Williams-Sonoma, Inc., Provisional Acceptance of a Settlement Agreement and Order, 27190-27192 [2013-11029]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27190-27192]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11029]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 13-C0005]


Williams-Sonoma, 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 
Williams- Sonoma, Inc., containing a civil penalty of $987,500, within 
twenty (20) days of service of the Commission's final Order accepting 
the Settlement Agreement.

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 24, 2013.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 13-C0005, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Kelly M. Moore, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7447.

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

    Dated: May 6, 2013.
Todd A. Stevenson,
 Secretary.

Settlement Agreement

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
2051-2089 (CPSA) and 16 CFR 1118.20, Williams-Sonoma, Inc. (WS), and 
the United States Consumer Product Safety Commission (Commission), 
through its staff (Staff), hereby enter into this Settlement Agreement 
(Agreement). The Agreement, and the incorporated attached Order, 
resolve Staff's charges set forth below.

The Parties

    2. The Commission is an independent federal regulatory agency, 
established pursuant to, and responsible for, the enforcement of the 
CPSA, 15 U.S.C. 2051-2089. By executing the Agreement, the Staff is 
acting on behalf of the Commission, pursuant to 16 CFR 1118.20(b). The 
Commission issues the Order under the provisions of the CPSA.
    3. WS is a corporation, organized and existing under the laws of 
the State of Delaware, with its principal corporate

[[Page 27191]]

office located at 3250 Van Ness Avenue, San Francisco, CA 94109.
    4. At all times relevant to this Agreement, Pottery Barn, Inc. was 
a wholly-owned subsidiary of WS.

Staff Charges

    5. Between 2003 and 2008, WS imported into the United States 
approximately 30,000 wooden hammock stands (the Products) and 
distributed them exclusively through Pottery Barn and PBteen catalogs 
and Web sites, and Pottery Barn Outlet stores. The Products were sold 
nationwide for approximately $300.
    6. The Products are wooden hammock stands for outdoor use that are 
held together by metal brackets. Cloth hammocks designed for one or 
multiple users can be hooked to the steel eye bolts located on the 
Product's vertical support beams. The Products are ``consumer 
products'' ``distributed in commerce,'' as those terms are defined or 
used in sections 3(a)(5), (8), and (11) of the CPSA, 15 U.S.C. 
2052(a)(5), (8), and (11), and at all relevant times, WS was a 
``manufacturer'' and ``retailer'' of those items, as such terms are 
defined or used in sections 3(a) (11) and (13) of the CPSA, 15 U.S.C. 
2052(a)(11) and (13).
    7. The Products are defective because water and moisture can become 
trapped in the metal brackets, which can cause the wooden beams to rot 
inside the bracket. The Products were marketed for outdoor use, where 
they would routinely be exposed to rain and other inclement weather. 
Because the rotting was occurring inside the metal bracket, where it 
was hidden from view, there sometimes was no outward indication to 
consumers that the wood was rotting, until a consumer sat in the 
hammock and the beams broke. This posed fall and laceration hazards to 
consumers.
    8. WS received notice of a Product failure as early as November 
2004, when a consumer reported to WS that the vertical support beam of 
the Product's wooden frame had snapped, causing her guest to fall to 
the ground and sustain injury.
    9. On or before October 28, 2006, the date by which WS received its 
eighth incident report involving the Products,\1\ WS had obtained 
sufficient information that reasonably supported the conclusion that 
the Products contained a defect or possible defect that could create a 
substantial product hazard or created an unreasonable risk of serious 
injury or death. WS was required to inform the Commission immediately 
of such defect or risk, as required by sections 15(b)(3) and (4) of the 
CPSA, 15 U.S.C. 2064(b)(3) and (4).
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    \1\ At least one consumer was injured in each of the eight 
incidents reported to WS through October 28, 2006; in one such 
incident, two consumers reported injury. The incident report WS 
received on October 28, 2006 included an account of the ninth 
Product-related injury then known to WS.
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    10. Despite having information regarding the Products' defect, WS 
failed to inform the Commission immediately of such defect or risk, as 
required by sections 15(b)(3) and (4) of the CPSA, 15 U.S.C. 2064(b)(3) 
and (4).
    11. WS did not file its Full Report with the Commission until 
September 11, 2008. WS recalled the Products on October 1, 2008. By 
that time, WS was aware of 45 incidents involving the Products.
    12. In failing to inform the Commission about the Products 
immediately, WS knowingly violated section 19(a)(4) of the CPSA, 15 
U.S.C. 2068(a)(4), as the term ``knowingly'' is defined in section 
20(d) of the CPSA, 15 U.S.C. 2069(d).
    13. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, WS is 
subject to civil penalties for its knowing failure to report, as 
required under section 15(b) of the CPSA, 15 U.S.C. 2064(b).

