The U.S. Consumer Product Safety Commission last week gave final approval to the controversial
new consumer product safety database, overriding very real concerns about who should be permitted to submit incident reports and how they will be verified as accurate. Readers may know that Section 212 of the Consumer Product Safety Improvement Act of 2008 (‘‘CPSIA’’) amended the Consumer Product Safety Act (‘‘CPSA’’) to require the Commission to establish and maintain a publicly available, searchable database on the safety of consumer products, and other products or substances regulated by the Commission.

CPSC commissioners split along party lines in the 3-2 vote, which came after  a final discussion of whether the regulation would simply give certain interest groups a new forum to attack product makers and plaintiff lawyers a new tool, giving rise to lawsuits based on a rumor repeated through the echo chamber of the Internet.

The rule will give consumers access to reports of alleged product-related safety incidents via a new publicly accessible database.  Consumers, government agencies, and various public health and safety interest groups will be able to post largely self-verified reports related to the safety of any product regulated by the CPSC.

Manufacturers will have limited control over what information can be removed or amended once posted.  The two dissenting votes made an unsuccessful attempt to amend the final rule so as to give manufacturers more time to comment on or respond to the accuracy of postings before they are published to the database and to the public.

The database will be accompanied by a weak disclaimer stipulating that CPSC has not verified the accuracy of any report.  But the Democratic commissioners rejected any system by which the CPSC could investigate obviously questionable claims and find out the origin of such reports before allowing the public to see and use them.   We posted about these very issues last Spring, and argued that the CPSC had not fully addressed them.  It still seems that insufficient attention has been paid by the majority commissioners to legitimate issues of a manufacturer’s goodwill and reputation, to the costs of unnecessary panic among product consumers, and the mischief that plaintiffs’ lawyers might cause with unwarranted increase in litigation against manufacturers.

Accordingly, a product seller may only make a comment in response to the report of harm, which may be published; claim the report of harm contains confidential business information, triggering a CPSC review of the claim; and/or claim the report of harm contains materially inaccurate information (e.g., that it is not the manufacturer or private labeler of the product), triggering a CPSC review of the claim. Materially inaccurate information is narrowly defined to include information that is false or misleading and relates to a matter which is so substantial and important as to affect a reasonable consumer’s decision making about the product.

CPSC is expected to have the database go live at in March, 2011. In the meantime, the Commission plans to start outreach on business portal registration and features; conduct workshops with manufacturers and private labelers; offer training webinars; and finalize the new incident report form.