The U.S. Consumer Product Safety Commission (CPSC or the Commission) is a small federal agency with a big job: protecting consumers from unreasonable risks of injury associated with the use of thousands of types of consumer products. With an Operating Plan budget for fiscal year 2021 of $135 million and 539 employees1 —tiny by federal government standards—CPSC uses safety data submitted by companies pursuant to the notification requirements under Section 15 of the Consumer Product Safety Act (CPSA) to help carry out the agency's mandate.2 The Consumer Product Safety Improvement Act of 2008 (CPSIA) dramatically increased the maximum penalties for noncompliance,3 and both CPSC and the U.S. Department of Justice have used that authority to impose multimillion-dollar penalties against a number of companies for alleged late reporting under Section 15 and other violations.
Congress created CPSC as an independent commission, which means that it does not report to the president either directly or through any department or agency of the federal government. CPSC can have up to five commissioners, one of whom serves as chair, and only three of whom can be from the same political party. CPSC's chair and commissioners are appointed by the president for seven-year terms with the advice and consent of the Senate.4 On October 1, 2019, Robert S. Adler (D) became acting chair by a majority vote of the Commission to replace the departing acting chair, Ann Marie Buerkle (R), whose term as commissioner expired at the end of October 2019.5 As a result, until another commissioner is nominated by the president and confirmed by the Senate, the Commission is evenly split with two Republican commissioners (Dana Baiocco and Peter A. Feldman) and two Democratic commissioners (Robert S. Adler and Elliot F. Kaye). President Biden will now be able to nominate and seek Senate confirmation of a Democrat to fill the open seat, resulting in a 3-2 Democratic majority. However, even before any such change occurs, in late 2020 and early 2021 there has been evidence of increased enforcement activity at CPSC for alleged late reporting, following a gap of more than two years since the most recent prior penalty settlement.
This desk reference first explains the Section 15 notification requirements, including the broad scope of CPSC's jurisdiction, and then discusses routes to a product safety recall, reporting and recall trends, and penalties for late reporting.
Duty to Notify CPSC Under Section 15 of the CPSA
Under CPSA Section 15, a manufacturer, importer, distributor, or retailer of a product subject to CPSC's jurisdiction that is distributed in commerce must inform CPSC "immediately" upon the receipt of information that "reasonably supports the conclusion that such product —
- fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard upon which the Commission has relied under section 9 [15 U.S.C. § 2058];6
- fails to comply with any other rule, regulation, standard, or ban under [the CPSA] or any other Act enforced by the Commission;7
- contains a defect which could create a substantial product hazard...; or
- creates an unreasonable risk of serious injury or death."8
The only exception to the reporting requirement is if the "firm"9 "has actual knowledge that the Commission has been adequately informed" of such defect, failure to comply, or risk.10
The statute and CPSC's interpretive regulations with respect to subparts (3) and (4) above do not provide a "bright line" as to when a duty to notify CPSC arises. The thrust of CPSC's regulations is to encourage companies to report early and often.11
Definition of "Consumer Product"
The CPSA defines a "consumer product" as:
any article, or component part thereof, produced or distributed (i) for sale to a consumer for use in or around a permanent or temporary household or residence, a school, in recreation, or otherwise, or (ii) for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation or otherwise....12
The CPSA excludes various products from the definition of a "consumer product," including motor vehicles and motor vehicle equipment, aircraft, boats, pesticides, tobacco, firearms, food, drugs, cosmetics, and medical devices—the safety of most of which is regulated by other agencies.13 The CPSA also excludes "any article which is not customarily produced or distributed for sale to, or use or consumption by, or enjoyment of, a consumer."14 In addition, buildings and structures are not "consumer products" under the statute.15
Companies rarely have challenged CPSC's assertion of jurisdiction in court, and only a few decisions have addressed the meaning of the statutory term "consumer product." In one case, an administrative law judge (ALJ) considered whether CPSC had jurisdiction over allegedly defective fire sprinkler heads.16 The ALJ in In re Central Sprinkler Corp. found that CPSC had jurisdiction over the sprinkler heads even though they were installed in commercial and industrial buildings, they were marketed primarily to professional contractors, and consumers did not actively use the product.
