STATE ATTORNEYS GENERAL AND THE RESPONSE TO THE 2007 RECALLS OF

CHILDREN’S TOYS

David Tutor

February 5, 2009

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INTRODUCTION

In 2007, millions of toys were recalled because they contained small but powerful magnets

that could perforate a child’s intestines when swallowed, as well as a dangerous amount of lead

paint on exterior surfaces. These recalls of children’s products were both preceded and

succeeded by additional recalls of everything from toy charms to pet food to car tires. The

majority of these products were designed in the United States, manufactured overseas, and

returned to the domestic market where they appeared largely untested on shelves in major retail

outlets. In many cases, it took reports of deaths or serious injuries to spur major recalls. The

Consumer Product Safety Commission (CPSC), the agency charged with protecting the

American public from the risks of dangerous products, appeared to be abdicating its

responsibility. Years of slashed funding and deregulatory ideology had rendered the agency

essentially reactive-- its primary function shifted to monitoring for signs of injury or death that

might prompt a recall and assisting companies publicize their press releases once a recall had

been initiated.

In the absence of strong federal regulation, state Attorneys General began to fill in the

voids of the current system and were able to achieve some major successes in the consumer

products realm. However, prior to the Consumer Product Safety Improvement Act of 2008

(CPSA), state Attorneys General were often limited to confronting dangerous products to the

extent that they were present in their state, despite their presence on shelves across the country.

Part I of this note discusses the problems of dangerous toys and the difficulty of addressing the

problem at the source of origin, as well as the subsequent 2007 recalls. Part II addresses the

powers of state Attorneys General in the children’s products arena, and the actions they took,

alone and in concert, to try to protect the citizens of their states. Part III looks to the new

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provision in the CPSA that empowers state Attorneys General to seek injunctions under federal

law, and considers whether this provision will substantively add to the power of state Attorneys

General to enforce federal law. I argue that though this Act does not go far enough, it represents

an important first step in empowering state Attorneys General to enforce federal law in the broad

and difficult challenge of detecting dangerous children’s products, as well as in cultivating

cooperative state-federal enforcement.

PART I: THE PROVENANCE OF DANGEROUS TOYS AND THE YEAR OF THE

RECALL

The United States imports a great variety of consumer products from overseas, many

from developing countries.1 Toys, games, and jewelry directed at children, much of which

originates in China, make up a considerable amount of total imports.2 Unfortunately, not all of

these children’s products meet U.S. safety standards. Imports constitute over eighty-five percent

of recalled products.3 The detection of dangerous products coming into the U.S. from overseas

poses a tremendous challenge in light of the sheer impossibility of inspecting all products before

they are available for sale.4 Defective toys do not, of course, solely originate in China or other

1 See The Office of Trade and Industry Information, TradeStats Express, at http://tse.export.gov/ for analysis of U.S. trade partnerships. 2 See U.S. Census Bureau and U.S. Bureau of Economic Analysis, U.S. International Trade in Good and Services, October 2008, available at http://www.census.gov/foreign-trade/Press Release/current_press_release/ft900.pdf. In total, the U.S. imported $29,909,000,000 worth of “toys, games and sporting goods” from January, 2008 to October, 2008. Id. at 13. This represents a substantial increase from the $28,528,000,000 imported during the corresponding period in 2007, although one can speculate that the economic troubles that emerged in October and November of 2008 will mean that fewer of these goods will actually be consumed. It would be premature to presume that the economic troubles would lead to fewer imports from China. Indeed, the strengthening dollar and ongoing economic turmoil may make importing goods from China even more attractive than it previously was. 3 U.S. Consumer Product Safety Commission, 2009 Performance Budget Request, at 14 (February 2008), available at http://www.cpsc.gov/cpscpub/pubs/reports/2009plan.pdf [hereinafter CPSC Budget Request]. 4 In 2007 the U.S. imported more that $2 trillion worth of products. They entered the U.S. through more than 300 points of entry, and were transmitted by approximately 825,000 importers. Interagency Working Group on Import Safety, Import Safety---Action Plan Update, Introductory Letter to President

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foreign countries. Indeed, the majority of toys destined for the U.S. market are designed in the

U.S., but manufactured abroad.5

This Part further discusses the origins of the problem toys and why regulators in the

United States necessarily play a reactive role, where their main goal is to detect defective

products as quickly as possible. It further highlights why the primary mechanisms in place to

protect domestic consumers of children’s products are ineffective or inadequate, thus leaving a

safety enforcement vacuum that has been partially filled by state attorneys general (Part II), and

further augmented by the CPSIA (Part III).

A. The Origins of Dangerous Toys.

This Part focuses on China because they are the largest trading partner of the U.S., and

dominate the supply of imported toys.6 Total U.S.-China trade increased to $387 billion in

2007.7 According to the CPSC, forty percent of all consumer products imported into the United

States last year were manufactured in China, totaling $246 billion worth of goods.8 China’s

dominance has been particularly strong in the production of toys: In 2007, China accounted for

89% of toys imported into the U.S.9 This has been an ongoing trend. From 1997 to 2004, the

CPSC noted that the share of all U.S. imports of consumer products from China more than

quadrupled.10

Bush (July 2008), available at http://www.importsafety.gov/report/actionupdate/actionplanupdate.pdf [hereinafter Import Safety Action Plan]. 5 U.S. Department of Commerce, Industry Outlook: Dolls, Toys, Games, and Children’s Vehicles, NAICS Code 33993, (Oct. 2008), available at http://www.ita.doc.gov/td/ocg/outlook08_toys.pdf [hereinafter Commerce, Industry Outlook]. 6 See The Office of Trade and Industry Information, TradeStats Express, at http://tse.export.gov/. The U.S. imported $321,507,785,000 worth of goods from China in 2007. 7 Wayne M. Morrison, Cong. Research Serv., RL32165, U.S.-China Trade Issues, May 22, 2008, [hereinafter Morrison, Trade Issues]. 8 CPSC Budget Request, supra note 3, at 14. 9 Morrison, Trade Issues, supra note 7, at 9. 10 Id.

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Chinese-manufactured products of all types have had their share of problems. In sum,

95% of jewelry recalled since 2005 has come from China.11 More than 40% of recalls conducted

by the U.S. Consumer Product Safety Commission, including 79% of toys in 2006, and 98% in

200712 involved products from China.13 In 2007, the “year of the recall,” millions of toys

manufactured in China were recalled for design defects as well as the presence of dangerous

amounts of lead.14

1. Economic Factors. --- China’s domination of the supply of toys is partially due to its

ability to mass produce cheap consumer products. Chinese manufacturers can significantly

undercut the prices offered by their foreign competitors.15 China’s practice of currency

manipulation allows their products to appear relatively cheaper than those from other countries,

fuelling export-led growth.16 In China, unions are practically nonexistent and the poor labor

conditions under which these toys are frequently produced have been well documented.17 Low

wages and excessive hours in the production of toys go far in reducing some manufacturers’

costs.18 Together, cheap labor and currency manipulation, coupled with massive state

11 Eric Lipton & Louise Story, Bid to Root Out Lead Trinkets Falters in U.S., N.Y. Times, Aug. 6, 2007. 12 Lucy P. Allen, et. al., China Product Recalls: What’s at Stake and What’s Next, NERA Working Paper, at 2, Feb. 20, 2008, available at http://www.nera.com/image/PUB_ChinaProductRecalls_2.08_FINAL.pdf. 13 Jyoti Thottam, The Growing Dangers of China Trade, Time Magazine, Jun 28, 2007. 14 Morrison, Trade Issues, supra note 7, at 9. 15 See The Coming China Wars at 2, New York: FT Press, (2007). 16 See Charles B. Rangel, Moving Forward: A New, Bipartisan Trade Policy That Reflects American Values, 45 Harv. J. on Legis. 377, 409 (2008). China was able to accomplish this by devaluing their currency relative to the U.S. dollar, and then intervening in exchange markets to ensure that the value stayed at the level prescribed. Even apart from currency valuation, the cost of manufacturing goods in China is significantly less than it is in the United States. 17 See National Labor Committee, Nightmare on Sesame Street, available at http://www.nlcnet.org/admin/media/document/China/KNEX_2008/SESAME_WEB_071508.pdf. 18 Id.

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investment in infrastructure and manufacturing has allowed China to come to dominate the toy

market in the United States.19

The level of regulatory enforcement of safety standards in China is significantly less

stringent than enforcement in the United States. This is partially due to the diffuseness of

productions. The Chinese production system is unique in its reliance on a great number of

specialized producers: On average, it takes China seventeen different parties to produce a

product that would take three parties to complete in the United States.20 The varied production

chain hinders direct oversight of the manufacturing process, and makes it unlikely that a

substandard component part used at one of many production points will be noticed. Products

containing lead are a particular problem which is inherently difficult to detect, that may be

produced in China and unwittingly shipped to the United States. A recent study conducted at

Ashland University found that lead-containing electronic waste is finding its way into Chinese

produced consumer products such as toys and jewelry.21 The recycling process allows Chinese

manufacturers access to low cost electronic component parts and provides an outlet for disposed

of U.S. electronics.22 While both China and the United States may benefit from U.S. companies

sending recycled electronics goods to China for extraction and use, the negative externalities are

born by relatively defenseless third parties: the Chinese workers who extract the material and

19 Peter Engardio (ed.), Chindia: How China and India Are Revolutionizing Global Business, at 60 (2006). 20 Jeremy Haft, The China Syndrome, Wall St. J., July 16, 2007, at A12. 21 See Jeffery D. Weidenhamr and Michael L. Clement, Leaded Electronic Waste is a Possible Source Material for Lead-Contaminated Jewelry, 69 Chemosphere 1111, 1111--15 (2007), available at doi:10.1016/j.chemosphere.2007.04.023 (finding that recycled circuit board solders are being used to produce some of the heavily leaded imported jewelry sold in the United States). 22 See Heather L. Drayton, Note, Economics of Electronic Waste Disposal Regulations, 36 Hofstra L. Rev. 149, 158 (2007) (arguing negative transboundary externalities exist from trade of recyclable materials to less developed countries).

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produce the new goods and the children who use the dangerous, lead-contaminated toys.23 On-

line advertising and specialized commodity trading websites also both increase pressure to lower

prices and make it easier for dangerous components of products to slip through the cracks and be

incorporated into children’s products.24 As a result, a U.S.-based importer usually deals only

with the primary supplier in what is oftentimes a huge supply chain in the production of a good

like a toy.25 Even if a U.S. toy company sought to have its toys constructed in, say Cambodia,

that company would probably have to source components like paint or screws from a Chinese

manufacturer in Guandong, where the majority of toy factories are located.26 To further augment

the problem of supervising the manufacturing process, Chinese companies supplying the U.S.

toy market usually do not have assets in the U.S., and cannot be made subject to the U.S. legal

system.27

2. Regulatory Enforcement in China. --- China’s rise to prominence in the export trade is

not solely a product of currency manipulation and low production costs, but can also be

attributed to lax oversight of the manufacturing process.28 China has had difficulty enforcing

both international and domestic law, particularly in the areas of intellectual property, foreign

23 Id. When these components contain lead or other toxins, there is a risk of death when ingested by children or handled repeatedly by factory workers. Id. 24 David Barboza, When Fakery Turns Fatal, N.Y. Times, June 5, 2007 (discussing the origins of melamine-contaminated pet food). A Chinese company shipped melamine-contaminated ingredients to middlemen in North and South America, who used the ingredients in manufacturing pet food. Melamine is difficult to test for and was not detected until after numerous pet fatalities. Id. Melamine-contaminated infant formula, originating in China, recently caused a much publicized world-wide recall. See Food and Agricultural Organization of the U.N., Melamine Milk Crisis, Newsroom (Sep. 26, 2008) available at http://www.fao.org/newsroom/en/news/2008/1000926/index.html. 25 Joe Nowlan, Distributors Eye Mattel Recalls; Experts Say Due-Diligence and Attention to Detail Are Vital When Developing Private-Label Programs With Overseas Partners, Indus. Distribution, Oct. 1, 2007. 26 See Shu-Ching Jean Chen, Trapped in the Chinese Toy Closet, Forbes, Aug. 21, 2007. 27 Id. 28 See Monique Hawthorne, Comment: Confronting Toxic Work Exposure in China: The Precautionary Principle and Burden Shifting, 37 Envtl. L. 151, 164 (2007) (arguing that toy factories violate regulations for toxic substances in order to decrease costs).

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trade, and the environment.29 When a regulatory law that may increase costs is passed in

Beijing, mayors and governors, who are primarily being judged on the economic success of their

region, have a vested interest in looking the other way.30 To do otherwise and enforce the law

would raise the costs associated with production and decrease the profit margins upon which

political support is predicated. While fiscal and administrative decentralization helps spur

economic growth, the inability of the central government to effectively enforce enacted laws,

coupled with the incentives of regional governors to achieve economic growth, inevitably leads

to the skirting of best practices and undermining of international legal agreements.31

The judicial system in China is also ill-equipped to provide a check against regional

interests. Not only is there an insufficient number of judges, but the system itself suffers from a

lack of independence and professionalism.32

Addressing China’s lax regulation and emphasis on profits would require improving

China's food and product safety at the source. This is not, unfortunately, a primary focus of

U.S.-China trade relations. U.S. lobbying efforts have focused more on getting China to open

its markets to U.S. goods33 and increasing intellectual property protections.34 The U.S. has

29 See Gregory H. Fuller, Economic Warlords: How Defacto Federalism Inhibits China’s Compliance with International Trade Law and Jeopardizes Global Environmental Initiatives, 75 Tenn. L. Rev. 545, 553 (2008) (describing how diverse interests of China's large population, localism, and de facto federalism make complying with international accords difficult). 30 Id. 31 Id. at 576 (arguing that “comprehensive reform” is required to reverse the process of increased economic fragmentation within China). 32 Chun-Hsien Chen, Enforcement Rates of Intellectual Property Protection in the United States, Taiwan, and the People’s Republic of China, 10 Tul. J. Tech & Intell. Prop. 211, 253 (2007). Chen’s article discusses a similar difficulty in enforcing intellectual property laws in China. Though stronger IP laws have been enacted in the past ten years, the presence of these regulations has not significantly reduced the prevalence of violations or the widespread availability of counterfeit products. Chen concludes that the level of IP protection is affected by multiple factors, with the factors relating to socio-economic development the most decisive. Id. at 257--58. 33 Jyoti Thottam, The Growing Dangers of China Trade, Time, Jun 28, 2007. 34 Chen, supra note 32, at 252--53.

