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Concern for and regulation of product safety in the U.S. has a long history. Some attribute its beginnings to the 1893 Chicago World’s Fair, where standards for the newly developed electricity were established, leading to the establishment of the new organization Underwriters’ Laboratories (UL), which set voluntary but influential standards for products managing and using electricity. The 1906 Pure Food and Drug Act first established standards for safety and quality of food and drugs. The 1933 Federal Securities Act protected investor customers by limiting how securities are sold and what disclosures must be made regarding the financial and strategy plans of companies. Both acts responded to major failures by those industries. Arguably, though, product safety has been advanced most powerfully in the U.S. by a reliance on tort law, which allows victims who are harmed or injured to recover civil penalties from the company or individual responsible for the action or omission. Court decisions resolving tort cases establish standards of responsibility which then drive businesses to adopt practices and safety standards to avoid future tort liability. Today, every industry needs legal counsel to know the de-facto safety standards which determine if it has a responsible product and consumer experience. The workings of tort law have been supplemented since World War II by many new federal and state consumer laws that focus on particular products, industries and practices. Among these are the Motor Vehicle Safety Act of 1968, the Fair Housing Act of 1968, the Fair Credit Reporting Act of 1970, the Consumer Product Safety Act of 1972, the Toxic Substances Control Act of 1976, the Food & Drug Administration Amendments Act of 2007 (regulating pharmaceuticals), and the Fair Debt Collections Act of 2010. The Americans with Disabilities Act of 1990 protects access to shopping and business transactions as well as to employment. The accumulating set of product responsibility standards has made the art of risk assessment a key corporate practice since World War II and has subsequently been embedded in voluntary and mandatory product standards. Responsible corporations conduct pre-release and ongoing testing and assessment to evaluate the potential for product failures and misuse. The most responsible companies do this preemptively and with transparency to head off problems before consumers are harmed. In 1972, the Consumer Product Safety Commission (CPSC) was created with a broad mandate and process for establishing by commission action mandatory product safety standards for a wide range of products. In its 52-year history, the CPSC has created standards for refrigerators, garage doors, fires, baby cribs and walkers, poisons endangering children, bicycles, pools, chairs and ladders, among other products. Its success led Senator Elizabeth Warren (D-MA) to champion the creation of a similar Consumer Financial Protection Bureau (CFPB) in 2011 as part of the Dodd-Frank Act following the 2008 financial crisis. The CFPB has established standards for a wide range of financial practices and has created an active process to take complaints and enforce responsible practices in consumer finance. Product responsibility, similar to other aspects of business responsibility, has been drive by a series of notable scandals leading to the creation of new laws and new understandings of what is responsible behavior. In our 2021 book, Rotten: Why Corporate Misconduct Continues and What to Do About It (see here), my co-author Marc Epstein and I profiled several cases important to the recent history of product responsibility: the Volkswagen emissions fraud, Theranos’ product deception, Peanut Corporation of America’s salmonella outbreak, Wells Fargo’s sham customer accounts, Takata’s exploding airbags, Equifax’ compromise of customer data, and Boeing’s design failures.
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