[Federal Register Volume 74, Number 72 (Thursday, April 16, 2009)]
[Notices]
[Pages 17648-17650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-8712]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0004]


Marshalls of MA, 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 
Marshalls of MA, Inc., containing a civil penalty of $235,000.00.

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 1, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0004, 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, Lead Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7612.

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

    Dated: April 9, 2009.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Marshalls of MA, Inc. 
(``Marshalls'') and the staff (``Staff'') of the United States Consumer 
Product Safety Commission

[[Page 17649]]

(``Commission'') enter into this Settlement Agreement (``Agreement''). 
The Agreement and the incorporated attached Order (``Order'') settle 
the Staff's 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. 2051-2089 (``CPSA'').
    3. Marshalls is a corporation organized and existing under the laws 
of Massachusetts, with its principal offices located in Framingham, 
Massachusetts. At all times relevant hereto, Marshalls sold apparel.

Staff Allegations

    4. From July 2007 to January 2008, Marshalls held for sale and/or 
sold various quantities of the following children's upper outerwear 
products with drawstrings at the hood or neck: Apollo Active Wear 
girls' hooded jackets; Scope Imports boys' hooded sweatshirts; Liberty 
Apparel Jewel girls' hooded sweatshirts; Rebelette girls' hooded 
sweatshirts; Kids with Character bongo jackets; GWB II French Fries/
Heartbreakers Club hooded henleys; Siegfried & Parzival Karl Kani 
sweatshirts; and U.S. Design Group Request Jeans sweatshirts. From July 
to August, 2008, Marshalls held for sale and/or sold the following 
children's upper outerwear products with drawstrings at the hood or 
neck: nZania/Element hoodies; and Seven Apparel Group hooded 
sweatshirts. The products identified in this paragraph are collectively 
referred to herein as ``Sweatshirts.'' These Sweatshirts 
identifications correspond to and are coextensive with information 
Marshalls reported to the Staff about the Sweatshirts.
    5. Marshalls sold Sweatshirts to consumers.
    6. The Sweatshirts are ``consumer product[s],'' and, at all times 
relevant hereto, Marshalls was a ``retailer'' of those consumer 
products, which were ``distributed in commerce,'' as those terms are 
defined in CPSA sections 3(a)(5), (8), and (13), 15 U.S.C. 2052(a)(5), 
(8), and (13).
    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. Marshalls informed the Commission that there had been no 
incidents or injuries from the Sweatshirts.
    11. Marshall's distribution in commerce of the 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. Recalls have been announced regarding the Sweatshirts as 
warranted.
    13. Marshalls had presumed and had actual knowledge that the 
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)(1). Marshalls had obtained information that 
reasonably supported the conclusion that the 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 
15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), required Marshalls to 
immediately inform the Commission of the defect and risk.
    14. Marshalls knowingly failed to immediately inform the Commission 
about the Sweatshirts as required by CPSA sections 15(b)(3) and (4), 15 
U.S.C. 2064(b)(3) and (4), 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 Marshalls to civil penalties.

Marshalls's Response

    15. Marshalls denies the Staff's allegations set forth above, 
including, but not limited to, any allegation that Marshalls failed 
timely to notify the Commission in accordance with section 15 of the 
CPSA.
    16. Marshalls requires that its vendors represent and warrant that 
all products sold to Marshalls comply with all applicable regulations, 
standards and requirements.
    17. Marshalls promptly notified the Commission pursuant to section 
15 of the CPSA without first being contacted by the Commission upon 
verifying that certain garments contained drawstrings at the hood or 
neck.
    18. Marshalls fully cooperated with the Commission in providing 
information necessary for the Commission to determine, with the vendor, 
whether a recall was warranted and whether the vendor had sold affected 
garments to any other retailers.
    19. Marshalls has entered into the Agreement for settlement 
purposes only, to avoid incurring additional expenses and the 
distraction of litigation. The Agreement and Order do not constitute 
and are not evidence of any fault or wrongdoing by Marshalls.

Agreement of the Parties

    20. Under the CPSA, the Commission has jurisdiction over this 
matter and over Marshalls.
    21. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Marshalls, or a 
determination by the Commission, that Marshalls knowingly violated the 
CPSA.
    22. In settlement of the Staff's allegations, Marshalls shall pay a 
civil penalty in the amount of two hundred thirty-five thousand dollars 
($235,000.00) 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

[[Page 17650]]

issuance of the final Order, Marshalls knowingly, voluntarily, and 
completely waives any rights it may have in this matter 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 Marshalls 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. The Commission may publicize the terms of the Agreement and the 
Order.
    26. The Agreement and the Order shall apply to, and be binding 
upon, Marshalls and each of its successors and assigns.
    27. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Marshalls to appropriate 
legal action.
    28. 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.
    29. 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 Marshalls agree that severing the provision materially affects the 
purpose of the Agreement and the Order.

Marshalls of MA, Inc.

    Dated: March 2, 2009.
    By:

Ann McCauley,
Secretary, Marshalls of MA, Inc., 770 Cochituate Road, Framingham, 
MA 01701.

    Dated: March 3, 2009.
    By:

Eric A. Rubel, Esq.,
Arnold & Porter LLP, 555 12th Street, NW., Washington, DC 20004-
1206.
Counsel for Marshalls of MA, Inc.

U.S. Consumer Product Safety Commission Staff.

Cheryl A. Falvey,
General Counsel.

Ronald G. Yelenik,
Assistant General Counsel, Division of Compliance, Office of the 
General Counsel.

    Dated: March 6, 2009.
    By:

Seth B. Popkin,
Lead Trial Attorney, Division of Compliance, Office of the General 
Counsel.

Order

    Upon consideration of the Settlement Agreement entered into between 
Marshalls of MA, Inc. (``Marshalls'') and the U.S. Consumer Product 
Safety Commission (``Commission'') staff, and the Commission having 
jurisdiction over the subject matter and over Marshalls, 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 Marshalls shall pay a civil penalty in the 
amount of two hundred thirty-five thousand dollars ($235,000.00) 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 Marshalls 
to make the foregoing payment when due, interest on the unpaid amount 
shall accrue and be paid by Marshalls 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 8th 
day of April, 2009.

    By Order of the Commission.

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

[FR Doc. E9-8712 Filed 4-15-09; 8:45 am]
BILLING CODE 6355-01-P