January 21, 2014

What's that You Say? CPSC May Loosen Rules Restricting Information Disclosure

Seller Beware: Consumer Protection Insights for Industry

The staff of the Consumer Product Safety Commission (CPSC) recently released a draft notice of proposed rulemaking that would make significant changes to CPSC's rules on the disclosure of information to the public about a manufacturer or private labeler.

The rules at issue interpret Section 6(b) of the Consumer Product Safety Act ("CPSA"), which contains procedures designed to protect manufacturers and private labelers from reputational harm that could be caused by CPSC's disclosure of inaccurate product information. Under section 6(b), CPSC must notify a firm prior to disclosing information from which the firm can be identified, in order to give the firm an opportunity to object to the disclosure on grounds that CPSC has not taken reasonable steps to ensure that the proposed disclosure is accurate, or that disclosure would be unfair in the circumstances or not reasonably related to effectuating the purposes of the CPSA. CPSC adopted the interpretative rules in 1983 and has made only minor modifications to the rules since then.

Although the proposed revisions are intended to "modernize" and "streamline" the 1983 rules, they would also weaken existing procedures that consumer product companies rely on to protect their reputation and that of their products. Among other things, the proposed revisions would:

  • Eliminate CPSC's obligations to provide advance notice and opportunity to comment with respect to (i) information that has been disseminated in ways designed to reach the general public, such as news reports and information available on the Internet; and (ii) information that is "substantially the same" as information that CPSC previously disclosed;
  • Eliminate the advance notice and opportunity to comment CPSC now provides when there is a question whether the public could readily ascertain a firm's identity;
  • Impose new obligations on firms objecting to disclosure of their comments, by requiring them to provide a rationale for why CPSC should not disclose the comments, and to explain why disclosing the comments is not necessary to make the disclosure of the underlying information fair in the circumstance; and
  • Remove "fairness in the circumstances" as a basis for withholding a firm's information reflecting attorney work product or attorney-client privilege.

The Commission and staff plan to discuss the proposals in an open meeting on January 23, 2014, and the Commission plans to hold a decisional meeting on February 5, 2014. Stay tuned for more information.

© Arnold & Porter Kaye Scholer LLP 2014 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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