Costco Wholesale Corporation, Provisional Acceptance of a Settlement Agreement and Order, 50647-50650 [2018-21869]
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Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices
2. To provide Phase I awards as grants
in FY 2019 and all new NOAA SBIR
awards, Phase I and Phase II, in FY 2020
and beyond.
For over thirty years—since FY
1985—NOAA has awarded contracts to
small, science and technology-focused
companies under the Small Business
Administration (SBA) administered
Small Business Innovation Research
Program. Historically, NOAA has
carried out the goals and directives of
the program using contract procurement
processes. However, given the increased
emphasis for broader participation,
specially by socially and economically
disadvantaged persons and womenowned small businesses, NOAA aims to
meet these programmatic goals by
broadening the potential research areas
and engendering more innovative
solutions that have potential for the
commercial market.
The SBIR program is a highly
competitive program that encourages
domestic small businesses to engage in
Federal Research/Research and
Development with the potential for
commercialization. Through a
competitive awards-based program,
SBIR enables small businesses to
explore their technological potential
and provides the incentive to profit
from its commercialization. By
including qualified small businesses in
the nation’s research and development
arena, high-tech innovation is
stimulated and the United States gains
entrepreneurial spirit as it meets its
specific research and development
needs.
Beginning in FY19, however, all new
Phase I awards will be made through a
competitive grants process. During
Phase I of the NOAA SBIR Program,
small businesses are invited to submit
innovative research proposals related to
the research topic areas derived from
the Department of Commerce Strategic
Plan, 2018–2022, https://
www.commerce.gov/file/us-departmentcommerce-2018-2022-strategic-plan.
While the specific subtopics that NOAA
seeks to fund through the SBIR program
will be available at time of the funding
opportunity announcement, the broader
topic areas are as follows:
1. Aquaculture
2. Recreational and Commercial
Fisheries
3. Weather Service Improvement and
Evolution
4. NOAA Big Data Partnerships
5. Next Generation NOAA Platforms
6. Next Generation Observation and
Modeling Systems
7. Floods
Phase I gives small businesses the
opportunity to establish technical merit,
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feasibility, and proof of concept for the
proposed innovative solution. At NOAA
SBIR, we anticipate awarding multiple
Phase I grants, with a period of
performance of six (6) months and a notto-exceed value of $120,000.00 each.
Any organizations or individuals
receiving grants under Phase I is eligible
to compete for a follow-up Phase II
award.
The FY19 SBIR Phase I Notice of
Funding Opportunity (NOFO) will be
issued on or about October 22, 2018.
The NAICS Code for this acquisition is
541715. The NOAA SBIR NOFO will be
available on the Grants.gov website.
Please do not submit questions
regarding this specific NOFO at this
time. More detailed topic/subtopic
information will be available in the
NOFO when it is published. After the
release of this funding announcement, it
will be the offeror’s responsibility to
monitor Grants.gov for any amendments
or updates.
The NOFO is a restricted eligibility
solicitation which is limited to small
businesses. For purposes of this
upcoming NOFO announcement for
NOAA SBIR, eligibility requirements
can be found on https://www.sbir.gov.
NOAA plans to select for award the
application(s) judged to be of the
highest overall merit, with
consideration given to the quality of the
technical approach, innovation,
commercial-potential, and company/
personnel experience and qualifications.
All potential grantees must be
registered with the federal government
System for Award Management (SAM)
through the SAM.gov website (formerly
the Central Contractor Registration
database). No award can be made unless
the vendor is registered in SAM.gov. For
additional information and to register in
SAM, please go to https://sam.gov/ or
call 1–866–606–8220. In order to
register in SAM and to be eligible to
receive an award from this acquisition
office, all offerors must have a Dun &
Bradstreet Universal Systems (DUNS)
Number. A DUNS number may be
acquired free of charge by contacting
Dun & Bradstreet on-line at https://
fedgov.dnb.com/webform.
