Federal Register / Vol. 75, No. 61 / Wednesday, March 31, 2010 / Rules and Regulations 15993 

1The Commission voted 4–1 to approve the Final 

Rule as amended. Chairman Tenenbaum, 

Commissioner Nord, Commissioner Adler, and 

Moore voted to approve the final rule as amended. 

Continued 

requirement for this prohibited area, it 

considers reducing prohibited airspace 

area appropriate at this time. This action 

restores previously prohibited airspace 

to public use within the National 

Airspace System. 

DATES: Effective date 0901 UTC, June 3, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Colby Abbott, Airspace and Rules 

Group, Office of System Operations 

Airspace and AIM, Federal Aviation 

Administration, 800 Independence 

Avenue, SW., Washington, DC 20591; 

telephone: (202) 267–8783. 

SUPPLEMENTARY INFORMATION: 

History 

On October 5, 2009, the Department 

of the Treasury, USSS, notified the FAA 

that while the security requirements for 

establishing P–49 Crawford, TX (66 FR 

16391) remain valid, consideration of a 

modification of the existing prohibited 

area was appropriate. After a six-month 

security review of P–49, the USSS 

determined the dimensions (boundary 

and altitude) of the prohibited area 

could be reduced. This action responds 

to that notification. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 73 by 

revising the legal description for P–49 

Crawford, TX. After conducting a 

security review of P–49, the USSS 

notified the FAA to reduce the 

boundary and altitude dimensions of 

the prohibited area. This action reduces 

the boundary from a 3 NM radius to a 

2 NM radius of lat. 31°34′45′′ N., 

97°32′00′′ W., and lowers the designated 

altitude from ‘‘Surface to but not 

including 5,000 feet MSL’’ to ‘‘Surface to 

but not including 2,000 feet MSL.’’ 

Because this action restores 

previously prohibited airspace to public 

use, I find that notice and public 

procedures under 5 U.S.C. 553(b) are 

unnecessary as it would only delay the 

return of the airspace to public use. 

Section 73.89 of Title 14 CFR part 73 

was republished in FAA Order 7400.8S, 

effective February 16, 2010. 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. Therefore, this regulation: (1) Is 

not a ‘‘significant regulatory action’’ 

under Executive Order 12866; (2) is not 

a ‘‘significant rule’’ under Department of 

Transportation (DOT) Regulatory 

Policies and Procedures (44 FR 11034; 

February 26, 1979); and (3) does not 

warrant preparation of a regulatory 

evaluation as the anticipated impact is 

so minimal. Since this is a routine 

matter that will only affect air traffic 

procedures and air navigation, it is 

certified that this rule, when 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, section 106 describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. 

This rulemaking is promulgated 

under the authority described in subtitle 

VII, part A, subpart I, section 40103. 

Under that section, the FAA is charged 

with prescribing regulations to assign 

the use of the airspace necessary to 

ensure the safety of aircraft and the 

efficient use of airspace. This regulation 

is within the scope of that authority as 

it amends prohibited airspace in 

Crawford, Texas. 

Environmental Review 

The FAA has determined that this 

action qualifies for categorical exclusion 

under the National Environmental 

Policy Act in accordance with 

paragraph 311c, FAA Order 1050.1E, 

Environmental Impacts: Policies and 

Procedures. This airspace action is not 

expected to cause any potentially 

significant environmental impacts, and 

no extraordinary circumstances exist 

that warrant preparation of an 

environmental assessment. 

List of Subjects in 14 CFR Part 73 

Airspace, Prohibited areas, Restricted 

areas. 

Adoption of Amendment 

■ In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 73 as follows: 

PART 73—SPECIAL USE AIRSPACE 

■ 1. The authority citation for part 73 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 

1963 Comp., p. 389. 

§ 73.89 [Amended] 

■ 2. § 73.89 is amended as follows: 

* * * * * 

P–49 Crawford, TX [Revised] 

Boundaries. That airspace within a 2 NM 

radius of lat. 31°34′45′′ N., long. 97°32′00′′ W. 

Designated altitudes. Surface to 2,000 feet 

MSL. 

Time of designation. Continuous. 

Using agency. United States Secret Service, 

Washington, DC. 

Issued in Washington, DC, on March 25, 

2010. 

Kelly Neubecker, 

Acting Manager, Airspace and Rules Group. 

[FR Doc. 2010–7242 Filed 3–30–10; 8:45 am] 

BILLING CODE 4910–13–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

16 CFR Part 1119 

Civil Penalty Factors 

AGENCY: Consumer Product Safety 

Commission. 

ACTION: Final interpretative rule. 

SUMMARY: The Consumer Product Safety 

Improvement Act of 2008 (‘‘CPSIA’’) 

requires the Consumer Product Safety 

Commission (‘‘Commission’’) to issue a 

final rule providing its interpretation of 

the civil penalty factors found in the 

Consumer Product Safety Act (‘‘CPSA’’), 

the Federal Hazardous Substances Act 

(‘‘FHSA’’), and the Flammable Fabrics 

Act (‘‘FFA’’), as amended by section 217 

of the CPSIA. These statutory provisions 

require the Commission to consider 

certain factors in determining the 

amount of any civil penalty to seek. The 

Commission published an interim final 

rule on September 1, 2009, providing its 

interpretation of the statutory factors 

and seeking public comment. The 

Commission is now issuing a final rule 

interpreting the statutory factors. 

DATES: This rule is effective March 31, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Melissa V. Hampshire, Assistant 

General Counsel, Division of 

Enforcement and Information, Office of 

the General Counsel, Consumer Product 

Safety Commission, 4330 East-West 

Highway, Bethesda, Maryland 20814, 

telephone: 301–504–7631, e-mail: 

mhampshire@cpsc.gov. 