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largely relied on importers to monitor and be responsible for the fitness of children’s products.35

The effectiveness of this strategy has suffered from obvious limitations, namely the strong

countervailing pressure to produce goods quickly and at low cost.36 As a result, there are less

than ideal incentives on producers to maintain high product standards while reducing their costs.

Coupled with relatively lax oversight in the producing region, this requires enhanced regulation

in the U.S. to ensure that a reasonable level of import safety is reached.

B. Detecting Dangerous Toys and Jewelry in the U.S.

The CPSC is the sole federal agency charged with protecting the American public from

unreasonable risks of death and injury of consumer projects.37 The CPSC was created in 1972

by the Consumer Product Safety Act (CPSA) to identify and act on a wide range of consumer

products hazards.38 The CPSC administers six other consumer protection laws as well.39

Despite this broad empowerment, the CPSC not been well funded: The CPSC’s budget in 2007

was $62 million to regulate the $1.4 trillion product industry.40 In light of the magnitude of the

problem, the focus of the CPSC is necessarily on detecting dangerous children’s products and

getting them off the shelves rather than stopping dangerous production at the source.41 Because

35 Thottam, supra note 33. 36 Julia A. Phillips, Does “Made in China” Translate to “Watch Out” for Consumers? The U.S. Congressional Response to Consumer Product Safety Concerns, Penn St. Int’l L. Rev. 217, 226 (2008). 37 U.S. Consumer Product Safety Commission, 2008 Performance and Accountability Report, at 3 (Nov. 2008), available at http://www.cpsc.gov/cpscpub/pubs/reports/2008par.pdf [hereinafter CPSC, Performance Report]. 38 CPSC Budget Request, supra note 3. 39 The CPSC administers the Federal Hazardous Substances Act, the Flammable Fabrics Act, the Poison Prevention Packaging Act, the Refrigerator Safety Act, the Pool and Spa Safety Act, and the Children’s Gasoline Burn Prevention Act. CPSC Performance Report, supra note 37, at 3. 40 Eric Lipton, Safety Agency Faces Scrutiny Amid Changes, NY. Times, Sep. 2, 2007. 41 The CPSC does not regularly perform inspections of manufacturers at home or abroad. U.S. manufacturers are able to send toys that do not meet domestic safety standards abroad to be sold in countries where the standards are not as stringent. Renae Merle, Products that Miss Safety Standards Sent Overseas by U.S. Companies, Wash. Post, Sept. 1, 2007. This practice will be banned by the CPSIA.

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of the sheer number of imported toys and the small size of the Commission, stopping the

problem at the source is not feasible.

1. CPSC in Action. --- As a result, the CPSC is a relatively small Agency by design. 42

Rather than relying on an army of inspectors, the CPSC requires that firms report dangerous

products to them.43 Prior to the 2007 recalls and CPSIA, the CPSC maintained only fifteen

inspectors at U.S. ports.44 Fewer than 100 inspectors have responsibility for the rest of the

country.45 For the first time, in 2008, the CPSC hired permanent full time CPSC investigators at

key ports of entry in the U.S.46 The total staff of the CPSC was approximately 400, roughly half

of the 800 staff employed by the Commission in the 1980s.47 These relatively small numbers of

inspectors are unable to examine a meaningful percentage of products that are imported into the

United States.

Due to its small size, the CPSC is necessarily a “data-driven” agency. When first

enacted, the CPSA provided the CPSC with two primary methods of enforcement: the ability to

promulgate mandatory product safety standards and the ability to initiate product recalls.48 The

CPSC has issued only sixteen such standards in its existence, instead relying far more on its

ability to recall dangerous products.49 The Commission’s primary source of information is the

42 CPSC Budget Request, supra note 3. 43 See 15 U.S.C. § 2055(b) (2008). 44 Michael Weisskopf, Who Regulates America’s Toymarkers?, Time, Aug. 18, 2007, available at http://www.time.com/time/business/article/0,8599,1654132,00.html. 45 Id. 46 CPSC Budget Request, supra note 3, at vi. 47 Stephen Labaton, Senate Votes to Strengthen Product Safety Laws, N.Y. Times, Mar. 7, 2008. 48 15 U.S.C. §§2056, 2057. 49 See Glen Kaplan & Charles Barry Smith, Patching Holes in the Consumer Product Safety Net: Using Unfair Practices Laws to Make Handguns and Other Consumer Goods Safer, 17 Yale J. on Reg. 253, 255 (2000). These safety standards cover architectural glazing materials, 16 C.F.R. § 1201, matchbooks, Id. § 1202, bicycle helmets, Id. §1203, base station antennas, Id. §1204, lawn mowers, Id. § 1205, swimming pool slides, Id. §1207, cellulose insulation, Id. §1209, cigarette lighters, Id. §1210, garage door openers, Id. § 1211, bunk beds, Id. § 1213, refuse bins, Id. § 1301, contact adhesives, Id. § 1302, lead-containing paint, Id. §1303, asbestos, Id. §1304, emberizing materials, Id. §1305, lawn darts, Id. § 1306.

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companies themselves. Companies must report to the CPSC if they find that one of their

products is dangerous within twenty-four hours of learning about the condition.50 Companies

need not report all hazards: The CPSC requires companies to report potential hazards only if a

reasonable person would conclude that the product poses an unreasonable risk of serious injury

or death.51 In addition to requiring companies to report dangerous products to the CPSC, the

CPSC uses the collection of information from hospitals and field investigators to identify product

hazards.52

When the CPSC identifies a risk, it is able to investigate only 10 to 15 percent of reported

injuries and deaths related to consumer goods.53 After the hazard has been reported, the CPSC

will not automatically recall the product. Instead the Commission will work with the company to

determine whether a recall is necessary.54 As a last resort, the CPSC may also bring civil and

criminal enforcement actions and impose penalties on companies that fail to voluntarily inform

the Commission when they discover that their toys are unsafe.55 Prior to the 2007 recalls, this

amount was capped at $1.83 million, a relatively small sum compared with the potential for

millions of dollars in daily sales achieved by some companies like Mattel and Hasbro, the two

largest toy companies in the world.56

50 16 C.F.R. §1115.14(e). 51 David G. Wix & Peter J. Mone, Planning For and Implementing a Product Recall, 74 Def. Couns. J. 220, 229 (2007). 52 CPSC Budget Request, supra note 3, at 5. The IT budget is approximately $7 million, including twenty-seven CPSC IT staff members. The focus on IT is expected to grow as the electronic sharing of information has increased both internally and externally. 53 Lipton, supra note 40. 54 Id. Even when products are recalled, the CPSC and the companies typically avoid the use of the word “recall,” for the ostensible purpose of not alarming consumers. E. Marla Felcher, Product Recalls: Gaping Holes in the Nation's Product Safety Net, 37 J. of Consumer Affairs 170, 177 (2003). 55 See Kenneth A. Bamberger & Andrew T. Guzman, Keeping Imports Safe: A Proposal for Discriminatory Regulation of International Trade, 96 Cal. L. Rev. 1405, 1412 (2008). 56 See Michael Weisskopf, Who Regulates America’s Toymakers?, Time, Aug. 18, 2007; see also Commerce, Industry Report, supra note 5, at 2.

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Even when this information is reported to the CPSC, it may not reach the public until

after there is evidence of a sufficient risk to warrant a recall. When faced with a Freedom of

Information Act (FOIA) request, the CPSC has a “reverse-FOIA” provision that limits its ability

to release information about dangerous products to the public.57 Whenever the CPSC plans to

release data on its own initiative or in response to a FOIA request, it must notify manufacturers

at least 30 days before disclosing information relating to their products.58 During the 30 day

period the company is entitled to review any material that reference it, submit comments to the

CPSC, and seek to have the information withheld.59 This process is often used by companies,

making it difficult to uncover information about potential risks prior to the determination by the

CPSC to undertake a recall.60

Further compounding the challenge of protecting children is the difficulty of determining

whether a product contains a potentially poisonous chemical like lead. The presence of lead was

the second leading cause of recalled China-related consumer products in 2007.61 Even if the

product is tested when it is initially produced, lead-tainted products may still make it into toys.

While a manufacturer may be able to oversee some of its subcontractors, the supply of other

component parts may be sourced from other producers. As a result, individualized testing of all

57 15 U.S.C. § 2055(b)(1) (2008). See Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 111--12 (“The CPSA gave the Commission broad powers to gather, analyze, and disseminate vast amounts of private information. In granting the Commission such authority, Congress adopted safeguards specifically designed to protect manufacturers' reputations from damage arising from improper disclosure of information gathered and received by the Commission.”). The statute requires that the Commission’s public disclosure of any information be “accurate,” and “fair in the circumstances and reasonably related to effectuating the purposes of” the Act. 15 U.S.C. § 2055(b)(1) (2008). This section requires that the “Commission ‘take reasonable steps to assure’ (1) that the information is ‘accurate,’ (2) that disclosure will be ‘fair in the circumstances,’ and (3) that disclosure will be ‘reasonably related to effectuating the purposes of [the CPSA].’” GTE Sylvania, Inc., 447 U.S. at 122. 58 15 U.S.C. § 2055(b). See also GTE Sylvania, Inc., 447 U.S. at 105. 59 Id. 60 Felcher, supra note 54, at 173 (describing experience submitting FOIA requests to the CPSC and ramifications on regulation). 61 Allen, et al., supra note 12, at 7. In the end, design defects were responsible for most of the recalled products in 2007.

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parts of a representative sample of all goods is very difficult. Though goods may be tested at the

start of production, they may not be tested again as repeated batches are produced.62 Together,

this makes it virtually impossible to determine where individual components of each toy are

from, and it makes it very difficult to test the entire toy beforehand.

Thus, it often takes a tragedy before the CPSC becomes aware of the dangerous

condition. For example, Reebok charm bracelets that contained ninety-nine percent lead were

offered as gifts with the purchase of children’s shoes for nearly two years.63 In the Reebok

recall, the charm bracelet was only tested after a child died of lead-induced brain swelling after

ingesting a piece of the bracelet.64 Hospital and newspaper reports of such tragedies are often

required before such a dangerous condition comes to the attention of the CPSC.65 As such,

2. Private Litigation. --- Individual suits brought by injured victims provide an additional

important backdrop to consumer protection in addition to informing the CPSC about dangerous

products. Private suits can serve a regulatory function in their own right. Some commentators

have argued that but for the threat of product safety litigation from private parties, it is unlikely

that any toys would be recalled at all.66 Yet there is reason to doubt the efficiency of tort suits in

regulating product safety. Not all individuals who are injured typically file a claim. The injuries

62 See Lipton & Story, supra note 11. 63 See Chris Reidy, Reebok Recalls Bracelets After Boy Dies, Boston Globe, March 24, 2006. The safety threshold for lead content in jewelry is 0.06 percent. 64 See U.S. Consumer Product Safety Commission, Reebok Recalls Bracelet Linked to Child’s Lead Poisoning Death, Release #06-119, March 23, 2006, available at http://cpsc.gov/cpscpub/prerel/prhtml06/06119.html. 65 Reebok was alerted of the death by Minnesota officials on a Friday. They immediately began contacting retailers to get them to remove the shoes with the charms from the shelves. Reebok did not alter the CPSC until the following Monday. See Reidy, supra note 63. 66 Marc R. Stanley, When Bad Companies Happen to Good People, 56 Drake L. Rev. 517, 526 (2008) (arguing against tort reform by noting, in part, that the CPSC has “too few inspectors, investigators, and scientists . . . and too little enforcement authority”).

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involved may not be significant enough to prompt an individual plaintiff to bring suit.67 While

tort claims may provide recovery in some limited situations, insofar as the standard requested

seeks to increase already established norms, courts may be reluctant to intervene.68 An

additional concern is that tort claims require an injury prior to the filing of a suit. Ex ante

regulations could, theoretically, avoid the injuries inherent in constructing a regulatory regime

case by case. Furthermore, promulgated guidelines allow decrease uncertainty facing producers

thereby reducing potential compliance costs. The Class Action Fairness Act of 2005 further

limited the effectiveness of consumer product class actions as a means of regulation.69 A great

many of these cases end in settlement, oftentimes with confidentiality as a required provision.70

As such, key information concerning public health and safety may be kept from government

regulators and from the scientific community, removing substantial matters of public concern

from the scrutiny of the judicial system.71

Further, the effectiveness of torts suits to highlight dangerous toys is undermined by the

problem of proving causation. In the case of lead poisoning in particular it can be difficult to

determine where the exposure originated from. With the sizeable presence of lead paint in

homes, schools, playgrounds, and other public areas, it can be difficult to prove a causal link

67 See Kaplan & Smith, supra note 49, at 263. An additional concern is that if a product meets CPSC regulations, such compliance may insulate a defendant from tort claims that would impose a higher standard. Because the CPSC regulates relatively few products, this bar is not invoked very often. Id. at 260 n.32. 68 Id. at 263. (“Courts are often reluctant to involve themselves in policy debates that they view as more appropriate for the legislature.”). 69 See Alec Johnson, Vioxx and Consumer Product Pain Relief: The Policy Implications of Limiting Courts’ Regulatory Influence Over Mass Consumer Product Claims, 41 L.A. L. Rev. 1039, 1071--84 (2008); see also Lonny S. Hoffman, Burn Up the Chaff with Unquenchable Fire: What Two Doctrinal Intersections Can Teach Us About Judicial Power Over Pleadings, B.U. L. Rev. 1217, 1248 (2008) (arguing it is “troubling” that many courts applying CAFA shift the burden of proof to plaintiff from defendant seeking to be heard in federal court). 70 James E. Rooks, Jr., Settlements and Secrets: Is the Sunshine Chilly?, 55, S.C. L. Rev. 859, 861--62 (2004). 71 Id.

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between lead paint on a toy and subsequent harm.72 Lead paint in homes remains the principle

method of exposure, further complicating the process of identifying the source and holding the

corporation ultimately responsible. Also difficult to prove is the injury itself, which includes loss

of mental function and developmental delay. 73 Together, these considerations limit the ability of

private suits to efficiently regulate product safety.

