Here’s a brief review of key developments concerning the U.S. Consumer Product Safety Commission (“CPSC”) from the past month to help you stay aware of important product safety legislative and regulatory happenings.
Gree Appliance Companies Plead Guilty to Felony Charge for Failure to Report; Indicted Executives Await Trial. In one of the most significant developments in product safety law over the past decade, Gree Electric Appliances Inc. of China, Hong Kong Gree Electric Appliances Sales Co. Ltd., and Gree USA Inc. (the “Gree Companies”), a global appliance manufacturer, have pleaded guilty to willfully failing to report to the CPSC under Section 15(b) of the Consumer Product Safety Act. According to the DOJ and CPSC, the Gree Companies knew their dehumidifiers were defective, failed to meet applicable safety standards, and could catch fire, but failed to report that information to the CPSC for months. Section 19 of the CPSA makes it unlawful to fail to furnish information required by Section 15(b), and that failure is subject to civil and criminal penalties. While CPSC civil penalties (or at least investigations) have become fairly routine—indeed, the Gree Companies paid a then-record $15.45 million civil penalty in 2016—this is the first corporate criminal enforcement action brought under the CPSA by the Government. As part of the Gree Companies’ plea agreement, they will pay a $91 million penalty. Two Gree executives have been charged criminally by the DOJ as well, and await trial, scheduled for March 2022. Stay tuned for a full analysis from the Crowell product safety team.
The CPSC Has a New Permanent Chairman – Alexander Hoehn-Saric. For the first time since February 2017, when then-Chairman Elliot Kaye stepped down, the CPSC has a permanent chairman. On October 7, 2021, the U.S. Senate confirmed Alexander Hoehn-Saric as Chairman (and Commissioner) of the CPSC by voice vote. The Commission will now have two Democrats (Hoehn-Saric and Adler) and two Republicans (Baiocco and Feldman). Based on his testimony to the Senate Commerce Committee during his confirmation hearing, and recent remarks to ICPHSO, we expect Hoehn-Saric to share similar political and regulatory philosophies as those of then-Acting Chairman Adler. You can read more about the new Chairman in our prior post about his confirmation.
Commissioner Adler Begins Holdover Year. Speaking of Commissioner Adler, his current term expired last week—on October 27. He now enters his “hold over” year. Under CPSC’s rules, a Commissioner may “hold over” for up to one year or until their replacement (in this case, Richard Trumka Jr.) is confirmed. Although Commissioner Adler announced plans to retire upon the completion of his current term, he’ll have to wait a bit longer before embarking on the next phase of life. The alternative would be for him to depart the agency now and hand a 2-1 majority back to Republican Commissioners Peter Feldman and Dana Baiocco—which is likely anathema to Adler in light of recent events surrounding the Commission’s FY22 Operating Plan. For more background and color on that controversy, see this article in the Washington Post by reporter Todd Frankel.
Confirmation Watch for Nominees Trumka Jr. and Boyle. The nomination of Richard Trumka Jr. to serve as commissioner is currently pending before the full Senate. Ms. Boyle’s nomination remains stuck in the Senate Commerce Committee. Although Boyle’s nomination has appeared twice on the Senate Commerce Committee’s agenda, it has not yet received full consideration—and statements from the Committee’s Republican Ranking Member, Sen. Roger Wicker (R-MS), indicate that there may be strong Republican opposition to the nomination.
CPSC Updates Infant Swing Safety Standard. Section 104 of the Consumer Product Safety Improvement Act of 2008 required the CPSC to develop mandatory safety standards for certain durable infant or toddler products. One such product was infant swings. Thus, in November 2012, the CPSC adopted a federal safety standard for infant swings that incorporated many provisions of voluntary standard ASTM F0288 related to design, labeling, and testing, among others. This past Thursday, the CPSC published a direct final rule to update the safety standard in light of recent changes made to ASTM F0288. According to the CPSC, the 2021 revision to the voluntary standard included some substantive changes to “improve clarity, provide consistent terminology, and harmonize wording and warning label requirements consistent with other juvenile product standards.” The rule is effective on January 29, 2022, unless CPSC receives a significant adverse comment by November 29, 2021. Relatedly, the Commission is currently in the process of updating its mandatory safety standard for carriages and strollers as well due to revisions to the ASTM voluntary standard.
Subtle Change to CPSC’s Recall Announcement Template. Product safety stakeholders may have noticed that over the past week or so, recall press releases issued by the CPSC and the recalling firm now include a direct link to the firm’s recall webpage—spelled out (e.g., www.company.com/productrecall). Previously, it was common to see firms provide a general website link with instructions to consumers to click on “RECALL” for more information. Presumably, this is a change sought by new CPSC Chairman Hoehn-Saric to improve recall effectiveness by taking one additional step out of the process for consumers to access the recall. Time will tell whether this change will, in fact, drive more consumers to take advantage of recalls, and increase participation rates, which have been low historically.
CPSC’s Work with Diverse Communities Continues; Report Shows African Americans Have Disproportionate Rate of Fire Deaths and Injuries. Earlier this year, in a keynote to ICPHSO’s annual product safety conference, then-Acting Chairman Robert Adler stated that the Commission “should take every opportunity to approach product safety from a variety of diverse viewpoints. For example: how might certain hazards exist for some vulnerable populations more than others? How might real-life barriers, like socio-economic status, affect our safety messages and peoples’ ability to respond to them? What methods can we use to reach marginalized and underserved communities?” Following-up on that very important message, earlier this month, the CPSC released a report entitled “2016 – 2018 Residential Fire Loss Estimates,” that found that although African Americans represent 13% of the U.S. population, they represent an estimated 24% of the home fire deaths and 27% of the home fire injuries. The Report contemplates actions that can be taken, including fire safety messaging to this constituency, to address this disparity.