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Recent CPSC Civil Penalties and What We Can Learn from Them
Being Proactive Can Help Reduce Risks
By Kenneth Ross
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ince January 2023, the U.S. Consumer Product Safety Commission (CPSC) has assessed civil penalties against eleven companies for late reporting. I’ve written previously about the legal basis for these reporting requirements and will not repeat those in detail in this article.1 However, it is useful to examine the facts of each of these settlements so that companies can identify some of the triggers used by the CPSC to seek civil penalties.

In addition, I have previously written about the compliance programs required by the CPSC in settlement agreements entered into prior to 2022.2 Looking at the most recent settlement agreements will reveal the kinds of compliance programs that the CPSC currently likes to see companies have in place.

On August 4, 2026, the Acting Chairman of the CPSC, Peter Feldman, made the following statement in connection with the most recent civil penalty.

He said: “After years of inconsistency, CPSC is returning to a coherent civil penalty regime, one that is predictable, proportionate, and grounded in statutory penalty factors. Penalties should reflect the gravity of the violation, the risks presented to consumers, the size and sophistication of the company, and its compliance history. A consistent framework strengthens deterrence, promotes fair treatment across cases, and provides regulated parties with clear expectations.”
And, he also said that the CPSC is focusing on companies that have paid civil penalties for prior similar reporting failures.3
Reporting Requirements
The most important responsibility of any manufacturer or product seller under the Consumer Product Safety Act (CPSA) is to report product safety issues that meet the statutory requirements under the Act to the CPSC.

The most important basis for reporting to the Commission is Section 15(b)(3), which requires reporting when the product has both a defect and the defect creates the possibility of a substantial product hazard. A Recall Handbook published by the CPSC in September 2021 provides a description of the law and regulations and other helpful information on how to analyze the need to report.

The first question is whether the product has a defect. In 16 CFR §1115.4, the CPSC lists the following factors to determine whether the risk of injury associated with the product is the type of risk that would render the product defective:

  1. The utility of the product;
  2. The nature of the risk of injury that the product presents;
  3. The necessity of the product;
  4. The population exposed to the product, and its risk of injury;
  5. The obviousness of such risk;
  6. The adequacy of warnings and instructions to mitigate the risk;
  1. The role of consumer misuse of the product, and the foreseeability of such misuse;
  2. The Commission’s experience and expertise;
  3. The case law interpreting federal and state public health and safety statutes;
  4. The case law in the area of products liability; and
  5. Other information relevant to the determination.
The next question to be answered is whether this “defect” could create a “substantial product hazard.” The regulations provide the following factors a manufacturer must consider in determining if there is a substantial product hazard:
  1. Pattern of defect;
  2. Number of defective products in commerce;
  1. Severity of risk; and
  2. Likelihood of injury.
Some of the important limitations on these factors are statements to the effect that a defective product that has no risk of serious injury or has little chance of causing even a minor injury would not ordinarily constitute a substantial hazard. Also, the CPSC considers injuries that have occurred or could occur in determining severity. Last, determining the likelihood of future injury considers the “intended or reasonably foreseeable use or misuse of the product…” (see the CPSC Recall Handbook, page 13).

There are also reporting requirements when the manufacturer or product seller has sold a product that does not comply with mandatory safety standards, for products that are not necessarily defective but do pose an unreasonable risk, and in situations where there have been a number of settled or adjudicated lawsuits.

As a general matter, the Commission wants you to report even if you aren’t sure it is required under the statute. They state:

“Because a product may be defective even when it is designed, manufactured, and marketed exactly as intended, a company in doubt about whether a defect exists should still report.”
CPSC Recall Handbook, page 12
(For more information on all four reporting requirements, see my reporting article referenced at the end of this article.)

If there is a situation that meets the threshold for reporting, or if the company does not know if they have a duty to report under the other sections of 15(b), the CPSA requires companies to report immediately.

The Commission defines this requirement as follows:

“A company must report to the CPSC within 24 hours of obtaining reportable information. The CPSC encourages companies to report potential substantial product hazards, even while their own investigations are continuing. However, if a company is uncertain about whether information is reportable, the company can take a reasonable time to investigate the matter. That investigation should not exceed 10 working days, unless the company can demonstrate that a longer time is reasonable under the circumstances.”
CPSC Recall Handbook, page 8
While all of these requirements and guidance are pretty vague, many companies have crossed the line and have been investigated and assessed a civil penalty from the CPSC for late reporting.
Civil Penalties
Examining the facts set forth by the CPSC for each of these recent civil penalty cases should give you a sense of the conduct that the CPSC deems to deserve a huge financial penalty. The facts stated in the following examples are from each of the CPSC’s press releases and do not contain the company’s response to the CPSC’s statement. In addition, the settlement agreements usually contain more detailed facts. (The press releases and some of the settlement agreements can be accessed at https://www.cpsc.gov/Business–Manufacturing/Civil-and-Criminal-Penalties, while some settlement agreements can only be accessed in the Federal Register.)

