The U.S. Consumer Product Safety Commission (CPSC) announced today that Hewlett-Packard Company (HP), of Palo Alto, Calif., has agreed to pay a civil penalty of $425,000. The settlement agreement has been provisionally accepted by the Commission.

The settlement resolves staff allegations that HP knowingly failed to report immediately to CPSC, as required by federal law, that certain lithium-ion battery packs contained a defect or created an unreasonable risk of serious injury or death. The lithium-ion battery packs can overheat, posing a fire and burn hazard to consumers. The packs were shipped with new HP Notebook computers, sold as accessories or provided as spare parts for various HP models.

CPSC staff alleges that by September 2007, HP knew of about 22 incidents associated with the lithium-ion battery packs. At least two of these incidents resulted in injuries to consumers. HP also was aware that at least one consumer apparently went to the hospital. HP did not receive any information on the consumer’s injuries or treatment, if any. CPSC staff also alleges that between March 2007 and April 2007, HP conducted a study, from which it obtained additional information about the lithium-ion battery packs.

HP did not notify the Commission about the incidents or the study until July 25, 2008. By that time, CPSC staff alleges that the firm was aware of at least 31 incidents involving the lithium-ion battery packs.

In October 2008, HP and CPSC announced a recall of about 32,000 lithium-ion battery packs. HP sold notebook computers for between $700 and $3,000 that contained the lithium-ion battery packs, as did computer and electronics stores nationwide and various Web retailers. Lithium-ion battery packs that were sold separately for use with the notebook computers retailed for between $100 and $160.

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 agreeing to the settlement, HP denies CPSC staff allegations that the lithium-ion battery packs (or the notebooks with which the packs were used) could create an unreasonable risk of serious injury or death, or that HP violated the reporting requirements of the Consumer Product Safety Act.

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