Enforcement

CPSC says Johnson Health Tech agreed to $16.875 million penalty over treadmill reports

CPSC provisionally accepted a settlement with Johnson Health Tech Trading that includes a $16.875 million civil penalty and compliance steps after a treadmill hazard reporting case.

The U.S. Consumer Product Safety Commission says Johnson Health Tech Trading, Inc. agreed to pay a $16.875 million civil penalty in a settlement over allegations that it failed to immediately report a fall hazard involving Horizon T101-05 treadmills.

CPSC said the settlement, which it provisionally accepted, resolves charges that the Cottage Grove, Wisconsin-based company knowingly failed to report a defect that could create a substantial product hazard and an unreasonable risk of serious injury or death to consumers.

The agency said the treadmills could unexpectedly accelerate, stop or change speed without user input. CPSC said that between March 2018 and October 2022, Johnson Health Tech Trading received at least 874 reports about those problems, including at least 71 consumer injury reports.

According to the release, the company made production changes in February 2021 and September 2021 to try to reduce the fall hazard, but incidents continued after those changes. CPSC and Johnson Health Tech Trading jointly announced a recall of the Horizon T101-05 treadmills on Oct. 27, 2022.

The recall said the treadmills could unexpectedly accelerate, change speed or stop, posing a fall hazard.

The settlement also requires Johnson Health Tech Trading and affiliated company Johnson Health Tech North America, Inc. to maintain internal controls and procedures aimed at compliance with the Consumer Product Safety Act. That includes appointing a product safety professional to oversee CPSA compliance and make recommendations on timely section 15(b) reporting, as well as steps to ensure incident and injury data are reviewed and analyzed for reporting purposes.

Both companies must also submit an annual report on the compliance program, internal controls and internal audit effectiveness for three years.

CPSC said the settlement remains subject to public comment. The release identified Mark S. Raffman, a senior trial attorney in the Division of Enforcement and Litigation, as the commission’s representative in the action.

Sources