How To Comply With Federal Law, 50 State Laws, Political Subdivision Laws and Tribe Laws

by Donna Maria on August 14, 2010 · View Comments

Earlier this week, the State of California, through California Attorney General Edmund G. Brown Jr., filed suit against the makers, manufacturers and distributors of children’s bounce houses. The bounce houses, like the one pictured here, are alleged to contain lead components in violation of the Safe Drinking Water And Toxic Enforcement Act of 1986, otherwise knowns as California’s Proposition 65.

WWC Fall Family Fest

The California law holds companies liable if they “knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual.” Under the law, the State of California has established a list of chemicals that fit this definition. According to the complaint, lead was added to the list for reproductive toxicity on February 27, 1987, and added to the list for cancer on October 1, 1992.

The lead in bounce houses allegedly comes form the polyvinyl chloride (PVC) material with which the bounce houses are made. The bounce houses are being accused of failing to properly warn consumers of the dangers complained of.

The suit incorporates by reference the lead levels established by the federal government under the Consumer Products Safety Improvement Act of 2008. Specifically, the products are alleged to contain more than 300 parts per million (ppm) of lead, making them a “banned hazardous product” under the Federal Hazardous Substances Act. The CPSIA says it is illegal to sell anything deemed “hazardous” under FHSA.

The suit seeks damages in the amount of $2,500 per day for each violation, and other unspecified remedies as well as “other remedies.” You can see a copy of the complaint here (PDF).

One Product, Two (Or More) Laws

What’s most interesting to me for purposes of this post is that Section 218 (see it here, PDF) of CPSIA specifically grants State Attorneys General the right to sue in their states for violation of CPSIA. Here’s how this pans out:

  1. California law says that lead is toxic, and a product cannot expose people to it unless they are warned of the alleged danger;
  2. Federal law says that lead is toxic and a product cannot contain it in amounts above 300 ppm.

If I’m reading this correctly, both laws say that lead is toxic, but only one sets a standard for how much of it is acceptable in the products at issue. And since the State Attorney General can bring an in federal court citing both laws, we have a situation where the product manufacturer must be aware of and comply with both laws.

That’s challenging enough for a small business owner, but remember that, in this case, the state law does not contain a ppm requirement that differs from the federal one.

Compare that situation with what is called for in Section 621 of HR 5786 (PDF), a “Savings Clause” stating that states can pass their own laws over and above what the federal laws says. In other words, states can set a level that is more stringent than the federal government level.

Consider This Hypothetical

Let’s say you make lip balm with organic lavender essential oil, organic extra virgin olive oil and beeswax harvested by a local beekeeper.

If the federal government says there can be no more than 500 ppm of constituentX in a cosmetic, and constituentX is contained in the lavender essential oil you use (and you know this because you either tested it or your supplier told you), you comply with that.

But next year, StateX (where you sell your products) says there can be no more than 100 ppm of constituentX in that same product, contsitutenX being contained in lavender oil you use, here’s a partial list of what HR 5786, as drafted, will require you to do:

  1. reformulate the product to remove constituentX or get it down to the acceptable ppm
  2. test the product a time or two as it’s being reformulated so that it meets the acceptable ppm for constituentX
  3. update your registration to reflect the new formula (Section 612(c)(E)
  4. update your list of suppliers if the ingredients change (which they obviously will) (Sectiopn 612(c)(1)(E)
  5. provide the FDA with any new data you have come across concerning the constituentX (Section 614(a)(1)(b)
  6. respond to other companies within the required time frame, when they ask you for data about constituentX, as those requests come in (Section 612(a)(2)
  7. update your online retailers about constituentX and make sure they change the ingredient listing (Section 613(b)(1)
  8. update your retail and/or wholesale customers that you won’t be using lavender oil anymore because it contains trace elements of constituentX, so your customers know you are not using something your products that they heard o the Internet is harming them
  9. change your product labels (throwing the old ones in the landfill) (Section 613)
  10. update the state, political subdivision or a state or tribe that you have updated everything, if that is called for by the state, political subdivision or tribe law
  11. check to make sure that no other state, political subdivision of a state or tribe where you sell your products is considering or has already passed a different ppm level for constituentX, in an effort to avoid having to do this all over again in a month or two
  12. update your website, make your products, market your products, do the farmer’s market next Saturday, maintain a few personal relationships, take care of your family, file your taxes and get a workout in now and then.
  13. (I’m sure I missed something …)

    Your only other alternative will be to stop selling the product in StateX.

    Multiply this scenario by 50 (for each state), and then by multiple political State subdivisions and tribes, and it’s not long before you have no choice but to get your resume ready so you can try to land a job in a market where there are no jobs. (Watch my video on this topic here.)

    It’s time for reasonable cosmetics law reform. In my opinion, this is not it.

    For blog posts from stakeholders around the ‘Net calling for reasonable cosmetics law reform (and agreeing that this is not it), click here.

    Sign the Petition. Write letters to your customers, elected officials and local media outlets. Give a financial gift to the cause.

    Question: What if HR 5786 becomes law, but states, political subdivisions of states and tribes (still trying to figure out the “tribes”) can craft their own laws subjecting all cosmetics companies to lawsuits alleging violations of multiple laws based on tests showing or not showing acceptable or unacceptable levels of different ingredients and trace components in a quarter-ounce tube of lip balm you sold for $6.50?

{ 6 comments… read them below or add one }

1 Jennifer Hardaway August 14, 2010 at 9:44 pm

Thank you for another great article! (although it really depresses me…lol) This is horrendous Donna Maria. I have contacted my Representatives in my state and am going to write them next week. And pray.

