Commission levels fines at increased rate across vast jurisdiction
by Staff -- Manufacturing Business Technology, 9/1/2005 12:00:00 AM
The Consumer Product Safety Commission (CPSC) has been flexing its muscles lately, and all that exercise is costing manufacturers. Since last October, the commission has leveled nearly $10 million in fines, compared with $3.5 million in all of 2004.
In March, Graco Children's Productswas fined a record-breaking $4 million for failing to report defects in toddler beds and other products between 1991 and 2002.
"The one fact that periodically gets the commission energized is that historically there has been a lack of compliance," says William V. Custer, partner in the law firm of Powell Goldstein LLP, Atlanta. "Every once in a while it says, 'How do we get [companies] to comply if we don't make it expensive when they fail to do so?'"
According to federal law, manufacturers, distributors, and retailers are required to report to CPSC—an independent regulatory agency created in 1972—within 24 hours after obtaining information that reasonably supports the conclusion that a product contains a defect that could create substantial risk of injury to the public, presents an unreasonable risk of serious injury or death, or violates a federal safety standard. The CPSC has jurisdiction over some 15,000 types of consumer products, including appliances, lawn mowers, power tools, and toys.
Information that should trigger notification is probably in most manufacturers' hands. The CPSC recommends checking warranty records, customer complaints, reports of production problems, product testing, and analysis records—all that data gathered and tracked in the course of production and distribution—to see if a particular product has a problem.
And resist the temptation not to report. You don't even have to admit to a defect to comply, says Custer. You just have to say there might be one.
"My experience as a trial lawyer is most companies will benefit from disclosure," says Custer. "If you don't report, the opponent's lawyer will say you tried to conceal the defect from the agency and consumers, and the judge and jury may be harder on you."
More information about CPSC reporting is available at www.cpsc.gov.
Featured Company
Most Recent Resources
- FICO™ Xpress Optimization Suite Schedules Big Profits For Clients
- Strategic Pricing: Three Steps to Higher Profit Margins
- Driving Innovation Through Lean Product Development Practices
- Demand Planning Maturity Model Strategies for Demand-Driven...
- Simulation-Driven Product Development:Will Form Finally Follow...
