[Federal Register Volume 80, Number 159 (Tuesday, August 18, 2015)]
[Notices]
[Pages 49991-49994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20332]
=======================================================================
-----------------------------------------------------------------------
CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 15-C0006]
Johnson Health Tech Co. Ltd. and Johnson Health Tech North
America, Inc., Provisional Acceptance of a Settlement Agreement and
Order
AGENCY: Consumer Product Safety Commission.
ACTION: Notice.
-----------------------------------------------------------------------
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
Johnson Health Tech Co. Ltd. and Johnson Health Tech North America,
Inc. containing a civil penalty in the amount of three million dollars
($3,000,000), within thirty (30) days of service of the Commission's
final Order accepting the Settlement Agreement.\1\
---------------------------------------------------------------------------
\1\ The Commission voted (3-2) to provisionally accept the
Settlement Agreement and Order regarding Johnson Health Tech Co.,
Ltd. and Johnson Health Tech North America, Inc. Chairman Kaye,
Commissioner Adler and Commissioner Robinson voted to provisionally
accept the Settlement Agreement and Order. Commissioner Buerkle and
Commissioner Mohorovic voted to reject the Settlement Agreement and
Order.
---------------------------------------------------------------------------
[[Page 49992]]
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 September 2, 2015.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 15-C0006 Office of the
Secretary, Consumer Product Safety Commission, 4330 East West Highway,
Room 820, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Gregory M. Reyes, Trial Attorney,
Office of the General Counsel, Division of Compliance, Consumer Product
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7220.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: August 13, 2015.
Todd A. Stevenson,
Secretary.
United States Of America Consumer Product Safety Commission
In the Matter of: JOHNSON HEALTH TECH CO. LTD. and JOHNSON HEALTH
TECH NORTH AMERICA, INC.
CPSC Docket No.: 15-C0006
Settlement Agreement
1. In accordance with the Consumer Product Safety Act, 15 U.S.C.
2051-2089 (``CPSA'') and 16 CFR 1118.20, Johnson Health Tech Co. Ltd.
(``JHT'') and Johnson Health Tech North America, Inc. (``JHTNA'')
(collectively, ``Johnson Health Tech''), and the United States Consumer
Product Safety Commission (``Commission''), through its 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, 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. JHT is a Taiwanese corporation with its principal office located
at #999, Sec. 2, DongDa Rd., Ta-Ya Dist. Taichung City, 428, Taiwan.
4. JHTNA is a corporation, organized and existing under the laws of
the state of Wisconsin, with its principal place of business in Cottage
Grove, Wisconsin.
Staff Charges
5. Between September 2011 and December 2012, JHTNA imported and
sold approximately 3,025 Matrix Fitness Ascent Trainers and Elliptical
Trainers (``Trainers'') in the United States. JHT manufactured the
Trainers.
6. The Trainers are a ``consumer product,'' ``distributed in
commerce,'' as those terms are defined or used in sections 3(a)(5) and
(8) of the CPSA, 15 U.S.C. 2052(a)(5) and (8). Johnson Health Tech was
a ``manufacturer'' and ``retailer'' of the Trainers, as such terms are
defined in sections 3(a)(11) and (13) of the CPSA, 15 U.S.C.
2052(a)(11) and (13).
7. The Trainers contain a defect which could create a substantial
product hazard and create an unreasonable risk of serious injury or
death because moisture from perspiration or cleaning liquids can build
up in the Trainers' power socket, causing a short circuit. This poses a
fire hazard.
8. Between March 2012 and October 2013, Johnson Health Tech
received incident reports of smoking, sparking, fire, and melted power
components involving the Trainers. No property damage or injuries were
reported.
9. In response to these incident reports, Johnson Health Tech
implemented two design changes to remedy the defect and unreasonable
risk of serious injury or death associated with the Trainers.
10. Despite having obtained information that the Trainers contained
a defect or created an unreasonable risk, Johnson Health Tech did not
notify 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. In failing to inform the Commission immediately about the
Trainers, Johnson Health Tech 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).
12. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Johnson
Health Tech is subject to civil penalties for its knowing violation of
section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
Response of Johnson Health Tech
13. This agreement does not constitute an admission by Johnson
Health Tech to the staff's charges set forth in paragraphs 5 through 12
above, including, but not limited to, the charge that the Trainers
contained a defect that could create a substantial product hazard or
created an unreasonable risk of serious injury or death; that Johnson
Health Tech failed to notify the Commission in a timely manner, in
accordance with Section 15(b) of the CPSA, 15 U.S.C. 2064(b); and that
there was any ``knowing'' violation of the CPSA as that term is defined
in 15 U.S.C. 2069(d).
