Sears Holdings Management Corporation, Provisional Acceptance of a Settlement Agreement and Order, 46883-46885 [E8-18401]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 73, Number 156 (Tuesday, August 12, 2008)]
[Notices]
[Pages 46883-46885]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18401]


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CONSUMER PRODUCT SAFETY COMMISSION

(CPSC Docket No. 08-C0021)


Sears Holdings Management Corporation, 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 Sec.  
1118.20(e). Published below is a provisionally-accepted Settlement 
Agreement with Sears Holdings Management Corporation, containing a 
civil penalty of $50,000.00.

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 August 27, 2008.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 08-C0021, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Legal Division, Office of Compliance and Field Operations, Consumer 
Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 
20814-4408; telephone (301) 504-7587.

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

    Dated: August 5, 2008.
Todd A. Stevenson,
Secretary.

United States of America

Consumer Product Safety Commission

In the Matter of Sears Holdings Management Corporation.
CPSC Docket No. 08-C0021

 Settlement Agreement

    1. In accordance with 16 CFR Sec.  1118.20, Sears Holdings 
Management Corporation (``Sears'') and the staff (``Staff'') of the 
United States Consumer Product Safety Commission (``Commission'') 
enter into this Settlement Agreement (``Agreement''). The Agreement 
and the incorporated attached Order (``Order'') settle the Staffs 
allegations set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established

[[Page 46884]]

pursuant to, and responsible for the enforcement of, the Consumer 
Product Safety Act, 15 U.S.C. Sec.  Sec.  2051-2084 (``CPSA'').
    3. Sears is a corporation organized and existing under the laws 
of Delaware, with its principal offices located in Hoffman Estates, 
IL. At all times relevant hereto, Sears sold apparel.

Staff Allegations

    4. From September 13, 2007, to September 18, 2007, Sears held 
for sale and/or sold to consumers at least 5,214 Personal Identity 
v-neck sweaters with hood and neck drawstrings (``Drawstring 
Sweaters'').
    5. The Drawstring Sweaters are ``consumer product[s],'' and, at 
all times relevant hereto, Sears was a ``retailer'' of those 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined in CPSA sections 3(a)(1), (6), (11), and (12), 15 
U.S.C. 2052(a)(l), (6), (11), and (12).
    6. In February 1996, the Staff issued the Guidelines for 
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help 
prevent children from strangling or entangling on drawstrings. The 
Guidelines state that drawstrings can cause, and have caused, 
injuries and deaths when they catch on items such as playground 
equipment, bus doors, or cribs. In the Guidelines, the Staff 
recommends that there be no hood and neck drawstrings in children's 
upper outerwear sized 2T to 12.
    7. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-
97, that incorporated the Guidelines. The Guidelines state that 
firms should be aware of the hazards and should be sure garments 
they sell conform to the voluntary standard.
    8. On May 19, 2006, the Commission posted on its Web site a 
letter from the Commission's Director of the Office of Compliance to 
manufacturers, importers, and retailers of children's upper 
outerwear. The letter urges them to make certain that all children's 
upper outerwear sold in the United States complies with ASTM F1816-
97. The letter states that the Staff considers children's upper 
outerwear with drawstrings at the hood or neck area to be defective 
and to present a substantial risk of injury to young children under 
Federal Hazardous Substances Act (``FHSA'') section 15(c), 15 U.S.C. 
Sec.  1274(c). The letter also notes the CPSA's section 15(b) 
reporting requirements.
    9. Sears informed the Commission that there had been no 
incidents or injuries from the Drawstring Sweaters.
    10. Sears's distribution in commerce of the Drawstring Sweaters 
did not meet the Guidelines or ASTM F1816-97, failed to comport with 
the Staff's May 2006 defect notice, and posed a strangulation hazard 
to children.
    11. On December 6, 2007, the Commission and Sears announced a 
recall of the Drawstring Sweaters, informing consumers that they 
should immediately remove the drawstrings to eliminate the hazard.
    12. Sears had presumed and actual knowledge that the Drawstring 
Sweaters distributed in commerce posed a strangulation hazard and 
presented a substantial risk of injury to children under FHSA 
section 15(c)(l), 15 U.S.C. Sec.  1274(c)(1). Sears had obtained 
information that reasonably supported the conclusion that the 
Drawstring Sweaters contained a defect that could create a 
substantial product hazard or that they created an unreasonable risk 
of serious injury or death. CPSA sections 15(b)(2) and (3), 15 
U.S.C. 2064(b)(2) and (3), required Sears to immediately inform the 
Commission of the defect and risk.
    13. Sears knowingly failed to immediately inform the Commission 
about the Drawstring Sweaters as required by CPSA sections 15(b)(2) 
and (3), 15 U.S.C. 2064(b)(2) and (3), and as the term ``knowingly'' 
is defined in CPSA section 20(d), 15 U.S.C. 2069(d). This failure 
violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant to 
CPSA section 20, 15 U.S.C. 2069, this failure subjected Sears to 
civil penalties.

