[Federal Register Volume 66, Number 68 (Monday, April 9, 2001)]
[Notices]
[Pages 18450-18454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8575]



[[Page 18450]]

=======================================================================
-----------------------------------------------------------------------

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 01-C0006]


Cosco, Inc., a Corporation, and Safety 1st, Inc., a Corporation, 
Subsidiaries of Dorel U.S.A., Inc., Provisional Acceptance of a 
Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

-----------------------------------------------------------------------

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 
Cosco, Inc., a corporation and Safety 1st, Inc., a corporation, 
subsidiaries of Dorel U.S.A., Inc., containing a civil penalty of 
$1,300,000.

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 April 24, 2001.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 01-C0006, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Ronald G. Yelenik, Trial Attorney, 
Office of Compliance and Enforcement, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0626, 1351.

SUPPLEMENTARY INFORMATION:   
    The text of the Agreement and Order appears below.

    Dated: April 2, 2001.
Todd A. Stevenson,
Deputy Secretary.

[CPSC Docket No. 01-C0006]

In the Matter of Cosco, Inc. a corporation, and Safety 1st, Inc. a 
corporation subsidiaries of Dorel U.S.A., Inc.; Settlement 
Agreement and Order

    (1) This Settlement Agreement, made by and between the staff (``the 
staff'') of the U.S. Consumer Product Safety Commission (the 
``Commission'') and both Cosco, Inc. (``Cosco''), a corporation, and 
Safety 1st, Inc. (``Safety 1st''), a corporation, in accordance with 16 
CFR Sec. 1118.20 of the Commission's Procedures for Investigations, 
Inspections, and Inquiries under the Consumer Product Safety Act 
(``CPSA''), is a settlement of the staff allegations set forth below. 
This settlement is intended to resolve all pending civil penalty 
matters between Cosco and Safety 1st and the Commission.

The Parties

    (2) The Commission is an independent federal regulatory agency 
responsible for the enforcement of the Consumer Product Safety Act, 15 
U.S.C. Secs. 2051-2084.
    (3) Cosco is a corporation organized and existing under the laws of 
the State of Indiana with its principal corporate offices located in 
Columbus, Indiana. Cosco is a subsidiary of Dorel U.S.A., Inc., located 
in Columbus, Indiana, which is, in turn, a subsidiary of Dorel 
Industries, Inc. of Montreal, Canada.
    (4) Safety 1st is a corporation organized and existing under the 
laws of the State of Massachusetts with its principal corporate offices 
located in Canton, Massachusetts. Since June 2000, Safety 1st has been 
a subsidiary of Dorel U.S.A., Inc., located in Columbus, Indiana.

Staff Allegations; Cosco Full-Size Metal Cribs

    (5) Between January 1995 and May 1997, Cosco manufactured and sold 
nationwide, approximately 390,000 Full-Size Metal Baby Cribs 
(``cribs'') in the following models: 10T01, 10T04, 10T05, 10T06, 10T08, 
10T14, 10T84, 10T85, 10T94, 10T95, 10M06, 10M84, 10M85, and 10M94.
    (6) The cribs are consumer products and Cosco is a manufacturer of 
consumer products, which were ``distributed in commerce'' as those 
terms are defined in sections 3(a)(1), (4), (11) and (12) of the CPSA, 
15 U.S.C. Secs. 2052(a)(1), (4), (11) and (12).
    (7) The cribs are defective as designed and produced because the 
mattress platform may be interchanged with the side rail. In addition, 
the assembly instructions are defective in that they are not adequately 
clear to assure that the consumer recognizes the distinction between 
the side rail and the mattress platform, and/or appreciates the safety 
significance of substituting one for the other. CPSC standards limit 
the space between side rail slats to no more than 2\3/8\ inches to 
prevent strangulation. 16 CFR 1508.4. If the crib's mattress platform 
were used as a side rail, the distance between the slats would be more 
than 5 inches. Spacing this large creates a gap that may entrap an 
infant, causing serious injury or death.
    (8) Between April 13, 1995 and June 27, 1997, Cosco received 
reports of approximately 47 incidents of cribs being mis-assembled with 
the mattress platform used as a side rail. Twenty-four of these 
incidents reported infants becoming entrapped in the spaces of the 
mattress platform, some by their heads or necks. On June 24, 1997, an 
eight-month-old infant asphyxiated when he allegedly became wedged 
between the spaces of the mattress platform, which was being used as a 
side rail.
    (9) During the time period mentioned in paragraph 8, Cosco changed 
its warning label and assembly instructions. However, Cosco failed to 
inform consumers about the risk of strangulation created by using the 
platform as a side rail.
    (10) Despite being aware of the information set forth in paragraphs 
7 through 9 above, Cosco did not file a written report with the 
Commission until June 27, 1997, and then, only after the staff asked 
Cosco to do so.
    (11) Although Cosco had obtained sufficient information to 
reasonably support the conclusion that the cribs contained a defect 
which could create a substantial products hazard, or created an 
unreasonable risk of serious injury or death long before June 27, 1997, 
it failed to report such information to the Commission, as required by 
section 15(b) of the CPSA. This failure to report violates section 
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    (12) Cosco knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. Sec. 2069(d), and Cosco is subject to civil 
penalties under section 20 of the CPSA.

