Showing posts with label Legislation affecting products. Show all posts
Showing posts with label Legislation affecting products. Show all posts

February 11, 2024

CPSC finally is taking real action on electronic certificates of compliance

Published February 5, 2024

Reprinted with permission from Bicycle Retailer and Industry News 

Original article link 

A certificate of compliance requirement was in the original Consumer Product Safety Improvement Act passed in 2008 and signed by George W. Bush. It has taken 16 years for the Consumer Product Safety Commission to finally implement the full intended scope of electronic certificates of compliance as originally envisioned by Congress in 2008.

There have been multiple “beta” and “pilot” programs with many large institutional participants (especially many large retailers, e.g., Walmart and Target) giving feedback on the process. Only one or two small bike brands gave feedback per the current notice of proposed rulemaking, and it's not even clear they were in the pilot or beta programs.

The biggest issue I see for the bike industry is that the commission is proposing that the new rules take effect within 120 days of the new rules being passed; the passage date is not clear at this point. Given that the bike industry is slow to respond to large changes in the manner of doing business like this and that there has been zero coverage of this issue, I suspect there will be some pushback and scrambling going on especially by smaller brands.

These rules have been in effect for many years, but now that CPSC has teamed up with Customs and Border Protection (CBP) on this project, the certificates will need to be filed before importation using the elaborate electronic system called the Automated Commercial Environment (ACE). The CBP has completed its ACE interface and the Partner Government Agency Message Set, which now enable importers or their brokers to submit electronic import data.

The Supplemental Notice of Proposed Rulemaking (SNPR) to amend 16 CFR Part 1110 was first published on Dec. 8. All 65 pages are here, not including the 289-page Ballot package that the CPSC commissioners have to vote on and that contains more details about the Part 1110 rule change. Comments have to be received by Tuesday at 5 p.m. They can be made here.

Only finished products or substances that are subject to a CPSC rule, ban, standard, or regulation, are required to be tested and certified, and only such finished products that are imported into the United States for consumption or warehousing would be required to e-file certificates with CBP.

How the bike industry is affected

This is of course where things start getting murky, especially for the bike industry that has many segments: human-powered bikes, e-bikes, bikes intended for kids under 12, original equipment components, aftermarket components, and replacement components. Many industries don’t have to deal too much with replacement parts, such as the toy industry.

Here is a quote from CPSC’s response to one comment made previously:

Comment 38: Several commenters expressed confusion regarding the difference between certificates for component parts, for finished products, and for replacement parts of consumer products.

Response 38: Proposed § 1110.3(b) defines “component part” as a product or substance that is intended to be used in the manufacture or assembly of a finished product, and is not intended for sale to, or use by, consumers as a finished product. The SNPR defines a “finished product” as a product or substance that is “regulated by the commission that is imported for consumption or warehousing or is distributed in commerce.” The SNPR definition explains that parts of such products or substances, including replacement parts, that are imported for consumption or warehousing, or are distributed in commerce, and that are packaged, sold, or held for sale to, or use by, consumers, are considered finished products.

 Only (1) finished products (2) subject to a CPSC rule must be tested and certified. (I added these numbers for clarification that it’s a two part-test.) Component part certificates are voluntary and are not required to accompany an imported component part, are not required to be furnished to retailers and distributors (as described in proposed § 1110.13(b)), and are not to be e-filed.

Not all replacement parts are finished products that require testing and certification. A replacement part of a consumer product that meets the definition of a finished product may be subject to Part 1110, if the replacement part is subject to a rule. For example, a stem for a bicycle that is sold to consumers as a replacement part requires a certificate, because stems, either as a stand-alone product or as part of a finished bicycle, must be tested for strength in accordance with 16 CFR 1512.18(g). (I tend to disagree with this part as the CPSC historically, even in recalls, has not taken this position that 16 CFR 1512 is a separately sold “component” standard but rather a “complete bike” standard.)

Additionally, parts of toys, such as doll accessories, that are sold to consumers as a separate finished product, must comply with all applicable rules, including for example lead in paint and/or lead content (Editor’s note: if it is a product intended for children under 12). If the same doll accessories were imported for manufacturing purposes and not for consumption or warehousing, (this is a small part of competent imports in the bike business) and were intended to be combined with a doll for sale, then such accessories would not be a finished product required to be certified until they are part of a finished product.

Majority of aftermarket products will need testing

So this means that 80% of the aftermarket products are going to need CPSC testing provided there is some requirement in a CPSC rule that arguably pertains to that bike product or component. If they are not “intended for children under 12” (kids product) that testing can be done in house apparently by the manufacturer or brand (subject to other requirements). If it is a kids product then a CPSC certified lab has to do the testing, which includes chemical testing (that does not meet California Prop 65 requirements, by the way).

E-bikes don’t have their own standard except for 16 CFR 1512, provided they meet the 20 mph requirement in the standard; if they don't, well then there are other issues to deal with. E-bike batteries, of course, don’t yet have a CPSC standard as they are not discussed in 16 CFR 1512, so in theory they escape the rule and these new testing and reporting requirements. How ironic as they are the biggest threat at this time and not really foreseen in 2008.

