By Julie Scheipeter
The U.S. Consumer Product Safety Commission (CPSC) is the regulatory agency responsible for protecting the public from unreasonable risks of injury and death associated with consumer products. According to the Consumer Products Safety Improvement Act (CPSIA) and Child Safety Protection Act (CSPA), manufacturers, importers, distributers, and retailers of all consumer products, including children's products,1 have an ongoing obligation to report potential product defects to the CPSC.2 See 15 U.S.C. § 2064(b). Reporting a potential defect, however, does not necessarily mean that the CPSC will require a recall of the product or other corrective measures. Rather, the CPSC may order corrective actions (including but not limited to a recall) if: (1) after a hearing, the CPSC determines that the product presents a substantial product hazard, and notification is necessary to adequately protect the public from such substantial product hazard, or (2) after notifying the manufacturer, the CPSC determines the product is an imminent hazard and has filed an action under 15 U.S.C. § 2061.
This article will focus on the first cause for a potential product recall – determining whether a "substantial product hazard" exists. The following provides an overview of the criteria used by the CPSC and its staff in assessing substantial product hazards, as well as the hazard priority system used by the CPSC staff to rank defective products.
Substantial Product Hazard
After receiving a report of a potential product defect 3, the CPSC staff will preliminarily determine whether the product at issue presents a substantial product hazard. The decision is preliminary because only the CPSC can make a formal determination that a product is defective and creates a substantial product hazard after affording interested persons, including consumers and consumer organizations, an opportunity for a hearing. The CSPA defines "substantial product hazard" as follows:
15 U.S.C. § 2064(a) [Emphasis added].
As such, there are two categories of substantial product hazard that the CPSC will consider: 1) a hazard presented by noncompliance with safety regulations and 2) a hazard created by a defect in the product. Hazard by noncompliance is fairly straightforward - if the violation of an applicable consumer safety rule creates a substantial risk of injury, a substantial product hazard may exist. In assessing hazard by defect, the CPSC staff will consider the factors listed in section 2064(a)(2) set forth above, which are further explained in 16 C.F.R. § 1115.12(g)(1):
In evaluating substantial product hazard, the CPSC staff (and, if adjudicated, the CPSC itself) will study and evaluate all relevant information pertaining to the product, including:
The CPSC staff then applies hazard priority standards to classify the severity of the problem, as discussed below.
Hazard Priority System
The hazard priority system is a three-tier classification system used by the CPSC staff to uniformly rank substantial product hazards. The hazards are delineated as follows:
If the CPSC staff makes a preliminary determination that the product presents a substantial product hazard, the hazard priority systems provides a guide for selecting the level and intensity of corrective action. As the most severe, Class A hazards warrant the highest level of attention and most immediate, comprehensive and expansive corrective action measures.
Product manufacturers and sellers that have identified a potential defect in a product and have made a 15 U.S.C. § 2064(b) report to the CPSC should consider taking voluntary corrective action through the CPSC's Fast Track Product Recall Program. To participate in this program, a company must immediately stop sale and distribution of the product and must be prepared to implement a corrective action plan, including a consumer-level recall, within 20 working days of submitting the initial report to the CPSC. However, if the company completes the Fast Track Program, the CPSC staff will not make a preliminary determination that the product creates a substantial product hazard. This may save the company from any negative effects a preliminary determination by the CPSC may have on the business. Additionally, businesses that participate in this program are assigned a point of contact at the CPSC who can provide significant assistance to first-time participants as they go through the recall process.
For additional questions, please contact Julie Scheipeter, or the Stinson Leonard Street attorney with whom you regularly work.
1 "Children's products" are those designed or intended for use by children twelve (12) years of age and younger. 15 U.S.C. § 2052.
2 For a discussion of when to report a potential defect, see "Children's Product Recalls: Identifying Reportable Defects," Julie Scheipeter, Stinson Leonard Street (Jan. 21, 2016)
3 If a company obtains information which reasonably supports the conclusion that a product is defective, it must report the information to the CPSC within 24 hours. See15 U.S.C. § 2064(b).