[Federal Register Volume 87, Number 132 (Tuesday, July 12, 2022)]
[Notices]
[Pages 41294-41297]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14822]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 22-C0002]


Vornado Air, LLC

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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    The Commission publishes in the Federal Register any settlement 
that it provisionally accepts under the Consumer Product Safety Act. 
Published below is a provisionally accepted Settlement Agreement with 
Vornado Air, LLC, containing a civil penalty in the amount of seven 
million, five hundred thousand dollars ($7,500,000), subject to the 
terms and conditions of the Settlement Agreement.\1\
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    \1\ The Commission voted (4-0-1) to provisionally accept the 
proposed Settlement Agreement and Order pertaining to Vornado Air, 
LLC. Chair Hoehn-Saric, Commissioners Baiocco, Trumka and Boyle 
voted to provisionally accept the Settlement Agreement and Order. 
Commissioner Feldman voted to take other action. Chair Hoehn-Saric, 
Commissioners Feldman and Trumka issued respective statements with 
their votes which can be found here: Commissioners [verbar] CPSC.gov

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 July 27, 2022.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to Comment 22-C0002, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Bethesda, MD 20814; telephone: (240) 863-8938 (mobile), (301) 504-7479 
(office); email: [email protected].

FOR FURTHER INFORMATION CONTACT: Caitlin O'Donnell, Trial Attorney, 
Division of Enforcement and Litigation, Office of Compliance and Field 
Operations, Consumer Product Safety Commission, 4330 East West Highway, 
Bethesda, Maryland 20814-4408; [email protected].

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

    Dated: July 7, 2022.
Alberta E. Mills,
Secretary.

United States of America Consumer Product Safety Commission, CPSC 
Docket No. 22-C0002

In the Matter of: Vornado Air, LLC

Settlement Agreement

    1. In accordance with the Consumer Product Safety Act (``CPSA''), 
15 U.S.C. Sec. Sec.  2051-2089, and 16 C.F.R. Sec.  1118.20, Vornado 
Air, LLC (``Vornado'' or ``the Firm''), 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 C.F.R. Sec.  
1118.20(b). The Commission issues the Order under the provisions of the 
CPSA.
    3. Vornado is a privately held company, organized and existing 
under the laws of the state of Delaware, with its principal place of 
business in Andover, Kansas.

Staff Charges

    4. Between 2009 and 2015, Vornado manufactured, distributed, and 
offered for sale approximately 350,000 VH101 Personal Vortex Heaters 
(``Subject Products'').
    5. The Subject Products are ``consumer products'' that were 
``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. Sec.  2052(a)(5), (8). 
Vornado is a ``manufacturer'' and ``distributor'' of the Subject 
Products, as such terms are defined in sections 3(a)(7) and (11) of the 
CPSA, 15 U.S.C. Sec.  2052(a)(7), (11).

Violation of CPSA Section 19(a)(4)

    6. The Subject Products contain a defect which could create a 
substantial product hazard and create an unreasonable risk of serious 
injury or death because they can overheat when in use, posing fire and 
burn hazards.
    7. Vornado received and investigated multiple reports of 
overheating and fire involving the Subject Products. Despite possessing 
information that reasonably supported the conclusion that the Subject 
Products contained a defect that could create a substantial product 
hazard or created an unreasonable risk of serious injury or death, 
Vornado did not immediately report to the Commission.
    8. In December 2017, Vornado received notice of a potential claim 
alleging that an elderly man succumbed to injuries sustained in a fire 
involving a Vornado space heater that was suspected to be one of the 
Subject Products.
    9. In January 2018, Vornado filed an Initial Report with the 
Commission under 15 U.S.C. Sec.  2064(b). In that report, the Firm 
stated that it had not yet confirmed that the heater involved in the 
fatal fire was a unit of the Subject Products.

[[Page 41295]]

    10. In February 2018, Vornado filed a Full Report with the 
Commission under 15 U.S.C. Sec.  2064(b) concerning the Subject 
Products.
    11. Vornado and the Commission jointly announced a Fast Track 
recall of the Subject Products on April 4, 2018. The press release 
announcing the recall stated that the Subject Products can overheat 
while in use, posing fire and burn hazards, and that 15 fire incidents 
had been reported.
    12. On August 22, 2018, after the Firm confirmed that one of the 
Subject Products was, in fact, involved in the fatal fire, the recall 
was re-announced. The press release included a description of the 
December 2017 fatal fire incident as well as an updated total of 19 
fire incidents.