Starting in early 2021, the CPSC significantly increased the number of cases where civil penalties were sought. The most civil penalties were assessed in Fiscal Year 2023. In January 2023, Peloton settled a late reporting allegation for $19,065,000. That was followed by a civil penalty of $15,800,000 against Generac in May 2023. Then in August 2023, Whirlpool agreed to a settlement of $11,500,000. And finally, in September 2023, BJ’s agreed to pay $9,000,000 to settle a late reporting allegation.

In the Peloton case, the CPSC summarized the facts as follows:

“Beginning in December 2018 and continuing into 2019, Peloton received reports of incidents associated with pull under and entrapment in the rear of the treadmills, including reports of injuries. Despite possessing this information, Peloton did not immediately report to the Commission. By the time Peloton filed a report with the Commission, there were more than 150 reports of people, pets, and/or objects being pulled under the rear of the Tread+ treadmill, including the death of a child and 13 injuries, including broken bones, lacerations, abrasions, and friction burns. Peloton and the Commission jointly announced the recall of the Tread+ treadmill on May 5, 2021.

“Staff also charged that after the public announcement of the recall, Peloton knowingly distributed in commerce 38 Tread+ recalled treadmills using Peloton personnel and through third-party delivery firms.”

The facts that are set forth in the Generac settlement agreement are as follows:
“Beginning in October 2018 and continuing into 2020, Generac received reports of incidents from consumers whose fingers were partially amputated or crushed by the unlocked handle of the portable generator. Despite possessing this information, Generac did not immediately report to the Commission. By the time Generac filed a report with the Commission, there were five reports of consumers suffering finger amputations while attempting to transport the portable generators, which required hospitalization, surgery, and/or sutures and resulted in permanent disfigurement. Generac and the Commission jointly announced a recall of the portable generators on July 29, 2021.”
In August 2023, Whirlpool settled its case with the CPSC. The CPSC stated the facts as follows:
“Beginning in November 2017 and continuing into 2019, Whirlpool received numerous reports from consumers that cooktop surface elements turned on by themselves. Despite possessing information that reasonably supported the conclusion that the cooktops contained a defect that could create a substantial product hazard or created an unreasonable risk of serious injury or death, Whirlpool did not immediately report to the Commission. By the time Whirlpool filed an initial report with the Commission, Whirlpool had received at least 157 reports of the cooktops turning on by themselves, including 14 reports of property damage, four reports of objects igniting, and two reports of minor burns. Whirlpool and the Commission jointly announced a recall of the cooktops on August 28, 2019.”
The case against BJ’s was stated by the CPSC as follows:
“BJ’s sold 1,778 of the portable air conditioners between 2011 and 2012; 509 of those units were returned to BJ’s. In August 2016, one of the Royal Sovereign portable air conditioners sold by BJ’s was involved in a house fire in Smithtown, New York. A mother and her two children were rescued from the fire; the mother died of her injuries in December 2016. BJ’s learned of the fire no later than March 2017.

“In March 2021, BJ’s issued a notice to consumers who had purchased the air conditioners that the product ‘does not meet our safety standards’ and that ‘out of an abundance of caution [they should] stop using this product immediately.’”

Civil penalty settlements slowed down in Fiscal Year 2024 as there was only one settlement of $16,000,000 agreed to by HSN. The facts were stated by the CPSC as follows:
“By the end of 2012 and continuing into 2019, HSN received numerous reports that the steamers would spray, expel, and/or leak hot water while in use, resulting in serious and permanent injuries, a limited number of which constituted grievous bodily injury…

“By the time HSN filed an initial report with the Commission, HSN had received approximately 400 complaints of the steamers spraying or expelling hot water and approximately 700 additional reports of leaks, resulting in at least 91 reports of injury and 29 insurance claims alleging injuries, including reports of second and third-degree burns, scarring and one report of partial hearing loss. In addition, from information in HSN Online Reviews, HSN had knowledge of approximately 500 complaints of the steamers spraying or expelling hot water and approximately 150 complaints of leaks, including 87 reports of injury. HSN and the Commission jointly announced a recall of the steamers on May 26, 2021.”

