During our Consumer Product Safety Commission mid-year webinar last month, we noted how the CPSC is reaching deep into its tool bag for enforcement measures and has been looking to impose severe civil penalties on non-compliant companies. We also anticipated Senate approval of two new CPSC commissioners.

Since then, all three talking points have come to fruition in what has been a busy few weeks for the CPSC.

Imminent Hazard Action

The CPSC, through the Department of Justice, filed a Consumer Product Safety Act (CPSA) Section 12 imminent hazard action last month against Lakkzoom, seeking court-ordered relief against the manufacturer of immersion water heaters. An imminent hazard action is a federal court proceeding that authorizes the CPSC to seek emergency judicial relief against consumer products that pose an immediate and serious danger to the public.

In this case, the commission seeks to prevent additional injuries associated with Lakkzoom’s products, which allegedly can overheat and catch fire within minutes when energized either completely or partially out of water. This was the first time in nearly 40 years that Section 12 has been used by the CPSC.

Civil Penalty

The CPSC announced last week a nearly $17 million settlement with Johnson Health Tech Trading for failing to timely report an alleged defect in one of its treadmills. The announcement notes the company received nearly 900 reports of the treadmills “unexpectedly accelerating, stopping, or changing speed, including at least 71 reports of consumer injury” between March 2018 and October 2022, when the product was recalled. JHTT took steps to mitigate the fall hazard through production changes in February 2021 and September 2021 but consumer incidents continued to occur and JHTT did not immediately report to the commission as required.” The product was recalled on October 27, 2022.

The settlement shows years can pass between a report, recall and the ultimate resolution of a penalty investigation, as well as the commission’s appetite for large civil penalties.

It also highlights the risk of product improvement without reporting. The settlement agreement also requires that JHTT and an affiliated company maintain internal controls and procedures designed to ensure compliance with the CPSA, including the appointment of a product safety professional. The companies are also required to submit annual reports regarding their efforts for three years.

New Commissioners

The U.S. Senate last week confirmed Karen Sessions and Brien Lorenze as commissioners. They join Acting Chairman Peter Feldman and return the commission to a quorum now made up entirely of Republican appointees. The existence of a quorum will allow CPSC to take a range of actions that require a commission vote, such as promulgation of new safety rules and approval of civil penalty settlements, to name two of the most important such actions.

Miles & Stockbridge’s CPSC team is available to assist businesses interacting with the CPSC, as well as answer questions about the commission and product safety matters.

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