The CPSC Labeling Rule
Adam Paul Banner, a retired chemist turned woodstove salesman, thought the labeling on most woodstoves sold in 1976 and 1977 was inadequate. Of particular concern to Mr. Banner were stoves that did not specify "minimum clearance to combustibles and type of chimney required." Mr. Banner put his concerns on paper. Familiar with the world of private standards through an earlier association with the American Society of Chemical Engineers, he sent copies of his letter to the NFPA, the National Bureau of Standards, the CPSC, his congressman, and the governor of Michigan. The CPSC took the letter seriously, classifying it as a "petition" and assigning the staff to analyze it. (NFPA and NBS took no formal action.)
Under statutory provisions that have subsequently been amended, the CPSC was supposed to rule on the petition within ninety days. That meant gathering all information currently available, analyzing it, and presenting a recommendation to the commission. An informal ground rule provided that the staff would not attempt to generate new information in handling petitions. Experience proved the ninety-day period unrealistic. According to one program manager, "Four to six months is more realistic." In the case of the Banner petition, the process took almost two years.
Staff members attribute the delay to the "low priority" status of the petition. Unlike unvented gas-fired space heaters, for example, woodstove safety had not been singled out by the CPSC for special attention. Ignorance compounded indifference as the staff discovered how little it (or the commission) knew (or could easily find out) about woodstoves. The commission was briefed three times in the two years after the petition was received. Each time the commissioners requested more information from the staff. By the third occasion the staff voiced annoyance at the commission's seeming inability to make a decision.
Part of the problem was turnover on the commission. Three of the five commissioners were new when the staff conducted its March 1979 briefing, twenty-one months after receiving the petition. One commissioner asked what "overfire" means. (It means what it sounds like, firing the stove beyond its capacity, as, for example, in burning a dry Christmas tree.) Another dwelled on questions about the toxicity of artificial logs—something irrelevant to woodstoves, but apparently the subject of a Washington Post article. The scarcity of helpful data available to the staff further hindered the commission. The staff was unable to find out, for example, what percentage of woodstoves were installed by consumers versus professionals. (They eventually turned to the Washington Post for this as well, citing an estimate from a then-recent article.) The staff was also unable to determine the percentage of fires related to installation. "I don't have any quantitative feel," a staff member eventually told the commission, "but installation is mentioned a lot in the in-depth investigations."
The situation changed when the commission learned in May 1979 that the National Bureau of Standards had been studying woodstoves for almost two years under contract with the Department of Energy. Before receiving the NBS report, the commission expressed confidence that it would provide an authoritative basis for CPSC action. The report did not actually answer the previously unanswered questions, but it confirmed that installation was a major culprit in woodstove fires. The commission apparently agreed with a staff memo arguing that "we cannot state the specific reason for the fires" but "common sense indicates that there is a problem." With draft copies of the NBS report in hand, the commission granted the petition with little discussion on June 7, 1979.
Several reasons explain why the commission got involved in an issue it knew little about and that many people considered trivial. First, woodstoves were a trendy topic. The Department of Energy was studying them, and the issue tied the CPSC into a topic of national importance: energy use. Second, there was a virtual vacuum of private interests to oppose a CPSC regulation. Three separate trade associations claimed jurisdiction over woodstoves, and were barely more effective than no association at all. The commission sensed a natural (and easy) area for regulation. Finally, the idea of a labeling rule, as opposed to a full-fledged product standard, was attractive to the commission and the staff. It seemed simple and likely to keep the agency out of the kind of complex technical arguments that bogged down the CPSC's lawn mower and chain saw proceedings.
The Staff Drafts a Rule
Following a directive from the commission, the staff set out to develop a labeling rule. The desirability and effectiveness of mandating information disclosure was not considered during this process; it was taken for granted. Since the commission had already endorsed the notion of requiring information on minimum clearances, the staff concentrated on two other questions. First, what problems other than the "safe distance to combustibles" should be addressed by the labeling rule? Second, in relation to each problem, what specific information should the rule require?
