The CPSC recently released a new monthly progress report form for companies conducting recalls with the agency. The revised form is in some respects better written than its predecessor and retains many of the old information reporting categories, disposes of or modifies other information fields from the old form, and contains entirely new and already somewhat controversial information requests. For those unfamiliar with the monthly report form, it is a document that companies conducting joint recalls with the CPSC fill out and submit regularly throughout the course of a recall in accordance with their corrective action plan (“CAP”).
The document serves as one of the CPSC’s various measures of how effectively the recall is being carried out. The revised form now requests companies submit the following information concerning a recall:
- Monthly total of products “corrected” (usually meaning repaired, replaced, or refunded), cumulative number of products corrected throughout the recall, total number of products recalled, and where the products are in the supply chain for each of those categories
- Total number of incidents, injuries, and deaths that occurred before and after the recall
- Number of consumers the company notified about the recall by phone, email, and regular mail
- Number of consumers that contacted the company about the recall by phone, email, and regular mail
- Whether the recall is posted on the company’s homepage (along with an explanation if not) and the monthly total of “visits” the recall website has received
- Whether the company found the recalled product on any online auction websites along with any action taken
- How many times the company has posted the recall notification using traditional advertising and social media platforms such as Facebook and Twitter
- How many times the recall notice has been “shared,” “liked,” or “retweeted” on social media
The two most notable changes from the old monthly form involve the heavy emphasis on reporting the number of notifications a company has made through social media platforms and reporting on whether the company has found the recalled product on any online auction websites.
Although the CPSC’s recently proposed amendments to its voluntary recall regulations directly indicated the agency’s desire for companies to distribute recall notifications using social media, many believed the rule would be finalized before this formally went into effect for all recalls. Additionally, many companies that do not traditionally use social media are unsure how to comply.
Equally as surprising and perhaps more significant is the new question regarding online auction sites. Many companies have traditionally considered the policing of recalled products illegally resold online to be the function and responsibility of the CPSC, which has the enforcement authority necessary to take appropriate actions in such situations. Such a requirement has not been a part of CAPs submitted by companies and approved by the Commission in the past. Although, with such limited resources to police the entire internet, one can understand that the CPSC is interested in getting help from companies conducting recalls.
Some have already raised questions of the legal propriety of this provision if it's intended to create a new requirement for voluntary recalls through its inclusion on this form rather than through an agency rulemaking. At a minimum, it would seem this potentially onerous new recall provision should have been part of the recently proposed amendments to the regulations governing how the agency conducts voluntary recalls.
So what do these and the other new information requests mean for companies that are currently conducting or discussing recalls with the CPSC?
For companies already conducting recalls, look at your corrective action plan and the CPSC’s acceptance letter for guidance on what your company agreed to as a part of the recall. Even though these agreements are not legally binding, your company should be aware of what it has previously agreed to and how that matches up with the new monthly reporting form.
For companies currently engaged in recall discussions or that may need to have such discussions in the future, you’re likely to see most, if not all of these new provisions inserted into the corrective action plan proposed by and negotiated with the CPSC. It will be up to each individual company and their counsel to negotiate these and other provisions of the voluntary recall and ensure all corresponding obligations and reporting requirements are well understood by both parties and clearly stated in the agreement.
It is becoming increasingly clear that the days of the more informal corrective action plans, which were in many cases negotiated by company engineers or product safety managers, are a thing of the past. With these newly added provisions and the changes in the recently proposed amendments to the voluntary recall regulations, corrective action plans require a whole new level of scrutiny.