December 1, 2009 | Volume 1 Issue 8

CPSC Civil Penalties on the Rise Again

The Consumer Product Safety Commission (CPSC) negotiated civil penalty settlements with 38 corporations for a total of $9.8 million in fiscal year 2009, which was more than double the settlements negotiated in 2008. The number of companies fined was at a record high. Because the Consumer Product Safety Improvement Act of 2008 allows for higher penalties, the settlement sizes are expected to continue increasing in the future.

In 2009, the largest settlement was for Mattel's $2.3 million penalty for products recalled due to excessive lead, lead paint and small magnets. In 2005, the largest settlement was for Graco's $4 million penalty for failing to inform the government in a timely manner about more than 12 million products that posed a danger to young children nationwide.

Civil penalties are negotiated settlements that result from CPSC's enforcement activities, with violations ranging from failure to report possible product hazards in a timely manner to violating the federal lead paint ban. Settlements take time, so the fines typically are not determined in the year in which the violation took place. The CPSC cannot use these funds, so enforcement activities in no way affect the agency's budget.