Injury and Accident Law
Chapter 5 - Reporting Requirements
This chapter contains information to familiarize companies with their reporting obligations under the Consumer Product Safety Act (CPSA). Companies that distribute consumer products subject to the provisions of the Federal Hazardous Substances Act (FHSA), Flammable Fabrics Act (FFA), Poison Prevention Packaging Act (PPPA), and Refrigerator Safety Act (RSA) also must comply with these reporting requirements. The information which follows will help you to recognize potentially hazardous consumer products at an early stage, and will assist you in understanding when you are legally obligated to report information about the product to the Commission.
The information contained in this Handbook does not replace the Commission statutes or Commission Interpretative Regulations set forth in 16 C.F.R. parts 1115 and 1116.
Reporting Under Section 15 of the CPSA
Section 15(b) of the CPSA defines responsibilities of manufacturers, importers, distributors and retailers of consumer products. Each is required to notify the Commission if it obtains information that reasonably supports the conclusion that a product
- fails to comply with a consumer product safety standard or banning regulation established by the Commission under the CPSA or a voluntary consumer product safety standard upon which the Commission has relied under section 9 of the CPSA;
- contains a defect which could create a substantial product hazard described in section 15(a)(2) of the CPSA; or
- creates an unreasonable risk of serious injury or death.
The Commission's interpretative regulation (16 C.F.R. part 1115) explains the firm’s obligations and those of the Commission. A copy of the regulations can be found at: http://www.access.gpo.gov/nara/cfr/waisidx_00/16cfr1115_00.html
Firms may report under Section 15 on-line at: https://www.cpsc.gov/sec15.html
Reporting Products Involved in LawsuitsIn addition to the reporting requirements at 15 U.S.C. § 2064(b), section 37 of the CPSA, 15 U.S.C. § 2084, requires manufacturers (including importers) of a consumer product to report to the Commission if (1) a particular model of a consumer product is the subject of at least three civil actions that have been filed in Federal or State court, (2) each suit alleges the involvement of that model in death or grievous bodily injury (as defined in section 37(e)(1)), and (3) at least three of the actions result in a final settlement involving the manufacturer or in a judgment for the plaintiff within any one of the two year periods specified in section 37(b). The first two year period began to run on January 1, 1991 and ended on December 31, 1992. Subsequent two year periods started on January 1 in the following years: 1993; 1995; 1997, 1999, 2001, 2003, and so forth. Manufacturers must file a report within 30 days after the settlement or judgment in the third civil action to which the section 37 reporting requirement applies.
Reporting Certain Choking IncidentsSection 102 of the Child Safety Protection Act (CSPA), (Public Law 103-267) requires that manufacturers, distributors, retailers and importers report certain choking incidents to the Commission. The products involved include marbles, balls with a diameter of 1.75” or less (“small ball”); or latex balloon, or a toy or game that contains such a marble, ball, balloon, or other small part. The firm must report information that reasonably supports the conclusion:
- that a child (regardless of age) choked on such a marble, small ball, balloon, or small part; and
- that, as a result of the incident, the child died, suffered serious injury, ceased breathing for any length of time, or was treated by a medical professional.
The Commission’s interpretive regulation at 16 C.F.R. Part 1117 provides more information on this reporting requirement.
Why Reporting is Required
The intent of Congress in enacting the reporting requirements was to encourage widespread reporting of potential product hazards. Congress sought not only to have the Commission uncover substantial product hazards, but also to identify risks of injury which the Commission could attempt to prevent through its own efforts, such as information and education programs, safety labeling, and adoption of product safety standards.
Although CPSC relies on sources other than firm reports to identify substantial product hazards, reporting by companies under the reporting provisions is invaluable because firms often learn of product safety problems long before the Commission. For this reason, any firm involved in the manufacture, importation, distribution or sale of consumer products should develop a system of reviewing and maintaining consumer complaints, inquiries, product liability suits and comments on the products they handle.
If a firm reports to the Commission under section 15 of the CPSA, it does not necessarily mean there is a substantial product hazard. Section 15 simply requires firms to report whenever a product (1) fails to comply with a consumer product safety rule; (2) fails to comply with a voluntary standard upon which the Commission has relied; (3) contains a defect that could create a substantial product hazard; or (4) creates an unreasonable risk of serious injury or death. Thus, a product need not actually create a substantial product hazard to trigger the reporting requirement.
When To Report
It is the Commission's view that a firm should take that all important first step of notifying the Commission when the information available to the firm reasonably indicates that a report is required. It is in the firm's interest to assign the responsibility of reporting to someone in executive authority.
The Commission considers a firm to have knowledge of product safety information when such information is received by an employee or official of the firm who may reasonably be expected to be capable of appreciating the significance of that information. Under ordinary circumstances, five (5) days is the maximum reasonable time for that information to reach the chief executive officer or other official assigned responsibility for complying with the reporting requirements. Weekends and holidays are not counted in that timetable. 16 C.F.R. § 1115.14(b).
The Commission will evaluate whether and when a firm should have reported. This evaluation will be based, in part, on what a reasonable person, acting under the circumstances, knows about the hazard posed by the product. Thus, a firm shall be deemed to know what it would have known if it had exercised due care in ascertaining the accuracy of complaints or other representations.
If the firm is uncertain whether the information is reportable, the firm may elect to spend a reasonable time investigating the matter, but no evaluation should exceed ten (10) days unless the firm can demonstrate that a longer timetable for the investigation is reasonable. If a firm elects to conduct an investigation to decide whether it has reportable information, the Commission will deem that, at the end of ten (10) days, the firm has received and considered all information which would have been available to it had a reasonable, expeditious, and diligent investigation been undertaken. 16 C.F.R. § 1115.14(d).
Penalties for Failure to Report
Failure to report in accordance with the above referenced requirement is a prohibited act under section 19(a) of the CPSA, 15 U.S.C. § 2068, which makes it unlawful for any person to fail to furnish information required by section 15(b) or by section 37.
Any person who knowingly commits a prohibited act is subject to civil penalties under section 20 of the CPSA, including fines up to $1.825 million for a related series of violations, and criminal penalties under section 21 of the CPSA, which includes fines up to $500,000 or imprisonment not more than one year, or both. Chapter 1 of this Handbook provides additional details regarding the penalties.
If a firm is not certain about its reporting obligation, it can contact the Office of Compliance at 301-504-7913.