Grant applicants must obtain a DUNS
number and register in the SAM prior to
submitting an application pursuant to 2
CFR 25.200(b). If the applicant does not
provide documentation that they are
registered in SAM and their DUNS
number, the application will not be
considered for funding. In addition, an
entity applicant must maintain
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consideration by the Agency.
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50647
Additional information concerning
DUNS and SAM can be obtained on the
Grants.gov website at https://
www.grants.gov. In addition, Grants.gov
provides access to technical support by
calling 800–518–4726 or emailing
support@grants.gov).
FOR FURTHER INFORMATION CONTACT:
Vince Garcia, SBIR Program Manager at
vincent.garcia@noaa.gov.
Dated: October 2, 2018.
David Holst,
Chief Financial Officer/Administrative
Officer, Office of Oceanic and Atmospheric
Research, National Oceanic and Atmospheric
Administration.
[FR Doc. 2018–21788 Filed 10–5–18; 8:45 am]
BILLING CODE 3510–KA–P
CONSUMER PRODUCT SAFETY
COMMISSION
[CPSC Docket No. 19–C0001]
Costco Wholesale Corporation,
Provisional Acceptance of a
Settlement Agreement and Order
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 the Consumer Product Safety
Commission’s regulations. Published
below is a provisionally-accepted
Settlement Agreement with Costco
Wholesale Corporation, containing a
civil penalty in the amount of $3.85
million dollars ($3,850,000), to be paid
within thirty (30) 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 October
24, 2018.
ADDRESSES: Persons wishing to
comment on this Settlement Agreement
should send written comments to the
Comment 19–C0001, Office of the
Secretary, Consumer Product Safety
Commission, 4330 East-West Highway,
Room 820, Bethesda, Maryland 20814–
4408.
FOR FURTHER INFORMATION CONTACT:
Michele Melnick, Trial Attorney,
Division of Compliance, Office of the
General Counsel, Consumer Product
Safety Commission, 4330 East-West
Highway, Bethesda, Maryland 20814–
4408; telephone (301) 504–7592.
SUMMARY:
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Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices
The text of
the Agreement and Order appears
below.
SUPPLEMENTARY INFORMATION:
Dated: October 3, 2018.
Alberta E. Mills,
Secretary.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY
COMMISSION
In the Matter of: COSTCO
WHOLESALE CORPORATION
CPSC Docket No.: 19–C0001
SETTLEMENT AGREEMENT
1. In accordance with the Consumer
Product Safety Act, 15 U.S.C. §§ 2051–
2089 (‘‘CPSA’’) and 16 C.F.R. § 1118.20,
Costco Wholesale Corporation
(‘‘Costco’’) and the United States
Consumer Product Safety Commission
(‘‘Commission’’), through its staff,
hereby enter into this Settlement
Agreement (‘‘Agreement’’). The
Agreement and the incorporated
attached Order resolve staff’s charges set
forth below.
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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, 15 U.S.C.
§§ 2051–2089. By executing the
Agreement, staff is acting on behalf of
the Commission, pursuant to 16 C.F.R.
§ 1118.20(b). The Commission issues the
Order under the provisions of the CPSA.
3. Costco Wholesale Corporation is a
corporation, organized and existing
under the laws of the state of
Washington, with its principal place of
business in Issaquah, Washington.
STAFF CHARGES
4. Between December 2013 and May
2015, Costco imported and sold
approximately 367,000 EKO Sensible
Eco Living Trash Cans (‘‘Subject
Products’’ or ‘‘Trash Cans’’) at its
warehouse stores throughout the United
States.
5. The Trash Cans are 80 liter
stainless steel, metal-cylinder Trash
Cans with a black plastic protective
collar in the opening on the back of the
Trash Can.
6. The Trash Cans are a ‘‘consumer
product,’’ ‘‘distribut[ed] in commerce,’’
as those terms are defined or used in
sections 3(a)(5) and (8) of the CPSA, 15
U.S.C. § 2052(a)(5) and (8). Costco is a
‘‘manufacturer’’ and ‘‘retailer’’ of the
Trash Cans, as such terms are defined in
section 3(a)(11) and (13) of the CPSA, 15
U.S.C. § 2052(a)(11) and (13).
