Products Liability Law Daily Wrap Up, HOUSEHOLD PRODUCTS—Black & Decker Agrees to $1.575 Million Civil Penalty for failure to report defective electric lawn mowers, (Apr 29, 2015)

By Pamela C. Maloney, J.D.

Black & Decker (U.S.) Inc., of Towson, Md., has agreed to pay a civil penalty of $1.575 million and to maintain an internal compliance program to settle allegations by the Consumer Product Safety Commission that the company knowingly violated federal reporting requirements with respect to cordless electric lawnmowers that started spontaneously and that continued to operate after consumers released the lawnmower handles and removed the safety keys. The matter was subject to a maximum penalty of $1.825 million. In agreeing to the settlement, Black & Decker did not admit to violating the law (CPSC Press Release, No. 15-125, April 29, 2015)

Background. Black & Decker manufactured and sold the cordless lawnmowers under the Black & Decker and Craftsman brand names from 1995 to 2006. Starting in 1998, the firm began receiving consumer complaints that the lawnmowers would not turn off even after consumers released the handle and removed the safety key. Federal law requires that the blades on walk-behind lawnmowers stop when the operator releases the handle. Black & Decker’s lawnmowers continued to run even after consumers released the handle. Black & Decker also received consumer complaints, starting in 2003, that the lawnmowers would restart spontaneously after the lawnmower’s handle was released and the safety key removed. Black & Decker hired an outside expert in 2004, who identified the defect that caused the lawnmowers to continue to run. Despite knowing about the defect and the reported injuries, Black & Decker did not report the hazards to CPSC until 2009. Black & Decker agreed to recall the lawnmowers in 2010.

In announcing the settlement agreement, Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division noted that this ws Black & Decker’s fifth civil penalty since 1986 for failing to report safety defects with its products under CPSC’s jurisdiction, and this latest penalty is the largest amount Black & Decker has paid. “Not for the first time, Black & Decker held back critical information from the public about the safety of one of its products,” Mizer said. “The Department of Justice will continue to protect the public against companies that put profits over safety,” he added.

Compliance program. In addition to paying the $1.575 million civil penalty, Black & Decker has agreed to maintain an internal compliance program to ensure that the firm complies with CPSC’s safety statutes and regulations and also agreed to a system of internal controls and procedures that includes:

• written standards and policies;

• confidential employee reporting of compliance concerns to a senior manager;

• procedures for reviewing claims and reports for safety concerns and for implementing corrective and preventive actions when compliance deficiencies or violations are identified;

• effective communication of compliance policies and procedures, including training;

• senior management responsibility for, and general board oversight of compliance; and

• requirements for record retention.

Black & Decker also has agreed to pay $1,000 in liquidated damages for each day that it fails to comply with any provision of the agreement.

Companies: Black & Decker (U.S.) Inc.

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