The sum represents the second-highest penalty ever paid to the U.S. Consumer Product Safety Commission, according to a news release.
A defect with Keurig’s MINI Plus single-serve brewing system “caused hot water and coffee grounds to spray out and burn unsuspecting consumers,” the commission said.
The brewers went on the market in December 2009, and the commission said it was notified of the defect in November 2014. The Waterbury-based company then announced a recall on Dec. 23, 2014, according to the commission.
“Staff alleged that Keurig knew of the defect but failed to timely report to CPSC,” the commission said in a statement. “By the time of the recall, at least 100 consumers had suffered burn‐related injuries to their faces, hands and bodies.”
“While we have reluctantly voted to approve the settlement … we have serious reservations about whether the amount will have any meaningful deterrent effect on Keurig or other multibillion-dollar companies who are well‐positioned to dismiss this size penalty as a small cost of doing business,” the commission said.
Keurig Green Mountain’s spokespeople did not respond to requests for comment before deadline.
The commission said that over a four-year period between 2010 and 2014, Keurig accumulated “significant information” that “resulted in several missed opportunities to report, including receipt of detailed incident and injury data, insurance claim payments made to injured consumers, and notice of at least two requests by a retailer for Keurig to undertake a product safety investigation.”
The commission called it “unfortunate” that federal law prohibits it from being more specific about alleged violations by companies.
The commission said Keurig sold 6.6 million defective brewers over a five-year period at $100 per unit, and therefore “gained substantially from its failure to report,” while being hit with a penalty that amounts to “an infinitesimal 0.87 cents per unit sold.”
The commission went on to condemn Keurig for continuing to sell the brewers after it reported the defect in November 2014 but before it announced the recall the following month — a time period that included the Black Friday shopping day.
“By continuing to sell the brewers after committing to participate in a voluntary recall, Keurig completely disregarded what we have always understood to be a cardinal rule of the commission’s Fast‐Track recall program: all firms electing to participate in the program must immediately stop sale and distribution of the product,” the commission said.
“Keurig’s failure to implement a stop sale while negotiating the recall demonstrates that it put profits ahead of safety and provides further justification for a significant civil penalty,” the commission said. “In our opinion, the negotiated rate of less than 1 percent per unit is just not enough.”
Keurig went private in a $14 billion deal announced in late 2015. The Consumer Product Safety Commission values the company at $4.5 billion, with more than 6,000 employees. The company has laid off more than 350 employees in Vermont in the past two years.