How this whole process is going to work as far as getting that testing data etc. into the CPB and CPSC computers is what has been the focus of multiple beta filing pilots. The importer of record has the responsibility. Not the foreign manufacturer. It's also not clear how this works with the tariff codes and what the timing is on the uploading of this data before the product hits U.S. shores. Import brokers are obviously a resource but won't likely be doing this for free. I do see a process where smaller companies are going to be allowed to access the data entry screens from the CPSC website using a special logon and portal. 

The “new” CPSC Product Registry will allow importers, or their designees, to enter the certificate data elements via a user interface, batch upload, and/or Application Programing Interface (API) upload. The user interface is a step-by-step process, where the importer submits one certificate at a time. The batch upload allows the importer to submit multiple certificates using a Comma-Separated Value template. The API upload allows the importer to build an API connection via the product registry and their data systems to instantaneously enter certificates. Clearly, this is going to involve some training on the brand side of the equation.

So, for example, if you import 10 SKUs, or more or less all of the same model bike widget with 10 colors, every time you get a container shipped from Asia, you will know what the test requirement is for the widget, and you will have it tested by the manufacturer, unless it's a child widget, and that data will pretty much be cut and pasted each time using a CSV data spreadsheet. But it will need to be changed if you change suppliers or test requirements or anything else on the product changes, usually SKU’s changes.

Import enforcement currently lacking

The whole rationale for this rule change and disruption is as follows: Currently, CPSC's import enforcement methodology is labor-intensive and lacks an efficient means of using product-specific data to identify potentially non-compliant products. CPSC co-locates staff alongside CBP staff at ports of entry to target shipments for examination.

Once identified, staff request that CBP place a shipment on hold and transport it to an examination station for CPSC inspection; an examination hold creates delay that costs businesses and CPSC time and money. Accordingly, stakeholders and CPSC have a common interest in reducing examinations of compliant products and maximizing examinations of products that are likely to be violative. Currently, certificates are collected only after a shipment is stopped for examination; certificate data are not used to target shipments for examination. Using certificate data for more precise targeting would maximize examination efficiency for stakeholders and staff.

Using certificate data can also improve CPSC's ability to target low-value shipments. CPSC's current targeting capabilities were designed for larger commercial shipments for which the commission receives CBP data. CPSC's port staff is currently unable to pinpoint with a high degree of certainty potentially non-compliant and hazardous products in low-value shipments, which CBP refers to as “de minimis shipments,” and international mail shipments. 

As we all know the de minimis shipments to consumers of batteries below an $800 value is where we are having a problem with low-quality batteries. But this new certificates filing rule won't fix the e-bike battery problem as there is not currently a CPSC standard specifically regarding batteries and as such no certificate filing will be required.

The biggest issue I see right now is that the SNPR proposes a 120-day effective date for a final rule. So that means after the comments on this rule are received, I expect that the rule will be final in less than six months, and once that happens, there will be another six months to get ready for the enforcement. Hopefully, that will be enough time for the industry to get ready.

This is going to be a four-step process for each product: First, companies need to decide what CPSC rules pertain to their specific products; second, they need to determine if they are products intended for kids under 12 (a whole other analysis); third, they need to decide on a test protocol for their products and whether it can be done in house or requires a CPSC certified lab (see Step 2); then finally they need to set up an account with CPSC and learn the methods by which they have to enter all this data on an ongoing basis and how that data entry timeline coincides with the timely shipment and receiving of the product. 

Clearly there is lots of work to be done on this by brands. Our office is going to be assisting clients with this issue going forward as there are a number of issues that have to be dealt with that are more legal than scientific or logistical but the latter two issues are surely ones that must be addressed as well.

Steven W. Hansen is an attorney who represents product manufacturers, distributors and retailers in product liability and other lawsuits and provides consultation on all matters related to the manufacture and distribution of e-bikes and other consumer products. For further questions visit www.swhlaw.com or email legal.inquiry@swhlaw.com

 The information in this article is subject to change and may not be applicable in your state or country. It is intended as a thought-provoking discussion of general legal principles and does not constitute legal advice. Any opinions expressed herein are solely those of the author.


Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2020 Conditions of Use

July 8, 2023

Congress tries to force CPSC to create mandatory standards for lithium batteries under the "Setting Consumer Standards for Lithium-Ion Batteries Act” introduced in March 2023

As we all know CPSC has been trying for force manufactures of e bikes and other related mobility devices to use existing UL standards in the manufacture of these devices. The worst offenders will of course ignore these polite non binding requests. We also know the CPSC is going to have a meeting in July 2023 to "discuss" batteries but we really are not sure what will come of such meeting(s). In the past the CPSC has resisted calls to create mandatory standards when in their opinion a voluntary standard seems to be solving the problem. (see 15 USC 2058)  Many have argued the voluntary UL standards are not working as adherence to them is low and only done by high end manufacturers. So Congress has stepped in under Senate bill 1008 introduced in March 2023. (in the same way they did to force the CPSC to create the massively confusing lead laws and related laws under CPSIA in 2008) Stay tuned to this blog for updates on the status of this bill.

Senate Bill 1008 (March 2023) (related bill HR 1797)

SECTION 1. Short title.

This Act may be cited as the “Setting Consumer Standards for Lithium-Ion Batteries Act”.

SEC. 2. Consumer product safety standard for certain batteries.

(c) Treatment of standard.—A consumer product safety standard promulgated under subsection (a) shall be treated as a consumer product safety rule promulgated under section 9 of the Consumer Product Safety Act (15 U.S.C. 2058).

