[Federal Register: April 16, 2009 (Volume 74, Number 72)]
[Notices]
[Page 17640-17641]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16ap09-24]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 09-C0014]
Kidz World, Inc., d/b/a High Energy USA, 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 16 CFR 1118.20(e).
Published below is a provisionally-accepted Settlement Agreement with
Kidz World, Inc., d/b/a High Energy USA, containing a civil penalty of
$25,000.00.
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 May 1, 2009.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 09-C0014, Office of the
Secretary, Consumer Product Safety Commission, 4330 East West Highway,
Room 502, Bethesda, Maryland 20814-4408.
FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney,
Division of Compliance, Office of the General Counsel, Consumer Product
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7587.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: April 9, 2009.
Todd A. Stevenson,
Secretary.
Settlement Agreement
1. In accordance with 16 CFR 1118.20, Kidz World, Inc., d/b/a High
Energy USA (``Kidz World'') and the staff (``Staff'') of the United
States Consumer Product Safety Commission (``Commission'') enter into
this Settlement Agreement (``Agreement''). The Agreement and the
incorporated attached Order (``Order'') settle the Staff's allegations
set forth below.
Parties
2. The Commission is an independent federal regulatory agency
established pursuant to, and responsible for the enforcement of the
Consumer Product Safety Act, 15 U.S.C. 2051-2089 (``CPSA'').
3. Kidz World is a corporation organized and existing under the
laws of the State of New York, with its principal offices located in
New York, NY. Kidz World is an importer of apparel.
Staff Allegations
4. From September 2007 to October 2007, Kidz World imported and/or
sold to U.S. retailers about 5,000 boy's hooded sweatshirts with
drawstrings (``Drawstring Sweatshirts'').
5. The Drawstring Sweatshirts are ``consumer product[s],'' and, at
all times relevant hereto, Kidz World was a ``manufacturer'' of those
consumer products, which were ``distributed in commerce,'' as those
terms are defined in CPSA sections 3(a), (5), (8), and (11), 15 U.S.C.
2052(a), (5), (8), and (11).
6. In February 1996, the Staff issued the Guidelines for
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help
prevent children from strangling or entangling on neck and waist
drawstrings. The Guidelines state that drawstrings can cause, and have
caused, injuries and deaths when they catch on items such as playground
equipment, bus doors, or cribs. In the Guidelines, the Staff recommends
that there be no hood and neck drawstrings in children's upper
outerwear sized 2T to 12.
7. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-97,
that incorporated the Guidelines. The Guidelines state that firms
should be aware of the hazards and should be sure garments they sell
conform to the voluntary standard.
8. On May 19, 2006, the Commission posted on its Web site a letter
from the Commission's Director of the Office of Compliance to
manufacturers, importers, and retailers of children's upper outerwear.
The letter urges them to make certain that all children's upper
outerwear sold in the United States complies with ASTM F1816-97. The
letter states that the Staff considers children's upper outerwear with
drawstrings at the hood or neck area to be defective and to present a
substantial risk of injury to young children under Federal Hazardous
Substances Act (``FHSA'') section 15(c), 15 U.S.C. 1274(c). The letter
also notes the CPSA's section 15(b) reporting requirements.
9. Kidz World reported to the Commission there had been no
incidents or injuries involving Drawstring Sweatshirts.
10. Kidz World's importation and distribution in commerce of the
Drawstring Sweatshirts did not meet the Guidelines or ASTM F1816-97,
failed to comport with the Staff's May 2006 defect notice, and posed a
strangulation hazard to children.
11. On March 28, 2008, the Commission and Kidz World announced a
recall of the Drawstring Sweatshirts. The recall informed consumers
that they should immediately remove the drawstrings to eliminate the
hazard.
12. Kidz World had presumed and actual knowledge that the
Drawstring Sweatshirts distributed in commerce posed a strangulation
hazard and presented a substantial risk of injury to children under
FHSA section 15(c)(1), 15 U.S.C. 1274(c)(1). Kidz World had obtained
information that reasonably supported the conclusion that the
Drawstring Sweatshirts contained a defect that could create a
substantial product hazard or that they created an unreasonable risk of
serious injury or death. CPSA sections 15(b)(3) and (4), 15 U.S.C.
2064(b)(3) and (4), required Kidz World to immediately inform the
Commission of the defect and risk.
13. Kidz World knowingly failed to immediately inform the
Commission about the Drawstring Sweatshirts as required by CPSA
sections 15(b)(3) and (4), 15 U.S.C. 2064(b)(3) and (4), and as the
term ``knowingly'' is defined in CPSA section 20(d), 15 U.S.C. 2069(d).
