[Congressional Record Volume 146, Number 68 (Tuesday, June 6, 2000)]
[Extensions of Remarks]
[Pages E900-E901]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  CONSUMER PRODUCT SAFETY COMMISSION ENHANCED ENFORCEMENT ACT OF 2000

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                         Tuesday, June 6, 2000

  Mr. MARKEY. Mr. Speaker, I rise today to introduce the ``Consumer 
Product Safety Commission Enhanced Enforcement Act of 2000'', a bill 
intended to improve consumer safety by increasing compliance with 
existing requirements to report hazards when they are known. The 
legislation would increase the civil and criminal penalties that the 
CPSC can impose upon firms that do not inform the Commission when they 
have sold a product that could pose a substantial hazard to consumers. 
The legislation would also help make some product recalls more 
effective.
  The CPSC is the government agency that makes sure cribs, toys, and 
other products in your home are safe, and recalls them when they're 
not. The CPSC oversees the safety of 15,000 different kinds of consumer 
products. Each year there are more than 29 million injuries and about 
22,000 deaths related to consumer products.
  Current law provides that if companies have information that one of 
their products could have a serious safety defect, they are required to 
report that to the government. Unfortunately, some compames are not 
obeying the law. The CPSC estimates that in half of the most serious 
cases they deal with, the company has failed to report injuries. 
Instead, the information comes to the attention of the agency from its 
own investigators, from consumers, or tragically, from hospital 
emergency room reports or death certificates.
  When companies don't report, dangerous products that could have been 
recalled or modified remain on store shelves. They continue to be sold 
and they stay in consumers' homes where they can cause serious injury.
  Some consumers pay a very high price for a company's failure to 
report.
  For example, a 3-year-old girl died while playing on her swing. Her 
grandfather was cutting weeds in the yard using a weed trimmer with a 
replacement head that was made with a metal chain. The end link broke 
off the chain and it flew through the air as if it were a piece of 
deadly shrapnel--travelling 240 miles an hour. It hit his granddaughter 
in the temple, penetrated her skull and killed her.
  The company didn't tell the CPSC about this death, nor did they tell 
the CPSC about the 40 other serious injuries from chains breaking. The 
CPSC was forced to do its own investigation and recalled the product 
nationwide in May.
  Such failures to report result in tragic losses of life and limb that 
are avoidable and preventable if compliance with reporting were higher.
  Under current law, the CPSC can fine companies for violating the law, 
but the amount of the fine is limited by statute to a level that does 
not sufficiently deter violations. Under current law, companies can 
face criminal penalties for violating consumer product safety laws, but 
they are only misdemeanors. Under current law, in any recall, companies 
provide a repair, replacement or refund for defective products. In most 
cases, the CPSC can find a good solution to the problem for consumers. 
But in rare cases where the product is older and has been on the market 
for many years, the company sometimes elects a refund that is much too 
small to even catch consumers' attention, so the dangerous product 
stays on the market.
  To remedy these deficiencies, the legislation would: Eliminate the 
cap on civil penalties for violations of product safety laws.
  Under current law, the CPSC cannot assess more than $1,650,000 for a 
related series of violations against a company that knowingly violates 
consumer product safety laws. The legislation would eliminate this 
maximum civil penalty. Many of the cases in which the Commission seeks 
civil penalties involve very large corporations that can easily absorb 
a $1.65 million fine. More substantial civil penalties would provide a 
needed incentive for those companies to notify CPSC of defective 
products so that the agency can take timely action to protect 
consumers. Other agencies have civil penalty authority with no ``cap'' 
on the amount of the penalty for a related series of violations, 
including the Federal Trade Commission.
  Increase the penalty for a ``knowing and willful'' criminal violation 
of product safety laws from a misdemeanor to a felony and eliminate the 
requirement that the agency give notice to the company that is 
criminally violating the law.

[[Page E901]]

  The legislation would increase the potential criminal penalties for a 
``knowing and willful'' violation of consumer product safety laws from 
a misdemeanor (up to one year in prison) to a felony (up to three years 
in prison). It would also increase the maximum monetary criminal 
penalty in accordance with existing criminal laws. These heightened 
penalties are commensurate with the seriousness of product safety 
violations, which can result in death or serious injury to children and 
families. Other agencies have authority to seek substantial (felony) 
criminal penalties for knowing and willful violations of safety 
requirements, including the Food and Drug Administration for 
prescription drug marketing violations and the Department of 
Transportation for the transportation of hazardous materials.
  The legislation would also eliminate the requirement that the 
Commission give notice of noncompliance before seeking a criminal 
penalty for a violation of the Consumer Product Safety Act. The notice 
requirement makes it all but impossible to pursue a criminal penalty 
for violations of the Act, even in the most serious cases. The threat 
of a criminal felony prosecution would create an additional strong 
incentive for companies to report product defects to the Commission.
  Give CPSC the authorily to overrule the remedy chosen by a 
manufacturer for fixing a defective product in a product recall when 
the Commission determines that an alternative would be in the public 
interest.
  Under current law, a company with a defective product that is being 
recalled has the right to select the remedy to be offered to the 
public. The company can choose repair, replacement, or refund ``less a 
reasonable allowance for use.''
  The legislation would continue to permit the company to select the 
remedy in a product recall. However, the legislation would allow the 
Commission to determine (after an opportunity for a hearing) that the 
remedy selected by the company is not in the public interest. The 
Commission may then order the company to carry out an alternative 
program that is in the public interest.
  Sometimes companies choose a remedy in a recall that does not further 
public safety. For example, if a manufacturer chooses to refund ``less 
a reasonable allowance for use'' the purchase price of a product that 
has been on the market for a long time, the amount due consumers may be 
so small that there is no incentive for the consumer to take advantage 
of the recall. This is especially true where the hazardous product is 
still useful to the consumer and the cost of replacement is 
substantial. Companies may choose an insubstantial refund even though 
people have been at risk for a number of years, thousands of products 
are still in use, and injuries are continuing to occur. In this 
example, a refund would do little, if anything, to stop consumers from 
using the dangerous product and the public interest would not be 
served.

                          ____________________