Practice Tip: Lessons from the 'Bumbo Baby Sitter' Recall

In the wake of a consumer product company's decision to offer revised warning labels for roughly one million of its baby seats, plaintiffs' lawyers have filed at least two new product liability lawsuits against the company and one of the seat's retailers, including a putative nationwide 'economic loss' class action. This 'recall' highlights significant risk management issues for consumer product manufacturers, including a possible 'disconnect' between written warnings and advertising that allegedly depicts improper usage of their products.

The Bumbo Recall and Its Fallout

Bumbo (PTY) Ltd. ('Bumbo') is a South African company that manufactures the 'Bumbo Baby Sitter,' a coated foam seat designed to allow infants between three and 14 months of age to sit upright on the floor. On Oct. 25, 2007, Bumbo, in conjunction with the U.S. Consumer Products Safety Commission ('CPSC'), announced a 'recall' of roughly one million Baby Sitters, based on 28 reports that children who had been placed in the seats above floor level had managed to wriggle out of the seats and fall to the floor. Through a variety of media, including its own Web site, Bumbo notified owners of the Baby Sitter that Bumbo would provide a new warning label emphasizing that caretakers should not place the baby seat above floor level and should never leave a child unattended in the baby seat. Because it had already included such warnings both on the Baby Sitter itself and in the seat's packaging and use instructions, however, Bumbo, in its notice to owners, specifically denied that there was any 'defect' in the seat, and it did not offer to repair or replace the seat or to refund its purchase price.

Prior to the recall, and despite these existing warnings, a California couple had allegedly placed their six-month-old child in the seat on a tabletop, where he escaped from the seat and fell to the floor, fracturing his skull. Two months before the recall, the couple sued Bumbo and Target Corporation, the seat's retailer, under a variety of product liability theories, including 'failure to warn.' See Lamm v. Bumbo, et al., Case No. SCN 241318 (Superior Court of California, County of Sonoma, Aug. 16, 2007). Following the public 'recall' announcement, a Texas couple filed suit against Bumbo and Target under similar product liability theories. See Stanley v. Target Corp., et al., Case No. H-07-3680 (S.D. Tex. Oct. 31, 2007).

Shortly thereafter, the Lamm lawyers filed a putative nationwide class action against Bumbo and Target, this time alleging various 'breach of warranty' and 'deceptive trade practices' claims. See Whitson v. Bumbo, et al., Case No. CV-07-5597-CW (N.D. Cal. Nov. 7, 2007). Although the Whitson complaint specifically acknowledges Bumbo's earlier warnings about the proper use of the Baby Sitter, it alleges that: a) the warnings are in a 'miniscule font,' b) the warnings lack a 'standard exclamation point inserted within a yellow triangle,' and c) advertising for the seat depicts children perched atop 'tables, chairs and stools' while seated in the Baby Sitter.

Risk Management in the Bumbo Recall

In light of the original warnings and the post-recall lawsuits, one may reasonably ask whether, on balance, the recall notification will inure to Bumbo's benefit, or to its detriment. This is a complex question that highlights many significant aspects of litigation risk management, including the decision to recall and the manner of recall.

The Decision to Report and Recall

Given how the recall unfolded, it seems clear that Bumbo reported its concerns to the CPSC, cooperated with the Commission, and undertook the recall voluntarily. In doing so, Bumbo intentionally subjected itself to broad public scrutiny and, evidently, to adverse legal action. Was this a smart move? Let's examine the alternative.

If Bumbo had declined to report, cooperate, and recall, it could have faced several adverse consequences. First, the federal Consumer Products Safety Act ('CPSA') requires consumer product manufacturers and distributors to report 'substantial product hazards' to the CPSC 'immediately' upon receipt of information suggesting that such a 'hazard' might exist with respect to one of its products. See 15 U.S.C. '2064(b). Section 2064(a) generally defines a 'substantial product hazard' as either a) a failure to comply with an applicable safety rule, which creates a substantial risk of injury to the public, or b) a product 'defect' that creates such a substantial risk. See 15 U.S.C. '2064(a). The statute specifically requires reporting where the manufacturer 'obtains information that reasonably supports the conclusion that such product … contains a defect which could create a substantial product hazard … or creates an unreasonable risk of serious injury or death … ' 15 U.S.C. '2064(b) (emphasis added).

