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A Very Disturbing, Job-Killing Trend

Friday, May 21, 2010  |  posted by Hugh Hewitt

Full disclosure up top: My law partners and I handle a variety of matters involving federal regulatory agencies such as the EPA, the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Service. The statutes involved range from the fairly familiar Clean Water Act, to the somewhat exotic Endangered Species Act, the notorious Consumer Products Safety Improvement Act, and the very obscure “FIFRA,” the Federal Insecticide, Fungicide, and Rodenticide Act. We did not represent any of the companies involved the case discussed in this post, and I don’t intend to criticize counsel to the companies who along with their clients made decisions to settle that no doubt made sense in their circumstances.

But this press release from the EPA ought to chill every business in America, because it is an enforcement action aimed at advertising claims, and as such raises a host of questions about the new regulatory era into which we are entering, one in which federal agencies are rapidly growing and very mindful of their need not only to justify their existence and their missions but also to raise revenue for the vastly expensive administrative state. Every fine leveled is only the most obvious of the costs involved in such a proceeding. Each instance of the federal regulatory hammer being brought down also includes enormous legal and administrative costs, and all of those costs combine to reduce employment. Every dollar sucked into such a proceeding is a dollar not advancing the company, making products and creating jobs.[# More #]

So read the entire EPA press release and ask yourself if this proceeding makes sense to you:

(SAN FRANCISCO–5/6/10) The U.S. Environmental Protection Agency today announced that three California companies and one New Jersey firm will pay more than $500,000 to resolve cases involving unsubstantiated antimicrobial claims for commonly used products such as shoes, headphones and bathroom fixtures.

“EPA will take decisive action against companies making unverified public health claims,” said Jared Blumenfeld, Regional Administrator of EPA’s Pacific Southwest region. “Unless these products are registered with EPA, consumers have little or no information about whether their claims are accurate.”

San Leandro, Calif.-based VF Outdoor, Inc., will pay $207,500 for allegedly making unsubstantiated public health claims such as providing “antimicrobial protection” and inhibiting the growth of “disease-causing bacteria” for more than 60 shoe products it sold – a violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). The products were sold under The North Face label by VF Outdoor. Products discovered online and evidence found at a North Face retail store in San Francisco led EPA to issue a complaint against VF Outdoor in 2009.

EPA also recently fined Califone International, Inc., of San Fernando, Calif., $220,000 over unproven health claims for headphones. Califone, a designer and distributor of audiovisual equipment used in schools and other institutions, allegedly sold headphones claiming “to prevent the spread of bacteria, mold and mildew for student protection.”

Additionally, EPA fined Component Hardware Group, Inc., of Lakewood, N.J., and John S. Dull Associates, Inc. (d/b/a Food Service Parts in Garden Grove, Calif.), $98,300 following an inspection conducted by the California Department of Pesticide Regulation. The inspection revealed evidence that the companies were selling and distributing Saniguard products with unverified claims that they control growth of bacteria and contain antimicrobial technology that controls growth of E. coli, salmonella, staph, and pseudomonas on treated surfaces. The Saniguard products allegedly marketed to hospitals and other industries include faucets, spigots, handles, light switch and socket covers, door push and pull plates, and food service hardware.

EPA’s authority to assess penalties in these settlements stems from FIFRA, which requires that companies register pesticide products with EPA before making claims about their ability to control germs or pathogens. While the North Face, Califone, and Saniguard products all incorporated EPA-registered silver-based antimicrobial compounds to protect them against deterioration, they were never tested or registered to protect consumers against bacteria, fungus, mold, and/or mildew.

“We’re seeing more and more consumer products making a wide variety of antimicrobial claims,” said Katherine Taylor, associate director of the Communities and Ecosystems Division in EPA’s Pacific Southwest region. “Whether they involve shoes, headphones, or household fixtures, EPA takes these unsubstantiated public health claims very seriously.”

Under FIFRA, products that claim to kill or repel bacteria or germs are considered pesticides, and must be registered with the EPA prior to distribution or sale. The Agency will not register a pesticide until it has been tested to show that it will not pose an unreasonable risk when used according to the label directions. Consumers should be careful to look for the EPA registration number printed on product labels, and need to follow the label directions for use.

I added the emphasis so that you can understand that the EPA’s effort is designed not to stop false claims but rather “unsubstantiated public health claims.”

Commercial speech is protected by the First Amendment, though fraudulent speech is not. At a minimum it seems that the federal government should not expend resources on the prosecution of “unsubstantiated public health claims” that the government cannot first show with a good bit of evidence to be false and harmful, and further, relied upon to the significant detriment of the public by the public.

These are vast costs being assessed, and to what end? EPA argues that “EPA is concerned about these claims because, in addition to being unlawful, they are also potentially harmful to the public (e.g., if people believe that a product has a self-sanitizing quality, they may become lax in their hygiene practices). Practicing standard hygiene practices has been proven to prevent the transmission of harmful microorganisms and, therefore, reduce the possibility of public health risk.”

