Senate Commerce Committee to set quick hearing on Hal Stratton.

Harold D. "Hal" Stratton, President Bush's nominee to be chairman of the U.S. Consumer Product Safety Commission (CPSC), should get a hearing before the Senate Commerce Committee during the last week of April. Committee sources say they are very aware of the May 1 deadline for the Commission to remain in a quorum status with only two Commissioners,[1] and are working very hard to secure a date for his confirmation hearing. The White House sent his name to Capitol Hill March 13.

Speculation is that the date will be April 25, but the committee will not confirm that date until it is cleared with all the subcommittees that are working to schedule meetings that week.

Attorneys for Daisy Manufacturing Co. Ask for Dismissal of CPSC Complaint Against Airguns; Charge Brown with Prejudgment

CPSC's Oct. 30, 2001 complaint alleging that some 7.5 million airguns made by Daisy Manufacturing of Rogers, Arkansas, are defective and should be recalled did not disappear with the departure of former CPSC Chairman Ann Brown.

Brown predicted a "major recall or lawsuit" involving a product that "kills and maims children," before she left the agency, when she announced on Aug. 8, 2001, that she would resign effective Nov. 1.[2] The Commission subsequently voted 2-1 to issue a complaint the day before Brown left.

Daisy's attorneys are calling on the Administrative Law Judge assigned to the case to dismiss the complaint, citing many procedural irregularities and lack of due process. The case is currently in pretrial discovery. A pre-hearing conference is scheduled for May 3 before Administrative Law Judge William Moran.

Last week, Locker, Greenberg & Brainin, P.C., of New York, attorneys for the company, released their Motion to Dismiss, accompanied by a Memorandum of Law in support of the motion. The Motion and Memorandum of Law were co-signed by the company's Little Rock attorneys, Friday Eldredge & Clark, and by Daisy's corporate attorney Marianne McBeth.[3]

Federal regulatory agencies are subject to administrative rules governing due process in carrying out their missions. There are also statutory prohibitions that are meant to offer protection to companies from unfair procedures.

In the Daisy case, CPSC clearly violated several of these standard rules. The attorneys' list of the agency's irregular handling of the case makes compelling reading.

Central to Daisy's motion to dismiss is the charge that Chairman Ann Brown had prejudged the case (a violation of the Administrative Procedure Act). She also obviously had advance knowledge of the support of fellow Commissioner Thomas Moore for issuance of the complaint (a violation of the Government in the Sunshine Act) and had directed staff to reveal to the media one full day before the vote that a complaint would be issued against Daisy (a violation of CPSA's 6(b) rule). The 6(b) rule prohibits CPSC from disclosing information regarding a Section 15 (b) compliance action, unless the agency has already issued a compliant, or when there has been no complaint, only after obtaining the agreement of the person who submits the information or agrees to a settlement.[4]

No CPSC Commissioner, even if he or she is the Chairman, can prejudge an issue (especially in public, as Ann Brown did back on Aug. 8) before it is properly adjudicated.

Aaron Locker of Locker Greenberg & Brainin wrote to Chairman Brown on Oct. 10 requesting that she recuse herself from voting on the case since she had stated, in her Aug. 8 resignation news release, that a certain "very dangerous product that kills and maims children" needed to be recalled. Locker charged that her statement clearly referred to Daisy airguns and that she had demonstrated her "closed mind" on the matter. Brown ignored the request.

Under the Consumer Product Safety Act (CPSA), since two members of the Commission constitute a quorum when only three are serving, two Commissioners who confer on a substantive matter without public notice are in violation of the "Government in the Sunshine Act."

That act requires that "every portion of every meeting of an agency shall be open to public observations."[5]

There is no record of Commissioner Moore and Chairman Brown having met to discuss the matter. Yet Brown acted as though she knew the outcome of the vote. How else could she have scheduled a 2:00 p.m. news conference, directed staff to prepare a detailed briefing script for the news conference, arranged for out-of-town victims and their attorneys to be available for interviews at CPSC offices in Bethesda, all on the day of the vote, before the vote was known to the public?

