phil&teds USA, Inc., Provisional Acceptance of a Settlement Agreement and Order, 54769-54773 [2015-22892]
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Federal Register / Vol. 80, No. 176 / Friday, September 11, 2015 / Notices
FOR FURTHER INFORMATION CONTACT:
Barry S. Lineback, Telephone: (703)
603–7740, Fax: (703) 603–0655, or email
CMTEFedReg@AbilityOne.gov.
SUPPLEMENTARY INFORMATION:
Additions
On 6/6/2014 (79 FR 32716–32718), 6/
5/2015 (80 FR 32096–32097) and 6/12/
2015 (80 FR 33485–33489), the
Committee for Purchase From People
Who Are Blind or Severely Disabled
published notices of proposed additions
to the Procurement List.
After consideration of the material
presented to it concerning capability of
qualified nonprofit agencies to provide
the products and impact of the
additions on the current or most recent
contractors, the Committee has
determined that the products listed
below are suitable for procurement by
the Federal Government under 41 U.S.C.
8501–8506 and 41 CFR 51–2.4.
Regulatory Flexibility Act Certification
I certify that the following action will
not have a significant impact on a
substantial number of small entities.
The major factors considered for this
certification were:
1. The action will not result in any
additional reporting, recordkeeping or
other compliance requirements for small
entities other than the small
organizations that will furnish the
products to the Government.
2. The action will result in
authorizing small entities to furnish the
products to the Government.
3. There are no known regulatory
alternatives which would accomplish
the objectives of the Javits-WagnerO’Day Act (41 U.S.C. 8501–8506) in
connection with the products proposed
for addition to the Procurement List.
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End of Certification
Accordingly, the following products
are added to the Procurement List:
Products
NSN(s)—Product Name(s)
8455–00–NIB–0003—Badge Reel, ID,
Retractable, Bulldog Clip, Black
8455–00–NIB–0050—Flight Line Lanyard,
Cord Style, Breakaway, with Holder,
Black, 36″ x .25″
8455–00–NIB–0051—Holder, Badge, Vinyl,
Re-Sealable, Clear, 3–3⁄4″ x 2–5⁄8″
Mandatory Source of Supply: West Texas
Lighthouse for the Blind, San Angelo, TX
Mandatory Purchase For: Total Government
Requirement
Contracting Activity: General Services
Administration, Fort Worth, TX
Distribution: A-List
NSN(s)—Product Name(s)
4240–00–NIB–0161—Lockout Tags, 25-pack
4240–00–NIB–0185—Kit, Lockout, Electrical/
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Valve with AC Sensor
4240–00–NIB–0202—Lockout/Tagout
Station, 3 Padlocks
4240–00–NIB–0203—Lockout/Tagout
Station, 8 Padlocks
4240–00–NIB–0207—AC Sensor, 50V–1000V
4240–00–NIB–0228—Medium Electrical
Lockout Kit with Breaker Lockouts
4240–00–NIB–0229—Large Electrical
Lockout Kit
4240–00–NIB–0230—Large Electrical/Valve
Lockout Kit
4240–00–NIB–0231—Small Standard
Lockout Kit
4240–00–NIB–0232—Extra Small Personal
Electrical Lockout Kit
4240–00–NIB–0233—Small Electrical
Lockout Kit
4240–00–NIB–0234—Small Electrical
Lockout Kit with Plug Lockouts
4240–00–NIB–0236—Small Electrical Valve
Lockout Kit
Mandatory Source of Supply: Association for
the Blind and Visually Impaired—
Goodwill Industries of Greater Rochester,
Rochester, NY
Mandatory Purchase For: Total Government
Requirement
Contracting Activity: Defense Logistics
Agency Troop Support
Distribution: B-List
Barry S. Lineback,
Director, Business Operations.
54769
The $200,000 Payment shall be paid
within thirty (30) calendar days after the
phil&teds USA, Inc., receives service of
the Commission’s final Order accepting
the 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 September
28, 2015.
ADDRESSES: Persons wishing to
comment on this Settlement Agreement
should send written comments to the
Comment 15–C0007 Office of the
Secretary, Consumer Product Safety
Commission, 4330 East-West Highway,
Room 820, Bethesda, Maryland 20814–
4408.
FOR FURTHER INFORMATION CONTACT:
Leah Wade, Trial Attorney, Office of the
General Counsel, Division of
Compliance, Consumer Product Safety
Commission, 4330 East-West Highway,
Bethesda, Maryland 20814–4408;
telephone (301) 504–7225.
SUPPLEMENTARY INFORMATION: The text of
the Agreement and Order appears
below.
BILLING CODE 6353–01–P
Dated: September 8, 2015.
Todd A. Stevenson,
Secretary.
CONSUMER PRODUCT SAFETY
COMMISSION
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY
COMMISSION
[FR Doc. 2015–22898 Filed 9–10–15; 8:45 am]
[CPSC Docket No. 15–C0007]
In the Matter of: phil&teds USA, Inc.
CPSC Docket No.: 15–C0007
phil&teds USA, Inc., Provisional
Acceptance of a Settlement Agreement
and Order
SETTLEMENT AGREEMENT
1. In accordance with the Consumer
Product Safety Act (‘‘CPSA’’), 15 U.S.C.
2051–2089 and 16 CFR 1118.20,
phil&teds USA, Inc. (‘‘phil&teds USA’’
or ‘‘Firm’’), and the U.S. Consumer
Product Safety Commission
(‘‘Commission’’), through its staff
(‘‘Staff’’), hereby enter into this
Settlement Agreement. The Settlement
Agreement and Affidavit of Corporate
Officer, attached at Exhibit A
(collectively the ‘‘Agreement’’) and the
incorporated attached Order (‘‘Order’’)
resolve Staff’s charges set forth below.
Consumer Product Safety
Commission.
ACTION: Notice.
AGENCY:
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 phil&teds
USA, Inc., containing a civil penalty of
$3,500,000, with $3,300,000 of the total
suspended, subject to the terms and
conditions of the Settlement Agreement.
phil&teds USA, Inc., shall pay the nonsuspended portion of the penalty,
$200,000, in accordance with the terms
set forth in the Settlement Agreement.1
SUMMARY:
1 The Commission voted (4–1) to provisionally
accept the Settlement Agreement and Order
regarding phil&teds USA, Inc. Chairman Kaye,
Commissioner Adler, Commissioner Robinson and
Commissioner Buerkle voted to provisionally
accept the Settlement Agreement and Order.
