Small businesses are facing serious compliance burdens as a result of the Consumer Product Safety Commission (CPSC)’s recent interpretation of the Child Nicotine Poisoning Prevention Act (CNPPA). Keller and Heckman partner Sheila Millar testified on behalf of the E-Vapor Coalition about the adverse impact at the Small Business Administration’s (SBA) regulatory fairness hearing held on August 19, 2019. As we previously reported, CPSC’s enforcement position on requirements for e-liquid packaging exceeds its statutory authority, is disproportionate, and departs from the Commission’s customary cooperative approach of providing reasonable timelines and working with industry, especially small companies, to come into compliance with new guidance or interpretations.
The CNPPA gave CPSC jurisdiction over the packaging of nicotine-containing e-liquids in open containers. Since the CNPPA went into effect in July 2016, CPSC consistently interpreted it to require the same child-resistant packaging that is used for prescription drugs, over-the-counter medication, and household chemicals like bleach. But in March 2019, CPSC did an about-face and announced that it interprets the CNPPA to require not only child-resistant closures, but also a flow restrictor mechanism that prevents more than 2mL of a substance to be dispensed if an open package is turned upside down or activated once. CPSC’s hastily drafted protocol for testing compliance includes a squeeze test that would not be applicable to glass bottles. Millar added that the only other consumer product required to be packaged in flow restricted packaging is furniture polish.
CPSC’s continued enforcement actions – including inspections, product detentions at ports, and issuance of Notices of Violation that include demands to immediately stop sale, recall products from retailers and distributers, destroy inventory and returned units, and make public statements regarding the risks of “noncompliance products” – are having a significant impact on small e-liquid companies. Many companies are now spending between $200,000 to $300,000 to transition to plastic flow-restricted containers in just the past few months. To compound the problem, CPSC took these actions without coordinating with the Food and Drug Administration (FDA), the primary regulator of tobacco products. CPSC’s demands create a potential conflict with FDA’s Deeming Rule, which prohibits sale of new tobacco products (including products in new packaging) that have not undergone an extensive pre-market authorization process. To date, FDA has refused to provide a formal statement of enforcement discretion confirming that packaging changes implemented at the demand of CPSC will not trigger premarket authorization requirements. Millar urged the SBA to help avoid the “regulatory whipsaw between CPSC and FDA” that the vaping industry is facing.
Also representing the vaping industry at the hearing was Mark Anton, Executive Director of the Smoke-Free Alternatives Trade Association (SFATA), who spoke about the serious hurdles over 20,000 small vaping businesses are facing in light of the accelerated May 2020 Premarket Tobacco Product Application (PMTA) deadline for all vapor products. That court-ordered deadline is currently being challenged by industry trade groups.