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2023 Conditions of Use

December 28, 2022

Class three (3) e bikes in CA now must be specifically prohibited on an equestrian trail, or hiking or recreational trail.

I am not sure why or who (outside the legislature) initiated this California bill in Feb. 2022. The purpose is to allow class 3 bikes anywhere a class 1 or 2 bike is allowed by default. Unless of course the city or the county (or some other CA state local jurisdiction) disallow class 1, 2 or 3 bikes on some specific path or area under their control. I think the intent here here is that the Legislature assumed that most local entities wont take any action on this unless there is a real problem locally.  Like Del Mar CA as an example. I do not think allowing class 3 on class 1 bike paths (and other places) was the intent of the original model legislation passed around by People for Bikes. This also raises more issues with respect to class 3 classification jurisdiction as has been raised by the US Consumer Product Protection Agency (CPSC) lately. FYI the reference to "motorized bicycle" below in pink means basically a moped like device that does not go over 30 mph. See details here (CCV sec 406)   So the legislature at least smartly preserved that exception. However I don't see much difference between a moped and class 3 devices functionally or speed wise and quite frankly the ebikes on the class 1 bikeways I see now likely do not even meet CA class 3 requirements. I really DON'T think class 3 ebikes are appropriate on Class 1 bikeways (those completely separate and not near roads) but quite frankly nothing has been done to enforce or even post the existing law on most class 1 bike paths in CA to date so I don't see this as having much of an effect.

[ Approved by CA Governor September 16, 2022. Filed with Secretary of State September 16, 2022. ]
LEGISLATIVE COUNSEL'S DIGEST

[swh note: I have left in the red and blue original editing in the bill markups]

AB 1909, as amended, Friedman. Vehicles: bicycle omnibus bill.
Existing law generally regulates the operation of bicycles upon a highway. A violation of these provisions, generally, is punishable as an infraction.
(1) Existing law prohibits the operation of a motorized bicycle or a class 3 electric bicycle on a bicycle path or trail, bikeway, bicycle lane, equestrian trail, or hiking or recreational trail, as specified. Existing law authorizes a local authority to additionally prohibit the operation of class 1 and class 2 electric bicycles on these facilities.
This bill would remove the prohibition of class 3 electric bicycles on these facilities and would remove the authority of a local jurisdiction to prohibit class 1 and class 2 electric bicycles on these facilities. The bill would instead authorize a local authority to prohibit the operation of a class 3 any electric bicycle at a motor-assisted speed greater than 20 miles per hour. or any class of electric bicycle on an equestrian trail, or hiking or recreational trail.

SECTION 1.

 Section 21207.5 of the Vehicle Code is amended to read:

21207.5.
 (a) Notwithstanding Sections 21207 and 23127 of this code, or any other law, a motorized bicycle shall not be operated on a bicycle path or trail, bikeway, bicycle lane established pursuant to Section 21207, equestrian trail, or hiking or recreational trail, unless it is within or adjacent to a roadway or unless the local authority or the governing body of a public agency having jurisdiction over the path or trail permits, by ordinance, that operation.
(b) The local authority or governing body of a public agency having jurisdiction over an equestrian trail, or hiking or recreational trail, may prohibit, by ordinance, the operation of an electric bicycle or any class of electric bicycle on that trail.
(c) The Department of Parks and Recreation may prohibit the operation of an electric bicycle or any class of electric bicycle on any bicycle path or trail within the department’s jurisdiction.




Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2020 Conditions of Use

August 12, 2020

California Bill alert; AB-1286 Shared mobility devices: agreements (2019-2020) (AB 371 2022)

UPDATE 6/21/22. This bill was renumbered to AB 371 and CAL Bike does not like the insurance requirements. Quite a few provisions have been added since 2020 version below. Here is the calbike campaign and the link to the current version of the bill. Act now in contacting your CA legislator as votes can happen very quickly without warning.

UPDATE 9/2/20. So the legislative year is over in CA as of 8/31/20...whew...The final bill language is set forth below as of 9/2/20. They still did not clean up the issue below in my 8/27/20 update. If the bill is signed by Gov. Newsom it looks like it would take effect January 1, 2021.

UPDATE 8/27/20:

It appears that the mobility industry and or others in the industry were able to remove all the provisions in the bill relating to releases. However in my opinion the definition of a  “Shared mobility device” and a  “Shared mobility device provider” is still too vague which then leads to a problem with this remaining provision "(b) Before distribution of a shared mobility device, a shared mobility service provider shall enter into an agreement with, or obtain a permit from, the city or county with jurisdiction over the area of use. "Distribution" is way too vague and again this could apply to very small rental operations that cannot afford such high insurance limits.

ORIGINAL 8/12/20 POST:

Once again someone in the California legislature got whiff of a bad idea and decided to run with it. Just like the AB 5 bill last year regarding independent contractors and the resulting unwinding of Uber in CA., now we have a "shared mobility bill" that attempts to "fix" a few issues in that sector but does it in a very heavy handed way. 

The first problem is the definition of a "shared mobility device". (ellipses eliminates unneeded verbiage) "Shared mobility device” means an electrically motorized board.... motorized scooter ... electric bicycle... [human powered] bicycle..., or other similar personal transportation device, .... that is made available to the public..". It gets worse.

“Shared mobility service provider”... means a person or entity that offers, makes available, or provides a shared mobility device in exchange for financial compensation..."

