Fire Extinguisher Manufacturer Ordered to Pay $12 Million Penalty for Delay and Misrepresentations in Reporting Product Defects

A federal judge today ordered Walter Kidde Portable Equipment Inc. (Kidde) to pay a $12 million civil penalty in connection with allegations that the company failed to timely inform the Consumer Product Safety Commission (CPSC) about problems with fire extinguishers manufactured by the company, the Department of Justice announced.

Kidde, based in Mebane, N.C., agreed to the civil penalty and other terms as part of a consent decree entered by U.S. District Judge Loretta C. Biggs of the Middle District of North Carolina. The consent decree resolves allegations in a complaint filed by the United States against Kidde on December 30.

The complaint concerned Kidde fire extinguishers with plastic handles that were the subject of a recall announced by the CPSC and Kidde in 2017. According to the recall announcement, the fire extinguishers could fail to discharge during a fire emergency, and their nozzles could detach. A subset of the recalled fire extinguishers was the subject of an earlier recall in February 2015. The complaint alleged that Kidde violated the Consumer Product Safety Act by significantly underreporting prior to the first recall the scope and nature of the defect and risk, and the number of products and models affected. According to the complaint, Kidde also failed to immediately report to the CPSC information concerning nozzles detaching from fire extinguishers. The complaint further alleged that Kidde made misrepresentations to the CPSC and misused a registered safety certification mark.

“Companies must immediately report to the CPSC information about unreasonable risks and defects that create substantial hazards,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “The Department of Justice will continue to take appropriate enforcement actions against companies that jeopardize consumer safety by failing to comply with reporting requirements.”

“I want to convey my thanks to CPSC staff and to our partners at the Department of Justice for finalizing this consent decree without the need for extended litigation,” said CPSC Acting Chairman Robert S. Adler.

The court’s order requires Kidde to maintain a compliance program to ensure that the company complies with the Consumer Product Safety Act and to maintain internal controls and procedures designed to ensure timely, complete, and accurate reporting to the CPSC as required by law. Kidde is subject to liquidated damages if the company is not in compliance with the consent decree. In agreeing to the consent decree, Kidde did not admit that it violated the law.                                                  

The government is represented by Trial Attorneys Claude Scott and Daniel Zytnick of the Department of Justice Civil Division’s Consumer Protection Branch, with the assistance of Patricia Vieira of the CPSC’s Office of the General Counsel.

For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.

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    GAO identified advantages of, challenges related to, and options for improving the Internal Revenue Service's (IRS) current organizational structure, based on GAO's review of prior work and interviews with IRS officials and stakeholders. For example, one advantage of the current structure, according to several interviewees, is that IRS's divisions have developed specialized expertise on different types of taxpayers with similar needs, such as small businesses. Several interviewees also believed that addressing some of IRS's challenges may not require significant changes to IRS's organizational structure. GAO and others have identified challenges and options to improve IRS's structure, processes, and operations in the following areas: (1) customer service; (2) communication and coordination within IRS; (3) technology; and (4) strategic human capital management and training. While developing its reorganization plan required by the Taxpayer First Act, IRS addressed or partially addressed all six of the key practices for agency reforms that GAO reviewed (see table below). GAO Assessment of IRS's Reorganization Planning Process against Key Reform Practices Key reform practice Extent addressed Establishing goals and outcomes ◑ Involving employees and key stakeholders ● Using data and evidence ● Addressing fragmentation, overlap, and duplication ◑ Addressing high-risk areas and long-standing management challenges ◑ Leadership focus and attention ● Legend: ● Generally addressed ◑ Partially addressed ○ Not addressed Source: GAO analysis of Internal Revenue Service (IRS) information. | GAO-21-18 IRS established a senior-level team—the Taxpayer First Act Office—to lead the reorganization planning, involved employees and key stakeholders, and used multiple sources of data and evidence to inform its planning. Although IRS has developed preliminary goals for the plan, it has not yet finalized and communicated the goals and performance measures for the plan. IRS has also researched potential actions it could take to address long-standing management challenges at IRS, such as those related to areas of fragmentation, overlap, duplication, and high risk that GAO has identified. However, IRS has not yet decided on specific actions to address those areas in its plan. IRS officials told us that they intend to take these additional steps, but COVID-19 delayed the completion of their reorganization plan to December 2020. As a result, it is still unclear whether the reorganization plan will have outcome-oriented goals and performance measures or whether it will identify specific actions to address long-standing management challenges. Taking these steps could help IRS identify and achieve the intended outcomes of the reorganization plan, and identify reforms that can create long-term gains in efficiency and effectiveness. The Taxpayer First Act required that a comprehensive written plan to redesign IRS be submitted to Congress by September 30, 2020. Reforming and reorganizing a federal agency as large and complex as IRS is not an easy task. However, a potential reorganization could provide IRS with an opportunity to address emerging and long-standing challenges. GAO was asked to review IRS's organizational structure and IRS's plans to reform it. This report examines (1) reported advantages of, challenges related to, and options for potentially improving IRS's organizational structure; and (2) the extent to which IRS's reorganization planning process is consistent with selected leading practices. GAO reviewed documents from IRS and other sources; interviewed IRS officials and stakeholders, including three former IRS commissioners; and assessed IRS's reorganization planning process against selected key practices for agency reform efforts developed by GAO. GAO is making three recommendations to IRS as it finalizes its reorganization plan, including that IRS should finalize goals and performance measures, and identify specific actions to address long-standing management challenges. IRS responded that it plans to implement GAO's recommendations when it submits its final reorganization plan to Congress in December 2020. For more information, contact James R. McTigue, Jr. at (202) 512-9110 or mctiguej@gao.gov.
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    In Crime News
    Former supervisory corrections officer Mark Bryant, 42, was sentenced today to 5 years in prison for repeatedly tasing a restrained pretrial detainee inside the Cheatham County Jail in Tennessee. In January 2020, a jury in the Middle District of Tennessee convicted Bryant of two counts of violating Title 18, U.S. Code, Section 242, for using excessive force while acting under color of law. 
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