[Federal Register Volume 82, Number 71 (Friday, April 14, 2017)]
[Notices]
[Pages 17979-17982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07557]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 17-C0003]


The Middleby Corporation and Viking Range 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 the Consumer 
Product Safety Commission's regulations. Published below is a 
provisionally-accepted Settlement Agreement with The Middleby 
Corporation and Viking Range LLC, containing a civil penalty in the 
amount of four million, six hundred and fifty thousand dollars 
($4,650,000), 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 May 1, 2017.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 17-C0003, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East-West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Leah Wade, Trial Attorney, Division of 
Compliance, Office of the General Counsel, Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; 
telephone (301) 504-7225.

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 The Middleby Corporation 
and Viking Range, LLC. Commissioner Kaye, Commissioner Adler, 
Commissioner Robinson and Commissioner Mohorovic voted to 
provisionally accept the Settlement Agreement and Order. Acting 
Chairman Buerkle voted to take other action as follows: 
Provisionally accept the attached Settlement Agreement and Order 
with an amendment so as to reduce the penalty amount to $2.0 
million.

    Dated: April 11, 2017.
Todd A. Stevenson,
Secretary.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION

In the Matter of:

THE MIDDLEBY CORPORATION
and
VIKING RANGE, LLC

CPSC Docket No.: 17-C0003

SETTLEMENT AGREEMENT

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
2051-2089 (``CPSA'') and 16 CFR 1118.20, The Middleby Corporation and 
Viking Range, LLC, 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. 2051-2089. By executing the Agreement, staff is acting 
on behalf of the Commission, pursuant to 16 CFR 1118.20(b). The 
Commission issues the Order under the provisions of the CPSA.
    3. Viking Range, LLC is a company, organized and existing under the 
laws of the state of Delaware, with its principal place of business in 
Greenwood, MS.
    4. Viking Range, LLC is a wholly owned subsidiary of The Middleby 
Corporation, a corporation, organized and existing under the laws of 
the state of Delaware, with its principal place of business in Elgin, 
IL. The Middleby Corporation acquired Viking from its former 
shareholders on December 31, 2012. With respect to all conduct 
occurring after December 31, 2012, as well as all ongoing commitments, 
the term ``Viking'' used herein refers both to The Middleby Corporation 
and Viking Range, LLC.

STAFF CHARGES

    5. Between July 2007 and July 2014, Viking manufactured and offered 
for sale in the United States approximately 52,000 freestanding 
30, 36, 48 and 60 Gas 
Ranges under the model families VGIC, VGCC, VGSC (``Ranges'').
    6. The Ranges are a ``consumer product,'' ``distribut[ed] in 
commerce,'' as those terms are defined or used in sections 3(a)(5) and 
(8) of the CPSA, 15 U.S.C. 2052(a)(5) and (8). Viking is a 
``manufacturer'' of the Ranges, as such term is defined in section 
3(a)(11) of the CPSA, 15 U.S.C. 2052(a)(11).
    7. The Ranges contain a defect which could create a substantial 
product hazard and create an unreasonable risk of serious injury 
because the Ranges can turn on spontaneously and cannot be

[[Page 17980]]

turned off using the control knobs, resulting in extreme surface 
temperatures that pose a burn hazard to consumers.
    8. Between June 2008 and July 2014, Viking received 170 incident 
reports of Ranges turning on spontaneously, including reports from two 
consumers who were unable to turn off one of the Ranges using the 
controls and were then burned while attempting to disconnect the power 
source. Viking also received five reports that the Ranges had 
spontaneously turned on and caused property damage to the surrounding 
areas, such as the backsplash. Several consumers called 911 for 
assistance when they discovered that the Ranges had spontaneously 
turned on and could not be turned off or disconnected.
    9. After receiving a number of reports related to the Ranges, 
Viking collected and tested Ranges, and developed a repair for the 
Ranges. Viking also issued numerous engineering change orders and 
technical bulletins identifying the defect and providing instructions 
on how to conduct the repair.
    10. Despite having information reasonably supporting the conclusion 
that the Ranges contained a defect which could create a substantial 
product hazard and created an unreasonable risk of serious injury or 
death, Viking did not notify the Commission immediately 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 violation of section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4). Instead, Viking waited until July 2, 2014 
to file a Full Report with the Commission under 15 U.S.C. 2064(b).
    11. Viking and the Commission jointly announced a recall of the 
Ranges on May 21, 2015.
    12. Because the information in Viking's possession constituted 
actual and presumed knowledge, Viking 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).
    13. Pursuant to Section 20 of the CPSA, 15 U.S.C. 2069, Viking is 
subject to civil penalties for its knowing violation of section 
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).

