On May 5, 2023, the U.S. Consumer Product Safety Commission (“CPSC”) announced that it agreed to a civil penalty settlement with Generac Power Systems, Inc., (“Generac”) to resolve charges that Generac failed to report immediately to the CPSC under Section 15(b) of the Consumer Product Safety Act (“CPSA”). Specifically, the CPSC alleged that certain models of Generac’s portable generators contained a defect that could create a substantial product hazard and unreasonable risk of serious injury to consumers. This settlement includes a $15,800,000 civil penalty, and requirements that Generac (1) implement and maintain a compliance program and system of internal controls and procedures designed to ensure compliance with the CPSA; and (2) file annual reports with the agency for the next three years regarding the Company’s compliance program, internal controls and procedures, internal audits of the effectiveness of the new compliance program and internal controls.
Last Thursday, April 6, the Department of Justice (DOJ) and Consumer Product Safety Commission (CPSC) sued SunSetter Products LP (SunSetter) in a Massachusetts federal court in a rare civil penalty lawsuit. SunSetter manufactures motorized retractable awnings for outdoor use. The Government alleges in its complaint that SunSetter knowingly failed to timely report under Section 15(b) of the Consumer Product Safety Act (CPSA) a hazardous defect related to vinyl covers for its retractable awnings. The complaint seeks permanent injunctive relief, including a third-party monitorship over the company, and civil penalties.…
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?…
Recalls in Review: A monthly spotlight on the trending regulatory enforcement issues at the CPSC.
As children head back to the classroom this Fall, the CPSC issued a news release reminding parents to “Think Safety First” as kids return to schools. Recognizing that many back-to-school shopping carts also include new clothes and pajamas, we look back at CPSC regulatory actions involving Children’s Sleepwear in this month’s installment of “Recalls in Review.”
The Consumer Product Safety Commission has regulated the flammability of children’s sleepwear since at least the 1970s. In addition to other safety standards imposed on children’s products, children’s sleepwear is governed by Federal Safety Standards for the Flammability of Children’s Sleepwear based on sizing of the garments (16 CFR Part 1615 and 16 CFR Part 1616). The regulations apply to any product of wearing apparel, such as nightgowns, pajamas, or similar or related items, such as robes, that is intended to be worn primarily for sleeping or activities related to sleeping. Specific items—including diapers, underwear, and certain infant tight-fitting garments—are exempted from the definition of children’s sleepwear.
The CPSC began monitoring the safety of children’s sleepwear more closely in 2011. At least 82 recalls of children’s sleepwear have been conducted since 2001, with 77 of those recalls occurring after 2010. Only a handful of related recalls were conducted prior to 2001. However, at least 11 civil penalties relating to children’s sleepwear were issued between 1980 and 2001, with somewhat dated fines ranging from $3,500 to $850,000.
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
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
Recalls in Review: A monthly spotlight on trending regulatory enforcement issues at the CPSC.
As winter temperatures continue to drop and we’re all looking for a way to feel cozy, many Americans reach for candles as a way to bring some light into their homes during these dark months. We don’t need to detail why…
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).
The U.S. Department of Justice and Consumer Product Safety Commission recently announced that they had entered into consent decrees with three New York-based toy companies and five individuals for importing and selling products that violate the Federal Hazardous Substances Act and the Consumer Product Safety Act. The consent decrees enter permanent injunctions against the companies from importing and selling toys until certain remedial actions are implemented and monitored by the CPSC. The decrees can be read here and here.
The DOJ and CPSC alleged that the individuals and companies – Everbright Trading Inc., Lily Popular Varieties & Gifts Inc., and Great Great Corporation – imported and sold numerous children’s toys and products that contained high levels lead content, lead paint, and phthalates; contained small parts; and violated the mandatory toy safety standard (ASTM F-963), bicycle helmet safety standard, and labeling of art material (LHAMA) requirements.
Earlier this month, the Consumer Product Safety Commission in tandem with the Department of Justice withdrew its “material misrepresentation” claim in its ongoing lawsuit against arts and crafts retailer Michaels Stores. The Government had alleged, inter alia, that Michaels made a material misrepresentation to the agency in its Section 15(b) Report for certain glass vases that shattered during normal handling. The Government’s withdrawal of this claim raises interesting questions as to what constitutes a “material misrepresentation” – in this case to the CPSC – and why the claim was withdrawn.