Just How Painful is This Going to Be? CPSC Speaks Out on Calculating Civil Penalties

The maximum civil penalty under the Consumer Product Safety Improvement Act for violations of CPSC enforced requirements is now $15 million.  On March 10, 2010, CPSC issued a final rule interpreting the factors used to determine the amount of a civil penalty (see the press release here).  The final rule preserves CPSC’s authority to determine penalty amounts based on a case-by-case assessment of the facts and its discretion to seek substantial penalties where CPSC believes they are warranted. Given the severity of the potential penalties and the risk that CPSC will feel compelled to use its enhanced authority, it is important for companies to understand the civil penalty factors, which are discussed in more detail here.

- Eric Rubel