[Federal Register Volume 63, Number 17 (Tuesday, January 27, 1998)]
[Notices]
[Pages 3882-3883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1821]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 98-C0004]
In the Matter of COA, Inc., 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
Sec. 1118.20(e). Published below is a provisionally-accepted Settlement
Agreement with COA, Inc., a corporation, d/b/a Coaster Co. of America
``containing a civil penalty of $300,000.''.
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 February 11, 1998.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 98-C0004, Office of the
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.
FOR FURTHER INFORMATION CONTACT:
Howard N. Tarnoff, 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: January 20, 1998.
Sadye E. Dunn,
Secretary.
In the Matter of COA, INC., a Corporation d/b/a Coaster Co. of America
Settlement Agreement and Order
1. This Settlement Agreement and Order, entered into between COA,
Inc., d/b/a Coaster Co. of America, a corporation (hereinafter,
``COA''), and the staff of the Consumer Product Safety Commission
(hereinafter, ``staff''), pursuant to the procedures set forth in 16
CFR Sec. 1118.20, is a compromised 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 USC Sec. 2053.
3. Respondent COA is a corporation organized and existing under the
laws of the State of California with its principal corporate offices
located at 1298 Sandoval St., Santa Fe Springs, CA 90670. COA is an
importer and wholesaler of all types of home furnishings and furniture,
including baby cribs.
Staff Allegations
4. Section 4(a) of the Federal Hazardous Substances Act
(hereinafter, ``FHSA''), 15 U.S.C. Sec. 1263(a), prohibits the
introduction into interstate commerce of any banned hazardous
substance.
5. 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 creates an
unreasonable risk of serious injury or death, to immediately inform the
Commission of the defect or risk.
6. From approximately January 1993 through December 1996, COA
imported and introducted into interstate commerce approximately 940
full-size baby cribs, identified as model 2368.
7. From approximately June 1996 through April 1997, COA imported
and introduced into interstate commerce approximately 900 full-size
baby cribs, identified as model 2364.
8. The staff inspected and evaluated these 2 cribs and identified
multiple violations of the FHSA and its regulations, Requirements for
Full-Size Baby Cribs, 16 CFR Part 1508 (crib regulations). Any one of
the FHSA violations is sufficient to render each crib to be a ``banned
hazardous substance'' under the FHSA and the applicable crib
regulation.
9. Specifically, model 2368 violated the FHSA and its crib
regulations at 16 CFR Secs. 1508.4 (a) and (b) (spacing of crib
components); 16 CFR Sec. 1508.6(b) (requirements for hardware), and; 16
CFR Secs. 1508.9(b)(2) and (d) (identifying marks, warning statement,
and compliance declaration).
10. Specifically, model 2364 violated the FHSA and its crib
regulations at 16 CFR Sec. 1508.4(a); 16 CFR Sec. 1508.7(c)
(requirements for construction and finishing), and; 16 CFR
Secs. 1508.9(b) (1) and (2) and (c).
11. In addition, on or about August 21, 1996, COA received a test
report on a sample of model #2364 crib performed by the Detroit Testing
Laboratory, Inc. (DTL) on August 20, 1996. DTL had identified and
listed substantially all of the violations which the Commission's
evaluations subsequently identified. DTL also noted that the decorative
``S'' on the side rails may present a potential for entrapment and
strangulation. COA knew or should have known of these violations of the
FHSA on or about August 21, 1996, yet it failed to report this to the
Commission, as required by section 15(b) of the CPSA. Further, it
continued to sell these cribs until at least March 18, 1997.
12. Because these two cribs failed to meet the Requirements for
Full-Size Baby Cribs, each of them is a ``banned hazardous substance''
within the meaning of section 2(q)(1)(A) of the FHSA, 15 U.S.C. 1261
(q)(1)(A). The introduction into interstate commerce of these banned
hazardous substances by COA was a prohibited act pursuant to section
4(a) of the FHSA and was committed ``knowingly'', as that term is
defined in section 5(c)(5) of the FHSA, 15 U.S.C. 1264(c)(5).
13. Although COA had obtained sufficient information to reasonably
support the conclusion that these cribs 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 in a timely manner, as required by section 15(b) of the
CPSA. This is a violation of section 19(a)(4) of the CPSA, 15 U.S.C.
Sec. 2068(a)(4).
