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Controversial Voluntary Recall Process Changes from CPSC Draw Criticism from Congress and Industry




by:
Nathan S. Cardon
Tracy P. Marshall
Sheila A. Millar
Jean-Cyril Walker
Keller and Heckman LLP - Washington Office

 
February 17, 2014

Previously published on February 7, 2014

The CPSC’s proposed changes to its policy on voluntary recalls have drawn significant criticism from many industry organizations, as well as two Pennsylvania senators, Bob Casey (D) and Pat Toomey (R). The senators focused on the CPSC’s award-winning “Fast Track” program, and wrote that “the proposed changes seem to jeopardize the efficacy of the existing process, which could increase the risk of harm to consumers.”

With at least 46 separate sets of comments posted at Regulations.gov, the proposal drew strong criticism from many business organizations. Some of the more controversial changes included a proposal to make corrective action plans (CAPs) legally binding, and to impose legally binding compliance plans on businesses. Currently, such CAPs are not legally binding, though they are the product of negotiations between companies and the agency. Another highly controversial change was to alter existing language that allows a company to include non-admission language in a notice, instead requiring the Commission and the party to agree. This is tantamount to giving the Commission veto power over a company’s right to disclaim liability or deny the existence of a defect in its product. Other elements include relatively detailed requirements for press releases; for example, specifying that the word “recall” should appear in the headline, as should the product class, but not necessarily the model number or other identifying information, even when available.

The proposed amendments follow a relatively large shift in the agency’s focus after the 2008 enactment of the Consumer Product Safety Improvement Act (CPSIA). That law increased the agency’s budget, increased its authority and the size of penalties it could extract from violative companies, and directed the agency to embark on numerous new regulatory activities such as requiring third-party testing for children’s products. Though some of the agency’s regulatory activity seems to have slowed, its enforcement apparatus may just be heating up, with some parties expecting the agency to levy its first $10-million-plus penalty before long. With this proposal, however, many business organizations argue that the Commission has exceeded even its expanded authority under CPSIA, and is seeking to impose unconstitutional conditions on the exercise of free speech rights. The agency will have to review and respond to the comments, and explain what points in the comments it agrees or disagrees with, if it chooses to move forward with the rulemaking.



 

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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