[Federal Register Volume 65, Number 195 (Friday, October 6, 2000)]
[Notices]
[Pages 59826-59828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-25659]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 01-C00001]


Crawford Textile Corporation, a Corporation, Provisional 
Acceptance of a Settlement Agreement and Order

AGENCY: Consumer Profice 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(f). 
Published below is a provisionally-accepted Settlement Agreement with 
Crawford Textile Corporation, a corporation, containing a civil penalty 
of $150,000.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
request with the Office of the Secretary by October 23, 2000.

ADDRESSES: Persons wishing to commment on this Settlement Agreement 
should send written comments to the Comment 01-C0001, Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Office of Compliance and Enforcement, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0226, 1346.

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

    Dated: October 2, 2000.
Todd A. Stevenson,
Deputy Secretary.

Settlement Agreement and Order

    1. This Settlement Agreement and Order, entered into between 
Crawford Textile Corporation (hereinafter, ``Crawford'' or 
``Respondent''), a corporation, and the staff of the Consumer Product 
Safety Commission (hereinafter, ``Staff''), pursuant to the procedures 
set forth in 16 CFR 1118.20, is a compromise resolution of the matter 
described herein, without a hearing or determination of issues of law 
and fact.

I. The Parties

    2. The ``staff'' is the staff of the Consumer Product Safety 
Commission (hereinafter, ``Commission''), an independent federal 
regulatory commission of the United States government established 
pursuant to section 4 of the Consumer Product Safety Act (CPSA), as 
amended, 15 U.S.C. 2053.
    3. Respondent Crawford Textile Corporation is a corporation 
organized and existing under the laws of the State of North Carolina. 
Its office is located at 319-A South Westgate Drive, Greensboro, NC 
27407. Respondent is a converter of circular knitted fabrics.

II. Allegations of the Staff

A. Violation of the Flammable Fabrics Act

    4. On August 27, 1998, Respondent entered into a contract with 
Milano Express, Inc. (hereinafter, ``Milano'') whereby Respondent 
agreed to manufacture for sale approximately 25,000 yards of weathered 
blue sherpa fabric, style number 11012, 80% cotton/20% polyester 
(hereinafter, ``fabric'').
    5. In September 1998, Respondent manufactured for sale 
approximately 22,570 yards of fabric for Milano.
    6. Respondent sold, caused to be transported, and delivered after a 
sale, in commerce, approximately 22,570 yards of fabric to Milano in 
September 1998.
    7. The fabric is subject to the Standard for the Flammability of 
Clothing Textiles (hereinafter, ``Clothing Standard''), 16 CFR Part 
1610, issued under section 4 of the Flammable Fabrics Act (FFA), 15 
U.S.C. 1193.
    8. After Respondent had shipped and distributed all of the fabric 
to Milano,

[[Page 59827]]

Respondent received flammability test reports for the fabric on October 
7 and 9, 1998. The test results showed that several lots of the fabric 
did not comply with the Clothing Standard and, therefore, were 
dangerously flammable and unsuitable to be made into clothing because 
of their rapid and intense burning.
    9. Respondent never informed Milano that several lots of the fabric 
did not comply with the Clothing Standard. As a result, Milano 
distributed to a retailer between 3,300 to 4,000 sweatshirts made from 
fabric that violated the Clothing Standard.
    10. On February 2, 1999, the staff learned an 80 year old woman 
suffered third degree burns to 18% of her body when the blue pullover 
Milano sweatshirt she was wearing caught fire when she struck a book 
match to light her cigarette and a burning fragment of the match head 
landed on it.
    11. After receiving this report, the staff sampled a Milano blue 
pullover sweatshirt from a retailer. The staff tested the sweatshirt. 
The test results showed the sweatshirt violated the Clothing Standard 
and, therefore, was dangerously flammable and unsuitable for clothing 
because it was susceptible to rapid and intense burning when exposed to 
an ignition source. Respondent manufactured the blue sherpa fabric used 
by Milano to manufacture the sweatshirt that the staff tested.
    12. On March 17, 1999, the staff notified Milano that the 
sweatshirt failed to comply with the Clothing Standard.
    13. After receipt of this information, Milano tested sweatshirts 
made from fabric manufactured by Respondent. The test results confirmed 
the sweatshirts violated the Clothing Standard.
    14. Respondent knowingly manufactured for sale, sold, caused to be 
transported, and delivered after a sale, in commerce, fabric that 
violated the Clothing Standard, as the term ``knowingly'' is defined in 
section 5(e)(4) of the FFA, 15 U.S.C. 1194(e)(4), in violation of 
section 3 of the FFA, 15 U.S.C. 1192, and subjects Respondent to civil 
penalties pursuant to section 5(e)(1) of the FFA, 15 U.S.C. 1194(e)(1).

