[Federal Register: February 27, 2002 (Volume 67, Number 39)]
[Notices]
[Page 8942-8944]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27fe02-54]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 02-C0003]
Regent International Corporation, Inc., 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 Flammable Fabrics Act in the
Federal Register in accordance with the terms of 16 CFR 1610.05(d).
Published below is a provisionally-accepted Settlement Agreement with
Regent International Corporation, Inc., a corporation containing a
civil penalty of $75,000.
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 March 14, 2002.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 02-C0003, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney,
Office of the General Counsel, Consumer Product Safety Commission,
Washington, DC 20207; telephone (301) 504-0980, 1346.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: February 21, 2002.
Todd A. Stevenson,
Secretary.
Settlement Agreement and Order
1. This Settlement Agreement and Order, entered into between Regent
International Corporation, Inc. (hereinafter, ``Regent'' or
``Respondent''), and the staff of the consumer Product Safety
Commission (hereinafter, ``staff''), pursuant to the procedures set
forth in 16 CFR 1605.13, is a compromise resolution of the matter
described herein, without a hearing or determination of issues of law
and fact.
I. The Parties
2. The ``staff'' is the staff of the Consumer Product Safety
Commission (hereinafter, ``Commission''), an independent federal
regulatory commission of the United States government established
pursuant to section 4 of the Consumer Product Safety Act (CPSA), as
amended, 15 U.S.C. 2053.
3. Respondent Regent International Corporation, Inc. is a
Subchapter ``S'' corporation organized and existing under the laws of
the State of New York. Regent is located at 1411 Broadway, New York, NY
10018. Regent is a manufacturer and importer of clothing.
II. Allegations of the Staff
4. On March 9, 1996, Regent filed a continuing guaranty with the
Commission. The guaranty covered all men's, women's, and children's
apparel, excluding sleepwear, for a period of three years. In the
guaranty filed by Regent on March 9, 1996, Regent represented that it
had performed reasonable and representative testing of its product
lines and that its products conformed to the applicable flammability
regulations.
5. Throughout October 1996, Regent imported approximately 165,000
of the ``Jason Maxwell'' sherpa fleece garments, Style Numbers 12142,
12143, 12144, 12145, 12146, 12147,22049, 22050, 22051, 22052, 22053,
22054, 32035, 32036, 32037, 32038, 32039, 32040, 52010, 52011, 52012,
and 52013, made from 80% cotton, 20% polyester (hereinafter, ``sherpa
garments''), for sale to retail customers in the United States.
6. These sherpa garments were subject to the Standard for the
Flammability of Clothing Textiles (hereinafter, ``Clothing Standard''),
16 CFR part 1610, issued under section 4 of the FFA, 15 U.S.C. 1193.
7. Because Regent had filed a continuing guaranty with the
Commission on March 9, 1996, Regent was required to conduct reasonable
and representative testing on the sherpa garments and to maintain the
requisite records for three years to support the guaranty under section
8(a) of the FFA, 15 U.S.C. 1197(a) and 16 CFR 1610.37 and .38.
8. Before selling its sherpa garments to its customers, Regent
failed to conduct reasonable and representative testing or to verify
whether the foreign manufacturer, The Motiff Factory, had conducted
reasonable and representative testing on the sherpa garments to support
the guaranty under section 8(a) of the FFA, 15 U.S.C. 1197(a) and 16
CFR 1610.37.
9. Regent did not maintain the requisite records to support the
guaranty under section 8(a) of the FFA, 15 U.S.C. 1197(a) and 16 CFR
1610.38.
10. On December 30, 1996, J.C. Penney, Regent's largest customer,
notified Regent that one of its customers had reported an incident when
one of
[[Page 8943]]
these sherpa garments ignited when exposed to a flame from a candle.
The consumer was not injured.
11. During the first week of January 1997, Regent conducted
flammability testing on the sherpa garments. The test results showed
that the green and peach checked garments and the green striped and
solid pattern garments were dangerously flammable and unsuitable for
clothing because of their rapid and intense burning and, therefore,
violated the Clothing Standard.
12. On January 3, 1997, Regent agreed to allow J.C. Penney to
authorize returns and to remove certain lot numbers of the sherpa
garments from the selling floor.
13. At the time Regent notified the Commission of flammability
problems regarding the sherpa garments on January 9, 1997, it possessed
approximately 8,936 sherpa garments.
