[Federal Register Volume 68, Number 179 (Tuesday, September 16, 2003)]
[Notices]
[Pages 54204-54206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23617]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 03-C0003]


Brunswick Corp., 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 118.20. 
Published below is a provisionally-accepted Settlement Agreement with 
Brunswick Corporation, containing a civil penalty of $1,000,000.00.

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 October 1, 2003.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 03-C0003, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Office of Compliance Consumer Product Safety Commission, Washington, DC 
20207; telephone (301) 504-7587.

[[Page 54205]]


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

    Dated: September 11, 2003.
Todd A. Stevenson,
Secretary.

Settlement Agreement and Order

    1. This Settlement Agreement is made by and between the staff 
(``staff'') of the U.S. Consumer Product Safety Commission (``the 
Commission'') and Brunswick Corporation (``Brunswick'' or 
``Respondent''), a corporation, in accordance with 16 CFR 1118.20 of 
the Commission's Procedures for Investigations, Inspections, and 
Inquiries under the Consumer Product Safety Act (``CPSA''). This 
Settlement Agreement settles the staff's allegations set forth below.

I. 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. 2051 et seq.
    3. Brunswick is a corporation organized and existing under the laws 
of the State of Delaware with its principal corporate offices located 
at 1 North Field Court, Lake Forest, IL 60045.

II. Allegations of the Staff

    4. Between June 1998 and June 2000, Brunswick manufactured and 
distributed nationwide approximately 40,000 Mongoose and Roadmaster 
bicycles. By Us International Corporation, a Taiwanese corporation, 
manufactured the Ballistic 105 fork (``fork'') that was welded onto 
these bicycles.
    5. The Mongoose and Roadmaster bicycles are sold to and/or are used 
by consumers for use in or around a permanent or temporary household or 
residence, a school, in recreation, or otherwise and are, therefore, 
``consumer products'' as defined in section 3(a)(1) of the consumer 
Product Safety Act (CPSA), 15 U.S.C. 2052(a)(1). Respondent was a 
``manufacturer'' and ``distributor'' of the Mongoose and Roadmaster 
bicycles, which were ``distributed in commerce'' as those terms are 
defined in sections 3(a)(4), (5), (11), and (12) of the CPSA, 15 U.S.C. 
2052(a)(4), (5), (11), and (12).
    6. The forks of these bicycles are defective because they can break 
apart during normal and foreseeable use of the bicycles, causing riders 
to lose control, fall and suffer serious injuries such as facial 
abrasions, dental trauma, broken bones, and lacerations requiring 
sutures.
    7. Between September 1998 and September 1999, Brunswick received at 
least 14 incident reports involving the bicycles' forks breaking apart 
during normal and foreseeable use of the bicycles, causing riders to 
lose control and fall to the ground. Injuries known to Brunswick 
included broken and lost teeth, broken bones, jaw fractures, abrasions, 
concussions, and lacerations requiring sutures.
    8. In September 1999, Brunswick concluded that there might be a 
problem with the bicycles' forks.
    9. In October 1999, Brunswick asked By Us to determine the scope of 
a recall and met with the president of By Us on November 18, 1999. At 
the meeting By Us told Brunswick that one of its subcontractors, Akisu 
Machinery Company, Ltd. (``Akisu''), had improperly welded the forks 
onto the bicycles. Brunswick reported to the Commission on November 19, 
1999, about the bicycles' forks breaking apart.
    10. By the time Brunswick reported to the Commission on November 
19, 1999, Brunswick had knowledge of at least 19 incident reports 
involving the bicycles' forks breaking apart.
    11. In July 2000, two months after the commencement of the recall, 
Brunswick obtained at least six additional incident reports involving 
the bicycles' forks breaking apart. The serial numbers of these forks 
were outside the range of bicycles recalled. By August 2000, Brunswick 
knew of another three incident reports involving the bicycles' forks 
breaking apart. The serial numbers of these forks also fell outside the 
range of bicycles recalled.
    12. In August 2000, By Us gave Brunswick the serial numbers of all 
forks manufactured by its subcontractor, Akisu. The serial numbers of 
these forks included bicycles outside the range of those Brunswick had 
recalled.
    13. Brunswick did not report to the Commission until October 30, 
2000, about the defect in forks on bicycles outside the scope of the 
recall.
    14. In each of the instances described in paragraphs 4 through 13 
above, Brunswick obtained information which reasonably supported the 
conclusion that the bicycles' forks described in paragraph 4 above 
contained a defect which could create a substantial product hazard or 
created an unreasonable risk of serious injury or death, but failed to 
report such information in a timely manner to the Commission as 
required by sections 15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) 
and (3).
    15. By failing to provide the information to the Commission in a 
timely manner as required by section 15(b) of the CPSA, 15 U.S.C. 
2064(b), Brunswick violated section 19(a)(4) of the CPSA, 15 U.S.C. 
2068(a)(4).
    16. Brunswick committed this failure to timely report to the 
Commission ``knowingly'' as the term ``knowingly'' is defined in 
section 20(d) of the CPSA, 15 U.S.C. 2069(d), thus, subjecting 
Brunswick to civil penalties under section 20 of the CPSA, 15 U.S.C. 
2069.

