Building Your Product Liability Claim: A Product Supplier's Obligations Under the Consumer Product Safety Act
January, 2005
by Allison K. Ferrini and Michael S. Errera and Dean S. Rauchwerger
Aside from the obvious duty to place only those products that are safe for use into the stream of commerce, manufacturers, importers, distributors and retailers also have significant duties under the Consumer Product Safety Act (“CPSA”). Those duties provide a valuable, powerful hook in developing a product defect claim. A manufacturer's product liability exposure frequently involves breach of post-sale duties of disseminating appropriate and updated warnings, safety bulletins, and installation and operating instructions, as well as implementing corrective actions, including product recalls, where necessary to avoid foreseeable dangers, risks and hazards from a recognized product defect.
The U.S. Consumer Product Safety Commission (“CPSC”) regulates the safety of various consumer products. Under the CPSA, a company is required to immediately notify the CPSC of information that reasonably supports the conclusion that its product has a reportable noncompliance or a defect that may create a substantial hazard or unreasonable risk of serious injury or death.
This reporting is mandatory unless the company has investigated and determined that the information is not reportable. All available information should be evaluated to determine whether the information received suggests the existence of noncompliance, a defect or an unreasonable risk of serious injury or death, including, for example, information about engineering, quality control, production data, safety-related production or design changes, product liability suits and/or claims for personal injury or damage and other consumer complaints or warranty claims.
There is no bright-line test to determine if a substantial product hazard exists. As suggested in the CPSC Recall Handbook, any entity involved in the manufacture, sale or distribution of a consumer product should have a system for handling consumer complaints, warranty returns, product liability lawsuits, etc. and a designated person within the company to handle these issues who has knowledge of the product and of the reporting requirements.
Failing to follow these guidelines and report such information immediately can result in substantial civil and criminal penalties. Some of the penalties for failing to report (and for distributing an unsafe product) can include monetary sanctions, product bans and product recalls. A company can institute a self-imposed recall but may face liability for negligence if the recall is later determined to be too narrow or insufficient by the CPSC.
When developing a product defect case, it is important to be mindful of these CPSA requirements. Through discovery, your counsel should look to develop a target defendant's lack of quality control, adequate warnings and product stewardship as evidentiary support for proving product defect and deficient post-sale corrective actions (i.e., recall, retrofit, warnings, product hazard notice, cease distribution and sale, press release, etc.).
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