Federal Register / Vol. 77, No. 201 / Wednesday, October 17, 2012 / Notices 63801 

CONSUMER PRODUCT SAFETY 

COMMISSION 

[CPSC Docket No. 13–C0001] 

Aqua-Leisure Industries, 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 

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 AquaLeisure Industries, Inc., containing a 

civil penalty of $650,000.00, within 

twenty (20) days of service of the 

Commission’s final Order accepting the 

Settlement Agreement. 

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 November 

1, 2012. 

ADDRESSES: Persons wishing to 

comment on this Settlement Agreement 

should send written comments to the 

Comment 13–C0001, Office of the 

Secretary, Consumer Product Safety 

Commission, 4330 East West Highway, 

Room 820, Bethesda, Maryland 20814– 

4408. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer W. Feinberg, Trial Attorney, 

Division of Compliance, Office of the 

General Counsel, Consumer Product 

Safety Commission, 4330 East West 

Highway, Bethesda, Maryland 20814– 

4408; telephone (301) 504–7843. 

SUPPLEMENTARY INFORMATION: The text of 

the Agreement and Order appears 

below. 

Dated: October 12, 2012. 

Todd A. Stevenson, 

Secretary. 

UNITED STATES OF AMERICA 

CONSUMER PRODUCT SAFETY 

COMMISSION 

In the Matter of: Aqua-Leisure Industries, Inc. 

CPSC Docket No.: 13–C0001 

SETTLEMENT AGREEMENT AND ORDER 

1. In accordance with 16 C.F.R. § 1118.20, 

Aqua-Leisure Industries, Inc. (‘‘Aqua 

Leisure’’) and staff (‘‘Staff’’) of the United 

States Consumer Product Safety Commission 

(‘‘Commission’’ or ‘‘CPSC’’) hereby enter into 

this Settlement Agreement (‘‘Agreement’’) 

under the Consumer Product Safety Act 

(‘‘CPSA’’), 15 U.S.C. §§ 2051–2089. The 

Agreement and the attached Order resolve 

Staff’s allegations set forth below. 

THE PARTIES 

2. Staff is the staff of the Commission, an 

independent federal regulatory agency 

established pursuant to, and responsible for, 

enforcement of the CPSA. 

3. Aqua Leisure is a privately-held 

company, organized and existing under the 

laws of the state of Massachusetts, with its 

principal office located at 525 Bodwell 

Street, Avon, Massachusetts 02322–1098. 

STAFF ALLEGATIONS 

4. The Subject Products are ‘‘consumer 

products’’ and, at all relevant times, Aqua 

Leisure was a ‘‘manufacturer’’ of ‘‘consumer 

products,’’ which were ‘‘distribute[d] in 

commerce,’’ as those terms are defined or 

used in sections 3(a)(5), (8), and (11) of the 

CPSA, 15 U.S.C. § 2052(3)(a)(5), (8), and (11). 

5. The Subject Products are defective 

because the leg straps in the seat of the 

inflatable baby boat can tear with normal use, 

causing children to unexpectedly fall into or 

under the water, posing a risk of drowning. 

6. Aqua Leisure received its first complaint 

of sudden tearing of the seat crotch of certain 

models of its inflatable baby boats in 2001, 

and announced a recall of 90,000 of those 

boats on November 28, 2001 (the ‘‘2001 

Recall’’). The 2001 Recall disclosed that 

Aqua Leisure and CPSC had received 12 

reports of sudden tearing of the seat, 

including four reports that children were 

submerged completely under water before a 

caregiver was able to rescue the child. 

7. For two years following the July 2001 

recall, Staff monitored Aqua Leisure’s 

execution of its Corrective Action Plan. On 

July 14, 2003, Staff notified Aqua Leisure of 

its decision to close the case, but reserved the 

right to reopen the matter if Staff determined 

that the public had not been adequately 

protected from the risk of injury presented by 

the product. Staff further advised that Aqua 

Leisure had a ‘‘continuing obligation to 

inform the Commission of defects associated 

with this product * * *.’’ 

