Calendar No. 152

107TH CONGRESS REPORT

1st Session " ! SENATE 107–106

THE PRODUCT PACKAGING PROTECTION ACT OF 2001

DECEMBER 4, 2001.—Ordered to be printed

Mr. LEAHY, from the Committee on the Judiciary, submitted the

following

R E P O R T

[To accompany S. 1233]

The Committee on the Judiciary, to which was referred the bill

(S. 1233) to provide penalties for certain unauthorized writing with

respect to consumer products, having considered the same, reports

favorably thereon, with an amendment in the nature of a substitute, and recommends that the bill, as amended, do pass.

CONTENTS Page

I. Purpose ........................................................................................................... 2

II. Legislative history ......................................................................................... 2

III. Discussion ....................................................................................................... 3

IV. Vote of the Committee ................................................................................... 4

V. Section-by-section analysis ............................................................................ 4

VI. Cost estimate .................................................................................................. 4

VII. Regulatory impact statement ........................................................................ 5

VIII. Changes in existing law ................................................................................ 6

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Product Packaging Protection Act of 2001’’.

SEC. 2. TAMPERING WITH CONSUMER PRODUCTS.

Section 1365 of title 18, United States Code, is amended—

(1) by redesignating subsections (f) and (g) as subsections (g) and (h), respectively; and

(2) by inserting after subsection (e) the following:

‘‘(f)(1) Whoever, without the consent of the manufacturer, retailer, or distributor,

intentionally tampers with a consumer product that is sold in interstate or foreign

commerce by knowingly placing or inserting any writing in the consumer product,

or in the container for the consumer product, before the sale of the consumer prodVerDate 11-MAY-2000 21:03 Dec 04, 2001 Jkt 099010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6621 E:\HR\OC\SR106.XXX pfrm02 PsN: SR106
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uct to any consumer shall be fined under this title, imprisoned not more than 3

years, or both.

‘‘(2) In this subsection, the term ‘writing’ means any form of representation or

communication, including handbills, notices, or advertising, that contain letters,

words, or pictorial representations.’’.

I. PURPOSE

The Product Packaging Protection Act of 2001, S. 1233, will criminalize the unauthorized insertion of literature in a consumer product package. Food manufacturers and distributors report that hatefilled, pornographic, or political leaflets are being folded and inserted into certain boxed groceries, like frozen pizza, cereal, and

macaroni and cheese packages. Current Federal product tampering

law is inadequate to address this activity because it only applies

to the actual product contained inside the package but not the

physical package itself. The Product Packaging Protection Act of

2001 extends the scope of 18 U.S.C. 1365 to acts involving the tampering of the product package. The penalty for a violation of this

measure would be a fine of up to $250,000 per offense, imprisonment of up to 3 years, or both. It would not be an offense if the

pamphlet insertion was authorized by the food manufacturer.

II. LEGISLATIVE HISTORY

Senate bill 1233 was introduced as the Product Packaging Protection Act of 2001 by Senator Herb Kohl (D-Wisconsin) on July 24,

2001. Original cosponsors included Senators Hatch (R-Utah), Leahy

(D-Vermont), DeWine (R-Ohio), and Durbin (D-Illinois). The legislation as introduced would amend 18 U.S.C. 1365 to extend product

tampering law to acts involving the insertion of literature into the

actual product package.

On August 1, 2001, the Antitrust, Business Rights, and Competition Subcommittee of the Senate Judiciary Committee held a hearing on S. 1233. Witnesses included Alice Fisher, Deputy Assistant

Attorney General, Department of Justice, Criminal Division; Leslie

Sarasin, president, American Frozen Food Institute; Paul

Petrucelli, chief counsel, Kraft North American, Inc.; and David

Burris, a victim of product package tampering. The testimony received by the panel identified the inability of current Federal law

to address the problem of product package tampering. By amending

current Federal product tampering law as prescribed by the Product Packaging Protection Act of 2001, incidents where unauthorized literature is inserted into boxed food products can be prosecuted.

On September 6, 2001, the full Judiciary Committee met in executive session to consider S. 1233. The bill in the form of a substitute was ordered favorably reported to the full Senate by unanimous consent. The substitute removed the word ‘‘authorized’’ from

section 2 of the bill in order to address gray, or parallel, market

concerns. The gray market was concerned that the bill would affect

distributors’ ability to repackage and sell consumer products. The

Product Packaging Protection Act is not intended to affect those engaging in the legal repackaging and selling of consumer products

when they are acting in the due course of business.

