U.S. Consumer Product Safety Commission Proposes Changes to Information Disclosure Rules

When Congress enacted the Consumer Product Safety Act in 1976 it included an important provision protecting manufacturers from disclosure of inaccurate information about its products.  Section 6(b) of the Consumer Product Safety Act, 15 U.S.C. § 2055(b), requires the U. S. Consumer Product Safety Commission (“CPSC”) to take reasonable steps to ensure the disclosure of any information about a consumer product which allows the public to identify the manufacturer is “accurate,” “fair in the circumstances” and “reasonably related to effectuating the purposes” of the Consumer Product Safety Act.  Section 6(b) also requires the CPSC to notify a manufacturer before it makes any disclosure (like a response to a request under the Freedom of Information Act) to allow the manufacturer to comment or make objections, and manufacturers frequently take advantage of this protection.

CPSC Acting Chairman Robert Adler (who will continue on the Commission when Eliot Kaye is confirmed as the new Chairman) has made quite clear his dislike of Section 6(b).  On February 26, 2014, the CPSC published a Notice of Proposed Rulemaking in the Federal Register outlining proposed changes to 16 C.F.R. Part 1101, the CPSC’s rules implementing the provisions of Section 6(b).  79 Fed. Reg. 10712 (February 26, 2014).  Comments on the proposed rule were due on April 28, 2014.

According to the CPSC, the changes are designed to modernize the process, streamline the regulations and lessen the burden on the CPSC in complying with Section 6(b).  The CPSC proposes at least five substantive changes to the existing rules.  This article summarizes the proposed changes and discusses their implications for manufacturers.

The first major proposal is to allow for electronic notification to manufacturers, which currently occurs by mail.  This is hardly controversial, although the details are important.  Today, the CPSC already provides some notices to manufacturers through its manufacturers’ portal at Saferproducts.gov.  That process seems to work well, and allows for notifications to multiple addresses at the manufacturer to ensure notice is received and processed, even if employees are re-assigned or on vacation.  Using the Saferproducts.gov portal would be ideal, but the notice does not reference that.  The CPSC should spell out the process for electronic notification to avoid duplication with Saferproducts.gov registration and include safeguards to ensure notices are actually received.

Second, the notice proposes changes to the regulations to more closely mirror the language of Section 6(b).  Although the CPSC indicates in the notice that it does not expect these changes will “reduce the scope of information subject to 6(b) requirements,” one wonders what is achieved by the change if that is the case.  There is no reason to change long-standing agency regulations and practice, if the change does not affect what is disclosed.

A third change is significant.  The CPSC proposes that it will not provide Section 6(b) protection for information that is “publicly available.”  If adopted, this would permit the CPSC to re-publish any information available to the public, potentially without confirming its accuracy or notifying the manufacturer.  While seeking to exclude such information from the provisions of Section 6(b), the CPSC then goes on to say this revision does not change its obligation to present information accurately, and that other agencies “generally coordinate” with manufacturers the release of information identifying them.  If those obligations already exist, there is little reason to create broad exceptions to the protections afforded by Section 6(b).  In today’s world, where virtually any information is publicly available, it is bad policy to permit the CPSC to re-publish that information, and provide it with its imprimatur, without protecting manufacturers through the provisions of Section 6(b).

A fourth change is also significant.  Unlike current practice, the CPSC proposal would remove the requirement to notify a manufacturer about the release of “substantially identical” information about which the manufacturer already received notice.  The proposal would also end the current practice of allowing manufacturers to request re-notification when information is going to be disclosed again.  Under the procedure now in place, a manufacturer can choose to be re-notified even if the CPSC proposes to release identical information after the first release. This is important to a manufacturer because its information about a product may change over time; the manufacturer may receive additional information about a product, or may have completed an investigation by the time the second request is made.  The additional information may affect the accuracy of a statement or what is fair under the circumstances and the manufacturer should have an opportunity to formulate comments to the second release request based on the new information.  In addition, under the proposed rule, a manufacturer would not receive any notice if information “substantially identical” to the first release is disclosed, but the rule does not define what is considered “substantially identical” and manufacturers have no way of knowing what information will be released under this standard.

A final proposed change also modifies the substance of current procedures to the detriment of manufacturers.  Currently, the CPSC permits manufacturers to decide whether or not comments they make in response to a request to release information are also released with the information, and the CPSC honors that request.  Under the proposal, a company wishing to have its comments withheld would have to “provide a rationale,” and the proposed rule does not establish any standard by which that rationale will be measured.  This proposal will almost certainly chill a manufacturer’s desire to make comments, because whenever it does so it runs an unqualified risk that those comments will be disclosed to the public.

The provisions of Section 6(b) of the Consumer Product Safety Act may seem arcane and technical.  It is important to remember, however, the words of the United States Court of Appeals for the Third Circuit that the requirements of Section 6(b) “were meant to protect manufacturers from the harmful effects of inaccurate or misleading public disclosure by the Commission, through any means, of material obtained pursuant to its broad information-gathering powers.”  GTE Sylvania, Inc. v. Consumer Product Safety Comm’n, 598 F.2d 790, 812 (3d Cir. 1979), aff’d, 447 U.S. 102 (1980).  If anything, the harmful effects of inaccurate information are greater today because information can be disseminated so quickly.  While streamlining and modernizing the Section 6(b) process are laudable goals, proper application of Section 6(b) is very important, and the CPSC should seriously consider whether the proposed changes are warranted.

Disclaimer: This is for general information and is not intended to be and should not be taken as legal advice for any particular matter. It is not intended to and does not create any attorney-client relationship. The opinions expressed and any legal positions asserted in the article are those of the authors and do not necessarily reflect the opinions or positions of Miles & Stockbridge P.C., its other lawyers, or American Lawyer Media.

Timothy L. Mullin, Jr. is principal with Miles & Stockbridge’s Products Liability and Mass Torts Practice Group. He represents manufacturers in product liability cases and in client matters related to the CPSC, including corrective action plans (recalls), civil penalties and reports and investigations under the Consumer Product Safety Act.

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