U.S. Consumer Product Safety Commission (CPSC)

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Do not assume a government shutdown means that reporting obligations at the CPSC are on hold. While the Commission’s staff designated as essential personnel are dedicated to protecting against substantial, immediate or “imminent threats to human safety” under the Commission’s shutdown directive[1], they will be reviewing reports to make that determination. The obligation to report is not suspended during the shutdown, even if there may be slower than normal response on matters that do not present an immediate threat. The filings are tracked by date and time electronically, and with 15 million in penalties at stake for failure to timely report, it is important not to confuse a partial shutdown of government operations with a stay on statutory obligations. There is no stay of the reporting obligations If you are a manufacturer, importer, distributor, and/or retailer of consumer products, you continue to have a legal obligation under the Consumer Product Safety Act (CPSA) and other statutes administered by the CPSC to report the following types of information to the CPSC:

  • A defective product that could create a substantial risk of injury to consumers;
  • A product that creates an unreasonable risk of serious injury or death;
  • A product that fails to comply with an applicable consumer product safety rule or with any other rule, regulation, standard, or ban under the CPSA or any other statute enforced by the CPSC;
  • An incident in which a child (regardless of age) chokes on a marble, small ball, latex balloon, or other small part contained in a toy or game and that, as a result of the incident, the child dies, suffers serious injury, ceases breathing for any length of time, or is treated by a medical professional; and
  • Certain settlements of lawsuits.

Notably, the government shutdown has no impact on the timely reporting of lawsuit settlements. The New Year brings a new time period for an additional and separate reporting requirement under Section 37 of the Consumer Product Safety Act. It requires manufacturers of consumer products to report information about settled or adjudicated lawsuits during specific 24-month periods. Specifically, companies are required to report when at least three civil actions filed in federal or state court involve the same model of a product and each suit alleges the product was involved in death or grievous bodily injury.  15 U.S.C. § 2084(a). The products at issue in the three cases must involve the same particular model, distinctive as to functional design, construction, warnings, and instructions, i.e. the characteristics that affect the product’s safety related performance.

The CPSC regulations define grievous bodily injury to include certain categories of injury, including, but not limited to:

  • Mutilation or disfigurement including permanent facial disfiguration or non-facial scarring that results in permanent restrictions in motion;
  • Dismemberment or amputation;
  • The loss of important bodily function or debilitating internal disorder such as the permanent injury to the loss of an organ, or blindness or permanent loss, to any degree, of vision.
  • Injuries requiring extended hospitalization, including in-patient care of 30 days in acute care facility or 60 days in a rehabilitation facility;
  • Severe burns or severe electrical shock.[2]

Section 37 sets forth specific statutory time periods within which three settlements involving the same product would trigger reporting. Each of the 24-month statutory periods begin every odd year.  For purposes of this analysis, the applicable statutory periods are:

  • January 1, 2015 – December 31, 2016;
  • January 1, 2017 – December 31, 2018; and starting now
  • January 1, 2019 – December 31, 2021.[3]

In addition to Section 37 reporting, lawsuits should be reviewed with an eye towards whether they contain information reportable under Section 15, such as if the allegations reasonably support the conclusion that a product contains a defect which could create a substantial product hazard or an unreasonable risk of injury. In-house counsel should keep these intersections in mind and make sure they bridge the gap between litigation and this regulatory reporting obligation.

It is a common tendency to think about product safety issues in separate buckets depending on whether they raise litigation or regulatory risks. But each should not be considered in isolation as they can overlap in various ways, including within the Consumer Product Safety Act.

 

[1] Order No. 0921.1

[2] 16 C.F. R. §1116.2

[3] See 15 U.S.C. § 2084(b); see also 16 C.F.R. § 1116.2(a); CPSC Recall Handbook at page 9 (found at https://www.cpsc.gov//PageFiles/106141/8002.pdf).

 

 

Join Us For A Complimentary Webinar – Thursday, October 25, 2018 – 12:00 – 1:00 PM ET

Two years into the Trump Administration and:

  • The Consumer Product Safety Commission finally has a Republican majority,
  • the Department of Transportation has released its 3.0 guidance on autonomous vehicles,
  • NIST has published a 375 page recommendation on medical device security,
  • the FTC is holding a series of hearings on the transformative nature of the digital transformation on markets.
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What does all this activity in the United States mean for companies following the rapidly evolving regulations globally related to the safety and security of products?

This PLAC webinar will describe the current landscape at the federal agencies setting policy for product safety and security. With all the recent talk of regulatory humility in the face of great technological change, we’ll discuss whether regulators practice what they preach and if recent actions encourage or stifle innovation. Our session will compare and contrast activities across the federal government relevant to consumer products broadly defined with a particular focus on product safety and security.

Presenters:

Cheryl Falvey, Partner, Crowell & Moring, Washington, DC
John Fuson, Partner, Crowell & Moring, Washington, DC
Peter Miller, Senior CounselCrowell & Moring, Washington, DC

Please click here to register for this webinar.

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Earlier this summer, President Trump nominated Republican Peter Feldman to serve as the fifth commissioner on the U.S. Consumer Product Safety Commission (CPSC). The Senate has now confirmed Mr. Feldman to both (1) serve out the remainder of former Commissioner Joe Mohorovic’s term, which expires in October 2019; and (2) serve a seven-year term beginning in October 2019.

Significantly, the confirmation of Mr. Feldman gives the Republicans their first majority control of the Commission in nearly twelve years, and presents an opportunity for Acting Chairman Ann Marie Buerkle to further move the agency in a direction that reflects her regulatory priorities, as well as those of the Administration. Notably, the Commission will soon consider its FY 2019 operating plan which sets the agency’s agenda for the coming year.

Interestingly, the Senate voted 80-19 to confirm Mr. Feldman to serve out the remainder of former Commissioner Mohorovic’s term. However, on the following day when it came to vote on Mr. Feldman’s own seven-year term that would start in October 2019, the Senate split along strictly partisan lines confirming Feldman by a slim 51-49 majority. Some had argued that since Mr. Feldman’s “new” term would not begin until 2019, the next Senate should take up the nomination after the midterm elections.

Mr. Feldman is well-known among the product safety community. Having served as legal counsel to Senator John Thune (R-SD) at the Senate Committee on Commerce, Science, and Transportation since 2011, he is experienced and well-versed in consumer product safety law and the activities of the Commission.

The CPSC released the following statement upon Mr. Feldman’s confirmation including this quote from Mr. Feldman himself:

“I believe strongly in the mission of the agency because American consumers have every right to expect that the products they purchase will be safe and will not pose an unreasonable risk of injury to themselves or their families,” Feldman said. “CPSC’s safety work is critical, particularly when it comes to protecting our most vulnerable populations. I look forward to advancing these agency priorities while ensuring fairness in the execution of its duties.”

We look forward to working with Commissioner Feldman in the years ahead and congratulate him on his confirmation.