SUPPLEMENTARY INFORMATION: 

A. Background 

The CPSIA specified that the 

Commission, by August 14, 2009, issue 

a final regulation providing its 

interpretation of civil penalty factors in 

section 20(b) of the CPSA, section 

5(c)(3) of the FHSA, and section 5(e)(2) 

of the FFA.1 The Commission issued an 


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15994 Federal Register / Vol. 75, No. 61 / Wednesday, March 31, 2010 / Rules and Regulations 

Chairman Tenenbaum, Commissioner Moore and 

Adler issued a joint statement. Commissioners Nord 

and Northup each issued statements. All statements 

are available at http://www.cpsc.gov/pr/ 

statements.html. 2This factor applies only to the CPSA. The FHSA 

factor is ‘‘the nature of the substance.’’ The FFA has 

no comparable separate factor apart from the nature, 

circumstances, extent, and gravity of the violation. 3The FHSA factor is the ‘‘amount of the 

substance.’’ 

interim final rule providing its 

interpretation on September 1, 2009, 

and sought public comment. As a result 

of the comments received and review of 

the interim final rule, certain 

information and terms are clarified in 

this final rule. This rule interprets the 

factors in section 20(b) of the CPSA, 

section 5(c)(3) of the FHSA and section 

5(e)(2) of the FFA, and describes other 

factors the Commission may consider in 

determining the amount of a civil 

penalty to be sought for knowing 

violations of section 19 of the CPSA, 

section 4 of the FHSA, and section 5 of 

the FFA. The statutory factors the 

Commission is required to consider in 

determining the amount of a civil 

penalty to seek are the following: The 

nature, circumstances, extent and 

gravity of the violation, including the 

nature of the product defect or of the 

substance, the severity of the risk of 

injury, the occurrence or absence of 

injury, the number of defective products 

distributed or the amount of substance 

distributed, the appropriateness of the 

penalty in relation to the size of the 

business of the person charged, 

including how to mitigate undue 

adverse economic impacts on small 

businesses, and such other factors as 

appropriate. 

The statutory factors the Commission 

is required to consider in determining 

the amount of a civil penalty to seek are 

the same factors identified in section 

20(c) of the CPSA, section 5(c)(4) of the 

FHSA, and section 5(e)(3) of the FFA for 

determining whether a civil penalty 

may be compromised by the 

Commission. These statutory provisions 

instruct the Commission to consider the 

following factors in determining the 

amount of a compromised penalty, 

whether it should be remitted or 

mitigated by the Commission, and, in 

what amount: The nature, 

circumstances, extent and gravity of the 

violation, including the nature of the 

product defect,2 the severity of the risk 

of injury, the occurrence or absence of 

injury, the number of defective products 

distributed,3 the appropriateness of 

such penalty in relation to the size of 

the business of the person charged, 

including how to mitigate undue 

adverse economic impacts on small 

businesses, and such other factors as 

appropriate. The Commission will apply 

its interpretation to these statutory 

terms in determining whether and in 

what amounts any penalties may be 

compromised. 

As set forth in section 217(a)(4) of the 

CPSIA, new penalty amounts specified 

in section 217(a) of the CPSIA became 

effective on August 14, 2009 (one year 

after the date of enactment of the 

CPSIA). Under the amendments, the 

maximum penalty amounts increase 

from $8,000 to $100,000 for each 

knowing violation under the CPSA, 

FHSA, and FFA. Maximum penalty 

amounts for any related series of 

violations increase from $1,825,000 to 

$15,000,000. 

B. Prior Proposal on Civil Penalty 

Factors 

On July 12, 2006, the Commission 

published a proposed interpretative rule 

(71 FR 39248) that identified additional 

factors to be considered in assessing and 

compromising civil penalties under 

sections 20(b) and (c) of the CPSA. The 

comment period closed August 11, 

2006. The Commission received four 

comments. 

C. CPSIA Requirements 

The enactment of the CPSIA 

superseded the proposed rule by 

requiring that the Commission provide 

its interpretation of the enumerated 

statutory factors under section 20(b) of 

the CPSA, section 5(c)(3) of the FHSA, 

and section 5(e)(2) of the FFA. The 

CPSIA also indicated that under the 

CPSA, FHSA, and FFA, the Commission 

should consider the nature, 

circumstances, extent, and gravity of the 

violation in determining the appropriate 

penalty amount. The statute provides 

examples of elements that should go 

into that consideration. The CPSIA 

modified the factor of appropriateness 

of the penalty in relation to the size of 

the business of the person charged by 

requiring that this factor include a 

consideration of how to mitigate undue 

adverse economic impacts on small 

businesses. This small business analysis 

element was added to the CPSA and 

FHSA but not added to the FFA factor. 

The Commission will consider the 

undue adverse economic impacts on 

small businesses as another appropriate 

factor under the FFA. The CPSIA also 

added to the CPSA, FHSA, and FFA a 

new catch-all statutory factor ‘‘other 

factors as appropriate.’’ The effect of the 

CPSIA amendments was noted in the 

Fall 2008 Current Regulatory Plan and 

the Unified Agenda (RIN: 3041–AC40) 

by stating that the proposed July 2006 

rule would be withdrawn. In the 

Federal Register of August 26, 2009 (74 

FR 43084), the Commission withdrew 

the July 12, 2006, notice of proposed 

rulemaking (71 FR 39248). 

On November 18, 2008, the 

Commission staff posted a notice on the 

Commission Web site inviting comment 

on information the Commission should 

address in considering the amended 

statutory factors under the CPSA, FHSA, 

and FFA. The Commission staff also 

invited comment on what other factors 

are appropriate to consider in penalty 

determinations including: (1) A 

previous record of compliance; (2) 

timeliness of response; (3) safety and 

compliance monitoring; (4) cooperation 

and good faith; (5) economic gain from 

noncompliance; (6) product failure rate; 

and (7) what information the 

Commission should consider in 

determining how to mitigate the adverse 

economic impact of a particular penalty 

on a small business. The Commission 

staff also invited comment on whether 

it should develop a formula or matrix 

for weighing any or all of the various 

factors and what criteria it should use 

in any weighting formula or matrix. The 

Commission received 16 comments in 

response to the 2008 Web site notice 

and considered the comments in issuing 

the interim final rule. 

On September 1, 2009, the 

Commission published an interim final 

interpretative rule setting forth the 

Commission’s interpretation of the 

statutory factors under the CPSA, FHSA, 

and FFA, for seeking and compromising 

civil penalties. The Commission sought 

comments on the interim final rule. The 

Commission received 10 comments in 

response to the September 1, 2009 

notice. Some commenters responded on 

behalf of their trade or industry 

associations. 

D. Statutory Discussion 

1. What Are the Requirements for 

Imposition of Civil Penalties? 

The determination of the amount of 

any civil penalty to seek and/or 

compromise should allow for maximum 

flexibility within an identified 

framework. The CPSIA requirement for 

the Commission to interpret the civil 

penalty factors gives transparency to the 

regulated community about the 

framework the Commission will use to 

guide its penalty calculations in the 

enforcement process and may provide 

incentives for greater compliance. The 

changes made by various CPSIA 

provisions to the CPSA, FHSA, and 

FFA, including those to the CPSA’s 

prohibited acts and the addition of new 

prohibited acts, present the regulated 

community with many new compliance 

challenges and responsibilities. 


