[Federal Register Volume 75, Number 235 (Wednesday, December 8, 2010)]
[Notices]
[Pages 76405-76408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30834]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 11-C0002]


Winter Bee, 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).\1\ Published below is a provisionally-accepted Settlement 
Agreement with Winter Bee, Inc., containing a civil penalty of 
$200,000.00, to be suspended except for $40,000.00, to be paid over a 
period of 20 months as specified in the Order.
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    \1\ The Commission voted 4-1 to publish this notice of the 
provisional Settlement Agreement and Order. Commissioner Nord issued 
a statement, and the statement can be found at http://www.cpsc.gov/pr/statements.html.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
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request with the Office of the Secretary by December 23, 2010.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 11-C0002, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Seth B. Popkin, Lead Trial Attorney, 
Division of Enforcement and Information, 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.


[[Page 76406]]


    Dated: December 1, 2010.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Winter Bee, Inc. (``Winter 
Bee'') 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 Staff is the staff of the Commission, 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. Winter Bee is a corporation organized and existing under the 
laws of California, with its principal offices located in Los Angeles, 
California. At all times relevant hereto, Winter Bee sold apparel.

Staff Allegations

    4. From December 2004 to December 2008, Winter Bee manufactured and 
distributed in commerce children's hooded pullover and zipper 
sweatshirts with drawstrings at the neck (``Sweatshirts'').
    5. Winter Bee sold Sweatshirts to retailers.
    6. The Sweatshirts are ``consumer product[s],'' and, at all times 
relevant hereto, Winter Bee 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).
    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. Winter Bee informed the Commission that there had been no 
incidents or injuries associated with the Sweatshirts.
    11. Winter Bee'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 June 10, 2009, the Commission announced Winter Bee's recall 
of the Sweatshirts.
    13. Winter Bee 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). Winter Bee 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 Winter Bee to 
immediately inform the Commission of the defect and risk.
    14. Winter Bee 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 Winter Bee to civil 
penalties.

Winter Bee's Response

    15. Winter Bee denies the Staff's allegations above that Winter Bee 
knowingly violated the CPSA.

Agreement of the Parties

    16. Under the CPSA, the Commission has jurisdiction over this 
matter and over Winter Bee.
    17. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Winter Bee, or 
a determination by the Commission, that Winter Bee knowingly violated 
the CPSA.
    18. In settlement of the Staff's allegations, a civil penalty in 
the amount of two hundred thousand dollars ($200,000.00) shall be 
imposed against Winter Bee. Based upon Winter Bee's representations in 
the correspondence and other documents that Winter Bee and its counsel 
submitted to the Staff concerning Winter Bee's financial condition and 
concerning Winter Bee's stated inability to pay the foregoing penalty 
(collectively, ``Financial Representations''), and contingent upon the 
truthfulness, accuracy, and completeness of the Financial 
Representations, the foregoing civil penalty shall be suspended except 
for the amount of forty thousand dollars ($40,000.00).
    19. Winter Bee shall pay the $40,000.00 nonsuspended portion of the 
civil penalty in four (4) installments as follows: $25,000.00 shall be 
paid within twenty (20) calendar days of service of the Commission's 
final Order accepting the Agreement; $5,000.00 shall be paid within one 
(1) year of the date of service of the Commission's final Order 
accepting the Agreement; $5,000.00 shall be paid within sixteen (16) 
months of the date of service of the Commission's final Order accepting 
the Agreement; and $5,000.00 shall be paid within twenty (20) months of 
the date of service of the Commission's final Order accepting the 
Agreement. Each payment shall be made by check payable to the order of 
the United States Treasury.
    20. In negotiating and consenting to the terms of the Agreement, 
and in advising the Commission, the Staff has relied upon the Financial 
Representations. If, at any time, the Staff finds that any information 
provided as part of the Financial Representations was materially false, 
inaccurate, or incomplete, or that Winter Bee failed to disclose in the 
Financial Representations any asset or income, materially 
misrepresented in the Financial Representations the value of any asset 
or income, or made any other material misrepresentation or omission in 
or relating to the Financial Representations and the information 
therein, the Staff may petition the Commission to, or the Commission 
may on its own initiative, modify the Order: (a) By lifting the 
suspension of the $200,000.00 civil penalty; (b) by requiring that 
Winter Bee immediately pay the unpaid portion of the

