Product Safety and Recalls: An Excerpt from the Advertising Law Tool Kit

By Melissa Landau Steinman & Erin Maus

Join us over the next few months as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of product safety and recalls in this week’s episode. 

On rare occasions, notwithstanding the best of engineering design and testing, a consumer product contains a manufacturing or design defect, or a failure of adequate instructions, that results in its being unsafe for use and a potential for causing bodily harm. This most often reveals itself when consumers bring the matter to the attention of a manufacturer, retailer, or direct-response marketer, or upon receipt of a notice from the Consumer Product Safety Commission (CPSC).

Under U.S. law, the manufacturer, importer, distributor, or retailer—which can include a marketer—has an obligation to immediately report to the CPSC information that reasonably supports the conclusion that a product:

• Contains a defect that could create a substantial product hazard, or otherwise creates an unreasonable risk of serious injury or death for consumers
• Fails to comply with pertinent rules, regulations, standards, or bans enforced by the CPSC
• Has been specified as a substantial product hazard by the CPSC (e.g., certain children’s upper outerwear with drawstrings, hair dryers without immersion protection devices, padded crib bumpers, and inclined sleep products for infants)
• Fails to comply with a product safety rule or with a voluntary consumer product safety standard upon which the CPSC has relied
• Was subject to certain types of lawsuits

Companies are given an opportunity to investigate whether a reporting obligation has been triggered, but such investigation must be reasonable under the circumstances. To ensure compliance with reporting requirements, these parties should stay on top of safety and warranty reports about their products and those of their competitors by monitoring direct consumer complaints and warranty claims; online reviews; information on the CPSC’s database; and reports received from retailers, the Better Business Bureau, and elsewhere.

Reporting to the CPSC does not mean that a company has to actually engage in a consumer-level recall of the product. That would be a decision that would be made in conjunction with the CPSC, based upon closer examination and evaluation of the product, potentially including testing to see if the incidences of injury or indications of possible harm are the result of simple consumer misuse; a one-off manufacturing defect; a lapse in quality control; or a larger design issue. Even if a recall is warranted, it doesn’t mean that the marketer necessarily has to recapture the product from the marketplace, particularly if another remedy is feasible, such as providing a fix to consumers that would correct the defect. Failure to report information in a timely manner to the CPSC, however, can lead to a claim by the CPSC for penalties, regardless of the ultimate resolution with respect to the kind of corrective action that might be warranted.

The initiation of a consumer-level product recall, even if done in consultation and agreement with the CPSC, is typically voluntary. Even then, such voluntary corrective actions could result in lawsuits alleging false advertising, including class action filings, particularly where the advertising copy for the product makes claims about the product that appear to be at odds with the announced reason for the recall.

However, the initiation of such a voluntary recall is not a judicial concession of liability by the recalling party as to the existence of a product defect or that claims made with respect to the characteristics of the product are not true. It remains incumbent on a plaintiff to prove the elements of any claim he or she brings, including a false advertising claim. Mandatory recalls are very rare and require the CPSC to bring a legal action against a party to obtain a court order mandating a recall. To learn about product safety and recalls, contact Erin Maus or Melissa Steinman. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter.