CPSC OGC Advisory Opinion No. 322
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-==='=-
41' :JJ.2
-WITH PORnONI
IBIOVED: ---
U.S. CONSUMER
PRODUCT SAFETY COMMISSION
4330 EAST WEST HIGHWAY
BETHESDA,
MD 20814
Cheryl A. Falvey
General
Counsel
Office of the General Counsel
Tel: 301.504.7642
Fax: 301.504.0403
Email: cfalvey@cpsc.gov
November 14, 2008
Mr. Michael A. Brown
Brown & Gidding, P.C.
3201 New Mexico Avenue, N.W. Suite 242
Washington, D.C. 20016
Dear Mr. Brown:
I have received your request for reconsideration of the advisory opinion on whether the
limits in Consumer Product Safety Improvement Act (the "Act") on the amount oflead
permissible in children's products apply to unsold inventory when those limits take effect in
February of 2009. The Commission is aware of the potentially significant economic impact that
the new Act could have on any remaining inventory next February. However, Congress stated
that children's products that did not meet the new lead limits would be treated as "a banned
hazardous substance" under the Federal Hazardous Substances Act as of February 10, 2009, and
made it unlawful "to sell, offer for sale, manufacture for sale, distribute in commerce, or import
into the United States" any banned hazardous substance. The language Congress wrote does not
permit me the flexibility to take into consideration the policy issues that have been raised by you
and your client as to the potential consequences of requiring products to meet the new stricter
lead limits by that date. For the reasons provided in the September 12, 2008 advisory opinion,
which will not be readdressed here, your request for reconsideration is denied. 1 If you believe
that your client will be unable to bring its products into compliance with the statutory
requirements, I suggest that you consider petitioning the Commission for relief.
Sincerely,
Isl
Cheryl A. Falvey
1 Advisory opinions represent the legal opinions of the General Counsel and may be changed or
superseded by the Commission.
CPSC Hotline: 1-800-638-CPSC
deration is denied. 1 If you believe
that your client will be unable to bring its products into compliance with the statutory
requirements, I suggest that you consider petitioning the Commission for relief.
Sincerely,
Isl
Cheryl A. Falvey
1 Advisory opinions represent the legal opinions of the General Counsel and may be changed or
superseded by the Commission.
CPSC Hotline: 1-800-638-CPSC
(2772) * CPSC's Web Site: http://www.cpsc.gov
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-WITH PORnONI
IBIOVED: ---
z744
m5086%, 1-322
.WITHPORTIONSREMOVED:.
U.S. CONSUMER PRODUCT SAFETY COMMISSION
Cheryl A. Falvey
General Counsel
Office of the General Counsel
4330 EAST WEST HIGHWAY
BETHESDA, MD 20814
November 14, 2008
Mr. Michael A. Brown
Brown & Gidding, P.C.
3201 New Mexico Avenue, N.W. Suite 242
Washington, D.C. 20016
Dear Mr. Brown:
Tel: 301.504.7642
Fax: 301.504.0403
Email: cfalvey@cpsc.gov
I have received your request for reconsideration of the advisory opinion on whether the
limits in Consumer Product Safety Improvement Act (the "Act") on the amount oflead
permissible in children's products apply to unsold inventory when those limits take effect in
February of 2009. The Commission is aware of the potentially significant economic impact that
the new Act could have on any remaining inventory next February. However, Congress stated
that children's products that did not meet the new lead limits would be treated as "a banned
hazardous substance" under the Federal Hazardous Substances Act as of February 10, 2009, and
made it unlawful "to sell, offer for sale, manufacture for sale, distribute in commerce, or import
into the United States" any banned hazardous substance. The language Congress wrote does not
permit me the flexibility to take into consideration the policy issues that have been raised by you
and your client as to the potential consequences of requiring products to meet the new stricter
lead limits by that date
"to sell, offer for sale, manufacture for sale, distribute in commerce, or import
into the United States" any banned hazardous substance. The language Congress wrote does not
permit me the flexibility to take into consideration the policy issues that have been raised by you
and your client as to the potential consequences of requiring products to meet the new stricter
lead limits by that date. For the reasons provided in the September 12, 2008 advisory opinion,
which will not be readdressed here, your request for reconsideration is denied. 1 If you believe
that your client will be unable to bring its products into compliance with the statutory
requirements, I suggest that you consider petitioning the Commission for relief.
Sincerely,
Isl
Cheryl A. Falvey
1 Advisory opinions represent the legal opinions of the General Counsel and may be changed or
superseded by the Commission.
CPSC Hotline: 1-800-638-CPSC (2772) * CPSC's Web Site: http://www.cpsc.gov
BROWN & GtOOING, P.C.
November 4, 2008
Cheryl A. Falvey, Esquire
General Counsel
Office of the General Counsel
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814
Request for Reconsideration of the
omce
of the General Counsel's Advisory Opinion
on Retroactive Application to Inventory
of Total Lead Limits Specified In the
Consumer Product Safety Improvement Act of 2008
Dear Cheryl:
It was a pleasure talking with you at the BNA conference on the
Consumer Product Safety Improvem~nt Act of 2008 ("CPSIA"). As you know,
Brown & Gidding represents a number of clients who manufacture and/or import
children's products and thus will be subject, as of February 2009, to the new
total lead limits set forth in Section l0l{a) of the CPSIA. On their behalf, we
respectfully request reconsideration of the advisory opinion Issued by the Office
of the General Counsel, captioned "Retroactive Application of the CPSIA to
Inventory," dated September 12, 2008 (''the OGC Lead Inventory Opinion'')
import
children's products and thus will be subject, as of February 2009, to the new
total lead limits set forth in Section l0l{a) of the CPSIA. On their behalf, we
respectfully request reconsideration of the advisory opinion Issued by the Office
of the General Counsel, captioned "Retroactive Application of the CPSIA to
Inventory," dated September 12, 2008 (''the OGC Lead Inventory Opinion'').
That opinion concluded that the CPSIA's new total lead limits should retroactively
apply to product inventory as of February 2009.
We applaud and recognize the Commission staff's hard work and earnest
efforts to seek and offer guidance on the many new obligations the CPSIA
creates. The task is a daunting one, not only because of the CPSIA's myriad of
new obligations and demanding tlmelines, but also, in large part, because the
legislation that Congress ultimately passed -- a measure born of competing
agendas and committee staff compromises driven by the pressure to produce a
final bill before the imminent August recess of the lawmakers involved - is hardly
a model of legislative clarity. We have now had a chance to digest the new
legislation more fully and to appreciate more fully the practical and legal
ramifications of the new legislative provisions, not the least of which are those
relating to total lead. As detailed below, applying the new total lead limits to
ATTORNEYS
AT LAW
3201 New Mexico Ave., N.W. • Suite 242 • Washington, O.C. 20016-2756
Tel. (202) 231-6008 • Fax (202) 237-5259
BROWN & GtOOING, P.C.
ATTORNEYS
AT LAW
BROWN & GIDDING, PC.
November 4, 2008
Cheryl A. Falvey, Esquire
General Counsel
Office of the General Counsel
U.S
least of which are those
relating to total lead. As detailed below, applying the new total lead limits to
ATTORNEYS
AT LAW
3201 New Mexico Ave., N.W. • Suite 242 • Washington, O.C. 20016-2756
Tel. (202) 231-6008 • Fax (202) 237-5259
BROWN & GtOOING, P.C.
ATTORNEYS
AT LAW
BROWN & GIDDING, PC.
November 4, 2008
Cheryl A. Falvey, Esquire
General Counsel
Office of the General Counsel
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814
Request for Reconsideration of the
Office of the General Counsel's Advisory Opinion
on Retroactive Application to Inventory
of Total Lead Limits Specified in the
Consumer Product Safety Improvement Act of 2008
Dear Cheryl:
It was a pleasure talking with you at the BNA conference on the
Consumer Product Safety Improvement Act of 2008 ("CPSIA"). As you know,
Brown & Gidding represents a number of clients who manufacture and/or import
children's products and thus will be subject, as of February 2009, to the new
total lead limits set forth in Section 101(a) of the CPSIA. On their behalf, we
respectfully request reconsideration of the advisory opinion Issued by the Office
of the General Counsel, captioned "Retroactive Application of the CPSIA to
Inventory," dated September 12, 2008 (''the OGC Lead Inventory Opinion").
That opinion concluded that the CPSIA's new total lead limits should retroactively
apply to product inventory as of February 2009.
