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CPSC Poised to Change Voluntary Recall Process
Nearly all recalls of consumer products are “voluntary recalls,” meaning that a product manufacturer agrees to conduct the recall, and negotiates how it will be conducted, with the U.S. Consumer Product Safety Commission (CPSC), typically after a potential problem or concern comes to the company's attention. The CPSC is considering changes to this established approach that have significant implications for regulated businesses.
The CPSC has proposed an “interpretive rule” that would standardize voluntary recall notices. 78 Fed. Reg. 69,793 (Nov. 21, 2013). The proposal also makes corrective action plans that implement voluntary recalls legally binding, allows the Commission to mandate adoption of compliance programs as a result of a recall, and would limit a company's ability to avoid a recall being viewed as an admission of a defect in litigation. A 75-day comment period on the proposed rule concluded on Feb. 4.
This article explores the most significant proposed changes and the implications for regulated firms if the CPSC adopts the rule. Firms that make or sell consumer products will need to more carefully consider the potential impact of a recall on their future operations and in product liability lawsuits. Although Commissioners intend the rule to lead to a more efficient recall process, the end result may be a slower, increasingly adversarial, and more expensive process with no significant benefit to consumers.
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