Today the Consumer Product Safety Commission ("CPSC") announced that Black & Decker (U.S.) Inc. has agreed to pay a $960,000 civil penalty to settle allegations that the company failed to report safety issues with its Grasshog XP grass trimmers/edgers to the CPSC in a timely manner. The CPSC also alleges that Black & Decker withheld information requested by the CPSC staff.
Section 15(b) of the Consumer Product Safety Act requires companies to report immediately to the CPSC if they have information that a product could create a "substantial product hazard" or create an unreasonable risk of serious injury or death. The CPSC alleges that Black & Decker had received a large number (at least 80) of safety complaints and "hundreds" of warranty claims before reporting to the CPSC. There is also an implication that the company may have conducted a "silent recall" in January 2006 without the CPSC. Although the CPSC staff requested information from Black & Decker in May 2006, Black & Decker allegedly failed to provide information about certain defects. The staff closed its file based on the information it received, but the closing letter included boilerplate language reminding the company that it must notify the staff if there was a different risk or additional information. At the time of the letter, Black & Decker allegedly had received 216 safety complaints and approximately 14 injury reports, but "silently acquiesced in the file closure without revealing this information." The company then provided the additional information in October 2006 and recalled the product in July 2007.
Although the CPSC now has authority to seek up to $15 million in penalties, this is one of the higher civil penalties the CPSC has obtained, particularly for a settlement involving only one product, no children’s products, and no filing of a lawsuit. This could signal a more aggressive CPSC, particularly if it thinks that the company has withheld information, received large numbers of incident reports, or conducted a silent recall.