[Federal Register Volume 72, Number 202 (Friday, October 19, 2007)]
[Notices]
[Pages 59259-59260]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-5152]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 08-C0001]


TAP Enterprises, Inc., d/b/a Cummins Industrial Tools, a 
Corporation; Provisional Acceptance of a Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: 

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otice.

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 
TAP Enterprises, Inc., d/b/a Cummins Industrial Tools, 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 November 5, 2007.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 08-C0001, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Office of Compliance and Field Operations, Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; 
telephone (301) 504-7587.

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

    Dated: October 15, 2007.
Todd A. Stevenson,
Secretary.

I. 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 TAP Enterprises, Inc., d/b/a/ Cummins Industrial 
Tools. (``TAP''), a corporation, in accordance with the Commission's 
Procedures for Investigations, Inspections, and Inquiries under the 
Consumer Product Safety Act (``CPSA''), 16 CFR 1118.20. This Settlement 
Agreement and the incorporated attached Order settle the staff's 
allegations set forth below.

II. The Parties

    2. The Commission is an independent federal regulatory agency 
responsible for the enforcement of the CPSA, 15 U.S.C. 2051-2084.
    3. TAP is a corporation organized and existing under the laws of 
the State of Kansas with its principal corporate office located at 650 
North Lincoln, Spring Hill, KS 66083. TAP is an importer and retailer 
of consumer products.

III. Allegations of the Staff

    4. Between June 2004 and March 2006, TAP imported and sold 
nationwide approximately 11,300 Mini 2-Gallon Pancake Compressors 
(``air compressor(s)''), Model Number 2112.
    5. The air compressors are ``consumer products'' and at the times 
relevant herein, TAP was a ``manufacturer'' and a ``retailer'' of those 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined in sections 3(a)(1), (4), (6), (11), and (12) of the 
CPSA, 15 U.S.C. 2052(a)(1), (4), (6), (11), and (12).
    6. The air compressors are defective because they contain an 
undersized power cord which can overheat and pose a fire hazard. In 
addition, improper assembly of the power cord strain relief component 
and improper routing of internal conductors can cause a shock hazard to 
consumers.
    7. On or about October 15, 2004, TAP learned from an insurance 
company of an October 12, 2004 incident, in which a consumer's 
workshop/studio caught fire as a result of an allegedly defective air 
compressor. The fire caused $30,000 in property damage.
    8. On or about June 30, 2005, the Commission's Clearinghouse sent 
TAP the investigational report of the October 12, 2004 incident 
conducted by a Commission investigator.
    9. In September 2005, TAP received an incident report in which a 
consumer alleged that smoke was coming out of his air compressor. 
Moreover, before September 2005, TAP became aware of a number of 
warranty claims involving the air compressors, which appear to relate 
to the defects described in paragraph 6.
    10. Although TAP obtained sufficient information to reasonably 
support the conclusion that the air compressors contained a defect 
which could create a substantial product hazard or created an 
unreasonable risk of serious injury or death, TAP 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).
    11. By failing to furnish information as required by section 15(b) 
of the CPSA, 15 U.S.C. 2064(b), TAP 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).
    12. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, TAP is 
subject to civil penalties for its failure to report under section 
15(b) of the CPSA, 15 U.S.C. 2064(b).

III. TAP's Response

    13. TAP denies the staff's allegations that it violated the CPSA as 
set forth in paragraphs 4 through 12 above.
    14. TAP asserts that for purposes of this Settlement Agreement and 
Order, it is a ``manufacturer'' as defined by section 3(a)(4) of the 
CPSA, 15 U.S.C. 2052(a)(4), solely because it is an importer of the 
subject air compressors. TAP asserts, however, that it did not 
manufacture the air compressors, nor has it manufactured other consumer 
products.
    15. TAP specifically contests and denies the allegations that it 
became aware of a number of safety-related warranty claims involving 
the air compressor before September 2005. Rather, TAP asserts that 
prior to September 2005, it had received warranty claim requests from 
consumers that identified only performance-related problems with the 
compressor (e.g., ``not working,'' ``motor froze,'' ``won't build 
pressure,'' ``etc.''). These warranty claim requests identified typical 
performance issues associated with compressors, and they did not infer 
that there were any potential safety-related issues associated with the 
product.
    16. TAP further asserts that the CPSC did not provide TAP with a 
copy of a March 28, 2005, CPSC investigational

[[Page 59260]]

report, which documented the fire investigator's simulated test of the 
compressor, until January 20, 2006. TAP did not have sufficient 
information to reasonably support the conclusion that it should file a 
section 15(b) report until January 20, 2006.
    17. TAP enters into this Settlement Agreement and Order to avoid 
incurring additional legal costs and expenses. In settling this matter, 
TAP does not admit any fault, liability, or statutory or regulatory 
violation, and this Settlement Agreement and Order do not constitute 
and are not evidence of any fault or wrongdoing on the part of TAP.

