On April 18, 1974, at 3:08 p.m., Joseph A. Howell Jr. made a telephone call from his office in Richmond, Va., to the Consumer Product Safety Commission in Washington to report a defect in the Unitrol liquid petroleum gas water heater control made by his company, Robertshaw Controls Co.

During the hour-long conversation, Howell, the senior vice president and general counsel for Robertshaw, responded to a series of routine questions about the problem. He said that defective controls had caused explosions and fires resulting in burns and property damage, that the hazard was severe and that there had been injuries.

What Howell did not say in that phone conversation or in the follow-up letter he sent to the CPSC the next day--according to the CPSC--was that the faulty control had been linked to a number of fatalities and serious injuries.

The CPSC staff now contends that Robertshaw knew in April 1974 that approximately 47 deaths and 93 injuries had occurred in accidents involving the company's Unitrol controls. According to the CPSC, Robertshaw didn't provide those numbers to the agency until August 1980--six years later. And, the CPSC says, the company turned over the numbers only after the CPSC reopened its investigation.

Robertshaw's delayed disclosures are at the heart of a controversy that has erupted over the federal product safety law requiring companies to notify the CPSC of unsafe products and the agency's right to impose civil penalties against firms failing to comply with the law. The agency staff says that Robertshaw, a world-wide manufacturer of automatic energy controls and control systems for homes and for industry, filed misleading and incomplete information about the controls and should be fined the maximum civil penalty of $500,000.

"The company has a duty to report expeditiously incidents which indicate the presence of a serious hazard," said Commissioner Sam Zagoria. "Failure to do so makes it impossible to deal adequately with the thousands of other units that are in use by consumers."

Howell contends that Robertshaw has complied with the law.

"There was a full and complete notification of a very serious problem involving a problem last manufactured in 1957," Howell said.

This past week the dispute assumed new importance as the details of the Robertshaw case were aired before Congress, where committees in both the Senate and the House are considering the reauthorization of the CPSC, the size of its staff and budget and the extent of its administrative powers.

One of the most dramatic moments during the hearing was provided by Patrick A. Butcher, a 32-year-old Edgewater, Md., man who was critically burned in a 1980 flash fire in his basement. Butcher won a $25 million settlement from Robertshaw earlier this year in a case charging that the control device on his water heater failed to operate and started the fire that burned him over 85 percent of his body.

"On Aug. 20, 1980, I investigated a problem with the water heater in my home to find out why it had stopped producing hot water," Butcher said. He said he went to his basement, looked at the water heater and was suddenly enveloped in flames. "I spent five weeks in intensive care and the doctors weren't sure I would live," he said.

Butcher said that in preparing his lawsuit he had learned that Robertshaw was required to report product problems to the CPSC. "I don't feel Robertshaw gave the CPSC enough information, and I became concerned at how helpless CPSC was to act on the information it did have," Butcher said.

He urged the committee to "help the CPSC do its job."

An examination of the issues in the Robertshaw case offers a glimpse into the ways that corporations can oppose the CPSC on specific points of law if they choose to do so. The case also shows how companies work to try and mold new laws in Congress. And it demonstrates how the CPDC can be caught in a crunch between its mandate to protect consumers and its power to execute that mandate.

Based on interviews with officials of the commission and the company and with others who have played a role in this case, here is a summary:

About 312,500 Unitrol 110 and Unitrol 200 controls manufactured by Robertshaw from December 1954 through March 1957 were installed in LP water heaters nationwide. Each control had a retail value of $6 to $7. (The CPSC estimates that about 2,000 of the Unitrol 110 and 200 controls are still in use in homes and offices. Anyone who has such a control should contact the commission or the company for information and for replacement or retrofittings.)

Some of the controls can create a fire and explosion hazard by failing to stop the continuing flow of unburned gas to the heater's main burner when the control's automatic pilot function fails to operate as intended, the CPSC said.

The CPSC's first inkling of a problem came with Howell's 1974 phone call. According to the CPSC log of the conversation, Howell told compliance officer John Watkins that the problem had been discovered that same day during a company investigation of product liability claims arising after May 14, 1973.

The May date is important because it marked the official start of the CPSC as the federal agency responsible for protecting the public from unreasonable risks of injury posed by consumer products. Robertshaw contends that it didn't have to report any product problems that occurred prior to the agency's birth.

In his follow-up letter, dated April 19, 1974, Howell said, "After May 14, 1973, the company has been informed of one fatality and one injury possibly connected with the potential product hazard."

Robertshaw sent another letter to the CPSC on May 10, 1974, setting out additional information on the controls. The two letters and the telephone call apparently were intended to bring the company into compliance with the law.

But in July 1980 the CPSC, armed with new information from a third party, alleged that Robertshaw had willfully and knowingly filed inaccurate information in April 1974. The agency asked for a full account. Robertshaw responded the next month with a 12-page letter and a computer print out of liability claims and lawsuits involving persons injured in explosions caused by the Unitrol defect.

From that computer printout, the CPSC concluded that there had been 47 deaths and 93 serious injuries linked to the controls.

Two years later, on June 22, 1982, the CPSC staff filed an administrative complaint against the company for allegedly violating the Consumer Product Safety Act by filing incomplete and misleading information about the defect. The complaint asked for the maximum civil penalty of $500,000.

Since its inception, the CPSC has initiated such civil penalty actions fewer than 30 times. For the most part, the companies have paid their fines or negotiated a settlement. Corning Glass Works, for example, paid a $325,000 fine in 1977 for failing to report problems with its glass coffee pots.

But Robertshaw chose to fight rather than pay. And, in the first round, before an administrative law judge, Robertshaw won when the judge ruled that the CPSC didn't have the power to assess civil penalties.

That decision on Oct. 4, 1982, was appealed by the CPSC staff and argued before the full commission. On April 1, commissioners announced that the agency did have the authority to assess civil penalties administratively rather than seek them in the federal court. Robertshaw has indicated that it will appeal that decision, too.

Meantime, in a move that could bolster the CPSC's position, the congressional committees considering the agency's reauthorization added a section in their bills clarifying and strengthening the right of the CPSC to impose civil penalties.

But those congressional proposals are under attack from Robertshaw and two trade associations, the National Association of Manufacturers (NAM) and the National Electrical Manufacturers Association (NEMA).

Both NEMA--in which Robertshaw is an active member--and NAM have been lobbying the committees to drop the civil penalty language in the bills. The corporate groups contend that civil penalties should be assessed by the courts rather than the commission.

Consumer advocates reacted quickly. In a letter to Senate Consumer Subcommittee Chairman Robert Kasten, David Greenberg of the Consumer Federation of America charged that Robertshaw is "turning to Congress for a legislative bailout."

A final congressional decision is pending.