We applaud and recognize the Commission staff's hard work and earnest
efforts to seek and offer guidance on the many new obligations the CPSIA
creates. The task is a daunting one, not only because of the CPSIA's myriad of
new obligations and demanding tlmelines, but also, in large part, because the
legislation that Congress ultimately passed -- a measure born of competing
agendas and committee staff compromises driven by the pressure to produce a
final bill before the imminent August recess of the lawmakers involved - is hardly
a model of legislative clarity
nting one, not only because of the CPSIA's myriad of
new obligations and demanding tlmelines, but also, in large part, because the
legislation that Congress ultimately passed -- a measure born of competing
agendas and committee staff compromises driven by the pressure to produce a
final bill before the imminent August recess of the lawmakers involved - is hardly
a model of legislative clarity. We have now had a chance to digest the new
legislation more fully and to appreciate more fully the practical and legal
ramifications of the new legislative provisions, not the least of which are those
relating to total lead. As detailed below, applying the new total lead limits to
ATTORNEYS AT LAW
3201 New Mexico Ave., N.W. • Suite 242 • Washington, D.C. 20016-2756
Tel. (202) 237-6008 • Fax (202) 237-5259
Cheryl L. Falvey, Esquire
November
4, 2008
Page2
product inventory as of February 2009 will have seismic practical, logistical,
economic and legal consequences
for affected businesses. Moreover, when one
considers the relevant CPSIA provisions, and the conflicting inferences that can
be drawn from them, we believe that the law does not provide the kind of
unambiguous expression of Congressional
intent to apply the new total lead
limits retroactively needed to overcome the strong presumption againstsuch
retroactive application of the law. See, e.g., Landgraf v. USI FIim Prods., 511
U.S. 244, 280 (1994).
For the reasons discussed below, we, believe that the OGC opinion that the
new CPSIA lead limits apply to Inventory as of February 2009 runs afoul of Landgraf,
as the application of such limits will "have a retroactive ~,
i.e., . . . it would
Impair rights a party possessed
when he acted, increase a party's liability for past
conduct, or impose new duties with respect to transactions already concluded"
(emphasis added). 511 U.S. at 280
hat the OGC opinion that the
new CPSIA lead limits apply to Inventory as of February 2009 runs afoul of Landgraf,
as the application of such limits will "have a retroactive ~,
i.e., . . . it would
Impair rights a party possessed
when he acted, increase a party's liability for past
conduct, or impose new duties with respect to transactions already concluded"
(emphasis added). 511 U.S. at 280. When this retroactive effect is coupled with the
CPSIA's
ambiguous language on the retroactivity issue, we believe that the better
reading of the law does not permit construing the CPSIA as having retroactive
application to the lead llmlts. Instead, in our view, the law supports prospective
application of the lead limits.
I.
Retroactive Application of ~e CPSIA's Total Lead Limits to Product
Inventory Will Impose New Obligations and Liabllltles for
Commercial Conduct Already Completed
It is now approximately seven weeks since the issuance of the OGC Lead
Inventory Opinion. As we now know from direct experience in counseling many
different clients, applying the statute retroactively
will have severe practical,
economic, logistical and economic consequences.
At the outset, the Commission's
opinion affects all products primarily Intended for use by children under twelve years
of age -- literally hundreds of millions or more units In Inventory and billions of dollars
in value. According to the opinion, as of February 10, 2009, such products in
inventory that contain lead In excess 600 ppm will be contraband. Although, as a
practical matter, the great majority of these products may meet this limit, virtually
none of this inventory has been tested for the presence of elemental lead in excess
of 600 ppm because no federal obligation or requirement to do so previously existed.
Hence, no record exists to determine which items comply and which are contraband
in lead In excess 600 ppm will be contraband. Although, as a
practical matter, the great majority of these products may meet this limit, virtually
none of this inventory has been tested for the presence of elemental lead in excess
of 600 ppm because no federal obligation or requirement to do so previously existed.
Hence, no record exists to determine which items comply and which are contraband.
Moreover, as the Commission staff recognizes, one cannot simply look at
a product-to determine whether it contains lead or, if it does contain lead, the
level of lead Involved. Instead, determining the total level of lead in the
components of a product ( or determining the absence of lead) requires expert
Cheryl L. Falvey, Esquire
November 4, 2008
Page 2
product inventory as of February 2009 will have seismic practical, logistical,
economic and legal consequences for affected businesses. Moreover, when one
considers the relevant CPSIA provisions, and the conflicting inferences that can
be drawn from them, we believe that the law does not provide the kind of
unambiguous expression of Congressional intent to apply the new total lead
limits retroactively needed to overcome the strong presumption against such
retroactive application of the law. See, e.g., Landgraf v. USI Fllm Prods., 511
U.S. 244, 280 (1994).
For the reasons discussed below, we, believe that the OGC opinion that the
new CPSIA lead limits apply to inventory as of February 2009 runs afoul of Landgraf,
as the application of such limits will "have a retroactive effect, /.e., . . . it would
Impair rights a party possessed when he acted, increase a party's liability for past
conduct, or impose new duties with respect to transactions already concluded"
(emphasis added). 511 U.S. at 280. When this retroactive effect is coupled with the
CPSIA's ambiguous language on the retroactivity issue, we believe that the better
reading of the law does not permit construing the CPSIA as having retroactive
application to the lead llmlts
ted, increase a party's liability for past
conduct, or impose new duties with respect to transactions already concluded"
(emphasis added). 511 U.S. at 280. When this retroactive effect is coupled with the
CPSIA's ambiguous language on the retroactivity issue, we believe that the better
reading of the law does not permit construing the CPSIA as having retroactive
application to the lead llmlts. Instead, in our view, the law supports prospective
application of the lead limits.
I.
Retroactive Application of the CPSIA's Total Lead Limits to Product
Inventory Will Impose New Obligations and Liabllltles for
Commercial Conduct Already Completed
It is now approximately seven weeks since the issuance of the OGC Lead
Inventory Opinion. As we now know from direct experience in counseling many
different clients, applying the statute retroactively will have severe practical,
economic, logistical and economic consequences. At the outset, the Commission's
opinion affects all products primarily Intended for use by children under twelve years
of age -- literally hundreds of millions or more units In Inventory and billions of dollars
in value. According to the opinion, as of February 10, 2009, such products in
inventory that contain lead In excess 600 ppm will be contraband. Although, as a
practical matter, the great majority of these products may meet this limit, virtually
none of this inventory has been tested for the presence of elemental lead in excess
of 600 ppm because no federal obligation or requirement to do so previously existed.
Hence, no record exists to determine which items comply and which are contraband.
Moreover, as the Commission staff recognizes, one cannot simply look at
a product-to determine whether it contains lead or, if it does contain lead, the
level of lead Involved. Instead, determining the total level of lead in the
components of a product (or determining the absence of lead) requires expert
isted.
Hence, no record exists to determine which items comply and which are contraband.
Moreover, as the Commission staff recognizes, one cannot simply look at
a product-to determine whether it contains lead or, if it does contain lead, the
level of lead Involved. Instead, determining the total level of lead in the
components of a product (or determining the absence of lead) requires expert
Cheryl L Falvey, Esquire
November 4, 2008
Page3
testing -- an expensive and time consuming process.
1 Given the vast Inventory
throughout the U.S. economy affected by the retroactive application of the law;
the costs and logistics of testing will be staggering,
2 even if such testing could be
performed as a practical matter within the next 100 days. Given these real
practical limitations, manufacturers, distributors and retailers will have to make a
choice in February 2009 if retroactive application of total lead rules prevails: sell
inventory at risk of violating the Federal Hazardous Substances Act (FHSA) or
abandon their existing inventory at enormous, possibly fatal expense.
Various Brown and Gidding clients have offered their own estimates of the
economic and practical costs if the new total lead limits apply retroactively to
inventory. One large retailer, who has thousands of stores, estimates that the
value of the affected inventory could be as high as $500,000,000. Another client
estimates that it might have inventory at risk in excess of its financial capital,
potentially causing a default under its loan agreements or rendering Its
operations unfinanceable. The impact of applying the lead requirements
retroactively will present these and other clients with the Draconian options of
Incurring huge expenses for what appears to be little gain In public safety or
risking the Imposition of fines and penaltles
y at risk in excess of its financial capital,
potentially causing a default under its loan agreements or rendering Its
operations unfinanceable. The impact of applying the lead requirements
retroactively will present these and other clients with the Draconian options of
Incurring huge expenses for what appears to be little gain In public safety or
risking the Imposition of fines and penaltles.
Branding previously legal item_s
as contraband and saddling consumer
product businesses with these new and expensive tasks unquestionably violates
"elementary considerations of fairness [which] dictate that individuals should
have an opportunity to know what the law is and conform their conduct
accordingly; settled expectations should not be lightly disrupted." Landgraf. 511
U.S. at 265. Businesses
with existing inventory affected by the ban that goes
into effect on February 10, 2009 legallv purchased goods legally manufactured
under a set of legal norms that dldnotlndudeany requirements for total lead
levels. As such, they should not have to endure the adverse consequences
that
a retroactive interpretation of the lead requirements engenders, absent clear
evidence that Congress intended to do so.
This ex>mment does not begin to address the 1$ue of whether there is sufficient quallfied
capacity In testing laboratories to perfom, such tests nor does It address the practical Issues of and
limitations on in-house testing.
•
2
Many distributors/manufacturers and retailers maintain inventories ex>ntaining more than
25,000 different products. Even the loglstlcs of sampling £Nery Item In Inventory and transporting the
samples to testing laboratories would aush most operating mmpanles, particularly In a short period of
time during the Christmas season
s the practical Issues of and
limitations on in-house testing.
•
2
Many distributors/manufacturers and retailers maintain inventories ex>ntaining more than
25,000 different products. Even the loglstlcs of sampling £Nery Item In Inventory and transporting the
samples to testing laboratories would aush most operating mmpanles, particularly In a short period of
time during the Christmas season. Complicating matters, testing one item out of several In Inventory in,
for example, a distribution business may still not provide the necessary assurance that all similar items
comply since the various items may be from different lots received at different times.
