 Good morning and Welcome to this public meeting of the United States Consumer Product Safety Commission We have one item on the agenda this morning The federal register notice removing safety standard for magnet sets from the code of federal regulations Before we begin the hearing this morning. I just want to take a moment here to acknowledge Obviously the change in seating, but I and I want to first of all express my Really how proud I am and and honored I am to be the acting chair here at the Consumer Product Safety Commission But I also want to take this opportunity to publicly thank as I have been doing since I took over The service of Elliott Kay as our chairman So I want to just take a moment here to recognize all of his service and what he has done for the Consumer Product Safety Commission both as chair and his former capacities before that as chief staff as well as Executive director and and now as a commissioner, so if you would join me in just recognizing and thanking Elliott for his service So this is the maiden voyage here And I have two experts on either side of me, so I expect everything to go swimmingly well It's clear from discussions with individual commissioners that there is an interest in a renewed attempt to promulgate a magnet Standard that will pass muster in the courts Therefore, I have asked staff this morning to be prepared to answer questions on this topic generally For the discussion this morning the CPSC staff members are mr. Dwayne ray Deputy executive director of safety operations. Dr. George Borlase assistant executive director for hazard identification and reduction and Miss Patricia Pollitzer from OGC's office As a reminder, too, I just want to remind my colleagues that OGC has sent out some rules of the road to all of us I just want to confirm that everyone received them and I'm sure Mary and OGC will not hesitate to keep us out of the ditches this morning as we proceed with our hearing So this morning we're going to open it up For questions and I will begin with my round of questions and then each of the commissioners will have five minutes as well So good morning, and thank you to staff for being here First of all to begin with I do want to clarify a point for the record and that is that I didn't vote for the magnet standard That was vacated by the 10th Circuit Court of Appeals Although I was on the commission at the time I was concerned about voting on the magnet standard while there were contested recalls involving the same magnets pending adjudication But Because this action today is removing the rule from the Federal Register I don't think it causes me and it does not cause me the same concern it merely implements the court order for us to vacate the rule So my first question actually is for OGC Does the 10th Circuit Court decision requiring us to vacate the magnet rule also require us now to promulgate another rule No, it doesn't require the Commission to do that. So as you noted the court The 10th Circuit vacated the Commission's rule, but it also remanded the rule to the Commission so The rule the vacating the rule means it's no longer in effect But remanding the rule means the Commission has the option to address the issues that the court raised in its opinion and issue conduct a new rulemaking. Thank you Thank you for Mr. Ray for Dwayne Can you explain to us how the original magnet rulemaking got started? Was it staff recommending the rulemaking or was it from the commissioners? sure, I I think I've shared with some I still remember the day and In one of the conference rooms where I felt like that there was a consensus to to move forward You know, it was definitely a staff Motivated push to get there But as with all of these things we were definitely engaged with the chairman at the time I know it's tenant bombs office to to get the full support to move forward on that But yeah, I can I can still vividly remember that that day in that meeting that that we made that decision Thank you when that rulemaking began was it part of an operating plan or was it independent of an operating plan? my memory It was in between those time Periods that that this kind of came and then eventually it did make it into the operating plan as As it began to take take place. Thank you If the staff and I and this is for mr. Dr. Borlase if the staff were asked to consider whether or not to recommend rulemaking Can you talk to me and for the commissioners? What? What factors would they consider in proposing the rule staff would consider all the factors that we do in every Rulemaking there is some specific information for example Should the Commission direct us to repurpose the rule that we could already rely on a lot of the information from our engineering Sciences for example on magnetic flux flux index that hasn't changed in the last couple years The health science information on the you know, health effect if a child swallows more than two magnets That hasn't changed in the last couple years, but we would go through The same process we do with respect to the full epidemiological analysis of all the incident reports whether they've come in from nice etc as We've proposed the economic analysis the regulatory analysis the reg flex analysis one Unique aspect of this clearly is making sure we address the issues that were brought forth by the 10th Circuit Court of Appeals But that work has also been incorporated in the project plan Thank you that From what I can recognize from where we were then and where we are now several factors have changed in terms of And then when we first initiated the rulemaking on magnets probably the most significant to me is the exposure So even if the even if we determine the hazard is the hazard is the same Clearly since the band was in the rule was put into place The number of magnet sets has diminished greatly. So one could argue Even if the hazard still exists the exposure to the hazard is Significantly diminished so Does the staff will the staff take that into consideration as they're going through this analysis? The staff would look at that as they establish what the regulatory baseline would be In the last package we had a baseline of what was before a lot of the compliance action Took into effect and that is our starting position on it with respect to but that we would have to look at that Thank you, my time is up. So I'm going to Move to have miss commissioner Adler asked his questions Thank You madam chairman, and I welcome you as our acting chairman I'm sure you're gonna do a superb job, and I look forward to working with you So I don't know whether this question is for mr. Ray or dr. Borlase, but let me ask it and whoever feels more inclined to answer it Please do and this goes to the point of exposure that the chair raised If you recall at the time of this decision all but one of the 13 largest distributors of small and not all of the distributors Just the 13 largest of these small high-powered magnet sets had ceased distributing the product But since the court's decision, it's my understanding that one or more companies have announced an intention to remove Resume sales of these magnets can either of you share any information generally about whether companies have announced an intention to resume sales of these magnets Yeah, I can I can take that we in