U.S. Sues Michaels for Failure to Report Product Safety Hazards, Identify as Importer

The U.S. government recently filed a lawsuit against Michaels Stores for the company’s late reporting of a consumer product safety hazard and failure to disclose that it was the importer of the unsafe product, said the Consumer Product Safety Commission in a press release issued April 22 (here). According to the complaint filed in Northern Texas U.S. District Court, Michaels knew glass vases it imported and sold in its stores were so thin that they would easily break and cut the hands of the person holding the vase, but failed to report the hazard to CPSC for over a year. When the company finally did report the problem, it said it was not the importer even though it was importer of record of the vases, allowing it to avoid legal and financial responsibility for the resulting recall, said the complaint.

According to the complaint, Michaels imported between 2006 and 2010 over 200,000 20-inch glass vases made in China by Zibo Oceanfar International Trade Co., Ltd. and Chinawel Qingdao Co., Ltd. Although the vases were procured by The Gerson Company, Michaels served as importer of record for the shipments, said the complaint.

Between 2007 and 2009, Michaels received several reports that the vases easily broke and lacerated the hands of people holding the vase, in many cases requiring surgery and causing permanent nerve damage, said the complaint. Parts of the vases were “comparable in thickness to a light bulb,” and in several instances the vases broke while being handled in Michaels stores.

However, Michaels did not report the problem with its vases to CPSC until 2010, well over a year since it should have known the vases presented a hazard, said the complaint. “We believe that Michaels chose to profit from selling defective vases that put people at risk, instead of following the law and immediately reporting that their vases were shattering and causing great harm to consumers,” said CPSC Chairman Elliot Kaye in the agency’s press release. “To protect the public, companies are required to report potential product hazards and risks to CPSC on a timely basis. That means within 24 hours, not more than a year as in Michaels’ case.”

When it did report the problem, Michaels identified itself as only a retailer, misidentifying The Gerson Company as the importer of the vases, said the complaint. By saying it was the retailer, Michaels avoided “legal responsibility for the recall of the vases as well as any obligation to pay costs and expenses associated with a recall,” according to the CPSC press release. Michaels also filed the streamlined report required of retailers rather than the full report that importers and manufacturers of hazardous products must file with CPSC, said the complaint. As such, Michaels failed to fully report the product hazard from its glass vases until it disclosed that it was the importer in 2012, said the complaint.

The government’s lawsuit against Michaels asks the court to impose civil penalties against the company for failing to report the hazard and making a misrepresentation to CPSC. The government is also asking the court to require Michaels institute a compliance program to make sure it doesn’t continue violating consumer product safety reporting requirements.

Email ITTNews@warren-news.com for a copy of the complaint.