Response of Williams-Sonoma, Inc.

    14. WS neither admits nor denies the charges set forth in 
paragraphs 5 through 13 above, including but not limited to, the charge 
that the Products contained a defect that could create a substantial 
product hazard or create an unreasonable risk of serious injury or 
death, and the contention that WS failed to notify the Commission in a 
timely manner, in accordance with section 15(b) of the CPSA, 15 U.S.C. 
2064(b).

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Products described herein and over WS.
    16. In settlement of Staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, WS shall pay a civil penalty in the 
amount of nine hundred eighty-seven thousand five hundred dollars 
($987,500) within twenty (20) calendar days after receiving service of 
the Commission's final Order accepting the Agreement. The payment shall 
be made by electronic wire transfer to the Commission via: https://www.pay.gov.
    17. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by WS or a 
determination by the Commission that WS violated the CPSA's reporting 
requirements.
    18. Following Staff's receipt of this Agreement executed on behalf 
of WS, Staff shall promptly submit the Agreement to the Commission for 
provisional acceptance. Promptly following provisional acceptance of 
the Agreement by the Commission, 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). 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 16th calendar day after the date the Agreement is 
published in the Federal Register, in accordance with 16 CFR 
1118.20(f).
    19. This Agreement is conditioned upon, and subject to, the 
Commission's final acceptance, as set forth above, and it is subject to 
the provisions of 16 CFR 1118.20(h). Upon the later of: (i) 
Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon WS; and (ii) the date of issuance of the final 
Order, this Agreement shall be in full force and effect and shall be 
binding upon the parties.
    20. Effective upon the later of: (i) The Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
WS; and (ii) and the date of issuance of the final Order, for good and 
valuable consideration, WS hereby expressly and irrevocably waives and 
agrees not to assert any past, present, or future rights to the 
following, in connection with the matter described in this Agreement: 
(i) An administrative or judicial hearing; (ii) judicial review or 
other challenge or contest of the Commission's actions; (iii) a 
determination by the Commission of whether WS failed to comply with the 
CPSA and the underlying regulations; (iv) a statement of findings of 
fact and conclusions of law; and (v) any claims under the Equal Access 
to Justice Act.
    21. WS shall implement and maintain a compliance program designed 
to ensure compliance with the safety statutes and regulations enforced 
by the Commission that, at a minimum, contains the following elements: 
(i) Written standards and policies; (ii) a mechanism for confidential 
employee reporting of compliance-related questions or concerns to 
either a compliance officer or to another senior manager with authority 
to act as necessary; (iii) effective communication of company 
compliance-related policies and procedures to all employees through 
training programs or otherwise; (iv) senior manager responsibility for