This expansive language makes clear that the CPSC expects product manufacturers to report possible hazards, 'even when no final determination of the risk is possible.' See 16 CFR '1115.6 (interpreting the reporting requirements of 15 U.S.C. '2064) and CPSC Recall Handbook at 6 (May 1999) (stating that the CPSC 'encourages companies to report potential substantial product hazards') (available at www.cpsc.gov/businfo/8002.html). Because the 'risk' could have applied equally to some one million baby seats, and because the resultant injuries could be, and reportedly were, severe, one would be hard-pressed to argue that Bumbo was
not required to report this issue to the CPSC.

Second, Bumbo's failure to report under such circumstances could have subjected it to civil penalties under 15 U.S.C. '2069(a)(1). See 15 U.S.C. '2068(a)(4). Per the CPSC's regulations, the penalty for failure to report as to a single product is $8,000, with a maximum penalty of $1.825 million for a 'series of violations' (e.g., each day a manufacturer fails to report after being put on notice of the hazard). See 16 CFR '1115.22 and 69 Fed. Reg. 68885 (2005). And, of course, the payment of any such penalties would have in no way immunized Bumbo from damage assessments in any private product liability lawsuits.

Third, if Bumbo had refused to cooperate with the CPSC, the Commission could have launched its own investigation of the baby seat and compelled Bumbo to produce adverse information in its possession. In light of the CPSC's recent public relations difficulties relating to Chinese imports, it is likely that the CPSC would have moved aggressively against Bumbo in the absence of cooperation. More problematically, any investigation could have resulted in: a) a government-sponsored finding of product 'defect,' 'substantial product hazard,' or 'unreasonable risk of serious injury or death,' and b) a government-mandated recall of the baby seats, which could include a mandatory repair, replacement, or refund. E.g., 15 U.S.C. '2064(c) and 16 CFR '1115.21. Both of these outcomes could have proved quite damaging to Bumbo, both in terms of recall costs and in terms of its position in any follow-on litigation.

Fourth, if Bumbo had refused a voluntary recall, it would have lost control of the message and increased the odds of a consumer backlash. Indeed, an unscientific review of baby product Web sites in the wake of the voluntary recall suggests strong consumer loyalty to the Bumbo Baby Sitter and only a reluctant sympathy for those who would place an unrestrained infant atop a 'table, chair or stool.'

In short, the downside of a failure to report, cooperate, and recall was potentially quite severe. Moreover, because some plaintiffs had already sued, or threatened to sue, Bumbo, and because other possible litigation-inducing incidents had already occurred prior to the recall, Bumbo had a strong motivation to bite the bullet and take action to minimize the odds of any additional injuries and/or lawsuits.

The Content of the Recall Notice

As noted above, in publicizing the 'recall' of its baby seats, Bumbo denied any 'defect' and declined to offer repair, replacement, or refund. From a risk management perspective, was this a smart move? Probably so, because in light of recent developments in CPSC regulations and in the rules of evidence, Bumbo's 'recall' may have no impact on its ability to defend the product liability actions.

First, in years past, the CPSC routinely investigated product hazard reports, and CPSC 'defect' findings accompanied all ensuing recalls. Under Federal Rule of Evidence 803(8), such official government reports were admissible as substantive evidence of a product defect. Now, however, the CPSC offers manufacturers the option of participating in a 'Fast Track Product Recall Program,' which obviates the need for a CPSC investigation and 'preliminary determination' of defect. Although the specifics of this program are beyond the scope of this article, a 'fast track company' must provide a full report on the alleged hazard, agree to comply with all program rules, and produce a 'corrective action plan' (a/k/a recall) to address the hazard in a timely fashion. See CPSC 'Fast Track Product Recall Program Brochure' at 3 (available at www.cpsc.gov/businfo/fasttrk.html). Assuming that the company meets the 'fast track' requirements, the CPSC will forego any preliminary 'defect' finding that a plaintiff's lawyer might use against the firm in later litigation. See CPSC Recall Handbook at 13.

Second, a manufacturer's recall notice had long been fodder for plaintiff's counsel, because statements contained in such notices could be deemed 'party admissions' under Federal Rule of Evidence 801(d)(2)(A). Given that recalls, by definition, involve 'defective' or 'unreasonably dangerous' products, any recall notice could be devastating to a manufacturer defending a related product liability action. The CPSC has provided some relief, however, in that a manufacturer may specifically deny that its product contains a defect or creates an unreasonable risk of injury, both in its report to the CPSC and in any subsequent recall notice. See 16 CFR '1115.12 (addressing the required contents of the manufacturer's report to the CPSC) and '1115.20(a)(1)(xiii) (permitting a manufacturer pursuing a voluntary corrective action plan to deny both that it possesses any 'reportable' information and that its product poses any 'substantial hazard'). Moreover, in discussing reporting parameters, the CPSC notes repeatedly that: a) the mere reporting of information to the CPSC does not 'automatically indicate the presence of a substantial product hazard' (16 CFR '1115.2(c)); b) not all products presenting a risk of injury are defective (16 CFR '1115.4(e); and c) foreseeable consumer misuse of the product is a relevant factor in determining 'defect.' Id. In short, the CPSC has provided manufacturers with a solid foundation for contesting the relevance and impact of any recall notice, especially where, as here, a manufacturer may assert that owners ignored explicit warnings and misused the product.

Third, prior to 1997, there was nothing to preclude plaintiffs from introducing recall evidence in a strict product liability action, because Federal Rule of Evidence 407 barred proof of 'subsequent remedial measures' ('SRM') only insofar as it related to culpable conduct, not product 'defect.' Congress amended the Rule in 1997, however, to make it clear that SRM evidence was inadmissible to prove defect. See Fed. R. Evid. 407 (stating that such evidence is inadmissible to prove 'a defect in the product, a defect in the product's design, or a need for a warning or instruction'). Although the Rule does not specifically define a recall as a 'subsequent remedial measure,' both logic and the language of the Rule compel that result. See Fed. R. Evid. 407 (defining SRMs as 'measures … taken that, if taken [prior to the injury complained of], would have made the injury or harm less likely to occur'). Clearly, the recall of an allegedly defective product would reduce the likelihood of injury by removing the hazardous product from circulation. Cf. Chase v. General Motors Corp., 856 F.2d 17, 21 (4th Cir. 1988) (affirming exclusion of recall evidence in product liability action involving defective brake design) and Carballo Rodriguez v. Clark Equip. Co., 147 F.Supp.2d 66, 77 (D.P.R. 2001) (excluding evidence of service bulletins and new warning decals provided after the accident at issue).

Summary of the Bumbo Recall

In light of the foregoing, it appears that Bumbo managed well the risk inherent in this product recall. By reporting the potential hazard, engaging in a 'fast track' recall, controlling the notification content, and circumscribing the remedy, Bumbo avoided penalties and problems with the CPSC, pre-empted any CPSC investigation or 'defect' finding, denied plaintiffs' lawyers ammunition for product liability lawsuits, and increased the odds of maintaining its reputation among consumers, all while minimizing cost and disruption to its business.

Lessons from the Bumbo Recall

Despite Bumbo's apparently adroit handling of the recall, however, plaintiffs sued the company (and one of its product's main retailers, which it will probably have to defend and indemnify). What lessons can we draw from this situation?

