[Federal Register Volume 81, Number 193 (Wednesday, October 5, 2016)]
[Notices]
[Pages 69047-69050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24075]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 16-C0005]


Best Buy Co., 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 the Consumer 
Product Safety Commission's regulations. Published below is a 
provisionally-accepted Settlement Agreement with Best Buy Co., Inc., 
containing a civil penalty in the amount of 3.8 million dollars 
($3,800,000) within thirty (30) 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 October 20, 2016.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 16-C0005 Office of the 
Secretary, Consumer Product Safety Commission, 4330 East-West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Laura Thomson, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East-West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7263.

[[Page 69048]]


SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.\1\
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    \1\ The Commission voted (4-1) to provisionally accept the 
Settlement Agreement and Order regarding Best Buy Co., Inc. Chairman 
Kaye, Commissioner Adler, Commissioner Robinson and Commissioner 
Mohorovic voted to provisionally accept the Settlement Agreement and 
Order. Commissioner Buerkle voted to reject the Settlement Agreement 
and Order.

    Dated: September 30, 2016.
Todd A. Stevenson,
Secretary.

United States of America Consumer Product Safety Commission

    In the Matter of: Best Buy Co., Inc., CPSC Docket No.: 16-C0005.

Settlement Agreement

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
Sec. Sec.  2051-2089 (``CPSA'') and 16 CFR Sec.  1118.20, Best Buy Co., 
Inc., and its subsidiaries (collectively, ``Best Buy''), and the United 
States Consumer Product Safety Commission (``Commission''), through its 
staff, hereby enter into this Settlement Agreement (``Agreement''). The 
Agreement and the incorporated attached Order resolve staff's charges 
set forth below.

The Parties

    2. The Commission is an independent federal regulatory agency, 
established pursuant to, and responsible for, the enforcement of the 
CPSA, 15 U.S.C. Sec. Sec. ``2051-2089. By executing the Agreement, 
staff is acting on behalf of the Commission, pursuant to 16 CFR Sec.  
1118.20(b). The Commission issues the Order under the provisions of the 
CPSA.
    3. Best Buy is a corporation, organized and existing under the laws 
of the state of Minnesota, with its principal place of business in 
Richfield, MN.

Staff Charges

    4. Between September 2010 and October 2015, Best Buy knowingly 
sold, offered for sale, and distributed in commerce recalled consumer 
products in violation of Section 19(a)(2)(B) of the CPSA, 15 U.S.C. 
Sec.  2068(a)(2)(B). Over the course of five years, Best Buy sold units 
from 16 separate recalls of consumer products, totaling approximately 
600 units of recalled products (the ``Recalled Products''), at its 
retail stores, online, and through Best Buy's secondary market sales 
channels, more than 400 of which were the Canon Cameras described in 
paragraph 5, below.
    5. The Recalled Products include:
 Toshiba Satellite Notebook Computers, recalled on September 2, 
2010 (``Toshiba Notebooks'')
 iSi North America Twist `n Sparkle Beverage Carbonation 
Systems, recalled on July 5, 2012 (``Twist `n Sparkles'')
 LG Electronics Gas Dryers, recalled on August 2, 2012 (``LG 
Dryers'')
 GE Dishwashers, recalled on August 9, 2012 (``GE 
Dishwashers'')
 Canon EOS Rebel T4i Digital Cameras, recalled on August 14, 
2012 (``Canon Cameras'')
 GE Profile Front Load Washer, recalled on October 3, 2012 
(``GE Washers'')
 Sauder Woodworking Company Gruga Office Chairs, recalled on 
November 7, 2012 (``Office Chairs'')
 LG Electronics Electric Ranges, recalled on November 8, 2012 
(``LG Ranges'')
 LG Electronics Top-Loading Washing Machines, recalled on 
December 18, 2012 (``LG Washers'')
 Samsonite Dual-Wattage Travel Converters, recalled on February 
12, 2013 (``Samsonite Converters'')
 Definitive Technology SuperCube 2000 Subwoofers, recalled on 
March 28, 2013 (``SuperCubes'')
 Gree Dehumidifiers, recalled on September 12, 2013, expanded 
in January 2014 and reannounced in May 2014 (``Dehumidifiers'')
 Frigidaire Professional Blenders, recalled on September 19, 
2013 (``Blenders'')
 Schneider Electric APC Surge Arrest Surge Protector, recalled 
on October 3, 2013 (``Surge Protectors'')
 Coby 32-inch Flat Screen TV, recalled on December 12, 2013 
(``Coby TVs''), and
 Whirlpool Jenn-Air Wall Oven, recalled on July 29, 2015 (Jenn-
Air Wall Ovens'')