The ALJ focused on the fact that the sprinkler heads were produced and sold as distinct articles of commerce,17 and found that a "consumer product" need not be available "off the shelf" at the retail level or used in consumers' homes.18 The ALJ further found that "products which are primarily or exclusively sold to industrial or individual buyers would be included within the definition of consumer product so long as they were produced or distributed for use of the consumers."19 Finally, the ALJ found that the "weight of judicial opinion" determined that the "focus of the Act is directed towards consumers' exposure to hazards associated with products."20 Similarly, courts have focused on the exposure of consumers to harm in finding that CPSC has jurisdiction over aluminum branch circuit wiring systems,21 aerial tramways at state fairs,22 refuse bins,23 and amusement park rides.24
The Central Sprinkler decision is consistent with CPSC's historic broad interpretation of the term "consumer product" to include articles used by or for the enjoyment of consumers or having an effect on consumer safety. For example, CPSC has asserted jurisdiction over escalators and elevators, reasoning that consumers could be exposed to risks associated with those products. CPSC explained in a 1978 Advisory Opinion, "Congress' overriding concern in enacting the CPSA was to provide one agency with jurisdiction over products which could expose consumers to unreasonable risks of injury, regardless of where that exposure occurred."25 Consistent with that logic, CPSC has asserted jurisdiction to reach many seemingly "commercial" products, such as vending machines,26 cement-asbestos wallboard used in construction,27 blown-in fiberglass insulation,28 fire alarm equipment,29 supermarket freezer cases,30 and stadium light poles at schools and municipal fields.31 In practice, however, it can be difficult in some cases to predict where CPSC will draw the jurisdictional line, as CPSC has not articulated a bright-line test to rule out products that CPSC likely would agree are outside its jurisdiction but yet arguably are for the use or enjoyment of consumers or could affect their safety. Further, the scope of products that can expose consumers to potential harm is so broad that this fails to be a viable test for determining what is a consumer product. For example, defective equipment used in a chemical plant could explode, exposing consumers in the vicinity of the plant to harm. Yet such industrial equipment could not reasonably be viewed as a "consumer product" under the CPSA.
1 CPSC, Fiscal Year 2021 Operating Plan (Nov. 10, 2020), https://www.cpsc.gov/s3fs-public/FY2021-Op-Plan_FINAL-11-25.pdf?dtfFnkCk2wBvdQkcqpO10_MMJLOS91EE.
2 Pub. L. No. 92-573, 86 Stat. 1207 (1972), codified at 15 U.S.C. §§ 2051-2089.
3 Pub. L. No. 110-314, § 217, 122 Stat. 3016, 3058.
4 15 U.S.C. § 2053.
5 CPSC, Record of Commission Action, Election of Vice Chairman (Sept. 13, 2019), https://www.cpsc.gov/s3fspublic/RCA%20-%20Election%20of%20Vice%20Chairman.pdf?A3DcHdaoBAAdbKTrJ9GwoDL_PFYYeTKb.
6 The only voluntary standards upon which CPSC has so relied are provisions of (i) ANSI B175.1 (gasolinepowered chainsaws), and (ii) ANSI Z21.11.2 (gas-fired room heaters). See 16 C.F.R. Part 1115, App.
7 This provision was added by the CPSIA. Pub. L. No. 110-314, § 214(a)(2), 122 Stat. 3016, 3054.
8 15 U.S.C. § 2064(b). The "unreasonable risk" clause was added to the CPSA in 1990. Consumer Product Safety Improvement Act of 1990, Pub. L. No. 101-608, § 112(a)(2), (3), 104 Stat. 3110, 3115.
9 CPSC uses the term "firm" or "subject firm" to mean any manufacturer, importer, distributor, or retailer of a consumer product. See 16 C.F.R. § 1115.3(f).
10 15 U.S.C. § 2064(b).
11 Two other notification requirements are beyond the scope of this desk reference but should not be ignored: (i) manufacturers of consumer products must notify CPSC upon settling or receiving adverse judgments in three or more lawsuits in state or federal court alleging "death or grievous bodily injury" from the same model of a consumer product during designated 24-month periods (e.g., 1/1/2021 through 12/31/2022), see 15 U.S.C. § 2084; 16 C.F.R. §§ 1116.3(b)-(c); and (ii) manufacturers, importers, distributors, and retailers must notify CPSC within 24 hours of receiving a report that a child (a) choked on a marble, small ball, latex balloon, or small part contained in a toy or game, and (b) died, suffered serious injury, ceased breathing for any length of time, or was treated by a medical professional. See Child Safety Protection Act, Pub. L. No. 103-267, 108 Stat. 722 (1994); 16 C.F.R. Part 1117.
12 15 U.S.C. § 2052(a)(5).
