Companies have a duty not to put hazardous products into the marketplace.
The vast majority of companies are responsible and accomplish exactly that. One thing that I noted as I read the article was the mislabeling. That is a big part of whether or not a product is hazardous. Wood chippers, for instance, are very obviously harmful products if misused. If, for instance, you stand on the loading bed of a running wood chipper and kick brush into it while a truck is towing the chipper down a road (3 HUGE no-no's in the user manual), then it is not the company's responsibility if all your family has to bury is a sponge.
Material Safety Data Sheets provide the expected results of human exposure to any given substance, from complex petrochemicals down to water. From the article, it looks like those were ignored by the manufacturer. That is a huge problem.
As for the recall, it was an uninsured loss (almost certainly), so no one stepped forward with the money to pay for it. Everyone drug their heels to get the other guy to pay for it, and more people got hurt. Bodily injuries are very insurable, and these folks all have actionable causes against Home Depot and the manufacturer, along with anyone else involved. It's interesting (to me) that Home Depot has a notoriously competent risk management department and that they didn't react better to this, especially given that it seems their name appeared on the product.
There are a number of product liability attorney's salivating over this. The ignored recall just adds to the projected payouts here.
In terms of government involvement, I think that the CPSC needs to be better funded, but that the first line of responsibility should still lie with either the manufacturer or importer. In my world of insurance (and this is very very close to what I do), importers are viewed as manufacturers unless a series of very strict tests are met. As an importer, you need to know whether or not the product you are bringing in is dangerous and what is in it. Not bothering to find out (I'm looking at you RC2) is just moronic, especially when the tests to do so are generally cheap.
I do not think that it is feasible for the CPSC to test every product in the US, and almost all testing, especially the best quality testing, is done by independent agencies (UL) or related-industry agencies (the Insurance Industry crash tests). Depending on the government to test and monitor every single consumer product, though, isn't such a good idea, although they should have the ability to follow through better than they did.
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"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." - B. Franklin
"There ought to be limits to freedom." - George W. Bush
"We have met the enemy and he is us." - Pogo
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