South Carolina Lawyer
SC Lawyer, November 2010, #4.
Consumer Product Recalls: An Overview
South Carolina LawyerNovember 2010 Consumer Product Recalls: An OverviewBy J. Michael Jordan Stories about recalls and defective products fill the news. Whether it is beef with E-coli, runaway cars, drop-side cribs or lead paint in children's toys, stories about products that pose a danger to the public appear daily. This is not a new phenomenon: product recalls, especially automotive recalls, have been with us for decades.
Lawyers and the public understand the effect of a recall. However, few lawyers are familiar with the why and how. What precipitates a recall? What do the company, the lawyer and government do if there is a defective product? This is a summary of the law, the procedures and the roles of the participants when a product poses a risk to the public.
The legal basis for recalls
Congress has the power to regulate interstate commerce. Section 8 of the U.S. Constitution grants Congress the right to regulate commerce " with foreign nations, and among the several states." From time to time Congress determines that regulation is appropriate for certain areas of commerce or classes of products. Notable examples are the Food, Drug, and Cosmetic Act, the Boat Safety Act and the Consumer Product Safety Act.
The Consumer Product Safety Act, 15 U.S.C. § 2051 et seq., enacted in 1972, is representative of such a determination. The Act makes findings, defines its purpose, creates an agency (the Consumer Product Safety Commission), delegates Congress' regulatory and enforcement power to the Commission and provides funding. The Consumer Product Safety Commission (CPSC), pursuant to this delegated authority, then promulgates standards and regulations using federal rulemaking procedure.
The purpose of the Act is to protect the public from "unreasonable risk" in "consumer products." To understand the Act, one needs to grasp the meaning of these two terms. The term unreasonable risk is not a defined term in the Act. Interestingly, the word defect is not in the Act at all. The key to understanding an unreasonable risk and defective product is in the regulations, which, for the CPSC, appear in Title 16 of the Code of Federal Regulations. The regulations use the term "defect" and define the word by its common usage: "a fault, flaw, or irregularity that causes weakness, failure, or inadequacy in form or function."
The Act defines a consumer product as: " any article, or component part thereof, produced or distributed for personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, in school, in recreation, or otherwise" 15 U.S.C. § 2052(a)(1)(ii). The breadth of the definition was established early on in U.S. v.Anaconda Co., 445 F. Supp. 486 (1977), and U.S. v. One Hazardous Product Consisting of aRefuse Bin, 487 F. Supp. 581 (1980).
Although the CPSC has regulatory authority over consumer products, it is rare for the Commission to have specific standards or regulations for a particular product. Stated differently, while an electric razor is a consumer product within the regulatory authority of the CPSC, there are no CPSC standards or regulations for the design or function of an electric razor. Of the tens of...