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III. DISCUSSION

In the past 3 to 4 years, manufacturers of food products regularly

found that grocery stores have received complaints from consumers

about hate-filled, pornographic, or political literature being found

in groceries. It appears that the literature is being folded and inserted into certain groceries that are packaged in boxes. Cereal

boxes, frozen pizza boxes, macaroni and cheese boxes are among

the more frequently tampered product packages. Kraft has reported

80 incidents in the past 4 years. General Mills documents 25 per

year, and Kellog’s many more each year. It is likely that many

more cases go unreported by consumers who simply throw away

the offending material and do not report the event.

The incidents involve pamphlets espousing racist, anti-Semitic,

and white supremacist sentiments. Other examples include extremist anti-abortion literature. Leaflets have been found that attack

African-Americans, praise the Holocaust and encourage the killing

of immigrants. For example, one leaflet showed an illustration of

a man being shot at point blank range with an automatic weapon

and the caption, ‘‘If it ain’t white, waste it !’’ Suffice it to say, this

literature is vitriolic, shocking, and hate-filled.

Manufacturers have responded as best they can to these incidents. They have undertaken internal reviews to ensure that these

leaflets are not getting into the products either at the manufacturing plant or during distribution. It is not until products reach

the shelves of the grocery store that these handbills are inserted—

too late for the manufacturer or the distributor to do anything

about it.

Unfortunately, when consumers or companies turn to the authorities for help, they cannot be assisted. According to the Federal

Bureau of Investigations and the Food and Drug Administration’s

Office of Criminal Investigation, these actions are not covered by

Federal product tampering statutes. Those laws only cover the actual product themselves, but not the packaging. In response to incidents in the respective States, both New Jersey and California

passed laws to criminalize this behavior. These States should be

commended, but more should be done. Federal law needs to be

amended accordingly.

The Product Packaging Protection Act of 2001 would prohibit the

placement of any writing or other material inside a consumer product without the permission of the manufacturer, distributor, or retailer. The criminal act must involve placing the literature in a

product package, not on. So, any number of reasons that people

might have to write on a product package or attach literature to

it will not be criminalized. Further, the bill does not apply when

a manufacturer, retailer, or distributor consents to the placement

of promotional literature in the product package.

The penalty for violation of this measure would be a fine of up

to $250,000 per offense and/or imprisonment of up to 3 years. Closing this gap in Federal law would appropriately punish people

whose actions violate the integrity of the food product, compromise

consumer’s faith in the food they purchase in the grocery store, and

damage the good name and reputation of the food manufacturer.

This legislation does not offend the first amendment. The criminal act is the insertion of material into product packaging without

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the permission of the manufacturer. The fact that most of the incidents involve racist or anti-Semitic literature brought the problem

to our attention, but the criminal act described in the bill has nothing to do with what is written on the literature inserted into the

package.

Many food manufacturers and distributors experience this type of

product tampering. Together, they recognize the need for this legislation and have signed a letter supporting the introduction and

passage of this bill. The supporters of this bill include: the American Bakers Association, the American Frozen Food Institute, Food

Distributors International, General Mills, the Grocery Manufacturers of America, the Independent Bakers Association, Kellog’s, Kraft

Foods, the National Food Processors Association, and the National

Frozen Food Institute.

IV. VOTE OF THE COMMITTEE

The Product Packaging Act of 2001, S. 1233, passed by unanimous consent on September 6, 2001.

V. SECTION-BY-SECTION ANALYSIS

Section 1.—Short Title

The title of the bill is the ‘‘Product Packaging Act of 2001.’’

Section 2.—Tampering Consumer Products

Section 2 creates a new subsection (f) of section 1365 of title 18,

United States Code, Previous subsections (f) and (g) are redesignated as subsections (g) and (h), respectively.

Subsection (f)(1) creates a Federal offense to place written material into a consumer product package, like a cereal box. It is not

a Federal offense to do so if one has permission from the manufacturer, retailer, or distributor. The penalty for a violation of subsection (f)(1) is a fine, imprisonment not more than 3 years, or

both.

Sebsection (f)(2) defines the term ‘‘writing’’ as used in subsection

(f)(1). ‘‘Writing’’ means any form of representation or communication. Forms include, but are not limited to, handbills, notices, or

advertisements that contain letter, words, or pictorial representations.