Cosco Model ``M'' Crib Mattresses

    (13) Between July 1994 and September 1997, Cosco manufactured and 
sold nationwide, approximately 62,000 Model ``M'' Cribs (Model No's 
10M06, 10M84, 10M85 and 10M94) with mattresses measuring 52 inches 
long, by 27\1/2\ inches wide, by 3\3/4\ inches thick (``mattresses'').
    (14) The mattresses are consumer products and Cosco is a 
manufacturer of consumer products, which are ``distributed in 
commerce'' as those terms are defined in sections 3(a)(1), (4), (11) 
and (12) of the CPSA, 15 U.S.C. Secs. 2052(a)(1), (4), (11) and (12).
    (15) The mattresses are defective because the mattresses can easily 
compress. When a baby stands up in the subject crib, the mattresses can 
compress and be pushed between the bars on the crib's mattress 
platform. If this occurs, the baby can slip between the bars on the 
crib's platform and become entrapped, causing serious injury or death.

[[Page 18451]]

    (16) Between April 10, 1996 and October 16, 1998, Cosco received 
reports of approximately 10 incidents of the mattress compressing and 
causing the infant to slip partially through the bars on the mattress 
platform, thereby causing some infants to become entrapped. On or about 
July 18, 1998, an 11-month-old infant died when he fell feet first 
through an opening in the mattress platform and became entrapped by the 
neck.
    (17) In August 1997, after learning of at least six reports of 
mattress platform entrapment, Cosco changed the design specifications 
of the mattresses by increasing the compression from 30 to 42 pounds in 
an attempt to increase the stiffness of the mattresses and to prevent 
the mattress from being compressed between the bars on the crib's 
mattress platform.
    (18) Despite being aware of the information set forth in paragraphs 
15 through 17 above, Cosco did not fully inform the Commission about 
the hazard presented by these mattresses until October 16, 1998, and 
then, only after the staff asked it to do so.
    (19) Although Cosco has obtained sufficient information to 
reasonably support the conclusion that the mattresses contained a 
defect which could create a substantial product hazard, or created 
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. By falling to report, Cosco violated section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4).
    (20) Cosco knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. 2069(d), and Cosco is subject to civil penalties 
under section 20 of the CPSA.

