[Federal Register: July 13, 2006 (Volume 71, Number 134)]
[Notices]
[Page 39673-39675]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jy06-62]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 06-C0004]
Family Dollar, 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 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
Family Dollar, a corporation, containing a civil penalty of $100,000.
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 28, 2006.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should sent written comments to the Comment 06-C0004, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
FOR FURTHER INFORMATION CONTACT: Howard N. Tarnoff, Trial Attorney,
Office of Compliance, Consumer Product Safety Commission, Washington,
DC 20207; telephone (301) 504-7589.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: July 7, 2006.
Todd A. Stevenson,
Secretary.
In the Matter of Family Dollar, Inc., a Corporation; Settlement
Agreement and Order
1. This Settlement Agreement is made by and between the staff
(the ``staff'') of the U.S. Consumer Product Safety Commission (the
``Commission'') and Family Dollar, Inc. (``Family Dollar''), a
corporation, in accordance with 16 CFR 1118.20 of the Commission's
procedures for Investigations, Inspections, and Inquiries under the
Consumer Product Safety Act (``CPSA''). This
[[Page 39674]]
Settlement Agreement and the incorporated attached Order settle the
staff's 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. Family Dollar is a corporation organized and existing under
the laws of the State of Delaware with its principal corporate
office located in Matthews, North Carolina. At all times relevant
herein, Family Dollar sold, or offered for sale, consumer products.
Staff Allegations
4. From approximately November 2003-February 2004, Family Dollar
sold approximately 8,976 electric blankets (models BST-03-A-F; BST-
03-A-K; BST-03-A-Q; BST-03-A-T) that it purchased from International
Home Fashions, Inc. (a/k/a Bilt-Safe Technologies, Inc.) [``IHF''].
These electric blankets will hereinafter be referred to as ``the
Electric Blankets''.
5. The Electric Blankets are ``consumer products'' and, at the
times relevant herein, Family Dollar was a ``retailer'' of
``consumer products,'' which were ``distributed in commerce'' as
those terms are defined in sections 3(a)(1), (6), (11), and (12) of
the CPSA, 15 U.S.C. 2052(a)(1), (6), (11), and (12).
6. The Electric Blankets are defective because they have a
tendency to overheat and catch on fire.
7. Between December 2003 and June 2004, Family Dollar learned
about approximately 40 reports of malfunction with the Electric
Blankets. Among these incidents, there were numerous alleged
instances of fire, scorching, or smoke damage to consumers' property
and nine alleged personal injuries. The alleged injuries consisted
mainly of minor skin burns. Family Dollar did not inform the
Commission about these incidents until September 1, 2004, when it
submitted a Section 15 report (in response to the staff's request),
and August 25, 2005, when it submitted additional information (again
in response to the staff's request).
8. By February 2004, Family Dollar had decided to undertake a
consumer level recall of the Electric Blankets. Family Dollar
stopped selling the Electric Blankets in mid-February 2004, and it
posted a recall poster at its retail outlets in early-March 2004.
9. Although Family Dollar had obtained sufficient information to
reasonably support the conclusion that the Electric Blankets
contained a defect which could create a substantial product hazard,
or created an unreasonable risk of serious injury or death, long
before September 1, 2004, it failed to immediately inform the
Commission of such defect or risk as required by sections 15(b)(2)
and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3). In failing to do
so, Family Dollar ``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).
10. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Family
Dollar is subject to civil penalties for its failure to make a
timely report pursuant to section 15(b) of the CPSA, 15 U.S.C.
2064(b).
Response of Family Dollar
11. Family Dollar denies the allegations of the staff that the
Electric Blankets contain a defect which could create a substantial
product hazard, or create an unreasonable risk of serious injury or
death, and denies that it violated the reporting requirements of
section 15(b) of the CPSA, 15 U.S.C. 2064(b). Family Dollar further
did not ``knowingly'' violate any reporting requirements under the
CPSA.
12. Family Dollar further states that, when it first learned of
allegations of blanket failures in December 2003, it consulted IHF,
the party most knowledgeable about the design and operation of the
blankets, to ascertain the severity of the problem. IHF responded
that its contacts with customers who made the allegations indicated
that the blankets got hot, rather than caught fire.
13. In February 2004, after receiving reports of additional
alleged incidents, Family Dollar stopped the sale of the blankets
and again consulted with IHF about the significance of the
incidents. IHF expressly represented that its legal counsel had
advised that neither the number nor the severity of the reported
incidents warranted a recall, and that internal mechanisms in the
controllers of blankets involved in incidents appeared to have shut
the controllers off before serious damage occurred. Nevertheless,
Family Dollar, as a matter of good customer relations, decided to
recall the blankets from consumers.