So if one person wanted to rent a bike to someone, this law applies to that person renting a bike. Rather overbroad and too all inclusive. Poorly drafted in my opinion. There should be some revenue size threshold added to this definition.

Now for the good part, if you rent one of these devices (regardless of the size of your business or the amount of revenue to you earn) you have to purchase a policy from a California admitted insurer (might be tough from what I know of this insurance market) and the limits have to be 1 million per claim and 5 million dollars in the aggregate. In some respects that is more than Walmart suppliers have to procure to sell to Walmart.

But there is more. The "agreement between the provider and a user shall not contain a provision by which the user waives, releases, or in any way limits their legal rights or remedies under the agreement.". So even though California statutory law and case law allows for such waivers and releases in the recreational sports context, this legislator knows better and is going to go against established law. Such releases are not allowed in a product liability case to begin with. All this does is expose the companies renting (not product manufacturers or distributors) to MORE liability and make it harder for them to extricate themselves from litigation. Also the insurance market has "priced in" those waivers and without them insurance costs will likely rise in this sector. Legislators should think very long and hard before tinkering with existing liability laws and precedent. The law of unintended consequences makes things hard to fix once a new law is unleashed.

It goes on to provide that "A city or county that authorized a provider to operate within its jurisdiction before January 1, 2020, and continues to provide that authorization shall adopt rules for the operation, parking, maintenance, and safety rules regarding the use and maintenance of shared mobility devices..."

Quite frankly I trust the mobility companies to come up with better rules for operation than any government entity. Trust me I have seen this play out before. Government entities are not very adept at this especially considering the hundreds of different devices out there.

It is worth noting that this bill is co-sponsored by the Consumer Attorneys of California (CAOC) (which is a large association of attorneys that represents plaintiff's) and the League of California Cities (which is a group that generally advocates for cities) It is supported by the Environmental Defense Fund and a number of consumer protection groups. It is opposed by a number of shared mobility service providers, TechNet, and the Civil Justice Association of California.

The senate Judiciary Committee Analysis is as follows (in part)

Required prohibition on waiver of rights and remedies

Pursuant to the bill, the agreement and permit must also prohibit provisions in shared mobility provider agreements between providers and users by which the user waives, releases, or in any way limits their legal rights or remedies under the agreement. Writing in opposition, were a coalition of groups, including a number of providers such as Bird and Lime.

What is interesting is that the committee responded to their opposition with:

"It is true that such waivers are generally permitted and widely used, but are subject to certain limitations and requirements laid out in statute and case law. Civil Code Section 1668 provides:All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.Relevant judicial precedent further requires that waivers must be clear, unambiguous, and explicit in expressing the intent of the subscribing parties, as well as comprehensible in each of its essential details. (Benedek v. PLC Santa Monica(2002) 104 Cal.App.4th 1351, 1356; Westlye v. Look Sports, Inc.(1993) 17 Cal.App.4th 1715, 1731."

So even after acknowledging years of case law out there to protect consumer from onerous releases or waivers the Legislature still felt it was appropriate and ban outright the use of waivers and in a very broad fashion (not just for electric devices) or limiting the ban to large providers.

The plaintiff attorneys association responded (some what inaccurately) that:

"The opposition argues that such agreements are common. However, (1) [releases] being common does not make them right and (2) they are different from other rental agreements/operators. The companies manufacture (Editor: that is not true in all circumstances) and place e-scooters into the stream of commerce and are more akin to a product manufacturer and/or retailer and less like an innocent rental agency with no control over the product. Also, the manufacturers have the exclusive control to fix/maintain the scooters. (Editor: this is is also not always accurate) When a driver rents a vehicle, he or she is not required to waive the liability of car defects; neither should a scooter rider."

The Civil Justice Association of California (CJAC) responded that "The scooter manufacturer has no way of exerting control over the scooter rider and does not deserve full legal responsibility for accidents that may occur as a result of a rider’s behavior." The Legislative analyst responded that "assumption of risk" can still be asserted but I would point out if the defendant is in fact a product manufacturer or in the stream of distribution "assumption of risk" is not available as a defense in a pure product liability case.

If you want to see the full bill analysis click here. It is worth a read.

The entire bill as it exists today is set forth below. This bill was last amended in June of 2019 and it is just now coming up for a hearing with the CA Senate Judiciary Committee on August 18, 2020. Don't ask why. It passed out of committee on 8/19/20 and is now set for a 'third reading". This is part of the problem with the CA legislature. Surprise hearings on dormant bills months down the road. Maybe that's planned. August 31 is the last day to pass the bill.

The committee can be reached at:
State Capitol
Room 2187
Sacramento, CA 95814
Phone: (916) 651-4113
Fax: (916) 403-7394
Email: sjud.fax@sen.ca.gov

The bill author can be reached here.

FINAL LANGUAGE OF BILL AWAITING SIGNATURE BY GOV. NEWSOM LIKELY WITHIN 30 DAYS:

The people of the State of California do enact as follows:


SECTION 1.

