US CPSC advises consumers certain recall remedies may be unavailable due to COVID-19 – four key takeaways

Attempting to balance consumer and employee safety while managing its workflow in the coronavirus disease 2019 (COVID-19) storm, the US Consumer Product Safety Commission (CPSC) issued a notice at the end of March advising consumers that remedies in recall press releases may not be available at present. The CPSC notice, and the underlying COVID-19 pandemic, could result in delayed or potentially alternative remedies due, in part, to supply chain and business interruptions. The CPSC notice follows actions by other key consumer-facing regulatory bodies, such as the US Food and Drug Administration (FDA) and US Department of Agriculture (USDA), to relax certain regulatory enforcement mechanisms amid the impact of COVID-19 across consumer industries, as the agencies race to digest new information and respond appropriately. The evolving nature of the COVID-19 pandemic makes it critical for consumer product regulated businesses to evaluate their practices and update them to the extent necessary or appropriate as developments occur. We address a number of compliance and other related tips below.

Companies must still report hazards, but CPSC acknowledges that certain recall remedies may not be available at present because of the COVID-19 pandemic
The CPSC notice confirms that regulated businesses are not relieved of their hazard reporting obligations. The notice advises companies they must continue to report products under Section 15(b) of the Consumer Product Safety Act during the COVID-19 crisis if they discover products that violate safety rules or contain defects that create an unreasonable risk of serious injury or death. However, the CPSC notice also counsels purchasers that recall remedies may not be available due to the “extraordinary circumstances surrounding COVID-19,” and, where recalls are undertaken or hazards identified, the notice advises consumers to stop using the product and to contact the recalling firm for details.

For example, when a dresser was noticed for recall on April 6, 2020 because of “tip-over and entrapment hazards” with the potential to seriously injure children, purchasers were advised to stop using the dresser if remedial measures were not available and were further told that the recalling firm would arrange for a free in-home repair or pick-up of the dresser, would provide a $50 gift card to purchasers, and would contact all known purchasers. Whereas under typical circumstances a recalling firm would be expected to expediently address all remedies, the CPSC notice suggests that leeway may be granted to recalling companies in light of the COVID-19 pandemic and the industry’s efforts to protect customers, employees, and the viability of its companies.

The CPSC notice follows other federal agencies’ relaxation of regulatory enforcement mechanisms
The CPSC notice comes after responses from the FDA, USDA, US Center for Disease Control, and other similarly situated international bodies to relax certain regulatory enforcement mechanisms as regulators try to navigate the ever-changing COVID-19 landscape and nimbly respond to a consistent stream of new information impacting consumer industries.

For example, in the case of the FDA, as DLA Piper’s regulatory team reported in a March 19, 2020 alert, routine surveillance inspections for the current fiscal year have been postponed, typically unannounced mission-critical inspections will now be pre-announced, and imported products that are deemed unsafe may be denied entry into the US or detained, among other preventative measures.

Key elements of guidance include clear employee direction, continual surveillance practices, maintaining CPSC communication, and documentation
While guidance will evolve as the COVID-19 pandemic develops, CPSC-regulated firms are encouraged to consider the following:

First, regulated entities are encouraged to ensure that key employees (typically beginning with customer service centers) understand the rules have not changed governing reporting of potential substantial product hazards and product defects − CPSA Rule 15(b) still requires timely reporting of all such hazards and defects. Customer service centers, as the frontline of consumer input and incident reporting, are encouraged to be considered core business functions that receive resources to continue operating as fulsomely as practical.

Second, employee capacity will likely be reduced during the COVID-19 pandemic, but under the circumstances, and consistent with company protocols, companies should try to continue normal marketplace surveillance for discussion of product issues that could arise without direct customer communication. Consumers do not always call customer service hotlines about risks, and companies can glean valuable information by monitoring consumer discussions on social media like Facebook, Twitter, Reddit, and other sources. While employee resources are stretched thin, this practice could understandably drop in priority − but all efforts are encouraged to be made to maintain healthy surveillance practices.

Third, for the same employee capacity reasons, businesses engaging with CPSC compliance officers regarding potential substantial product hazards are encouraged to understand that CPSC responsiveness will likely be impacted by the COVID-19 pandemic. Firms should communicate with CPSC about any mitigating measures they are considering, but should not assume that a lack of response from the agency means no measures are needed. If product hazards arise and CPSC does not immediately respond, businesses should take responsible actions to mitigate risks as they work with the agency. Fast-track recalls should always be done with agency approval and involvement − but communicating with and advising customers about product risks and how to handle them may be done as appropriate under the circumstances.

Fourth, appropriate documentation of problems and decisions related to CPSC guidance is encouraged. It is prudent for regulated firms, as decisions are made about dealing with potential substantial product hazards, to document and explain why certain actions were taken or not taken, particularly if CPSC responsiveness had an impact on the decision. CPSC makes clear that product hazard reporting is still required and, presumably, enforcement decisions about failures to report or take other action will be made as the crisis fades. There will be situations in which regulator and regulated entity disagree on what was reasonable − the better documentation the entity has of its circumstances and efforts, the better its opportunity to convince CPSC its actions were reasonable. Companies are encouraged to carefully consider which internal communications should be attorney-client privileged and which it will want to release to CPSC if necessary. A key question is “how will we show, through documented evidence, that we have complied with CPSC guidance and requirements, and taken commercially reasonable steps to maintain compliance and/or mitigate non-compliance?”

Regulatory responses to the COVID-19 pandemic have necessarily been fluid as new information has become available. As a result, the guidelines above are subject to change as the situation and regulatory responses evolve.

If you have any questions regarding these new requirements and their implications, please contact any of the authors or your DLA Piper relationship attorney.

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This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.