Stephen Lamar, executive vice president of the American Apparel & Footwear Association, is testifying this morning before a Senate Commerce Committee’s subcommittee hearing, “Oversight of the Consumer Product Safety Commission Product Safety in the Holiday Season.”

Although speaking on behalf of the apparel and footwear industry, Steve’s prepared remarks are right in line with the points the National Association of Manufacturers has raised since the 2008 passage of the Consumer Product Safety Improvement Act (CPSIA). We’re glad he reminded the committee members of manufacturers’ diligent efforts to ensure the safety of consumer products, and of industry’s support for additional funding and staffing for the CPSC during the congressional debates.

Still, there can be no doubt the legislation does not comport with the real word. In other words, what an expensive, jobs-killing message. From Lamar:

It goes without saying that industry, consumer advocacy groups, bloggers, the media, and various other stakeholders across the spectrum have become more engaged than ever in product safety.

Regrettably, the legislation also mandated a series of controversial changes to the nation’s product safety rules that have created endless confusion, extensive burdens, huge costs, job losses, and irreparable damage to the business community. In many cases, these adverse consequences have come without improvements in product safety or public health. Among other things, the law mandated very strict lead and phthalate content restrictions. It required certifications of compliance for all consumer products for all safety standards, mandating third party testing for those standards involving children’s products (defined as 12 and under). It created a public database of product safety incidents. It authorized enforcement by state attorneys general and created whistleblower provisions. While many of these provisions reflect good intentions, the language of the CPSIA makes many of them difficult, if not impossible, to implement and enforce. Tight deadlines, rigid definitions, retroactively applied standards, requirements that do not reflect risk, and a “one size fits all approach” are all among the many problems that have made CPSIA implementation
challenging.

His testimony addresses one important issue that would make most people’s eyes glaze over, lead substrate. While “consumer activists” can speak broadly and high-mindedly about risks, threats and safety, manufacturers must tackle practical considerations making consumer products.

Steve closes with eight recommendations on product safety, many of which will require Congressional action in 2011.

Stephen Lamar’s prepared statement is here, and the hearing is being webcast here.

You often read about state attorneys general joining together to sue a company, in the process making headlines as “fighters” by wringing money out of a company. The lead AG’s office in one state does all the work — or farms out the litigation work to buddies in the trial bar — and the other attorneys general sign on for the publicity and political gains.

But sometimes attorneys general say “no.” Given an opportunity to tag along on an anti-business lawsuit with all the potential monetary and PR rewards, an attorney general will actually refuse the blandishments and AG peer pressure and say, “No, this suit does not serve the interest of the citizens of my state.”

Indiana’s attorney general, Greg Zoeller, is the latest state AG to make such a decision earlier this month when he declined to support a qui tam lawsuit against JM Eagle, the world’s leading manufacturer of PVC and plastic piping.

Qui tam is the Latin and legal term for whistleblower lawsuits, that is, a lawsuit by someone claiming to be revealing previously hidden accounts of wrongdoing. The term “whistleblower” generally has a positive connotation, but too often the lawsuits are filed by employees who have been fired or otherwise disciplined. Combine revenge with a profit motive — the Federal False Claims Act (FCA) allows the claimant to receive a portion of the money the government recoups — and you wind up with big incentives for frivolous or abusive litigation.

Such is surely the case with the litigation that Zoeller is refusing to support, a position shared by the AGs from California, Massachusetts and Florida. And their refusal is news.

The basics of the litigation are this: A disgruntled former employee, John Hendrix, sued the company after he was fired, claiming JM Eagle produced substandard pipe that led to burst water pipes around the country. Hendrix gained the institutional backing from the big qui tam, class-action law firm, Phillips and Cohen. The trial lawyers have been doing what trial lawyers do — recruiting more people to sue, ginning up PR, and working to damage the company’s reputation.