That comes close to an all-purpose rationale for every federal action. Does it square with a federal goverment of express power and limited authority?

This is not an isolated case of federal overreach, but part of a pattern of a three-decade old expansion of federal control over all sorts of aspects of American life that federal bureaucrats ought to have zero authority over except in limited cases of egregious and harmful conduct.

If you want to make the case for why the EPA ought to be conducting such crack downs on the “wide variety of antimicrobial claims” being made in the marketplace, please send me your argument at hugh@hughhewitt.com.

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Polling Obamacare

Friday, May 21, 2010  |  posted by Hugh Hewitt

Obamacare is a cloud on the economy, and a depressant on public opinion. A new poll finds support for it dropping still, and as the costs and consequences of the law become ever more clear:

While overall attitudes were roughly unchanged from last month, the percentage of people who reported that they have “very favorable” opinions of the legislation fell from 23 to 14 percent during the month. At the opposite end of the spectrum, 32 percent of people reported “very unfavorable” opinions, up slightly from the 30 percent reported last month.

One reason hiring is stalled? The real cost of new employees is difficult to calculate given the murky mandates of Obamacare. Combined with rising taxes and the market shakiness brought on by massive deficits at home and abroad, employers are hunkered down –and the economic disaster that is Obamacare grows more obvious to all but its hard left enthusiasts every day.

Kyl on the Kagan White House Papers

Friday, May 21, 2010  |  posted by Hugh Hewitt

I interviewed Arizona Senator Jon Kyl on yesterday’s program and asked about the Clinton Library’s stonewalling on the Kagan papers stored there:

HH: Today, the Los Angeles Times has a story, Senator Kyl, that the Clinton Library administrator says meeting the deadline of June 28th for the Senate committee’s request would be very difficult. She says that both President Clinton and President Obama have the right to read and review each document. There’s just too many things here, she said. These are legal documents, they are presidential records. They have to be read by an archivist, and vetted for any legal restrictions, and they have to be read line by line. Sounds like some stonewalling going on, Senator Kyl.

JK: Well, maybe that’s the standard. But it was the standard for John Roberts then as well. He had the same position, and one way or another, they found a way to get the records that pertained to his time as one of the attorneys in the White House. So I would assume they can do it for Elena Kagan. If it takes time, then it takes time. And I think that was a premature date for the hearing in any event. So maybe we have to do it in July sometime.

The complete transcript, including the senator’s comments on President Calderon’s speech yesterday, is here.

The Kagan hearings should not begin before all of the papers are released and the senators have time to study them.

The post below details the hidden facts and costs of Obamacare that are now coming to light –too late to influence the debate or the legislation.

How much sense would it make to hold hearings when the crucial portions of SG Kagan’s paper trail are still under lock and key in Little Rock?

The True Costs and Consequences of Obamacare

Friday, May 21, 2010  |  posted by Hugh Hewitt

Today’s Politico carries word that Nancy Pelosi and Harry Reid will soon try to rush through the “doctors’ fix” –the long anticipated reversal of the pay cut for doctors on which the budget of Obamacare was balanced.

The price tag of the “fix” is $20 billion a year –which will no doubt grow in future years, so the cost of Obamcare is already $200 billion out of whack over ten years despite all the claims made when the bill was jammed through the House.

But that is not all. There’s another $2.4 billion per year for hospitals in the new bill –another $24 billion to be added to the tab for Obamacare.

All of this was known –and denied by Obamacare boosters– at the time of the jam down. And this is just the first wave of the costs of reality catching up with the rhetoric of “bending the cost curve” nonsense that was on the lips of every Obamacare proponent.

Other consequences loom. John Goodman writes in today’s Wall Street Journal about the calculations now being done in every corporate office in America:

Millions of American workers could discover that they no longer have employer-provided health insurance as ObamaCare is phased in. That’s because employers are quickly discovering that it may be cheaper to pay fines to the government than to insure workers.

AT&T, Caterpillar, John Deere and Verizon have all made internal calculations, according the House Energy and Commerce Committee, to determine how much could be saved by a) dropping their employer-provided insurance, b) paying a fine of $2,000 per employee, and c) leaving their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

AT&T, for example, paid $2.4 billion last year to cover medical costs for its 283,000 active employees. If the company dropped its health plan and paid an annual penalty for each uninsured worker, the fines would total almost $600 million. But that would leave AT&T with a tidy profit of $1.8 billion.

Read the whole thing. The consequences of Obamacare will roll out across the economy over the next year even as the hidden costs are revealed and piled on top of the soaring deficit.

All of this can be fixed and the next Congress will have to do so, but it was also completely avoidable had the MSM simply done its job and explained the inevitable consequences and the real math of Obamacare at the time it was being debated.

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