[Federal Register: September 22, 2000 (Volume 65, Number 185)]
[Notices]               
[Page 57319-57321]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se00-31]                         

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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 00-C0015]

 
Riello Corporation of America, a Corporation, 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. 
Published below is a provisionally-accepted Settlement Agreement with 
Riello Corporation of America, a corporation, containing a civil 
penalty of $125,000.

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 October 10, 2000.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 00-C0015, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Jimmie L. Williams, Jr., Trial 
Attorney, Office of Compliance and Enforcement, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0626, 1376.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: September 18, 2000.
Sadye E. Dunn,
Secretary.

Settlement Agreement and Order

    1. Riello Corporation of America (``RCA''), a corporation, enters 
into this Settlement Agreement and Order with the staff (``the staff'') 
of the U.S. Consumer Product Safety Commission (``the Commission'') in 
accordance with 16 CFR part 1118 Section 20 of the Commission's 
Procedures for Investigations, Inspections, and Inquiries under the 
Consumer Product Safety Act (``CPSA'').

[[Page 57320]]

I. The Parties

    2. The Commission is an independent federal regulatory agency 
responsible for the enforcement of the Consumer Product Safety Act, 15 
U.S.C. 2051-2084.
    3. RCA is a corporation organized and existing under the laws of 
the State of Massachusetts. Its principal offices are located at 35 
Pond Park Road, Hingham, Massachusetts.

II. Staff Allegations

    4. Between February 1997 and December 1998, RCA imported, 
distributed and sold in the United States approximately 842 balanced 
flue oil burners models BF 40 F5 and BF 40 F3 (``the Burners'') 
equipped with a component known as the ET-25 post purge module (``ET-
25''). The Burners were designed for installation on residential 
boilers for home heating. RCA is, therefore, a distributor and retailer 
of a consumer product in U.S. commerce pursuant to 15 U.S.C. 2052 
(a)(1), (5) and (6).
    5. The Burners were manufactured by Riello Canada, Inc., a 
corporation organized and existing under the laws of the Province of 
Ontario, Canada (``Riello Canada''). The ET-25 was manufactured by 
Enertel Controls, Inc., a corporation organized and existing under the 
laws of the federal government of Canada.
    6. RCA sold the Burners to manufacturers of boilers. The Burners 
were installed in those boilers either by the boiler manufacturers or 
by installers.
    7. The ET-25 is intended to blow combustion gases out of the Burner 
chamber after the call for heat to the Burner is exhausted. A defect in 
the ET-25 causes the Burner to ``run on,'' which can cause the boiler 
to overheat. Steam relieved through a pressure relief valve presents a 
burn hazard to anyone located near the valve. The continuous buildup of 
pressure within the boiler could cause a fire or explosion.
    8. RCA recommended the installation of a secondary high-end limit 
with the Burner, which would shut down the Burner once a pre-set 
temperature level in the boiler was reached. In the summer or early 
fall of 1998, both RCA and Riello Canada obtained reports from their 
customers that the Burners were failing to shut down after the call for 
heat had been exhausted, and that some boilers in which the Burners 
were installed were not equipped with a high end limit. This 
information reasonably supported the conclusion that the product 
contained a defect, which could create a substantial product hazard.
    9. Riello Canada initiated a corrective action plan beginning 
December 22, 1998. RCA initiated a similar plan beginning on January 
13, 1999.
    10. On March 4, 1999, RCA notified the Commission about the 
Burners. RCA, therefore, failed to report to the Commission in a timely 
manner as required by Section 15(b) of the CPSA, 15 U.S.C. 2064(b). 
RCA, in cooperation with the CPSC, voluntarily completed the recall of 
the Burners soon thereafter.

III. Response of RCA

    11. RCA denies all of the allegations of staff and in particular 
denies that it violated the reporting requirements of section 15(b) of 
the CPSA, 15 U.S.C. 2064(b) or 16 CFR Part 1115. The payment made 
hereunder is made in settlement of the staff's allegations. Neither the 
payment nor the fact of entering into this Settlement Agreement 
constitute evidence of or an admission of, any fault, liability or 
statutory or regulatory violation by RCA, or of the truth of any of the 
allegations made by the staff.

