Industries Seek More Regulation By FDA, CPSC, Other Safety Agencies. But Would New Rules Really Protect Consumers?Sep 17, 2007 | Parker Waichman LLP, LLP
Food poisoning outbreaks and recalls of defective toys, drugs and other products have prompted consumer groups to demand greater governmental oversight of the industries responsible for those recalls. But now in a stunning turnabout, many of those industries are also pushing for more funding and authority for agencies like the Food & Drug Administration (FDA) and the Consumer Product Safety Commission (CPSC). However, all is not as it seems, and some new regulations could actually rob consumers of their rights and supersede state laws that offer the public more protection against defective products.
Just a few years ago, manufacturers, pharmaceutical companies and food processors where pleased by the Bush Administration’s hands-off regulatory policies, and generally sided with the administration to block new consumer protection rules. But now, some industries are finding that it might be in their best interest to work with Congress to craft new regulatory legislation aim at defective products. This new attitude towards regulation is motivated mainly by self interest. For instance, some industries forced to compete with cheaper imports that don’t meet voluntary safety standards now want those standards to be mandatory. Also, in response to the huge number of product recalls in the last several years, some states have made an end run around the federal government and passed their own safety legislation. By pushing for stricter federal rules, states might be convinced to hold off on passing their own tough rules.
Politics also has much to do with the pro-regulatory stance now taken by some businesses. Democrats, generally friendlier towards government regulation, have taken control of Congress by a slim margin, but it is thought that they will control even more seats after the 2008 election. And, they could control the White House. If that happens, the days of a hands-off regulatory environment will be over. Pushing for tighter safety, health and environmental mandates now might head off even stricter regulations in the future.
Food poisoning outbreaks have led to some of the loudest cries for regulation. In the past year, everything from peanut butter to snack foods and lettuce has been implicated in outbreaks of Salmonella and E. coli around the country. Now, grocery stores and food processors are working with consumer advocacy groups to strengthen the FDA’s food policing powers.
And the food industry is not alone. Several US toy manufacturers have endorsed plans to give the CPSC more authority following a string of highly publicized toy recalls. And the All Terrain Vehicle industry stopped fighting mandatory safety regulations after it started losing market share to cheaper Chinese-made vehicles that did not meet current voluntary safety standards.
But not all of the regulatory changes endorsed by industry groups are necessarily good for consumers. Many proposed laws include provisions that block consumers from filing lawsuits if products are found to be defective. Such clauses were included in changes the FDA made to rules governing drug labels. The clauses bar consumers from filing some liability claims in courts and take precedence over sometimes tougher state rules.
Obviously, industries would not endorse new regulatory legislation unless it was beneficial to their bottom lines. Now the challenge will be to ensure that such legislation benefits consumers as well.