CPSIA Update: Video Of Malcolm Smith "Illegal" Bike Sale

A follow-up to our post last week on the CPSIA protest held at motorcycle maverick Malcom Smith's motorbike shop.

As we've been reporting, carelessly worded legislation in reaction to revelations of high contents of lead in various children's toys resulted in the Consumer Product Safety Improvement Act of 2008, signed into law by President Bush. This well-intentioned Act of Congress became effective in February of this year, and has unintentionally plunged many industries into economic turmoil due to the blanket restrictions placed upon selling **anything** to children under the age of 12. Incredibly, children's motorbikes are subject to the ban, although hopefully not for long.

CPSIA: Malcolm Smith Riding To The Rescue Of Hard-Hit ATV Industry

CPSIA update: Riverside, California, where kids are wiser than Congressmen, saw an organized and advertised act of civil disobediance this week:

In defiance of the Consumer Product Safety Improvement Act of 2008 - or CPSIA - which prohibits the sale of youth motorcycles and ATVs deemed unhealthy for children under 12 due to supposed high-levels of lead content, motorcycle dealer Malcolm Smith will sell these banned vehicles as a sign of protest.

Retailer and off-road motorcycle legend Malcolm Smith sold three children's bikes, which, according to the letter of the new law, could cost him a grand total of $300,000 in fines:

"We're selling a few bikes, and only a few because I can only afford so many fines!" Malcolm Smith said with a laugh. "I'm going to have to ask the public to donate to pay them if they put me in jail."

In their attempt to reduce the possibility of children contracting lead poisoning from toys, Congressional wisdom seemed to have been running on empty since their CPSIA over-reaction became law this February. The vague wording of their new consumer protection law means that real children's vehicles such as motorbikes and snowmobiles can fall under the CPSIA's mercurial reach as well as toy versions of them, since they are all products manufactured for children aged 12 years and under.

As part of his protest, and as a revelation of how little contact the Washington ruling elite seems to have with much of anything out of the doors of Congress, let alone the outdoor off-road vehicle industry, Malcolm Smith points out how the law should be affecting the fishing industry:

As an example of how ridiculous he believes the new regulations to be, he pulled out a bag of lead split fishing sinkers that he purchased at a sporting goods store down the street from his shop. Anybody could go in and buy them, he said, and most of the time people use their teeth to clamp them down on the fishing line.

The tipping point that sparked Smith's high-profile protest seems to be the singular incident when he surprised a customer with the news of the CPSIA's existence:

“Not long ago, about a week ago, a woman came in and was going to buy a bike for her daughter so her whole family would be able to ride together in the desert,” Smith said. “And I said, ‘You can’t buy one.’ She could not believe it. “Then, I just had enough.”

... Smith figures he’s lost at least $5,000 in net profit since Feb. 10, on lost revenues of more than $30,000 for units and parts and riding gear that he couldn’t sell. The Motorcycle Industry Council estimates that the ban could cost the industry $1 billion this year, and Dealernews magazine estimates there is more than $100 million of unsold inventory sitting in dealer storage areas.

Public outrage has been muted because the public in general had been kept in the dark by a largely indifferent mainstream media. (Although that is slowly changing, as the effects grow too large and too far-reaching to continue to ignore.) Specialized media, however, has definitely not been asleep at the wheel in their reporting of the ongoing conflict between good intentions and common sense.

Fortunately, the attention of the specialized media has been sufficient to get Federal wheels turning in Congress and the Senate, to finally start addressing the CPSIA overkill:

The House Committee on Energy and Commerce will consider H.R. 1510, introduced by Rep. Denny Rehberg of Montana. The short bill amends the law to allow the CPSC to exempt dirtbikes, ATVs and snowmobiles — but only if the commission determines that it is not technologically feasible for the vehicles to comply with the lead limits due to necessary components.

More important, the bill strikes out the word “any” from a certain passage of the law. This use of the word, the CPSC has argued, prevents it from exempting powersports vehicles.

The second bill, S. 608, introduced by Sen. Jon Tester (also of Montana), will be considered by the Senate Committee on Science, Commerce and Transportation. The legislation exempts vehicles intended primarily for children ages 7 and up. Much broader than the House bill, it also excludes all pre-owned children’s products and repairs made to children’s products

If this post is your first introduction to this unbeliavable story, may I direct you to the best resource for continuing coverage of the CPSIA controversy: Walter Olson's reporting at Overlawyered.com. (A tip of the helmet to Overlawyered for many of the links used in this post.)

