[Federal Register Volume 59, Number 26 (Tuesday, February 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2873]


[[Page Unknown]]

[Federal Register: February 8, 1994]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 94-C0008]

 

Walgreen Co., a Corporation; Provisional Acceptance of a 
Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Provisional acceptance of a Settlement Agreement under the 
Federal Hazardous Substances Act and the Consumer Product Safety Act.

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SUMMARY: It is the policy of the Commission to publish settlements 
which it provisionally accepts in the Federal Register in accordance 
with the terms of 16 CFR 1118.20(e)-(h). Published below is a 
provisionally-accepted Settlement Agreement with Walgreen Co., a 
corporation.

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 February 23, 1994.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to Comment 94-C0008, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT:Melvin I. Kramer, Trial Attorney, 
Office of Compliance and Enforcement, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0626.

SUPPLEMENTARY INFORMATION: (Attached).

    Dated: January 31, 1994.
Sheldon D. Butts,
Deputy Secretary.

Settlement Agreement and Order

    1. Walgreen Co. (hereinafter, ``Walgreen''), a corporation, enters 
into this Settlement Agreement (hereinafter, ``Agreement'') with the 
staff of the Consumer Product Safety Commission, and agrees to the 
entry of the Order described herein. The purpose of the Agreement and 
Order is to settle the staff's allegations that Walgreen knowingly 
caused the export of certain banned hazardous substances, namely toys, 
in violation of section 14(d) of the Federal Hazardous Substances Act 
(FHSA), 15 U.S.C. 1273(d), which is a prohibited act under section 4(i) 
of the FHSA, 15 U.S.C. 1263(i).

I. Jurisdiction

    2. The Commission has jurisdiction over Walgreen and the subject 
matter of this Settlement Agreement pursuant to section 30(a) of the 
Consumer Product Safety Act (hereinafter, ``CPSA''), 15 U.S.C. 2079(a), 
and sections 2 (f)(1)(D) and (s), 4 (a) and (i) and 5(c) of the Federal 
Hazardous Substances Act (hereinafter, ``FHSA''), 15 U.S.C. 
1261(f)(1)(D) and (s), 1263 (a) and (i) and 1264(c).

II. The Parties

    3. The ``staff'' is the staff of the Consumer Product Safety 
Commission, an independent regulatory commission of the United States 
established pursuant to section 4 of the CPSA, 15 U.S.C. 2053.
    4. Walgreen is a corporation organized and existing under the laws 
of the State of Illinois with its principal corporate offices located 
at 200 Wilmot Road, Deerfield, Illinois 60015. Walgreen is a retail 
drug chain and is engaged, in part, in the business of importing and 
selling domestically, children's toys and novelty items.

III. Allegations of the Staff

    5. On June 2, 1992, Commission field staff collected samples of 
Walgreen's ``Toy Center Musical Phone,'' item #874409, for evaluation 
under the FHSA.
    6. In the staff's letter of July 8, 1992, Walgreen was advised that 
these toys are intended for children under three years of age and are 
subject to the Small Parts regulation at 16 CFR part 501. The toy phone 
had battery and antenna components that separated when tested under the 
use and abuse procedures outlined in 16 CFR 1500.52(c) and (f). The 
battery antenna components fit entirely within the small parts cylinder 
described at 16 CFR 1500.4. Therefore, the toys present a choking 
hazard to children under three years of age. As a result, the toy 
phones are hazardous substances as defined in section 2(f)(1)(D) and 
(s) of the FHSA and the regulations at 16 CFR 1500.18(a)(9), and are 
banned hazardous substances under section 2(q)(1)(A) of the FHSA.
    7. In that same letter, Walgreen was supplied with the Regulated 
Products Handbook and referred to chapter 6. The letter and the 
handbook described, among other things, the procedures that must be 
followed if a firm elects to export banned products.
    8. In Walgreen's response of September 1, 1992, they described 
their ``stop sales'' activity and informed Commission staff that the 
returned goods would be ``held for return to the vendor.''
    9. On September 30, 1992, the Commission's Central Regional office 
received a letter from a firm, Atico Limited of Miami, Florida which 
represented itself as Walgreen's agent for disposal of these toys. 
Atico claimed to have revised the product so that it would comply with 
the FHSA and included revised samples for evaluation.
    10. The staff's letter dated November 3, 1992, informed Atico that 
the revised toys were still not in compliance with the FHSA, and asked 
again for a final disposition of Walgreen's stock of these violative 
products. The letter again outlined the correct procedures to follow 
should Walgreen elect to reexport the products.
    11. In January 1993, the staff was contacted by counsel, 
purportedly representing Atico, asking for additional guidance on the 
Commission's export requirements. He specifically inquired about 
possible export to Paraguay. The staff told him that Walgreen was the 
importer and should file a notice of export with the Commission.
    12. In a phone conversation held April 26, 1993, the CPSC staff 
again asked Walgreen about the disposition of the violative toys. 
Walgreen advised that Atico would be handling the export on its behalf.
    13. In a phone conversation held on April 27, 1993, Walgreen 
acknowledged that it had not filed the Notice to Export.
    14. Subsequently, the staff learned that Walgreen had shipped 1,758 
cartons of these toys back to its foreign supplier on March 29, 1993. 
The Commission never received the required Notice of Export from 
Walgreen or Atico.
    15. Section 14(d) of the FHSA requires, in pertinent part, that any 
person who elects to export a banned hazardous product shall notify the 
Commission of its intent to export at least 30 days prior to the date 
of exportation.
    16. Walgreen's failure to provide the Commission with advance 
notice of its intent to export these toys is a violation of section 
14(d) of the FHSA, 15 U.S.C. 1273(d), and is a prohibited act under 
section 4(i) of the FHSA, 15 U.S.C.

