Supply chain issues are a top concern for many companies across industries and markets. Please join Crowell & Moring for a webinar series that explores these issues and provides insights on the various legal and tactical considerations as companies think about supply chain disruption, impacts, and solutions.

Overview of Supply Chain 
Wednesday, November 17 at

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 GovernmentAs 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.
Continue Reading CPSC Insights – October 2021

Monday, October 18, 2021

Deceptive or Misleading Conduct & Protecting Older Consumers

  • The FTC issued its latest report to Congress on protecting older consumers, which highlights updated findings from the Commission’s fraud reports showing trends in how older adults report being affected by fraud with the most frequent type of fraud reported by older adults

Tuesday, October 5, 2021

Advertising and Marketing & Privacy and Security

  • The FTC approved a settlement with the operators of MoviePass over allegations that they took steps to block subscribers from using the service as advertised, while also failing to secure subscribers’ personal data. The FTC alleged that MoviePass Inc.—along with CEO Mitchell Lowe, and MoviePass’ parent company and its CEO, deceptively marketed its “one movie per day” service, then deployed deceptive tactics aimed at preventing subscribers from using the service as advertised —actions the FTC alleged violated both the FTC Act and the Restore Online Shoppers’ Confidence Act. The FTC also alleged MoviePass’s operators left a database containing large amounts of subscribers’ personal information unencrypted and exposed, leading to unauthorized access.


Continue Reading FTC Updates – October 2021

On October 13, President Biden issued a Fact Sheet entitled Biden Administration Efforts to Address Bottlenecks at Ports of Los Angeles and Long Beach, Moving Goods from Ship to Shelf to help address the “delays and congestion” across the transportation supply chain. As has been widely reported in recent weeks and months, the global supply chain has been hard hit by large increases in e-commerce and delays and shutdowns implemented to curb the spread of COVID-19. The release confirms public and private commitments to move goods more quickly and to secure the resiliency of American and global supply chains. To do so, the Biden Administration is focusing on the Ports of Los Angeles and Long Beach, which act as the ports of entry to the United States for 40% of containers received. The President, together with leadership from these ports, are undertaking a series of public and private commitments as noted below.
Continue Reading Biden Administration Works with Industry Stakeholders to Address Supply Chain Delays at the Ports of Los Angeles and Long Beach

On October 1, 2021, the California Department of Toxic Substances Control (“DTSC”) published a proposed regulation that would list Nail Products Containing Toluene as a Priority Pollutant under its Safer Consumer Products (“SCP”) program.

Comments will be accepted by the DTSC respecting the proposed regulation until November 18, 2021.

The proposed regulation is aimed specifically at nail salon workers as well as pregnant women and their fetuses, infants, children and adolescents.

The rationale behind DTSC taking this action at this time, in part, is that these populations, within the specific context of nail salons currently under consideration, are deemed “sensitive subpopulations” pursuant to 22 Cal. Code Regs. § 69501.1(a)(64), as well as comprising a significant percentage of persons of color and/or persons of lower socioeconomic status, as set forth in Cal. Gov’t Code 65040.12(e) (“Environmental Justice”).

The proposed regulation covers nail coatings and nail polish thinners, including an array of specific types of coatings, including solvent or UV base coating, top coating, lacquer, gel nail polish, hard gel, shellac, nail art paint, and nail polish thinner, and thus is quite comprehensive in scope.
Continue Reading DTSC Proposes Adding Toluene-Containing Nail Products To SCP Priority Pollutants

Here’s a brief review of key developments concerning the U.S. Consumer Product Safety Commission (“CPSC”) from the past month or so to help you stay aware of important product safety legislative and regulatory happenings.

Commissioner Elliot Kaye Departs the Commission.  In late August, Commissioner (and former Chairman) Elliot Kaye announced his departure from the agency to assume a senior position at Jose Andres’ World Central Kitchen.  Kaye, whose term had expired in October 2020, was serving in his “hold-over” year pending the confirmation of a new commissioner.  As a result of Kaye’s departure, there are currently two Republicans on the Commission (Dana Baiocco and Peter Feldman) and one Democrat—Acting Chairman Robert Adler.  This political dynamic, similar to when the Democrats held a majority of commissioner seats during the Trump Administration, has already caused some partisan maneuvering and angst at the agency (see Vote on FY22 Operations Plan story below).  However, this 2-1 split in favor of the Republicans will not last for long.  Read on!
Continue Reading CPSC Insights – September 2021

A new trend in false advertising lawsuits targets specific characterizing flavor claims on the labels of foods and beverages. For example, Frito-Lay was recently sued in California federal court alleging the company’s “Tostito’s Hint of Lime” tortilla chips falsely implies that natural lime is a primary flavoring ingredient and that consumers were misled by various misrepresentations of lime on the product packaging. Kellogg, Hershey, and Bimbo Bakeries were all sued because the “fudge” in their respective products allegedly are produced with vegetable oil substitutes instead of butter and milk, which the complaint alleges is known to consumers as the traditional way of making fudge.

Typically, in these false or misleading flavoring ingredient lawsuits, a plaintiff attempts to represent a class of consumers and alleges they were charged a premium price for the products because of the specific ingredient, based on the misleading representation.  The plaintiff generally must also allege that they would not have purchased the product in the first place if they had known that the specific ingredient was missing.

Continue Reading Despite the Pandemic, Food-Related False Advertising Lawsuits Continue to be Frequent Filers

Last month, U.S. Representative Grace Meng (D-NY) announced that she has reintroduced legislation—the Total Recall Act—to change the way that businesses notify the public about recalls.  The text of the legislation can be found here.

H.R. 3724, entitled the “Total Recall Act,” requires firms engaged in a product recall to post recall notices on their websites and all social media accounts, and also spend a defined amount of money on publicizing the recall depending upon whether it is mandatory or voluntary.  For a mandatory recall, which is an incredibly rare event, businesses would be required to expend a sum of money that equals at least 25% of what the firm spent on marketing the product prior to its recall.  On the other hand, for common voluntary recalls, firms would be required to use at least 25% of the product’s original marketing budget as well as 100% of the product’s social media marketing budget on publicizing the recall.  The bill would also mandate that the U.S. Consumer Product Safety Commission provide an annual report to Congress on participation rates for each recall.
Continue Reading Product Recall Notification Legislation Reintroduced in Congress