Failure to Timely Report

    13. Despite having information reasonably supporting the conclusion 
that the Subject Products contained a defect or created an unreasonable 
risk of serious injury or death, Vornado 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. Sec.  2064(b)(3), (4), in violation of 
section 19(a)(4) of the CPSA, 15 U.S.C. Sec.  2068(a)(4).
    14. Because the information in Vornado's possession about the 
Subject Products constituted actual and presumed knowledge, Vornado 
knowingly violated section 19(a)(4) of the CPSA, 15 U.S.C. Sec.  
2068(a)(4), as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. Sec.  2069(d).
    15. Pursuant to section 20 of the CPSA, 15 U.S.C. Sec.  2069, 
Vornado is subject to civil penalties for its knowing violation of 
section 19(a)(4) of the CPSA, 15 U.S.C. Sec.  2068(a)(4).

Response of Vornado

    16. Vornado's settlement of this matter does not constitute an 
admission of the staff's charges as set forth in paragraphs 4 through 
15 above, and Vornado denies staff's allegations that it failed to 
notify the Commission in a timely matter in accordance with section 
15(b) of the CPSA and that there was any ``knowing'' violation of the 
CPSA as that term is defined in 15 U.S.C. Sec.  2069(d).
    17. At all relevant times, Vornado had a product safety compliance 
program, which included pre-market third-party laboratory testing of 
the Subject Products to applicable safety standards and rigorous 
quality assurance measures. Vornado took reasonable measures to monitor 
field reports and evaluate returned units of the Subject Products.
    18. Vornado notified the Commission under section 15(b) and 
conducted a voluntary recall of the Subject Products under the Fast 
Track program prior to confirming product identification or causation 
of the reported fire that resulted in a fatality.
    19. Vornado enters into this Agreement to settle this matter 
without the delay and unnecessary expense of litigation. Vornado does 
not admit that it violated the CPSA or any other law, and Vornado's 
willingness to enter into this Agreement and Order does not constitute, 
nor is it evidence of, an admission by Vornado of liability or 
violation of any law.

Agreement of the Parties

    20. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Subject Products and over Vornado.
    21. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Vornado or a 
determination by the Commission that Vornado violated the CPSA's 
reporting requirements.
    22. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, Vornado shall pay a civil penalty in 
the amount of seven million five hundred thousand dollars ($7,500,000) 
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 Vornado under this Agreement. Failure to 
make such payment by the date specified in the Commission's final Order 
shall constitute Default.
    23. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Vornado to the 
United States, and interest shall accrue and be paid by Vornado at the 
federal legal rate of interest set forth at 28 U.S.C. Sec.  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''). Vornado 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 Vornado 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. Vornado shall pay the United 
States all reasonable costs of collection and enforcement under this 
paragraph, respectively, including reasonable attorney's fees and 
expenses.
    24. After staff receives this Agreement executed on behalf of 
Vornado, 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. Sec.  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. Sec.  1118.20(f).
    25. 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. Sec.  1118.20(h). Upon the later of: (i) 
the Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon Vornado, 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.
    26. Effective upon the later of: (1) the Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Vornado, and (2) the date of issuance of the final Order, for good and 
valuable consideration, Vornado 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 Vornado 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.

[[Page 41296]]

