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From Products Liability Law Daily, September 11, 2015

CPSC agrees to $3.5 million settlement with phil&teds USA over MeToo high chair

By John Dumoulin

The Consumer Product Safety Commission (CPSC) has reached a settlement agreement with phil&teds USA, of Fort Collins, Colorado, over CPSC charges that the company knowingly failed to report to the agency, as required by federal law, a defect and an unreasonable risk of serious injury concerning its MeToo high chair, according to a CPSC press release. The company has agreed to a $3.5 million civil penalty to settle the charges, as well as CPSC’s claim that phil&teds knowingly made material misrepresentations to agency staff during an investigation of the high chair in 2011. CPSC has provisionally accepted the agreement, and the company does not admit to CPSC’s charges (CPSC Press Release, No. 15-243, September 10, 2015).

Background. According to CPSC, the clamps of the MeToo high chairs can detach from the table and cause a child to fall to the ground, and if only one side of the high chair detaches, a child’s fingers can become crushed between the bar and the clamping mechanism, resulting in amputation. The agency said that between September 2009 and October 2010, phil&teds USA received multiple reports of one or both sides of the high chair detaching, including two incidents where children’s fingertips were amputated, but despite these reports and two design changes to fix the problem, phil&teds USA failed to immediately report the defect, the consumer incidents, or the design changes.

The company reported the MeToo high chair to CPSC in January 2011, but it failed to disclose that the high chair posed an amputation hazard, according to the agency, and it also allegedly withheld from CPSC staff that the sample high chair provided for analysis had been redesigned and was not the “representative sample” characterized by phil&teds. The MeToo high chair was recalled in August 2011, after phil&teds USA had imported and sold more than 13,000 units nationwide.

Settlement agreement. According to the settlement agreement with CPSC, phil&teds USA has agreed to the $3.5 million penalty, although CPSC has agreed to suspend all but $200,000 of the penalty based on phil&teds USA’s sworn representations that the company cannot pay more than that amount without ceasing business operations. In addition, the company has agreed to implement and maintain a compliance program to ensure compliance with the Consumer Product Safety Act (CPSA) and a related system of internal controls and procedures.

Compliance program. The compliance program that phil&teds USA has agreed to requires written standards, policies, and procedures to ensure that all information regarding the company’s compliance with the CPSA, including reports and complaints, is conveyed to the company’s responsible employees, according to CPSC’s release. In addition, the program also must address confidential employee reporting of compliance concerns to a senior manager; effective communication of compliance policies and procedures, including training; senior management responsibility for, and board oversight of, compliance; and requirements for record retention.

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