8. After the 2001 Recall, the Firm 

continued to produce different versions of 

the inflatable baby boats, which also became 

the subject of consumer complaints. Between 

December 2002 and June 2009, Aqua Leisure 

distributed approximately 4 million of these 

inflatable baby boats (‘‘Subject Products’’) in 

U.S. commerce. The Subject Products came 

in 18 different models, and sold for 

approximately $8 to $15 each through 

nationwide retailers. 

9. Between July 14, 2003, and July 31, 

2006, Aqua Leisure became aware of 17 

incidents in which these post-2001 Recall 

inflatable baby boat seats ‘‘fell out’’; 

‘‘ripped’’; ‘‘failed’’; ‘‘tore’’; ‘‘split’’; and/or 

‘‘separated,’’ including four incidents in 

which a baby boat seat ripped, causing 

children to fall into the water unexpectedly. 

10. By July 2006, Aqua Leisure had 

information that the leg straps of the Subject 

Products were not being produced in 

accordance with the width and thickness 

specifications of the replacement product 

that had been evaluated by Staff as a part of 

the 2001 Recall and Corrective Action Plan. 

11. In August 2008, Aqua Leisure senior 

executives raised concerns internally about a 

‘‘potential problem’’ with the Subject 

Products, and began investigating the Subject 

Products and contemplating its obligation to 

report and the possibility of enforcement 

action by the CPSC. Aqua Leisure did not 

report to the CPSC at that time, however. 

12. On October 31, 2008, CPSC Staff 

notified Aqua Leisure of an incident 

involving a 6-month-old girl who was 

completely submerged in a pool when the 

bottom of her inflatable baby boat seat ‘‘broke 

completely.’’ However, Aqua Leisure had 

previously received notice of this incident on 

July 25, 2008 yet the firm took no steps to 

report to the CPSC. 

13. In addition, by October 31, 2008, Aqua 

Leisure was aware of at least 24 consumer 

complaints regarding the seats of the Subject 

Products since the 2001 Recall, including 

nine reports in which children fell through 

the Subject Products suddenly and were 

completely submerged underwater. 

14. Aqua Leisure waited until March 12, 

2009 to report to the CPSC, just hours before 

the publication of a news story by a Boston 

news team about problems with the Subject 

Products and Aqua Leisure’s handling of 

complaints and potential failure to report to 

the Commission. 

15. Aqua Leisure’s initial report to the 

Commission on March 12, 2009, and its 

subsequent Full Report on April 17, 2009, 

incorrectly reported the scope and severity of 

the hazard: both reports identified only four 

incidents and only one model of boat affected 

by the potential problem, instead of the 

actual 28 complaints received for 18 different 

models. 

16. On May 21, 2009, Aqua Leisure filed 

a Supplemental Full Report in which it 

reported that the Firm had received at least 

28 consumer complaints regarding 18 

different models of baby boats. 

17. On July 2, 2009, Aqua Leisure 

announced a recall for the Subject Products. 

The recall disclosed 31 reports of inflatable 

baby boat seats tearing, causing children to 

fall into or under the water. 

18. Although well before May 21, 2009, 

Aqua Leisure had obtained sufficient 

information to reasonably support the 

conclusion that the Subject Products 

contained a defect that could create a 

substantial product hazard, or created an 

unreasonable risk of serious injury or death, 

Aqua Leisure failed to inform 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 failing to inform the Commission 

immediately of the defect or advising that the 

defect involved the Subject Products, Aqua 

Leisure 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, Aqua Leisure is subject to civil 

penalties for its knowing failure to report, as 

required under section 15(b) of the CPSA, 15 

U.S.C. § 2064(b). 