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THE PARTIES
2. The Commission is an independent
federal regulatory agency established
pursuant to, and responsible for, the
enforcement of the CPSA. By executing
this Agreement, 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.
Commissioner Mohorovic voted to take other action
and reject the Settlement Agreement and Order and
return to staff to seek higher payment.
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3. phil&teds USA is a corporation,
organized and existing under the laws of
the state of Colorado, with its principal
corporate office located in Fort Collins,
CO. phil&teds USA is an importer,
distributor and retailer of children’s
strollers, child carriers and other baby
products and accessories.
STAFF’S CHARGES
4. From May 2009 through January
2011, phil&teds USA imported and sold
in the United States, approximately
13,500 clip-on high chairs under the
brand name, MeToo Chairs (‘‘Chairs’’).
The Firm sold the Chairs online and
through independent retailers
nationwide.
5. The Chairs are ‘‘consumer
products,’’ and, at all relevant times,
phil&teds USA was either the importer,
‘‘distributor’’ or ‘‘retailer’’ of these
consumer products, which were
‘‘distributed in commerce,’’ as those
terms are defined or used in sections
3(a)(5), (7), (8),and (13) of the CPSA, 15
U.S.C. 2052(a)(5), (7), (8), and (13).
6. The Chairs are defective and create
an unreasonable risk of serious injury
because the clamps on the Chairs can
detach from the table, posing a fall
hazard. If only one side of the Chair
detaches, the lack of space between the
metal cross bar and the clamps creates
a finger pinching, laceration, and
amputation hazard.
7. Between September 2009 and
October 2010, the Firm obtained
sufficient information that reasonably
supported the conclusion that the
Chairs contained a defect that could
create a substantial product hazard or
created an unreasonable risk of serious
injury. Specifically, the Firm was aware
of reports of incidents and injuries,
including reports of fingertip
amputations to children. The Firm was
also aware that two design changes had
been implemented to address the
defects in the Chair.
8. Despite having information
regarding the Chair’s defect or risk, the
Firm failed to inform the Commission
immediately, as required by sections
15(b)(3) and (4) of the CPSA, 15 U.S.C.
§§ 2064(b)(3) and (4).
9. Because the information in the
Firm’s possession constituted actual and
presumed knowledge, the Firm
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).
10. When the Firm filed its Full
Report, the Firm:
a. underreported the total number of
incidents and injuries involving the
Chairs, stating that it was aware of 10
‘‘instances’’ involving the product, but
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provided no details on the instances and
failed to indicate that the Firm was
aware of two amputation injuries;
b. failed to notify staff that the Chairs
posed an amputation hazard; and
c. withheld information that the Chair
had been redesigned to address the
hazard and that the sample product
supplied with the Full Report was
manufactured differently than the
Chairs involved in the incident and
injury reports.
11. The Firm’s failure to report this
information resulted in delayed
implementation of the corrective action
and recall of the product, which was not
publicly announced until August 17,
2011.
12. By making these inaccurate and
incomplete statements in the Full
Report, the Firm knowingly committed
a material misrepresentation to an
officer or employee in the course of an
investigation under the CPSA, which
violates section 19(a)(13) of the CPSA,
15 U.S.C. § 2068(a)(13), as the term
‘‘knowingly’’ is defined in section 20(d)
of the CPSA, 15 U.S.C. § 2069(d).
13. Under section 20 of the CPSA, 15
U.S.C. § 2069, the Firm is subject to civil
penalties for its knowing violation of
section 19(a)(4) of the CPSA, 15 U.S.C.
§ 2068(a)(4) and for the Firm’s knowing
material misrepresentations in violation
of section 19(a)(13) of the CPSA, 15
U.S.C. § 2068(a)(13).
FIRM’S RESPONSE
14. This Agreement does not
constitute an admission by the Firm to
the charges set forth in paragraphs 4
through 13, including charges that
phil&teds USA violated any statute or
regulation, failed to timely report, or
committed a material misrepresentation
in violation of the CPSA. In fact,
phil&teds USA took the initiative in
reporting incidents surrounding the
Chair to the CPSC, disclosed the number
of those incidents, and further
explained that unreasonable misuse of
the product was the cause of serious
injuries.
AGREEMENT OF THE PARTIES
15. Under the CPSA, the Commission
has jurisdiction over the matter
involving the Chairs and over phil&teds
USA, Inc.
16. In settlement of Staff’s charges,
and to avoid the cost, distraction, delay,
uncertainty, and inconvenience of
protracted litigation or other
proceedings, the Firm shall pay a civil
penalty in the amount of three million,
five hundred thousand dollars
($3,500,000) (‘‘Total Civil Penalty
Amount’’). In reliance on the accuracy
and completeness of the Firm’s
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representations and warranties in this
Agreement, the Commission agrees to
suspend all but two hundred thousand
dollars ($200,000) of the Total Civil
Penalty Amount (‘‘$200,000 Payment’’),
on the terms and conditions set forth in
this Agreement. The $200,000 Payment
shall be paid within thirty (30) calendar
days after the Firm receives service of
the Commission’s final Order accepting
the Agreement. All payments to be
made under the Agreement shall
constitute debts owing to the United
States and shall be made by electronic
wire transfer to the United States via:
https://www.pay.gov for allocation to and
credit against the payment obligations of
the Firm under this Agreement.
17. phil&teds USA represents and
warrants that the financial statements of
phil&teds USA provided to the
Commission in connection with the
matters addressed in this Agreement
(‘‘Financial Statements’’) are complete,
accurate and current and have been
prepared on a consistent basis
throughout the periods indicated except
as otherwise noted therein, and that the
Financial Statements fairly present the
financial condition and results of
operations and cash flow of the Firm as
of the dates, and for the periods,
indicated therein, all consistently
applied during the periods involved
except as noted therein, and subject, in
the case of the unaudited interim
financial statements, to the absence of
notes and normal year-end adjustments.
18. The Firm represents and warrants
that the information supplied by the
Firm to the Commission in connection
with the matters addressed in the
Agreement (including information about
the Firm’s financial resources and
ability to pay the Total Civil Penalty
Amount) did not, at the time provided
to the Commission, contain any untrue
statement of a material fact or omit to
state any material fact required to be
stated therein or necessary in order to
make the statements therein, in light of
the circumstances under which they are
made, not misleading.
