[Federal Register Volume 73, Number 85 (Thursday, May 1, 2008)]
[Notices]
[Pages 24050-24052]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9274]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 08-C0008]


Kohl's Department Stores, Inc., 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

[[Page 24051]]

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 
Kohl's Department Stores, Inc., containing a civil penalty of 
$35,000.00.

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 May 16, 2008.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 08-C0008, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Seth B. Popkin, Trial Attorney, Legal 
Division, Office of Compliance and Field Operations, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7612.

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

    Dated: April 23, 2008.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Kohl's Department Stores, 
Inc. (``Kohl's'') and the staff (``Staff'') of the United States 
Consumer Product Safety Commission (``Commission'') enter into this 
Settlement Agreement (``Agreement''). The Agreement and the 
incorporated attached Order (``Order'') settle the Staffs allegations 
set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established pursuant to, and responsible for the enforcement of, the 
Consumer Product Safety Act, 15 U.S.C. 2051-2084 (``CPSA'').
    3. Kohl's is a corporation organized and existing under the laws of 
Delaware, with its principal offices located in Menomonee Falls, 
Wisconsin. At all times relevant hereto, Kohl's sold apparel, 
accessories, and other products.

Staff Allegations

    4. From August 3 to September 1, 2006, Kohl's held for sale and/or 
sold, at Kohl's stores and Kohls.com, 9,626 Candie's brand children's 
hoodie sweatshirts with drawstrings through the hood, style number 
38g041k (``Drawstring Sweatshirts'').
    5. Kohl's sold the Drawstring Sweatshirts to consumers.
    6. The Drawstring Sweatshirts are ``consumer product[s],'' and, at 
all times relevant hereto, Kohl's was a ``retailer'' of those consumer 
products, which were ``distributed in commerce,'' as those terms are 
defined in CPSA sections 3(a)(l), (6), (11), and (12), 15 U.S.C. 
2052(a)(l), (6), (11), and (12).
    7. In February 1996, the Staff issued the Guidelines for 
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help 
prevent children from strangling or entangling on neck and waist 
drawstrings. The Guidelines state that drawstrings can cause, and have 
caused, injuries and deaths when they catch on items such as playground 
equipment, bus doors, or cribs. In the Guidelines, the Staff recommends 
that there be no hood and neck drawstrings in children's upper 
outerwear sized 2T to 12.
    8. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-97, 
that incorporated the Guidelines. The Guidelines state that firms 
should be aware of the hazards and should be sure garments they sell 
conform to the voluntary standard.
    9. On May 19, 2006, the Commission posted on its Web site a letter 
from the Commission's Director of the Office of Compliance to 
manufacturers, importers, and retailers of children's upper outerwear. 
The letter urges them to make certain that all children's upper 
outerwear sold in the United States complies with ASTM F1816-97. The 
letter states that the Staff considers children's upper outerwear with 
drawstrings at the hood or neck area to be defective and to present a 
substantial risk of injury to young children under Federal Hazardous 
Substances Act (``FHSA'') section 15(c), 15 U.S.C. 1274(c). The letter 
also notes the CPSA's section 15(b) reporting requirements.
    10. Kohl's reported to the Commission that there had been no 
incidents or injuries from the Drawstring Sweatshirts.
    11. Kohl's distribution in commerce of the Drawstring Sweatshirts 
did not meet the Guidelines or ASTM F1816-97, failed to comport with 
the Staff's May 2006 defect notice, and posed a strangulation hazard to 
children.
    12. On September 20, 2006, the Commission, in cooperation with 
Kohl's and the manufacturer, announced a recall of the Drawstring 
Sweatshirts, informing consumers that they should immediately remove 
the drawstrings to eliminate the hazard.
    13. Kohl's had presumed and actual knowledge that the Drawstring 
Sweatshirts distributed in commerce posed a strangulation hazard and 
presented a substantial risk of injury to children under FHSA section 
15(c)(1), 15 U.S.C. 1274(c)(l). Kohl's had obtained information that 
reasonably supported the conclusion that the Drawstring Sweatshirts 
contained a defect that could create a substantial product hazard or 
that they created an unreasonable risk of serious injury or death. CPSA 
sections 1 5(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), required 
Kohl's to immediately inform the Commission of the defect and risk.
    14. Kohl's knowingly failed to immediately inform the Commission 
about the Drawstring Sweatshirts as required by CPSA sections 15(b)(2) 
and (3), 15 U.S.C. 2064(b)(2) and (3), and as the term ``knowingly'' is 
defined in CPSA section 20(d), 15 U.S.C. 2069(d). This failure violated 
CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant to CPSA section 
20, 15 U.S.C. 2069, this failure subjected Kohl's to civil penalties.

Kohl's Response

    15. Kohl's denies the Staff's allegations above, including, but not 
limited to, the allegations that Kohl's failed to immediately inform 
the Commission about the Drawstring Sweatshirts as required by CPSA 
Sections 15(b)(2) and (3) or otherwise violated the CPSA or FHSA.
    16. In order to supply products to Kohl's, vendors are required to 
represent and warrant to Kohl's that all merchandise delivered to 
Kohl's will comply with all existing laws, regulations, standards, 
orders, and rulings, including, but not limited to, the CPSA and the 
FHSA.
    17. On August 31, 2006, an investigator with the Commission alerted 
Kohl's to the presence of the Drawstring Sweatshirts in Kohl's stores. 
Within 24 hours, Kohl's (i) had the Drawstring Sweatshirts pulled from 
the Kohls.com Web site, (ii) sent notice to all Kohl's stores to pull 
the Drawstring Sweatshirts, and (iii) took additional steps to prevent 
further sales of the Drawstring Sweatshirts.
    18. On September 1, 2006, also within 24 hours of being notified of 
the Drawstring Sweatshirts by the investigator with the Commission, 
Kohl's filed a Section 15(b) Report with the Commission.
    19. Kohl's, in cooperation with the manufacturer and the 
Commission, recalled approximately 4,400 units of the Drawstring 
Sweatshirts. The remaining 5,200 units represent units

[[Page 24052]]

that Kohl's immediately removed from Kohl's distribution channels. As 
part of the recall, Kohl's posted recall notices in all Kohl's stores 
and on the Kohls.com Web site. Kohl's also independently sent e-mail 
notifications to all known online purchasers based on the availability 
of ``ship to'' addresses.