First: If you build it, they will sue. There is no magic pill to protect manufacturers from product liability lawsuits, though manufacturers can, and should, manage their risk to minimize the cost and disruption of litigation. In this case, there was apparently a 'disconnect' between Bumbo's explicit written warnings about the proper use of the Baby Sitter and some of its graphic advertising, which allegedly showed misuses of the product (including a baby placed on a stool, playing the piano, while in the seat!). Because the alleged 'design defects' in the Baby Sitter (e.g., the size of the seat's base and the lack of any restraining straps) are open and obvious, the plaintiffs' best 'hook' in these products cases may be the depictions of misuse in Bumbo's marketing materials, which, they will argue, compounded the problem posed by Bumbo's allegedly inadequate warnings. If so, this outcome underscores the need for close coordination between those who craft the warnings (attorneys, we hope) and those who create the advertising. A risk management audit would almost certainly have identified the unfortunate incongruity present here.

Second: Though we do not yet know whether Bumbo's approach will prove to be a success vis-'-vis the product liability actions, we do know that there is risk inherent in any recall, even when the rules of recall (and of evidence) properly seek to separate consumer protection concerns from unwarranted evidentiary inferences. Put simply, consumer product manufacturers must strike a balance between disclosure and 'deceit.' If a manufacturer overstates a perceived hazard in its product, it risks severe damage to its reputation among consumers, irrational and unnecessary fear of its product, and the instigation of product lawsuits. If, on the other hand, the manufacturer understates the hazard, it risks active CPSC intervention, credibility problems in the marketplace, and accusations of fraud, deceptive business practices, and the like.

Conclusion

Given the profound effects that a product recall can have on a manufacturer ' in terms of goodwill, financial exposure, and business interruption ' it is vital that product manufacturers prepare properly for this eventuality through a comprehensive risk management plan that, at a minimum, encompasses design, manufacturing, marketing, insurance, regulatory, and litigation considerations. Bumbo may have navigated the rocky shoals of this recall, but without the proper risk management planning, not all consumer product manufacturers can count on a successful outcome.

Kurt Stitcher is a partner in the Litigation Practice Group at Levenfeld Pearlstein LLC, in Chicago, where he leads the firm's Product Liability and Mass & Toxic Tort practice. He can be reached at 312-476-7597 or at [email protected]. Deepa Rajkarne is an associate in the firm's Litigation Practice Group. She can be reached at 312-476-7596 or at [email protected].

In the wake of a consumer product company's decision to offer revised warning labels for roughly one million of its baby seats, plaintiffs' lawyers have filed at least two new product liability lawsuits against the company and one of the seat's retailers, including a putative nationwide 'economic loss' class action. This 'recall' highlights significant risk management issues for consumer product manufacturers, including a possible 'disconnect' between written warnings and advertising that allegedly depicts improper usage of their products.

The Bumbo Recall and Its Fallout

Bumbo (PTY) Ltd. ('Bumbo') is a South African company that manufactures the 'Bumbo Baby Sitter,' a coated foam seat designed to allow infants between three and 14 months of age to sit upright on the floor. On Oct. 25, 2007, Bumbo, in conjunction with the U.S. Consumer Products Safety Commission ('CPSC'), announced a 'recall' of roughly one million Baby Sitters, based on 28 reports that children who had been placed in the seats above floor level had managed to wriggle out of the seats and fall to the floor. Through a variety of media, including its own Web site, Bumbo notified owners of the Baby Sitter that Bumbo would provide a new warning label emphasizing that caretakers should not place the baby seat above floor level and should never leave a child unattended in the baby seat. Because it had already included such warnings both on the Baby Sitter itself and in the seat's packaging and use instructions, however, Bumbo, in its notice to owners, specifically denied that there was any 'defect' in the seat, and it did not offer to repair or replace the seat or to refund its purchase price.

Prior to the recall, and despite these existing warnings, a California couple had allegedly placed their six-month-old child in the seat on a tabletop, where he escaped from the seat and fell to the floor, fracturing his skull. Two months before the recall, the couple sued Bumbo and Target Corporation, the seat's retailer, under a variety of product liability theories, including 'failure to warn.' See Lamm v. Bumbo, et al., Case No. SCN 241318 (Superior Court of California, County of Sonoma, Aug. 16, 2007). Following the public 'recall' announcement, a Texas couple filed suit against Bumbo and Target under similar product liability theories. See Stanley v. Target Corp., et al., Case No. H-07-3680 (S.D. Tex. Oct. 31, 2007).

