“Adequate andReasonable” ProductRecalls

by Kenneth Ross

Most manufacturers, at some point, will have to undertake a post-sale reme-dial program in connection with one of its products. The program could in-clude a consumer warning, recall, retrofit, or safety upgrade. Such a programmay be instituted as a result of a series of accidents or consumer complaints,lawsuits, an adverse jury verdict, a safety improvement, a change in standards,or a request or order of a governmental entity in the United States or abroad.

© 2003 DRI. All rights reserved.

October 2003 19

Any manufacturer selling in the UnitedStates needs to assume it has at minimuma post-sale duty to warn, since significantlymore than half of the states have adoptedsome version of this duty, either throughthe courts or the legislatures. On the regu-latory side, U.S. governmental agencies haverevised their regulations to require reportingof more safety issues. Governments in theEuropean Union will be required next yearto issue new regulations increasing a man-ufacturer’s responsibility to withdraw itsproducts from the marketplace. In addition,the U.S. Consumer Product Safety Com-mission has recently sponsored meetingsand studies on recall effectiveness to try tohelp manufacturers develop better ways torecall their products.

If the manufacturer’s product was defec-tive at the time of sale, the common law pro-vides generally that a highly effective recallwill not cut off liability for the manufacturer.A post-sale duty to warn is a separate causeof action, based on negligence. So, while amanufacturer may successfully defend thiscause of action, the existence of the recall orother remedial program may be consideredan admission that the product is defective.And, as long as the product injured some-one, the manufacturer could still be held li-able for selling a defective product.

All of this makes it important for manu-facturers to be prepared to institute a post-sale remedial program quickly, and that theprogram be as effective as it can under thecircumstances. This effectiveness will re-duce the number of products in the fieldthat could harm people, and will hopefullyallow the jury and any affected governmentagency to conclude that the manufacturer’s

conduct was reasonable. And, even if themanufacturer is held liable under strict li-ability or negligence for selling a defectiveproduct, its actions and due diligence shouldbe helpful in defending against a claim ofpunitive damages.

This article will describe various guide-lines, regulations, and best practices for imple-menting a post-sale remedial program andwill discuss how to defend the adequacy ofa post-sale program. This article will notdiscuss when a manufacturer should or islegally required to report a post-sale prob-lem to the government or how to set up aproduct safety management program, in-cluding a post-sale planning protocol. I havealready discussed these issues in “Estab-lishing an Effective Product Safety Manage-ment Program,” in the January 2003 issue ofFor The Defense, and “The Increased Dutyto Take Post-Sale Remedial Action,” in theApril 2002 issue.

Common Law and the RestatementThe common law basis for post-sale duty towarn is negligence. So, using Judge LearnedHand’s formula for negligence, the basis fordetermining whether this duty has been metis the reasonableness of the manufacturer’sconduct after balancing the risk of harmagainst the burden on the manufacturer toreduce the harm. The higher the risk, themore the manufacturer needs to do to mini-mize the risk to consumers and other prod-uct users.

However, as with all questions of reason-ableness under negligence, the common lawprovides no further basis for a manufac-turer to understand how effective its reme-dial program must be in order for it to beconsidered non-negligent.

The 1997 Restatement (Third) of Torts:Products Liability has three sections that arepertinent to this examination. They discussthe post-sale duty to warn, the duty to recalla product, and the effect of compliance ornon-compliance with product safety statutes

or regulations. (For a comprehensive dis-cussion of the common law in all 50 statesand of U.S. and foreign regulatory law onthis subject, see Post-Sale Duty to Warn, amonograph published in September 2003by the American Bar Association’s Sectionof Litigation.)

Section 10 establishes four criteria to con-sider when deciding whether a manufacturerhas a post-sale duty to warn. Failure to issuesuch a warning would be unreasonable anda basis for liability. The criteria are similarto the Learned Hand formula—the higherthe risk, the more responsibility to warn,unless the burden is too high. This sectionprovides nothing more than a reasonable-ness test for determining if the duty hasbeen met. And the trier of fact, of course,decides this issue.

