CPSC Enforcement Actions

We do not get many court decisions in the CPSC world, but yesterday we received one.  Last evening, a Wisconsin federal district court essentially held in the Government’s case against Spectrum Brands, Inc. (Spectrum) that (1) Spectrum failed to timely report defective coffee pots in violation of Section 15(b) of the Consumer Product Safety Act (CPSA) because they could create a substantial product hazard, and (2) the Government’s imposition of a civil penalty pursuant to the CPSA was not in violation of Spectrum’s statutory or constitutional due process rights.  In doing so, the Court rejected Spectrum’s procedural and substantive arguments, including that the CPSC’s claims were time barred and that the CPSA’s reporting requirements are unconstitutionally vague.

The Department of Justice and CPSC alleged that a company acquired by Spectrum (Applica Consumer Products) knowingly failed to timely report under Section 15(b) of the CPSA a hazardous defect relating to certain coffee pot handles.  The Complaint alleged that the Company had received approximately 1,600 consumer complaints over a four year period (2008-2012) related to the breakage of the pots’ handle resulting in coffee spillage and burns on consumers.

In response to the filing of the lawsuit, Spectrum asserted, among other arguments, that (1) the Commission’s claims against it were time barred under the so-called Gabelli doctrine; (2) the CPSA’s reporting requirements are unconstitutionally vague; (3) the CPSC failed to provide fair notice that a report was required in light of its finding that other Spectrum coffeemakers with similar issues did not present a substantial product hazard; (4) the CPSC’s late-reporting determination was arbitrary and capricious; (5) Spectrum had no duty to report because the CPSC had already been “adequately informed” of the handle failures and (6) the CPSA did not authorize the CPSC to seek certain forms of injunctive relief including the establishment of a compliance program and prospective liquidated damages in the event of noncompliance.

coffee-pot-cpscThe Court rejected all of these arguments and handed almost a total victory to the CPSC that may have future ramifications in the product safety community.  For example, the decision certainly lends new credence to the CPSC’s common refrain to regulated entities “when in doubt, report” when deciding whether a product defect could present a substantial product hazard.  The Court even went so far as to cite this common CPSC advice in the opinion.  It’s also noteworthy that the Court concluded that the CPSC does not need to articulate its reasoning for a civil penalty amount in writing and provide more transparency in the process generally­­­—a complaint often raised by industry defendants.

Continue Reading BREAKING: COURT RULES POSITIVELY FOR CPSC IN FEDERAL CIVIL PENALTY CASE AGAINST SPECTRUM BRANDS

On Tuesday, the U.S. Consumer Product Safety Commission (CPSC) announced that Best Buy Co., Inc. entered into a settlement agreement with the CPSC to pay a $3.8 million civil penalty to resolve allegations that it “knowingly sold, offered for sale, and distributed in commerce recalled consumer products.”  This civil penalty is significant because the alleged violation of the Consumer Product Safety Act (CPSA) had nothing to do with timely reporting under Section 15(b)—the usual suspect in civil penalty cases.  Rather, the allegation against Best Buy is that it violated CPSA Section 19, which prohibits the sale, distribution, or importation of any product that has been recalled.

This penalty is just the second such penalty in recent years (see Meijer 2014 civil penalty).  In a tweet commenting on the penalty and noting the reason for it, CPSC spokesman Scott Wolfson said “[The] challenge is great enough to get recalled products out of homes.  We need retailers to keep them out of their stores.”

Scott_Wolfson_US_CPSC_Tweet_Best_Buy

The CPSC alleged here that Best Buy knowingly sold and distributed sixteen different recalled products between 2010 and 2015, including washing machines and dryers, ovens, televisions, surge protectors, computers and other electronics.  Notably, according to the CPSC’s allegations, sales of recalled products continued even after Best Buy had told the Commission that measures were put in place to catch such products and reduce the risk of sales of recalled products.

Importantly, the CPSC imposed the penalty and highlighted in its press release that internal logistics issues caused the sale of the recalled products. Specifically, the CPSC alleged “Best Buy, in some cases, failed to permanently block product codes due to inaccurate information that signaled that the recalled product was not in inventory.  At other times, the blocked codes were reactivated prematurely, and in a few cases, overridden.”

In a complicated and massive supply chain, these issues are not unheard of.  However, where such issues lead to the sale of recalled products, the CPSC is clearly not accepting them as excuses or defenses, and will not hesitate imposing a hefty civil penalty.

In response to the civil penalty announcement, Best Buy stated the following: “We regret that any products within the scope of a recall were not removed entirely from our shelves and online channels.  While the number of items accidentally sold was small, even one was too many.  We have taken steps—in cooperation with the CPSC—to help prevent these issues from reoccurring.”

Along with paying the $3.8 million civil penalty, Best Buy has agreed to maintain a product safety compliance program with the common program elements we have seen in recent timeliness penalties to ensure that the Company complies with product safety standards and regulations enforced by the Commission.  Not surprisingly, the compliance program also contains elements related to the “appropriate disposition of recalled goods,” and management and oversight of that program.

As we frequently advise, companies in the consumer products arena should remain mindful of and attentive to their obligations under the Consumer Product Safety Act—not just Section 15(b) reporting (as that, deservedly, receives a lot of attention)—but also to the CPSA’s many other requirements and prohibitions, including the prohibition on the resale of recalled products.

This civil penalty is a good reminder that companies, large or small, must have robust procedures in place to identify and set aside recalled products whether on the shelves, in inventory, or otherwise, and to control all supply channels to prevent this from happening.

 

 

 

Yesterday, CPSC Chairman Elliot Kaye and Commissioner Robert Adler issued a lengthy joint statement vigorously defending the Commission’s current approach to civil penalties against various criticisms voiced by Commissioners Joe Mohorovic and Ann Marie Buerkle as well as stakeholders in the business community.  Their overarching message: such criticisms are without merit and are, in reality, a call for lesser penalties; there will be no change in the Commission’s current approach.

Over the past few months, we have written extensively about the Commission’s approach to seeking civil penalties against companies for failure to report violations—and the ongoing debate surrounding that process.  Chuck Samuels even testified on the subject last month at the CPSC’s Annual Priorities Hearing (watch here).

According to Kaye and Adler, “agency critics have urged an enormous undertaking by the Commission to prioritize exploring and redesigning its civil penalty system, effectively displacing work intended to save lives and prevent injuries.”  They expressed disappointment at the “distortion” of Chairman Kaye’s remarks at the ICPHSO conference last year, and pushed back at the idea that the Commission somehow operates without transparency when assessing civil penalties.  Specifically, Kaye and Adler assert the following points in their joint statement against the common civil penalty criticisms:

  • critics of the Commission’s current policy want more information shared related to the facts and factors that enter civil penalty valuations, but hamstring the agency in doing so by seeking (or supporting) stringent Section 6(b) confidentiality protections;
  • there is ample regulatory guidance to determine when to file a Section 15(b) report;
  • both the Commission and companies need flexibility when negotiating a civil penalty settlement, thus counseling against a matrix or formulaic approach to applying the civil penalty factors;
  • companies are afforded full due process protections and procedures when the Commission seeks civil penalties including the opportunity to be heard; and
  • the Commission carefully tracks the information available to firms at each and every step in time and does not rely on hindsight regarding companies’ obligation to file.

While many could find much to dispute in the joint statement, the Commission’s majority has made their view clear.

Companies should take a very close read of this policy statement.  It is now evident that the Commission will not change—or even revisit—its current approach to civil penalties in the coming fiscal year, as urged by some stakeholders in the product safety community.  Barring a change in CPSC personnel, Congressional action, or judicial involvement through the litigation process, the ongoing “debate” over civil penalties has effectively ended for now.

Today the U.S. Consumer Product Safety Commission (“CPSC”) and Health Canada announced a massive joint recall with IKEA involving over 35 million pieces of furniture that can pose a tip over hazard to small children. While we would normally write about the recall itself, a troubling development has caught our attention.  A CPSC employee prematurely leaked the recall to staff reporter Tricia Nadolny at the Philadelphia Inquirer.

The CPSC and IKEA officially announced the recall this morning, but the Philadelphia Inquirer prematurely broke the story yesterday afternoon. The reporter confirmed in the story that her source works for the CPSC and did not have clearance to discuss the recall publicly. Additionally, the story included quotes from consumer advocates and other interested parties reacting to the recall—indicating that the reporter had the information for a decent amount of time prior to publishing the story.

After the Inquirer article was published, multiple other media outlets began reporting the recall. This likely put IKEA (and the CPSC) in an incredibly difficult situation of having to quickly make decisions about the release of information about the recall. For companies and legal counsel negotiating a recall—especially one of this magnitude—this is a nightmare scenario.

