[Federal Register Volume 71, Number 134 (Thursday, July 13, 2006)]
[Notices]
[Pages 39673-39675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6168]


=======================================================================
-----------------------------------------------------------------------

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 06-C0004]


Family Dollar, Inc., a Corporation, Provisional Acceptance of a 
Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

-----------------------------------------------------------------------

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(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Family Dollar, a corporation, 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 July 28, 2006.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should sent written comments to the Comment 06-C0004, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Howard N. Tarnoff, Trial Attorney, 
Office of Compliance, Consumer Product Safety Commission, Washington, 
DC 20207; telephone (301) 504-7589.

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

    Dated: July 7, 2006.
Todd A. Stevenson,
Secretary.

In the Matter of Family Dollar, Inc., a Corporation; 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 Family Dollar, Inc. (``Family Dollar''), 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

[[Page 39674]]

Settlement Agreement and the incorporated attached Order settle the 
staff's allegations set forth below.

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. 2051-2084.
    3. Family Dollar is a corporation organized and existing under 
the laws of the State of Delaware with its principal corporate 
office located in Matthews, North Carolina. At all times relevant 
herein, Family Dollar sold, or offered for sale, consumer products.

Staff Allegations

    4. From approximately November 2003-February 2004, Family Dollar 
sold approximately 8,976 electric blankets (models BST-03-A-F; BST-
03-A-K; BST-03-A-Q; BST-03-A-T) that it purchased from International 
Home Fashions, Inc. (a/k/a Bilt-Safe Technologies, Inc.) [``IHF'']. 
These electric blankets will hereinafter be referred to as ``the 
Electric Blankets''.
    5. The Electric Blankets are ``consumer products'' and, at the 
times relevant herein, Family Dollar was a ``retailer'' of 
``consumer products,'' which were ``distributed in commerce'' as 
those terms are defined in sections 3(a)(1), (6), (11), and (12) of 
the CPSA, 15 U.S.C. 2052(a)(1), (6), (11), and (12).
    6. The Electric Blankets are defective because they have a 
tendency to overheat and catch on fire.
    7. Between December 2003 and June 2004, Family Dollar learned 
about approximately 40 reports of malfunction with the Electric 
Blankets. Among these incidents, there were numerous alleged 
instances of fire, scorching, or smoke damage to consumers' property 
and nine alleged personal injuries. The alleged injuries consisted 
mainly of minor skin burns. Family Dollar did not inform the 
Commission about these incidents until September 1, 2004, when it 
submitted a Section 15 report (in response to the staff's request), 
and August 25, 2005, when it submitted additional information (again 
in response to the staff's request).
    8. By February 2004, Family Dollar had decided to undertake a 
consumer level recall of the Electric Blankets. Family Dollar 
stopped selling the Electric Blankets in mid-February 2004, and it 
posted a recall poster at its retail outlets in early-March 2004.
    9. Although Family Dollar had obtained sufficient information to 
reasonably support the conclusion that the Electric Blankets 
contained a defect which could create a substantial product hazard, 
or created an unreasonable risk of serious injury or death, long 
before September 1, 2004, it failed to immediately inform the 
Commission of such defect or risk as required by sections 15(b)(2) 
and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3). In failing to do 
so, Family Dollar ``knowingly'' violated section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4), as the term ``knowingly'' is defined in 
section 20(d) of the CPSA, 15 U.S.C. 2069(d).
    10. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Family 
Dollar is subject to civil penalties for its failure to make a 
timely report pursuant to section 15(b) of the CPSA, 15 U.S.C. 
2064(b).

Response of Family Dollar

    11. Family Dollar denies the allegations of the staff that the 
Electric Blankets contain a defect which could create a substantial 
product hazard, or create an unreasonable risk of serious injury or 
death, and denies that it violated the reporting requirements of 
section 15(b) of the CPSA, 15 U.S.C. 2064(b). Family Dollar further 
did not ``knowingly'' violate any reporting requirements under the 
CPSA.
    12. Family Dollar further states that, when it first learned of 
allegations of blanket failures in December 2003, it consulted IHF, 
the party most knowledgeable about the design and operation of the 
blankets, to ascertain the severity of the problem. IHF responded 
that its contacts with customers who made the allegations indicated 
that the blankets got hot, rather than caught fire.
    13. In February 2004, after receiving reports of additional 
alleged incidents, Family Dollar stopped the sale of the blankets 
and again consulted with IHF about the significance of the 
incidents. IHF expressly represented that its legal counsel had 
advised that neither the number nor the severity of the reported 
incidents warranted a recall, and that internal mechanisms in the 
controllers of blankets involved in incidents appeared to have shut 
the controllers off before serious damage occurred. Nevertheless, 
Family Dollar, as a matter of good customer relations, decided to 
recall the blankets from consumers.
    14. At the time it considered whether to conduct the recall, 
Family dollar also reviewed the information available to determine 
whether it was required to report that information to the 
Commission. Based on that information and IHF's representations, it 
concluded that it did not have an obligation to report.
    15. To effectuate its recall, Family Dollar displayed posters 
announcing the recall in its stores in March 2004. When the 
Commission and IHF announced the recall of the Electric Blankets in 
November 2004, Family Dollar again displayed posters announcing the 
recall in its stores.

