Small family business battles arbitrary prosecution for baby pillow

Jamie Leach is a self-described “Innovationer™” who, after a close call with her seven-month-old son, leveraged her experience as a registered nurse and mom to start Leachco, Inc., a small, family-owned business based in Ada, Oklahoma, that’s determined to make the world safer for babies.

An overzealous government agency, however, is just as determined to punish the company—seeking to declare one of their infant products a “safety hazard” through arbitrary proceedings and projections of imaginary consumer behavior. With their company pride and livelihoods on the line, the Leaches are fighting back.

Jamie and Clyde Leach formed Leachco in 1988, a few months after their then-seven-month-old Alex nearly fell out of a restaurant highchair. Jamie was alarmed, but she quickly repurposed her purse strap to safely secure Alex to the chair.

Within the next few days, Jamie’s creativity kicked in and she assembled a homemade safety wrap using dental floss, tape, and a kitchen hand towel. The “Wiggle Wrap” became an instant hit with other parents and sparked the idea for a company focused on childcare products.

Today, Leachco boasts a wide variety of products—all designed by Jamie and a staff of around 40 employees, including the couple’s three now-adult children. Along the way, Jamie expanded the company from her homemade invention to dozens of successful products including the Podster® infant lounger. The Podster® provides parents and caregivers a safe, supervised place for infants. And it’s popular. Leachco has sold 180,000 Podsters® since they hit the market in 2009.

Leachco was born specifically out of a concern for the safety of babies. So naturally the Leaches have been vigilant about product safety since day one. The Leaches are especially cognizant about the risks associated with sleeping infants. Each Podster® comes with explicit instructions and warnings for use only with awake and supervised infants.

Even with those warnings, in the 13 years the Podster® has been in use, two infants have died, but not because of the Podster®. In one instance, a daycare center placed a baby and a Podster® in a crib and left the baby unsupervised for more than 90 minutes—contrary to Leachco’s warnings, state regulations, and the daycare’s own rules. The daycare lost its license and shut down that facility. In the other situation, a three-week-old infant was placed in the Podster® and then placed on an adult bed, between the infant’s adult parents, along with bedding and pillows, for co-sleeping—contrary to Leachco’s express warnings and instructions.

But the Consumer Product Safety Commission (CPSC) blamed Leachco in both cases. The agency claims the Podster® is defective because it’s “reasonably foreseeable” that parents and caregivers will ignore express warnings and fail to use common sense.

The claim is absurd: Consumers can ignore the warnings on any product. If CPSC’s logic were applied broadly, it would eliminate virtually every product from the market.

As the enforcement arm of the Consumer Product Safety Act, the CPSC is tasked with defining “defects” and explaining why products are defective. But the law gives the agency vast discretion to unilaterally consider a laundry list of factors—for example, the “necessity” of a product, regardless of whether consumers find a product a necessity—and any “other factors [that the Commission itself finds] relevant to the determination.”

Worse, the CPSC doesn’t even have to go beyond its own walls to prosecute Leachco. Instead, the agency launched an in-house administrative proceeding whereby the CPSC files the complaint with itself and, through an Administrative Law Judge (ALJ), tells itself how to punish the Leaches—and any appeals of the ALJ’s decision go to the commission itself.

In addition to a recall, the agency is seeking refunds and reimbursements, which are legal remedies the CPSC may constitutionally seek only before a jury in court.

There are deeper constitutional issues with the structure of the CPSC. Officials who are empowered with executive authority must be answerable to the president. But the CPSC’s commissioners cannot be removed by the president except for cause. The Supreme Court has ruled that this removal protection is unconstitutional.

In sum, the CPSC is an unconstitutional agency conducting an unconstitutional proceeding and violating Leachco’s rights.

Left unchecked, the agency’s arbitrary enforcement leaves entrepreneurs and small-business owners no way of knowing when the federal government could shut them down. The government should foster innovation, not chill it, especially for smaller companies with fewer resources to fight back.

The Leaches’ legal fees were becoming unsustainable when they found Pacific Legal Foundation and our free-of-charge representation. The Leaches’ federal lawsuit argues that the CPSC’s in-house proceeding violates their rights to due process—that is, a trial before an independent judge and jury. They’re also fighting the agency’s bogus product-defect claims to restore their right to run a lawful business and earn an honest living.