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[Federal Register Volume 80, Number 40 (Monday, March 2, 2015)]
[Notices]
[Pages 11181-11183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-04154]

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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 15-C0003]

General Electric Company, Provisional Acceptance of a Settlement 
Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: It is the policy of the Commission to publish settlements 
which it provisionally accepts under the Consumer Product Safety Act in 
the Federal Register in accordance with the terms of 16 CFR 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
General Electric Company, containing a civil penalty of $3,500,000, 
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 March 17, 2015.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 15-C0003 Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Jennifer C. Argabright, Trial 
Attorney, Office of the General Counsel, Division of Compliance, 
Consumer Product Safety Commission, 4330 East West Highway, Bethesda, 
Maryland 20814-4408; telephone (301) 504-7808.

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

    Dated: February 24, 2015.
Alberta E. Mills,
Acting Secretary.

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

    In the Matter of: GENERAL ELECTRIC COMPANY, CPSC Docket No.: 15-
C0003

SETTLEMENT AGREEMENT

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
Sec. Sec.  2051-2089 (CPSA) and 16 CFR 1118.20, General Electric 
Company (``GE'' or ``Firm''), and the United States Consumer Product 
Safety Commission (``Commission''), through its staff, hereby enter 
into this Settlement Agreement (``Agreement''). The Agreement, and 
the incorporated attached Order, resolve staff's charges set forth 
below.

THE PARTIES

    2. The Commission is an independent federal regulatory agency, 
established pursuant to, and responsible for the enforcement of, the 
CPSA, 15 U.S.C. Sec. Sec.  2051-2089. By executing the Agreement, 
staff is acting on behalf of the Commission, pursuant to 16 CFR 
Sec.  1118.20(b). The Commission issues the Order under the 
provisions of the CPSA.
    3. GE is a corporation, organized and existing under the laws of 
the state of New York, with its principal place of business in 
Fairfield, CT. GE Appliances (``GEA'' or ``GE Appliances'') is an 
unincorporated business unit of GE that is located in Louisville, 
KY.

STAFF CHARGES

GE RANGES

    4. Between June 2002 through December 2004, GE imported into the 
United States approximately 28,000 dual fuel ranges (the Range). The 
Range was sold through department and appliance stores nationwide 
for approximately $1,300 to $2,000 between June 2002 and December 
2005.
    5. The Range is a 30-inch wide GE Profile Dual Fuel Freestanding 
Range with an electric range with gas cooktop burners. The Range is 
a ``consumer product'' ``distributed in commerce,'' as those terms 
are defined or used in sections 3(a)(5), (8), and (11) of the CPSA, 
15 U.S.C. Sec.  2052(a)(5), (8), and (11). At all relevant times, GE 
was a ``manufacturer'' of the Range, as such term is defined or used 
in sections 3(a)(11) of the CPSA, 15 U.S.C. Sec.  2052(a)(11).
    6. The Range is defective because a connector in the wire 
harness at the rear of the Range can overheat, posing a fire and 
burn hazard to consumers.
    7. GE first received notice of a possible Range failure in 2003, 
when a consumer reported to GE that she had called the fire 
department because the Range had caught fire while it was pre-
heating. A GE technician noted that the wiring had shorted out. By 
the end of 2004, GE received four more consumer complaints of fire 
or melted wires. In 2004, GE technicians examined several of the 
Ranges involved in the consumer complaints and confirmed that the 
wiring harness at the rear of the Range could overheat, causing a 
fire hazard.
    8. In December 2004, to reduce the risk of an overheated 
connector, GE redesigned the Range to remove the connectors in the 
wiring harness. By this time, GE had obtained sufficient information 
that reasonably supported the conclusion that the Range contained a 
defect or possible defect which could create a substantial product 
hazard or created an unreasonable risk of serious injury or death. 
GE was required 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. Sec.  2064(b)(3) and (4).
    9. After the redesign of the Range, GE continued to receive 
reports from consumers of overheated wiring and fires that occurred 
in the back of the Range.
    10. Despite having information regarding the Range's defect or 
risk, GE 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. Sec. Sec.  2064(b)(3) and (4).
    11. GE did not file its Full Report with the Commission until 
February 25, 2009. GE recalled the Range on April 8, 2009. By that 
time, GE was aware of an additional eight reports of harness and 
wiring overheating in the back of the Range, including five in which 
the consumer reported that the unit or wiring caught fire. GE failed 
to update the Commission regarding these new incidents.

