[Federal Register Volume 70, Number 59 (Tuesday, March 29, 2005)]
[Notices]
[Pages 15842-15847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6066]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 05-C0006]


Grace Children's Products, Inc., a Corporation and Century 
Products, f/k/a Century Products Company, 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 
Graco Children's Products, Inc. a corporation and Century Products, f/
k/a Century Products Company, containing a civil penalty of 
$4,000,000.00.

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 April 13, 2005.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 05-C0006, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: William J. Moore, Jr., Trial Attorney, 
Office of Compliance, Consumer Product Safety Commission, Washington, 
DC 20207; telephone (301) 504-7583.

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

    Dated: March 22, 2005.
Todd A. Stevenson,
Secretary.

Settlement Agreement and Order

    1. This Settlement Agreement is made by and between the staff 
(``the staff'' ) of the United States Consumer Product Safety 
Commission (``the Commission'') and Graco Children's Products, Inc. 
(``Graco'') 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 and 
the incorporated, attached Order resolve the staff's allegations set 
forth below.

I. The Parties

    2. The United States Consumer Product Safety Commission is an 
independent federal regulatory agency responsible for the enforcement 
of the Consumer Product Safety Act, 15 U.S.C. 2051-2084, the Federal 
Hazardous Substances Act, 15 U.S.C. 1261-1278, and the other 
transferred Acts identified in 15 U.S.C. 2079.
    3. Graco Children's Products, Inc. is a corporation organized and 
existing under the laws of the State of Pennsylvania. Graco is a wholly 
owned subsidiary of Newell Rubbermaid, Inc. Graco's principal offices 
are located at 150 Oaklands Boulevard, Exton, Pennsylvania 19341.

Corporate Background and the Scope of This Agreement

    4. In 1996, Rubbermaid Incorporated (``Rubbermaid,'') then an Ohio 
corporation, acquired Graco. Graco retained its separate corporate 
status. Until 1998, Century Products Company (``Century'') was a 
separate corporation organized under the laws of the State of Delaware. 
In 1998 Rubbermaid acquired certain assets and liabilities of Century. 
In 1999, Newell Co., (``Newell,'' a Delaware corporation) merged with 
Rubbermaid. Rubbermaid became a wholly owned subsidiary of Newell and 
Newell Co. changed its corporate name to Newell Rubbermaid Inc.
    5. By this Agreement, Graco is settling alleged reporting 
violations: by Century before Century's assets were acquired by Graco's 
parent company Rubbermaid; by Century during the period that straddled 
Century's status as an independent corporation and after it was 
acquired by Graco's parent, Rubbermaid; by Graco when it was a family 
owned and operated business, prior to 1997; by Graco after it was 
acquired by Rubbermaid but still operating independently; and by Graco 
prior to its management restructuring by its current corporate parent, 
Newell.

II. Staff Allegations: Century Infant Seat/Carrier

    6. Between 1991 and 1997, Century manufactured and distributed in 
United States commerce rear-facing infant seat/carriers, sometimes 
known as its ``Assura'' line. The infant seat/carrier, when separated 
from its anchored base in a motor vehicle, became an infant carrier for 
use in the home, during shopping, in recreation or otherwise. Century 
was, therefore, a ``manufacturer'' of a ``consumer product'' 
``Distributed in commerce'' as those terms are defined in 15 U.S.C. 
2052(a)(1), (4), (11) and (12).
    7. While using the infant carrier, the carrying handle could crack 
and/or break and/or the handle could fail to lock the carrier seat 
securely into place. These flaws in the carrier handles and locking 
mechanisms are defects under section 15 of the CPSA, 15 U.S.C. 2064. 
The babies being carried in the carrier seats could, and did, fall from 
defective carriers and suffered serious injuries. All injuries occurred 
while this product was being used as an infant carrier.
    8. Century made several attempts to strengthen the Assura handle 
and redesigned the locking mechanism between 1993 and 1998. It replaced 
between 2,700 and 3,400 handles in response to consumer complaints.
    9. Century never reported this information to the Commission staff. 
Indeed, in 1998, when the staff first investigated the Assura car seat/
carriers, Century personnel failed to provide the staff with critically 
important information about incidents, injuries and engineering 
changes. This failure to provide a complete report impeded an effective 
analysis of the defects and hazard associated with these products and 
unduly delayed implementation of a safety recall.

