[Federal Register Volume 87, Number 181 (Tuesday, September 20, 2022)]
[Notices]
[Pages 57486-57489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-20292]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 22-C0005]


Clawfoot Supply, LLC

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: 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 Clawfoot Supply, LLC containing a civil penalty in the 
amount of six million ($6,000,000), subject to the terms and conditions 
of the Settlement Agreement. The Commission voted unanimously (5-0) to 
provisionally accept the proposed Settlement Agreement and Order 
pertaining to Clawfoot Supply, LLC. Commissioner Feldman issued a 
statement with his vote which can be found here: https://www.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 
request with the Office of the Secretary by October 5, 2022.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to Comment 22-C0005, 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: Madeleine Mietus, 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: September 15, 2022.
Alberta E. Mills,
Secretary.

United States of America

Consumer Product Safety Commission

    In the Matter of: CLAWFOOT SUPPLY, LLC

CPSC Docket No.: 22-C0005

Settlement Agreement

    1. In accordance with the Consumer Product Safety Act (``CPSA''), 
15 U.S.C. 2051-2089, and 16 CFR 1118.20, Clawfoot Supply, LLC 
(``Clawfoot Supply'') 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. Clawfoot Supply is a wholly owned subsidiary of Ferguson 
Enterprises, LLC (``Ferguson Enterprises'') and is organized and 
existing under the laws of the state of Kentucky, with its principal 
place of business in Erlanger, Kentucky.

Staff Charges

    4. Between 2011 and 2018, Clawfoot Supply imported, distributed, 
and offered for sale approximately 7,200 Wall-Mounted Teak Folding 
Shower Seats (``Shower Seats'' or ``Subject Products'').
    5. The Shower Seats 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. 2052(a)(5), (8). 
Clawfoot Supply is a ``manufacturer''

[[Page 57487]]

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. 2052(a)(7), (11).
Violation of CPSA Section 19(a)(4)
    6. The Shower Seats contain a defect which could create a 
substantial product hazard and create an unreasonable risk of serious 
injury or death because the aluminum hardware supporting the Shower 
Seat can corrode and break, posing fall and laceration hazards.
    7. Between 2011 and 2018, Clawfoot Supply received multiple reports 
of corrosion and breakage with the Shower Seats, including reports of 
consumers who were injured when they were sitting on the Shower Seat 
when it failed.
    8. During 2015, Clawfoot Supply initiated a design change to 
strengthen the support rods of the Shower Seats. In late 2015 through 
early 2016, Clawfoot Supply contacted consumers to advise them of the 
potential defect and corrosion problem occurring with the Shower Seats.
    9. 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, Clawfoot Supply did not immediately report to 
the Commission.
    10. After the acquisition of Clawfoot Supply by Ferguson 
Enterprises, Clawfoot Supply's compliance program was enhanced in 
Spring 2018. It was at this time that Ferguson Enterprises learned of 
the corrosion issue.
    11. In July 2018, Clawfoot Supply filed an Initial Report with the 
Commission and filed a Full Report in August 2018 under 15 U.S.C. 
2064(b) concerning the Shower Seats.
    12. Clawfoot Supply and the Commission jointly announced a recall 
of the Shower Seats on December 4, 2018. The press release announcing 
the recall stated that the aluminum hardware supporting the Shower 
Seats can corrode, posing fall and laceration hazards. The release 
noted that 194 incidents of the seat breaking, including 37 incidents 
of falls without injury and 23 injuries had been reported.
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, Clawfoot Supply 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), (4), in violation 
of section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    14. Because the information in Clawfoot Supply's possession about 
the Subject Products constituted actual and presumed knowledge, 
Clawfoot Supply 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).
    15. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Clawfoot 
Supply is subject to civil penalties for its knowing violation of 
section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
Compliance Program and Internal Controls Reports
    16. Failure to make timely and accurate reports pursuant to CPSA 
section 16(b), as required by paragraph 27 of this Agreement and Order 
may constitute a violation of Section 19(a)(3) of the CPSA.

Response of Clawfoot Supply

    17. This Agreement does not constitute an admission by Clawfoot 
Supply of the staff's charges set forth in paragraphs 4 through 16 
above, including without limitation that the Subject Products contained 
a defect that could create a substantial product hazard or created an 
unreasonable risk of serious injury or death, that Clawfoot Supply 
failed to notify the Commission in a timely matter in accordance with 
section 15(b) of the CPSA, 15 U.S.C. 2064(b), and that Clawfoot Supply 
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).
    18. Clawfoot Supply enters into this Agreement to settle this 
matter without the delay and unnecessary expense of litigation. 
Clawfoot Supply does not admit that it violated the CPSA or any other 
law, and Clawfoot Supply's willingness to enter into this Agreement and 
Order does not constitute, nor is it evidence of, an admission by 
Clawfoot Supply of liability or violation of any law.

