Goodman hid PTAC fire risk for years, then lowballed its fire count — $5.55M penalty

Goodman's packaged terminal air conditioners and heat pumps — PTACs, the through-the-wall units in hotel rooms, schools and hospitals — sold under the Amana, Century, Comfort-Aire, Goodman and York International brands for $700 to $1,000. Units made from January 2007 to April 2008 carried improperly crimped power cords that could overheat and catch fire. The Justice Department's complaint said Goodman knew of the risk in 2008 and was receiving reports of PTACs smoking, overheating and catching fire.

The company's response stayed inside its own service network. In May 2011, after a fire at a New York lodging facility, Goodman replaced control boards and power cords on more than 100 PTACs there. In 2013, following two hotel fires in Indiana and Idaho, it swapped cords and boards on more than 335 units across seven hotels. It did not report the hazard to CPSC until November 26, 2013 — roughly two years after the New York fire — and when it did, it identified only three reports of overheating while sitting on scores of them.

Even after filing, Goodman failed to timely report six additional fires it learned about, waiting ten months or more on each. The public recall of about 233,500 units came in August 2014. In September 2016 the DOJ and CPSC jointly announced a complaint resolved the same day: a $5.55 million civil penalty, a compliance program, internal controls with a truthfulness standard, and liquidated damages if Goodman slipped — entered as a consent decree in federal court, with no admission of liability.

$5.55 million civil penalty by federal-court consent decree; about 233,500 PTAC units recalled in August 2014

The affected units sat in hotels, schools and hospitals — high-occupancy rooms where a cord fire at night risks far more than property, which is what CPSC Chairman Kaye said Goodman put at risk.

Quiet part-swaps at commercial clients were cheaper than a recall and attracted no headlines; hotels accept discreet fixes, so the channel hid the pattern from consumers and regulators.

Management apparently believed a report could be shaped rather than filed completely; the three-report disclosure reads like an attempt to minimize exposure instead of a full handover.

The per-fire calculus kept failing: each new hotel fire was handled as another service event, postponing the statutory 24-hour clock instead of starting it.

Understating the incident count while catching up on a late report turns a delay case into a credibility case. Regulators treat being misled as worse than being slow, and courts can add damages.

The recall covered about 233,500 PTACs across five brand names, with free replacement cords and, where damaged, free control boards; commercial owners were contacted directly. The consent decree — the product of a rare federal-court action by DOJ's Consumer Protection Branch alongside CPSC — required a compliance program, internal controls designed for timely, truthful and complete reporting, and liquidated damages for non-compliance. The DOJ framed it as a warning that reporting violations would be litigated, not just settled administratively; Goodman paid without admitting the allegations.