Section 11 of the Restatement states thatthere is no common law duty to recall a prod-uct. However, it also says that if there is a man-datory or voluntary recall and a manufacturerfails to act reasonably, it can be held liable.Again, there are no further criteria to pro-vide guidance on what is reasonable. Also,the Reporter’s Notes to comment d of this sec-tion says that there is “a paucity of authoritydiscussing the legal effect of the efforts of amanufacturer to recall its products whensuch efforts are not successful in avoiding in-jury due to the fact that either dealers or pur-chasers do not take advantage of the recall.”

However, the few cases cited in Section 11and other relevant cases basically show thatthe plaintiff can always argue that the manu-facturer should have done more. The recallletter or other notice could have been sentout earlier and could have contained moreexplicit language. Or, it could have been sentcertified mail or sent out more than once.Or, the advertisement could have been onpage 2 instead of page 40 of the magazine.

The ability of the plaintiff to argue thatmore could have been done will be bound-less. And, plaintiffs may not even need an ex-pert to support this theory. In such cases, thedefendant will need to prove that the con-duct by the manufacturer was “state of theart,” complied with all applicable govern-mental statutes and regulations, and was ascomprehensive as necessary considering thelevel of risk.

Kenneth Ross is Of Counsel to Bowman and Brooke LLP in Minneapolis.For 27 years, he has helped manufacturers and product sellers set upsafety and liability prevention programs and recall their products.

20 For The Defense

If there is a mandatory

or voluntary recall and

a manufacturer fails to

act reasonably, it can

be held liable.

That leads to the third relevant section ofthe Restatement. Section 4 clearly says thatcompliance with applicable governmentalregulations or statutes is a minimum re-quirement. The Reporter’s Notes to Section 4cite Section 288C of the Second Restatement,which says, “Compliance with a legislativeenactment or an administrative regulationdoes not prevent a finding of negligencewhere a reasonable man would take addi-tional precautions.”

Based on this law, it is apparent that amanufacturer may not be able to successfullydefend itself by claiming that a governmentagency “approved” its post-sale program.However, while this “approval” by a govern-ment agency may not get into evidence di-rectly, it should be able to be used by anexpert witness who can cite it as one of thebases for opining that the manufacturer’sconduct was reasonable and the post-saleprogram adequate.

Given the paucity of judicial authority de-scribing an adequate post-sale remedial pro-gram, it is necessary to consider United Statesand foreign regulatory law, guidelines andregulations as well as suggestions providedby those in the recall industry to help estab-lish an outline of an “adequate” program.

Consumer ProductSafety CommissionMany U.S. regulatory agencies provide help-ful guidelines to manufacturers on how toundertake a recall and how to make it moreeffective. One of the most useful documentsis the CPSC Recall Handbook. See http://

www.cpsc.gov/businfo/8002.html.The CPSC handbook states that the core

element of a recall is as follows:A company that undertakes a recall shoulddevelop a comprehensive plan that reachesthroughout the entire distribution chainto consumers who have the product. Thecompany must design each communica-tion to motivate people to respond to therecall and take the action requested bythe company.

The handbook goes on to say that the ob-jective of any recall is:

• to locate all defective products as quicklyas possible;

• to remove defective products from the

distribution chain and from the pos-session of consumers; and

• to communicate accurate and under-standable information in a timely man-ner to the public about the product defect,the hazard, and the corrective action.

A large part of the handbook discussesthe many ways in which the manufactureror other entities in the chain of productionor distribution can communicate with con-sumers. However, it leaves it up to the party

doing the recall to determine what is appro-priate. The CPSC says that in determiningwhat forms of notice to use, the paramountconsideration should be the level of hazardthat the recalled product presents.

The CPSC will classify the hazard as A,B, or C. Class A is defined as a risk of deathor grievous injury or illness that is likely orvery likely, or serious injury or illness is verylikely. This hazard requires the recalling en-tity to “take immediate, comprehensive, andimaginative corrective action measures toidentify and notify consumers, retailers anddistributors…”

The CPSC also provides a recall checklistthat is helpful for manufacturers and retail-ers in implementing a consumer productrecall. This checklist can be found at http://

www.cpsc.gov/businfo/recallcheck.pdf.Nowhere does the CPSC say how effec-

tive the recall must be to be considered suc-cessful. Recalls or retrofit programs with aneffective rate of less than 10 percent havebeen deemed acceptable by the CPSC. And,the CPSC has said that the average responserate for most recalls is between four percentand 18 percent.