Cheryl L. Falvey, Esquire
November 4, 2008
Page 3
testing -- an expensive and time consuming process. 1 Given the vast Inventory
throughout the U.S. economy affected by the retroactive application of the law,
the costs and logistics of testing will be staggering, even if such testing could be
performed as a practical matter within the next 100 days. Given these real
practical limitations, manufacturers, distributors and retailers will have to make a
choice in February 2009 if retroactive application of total lead rules prevails: sell
inventory at risk of violating the Federal Hazardous Substances Act (FHSA) or
abandon their existing inventory at enormous, possibly fatal expense.
Various Brown and Gidding clients have offered their own estimates of the
economic and practical costs if the new total lead limits apply retroactively to
inventory. One large retailer, who has thousands of stores, estimates that the
value of the affected inventory could be as high as $500,000,000. Another client
estimates that it might have inventory at risk in excess of its financial capital,
potentially causing a default under its loan agreements or rendering Its
operations unfinanceable
ts if the new total lead limits apply retroactively to
inventory. One large retailer, who has thousands of stores, estimates that the
value of the affected inventory could be as high as $500,000,000. Another client
estimates that it might have inventory at risk in excess of its financial capital,
potentially causing a default under its loan agreements or rendering Its
operations unfinanceable. The impact of applying the lead requirements
retroactively will present these and other clients with the Draconian options of
Incurring huge expenses for what appears to be little gain In public safety or
risking the Imposition of fines and penaltles.
Branding previously legal items as contraband and saddling consumer
product businesses with these new and expensive tasks unquestionably violates
"elementary considerations of fairness [which] dictate that individuals should
have an opportunity to know what the law is and conform their conduct
accordingly; settled expectations should not be lightly disrupted." Landgraf. 511
U.S. at 265. Businesses with existing inventory affected by the ban that goes
into effect on February 10, 2009 legally purchased goods legally manufactured
under a set of legal norms that did not include any requirements for total lead
levels. As such, they should not have to endure the adverse consequences that
a retroactive interpretation of the lead requirements engenders, absent clear
evidence that Congress intended to do so.
This comment does not begin to address the Issue of whether there is sufficient qualified
capacity In testing laboratories to perform such tests nor does It address the practical Issues of and
limitations on in-house testing.
2
Many distributors/manufacturers and retailers maintain inventories containing more than
25,000 different products. Even the logistics of sampling every Item in Inventory and transporting the
samples to testing laboratories would crush most operating companies, particularly in a short period of
time during the Christmas season
ess the practical Issues of and
limitations on in-house testing.
2
Many distributors/manufacturers and retailers maintain inventories containing more than
25,000 different products. Even the logistics of sampling every Item in Inventory and transporting the
samples to testing laboratories would crush most operating companies, particularly in a short period of
time during the Christmas season. Complicating matters, testing one item out of several In Inventory in,
for example, a distribution business may still not provide the necessary assurance that all similar items
comply since the various items may be from different lots received at different times.
Cheryl L. Falvey, Esquire
November 4, 2008
Page4
If Congress had intended the far-reaching consequences that result from
retroactive application of the lead limits, one would expect to see in the
legislation itself, or In the CPSIA's legislative history, some evidence that
Congress specifically considered and deemed necessary the economic burden
that might result from retroactive application of the new lead limits or considered
the threat to public health from lead in product inventories to be so severe that
retroactive application of the lead limits was necessary. The CPSIA itself
contains no express unambiguous Congressional
statement concerning
retroactivity, nor does the legislative history contain ~
indication that Congress
Intended the lead limits to apply retroactively, as Landgraf
requlres.3 511 U.S. at
272-73 (''Requiring clear Intent assures that Congress itself has affirmatively
considered the potential unfairness of retroactive application and determined
that It is an acceptable price to pay for the countervailing benefits'').
The little additional legislative commentary that exists on the lead
provisions supports a conclusion that Congress Intended those provisions to be
prospective
at
272-73 (''Requiring clear Intent assures that Congress itself has affirmatively
considered the potential unfairness of retroactive application and determined
that It is an acceptable price to pay for the countervailing benefits'').
The little additional legislative commentary that exists on the lead
provisions supports a conclusion that Congress Intended those provisions to be
prospective. The OGC Lead Inventory Opinion cites the following remarks of
Senator Hutchinson: the new legislation established "the most comprehensive
lead safety standards that we have seen to date for toys and the paint
. manufacturers use on toys" through "standards [that] are implemented
responsibly to give manufacturers time to adapt, without compromising safety."
OGC Lead Inventory Opinion at 4. Applying the lead standards retroactively so
that products already legally produced arbitrarily become Illegal as of February
10, 2009 hardly comports with this stated intent. To the contrary, if the
Congressional
intent was to allow time for manufacturers to adapt to the new
rules, it follows that existing inventory should not be subject to an outright ban.
3
To the extent that the legislative history addresses retroactlvity at all, it supports prospective
application of the new lead limits, as the language used Is forward looking. In discussing section 101
In general, as far as detennlnlng what lead level Is technologically feasible, It states:
'The Conference Report ultimately requires
that the Commission lower the
permissible lead level In children's products to the lowest amount that is
technologically feaslble. This section provides a definition of technologically feasible,
and includes a provision that Identifying alternative practices, best practices, or other
. operational changes that would allow a manufacturer to amply with the lead llmlt
Report ultimately requires
that the Commission lower the
permissible lead level In children's products to the lowest amount that is
technologically feaslble. This section provides a definition of technologically feasible,
and includes a provision that Identifying alternative practices, best practices, or other
. operational changes that would allow a manufacturer to amply with the lead llmlt.
The intent of this alternative and best practices provision is tQ require manufactuff!f'S
tQ use bettetmet/Jods
Qfprodudng a product that@a
be achieved
without
the need
formq/or techno/QgkB/a1va11£BS',
such as taking steps lQ better clean equipment or
the factory, or tQ make changes
in operation, malntena@ or other oract1ces
that
can redua: orellmlnate
leadtn theproduct(emphasis
added)." H.R. C.onf. Rep. No.
110-787, p. 66, 110th Congress, 2nd Sess. (2008).
the factory, or tQ make changes
in operation, malntena@ or other oract1ces
that
can redua: orellmlnate
leadtn theproduct(emphasis
added)." H.R. C.onf. Rep. No
Cheryl L. Falvey, Esquire
November 4, 2008
Page4
If Congress had intended the far-reaching consequences that result from
retroactive application of the lead limits, one would expect to see in the
legislation itself, or in the CPSIA's legislative history, some evidence that
Congress specifically considered and deemed necessary the economic burden
that might result from retroactive application of the new lead limits or considered
the threat to public health from lead in product inventories to be so severe that
retroactive application of the lead limits was necessary. The CPSIA itself
contains no express unambiguous Congressional statement concerning
retroactivity, nor does the legislative history contain any indication that Congress
intended the lead limits to apply retroactively, as Landgraf requires• 511 U.S
sidered
the threat to public health from lead in product inventories to be so severe that
retroactive application of the lead limits was necessary. The CPSIA itself
contains no express unambiguous Congressional statement concerning
retroactivity, nor does the legislative history contain any indication that Congress
intended the lead limits to apply retroactively, as Landgraf requires• 511 U.S. at
272-73 ("Requiring clear Intent assures that Congress itself has affirmatively
considered the potential unfairness of retroactive application and determined
that It is an acceptable price to pay for the countervailing benefits'').
The little additional legislative commentary that exists on the lead
provisions supports a conclusion that Congress Intended those provisions to be
prospective. The OGC Lead Inventory Opinion cites the following remarks of
Senator Hutchinson: the new legislation established "the most comprehensive
lead safety standards that we have seen to date for toys and the paint
manufacturers use on toys" through "standards [that] are implemented
responsibly to give manufacturers time to adapt, without compromising safety."
OGC Lead Inventory Opinion at 4. Applying the lead standards retroactively so
that products already legally produced arbitrarily become Illegal as of February
10, 2009 hardly comports with this stated intent. To the contrary, if the
Congressional intent was to allow time for manufacturers to adapt to the new
rules, it follows that existing inventory should not be subject to an outright ban.
3
To the extent that the legislative history addresses retroact at all, it supports prospective
application of the new lead limits, as the language used is forwardlooking. In discussing Section 101
In general, as far as determining what lead level Is technologically feasible, It states:
'The Conference Report ultimately requires that the Commission lower the
permissible lead level In children's products to the lowest amount that is
technologically feaslble
t all, it supports prospective
application of the new lead limits, as the language used is forwardlooking. In discussing Section 101
In general, as far as determining what lead level Is technologically feasible, It states:
'The Conference Report ultimately requires that the Commission lower the
permissible lead level In children's products to the lowest amount that is
technologically feaslble. This section provides a definition of technologically feasible,
and includes a provision that Identifying alternative practices, best practices, or other
operational changes that would allow a manufacturer to amply with the lead llmlt.
The intent of this alternative and best practices provision is orequiremanufact
tousebettermethodsof
produanaaproductthatanbeachievedwithouttheneed
formalortechnoloadvancessua'hastakingstepstobettercleanequipmen
or
the factory, or to make changes in operatio maintenance, or other practice that
canreduazoreliminateeadIntheproduct(emphasis added)." H.R. Conf. Rep. No.