19. The parties agree that an amount
equal to Total Civil Penalty Amount
minus any amounts paid by phil&teds
USA pursuant to this Agreement shall
become due and payable immediately
upon the occurrence of an ‘‘Event of
Default,’’ without notice or further
action by any party. An ‘‘Event of
Default’’ means:
a. a failure of phil&teds USA to pay
the $200,000 Payment (or any portion
thereof) when due and payable;
b. the breach or inaccuracy of any
representation or warranty of phil&teds
USA in this Agreement;
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c. the breach or failure by phil&teds
USA to observe or perform any of its
obligations, covenants or agreements set
forth in the Agreement; or
d. a failure of phil&teds USA to
comply with all CPSC statutes or
regulations for three (3) years after the
effective date of this Agreement.
20. All unpaid amounts, if any, due
and owing under the Agreement shall
constitute a debt due and immediately
owing by phil&teds USA to the United
States, and interest shall accrue and be
paid by phil&teds USA at the federal
legal rate of interest set forth at 28
U.S.C. § 1961(a) and (b) from the date of
Event of Default until all amounts due
have been paid in full (hereinafter
‘‘Default Payment Amount’’ and
‘‘Default Interest Balance’’). phil&teds
USA shall consent to a Consent
Judgment in the amount of the Default
Payment Amount and Default Interest
Balance, and the United States, at its
sole option, may collect the entire
Default Payment Amount and Default
Interest Balance or exercise any other
rights granted by law or in equity,
including but not limited to referring
such matters for private collection, and
phil&teds USA agrees not to contest,
and hereby waives and discharges any
defenses to, any collection action
undertaken by the United States or its
agents or contractors pursuant to this
paragraph. phil&teds USA shall pay the
United States all reasonable costs of
collection and enforcement under this
paragraph, respectively, including
reasonable attorney’s fees and expenses.
21. phil&teds USA shall notify CPSC
in writing if any financial information
supplied or to be supplied in writing by
phil&teds USA to the Commission in
connection with the Agreement is, in
any material respect, discovered not to
be true, accurate or complete; is no
longer true, accurate or complete as a
result of subsequent events; is
discovered to contain an untrue
statement of a material fact or to omit
a material fact required to be stated
therein or necessary in order to make
the statements therein, in light of the
circumstances under which they were
made, not misleading; or contains as a
result of subsequent events an untrue
statement of a material fact or an
omission of a material fact required to
be stated, not misleading.
22. After Staff receives this Agreement
executed on behalf of phil&teds USA,
Staff shall promptly submit the
Agreement to the Commission for
provisional acceptance. Promptly
following the Commission’s provisional
acceptance of the Agreement, the
Agreement shall be placed on the public
record and published in the Federal
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Register, in accordance with the
procedures set forth in 16 CFR
§ 1118.20(e). If within fifteen (15)
calendar days the Commission does not
receive any written request not to accept
the Agreement, the Agreement shall be
deemed finally accepted on the
sixteenth (16th) calendar day after the
date the Agreement is published in the
Federal Register, in accordance with 16
CFR § 1118.20(f).
23. This Agreement is conditioned
upon, and subject to, the Commission’s
final acceptance, as set forth above, and
is subject to the provisions of 16 CFR
§ 1118.20(h). Upon the later of: (i) The
Commission’s final acceptance of this
Agreement and service of the accepted
Agreement upon phil&teds USA, 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.
24. Effective upon the later of: (i) The
Commission’s final acceptance of the
Agreement and service of the accepted
Agreement upon phil&teds USA, and
(ii) the date of issuance of the final
Order, for good and valuable
consideration, phil&teds USA 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
the Agreement: (a) An administrative or
judicial hearing; (b) judicial review or
other challenge or contest of the validity
of the Order or of the Commission’s
actions; (c) a determination by the
Commission of whether phil&teds USA
failed to comply with the CPSA and the
underlying regulations; (d) a statement
of findings of fact and conclusions of
law; and (e) any claims under the Equal
Access to Justice Act.
25. phil&teds USA shall implement
and maintain a compliance program
designed to ensure compliance with the
statutes and regulations enforced by the
Commission that, at a minimum,
contains the following elements:
a. written standards and policies
concerning products sold by phil&teds
USA in the United States that may relate
to, or impact, CPSA compliance;
b. procedures for verifying the
accuracy and completeness of
information conveyed to the
Commission;
c. procedures for implementing
corrective and preventive actions when
compliance deficiencies or violations
are identified;
d. procedures for collecting
information from phil&teds USA’s
affiliates on incidents and injuries
occurring outside the United States;
e. a mechanism for confidential
employee reporting of compliance-
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54771
related questions or concerns to either a
compliance officer or to another senior
manager with authority to act as
necessary;
f. effective communication of
company compliance-related policies
and procedures to all employees
through training programs or otherwise;
g. senior manager responsibility for
compliance and accountability for
violations of the statutes and regulations
enforced by the Commission;
h. board oversight of compliance; and
i. retention of all compliance-related
records for at least five (5) years and
availability of such records to Staff,
upon request.
26. phil&teds USA shall implement,
maintain and enforce a system of
internal controls and procedures
designed to ensure that:
a. information required to be
disclosed by phil&teds USA to the
Commission is recorded, processed and
reported in accordance with applicable
law;
b. all reporting made to the
Commission is timely, truthful,
complete and accurate; and
c. prompt disclosure is made to
phil&teds USA’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 phil&teds USA’s
ability to record, process, and report to
the Commission in accordance with
applicable law.
27. Upon Staff’s request, phil&teds
USA shall provide written
documentation of its compliance
program and system of internal controls
and procedures, including, but not
limited to, the effective dates of the
program, controls and procedures and
improvements thereto. phil&teds USA
shall cooperate fully and truthfully with
Staff and shall make available all
information, materials, and personnel
deemed necessary by Staff to evaluate
phil&teds USA’s compliance with the
terms of the Agreement.
28. phil&teds USA agrees that any
settlement agreements with consumers
involving products over which the
Commission has jurisdiction, and which
include a confidentiality clause, must
include an exception to the
confidentiality clause that allows
consumers to discuss any issues related
to their settlement agreement with
officers and employees of the
Commission and other local, state and
federal government representatives.