C. 2007: The Year of the Recall

These theoretical concerns manifested themselves in a number of prominent recalls of

children’s products in 2007. The identification of dangerous toy components in toys imported

from China drew national attention to the problem of safety concerns related to imported

products. 74 In the United States, increased scrutiny led to the identification of more classes of

tainted imports. 75 These included dangerous fish products; pet food ingredients; lead-tainted

toys; car tires, and children’s toys; all pulled off of the shelves.76

72 The Center for Disease Control and Prevention’s Lead Program indicates that some consumer products through which children may be exposed to lead include artificial turf, candy, ceramic ware, folk medicine, and Sindoor (a food additive) in addition to toy jewelry and toys. See See U.S. Dept. of Health and Human Services, Centers for Disease Control and Prevention, Lead Poisoning Prevention Program, Frequently Asked Questions, available at http://www.cdc.gov/nceh/lead/faq/FAQs.htm. 73 See Id. 74 Prior to 2007, recalls of dangers children’s toys and jewelry occurred on a yearly basis, some involving millions of pieces, with generally less publicity. See e.g. U.S. Consumer Products Safety Commission, CPSC Announces Recall of Metal Toy Jewelry Sold in Vending Machines: Firms agree to stop importation until hazard is eliminated, originally issued July 8, 2004 revised on March 1, 2006 available at http://www.cpsc.gov/CPSCPUB/PREREL/PRHTML04/04174.html (announcing the recall of 150 million pieces of jewelry in an agreement with four importers); See also The Diddle Kingdom: Chinese Manufacturing, Economist, July 7, 2007. 75 See Patrick Woodall, Senior Policy Analyst, Food & Water Watch, Testimony Before the U.S.-China Economic and Security Review Commission Hearing on Chinese Seafood Imports: Safety and Trade Issues, (April 24, 2008) (testifying that publicity surrounding toy recalls led to increased scrutiny of fish imports). 76 See David Barboza, China Food Mislabeled, U.S. Says, N.Y. Times, May 3, 2007 (pet food); Andrew Martin, Chinese Tires Are Ordered Recalled, N.Y. Times, June 26, 2007 (defective tires); Louise Story & David Barboza, Mattel Recalls 19 Million Toys Sent From China, N.Y. Times, August 15, 2007 (children’s toys). 100 people in Panama died from drinking cough syrup tainted with diethylene glycol, a component of car antifreeze, that was produced in China. Subsequent tests in the U.S. found the same toxin in discount toothpaste.

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The toy recalls were the most publicized and prominent of the 2007 recalls. On June 13,

2007, RC2 Corp. voluntarily recalled 1.5 million Thomas the Tank railway toys whose surface

paint contained lead.77 Later, in November of 2007, JSSY Ltd. was forced to recall poisonous

toy beads that were marketed in North America and Europe.78 When the beads were ingested,

the glue ingredient broke down in the body into GHB, the illegal date rape drug that can cause

unconsciousness and death.79 Other recalls included propane grills, high chairs, computer

batteries, lawn trimmers, children’s jewelry and tool kits.80

Perhaps the most illuminating recalls in 2007 involved those facing the popular American

toy company Mattel.81 Mattel was plagued by two recalls, each driven by a different flaw—the

first was the presence of lead in toys, the second was the existence of a dangerous design defect.

The first recall faced by Mattel came on August 2, when approximately one million Sesame

Street, Dora the Explorer, and other toys were voluntarily recalled due to the presence of lead.82

Two weeks later, an additional 250,000 toy cars were also recalled for excess levels of lead in

77 See U.S. Consumer Product Safety Commission, RC2 Corp. Recalls Various Thomas & Friends™ Wooden Railway Toys Due to Lead Poisoning Hazard, Release #07-212, (June 13, 2007), available at http://www.cpsc.gov/cpscpub/prerel/prhtml07/07212.html. The affected toys were produced from 2005 to 2007 in China.

This was particularly unsettling to some because Thomas the Tank Engine toys are generally seen as “high-end” toys, and cost between $10 and $100 per piece. See Angel Jennings, Thomas the Tank Engine Toys Recalled Because of Lead Paint, N.Y. Times, June 15, 2007. 78 See U.S. Consumer Product Safety Commission, Spin Master Recalls Aqua Dots – Children Became Unconscious After Swallowing Beads, Release #08-074, (Nov. 7, 2007), available at http://www.cpsc.gov/cpscpub/prerel/prhtml08/08074.html. 79 Keith Bradsher, Producer of Poisonous Toy Beads Issues Apology, N.Y. Times, Nov. 30, 2007. 80 See Lipton, supra note 40. 81 Mattel is the largest toy manufacturer in the world. Commerce, Industry Report, supra note 5, at 2. It is a publically traded company whose brands include American Girl, Barbie, Fisher Price, Hot Wheels, and Matchbox. Id. The company also holds licenses for Barney, Sesame Street, and Star Wars. Id. Mattel’s net sales for 2007 were $5.97 billion. Id. 82 CSCP, Fisher-Price Recalls Licensed Character Toys Due To Lead Poisoning Hazard, Release #07-257, (Aug. 2, 2007), available at http://www.cpsc.gov/cpscpub/prerel/prhtml07/07257.html. The products were recalled by Fisher-Price, a subsidiary of Mattel.

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the surface paints.83 These recalls are indicative of a breakdown in the well-defined division of

labor that has helped drive China’s export success.84 The company that produced the toys

recalled on August 2 was a longtime supplier for Mattel run by an owner who had operated his

factory for over a decade and had a good record for treatment of his employees.85 Mattel’s

vendors were contractually required to use paint that was either preapproved by Mattel or

independently tested.86 The owner accepted paint from a neighboring paint factory without

testing it, and applied it to the toys.87

The second recalls followed shortly thereafter, on August 14, 2007, when the first batch

of 7.3 million Polly Pocket dolls were recalled by Mattel due to small magnets that could

dislodge from the dolls and be swallowed by children.88 Similar magnets were used on a number

of Mattel toys prompting a total of 18.2 million recalled toys for the dangerous magnets.89 The

magnets were so strong that if two were swallowed together, they could perforate a child’s

intestines. This recall did not occur until three children had been hospitalized after ingesting the

magnets.90 The presence of dangerous detachable magnets have nothing to do with shoddy parts

or poor assembly, but rather with the design flaw of including such strong yet small detachable

magnets. Ultimately, in order to salvage their relationship with the Chinese government, where

Mattel produces approximately two thirds of their toys, Mattel was required to publicly

83 CPSC, Mattel Recalls “Sarge” Die Cast Toy Cars Due To Violation of Lead Safety Standard, Release #07-270, (Aug. 14, 2007) available at http://www.cpsc.gov/CPSCPUB/PREREL/prhtml07/07270.html. 84 See supra notes 12--13, and accompanying text. 85 Shu-Ching Jean Chen, Subcontractor at Heart of Fisher-Price Toy Recall is Apparent Suicide, Forbes, Aug. 13, 2007 [hereinafter Chen, Subcontractor]. The proprietor, Zhang Shuhong, died of an apparent suicide shortly after the recall. Id. 86 Gabriel Allen, Get the Lead Out: A New Approach For Regulating the U.S. Toy Market in a Globalized World, 36 Ga. J. Int’l & Comp. L. 615, 620 (2008). 87 Chen, Subcontractor, supra note 85. 88 U.S. Consumer Prod. Safety Comm'n, Additional Reports of Magnets Detaching from Polly Pocket Play Sets Prompts Expanded Recall by Mattel, Press Release (Aug. 14, 2007), available at http://www.cpsc.gov/cpscpub/prerel/prhtml07/07273.html [hereinafter CPSC Magnet Press Release] 89 Shu-Ching Jean Chen, A Blow to Hong Kong’s Toy King, Forbes, Aug. 15, 2007. 90 CPSC Magnet Press Release, supra note 88.

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apologize to the Chinese people for their design error leading to the negative publicity associated

with the recalls.91 The presence of lead paint is representative of the use of substandard,

dangerous components in overseas manufacture. The detectable magnets represent a design

failure. Together, the detection of these risks represents the principal problem faced by the

CPSC.

D. The Federal Response to the 2007 Recalls in China and the U.S.

1. China’s Response. --- China quickly and publicly responded to the negative publicity

surrounding the recalls. In the immediate aftermath, the Chinese government sought to shore up

its image by conducting inspections, increasing standards, and revoking licenses of

underperforming companies.92 China’s General Administration for Quality Supervision,

Inspection and Quarantine imposed an export ban on the company behind the August 2 Mattel

recall.93 Ultimately, 700 trade licenses were revoked.94 A strong message was sent to

government regulators who had been perceived as lax and corrupt when the former Chief of the

Chinese FDA was executed for corruption, ostensibly for accepting bribes to relax standards.95

These changes, along with increased demands from importing companies, have sharply

increased costs facing Chinese producers. Following the recalls of 2007, the testing fees

required to get an export license in China increased by approximately 25%.96 Whether these

91 See Geoff Dyer, et. al, Mattel Apologises to “the Chinese People”, Fin. Times, Sep. 21, 2007. 92 See Half of China's Toy Exporters Out of Business, Xinhua News Agency, Oct. 14, 2008, available at http://www.china.org.cn/business/news/2008-10/14/content_16611295.htm. 93 Chen, Subcontractor, supra note 85. 94 See 700 Toys Export Licenses Revoked, China Daily, June 10, 2008, available at http://www.china.org.cn/business/news/2008-06/11/content_15736795.htm. 95 See Joseph Kahn, China Quick to Execute Drug Official, N.Y. Times, Jul. 11, 2007. 96 See 50% of Toy Firms ‘Gone in 2 Years’, China Daily, Oct. 21, 2008, available at http://www.china.org.cn/business/2008-10/21/content_16641477.htm.

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changes will lead to overall safety improvements remains to be seen. As it stands, over 50% of

the country’s toy exporters shut down in 2008.97

There has also been some preliminary movement towards joint U.S.-China cooperation

designed to increase scrutiny of goods as they are produced. On September 11, 2007, the CPSC

and its Chinese counterpart, the General Administration of Quality Supervision, Inspection and

Quarantine, signed a Joint Statement on enhancing consumer product safety.98 This agreement

embodies a ban on lead, which has been in effect in the U.S. since 1978, but does little beyond

outlining general principles, such as the need to take steps to increase understanding of U.S.

standards and an agreement to hold regular product safety talks, including monthly discussions

of recall activity and trends, between U.S. and Chinese regulators.99

Chinese authorities have been reluctant or unwilling to take on some of the systemic

problems in the toy manufacturing industry. While symbolic steps abound, regulation

nonetheless remains weak. 100 For example, according to a foreign ministry spokesman, the

Chinese government now asks toy manufacturers to check for flaws in the designs provided by

foreign buyers.101 There is little oversight in place to ensure that companies comply with this

new mandate, no defined steps a company can take if it does detect a design defect to mediate

97 Id. Trade policy both at home and abroad, as well as the appreciation of the Yuan and decreased demand in the United States and Europe, may have contributed to this decline. 98 See Wayne M. Morrison, U.S.-China Trade Issues, CRS Report for Congress, at 11, RL 33536, (May 2008) available at http://ncseonline.org/NLE/CRSreports/08Mar/RL33536.pdf . Steps included increased inspections, educational programs for Chinese manufacturers, bilateral technical personal exchanges and training, informational exchanges with U.S. officials, and the development of a product tracking system. 99 See U.S. Consumer Product Safety Commission, U.S. and Chinese Product Safety Agencies Announce Agreement to Improve the Safety of Imported Toys and Other Consumer Products, Release #07-305, Sept. 11, 2007, available at http://www.cpsc.gov/cpscpub/prerel/prhtml07/07305.html. See also Associated Press, China Signs Pact to Ban Lead Paint in Export Toys, N.Y. Times, Sept. 12, 2007. 100 Nicole J. Kaplan, Analyzing the Recall of Chinese-Made Products: Understanding the Problems and Creating Effective Solutions, 4 Bus. L. Brief (Am. U.) 39, 40 (2007). 101 See Toy-Makers Advised to Check Foreign Design Flaws, Xinhua News Agency, Nov. 26, 2008, available at http://www.china.org.cn/business/news/2008-11/26/content_16832904.htm.

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the potential harm, and no effective guidance as to what constitutes a design defect at all.102

One hopeful sign is that in response to widespread sickness death caused by melamine-tainted

milk, some lawyers in China have recently been trying to use class action suits that have

previously been extremely rare in China.103 In terms of lead, China’s problem runs far deeper

than toys, including leaded gasoline and a range of other consumer products.104 There are little

signs of the comprehensive reform required to address these problems.

2. CPSC’s Response. --- Despite the apparent breakdown in the consumer product safety

regulation, the CPSC was initially reluctant to engage in large-scale reform. The CPSC

seemingly wanted to maintain the status quo of an honor system, with companies testing their

own products for contaminants and setting their own safety standards.105 The CPSC did request

additional funding, but planned to cut its staff by an additional 18 members prior to

congressional involvement.106 Other incremental steps abound. The CPSC has been working

with Customs and Border protection to develop best practices, and these two agencies have

begun to share information.107 The CPSC did attempt to increase its engagement with China by

having CPSC staff conduct three training events for Chinese officials that focused, in part, on

regulatory requirements for toys.108 The CPSC also extended its informational campaign to

102 By definition a design defect is a risk that emerges from regular use of the product. There is no reason to think that a manufacturer would be better situated than a product designer or tester to uncover a defect. 103 See Edward Wong, Families File Suit in Chinese Tainted Milk Scandal, N.Y. Times, Jan. 20, 2009. According to Wong, the Communist Party discourages such suits on the grounds that they may erode “social stability.” Id. 104 Joe McDonald, China’s Lead Problems Go Beyond Toys, USA Today, Aug. 16, 2007. Researchers have found that up to one-fifth of Chinese children tested have unsafe levels of lead in their blood. 105 Stephanie Desmon, Rising Tide of Unsafe Imports: Reform is Sought at Federal Level, Balt. Sun, Aug. 15, 2007. 106 See infra Part III.A 107 Import Safety Action Plan, supra note 4, at 7. 108 CPSC, Performance Report, supra note 37, at 24. Other reviews and information exchanges also occurred between CPSC staff and Chinese officials. Id. at 23.

