[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79656-79658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32861]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 12-C0005]


E & B Giftware LLC, 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 E 
& B Giftware LLC, containing a civil penalty of $550,000.00, of which 
$50,000 shall be suspended, within twenty (20) days of service of the 
Commission's final Order accepting the Settlement Agreement.

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 January 6, 2012.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 12-C0005, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Regan A. Sweeney, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7831.

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


[[Page 79657]]


    Dated: December 19, 2011.
Todd A. Stevenson,
Secretary.

United States of America Consumer Product Safety Commission

    In the matter of:
    E & B Giftware LLC.
    CPSC Docket No.: 12-C0005.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, E&B Giftware LLC (``E&B'') 
and staff (``Staff'') of the U.S. Consumer Product Safety Commission 
(``Commission'' or ``CPSC'') hereby enter into this Settlement 
Agreement (``Agreement'') under the Consumer Product Safety Act 
(``CPSA''). The Agreement and the incorporated attached Order resolve 
Staff's allegations set forth below.

The Parties

    2. Staff is the staff of the CPSC, an independent federal 
regulatory agency established pursuant to, and responsible for the 
enforcement of, the CPSA, 15 U.S.C. 2051-2089.
    3. E&B Giftware LLC is a limited liability corporation, organized 
and existing under the laws of the State of Delaware, with its 
principal corporate office located in Yonkers, New York. E&B Giftware 
LLC is a parent to many other companies, including but not limited to, 
EB Brands, Inc. (hereinafter, ``EB'').

Staff Allegations

    4. Between January 2000 and October 2008, EB imported and 
distributed approximately 3 million (3,000,000) of the subject exercise 
balls under the following brand names: Bally Total Fitness, Everlast, 
Valeo, and Body Fit Fitness Balls (collectively referred to as 
``exercise balls''), which were sold at department stores and fitness 
retailers nationwide from May 2000 to February 2009, for between $15.00 
and $30.00. The exercise balls remain on the market.
    5. The exercise balls are ``consumer products'' and, at all 
relevant times, EB imported and distributed the exercise balls. 
Therefore, EB was a ``manufacturer'' of these consumer products, which 
were ``distributed in commerce,'' as those terms are defined or used in 
sections 3(a)(5), (8), and (11) of the CPSA, 15 U.S.C. 2052(a)(5), (8), 
and (11).
    6. The exercise balls are defective because they can rupture and/or 
explode when overinflated by consumers, thereby posing a falling hazard 
to consumers.
    7. EB received its first report of an incident involving a burst 
exercise ball in January 2004.
    8. By 2007, EB knew of approximately 25 reports of incidents 
involving bursting exercise balls. In 20 of those incidents, the 
bursting exercise balls were alleged to have caused various injuries, 
most of them minor.
    9. Despite being aware of the information set forth in paragraphs 6 
through 8, EB did not report to the Commission until October of 2008. 
By that time, EB was aware of at least 44 reports of incidents 
involving bursting exercise balls, which were alleged to have caused 
physical injuries, most of them minor, to 29 consumers. In April 2009, 
Commission staff and EB agreed that EB would revise its existing 
warning labels to consumers advising against overinflating the exercise 
balls. No other changes to the label, warnings, or instructions, or to 
the specifications, composition, or manufacturing process were 
recommended.
    10. Although EB had obtained sufficient information to reasonably 
support the conclusion that the exercise balls either contained a 
defect which could create a substantial product hazard, or created an 
unreasonable risk of serious injury or death, EB failed to immediately 
inform the Commission of such defect or risk, as required by sections 
15(b)(3) and (4) of the CPSA, 15 U.S.C. 2064(b)(3) and (4). In failing 
to report immediately to the Commission, EB knowingly violated section 
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4) as the term ``knowingly'' is 
defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d).
    11. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, EB is 
subject to civil penalties for its failure to immediately report to the 
Commission, as required under section 15(b) of the CPSA, 15 U.S.C. 
2064(b).

Response of E&B Giftware, LLC (on behalf of EB)

    12. EB denies the allegations of Staff that the exercise balls 
contain a defect which could create a substantial product hazard or 
create an unreasonable risk of serious injury or death. Furthermore, it 
denies that it violated the reporting requirements of Section 15(b) of 
the CPSA, 15 U.S.C. 2064(b).
    13. Exercise balls are manufactured from plastic material that is 
inflated. All exercise balls can be damaged and/or burst when they are 
subject to abuse or misuse. The mere fact that an exercise ball is 
reported to burst does not indicate that the exercise ball is 
defective. The number of complaints of burst exercise balls received by 
EB was very small, constituting only approximately .0015 percent of all 
exercise balls sold by EB. The injuries reported were minor, and the 
injuries were consistent with those expected when people fall off of 
exercise equipment.
    14. EB investigated the complaints and reports received about 
bursting balls, and it conducted tests of the exercise balls. The 
exercise balls passed all of the tests to which they were subjected; no 
manufacturing flaws could be identified; and there was no indication 
that the balls were defective. The investigations did not reveal that 
the exercise balls contained a defect.
    15. EB did not knowingly fail to report to the Commission. To the 
contrary, EB voluntarily filed a report with the Commission even though 
the testing concluded that the exercise balls did not burst when used 
as directed by the instructions.

