A new Consumer Product Safety Commission (CPSC) information database designed to document complaints about consumer products will create a burgeoning market for false reports that can be wrongfully used in litigation, writes Walter Olson in the Cato @ Liberty blog. As part of the Consumer Product Safety Improvement Act (CPSIA) of 2008, the CPSC voted 3-to-2 last week to create a government database that will allow members of the public to post unverified criticisms of products for any reason. Though Commissioners Nancy Nord and Ann Northup suggested altering the proposal so that the database could differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups, they were outvoted.
As a result, trial lawyers could potentially claim that a product in question can cause harm by citing as proof unsubstantiated entries in an official CPSC government database.
Previous regulations under the CPSIA have already had devastating effects on small businesses, as well. Among the many recent controversial CPSC mandates were ones requiring toy makers to perform expensive testing to certify that the lead and phthalate content in their products fell below levels specified in regulatory guidelines. “Though large companies may not be adversely affected by this law, small craft shops of every type and toy makers have gone out of business due to these onerous regulations that have nothing to do with public health,” says ACSH's Dr. Gilbert Ross. “As a result, prices on toys have gone up while many small businesses have gone under due to the additional high costs of product testing.”