In 1997, a company named Sun-It (a subsidiary of E&B Giftware) manufactured and distributed some 47,000 citronella candles known as the “Money to Burn Torch.” As it happened, the wrapper surrounding the candle collected superheated melted wax. Some consumers reported to Sun-It that they had suffered serious burns when they blew on the candles or bumped into them. Others said that they had been burned when the candles unexpectedly flared. In all, over a period of 5 months, Sun-It received notice of 14 incidents in which consumers claimed to have suffered serious burns and permanent scarring after having been scalded by hot wax from the candles. Sun-It responded to these reports by stopping sale of the candles and recalling candles that remained in retail inventories. Nearly 17,000 candles, including roughly 3300 in unshipped inventory – more than a third of the total production – were recalled and destroyed.
In January 2004, almost 7 years after the recall, E&B Giftware – without admitting any wrongdoing – agreed to pay the U.S. Consumer Product Safety Commission (“CPSC”) a civil penalty of $100,000. Why was the company penalized? According to E&B Giftware, it did nothing wrong. (The facts of the E&B case, as well as the other cases referenced in this article, are based on the staff’s allegations, as set out in the Federal Register notices reporting the civil penalty agreements. Each company denied that it violated the CPSA.) However, the CPSC staff disagreed, contending that the 14 incident reports “reasonably supported the conclusion that the candles … contained a defect which could create a substantial product hazard or created an unreasonable risk of serious injury,” and that E&B Giftware had a statutory obligation, under Section 15b of the Consumer Product Safety Act (“CPSA”), to report this information to the CPSC when it was received in 1997. The January action was one of several CPSC cases announced in 2004 that targeted “do it yourself” corrective actions, in which companies attempted to fix problems without notifying the CPSC.
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