Agreement of the Parties

    16. Under the CPSA, the Commission has jurisdiction over this 
matter and over E&B Giftware LLC and EB.
    17. In settlement of Staff's allegations, E&B or an affiliate shall 
pay a civil penalty in the amount of five hundred and fifty thousand 
dollars ($550,000.00), with $50,000.00 of that sum suspended. The civil 
penalty is payable within twenty (20) calendar days of E&B or an 
affiliate receiving service of the Commission's final Order accepting 
the Agreement. The payment shall be made by electronic payment via 
www.pay.gov.
    18. The parties agree that in consideration of this suspension of 
the above-referenced portion of the penalty amount, E&B will provide 
the CPSC with evidence of its program to comply with the reporting 
requirements of section 15(b) of the Consumer Product Safety Act, 15 
U.S.C. 2064(b), including Standard Operating Procedures and training 
materials in the possession of, or created by, E&B.
    19. The parties agree that if E&B fails to provide evidence of a 
compliance program within 20 days after the date this agreement becomes 
final, fails to pay the $500,000 civil penalty by the date designated, 
or commits a violation of 15 U.S.C. 2051, et seq., within two years of 
the date this agreement becomes final, such conduct will be considered 
a violation of this Agreement and Order, and the $50,000 suspended 
portion of the civil penalty will be immediately due and payable, along 
with interest accrued at the rate specified in accordance with the 
Order in this case.
    20. The parties enter into this Agreement for settlement purposes 
only. The Agreement does not constitute an admission by either EB or 
E&B, or a determination by the Commission that

[[Page 79658]]

EB or E&B violated the CPSA's reporting requirements. Upon issuance of, 
and E&B's compliance with, the final Order, the Commission regards this 
matter as resolved and agrees not to bring a civil penalty action, or 
other enforcement action against EB, E&B, or any of their directors, 
officers, agents, employees, representatives, successors, assigns, or 
any person in active concert and participation with any of them, based 
on Staff's allegations, set forth above, regarding the exercise balls.
    21. Upon provisional acceptance of the Agreement by the Commission, 
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). 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 16th calendar day 
after the date it is published in the Federal Register, in accordance 
with 16 CFR 1118.20(f).
    22. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, EB, E&B and any affiliate knowingly, 
voluntarily, and completely waives any rights it may have in this 
matter to the following: (i) An administrative or judicial hearing; 
(ii) judicial review or other challenge or contest of the Commission's 
actions; (iii) a determination by the Commission as to whether EB, E&B 
or any affiliate failed to comply with the CPSA and the underlying 
regulations; (iv) a statement of findings of fact and conclusions of 
law; and (v) any claims under the Equal Access to Justice Act.
    23. The Agreement and the Order shall apply to, and be binding 
upon, EB, E&B Giftware LLC, and each of its successors and/or assigns.
    24. The Commission issues the Order under the provisions of the 
CPSA, and a violation of the Order may subject EB, E&B and each of its 
successors and assigns to appropriate legal action.
    25. 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.
    26. 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, 
EB and E&B agree that severing the provision materially affects the 
purpose of the Agreement and Order.

E & B GIFTWARE LLC
Dated: December 1, 2011
By:
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David Mauer,
Chief Executive Officer
E & B GIFTWARE LLC,
4 Executive Plaza,
Yonkers, NY 10701.
Dated: December 1, 2011
By:
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Kate Beardsley,
Esq.,
Zuckerman Spaeder LLP,
1800 M Street, NW.,
Suite 1000,
Washington, DC 20036-5807.
U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF
Cheryl A. Falvey,
General Counsel.
Mary B. Murphy,
Assistant General Counsel,
Office of the General Counsel.
Dated: December 1, 2011
By:
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Regan A. Sweeney,
Trial Attorney,
Division of Compliance,
Office of the General Counsel.

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

In the matter of:
E & B GIFTWARE LLC
CPSC Docket No.: 12-C0005

Order

    Upon consideration of the Settlement Agreement entered into between 
E&B Giftware LLC (``E&B'') and U.S. Consumer Product Safety Commission 
(``Commission'') staff, and the Commission having jurisdiction over the 
subject matter and over E&B, 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 E&B shall pay a civil penalty in the amount of 
five hundred fifty thousand dollars ($550,000.00), of which $50,000 
shall be suspended, within twenty (20) days of service of the 
Commission's final Order accepting the Settlement Agreement. The 
payment shall be made via www.pay.gov. Upon the failure of E&B to make 
the foregoing payment of $500,000 when due, interest on the unpaid 
amount shall accrue and be paid by E&B at the federal legal rate of 
interest set forth at 28 U.S.C. 1961(a) and (b). In the event that E&B 
fails to make such payment, fails to provide evidence of their 
compliance program, as specified in the agreement, or commits another 
violation of 15 U.S.C. 2051, et seq., within two years of the date this 
agreement becomes final, the suspended portion of the civil penalty 
will be due and payable immediately, along with interest on the unpaid 
amount and will accrue and be paid by E&B 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 19th day 
of December, 2011.
BY ORDER OF THE COMMISSION:
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Todd A. Stevenson,
Secretary,
U.S. Consumer Product Safety Commission.
[FR Doc. 2011-32861 Filed 12-21-11; 8:45 am]
BILLING CODE 6355-01-P