14. Johnson Health Tech enters into this Agreement to settle this
matter without the delay and expense of litigation. Johnson Health Tech
enters into this Agreement and agrees to pay the amount referenced
below in compromise of the staff's charges.
15. JHTNA voluntarily notified the Commission in connection with
the Trainers. JHTNA is not aware of any report of injury or property
damage associated with the Trainers and reported issue but carried out
a voluntary recall in cooperation with the Commission.
16. At all relevant times, JHTNA had a product safety compliance
program, including dedicated quality control/product safety personnel
and appropriate product safety testing.
Agreement of the Parties
17. Under the CPSA, the Commission has jurisdiction over the matter
involving the Trainers and over JHTNA. JHT has agreed to a limited
waiver of jurisdictional defenses solely for the purpose of entering
into this Settlement Agreement.
18. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Johnson Health
Tech or a determination by the Commission that Johnson Health Tech
violated the CPSA's reporting requirements.
19. In settlement of staff's charges, and to avoid the cost,
distraction, delay, uncertainty, and inconvenience of protracted
litigation or other proceedings, Johnson Health Tech shall pay a civil
penalty in the amount of three million dollars ($3,000,000) within
thirty (30) calendar days after receiving service of the Commission's
final Order accepting the Agreement. All payments to be made under the
Agreement shall constitute debts owing to the United States and shall
be made by electronic wire transfer to the United States via: http://www.pay.gov for allocation to and credit against the payment
obligations of Johnson Health Tech under this Agreement. Failure to
make such payment by the date
[[Page 49993]]
specified in the Commission's final Order shall constitute Default.
20. All unpaid amounts, if any, due and owing under the Agreement
shall constitute a debt due and immediately owing by Johnson Health
Tech to the United States, and interest shall accrue and be paid by
Johnson Health Tech at the federal legal rate of interest set forth at
28 U.S.C. 1961(a) and (b) from the date of Default until all amounts
due have been paid in full (hereinafter ``Default Payment Amount'' and
``Default Interest Balance''). Johnson Health Tech shall consent to a
Consent Judgment in the amount of the Default Payment Amount and
Default Interest Balance, and the United States, at its sole option,
may collect the entire Default Payment Amount and Default Interest
Balance or exercise any other rights granted by law or in equity,
including but not limited to referring such matters for private
collection, and Johnson Health Tech agrees not to contest, and hereby
waives and discharges any defenses to, any collection action undertaken
by the United States or its agents or contractors pursuant to this
paragraph. Johnson Health Tech shall pay the United States all
reasonable costs of collection and enforcement under this paragraph,
respectively, including reasonable attorney's fees and expenses.
21. After staff receives this Agreement executed on behalf of
Johnson Health Tech, 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).
22. 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 Johnson Health Tech, 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.
23. Effective upon the later of: (i) The Commission's final
acceptance of the Agreement and service of the accepted Agreement upon
Johnson Health Tech, and (ii) and the date of issuance of the final
Order, for good and valuable consideration, Johnson Health Tech 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 Johnson Health Tech 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.
24. JHTNA has, and shall maintain, a program designed to ensure
compliance with the CPSA with respect to any consumer product imported,
manufactured, distributed, or sold by JHTNA. This program contains, or
will be modified to include, the following elements:
a. written standards and policies;
b. written procedures that provide for the appropriate forwarding
to compliance personnel and the product hazard incident review
committee of all information that may relate to, or impact, CPSA
compliance including all reports and complaints involving consumer
products, whether an injury is referenced or not;
c. 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;
d. effective communication of company compliance-related policies
and procedures regarding the CPSA to all applicable employees through
training programs or otherwise;
e. JHTNA senior management responsibility for CPSA compliance and
for violations of the statutes and regulations enforced by the
Commission;
f. board oversight of CPSA compliance; and
g. retention of all CPSA compliance-related records for at least
five (5) years, and availability of such records to staff upon
reasonable request.
25. JHTNA shall implement, maintain, and enforce a system of
internal controls and procedures designed to ensure that, with respect
to all consumer products imported, manufactured, distributed, or sold
by JHTNA:
a. information required to be disclosed by JHTNA to the Commission
is recorded, processed, and reported in accordance with applicable law;
b. all reporting made to the Commission is timely, truthful,
complete, accurate, and in accordance with applicable law; and
c. prompt disclosure is made to JHTNA's management of any
significant deficiencies or material weaknesses in the design or
operation of such internal controls that are reasonably likely to
affect adversely, in any material respect, JHTNA's ability to record,
process, and report to the Commission in accordance with applicable
law.
