Fisher-Price Recall Time Frame Under ScrutinyAug 8, 2007 | Parker Waichman LLP, LLP
Last week’s recall of lead-tainted Fisher-Price Toys has prompted the Consumer Product Safety Commission (CPSC) to investigate the toy maker’s handling of the incident. At issue is whether or not Fisher-Price informed the CPSC about the lead paint found on the toys as quickly as it should have.
According to an Associated Press report, a CPSC spokesperson confirmed that the commission was conducting an investigation into the timing of the Fisher-Price recall. However, the CPSC is not saying when it was first notified by Fisher-Price regarding the lead problem. Federal law requires that companies notify the CPSC within 24 hours of discovering a product defect.
Last week, Fisher-Price, a division of Mattel, said that it was recalling more than 1.5 million toys worldwide because they contained lead paint. Lead is highly toxic, especially to young children whose brains are still developing. Ingesting lead can cause behavioral problems, learning disabilities and other illnesses. The recall included toys based on popular characters from TV shows like Sesame Street, Spongebob SquarePants, and Dora the Explorer. A complete list of the recalled fisher price toys can be found at www.ToyInjuries.com. Consumers were told that they could return the toys for a voucher good for a replacement toy of equal value, which would be of no help to a child that was already exposed to the lead paint.
When the recall was announced, Mattel the parent company of Fisher-Price had said that a retailer had alerted it to the problem in early July. On July 6, the company stopped operations and launched an investigation at the Chinese plant where the Fisher-Price toys were made. Retailers were informed of the problem a full week before the recall was made public. Last week, Fisher Price had said that this was done with the knowledge of the CPSC in order to give stores time to remove the toys from their shelves. Fisher-Price never said when it had informed the CPSC of the toys’ defect.
Mattel usually gets high marks for quality in an industry that is often plagued with defective products. Mattel holds it subcontractors to strict guidelines regarding production, treatment of workers and workplace conditions. Despite that track record, this is not be the first time that Fisher-Price attracted scrutiny for the way it handled a toy recall. Just this past March, the company was fined $975,000 for not informing the CPSC within the proper time frame of a choking hazard posed by one of its Little People toys. And in 2001, it was fined more than $1 million for a similar incident involving its Power Wheel vehicles.
Whether the CPSC investigation will lead to another fine for Fisher-Price remains to be seen. What is clear is that the incident has already taken a big chunk out of Mattel’s bottom line. Last week, Mattel informed its investors that its second-quarter operating income will fall by more than $30 million. Prior to the recall, Mattel had said that second-quarter operating income would be around $63.5 million