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[Senate Report 107-106]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 152
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-106

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              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 product 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 hate-filled, 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.

                            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 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.
    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.

                     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

           *       *       *       *       *       *       *

Sec. 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.
    (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.
    [(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.
    [(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;

           *       *       *       *       *       *       *

                                  
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