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.
Here’s a brief review of three 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.
The CPSC Has a New Commissioner. On November 16, the United States Senate confirmed Richard Trumka Jr. to a seven-year term on the Commission by voice vote. Mr. Trumka Jr. will replace long-time Commissioner Robert Adler whose term expired last month. Importantly, with Mr. Trumka Jr.’s confirmation, the Commission will remain comprised of two Democratic (Hoehn-Saric and Trumka Jr.) and two Republican (Baiocco and Feldman) Commissioners. The Democrats will not have a majority on the Commission until current Biden nominee (and CPSC Executive Director) Mary Boyle is confirmed by the Senate—and the status of that nomination remains unclear. Ms. Boyle’s nomination is not on the Senate Commerce Committee’s “Nominations Hearing” agenda for December 1. You can read more about Mr. Trumka Jr.’s confirmation in our prior post about his confirmation.
Continue Reading CPSC Insights – November 2021
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
Last week, the U.S. Consumer Product Safety Commission announced that Home Depot U.S.A., Inc. has entered into a settlement agreement with the agency to resolve allegations that the retailer knowingly sold and distributed recalled consumer products over a four year period. The Company will pay a civil penalty of $5.7 million. This penalty is significant because it involves claims against a retailer who allegedly sold recalled products in violation of Section 19(a)(2)(B) of the Consumer Product Safety Act which makes it unlawful to sell a recalled product – and not the more typical “failure to timely report” claims against a manufacturer under Section 19(a)(4). This penalty is just the third such penalty in recent years (see Meijer 2014 civil penalty and Best Buy 2016 civil penalty).
CPSC Reaches Civil Penalty Agreement with Viking Range and Middleby Corporation; Firms to Pay $4.65 Million to Resolve Late Reporting Allegations Over Defective Gas Ranges
The U.S. Consumer Product Safety Commission (CPSC) has announced a civil penalty settlement with Viking Range, LLC of Greenwood, Mississippi and its parent company, The Middleby Corporation of Elgin, Illinois. The companies have agreed to pay a civil penalty of $4.65 million to resolve charges that they knowingly failed to immediately report allegedly defective gas ranges to the Commission under Section 15(b) of the Consumer Product Safety Act (CPSA). This civil penalty, the second of 2017, follows the Commission’s $5.8 million civil penalty levied against Keurig Green Mountain in February. Both penalties underscore that the Commission’s general approach to civil penalties, and desire to increase the amount of penalties imposed for violations, will not change overnight with new agency leadership. Indeed, the Acting Chairman actually voted against the settlement agreement, proposing instead an amendment to reduce the amount of the civil penalty to $2 million.