the office of compliance have done some initial surveillance both at Brickham order stores and also online We are aware of at least three companies online That are currently selling what appear to be the similar magnet sets that were subject to the rule in the past We Some are on Backorder like meaning there. They're not going to be ready till March time frame and and later but we are in the process of collecting samples and analyzing what is in the market from from the online our Initial assessment of the retail we did not find them readily available in retail, but I do think we are seeing the market begin to Reengage in this in the sale of these magnet sets and To your knowledge have any of the companies that have announced an intention to market or they're currently marketing have any of them modified these Magnet sets in terms of the size or the strength of the magnets Well, we are aware of a company when the rule was still in place that that Basically made them smaller and less powerful to meet the flux that was specified in the rule So there were there were company there was at least one company to my knowledge that had compliant magnets compliant to the to the rule but But there you said there were three companies of the three companies Have you seen anything that would suggest they're planning on modifying the size of the design of the magnets or the Strength of the magnets. Yeah, so at least the one that we've actually got a sample of It appears to be a strong flux much greater than 50 So the tenth circuit when they invalidated the rule in part said they did so because Quote the Commission offered no explanation or rationale for its apparent assumption that the observed reduction in injury rates would not endure But if companies are planning on reentering the high-powered magnet Market now that the standards been invalided that would tend to be fairly strong evidence that the injury rates are likely to increase Is staff prepared to do an analysis of the likelihood of increased injuries and the likelihood of Increased incidence of sales of magnet sets Was that clear? You mean as if the Commission directs us To move ahead with you know, I think our proposal That we were looking at and and trying to provide some resource estimates was basically focused on The epidemiological side Where the court had indicated it had concerns And so we would focus on getting an update on the injuries there and then on the economics memo where The baseline that was used for the the benefit cost analysis. Yeah, and on the epidemiology the court said that 90% of the injury reports on which we relied and this was their favorite word only possibly Involved the subject magnet sets so the court said we hadn't provided a proper conclusion That the rule was reasonably necessary to eliminate or reduce the risk of injury You don't have to go into detail But can you tell me where their staff is prepared to explain in greater detail why the data on injuries is reliable and Trustworthy we are and that's what we would plan if the Commission directed staff to take that on Yeah, and I would also just commend to the staff's attention that the dissent in the case pointed to additional Data sources and I would hope that the Commission staff would explain if we were to move to Continue this rule to explain that in greater detail and the final issue that the court addressed was the utility of the Magnet sets whether that was outweighed by the benefits his staff also prepared to address that concern of the court Should we move forward? Yes, we are Okay, and in final I'm out of time. Thank you Commission of Robinson Thank you Agnes chair Birkel and I also welcome you as I have privately and in a much more public form than this and I look forward to Working with you. I also want to thank you and your staff for on such quick notice or relatively short notice I should say putting this hearing together. I I Just want to say that in re-reading the 10th Circuit opinion within the last 36 hours I can tell you that my view of the opinion And I'm and I'm delighted at this is that the court's ruling is very narrow in fact specific And it only requires us to address some specific Technicalities of our cost-benefit analysis and I don't mean to influence you because I know you'll do your own analysis But I just wanted to make sure that in the analysis that you're going to do for purposes of The next proposal to us Hopefully will be to decide whether some aspects of the analysis need to be explained more fully Whether to analyze additional data and whether to weigh any additional factors relating to the anticipated costs and benefits Are those all questions that you anticipate addressing Yes, okay, I have nothing further. Thank you very much. Thank you commissioner Kay Thank you chairman Burkle, thank you for your kind words that you have said here and and another for From the first time that I called you after your confirmation and called commissioner Robinson after her confirmation When I was chairman Tenenbaum's chief of staff and offered my assistance to you in any way And then was in essence your staffer for the first couple of weeks that you got to the commission I think we've been able to develop a Working relationship in a bond that is not typical of the city and we've done it in many different capacities now And I'm looking forward to continuing to do it in this capacity Would the commissioner yield absolutely So the when Elliot came into my office as executive director and it was myself and Nancy I think it was just the two of us was maybe the first or second day his first words of advice to me were If you say the word phthalates, don't say pothalates. They'll know you're a rookie. It's phthalates That's true, and I think that was a sense of goodwill but that we didn't set you up Thank You miss politics or mr. Ray dr. Borlase for appearing and for of course your excellent good work and assistance to us Mr. Ray if I can ask you or dr. Borlase, I'll leave it up to whoever feels it's more appropriate If the commission were to direct staff to prepare and send to the commission as soon as possible a Draft notice a proposed rulemaking to address the holding of the 10th circuit opinion that was issued in November of last year What would their resource implications, please be for that sure Based on the project plan and the staff we plan assigned most of the Implications would be two things first for this year internal EXHR improvement projects that we were working on and then separately some work in 17 that we were doing in preparation for 18 rule makings specifically econ on portable generators And do you have an estimate of the staff months associated with and it can just be an estimated I'm not gonna hold you to it From the project sheet we estimated 11 staff months total across EXHR and general council Thank you for that and do you anticipate when the commission Does a mid-year later this year that that would have any material changes to the mid-year? None beyond what I just described Okay, thank you. No more questions madam chair Thank You commissioner over thank you madam chairman Commissioner Kay welcome to the side of the of the dais, you know unlike the Jefferson's Louise and George they moved up to the east side You're actually so you are moving east