But JM Eagle is fighting back aggressively, refuting the lawsuit’s claims and filing for the suit’s dismissal.
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Today the House of Representatives is considering a vote on the Offshore Oil and Gas Worker Whistleblower Legislation Act (H.R. 5851), a bill that was sped to the floor this week. No committee hearing, no mark-up, no careful consideration and no debate other than a few minutes on the floor. So what is this bill and what does it do? The bill expands the OCS Lands Act to provide new whistleblower protections for all employees of any company engaged in supporting or carrying out exploration of oil and natural gas in our nation’s Outer Continental Shelf. However, this bill goes far beyond affirming a process for employees to go to the Department of Labor to seek protection from retaliation, creating an entirely new mechanism that allows employees to sue their employers in district court.

As we’ve noted previously, few whistleblower claims put forward that actually have merit. The language of this legislation will significantly increase the threat of litigation for a wide array of employers, suits from a new universe of employees far beyond oil rig workers.

Many of the bill’s proponents assert that oil rig workers now have no whistleblower protections. And in truth, there are many questions as to the application of existing whistleblower protections. As Congressman John Kline (R-MN) observed on the House floor:

Safety on offshore oil rigs is overseen by the Coast Guard and the Bureau of Ocean Energy Management, unlike most workplaces, where safety is overseen by OSHA. As a result, it is not clear whether these workers are covered by the OSH Act’s whistleblower protections or any of the 17 other statutes enforced by OSHA’s Whistleblower Protection Program. Some might argue oil rig workers are covered by the Maritime Transportation and Security Act, while others point to a 1983 agreement in which OSHA retained whistleblower authority for these workers.

More importantly, as Rep. Kline notes, these questions could be answered if the bill were to go through regular order, with its committee hearings, research, testimony and inquiry. Unfortunately, the bill and its hastily cobbled together provisions are being rushed to the floor for a vote.

Much news coverage this morning on the conference agreement on H.R. 4040, the expanded authority for the Consumer Product Safety Commission.

Most of the news reports we’ve seen focus on the safety of toys, the news regulations affecting children’s products, and phthalates — the plastic softener being banned despite the lack of scientific evidence of its dangers. All important, but there’s much, much more done in the 162-page conference report. Politico’s summary is good:

“The Consumer Product Safety Commission has been a neglected agency for too many years, but this legislation puts an end to that neglect,” Senate Commerce, Science and Transportation Committee Chairman Daniel Inouye (D-Hawaii) said in announcing the pact, which could move quickly through Congress before lawmakers go home for the August recess.

The measure includes new whistleblower protection for employees of manufacturers and distributors and creates a searchable databank allowing consumers to check not only product recalls but also other complaints.

Democratic Sen. Mark Pryor, a former Arkansas attorney general who played a major role in managing the debate on the bill, said the legislation spells out more clearly the authority of state attorneys general to enforce CPSC rulings.

We know the conference committee worked hard, made many compromises, tried to strike a balance, etc. But, boy, the whistleblower, the complaint database, and perhaps expanded AGs’ authority are all provisions that will invite a flood of litigation and, in many cases, erroneous and malicious complaints that will raise costs to manufacturers and consumers and do little if anything to improve product safety. 

Sure, trial lawyers will enjoy a new cash flow, but the bad complaints will drown out the good ones. (The database provisions apparently has some additional protections/screening devices written in to improve on the Senate version. We’re especially worried about the whistleblower provisions, for which no one made a compelling argument.)

As for the political reality? Well, here’s the Washington Post’s headline: “Lawmakers Agree to Ban Toxins in Children’s Items.”

And here’s the ranking House Republican on the conference committee, from Politico:

“One of the roles of government is to get between kids and the sorts of hazards that are well beyond parents who aren’t engineers and chemists with laboratories at their disposal,” said Rep. Joe Barton (R-Texas), one of the lead negotiators for the House. “This reauthorization gives the CPSC more teeth and a deeper bite, and makes it dramatically more certain that toys aren’t tested for safety by kids on the living room floor before they’re tested in a lab by experts.”

It’s a big conference report, not yet filed, and interested parties are all reviewing the provisions. More as it develops.