United States: Nomination Of A New Chairman At The CPSC

Last Updated: January 26 2018
Article by Erin M. Bosman, Julie Y. Park and Reid Gardner

With the start of the new year, President Trump again nominated Republican Ann Marie Buerkle to chair the U.S. Consumer Product Safety Commission (CPSC). Her expected confirmation will continue to push the CPSC in a more corporate-friendly direction that focuses on consensus building rather than additional regulation.

At the same time, another Republican, Dana Baiocco, is expected to be confirmed to take Democratic Commissioner Marietta S. Robinson's seat. Both Buerkle and Robinson have antiregulatory reputations, leading to criticism from some consumer advocacy groups, even though both have decades of experience in consumer product safety regulation. What does this mean for the industry? Given their backgrounds, the new combination of commissioners will likely line up with President Trump's antiregulatory agenda and result in a cooperative approach with industry. But beyond this, business as usual probably won't change drastically at the CPSC.

New Balance of Commissioners at the CPSC

Ms. Buerkle was named acting chairman of the CPSC early in the Trump administration. As many expected, President Trump then nominated her to be permanent chairman of the Commission in July of last year. After a contentious confirmation hearing in September, the Senate committee voted along party lines to advance her nomination to the Senate floor. The full Senate vote, however, never happened and her name—along with about 100 other pending appointments—was returned to the president as required following the end of a congressional session. Ms. Buerkle and the other returned nominees did not have the unanimous consent often given by the Senate to waive that rule. Ms. Buerkle recently cleared the committee process again and her eventual Senate confirmation appears assured.

Ms. Buerkle is no stranger to the CPSC. Appointed by President Obama, Ms. Buerkle has already served four years as a commissioner. Because federal statute prevents filling more than three seats with the same party, President Obama gave Mitch McConnell the choice for the open seat. Senator McConnell tapped Ms. Buerkle as a safe ideological ally.

At the time, Ms. Buerkle was looking for a way to return to public service. She had recently departed Congress after serving one term as a member of the congressional delegation from New York. She won election as a conservative candidate in the Tea Party wave of 2010 and lost a rematch in 2012. Though she accepted the seat on the CPSC in 2013, she declared her intent to run again for Congress. That never happened, as she found a home at the CPSC. In 2017, Ms. Buerkle described her service as acting chairman of the CPSC to be a culmination of many parts of her life working in advocacy. Before entering politics, Ms. Buerkle was a nurse, then a medical malpractice attorney, and finally a New York assistant attorney general.

Ms. Baiocco, the newly nominated commissioner, is an experienced product safety attorney who brings a different background to the CPSC. Her nomination followed a similar path in the Senate last year to that of Ms. Buerkle, and she was also re-nominated and cleared the Senate committee earlier this month. Ms. Baiocco made her name in product-liability corporate defense, representing clients in lawsuits that also drew attention from the CPSC. In one notable case, Ms. Baiocco represented Yamaha in litigation regarding the rollovers of their Rhino off-road vehicles. Following these suits, the CPSC helped Yamaha implement a recall program for the vehicles.

Ms. Baiocco's consumer-products interests run in the family. Her husband—also a lawyer—has defended IKEA in the recent dresser tip-over suits. Notably, IKEA's dressers have also been a focus of CPSC action. Anticipating scrutiny over potential conflicts, Ms. Baiocco has promised to recuse herself from any matter in which she or her husband have a direct financial interest or that will have a direct or predictable effect on her husband's firm.

How Will Buerkle's Confirmation Change the CPSC?

Because the CPSC's mandate is to protect the public from "unreasonable risks of injury" in consumer products, its leader has a substantial ability to influence how this mandate is carried out.

