[Congressional Record (Bound Edition), Volume 147 (2001), Part 13]
[Extensions of Remarks]
[Pages 18419-18420]
[From the U.S. Government Publishing Office, www.gpo.gov]



              CONSUMER PRODUCT RISK REPORTING ACT OF 2001

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                        Tuesday, October 2, 2001

  Mr. MARKEY. Mr. Speaker, I rise today to introduce the ``Consumer 
Product Risk Reporting Act of 2001,'' a bill intended to improve 
consumer safety by achieving increased compliance with existing 
requirements to report hazards. The legislation would increase the 
civil and criminal penalties that the CPSC can seek from firms that do 
not inform the Commission when they have a product that could pose a 
substantial hazard to consumers. The legislation would also help make 
some product recalls more effective.
  The CPSC is the government agency that makes sure cribs, toys, and 
other products in your home or around schools and in recreation areas 
are not hazardous, and recalls them when they are hazardous. The CPSC 
oversees the safety of 15,000 different kinds of consumer products. 
Each year there are more than 29 million injuries and about 22,000 
deaths associated with consumer products.
  Current law provides that if companies have information that one of 
their products has a safety defect that could create a serious product 
hazard or presents an unreasonable risk of serious injury or death, 
they are required to report that to the government. Unfortunately, some 
companies are not obeying the law. The CPSC estimates that in half of 
the most serious cases they deal with, the company has failed to report 
injuries. Instead, the information comes to the attention of the agency 
from its own investigators, from consumers, or tragically, from 
hospital emergency room reports or death certificates.
  When companies don't report, dangerous products that should have been 
recalled or modified remain on store shelves. They continue to be sold 
and they stay in consumers homes where they can cause serious injury or 
death.
  Some consumers pay a very high price for a company's failure to 
report.
  For example, a 3-year-old girl died while playing on her swing. Her 
grandfather was cutting weeds in the yard using a weed trimmer with a 
replacement head that was made with metal links. The end link broke off 
and it flew through the air as a piece of deadly shrapnel--travelling 
240 miles an hour. It hit his granddaughter in the temple, penetrated 
her skull and killed her.
  The company didn't tell the CPSC about this death, nor did they tell 
the CPSC about the 40 other serious injuries from chains breaking. The 
CPSC was forced to do its own investigation and recalled the product 
nationwide in May 2000.
  Such failures to report can result in tragic losses of life and limb 
that are avoidable and preventable if compliance with reporting were 
higher.
  Under current law, the CPSC can fine companies for violating the law, 
but the amount of the fine is limited by statute to a level that does 
not sufficiently deter violations. Under current law, companies can 
face criminal penalties for violating consumer product safety laws, but 
they are only misdemeanors. Under current law, in any recall, companies 
elect whether to provide a repair, replacement or refund for defective 
products. In most cases, the CPSC can find a good solution to the 
problem for consumers. But in other cases, especially where the product 
is older and has been on the market for many years, companies argue 
they can elect a refund that may not result in an adequate recall thus 
resulting in the dangerous product remaining with consumers.
  To remedy these deficiencies, the legislation would:
  Eliminate the cap on civil penalties for violations of product safety 
laws.
  Under current law, the CPSC cannot assess more than $1,650,000 for a 
related series of violations against a company that knowingly violates 
consumer product safety laws. The legislation would eliminate this 
maximum civil penalty. Many of the cases in which,the Commission seeks 
civil penalties involve very large corporations that can easily absorb 
a $1.65 million fine. For them, it is a cost of doing business. More 
substantial civil penalties would provide a needed incentive for those 
and other companies to notify CPSC of dangerous products so that the 
agency can take timely action to protect consumers. Other agencies, 
including the Federal Trade Commission, enforce laws with no ``cap'' on 
the amount of the penalty.
  Increase the penalty for a ``knowing and willful'' criminal violation 
of product safety laws from a misdemeanor to a felony and eliminate the 
requirement that the agency give notice to the company that is 
criminally violating the law.
  The legislation would increase the potential criminal penalties for a 
``knowing and willful'' violation of consumer product safety laws from 
a misdemeanor (up to one year in prison) to a felony (up to three years 
in prison). It would also increase the maximum monetary criminal 
penalty in accordance with existing criminal

[[Page 18420]]

laws. These heightened penalties are commensurate with the seriousness 
of product safety violations, which can result in death or serious 
injury to children and families. Other agencies have authority to seek 
substantial (felony) criminal penalties for knowing and willful 
violations of safety requirements, including the Food and Drug 
Administration for prescription drug marketing violations and the 
Department of Transportation for the transportation of hazardous 
materials.
  The legislation would also eliminate the requirement under the 
Consumer Product Safety Act that the Commission give notice of 
noncompliance before seeking a criminal penalty for a willful violation 
of the Act. The notice requirement makes it all but impossible to 
pursue a criminal penalty for violations of the Act, even in the most 
serious cases. The threat of a criminal felony prosecution would create 
an additional strong incentive for companies to report product defects 
to the Commission.
  Give CPSC clear authority to overrule the remedy chosen by a 
manufacturer to address a defective product in a product recall when 
the Commission determines that an alternative remedy would be in the 
public interest.
  Under current law, a company with a defective product that is being 
recalled can elect the remedy to be offered to the public. The company 
can choose repair, replacement, or refund ``less a reasonable allowance 
for use.''
  The legislation would continue to permit the company to select the 
remedy in a product recall. However, the legislation would allow the 
Commission to determine (after an opportunity for a hearing) that the 
remedy selected by the company is not in the public interest. The 
Commission may then order the company to carry out an alternative 
program that is in the public interest.
  Sometimes companies try to choose a remedy in a recall that does not 
further public safety. For example, a manufacturer may argue it can 
choose to refund the purchase price of a product, less a reasonable 
allowance for use even though the product has been on the market for a 
long time and the amount due consumers may be so insignificant that 
there is no incentive for the consumer to take advantage of the recall. 
This is especially true where the hazardous product is still useful to 
the consumer and the cost of replacement for the consumer is 
substantial. Companies may try to choose an insubstantial refund even 
though people have been at risk for a number of years, thousands of 
products are still in use, injuries are continuing to occur and a 
repair is available and feasible. In this example, a refund is no 
remedy at all, and offering a minimal refund would not serve the public 
interest.

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