The staff took an expansive approach in determining the scope of the labeling rule. Almost every hazard scenario that might be associated with woodstoves was considered an appropriate subject for the warning label. Many proposed warnings addressing the obvious—cautioning, for example, that stove surfaces are "hot during operation" and that hot ashes should not be placed in cardboard boxes. Others seemed more practical, such as disclosing the conditions that signal overfiring and stating how often a chimney should be cleaned and inspected. Deciding on the scope of the labeling requirements was easier for the staff than determining what specific information should be required on the label. In the case of information about clearances to combustibles, the staff had to confront the same intricacies of test methods faced by UL. The safest minimum clearance between a woodstove and a combustible wall—the information considered most important by the commission—is neither readily apparent nor easily measured. It is akin to the gas consumption of an automobile. Just as "your mileage may vary" with different driving conditions, the safest minimum clearance for woodstoves varies by such factors as fuel type, chimney size, and, most of all, by type of wall materials.
The staff recognized the problem and attempted to sidestep it. They knew that the commission did not want to get into the business of testing stoves. The CPSC had neither the budget nor the necessary technical skills. Part of the attraction of the woodstove labeling rule was its seemingly low cost and simplicity—the agency could accomplish something without facing difficult, technical issues. The commissioners also wanted to avoid the kind of criticism EPA had received over automobile mileage standards, so the development of a CPSC test method was out of the question.
Instead, the staff sought to put the burden on industry, reasoning
that "because the staff cannot know all the conditions for which manufacturers may recommend or promote their appliances, the determination of the appropriate information is the responsibility of the manufacturer." How the "appropriateness" of test methods would be reviewed and the extent to which different methods would be comparable were questions left unanswered, at least in the first draft of the regulation.
The staff took the same approach with other provisions. Instead of trying to figure out how often a chimney should be cleaned, they put the burden on the manufacturer to specify how often. Similarly, the staff proposed that labels "indicate the conditions which signal overfiring" rather than setting forth an accepted statement. Stated in terms most favorable to the staff, the rule was a paragon of flexibility; in a less favorable light, this flexibility disguised the inability of the staff to write its own standard.
Analysis or Post Hoc Rationalization?
Several of the CPSC directorates—functional divisions within the agency—analyzed the proposed rule. The Epidemiology Directorate revised its national injury estimates and conducted in-depth investigations of specific incidents. The Economics Directorate used this information in a preliminary and final "economic impact statement." The significance of this analysis, later cited in the Federal Register as justification for the rule, is questionable, because the concept of a labeling rule was endorsed by the commission before these analyses were done.
The Epidemiology Directorate analyzed the hazards associated with woodstoves with two goals in mind: estimating the total national losses (death, injury, property damage) related to woodstoves, and determining the most common hazard scenarios. CPSC's national injury estimates have long been subject to criticism. They are based on a reporting system from seventy-one hospital emergency rooms. These estimates are practically blind to cause, and they pick up only certain kinds of injuries. The injury data for woodstoves suffer from both problems. On the one hand, the estimates indicate a dramatic increase in injuries associated with woodstoves (546 percent from 1974 to 1978) without revealing that almost all of these injuries were caused by touching or falling against the stove—something that could not possibly be eliminated by regulatory action. On the other hand, these estimates do not reflect incidents involving property damage, however significant, but not in-
juries requiring emergency treatment—the case with most residential fires.
In order to better understand the scenarios in which woodstoves resulted in injuries, CPSC field representatives conducted "in-depth investigations," following up on incidents reported by consumers or collected from hospitals or the CPSC's newspaper clipping service. Approximately 150 in-depth investigations were conducted on woodstove-related incidents in 1980–81. These reports verified the hazard scenarios that the staff had in mind when considering the scope of the rule. Unfortunately, most of the "in-depth investigations" do not provide information that would be particularly helpful in evaluating the rule. For example, few indicate whether the stove was certified or whether the owner read or followed the instruction manual. Some of these omissions were due to the limited training these investigators had in fire incidents. In other cases, the investigators faced uncooperative or hostile subjects.
Minimal Costs, Doubtful Benefits
Armed with these assorted injury data, the Economics Directorate attempted to analyze the costs and benefits of the proposed rule. As is so often the case, the costs of the rule were easier to estimate than the benefits. The staff concluded that the rule would cost approximately $2.80 per stove, or $3.6 million annually. The estimate is probably low. It was based on several optimistic, but questionable, assumptions. Although a higher estimate of costs would have been more realistic, the CPSC's estimates were not unreasonable. The same cannot be said about the estimated benefits.