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Federal Register / Vol. 75, No. 61 / Wednesday, March 31, 2010 / Rules and Regulations 15995 

Any proposed civil penalty 

determination is based first on a 

violation of a prohibited act under the 

CPSA, FHSA, or FFA. Civil penalties 

may then be sought against any person 

who ‘‘knowingly violates’’ section 19 of 

the CPSA, section 4 of the FHSA, or a 

regulation or standard under section 4 

of the FFA. The term ‘‘knowingly’’ is 

defined in section 20(d) of the CPSA, 15 

U.S.C. 2069(d), section 5(c)(5) of the 

FHSA, 15 U.S.C. 1264(c)(5), and section 

5(e)(1) of the FFA, 15 U.S.C. 1194(e)(1), 

to mean the having of actual knowledge 

or the presumed having of knowledge 

deemed to be possessed by a ‘‘reasonable 

man’’ who acts in the circumstances, 

including knowledge obtainable upon 

the exercise of due care to ascertain the 

truth of representations. Since its 

enactment in 1973, the CPSA always 

contained a civil penalty provision; 

however, until 1990, the FHSA and FFA 

did not contain comparable provisions 

for civil penalties. Under the FFA, the 

Commission had to seek civil penalties 

under the Federal Trade Commission 

Act, using the authorities under that act. 

The FHSA had no civil penalty 

provision. The Consumer Product Safety 

Improvement Act of 1990, Public Law 

101–608, 104 Stat. 3110, November 16, 

1990, amended section 5 of the FHSA 

and section 5 of the FFA giving the 

Commission authority to seek civil 

penalties for knowing violations of 

those acts. If a penalty settlement cannot 

be negotiated between the Commission 

and a person, the Commission may seek 

an action in Federal court to obtain a 

penalty. See, Advance Machine Co. v. 

Consumer Product Safety Commission, 

666 F.2d 1166 (8th Cir. 1981); Athlone 

Industries, Inc. v. Consumer Product 

Safety Commission, 707 F.2d 1485 (DC 

Cir. 1983). 

2. How Do the CPSIA Amendments to 

the CPSA’s Prohibited Acts Affect Civil 

Penalties? 

In the past, the majority of civil 

penalties for prohibited acts were 

imposed either for a knowing failure to 

furnish information required by section 

15(b) of the CPSA, or for regulatory 

violations under the CPSA, FHSA, or 

FFA. The interim final rule described 

how the CPSIA amended these three 

statutes to strengthen the Commission’s 

enforcement ability and allow for more 

uniform enforcement under the CPSA. 

The new amendments expand the acts 

prohibited under the CPSA and give the 

Commission the ability to enforce 

violations of the FHSA, FFA, and other 

acts enforced by the Commission as 

prohibited acts under the CPSA. Thus, 

the amended CPSA now prohibits the 

sale, offer for sale, distribution in 

commerce, or importation into the 

United States of any consumer product, 

or other product or substance that is 

regulated under the CPSA or any other 

act enforced by the Commission, that is 

not in conformity with an applicable 

consumer product safety rule under the 

CPSA, or any similar rule, regulation, 

standard, or ban under any other act 

enforced by the Commission. 15 U.S.C. 

2068(a)(1). 

The CPSA, as amended, adds a new 

prohibited act for the sale, manufacture, 

distribution, or importation of products 

subject to a voluntary corrective action 

taken by the manufacturer, in 

consultation with the Commission, and 

publicly announced by the Commission, 

or if the seller, distributor, or 

manufacturer knew or should have 

known of such voluntary corrective 

action. 15 U.S.C. 2068(a)(2)(B). 

The CPSA, as amended, broadens the 

prohibited act for the sale, offer for sale, 

manufacture for sale, or distribution or 

importation of any consumer product or 

other product or substance subject to a 

section 15 mandatory recall order to 

include products subject to a section 12 

order. A section 15 order is imposed in 

an adjudicative proceeding to declare a 

product a ‘‘substantial product hazard’’ 

under section 15 of the CPSA, 15 U.S.C. 

2064. A section 12 order, which may 

include a mandatory order requiring 

notification to purchasers, and repair, 

replacement, or refund, is one imposed 

by a District Court after an ‘‘imminent 

hazard’’ proceeding under section 12 of 

the CPSA, 15 U.S.C. 2061. 

The amended prohibited acts section 

of the CPSA is also broadened to 

include the sale, offer for sale, 

manufacture for sale, distribution in 

commerce, or importation into the 

United States of a banned hazardous 

substance under the FHSA as an act 

prohibited under the CPSA. 15 U.S.C. 

2068(a)(2)(D). 

The prohibited act in section 19(a)(6) 

of the CPSA relating to certification 

under section 14 of the CPSA is newly 

expanded to make the failure to furnish 

a certificate required by any other act 

enforced by the Commission a 

prohibited act under the CPSA. This 

prohibited act now also references a 

new tracking label requirement of CPSA 

section 14(a)(5) by specifying that the 

failure to comply with any requirement 

of section 14 includes the failure to 

comply with the requirement for 

tracking labels or any rule or regulation 

promulgated under section 14. 

The CPSA statutory language has also 

been expanded to include a new 

prohibited act for the sale, offer for sale, 

distribution in commerce, or 

importation into the United States of 

any consumer product containing an 

unauthorized third-party certification 

mark. 15 U.S.C. 2068(a)(12). 

Any misrepresentation to Commission 

officers or employees about the scope of 

consumer products subject to recall or 

material misrepresentation in the course 

of an investigation under any act 

enforced by the Commission also is a 

new prohibited act under the CPSA. 15 

U.S.C. 2068(a)(13). 

In addition, the CPSA now contains a 

new prohibited act for the exercise or 

attempt to exercise undue influence on 

a third-party conformity assessment 

body that tests products for compliance 

under laws administered by the 

Commission. 15 U.S.C. 2068(a)(14). 

The CPSIA adds to the Commission’s 

export prohibition authority section 

19(a)(15) of the CPSA, making it illegal 

to export from the United States for 

purposes of sale any consumer product 

or other product or substance (other 

than the export of a product or 

substance permitted by the Secretary of 

the Treasury under section 17(e) of the 

CPSA) that is subject to court- or 

Commission-ordered recall or that is 

banned under the FHSA or subject to a 

voluntary recall announced by the 

Commission. 15 U.S.C. 2068(a)(15). 

The CPSIA also adds a new 

prohibited act that makes it illegal to 

violate a Commission order issued 

under new section 18(c) of the CPSA, 

which allows the Commission to 

prohibit export for sale of any consumer 

product not in conformity with an 

applicable consumer product safety 

rule. 15 U.S.C. 2068(a)(16). 

E. Discussion and Response to 

Comments on the Interim Final Rule 

The comments that the Commission 

received on the Interim Final Rule and 

the Commission’s responses are 

discussed in this section of the 

preamble. 

