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.^[52]

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.^[53]

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.^[54] 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.^[55] 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.^[56] 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.^[57]

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.