Products Liability Law Daily Sunbeam to pay $4.5 million to settle charges it failed to report coffee maker defects
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Tuesday, June 7, 2016

Sunbeam to pay $4.5 million to settle charges it failed to report coffee maker defects

By Colleen Kave, J.D.

Sunbeam Products, Inc. of Boca Raton, Florida, doing business as Jarden Consumer Solutions, will pay a civil penalty of $4,500,000 to settle charges that the company failed to notify the Consumer Product Safety Commission, as required by federal law, of defects in its coffee makers that could create a substantial product hazard or an unreasonable risk of serious injury or death. The agreement, which was provisionally accepted by the Commission by a vote of 3-2, was entered into for purposes of settlement only and did not constitute an admission by Sunbeam or a determination by the CPSC that the company violated the CPSA’s reporting requirements (In the Matter of Sunbeam Products, Inc. d/b/a/Jarden Consumer Solutions, May 25, 2016; CPSC Notice, 81 FR 36522, June 7, 2016).

According to CPSC staff allegations, from 2010 to 2012, 520,000 of these Mr. Coffee Single Cup Brewing System BVMC-KG1 series coffee makers were manufactured, imported, distributed, and sold, and between 2011 and 2012, Sunbeam received numerous complaints that the brewing chamber in the coffee makers was opening and expelling hot water and hot coffee grounds towards consumers. These incidents included reports that at least 32 consumers were burned by the coffee makers. Despite having information reasonably supporting the conclusion that the coffee makers were defective and that the build-up of steam pressure could force the brewing chamber open and expel hot liquid and coffee grounds, the company did not notify the Commission immediately of the reported defect or its associated risks.

In response to the consumer complaints, Sunbeam conducted an investigation to try to determine the cause of the chamber malfunction. The company eventually determined that these incidents were related to the unanticipated build-up of steam within the coffee makers’ hot water tank. According to the company, the steam build-up occurred when a consumer brewed a second cup of coffee with four or fewer ounces of water immediately after an initial eight-ounce brew without changing the coffee pod. The coffee makers’ instructions provided that coffee be brewed by filling the brewing chamber to its fill line (i.e.eight ounces of water). When filled to the fill line, the coffee makers did not create steam and, thus, did not result in the chamber opening. After concluding its investigation, Sunbeam voluntarily filed a report with the Commission.

Mohorovic’s statement against settlement. CPSC Commissioner Joseph P. Mohorovic, who voted against the settlement, issued a statement in which he reiterated his concern over the ways in which the agency calculates, imposes, and settles civil penalty demands for alleged violations of CPSC rules. Opining that the settlement amount in this case was too high and was unsupported by the facts, Mohorovic lamented that the agency does too little to bind its penalty demands and settlements to the details of the case and factors enumerated in the statutes and rules. The Commissioner called upon the agency to provide more clarity and transparency regarding the determination and settlement of civil penalties, explaining that doing so will allow companies to better understand the behaviors to avoid if they prefer not to be penalized and reduce corporate confusion and distrust.

Compliance program. In addition to the civil penalty, the settlement agreement requires Sunbeam to implement and maintain a compliance program designed to insure compliance with the CPSA and regulations enforced by the agency. The compliance program must include the following:

  1. written standards and policies;
  2. written procedures that provide for the appropriate forwarding to compliance personnel of all information that may relate to, or impact, CPSA compliance, including all reports and complaints involving consumer products, whether an injury is referenced or not;
  3. a mechanism for confidential employee reporting of compliance-related questions or concerns to either a compliance officer or to another senior manager with authority to act as necessary;
  4. effective communication of company compliance-related policies and procedures regarding the CPSA to all applicable employees through training programs or otherwise;
  5. Sunbeam senior management responsibility for CPSA compliance and accountability for violations of the statutes and regulations enforced by the Commission;
  6. Sunbeam governing body oversight of CPSA compliance; and
  7. retention of all CPSA compliance-related records for at least five (5) years, and availability of such records to staff upon reasonable request.

Any interested person may ask the Commission not to accept this agreement or otherwise comment on its contents by filing a written request by June 22, 2016.

The case is CPSC Docket No. 16-C0004.

Attorneys: David P. Callet, Esq. (CalletLaw, LLC) for Sunbeam Products Inc. Mary T. Boyle, Acting General Counsel, U.S. Consumer Product Safety Commission.

Companies: Sunbeam Products, Inc. d/b/a/ Jarden Consumer Solutions

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