    27. Vornado shall maintain a compliance program and a system of 
internal controls and procedures designed to ensure compliance with the 
CPSA with respect to any consumer product imported, manufactured, 
distributed, or sold by Vornado, 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 is conveyed effectively to personnel responsible for CPSA 
compliance, whether or not an injury has been reported;
    (ii) procedures for reviewing claims and reports for safety 
concerns and for implementing corrective and preventive actions when 
compliance deficiencies or violations are identified;
    (iii) procedures requiring that information required to be 
disclosed by Vornado to the Commission is recorded, processed, and 
reported in accordance with applicable law;
    (iv) procedures requiring that all reporting made to the Commission 
is timely, truthful, complete, accurate, and in accordance with 
applicable law;
    (v) procedures requiring that prompt disclosure is made to 
Vornado's senior management of any significant deficiencies or material 
weaknesses in the design or operation of such compliance program or 
internal controls that affect adversely, in any material respect, 
Vornado's ability to record, process, and report to the Commission in 
accordance with applicable law;
    (vi) mechanisms to effectively communicate to all applicable 
Vornado employees, through training programs or other means, 
compliance-related company policies and procedures to prevent 
violations of the CPSA;
    (vii) 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;
    (viii) Vornado's senior management responsibility for CPSA 
compliance; and
    (ix) retention of all CPSA compliance-related records for at least 
five (5) years, and availability of such records to CPSC staff upon 
request.
    28. The Firm shall submit a report under CPSA section 16(b), sworn 
to under penalty of perjury:
    (i) describing in detail its compliance program and internal 
controls and the actions the Firm has taken to comply with each 
subparagraph of paragraph 27;
    (ii) affirming that during the reporting period the Firm has 
reviewed its compliance program and internal controls, including the 
actions referenced in subparagraph (a) of this paragraph, for 
effectiveness, and that it complies with each subparagraph of paragraph 
27, or describing in detail any non-compliance with any such 
subparagraph; and
    (iii) identifying any changes or modifications made during the 
reporting period to the Firm's compliance program or internal controls 
to ensure compliance with the terms of the CPSA and, in particular, the 
requirements of CPSA section 15 related to timely reporting.
    Such reports shall be submitted annually to the Director, Office of 
Compliance, Division of Enforcement and Litigation, for a period of 
three (3) years beginning 12 months after the Commission's Final Order 
of Acceptance of the Agreement. The first report shall be submitted 30 
days after the close of the first 12-month reporting period, and 
successive reports shall be due annually on the same date thereafter. 
Without limitation, the Firm acknowledges and agrees that failure to 
make such timely and accurate reports as required by this Agreement and 
Order may constitute a violation of section 19(a)(3) of the CPSA.
    29. Notwithstanding and in addition to the above, upon request of 
staff, Vornado shall promptly provide to CPSC written documentation 
identifying any material changes or improvements to the Firm's 
compliance program or internal controls and the effective date of those 
changes or improvements. Vornado shall cooperate fully and truthfully 
with staff and shall make available all non-privileged information and 
materials, and any personnel deemed necessary by staff, to evaluate 
Vornado's compliance with the terms of the Agreement.
    30. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    31. Vornado 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 Vornado, 
enforceable against Vornado in accordance with its terms. The 
individuals signing the Agreement on behalf of Vornado represent and 
warrant that they are duly authorized by Vornado to execute the 
Agreement.
    32. The signatories represent that they are authorized to execute 
this Agreement.
    33. The Agreement is governed by the laws of the United States.
    34. The Agreement and the Order shall apply to, and be binding 
upon, Vornado and each of its successors, transferees, and assigns; and 
a violation of the Agreement or Order may subject Vornado, and each of 
its successors, transferees, and assigns, to appropriate legal action.
    35. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    36. 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.
    37. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
CFR 1118.20(h). The Agreement may be executed in counterparts.
    38. 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 Vornado agree in writing that severing the provision materially 
affects the purpose of the Agreement and the Order.

Vornado Air, LLC

Dated: 5/24/2022.

By: /s/----------------------------------------------------------------

Randy Brillhart,

Vornado Air, LLC Chief Executive Officer.

Dated: 5/24/2022.

By: /s/----------------------------------------------------------------

Michelle Gillice,

Counsel to Vornado Air, LLC.

U.S. Consumer Product Safety Commission

Dated: 5/25/2022.

By: /s/----------------------------------------------------------------

Caitlin O'Donnell,

Trial Attorney, Office of Compliance and Field Operations.


[[Page 41297]]



United States of America Consumer Product Safety Commission, CPSC 
Docket No.: 22-C0002

In the Matter of: Vornado Air, LLC

Order

    Upon consideration of the Settlement Agreement entered into between 
Vornado Air, LLC (``Vornado''), and the U.S. Consumer Product Safety 
Commission (``Commission''), and the Commission having jurisdiction 
over the subject matter and over Vornado, 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 Vornado shall comply with all terms of the 
Settlement Agreement including payment of a civil penalty in the amount 
of seven million five hundred thousand dollars ($7,500,000), 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 Vornado to make the foregoing payment when due, 
interest on the unpaid amount shall accrue and be paid by Vornado at 
the federal legal rate of interest set forth at 28 U.S.C. Sec.  1961(a) 
and (b). If Vornado 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, and 
the Commission reserves the right to pursue additional enforcement 
actions against the Firm.

    Provisionally accepted and provisional Order issued on the --5th 
day of July, 2022.

By Order of the Commission:

/s/--------------------------------------------------------------------

Alberta Mills, Secretary U.S. Consumer Product Safety Commission.


[FR Doc. 2022-14822 Filed 7-11-22; 8:45 am]
BILLING CODE 6355-01-P