 Title 10.1 (commencing with Section 2505) is added to Part 4 of Division 3 of the Civil Code, to read:

TITLE 10.1. Shared Mobility Devices

2505.
 (a) For purposes of this title:
(1) “Shared mobility device” means an electrically motorized board as defined in Section 313.5 of the Vehicle Code, motorized scooter as defined in Section 407.5 of the Vehicle Code, electric bicycle as defined in Section 312.5 of the Vehicle Code, bicycle as defined in Section 231 of the Vehicle Code, or other similar personal transportation device, except as provided in subdivision (b) of Section 415 of the Vehicle Code, that is made available to the public by a shared mobility service provider for shared use and transportation in exchange for financial compensation via a digital application or other electronic or digital platform.
(2) “Shared mobility service provider” or “provider” means a person or entity that offers, makes available, or provides a shared mobility device in exchange for financial compensation or membership via a digital application or other electronic or digital platform.
(b) Before distribution of a shared mobility device, a shared mobility service provider shall enter into an agreement with, or obtain a permit from, the city or county with jurisdiction over the area of use. The agreement or permit shall, at a minimum, require that the shared mobility service provider maintain commercial general liability insurance coverage with a carrier doing business in California, with limits not less than one million dollars ($1,000,000) for each occurrence for bodily injury or property damage, including contractual liability, personal injury, and product liability and completed operations, and not less than five million dollars ($5,000,000) aggregate for all occurrences during the policy period. The insurance shall not exclude coverage for injuries or damages caused by the shared mobility service provider to the shared mobility device user.
(c) (1) A city or county that authorizes a provider to operate within its jurisdiction on or after January 1, 2021, shall adopt rules for the operation, parking, and maintenance of shared mobility devices before a provider may offer any shared mobility device for rent or use in the city or county by any of the following:
(A) Ordinance.
(B) Agreement.
(C) Permit terms.
(2) A city or county that authorized a provider to operate within its jurisdiction before January 1, 2021, and continues to provide that authorization shall adopt rules for the operation, parking, and maintenance of shared mobility devices by January 1, 2022, by any of the following:
(A) Ordinance.
(B) Agreement.
(C) Permit terms.
(3) A provider shall comply with all applicable rules, agreements, and permit terms established pursuant to this subdivision.
(d) Nothing in this section shall prohibit a city or county from adopting any ordinance or regulation that is not inconsistent with this title.

SEC. 2.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

 

OLDER VERSION OF THE BILL BELOW:

Introduced by Assembly Member Muratsuchi

February 21, 2019


An act to add Title 10.1 (commencing with Section 2505) to Part 4 of Division 3 of the Civil Code, relating to mobility devices.


LEGISLATIVE COUNSEL'S DIGEST


AB 1286, as amended, Muratsuchi. Shared mobility devices: agreements.
Existing law regulates contracts for particular transactions, including those in which one person agrees to give to another person the temporary possession and use of personal property, other than money for reward, and the latter agrees to return the property to the former at a future time.
This bill would require a shared mobility service provider, as defined, to enter into an agreement with, or obtain a permit from, the city or county with jurisdiction over the area of use. The bill would require that the provider maintain a specified amount of commercial general liability insurance and would prohibit the provider from including specified provisions in a user agreement before distributing a shared mobility device within that jurisdiction. The bill would define shared mobility device to mean an electrically motorized board, motorized scooter, electric bicycle, bicycle, or other similar personal transportation device, except as provided.
This bill would require a city or county that authorizes a shared mobility device provider to operate within its jurisdiction on or after January 1, 2020, to adopt operation, parking, maintenance, and safety rules and maintenance rules, as provided, regarding the use of the shared mobility devices in its jurisdiction before the provider may offer shared mobility devices for rent or use. The bill would require a city or county that authorized a provider to operate within its jurisdiction before January 1, 2020, and continues to provide that authorization to adopt those operation, parking, maintenance, and safety rules and maintenance rules, as provided, by January 1, 2021.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Title 10.1 (commencing with Section 2505) is added to Part 4 of Division 3 of the Civil Code, to read:

TITLE 10.1. Shared Mobility Devices

2505.
 (a) For purposes of this title:
(1) “Shared mobility device” means an electrically motorized board as defined in Section 313.5 of the Vehicle Code, motorized scooter as defined in Section 407.5 of the Vehicle Code, electric bicycle as defined in Section 312.5 of the Vehicle Code, bicycle as defined in Section 231 of the Vehicle Code, or other similar personal transportation device, except as provided in subdivision (b) of Section 415 of the Vehicle Code, that is made available to the public by a shared mobility service provider for shared use and transportation in exchange for financial compensation via a digital application or other electronic or digital platform.
(2) “Shared mobility service provider” or “provider” means a person or entity that offers, makes available, or provides a shared mobility device in exchange for financial compensation or membership via a digital application or other electronic or digital platform.
(b) Before distribution of a shared mobility device, a shared mobility service provider shall enter into an agreement with, or obtain a permit from, the city or county with jurisdiction over the area of use. The agreement or permit shall, at a minimum, require that the provider comply with both of the following requirements:
(1) Requires Require that the shared mobility service provider to maintain commercial general liability insurance coverage with a carrier doing business in California, with limits not less than one million dollars ($1,000,000) for each occurrence for bodily injury or property damage, including contractual liability, personal injury, and product liability and completed operations, and not less than five million dollars ($5,000,000) aggregate for all occurrences during the policy period. The insurance shall not exclude coverage for injuries or damages caused by the shared mobility service provider to the shared mobility device user.
(2) The shared mobility provider agreement between the provider and a user shall not contain a provision by which the user waives, releases, or in any way limits their legal rights or remedies under the agreement.
(c) (1) A city or county that authorizes a provider to operate within its jurisdiction on or after January 1, 2020, shall adopt rules for the operation, parking, maintenance, and safety rules regarding the use and maintenance of shared mobility devices before a provider may offer any shared mobility device for rent or use in the city or county. county by any of the following:
(A) Ordinance.
(B) Agreement.
(C) Permit terms.
(2) A city or county that authorized a provider to operate within its jurisdiction before January 1, 2020, and continues to provide that authorization shall adopt rules for the operation, parking, maintenance, and safety rules regarding the use and maintenance of shared mobility devices by January 1, 2021. 2021, by any of the following:
(A) Ordinance.
(B) Agreement.
(C) Permit terms.
(3) A provider shall comply with all operation, parking, maintenance, and safety rules applicable rules, agreements, and permit terms established pursuant to this subdivision.
(d) Nothing in this section shall prohibit a city or county from adopting any ordinance or regulation that is not inconsistent with this title.