B. Violation of the Consumer Product Safety Act

    15. The allegations contained in paragraphs 4 through 14 above are 
repeated and realleged, as applicable.
    16. The fabric is a ``consumer product'' and Respondent Crawford 
Textile Corporation is a ``manufacturer'' of a ``consumer product'' 
which is ``distributed in commerce'' as those terms are defined in 
sections 3(a)(1), (4), and (11) of the CPSA, 15 U.S.C. 2052(a)(1), (4), 
and (11).
    17. Upon receipt of failing flammability test results in October 
1998, Respondent had sufficient information to conclude that several 
lots of the fabric contained a defect which could create a substantial 
product hazard or created an unreasonable risk of serious injury or 
death. Specifically, the fabric presented a flammability risk.
    18. Respondent also had sufficient information to foresee that its 
fabric could cause severe burn injuries or death.
    19. Respondent did not notify Milano or the Commission of its 
failing test results, or of the risk presented by garments manufactured 
with its fabric.
    20. On or about March 25, 1999, Respondent learned from Milano that 
the Commission had sampled and tested a sweatshirt made from fabric 
manufactured by Respondent and found it was dangerously flammable and 
unsuitable for clothing because of its rapid and intense burning.
    21. On or about March 29, 1999, Milano faxed to Respondent the 
Commission's and its own flammability test reports for sweatshirts made 
from fabric manufactured by Respondent. The test results showed that 
sweatshirts made from that fabric violated the Clothing Standard.
    22. Only after receiving all of this evidence and knowing the 
Commission was already aware of the hazard did Respondent notify the 
Commission about its hazardous fabric pursuant to section 15(b) of the 
CPSA.
    23. By October 1998, Respondent had obtained sufficient information 
to reasonably support the conclusion that the fabric contained a defect 
which could create a substantial product hazard or created an 
unreasonable risk of serious injury or death. Respondent failed to 
report such information in a timely manner as required by section 15(b) 
of the CPSA. A failure to report under section 15(b) is a prohibited 
act under section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4). By 
knowingly failing to report, Respondent is subject to civil penalties 
under section 20 of the CPSA, 15 U.S.C. 2069.

III. Response of Respondent

    24. Respondent denies the staff's allegations set forth in 
paragraphs 4 through 23 above.
    25. Respondent denies that it knowingly violated either the 
Flammable Fabrics Act or the Consumer Product Safety Act.