110-787, p. 66, 110 Congress, 2 Sess. (2008).
Cheryl L. Falvey, Esquire
November 4, 2008
PageS
While the leglslatlve history provides no specific support for a retroactive
interpretation of the new lead limits, we nonetheless recognize that reviewing
the plain language of the CPSIA should be the first step In determining whether
the lead requirements apply retroactively. As the next sections of this letter
show, however, the CPSIA's language, when taken in conjunction with that of
the Federal Hazardous Substances Act, provides little guidance on that topic.
II.
Considered as a Whole, the CPSIA Does Not Support the
Conclusion that the New Total Lead Limits Should be Applied
Retroactively to Inventory
The CPSIA -- Much of the OGC opinion discusses the requirements of the
Federal Hazardous Substances Act as they relate to the retroactive application of
the new lead requirements
ral Hazardous Substances Act, provides little guidance on that topic.
II.
Considered as a Whole, the CPSIA Does Not Support the
Conclusion that the New Total Lead Limits Should be Applied
Retroactively to Inventory
The CPSIA -- Much of the OGC opinion discusses the requirements of the
Federal Hazardous Substances Act as they relate to the retroactive application of
the new lead requirements. However, to the extent that the CPSIA itself
contains provisions relevant to the issue of whether the new lead limits should
apply retroactively, the legislation at best is ambiguous in providing an answer.
As the OGC Lead Inventory Opinion correctly-notes, in general, one can assume
that Congress acted deliberately and intentionally in fashioning the CPSIA. Yet
the provisions of the CPSIA itself cut both ways on the issue of the retroactive
application of the total lead limits. In ~ur judgment, such conflicting evidence by its
nature cannot be sufficient to overcome the strong presumption against
retroactivity of new requirements, especially when the new requirements will
have the far-reaching and severe economic consequences
outlined In the first
part of this letter. Stated another way, "Congress ... does not alter the
fundamental details of a regulatory scheme In vague terms or ancillary
provisions-It does not ... hide elephants in mouse holes." Whitman
v.
American Trucking Ass'ns, Inc., 531 U.S. 457, 4.68 (2001).
In partial support of retroactive application of the lead limits, the OGC
Lead Inventory Opinion at 2, cites to the fact that Section 102(a)(3)(A) of the
CPSIA expressly provides for the prospective application of third-party
certification requirements to children's products -manufactured after the various
effective dates for certifying such products. Thus, according to the opinion,
Congress clearly knew how to make something prospective in its application if It
so desired, but did not do so with respect to lead
hat Section 102(a)(3)(A) of the
CPSIA expressly provides for the prospective application of third-party
certification requirements to children's products -manufactured after the various
effective dates for certifying such products. Thus, according to the opinion,
Congress clearly knew how to make something prospective in its application if It
so desired, but did not do so with respect to lead. However, taken literally, this
interpretation would also require all such products in inventory as of November
12, 2008, that are subject to existing Commission standards, to be self-certified
because Section 102(a)(1) of the Act does not contain an express reference to
certifying those products based on their manufacturing date. Yet the
Cheryl L. Falvey, Esquire
November 4, 2008
Page 5
While the leglslatlve history provides no specific support for a retroactive
interpretation of the new lead limits, we nonetheless recognize that reviewing
the plain language of the CPSIA should be the first step in determining whether
the lead requirements apply retroactively. As the next sections of this letter
show, however, the CPSIA's language, when taken in conjunction with that of
the Federal Hazardous Substances Act, provides little guidance on that topic.
II.
Considered as a Whole, the CPSIA Does Not Support the
Conclusion that the New Total Lead Limits Should be Applied
Retroactively to Inventory
The CPSIA Much of the OGC opinion discusses the requirements of the
Federal Hazardous Substances Act as they relate to the retroactive application of
the new lead requirements. However, to the extent that the CPSIA itself
contains provisions relevant to the issue of whether the new lead limits should
apply retroactively, the legislation at best is ambiguous in providing an answer.
As the OGC Lead Inventory Opinion correctly-notes, in general, one can assume
that Congress acted deliberately and intentionally in fashioning the CPSIA
ation of
the new lead requirements. However, to the extent that the CPSIA itself
contains provisions relevant to the issue of whether the new lead limits should
apply retroactively, the legislation at best is ambiguous in providing an answer.
As the OGC Lead Inventory Opinion correctly-notes, in general, one can assume
that Congress acted deliberately and intentionally in fashioning the CPSIA. Yet
the provisions of the CPSIA itself cut both ways on the issue of the retroactive
application of the total lead limits. In our judgment, such conflicting evidence by its
nature cannot be sufficient to overcome the strong presumption against
retroactivity of new requirements, especially when the new requirements will
have the far-reaching and severe economic consequences outlined In the first
part of this letter. Stated another way, "Congress ... does not alter the
fundamental details of a regulatory scheme In vague terms or ancillary
provisions-It does not ... hide elephants in mouse holes." Whitman v.
American Trucking Ass'ns, Inc., 531 U.S. 457, 468 (2001).
In partial support of retroactive application of the lead limits, the OGC
Lead Inventory Opinion at 2, cites to the fact that Section 102(a)(3)(A) of the
CPSIA expressly provides for the prospective application of third-party
certification requirements to children's products manufactured after the various
effective dates for certifying such products. Thus, according to the opinion,
Congress clearly knew how to make something prospective in its application if It
so desired, but did not do so with respect to lead. However, taken literally, this
interpretation would also require all such products in inventory as of November
12, 2008, that are subject to existing Commission standards, to be self-certified
because Section 102(a)(1) of the Act does not contain an express reference to
certifying those products based on their manufacturing date. Yet the
It
so desired, but did not do so with respect to lead. However, taken literally, this
interpretation would also require all such products in inventory as of November
12, 2008, that are subject to existing Commission standards, to be self-certified
because Section 102(a)(1) of the Act does not contain an express reference to
certifying those products based on their manufacturing date. Yet the
O,eryl L. Falvey, Esquire
November
4, 2008
Page6
Commission staff has, of course, taken the position that self-certification only
applies to products manufactured after November 12.
On the other hand, the ·OGc Lead Opinion at 3 and n.4 also notes that
some of the new CPSIA standards on cribs expressly apply retroactively.
Based
on this, one can argue that Congress clearly knew how to make something
retroactive In Its application as well and would have done ·so If It wanted the lead
requirements to be retroactive. It did not, of course, do so, thus supporting the
proposition that the requirements apply prospectively. In our judgment, these
contradictory signs within the CPSIA itself point to the same conclusion: CPSC
should not Interpret the law as Imposing the new lead limits retroactively in the
face of Congressional
silence, as such silence cannot always be construed as
purposeful. Instead, silence may simply be the result of the failure to consider
an Issue, compromise, or an agreement to disagree. Indeed, the case that the
OGC Lead Inventory Opinion cites for the presumption against retroactivity --
Landgraf-stands for this proposition as well. 511 U.S. at 261-262.
In addition, a basic rule of statutory construction Is that enacted
legislation should be construed "so as to avoid rendering superfluous" any
specific provisions or language contained in that legislation. See e.g., Astoria
Federal
savings
& Loan Ass'o v, Soliroi □o, so1 u.s. 104, 112 {1991)
esumption against retroactivity --
Landgraf-stands for this proposition as well. 511 U.S. at 261-262.
In addition, a basic rule of statutory construction Is that enacted
legislation should be construed "so as to avoid rendering superfluous" any
specific provisions or language contained in that legislation. See e.g., Astoria
Federal
savings
& Loan Ass'o v, Soliroi □o, so1 u.s. 104, 112 {1991). Yet the
"plain language" reading of the new lead limits in the OGC Lead Inventory
Opinion will engender exactly such a result for much of CPSIA § 101(a)(2). The
obvious intent of CPSIA §§ 101(a){2)(B) and (C), relating to progressively
lowering the permissible level of lead in.children's products, is to phase in
Increasingly stringent total lead limits on a rolling basis -- six months, one year,
and three years after enactment of the CPSIA. However, the OGC Lead
Inventory Opinion takes the position that the same plain language reading of the
600 ppm lead llmlt that makes that limit apply retroactively to inventory as of
February 10, 2009 also makes the 300 ppm limit applicable to inventories of
children's products as of August 14, 2009, and the 100 ppm lead limit, "if it is
deemed technologically feasible," applicable to such inventory as of August 14,
2011. OGC Lead Inventory Opinion at 4 and n.5.
The retroactive application of the progressively more stringent lead limits
to inventory means, for example, that a manufacturer who produces or a retailer
who stocks products that meet the new 600 ppm lead limit after February 12,
2009, will have to destroy or take back any items that exceed 300 ppm lead six
months later -- or risk the imposition of legal sanctions and penalties. In
practical terms, then this reading makes the 100 ppm lead limit applicable now,
since, if only to protect themselves, manufacturers and retailers will require
Federal
savings
& Loan Ass'o v, Soliroi □o, so1 u.s. 104, 112 {1991). Yet
Cheryl L
09, will have to destroy or take back any items that exceed 300 ppm lead six
months later -- or risk the imposition of legal sanctions and penalties. In
practical terms, then this reading makes the 100 ppm lead limit applicable now,
since, if only to protect themselves, manufacturers and retailers will require
Federal
savings
& Loan Ass'o v, Soliroi □o, so1 u.s. 104, 112 {1991). Yet
Cheryl L. Falvey, Esquire
November 4, 2008
Page6
Commission staff has, of course, taken the position that self-certification only
applies to products manufactured after November 12.
