[Federal Register: March 14, 2006 (Volume 71, Number 49)]
[Notices]
[Page 13105-13108]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr06-52]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 06-C0002]
Acuity Brands, 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 1118.20(e).
Published below is a provisionally-accepted Settlement Agreement with
Acuity Brands, Inc., containing a civil penalty of $700,000.00.
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 29, 2006.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 06-C0002, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
FOR FURTHER INFORMATION CONTACT: Seth B. Popkin, Trial Attorney, Office
of Compliance, Consumer Product Safety Commission, Washington, DC
20207; telephone (301) 504-7612.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: March 8, 2006.
Todd A. Stevenson,
Secretary.
In the Matter of Acuity Brands, Inc.
Settlement Agreement and Order
1. In accordance with 16 CFR 1118.20, Acuity Brands, Inc. and the
staff (``Staff'') of the United States Consumer Product Safety
Commission (``Commission'') enter into this Settlement Agreement
(``Agreement''). The Agreement and the incorporated attached Order
(``Order'') settle the Staff's allegations set forth below.
Parties
2. The Commission is an independent federal regulatory agency
established pursuant to, and responsible for the enforcement of, the
Consumer Product Safety Act, 15 U.S.C. 2051-2084 (``CPSA'').
3. Acuity Brands, Inc. is a corporation organized and existing
under the laws of the state of Delaware, and its principal offices are
located in Atlanta, Georgia. Acuity Brands, Inc.'s businesses, among
other things, design and manufacture lighting equipment. Lithonia
Lighting conducted the product recalls referenced in the Agreement and
identified itself as the manufacturer of those recalled products.
Lithonia Lighting is a division of, and is wholly owned by, Acuity
Lighting Group, Inc., which is wholly owned by Acuity Brands, Inc.
Lithonia Lighting is also a brand of lighting products sold by Acuity
Lighting Group, Inc. Acuity Brands Inc., Acuity Lighting Group, Inc.,
and Lithonia Lighting are collecting referred to herein as ``Acuity.''
4. Paragraphs 5 through 38 constitute the Staff's allegations based
on the Staff's investigations. Paragraphs 39 through 48 constitute
Acuity's responsive allegations disputing the Staff's allegations.
Staff Allegations
ELM/ELM II Emergency Lights
5. From August 1992 to May 1997, Acuity manufactured, and
wholesalers and distributors sold, approximately 1.2 million ELM/ELM2
emergency lights later recalled on April 13, 2001 (``ELM Lights''). The
ELM Lights were installed near exit doors in buildings such as schools,
offices, and shopping centers, to aid in evacuation in the event of an
emergency.
6. Each ELM Light is a ``consumer product'' that Acuity
``distributed in commerce,'' and Acuity is a ``manufacturer'' of that
consumer product, as those terms are defined in CPSA sections 3(a)(1),
(4), (11), and (12), 15 U.S.C. 2052(a)(1), (4), (11), and (12).
7. The ELM Lights had an electrical component that could overheat
when connected to 277-volt electrical systems, and that could melt and
burn the light enclosures and other objects, posing a fire hazard.
8. From January 1996 through September 2000, Acuity received
reports of ELM Light capacitor failures and incidents from 33 sites,
involving 109 failed capacitors, many of which included incidents of
smoking, melting, rupturing, burning, and fire. Results included melted
or damaged light enclosures, damaged walls and carpet, and one injury,
i.e., a burned finger. From 1996 to 1999, Acuity replaced 345 ELM
Lights due to the hazard.
9. Beginning in 1996, Acuity conducted testing and analysis, and it
made an engineering change relating to the hazard by switching to a
different and safer type of capacitor. By July
[[Page 13106]]
1997, Acuity was replacing ELM Lights having defective capacitors with
new units having the new capacitors.
10. From 1998 to 1999, Underwriters Laboratories wrote 4 letters to
Acuity advising it of the CPSA's reporting requirements and/or of the
ELM Lights' risk of fire, serious injury, or death. In 2000, Acuity
received a letter from the Commission staff advising of the CPSA
reporting requirements.
11. By July 1997, Acuity had obtained information that reasonably
supported the conclusion that the ELM Lights contained a defect that
could create a substantial product hazard or that they created an
unreasonable risk of serious injury or death. As of that date, Acuity
had received reports from 12 sites, and the reports involved 60 failed
(overheated) capacitors, at least 8 fire incidents, and 1 light that
exploded, suffered smoke and heat damage, and had a capacitor failure
not contained within the light enclosure. As of that date, Acuity had
replaced some of the original capacitors with safer ones. CPSA sections
15(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), required by Acuity to
immediately inform the Commission of the defect or risk.
