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BPSA Grapples with Unexpected Legal Bills

Published June 1, 2009

CHICAGO, IL (BRAIN)—An array of legal help to challenge a New Jersey legislator’s attempt to ban quick releases in that state and a sweeping revamp of lead-limit rules for children’s products has the Bicycle Product Suppliers Association grappling with how to pay them.

John Nedeau, the BPSA’s president, said a small association with a limited budget and only 83 members is financing legal challenges that benefit most industry suppliers and ease potential legal threats to dealers.

The association has bills totaling more than $50,000. Board members are examining the best way to recoup those costs from its membership without forcing some out of the association rather than pay an assessment fee that would average about $1,000 per member. The BPSA could also increase its dues, or decide on a combination of both.

“We continue to be confronted with these extraordinary expenses associated with defending the industry on critical legal matters. The cost is far in excess of what we’ve historically needed to cover legal expenses. In fact, the expenses associated with these issues could ultimately surpass the association’s entire annual budget of approximately $100,000,” Nedeau said.

“We’re proving effective in defending the industry, but we don’t anticipate the issues or costs going away soon. We need a source of funding that’s not part of our present revenue stream. It will have to come in the form of a combination of assessments and potential dues increases – there’s just no other way to manage it. But one should consider the cost associated with individual companies defending these challenges and you quickly see the benefit of BPSA membership,” he said.

It was legislation Congress passed in August 2008 that forced the BPSA to challenge the Consumer Product Safety Commission’s decision to enforce new lead limits on all children’s products, including new testing requirements.

If the commission had enforced the legislative mandate, it would have played havoc with imports of children’s bikes and could have forced such items as inner tubes off store shelves. Schrader valves, for example, would most likely fail new lead content limitations.

“The recently announced two-year stay of execution in response to our petition for exclusion is evidence that our issues with the bill were heard by the commission. We’re not all the way home, but have more time to comply and work with the commission to address the issues we have with the bill,” Nedeau said.

“We’re one of only a couple of industries that have received the ‘stay’ to date. Credit goes to the BPSA’s legislative committee, led by Trek’s Bob Burns, and an assist from Bikes Belong’s lobbyist, in navigating a path for this successful outcome. But it’s going to require more resources, both voluntary efforts and cash to complete successfully,” he added.

Most suppliers and retailers are unaware of how much volunteer time from key board members have gone into challenging the New Jersey legislation as well as the CPSC’s lead-limit law.

Trek’s in-house attorney, Bob Burns, and QBP’s in-house counsel, Matt Moore, have spent dozens of hours working on these issues, including several trips to Washington D.C. to meet with CPSC staff.

Other board members like Pat Cunnane, president of Advance Sports, parent company of Fuji, SE and Kestrel, helped temporarily derail the New Jersey legislation. And other companies like SRAM, Specialized, Pacific, Raleigh and others have also spent considerable time on these issues.

—Marc Sani

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