Cosco Two Ways Tandem Strollers

    (21) Between February 1997 and February 1998, Cosco imported and 
sold nationwide, approximately 57,000 Two Ways Tandem Strollers, models 
01-6744 and 01-645 (``strollers''). Goodbaby Inc. of Jiangsu, China 
manufactured the strollers. Cosco designed the strollers so that two 
babies can sit behind one another. Also, the front seat of the stroller 
reverses so children can ride face-to-face.
    (22) The strollers are consumer products and Cosco is a 
manufacturer of consumer products, which are ``distributed in 
commerce'' as those terms are defined in sections 3(a)(1), (4), (11) 
and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    (23) The strollers are defective because the plastic locks on the 
folding mechanisms can break during use, causing the strollers to 
suddenly collapse. If this occurs, infants siting in the strollers can 
suffer injuries, including head injuries from hitting the pavement. The 
child's arms, hands or fingers can be cut if they are on the locking 
mechanism when the stroller collapses.
    (24) Between mid-1997 and November 23, 1998, Cosco received 
approximately 3,000 complaints concerning failure of the locking 
mechanisms on the strollers, including 250 reports that the stroller 
collapsed causing 200 injuries to infants. The injuries included head 
injuries, a fractured forearm, finger and arm lacerations requiring 
stitches, and bumps, bruises and cuts.
    (25) Between February 1998 and October 1998, Cosco redesigned the 
locking mechanism of the strollers. In February 1998, after receiving a 
number of complaints from one of its retailers concerning the locking 
mechanism, Cosco instructed the manufacturer of the strollers to cease 
production. In late March 1998, the manufacturer began producing 
strollers with a redesigned locking mechanism. At about the same time, 
Cosco added a secondary locking mechanism to all strollers in inventory 
and to those in the inventory of one of its retailers in an attempt to 
prevent the locking mechanism from failing and to prevent the strollers 
from collapsing. Later, in June 1998, Cosco offered consumers ``upon 
request,'' a repair consisting of a secondary locking mechanism to 
prevent stroller collapse. In October 1998, Cosco sent letters to 
Spiegel catalog customers who had purchased the strollers and offered 
to send them the secondary locking mechanism.
    (26) Despite being aware of the information set forth in paragraphs 
23 through 25 above, Cosco did not inform the Commission about this 
matter until November 23, 1998, and then, only after the staff asked it 
to do so.
    (27) Although Cosco had obtained sufficient information to 
reasonably support the conclusion that the strollers 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. By failing to report Cosco violated section 19(a)(4) of the CPSA, 
15 U.S.C. 2068(a)(4).
    (28) Cosco knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. Sec. 2069(d), and Cosco is subject to civil 
penalties under section 20 of the CPSA.

Cosco Arriva and Turnabout Infant Car Seats/Carriers

    (29) Between March 1995 and September 1997, Cosco manufactured and 
sold nationwide, approximately 670,000 rear-facing Arriva and Turnabout 
Infant Car Seats/Carriers (``carriers''). The Arriva bears the 
following model numbers: 02-665, 02-729, 02-731, 02-732, 02-733, 02-
751, 02-756, and 02-757. The Turnabout model numbers are as follows: 
02-758, 02-759, 02-760, 02-761, 02-762, 02-763, 02-764, 02-765, and 02-
667. The products are infant carriers that can also be used as a car 
seat.
    (30) The carriers are consumer products and Cosco is a manufacturer 
of consumer products, which are ``distributed in commerce'' as those 
terms are defined in sections 3(a)(1), (4), (11) and (12) of the CPSA, 
15 U.S.C. 2052(a)(1), (4), (11) and (12).
    (31) The carriers are defective because when the carrier portion is 
used to carry a child, the handle locks on each side of the seat can 
unexpectedly release, causing the seat to flip forward. If this occurs, 
the infant can fall to the ground and suffer serious injuries.
    (32) Between June 27, 1995 and May 13, 1998, Cosco received reports 
of approximately 53 incidents involving release of the handle locks of 
the carriers. Some of these incidents caused injuries to infants. One 
infant sustained a skull fracture when he fell down the stairs after 
the handle lock of the carrier failed.
    (33) On September 27, 1997, Cosco modified the design of the handle 
lock lever to strengthen it. At the time, Cosco knew of approximately 
44 incidents involving failure of the products' handle locks, some of 
which involved injuries.
    (34) Despite being aware of the information set forth in paragraphs 
31 through 33 above, Cosco did not fully inform the Commission about 
this matter until May 13, 1998, and then, only after the staff asked it 
to do so.
    (35) Although Cosco had obtained sufficient information to 
reasonably support the conclusion that the carriers contained a defect 
which could create a substantial product hazard, or create 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. By failing to report, Cosco violated section 19(a)(4) of the 
CPSA, 15 U.S.C. Sec. 2068(a)(4).
    (36) Cosco knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. 2069(d), and Cosco is subject to civil penalties 
under section 20 of the CPSA.

