Wednesday, February 6, 2008

Public Citizen Finds CPSC Delays its Warnings

Public Citizen released a report last week titled Hazardous Waits: CPSC Lets Crucial Time Pass Before Warning Public About Dangerous Products.  The report concluded that the Consumer Product Safety Commission (CPSC) takes roughly 2.7 years between learning about a defective product and warning the public.  As I've contended in my article, CAFA's Impact on Litigation as a Public Good, this type of bureaucratic lag time makes private decentralized enforcement essential.  Here's Public Citizen's press release:

U.S. Consumer Protection Officials Delay Months to Notify Public of Dangerous, Defective Products, Public Citizen Study Finds

Recalls of Hazardous Goods Often Take More Than Three Years to Begin

WASHINGTON, D.C. – Despite a law requiring manufacturers to provide the Consumer Product Safety Commission (CPSC) with “immediate” notification of dangerous products, the agency typically delays nearly seven months after learning of dangerous, defective products before telling the public, a Public Citizen study of CPSC settlements published in the Federal Register reveals.

The study, “Hazardous Waits: CPSC Lets Crucial Time Pass Before Warning Public About Dangerous Products,” covers 46 cases since 2002 in which the CPSC fined manufacturers for failing to adhere to the law requiring prompt reporting. In addition, companies fined for tardy reporting took an average of 993 days – 2.7 years – between learning of a safety defect in their products and notifying the CPSC. Because the agency publishes information about only those settlement agreements in which penalties are imposed, details about other delays and recalls are not publicly available.

Perhaps as shocking, the CPSC then took an average of 209 additional days before disclosing the information to the public – even though each case concerned a product defect so dangerous that the item was recalled. Under current law, the CPSC cannot disclose information about dangerous products without court approval or manufacturer agreement.

The products included coffee makers and vacuum cleaners prone to catching fire, treadmills that spontaneously accelerated to an Olympic miler’s pace, all-terrain vehicles with throttles that became stuck in the “go” position, bicycles with forks that could break under normal use, and infant swings that could cause strangulation and were implicated in the deaths of six infants.

“There’s no excuse for manufacturers waiting nearly three years before telling the CPSC about a defective product that can kill people – or for the CPSC taking another seven months to negotiate a recall and warn the public,” said Joan Claybrook, Public Citizen president. “Manufacturers now have the power to hamstring the agency. Given these inordinate delays, the law must be changed to allow the agency to inform consumers and give it enough money, authority and enforcement muscle.”

Details of the settlement agreements reveal that manufacturers have taken a cavalier attitude toward the disclosure law. In addition to failing to notify the CPSC of safety defects – often after receiving hundreds of notices from their customers – many manufacturers withheld key details from the agency when they finally did file. These details included customer complaints about products, efforts to redesign products to resolve design flaws and information about the death of a consumer.

Although the CPSC fined manufacturers for late reporting, the agency itself was slow in providing the same information to the public. For example, the agency received a report in February 2001 about an all-terrain vehicle with an oil line subject to disconnecting and spewing steaming oil on its driver and surroundings. The defect was eventually blamed for injuring 18 people, some with serious burns, and causing 42 fires. But the CPSC did not tell consumers until April 2003 – more than two years after the manufacturer informed it of the hazard.

One major cause of delay is the manufacturers’ ability to sue the agency to block public disclosure of information about hazards. The mere threat of lawsuits deters the agency from acting.

“It is ridiculous that the CPSC has to obtain manufacturers’ consent before informing the public about hazardous products,” said David Arkush, director of Public Citizen’s Congress Watch division.    “The nation’s product safety agency shouldn’t have to ask for permission to do its job. The law must be changed.”

Among Public Citizen’s findings:

  • Graco waited 11 years to report its faulty infant swing, which was linked to reports of 181 falls that resulted in six deaths and nine serious injuries, including bone fractures and concussions. Graco made the report only after CPSC staff contacted the company.
  • Hoover waited five years to report a vacuum cleaner with a faulty switch that had caused at least 96 fires. The CPSC then took another 279 days before negotiating a recall and informing the public.
  • By February 2000, Polaris Industries had received 1,147 reports of faulty oil lines on its ATV, including 42 instances where the hot oil started a fire and 18 cases in which the oil seriously burned a rider. But the company didn’t report the defect to the CPSC for another year.

The CPSC relies on prompt and thorough reporting by manufacturers because the agency conducts little independent testing and inspects few products. Public Citizen’s findings illustrate the need for Congress to give the agency more authority and resources. In crafting legislation to reauthorize the CPSC, which is currently under negotiation in Congress, lawmakers should:

  • Provide the CPSC with the freedom to inform the public about risks promptly. Currently, the CPSC cannot act unilaterally to inform the public about hazards without risking lawsuits by manufacturers. Congress should give the agency the ability to provide critical information to the public without undue interference and delays by industry.
  • Grant authority to levy higher fines and seek effective criminal penalties. The CPSC’s current cap on civil penalties of $1.8 million per violation of reporting requirements is a pittance compared to the cost of conducting recalls. This gives companies an incentive to leave the agency in the dark about defects. Congress should eliminate the cap or raise it to at least $100 million per violation.
  • Provide the CPSC with a significantly larger budget and staff. The agency received a meager $63 million in 2007 to protect the public from dangers posed by millions of products. Congress should boost it to at least $150 million.
  • Give state attorneys general broader enforcement powers. A major criticism of the CPSC is its failure to enforce the law effectively. Congress should allow state attorneys general to enforce the law and give them authority to seek all of the remedies available to the CPSC.

READ the study and more about the problems with the CPSC.

ECB

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