Agreement of the Parties

    20. Under the CPSA, the Commission has jurisdiction over this 
matter and over Kohl's.
    21. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Kohl's, or a 
determination by the Commission, that Kohl's has violated the CPSA.
    22. In settlement of the Staff's allegations, Kohl's shall pay a 
civil penalty in the amount of thirty-five thousand dollars 
($35,000.00). The civil penalty shall be paid within twenty (20) 
calendar days of service of the Commission's final Order accepting the 
Agreement. The payment shall be by check payable to the order of the 
United States Treasury.
    23. Upon provisional acceptance of the Agreement, the Agreement 
shall be placed on the public record and published in the Federal 
Register in accordance with the procedures set forth in 16 CFR 
1118.20(e). In accordance with 16 CFR 1118.20(f), if the Commission 
does not receive any written request not to accept the Agreement within 
fifteen (15) calendar days, the Agreement shall be deemed finally 
accepted on the sixteenth (16th) calendar day after the date it is 
published in the Federal Register.
    24. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Kohl's knowingly, voluntarily, and 
completely waives any rights it may have regarding the Staff's 
allegations to the following: (1) An administrative or judicial 
hearing; (2) judicial review or other challenge or contest of the 
validity of the Order or of the Commission's actions; (3) a 
determination by the Commission of whether Kohl's failed to comply with 
the CPSA and its underlying regulations; (4) a statement of findings of 
fact and conclusions of law; and (5) any claims under the Equal Access 
to Justice Act.
    25. Upon issuance of, and Kohl's compliance with, the final Order, 
the Commission regards this matter as resolved and agrees not to bring 
a civil penalty action against Kohl's based upon the Staff's 
allegations contained herein regarding the Drawstring Sweatshirts.
    26. The Commission may publicize the terms of the Agreement and the 
Order.
    27. The Agreement and the Order shall apply to, and be binding 
upon, Kohl's and each of its successors and assigns.
    28. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Kohl's to appropriate 
legal action.
    29. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations apart 
from those contained in the Agreement and the Order may not be used to 
vary or contradict their terms. The Agreement shall not be waived, 
amended, modified, or otherwise altered without written agreement 
thereto executed by the party against whom such waiver, amendment, 
modification, or alteration is sought to be enforced.
    30. If any provision of the Agreement and the Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and the Order, such 
provision shall be fully severable. The balance of the Agreement and 
the Order shall remain in full force and effect, unless the Commission 
and Kohl's agree that severing the provision materially affects the 
purpose of the Agreement and the Order.
    31. Pursuant to section 6(d) of the Interim Delegation of Authority 
ordered by the Commission on February 1, 2008, the Commission delegated 
to the Assistant Executive Director for Compliance and Field Operations 
the authority to act, with the concurrence of the General Counsel, for 
the Commission under 16 CFR 1118.20 with respect to Staff allegations 
that any person or firm violated 15 U.S.C. 2068, where the total amount 
of the settlement involves no more than $100,000.

Kohl's Department Stores, Inc.
Dated: April 3, 2008.
By: Richard Schepp,
Exec. Vice President, General Counsel, and Secretary.

Kohl's Department Stores, Inc.
N56 W 17000 Ridgewood Drive,
Menomonee Falls, WI 53051.

U.S. Consumer Product Safety Commission Staff
J. Gibson Mullan,
Assistant Executive Director, Office of Compliance and Field 
Operations.

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

Dated: 4-16-08.
By: Seth B. Popkin,
Trial Attorney, Legal Division, Office of Compliance and Field 
Operations.

Order

    Upon consideration of the Settlement Agreement entered into between 
Kohl's Department Stores, Inc. (``Kohl's'') and the U.S. Consumer 
Product Safety Commission (``Commission'') staff, and the Commission 
having jurisdiction over the subject matter and over Kohl's, and 
pursuant to the authority delegated in section 6(d) of the Interim 
Delegation of Authority ordered by the Commission on February 1, 2008, 
and it appearing that the Settlement Agreement and the Order are in the 
public interest, it is
    Ordered, that the Settlement Agreement be, and hereby is, accepted; 
and it is
    Further ordered, that Kohl's shall pay a civil penalty in the 
amount of thirty-five thousand dollars ($35,000.00). The civil penalty 
shall be paid within twenty (20) calendar days of service of the 
Commission's final Order accepting the Agreement. The payment shall be 
made by check payable to the order of the United States Treasury. Upon 
the failure of Kohl's to make the foregoing payment when due, interest 
on the unpaid amount shall accrue and be paid by Kohl's at the federal 
legal rate of interest set forth at 28 U.S.C. 1961(a) and (b).
    Provisionally accepted and provisional Order issued on the 22nd day 
of April, 2008.

    By Order of the Commission.

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

[FR Doc. E8-9274 Filed 4-30-08; 8:45 am]
BILLING CODE 6355-01-M