Even if a company has a contingency plan in the event a recall is leaked early (something we usually recommend for higher profile recalls), the carefully negotiated messaging and CPSC agreed rollout of the recall will have been thrown out the window and replaced by the leaked information. The company will be forced to scramble to respond to media questions while also not spoiling the originally planned announcement.

Additionally, and even more problematic, consumers who may have recalled units will start calling and emailing the company before they know the company’s official 800 number to call and before the company has sufficient staff to start fielding those calls. With over 29 million units involved in this specific recall, that could add up to quite a lot of phone calls and emails.

There are many compelling reasons why the CPSC and companies agree to not only the content of a recall, but also its timing. For a recall of this magnitude to be leaked to the media is a very troublesome precedent and cause for concern to companies negotiating higher profile recalls with the CPSC. Companies have not historically had much to fear in terms of recall information leaking from the agency, but this development potentially calls that into question.

Not only is it a violation of CPSC’s own statutes and regulations for recall information to be prematurely leaked to the press (and potentially could lead to employee sanctions), but it is also potentially disruptive to the effectiveness of the recall itself. The CPSC should take steps to ensure such leaks do not occur in the future.

 

 

This article originally appeared on Law360 on June 14, 2016 and provides additional analysis to our prior posts on civil penalties.

This past March, while speaking at a Consumer Federation of America luncheon, U.S. Consumer Product Safety Commission Chairman Elliot Kaye stated that he “was pleased to announce” that the agency had secured a $15.45 million civil penalty. Commissioner Joe Mohorovic, who voted in favor of the penalty, issued a statement expressing reservations that “too few of the compelling facts” were reflected in the public facing settlement documents for the regulated community to draw conclusions and lessons.

He has since issued two strongly worded dissents raising concerns about the overall transparency of the civil penalty demand process (here and here).  Commissioner Ann Marie Buerkle has recently stated that “consumers will be safer if we help companies prevent violations rather than celebrate marquee penalties,” while Commissioner Marietta Robinson has defended the CPSC’s approach to civil penalties against such criticisms calling them “unwarranted” and “misguided.”

These four perspectives represent some of the dueling philosophies within the CPSC leadership about the role and purpose of civil penalties.  The differences of opinion as to the commission’s approach to civil penalties have never been more pronounced.  Over the past two weeks, the CPSC announced civil penalty settlement agreements with Teavana Corporation and Sunbeam Products (d/b/a Jarden Consumer Solutions) for $3.75 million and $4.5 million, respectively.  These recent penalties come on the heels of the CPSC’s obtainment in March of the record-breaking $15.45 million civil penalty referred to above against various Gree Electric Appliances entities.

It is no secret that over the past two years the CPSC has sought higher civil penalties against companies for alleged violations of the requirement to report product safety issues to the agency in a timely manner — and has notably achieved that goal as announced penalties creep higher and higher into the millions of dollars.  However, in pursuing such civil penalties, the commission’s approach has increasingly divided along partisan lines.

Since last May, the commission has accepted nine civil penalty settlement agreements presented to it by the agency’s professional staff that ranged from $2 million to $15.45 million.  Five of those penalties received a 4-1 vote with Commissioner Buerkle dissenting, while four penalties received a 3-2 vote with Commissioners Mohorovic and Buerkle dissenting.

Approach of the Chairman and Commission’s Democratic Majority 

Chairman Elliot Kaye

Last year, CPSC Chairman Elliot Kaye made waves in the product safety world when he remarked at the 2015 annual International Consumer Product Health and Safety Organization product safety conference that he was directing staff to seek significantly higher civil penalties against companies for violations of the CPSC’s product safety statutes.  Chairman Kaye doubled down — literally — on those remarks earlier this year when, at the same conference, he stated that he wanted to see “double digit” civil penalties based on certain fact patterns that he was seeing.  Kaye reasoned that Congress had intended such increases when it significantly raised the civil penalty ceiling in the Consumer Product Safety Improvement Act of 2008 (CPSIA) from $1.825 million to $15 million.  A few weeks later, Chairman Kaye announced the $15.45 million civil penalty against the Gree entities.

Most recently, after the CPSC announced the Teavana civil penalty, Chairman Kaye made the following remarks regarding Section 15(b) reporting obligations and civil penalties:

All companies who do business before the CPSC must understand that they cannot withhold information from the commission that impacts public safety.  If consumers are suffering product-associated cuts by broken glass and burns by hot liquid then that type of information needs to be reported to the CPSC — immediately.  The $3.75 million penalty agreed to by Teavana is appropriate and is another sign that the CPSC will consistently hold companies accountable when they do not comply with the law …

In short, it is evident from his remarks that Chairman Kaye believes that companies have a heightened duty to report potential defects to the commission, intends to pursue higher civil penalties against companies who violate their obligations and responsibilities under the product safety laws, and supports the general process and procedures currently followed by the Commission and its staff in prosecuting civil penalty demands.

