[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27190-27192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11029]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 13-C0005]
Williams-Sonoma, 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
Williams- Sonoma, Inc., containing a civil penalty of $987,500, 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 May 24, 2013.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 13-C0005, Office of the
Secretary, Consumer Product Safety Commission, 4330 East West Highway,
Room 820, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Kelly M. Moore, Trial Attorney,
Division of Compliance, Office of the General Counsel, Consumer Product
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7447.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: May 6, 2013.
Todd A. Stevenson,
Secretary.
Settlement Agreement
1. In accordance with the Consumer Product Safety Act, 15 U.S.C.
2051-2089 (CPSA) and 16 CFR 1118.20, Williams-Sonoma, Inc. (WS), and
the United States Consumer Product Safety Commission (Commission),
through its staff (Staff), hereby enter into this Settlement Agreement
(Agreement). The Agreement, and the incorporated attached Order,
resolve Staff's charges set forth below.
The Parties
2. The Commission is an independent federal regulatory agency,
established pursuant to, and responsible for, the enforcement of the
CPSA, 15 U.S.C. 2051-2089. By executing the Agreement, the Staff is
acting on behalf of the Commission, pursuant to 16 CFR 1118.20(b). The
Commission issues the Order under the provisions of the CPSA.
3. WS is a corporation, organized and existing under the laws of
the State of Delaware, with its principal corporate
[[Page 27191]]
office located at 3250 Van Ness Avenue, San Francisco, CA 94109.
4. At all times relevant to this Agreement, Pottery Barn, Inc. was
a wholly-owned subsidiary of WS.
Staff Charges
5. Between 2003 and 2008, WS imported into the United States
approximately 30,000 wooden hammock stands (the Products) and
distributed them exclusively through Pottery Barn and PBteen catalogs
and Web sites, and Pottery Barn Outlet stores. The Products were sold
nationwide for approximately $300.
6. The Products are wooden hammock stands for outdoor use that are
held together by metal brackets. Cloth hammocks designed for one or
multiple users can be hooked to the steel eye bolts located on the
Product's vertical support beams. The Products are ``consumer
products'' ``distributed 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(a)(5), (8), and (11), and at all relevant times, WS was a
``manufacturer'' and ``retailer'' of those items, as such terms are
defined or used in sections 3(a) (11) and (13) of the CPSA, 15 U.S.C.
2052(a)(11) and (13).
7. The Products are defective because water and moisture can become
trapped in the metal brackets, which can cause the wooden beams to rot
inside the bracket. The Products were marketed for outdoor use, where
they would routinely be exposed to rain and other inclement weather.
Because the rotting was occurring inside the metal bracket, where it
was hidden from view, there sometimes was no outward indication to
consumers that the wood was rotting, until a consumer sat in the
hammock and the beams broke. This posed fall and laceration hazards to
consumers.
8. WS received notice of a Product failure as early as November
2004, when a consumer reported to WS that the vertical support beam of
the Product's wooden frame had snapped, causing her guest to fall to
the ground and sustain injury.
9. On or before October 28, 2006, the date by which WS received its
eighth incident report involving the Products,\1\ WS had obtained
sufficient information that reasonably supported the conclusion that
the Products contained a defect or possible defect that could create a
substantial product hazard or created an unreasonable risk of serious
injury or death. WS was required 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).
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\1\ At least one consumer was injured in each of the eight
incidents reported to WS through October 28, 2006; in one such
incident, two consumers reported injury. The incident report WS
received on October 28, 2006 included an account of the ninth
Product-related injury then known to WS.
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10. Despite having information regarding the Products' defect, WS
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).
11. WS did not file its Full Report with the Commission until
September 11, 2008. WS recalled the Products on October 1, 2008. By
that time, WS was aware of 45 incidents involving the Products.
12. In failing to inform the Commission about the Products
immediately, WS 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).
13. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, WS 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 Williams-Sonoma, Inc.
14. WS neither admits nor denies the charges set forth in
paragraphs 5 through 13 above, including but not limited to, the charge
that the Products contained a defect that could create a substantial
product hazard or create an unreasonable risk of serious injury or
death, and the contention that WS failed to notify the Commission in a
timely manner, in accordance with section 15(b) of the CPSA, 15 U.S.C.
2064(b).
Agreement of the Parties
15. Under the CPSA, the Commission has jurisdiction over the matter
involving the Products described herein and over WS.
16. In settlement of Staff's charges, and to avoid the cost,
distraction, delay, uncertainty, and inconvenience of protracted
litigation or other proceedings, WS shall pay a civil penalty in the
amount of nine hundred eighty-seven thousand five hundred dollars
($987,500) within twenty (20) calendar days after receiving service of
the Commission's final Order accepting the Agreement. The payment shall
be made by electronic wire transfer to the Commission via: http://www.pay.gov.
17. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by WS or a
determination by the Commission that WS violated the CPSA's reporting
requirements.
18. Following Staff's receipt of this Agreement executed on behalf
of WS, Staff shall promptly submit the Agreement to the Commission for
provisional acceptance. Promptly following 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 the Agreement is
published in the Federal Register, in accordance with 16 CFR
1118.20(f).
19. This Agreement is conditioned upon, and subject to, the
Commission's final acceptance, as set forth above, and it is subject to
the provisions of 16 CFR 1118.20(h). Upon the later of: (i)
Commission's final acceptance of this Agreement and service of the
accepted Agreement upon WS; and (ii) the date of issuance of the final
Order, this Agreement shall be in full force and effect and shall be
binding upon the parties.
