[Federal Register Volume 71, Number 133 (Wednesday, July 12, 2006)]
[Proposed Rules]
[Pages 39248-39249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-10963]


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CONSUMER PRODUCT SAFETY COMMISSION

16 CFR Part 1119


Civil Penalty Factors

AGENCY: Consumer Product Safety Commission.

ACTION: Proposed new interpretative rule.

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SUMMARY: Sections 20(b) and (c) of the Consumer Product Safety Act, 15 
U.S.C. 2069(b), (c), require certain factors to be considered in 
assessing and compromising penalties. A new interpretative rule is 
proposed that identifies and explains other factors that may be 
considered by the Commission and staff in evaluating the 
appropriateness and amount of a civil penalty.\1\
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    \1\ Commissioner Thomas H. Moore filed a statement which is 
available from the Office of the Secretary or on the Commission's 
Web site at http://www.cpsc.gov.

DATES: The Office of the Secretary must receive written comments not 
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later than August 11, 2006.

ADDRESSES: Written comments should be captioned ``Civil Penalties'' and 
e-mailed to the Office of the Secretary at [email protected]. Written 
comments may also be sent to the Office of the Secretary, Consumer 
Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 
20814 or by facsimile at (301) 504-0127.

FOR FURTHER INFORMATION CONTACT: John Gibson Mullan, Assistant 
Executive Director, Compliance and Field Operations at 301-504-7626.

SUPPLEMENTARY INFORMATION: Proposed new part 1119 describes factors the 
Commission and staff may consider in determining the appropriateness 
and amount of a civil penalty for violations of section 19(a), which 
includes the failure to furnish information required by section 15(b).
    The CPSA provides that a knowing violation of the prohibited acts 
enumerated in section 19(a) could subject a firm to a civil penalty 
under section 20 of the CPSA. In determining the amount of a civil 
penalty by commencing an action pursuant to section 20(b) or 
compromising a civil penalty claim under section 20(c), the Commission 
and staff consider five statutory factors set forth in the CPSA: The 
nature of the product defect, the severity of the risk of injury, the 
number of defective products distributed, the occurrence or absence of 
injury, and the appropriateness of the penalty in relation to the size 
of the business of the person charged. The proposed regulation 
describes that the Commission and staff may also consider, as 
appropriate, one or more of the following factors in determining the 
appropriateness and amount of a civil penalty: (1) A firm's previous 
record of compliance with CPSA requirements; (2) timeliness of a firm's 
response to relevant information; (3) safety and compliance monitoring; 
(4) cooperation and good faith; (5) economic gain from any delay or 
non-compliance with CPSC safety or reporting requirements; (6) a 
product's failure rate; and (7) any other pertinent factors.
    The Commission is proposing this section to provide further clarity 
and transparency in how it determines civil penalty amounts in 
individual civil penalty determinations. The Commission believes that 
adoption of this proposed regulation will result in a better 
understanding by the public of the Commission's approach to determining 
the appropriateness and amount of a civil penalty.

List of Subjects in 16 CFR Part 1119

    Administrative practice and procedure, Business and Industry, 
Consumer protection, Reporting and recordkeeping requirements.

    Accordingly, 16 CFR part 1119 is proposed to be added to read as 
follows:

PART 1119--CIVIL PENALTY FACTORS

Sec.
Sec.  1119.1 Factors considered in determining civil penalties.

    Authority: 15 U.S.C. 2058, 2063, 2064, 2067(b), 2068, 2069, 
2076(e), 2084.


Sec.  1119.1  Factors considered in determining civil penalties.

    (a) Statutory Factors. Section 20 of the Consumer Product Safety 
Act (CPSA) specifies five factors that shall be considered by the 
Commission in determining the amount of a civil penalty to be sought 
for violations of section 19(a), which includes failure to furnish 
information to the Commission as required by section 15(b). Those 
factors are: The nature of the product defect, the severity of the risk 
of injury, the number of defective products distributed, the occurrence 
or absence of injury, and the appropriateness of [the]

[[Page 39249]]

penalty in relation to the size of the business of the person charged. 
The Act also allows the Commission to compromise any civil penalty 
under section 20. In determining the amount of a penalty settlement, 
the Commission is instructed to consider the same five factors.
    (b) Other factors. In determining the appropriateness and the 
amount of any civil penalty to be pursued in negotiations when a 
violation of the reporting requirements of section 15(b) or other 
requirements of section 19(a) have occurred, in addition to the 
statutory factors set forth in section 20 of the CPSA, the Commission 
and the staff may consider, as appropriate, one or more of the 
following:
    (1) Previous record of compliance. The Commission and the staff may 
consider whether the firm has had previous safety, reporting or other 
violations, and, if so, whether the firm has taken action to address 
previous violations and to improve compliance with applicable CPSC 
safety requirements.
    (2) Timeliness of response. With regard to the matter under review, 
the Commission and the staff may consider how quickly the firm 
responded to relevant information it obtained (or reasonably should 
have obtained), and the extent to which any injuries might reasonably 
have been prevented by more timely reporting or other required action.
    (3) Safety and compliance monitoring. The Commission and the staff 
may consider the extent to which the firm has adopted a system for 
collecting and analyzing safety information and for evaluating 
reporting issues (including such system's application in the matter 
under review).
    (4) Cooperation and good faith. The Commission and the staff may 
consider the degree to which the firm cooperated and acted in good 
faith to address reporting or other product safety violations or other 
issues, both generally and with regard to the specific matter under 
review.
    (5) Economic gain from non-compliance. The Commission and the staff 
may consider the extent to which the firm profited or otherwise 
benefitted from an improper delay in reporting or complying with other 
applicable CPSC safety requirements.
    (6) Product failure rate. With regard to the product and matter 
under review, the Commission and the staff may consider the reasonably 
expected rate of failure for that type of product over time.
    (7) Any other pertinent factors. The Commission and staff may 
consider any other pertinent factors.

    Dated: July 7, 2006.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
 [FR Doc. E6-10963 Filed 7-11-06; 8:45 am]
BILLING CODE 6355-01-P