Because of concern that effectiveness ratesare too low and can be improved, the CPSChas instituted a recall effectiveness project thatincludes public meetings to discuss success-

ful techniques for recalls, a literature searchand evaluation of consumers’ behavior as itrelates to recalls, and an evaluation of theCPSC recall database to assess the effective-ness of previous recalls. This was promptedin part by the urging of consumer advo-cates and some in Congress.

Several meetings discussing recall effective-ness have taken place. The first meeting tookplace on May 15, 2003; the subject was “Moti-vating Consumers to Respond to Recalls.” (Seehttp://www.cpsc.gov/businfo/rem_sum1.pdf fora summary of this meeting). Eighteen socialmarketing and public relations experts dis-cussed the following four questions: How canwe motivate consumers to act? Which cam-paigns/programs have motivated consumersto act? Which specific ideas from these pro-grams could increase consumers’ response toproduct safety recalls? How do we measurewhether we have motivated consumers?

The experts at the May 15 meeting iden-tified creative techniques that are not partof the standard recall procedures that havebeen used for years. While most of thesetechniques would not be considered “stateof the art” today, they may in the future.Therefore, manufacturers should considersuch suggestions and test some of them ina future remedial program.

A second meeting took place on July 25,2003. It focused on “tools” that manufacturers,retailers, and others who distribute safety in-formation use to notify consumers of recalls.Panelists included retailers, manufacturers,credit card companies, and various publicinterest entities. A third meeting took placeon September 9; the attendees discussednew methods to be considered to provide amore complete account of recalled products.

In another significant effort in this area,on August 5 the CPSC released a new studythat organized and summarized the litera-ture found on recall effectiveness and ef-fective safety communications, includingwarnings. For a copy of the full report, go tohttp://www.cpsc.gov/LIBRARY/FOIA/FOIA03/os/

RecallEffectiveness.pdf.In addition, the authors reviewed empiri-

cal data developed by the CPSC and otherson recall effectiveness. This report also con-tains information on the effectiveness ofNHTSA and FDA recalls. It should be re-

October 2003 21

viewed by manufacturers of any productsince it identifies studies that have analyzedhow to motivate consumers on safety mat-ters. The report concluded by saying:

The research collected and reviewed forthis project details the large number ofsteps required for a recall message toachieve an active response from an af-fected product user. Users must receivethe message, internalize and comprehendits instructions, determine that a responseis necessary, and be willing to performthat response even if there are costs asso-ciated with doing so. In the case of prod-uct recalls, they must follow through onthat willingness to check if they have anaffected product, then take additional ac-tions to eliminate or reduce the hazard.

…We believe that the materials identi-

fied and reviewed for this report providea more than adequate foundation for anassessment of ways in which recall pro-grams—and particularly recall com-munications—might be modified toimprove potential response rates.The August 5 report and research sum-

marized therein will also be useful to cite indefending the adequacy of a recall since itconfirms how difficult it is to motivate con-sumers to respond to what would clearly bean adequate notice.

The report also pointed out that the CPSClast evaluated recall effectiveness rates fromits database in the early 1980s. The CPSCstaff said in February of this year that it wouldbe undertaking such an evaluation of recenteffectiveness data, including indications ofwhich techniques have worked in the pastto increase effectiveness.

The result of all of this activity is that theCPSC will most likely eventually come out withupdated and improved regulations and guide-lines on how to undertake a recall. Hopefully,these new requirements and suggestions willhelp improve recall effectiveness rates and, ifthey comply, will help manufacturers presentevidence that they were reasonable and didthe best they could under the circumstances.

Food and Drug AdministrationThe FDA has jurisdiction over most foodsand all cosmetics, drugs, and medical de-

vices. The FDA, like the CPSC, will classifythe level of hazard when it receives a report;the hazard levels are I, II, and III. Class I recallsare the highest level and are for dangerousor defective products that predictably couldcause serious health problems or death.

After classifying the hazard, the FDA,unlike the CPSC, develops a strategy for eachindividual recall that sets forth how exten-sively it will check on a company’s perfor-mance in recalling the product in question.For a Class I recall, for example, FDA wouldcheck to make sure that 100 percent of thedefective products have been recalled or re-conditioned. Effectiveness rates for Class IIor III would be much less.