29. The parties acknowledge and
agree that the Commission may make
public disclosure of the terms of the
Agreement and Order.
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30. phil&teds USA represents that the
Agreement: (i) Is entered into freely and
voluntarily, without any degree of
duress or compulsion whatsoever; (ii)
has been duly authorized; and (iii)
constitutes the valid and binding
obligation of phil&teds USA, and each
of its successors, transferees, and/or
assigns.
31. The signatories represent that they
are authorized to execute this
Agreement.
32. The Agreement is governed by the
laws of the United States.
33. The Agreement and the Order
shall apply to, and be binding upon,
phil&teds USA and each of its
successors, transferees, and/or assigns,
and a violation of the Agreement or
Order may subject phil&teds USA and
each of its successors, transferees, and/
or assigns to appropriate legal action.
34. The Agreement and the Order
constitute the complete agreement
between the parties on the subject
matter.
35. 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 therefore, shall not be
construed against any party for that
reason in any subsequent dispute.
36. The Agreement shall 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.
37. 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 phil&teds
USA agree that severing the provision
materially affects the purpose of the
Agreement and Order.
PHIL&TEDS USA, INC.
Dated: lllllllllllllllll
8/12/15
By: lllllllllllllllllll
Michael Grant, President,
phil&teds USA, Inc.,
221 Jefferson Street, Suite 100
Fort Collins, Colorado 80524
Dated: lllllllllllllllll
8/13/15
By: lllllllllllllllllll
Jonathan Judge,
Schiff Hardin LLP,
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233 Wacker Drive, Suite 6600
Chicago, Illinois 60606
Counsel for phil&teds USA, Inc.
U.S. CONSUMER PRODUCT SAFETY
COMMISSION STAFF
Dated: lllllllllllllllll
8/13/15
By: lllllllllllllllllll
Stephanie Tsacoumis,
General Counsel
Mary T. Boyle,
Deputy General Counsel
Mary B. Murphy,
Assistant General Counsel
Leah Wade,
Trial Attorney
EXHIBIT A
AFFIDAVIT OF CORPORATE OFFICER
MICHAEL GRANT
I, the undersigned, swear and affirm
that I am employed by phil&teds USA,
Inc., that I hold the position indicated
below, and, by reason of my position, I
am authorized and qualified to make the
following statements. All capitalized
terms not defined in this affidavit shall
have the meanings given to them in the
Agreement between phil&teds USA, Inc.
and the U.S. Consumer Product Safety
Commission, of which this Affidavit is
a part.
1. The financial statements of
phil&teds USA provided to the
Commission in connection with the
matters addressed in this Agreement
(‘‘Financial Statements’’) are complete,
accurate and current and have been
prepared on a consistent basis
throughout the periods indicated except
as otherwise noted therein, and that the
Financial Statements fairly present the
financial condition and results of
operations and cash flow of phil&teds
USA as of the dates, and for the periods,
indicated therein, all consistently
applied during the periods involved
except as noted therein, and subject, in
the case of the unaudited interim
financial statements, to the absence of
notes and normal year-end adjustments.
2. phil&teds USA has supplied all
documents and information responsive
to CPSC’s requests.
3. The information supplied by
phil&teds USA to the Commission in
connection with the matters addressed
in the Agreement (including
information about the Firm’s financial
resources and ability to pay the Total
Civil Penalty Amount) did not, at the
time provided to the Commission,
contain any untrue statement of a
material fact or omit to state any
material fact required to be stated
therein or necessary in order to make
the statements therein, in light of the
circumstances under which they are
made, not misleading.
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4. For each of the fiscal years ended
March 31, 2015, 2014 and 2013, the net
income, the net worth/stockholder’s
equity and working capital of phil&teds
USA, Inc., was negative and to satisfy
liabilities, phil&teds USA, Inc. relied on
payments from its parent entity, Most
Excellent World Holdings, Limited
(‘‘MEW’’), pursuant to an intercompany
agreement.
5. phil&teds USA, Inc. has insufficient
cash or other liquid assets to satisfy a
civil penalty payment in excess of
$200,000, has no sources of funding that
could be used to provide the liquidity
to make such a payment, and is unable
to secure funds from MEW to fulfill a
civil penalty payment obligation.
6. phil&teds USA, Inc. will not
directly or indirectly receive
reimbursement, indemnification,
insurance-related payment or other
payment in connection with the matters
addressed in the Agreement.
7. Any civil penalty payment by
phil&teds USA, Inc. in excess of
$200,000 will require phil&teds USA,
Inc. to cease operations as an ongoing
business.
I declare under penalty of perjury that
the foregoing is true and correct. I
understand that any intentional false
statement in this declaration may be a
criminal offense under 18 U.S.C. § 1001.
Executed on August 12, 2015
Signed: lllllllllllllllll
Michael Grant
President, phil&teds USA, Inc.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY
COMMISSION
In the Matter of: phil&teds USA, Inc.
CPSC Docket No.: 15–C0007
ORDER
Upon consideration of the Settlement
Agreement entered into between
phil&teds USA, Inc. (‘‘phil&teds USA’’),
and the U.S. Consumer Product Safety
Commission (‘‘Commission’’), and the
Commission having jurisdiction over
the subject matter and over phil&teds
USA, 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 phil&teds
USA shall comply with the terms of the
Settlement Agreement and shall pay a
civil penalty of $3,500,000, with
$3,300,000 of the total suspended,
subject to the terms and conditions of
the Settlement Agreement. phil&teds
USA shall pay the non-suspended
portion of the penalty, $200,000, in
E:\FR\FM\11SEN1.SGM
11SEN1
Federal Register / Vol. 80, No. 176 / Friday, September 11, 2015 / Notices
Installations, Environment, and
Logistics.
5. Lt Gen James McLaughlin, Deputy
Commander at United States Cyber
Command.
6. Lt Gen Andrew Busch, Director,
Defense Logistics Agency.
7. Ms. Thomas, Deputy Chief
Management Officer of the Air Force.
8. Mr. Gill, Executive Director, Air
Force Materiel Command.
9. Mr. Hartley, Principal Deputy
Provisionally accepted and provisional Order
Assistant Secretary of the Air Force for
issued on the 8th day of September , 2015.
Installations, Environment and Energy.