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Chinese manufacturers and American importers.109 In another somewhat symbolic step, the

CPSC created a number of working groups that have resulted in pledges from China to continue

to crack down on dangerous imports.110

3. Dangerous Product Detection Moving Forward. --- In the long run, foreign companies

will likely outsource to other countries or take more control of the plants in China if standards do

not improve.111 Still, many of the component parts will likely come from China for the

foreseeable future, regardless of where the final product is assembled.112 Even if China was able

to dramatically increase its regulatory ability and crack down on faulty assembly and the use of

lead paint or other toxic chemicals, many dangerous products would still enter the U.S. owing to

the general problem of lack of effective supervision, oversight, and communication between the

two countries. Yet even if the lead were removed, the U.S. would still face a problem of

dangerous toys due to design defects. Over 75% of the 550 recalls occurring since 1988 have

been attributed to dangerous design flaws.113 The total amount of recalls only appears to be

109 Id. at 24. 110 Nancy A. Nord, Acting Chairman, U.S. Consumer Product Safety Commission, Testimony, Submitted to the Subcommittee on Financial Services and General Government, House Committee on Appropriations, March 11, 2008, available at http://www.cpsc.gov/pr/nord03112008.pdf [hereinafter Nord, Testimony]. Nord herself was an acting Chairman at the time of the 2007 recalls.

The Commission was missing a permanent Chairman since July 2006. President Bush’s appointee had been a lobbyist for the National Association of Manufacturers, and had been forced to withdraw after it was revealed that he had received a $150,000 exit payment from NAM. See Gretchen Morgenson, Toy Magnets Attract Sales, and Suits, N.Y. Times, July 15, 2007. 111 Barboza, supra note 24. Mattel produces about half of its toys in plants that it operates, while the other half---typically holiday toys and other limited run items---are produced by subcontractors. 112 See supra note 23 and accompanying text. 113 Paul W. Beamish & Hari Bapuji, Toy Recalls and China: Emotion v. Evidence, 4 Management and Organization Review 197, 202 (2008) (discussing their analysis of toy recalls in the U.S. between 1988 and 2007). This further indicates that the public outcry against Chinese-manufactured goods is disproportionate as the designs for the goods overwhelmingly originate in the United States. This mistake was not helped by the media’s reporting of the 2007 recalls. Reports were littered with inflammatory article titles, see e.g. Shu-Ching Jean Chen, Trapped in the Chinese Toy Closet, Forbes, Aug. 21, 2007, and basic factual mistakes, see e.g. Joe McDonald, China’s Lead Problems Go Beyond Toys, USA Today, Aug. 16, 2007 (claiming that the 18.2 million toys recalled by Mattel were for lead paint, not a design defect).

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increasing.114 Beyond the difficulty of enacting and enforcing international safety standards,

there is little motivation for individual domestic companies to heavily regulate the products they

import into the U.S. Though Mattel had to recall millions of toys, in what was one of the largest

recalls ever, a recent study conducted by NERA concluded that economic impact of the recalls

and related events had no impact on Mattel’s stock price.115 The authors found that even these

huge recalls did not have a statistically significant effect on the largest firms that dominate the

toy market.116 Thus, there seems little hope that the total number of unsafe products being

imported into the U.S. will decrease any time soon.

Thus, products continue to be produced overseas and there persists a danger that they will

be imported without being checked. As it stands, toys are not inspected by regulators as they

enter the country.117 The strong economic incentives to produce toys quickly and cheaply and to

limit oversight abroad show little sign of reversing. Taken together, the two Mattel recalls each

represent the difficulty of curbing dangerous products when they are produced overseas and

imported abroad. Without an efficient oversight body, the variety in the root causes of product

flaws—whether due to faulty operations of the foreign manufacturer or the misguided design

developed by a domestic company—is irrelevant. The point is that any product flaws are likely

to persist because there is no one charged with stopping production when a good is manufactured

abroad. Whether by design defect, shoddy manufacturing, substandard component parts, the

presence of lead, or any number of risk factors will inevitably lead to some of those being

dangerous when used by children. As a result, the CPSC largely operates in a post-hoc fashion.

The Commission must detect a systemic pattern of injuries or deaths before a product is recalled,

114 Id. 115 Allen et. al, supra note 12, at 10--11. 116 Id. at 11-12. The study found that such recalls would have major impacts on smaller producers. Id. at 12--13. 117 See Bamberger & Guzman, supra note 55, at 1416.

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thereby ensuring that a great number of units are already in use before a recall may begin.118 The

end result is that the U.S. is largely constrained from impacting the safety of goods throughout

the production process.

Though additional funding for the CPSC is included in the CPSIA, there is little chance

that the role of the CPSC in preemptively detecting dangerous products will substantially

increase. This is largely a result of the extraterritorial regulation required to prevent the

manufacture of dangerous products in the first place. Extraterritorial inspection is, of course,

extremely expensive as it requires inspectors to travel overseas.119 It also usually requires the

cooperation of the country in which the inspectors are visiting plants, which has not been readily

forthcoming in China.120 In the absence of such cooperation, there is nothing compelling

manufacturers to grant inspectors access. Even if the government inspectors were to detect a

problem, they are legally unable to demand anything from the firms they are inspecting.121 Thus,

the CPSC remains a largely reactive agency that must rely on its agents, other law enforcement

bodies, companies, and individual complainants when regulating dangerous toys and jewelry.

PART II: THE STATE ATTORNEYS GENERAL AND DANGEROUS CHILRDEN’S

PRODUCTS

The principle problem that emerged from the recalls of 2007 was the lack of sufficient

incentives to ensure that all toys imported into the United States were safe, and the limited

118 Felcher, supra note 54, at 174. 119 See Bamberger & Guzman, supra note 55, at 1420. 120 Id. 121 Id. In light of the complexity of the supply chains for many such products, it would be difficult to institute a comprehensive ban on a single firm. See supra note 20 and accompanying text. Though the U.S. could condition access to its market upon the allowance of inspections, the prospects for this are remote in light of higher priorities regarding trade with China. See Bamberger & Guzman, supra note 55, at 1420.

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effectiveness of current federal enforcement. One group, however, did have the ability and

initiative to attempt to hold Mattel accountable for the inclusion of lead paint on children’s toys.

State Attorneys General, acting in different states, together pursued an action against Mattel,

ultimately achieving a settlement that included an agreement to abide by higher standards than

those that emerged in the CPSIA and a cash settlement for the states to further combat lead

ingestion.122 This settlement was the outgrowth of the common law powers of the State

Attorneys General, who, acting in concert, stepped into the regulatory void left by the federal

government and private bar. The CPSIA, discussed in Part III, seeks to augment the powers of

the state Attorneys General by allowing them to enforce the CPSA in federal court. In this

section, I will discuss the already-present arrows in the state attorney general quiver when

dealing with dangerous children’s products (Parts II.A and II.B), how these powers manifested

themselves in the Mattel settlement and some of the limitations on state Attorney General

enforcement under state law (Part II.C). I will then turn to the CPSIA in Part III to consider

whether allowing state Attorneys General to enforce the federal law substantially adds to their

enforcement power, thereby making consumers safer in the long run.

A. The Common Law Powers of the State Attorney General

The state Attorney General is the chief law enforcement officer in her state. 123 As such,

she is responsible not only for advising and defending state agencies and officials, but also for

representing the citizenry. The state Attorney General’s authority to litigate in the public interest

is a holdover from the English Common Law.124 Though ostensibly members of the executive

122 See Part II.D infra. 123 Justin Davids, State Attorneys General and the Client-Attorney Relationship: Establishing the Power to Sue State Officers, 38 Colum J. L. & Soc. Probs. 365, 371 (2005). 124 See State ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir. 1976). As the Fifth Circuit noted, “[t]he office of the attorney general is older than the United States.” Id. at 268 n.4.

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branch, state Attorneys General have long maintained a limited independence.125 This is partly

because the state Attorney General is a popularly elected position in the majority of states.126

Such traditional autonomy from the executive branch has allowed the state attorney general to

maintain her ultimate duty to protect the interests of the people of her state and ensure that

justice is done.127 However, this power is not limitless: While the state attorney general’s

powers and duties at common law are largely left undefined, they can be limited by legislative

action.128

Virtually all state attorneys general are responsible for enforcing the consumer protection

statutes enacted in their state.129 State attorneys general have only recently undertaken

cooperative enforcement strategies and become the leading product safety advocates.130 The state

attorney general’s ability to set and enforce state product standards is an area rife for conflict

with the legislature and governor of a state.131 Indeed, in light of separation of powers concerns,

a minority of states constrict the state attorney general’s ability to file suits independently of the

125 Id. See also William P. Marshall, Break Up the Presidency?: Governors, State Attorneys General, and Lessons from the Divided Executive, 115 Yale L.J. 2442, 2446 (2006). 126Nat’l Ass’n of State Attorneys Gen., State Attorneys General: Powers and Responsibilities 15 (Lynne M. Ross ed., 1990) [hereinafter State Attorneys General]. The Attorney General is elected in forty-three states and appointed by the governor in five states (Alaska, Hawaii, New Hampshire, New Jersey, and Wyoming). Id. The AG of Main is elected by the legislature and the AG of Tennessee by the State Supreme Court. Id. 127 See State v. Lead Industries Association, Inc., 951 A.2d 428, 470--72 (S.C. R.I. 2008). In Lead

Industries, the court analogized the responsibilities of the state attorney general to that of a federal prosecutor: “It is the duty of the Attorney General to see to it ‘that justice shall be done’ not only in the context of criminal prosecutions, but also while he or she carries out all the functions of that high office---including engagement in litigation in the civil arena.” Id. See also State Attorneys General, supra note 126, at 6. 128 Shevin, at 268--69. See also State Attorneys General, supra note 126, 31--35 (discussing state constitutional and statutory underpinnings of attorney general power). 129 State Attorneys General, supra note 126, at 207. 130 Steven Paul Mahinka & Kathleen M. Sanzo, Multistate Antitrust and Consumer Protection Investigations: Practical Concerns, 63 Antitrust L.J. 213, 214--15 (1994). See also State Attorneys General, supra note 126, at 207. 131 See Marshall, supra note 125 at 2456 (giving as an example a governor who ran for office by promoting the creation of a strong business climate but once elected finds himself hampered by an aggressive state Attorney General who is aggressive in maintaining consumer actions).

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rest of the executive branch.132 Protecting consumers from dangerous toys takes up a relatively

small amount of already scarce state attorney general resources.133

The doctrine of parens patriae provides standing for a state to sue on behalf of its own

citizens.134 This allows the state attorney general to bring suit when its quasi-sovereign interests

have been infringed. The violation must be of an “interest apart from the interests of particular

private parties” in order for parens patriae to apply. 135 These interests have been defined as an

“interest in the health and well-being-both physical and economic-of its residents in general.”136

In a parens patriae suit, the harm alleged must be borne by society as a whole.137 State attorneys

general are able to sue products manufacturers as “super plaintiffs” on behalf of the residents of

the state if the harm is significant enough that the state’s quasi-sovereign interests are

132 State Attorneys General, supra note 126. 133 According to a recent survey of complaints conducted by the Consumer Protection Project of the National Association of Attorneys General (NAAG), “retail sales” were ranked eighth and “internet sales” ninth. NAAG Consumer Protection Project, National Top 10 List of Consumer Complaints for 2007, NAAGazette, at http://www.naag.org/naag-issues-national-top-10-list-of-consumer-complaints.php (last visited Nov. 10, 2008). The unscientific study reflects a compilation of reports filed by office of the Attorneys General around the country. The most reported complaint was for debt collection, followed by auto sales, home repair/construction, telecommunications/slamming/cramming, automotive (general), telemarketing/do-not-call, and financial/investments. Of the reported complaints, only contests/sweepstakes/promotions generated fewer complaints than sales.

In light of the low emphasis on consumer product enforcement, NAAG’s training institute recently created a “Consumer Protection Fellowship Program.” According to the project director, it was created shortly after the 2007 recalls to address “emerging consumer issues,” such as “product safety,” in order to produce research and policy advocacy from the Attorney General perspective. But for this newly enacted fellowship, the only other source for research and policy develop is the National State Attorneys General Program at Columbia Law School, “which the NAGTRI/State Center Consumer Protection Fellow’s research would complement.” See Dennis Cuevas, NAAG, NAGTRI Announces New Consumer Protection Fellowship, NAAGazette, at http://www.naag.org/nagtri-announces-new-consumer-protection-fellowship-program.php (last visited Nov. 10, 2008). 134 State of Fla. ex. rel Shevin v. Exxon Corp., 526 F.2d 266, 2268--70 (1976). See also Donald G. Gifford, Impersonating the Legislature: State Attorneys Generals and Parens Patriae Product Litigation, 49 B.C. L. Rev. 913, 934 (2008). 135 Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592, 607 (1982). See also State Attorneys General, supra note 126, at 92. 136 Snapp, 458 U.S. at 607. See also Missouri v. Illinois, 180 U.S. 208, 240-241 (1901) (finding jurisdiction when the "substantial impairment of the health and prosperity of the towns and cities of the state" are threatened). 137 Gifford, supra note 134, at 934. Gifford notes that this line of argument forecloses strict products liability, negligence, implied warranty among other more common products liability theories. Id.

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implicated.138 The role of the state attorney general is to protect the public, so their goal may be

achieved through public awareness raised by bringing the case, rather than through monetary

recovery alone.

