Cybex International, Inc., Provisional Acceptance of a Settlement Agreement and Order, 9911-9914 [2021-03121]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 86, Number 30 (Wednesday, February 17, 2021)]
[Notices]
[Pages 9911-9914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-03121]


=======================================================================
-----------------------------------------------------------------------

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 21-C0001]


Cybex International, 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 that 
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 Cybex International, Inc., 
containing a civil penalty in the amount of seven million, nine hundred 
and fifty thousand dollars ($7,950,000), subject to the terms and 
conditions of the Settlement Agreement.\1\
---------------------------------------------------------------------------

    \1\ The Commission voted 3-0-1 to provisionally accept the 
proposed Settlement Agreement and Order regarding Cybex 
International, Inc. Acting Chairman Adler, Commissioners Kaye and 
Baiocco voted to provisionally accept the Settlement Agreement and 
Order. Commissioner Feldman did not vote on this matter.

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 Division of the Secretariat by March 4, 2021.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to Comment 21-C0001, Division of the 
Secretariat, Consumer Product Safety Commission, Room 820, 4330 East-
West Highway, Bethesda, MD 20814; telephone: (301) 504-7479; email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Leah Wade Ippolito, Supervisory 
Attorney, Division of Enforcement and Litigation, Office of Compliance 
and Field Operations, Consumer Product Safety Commission, 4330 East-
West Highway, Bethesda, Maryland 20814-4408; [email protected].

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

    Dated: February 11, 2021.
Alberta E. Mills,
Secretary.

United States of America

Consumer Product Safety Commission

    In the Matter of: CYBEX INTERNATIONAL, INC., CPSC Docket No.: 21-
C0001

Settlement Agreement

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
2051-2089 (``CPSA'') and 16 CFR 1118.20, Cybex International, Inc. 
(``Cybex''), 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. 2051-2089. By executing the 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.
    3. Cybex is a corporation, organized and existing under the laws of 
the state of New York, with its principal place of business in 
Rosemont, Illinois.

Staff Charges

    4. Between 1996 and 2008, Cybex manufactured, distributed and 
offered for sale in the United States approximately 4,800 Model VR2, 
VR2TA, Eagle, and VR3 Arm Curl Machines (``Arm Curl'').
    5. Between 1989 and 2009, Cybex manufactured, distributed and 
offered for sale in the United States approximately 15,000 Model 5340 
and 5341 Smith Press Machines (``Smith Press.'')
    6. The Arm Curl and Smith Press Machines (collectively, the 
``Subject Products'') are ``consumer products'' that were 
``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). 
Cybex is a ``manufacturer'' and ``distributor'' of the

[[Page 9912]]

Subject Products, as such terms are defined in sections 3(a)(7) and 
(11) of the CPSA, 15 U.S.C. 2052(a)(7) and (11).
Violation of CPSA Section 19(a)(4)
Arm Curl Machines
    7. The Arm Curl Machines contain a defect which could create a 
substantial product hazard and create an unreasonable risk of serious 
injury or death because the weld that connects the swivel handle to the 
arm of the machine can fatigue and fail, causing the handle to separate 
unexpectedly from the frame of the machine. This separated handle can 
strike the user in the face.
    8. Between mid-2002 (when Cybex was able to retrieve incident 
information) and June 2015, Cybex received 85 reports of broken 
handles, including incidents that resulted in lacerations requiring 
stitches and one grievous bodily injury involving a consumer who 
permanently lost vision in one eye when the handle separated during use 
and struck the consumer in the face.
    9. Despite information that reasonably supported the conclusion 
that the Arm Curl Machine contained a defect that could create a 
substantial product hazard or created an unreasonable risk of serious 
injury or death, Cybex did not immediately report to CPSC.
    10. In June 2015, Cybex filed a Full Report with the Commission 
under 15 U.S.C. 2064(b) concerning the Arm Curl Machines.
    11. Cybex and the Commission jointly announced a Fast Track recall 
of the Arm Curl Machines on August 25, 2015. The press release 
announcing the recall noted that the swivel handles can break off from 
the frame causing users to hit themselves in the face or head, posing 
an impact injury hazard.
Smith Press Machines
    12. The Smith Press Machines contain a defect which could create a 
substantial product hazard and create an unreasonable risk of serious 
injury or death because the weight bar can fall, posing serious impact 
injury hazards to the user.
    13. Between late 1991 and January 2018, Cybex received 27 reports 
of injuries associated with the Smith Press Machine, including grievous 
bodily injuries such as paralysis and spinal fracture.
    14. Despite information that reasonably supported the conclusion 
that the Smith Press Machines contained a defect that could create a 
substantial product hazard or created an unreasonable risk of serious 
injury or death, Cybex did not immediately report to CPSC.
    15. In January 2018, Cybex filed a Full Report with the Commission 
under 15 U.S.C. 2064(b) concerning the Smith Press Machines.
    16. Cybex and the Commission jointly announced a Fast Track recall 
of Smith Press Machines on August 29, 2018. The press release 
announcing the recall noted that the weight bar can fall, posing 
serious injury hazards to the user.
Failure to Timely Report
    17. Despite having information reasonably supporting the conclusion 
that the Subject Products contained a defect or created an unreasonable 
risk of serious injury or death, Cybex 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), in violation of 
section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
    18. Because the information in Cybex's possession about the Subject 
Products constituted actual and presumed knowledge, Cybex 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).
    19. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Cybex 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 Cybex

