[Federal Register: June 30, 2004 (Volume 69, Number 125)]
[Notices]
[Page 39436-39438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn04-42]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 04-C0004]
GROUPE SEB USA f/k/a Krups North America, 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 11118.20.
Published below is a provisionally-accepted Settlement Agreement with
GROUPE SEB USA f/k/a Krups North America, Inc., containing a civil
penalty of $500,000.
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 July 15, 2004.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 04-C0004, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
[[Page 39437]]
FOR FURTHER INFORMATION CONTACT: Belinda V. Bell, Trial Attorney,
Office of Compliance, Consumer Product Safety Commission, Washington,
DC 20207; telephone (301) 504-7592.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: June 23, 2004.
Todd A. Stevenson,
Secretary.
Settlement Agreement and Order
1. This Settlement Agreement, made by and between the staff (``the
staff'') of the U.S. Consumer Product Safety Commission (the
``Commission'') and Groupe SEB USA, formerly known as Krups North
America, Inc., (``Krups'' or ``Respondent''), a corporation, in
accordance with 16 CFR 118.20 of the Commission's procedures for
Investigations, Inspections, and Inquiries under the Consumer Product
Safety Act (``CPSA''), is a settlement of the staff allegations set
forth below.
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. From 1976 to March 2002, Krups North America, Inc. (``Krups'')
was a wholly owned subsidiary of Moulinex SA, a European corporation.
Krups was an entity organized and existing under the laws of the State
of Delaware, with its principal office located at 7 Reuten Drive,
Cloister, New Jersey. In September 2001, Moulinex filed bankruptcy.
During the bankruptcy proceedings certain assets, including Krups North
America, were purchased by Groupe SEB, another European corporation. Up
until December 2003, Krups maintained its operations in New Jersey. On
December 15, 2003, it changed its corporate name to Groupe SEB USA and
moved to 196 Boston Avenue, Medford, Massachusetts. Groupe SEB USA
continues to sell Krups brand products.
Staff Allegations
4. Section 15(b) of the CPSA, 15 U.S.C. 2064(b), requires a
manufacturer of a consumer product distributed in commerce, inter alia
who obtains information that reasonably supports the conclusion that
the product contains a defect which could create a substantial product
hazard or creates an unreasonable risk of serious injury or death, to
immediately inform the Commission of the defect or risk.
5. Between 1996 and 2000, Krups manufactured and distributed
nationwide approximately 218,000 electric drip coffeemakers, sold under
the Krups brand name, model numbers 398 and 405 (the ``coffeemakers''
or the ``product(s)'').
6. The coffee makers are ``consumer products'' and Krups is a
``manufacturer'' of ``consumer products'', which were ``distributed in
commerce'' as those terms are defined in sections 3(a)(1)(4), (11) and
(12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11), and (12).
7. The coffeemakers are defective because loose electrical
components can overheat and ignite the adjacent plastic filer carriage,
creating a risk of fire, serious injury and death.
8. Between July 1997 and June 2001, Krups received approximately 48
reports of the coffeemakers' electrical components overheating and
igniting, causing incidents of smoking, melting or fires. Some of the
fires caused extensive property damage.
9. Not until May 2001, after receiving notice that a consumer's
home was destroyed as a result of a defective Krups coffeemaker, did
Respondent submit an initial report to the Commission reporting the
defective coffeemakers.
10. Although Krups had obtained sufficient information to
reasonably support the conclusion that these coffeemakers contained
defects which could create a substantial product hazard, or created an
unreasonable risk of serious injury or death long before May 2001, it
failed to timely report such information to the Commission as required
by section 15(b) of the CPSA.
11. Respondent's failure to report to the Commission, as required
by section 15(b) of the CPSA, was committed ``knowingly'', as that term
is defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d), and Krups
is subject to civil penalties under section 20 of the CPSA.
Response of Krups
12. Respondent denies the staff allegations in paragraphs 4 through
11, above. Respondent denies that it violated the CPSA.
13. At the time of the alleged notices of incidents and failure to
report, Krups had no engineers on its staff and relied on its parent,
Moulinex, for technical analysis and advice concerning the causes and
consequences of the coffeemaker incidents. Moulinex advised Krups that
the coffeemakers presented no danger of fire outside the coffeemaker.
14. Krups reasonably relied on the advice from Moulinex in
concluding that a section 15(b) report was not required until agents of
Krups investigated a fire involving one of the coffeemakers. Based on
the advice of these agents, Krups decided that the problems with the
coffemakers should be reported.
