More aggressive enforcement actions and increased regulatory activities under the Biden Administration are here. In President Biden’s first weeks, he is making good on his promise to reverse course from the previous administration’s product safety agenda.
So far, we witnessed rare civil penalties against product manufacturers, a flurry of recalls, and the progression of new product safety regulations. We also expect Biden to nominate a new commissioner to the Consumer Product Safety Commission (CPSC), which will shift the agency’s power balance.
Enforcement Actions. CPSC recently announced a $7.95 million civil penalty in a settlement with Cybex International, Inc., an exercise equipment manufacturer.[1] CPSC charged Cybex with failing to immediately report a known product safety defect. CPSC learned Cybex had received 85 reports of broken handles on its arm curling machine and 27 reports of injuries on its press machine but never notified CPSC. Cybex recalled the products several years ago but, on February 11, 2021, agreed to pay the civil penalty to resolve CPSC’s charges.
In early January 2021, a fire extinguisher manufacturer was ordered to pay a $12 million civil penalty following a rare referral from CPSC to the Department of Justice.[2] The government alleged Kidde failed to immediately report a serious defect in its fire extinguishers, underreported the scope and nature of the defect and associated risk, made misrepresentations to CPSC, and misused a registered safety certification mark.
All companies in a product’s distribution chain have a duty to report potential defects that create an unreasonable risk of serious injury to consumers. The civil penalties against Cybex and Kidde should remind consumer product companies to evaluate and refresh their own compliance policies if needed. CPSC’s charges for failure to report underscore the urgency for companies to act fast in determining whether reportable product hazards exist. As a result, it is critical to promptly consult products liability counsel to assess reportability when a potential safety issue arises.
Recalls. Since President Biden took office, CPSC has announced 20 product recalls, following 256 total recalls in 2020. The surge comes on the heels of steadily declining recall levels under prior acting chairwoman Ann Marie Buerkle. Recalls in 2019 decreased 7 percent from 2018 levels, which were a decrease of 8 percent from 2017 levels.[3] However, once Robert Adler, the current acting chairman, took over in October 2019, recall levels in 2020 jumped 6 percent from the previous year. This trend is likely to continue.
Regulations. We expect the Biden Administration’s preference to shift to mandatory standards over the previous administration’s deference toward voluntary standards. Children and baby products represent a key area of CPSC’s current focus. The agency seeks to finalize a mandatory standard for crib mattresses that incorporates ASTM F2933-19 with modifications to make the standard more stringent. The proposed rule will also add “crib mattresses” as defined in the standard to the regulatory definition of “durable infant or toddler product.” In addition, CPSC issued a direct final rule to update its regulation of infant swings to the newly revised version of the standard, ASTM-F2088-20, which takes effect April 3, 2021. Businesses should keep an eye out as new proposed regulations come down the pipeline.
CPSC’s Leadership. Biden has three opportunities to reshape the Commission. Acting Chairman Adler’s term ends in October 2021, prompting the anticipated announcement of his replacement in the next few months. Commissioner Elliot Kaye, whose term ended in October 2020 and is being held over for a year, is also due for a replacement while a fifth seat remains vacant. With the chance to fill three seats, Biden can return CPSC to full strength and secure a Democratic majority to pursue his agenda.
One hurdle persists – the stalled nomination of Nancy Beck. President Trump nominated Beck to fill the vacant chairman position but she encountered opposition in the Senate. Even if the Senate confirms, Biden can simply remove her and nominate a new candidate. With a slim Democratic Senate majority, Beck’s nomination appears doomed, paving the way for a Biden nominee to replace Acting Chairman Adler. A Democrat-led Commission would likely drive increased compliance activities across industries and push for new mandatory safety regulations – a more aggressive approach lobbied for by consumer product safety advocates.
Be on the lookout for more Client Alerts from Morrison & Foerster’s products liability and counseling group to stay apprised of the latest consumer product safety developments.