1. Should Penalties Involving Actual 

Knowledge Be Higher Than Those 

Involving Presumed Knowledge? 

Some commenters stated that the 

Commission should reserve seeking the 

highest penalties only for those 

violations involving actual knowledge 

where death or serious injury is likely. 

The commenters suggested that 

penalties involving presumed 

knowledge and circumstances where no 

injury or only minor injury occurred 

should result in lower or no penalties. 

Some commenters also suggested that 

technical violations should not involve 

a penalty at all. These commenters 

sought clarification of these concepts in 

the rule. 


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The CPSA, FHSA, and FFA define 

‘‘knowingly’’ as the having of actual 

knowledge, or the presumed having of 

knowledge deemed to be possessed by 

a ‘‘reasonable man’’ who acts in the 

circumstances, including knowledge 

obtainable upon the exercise of due care 

to ascertain the truth of representations. 

Thus, the knowledge requirements in 

the CPSA, FHSA, and FFA include 

presumed knowledge, as well as actual 

knowledge. Only in section 20(a)(2) is a 

distinction made and this limits the 

civil penalty liability of certain persons 

without actual knowledge to those who 

are not the manufacturer, private labeler 

or distributor of the products involved. 

Aside from this limitation, actual and 

presumed knowledge are treated equally 

under the statutes, and both could have 

the same consequence for civil penalty 

liability. Thus, the Commission declines 

to follow the commenters’ suggestion to 

seek a higher penalty only where there 

is evidence of actual knowledge and 

serious injury or death, or a lower or no 

penalty where there is evidence of 

presumed knowledge. To follow the 

commenters’ position would treat the 

‘‘presumed knowledge’’ element 

differently than it is treated in the 

statute. However, the presence or 

absence of actual knowledge could 

reflect on a person’s culpability and 

affect the size of the penalty. Moreover, 

the adoption of the distinction sought 

by the commenters would be a 

formulaic approach to penalty 

determinations. Almost all the 

commenters opposed the idea that the 

Commission adopt such a formulaic 

approach. However, the Commission 

has attempted to further clarify in the 

final rule its guidance about what 

factors may influence the Commission’s 

determination under the various 

statutory and other factors. Importantly, 

in an individual case, the Commission 

would review the facts and 

circumstances surrounding the 

violations and the proposed assessment 

of penalties in light of the factors and 

framework described in the rule. 

Specific comments relating to each 

factor are discussed below. The CPSIA 

has greatly expanded the number of 

prohibited acts. Accordingly the 

Commission intends to use its civil 

penalty authority in a manner best 

designed to promote the underlying 

goals of the CPSA—specifically that of 

protecting the public against 

unreasonable risks of injury associated 

with consumer products. In so doing, 

the Commission may reserve the highest 

civil penalty for more serious or 

extensive violations. 

2. In the Final Rule, How Does the 

Commission Interpret the Civil Penalty 

Factors? 

Section 1119.1—Purpose 

Section 1119.1 describes the purpose 

of new Part 1119 ‘‘Civil Penalty Factors,’’ 

explaining that it is the Commission’s 

interpretation of the statutory civil 

penalty factors set forth in the 

Consumer Product Safety Act (15 U.S.C. 

2051–2089), the Federal Hazardous 

Substances Act (15 U.S.C. 1261–1278), 

and the Flammable Fabrics Act (15 

U.S.C. 1191–1204). The Commission has 

revised the interim final rule’s text in 

the final rule to add clarification on the 

underlying goals and policies of civil 

penalties. 

Section 1119.2—Applicability 

Section 1119.2 explains that the part 

applies to all civil penalty 

determinations that the Commission 

proposes to seek or compromise for 

knowing violations of the CPSA, the 

FHSA, or the FFA. 

Section 1119.3—Definitions 

Section 1119.3 defines certain terms 

used in the rule. The Commission has 

revised the definition of the term 

‘‘product defect’’ from that in the interim 

final rule. The term is defined in the 

final rule to have the same meaning as 

the term ‘‘defect’’ referenced in the CPSA 

and the Commission’s definition of 

‘‘defect’’ at 16 CFR 1115.4. The term 

‘‘violator’’ has been revised to reflect the 

statutory terminology that any ‘‘person’’ 

is subject to civil penalties. As noted in 

the rule, ‘‘person’’ includes any legally 

responsible party who committed a 

knowing violation of the CPSA, FHSA 

or FFA. The rule explains that the 

definitions apply for purposes of the 

rule. 

Section 1119.4(a)(2)—Nature, 

Circumstances, Extent, and Gravity of 

the Violation 

The Commission believes that this 

factor allows the Commission to 

consider the totality of the 

circumstances surrounding a violation 

while recognizing that depending upon 

the case, the significance and 

importance of each factor may vary. The 

Commission also believes that this 

particular factor allows for 

consideration of the seriousness and 

extent of a particular violation that may 

not otherwise be considered with 

respect to the other enumerated 

statutory factors. Therefore, in each 

case, the Commission will continue to 

look at the enumerated statutory factors, 

as well as other factors (described in 

section 1119.4(b) below) that the 

Commission may determine are 

appropriate, and consider all of the 

factors in determining the civil penalty 

amount. 

Section 1119.4(a)(3)—Nature of the 

Product Defect 

The interim final rule indicated that 

the Commission would consider, under 

this provision, where appropriate and 

applicable in each particular case, the 

nature of the hazard presented by the 

product for which a penalty is sought. 

The Commission construed this factor 

as applying broadly to products or 

substances that may in fact contain a 

defect which could create a substantial 

product hazard (as defined and 

explained in 16 CFR 1115.4), to 

products which present a hazard 

because of a violation of a rule, 

regulation, standard, or ban under the 

CPSA, FHSA, and FFA, as well as to any 

other violation and how the nature of 

those violations relate to the underlying 

products or substances. 

A number of commenters addressed 

the definition of ‘‘product defect’’ in 

section 1119.3 of the interim final rule 

as overly broad and unnecessarily 

expansive and inconsistent with the 

Commission’s interpretation of defect as 

used in 16 CFR 1115.4. The commenters 

pointed out that defining ‘‘product 

defect’’ beyond the definition in section 

1115.4 as a product or substance 

‘‘associated with a prohibited act’’ had 

no basis in the statutory language of the 

CPSA and that the definition should be 

clarified to refer only to the 

Commission’s definition in 16 CFR 

1115.4. 

The Commission agrees that the 

definition of ‘‘product defect’’ in the 

interim final rule should be revised. The 

Commission agrees that certain CPSA 

violations may not involve a ‘‘product 

defect’’ or a ‘‘defective product.’’ For 

example, failure to supply a required 

General Conformity Certification that a 

product complies with an applicable 

consumer product safety rule may not 

necessarily involve a product defect or 

a defective product. Thus, ‘‘product 

defect’’ may not be a relevant 

consideration in such a circumstance. 

