Sunbeam Products Inc. has reached a $4.5 million settlement with the Consumer Product Safety Commission (CPSC) on a claim that the company hid from the agency a defect in Mr. Coffee appliances that let steam build up and possibly shoot hot water toward users. In a notice published in the Federal Register, the CPSC said it reached a preliminary settlement with Sunbeam, which does business as Jarden Consumer Solution, in which the household products maker agreed to pay the civil penalty for failing to report the defect in its Mr. Coffee Single Cup Brewing System.

The settlement is open to a 15-day comment period, after which it will officially take effect, and Sunbeam will then owe the $4.5 million. The CPSC said that between 2011 and 2012, Sunbeam sold roughly 520,000 Mr. Coffee appliances. The company was said to have received numerous complaints of the product’s opening and expelling hot water and coffee grounds on users, 32 of whom reported being burned. However, despite having information “reasonably supporting” the conclusion that the coffee makers contained a defect that created a substantial risk of harm, the agency says that Sunbeam did not immediately notify the commission as required, a violation of the Consumer Product Safety Act.

Instead of reporting to the CPSC, Sunbeam conducted its own investigation into the incidents. The company eventually determined the cause to be a buildup of steam inside the Mr. Coffee’s hot water tank, which itself was caused by brewing a second cup of coffee with an under-filled water tank immediately after brewing the first cup. After concluding its investigation, the CPSC says Sunbeam then filed a report with the commission. However, the report should have come sooner as the company was “presumed to have knowledge” of the defect much earlier. Aside from the $4.5 million civil penalty, Sunbeam is also required to maintain a compliance program designed to ensure the company follows the CPSC’s defect reporting rules in the future.

The compliance program includes updated written reporting standards at the company, implementing mechanism for confidential reporting by any Sunbeam employee, communicating its compliance policies to employees, and retaining any CPSC compliance-related records for at least five years.

Source: Law360.com

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