7. The Trash Cans contain a defect
which could create a substantial
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product hazard and create an
unreasonable risk of serious injury
because the black plastic protective
collar in the opening on the back of the
Trash Can can become dislodged and
expose a sharp edge, posing a laceration
hazard to consumers.
8. Between December 2013 and May
2015, Costco received 92 complaints
about the Trash Cans, including 60
complaints from consumers who
received injuries, including some
serious injuries as defined in 16 C.F.R.
§ 1115.6(c).
9. Despite having information that
reasonably supported the conclusion
that the Trash Cans contained a defect
which could create a substantial
product hazard or created an
unreasonable risk of serious injury,
Costco did not notify 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).
10. The Trash Cans were recalled on
July 17, 2015.
11. In failing to immediately inform
the Commission about the defect or
unreasonable risk associated with the
Trash Cans, Costco 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).
12. Pursuant to Section 20 of the
CPSA, 15 U.S.C. § 2069, Costco is
subject to civil penalties for its knowing
violation of section 19(a)(4) of the
CPSA, 15 U.S.C. § 2068(a)(4).
RESPONSE OF COSTCO
13. Costco’s Product Safety
Committee reviewed reports associated
with the Trash Cans that Costco
received over time. The large majority of
reports that Costco received about the
Trash Cans were comments from
Members who were returning the Trash
Cans to Costco for a refund. Further, in
December 2014, the Safety Committee
found that the black plastic protective
collar in the opening on the back of the
Trash Can could not be removed easily
from the exemplar sample it reviewed.
Based on the available information, the
Safety Committee did not believe that
Costco had a duty to notify CPSC
pursuant to CPSA Section 15(b) before
May 2015. Costco does not believe that
it knowingly violated the CPSA as that
term is defined in the statute.
14. During May 2015, Costco
identified additional reported incidents,
and learned that the vendor had made
a design change to prevent the black
plastic protective collar in the opening
on the back of the Trash Cans from
becoming loose and exposing a sharp
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metal edge. The Safety Committee also
learned that the exemplar sample it had
previously reviewed included the
modified protective collar. Based on all
of the available information, Costco
voluntarily notified CPSC in May 2015
pursuant to CPSA Section 15(b). At
Costco’s request, the vendor also
notified CPSC pursuant to CPSA Section
15(b) and then recalled the Trash Cans
in cooperation with CPSC.
15. Costco’s settlement of this matter
does not constitute an admission of
staff’s charges as set forth in paragraphs
4 through 12 above.
AGREEMENT OF THE PARTIES
16. Under the CPSA, the Commission
has jurisdiction over the matter
involving the Trash Cans and over
Costco.
17. The parties enter into the
Agreement for settlement purposes only.
The Agreement does not constitute an
admission by Costco or a determination
by the Commission that Costco violated
the CPSA’s reporting requirements.
18. In settlement of staff’s charges,
and to avoid the cost, distraction, delay,
uncertainty, and inconvenience of
protracted litigation, Costco shall pay a
civil penalty in the amount of $3.85
million (US $3,850,000) within thirty
(30) calendar days after receiving
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 Costco under this
Agreement. Failure to make such
payment by the date specified in the
Commission’s Order shall constitute
Default.
19. All unpaid amounts, if any, due
and owing under the Agreement shall
constitute a debt due and immediately
owing by Costco to the United States,
and interest shall accrue and be paid by
Costco at the federal legal rate of interest
set forth at 28 U.S.C. § 1961(a) and (b)
from the date of Default, until all
amounts due have been paid in full
(hereinafter ‘‘Default Payment Amount’’
and ‘‘Default Interest Balance’’). Costco
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 Costco agrees not to
contest, and hereby waives and
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discharges any defenses, to any
collection action undertaken by the
United States, or its agents or
contractors, pursuant to this paragraph.
Costco shall pay the United States all
reasonable costs of collection and
enforcement under this paragraph,
respectively, including reasonable
attorney’s fees and expenses.