[[Page 15843]]

    10. Century obtained information that reasonably supported the 
conclusion that its rear facing car seat/carriers, described above, 
contained defects which could create a substantial product hazard and 
created an unreasonable risk of serious injury. Century failed to 
report such information to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3).
    11. By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Century 
committed prohibited acts and violated section 19(a)(4) of the CPSA, 15 
U.S.C. 2068(a)(4).
    12. Century committed the prohibited acts set forth above 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Century Stroller Travel Systems

    13. Between 1996 and 1999, Century and Graco/Century manufactured 
and distributed in United States commerce a series of multi-use 
products ``travel systems'' featuring the seat portion of a motor 
vehicle safety care seat. The seat could be removed and used as a baby 
carrier, a baby seat and, when placed in a stroller frame, a baby 
stroller. Five particular travel system models were known as the 
Century brand Travelite, Pioneer, ProSport, Travel Solutions and Take 
Two Travel Solutions (hereinafter the ``Car Seat Strollers'' or 
``Travel Systems''). With respect to the non-car seat components of 
these travel system, Century and Graco/Century were ``manufacturers'' 
of ``consumer products'' ``distributed in commerce'' as those terms are 
defined in 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    14. When the baby carrier seat was used in the five Century 
stroller frames, the products' locking mechanism designed permitted the 
seat either to detach from the stroller frame or allowed the stroller 
frame to collapse, allowing the baby to fall forward, out of the 
stroller frame and onto the ground. The five seat/stroller frame 
locking mechanism designed were defective under section 15 of the CPSA, 
15 U.S.C. 2064. These defects generated numerous consumer complaints 
alleging many injuries for the five models, from minor to serious in 
nature.
    15. Neither Century nor Graco filed a section 15(b) report until 
the staff inquired about the Take 2 Strollers in 2000.
    16. Century obtained information which reasonably supported the 
conclusion that the five travel systems named above, contained defects 
which could create a substantial product hazard. Century failed to 
report such information to the Commission as required by section 
15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2).
    17. By failing to report to the Commission as required by section 
15(b)(2) of the CPS, 15 U.S.C. 2064(b)(2), Century committed prohibited 
acts and violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    18. Century committed the prohibited acts set forth above 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Graco High Chair Models 3170, 36051 and 74001

    19. From January, 1996 through November, 1997 Graco manufactured 
and distributed in United States commerce children's High Chair Models 
3170, 36051 and 74001 (``High chairs''). Graco was, therefore, a 
``manufacturer'' of a ``consumer product'' ``distributed in commerce'' 
as those terms are defined in 15 U.S.C. 2052(a)(1), (4), (11) and 12).
    20. Graco designed the High Chairs with four metal supporting legs. 
Each of the two front legs is comprised of two metal tubes, one 
inserted into the open end of the other. the two-piece legs were 
designed to stay together, mated by friction and gravity. When the High 
Chair was in use, the front supporting leg pieces could, and did, come 
apart, causing the entire High Chair to fall forward to the ground. In 
July 1996, after receiving consumer complaints, Graco attempted to 
prevent the legs from separating by extending the leg socket rib 
length. Graco continued to receive High Chair leg separation complaints 
and, in November 1997, Graco ordered the use of a spring loaded push 
button on one section of each leg designed to fit into a corresponding 
hole in the other half of the leg connection. This design was intended 
to form a positive locking mechanism for the High Chair legs.
    21. After the design changed described in paragraph 20 above, Graco 
continued to receive consumer complaints of front leg separation and 
minor to serious child injuries associated with the friction fit design 
units made before November 1997. The friction fit designs used by Graco 
were defects under section 15 of the CPSA, 15 U.S.C. 2064.
    22. Graco did not report information about this product until 
requested to do so by CPSC in 2000.
    23. Graco obtained information which reasonably supported the 
conclusion that its High Chairs contained defects which could create a 
substantial product hazard. Graco failed to report to the Commission as 
required by section 15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2).
    24. By failing to report to the Commission as required by section 
15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2), Graco committed a 
prohibited act. Graco thereby violated section 19j(a)(4) of the CPSA, 
15 U.S.C. 2068(a)(4).
    25. Graco committed the prohibited act set forth above 
``knowingly'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSC, 15 U.S.C. 2069.

