[Federal Register Volume 68, Number 179 (Tuesday, September 16, 2003)]
[Notices]
[Pages 54206-54208]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23618]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 03-C0002]


Murray, Inc., a Corporation, 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 C.F.R. 1118.20. 
Published below is a provisionally-accepted Settlement Agreement with 
Murray, Inc., a corporation, containing a civil penalty of $375,000.00.

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-C0002, 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.

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 
(``the staff'') of the U.S. Consumer Product Safety Commission (``the 
Commission'') and Murray, Inc. (``Murray'' 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. Murray is a corporation organized and existing under the laws of 
the State of Tennessee with its principal corporate offices located in 
Brentwood, Tennessee.

II. Allegations of the Staff

A. Rear-Engine Riding Lawnmower

    4. Between January 1995 and January 2002, Murray manufactured and 
distributed nationwide approximately 89,500 rear-engine riding 
lawnmowers, model numbers 30560, 30565, 30577x7, 502.256210, 
536.270211, 536.270212, 30560x7, 30577x8, 502.256220, MOM611115A59, 
30560x60, 60575x8, 30577x31, 502.270210, MOM6115A89, 30560x99, 
30575x31, 502.251250, and 502.270211.
    5. The rear-engine riding lawnmowers are sold to consumers for use 
in or around a permanent or temporary household or residence and are, 
therefore, ``consumer products'' as defined in section 3(a)(1)(i) of 
the Consumer Product Safety Act (CPSA), 15 U.S.C. 2052(a)(1)(i). 
Respondent is a ``manufacturer'' and ``distributor'' of the rear-engine 
riding lawnmowers, 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 rear-engine riding lawnmowers' fuel tanks can crack and leak 
fuel and the leaking fuel can ignite, posing a burn or fire hazard to 
consumers.
    7. In the fall 2000, one of Murray's retail customers told Murray 
that it had replaced four or five fuel tanks on rear-engine riding 
lawnmowers because of complaints of fuel leakage.
    8. Murray asked the two manufacturers of the fuel tanks to compile 
and to review all engineering and manufacturing data regarding the fuel 
tanks. Murray never followed through on its request to the two 
manufacturers of the fuel tanks for the engineering and manufacturing 
data regarding the fuel tanks.
    9. By December 2000, Respondent had retrieved five fuel tanks for 
which consumers alleged a fuel leak. Respondent's evaluation of these 
fuel tanks indicated fuel leakage.
    10. In February 2001, one of Murray's retail customers directed a 
consumer complaint to Murray. In its communication, the retail customer 
told Murray of its legal obligation under section 15(b) of the CPSA to 
report to the Commission if it found that the rear-engine riding 
lawnmower contained a defect which could create a substantial product 
hazard.
    11. In September 2001, one of Respondent's retail customers 
directed

[[Page 54207]]

another consumer complaint to Respondent.
    12. On December 14, 2001, Murray received a request for information 
from the staff regarding an incident involving the rear-engine riding 
lawnmower. Upon receipt of the staff's inquiry, Murray initiated an 
investigation into claims involving its rear-engine riding lawnmowers.
    13. Upon reviewing its record in December 2001 and January 2002, 
Murray discovered that from 1997 through 2001 it had received about 880 
reports of fuel tank leakage involving its rear-engine riding 
lawnmower, five of which resulted in fires with one report of minor 
burn injuries.
    14. Based on information synthesized during Murray's December 2001-
January 2002 investigation, on January 16, 2002, Murray reported to the 
Commission about the rear-engine riding lawnmower's fuel tank cracking 
and leaking fuel.
    15. Despite being aware of the information set forth in paragraphs 
4 through 14 above, Murray did not report to the Commission until 
January 16, 2002.
    16. Murray obtained information which reasonably supported the 
conclusion that the rear-engine riding lawnmower as 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).
    17. 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), Murray violated section 19(a)(4) of the CPSA, 15 U.S.C. 
2068(a)(4).
    18. Murray 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 Murray 
to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.