B. State Attorney General Enforcement Authority

Where not preempted by federal law, a state attorney general can also bring a consumer

protection action under the Unfair or Deceptive Acts and Practices (UDAP) statutes that exist in

every state and the District of Columbia.139 UDAP statutes generally give broad authority to the

attorney general to combat virtually any type of behavior that injures consumers in the state.140

States have not, for the most part, crafted detailed statutes that define unfairness, leaving the

determination up to the state Attorney General.141 States were able to extend the definition of

“unfair acts and practice” to encompass breach of an implied warranty, failure to protect

138 Id. at 939 139 See Allan S. Brown and Larry E. Hepler, Comparison of Consumer Fraud Statutes Across the Fifty States, Comparison of Consumer Fraud Statutes Across the Fifty States 55 Fed'n Def. & Corp. Couns. Q. 263 (Spring 2005) (presenting an analysis of each state's consumer fraud and deceptive business practice acts). California's Unfair Competition Law, Cal. Civ. Code § 17200, is one of the most well know. It is available online at http://www.leginfo.ca.gov/cgi-bin/displaycode?section=bpc&group=17001-18000&file=17200-17210. § 17200 is indicative of the relaxed requirements of UDAP actions relative to traditional common-law tort claims. There was no standing requirement nor a requirement that the plaintiff show particularized injury. Brown & Hepler at 266. All that had to be shown was that the public was likely deceived by the conduct in question. In 2004, Proposition 64 amended the Statute to require the showing of a particularized injury. The contours of reliance are still being litigated in California. See In re Tobacco II Cases, 142 Cal. App. 4th 891 (2006). The California Supreme Court has since granted review. Other statutes are based federal acts like Uniform Deceptive Trade Practices Act, the Uniform Consumer Sales Practices Act, or the Federal Trade Commission Act, but vary substantially from State to State in terms of what particular activities are prohibited. Id. 140 See Gifford, supra note 134, at 939. The broad statutes that combat fraud are universally supplemented by more specific legislation that empowers Attorneys General to investigate and litigate particularly troublesome industries. 141 Kaplan & Smith, supra note 49, at 315. See also Travis P. Nelson, Trends in Subprime Lending, 17-AUG Bus. L. Today 27, 28 (2008) (“Plaintiffs may allege that a lender's practices are immoral, unethical, oppressive, or unscrupulous, and offensive to public policy-- generally, an ‘unfair’ practice. Plaintiffs may also argue that the terms of a given loan are deceptive or confusing to an average consumer, such as offering very-short-term ‘teaser’ rates, advertising that rates ‘may’ increase when in fact they undoubtedly will, or providing exotic ARMs that are too complex for the borrower to comprehend--generally, a ‘deceptive’ practice.”).

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customers from unnecessary dangers, and violations of existing laws.142 Courts have acquiesced

to the state Attorneys General’s definition of “unfairness” that applies to the sale of defective

products.143 Some states have statutes that define unsafe children’s products as those that violate

federal standards for the purposes of UDAP actions.144

If enacted, state Attorneys General are also able to bring actions based on specific hazard

statutes. In the realm of children’s products, such statutes can only exist in areas not preempted

by federal regulations. In response to the perceived lack of federal action, legislators in twenty-

one states passed laws raising standards for lead, phalates, and other dangerous chemicals in

children’s products.145 Should the state standard conflict with the federal standard, it would

necessarily be preempted146 unless the state was purchasing the material itself or had obtained a

waiver from the CPSC.147

142 Kaplan & Smith, supra note 49, at 293. 143 Id. at 277. 144 See Unsafe Children’s Products Prohibition, VT. Stat. Ann. tit. 9, Ch. 63 § 2470b, available at http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=09&Chapter=063&Section=02470b. This statute requires the department of health to create and maintain a comprehensive list of children's products that do not conform to federal standards, have been recalled, or have had a warning issued about their use which constitutes a safety hazard. The statute further defines as an “unfair or deceptive act or practice” the act of selling any product that appears on that list. Vermont’s UDAP statute is VT. Stat. Ann. tit 9, §2453, and is available at http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=09&Chapter=063&Section=02453. 145 Doug Farquhar, 2007-2008 State Environmental Public Health Legislation, 71 Journal of Environmental Health 54, 55 (Oct. 2008). An example of permissible state action is making CPSC voluntary recalls mandatory. For an example of an Act that limits lead content in children’s products see S. 152 2008 Vt. Acts, Act 193, available at http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2008/acts/ACT193.HTM (lowering the allowable amount of lead in children’s products). 146 The CPSA provides that “no State or political subdivision of a State shall have any authority either to establish or to continue in effect any provision of a safety standard or regulation which prescribes any requirements . . . unless such requirements are identical to the requirements of the Federal standard.” 15 U.S.C. 2075(a) (2008). 147 It is of note that the CPSIA authorizes the CPSC to authorize stricter state standards so long as they do not unduly burden interstate commerce. The CPSIA also allows states to continue to enforce state standards for toys and children’s products that were in effect before August 13, 2008. See, John B. O’Loughlin Jr., Consumer Product Safety Improvement Act: Not the Last Word on Preemption, 36 Product Safety & Liability Reporter 1037, 1039 (2008).

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Despite the general statutory authorization, consumer protection actions in the children’s

products arena are relatively uncommon.148 This may be explained, in part, by the ability of state

Attorneys General to issue civil investigative demands (CID).149 This allows the attorney

general to serve subpoenas and obtain discovery prior to filing any complaints.150 The

notification of the possibility of a full investigation and subsequent filing of charges provides a

mechanism of enforcement short of litigation.151

1. Multistate Litigation. --- One of the principle ways state Attorneys General have been

able to regulate entire industries is through the use of UDAP statutes in multistate litigation.

Multistate litigation has been called the “most significant development in state consumer

protection enforcement.”152 The consumer protection statutes enacted in most states provide a

foundation for a significant amount of multistate litigation.153 The state attorneys general’s

parens patriae standing allows them to amalgamate the claims of individual victims.154 These

cases became more prevalent in the 1980s, as underfunded state attorneys general began

prosecuting large, well-funded corporations.155 In each participating state, assistant attorneys

general file similar complaints against a corporation, all alleging similar deceptive or unfair

148 See supra Part II.B. 149 State Attorneys General, supra note126, at 208. 150 Id. This power, or its equivalent in a client agency, is available in all jurisdictions except Nevada, Utah, and Puerto Rico. Id. at 208. 151 The CPSC also uses this tactic on the federal level. The potential cost of recalls and product redesign has allowed the CPSC to use “suggestions” to effect large scale voluntary industry compliance. See Kaplan & Smith, supra note 49, at 259. 152 State Attorneys General, supra note 126, at 215. 153 See Jason Lynch, Note, Federalism, Separation of Powers, and the Role of State Attorneys General in Multistate Litigation, 101 Colum. L. Rev. 1998, 2024 (2001). 154 See supra notes 133--135and accompanying text. 155 Lynch, supra note 153, at 2003--04

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conduct.156 The threat of pending litigation in multiple states provides an extremely strong

incentive for companies to settle.157

State Attorneys General were notably able to achieve major regulation of the tobacco

industry through the use of multistate litigation.158 State Attorneys General attained a milestone

settlement with the major tobacco companies, a gain that was previously unimaginable when the

claims were filed.159 In addition to recovering millions of dollars, the states achieved major

concessions, including the prohibition of marketing to children and other limitations on tobacco

advertising.160 Indeed, the educational and public sanctioning effect of the tobacco settlement

has had further ancillary benefits.161

Still, the victory over tobacco has not translated into success in other areas of public

product regulation. Federal law preempts the States from regulating many consumer products.162

While the Consumer Product Safety Act exempts some products from coverage, many of these

are still regulated by other comprehensive federal schemes.163 Thus, product safety standards are

largely driven by the determinations of federal agencies.164 Though the broad UDAP statutes are

largely able to avoid preemption challenges,165 in practice their use is largely limited to

conspicuous actions on behalf of sellers and manufacturers that rise to the level of fraud. On a

fundamental level, because “unfair and deceptive” is so broadly defined, in practical terms courts

156 NAAG has often helped coordinate these efforts by helping develop strategy, providing logistical support such as model complaints, and holding meetings of serving Attorneys General and their deputies. 157 See Gifford, supra note 134, at 915--16. 158 See Ricard Ieyoub & Theodore Eisenberg, State Attorney General Actions, the Tobacco Litigation, and the Doctrine of Parens Patriae, 74 Tul. L. Rev. 1859 (2000). See also Martha A. Derthick, Up in Smoke (2002). 159 See Robert L. Rabin, The Tobacco Litigation: A Tentative Assessment, 51 Depaul L. Rev. 331 (2001). 160 Id. at 351. 161 Id. 162 American Shooting Sports Council, Inc. v. Attorney Gen, 711 N.E.2d 899, 903 (Mass. 1999). 163 American Shooting Sports, at 903 n.8. (listing examples of other regulatory schemes that limit states’ ability to regulate despite exemption from preemption by CPSA). 164 Kaplan & Smith, supra note 49, at 257--58. 165 Lynch, supra note 153, at 2024.

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will only apply it to the most egregious conduct---like that of the tobacco industry’s years for

misinforming consumers about the threats of smoking cigarettes. Furthermore, the rules that

emerge from adjudication are oftentimes specific to the facts of the case rather than a clear

articulation of a single standard.166 As with torts suits, adjudication is necessarily backwards-

looking.167 While adjudication can act as a deterrent, basic civil procedure ensures that only the

parties before the court are bound by the immediate decision.168

2. State Attorney General Regulations. --- More than half of the state Attorneys General

are also able to promulgate rules and regulations under these statues in addition to bringing

government enforcement actions.169 This rulemaking process does provide more certainty than

ad hoc enforcement, but likewise suffers from some important limitations. The rulemaking

process, on both the state and federal level, is time consuming and costly. An inherent aspect of

rulemaking is the notice and comment process to ensure the fairness of promulgated rules.170

This allows the participation of all those affected, not just the parties to a specific dispute.171

This is, however, very expensive. As it stands, virtually every state attorney general lacks the

necessary resources to develop their own cases under their own statutes.172 Most attorneys

general hold popularly elected offices. With the inevitable reelection campaign, it is difficult to

sacrifice current enforcement for prospective results.173

166 See David Shapiro, The Choice of Rulemaking or Adjudication in the Development of Administrative Policy, 78 Harv. L. Rev. 921 (1965). 167 Peter L. Strauss, Administrative Justice in the United States, 259 (2d. ed. 2002). 168 Id. at 260--61. 169 Kaplan & Smith, supra note 49, at 295. 170 American Standard, Inc. v. U.S., 602 F.2d 256, 267 (Ct. Cl. 1979). 171 Shapiro, supra note 166. 172 James F. Barger, Jr. et al., States, Statutes, and Fraud: An Empirical Study of Emerging State False Claims Acts, 80 Tul. L. Rev. 465, 485 (2005). 173 Due to the necessary time constraints of rulemaking, unless the process is started at the beginning of the attorney general’s term, there is no guarantee that they will still be in office to reap the benefits of any ensuing regulations.

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There are several distinct disadvantages to this reallocation of authority to state attorney

generals. First, one of the proffered benefits of rulemaking is that it takes standard setting ability

from judges, who are not politically accountable or possess any measure of expertise in the

regulated agency, and places it in the hands of administrative agencies.174 Though they are

usually politically accountable, attorneys general are unlikely to be experts in the particular field

in which they are regulating. Second, the “political question” doctrine has been used to dismiss

some regulatory rulemaking that sought to increase regulatory standards.175 For example, in

American Shooting Sports, the Attorney General of Massachusetts sought to impose strict

performance and safety requirements on handguns sold in the commonwealth. The court noted:

[t]he Attorney General may not use his regulatory authority to pursue general policy goals or public issues that limit or ban the sale of lawful products under the general rubric that purchasers of the products, or third parties who may come into contact with them, would be better off if the products were not marketed at all. Questions concerning whether such products should be sold, or their sales restricted, are primarily legislative in character.176

Thus, the Attorney General’s power was limited to regulating deceptive and unfair

practices of products that “fail fundamental requirements of safety and performance.”177 Third,

the power of attorneys general is inherently limited to areas where standards do not already exist.

If another agency on the state or federal level has acted in a particular area, most state attorneys

general are precluded to act.178 Fourth, private plaintiffs may be able to use regulatory violations

174 Strauss, supra note 167, at 259. 175 Giffin, supra note, at 47. 176 American Shooting Sports, at 903. 177 Id. at 904. In this case, the court found that the Attorney General had not overstepped his bounds by imposing strict regulations on handguns. 178 Kaplan & Smith, supra note 49, at 309. For an example of a consumer fraud rule issued by a SAG, see Vermont CF 120: Representations of Vermont Origin, available at http://www.atg.state.vt.us/upload/1225834225_Representations_Of_Vermont_Origin_CF_120.pdf (regulating representations and company names indicating food products are of Vermont origin).

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as proof in private UDAP claims.179 Unlike in the federal system, state laws generally do not

reject a private right of action.180 However, state attorney general enforcement of federal law

addresses many of these concerns as discussed in Part.III infra.

C. State Attorney General Enforcement in Action

1. The Mattel Settlement. --- The Mattel settlement provides an example of state

Attorneys General working together to achieve a multistate settlement with national

ramifications. State Attorneys General launched a sixteen month investigation of circumstances

surrounding the recalls. 181 In this multistate litigation, Massachusetts led an Executive

Committee, consisting of Assistant Attorneys General from Arizona, Florida, Kentucky,

179 Though state Attorneys General do not generally have the authority to litigate on behalf of individual consumers, in some cases a state may be able to bring suit as a subrogee of a resident’s claim against a manufacturer. See State Attorneys General, supra note, at 210. Subrogation is a traditional tort doctrine by which a State can bring a claim on behalf of its residents. Unlike suits in parens patriae, the state is constrained by the inherent limitations of the client’s case in subrogation actions. See American Nat'l Fire Ins. Co. v. Yellow Freight Sys., Inc., 325 F.3d 924, 936 (7th Cir. 2003) (“It is settled that, as a general rule, an insurer steps into the shoes of the insured and “acquires no greater or lesser rights than those of the insured.”) (Internal quotations and citations omitted). See also R. Keeton & A. Widiss, Insurance Law § 3.10(a)(1) (1988) (the subrogee steps “into the shoes” of the subrogor).

For example, in pursuing tobacco litigation, some Attorneys General did not use subrogation suits because they wanted to avoid traditional defenses such as assumption of risk. See Michael Debow, The State Tobacco Litigation and the Separation of Powers in State Governments: Repairing the Damage, 31 Seton Hall L. Rev. 563, 571--72 (2001). The subrogation power is better suited to claims where the defendants are unable to afford a private attorney or their potential recovery is not enough to inspire a contingency fee lawyer to take their case than the typical products liability tort. Instead, subrogation is more often used by the state Attorneys General to seek reimbursement from a tortfeasor whose actions harmed a Medicaid recipient or when an insurer brings claims on behalf of their insured to recover payments. At the state level, these suits are statutorily authorized both under the federal statutes governing Medicaid and similar state statutes. Id. at 25--26. Subrogation suits are also common as accompaniments to criminal actions. Many states authorize the Attorney General to bring suit to recoup compensation paid from crime victims’ funds. See e.g. Missouri Revised Statutes §595.040(1). 180 Kaplan & Smith, supra note 49, at 310. 181 See Office of the Attorney General of Massachusetts, Massachusetts Attorney General Martha Coakley and 38 Other AGs Reach $12 Million Settlement with Mattel Regarding Toys Recalled for Excessive Lead Paint, Press Release, Dec. 15, 2008, available at http://www.mass.gov/?pageID=cagopressrelease&L=1&L0=Home&sid=Cago&b=pressrelease&f=2008_12_15_mattel_multistate_agreement&csid=Cago.

