Advertising Law Tool Kit - Ninth Edition | 2021

Venable / 59 58 / Venable Product Safety and Recalls 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 the direct- response marketer or the retailer, or upon receipt of a notice of injury from the Consumer Product Safety Commission (CPSC). Under U.S. law, the manufacturer, marketer, or retailer has an obligation to promptly report to the CPSC information about any product that “indicates” the product: • Is defective and could create a substantial risk of injury to consumers or is otherwise unreasonably hazardous or dangerous for consumers. • Fails to comply with pertinent rules or laws enforced by the CPSC. • Was choked on by a child, and the child died, suffered serious injury, ceased breathing, or was treated by a medical professional. • Has been specified as a substantial product hazard by the CPSC (e.g., certain children’s upper outerwear with drawstrings, or hair dryers without immersion protection devices). • Was subject to certain types of lawsuits. To ensure compliance with reporting requirements, marketers should stay on top of safety reports about their products and those of their competitors through monitoring of direct consumer complaints, online reviews, information on the CPSC’s database ( www.saferproducts.gov) , 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 recall of the product. That would be a decision that would be made, most often in conjunction with the CPSC, based upon closer examination and evaluation of the product, 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 alleviate any design 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 an actual product recall, also known as a “voluntary corrective action,” could potentially 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 respect to the announced reason for the recall. However, the initiation of such a recall is usually voluntary, and not a concession by the manufacturer, distributor, or retailer that the product is actually defective, or that claims made with respect to the characteristics of the product are not true, and it would be incumbent on a plaintiff to prove the elements of a false advertising claim. A wealth of information about consumer product safety, reporting, and corrective actions is available on the website of the CPSC, at www.cpsc.gov . The following guides are available to download: Business Desktop Reference Guide, Recall Handbook, Regulated Products Handbook, and Manufacturer’s Guide to Developing Consumer Product Instructions . Melissa Landau Steinman mlsteinman@Venable.com +1 202.344.4972