[Federal Register Volume 74, Number 179 (Thursday, September 17, 2009)]
[Notices]
[Pages 47781-47783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22398]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0036]


K.S. Trading Corporation, 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 
K.S. Trading Corporation, 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 October 2, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0036, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

[[Page 47782]]


FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7587.

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

    Dated: September 14, 2009.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, K.S. Trading Corporation 
(``K.S. Trading'') 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 Safety Act, 15 U.S.C. 2051-2089 (``CPSA'').
    3. K.S. Trading is a corporation organized and existing under the 
laws of the State of New Jersey, with its principal offices located in 
Moonachie, NJ. K.S. Trading is an importer of apparel.

Staff Allegations

    4. Between June 26, 2007 and July 11, 2007, K.S. Trading imported 
about 5,740 boys' hooded sweatshirts with drawstrings (``Drawstring 
Sweatshirts'') that were distributed from July 2007 to August 2007 to 
several nationwide retailers, who in-turn sold them to consumers under 
the ``Raw Blue'' trade name.
    5. The Drawstring Sweatshirts are ``consumer product[s],'' and, at 
all times relevant hereto, K.S. Trading was a ``manufacturer'' of those 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined in CPSA sections 3(a) (5), (8), and (11), 15 U.S.C. 
2052(a)(5), (8), and (11).
    6. 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.
    7. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-97, 
which 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.
    8. 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.
    9. K.S. Trading reported to the Commission there had been no 
incidents or injuries involving Drawstring Sweatshirts.
    10. K.S. Trading's manufacture and 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.
    11. On August 6, 2008, the Commission and K.S. Trading announced a 
recall of the Drawstring Sweatshirts. The recall informed consumers 
that they should immediately remove the drawstrings to eliminate the 
hazard.
    12. K.S. Trading 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)(1). K.S. Trading 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 15(b)(3) and (4), 15 U.S.C. 
2064(b)(3) and (4), required K.S. Trading to immediately inform the 
Commission of the defect and risk.
    13. K.S. Trading knowingly failed to immediately inform the 
Commission about the Drawstring 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 
K.S. Trading to civil penalties.

K.S. Trading's Response

    14. K.S. Trading denies the Staff's allegations that K.S. Trading 
violated the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over K.S. Trading.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by K.S. Trading, 
or a determination by the Commission, that K.S. Trading has knowingly 
violated the CPSA.
    17. In settlement of the Staff's allegations, K.S. Trading shall 
pay a civil penalty in the amount of thirty-five thousand dollars 
($35,000.00) 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.
    18. 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.
    19. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, K.S. Trading 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 K.S. Trading 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 the 
Order.
    21. The Agreement and the Order shall apply to, and be binding 
upon,

[[Page 47783]]

K.S. Trading 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 those referenced in 
paragraph 21 above 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 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.
    24. 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 K.S. Trading agree that severing the provision materially affects 
the purpose of the Agreement and the Order.

K.S. Trading Corporation

    Dated: July 14, 2009.

Shin Auk Kang,
President and Chief Executive Officer, K.S. Trading Corporation,
75 Knickerbocker Road, Moonachie, NJ 07074.

    Dated: July 20, 2009.

Jay R. McDaniel, Esquire,
Counsel for Respondent K.S. Trading Corporation, McDaniel & Chusid, 
LLP,
54 Main Street, Hackensack, NJ 07601-7007.

U.S. Consumer Product Safety Commission.

Cheryl A. Falvey,
General Counsel.

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

    Dated: July 21, 2009.

Dennis C. Kacoyanis,
Trial Attorney, Division of Compliance, Office of the General 
Counsel.

Order

    Upon consideration of the Settlement Agreement entered into between 
K.S. Trading Corporation (``K.S. Trading'') and the U.S. Consumer 
Product Safety Commission (``Commission'') staff, and the Commission 
having jurisdiction over the subject matter and over K.S. Trading, 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 K.S. Trading shall pay a civil penalty in the 
amount of thirty-five thousand dollars ($35,000.00) 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. Upon the failure of K.S. Trading to make the 
foregoing payment when due, interest on the unpaid amount shall accrue 
and be paid by K.S. Trading 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 4th 
day of September 2009.

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

[FR Doc. E9-22398 Filed 9-16-09; 8:45 am]
BILLING CODE 6355-01-P