[[Page 27192]]

compliance; (v) board oversight of compliance (if applicable); and (vi) 
retention of all compliance-related records for at least five (5) years 
and availability of such records to Staff upon request.
    22. WS shall maintain and enforce a system of internal controls and 
procedures designed to ensure that: (i) Information required to be 
disclosed by WS to the Commission is recorded, processed and reported 
in accordance with applicable law; (ii) all reporting made to the 
Commission is timely, truthful, complete and accurate; and (iii) prompt 
disclosure is made to WS's management of any significant deficiencies 
or material weaknesses in the design or operation of such internal 
controls that are reasonably likely to adversely affect in any material 
respect WS's ability to record, process and report to the Commission in 
accordance with applicable law.
    23. Upon request of Staff, WS shall provide written documentation 
of such improvements, processes, and controls, including, but not 
limited to, the effective dates of such improvements, processes, and 
controls. WS shall cooperate fully and truthfully with Staff and shall 
make available all information, materials, and personnel deemed 
necessary by Staff to evaluate WS's compliance with the terms of the 
Agreement.
    24. The parties acknowledge and agree that the Commission may make 
public disclosure of the terms of the Agreement and the Order.
    25. WS represents that the Agreement: (i) Is freely and voluntarily 
entered into, without any degree of duress or compulsion whatsoever; 
(ii) has been duly authorized; and (iii) constitutes the valid and 
binding obligation of WS, enforceable against WS in accordance with its 
terms. The individuals signing the Agreement on behalf of WS represent 
and warrant that they are duly authorized by WS to execute the 
Agreement.
    26. The Commission signatories represent that they are signing the 
Agreement in their official capacities and that they are authorized to 
execute this Agreement.
    27. The Agreement is governed by the laws of the United States.
    28. The Agreement and the Order shall apply to, and be binding 
upon, WS and each of its successors, transferees, and assigns, and a 
violation of the Agreement or Order may subject WS, and each of its 
successors, transferees and assigns, to appropriate legal action.
    29. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    30. 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. For purposes of construction, the 
Agreement shall be deemed to have been drafted by both of the parties 
and shall not, therefore, be construed against any party for that 
reason in any subsequent dispute.
    31. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
CFR 1118.20(h). The Agreement may be executed in counterparts.
    32. If any provision of the Agreement or 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 WS agree in writing that severing the provision materially affects 
the purpose of the Agreement and the Order.

Dated:-----------------------------------------------------------------

WILLIAMS-SONOMA, INC.
By:
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Julie P. Whalen,

Executive Vice President, Chief Financial Officer
Williams-Sonoma, Inc.
3250 Van Ness Avenue
San Francisco, CA 94109

Dated: 4/25/13
By:
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Eric A. Rubel,

Counsel to Williams Sonoma, Inc.
Arnold & Porter LLP
555 Twelfth Street NW.
Washington, DC 20004-1206

U.S. CONSUMER PRODUCT SAFETY COMMISSION
Stephanie Tsacoumis,
General Counsel
Mary B. Murphy,
Assistant General Counsel

Dated: 4/25/13
By:
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Kelly M. Moore,
Trial Attorney, Division of Compliance, Office of the General 
Counsel

Order

    Upon consideration of the Settlement Agreement entered into between 
Williams-Sonoma, Inc. (WS), and the U.S. Consumer Product Safety 
Commission (Commission), and the Commission having jurisdiction over 
the subject matter and over WS, and it appearing that the Settlement 
Agreement and the Order are in the public interest, it is:
    Ordered that the Settlement Agreement be, and is, hereby, accepted; 
and it is
    further ordered that WS shall comply with the terms of the 
Settlement Agreement and shall pay a civil penalty in the amount of 
nine hundred eighty-seven thousand five hundred dollars ($987,500) 
within twenty (20) days of service of the Commission's final Order 
accepting the Settlement Agreement. The payment shall be made by 
electronic wire transfer to the Commission via: https://www.pay.gov. 
Upon the failure of WS to make the foregoing payment when due, interest 
on the unpaid amount shall accrue and be paid by WS at the federal 
legal rate of interest set forth at 28 U.S.C. 1961(a) and (b). If WS 
fails to make such payment or to comply in full with any other 
provision as set forth in the Settlement Agreement, such conduct will 
be considered a violation of the Settlement Agreement and Order.

    Provisionally accepted and provisional Order issued on the 3rd 
day of May, 2013.

BY ORDER OF THE COMMISSION:

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

[FR Doc. 2013-11029 Filed 5-8-13; 8:45 am]
BILLING CODE 6355-01-P