[Federal Register Volume 66, Number 73 (Monday, April 16, 2001)]
[Notices]
[Pages 19430-19432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9396]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 01-C0007]


Federated Department Stores, Inc., Provisional Acceptance of a 
Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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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 1605.13(d). 
Published below is a provisionally-accepted Settlement Agreement with 
Federated Department Stores, Inc., a corporation containing a civil 
penalty of $850,000.

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 May 1, 2001.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 01-C0007, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Howard N. Tarnoff, Trial Attorney, 
Office of Compliance and Enforcement, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0626, 1382.

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

    Dated: April 11, 2001.
Sadye E. Dunn,
Secretary.

Settlement Agreement

    1. Federated Department Stores, Inc. (``Federated''), a 
corporation, enters into this Settlement Agreement (``Agreement'') with 
the staff of the Consumer Product Safety Commission, and agrees to the 
entry of the Order incorporated herein. This Agreement and Order are 
for the sole purpose of settling the staff's allegations, as enumerated 
in the Staff Allegations section below, that Federated knowingly 
violated section 3(a) the Flammable Fabrics Act (FFA), as amended, 15 
U.S.C. 1192(a), and the Federal Trade Commission Act (FTCA), 15 U.S.C. 
41 et seq.

The Parties

    2. The ``staff'' is the staff of the Consumer Product Safety 
Commission (``Commission''), an independent regulatory agency of the 
United States government established pursuant to Section 4 of the 
Consumer Product Safety Act (CPSA), 15 U.S.C. 2053.
    3. Federated is a corporation organized under the laws of the State 
of Delaware, with its principal place of business located at 7 West 
Seventh Street, Cincinnati, OH 45202. Federated is principally engaged 
in the operation of department stores (including Bloomingdale's. The 
Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's, Rich's, and 
Stern's) and catalog businesses (including Fingerhut) that sell men's, 
women's, and children's apparel and accessories, cosmetics, home 
furnishings, and other consumer goods.

Staff Allegations

    4. Federated is now, and has been engaged in, the sale and the 
offering for sale, in commerce, as the term ``commerce'' is defined in 
Section 2(b) of the FFA, 15 U.S.C. 1191(b), and the importation into 
the United States, of wearing apparel which is subject to the 
requirements of the Standards for the Flammability of Children's 
Sleepwear (FF 3-71 and FF 5-74), 16 CFR parts 1615 and 1616 (the 
``Children's Sleepwear Standards''), and sections 3, 4, and 5 of the 
FFA, 15 U.S.C. 1192, 1193, and 1194.
    5. On numerous occasions from January 1999 through January 2000, 
Federated knowingly violated section 3 of the FFA, 15 U.S.C. 1192, and 
the Children's Sleepwear Standards. During that time period, Federated 
sold, and offered for sale, in commerce, and/or imported into the 
United States, 100% untreated cotton garments in sizes 0-14 that were 
marketed and promoted by its retail stores as children's sleepwear, as 
the term ``children's sleepwear'' is defined at 16 CFR 1615.1(a) and 
1616.2(a). During that time period, Federated also sold, and offered 
for sale, in commerce, and/or imported into the United States, 100% 
untreated cotton garments in sizes 0-14 that were designed and intended 
to be used as sleepwear. None of these garments complied with the 
flammability requirements of the Children's Sleepwear Standards. 
Because these sleepwear garments: (a) Were marketed, promoted, and/or 
designed as sleepwear; (b) were made of untreated 100% cotton, which 
does not pass the flammability requirements of the Children's Sleepwear 
Standards; (c) were sized above ``9 months'' and up to size 14; and (d) 
were not otherwise exempt from the requirements of the Children's 
Sleepwear Standards, the sale of these garments was a prohibited act 
under section 3(a) of the FFA, 15 U.S.C. 1192(a). The staff informed 
Federated in writing, orally, and/or in person of each violation. The 
following is a description of the garments sold, and offered for sale, 
in commerce, and/or imported into the United States, by Federated from 
January 1999 through January 2000, that did not comply with the 
flammability requirements of the Children's Sleepwear Standards:
    a. First Impressions Toddlers Garments: CPSC Samples 99-800-1919 
(Federated Style #4954120411), 99-800-1922 (Federated Style 
#4956S01411), 99-800-1924 (Federated Style #470B110411), 99-830-2732 
(Federated Style #0491S2411), 99-860-4964 (Federated Style 
#0495409411), 99-860-4965 (Federated Style #4953110411), and other 
similarly-styled First Impressions Toddlers Garments. The style, 
fabric, weight, print pattern, silhouette, and design of these garments 
are consistent with sleepwear. These garments were sold on retail racks 
in the children's sleepwear department or the sleepwear section of the 
children's department with or next to garments that were specifically 
labeled as children's sleepwear. Federated's retail sales clerks told 
our investigators that these garments were sleepwear.
    b. Charter Club Girls Sleepwear and First Impressions Toddlers 
Sleepwear: CPSC Samples 00-792-0106 (Federated Style # 4402GO2411), 00-
792-0107 (Federated Style # 4962SO4411), 99-800-2409 (Federated Style # 
68990BF486), 99-800-2410 (Federated Style # 68990VA486), 99-800-2411 
(Federated Style # 68990BS486), 00-792-0221 (Federated Style # 
3100210411), 00-792-0222 (Federated Style # 68990LS486), 00-792-0223 
(Federated Style # 68990VA486), 00-860-6097 (Federated Style # 
68990DS486), 00-860-6098 (Federated Style # 68990TF486), 00-792-0197 
(Federated Style # 68990MS486), 00-792-0198 (Federated Style # 
68990PK486), 00-792-0199 (Federated Style # 68990VA486), 00-792-0200 
(Federated Style # 68990LF486), 00-792-0201 (Federated Style # 
68990BS486), 00-792-0202 (Federated Style # 68990LS486), 00-792-0203 
(Federated Style # 68990TF486), 00-