Shortly thereafter, the Lamm lawyers filed a putative nationwide class action against Bumbo and Target, this time alleging various 'breach of warranty' and 'deceptive trade practices' claims. See Whitson v. Bumbo, et al., Case No. CV-07-5597-CW (N.D. Cal. Nov. 7, 2007). Although the Whitson complaint specifically acknowledges Bumbo's earlier warnings about the proper use of the Baby Sitter, it alleges that: a) the warnings are in a 'miniscule font,' b) the warnings lack a 'standard exclamation point inserted within a yellow triangle,' and c) advertising for the seat depicts children perched atop 'tables, chairs and stools' while seated in the Baby Sitter.

Risk Management in the Bumbo Recall

In light of the original warnings and the post-recall lawsuits, one may reasonably ask whether, on balance, the recall notification will inure to Bumbo's benefit, or to its detriment. This is a complex question that highlights many significant aspects of litigation risk management, including the decision to recall and the manner of recall.

The Decision to Report and Recall

Given how the recall unfolded, it seems clear that Bumbo reported its concerns to the CPSC, cooperated with the Commission, and undertook the recall voluntarily. In doing so, Bumbo intentionally subjected itself to broad public scrutiny and, evidently, to adverse legal action. Was this a smart move? Let's examine the alternative.

If Bumbo had declined to report, cooperate, and recall, it could have faced several adverse consequences. First, the federal Consumer Products Safety Act ('CPSA') requires consumer product manufacturers and distributors to report 'substantial product hazards' to the CPSC 'immediately' upon receipt of information suggesting that such a 'hazard' might exist with respect to one of its products. See 15 U.S.C. '2064(b). Section 2064(a) generally defines a 'substantial product hazard' as either a) a failure to comply with an applicable safety rule, which creates a substantial risk of injury to the public, or b) a product 'defect' that creates such a substantial risk. See 15 U.S.C. '2064(a). The statute specifically requires reporting where the manufacturer 'obtains information that reasonably supports the conclusion that such product … contains a defect which could create a substantial product hazard … or creates an unreasonable risk of serious injury or death … ' 15 U.S.C. '2064(b) (emphasis added).

This expansive language makes clear that the CPSC expects product manufacturers to report possible hazards, 'even when no final determination of the risk is possible.' See 16 CFR '1115.6 (interpreting the reporting requirements of 15 U.S.C. '2064) and CPSC Recall Handbook at 6 (May 1999) (stating that the CPSC 'encourages companies to report potential substantial product hazards') (available at www.cpsc.gov/businfo/8002.html). Because the 'risk' could have applied equally to some one million baby seats, and because the resultant injuries could be, and reportedly were, severe, one would be hard-pressed to argue that Bumbo was
not required to report this issue to the CPSC.

Second, Bumbo's failure to report under such circumstances could have subjected it to civil penalties under 15 U.S.C. '2069(a)(1). See 15 U.S.C. '2068(a)(4). Per the CPSC's regulations, the penalty for failure to report as to a single product is $8,000, with a maximum penalty of $1.825 million for a 'series of violations' (e.g., each day a manufacturer fails to report after being put on notice of the hazard). See 16 CFR '1115.22 and 69 Fed. Reg. 68885 (2005). And, of course, the payment of any such penalties would have in no way immunized Bumbo from damage assessments in any private product liability lawsuits.

Third, if Bumbo had refused to cooperate with the CPSC, the Commission could have launched its own investigation of the baby seat and compelled Bumbo to produce adverse information in its possession. In light of the CPSC's recent public relations difficulties relating to Chinese imports, it is likely that the CPSC would have moved aggressively against Bumbo in the absence of cooperation. More problematically, any investigation could have resulted in: a) a government-sponsored finding of product 'defect,' 'substantial product hazard,' or 'unreasonable risk of serious injury or death,' and b) a government-mandated recall of the baby seats, which could include a mandatory repair, replacement, or refund. E.g., 15 U.S.C. '2064(c) and 16 CFR '1115.21. Both of these outcomes could have proved quite damaging to Bumbo, both in terms of recall costs and in terms of its position in any follow-on litigation.