RESPONSE OF VIKING

    14. Viking's settlement of this matter does not constitute an 
admission of staff's charges set forth in paragraphs 5 through 13 
above.
    15. In July 2014, Viking notified the Commission pursuant to 
section 15(b) of the CPSA, 15 U.S.C. 2064(b), concerning Viking's 
receipt of complaints and incident reports that the Ranges could self-
start with the knobs in the off position if a significant amount of 
liquid from boil-overs, spills, or cleaning leaked inside the Ranges 
and pooled near the Ranges' electronic thermostats.
    16. In May 2015, in conjunction with the CPSC, Viking voluntarily 
announced a recall of all models of the Ranges that contained the 
design defect, regardless of whether Viking had received any complaints 
or incident reports related to those models.
    17. Viking recognizes that product safety is fundamental to sound 
and ethical business practice, to the integrity of the Viking brand, 
and to Viking's responsibility as a producer of quality consumer goods. 
Since The Middleby Corporation's acquisition of Viking Range, LLC, 
Viking has significantly increased its focus on consumer safety, 
including by implementing a robust Product Safety Compliance Program 
developed and overseen by The Middleby Corporation to establish, 
control and verify safe product design and prompt reporting of product 
safety defects to regulatory authorities.

AGREEMENT OF THE PARTIES

    18. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Ranges and over the parties.
    19. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Viking, or a 
determination by the Commission, that Viking violated the CPSA's 
reporting requirements.
    20. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, Viking shall pay a civil penalty in 
the amount of four million, six hundred and fifty thousand dollars 
($4,650,000) 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 Viking under this Agreement. 
Failure to make such payment by the date specified in the Commission's 
final Order shall constitute Default.
    21. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Viking to the 
United States; and interest shall accrue and be paid by Viking 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''). Viking 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 Viking 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. Viking shall pay the United States all reasonable 
costs of collection and enforcement under this paragraph, respectively, 
including reasonable attorney's fees and expenses.
    22. After staff receives this Agreement executed on behalf of 
Viking, 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 C.F.R. 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 C.F.R. 
1118.20(f).
    23. 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 C.F.R. 1118.20(h). Upon the later of: (i) 
Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon Viking, 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.
    24. Effective upon the later of: (i) the Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Viking, and (ii) and the date of issuance of the final Order, for good 
and valuable consideration, Viking 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

[[Page 17981]]