Agreement of the Parties

    19. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Subject Products and over Clawfoot Supply.
    20. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Clawfoot Supply 
or a determination by the Commission that Clawfoot Supply violated the 
CPSA's reporting requirements.
    21. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, Clawfoot Supply shall pay a civil 
penalty in the amount of six million dollars ($6,000,000) 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 Clawfoot Supply under this Agreement. Failure to make 
such payment by the date specified in the Commission's final Order 
shall constitute Default.
    22. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Clawfoot Supply to 
the United States, and interest shall accrue and be paid by Clawfoot 
Supply 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''). Clawfoot Supply 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 
Clawfoot Supply 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. Clawfoot 
Supply shall pay the United States all reasonable costs of collection 
and enforcement under this paragraph, respectively, including 
reasonable attorney's fees and expenses.
    23. After staff receives this Agreement executed on behalf of 
Clawfoot Supply, 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

[[Page 57488]]

calendar day after the date the Agreement is published in the Federal 
Register, in accordance with 16 CFR 1118.20(f).
    24. 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) the 
Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon Clawfoot Supply, 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.
    25. Effective upon the later of: (i) the Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Clawfoot Supply and (ii) the date of issuance of the final Order, for 
good and valuable consideration, Clawfoot Supply 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 Clawfoot Supply 
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.
    26. Clawfoot Supply 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 Clawfoot Supply, 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 Clawfoot Supply 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 immediate disclosure is made to 
Clawfoot Supply'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, Clawfoot Supply's ability to record, process and report to the 
Commission in accordance with applicable law;
    (vi) mechanisms to effectively communicate to all applicable 
Clawfoot Supply's 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) Clawfoot Supply'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.
    27. The Firm shall submit a report 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 26,
    (ii) affirming that during the reporting period the Firm has 
reviewed its compliance program and internal controls including the 
actions referenced in subparagraph (i) of this paragraph for 
effectiveness, and that it complies with each subparagraph of paragraph 
26 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 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.
    28. Notwithstanding and in addition to the above, upon request of 
staff, Clawfoot Supply 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. Clawfoot Supply 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 Clawfoot Supply's compliance with the terms of the 
Agreement.
    29. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    30. Clawfoot Supply 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 Clawfoot 
Supply, enforceable against Clawfoot Supply in accordance with its 
terms. The individuals signing the Agreement on behalf of Clawfoot 
Supply represent and warrant that they are duly authorized by Clawfoot 
Supply to execute the Agreement.
    31. The signatories represent that they are authorized to execute 
this Agreement.
    32. The Agreement is governed by the laws of the United States.
    33. The Agreement and the Order shall apply to, and be binding 
upon, Clawfoot Supply and each of its successors, transferees, and 
assigns; and a violation of the Agreement or Order may subject Clawfoot 
Supply, and each of its successors, transferees, and assigns, to 
appropriate legal action.
    34. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    35. 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.
    36. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in

[[Page 57489]]

accordance with the provisions of 16 CFR 1118.20(h). The Agreement may 
be executed in counterparts.
    37. 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 Clawfoot Supply agree in writing that severing the provision 
materially affects the purpose of the Agreement and the Order.

Clawfoot Supply, LLC

Dated: 8/16/2022

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

Keith Hammond,

Clawfoot Supply, LLC, President.

Dated: 8/15/2022

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

Jennifer Karmonick,

Counsel to Clawfoot Supply, LLC.

U.S. Consumer Product Safety Commission

Dated: 8/16/2022
By: /s/----------------------------------------------------------------

Madeleine Mietus,

Trial Attorney, Office of Compliance and Field Operations.

United States of America

Consumer Product Safety Commission

    In the Matter of: CLAWFOOT SUPPLY, LLC

CPSC Docket No.: 22-C0005

Order

    Upon consideration of the Settlement Agreement entered into between 
Clawfoot Supply, LLC (``Clawfoot Supply'') and the U.S. Consumer 
Product Safety Commission (``Commission''), and the Commission having 
jurisdiction over the subject matter and over Clawfoot Supply, and it 
appearing that the Settlement Agreement is in the public interest, the 
Settlement Agreement is incorporated by reference and it is:

    Provisionally accepted and provisional Order issued on the 13th 
day of September, 2022.

By Order of the Commission:

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

    Finally accepted and final Order issued on the __ day of ____, 
2022.

By Order of the Commission:

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

[FR Doc. 2022-20292 Filed 9-19-22; 8:45 am]
BILLING CODE 6355-01-P