Fiscal Year 2025 had three civil penalties. Bestar agreed to pay $16,025,000 in November 2024, Fitbit agreed to pay $12,250,000 in January 2025, and SunSetter Products agreed to pay $9,250,000 in April 2025. The Bestar facts were as follows:
“Beginning in September 2014 and continuing through 2022, Bestar received numerous reports that the wall beds had detached from the wall but did not immediately report to CPSC as required by federal law. By the time Bestar reported to the Commission, Bestar was aware of 35 incidents, including one fatality and 15 injuries, some of which were serious. Bestar and the Commission jointly announced a recall of the wall beds on April 7, 2022.”
The Fitbit facts as stated by the CPSC were:
“During 2018 and 2019 and continuing into 2020, Fitbit received numerous reports of the Ionic smartwatches overheating while being worn by consumers, causing some consumers to sustain burns including second-degree and third-degree burns on their arms or wrists. In early 2020, Fitbit initiated a firmware update to mitigate the potential for battery overheating; however, Fitbit continued to receive reports of consumers suffering burns due to the product overheating…”
The Commission and Fitbit jointly announced a recall of the Ionic smartwatches on March 2, 2022. The recall stated that the firm had received at least 115 reports in the United States of the battery in the smartwatch overheating, with 78 reports of burn injuries in the United States, including two reports of third‑degree burns and four reports of second-degree burns.

Finally, in Fiscal Year 2026, there have been four settlements so far. Clorox agreed in January 2026 to pay $14,150,000, Shimano agreed in March 2026 to pay $11,500,000, Daikin agreed in June 2026 to pay $8,500,000, and, in August, Johnson Health Tech Trading (JHTT) settled its case for $16,875,000. The Clorox facts were:

“In early 2019, Clorox microbiologists issued a written report documenting bacterial contamination in storage tanks and finished product, which they described as ‘possibly a Pseudomonad.’ **** While Clorox took steps to mitigate the potential for bacterial contamination, Clorox did not immediately report to the Commission as required. **** The Commission and Clorox jointly announced a recall of the Pine-Sol scented cleaning products on October 25, 2022.” 
The Shimano facts were as follows:
“Between 2013 and 2022, Shimano received thousands of warranty claims relating to the bicycle cranksets and dozens of reports of consumers globally sustaining personal injuries while using the bicycle cranksets, including bone fractures, joint displacement, and lacerations, due to falls from bicycles, contact with the broken cranksets, and impact with the ground. During this time, Shimano, Inc. made nine overall manufacturing and design changes that resulted in over twenty-five individual changes to the bicycle cranksets to mitigate the potential for the cranksets to separate and break.

“The Commission and Shimano North America Bicycle, Inc. jointly announced a recall of the 11-Speed Bonded Hollowtech II Bicycle Cranksets on September 21, 2023. The press release announcing the recall stated that the firm had received at least 4,519 incidents of cranksets separating, and six reported injuries, including bone fractures, joint displacement, and lacerations.”

The Daikin case involved the following facts:
“Between 2017 and 2023, Daikin received multiple warranty claims relating to the PTACs [Packaged Terminal Air Conditioners], over a dozen reports of fires, and one report of a smoke inhalation injury.

“The Commission and Daikin jointly announced a recall of the PTACs on August 3, 2023. The recall press release stated that the DigiAir module compressor in the PTACs can overheat, posing burn and fire hazards.”

And last, the CPSC stated the JHTT facts as follows:
“Between March 2018 and October 2022, JHTT received at least 874 reports of the treadmills unexpectedly accelerating, stopping, or changing speed, including at least 71 reports of consumer injury. Although JHTT took steps to mitigate the fall hazard through production changes in February 2021 and September 2021, and although consumer incidents continued to occur after these changes were implemented, JHTT did not immediately report to the Commission as required.”
For my earlier article from 2023, I reviewed a number of penalty matters for many years prior to 2021 and identified some additional factual scenarios that were different from just a failure to report to the CPSC after learning of accidents. In many of these penalty cases, one of the following things occurred:
  • The manufacturer made a design or manufacturing change (sometimes several times) because of a safety issue (in the eyes of the Commission, they were fixing a defective product) and didn’t report to the CPSC or notify prior customers about the change.
  • The manufacturer issued a dealer alert (sometimes several) concerning a safety problem but did not report to the Commission or alert its customers.
  • The manufacturer supplied incomplete or inaccurate information to the CPSC when it investigated a safety issue.
  • The retailer sold recalled products.
  • The manufacturer or retailer was a repeat offender.
So, looking at these eleven cases, what messages come through? Most of them involved delays of 6, 7, 8, and 9 years in reporting from the time when incidents or product returns started to occur. And five of the eleven involved a death. Virtually all of them involved some of the above issues. One of the most important reasons was the manufacturer making a significant safety-related design change in the product and not reporting to the CPSC. This is a red flag to the CPSC and can create problems in defending a product liability case. See my referenced article on this subject.4
Compliance Programs Required by CPSC
Since 2013, the CPSC has consistently inserted requirements into its settlement agreements that companies establish or upgrade their product safety programs to ensure compliance with the CPSC’s reporting requirements. These requirements have been generally consistent over the years. But let’s discuss the requirements in the latest 2026 agreements, as they may represent the CPSC’s current thinking on compliance.

