CPSC Votes to Keep Proposed Rule Making Corrective Action Plans Legally Binding

Democrats on the Consumer Product Safety Commission are not giving into pressure to drop a proposed rule that would make voluntary corrective action plans legally binding. Following criticism of the proposal from congressmen, industry and a former CPSC commissioner, the CPSC on May 12 voted 3-2 along partisan lines to reject an amendment to its midyear operating plan that would have withdrawn the proposed rule. However, CPSC Chairman Elliot Kaye noted that moving forward with a final rule is not one of his top priorities.

Kaye was the deciding vote alongside Democratic Commissioners Robert Adler and Marietta Robinson to block withdrawal of the proposed rule. Commissioner Joseph Mohorovic had proposed the amendment, and fellow Republican Commissioner Ann Marie Buerkle joined him in favor.

Mohorovic said few commission proposals have met with as much disdain as the November 2013 proposed rule (see 13112028). Under CPSC’s proposal, once a company voluntarily agrees to undertake a corrective action plan, it would be legally bound to fulfill the terms of the agreement. Currently, CPSC regulations specify that voluntary corrective action plans have no legally binding effect, raising concerns that the CPSC can’t enforce the plans if a company intentionally delays implementation. The proposed rule would also set requirements for voluntary remedial actions and recall notices and add compliance programs as possible corrective actions.

When people outside of CPSC are asked what they would like to change about CPSC, “answers one, two and three would be to get rid of the voluntary recall rule,” said Mohorovic. “We’ve had Democrats and Republicans, liberals, conservatives, cats and dogs, Redskins fans, Cowboys fans: all seem to agree on one thing, and that’s this is not apt public policy for the agency.” Industry groups and congressmen criticized the proposal in comments to the agency (see 14021817), and former CPSC Chairwoman Ann Brown said the proposal would delay recalls “weeks or even months due to haggling over legalities” (see 14060420).

However, Kaye said the controversy is overblown, noting that the issue has never come up when he visits manufacturers outside the beltway. “I think it’s more of a product of the inside the Beltway echo chamber than it is something that manufacturers and retailers and others are spending a lot of their day-to-day on.” According to Robinson, the opprobrium stems from lawyers that “are billing by the hour while they are stirring up controversy.”

Robinson called the proposed rule “critical,” and said she is “distressed” that over a year and a half has passed since the proposed rule was issued without a final version. The proposal from CPSC staff came from “decades of experience from negotiating thousands of recalls,” and would let the regulated community know “explicitly what would be expected by the CPSC in voluntary recalls” in the hope of reducing delays in negotiating recall notices. Although an amendment proposed by commissioners would indeed make negotiated agreements legally binding, that would be the same as negotiated agreements in “any other context in American society.” The lack of movement from CPSC staff on the proposed rule is presumably because Chairman Kaye has decided the commission has more important tasks before it, but for Robinson the proposal remains “very much a priority.”

Kaye said the lack of movement on the proposal is the result of limited resources. If CPSC had more, Kaye would “of course want to see if these things can be moved through.” But for Kaye, the corrective action plan proposal takes a backseat to other rulemakings like mandatory standards for off-highway vehicles and window coverings that “actually have a direct impact … on lives.”