Go-Kart Importer Agrees to Pay $4.3 Million to Settle CPSC Charges of Failure to Report Defects

An importer is set to pay $4.3 million to settle charges that it failed to immediately report product safety problems that resulted in injuries to consumers, said the Consumer Product Safety Commission on Oct. 29 (here). Baja and its affiliate One World Technologies allegedly failed to report to CPSC until 2010 problems with gas caps on its minibikes and go-karts that caused fires, as well an issue with sticking throttles, despite selling the purportedly defective products since 2004 and having received reports of injuries.

According to CPSC, Baja had already received four reports of injury caused by fires related to the defective gas caps. It had also received two dozen reports of stuck throttles. But the company waited to file its 15(b) report with CPSC, even though it had already settled some personal injury claims and contacted the manufacturer to fix the problems, said CPSC. As a result, consumers that had bought defective products were not informed until CPSC initiated a recall of 308,000 minibikes and go-karts one month after Baja filed its report.

On top of the $4.3 million penalty, Baja and One World have agreed to enter into a compliance program including written standards and policies, procedures for reviewing incident reports, confidential employee reporting of compliance concerns to managers, training, manager accountability, oversight and recordkeeping. The companies did not admit guilt as part of the settlement, according to a proposed agreement published in the Federal Register (here). CPSC voted 4-1 on Oct. 27 to provisionally accept the settlement. Comments on the settlement are due Nov. 14.