[Federal Register Volume 74, Number 13 (Thursday, January 22, 2009)]
[Notices]
[Pages 3993-3995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-755]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0003]


Lasko Products 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 
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 
Lasko Products Inc., containing a civil penalty of $500,000.00.

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 February 5, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0003, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Belinda V. Bell, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7592.

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

    Dated: January 9, 2009.
Todd A. Stevenson,
Secretary.
    United States of America
    Consumer Product Safety Commission
    In the Matter of Lasko Products Inc., a corporation

[CPSC Docket No. 09-C0003]

Settlement Agreement

    1. This Settlement Agreement (``Agreement'') is made by and between 
the staff (``staff'') of the U.S. Consumer Product Safety Commission 
(``Commission'') and Lasko Products Inc. (``Lasko''), 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 Agreement and the incorporated attached 
Order (``Order'') resolve the staffs allegations set forth below.

The Parties

    2. The Commission is an independent federal regulatory agency 
established pursuant to, and responsible for the enforcement of the 
CPSA, 15 U.S.C. 2051-2089.
    3. Lasko is a corporation organized and existing under the laws of 
the Commonwealth of Pennsylvania, with its principal corporate office 
located in West Chester, Pennsylvania.
    4. At all times relevant herein, Lasko designed, manufactured and 
sold portable electric fans, including those that are the subject of 
the Agreement and Order.

Staff Allegations

    5. Between 1999 and 2001, Lasko manufactured and distributed 
approximately 5.6 million of the subject portable electric fans under 
the following brand names and model numbers: Lasko 2135, 3300, 3400, 
3410, 3510, 3515, 3521,3550, 3700, 3723,

[[Page 3994]]

3733, 3750, 3800; Galaxy 3733; General Electric 106600, 106620, 106630; 
and Air King 9500, and 9515, (collectively, ``fans'' or ``products''). 
The fans were sold from 2000 through 2004, by distributors and in 
retail stores nationwide, for between $10 and $25.
    6. The fans are ``consumer product(s)'' and, at all times relevant 
herein, Lasko was a ``manufacturer'' of ``consumer product(s),'' which 
were ``distributed in commerce'' as those terms are defined or used in 
sections 3(a)(3), (5), (8), and (11) of the CPSA, 15 U.S.C. 2052(a)(3), 
(5), (8), and (11).
    7. The fans are defective because it is possible for an internal 
short to occur in the motor windings of some of the fans, which may 
cause the fans to overheat, smoke and/or catch fire, thereby presenting 
a substantial product hazard to consumers.
    8. Between November 2002 and September 2005, Lasko received 
approximately forty two (42) reports of incidents involving certain 
fans overheating, smoking, melting or catching fire, which caused 
property damage and at least nine (9) personal injuries. Lasko filed 
its Initial Report on July 13, 2005 and filed its Full Report on 
September 2, 2005. The fans were recalled on February 8, 2006.
    9. Although Lasko had obtained sufficient information to reasonably 
support the conclusion that the fans contained a defect which could 
create a substantial product hazard, or created an unreasonable risk of 
serious injury or death, it failed to immediately inform the Commission 
of such defect or risk as required by sections 15(b)(3) and (4) of the 
CPSA, 15 U.S.C. 2064(b)(3) and (4). In failing to do so, Lasko 
``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, Lasko is 
subject to civil penalties for its failure to report as required under 
section 15(b) of the CPSA, 15 U.S.C. 2064(b).

Response of Lasko

    11. In the spring and early summer of 2005, Lasko received notice 
of a number of claims and/or received certain products for inspection 
that indicated a potential pattern of failure that had not been seen 
prior to that time.
    12. The number and the nature of incidents or claims reported to 
Lasko prior to the summer of 2005 was insufficient to indicate any 
specific failure mode, pattern of failure or to reasonably support the 
conclusion that the fans contained a defect which could create a 
substantial product hazard, or created an unreasonable risk of serious 
injury or death.
    13. Lasko immediately commenced an investigation and provided the 
Commission with an Initial Report, in a timely manner, on July 13, 
2005.
    14. Lasko specifically denies that it failed to immediately inform 
the Commission of any defect or risk as required by sections 15(b)(3) 
and (4) of the CPSA, 15 U.S.C. 2064(b)(3) and (4). Lasko further denies 
that it in any way or ``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).

