Reporting requirements for defective products

Government notification

What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?

A manufacturer of regulated products must notify the applicable regulating authority regarding substantial safety deficiencies in its products. Although each agency maintains different thresholds and reporting requirements, all agencies rely, in large part, on the self-reporting of firms in determining product safety issues.

Under the CPSA, for example, there are two basic reporting requirements. First, a manufacturer, importer, distributor or retailer of a consumer product is required to report under section 15(b) when a product does not comply with a safety rule issued under the CPSA, contains a defect that could create a substantial product hazard to consumers, or creates an unreasonable risk of serious injury or death. Second, under section 37, a manufacturer of consumer products must report information about lawsuits or settlements if:

  • a particular model of the product is the subject of at least three civil actions filed in a federal or state court within a 24-month period;
  • each suit alleges death or grievous bodily injury; and
  • at least three of the suits result in final settlement or judgment in favour of the plaintiff.

The FDA also requires regulated companies to notify the agency immediately once the company becomes aware that the company’s product is violative of a statute or regulation enforced by the FDA. Food manufacturers, processors, packagers and holders are required to notify the FDA as soon as they become aware that there is a reasonable probability that an article of food is ‘reportable’. An article of food is considered ‘reportable’ if there ‘is a reasonable probability that the use of, or exposure to, such article of food will cause serious adverse health consequences or death to humans or animals’ (21 USC section 350f(a)). The FDA also requires that companies report serious and unexpected adverse events associated with new drugs, approved drugs, non-prescription drugs and dietary supplements as soon as possible, ‘but no later than 15 calendar days from initial receipt of the information’ (21 CFR section 314.80(c) and 21 CFR section 310.305(c)).

Finally, under 49 USC section 30118(c), a manufacturer of a motor vehicle or an item of original or replacement equipment must report to the NHTSA within five working days from determining that a safety defect or non-compliance exists in the manufacturer’s product (49 CFR section 573.6).

Notification criteria and time limits

What criteria apply for determining when a matter requires notification and what are the time limits for notification?

A firm’s reporting obligations typically begin once the firm becomes aware that its product poses a risk to the safety of a user or consumer, or is otherwise in violation of a statutory or regulatory requirement, such as a safety standard. The specific reporting criteria and requirements, including when the information must be reported, depend on the product at issue and corresponding agency’s regulations.

For example, under section 15 of the CPSA, a firm must immediately report after obtaining information that reasonably supports the conclusion that a product does not comply with a safety rule issued under the CPSA, contains a defect that could create a substantial product hazard to consumers, or presents an unreasonable risk of injury or death. According to CPSC guidance documents, ‘immediately’ means ‘within 24 hours’. The obligation to report commences upon receipt of the reportable information, although the CPSC does allow 10 days for the company to conduct ‘expeditious investigation’ in order to evaluate whether the information is reportable. Likewise, the FDA’s reporting obligation for drugs, non-prescription drugs for human use, and dietary supplements arises upon notice of a ‘serious adverse event’. Title 21 USC section 379aa(a) defines a serious adverse event as an adverse event that results in a life-threatening experience, death, hospitalisation, disability, birth defect or requires medical or surgical intervention to prevent death, disability or birth defects. A report of a serious adverse event must be made to the FDA no later than 15 business days after the report is received by the company. Facilities responsible for the production or packaging of food are required to notify the FDA ‘as soon as practicable, but in no case later than 24 hours after a responsible party determines that an article of food is a reportable food’ (21 USC section 350f(d)).

The specific regulating agency for particular classes of products is discussed in question 6.

Competent authority

To which authority should notification be sent? Does this vary according to the product in question?

The particular authority to which notification should be sent - as well as the kind of information to be reported as part of the notification - depends on the kind of product at issue. A list of general product types and the corresponding regulating federal agency is listed below. Additional information about the specific types of products regulated by each agency can be located at the agency’s website.

  • Aircraft: Federal Aviation Administration: www.faa.gov.
  • Alcohol: Alcohol and Tobacco Tax and Trade Bureau: www.ttb.gov.
  • Boats: US Coast Guard: www.uscgboating.org.
  • Consumer products: Consumer Product Safety Commission: www.cpsc.gov.
  • Cosmetics: Food and Drug Administration: www.fda.gov.
  • Drugs and medical devices: Food and Drug Administration: www.accessdata.fda.gov/scripts/medwatch/.
  • Industrial, commercial or farm products: Occupational Safety and Health Administration: www.osha.gov/dep/index.html.
  • Firearms and ammunition: Bureau of Alcohol, Tobacco, and Firearms: www.atf.gov.
  • Food (meat, poultry and processed eggs): Department of Agriculture: www.fsis.usda.gov/wps/portal/fsis/home.
  • Food (except meat, poultry and processed eggs): Food and Drug Administration: www.fda.gov.
  • Motor vehicles (including tyres, car seats and parts): National Highway Traffic Safety Administration: www.safercar.gov.
  • Pesticides, rodenticides and fungicides: Environmental Protection Agency: www.epa.gov.
  • Tobacco and tobacco products: Alcohol and Tobacco Tax and Trade Bureau: www.ttb.gov.
Notification information

What product information and other data should be provided in the notification to the competent authority?

Each regulatory agency will have its own requirements for what specific product information must be reported and what forms need to be completed as part of the notification process.

For example, the CPSC provides an online ‘initial report’ that companies can use to report potentially defective or hazardous products pursuant to section 15 of the CPSA. The initial report can be completed at www.saferproducts.gov/CPSRMSpublic/Section15/. The reporting should be done by a person with knowledge of the product and the reporting requirements of section 15. The initial report should include the following information:

  • description of the product;
  • name and address of the company and whether it is a manufacturer, distributor, importer or retailer;
  • nature and extent of the possible product defect or unreasonable risk of serious injury or death;
  • nature and extent of injury or possible injury associated with the product; and
  • contact information for the person informing the commission.

