[Federal Register Volume 78, Number 42 (Monday, March 4, 2013)]
[Notices]
[Pages 14080-14082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04909]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 13-C0004]
Kolcraft Enterprises, Inc., Provisional Acceptance of a
Settlement Agreement and Order
AGENCY: Consumer Product Safety Commission.
ACTION: Notice
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SUMMARY: It is the policy of the Commission to publish settlements
which it provisionally accepts under the Consumer Product Safety Act in
the Federal Register in accordance with the terms of 16 CFR 1118.20(e).
Published below is a provisionally-accepted Settlement Agreement with
Kolcraft Enterprises, Inc., containing a civil penalty of $400,000.00,
within twenty (20) days of service of the Commission's final Order
accepting the Settlement Agreement.
DATES: Any interested person may ask the Commission not to accept this
agreement or otherwise comment on its contents by filing a written
request with the Office of the Secretary by March 19, 2013.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 13-C0004, Office of the
Secretary, Consumer Product Safety Commission, 4330 East West Highway,
Room 820, Bethesda, Maryland 20814-4408.
[[Page 14081]]
FOR FURTHER INFORMATION CONTACT: Richa Shyam Dasgupta, Trial Attorney,
Division of Compliance, Office of the General Counsel, Consumer Product
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7798.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: February 27, 2013.
Todd A. Stevenson,
Secretary.
Settlement Agreement and Order
1. In accordance with the Consumer Product Safety Act (CPSA), 15
U.S.C. 2051-2089, (CPSA), and 16 CFR 1118.20, Kolcraft Enterprises,
Inc. (Kolcraft) and staff (staff) of the United States Consumer Product
Safety Commission (Commission or CPSC) hereby enter into this
Settlement Agreement (Agreement). The Agreement and the attached Order
resolve staff's allegations set forth below.
The Parties
2. Staff is the staff of the Commission, an independent federal
regulatory agency established pursuant to, and responsible for,
enforcement of the CPSA.
3. Kolcraft is a privately-held company, organized and existing
under the laws of the state of Delaware, with its principal office
located in Chicago, IL.
4. Kolcraft is a small business as set forth in the Small Business
Administration guidelines regarding size of business.
Staff Allegations
5. Between 2000 and 2009, Kolcraft imported approximately 1 million
play yards (the ``Play Yards'') and distributed them nationwide through
major retailers and Internet sales.
6. The Play Yards are ``consumer products'' and, at all relevant
times, Kolcraft was a ``manufacturer'' of ``consumer products,'' of the
subject Play Yards, which were ``distribute[d] in commerce,'' as those
terms are defined or used in sections 3(a)(5), (8), and (11) of the
CPSA, 15 U.S.C. 2052(3)(a)(5), (8), and (11).
7. The Play Yards are defective because the side rail of a Play
Yard can fail to latch properly, and when a child pushes against the
rail, the rail can unlatch unexpectedly, posing a fall hazard to
children.
8. From 2000 through July 2009, Kolcraft received approximately 350
reports of Play Yards collapsing unexpectedly, including 21 incidents
that resulted in injuries to young children.
9. In July 2005, Kolcraft engaged failure analysis experts to
examine and test the latching system on the Play Yards. By August 2005,
these experts had identified the potential for false latching.
10. During 2006, Kolcraft made prospective improvements to the
warning labels, instruction sheets, and the side-rail latch to
eliminate false latching in future production of the Play Yards. None
of these improvements addressed the potential for false latching that
existed in the more than 880,000 Play Yards in commerce at the time.
11. Kolcraft waited until January 15, 2009, however, to report to
the CPSC regarding the Play Yards.
12. On July 8, 2009, Kolcraft, in cooperation with the CPSC,
announced a recall of the Play Yards.
13. Well before January 15, 2009, Kolcraft had obtained sufficient
information to reasonably support the conclusion that the Play Yards
contained a defect that could create a substantial product hazard, or
created an unreasonable risk of serious injury or death; yet, Kolcraft
failed to inform the Commission immediately of such defect or risk, as
required by sections 15(b)(3) and (4) of the CPSA, 15 U.S.C. 2064(b)(3)
and (4). In failing to inform the Commission immediately of the defect
or risk involving the Play Yards, Kolcraft knowingly violated section
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4), as the term ``knowingly''
is defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d).
14. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Kolcraft is
subject to civil penalties for its knowing failure to report, as
required under section 15(b) of the CPSA, 15 U.S.C. 2064(b).
Response of Kolcraft
15. The Firm denies staff's allegations that it knew that the
Subject Products contained a defect which could create a substantial
product hazard pursuant to section 15(a) of the CPSA, 15 U.S.C.
2064(a), and further denies that it knowingly violated the reporting
requirements of section 15(b) of the CPSA, 15 U.S.C. 2064(b).
Agreement of the Parties
16. Under the CPSA, the Commission has jurisdiction over this
matter and over Kolcraft.
17. The parties enter this Agreement for settlement purposes only.
The Agreement does not constitute an admission by Kolcraft or a
determination by the Commission that Kolcraft knowingly violated the
CPSA.
18. In settlement of staff's allegations, Kolcraft shall pay a
civil penalty in the amount of four hundred thousand dollars
($400,000.00) (Settlement Amount). The civil penalty shall be paid
within twenty (20) calendar days of service of the Commission's final
Order accepting the Agreement. The payment shall be made to the CPSC
via: www.pay.gov.