CPSC's economic analysis did not seriously consider whether the benefits of the rule were likely to exceed the costs. Instead, the costs were presented alongside the national injury estimates with the assertion that "any reduction in these injuries and deaths would result in significant benefits to consumers." When the rule was published, the Federal Register notice included the statement that "the Commission is unable to estimate the degree to which the rule may reduce fire incidents, [but] a reduction of seven percent (or possibly less) … would offset the total yearly cost of the rule." The likelihood of this happening was never discussed, and although it would be very costly to conduct tests to ascertain the probable effects, there are two reasons to think that a reduction of 7 percent is extremely unlikely.
First, consumer information and education campaigns are notoriously unsuccessful. A former CPSC commissioner argues in a recent analysis of three such efforts that they frequently fail. A CPSC staff member in the Human Factors Directorate agrees that measured results "around 2 percent are about all you can expect." Second, the estimated impact must be adjusted to reflect the percentage of stoves already labeled. Since over 70 percent of the stoves on the market already bore labels substantially equivalent to those proposed by the CPSC, the marginal benefit of the CPSC rule would, at best, constitute 30 percent of the estimated potential of labeling. (As explained later, this figure is optimistic, since the CPSC has not even matched the performance of the private sector in achieving compliance.) Moreover, by the CPSC's own estimates, injuries did not decrease at all during the years in which product certification, and hence product labeling, increased significantly.
Comments, Some Changes, and a Deferred Decision
The woodstove labeling rule was "kind of a small potatoes rule," according to a CPSC economist. "It was very low visibility." It drew few comments from the public and generated little controversy. Seventy-six comments were received after the rule was published in the Federal Register: thirty-seven favored the rule, twenty-four were against it, and fifteen stated no position. Only seven people took the opportunity to testify before the commissioners at a hearing in Washington, D.C. Dissatisfaction, to the extent that it was expressed, mainly concerned issues peripheral to the content of the labeling rule. A consumer group complained that the rule should also cover fireplace inserts.
Manufacturers complained that the proposed rule would take effect before they had an adequate opportunity to adapt and sell off existing inventories.
The relationship between the proposed government standard and the existing UL standard ended up being the most difficult issue for the CPSC to put to rest. Testing labs, aware of the intricacies and importance of test methods, pointed out that mandating the disclosure of clearance information would have little meaning without specifying what constitutes "appropriate" test methods. Lacking the resources, and possibly the knowledge, to develop test methods or criteria for evaluating them, the CPSC was forced to defer to the testing labs. The proposed rule was changed to indicate that UL 1482 was an "appropriate" method.
More troublesome to the adoption of the CPSC's labeling rule, particularly given the agency's practical endorsement of the test methods in UL 1482, were increases in private product testing. The percentage of stoves tested to the UL standard rose significantly in the two years after the CPSC received the Banner petition. By some estimates, 80 percent of the new stoves on the market were certified to UL 1482 when the CPSC finally published the proposed rule in November 1980. (In 1978, it was approximately 10 percent.) The UL standard also changed while the CPSC analyzed the Banner petition. In direct response to concerns expressed by the CPSC, UL changed its labeling requirements to conform, in all but a few minor respects, to the proposed CPSC standard.
Manufacturers argued that a federal rule was unnecessary and possibly counterproductive. With compliance levels near 80 percent, the rationale for a federal rule was limited to whatever benefits the government could generate by affecting the remaining 20 percent. Unfortunately, the CPSC staff did not acknowledge the concept of marginal benefit. None of its analyses pointed out that most of the benefits of labeling, if indeed there were any, were already captured by the UL standard. Moreover, as discussed below, there was little reason, then or now, to believe that a federal rule could achieve any additional benefit.
A more difficult question for the CPSC was whether a federal rule would have an adverse effect on the laboratory certification business. The testing labs argued that the existence of a mandatory federal rule would decrease the use of independent testing and, by implication, compliance with their standards. In other words, manufacturers, content in the knowledge that they satisfy all federal requirements, might stop meeting the "voluntary" requirements, which cover much more than just labeling. Since woodstoves generated approximately $350,000 in income for UL alone in 1982, the economic implications of a drop in business were at least as significant as the possible safety implications. These two concerns were so troubling to the commission that adoption of the proposed rule was deferred in order to address these issues.