12. Acuity did not report to the Commission regarding the ELM
Lights until October 19, 2000, thereby failing to immediately inform
the Commission as required by CPSA sections 15(b)(2) and (3), 15 U.S.C.
2064(b)(2) and (3). This failure violated CPSA section 19(a)(4), 15
U.S.C. 2068(a)(4).
13. Acuity knowingly failed to immediately inform the Commission of
the ELM Lights' defect or risk, as the term ``knowingly'' is defined in
CPSA section 20(d), 15 U.S.C. 2069(d). Pursuant to CPSA section 20, 15
U.S.C. 2069, this failure subjected Acuity to civil penalties.
HID Lights
14. From November 2002 through October 2003, Acuity manufactured,
and from November 2002 through February 2004, lighting and electrical
supply distributors sold, approximately 52,600 indoor high intensity
discharge lights later recalled on March 29, 2004 (``HID Lights''). The
HID Lights have acrylic lenses and/or reflectors, and they are
generally used in industrial locations and commercial locations such as
retail spaces, warehouses, and gymnasiums.
15. Each HID Light is a ``consumer product'' that Acuity
``distributed in commerce,'' and Acuity is a ``manufacturer'' of that
consumer product, as those terms are defined in CPSA sections 3(a)(1),
(4), (11), and (12), 15 U.S.C. 2052(a)(1), (4), (11), and (12).
16. The HID Lights has an electrical component that could leak
fluid that might degrade the acrylic lenses and reflectors, causing
them to crack and fall from significant heights in pieces or in their
entirety. Falling acrylic could injure people below.
17. From May 2003 through January 2004, Acuity received reports of
HID Light failures from 18 sites, with 197 incidents in which acrylic
lenses or reflectors cracked. These incidents included 56 occasions in
which acrylic lenses, reflectors, or pieces fell from the lights. One
injury occurred involving a forehead laceration and eye damage. During
this time, Acuity replaced 770 HID Lights due to the hazard.
18. By the summer of 2003, Acuity knew that bad and leaking
capacitors caused cracking acrylic, and Acuity learned of concerns
about the defect, the potential for personal injury, and people fearing
that falling reflectors could hit them.
19. Beginning in the summer of 2003, Acuity received defect
analyses through which it learned more about the defect and hazard, and
Acuity took further corrective action of its own, instructing its
manufacturing facilities to stop using these capacitors because they
were failing due to a manufacturing defect. In November 2003, due to
ongoing and numerous failures from the defect, Acuity directed a change
in the component vendor.
20. By August 2003, Acuity had obtained information that reasonably
supported the conclusion that the HID Lights contained a defect that
could create a substantial product hazard or that they created an
unreasonable risk of serious injury or death. As of that date, Acuity
knew that at 4 different sites, a total of 88 incidents occurred in
which acrylic lenses or reflectors cracked, including 17 incidents in
which acrylic lenses, reflectors, or pieces fell. CPSA sections
15(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), required Acuity to
immediately inform the Commission of the defect or risk.
21. Acuity did not report to the Commission regarding the HID
Lights until February 6, 2004, thereby failing to immediately inform
the Commission as required by CPSA sections 15(b)(2) and (3), 15 U.S.C.
2064(b)(2) and (3). This failure violated CPSA section 19(a)(4), 15
U.S.C. 2068(a)(4).
22. Acuity knowingly failed to immediately inform the Commission of
the HID Lights' defect or risk, as the term ``knowingly'' is defined in
CPSA section 20(d), 15 U.S.C. 2069(d). Pursuant to CPSA section 20, 15
U.S.C. 2069, this failure subjected Acuity to civil penalties.
HID Expansion Lights
23. From April through October 2002, Acuity manufactured, and from
April 2002 through February 2004, distributors sold, approximately
40,600 indoor high intensity discharge lights later recalled on March
8, 2005 (``HID Expansion Lights''). The HID Expansion Lights have the
same features, uses, defects, and hazard as the HID Lights described
above. The HID Expansion Lights differ from the HID Lights in that
Acuity manufactured the former from April through October 2002, a
manufacture period preceding the manufacture period for the HID Lights.
