[Federal Register Volume 71, Number 140 (Friday, July 21, 2006)]
[Notices]
[Pages 41426-41428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6402]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 06-C0005]


Tiffany and Company, 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 CFR 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Tiffany and Company, a corporation, containing a civil penalty of 
$262,500.

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 August 7, 2006.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 06-C0005, 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: July 18, 2006.
Todd A. Stevenson,
Secretary.

In the Matter of Tiffany and Company, 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 Tiffany and Company (``Tiffany''), 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 and the incorporated 
attached Order resolve 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. Tiffany is a corporation organized and existing under the laws 
of the State of New York with its principal corporate office located at 
727 Fifth Avenue, New York, New York. At all times relevant herein 
Tiffany marketed, distributed and sold fine jewelry, timepieces, china, 
crystal, silverware and silver baby rattles and teethers, among other 
consumer products.

Staff Allegations

    4. From November 2002 through February 2004, Tiffany sold in United 
States commerce approximately 4,255 sterling silver rattle/teethers 
with small farm animal figures (``Teethers'').
    5. The Teethers are ``consumer products'' and, at the times 
relevant herein, Tiffany 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 Teethers are defective because a metal bar at the center of 
the Teether can break off at its soldered joints during use releasing 
small round beads and small animal figures. The small beads and figures 
can pose an aspiration and choking hazard to babies.
    7. Between November and December 2003, Tiffany learned about at 
last two incidents of Teethers cracking at the soldered joint. In 
February 2004, Tiffany learned about one incident in which a Teether 
broke at the soldered joint, and a baby was reported to be mouthing a 
small animal figure that fell off of the Teether. Tiffany determined 
that hand polishing during Teether manufacture could weaken the cross 
bar solder joints and lead to separation of that metal bar from the 
Teether ring.
    8. Tiffany suspended Teether sales following the February 2004 
incident. Tiffany did not report the problem to the Commission. Tiffany 
received two more reports of Teethers cracking in March 2004. The firm 
did not report to the Commission until June 2004, after the Commission 
opened its own investigation and requested Tiffany to do so.
    9. Although Tiffany had obtained sufficient information to 
reasonably support the conclusion that the Teethers contained a defect 
which could create a substantial product hazard, it failed to inform 
the Commission of such defect and risk and required by Section 15(b)(2) 
of the CPSA, 15 U.S.C. 2064(b)(2). In failing to do so, Tiffany 
``knowingly'' violated Section 19(a)(4) of the CPSA, 15 U.S.C. 
2068(a)(4), as the

[[Page 41427]]

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, Tiffany is 
subject to the imposition of a civil penalty for its failure to make a 
report pursuant to Section 15(b) of the CPSA, 15 U.S.C. 2064(b).

Response of Tiffany

    11. Tiffany denies the allegations set forth in Paragraphs 4-10 
above. Tiffany specifically denies that the Teethers contain a defect 
that could create a substantial product hazard, that the company had 
obtained information to reasonably support the conclusion that the 
Tethers were so defective or posed such a risk, that the company was 
obligated to report to the Commission under Section 15(b) of the CPSA, 
or that the company violated Section 19(a)(4) of the CPSA or any other 
section of the CPSA, ``knowingly'' or otherwise.
    12. Tiffany stopped sale of the Teethers immediately upon receiving 
notice of the one incident in which a Teether broke, and in May 
contacted customers who had purchased Teethers, urging them to return 
the item. Tiffany also filed a report with the Commission, at the 
request of the staff.
    13. Tiffany is not aware of any consumer injury related in any way 
to the Teethers, nor has the staff alleged that any injuries have 
occurred.
    14. Tiffany enters into this Settlement Agreement for the purposes 
of compromise and settlement only, to avoid incurring additional legal 
costs and expenses.

Agreement of the Parties

    15. The Commission has jurisdiction over this matter and over 
Tiffany under the CPSA, 15 U.S.C. 2051-2084.
    16. The parties enter into this Settlement Agreement for settlement 
purposes only. The Settlement Agreement does not constitute a 
determination by the Commission that Tiffany violated the CPSA or any 
other law or regulation, nor an admission by Tiffany of any liability 
or wrongdoing by Tiffany, or that Tiffany violated the CPSA or any 
other law or regulation.
    17. In settlement of the staff's allegations, Tiffany agrees to pay 
a civil penalty of two hundred sixty-two thousand five hundred dollars 
($262,500.00) within ten (10) calendar days of receiving service of the 
Final Order of the Commission accepting this Settlement Agreement. This 
payment shall be made by check payable to the order of the United 
States Treasury.
    18. 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 calendar days, the Agreement 
and Order shall be deemed finally accepted on the 16th calendar day 
after the date it is published in the Federal Register.
    19. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, Tiffany 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 this 
Agreement and Order as issued and entered; (iii) a determination by the 
Commission as to whether Tiffany failed to comply with the CPSA and its 
underlying regulations; (iv) a statement by the Commission of findings 
of fact and conclusions of law; and (v) any claims under the Equal 
Access to Justice Act.
    20. The Commission and Tiffany may publicize the terms of the 
Settlement Agreement and Order.
    21. This Settlement Agreement and Order shall apply to, be binding 
upon, and inure to the benefit of, Tiffany and each of its successors 
and assigns.
    22. 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 Tiffany to appropriate legal action.
    23. 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.
    24. 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, change, or waiver is sought to be enforced 
and approval by the Commission.
    25. This Settlement Agreement becomes effective only upon its final 
acceptance by the Commission and service on Tiffany of the incorporated 
Final Order.
    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 Tiffany determine that 
severing the provision materially changes the purpose of the Settlement 
Agreement and Order.

Tiffany and Company

    Dated: May 11, 2006.

By: Patrick B. Dorsey,
Senior Vice President, Secretary and General Counsel, Tiffany and 
Company.

    Dated: May 24, 2006.

By: Philip Katz,
Hogan & Hartson, L.L.P., 555 Thirteenth Street, NW., Washington, DC 
20004.

U.S. Consumer Product Safety Commission

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

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

    Dated: July 18, 2006.

By: William J. Moore, Jr.,
Senior Trial Attorney, Legal Division, Office of Compliance.

In the Matter of Tiffany and Company, a Corporation

Order

    Upon consideration of the Settlement Agreement entered into between 
Tiffany and Company (``Tiffany'') and the staff of the U.S. Consumer 
Product Safety Commission (the ``Commission''), and the Commission 
having jurisdiction over the subject matter and over Tiffany, 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.
    Further ordered that Tiffany shall pay a civil penalty of two 
hundred sixty-two thousand five hundred dollars ($262,500.00) within 
ten (10) calendar days of service of the Final Order of the Commission 
accepting the Settlement Agreement. This payment shall be made by check 
payable to the order of the United States Treasury. Upon the failure of 
Tiffany to make full and timely payment or upon the making of a late 
payment, (i) The entire amount of the civil penalty shall become due 
and payable, and (ii) 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 Provision Order issued on the 18th 
day of July, 2006.


[[Page 41428]]


    By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 06-6402 Filed 7-20-06; 8:45 am]
BILLING CODE 6355-01-M