[[Page 18452]]

Cosco Option 5 High Chairs

    (37) Between December 1997 and August 2000, Cosco manufactured and 
sold nationwide, approximately one million Option 5 High Chairs, Model 
no. 03-286 (``high chairs'').
    (38) The high chairs are consumer products and Cosco is a 
manufacturer of consumer products, which are ``distributed in 
commerce'' as those terms are defined in sections 3(a)(1), (4), (11) 
and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    (39) The high chairs are adjustable and have both recline and 
upright positions. In the recline position, the high chairs are 
defective because the seats can separate from the frame and fall to the 
ground. The high chairs are defective because in the upright position 
the seats can slip from their set height position to the lowest 
position or can fall to the ground. Additionally, Cosco sold some seats 
with a metal restraint anchor that can slip through the back of the 
seat allowing the child to fall to the ground. When infants and 
toddlers fall they can suffer head, face and bodily injuries.
    (40) Between March 1998 and March 2000, Cosco received reports of 
approximately 93 incidents of seat slippage or collapse of the high 
chairs. At least 37 of these incidents caused injuries to infants. Most 
injuries were to the head or face of the child. In five incidents, the 
child was monitored for a possible concussion.
    (41) In August 1999, Cosco redesigned the high chair in a number of 
ways. With respect to the upright position, Cosco reinforced the pegs 
and increased the size of the latch that held the seat in place while 
in such position. In addition, in lieu of the old safety restraint belt 
with metal buckle, the firm introduced a revised safety restraint belt 
with a thick plastic buckle that could not fit through the opening in 
the seat back. Regarding the recline position, Cosco added some 
reinforcing ribs to the towel bar, modifying its product assembly 
instructions to emphasize the need to use the safety handle, and added 
warnings to the back of the seat to further emphasize this point.
    (42) Despite being aware of the information set forth in paragraphs 
39 through 41 above, Cosco did not provide any information to the 
Commission about this matter until May 5, 1999, when our field staff 
asked for the information during an establishment inspection of the 
firm.
    (43) Although Cosco had obtained sufficient information to 
reasonably support the conclusion that the high chairs contained a 
defect which could create a substantial product hazard, or created an 
unreasonable risk of serious injury death, it failed to report such 
information to the Commission, as required by section 15(b) of the 
CPSA. By failing to report, Cosco violated section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4).
    (44) Cosco knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. Sec. 2069(d), and Cosco is subject to civil 
penalties under section 20 of the CPSA.

Safety 1st Mobile 4 Wheelin' Walkers

    (45) Between 1998 and 1999, Safety 1st manufactured and sold 
nationwide, approximately 170,000 Mobile 4 Wheelin' Walkers, Models 
45701, 45701A, and 45701B (``walkers'').
    (46) The walkers are consumer products and Safety 1st is a 
manufacturer of consumer products, which are ``distributed in 
commerce'' as those terms are defined in sections 3(1)(1), (4), (11) 
and (12) of the CPSA, 15 U.S.C. Secs. 2052(a)(1), (4), (11) and (12).
    (47) The walkers are traditional baby walkers, designed to look 
like miniature automobiles, featuring various gadgets such as a 
telephone, antenna, and steering wheel.
    (48) The walkers are defective because young children who use the 
walkers can be expected to mouth the steering wheel of the walker. A 
child could get its teeth caught in the hollow underside of the 
steering wheel. If this should happen, a child's teeth can be pulled 
out, causing long term damage due to migration of surrounding teeth, 
and speech impairment and other development disabilities. Safety 1st 
received reports of at least 6 incidents of children getting their 
teeth caught in the steering wheel. At least five children lost a tooth 
in these incidents. In at least 3 of these incidents, children lost 2 
or more teeth in this manner.
    (49) The walkers are also defective because the buttons on the 
walker's phone can break off or the telephone pad can become loose, 
presenting a possible choking hazard to children. Safety 1st received 
at least 24 reports of the buttons of the phone breaking off or the 
telephone pad coming loose. At least one child's caregiver found the 
child with plastic pieces from the phone in its mouth.
    (50) The walkers are also defective because the antennas on the 
walkers are elongated and sharp, and could strike a child in the eye or 
face. Safety 1st received at least 3 reports of children being poked or 
bruised by the antenna, including a report of one child being stuck in 
the eye.
    (51) During the time period mentioned in paragraph 45 above, Safety 
1st, in an apparent response to some of the aforementioned incidents, 
made a number of changes to the walkers, including the addition of a 
revised keypad and phone assembly, as well as the removal of the 
antenna.
    (52) Despite being aware of the information set forth in paragraphs 
49 through 51 above, Safety 1st did not file a written report with the 
Commission until September 22, 1999, regarding the tooth loss hazard 
presented by the steering wheel. Furthermore, it wasn't until February 
22, 2000, in response to a request by the Commission staff, that Safety 
1st filed a written report with regard to the hazard presented by the 
antenna, as well as the choking hazard presented by the buttons of the 
phone breaking off or the telephone pad coming loose.
    (53) Although Safety 1st obtained sufficient information to 
reasonably support the conclusion that the walkers contained a number 
of defects 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. By failing to comply with section 15(b) of the CPSA, Safety 1st 
violated section 19(a)(4) of the CPSA, 15 U.S.C. Sec. 2068(a)(4).
    (54) Safety 1st knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. 2069(d), and Safety 1st is subject to civil 
penalties under section 20 of the CPSA.

Safety 1st Wipe Warmers

    (55) Between December 1999 and January 2001, Safety 1st 
manufactured and sold nationwide, approximately 101,000 Wipe Warmers, 
model number 26133 (``wipe warmers''). The wipe warmer is an electrical 
appliance used to warm baby wipes.
    (56) The wipe warmers are consumer products and Safety 1st is a 
manufacturer of consumer products, which are ``distributed in 
commerce'' as those terms are defined in sections 3(a)(1), (4), (11) 
and (12) of the CPSA, 15 U.S.C. Secs. 2052(a)(1), (4), (11) and (12).
    (57) The wipe warmers are defective because the bottom of the wipe 
holding chamber can crack during normal use. If this occurs, moisture 
from the wipes can drain into the electrical components of the unit and 
cause an electric shock hazard to a consumer touching the wipes.

[[Page 18453]]

    (58) Between November 2000 and January 2001, Safety 1st received 
reports of at least 17 incidents in which the wipe holding chamber 
cracked. No injuries or shocks have been reported.
    (59) In approximately December 2000, Safety 1st made two design 
changes to the wipe warmer to address the potential for cracking in the 
wipe holding chamber. Safety 1st thickened the plastic surface on which 
the wipes sit by 0.6mm. In addition, Safety 1st changed the wipe warmer 
molding process. Both changes were intended to strengthen the plastic 
bottom of the wipe warmer to prevent any potential degradation from 
chemicals used in certain brands of wipes. Safety 1st manufactured 
approximately 18,000 wipe warmers with the aforementioned design 
changes. However, Safety 1st did not distribute the products.
    (60) Despite being aware of the information set forth in paragraphs 
57 through 59 above, Safety 1st did not provide any information to the 
Commission about this matter until January 22, 2001, and then only 
after first being requested to do so by the staff.
    (61) Although Safety 1st had obtained sufficient information to 
reasonably support the conclusion that the wipe warmers 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. Safety 1st violated section 19(a)(4) of the CPSA.
    (62) Safety 1st knowingly committed this failure to report to the 
Commission, as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. 2069(d), and Safety 1st is subject to civil 
penalties under section 20 of the CPSA.

