republican, making promulgation of the proposed rule unlikely given the breakdown of the vote.  Accordingly, this episode likely represents a last stand by the Democratic-appointed commissioners in the face of change, rather than a signal that this class of flame retardants will be banned in the near future.<a href="#_ftnref1" name="_ftn1">[1]</a> Earthjustice, Consumer Fed’n of Am., Petition HP15-1 Requesting Rulemaking on Certain Products Containing Organohalogen Flame Retardants (June 30, 2015), http://earthjustice.org/sites/default/files/files/FHSA-Petition%20_revised_6-30-15.pdf.<a href="#_ftnref2" name="_ftn2">[2]</a> Press Release, Consumer Prod. Safety Comm’n, CPSC Bans TRIS-Treated Children’s Garments (Apr. 7, 1977), <a href="https://www.cpsc.gov/Newsroom/News-Releases/1977/CPSC-Bans-TRIS-Treated-Childrens-Garments/">https://www.cpsc.gov/Newsroom/News-Releases/1977/CPSC-Bans-TRIS-Treated-Childrens-Garments/</a>.<a href="#_ftnref3" name="_ftn3">[3]</a> Jennifer 8. Lee, California to Ban Chemicals Used as Flame Retardants, New York Times (Aug. 10, 2003), <a href="http://www.nytimes.com/2003/08/10/us/california-to-ban-chemicals-used-as-flame-retardants.html?mcubz=0">http://www.nytimes.com/2003/08/10/us/california-to-ban-chemicals-used-as-flame-retardants.html?mcubz=0</a>.<a href="#_ftnref4" name="_ftn4">[4]</a> Michael Hawthorne, Watchdog update: Nation’s biggest furniture retailer drops flame retardants, Chicago Tribune (Mar. 6, 2015, 8:14 p.m.).<a href="#_ftnref5" name="_ftn5">[5]</a> U.S. Consumer Prod. Safety Comm’n, Staff Briefing Package in Response to Petition HP15-1, Requesting Rulemaking on Certain Products Containing Organohalogen Flame Retardants, p. 6 (May 24, 2017).<a href="#_ftnref6" name="_ftn6">[6]</a> Contrary to President Trump’s “one in, two out” directive, CPSC did not also repeal two prior regulations.<a href="#_ftnref7" name="_ftn7">[7]</a> U.S. Consumer Prod. Safety Comm’n, Minutes of Commission Meeting (Sept. 20, 2017), <a href="https://www.cpsc.gov/s3fs-public/Minutes_of_Commission-Meeting_September-20-2017-Petition_HP_15-1_Organohalogen_Flame_Retardants.pdf?vBwPee3oztjVKAWUq1k4QLtEJMPJCFL2">https://www.cpsc.gov/s3fs-public/Minutes_of_Commission-Meeting_September-20-2017-Petition_HP_15-1_Organohalogen_Flame_Retardants.pdf?vBwPee3oztjVKAWUq1k4QLtEJMPJCFL2</a>.<a href="#_ftnref8" name="_ftn8">[8]</a> Alberta E. Mills, U.S. Consumer Prod. Safety Comm’n, Guidance Document on Hazardous Additive, Non-Polymeric Organohalogen Flame Retardants in Certain Consumer Products, CPSC Docket No. CPSC-2015-0022 (Sept. 27, 2017), <a href="https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-20733.pdf">https://s3.amazonaws.com/public-inspection.federalregister.gov/2017-20733.pdf</a>.<a href="#_ftnref9" name="_ftn9">[9]</a> Id.<a href="#_ftnref10" name="_ftn10">[10]</a> Erin M. Bosman, Julie Y. Park, Trump to Nominate New Commissioner to CPSC, Class Dismissed (Sept. 22, 2017), <a href="http://classdismissed.mofo.com/cpsc/trump-to-nominate-new-commissioner-to-cpsc/">http://classdismissed.mofo.com/cpsc/trump-to-nominate-new-commissioner-to-cpsc/</a>.