Commissioner Marietta Robinson

One of Chairman Kaye’s Democratic colleagues, Marietta Robinson, has supported the commission’s general approach to civil penalties and has voted in favor of all of the recent civil penalties levied against companies.  In a recent statement, Robinson stated that the following criticisms against the commission’s current approach — the settlement was too high, the CPSC is penalizing a company that made an honest mistake, and too little information was provided to the public on precisely how the CPSC calculated the civil penalty demand — are “unwarranted, misguided and belied by the facts.”  According to Robinson, the commission is using an important tool given to it by Congress to do something about those “rare occasions” when the agency determines that a company has failed to report a potentially hazardous product in a timely manner, and is “hardly pursuing an overzealous enforcement agenda.” Commissioner Robinson’s full statement can be found here.

Commissioner Robert Adler

Although Commissioner Adler has not made any official statements regarding civil penalties recently, he has shared some insight of his thinking on civil penalties in prior years.  For example, in 2012, Adler voted against a civil penalty agreement with Hewlett-Packard.  In a dissenting opinion, Adler stated that the size of the penalty ($425,000) was “infinitesimal” in relation to the size and revenues of the company.  He also rejected the idea that the amount of the penalty could serve as precedent in future cases, specifically citing the new $15 million civil penalty ceiling authorized in the CPSIA.

Approach of the Agency’s Republican Commissioners

While the Commission’s Republican members, Joe Mohorovic and Ann Marie Buerkle, have some differences in their respective approaches to civil penalties, both have expressed concerns over how the agency calculates, imposes and settles civil penalty demands for alleged violations of CPSC statutes, such as Section 15(b) of the CPSA.

Commissioner Joe Mohorovic

Commissioner Mohorovic has voted for some civil penalties in the past, including Gree, although he has consistently and repeatedly expressed concerns over the way by which the commission seeks and then publicizes such penalties.  Recently, Mohorovic voted against the Teavana and Sunbeam civil penalties and issued strongly worded dissents setting forth his perspective on civil penalties in greater detail (see Teavana statement here and Sunbeam statement here).

In the Teavana case, for example, Mohorovic stated that he is “unpersuaded by any of the facts … that [the] settlement amount is appropriate or that a penalty is justified at all,” and that he believes the commission is “failing in [its] duty to tell people why [it is] imposing the penalty [it is] imposing.”  Mohorovic’s perspective could be summarized as follows: settlements of civil penalty demands are teachable moments to educate the regulated community, yet that can only be accomplished through public facing settlement documents that provide sufficient case facts and the commission’s analysis of how those facts are applied to its civil penalty framework.  The commission, according to Mohorovic, is not doing so and missing an important opportunity.

Most recently, Mohorovic has asked the commission to add to its annual agenda and priorities hearing some potential elements of a way forward on “what should be our highest priority: the fair, just, and orderly calculation and imposition of civil penalties for alleged violations of our rules.”  Such steps include, among others, directing the CPSC’s Office of General Counsel to produce a publicly available report comparing the CPSC’s statutory and regulatory penalty constructs with those of peer agencies and holding one or more open meetings or workshops on “CPSC penalties, their purposes and their ideal function and present dysfunction.”  This statement can be found here.

Commissioner Anne Marie Buerkle

Finally, Commissioner Buerkle has been, perhaps, the most strident critic of civil penalties generally and the commission’s approach to pursuing such penalties against companies.  According to Buerkle, she does not oppose civil penalties as a “matter of course;” rather, her opposition has “been for a variety of reasons.”  From Buerkle’s viewpoint, the defect reporting requirements of Section 15 are vague, civil penalties for failure to immediately report are difficult to evaluate and value, and, like Mohorovic, Buerkle has concerns with the CPSC’s lack of transparency throughout the civil penalty process.  Commissioner Buerkle’s recent statement on civil penalties can be found here.

Conclusion

These recent civil penalty settlement agreements illustrate the commission’s desire to increase the amount of penalties assessed against companies for late reporting violations.  But they also illustrate another trend: a commission increasingly divided along party lines with respect to civil penalties. This division, however, is not focused on “whether” the agency will impose multi-million dollar civil penalties.  At least four commissioners have recently supported multi-million dollar civil penalties in cases where they thought a penalty was warranted.  Rather, the major policy divide on civil penalties relates to the role of such penalties in CPSC enforcement, how they are calculated, and the ability of stakeholders to be guided by previous settlements.