On the other hand, the OGC Lead Opinion at 3 and .4 also notes that
some of the new CPSIA standards on cribs expressly apply retroactively. Based
on this, one can argue that Congress clearly knew how to make something
retroactive In Its application as well and would have done so if It wanted the lead
requirements to be retroactive. It did not, of course, do so, thus supporting the
proposition that the requirements apply prospectively. In our judgment, these
contradictory signs within the CPSIA itself point to the same conclusion: CPSC
should not Interpret the law as Imposing the new lead limits retroactively in the
face of Congressional silence, as such silence cannot always be construed as
purposeful. Instead, silence may simply be the result of the failure to consider
an Issue, compromise, or an agreement to disagree. Indeed, the case that the
OGC Lead Inventory Opinion cites for the presumption against retroactivity
Landgraf - stands for this proposition as well. 511 U.S. at 261-262.
In addition, a basic rule of statutory construction Is that enacted
legislation should be construed "so as to avoid rendering superfluous" any
specific provisions or language contained in that legislation. See e.g., Astoria
Federal Savings& Loan Ass'n v. Solimino, 501 U.S. 104, 112 (1991). Yet the
"plain language" reading of the new lead limits in the OGC Lead Inventory
Opinion will engender exactly such a result for much of CPSIA § 101(a)(2)
Is that enacted
legislation should be construed "so as to avoid rendering superfluous" any
specific provisions or language contained in that legislation. See e.g., Astoria
Federal Savings& Loan Ass'n v. Solimino, 501 U.S. 104, 112 (1991). Yet the
"plain language" reading of the new lead limits in the OGC Lead Inventory
Opinion will engender exactly such a result for much of CPSIA § 101(a)(2). The
obvious intent of CPSIA §§ 101(a)(2)(B) and (C), relating to progressively
lowering the permissible level of lead in children's products, is to phase in
Increasingly stringent total lead limits on a rolling basis -- six months, one year,
and three years after enactment of the CPSIA. However, the OGC Lead
Inventory Opinion takes the position that the same plain language reading of the
600 ppm lead llmlt that makes that limit apply retroactively to inventory as of
February 10, 2009 also makes the 300 ppm limit applicable to inventories of
children's products as of August 14, 2009, and the 100 ppm lead limit, "if it is
deemed technologically feasible," applicable to such inventory as of August 14,
2011. OGCLead Inventory Opinion at 4 and .5.
The retroactive application of the progressively more stringent lead limits
to inventory means, for example, that a manufacturer who produces or a retailer
who stocks products that meet the new 600 ppm lead limit after February 12,
2009, will have to destroy or take back any items that exceed 300 ppm lead six
months later -- or risk the imposition of legal sanctions and penalties. In
practical terms, then this reading makes the 100 ppm lead limit applicable now,
since, if only to protect themselves, manufacturers and retailers will require
iler
who stocks products that meet the new 600 ppm lead limit after February 12,
2009, will have to destroy or take back any items that exceed 300 ppm lead six
months later -- or risk the imposition of legal sanctions and penalties. In
practical terms, then this reading makes the 100 ppm lead limit applicable now,
since, if only to protect themselves, manufacturers and retailers will require
Oleryl L. Falvey, Esquire
November
4, 2008
Page7
products to meet the 100 ppm immedlately.
4 In sum, Interpreting the lead
limits as being retroactive produces an illogical result that makes the phased-in
scheme that Congress specifically enacted essentially obsolete. One would
expect that, If Congress intended such an anomalous effect, it would have
expressly indicated so in the legislation or at least explained in the legislation or
.legislative history how it expected firms to meet their obligations under the
phased-in approach. It did not do so, supporting the conclusion that Section 101
of the CPSIA should apply prospectively.
The same analysis applies to the phased-in limit of 90 ppm on lead in
paint, which the OGC Lead Inventory Opinion also posits is retroactive. The
original 600 ppm lead standard was prospective when it was enacted in the late
1970s, and Congress has specifically required in the CPSIA that children's
products manufactured after November 12, 2008 be certified as meeting that
standard. Interpreting the law retroactively, however, essentially means that the
certifications will be worthless nine months after they are required unless the
products certified as meeting the 600-ppm standard also meet the 90 ppm.
standard. Nothing In the law suggests that Congress intended this result. 5
The federal Hazardous Substances Act - The OGC Lead Inventory
Opinion on retroactivlty relies heavily qn the decision of Congress to designate the
total lead and lead-in-paint limits as regulations issued under Section 2( q) of the
FHSA
less the
products certified as meeting the 600-ppm standard also meet the 90 ppm.
standard. Nothing In the law suggests that Congress intended this result. 5
The federal Hazardous Substances Act - The OGC Lead Inventory
Opinion on retroactivlty relies heavily qn the decision of Congress to designate the
total lead and lead-in-paint limits as regulations issued under Section 2( q) of the
FHSA.
6 In that vein, the OGC Lead Inventory Opinion cites the failure of the FHSA to
Include an express provision that makes such rules prospective in application as one
of the factors supporting a retroactive interpretation.
4
To do otherwise would be to keep the viOlatlve Inventory sword Indefinitely suspended over
the entity's head.
5
The provisions of Section 108 of the CPSIA relating to the ban on phthalates aeate a similar,
but even more perplexing issue of Interpretation. On the one hand, they prohibit offering for sale
banned phthalates after February 10, 2009. On the other, the provisions are expressly characterized In
the law as consumer product safety standards which, by the terms of section 9(g)(2) of the CPSA, can
only apply to products manufactured after that date. Given this oontradiction, Landgraf
would appear
to require that the phthalate requirements be prospective.
6
CPSIA § l0l{a) reads: " ... any children's product ... that contains more than the llrnlt
established by paragraph (2) shaN be tma(Edas a banned hazatrious substana: under the Federal
HazatrJousSµllstana5Ad(l5 u.s.c.
1261et seq.) (emphasis added). CPSIA § l0l(g) states "Any ban
Imposed by subsection (a) ... shall be considered a regulation of the Commission promulgated under
or for the enforcement
of section
2(q) otthe federa(Hazardous
SubstQncesAct,(15
us.c
126/fq}
(emphasis added).
The federal Hazardous Substances Act - The OGC
Cheryl L
substana: under the Federal
HazatrJousSµllstana5Ad(l5 u.s.c.
1261et seq.) (emphasis added). CPSIA § l0l(g) states "Any ban
Imposed by subsection (a) ... shall be considered a regulation of the Commission promulgated under
or for the enforcement
of section
2(q) otthe federa(Hazardous
SubstQncesAct,(15
us.c
126/fq}
(emphasis added).
The federal Hazardous Substances Act - The OGC
Cheryl L. Falvey, Esquire
November 4, 2008
Page7
products to meet the 100 ppm immediately,* In sum, Interpreting the lead
limits as being retroactive produces an illogical result that makes the phased-in
scheme that Congress specifically enacted essentially obsolete. One would
expect that, If Congress intended such an anomalous effect, it would have
expressly indicated so in the legislation or at least explained in the legislation or
legislative history how it expected firms to meet their obligations under the
phased-in approach. It did not do so, supporting the conclusion that Section 101
of the CPSIA should apply prospectively.
The same analysis applies to the phased-in limit of 90 ppm on lead in
paint, which the OGC Lead Inventory Opinion also posits is retroactive. The
original 600 ppm lead standard was prospective when it was enacted in the late
1970s, and Congress has specifically required in the CPSIA that children's
products manufactured after November 12, 2008 be certified as meeting that
standard. Interpreting the law retroactively, however, essentially means that the
certifications will be worthless nine months after they are required unless the
products certified as meeting the 600 ppm standard also meet the 90 ppm.
standard
1970s, and Congress has specifically required in the CPSIA that children's
products manufactured after November 12, 2008 be certified as meeting that
standard. Interpreting the law retroactively, however, essentially means that the
certifications will be worthless nine months after they are required unless the
products certified as meeting the 600 ppm standard also meet the 90 ppm.
standard. Nothing In the law suggests that Congress intended this result.5
TheFederalHazardousSubstancesAct- The OGC Lead Inventory
Opinion on retroactivlty relies heavily on the decision of Congress to designate the
total lead and lead-in-paint limits as regulations issued under Section 2(q) of the
FHSA.6 In that vein, the OGC Lead Inventory Opinion cites the failure of the FHSA to
Include an express provision that makes such rules prospective in application as one
of the factors supporting a retroactive interpretation.
4
To do otherwise would be to keep the violative inventory sword Indefinitely suspended over
the entity's head.
s
The provisions of Section 108 of the CPSIA relating to the ban on phthalates create a similar,
but even more perplexing issue of Interpretation. On the one hand, they prohibit offering for sale
banned phthalates after February 10, 2009. On the other, the provisions are expressly characterized In
the law as consumer product safety standards which, by the terms of section 9(g)(2) of the CPSA, can
only apply to products manufactured after that date. Given this contradiction, Landgraf would appear
to require that the phthalate requirements be prospecti.