For a quick overview of the story so far, I highly recommend the interview conducted with both Walter Olson and attorney Gary Wolensky earlier this week by radio talk show host Hugh Hewitt. Audio of the interview can be heard here, my transcripts are here and here.

CPSIA: "It's Hard To Remember Anything In The Last 20 Years As Crazy As This"

CPSIA update: Hugh Hewitt had a riveting first hour on his radio talk show tonight, as he continued his significant coverage of the economic carnage being wrought by the legal insanity known as the Consumer Product Safety Improvement Act, which was let loose upon an unsuspecting America this past February. Hundreds of product lines have been unduly affected by this monstrosity born of good intentions, who-knows-how-many millions (or has it reached billions..?) of dollars worth of inventories are being needlessly destroyed, businesses are going out of business and there's no relief in sight.

Hugh Hewitt has been far and away the most responsive journalist in spreading awareness of this unbelievable economic scourge; as he himself points out later in the interview, he's even telling other journalists about CPSIA's infernal existence. For his program this evening Hugh interviewed a guest he's had on before on this subject, attorney Gary Wolensky, who represents the besieged motor bike industry, and the Manhattan Institute's indefatigable Walter Olson. It was a great discussion. Well, "great" is a relative term in this case, as the story being discussed is a preposterous example of the complete indifference that Congressional elites have for working class Americans.

The audio is here. It doesn't seem like Hugh is going to provide a transcript as he sometimes does with important interviews, so as my small contribution to keeping people informed on this story, I've quickly put one together myself. Here's part one [corrections welcome]:

[11:00] HH: ...We’re arguing about $165 million in bonuses to AIG, what is your best estimate about what the CPSIA has cost America?

Walter Olson: It’s hard to get a peg on it. Certainly billions of dollars. And it’s hard to measure what happens when a small business has to close down. What happens to that family, what happens to the employees. But, we know that in just one industry, the mini-cycle/dirt-bike industry, they’re talking about a billion dollars of damage this year. That’s just one of many industries affected by this.

HH: Now Walter Olson, we’ve talked in the past before, we know that sometimes laws lead to extraordinary hardships, wrongfully. In this instance, everyone knows what’s going on, but do you see any signs in Congress that they are going to move to save these billions of dollars, these tens of thousands of jobs, which they did not intend, at least they say they did not intend to kill.

WO: It’s very discouraging in a way, because even though you’ve now got a lot of talk going from people on the Republican side, even John Dingell, one of the Democrats is making some of the right noises, the ones in control are Henry Waxman and his counterparts on the Democratic side of the Senate, they are stonewalling, they are saying they will not even have hearings let alone amend the law.

HH: Gary Wolensky, Walter Olson mentioned ATVs, off-road vehicles, all-terrain vehicles; on this show on Friday, Chairwoman Nord of the Consumer Products Safety Commission told me there was going to be a hearing this week on this and I urged them to just pass an exemption regardless of what the law said. Has that hearing happened?

Gary Wolensky: The hearing has not happened up to now Hugh, and I have not heard that in fact there is going to be a hearing this week.

HH: Do you have… do you think she was shining me on? Did you hear that interview?

GW: I heard the interview. I think she’s a very nice person, unfortunately she’s irrelevant, because her hands are tied and she can’t get anything done. And she won’t go adversarial, which she can do but won’t.

HH: Walter Olson, my urging of the chairwoman on Friday was, they just instruct their staff, to pass exemptions out left and right, because this is a nutty law that is endangering children. Their mission is to protect consumers, but if you put kids on adult bikes they get injured, some of them get killed. Do you see any sign within the CPSC that their staff will do whatever it takes to stop this outrage from happening?

WO: Well, they are being driven by their legal staff on this, because I think that legal staff is telling them that the statutes are written to tie their hands, and they might lose a lawsuit if they ignore the crazy language that Congress put in.

HH: But Walter I was a General Counsellor to two Federal agencies, I know what it’s like to see crazy language, but I also know that I did what the boss said; if the boss came out and said “we’re not going to do stupid things, we’re going to give exemptions”, they have to go that way. If media generated some demand on the CPSC, do you think that would matter?