[[Page 17641]]
This failure violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4).
Pursuant to CPSA section 20, 15 U.S.C. 2069, this failure subjected
Kidz World to civil penalties.
Kidz World Response
14. Kidz World denies the Staff's allegations that Kidz World
violated the CPSA.
Agreement of the Parties
15. Under the CPSA, the Commission has jurisdiction over this
matter and over Kidz World.
16. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Kidz World, or
a determination by the Commission, that Kidz World has knowingly
violated the CPSA.
17. In settlement of the Staff's allegations, Kidz World shall pay
a civil penalty in the amount of twenty-five thousand dollars
($25,000.00) in three (3) installments as follows: The first
installment payment of $8,334.00 shall be paid within twenty (20)
calendar days of service of the Commission's final Order accepting the
Agreement; the second installment payment of $8,333.00 shall be paid
within one (1) year of service of the Commission's final Order
accepting the Agreement; and the third installment of $8,333.00 shall
be paid within two (2) years of service of the Commission's final Order
accepting the Agreement. Each installment payment shall be by check
payable to the order of the United States Treasury.
18. Upon 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
1118.20(e). In accordance with 16 CFR 1118.20(f), 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 sixteenth (16th) calendar day after the date it is
published in the Federal Register.
19. Upon the Commission's final acceptance of the Agreement and
issuance of the final Order, Kidz World knowingly, voluntarily, and
completely waives any rights it may have regarding the Staff's
allegations to the following: (1) An administrative or judicial
hearing; (2) judicial review or other challenge or contest of the
validity of the Order or of the Commission's actions; (3) a
determination by the Commission of whether Kidz World failed to comply
with the CPSA and its underlying regulations; (4) a statement of
findings of fact and conclusions of law; and (5) any claims under the
Equal Access to Justice Act.
20. The Commission may publicize the terms of the Agreement and the
Order.
21. The Agreement and the Order shall apply to, and be binding
upon, Kidz World and each of its successors and assigns.
22. The Commission issues the Order under the provisions of the
CPSA, and violation of the Order may subject Kidz World to appropriate
legal action.
23. 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. The Agreement shall not be waived,
amended, modified, or otherwise altered without written agreement
thereto executed by the party against whom such waiver, amendment,
modification, or alteration is sought to be enforced.
24. If any provision of the Agreement and 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 Kidz World agree that severing the provision materially affects the
purpose of the Agreement and the Order.
Kidz World, Inc., d/b/a High Energy USA.
Dated: December 29, 2008.
By:
Victor Hara,
President, Kidz World, Inc., d/b/a High Energy USA, Empire State
Building, 350 5th Avenue, Suite 5005, New York, NY 10118.
Dated: January 7, 2009.
By:
Dennis R. McCoy,
Esquire, Counsel for Respondent Kidz World, Inc., d/b/a High Energy
USA, Hiscock & Barclay, 1100 M & T Center, 3 Fountain Plaza,
Buffalo, NY 14203.
U.S. Consumer Product Safety Commission.
Cheryl A. Falvey,
General Counsel.
Ronald G. Yelenik,
Assistant General Counsel, Office of the General Counsel.
Dated: January 7, 2009
By:
Dennis C. Kacoyanis,
Trial Attorney, Division of Compliance, Office of the General
Counsel.
Order
Upon consideration of the Settlement Agreement entered into between
Kidz World, Inc., d/b/a High Energy USA (``Kidz World'') and the U.S.
Consumer Product Safety Commission (``Commission'') staff, and the
Commission having jurisdiction over the subject matter and over Kidz
World, and it appearing that the Settlement Agreement and the Order are
in the public interest, it is
Ordered, that the Settlement Agreement be, and hereby is, accepted;
and it is
Further ordered, Kidz World shall pay a civil penalty in the amount
of twenty-five thousand dollars ($25,000.00) in three (3) installments
as follows: The first installment payment of $8,334.00 shall be paid
within twenty (20) calendar days of service of the Commission's final
Order accepting the Agreement; the second installment payment of
$8,333.00 shall be paid within one (1) year of service of the
Commission's final Order accepting the Agreement; and the third
installment of $8,333.00 shall be paid within two (2) years of service
of the Commission's final Order accepting the Agreement. Each
installment payment shall be by check payable to the order of the
United States Treasury.
Upon the failure of Kidz World to make the foregoing payment when
due, interest on the unpaid amount shall accrue and be paid by Kidz
World at the federal legal rate of interest set forth at 28 U.S.C.
1961(a) and (b).
Provisionally accepted and provisional Order issued on the 8th
April, 2009.
By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. E9-8688 Filed 4-15-09; 8:45 am]
BILLING CODE 6355-01-P