GE DISHWASHERS

    12. Between July 2003 and December 2006, GE manufactured 
approximately 174,000 stainless steel tub dishwashers (the 
Dishwasher). The Dishwasher was sold through department and 
appliance stores nationwide for approximately $750 to $1,400 between 
July 2003 and October 2010.
    13. The Dishwasher was sold under brand name of GE Profile or GE 
Monogram. The Dishwasher is a ``consumer product'' ``distributed in 
commerce,'' as those terms are defined or used in sections 3(a)(5), 
(8), and (11) of the CPSA, 15 U.S.C. Sec.  2052(a)(5), (8), and 
(11). At all relevant times, GE was a ``manufacturer'' of the 
Dishwasher, as such term is defined or used in sections 3(a)(11) of 
the CPSA, 15 U.S.C. Sec.  2052(a)(11).

[[Page 11182]]

    14. The Dishwasher is defective because it can short circuit due 
to electrolytic condensate on the control board. The short circuit 
can result in an overheated connector in the dishwasher, posing a 
fire and burn hazard to consumers.
    15. GE first received notice of a possible Dishwasher control-
related incident in 2007, when a consumer reported to GE that his 
dishwasher had caught fire in the middle of the night due to an 
overheated control panel. In 2008 and 2009, GE received more reports 
of Dishwasher control-related fires, and GE paid out insurance 
settlements to several consumers based on these reports. Many of 
these reports explicitly alleged a fire that originated at the 
control panel within the Dishwasher's metal door.
    16. Despite this information, GE did not file a Full Report 
concerning the Dishwasher with the Commission until September 14, 
2010. GE recalled the Dishwasher on October 26, 2010.
    17. In failing to inform the Commission about the Range or 
Dishwasher (together, ``Subject Products'') immediately, GE 
knowingly violated section 19(a)(4) of the CPSA, 15 U.S.C. Sec.  
2068(a)(4), as the term ``knowingly'' is defined in section 20(d) of 
the CPSA, 15 U.S.C. Sec.  2069(d).
    18. Pursuant to section 20 of the CPSA, 15 U.S.C. Sec.  2069, GE 
is subject to civil penalties for its knowing failure to report, as 
required under section 15(b) of the CPSA, 15 U.S.C. Sec.  2064(b).

RESPONSE OF GENERAL ELECTRIC COMPANY

    19. GE does not admit the staff's charges set forth in 
paragraphs 4 through 18 above, including, but not limited to, the 
charge that the Subject Products contained a defect that could 
create a substantial product hazard or created an unreasonable risk 
of serious injury or death, and the charge that GE failed to notify 
the Commission in a timely manner, in accordance with section 15(b) 
of the CPSA, 15 U.S.C. Sec.  2064(b).
    20. GE enters into this Agreement to settle this matter without 
the delay and expense of litigation. GE enters into this Agreement 
and agrees to pay the amount referenced below in compromise of the 
staff's charges.
    21. GE voluntarily notified the Commission in connection with 
the Ranges in February 2009. GE was (and is) not aware of any report 
of injury associated with the Ranges and reported issue. GE 
voluntarily notified the Commission in connection with the 
Dishwashers in August 2010. GE was (and is) not aware of any report 
of serious injury associated with the Dishwashers and reported 
issue. GE carried out voluntary recalls in cooperation with the 
Commission and acted to reduce the potential risk of injury.
    22. At all relevant times, GEA has had a product safety 
compliance program, including dedicated product safety personnel, 
new product qualification design and testing safety-related 
requirements, written product safety compliance policies, and 
written procedures for notifying the Commission about potential 
safety issues, in accordance with section 15(b) of the CPSA. GEA's 
product safety compliance program, including its policies and 
procedures, has been enhanced over time, as appropriate.