19. Upon provisional acceptance of the Agreement by the Commission,
the Agreement shall be placed on the public record and published in the
Federal Register, in accordance with the procedures set forth in 16 CFR
1118.20(e). If the Commission does not receive any written request not
to accept the Agreement within fifteen (15) calendar days, the
Agreement shall be deemed finally accepted on the 16th calendar day
after the date it is published in the Federal Register, in accordance
with 16 CFR 1118.20(f).
20. Upon the Commission's final acceptance of the Agreement and
issuance of the Order, Kolcraft knowingly, voluntarily, and completely
waives any rights it may have in this matter to the following: (a) An
administrative or judicial hearing; (b) judicial review or other
challenge or contest of the Commission's actions; (c) a determination
by the Commission of whether Kolcraft failed to comply with the CPSA
and the underlying regulations; (d) a statement of findings of fact and
conclusions of law; and (e) any claims under the Equal Access to
Justice Act.
21. Kolcraft shall maintain and enforce a system of internal
controls and procedures designed to ensure that: (i) Information
required to be disclosed by Kolcraft to the Commission is recorded,
processed and reported in accordance with applicable law; (ii) all
reporting made to the Commission is timely, truthful, complete and
accurate; and (iii) prompt disclosure is made to Kolcraft's management
of any significant deficiencies or material weaknesses in the design or
operation of such internal controls that are reasonably likely to
adversely affect in any material respect Kolcraft's ability to record,
process and report to the Commission in accordance with applicable law.
22. Upon request of Staff, Kolcraft shall provide written
documentation of such improvements, processes, and controls, including,
but not limited to, the effective dates of such improvements,
processes, and controls. Kolcraft shall cooperate fully and truthfully
with Staff and shall make available all information, materials, and
[[Page 14082]]
personnel deemed necessary by Staff to evaluate Kolcraft's compliance
with the terms of the Agreement.
23. Kolcraft shall implement and maintain a compliance program
designed to ensure compliance with the safety statutes and regulations
enforced by the CPSC that, at a minimum, contains the following
elements (i) written standards and policies; (ii) a mechanism for
confidential employee reporting of compliance-related questions or
concerns to either a compliance officer or to another senior manager
with authority to act as necessary; (iii) effective communication of
company compliance-related policies and procedures to all employees
through training programs or otherwise; (iv) senior manager
responsibility for compliance; (v) board oversight of compliance (if
applicable); and (vi) retention of all compliance-related records for
at least five (5) years and availability of such records to CPSC upon
request.
24. The Commission may publicize the terms of the Agreement and the
final Order.
25. The Agreement and the final Order shall apply to, and be
binding upon, Kolcraft, and each of its successors and/or assigns.
26. The Commission issues the final Order under the provisions of
the CPSA, and a violation of the final Order may subject Kolcraft, and
each of its successors and/or assigns, to appropriate legal action.
27. The Agreement may be used in interpreting the final Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and the Order may not be used to
vary or contradict the terms or the Agreement and the final Order. The
Agreement shall not be waived, amended, modified, or otherwise altered
without written agreement thereto, executed by the party against whom
such waiver, amendment, modification, or alteration is sought to be
enforced.
28. If any provision of the Agreement or the final Order is held to
be illegal, invalid, or unenforceable under present or future laws
effective during the terms of the Agreement and the final Order, such
provision shall be fully severable. The balance of the Agreement and
the final Order shall remain in full force and effect, unless the
Commission and Kolcraft agree that severing the provision materially
affects the purpose of the Agreement and final Order.
29. This Agreement may be signed in counterparts.
Dated: February 25, 2013.
Kolcraft Enterprises, Inc.
By:--------------------------------------------------------------------
Thomas Koltun,
President, Kolcraft Enterprises, Inc.
Dated: February 26, 2013.
By:--------------------------------------------------------------------
Erika Z. Jones, Esq.,
Counsel to Kolcraft Enterprises, Inc., Mayer Brown LLP, Washington,
DC
U.S. Consumer Product Safety Commission Staff
Stephanie Tsacoumis,
General Counsel.
Mary B. Murphy,
Assistant General Counsel, Divisions of Compliance and Import
Surveillance.
Dated: February 27, 2013.
By:--------------------------------------------------------------------
Richa Shyam Dasgupta,
Trial Attorney, Division of Compliance, Office of the General
Counsel.
Order
Upon consideration of the Agreement entered into between Kolcraft
Enterprises, Inc. (``Kolcraft''), and U.S. Consumer Product Safety
Commission (Commission) staff, and the Commission having jurisdiction
over the subject matter and over Kolcraft, and it appearing that the
Agreement and the Order are in the public interest, it is
Ordered that the Agreement be, and hereby, is accepted; and it is
Further ordered, that Kolcraft shall pay a civil penalty in the
total amount of four hundred thousand dollars ($400,000.00), paid
within twenty (20) days of service of the Commission's Order upon
counsel for Kolcraft. The payments shall be made electronically to the
CPSC via: www.pay.gov. Upon the failure of Kolcraft to make the
foregoing payment when due, interest on the unpaid amount shall accrue
and be paid by Kolcraft at the federal legal rate of interest set forth
at 28 U.S.C. 1961(a) and (b). If Kolcraft fails to make such payment or
to comply in full with any other provision as set forth in the
Agreement, such conduct will be considered a violation of this
Agreement and Order.
Provisionally accepted and provisional Order issued on the 27th
day of February 2013.
By order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 2013-04909 Filed 3-1-13; 8:45 am]
BILLING CODE 6355-01-P