RESPONSE OF AQUA LEISURE 

20. The Firm denies staff’s allegations that 

it knew that the Subject Products contained 

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63802 Federal Register / Vol. 77, No. 201 / Wednesday, October 17, 2012 / Notices 

defects which could create a substantial 

product hazard pursuant to section 15(a) of 

the CPSA, 15 U.S.C. 2064(a), and further 

denies that it knowingly violated the 

reporting requirements of section 15(b) of the 

CPSA, 15 U.S.C. 2064(b). 

21. Like all inflatable pool toys, the Subject 

Products degrade over time. Section 1115.6 

of Title 16 of the Code of Federal Regulations 

directs the Commission to consider, among 

other things, ‘‘the level of exposure of 

consumers to the risk’’ before determining 

that a reportable product defect exists. The 

reported failure rate for Subject Product leg 

straps was 0.0000063%. Of millions of units 

sold, Aqua Leisure received only 6 consumer 

reports (including suspect reports) in 2004, 

only 2 reports in 2005, only 7 reports in 

2006, 3 in 2007, and 5 in 2008. The number 

of substantiated injuries is zero. 

22. In addition, Section 1115.4 of title 15 

of the Code of Federal Regulations requires 

the Commission to ‘‘consider, as appropriate: 

* * * the adequacy of warnings and 

instructions to mitigate such risk’’ before it 

determines that a product is defective. Each 

baby boat is accompanied by a warning that 

instructs parents to supervise their children, 

as follows: ‘‘This is not a life saving device. 

Do not leave child unattended while in use. 

Only to be used in water in which the child 

is within its depth and under adult 

supervision. NEVER leave a child 

unattended. DO NOT overinflate or use high 

pressure air to inflate. Under NO 

circumstances should a child be left in or 

around water unless a competent adult 

swimmer is present supervising the child. 

DO NOT use with a baby who cannot sit 

confidently. The possibility DOES exist that 

a baby could tip the unit over. To reduce the 

risk of this happening, the water must be 

deep enough so that the baby cannot touch 

the bottom. Always exercise caution when 

babies are teething as they could puncture 

the baby boat. Do not give any playing 

accessories that have the potential to damage 

this product. Not suitable for children under 

6 months.’’ For these reasons, Aqua Leisure 

did not believe the leg straps tears were 

reportable events under Section 15(b). 

AGREEMENT OF THE PARTIES 

23. For purposes of this Agreement, as a 

manufacturer of consumer products 

distributed in U.S. commerce, Aqua Leisure 

is subject to the Commission’s jurisdiction. 

24. In settlement of Staff’s allegations, 

Aqua Leisure consents to the entry of the 

attached Order (‘‘Order’’) as set forth below, 

and will pay a civil penalty in the amount 

of six hundred fifty thousand dollars 

($650,000.00) (the ‘‘Settlement Amount’’), 

two hundred fifty thousand ($250,000.00) of 

which will be paid within twenty (20) days 

of the date this Order becomes final, and the 

remaining four hundred thousand 

($400,000.00) of which will be paid within 

one hundred twenty (120) days of the date 

this Order becomes final. The payment shall 

be made to the CPSC via www.pay.gov. 

25. Aqua Leisure warrants that it has 

reviewed its financial situation and that it 

currently is solvent within the meaning of 11 

U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(I), and 

shall remain solvent following payment to 

the United States of the Settlement Amount. 

Further, the parties warrant that, in 

evaluating whether to execute this 

Agreement, they (a) have intended that the 

mutual promises, covenants, and obligations 

set forth constitute a contemporaneous 

exchange for new value given to Aqua 

Leisure, within the meaning of 11 U.S.C. 

§ 547(c)(1), and (b) conclude that these 

mutual promises, covenants and obligations 

do, in fact, constitute such contemporaneous 

exchange. Further, the parties warrant that 

the mutual promises, covenants, and 

obligations set forth herein are intended to, 

and do, in fact, represent a reasonably 

equivalent exchange of value that is not 

intended to hinder, delay, or defraud any 

entity to which Aqua Leisure was or became 

indebted to on or after the date of transfer, 

within the meaning of 11 U.S.C. § 548(a)(1). 