Fourth, if Bumbo had refused a voluntary recall, it would have lost control of the message and increased the odds of a consumer backlash. Indeed, an unscientific review of baby product Web sites in the wake of the voluntary recall suggests strong consumer loyalty to the Bumbo Baby Sitter and only a reluctant sympathy for those who would place an unrestrained infant atop a 'table, chair or stool.'

In short, the downside of a failure to report, cooperate, and recall was potentially quite severe. Moreover, because some plaintiffs had already sued, or threatened to sue, Bumbo, and because other possible litigation-inducing incidents had already occurred prior to the recall, Bumbo had a strong motivation to bite the bullet and take action to minimize the odds of any additional injuries and/or lawsuits.

The Content of the Recall Notice

As noted above, in publicizing the 'recall' of its baby seats, Bumbo denied any 'defect' and declined to offer repair, replacement, or refund. From a risk management perspective, was this a smart move? Probably so, because in light of recent developments in CPSC regulations and in the rules of evidence, Bumbo's 'recall' may have no impact on its ability to defend the product liability actions.

First, in years past, the CPSC routinely investigated product hazard reports, and CPSC 'defect' findings accompanied all ensuing recalls. Under Federal Rule of Evidence 803(8), such official government reports were admissible as substantive evidence of a product defect. Now, however, the CPSC offers manufacturers the option of participating in a 'Fast Track Product Recall Program,' which obviates the need for a CPSC investigation and 'preliminary determination' of defect. Although the specifics of this program are beyond the scope of this article, a 'fast track company' must provide a full report on the alleged hazard, agree to comply with all program rules, and produce a 'corrective action plan' (a/k/a recall) to address the hazard in a timely fashion. See CPSC 'Fast Track Product Recall Program Brochure' at 3 (available at www.cpsc.gov/businfo/fasttrk.html). Assuming that the company meets the 'fast track' requirements, the CPSC will forego any preliminary 'defect' finding that a plaintiff's lawyer might use against the firm in later litigation. See CPSC Recall Handbook at 13.

Second, a manufacturer's recall notice had long been fodder for plaintiff's counsel, because statements contained in such notices could be deemed 'party admissions' under Federal Rule of Evidence 801(d)(2)(A). Given that recalls, by definition, involve 'defective' or 'unreasonably dangerous' products, any recall notice could be devastating to a manufacturer defending a related product liability action. The CPSC has provided some relief, however, in that a manufacturer may specifically deny that its product contains a defect or creates an unreasonable risk of injury, both in its report to the CPSC and in any subsequent recall notice. See 16 CFR '1115.12 (addressing the required contents of the manufacturer's report to the CPSC) and '1115.20(a)(1)(xiii) (permitting a manufacturer pursuing a voluntary corrective action plan to deny both that it possesses any 'reportable' information and that its product poses any 'substantial hazard'). Moreover, in discussing reporting parameters, the CPSC notes repeatedly that: a) the mere reporting of information to the CPSC does not 'automatically indicate the presence of a substantial product hazard' (16 CFR '1115.2(c)); b) not all products presenting a risk of injury are defective (16 CFR '1115.4(e); and c) foreseeable consumer misuse of the product is a relevant factor in determining 'defect.' Id. In short, the CPSC has provided manufacturers with a solid foundation for contesting the relevance and impact of any recall notice, especially where, as here, a manufacturer may assert that owners ignored explicit warnings and misused the product.

