States and Local Governments Lead the Way on Product Content Regulation
Increasingly in key areas of environmental and public health protection, states are choosing to step forward to fill what they may view as a void in needed regulation.Â In many instances, the state regulatory pioneer may be a single legislator responding to a citizen letter of concern or may be a state agency believing more restrictive standards are necessary to protect human health and the environment.Â Regardless of the origin, the result is the same:Â regulation that is being developed and enforced independent of federal direction and clearly shaped directly by local influence.Â Indeed, one need only to look at state legislative and regulatory agendas to see that this is exactly what manufacturers, distributors and retailers are facing with an increasing number of âconsumer productsâ.Â Regulatory restrictions, prohibitions and content prescriptions for products are being developed and implemented nationwide, by the states and for the states, with the federal government seemingly unable to catch up.
In addition to taking the lead in setting product content limits, states and local government are also the frontrunners in implementing a host of other regulations (a.k.a. âproduct stewardshipâ requirements) designed to protect the environment from lead, mercury and other substances that have been incorporated into products.Â While it is true that U.S. EPA has set some product content restrictions (e.g., VOC content limits for consumer products), those content limits typically only apply to the manufacture and import (as opposed to the sale) of products and are generally not as restrictive as the limits set by states and local governments (One notable exception to this rule is that U.S. EPA occupies the field in the regulation of pesticide products, with state regulations generally piggybacking on the federal standards).Â State and local regulatory authorities, such as the California Air Resources Board (CARB) and the South Coast Air Quality Management District (SCAQMD), which has jurisdiction over the Los Angeles metropolitan area, have generally adopted much more restrictive standards.Â States like California have also demonstrated the ability and willingness to enforce against entities that violate product regulations. Â For instance, regulators can and have sought penalties of up to $30 million for violations of SCAQMD Rule 1113, which sets limits on the VOC content of paint and coating products.Â We have also seen a strong commitment by state attorneys general to initiate âconsumer protectionâ investigations involving product content restrictions or involving products themselves that may present health concerns or hazards.
The fact that it is the states–and not the federal government–that adopt and enforce most product regulations certainly presents great challenge to the industry from both a compliance consistency and compliance tracking perspective.Â This is especially the case for product manufacturers, distributors and large retailers.Â Lacking a single, uniform regulatory scheme, must a manufacturer make fifty different versions of the same product in order to accommodate each stateâs unique restrictions?Â From a commercial perspective, shouldnât retailers with locations in multiple states (or those which make internet-based sales to customers located in multiple states) be able to offer the same products to customers across the country?Â A number of states have attempted to address this problem by adopting model rules set by national or regional organizations but the so-called uniform model rules have not proved to be a panacea.Â Unfortunately, states rarely adopt model rules verbatim.Â Often, a state will add or omit an exemption, change the definition of a key term, or otherwise alter the text of a model rule–whether in response to comments received from an interested party or as the result of an apparent drafting error.
Although certainly not an absolute solution to the challenges presented by differing state regulation, there is some practical advice aimed at getting to the âtoo many cooks in the kitchenâ problem.Â Companies faced with inconsistent state by state regulation should first try to identify the jurisdiction with the most stringent requirements and apply those requirements to its operations nationally.Â Alternatively, companies can also attempt to identify a âcommon denominatorâ design and sell products that comply with those standards where applicable, and block sales of products in more restrictive jurisdictions.Â However, the tasks of identifying the most restrictive jurisdiction or a common set of factors, in each case on an ongoing basis, are not simple.Â For example, while CARB and SCAQMD are both known for setting very aggressive and stringent requirements in California, those bodies only have authority over products that emit contaminants to the air.Â Other jurisdictions, like Connecticut with its ban on the sale of BPA-containing receipt paper, are on the cutting edge in setting other types of product content restrictions.Â Thus, identifying the most restrictive jurisdiction in itself may be a challenge and may need to occur on a product by product basis.
Of course the most practical advice is to remain vigilant for regulatory changes — both in the requirements imposed by the jurisdiction initially serving as the benchmark and in other jurisdictions, which may subsequently vault into the position of setting the most restrictive standard. Â Given the current regulatory climate and the complex maze of restrictions, it is essential for many manufacturers, distributors and retailers to invest in more sophisticated compliance programs that can help industry benchmark and track actions. Â Although never a replacement for a strong internal compliance program, industry associations are sometimes also well suited to monitor both legislative and regulatory developments even before the regulatory or legislative change becomes final.Â Forming an industry specific task force to focus exclusively on product content regulation may also assist in ensuring policy, legislative and regulatory changes are identified, known and understood.Â Proactive education can also be critical.Â Explaining to regulators and lawmakers the compliance quagmire product manufacturers, distributors and retailers face when differing regulations and restrictions are adopted may also help address inconsistent and perhaps avert competing state regulation.
Unfortunately, government regulation and enforcement of consumer and industrial products will continue to evolve, and it seems clear that state and local control of the direction of such regulation will continue to figure prominently.Â Although an overused clichĂ©, the best defense when it comes to product content regulation is really developing a good offenseâone that recognizes, and to a certain extent embraces, the regulatory reality manufacturers, retailers and distributors face.
Renee Cipriano is a partner in law firm Schiff Hardin LLPâsÂ Environment, Energy and Public Law practices. She focuses on providing environmental strategic planning and counseling to a number of clients, including the energy industry, with respect to several local and national initiatives.
Kathryn McCollough Long is an associate in law firm Schiff Hardin LLPâs Environmental practice and member of the product regulatory team.
 One notable exception to this rule is that U.S. EPA occupies the field in the regulation of pesticide products, with state regulations generally piggybacking on the federal standards.
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