Settlement agreements: Family Dollar, Inc.,

[Federal Register: July 13, 2006 (Volume 71, Number 134)]

[Notices]

[Page 39673-39675]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr13jy06-62]

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 06-C0004]

Family Dollar, Inc., a Corporation, 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 Family Dollar, a corporation, containing a civil penalty of $100,000.

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 July 28, 2006.

ADDRESSES: Persons wishing to comment on this Settlement Agreement should sent written comments to the Comment 06-C0004, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Howard N. Tarnoff, Trial Attorney, Office of Compliance, Consumer Product Safety Commission, Washington, DC 20207; telephone (301) 504-7589.

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

Dated: July 7, 2006. Todd A. Stevenson, Secretary.

In the Matter of Family Dollar, Inc., a Corporation; Settlement Agreement and Order

1. This Settlement Agreement is made by and between the staff (the ``staff'') of the U.S. Consumer Product Safety Commission (the ``Commission'') and Family Dollar, Inc. (``Family Dollar''), a corporation, in accordance with 16 CFR 1118.20 of the Commission's procedures for Investigations, Inspections, and Inquiries under the Consumer Product Safety Act (``CPSA''). This

   [[Page 39674]]

   Settlement Agreement and the incorporated attached Order settle the staff's allegations set forth below.

   The Parties

2. The Commission is an independent federal regulatory agency responsible for the enforcement of the Consumer Product Safety Act, 15 U.S.C. 2051-2084.

3. Family Dollar is a corporation organized and existing under the laws of the State of Delaware with its principal corporate office located in Matthews, North Carolina. At all times relevant herein, Family Dollar sold, or offered for sale, consumer products.

   Staff Allegations

4. From approximately November 2003-February 2004, Family Dollar sold approximately 8,976 electric blankets (models BST-03-A-F; BST- 03-A-K; BST-03-A-Q; BST-03-A-T) that it purchased from International Home Fashions, Inc. (a/k/a Bilt-Safe Technologies, Inc.) [``IHF'']. These electric blankets will hereinafter be referred to as ``the Electric Blankets''.

5. The Electric Blankets are ``consumer products'' and, at the times relevant herein, Family Dollar was a ``retailer'' of ``consumer products,'' which were ``distributed in commerce'' as those terms are defined in sections 3(a)(1), (6), (11), and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (6), (11), and (12).

6. The Electric Blankets are defective because they have a tendency to overheat and catch on fire.

7. Between December 2003 and June 2004, Family Dollar learned about approximately 40 reports of malfunction with the Electric Blankets. Among these incidents, there were numerous alleged instances of fire, scorching, or smoke damage to consumers' property and nine alleged personal injuries. The alleged injuries consisted mainly of minor skin burns. Family Dollar did not inform the Commission about these incidents until September 1, 2004, when it submitted a Section 15 report (in response to the staff's request), and August 25, 2005, when it submitted additional information (again in response to the staff's request).

8. By February 2004, Family Dollar had decided to undertake a consumer level recall of the Electric Blankets. Family Dollar stopped selling the Electric Blankets in mid-February 2004, and it posted a recall poster at its retail outlets in early-March 2004.

9. Although Family Dollar had obtained sufficient information to reasonably support the conclusion that the Electric Blankets contained a defect which could create a substantial product hazard, or created an unreasonable risk of serious injury or death, long before September 1, 2004, it failed to immediately inform the Commission of such defect or risk as required by sections 15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3). In failing to do so, Family Dollar ``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. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Family Dollar is subject to civil penalties for its failure to make a timely report pursuant to section 15(b) of the CPSA, 15 U.S.C. 2064(b).

    Response of Family Dollar

11. Family Dollar denies the allegations of the staff that the Electric Blankets contain a defect which could create a substantial product hazard, or create an unreasonable risk of serious injury or death, and denies that it violated the reporting requirements of section 15(b) of the CPSA, 15 U.S.C. 2064(b). Family Dollar further did not ``knowingly'' violate any reporting requirements under the CPSA.

12. Family Dollar further states that, when it first learned of allegations of blanket failures in December 2003, it consulted IHF, the party most knowledgeable about the design and operation of the blankets, to ascertain the severity of the problem. IHF responded that its contacts with customers who made the allegations indicated that the blankets got hot, rather than caught fire.

13. In February 2004, after receiving reports of additional alleged incidents, Family Dollar stopped the sale of the blankets and again consulted with IHF about the significance of the incidents. IHF expressly represented that its legal counsel had advised that neither the number nor the severity of the reported incidents warranted a recall, and that internal mechanisms in the controllers of blankets involved in incidents appeared to have shut the controllers off before serious damage occurred. Nevertheless, Family Dollar, as a matter of good customer relations, decided to recall the blankets from consumers.

14. At the time it considered whether to conduct the recall, Family dollar also reviewed the information available to determine whether it was required to report that information to the Commission. Based on that information and IHF's representations, it concluded that it did not have an obligation to report.