SEC. 2.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
 

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2020 Conditions of Use

August 17, 2017

California Proposition 65 regulations amended to require more specificity on warnings

On August 30, 2016, (yes a year ago) the California Office of Administrative Law approved the adoption of amendments to Article 6, "Clear and Reasonable Warnings", of the California Code of Regulations.  This was a regulatory "repeal and replace" and not a legislative one so as a result it was further off the news "radar". The new regulations provide, among other things, methods of transmission and content of warnings deemed to be compliant with the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65). Prop 65 regulations are promulgated by the Office of Environmental Health Hazard Assessment (OEHHA) which also maintains the Prop 65 chemical list and is one of 6 agencies under the California Environmental Protection Agency (CalEPA).

Most companies already know that any consumer product sold in California must comply with Proposition 65, meaning that their products sold in California cannot contain harmful amounts of the chemicals on its notorious 800 chemical list (and growing). Its important to keep in mind that this list continues to grow and is much more extensive than the EU REACH law/regulation (which currently lists only about 200 chemicals). Its also much more extensive that the US Consumer Product Safety Commission's (CPSC) regulations which are mostly confined to lead and Phthalates. There has been quite a bit of publicity surrounding Monsanto's futile legal efforts to keep RoundUp weed killer off the Prop 65 list.

The difficulty with the new warning requirement (which does not go into effect until August 30, 2018) is that if you test and if you find something on the list in your product you must now have specific "safe harbor" warnings that include any of the 800 chemicals on the list that might be in your product in harmful amounts. Under the old abolished regulations you could utilize a "safe harbor" (provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule) warning that did not need to specify which of the 800 chemicals on the list might exist in the product. Now of course one can debate the merits of warnings generally, especially the efficacy of one that lists the offending complex chemical name over one that does not, but we don't have enough space on this post to have that debate. The point is this is now the current state of the law and my advice is to try to steer clear of Prop. 65 suits (just like ADA suits and host of others). Also these warnings cannot exist solely in user's manuals unless you are a vehicle manufacturer who got special dispensation under the new regulations (but even they still must have stand alone warnings)

The other interesting issue is that if your company was part of a settlement of a Prop 65 suit. Under the new law a company that is a party to a court-ordered settlement or final judgment establishing a warning method or content, is deemed to be providing a “clear and reasonable” warning for that exposure for purposes of the new law, if the warning fully complies with the order or judgment. This covers a few companies in the bicycle arena. It's not known how many total companies are exempted by this as that would depend a lot on the terms of the settlement and (I assume) the chemicals ("the exposure") involved in that particular suit.

Clearly there is going to be lots of work ahead in the next year for all consumer product manufacturers, brands, distributors, resellers, and retailers (on line and off). You can be sure Amazon, Walmart and all the big retailers are well aware of these issues and they will surely come up in contract negotiations with sellers to most large retailers.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use

December 29, 2016

List of California legislation (bills) that became Law in 2016

We recently became curious as to the comprehensive list of legislation signed and vetoed in California in any given year. We then set out to find a comprehensive list not limited to any particular subject matter (or just the "popular bills" the media liked) and low and behold we could not find one (at least available to the public). Governor Browns office also does not issue a comprehensive yearly list but rather issues many press releases throughout the year listing all the bills signed or vetoed on a particular day. Most of these press releases contain many bills. Some only a few. 

In 2016 the Legislature sent Governor Brown 1,059 pieces of legislation, 898 of which the governor signed into law. He vetoed 159 and two become law without signing. We show 5,103 bills were introduced in the State Legislature. Only 20.75% of the bills made it to the Governor's desk and only a mere 17.6% were signed and became law. If we assume each bill is an average of 7 pages long (and some are much longer) that would be about 6,300 pages of new laws! Happy reading! Some of these are real gems.....only became possible through the hard work of lobbyists and special interests! Quite frankly I'm pretty impressed with our 78 year old Governor's ability to wade thru this mess. Having a full time state legislature (unlike most states) is quite frankly both a blessing and a curse.

Now keep in mind that this list is only "legislation" signed or vetoed in 2016. It does NOT include changes in the California administrative code (non legislative) and related "codes" passed by State agencies. Nor does it include voter initiatives passed in 2016. Nor does it include cases decided by the various appellate level courts in California that can greatly affect how a given law is interpreted or enforced, or create all new obligations in and of themselves ("Judicial law" or precedent). This also does not include local laws or ordinances passed by various California counties (58) or other municipalities (482) or other governmental entities. Finally this list only includes laws passed or vetoed in 2016. Some of these take effect January 1, 2017 (typically) but many may not take effect until later or some even earlier (rare). Also keep in mind there are laws passed in 2014-2015 that may just now be taking effect in 2017.