26. If within 91 days of the effective date 

of this Agreement or of any payment made 

under this Agreement, Aqua Leisure 

commences, or a third party commences, any 

case, proceeding, or other action under any 

law relating to bankruptcy, insolvency, 

reorganization, or relief of debtors (a) seeking 

to have any order for relief of Aqua Leisure’s 

debt’s, or seeking to adjudicate Aqua Leisure 

as bankrupt or insolvent; or (b) seeking 

appointment of a receiver, trustee, custodian, 

or other similar official for Aqua Leisure or 

for all or any substantial part of Aqua 

Leisure’s assets, Aqua Leisure agrees as 

follows: 

a. Aqua Leisure’s obligations under this 

Agreement may not be avoided pursuant to 

11 U.S.C. § 547, and Aqua Leisure shall not 

argue or otherwise take the position in any 

such case, proceeding, or action that: (i) Aqua 

Leisure’s obligations under this Agreement 

may be avoided under 11 U.S.C. § 547; (ii) 

Aqua Leisure was insolvent at the time this 

Agreement was entered into, or became 

insolvent as a result of the payment made to 

the United States; or (iii) mutual promises, 

covenants, and obligations set forth in this 

Agreement do not constitute a 

contemporaneous exchange for new value 

given to Aqua Leisure. 

b. If Aqua Leisure’s obligations under this 

Agreement are avoided for any reason, 

including, but not limited to, through the 

exercise of a trustee’s avoidance powers 

under the Bankruptcy Code, the United 

States, at its sole option, may rescind the 

releases in this Agreement and bring any 

civil and/or administrative claim, action or 

proceeding against Aqua Leisure. Aqua 

Leisure agrees that (i) any such action or 

proceeding brought by the United States 

seeking payment according to the Order set 

forth herein are enforcement actions that are 

not subject to an ‘‘automatic stay’’ pursuant 

to 11 U.S.C. § 362(a) as a result of the action, 

case or proceedings described in the first 

clause of this Paragraph and Aqua Leisure 

shall not argue or otherwise contend that the 

United States’ action or proceeding is subject 

to an automatic stay and therefore barred; (ii) 

Aqua Leisure shall not plead, argue or 

otherwise raise any defenses under the 

theories of statute of limitations, laches, 

estoppels, or similar theories, to any such 

civil or administrative claims, actions or 

proceedings that are brought by the United 

States within 10 calendar days of written 

notification to Aqua Leisure that the releases 

have been rescinded pursuant to this 

Paragraph; and (iii) the United States has a 

valid claim against Aqua Leisure in the 

amount of $1.875 million and the United 

States may pursue its claim in the case, 

action or proceeding referenced in the first 

clause of this Paragraph, as well as in any 

other case, action or proceeding. 

c. The agreements in Paragraphs 26(a) and 

26(b) shall apply only when the 

circumstances described in Paragraph 26 

exist. Aqua Leisure acknowledges that the 

agreements, restrictions and claim 

enhancements in this Paragraph are provided 

in exchange for valuable consideration 

provided in this Agreement. 

27. The parties further agree that if Aqua 

Leisure fails to make timely payments as 

agreed to in paragraph 24, such conduct will 

be considered a violation of this Agreement 

and Order. 

28. Subject to Paragraphs 12 and 13, above, 

the Agreement is a full and complete 

resolution between Staff and Aqua Leisure, 

and its parents, shareholders, divisions, 

subdivisions, subsidiaries, partners, sister 

companies and their successors and assigns 

of all claims for civil penalties that have been 

or could have been asserted based on the 

facts contained in Staff’s allegations above. 

29. The parties enter into this Agreement 

for settlement purposes only. The Agreement 

does not constitute an admission by Aqua 

Leisure, or a determination by the 

Commission, that Aqua Leisure violated the 

CPSA’s reporting requirements. 