    6. Post-recall sales of the Recalled Products resulted in one 
reported injury. A consumer who purchased a recalled Canon Camera at a 
Best Buy store developed a skin irritation, which was the hazard for 
which the product had been recalled eight months before the purchase.
    7. On September 12, 2013, Gree dehumidifiers were recalled due to a 
defect that caused them to overheat and catch fire. Two weeks later, 
Best Buy sold a Gree dehumidifier with a model number within the scope 
of the recall. The unit subsequently caught fire internally. Best Buy's 
recordkeeping did not enable it to identify whether the sold unit bore 
the date range identified in the recall announcement.
    8. Fifteen of the 16 Recalled Products were subject to voluntary 
corrective action plans taken by the manufacturers in consultation with 
the Commission. Each of these recalls was also publicized by each 
respective manufacturer and by the Commission. The remaining Recalled 
Product was recalled by Best Buy and other retailers in consultation 
with the Commission because the manufacturer had ceased operations at 
the time of the recall; this recall was publicized by Best Buy, the 
other retailers, and by the Commission.
    9. The Recalled Products are ``consumer products,'' and, at all 
relevant times, Best Buy was a ``retailer'' of these consumer products, 
which were ``distributed in commerce,'' as those terms are defined or 
used in sections 3(a)(5), (8) and (13), of the CPSA, 15 U.S.C. 
2052(a)(5), (8) and (13).
    10. Under CPSA section 19(a)(2)(B), it is unlawful for any person 
to sell, offer for sale, manufacture for sale, distribute in commerce, 
or import into the United States, any consumer product that is subject 
to voluntary corrective action taken by the manufacturer, in 
consultation with the Commission, of which action the Commission has 
notified the public, or if the seller, distributor, or manufacturer 
knew, or should have known, of such voluntary corrective action.
    11. Pursuant to section 20(a)(l) of the CPSA, 15 U.S.C. 2069(a)(1), 
any person who ``knowingly'' violates CPSA section 19 is subject to 
civil penalties. Under section 20(d) of the CPSA, 15 U.S.C. 2069(d), 
the term ``knowingly'' means: ``(1) the having of actual knowledge, or 
(2) the presumed having of knowledge deemed to be possessed by a 
reasonable man who acts in the circumstances, including knowledge 
obtainable upon the exercise of due care to ascertain the truth of 
representations.''
    12. Best Buy sold and distributed Recalled Products because Best 
Buy failed to implement adequate procedures to accurately identify, 
quarantine, and prevent the sales of the Recalled Products across all 
its supply channels. For example, Best Buy added an ``Inactive'' or 
``Do Not Sell'' marker to the product codes of some Recalled Products 
to block entry of the code into the register and prevent the sale. In 
some cases, however, product codes were not permanently blocked based 
on inaccurate information that the Recalled Product had never been, or 
was no longer in, inventory; at other times, the blocked codes were 
``turned back on'' prematurely, and in a few cases, overridden.
    13. Best Buy communications show that, in July 2011, Best Buy 
secondary markets personnel reported to a manager that recalled Toshiba

[[Page 69049]]

Notebooks were in inventory and sought guidance on protocol for 
handling the Recalled Product. Despite this information, immediate 
action was not taken to prevent future sales. The next month Best Buy 
sold at least five recalled Toshiba Notebooks, and approximately 15 the 
following month. Best Buy sold an additional 44 recalled Toshiba 
Notebooks over the next three years, the last sale occurring in October 
2014.
    14. In May 2013, staff notified Best Buy that it was conducting an 
investigation into the sale of the recalled Canon Cameras. Shortly 
thereafter, Best Buy notified staff of sales of additional Recalled 
Products. At staff's request, Best Buy then audited its sales records 
for the prior two years and reported sales of other Recalled Products.
    15. Even though Best Buy advised staff of system enhancements Best 
Buy had implemented to reduce the risk of post-recall sales, Best Buy's 
sales of Recalled Products continued from June 2013 through October 
2015 (including during staff's civil penalty investigation), during 
which time Best Buy sold approximately 35 units of Recalled Products.
    16. Best Buy knew and/or should have known of these sales of 
Recalled Products.
    17. Best Buy's sale and distribution of the Recalled Products was 
``knowing,'' as that term is defined in section 20(d) of the CPSA, 15 
U.S.C. 2069(d).
    18. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Best Buy is 
subject to civil penalties for its knowing sale of the Recalled 
Products, in violation of section 19(a)(2)(B) of the CPSA, 15 U.S.C. 
2068(a)(2)(B).

Response of Best Buy

    19. Best Buy's settlement of this matter does not constitute an 
admission of the staff's charges as set forth in paragraphs 4 through 
21.
    20. Before any post-recall sales were identified, Best Buy had 
begun enhancing its procedures to help prevent the sale of recalled 
products. Moreover, in connection with this matter, Best Buy worked 
cooperatively with CPSC staff to identify additional process 
enhancements to further reduce the risk of such sales.

Agreement of the Parties

    21. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Recalled Products described in this Agreement and over 
Best Buy.
    22. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Best Buy, or a 
determination by the Commission, that Best Buy knowingly violated the 
CPSA.
    23. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, Best Buy shall pay a civil penalty in 
the amount of 3.8 million dollars ($3,800,000) within thirty (30) 
calendar days after receiving service of the Commission's final Order 
accepting the Agreement. All payments to be made under the Agreement 
shall constitute debts owing to the United States and shall be made by 
electronic wire transfer to the United States via: http://www.pay.gov 
for allocation to and credit against the payment obligations of Best 
Buy under this Agreement. Failure to make such payment by the date 
specified in the Commission's final Order shall constitute Default.
    24. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Best Buy to the 
United States, and interest shall accrue and be paid by Best Buy at the 
federal legal rate of interest set forth at 28 U.S.C. 1961(a) and (b), 
from the date of Default, until all amounts due have been paid in full 
(hereinafter ``Default Payment Amount'' and ``Default Interest 
Balance''). Best Buy shall consent to a Consent Judgment in the amount 
of the Default Payment Amount and Default Interest Balance, and the 
United States, at its sole option, may collect the entire Default 
Payment Amount and Default Interest Balance, or exercise any other 
rights granted by law or in equity, including, but not limited to, 
referring such matters for private collection; and Best Buy agrees not 
to contest, and hereby waives and discharges any defenses to, any 
collection action undertaken by the United States or its agents or 
contractors pursuant to this paragraph. Best Buy shall pay the United 
States all reasonable costs of collection and enforcement under this 
paragraph, respectively, including reasonable attorney's fees and 
expenses.
    25. After staff receives this Agreement executed on behalf of Best 
Buy, staff shall promptly submit the Agreement to the Commission for 
provisional acceptance. Promptly following 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 the Agreement is 
published in the Federal Register, in accordance with 16 CFR 
1118.20(f).
    26. This Agreement is conditioned upon, and subject to, the 
Commission's final acceptance, as set forth above, and it is subject to 
the provisions of 16 CFR 1118.20(h). Upon the later of: (i) 
Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon Best Buy, and (ii) the date of issuance of the 
final Order, this Agreement shall be in full force and effect and shall 
be binding upon the parties.
    27. Effective upon the later of: (i) The Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Best Buy, and (ii) and the date of issuance of the final Order, for 
good and valuable consideration, Best Buy hereby expressly and 
irrevocably waives and agrees not to assert any past, present, or 
future rights to the following, in connection with the matter described 
in this Agreement: (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 of whether Best Buy 
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.
    28. Best Buy represents and agrees that it has and will maintain a 
compliance program designed to ensure compliance with the CPSA with 
respect to any consumer product imported, manufactured, distributed or 
sold by the Firm. The compliance program does and shall contain the 
following elements: Written standards, policies, and procedures 
designed to ensure compliance with CPSA statutes and regulations; 
procedures to ensure that relevant information is conveyed effectively 
to appropriate personnel responsible for CPSA compliance; mechanisms to 
communicate to all applicable Best Buy employees through training 
programs or otherwise, company policies and procedures to prevent 
violations of CPSA Sec.  19; a program for the appropriate disposition 
of recalled goods; management oversight of that program, including a 
mechanism for confidential employee reporting of compliance-related 
questions or concerns to either a compliance officer or to another 
senior manager with authority to act as necessary; senior management 
responsibility for, and general board oversight of, CPSA compliance; 
and retention of all CPSA