There really is something in this 37 page list for everyone. We were not able to put it in chronological order due to the fact that it was hard enough to avoid duplication with the many press releases that came out in a 12 month period. The order signed is also really not important. What is important is the date the law becomes effective, which can vary for each piece of legislation. The veto and signing statements are hyperlinked in the list but the legislation passed/signed is not. The fastest way to look it up is by typing in the bill number here and making sure you have the right year (2016). Let us know if you see any duplicative entries or if you think we have missed something. The last date anything was signed or vetoed was September 30, 2016 and we are not aware of anything still pending on the Governors desk as of this writing.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2016 Conditions of Use

January 24, 2014

Legal analysis: Confusion over electric bike regulations


Published July 29, 2013 in Bicycle Retailer and Industry News
Republished with permission

by Steven W Hansen

After reading two articles in BRAIN’s June 15, 2013 issue (“Speedy e-bikes trouble industry” and “NYC e-bike crackdown exposes legal morass”) as well as a follow up letter to the editor in the July 1, 2013 edition, I was compelled to respond to some apparent misunderstanding by some as to what the “laws and regulations” are with respect to electric bikes and how they do and don’t work together.

First of all there is quite a bit of confusion regarding terminology. I am going to use the phrase “electric bikes” to cover all “bicycles” (not stand on scooters without a seat) which have an “electric motor” to (help) propel them. The industry has evolved into “low speed” electric bikes and “high speed” electric bikes and various configurations which require no pedaling (or may not even have pedals) to the various “pedal assist” varieties, in which the motor wont help you unless you help it. But I digress.

Before 2003 there was really very little in the way of laws or regulations dealing with electric bikes. California passed a few laws in 1998 dealing with what at the time was a new phenomenon and those laws still exist today (more on that later). But the main event that started the ball rolling was when the bicycle industry was able to get Congress to pass a law amending the Consumer Product Safety Commission’s (CPSC) definition of a “bicycle” to include “low speed electric bicycles” which is defined as a “two- or three-wheeled vehicle with fully operable pedals and an electric motor of less than 750 watts (1 h.p.), whose maximum speed on a paved level surface, when powered solely by such a motor while ridden by an operator who weighs 170 pounds, is less than 20 mph.

This did help clarify the CPSC’s jurisdiction. Before 2003 there was a legitimate question if CPSC had “regulatory” authority over all electric bikes (as “consumer products”, its generally mandated scope of authority) or if it overlapped the Dept. of Transportation (DOT) and its sub agency the National Highway Transportation Safety Administration (NHTSA). NHTSA defined (and regulated) “motor vehicles” (and still does today) as a “vehicle driven or drawn by mechanical power and manufactured primarily for use on the public streets, roads, and highways…”

From the 2003 change in the regulations it was clear that the CPSC only wanted to carve out a small(er) part of the “electric bike” market to similarly regulate as “bicycles” (no new regulations were adopted to deal with the manufacture of electric bikes, just the definition).

Unfortunately this still left NHTSA holding the bag sort of speak on what to do with all the “other” electric “devices” not regulated under CPSC’s new 2003 “carve out”. Before 2005 NHTSA had taken a somewhat ad hoc approach to requests for clarifications from electric or “motorized” bicycle manufacturers (and others) as to whether specific devices were “motor vehicles” or not. But after the CPSC acted in 2003 NHTSA then began a “notice of draft interpretation and request for comments” (aka “rulemaking” without intervention by Congress) in 2005 to help clarify when certain two and three wheeled motorized devices would be deemed “vehicles” and regulated by NHTSA and when they would not be. The problem of course is that one agency can only determine the scope of its own regulatory authority, not that of another agency. NHTSA placed great emphasis on the 20 mph limit that CPSC focused on. They also differentiated a ‘‘Motor-driven cycle’’ previously defined as “motorcycle” “with a motor that produces 5-brake horsepower or less.’’ NHTSA adopted the 20 mph limit as a more decisive factor as opposed to previous rulings as it concluded “that the maximum speed of a vehicle with on-road capabilities is largely determinative of whether the vehicle was manufactured to operate on a public road, in normal moving traffic, and therefore a ‘‘motor vehicle.’’

Unfortunately the method to determine that speed was much more involved than the CPSC’s method and could yield slightly different results. Also the “draft interpretation” remained vague for two and three-wheeled vehicles with a speed capability of 20 mph or greater. Those vehicles would be excluded from the definition of ‘‘motor vehicle’’ if they were manufactured primarily for off-road use. To determine that question NHTSA would again revert to the case by case approach of looking at the physical features of the vehicle to see if was intended for on or off road use. Again NHTSA does not regulate any off road vehicles like off road motorcycles for instance. Those all fall under CPSC jurisdiction (by default, if it’s a “consumer product”), yet there are no CPSC regulations specifically for such electrically powered devices (if they don’t meet the CPSC definition of a “low speed electric bicycle”). Finally, the NHTSA 2005 “draft interpretation” is still in “draft” stage and is no more binding that any opinion letter from NHTSA. It is not a regulation like CPSC’s electric bike definition and from discussing the matter with the NHTSA legal department there is nothing indicating that will change any time soon.

