Greater Regulatory Activity from CPSC – Importer Liability for Product Safety

Two days ago, the CPSC (Consumer Product Safety Commission) filed suit against Spectrum Brands, a company that imported a Black & Decker coffeemaker and failed to report that it was unsafe when customers complained, then continued to sell the recalled goods after the recall was announced.

Usually when these lawsuits are filed, I know who the company is that is the defendant – Office Depot, Burlington Coat Factory, Kohl’s – but who is Spectrum Brands? Apparently, Spectrum Brands is a conglomerate company that imports a broad variety of brands for sale in the US – in this case, Black & Decker, although over time, they’ve collected quite a number of well known brands, including George Foreman and Iams.

Here’s their statement to suppliers about product safety and liability:

(5) Product Liability, Recall, and Insurance. Seller will indemnify Buyer and save Buyer harmless from and against any and all suits, claims, expenses, costs and damages (including attorney’s fees) resulting from, growing out of, or incurred by the sale or recall, distribution or use of any of such goods, and will defend at Seller’s own expense on behalf of the Buyer any and all such suits and claims. However, Buyer may, at its election, defend any and all such suits and claims at the expense of Seller, and Seller will reimburse Buyer for such expense.

Unfortunately for Spectrum Brands, as the importer of the product, they were legally liable for the goods, regardless of trying to push it off onto their suppliers.

Spectrum Brands did what many companies do about product compliance in the US – they forgot that just because you can import and sell it doesn’t mean that your responsibility for the product ends there. As importer, you are just as legally liable for the safety of the product as the manufacturer, and if you are the only legal entity in the US, then you are SOLELY liable for the product in the US. For CPSC, this includes extensive reporting and recordkeeping requirements that extend for years beyond initial import of the goods.

Bottom line: if you are the importer of record, you can be held legally liable for any product safety issues that arise with the products you bring into the US.