Moreover, attorneys charge, a copy of the draft Complaint was supplied to members of the news media on Oct. 29, the day before the Commissioners voted. Daisy's attorneys offered in evidence an affidavit from Jeffrey M. Locker of Locker Greenberg & Brainin, stating that reporter Jayne O'Donnell of USA Today called him to ask for his comments on the draft complaint, which had been supplied to her by someone at CPSC. Attorneys also submitted a copy of a New York Times story by Julian E. Barnes on Oct. 30 disclosing that CPSC would vote on the complaint that day.[6]

Each one of these procedural violations could be enough to invalidate the CPSC action. Taken together, they portray an agency so eager for legal action against Daisy and so thirsty for publicity that it knowingly violated several rules imposed by Congress to insure fairness.

As Commissioner Gall observed in her Oct. 30 statement:

   "Today I voted against the issuance of an administrative complaint against
   Daisy Manufacturing Company seeking to force the recall of certain model
   air rifles. This complaint is highly politicized, it is not well founded in
   law or the evidence and it should not have been brought."[7]

Should the matter be dismissed, the case would be referred back to the agency for further adjudication.

CPSC--A Paper Tiger or a Consumer Bargain?

[Editor's note: CPSC Monitor received a pre-publication copy of the article discussed below. According to the author, the article will be posted on the web site of The Washington Monthly and will be published in abbreviated form in an up-coming edition of that publication.]

Maria Felcher, a freelance author and adjunct lecturer at Harvard's Kennedy School of Government, is a strong critic of the Consumer Product Safety Commission. The Washington Monthly is publishing her story, "The U.S. Consumer Product Safety Commission: The Paper Tiger of American Product Safety" to prove her thesis that it is a "paper tiger."[8] Her interest in CPSC stems from an incident that occurred in 1998. Close friends lost a child when a defective portable crib collapsed.

That experience led her to an in-depth investigation of CPSC's history, its politics, and its achievements or lack of them. The defective crib had been recalled but the infant's parents were not aware of the recall. Felcher blames CPSC for allowing this to happen to at least fifteen babies. She faults the system, the Commissioners, and of course politics.

The piece shows extensive research, but is ultimately boring. Even CPSC junkies will find it a drag. Felcher laments CPSC's lack of adequate budgets (a frequent complaint of the pro-regulation crowd) and cites its need for greater enforcement authority. She praises the Clinton-appointed former Chairman Ann Brown for her seven years of leadership, but says former Chairman Terry Scanlon, a Reagan appointee, "did more to undermine consumer product safety than any chairman in the agency's history, a dubious achievement that holds true to this day."[9]

To Felcher, Commissioners appointed by Republican Presidents Reagan and Bush were shamefully loyal to industry, while Ann Brown was lauded for increasing the frequency and number of recalls and for raising the visibility of CPSC through frequent TV news appearances.

"The Scanlon commission never recalled more than two hundred products a year; Brown hit 439 her first year in office," Felcher writes.

She also praises Brown for winning "civil penalties against seventeen recalcitrant firms her first year in office, totaling more than a million dollars."[10]

But even Ann Brown's penchant for regulation and enforcement failed to put CPSC on the right path, she says.

The "profound problems" Felcher found in her research include continuing reluctance of companies to report product hazards under Section 15 of the statute, the failure of recall announcements to reach consumers, and a rule in the statute that puts obstacles in the path of CPSC releasing information on possibly hazardous products.[11]

"Paradoxically, Ann Brown's efforts to keep the numbers of recalled products high may have at times undermined product safety," she writes.

The fact that CPSC's multiple recall press releases compete with hundreds of others and often get little media attention causes them to get "lost in the shuffle," she says.[12]

Moreover, she notes, "there is no law or regulation that requires manufacturers or the CPSC to notify consumers directly of a recall, by phone or by mail"[13]

Felcher does not mention the ongoing consideration of a product registration rule, a matter still pending at CPSC, but one supposes she would support it.

She is well aware from her studies of CPSC that developing mandatory product safety standards is painfully slow and probably not the real answer to CPSC's perceived deficiencies. But voluntary standards, while easier, are essentially "industry-driven," she charges, and are thus suspect.

