[Federal Register Volume 76, Number 154 (Wednesday, August 10, 2011)]
[Notices]
[Pages 49453-49455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20216]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 11-C0007]


CVS Pharmacy, 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 
CVS Pharmacy, 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 25, 2011.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 11-C0007, 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.

    Dated: August 3, 2011.
 Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, CVS Pharmacy, Inc. (``CVS'') 
and the U.S. Consumer Product Safety Commission (``Commission'') staff 
(``Staff'') enter into this Settlement Agreement (``Agreement''). The 
Agreement and the incorporated attached Order (``Order'') settle 
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'').

[[Page 49454]]

    3. CVS is a corporation organized and existing under the laws of 
Rhode Island, with its principal offices located in Woonsocket, Rhode 
Island. At all relevant times, CVS sold apparel and other products.

Staff Allegations

    4. From August 2008 to January 2009, CVS sold and/or held for sale 
Golden Grove and Young USA children's hooded fleece jackets with 
drawstrings at the neck (``Jackets'').
    5. CVS sold the Jackets, and/or held the Jackets for sale, to 
consumers.
    6. The Jackets are ``consumer product[s],'' and, at all relevant 
times, CVS 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, 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, Staff recommends that no children's 
upper outerwear in sizes 2T to 12 be manufactured or sold to consumers 
with hood and neck drawstrings.
    8. In June 1997, ASTM adopted a voluntary standard (ASTM F1816-97) 
incorporating the Guidelines. The Guidelines state that firms should be 
aware of the hazards associated with drawstrings and should ensure that 
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 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 references the CPSA's section 15(b) (15 U.S.C. 2064(b)) reporting 
requirements.
    10. CVS informed the Commission that there had been no reported 
incidents or injuries associated with the Jackets.
    11. CVS's distribution in commerce of the Jackets did not meet 
either the Guidelines or ASTM F1816-97, failed to comport with Staff's 
May 2006 defect letter, and posed a strangulation hazard to children.
    12. On March 25, 2009, the Commission, in cooperation with the 
Jackets' importer, announced a recall of the Jackets.
    13. CVS had presumed and actual knowledge that the Jackets 
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). CVS obtained information that reasonably supported 
the conclusion that the Jackets contained a defect that could create a 
substantial product hazard or that the Jackets created an unreasonable 
risk of serious injury or death. Pursuant to CPSA sections 15(b)(3) and 
(4), 15 U.S.C. 2064(b)(3) and (4), CVS was required to immediately 
inform the Commission of the defect and risk.
    14. CVS knowingly failed to immediately inform the Commission about 
the Jackets 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 CVS to civil penalties.

CVS's Responsive Allegations

    15. CVS denies Staff's allegations that CVS knowingly violated the 
CPSA and asserts that at the time it sold the Jackets, CVS did not have 
adequate notice that civil penalties could arise from its conduct. In 
imputing knowledge to CVS, Staff principally relies upon ``Recommended 
Guidelines,'' which state that the ``CPSC's drawstring guidelines do 
not represent a standard or mandatory requirement set by the agency.'' 
Staff also relies upon ASTM F1816-97, but this voluntary standard 
merely incorporates the Guidelines by reference.
    16. In order to supply products to CVS, vendors are required to 
represent and warrant to CVS that all merchandise delivered to CVS will 
comply with all existing laws, regulations, standards, orders and 
rulings including, but not limited to, the CPSA.
    17. CVS sold not more than 582 Jackets to consumers.
    18. CVS is entering into the Agreement for settlement purposes 
only, and has made a business decision to avoid additional expenses and 
distractions related to further administrative process and litigation. 
The Agreement and Order do not constitute and are not evidence of any 
fault or wrongdoing on the part of CVS.

Agreement of the Parties

    19. Under the CPSA, the Commission has jurisdiction over this 
matter and over CVS.
    20. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by CVS, or a 
determination by the Commission, that CVS knowingly violated the CPSA.
    21. In settlement of Staff's allegations, CVS shall pay a civil 
penalty in the amount of forty-five thousand dollars ($45,000.00). The 
civil penalty shall be paid within twenty (20) calendar days of service 
of the Commission's final Order accepting the Agreement. The payment 
shall be made electronically to the Commission via http://www.pay.gov.
    22. 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.
    23. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, CVS 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 
CVS 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.
    24. The Commission may publicize the terms of the Agreement and the 
Order.
    25. The Agreement and the Order shall apply to, and be binding 
upon, CVS and each of its successors and assigns.
    26. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject CVS and each of its 
successors and assigns to appropriate legal action.
    27. The Agreement may be used in interpreting the Order. 
Understandings,

[[Page 49455]]

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.
    28. 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 CVS agree that severing the provision materially affects the 
purpose of the Agreement and the Order.

CVS Pharmacy, Inc.

Dated: June 21, 2011.

Judith Samsoni, Vice President,
CVS Pharmacy, Inc.,
One CVS Drive,
Woonsocket, RI 02895.

Dated: June 21, 2011.

Stephen P. Murphy, Esq.,
Reed Smith LLP,
1301 K Street, NW.,
Suite 1100, East Tower,
Washington, DC 20005-3373.
Counsel for CVS Pharmacy, Inc.

U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF

Cheryl A. Falvey,
General Counsel.

Mary B. Murphy,
Assistant General Counsel, Office of the General Counsel.

Dated: June 28, 2011.

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

Order

    Upon consideration of the Settlement Agreement entered into between 
CVS Pharmacy, Inc. (``CVS'') and the U.S. Consumer Product Safety 
Commission (``Commission'') staff, and the Commission having 
jurisdiction over the subject matter and over CVS, 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 CVS 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 electronically to the Commission 
via http://www.pay.gov. Upon the failure of CVS to make the foregoing 
payment when due, interest on the unpaid amount shall accrue and be 
paid by CVS 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 3rd day 
of August, 2011.

    By order of the commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 2011-20216 Filed 8-9-11; 8:45 am]
BILLING CODE 6355-01-P