Representing the first time a retailer has been sued and paid a penalty for neglecting to report safety hazards, discount chain Wal-Mart will pay a $750,000 civil penalty to resolve a lawsuit filed in May 2001 that charged the store failed to report multiple safety hazards associated with exercise gliders it sold made by Icon with the brand names, Weslo and Weider.
Under a law administered and enforced by the Consumer Product Safety Commission, manufacturers, distributors, and retailers must immediately report product hazards to the commission. The CPSC and the Department of Justice charged that Wal-Mart failed to report hazards with Weider and Weslo brand exercise gliders, despite knowing of at least 29 consumers who were injured while trying out the gliders in Wal-Mart
stores across the country. The injuries included fractured vertebrae, herniated discs, and a compression injury to a woman's spine.
"This case demonstrates that retailers, like manufacturers, importers, and distributors, are required to report consumer product defects and injuries to the Consumer Product Safety Commission in a timely manner, and that there are penalties for those who fail to do so," CPSC Chairman Hal Stratton said in a statement. "Prompt and timely reporting by companies will allow us to act swiftly to protect consumers from injuries."
In April 1999, the CPSC and Icon jointly recalled the gliders. In May 2001, the CPSC sued Icon for failing to report the hazards. The suit also included Wal-mart and its Sam's stores, making it the first government lawsuit against a retailer in federal court for product-related injuries. The lawsuit sought a jury trial and fines up to $9 million in civil penalties from the defendants.
In November 2001, Icon agreed to pay a $500,000 civil penalty for failing to inform the CPSC in a timely manner of 86 incidents and 68 injuries involving the same Weider and Weslo exercise equipment. The injuries were the result of a defect in the arm supporting the seat on the exercise gliders that can disconnect during use, causing the user to fall abruptly. That settlement also required Icon to establish internal recordkeeping and monitoring systems to keep track of information about product safety hazards.
In a statement issued in June 2001 in response to the lawsuit, Icon spokeswomen Colleen Logan had said it did not believe a fine from the CPSC was appropriate in the situation.
To see a picture of the exercise gliders and the CPSC statement, go to: www.cpsc.gov/cpscpub/prerel/prhtml03/03118.html. To take a look at the original charges and to read the papers as filed with the federal court, go to: www.cpsc.gov/cpscpub/prerel/prhtml01/01161.html