Dollar General Corporation, Provisional Acceptance of a Settlement Agreement and Order, 38415-38417 [E9-18508]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 74, Number 147 (Monday, August 3, 2009)]
[Notices]
[Pages 38415-38417]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18508]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0029]


Dollar General 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 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Dollar General Corporation, containing a civil penalty of $100,000.00.

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 18, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0029, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Neal S. Cohen, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7504 or M. Reza Malihi, Trial Attorney, (same 
address); telephone (301) 504-7733.

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

    Dated: July 28, 2009.
Todd A. Stevenson,
Secretary.

In the Matter of Dollar General Corporation; Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Dollar General Corporation 
(``DGC''), for itself and on behalf of its wholly owned subsidiaries 
referenced in paragraph three (collectively referred to as ``Dollar 
General''), and the staff (``Staff'') of the United States Consumer 
Product Safety Commission (``CPSC'' or the ``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

[[Page 38416]]

pursuant to, and responsible for the enforcement of, the Consumer 
Product Safety Act, 15 U.S.C. 2051-2089 (``CPSA'').
    3. DGC is a corporation organized and existing under the laws of 
Tennessee, with its principal offices located in Goodlettsville, 
Tennessee. At all times relevant hereto, the following wholly owned 
subsidiaries of DGC had principal offices located in Goodlettsville, 
Tennessee. Dollar General Merchandising, Inc. (``DGMI''), a 
corporation, and DG Retail, LLC, a limited liability company, were 
entities organized and existing under the laws of Tennessee. 
Dolgencorp, Inc. (``Dolgencorp,'') Dolgencorp of Texas, Inc., and 
Dolgencorp of New York, Inc. were corporations, and Dollar General 
Partners was a partnership, organized and existing under the laws of 
Kentucky. (DG Retail LLC, Dolgencorp, Dolgencorp of Texas, Inc., 
Dolgencorp of New York, Inc., and Dollar General Partners, are 
collectively referred to as the ``Retail Subsidiaries.'') At all 
times relevant hereto, Dollar General imported and/or sold toys and 
other children's products, among other general merchandise.

