United States: Recall, Enforce, Repeat! CPSC And DOJ Team Up For Another Enforcement Action

Last Updated: June 29 2015
Article by Erin M. Bosman, Julie Y. Park and Austin Marsh

The United States Consumer Product Safety Commission (CPSC) continues to escalate its enforcement efforts. Last week, the United States Department of Justice, on behalf of CPSC, filed suit against Spectrum Brands, Inc. ("Spectrum"). United States v. Spectrum Brands, Inc., No. 3:15-cv-00371 (W.D. Wisc.). This is CPSC's second enforcement lawsuit filed in 2015—yet another year that will likely set records for CPSC penalties.

The complaint alleges that Spectrum not only failed to comply with CPSC reporting requirements, but also allowed hundreds of defective coffeemakers to be sold after a 2012 recall of the products. CPSC seeks both civil penalties and injunctive relief. While Spectrum has indicated that it will "vigorously defend itself" in this matter, this CPSC-backed lawsuit should be viewed as a warning to similarly situated companies deciding whether or not to report products containing potential hazards. This is especially true in light of the previous CPSC-backed lawsuit filed less than two months ago against a retailer for alleged reporting violations and misrepresentations. Companies may also want to look to this lawsuit when deciding whether or not to pursue settlement options following a CPSC civil penalties investigation in order to avoid litigation.


The Consumer Product Safety Act (CPSA) requires that manufacturers, distributors, and retailers "shall immediately inform" CPSC of any potential substantial product safety hazards or unreasonable risks of serious injury associated with their products. According to CPSC, "immediately" means "within 24 hours." 16 C.F.R. § 1115.14(e).


The complaint alleges that in November 2014, Spectrum merged with Applica Consumer Products, Inc. ("Applica"), with Spectrum surviving and assuming all assets and liabilities of Applica.

According to the complaint, Applica manufactured approximately 150,000 coffeemakers between January 2008 and April 2012. As early as February 2009, Applica began hearing from highly concerned consumers who reported that the coffeemaker's carafe handle could break and allow hot coffee to spill. The complaint lists 21 specific consumer reports received from 2009 through 2011. Many of these consumers were obviously concerned and upset. They saw the carafe as a potential danger, making comments that "[t]his carafe should be recalled because of burn danger!!!" and "this is a seriously defective product!"

In March 2012, Applica was served with a class action complaint over the carafe handles. It wasn't until April 3, 2012, that Applica submitted its Section 15(b) report to CPSC. On April 27, 2012, Applica followed up with an amended and supplemental report. By that time, Applica had received approximately 1,600 consumer reports "of the handle splitting, breaking, or separating from the carafe of the Coffeemaker, including more than 60 reports of related burns."

On June 1, 2012, Applica and CPSC issued a joint press release announcing a recall of the products. Initially, the remedy was a replacement carafe but the recall was updated to ask consumers to stop using the coffeemakers altogether and contact Applica for a full refund.

The complaint charges Spectrum with knowingly failing to "immediately inform the CPSC upon obtaining information that reasonably supported the conclusion that the Coffeemaker created an unreasonable risk of serious injury, in violation of 15 U.S.C. §§ 2064(b)(4) and 2068(a)(4)." The government claims that the violation was ongoing from the time Spectrum obtained information concerning the "unreasonable risk of serious injury" until it adequately reported this information to CPSC.

The alleged violations extend beyond reporting obligations. For nine months following the recall, Applica continued to distribute several hundred recalled coffeemakers. Applica notified CPSC of this error in late July 2013. On August 15, 2013, Applica and CPSC issued a second recall notice for the 641 coffeemakers that were sold after the initial June 1, 2012 recall.

On top of Applica's past violations, the complaint attacks Spectrum's current compliance efforts (as Spectrum assumed Applica's liabilities). According to the government, Spectrum still hasn't "implemented and maintained a reasonable and effective program or system for complying with the reporting requirements of the CPSA and related regulations and the CPSA's prohibition on the sale, distribution or importation of recalled products."

The complaint seeks civil penalties for "each separate violation, and the related series of violations." It also seeks injunctive relief in the form of compliance and the establishment of an internal compliance program.


This lawsuit continues the trend of increased CPSC enforcement, which has largely been directed at unsafe products and associated reporting violations. CPSC-backed lawsuits have historically been rare. Before this year, CPSC had only filed three lawsuits and one administrative complaint, all seeking mandatory recall remedies under Section 15 of the CPSA. But in the past two years, CPSC has significantly increased its assessment of civil penalties stemming from companies' failures to report potential defects.1 Now, in a flurry of activity, CPSC has initiated two separate lawsuits enforcing provisions of the CPSA within a two-month period.

This lawsuit is likely the result of settlement negotiations that have fallen through. Most civil penalties investigations brought by CPSC end in settlement. The alternative isn't great. CPSC carries a big stick and isn't afraid to wield it, as seen with the litigation and publicity surrounding rare earth magnets.2 Going to the mat with CPSC means litigating in federal court—a very public forum compared to settlement negotiations. But when a company believes it has strong defenses or a sympathetic position and CPSC still demands high civil penalties and rigorous internal compliance programs, companies may be willing to fight CPSC in open court. Depending on the outcomes of these recent lawsuits, CPSC may become more aggressive in referring cases to the Department of Justice. Increased litigation may encourage CPSC to raise penalty demands and, as a result, increase the pressure on companies to settle.

To avoid this pressure, we advise manufacturers, distributors, and retailers of products to maintain clear and well-understood policies for evaluating and reporting on potential product hazards. These policies should be up-to-date and clearly communicated to company employees. Additionally, recalling companies should implement safeguards and procedures to avoid distributing recalled products into the stream of commerce. Once in CPSC's crosshairs, careful negotiation with a healthy dose of cooperation may be the best solution for companies fearful of the high costs, adverse publicity, and the uncertainty that comes with litigation.


1 "CPSC Penalties to Increase Beyond 'Cost of Doing Business,'" Morrison & Foerster Client Alert, Mar. 3, 2015, available at http://www.mofo.com/~/media/Files/ClientAlert/2015/03/150303CPSCPenaltiestoIncrease.pdf.

2 See "The Epic Buckyballs® Saga Settles," Morrison & Foerster Client Alert, May 20, 2014, available at http://www.mofo.com/~/media/Files/ClientAlert/140530BuckyballsSagaSettles.pdf.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Erin M. Bosman
Julie Y. Park
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions