Civil Penalties |
In 2008, the CPSC obtained the authority to levy civil penalties with maximum amounts of up to $15 million (up from $1.85 million). And the agency, under the recent leadership of CPSC Chairman Elliot Kaye, has signaled its intent to levy more penalties that approach that maximum figure. The agency's leadership is seeking to counter a perception that some firms may view civil penalties as "the cost of doing business". We expect the CPSC to continue flexing its muscle in this area.
We believe that businesses should create systems to protect itself from the negative impact of a civil penalty investigation to a company's reputation and bottom line. We provide consultation on filing timely, complete, and accurate Section 15b reports. We also encourage firms to take more proactive measures to avoid late reporting to CPSC and also to demonstrate its good faith. Consider the assistance of experienced counsel in drafting or reviewing compliance and product safety plans. Many of the recent CPSC civil penalties have imposed compliance plans as a condition of a civil penalty settlement. And, in many cases, the fact that firms may not have already had such policies in effect (or the policies were seen as inadequate) has appeared to serve as an aggravating factor in the Commission's imposition and the amount of the civil penalty. |