The Consumer Products Safety Commission (CPSC) is poised to launch its online searchable database of "reports of harm" received by the Commission. The new database, mandated by the Consumer Products Safety Improvement Act of 2008 and presently scheduled to go online in early 2011, is certain to have a significant effect on manufactures, importers, licensors and private labelers of consumer products. These businesses need to consider strategies for addressing both the litigation risks and the public relations implications of this database now – before the first "report of harm" goes public.
Anyone can submit a "reports of harm" to the database, including consumers, health care professionals, governmental agencies and childcare providers. When a report is submitted, the manufacturer receives notice and has 10 days to challenge the report on grounds such as material inaccuracy or confidentiality. Though the submitting party must verify its report, the submitter is not required to be identified in the database. And, when a manufacturer is misidentified or even out of business, the report may still be published.
The database will present a number of challenges for manufacturers. First, the CPSC intends to use not just the reports, but also manufacturers' responses to reports to prioritize its investigations. This means that the nature and content of a manufacturer's response must be carefully considered. Second, it is reasonably anticipated that the database will be used by litigants and counsel as a tool to generate further litigation. Consequently, manufacturers must consider whether and when these reports trigger obligations to conduct internal investigations and/or to retain potentially relevant documents, among other things.
As certainly as it will affect a manufacturer's litigation risk profile, the databases will also have substantial public relations implications. The CPSC promises that the database and its concurrent IT modernization will change the agency's "business model" from one of internal investigation to one of "consumer education." The CPSC plans to promote this shift and the database to consumers in publicity campaigns, all of which make the database an attractive source of information for journalists and bloggers. Manufacturers will have to consider the effect "reports of harm" and the manufacturers' corresponding responses may have on their brands, and react accordingly.
Forewarned is forearmed. Manufacturers should start thinking now about strategies for dealing with these and other issues that are sure to flow from the launch of the database and publicity surrounding it.