The regulations describing recall strat-egy and recall communications are set forthin 21 C.F.R. Subpart C, §7.42 et seq. Theseregulations make clear that the recalling en-tity must conduct the recall in accordancewith an approved strategy. The strategy willneed to address the depth of the recall (towhom the communications are directed),whether the public as well as health care pro-fessionals are alerted, and which effective-ness checks will be used. The regulationsidentify five effectiveness levels—Levels Athru E, with A requiring 100 percent effec-tiveness and B through E much less.

The regulations describe the types of re-call communications that should be consid-ered by the recalling entity. 21 C.F.R. SubpartC, §7.49. These communication techniquesare similar to those described in the CPSCRecall Handbook. They also provide that arecall will be terminated when the FDA “de-termines that all reasonable efforts have beenmade to remove or correct the product inaccordance with the recall strategy…” 21C.F.R. Subpart C, §7.55.

The FDA’s recall procedures are set forth inChapter 7 of its Regulatory Procedures Man-ual (http://www.fda.gov/ora/compliance_ref/

rpm_new2/ch7.html). This manual describesthe recall strategy that FDA develops witheach manufacturer as follows:

Each circumstance necessitating a recallis unique and requires its own recall strat-egy. FDA will review and/or recommendthe firm’s recall strategy, and will developa strategy for its own audit program basedon the agency’s hazard evaluation and

other significant factors such as type oruse of the product, distribution pattern,market availability, etc. The need for pub-licity, the depth of the recall, the level ofeffectiveness and audit checks, and otherrecall implementing factors will be a partof the recall strategy. The strategy is sepa-rate from, and not tied to, the class of re-call selected.The procedures manual also describes the

FDA’s approach to analyzing effectiveness:It is FDA policy that after a firm decidesto recall its products and so notifies theagency and recipients of the products, therecalling firm has the responsibility to de-termine whether the recall is progressingsatisfactorily. Because effectiveness checksaid in verifying that all known, affectedconsignees have received notificationabout a recall and have taken appropriateaction, it is the obligation of all recallingfirms to conduct effectiveness checks aspart of their recall strategy. Only in thisway can the firm fulfill its responsibilityto FDA and consumers.The manual contains a number of helpful

sample recall documents and guidances invarious areas. For example, there is a guid-ance on how to evaluate hazards in order tomake the initial decision on whether a re-call is necessary, and then how to create anacceptable recall strategy. The factors to con-sider are the usual ones that any manufac-turer uses to evaluate future risk—what isthe hazard, when does it occur, what type ofpeople will be exposed to it, what is the prob-ability of the hazard occurring, and what arethe consequences if it occurs.

U.S.D.A. and N.H.T.S.A.The United States Department of Agricul-ture’s Food Safety and Inspection Service isresponsible for meat and poultry that is ininterstate commerce. Intrastate food safetyis the responsibility of state and local foodinspectors. Like the FDA, the FSIS classifieshazards as Class I, II, and III, with I beingthe most hazardous.

The FSIS’s primary role is to closely moni-tor the effectiveness of the firm’s recall proce-dures and to provide scientific and technicaladvice. FSIS has a standing Recall Committeethat works with the company to coordinate

22 For The Defense

the recall. It is chaired by the Recall Man-agement Division and consists of scientists,technical experts, field inspection managers,enforcement personnel, and communica-tions specialists. More guidance is providedon FSIS procedures at http://www.fsis.usda.

gov/OA/background/bkrecalls.htm.The National Highway Traffic Safety Ad-

ministration provides a comprehensive com-pendium of information concerning recalls,dated June 2001, on its Web site. See http://www.

nhtsa.gov/cars/rules/standards/recompendium.

pdf. It summarizes all of the regulations andprocedures for undertaking a recall.

NHTSA recalls are a bit different thanconsumer product recalls and many FDArecalls. Since on-road motor vehicles mustbe registered with some governmental en-tity, it is generally easier to find the currentowner and communicate with him or her.However, certain important motor vehicleequipment, such as baby car seats, are notregistered, and owners can change a num-ber of times over the seat’s lifetime.

