After a year of congressional scrutiny of the Consumer Product Safety Commission, Congress enacted sweeping changes to consumer product safety laws and the structure of the agency in August 2008. With the upcoming change in Administration, more dramatic changes will result in even more challenges for companies struggling to meet the numerous requirements of the new law. The outcome of a battle in the US House of Representatives over the chairmanship of the congressional committee that oversees the CPSC will also have a major impact on corporate America.

Currently, Nancy Nord and Thomas Moore serve as CPSC Commissioners. Acting Chairman Nord will be replaced in the early days of the Obama Administration with a new appointee with no chance of her remaining on the Commission. Commissioner Thomas Moore may also be replaced even though he was originally appointed by President Bill Clinton. Already, consumer groups have begun compiling lists of potential CPSC nominees that they would like President Obama to consider. Many of these names should give corporate America cause for concern.

Potential CPSC nominees include Alan Korn with the advocacy group Safe Kids USA, Nancy Cowles with the advocacy group Kids in Danger, Rachel Weintraub with the advocacy group Consumer Federation of America, Pamela Gilbert who was the former CPSC executive director during the Clinton Administration under then Chairman-Ann Brown, as well as high level attorneys within the Office of the Illinois Attorney General which has been very active on product safety issues. Since at least two new commissioners will need to be nominated, two of these individuals may be asked to serve. A likely option would be the nomination of someone widely seen as a product safety advocate as a commissioner while naming as chairman a CPSC veteran with experience working with or running the agency. This could result in Pamela Gilbert becoming the next CPSC Chairman. During her time at the CPSC, the agency was known for its strident enforcement efforts that proved problematic for corporate America. In 2001, President George W. Bush tried to remove Pamela Gilbert’s boss, Chairman Ann Brown, from the CPSC sparking a constitutional battle with the Senate over his right to do so1.

In Congress, current House Energy and Commerce Committee Chairman John Dingell of Michigan, who oversees the CPSC, is facing a challenge for the chairmanship from California’s Henry Waxman. The decision concerning the chairmanship will be made within the next few weeks. Should Waxman replace Dingell as chairman, companies facing CPSC investigations should expect regular congressional subpoenas for documents in addition to a chair at a witness table. As the current Chairman of the House Oversight and Government Reform Committee, Waxman has held numerous high profile oversight hearings of private sector companies in which corporate chief executive officers were paraded before a battery of media cameras to testify about the shortcomings of their companies. Media interest in companies seen as lacking on product safety will be intense. Changes in the Senate Commerce Committee will also occur due to the recent election, although these changes are not expected to change significantly the direction and interest of the Senate Committee Commerce in CPSC related issues.

Regardless of the actual individuals who will serve as CPSC commissioners and on congressional oversight committees, there will be a strong push by a Democratic Administration and Congress to visibly crack down on any perceived child safety issues. Even with a 100 percent test rate of every single toy or piece of jewelry in inventory, absolute product safety can never be guaranteed. CPSC officials will more frequently utilize their new authority to pursue significant civil and criminal penalties for any violations, paperwork or otherwise. In addition, the amount of time available to work with CPSC to determine the best approach to a voluntary recall will be sharply reduced with more CPSC-mandated recalls. Companies should also anticipate greater demands for document and testing paperwork reviews.

Prompt and legally accurate responses to CPSC and congressional inquiries in 2009 and beyond will be critical for corporate America. Companies that consider product safety issues to be a low priority within their company, even in this economy, should not be surprised when their CEO is called to testify before Congress or is faced with a significant fine. Product safety issues cannot be brushed aside or delayed in this political and legal environment.

Arent Fox currently counsels a number of clients on product safety and government relations issues and will continue to monitor future actions at the CPSC and in Congress.

1See http://www.usdoj.gov/olc/cpscchairmanremoval.htm for more information.

Georgia Ravitz
ravitz.georgia@arentfox.com
202.857.8939

Scott A. Cohn
cohn.scott@arentfox.com
212.484.3984

Joe Keeley
keeley.joe@arentfox.com
202.857.6280