Staff Allegations

    4. During September 2007, DGMI imported into the United States 
about 63,000 units of green, plastic Frankenstein head-shaped 
Tumblers (``Tumbler(s)''). The Tumblers were, in turn, offered for 
sale or sold to consumers at retail stores nationwide owned or 
operated by DGC or one of its Retail Subsidiaries in September 2007 
for about $1 per unit.
    5. Between April 2007 and July 2007, DGMI imported about 380,000 
Pull-Back Action Toy Cars, comprising two styles that included a 
four pack of ``Super Wheels'' (UPC 400016576344) and a two 
pack of ``Super Racer'' cars (UPC 883788965002) (``Toy 
Car(s)''). The Toy Cars were, in turn, offered for sale or sold to 
consumers at retail stores nationwide owned or operated by DGC or 
one of its Retail Subsidiaries from April 2007 through October 2007 
for about $1 per pack.
    6. Between March 2005 and October 2007, Dolgencorp imported 
about 51,000 Children's Sunglasses, yellow in color, with the word 
``CHINA'' printed on the left side of the frame, and the UPC 
400007860896 and words ``Fashion Sunglasses'' and ``Time to 
Play Every Day'' printed on the product's red hangtag 
(``Sunglasses''). The Sunglasses were, in turn, offered for sale or 
sold to consumers at retail stores nationwide owned or operated by 
DGC or one of its Retail Subsidiaries from March 2005 through 
October 2007 for about $1 per unit.
    7. The Tumblers, Toy Cars and Sunglasses are ``consumer 
product(s),'' and, at all times relevant hereto, Dollar General was 
a ``manufacturer'' and/or a ``retailer'' of those consumer 
product(s), which were ``distributed in commerce,'' as those terms 
are defined in CPSA sections 3(a)(3), (5), (8), (11), and (13), 15 
U.S.C. 2052(a)(3), (5), (8), (11), and (13).
    8. The Tumblers, Toy Cars and Sunglasses are articles intended 
to be entrusted to or for use by children, and, therefore, are 
subject to the requirements of the Commission's Ban of Lead-
Containing Paint and Certain Consumer Products Bearing Lead-
Containing Paint, 16 CFR Part 1303 (the ``Ban''). Under the Ban, 
toys and other children's articles must not bear ``lead-containing 
paint,'' defined as paint or other surface coating materials whose 
lead content is more than 0.06 percent of the weight of the total 
nonvolatile content of the paint or the weight of the dried paint 
film. 16 CFR 1303.2(b)(1)
    9. On September 28, 2007, the Staff obtained from the University 
of Ashland's Department of Chemistry laboratory results relating to, 
in pertinent part, testing for the presence of lead in surface 
paints on samples of the Tumblers collected from a DGC retail store 
in Ashland, Ohio. The University's test results demonstrated that 
paint from the center of the eye on certain Tumbler samples 
contained a total lead content in excess of the permissible 0.06 
percent limit set forth in the Ban.
    10. On October 12, 2007, Dollar General reported to CPSC that it 
had commissioned an independent laboratory to conduct validation 
testing for the presence of lead in surface coatings on a sample of 
the Sunglasses. As expressed in a test report of the same date, the 
test results demonstrated that the yellow surface coating and gold 
surface coating (printing on sample) contained a total lead content 
in excess of the permissible 0.06 percent limit set forth in the 
Ban.
    11. On November 6, 2007, Dollar General reported to CPSC that it 
had commissioned an independent laboratory to conduct testing for 
the presence of lead in surface coatings on multiple samples of the 
Toy Cars. As expressed in two test reports dated November 5, 2007, 
the test results demonstrated that samples of the ``4-pack'' and 
``2-pack'' Toy Cars contained a total lead content in excess of the 
permissible 0.06 percent limit set forth in the Ban.
    12. On October 4, 2007, the Commission and DGMI announced a 
consumer-level recall of about 63,000 units of the Tumblers because 
``Surface paint on the center of the eyes of some of the cups can 
contain high levels of lead, violating the federal lead paint 
standard.'' On November 7, 2007, the Commission and DGMI announced a 
recall of about 380,000 units of the Toy Cars because ``Surface 
paint on the cars contains excessive levels of lead, violating the 
federal lead paint standard.'' On the next day, November 8, 2007, 
the Commission and Dolgencorp likewise announced a recall of about 
51,000 units of the Sunglasses because ``The yellow surface paint on 
the sunglasses may contain excessive levels of lead, violating the 
federal lead paint standard.''
    13. Although Dollar General reported no incidents or injuries 
associated with the Tumblers, Sunglasses and Toy Cars, it failed to 
take adequate action to ensure that none would bear or contain lead-
containing paint, thereby creating a risk of lead poisoning and 
adverse health effects to children.
    14. The Tumblers, Sunglasses and Toy Cars constitute ``banned 
hazardous products'' under CPSA section 8 and the Ban, 15 U.S.C. 
2057 and 16 CFR 1303.1(a)(1), 1303.4(b), in that they bear or 
contain paint or other surface coating materials whose lead content 
exceeds the permissible limit of 0.06 percent of the weight of the 
total nonvolatile content of the paint or the weight of the dried 
paint film.
    15. Between March 2005 and October 2007, Dollar General sold, 
manufactured for sale, offered for sale, distributed in commerce, or 
imported into the United States, or caused one or more of such acts, 
with respect to the aforesaid banned hazardous Tumblers, Sunglasses 
and Toy Cars, in violation of section 19(a)(1) of the CPSA, 15 
U.S.C. 2068(a)(1). Dollar General committed these prohibited acts 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 
15 U.S.C. 2069(d).
    16. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Dollar 
General is subject to civil penalties for the aforementioned 
violations.

Dollar General's Responsive Allegations

    17. Dollar General denies that it knowingly violated the CPSA.
    18. Dollar General states that the vendors of the Tumblers, 
Sunglasses and Toy Cars each represented and warranted to Dollar 
General that the products furnished by the applicable vendor 
complied with all applicable laws, regulations and standards. 
Additionally, prior to importing the Tumblers, Sunglasses and Toy 
Cars, Dollar General had the products tested by a qualified 
independent third party laboratory for all applicable safety 
standards, including, without limitation, lead paint standards. The 
tests indicated that the products were fully compliant.
    19. Thus, Dollar General neither knew, nor should have known, of 
any potential problems with these products. However, as a result of 
industry changes and in an abundance of caution, Dollar General 
voluntarily commenced validation re-testing of toys to confirm 
initial test results. Dollar General tested hundreds of samples and, 
of those, discovered that two, the Sunglasses and Toy Cars, did not 
meet applicable standards. Dollar General notified the CPSC of the 
results and promptly initiated a voluntary recall of the items.

