[Federal Register: September 10, 2009 (Volume 74, Number 174)]
[Notices]
[Page 46576-46578]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10se09-41]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 09-C0033]
Kohl's Department Stores, 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
Kohl's Department Stores, Inc., containing a civil penalty of
$425,000.00.
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 September 25, 2009.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 09-C0033, Office of the
Secretary, Consumer Product Safety Commission, 4330 East-West Highway,
Room 502, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Seth B. Popkin, Lead Trial Attorney,
Division of Compliance, Office of the General Counsel, Consumer Product
Safety Commission, 4330 East-West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7612.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: September 3, 2009.
Todd A. Stevenson,
Secretary.
Settlement Agreement
1. In accordance with 16 CFR 1118.20, Kohl's Department Stores,
Inc. (``Kohl's'') 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
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Safety Act, 15 U.S.C. 2051--2089 (``CPSA'').
3. Kohl's is a corporation organized and existing under the laws of
Delaware, with its principal offices located in Menomonee Falls,
Wisconsin. At all times relevant hereto, Kohl's sold apparel,
accessories, and other products.
Staff Allegations
4. From January to February, 2009, Kohl's held for sale and/or sold
Seattle Cotton Works hooded sweatshirts with drawstrings at the neck
(``Sweatshirts'').
5. Kohl's sold Sweatshirts to consumers.
6. The Sweatshirts are ``consumer product[s],'' and, at all times
relevant hereto, Kohl's was a ``retailer'' of those consumer products,
which were ``distributed in commerce,'' as those terms are defined in
CPSA sections 3(a)(5), (8), and (13), 15 U.S.C. 2052(a)(5), (8), and
(13).
7. In February 1996, the Staff issued the Guidelines for
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help
prevent children from strangling or entangling on neck and waist
drawstrings. The Guidelines state that drawstrings can cause, and have
caused, injuries and deaths when they catch on items such as playground
equipment, bus doors, or cribs. In the Guidelines, the Staff recommends
that there be no hood and neck drawstrings in children's upper
outerwear sized 2T to 12.
8. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-97,
that incorporated the Guidelines. The Guidelines state that firms
should be aware of the hazards and should be sure garments they sell
conform to the voluntary standard.
9. On May 19, 2006, the Commission posted on its Web site a letter
from the Commission's Director of the Office of Compliance to
manufacturers, importers, and retailers of children's upper outerwear.
The letter urges them to make certain that all children's upper
outerwear sold in the United States complies with ASTM F1816-97. The
letter states that the Staff considers children's upper outerwear with
drawstrings at the hood or neck area to be defective and to present a
substantial risk of injury to young children under Federal Hazardous
Substances Act (``FHSA'') section 15(c), 15 U.S.C. 1274(c). The letter
also notes the CPSA's section 15(b) reporting requirements.
10. Kohl's informed the Commission that there had been no incidents
or injuries associated with the Sweatshirts.
11. Kohl's distribution in commerce of the Sweatshirts did not meet
the Guidelines or ASTM F1816-97, failed to comport with the Staff's May
2006 defect notice, and posed a strangulation hazard to children.
12. On March 12, 2009, the Commission, in cooperation with the
Sweatshirts' distributor, announced a recall of the Sweatshirts,
informing consumers that they should immediately remove the drawstrings
from the Sweatshirts to eliminate the hazard, or call the manufacturer
to arrange for a full refund.
13. Kohl's had presumed and actual knowledge that the Sweatshirts
distributed in commerce posed a strangulation hazard and presented a
substantial risk of injury to children under FHSA section 15(c)(1), 15
U.S.C. 1274(c)(1). Kohl's had obtained information that reasonably
supported the conclusion that the Sweatshirts 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)(3)
and (4), 15 U.S.C. 2064(b)(3) and (4), required Kohl's to immediately
inform the Commission of the defect and risk.
14. Kohl's knowingly failed to immediately inform the Commission
about the Sweatshirts as required by CPSA sections 15(b)(3) and (4), 15
U.S.C. 2064(b)(3) and (4), and as the term ``knowingly'' is defined in
CPSA section 20(d), 15 U.S.C. 2069(d). This failure violated CPSA
section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant to CPSA section 20, 15
U.S.C. 2069, this failure subjected Kohl's to civil penalties.
Kohl's Responsive Allegations
15. Kohl's denies the Staff's allegations above, including, but not
limited to, the allegations that Kohl's failed to timely notify the
Commission about the Sweatshirts as required by CPSA sections 15(b)(3)
and (4). Kohl's denies that it otherwise violated the CPSA or FHSA.
16. In order to supply products to Kohl's, vendors are required to
represent and warrant to Kohl's that all merchandise delivered to
Kohl's will comply with all existing laws, regulations, standards,
orders, and rulings, including, but not limited to, the CPSA and the
FHSA.