Sears Response

    14. Sears denies the Staff's allegations above that Sears 
knowingly violated the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Sears.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Sears, or a 
determination by the Commission, that Sears has knowingly violated 
the CPSA.
    17. In settlement of the Staff's allegations, Sears shall pay a 
civil penalty in the amount of fifty thousand dollars ($50,000.00) 
within twenty (20) calendar days of service of the Commission's 
final Order accepting the Agreement. The payment shall be by check 
payable to the order of the United States Treasury.
    18. Upon provisional acceptance of the Agreement, 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). In accordance with 16 CFR 1118.20(f), 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 sixteenth (16th) calendar day after the date 
it is published in the Federal Register.
    19. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Sears knowingly, voluntarily, and 
completely waives any rights it may have regarding the Staff's 
allegations to the following: (1) An administrative or judicial 
hearing; (2) judicial review or other challenge or contest of the 
validity of the Order or of the Commission's actions; (3) a 
determination by the Commission of whether Sears failed to comply 
with the CPSA and its underlying regulations; (4) a statement of 
findings of fact and conclusions of law; and (5) any claims under 
the Equal Access to Justice Act.
    20. The Commission may publicize the terms of the Agreement and 
the Order.
    21. The Agreement and the Order shall apply to, and be binding 
upon, Sears and each of its successors and assigns.
    22. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Sears to appropriate 
legal action.
    23. 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.
    24. 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 and Sears agree that severing the provision materially 
affects the purpose of the Agreement and the Order.
    25. Pursuant to section 6(d) of the Interim Delegation of 
Authority ordered by the Commission on February 1, 2008, the 
Commission delegated to the Assistant Executive Director for 
Compliance and Field Operations the authority to act, with the 
concurrence of the General Counsel, for the Commission under 16 
C.F.R. Sec.  1118.20 with respect to Staff allegations that any 
person or firm violated 15 U.S.C. Sec.  2068, where the total amount 
of the settlement involves no more than $100,000.
SEARS HOLDINGS MANAGEMENT CORPORATION
Dated: 7-22-08 By:

Mary Tortorice
Vice President and Deputy General Counsel
Sears Holdings Management Corporation
3333 Beverly Road
Hoffman Estates, IL 60179
U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF
J. Gibson Mullan
Assistant Executive Director
Office of Compliance and Field Operations
Ronald G. Yelenik
Acting Director Legal Division
Office of Compliance and Field Operations

Dated: 8-1-08 By:
Dennis C. Kacoyanis
Trial Attorney
Legal Division
Office of Compliance and Field Operations

United States of America

Consumer Product Safety Commission

In the Matter of Sears Holdings Management Corporation )
CPSC Docket No. 08-C0021

Order

    Upon consideration of the Settlement Agreement entered into 
between Sears Holdings Management Corporation (``Sears'') and the 
U.S. Consumer Product Safety Commission (``Commission'') staff, and 
the Commission having jurisdiction over the subject matter and over 
Sears, and pursuant to the authority delegated in

[[Page 46885]]

section 6(d) of the Interim Delegation of Authority ordered by the 
Commission on February 1, 2008, 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 Sears shall pay a civil 
penalty in the amount of fifty thousand dollars ($50,000.00) within 
twenty (20) calendar days of service of the Commission's final Order 
accepting the Agreement. The payment shall be made by check payable 
to the order of the United States Treasury. Upon the failure of 
Sears to make the foregoing payment when due, interest on the unpaid 
amount shall accrue and be paid by Sears at the federal legal rate 
of interest set forth at 28 U.S.C. Sec.  1961(a) and (b).
    Provisionally accepted and provisional Order issued on the 4th 
day of August, 2008.

By Order of the Commission.
Todd A. Stevenson
Secretary
U.S. Consumer Product Safety Commission
[FR Doc. E8-18401 Filed 8-11-08; 8:45 am]
BILLING CODE 6355-01-M