Capital Briefing: January 13, 2011

A Publication of the National Association of Manufacturers

January 13, 2011


Focus: CPSC to Roll out Product Safety Database

The Consumer Product Safety Commission (CPSC) launched its education efforts this week for the Publicly Available Consumer Product Safety Information Database that will go live this March. The Consumer Product Safety Improvement Act (CPSIA) of 2008 requires the CPSC to establish and maintain a publicly available, searchable database on the safety of consumer products. The CPSC adopted its final rule on the database on November 24.

The NAM believes the rule makes it more difficult for manufacturers to effectively defend their reputations and will not improve product safety for children.

This database has alarmed manufacturers, who fear that it will become a poorly monitored site that encourages reputation-harming complaints. Unfortunately, the new rule invites the gaming of the database to the detriment of manufacturers of safe products, even to the point of expanding the definition of "consumer" and "public safety entities" those who can register an online complaint to include trial lawyers and activist groups.

"This can create a database full of misinformation that will be of less use to the consumer," said Rosario Palmieri, vice president for infrastructure, legal and regulatory policy at the NAM. The Commission will include a disclaimer on the database noting that the CPSC cannot guarantee the accuracy or completeness of any of the complaints. However, because the database will be managed by the federal government, the information it contains will have significant standing. Palmieri added, "When the CPSC as a government organization publishes this information . . . it gives it weight and credibility."

Extensive debate took place both in Congress and within the CPSC on the appropriate types of "reporters" to include in the database which individuals or groups would be recognized for registering legitimate complaints. The CPSC's final rule acknowledged that Congress provided an exhaustive list of reporters but expanded the definitions of "consumers" and "public safety entities" beyond their clear public meaning and the intent of the drafters of the legislation. As a result, the database will be filled with spurious reports inspired by political or financial motives rather than safety.

"We're not opposed to a database," said Palmieri. "We're opposed to a database that's full of inaccurate information."

Congress struck an appropriate balance in the legislation between the speed of publication of reports and the desire for accuracy as well as the protection of confidential business information. The final rule provides for no such balance and creates a default for immediate publication before any meritorious claims regarding trade secrets or material inaccuracy are resolved.

In addition, sufficient clarity is still lacking regarding the enforcement of the CPSC's testing and certification requirements of the lead substrate standard. The NAM's CPSC Coalition and numerous other business groups sent a letter to the Commission on January 10 requesting a further extension of the stay set to expire on February 10, 2011 delaying enforcement of these requirements.

Many companies are uncertain about what rules to implement once the stay expires. The few weeks remaining before the stay's expiration leave insufficient time for the Commission "to issue the final rule, clarify industry's compliance questions and for our members' supply chains to absorb and incorporate those new rules."

The letter adds, "Without clarity, companies have been left navigating diverse, and sometimes contradictory, interpretations on how the testing requirements apply to their products."

Consumer product safety is of the utmost importance to U.S. manufacturers. Congress should ensure that proposals to improve the CPSC continue to focus on safety, not on increasing litigation or establishing unnecessary mandates. American consumers need legislation that bolsters CPSC resources to help the Commission fulfill its mission effectively.

The NAM is committed to working toward definitive, clear and comprehensive rules that all companies can realistically be expected to comply with, combined with a predictable and transparent enforcement regime.

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Top Story


National Commission Releases Oil Spill Report. The National Commission established by President Obama to examine the Deepwater Horizon oil spill released its final report on January 11. The nearly 400-page report provides a number of recommendations, including: 1) increasing the liability cap; 2) creating a new and independent safety agency housed within the Department of Interior (DOI); 3) extending the amount of time the DOI has for reviewing offshore exploration plans; and 4) providing National Oceanic and Atmospheric Administration scientists with a greater role in ensuring that leasing decisions protect the environment, among others. Regarding the liability cap increase, the Commission did not provide an actual number, leaving this task to Congress. The current liability for an offshore drilling accident is capped at $75 million, which Congress had tried unsuccessfully to increase to $10 billion in its previous sessions. The NAM will continue to monitor congressional action regarding this cap increase. Details : Mahta Mahdavi , (202) 637-3176.

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Trade Policy

NAM's Timmons Participates in Launch of New Trade Finance Programs. NAM Executive Vice President and incoming President Jay Timmons, along with Export-Import (Ex-Im) Bank Chairman and CEO Fred Hochberg, Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk, among others, held a press conference January 13 to announce new programs to finance U.S. companies' exports to foreign markets. The NAM called for additional export financing in its "Blueprint to Double Exports in Five Years," released in July, and has worked closely with Ex-Im to design new programs that support U.S. manufacturers' sales abroad. One of the programs represents the innovative approach of financing working capital for small companies that do not export directly but do so as part of the supply chain of larger exporters. Details : Pat Mears , (202) 637-3141.