20. After staff receives this Agreement
executed on behalf of Costco, 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 C.F.R. § 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 C.F.R. § 1118.20(f).
21. 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
C.F.R. § 1118.20(h). Upon the later of: (i)
the Commission’s final acceptance of
this Agreement and service of the
accepted Agreement upon Costco, and
(ii) the date of the issuance of the final
Order, this Agreement shall be in full
force and effect and shall be binding
upon the parties.
22. Effective upon the later of: (i) the
Commission’s final acceptance of this
Agreement and service of the accepted
Agreement upon Costco, and (ii) the
date of the issuance of the final Order,
for good and valuable consideration,
Costco 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 Costco 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.
23. Costco has and will maintain a
compliance program designed to
achieve compliance with the CPSA, and
which shall contain the following
elements: (i) written standards, policies
and procedures, including those
designed to ensure that information
relevant to CPSA compliance is
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conveyed effectively to personnel
responsible for compliance, whether or
not an injury is referenced; (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 CPSA compliance-related
policies and procedures to all
appropriate employees through regular
training programs or otherwise; (iv)
Costco’s senior management
participation in a compliance committee
responsible for the review and oversight
of compliance matters related to the
CPSA; (v) retention of CPSA
compliance-related records for at least
five (5) years, and availability of such
records to staff upon request, provided
that retention of cumulative copies of
such records shall not be required; and
(vi) procedures designed to ensure that:
information required to be disclosed by
Costco to the Commission is recorded,
processed and reported in accordance
with applicable law; that all reporting
made to the Commission is timely,
truthful, complete, accurate and in
accordance with applicable law; and
that prompt disclosure is made to
Costco’s management of any significant
deficiencies or material weaknesses in
the design or operation of such internal
controls that are reasonably likely to
affect adversely, in any material respect,
Costco’s ability to record, process and
report to the Commission in accordance
with applicable law.
24. Upon reasonable request of staff,
Costco shall provide written
documentation of its internal controls
and procedures, including, but not
limited to, the effective dates of the
procedures and improvements thereto.
Costco shall cooperate fully and
truthfully with staff and shall make
available relevant non-privileged
information and materials, and
personnel deemed necessary by staff to
evaluate Costco’s compliance with the
terms of the Agreement.
25. The parties acknowledge and
agree that the Commission may
publicize the terms of the Agreement
and Order.
26. Costco 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 Costco, enforceable against
Costco in accordance with its terms.
Costco will not directly or indirectly
receive any reimbursement,
indemnification, insurance-related
payment or other payment in
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50649
connection with the civil penalty to be
paid by Costco pursuant to the
Agreement and Order.
27. The signatories represent that they
are authorized to execute this
Agreement.
28. The Agreement is governed by the
law of the United States.
29. The Agreement and Order shall
apply to, and be binding upon, Costco
and each of its successors, transferees,
and assigns, and a violation of the
Agreement or Order may subject Costco,
and each of its successors, transferees,
and assigns, to appropriate legal action.
30. The Agreement and the Order
constitute the complete agreement
between the parties on the subject
matter contained therein. 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
C.F.R. § 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 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 Costco agree
in writing that severing the provision
materially affects the purpose of the
Agreement and the Order.
COSTCO WHOLESALE CORPORATION
Dated: lllllllllllllll
By: llllllllllllllll
John Sullivan, Senior Vice President
and General Counsel, Costco Wholesale
Corp.
Dated: September 18, 2018
By: llllllllllllllll
Eric Rubel, Arnold & Porter Kaye
Scholer, 601 Massachusetts Ave. N.W.,
Washington, D.C. 20001–3743, Counsel
to Costco Wholesale Corp.
