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Product Safety Conference Concludes with CPSC Chairman Keynote Address

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Yesterday was the last full day of the 2012 ICPHSO Annual Meeting and Training Symposium.

The day featured a keynote by U.S. Consumer Product Safety Commission (CPSC) Chairman Inez Moore Tenenbaum (pictured delivering the keynote)

   Some of her key points:

  • CPSC is being proactive at ports.  In 2010 & 2011, 6.5M units of over 2,000 products were seized.
  • Independent 3rd party testing is set up and running well.
  • A strong CPSC is good for business – it provides a more level playing field.
  • Standards development, recalls process, and federal rulemaking will be priorities in 2012.
  • Successful Saferproducts.gov public database will have one year anniversary on March 11.  It has had 6,300 unsafe product reports.

Penalties and Enforcement
Also featured was a panel on Penalties and Enforcement, featuring Cheryl Falvey, U.S. CPSC General Counsel.  Some of the points made there:

In August 2009, the maximum penalty went from $1.8M to $15M.

If the duty to report occurred in 2008 but was not reported until 2010, the violation occurred in the higher penalty period.

A failure to report and the deliberate subsequent sale of recalled product doubles the maximum penalty to $30M.

There has been less self-reporting and more anticipated litigation since the penalty increase.

There is no formula to calculating a penalty.  Statutory factors include:

  • Nature
  • Circumstance
  • Extent and gravity of the violation

Other factors include:

  • Safety/compliance program
  • History of noncompliance
  • Economic gain for noncompliance
  • Failure to respond timely to staff requests

Every settlement is subject to approval by CPSC commissioners.  Then it is listed in the Federal Register for public comment.

The CPSC is looking for a case that makes a statement.  “This has a deterrent effect,” says Falvey.

Individuals are now being pursued for felony criminal penalties.  This often happens with Subchapter S corporations, where the individual is virtually the same as the corporation.

The CPSC can be creative.  E&B Giftware was given a $550,000 civil penalty, with all but $50,000 suspended if they met requirements of the settlement.

The whistleblower provision in the Consumer Product Safety Improvement Act (CPSIA) of 2008 has only been used once.  Calls are more likely to be a trade complaint from a competitor.