Į
CPSIA § 101(a) reads: "...any children's product ... that contains more than the llrnlt
established by paragraph (2) shall be treated as a banned hazardou substanc under the Federal
HazardouSubstano
Act(15 U.S.C. 1261et seq.) (emphasis added). CPSIA § 101(g) states "Any ban
Imposed by subsection (a) ..
adiction, Landgraf would appear
to require that the phthalate requirements be prospecti.
Į
CPSIA § 101(a) reads: "...any children's product ... that contains more than the llrnlt
established by paragraph (2) shall be treated as a banned hazardou substanc under the Federal
HazardouSubstano
Act(15 U.S.C. 1261et seq.) (emphasis added). CPSIA § 101(g) states "Any ban
Imposed by subsection (a) ... shall be considered a regulation of the Commission promulgated under
or fortheenforcementofsection2(a)of
theFederalHazardouSubstanoAct
(15US,C.1261/a)
(emphasis added).
Cheryl L. Falvey, Esquire
November 4, 2008
Page8
As a general principle _of statutory construction, however, in a
Congressional
enactment that contains both specific and general language
relevant to the same subject matter, the specific parts of the legislation control
over the general [parts]. ~-
e.g. Fourco
Glass
Co, Y, Transmjrra
Products
Co.a2-,
353 U.S. 222, 228 (1957). While the OGC Lead Inventory Opinion at p. 1
correctly identifies the FHSA as the statute under which the lead limits were
promulgated as Section 2( q) rules, it does not address the provisions of the
FHSA under which Section 2(q) bans are enforced. Instead, It skips to the
general language of the Consumer Product Safety Act's (CPSA) Section 19
"prohibited acts" sectlon7 which also provides for the enforcement of such bans
as partial evidence of Congress' alleged intent to apply the new lead limits
retroactively.
Rather than looking to Section 19 of the CPSA In Isolation, the OGC Lead
Inventory Opinion should have first examined the FHSA's "prohibited acts"
section, as it is the relevant enforcement mechanism for the specific statute
Congress Identified. Under FHSA Sections 4(a) and (c), 15 u.s.c.
§§ 1263(a),
(c), the following relevant acts and the causing thereof are prohibited:
(a)
The Introduction or delivery for introduction into interstate
commerce of any ... b_anned
hazardous substance.
have first examined the FHSA's "prohibited acts"
section, as it is the relevant enforcement mechanism for the specific statute
Congress Identified. Under FHSA Sections 4(a) and (c), 15 u.s.c.
§§ 1263(a),
(c), the following relevant acts and the causing thereof are prohibited:
(a)
The Introduction or delivery for introduction into interstate
commerce of any ... b_anned
hazardous substance.
(c)
The receipt in interstate commerce of any ... banned hazardous
substance and the delivery or proffered delivery thereof for pay or
otherwise."
Taking section 4(c) first, under the new law, any entity that receives a
children's product with lead in excess of 600 ppm in interstate commerce before
February 10, 2009 has received a legal product. Even though, on or after
February 10, that product may be technically defined as a banned hazardous
substance, offering the product for sale does not violate section 4(c) of the FHSA
because the product must be contraband at the time of receipt in interstate
commerce for any subsequent sale or offer for sale to be a prohibited act. In
addition, the downstream entity holding the now violative product for sale did
not violate section 4(a) of the FHSA because it was not the entity that
"introduced [the now violative product] Into Interstate commerce." With respect
to section 4(a), a plausible argument also exists that, if the product was initially
7
Section 19 ls basic.ally
a general catI:h~all
provision that covers a.!I
other rules and standards
issued pursuant to the statutes the Commission
administers.
Cheryl L. Falvey, Esquire
November 4, 2008
Page8
As a general principle of statutory construction, however, in a
Congressional enactment that contains both specific and general language
relevant to the same subject matter, the specific parts of the legislation control
over the general [parts]. See, e.g. FourcoGlass Co. v. Transmirra Products
Corp., 353 U.S. 222, 228 (1957). While the OGC Lead Inventory Opinion at p
November 4, 2008
Page8
As a general principle of statutory construction, however, in a
Congressional enactment that contains both specific and general language
relevant to the same subject matter, the specific parts of the legislation control
over the general [parts]. See, e.g. FourcoGlass Co. v. Transmirra Products
Corp., 353 U.S. 222, 228 (1957). While the OGC Lead Inventory Opinion at p. 1
correctly identifies the FHSA as the statute under which the lead limits were
promulgated as Section 2(q) rules, it does not address the provisions of the
FHSA under which Section 2(q) bans are enforced. Instead, It skips to the
general language of the Consumer Product Safety Act's (CPSA) Section 19
"prohibited acts" section' which also provides for the enforcement of such bans
as partial evidence of Congress' alleged intent to apply the new lead limits
retroactively.
Rather than looking to Section 19 of the CPSA In Isolation, the OGC Lead
Inventory Opinion should have first examined the FHSA's "prohibited acts"
section, as it is the relevant enforcement mechanism for the specific statute
Congress Identified. Under FHSA Sections 4(a) and (c), 15 u.s.c. §§ 1263(a),
(c), the following relevant acts and the causing thereof are prohibited:
(a)
The Introduction or delivery for introduction into interstate
commerce of any · . . banned hazardous substance.
(c)
The receipt in interstate commerce of any . .. banned hazardous
substance and the delivery or proffered delivery thereof for pay or
otherwise."
Taking section 4(c) first, under the new law, any entity that receives a
children's product with lead in excess of 600 ppm in interstate commerce before
February 10, 2009 has received a legal product
erce of any · . . banned hazardous substance.
(c)
The receipt in interstate commerce of any . .. banned hazardous
substance and the delivery or proffered delivery thereof for pay or
otherwise."
Taking section 4(c) first, under the new law, any entity that receives a
children's product with lead in excess of 600 ppm in interstate commerce before
February 10, 2009 has received a legal product. Even though, on or after
February 10, that product may be technically defined as a banned hazardous
substance, offering the product for sale does not violate section 4(c) of the FHSA
because the product must be contraband at the time of receipt in interstate
commerce for any subsequent sale or offer for sale to be a prohibited act. In
addition, the downstream entity holding the now violative product for sale did
not violate section 4(a) of the FHSA because it was not the entity that
"introduced [the now violative product] Into Interstate commerce." With respect
to section 4(a), a plausible argument also exists that, if the product was initially
P
Section 19 is basically a general catch-all provision that covers al! other rules and standards
issued pursuant to the statutes the Commission administers.
Cheryl L. Falvey, Esquire
November 4, 2008
Page9
introduced into commerce before February 10, 2009, section 4(a) has not been
violated even though the product continues to move towards the ultimate seller.8
The OGC Lead Inventory Opinion does not address the statutory
enforcement scheme under the FHSA that expressly applies to the requirements
for children's products containing lead by virtue of their status as section 2(q)
rules. Yet, since the products are speclflcally regulated under the FHSA,
consideration of the provisions of the enforcement scheme of the FHSA is
elementary to deciding if Congress intended to apply the lead limits retroactively,
.with potential civil and criminal sanctions attaching to further distribution of
previously legal products
ontaining lead by virtue of their status as section 2(q)
rules. Yet, since the products are speclflcally regulated under the FHSA,
consideration of the provisions of the enforcement scheme of the FHSA is
elementary to deciding if Congress intended to apply the lead limits retroactively,
.with potential civil and criminal sanctions attaching to further distribution of
previously legal products. As the review above shows, those provisions do not·
support an interpretation of retroactively. Moreover, should one argue that
amending section 19 of the CPSA to make it a prohibited act to sell a banned
hazardous substance overrides the existing enforcement provisions of the FHSA,
that argument would essentially "read Into" the CPSIA an Implied repeal of FHSA
Sections 4(a) and (c), as they apply to the legal possession and further
distribution of Inventory that falls to meet the new total lead limits. As the
Supreme Court has said, a strong presumption exists against interpreting a new
statute in such a way that It changes or repeals an existing statute, absent clear
Congressional
language to that effect. ~
~Astoria
Federal Savings, 501
U.S. at 109. Yet this contradictory result is precisely what relying on the section
19 prohibited acts section of the CPSA In analyzing retroactlvlty would
accomplish.
The apparent conflict between the prohibited act sections of the FHSA and
CPSA, in our opinion, raises a substantial question as to whether Congress has
spoken unambiguously that the new lead requirements are retroactive. Because
of that conflict, we believe that the lead provisions of the CPSIA must apply
prospectively
ed acts section of the CPSA In analyzing retroactlvlty would
accomplish.
The apparent conflict between the prohibited act sections of the FHSA and
CPSA, in our opinion, raises a substantial question as to whether Congress has
spoken unambiguously that the new lead requirements are retroactive. Because
of that conflict, we believe that the lead provisions of the CPSIA must apply
prospectively.