U.S. CONSUMER PRODUCT SAFETY
COMMISSION
Patricia M. Hanz, General Counsel
Mary B. Murphy, Assistant General
Counsel
Dated: September 20, 2018
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By:
Federal Register / Vol. 83, No. 195 / Tuesday, October 9, 2018 / Notices
llllllllllllllll DEPARTMENT OF DEFENSE
Michele Melnick, Trial Attorney,
Division of Compliance, Office of the
General Counsel
Department of the Air Force
UNITED STATES OF AMERICA
Submission for OMB Review;
Comment Request
[Docket ID: USAF–2018–HQ–0005]
CONSUMER PRODUCT SAFETY
COMMISSION
AGENCY:
In the Matter of:
ACTION:
30-Day information collection
COSTCO WHOLESALE CORPORATION
notice.
CPSC Docket No.: 19–C0001
SUMMARY:
ORDER
Upon consideration of the Settlement
Agreement entered into between Costco
Wholesale Corporation (‘‘Costco’’) and
the U.S. Consumer Product Safety
Commission (‘‘Commission’’), and the
Commission having jurisdiction over
the subject matter and over the parties,
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 Costco
shall comply with the terms of the
Settlement Agreement and shall pay a
civil penalty in the amount of $3.85
million dollars ($3,850,000), within
thirty (30) days after 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
Costco to make the foregoing payment
when due, interest on the unpaid
amount shall accrue and be paid by
Costco at the federal legal rate of interest
set forth at 28 U.S.C. § 1961(a) and (b).
If Costco fails to make such payment or
to comply in full with any other
provision of the Settlement Agreement,
such conduct will be considered a
violation of the Settlement Agreement
and Order.
amozie on DSK3GDR082PROD with NOTICES1
Department of the Air Force,
DoD.
The Department of Defense
has submitted to OMB for clearance the
following proposal for collection of
information under the provisions of the
Paperwork Reduction Act.
DATES: Consideration will be given to all
comments received by November 8,
2018.
Comments and
recommendations on the proposed
information collection should be
emailed to Ms. Jasmeet Seehra, DoD
Desk Officer, at oira_submission@
omb.eop.gov. Please identify the
proposed information collection by DoD
Desk Officer, Docket ID number, and
title of the information collection.
FOR FURTHER INFORMATION CONTACT: Fred
Licari, 571–372–0493, or whs.mcalex.esd.mbx.dd-dod-informationcollections@mail.mil.
SUPPLEMENTARY INFORMATION:
Title; Associated Form; and OMB
Number: Air Force Family Integrated
Results & Statistical Tracking (AFFIRST)
automated system; OMB Control
Number 0701–0070.
Type of Request: Reinstatement.
Number of Respondents: 37,500.
Responses per Respondent: 1.
Annual Responses: 37,500.
Average Burden per Response: 15
minutes.
Annual Burden Hours: 9,375.
Needs and Uses: The information
collection requirement is necessary to
record demographic information on
Airman & Family Readiness Center
(A&FRC) customers, results of the
customer’s visits, determine customer
needs, service plan, referrals, workshop
Provisionally accepted and provisional
attendance and other related A&FRC
Order issued on the 3rd day of October,
activities and services accessed by the
2018.
customer. Data is used to determine the
By Order of the Commission:
effectiveness of A&FRC activities and
lllllllllllllllllll services (results management) as well as
collect and provide return on
Alberta Mills, Secretary,
investment data to leadership.
U.S. Consumer Product Safety
Information is compiled for statistical
Commission.
reporting to bases, major commands,
[FR Doc. 2018–21869 Filed 10–5–18; 8:45 am]
Headquarters United States Air Force,
BILLING CODE 6355–01–P
Department of Defense and Congress.
Affected Public: Individuals or
Households.
Frequency: On occasion.
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ADDRESSES:
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Respondent’s Obligation: Voluntary.
OMB Desk Officer: Ms. Jasmeet
Seehra.
You may also submit comments and
recommendations, identified by Docket
ID number and title, by the following
method:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Instructions: All submissions received
must include the agency name, Docket
ID 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.
DOD Clearance Officer: Mr. Frederick
Licari.
Requests for copies of the information
collection proposal should be sent to
Mr. Licari at whs.mc-alex.esd.mbx.dddod-information-collections@mail.mil.
Dated: October 3, 2018.
