Companies take note: over the past month or so, the U.S. Consumer Product Safety Commission (CPSC) has issued four unilateral press releases instructing consumers to stop using a product. Since May of this year, that number rises to seven. If that number does not seem high, consider this: between 2011 and 2019—a nine-year period—the agency issued two. So, what exactly is a “unilateral press release” and what does the agency’s issuance of four over recent weeks mean for you?
What is a Unilateral Press Release?
Typically, when a company wishes to recall a product or agrees to one upon request from the CPSC, the parties work collaboratively (even if begrudgingly) on a joint “voluntary” recall. The CPSC and firm reach an agreement on the nature of the recall and how it is to be effectuated, and then the recall is jointly publicized through various communications channels of the company and agency. This process essentially obviates the need for the CPSC to file an administrative complaint to obtain a judicial order mandating that the company recall the product or to engage in other enforcement related activity.
However, on occasion, the CPSC and a firm will not be able to reach agreement on the need for a product recall or the recall’s underlying details. In either case, the agency’s enabling statute, the Consumer Product Safety Act (CPSA) provides the agency with various arrows in its quiver to address the perceived underlying issue, such as filing an administrative complaint to determine whether a product poses a substantial product hazard or unreasonable risk of injury or death; taking action at the ports of entry in cooperation with Customs & Border Protection (CBP); or making a health and safety finding or imminent hazard determination as set forth in the statute under the agency’s emergency powers.
Although Congress has expressly provided the agency with such processes, which purposefully build in due process protections for firms, the CPSC rarely pursues any of these approaches likely because they are time consuming, costly, and largely inefficient. So, to circumvent these processes, from time-to-time, the agency engages in an end-run-around the statute’s enforcement mechanisms and relies on what is known as a “unilateral press release”—an announcement from the CPSC only warning consumers about an alleged product defect and/or hazard and typically instructing those consumers to stop using the product immediately. The unilateral press release stops just short of using the word “recall.” However, it has the same practical effect—if not worse.
While the Commission is required to afford subject firms the opportunity to comment on any draft unilateral press release to ensure fairness and accuracy pursuant to Section 6(b) of the CPSA, a unilateral press release can serve as the death knell of a product or company—likely why it has been sparingly used. It is for this reason that most companies try to avoid being on the receiving end of a unilateral press release and ultimately agree to conduct a voluntary recall.
What Does This Recent Flurry of Unilateral Press Releases Mean?
While the Commission has been known to threaten issuance of unilateral releases at least in part to convince firms to conduct joint voluntary recalls, their actual publication has been exceedingly rare—that is until now. This recent flurry of unilateral press releases seems entirely consistent with a more aggressive and empowered agency under Democratic control. In addition to issuing these four warning announcements over past weeks, the agency has also announced a $6 million civil penalty and settled administrative litigation that resulted in the requested recall.
Unfortunately, there is little that companies can do to stop the issuance of a unilateral press release short of seeking an injunction in federal court. And going to court likely means the draft press release enters the public record, defeating much of the purpose of the relief sought. For now, the agency is likely to continue using the threat of a unilateral press release as leverage for forcing recalls, and, where companies balk, issue them. Thus, we are likely seeing a new, or at least reinvigorated, enforcement practice. Industry members should take notice.