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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

For the first time since February 2017, when then-Chairman Elliot Kaye stepped down as leader of the agency, the United States Consumer Product Safety Commission (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. Hoehn-Saric’s confirmation comes on the heels of some partisan wrangling at the Commission during which Republican Commissioners Dana Baiocco and Peter Feldman successfully amended the Commission’s FY22 Operating Plan by a 2-1 vote over the strong opposition of then-Acting (Democratic) Chairman Robert Adler. Given Adler’s plea following that vote for the (Democrat-held) Senate to confirm the pending nominations of Hoehn-Saric, and Richard Trumka Jr., and Mary Boyle, President Biden’s two other recent nominees, Hoehn-Saric’s swift confirmation was likely no coincidence.
Continue Reading Senate Confirms Hoehn-Saric as Chairman of CPSC

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

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

The July 4th holiday weekend started a tad late for those of us who practice in the field of consumer product safety.  Late Friday afternoon, the White House announced that President Biden has nominated two new commissioners to serve on the U.S. Consumer Product Safety Commission (CPSC)—Alexander Hoehn-Saric and Mary Boyle.  Both are Democrats and, once confirmed, will shift the balance of power at the Commission to a 3-2 split between Democrats and Republicans.  This development is significant to say the least—the Democrats have not held three seats on the Commission since May 2018 and there has not been a permanent chairman of the agency since President Trump removed then-Chairman (and now Commissioner) Elliot Kaye in February 2017.

If confirmed, Mr. Hoehn-Saric will become the new—permanent—chairman of the Commission, while Ms. Boyle will replace Commissioner Kaye who is currently serving in his “hold-over” year as his term expired last October.  Current Acting Chairman Robert Adler will remain on the Commission as the third Democratic commissioner until his term expires in October and he retires from the agency as previously announced.  These three will be joined by current Republican Commissioners Peter Feldman and Dana Baiocco to give the five-member Commission a full complement of commissioners.  Of course, if these nominations stall and/or current members of the Commission depart the agency in the coming months (e.g., Adler), other possibilities with respect to the balance of power are conceivable.
Continue Reading Breaking: Hoehn-Saric and Boyle Nominated to CPSC; Democratic Majority in Sight

Could the end of Section 6(b) of the Consumer Product Safety Act (CPSA) actually be near?  Time will tell.  But last week’s development on Capitol Hill in the saga of “Section 6(b)” is noteworthy, and, one day in the not-so-distant future, may be recognized as the beginning of the end for this controversial provision of the law.

On April 22, Senator Richard Blumenthal (D-CT) and Representatives Jan Schakowsky (D-IL) and Bobby Rush (D-IL) introduced legislation—the Sunshine in Product Safety Act—to fully repeal Section 6(b) of the CPSA.  This is the first time in recent memory that Members of Congress have introduced legislation to do away with Section 6(b) altogether.  For example, in the last Congress, Representative Rush introduced the “SHARE Act,” which sought primarily to scale back one of Section 6(b)’s most important protections for firms—allowing a company to judicially challenge the U.S. Consumer Product Safety Commission’s (“CPSC” or “the Commission”) decision to release information about a firm, or one of its products, prior to its disclosure.  But that legislation left the rest of Section 6(b)’s procedures and protections intact.  This current bill, therefore, is much more ambitious, and stakeholders should take note.

By way of background, Section 6(b) requires the CPSC to engage in certain procedural steps before publicly disclosing information from which the identity of a manufacturer of a product can be readily ascertained.  Those include taking reasonable steps to ensure that the information to be disclosed publicly is fair, accurate, and reasonable related to effectuating the purpose of the product safety laws.  Practically speaking, this means notifying the manufacturer of the potential disclosure, providing either a summary of what the agency intends to disclose, or the actual disclosure itself, and providing the company with the opportunity to comment, typically 15 days, though that time period can be shortened by the CPSC with a “public health and safety finding.”  Other regulators, like FDA and NHTSA, do not have similar statutory constraints on the release of product information nor do they have due process protections around data release, whether those be adverse events or vehicle accidents.
Continue Reading New Bills Seek to Repeal Controversial Provision of Product Safety Act

This past Wednesday, Robert Adler, Acting Chairman of the U.S. Consumer Product Safety Commission (CPSC), delivered a keynote address at the annual conference of the International Consumer Product Health and Safety Organization (ICPHSO).  In his final remarks to the conference as leader of the agency, Adler confirmed what many have suspected over recent

The U.S. Consumer Product Safety Commission (CPSC) has announced a civil penalty settlement with exercise equipment manufacturer Cybex International (Cybex).  Cybex has agreed to pay a civil penalty of $7.95 million to resolve charges that it knowingly failed to immediately report allegedly defectiveto the CPSC under Section 15(b) of the Consumer Product Safety Act.  This civil penalty, already the second of 2021, underscores a material change in enforcement approach from the past two years, in which the Commission did not announce a single civil penalty for violations of the product safety laws.

In this case, CPSC staff alleged that Cybex failed to report immediately to the Commission that it had information which reasonably supported the conclusion that components of certain pieces of its gym equipment—arm curl and press machines—could detach or fall causing severe injury to the user, including eye loss, spinal fracture, and in one case paralysis.  The Commission voted 3-0-1 to provisionally accept the settlement. We encourage our readers to review the settlement agreement here to learn more about the factual background.
Continue Reading Cybex Civil Penalty at CPSC Confirms Return of Enforcement Tool

Over recent years, the use of lithium ion batteries has become widespread in consumer products such as laptops, smartphone, hoverboards, electric scooters and bicycles, and power banks.  Unfortunately, many companies have been forced to recall their products over thermal events involving those products’ lithium ion batteries.

Manufacturers can mitigate their risks of fire hazards with

Rideshare bicycles and scooters have become increasingly ubiquitous in cities across the United States over the past few years.  While many rideshare bicycles are conventional, others feature pedal-assist technology and are commonly referred to as “electric bicycles” or “e-bikes.”  As for scooters, electric versions are offered to consumers by rapidly growing micromobility companies such as Lime and Bird.  Given the increasing popularity and expansion of these rideshare vehicles across the country, we provide a brief overview of the regulatory landscape that ensures the safety of these products.

Bicycles

In 1972, the Congress established the U.S. Consumer Product Safety Commission (CPSC) to regulate the safety of consumer products at the federal level.  One of the first products to be regulated by the Commission was bicycles.  In 1978, the CPSC promulgated its first rules regulating traditional human powered bicycles (16 CFR part 1512) with the goal of establishing requirements for their assembly, braking, and structural integrity.  It was not until twenty-five years later, in 2003, that the Commission, pursuant to an act of Congress, updated the federal safety standard for bicycles to include low-speed electric bicycles.  Thus, electric bicycles, including most of those used for ridesharing purposes, are regulated by the CPSC and must comply with the mandatory federal safety standard for bicycles at 16 CFR part 1512.

Continue Reading Product Safety Regulations for Electric Bikes and Scooters