Articles

FALLOUT FROM THE CONSUMER PRODUCT SAFETY
IMPROVEMENT ACT 2008 (CPSIA) IMPACTS THE HOME
ENTERTAINMENT INDUSTRY

At a time when the entire world is reeling from the economic crisis, the new requirements of the Consumer Product Safety Improvement Act (CPSIA) take effect. Manufacturers, importers and retailers are expected to comply with the new Congressionally-mandated laws for children's products and toys. The CPSIA defines a "children's product" as a consumer product designed or intended primarily for children 12 years of age or younger; and a "children's toy" as a product intended for a child 12 years of age or younger for use when playing, i.e., a product designed with inherent "play" value. The broad reaching scope of this law includes within its ambit such entertainment items as books, CD's, and Blu-ray's and DVD's with "G," "PG" and "PG-13" MPAA ratings.

Beginning February 10, 2009, children's products cannot be sold if they contain more than 600 parts per million (ppm) total lead. Certain children's products manufactured on or after February 10, 2009, cannot be sold if they contain more than 0.1% of certain specific phthalates or if they fail to meet new mandatory standards for toys.

Under the new law, children's products with more than 600 ppm total lead cannot lawfully be sold in the United States on or after February 10, 2009, even if they were manufactured before that date. The total lead limit drops to 300 ppm on August 14, 2009.

The new law requires that domestic manufacturers and importers test and certify that children's products made after February 10, 2009, meet all the new safety standards and the lead ban. Sellers of used children's products, such as thrift stores and consignment stores, are not required to certify that those products meet the new lead limits, phthalates standard or new toy standards.

The new safety law does not require resellers to test children's products in inventory for compliance with the lead limit before they are sold. However, resellers cannot sell children's products that exceed the lead limit and therefore should avoid products that are likely to have lead content, unless they have testing or other information to indicate the products being sold have less than the new limit. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties.

When the CPSIA was signed into law on August 14, 2008, it also became unlawful to sell recalled products. The selling of recalled products also could carry civil and/or criminal penalties.

In addition, for children's products manufactured as of August 14, 2009, the CPSIA also requires a permanent tracking label be affixed to the product so that: a) the manufacturer can ascertain the location, date of production and specific batch run number and source of the product; and, b) the consumer can ascertain the manufacturer, location and date of production. While this is technically feasible in most cases, it can also be very burdensome and expensive to accomplish, i.e., it may require some manufacturers to retool and redesign their equipment and processes. In the case of most home entertainment discs the requirements are particularly burdensome in that there is not enough space on the disc products for the tracking label. Moreover, if the disc product is packaged with a premium "toy" item, not only must the "toy" have a separate permanent tracking label, but the "toy" must also meet the lead and phthalates standards of the CPSIA.

Given the current practice of a short turnaround time on disc replication and shipment, compliance with the requirements of the CPSIA could cause significant delays and expense in the home entertainment supply chain.

Stay of Enforcement
On February 2, 2009, after receiving thousands of emails, letters, and requests for advisory opinions, the Consumer Product Safety Commission ("CPSC") voted unanimously (2-0) to issue a one year stay of enforcement for certain testing and certification requirements for manufacturers and importers of regulated products, including products intended for children 12 years old and younger under the CPSIA. Pursuant to the terms of the stay, manufacturers and importers of children's products will not need to test or certify to these new requirements, but will need to continue to meet the lead and phthalates limits, mandatory toy standards and other requirements. Thus, the stay appears to be more for the benefit of the CPSC, i.e., to allow it to complete its rulemaking and exemption procedures, rather than to give any significant relief from compliance to members of the industries effected by the CPSIA.

Summary
The CPSIA only applies to "children's products" and "children's toys."

The burden of testing the products is on the manufacturer or, if the product is made outside of the USA, on the importer. The CPSC is in the process of making rules governing the implementation of the CPSIA, testing, labeling, and exemptions. As these rules are enacted and interpreted some of the points and actions discussed in this article may be clarified and modified.

For additional information about the CPSIA visit the CPSC's website:
http://www.cpsc.gov/about/cpsia/cpsia.html.

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