Graco Carrier Cradle Swings

    26. From August 1993 through August 1997, Graco manufactured and 
distributed in United States commerce Infant Carriers that could also 
be used with a Graco Infant Swing assembly. These carrier/swings are 
known as models 1300, 1301, 1310, 1350, 1501, 1502, 1530, 1723, 2788, 
5510, 8108 and 36264 and Graco distributed them nationwide. Graco was, 
therefore, a ``manufacturer'' of a ``consumer product'' ``distributed 
in commerce'' as those terms are defined in 15 U.S.C. 2052 (a)(1), (4), 
(11) and (12).
    27. The design of the plastic carrier seat handle, in connection 
with the plastic materials used to fabricate the seat, can give the 
consumer the false impression, through an audible ``click'' cue, that 
the carrier handle is in a safely locked position when it is not. These 
are product defects under section 15 of the CPSA, 15 U.S.C. 2064. From 
1993 to 1997, these defects resulted in Graco receiving consumer 
complaints citing injuries, from minor to serious in nature. The 
incidents occurred when the seats fell forward because the handle was 
not securely locked. Graco stopped making the products in 1997.
    28. Graco first reported to the staff in 1997. Graco's original 
report failed to provide complete information.
    29. Well before 1997, Graco Children's Products, Inc. obtained 
information which reasonably supported the conclusion that its Carriers 
and Carrier Swing Seats contained defects which could create a 
substantial product hazard and created an unreasonable risk of serious 
injury. Graco failed to report to the Commission as required by 
sections 15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3).

[[Page 15844]]

    30. By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Graco 
committed prohibited acts and violated section 19(a)(3) of the CPSA, 15 
U.S.C. 2068(a)(3).
    31. Graco committed the prohibited acts, set forth above, 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Graco Infant Swings