These additional products resulted in an expansion, one year later, of
the original recall, to include this additional manufacture period
(``Expansion Period'').
24. Each HID Expansion Light is a ``consumer product'' that Acuity
``distributed in commerce,'' and Acuity is a ``manufacturer'' of that
consumer product, as those terms are defined in CPSA sections 3(a)(1),
(4), (11), and (12), 15 U.S.C. 2052(a)(1), (4), (11), and (12).
25. From September 2003 through June 2004, Acuity received reports
from 10 sites of Expansion Period products (i.e., the recalled HID
Expansion Lights, as well as other lights that did not have acrylic and
were not included in the recall but did have the same defective
capacitors) leaking, cracking, and/or failing. From these 10 sites,
Acuity learned of the following incident facts: At least 162 Expansion
Period products with leaking capacitors only (no cracking/falling
acrylic); 60 HID Expansion Lights with cracked lenses and/or reflectors
that did not fall; and 31 HID Expansion Lights with lenses and/or
reflectors that fell. At these sites, Acuity did 644 Expansion Period
product replacements.
26. In September 2003, Acuity received the first site report about
Expansion Period leaking capacitors. From April 5 to June 13, 2004,
Acuity received reports from 6 sites having HID Expansion Lights with
cracked lenses and/or reflectors.
27. Acuity acknowledged that its analysis for the HID Lights
related as well to the HID Expansion Lights. Acuity also acknowledged
that the HID Expansion Lights involved the same potential risk
previously tested and that led to the HID Lights recall. Acuity
conceded that as of February 2004, it knew the defect and took
corrective action by stopping sale and doing replacements.
28. By April 2004, Acuity had obtained information that reasonably
supported the conclusion that the HID
[[Page 13107]]
Expansion Lights contained a defect that could create a substantial
product hazard or that they created an unreasonable risk of serious
injury or death. CPSA sections 15(b)(2) and (3), 15 U.S.C. 2064(b)(2)
and (3), required Acuity to immediately inform the Commission of the
defect or risk.
29. Acuity did not report to the Commission regarding the HID
Expansion Lights until October 8, 2004, thereby failing to immediately
inform the Commission as required by CPSA sections 15(b)(2) and (3), 15
U.S.C. 2064(b)(2) and (3). This failure violated CPSA section 19(a)(4),
15 U.S.C. 2068(a)(4).
30. Acuity knowingly failed to immediately inform the Commission of
the HID Expansion Lights' defect or risk, as the term ``knowingly'' is
defined in CPSA section 20(d), 15 U.S.C. 2069(d). Pursuant to CPSA
section 20, 15 U.S.C. 2069, this failure subjected Acuity to civil
penalties.
HID Cord Lights
31. From June 1999 through May 2002, Acuity manufactured, and
lighting and electrical supply distributors sold, approximately 120,000
indoor high intensity discharge lights later recalled on March 11, 2005
(``HID Cord Lights''). The HID Cord Lights are generally used in
locations such as retail spaces, light manufacturing areas, warehouse
spaces, and gymnasiums.
32. Each HID Cord Light is a ``consumer product'' that Acuity
``distributed in commerce,'' and Acuity is a ``manufacturer'' of that
consumer product, as those terms are defined in CPSA sections 3(a)(1),
(4), (11), and (12), 15 U.S.C. 2052(a)(1), (4), (11), and (12).
33. The cord of the HID Cord Lights could drip plasticizer fluid
that might degrade the acrylic lenses and reflectors, causing them to
crack and fall from significant heights in pieces or in their entirety.
Falling acrylic could injure people below.
34. From June 2002 through September 2004, Acuity learned of 15
sites at which these were at least 510 failing HID Cord Lights (i.e.,
lights with cracking or failing lenses or reflectors, and/or dripping
cords). These incidents included 6 falling lenses, more than 286
cracking reflectors, 19 falling reflectors, and at least 202 dripping
cords that had not yet resulted in cracking or falling reflectors.
During this time, Acuity replaced or made arrangements to replace over
2,000 HID Cord Lights.
35. From June 2002 to September 2004, Acuity learned of defect
information, the potential for personal injury, and people concerned
that falling lenses and reflectors could hit them. During this time,
Acuity received increasing information about the cord fluid being
incompatible with acrylic and about acrylic cracking due to fluid
leaking from cords. In August 2003, Acuity learned of the cord
manufacturer's intent to do a corrective action by revising the cord's
design, and in October 2003, Acuity acknowledged the defect issues and
defective cords.
