Graco Children’s Products is paying $10 million to settle the claims that Graco failed to recall promptly approximately four million child car seats that had defective buckles that could make it difficult to free a child in an emergency situation. Federal regulators, and in particular the National Highway Traffic Safety Administration (NHTSA), reported Graco would pay a $3 million fine, but would also spend an additional $7 million to develop safety programs.
The government regulators opened their investigation in December 2014, with the focus on whether Graco should have recalled the defective child seats sooner than it did. With regards to the underlying issue, Graco took the position that the problems with their buckles were caused by children spilling food or drinks on them. But NHTSA found evidence by parents more compelling. Dating as far back as 2009, parents told they had to cut straps to free their children. Further, the contamination claim by NHTSA was foreseeable – i.e. Children would tend to spill things in their child seat.
As to this $10 million payment, Graco acknowledged in a consent agreement that it did not provide the required notice to NHTSA, and reiterated it would meet its obligation to fix the defective components quickly. As to the $7 million additional payment, Graco agreed to submit an independent audit showing how it uses those funds to identify potential safety trends affecting the car seat industry and launch a child safety awareness campaign.