    32. From approximately 1988 through 1998, Graco manufactured and 
distributed in United States commerce certain infant swings. For the 
purposes of this Settlement Agreement, the swing designs will be 
designated as Designs ``A,'' ``B,'' and ``C.'' Graco was, therefore, a 
``manufacturer'' of ``consumer products'' ``distributed in commerce'' 
as those terms are defined in 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    33. Design A, made prior to 1988 through 1991, consisted of a cloth 
seat with leg holes. A waist belt sometimes accompanied the Design A 
swings. A plastic tray was also available. The tray could help keep the 
child from falling out of the swing. As designed, Design A required the 
consumer to remove and reinstall a screw to hold the tray in place each 
time the swing was used. This design contributed to use of the swing 
without the tray screw, thereby making it easier for the tray to loosen 
or fall off the swing and a baby to fall out of the swing. These design 
characteristics are product defects under section 15 of the CPSA, 15 
U.S.C. 2064.
    34. During the limited production period for which Graco incident 
data was available, the company had received reports of dozens of minor 
to serious injuries and one death. On or about November 1991, Graco 
made tray design changes that led to what is designated here as Graco 
Infant Swing ``Design B.''
    35. From November 1991 through September 1995, the Graco Infant 
Swings, Design B, used a plastic shell with leg holes for the seat and 
a waist belt. Design B also used a tray tube that could slide into the 
swing hanger tube. The hanger tube was equipped with a spring loaded 
button on one side only to secure the restraining tray to the swing 
frame tube. The spring loaded button could pop out through a hole in 
the tray tube and, if operated successfully, better secure the 
restraining tray. The product could also be assembled with the hanger 
tube reversed, however, because the unassembled U-shaped hanger tube 
was symmetrical. In the reversed configuration, the swing would be 
completely operational and the function of the spring-loaded button 
(now on the wrong side), would be negated. The restraining tray (much 
like Design A, above) would be unsecured and could slide off during 
swing use. The product instructions did not address the potential for 
reverse assembly. The design and instructions were defects under 
section 15 of the CPSA, 15 U.S.C. 2064.
    36. Graco received numerous consumer complaints regarding the 
Design B Infant Swings. Most complaints reported that babies fell out 
of the swing. Graco modified Design B in November 1995 to incorporate 
asymmetrical hanger tubes intended to protect against reverse assembly.
    37. From 1994 through July 1995, Graco manufactured and distributed 
Design C type Infant swings. This swing also used a molded plastic 
shell with leg holes and added a restraining tray with a T-bar 
attached. Graco made some Design C Infant Swings with a waist belt and 
a crotch strap, and some without the crotch strap. Like Design B, 
Design C had symmetrical, hanger tubes with a spring loaded button on 
one side of the tube only. Design C was also susceptible to reverse 
assembly. As a result, consumers could have an unsecured restraining 
tray. The Design C Infant Swings were defective under section 15 of the 
CPSA, 15 U.S.C. 2064.
    38. Graco received consumer reports of incidents and injuries and 
four reports of death involving the Design C Infant Swings. Most 
alleged that babies fell out of the swing. Four babies were found 
caught by the head and arms or by the neck. Graco modified Design C in 
November 1995.
    39. Graco reported the information it possessed related to the 
Design A, B, and C Infant Swings to the Commission after the staff 
contacted Graco in 2000.
    40. Graco Children's Products, Inc. obtained information which 
reasonably supported the conclusion that its Design A, B and C Infant 
Swings contained defects which could create a substantial product 
hazard and/or created an unreasonable risk of serious injury or death. 
Graco failed to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3).
    41. By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Graco 
committed prohibited acts and violated section 19(a)(4) of the CPSA, 15 
U.S.C. 2068(a)(4).
    42. Graco committed the prohibited acts ``knowingly,'' as defined 
in section 20(d) of the CPSA, 15 U.S.C. 2069(d), and thus subjected 
itself to civil penalties, as provided in section 20 of the CPSA, 15 
U.S.C. 2069.

Graco Travel Lite Infant Swing

    43. From May to December 2003, Graco manufactured, sold, and 
distributed in United States commerce the Travel Lite Infant Swing 
(``Travel Lite'' or ``Swing''), model numbers 1850JJP, 1850JGB and 
185055P. Graco is, therefore, a ``manufacturer'' of ``consumer 
products'' ``distributed in commerce'' as those terms are defined in 15 
U.S.C. 2052(a)(1), (4), (11) and (12).
    44. Soon after introducing the Travel Lite into commerce, Graco 
began to receive several consumer complaints of infants falling forward 
out of the swing and infants' heads falling forward and to the side of 
the swing. The Swing's seat did not recline sufficiently--the seat 
propped infants up too much toward a vertical position, allowing babies 
to fall forward. Contributing to this problem was the Swing's restraint 
system: a single lap belt. The result of these design characteristics 
was that infants were both: (a) Falling forward and striking the 
ground, head or face first, and/or (b) falling to one side and striking 
the edge of the molded plastic seat shell and/or the bar of the Swing's 
A-frame structural support. Graco also received consumer complaints of 
the carrying handle falling down, hitting or nearly hitting infants in 
the head. The Travel Lite carrying handle design allowed it to fall or 
be pushed down from the carry position. These elements in the Travel 
Lite Swing are defects under section 15 of the CPSA, 15 U.S.C. 2064.
    45. Throughout the summer of 2003, Graco developed and implemented 
interim design changes to address some of the swing defects. Graco 
continued to receive complaints alleging minor to moderate injuries. In 
November and December 2003, Graco implemented two additional, 
permanent, prospective design changes to address remaining defects.
    46. Graco reported information about the Travel Lite swing after 
staff contacted Graco in November 2003 to inquire about these Swings.
    47. Graco Children's Products, Inc. obtained information which 
reasonably supported the conclusion that its Travel Lite Swings 
contained defects which could create a substantial product hazard. 
Graco failed to report to the