The kinds of information to be providedto the purchaser are described in this com-pendium. It is similar to the informationthat the FDA and CPSC require to be pro-vided. Other content of the compendiumincludes press releases to the public, noticeto the dealers, forms for reporting to theNHTSA, sample letters to consumers anddealers, and the possible need to renotify allof the affected parties if NHTSA deems therecall not totally effective. The recalling en-tity must report quarterly to NHTSA on theprogress of the recall.

The compendium does not discuss recalleffectiveness or the criteria used by NHTSAto determine if a recall has been successful.Again, because motor vehicles are registeredand the products expensive, it would be ex-pected that response rates on recalls wouldbe high where the risk is perceived to besignificant by the consumer.

Other Governmental AgenciesA few other agencies require certain manu-facturers to report and to undertake recalls.These include Bureau of Alcohol, Tobaccoand Firearms (alcoholic beverages), CoastGuard (recreational boats and equipment),Environmental Protection Agency (pesticide

products and vehicle emission control sys-tem) and the Department of Housing and Ur-ban Development (manufactured housing).

European UnionThe EU has recently increased the respon-sibilities of manufacturers to report safetyproblems to a governmental agency and theresponsibility of agencies to be more proac-tive in dealing with post-sale problems. SeeRoss, “The Increased Duty to Take Post-Sale Remedial Action,” April 2002 For TheDefense 37.

The revisions to the EU’s General Prod-uct Safety Directive will become effective inJanuary 2004. Then, each EU member statemust enact legislation incorporating the re-quirements of the new GPSD. It could beexpected at that time that governments inthe EU will provide more guidance on howmanufacturers should undertake a recall.

The 2004 GPSD substantially expandsmanufacturers’ and government’s post-saleresponsibilities. It attempts to strengtheneach member state’s powers to monitor and toimprove collaboration on market surveillanceand enforcement. The mechanism for this ef-fort will be a Product Safety Network that willdevelop Rapid Alert System (RAPEX) pro-cedures. RAPEX requires member states toinform the European Commission of seri-ous risks so that it can alert other members.

The objective of the new Product SafetyNetwork will be to facilitate the exchange ofinformation on risk assessment, dangerousproducts, test methods and results, and re-cent scientific developments. In addition,joint surveillance and testing projects, theexchange of expertise and best practices,and cooperation in training activities willbe established and executed. Presumably,there will be close cooperation within theEuropean Union and also with foreign agen-cies responsible for product safety, in thetracing, withdrawal, and recall of danger-ous products.

The 2004 GPSD also increases responsi-bilities for manufacturers and distributors.Distributors will have to monitor the safetyof products placed on the market, especiallyby passing on information on product risks,keeping and providing documentation nec-essary for tracing the origin of products, and

cooperating in actions taken by manufactur-ers and governmental agencies to avoid therisks. Both manufacturers and distributorswill have a duty to immediately notify agen-cies when they know or ought to know thata product they have placed on the marketposes risks to the consumer that are incom-patible with the general safety requirementof the GPSD.

The GPSD applies only to consumer prod-ucts. However, the EU is proposing that thelaw be changed so that the market surveil-lance and product withdrawal responsibilitiesalso apply to industrial products and otherproducts governed by the New ApproachDirectives (such as machinery, toys, low volt-age equipment, medical devices, etc.).

In some recent reports, the EU has fo-cused on providing guidance to memberstates about how to improve and make con-sistent throughout the EU market surveil-lance techniques used to identify unsafeproducts that need to be withdrawn fromthe marketplace. See, “Guide to the Imple-mentation of Directives based on the New Ap-proach and the Global Approach” (September1999), http://europa.eu.int/comm/enterprise/

newapproach/legislation/guide/legislation.htm,and “Enhancing the Implementation of theNew Approach Directives COM (2003)240” (July 5, 2003), http://europa.eu.int/comm/

enterprise/newapproach/index.htm.For example, the July 2003 report describes

market surveillance techniques in the EU asfollows:

Some Member States have a “proactive”approach to market surveillance, whileothers adopt a “reactive” strategy. A reac-tive strategy covers activities such as re-sponse to complaints, safeguard clausenotifications of other Member States andbasic customs checks. A proactive ap-proach suggests targeted campaigns, useof risk assessment tools, co-operationwith other authorities.The report also says “Member States need

to ensure effective communication and co-ordination at national level between theirmarket surveillance authorities and theirother authorities which work in the field ofproduct safety such as occupational healthand safety authorities and customs.”