BY ORDER OF THE COMMISSION:
10. Mr. Bennett, Principal Deputy
lllllllllllllllllllll
Assistant Secretary of the Air Force for
Todd A. Stevenson,
Financial Management and Comptroller.
Secretary U.S. Consumer Product Safety
11. Mr. Lombardi, Principal Deputy
Commission
Assistant Secretary of the Air Force
[FR Doc. 2015–22892 Filed 9–10–15; 8:45 am]
(Acquisition).
BILLING CODE 6355–01–P
12. Mr. Corsi, Assistant Deputy Chief
of Staff for Manpower, Personnel and
Services.
DEPARTMENT OF DEFENSE
13. Mr. Salvatori, Director,
Capabilities Management Office.
Department of the Air Force
14. Mr. Geurts, Acquisition Executive,
U.S. Special Operations Command.
Notice Is Given of the Names of
15. Mr. Fedrigo, Deputy Assistant
Members of the Performance Review
Secretary of the Air Force for Reserve
Board for the Department of the Air
Affairs and Airman Readiness.
Force
16. Ms. Kay, Director of Security,
AGENCY: Department of the Air Force,
Special Program Oversight and
Department of Defense.
Information Protection. Additionally, all
ACTION: Notice.
career status Air Force Tier 3 SES
members not included in the above list
SUMMARY: Notice is given of the names
are eligible to serve on the 2015
of members of the Performance Review
Performance Review Board and are
Board for the Department of the Air
hereby nominated for inclusion on an
Force.
ad hoc basis in the event of absence(s).
DATES: Effective Date: November 1,
FOR FURTHER INFORMATION CONTACT:
2015.
Please direct any written comments or
requests for information to Dr. Daramia
SUPPLEMENTARY INFORMATION: Pursuant
Hinton, Deputy Director, Senior
to 5 U.S.C. 4314(c) (1–5), the
Executive Management, AF/DPS, 1040
Department of the Air Force (AF)
announces the appointment of members Air Force Pentagon, Washington, DC
20330–1040 (PH: 703–695–7677; or via
to the AF’s Senior Executive Service
(SES) Performance Review Board (PRB). email at daramia.t.hinton.civ@mail.mil).
Appointments are made by the
Henry Williams,
authorizing official. Each board member Acting, Air Force Federal Register Liaison
shall review and evaluate performance
Officer.
scores provided by the SES’ immediate
[FR Doc. 2015–22889 Filed 9–10–15; 8:45 am]
supervisor. Performance standards must
BILLING CODE 5001–10–P
be applied consistently across the AF.
The board will make final
recommendations to the authorizing
DEPARTMENT OF DEFENSE
official relative to the performance of
the executive.
Department of the Army
The members of the 2015 Performance
Review Board for the U.S. Air Force are: [Docket ID USA–2015–HQ–0035]
1. Board President—Gen McDew,
Proposed Collection; Comment
Commander, United States
Request
Transportation Command.
2. Gen Goldfein, Vice Chief of Staff of AGENCY: Army & Air Force Exchange
the Air Force.
Service (Exchange), DoD.
3. Honorable Lisa Disbrow, Under
ACTION: Notice.
Secretary of the Air Force.
4. Honorable Miranda Ballentine,
SUMMARY: In compliance with the
Assistant Secretary of the Air Force for
Paperwork Reduction Act of 1995, the
rmajette on DSK7SPTVN1PROD with NOTICES
accordance with the terms set forth in
the Settlement Agreement. Upon the
occurrence of an Event of Default, as set
forth in the Settlement Agreement, an
amount equal to $3,500,000
(representing the entire civil penalty,
including the suspended portion), plus
any accrued and unpaid interest, minus
any penalty amounts paid by phil&teds
USA, shall immediately become due
and payable.
VerDate Sep<11>2014
15:14 Sep 10, 2015
Jkt 235001
PO 00000
Frm 00012
Fmt 4703
Sfmt 4703
54773
Army & Air Force Exchange announces
a proposed public information
collection and seeks public comment on
the provisions thereof. Comments are
invited on: (a) Whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information shall have
practical utility; (b) the accuracy of the
agency’s estimate of the burden of the
proposed information collection; (c)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (d) ways to minimize the
burden of the information collection on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
DATES: Consideration will be given to all
comments received by November 10,
2015.
ADDRESSES: You may submit comments,
identified by docket number and title,
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Department of Defense, Office
of the Deputy Chief Management
Officer, Directorate of Oversight and
Compliance, Regulatory and Audit
Matters Office, 9010 Defense Pentagon,
Washington, DC 20301–9010.
Instructions: All submissions received
must include the agency name, docket
number and title for this Federal
Register document. The general policy
for comments and other submissions
from members of the public is to make
these submissions available for public
viewing on the Internet at https://
www.regulations.gov as they are
received without change, including any
personal identifiers or contact
information.
Any associated form(s) for this
collection may be located within this
same electronic docket and downloaded
for review/testing. Follow the
instructions at https://
www.regulations.gov for submitting
comments. Please submit comments on
any given form identified by docket
number, form number, and title.
FOR FURTHER INFORMATION CONTACT: To
request more information on this
proposed information collection or to
obtain a copy of the proposal and
associated collection instruments,
please write to the Army and Air Force
Exchange Service, Office of the General
Counsel, Compliance Division, Attn:
Teresa Schreurs, 3911 South Walton
Walker Blvd., Dallas, TX 75236–1598 or
call the Exchange Compliance Division
at 800–967–6067.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\11SEN1.SGM
11SEN1
]]>Agencies
[Federal Register Volume 80, Number 176 (Friday, September 11, 2015)]
[Notices]
[Pages 54769-54773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22892]
=======================================================================
-----------------------------------------------------------------------
CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 15-C0007]
phil&teds USA, Inc., Provisional Acceptance of a Settlement
Agreement and Order
AGENCY: Consumer Product Safety Commission.
ACTION: Notice.
-----------------------------------------------------------------------
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
phil&teds USA, Inc., containing a civil penalty of $3,500,000, with
$3,300,000 of the total suspended, subject to the terms and conditions
of the Settlement Agreement. phil&teds USA, Inc., shall pay the non-
suspended portion of the penalty, $200,000, in accordance with the
terms set forth in the Settlement Agreement.\1\ The $200,000 Payment
shall be paid within thirty (30) calendar days after the phil&teds USA,
Inc., receives service of the Commission's final Order accepting the
Agreement.
