Kidz World, Inc., d/b/a High Energy USA, Provisional Acceptance of a Settlement Agreement and Order, 17640-17641 [E9-8688]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 74, Number 72 (Thursday, April 16, 2009)]
[Notices]
[Pages 17640-17641]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-8688]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0014]


Kidz World, Inc., d/b/a High Energy USA, 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 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Kidz World, Inc., d/b/a High Energy USA, containing a civil penalty of 
$25,000.00.

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 May 1, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0014, 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, 
Division of Compliance, Office of the General Counsel, 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: April 9, 2009.
Todd A. Stevenson,
Secretary.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Kidz World, Inc., d/b/a High 
Energy USA (``Kidz World'') 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 Staff's allegations 
set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established pursuant to, and responsible for the enforcement of the 
Consumer Product Safety Act, 15 U.S.C. 2051-2089 (``CPSA'').
    3. Kidz World is a corporation organized and existing under the 
laws of the State of New York, with its principal offices located in 
New York, NY. Kidz World is an importer of apparel.

Staff Allegations

    4. From September 2007 to October 2007, Kidz World imported and/or 
sold to U.S. retailers about 5,000 boy's hooded sweatshirts with 
drawstrings (``Drawstring Sweatshirts'').
    5. The Drawstring Sweatshirts are ``consumer product[s],'' and, at 
all times relevant hereto, Kidz World was a ``manufacturer'' of those 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined in CPSA sections 3(a), (5), (8), and (11), 15 U.S.C. 
2052(a), (5), (8), and (11).
    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 neck and waist 
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. 1274(c). The letter 
also notes the CPSA's section 15(b) reporting requirements.
    9. Kidz World reported to the Commission there had been no 
incidents or injuries involving Drawstring Sweatshirts.
    10. Kidz World's importation and distribution in commerce of the 
Drawstring Sweatshirts 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 March 28, 2008, the Commission and Kidz World announced a 
recall of the Drawstring Sweatshirts. The recall informed consumers 
that they should immediately remove the drawstrings to eliminate the 
hazard.
    12. Kidz World had presumed and actual knowledge that the 
Drawstring Sweatshirts distributed in commerce posed a strangulation 
hazard and presented a substantial risk of injury to children under 
FHSA section 15(c)(1), 15 U.S.C. 1274(c)(1). Kidz World had obtained 
information that reasonably supported the conclusion that the 
Drawstring Sweatshirts 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)(3) and (4), 15 U.S.C. 
2064(b)(3) and (4), required Kidz World to immediately inform the 
Commission of the defect and risk.
    13. Kidz World knowingly failed to immediately inform the 
Commission about the Drawstring Sweatshirts as required by CPSA 
sections 15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), and as the 
term ``knowingly'' is defined in CPSA section 20(d), 15 U.S.C. 2069(d).

[[Page 17641]]

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 
Kidz World to civil penalties.

Kidz World Response

    14. Kidz World denies the Staff's allegations that Kidz World 
violated the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Kidz World.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Kidz World, or 
a determination by the Commission, that Kidz World has knowingly 
violated the CPSA.
    17. In settlement of the Staff's allegations, Kidz World shall pay 
a civil penalty in the amount of twenty-five thousand dollars 
($25,000.00) in three (3) installments as follows: The first 
installment payment of $8,334.00 shall be paid within twenty (20) 
calendar days of service of the Commission's final Order accepting the 
Agreement; the second installment payment of $8,333.00 shall be paid 
within one (1) year of service of the Commission's final Order 
accepting the Agreement; and the third installment of $8,333.00 shall 
be paid within two (2) years of service of the Commission's final Order 
accepting the Agreement. Each installment 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, Kidz World 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 Kidz World 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, Kidz World 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 Kidz World 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 Kidz World agree that severing the provision materially affects the 
purpose of the Agreement and the Order.

Kidz World, Inc., d/b/a High Energy USA.

    Dated: December 29, 2008.
    By:

Victor Hara,
President, Kidz World, Inc., d/b/a High Energy USA, Empire State 
Building, 350 5th Avenue, Suite 5005, New York, NY 10118.

    Dated: January 7, 2009.
    By:

Dennis R. McCoy,
Esquire, Counsel for Respondent Kidz World, Inc., d/b/a High Energy 
USA, Hiscock & Barclay, 1100 M & T Center, 3 Fountain Plaza, 
Buffalo, NY 14203.

U.S. Consumer Product Safety Commission.

Cheryl A. Falvey,
General Counsel.

Ronald G. Yelenik,
Assistant General Counsel, Office of the General Counsel.

    Dated: January 7, 2009
    By:

Dennis C. Kacoyanis,
Trial Attorney, Division of Compliance, Office of the General 
Counsel.

Order

    Upon consideration of the Settlement Agreement entered into between 
Kidz World, Inc., d/b/a High Energy USA (``Kidz World'') and the U.S. 
Consumer Product Safety Commission (``Commission'') staff, and the 
Commission having jurisdiction over the subject matter and over Kidz 
World, 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, Kidz World shall pay a civil penalty in the amount 
of twenty-five thousand dollars ($25,000.00) in three (3) installments 
as follows: The first installment payment of $8,334.00 shall be paid 
within twenty (20) calendar days of service of the Commission's final 
Order accepting the Agreement; the second installment payment of 
$8,333.00 shall be paid within one (1) year of service of the 
Commission's final Order accepting the Agreement; and the third 
installment of $8,333.00 shall be paid within two (2) years of service 
of the Commission's final Order accepting the Agreement. Each 
installment payment shall be by check payable to the order of the 
United States Treasury.
    Upon the failure of Kidz World to make the foregoing payment when 
due, interest on the unpaid amount shall accrue and be paid by Kidz 
World at the federal legal rate of interest set forth at 28 U.S.C. 
1961(a) and (b).

    Provisionally accepted and provisional Order issued on the 8th 
April, 2009.

    By Order of the Commission.

Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. E9-8688 Filed 4-15-09; 8:45 am]
BILLING CODE 6355-01-P