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2 Anonymous August 15, 2010 at 4:49 am

This is an issue not unique to CPSIA or to the Safe Cosmetics Act, and it’s not new either. For a less polarizing example of the kind of effect these individual state laws have, consider how wine is sold across state lines. Here in Utah I can’t have wine shipped directly to my house; I can only buy it at the state liquor store. One time I wanted a non-alcoholic wine. They sold it at grocery stores in my native California, but the grocery stores here wouldn’t order it because they weren’t allowed to sell wine, and the liquor store wouldn’t order it because they could only order alcoholic beverages. I had trouble finding a mail-order place that would ship to Utah at all, even though the dealcoholized wine was legal to ship to any state. So what happens with all these state-to-state variations is that businesses just don’t ship to the places where they can’t keep up with the paperwork. Hopefully (as is gradually happening in Utah) the people who live in those batty places will notice that their laws are causing products to be unavailable, and do something about it if they want those products. If they don’t want those products, well then it’s a good thing nobody wasted their time trying to sell them there.

The Federal government does, under the Constitution, have the right to regulate interstate commerce, and it would be much easier if everyone selling to the U.S. could meet only one standard. However, the states do also have the right to regulate commerce that goes on inside their own state, and the Federal government doesn’t have the right to pre-empt that. A stricter standard doesn’t conflict, but a less strict standard PLUS the assertion that it pre-empts the Federal standard would lead to a court battle, as it is in Texas with energy policy right now. It’ll be interesting to see how this settles out in court; if someone brings a case on an issue like this, it should make it all the way to the Supreme Court.

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3 Donna Maria Coles Johnson August 15, 2010 at 12:58 pm

Jennifer: would you come to Washington with me before the elections for a rally?

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4 Donna Maria Coles Johnson August 15, 2010 at 1:20 pm

Great points! I do recognize that states have rights to regulate within their borders. But here, what goes on inside their borders is specifically and heavily defined by what goes on outside their borders, so I don’t view it in a vacume. In the case of wine, the manufacturers and distributors had another cost effective way to wholesale their products — at the state-owned stores. This means that commerce could continue within that state where those products were concerned. In this case, there is no such additional outlet, and commerce for multiple hundreds of thousands of small and family-owned businesses would simply stop in the face of the constant threat of litigation. It’s not just a matter of “businesses just don’t ship to the places where they can’t keep up with the paperwork.” If a tiny business has to stop everything to look up new laws in other states, municipalities and tribes, keep up with news reports and articles from people in 50 states about possible new laws, write letters or testimony in an attempt to stop or shape those new laws so they can continue to ship products in that state, and ultimately, they can’t ship the exact same heavily federally regulated product to all 50 states, most will choose not to ship across state lines at all. And if a tiny business relying on the Internet cannot ship across state lines, it’s time for a going out of business sale. I don’t know of a single one that could make a reasonable profit selling products they make only within a single state’s borders.

Putting myself in their position, if I have to look at all of these states, municipalities and tribes to ensure that I’m operating legally in all of those places, especially if I cannot find a job and have a family to support, it’s a question of whether I make more profit in my business without working 24 hours a day, or whether I can just apply for state and federal benefits (unemployment, WIC benefits, etc.), and let the governments support me. And no one wants more of that.

Do states rights trump citizens’s rights to life, liberty and the pursuit of happiness; to make a living? My thought is that state governments serve us, not the other way around.

In my opinion, the right to life, liberty and the pursuit of happiness through small business ownership is the next great issue of our time.

This is a fascinating discussion and I’m so excited to meet you! Thank you for sharing your ideas and questions and I look forward to more.

I see your name shows up different ways in different places, but I know it’s you because of the shoes. What is your name?

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5 Anonymous August 15, 2010 at 2:41 pm

My name is Sarah Natividad. My business is Curious Workmanship (that’s why I’m @curiouswork on Twitter) and I started blogging years ago, before I started my business and before CPSIA, under the nom de blog “Wacky Hermit” so that my blog wouldn’t come up under searches for my name– not for my sake, but for the sake of my kids, embarrassingly cute stories about whom are on my blog. I didn’t want their future boyfriends/girlfriends finding out this stuff through Google searches. :) I don’t blog any more as much as I used to; the last 5 years have been very difficult for our family.

Believe me, I know exactly how hard it would be for a small businessperson to even know about all those different standards. I am such a businessperson. This is why I’m opposed to sales taxation on the internet (unless we change the way sales tax is determined and make it inhere in the location of the seller instead of the buyer). I have my own views on the subject, but I also know there’s disagreement on it, and in fact I’m kind of torn when it comes to the issue of local standards. I live in a state (Utah) with a very different set of local mores than the rest of the country, with laws that uphold those mores and create a local culture. I’m a big fan of local culture and local self-governance, but it is fundamentally and permanently at odds with a federal approach to government. At the end of the day, though, as much as I’d like it if the world arranged itself to be convenient for me, localities and states have a right to self-governance, but I don’t have a right to make a living selling to every location. Even if it kills my business, it would be wrong for me (and against my long-term self interest) to interfere with the right to self-governance. And so as inconvenient as it is to me, and as foolish as I think it is for them to do so, I support localities setting their own standards.

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6 Donna Maria Coles Johnson August 15, 2010 at 9:44 pm

Nice to meet you, Sarah! I look forward to getting to know you better and working with you and others to advocate for reasonable cosmetics law reform. I’ve visited Utah a few times and it is just lovely — the mountains are so pretty. I went to that resort where the Olympics were a while back. Gorgeous!

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