14. When requested by the staff in 1997 Regent failed to provide
test reports to show that it or someone acting on its behalf had
conducted reasonable and representative testing on the sherpa garments
before sale to support the guaranty.
15. Respondent knowingly sold, or offered for sale, in commerce, or
caused to be transported, in commerce, or sold or delivered for after a
sale or shipment in commerce, sherpa garments that it knew or should
have known violated the Clothing Standard, as the term ``knowingly'' is
defined in section 5(e)(4) of the FFA, 15 U.S.C. 1194(e)(4), in
violation of section 3 of the FFA, 15 U.S.C. 1192. A knowing violation
of this provision subjects Respondent to civil penalties under section
5(e)(1) of the FFA, 15 U.S.C. 1194(e)(1).
16. By failing to conduct reasonable and representative testing or
to verify that the foreign manufacturer, The Motiff Factory, had
conducted reasonable and representative testing on the sherpa garments
and by failing to maintain the requisite records, Respondent knowingly
furnished a false guaranty, in violation of section 8(b) of the FFA, 15
U.S.C. 1197(b). A knowing violation of this provision subjects
Respondent to civil penalties under section 5(m)(1)(A) of the Federal
Trade Commission Act (FTCA), 15 U.S.C. 45(m)(1)(A).
III. Response of Respondent
17. Regent is a small, family-owned garment manufacturer in New
York City with approximately thirty employees that has been in business
for over thirty years. During these 30 years of business, prior to this
one incident in 1996, Regent had never had any of its garments recalled
and had never been accused by the Commission of violating any statute
or regulation. Nor has Regent been subjected to any other recalls, or
has it been accused of violating any statute or regulation since the
1996 incident.
18. Respondent denies the allegations of the staff set forth in
paragraphs 4-16 above.
19. Respondent adamantly denies that it knowingly violated the
FFA's Clothing Standard and the Guaranty Provisions, and it is settling
the matter to avoid the costs of litigation.
20. Regent adamantly denies that the green and peach checked
garments and the green striped and solid pattern garments were
dangerously flammable and unsuitable for clothing because of their
rapid and intense burning and, therefore, violated the Clothing
Standard.
21. In November 1995, Regent instructed its manufacturer, The Motif
Factory (``Motif'' ), to begin testing fabrics for washing
instructions, flammability, and color fading. In its instructions to
Motif, Regent emphasized the importance of the testing being done.
Accordingly, Regent further instructed Motif to secure a good testing
facility, to ensure that all fabrics have been tested, to begin testing
fabrics immediately, and to test fabrics each year. Motif confirmed
that it would begin the testing as per Regent's instructions. At some
time, Regent was informed that the fabric had passed the testing.
22. On December 30, 1996, J.C. Penney notified Regent of a
complaint by one customer about the flammability of one of its sherpa
garments. No injury was reported, nor had one occurred. On January 3,
1997, Regent authorized J.C. Penney to stop selling the garments and to
accept any returns. On Tuesday, January 7, 1997, Regent informed the
Commission of the single report by a consumer and on, January 10, 1997,
Regent voluntarily recalled not only the garments that had failed the
flammability tests, but also those that had passed the tests. Regent
did the recall in this manner in order to minimize customer confusion
and to make sure that all the garments were returned.
23. In January 1997, Regent learned for the first time that sherpa
is an unusual fabric in that its color impacts flammability.
Consequently, reasonable and representative testing, as defined by the
Commission, would not indicate that some sherpa garments did not comply
with the flammability requirements set forth in the Clothing Standard.
24. Because Regent had responded so effectively and expeditiously
to the single report and expeditiously recalled the garments, Regent
believed that it would not be subject to civil penalties.
25. Regent adamantly denies that it knowingly furnished a false
guaranty with respect to the sherpa garments. Regent specifically
denies the allegations set forth in paragraphs 8, 9, 15, and 16, in
which the staff claims that Regent failed to conduct reasonable and
representative testing on the sherpa garments and to maintain the
requisite records to support the continuing guaranty it had filed with
the Commission under section 8(a) of the FAA, 15 U.S.C. 1197(a) and 16
CFR 1610.37. As stated above, Regent instructed its manufacturer, The
Motif Factory (``Motif''), to begin testing fabrics for washing
instructions, flammability, and color fading. In its instructions to
Motif, Regent emphasize the importance of the testing being done.
