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Federal Regulatory Agencies-Are They Too Cozy with Big Business? CPSC Chairs Accepted Travel Monies From Manufacturers

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According to published reports of the Washington Post, the chief of the Consumer Product Safety Commission has been flying around the country to various events, all paid for by toy, appliance and children’s furniture industries that they are supposed to be regulating! Many trips were covered by lobbying groups and lawyers representing these manufacturers.

The trips were taken by Nancy Nord or Hal Stratton, chairpersons, and involved at least a combined 30 trips since 2002, according to the Washington Post. The value of the trips, hotels and meals also combined to total nearly $60,000. For the last several years, critics of the agency have argued that the agency has become too close to the regulated industries it is supposed to regulate.
We all think of the Consumer Product Safety Commission is one of the ultimate watchdog organizations of our government-and it used to be-but not anymore.

Actually, CPSC officials have tried to defend the industry “bought and paid for” trips as a way for the agency to be in contact with manufacturing officials and to learn their concerns. One official with a consumer nonprofit advocacy group, Public Citizen, stated: “This is a blatant violation of the ethics code,” adding that nonfederal sources can pay for trips “but not if you’re a private party with business pending before the agency.” And yes, several examples exist of upcoming issues that concerned some of the manufacturers involved.

The commission has also been under fire due to the recall of large number of Chinese toy products during 2007 and an overall lax attitude toward product safety.

The trips covered or partly paid for by lawyers and trade groups for industries included San Francisco, travel to China, New Orleans, New York, Fort Lauderdale, Florida and Orlando, Florida trips.

Another amazing example of the cozy relationship with the regulated industries, is that Nancy Nord, the agency’s acting chair person, accepted more than $2000 in travel and accommodation monies from the Defense Research Institute to attend one of its product litigation trends seminars. The Defense Research Institute has 3000 members which are mostly lawyers representing companies involved in product liability or manufacturing issues. According to the DRI, the seminar was all business, and Nord spoke to the lawyers about the processes and procedures of the CPSC etc. Of course, there is nothing wrong with the commission and chair addressing this group, what is wrong is accepting money to travel to the seminar! It just doesn’t smell right.

The Federal Railroad Administration-
Another Major Under-Achieving Federal Agency

On September 12, 2007, David Vladeck, a professor at Georgetown University Law School testified before the U.S Senate Judiciary Committee on current activities of several federal regulatory agencies, and as to the Federal Railroad Administration he offered the following:

The Federal Railroad administration (FRA) has also pushed regulatory preemption. The FRA cites the express preemption of the federal railroad safety act (FRSA) as support for its broad preemption theory. But that statute preempts only a state “law, regulation or order” that covers the “same subject matter” as the federal rule….

The 9/11 Act [enacted in August 2007] makes explicit that actions “under state law seeking damages for personal injury, death, or property damage” are preserved, and are preempted when, but only when, they are “incompatible with” federal mandates. Notwithstanding this clear preservation of state damages law, the FRA now claims, in every rule that it is developing, that the rule, once finalized, will preempt any common law theory of liability. Consider one particularly egregious case of overreaching by the FRA. Only three days after Congress passed the 9/11 Implementation bill, the FRA included significant preemption language in its notice of proposed rulemaking regarding passenger equipment safety standards. In the preamble, the FRA claims that the rule preempts “any state law, regulation, or order it including state common law, concerning the operation of a cab car….or [multiple unit] MU locomotive as the leading unit of a passenger train” ….However, if [any courts defer] to the FRA’s preamble claim of broad preemption, California law, and the law of every other state that requires railroads to exercise due care for the safety of passengers, will be swept aside….

I could go on. But as this list makes clear, this administration has seized on regulatory preemption as a way to cut back dramatically on state law remedies for those injured by products and services Americans depend on every day for their health and well — being-medicines, medical devices, motor vehicles, the matress on which we and our children sleep, and the commuter trains millions of us take to work every day.

Hopefully, the message of Professor Vladeck about the biased roles these regulators are now adopting is getting through to the present Congress.

The Federal Railroad Administration is probably the absolute weakest regulatory agency in the U.S. government. The administrators are lobbied heavily by the industry supposed to be regulated, and there are very few well organized citizen/consumer groups whose message gets through to the agency compared to the railroads themselves. Also, there have been several high level FRA officials that have left the FRA to significant jobs in the railroad industry, …surprise.

For more information on this subject, please refer to the section on Defective and Dangerous Products.