Therefore, the Commission has revised 

the final rule to clarify that where 

‘‘product defect’’ or ‘‘defective product’’ 

does not apply, in such circumstances, 

the other statutory factors will be 

considered. 

Section 1119.4(a)(4)—Severity of the 

Risk of Injury 

Several commenters noted that 

penalties should not be sought for 

violations where the products presented 

risks of minor or moderate injury. 


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The Commission declines to follow 

this suggestion. However, the 

Commission notes that minor or 

moderate injury is considered as a factor 

in the determination of the overall 

penalty. The Commission refers to the 

discussion of 16 CFR 1115.12 which 

specifies that severity of the risk 

includes a consideration of the 

likelihood of an injury occurring, the 

intended or reasonably foreseeable use 

or misuse of the product, and the 

population group exposed. The 

Commission retains these references in 

the final rule. The Commission also 

notes that the interim final rule has been 

modified in the final rule to further 

clarify that the Commission will 

consider ‘‘illness’’ along with injury and 

death as a consideration under this 

factor. The Commission believes that 

consideration of illness is consistent 

with the statutory direction which 

defines a ‘‘risk of injury’’ in section 

3(a)(14) of the CPSA to mean a risk of 

death, personal injury, or serious or 

frequent illness. 

Section 1119.4(a)(5)—The Occurrence 

or Absence of Injury 

The Commission received several 

comments suggesting that it should not 

seek a penalty where the information 

the Commission evaluates reveals that 

the violation involved no injury or only 

minor injuries have occurred. 

The Commission declines to follow 

this suggestion because a violative 

product, a product about which a 

person did not report as required, or 

another type of violation, may present a 

serious risk to consumers even though 

no injuries have occurred. However, the 

final rule is further clarified to state that 

the Commission would consider under 

this factor whether illnesses or deaths 

have occurred, in addition to 

considering whether injuries have or 

have not occurred. The rule is further 

clarified to explain that this 

consideration will also involve the 

number and nature of such injuries, 

illnesses, or deaths. Finally, the 

Commission has pointed out that both 

acute and the likelihood for chronic 

illness will be considered. 

Section 1119.4(a)(6)—The Number of 

Defective Products Distributed 

The Commission is required to 

consider the number of defective 

products or amount of substances 

distributed in commerce. The 

Commission recognizes, as some 

commenters pointed out, that the 

number of defective products in 

consumers’ hands may be different from 

the number of defective products 

distributed. However, the statutory 

language makes no distinction between 

those defective products distributed in 

commerce that consumers received, and 

those defective products distributed in 

commerce that consumers have not 

received. Therefore both could be 

considered in appropriate cases. With 

respect to the number of defective 

products or amount of substances 

involved in a recall, the Commission 

clarifies in the rule that the Commission 

does not intend to penalize a person’s 

decision to conduct a wider-thannecessary recall undertaken out of an 

abundance of caution. This would not 

include situations where such a recall is 

conducted due to a person’s uncertainty 

concerning how many or which 

products may need to be recalled. 

Section 1119.4(a)(7)—The 

Appropriateness of Such Penalty in 

Relation to the Size of the Business of 

the Person Charged, Including How To 

Mitigate Undue Adverse Economic 

Impacts on Small Businesses 

The Commission is required to 

consider the size of a business in 

relation to the amount of the penalty. 

This factor reflects the relationship 

between the size of the business of the 

person charged and the deterrent effect 

of, and other policies underlying, civil 

penalties. In considering business 

‘‘size,’’ the Commission may look to 

several factors including but not limited 

to the number of employees, net worth, 

and annual sales. The Commission may 

be guided, where appropriate, by any 

relevant financial factors to help 

determine a person’s ability to pay a 

penalty including but not limited to: 

• Liquidity factors—factors that help 

measure a person’s ability to pay its 

short-term obligations; 

• Solvency factors—factors that help 

measure a person’s ability to pay its 

long-term obligations; and 

• Profitability factors— factors that 

measure a person’s level of return on 

investment. 

The Commission is aware that 

penalties may have adverse economic 

consequences on persons, including 

small businesses. The statute requires 

the Commission to consider how to 

mitigate the adverse economic 

consequences on small businesses only 

if those consequences would be 

‘‘undue.’’ What the Commission 

considers in determining what is 

‘‘undue’’ may include, but is not limited 

to, the business’s size and financial 

factors relating to its ability to pay. The 

interim final rule is modified in the 

final rule to explain that the burden to 

present clear, reliable, relevant, and 

sufficient evidence relating to a 

business’s size and ability to pay rests 

on the business. When considering how 

to mitigate undue adverse economic 

consequences, the Commission will, as 

appropriate, follow its Small Business 

Enforcement Policy set forth at 16 CFR 

1020.5. In determining a small 

business’s ability to pay a proposed 

penalty, the Commission may be 

guided, where appropriate, by the 

financial factors set forth above. The 

Commission recognizes that on occasion 

its announced civil penalty amounts do 

not seem to reflect the seriousness of the 

violations due to the Commission’s 

mitigation of the amount of the penalty 

based on ability to pay. While the 

Commission, unlike certain other 

federal agencies, has never publicized 

the amount it would have sought absent 

the mitigation, it acknowledges that it 

has that authority and may exercise that 

authority in appropriate circumstances. 

Section 1119.4(b)—Other Factors as 

Appropriate 

Some commenters suggested that the 

Commission should identify other 

factors that will be considered in 

penalty determinations. The factors the 

commenters suggested included 

previous record of compliance, good 

faith, efforts taken to respond to the 

violations, duration of the violations, 

and compliance with mandatory and/or 

voluntary standards. The Commission 

has determined that some of these 

factors would already be evaluated in 

the context of the enumerated statutory 

factors to consider, such as the nature, 

circumstances, extent, and gravity of the 

violation. Therefore, it is not necessary 

to separately enumerate these factors. 