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CPSC Heating Up Before New Commissioner Appointed: Approves a Petition for Rulemaking to Ban an Entire Class of Flame-Retardants

CPSC Heating Up Before New Commissioner Appointed: Approves a Petition for Rulemaking to Ban an Entire Class of Flame-Retardants

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In a split across party lines, the U.S. Consumer Product Safety Commission (CPSC or the “Commission”) recently voted on a largely unprecedented course of action

President Trump announced yesterday his intent to nominate Jones Day partner Dana Baiocco to the position of Commissioner of the Consumer Product Safety Commission (CPSC) for a 7-year term starting next month. She will replace Obama-appointed Commissioner Marietta Robinson. As we had <a href="http://classdismissed.mofo.com/product-liability/shift-in-cpsc-leadership-means-more-changes-to-come/" target="_blank" rel="noopener">predicted</a>, the makeup of the CPSC will shift from a 3-2 Democratic majority to a 3-2 Republican majority if Baiocco is confirmed. Expect to see less and fewer penalties under a Republican-majority Commission with fewer opponents to Acting Chairman Ann Marie Buerkle’s philosophy of deregulation.Here is the text of the White House press release issued yesterday:Dana Baiocco of Ohio to be Commissioner of the Consumer Product Safety Commission for a 7-year term beginning October 27, 2017. Ms. Baiocco was born and raised in Yorkville, Ohio. She graduated from Ohio University in 1998 [sic] and from Duquesne University School of Law in 1997, cum laude. She served as a federal judicial law clerk to The Honorable Gustave Diamond, U.S. District Court for the Western District of Pennsylvania, from 1996-1998. Ms. Baiocco joined the law firm of Jones Day in 1998 in the Pittsburgh, Pennsylvania office, and became a partner [in] 2007. She was one of the founding partners of Jones Day’s Boston office, which opened in 2011. She is a member of the Pennsylvania and Massachusetts Bar Associations, served as the chairwoman of the Pennsylvania Bar Association House of Delegates from 2009 to 2011 and also served on its board of governors. She is also a member of the Boston Bar Association. She currently lives in Boston with her husband, Andrew F. Susko and her daughter, Ava Bruening.

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Trump to Nominate New Commissioner to CPSC

Nevada Enacts CCPA-Style Opt-Out Right for Consumers—but Similarities Are Few

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President Trump announced yesterday his intent to nominate Jones Day partner Dana Baiocco to the position of Commissioner of the Consumer Product Safety Commiss

Trump to Nominate New Commissioner to CPSC

In a unanimous vote, the U.S. Consumer Product Safety Commission (CPSC) eliminated third-party testing for compliance with CPSC’s phthalates prohibitions for seven plastics.  The Commission decided that these plastics with specified additives do not contain concentrations above 0.1% of the phthalates prohibited in children’s toys and child care articles.Phthalates are sometimes used in children’s products as plasticizers, which work to soften plastic components.  The Consumer Product Safety Improvement Act of 2008 (CPSIA) prohibits the manufacture for sale, offer for sale, distribution in commerce, or importation into the United States of any children’s toy or child care article that contains concentrations above 0.1% of specified phthalates.  Children’s toys and child care articles subject to these restrictions are required to satisfy third-party compliance testing before the items can enter the stream of commerce.The rule approved by CPSC, which will go into effect on September 29, 2017, establishes that the following plastics with specified additives do not contain statutorily prohibited phthalates in concentrations above 0.1%, and third-party testing is therefore not necessary to ensure compliance with the CPSIA:<ul><li>Polypropylene (PP)</li><li>Polyethylene (PE)</li><li>General Purpose Polystyrene (GPPS)</li><li>Medium-Impact Polystyrene (MIPS)</li><li>High-Impact Polystyrene (HIPS)</li><li>Super High-Impact Polystyrene (SHIPS)</li><li>Acrylonitrile Butadiene Styrene (ABS)</li></ul>Children’s toys and child care articles containing concentrations of more than 0.1% of six prohibited phthalates will continue to be regulated under the CPSIA; however, this decision will significantly reduce the burden of third-party testing and certification for companies that manufacture, sell, or distribute children’s products.  <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltc26da982c278df46/6273156cb5ad5f2863c59558/150128phthalateban.pdf" target="_blank" rel="noopener noreferrer">Click here</a> for more information regarding CPSC’s phthalate requirements.