[Federal Register Volume 82, Number 71 (Friday, April 14, 2017)]
[Notices]
[Pages 17979-17982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07557]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 17-C0003]
The Middleby Corporation and Viking Range LLC, 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 the Consumer
Product Safety Commission's regulations. Published below is a
provisionally-accepted Settlement Agreement with The Middleby
Corporation and Viking Range LLC, containing a civil penalty in the
amount of four million, six hundred and fifty thousand dollars
($4,650,000), within thirty (30) 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 1, 2017.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 17-C0003, Office of the
Secretary, Consumer Product Safety Commission, 4330 East-West Highway,
Room 820, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Leah Wade, Trial Attorney, Division of
Compliance, Office of the General Counsel, Consumer Product Safety
Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408;
telephone (301) 504-7225.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.\1\
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\1\ The Commission voted (4-1) to provisionally accept the
Settlement Agreement and Order regarding The Middleby Corporation
and Viking Range, LLC. Commissioner Kaye, Commissioner Adler,
Commissioner Robinson and Commissioner Mohorovic voted to
provisionally accept the Settlement Agreement and Order. Acting
Chairman Buerkle voted to take other action as follows:
Provisionally accept the attached Settlement Agreement and Order
with an amendment so as to reduce the penalty amount to $2.0
million.
Dated: April 11, 2017.
Todd A. Stevenson,
Secretary.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of:
THE MIDDLEBY CORPORATION
and
VIKING RANGE, LLC
CPSC Docket No.: 17-C0003
SETTLEMENT AGREEMENT
1. In accordance with the Consumer Product Safety Act, 15 U.S.C.
2051-2089 (``CPSA'') and 16 CFR 1118.20, The Middleby Corporation and
Viking Range, LLC, 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. Viking Range, LLC is a company, organized and existing under the
laws of the state of Delaware, with its principal place of business in
Greenwood, MS.
4. Viking Range, LLC is a wholly owned subsidiary of The Middleby
Corporation, a corporation, organized and existing under the laws of
the state of Delaware, with its principal place of business in Elgin,
IL. The Middleby Corporation acquired Viking from its former
shareholders on December 31, 2012. With respect to all conduct
occurring after December 31, 2012, as well as all ongoing commitments,
the term ``Viking'' used herein refers both to The Middleby Corporation
and Viking Range, LLC.
STAFF CHARGES
5. Between July 2007 and July 2014, Viking manufactured and offered
for sale in the United States approximately 52,000 freestanding
30, 36, 48 and 60 Gas
Ranges under the model families VGIC, VGCC, VGSC (``Ranges'').
6. The Ranges are a ``consumer product,'' ``distribut[ed] 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). Viking is a
``manufacturer'' of the Ranges, as such term is defined in section
3(a)(11) of the CPSA, 15 U.S.C. 2052(a)(11).
7. The Ranges contain a defect which could create a substantial
product hazard and create an unreasonable risk of serious injury
because the Ranges can turn on spontaneously and cannot be
[[Page 17980]]
turned off using the control knobs, resulting in extreme surface
temperatures that pose a burn hazard to consumers.
8. Between June 2008 and July 2014, Viking received 170 incident
reports of Ranges turning on spontaneously, including reports from two
consumers who were unable to turn off one of the Ranges using the
controls and were then burned while attempting to disconnect the power
source. Viking also received five reports that the Ranges had
spontaneously turned on and caused property damage to the surrounding
areas, such as the backsplash. Several consumers called 911 for
assistance when they discovered that the Ranges had spontaneously
turned on and could not be turned off or disconnected.
9. After receiving a number of reports related to the Ranges,
Viking collected and tested Ranges, and developed a repair for the
Ranges. Viking also issued numerous engineering change orders and
technical bulletins identifying the defect and providing instructions
on how to conduct the repair.