    20. This Agreement does not constitute an admission by Cybex to the 
staff's charges set forth in paragraphs 4 through 19 above, and Cybex 
specifically refutes the staff's findings that Cybex did not timely 
file section 15(b) reports on the Subject Products.
    21. The Arm Curl and Smith Press have not been sold since 2008 and 
2009 respectively. The Subject Products were designed, manufactured and 
sold by prior ownership of the Cybex business (which was sold in 2016 
and again in 2019). The original owners of Cybex recalled and 
retrofitted the Arm Curl in 2015 and the CPSC's investigation was 
underway when the Company was sold in 2016. After assessing the legacy 
business and engaging in discussions with CPSC, the new owner of Cybex 
determined that it was required to submit a report to the CPSC 
regarding the Smith Press in connection with the CPSC's ongoing 
investigation.
    22. Due to the complexity of consumer interaction with and use of 
exercise equipment, and the critical role of fitness center owners in 
monitoring users and maintaining the equipment, consumer reports can be 
difficult for a manufacturer to obtain and evaluate, may not be 
received promptly, and may not include complete and accurate 
information.
    23. With regard to the Smith Press, there is a risk of users 
failing to fully seat a weighted bar across the pins when racking the 
bar, thereby causing the bar to fall. Further, the equipment had 
extensive product safety and usage labeling and a safety stop that 
users frequently failed to activate while exercising. Racking systems 
similar to the Smith Press racking system were widely used throughout 
the industry during the time the Smith Press was sold and in use. Cybex 
believes that the number of reports of injuries associated with the 
weight bars was infinitesimally small in view of the millions of uses 
of this equipment.
    24. With regard to the Arm Curl, over time the arm of certain of 
the machines experienced weld fatigue, despite the equipment passing 
rigorous and extensive product load and endurance testing. Cybex 
believes that the number and extent of injuries were limited.
    25. At all relevant times, Cybex had a product safety compliance 
program, including quality control personnel and a product safety 
testing program. Following the sale of Cybex in 2016, new ownership 
implemented improvements to that compliance program to further ensure 
that it is consistent with industry standards.
    26. Cybex enters into this Agreement solely to settle this matter 
without the delay and expense of litigation. Cybex does not admit to 
any fault, liability, violation of any law, or wrongdoing with respect 
to the Arm Curl or Smith Press machines, and Cybex's willingness to 
enter into this Agreement and Order does not constitute, nor is it 
evidence of, an admission by it of any fault, liability, violation of 
any law, or any wrongdoing.

Agreement of the Parties

    27. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Subject Products and over Cybex.
    28. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Cybex or a 
determination by the Commission that Cybex violated the CPSA's 
reporting requirements.
    29. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, Cybex shall pay a civil penalty in the 
amount of seven million,

[[Page 9913]]