IV. Agreement of the Parties

    18. The Commission has jurisdiction over this matter and over TAP 
under the Consumer Product Safety Act, 15 U.S.C. 2051-2084.
    19. In settlement of the staff's allegations, TAP agrees to pay a 
civil penalty in the amount of $100,000.00 as set forth in the attached 
incorporated Order.
    20. The parties enter this Settlement Agreement for settlement 
purposes only. The Settlement Agreement does not constitute an 
admission by TAP or a determination by the Commission that TAP violated 
the CPSA's reporting requirements in accordance with 16 CFR 1118.20(f).
    21. Upon provisional acceptance of this Settlement Agreement 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 procedures set forth in 16 CFR 1118.20(e). Unless 
the Commission receives a written request not to accept the Settlement 
Agreement and Order within 15 calendar days, the Agreement will be 
deemed finally accepted on the 16th calendar day after the date it is 
published in the Federal Register in accordance with 16 CFR 1118.20(f).
    22. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, TAP 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 TAP failed to comply with the CPSA and the underlying 
regulations; (iv) a statement of findings of fact or conclusions of 
law; and (v) any claims under the Equal Access to Justice Act.
    23. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    24. This Settlement Agreement and Order shall apply to, and be 
binding upon TAP and each of its successors and assigns.
    25. 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 this 
Order may subject TAP to appropriate legal action.
    26. 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 contradict its terms.
    27. This Settlement Agreement shall not be waived, changed, 
amended, modified, or otherwise altered without written agreement 
thereto executed by TAP and approved by the Commission.
    28. 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 provisions shall be fully 
severable. The rest of Settlement Agreement and Order shall remain in 
full effect, unless the Commission and TAP jointly determine that 
severing the provision materially changes the purpose of the Settlement 
Agreement and Order.

TAP Enterprises, Inc.
d/b/a Cummins Industrial Tools.

Dated: September 6, 2007.

Christopher K. Lyon,
Vice President, TAP Enterprises, Inc., d/b/a/ Cummins Industrial 
Tools, 650 North Lincoln, Spring Hill, KS 66083.

Dated: September 14, 2007.

Jill M. Zucker, Esquire,
Bryan Cave, LLP,
Attorney for TAP Enterprises, Inc., d/b/a Cummins Industrial Tools, 
700 Thirteenth Street, NW., Washington, DC 20005-3906.

Consumer Product Safety Commission.
John Gibson Mullan,
Assistant Executive Director, Office of Compliance and Field 
Operations, Consumer Product Safety Commission, 4330 East West 
Highway, Bethesda, MD 20814.

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

Dated: September 17, 2007.

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

Order

    Upon consideration of the Settlement Agreement entered into between 
TAP Enterprises, Inc., d/b/a Cummins Industrial Tools (``TAP'') and the 
staff of the Consumer Product Safety Commission (``the Commission''); 
and the Commission having jurisdiction over the subject matter and TAP; 
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 TAP shall pay a civil penalty of ONE HUNDRED 
THOUSAND DOLLARS ($100,000.00) to the United States Treasury in four 
installments as follows: TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) 
shall be paid within twenty (20) calendar days of service of the Final 
Order upon TAP; TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) shall be paid 
within 180 days of service of the Final Order upon TAP; TWENTY-FIVE 
THOUSAND DOLLARS ($25,000.00) shall be paid within 270 days of service 
of the Final Order upon TAP; and TWENTY-FIVE THOUSAND DOLLARS 
($25,000.00) shall be paid within 365 days of service of the Final 
Order upon TAP. Upon the failure of TAP to make any of the foregoing 
payments when due, the entire amount of the civil penalty shall become 
due and payable, and 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 15th day 
of October, 2007.

    By Order of the Commission,

Todd A. Stevenson,

Secretary, Consumer Product Safety Commission.

[FR Doc. 07-5152 Filed 10-18-07; 8:45 am]
BILLING CODE 6355-01-M