[[Page 15845]]

Commission as required by section 15(b)(2) of the CPSA, 15 U.S.C. 
2064(b)(2).
    48. By failing to report to the Commission as required by section 
15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2), Graco committed prohibited 
acts and violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    49. Graco committed the prohibited acts set forth above 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSC, 15 U.S.C. 2069.

Graco Pack 'N' Play Portable Play Yards

    50. From 1988 to 2001, Graco manufactured, sold, and distributed in 
United States commerce the Pack 'N' Play portable crib/play yard 
(``Play Yard''). Graco is, therefore, a ``manufacturer'' of ``consumer 
products'' ``distributed in commerce'' as those terms are defined in 15 
U.S.C. 2052 (a)(1), (4), (11) and (12).
    51. The subject Play Yards, used an open corner design. Open-ended 
metal tubes formed the four top rails and were secured to four hard 
plastic top corner pieces. Babies inserted their fingers into the space 
between the metal tubes and the plastic corner pieces both during and 
after Play Yard set up. Their fingers were severed, lacerated and/or 
avulsed between the first joint and the end of the fingertip. Adults 
reported pinched and/or lacerated hands from the open corner design 
during Play Yard assembly. These are product defects under section 15 
of the CPSA, 15 U.S.C. 2064.
    52. Graco stopped making the products with the open corner design 
in 2001 and first reported to the staff in 2004.
    53. Well before 2004, Graco received consumer complaints that 
reported pinching, laceration, avulsion and amputation injuries, to 
young children and pinching or cuts to adults. Before 1997, Graco 
Children's Products, Inc. obtained information which reasonably 
supported the conclusion that its Play Yard contained defects which 
could create a substantial product hazard and created an unreasonable 
risk of serious injury. Graco failed to report to the Commission as 
required by sections 15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) 
and (3). By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Graco 
committed prohibited acts and violated section 19(a)(3) of the CPSA, 15 
U.S.C. 2068(a)(3).
    54. Graco committed the prohibited acts, set forth above, 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Graco MetroLite Strollers

    55. From 2000 through 2001, Graco manufactured, sold, and 
distributed in United States commerce a line of baby strollers know as 
the MetrolLite line (``MetroLite''), model numbers 6110DW and 6113RV. 
Graco is, therefore, a ``manufacturer'' of ``consumer products'' 
``distributed in commerce'' as those terms are defined in 15 U.S.C. 
2052 (a)(1), (4), (11) and (12).
    56. The MetroLite strollers fold up to make transport easier. The 
strollers use two latches, one on each side, designed to lock the 
stroller in a rigid, secure position when in use. The latches are 
covered with molded plastic and are not visible or accessible to the 
user. When set up and in use, however, one or both of the MetroLite 
latches may not fully engage. The stroller may appear to be set up and 
secure when it is not. A bump or jostle during use may allow the 
MetroLite to collapse. This is a product defect under section 15 of the 
CPSA, 15 U.S.C. 2064.
    57. Graco first reported to the staff in 2004.
    58. Beginning in 2001 through 2004, Graco received consumer 
complaints that reported numerous collapsing incidents and minor to 
moderate injuries. Graco Children's Products, Inc. obtained information 
which reasonably supported the conclusion that its MetroLite contained 
a defect which could create a substantial product hazard. Graco failed 
to report to the Commission as required by section 15(b)(2) of the 
CPSA, 15 U.S.C. 2064(b)(2).
    59. By failing to report to the Commission as required by section 
15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2), Graco committed a 
prohibited act and violated section 19(a)(3) of the CPSA, 15 U.S.C. 
2068(a)(3).
    60. Graco committed the prohibited act, set forth above, 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Graco Toddler Bed

