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Failure to Disclose Defect Leads to $4.3 Million Fine on Go-Cart Company

The U.S. Consumer Product Safety Commission (CPSC) recently imposed a $4.3 million penalty on a company that failed to disclose dangerous defects. According to the agency,Baja Inc., and its corporate affiliate, One World Technologies Inc., knew that 11 models of minibikes and go-carts posed a serious risk of injury but failed to timely notify the CPSC.

As we have previously discussed on this San Diego Injury Blog, federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.

In this case, the CPSC charged that the defective minibikes and go-carts have two serious defects. First, the gas cap can leak or detach from the fuel tank, posing fire and burn hazards. Second, the throttle can stick, due to an improperly positioned fuel line and throttle cable, posing a sudden acceleration hazard.

According to the CPSC, Baja failed to notify the public or the CPSC about the defects, even though it had received multiple reports of problems from consumers. The company reportedly had received four reports of fires from leaking gas caps and burn injuries to consumers, including a serious burn injury to a child. In addition, Baja had received 24 consumer reports of stuck throttles and had even altered the design to remedy the issue. Baja and the CPSC eventually issued a recall in July of 2010, which included 308,000 minibikes and go-carts.