WO: [sigh] I’m fairly skeptic it would not have, because… remember, they tried to do a common-sensical thing on the inventories, the stuff with the plastic, and they got struck down in court. Apparently they were trying to soften the blow on some of the crazy things in the law, but they pointed to specific language, that “not any lead exposure”, so the mini-bike people, the ball-point pen people, who knows who else who can’t take the lead out of their products without losing the product, who knows what’s going to happen to them.

HH: Gary Wolensky, today a motorcyclist announced that he was simply going to sell the ATVs. “Screw ‘em”. “Tell them to come prosecute me.” What’s your reaction to such obvious civil disobediance? I’ll get his name off the printer at the break.

GW: I saw that. As a lawyer, giving my best legal advice, I certainly would not tell anyone to break the law.

HH: Do you think they’ll prosecute him?

GW: I don’t think they are going to prosecute him.

HH: Walter Olson, what do you think about that? Have you read that story yet?

WO: I’ve read the story, I think it’s going to rev up the press’ interest in this. He’s a very well-known person…

HH: His name is Malcolm Smith…

WO: Malcolm Smith, very famous in that sport.. it could be like H.L. Mencken on Boston Common, remember when he sold the banned book and he became a cause celebre. In that case I think they arrested him but nothing happened to him. In this case… you know, they’re not going to send someone to arrest him, it’s… it’s not as if a public citizen is going to do a citizen’s arrest, I don’t **think** anything will happen.

HH: What I worry about, Gary Wolensky, is that since there’s a private plaintiff’s action attached in the law, some idiot plaintiffs lawyer will go and lay a suit against Malcolm Smith Motorsports and that that lawyer will get a summary judgment.

GW: Well, I can see it coming two ways. Number one, a private plaintiff’s attorney, also, a state’s Attorney General, our state Attorney General sees something like the statement that you’ve just referred to, and he can start an injuction proceeding. I can also see a plaintiff’s attorney, getting a motion for summary judgment, and also compulsatory damages.

HH; Malcolm Smith, God love you. Malcolm Smith Motorsports located on Indiana avenue in Riverside, you can read about this on Motorcycle-usa.com. Walter Olson, what’s the interest of the readers of your blog? Obviously, you’ve covered litigation abuse for a decade now… you’ve been doing this for 17, 18 years now, and this really one of the most outrageous episodes in the law that I’ve ever covered; what’s the interest at Overlawyered.com?

WO: I happened onto it. I have to say, I neglected it last year when they were actually passing this darn thing, but as I began seeing the stories, I realized that in some ways this is the craziest legislation that I will get a chance to write about… [chuckles]

HH: Yes!!

WO: … in this decade. And it is so full of interest, there are so many different, innocent people out there, nice people, the sort of people you would want to be making things for your kids, but who are having their lives turned upside down by this. I can’t resist the human interest. Secondly, simply as a defiance of cost-benefit analysis and common sense, it’s hard for me to remember anything in the last twenty years that was as crazy as this.

HH: Now I also want to press you, Walter, as we’re both journalists, and we’re both lawyers – Mr. Walensky does not have to share the shame of being a journalist – I find mainstream media abysmally incompetent here. Now I’ve asked a number of my pals who’ve called in, guys I like a lot, like [Newsweek's] Howard Fineman, [the Washington Post's] E.J. Dionne, if they’ve even heard of the law. And they haven’t heard of the law. Mark Steyn has, by the way. Are you as astonished as I am that nobody cares about this?

WO: I am astonished, and I’ve even written about this, why is it the more you lead the press to this the more totally out to lunch they are on this issue. The east coast, the New York Times and so forth, they just have no clue what is going on out there, almost none of the good journalism has come out of Washington on this, even though that’s where the Agency is, that’s where most of the legal knowledge is and so forth. Instead, the AP is finally doing something good, after months and months, it’s coming out of Jefferson City Missouri, because they’ve got one good reporter there, who's actually figured out it’s a major issue.

HH: Last question for Walter Olson… if President Obama came out, and said, “I am going to fix this”, do you think that would be a huge political plus for him?

WO: Well I think it would be a huge political plus, because as soon as people learned about the issue, and of course you’ve got librarians and book people and so forth all suffering under the law, there would be overwhelmingly on his side. In fact all he would have to do is stare down Henry Waxman, which they’ll tell you in Washington is impossible. I don’t actually think it would be impossible, at all. Barack Obama, you can do it.

HH: I don’t know why Henry Waxman wants to dis-employ so many people....

[commercial break]

[Part two of the transcript continues here]