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. The Consumer Product Safety Commission (CPSC) claims that one of Leachco’s infant products is a “safety hazard.” To “prove” its case, the commission is dragging Leachco through arbitrary proceedings based on projections of imaginary consumer behavior. With 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 products for young families.

Today, Leachco boasts a wide variety of products—all designed by Jamie with assistance from a staff of around 40 employees, including the couple’s three now-adult children. Along the way, Jamie expanded the company from one homemade invention to dozens of successful products, including the Podster^® infant lounger. The Podster^® provides parents and caregivers a safe, supervised place for awake 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 of 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, three infants have died, but not because of the Podster^®. In one instance, a daycare center worker placed a baby and a Podster^® in a crib and left the baby, with a bottle in his mouth, 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. A similar incident occurred in a home-based daycare, when an infant was left unsupervised for 45 minutes. And parents co-slept with their three-week-old daughter in a bed that included a Podster^®, bedding, and pillows—all contrary to Leachco’s express warnings and instructions.

But the CPSC blamed Leachco in these cases. The agency claims the Podster^® is defective—despite its warnings—because it’s “reasonably foreseeable” that parents and caregivers may ignore the 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.

But even if you adopt CPSC’s outlandish reasoning, its pursuit of Leachco still doesn’t make sense. Tragically between 1,000 and 3,500 infants die in their sleep each year—even in products that the Commission promotes for a “safe-sleep” environment. Compare that to the Podster: if each of the 180,000 Podsters ever sold was used just once (an unreasonably low estimate), the injury rate the Commission links to the Podster is 0.0017%— less than two-one-thousandths of a percent. A realistic estimate—hundreds of uses per Podster—reduces that rate to near-zero.

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 back to the commission.

In addition to a recall, the agency is seeking refunds and reimbursements, which are legal remedies the CPSC may not constitutionally seek without 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 to a hearing before an independent judge and jury.

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. Leachco’s federal lawsuit argues that the CPSC’s in-house proceeding violates its 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.

On July 3, 2024, the Administrative Law Judge overseeing the in-house tribunal concluded that the CPSC failed to prove that the Podster has any defect and that, regardless, the CPSC failed to show that any defect created a substantial risk of injury to the public. Despite this resounding rejection of its claims against Leachco, on July 10, the CPSC’s enforcement lawyers indicated that it will appeal the ALJ’s ruling. This appeal will be heard by the commission itself—the same body that approved the case in the first place.

Meanwhile, Leachco’s federal lawsuit challenging the commission’s in-house adjudicatory scheme continues. On August 9, 2024, Leachco asked the Supreme Court to take up its case against the CPSC’s unconstitutional in-house tribunal process.