The U.S. Consumer Product Safety Commission (CPSC) is announcing that BJ's Wholesale Club, Inc. of Marlborough, Massachusetts, has agreed to pay a $9 million civil penalty. The settlement resolves CPSC's charges that BJ's knowingly failed to immediately report to CPSC, as required by law, that portable air conditioners manufactured by Royal Sovereign International, Inc. and sold by BJ's contained a defect that could create a substantial product hazard and created an unreasonable risk of serious injury or death to consumers.
Despite possessing information that reasonably supported the conclusion that the portable air conditioners contained a defect that could create a substantial product hazard or created an unreasonable risk of serious injury or death, BJ's did not immediately report to the Commission.
BJ's sold 1,778 of the portable air conditioners between 2011 and 2012; 509 of those units were returned to BJ's. In August 2016, one of the Royal Sovereign portable air conditioners sold by BJ's was involved in a house fire in Smithtown, New York. A mother and her two children were rescued from the fire; the mother died of her injuries in December 2016. BJ's learned of the fire no later than March 2017.
In March 2021, BJ's issued a notice to consumers who had purchased the air conditioners that the product "does not meet our safety standards" and that "out of an abundance of caution [they should] stop using this product immediately."
Royal Sovereign and the Commission jointly announced a recall of the portable air conditioners on December 22, 2021.
In addition to the $9 million civil penalty, the settlement agreement requires BJ's to maintain internal controls and procedures designed to ensure compliance with the Consumer Product Safety Act (CPSA), including enhancements to its compliance program. BJ's has also agreed to submit, for a period of three years, annual reports regarding its compliance program, internal controls, and internal audits of the effectiveness of compliance policies, procedures, systems, and training.
By a 4 to 0 vote, the Commission provisionally accepted the settlement agreement, subject to public comment. Mark Raffman, a Senior Trial Attorney in the Division of Enforcement and Litigation, represented the Commission in this enforcement action.
CREDIT: U.S. Consumer Product Safety Commission