CPSC Proposes Revisions to its Interpretive Rule on Reporting Potential Product Hazards

These proposed revisions identify certain factors the CPSC and staff consider when assessing whether a product is defective or not. The proposed revisions also clarify that compliance with voluntary or mandatory product safety standards may be considered by the CPSC in making certain determinations under Section 15(b).

(Section 15(b) of the Act requires that every manufacturer (including an importer), distributor or retailer of a consumer product who obtains information which reasonably supports the conclusion that its product fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard upon which the CPSC has relied under section 9 of the Act, or contains a defect which could create a substantial product hazard as defined in section 15(a)(2) of the Act, or creates an unreasonable risk of serious injury or death, shall immediately inform the CPSC of such failure to comply, of such defect, or of such risk, unless the manufacturer, distributor or retailer has actual knowledge that the CPSC has been adequately informed.)

Three Revisions Proposed to Interpretive Rule on Substantial Product Hazard Reports

The following are highlights of the proposed revisions to the CPSC's interpretive rule at 16 CFR Part 1115 (Substantial Product Hazard Reports):

Four additional criteria would be added to definition of "defect." The first revision clarifies the CPSC's definition of "defect'' by adding four additional criteria CPSC staff use to evaluate whether a risk of injury is the type of risk that will render a product defective, thus possibly triggering a reporting obligation under section 15(b). The proposed revision would add the following factors: The obviousness of such risk; the adequacy of warnings and instructions to mitigate such risk; the role of consumer misuse of the product, and the foreseeability of such misuse. See CPSC notice for details of current factors.

Number of defective products distributed in commerce would be evaluated. The CPSC would also clarify that in evaluating the substantial risk of injury involving a particular consumer product, it recognizes that the risk of injury from a product may decline over time as the number of products being used by consumers decreases. While there may be other factors unique to a particular product which influence the rate of the reduction, if any, of injury risk, CPSC staff believes that this factor is reasonable and appropriate to consider when evaluating the impact of the number of defective products distributed in commerce, authorized by 16 CFR 1115.12(g)(1)(ii), when undertaking a substantial product hazard determination.

Guidance would be added to emphasize that compliance with voluntary and mandatory standards would be considered in evaluating 15(b) obligations, etc. The proposed revisions would also add a new 16 CFR 1115.8, "Compliance with Product Safety Standards.'' This section is intended to further explain how the CPSC views compliance with applicable voluntary or mandatory standards, particularly in the context of decisions under section 15(b) of the Act.

The CPSC is providing this guidance to, among other things, emphasize that compliance with voluntary or mandatory standards are relevant considerations to the exercise of its authorities, particularly in evaluating section 15(b) obligations. The provision on voluntary standards is added to emphasize that when the CPSC staff preliminarily determines whether a product presents a substantial product hazard under section 15(b) of the Act, the CPSC staff will consider compliance with any relevant voluntary standard as part of that determination. Therefore, by this provision the CPSC urges firms to consider compliance with voluntary standards in evaluating whether or not a substantial product hazard should be reported to the CPSC.

In the context of mandatory standards, the CPSC emphasizes that the CPSC will consider such compliance when making relevant determinations and exercising relevant authorities under the CPSA and other federal statutes. In particular, a product's compliance with a mandatory standard will be considered in determining whether and to what extent corrective action is necessary. This policy statement is not intended to reduce the volume of reporting to the Office of Compliance.

-written comments must be received not later than June 26, 2006

CPSC Contact - John Gibson Mullan (301) 504-7626

CPSC Proposed Rule (FR Pub 05/26/06) available athttp://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-4888.pdf