The electric bike manufacturers and distributors are for the most part satisfied with the way the laws are currently written (or at least interpreted) at the federal level. However some would like to see better and more clear regulation of the over 20 mph category as they apparently are trying to do in the EU with “fast or speed pedelecs.”

The trickier issue of course was raised once again in the article “NYC e-bike crackdown exposes legal morass” which brings to light what many fail to realize about the federal regulations. First none of the electric bikes that fall within the regulations (under 20 mph) have any specific regulations directed at electric bikes other than simply defining what is and to some extent what is not an electric bike (neither NHTSA or CPSC have regulations covering the motors or throttle devices, for example).

Over the years states have basically borrowed NHTSA’s definition of a motor vehicle along with all the regulations governing their manufacture and have incorporated those into their state laws. States have similarly regulated bicycles utilizing the 1973 CPSC bicycle standard as a basis. But with electric bicycles the process seemed to happen in reverse. Electric bicycles popped up and states, caught by surprise, felt they needed to deal with them on their roads and sidewalks, as CPSC and NHTSA failed to timely regulate their manufacture. Some of these laws unfortunately also had to define what the state felt an electric bike was and was not and in some cases this can conflict with federal law.

The other problem is that these federal regulations only affect the manufacture and first sale of these devices, not where, when, how, who and under what other conditions (age limits, licenses, insurance, registration etc.) they can be operated. The federal law has no “preemptive effect” over such state laws. These issues have always traditionally been regulated by state laws and in some cases even county and city laws. This is also true for cars, trucks and traditional non-powered bikes. CPSC mandates how bicycles must be tested and sold and what standards bicycle helmets must meet in their testing and construction but it does not mandate that riders must use the helmets while riding bicycles. That is left up to states or cities to regulate. The same was true for bicycle headlights and tail lights. CPSC does not require them on bikes but most state laws do if riding on road at night. This issue was hotly contested in a serious injury case some years back.

I approached the electric bike industry in 1995-2000 with a two pronged approach; Try to develop some voluntary standards for electric bikes that could be adopted by NHTSA or CPSC (much like they adopted the ASTM bicycle helmet standard) and then try to use model “use” legislation at the state level incorporating the ASTM standards and classifications. The proposal drew interest but was not acted upon by enough influential companies at the time. This legislative approach was somewhat followed by Google with it driverless car legislation passed in California and Nevada recently. Segway also tried a similar approach to pave the way for sales of its totally new type of device.

But the electric bike industry is following the traditional, difficult and time consuming approach. Let consumers buy the products and once a critical mass of the devises is in use there will be legislative “fixes” to accommodate the safe use of mainstream devices. The problem of course is that this is a car centric country, where drivers don’t like bikes of any kind on “their” roads, and many state legislators don’t really like Washington DC’s approach to anything. This was clear in the comments from states to NHTSA’s proposed regulation in 2005. Hopefully this method will work as it may be too late for the “pave the way with legislation first” method. The EU also tried to get a regulatory framework in place before the market was flooded with various devices and in some respects it worked as the EU market is much larger than the US market right now for electric bikes. There are other reasons as well.

Another issue to keep in mind are what some refer to as “fast” electric bicycles, which can travel over 20 mph solely on motor power. The fact that these “fast” electric bikes can travel over 20 mph solely on motor power takes them outside the scope of the CPSC definition of a “low speed electric bicycle”. Some sellers of these “fast” electric bikes claim that these bikes are designed for “off road” use. However, this may be a way to get around the CPSC and NHTSA regulations (and possibly some state laws), since some of these bikes appear to be designed for road use, as opposed to “off road” use (using the NHTSA interpretations). These “fast” e-bikes are causing debates in some states, notably in New York as noted in the article “NYC e-bike crackdown exposes legal morass”.

As pointed out above, the CPSC’s definition of an electric bike centers around a 20 mph limit, with the caveat that this 20 mph must not be exceeded if the electric bike is solely powered by its motor. Accordingly, this definition permits an electric bike which is powered by its rider (with the possible assistance of a motor, making the electric bike what some call a “pedelec”) to travel faster than 20 mph. The distinction is key to a correct interpretation of the CPSC’s definition.

Lastly, on a related topic altogether, some people appear to be confused about where the regulations fit in to the overall scheme of things in terms of liability. If a rider is injured by or on an electric bike, compliance with a regulation or standard (mandatory or otherwise) is not going to be of much help other than possibly being persuasive. (read more on that here). However failure to comply with a regulation (that is applicable) really can create an uphill battle in court. But again the facts of each specific case will be vastly different and drawing conclusions from specific cases will be difficult.

In the meantime it will be interesting to see what develops out of New York and if there is a state or city wide solution. As most in the industry know trying to lobby government officials to your point of view is a tricky business and fraught with pitfalls.

Steven W. Hansen an attorney who defends product manufacturers, distributors and retailers in product liability lawsuits and provides consultation on all matters related to the manufacture and distribution of consumer products. For further questions visit www.swhlaw.com or send an e mail to: legal.inquiry@swhlaw.com

The information in this column is subject to change and may not be applicable in your state. It is intended as a thought provoking discussion of general legal principles and does not constitute legal advice. Any opinions expressed herein are solely those of the author.



Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use