[[Page 19431]]

792-0204 (Federated Style # 68990FS486), 00-792-0205 (Federated Style # 
6899XMS486), 00-792-0206 (Federated Style # 68990FL486), 00-792-0207 
(Federated Style # 68990DS486), 00-792-0208 (Federated Style # 
68990RB486), 00-792-0209 (Federated Style # 3100310411), 00-792-0210 
(Federated Style # 3100110411), 00-792-0211 (Federated Style # 
3100210411), 00-792-0216 (Federated Style # P2890-GI21), 00-792-0195 
(Federated Style # 68990AS486), 00-792-0196 (Federated Style # 
6899PA486), 00-792-0227 (Federated Style # 68990PK486), 00-792-0228 
(Federated Style # 68990AS486), 00-792-0229 (Federated Style # 
68990DS486), 00-792-0230 (Federated Style # 68990TF486), 99-800-1923 
(Federated Style # 6899DYZ486), all other Federated Style Numbers 
beginning with 2890, 2891, or 6899, and all other similarly-styled 
Charter Club Girls Sleepwear and First Impressions Toddlers Sleepwear. 
The style, fabric, weight, print pattern, silhouette, and design of 
these garments are consistent with sleepwear. These garments were sold 
on retail racks in the children's/girl's sleepwear department or the 
sleepwear section of the children's/girl's department with or next to 
garments that were 100% polyester flame resistant sleepwear. For some 
of these garments, Federated's retail sales clerks told our 
investigators that the garments were sleepwear.
    c. 100% Cotton Bathrobes: CPSC Samples 00-792-0290 (Federated Style 
# 101-BLU), 00-792-0291 (Federated Style # 011-W02), 00-792-0292 
(Federated Style # 011-WBB), Federated Style 101-WHT, Federated Style # 
101-PNK, Federated Style # P2890-GI221, Monarch Terry Cloth Robes 
(Federated Style Numbers beginning with 011 or 101), Agean Terry Cloth 
Robes (Federated Style Numbers beginning with 1233, C1248, 1283C, 
6028C, 6046, 6060C, 6062, 6360C), Charter Club Terry Cloth Robes 
(Federated Style Numbers 2890, 2891, 2892, 2893, and 2894), Club Room 
Terry Cloth Robes (Federated Style Number CR46), Fingerhut NFL Terry 
Cloth Robes (Fingerhut Catalogue Item Number 1A9H1). The style, fabric, 
weight, sillouette, and design of these garments are consistent with 
sleepwear. These garments were sold on retail racks in the girl's 
sleepwear or layette department with or next to garments that were 100% 
polyester flame resistant sleepwear, creating a high likelihood that 
consumers would purchase the garments for use as sleepwear.
    d. First Impressions One-Piece, Long-Sleeved, Long-Legged Garments: 
CPSC Samples 00-792-0263 (Federated Style # 31005) and 00-792-0267 
(Federated Style # 31004). These garments contained some of the 
characteristics of sleepwear. They were sold on retail racks in the 
children's sleepwear or the sleepwear section of the children's 
department with or next to garments that were 100% polyester flame 
resistant sleepwear or cotton tight-fitting sleepwear, creating a high 
likelihood that consumers would purchase the garments for use as 
sleepwear.
    e. Charter Club Two-Piece 100% Cotton Pajamas: CPSC Sample 00-792-
0262 (Federated Style # 68990CA486); Charter Club 100% Cotton Bathrobe: 
CPSC Sample 00-792-0261 (Federated Style # 2890WHT486); Charter Club 
Two-Piece 100% Cotton Pajamas: CPSC Samples 00-792-0265 (Federated 
Style # 68990CA486) and 00-792-0266 (Federated Style # 6899BK486); 
Charter Club 100% Cotton Bathrobes: CPSC Sample 00-792-0264 (Federated 
Style Numbers 2891BGP486 and 2890WHT486); and Charter Club Two-Piece 
100% Cotton Pajamas: CPSC Sample 00-830-3599 (Federated Style # 
68990MS486). The style, fabric, weight, print pattern, sillouette, and 
design of these garments are consistent with sleepwear. These garments 
were sold on retail racks in the girl's sleepwear department or the 
sleepwear section of the girl's department with or next to garmets that 
were 100% polyester flame resistant sleepwear or cotton tight-fitting 
sleepwear, creating a high likelihood that consumers would purchase the 
garments for use as sleepwear.
    6. The acts by Federated set forth in Paragraph 5 above are in 
violation of Section 3(a) of the FFA, 15 U.S.C. 1192(a), for which a 
civil penalty may be imposed pursuant to Section 5(e)(1) and the FAA, 
15 U.S.C. 1194(e)(1).