10. Despite having information reasonably supporting the conclusion
that the Ranges contained a defect which could create a substantial
product hazard and created an unreasonable risk of serious injury or
death, Viking 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), in violation of section 19(a)(4) of the
CPSA, 15 U.S.C. 2068(a)(4). Instead, Viking waited until July 2, 2014
to file a Full Report with the Commission under 15 U.S.C. 2064(b).
11. Viking and the Commission jointly announced a recall of the
Ranges on May 21, 2015.
12. Because the information in Viking's possession constituted
actual and presumed knowledge, Viking 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, Viking 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 VIKING
14. Viking's settlement of this matter does not constitute an
admission of staff's charges set forth in paragraphs 5 through 13
above.
15. In July 2014, Viking notified the Commission pursuant to
section 15(b) of the CPSA, 15 U.S.C. 2064(b), concerning Viking's
receipt of complaints and incident reports that the Ranges could self-
start with the knobs in the off position if a significant amount of
liquid from boil-overs, spills, or cleaning leaked inside the Ranges
and pooled near the Ranges' electronic thermostats.
16. In May 2015, in conjunction with the CPSC, Viking voluntarily
announced a recall of all models of the Ranges that contained the
design defect, regardless of whether Viking had received any complaints
or incident reports related to those models.
17. Viking recognizes that product safety is fundamental to sound
and ethical business practice, to the integrity of the Viking brand,
and to Viking's responsibility as a producer of quality consumer goods.
Since The Middleby Corporation's acquisition of Viking Range, LLC,
Viking has significantly increased its focus on consumer safety,
including by implementing a robust Product Safety Compliance Program
developed and overseen by The Middleby Corporation to establish,
control and verify safe product design and prompt reporting of product
safety defects to regulatory authorities.
AGREEMENT OF THE PARTIES
18. Under the CPSA, the Commission has jurisdiction over the matter
involving the Ranges and over the parties.
19. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Viking, or a
determination by the Commission, that Viking violated the CPSA's
reporting requirements.
20. In settlement of staff's charges, and to avoid the cost,
distraction, delay, uncertainty, and inconvenience of protracted
litigation or other proceedings, Viking shall pay a civil penalty in
the amount of four million, six hundred and fifty thousand dollars
($4,650,000) 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 Viking under this Agreement.
Failure to make such payment by the date specified in the Commission's
final Order shall constitute Default.
21. All unpaid amounts, if any, due and owing under the Agreement,
shall constitute a debt due and immediately owing by Viking to the
United States; and interest shall accrue and be paid by Viking 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''). Viking 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 Viking 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. Viking shall pay the United States all reasonable
costs of collection and enforcement under this paragraph, respectively,
including reasonable attorney's fees and expenses.
22. After staff receives this Agreement executed on behalf of
Viking, 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 C.F.R. 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 C.F.R.
1118.20(f).
23. 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 C.F.R. 1118.20(h). Upon the later of: (i)
Commission's final acceptance of this Agreement and service of the
accepted Agreement upon Viking, 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.
24. Effective upon the later of: (i) the Commission's final
acceptance of the Agreement and service of the accepted Agreement upon
Viking, and (ii) and the date of issuance of the final Order, for good
and valuable consideration, Viking 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
[[Page 17981]]
determination by the Commission of whether Viking 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.
25. Viking shall maintain a compliance program designed to ensure
compliance with the CPSA with respect to any consumer product imported,
manufactured, distributed or sold by Viking, and which shall contain
the following elements: (i) written standards, policies and procedures,
including those designed to ensure that information that may relate to
or impact CPSA compliance (including information obtained by quality
control personnel) is conveyed effectively to personnel responsible for
CPSA compliance, whether or not an injury is referenced; (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
regarding the CPSA to all applicable employees through training
programs or otherwise; (iv) Viking's senior management responsibility
for, and general board oversight of, CPSA compliance; (v) retention of
all CPSA compliance-related records for at least five (5) years, and
availability of such records to staff upon request; and (vi) a written
standard, policy or procedure designed to ensure that the Firm shall
seek to include a provision in any private protective order or
settlement that specifically allows for disclosure of relevant consumer
product safety information to the Commission and other applicable
authorities.
