Graco Slammed with $10 Million Fine for Defective Child Car Seats

 
Category: 
Product Liability

By Larry Bodine, Editor in Chief, PersonalInjury.com

 

Graco will pay $3 million to the U.S. Treasury and $7 million for new steps to improve child safety after failing to launch a prompt recall of defective seats.

Graco Children’s Products has been slammed with a $10 million fine after it failed to provide timely notification of a defect in more than 4 million car seats with a defective buckle that could make it difficult to free a child in an emergency. Some parents told federal regulators that they had to cut straps to free a child.

Under the consent order with the U.S. Department of Transportation, Graco admittded that it did not provide the required defect notice. Under pressure from NHTSA, Graco, recalled more than 4 million convertible and booster seats with defective buckles in February 2014, and nearly an additional 2 million rear facing infant seats in June. NHTSA launched an investigation into the promptness of Graco’s decision making and reporting of a defect in those recalls in December.

Ignoring complaints since 2009

That investigation was prompted by a review of Graco documents that showed that parents complained to Graco about the buckles in 2009, according to the New York Times. Graco had insisted that the only problem with the buckles was caused by children spilling food or drinks on them. In 2012, however, the company was still telling parents how to clean the buckles, arguing that there was no safety issue.

Founded in 2001, Graco Children's Products Inc. is a large-sized household furniture manufacturer in Atlanta, Georgia. It has 1,420 full time employees and generates an estimated $84.4 million in annual revenue. The car seats sell from $80 to $300 online from Target, Toys R Us and Walmart. Consumer reports rates several Graco child car seats from 54 to 67, with 100 being a top rating.

According to SeatCheck.org, in 2004, there were 495 passenger vehicle occupant fatalities among children under 5 years of age. Of those 495 fatalities, an estimated 173 (35 %) were totally unrestrained.

Leading cause of death

According to the Centers for Disease Control and Prevention (CDC), motor vehicle collisions are the leading cause of death for children. In 2014 alone, the National Highway Traffic Safety Administration (NHTSA) had 7.4 million car seats recalled as a result of a defective buckle on the car seats.

According to the Pennsylvania law firm Metzger Wickersham, many parents are not properly notified when a car seat has a defect. As a result, they are unable to get the essential repairs made. When a car seat defect leads to a recall, statistics show that only around 40 percent of people actually get the necessary repairs. To help ensure parents are properly alerted to a car seat problem, the NHTSA has been promoting an initiative called “Don’t Delay – Register Your Car Seat Today.”

Registering on the NHTSA’s new website, Parent Central will make it possible to receive proper notification so you can get repairs if there is a problem with your child’s car seat. Parents can also use other NHTSA tools such as the Car Seat Finder to identify the right car seat for their kids. To use this tool, simply input a child’s date of birth, age and weight.

Largest recall ever

Graco must pay a fine of $3 million immediately to the federal government plus an additional $7 million is due in five years unless they spend at least the same amount on new steps to improve child safety.

The penalties close an investigation launched last year by the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) into whether the company failed its obligations, under the National Traffic and Motor Vehicle Safety Act, to begin what ended up as the largest ever recall of child seats. The seats had buckles that could stick or become stuck in a latched position, potentially placing child occupants at risk in an emergency.

“Parents need to know that the seats they trust to protect their children are safe, and that when there’s a problem, the manufacturer will meet its obligations to fix the defect quickly,” said U.S. Transportation Secretary Anthony Foxx. “Today’s action reinforces that responsibility in a way that will make our kids safer for decades to come.”

Only 40% are fixed

Graco will create a plan to address certain targeted performance requirements, which may include methods to increase effectiveness of consumer product registration of car seats, which allows parents to be notified of defects, identifying potential safety trends affecting car seats industry wide and launching a child safety awareness campaign. According to NHTSA, on average, only 40 percent of people who have recalled car seats get them fixed. That’s in comparison to an average of 75 percent of people who have recalled light vehicles, for which registration is required by law.

Graco also must provide certification from an independent, third-party that it has met its cost obligations; if Graco fails to meet those obligations, it must pay the balance of the $10 million civil penalty.

The National Traffic and Motor Vehicle Safety Act states that once a manufacturer knows or should reasonably know that an item of motor vehicle equipment, such as a car seat, contains a safety related defect, the manufacturer has a maximum of five business days to notify the agency. Once it notifies NHTSA of a defect, it is required to launch a recall.

With this consent order, Graco is required to pay a $3 million civil penalty, and to commit at least $7 million to meet targeted performance obligations, over the next five years. Those obligations may include:

  • Improving its assessment and identification of potential safety defects.
  • Creating a scientifically tested program to increase effectiveness of child seat registration programs.
  • Revising its procedures for addressing consumer safety complaints and speed the recall of defective products.
  • Launching a campaign to disseminate safety messages to parents and caregivers by producing media products to incorporate in child safety campaigns.

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