14. At the time it considered whether to conduct the recall,
Family dollar also reviewed the information available to determine
whether it was required to report that information to the
Commission. Based on that information and IHF's representations, it
concluded that it did not have an obligation to report.
15. To effectuate its recall, Family Dollar displayed posters
announcing the recall in its stores in March 2004. When the
Commission and IHF announced the recall of the Electric Blankets in
November 2004, Family Dollar again displayed posters announcing the
recall in its stores.
Agreement of the Parties
16. The Commission has jurisdiction over this matter and over
Family Dollar under the CPSA, 15 U.S.C. 2051-2084.
17. In settlement of the staff's allegations, Family Dollar
agrees to pay a civil penalty of one hundred thousand dollars
($100,000). This payment shall be made by check payable to the order
of the United States Treasury within twenty (20) calendar days of
service upon Family Dollar of the Final Order of the Commission
accepting this Settlement Agreement.
18. The parties enter into this Settlement Agreement for
settlement purposes only. The Settlement Agreement does not
constitute an admission by Family Dollar or a determination by the
Commission that Family Dollar has violated the CPSA's reporting
requirements.
19. Upon provisional acceptance of this Settlement Agreement and
Order by the Commission, the Commission shall place this Agreement
and Order on the public record and shall publish it in the Federal
Register in accordance with the procedure set forth in 16 CFR
1118.20(e). If the Commission does not receive any written request
not to accept the Settlement Agreement and Order within 15 days, the
Agreement and Order shall be deemed finally accepted on the 16th day
after the date it is published in the Federal Register.
20. Upon final acceptance of this Settlement Agreement by the
Commission and issuance of the Final Order, Family Dollar knowingly,
voluntarily and completely waives any rights it may have in this
matter to the following: (i) An administrative or judicial hearing;
(ii) judicial review or other challenge or contest of the validity
of the Commission's actions; (iii) a determination by the Commission
as to whether Family Dollar failed to comply with the CPSA and its
underlying regulations; (iv) a statement of findings of fact and
conclusions of law; and (v) any claims under the Equal Access to
Justice Act.
21. The Commission may publicize the terms of the Settlement
Agreement and Order.
22. This Settlement Agreement and Order shall apply to, and be
binding upon, Family Dollar and each of its successors and assigns.
23. The Commission's Order in this matter is issued under the
provisions of the CPSA, 15 U.S.C. 2051-2084, and a violation of the
Order may subject Family Dollar to appropriate legal action.
24. 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 to contradict its terms.
25. This Settlement Agreement and Order shall not be waived,
changed, amended, modified, or otherwise altered without written
agreement thereto executed by the party against whom such amendment,
modification, alteration, or waiver is sought to be enforced and
approval by the Commission.
26. 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 provision shall be
fully severable. The rest of the Settlement Agreement and Order
shall remain in full effect, unless the Commission and Family Dollar
determine that severing the provision materially changes the purpose
of the Settlement Agreement and Order.
Family Dollar, Inc.
June 8, 2006.
Janet G. Kelley,
Senior Vice President, General Counsel, & Secretary, Family Dollar,
Inc., 10401 Monroe Road, Matthews, North Carolina 28105.
June 12, 2006.
Michael J. Gidding,
Brown & Gidding, P.C., 3201 New Mexico Ave., NW., Suite 24,
Washington, DC 20016, Counsel for Family Dollar, Inc.
[[Page 39675]]
U.S. Consumer Product Safety Commission
John Gibson Mullan,
Director,
Office of Compliance and Field Operations.
Ronald G. Yelenik,
Acting Director, Legal Division, Office of Compliance and Field
Operations.
June 13, 2006.
Howard N. Tarnoff,
Trial Attorney, Legal Division, Office of Compliance and Field
Operations.
In the Matter of Family Dollar, Inc., a Corporation; Order
Upon consideration of the Settlement Agreement entered into
between Family Dollar, Inc. (``Family Dollar'') and the staff of the
U.S. Consumer Product Safety Commission (the ``Commission''), and
the Commission having jurisdiction over the subject matter and over
Family Dollar, and it appearing that the Settlement Agreement is in
the public interest, it is
I
Ordered that the Settlement Agreement be, and hereby is,
accepted; and it is
II
Furthered Ordered that Family Dollar shall pay a civil penalty
of one hundred thousand dollars ($100,000). This payment shall be
made by check payable to the order of the United States Treasury
within twenty (20) calendar days of service upon Family Dollar of
the Final Order of the Commission. Upon the failure of Family Dollar
to make this payment in the prescribed time, 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 7th
day of July 2006.
By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 06-6168 Filed 7-12-06; 8:45 am]
BILLING CODE 6355-01-M