LG Electronics Tianjin Appliance Co., Ltd., and LG Electronics USA Inc. design and manufacture millions of household products that people across the country purchase on a daily basis. One such product is a dehumidifier that many people use in their homes to make the air more comfortable and assist with some respiratory discomfort. They are used in living rooms where families gather, bedrooms where people rest their heads, and offices where people work.
As far back as 2003 people who purchased these dehumidifiers reported by the dozens that the product caught fire and damaged their homes. The dehumidifiers were not recalled until nine years later. At that point, the company was aware of over one hundred reports of their products destroying the personal property of their consumers, who trusted that they were purchasing a quality and safe product. To make matters worse, the company was aware of bodily injury to at least three of these people. In total LG manufactured and sold somewhere in the neighborhood of 795,000 of these dehumidifiers. The resulting damage to their customers’ personal property was more than $7 million.
On July 22, 2015, the United States Consumer Product Safety Commission (CPSC) announced that the maximum civil penalty would be handed down to the companies involved. In total the penalty came to $1,825,000. The CPSC found that the companies “knowingly failed to report a defect and an unreasonable risk of serious injury.” Federal law demands that companies report dangers or defects in their products immediately if it appears that there is a substantial product hazard presenting a risk of serious injury or death. In addition to paying the fine, LG is required to implement a compliance program that is designed to prevent any further violation of the Consumer Product Safety Act. The program is to include aspects such as confidential employee reporting, record retention, and broader oversight, among others.