The U.S. Consumer Product Safety Commission (“CPSC”) announced that One World Technologies Inc. (“One World”), of Anderson, S.C., has agreed to pay a $4.3 million civil penalty to settle charges that the firm knowingly failed to immediately report to CPSC defects and an unreasonable risk of serious injury involving 11 models of minibikes and go-carts it manufactured and sold in the U.S.
CPSC staff charged that the gas cap can leak or detach from the fuel tank on the recalled minibikes and go-carts, posing fire and burn hazards. In addition, staff charged that the throttle can stick due to an improperly positioned fuel line and throttle cable, posing a sudden acceleration hazard.
The vehicles were sold nationwide from November 2004 through June 2010 for $200 to $2,000. In July 2010, CPSC announced the recall of 308,000 minibikes and go-carts.
One World and its affiliate, Baja, Inc., did not file their mandatory Full Report with CPSC until June 2010. CPSC staff charged that by that time, Baja had received four reports of fires from leaking gas caps and burn injuries to consumers, including a serious burn injury to a child. Baja and One World had also received two dozen consumer reports of stuck throttles. They implemented design changes to remedy the throttle hazard, but had not notified consumers or CPSC of these changes. The failure to notify violated federal law, which requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.
In addition to agreeing to pay a $4.3 million civil penalty, Baja and One World have agreed to maintain a program designed to ensure compliance with the safety statutes and regulations enforced by the Commission and that includes:
- written standards and policies;
- systematic procedures for reviewing and referring consumer and retailer incident reports for potential safety issues;
- confidential employee reporting of compliance concerns to a senior manager;
- effective communication of compliance policies and procedures, including training;
- senior manager responsibility for compliance and accountability for violations;
- oversight of compliance by the firm’s governing body; and
- records retention requirements.
The CPSC investigation that led to the settlement of this matter was initiated by the Office of Compliance and Field Operations, and the Office of the General Counsel has been handling the enforcement action.