Daikin Agrees to Pay $8.5 Million Civil Penalty for Failure to Immediately Report PTACs that Posed a Fire Hazard

WASHINGTON, D.C. - The U.S. Consumer Product Safety Commission (CPSC) is announcing that Daikin Comfort Technologies Manufacturing, Inc., f/k/a Daikin Comfort Technologies Manufacturing, L.P., of Waller, Texas, has agreed to pay an $8.5 million civil penalty. The settlement, which has been provisionally accepted by CPSC, resolves CPSC's charges that Daikin knowingly failed to immediately report to CPSC, as required by law, that its Packaged Terminal Air Conditioners/Heat Pumps (PTACs) equipped with "DigiAir" modules contained a defect which could create a substantial product hazard and created an unreasonable risk of serious injury or death to consumers.

Between 2017 and 2023, Daikin received multiple warranty claims relating to the PTACs, over a dozen reports of fires, and one report of a smoke inhalation injury. Despite possessing information that reasonably supported the conclusion that the PTACs contained a defect which could create a substantial product hazard or created an unreasonable risk of serious injury or death, Daikin did not immediately report to the Commission.

The Commission and Daikin jointly announced a recall of the PTACs on August 3, 2023. The recall press release stated that the DigiAir module compressor in the PTACs can overheat, posing burn and fire hazards.

In addition to the $8.5 million civil penalty, the settlement agreement requires Daikin to appoint an Internal Compliance Monitor and maintain internal controls and procedures designed to ensure compliance with the Consumer Product Safety Act (CPSA), including enhancements to its compliance program. Daikin has also agreed to submit annual reports regarding its compliance program, internal controls, and internal audit of the effectiveness of compliance.

The Commission has provisionally accepted the settlement agreement, subject to public comment. Michael Evans, a Trial Attorney in the Division of Enforcement and Litigation, represented the Commission in this enforcement action.