It might be hard to call the many recent reports of record fines from the National Highway Traffic Safety Administration (NHTSA) or the Consumer Product Safety Commission (CPSC) “news”, so routine have they recently become.  In 2014 alone, NHTSA issued more than $126 million in civil penalties, exceeding the total amount collected by the agency during its forty-three year history.  As NHTSA trumpets its “success” and regulators are calling on Congress to increase maximum fines  dramatically, one wonders when those civil penalties cross the line into criminal territory.

The Supreme Court laid out a seven-factor test for determining whether statutory penalties are civil or criminal in Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1963).  That case involved a dual Mexican-U.S. citizen who left the United States to avoid World War II military service.  The Court held that depriving him of his citizenship as a penalty for leaving the country constituted a criminal penalty that could not be imposed absent constitutional safeguards.
Continue Reading When do Civil Fines by NHTSA or the CPSC Become Criminal?

The Consumer Product Safety Commission has proposed a permanent ban on certain phthalates in children’s toys and child care articles. Phthalates, a family of chemical plasticizer, give plastic products more flexibility, transparency, durability, and longevity.  They can be found in a number of everyday products, including toys and furniture. Phthalate exposure has been associated with birth defects, asthma, male reproductive issues, and early female puberty.  The proposed ban would add  to the list of phthalates already banned by the Consumer Product Safety Improvement Act (“CPSIA”).

The CPSIA currently prohibits manufacturers from using certain phthalates in children’s products.  Under the exising rules, manufacturers are not allowed to use greater than 0.1 percent individually of the phthalates DEHP, DBP, and BBP in children’s toys and certain child care articles.  “Children’s toys” refers to consumer products intended for children 12 years and younger for recreational use. “Child care articles” are consumer products manufactured for children three years or younger and made to assist in sleeping, feeding, sucking, or teething.
Continue Reading CPSC Proposes Expansion of Ban On Substance Used in Children’s Toys

“Made in the USA” does not necessarily mean the same thing outside of California.  In a recent decision, Paz v. AG Adriano Goldschmied Inc., a federal judge refused to dismiss a class action “Made in the USA” lawsuit, based on California’s strict regulation about the use of “Made in the USA” labels, suggesting that retailers may need to use different labels on the same goods depending on whether they are being sold inside or outside of California.

The issue stems from the fact that California is the only state in the union with its own statute governing the use of “Made in the USA” labels on consumer products.  Most states use the Federal Trade Commission’s (FTC) regulation, which requires “all or virtually all” of the product be made in the United States to qualify for a “Made in the USA” label.  The FTC regulation allows small amounts of foreign parts to be included as long as the product’s final assembly or processing happens in the U.S.  In contrast, California’s stricter regulation prohibits use of the label if the merchandise “or any article, unit, or part thereof, has been entirely or substantially made, manufactured or produced outside the United States.”
Continue Reading “Made in the USA” Continues to be Fodder for Class Action Lawsuits