In a May 1981 briefing paper, the staff informed the commission that an estimated 70 to 85 percent of new stoves were certified to UL 1482. It was not known how many of the remainder were nevertheless built in conformance with the standard. In light of this new private sector initiative, the staff was hard pressed to recommend adopting the proposed rule. Neither did they want to abandon it, particularly in the absence of total compliance by the private sector.
The commission opted to delay its decision so that a market survey
could confirm the extent of third-party certification. The survey confirmed that approximately 80 percent of new stoves were certified to UL 1482; however, some of the laboratories competing with UL apparently were not as demanding in applying the labeling requirements. This compounded the staff's already considerable skepticism about voluntary compliance. The generally high levels of voluntary compliance confirmed in the market survey did not lessen the reluctance of the staff to abandon the proposed rule.
The commission agreed and adopted the rule, using as the main justification the differences between the informational requirements in UL 1482 and the proposed rule. The differences were slight. The CPSC rule demanded more detailed instructions on installing chimney connectors and cleaning the chimney. Whether the type of detail envisioned by the standard would be forthcoming depended on the process of implementation; the requirements themselves were not specific. On the other hand, a staff memo (not mentioned in the Federal Register notice) identified several respects in which the UL standard was stricter" than the CPSC rule.
The arguments advanced by the CPSC in the Federal Register rang hollow. Information disclosure is generally considered capable of affecting only a few percent of all product injuries, if wildly successful. And the commission was fiddling with the difference between using the word "furniture" as opposed to "combustibles" on the warning label. The real reason for the CPSC rule was that levels of compliance with the UL standard—estimated at 70 to 85 percent—were considered too low. Whether or not such levels of compliance should be considered acceptable, the important, but unstated, premise behind the CPSC rule was that a government standard would result in higher levels of compliance.
Presumed Benefits, Implementation Problems
The CPSC's experience has not been as rosy as the staff's expectations. Stated in terms most favorable to the agency, approximately 70 percent of the woodstoves on the market comply with the CPSC standard—less than the percentage in compliance with the UL standard. Using assumptions least favorable to the agency, compliance may be well below 50 percent.
One reason for this relatively poor performance is that the agency has had trouble reaching many of the small, family-sized businesses that manufacture woodstoves. A more important reason is the loose word-
ing of the CPSC rule. Flexible requirements, while desirable in theory, can be difficult to enforce in reality. Most of the woodstove labeling requirements are purposely open-ended. The commission wanted to appear flexible, and the staff had no desire to decide (and later defend) such matters as the minimum size for lettering on labels or the best way to describe how to pass a flue pipe through a combustible wall. The CPSC had already lost a similar battle in court over proposed warnings for swimming pool slides.
Some firms, in the view of the Enforcement Directorate, are subverting the rule by taking advantage of its vagueness. The rule mandates, for example, that a warning label must be "legible," "conspicuous," and "readily visible." To the CPSC this means understandable; to many manufacturers it means capable of being understood. The difference, something not addressed in the rule, entails how well the information is conveyed. A few firms stamp the warning label into an aluminum plate, for example. The practice does not clearly violate the rule, but, as a staff member in the Enforcement Directorate put it, "I defy anyone to read it." Print size poses a similar problem. The lettering on many labels is small and difficult to read. It is not, however, illegible.
A more widespread problem, at least in relation to the installation manual mandated by the rule, is that firms do not understand what the rule requires. Vagueness can be confusing. Manufacturers are supposed to provide "step-by-step installation instructions." The rule says nothing about how detailed these instructions should be. Practically no firms are providing all of the details deemed appropriate by the Enforcement Directorate. The agency's response provides an ironic conclusion to the tale of its involvement in woodstove safety regulation: after justifying its entry into woodstove safety regulation on the grounds that independent laboratories were not doing an adequate job, the CPSC is now turning to the same labs for assistance in correcting the problems with the agency's rule. The Enforcement Directorate is trying to persuade these labs to ensure a level of detail in installation manuals beyond that specified by the CPSC rule.