The Consumer Product Safety Commission (CPSC) recently announced the latest penalties imposed on companies in 2014 for failure to report potential product defects. The first, announced on October 28, 2014, was the largest fine ever imposed by CPSC—a $4.3 million civil penalty agreed to by Baja, Inc. and One World Technologies, Inc., involving minibikes and go-carts. The second was a $700,000 fine against Williams-Sonoma for failure to report Roman shades sold at Pottery Barn Kids.

ALLEGATIONS LEADING TO PENALTIES -

CPSC alleged that Baja failed to report that certain minibikes and go-carts posed a safety hazard even after receiving complaints of fire, sudden acceleration, and stuck throttles. According to CPSC, the minibikes and go-carts “contain a defect which could create a substantial product hazard” and “create an unreasonable risk of serious injury” due to fire and burn hazards and “because the throttle can stick due to an improperly positioned fuel line and cable.” CPSC also stated that Baja redesigned the fuel line to remedy the hazard but did not inform consumers about the change.