Baja Motorbike Companies Agree to $4.3M Settlement For Failing to Report Defects

The Consumer Product Safety Commission (CPSC) has reached a $4.3 million settlement agreement with Baja Inc. and the motorbike maker’s subsidiary One World Technologies Inc., resolving allegations that the companies knowingly failed to report defects and safety hazards with their vehicles as required by federal law. 

Baja and One World Technologies agreed to pay a $4.3 million civil penalty and maintain a program designed to ensure compliance with safety issues and regulations, according to a CPSC announcement issued on October 28.

The motorbike company settlement comes after the CPSC launched an investigation into the alleged withholding of defect information involving 11 different models of minibikes and go-carts, in an apparent attempt to avoid recalls.

In early 2010, the CPSC filed charges against the two manufacturers for not reporting that certain models of minibikes and go-carts had gas caps that were reported leaking and detaching from the fuel tank, posing a fire and burn hazard. The CPSC indicated that the companies also failed to report that the throttle on certain models can stick due to an improperly positioned fuel line and throttle cable, posing a sudden acceleration and crash hazard.

The CPSC claims the companies had received consumer complaints and injury reports but disregarded informing the agency which is mandatory under federal law to report hazards within 24 hours of recognition.

Federal law requires manufacturers, distributors, and retailers to report to the CPSC immediately after obtaining information that reasonably supports the conclusion that a product may contain defects that could create a substantial 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 the CPSC.

According to the allegations, Baja received at least four reports of fires from leaking gas caps and burn injuries to consumers, including a serious burn injury to a child, which were not reported to the CPSC. Additionally, Baja Inc. received about two dozen consumer reports indicating the throttles had jammed.

Documents found during the CPSC’s investigation indicated that Baja began implementing design changes to remedy the throttle hazard in newer models and for defective models before ever notifying the CPSC of the changes.

Separate from the $4.3 million civil penalty, Baja Inc. and One World Technologies, will be forced by the CPSC to maintain a program designed to ensure compliance with the safety statutes and regulations mandated by the commission that includes written standards and policies, systematic review of consumer complaints to capture safety issues, confidential employee reporting of compliance concerns, effective communication of compliance policies, senior management responsibility for compliance and accountability for violations, oversight of compliance by the firm’s governing body, and record retention requirements.

The two manufacturers claimed to have been assessing the scope of the problems and had actually submitted the Full Report including injuries, complaints, and defects to the CPSC in June 2010 but the agency had already filed its charges. The vehicles with leaking gas caps and throttle complications were officially recalled by the CPSC in July 2010, including 308,000 minibikes and go-carts sold nationwide from November 2004 through June 2010 for $200 to $2,000.