26. Viking shall 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 Viking: (i)
information required to be disclosed by Viking to the Commission is
recorded, processed and reported in accordance with applicable law;
(ii) all reporting made to the Commission is timely, truthful,
complete, accurate and in accordance with applicable law; and (iii)
prompt disclosure is made to Viking'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, Viking's ability to record, process and report to
the Commission in accordance with applicable law.
27. Upon reasonable request of staff, Viking shall provide written
documentation of its internal controls and procedures, including, but
not limited to, the effective dates of the procedures and improvements
thereto. Viking 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 Viking's compliance
with the terms of the Agreement.
28. The parties acknowledge and agree that the Commission may
publicize the terms of the Agreement and the Order.
29. Viking 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 Viking, enforceable against Viking in
accordance with its terms. Viking will not directly or indirectly
receive any reimbursement, indemnification, insurance-related payment,
or other payment for the civil penalty to be paid pursuant to the
Agreement and Order, except as ordered in Middleby Marshall Inc. v.
Carl., No. N15C-10-249 (Del. Super. Ct.), or as memorialized in a
written settlement agreement signed by the parties to that case. The
individuals signing the Agreement on behalf of Viking represent and
warrant that they are duly authorized by Viking to execute the
Agreement.
30. The signatories represent that they are authorized to execute
this Agreement.
31. The Agreement is governed by the laws of the United States.
32. The Agreement and the Order shall apply to, and be binding
upon, Viking and each of its successors, transferees, and assigns; and
a violation of the Agreement or Order may subject Viking, and each of
its successors, transferees, and assigns, to appropriate legal action.
33. The Agreement and the Order constitute the complete agreement
between the parties on the subject matter contained therein.
34. 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.
35. The Agreement may not be waived, amended, modified, or
otherwise altered, except as in accordance with the provisions of 16
C.F.R. 1118.20(h). The Agreement may be executed in counterparts.
36. 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 Viking agree in writing that severing the provision materially
affects the purpose of the Agreement and the Order.
(continued on next page)
THE MIDDLEBY CORPORATION and VIKING RANGE, LLC
Dated: March 29, 2017
By:--------------------------------------------------------------------
The Middleby Corporation and Viking Range, LLC
Dated: March 29, 2017
By:--------------------------------------------------------------------
Counsel to The Middleby Corporation and Viking Range, LLC
U.S. CONSUMER PRODUCT SAFETY COMMISSION
Mary T. Boyle,
General Counsel.
Mary B. Murphy,
Assistant General Counsel.
Dated: March 29, 2017
By:--------------------------------------------------------------------
Leah Wade,
Trial Attorney, Division of Compliance, Office of the General Counsel.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of:
THE MIDDLEBY CORPORATION
and
VIKING RANGE, LLC
CPSC Docket No.: 17-C0003
ORDER
Upon consideration of the Settlement Agreement entered into between
The Middleby Corporation and Viking Range, LLC (collectively
``Viking''), and the U.S. Consumer Product Safety Commission
(``Commission''), and the Commission having jurisdiction over the
subject matter and over the parties, 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 Viking shall comply with the terms of the
[[Page 17982]]
Settlement Agreement and shall pay a civil penalty in the amount of
four million, six hundred and fifty thousand dollars ($4,650,000),
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 Viking to make the foregoing payment when due,
interest on the unpaid amount shall accrue and be paid by Viking at the
federal legal rate of interest set forth at 28 U.S.C. Sec. 1961(a) and
(b). If Viking 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 11th day
of April, 2017.
BY ORDER OF THE COMMISSION:
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Todd A. Stevenson, Secretary
U.S. Consumer Product Safety Commission
[FR Doc. 2017-07557 Filed 4-13-17; 8:45 am]
BILLING CODE 6355-01-P