On the issue of encouraging companies to

October 2003 23

continued on page 55

Given the variables of

determining the adequacy

and effectiveness of a

recall program, it is

difficult to come up with

definite strategies for

defending the recall.

report and voluntarily withdraw their prod-ucts from the market, the July 2003 reportstates “Deterrent measures like strong sanc-tions against persons or companies repeat-edly misusing the freedoms offered by theNew Approach system, product recall ac-tions or information campaigns are appro-priate actions to help reduce the number ofdeficient products on the Internal Market.”

The EU also envisions much greater co-operation between member states in trans-mitting information about unsafe products.The July 2003 report states: “Information aboutnon-complying products, especially thosethat are subject to frequent complaints, needto be passed from one national authority to allother national market surveillance authori-ties faster than the products can be movedfrom one national market to the other.”

However, one organization avers that thereis no way for market surveillance bodies toexchange information among themselveswithin a short space of time, thereby mak-ing it possible for an unsafe product takenoff the market in one country to be on salefor a long time in another country. The so-lution, according to the Information andCommunication System for Market Surveil-lance (http://www.icsms.org), is an Internet-based system made up of manufacturers,trade associations, and governments thatwill then be able to more quickly transmitsafety information concerning market sur-veillance and product safety issues.

Despite all of this new legislation andguidance, few manufacturers selling in theEU know how to withdraw products fromthe marketplace and how effective the recallmust be. The focus seems to be much more ongovernments mandating recalls and productwithdrawals and then placing public noticesin various locations concerning the recall.

However, a failure to take your Europeanresponsibilities seriously because of the lackof product liability litigation in Europe canbe a big mistake. In addition to causing legalproblems in the EU, the failure to take ap-propriate remedial actions in the EU mighteven creep into your U.S. litigation. In twocases where the author was retained as anexpert witness, one involved an allegedlyinadequate recall in Europe and the otherinvolved, in part, a failure to recall a prod-

uct in Europe after recalling the product inthe United States. Plaintiffs will most likelyinquire into whether the manufacturer un-dertook any post-sale remedial program inany country outside the U.S., and try to getthat fact into evidence.

Other NationsOne of the most useful guides on recalls is anexcellent pamphlet published in 1999 by theUnited Kingdom’s Department of Trade and

hensive mailing lists, a high expenditure ofmoney on published notices, and a high levelof free publicity. The low levels of recall effec-tiveness were attributable to the age of theproduct (they’ll continue using a productthat has been used safely for years), the lowcost of the product (they’ll just throw theproduct away), and a low perceived risk(they’ll just continue using the product).And, unfortunately, it will be difficult to con-sider products that are just discarded or notused anymore as a result of the recall noticein tracking response rates.

The Consumer Safety Unit of the Austra-lian Treasury published a recall guide inJuly 2002. It can be found at http://www.

recalls.gov.au/recalls_guide1.cfm. Its content issimilar to the U.K. and CPSC manuals de-scribed above. However, a manufacturer re-calling any consumer product in Australiashould consult this guide for any require-ments that are particular to Australia, espe-cially those involving reporting the recall tothe Australian government.

In Canada, the Consumer Products Di-vision of the Health Ministry has powers toenforce the Hazardous Products Act, butdoes not have recall powers. In addition,manufacturers and importers do not have aspecific duty to recall their products. How-ever, their products can be seized if theyviolate the Act. As a practical matter, theMinistry does not have a public list of recallprocedures. Instead, it works with each manu-facturer or importer to develop a recall strat-egy for the specific product. The Canadiansprobably rely on procedures and guidelinessimilar to those of the CPSC and other safetyagencies.

The Canadian Motor Vehicle Safety Actdoes give Transport Canada the right to or-der recalls, although there do not appear tobe any recall guidelines for manufacturers.Basic instructions on how to implement arecall and how to report the recall’s progressare in the Act, but there is no mention of re-quired recall effectiveness.