Congress clarified in the CPSIA that 

the Commission has the ability to 

consider factors in addition to the ones 

enumerated in the act in individual 

cases, as appropriate. However, the 

Commission retains the concept from 

the interim final rule in the final rule 

that in any penalty matter the 

Commission and the person are free to 

raise any other factors they believe are 

relevant in determining an appropriate 

civil penalty amount. Factors not 

identified below could therefore be 

raised in a penalty matter. The 

Commission has determined that the 

factors listed below should remain with 

changes and other clarifications as 

noted: 

• Safety/Compliance Program and/or 

System Relating to a Violation: The 

Commission listed a number of factors 

relating to consideration of a safety/ 

compliance program or system in the 

interim final rule. The Commission 

received comments seeking further 

definition of a safety or compliance 

program. The rule is intended to 


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provide examples of information that a 

person should consider, but not to 

provide one particular model of a 

program or system. The Commission 

intends to allow flexibility for the 

regulated community. However, the 

Commission has modified the final rule 

from the interim final rule in two 

important respects. First, the rule now 

makes explicit that the burden to 

present clear, reliable, relevant, and 

sufficient evidence of any such program 

and its relevance is on the person 

seeking consideration of this factor. 

Second, the rule makes explicit that any 

such program being asserted as relevant 

to a penalty matter must specifically 

relate to the violation or violations at 

issue and must be reasonable and 

effective. The Commission recognizes 

that the mere fact of a violation does not 

necessarily render a program ineffective. 

• History of Noncompliance: Some 

commenters sought greater clarification 

on this factor and stated that the 

Commission should consider a history 

of compliance as well as 

noncompliance. The Commission 

declines to add ‘‘compliance’’ in the 

final rule because the factor by its 

nature is intended to address repeat 

violators. However, the Commission 

clarifies in the final rule that repeat 

violations of the same law or regulation, 

or prior violations of a different law or 

regulation enforced by the Commission, 

as well as the number of such 

violations, will be considerations. 

• Economic Gain from 

Noncompliance: Some comments 

suggested that the Commission consider 

this factor after consideration of the 

statutory factors in determining a 

penalty amount. The Commission agrees 

that economic gain may be a 

consideration that should be factored in, 

where appropriate, with other factors. 

• Failure to respond in a timely and 

complete fashion to the Commission’s 

requests for information or remedial 

action: The Commission received a 

number of comments suggesting that 

this factor as written implied that a 

person may be penalized for exercising 

their legal rights to disagree and seek 

counsel on the Commission’s requests 

for information or remedial action. The 

Commission agrees that a person has the 

legal right to decline to respond or act 

voluntarily and the legal right to seek 

advice on information and remedial 

action requests from the Commission 

and, therefore, is clarifying that it did 

not intend to impede such rights. This 

factor was intended to address egregious 

and dilatory tactics in response to the 

Commission’s written requests for 

information or remedial action but not 

to impede any person’s lawful rights. 

The rule is clarified to reflect this 

consideration. 

Which additional factors the 

Commission considers in determining 

an appropriate penalty amount, 

including, but not limited to, those 

listed above, will be unique to each 

case. 

A person will be notified of any 

factors beyond those enumerated in the 

statutes that the Commission relies on 

as aggravating factors for purposes of 

determining a civil penalty amount. 

Section 1119.5—Enforcement 

Notification 

Section 1119.5 of the rule sets forth a 

notification provision whereby, if it is 

believed that a person has violated the 

law and a penalty is sought, the person 

will be so advised. This provision has 

been informally followed by the 

Commission in determining the amount 

of a civil penalty to seek or compromise 

for knowing violations. The 

Commission has provided further 

clarification of this process in the rule. 

F. Immediate Effective Date 

The Commission issued an interim 

final rule, in accordance with the 

procedures set forth at 5 U.S.C. 553 of 

the Administrative Procedure Act, on 

September 1, 2009, providing its 

interpretation of the penalty factors in 

section 20(b) of the CPSA, section 

5(c)(3) of the FHSA, and section 5(e)(2) 

of the FFA. Maximum civil penalty 

amounts have increased for violations 

that occurred on or after August 14, 

2009. This final rule is effective upon 

publication. The rule is interpretative 

and does not impose obligations on 

regulated parties beyond those imposed 

by the CPSA, FHSA, and FFA. 

Therefore, there is no need to provide a 

delayed effective date in order to allow 

for regulated parties to prepare for the 

rule. 

G. Regulatory Flexibility Certification 

The Regulatory Flexibility Act (RFA), 

5 U.S.C. 601–612, directs agencies to 

consider the potential impact of 

regulations on small business and other 

small entities. However, the RFA does 

not apply to rulemaking that is not 

subject to the notice and comment 

requirement of the Administrative 

Procedure Act, 5 U.S.C. 553. 

Interpretative rules, such as the one 

issued by this notice, are not subject to 

the notice and comment requirement. 

Accordingly, neither an initial nor a 

final regulatory flexibility analysis is 

required for this rule. 

H. Paperwork Reduction Act 

The rule does not impose any 

information collection requirements. 

Rather, it describes the statutory civil 

penalty factors and how the 

Commission interprets those factors. 

Accordingly, it is not subject to the 

Paperwork Reduction Act, 44 U.S.C. 

3501–3520. 

I. Environmental Considerations 

The Commission’s regulations at 16 

CFR 1021.5(a) provide that there are no 

CPSC actions that ordinarily produce 

significant environmental effects. The 

rule does not fall within the categories 

in 16 CFR 1021.5(b) of CPSC actions 

that have the potential for producing 

environmental effects. The rule does not 

have any potential for adversely 

affecting the quality of the human 

environment. Council of Environmental 

Quality regulations at 40 CFR 1508.18(a) 

provide that agency actions subject to 

environmental review ‘‘do not include 

bringing judicial or administrative 

enforcement actions.’’ Therefore, no 

environmental assessment or 

environmental impact statement is 

required. 

List of Subjects in 16 CFR Part 1119 

Administrative practice and 

procedure, Business and Industry, 

Consumer protection, Reporting and 

recordkeeping requirements. 

■ Accordingly, the Commission revises 

16 CFR Part 1119 to read as follows: 

PART 1119—CIVIL PENALTY 

FACTORS 

Sec. 

1119.1 Purpose. 

1119.2 Applicability. 

1119.3 Definitions. 

1119.4 Factors considered in determining 

civil penalties. 

1119.5 Enforcement notification. 

Authority: 15 U.S.C. 2058, 2063, 2064, 

2067(b), 2068, 2069, 2076(e), 2084, 1261, 

1263, 1264, 1270, 1273, 1278, 1191, 1192, 

1193, 1194, 1195, 1196. 

§ 1119.1 Purpose. 

This part sets forth the Consumer 

Product Safety Commission’s 

(Commission) interpretation of the 

statutory factors considered in 

determining the amount of civil 

penalties that the Commission may seek 

or compromise. The policies behind, 

and purposes of, civil penalties include 

the following: Deterring violations; 

providing just punishment; promoting 

respect for the law; promoting full 

compliance with the law; reflecting the 

seriousness of the violation; and 

protecting the public. 


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§ 1119.2 Applicability. 