Federated's Response

    7. Federated denies the allegations set forth in Paragraphs 4-6 
above. Federated specifically denies that the subject garments were 
marketed and promoted by its retail stores as children's sleepwear, 
designed and intended to be used as sleepwear, or subject to the 
flammability requirements of the Children's Sleepwear Standards. 
Federated denies that it violated Section 3 of the FFA, the FTCA, or 
the Children's Sleepwear Standards, knowingly or otherwise. Federated 
enters into this Agreement for purposes of compromise and settlement 
only, to avoid incurring additional legal costs and expenses.
    8. Federated is not aware of any consumer injury related in any way 
to the specific garments listed in Paragraph 5 above, and the staff has 
not alleged that there has been any injury.

Federated and the Staff Agree

    9. The Commission has jurisdiction over the subject matter and 
Federated under the FAA, the FRCA, and the CPSA.
    10. This Agreement and Order is entered into for the purposes of 
compromise and settlement only and does not constitute a determination 
by the Commission that Federated violated the FAA, the FTCA, or the 
Children's Sleepwear Standards. It does not constitute an admission by 
Federated of any liability or wrongdoing by Federated, or that 
Federated violated any law or regulation.
    11. Within five (5) days of receiving service of the Final Order, 
Federated agrees to pay a civil penalty of $850,000, as set forth in 
the attached incorporated Order. This civil penalty is in settlement of 
the staff's allegations that Federated knowingly violated Section 3(a) 
of the FFA, 15 U.S.C. 1192(a), through the conduct described in 
Paragraph 5 above.
    12. Upon final acceptance of this Agreement and issuance of the 
Final Order, the staff agrees that it will not initiate or pursue, in 
its own name, through the Commission, or by referral to any other 
government agency, a civil penalty action against Federated, its 
successors and assigns, subsidiaries, affiliates, officers, director, 
agents, representatives, or employees, based, in whole or in part, upon 
Federated's conduct as described in Paragraph 5 above.
    13. This Agreement becomes effective only upon its final acceptance 
by the Commission and service of the incorporated Final Order upon 
Federated.
    14. Upon final acceptance of this Agreement by the Commission and 
issuance of the Final Order, Federated and the staff knowingly, 
voluntarily, and completely waive and relinquish any past, present, 
and/or future right or rights they may have in this matter: (a) To an 
administrative or judicial hearing; (b) to judicial review or other 
challenge or contest of the validity of this Agreement and the Order as 
issued and entered; (c) to a determination by the Commission as to 
whether Federated failed to comply with the Children's Sleepwear 
Standards, FAA, and/or FTCA; (d) to a statement of findings of fact and 
conclusions of law by the Commission; (e) to any claims under the Equal 
Access to Justice Act.
    15. Violation of the provisions of the Order may subject Federated 
to a civil and/or criminal penalty for each such violation, as 
prescribed by law.

