Injury and Accident Law

Penalties Applicable to Firms and Individuals

Chapter 1 - Sanctions Under CPSC Statutes

In enacting the various statutes administered by CPSC, Congress provided specific sanctions which may be imposed against firms that violate any provision of the statutes. These sanctions include both civil fines against the responsible firm and individual, up to a maximum of $1.825 million** (69 Fed. Reg. 68884, November 26, 2004) and criminal fines, and imprisonment of the responsible individual(s) for not more than one year. In addition, firms and individuals may be enjoined from continuing to violate CPSC statutes and regulations, and pursuant to court order, violative products may be seized to prevent distribution in commerce. Following is a discussion of the penalties and other sanctions that may be imposed by CPSC for violations of its statutes.

Penalties Applicable to Firms and Individuals

When a product is found to violate a CPSC statute, safety standard or banning regulation, the Compliance staff issues a LOA to the responsible firm and individuals. The LOA informs the firm what regulation or standard has been violated, what statute has been violated and states that a prohibited act has occurred. The prohibited acts are found in section 19 of the CPSA, 15 U.S.C. § 2068; section 4 of the FHSA, 15 U.S.C. § 1263; section 3 of the FFA,15 U.S.C. § 1192; and section 403 of the Federal Food, Drug, and Cosmetics Act (FD&CA), 21 U.S.C. § 343, for violations involving foods, drugs, and cosmetics subject to special packaging standards under the PPPA.

Once a firm and/or individual is informed of the prohibited act(s), the firm and individual can determine the maximum sanctions to which they may be subject. Generally, the LOA will not contain specific details regarding penalties but will refer to this Handbook for assistance in determining the applicable penalties. Following is a summary of the penalties available under the CPSA, FHSA, FFA, and PPPA enforced through the FHSA and FD&CA.

Penalties Available Under the CPSA

Civil Penalties under CPSA - Under section 20 of the CPSA, any person who knowingly violates section 19 of the CPSA shall be subject to a civil penalty not to exceed $8,000 for each such violation**. With some exceptions, a violation of § 19(a)(1), (2), (4), (5), (6), (7), (8), (9), (10), or (11) shall constitute a separate offense with respect to each individual consumer product involved, except that the maximum civil penalty shall not exceed $1.825 million for any related series of violations (69 Fed. Reg. 68884, November 26, 2004).

Criminal Penalties under CPSA - Under section 21 of the CPSA, any person who knowingly and willfully violates section 19 of the CPSA after having received notice of noncompliance from the Commission shall be fined (as described below) or imprisoned for not more than one year, or both. The Criminal Fine Improvements Act of 1987, Public Law 100-185, increased maximum criminal penalties under the CPSA to $100,000 for individuals and $200,000 for organizations unless a death occurred, in which case the maximum fine is $250,000 for individuals and $500,000 for organizations.

Penalties Available Under the FHSA

Civil Penalties under FHSA - The Consumer Product Safety Improvement Act of 1990, Public Law 101-608, amended section 5 of the FHSA by adding a new section 5(c)(1), 15 U.S.C. § 1264, which gives the Commission the authority to seek civil penalties against any person who knowingly violates section 4 of the FHSA. The term “knowingly" is defined in section 5(c)(5) of the FHSA. 15 U.S.C. § 1264(c)(5). The Commission may seek a civil penalty of up to $8,000** per violative product, up to a maximum of $1.825 million for any related series of violations (69 Fed. Reg. 68884, November 26, 2004).

Criminal Penalties under FHSA - Under section 5(a) of the FHSA, 15 U.S.C. § 1264(a), any person who violates section 4 of the FHSA shall be guilty of a misdemeanor and shall upon conviction thereof be subject to a fine (described below) or to imprisonment for not more than 90 days (one year for violations committed with intent to defraud or mislead or for second and subsequent offenses), or both. The Criminal Fine Improvements Act of 1987, Public Law 100-185, increased the maximum criminal penalties provided for in section 5(a) of the FHSA to $5,000 for individuals and $10,000 for organizations for first violations; $100,000 for individuals and $200,000 for organizations for second and subsequent offenses and for offenses committed with intent to defraud or mislead; and $250,000 for individuals and $500,000 for organizations for violations resulting in death.

Penalties Available Under the FFA

Civil Penalties under FFA - The Consumer Product Safety Improvement Act of 1990, Public Law 101-608, amended section 5 of the FFA, by adding a new section 5(e), 15 U.S.C. § 1194 (e), which gives the Commission the authority to seek civil penalties against any person who knowingly violates a regulation or standard issued under section 4 of the FFA, 15 U.S.C. § 1193. The term "knowingly" is defined in section 5(e)(4) of the FFA, 15 U.S.C. §1194. The Commission may seek a civil penalty of up to $8,000** per violative product, up to a maximum penalty of $1.825 million for any related series of violations (69 Fed. Reg. 68884, November 26, 2004).

Criminal Penalties under FFA - Under section 7 of the FFA, 15 U.S.C. § 1196, any person who willfully violates section 3 or 8(b) of the FFA or fails to comply with section 15(c) of the FFA shall be guilty of a misdemeanor, and upon conviction thereof shall be fined (as described below) or imprisoned not more than one year or both. The Criminal Fine Improvements Act of 1987, Public Law 100-185, increased the maximum criminal penalties provided for in section 7 of the FFA to $100,000 for individuals and $200,000 for organizations unless a death occurred, in which case the maximum fine is $250,000 for individuals and $500,000 for organizations.

Penalties Available Under the PPPA

In enacting the PPPA, Congress chose to incorporate the penalties available under two existing statutes rather than provide separate penalties for prohibited acts involving products regulated under the PPPA. Depending on the type of product and the specific prohibited act involved, penalties provided for under the FHSA or the FD&CA may be applicable.

Civil Penalties - The failure to comply with a standard under the PPPA results in the product being classified as either a misbranded hazardous substance under the FHSA or a misbranded food, drug, or cosmetic under the FD&CA, as amended. If the product involved is classified as a misbranded hazardous substance, see Civil Penalties under FHSA, above. If the product involved is a misbranded food, drug, or cosmetic, refer to Criminal Penalties below, since no civil penalties are provided for under the FD&CA.

Criminal Penalties - If the product involved is a misbranded hazardous substance, see Criminal Penalties under FHSA, above. If the product involved is a misbranded food, drug, or cosmetic, criminal penalties for violations of the PPPA are spelled out in section 303(a)(1) of the FD&CA, 21 U.S.C. § 333. Under that section, any person who violates a provision of section 301 shall be guilty of a misdemeanor, and upon conviction thereof shall be fined (as described below) or imprisoned for not more than one year (or for subsequent offenses and offenses committed with the intent to defraud or mislead, three years). The Criminal Fines Improvements Act of 1987, Public Law 100-185, increased maximum criminal penalties under the FD&CA for first violations to $100,000 for individuals and $200,000 for organizations and for second and subsequent offenses and for offenses committed with intent to defraud or mislead to $250,000 for individuals and $500,000 for organizations.


** The maximum penalty amounts are adjusted for inflation every five years. The next adjustment will occur in January 2010.