but chairman Berkley you moved west to an to a loftier position So take that as it will but welcome to the neighborhood look forward to having a nearby You've already made me lose my composure with a little joke once already commissioner Kay Welcome staff, and I do have some technical questions around Exposure as I think the chairman brought up any sound risk assessments going to be a consideration of hazard times exposure And I agree with much have been said Dr. Borlaise as you pointed out that that our staff doesn't feel like the hazard potential of small high-powered Rare earth magnets has changed But I would do want to get to whether or not there is the exposure that then compels the commission to Allocate its very scarce resources towards addressing it in the most heavy-handed way that we can do so as an agency through regulation The first thing I want to know is in terms of evidence of magnet importation. I think commissioner Adler was talking about some of the Stated desires of different firms to get back into The the magnet sale and when I mean magnets, I mean those that would be potentially subject to the rule Is there any evidence? That these magnets are being imported I think I recall and I don't think it's been disputed that these products have are all primarily imported and they're not Mind or to be honest, I don't know how a magnet is created, but I understood them all to be imports primarily from China Do we have any evidence from our import staff through the identification of HTS codes that there is that there that their Magnets are coming back into the United States. I Don't have data in front of me, but we do have situations where Direct-to-consumer sales are happening and occurring and those are primarily imported how they Mr.. Ray they are they coming in in any kind of numbers I do I respect the fact that you said you don't have any data But do we have anything that? That causes concern for the agency in terms of magnets coming in and any in any particular high volume that would That would merit a priority for the agency to address Yeah, again, I don't have numbers, you know, I think we've talked about what I think we view right now as a potential of that That re-establishing and we are seeing that to that beginning So I think that's that's about as much as I can say at this point, right and of course the having a seller and having a Potential buyer are only parts of the equation There still needs to be a distribution channel and I think I recall and can you confirm that of the 2.7 million Units of magnet sets that were identified in the previous package over 95% of those were sold through traditional retail channels as opposed to Direct-to-consumer distribution channels. I Don't have that information for you right now, but I can get back to you on that Do you recall at the time that magnets were coming into the market and however? You want to categorize 2.7 million sets being sold. That's what we estimated I think our recall numbers were a little bit different in terms of identifying some of the major players But from what I recall from before I joined the agency is that one of the first activities of the of the agency was to cut Off the means of distribution and that is by working directly with retailers to advise them of the hazard the concern that it posed From the CPSC's perspective and to see if they would voluntarily stop selling the product And I believe that the agency was mostly successful in that effort Do you do you recall the same in terms of how people were actually buying magnet sets? Yeah, I think you correctly articulated the compliance actions that were taken at the beginning of this activity and You know like a commissioner adler had mentioned we got the bulk of the Companies that were sailing to voluntarily agree to stop selling and recall their products Do you have any evidence of? The fact that retailers by virtue of the rule being thrown out by the 10th circuit plan on changing their tune and now starting to Offer their retail channels as do distribution channels to to sell these products Beyond the online sites that we've seen that's all I'm aware of but you're not aware of any retail sites that are now changing their Their business decision and now deciding to open up Open up magnets for sale to their to their customers. That's correct. Okay And without getting oh, I'm out of time. I beg your pardon. Thank you madam chairman. Thank you staff Thank you. I think we'll have a second round of questions if any of the commissioners have any additional questions. I know I do Dr. Bullase, I just want to go back to where we kind of left off so that if we argue that the exposure Excuse me that the risk of the hazard is the same, but the exposure Seemingly would be less given the the ban that's been in place for a few years now Do you sense that that that this issue or this risk Demands immediate attention or is it something that we can put within the context of an ops plan and have Staff assess it within all of the other risks and hazards. They're looking at We don't have a recommendation on like the timing At this time, I mean, I know It's come up today as part of it so we put the work together as part of the timing and a lot of the Discussion about exposure, etc. Is exactly the work staff would do if directed by the commission I know we've got a limited amount of information now to answer and The plan would be to do the additional work necessary to have that information to bring it to the commission as part of the proposed rule Thank you. I want to talk a little bit about what Commissioner Adler brought up and that was the court's language about the possibility so When we're looking at the nice data has anything changed is there a more specific Code now within nice that would give us more certainty as To any harm or injury that's caused what's going to change to make that possibly word be certain when looking at it, I think staff would Be much clearer in describing the work that was done and in analyzing all of the incidents and better describing the confidence They have in their in their analysis Previously when they when it was described as possibly. I don't know that that fully Captured the confidence that staff had that it was probably and so that is something staff if directed by the Commission would go back and Do as part of the reanalysis okay, and have there been any coding changes I recall during One hearing we had specifically where it was raised that the coding is not precise for the nice data Has there been have there been any changes when it comes to the nice coding? coding specifically I'm not aware of a coding change I Want to talk a little bit more about the issue with retail retailers and so we've done some Like surveillance online surveillance as to whether they're coming in either Via retailers you say that it was that done online or did you actually go into stores? The retail surveillance we physically visited 23 stores throughout the country Primarily looking at like toy stores and things like that where we had seen the product sold in the past and we did not See the magnet sets for sale And when they visited the retailers was it Where their conversations about the possibility that they might come back into the market? I? think that that's Likely happened