Based on the current dynamic, it seems that a robust public debate on the role of civil penalties will continue to unfold at the commission over the next few months.  Although this commission has found middle ground more consistently than in recent years, it remains to be seen whether the various sides of the debate will reach a middle ground on these questions.  In the meantime, companies should expect the CPSC’s current practices for civil penalties to remain much of the same.

USCPSC RecallThe U.S. Consumer Product Safety Commission (CPSC) is set to announce yet another civil penalty settlement.  Sunbeam Products d/b/a Jarden Consumer Solutions (Sunbeam or the Company) has agreed to pay a $4.5 million civil penalty to resolve charges that it knowingly failed to immediately report certain defects and an unreasonably risk of serious injury involving some of the company’s coffeemakers.  The monetary amount of this civil penalty continues to illustrate the Commission’s desire to increase the amount penalties levied against companies for late reporting violations of product safety statutes.

In this case, CPSC staff alleged that Sunbeam failed to report immediately to the Commission that it had information which reasonably supported that certain of its coffeemakers could experience a build-up of steam pressure forcing the brewing chamber to open and expel hot water and coffee.  Such a situation, according to staff, could (and allegedly did) create a burn risk to consumers.  In response to the CPSC’s allegations, Sunbeam asserted that after an extensive investigation, the Company determined that these incidents were related to circumstances that it had not anticipated and not within the subject product’s instructions, and that it did voluntarily report to the Commission after its investigation.

Along with paying the $4.5 million civil penalty, Sunbeam has agreed to “maintain” a product safety compliance program with the common program elements to ensure that the Company complies with product safety standards and regulations enforced by the Commission.  Interestingly, it appears from Paragraphs 20 and 21 of the agreement that the Company already has such a program in place.

As has been the case recently, the Commission voted 3-2 to provisionally accept the settlement with the Commission’s Democratic majority (Kaye, Adler, and Robinson) voting to approve the agreement and Republican Commissioners Mohorovic and Buerkle voting against it.  As he did last week in the Teavana case, Commissioner Joe Mohorovic filed a statement explaining his dissent stating “[w]here I fail to agree is in the calculation of the amount the company will pay in punishment for its tardiness.  That amount, in my view, is far too high.”

Companies in the consumer products arena should remain mindful of and attentive to their Section 15(b) reporting obligations under the Consumer Product Safety Act.  This is particularly true after CPSC Chairman Kaye’s most recent statements on Section 15(b) reporting and civil penalties.  Last week, in connection with the CPSC-Teavana civil penalty settlement, the Product Safety Letter and BNA reported the following Kaye statement:

“All companies who do business before CPSC must understand that they cannot withhold information from us that impacts the safety of the public.  If consumers are suffering product-associated cuts by broken glass and burns by hot liquid then that type of information needs to be reported to CPSC – immediately.  The $3.75 million penalty agreed to by Teavana is appropriate and is another sign that CPSC will consistently hold companies accountable when they do not comply with the law – a law intended to minimize harm to consumers.”

Teavana Record of Commission ActionOn May 26, 2016 the U.S. Consumer Product Safety Commission (“CPSC”) announced through a Record of Commission Action (“RCA”) that Teavana Corporation (“Teavana”) has agreed to pay a $3.75 million civil penalty to resolve charges that it knowingly failed to immediately report that certain glass tea tumblers could “explode, shatter or break during normal use.”  While the Commission has not yet published the provisional Settlement Agreement and Final Order in the Federal Register, or issued a press release as is customary, the RCA indicates that the vote was 3-2 in favor of accepting the settlement.

Notably, Commissioner Joe Mohorovic, who has voted for some civil penalties in the past, issued a strongly worded dissent explaining his vote against acceptance of this civil penalty and outlining his concerns about how the agency “calculates, imposes, and settles civil penalty demands for alleged violations” of CPSC statutes.  Mohorovic’s dissent comes on the heels of a statement by Commissioner Ann Marie Buerkle, which expresses similar sentiment over how the Commission pursues civil penalties against firms.