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Small and Medium Manufacturers Update

Looking for a Way to Promote Your Products Worldwide? Are you seeking international distributors, representatives, or buyers for your products? The U.S. & Foreign Commercial Service is offering special advertising rates for NAM members to promote their products through the U.S. Department of Commerce's official export promotion magazine, Commercial News USA . Click here for details.

NAM-U.S. & Foreign Commercial Service "Exporting to Mexico" Webinar. If you missed the NAM-U.S. & Foreign Commercial Service "Exporting to Mexico" Webinar on January 12 and want to learn about export opportunities in Mexico, click here to review the presentations at your desk. Details : Janice Corbett , (202) 637-3407.

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Manufacturers in the Courts

NAM Supports More Challenges to EPA Regulations. The NAM has filed amicus briefs in two cases challenging the Environmental Protection Agency's (EPA) Clean Air Act regulations. In one case, the state of Texas sued to block the EPA from taking over its permitting powers with respect to the construction or modification of large stationary sources that emit greenhouse gases in the state. The NAM urged the court to issue an emergency stay of the EPA's action, but on January 12, the Court, while allowing the litigation to proceed, declined to stop this latest EPA tactic. See Texas v. EPA (D.C. Cir.). In another case, the NAM and others sought to file a brief in a challenge to two new EPA regulations governing emissions that occur during the startup, shutdown or malfunction of process equipment or pollution control equipment at Portland cement plants. The EPA plans to apply its novel interpretations in this industry to a variety of other sectors, including chemical plants, pulp and paper mills, steel pickling operations and wood furniture manufacturing. The case is expected to focus on the EPA's requirements for installing "maximum achievable control technology" (MACT) at manufacturing facilities. See Portland Cement Ass'n, Inc. v. EPA (D.C. Cir.). Details : Quentin Riegel , (202) 637-3058.

NLRB Considers Limiting Property Rights to Favor Union Agents. The NAM and many other national, state and local business organizations joined together on January 7 under the Coalition for a Democratic Workplace to urge the National Labor Relations Board (NLRB) to allow companies to prevent nonemployee union members from handing out literature that is detrimental to those companies. Companies should be able to distinguish between some handbillers, such as charitable solicitors, and others, like those engaged in harmful boycott activities, when deciding whether to allow access to private property. See Roundy's Inc. (NLRB). Details : Quentin Riegel , (202) 637-3058.

Product Liability Cases Bring Mixed Results. Two recent decisions highlight the best and the worst of judicial power. In one case, the Fourth Circuit ruled that CSX Transportation, Inc. may proceed with its fraud and conspiracy law suit against a law firm and a radiologist for fake asbestos screenings and manufactured injury claims. The NAM filed a brief supporting this result, as part of our continuing efforts to challenge the entrepreneurial model developed by plaintiffs' lawyers to pursue questionable asbestos claims in jurisdictions that favor plaintiffs. See CSX Transportation, Inc. v. Gilkison (4th Cir.). In another case, the Nevada Supreme Court allowed a trial court to eliminate all of a manufacturer's legal defenses in a lawsuit where some discovery errors, called "fairly minor" by a dissenting judge, occurred. Eliminating all defenses is a death penalty in civil litigation, and Nevada's rule promises to make it a magnet jurisdiction for product liability litigation. See Bahena v. Goodyear Tire & Rubber Co. (Nev.). In other action, the NAM supported an appeal of the first asbestos personal injury claim in Michigan to go to verdict in more than 10 years, arguing that the trial court improperly bundled together dissimilar cases, allowed unreliable screening testimony, and hastily selected one of 95 cases to proceed to trial without an opportunity for meaningful discovery. See Avram v. McMaster-Carr Supply Co. (Mich. Ct. App.). Details : Quentin Riegel , (202) 637-3058.

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Other News

Don't Delay - Order Your Copies of the NAM 112th Congress Directory Today. The 112th Congress brings many new faces to Washington. How do you and your team plan to stay on top of all the changes? The NAM's 112th Congress Directory gives you accurate information to effectively communicate with Congress. Available in March 2011, the new Directory contains information about the Administration, new members of Congress, updated contact information, color photos, key staff, updated committee assignments, NAM 111th Congress Voting Record percentages and much more. As an NAM member, you pay just $13.50 each for 1-10 copies, plus shipping and handling. Quantity discounts are also available. Reserve your copies online at www.nambooks.com or by phone at (800) 637-3005 using promotion code nam2011. Be sure to order by the January 31, 2011 deadline. Details : Dan Akman , (202) 637-3196.

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Questions or comments? Please contact Clare James Johnson at cjohnson@nam.org .


President: John Engler
Executive Vice President:
Jay Timmons Chief Operating Officer: LeAnne Wilson
Senior Vice President, Communications: Maureen Davenport

Managing Editor: Clare James Johnson

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