when our investigators did I have not talked to all the investigators that went through that to be able to Say with certainty how those conversations went, but I'm sure that's a possibility there one of the Concerns and when we talk about certainty and and this market research that we're sort of do we've done some Obviously both the internet as well as in the brick-and-mortar stores But do we is there any certainty that this that these magnets were a Passing fad and now the consumer has moved on and despite the fact that they may be available again Consumer has moved on to a different desk toy. Yeah, I don't know that we're going to be able to answer that question You know, I think if the demand is the same as it was before I mean, I think that's you know part of the the concern if we get back to that situation again But you're right things change. There's fads Products that are hot today and not not tomorrow. So that's that's also a possibility also Will that be part of the consideration as we move forward if we move forward with the rulemaking? I'm not exactly sure how we in consideration in what context Well, just to make sure that we're not chasing something that may not even be a problem We're we're this product may not be back in the market in full force like it was a few years back Okay I'm not entirely sure how we're going to capture that But there may be some thought that we would have to put to that. I'm thinking more in our economics team they're pretty creative at trying to Provide this kind of information. So I I don't have an answer on it right now But I think we could get back to you on that. Thank you commissioner Edler Thank you very much in continuing on the line of inquiry that the chairman has raised It's my recollection that these were introduced into the market in the year 2009 and within a very very short time The sales of them had exploded and jumped into the millions of sets. Am I correct in my recollection? That's correct. And so I'm also curious That was 2009 we're in the year of 2017 has the actual Internet market grown Stayed the same or dropped over time in terms of just products generally sold. Do you think our economics team could give us some insight into that? Yeah, I'm sure we could I think you know I Think it's it's clear to see from 2009 to now. There's definitely a lot more sales online in general consumer products I don't think that's a hard one to I don't have the exact numbers, but I think that's definitely been a growing Yeah, and I think that would be very helpful in terms of figuring out what the distribution Channel would be for the for the magnets and I would just This is not a question. It's just a brief comment is that it is true that we worry about exposure But exposure also is one aspect of our concern the other it's it's always frequency times severity And I see nothing in the indication of these products that the severity of the hazard has gone away At all so that I think the court wasn't saying you need a certain minimal level of Sales for us to make a proper finding. I think that what they were saying is tell us what the Best quantification you can come up with with respect to your cost-benefit analysis of the sales of these products And one of the things that I think we're seeing is that it's a an incredibly moving target And it's you're never going to be able it other than any a snapshot at any point in time to give that quantification No further questions Thank You commissioner Robinson Thank you. I very much respect the timeframe that staff has come up with in terms of what's going to be needed for further analysis in light of the Tenth Circuit opinion, so I'm not going to ask you to engage in conjecture as to what you might find During that reanalysis. I think that the as I've said that the Tenth Circuit opinion In terms of the remand parameters is extremely limited and I think our hearing today is extremely limited It's simply whether we're going to ask you to do an analysis and repropose And I'm going to presume that once the reproposal comes before us that will have the analysis that you're being asked to To guess about today, and then we'll make the decision at that time So I have no further questions Thank You commissioner. Okay Thanks, Jim and Virgil miss power to just quickly. We've heard a few times that the Rule is referred to as a ban. Is that accurate or is it a performance standard? Really, it's written as a performance standard It sets out the requirements that must be met based on the ASTM toy standard certain flux Index for the magnets that they have to Have to pass in order to be available in order to meet the standard. Great. Thank you for that clarification. No further questions Commissioner Horvick. Thank you, madam chairman I want to further explore something that Commissioner Adler brought up with regards to frequency in the hazard assessment and frequency of the Incidents that have been reported to the agency. So I'll start with the Tenth Circuit's opinion and I'm reading from page 13, and I just want to find out whether or not staff disagrees with any of the citations provided by by the court, but the court recognized that in 2012 there were 52 reported incidents to the agency in 2013 that number fell down to 13 and in 2014 that number was further reduced to two incidents reported to the agency Would you agree with the with those numbers as provided by the Tenth? They align with with your statistics Page 13. I'm not exactly sure where they're referencing, but I'm sure it's probably I Cannot answer your question. Sorry Okay Well, here's a question that you were able to answer for me prior to the hearing and I want to be able to provide that to the Public as well. Well, the court said in 2012 the number was 52 and then it went down to 13 and In about halfway through 2014 it was two and then you were kind enough to provide some additional data subsequent to the 2014 number which showed an additional two incidents in 2014 so that would be four and Then you also provided that in 2015. There was one incident and 2016 there was one incident So for those keeping score at home Over a five-year period it went from 52 to 13 to four to one to one Now in terms of frequency that would demonstrate that this is a very infrequent occurrence that we're seeing incidents related to these magnets and I think that in terms of a Look no further than item number one in our interpretive rule which identifies the means with which the CPSC Will prioritize its activities severity severity and frequency Are the first considerations and we certainly have a lack of frequency Established here. That's that's just a comment that I'd like to make as opposed to a question Sorry for putting you on the spot to confirm the courts Numbers, but I haven't seen those argued Subsequent to the issue of the of the court. Thank you madam chairman. I Have no other questions. Commissioner Adler. Do you have any questions? I have none. Thank you. Mr. Robinson Mr. K. No, thank you. No, I do not. Thank you Having heard no Having heard no further questions Staff is excused from the table and we're now going to consider any amendments or motions Does anyone have any amendments or motions for the underlying matter? Madam chairman. I have a motion Mr. K. I will recognize you for your