III. Brunswick's Response

    17. Brunswick denies the staff's allegations that it violated the 
CPSA as set forth in paragraphs 14 through 16 above.

IV. Agreement of the Parties

    18. The Consumer Product Safety Commission has jurisdiction over 
this matter and over Brunswick under the Consumer Product Safety Act, 
15 U.S.C. 2051 et seq.
    19. This Agreement is entered into for settlement purposes only and 
does not constitute an admission by Brunswick or a determination by the 
Commission that Brunswick knowingly violated the CPSA's Reporting 
Requirement.
    20. In settlement of the staff's allegations, Brunswick agrees to 
pay a civil penalty in the amount of one million and 00/100 dollars 
($1,000,000.00) as set forth in the incorporated Order.
    21. Upon final acceptance of this Agreement by the Commission and 
issuance of the Final Order, Respondent knowingly, voluntarily, and 
completely waives any rights it may have in this matter (1) to an 
administrative or judicial hearing, (2) to judicial review or other 
challenge or contest of the validity of the Commission's actions, (3) 
to a determination by the Commission as to whether Respondent failed to 
comply with the CPSA and the underlying regulations, (4) to a statement 
of findings of fact and conclusions of law, and (5) to any claims under 
the Equal Access to Justice Act.
    22. Upon provisional acceptance of this Agreement by the 
Commission, this Agreement 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 1118.20(e). If the Commission does not 
receive any written objections within 15 days, the Agreement will be 
deemed finally accepted on the 16th day after the date it is published 
in the Federal Register.
    23. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    24. The Commission's Order in this matter is issued under the 
provisions of the CPSA, 15 U.S.C. 2051 et seq., and

[[Page 54206]]

that a violation of this Order may subject Brunswick to appropriate 
legal action.
    25. This Settlement Agreement may be used in interpreting the 
Order, Agreements, understandings, representations, or interpretations 
apart from those contained in this Settlement Agreement and Order may 
not be used to vary or contradict its terms.
    26. The provisions of this Settlement Agreement and Order shall 
apply to Brunswick and each of its successors and assigns.

    Respondent, Brunswick Corporation.

    Dated: May 20, 2003.
Lloyd W. Chatfield, II,
Assistant Secretary, Brunswick Corporation, 1 North Field Court, Lake 
Forest, IL 60045.
    Dated: May 27, 2003.
Erika Z. Jones,
Mayer, Brown, Rowe & Maw, 1900 K Street, NW., Washington, DC.
    Commission Staff.
Alan H. Schoem,
Assistant Executive Director, Office of Compliance, Consumer Product 
Safety Commission, Washington, DC 20207-0001.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
    Dated: May 28, 2003.
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Respondent Brunswick Corporation, and the staff of the Consumer Product 
Safety Commission; and the Commission having jurisdiction over the 
subject matter and Brunswick Corporation; and it appearing that the 
Settlement Agreement and Order 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 and Order, Brunswick Corporation shall pay to the Commission 
a civil penalty in the amount of One Million and 00/100 Dollars 
($1,000,000.00) within twenty (20) days after service upon Respondent 
of this Final Order of the Commission.

    Provisionally accepted and Provisional Order issued on the 11th 
day of September, 2003.
    By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 03-23617 Filed 9-15-03; 8:45 am]
BILLING CODE 6355-01-M