---------------------------------------------------------------------------
\1\ The Commission voted (4-1) to provisionally accept the
Settlement Agreement and Order regarding phil&teds USA, Inc.
Chairman Kaye, Commissioner Adler, Commissioner Robinson and
Commissioner Buerkle voted to provisionally accept the Settlement
Agreement and Order. Commissioner Mohorovic voted to take other
action and reject the Settlement Agreement and Order and return to
staff to seek higher payment.
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 September 28, 2015.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 15-C0007 Office of the
Secretary, Consumer Product Safety Commission, 4330 East-West Highway,
Room 820, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Leah Wade, Trial Attorney, Office of
the General Counsel, Division of Compliance, Consumer Product Safety
Commission, 4330 East-West Highway, Bethesda, Maryland 20814-4408;
telephone (301) 504-7225.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: September 8, 2015.
Todd A. Stevenson,
Secretary.
UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of: phil&teds USA, Inc.
CPSC Docket No.: 15-C0007
SETTLEMENT AGREEMENT
1. In accordance with the Consumer Product Safety Act (``CPSA''),
15 U.S.C. 2051-2089 and 16 CFR 1118.20, phil&teds USA, Inc.
(``phil&teds USA'' or ``Firm''), and the U.S. Consumer Product Safety
Commission (``Commission''), through its staff (``Staff''), hereby
enter into this Settlement Agreement. The Settlement Agreement and
Affidavit of Corporate Officer, attached at Exhibit A (collectively the
``Agreement'') and the incorporated attached Order (``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. By executing this Agreement, Staff is acting on behalf of the
Commission, pursuant to 16 CFR Sec. 1118.20(b). The Commission issues
the Order under the provisions of the CPSA.
[[Page 54770]]
3. phil&teds USA is a corporation, organized and existing under the
laws of the state of Colorado, with its principal corporate office
located in Fort Collins, CO. phil&teds USA is an importer, distributor
and retailer of children's strollers, child carriers and other baby
products and accessories.
STAFF'S CHARGES
4. From May 2009 through January 2011, phil&teds USA imported and
sold in the United States, approximately 13,500 clip-on high chairs
under the brand name, MeToo Chairs (``Chairs''). The Firm sold the
Chairs online and through independent retailers nationwide.
5. The Chairs are ``consumer products,'' and, at all relevant
times, phil&teds USA was either the importer, ``distributor'' or
``retailer'' of these consumer products, which were ``distributed in
commerce,'' as those terms are defined or used in sections 3(a)(5),
(7), (8),and (13) of the CPSA, 15 U.S.C. 2052(a)(5), (7), (8), and
(13).
6. The Chairs are defective and create an unreasonable risk of
serious injury because the clamps on the Chairs can detach from the
table, posing a fall hazard. If only one side of the Chair detaches,
the lack of space between the metal cross bar and the clamps creates a
finger pinching, laceration, and amputation hazard.
7. Between September 2009 and October 2010, the Firm obtained
sufficient information that reasonably supported the conclusion that
the Chairs contained a defect that could create a substantial product
hazard or created an unreasonable risk of serious injury. Specifically,
the Firm was aware of reports of incidents and injuries, including
reports of fingertip amputations to children. The Firm was also aware
that two design changes had been implemented to address the defects in
the Chair.
8. Despite having information regarding the Chair's defect or risk,
the Firm failed to inform the Commission immediately, as required by
sections 15(b)(3) and (4) of the CPSA, 15 U.S.C. Sec. Sec. 2064(b)(3)
and (4).
9. Because the information in the Firm's possession constituted
actual and presumed knowledge, the Firm knowingly violated section
19(a)(4) of the CPSA, 15 U.S.C. Sec. 2068(a)(4), as the term
``knowingly'' is defined in section 20(d) of the CPSA, 15 U.S.C. Sec.
2069(d).
10. When the Firm filed its Full Report, the Firm:
a. underreported the total number of incidents and injuries
involving the Chairs, stating that it was aware of 10 ``instances''
involving the product, but provided no details on the instances and
failed to indicate that the Firm was aware of two amputation injuries;
b. failed to notify staff that the Chairs posed an amputation
hazard; and
c. withheld information that the Chair had been redesigned to
address the hazard and that the sample product supplied with the Full
Report was manufactured differently than the Chairs involved in the
incident and injury reports.
11. The Firm's failure to report this information resulted in
delayed implementation of the corrective action and recall of the
product, which was not publicly announced until August 17, 2011.
12. By making these inaccurate and incomplete statements in the
Full Report, the Firm knowingly committed a material misrepresentation
to an officer or employee in the course of an investigation under the
CPSA, which violates section 19(a)(13) of the CPSA, 15 U.S.C. Sec.
2068(a)(13), as the term ``knowingly'' is defined in section 20(d) of
the CPSA, 15 U.S.C. Sec. 2069(d).
13. Under section 20 of the CPSA, 15 U.S.C. Sec. 2069, the Firm is
subject to civil penalties for its knowing violation of section
19(a)(4) of the CPSA, 15 U.S.C. Sec. 2068(a)(4) and for the Firm's
knowing material misrepresentations in violation of section 19(a)(13)
of the CPSA, 15 U.S.C. Sec. 2068(a)(13).
FIRM'S RESPONSE
14. This Agreement does not constitute an admission by the Firm to
the charges set forth in paragraphs 4 through 13, including charges
that phil&teds USA violated any statute or regulation, failed to timely
report, or committed a material misrepresentation in violation of the
CPSA. In fact, phil&teds USA took the initiative in reporting incidents
surrounding the Chair to the CPSC, disclosed the number of those
incidents, and further explained that unreasonable misuse of the
product was the cause of serious injuries.
AGREEMENT OF THE PARTIES
15. Under the CPSA, the Commission has jurisdiction over the matter
involving the Chairs and over phil&teds USA, Inc.
16. In settlement of Staff's charges, and to avoid the cost,
distraction, delay, uncertainty, and inconvenience of protracted
litigation or other proceedings, the Firm shall pay a civil penalty in
the amount of three million, five hundred thousand dollars ($3,500,000)
(``Total Civil Penalty Amount''). In reliance on the accuracy and
completeness of the Firm's representations and warranties in this
Agreement, the Commission agrees to suspend all but two hundred
thousand dollars ($200,000) of the Total Civil Penalty Amount
(``$200,000 Payment''), on the terms and conditions set forth in this
Agreement. The $200,000 Payment shall be paid within thirty (30)
calendar days after the Firm receives service of the Commission's final
Order accepting the Agreement. All payments to be made under the
Agreement shall constitute debts owing to the United States and shall
be made by electronic wire transfer to the United States via: https://www.pay.gov for allocation to and credit against the payment
obligations of the Firm under this Agreement.
