Devin K. Ross | Shook Hardy & Bacon | July 25, 2019
Product recall requirements
Recall criteria
What criteria apply for determining when a matter requires a product recall or other corrective actions?
The criteria for initiating a recall or other corrective action vary according to the governing statutes, regulations and agency. Generally, once a firm becomes aware that its product is in violation of a statutory or regulatory provision of the agency, presents a threat to safety or creates a substantial risk of injury to the public even though it is not in violation of any applicable rule, the implementation of a corrective action should be considered (see, for example, 15 USC section 2064). The decision to recall a product is an important one and can be made voluntarily, at the request of the regulating agency or both. If, however, the regulatory agency requests the product be recalled as an alternative to other administrative action, a firm should consider undertaking such action so as to avoid incurring harsher administrative penalties. To encourage prompt recalls of potentially dangerous products, the CPSA allows manufacturers to elect a ‘fast-track’ recall procedure that, if satisfactory to the CPSC, avoids the need for a formal determination by the CPSC that the product contains a defect that creates a substantial product hazard (www.cpsc.gov/en/Business-Manufacturing/Recall-Guidance/CPSC-Fast-Track-Recall-Program/). This approach should be a serious consideration for firms seeking to minimise potential litigation or prolonged CPSC action.
Consumer warnings
What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?
The requirements regarding publication of warnings and other information about a defective or dangerous product vary. For some products, statutes mandate that the manufacturer make specific notifications to all owners, purchasers and dealers of the product (see, for example 49 USC section 30118(b)). Most agencies provide guidance documents or product recall handbooks outlining suggested media for publishing such information. See also the discussion in questions 7 and 14. The CPSC is required by law to maintain a public online database containing any reports made by consumers or entities of harm or risks of harm related to products covered under the CPSA (CPSIA at section 212).
Recall notices
Are there requirements or guidelines for the content of recall notices?
All agencies provide guidelines regarding the content of recall notices and communications concerning products under their jurisdiction. Most recall or safety communications include information such as:
- the name of the recalling firm;
- the firm’s contact information;
- the name of the product being recalled;
- a general description of the danger posed by the product; and
- specific instructions on what should be done with respect to the recalled product.
Additional information such as model numbers, photographs or line drawings may be helpful or required depending on the particular product and media used for the notification (15 USC section 2064(i)). The MVSA specifically mandates seven elements that must be included in notices for motor vehicle recalls (49 USC section 30119). The FDA requires that recall notifications be in writing, contain specific categories of information about the product and the reason for the recall, specific instructions on what should be done with respect to recalled products, a ready means for recipient of communication to report to recalling firm and not contain any promotional or irrelevant materials (21 CFR section 7.49).
Media
What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?
No specific requirements exist as to the exact media that must be used in communicating warning or recall information to ultimate users or suppliers. Each regulatory agency provides its own guidelines and review of sent and proposed communications. However, a press release (submitted jointly or independently by the firm) is usually considered an initial step in communicating information to a wide range of consumers. Depending on the product, the degree of the risk posed and the specific distribution chain, other forms of media may also be appropriate or required, ranging from publication of notices in newspapers to direct contact with consumers via mailings, email or telephone.
Time frame
Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?
In most product recalls, the number of products that must be retrieved and the time period for which the recall must be conducted is a subjective fact-specific determination made on a case-by-case basis by the appropriate regulatory agency.
For example, in a recall involving a CPSC-regulated product, the recalling firm may submit a final progress report and request that the file be closed once it has determined that its corrective action plan has been implemented to the best of its ability and as many of the recalled products as possible have been removed from the marketplace. The CPSC will then review the firm’s progress and decide whether the file should be closed. If the CPSC determines the plan has not been effective, it may request that the firm implement broader corrective action measures.
Likewise, the FDA will terminate a recall when it ‘determines that all reasonable efforts have been made to remove or correct the product in accordance with the recall strategy, and when it is reasonable to assume that the product subject to the recall has been removed and proper disposition or correction has been made commensurate with the degree of hazard of the recalled product’ (21 CFR section 7.55(a)). A firm may request that the FDA make such a determination by submitting to the district office a statement in writing that the recall has achieved the articulated goals and including the most recent recall status report (21 CFR section 7.55(b)).
Repair and replacement
Must a producer or other supplier repair or replace recalled products, or offer other compensation?
Although not always mandatory, nearly all product recalls in the United States include some form of replacement, repair or other compensation mechanism. For example, the CPSC may not approve a firm’s proposed corrective action plan without some form of consumer remedy. Similarly, the FDA has authority to order a manufacturer, importer or any distributor of a device intended for human use, which the FDA determines presents ‘an unreasonable risk of substantial harm to the public health’ to undertake the repair, replacement or refund of the device or a combination of all three (21 USC section 360h(b)). Before issuing such an order, the FDA must provide the firm with an opportunity for an informal hearing at which time the firm may object to the classification of the FDA. Finally, it should be noted that providing a consumer remedy, even when not required by statute, may help achieve the appropriate level of consumer participation required by the administrative agency. By contrast, the MVSA specifically mandates that motor vehicle manufacturers remedy any defects without charge to the consumer (49 USC section 30120).
Penalties
What are the penalties for failure to undertake a recall or other corrective actions?
Most product recalls are conducted voluntarily by firms, which may obviate more burdensome administrative procedures provided by statute (eg, seizure, detention and injunction). Therefore, a firm that fails to voluntarily initiate a product recall, or does not undertake a requested recall, may run the risk of being subjected to these harsher penalties.