In December 2022, the U.S. District Court for the Eastern District of Michigan dismissed a putative class action against FCA US LLC on prudential mootness grounds because FCA announced a voluntary safety recall shortly after plaintiffs filed suit. Earlier this year, LG Energy Solution Michigan (“LG”) showed, yet again, how a voluntary recall can prove an effective defense to pending litigation.
After a pause in 2022, there has been much talk of the continuation, or resumption, of a wave of retail bankruptcy cases as we begin 2023. 2022 was highlighted by Revlon’s filing (discussed here: Revlon May Signal Another Wave of Retail Bankruptcies | Retail & Consumer Products Law Observer (retailconsumerproductslaw.com)). Revlon pointed to a number of issues that led to its filing, including most prominently, supply chain issues. Severe impediments in the supply chain – whether the inability to source product or the costs and delays in received goods — have been cited by many debtors since Revlon since as a leading cause of their distress. And it may get much worse before it gets better, particularly for companies that source, directly or indirectly, from China.
Continue Reading Continued Pain in the Retail Sector: Coming Enforcement of Forced Labor Laws
On Wednesday afternoon, CPSC Chairman Alexander Hoehn-Saric addressed the annual conference of the International Consumer Product Health and Safety Organization (ICPHSO) for the second time as chairman. In his remarks, Hoehn-Saric looked back on his first year as chairman, including the recent controversy over gas stoves, and shared some of the agency’s priorities moving forward. But the central theme of Hoehn-Saric’s remarks could not have been clearer— consumers are first in everything the agency does.
Continue Reading CPSC Chairman Addresses Gas Stoves and Other Issues at ICPHSO Conference
As the Biden Administration enters its third year, now with a party split in Congress, it seems likely that the Administration will redouble its focus on executive branch regulatory tools that can be used to achieve energy-related policy objectives, including with respect to energy efficiency and reducing carbon emissions. For manufacturers and importers of appliances and certain other consumer, lighting, plumbing and commercial and industrial products, that means the potential for additional scrutiny of their products’ compliance with the Department of Energy’s (DOE) conservation standards for energy and water efficiency. It also likely means a commensurate increase in DOE enforcement activity for non-compliance with the applicable efficiency standards or the associated test procedures required to demonstrate compliance, as well as registration and labeling requirements. Given the magnitude of the penalties associated with violating efficiency standards, currently $503 per violation, which can quickly run into multiple millions of dollars across noncompliant units, manufacturers and importers should consider refamiliarizing themselves with DOE’s conservation standards regime.
The U.S. Supreme Court is poised to clarify the extraterritorial reach of the Lanham Act for the first time in seventy years. The decision will impact corporations’ ability to seek damages for international trademark infringement, and may resolve a circuit split on the applicability of the Lanham Act on foreign defendants’ foreign conduct. The Court will review the Tenth Circuit’s decision in Abitron Austria GmbH et al. v. Hetronic International Inc. (“Hetronic”) and the extraterritoriality of the Lanham Act, seemingly the Court’s desired outcome after requesting the United States weigh in on Abitron Austria GmbH’s (“Abitron”) certiorari petition filed in January 2022.
Continue Reading U.S. Supreme Court to Decide the Extraterritorial Application of the Lanham Act
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?
Continue Reading CPSC Enforcement Trend: Unilateral Press Releases
Despite imposing onerous new compliance terms, the recently announced Vornado civil penalty was criticized by three commissioners as too low amid their urgent calls for larger penalties in the future. On July 7, the U.S. Consumer Product Safety Commission (CPSC) announced a $7.5 million civil penalty settlement with manufacturer of air circulation products, Vornado Air (Vornado). Vornado agreed to pay the civil penalty to resolve charges that the Company knowingly failed to immediately report allegedly defective electric space heaters to the CPSC under Section 15(b) of the Consumer Product Safety Act (CPSA). The Commission voted 4-0-1 to provisionally accept the settlement. Notably, three of the agency’s five commissioners published individual statements alongside the agency’s announcement of the penalty, which is atypical. The statements provide product safety stakeholders with insights on how the “new” Commission views civil penalties and its enforcement authority.
In the first half of 2022, manufacturers have been as busy as ever navigating recalled products and fielding the class action lawsuit that often (but do not always) follow.
CPAP Litigation Finds New Defendant
For the last year, Philips Respironics (“Philips”) has been inundated with lawsuits brought by consumers and medical device suppliers, over its CPAP and BiPAP breathing machines. And in more recent months, SoClean, a manufacturer of sanitation machines specifically designed to work with CPAP and BiPAP sleep apnea equipment, has been defending itself against a lawsuit of its own.
Continue Reading Recall Litigation Report: 2022 Mid-Year Recap
Earlier this week, President Biden signed the Safe Sleep for Babies Act into law. The new statute does two things. First, it bans infant inclined sleepers with an inclined sleep surface greater than ten degrees that are intended for infants up to age one. Second, it bans crib bumpers. When the Act takes effect in November, both products will be considered “banned hazardous products” under Section 8 of the Consumer Product Safety Act.
These infant products have also been the subject of recent rulemaking activity by the U.S. Consumer Product Safety Commission (CPSC). This sets up at least one potential conflict of law. Where the Safe Sleep for Babies Act bans infant inclined sleepers intended for infants up to age one, the CPSC rule affected only sleepers intended for infants up to 5 months old.
Continue Reading President Biden Signs Safe Sleep Act, Banning Infant Inclined Sleepers and Crib Bumpers
In the first episode of ACC Chicago’s It’s All Hearsay podcast, Crowell & Moring attorneys Preetha Chakrabarti and Josh Pond expanded upon their “Year of the Knock-Off” webinar. This discussion analyzed trends in counterfeit products, related business concerns, and strategies for countering counterfeits at the U.S. International Trade Commission.
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