Although people suffer injury in the U.S. daily because of defective products, federal safety regulations mitigate this risk. The Consumer Product Safety Commission (CPSC) serves as a barrier that protects the public from unsafe products by developing voluntary safety standards, imposing mandatory standards, and banning products when no safety measure would adequately protect consumers. However, these consumer protections offer limited benefit when companies emphasize profits over safety by covering up defects and product-related injuries to ensure their products remain on store shelves. The CPSC has taken a novel step to discourage such egregious conduct by bringing a criminal indictment against two executives of two companies that imported and sold defective dehumidifiers in the U.S.
The companies are not mentioned by name in the indictment. However, the operative facts detailed in the indictment suggest the charges stem from Gree Electric Appliances, Inc.’s failure to report consumer complaints involving overheating and fires caused by dehumidifiers the company manufactured. The criminal indictment follows in the wake of recalls of dehumidifiers manufactured by Gree that ultimately resulted in a $15.4 million civil penalty agreement with the U.S. Consumer Protection Safety Commission (CPSC).
The indictment alleges that Simon Chu and Charley Loh, the Chief Administrative Officer and Chief Executive Officer of two unnamed companies that imported and sold dehumidifiers from China in the U.S., failed to fulfill reporting requirements under Section 15 of the Consumer Protection Safety Act (CPSA). Specifically, the document alleges the executives “knowingly and willfully” failed to immediately inform the CPSC that the defective appliances posed a substantial product hazard and an unreasonable risk of injury. The executives also are charged with conspiracy to defraud purchasers, the CPSC, and retailers, as well as wire fraud.
While Gree already settled a large civil action by paying a fine for failing to comply with reporting requirements under the CPSA, Section 21 of the of the statute authorizes the filing of criminal charges against a “director, officer, or agent of a corporation” for knowing and willful non-compliance with the reporting requirements of the statute.
Allegations in the indictment indicate the executives initially learned of the dehumidifier fire risk after receipt of a video from a purchaser showing one of the appliances on fire in July 2012. They also purportedly were made aware that plastic used in manufacturing the device caught fire during testing in September 2012. At this time, Chu and Loh allegedly became aware that the dehumidifiers failed to comply with UL safety standards for fire resistance. The indictment alleges Loh sent emails to executives at a third company (an unindicted co-conspirator) advising that the devices were defective and non-compliant with UL fire resistance safety standards. The emails further indicated that the companies had a duty to report the problems to the CPSC. Nonetheless, the executives continued to sell the devices and delayed notifying the CPSC in a timely fashion. When the CPSC was finally notified by the two unnamed companies (and the unindicted co-conspirator) on April 30, 2013, the agency was advised that the appliances were “safe and not defective.”
This case constitutes the first time that criminal charges have been pursued against company executives for violating CPSA requirements regarding defects that threaten public safety. The rationale for the indictment likely rests, at least in part, in the fact that accurate and timely reporting of the issue might have prevented some of the 450 fires and $19 million in property damage that has been linked to the defective dehumidifiers.
If you or someone close to you has experienced property damage, burns, smoke inhalation injuries, or the loss of a loved one because of a fire initiated by a dehumidifier manufactured by Gree, we invite you to contact us at 1-(888) 99 VICTIM for a free case evaluation.
The National Product Liability Lawyers at the Law Offices of Jason Turchin are currently investigating claims involving dehumidifiers causing fires, injuries, fatalities, and/or property damage. If you have been harmed by a defective dehumidifier, we are committed to seeking the fullest compensation for victims and holding companies that put profits before consumer safety responsible for their actions. Call us today at (888) 99-VICTIM for a free case evaluation. We serve clients in product defect cases in all 50 states.
Can You File a Lawsuit for Your Dehumidifier Fire?
If you or a loved one or family member were injured, burned, killed or suffered property damage caused by a defective dehumidifier, you may be entitled to compensation for any medical bills, surgical costs, prescription painkillers, lost income, scarring and disfigurement, and mental pain and anguish you may have suffered.
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The Law Offices of Jason Turchin has the unique experience that makes all the difference in the outcome of you or your loved one’s Dehumidifier Fire Lawsuit. Call 1-800-510-0750 to schedule your consultation.