Here are a few key provisions from the Shimano agreement:

  • Written standards, policies, and procedures, including those designed to ensure that information that may relate to or impact CPSA compliance, are conveyed effectively to personnel responsible for CPSA compliance, whether or not an injury has been reported;
  • Procedures and systems for tracking and reviewing claims, including warranty claims, and reports for safety concerns reported by consumers, whether inside or outside the United States, and for implementing corrective and preventive actions when compliance deficiencies or violations, are identified;
  • Mechanisms are in place to effectively communicate to all applicable Shimano employees, through training programs or other means, compliance‑related company policies, and procedures to prevent violations of the CPSA;
  • A mechanism is available for confidential employee reporting of compliance-related questions or concerns to either a compliance officer or to another senior manager with authority to act as necessary;
  • An annual internal audit of the effectiveness of policies, procedures, systems, and training related to CPSA compliance is issued. The audit evaluates opportunities for improvement, deficiencies or weaknesses, and the firm’s overall culture of compliance and filing of annual reports based on these audits for three (3) years from the date of the settlement; and
  • Retention of all CPSA compliance-related records for at least five (5) years, and availability of such records to CPSC staff upon request.
In addition, the Daikin settlement agreement required the company to appoint an internal compliance monitor. And the JHTT agreement added one additional requirement involving “the appointment of a product safety professional who will supervise compliance with the CPSA and make recommendations on timely section 15(b) reporting.” Last, the SunSetter agreement had a provision requiring “oversight and documentation of safety compliance by a governing body or board at SunSetter or its parent company.” Based on these agreements and the Feldman statement from August 2026, it is likely that all future settlement agreements will, at a minimum, require that the company appoint someone internally to monitor compliance and report to the CPSC.

These requirements are general enough that companies have great flexibility in deciding how to meet them. Also, it is impossible to determine how effective the safety programs will be when they are set up. Presumably, most companies do not intentionally fail to report to the CPSC while knowing that the safety issue meets the reporting requirements. What usually happens is that they believe that there is no defect or that the defect does not create a substantial product hazard, and they decide not to report.

Despite that, a company should consider these requirements and try to establish procedures, policies, and training efforts that objectively address compliance requirements. And companies should implement these programs before they have any safety issues that possibly need to be reported to the CPSC. If they do, they will hopefully avoid safety problems. But if they do have a reportable matter, a company’s attempt to comply with these requirements before the report might potentially earn them some benefit in their future dealings with the CPSC.

In my 2022 article, I said the following:

“It will be interesting to see in the future whether companies that have good safety programs are able to keep these provisions out of their settlement agreements and corrective action plans and whether these programs will enable them to escape all civil penalties or negotiate lower civil penalties.”
We still don’t know the answer to this question. There are no public reports on how many timeliness investigations are commenced and do not result in civil penalties and how many timeliness investigations are not even started because the company had a good safety program and could justify their delay in reporting. I have been told that CPSC compliance attorneys working on the recall do not make any decisions on whether to open a timeliness investigation. However, it is certainly possible that the attorneys charged with making such decisions will contact the company before deciding to open a timeliness investigation and ask questions about their safety program and when they knew that there were possible reporting issues.
Conclusion
The compliance programs in the CPSC settlement agreements are just good things to consider doing. I believe that having them in place before you have a problem will help convince the CPSC investigator that you didn’t know about safety issues and then intentionally ignored them. It is best to adequately investigate the incidents that are occurring, consult with experienced CPSC counsel, and, if appropriate, document the rationale for not reporting. The CPSC may disagree with this rationale, but at least you can show that you considered reporting and were knowledgeable about the specific requirements.

Unless the facts are egregious, the CPSC might not even institute a timeliness investigation. And, most importantly, these programs may be helpful in defending a product liability case, especially if the plaintiff is considering seeking punitive damages.

Endnotes
  1. “CPSC Gets Aggressive About Failure to Report,” In Compliance Magazine, May 2023.
  2. “Safety Programs and CPSC Mandates,” In Compliance Magazine, May 2022.
  3. “Statement of Acting Chairman Peter A. Feldman on $16.875 Million Civil Penalty Settlement with U.S. Subsidiaries of Taiwan‑Based Johnson Health Tech Co. Ltd.,” CPSC website, August 4, 2026.
  4. “The Risk of Post-Sale Safety Improvements,” In Compliance Magazine, May 2020.
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