Shelly E. Finke,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[FR Doc. 2018–21894 Filed 10–5–18; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket No. IC18–20–000]
Commission Information Collection
Activities (FERC–919); Comment
Request; Extension
Federal Energy Regulatory
Commission.
ACTION: Notice of information collection
and request for comments.
AGENCY:
In compliance with the
requirements of the Paperwork
Reduction Act of 1995, the Federal
Energy Regulatory Commission
(Commission or FERC) is soliciting
public comment on the currently
approved information collection, FERC–
919 (Market Based Rates for Wholesale
Sales of Electric Energy, Capacity and
Ancillary Services by Public Utilities).
DATES: Comments on the collection of
information are due December 10, 2018.
ADDRESSES: You may submit comments
(identified by Docket No. IC18–20–000)
by either of the following methods:
• eFiling at Commission’s website:
https://www.ferc.gov/docs-filing/
efiling.asp
SUMMARY:
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]]>Agencies
[Federal Register Volume 83, Number 195 (Tuesday, October 9, 2018)]
[Notices]
[Pages 50647-50650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21869]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 19-C0001]
Costco Wholesale 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 the Consumer
Product Safety Commission's regulations. Published below is a
provisionally-accepted Settlement Agreement with Costco Wholesale
Corporation, containing a civil penalty in the amount of $3.85 million
dollars ($3,850,000), to be paid within thirty (30) 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 October 24, 2018.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 19-C0001, Office of the
Secretary, Consumer Product Safety Commission, 4330 East-West Highway,
Room 820, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Michele Melnick, Trial Attorney,
Division of Compliance, Office of the General Counsel, Consumer Product
Safety Commission, 4330 East-West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7592.
[[Page 50648]]
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: October 3, 2018.
Alberta E. Mills,
Secretary.
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of: COSTCO WHOLESALE CORPORATION
CPSC Docket No.: 19-C0001
SETTLEMENT AGREEMENT
1. In accordance with the Consumer Product Safety Act, 15 U.S.C.
Sec. Sec. 2051-2089 (``CPSA'') and 16 C.F.R. Sec. 1118.20, Costco
Wholesale Corporation (``Costco'') and the United States Consumer
Product Safety Commission (``Commission''), through its 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. Sec. Sec. 2051-2089. By executing the Agreement, staff
is acting on behalf of the Commission, pursuant to 16 C.F.R. Sec.
1118.20(b). The Commission issues the Order under the provisions of the
CPSA.
3. Costco Wholesale Corporation is a corporation, organized and
existing under the laws of the state of Washington, with its principal
place of business in Issaquah, Washington.
STAFF CHARGES
4. Between December 2013 and May 2015, Costco imported and sold
approximately 367,000 EKO Sensible Eco Living Trash Cans (``Subject
Products'' or ``Trash Cans'') at its warehouse stores throughout the
United States.
5. The Trash Cans are 80 liter stainless steel, metal-cylinder
Trash Cans with a black plastic protective collar in the opening on the
back of the Trash Can.
6. The Trash Cans are a ``consumer product,'' ``distribut[ed] in
commerce,'' as those terms are defined or used in sections 3(a)(5) and
(8) of the CPSA, 15 U.S.C. Sec. 2052(a)(5) and (8). Costco is a
``manufacturer'' and ``retailer'' of the Trash Cans, as such terms are
defined in section 3(a)(11) and (13) of the CPSA, 15 U.S.C. Sec.
2052(a)(11) and (13).
7. The Trash Cans contain a defect which could create a substantial
product hazard and create an unreasonable risk of serious injury
because the black plastic protective collar in the opening on the back
of the Trash Can can become dislodged and expose a sharp edge, posing a
laceration hazard to consumers.
8. Between December 2013 and May 2015, Costco received 92
complaints about the Trash Cans, including 60 complaints from consumers
who received injuries, including some serious injuries as defined in 16
C.F.R. Sec. 1115.6(c).
9. Despite having information that reasonably supported the
conclusion that the Trash Cans contained a defect which could create a
substantial product hazard or created an unreasonable risk of serious
injury, Costco did not notify the Commission immediately of such defect
or risk, as required by sections 15(b)(3) and (4) of the CPSA, 15
U.S.C. Sec. Sec. 2064(b)(3) and (4).