Third, prior to 1997, there was nothing to preclude plaintiffs from introducing recall evidence in a strict product liability action, because Federal Rule of Evidence 407 barred proof of 'subsequent remedial measures' ('SRM') only insofar as it related to culpable conduct, not product 'defect.' Congress amended the Rule in 1997, however, to make it clear that SRM evidence was inadmissible to prove defect. See Fed. R. Evid. 407 (stating that such evidence is inadmissible to prove 'a defect in the product, a defect in the product's design, or a need for a warning or instruction'). Although the Rule does not specifically define a recall as a 'subsequent remedial measure,' both logic and the language of the Rule compel that result. See Fed. R. Evid. 407 (defining SRMs as 'measures … taken that, if taken [prior to the injury complained of], would have made the injury or harm less likely to occur'). Clearly, the recall of an allegedly defective product would reduce the likelihood of injury by removing the hazardous product from circulation. Cf. Chase v. General Motors Corp. , 856 F.2d 17, 21 (4th Cir. 1988) (affirming exclusion of recall evidence in product liability action involving defective brake design) and Carballo Rodriguez v. Clark Equip. Co. , 147 F.Supp.2d 66, 77 (D.P.R. 2001) (excluding evidence of service bulletins and new warning decals provided after the accident at issue).

Summary of the Bumbo Recall

In light of the foregoing, it appears that Bumbo managed well the risk inherent in this product recall. By reporting the potential hazard, engaging in a 'fast track' recall, controlling the notification content, and circumscribing the remedy, Bumbo avoided penalties and problems with the CPSC, pre-empted any CPSC investigation or 'defect' finding, denied plaintiffs' lawyers ammunition for product liability lawsuits, and increased the odds of maintaining its reputation among consumers, all while minimizing cost and disruption to its business.

Lessons from the Bumbo Recall

Despite Bumbo's apparently adroit handling of the recall, however, plaintiffs sued the company (and one of its product's main retailers, which it will probably have to defend and indemnify). What lessons can we draw from this situation?

First: If you build it, they will sue. There is no magic pill to protect manufacturers from product liability lawsuits, though manufacturers can, and should, manage their risk to minimize the cost and disruption of litigation. In this case, there was apparently a 'disconnect' between Bumbo's explicit written warnings about the proper use of the Baby Sitter and some of its graphic advertising, which allegedly showed misuses of the product (including a baby placed on a stool, playing the piano, while in the seat!). Because the alleged 'design defects' in the Baby Sitter (e.g., the size of the seat's base and the lack of any restraining straps) are open and obvious, the plaintiffs' best 'hook' in these products cases may be the depictions of misuse in Bumbo's marketing materials, which, they will argue, compounded the problem posed by Bumbo's allegedly inadequate warnings. If so, this outcome underscores the need for close coordination between those who craft the warnings (attorneys, we hope) and those who create the advertising. A risk management audit would almost certainly have identified the unfortunate incongruity present here.

Second: Though we do not yet know whether Bumbo's approach will prove to be a success vis-'-vis the product liability actions, we do know that there is risk inherent in any recall, even when the rules of recall (and of evidence) properly seek to separate consumer protection concerns from unwarranted evidentiary inferences. Put simply, consumer product manufacturers must strike a balance between disclosure and 'deceit.' If a manufacturer overstates a perceived hazard in its product, it risks severe damage to its reputation among consumers, irrational and unnecessary fear of its product, and the instigation of product lawsuits. If, on the other hand, the manufacturer understates the hazard, it risks active CPSC intervention, credibility problems in the marketplace, and accusations of fraud, deceptive business practices, and the like.

Conclusion

Given the profound effects that a product recall can have on a manufacturer ' in terms of goodwill, financial exposure, and business interruption ' it is vital that product manufacturers prepare properly for this eventuality through a comprehensive risk management plan that, at a minimum, encompasses design, manufacturing, marketing, insurance, regulatory, and litigation considerations. Bumbo may have navigated the rocky shoals of this recall, but without the proper risk management planning, not all consumer product manufacturers can count on a successful outcome.

Kurt Stitcher is a partner in the Litigation Practice Group at Levenfeld Pearlstein LLC, in Chicago, where he leads the firm's Product Liability and Mass & Toxic Tort practice. He can be reached at 312-476-7597 or at [email protected]. Deepa Rajkarne is an associate in the firm's Litigation Practice Group. She can be reached at 312-476-7596 or at [email protected].