CPSC Proposal to Expand Penalties

Jul. 14, 2006

On July 12, 2006 the CPSC proposed a new rule meant to clarify the factors considered in determining the appropriateness and amount of a civil penalty for violations of the Consumer Products Safety Act (“CPSA”).  Section 19(a) makes any knowing violations of enumerated acts in the CPSA subject to civil penalty.   For more information on the prohibited acts, please consult section 19(a) of the CPSA.

The proposed rule expands on and incorporates the five statutory factors already enacted which are:

• The nature of the product defect,
• The severity of the risk of injury,
• The number of defective products distributed,
• The occurrence or absence of injury, and
• The appropriateness of the penalty in relation to the size of the business of the person charged.

CPSC is proposing that it will consider the additional factors set forth below in setting the amount of the civil penalty:

• A firms previous record of compliance with CPSA requirements;
• Timeliness of a firms response to relevant information;
• Safety and compliance monitoring;
• Cooperation and good faith;
• Economic gain from any delay or non-compliance with CPSC safety or reporting requirements;
• A products failure rate; and
• Any other pertinent factors.

Written comments on this proposal are due to the CPSC Office of the Secretary no later than August 11, 2006.  For more information on the proposed rule, please consult the CPSC’s website or the Federal Register. In addition if you would like our assistance in submitting comments, please contact any BR&C office.