Agreement of the Parties

    16. The Commission has jurisdiction over this matter and over 
Family Dollar under the CPSA, 15 U.S.C. 2051-2084.
    17. In settlement of the staff's allegations, Family Dollar 
agrees to pay a civil penalty of one hundred thousand dollars 
($100,000). This payment shall be made by check payable to the order 
of the United States Treasury within twenty (20) calendar days of 
service upon Family Dollar of the Final Order of the Commission 
accepting this Settlement Agreement.
    18. The parties enter into this Settlement Agreement for 
settlement purposes only. The Settlement Agreement does not 
constitute an admission by Family Dollar or a determination by the 
Commission that Family Dollar has violated the CPSA's reporting 
requirements.
    19. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, the Commission shall place this Agreement 
and Order on the public record and shall publish it in the Federal 
Register in accordance with the procedure set forth in 16 CFR 
1118.20(e). If the Commission does not receive any written request 
not to accept the Settlement Agreement and Order within 15 days, the 
Agreement and Order shall be deemed finally accepted on the 16th day 
after the date it is published in the Federal Register.
    20. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, Family Dollar knowingly, 
voluntarily and completely waives any rights it may have in this 
matter to the following: (i) An administrative or judicial hearing; 
(ii) judicial review or other challenge or contest of the validity 
of the Commission's actions; (iii) a determination by the Commission 
as to whether Family Dollar failed to comply with the CPSA and its 
underlying regulations; (iv) a statement of findings of fact and 
conclusions of law; and (v) any claims under the Equal Access to 
Justice Act.
    21. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    22. This Settlement Agreement and Order shall apply to, and be 
binding upon, Family Dollar and each of its successors and assigns.
    23. The Commission's Order in this matter is issued under the 
provisions of the CPSA, 15 U.S.C. 2051-2084, and a violation of the 
Order may subject Family Dollar to appropriate legal action.
    24. This Settlement Agreement may be used in interpreting the 
Order. Agreements, understandings, representations, or 
interpretations made outside of this Settlement Agreement and Order 
may not be used to vary or to contradict its terms.
    25. This Settlement Agreement and Order shall not be waived, 
changed, amended, modified, or otherwise altered without written 
agreement thereto executed by the party against whom such amendment, 
modification, alteration, or waiver is sought to be enforced and 
approval by the Commission.
    26. If, after the effective date hereof, any provision of this 
Settlement Agreement and Order is held to be illegal, invalid, or 
unenforceable under present or future laws effective during the 
terms of the Settlement Agreement and Order, such provision shall be 
fully severable. The rest of the Settlement Agreement and Order 
shall remain in full effect, unless the Commission and Family Dollar 
determine that severing the provision materially changes the purpose 
of the Settlement Agreement and Order.

Family Dollar, Inc.

June 8, 2006.

Janet G. Kelley,

Senior Vice President, General Counsel, & Secretary, Family Dollar, 
Inc., 10401 Monroe Road, Matthews, North Carolina 28105.

June 12, 2006.

Michael J. Gidding,

Brown & Gidding, P.C., 3201 New Mexico Ave., NW., Suite 24, 
Washington, DC 20016, Counsel for Family Dollar, Inc.

[[Page 39675]]

U.S. Consumer Product Safety Commission

John Gibson Mullan,
Director,
Office of Compliance and Field Operations.

Ronald G. Yelenik,
Acting Director, Legal Division, Office of Compliance and Field 
Operations.

June 13, 2006.

Howard N. Tarnoff,

Trial Attorney, Legal Division, Office of Compliance and Field 
Operations.

In the Matter of Family Dollar, Inc., a Corporation; Order

    Upon consideration of the Settlement Agreement entered into 
between Family Dollar, Inc. (``Family Dollar'') and the staff of the 
U.S. Consumer Product Safety Commission (the ``Commission''), and 
the Commission having jurisdiction over the subject matter and over 
Family Dollar, and it appearing that the Settlement Agreement is in 
the public interest, it is

I

    Ordered that the Settlement Agreement be, and hereby is, 
accepted; and it is

II

    Furthered Ordered that Family Dollar shall pay a civil penalty 
of one hundred thousand dollars ($100,000). This payment shall be 
made by check payable to the order of the United States Treasury 
within twenty (20) calendar days of service upon Family Dollar of 
the Final Order of the Commission. Upon the failure of Family Dollar 
to make this payment in the prescribed time, 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).
    Provisionally accepted and Provisional Order issued on the 7th 
day of July 2006.

    By Order of the Commission.

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

[FR Doc. 06-6168 Filed 7-12-06; 8:45 am]
BILLING CODE 6355-01-M