[Federal Register Volume 69, Number 168 (Tuesday, August 31, 2004)]
[Notices]
[Pages 53048-53050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19783]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 04-C0005]


RRK Holdings, 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 1118.20. 
Published below is a provisionally-accepted Settlement Agreement with 
RRK Holdings, Inc., containing a civil penalty of $100,000.

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 September 15, 2004.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 04-C0005, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Michelle Faust Gillice, Trial 
Attorney, Office of Compliance, Consumer Product Safety Commission, 
Washington, DC 20207; telephone (301) 504-7667.

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

    Dated: August 25, 2004.
Todd A. Stevenson,
Secretary.

In the Matter of RRK Holdings, Inc.; Settlement Agreement and Order

    1. RRK Holdings, Inc., (hereinafter ``Respondent'') formerly known 
as Roto Zip Tool Corporation (hereinafter ``Roto Zip'') enters into 
this Settlement Agreement and Order (hereinafter, ``Settlement 
Agreement'' or ``Agreement'') with the staff of the Consumer Product 
Safety Commission (the ``Commission''), and agrees to the entry of the 
attached Order incorporated by reference herein. The Settlement 
Agreement resolves the Commission staff's allegations set forth below.

I. The Parties

    2. The Commission is an independent federal regulatory commission 
responsible for the enforcement of the Consumer Product Safety Act 
(``CPSA''), 15 U.S.C. 2051 et seq.
    3. Respondent, established in September of 1977 as Roto Zip Tool 
Corporation, is organized and existing under the laws of the State of 
Wisconsin. Its principal office is located at 4524 Blue Mounds Trail, 
Black Earth, Wisconsin 53515. On August 1, 2003, Roto Zip sold all of 
its assets to the Robert Bosch Tool Corporation and subsequently ceased 
operations. Roto Zip was renamed RRK Holdings, Inc.

II. Staff Allegations

    4. Between 1999 and October 2001, Respondent manufactured and 
distributed approximately 1.4 million spiral saws under the model names 
Revolution, Rebel and Solaris. The spiral saws are hand-held power 
tools with interchangeable spiral bits. The Rebel was manufactured for 
Respondent by two different companies, SB Power Tools and Scientific 
Molding Corporation, Ltd. (hereinafter ``SMC''). The Revolution and 
Solaris were manufactured exclusively by SMC.
    5. The saws were sold to and/or 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 CPSA, 15 U.S.C. 2052(a)(1). Roto Zip 
was a ``manufacturer'' and ``distributor'' of the spiral saws which 
were ``distributed into 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. Certain Revolution, Rebel and Solaris spiral saws exhibited a 
loose fit between the handle and the tool body. The loose fit was a 
result of variations

[[Page 53049]]

in the placement of the housing receptacle on the tool body and the 
length of the mating stud on the handle. The spiral saws are defective 
because the handle, if loose, could detach from the body of the saw 
while the saw is in use. The falling saw could cause lacerations and 
other injuries to consumers.
    7. In the fall of 2000, Respondent began receiving notice of saws 
detaching from the handles. The precise number of detaching incidents 
in 2000 is not available because Respondent recorded such incidents 
under the general term ``broken handle''. Between January 1, 2001 and 
October 23, 2001 (the date upon which Respondent submitted a full 
report to the Commission), Respondent had received notice of at least 
235 alleged incidents of saws detaching from handles. (This number of 
incidents is in addition to numerous reports of the handle being too 
loose).
    8. Between the fall of 2000 and October 23, 2001, Respondent 
received notice of twenty injuries alleged to be due to the saw 
detaching from the handle while the saw was in use. Several consumers 
received lacerations requiring sutures to hands and legs, and one 
report where a consumer allegedly received serious laceration injuries 
necessitating surgery.
    9. In February of 2001, Respondent determined that the handles on 
Rebel models manufactured by SB Power Tools were too loose and required 
that SB Power Tools modify the product for a tighter fit. However, 
Respondent continued to receive complaints about the saw falling off 
the handles. As a result, Respondent investigated and determined that 
the location of the receptacle housing in the tool body and the length 
of the mating stud were not uniform. On March 20, 2001, Respondent made 
a design change to all three spiral saw models and made changes to 
quality control to require a visual inspection and a tolerance test of 
every saw. About the same time, Respondent asked SMC to modify its 
inventory. By the end of March 2001, Respondent had received 81 spiral 
saw warranty returns due to the saws detaching.
    10. On September 11, 2001, the Commission conducted an 
establishment inspection of Respondent's headquarters in response to 
incident reports it had received. Following that inspection, Respondent 
filed a full report pursuant to section 15(b) of the CPSA on October 
23, 2001.
    11. By the time Respondent made design changes on March 29, 2001, 
it had obtained information which reasonably supported the conclusion 
that the Revolution, Solaris and Rebel spiral saws contained a defect 
which could create a substantial product hazard or created and 
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), (3).
    12. 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), Respondent violated 19(a)(4) of the CPSA, 15 U.S.C. 
2068(a)(4).
    13. Respondent committed this failure to 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 Respondent to civil 
penalties under section 20 of the CPSA, 15 U.S.C. 2069.