15. To effectuate its recall, Family Dollar displayed posters announcing the recall in its stores in March 2004. When the Commission and IHF announced the recall of the Electric Blankets in November 2004, Family Dollar again displayed posters announcing the recall in its stores.

    Agreement of the Parties

16. The Commission has jurisdiction over this matter and over Family Dollar under the CPSA, 15 U.S.C. 2051-2084.

17. In settlement of the staff's allegations, Family Dollar agrees to pay a civil penalty of one hundred thousand dollars ($100,000). This payment shall be made by check payable to the order of the United States Treasury within twenty (20) calendar days of service upon Family Dollar of the Final Order of the Commission accepting this Settlement Agreement.

18. The parties enter into this Settlement Agreement for settlement purposes only. The Settlement Agreement does not constitute an admission by Family Dollar or a determination by the Commission that Family Dollar has violated the CPSA's reporting requirements.

19. Upon provisional acceptance of this Settlement Agreement and Order by the Commission, the Commission shall place this Agreement and Order on the public record and shall publish it in the Federal Register in accordance with the procedure set forth in 16 CFR 1118.20(e). If the Commission does not receive any written request not to accept the Settlement Agreement and Order within 15 days, the Agreement and Order shall be deemed finally accepted on the 16th day after the date it is published in the Federal Register.

20. Upon final acceptance of this Settlement Agreement by the Commission and issuance of the Final Order, Family Dollar knowingly, voluntarily and completely waives any rights it may have in this matter to the following: (i) An administrative or judicial hearing; (ii) judicial review or other challenge or contest of the validity of the Commission's actions; (iii) a determination by the Commission as to whether Family Dollar failed to comply with the CPSA and its underlying regulations; (iv) a statement of findings of fact and conclusions of law; and (v) any claims under the Equal Access to Justice Act.

21. The Commission may publicize the terms of the Settlement Agreement and Order.

22. This Settlement Agreement and Order shall apply to, and be binding upon, Family Dollar and each of its successors and assigns.

23. The Commission's Order in this matter is issued under the provisions of the CPSA, 15 U.S.C. 2051-2084, and a violation of the Order may subject Family Dollar to appropriate legal action.

24. This Settlement Agreement may be used in interpreting the Order. Agreements, understandings, representations, or interpretations made outside of this Settlement Agreement and Order may not be used to vary or to contradict its terms.

25. This Settlement Agreement and Order shall not be waived, changed, amended, modified, or otherwise altered without written agreement thereto executed by the party against whom such amendment, modification, alteration, or waiver is sought to be enforced and approval by the Commission.

26. If, after the effective date hereof, any provision of this Settlement Agreement and Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of the Settlement Agreement and Order, such provision shall be fully severable. The rest of the Settlement Agreement and Order shall remain in full effect, unless the Commission and Family Dollar determine that severing the provision materially changes the purpose of the Settlement Agreement and Order.

    Family Dollar, Inc.

    June 8, 2006.

    Janet G. Kelley,

    Senior Vice President, General Counsel, & Secretary, Family Dollar, Inc., 10401 Monroe Road, Matthews, North Carolina 28105.

    June 12, 2006.

    Michael J. Gidding,

    Brown & Gidding, P.C., 3201 New Mexico Ave., NW., Suite 24, Washington, DC 20016, Counsel for Family Dollar, Inc.

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    U.S. Consumer Product Safety Commission

    John Gibson Mullan, Director, Office of Compliance and Field Operations.

    Ronald G. Yelenik, Acting Director, Legal Division, Office of Compliance and Field Operations.

    June 13, 2006.

    Howard N. Tarnoff,

    Trial Attorney, Legal Division, Office of Compliance and Field Operations.

    In the Matter of Family Dollar, Inc., a Corporation; Order

    Upon consideration of the Settlement Agreement entered into between Family Dollar, Inc. (``Family Dollar'') and the staff of the U.S. Consumer Product Safety Commission (the ``Commission''), and the Commission having jurisdiction over the subject matter and over Family Dollar, and it appearing that the Settlement Agreement is in the public interest, it is

    I

    Ordered that the Settlement Agreement be, and hereby is, accepted; and it is

    II

    Furthered Ordered that Family Dollar shall pay a civil penalty of one hundred thousand dollars ($100,000). This payment shall be made by check payable to the order of the United States Treasury within twenty (20) calendar days of service upon Family Dollar of the Final Order of the Commission. Upon the failure of Family Dollar to make this payment in the prescribed time, interest on the outstanding balance shall accrue and be paid at the federal legal rate of interest under the provisions of 28 U.S.C. 1961(a) and (b).

    Provisionally accepted and Provisional Order issued on the 7th day of July 2006.

    By Order of the Commission.

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

    [FR Doc. 06-6168 Filed 7-12-06; 8:45 am]

    BILLING CODE 6355-01-M