10. The Trash Cans were recalled on July 17, 2015.
11. In failing to immediately inform the Commission about the
defect or unreasonable risk associated with the Trash Cans, Costco
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).
12. Pursuant to Section 20 of the CPSA, 15 U.S.C. Sec. 2069,
Costco 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).
RESPONSE OF COSTCO
13. Costco's Product Safety Committee reviewed reports associated
with the Trash Cans that Costco received over time. The large majority
of reports that Costco received about the Trash Cans were comments from
Members who were returning the Trash Cans to Costco for a refund.
Further, in December 2014, the Safety Committee found that the black
plastic protective collar in the opening on the back of the Trash Can
could not be removed easily from the exemplar sample it reviewed. Based
on the available information, the Safety Committee did not believe that
Costco had a duty to notify CPSC pursuant to CPSA Section 15(b) before
May 2015. Costco does not believe that it knowingly violated the CPSA
as that term is defined in the statute.
14. During May 2015, Costco identified additional reported
incidents, and learned that the vendor had made a design change to
prevent the black plastic protective collar in the opening on the back
of the Trash Cans from becoming loose and exposing a sharp metal edge.
The Safety Committee also learned that the exemplar sample it had
previously reviewed included the modified protective collar. Based on
all of the available information, Costco voluntarily notified CPSC in
May 2015 pursuant to CPSA Section 15(b). At Costco's request, the
vendor also notified CPSC pursuant to CPSA Section 15(b) and then
recalled the Trash Cans in cooperation with CPSC.
15. Costco's settlement of this matter does not constitute an
admission of staff's charges as set forth in paragraphs 4 through 12
above.
AGREEMENT OF THE PARTIES
16. Under the CPSA, the Commission has jurisdiction over the matter
involving the Trash Cans and over Costco.
17. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Costco or a
determination by the Commission that Costco violated the CPSA's
reporting requirements.
18. In settlement of staff's charges, and to avoid the cost,
distraction, delay, uncertainty, and inconvenience of protracted
litigation, Costco shall pay a civil penalty in the amount of $3.85
million (US $3,850,000) within thirty (30) calendar days after
receiving 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 Costco under this
Agreement. Failure to make such payment by the date specified in the
Commission's Order shall constitute Default.
19. All unpaid amounts, if any, due and owing under the Agreement
shall constitute a debt due and immediately owing by Costco to the
United States, and interest shall accrue and be paid by Costco at the
federal legal rate of interest set forth at 28 U.S.C. Sec. 1961(a) and
(b) from the date of Default, until all amounts due have been paid in
full (hereinafter ``Default Payment Amount'' and ``Default Interest
Balance''). Costco 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 Costco agrees not to contest,
and hereby waives and
[[Page 50649]]
discharges any defenses, to any collection action undertaken by the
United States, or its agents or contractors, pursuant to this
paragraph. Costco shall pay the United States all reasonable costs of
collection and enforcement under this paragraph, respectively,
including reasonable attorney's fees and expenses.
20. After staff receives this Agreement executed on behalf of
Costco, 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 C.F.R. Sec. 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
C.F.R. Sec. 1118.20(f).
21. 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 C.F.R. Sec. 1118.20(h). Upon the later of: (i)
the Commission's final acceptance of this Agreement and service of the
accepted Agreement upon Costco, and (ii) the date of the issuance of
the final Order, this Agreement shall be in full force and effect and
shall be binding upon the parties.
22. Effective upon the later of: (i) the Commission's final
acceptance of this Agreement and service of the accepted Agreement upon
Costco, and (ii) the date of the issuance of the final Order, for good
and valuable consideration, Costco 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 Costco 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.
