Overview

Do you know? In 2019, 20M+ pounds of food products were recalled in the United States. Last year, more than three million newborn loungers were recalled following infant deaths and suffocation cases.

Recall of products is the return, exchange, or replacement of a product after a manufacturer or consumer discovers flaws that could impair the performance, hurt consumers, or cause legal problems for the manufacturers. As per the studies, consumer product-related deaths, injuries, and property damage cost the United States more than $1 trillion each year. Government agencies like the Consumer Product Safety Commission (CPSC), the Food and Drug Administration (FDA), and the National Highway Traffic Safety Administration (NHTSA) are responsible for testing and monitoring different categories of products before they hit the market. Product recalls may extend from food products, cosmetics, toys, home appliances, medical devices, auto spares, etc.

Product Recall Procedure

A regulatory agency, such as the Consumer Product Safety Commission (CPSC) in the United States controls product recall either voluntarily or involuntarily. It was established in 1972 to protect the public from unjustifiable risks of severe injury or death from thousands of different types of consumer products that fall within its authority. Any product that involves fire, electrical, chemical, or mechanical hazards and products that can be dangerous to children is covered by the CPSC.

The CPSC researches to identify potential product hazards and takes necessary steps if a defect is identified. The consumers would be educated about the product defect, thereby mediating the replacement or refund for recalled products. In 1988, the CPSC involved 221 recalls affecting approximately 8 million product units. Now the numbers have increased massively, recalling thousands of products every year.

Recall of products and the procedure varies as per the type and category of the product, the defects, the harm it has caused to the consumers, etc. The recall of a medical device and a food product may differ in terms of the procedure and the authority that regulates the product’s recall. The stages involved in the recall of products can vary according to the local legislation.

The CPSC operates a consumer hotline where people can report dangerous products. Recall of products may be carried out either voluntarily by the manufacturer or mandatorily by the CPSC. Mandatory recalls occur when the product manufacturer or distributor does not come forward to take decisive action associated with their faulty/defective product. The recall, in either case, will be notified, including instructions to the consumers on how to use the device and a warning about the risks involved.

At www.SaferProducts.gov, the general public or entities can submit reports of the injuries or harm connected with the usage of any product. During a recall, distributors, retailers, and known customers of the defective products are notified. The portal also acts as an information database, providing access to everyone about the status and details of the product recalls handled by the CPSC.

Latest Product Recall Examples

The below-mentioned are some of the recent product recall examples and case studies in the U.S.

In June 2022, the West Columbia-based Nephron Sterile Compounding Center LLC voluntarily recalled 2.1 million doses of medicine and medical equipment due to the “Lack of Assurance of Sterility.” As per the FDA enforcement report, the following are some of the products recalled by Nephron.

  • 4% sodium bicarbonate injection
  • Glycopyrrolate injection
  • Hydromorphone HCL injection
  • Calcium gluconate injection
  • Epinephrine injection
  • Labetalol HCL injection
  • Lidocaine HCL injection
  • Ketamine hydrochloride injection
  • Rocuronium bromide injection
  • Oxytocin 30 units/500 ml
  • Phenylephrine HCL injection
  • Succinylcholine chloride injection

On March 7, 2022, Tennessee Technical Coatings Corp. issued a voluntary consumer/user recall for all batches of HAND SANITIZER Isopropyl Alcohol Antiseptic 75 percent. The recall was done after Methanol was discovered in the product during an FDA investigation. High methanol exposure can cause nausea, headaches, blurred vision, coma, seizures, irreversible blindness, central nervous system damage, or death. The U.S. Food and Drug Administration had instructed to report any adverse reactions or quality problems associated with using this product to the MedWatch Adverse Event Reporting program.

On February 16, 2022, TCP HOT Acquisition LLC dba HRB Brands, based in Westport, Connecticut, voluntarily recalled all lot numbers of the Sure and Brut Aerosol Sprays expiring on or before August 2023, owing to the presence of benzene.

Nestlé Prepared Foods recalled pepperoni Hot Pockets in 2021, followed by the reports of consumers finding pieces of glass and hard plastic inside the product.

In 2016, 2.5 million Galaxy Note 7 smartphones were recalled after consumers’ complaints about the bursting of the phone into flames. The Consumer Product Safety Commission received 96 reports of overheating batteries and fires in the first two months after the product launch.

Any product recall story would not be complete without mentioning the biggest recall ever in the history of the U.S. More than 67 million vehicles equipped with defective Takata airbag inflators had been recalled in the U.S over the last decade. The defective airbags were reported to burst, flinging metal shards at drivers and passengers, causing more than 500 injuries and 16 deaths in the United States. According to regulators, the recall and repair of every vehicle with a dangerous Takata airbag might take until 2023.