14. Respondent's failure to report to the Commission, as required
by section 15(b) of the CPSA, was committed ``knowingly'', as that term
is defined in
[[Page 3883]]
Section 20(d) of the CPSA, 15 U.S.C. Sec. 2069(d) and COA is subject to
civil penalties under Section 20 of the CPSA.
Response of COA
15. COA denies each and all of the staff allegations with respect
to these cribs.
Agreement of the Parties
16. The Commission had jurisdiction in this matter.
17. Upon final acceptance of the Settlement Agreement, COA, Inc.
shall pay to the Order of the U.S. Treasury a civil penalty in the
amount of three hundred thousand and 00/100 dollars ($300,000.00) to be
paid in three installments of $100,000. The first $100,000 payment will
be due within twenty (20) days after service upon Respondent of the
Final Order of the Commission accepting this Settlement Agreement.
Thereafter, COA, Inc. agrees to pay $100,000 within one hundred and ten
(110) days of the date of service of the Final Order, and $100,000
within two hundred (200) days of the first payment. Payment of the
total $300,000 civil penalty shall settle fully the staff's allegations
set forth in paragraphs 4 through 14 of the Settlement Agreement and
Order. Upon the failure by COA, Inc. to make a payment or upon the
making of a late payment (as determined by the postmark on the
envelope) by CSA (a) the entire amount of the civil penalty shall be
due and payable, and (b) 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. Secs. 1961 (a) and (b).
18. COA 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 the FHSA or section 15(b)
of the CPSA, 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.
19. This Settlement Agreement and Order settles any allegations of
violations of the FHSA or of section 15(b) of the CPSA regarding the
products described above.
20. Nothing in this Settlement Agreement and Order shall be
construed to preclude the CPSC from pursuing a corrective action or
other relief not described above.
21. This Settlement Agreement and Order becomes effective only upon
its final acceptance by the Commission and service of the incorporated
Order upon Respondent.
22. 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 Sec. 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).
23. Upon final acceptance of this Settlement Agreement and Order,
the Commission shall issue the attached Order, incorporated herein by
reference.
24. The provisions of this Settlement Agreement and Order shall
apply to COA and its successors and assigns.
25. 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.
26. COA agrees to immediately inform the Commission if it learns of
any incidents involving the products and alleged defects identified
above.
27. 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.
COA, Inc.
Dated: December 11, 1997.
Michael Yeh,
President of COA, Inc.
The Consumer Product Safety Commission.
Alan H. Scheom,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Director, Division of Administrative Litigation, Office of Compliance.
Dated: December 17, 1997.
Melvin I. Kramer,
Trial Attorney, Division of Administrative Litigation, Office of
Compliance.
In the Matter of COA, Inc., a Corporation d/b/a Coaster Company of
America
Order
Upon consideration of the Settlement Agreement between Respondent
COA, Inc., a corporation, d/b/a Coaster Company of America and the
staff of the Consumer Product Safety Commission, and the Commission
having jurisdiction over the subject matter and over COA, Inc., and it
appearing the Settlement Agreement is in the public interest, it is
Ordered, that the Settlement Agreement be and hereby is accepted,
and it is
Further ordered, that upon final acceptance of the Settlement
Agreement, COA, Inc. shall pay to the Order of the U.S. Treasury a
civil penalty in the amount of three hundred thousand and 00/100
dollars ($300,000.00) to be paid in three installments of $100,000. The
first $100,000 payment will be due within twenty (20) days after
service upon Respondent of the Final Order of the Commission accepting
this Settlement Agreement. Thereafter, COA, Inc. shall pay $100,000
within one hundred and ten (110) days of the date of service of the
Final Order, and $100,000 within two hundred (200) days of the first
payment. Payment of the total $300,000 civil penalty shall settle fully
the staff's allegations set forth in paragraphs 4 through 14 of the
Settlement Agreement and Order. Upon the failure by COA, Inc. to make a
payment or upon the making of a late payment (as determined by the
postmark on the envelope) by CSA: (a) The entire amount of the civil
penalty shall be due and payable, and (b) 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. Secs. 1961 (a) and (b).
Further ordered, COA, Inc. shall immediately inform the Commission
if it learns of any incidents involving the products and alleged
defects identified herein.
Provisionally accepted and Provisional Order issued on the 20th
day of January, 1998.
By Order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 98-1821 Filed 1-26-98; 8:45 am]
BILLING CODE 6355-01-M