[[Page 19432]]

    16. The Commission and Federated may disclose the terms of this 
Agreement and Order to the public.
    17. This Agreement may be used in interpreting the Provisional and 
Final Orders. Agreements, understandings, representations, or 
interpretations apart from those contained in this Agreement may not be 
used to vary or to contradict its terms.
    18. This Agreement and Order is binding upon, and shall inure to 
the benefit of Federated, and its successors and assigns, acting 
directly or through any corporation, subsidiary, division, or other 
business entity, or through any agency, device, or instrumentality, or 
through its employees, agents, or representatives.
    19. Upon provisional acceptance of this Agreement and Order by the 
Commission, this 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 1605.13(d). If the Commission 
does not receive any written request not to accept this Agreement and 
Order within 15 days, this Agreement and Order shall be deemed finally 
accepted on the 20th day after the date it is published in the Federal 
Register, in accordance with 16 CFR 1605.13(e).
    20. Upon final acceptance of this Agreement and Order, the 
Commission shall issue the following Order which is incorporated by 
reference herein.

    Dated: March 29, 2001.
Howard N. Tarnoff,
Trial Attorney, Legal Division.

Eric L. Stone,
Director, Legal Division.

Alan H. Schoem,
Director, Office of Compliance, U.S. Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, MD 20814, Telephone: 
(301) 504-0626, Facsimile: (301) 504-0359.

    Dated: March 26, 2001.
Dennis Broderick, Sr.,
VP, GC and Secretary, Federated Department Stores, Inc., 7 West 
Seventh Street, Cincinnati, OH 45202, Telephone: (513) 579-7000, 
Facsimile: (513) 579-7354.

Kate C. Beardsley,
Buc & Beardsley, 919 Eighteenth Street, NW., Washington, DC 20006, 
Telephone: (202) 736-3615, Facsimile: (202) 736-3608.

Philip Katz,
Crowell & Moring, LLP, 1001 Pennsylvania Avenue, NW., Washington, DC 
20004, Telephone: (202) 624-2660, Facsimile: (202) 628-5116.

Order

    Upon consideration of the Settlement Agreement entered into between 
Federated Departments Stores, Inc. (``Federated'') and the staff of the 
Consumer Product Safety Commission (``the staff'' or ``the staff of the 
Commission''); and it appearing that the Commission has jurisdiction 
over the subject matter and Federated and that the Settlement Agreement 
and Order is in the public interest,

I

    It is ordered that the Settlement Agreement and Order be, and 
hereby is, accepted,

II

    It is further ordered that, within five (5) calendar days of 
receiving service of the Final Order, Federated shall pay to the United 
States Treasury a civil penalty of eight hundred and fifty thousand 
dollars ($850,000).
    By direction of the Commission, this Settlement Agreement and Order 
is provisionally accepted pursuant to 16 CFR 1605.13, and shall be 
placed on the public record, and the Commission shall announce the 
provisional acceptance of the Settlement Agreement and Order in the 
Commission's Public Calendar and in the Federal Register.

    So ordered by the Commission, this 11th day of April, 2001.

Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.

[FR Doc. 01-9396 Filed 4-13-01; 8:45 am]
BILLING CODE 6355-01-M