B. Mid-Engine Riding Lawnmower

    19. Between January 2001 and January 2002, Murray manufactured and 
distributed nationwide approximately 6,200 mid-engine riding 
lawnmowers, model numbers 309005X10, 309304X8, and 309306X89.
    20. The mid-engine riding lawnmowers are sold to consumers for use 
in or around a permanent or temporary household or residence and are, 
therefore, ``consumer products'' as defined in section 3(a)(1)(i) of 
the CPSA, 15 U.S.C. 2052(a)(1)(i). Murray is a ``manufacturer'' and 
``distributor'' of the mid-engine riding lawnmowers, 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).
    21. The mid-engine riding lawnmowers' fuel tanks can crack and leak 
fuel and the leaking fuel can ignite, posing a burn or fire hazard to 
consumers.
    22. In July 2001, Murray's European distributor advised Murray of a 
possible weld seam issue involving the mid-engine riding lawnmower's 
fuel tank.
    23. In August 2001, one of Respondent's retail customers notified 
Respondent of several reports of gas leaks involving the mid-engine 
riding lawnmower.
    24. During August 2001, Murray notice an increased number of orders 
form its authorized service centers requesting replacement fuel tanks 
for the mid-engine riding lawnmower as a result of fuel leaks.
    25. In September 2001, Murray tested 12 fuel tanks for fuel 
leakage, and found some of the tested tanks showed evidence of cracking 
and fuel leakage.
    26. On or about September 19, 2001, the manufacturer of the mid-
engine riding lawnmower's fuel tank told Murray that it has substituted 
a different type of material since the beginning of production. Murray 
immediately instructed its supplier to begin using the specified 
material. Murray placed a hold on distributing the mid-engine riding 
lawnmower pending installation of the proper fuel tank.
    27. On or about November 19, 2001, an independent laboratory told 
Respondent that the failure of the gas tank was due to multiple, 
brittle fatigue cracks that initiated at the base of the tank due to 
concentration of applied cyclic bending stress due to vibration during 
service. The report also noted that the failed tank had a much lower 
molecular weight and was significantly more brittle than the 
comparative tank. The brittle nature of the polymer made it more prone 
to cracking.
    28. On or about January 18, 2002, Murray received a complaint from 
a consumer alleging a leaking fuel tank. At that time, Murray examined 
its records and found that between June 2001 and January 2002 it had 
received 70 complaints and 145 warranty claims of fuel leakage, 
including one report of a fire.
    29. Based on Murray's investigation, on February 5, 2002, Murray 
reported to the Commission about the mid-engine riding lawnmower's fuel 
tank cracking and leaking fuel.
    30. Despite being aware of the information set forth in paragraphs 
19 through 29 above, Murray did not report to the Commission until 
February 5, 2002.
    31. Murray obtained information which reasonably supported the 
conclusion that the mid-engine riding lawnmower as described in 
paragraph 19 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).
    32. By failing to provide information in a timely manner as 
required by section 15(b) of the CPSA, 15 U.S.C. 2064(b), Murray 
violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    33. Murray 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 Murray 
to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.

III. Murray's Response

    34. Murray denies each and every staff allegation as set forth in 
paragraphs 4 through 33 above.
    35. Murray denies that the rear-engine riding lawnmower contains 
any defect which could create a substantial product hazard pursuant to 
section 15(a) of the CPSA, 15 U.S.C. 2064(b) or 16 CFR part 1115 and 
further denies that it violated the reporting requirements of section 
15(b) of the CPSA, 15 U.S.C. 2064(b).
    36. In January 2002, information became apparent to Murray and it 
promptly and voluntarily filed a report on the rear-engine riding 
lawnmower under section 15 of the CPSA, and worked cooperatively with 
the staff to conduct a comprehensive recall plan under the Commission's 
Fast Track program.
    37. Murray denies that the mid-engine riding lawnmower contains any 
defect which could create a substantial product hazard pursuant to 
section 15(a) of the CPSA, 15 U.S.C. 2064(a), and further denies that 
it violated the reporting requirements of section 15(b) of the CPSA, 15 
U.S.C. 2064(b) or 16 CFR part 1115.
    38. In January 2002, information became apparent to Murray and it 
promptly and voluntarily filed a report on the mid-engine riding 
lawnmower under section 15 of the CPSA and worked cooperatively with 
the staff to conduct a comprehensive recall plan

[[Page 54208]]

under the Commission's Fast Track program.
    39. Murray enters this Settlement Agreement and Order for 
settlement purposes only, to avoid incurring additional legal costs and 
expenses. In settling this matter, Murray does not admit any fault, 
liability or statutory or regulatory violation.

IV. Agreement of the Parties

    40. The Consumer Product Safety Commission has jurisdiction over 
this matter and over Murray under the Consumer Product Safety Act, 15 
U.S.C. 2051 et seq.
    41. This Agreement is entered into for settlement purposes only and 
does not constitute an admission by Murray that it has violated the law 
nor a determination by the Commission of any disputed issue of law or 
fact.
    42. In settlement of the staff's allegations, Murray agrees to pay 
a civil penalty in the amount of three hundred seventy-five thousand 
dollars and 00/100 cents ($375,000.00) as set forth in the incorporated 
Order.
    43. Upon final acceptance of this Agreement by the Commission and 
issuance of the Final Order, Respondent knowingly, voluntarily, ad 
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 of Justice Act.
    44. 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 request not to accept the Agreement within 15 days, 
the Agreement will be deemed finally accepted on the 16th day after the 
date it is published in the Federal Register.
    45. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    46. The Commission's Order in this matter is issued under the 
provision of the CPSA, 15 U.S.C. 2051 et seq., and a violation of this 
Order shall subject Murray to appropriate legal action.
    47. This Settlement Agreement may be used in interpreting the 
Order. Agreements, understandings, representations, or interpretation 
apart from those contained in this Settlement Agreement and Order may 
not be used to vary or contradict its terms.
    48. The provisions of this Settlement Agreement and Order shall 
apply to Murray and each of its successors and assigns.

Respondent, Murray, Inc.

    Dated: June 3, 2003.
James C. Pelletier,
President and Chief Operating Officer, Murray, Inc., 219 Franklin Road, 
Brentwood, TN 27027.
    Dated: June 9, 2003.
Kerrie L. Hook,
Collier Shannon Scott, PLLC, 3050 K Street, NW., Washington, DC 20007.

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: June 10, 2003.
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Respondent Murray, Inc., a corporation, and the staff of the Consumer 
Product Safety Commission; and the Commission having jurisdiction over 
the subject matter and Murray, Inc; 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, Murray, Inc. shall pay to the Commission a civil 
penalty in the amount of Three Hundred Seventy-Five Thousand and 00/100 
Dollars ($375,000.00) within twenty (20) days after service upon 
Respondent of the Final Order of the Commission accepting the attached 
Settlement Agreement.

    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. 03-23618 Filed 9-15-03; 8:45 am]
BILLING CODE 6355-01-M