August 27, 2009

E-Mail This Article Printer-Friendly Version

At the prompting of Congress via the CPSIA Section 217, CPSC earlier this month, moved to clarify what it considers when assessing civil penalties. Our premium, sister service Product Safety Letter covered issue in the August 24 and August 17 issues. Below is an excerpt from the latter. The agency emphasizes that these seven areas are not intended to be exhaustive, and -- as Commissioner Thomas Moore pointed out in his comments when voting for the interim final interpretive rule -- they shouldn't be surprising because they're based on what CPSC has been doing for years. In any event, the agency explains that it will focus its attention on:

Product Safety Forum is a free service of Product Safety Letter. Its mission is twofold: to promote frank and open airing of product safety issues and to provide advice and guidance from top experts in the field. Do you have an idea or article you think would make a great piece for Product Safety Forum, including commentary or reaction to this one? Then email Publisher Sean Oberle to discuss it. To read more stories, see the archives.

• "The nature, circumstances, extent and gravity of the violation," including the circumstances of the violation and how many provisions were violated.
• The "nature of the product defect," including whether it meets the definition of substantial product hazards or is a violation of a rule, regulation, standard or ban.
• The "severity of the risk of injury," including the potential for death, injury, medical treatment or hospitalization; the likelihood that injury would occur; the reasonable foreseeability of misuse; and the population at risk, especially children, the elderly or those with disabilities.
• "The occurrence or absence of injury" associated with the product and violation.
• "The number of defective products distributed," including the numbers of products imported and the numbers placed into the stream of commerce.
• "The appropriateness of such penalty in relation to the size of the business of the person charged including how to mitigate undue adverse economic consequences on small businesses," including the number of employees, company net worth, and annual sales. CPSC notes that it must mitigate only "undue" economic hardship, and what CPSC deems "undue" will vary depending on not only the company's economic situation, but also on the "nature, circumstances, extent and gravity of the violation."
• "Other factors as appropriate," including whether the company has in place a system for collecting and analyzing safety information, the company's compliance history, and whether the company has gained economically from the violation.