17. phil&teds USA represents and warrants that the financial
statements of phil&teds USA provided to the Commission in connection
with the matters addressed in this Agreement (``Financial Statements'')
are complete, accurate and current and have been prepared on a
consistent basis throughout the periods indicated except as otherwise
noted therein, and that the Financial Statements fairly present the
financial condition and results of operations and cash flow of the Firm
as of the dates, and for the periods, indicated therein, all
consistently applied during the periods involved except as noted
therein, and subject, in the case of the unaudited interim financial
statements, to the absence of notes and normal year-end adjustments.
18. The Firm represents and warrants that the information supplied
by the Firm to the Commission in connection with the matters addressed
in the Agreement (including information about the Firm's financial
resources and ability to pay the Total Civil Penalty Amount) did not,
at the time provided to the Commission, contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
19. The parties agree that an amount equal to Total Civil Penalty
Amount minus any amounts paid by phil&teds USA pursuant to this
Agreement shall become due and payable immediately upon the occurrence
of an ``Event of Default,'' without notice or further action by any
party. An ``Event of Default'' means:
a. a failure of phil&teds USA to pay the $200,000 Payment (or any
portion thereof) when due and payable;
b. the breach or inaccuracy of any representation or warranty of
phil&teds USA in this Agreement;
[[Page 54771]]
c. the breach or failure by phil&teds USA to observe or perform any
of its obligations, covenants or agreements set forth in the Agreement;
or
d. a failure of phil&teds USA to comply with all CPSC statutes or
regulations for three (3) years after the effective date of this
Agreement.
20. All unpaid amounts, if any, due and owing under the Agreement
shall constitute a debt due and immediately owing by phil&teds USA to
the United States, and interest shall accrue and be paid by phil&teds
USA at the federal legal rate of interest set forth at 28 U.S.C. Sec.
1961(a) and (b) from the date of Event of Default until all amounts due
have been paid in full (hereinafter ``Default Payment Amount'' and
``Default Interest Balance''). phil&teds USA shall consent to a Consent
Judgment in the amount of the Default Payment Amount and Default
Interest Balance, and the United States, at its sole option, may
collect the entire Default Payment Amount and Default Interest Balance
or exercise any other rights granted by law or in equity, including but
not limited to referring such matters for private collection, and
phil&teds USA agrees not to contest, and hereby waives and discharges
any defenses to, any collection action undertaken by the United States
or its agents or contractors pursuant to this paragraph. phil&teds USA
shall pay the United States all reasonable costs of collection and
enforcement under this paragraph, respectively, including reasonable
attorney's fees and expenses.
21. phil&teds USA shall notify CPSC in writing if any financial
information supplied or to be supplied in writing by phil&teds USA to
the Commission in connection with the Agreement is, in any material
respect, discovered not to be true, accurate or complete; is no longer
true, accurate or complete as a result of subsequent events; is
discovered to contain an untrue statement of a material fact or to omit
a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading; or contains as a result of subsequent
events an untrue statement of a material fact or an omission of a
material fact required to be stated, not misleading.
22. After Staff receives this Agreement executed on behalf of
phil&teds USA, Staff shall promptly submit the Agreement to the
Commission for provisional acceptance. Promptly following 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 Sec.
1118.20(e). If within fifteen (15) calendar days the Commission does
not receive any written request not to accept the Agreement, the
Agreement shall be deemed finally accepted on the sixteenth (16th)
calendar day after the date the Agreement is published in the Federal
Register, in accordance with 16 CFR Sec. 1118.20(f).
23. This Agreement is conditioned upon, and subject to, the
Commission's final acceptance, as set forth above, and is subject to
the provisions of 16 CFR Sec. 1118.20(h). Upon the later of: (i) The
Commission's final acceptance of this Agreement and service of the
accepted Agreement upon phil&teds USA, 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.
24. Effective upon the later of: (i) The Commission's final
acceptance of the Agreement and service of the accepted Agreement upon
phil&teds USA, and (ii) the date of issuance of the final Order, for
good and valuable consideration, phil&teds USA 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 the Agreement: (a) An administrative or judicial hearing; (b)
judicial review or other challenge or contest of the validity of the
Order or of the Commission's actions; (c) a determination by the
Commission of whether phil&teds USA failed to comply with the CPSA and
the underlying regulations; (d) a statement of findings of fact and
conclusions of law; and (e) any claims under the Equal Access to
Justice Act.
25. phil&teds USA shall implement and maintain a compliance program
designed to ensure compliance with the statutes and regulations
enforced by the Commission that, at a minimum, contains the following
elements:
a. written standards and policies concerning products sold by
phil&teds USA in the United States that may relate to, or impact, CPSA
compliance;
b. procedures for verifying the accuracy and completeness of
information conveyed to the Commission;
c. procedures for implementing corrective and preventive actions
when compliance deficiencies or violations are identified;
d. procedures for collecting information from phil&teds USA's
affiliates on incidents and injuries occurring outside the United
States;
e. 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;
f. effective communication of company compliance-related policies
and procedures to all employees through training programs or otherwise;
g. senior manager responsibility for compliance and accountability
for violations of the statutes and regulations enforced by the
Commission;
h. board oversight of compliance; and
i. retention of all compliance-related records for at least five
(5) years and availability of such records to Staff, upon request.
26. phil&teds USA shall implement, maintain and enforce a system of
internal controls and procedures designed to ensure that:
a. information required to be disclosed by phil&teds USA to the
Commission is recorded, processed and reported in accordance with
applicable law;
b. all reporting made to the Commission is timely, truthful,
complete and accurate; and
c. prompt disclosure is made to phil&teds USA'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 phil&teds USA's ability to
record, process, and report to the Commission in accordance with
applicable law.
27. Upon Staff's request, phil&teds USA shall provide written
documentation of its compliance program and system of internal controls
and procedures, including, but not limited to, the effective dates of
the program, controls and procedures and improvements thereto.
phil&teds USA shall cooperate fully and truthfully with Staff and shall
make available all information, materials, and personnel deemed
necessary by Staff to evaluate phil&teds USA's compliance with the
terms of the Agreement.
