Rayovac 2010 Annual Report Download - page 38

We are also subject to proceedings related to our disposal of industrial and hazardous material at off-site
disposal locations or similar disposals made by other parties for which we are responsible as a result of our
relationship with such other parties. These proceedings are under CERCLA or similar state or foreign jurisdiction
laws that hold persons who “arranged for” the disposal or treatment of such substances strictly liable for costs
incurred in responding to the release or threatened release of hazardous substances from such sites, regardless of
fault or the lawfulness of the original disposal. Liability under CERCLA is typically joint and several, meaning
that a liable party may be responsible for all of the costs incurred in investigating and remediating contamination
at a site. We occasionally are identified by federal or state governmental agencies as being a potentially
responsible party for response actions contemplated at an off-site facility. At the existing sites where we have
been notified of our status as a potentially responsible party, it is either premature to determine if our potential
liability, if any, will be material or we do not believe that our liability, if any, will be material. We may be named
as a potentially responsible party under CERCLA or similar state or foreign jurisdiction laws in the future for
other sites not currently known to us, and the costs and liabilities associated with these sites may have a material
adverse effect on our business, financial condition and results of operations.
Compliance with various public health, consumer protection and other regulations applicable to our
products and facilities could increase our cost of doing business and expose us to additional requirements
with which we may be unable to comply.
Certain of our products sold through, and facilities operated under, each of our business segments are
regulated by the EPA, the FDA or other federal consumer protection and product safety agencies and are subject
to the regulations such agencies enforce, as well as by similar state, foreign and multinational agencies and
regulations. For example, in the U.S., all products containing pesticides must be registered with the EPA and, in
many cases, similar state and foreign agencies before they can be manufactured or sold. Our inability to obtain,
or the cancellation of, any registration could have an adverse effect on our business, financial condition and
results of operations. The severity of the effect would depend on which products were involved, whether another
product could be substituted and whether our competitors were similarly affected. We attempt to anticipate
regulatory developments and maintain registrations of, and access to, substitute chemicals and other ingredients,
but we may not always be able to avoid or minimize these risks.
As a distributor of consumer products in the U.S., certain of our products are also subject to the Consumer
Product Safety Act, which empowers the U.S. Consumer Product Safety Commission (the “Consumer
Commission”) to exclude from the market products that are found to be unsafe or hazardous. Under certain
circumstances, the Consumer Commission could require us to repair, replace or refund the purchase price of one
or more of our products, or we may voluntarily do so. For example, Russell Hobbs, in cooperation with the
Consumer Commission, voluntarily recalled approximately 9,800 units of a thermal coffeemaker sold under the
Black & Decker brand in August 2009 and approximately 584,000 coffeemakers in June 2009. Any additional
repurchases or recalls of our products could be costly to us and could damage the reputation or the value of our
brands. If we are required to remove, or we voluntarily remove our products from the market, our reputation or
brands could be tarnished and we may have large quantities of finished products that could not be sold.
Furthermore, failure to timely notify the Consumer Commission of a potential safety hazard can result in
significant fines being assessed against us. Additionally, laws regulating certain consumer products exist in some
states, as well as in other countries in which we sell our products, and more restrictive laws and regulations may
be adopted in the future.
The FQPA established a standard for food-use pesticides, which is that a reasonable certainty of no harm
will result from the cumulative effect of pesticide exposures. Under the FQPA, the EPA is evaluating the
cumulative effects from dietary and non-dietary exposures to pesticides. The pesticides in certain of our products
that are sold through the Home and Garden Business continue to be evaluated by the EPA as part of this program.
It is possible that the EPA or a third party active ingredient registrant may decide that a pesticide we use in our
products will be limited or made unavailable to us. We cannot predict the outcome or the severity of the effect of
the EPA’s continuing evaluations of active ingredients used in our products.
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