This month, to the chagrin of many companies, the Consumer Product Safety Commission (CPSC) will begin accepting reports from consumers about products with its new online product safety database, SaferProducts.gov. The resulting fallout for companies will be substantial, as the agency has set the bar for acceptance of safety reports intentionally low in a move that will likely generate high volumes of claims that may or may not be legitimate. In doing so, the CPSC has transformed a law designed to provide consumers with an early-warning system about product defects into a Pandora's box of regulatory and product liability risks.

Early signs also indicate that the agency  intends to interpret its jurisdiction liberally. This may be troubling for the many companies that may be caught unaware that their products fall within the CPSC's scope.

For example, the agency has jurisdiction over consumer products and children's products under the Consumer Product Safety Act and various fabric products under the Flammable Fabrics Act. The CPSC oversees hazardous substances under the Hazardous Substances Act. And the agency even has the authority to impose poison prevention packaging on foods, drugs and cosmetics.

Given the possibility that the CPSC and other parties may aggressively use the database to serve their own interests, it is too risky for companies to ignore the database and allow reports to pile up. Businesses need to be proactive.

This raises a host of additional concerns that companies need to address. Here, we try to answer some of the most frequently asked questions.

Question #1 -How will the CPSC ensure that safety reports in the database are legitimate?

Answer:

The CPSC believes that everyone, even a competitor, who reports information to the database is under a legal duty to provide accurate information. It even requires each submitter to verify that he or she has done so before submission. The agency also points out that submissions will be subject to the False Statements Act and believes that "the fact that a submitter may have a professional interest in the report does not negate the truth of the report."

Notwithstanding CPSC's sunny view of human nature, the only information provided by a submitter about a possibly bogus complaint will be his or her name and full address (which could be a post office box). It is unclear at this time how the CPSC, with just this information, will be able to investigate misuse in order to prevent competitor manipulation of the database.

Question #2 - How can I convince the CPSC to not publish a report that is inaccurate?

Answer:

In simple cases (if, for example, the report references a product your company does not even make), you may be able to convince the agency that there is an error in time to prevent publication. Even these cases will likely require immediate notification, however.

In less clear-cut cases, you likely will not be able to do so in time to prevent the report from being published on the database. There is a 10-day hold from the time the report is received to when it is published, which does not provide a lot of time. But you will have the opportunity to comment on a report and have that comment published along with the report on the database. CPSC recently clarified that you will also have the right to later file additional comments, such as to disclose findings from investigations. 

Question #3 - How do I comply with other, non-CPSC reporting obligations and regulations without increasing my regulatory and products liability exposure?

Answer:

If you make or market products that fall within CPSC's jurisdiction, the new database will greatly complicate your risk profile. The reports will be kept in the database indefinitely.

The CPSC relies heavily on the disclaimer that it will post prominently on the database to ensure that users understand the database's shortcomings: "The Commission does not guarantee the accuracy, completeness or adequacy of the contents of the Consumer Product Safety Information Database, particularly with respect to the accuracy, completeness or adequacy of information submitted by persons outside the CPSC." 

Notwithstanding this disclaimer, the CPSC intends to aggressively use the database to identify possible enforcement actions. Given the accessibility of the database, federal agencies like the FTC, state attorneys general, private plaintiffs and competitors are likely to use it, with the risk that the disclaimer may become lost in the shuffle. And that means that companies whose names wind up here could face action from a number of fronts.

Question #4 - How can I investigate a safety report when I receive only a thumbnail sketch of the problem and no contact information about the submitter?

Answer:

You likely will not be able to. The only requirements for submitting a report are that the individual verifies that the information is true and provides the product description, the name of the manufacturer or labeler, and a brief narrative description of harm (or risk of harm).

The submitter also must include his or her full name and mailing address, but that information will not be passed on to the company named in the complaint unless the submitter consents to that provision. Those who work with clients that routinely handle complaints know that, in most cases, reporters will not consent to having their contact information submitted.

So all the CPSC will likely forward to you within five days of receipt is the safety report. Thus, your investigation will unfortunately be limited. The rest will be up to you, and this will obviously present a major hurdle to uncovering anything useful.

If you do not get an independent report at the same time you get the CPSC report, you do not have any other reports of similar problems in your files and you do not get any contact details, you likely will not be able to conduct and complete a meaningful investigation during the 10-day window before the CPSC publishes the report in the database.

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Jill B. Deal is a partner at Venable LLP who focuses on laws governing consumer products, food and drug law, and the FDA approval of therapeutic products.

Bruce Parker is a partner at Venable LLP who focuses primarily on product liability and toxic tort litigation.