motion and I will ask you to describe it Up to three minutes and then after the conclusion of that I will ask for a second. Thank you. Great. Those words are familiar. Thank you The text of my motion I'll read as follows I move that the Commission directs staff to prepare and send to the Commission as Soon as possible a draft notice of proposed rulemaking for commission consideration addressing the holding in the 10th Circuit Opinion issued on November 22nd 2016 in Zen magnets LLC VCPSC and The motion has been distributed both prior to this meeting and is currently being distributed again I'll give it a few minutes just to describe it As my colleagues know in addition to vacating the Commission's magnet Set safety standard the 10th Circuit panel explicitly remanded the rule back to the Commission for quote further Proceedings consistent with its opinion end quote as Commissioner Robinson has noted a few times and I agree with strongly This is a relatively or I'll say this is a narrow ruling or was a narrow ruling The court simply determined that it did not have enough information to ascertain whether two of the Commission's findings were supported I firmly believe it is our duty as public safety officials entrusted with keeping children and consumers safe To follow the court's instruction and to address the remand without further delay Doctors who treat children have recently publicly noted their concerns with the results from the 10th Circuit decision My motion calls for the Commission to direct staff to prepare and send to the Commission as soon as possible a draft NPR or notice of Proposal rulemaking for commission consideration Addressing the narrow holding in the 10th Circuit opinion. Thank you, Madam chair Thank you very much. Is there a second second Having heard a second. We will now move to consideration of Commissioner K's Motion commissioners will ask their questions and then we'll come back to you at the end Commissioner K Unless any of the other commissioners want to yield their time to you So I will begin the questioning In your motion, there's language addressing the holding of the 10th Circuit opinion. Can you just explain what you mean by that? I think again as Commissioner Robinson has noted it was a narrow holding and The staff is aware of the court decision and can use the court decisions Holding as guidance as to what the issues are that the court felt needed to be addressed And so maybe can you just define how you're seeing the holding? What what is your? Yes, so my opinion in this in my mind is irrelevant I think the holding is what the holding is and staff will read the court opinion and send us if we approve this Send up what staff believes is an appropriate Response to that holding. Thank you. I Have no further questions commissioner edler Yeah, I do have one question and that is consistent with what the chairman was asking and that is does your motion contemplate any Staff action or work beyond the work to address the concerns raised in the 10th Circuit's decision And as I look at the decision, they were three concerns they raised one was the time frame the court had sought an Explanation as to why CPSC relied on this particular time frame for its Cost-benefit analysis the quality of the data back to the Concerned about the word use of the word possibly and the utility of the product those are three discrete issues There are narrow issues and again. I repeat my question Does your motion contemplate staff doing any work beyond addressing those types of issues? No No further questions. Thank you Commissioner Robbins, I want to thank Commissioner Kaye for bringing this motion. I think this is precisely what we need to do next and I also want to thank staff For so quickly putting together their estimate of the time that it would take to address the 10th Circuit's Findings and I even though I fully appreciate that like commissioner Kaye My opinion is irrelevant here needless, but nevertheless sometimes I feel the need to express it So I shall that I completely disagree with the 10th Circuit's findings and rereading it They they started with a fundamental flaw in the basis from which they then went off on their findings But I disagree with their findings regarding the inadequacies of our carefully prepared Cost-benefit analysis in support of the standard and I believe the court willfully ignored the CPSC's Explanations of the basis for the time frame of incidents to review and analyze They ignored the wealth of data from nice as well as from the physicians from NAFSA again on the number of incidents They willfully ignored the methodology we use for analyzing the nice data And they willfully ignored our analysis of the value of high-powered magnets in its review of The estimated costs and safety standard, but as I said my opinions irrelevant the court vacated it And this is now what we need to do I felt strongly that my vote for this rule was correct when it was made and Apparently unlike commissioner more heroic I have found absolutely no reason to question the the original vote in this matter And we must address the court's holdings and Repropose the rule to deal with this emerging issue, and I think that anything else would be an abdication of our duty So I thank you for bringing this motion. Thank you commissioner murmur over Thank You madam chairman. I think Marty commissioner Robinson We found an area that we completely agree with as you said twice how irrelevant in your opinion is I couldn't agree more Thank you, and I'm not yielding any of my No comment. I got a feeling you'll come around to it as irrelevant as it might be Commissioner K. I've got a question in terms of Process and the orderly running of the agency and what I think is is an inconsistency With the way that while you were the chair you were addressing Items that identify the allocation of resources Beyond just the merits of what we have before us right here. So when you were chairman you insisted that items and considerations before the agency that That identified the allocation of resources were to really only be considered during the normal preparation of our operating plan as well as the consideration of the mid-year of our mid-year adjustment and In doing so we would be able to take full advantage of our technical staff's Expertise and their consideration of whether something merits in terms of all the innumerable Activities that we have before us and this is different your amendment is suggesting that the agency Direct staff to go into rulemaking as soon as possible As if almost this was an imminent hazard before the agency when the facts of the lack of frequency of incidents Suggest otherwise. I would like to yield 60 seconds of my time if you would to address Why you think this is this change in course? Different than the two and a half years that I've had the pleasure of working with you a chairman Sure, and I don't think I need 60 seconds to answer it In that one we've already heard from staff this will have no impact on the mid-year or the operating plan No discernible impact no impact that would require substantive changes to it So I don't know why we wait and more importantly in the time. You're correct every time that somebody had offered to Change resource allocations materially. I felt it was more appropriate