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Lasko.
    16. In settlement of the staff's allegations, Lasko agrees to pay a 
civil penalty of five hundred thousand dollars ($500,000.00) within 
twenty (20) calendar days of receiving service of the Commission's 
final Order accepting the Agreement. This payment shall be made by 
check payable to the order of the United States Treasury and mailed to 
Cheryl Falvey, General Counsel, Office of the General Counsel, U.S. 
Consumer Product Safety Commission, 4330 East West Highway, Bethesda, 
MD 20814.
    17. The parties enter the Agreement for settlement purposes only. 
The Agreement does not constitute an admission by Lasko or a 
determination by the Commission that Lasko violated the CPSA's 
reporting requirements.
    18. Upon provisional acceptance of the Agreement by the Commission, 
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). If the Commission does not receive any written requests not 
to accept the Agreement within 15 calendar days, the Agreement shall 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).
    19. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Lasko 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 Commission's actions; (iii) 
a determination by the Commission as to whether Lasko failed to comply 
with the CPSA and the underlying regulations; (iv) a statement of 
findings of fact and conclusions of law; and (v) any claims under the 
Equal Access to Justice Act.
    20. The Commission may publicize the terms of the Agreement and 
Order.
    21. The Agreement and Order shall apply to, and be binding upon 
Lasko and each of its successors and assigns.
    22. The Commission's Order in this matter is issued under the 
provisions of the CPSA, and a violation of the Order may subject those 
referenced in paragraph 21 above to appropriate legal action.
    23. This Agreement may be used in interpreting the Order. 
Agreements, understandings, representations, or interpretations made 
apart from those contained in the Agreement and Order may not be used 
to vary or to contradict their terms.
    24. The Agreement shall not be waived, 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.
    25. If, after the effective date hereof, 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 Order shall remain in full 
force and effect, unless the Commission and Lasko agree that severing 
the provision materially affects the purpose of the Agreement and 
Order.

Lasko Products, Inc.

Dated: 12/11/08.
By: Bradford M. Brush, General Counsel, Lasko Products, Inc., 820 
Lincoln Avenue, West Chester, PA 19380.

Dated: 12/10/08.
By: Neil A. Goldberg, Esquire, 665 Main Street, Suite 400, Buffalo, 
NY 14203, Counsel for Lasko Products, Inc.

U.S. Consumer Product Safety Commission

Cheryl Falvey,
General Counsel.
Ronald G. Yelenik,
Assistant General Counsel, Division of Compliance, Office of the 
General Counsel.
Dated: 12/16/08.
By: Belinda V. Bell, Trial Attorney, Division of Compliance, Office 
of the General Counsel.

United States of America

Consumer Product Safety Commission

In the Matter of Lasko Products Inc.

[CPSC Docket No. 09-C0003]

Order

    Upon consideration of the Settlement Agreement entered into between 
Lasko Products Inc. (``Lasko'') and the U.S.

[[Page 3995]]

Consumer Product Safety Commission (``Commission'') staff, and the 
Commission having jurisdiction over the subject matter and over Lasko, 
and it appearing that the Settlement Agreement and Order are in the 
public interest, it is
    Ordered that the Settlement Agreement be, and hereby is, accepted 
and it is
    Further ordered that Lasko shall pay a civil penalty in the amount 
of five hundred thousand dollars ($500,000.00), within twenty (20) 
calendar days of service of the Commission's final Order accepting the 
Settlement Agreement. The payment shall be made by check payable to the 
order of the United States Treasury. Upon the failure of Lasko to make 
the foregoing payment when due, interest on the unpaid amount shall 
accrue and be paid by Lasko 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 9th day 
of January 2009.


    By Order of the Commission.

Todd A. Stevenson,
Secretary,
Consumer Product Safety Commission.
[FR Doc. E9-755 Filed 1-21-09; 8:45 am]
BILLING CODE 6355-01-M