CPSC Issues Final Rule on Mandatory Recall Notices

Final Rule Makes Clarifying Changes to Proposed Rule

According to CPSC, the final rule makes certain clarifying changes to the March 2009 proposed rule on mandatory recall notices but is otherwise substantially similar. (See ITT's Online Archives or 03/23/09 news, 09032320, for BP summary of the proposed rule.)

Highlights of CPSC Remarks, Comments Received

CPSC received 43 comments in response to its March 2009 proposed rule. Highlights of CPSC responses to those comments as well as statements that were not in response to any specific comment include the following (partial list):

CPSC Authority to Order Mandatory Recalls Unchanged

CPSC explains that the CPSIA did not alter the authority of CPSC or a U.S. district court to order mandatory recall notices or to control the form and content of such notices. Instead, the CPSIA requires CPSC to issue a rulemaking laying out content requirements for these notices and establishing guidelines that set forth a uniform class of information to be included in them.

Mandatory Recalls Rarely Ordered

According to CPSC, mandatory recalls are rare in its history. In a press release on the final rule, CPSC notes that in 2009, 100% of the recalls announced to consumers were done voluntarily and cooperatively with impacted firms. CPSC emphasizes that the final rule will not alter the agency's reliance on voluntary recalls.

Voluntary Recalls Not Covered by Final Rule

The final rule does not contain requirements for voluntary recall notices which result from corrective action settlement agreements with CPSC staff. If CPSC decides to extend the requirements to voluntary recall notices, it would proceed with a separate rulemaking. CPSC states that while the final rule may serve as a general guide for information to include on voluntary recall notices in some instances, each voluntary recall is unique and is negotiated as such.

Additional Information May be Required

CPSC states that the CPSIA did not alter its ability to require both voluntary and mandatory recall notices to be tailored to a particular recall scenario. Therefore, information in addition to what is laid out in the final rule may be required for a specific recall.

Mandatory Recall Notice Must List All Units Manufactured, Imported, or Distributed

The statute requires firms to state product unit information in a mandatory recall notice. CPSC states that its interpretation of this section of the statute is consistent with its past practice for all recall notices, which is to list all units of a product manufactured, imported, and/or distributed in commerce.

Identification of Manufacturer and Importer

The statute requires that a mandatory recall notice include an identification of the manufacturer of the product. CPSC explains that as the Consumer Product Safety Act (CPSA) defines ''manufacturer'' as "any person who manufactures or imports a consumer product," any firm that manufactures, produces, assembles or imports a consumer product, or any component part thereof, may be characterized as a product manufacturer.

In addition, the rule anticipates that many consumer products have both foreign and domestic manufacturers and importers, both of whom must be identified. In addition, the final rule clarifies that foreign manufacturers must be identified by: (i) legal name; (ii) city; and (iii) country of headquarters.

Identification of "Significant" Retailer

CPSC explains that the sole purpose of identifying retailers in the recall notice is to assist consumers with product identification. It has no effect on which firm issues a recall notice or has responsibility for conducting a recall.

Party Responsible for Conducting Recall

CPSC states that determining which party is responsible for conducting the recall is outside the scope of the final rule.

Direct Recall Notices

CPSC clarifies that even though the final rule states that a direct recall notice should be used for each consumer for whom a firm has direct contact information or when such information is obtainable, assessing whether direct notice is necessary, appropriate, or possible in a particular situation is best done on an individual basis as determined by CPSC or a courts.

Penalties for Noncompliance

The CPSA provides that it is unlawful for any person to fail to comply with an order issued under section 15(c) or (d) of the CPSA. Accordingly, these penalty provisions already apply to mandatory recall orders, and CPSC declines to duplicate these provisions in the rule.

Highlights of Final Rule

The final rule adds a new Subpart C to 16 CFR Part 1115 which applies to manufacturers (including importers), retailers, and distributors of consumer products and establishes guidelines and requirements for mandatory recall notices to ensure that every recall notice effectively helps consumers and other persons to:

identify the specific product to which the recall notice pertains;

understand the product's actual or potential hazards to which the recall notice pertains, and information relating to such hazards; and

understand all remedies available to consumers concerning the product to which the recall notice pertains.

Guidelines and Policies for Mandatory Recall Notices

According to the final rule, mandatory recall notices should be guided by the following guidelines and policies (partial list):

Sufficiently ID product & hazards. A recall notice should provide sufficient information and motivation for consumers and other persons to identify the product and its actual or potential hazards and to respond and take the stated action. A recall notice should clearly and concisely state the potential for injury or death.

Simple language. A recall notice should be written in language designed for, and readily understood by, the targeted consumers or other persons. The language should be simple and should avoid or minimize the use of highly technical or legal terminology.

Targeted & tailored. A recall notice should be targeted and tailored to the specific product and circumstances. In determining the form and content of a recall notice, the manner in which the product was advertised and marketed should be considered.

Direct recall notices. Direct recall notices are the most effective form of recall notice. A direct recall notice should be used for each consumer for whom a firm has direct contact information, or when such information is obtainable, regardless of whether the information was collected for product registration, sales records, catalog orders, billing records, marketing purposes, etc.

Website recall notice. A Website recall notice should be on a Website's first entry point such as a home page, should be clear and prominent, and should be interactive by permitting consumers and other persons to obtain recall information and request a remedy directly on the Website.

Use at least 2 notice types. At least two of the following recall notice forms should be used: (i) letter, Website posting, electronic mail, RSS feed, or text message; (ii) computer, radio, television, or other electronic transmission or medium; (iii) video news release, press release, recall alert, Web stream, or other form of news release; (iv) newspaper, magazine, catalog, or other publication; or (v) advertisement, newsletter, and service bulletin.

Required Contents of Mandatory Recall Notices

Unless otherwise prescribed by order by CPSC or a U.S. district court, every mandatory recall notice is required to include the following (partial list):

identification of manufacturer - a recall notice must identify each manufacturer (including importer) of the product and the country of manufacture. If a product has been manufactured outside the U.S., a recall notice must identify the foreign manufacturer and the U.S. importer. A recall notice must identify the manufacturer's legal name and the city and state of its headquarters, or, if a foreign manufacturer, the foreign manufacturer's legal name and the city and country of its headquarters;

identification of recalling firm - including whether the recalling firm is a manufacturer (including importer), retailer, or distributor;

identification of significant retailers²;

product description - among other things, a product's description should include model numbers, serial numbers, date codes, stock keeping unit (SKU) numbers, and tracking labels, including their exact locations on the product;

description of action being taken (e.g. stop sale and distribution in commerce, recall to the distributor, retailer, or consumer level; repair; etc.);

product's intended or targeted use population (e.g., infants, children, or adults);

description of substantial product hazard;

dates of manufacture and sale;

number of units - state the approximate number of product units covered by the recall, including all product units manufactured, imported, and/or distributed in commerce;

price;

description of incidents, injuries, and deaths;

description of remedy (e.g. refunds, product repairs, replacements, rebates, etc.);

the word ''recall'' in the heading and text;

its date of release, issuance, posting, or publication; and

any other information as ordered by CPSC or a U.S. district court.

CPSC Must Review & Approve Mandatory Recall Notices Before Dissemination

Before a firm can publish, broadcast, or otherwise disseminate a mandatory recall notice to be issued pursuant to an order under section 15(c) or (d) of the CPSA (15 USC 2064(c) or (d)), the CPSC must review and agree in writing to all aspects of the notice.

¹Enacted as Public Law 110-314 on August 14, 2008.

²A retailer is significant if: (1) The retailer was the exclusive retailer of the product; (2) The retailer was an importer of the product; (3) The retailer has stores nationwide or regionally-located; (4) The retailer sold, or held for purposes of sale or distribution in commerce, a significant number of the total manufactured, imported, or distributed units of the product; or (5) Identification of the retailer is in the public interest.

CPSC contact - Marc Schoem (301) 504-7520

CPSC press release (dated 01/11/10) available at http://www.cpsc.gov/cpscpub/prerel/prhtml10/10106.html

CPSC final rule (FR Pub 01/21/10) available at http://edocket.access.gpo.gov/2010/pdf/2010-873.pdf