to do that But we never faced a situation before where somebody was offering to Change the operating plan in a way that would enhance safety or address a safety issue or even a court holding Which I think is a unique situation So from my perspective as long as it's in furtherance of safety and it's especially in this case Responsive to a federal court ruling and staff has assured us that it will have no discernible impact on the operating plan I'm comfortable with that. If you have other ideas that you feel like are in furtherance of safety And you want to work with me on that are outside the normal mid-year operating plan or budget cycles I'm happy to work with you on those. Thank you. Thank you commissioner, and thank you for your brevity as well I do think that An alternative to the one that you've proposed is to direct staff to take this into consideration for our mid-year Adjustments, and then we would have the opportunity to see whether or not staff felt that it was a proper allocation of resources Given all of the priorities that we have before us now There was another element of your tenure as chairmanship, which which I recognized and certainly Found it very hard to disagree with is that quite often if not always There was a refusal to strongly consider a proposal Unless and you've spoken the first person as I think as opposed to the commission unless you had a recommendation from staff Unless you had something that takes into consideration whether or not the staff feels feels that this is meritorious and In doing this in quick order without that I would like to yield maybe the remainder of my time to you for an understanding of why now it's different I don't think the difference in terms of the chair you sit in really matters here It's a matter of the orderly running of the agency and you always consistently said that and very often not always Agreed and went with the staff's opinion direction Recommendation not always but most of the time and yet you're asking us to consider this Which would which would reorder the priorities before the agency and reorder the staff's work Without taking into consideration that and without us having An in-depth legal memo from our general counsel's office to let us know our potential right, so The staff's opinion is always going to be the most important factor For me whenever I consider anything hands down that's always been the case as long as I worked at the agency And I always will continue to be the case, but it's not the only factor again There is a court order here, and I think as commissioner Adler has aptly said on many occasions We exist for a reason and commissioner Robinson has said that too we have to we were Presidentally appointed Senate confirmed put on the commission for a reason and there have been times when you have come to me and asked Me to support something that the staff does not support and I have supported it or enjoined you in that even if the Staff has not agreed with that. It was a worthwhile use of reason. I Have a couple of additional questions for commissioner Kay Number one commissioner Adler mentioned he referred to the dissent and some additional sources of data and I'm wondering if in your motion You're considering part of the holding that information that was in the dissent again If you yield I I'm going to leave it up to staff to interpret the holding of the case and to send us the staff's recommendation Well, we're directing staff I would guess and maybe I would ask O. G. C Will there be a further analysis a legal memorandum with the package that will come to the Commission Well, there's always a legal analysis with the package that comes to the commission additional from what we are We've been hearing that a lot of it will not change But given this fact this dissent will the dissent be factored into into this direction. We're giving the commission the staff I just don't think that's a question. I can answer here. Okay. All right My second question to you is and again this has to do with the holding and we're directing staff to address the holding in the 10th Circuit opinion is your is it at your intended staff would be precluded from Addressing any other issues I My intent is that staff should follow the motion is written and address the holding Thank you. I have no further questions. Commissioner Adler Well, thank you for asking those questions and as a point of clarification my notion of the holding is what the court in its Totality decided and you can't really understand the holding until you also understand the dissent And it seems to me that the issues raised by the dissent are issues properly addressable And it seems to me that the staff Appropriately would look into that, but I'm glad you raised that question because at least I get to clarify my view of what the What the motion is? Thank you. Commissioner Robinson. Thank you for the mission more of it. Nothing further Having heard no further questions to Commissioner K. We'll move to consideration of the motion Commissioner Adler. How do you vote? I vote I? Commissioner Robinson I Commissioner K. I Commissioner Mojorovic no, and I vote no the yeas are three and the nays are two the motion by Commissioner K has been approved Are there any more amendments or motions to be considered here this morning? Having heard no further amendments or motions We will now turn to the final rule on the federal register notice with Removing safety standards for magnet sets from the code of federal regulations We will have time for closing remarks, but that certainly doesn't but does anyone else wish to be heard before we take the vote on the underlying question Commissioner Adler Robinson commissioner K. No, thank you And I have no further comments Having heard no further comments will now turn to the final vote and I will call it This is on the federal register notice removing safety standard for magnet sets from the code of the federal regulations Commissioner Adler, how do you vote? I need a clarification. Does this vote have to do with the amended? Vote that we're taking The vote is just on Publication of the federal register notice providing notification to the public that we're removing the magnets rule from the CFR That's what the vote is on the table. The motion was independent Okay, I vote I Commissioner Robinson, hi Commissioner K and if I could just seek further clarification the motion stands regardless of the vote that we are currently taking Yes, it does the motion was there was it was not an amendment to the package that was on the table There was an independent motion as I understood it. Thank you miss Boyle. I vote I Clarification this is to cut red tape to tear rule out of these code of federal regulations. Is that right? I vote aye The a's are five and the nays are zero the federal register notice removing the safety standard for magnet sets from the code of federal Regulations has been approved. We now turn to closing statements. We will have 10 minutes per commissioner for those Closing remarks and I will begin To begin with I do believe it was appropriate for us to remove the magnet rule from the CFR And I appreciate staff's initiative and putting the package together for all of us I am opposed to directing staff to prepare a new proposed standard at this time for