13 Id. While "motor vehicles," as defined in Section 102(3) of the National Traffic and Motor Vehicle Safety Act of 1966 (49 U.S.C. § 30102(a)(7)), are outside CPSC's jurisdiction, CPSC has jurisdiction over off-road vehicles. See, e.g., 15 U.S.C. § 2089; 16 C.F.R. Part 1420; Press Release, CPSC, Recreational Off-Highway Vehicles Recalled by American Honda Due to Crash and Injury Hazards (Recall Alert) (Dec. 3, 2020), https://cpsc. gov/Recalls/2021/Recreational-Off-Highway-Vehicles-Recalled-by-American-Honda-Due-to-Crash-andInjury-Hazards-Recall-Alert; Press Release, CPSC, John Deere Recalls Crossover Gator Utility Vehicles Due to Crash Hazard (Dec. 21, 2017), https://www.cpsc.gov/Recalls/2017/john-deere-recalls-crossover-gatorutility-vehicles-due-to-crash-hazard-recall-alert. In addition, although "motor vehicle equipment," as defined in 49 U.S.C. § 30102(a)(8), is also excluded from the definition of "consumer product," CPSC has exercised jurisdiction over products that can be used in both motor vehicles and the home, to the extent that the hazard presented does not arise from use in the motor vehicle, such as infant seats that can be used in an automobile or in a stroller frame. See, e.g., Press Release, CPSC, Combi USA Recalls Stroller and Car Seat Combos Due to Fall Hazard (May 4, 2017), https://www.cpsc.gov/node/35271.
14 15 U.S.C. § 2052(a)(5).
15 See CPSC v. Anaconda Co., 593 F.2d 1314, 1320 n.19 (D.C. Cir. 1979) (CPSC concedes that it lacks jurisdiction over housing).
16 In re Central Sprinkler Corp., CPSC Docket No. 98-2 (June 4, 1998).
17 Id. at 11-12.
18 Id. at 10-12, discussing Anaconda, 593 F.2d at 1319, and Kaiser Aluminum & Chem. Corp. v. CPSC, 574 F.2d 178 (3d Cir. 1978).
19 Id. at 14 (quoting Anaconda, 593 F.2d at 1322).
20 Id. at 14.
21 Kaiser Aluminum, 574 F.2d at 181-82 (finding that CPSC has jurisdiction over aluminum branch circuit wiring systems); but see Anaconda, 593 F.2d at 1320 (explaining that the term "consumer product" was designed to include the various ways "through which consumers acquire products and are exposed to the risks of injury associated with those products," but remanding for a determination of whether CPSC has jurisdiction over aluminum branch circuit wiring systems).
22 See State Fair of Tex. v. CPSC, 650 F.2d 1324, 1329 (5th Cir. 1981) (holding that aerial tramway was a "consumer product" within the meaning of the CPSA, and CPSC was authorized to enter state fairgrounds to inspect aerial tramway and relevant documents), vacated as moot, 454 U.S. 1026 (1981).
23 See U.S. v. One Hazardous Prod. Consisting of a Refuse Bin, 487 F. Supp. 581, 584 (D.N.J. 1980).
24 See CPSC v. Chance Mfg. Co., 441 F. Supp. 228, 231, 233 (D.D.C. 1977) (jurisdiction depends upon the extent to which consumers were exposed to the risks associated with the product); but see Robert K. Bell Enters. v. CPSC, 645 F.2d 26 (10th Cir. 1981).
25 See Adv. Op. No. 262 (Feb. 27, 1978), https://www.cpsc.gov/s3fs-public/pdfs/blk_media_Elevators.pdf.
26 See Adv. Op. No. 125 (Oct. 23, 1973), https://www.cpsc.gov/s3fs-public/pdfs/blk_media_125.pdf.
27 See Adv. Op. No. 55 (Dec. 21, 1973), https://www.cpsc.gov/s3fs-public/pdfs/blk_media_55.pdf.
28 See Adv. Op. No. 205 (May 21, 1975), https://www.cpsc.gov/s3fs-public/pdfs/blk_media_205.pdf. See also 16 C.F.R. § 1209 (interim standard for cellulose insulation).
29 See Adv. Op. No. 181 (Feb. 12, 1975), https://www.cpsc.gov/s3fs-public/pdfs/blk_media_181.pdf.
30 See Press Release, CPSC, Commercial Frozen Food Merchandisers Recalled by Tyler Refrigeration Due to Fire Hazard (Dec. 11, 2008), https://www.cpsc.gov/Recalls/2008/commercial-frozen-food-merchandisersrecalled-by-tyler-refrigeration-due-to-fire-hazard.
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