IV. Agreement of the Parties

    12. The Commission has jurisdiction over this matter under the 
Consumer Product Safety Act (CPSA), 15 U.S.C. 2051 et seq.
    13. RCA knowingly, voluntarily and completely waives any rights it 
may have to:
    a. the issuance of a complaint in this matter;
    b. an administrative or judicial hearing with respect to the staff 
allegations discussed in paragraphs 4 through 10 above;
    c. judicial review or other challenge or contest of the validity of 
the Commission's Order;
    d. a determination by the Commission as to whether a violation of 
section 15(b) of the CPSA, 15 U.S.C. 2064(b) has occurred; and
    e. a statement of findings of fact and conclusion of law with 
regard to the staff allegations.
    14. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, this Settlement Agreement and Order shall be 
placed on the public record and shall be published in the Federal 
Register in accordance with 16 CFR part 1118 section 20.
    15. The Settlement Agreement and Order becomes effective upon final 
acceptance by the Commission and service of the Final Order upon RCA.
    16. Upon final acceptance of this Settlement Agreement by the 
Commission, the issuance of the Order, and the full and timely payment 
by RCA to the United States Treasury of a civil penalty in the amount 
of One Hundred and Twenty Five Thousand Dollars ($125,000.00), the 
Commission specifically waives its right to initiate, either by 
referral to the Department of Justice or bringing in its own name, any 
action for civil penalties relating to any of the events that gave rise 
to the staff's allegations in paragraphs four through ten, supra, 
against (a) RCA and Riello Canada, and (b) any and all of RCA's and 
Riello Canada's successors, assigns, employees, representatives and 
agents.
    17. RCA shall pay the Consumer Product Safety Commission a civil 
penalty in the amount of $125,000.00 within 30 calendar days of such 
service of the Final Order.
    18. RCA agrees to entry of the attached Order, which is 
incorporated herein by reference, and to be bound by its terms.
    19. This settlement Agreement and Order are entered into for 
settlement purposes only and shall not constitute evidence of, an 
admission of, or a determination of, any fault, liability or statutory 
or regulatory violation.
    20. The Commission's Order in this matter is issued under the 
provisions of the CPSA, 15 U.S.C. 2051, et seq., and a violation of 
this Order may subject RCA to appropriate legal action.
    21. This Settlement Agreement and Order is binding upon and shall 
inure to the benefit of RCA and Riello Canada and their assigns or 
successors.
    22. Agreements, understandings, representations, or interpretations 
made outside of this Settlement Agreement and Order may not be used to 
vary or to contradict its terms.

Riello Corporation of America.

    Dated: August 22, 2000.

Nick Gareri,

President.

    U.S. Consumer Product Safety Commission.

Alan H. Schoem,

Assistant Executive Director, Office of Compliance.

Eric L. Stone,

Director, Legal Division, Office of Compliance.

    Dated: August 16, 2000.

Jimmie L. Williams, Jr.,

Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Riello Corporation of America, a Massachusetts Corporation, and the 
staff of the U.S. Consumer Product Safety Commission; and the 
Commission having jurisdiction over the subject matter and Riello 
Corporation of America, and it appearing that the

[[Page 57321]]

Settlement Agreement and Order is in the public interest, it is.
    Ordered, that the Settlement Agreement be, and hereby is, accepted, 
and it is
    Further Ordered, that upon final acceptance of the Settlement 
Agreement and Final Order, Riello Corporation of America shall pay the 
Commission a civil penalty in the amount of One Hundred and Twenty Five 
Thousand Dollars ($125,000.00) within 30 calendar days after service of 
this Final Order upon Riello Corporation of America.

    Provisionally accepted and Provisional Order issued on the 18th 
day of September, 2000.

    By Order of the Commission.

Sadye E. Dunn,

Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. 00-24339 Filed 9-21-00; 8:45 am]
BILLING CODE 6355-01-M