[[Page 76407]]

$200,000.00 civil penalty; and/or (c) in any other manner that the 
Commission deems appropriate. Unless the Commission otherwise orders, 
the Agreement shall in all other respects remain in full force and 
effect.
    21. 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.
    22. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Winter Bee 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 Winter Bee 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.
    23. The Commission may publicize the terms of the Agreement and the 
Order.
    24. The Agreement and the Order shall apply to, and be binding 
upon, Winter Bee and each of its successors and assigns.
    25. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Winter Bee and each of its 
successors and assigns to appropriate legal action.
    26. 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.
    27. 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 Winter Bee agree that severing the provision materially affects the 
purpose of the Agreement and the Order.

Winter Bee, Inc.

Dated: 10/15/10

By:
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Jai Nam Lee, President,
Winter Bee, Inc.,
4150 S. Main Street,
Los Angeles, CA 90037

Dated: 10/15/10.

By:
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John N. Politis, Esq.
Politis, Nangano & Politis,
1055 West 7th Street, Suite 2288,
Los Angeles, CA 90017,
Counsel for Winter Bee, 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: 11/5/10.

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

Order

    Upon consideration of the Settlement Agreement entered into between 
Winter Bee, Inc. (``Winter Bee'') and the U.S. Consumer Product Safety 
Commission (``Commission'') staff, and the Commission having 
jurisdiction over the subject matter and over Winter Bee, 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 a civil penalty in the amount of two hundred 
thousand dollars ($200,000.00) be, and hereby is, imposed against 
Winter Bee. Based upon Winter Bee's representations in the 
correspondence and other documents that Winter Bee and its counsel 
submitted to the Commission staff concerning Winter Bee's financial 
condition and concerning Winter Bee's stated inability to pay the 
foregoing penalty (collectively, ``Financial Representations''), and 
contingent upon the truthfulness, accuracy, and completeness of the 
Financial Representations, the Commission suspends the foregoing civil 
penalty except for the amount of forty thousand dollars ($40,000.00).
    Further ordered, that Winter Bee shall pay the $40,000.00 
nonsuspended portion of the civil penalty in four (4) installments as 
follows: $25,000.00 shall be paid within twenty (20) calendar days of 
service of the Commission's final Order accepting the Agreement; 
$5,000.00 shall be paid within one (1) year of the date of service of 
the Commission's final Order accepting the Agreement; $5,000.00 shall 
be paid within sixteen (16) months of the date of service of the 
Commission's final Order accepting the Agreement; and $5,000.00 shall 
be paid within twenty (20) months of the date of service of the 
Commission's final Order accepting the Agreement. Each payment shall be 
made by check payable to the order of the United States Treasury.
    Further ordered, that the Commission staff's consent to this Order 
and the Commission's entry of this Order are premised upon the 
truthfulness, accuracy, and completeness of the Financial 
Representations. If, upon petition of the Commission staff, or upon the 
Commission's own initiative, the Commission finds that any information 
provided as part of the Financial Representations was materially false, 
inaccurate, or incomplete, or that Winter Bee failed to disclose in the 
Financial Representations any asset or income, materially 
misrepresented in the Financial Representations the value of any asset 
or income, or made any other material misrepresentation or omission in 
or relating to the Financial Representations and the information 
therein, then the Commission may modify the Order by lifting the 
suspension of the $200,000.00 civil penalty, by requiring that Winter 
Bee immediately pay the unpaid portion of the $200,000.00 civil 
penalty, and/or by making any other change to the Order that the 
Commission deems appropriate. Unless the Commission otherwise orders, 
the Agreement shall in all other respects remain in full force and 
effect.
    Further Ordered, that upon the failure of Winter Bee to make any of 
the foregoing payments when due, the total amount of the $40,000.00 
nonsuspended portion of the civil penalty shall become immediately due 
and payable, and interest on the unpaid amount shall accrue and be paid 
by Winter Bee 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 1st day 
of December, 2010.

    By Order of the Commission.

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

[[Page 76408]]

Commission.
[FR Doc. 2010-30834 Filed 12-7-10; 8:45 am]
BILLING CODE 6355-01-P