Response of Cosco and Safety 1st

    (63) Cosco and Safety 1st deny that: (a) The products described in 
paragraphs 5 through 62, above, contain any defect which could create a 
substantial product hazard described in section 15(a) of the CPSA, 15 
U.S.C. section 2064(a); (b) these products create an unreasonable risk 
of serious injury or death; (c) they violated the reporting 
requirements of section 15(b) of the CPSA, 15 U.S.C. section 2064(b), 
including as that statute is interpreted in 16 CFR part 1115; and (d) 
that any other violation of law occurred warranting imposition of a 
civil penalty. Cosco and Safety 1st deny any liability or wrongdoing of 
any kind.
    (64) Cosco and Safety 1st are entering into this Settlement 
Agreement for settlement purposes only, to avoid incurring additional 
legal costs and to ``bring closure'' to this matter.
    (65) Cosco and Safety 1st further assert as a general matter that 
they received very few complaints concerning the above-mentioned 
products relative to the numbers of products in distribution; that they 
developed product improvements to address the complaints on the various 
products in question; that they considered the complaints and the 
reporting requirements of the CPSA; that they made their judgments 
about reporting in good faith based on their understanding of the 
requirements of the law; and, that they did not ``knowingly'' violate 
any reporting requirements.
    (66) With respect to the deaths referenced in paragraphs 8 and 16, 
Cosco denies the staff allegations and further asserts that each 
incident involved misassembly and misuse of the products in question.
    (67) The CPSC staff allegations regarding Safety 1st products 
detailed in paragraphs 5 through 62 above, occurred prior to Safety 
1st's acquisition by Dorel in June, 2000.

Agreement of the Parties

    (68) The Commission has jurisdiction over these matters and over 
Cosco and Safety 1st under the CPSA, 15 U.S.C. 2051-2084. By entering 
this Settlement Agreement, Cosco is not conceding that the Arriva and 
Turnabout Infant Car Seat/Carriers are ``consumer products'' within the 
scope of the Consumer Product Safety Act.
    (69) Cosco agrees to pay to the order of the U.S. Treasury a civil 
penalty in the amount of one million three hundred thousand dollars 
($1,300,000) in settlement of this matter. The first payment of six 
hundred fifty thousand dollars ($650,000) is payable by Cosco within 20 
calendar days of receiving service of the final Settlement Agreement 
and Order. The second and final payment of six hundred fifty thousand 
dollars ($650,000) is payable by Cosco within one calendar year of the 
date the first payment is due. If Cosco fails to make a payment on 
schedule, the unpaid outstanding balance shall accrue and be paid at 
the federal legal rate of interest under the provisions of 28 U.S.C. 
1961(a) and (b).
    (70) Safety 1st agrees to pay to the order of the U.S. Treasury a 
civil penalty in the amount of four hundred fifty thousand dollars 
($450,000), in settlement of this matter. The first payment of two 
hundred twenty five thousand dollars ($225,000) is payable within 20 
calendar days of receiving service of the final Settlement Agreement 
and Order. The second and final payment of two hundred twenty five 
thousand dollars ($225,000) is payable by Safety 1st within one 
calendar year of the date the first payment is due. If Safety 1st fails 
to make a payment on schedule, the unpaid balance of the entire civil 
penalty shall be due and payable, and 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. 1961(a) and (b).
    (71) Cosco and Safety 1st knowingly, voluntarily and completely 
waive any rights they may have in the above captioned case: (i) To the 
issuance of a Complaint in this matter; (ii) to an administrative or 
judicial hearing with respect to the staff's allegations cited herein; 
(iii) to judicial review or other challenge or contest of the validity 
of the Settlement Agreement or the commission's Order, (iv) to a 
determination by the Commission as to whether a violation of section 
15(b) of the CPSA, has occurred; (v) to a statement of findings of fact 
and conclusions of law with regard to the staff's allegations; and (vi) 
to any claims under the Equal Access to Justice Act.
    (72) Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, the Commission shall place this Settlement 
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 requests not 
to accept the Settlement Agreement and order within 15 days, the 
Settlement 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 1118.20(f).
    (73) This Settlement Agreement and Order becomes effective after 
its final acceptance by the Commission and service upon Cosco and 
Safety 1st. Upon final acceptance of this Settlement Agreement by the 
Commission, the Commission may publicize the terms and basis for the 
Settlement Agreement and Order, without regard to any restriction under 
15 U.S.C. 2055(b).
    (74) Cosco and Safety 1st agree to the entry of the attached Order, 
which is incorporated herein by reference and agree to be bound by its 
terms. This Settlement Agreement and Order is binding upon Cosco and 
Safety 1st, their parent, and each of their assigns or successors.
    (75) This Settlement Agreement and Order resolves the matters set 
forth above in paragraphs 5 through 62.

