Increased product safety comes after CPSC is put in the hot seat

While recalls under the Consumer Product Safety Commission (CPSC) have fallen to their lowest level in 16 years, recently there has been a push for tougher regulations. Several high-profile safety issues in 2019 generated a great deal of attention and concern amongst the public. This in turn caused scrutiny and criticism of the CPSC for the way it addressed safety concerns of two popular baby products, the Fisher-Price Rock n’Play inclined sleeper and the Britax BOB jogging stroller. In April 2019, reports emerged that Britax, a U.K.-based manufacturer, avoided recalling a line of dangerous jogging strollers by politically gaming the CPSC. Even after countless incidents of product malfunctions that led to serious injuries, these strollers remained on the market. A second hazardous U.S. product, the Rock n’Play Sleeper, was finally recalled after being tied to 30 infant fatalities.

An investigation was launched by the Senate to evaluate how the CPSC responded to safety problems with certain products, including the Britax jogging stroller and the Fisher-Price incline sleeper. Their report criticized the agency for offering what it called “inadequate remedies” for consumers who bought defective products, saying some were “incentive programs to bring the companies involved in the recalls more business.”

The intense scrutiny of these cases resulted in the appointment of a new acting chairman of the CPSC, and greater pressure on the regulatory agency to increase oversight and regulations that will assure the public safety of all consumer products sold in the U.S. Under the new direction of Robert Adler, there are signs the CPSC plans a more aggressive approach to companies selling potentially unsafe products.

CPSC implementing new tactics to decrease companies’ recall leverage

CPSC recalls have almost always been voluntary. If a company refuses to recall, the agency can file a lawsuit, but have rarely taken this step. However, with the agency in new hands, it is trying a different tactic to force the hand of reluctant companies. In early January 2020, the CPSC issued a rare product safety alert that made it clear the agency wanted the product taken off the market. The warning said a four-drawer dresser by Hodedah was a tip-over risk and that the CPSC intended to continue pressing the company for the recall. The notice was unusual because it acknowledged the agency and company disagreed about the need for the recall. Negotiations over recalls normally are not revealed to the public and often give companies considerable leverage.

This type of safety alert is known as “unilateral” inside the CPSC because it’s one of the few ways for regulators to take action without a company’s permission. According to a senior agency CPSC official, “this technique is rarely used—the last one was in 2011 for a baby high chair that clamped to a table.” Thankfully, the new safety alert worked with the company agreeing to a formal recall three months after the alert.

Over 10 years since the last big push for tougher CPSC regulations

The last time there was a push for tougher CPSC regulations was over ten years ago with the implementation of the Consumer Product Safety Improvement Act of 2008 (CPSIA), which was the most comprehensive overhaul of product safety laws since the creation of the Consumer Product Safety Commission in 1972.  CPSIA included several provisions such as import-export safety requirements, whistleblower protections, and mandatory certifications and testing, but one of the most significant aspects of CPSIA was the significant increase in civil penalties.  As a result of the Consumer Product Safety Improvement Act of 2008 the maximum civil penalty the CPSC can impose increased from $8,000 per violation with a maximum penalty of $1,825,000 to $100,000 per violation with a maximum penalty of $15,000,000. On January 1, 2017, as calculated in accordance with the amendments under CPSIA, the new amounts increased again to $110,000 for each violation and $16,025,000 for any related series of violations.

New CPSC leadership pushes for maximum civil and criminal penalties

As with the unilateral product safety alert issued against Hodedah in January, there are signs the new CPSC leadership will not hesitate to impose maximum civil and criminal penalties allowed under CPSIA.  Alder has stated that “I’ve been open about my desire to have the agency serve as a more vocal watchdog for consumers, and I hope that we can get there in the near future.” 

The more aggressive approach under the new acting chairman and the pressure to increase oversight, combined with the significant increase in fines over the past several years, could pose serious challenges for companies that do not have processes and procedures in place to know when to report a potential product defect to CPSC, or do not understand their reporting obligations under the law.

Resources:

Todd C. Frankel, “Product Recalls Under Trump Fall to Lowest Level in 16 Years, but New Signs Emerge of a Tougher Regulator”, The Washington Post, Jan. 13, 2020

Todd C. Frankel, “Senate Report Faults Safety Commission for Failures Related to Dangerous Baby Products, Elevators”, The Washington Post, Dec. 18, 2019

CPSC Civil Penalties; Notice of Adjusted Maximum Amounts“, Federal Register, November 23, 2016

Disclaimer: Berkley Global Product Recall is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness.