Interesting consumer product case
October 28, 2004
Mirama Enterprises, d/b/a Aroma Housewares Co. sold 30,000 to 40,000 juicers. They received 23 complaints informing them that the product was hazardous. Aroma violated federal law by not telling the Consumer Products Safety Commission about the complaints. However, some consumers told the CPSC, and the juicer was voluntarily recalled from the market.
Is Aroma responsible for 23 or 30,000 to 40,000 violations of the federal reporting requirement? Per Judge Alex Kozinski, a unanimous three-judge panel said, "You're paying the big bucks."
[Federal regulations] require a manufacturer, distributor or retailer of a product to notify the Commission if it obtains information that reasonably suggests the product creates serious risks of injury. Under [them], failure to report is a separate offense with respect to each individual unit on the market or in the hands of consumers. Accordingly, the district court properly held that Aroma’s failures to report constituted 30,000 to 40,000 separate offenses, and the court did not abuse its discretion in imposing a $300,000 penalty, regardless of whether Aroma’s juicers were actually defective.
United States v. Mirama Enterprises, No. 02-56466 (9th Cir., Oct. 28, 2004) (Kozinski for O'Scannlain and Silverman).