28. phil&teds USA agrees that any settlement agreements with
consumers involving products over which the Commission has
jurisdiction, and which include a confidentiality clause, must include
an exception to the confidentiality clause that allows consumers to
discuss any issues related to their settlement agreement with officers
and employees of the Commission and other local, state and federal
government representatives.
29. The parties acknowledge and agree that the Commission may make
public disclosure of the terms of the Agreement and Order.
[[Page 54772]]
30. phil&teds USA represents that the Agreement: (i) Is entered
into freely and voluntarily, without any degree of duress or compulsion
whatsoever; (ii) has been duly authorized; and (iii) constitutes the
valid and binding obligation of phil&teds USA, and each of its
successors, transferees, and/or assigns.
31. The signatories represent that they are authorized to execute
this Agreement.
32. The Agreement is governed by the laws of the United States.
33. The Agreement and the Order shall apply to, and be binding
upon, phil&teds USA and each of its successors, transferees, and/or
assigns, and a violation of the Agreement or Order may subject
phil&teds USA and each of its successors, transferees, and/or assigns
to appropriate legal action.
34. The Agreement and the Order constitute the complete agreement
between the parties on the subject matter.
35. 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 therefore, shall not be construed against any party for that reason
in any subsequent dispute.
36. The Agreement shall 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.
37. 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 phil&teds USA agree that severing the provision materially affects
the purpose of the Agreement and Order.
PHIL&TEDS USA, INC.
Dated:-----------------------------------------------------------------
8/12/15
By:--------------------------------------------------------------------
Michael Grant, President,
phil&teds USA, Inc.,
221 Jefferson Street, Suite 100
Fort Collins, Colorado 80524
Dated:-----------------------------------------------------------------
8/13/15
By:--------------------------------------------------------------------
Jonathan Judge,
Schiff Hardin LLP,
233 Wacker Drive, Suite 6600
Chicago, Illinois 60606
Counsel for phil&teds USA, Inc.
U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF
Dated:-----------------------------------------------------------------
8/13/15
By:--------------------------------------------------------------------
Stephanie Tsacoumis,
General Counsel
Mary T. Boyle,
Deputy General Counsel
Mary B. Murphy,
Assistant General Counsel
Leah Wade,
Trial Attorney
EXHIBIT A
AFFIDAVIT OF CORPORATE OFFICER MICHAEL GRANT
I, the undersigned, swear and affirm that I am employed by
phil&teds USA, Inc., that I hold the position indicated below, and, by
reason of my position, I am authorized and qualified to make the
following statements. All capitalized terms not defined in this
affidavit shall have the meanings given to them in the Agreement
between phil&teds USA, Inc. and the U.S. Consumer Product Safety
Commission, of which this Affidavit is a part.
1. The financial statements of phil&teds USA provided to the
Commission in connection with the matters addressed in this Agreement
(``Financial Statements'') are complete, accurate and current and have
been prepared on a consistent basis throughout the periods indicated
except as otherwise noted therein, and that the Financial Statements
fairly present the financial condition and results of operations and
cash flow of phil&teds USA as of the dates, and for the periods,
indicated therein, all consistently applied during the periods involved
except as noted therein, and subject, in the case of the unaudited
interim financial statements, to the absence of notes and normal year-
end adjustments.
2. phil&teds USA has supplied all documents and information
responsive to CPSC's requests.
3. The information supplied by phil&teds USA to the Commission in
connection with the matters addressed in the Agreement (including
information about the Firm's financial resources and ability to pay the
Total Civil Penalty Amount) did not, at the time provided to the
Commission, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
4. For each of the fiscal years ended March 31, 2015, 2014 and
2013, the net income, the net worth/stockholder's equity and working
capital of phil&teds USA, Inc., was negative and to satisfy
liabilities, phil&teds USA, Inc. relied on payments from its parent
entity, Most Excellent World Holdings, Limited (``MEW''), pursuant to
an intercompany agreement.
5. phil&teds USA, Inc. has insufficient cash or other liquid assets
to satisfy a civil penalty payment in excess of $200,000, has no
sources of funding that could be used to provide the liquidity to make
such a payment, and is unable to secure funds from MEW to fulfill a
civil penalty payment obligation.
6. phil&teds USA, Inc. will not directly or indirectly receive
reimbursement, indemnification, insurance-related payment or other
payment in connection with the matters addressed in the Agreement.
7. Any civil penalty payment by phil&teds USA, Inc. in excess of
$200,000 will require phil&teds USA, Inc. to cease operations as an
ongoing business.
I declare under penalty of perjury that the foregoing is true and
correct. I understand that any intentional false statement in this
declaration may be a criminal offense under 18 U.S.C. Sec. 1001.
Executed on August 12, 2015
Signed:----------------------------------------------------------------
Michael Grant
President, phil&teds USA, Inc.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of: phil&teds USA, Inc.
CPSC Docket No.: 15-C0007
ORDER
Upon consideration of the Settlement Agreement entered into between
phil&teds USA, Inc. (``phil&teds USA''), and the U.S. Consumer Product
Safety Commission (``Commission''), and the Commission having
jurisdiction over the subject matter and over phil&teds USA, 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 phil&teds USA shall comply with the terms of
the Settlement Agreement and shall pay a civil penalty of $3,500,000,
with $3,300,000 of the total suspended, subject to the terms and
conditions of the Settlement Agreement. phil&teds USA shall pay the
non-suspended portion of the penalty, $200,000, in
[[Page 54773]]
accordance with the terms set forth in the Settlement Agreement. Upon
the occurrence of an Event of Default, as set forth in the Settlement
Agreement, an amount equal to $3,500,000 (representing the entire civil
penalty, including the suspended portion), plus any accrued and unpaid
interest, minus any penalty amounts paid by phil&teds USA, shall
immediately become due and payable.
Provisionally accepted and provisional Order issued on the 8th day
of September , 2015.
BY ORDER OF THE COMMISSION:
-----------------------------------------------------------------------
Todd A. Stevenson,
Secretary U.S. Consumer Product Safety Commission
[FR Doc. 2015-22892 Filed 9-10-15; 8:45 am]
BILLING CODE 6355-01-P
