I work with a lot of manufacturers whose products fall under the jurisdiction of the Consumer Products Safety Commission (CPSC). I am often asked to provide advice on whether a product should be recalled and, if it is not, what the consequences are if that decision is mistaken. Typically, a failure to recall results in a monetary penalty for the company involved; sometimes a very hefty one. But last week, two corporate executives were sentenced to roughly 3 years in prison for their role in failing to timely recall a product in violation of the Consumer Product Safety Act (CPSA).

Prosecutors alleged that in as early as 2012, the manufacturer knew or should have known that the product involved, a dehumidifier, could overheat and catch fire, putting consumers at risk of personal injury or death. Over a year later, 2.2 million of these dehumidifiers were ultimately recalled. The products were linked to more than 2000 incidents and 450 fires, which caused over $19 million in property damage.

Prosecutors claimed that two United States based executives of the Chinese company that made the dehumidifiers participated in a cover up to avoid the litigation and other costs associated with a CPSC recall. While the executives claimed that they had taken actions to implore their Chinese parent to recall the products, the government argued those steps were insufficient and that the executives were in a position to notify the CPSC independently – which they did not do. The pair were convicted by a Los Angeles, California federal jury in November 2023.

One of the U.S. Attorneys involved made the following statement: "Corporate executives who choose to ignore the law will be held accountable — especially when death and serious injuries result … By putting profits over the safety of others, these defendants created serious risks to consumers, and we will continue to prosecute those who endanger the public." This is consistent with the more aggressive trend I am seeing from the government to enforce the CPSA and punish corporate wrongdoers.