NCPA - National Center for Policy Analysis


March 4, 2008

Congress is back shooting marbles over consumer product safety. With consumers shaken up by tainted Chinese imports, many companies have already been instituting internal safety checks -- but the Senate wants to help the lawyers too, says the Wall Street Journal.

Under the latest version of a bill sponsored by Arkansas Democrat Mark Pryor, the Consumer Product Safety Commission is in for a major expansion:

  • The bill would more than double the agency's budget by 2015, to $155 million from $63 million.
  • Also skyrocketing are civil penalties faced by companies in violation of consumer safety rules; those would rise to $250,000 from $8,000 for each incident, with a maximum of $20 million for multiple violations.
  • The bill would also distribute enforcement power among the nation's dozens of state Attorneys General.
  • In lieu of consistent national standards, the newly empowered state AGs would be given the green light to file lawsuits and enforce rules against manufacturers based on their own interpretation of consumer product safety laws.

All this risks creating a new set of incentives for assorted plaintiffs, with the trial lawyers right behind them, says the Journal.  And under a whistleblower provision in the Senate bill, employees could keep from being fired merely by claiming knowledge of a product safety violation.  In some cases, they could also sue their employer for up to $250,000 in punitive damages.

In time, companies would be gazing at a laundry list of separate state rules and prohibitions, says the Journal.  A toy that might pass scrutiny in Georgia could get red-flagged by regulations in Florida.  This might be a manageable hurdle for big national retailers which can afford lots of lawyers, but small and medium-size businesses will likely find it harder to navigate multiple enforcement regimes.

Source: Editorial, "Lawyers 'R' Us," Wall Street Journal, March 4, 2008.

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