The CPSC’s recently announced settlement agreement with Kolcraft may signal a new strategy for the agency with respect to penalties for untimely reporting of substantial product hazards. In the past, settlements for untimely reporting were comprised only of civil penalties, which in 2012 ranged from $400,000 to $1,500,000. With the Kolcraft settlement, however, Kolcraft agreed to pay a $400,000 civil penalty and agreed to implement and enforce a comprehensive compliance program that had the following elements:

  1. written standards and policies,
  2. a mechanism for confidential employee reporting of compliance related questions to a compliance officer or to other senior manager,
  3. training on company compliance-related policies and procedures to all employees,
  4. a senior manager responsible for compliance,
  5. board oversight of compliance (if applicable), and
  6. retention of all compliance-related records for at least five years.

Finally, Kolcraft agreed to provide, upon request, written documentation of the compliance processes and programs. Many commentators, as well as Commissioner Nord, the sole CPSC Commissioner who objected to the non-monetary penalties in settlement agreement, have been critical of the expansion of compliance and reporting requirements beyond what is found in the Consumer Product Safety Act, Consumer Product Safety Improvement Act, and accompanying regulations. There is a concern that the Kolcraft settlement agreement marks a new era of CPSC involvement in internal compliance processes, which have traditionally been up to the discretion of the business. A complete copy of the settlement agreement can be viewed at http://www.alston.com/files/docs/kolcraft-cpsc-settlement.pdf

Voluntary Recalls Announced by the CPSC in March 2013

NUMBER OF RECALLS BY PRODUCT CATEGORY

Child/Infant – 8     Sporting Goods – 8      Electronics – 5       Appliance – 2

Apparel – 1           Furniture – 1                Housewares – 1     Tools/Hardware – 1

Click here to see table.

The following civil penalty was announced by the CPSC in March 2013.

Click here to see table.