30. Upon 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 C.F.R. § 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 it is published in the 

Federal Register, in accordance with 16 

C.F.R. § 1118.20(f). 

31. Upon the Commission’s final 

acceptance of the Agreement and issuance of 

the Order, Aqua Leisure knowingly, 

voluntarily, and completely waives any 

rights it may have in this matter to the 

following: (a) an administrative or judicial 

hearing; (b) judicial review or other challenge 

or contest of the Commission’s actions; (c) a 

determination by the Commission of whether 

Aqua Leisure failed to comply with the CPSA 

and the underlying regulations; (d) a 

statement of findings of fact and conclusions 

of law; and (e) any claims under the Equal 

Access to Justice Act. 

32. The Commission may publicize the 

terms of the Agreement and the final Order. 

33. The Agreement and the final Order 

shall apply to, and be binding upon, Aqua 

Leisure, and each of its successors and/or 

assigns, until the obligation described in 

paragraph 24 has been fulfilled. 

34. The Commission issues the final Order 

under the provisions of the CPSA, and a 

violation of the final Order may subject Aqua 

Leisure, and each of its successors and/or 

assigns, to appropriate legal action. 

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Federal Register / Vol. 77, No. 201 / Wednesday, October 17, 2012 / Notices 63803 

35. The Agreement may be used in 

interpreting the final Order. Understandings, 

agreements, representations, or 

interpretations apart from those contained in 

the Agreement and the Order may not be 

used to vary or contradict the terms or the 

Agreement and the final Order. 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. 

36. If any provision of the Agreement or 

the final Order is held to be illegal, invalid, 

or unenforceable under present or future 

laws effective during the terms of the 

Agreement and the final Order, such 

provision shall be fully severable. The 

balance of the Agreement and the final Order 

shall remain in full force and effect, unless 

the Commission and Aqua Leisure agree that 

severing the provision materially affects the 

purpose of the Agreement and final Order. 

37. This Agreement may be signed in 

counterparts. 

AQUA-LEISURE INDUSTRIES, INC. 

Dated: 8/21/12 

By: lllllllllllllllllll

Steven Berenson, CEO 

Aqua-Leisure Industries, Inc. 

Dated: 8/21/12 

By: lllllllllllllllllll

George Gigounas, Esq. 

Counsel to Aqua-Leisure Industries, Inc. 

DLA Piper 

San Francisco, CA 

U.S. CONSUMER PRODUCT SAFETY 

COMMISSION STAFF 

Cheryl A. Falvey 

General Counsel 

Mary B. Murphy 

Assistant General Counsel 

Division of Compliance 

Dated: 9/19/12 

By: lllllllllllllllllll

Jennifer W. Feinberg 

Trial Attorney 

Division of Compliance 

Office of the General Counsel 

UNITED STATES OF AMERICA 

CONSUMER PRODUCT SAFETY 

COMMISSION 

In the Matter of: Aqua-Leisure Industries, Inc. 

CPSC Docket No.: 13–C0001 

ORDER 

Upon consideration of the Agreement 

entered into between Aqua-Leisure 

Industries, Inc. (‘‘Aqua Leisure’’), and U.S. 

Consumer Product Safety Commission 

(‘‘Commission’’) staff, and the Commission 

having jurisdiction over the subject matter 

and over Aqua Leisure, and it appearing that 

the Agreement and the Order are in the 

public interest, it is 

ORDERED that the Agreement be, and is, 

hereby, accepted; and it is 

FURTHER ORDERED, that Aqua Leisure shall 

pay a civil penalty in the total amount of six 

hundred fifty thousand dollars ($650,000.00), 

with two hundred fifty thousand dollars 

($250,000.00) paid within twenty (20) days of 

service of the Commission’s Order upon 

counsel for Aqua Leisure, and the remaining 

four hundred thousand ($400,000.00) paid 

within one hundred twenty (120) days of 

service. The payments shall be made 

electronically to the CPSC via www.pay.gov. 