IV. Agreement of the Parties

    26. The Commission has jurisdiction over Respondent and the subject 
matter of this Settlement Agreement and Order under the Consumer 
Product Safety Act (CPSA), 15 U.S.C. 2051 et seq.; the Flammable 
Fabrics Act (FFA), 15 U.S.C. 1191 et seq.; and the Federal Trade 
Commission Act (FTCA), 15 U.S.C. 41 et seq.
    27. This Agreement is entered into for settlement purposes only and 
does not constitute an admission by Respondent or a determination by 
the Commission that Respondent knowingly violated the FFA's Clothing 
Standard and/or the CPSA's Reporting Requirement.
    28. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, this Settlement Agreement and Order shall be 
placed on the public record and shall be published in the Federal 
Register in accordance with the procedures set forth in 16 CFR 
1118.20(f). If the Commission does not receive any written request not 
to accept the Settlement Agreement and Order within 15 days, the 
Settlement Agreement and Order will be deemed to be finally accepted on 
the 16th day after the date it is published in the Federal Register.
    29. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, Respondent knowingly, 
voluntarily, and completely waives any rights it may have in this 
matter (1) to an administrative or judicial hearing, (2) to judicial 
review or other challenge or contest of the validity of the 
Commission's actions, (3) to a determination by the Commission as to 
whether Respondent failed to comply with the FFA, as alleged, or the 
CPSA, as alleged, (4) to a statement of findings of facts and 
conclusions of law, and (5) to any claims under the Equal Access to 
Justice Act.
    30. In settlement of the staff's allegations, Respondent agrees to 
pay a $150,000.00 civil penalty as set forth in the incorporated Order.
    31. The Commission may publicize the terms of the Settlement 
Agreement and Order.
    32. Upon final acceptance by the Commission of this Settlement 
Agreement and Order, the Commission shall issue the attached Order 
incorporated herein by reference.
    33. A violation of the attached Order shall subject Respondent to 
appropriate legal action.
    34. Agreement, understandings, representations, or interpretations 
made outside this Settlement Agreement and Order may not be used to 
vary or contradict its terms.

[[Page 59828]]

    35. The provisions of this Settlement Agreement and Order shall 
apply to Respondent and each of its successors and assigns.

Respondent Crawford Textile Corporation

Dated: August 30, 2000
John C. McCuiston,
President, Crawford Textile Corporation, 319-A South Westgate Drive, 
Greensboro, NC 27407.

Commission Staff

Alan H. Schoem,
Assistant Executive Director, Consumer Product Safety Commission, 
Office of Compliance, Washington, D.C. 20207-0001.

Eric L. Stone,
Director, Legal Division, Office of Compliance.
Dated: August 31, 2000
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into 
between Respondent Crawford Textile Corporation (hereinafter, 
``Respondent''), a corporation, and the staff of the Consumer 
Product Safety Commission (``Commission''); and the Commission 
having jurisdiction over the subject matter and Respondent; and it 
appearing that the Settlement Agreement and Order is in the public 
interest. IT IS
    Ordered, that the Settlement Agreement be and hereby is 
accepted, and it is
    Further ordered, that upon final acceptance of the Settlement 
Agreement and Order, Respondent Crawford Textile Corporation shall 
pay to the United States Treasury a civil penalty in the amount of 
One Hundred Fifty Thousand and 00/100 Dollars ($150,000,000) in 
three (3) payments each. The first payment of Fifty Thousand and 00/
100 Dollars ($50,000) shall be paid within twenty (20) days after 
service of the Final Order of the Commission (hereinafter, ``the 
anniversary date''). The second payment of Fifty Thousand and 00/100 
Dollars ($50,000.00) shall be paid within one (1) year of the 
anniversary date. The third payment shall be paid within two (2) 
years of the anniversary date. Upon the failure of Respondent 
Crawford Textile Corporation to make a payment or upon the making of 
a late payment by Respondent Crawford Textile Corporation (a) the 
entire amount of the civil penalty shall be due and payable, and (b) 
interest on the outstanding balance shall accrue and be paid at the 
federal legal rate of interest under the provisions of 28 U.S.C. 
1961(a) and (b).

    Provisionally accepted and provisioned Order issued on the 2nd 
day of October, 2000.

    By Order of the Commission.
Todd A. Stevenson,
Deputy Secretary, Consumer Product Safety Commission.
[FR Doc. 00-25659 Filed 10-5-00; 8:45 am]
BILLING CODE 6355-01-M