[Federal Register Volume 74, Number 174 (Thursday, September 10, 2009)]
[Notices]
[Pages 46576-46578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21764]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0033]


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 
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 
$425,000.00.

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 September 25, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0033, 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: September 3, 2009.
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 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

[[Page 46577]]

Safety Act, 15 U.S.C. 2051--2089 (``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 January to February, 2009, Kohl's held for sale and/or sold 
Seattle Cotton Works hooded sweatshirts with drawstrings at the neck 
(``Sweatshirts'').
    5. Kohl's sold Sweatshirts to consumers.
    6. The 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)(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. Kohl's informed the Commission that there had been no incidents 
or injuries associated with the Sweatshirts.
    11. Kohl'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. On March 12, 2009, the Commission, in cooperation with the 
Sweatshirts' distributor, announced a recall of the Sweatshirts, 
informing consumers that they should immediately remove the drawstrings 
from the Sweatshirts to eliminate the hazard, or call the manufacturer 
to arrange for a full refund.
    13. Kohl's had presumed and 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). Kohl's 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 Kohl's to immediately 
inform the Commission of the defect and risk.
    14. Kohl's 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 Kohl's to civil penalties.

Kohl's Responsive Allegations

    15. Kohl's denies the Staff's allegations above, including, but not 
limited to, the allegations that Kohl's failed to timely notify the 
Commission about the Sweatshirts as required by CPSA sections 15(b)(3) 
and (4). Kohl's denies that it 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. After confirming that the Sweatshirts contained drawstrings, 
Kohl's immediately (i) sent notice to all Kohl's stores to pull the 
Sweatshirts from the shelves, (ii) had the Sweatshirts pulled from the 
Kohls.com Web site, and (iii) took additional steps to prevent further 
sales of the Sweatshirts.
    18. Kohl's timely notified the Commission of the Sweatshirts 
pursuant to section 15 of the CPSA.
    19. Kohl's fully cooperated with the Commission and the 
Sweatshirts' distributor in providing information necessary for the 
Commission to determine, with the Sweatshirts' distributor, whether a 
recall was warranted.
    20. Kohl's implemented the recall announced by the Commission and 
the Sweatshirts' distributor.
    21. Kohl's has entered into the Agreement 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 Kohl's.

Agreement of the Parties

    22. Under the CPSA, the Commission has jurisdiction over this 
matter and over Kohl's.
    23. 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 knowingly violated the 
CPSA.
    24. In settlement of the Staff's allegations, Kohl's shall pay a 
civil penalty in the amount of four hundred twenty-five thousand 
dollars ($425,000.00) 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.
    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 Sweatshirts.
    26. 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.
    27. 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 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

[[Page 46578]]

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.
    28. The Commission may publicize the terms of the Agreement and the 
Order.
    29. The Agreement and the Order shall apply to, and be binding 
upon, Kohl's and each of its successors and assigns.
    30. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Kohl's and each of its 
successors and assigns to appropriate legal action.
    31. 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.
    32. 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.

    Kohl's Department Stores, Inc.

Dated: July 29, 2009.

Jeff Manby,

Executive VP, GMM--Men's/YMen's/Children's, Kohl's Department 
Stores, Inc., N56 W17000 Ridgewood Drive, Menomonee Falls, WI 53051.

Dated: August 3, 2009.

Paul Izzo, Esq.,

One Post Office Square, Sharon, MA 02067. Counsel for Kohl's 
Department Stores, Inc.

U.S. Consumer Product Safety Commission Staff.

Cheryl A. Falvey,

General Counsel.

Ronald G. Yelenik,

Assistant General Counsel, Office of the General Counsel.

Dated: August 11, 2009.

Seth B. Popkin,

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

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 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 four hundred twenty-five thousand dollars ($425,000.00) 
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 
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 2nd day 
of September, 2009.

    By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. E9-21764 Filed 9-9-09; 8:45 am]
BILLING CODE 6355-01-P