15. Although the current parent, Groupe SEB, was not involved in
any of the decisions that led to the alleged reporting violation, it
has agreed to enter into this Settlement Agreement to resolve these
issues.
Agreement of the Parties
16. The Consumer Product Safety Commission has jurisdiction over
Respondent and the subject matter of this Settlement Agreement and
Order under the CPSA, 15 U.S.C. 2051 et seq.
17. Respondent agrees to pay a civil penalty in the amount of five
hundred thousand and no/dollars ($500,000.00), payable to the ``U.S.
Treasury'' within twenty (20) calendar days of receiving service of the
final Settlement Agreement and Order.
18. Respondent knowingly, voluntarily and completely waives any
rights it may have in the above-captioned case (i) to the issuance of a
Complaint in this matter; (ii) to a judicial hearing with respect to
the staff allegations cited herein; (iii) to judicial review or other
challenge or contest of the validity of the Settlement Agreement or the
Commission's Order; (iv) to a determination as to whether a violation
of section 15(b) of the CPSA, 15 U.S.C. 2064(b), has occurred, and (v)
to a statement of findings of fact and conclusions of law with regard
to the staff allegations; and (vi) to any claims under the Equal Access
to Justice Act.
19. Upon provisional acceptance of this Settlement Agreement and
Order by the Commission, this Settlement Agreement and Order shall be
placed in the public record and shall be published in the Federal
Register in accordance with 16 CFR 1118.20. If the Commission does not
receive any written requests not to accept the Settlement Agreement and
Order within 15 days, the Settlement Agreement and Order shall be
deemed finally accepted on the 16th day after the date it is published
in the Federal Register, in accordance with 16 CFR 1118.20(f).
20. The Settlement Agreement and Order shall become effective upon
its final acceptance by the Commission and service of the final Order
upon Respondent.
21. Upon provisional acceptance by the Commission, the Commission
may publicize the terms of the Settlement Agreement and Order.
[[Page 39438]]
22. Respondent agrees to the entry of the attached Order, which is
incorporated herein by reference, and agrees to be bound by its terms.
23. If, after the effective date hereof, any provision of this
Settlement Agreement and Order is held to be illegal, invalid, or
unenforceable under present or future laws effective during the terms
of the Settlement Agreement and Order, such provisions shall be fully
severable. The rest of the Settlement Agreement and Order shall remain
in full effect, unless the Commission and Respondent determine that
severing the provision materially affects the purpose of the Settlement
Agreement and Order.
24. This Settlement Agreement and Order shall not be waived,
changed, amended, modified, or otherwise altered, except in writing
executed by the party against whom such amendment, modification,
alteration, or waiver is sought to be enforced and approved by the
Commission.
25. This Settlement Agreement and Order is binding upon Respondent,
its parent and each of its assigns or successors.
26. 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 Respondent to appropriate legal action.
27. This Settlement Agreement may be used in interpreting the
Order. Agreements, understandings, representations, or interpretations
made outside of this Settlement Agreement and Order may not be used to
vary or contradict its terms.
Dated: May 19, 2004.
GROUP SEB USA
By: Paul Pofcher,
Executive Vice President.
Michael A. Brown, Esquire,
Respondent's Attorney.
The U.S. Consumer Product Safety Commission
Alan H. Schoem,
Director, Office of Compliance.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
By Belinda V. Bell,
Trial Attorney, Legal Division, Office of Compliance.
Order
Upon consideration of the Settlement Agreement between Groupe SEB
USA, a corporation, and the staff of the Consumer Product Safety
Commission, and the Commission having jurisdiction over the subject
matter and over Groupe SEB, and it appearing that the Settlement
Agreement is in the public interest, it is
Ordered that the Settlement Agreement be, and hereby is, accepted
and it is
Further Ordered that Groupe SEB USA shall pay the United States
Treasury a civil penalty in the amount of five hundred thousand and 00/
100 dollars, ($500,000.00), payable within twenty (20) days of the
service of the Final Order upon Groupe SEB USA. Upon the failure by
Groupe SEB to deliver any payment in full to the Commission in
accordance with the terms of the subject Settlement Agreement and
Order, interest on the outstanding balance shall accure and be paid by
Groupe SEB 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 18th
day of June, 2004.
By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 04-14681 Filed 6-29-04; 8:45 am]
BILLING CODE 6355-01-M