[Federal Register Volume 74, Number 147 (Monday, August 3, 2009)]
[Notices]
[Pages 38412-38414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18518]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0024]


Michaels 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 
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 
Michaels Stores, Inc., containing a civil penalty of $45,000.00.

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 August 18, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0024, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: M. Reza Malihi, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7733.

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

    Dated: July 28, 2009.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Michaels Stores, Inc. 
(``Michaels'') and the staff (``Staff'') of the United States 
Consumer

[[Page 38413]]

Product Safety Commission (``CPSC'' or the ``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. Michaels is a corporation organized and existing under the 
laws of Delaware, with its principal offices located in Irving, 
Texas. At all times relevant hereto, Michaels imported and/or sold 
children's products, among other arts and crafts merchandise in 
various categories such as Seasonal, Kids Crafts and Paper Crafts.

Staff Allegations

    4. Beginning in August 2007, Michaels imported into the United 
States about 310,000 units of certain seasonal writing pens, 
consisting of ``Flower Writers,'' ``Christmas Writers,'' ``Easter 
Writers'' and ``Spooky Writers'' styles, each bearing applicable 
themed decorations including flowers, Christmas, Easter and 
Halloween ornamentation (``Pen(s)''). The Pens were, in turn, 
offered for sale or sold to consumers at Michaels stores nationwide 
from August 2007 through March 2008 for about $1 per unit.
    5. The Pens are ``consumer product(s),'' and, at all times 
relevant hereto, Michaels was a ``manufacturer'' and/or a 
``retailer'' of those consumer product(s), which were ``distributed 
in commerce,'' as those terms are defined in CPSA sections 3(a)(3), 
(5), (8), (11), and (13), 15 U.S.C. Sec. Sec.  2052(a)(3), (5), (8), 
(11), and (13).
    6. The Pens are articles intended to be entrusted to or for use 
by children, and, therefore, are subject to the requirements of the 
Commission's Ban of Lead-Containing Paint and Certain Consumer 
Products Bearing Lead-Containing Paint, 16 CFR Part 1303 (the 
``Ban''). Under the Ban, toys and other children's articles must not 
bear ``lead-containing paint,'' defined as paint or other surface 
coating materials whose lead content is more than 0.06 percent of 
the weight of the total nonvolatile content of the paint or the 
weight of the dried paint film. 16 CFR Sec.  1303.2(b)(1)
    7. On October 28, 2007, the Staff obtained from the University 
of Ashland's Department of Chemistry laboratory results relating to, 
in pertinent part, testing for the presence of lead in surface 
paints on samples of the Flower Writers and Christmas Writers Pens 
purchased from a Michaels store in Mansfield, Ohio. The University's 
test results demonstrated that each of twelve paint colors tested 
contained excessive lead levels, with an average total lead content 
of 2.53 percent, and an upper range as high as 5.07 percent. These 
levels of lead are in excess of the permissible 0.06 percent limit 
set forth in the Ban.
    8. In March 2008, Michaels reported to CPSC that it had 
commissioned an independent laboratory to conduct further testing 
for the presence of lead in surface coatings on additional Pen 
samples. As expressed in two test reports issued concurrently, the 
confirmatory testing demonstrated that four (4) composite paint 
colors obtained from different locations of the Flower Writers Pens 
contained a total lead content from 4,400 parts per million (ppm) up 
to 37,000 ppm; and that six (6) composite paint colors obtained from 
different locations of the Easter Writers Pens contained a total 
lead content from 970 ppm to 31,000 ppm. These levels of lead are in 
excess of the permissible 0.06 percent limit set forth in the Ban.
    9. On April 10, 2008, the Commission and Michaels announced a 
consumer-level recall of about 310,000 units of the Pens because 
``The seasonal writing pens' surface coating contains high levels of 
lead, violating the federal lead paint standard.''
    10. Although Michaels reported no incidents or injuries 
associated with the Pens, it failed to take adequate action to 
ensure that none would bear or contain lead-containing paint, 
thereby creating a risk of lead poisoning and adverse health effects 
to children.
    11. The Pens constitute ``banned hazardous products'' under CPSA 
section 8 and the Ban, 15 U.S.C. 2057 and 16 CFR 1303.1(a)(1), 
1303.4(b), in that they bear or contain paint or other surface 
coating materials whose lead content exceeds the permissible limit 
of 0.06 percent of the weight of the total nonvolatile content of 
the paint or the weight of the dried paint film.
    12. Between August 2007 and March 2008, Michaels sold, 
manufactured for sale, offered for sale, distributed in commerce, or 
imported into the United States, or caused one or more of such acts, 
with respect to the aforesaid banned hazardous Pens, in violation of 
section 19(a)(1) of the CPSA, 15 U.S.C. 2068(a)(1). Michaels 
committed these prohibited acts ``knowingly,'' as that term is 
defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d).
    13. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Michaels 
is subject to civil penalties for the aforementioned violations.

Michaels Response

    14. Michaels denies the Staff's allegations set forth above that 
Michaels knowingly violated the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Michaels.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Michaels, or 
a determination by the Commission, that Michaels has knowingly 
violated the CPSA.
    17. In settlement of the Staff's allegations, Michaels shall pay 
a civil penalty in the amount of forty five thousand dollars 
($45,000.00) within twenty (20) calendar days of 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.
    18. Upon the Commission's 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) days, the Agreement 
shall be deemed finally accepted on the sixteenth (16th) day after 
the date it is published in the Federal Register.
    19. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Michaels 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 
Commission's Order or actions; (3) a determination by the Commission 
of whether Michaels 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.
    20. The Commission may publicize the terms of the Agreement and 
Order.
    21. The Agreement and Order shall apply to, and be binding upon, 
Michaels and each of its successors and assigns.
    22. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Michaels to appropriate 
legal action.
    23. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and Order may not be 
used to vary or contradict its terms. The Agreement shall not be 
waived, amended, modified, or otherwise altered, except in a writing 
that is executed by the party against whom such waiver, amendment, 
modification, or alteration is sought to be enforced.
    24. If any provision of the Agreement and Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and 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 Michaels agree that severing the provision materially affects 
the purpose of the Agreement and Order.

Michaels Stores, Inc.

    Dated: February 3, 2009.

By:--------------------------------------------------------------------
Michael Veitenheimer,
Senior Vice President, General Counsel and Secretary, Michaels 
Stores, Inc., 8000 Bent Branch Drive, Irving, Texas 75063.

U.S. Consumer Product Safety Commission Staff.

Cheryl A. Falvey,
General Counsel, Office of the General Counsel.

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

    Dated: March 6, 2009.
By:--------------------------------------------------------------------
    M. Reza Malihi,
Trial Attorney, Division of Compliance, Office of the General 
Counsel.

[[Page 38414]]

Order

    Upon consideration of the Settlement Agreement entered into 
between Michaels Stores, Inc. (``Michaels'') and the U.S. Consumer 
Product Safety Commission (``Commission'') staff, and the Commission 
having jurisdiction over the subject matter and over Michaels, 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 Michaels shall pay a civil penalty in the 
amount of forty five thousand dollars ($45,000.00) 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 
Michaels to make any of the foregoing payments when due, interest on 
the unpaid amount shall accrue and be paid by Michaels 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 July, 2009.

    By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. E9-18518 Filed 7-31-09; 8:45 am]
BILLING CODE 6355-01-P