Much of the CPSC's discretion can be seen in its day-to-day actions. For instance, the CPSC's compliance work is often carried out through voluntary recalls in conjunction with product manufacturers, distributors, and retailers. New leadership may decline to push for some recalls based on a different perception of what types of incidents rise to the level of seriousness to merit such action. In addition, even CPSC's mandatory enforcement authority comes with a degree of discretion. As many of our readers will recall, former Chairman Elliot Kaye generated controversy with unprecedented enforcement efforts against high-powered magnet ball sets. We expect this type of discretionary enforcement to continue to decline under Ms. Buerkle.

Another major role of the Commission is to set product safety standards, which it accomplishes in one of two ways: (1) rulemaking or (2) coordination with industries for voluntary standards. Again, the Commission has significant discretion, and Ms. Buerkle prefers consensus voluntary standards. She made this patently clear during the nomination process, refusing to back down from this goal in her first confirmation hearing in September. For example, Senator Bill Nelson (D-Fla.) questioned Ms. Buerkle about her vote against a rule to improve the safety of portable electric generators in favor of allowing the industry to voluntarily improve safety standards on its own. Senator Nelson argued that manufacturers would not follow voluntary standards to improve safety. In response, Ms. Buerkle disagreed and insisted she could raise safety standards faster and more effectively through the industry consensus aspect of voluntary standards.

Ms. Buerkle's nomination may also prompt change to the CPSC's public database for consumer safety complaints. As part of the 2008 Consumer Product Safety Improvement Act, Congress mandated that the CPSC create a public portal and a publicly accessible, searchable database of consumer product incident reports. Manufacturers are given 10 days in which to respond to the complaints before their publication, but CPSC will not withhold comments unless the manufacturer can demonstrate with indisputable facts or documentation that the report is materially inaccurate. Under the current system, the CPSC does not itself verify the accuracy of the complaint. Manufacturers have complained that the database makes it too easy to upload false information. In support of manufacturers, Ms. Buerkle voted to defund the database during her term in Congress. As chairman, she will not have the power to scrap the database, but she may have the power to influence how information is reported and verified in the database.

How Will This Affect Consumer Product Manufacturers?

We expect the CPSC will defer more to industry under Ms. Buerkle's leadership, but significant changes are unlikely for two reasons. First, much of the regulatory function of the CPSC is statutorily outlined. In comparison to some other federal agencies, the CPSC often has little discretion under its governing statutes. For instance, in the Children's Gasoline Burn Prevention Act of 2008, Congress passed a law requiring that closures on portable gasoline containers conform to specific child-resistance standards. As a result, these standards were incorporated into the CPSC's consumer product safety rules without a need for rulemaking from the Commission. Because many of its governing statutes impose specific product safety standards such as these, or leave little room for interpretation, a change in leadership at the CPSC will not change most existing consumer product rules.

Second, Ms. Buerkle and Ms. Baiocco are dedicated to product safety, even if they approach the issue with a different philosophy than former Chairman Kaye. Ms. Buerkle has described herself as an "across-the-board conservative," and as such has publicly declared her dedication to reducing government spending and the costs of regulations to American businesses. But Ms. Buerkle's goals, despite consumer advocate groups' protests, are not incompatible with the CPSC's mission. Ms. Buerkle has shown a spirit of public service in her careers as a nurse, a lawyer, and a public servant. Her advocacy of product safety should be expected to continue, though with stronger coordination and cooperation with industry.

Similarly, though Ms. Baiocco will presumably also keep industry needs in mind, she should likewise be trusted to protect consumers' interests. Ms. Baiocco's nomination, given her involvement in defending corporations in high-profile consumer products lawsuits, was undoubtedly intended as a pro-industry signal. Yet her career of corporate advocacy gives her a strong foundation in industry risks and potential abuses in product safety. She can be expected to effectively weigh consumer interests against those of manufacturers, distributors, and retailers when evaluating product safety.

Although it represents a shift at the CPSC, the changing leadership is certainly not the downfall of consumer product safety, as some consumer advocacy groups have predicted. Increased cooperation with industry, including a strong preference for voluntary standards over regulation, can be an effective strategy for reaching consensus and maximizing industry compliance with consumer product safety standards.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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