This week, we welcome a post from Jim Ray, a partner in the Hartford office of Robinson & Cole LLP.  Jim’s practice includes environmental and product liability litigation and counseling, and he has assisted a number of clients implementing voluntary corrective actions under the CPSC Fast Track recall program.

The United States Consumer Product Safety Commission (CPSC) recently announced a $5.8 million agreement with Keurig Green Mountain, Inc. settling claims that Keurig failed to report a product defect that posed an unreasonable risk of serious injury to consumers.  The CPSC alleged that Keurig’s MINI Plus Brewing Systems could spray users with hot water, coffee, and coffee grounds.

Between 2010 and 2014, Keurig received about 200 reports of hot water and coffee spraying out of the machines, more than half of which resulted in injury.  A number of users sought medical treatment for severe burns, one was seen by a plastic surgeon, two had facial scarring, and one had an eye injury.  In two instances, retailers asked Keurig to conduct a product safety investigation.

It was not until June 2014 that Keurig initiated an investigation of the brewers.  However, Keurig did not submit a full report with the CPSC until the end of November 2014.  In December 2014, Keurig and the CPSC jointly announced a recall of more than 6 million brewers.

Section 15 of the Consumer Product Safety Act (CPSA) requires manufacturers, distributors and retailers of consumer products to immediately notify the CPSC when they learn that a product, among other things, “contains a defect which could create a substantial product hazard” or “creates an unreasonable risk of serious injury or death.”  A product defect can create a substantial product hazard when it poses a substantial risk of injury to the public.  In evaluating this, the company should consider the number of products in commerce, the pattern of the defect, and the severity of the potential injuries that could result.  Section 37 of the CPSA, though not implicated in the Keurig matter, also requires reporting to CPSC when at least 3 lawsuits have settled or gone to judgment in favor of the plaintiff in a 24 month period in which allegations were made that use of a product resulted in death or grievous bodily injury.  The CPSA provides for penalties of up to $100,000 per violation for knowing violations.

The CPSC alleged that Keurig failed to notify CPSC despite having “information reasonably supporting the conclusion that the Brewers contained a defect and created an unreasonable risk of serious injury.”  The CPSC also alleged that once Keurig initiated an investigation to evaluate its reporting obligations, it took more than 4 months to complete it (considerably longer than the 10 days CPSC considers reasonable.)  Keurig denied the CPSC’s allegations, claiming that the voluntary recall was done out of an abundance of caution without the firm having concluded that the product contained a defect or posed an unreasonable risk of injury.

The Keurig case serves as reminder to those manufacturing, distributing or selling consumer products of the serious nature of product defect reporting obligations.  Those entities should also be aware of the CPSC Fast Track recall program, under which companies can quickly implement a corrective action program to remove potentially unsafe products from the marketplace.  For those companies considering such a recall, CPSC will provide significant assistance and will refrain from making a preliminary determination that the product contains a defect that creates a substantial product hazard.