Expert Recall

By Howard Aughinbaugh

I have had the privilege to hear Consumer Product Safety Commission (CPSC) Chairman Inez Tenenbaum speak on a number of occasions over the last six months. Most recently, I was in the audience during her keynote address on the first day of the Defense Research Institute’s (DRI) Annual Product Liability Conference.

Each time I’ve heard the Chairman speak, her messages have been consistent. While she doesn’t always speak specifically about the recall process and recall regulations, there are several major product liability themes that come up over and over again in her speeches, including:

• The CPSC is an agency on the rise.
• The CPSC will be fair, but firm.
• The CPSC’s mission is to protect the safety of the American consumer.
• The Chairman is personally focused on protecting our most vulnerable citizens – babies and children.
• The Consumer Product Safety Improvement Act (CPSIA) gave the CPSC new powers and new authority. Under her leadership, the agency will have no fear in using them.
• Moving forward, the CPSC will be creative in enforcement activities.

Elaborating on enforcement, the Chairman cited a $2 million fine levied against Daiso Holding USA earlier this year. While the size of the fine was substantial, the real news was that the CPSC, working in cooperation with the Department of Justice, obtained an injunction against Daiso that prohibits them from importing, selling, or distributing children’s products or toys in the United States, unless the company satisfies a number of specific requirements. 

Also discussing the CPSC’s goals and authority during the Product Liability Conference was Stephen G. Morrison, a partner at Nelson Mullins Riley & Scharborough LLP.  Morrison gave a plenary address on the second day of the conference titled “Staying in Step with CPSIA: A How-To Guide in Handling Reportable Incidents and Addressing Consumer-Reported Incidents in the CPSC’s Database.”

Morrison began his address by acknowledging the Chairman’s remarks and sharing with the audience his past working relationship with her. His description of her validated my own perceptions. Chairman Tenenbaum is a focused individual with a track record of accomplishing what she sets out to do, and she has articulated a clearly defined mission for her agency.  

While Morrison shared with the hundreds of attorneys in the room details about the specific steps companies and their counsel should consider regarding reporting obligations, the reporting process, and the data necessary to substantiate a report, he made clear that the overall theme of his speech was transparency.

Morrison explained that there is an increasing need for transparency in all that we do, particularly when communicating with regulatory agencies and consumers. After all, social media and electronic communication make the global exchange of information almost instantaneous. Additionally, Congressional oversight and proposed regulatory changes in Washington seem focused on making sure that regulatory agencies manage their affairs in a transparent manner.

Morrison encouraged the audience that companies must be transparent in reporting incidents to the agency in order to establish trust and create a better working relationship moving forward.

While there is no perfect process, there is sound judgment and action. Once a determination has been made that a reportable incident has occurred, the right thing to do is report it and let in the light. Chances are the road to recovery will be smoother if you act in a transparent manner.

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