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Strict Voluntary Recall "Guidelines" Proposed by CPSC




by:
Sheila A. Millar
Jean-Cyril Walker
Keller and Heckman LLP - Washington Office

 
November 27, 2013

Previously published on November 22, 2013

Under a proposed change to its guidelines on voluntary recalls, the U.S. Consumer Product Safety Commission would prescribe a detailed template for voluntary recall notices.[1] Compliance programs would also be added to the list of elements that may be included in voluntary corrective action plans (CAPs). Further, CAPs would become legally enforceable, a substantial change from the status quo under which they explicitly are not. The proposed changes—published on November 21 in the Federal Register—would amend the CPSC’s 1978 interpretive rule.

As the agency describes them, the proposed changes are designed to make recall negotiations more efficient, to make the contents of recall notices more predictable, and to speed release of those notices. The changes may, however, alter the calculus that companies go through before engaging with the CPSC and could reduce the incentive to work with the CPSC on recalls. In agreeing to a recall notice, companies would generally be expected to use social media assets to publicize a recall and to identify significant retailers in the notice, among other elements.

Further, the agency would gain significant power to take legal action against a company after a recall. The agency could presumably seek enforcement of the CAP in federal court (the proposal does not specify how a CAP would be enforced). And if a compliance program were agreed to, the agency would have the authority to seek an injunction or specific enforcement of the terms of such a program. Such terms may include the establishment of written standards and policies on safety concerns and a confidential reporting program. Even if a compliance plan were already in place, it would potentially come under the agency’s scrutiny.

Although the changes technically are not binding (except for making CAPs legally enforceable), as proposed, they would narrow the matters open for discussion in recall negotiations, and could raise obstacles to tailoring recalls and recall notices to the specific concerns triggered by a specific product. The Commission agreed to these proposed changes on a party-line vote, with the Democratic commissioners voting for the proposal and the lone Republican voting against it. Public comments on the proposal are due by February 4, 2014, and it will be critical for interested parties to submit their views.

We are closely monitoring the process surrounding this proposal because of the substantial impact it will likely have on manufacturers and importers of consumer products in the U.S. and around the world.



[1] 78 Fed. Reg. 69,793 (Nov. 21, 2013), available at http://www.gpo.gov/fdsys/pkg/FR-2013-11-21/pdf/2013-27656.pdf.

 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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