Instead of focusing on standards, Felcher suggests making companies suffer greater civil penalties for not reporting--an idea backed by Ann Brown and former First Lady (now Senator) Hillary Clinton. A bill to lift the current $1.65 million cap on civil penalties was introduced again by Rep. Ed Markey (D.-MA.) last year (and recently backed publicly by Acting Chairman Thomas Moore) but stands little chance of passage.

Felcher's analysis gets confusing when she attempts to compare rates of deaths and injuries related to consumer products from thirty years ago to those of today.

She notes that, according to CPSC estimates, deaths related to consumer products have declined since 1970. Thirty years ago, products were said to be killing some 30,000 Americans annually; today that number is estimated to be 23,000.[14] (Felcher uses the number 22,000.) Official CPSC documents take credit for a 30% decline in the rate of deaths and injuries related to hazardous consumer products since the agency's inception.[15]

While product-related deaths appear to be down, Felcher says that injuries related to consumer products have risen by at least 45 percent during the same period. That estimate could not be confirmed. Felcher cites the number of injuries in 1970 as 20 million, and says today's number has risen to 29 million--hardly a 45% increase. [16].

In examining these estimates one must consider population growth, the increased numbers of products in the marketplace, and improvements in the gathering of data. According to CPSC's 2003 Budget Request, "{the agency} delivers important safety benefits to the American public by continually striving to do more with less."[17]

But in the article, former Commissioner Stuart Statler, a Carter appointee, dismisses those successes.

"The agency is a paper tiger, a watchdog that is ignoring its mandate," Statler told Felcher.

"The original aim of the Consumer Product Safety Act has been lost in a morass of paperwork and obeisance to procedures that cause CPSC to bend over backward to manufacturers. As a result, CPSC has been largely ineffective in ridding the marketplace of dangerous products," Statler said.[18]

There's the problem. Government entities tend to get bogged down in paperwork and procedure. That is the nature of the beast. Government has enough trouble trying to deliver the mail and get its Amtrak trains to run on time. It is hard to see how this little agency (CPSC) can achieve the unrealistic goals set for it by the Maria Felchers of the world.

[1] The Consumer Product Safety Act allows two Commissioners to act as a quorum for up to six months when a vacancy occurs on the Commission. Chairman Brown left the agency Nov. 1, 2001; thus the statutory six months will expire May 1, effectively preventing the agency from acting unless a new chairman is confirmed.

[2] See CPSC Monitor, Vol. 6, Issue 9, "Brown's `Major Recall or Lawsuit' Might Target Airguns," Sept.-Oct.-2001.

[3] Respondent's Motion to Dismiss the Complaint for Procedural Irregularity, Violation of Law, Action without Observation of Procedures Required by Law, and a Denial of Due Process Under the Fifth Amendment to the United States Constitution, In the Matter of Daisy Manufacturing Company, Inc., doing business as Daisy Outdoor Products, 400 West Stribling Drive, Rogers Arkansas 72756 - CPSC Docket No.: 02-2.

[4] Consumer Product Safety Act, Section 6(b)(5); (15 U.S.C. 2055(b)(5).

[5] "Government in the Sunshine Act," 5 U.S.C. 552b.

[6] Respondents' Motion to Dismiss, Op. Cit.

[7] Statement of Commissioner Gall in Opposition to Issuance of Administrative Complaint Against Daisy Manufacturing Company, Oct. 30, 2001.

[8] Felcher's work was funded by "Understanding Government" a non-profit foundation affiliated with the School of Communication of American University in Washington, DC.

[9] "The U.S. Consumer Product Safety Commission: The Paper Tiger of American Product Safety," E. Marla Felcher, Ph.D., April 3, 2002.

[10] Ibid.

[11] The 6(b) rule was added as an amendment to the statute in 1981 to provide procedures for the release of information in CPSC's possession which might tend be damaging to a company

[12] Ibid.

[13] Ibid.

[14] U.S. Consumer Product Safety Commission 2003 Budget Request and Performance Plan Overview Statement. CPSC uses the number 23,000 deaths in its 2003 Budget Request and Performance Plan.

[15] U.S. Consumer Product Safety Commission, 2003 Budget Request and Performance Plan Overview Statement

[16] The Budget Request Document cited above says the current number is 31 million injuries per year.

[17] Ibid.

[18] Felcher, Op Cit.