    61. From 1994 through 2000, Graco manufactured, sold and 
distributed in United States commerce a Graco toddler bed (``Toddler 
Bed'') for children making the transition from crib to twin size bed. 
Graco is, therefore, a ``manufacturer'' of ``consumer products'' 
``distributed in commerce'' as those terms are defined in 15 U.S.C. 
2052 (a)(1), (4), (11) and (12).
    62. The Toddler Bed has head and footboards and partial guardrails 
with vertical slats. The vertical slat openings are 2\3/8\ inches in 
width. The size of the openings permits children's arms and legs to 
become caught. This is a product defect under section 15 of the CPSA, 
15 U.S.C. 2064.
    63. Graco first reported to the staff in 2004. From 1995 through 
2004, Graco received consumer complaints that reported numerous 
incidents and injuries, including several broken arms and legs when 
children twisted and/or fell while a limb was in a slat opening. Graco 
Children's Products, Inc. obtained information which reasonably 
supported the conclusion that its Toddler Beds contained a defect which 
could create a substantial product hazard and created an unreasonable 
risk of serious injury. Graco failed to report to the Commission as 
required by sections 15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) 
and (3).
    64. By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Graco 
committed prohibited acts and violated section 19(a)(3) of the CPSA, 15 
U.S.C. 2068(a)(3).
    65. Graco committed the prohibited acts, set forth above, 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

Graco Duo Strollers

    66. From 1994 through 2000, Graco manufactured, sold and 
distributed in United States commerce a line of strollers that seat two 
children known as Grace Duo Strollers (``Duo''). Graco is, therefore, a 
``manufacturer'' of ``consumer products'' ``distributed in commerce'' 
as those terms are defined in 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    67. The Duo latching mechanism design makes it difficult for the 
consumer to set up the stroller in a secure, fully locked position. 
Though not securely locked, the Duo can appear to be properly set up 
and ready for use. When not fully engaged, the Duo can collapse if 
bumped or jostled. This is a product defect under section 15 of the 
CPSA, 15 U.S.C. 2064.
    68. Graco first reported to the staff in 2004. From 1997 through 
2004, Graco

[[Page 15846]]

received consumer complaints that reported numerous collapsing 
incidents and moderate to severe injuries. Graco Children's Products, 
Inc. obtained information which reasonably supported the conclusion 
that its Duo strollers contained a defect which could create a 
substantial product hazard and created an unreasonable risk of serious 
injury. Grace failed to report to the Commission as required by 
sections 15(b)2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3).
    69. By failing to report to the Commission as required by sections 
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), Graco 
committed prohibited acts and violated section 19(a)(3) of the CPSA, 15 
U.S.C. 2068(a)(3).
    70. Graco committed the prohibited acts, set forth above, 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d), and thus subjected itself to civil penalties, as 
provided in section 20 of the CPSA, 15 U.S.C. 2069.

