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Business Costs & Regulation

Government to Put Product Safety Info Online

Manufacturers worry that a new government information bank could become a gold mine of information for class action suits.

Want to know whether that trampoline you’re thinking of buying the kids is safe? Come March, an online database from the government will make it easier to find out. The Consumer Product Safety Commission is well on its way to creating one, as mandated by Congress in the 2008 Consumer Product Safety Improvement Act. The database will be easily searchable and available to the public, allowing consumers both to report problems with products and to research safety records for them.

Manufacturers aren’t particularly happy with the idea. They worry that the database will become a complaint forum for disgruntled purchasers with beefs about prices, warranties, service or other concerns. The CPSC says, however, that the database will be limited to reports of legitimate safety worries. Even that raises concerns among manufacturers, though; they fear the database may become a breeding ground for lawsuits, with lawyers mining it for class action suits.

But the database does offer product makers some benefits and protections. Within the next month or so, businesses will be able to register to receive automatic alerts if a claim is logged about the safety of one of their products. That will give them a chance to work with a consumer directly to resolve a problem, provided the consumer included appropriate contact information. Moreover, the database will represent an early warning system, allowing manufacturers to determine if there is a legitimate problem and deal with it swiftly. At present, a manufacturer may not hear about a potentially dangerous defect for six months or more after a complaint is registered. The CPSC also says it will reorganize its management to ensure consumers’ claims as well as product makers’ responses get proper attention.

In addition, companies will have the right to dispute the accuracy of the claim with the CPSC or to block the publication of a claim which includes trade secrets. Because a company will have just 10 days to respond to the commission, establishing clear responsibility for receiving CPSC notices is critical. “Start thinking now about how you’re going to deal with the alerts so you don’t bounce e-mails back and forth,” wasting valuable time, advises Chuck Samuels, general counsel of the Association of Home Appliance Manufacturers and a member of the law firm Mintz, Levin, Cohn, Ferris, Glovsky, & Popeo PC. Brad Brush, general counsel for Lasko Products, a manufacturer of portable fans, heaters and other products, concurs, suggesting that firms register an e-mail address that reaches multiple recipients.

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Consumers currently can solicit information from the CPSC on safety-related incidents using time-consuming and cumbersome Freedom of Information Act requests. While the database is being built up and tested, that avenue will remain in place, as will the current hotline for incident reports. But the agency wants to encourage more digital reporting by consumers and others, and the database may eventually supersede the other reporting and research methods.