In March of 2011, the Consumer Product Safety Commission (CPSC), as required by Section 6A of the Consumer Product Safety Act, is scheduled to “go live” with its new searchable Publicly Available Consumer Product Safety Information Database (www.saferproducts.gov).
On November 23, 2010, the CPSC approved for publication in the Federal Register a Final Interpretive Rule setting forth the CPSC’s “interpretation, policy and procedures with regard to the establishment and maintenance” of the Database. 16 CFR Part 1102.
Manufacturers, private labelers and retailers of consumer products and other products or substances regulated by the CPSC1 need to pay close attention to “reports of harm” filed with the CPSC for inclusion in the Database. A “report of harm” is “any information . . . regarding any injury, illness, or death, or any risk of injury, illness, or death . . . relating to the use of a consumer product.” 16 CFR §1102.6(b)(8).
The CPSC Wants Reports of Harm in the Database to Influence Consumers’ Purchase Decisions
The CPSC wants the public to rely upon the information in this governmentsanctioned Database when making consumer product purchase decisions. According to the CPSC Project Manager in charge of developing the Database, the CPSC expects a “fire hose of incident reports” when the Database “goes live” in March of 2011. In a recent speech, the Database Project Manager said, “we are expanding our use of social media to share all this information. We want consumers to see our websites as the first place to go to find information about their products.” But how accurate will this data be?
The Database is statutorily required to include a “clear and conspicuous notice to users of the Database that the [CPSC] does not guarantee the accuracy, completeness, or adequacy of the contents of the Database,” CPSA, §6A(b)(2)(5). Nevertheless, in voting for the new Interpretive Rule, CPSC Chairman Inez Tenenbaum stated that reports of harm would include “vital product safety information,” “the public has a right to have access to this information,” and an “informed consumer is a powerful consumer.”
Reports of Harm May be Inaccurate and Filed by Parties with Ulterior Motives
Reports of harm may be filed by not only by consumers of the product, but also by the consumers’ attorneys, government agencies, health care professionals, child service providers, and public safety entities. 16 CFR §1102.10(a). That so many different types of “persons” may file a report of harm raises questions as to whether reports of harm will be sincere, even if inaccurate, comments about a product’s alleged safety hazards or filed to enhance the filers’ litigation, or other ulterior motives. That such reports may also contain claimed risk of injury or illness could lead to mischief-making by report filers asserting amorphous or unsubstantiated risk of injury claims.
Timely Response to Reports of Harm will be Difficult
Reports of harm will be published in the database 10 business days after the company has been provided notice of the report of harm. This timeframe will present significant challenges to companies that want to respond to allegations in a report of harm before that information is published in the Database. The CPSC will give the manufacturer or private labeler of the product in question certain information from the report of harm five business days after the report is received by the CPSC. Registering with the CPSC, which companies can and should do beginning in January of 2011, will enable companies to receive this notice more rapidly.
In theory, the CPSC is supposed to use those five business days to make sure “materially inaccurate” information is removed from the report of harm. Because of the expected “fire hose of incident reports” and a relatively small staff, the CPSC has acknowledged that it will be able to do little to verify the accuracy of the information in the report. Nevertheless, ten business days after the manufacturer or private labeler has received the report of harm, the CPSC intends to publish the reported information in the Database, even if a “material inaccuracy” determination is still pending. Chairman Tenenbaum stated that the “[CPSA] does not allow us to wait until we have made a determination of material inaccuracy.” CPSC Commissioner Adler added that the report of harm should be published in the Database rather than going into a “black hole” pending a material inaccuracy determination.
Manufacturers or private labelers may file comments about the report of harm to be published along with the report in the Database or after the report has been published. They may also ask the CPSC to remove “materially inaccurate information” and “confidential information” in the report before or after the report is published in the Database. Obviously, it would be desirable for a company to make its filing with the CPSC before the passage of ten days in order to attempt to have inaccurate or confidential information stripped from the report before it is included in the Database. It will be difficult for a company to investigate the allegations in the report adequately and file comments and/or challenges to the information in the report in the ten business days before the CPSC publishes the report of harm to the Database. Moreover, any investigation a company may wish to conduct will be hampered by lack of access to the person who filed the report, because the manufacturer or private labeler will not learn the name of the person filing the report unless that person authorizes release of his or her name.
Retailers Will Not Receive Notice of Relevant Reports of Harm
Retailers will be in an even more difficult position, because the report of harm intake form includes a provision for the filer of the report to name the retailer at which the product in question was purchased, yet only the manufacturer or private labeler of the product will receive notice of the report of harm. There is no provision in the CPSC’s regulations for the retailer to receive notice that a report has been filed listing it as the retailer of the product in question. Retailers should consider whether to amend their vendor agreements to require that vendors provide them immediate notice of a report of harm which states that the product that is the subject of the report was purchased at the retailer.
Why the Database is Dangerous to Companies Named in a Report of Harm
Whether or not the Database becomes “the first place [for consumers] to go to find information about their products,” inaccurate or misleading information included in the Database about a company’s product could damage the company’s reputation and that of its valuable brands.
Companies will also have to evaluate reports of harm that involve their products to determine whether to conduct a product safety investigation and take corrective action. Plaintiffs’ lawyers are likely to troll the Database looking for the next product to attack. They will also seek evidence to support punitive damages claims in existing products liability litigation showing that a manufacturer was on notice of an alleged product safety hazard. Companies should expect that competitors will become familiar with and attempt to take competitive advantage of any adverse information filed about them in the Database. Moreover, the CPSC itself will monitor Database filings to look for patterns upon which to base future government product safety investigations.
What Companies Can do to Prepare Now for the Database
- register with the CPSC in January, 2011 so that they can receive timely notice of any report of harm filed about their products.
- identify a person or a team responsible for preparing responses to CPSC reports of harm, train the team on the Database and reports of harm, and empower the team to snap into action when necessary;
- develop internal procedures for properly investigating reports of harm and develop guidelines for preparing appropriate responses to such reports, including a standard response to a report of harm stressing the company’s commitment to product safety and regulatory compliance;
- develop contingency plans that include gathering or preparing data that can be accessed quickly in case reports of harm are filed. This should include documentation that a company’s products are safe for their intended purpose, have passed appropriate product safety tests, and meet or exceed government and/or industry safety standards;
- track reports of harm to determine whether they trigger other reporting obligations to the CPSC or a product recall;
- ensure that an effective company-wide product liability risk management program is in place; and
- prepare for the likelihood that existing product safety lawsuits or complaints filed elsewhere will be re-filed in the CPSC’s publicly-available searchable Database. As a result, what was once just a legal challenge may morph into a public relations problem.