III. Response of Graco Children's Products, Inc.

    71. On behalf of Century Company, and, in its own right, Graco 
denies the allegations of the staff, set forth in paragraphs 6-70 
above; it denies that the products named herein, when assembled, 
maintained and used properly, contain any defect which could create a 
substantial product hazard or create a substantial risk of injury 
pursuant to section 15(a) of the CPSA, 15 U.S.C. 2064(a). Graco also 
denies that the products, when assembled, maintained and used properly, 
create an unreasonable risk of serious injury or death pursuant to 
section 15(b) of the CPSA, 15 U.S.C. 1064(b).
    72. Graco further denies that it violated the reporting 
requirements of section 15(b) of the CPSA, 15 U.S.C. 2064(b), and 
denies that it violated the reporting requirements of section 19(a)(4) 
of the CPSA, 15 U.S.C. 2064(a)(4). Graco denies that the information 
available to it and provided to the Commission reasonably supported the 
conclusion that the products contained a defect which could create a 
substantial product hazard or created an unreasonable risk of serious 
injury or death, and therefore, no report was required under section 
15(b) of the CPSA, 15 U.S.C. 2064(b).
    73. In settling this matter, Graco does not admit any fault, 
liability, or statutory or regulatory violation.
    74. Graco further asserts, as a general matter, that Century and 
Graco received a relatively small percentage of complaints concerning 
the above-mentioned products in relation to the number of products in 
distribution; that it developed product improvements to address the 
complaints on various products in question; that it considered the 
complaints and the reporting requirements of the CPSA and it did not 
``knowingly'' violate any reporting requirements.
    75. Graco further asserts that with respect to the Pack 'N Play, 
its corner design was common in the industry and, with respect to the 
Graco Toddler Bed, in the absence of an industry standard for toddler 
beds, the Graco product incorporated vertical slat openings of 2\3/8\ 
inches in width, consistent with the federal crib standard in 16 CFR 
1508.
    76. In cooperation with the staff, Graco agreed to undertake 
corrective action for each product identified in this Settlement 
Agreement for which such action was requested by CPSC.
    77. Graco is entering into this Settlement Agreement for settlement 
purposes only, to resolve outstanding issues that primarily occurred 
prior to Newell's acquisition of Century and Graco and to avoid 
incurring additional legal costs and expenses. This settlement does not 
constitute, nor is it evidence of, an admission of any fault, 
liability, violation of law, or wrongdoing by Century or Graco.

IV. Agreement of The Parties

    78. The Commission has jurisdiction over this matter and over Graco 
and Century pursuant to the Consumer Product Safety Act (CPSA), 15 
U.S.C. 2051 et seq.
    79. This Settlement Agreement and Order is a compromise resolution 
of the matters described above and the parties enter into this 
Agreement solely for the purpose of settlement.
    80. Graco knowingly, voluntarily and completely waives any rights 
it may have (1) to the issuance of a Complaint in this matter, (2) to 
an administrative or judicial hearing with respect to the staff 
allegations cited herein, (3) to judicial review or other challenge or 
contest of the validity of the Commission's Order, (4) to a 
determination by the Commission as to whether violations of sections 
15(b) and 19(a)(4) of the CPSA, 15 U.S.C. 2064(b) and 2068(a)(4), have 
occurred, (5) to a statement of findings of fact and conclusions of law 
with regard to the staff allegations, and (6) to any claims under the 
Equal Access to Justice Act.
    81. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, this Settlement Agreement and Order shall be 
placed on the public record and shall be published in the Federal 
Register in accordance with 16 CFR 1118.20. 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 Federal Register 
publication date.
    82. Graco shall pay a civil penalty in the amount of four million 
and no/dollars ($4,000,000.00) as set forth below and in the 
incorporated Order. The payment shall be made in four equal 
installments of one million and no/dollars ($1,000,000.00) each. The 
first payment shall be delivered to the Commission within the (10) 
calendar days of final acceptance of the Settlement Agreement and 
Order. The second payment shall be delivered to the Commission on or 
before June 15, 2005, the third payment by September 15, 2005 and the 
fourth and final payment by December 15, 2005.
    83. Upon the failure of Graco to deliver the first, or any, of its 
$1,000,000.00 payments in full to the Commission by the due dates set 
forth above, the entire amount of the civil penalty, $4,000,000.00 
shall be due and payable and delivered to the Commission by the seventh 
calendar day following the original due date of the missed payment. 
Upon the failure by Graco to deliver any payment in full to the 
Commission in accordance with the terms of this paragraph, 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).
    84. Compliance, by this Settlement Agreement and the attached 
Order, resolve the allegations of violations of sections 15(b) and 
19(a)(4) of the CPSA, 15 U.S.C. 2064(b) and 2068(a)(4), regarding the 
products named herein.
    85. The Commission may publicize this Settlement Agreement and 
Order.
    86. The Commission's Order in this matter is issued under the 
provisions of the CPSA, 15 U.S.C. 2051 et seq. A violation of this 
Order may subject Graco to appropriate legal action.
    87. Graco agrees to entry of the attached Order, which is 
incorporated herein by reference, and agrees to be bound by its terms.
    88. This Settlement Agreement is binding upon Graco and its assigns 
and successors.
    89. This Settlement Agreement may be used in interpreting the 
implementing Order. Agreements, understandings, representations, or 
interpretations apart from those contained in this Settlement Agreement 
and Order may not be used to vary or

