Hunton Retail Law Resource

The Recall Roundup is a monthly survey of regulatory activity affecting the manufacture, distribution, and sale of consumer products. In lieu of the usual monthly recap, this post summarizes key events from 2021. Subject matter may include the latest product recalls, federal agency major developments, and proposed or new federal rules. The blog’s goal is to provide an overview, rather than a comprehensive report, on every development that could potentially affect businesses or consumers. Nothing herein constitutes legal advice. If you have questions or comments about the blog, please reach out to the authors.

The CPSC (by a 3-1 vote) recently filed an administrative complaint against Amazon.com, Inc. (“Amazon”) seeking to force the characterization of Amazon as a “distributor” of products under the Consumer Product Safety Act.  If the CPSC prevails on that characterization, Amazon would become responsible under the CPSA for recalling potentially hazard products sold via its “fulfilled by Amazon” program.   Although Amazon has engaged in recalls on what it has characterized as a voluntary basis, it has not conceded CPSC authority over it as a distributor.  The Amazon complaint that tees this issue up for judicial resolution involves carbon monoxide detectors that fail to alert, children’s pajamas that do not meet flammability requirements, and hair dryers without required water immersion protection devices.  Amazon has stopped selling some of these products, notified consumers who purchased the products about the potential hazards, and offered refunds via Amazon gift cards.  The CPSC views these steps as insufficient and aims to force Amazon to issue recalls and destroy the returned products.  Under the CPSA, a “distributor” is “a person to whom a consumer product is delivered or sold for purposes of distribution in commerce.”  15 U.S.C. § 2052(a)(8).  Under the “fulfilled by Amazon” program, merchants keep title to their products but store them at Amazon fulfillment centers, where Amazon packs and ships the products for a fee.  Although the CPSC views Amazon as a “distributor,” Amazon argues it is merely an intermediary for other retailers because it does not hold title to the products and therefore cannot be held liable for them.

A new bill introduced in Congress earlier this month could increase litigation risk for the retail industry by leaving companies unable to prevent the Consumer Product Safety Commission (CPSC) from disclosing inaccurate or premature information about potential product hazards. The Safety Hazard and Recall Efficiency (SHARE) Information Act, introduced on January 9, 2020, by U.S. Representative Bobby L. Rush (D-IL), would also increase the maximum civil penalty for violations of the Consumer Product Safety Act (CPSA) from $15 million to $50 million. Largely seen as a response to public criticism over the perceived delays in the CPSC’s disclosure of hazards associated with infant inclined sleepers over the last year, the SHARE Information Act would allow the CPSC to tell the public that a product may pose a safety issue before the hazard has been confirmed.