State Consumer Protection Laws

On July 1, 2018, California’s revised Automatic Renewal Law (ARL), Cal. Bus. & Prof. Code § 17600 et seq., goes into effect.

The updated law requires e-commerce sellers, doing business in California, to allow online cancellation of auto-renewing memberships or recurring purchases that were initiated online. Continue Reading Stricter Automatic Renewal Law in California Commences July 1, 2018

Recently, a federal judge sitting in the Eastern District of California (Sacramento), for the first time, refused to require a manufacturer to place a Prop 65 warning on its product based on a finding that the requirement would violate the company’s First Amendment rights. We have been following this developing issue for some time. (See prior posts here, here, and here.) Continue Reading First Amendment Still Trumps Prop 65

Fresh off a victory in the CA primary, California Attorney General Xavier Bacerra filed suit on June 7, 2018 against Nutraceutical Corporation of Park City, Utah and Graceleigh, Inc. dba Sammy’s Milk of Newport Beach, CA, alleging violations of California’s Proposition 65 and California’s consumer protection laws. Continue Reading California AG Leads Attack on Lead in Infant Formula

As this space has addressed before (see here and here), the California Transparency in Supply Chain Act (Civ. Code section 1714.43), enacted in 2010, requires large retailers and manufacturers (those with worldwide sales in excess of $100 million) doing business in California to disclose on their websites their efforts to eradicate slavery and human trafficking from their direct supply chain for tangible goods offered for sale.

In Hodsdon v. Mars, a putative class action, the plaintiff alleged that this California consumer protection law required Mars, Inc. (of Mars Chocolate fame) to disclose on its products’ labels that the products’ supply chains may involve slave labor. The trial judge dismissed the complaint, and on June 4, 2018 the Ninth Circuit affirmed the trial court’s decision, holding that the California consumer protection laws do not obligate Mars to label its goods as possibly being produced by child or slave labor. The court explained that, in the absence of any affirmative misrepresentations by the manufacturer, manufacturers do not have a duty to disclose the labor practices in question, even though they are reprehensible, because they are not physical defects that affect the central function of the chocolate products. Continue Reading Where No Misrepresentation, Ninth Circuit Does Not Require Labels Disclosing Slave Labor

As this space has discussed on several occasions, there are many issues with California’s Prop 65 (check out some of my prior posts about unintended consequences here and here). In full disclosure, most of the issues I discuss here are presented from the viewpoint of businesses that find themselves at odds with citizen enforcers or their counsel, the language of the Proposition, and/or the California courts’ interpretation of that language.

However, Prop 65, otherwise known as California’s toxic substance warning law, appears to be the subject of equal opportunity complaining. Continue Reading Prop 65: GET THE LEAD OUT!

A recent Federal Court decision on the issue of whether to grant a preliminary injunction in the ongoing saga of the appropriateness of adding the pesticide Glyphosate to the CA Prop 65 list (see prior posts, here and here) has become the grist for the “Fake News” phenomenon. More specifically, Momsacrossamerica.org issued a press release on February 28, 2018 entitled “Judge Says Public Doesn’t Need Cancer Warning.”

However, a quick scan of the decision issued on February 26th reveals that the judge did no such thing. Continue Reading Prop 65 Preliminary Injunction and “Fake News”

Much of the recent discussion regarding Prop 65 has been focused on the regulatory changes going into effect in August of 2018. And that makes sense since there will be significant changes to the warnings, responsibility, and labeling obligations on product websites. There is, however, other activity that may result in a more profound change as to which chemicals require Prop 65 warnings.  As we have discussed in the past (see prior post here), there has been litigation in California state court addressing the appropriateness of adding the pesticide ingredient Glyphosate to the Prop 65 list. Continue Reading A Federal Court Gets Opportunity to Weigh In on Prop 65 With a Little Help from Some Friends

California’s Safe Drinking Water & Toxic Enforcement Act of 1986 (affectionately known as “Proposition 65”) has long been the subject of discussion, both pro and con. Much of the conversation is on various issues surrounding the enforcement of Proposition 65 (for example, see a prior post here). In March 2017, a California trial court in  Monsanto Co. v. Office of Environmental Health Hazard Assessment (“OEHHA”), No. 16-CE CG 00183, addressed a much more basic issue: should a chemical – here Glyphosate, a key ingredient in Monsanto’s Round-Up® product – even be on Prop 65’s list of cancer-causing chemicals? Continue Reading California’s Prop 65: More Form Over Substance

We have had a huge election result, perhaps the most significant in our lifetime, potentially even exceeding what was called the Reagan Revolution.  It is critical, particularly for anybody from Washington DC, to have a great deal of modesty and humility in prognosticating the future under the Trump administration even in the CPSC world.  We assume, but really do not know, what the attitudes of the new Trump administration and the Republican-led Congress will be in our parochial, but critical, little product safety world.

