A Federal appeals court in the Fifth Circuit after hearing arguments in New Orleans, earlier this month issued a far-reaching ruling that practically voids one of only three mandatory safety standards ever issued by the Consumer Product Safety Commission.
That ruling, which eliminated substantial portions of the standard set by the CPSC on swiming pools, cited the agency for not gathering "substantial evidence" to justify the standard.
To make matters worse, the other two standards - architectural glass and matchbooks (perhaps not the most dangerous products on the market) - are also facing federal court, challenges here and in Boston.
In fairness to the CPSC, safety standard setting is but a small part of its job, despite the statements of criticis who point to the small number of standards as an example of agency inaction. The agency uses several less complicated methods like recalls and voluntary standards to force dangerous products off the market with varied success.
But the Fith Circuit ruling has sent to agency's legal office scurrying to come up with a response for the commission to make. Thee deadline to ask for a rehearing on the matterin New Orleans already has passed, and the next step might be to recommend that the CPSC ask the Justice Department and the Soliciter General to take the matter to the Supreme Court.
But the most powerful ramification of the action comes within the commission where a full reassessment of the way standards are drawn up must now be made.
If one federal court can rule that the commission is not doing its homework, and challenges on the other two rules hold up, two questions must be asked: AAre mandatory safety standards worth it? And, is there a better way to insureee product safety?
While the Fifth Circuit conceded that the commission does not have to coduct an elaborate cost-benefit analysis, it added: "It does, however, have to shoulder the burden of producing substantial evidence to support its conclusion," and prove that a standard is "reasonably necessary to eliminate or reduce an unreasonable risk of injury."
WIRING BOOKLET A bit more on the CPSC: After an item in this colun a few weeks ago notifying consumers of the availability of a safety booklet on aluminum wiring, the agency reports it has been inundated with 1,600 requests - including one writer who asked if the federal government would pay to have her house rewired.
HIGH GRADES The National Highway Traffic Safety Administration has evaluated the effectiveness of the Department of Transportation's program to fund consumer participants in agency proceedings. The report card came back with high grades for the plan - one of several being tried at government agencies.
The one-year experiment at DOT and NHTSA has worked out so well that it was recommended that the program be extended temporarily until permanent rules providing for continuing funding are authorized.
"The program has frequently, produced significant and relevant evidence and arguments which were helpful to the agency in its rulemaking," said the evaluation report. "By creating the conditions for early and effective public advocacy, the department will be able to develop regulations that are more secure from judical and legislative attack since such regulation will be based on a more complete assessment of the competing arguments and interests."
The report also pointed out that the program "has not caused any substantial delays in the rule making process," which opponents had warned could occur.
"Even when informed participants have not produced substantial or novel information or perspectives," the report states, "the agency has benefited from teir participation. We have the benefit of knowing that the views of intellectually qualified and interested members of the public have not been neglected."
Several citizens groups, individuals and public interest organizations were granted the money to participate. The average award was about $4,000, with the highest single grant to the Environmental Defense Fund for $15,000-but the EDP only wound up building the program for about $7,7000.
GROWTH AREA: Calling goverment requlation "one of the major growth areas of the American economy," a recent report by Washington University's Center for the Study of American Business says the 41 federal regulatory agencies have a combined budget of $48 billion for fiscal 1979.
That is twice the expenditure for federal regulation in 1974, and "represents a growth rate that is unsurpassed by federal budget as a whole, the population of the country, the gross national product, or any other applicable basis for comparison," according to report authors Murray Weidenbaum and Robert De Fina.
Private sector costs of complying with regulation were estimated at $62 billion in 1978, a full 20 times the $3 billion inagency budgets for that year.
Most of the 1979 budgets are earmarked for new areas of socila regulation, such as consumer safety and health ($2.7 bilion), and the enviroment ($1.1 billion), job safety ($6 billion), and energy the report states.
Meanwhile, another study by the Chicago World Report, a magazine of the First National Bank of Chicago, says the cost of regulation is actually closer to $7 billion, and the annual cost if manpower and materials devoted to filling out federal forms was $100 billion.
CWR said the chances of easting the regulatory burden are slight, and would require a fundamental shift in public attitudes.
NEWLETTER Still one more new publication on regulation has been announced by Executive Enterprise Publictions of 33 West 60th st., New York 10023. Called "Financial Regulation Report," the monthly newsletter is designed to help companies assess how regulations will effect financial operations.