This part applies to all civil penalty 

determinations the Commission may 

seek or compromise under the 

Consumer Product Safety Act (CPSA) 

(15 U.S.C. 2051–2089), the Federal 

Hazardous Substances Act (FHSA) (15 

U.S.C. 1261–1278), and the Flammable 

Fabrics Act (FFA) (15 U.S.C. 1191– 

1204). Any person who knowingly 

violates section 19 of the CPSA, section 

4 of the FHSA, or section 5(e) of the 

FFA, is subject to a civil penalty. 

§ 1119.3 Definitions. 

For purposes of this rule, the 

following definitions apply: 

(a) Product defect means a defect as 

referenced in the CPSA and defined in 

Commission regulations at 16 CFR 

1115.4. 

(b) Violation means a violation 

committed knowingly, as the term 

‘‘knowingly’’ is defined in section 19 of 

the CPSA, section 4 of the FHSA, or 

section 5 of the FFA. 

(c) Person means any manufacturer 

(including importer), distributor, or 

retailer, as those terms are defined in 

the CPSA, FHSA, or FFA, and any other 

legally responsible party. 

§ 1119.4 Factors considered in 

determining civil penalties. 

(a) Statutory Factors. (1) Section 20(b) 

of the CPSA, section 5(c)(3) of the 

FHSA, and section 5(e)(2) of the FFA, 

specify factors considered by the 

Commission in determining the amount 

of a civil penalty to be sought upon 

commencing an action for knowing 

violations of each act. These factors are: 

(i) CPSA (15 U.S.C. 2069(b)). The 

nature, circumstances, extent, and 

gravity of the violation, including: 

(A) The nature of the product defect; 

(B) The severity of the risk of injury; 

(C) The occurrence or absence of 

injury; 

(D) The number of defective products 

distributed; 

(E) The appropriateness of such 

penalty in relation to the size of the 

business of the person charged, 

including how to mitigate undue 

adverse economic impacts on small 

businesses; and 

(F) Such other factors as appropriate. 

(ii) FHSA (15 U.S.C. 1264 (c)(3)). The 

nature, circumstances, extent, and 

gravity of the violation, including: 

(A) The nature of the substance; 

(B) Severity of the risk of injury; 

(C) The occurrence or absence of 

injury; 

(D) The amount of substance 

distributed; 

(E) The appropriateness of such 

penalty in relation to the size of the 

business of the person charged, 

including how to mitigate undue 

adverse economic impacts on small 

businesses; and 

(F) Such other factors as appropriate. 

(iii) FFA (15 U.S.C. 1194 (e)(2)). The 

nature, circumstances, extent, and 

gravity of the violations: 

(A) The severity of the risk of injury; 

(B) The occurrence or absence of 

injury; 

(C) The appropriateness of such 

penalty in relation to the size of the 

business of the person charged; and 

(D) Such other factors as appropriate. 

(2) The nature, circumstances, extent, 

and gravity of the violation. Under this 

factor, the Commission will consider the 

totality of the circumstances and all 

other facts concerning a violation. The 

Commission will consider the 

enumerated statutory factors, as well as 

the factors described in paragraph (b) of 

this section. 

(3) Nature of the product defect. The 

Commission will consider the nature of 

the product defect associated with a 

CPSA violation. This consideration will 

include, for example, whether the defect 

arises from the product’s design, 

composition, contents, construction, 

manufacture, packaging, warnings, or 

instructions, and will include 

consideration of conditions or 

circumstances in which the defect 

arises. The Commission will also 

consider the nature of the substance 

associated with an FHSA violation. Two 

of the statutory factors in the CPSA civil 

penalty factors include the terms 

‘‘product defect’’ or ‘‘defective products.’’ 

However, certain violations of the 

CPSA, for example, failing to supply a 

required certificate that the product 

complies with an applicable consumer 

product safety rule, do not necessarily 

require that there be a product defect or 

defective product. The terms ‘‘product 

defect’’ or ‘‘defective products’’ would 

not apply to such situation. In such 

cases, however, the other civil penalty 

factors would still be considered. 

(4) Severity of the risk of injury. 

Consistent with its discussion of 

severity of the risk at 16 CFR 1115.12, 

the Commission will consider, among 

other factors, the potential for serious 

injury, illness, or death (and whether 

any injury or illness required medical 

treatment including hospitalization or 

surgery); the likelihood of injury; the 

intended or reasonably foreseeable use 

or misuse of the product; and the 

population at risk (including vulnerable 

populations such as children, the 

elderly, or those with disabilities). 

(5) The occurrence or absence of 

injury. The Commission will consider 

whether injuries, illnesses, or deaths 

have or have not occurred with respect 

to any product or substance associated 

with a violation, and, if so, the number 

and nature of injuries, illnesses, or 

deaths. Both acute illnesses and the 

likelihood of chronic illnesses will be 

considered. 

(6) The number of defective products 

distributed. The Commission will 

consider the number of defective 

products or amount of substance 

distributed in commerce. The statutory 

language makes no distinction between 

those defective products distributed in 

commerce that consumers received and 

those defective products distributed in 

commerce that consumers have not 

received. Therefore both could be 

considered in appropriate cases. This 

factor will not be used to penalize a 

person’s decision to conduct a widerthan-necessary recall out of an 

abundance of caution. This would not 

include situations where such a recall is 

conducted due to a person’s uncertainty 

concerning how many or which 

products may need to be recalled. 

(7) The appropriateness of such 

penalty in relation to the size of the 

business of the person charged, 

including how to mitigate undue 

adverse economic impacts on small 

businesses. 

(i) The Commission is required to 

consider the size of the business of the 

person charged in relation to the 

amount of the penalty. This factor 

reflects the relationship between the 

size of a business and the policies 

behind, and purposes of, a penalty (as 

noted above in § 1119.1). In considering 

business size, the Commission may look 

to several factors including, but not 

limited to, the number of employees, net 

worth, and annual sales. A business’s 

size and a business’s ability to pay a 

penalty are separate considerations. In 

some cases for small businesses, 

however, these two considerations may 

relate to each other. The Commission 

will be guided, where appropriate, by 

relevant financial factors to determine a 

small business’s ability to pay a penalty, 

including, but not limited to, liquidity, 

solvency, and profitability. The burden 

to present clear, reliable, relevant, and 

sufficient evidence relating to a 

business’s size and ability to pay rests 

on the business. 

(ii) The statute requires the 

Commission to consider how to mitigate 

the adverse economic impacts on small 

businesses only if those impacts would 

be undue. What the Commission 

considers in determining what is undue 

may include, but is not limited to, the 

business’s size and financial factors 

relating to its ability to pay. When 

considering how to mitigate undue 


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16000 Federal Register / Vol. 75, No. 61 / Wednesday, March 31, 2010 / Rules and Regulations 

adverse economic impacts, the 

Commission will, as appropriate, also 

follow its Small Business Enforcement 

Policy set forth at § 1020.5. 