We can understandably assume that within a year or less there will be a new CPSC Chairman and a new Republican majority on the Commission. We can also assume that this will change the direction and substance of many regulatory initiatives and maybe even some of the approaches to compliance and civil penalties.
Though we may be unsure about the future, I can say confidently that what we badly need from the outgoing Democratic majority and the yet to be defined incoming Republican majority is some perspective, restraint, and Aristotelian moderation.  I hope that the current majority commissioners will not take advantage of their present but fleeting power to push through ill-conceived regulatory or compliance and enforcement initiatives.  Such actions will be bitterly opposed and this Commission’s reign will end on a sour note and be subject to regulatory and congressional reversal.

vote-pins-CPSC-Post-Election On the other hand, all five of the current commissioners swore to uphold the Constitution and the laws of the United States.  Those laws absolutely include CPSIA and other governing statutes of the CPSC.  So the Commissioners need to, and I am confident that they will, continue to do their jobs.

There are some very important initiatives which will enhance safety and not be politically controversial.  For example, I welcome Chairman Kaye’s interest in a comprehensive and interagency review of the lithium ion battery problem.  We do not need to have any more spectacular safety problems to recognize that even without hoverboards and cell phones catching on fire, the increasing use and push-the-envelope application of products which use lithium ion batteries is causing lots of problems.

Indeed, the situation with respect to lithium ion batteries is even worse for smaller companies which don’t have vertical integration, don’t design batteries or battery packs, don’t have much control over their vendors, and basically have to take solutions off the shelf.  Everybody in the product safety community will benefit from figuring out what combination of standards, practices, and designs we need to protect the public and thousands of businesses.

Nevertheless, the business community and the future leaders of the CPSC need to show some restraint as well.  It would be a mistake to take advantage of the present politics to fundamentally reverse the key elements of the Consumer Product Safety Act, to strangle the agency with inadequate funding, or tie the agency up in knots so it cannot adequately function.  This is a formula for exponentially increasing an already problematic patchwork of state and local government regulation of consumer products.  It would also potentially allow for cheap, unsafe imports to flood our country and undermine significant product safety investments already made by U.S. companies.

This does not mean that nothing should be done or that the statute shouldn’t be revisited in some regards.  There are plenty of ways the business community can achieve meaningful regulatory improvements and burden relief that would not cause larger issues.

I do not support crippling the CPSC.  No members of industry that I have spoken with support such drastic action either.  It will not be in the long term benefit of the business community and it leaves American consumers, our families and friends, less protected.

I’ve been involved in the product safety world for 30-plus years and have seen the political pendulum swing on multiple occasions. One constant is that most reasonable, informed people, whether business executives or consumer advocates, agree that a well-functioning CPSC is a critical part of a vibrant economy for consumer products in this country.

 

“…Clowns to the right of me, jokers to the left, here I am…”

-Stealers Wheel (1972)


Legal actions regarding “Made in the USA” claims, whether prosecuted by the Federal Trade Commission (FTC) or through various state unfair trade practices acts, often settle early in the proceedings.  For example, in 2014, the FTC issued 16 “closing letters” wherein the target company agreed to revise its “Made in the USA”  claim to clarify that its products, even those assembled in the United States, included imported components. In 2015, the FTC issued 28 such “closing letters”; and in 2016, to date, the FTC has issued 18.

Earlier this month, Chemence, Inc., the Ohio maker of Kwikfix, Hammer-Tite and Flash Glue, entered into a settlement with the FTC.  Chemence was the third glue company that has resolved its claims issues with the FTC since 2015.   Toagosei America, Inc., makers of the Crazy Glue brand, and Gorilla Glue both previously reached agreement with the FTC, with FTC issuing closing letters after both companies agreed to make clear that their products included some imported materials.

Chemence’s path to resolution with the FTC was different.  Continue Reading Stuck in the Middle with the FTC