Mohorovic’s dissent further explains many of the concerns that he has vocalized regarding civil penalties during his tenure on the Commission.  The overarching theme of his statement can be summarized as follows: settlements of civil penalty demands are teachable moments to educate the regulated community, yet that can only be accomplished through public facing settlement documents that provide sufficient case facts and the Commission’s analysis of how those facts are applied to its civil penalty statutory and regulatory framework.  Mohorovic asserts that the Commission continues to miss opportunities by failing to meet such a standard, and he worries that the Commission’s “growing opacity” in its approach to civil penalties will create distrust between the CPSC and its stakeholders—resulting in an increase in litigation when companies refuse to settle the Commission’s civil penalty demands (see our previous posts on the CPSC’s civil penalty litigation against Michaels Craft Stores and Spectrum Brands).

Commissioner Buerkle’s statement sets forth her own concerns with civil penalties and the Commission’s approach in pursuing them.  Although more general in nature and not directly related to the Teavana settlement, its timing and purpose was clear.  From Buerkle’s viewpoint, the defect reporting requirements of Section 15 are vague, civil penalties for failure to immediately report are difficult to evaluate and value, and, like Mohorovic, Buerkle has concerns with the CPSC’s lack of transparency throughout the civil penalty process.

These thoughtful statements regarding civil penalties offered by Commissioners Mohorovic and Buerkle are helpful in encouraging a robust, public debate on the role of civil penalties in CPSC enforcement, how they are calculated, the ability of stakeholders to be guided by previous settlements, and how the CPSC and the regulated community interact with respect to reporting and certain violations.

Last year, CPSC Chairman Elliot Kaye issued a statement regarding the CPSC’s civil penalty agreement with Office Depot (see here).  Kaye also shared his perspective regarding civil penalties at ICPHSO earlier this year, in which he stated his desire to seek significantly higher civil penalties for some of the fact patterns that he has been seeing.  Kaye also asserted that higher penalties were what Congress intended to see when it raised the penalty cap from $1.825 million to $15 million in the CPSIA of 2008.

We will certainly share any written statements offered by the Commission’s majority members regarding the Teavana settlement or in response to Commissioner Mohorovic’s dissent or Commissioner Buerkle’s statement.

Howsare CohenThis article originally appeared on Law360 on May 12, 2016 and provides additional analysis to our prior post on this subject.

After filing a Section 15(b) report and conducting a recall with the U.S. Consumer Product Safety Commission (CPSC), companies frequently ponder whether the CPSC believes the company timely filed its report under Section 15(b) of the Consumer Product Safety Act (CPSA) and, if not, whether the CPSC will launch an investigation that could lead to a civil penalty action. Unlike the experience of negotiating a recall where there is frequent contact with the CPSC within a defined time frame, the agency is usually silent and takes more time (sometimes years) to decide whether it will investigate whether a company met the statutory time deadline for filing the underlying Section 15(b) report.

In many cases, determining that a report was filed in such a manner to where the CPSC likely would not find reason for a timeliness investigation or civil penalty is relatively straightforward. In other cases where the timeliness of a report is more uncertain, however, only the CPSC’s statute of limitations for pursuing a civil penalty can provide similar comfort.

So what is the CPSC’s statute of limitations? The answer is not as straightforward as it may appear.

Continue Reading When Does A CPSC Late Reporting Violation First Accrue?

According to the Philadelphia Inquirer, CPSC Chairman Elliot Kaye announced in a meeting with consumer advocates that the agency will never again allow a company conducting a voluntary corrective action to call it anything other than a “recall.”  Last year, after the announcement of a joint CPSC-IKEA “repair program” to address a furniture tip-over hazard involving the company’s popular Malm dresser, we  asked whether the announcement indicated that the agency was possibly softening its practice of labeling every corrective action a recall.

The answer, according to Chairman Kaye, is a firm “no.”   Continue Reading CPSC Chairman Vows that Every CPSC Voluntary Corrective Action Will Be Called a “Recall”

Time Expired Statute of LimitationsAfter filing a Section 15(b) report and conducting a recall with the Consumer Product Safety Commission (“CPSC”), it is not uncommon for a company to wonder whether it timely filed its report under the Consumer Product Safety Act (“CPSA”). A question sometimes asked of us is how much time must pass before the company can feel confident that the agency is not going to initiate a timeliness investigation or civil penalty action.

CPSC’s Statute of Limitations

The CPSA does not contain an explicit statute of limitations that answers this question. Instead, the CPSC operates under the general statute of limitations for the government to bring an enforcement action for a civil penalty, 28 U.S.C. § 2462, which states the following: Continue Reading What is CPSC’s Statute of Limitations for Civil Penalties? That’s a Gabelli Question