iIn May 2015, the Consumer Product Safety Commission (CPSC) announced that it reached a settlement agreement with Office Depot, Inc. to settle CPSC staff’s charges alleging that Office Depot knowingly failed to report hazardous product defects and unreasonable risks of serious injury related to two models of office chairs (Quantum and Gibson) it sold to consumers.
According to the CPSC, Office Depot sold approximately 150,000 Quantum chairs between 2006 and 2009. In 2007, Office Depot first received notice of a defect to the Quantum chairs causing a consumer injury. By 2009, Office Depot received 13 additional reports of injuries and 33 total reports of the Quantum chair defect. Office Depot never notified the CPSC of these issues.
In addition, Office Depot sold more than 1.4 million Gibson chairs between 2003 and 2012. The company first received notice of a product defect to the Gibson chair in 2005. In total, Office Depot received 25 reports of injuries and 153 incident reports related to the Gibson chair. Office Depot did not notify the CPSC of the Gibson issues until December 14, 2014, after receiving CPSC staff’s letter requesting a full report.
According to the CPSC, Office Depot failed to immediately inform the commission about the Quantum and Gibson issues as required by the Consumer Product Safety Act (CPSA). Under the CPSA, 15 U.S.C. § 2064(b), every manufacturer of a consumer product distributed in commerce (other than motor vehicle equipment), and every distributor and retailer of such product, shall immediately inform the CPSC if information is obtained that such product: (1) fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard; (2) fails to comply with any other rule, regulation, standard or ban; (3) contains a defect which could create a substantial product hazard; or (4) creates an unreasonable risk of serious injury or death. The manufacture, distributor or retailer are not, however, required to inform the CPSC if the CPSC has previously been informed of such product issues. Any person who knowingly violates this law is subject to a civil penalty not to exceed $100,000 for each violation.
To resolve the CPSC staff’s charges, Office Depot reach a settlement agreement to pay a $3.4 million civil penalty. In addition, the settlement agreement requires Office Depot to continue to maintain a program designed to ensure compliance with the CPSA with respect to consumer products imported, manufactured, distributed or sold by Office Depot.
Office Depot is not the only company under the recent watchful eye of the CPSC. Over the last year, similar results transpired against General Electric, Williams-Sonoma, and Cinmar. In February 2015, General Electric entered into a settlement agreement to pay a $3.5 million civil penalty to resolve CPSC staff’s charges alleging GE’s failure to report defects concerning certain freestanding dual-fuel ranges and dishwashers. In October 2014, Williams-Sonoma entered into a settlement agreement to pay a $700,000 civil penalty for failing to inform the CPSC of defects associated with Roman shades with exposed inner cords. In May 2014, Cinmar entered into a settlement agreement to pay a $3.1 million civil penalty to resolve CPSC staff’s charges alleging Cinmar’s failure to report product defects to step ladders it sold.
These examples necessitate manufacturers, distributors and retailers to reevaluate their policies and procedures related to the handling of consumer product reports, investigating potential hazardous product defects and reporting to the CPSC. Further, it is vital to maintain detailed documentation of reports received from consumers related to product issues. If capable, these entities may find it valuable to set up a compliance program to ensure adherence to the CPSA to help avoid consumer injuries and hefty civil penalties. In summary, prompt notification to the CPSC of any hazardous product defect will help cut off the risk of violating the CPSA.