26. Upon reasonable request of staff, JHTNA shall provide written
documentation of its internal controls and procedures, including, but
not limited to, the effective dates of the procedures and improvements
thereto. JHTNA shall cooperate fully and truthfully with staff and
shall make available all non-privileged information and materials, and
personnel deemed necessary by staff to evaluate JHTNA's compliance with
the terms of the Agreement.
27. The parties acknowledge and agree that the Commission may
publicize the terms of the Agreement and the Order.
28. Johnson Health Tech represents that the Agreement: (i) Is
entered into freely and voluntarily, without any degree of duress or
compulsion whatsoever; (ii) has been duly authorized; and (iii)
constitutes the valid and binding obligation of Johnson Health Tech,
enforceable against Johnson Health Tech in accordance with its terms.
Johnson Health Tech will not directly or indirectly receive any
reimbursement, indemnification, insurance-related payment, or other
payment in connection with the civil penalty to be paid by Johnson
Health Tech pursuant to the Agreement and Order. The individuals
signing the Agreement on behalf of Johnson Health Tech represent and
warrant that they are duly authorized by Johnson Health Tech to execute
the Agreement.
29. The signatories represent that they are authorized to execute
this Agreement.
30. The Agreement is governed by the laws of the United States.
31. The Agreement and the Order shall apply to, and be binding
upon, Johnson Health Tech and each of its
[[Page 49994]]
successors, transferees, and assigns, and a violation of the Agreement
or Order may subject Johnson Health Tech, and each of its successors,
transferees, and assigns, to appropriate legal action.
32. The Agreement and the Order constitute the complete agreement
between the parties on the subject matter contained therein.
33. 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.
34. 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.
35. 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 Johnson Health Tech agree in writing that severing the provision
materially affects the purpose of the Agreement and the Order.
Johnson Health Tech Co. LTD.
Dated: July 31, 2015
By:--------------------------------------------------------------------
Jason Lo
Chief Executive Officer
Johnson Health Tech Co. Ltd.
#999, Sec. 2, DongDa Rd., Ta-Ya Dist.
Taichung City, 428, Taiwan
Johnson Health Tech North America, Inc.
Dated: July 31, 2015
By:--------------------------------------------------------------------
Nathan Pyles
President
Johnson Health Tech North America, Inc.
1600 Landmark Drive
Cottage Grove, WI 53527
Dated: July 29, 2015
By:--------------------------------------------------------------------
Matthew R. Howsare
Counsel to Johnson Health Tech North America, Inc.
Mintz Levin
701 Pennsylvania Avenue NW, Suite 900
Washington, DC 20004
U.S. Consumer Product Safety Commission
Stephanie Tsacoumis
General Counsel
Mary T. Boyle
Deputy General Counsel
Mary B. Murphy
Assistant General Counsel
Dated: July 31, 2015
By:--------------------------------------------------------------------
Gregory M. Reyes
Trial Attorney
Division of Compliance
Office of the General Counsel
United States of America Consumer Product Safety Commission
In the Matter of: Johnson Health Tech Co. LTD. and Johnson Health
Tech North America, Inc.
CPSC Docket No.: 15-C0006
Order
Upon consideration of the Settlement Agreement entered into between
Johnson Health Tech Co. Ltd. and Johnson Health Tech North America,
Inc. (``Johnson Health Tech''), and the U.S. Consumer Product Safety
Commission (``Commission''), and the Commission having jurisdiction
over the subject matter and over Johnson Health Tech, 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 Johnson Health Tech shall comply with the
terms of the Settlement Agreement and shall pay a civil penalty in the
amount of three million dollars ($3,000,000) within thirty (30) days
after 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 Johnson Health
Tech to make the foregoing payment when due, interest on the unpaid
amount shall accrue and be paid by Johnson Health Tech at the federal
legal rate of interest set forth at 28 U.S.C. 1961(a) and (b). If
Johnson Health Tech fails to make such payment or to comply in full
with any other provision of the Settlement Agreement, such conduct will
be considered a violation of the Settlement Agreement and Order.
Provisionally accepted and provisional Order issued on the 13th day
of August, 2015.
By Order of the Commission:
-----------------------------------------------------------------------
Todd A. Stevenson, Secretary
U.S. Consumer Product Safety Commission
[FR Doc. 2015-20332 Filed 8-17-15; 8:45 am]
BILLING CODE 6355-01-P