The partial federal government shutdown forced the U.S. Consumer Product Safety Commission (“CPSC” or “Commission”) along with other agencies to close for 35 days. In fact, the last recall on the Commission’s website is dated December 20, 2018—two days before the unprecedented shutdown began.
As reported on the Hunton Insurance Recovery Blog on January 18, 2019, policyholders facing any type of products liability scored a win in a recent decision from the District Court for the Northern District of Illinois. The court found that an insurance company must defend its insured against claims arising out of a recall while simultaneously funding the insured’s affirmative claims for recovery.
In a recent unpublished ruling, the Ninth Circuit affirmed the dismissal of a putative class action lawsuit alleging that Blue Diamond Growers mislabeled its almond beverages by failing to identify products as “imitation milk.” Painter v. Blue Diamond Growers, No. 17-55901 (9th Cir. Dec. 20, 2018).
In a 2017 interview, Nigel Travis, former CEO of Dunkin’ Brands, stated that “delivery will be the next wave” in the restaurant industry and that it would “be like a revolution,” occurring “faster than anyone thinks.” Travis was not wrong; in fact, recent statistics shared by Melissa Wilson at the 2018 Restaurant Leadership Conference show Travis’ prediction quickly taking hold – 86% of consumers are using off-premise delivery services at least monthly and one third of consumers are using it more than they did a year ago. By some estimates, delivery services are projected to grow at least 12% per year over the next five years. While a handful of restaurants are filling the delivery demand themselves, more and more restaurants are looking to third-party delivery service providers to help them connect with the consumer. In fact, “third-party delivery services like UberEats, Grubhub, and Postmates currently represent $9 billion in restaurant sales today, and they are predicted to account for $16 billion in sales by 2022.”
December was a quiet month in the world of recalls for two reasons. First, there were only 19 product recalls—the second lowest number of monthly recalls in 2019. Second, the partial federal government shutdown has forced the CPSC along with other agencies to close until President Trump and Congress can resolve their well-publicized funding dispute.
The FTC has proposed amendments to its Energy Labeling Rule. The Rule requires manufacturers to attach yellow EnergyGuide labels providing estimated annual energy cost, energy consumption, and a comparability range to covered products, and prohibits retailers from removing these labels or rendering them illegible. The Rule also requires sellers, including retailers, to post label information on websites and in paper catalogs from which consumers can order products.
With a new commissioner confirmed in September, the Commission once again has five commissioners. A philosophical divide along party lines surfaced this month in two decisions.
The first decision involved the settlement of an administrative lawsuit filed by the CPSC in February. The lawsuit alleged that a distributor refused to recall three-wheeled jogging strollers after consumer complaints that the front wheel can detach suddenly during use, causing injuries to at least 50 children and 47 adults. To settle the lawsuit, the distributor agreed to notify dealers and retailers and to “develop and launch an information campaign that will include an instructional video demonstrating how to safely and correctly operate” the stroller. Eligible consumers who participate in this campaign can receive “incentives,” such as hardware to repair the stroller or a 20% discount towards the purchase of a new stroller from the same distributor.
October began with a CPSC announcement that a major retailer agreed to pay a $3.85M civil penalty for failing to report that a trash can it sold contained a defect or created an unreasonable risk of serious injury. The retailer sold 367,000 of the trash cans nationwide between December 2013 and May 2015. Allegedly the trash can’s plastic collar may dislodge, exposing a sharp edge and posing a laceration hazard to consumers. The retailer received 92 consumer complaints about this alleged defect but did not immediately notify the CPSC of the defect. The CPSC announced a recall of the trash can in July 2015. In addition to the civil penalty, the retailer agreed to maintain a compliance program and a system of internal controls and procedures to ensure it discloses information to the CPSC in accordance with applicable law. The Commission voted unanimously (4-0) to accept the settlement. Continue Reading Recall Roundup: October
This past week, several consumer actions made headlines that affect the retail industry. Continue Reading Consumer Protection in Retail: Weekly Roundup
Brick and mortar retailers are rapidly diversifying checkout and payment methods to combat the erosion of sales to online channels and provide an improved shopping experience for consumers. From self-checkout kiosks, to store-specific mobile applications for payment, scan-as-you-go devices, and even ‘just walk out’ models, retailers are reinventing consumer’s notions of the traditional checkout line by going cashierless. Some estimates predict that these automated technologies could account for 35% of retail sales in the next 20 to 30 years. Continue Reading Lawyering Cashierless Technologies