Federal Pacific Electric Company went out of business in the 1980s due to a combination of safety scandals, lawsuits, loss of UL listing, and financial problems stemming from its faulty Stab-Lok breaker design. Independent testing in the 1970s and 1980s revealed that Federal Pacific Stab-Lok breakers failed to trip in up to 60 percent of overload conditions, creating serious fire hazards in millions of homes where they were installed from the 1950s to 1980s. The Consumer Product Safety Commission investigated, and while it did not issue a formal recall, the company faced mounting lawsuits from homeowners and insurance companies over fires linked to its panels. Federal Pacific was also accused of fraudulent testing to obtain UL listing, with reports that it cheated on tests to get approval for breakers that did not actually meet safety standards. As a result, Underwriters Laboratories delisted many Federal Pacific products, and electrical inspectors began rejecting them. The combination of legal liability, loss of reputation, inability to sell products that were considered unsafe, and the cost of litigation forced Federal Pacific Electric to cease operations and go out of business by the mid-1980s, leaving behind millions of hazardous panels that electricians now recommend replacing.
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