Administrative Judge Sides with Leachco in Action Against CPSC

Leachco, a small family-owned business in Oklahoma that manufactures and sells infant lounging products, recently won a rarely litigated issue against CPSC. In July 2024, an administrative law judge (ALJ) denied relief sought by the Consumer Product Safety Commission (CPSC or the “Commission”) in an administrative complaint filed against Leachco regarding its “Podster” infant lounger products. In ruling against CPSC, the ALJ concluded that CPSC “exists to protect the public…from unreasonable risk of injury, not to eradicate any risk of injury to any member of the population.” The order won the support of industry members who viewed CPSC’s unilateral actions and administrative complaint against Leachco as regulatory overreach.

Leachco’s Podster products and similar infant loungers are designed for infants to lie snugly on their backs at an inclined angle while awake and under the supervision of a caregiver. These products include warnings and instructions to not use the products for sleep and not to place it in a bed or crib.

In January 2022, CPSC published a unilateral statement pursuant to Section 6(b) of the Consumer Product Safety Act, asserting that multiple models of Leachco’s Podster lounging products present a suffocation hazard. CPSC cited that it learned of two infants who suffocated while sleeping on a Podster product and subsequently died. In both instances, the product was being used contrary to Leachco’s warnings and instructions regarding the product’s safe use.

In response to the unilateral release, Leachco stood behind the safety of its product and reminded users that the products are not intended for use as sleeping products. In February 2022, CPSC filed an administrative complaint seeking an order finding that the Podster presents a substantial product hazard and requiring Leachco to recall the products.

In the administrative complaint, CPSC alleges that the Podster lounging products are defective and present a substantial product hazard. CPSC acknowledges that Leachco warns against using the product for sleep and against leaving infants unsupervised while using the product. But CPSC argued these products nevertheless need to be recalled because it is foreseeable that consumers will misuse the product.

Various industry members, like First Candle (a non-profit organized to eliminate sleep-related infant deaths) and the Juvenile Products Manufacturers Association (JPMA), voiced concerns over CPSC’s administrative complaint. JPMA criticized CPSC’s “overreach” in filing this action. According to JPMA, “CPSC’s own regulations confirm that infant loungers are not regulated in the sleep category. Yet, that is the basis the agency is using to warn parents to stop using the products altogether, while failing to act to further educate parents on the critical importance of only using baby products as intended.”

On August 17, 2022, prior to a ruling on CPSC’s administrative complaint, Leachco sued CPSC seeking injunctive and declaratory relief. Specifically, Leachco sought “an order (a) declaring the Commission’s structure and proceeding unconstitutional, and (b) temporarily and permanently enjoining the Commission from continuing its claim against Leachco through its inhouse proceeding.” The attorney from the Pacific Legal Foundation representing Leachco summarized the complaint in a statement: “Our lawsuit seeks to vindicate Leachco’s right to a fair hearing before an independent judge. We believe that Leachco’s product is perfectly safe when used properly. If the commission disagrees, it should have to prove its case in a court of law.”

On November 29, 2022, Leachco’s request for a preliminary injunction was denied. That decision was then affirmed by the Tenth Circuit on June 4, 2024. Leachco file a Petition for Writ of Certiorari on August 9, 2024.

Meanwhile, on July 3, 2024, the ALJ issued an Opinion and Initial Order denying the relief that CPSC sought in its administrative complaint. The ALJ concluded that CPSC had failed to show that the Podster was defective and, “even if a defect might be found to exist in some technical sense, the Commission has also failed to demonstrate that such defect creates or has created a substantial risk of injury to the public.”

The ALJ also noted several deficiencies in CPSC’s arguments. For example, CPSC presented no evidence that a safer alternative design or a safer infant lounger product exists. “The absence of evidence of a safer alternative design or a safer product within the class of infant loungers, alone, may therefore be sufficient to refute the existence of a design defect in the Podsters, based on the common understanding of the terms ‘defect’ and ‘design defect’…. Complaint Counsel’s own witnesses believe that there is no way to improve the product, and no way to effectively warn against its supposed dangers, which are hardly manifest or obvious, and which required three experts together to gather a theory of prospective harm threatened by the misuse of the product.”

CPSC appealed the ALJ’s order, which will be heard by the Commission itself. In other words, the appellate “court” that will hear Leachco’s case next comprises the very CPSC Commissioners who voted 3-1 to file against Leachco in the first place. The parties have briefed the appeal, and now await the Commission’s decision.

In the meantime, CPSC’s unilateral press release classifying the Podster as “a substantial product hazard” and warning consumers not to use the product remains on CPSC’s website. If CPSC decides to reverse the ALJ’s decision and orders Leachco to conduct a recall, the company will be permitted to seek, and will likely request, judicial review in federal district court. It seems doubtful that CPSC will adopt the ALJ’s view, and the case will likely be brought before a federal district court.