Agreement of the Parties

    20. Under the CPSA, the Commission has jurisdiction over this 
matter and over Dollar General.
    21. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Dollar 
General, or a determination by the Commission, that Dollar General 
has knowingly violated the CPSA.
    22. In settlement of the Staff's allegations, DGC shall pay, on 
behalf of Dollar General, a civil penalty in the amount of one 
hundred thousand dollars ($100,000.00) within twenty (20) calendar 
days of service of the Commission's final Order accepting the 
Agreement. This payment shall be made by check payable to the order 
of the United States Treasury.
    23. Upon the Commission's 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

[[Page 38417]]

CFR 1118.20(f), if the Commission does not receive any written 
request not to accept the Agreement within fifteen (15) days, the 
Agreement shall be deemed finally accepted on the sixteenth (16th) 
day after the date it is published in the Federal Register.
    24. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Dollar General knowingly, voluntarily, 
and completely waives any rights it may have in this matter to the 
following: (1) An administrative or judicial hearing; (2) judicial 
review or other challenge or contest of the validity of the 
Commission's Order or actions; (3) a determination by the Commission 
of whether Dollar General 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.
    25. The Commission may publicize the terms of the Agreement and 
Order.
    26. The Agreement and Order shall apply to, and be binding upon, 
Dollar General and each of its successors and assigns.
    27. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject those referenced in 
paragraph 26 above to appropriate legal action.
    28. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and Order may not be 
used to vary or contradict its 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.
    29. If any provision of the Agreement and Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and Order, such 
provision shall be fully severable. The balance of the Agreement and 
Order shall remain in full force and effect, unless the Commission 
and Dollar General agree that severing the provision materially 
affects the purpose of the Agreement and Order.

DOLLAR GENERAL CORPORATION

    Dated: June 24, 2009.

By:--------------------------------------------------------------------

Susan S. Lanigan,
Executive Vice President and General Counsel, Dollar General 
Corporation, 100 Mission Ridge, Goodlettsville, TN 37072.

Dated: June 24, 2009.--------------------------------------------------

By:--------------------------------------------------------------------

Robert R. Stephenson,
Deputy General Counsel,
Dollar General Corporation.

U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF

Cheryl A. Falvey,
General Counsel, Office of the General Counsel.

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

Dated: June 25, 2009.--------------------------------------------------
By:--------------------------------------------------------------------

Neal S. Cohen,
Trial Attorney, Division of Compliance, Office of the General 
Counsel.

By:--------------------------------------------------------------------

M. Reza Malihi,
Trial Attorney, Division of Compliance, Office of the General 
Counsel.

In the Matter of Dollar General Corporation; Order

    Upon consideration of the Settlement Agreement entered into 
between Dollar General Corporation (``DGC''), for itself and on 
behalf of its wholly owned subsidiaries, Dollar General 
Merchandising, Inc., DG Retail, LLC, Dolgencorp, Inc., Dolgencorp of 
Texas, Inc., Dolgencorp of New York, Inc., and Dollar General 
Partners (collectively referred to as ``Dollar General''), and the 
U.S. Consumer Product Safety Commission (``Commission'') staff, and 
the Commission having jurisdiction over the subject matter and over 
Dollar General, and it appearing that the Settlement Agreement and 
Order are in the public interest, it is
    Ordered, that the Settlement Agreement be, and hereby is, 
accepted; and it is
    Further ordered, that DGC shall pay, on behalf of Dollar 
General, a civil penalty in the amount of one hundred thousand 
dollars ($100,000.00) 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 DGC to make any of the foregoing payments 
when due, interest on the unpaid amount shall accrue and be paid by 
DGC 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 July 2009.

BY ORDER OF THE COMMISSION:

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Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. E9-18508 Filed 7-31-09; 8:45 am]
BILLING CODE 6355-01-P