Practice
under the FHSA
- With respect to the FHSA, in part
the argum~nt for retroactivity In the OGC Lead Inventory Opinion rests on the
distinction that Section 9(g) of the CPSA contains a specific requirement that
CPSA standards must be prospective and the FHSA does not contain such a
8
A harder question relates to whether products that have been manufactured before February
10, 2009, but have not yet been dlsbibuted are subject to the total lead limits. If, however, the
c:ommlsslon
agrees that the lead requirements
do not retroactively apply to products that have already
been Introduced Into Interstate commerce, applying them to products that have been manufactured
before February 10 but not yet shipped would appear to be an arbitrary distinction with little basis In
the law.
Practice
under the FHSA
- With
Cheryl L. Falvey, Esquire
November 4, 2008
Page9
introduced into commerce before February 10, 2009, section 4(a) has not been
violated even though the product continues to move towards the ultimate seller.8
The OGC Lead Inventory Opinion does not address the statutory
enforcement scheme under the FHSA that expressly applies to the requirements
for children's products containing lead by virtue of their status as section 2(q)
rules. Yet, since the products are specifically regulated under the FHSA,
consideration of the provisions of the enforcement scheme of the FHSA is
elementary to deciding if Congress intended to apply the lead limits retroactively,
with potential civil and criminal sanctions attaching to further distribution of
previously legal products
containing lead by virtue of their status as section 2(q)
rules. Yet, since the products are specifically regulated under the FHSA,
consideration of the provisions of the enforcement scheme of the FHSA is
elementary to deciding if Congress intended to apply the lead limits retroactively,
with potential civil and criminal sanctions attaching to further distribution of
previously legal products. As the review above shows, those provisions do not
support an interpretation of retroactively. Moreover, should one argue that
amending section 19 of the CPSA to make it a prohibited act to sell a banned
hazardous substance overrides the existing enforcement provisions of the FHSA,
that argument would essentially "read Into" the CPSIA an Implied repeal of FHSA
Sections 4(a) and (c), as they apply to the legal possession and further
distribution of Inventory that falls to meet the new total lead limits. As the
Supreme Court has said, a strong presumption exists against interpreting a new
statute in such a way that It changes or repeals an existing statute, absent clear
Congressional language to that effect. ,See, g.,Astoria Federal Savings, 501
U.S. at 109. Yet this contradictory result is precisely what relying on the section
19 prohibited acts section of the CPSA In analyzing retroactivity would
accomplish.
The apparent conflict between the prohibited act sections of the FHSA and
CPSA, in our opinion, raises a substantial question as to whether Congress has
spoken unambiguously that the new lead requirements are retroactive. Because
of that conflict, we believe that the lead provisions of the CPSIA must apply
prospectively
ed acts section of the CPSA In analyzing retroactivity would
accomplish.
The apparent conflict between the prohibited act sections of the FHSA and
CPSA, in our opinion, raises a substantial question as to whether Congress has
spoken unambiguously that the new lead requirements are retroactive. Because
of that conflict, we believe that the lead provisions of the CPSIA must apply
prospectively.
Practice under the FHSA - With respect to the FHSA, in part
the argument for retroactivity In the OGC Lead Inventory Opinion rests on the
distinction that Section 9(g) of the CPSA contains a specific requirement that
CPSA standards must be prospective and the FHSA does not contain such a
8
A harder question relates to whether products that have been manufactured before February
10, 2009, but have not yet been distributed are subject to the total lead limits. If, however, the
Commission agrees that the lead requirements do not retroactly apply to products that have already
been Introduced Into Interstate commerce, applying them to products that have been manufactured
before February 10 but not yet shipped would appear to be an arbitrary distinction with little basis In
the law.
Cheryl L. Falvey, Esquire
November 4, 2008
Page 10
specific provision. The procedural requirements of the FHSA and Commission •
practice do not support this distinction. The procedures for rulemaking
under Section 2(q)(l)(A) of the FHSA require that the Commission follow the
procedures of 5 U.S.C. § 553.9 Because of the delayed effective date provisions
of Section 553, the agency has, to our recollection, always or almost
always interpreted it as applying prospectively for rules issued under that
section. Indeed, 5 U.S.C
ctice do not support this distinction. The procedures for rulemaking
under Section 2(q)(l)(A) of the FHSA require that the Commission follow the
procedures of 5 U.S.C. § 553.9 Because of the delayed effective date provisions
of Section 553, the agency has, to our recollection, always or almost
always interpreted it as applying prospectively for rules issued under that
section. Indeed, 5 U.S.C. § 551(4) defines a rule as "an agency statement of
general or particular applicability and future effect (emphasis added)." In
addition, until the passage of the CPSIA, both Sections 2(q}(l)(A) and (B) of the
FHSA referenced the procedures of Section 701(e} of the Food, Drug, and
Cosmetic Act for rulemaking. While the Commission has Issued few rules under
those procedures, It historically applied those rules prospectively.
10
As further support for the argument that FHSA bans should be prospective,
Section 15 of the FHSA gives the Commission
the authority to seek the recall of a
banned hazardous
substance regardless
of whether
or not the product
was banned
at the time of sale. This grant of authority provides an implicit, if not explicit,
Congressional
recognition that bans under the FHSA are generally to be prospective
9
Toe CPSIA is unclear as to whether Congress
intended to make the ban on excessive lead in
children's product a rule under Section 2(q){1)(A) or Section 2(q){l){B) of the FHSA.
10
Toe OGC opinion letter cites the bans on lead wick candles and dive sticks as supporting the
proposition
that the Commission
has sometimes applied the banning provisions of the FHSA to apply to
Inventory and other times has not Toe record, however, shows that retroactive application Is a rarity.
While the preambles of the lead wick candle and dive sticks rules discuss Inventory, the Implementing
provisions
of those regulations make it dear that they applied the banning provisions prospectlVely.
Dive sticks: ''This rule will beCX>me
effective 30 days from publlcatiOn
..
to apply to
Inventory and other times has not Toe record, however, shows that retroactive application Is a rarity.
While the preambles of the lead wick candle and dive sticks rules discuss Inventory, the Implementing
provisions
of those regulations make it dear that they applied the banning provisions prospectlVely.
Dive sticks: ''This rule will beCX>me
effective 30 days from publlcatiOn
... and will apply to
dive sticks entering
the chain of distribution on or after that date" (emphasis added) 45 Fed.
Reg. 13650.
Metal wick candles: ''The rule provides an effective date of 180 days after publication. The
time before that date may be used to deplete stocks ... subject to the ban. The ban then
applies to any metal candle wick containing more that .06 percent lead, and any candle With
such a wick, that Is manufactured
or imported
on or after that date" ( emphasis added). 68
Fed. Reg. 19147.
In addition to the revocation of the exemption from the ban on lawn darts that Congress mandated,
we have found only one additional ban that technically applied to Inventory -- the ban on Infant
cushions. That ban, however, which was effective immediately upon publication, speclflcally
noted that
the effective date was appropriate because all 12 known manufacturers
had already withdrawn their
cushions from the chain of distribution. In ·other words, no Inventory was affected and, as the notice
Indicated, the Commission
was promulgating the rule to assure that such products did not reappear in
the market in the absence
of a ban.
e regardless
of whether
or not the product
was banne
Cheryl L. Falvey, Esquire
November 4, 2008
Page 10
specific provision. The procedural requirements of the FHSA and Commission
practice do not support this distinction. The procedures for rulemaking
under Section 2(q)(1)(A) of the FHSA require that the Commission follow the
procedures of 5 U.S.C
in
the market in the absence
of a ban.
e regardless
of whether
or not the product
was banne
Cheryl L. Falvey, Esquire
November 4, 2008
Page 10
specific provision. The procedural requirements of the FHSA and Commission
practice do not support this distinction. The procedures for rulemaking
under Section 2(q)(1)(A) of the FHSA require that the Commission follow the
procedures of 5 U.S.C. § 553.9 Because of the delayed effective date provisions
of Section 553, the agency has, to our recollection, always or almost
always interpreted it as applying prospectively for rules issued under that
section. Indeed, 5 U.S.C. § 551(4) defines a rule as "an agency statement of
general or particular applicability and future effect (emphasis added)." In
addition, until the passage of the CPSIA, both Sections 2(q}(l)(A) and (B) of the
FHSA referenced the procedures of Section 701(e} of the Food, Drug, and
Cosmetic Act for rulemaking. While the Commission has Issued few rules under
those procedures, It historically applied those rules prospectively.®
As further support for the argument that FHSA bans should be prospective,
Section 15 of the FHSA gives the Commission the authority to seek the recall of a
banned hazardous substance regardless of whether or not the product was banned
at the time of sale. This grant of authority provides an implicit, if not explicit,
Congressional recognition that bans under the FHSA are generally to be prospective
9
Toe CPSIA is unclear as to whether Congress intended to make the ban on excessive lead in
children's product a rule under Section 2(q)(1)(A) or Section 2(q)X1)X(B) of the FHSA.
10
The OGC opinion letter cites the bans on lead wick candles and dive sticks as supporting the
proposition that the Commission has sometimes applied the banning provisions of the FHSA to apply to
Inventory and other times has not Toe record, however, shows that retroactive application Is a rarity
e lead in
children's product a rule under Section 2(q)(1)(A) or Section 2(q)X1)X(B) of the FHSA.
10
The OGC opinion letter cites the bans on lead wick candles and dive sticks as supporting the
proposition that the Commission has sometimes applied the banning provisions of the FHSA to apply to
Inventory and other times has not Toe record, however, shows that retroactive application Is a rarity.