23. Costco has and will maintain a compliance program designed to
achieve compliance with the CPSA, and which shall contain the following
elements: (i) written standards, policies and procedures, including
those designed to ensure that information relevant to CPSA compliance
is conveyed effectively to personnel responsible for compliance,
whether or not an injury is referenced; (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 CPSA compliance-related policies and procedures to all
appropriate employees through regular training programs or otherwise;
(iv) Costco's senior management participation in a compliance committee
responsible for the review and oversight of compliance matters related
to the CPSA; (v) retention of CPSA compliance-related records for at
least five (5) years, and availability of such records to staff upon
request, provided that retention of cumulative copies of such records
shall not be required; and (vi) procedures designed to ensure that:
information required to be disclosed by Costco to the Commission is
recorded, processed and reported in accordance with applicable law;
that all reporting made to the Commission is timely, truthful,
complete, accurate and in accordance with applicable law; and that
prompt disclosure is made to Costco's management of any significant
deficiencies or material weaknesses in the design or operation of such
internal controls that are reasonably likely to affect adversely, in
any material respect, Costco's ability to record, process and report to
the Commission in accordance with applicable law.
24. Upon reasonable request of staff, Costco shall provide written
documentation of its internal controls and procedures, including, but
not limited to, the effective dates of the procedures and improvements
thereto. Costco shall cooperate fully and truthfully with staff and
shall make available relevant non-privileged information and materials,
and personnel deemed necessary by staff to evaluate Costco's compliance
with the terms of the Agreement.
25. The parties acknowledge and agree that the Commission may
publicize the terms of the Agreement and Order.
26. Costco 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 Costco, enforceable against Costco in
accordance with its terms. Costco will not directly or indirectly
receive any reimbursement, indemnification, insurance-related payment
or other payment in connection with the civil penalty to be paid by
Costco pursuant to the Agreement and Order.
27. The signatories represent that they are authorized to execute
this Agreement.
28. The Agreement is governed by the law of the United States.
29. The Agreement and Order shall apply to, and be binding upon,
Costco and each of its successors, transferees, and assigns, and a
violation of the Agreement or Order may subject Costco, and each of its
successors, transferees, and assigns, to appropriate legal action.
30. The Agreement and the Order constitute the complete agreement
between the parties on the subject matter contained therein. 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 C.F.R. Sec.
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 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 Costco
agree in writing that severing the provision materially affects the
purpose of the Agreement and the Order.
COSTCO WHOLESALE CORPORATION
Dated:-----------------------------------------------------------------
By:--------------------------------------------------------------------
John Sullivan, Senior Vice President and General Counsel, Costco
Wholesale Corp.
Dated: September 18, 2018
By:--------------------------------------------------------------------
Eric Rubel, Arnold & Porter Kaye Scholer, 601 Massachusetts Ave. N.W.,
Washington, D.C. 20001-3743, Counsel to Costco Wholesale Corp.
U.S. CONSUMER PRODUCT SAFETY COMMISSION
Patricia M. Hanz, General Counsel
Mary B. Murphy, Assistant General Counsel
Dated: September 20, 2018
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By:--------------------------------------------------------------------
Michele Melnick, Trial Attorney, Division of Compliance, Office of the
General Counsel
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
In the Matter of:
COSTCO WHOLESALE CORPORATION
CPSC Docket No.: 19-C0001
ORDER
Upon consideration of the Settlement Agreement entered into between
Costco Wholesale Corporation (``Costco'') and the U.S. Consumer Product
Safety Commission (``Commission''), and the Commission having
jurisdiction over the subject matter and over the parties, 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 Costco shall comply with the terms of the
Settlement Agreement and shall pay a civil penalty in the amount of
$3.85 million dollars ($3,850,000), within thirty (30) days after
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 Costco to make
the foregoing payment when due, interest on the unpaid amount shall
accrue and be paid by Costco at the federal legal rate of interest set
forth at 28 U.S.C. Sec. 1961(a) and (b). If Costco fails to make such
payment or to comply in full with any other provision of 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
October, 2018.
By Order of the Commission:
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Alberta Mills, Secretary,
U.S. Consumer Product Safety Commission.
[FR Doc. 2018-21869 Filed 10-5-18; 8:45 am]
BILLING CODE 6355-01-P