nine hundred and fifty thousand dollars ($7,950,000) 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 Cybex 
under this Agreement. Failure to make such payment by the date 
specified in the Commission's final Order shall constitute Default.
    30. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Cybex to the 
United States, and interest shall accrue and be paid by Cybex 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''). Cybex 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 Cybex 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. Cybex shall pay the United States all reasonable 
costs of collection and enforcement under this paragraph, respectively, 
including reasonable attorney's fees and expenses.
    31. After staff receives this Agreement executed on behalf of 
Cybex, staff shall promptly submit the Agreement to the Commission for 
provisional acceptance. Promptly following provisional acceptance of 
the Agreement by the Commission, the Agreement shall be placed on the 
public record and published in the Federal Register, in accordance with 
the procedures set forth in 16 CFR 1118.20(e). If the Commission does 
not receive any written request not to accept the Agreement within 
fifteen (15) calendar days, the Agreement shall be deemed finally 
accepted on the 16th calendar day after the date the Agreement is 
published in the Federal Register, in accordance with 16 CFR 
1118.20(f).
    32. This Agreement is conditioned upon, and subject to, the 
Commission's final acceptance, as set forth above, and it is subject to 
the provisions of 16 CFR 1118.20(h). Upon the later of: (i) 
Commission's final acceptance of this Agreement and service of the 
accepted Agreement upon Cybex, 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.
    33. Effective upon the later of: (i) The Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Cybex and (ii) and the date of issuance of the final Order, for good 
and valuable consideration, Cybex 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 Cybex 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.
    34. Cybex shall maintain a compliance program designed to ensure 
compliance with the CPSA with respect to any consumer product imported, 
manufactured, distributed or sold by Cybex, and which shall contain the 
following elements:
    (i) Written standards, policies and procedures, including those 
designed to ensure that information that may relate to or impact CPSA 
compliance is conveyed effectively to personnel responsible for CPSA 
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 compliance-related 
policies and procedures regarding the CPSA to all applicable employees 
through training programs or otherwise;
    (iv) Cybex's senior management responsibility for, and Cybex's 
general board oversight, consistent with its policies and procedures 
of, CPSA compliance; and
    (v) retention of all CPSA compliance-related records for at least 
five (5) years, and availability of such records to CPSC staff upon 
request.
    35. Cybex shall maintain and enforce a system of internal controls 
and procedures designed to ensure that, with respect to all consumer 
products imported, manufactured, distributed or sold by Cybex:
    (i) Information required to be disclosed by Cybex to the Commission 
is recorded, processed and reported in accordance with applicable law;
    (ii) all reporting made to the Commission is timely, truthful, 
complete, accurate and in accordance with applicable law; and
    (iii) prompt disclosure is made to Cybex'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, Cybex's ability to record, 
process and report to the Commission in accordance with applicable law.
    36. Upon request of staff, Cybex shall provide written 
documentation of its internal controls and procedures, including, but 
not limited to, the effective dates of the procedures and improvements 
thereto. Cybex shall cooperate fully and truthfully with staff and 
shall make available all non-privileged information and materials, and 
personnel deemed necessary by staff to evaluate Cybex's compliance with 
the terms of the Agreement.
    37. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    38. Cybex 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 Cybex, enforceable against Cybex in accordance 
with its terms. The individuals signing the Agreement on behalf of 
Cybex represent and warrant that they are duly authorized by Cybex to 
execute the Agreement.
    39. The signatories represent that they are authorized to execute 
this Agreement.
    40. The Agreement is governed by the laws of the United States.
    41. The Agreement and the Order shall apply to, and be binding 
upon, Cybex and each of its successors, transferees, and assigns; and a 
violation of the Agreement or Order may subject Cybex, and each of its 
successors, transferees, and assigns, to appropriate legal action.
    42. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    43. 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

[[Page 9914]]

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.
    44. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
CFR 1118.20(h). The Agreement may be executed in counterparts.
    45. 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 Cybex agree in writing that severing the provision materially 
affects the purpose of the Agreement and the Order.

CYBEX INTERNATIONAL, INC.

    Dated: 1/25/2021.

 By: /s/---------------------------------------------------------------

Kelly Michelle Kaiser,

Secretary, Cybex International, Inc.

    Dated: 1/25/2021.

By: /s/----------------------------------------------------------------

Kathleen M. Sanzo,

Counsel to Cybex International, Inc.

U.S. Consumer Product Safety Commission

    Dated: 1/25/2021.

By: /s/----------------------------------------------------------------

Leah Wade Ippolito,

Supervisory Attorney, Office of Compliance and Field Operations.

United States of America

Consumer Product Safety Commission

    In the Matter of: CYBEX INTERNATIONAL, INC. CPSC Docket No.:

Order

    Upon consideration of the Settlement Agreement entered into between 
Cybex International Inc. (``Cybex''), and the U.S. Consumer Product 
Safety Commission (``Commission''), and the Commission having 
jurisdiction over the subject matter and over Cybex, 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 Cybex shall comply with all terms of the 
Settlement Agreement including payment of a civil penalty in the amount 
of seven million, nine hundred and fifty thousand dollars ($7,950,000), 
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 Cybex to make the foregoing payment when due, 
interest on the unpaid amount shall accrue and be paid by Cybex at the 
federal legal rate of interest set forth at 28 U.S.C. 1961(a) and (b). 
If Cybex 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 11 day 
of February, 2021.

    By order of the commission:

 /s/-------------------------------------------------------------------

Albert Mills,

Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. 2021-03121 Filed 2-16-21; 8:45 am]
BILLING CODE 6355-01-P