VI. COST ESTIMATE

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE,

Washington, DC, September 26, 2001.

Hon. PATRICK J. LEAHY,

Chairman, Committee on the Judiciary,

U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1233, the Product Packaging

Protection Act of 2001.

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If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Lanette J. Walker, who

can be reached at 226–2860.

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

CONGRESSIONAL BUDGET OFFICE—COST ESTIMATE

S. 1233—Product Packaging Protection Act of 2001

CBO estimates that implementing S. 1233 would have no significant impact on the federal budget. Enacting S. 1233 could affect direct spending and receipts, so pay-as-you-go procedures would

apply to the bill; however, CBO estimates that any impact on direct

spending and receipts would not be significant. S. 1233 contains no

intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would have no impact on state,

local, or tribal governments.

S. 1233 would make it a federal crime to intentionally tamper

with a consumer product by placing writing on or inside the packaging of the product. Violators would be subject to imprisonment

and fines. As a result, the federal government would be able to pursue cases that it otherwise would not be able to prosecute. CBO expects that any increase in federal costs for law enforcement, court

proceedings, or prison operations would not be significant, however,

because of the small number of cases likely to be involved. Any additional costs to implement the bill would be subject to the availability of appropriated funds.

Because those prosecuted and convicted under the provisions of

S. 1233 could be subject to criminal fines, the federal government

might collect additional fines if the bill is enacted. Collections of

such fines are recorded in the budget as governmental receipts

(revenues), which are deposited in the Crime Victims Fund and

spent in subsequent years. CBO expects that any additional receipts and direct spending would be negligible.

The CBO staff contact for this estimate is Lanette J. Walker,

who can be reached at 226–2860. This estimate was approved by

Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

VII. REGULATORY IMPACT STATEMENT

In compliance with paragraph 11(b)(1), rule XXVI of the Standing Rules of the Senate, the Committee, after due consideration,

concludes that S. 1233 will not have significant regulatory impact.

(6)

VIII. CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing

Rules of the Senate, changes in existing law made by S. 1233, as

reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets, new matter is printed in italic, and

existing law in which no change is proposed is shown in roman:

UNITED STATES CODE

* * * * * * *

TITLE 18—CRIMES AND CRIMINAL

PROCEDURE

* * * * * * *

PART I—CRIMES

* * * * * * *

CHAPTER 65—MALICIOUS MISCHIEF

* * * * * * *

§ 1365. Tampering with consumer products

(a) Whoever, with reckless disregard for the risk that another

person will be placed in danger of death or bodily injury and under

circumstances manifesting extreme indifference to such risk,

tampers with any consumer product that affects interstate or foreign commerce, or the labeling of, or container for, any such product, or attempts to do so, shall—

* * * * * * *

(e) Whoever is a party to a conspiracy of two or more persons to

commit an offense under subsection (a) of this section, if any of the

parties intentionally engages in any conduct in furtherance of such

offense, shall be fined under this title or imprisoned not more than

ten years, or both.

(f)(1) Whoever, without the consent of the manufacturer, retailer,

or distributor, intentionally tampers with a consumer product that

is sold in interstate or foreign commerce by knowingly placing or inserting any writing in the consumer product, or in the container for

the consumer product, before the sale of the consumer product to

any consumer shall be fined under this title, imprisoned not more

than 3 years, or both.

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(2) In this subsection, the term ‘‘writing’’ means any form of representation or communication, including handbills, notices, or advertising, that contain letters, words, or pictorial representations.

ø(f)¿ (g) In addition to any other agency which has authority to

investigate violations of this section, the Food and Drug Administration and the Department of Agriculture, respectively, have authority to investigate violations of this section involving a consumer

product that is regulated by a provision of law such Administration

or Department, as the case may be, administers.

ø(g)¿ (h) As used in this section— (1) the term ‘‘consumer product’’ means— (A) any ‘‘food’’, ‘‘drug’’, ‘‘device’’, or ‘‘cosmetic’’, as those

terms are respectively defined in section 201 of the Federal

Food, Drug, and Cosmetic Act (21 U.S.C. 321); or

(B) any article, product, or commodity which is customarily produced or distributed for consumption by individuals, or use by individuals for purposes of personal care or

in the performance of services ordinarily rendered within

the household, and which is designed to be consumed or

expended in the course of such consumption or use;

* * * * * * *

Æ