[Federal Register Volume 71, Number 102 (Friday, May 26, 2006)]
[Proposed Rules]
[Pages 30350-30352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-4888]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1115


Substantial Product Hazard Reports

AGENCY: Consumer Product Safety Commission.

ACTION: Proposed revision to interpretative rule.

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SUMMARY: Section 15(b) of the Consumer Product Safety Act, 15 U.S.C. 
2064(b), requires manufacturers, distributors, and retailers of 
consumer products to report potential product hazards to the Consumer 
Product Safety Commission. The Commission publishes proposed revisions 
to its interpretative rule advising manufacturers, distributors, and 
retailers how to comply with the requirements of section 15(b). The 
proposed revisions identify certain factors the Commission and staff 
consider when assessing whether a product is defective or not. The 
proposed revisions also clarify that compliance with voluntary or 
mandatory product safety standards may be considered by the Commission 
in making certain determinations under section 15(b).\1\ In addition, 
the Commission may consider the adoption of an interpretative 
regulation related to the statutory factors for the assessment of civil 
penalties pursuant to section 20, CPSA (15 U.S.C. 2069(b), (c)). A 
separate Federal Register notice, if approved, will be issued for 
public comment.
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    \1\ Commissioner Thomas H. Moore filed a statement which is 
available from the Office of the Secretary or on the Commission's 
Web site at http://www.cpsc.gov.

DATES: The Office of the Secretary must receive written comments not 
later than June 26, 2006.

[[Page 30351]]


ADDRESSES: Written comments should be captioned ``Substantial Product 
Hazard Reports'' and e-mailed to the Office of the Secretary at [email protected]. Written comments may also be sent to the Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Bethesda, Maryland 20814 or by facsimile at (301) 504-0127.

FOR FURTHER INFORMATION CONTACT: John Gibson Mullan, Assistant 
Executive Director, Compliance and Field Operations at (301) 504-7626.

SUPPLEMENTARY INFORMATION: To provide further guidance, clarity and 
transparency to the regulated community on reporting obligations under 
section 15(b) of the Consumer Product Safety Act (CPSA), 15 U.S.C. 
2064(b), the Commission proposes revisions to its interpretative rules 
regarding reporting of possible substantial product hazards. Section 
15(b) of the CPSA requires that every manufacturer (including an 
importer), distributor or retailer of a consumer product who obtains 
information which reasonably supports the conclusion that its product 
fails to comply with an applicable consumer product safety rule or with 
a voluntary consumer product safety standard upon which the Commission 
has relied under section 9 of the CPSA, or contains a defect which 
could create a substantial product hazard as defined in section 
15(a)(2) of the CPSA, or creates an unreasonable risk of serious injury 
or death, shall immediately inform the Commission of such failure to 
comply, of such defect, or of such risk, unless the manufacturer, 
distributor or retailer has actual knowledge that the Commission has 
been adequately informed. In 1978, the Commission first published an 
interpretative rule, 16 CFR part 1115, which explained the section 
15(b) reporting requirement and provided guidance on filing section 
15(b) reports. In this notice the Commission proposes revisions to the 
interpretative rule to clarify factors relevant to section 15(b) 
reporting determinations.

A. Section 1115.4 Defect

    The first revision clarifies the Commission's definition of 
``defect'' by adding four additional criteria Commission staff use to 
evaluate whether a risk of injury is the type of risk that will render 
a product defective, thus possibly triggering a reporting obligation 
under section 15(b). The rule currently states that in determining 
whether the risk of injury associated with a product is the type of 
risk which will render a product defective, the Commission and staff 
consider, as appropriate: The utility of the product involved; the 
nature of the risk of injury which the product presents; the necessity 
for the product; the population exposed to the product and its risk of 
injury; the Commission's own experience and expertise; the case law 
interpreting Federal and State public health and safety statutes; the 
case law in the area of products liability; and other factors relevant 
to the determination. The proposed revision adds the following factors: 
The obviousness of such risk; the adequacy of warnings and instructions 
to mitigate such risk; the role of consumer misuse of the product, and 
the foreseeability of such misuse.
    The determination of whether a product presents a risk of injury 
that would render it defective is a threshold issue in evaluating 
reporting obligations under section 15(b) of the CPSA and is one of the 
most critical determinations a company is required to make under the 
CPSA. A firm must report if it obtains information which reasonably 
supports the conclusion that a product it manufactures and/or 
distributes contains a defect which could create a substantial product 
hazard. 15 U.S.C. 2064(b)(2). In determining whether a product contains 
a defect that presents a substantial risk of injury, the Commission has 
explained that certain products may not be defective although they 
present a risk of injury because that risk is outweighed by the 
usefulness of the product and its ability to function properly. The 
classic example is a knife.
    The regulatory criteria for evaluating whether a product presents a 
risk of injury that may render it defective have been in effect since 
1978. In the more than twenty years since then, the Commission and 
staff have evaluated hundreds of products using, as appropriate, these 
criteria. The Commission has concluded, based on experience and 
practice in applying the criteria, that the four proposed additional 
factors--the obviousness of such risk; the adequacy of warning and 
instructions to mitigate such risk; the role of consumer misuse of the 
product and the foreseeability of such misuse--will enable a better 
analysis of whether the risk of injury associated with a product is the 
type of risk which will render the product defective.

