President Bush signed legislation on August 3, 2007, allowing the U.S. Consumer Product Safety Commission (“CPSC”) to regain its full authority to oversee the safety of thousands of consumer products. The CPSC has had a vacancy for about a year since the resignation of Chairman Harold (“Hal”) Stratton and has lacked the requisite three-member quorum to officially meet and take action, including ordering mandatory recalls, adopting safety rules or assessing civil penalties. The legislation extends the CPSC’s full authority for a period of six months.
According to The Washington Post (“Lawmakers Return Clout to Safety Commission,” August 4, 2007, D-2), Senator Mark Pryor (D-Ark.) “pushed the amendment [tacked onto a homeland security bill] to restore the commission’s full power after a spate of product recalls, including several involving imports from China.” The Post reported Pryor stating that “[w]hat we have here is an agency in distress.”
Recent recalls involving an unprecedented number of imports from China have received significant attention in the print and broadcast media. In June RC2 Corp. of Oak Brook, Illinois, recalled about 1.5 million toy trains manufactured in China because of lead paint content. Last week Mattel recalled over 8 million toys manufactured in China due to either lead paint content or small magnets coming loose from the toys, which could be ingested or aspirated by children.
On the litigation front, the CPSC recently announced the filing of United States of America v. Ardisam Inc. alleging that the company located in Cumberland, Wisconsin, failed to timely report information that its hunting tree stands could present a safety hazard to consumers. The lawsuit, seeking civil penalties of up to $1,650,000 for each alleged violation or series of violations, is being prosecuted by the U.S. Department of Justice, Consumer Litigation Division, on behalf of the CPSC. Acting Chairman Nancy Nord (a President Bush appointee) said that “[t]he law is clear – companies must immediately tell the CPSC about products that could pose a substantial risk or create an unreasonable risk of serious injury or death.”
Earlier this year (March 9) the CPSC announced a $975,000 civil penalty settlement with Fisher-Price, resolving allegations that the company was late in notifying the agency that ringed nail fasteners could disengage from a toy. The settlement order (Fisher Price, Inc. - Settlement Agreement & Order) sets forth the allegations and the company’s response as reported in the Federal Register.
The legislated authority, colossal recalls, prosecution of a federal case for penalties and announcement of a civil penalty just shy of $1 million have substantially heightened the profile – and perhaps scrutiny – of the agency, which seldom finds itself in front-page reports of the nation’s leading newspapers.
In this environment it bears repeating that Section 15(b) of the Consumer Product Safety Act requires manufacturers, importers and retailers to notify the CPSC “immediately” upon receiving information that “reasonably supports the conclusion” that a product (a) “contains a defect which could create a substantial product hazard” or (b) “creates an unreasonable risk of serious injury or death.” Manufacturers, retailers, distributors and importers subject to the CPSC’s jurisdiction could face civil penalties of up to $1.8 million if the CPSC concludes that the company did not notify the agency of a potential safety issue or did not do so in a timely fashion.
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