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Missouri, Ohio, Pennsylvania and Vermont.182 In sum, 39 state Attorneys General joined in the

settlement183, with the potential for more states to join as they evaluate the claims.

The complaints filed by the state Attorneys General included claims of unfair and

deceptive trade practices.184 After some of the products were tested, it emerged that some of the

paint in the toys was up to 11% lead, a gross violation of the then federal standard of 0.06%

lead.185 The “unfair and deceptive” practice occurred when the defendants allowed a deceptive

“Certificate of Compliance,” indicating that the toys met federal standards as required by federal

law, to be issued.186 Because this certificate was based on a single past test, it was unfair and

misleading in regard to all the batches of toys that were imported after it was issued, but which it

nonetheless purportedly represented. The complaint further alleged that the introduction of

products that contained lead, the failure to have adequate safeguards in place or conduct

182 Id. 183 The states were Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming. See Final Judgment By Consent, State of Mississippi ex rel Jim Hood v. Mattel, Inc., filed Dec. 15, 2008, Chancery Court of Hinds County, MS, available at http://www.ago.state.ms.us/images/uploads/forms/matteljudgement.pdf [hereinafter Mattel Consent Judgment]. California also took part in negotiations, reached a separate agreement under its Safe Drinking Water and Toxic Enforcement Act. California alleged that Mattel had violated Proposition 65, the state’s safe drinking water and toxic enforcement law by failing to warn about the risk of lead. 184 See e.g. Complaint, State of Mississippi ex rel Jim Hood v. Mattel, Inc., filed Dec. 15, 2008, Chancery Court of Hinds County, MS, available at http://www.ago.state.ms.us/images/uploads/forms/mattelcomplaint.pdf [hereinafter Mississippi Complaint]; Complaint, Milgram v. Mattel, Inc., filed Dec. 15, 2008, Superior Court of New Jersey, Chancery Division, Mercer County, available at http://www.nj.gov/oag/newsreleases08/121508-mattel-complaint.pdf [hereinafter New Jersey Complaint]. It is of note that the complaints differ in the particular authorizing statutes, parties, and overall format. The two complaints do have the same substantive language in some sections. See “Background” in Mississippi Complaint and “Statement of Facts” in New Jersey Complaint. The Mississippi Complaint alleges a violation of that state’s unfair and deceptive trade practices law, whereas the New Jersey Complaint alleges a violation of its law prohibiting unconscionable commercial practices, illustrating differences in each State’s UDAP statutes. 185 Jayne O’Donnell, Mattel Toys’ Lead Was 180 Times the Limit, USA Today, Sep. 18, 2007. 186 Mississippi Complaint, at ¶22.

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adequate investigations, and the issuance of the faulty certificate further violated the UDAP

statutes.187

The terms of the settlement not only obtained money for the states, but also required

Mattel to agree to abide by additional product safety standards. Ultimately, Mattel had to pay

$12 million, to be divided among the participating states, to reimburse investigative costs and to

fund consumer education on the issue.188 The greatest impact of the negotiated settlement lies in

the standards Mattel has henceforth agreed to follow. Mattel agreed to what amounts to a strict

liability standard for future violations. One, Mattel is required to phase in more stringent

standards than those in the CPSIA for all toys manufactured after November 30, 2008.189 Two,

Mattel must keep records on file for at least four years concerning the manufacturing of surface

coatings and substrates used on its products, report to the Attorneys General within three days if

it discovers lead in its products and work with the state Attorneys General to remedy such

violations.190 All of this was agreed to without the existence of proof of a single injury directly

caused by the toys.

The terms of this settlement virtually ensure that should Mattel experience another recall

event, the information will not be confined to the CPSC. Indeed, because this is a consent

judgment, the higher standards will not be subject to the preemptive force of the new regulations

required by the CPSIA. While this settlement represents a solid victory in the fight against lead,

the other threat of toy magnets remains unregulated by the agreement. Though toy magnets

187 Id. at ¶¶25--26. 188 Mattel Consent Judgment, supra note 183, at ¶4.0. Massachusetts, the lead state, will receive $625,000. Most of the money will be used for lead prevention. The state Attorney General will work with the Department of Public Health to issue grants to community groups to test homes and toys, with the goal of increasing the number of referrals of children who were exposed to lead. See Attorney General of Massachusetts, Press Release, supra note 181. 189 See Mattel Consent Judgment, supra note 183, at ¶3.1. 190 See Mattel Consent Judgment, supra note 183, at ¶¶3.2--3.4.

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represented approximately 90% of the products recalled by Mattel in 2007, the state Attorneys

General only brought claims based on the lead-tainted toys.191 Unlike the faulty issuance of a

certificate and the clear standards prohibiting lead paint, there is no law limiting the sale of toys

with strong magnets. Magnets fall into the vague description of a design defect, but have still

proven to be a persistent problem.192 Thus, the states focused on the clear-cut case, and did not

attempt to argue that there was something unfair or deceptive about selling toys with strong

magnets. It is also notable that this settlement is limited to Mattel and its subsidiary Fisher-Price.

The higher standard agreed to will not apply to any other toy producers, thus limiting its

regulatory impact.

2. Toy Cuffs in Illinois. --- There are some additional limitations to the success of state

Attorney General offices pursuing consumer products actions under their own statutes. A

concern is that other States may not have the laws or the will to bring a similar action. For

example, in 2007, Consumer Reports tested a number of children’s toys and found that the

popular Fisher-Price toy blood pressure gauge strap contained 10,000 ppm of lead, and cautioned

parents to take it away from their children.193 The Attorney General’s Office in Illinois began an

investigation into this product and found that the cuffs contained seven to nine times more than

the allowable amount of lead.194 As this lead was in the armband itself, it was not considered a

surface coating and therefore not preempted by federal law.195

191 See Mississippi Complaint, supra note 184. 192 Center for Disease Control, Morbidity and Mortality Weekly Report, available at http://www.cdc.gov/mmwr/ (Dec. 8, 2006) (government publication read by health care professionals, analyzed 20 cases of magnet ingestion injury). 193 Consumer Reports, Lead in Children’s Products Report, What We Found, at http://www.consumerreports.org/cro/babies-kids/child-safety/indoors/kids-and-lead/lead-in-childrens-products-12-07/what-we-found/test-findings.htm (last visited Jan. 2, 2008). By contrast, the new federal standard embodied in the CPSIA for lead in children’s products is 600ppm. 194 Office of the Illinois Attorney General, Attorney General Warns Consumers of Potential Lead Poisoning Hazard in Fisher Price Toy Kits, Press Release, Dec. 3, 2007, available at

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In response to the investigation by the Illinois Attorney General’s office, Mattel recalled

the toy in Illinois December of 2007.196 Though Mattel accepted the cuffs back from all

consumers nationwide, they did not recall the toy throughout the country, nor publicize it as they

would be required to in a national recall.197 As the cuffs did not violate the federal standard and

no other states sought to hold Mattel responsible, potentially dangerous blood pressure cuffs

remained on the market. Even if lead does not exist on surface paint, there is still a chance that a

young child will chew on the arm band, thereby exposing herself to lead.198 Business advocates

could argue that when only a small number of states impose a regulation that is not preempted by

federal regulation, patchwork problems may result leaving manufacturers uncertain about what

standards apply, and effectively driving a “race to the top,” where potentially the strictest

standards are the ones enforced. Had Mattel not agreed to the corrective action and a court found

that the absence of action by the CPSC did not entail preemption of the standard, the Illinois

Attorney General could have commenced litigation in state court alleging a violation of Illinois

law.199 Mattel would thus be faced with the choice of pulling its product from Illinois, having a

separate production operation just for Illinois and other similarly situated states, or producing all

of its products at the highest standard. While consumer protection advocates may be pleased, the

end result is that a single state can affect nationwide commerce. This results in an inherent

patchwork problem that the creation of a national enforcement agency was supposed to correct.

Understandably, courts have been willing to find that such state standards may be preempted. In

http://www.illinoisattorneygeneral.gov/pressroom/2007_12/20071203.html [hereinafter Cuff Recall Press Release]. For additional discussion of this example, see O’Loughlin, supra note 147, at 1042. 195 It is of note that the CPSIA implemented a federal standard of 600 ppm for led content in similar products. At the time this action was brought, the existing standard concerning lead content in children’s toys only covered lead-containing exterior paint. See 16 C.F.R. § 1303; supra note 49. 196 Cuff Recall Press Release, supra note 194. 197 Louise Story, Lawmakers Say Mattel Broke Word on Lead, N.Y. Times, Jan. 30, 2008. 198 Id. 199 See O’Loughlin, supra note 147, at 1043.

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sum, despite the substantial power of SAGs to protect their citizens, when it comes to products

that are increasingly sold in the national market, there is reason to believe that state Attorney

General enforcement alone will not result in optimal protection for consumers of children’s

products.

PART III: STATE ATTORNEY GENERAL ENFORCEMENT UNDER THE CPSIA

Though the failures of the system are not in dispute, the best way to repair the holes in

the consumer product safety net have been much debated.200 The recall system as it stands is not

enough to ensure that unsafe toys get off the shelf. As recalls are necessarily reactive, the

ultimate goal of the CPSC and other enforcement groups is to stop the production of unsafe toys

in the first place.201 That will require additional cooperation and enforcement on behalf of

developing countries like China that is not readily forthcoming. As this is not a realistic

possibility, I argue that the CPSIA’s provision that state Attorneys General may seek injunctive

relief under federal law presents an important first step in strengthening the regulation of

children’s products while at the same time retaining enough federal oversight to avoid a “race to

the top” that unduly restricts manufacturers. This empowerment of state Attorneys General is

not without controversy. I will explore the debate over state Attorney General enforcement of

federal law and the compromise embodied in the CPSIA in Part III.A. I will then argue that

empowering state Attorneys General to enforce federal consumer products safety law is an

important first step to address the flaws in the current regulatory scheme in Part III.B, before

200 One attorney advocates using the Alien Tort Claims Act to bring suits alleging a violation of international law for injuries caused by the production and dissemination of hazardous products from China. See Joel Slawotsky, Liability for Defective Chinese Products Under the Alien Tort Claims Act, 7 Was. U. Global Stud. L. Rev. 519, 541(2008). 201 In response to the 2007 recalls, a spokesman for the CPSC told the New York Times, “We want to get to a point of not having to do recall after recall, and simply make the marketplace safe.” Eric Lipton & Louise Story, Bid to Root Out Lead Trinkets Falters in U.S., N.Y. Times, Aug. 6, 2007.

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looking at how this may work in practice in Part III.C both in the consumer product arena and

other areas where concurrent state and federal enforcement may be beneficial.

A. The CPSIA

1. The CPSIA Debate. --- After the recalls of 2007, it became clear that new legislation

reauthorizing the CPSC was necesasry. After all, the CPSC was created in 1972 precisely

because of the perceived failure of the marketplace, coupled with private litigation and the then-

existing federal rules, to keep consumers safe.202 The CPSC’s stated mission is to “protect the

public against unreasonable risks of injury associated with consumer products.”203 The 2007

recalls made it clear that it was not able to do so.204 In a congressional hearing investigating the

origins of the recalls, Thomas Moore, a Commissioner of the CPSC, stated:

[The 2007 recalls] brought to light, especially for Congress, the woeful state of the agency’s resources, from its declining staffing levels to its aging and inadequate laboratory facilities. For too many years the agency had been forced to put a brave face on its situation by claiming it could do more with less. When we stopped getting enough resources to meet our basic needs that claim began to ring hollow and the agency was left without the necessary tools to properly police the consumer product marketplace.205

As a result, the CPSC faced a fortuitous situation where increased national attention and

subsequent additional funding coincided with the need for comprehensive reauthorization.206 In

the run-up to the CPSIA, consensus soon emerged that the agency would receive additional

202 Nord, Testimony, supra note 110. See also Anthony Sciascia, Safe or Sorry: How the Precautionary Principle Is Changing Europe’s Consumer Safety Regulation Regime and How the United States’ Consumer Product Safety Commission Must Take Notice, 58 Admin. L. Rev. 689, 692--93 (2006) (describing the origins and limitations of the CPSC). 203 15 U.S.C. § 2051(b)(1). 204 In July of 2007, President Bush created the Interagency Working Group on Import Safety to “ensure that the executive branch takes all appropriate steps to promote the safety of imported products.” See Action Plan, supra note 4; Exec. Order No. 13439, 72 Fed. Reg. 40,053 (July 18, 2007). See also Interagency Working Group on Import Safety website at http://www.importsafety.gov/. 205 Thomas Moore, Commissioner, Consumer Product Safety Commission, Statement Submitted to the Senate Subcommittee on Financial Services and General Government, Senate Committee on Appropriation, April 30, 2008, available at http://www.cpsc.gov/pr/moore04302008.pdf. 206 Nord, Testimony, supra note 110.

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funding and enforcement authority.207 In response to these concerns, Congress passed the

Consumer Products Safety Improvement Act of 2008.208 The Act notably includes higher

standards for lead content,209 whistleblower protection,210 creation of a database for sharing of

safety information,211 and increased penalties for failure to report,212 among other things. The

CPSIA also mandates third party testing and accreditation.213 The empowerment of state

Attorneys General to enforce actual provisions of the act was one of the more controversial

aspects of the CPSIA. It did not appear in every version of the act passed by the House and

Senate.214

207 See Action Plan, supra note 4. 208 Pub. L. 110-314, 122 Stat. 3016 (2008) [hereinafter CPSIA]. An additional indication of Congressional concern is that for the 2008 financial year, the CPSC’s budget was increased by 28% to $80 million. Bruce Mulock, Consumer Product Safety Commission: Current Issues, CRS Report for Congress, RS 22821, at 3, June 17, 2008. 209 CPSIA § 101. The lead paint limit will be lowered to 90 ppm on August 14, 2009. The lead content limit of 600ppm for all children’s products goes into effect on February 10, 2009. It will be lowered to 300ppm on August 14, 2009. 210 CPSIA § 219. 211 CSPIA § 212. The specifics on what this database will include, how information will be uploaded, and how it will be monitored are not definite yet. Some commentators have raised concerns that it will be abused by plaintiff’s lawyers. See William A. Ruskin, CPSC’s New Database: An Opportunity for Abuse?, post to Toxic Tort Litigation Blog, http://www.toxictortlitigationblog.com/ (Oct. 31, 2008). 212 CPSIA § 217. The CPSIA does not change the requirement that any company that manufactures, distributes, imports or sells consumer products in the US must notify the CPSC if it obtains information that reasonably suggests a product fails to comply with an applicable consumer product safety regulation, contains a defect that could create a substantial product hazard to consumers, or creates an unreasonable risk of serious injury or death. See supra note and accompanying text. The CPSIA does increase potential fines for failure to report to $100,000 with a cap of $15 million. 213 CPSIA § 102. This section of the Act requires third party testing and safety certification for certain children’s products. See U.S. Consumer Product Safety Commission, 16 C.F.R. § 1110 (requiring for international products the importer to issue the certificate required by § 14 of the CPSA). See also U.S. Consumer Product Safety Commission, Third Party Conformity Assessment Body Accreditation Requirements for Testing Compliance with 16 C.F.R. Part 1501 (Small Parts Regulations), Nov. 4, 2008, available at http://www.cpsc.gov/library/foia/foia09/brief/smallparts.pdf (CPSC staff memorandum discussing accreditation requirements).

There is some doubt about the potential success of these “self-regulatory” initiatives. Such plans have had success only where there has been a credible threat of government regulation to provide industry groups with an incentive to act. Such pressure has almost uniformly been lacking in the children’s product safety context. See Bamberger & Guzman, supra note 55, at 1428--32. 214 S. 2045 would have authorized giving state attorneys general the right to seek injunctive relief for unsafe products. This authority was not initially included in H.R. 4040. Mulock, supra note 208, at 6.

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Opponents to state Attorney General enforcement argue that the ramifications of state

enforcement extend beyond the state’s boundaries, thereby fostering the inconsistent application

of federal law. The fear is that significant patchwork problems would result, instigating an

effective “race to the top” that would usurp legislative functions in deciding the optimal level of

regulations—in this context, overregulation is problematic because it would stifle industry and

innovation. A major reason why the National Association of Manufacturers (NAM) supported

the initial CPSA in 1972 was grounded in the frustration of having to contend with myriad and

complex state laws.215 NAM strongly lobbied against this proposal was strongly lobbied against

the new proposal. Their principle concern was that enabling state Attorneys General to bring

lawsuits for failure to comply with the federal law would create a new field of litigation and

threaten the industry’s history of cooperation with the CPSC.216 An ancillary concern was that

confusion could arise if different state Attorneys General had different interpretations of the

law.217 Allowing states to enforce the federal law as they see fit also arguably undermines one of

the fundamental reasons for having federal agencies like the CPSC in the first place, namely the

establishment of uniform, national product safety standards. In a letter to the Senate Committee

considering the Bill, the White House argued that “allowing individual states to enforce the

statutes on their own will cause significant uncertainty in the marketplace as the safety status of

individual products may vary depending on the jurisdiction.”218 Even the acting chairman of the

CPSC, Nancy A. Nord, opposed the provision enabling state Attorneys General to enforce

215 Mulock, supra note 208, at 1--2. 216 Consumer Product Safety Commission Reform Act 2007: Hearing on S. 2045 Before S. Commerce, Science and Transportation Comm., 110th Cong. (2007) (testimony of Joseph M. McGuire, President of the Association of Home Appliance Manufacturers on behalf of NAM). 217 Id. 218 Letter from Allan B. Hubbard, Assistant to the President for Economic Policy and Director, National Economic Council to Daniel Inouye, Chairman, Committee on Commerce, Science, and Transportation, U.S. Senate (Oct. 29, 2007).

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aspects of the federal law. Nord wrote to Congress that such empowerment of state attorneys

general would “undoubtedly lead to the inconsistent application of federal law . . . where states

may effectively develop their own unique product safety systems and standards.”219

In general, proponents of this law and others like it argue that enabling state Attorneys

General to enforce federal law allows fifty-one enforcement offices to police consumer safety

issues and eradicates the need to rely solely on a single centralized enforcement office. This

provision to have state Attorneys General monitor compliance with federal law was vocally

supported by consumer advocacy groups, such as the Consumer Federation of America.220 In the

face of a failed domestic policy, allowing state Attorneys General to enforce the federal law

would strengthen the safety scheme where the CPSC would not.221 Giving the power to state

Attorneys General further appealed to some members of Congress in that it allowed for greater

enforcement without requiring additional appropriations of taxpayer dollars.222 States and state

Attorneys General are better situated to learn about and act on potential product threats in light of

the well-documented flaws in the recall system.223 Though an item has been recalled, it is

virtually impossible to ensure that it is entirely removed from the marketplace. The issuance of a

219 Letter from Nancy A. Nord, Acting Chairman, CPSC to Daniel K. Inouye, Chairman, Committee on Commerce, U.S. Senate, and Mark Pryor, Chairman, Subcommittee on Consumer Affairs, Insurance, and Automotive Safety, U.S. Senate (Oct. 24, 2007) [hereinafter Nord, Letter]. 220 See testimony of Rachel Weintraub before the House Committee on Energy and Commerce, May 15, 2007. 221 See Gabriel Allen, Get the Lead Out: A New Approach for Regulating the U.S. Toy Market in a Globalized World, 36 Ga. J. Int’l & Comp. L. 615, 640 (2008). 222 154 Cong. Rec. S1570 (2008) (statement of Sen. Pryor). 223 When a product is recalled, the company and the CPSC jointly issue a press release telling consumers what to do. This is generally sent to major media outlets. Though the CPSC provides a hotline and website for consumers to obtain information, they are generally referred to the corporation. See Felcher, supra note 54, at 177--78; see also Office of the Illinois Attorney General, Press Release, Madigan Calls on CPSC to Create Secondary Market Recall Strategy (Oct. 1, 2008), available at http://www.illinoisattorneygeneral.gov/pressroom/2008_10/20081001.html. Attorney General Madigan’s main concern was with dangerous products continuing to appear in secondary shops and on-line sites like E-Bay and Craig’s List. Attorney General Madigan created a “watchdog” group that works with her office to monitor such secondary markets to make sure that dangerous products do not remain on the shelves of stores or the listings of websites.

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recall may not be effective in getting the products out of the hands of children. For example, in a

2006 recall, Twentieth Century Fox Home Entertainment offered a free DVD to people who

returned silver-coated metal charms that contained lead. Fifteen months after Fox’s recall of the

746,621 charms, only about 50,000 charms, amounting to 6.7 percent, were sent back.224

Though it is likely that many of the charms were thrown away, some of the unaccounted for

charms surely remain on dressers and in jewelry boxes. Others may continue to be sold in

second-hand stores. The potential for products to remain for sale on the shelves of discount

stores is greater when a single centralized office is in charge of enforcement.225 The CPSC’s

focus, as a data driven agency, is necessarily on uncovering the next product needed to be

recalled, not scouring the shelves for already past recalls.226 They simply do not have the

resources to do both. A state assistant Attorney General will understandably be better able to

learn about and act upon such persistent problems.227

This debate regarding state Attorney General enforcement of federal standards is a

microcosm of a larger debate about the role of the state Attorney General in the legal system.

Some argue that the role of state Attorney General is limited to defending state agencies in court

and providing legal advice.228 They argue that by regulating through lawsuits, the state

224 Eric Lipton & Louise Story, Bid to Root Out Lead Trinkets Falters in U.S., N.Y. Times, Aug. 6, 2007. The Fox charms were manufactured in China. 225 See supra note 223. 226 See 154 Cong. Rec. S1670 (2008) (statement of Sen. Pryor). 227 A state assistant Attorney General inherently have a closer relationship with law enforcement and community groups, they will likely be better situated to alert the public about potential dangers in their locality, better positioned to collect the information from merchants, individuals, and grassroots groups about dangerous products, and better poised to act rapidly on getting such products off the shelves. See supra note 223. 228 See Hans Bader, The Nation’s Top Ten Worst State Attorneys General, at 22, Competitive Enterprise Institute, Jan 24, 2007. This argument, as it is here, is usually crouched in orignalist terms, such as the “historical function” of the state attorney general. While this subservient role has been that of the Attorney General of the United States, State attorneys general have traditional possessed much more authority and autonomy. See supra notes and accompanying text.

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Attorneys General have usurped the power of state legislatures and Congress to make law.229 If

the state Attorney General is entitled to forge regulations on her own, she is free from the checks

and balances inherent in traditional law making to the detriment of interstate commerce.230

2. The CPSIA Compromise. --- Ultimately, the House and Senate passed the CPSIA with

a compromise: endowing state Attorneys General with some limited authority to enforce the

provisions of the act. State Attorneys General may seek injunctive relief to prevent the sale of

dangerous products:231

“[A] State, as parens patriae, may bring a civil action on behalf of its residents . . . whenever the attorney general of the State has reason to believe that the interests of the residents of the State have been or are being threatened or adversely affected by a manufacturer, distributor, or retailer entity that violates this Act.”

This power to seek an injunction is somewhat constrained in that state Attorneys General

are required to provide the CPSC with at least 30 days notice unless the State determines that it

must protect the residents of its State from a “substantial product hazard” that must be acted

upon immediately.232 The CPSC further has the right to become a party to any suit filed by the

state Attorneys General under the act. State Attorneys General cannot file a duplicative suit if a

suit has already been filed by the Commission, except in very limited circumstances. Monetary

damages may not be collected by States under the Act. States must also give the CPSC advance

notice of their intention to initiate such an action before it is filed, unless faced with a

“substantial product hazard” that must be immediately addressed. Should the state action

229 Bader, supra note, at 22. 230 Id. 231 CPSIA § 218. State Attorneys General may stop the sale of products that violate CPSC issued safety standards; recalled products as announced by the Commission; banned hazardous substances; children’s products that have not been certified as tested by third-party laboratories once those certification requirements go into effect; children’s products that lack tracking labels once that requirement goes into effect; and stop the sale of products with safety marks if the use of those marks is unauthorized. State Attorneys General may also enforce the prohibitions against stockpiling products in advance of regulatory changes. See CPSIA § 218(a). 232 Id.

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conflict with a federal policy, the Act provides that the CPSC the right to intervene in any action

filed by states under the Act. This ensures that enforcement will be uniform throughout the

country as the CPSC may intervene if one state pushes the envelope too far. Additionally, if the

CPSC already has a pending action against a company, states may not file a separate suit.

Finally, on its terms, the act does not limit state Attorneys General from bringing the traditional

actions discussed in Part II.B. Together, these provisions provide a limited empowerment for

state Attorneys General, while maintaining CPSC oversight over the litigation.

2. Should State Attorneys General Enforce Federal Law? --- According to Thomas

Moore, a Commissioner of the CPSC, the Commission “will always be at a disadvantage in

policing this huge import market”, but can “do a better job” than they currently do with more

resources.233 The further empowerment of the state Attorneys General reflects the will to add to

those resources. Furthermore, having state Attorneys General assist federal agencies in

enforcement of their power is not a novel concept.234 In light of the clear failure to adequately

protect consumers, Congress erred on the side of empowering state Attorneys General while

avoiding the potential for the “patchwork” problems.235 This compromise was essential to

gaining bi-partisan support for this provision of the CPSIA.236 Importantly, however, the CPSIA

left the state Attorneys General empowered to pursue the common-law and state statutory

remedies that had developed organically in the absence of strong federal regulation, thus begging

233 Moore, Statement, supra note 241 234 For example, the Fair Credit Reporting Act, the Telephone Disclosure and Dispute Resolution Act, the Children's Online Privacy Protect Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Credit Repair Organizations Act, the Controlling the Assault of Nonsolicited Pornography and Marketing Act, and a section of the Truth in Lending Act all provide for State attorneys general to have a role in enforcement. 235 Popular movements based on a recent publication that call attention to a particular issue are sometimes the impetus behind the institution of regulatory regimes. See Kaplan, supra note 100 (citing the publication of The Jungle by Upton Sinclair as “spearhead[ing] a grassroots movement that brought about reform in the United States”). 236 See 154 Cong. Rec. H7586 (2008) (statement of Rep. Whitfield).

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the question of whether this new power will substantively add anything to that previously

enjoyed by state Attorneys General at all.

B. Whether State Attorneys General Should Enforce Federal Law

Practical concerns have made the prospect of having “more cops on the beat” particularly

attractive in the children’s products arena.237 The process of consumer protection is primarily

driven by consumer complaints.238 A key concern is how to enable consumers to efficiently

register complaints, allow that information to be processed by the appropriate agency, and then

acted upon by the appropriate regulatory body.239 For example, if a child choked on a small

button her parents could contact the CPSC if they knew it existed; the manufacturer of the toy;

the Better Business Bureau (to complain about the store who sold them the toy); their state

Attorney General, or even the local police or prosecutor’s office. There is a possibility that the

parents may not link the isolated incident to a larger design defect that may potentially affect

many children around the country. In this scenario, the more eyes on the ground with the ability

to coordinate information, the more effective the response will likely be.

Indeed, in light of increased demands placed on the CPSC in the CPSIA, there is a chance

that the agency will actually be able to screen fewer products, at least in the short term. Despite

the increase in authority and budget, there is some doubt that the CPSC will be able to respond

quickly to the challenges facing it. The bill itself will require the CPSC to implement a host of

new requirements and regulations. With the current staffing of full time employees at

approximately 400 members, the CPSC will be required to hire, by its estimate, 125 additional

full-time employees.240 This additional staff requirement is on top of the attrition of many of the

237 See supra Part.I. 238 David Adam Friedman, Reinventing Consumer Protection, 57 DePaul L. Rev. 45, 51 (2007). 239 Id. 240 Nord, Letter, supra note 219.

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top people after years of reduced funding and neglect.241 The apex of CPSC staffing came in

1980 when the Agency employed 978 people.242 The CPSC had only 420 full-time

employees.243 This number was set to decline further to 400 employees prior to the publicized

recalls and passage of the CPSIA.244 Furthermore, as the CPSC’s budget is largely dependent on

Congress, there is a possibility that a future Congress could reinstitute the shrinking of the

Agency that has occurred in the past eight years.245

This regulation is a natural extension of the traditional powers of the state Attorneys

General. Faced with poor enforcement in the children’s products arena, some state Attorneys

General have relished and expanded upon their role as defender of the public’s interests.246 It is,

after all, the state Attorneys General’s job to defend the health, safety, and welfare of the

people.247 That responsibility is at the heart of her powers in parens patriae.248 It is well

241 Thomas Moore, Commissioner, Consumer Product Safety Commission, Statement Submitted to the Subcommittee on Commerce, Trade, and Consumer Protection House Committee on Energy and Commerce, November 6, 2007 [hereinafter Moore, Statement] (“We have lost many experienced and talented people in the last few years—people who knew instinctively when they saw a product whether it was badly designed or if it was just plain a bad idea from a safety standpoint. We have increased our information technology spending as a way to compensate for the reduction in the size of our staff, but no computer that I am aware of can look at a product and know that it should be removed from the marketplace. Only experienced, trained people can do that. The real backbone of the agency is its staff: our toxicologists, our pharmacologists, our mechanical engineers, our human factors specialists, our chemists, our investigators and yes, even our lawyers. We need to retain our current employees and recruit additional staff. They are the key to the agency’s ability to fulfill its role as protector and enforcer. This bill will allow us to rebuild our staff and should send a signal to current employees that the agency will be around for a long time and that they should stay and rebuild with us.”) 242 Mulock, supra note 208, at 3. It is of note that this high point came just before the so-called “Reagan Revolution” that attempted to drastically reduce the size of the administrative state. See Sciascia, supra note 202, at 694. 243 Mulock, supra note 208, at 3. 244 Id. 245 Sciascia, supra note 202, at 694 n.32 (describing the Reagan administration’s desire to abolish the CPSC and other forms of federal regulation). 246 For example, in 1907 Missouri Attorney General Herbert S. Hadley called a meeting of his fellow State AGs to coordinate a strategy to challenge the monopolistic behavior of Standard Oil. This meeting, and subsequent enforcement strategy, was in part a response to a perceived lack of effort by the federal government. Hadley believed that together, state Attorneys General could be as effective as the federal government in enforcing actions in the public interest. 247 Florida ex rel. Shevin v. Exxon Corp., 526 F.2d 266 (5th Cir. 1976).

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established that the state Attorney General is no ordinary advocate; rather, she serves as a

constitutional officer with a duty to both the people and to serve justice.249 Today, in the realm

of children’s product safety, state Attorneys General have expanded upon their traditional

powers to fill a void created by lack of a federal regulatory presence.250 By empowering state

Attorneys General to seek injunctions under federal law, these advocates can protect consumers

not just within the borders of their states, but nationwide.

C. A Lasting Solution or More of the Same?

While the CPSIA adds another arrow to the proverbial quiver of a state Attorney General

when facing a report of a dangerous children’s product, a separate question is whether the state

Attorney General will actually use this injunctive power when all of her traditional tools are still

available under state law. Some commentators believe that the state Attorney General

enforcement provision will not substantively add to the tools available to state Attorneys

General.251 They argue that the injunctive power embodied in the statute does not change how

state Attorneys General will fundamentally conduct product safety actions. As it stands, states

may not enforce regulatory standards that are inconsistent with federal standards, but are allowed

to enforce identical standards under state laws; nothing in the CPSIA changes this ability.252

State Attorneys General will instead file actions in state court as they are more familiar with

248 See supra notes 134--138 and accompanying text. 249 State v. Lead Indus. Ass'n, 951 A.2d 428, 471 (S.C. R.I. 2008) (“In view of the grave responsibilities of attorneys general vis-a-vis the public, the holder of that high office, as distinguished from the usual advocate, has a special and enduring duty to ‘seek justice.’”) 250 See supra Part II. 251 See O’Loughlin, supra note 147, at 1043. 252 Id.

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doing. Where there remains a regulatory vacuum, states will remain free to create new

regulations.253

There is some potential that enforcement under the CPSIA could evolve along the lines of

state attorney general enforcement with the FTC. For example, in response to consumer

complaints, more than twenty States created “Do Not Call” laws and compiled databases in the

1980s to prevent unwanted telemarketer calls. Residents could indicate that they did not want to

receive calls from any companies. In order to make calls in the state, companies were required

to access these lists and refrain from calling anyone on them. During this period, the size of the

FTC was cut in half and the Agency saw the amount of fraud cases it brought dwindle. 254 In this

environment, state attorneys general stepped up their enforcement to compensate for the lack of

federal presence.255 In the early 1990s, Congress passed the ineffective Telephone Consumer

Protection Act (TCPA).256 This was a company specific list that proved to be less effective than

individual state action.

When federal regulation seriously takes on a problem, state Attorneys General can be

effectively utilized to enforce it efficiently.257 As a result of flaws in the TCPA, Congress

addressed the issue again in 2003 and created a national “Do Not Call” registry.258 Unlike the

253 Id. The example of the Illinois statute banning lead from children’s products provides an example of this, albeit one that will be preempted by the passage of the CPSIA. See supra Part II.C.2. 254 See Lynch, supra note 153, at 2005. 255 Id. See also David J. Morrow, Transporting Lawsuits Across State Lines, N.Y. Times, Nov. 9, 1997. 256 Pub. L. No. 102-243, 105 Stat. 2395 (1991). See generally Robert R. Biggerstaff, State Courts and the Telephone Consumer Protection Act of 1991: must States Opt-in? Can States Opt-out? 33 Conn. L. Rev. 407 (2001). 257 See e.g. Timothy J. Muris, Prepared Statement of the Federal Trade Commission Before the Subcommittee on Commerce, Justice, State, the Judiciary and Related Agencies of the Committee on Appropriations, United States House of Representatives (Apr. 10, 2002), available at http:// www.ftc.gov/os/2002/04/041002budgettestimony.htm (state attorneys general used by FTC to help fight internet fraud). 258 Do-Not-Call Implementation Act of 2003, Pub L. 108-10, 117 Stat. 557 (2003). See generally Jacquelyn Trussell, Is the Can-Spam Act the Answer to the Growing Problem of Spam?, 16 Loy.

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TCPA, the new registry was structurally similar to those that states had been implementing for

the past decade. The FTC coordinates the list, making determinations such as who qualifies as a

“solicitor,” the times telemarketers can call, and the use of autodialing technology. The FTC has

since had a successful history of working with the state Attorneys General and generally

welcomes their support.259 Though states are allowed to maintain their own lists, since the

creation of the national registry more than thirty states have signed on and merged their lists with

that of the FTC. The FCC, FTC, and the states are all able to enforce its provisions. State

Attorney General offices are able to obtain nationwide injunctive relief.260 Like the sale of

dangerous toys, telemarketing fraud is not confined to a particular state. An integrated state

approach is far more efficient than waiting for federal action or proceeding on a state by state

basis. Together, states and the FTC have significantly reduced unwanted telemarketer calls for

those who opt-in to the program.261

Unlike determinations of telemarketing fraud, it is more difficult to determine what

amounts to a “substantial product hazard.” This is necessarily a subjective determination: how

dangerous must a product be to be pulled off of the shelves? The CPSA § 15(a) defines a

“substantial product hazard” as a failure to comply with an applicable consumer product safety

rule which creates a substantial risk of injury to the public, or a product defect which creates a

substantial risk of injury to the public.262 This is important, because the injunctive power granted

Consumer L. Rev. 175 (2004) (discussing federal creation of “Do-Not-Call” and applicability of scheme to email spam). 259 See Prepared Statement of the FTC on The Joint Federal-State Enforcement Model Established by the Telemarketing and Consumer Fraud and Abuse Prevention Act, Before the Subcommittee on Highways and Transit of the Committee on Transportation and Infrastructure, U.S. House of Representatives (July 12, 2001). 260 Id. 261 See Press Release, Fed. Trade Comm’n, National Do Not Call Registry Celebrates One-Year Anniversary (June 14, 2004), http:// www.ftc.gov/opa/2004/06/dncanny.shtm. 262 CPSA § 15(a).

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to state Attorneys General does not require the 30-day notice if the complaint alleges a

“substantial product hazard.”263 While the state Attorney General must still notify the CPSC

about such a determination, the filing of such an action and its attendant publicity involve a

substantial increase in power. This increase in power threatens to undermine the limitation,

embodied in the CPSIA, that allows state Attorneys General to issue injunctions only with

requisite notice to the Commission.264 In light of the relatively few rules and standards enacted

by the CPSC in its history, this power has been used by the Commission as its primary means of

regulating manufacturers, importers, and vendors.265

Some state Attorneys General have been critical of the CPSC’s failure to use this power

in the past. For example, Illinois Attorney General Madigan’s office identified hundreds of

recalled bassinets that were still available in secondary markets and on websites like Craig’s

List.266 Madigan chided the CPSC for the Commission’s slow response and not doing more to

publicize the recall.267 Now, were the state Attorney General in Illinois to file a claim against the

company, she could bring both the state and federal claims together, thus affecting a nationwide

recall while defending consumer in her state, all while utilizing their inherent advantages in

collecting and acting upon information about dangerous products.268 Had the dangerous lead-

containing toy cuffs been uncovered today, Attorney General Madigan would have been able to

seek a nationwide injunction and made sure that consumers throughout the country, not just in

Illinois would be safe.269 In light of the nature of the problem: where millions of units toys are

263 CPSIA § 218(a)(2)(C). 264 CPSIA § 218(a). 265 See supra part I.B.1, and accompanying text. 266 See Illinois AG Press Release, supra note 223. 267 Id. See also Maurice Possley, “Missteps delayed recall of deadly cribs,” Chicago Tribune, Sept. 24, 2007. 268 See supra notes 223--227 and accompanying text. 269 See Part II.C.2.

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produced abroad with little oversight, with current economic conditions encouraging cutting

costs, and the almost complete lack of examination prior to entry into the U.S., this solution will

enable the state Attorneys General to join the CPSC as additional regulators in a necessarily

reactive role.

Ultimately, the CPSIA did more than leave the organic evolution of the role of the state

Attorneys General intact. It further validated their role as key players in regulating children’s

products by explicitly not preempting their common-law powers and enabling them to enforce

the injunctive authority under the CPSIA.270 At the heart of the state Attorney General

enforcement of federal law is the relationship between the federal and state regulators.271 As

sources of information of potential risks, particularly after a risk has been identified and a recall

has been issued, the collaborative efforts of state Attorneys General working with the CPSC will

put the U.S. in a more optimal position to catch dangerous products.272

CONCLUSION

In the long run, the best solution would be to stop the dangerous products from being

manufactured in the first instance. As the CPSC is necessarily a reactive agency, any additional

270 See supra note and accompanying text. 271 According to the FTC Commissioner Pamela Jones Harbour, “Relations between state and federal enforcement officials regarding vertical restraints have been characterized by conflict and, at times, outright hostility. [] More recently, federal and state vertical enforcement philosophies substantially have converged. Relations between federal and state enforcers, while not perfectly tranquil, now seem both cordial and mutually productive. As a former state antitrust enforcement official, I am among those who lived through the most tumultuous years. I remember when federal-state relations degraded from enthusiastic cooperation to straight-out antagonism, then witnessed their improvement to studied indifference and, finally, grudging respect and cooperation.” See Pamela Jones Harbour, Vertical Restraints: Federal and State Enforcement of Vertical Issues, ALI-ABA Course of Study Product Distribution and Marketing (March 18-20, 2004), available at http://www.ftc.gov/speeches/harbour/0403vertical.pdf. 272 For an example of a state attorney general butting heads with the CPSC, see Madigan, supra note. Ideally, after the passage of the CPSIA, more can be done to inform consumers across the country.

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police on the beat or eyes on the street can only help prevent more people being exposed to

dangerous products that are on the shelf.273 Stronger and more consistent regulations in the

places where the products are produced and designed are needed.274 The heightened standards

and penalties on manufacturers, vendors and importers represent a good first step. A major

additional step involving the CPSC would be for Congress to pass legislation that would provide

the Commission with more authority to work with the Chinese government and to provide

resources to set up more inspectors in foreign ports and plants.275 As the somewhat fragile trade

relationship with China continues to develop, the U.S. must focus on working together with the

Chinese to enact thorough standards.276 That, however, remains a long-term solution. In the

short run, greater penalties, more enforcement, and increased publicity will provide a strong

economic incentive for business to become as diligent as possible.277

Until this can happen, the CPSIA is a solid first step towards empowering the CPSC to

fully carry out its responsibilities. In light of the influence that popular politics appears to have

on the CPSC, empowerment of the state Attorneys General will at the very least ensure that the

dramatic underfunding and industry group influence that preceded the 2007 recalls will not

entirely abrogate enforcement.

How the provision for state Attorney General enforcement will play out remains to be

seen. It could follow either of two paths: state Attorneys General could form a cooperative

relationship with the CPSC like that with the FTC, or the provision may not be used at all as state

Attorneys General choose to stay with the organically developed common law and UDAP

273 See supra Part I.B.1 (describing CPSC’s reactive role in product safety regulation). 274 Laurel R. Hyle, et. al, International Legal Developments in Review: 2007 Public International Law, International Health Law, 42 Int'l Law. 745, 754 (2008). 275 Phillips, supra note 36, at 268 (27 Penn St. Int'l L. Rev. 217) 276 Bryan Bachner, Bull in a China Shop, 4 Bus. L. Brief (Am. U.) 4, 10 (2008) 277 Kaplan, supra note 100, at 42.

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actions they have been using to make up for the perceived void in federal regulatory presence,

actions that remain largely isolated to their individual states or require the time, effort and

expense for cooperation.278 If the state Attorneys General are able to make use of their new

injunctive power along with the common-law and UDAP actions, then the benefits of local

protection and deterrence may be coupled with nationwide publicity and effectiveness. For the

benefit of consumers, greater cooperation and coordinated enforcement will pave the way

towards increasing product safety and avoiding another “year of the recall.”

278 The Mattel Settlement provides a good example of this. See supra Part II.C.1. However, it is of note that due to the limitations of the States’ UDAP statutes, they were only able to bring claims against Mattel concerning the lead content in the products, not the design defect of dangerous small and powerful magnets that ultimately resulted in the recall of far more toys. Id.