Under federal law, manufacturers, distributors, and retailers are required to immediately report information regarding possible safety defects to the Consumer Product Safety Commission within 24 hours of obtaining reasonable supporting evidence. Keurig allegedly didn’t follow that rule when it came to the Dec. 2014 recall of 7 million MINI Plus Brewing Systems, and now the company must pay $5.8 million. 

The CPSC announced Tuesday that Keurig Green Mountain agreed to pay the $5.8 million civil penalty — the second largest in agency history — to resolve charges the company failed to report a defect and unreasonable risk of injury to the agency immediately upon learning of the possible issue.

For those who don’t remember, in Dec. 2014 Keurig recalled 7 million MINI Plus Brewing Systems after finding that water in the machine could overheat during brewing, spray out, and burn consumers.

At the time, Keurig said it had received more than 200 reports of the spraying hot water. Of those reports, about 90 included consumers who suffered burn-related injuries to their hands, faces, and bodies. In some cases, the incidents resulted in second- and third-degree burns.

The CPSC said on Tuesday that an investigation into the handling of the recall found that Keurig had received the 200 injury and defect reports over a period of four years starting in 2010.

“The investigation revealed that Keurig had accumulated significant information over a four‐year period that resulted in several missed opportunities to report, including receipt of detailed incident and injury data, insurance claim payments made to injured consumers, and notice of at least two requests by a retailer for Keurig to undertake a product safety investigation,” CPSC commissioners Robert Adler, Elliot Kaye, and Marietta Robinson wrote in a joint statement.

Despite these opportunities, Keurig didn’t notify the CPSC of the issue until Nov. 25, 2014, and even then continued to import the machines until Dec. 2.

Additionally, the CPSC found that by not recalling the products in a timely manner, Keurig “reaped hundreds of millions of dollars in sales of these dangerous products,” and that “it is safe to say Keurig gained substantially from its failure to report.”

To make matters worse, the CPSC says that by selling the machine between the time the company notified regulators of the defect in Nov. 2014 and the actual recall in December, Keurig was able to take advantage of Black Friday sales, further padding its bottom line.

“By continuing to sell the Brewers after committing to participate in a voluntary recall, Keurig completely disregarded what we have always understood to be a cardinal rule of the Commission’s Fast‐Track recall program: all firms electing to participate in the program must immediately stop sale and distribution of the product,” the commissioners say.

For these reasons, the three commissioners, who voted to approve the settlement, say they believe the $5.8 million penalty is not significant because it does “little to deprive this multi‐billion dollar firm of its economic gain from noncompliance.”

In addition to paying the $5.8 million penalty, Keurig also agreed to develop, implement, and maintain a compliance program that will comply with the Consumer Product Safety Act.

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