CPSIA at 10: Using Civil Penalties to Deter Wrongdoing
During the month of August, Public Citizen and our partners are celebrating the tenth anniversary of passage of the Consumer Product Safety Improvement Act (CPSIA), a law that has made products, especially children’s toys, safer.
When Congress passed the original Consumer Product Safety Act in 1972, it not only created the Consumer Product Safety Commission (CPSC or Commission), but gave it the Commission the authority to impose monetary penalties against product manufacturers for placing unsafe products into the marketplace. Civil penalties serve as an important tool to discourage companies from cutting corners when manufacturing products that could result in injury or death, and they also create an incentive to ensure that manufacturers quickly report product defects.
The CPSIA amended the Consumer Product Safety Act in several important ways, including by increasing the cap on penalties from $8,000 to $100,000 per violation, and from $1.825 million to $15 million for a series of related violations.
Over the last ten years, the CPSC has used its broadened authority wisely and has increased the amount that it imposes on companies. Earlier this year, for example, the CPSC imposed a record fine against Polaris, a recreational off-road vehicle (ROV) manufacturer for multiple product safety violations including, among other things, failing to notify the CPSC about defects in some of their ROVs. By the time Polaris notified the Commission, the company had received 150 complaints about ROVs catching fire, including a fire that resulted in the death of a 15 year old passenger. The fine against Polaris was the largest ever civil penalty imposed by the CPSC.
While CPSIA gave commissioners discretion to used increased penalties in the judgements imposed on companies, and they had been making use of the higher penalty possibilities, that trend has slowed since the Trump administration came into power. According to a recent Public Citizen report, in Trump’s first year in office, the CPSC [i]mposed about $21.4 million in penalties with an average penalty of $5.3 million. That was down from $37.3 million a year earlier…”—Barack Obama’s last year in office. In addition, according to our research, the Trump administration-run CPSC has “completed no enforcement actions in the fourth quarter of 2017 or the first quarter of 2018.”
Despite the anomaly of the Polaris fine, which was imposed by the CPSC in the second quarter of 2018, the overall dip in enforcement actions is likely due to new leadership at the agency. CPSC Acting Chair Ann Marie Buerkle has consistently voted against imposing civil penalties on companies. In fact, our report noted that during her tenure (both as acting chair and a commissioner), Buerkle voted against imposing penalties “in 16 out of 21 instances for companies that failed to report problems with their products.” Buerkle’s seeming aversion to using civil penalties is one of the reasons why Public Citizen spoke out in October 2017 in opposition to her nomination to be the permanent head of the CPSC.
Congress empowered the CPSC with the responsibility of imposing penalties on companies when they place dangerous products into the marketplace and fail to report or otherwise open consumers up to injury or death. Civil penalties are a tool that should be used robustly, both to protect consumers against harm and to carry out Congress’s intent when it increased the CPSC’s civil penalty authority a decade ago. We hope that the agency reverses the current trend under Buerkle and instead goes back toward imposing meaningful civil penalties on corporate wrongdoers in furtherance of its important mission to ensure that only safe products make into the marketplace.