[[Page 18454]]

    (76) Nothing in this Settlement Agreement and Order shall be 
construed to preclude the Commission from pursuing a corrective action 
or other relief not described above.
    (77) If, after the effective date hereof, any provision of this 
Settlement this Agreement and Order is held to be illegal, invalid, or 
unenforceable under present or future laws effective during the terms 
of the Settlement Agreement and Order such provision shall be fully 
severable. The rest of the Settlement Agreement and Order shall remain 
in full effect, unless the Commission and Cosco and Safety 1st 
determine that severing the provision materially impacts the purpose of 
the Settlement Agreement and Order.
    (78) This Settlement Agreement and Order shall not be waived, 
changed, amended, modified, or otherwise altered, except in writing 
executed by the party against whom such amendment, modification, 
alteration, or waiver is sought to be enforced, and approved by the 
Commission.
    (79) Agreements, understandings, representations, or 
interpretations made outside this Settlement Agreement and Order may 
not be used to vary or contradict its terms. This Settlement Agreement 
may be used in interpreting the Order.

    Dated: March 22, 2001.

    By:

Donald March,
Chief Financial Officer, Cosco, Inc. and Safety 1st, Inc.

    The Consumer Product Safety Commission.

Alan H. Schoem,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Director, Legal Division, Office of Compliance.

    Dated: March 23, 2001.
    By:

Ronald G. Yelenik,
Trial Attorney, Patricia E. Kennedy, Trial Attorney, Legal Division, 
Office of Compliance.

Order

    Upon consideration of the Settlement Agreement between both 
Respondent Cosco, Inc., a corporation and Respondent Safety 1st, Inc., 
a corporation, and the staff of the Consumer Product Safety Commission, 
and the Commission having jurisdiction over the subject matter and over 
Cosco, Inc. and Safety 1st, 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 Cosco, Inc. shall pay to the order of the 
U.S. Treasury a civil penalty in the amount of one million, three 
hundred thousand dollars ($1,300,000), payable as follows: six hundred 
fifty thousand dollars ($650,000) within twenty (20) calendar days 
after service of this Final Order upon Cosco, Inc., and an additional 
six hundred fifty thousand dollars ($650,000) within one calendar year 
of the date the first payment is due.
    Further Ordered, that Safety 1st, Inc. shall pay to the order of 
the U.S. Treasury a civil penalty in the amount of four hundred fifty 
thousand dollars ($450,000), payable as follows: two hundred twenty 
five thousand dollars ($225,000) within twenty (20) calendar days after 
service of this Final Order upon Safety 1st, Inc., and an additional 
two hundred twenty five thousand dollars ($225,000) within one calendar 
year of the date the first payment is due.
    Upon failing to make payment on schedule, the unpaid balance of the 
entire civil penalty shall be due and payable, and 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).

    Provisionally accepted and Provisional Order issued on the 2nd 
day of April, 2001.

    By Order of the Commission:

Todd A. Stevenson,
Deputy Secretary, Consumer Product Safety Commission.

[FR Doc. 01-8575 Filed 4-6-01; 8:45 am]
BILLING CODE 6355-01-M