You’ve Received a Notice of Violation from the CPSC – Now What?

Each year, the U.S. Consumer Product Safety Commission (the “CPSC” or “Commission”) utilizes its import surveillance program, surveys the market, and reviews reports from consumers and companies, to identify violations of the federal statutes, regulations, and mandatory standards it enforces.¹ The CPSC issues thousands of “Notices of Violation,”² identifying alleged violations and requesting that the receiving manufacturer, importer, or retailer take certain corrective action. 

For many companies in the consumer product industry, receiving a Notice of Violation (“NOV”) can feel daunting. But with an understanding of the CPSC’s purpose and process for NOVs and the implementation of certain best practices, companies can turn receipt of a NOV into an opportunity to build rapport with the CPSC and to reinforce and strengthen existing compliance practices. Ultimately, by responding to a NOV, companies can achieve two goals: (1) confirm only safe, compliant products are in the market and (2) reduce business risks and liabilities.

I Received a NOV: What Is It? 

A NOV (sometimes called a “Notice of Noncompliance” or, at ports of entry, a “Letter of Advice”) is issued by the CPSC’s Office of Compliance under the Commission’s investigatory and enforcement authority.³ Each NOV typically includes two components:⁴

1. An allegation of noncompliance, identifying the federal statute, regulation, and/or mandatory standard allegedly violated, such as the Consumer Product Safety Act, the Federal Hazardous Substances Act, or the Flammable Fabrics Act; and
2. Requested corrective action, identifying steps the CPSC wants taken to remedy the alleged noncompliance, which may include:
   • Correct Future Production. The CPSC may ask a company to correct the design or manufacturing process for a product to eliminate an identified defect(s) or meet a mandatory safety standard, while permitting continued distribution or sale of current inventory within the United States.
   • Product Seizure. The products may not make entry into the United States or be distributed. The final disposition of the seized products is determined by U.S. Customs and Border Protection (CBP).
   • Conditional Release of Products. The products will be conditionally released to a designated bonded warehouse where they will be quarantined and may not be sold, distributed, or moved without prior CPSC approval. The products must then be reconditioned such that they become compliant or destroyed.
   • Reconditioning. The company must remediate the products to be compliant with mandatory safety requirements.
   • Destruction. The company must destroy the products at its expense in a manner that renders the products unusable and disposed of in accordance with environmental regulations. Destruction must be completed within 30 calendar days and there may be additional requests to verify, such as submitting documents or consenting to inspection.
   • Stop Sale. The company must immediately stop the sale, distribution, and importation of the product and correct all future production. The company must also notify distributors and retail networks that the product violates federal safety requirements and that continued distribution and sale of the product violates federal law.
   • Stop Operation. The company must cease operation of the referenced product, which may include closure of the facility where the product is manufactured.
   • Recall. The company must remove the product from distribution and offer a no-cost recall remedy, such as a refund or replacement to consumers. The company must also immediately issue a stop sale and submit requested information.

Most identified violations from 2016 to 2019 involved tracking label requirements (26%), lead in children’s products (20%), and third-party certificate requirements (11%).⁵

I Received a NOV: What Are My Options?

Not every NOV leads to a recall, seizure or product destruction, whether requested by the CPSC or not.  Upon receipt of a NOV, the recipient has two response options: agree or challenge.⁶

If the recipient agrees with the CPSC’s findings, the company may accept the corrective action outlined in the NOV or negotiate alternative corrective action with the CPSC. The CPSC will typically monitor implementation of the corrective action and close the case once the actions are “adequately” implemented.

If the recipient decides to challenge the CPSC’s findings and/or proposed corrective action, it should respond promptly and clearly state the reasons for any disagreement. A prompt response will open a dialogue with the CPSC and allow the company to answer questions, correct potential misconceptions, and prevent miscommunications. The company can also request an informal hearing with the Office of Compliance, especially if discussions otherwise reach an impasse.

While sometimes it is clear, many times the decision of how to respond requires the company to consider several factors, some of which can pull the company in different directions. Either way, the goal is two-fold: (1) confirm only safe, compliant products in the market, and (2) reduce business risks and liabilities.  By implementing best practices, NOV recipients can achieve both goals.

I Received a NOV: What Should I Do? 

In assessing a NOV and determining an appropriate response, companies should engage experienced counsel, understand and evaluate all risks, and take affirmative steps to implement best practices. Examples include:

• Respond Immediately and Professionally. Acknowledge receipt of the notice promptly, thank the CPSC for bringing the matter to your attention, and indicate that you are assessing the alleged issue. Timely, respectful communication sets a productive tone.
• Designate a Central Point of Contact. Assign a compliance officer or counsel to communicate with the CPSC on the NOV. This ensures consistency and timeliness, reduces the potential for misunderstandings, and conveys organizational discipline.
• Engage your Proactive and Reactive Compliance Plans. Strong compliance programs and practices should implement proactive and reactive compliance plans that include reviewing new products, auditing existing ones, maintaining relevant documentation, and step-by-step processes for addressing product safety issues. Engaging these plans will help you to assess actual and perceived safety risks and noncompliance.
• Share Relevant Compliance Documentation. Voluntarily provide the CPSC test reports, product specifications, and quality control records to substantiate safety commitments. This can demonstrate compliance, transparency, and good faith.
• Engage in Collaborative Problem‑Solving. Offer potential solutions or practical alternatives. Demonstrating that you take safety seriously can influence the CPSC’s perception of your company.
• Consider In‑Person or Virtual Meetings. Meeting with CPSC staff can humanize the company and the people working to solve the problem, clarify misunderstandings quickly, and help establish ongoing rapport.
• Assess Your Culture of Compliance. Take this as an opportunity to assess your current compliance practices, reinforce what works well, and strengthen any practices which may not have functioned as intended. Strong compliance programs and practices foster a culture of compliance, prioritize safety over sales, and incentivize internal reporting.

By engaging in these best practices, companies can demonstrate proactive, good faith engagement with the CPSC, build rapport, avoid misunderstandings, reinforce and strengthen existing compliance practices, and ultimately reduce business risks and liabilities by lowering the possibility of unsafe and noncompliant products entering the market and limiting potential future disruptions from NOVs.

For more information on how a NOV may affect your company and steps you can take to respond to and reduce the risk of receiving a NOV, please contact Foley & Lardner’s Consumer Product team.