Coolibar, Inc., Provisional Acceptance of a Settlement Agreement and Order, 17641-17643 [E9-8689]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 74, Number 72 (Thursday, April 16, 2009)]
[Notices]
[Pages 17641-17643]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-8689]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0013]


Coolibar, Inc., 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 
Coolibar, Inc., containing a civil penalty of $25,000.00.

[[Page 17642]]


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-C0013, 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, Coolibar, Inc. (``Coolibar'') 
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. Coolibar is a corporation organized and existing under the laws 
of the State of Minnesota, with its principal offices located in St. 
Louis Park, MN. Coolibar is an importer, and retailer of sun protection 
apparel and other sun protection products.

Staff Allegations

    4. From March 2005 to April 2008, Coolibar imported about 6,100 
children's sun block jackets and hoodies with drawstrings (``Drawstring 
Jackets'') for sale to consumers through its Web site and catalog.
    5. The Drawstring Jackets are ``consumer product[s],'' and, at all 
times relevant hereto, Coolibar was a ``manufacturer'' and ``retailer'' 
of those consumer products, which were ``distributed in commerce,'' as 
those terms are defined in CPSA sections 3(a)(5), (8), (11) and (13), 
15 U.S.C. 2052(a), (5) (8), (11), and (13).
    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. Coolibar reported to the Commission there had been no incidents 
or injuries involving Drawstring Jackets.
    10. Coolibar's distribution in commerce of the Drawstring Jackets 
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 June 26, 2008, the Commission and Coolibar announced a 
recall of the Drawstring Jackets. The recall informed consumers that 
they should immediately remove the drawstrings to eliminate the hazard.
    12. Coolibar had presumed and actual knowledge that the Drawstring 
Jackets 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. 274(c)(1). Coolibar had obtained information that 
reasonably supported the conclusion that the Drawstring Jackets 
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 
Coolibar to immediately inform the Commission of the defect and risk.
    13. Coolibar knowingly failed to immediately inform the Commission 
about the Drawstring Jackets 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). 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 Coolibar to civil penalties.

Coolibar Response

    14. Coolibar denies the Staff's allegations that Coolibar violated 
the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Coolibar.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Coolibar, or a 
determination by the Commission, that Coolibar has knowingly violated 
the CPSA.
    17. In settlement of the Staff's allegations, Coolibar 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

[[Page 17643]]

issuance of the final Order, Coolibar 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 Coolibar 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, Coolibar 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 those referenced in 
paragraph 21 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 Coolibar agree that severing the provision materially affects the 
purpose of the Agreement and the Order.

COOLIBAR, INC.,

    Dated: January 19, 2009.
    By:

John Barrow,
President, Coolibar, Inc., 2401 Edgewood Avenue S., St. Louis Park, 
MN 55426.

    Dated: January 21, 2009.
    By:

Mark R. Kaster, Esquire,
Counsel for Respondent Coolibar, Inc., Dorsey & Whitney, LLP, 50 
South Sixth Street, Suite 1500, Minneapolis, MN 20814.

U.S. CONSUMER PRODUCT SAFETY COMMISSION.

Cheryl A. Falvey,
General Counsel.

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

    Dated: January 27, 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 
Coolibar, Inc., d/b/a High Energy USA (``Coolibar'') and the U.S. 
Consumer Product Safety Commission (``Commission'') staff, and the 
Commission having jurisdiction over the subject matter and over 
Coolibar, 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, Coolibar 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 Coolibar to make any of the 
foregoing payments when due, the entire amount of the civil penalty 
shall become due and payable and interest on the unpaid amount shall 
accrue and be paid by Coolibar 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 
day of April, 2009.

    BY ORDER OF THE COMMISSION.

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

[FR Doc. E9-8689 Filed 04-15-09; 8:45 am]
BILLING CODE 6355-01-P