[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