“You’re Fired!”

What is Going on Over There?!

• The plain language of the Consumer Product Safety Act (CPSA) does not allow the President to take this action.

  • The President is only allowed to remove Commissioners for “neglect of duty or malfeasance in office.” There is no evidence offered by the White House of either here.

  • The agency was founded under bipartisan agreement in 1972 under President Nixon (R) and it was set up as an independent safety agency to insulate it from political interference and corporate interests.

• The White House believes that agencies like the CPSC, set up by Congress to be independent, are not Constitutional and allow “unelected bureaucrats” to set policies, instead of Congress.

  • Some of the three Democrats have announced that they will sue the Trump Administration in court to get their job back.

  • It is difficult to predict how long this will take and how it will pan out.

  • There is a potential that the divided Supreme Court could find these firings to be legal, although that is not – and has never been – the law to date at the Supreme Court. Such a ruling would be a major change.  

• A Commission with only two Commissioners will not be able to fully execute its functions.

  • Under the CPSA, the two remaining Commissioners make up a “quorum” for making decisions for only six months.

  • After six months, the agency may not be able to legally take certain binding actions that require a Commission vote – like writing new regulations or accepting settlements of enforcement actions.

• The Call is Coming from Inside the House.

  • DOGE is in the building.

    • DOGE stands for the Department of Government Efficiency, a recent creation of the Trump Administration headed up by Elon Musk.

  • The Democratic Commissioners stated that they voted against assigning two DOGE personnel to the agency when they showed up unannounced to the agency’s headquarters on May 8th.

  • The DOGE personnel have no prior product safety (or government) experience.

  • Now that the Democrats have been fired, the two remaining Republican Commissioners have, we believe, approved DOGE’s presence at CPSC. What are they doing in there? Only time will tell.

• Will the CPSC be Abolished?

  • Based on what we have heard (e.g., trying to eliminate all of the employees in the CPSC’s Office of Communications and Office of Human Resources), it seems possible that DOGE is there to eliminate the agency.

  • Their goal - which DOGE may be operationalizing - would likely be to merge the CPSC’s functions into the much larger Department of Health and Humans Services (DHHS).

    • The CPSC’s budget last year was approximately $174 Million

    • The DHHS’s budget last year was approximately $1.7 Trillion. Yes, with a “T”.

  • Doing so would mean that the CPSC’s functions - which would continue - could be directly controlled by the White House at the Cabinet-level DHHS. Direct control of independent agencies is the stated goal of President Trump’s administration – regardless of whether dissolving a Congressionally-authorized agency is actually allowed under the law.

• Meanwhile, the Department of Justice’s Consumer Protection Branch (CPB) is also being dissolved.

  • The CPB is, basically, the CPSC’s outside law firm.

  • The CPSC is required to use the Department of Justice (DOJ) to represent it.

  • This office brings cases regarding CPSC’s claims of late reporting and similar violations by companies.

  • This function is not disappearing entirely. The DOJ’ s lawyers and responsibilities will be dispersed across other DOJ offices.

  • However, this likely means that CPSC will become less of a priority since this is no longer a Consumer Protection Brand and the CPSC will lose significant leverage in its own negotiations over settlements with companies.

    Enough About Them: What About Me?

• How will this change the day to day dealing with CPSC and its staff?

  • There are many ways in which we expect relatively few changes.

  • We expect recalls to continue.

  • We expect that companies will continue to report potential safety issues to the CPSC, as still required by law.

  • For the vast majority of potential safety issues, a recall is in a company’s best interest and the interest of their customers. When a company and CPSC agree that a recall is warranted, those recalls are likely to continue. About 75% of CPSC recalls are this type of Fast Track recall.

• In cases where there is a dispute between the CPSC, its staff, and a company about whether a recall is necessary, companies may have more of an opportunity to present their perspective and CPSC may be less aggressive in bringing lawsuits.

  • However, both Republican Commissioners at CPSC are relatively pro-enforcement.

  • Recall activity appears to be up under Acting Chairman Feldman’s leadership.

  • Unilateral product safety warnings (when companies do not agree to conduct a recall on CPSC’s terms) have still continued under Feldman’s leadership.

  • Even if the CPSC doesn’t bring a lawsuit, it can still have a major negative impact on public opinion and a company’s brand.

• Import Detentions and Notice of Violations for Regulated Products continue on pace

  • Imports from China are at higher risk of being targeted as the ‘trade war’ languge has reverberated loudly inside the CPSC as Acting Chairman Feldman has echoed President Trump’s language.

• CPSC is still actively searching the internet for potential safety issues.

  • CPSC has full-time staff crawling e-commerce sites.

  • CPSC is aggressively sending requests for full reports to companies with consumer complaints found online or, increasingly, as reported by retailers.

• CPSC is also very slow.

  • CPSC was already operating with about 30 full-time employee vacancies this year. There is a hiring freeze on filling those roles.

  • DOGE’s presence is sure to result in additional firings, resignations, and early retirements, which will slow down CPSC’s operations even more.

  • CPSC’s investigations of potential safety issues, reviews of detained products at port, and recall negotiations can now be expected to take even longer.

• CPSC seems to have a record number of active late reporting investigations pending.

  • In our experience, and from what we hear from other CPSC lawyers, these have been moving very slowly.

  • If CPSC loses its quorum before these cases are resolved, it may be impossible for the CPSC to settle these.

  • The loss of DOJ’s Consumer Protection Branch will also make it harder for DOJ to take these cases all the way to trial (or even threaten to do so).

  • CPSC might try to rush many of these cases to settlement in the next few months or some cases may die on the vine.

  • DOGE is also in the habit of cancelling contracts with little review or evaluation.

• We are watching contracts related to the new import e-Filing requirement closely to make sure the current deadline of July 2026 stays in place. We will be sending another client update on e-Filing shortly. 

   

  Conclusions and Takeaways:

• While we are dealing with unprecedented uncertainty at the higher policy and organizational levels, CPSC staff is still the cop on the beat.

• We expect routine recalls and enforcement – what CPSC is known for – to continue mostly as normal, although there may be some softening of enforcement and fewer investigations due to resource and personnel constraints.

• The laws have not changed, mandatory reporting obligations continue, and safety and compliance remain important.  (See our recent piece on “Why Product Safety Compliance Still Matters”.)

  Neal Cohen Law will continue to follow the various goings on at CPSC closely so we can give you the most current advice and help you navigate these unsettled times.