While the preambles of the lead wick candle and dive sticks rules discuss Inventory, the Implementing
provisions of those regulations make it dear that they applied the banning provisions prospectively.
Dive sticks: "This rule will become effective 30 days from publication . . . and will apply to
dive sticks entering the chain of distribution on or after that date" (emphasis added) 45 Fed.
Reg. 13650.
Metal wick candles: ''The rule provides an effectiv date of 180 days after publication. The
time before that date may be used to deplete stocks . . . subject to the ban. The ban then
applies to any metal candle wick containing more that .06 percent lead, and any candle With
such a wick, that is manufacture or imported on or after that date" (emphasis added). 68
Fed. Reg. 19147.
In addition to the revocation of the exemption from the ban on lawn darts that Congress mandated,
we have found only one additional ban that technically applied to Inventory -- the ban on Infant
cushions. That ban, however, which was effective immediately upon publication, speclflcally noted that
the effective date was appropriate because all 12 known manufacturers had already withdrawn their
cushions from the chain of distribution. In other words, no inventory was affected and, as the notice
Indicated, the Commission was promulgating the rule to assure that such products did not reappear in
the market in the absence of a ban.
tive immediately upon publication, speclflcally noted that
the effective date was appropriate because all 12 known manufacturers had already withdrawn their
cushions from the chain of distribution. In other words, no inventory was affected and, as the notice
Indicated, the Commission was promulgating the rule to assure that such products did not reappear in
the market in the absence of a ban.
Cheryl L. Falvey, Esquire
November 4, 2008
Page 11
in application, with Section 15 providing the vehicle to address products
distributed prior to the effective date of the ban.
This is not to say that the agency is absolutely prohibited from acting
retroactively under the FHSA in appropriate instances. According to the Guide to
Federal Agency Rulemaking, 2nd Ed., issued by the Administrative Conference of
the United States in 1991, such instances include those where retroactive
application would not be "manifestly unjust" or where a balance of factors would
favor It. The factors to be balanced include whether the rule is an abrupt
departure from prior practice, the extent of reliance on a former rule (or, in the
case of lead, the absence of a rule), the degree and burden that retroactivity
would impose, and the statutory interest in applying the new rule despite the
reliance of affected parties on the old rule. Since the CPSIA declares that the
new lead requirements are FHSA section 2(q) rules, it would appear that this
type of analysis would be appropriate in evaluating whether they should apply
retroactively. Without belaboring the point, in the absence of the citation in the
legislation to any hard data that show that products in the stream of commerce
present such a risk that they should be banned, the adverse burden and impact,
as well as the dramatic change in the status quo that retroactive application
would present, appear to dictate against an interpretation that the new lead
limits should have such application.
point, in the absence of the citation in the
legislation to any hard data that show that products in the stream of commerce
present such a risk that they should be banned, the adverse burden and impact,
as well as the dramatic change in the status quo that retroactive application
would present, appear to dictate against an interpretation that the new lead
limits should have such application. .
In short, given the provisions of the FHSA itself and history of the
agency's Interpretation and application of the relevant provisions of that Act, the
failure of the FHSA itself to include a specific provision for prospective application
for FHSA bans is not, in our view, particularly relevant to or determinative of the
Issue of retroactive app,lication of the new lead limits. The same is true for that
portion of the analysis In the opinion based on the section 19 prohibited acts
section of the CPSA. The requirement for clear Congressional guidance is even
more pronounced since virtually none of the products in inventory that are
affected by the OGC Lead Inventory Opinion were required to be or have ever
been tested for quantitative lead.
III.
Conclusion.
We do not agree that Congress has spoken in a sufficiently unambiguous
manner to meet the standards for retroactive application outlined in key cases on
this issue. From what we understand, and from what is evident from the
sometimes jumbled text of the CPSIA itself, this legislation was the child of
legislative compromise, hammered out under the pressures of competing Interest
groups and compressed timelines. To construe some of the CPSIA's most
Cheryl L. Falvey, Esquire
November 4, 2008
Page 11
in application, with Section 15 providing the vehicle to address products
distributed prior to the effective date of the ban.
This is not to say that the agency is absolutely prohibited from acting
retroactively under the FHSA in appropriate instances
competing Interest
groups and compressed timelines. To construe some of the CPSIA's most
Cheryl L. Falvey, Esquire
November 4, 2008
Page 11
in application, with Section 15 providing the vehicle to address products
distributed prior to the effective date of the ban.
This is not to say that the agency is absolutely prohibited from acting
retroactively under the FHSA in appropriate instances. According to the Guide to
Federal Agency Rulemaking, 2 Ed., issued by the Administrative Conference of
the United States in 1991, such instances include those where retroactive
application would not be "manifestly unjust" or where a balance of factors would
favor It. The factors to be balanced include whether the rule is an abrupt
departure from prior practice, the extent of reliance on a former rule (or, in the
case of lead, the absence of a rule), the degree and burden that retroactivity
would impose, and the statutory interest in applying the new rule despite the
reliance of affected parties on the old rule. Since the CPSIA declares that the
new lead requirements are FHSA section 2(q) rules, it would appear that this
type of analysis would be appropriate in evaluating whether they should apply
retroactively. Without belaboring the point, in the absence of the citation in the
legislation to any hard data that show that products in the stream of commerce
present such a risk that they should be banned, the adverse burden and impact,
as well as the dramatic change in the status quo that retroactive application
would present, appear to dictate against an interpretation that the new lead
limits should have such application.
In short, given the provisions of the FHSA itself and history of the
agency's Interpretation and application of the relevant provisions of that Act, the
failure of the FHSA itself to include a specific provision for prospective application
for FHSA bans is not, in our view, particularly relevant to or determinative of the
Issue of retroactive application of the new lead limits
ch application.
In short, given the provisions of the FHSA itself and history of the
agency's Interpretation and application of the relevant provisions of that Act, the
failure of the FHSA itself to include a specific provision for prospective application
for FHSA bans is not, in our view, particularly relevant to or determinative of the
Issue of retroactive application of the new lead limits. The same is true for that
portion of the analysis In the opinion based on the section 19 prohibited acts
section of the CPSA. The requirement for clear Congressional guidance is even
more pronounced since virtually none of the products in inventory that are
affected by the OGC Lead Inventory Opinion were required to be or have ever
been tested for quantitative lead.
III.
Conclusion.
We do not agree that Congress has spoken in a sufficiently unambiguous
manner to meet the standards for retroactive application outlined in key cases on
this issue. From what we understand, and from what is evident from the
sometimes jumbled text of the CPSIA itself, this legislation was the child of
legislative compromise, hammered out under the pressures of competing Interest
groups and compressed timelines. To construe some of the CPSIA's most
Cheryl L Falvey, Esquire
November 4, 2008
Page 12
ambitious provisions - the new total lead limits - in such a way that l.esM/
products already manufactured and In the stream of commerce become illegal as
of a certain date Imposes huge after-the-fact sanctions for past transactions
undertaken in good faith -- with little or no legislatively articulated or factual
rationale supporting that result. The unfairness of such a result is one reason
why, as the OGC Lead Inventory Opinion correctly notes, almost all CPSC
rulemaking is prospective in nature
nd In the stream of commerce become illegal as
of a certain date Imposes huge after-the-fact sanctions for past transactions
undertaken in good faith -- with little or no legislatively articulated or factual
rationale supporting that result. The unfairness of such a result is one reason
why, as the OGC Lead Inventory Opinion correctly notes, almost all CPSC
rulemaking is prospective in nature. We do believe that it would effectuate the
overall purposes of the CPSIA and the CPSA in general to follow the path that
the Commission has taken for virtually all standards and bans under the acts it
administers by interpreting the law to apply the CPSIA's new total lead limits only
to products manufactured after February 10, 2009.
We thank you for your time in considering these comments. Please let us
here at Brown & Gidding know if we can be of further assistance.
Sincerely,
~dd
Ci~/~
Michael A. Brown
cc:
Office of the Secretary
Sincerely,
~dd
Ci~/~
Cheryl L. Falvey, Esquire
November 4, 2008
Page 12
ambitious provisions - the new total lead limits - in such a way that legal
products already manufacture and In the stream of commerce become illegal as
of a certain date Imposes huge after-the-fact sanctions for past transactions
undertaken in good faith -- with little or no legislatively articulated or factual
rationale supporting that result. The unfairness of such a result is one reason
why, as the OGC Lead Inventory Opinion correctly notes, almost all CPSC
rulemaking is prospective in nature. We do believe that it would effectuate the
overall purposes of the CPSIA and the CPSA in general to follow the path that
the Commission has taken for virtually all standards and bans under the acts it
administers by interpreting the law to apply the CPSIA's new total lead limits only
to products manufactured after February 10, 2009.
We thank you for your time in considering these comments. Please let us
here at Brown & Gidding know if we can be of further assistance
d the CPSA in general to follow the path that
the Commission has taken for virtually all standards and bans under the acts it
administers by interpreting the law to apply the CPSIA's new total lead limits only
to products manufactured after February 10, 2009.
We thank you for your time in considering these comments. Please let us
here at Brown & Gidding know if we can be of further assistance.
cc:
Office of the Secretary
Sincerely,
u-ac8./...
Michael A. Brown
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.