IV. Response of Walgreen

    17. Walgreen denies the allegations of the staff that it has 
knowingly introduced or caused the introduction into commerce of the 
aforesaid banned hazardous toys, that it knowingly failed to comply 
with export notification requirements of the FHSA, or that it violated 
the FHSA in any way.

V. Agreement of the Parties

    18. The Consumer Product Safety Commission has jurisdiction over 
Walgreen and the subject matter of this Settlement Agreement and Order 
under the following acts: Consumer Product Safety Act (15 U.S.C. 2051 
et seq.), and the Federal Hazardous Substances Act, 15 U.S.C. 1261 et 
seq.
    19. Walgreen agrees to pay to the Commission a civil penalty in the 
amount of fifty thousand and 00/100 dollars ($50,000) within twenty 
(20) days after service of the Final Order of the Commission accepting 
this Settlement Agreement. This payment is made in full settlement of 
the staff's allegations set forth in paragraphs five through sixteen 
above that Walgreen violated the FHSA.
    20. The Commission does not make any determination that Walgreen 
knowingly violated the FHSA. The Commission and Walgreen agree that 
this Agreement is entered into for the purposes of settlement only.
    21. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, Walgreen 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 Walgreen failed to comply with the FHSA as aforesaid, and (4) 
to a statement of findings of fact and conclusions of law.
    22. For purposes of section 6(b) of the CPSA, 15 U.S.C. 2055(b), 
this matter shall be treated as if a complaint had been issued; and, 
the Commission may publicize the terms of the Settlement Agreement and 
Order.
    23. 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 
1118.20(e)-(h). 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 
16th day after the date it is published in the Federal Register.
    24. The parties further agree that the Commission shall issue the 
attached Order, incorporated herein by reference; and that a violation 
of the Order shall subject Walgreen to appropriate legal action.
    25. No agreement, understanding, representation, or interpretation 
not contained in this Settlement Agreement and Order may be used to 
vary or to contradict its terms.
    26. The provisions of the Settlement Agreement and Order shall 
apply to Walgreen and each of its successors and assigns.

Respondent Walgreen Co.

    Dated: October 28, 1993.
Vernon A. Brunner,
Exec. Vice President, Walgreen Co., 200 Wilmot Road, Deerfield, IL 
60015.

Commission Staff

David Schmeltzer,
Assistant Executive Director, Office of Compliance and Enforcement.

Alan H. Schoem,
Director, Division of Administrative Litigation, Office of Compliance 
and Enforcement.

    Dated: November 9, 1993.

Melvin I. Kramer,
Trial Attorney, Division of Administrative Litigation, Office of 
Compliance and Enforcement.

Order

    Upon consideration of the Settlement Agreement entered into between 
respondent Walgreen Co., a corporation, and the staff of the Consumer 
Product Safety Commission; and the Commission having jurisdiction over 
the subject matter and Walgreen; and it appearing that the Settlement 
Agreement is in the public interest, it is
    Ordered, That the Settlement Agreement be and hereby is accepted, 
as indicated below; and it is
    Further ordered, That upon final acceptance of the Settlement 
Agreement, Walgreen Co. shall pay to the order of the Consumer Product 
Safety Commission a civil penalty in the amount of fifty thousand and 
00/100 dollars ($50,000) within twenty (20) days after service of the 
Final Order and Decision in this matter.

    In the Matter of Walgreen Co.

    Provisionally accepted and Provisional Order issued on the 31st 
day of January, 1994.

    By order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 94-2873 Filed 2-7-94; 8:45 am]
BILLING CODE 6355-01-M