[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Notices]
[Pages 31085-31086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14881]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 97-C0006]
In the Matter of the Toro Company, a Corporation; Provisional
Acceptance of a Settlement Agreement and Order
AGENCY: Consumer Product Safety Commission.
ACTION: Provisional Acceptance of a Settlement Agreement under the
Consumer Product Safety Act.
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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 Section
1118.20(e). Published below is a provisionally-accepted Settlement
Agreement with the Toro Company, 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 June 23, 1997.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 97-C0006, Office of the
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.
FOR FURTHER INFORMATION CONTACT:
Melvin I. Kramer, Trial Attorney, Office of Compliance and Enforcement,
Consumer Product Safety Commission, Washington, D.C. 20207; telephone
(301) 504-0626.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: June 3, 1997.
Sadye E. Dunn,
Secretary.
Settlement Agreement and Order
1. This Settlement Agreement and Order, entered into between the
Toro Company, a corporation (hereinafter, ``Toro''), and the staff of
the Consumer Product Safety Commission (hereinafter, ``staff''),
pursuant to the procedures set forth in 16 CFR 1118.20, is a compromise
resolution of the matter described herein, without a hearing or
determination of issues of law and fact.
The Parties
2. The ``Staff'' is the staff of the Consumer Product Safety
Commission (hereinafter, ``Commission''), an independent federal
regulatory agency of the United States government, established by
Congress pursuant to section 4 of the Consumer Product Safety Act
(hereinafter, ``CPSA''), as amended, 15 U.S.C. Sec. 2053.
3. Respondent Toro is a corporation organized and existing under
the laws of the State of Delaware with its principal corporate offices
located at 8111 Lyndale Ave. South, Bloomington, MN 55420.
Staff Allegations
4. Section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), requires a
manufacturer of a consumer product who, inter alia, obtains information
that reasonably supports the conclusion that the product contains a
defect which could create a substantial product hazard or that the
product creates an unreasonable risk of serious injury or death, to
immediately inform the Commission of the defect or risk.
Count I
5. Among other lawn and garden products manufactured and
distributed by Toro, between 1986 and 1988 Toro manufactured certain
rear engine riding lawnnmowers (hereinafter, ``riding mowers''), model
#'s 51638, 56145, 56150, 56155, 56170, and 56175, 8-12 horsepower
mowers with 32'' cutting decks. Toro manufactured and distributed
approximately 81,000 of these mowers for sale to and use by consumers
in the United States between 1986 and 1988.
6. The rear wheel axle bolt of the 1986-88 product version of these
riding mowers had a short shank, thereby exposing the bolt threads to
shear forces beyond its capacity and subjecting the bolt to fatigue and
breakage. If the bolt breaks, the brakes may fail and the driver may be
unable to stop the riding mower with the brakes.
7. In late June of 1989, after learning of at least 4 incidents of
bolt failure, Toro sent letters to known customers asking them to
replace the original bolt with a replacement bolt of a different
design. However, Toro failed to notify the Commission.
8. In April of 1995, the staff learned of this bolt problem and
sent a letter or inquiry to Toro. Toro responded on June 5, 1995 and
filed a full report with the Commission.
9. By April of 1995, Toro had notice of approximately 7 incidents
associated with the failure of the original axle bolt, in all of which
cases, consumers or dealers clearly identified the problem and alleged
a loss of control of the riding mower. Several of these consumers also
alleged that they suffered personal injury.
10. Although Toro obtained sufficient information to reasonably
support the conclusion that the riding mowers contained a defect which
could create a substantial product hazard, or created an unreasonable
risk of serious injury or death, it failed to report such information
to the Commission as required by section 15(b) of the CPSA, 15 U.S.C.
Sec. 2064(b). This is a violation of section 19(a)(4) of the CPSA, 15
U.S.C. Sec. 2068(a) (4).
11. Toro's failure to report to the Commission, as required by
section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), was committed
``knowingly'', as that term is defined in Section 20(d) of the CPSA, 15
U.S.C. Sec. 2069(d), and Toro is subject to civil penalties under
Section 20 of the CPSA.
Count II
12. Approximately 6,500 of Toro's Wheel Horse Yard and Garden
Tractors (Model #264-6) and its Ford and New Holland brand LS 25 and 45
Gear Yard Tractors, six-speed riding tractors (hereinafter, ``yard
tractors'') were sold to consumers nationwide from January 1994 to May
1996 for about $2,500 each.
13. These tractors had brakes or braking systems, which, in a
number of cases, failed prematurely, suddenly and without warning. If
the brakes fail in this manner, while operating the yard tractor on a
hill, the driver may be unable to stop the yard tractors with the
brakes.
14. From 1994-1996, Toro learned of approximately 24 reports of
failures of the brakes on these yard tractors. In 2 incidents the user
suffered fractured limbs.
15. In March and May of 1995, Toro issued Service Bulletins to its
authorized dealers and service centers advising them of the problem and
asking them to correct them in response to complaints they receive.
16. Although Toro did file a report with the Commission staff in
April of 1996, Toro had obtained sufficient information to reasonably
support the conclusion that the yard tractors contained a defect which
could create a substantial product hazard, or created an unreasonable
risk of serious injury or death, substantially before that time.