The Canadian Health Products and FoodBranch Inspectorate of Health Canada haspublished product recall procedures for food,drugs, cosmetics, medical devices, and ra-diation emitting devices. These procedures

Industry. Consumer Product Recall: A GoodPractice Guide (see http://www.dti.gov.uk/CACP/

ca/advice/productrecall/pdf/consumer.pdf). Itprovides excellent guidance on communi-cating to product users about safety issuesinvolving consumer products; it also listsother guides in the U.K. on recalling cars,food, medicine, aerosol products, and ap-pliances. This guide also includes: planningfor a recall, deciding whether to recall, whatthe recall message needs to say, how to de-liver the recall message, and innovative waysto improve your recall. The guide also pro-vides case studies of actual recalls and thelessons learned from the recall.

In addition, the U.K.’s DTI has issued a use-ful report called Product Recall Research (http://

www.consumer.gov.uk/homesafetynetwork/

gh_recal.htm), which surveyed recalls in theU.K. from 1990 to 1996 and, in part, iden-tified the key reasons and factors as to whycertain recalls were particularly successfulor not successful. The response rates aver-aged 37 percent with the largest number ofrecalls coming in at less than 10 percent.

The highest levels of response were at-tributable to a high-perceived risk, compre-

October 2003 55

Product Recalls, from page 23can be found at http://www.hc-sc.gc.ca/hpfb/in-spectorate/recall_procedure_entire_e.html. Theyare similar to the recall procedures issued bythe United States FDA. HPFB helps compa-nies develop a recall strategy, communicationeffort, and effectiveness checks. And the gov-ernment classifies hazards with the designa-tion Class I, II and III and with similar recalleffectiveness checks.

How to Perform an Effective RecallThe first question is: what is an effective recall?Since this is dependent on so many variablesand there are no set numbers or even ranges ofnumbers that would allow one to conclude thata recall has been reasonable and effective, thereis no good answer. It is very specific to thetypes of products, cost of the product, risks inusing the product, perceived risks by the con-sumer, distribution techniques, difficulty in re-ducing or eliminating risk, and other factors.

Another question to ask is how effectivedoes the recall have to be? This goes to thequestion of the level of risk that exists if peoplecontinue to use the product. In many recalls,the goal is at least to get the message out abouta hazard and not necessarily to get the productback. The consumer could destroy the product,not use it, or change his or her behavior whenusing it. In these types of remedial programs,it is impossible to track a “response” since theconsumer doesn’t have to respond to the pub-lic notice or recall letter or safety bulletin. Also,many products may have been already takenout of service or are not being used anymore.So, tracking the number of products sold ver-sus the number of products recalled or fixedis not an accurate measure of the effective-ness of the recall.

The guides published by the various gov-ernmental agencies should, of course, be re-viewed. However, except for medical devicesrecalled in the United States, there are no effec-tiveness levels established in the regulations. Sothe manufacturer has flexibility to develop arationale to convince the agency and possiblya jury that the effectiveness rate was adequate.

Some of the conclusions from the CPSC re-call effectiveness study issued in August 2003confirm ways in which a recall can be more ef-fective. Consumers are less likely to complywhere compliance is inconvenient, takes time,or costs money. For example, where consum-ers must return the recalled product beforethey receive a replacement, response rates havebeen low.

One of the principal authors of the CPSCrecall effectiveness study is Ed Heiden, theformer chief statistician for the CPSC. He haswritten extensively on how to perform a re-call, how to measure recall effectiveness, andhow to defend the adequacy of recalls. Severalyears ago, Ed analyzed the potential to increaserecall response rates by increasing the receiptof product registration cards. He thinks thatthe chances of increasing the receipt of suchcards will not be significantly improved withmore effort and that the value of the cards di-minishes with time. People move frequently(16 percent per year) and products are sold ordiscarded. Instead, Heiden believes that usingmodern communication media such as theInternet might increase effectiveness.

Many observers have written over the yearson the subject of how to perform a recall. Typi-cally, they focus on pre-recall planning, man-agement techniques to establish for obtainingand analyzing post-sale information and per-forming the recall, logistics and communicationplanning, post-recall tracking, and follow-up.Most of their suggestions are similar to thosecontained in the various government docu-ments.

An entire coterie of consultants has emergedto help with recalls—crisis management ex-perts, legal experts in recalls, financial and lo-gistics experts, and experts in what is called“reverse marketing.” A manufacturer shouldat least consider these resources in determin-ing how best to perform a remedial program.

