New England Biz Law Update
For companies that sell products to consumers, reporting of safety hazards is always important. This year, enforcement activity by the Consumer Product Safety Commission (CPSC) for reporting violations is up.
In January, the Department of Justice announced that Walter Kidde Portable Equipment, Inc. (Kidde) agreed to pay a $12 million civil penalty for allegedly failing to timely notify CPSC about problems with its fire extinguishers. The DOJ also alleged that Kidde knowingly made material misrepresentations to CPSC and knowingly sold fire extinguishers with unauthorized certification marks.
As a result, Kidde was slapped with a $12 million civil penalty and future compliance requirements and improvements, as well as liquidated damages in the amount of $5,000 per violation per day if the company violates the requirements.
Then, in February, the agency announced that Cybex International, Inc. (Cybex) agreed to pay a $7.95 million civil penalty for alleged late reporting of potential product safety hazards with its exercise equipment. The penalties are the result of two recalls, involving the company’s arm curl machines and smith press machines, both due to hazards related to an unreasonable risk of serious injury or death.
The Cybex settlement covers late reporting from a time when the company had a different owner.
For any business, the level of these fines and requirements are significant, and the extent of enforcement is likely to rise even more under the Biden administration.