III. Response of RRK Holdings, Inc.

    15. Respondent denies the staff's allegations in paragraphs 6 
through 10 that the spiral saws were defective and that it violated the 
CPSA as set forth in paragraphs 11 through 13. In settling this matter, 
Respondent does not admit any fault, liability or statutory or 
regulatory violation.

IV. Agreement of the Parties

    16. The Consumer Product Safety Commission has jurisdiction over 
this matter and over Respondent under the consumer Product Safety Act, 
15 U.S.C. 2051 et. seq.
    17. Respondent agrees to be bound by and comply with this 
Settlement Agreement and Order.
    18. This Agreement is entered into for settlement purposes only and 
does not constitute an admission by Respondent or a determination by 
the Commission that Respondent knowingly violated the CPSA's reporting 
requirement.
    19. In settlement of the staff's allegations, Respondent agrees to 
pay a civil penalty of one hundred thousand and 00/100 dollars 
($100,000.00), in full settlement of this matter, and payable within 
twenty (20) calendar days of receiving service of the final Settlement 
Agreement and Order.
    20. 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 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 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.
    21. 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.
    22. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    23. The Commission's Order in this matter is issued under the 
provisions of the CPSA, 15 U.S.C. 2051 et seq. Violation of this Order 
may subject Respondent to appropriate legal action.
    24. 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.
    25. The provisions of this Settlement Agreement and Order shall 
apply to Respondent and each of its successors and assigns.

    Dated: March 19, 2004.

RRK Holdings, Inc.

Robert K. Kopras,
Chief Executive Officer.

James F. Stern,
Respondent's Attorney.

    Dated: August 25, 2004.

The U.S. Consumer Product Safety Commission

Alan H. Schoem,
Director, Office of Compliance.

Eric L. Stone,
Director, Legal Division, Office of Compliance.

    Dated: August 25, 2004.

Michelle Faust Gillice,
Trial Attorney, Legal Division, Office of Compliance.

In the Matter of RRK Holdings, Inc.; Order

    Upon consideration of the Settlement Agreement between Respondent 
RRK Holdings, Inc. and the staff of the Consumer Product Safety 
Commission, and the Commission having jurisdiction over the subject 
matter and over RRK Holdings, 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 RRK Holdings, Inc. shall pay the United

[[Page 53050]]

States Treasury a civil penalty in the amount of one hundred thousand 
and 00/100 dollars, ($100,000.00), payable within twenty (20) days of 
the service of the Final Order upon RRK Holdings, Inc.

    Provisionally accepted and Provisional Order issued on the 25th 
day of August, 2004.

    By Order of the Commission.

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

[FR Doc. 04-19783 Filed 8-30-04; 8:45 am]
BILLING CODE 6355-01-M