36. By July 2003, Acuity had obtained information that reasonably
supported the conclusion that the HID Cord Lights contained a defect
that could create a substantial product hazard or that they created an
unreasonable risk of serious injury or death. As of that date, Acuity
had learned of 7 sites with 224 failing HID Cord Lights, including 5
falling lenses, 123 cracking reflectors, 4 falling reflectors, and at
least 92 dripping cords not yet resulting in acrylic cracking or
falling. Acuity replaced 431 HID Cord Lights at these sites. Also by
July 2003, Acuity had learned of the cord fluid as the incidents'
cause, and Acuity recognized the safety issue. CPSA sections 15(b)(2)
and (3), 15 U.S.C. 2064(b)(2) and (3), required Acuity to immediately
inform the Commission of the defect or risk.
37. Acuity did not report to the Commission regarding the HID Cord
Lights until September 27, 2004, thereby failing to immediately inform
the Commission as required by CPSA sections 15(b)(2) and (3), 15 U.S.C.
2064(b)(2) and (3). This failure violated CPSA section 19(a)(4), 15
U.S.C. 2068(a)(4).
38. Acuity knowingly failed to immediately inform the Commission of
the HID Cord Lights' defect or risk, as the term ``knowingly'' is
defined in CPSA section 20(d), 15 U.S.C. 2069(d). Pursuant to CPSA
section 20, 15 U.S.C. 2069, this failure subjected Acuity to civil
penalties.
Acuity's Responsive Allegations
39. Acuity contests and denies the Staff's allegations and enters
into the Agreement to resolve the Staff's allegations without the
expense and distraction of litigation. By agreeing to this settlement,
Acuity does not admit any of the allegations set forth above in the
Agreement or any fault, liability, or statutory or regulatory
violation.
40. Acuity voluntarily, and without the Commission having first
requested information from Acuity, notified the Commission in each of
the matters described above.
41. Acuity closely monitored its reporting obligations under the
CPSA. Acuity never knowingly failed to file a required report with the
Commission or knowingly committed any other violation of the CPSA.
Acuity has continued to improve its efforts to meet its reporting
obligations under the CPSA.
42. Acuity's actions were to a significant degree influenced by its
belief, based upon its initial review of the facts, that the Commission
did not have jurisdiction over the products in question.
43. Acuity voluntarily conducted corrective actions with respect to
the products identified in the Staff's allegations. It did so pursuant
to the Commission's ``Fast Track'' program, and neither the Commission
nor the Staff has ever made any determination that the products at
issue contained a defect that could create either a substantial product
hazard or an unreasonable risk of serious injury or death.
44. For several reasons, the actual risk associated with the
products at issue was much lower in fact than implied by the Staff's
description of incidents involving the products. These reasons include
the fact that not all products subject to the corrective actions
contained the problem that contributed to the performance failures
described in the corrective actions. Moreover, even many of the product
units that would have been so affected would not have caused harm due
to varying circumstances. The fact that only two minor injuries
occurred with respect to the products described in the Staff's
allegations demonstrates that the actual, manifested risk from the
products at issue was virtually nonexistent.
45. With respect to three of the four reports that the Staff has
alleged were untimely, the component at issue was made by a third-party
supplier and not by Acuity.
46. The Staff's recitation of incidents involving failure modes of
varying levels of severity as evidence that the products were unsafe or
should have been subject to the Commission's reporting requirements is
over inclusive. Acuity evaluated its reporting obligations to the
Commission based upon its assessment of risk, and it distinguished
between risk issues and product performance issues in its evaluation of
incidents. Acuity considered many of the incidents set forth in the
Staff's allegations to be performance issues, based upon information
available at the time. Product performance issues that do not
demonstrate a substantial product hazard or an unreasonable risk of
serious injury or death are not reportable to the Commission,
regardless of whether Acuity responded
[[Page 13108]]
to customer requirements by providing replacement products.
47. The limitations period for bringing any claim regarding the ELM
Lights has expired.
48. The HID Expansion Lights matter discussed in the Staff's
allegations does not constitute a reporting violation separate from the
alleged HID Lights reporting violation.
Agreement of the Parties
49. Under the CPSA, the Commission has jurisdiction over this
matter and over Acuity.
50. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Acuity, or a
determination by the Commission, that Acuity has knowingly violated the
CPSA. The Agreement does not constitute a Commission finding of fact or
law with respect to any of the Agreement's allegations.
51. In settlement of the Staff's allegations, Acuity shall pay a
civil penalty in the amount of seven hundred thousand dollars
($700,000.00) within twenty (20) calendar days of service of the
Commission's final Order accepting the Agreement. The payment shall be
by check payable to the order of the United States Treasury.
52. Upon the Commission's provisional acceptance of the Agreement,
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) days, the Agreement shall
be deemed finally accepted on the sixteenth (16th) day after the date
it is published in the Federal Register.
53. Upon the Commission's final acceptance of the Agreement and
issuance of the final Order, Acuity knowingly, voluntarily, and
completely waives any rights it may have in this matter to the
following: (1) An administrative or judicial hearing; (2) judicial
review or other challenge or contest of the validity of the
Commission's Order or actions; (3) a determination by the Commission of
whether Acuity failed to comply with the CPSA and its underlying
regulations; (4) a statement of findings of fact and conclusions of
law; and (5) any claims under the Equal Access to Justice Act with
respect to the Staff's allegations in the Agreement.
54. The Commission may publicize the terms of the Agreement and
Order. In publicizing the Agreement and Order, the Commission will
comply with the requirements of law, including CPSA section 6(b), 15
U.S.C. 2055(b), to the extent applicable.
55. Acuity's full and timely payment to the United States Treasury
of a civil penalty in the amount of seven hundred thousand dollars
($700,000.00) as required herein resolves the Staff's allegations in
the Agreement with respect to the following: (a) Acuity; (b) any Acuity
parent, subsidiary, affiliate, division, or related entity; (c) any
shareholder, director, officer, employee, agent, or attorney of any
entity referenced in (a) or (b) above; and (d) any successor, heir, or
assignee of any entity referenced in (a), (b), or (c) above.
56. The Agreement and Order shall apply to, and be binding upon,
Acuity and each of its successors and assigns.
57. The Commission issues the Order under the provisions of the
CPsa, and violation of the Order may subject Acuity to appropriate
legal action.
58. The Agreement may be used in interpreting the Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and Order may not be used to vary
or contradict their terms. The Agreement shall not be waived, amended,
modified, or otherwise altered, except in a writing that is executed by
the party against whom such waiver, amendment, modification, or
alteration is sought to be enforced, and that is approved by the
Commission.
59. If after the effective date hereof, any provision of the
Agreement and Order is held to be illegal, invalid, or unenforceable
under present or future laws effective during the terms of the
Agreement and Order, such provisions shall be fully severable. The
balance of the Agreement and Order shall remain in full force and
effect, unless the Commission and Acuity determine that severing the
provision materially affects the purpose of the Agreement and Order.
Acuity Brands, Inc.
Dated: January 3, 2006.
By:
Vernon J. Nagel,
President, Acuity Brands, Inc., 1170 Peachtree Street, NE., Suite
2400, Atlanta, GA 30309.
Jeffrey S. Bromme,
Esq., Arnold & Porter LLP, 555 Twelfth Street, NW., Washington, DC
20004-1206, Counsel for Acuity Brands, Inc.
U.S. Consumer Product Safety Commission Staff.
J. Gibson Mullan,
Assistant Executive Director, Office of Compliance.
Ronald G. Yelenik,
Acting Director, Legal Division, Office of Compliance.
Dated: January 13, 2006.
By:
Seth B. Popkin,
Trial Attorney, Legal Division, Office of Compliance.
Order
Upon consideration of the Settlement Agreement entered into between
Acuity Brands, Inc. (``Acuity'') and the U.S. Consumer Product Safety
Commission (``Commission'') staff, and the Commission having
jurisdiction over the subject matter and over Acuity, 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 Acuity shall pay a civil penalty in the
amount of seven hundred thousand dollars ($700,000.00) within twenty
(20) calendar days of service of the final Order upon Acuity. The
payment shall be made by check payable to the order of the United
States Treasury. Upon the failure of Acuity to make the foregoing
payment when due, interest on the unpaid amount shall accrue and be
paid by Acuity at the federal legal rate of interest set forth at 28
U.S.C. 1961(a) and (b).
Provisionally accepted and Provisional Order issued on the 8th
day of March, 2006.
By order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 06-2419 Filed 3-13-06; 8:45 am]
BILLING CODE 6355-01-M