several reasons First circumstances have changed since the standard for magnet sets was originally promulgated in 2014 in fact a major reason for the 10th Circuit Court's decision to vacate the magnet standard was a concern that Circumstances have changed even before the original standard was promulgated It seems to me that before we charge ahead We should be asking the staff to pull together the updated information That would help inform the decision as to whether or not it even makes sense to once again propose a standard Second the decision to repropose a standard should not be made in a vacuum Instead it should be considered in light of the other projects and possibilities. We have to consider Rather than make a preemptory decision We should be asking how the magnet risk now and in the future is likely to compare with the other risks we consider Work on this issue will take people away from other projects It seems to me that the appropriate way to address this issue and address those trade-offs and Priorities would be made through the normal Commission vehicle, which is the operating plan Third we currently have under consideration the appeal of the administrative law judges decision Rejecting the staff's request to order a recall of zen magnets I believe that moving ahead with new rulemaking at this time may now create more problems for the commissioners in that other matter Finally, I believe this court's decision is an important reminder As to why it is very important and appropriate not only for us to be thoughtful But also to be data driven in our rulemaking as we look ahead We know that the budget environment is likely to be challenging not only for us, but for all agencies More now than ever. I believe that we need to utilize our resources more efficiently and effectively than ever Thank you. Commissioner Adler Thank You madam chair I Just wanted to make a quick comment about the 10th Circuit decision And just to say that I have a great respect for our independent judiciary I think it's one of the strengths of our system of government So even though I disagree with some of the court's reasoning I think we do need to pay careful attention to it and we need to respond to its concerns in a careful well-documented and thorough manner Commissioner Kay's motion does not ask the Commission to reinvent the wheel To expend massive amounts of resources. In fact, it's a very modest amount of resources It's less than one staff year and we don't need to do that The 10th Circuit did not need any new information regarding the hazards of small high-powered magnets And I just want to read an excerpt from that opinion The strength of these magnets is part of their appeal It can also pose a grave danger when magnets are misused specifically if two or more magnets are ingested a Temptation to which children are especially at risk They can cause serious damage to intestinal tissue that becomes tightly clamped between them a Tendent medical consequences can include hospitalization and surgery for such injury Injuries as perforations infections gastrointestinal bleeding and tissue death the dangerous Compounded when parents and medical personnel remain unaware of the type of magnets ingested and their heightened risks this court very well Recognized that this was an extremely serious hazard What the court said was we need to give a greater explanation for how and why the Commission reached its conclusions in accordance with what the law requires We need to do that and we can do that The hazards of this product have not disappeared and if recent information is correct The hazard is extremely likely to grow significantly as new firms enter the magnet market Now this is just a thought I doubt that we can ever precisely quantify the risk Because it's a moving target and that's not just with respect to magnets That's with respect to most of the products we regulate And therefore I hope that any future reviewing court will take notice of that fact We can give a snapshot, but this is a moving picture and we need to be cognizant of that But I do think that we can provide reasonable estimates of the costs and benefits of commission action in Ways that will meet this court's requirements and the requirements of the consumer product safety act. Thank you Commissioner Robinson I'd just like to preliminarily say that nothing that I've said today should be read as any disrespect for our judicial branch The judicial branch has been my life, and I very very much respect it in my world of litigation for most of my adult life This would be the equivalent of trying a case for six months coming to a decision and then the appellate court sending back Sending the case back for a few Limited questions that need to be addressed before the judgment can become final and to then just drop the case would seem Something that's very counterproductive and when we're dealing with a situation like The CPSC where we have always been flexible and using our resources to respond to emerging issues the 10th circuit has given us an emerging issue and I Would counter what? Acting chair Burkle said in terms of impacting other projects because the staff has found very specifically and explicitly that it would not impact 2017 projects to address this very limited holding. We are not starting rulemaking all over again Quite quite. It's a quite different situation than if we were making that decision so I also would just like to Address this I've done it before but I feel the need to repeat it given Acting chair Burkle's comments. We were given very very different Authority under section 7 and 9 and under section 15 and one doesn't have anything to do with the other and I feel very Comfortable in going forward with asking the staff to analyze the the data that we have now The the data that we have in light of the 10th circuit opinion and come back to us with their Recommendations and that having nothing to do with the litigation that's pending under section 15 I Also Would just I feel the need to say that this notion that this 10th circuit opinion is a reminder to us to be data Driven I think that staff did an absolutely fantastic job in this rulemaking process in Analyzing the data and as I've said I very much disagree with the way the 10th circuit has Has omitted a lot of the data that we had before us when we made our decision. So I look forward to Staff's analysis and under this limited ruling from the 10th circuit and thank you so much for all the work You put into today Thank you commissioner Kay, thank you chairman Berkel I'll note at the outset that I have been speaking today and will continue to speak today Only with respect to the commission's rulemaking efforts And I'm not speaking in any way with respect to any other specific product matter or other proceeding We're here today because the 10th circuit Court of Appeals Vacated our magnets at safety standards and in my view we are obligated to remove or we are obligated to remove it from our rulebook While I voted for the rule for this for removal of this Rule we have to respect the courts because we have to respect the courts opinion I want to echo the comments that were made by my colleagues commissioners Adler and Robinson about the importance of the independent judiciary One of the benefits of my career is