Therefore, it failed to make such a report on a timely basis, as
required by section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b). This is
a violation of section
[[Page 31086]]
19(a)(4) of the CPSA, 15 U.S.C. Sec. 2068(a)(4).
17. Toro's failure to report to the Commission as required by
section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), was committed
``knowingly'' as that term is defined in section 20(d) of the CPSA, 15
U.S.C. Sec. 2069(b), and Toro is subject to civil penalties under
section 20 of the CPSA, 15 U.S.C. Sec. 2069.
Response of Toro
18. Toro denies each and all of the staff allegations with respect
to the products identified in the Agreement. Toro also denies the
allegations that its products identified in paragraph 5 and 12 above
contained a defect which created or could create a substantial product
hazard within the meaning of section 15(a) of the CSPA, 15 U.S.C.
Sec. 2064(a), or created an unreasonable risk of serious injury or
death. Toro further denies any obligation to report information to the
Commission under section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b),
with respect to the products described in paragraphs 5 and 12 above and
asserts that its report with respect to the products listed in
paragraph 12 was on a timely basis, having been filed after Toro
exercised its statutory discretion and determined that only then did a
report need be filed. Toro makes no admission of any fault, liability
or statutory violation whatsoever. Toro alleges further that there are
no design or manufacturing defects with respect to any of the products
covered by this Agreement and asserts that the incidents involving the
use of the products enumerated in paragraphs 5 and 12 were caused by
unusual conditions or through inappropriate use by the operators. Toro
does not admit any liability for any accidents or injuries from the
products covered by the Agreement. Additionally, Toro has entered into
this Settlement Agreement in the interest of avoiding the time and cost
of litigation.
19. Specifically and without limitation on any of the denials set
out above, Toro states that in each of the cases, as set forth above,
it appropriately and responsibly took care of the customers, reworked
the products on a timely basis, notified its customers, and issued
service bulletins to dealers and distributors. It is Toro's position
that the actions taken relating to products referenced in paragraph 5
above were undertaken to deal with non-reportable safety or maintenance
issues and to assure customer satisfaction. With respect to the
products referenced in paragraph 12 above, only one of the customers
claimed sudden, unexplained failure of the brakes. Gradual fading of
the brakes, of which an operator would be aware, was more the rule.
Agreement of the Parties
20. The Commission has jurisdiction in this matter for purposes of
entry and enforcement of this Settlement Agreement and Order.
21. Toro and the staff agree that this Settlement Agreement does
not establish any legal or factual conclusions.
22. Toro knowingly, voluntarily and completely waives any rights it
may have (1) To an administrative or judicial hearing with respect to
the Commission's claim for a civil penalty, (2) to judicial review or
other challenge or contest of the validity of the Commission's action
with regard to its claim for a civil penalty, (3) to a determination by
the Commission as to whether a violation of Section 15(b) of the CPSA,
15 U.S.C. Sec. 2064(b), has occurred, (4) to a statement of findings of
fact and conclusions of law with regard to the Commission's claim for a
civil penalty, and (5) to any claims under the Equal Access to Justice
Act.
23. This Settlement Agreement and Order settles any allegations of
violation of section 15(b) of the CPSA regarding the mowers and
tractors described above. It further settles and discharges any claims
for violation of any such reporting obligations with respect to old
matters which were the subject of a search conducted by Toro at the
staff's request, filed by Toro during the negotiations on the subject
wheel bolt case, and reviewed by the staff without opening new files.
This Settlement Agreement and Order becomes effective only upon its
final acceptance by the Commission and service of the incorporated
Order upon Respondent.
24. 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, in accordance with 16 CFR
Sec. 1118.20(f).
25. Upon final acceptance of this Settlement Agreement and Order,
the Commission shall issue the attached Order, incorporated herein by
reference.
26. The provisions of this settlement Agreement and Order shall
apply to Toro and its successors and assigns.
27. For purposes of section 6(b) of the CPSA, 15 U.S.C.
Sec. 2055(b), this matter shall be treated as if a complaint had
issued, and the Commission may publicize the terms of the Settlement
Agreement and Order.
28. This 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.
Dated: May 9, 1997.
The Toro Company.
J. Lawrence McIntyre,
Vice President, Secretary, and General Counsel.
The Consumer Product Safety Commission. David Schmeltzer,
Associate Executive Directors, Office of Compliance, Eric L. Stone,
Director, Division of Administrative Litigation, Office of
Compliance.
Dated: May 15, 1997.
By:
Melvin I. Kramer,
Trial Attorney, Division of Administrative Litigation, Office of
Compliance.
Order
Upon consideration of the Settlement Agreement between Respondent
The Toro Company, a corporation, and the staff of the Consumer Product
Safety Commission, and the Commission having jurisdiction over the
subject matter and over The Toro Company, and it appearing the
Settlement Agreement is in the public interest, it is
Ordered, that the Settlement Agreement be and hereby isaccepted,
and it is
Further Ordered, that within 20 days of the service of the Final
Order upon Respondent, The Toro Company shall pay to the order of the
U.S. Treasury a civil penalty in the amount of two hundred and fifty
thousand dollars ($250,000).
Provisionally accepted and Provisional Order issued on the 3rd day
of June, 1997.
By Order of the Commission.
Sadye E. Dunn,
Secretary Consumer Product Safety Commission.
[FR Doc. 97-14881 Filed 6-5-97; 8:45 am]
BILLING CODE 6355-01-M