Upon the failure of Aqua Leisure to make the 

foregoing payments when due, interest on the 

unpaid amount shall accrue and be paid by 

Aqua Leisure at the federal legal rate of 

interest set forth at 28 U.S.C. § 1961(a) and 

(b). If Aqua Leisure fails to make such 

payments as set forth in the Agreement, such 

conduct will be considered a violation of this 

Agreement and Order. 

Provisionally accepted and provisional 

Order issued on the 11th day of October, 

2012. 

BY ORDER OF THE COMMISSION: 

lllllllllllllllllllll

Todd A. Stevenson, Secretary 

U.S. Consumer Product Safety Commission 

[FR Doc. 2012–25507 Filed 10–16–12; 8:45 am] 

BILLING CODE 6355–01–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Docket 2012–0076; Sequence 36; OMB 

Control No. 9000–0147] 

Federal Acquisition Regulation; 

Information Collection; Pollution 

Prevention and Right-to-Know 

Information (FAR 52.223–5) 

AGENCY: Department of Defense (DOD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Notice of request for public 

comments regarding an extension to an 

existing OMB clearance. 

SUMMARY: Under the provisions of the 

Paperwork Reduction Act, the 

Regulatory Secretariat will be 

submitting to the Office of Management 

and Budget (OMB) a request to review 

and approve an extension of a 

previously approved information 

collection requirement concerning 

pollution prevention and right-to-know 

information. 

Public comments are particularly 

invited on: Whether this collection of 

information is necessary for the proper 

performance of functions of the Federal 

Acquisition Regulations (FAR), and 

whether it will have practical utility; 

whether our estimate of the public 

burden of this collection of information 

is accurate, and based on valid 

assumptions and methodology; ways to 

enhance the quality, utility, and clarity 

of the information to be collected; and 

ways in which we can minimize the 

burden of the collection of information 

on those who are to respond, through 

the use of appropriate technological 

collection techniques or other forms of 

information technology. 

DATES: Submit comments on or before 

December 17, 2012. 

ADDRESSES: Submit comments 

identified by Information Collection 

9000–0147, Pollution Prevention and 

Right-to-Know Information by any of the 

following methods: 

• Regulations.gov: http:// 

www.regulations.gov. 

Submit comments via the Federal 

eRulemaking portal by searching the 

OMB control number. Select the link 

‘‘Submit a Comment’’ that corresponds 

with ‘‘Information Collection 9000– 

0147, Pollution Prevention and Right-toKnow Information’’. Follow the 

instructions provided at the ‘‘Submit a 

Comment’’ screen. Please include your 

name, company name (if any), and 

‘‘Information Collection 9000–0147, 

Pollution Prevention and Right-to-Know 

Information’’ on your attached 

document. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(MVCB), 1275 First Street NE., 

Washington, DC 20417. ATTN: Hada 

Flowers/IC 9000–0147, Pollution 

Prevention and Right-to-Know 

Information. 

Instructions: Please submit comments 

only and cite Information Collection 

9000–0147, Pollution Prevention and 

Right-to-Know Information, in all 

correspondence related to this 

collection. All comments received will 

be posted without change to http:// 

www.regulations.gov, including any 

personal and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: 

Marissa Petrusek, Procurement Analyst, 

Office of Acquisition Policy, GSA, (202) 

501–0136 or email 

marissa.petrusek@gsa.gov. 

SUPPLEMENTARY INFORMATION: 

A. Purpose 

As implemented in Federal 

Acquisition Regulation (FAR) Subpart 

23.10, Executive Order 13514, Federal 

Leadership in Environmental, Energy, 

and Economic Performance, signed on 

October 5, 2009 (74 FR 52117, October 

8, 2009) and Executive Order 13423, 

Strengthening Federal Environmental, 

Energy, and Transportation 

Management, signed on January 24, 

2007 (72 FR 3919, January 26, 2007), 

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