Last week, the Senate Commerce Committee marked up legislation reauthorizing the National Highway Safety Administration (NHTSA). Why should a food company, a company that makes medical devices or a one that sells consumer products have this on its radar screen? Because, during the mark-up, Senator Richard Blumenthal (D-CT) offered an amendment to incorporate elements of his “Hide No Harm Act” into the bill. Among other things, the amendment would have imposed criminal penalties on businesses and responsible corporate officers who do not immediately warn applicable federal agencies of a serious danger associated with a product sold or service provided by their business.
The amendment reached farther than one might think and applied to all businesses, not just those regulated by NHTSA. Companies (and their corporate officers) regulated by USDA, FDA and the other alphabet agencies of the federal government would be covered by the amendment. The amendment ultimately was not adopted in committee, but it drew the support of eight of the 11 democrats on the committee. While it appears that Senator Blumenthal will not be able to offer the amendment when the bill comes before the full Senate, we need to be monitoring any similar efforts in the future.
There have been well-publicized media stories in recent days of auto companies paying fines in eye-popping amounts for failing to promptly report safety violations. The issue of failing to report potential safety violations to various state and federal regulators is not limited to the auto industry. While companies regulated by the FDA or the CPSC may believe they understand their reporting obligations, there clearly is a public perception that safety is not a priority for some product sellers who seek to conceal safety defects and this perception is finding its way into public policy.
The Blumenthal amendment channels a growing public concern about the safety of products in the marketplace. This certainly will not be the last attempt to address this issue. Smart companies will want to take another look at what procedures they have in place to assure they do not become a case study for the need to further expand reporting obligations.