The U.S. Consumer Product Safety Commission (CPSC) is beginning to look and act like a serious enforcement agency–a statement that would have been ludicrous only a few years ago when they had only one investigator assigned to the combined Ports of Long Beach and Los Angeles–the busiest cargo ports in the U.S.
Since 2013 penalties and the number of companies fined has increased dramatically.
Last year the company issued $12.2 million in civil penalties, which more than doubled the amount issued in 2013. This year both the number of civil penalties and the average amount have continued to increase.
This trend signals the Commission’s intention to establish itself as a serious enforcement agency. Recent remarks by Chairman Elliot Kaye suggest that this trend will continue. Kaye announced that the agency would seek to levy more penalties that approach the statutory maximum of $15 million.
The average penalty in a CPSC has increased from $1,435,000 in 2014 to $2,625,000 so far this year—an increase of 83%.
Last year the Commission reached five settlements totaling $7,175,000, while so far this year it has finalized eight settlements of $21,000,000 that are already on the books. An increasing common element of these actions includes a requirement for companies to set up compliance programs. Another trend that is disturbing is that many of the companies that have been fined were for failure to report dangerous or defective products years after the manufacturers were aware of the product defects. These types of violations have contributed significantly to the increased fines to manufacturers.
Although penalties assessed by the agency have risen, none have approached the agency’s civil penalty cap of $15,125,000.
Nevertheless, the total penalties generated by the Commission this year may approach the $29,000,000 paid in Proposition 65 settlements in 2014. It remains to be seen whether CPSC penalties will eventually exceed Proposition 65 settlement payments as both seem to be increasing rapidly with no sign of abatement any time soon.