[[Page 15847]]

contradict the terms of this Settlement Agreement and Order.

Graco Children's Products, Inc.

    Dated: March 14, 2005.

Dale Matschullat,

Vice President, General Counsel and Corporate Secretary, Newell 
Rubbermaid, Inc.

The U.S. Consumer Products Safety Commission

John Gibson Mullan,

Associate Executive Director, Office of Compliance.

Eric L. Stone,

Director, Legal Division Office of Compliance.

    Dated: March 15, 2005.

By William J. Moore, Jr.,

Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Graco Children's Products, Inc. (hereinafter, ``Graco''), a 
corporation, and the staff of the Consumer Product Safety Commission, 
and the U.S. Consumer Product Safety Commission (hereinafter, 
``Commission''), having jurisdiction over the subject matter and Graco, 
and it appearing that the Settlement Agreement and Order is in the 
public interest, it is
    Ordered, that the subject Settlement Agreement be, and hereby is 
accepted; and it is further
    Ordered, that, upon final acceptance of the Settlement Agreement 
and Order, Graco shall pay the Commission a civil penalty in the amount 
of Four Million and no/100 dollars ($4,000,000.00), in four equal 
installments of one million dollars and no/100 ($1,000,000.00) each. 
The first installment shall be paid and delivered to the Commission 
within ten (10) calendar days of final acceptance of the Settlement 
Agreement and Order. The second payment of one million and 00/100 
dollars ($1,000,000.00) shall be paid and delivered to the Commission 
on or before June 15, 2005, the third payment of one million and 00/100 
dollars ($1,000,000.00) shall be paid and delivered to the Commission 
on or before September 15, 2005, and the fourth payment of one million 
and 00/100 dollars ($1,000,000.00) shall be paid and delivered to the 
Commission on or before December 15, 2005; and it is further
    Ordered, that, upon the failure of Graco to deliver the first, or 
any, of its $1,000,000.00 payments in full to the Commission by the due 
dates set forth in this Order, the entire amount of the civil penalty, 
$4,000,000.00, shall be due and payable and delivered to the Commission 
by the seventh calendar day following the original due date of the 
missed payment. Upon the failure by Graco to deliver any payment in 
full to the Commission in accordance with the terms of the subject 
Settlement Agreement and this Order, interest on the outstanding 
balance shall accrue and shall be paid by Graco to the Commission at 
the federal legal rate of interest under the provisions of 28 U.S.C. 
1961(a) and (b).

    Provisionally accepted and Provisional Order issued on the 22nd 
day of March, 2005.

    By order of the Commission.

Todd Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 05-6066 Filed 3-28-05; 8:45 am]
BILLING CODE 6355-01-M