Defending the Adequacy of the RecallGiven the variables of determining the ad-equacy and effectiveness of a recall program,it is difficult to come up with definite strate-gies for defending the recall. As stated earlier,the best recall most likely will not automati-cally cut off liability for the manufacturer forselling a defective product. And, given the factthat most recall letters admit that the productis defective, defense counsel needs to look else-where for a good defense.

Of course, the best approach would be tokeep the recall from being introduced intoevidence. You can argue that the recall is asubsequent remedial measure and should notbe allowed into evidence. See Carter, “Defend-ing Against Product Recall Evidence at Trial,”April 2002 For The Defense 43. However, oftena good plaintiff ’s attorney can somehow get therecall into evidence or find an expert to arguethat the product should have been recalled. Infact, it may be beneficial to the manufacturer

to affirmatively place the recall in evidence asproof of the manufacturer’s commitment tosafety and the well being of its consumers.

Having the recall in evidence would be nec-essary to use some of the other possible de-fenses. The best one is that the recalled productor part of the recalled product that was defec-tive did not cause the injury or damage. Ofcourse, the existence of the recall, if it getsinto evidence, will muddy the facts and mayresult in liability even without causation.

The next good defense would be that theconsumer saw the message or received theletter and ignored the recall. While it may behard to prove an assumption of the risk, thisargument should at least help establish somecontributory fault on the injured party. Whenusing this defense, it is imperative to be able toprove that the “warning” in the letter or noticewas adequate, using general warning prin-ciples. That is why some type of comprehen-sion testing of recall letters may be helpfulbefore they are sent out. However, these kindsof surveys can also be performed during thedefense of the case to support the adequacy ofthe notice.

If the recall is to be performed by an inter-mediary such as a dealer or retailer, and theydid not do it adequately, the manufacturermight be able to pass along some or all of theliability to that entity. For example, in one case,a propane gas dealer was held liable and themanufacturer was absolved because the dealerdid not send out the manufacturer’s recall let-ters to their customers after promising to do so.His failure to send out the letters constituteda superseding, intervening cause. Similarly, aretailer’s failure to remove recalled productsfrom the shelves and warehouse, or failure toplace the recall notice in a conspicuous place,may also constitute some contributory faultor intervening cause.

If you can’t break the causal link, then youmust defend the adequacy of the specific re-call or post-sale program. Since the recall waspresumably not effective to the injured party,the plaintiff will argue that the manufacturercould have and should have done more. Themanufacturer will have to evaluate the tech-niques it employed, the effectiveness rates ascompared to others for similar products, tryto explain the effectiveness rate in the contextof limitations to increasing the rate, and dis-cuss why doing more would not have neces-sarily increased the rate.

An analysis of past punitive damages awardsclearly shows that the basis for most such awards

56 For The Defense

is that the jury believed that the manufacturerfailed to undertake adequate post-sale remedialmeasures. At a minimum, hopefully the manu-facturer can minimize or prevent the chance thatpunitive damages will be imposed by establish-ing lack of causation, intervening cause, or othercontributory fault, or defend the effectiveness ofthe response and limitations on improving it.

ConclusionManufacturers need to be prepared to recalltheir products even if they have never had todo so in the past. Once a product safety issue

arises, it is too late to develop a plan. Prepar-ing for a recall before it occurs can signifi-cantly increase its effectiveness and lessen thecosts and disruption. Of course, the manufac-turer also needs to employ pro-active pre-saleproduct liability prevention techniques so thata recall is not necessary in the first place.

It is clear that governments around theworld will focus more on identifying productsafety problems and forcing or encouragingmanufacturers to do something about them.Keeping up with the state of the art will requirepaying attention to what other companies are

doing and what government agencies are re-quiring. This vigilance will pay large dividends.

Manufacturers should not assume that theireffectiveness rates are static and can’t be im-proved. Technology is available today that couldincrease their ability to quickly communicatewith the distribution chain and even consum-ers about the recall. They should continuallylook for ways to significantly improve the suc-cess of their recalls and other post-sale remedialprograms. Hopefully, this will minimize risksand the potential for accidents and provide sometype of defense if an accident happens.