having served in all three branches and valuing the role that each of them plays and Appreciating the court and the role the courts even though I vehemently disagreed with the opinion in this case And I hope it doesn't end up being That you have only three members of one party defending the independent judiciary and silence from the other party because I think that would be Unfortunate, I think we should all agree of the value that and the role of the courts that they play This was a narrow ruling the court simply determined that it did not have enough information To ascertain whether two of the commission's findings were supported as I noted earlier Doctors who treat children have recently publicly noted their concerns with the results from the 10th circuit's decision It is incumbent upon us as public safety officials To at least attempt to address the court's concerns without delays I am very very pleased that commissioners Adler and Robinson supported my motion and That we were able to give staff the direction to move forward Thank you to commissioners Adler and Robinson and also of course to the staff for their continued safety efforts. Thank you Thank You Commissioner Horovic Thank You madam chairman Again, we hear the term being data driven the priority The theme of this agency. I think it's one that ought to be banned like the word amazing and reality shows let's just clear it from the deck Because I think that it's too often one that's abused and it's manipulated we use it when we think it's convenient We like to say that we're great data driven in this activity to allocate scarce resources To mandatory rulemaking after we had our rule thrown out when we see the numbers have gone over the last five years from 52 To 13 to 4 to 1 to 1 and yet in the spirit of being data driven We want to allocate scarce resources into mandatory rulemaking I I I can't see that there is in any sense of an understanding of what being data driven is would lead one to go Back into rulemaking Given the fact that we have a we have an opinion from the court that threw out and vacated our previous rule There is a recognized lack of fidelity in the CPSC's ability to differentiate a Magnet hazard as being one from a magnet set Versus one that was the result of a liberated magnet a liberated high-powerful strong rare earth magnet from a toy and We looked at those previous numbers that I've given of the incident patterns falling so Dramatically you'd have to ask yourself. Well, why did it fall? Well, first of all, how about the fact that the CPSC recalled? 20 million units of toys for magnet hazards. This was a crisis. It was a crisis that was missed for many of everybody It was missed from Safety agencies industry, etc You know if you look at 20 million recalled units versus the total number of magnet sets that were sold There were only 2.7 million magnet sets that were sold furthermore Toys that were manufactured after August 17th of 2009 had to comply with virtually the same magnet performance standards that are incorporated in this rule So that means that if somebody knows about when products are produced for sale And if it was based on a manufactured date, that means Christmas sales from 2009 Included toys that didn't have to comply with the aspects of f 963 Which are now mandatory which ensure that? Magnets can't be released from toys and they have to be of a certain reduced flux And yes, also these numbers were reduced by the compliance actions that were taken against magnet set distributors We currently have no evidence of strong rare earth magnets coming back into the market in a significant way We have no evidence that the traditional retail distribution channels that Provided the opportunity in the past for magnet sets to go from seller to buyer are coming back in the market in a meaningful way they're not and It's a matter of scarce resources This is a zero-sum game at the agency in every operating plan in every mid-year. We Fight and claw for the most valuable Dedication of resources to look where the highest return on investment and I point out that while we can Just go back into rulemaking in the absence of any evidence that these products are going to get back in the market and create exposure We still have a child dying every two weeks from furniture tip over and 25,000 emergency room visits a year yet this commission refuses to put even one dollar Into an award-winning campaign to raise awareness of this lethal hidden home hazard And that's what we're supposed to be About making those determinations and making the smartest allocation of taxpayer dollars We also have a commission rule that further identifies it CFR 1009.8 defines how we should prioritize our scarce resources. The first condition is Frequency and severity we've already proven that there is no frequency and I quote from the regulation two major criteria in determining priorities Are the frequency and severity of injuries? associated with consumer products You know our goal should not be just about writing red tape for the sense of writing red tape I don't know what this Fascination is I mean we should be about hazard mitigation through any means possible a regulation a rule red tape That's just one of the tools in our toolbox I think that this has gotten so personal with this agency of having a rule being thrown up thrown out that We're ready to just hurl ourselves Headlong back into rulemaking and to do it quote as soon as possible and quote it really it really baffles me Other than the very personal nature of this issue as it's confronted the agency now for for years and coming on maybe in a decade We're doing this without taking the time to either learn the lessons About why we failed the first time or to figure out if there's still any need for the rule Those are two questions. I would want to have answered before I even voted to allow staff to go back into rulemaking much let much much less demand it I think this is a factor of pure ego and This agency has taken the thoughtful opinions of the 10th Circuit personally and we just want to win for winning sake Anybody who has heard me speak? Lately or was in the conference last last week at XO. They've heard me talk about regulatory humility and It's a virtue that is very scarce. It's lacking here and it's lacking across the administrative state and No one is more humbled than I am by the thoughtful criticism of two federal appellate judges to exceedingly intelligent and well-credential legal scholars It's an exercise in pure Regulatory hubris to ignore that criticism and stitch together the tattered scraps of this rule and run it blood back up the flagpole. I Would rather want to learn from this epic failure and not repeat it at a cost of taxpayers footing the bill and more Worthy activities around demonstrable safety risks that consumers actually face today I wish we were not going to make the same mistake twice when there are so many new mistakes. We could be making That's what the motion does today That's what the activity and the actions of this Commission does today and that's why I'm not in support of it Thank You madam chairman You once again. Thank you to my fellow commissioners and to staff for being here this morning This concludes this public meeting of the consumer product safety Commission