B. Section 1115.12(g)(1)(ii) Number of Defective Products Distributed 
In Commerce

    The Commission also clarifies that in evaluating the substantial 
risk of injury involving a particular consumer product, it recognizes 
that the risk of injury from a product may decline over time as the 
number of products being used by consumers decreases. While there may 
be other factors unique to a particular product which influence the 
rate of the reduction, if any, of injury risk, Commission staff 
believes that this factor is reasonable and appropriate to consider 
when evaluating the impact of the number of defective products 
distributed in commerce, authorized by 16 CFR 1115.12(g)(1)(ii), when 
undertaking a substantial product hazard determination.

C. Section 1115.8 Compliance With Product Safety Standards

    The proposed revisions also add a new Sec.  1115.8, ``Compliance 
with Product Safety Standards.'' This section is intended to further 
explain how the Commission views compliance with applicable voluntary 
or mandatory standards, particularly in the context of decisions under 
section 15(b) of the CPSA.
    The Commission strongly encourages all firms to comply with 
voluntary consumer product safety standards and advises that where 
appropriate, compliance or non-compliance with such standards may be 
considered by the Commission and staff in exercising its authority 
under the CPSA, including when making determinations under section 15. 
The section also provides that compliance or non-compliance with 
applicable mandatory consumer product safety standards may be 
considered by the Commission and staff in making relevant 
determinations and exercising relevant federal authorities under the 
CPSA and other federal statutes including when making corrective action 
determinations under section 15 of the CPSA.
    The Commission is providing this guidance to emphasize that 
compliance with voluntary or mandatory standards are relevant 
considerations to the exercise of its authorities, particularly in 
evaluating section 15(b) obligations. The provision on voluntary 
standards is added to emphasize that when the Commission staff 
preliminarily determines whether a product presents a substantial 
product hazard under section 15(b) of the CPSA, the Commission staff 
will consider compliance with any relevant voluntary standard as part 
of that determination. Therefore, by this provision the Commission 
urges firms to consider compliance with voluntary standards in 
evaluating whether or not a substantial product hazard should be 
reported to the Commission.
    In the context of mandatory standards, the Commission emphasizes

[[Page 30352]]

that the Commission will consider such compliance when making relevant 
determinations and exercising relevant authorities under the CPSA and 
other federal statutes. In particular, a product's compliance with a 
mandatory standard will be considered in determining whether and to 
what extent corrective action is necessary. This policy statement is 
not intended to reduce the volume of reporting to the Office of 
Compliance.

List of Subjects in 16 CFR Part 1115

    Administrative practice and procedure, Business and Industry, 
Consumer protection, Reporting and recordkeeping requirements.

    Accordingly, 16 CFR part 1115 is proposed to be amended as follows:

PART 1115--SUBSTANTIAL PRODUCT HAZARD REPORTS

    1. The authority citation for part 1115 continues to read as 
follows:

    Authority: 15 U.S.C. 2061, 2064, 2065, 2066(a), 2068, 2070, 
2071, 2073, 2076, 2079 and 2084.

    2. In Sec.  1115.4, amend the concluding text by adding a new 
phrase after the phrase, ``the population exposed to the product and 
its risk of injury;'' to read as follows:


Sec.  1115.4  Defect.

    * * * the obviousness of such risk; the adequacy of warnings and 
instructions to mitigate such risk; the role of consumer misuse of the 
product and the foreseeability of such misuse;'' * * *
    3. Section 1115.8 is added to read as follows:


Sec.  1115.8  Compliance with Product Safety Standards.

    (a) Voluntary Standards. The CPSA and other federal statutes 
administered by the Commission generally encourage the private sector 
development of, and compliance with voluntary consumer product safety 
standards to help protect the public from unreasonable risks of injury 
associated with consumer products. To support the development of such 
consensus standards, Commission staff participates in many voluntary 
standards committees and other activities. The Commission also strongly 
encourages all firms to comply with voluntary consumer product safety 
standards and considers, where appropriate, compliance or non-
compliance with such standards in exercising its authorities under the 
CPSA and other federal statutes, including when making determinations 
under section 15 of the CPSA. Thus, for example, whether a product is 
in compliance with applicable voluntary safety standards may be 
relevant to the Commission staff's preliminary determination of whether 
that product presents a substantial product hazard under section 15 of 
the CPSA.
    (b) Mandatory Standards. The CPSA requires that firms comply with 
all applicable mandatory consumer product safety standards and to 
report to the Commission any products which do not comply with either 
mandatory standards or voluntary standards upon which the Commission 
has relied. As is the case with voluntary consumer product safety 
standards, compliance or non-compliance with applicable mandatory 
safety standards may be considered by the Commission and staff in 
making relevant determinations and exercising relevant authorities 
under the CPSA and other federal statutes. Thus, for example, while 
compliance with a relevant mandatory product safety standard may not, 
of itself, relieve a firm from the need to report to the Commission a 
product defect that creates a substantial product hazard under section 
15 of the CPSA, it will be considered by staff in making the 
determination of whether and what type of corrective action may be 
required.
    4. Section 1115.12 is amended by adding a new sentence at the end 
of paragraph (g)(1)(ii) to read as follows:


Sec.  1115.12  Information which should be reported; evaluating 
substantial product hazard.

* * * * *
    (g) * * *
    (1) * * *
    (ii) * * * The Commission also recognizes that the risk of injury 
from a product may decline over time as the number of products being 
used by consumers decreases.
* * * * *

    Dated: May 22, 2006.
Todd A. Stevenson,
Secretary , Consumer Product Safety Commission.
[FR Doc. 06-4888 Filed 5-25-06; 8:45 am]
BILLING CODE 6355-01-P