[[Page 69050]]

compliance-related records for at least five (5) years; and 
availability of such records to staff upon reasonable request.
    29. Best Buy represents and agrees that it has and will maintain 
and enforce a system of internal controls and procedures designed to 
ensure that, with respect to all consumer products manufactured, 
imported, distributed, or sold by Best Buy: Information required to be 
disclosed by Best Buy to the Commission is recorded, processed, and 
reported in accordance with applicable law; all reporting made to the 
Commission is timely, truthful, complete, accurate, and in accordance 
with applicable law; and prompt disclosure is made to Best Buy's 
management of any significant deficiencies or material weaknesses in 
the design or operation of such internal controls that are reasonably 
likely to affect adversely, in any material respect, Best Buy's ability 
to record, process, and report to the Commission in accordance with 
applicable law.
    30. Upon reasonable request of staff, Best Buy shall provide 
written documentation of its internal controls and procedures, 
including, but not limited to, the effective dates of the procedures 
and improvements thereto. Best Buy shall cooperate fully and truthfully 
with staff and shall make available all non-privileged information and 
materials, and personnel deemed necessary by staff to evaluate Best 
Buy's compliance with the terms of the Agreement.
    31. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    32. Best Buy represents that the Agreement: (i) Is entered into 
freely and voluntarily, without any degree of duress or compulsion 
whatsoever; (ii) has been duly authorized; and (iii) constitutes the 
valid and binding obligation of Best Buy, and each of its successors, 
transferees, and assigns, enforceable against Best Buy in accordance 
with the Agreement's terms. The individuals signing the Agreement on 
behalf of Best Buy represent and warrant that they are duly authorized 
by Best Buy to execute the Agreement.
    33. The signatories represent that they are authorized to execute 
this Agreement.
    34. The Agreement is governed by the laws of the United States.
    35. The Agreement and the Order shall apply to, and be binding 
upon, Best Buy and each of its successors, transferees, and assigns, 
and a violation of the Agreement or Order may subject Best Buy, and 
each of its successors, transferees, and assigns, to appropriate legal 
action.
    36. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    37. 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. For purposes of construction, the 
Agreement shall be deemed to have been drafted by both of the parties 
and shall not, therefore, be construed against any party for that 
reason in any subsequent dispute.
    38. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
CFR Sec.  1118.20(h). The Agreement may be executed in counterparts.
    39. If any provision of the Agreement or 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 Best Buy agree in writing that severing the provision materially 
affects the purpose of the Agreement and the Order.

BEST BUY CO., INC.

Date: September 20, 2016.

By:--------------------------------------------------------------------

Todd Hartman,

Senior Vice President, Deputy General Counsel and Chief Compliance 
Officer, Best Buy Co., Inc., 7601 Penn Ave. S., Richfield, MN 55423.

Date: September 22, 2016.

By:--------------------------------------------------------------------

Eric Rubel, Esq.

Arnold & Porter LLP, 601 Massachusetts Ave. NW., Washington, DC 
20001-3743, Counsel for Best Buy.

U.S. CONSUMER PRODUCT SAFETY COMMISSION

Mary T. Boyle,

General Counsel.

Mary B. Murphy,

Assistant General Counsel.

Date: September 22, 2016.
By:--------------------------------------------------------------------

Laura Thomson,

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

United States of America Consumer Product Safety Commission

    In the Matter of: Best Buy Co, Inc.

CPSC Docket No.: 16-C0005

ORDER

    Upon consideration of the Settlement Agreement entered into 
between Best Buy Co., Inc. (``Best Buy''), and the U.S. Consumer 
Product Safety Commission (``Commission''), and the Commission 
having jurisdiction over the subject matter and over Best Buy, and 
it appearing that the Settlement Agreement and the Order are in the 
public interest, it is:
    ORDERED that the Settlement Agreement be, and is, hereby, 
accepted; and it is
    FURTHER ORDERED that Best Buy shall comply with the terms of the 
Settlement Agreement and shall pay a civil penalty in the amount of 
3.8 million dollars ($3,800,000) within thirty (30) days after 
service of the Commission's final Order accepting the Settlement 
Agreement. The payment shall be made by electronic wire transfer to 
the Commission via: http://www.pay.gov. Upon the failure of Best Buy 
to make the foregoing payment when due, interest on the unpaid 
amount shall accrue and be paid by Best Buy at the federal legal 
rate of interest set forth at 28 U.S.C. Sec.  1961(a) and (b). If 
Best Buy fails to make such payment or to comply in full with any 
other provision of the Settlement Agreement, such conduct will be 
considered a violation of the Settlement Agreement and Order.
    Provisionally accepted and provisional Order issued on the 30th 
day of September, 2016.

BY ORDER OF THE COMMISSION:
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Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. 2016-24075 Filed 10-4-16; 8:45 am]
 BILLING CODE 6355-01-P