(b) Other factors as appropriate. In 

determining the amount of any civil 

penalty to be sought for a violation of 

the CPSA, FHSA, or FFA, the 

Commission may consider, as 

appropriate, such other factors in 

addition to those listed in the statutes. 

Both the Commission and a person may 

raise any factors they believe are 

relevant in determining an appropriate 

penalty amount. A person will be 

notified of any factors beyond those 

enumerated in the statutes that the 

Commission relies on as aggravating 

factors for purposes of determining a 

civil penalty amount. Additional factors 

that may be considered in a case 

include, but are not limited to, the 

following: 

(1) Safety/compliance program and/or 

system relating to a violation. The 

Commission may consider, when a 

safety/compliance program and/or 

system as established is relevant to a 

violation, whether a person had at the 

time of the violation a reasonable and 

effective program or system for 

collecting and analyzing information 

related to safety issues. Examples of 

such information would include 

incident reports, lawsuits, warranty 

claims, and safety-related issues related 

to repairs or returns. The Commission 

may also consider whether a person 

conducted adequate and relevant 

premarket and production testing of the 

product at issue; had a program in place 

for continued compliance with all 

relevant mandatory and voluntary safety 

standards; and other factors as the 

Commission deems appropriate. The 

burden to present clear, reliable, 

relevant, and sufficient evidence of such 

program, system, or testing rests on the 

person seeking consideration of this 

factor. 

(2) History of noncompliance. The 

Commission may consider whether or 

not a person’s history of noncompliance 

with the CPSA, FHSA, FFA, and other 

laws that the CPSC enforces, and the 

regulations thereunder, should increase 

the amount of the penalty. A person’s 

history of noncompliance may be 

indicated by, for example, multiple 

violations of one or more laws or 

regulations that the CPSC enforces, 

including repeated violations of the 

same law or regulation. History of 

noncompliance may include the number 

of previous violations or how recently a 

previous violation occurred. 

(3) Economic gain from 

noncompliance. The Commission may 

consider whether a person benefitted 

economically from a failure to comply, 

including a delay in complying, with 

the CPSA, FHSA, FFA, and other laws 

that the CPSC enforces, and the 

regulations thereunder. 

(4) Failure to respond in a timely and 

complete fashion to the Commission’s 

requests for information or remedial 

action. The Commission may consider 

whether a person’s failure to respond in 

a timely and complete fashion to 

requests from the Commission for 

information or for remedial action 

should increase a penalty. This factor is 

intended to address a person’s dilatory 

and egregious conduct in responding to 

written requests for information or 

remedial action sought by the 

Commission, but not to impede any 

person’s lawful rights. 

§ 1119.5 Enforcement notification. 

A person will be informed in writing 

if it is believed that the person has 

violated the law and if the Commission 

intends to seek a civil penalty. Any 

person who receives such a writing will 

have an opportunity to submit evidence 

and arguments that it should not pay a 

penalty or should not pay a penalty in 

the amount sought by the Commission. 

Dated: March 24, 2010. 

Todd A. Stevenson, 

Secretary, Consumer Product Safety 

Commission. 

[FR Doc. 2010–6940 Filed 3–30–10; 8:45 am] 

BILLING CODE 6355–01–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Part 655 

Temporary Employment of Foreign 

Workers in the United States 

CFR Correction 

In Title 20 of the Code of Federal 

Regulations, Part 500 to End, revised as 

of April 1, 2009, on page 466, remove 

§ 655.0 and correctly reinstate it to read 

as follows: 

§ 655.0 Scope and purpose of part. 

(a) Subparts A, B, and C—(1) General. 

Subparts A, B, and C of this part set out 

the procedures adopted by the Secretary 

to secure information sufficient to make 

factual determinations of: (i) Whether 

U.S. workers are available to perform 

temporary employment in the United 

States, for which an employer desires to 

employ nonimmigrant foreign workers, 

and (ii) whether the employment of 

aliens for such temporary work will 

adversely affect the wages or working 

conditions of similarly employed U.S. 

workers. These factual determinations 

(or a determination that there are not 

sufficient facts to make one or both of 

these determinations) are required to 

carry out the policies of the Immigration 

and Nationality Act (INA), that a 

nonimmigrant alien worker not be 

admitted to fill a particular temporary 

job opportunity unless no qualifed U.S. 

worker is available to fill the job 

opportunity, and unless the 

employment of the foreign worker in the 

job opportunity will not adversely affect 

the wages or working conditions of 

similarly employed U.S. workers. 

(2) The Secretary’s determinations. 

Before any factual determination can be 

made concerning the availability of U.S. 

workers to perform particular job 

opportunities, two steps must be taken. 

First, the minimum level of wages, 

terms, benefits, and conditions for the 

particular job opportunities, below 

which similarly employed U.S. workers 

would be adversely affected, must be 

established. (The regulations in this part 

establish such minimum levels for 

wages, terms, benefits, and conditions of 

employment.) Second, the wages, terms, 

benefits, and conditions offered and 

afforded to the aliens must be compared 

to the established minimum levels. If it 

is concluded that adverse effect would 

result, the ultimate determination of 

availability within the meaning of the 

INA cannot be made since U.S. workers 

cannot be expected to accept 

employment under conditions below 

the established minimum levels. Florida 

Sugar Cane League, Inc. v. Usery, 531 F. 

2d 299 (5th Cir. 1976). 

Once a determination of no adverse 

effect has been made, the availability of 

U.S. workers can be tested only if U.S. 

workers are actively recruited through 

the offer of wages, terms, benefits, and 

conditions at least at the minimum level 

or the level offered to the aliens, 

whichever is higher. The regulations in 

this part set forth requirements for 

recruiting U.S. workers in accordance 

with this principle. 

(3) Construction. This part and its 

subparts shall be construed to effectuate 

the purpose of the INA that U.S. 

workers rather than aliens be employed 

wherever possible. Elton Orchards, Inc. 

v. Brennan, 508 F. 2d 493, 500 (1st Cir. 

1974), Flecha v. Quiros, 567 F. 2d 1154 

(1st Cir. 1977). Where temporary alien 

workers are admitted, the terms and 

conditions of their employment must 

not result in a lowering of the terms and 

conditions of domestic workers 

similarly employed, Williams v. Usery, 

531 F. 2d 305 (5th Cir. 1976); Florida 

Sugar Cane League, Inc. v. Usery, 531 F. 


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