Following the filing of an initial report, a ‘full report’, is required to be submitted by the reporting firm. The full report requires more detailed product information than the initial report, including, but not limited to, such information as technical drawings, test results and schematics; a chronological account of facts and events leading up to the report; and model numbers, serial numbers and data codes of the affected products. The complete list of information required by the full report is set forth in 16 CFR section 1115.13(d)(1)-(15).

The FDA requires that serious and unexpected adverse events be reported using FDA Form 3500A, which is available at www.accessdata.fda.gov/scripts/medwatch/. This form provides the required information necessary for the mandatory submission of serious adverse events. Some of the information required includes: name of the suspected product; description of the adverse event; relevant history associated with the specific adverse event; and other information regarding manufacturers, importers and users of the product. Reports regarding serious adverse health consequences or death from articles of food should include information concerning date and nature of food adulteration; product information found on packaging; contact information at the reporting facility; and the contact information for parties ‘directly linked in the supply chain’ for the reportable food (21 USC section 350f(e)).

Finally, the NHTSA requires a manufacturer to complete a ‘defect and non-compliance information report’ (also known as a ‘573 Report’) once it determines there is a defect in its product (49 CFR section 573.6). Information that must be provided in this document includes, at a minimum: the manufacturer’s name; identification of the product containing the defect with a description of the manufacturer’s determination of the population subject to the defect; and a description of the defect or non-compliance, including a brief summary and a detailed description of the defect (49 CFR section 573.6(c)). The regulations recognise additional information that a manufacturer should submit as it becomes available.

Obligations to provide updates

What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?

In order to ensure the adequate completion of recalls and other safety notifications, most regulating agencies require firms to submit various reporting documents regarding the status of the recall and the ongoing risks presented by the violative product. The ongoing reporting requirements and obligations will vary depending on the agency and product involved. The NHTSA, for example, requires that a recalling manufacturer submit quarterly recall reports under 49 CFR section 573.7. The specific information submitted in these reports includes, but is not limited to:

  • notification campaign number assigned by NHTSA;
  • date the notification campaign began and was completed;
  • the number of vehicles or items involved in the campaign;
  • the number of vehicles inspected; and
  • the number of vehicles determined to be unreachable for inspection.

These quarterly reports are due on or before the 30th day of each month following the end of each calendar quarter (ie, 30 April, 30 July, 30 October and 30 January) (49 CFR section 537.7(d)). The FDA typically requests recall status reports every two to four weeks that include specific categories of information from which the FDA can determine the effectiveness of the current recall procedures (21 CFR section 7.53). The CPSC monitors all consumer product recalls. This typically includes submission of monthly progress reports, recall verification inspections, and retail visits conducted by CPSC field staff and state investigators to confirm receipt of recall notification and assure that recalled products are no longer being sold. This monitoring can continue as long as the CPSC deems necessary for a particular product recall.

Penalties

What are the penalties for failure to comply with reporting obligations?

The failure to comply with reporting obligations is typically considered a prohibited act and may subject the firm to civil penalties, criminal penalties or both (see, for example 15 USC sections 2069-72). A firm that intentionally fails to comply with the statutory reporting obligations may be deemed to ‘knowingly’ commit a prohibited act and be subject to more severe penalties under the appropriate regulatory framework. A motor vehicle manufacturer that fails to comply with the reporting requirements imposed by the MVSA can be fined up to US$105 million (49 USC section 30165(a)(1)). In addition to civil and criminal penalties, a drug manufacturer that fails to comply with its reporting requirements also risks having FDA approval of its drug withdrawn (21 CFR section 314.150 (b)).

Public disclosure

Is commercially sensitive information that has been notified to the authorities protected from public disclosure?

The Freedom of Information Act (FOIA) allows for members of the public to access information controlled by the US government. A firm may seek to protect information submitted to a regulatory agency from the reach of the FOIA. For example, firms reporting under both the CPSA and FFDCA are, in certain situations, provided with protection from FOIA requests.

The CPSA prevents the public disclosure of proprietary and confidential information. However, information included in a section 15(b) report can otherwise be made available to the public, through an FOIA request, after remedial action is requested or if the submitting firm consents. The commission must notify the company prior to the release of any information to the public and allow the submitting company an opportunity to object. The CPSIA recently reduced the time within which a company may object to the release of information from 30 days to 15 days. Additionally, the CPSIA allowed for the CPSC to further shorten this period if it determines that ‘the public health and safety requires public disclosure with a lesser period of notice’ (15 USC section 2055).

A firm reporting under the FFDCA is protected from the disclosure of trade secrets and confidential commercial information (21 CFR section 20.61(d)). If the FDA disagrees with a firm’s classification of the information as confidential, the FDA may determine that disclosure is appropriate. In such cases, the FDA will provide the submitting entity notice of the request and the opportunity to object to disclosure. The firm will have five working days from receiving the notice to object to the disclosure under these regulations (21 CFR section 20.61(e)(1)-(2)).

Use of information in prosecution

May information notified to the authorities be used in a criminal prosecution?

Generally no distinction is made between disclosure of information based on civil or criminal proceedings. The CPSC, however, expressly provides that information submitted pursuant to section 37 will be immune from disclosure except for an action brought against the manufacturer for failure to provide information required by section 37 (15 USC section 2055(e)(2)). Therefore such information could be used against the manufacturer in a suit brought against it by the commission (15 USC section 2070).