Seventy Two, Inc., Provisional Acceptance of a Settlement Agreement and Order, 17643-17645 [E9-8705]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 74, Number 72 (Thursday, April 16, 2009)]
[Notices]
[Pages 17643-17645]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-8705]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0011]


Seventy Two, 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 
Seventy Two, Inc., 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-C0011, 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, Seventy Two, Inc. (``Seventy 
Two'') 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'').

[[Page 17644]]

    3. Seventy Two is a corporation organized and existing under the 
laws of the State of California, with its principal offices located in 
La Puente, CA. Seventy Two is an importer of apparel.

Staff Allegations

    4. From November 2007 to December 2007, Seventy Two imported and 
distributed about 1,734 hooded sweaters with drawstrings (``Drawstring 
Sweaters'') to a nationwide retailer for sale to consumers.
    5. The Drawstring Sweaters are ``consumer product[s],'' and, at all 
times relevant hereto, Seventy Two 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 website 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. Seventy Two reported to the Commission there had been no 
incidents or injuries involving Drawstring Sweaters.
    10. Seventy Two's importation and 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 February 6, 2008, the Commission and Seventy Two announced a 
recall of the Drawstring Sweaters. The recall informed consumers that 
they should immediately remove the drawstrings to eliminate the hazard.
    12. Seventy Two 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)(1), 15 U.S.C. 1274(c)(1). Seventy Two 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)(3) and (4), 15 U.S.C. 2064(b)(3) 
and (4), required Seventy Two to immediately inform the Commission of 
the defect and risk.
    13. Seventy Two knowingly failed to immediately inform the 
Commission about the Drawstring Sweaters 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 Seventy Two 
to civil penalties.

Seventy Two's Responsive Allegations

    14. Seventy Two denies the Staff's allegations that it violated the 
CPSA.

Agreement of the Parties

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

[[Page 17645]]

unless the Commission and Seventy Two agree that severing the provision 
materially affects the purpose of the Agreement and the Order.

SEVENTY TWO, INC.

    Dated: March 3, 2009
    By:

Chiu Fai Yeung,
Chief Executive Officer Seventy Two, Inc. 227 S. Sixth Avenue La 
Puente, CA 91746.

U.S. CONSUMER PRODUCT SAFETY COMMISSION.

Cheryl A. Falvey,
General Counsel.

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

    Dated: March 3, 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 
Seventy Two, Inc., and the U.S. Consumer Product Safety Commission 
(``Commission'') staff, and the Commission having jurisdiction over the 
subject matter and over Seventy Two, 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, Seventy Two 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 made by check payable to the order of 
the United States Treasury. Upon the failure of Seventy Two to make any 
of the foregoing payments when due, the total amount of the civil 
penalty shall become immediately due and payable and interest on the 
unpaid amount shall accrue and be paid by Seventy Two 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. E9-8705 Filed 4-15-09; 8:45 am]
BILLING CODE 6355-01-M