20. Effective upon the later of: (i) The Commission's final
acceptance of the Agreement and service of the accepted Agreement upon
WS; and (ii) and the date of issuance of the final Order, for good and
valuable consideration, WS hereby expressly and irrevocably waives and
agrees not to assert any past, present, or future rights to the
following, in connection with the matter described in this Agreement:
(i) An administrative or judicial hearing; (ii) judicial review or
other challenge or contest of the Commission's actions; (iii) a
determination by the Commission of whether WS failed to comply with the
CPSA and the underlying regulations; (iv) a statement of findings of
fact and conclusions of law; and (v) any claims under the Equal Access
to Justice Act.
21. WS shall implement and maintain a compliance program designed
to ensure compliance with the safety statutes and regulations enforced
by the Commission 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
[[Page 27192]]
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 Staff upon request.
22. WS shall maintain and enforce a system of internal controls and
procedures designed to ensure that: (i) Information required to be
disclosed by WS 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 WS'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 WS's ability to record, process and report to the Commission in
accordance with applicable law.
23. Upon request of Staff, WS shall provide written documentation
of such improvements, processes, and controls, including, but not
limited to, the effective dates of such improvements, processes, and
controls. WS shall cooperate fully and truthfully with Staff and shall
make available all information, materials, and personnel deemed
necessary by Staff to evaluate WS's compliance with the terms of the
Agreement.
24. The parties acknowledge and agree that the Commission may make
public disclosure of the terms of the Agreement and the Order.
25. WS represents that the Agreement: (i) Is freely and voluntarily
entered into, without any degree of duress or compulsion whatsoever;
(ii) has been duly authorized; and (iii) constitutes the valid and
binding obligation of WS, enforceable against WS in accordance with its
terms. The individuals signing the Agreement on behalf of WS represent
and warrant that they are duly authorized by WS to execute the
Agreement.
26. The Commission signatories represent that they are signing the
Agreement in their official capacities and that they are authorized to
execute this Agreement.
27. The Agreement is governed by the laws of the United States.
28. The Agreement and the Order shall apply to, and be binding
upon, WS and each of its successors, transferees, and assigns, and a
violation of the Agreement or Order may subject WS, and each of its
successors, transferees and assigns, to appropriate legal action.
29. The Agreement and the Order constitute the complete agreement
between the parties on the subject matter contained therein.
30. The Agreement may be used in interpreting the Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and the Order may not be used to
vary or contradict their terms. For purposes of construction, the
Agreement shall be deemed to have been drafted by both of the parties
and shall not, therefore, be construed against any party for that
reason in any subsequent dispute.
31. The Agreement may not be waived, amended, modified, or
otherwise altered, except as in accordance with the provisions of 16
CFR 1118.20(h). The Agreement may be executed in counterparts.
32. If any provision of the Agreement or the Order is held to be
illegal, invalid, or unenforceable under present or future laws
effective during the terms of the Agreement and the Order, such
provision shall be fully severable. The balance of the Agreement and
the Order shall remain in full force and effect, unless the Commission
and WS agree in writing that severing the provision materially affects
the purpose of the Agreement and the Order.
Dated:-----------------------------------------------------------------
WILLIAMS-SONOMA, INC.
By:
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Julie P. Whalen,
Executive Vice President, Chief Financial Officer
Williams-Sonoma, Inc.
3250 Van Ness Avenue
San Francisco, CA 94109
Dated: 4/25/13
By:
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Eric A. Rubel,
Counsel to Williams Sonoma, Inc.
Arnold & Porter LLP
555 Twelfth Street NW.
Washington, DC 20004-1206
U.S. CONSUMER PRODUCT SAFETY COMMISSION
Stephanie Tsacoumis,
General Counsel
Mary B. Murphy,
Assistant General Counsel
Dated: 4/25/13
By:
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Kelly M. Moore,
Trial Attorney, Division of Compliance, Office of the General
Counsel
Order
Upon consideration of the Settlement Agreement entered into between
Williams-Sonoma, Inc. (WS), and the U.S. Consumer Product Safety
Commission (Commission), and the Commission having jurisdiction over
the subject matter and over WS, and it appearing that the Settlement
Agreement and the Order are in the public interest, it is:
Ordered that the Settlement Agreement be, and is, hereby, accepted;
and it is
further ordered that WS shall comply with the terms of the
Settlement Agreement and shall pay a civil penalty in the amount of
nine hundred eighty-seven thousand five hundred dollars ($987,500)
within twenty (20) days of service of the Commission's final Order
accepting the Settlement Agreement. The payment shall be made by
electronic wire transfer to the Commission via: http://www.pay.gov.
Upon the failure of WS to make the foregoing payment when due, interest
on the unpaid amount shall accrue and be paid by WS at the federal
legal rate of interest set forth at 28 U.S.C. 1961(a) and (b). If WS
fails to make such payment or to comply in full with any other
provision as set forth in the Settlement Agreement, such conduct will
be considered a violation of the Settlement Agreement and Order.
Provisionally accepted and provisional Order issued on the 3rd
day of May, 2013.
BY ORDER OF THE COMMISSION:
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Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission
[FR Doc. 2013-11029 Filed 5-8-13; 8:45 am]
BILLING CODE 6355-01-P