Polaris to Pay Nearly $1 Million for Reportedly Failing to Note Hazards with ATVs

January 18, 2005

The U.S. Consumer Product Safety Commission (CPSC) announced this week that it has provisionally accepted a settlement that imposes CPSC’s first civil penalty for reporting violations involving all-terrain vehicles (ATVs).

Polaris Industries Inc., of Medina, Minn., has agreed to pay a $950,000 penalty to settle allegations that the ATV manufacturer failed to timely inform CPSC of serious defects and hazards in certain models of the company’s ATVs.

CPSC conducted two investigations into the timeliness of Polaris’s reporting. In the first matter, Polaris manufactured and sold 13,600 Scrambler, Sport and Xplorer 400 model ATVs. The throttles on these ATVs can stick and prevent the machines from slowing down or stopping, leading to loss of control and crashes.

Between December 1998 and May 2000, Polaris reportedly learned of 88 reports of throttles sticking due to defects in the throttle control, including 19 crashes or other accidents. The company also had seven reports of injuries, including a dislocated hip, a broken shoulder, torn back muscles and scrapes and bruises. Prior to reporting these incidents to CPSC, the company allegedly made three engineering changes to the ATVs in an attempt to prevent the throttles from sticking. Polaris reported to CPSC in May 2000 and announced a recall in August 2000.

In the second matter, Polaris manufactured and sold 55,500 Xpedition, Trail Boss and Magnum 325 model ATVs. The oil lines on these ATVs blew off, disconnected or loosened, resulting in the spraying of hot pressurized oil. This presented the risk of fires, burns, other injuries and death.

Between March 1999 and February 2001, Polaris reportedly received nearly 1,450 reports of oil line blow-offs, disconnections and leaks resulting from the oil line defect. In 61 reports, the discharging oil caused smoke, fire, melting and accidents, and 42 of those 61 reports involved ATV fires or the surrounding area catching fire. Polaris received 18 reports of injuries, including second- and third-degree burns, scarring, bruises and scrapes.

Between February 2000 and January 2001, Polaris allegedly did extensive analyses and made four engineering changes to the defective ATVs without informing CPSC; and from May 2000 to January 2001, the company sent five alerts to its dealers about the oil line defects without telling the government. Polaris finally reported to CPSC in February 2001, a little more than a month after CPSC asked the company to report. Polaris announced a recall of the ATVs in April 2001.

Federal law requires manufacturers, retailers and distributors 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 risk of injury to the public, presents an unreasonable risk of serious injury or death, or violates a federal safety standard.

Although it agreed to pay a civil penalty, Polaris denies CPSC’s allegations and that it violated the law.

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