Advantages and Disadvantages of Product Recall

The benefits of product recalls are geared toward the general public or consumers who utilize the products, and the downsides are geared toward the product maker or distributor.

Recall of products educate the consumers about the following

  • Nature of the product defect
  • Potential harms
  • Status of the recall

It helps in conducting further research on the product’s defect, monitoring the harm it can impose on the consumers. It helps to address the issues faced by the consumers and prevents the product from being used by more people.

Recall of products imposes massive financial losses to the manufacturers, affecting the brand reputation and loyalty of the consumers. The manufacturer and all the parties involved may have to bear the financial losses associated with product liability claims and compensation. The product recall is thought to have the potential to harm the brand in the long run, lower profitability, and affect the company’s reputation and goodwill with its consumers. For example, Toyota’s string of gas pedal recalls costing the company $2 billion in repair costs and loss of revenue. As a result of the financial crisis, the company’s stock prices decreased by almost 30%.

On the other hand, it cannot be disregarded that voluntary product recalls contribute to a positive corporate image and demonstrate the brand’s transparency. It may also create a positive impact in the consumers’ minds, prompting them to uphold a connection with the brand.

Product Recall Insurance

Product recall insurance is a type of insurance coverage like product liability insurance that covers the costs of recalling a product after it has been released to the public. While product liability insurance covers the expenses connected to lawsuits or settlements associated with the recall of products, product recall insurance covers the recall costs. The policy covers the product manufacturers and other parties involved in the manufacturing and distributing food, beverage, toy, electronic appliances, etc. Obtaining product recall insurance would help the manufacturers avoid financial crises arising from product defects and recalls.

Product recall insurance would help the manufacturers address product recalls occurring due to contamination, mislabeling, product tampering, product extortion, government recalls, etc. It will assist the manufacturer in covering a variety of expenses, including:

  • Costs of advertising and promotion to publicize the recall.
  • Disposal costs of the defective/contaminated product.
  • Costs of shipping products that have been recalled.
  • Cost of the increased labor to deal with the recall.
  • Costs of product replacement, maintenance, and distribution
  • Expenses to address the wholesalers, distributors, and retailers.
  • Costs of business interruption.
  • Costs of reputation management.

For food, cosmetics, or pharmaceutical products, an additional insurance coverage called contamination insurance may be required to address the accidental or malicious contamination of the products.

Product Liability Lawsuits

A manufacturer or seller might be held accountable for placing a defective product in the hands of a customer through a product liability claim. The consumer who had sustained damages by using the product can claim product liability for design defects, manufacturing defects, or marketing defects depending upon the ground of the case. Liability lawsuits for defective products might be based on negligence, strict liability, or a breach of the warranty of fitness.

The liable defendants for product liability could be

  • The manufacturer of the product.
  • The manufacturer of the product parts or the party who does the installation.
  • The wholesaler.
  • The retailer.

Effect of Product Recalls on Product Liability Claims

Even though product liability claims and recall of products are linked to the same product, neither the product manufacturer nor the consumer is prevented from proving their case. To be more specific, recall of a product does not prevent an affected consumer from launching a product liability lawsuit against the responsible parties in the supply chain. Similarly, the consumer cannot use the manufacturer’s or regulatory body’s recall action as evidence to support the claimEven in the event of a product recall, the claimant must demonstrate the damages/injuries he has suffered from using the product with evidence like witness testimony and photographs of the defective product. Another aspect that favors claimants in product liability claims is that suing the defective product’s manufacturer does not preclude the consumer from suing other parties engaged in the product’s packaging, marketing, or distribution. They may also be held accountable for failing to notify the customer or claimant of the fault.

Whether voluntary or mandatory, a product recall does not make the manufacturer accountable or at fault in a product liability lawsuit. The intriguing aspect is that the product liability law does not protect a manufacturer from liability for damages caused by a product just because it was voluntarily recalled. The manufacturer cannot dismiss the plaintiff’s lawsuit by blaming a distributor or seller for failing to warn the customer directly.

Now you would have understood the snags you may encounter in a product liability claim. How to proceed with a lawsuit for the damages you have sustained by a defective product? The only answer is to find an expert product liability lawyer with proven track records in product liability claims. Product liability lawyers can help the claimants.

Final Thoughts 

While a recall may be helpful evidence in your product liability case, the claimant must still prove that the defective product caused his or her injuries. Consulting a product liability attorney is the best way to guarantee that your claim has the best chance of success. Even if the product that harmed you is recalled, you have all the right to proceed with a lawsuit. In the product liability lawsuit, proving the damages with solid proof can assist you in getting the best compensation possible.