[Federal Register: July 12, 2006 (Volume 71, Number 133)]
[Proposed Rules]
[Page 39248-39249]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jy06-26]
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CONSUMER PRODUCT SAFETY COMMISSION
16 CFR Part 1119
Civil Penalty Factors
AGENCY: Consumer Product Safety Commission.
ACTION: Proposed new interpretative rule.
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SUMMARY: Sections 20(b) and (c) of the Consumer Product Safety Act, 15
U.S.C. 2069(b), (c), require certain factors to be considered in
assessing and compromising penalties. A new interpretative rule is
proposed that identifies and explains other factors that may be
considered by the Commission and staff in evaluating the
appropriateness and amount of a civil penalty.\1\
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\1\ Commissioner Thomas H. Moore filed a statement which is
available from the Office of the Secretary or on the Commission's
Web site at http://www.cpsc.gov.
DATES: The Office of the Secretary must receive written comments not
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later than August 11, 2006.
ADDRESSES: Written comments should be captioned ``Civil Penalties'' and
e-mailed to the Office of the Secretary at cpsc-os@cpsc.gov. Written
comments may also be sent to the Office of the Secretary, Consumer
Product Safety Commission, 4330 East West Highway, Bethesda, Maryland
20814 or by facsimile at (301) 504-0127.
FOR FURTHER INFORMATION CONTACT: John Gibson Mullan, Assistant
Executive Director, Compliance and Field Operations at 301-504-7626.
SUPPLEMENTARY INFORMATION: Proposed new part 1119 describes factors the
Commission and staff may consider in determining the appropriateness
and amount of a civil penalty for violations of section 19(a), which
includes the failure to furnish information required by section 15(b).
The CPSA provides that a knowing violation of the prohibited acts
enumerated in section 19(a) could subject a firm to a civil penalty
under section 20 of the CPSA. In determining the amount of a civil
penalty by commencing an action pursuant to section 20(b) or
compromising a civil penalty claim under section 20(c), the Commission
and staff consider five statutory factors set forth in the CPSA: The
nature of the product defect, the severity of the risk of injury, the
number of defective products distributed, the occurrence or absence of
injury, and the appropriateness of the penalty in relation to the size
of the business of the person charged. The proposed regulation
describes that the Commission and staff may also consider, as
appropriate, one or more of the following factors in determining the
appropriateness and amount of a civil penalty: (1) A firm's previous
record of compliance with CPSA requirements; (2) timeliness of a firm's
response to relevant information; (3) safety and compliance monitoring;
(4) cooperation and good faith; (5) economic gain from any delay or
non-compliance with CPSC safety or reporting requirements; (6) a
product's failure rate; and (7) any other pertinent factors.
The Commission is proposing this section to provide further clarity
and transparency in how it determines civil penalty amounts in
individual civil penalty determinations. The Commission believes that
adoption of this proposed regulation will result in a better
understanding by the public of the Commission's approach to determining
the appropriateness and amount of a civil penalty.
List of Subjects in 16 CFR Part 1119
Administrative practice and procedure, Business and Industry,
Consumer protection, Reporting and recordkeeping requirements.
Accordingly, 16 CFR part 1119 is proposed to be added to read as
follows:
PART 1119--CIVIL PENALTY FACTORS
Sec.
Sec. 1119.1 Factors considered in determining civil penalties.
Authority: 15 U.S.C. 2058, 2063, 2064, 2067(b), 2068, 2069,
2076(e), 2084.
Sec. 1119.1 Factors considered in determining civil penalties.
(a) Statutory Factors. Section 20 of the Consumer Product Safety
Act (CPSA) specifies five factors that shall be considered by the
Commission in determining the amount of a civil penalty to be sought
for violations of section 19(a), which includes failure to furnish
information to the Commission as required by section 15(b). Those
factors are: The nature of the product defect, the severity of the risk
of injury, the number of defective products distributed, the occurrence
or absence of injury, and the appropriateness of [the]
[[Page 39249]]
penalty in relation to the size of the business of the person charged.
The Act also allows the Commission to compromise any civil penalty
under section 20. In determining the amount of a penalty settlement,
the Commission is instructed to consider the same five factors.
(b) Other factors. In determining the appropriateness and the
amount of any civil penalty to be pursued in negotiations when a
violation of the reporting requirements of section 15(b) or other
requirements of section 19(a) have occurred, in addition to the
statutory factors set forth in section 20 of the CPSA, the Commission
and the staff may consider, as appropriate, one or more of the
following:
(1) Previous record of compliance. The Commission and the staff may
consider whether the firm has had previous safety, reporting or other
violations, and, if so, whether the firm has taken action to address
previous violations and to improve compliance with applicable CPSC
safety requirements.
(2) Timeliness of response. With regard to the matter under review,
the Commission and the staff may consider how quickly the firm
responded to relevant information it obtained (or reasonably should
have obtained), and the extent to which any injuries might reasonably
have been prevented by more timely reporting or other required action.
(3) Safety and compliance monitoring. The Commission and the staff
may consider the extent to which the firm has adopted a system for
collecting and analyzing safety information and for evaluating
reporting issues (including such system's application in the matter
under review).
(4) Cooperation and good faith. The Commission and the staff may
consider the degree to which the firm cooperated and acted in good
faith to address reporting or other product safety violations or other
issues, both generally and with regard to the specific matter under
review.
(5) Economic gain from non-compliance. The Commission and the staff
may consider the extent to which the firm profited or otherwise
benefitted from an improper delay in reporting or complying with other
applicable CPSC safety requirements.
(6) Product failure rate. With regard to the product and matter
under review, the Commission and the staff may consider the reasonably
expected rate of failure for that type of product over time.
(7) Any other pertinent factors. The Commission and staff may
consider any other pertinent factors.
Dated: July 7, 2006.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. E6-10963 Filed 7-11-06; 8:45 am]
BILLING CODE 6355-01-P