Accordingly, Regent further instructed Motif to secure a good testing
facility, to ensure that all fabrics have been tested, to begin testing
fabrics immediately, and to test fabrics each year. Motif confirmed
that it would begin the testing as per Regent's instructions. At some
time, Regent was informed that the fabric had passed the testing.
IV. Agreement of the Parties
26. The Commission has jurisdiction over Respondent and the subject
matter of this Settlement Agreement and Order under the Consumer
Product Safety Act (CPSA), 15 U.S.C. 2051 et seq.; the Flammable
Fabrics Act (FFA), 15 U.S.C. 1191 et seq.; and the Federal Trade
Commission Act (FFA), 15 U.S.C. 41 et seq.
27. This Agreement is entered into for settlement purposes only and
does not constitute an admission by Respondent or a determination by
the Commission that Respondent knowingly violated the FFA's Clothing
Standard and/or Guaranty Requirements.
28. 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 the procedures set forth in 16 CFR
1610.05(d). If the Commission does not receive any written request not
to accept the Settlement Agreement and Order within 15 days, the
Settlement Agreement and Order will be deemed finally accepted on the
20th day after the date it is published in the Federal Register.
29. Upon final acceptance of this Settlement Agreement by the
Commission and issuance of the Final
[[Page 8944]]
Order, Respondent knowingly, voluntarily, and completely waives any
rights it may have in this matter (1) to an administrative or judicial
hearing, (2) to judicial review or other challenge or contest of the
validity of the Commission's actions, (3) to a determination by the
Commission as to whether Respondent failed to comply with the FFA, as
alleged, (4) to a statement of findings of fact and conclusions of law,
and (5) to any claims under the Equal Access to Justice Act.
30. In settlement of the staff's allegations, Respondent agrees to
pay a $75,000.00 civil penalty as set forth in the attached Order
incorporated herein by reference.
31. The Commission may publicize the terms of this Settlement
Agreement and Order.
32. Upon final acceptance by the Commission of this Settlement
Agreement and Order, the Commission shall issue the attached Order.
33. A violation of the attached Order shall subject Respondent to
appropriate legal action.
34. The provisions of this Settlement Agreement and Order shall
apply to, and be binding upon, Respondent and each of its shareholders,
officers, directors, employees, agents, successors, assigns, and
representatives, directly or through any corporation, subsidiary,
division, or other business entity, or through any agency, device, or
instrumentality.
Respondent Regent International Corporation, Inc.
Dated: February 7, 2002.
Michael Shweky,
Vice President, Regent International Corporation, Inc., 1411 Broadway,
New York, NY 10018.
Commission Staff.
Alan H. Schoem,
Assistant Executive Director, Consumer Product Safety Commission,
Office of Compliance, Washington, DC 20207-0001.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
Dated: February 6, 2002.
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.
In the Matter of Regent International Corporation, Inc., a corporation.
[CPSC Docket No. 02-C0003]
Order
Upon consideration of the Settlement Agreement entered into between
Respondent Regent International Corporation, Inc. (hereinafter,
``Respondent''), a corporation, and the staff of the Consumer Product
Safety Commission (``Commission''); and the Commission having
jurisdiction over the subject matter and Respondent; and it appearing
that the 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 Order, Respondent Regent International Corporation, Inc.
shall pay to the United States Treasury a civil penalty in the amount
of Seventy-five thousand and 00/100 Dollars ($75,000.00) in three (3)
installments each. The first payment of Twenty-five thousand and 00/100
dollars ($25,000.00) shall be paid within twenty (20) days after
service of the Final Order of the Commission (hereinafter,
``anniversary date''). The second payment of twenty-five thousand and
00/100 dollars ($25,000.00) shall be paid within one (1) year of the
anniversary date. The third payment of twenty-five thousand and 00/100
dollars shall be paid within two (2) years of the anniversary date.
Upon the failure of Respondent Regent International Corporation, Inc.
to make a payment or upon the making of a late payment by Respondent
Regent International Corporation, Inc. (a) the entire amount of the
civil penalty shall be due and payable, and (b) interest on the
outstanding balance shall accrue and be paid at the federal legal rate
of interest under the provisions of 28 U.S.C. 1961(a) and (b).
Provisionally accepted and provisional Order issued on the 21st day
of February, 2002.
By Order of the Commission.
Todd A. Stevenson,
Consumer Product Safety Commission.
[FR Doc. 02-4677 Filed 2-26-02; 8:45 am]
BILLING CODE 6355-01-M