17. After confirming that the Sweatshirts contained drawstrings,
Kohl's immediately (i) sent notice to all Kohl's stores to pull the
Sweatshirts from the shelves, (ii) had the Sweatshirts pulled from the
Kohls.com Web site, and (iii) took additional steps to prevent further
sales of the Sweatshirts.
18. Kohl's timely notified the Commission of the Sweatshirts
pursuant to section 15 of the CPSA.
19. Kohl's fully cooperated with the Commission and the
Sweatshirts' distributor in providing information necessary for the
Commission to determine, with the Sweatshirts' distributor, whether a
recall was warranted.
20. Kohl's implemented the recall announced by the Commission and
the Sweatshirts' distributor.
21. Kohl's has entered into the Agreement to avoid incurring
additional expenses and the distraction of litigation. The Agreement
and Order do not constitute and are not evidence of any fault or
wrongdoing by Kohl's.
Agreement of the Parties
22. Under the CPSA, the Commission has jurisdiction over this
matter and over Kohl's.
23. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Kohl's, or a
determination by the Commission, that Kohl's knowingly violated the
CPSA.
24. In settlement of the Staff's allegations, Kohl's shall pay a
civil penalty in the amount of four hundred twenty-five thousand
dollars ($425,000.00) 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.
25. Upon issuance of, and Kohl's compliance with, the final Order,
the Commission regards this matter as resolved and agrees not to bring
a civil penalty action against Kohl's based upon the Staff's
allegations contained herein regarding the Sweatshirts.
26. Upon 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). In accordance with 16 CFR 1118.20(f), if the Commission
does not receive any written request not to accept the Agreement within
fifteen (15) calendar days, the Agreement shall be deemed finally
accepted on the sixteenth (16th) calendar day after the date it is
published in the Federal Register.
27. Upon the Commission's final acceptance of the Agreement and
issuance of the final Order, Kohl's 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 Order or of
the Commission's actions; (3) a determination by the Commission of
[[Page 46578]]
whether Kohl's 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.
28. The Commission may publicize the terms of the Agreement and the
Order.
29. The Agreement and the Order shall apply to, and be binding
upon, Kohl's and each of its successors and assigns.
30. The Commission issues the Order under the provisions of the
CPSA, and violation of the Order may subject Kohl's and each of its
successors and assigns to appropriate legal action.
31. The Agreement may be used in interpreting the Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and the Order may not be used to
vary or contradict their terms. The Agreement shall not be waived,
amended, modified, or otherwise altered without written agreement
thereto executed by the party against whom such waiver, amendment,
modification, or alteration is sought to be enforced.
32. If any provision of the Agreement and the Order is held to be
illegal, invalid, or unenforceable under present or future laws
effective during the terms of the Agreement and the Order, such
provision shall be fully severable. The balance of the Agreement and
the Order shall remain in full force and effect, unless the Commission
and Kohl's agree that severing the provision materially affects the
purpose of the Agreement and the Order.
Kohl's Department Stores, Inc.
Dated: July 29, 2009.
Jeff Manby,
Executive VP, GMM--Men's/YMen's/Children's, Kohl's Department
Stores, Inc., N56 W17000 Ridgewood Drive, Menomonee Falls, WI 53051.
Dated: August 3, 2009.
Paul Izzo, Esq.,
One Post Office Square, Sharon, MA 02067. Counsel for Kohl's
Department Stores, Inc.
U.S. Consumer Product Safety Commission Staff.
Cheryl A. Falvey,
General Counsel.
Ronald G. Yelenik,
Assistant General Counsel, Office of the General Counsel.
Dated: August 11, 2009.
Seth B. Popkin,
Lead Trial Attorney, Division of Compliance, Office of the General
Counsel.
Order
Upon consideration of the Settlement Agreement entered into between
Kohl's Department Stores, Inc. (``Kohl's'') and the U.S. Consumer
Product Safety Commission (``Commission'') staff, and the Commission
having jurisdiction over the subject matter and over Kohl's, and it
appearing that the Settlement Agreement and the Order are in the public
interest, it is
Ordered, that the Settlement Agreement be, and hereby is, accepted;
and it is
Further Ordered, that Kohl's shall pay a civil penalty in the
amount of four hundred twenty-five thousand dollars ($425,000.00)
within twenty (20) calendar days of service of the Commission's final
Order accepting the Agreement. The payment shall be made by check
payable to the order of the United States Treasury. Upon the failure of
Kohl's to make the foregoing payment when due, interest on the unpaid
amount shall accrue and be paid by Kohl's 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 2nd day
of September, 2009.
By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. E9-21764 Filed 9-9-09; 8:45 am]
BILLING CODE 6355-01-P