CPSC Penalty Standard Subjective, Opaque, Commissioners Say, as Teavana Agrees to $3.5 Million Settlement
Statutory requirements for companies to report safety risks to the U.S. government, and associated civil penalties ordered by the Consumer Product Safety Commission, are subjective and difficult for importers to understand, CPSC Commissioner Ann Marie Buerkle said in a statement May 25 (here). Buerkle said the threshold for when importers must report to CPSC -- when the product “could” present a safety hazard -- is “inherently subjective: There is no standard one can rely on in making that judgment.” While CPSC guidance to companies to report if they are ever in doubt about safety compliance might keep them “out of trouble in many cases, it also serves to highlight the inherent uncertainty of the matter,” Buerkle said.
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The critique came as Teavana agreed to pay a $3.75 million civil penalty to CPSC as part of a provisional settlement entered into after the company imported defective tea tumblers for six years. The settlement will become final on June 21 if the agency doesn’t receive written requests to forgo accepting it, according to the agreement text (here). The commission voted 3-2 to provisionally accept the settlement, with Commissioner Joseph Mohorovic dissenting alongside Buerkle.
Teavana claimed that it properly notified the commission in March 2013 about complaints and incident reports about the tumblers, and in May 2013 voluntarily announced a recall of 11 different models of double-walled borosilicate glass tumblers made by three different manufacturers “out of an abundance of caution.” The company also said it ordered the recall without determining that any of the tumbler types were defective, hazardous, severely injurious or potentially fatal, and added that the tumblers were “all well-constructed,” using very strong glass with great temperature shock resistance. Teavana did not admit fault.
But CPSC said that Teavana did not notify it “immediately” of any defect or risk, despite the company having received reports of six injuries caused by broken glass or hot liquid burns from tumblers that exploded, shattered or broke, between January 2010 and March 2013. The Consumer Product Safety Act requires companies to inform CPSC of defects that “could” pose substantial product hazards or unreasonable risks of serious injury or death, unless a company has “actual knowledge” that the commission was “adequately informed” of those risks.
In a dissenting statement on the Teavana settlement (here), Mohorovic said CPSC has an obligation to businesses and consumers to be more candid about methodologies for determining the merits of allegations raised at the commission. He said the agreement neither provides sufficient analysis nor facts for general readers to grasp CPSC’s majority interpretation of how Teavana violated the CPSA. Furthermore, Mohorovic said the Teavana settlement did not include CPSC perspectives on how the tumbler breakage occurred, injury severity and the date by which commissioners felt “confident” that Teavana had enough information to conclude the tumblers had a safety problem. “I do not believe this product presented a defect that created a substantial product hazard. This is not to say that no breakage of a glass product could ever be a substantial product hazard,” Mohorovic said. “Glass breaking in the presence of hot liquids [is] a well-known phenomenon that still may indicate a defect but does not lead inescapably to that conclusion.”