determination by the Commission of whether Viking 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.
    25. Viking shall maintain a compliance program designed to ensure 
compliance with the CPSA with respect to any consumer product imported, 
manufactured, distributed or sold by Viking, and which shall contain 
the following elements: (i) written standards, policies and procedures, 
including those designed to ensure that information that may relate to 
or impact CPSA compliance (including information obtained by quality 
control personnel) is conveyed effectively to personnel responsible for 
CPSA compliance, whether or not an injury is referenced; (ii) 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; (iii) effective 
communication of company compliance-related policies and procedures 
regarding the CPSA to all applicable employees through training 
programs or otherwise; (iv) Viking's senior management responsibility 
for, and general board oversight of, CPSA compliance; (v) retention of 
all CPSA compliance-related records for at least five (5) years, and 
availability of such records to staff upon request; and (vi) a written 
standard, policy or procedure designed to ensure that the Firm shall 
seek to include a provision in any private protective order or 
settlement that specifically allows for disclosure of relevant consumer 
product safety information to the Commission and other applicable 
authorities.
    26. Viking shall maintain and enforce a system of internal controls 
and procedures designed to ensure that, with respect to all consumer 
products imported, manufactured, distributed or sold by Viking: (i) 
information required to be disclosed by Viking to the Commission is 
recorded, processed and reported in accordance with applicable law; 
(ii) all reporting made to the Commission is timely, truthful, 
complete, accurate and in accordance with applicable law; and (iii) 
prompt disclosure is made to Viking'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, Viking's ability to record, process and report to 
the Commission in accordance with applicable law.
    27. Upon reasonable request of staff, Viking shall provide written 
documentation of its internal controls and procedures, including, but 
not limited to, the effective dates of the procedures and improvements 
thereto. Viking 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 Viking's compliance 
with the terms of the Agreement.
    28. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    29. Viking 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 Viking, enforceable against Viking in 
accordance with its terms. Viking will not directly or indirectly 
receive any reimbursement, indemnification, insurance-related payment, 
or other payment for the civil penalty to be paid pursuant to the 
Agreement and Order, except as ordered in Middleby Marshall Inc. v. 
Carl., No. N15C-10-249 (Del. Super. Ct.), or as memorialized in a 
written settlement agreement signed by the parties to that case. The 
individuals signing the Agreement on behalf of Viking represent and 
warrant that they are duly authorized by Viking to execute the 
Agreement.
    30. The signatories represent that they are authorized to execute 
this Agreement.
    31. The Agreement is governed by the laws of the United States.
    32. The Agreement and the Order shall apply to, and be binding 
upon, Viking and each of its successors, transferees, and assigns; and 
a violation of the Agreement or Order may subject Viking, and each of 
its successors, transferees, and assigns, to appropriate legal action.
    33. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    34. 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.
    35. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
C.F.R. 1118.20(h). The Agreement may be executed in counterparts.
    36. 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 Viking agree in writing that severing the provision materially 
affects the purpose of the Agreement and the Order.

(continued on next page)

THE MIDDLEBY CORPORATION and VIKING RANGE, LLC
Dated: March 29, 2017

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

The Middleby Corporation and Viking Range, LLC

Dated: March 29, 2017

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

Counsel to The Middleby Corporation and Viking Range, LLC

U.S. CONSUMER PRODUCT SAFETY COMMISSION

Mary T. Boyle,
General Counsel.

Mary B. Murphy,
Assistant General Counsel.

Dated: March 29, 2017

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

Leah Wade,
Trial Attorney, Division of Compliance, Office of the General Counsel.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION

In the Matter of:

THE MIDDLEBY CORPORATION
and
VIKING RANGE, LLC

CPSC Docket No.: 17-C0003

ORDER

    Upon consideration of the Settlement Agreement entered into between 
The Middleby Corporation and Viking Range, LLC (collectively 
``Viking''), and the U.S. Consumer Product Safety Commission 
(``Commission''), and the Commission having jurisdiction over the 
subject matter and over the parties, 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 Viking shall comply with the terms of the

[[Page 17982]]

Settlement Agreement and shall pay a civil penalty in the amount of 
four million, six hundred and fifty thousand dollars ($4,650,000), 
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 Viking to make the foregoing payment when due, 
interest on the unpaid amount shall accrue and be paid by Viking at the 
federal legal rate of interest set forth at 28 U.S.C. Sec.  1961(a) and 
(b). If Viking 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 11th day 
of April, 2017.

BY ORDER OF THE COMMISSION:

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Todd A. Stevenson, Secretary
U.S. Consumer Product Safety Commission
[FR Doc. 2017-07557 Filed 4-13-17; 8:45 am]
 BILLING CODE 6355-01-P