AGREEMENT OF THE PARTIES

    23. Under the CPSA, the Commission has jurisdiction over the 
matter involving the Products described herein and over GE.
    24. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by GE or a 
determination by the Commission that GE violated the CPSA's 
reporting requirements.
    25. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, GE shall pay a civil penalty in the 
amount of three million, five hundred thousand dollars ($3,500,000) 
within twenty (20) calendar days after receiving service of the 
Commission's final Order accepting the Agreement. The payment shall 
be made by electronic wire transfer to the Commission via: http://www.pay.gov.
    26. After staff receives this Agreement executed on behalf of 
GE, staff shall promptly submit the Agreement to the Commission for 
provisional acceptance. Promptly following 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 CFR Sec.  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 
the Agreement is published in the Federal Register, in accordance 
with 16 CFR Sec.  1118.20(f).
    27. This Agreement is conditioned upon, and subject to, the 
Commission's final acceptance, as set forth above, and it is subject 
to the provisions of 16 C.F.R Sec.  1118.20(h). Upon the later of: 
(i) Commission's final acceptance of this Agreement and service of 
the accepted Agreement upon GE, and (ii) the date of issuance of the 
final Order, this Agreement shall be in full force and effect and 
shall be binding upon the parties.
    28. Effective upon the later of: (i) the Commission's final 
acceptance of the Agreement and service of the accepted Agreement 
upon GE, and (ii) the date of issuance of the final Order, for good 
and valuable consideration, GE hereby expressly and irrevocably 
waives and agrees not to assert any past, present, or future rights 
to the following, in connection with the matter described in this 
Agreement: (i) an administrative or judicial hearing; (ii) judicial 
review or other challenge or contest of the Commission's actions; 
(iii) a determination by the Commission of whether GE failed to 
comply with the CPSA and the underlying regulations; (iv) a 
statement of findings of fact and conclusions of law; and (v) any 
claims under the Equal Access to Justice Act.
    29. GE represents and agrees that GEA has and shall maintain a 
compliance program designed to ensure compliance with sections 15(b) 
of the CPSA with respect to any consumer product imported, 
manufactured, and/or distributed by GEA. In addition to the program 
components set out in paragraph 22 of this Agreement, GE represents 
and agrees that GEA's compliance program contains and shall continue 
to contain the following elements: (i) written standards and 
policies; (ii) a mechanism for confidential employee reporting of 
compliance-related questions or concerns to either a compliance 
officer or to another senior manager with authority to act as 
necessary; (iii) effective communication of company compliance-
related policies and procedures regarding CPSA sections 15(b) to all 
applicable employees through training programs or otherwise; (iv) 
GEA senior management responsibility for, and general board 
oversight of, compliance; and (v) retention of all compliance-
related records for at least five (5) years, and availability of 
such records to staff upon reasonable request.
    30. GE represents and agrees that GEA has and shall maintain and 
enforce a system of internal controls and procedures designed to 
ensure that, with respect to all consumer products imported, 
manufactured, and/or distributed by GEA: (i) information required to 
be disclosed by GE to the Commission is recorded, processed, and 
reported in accordance with applicable law; (ii) all reporting made 
to the Commission is timely, truthful, complete, accurate, and in 
accordance with applicable law; and (iii) prompt disclosure is made 
to GE's management of any significant deficiencies or material 
weaknesses in the design or operation of such internal controls that 
are reasonably likely to affect adversely, in any material respect, 
GEA's ability to record, process, and report to the Commission in 
accordance with applicable law.
    31. Upon reasonable request of staff, GE shall cause GEA to 
provide written documentation of its internal controls and 
procedures, including, but not limited to, the effective dates of 
the procedures and improvements thereto. GE shall cause GEA to 
cooperate fully and truthfully with staff and shall make available 
all non-privileged information and materials, and personnel deemed 
necessary by staff to evaluate GE's compliance with the terms of the 
Agreement.
    32. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order. Any press 
release shall substantially conform to the terms of this Settlement 
Agreement.
    33. GE represents that the Agreement: (i) is entered into freely 
and voluntarily, without any degree of duress or compulsion 
whatsoever; (ii) has been duly authorized; and (iii) constitutes the 
valid and binding obligation of GE, enforceable against GE in 
accordance with its terms. GE also represents that GE will not 
directly or indirectly receive any reimbursement, indemnification, 
insurance-related payment, or other payment in connection with the 
civil penalty to be paid by GE pursuant to the Agreement and Order. 
The individuals signing the Agreement on behalf of GE represent and 
warrant that they are duly authorized by GE to execute the 
Agreement.
    34. The Commission signatories represent that they are signing 
the Agreement in their official capacities and that they are 
authorized to execute this Agreement.
    35. The Agreement is governed by the laws of the United States.

[[Page 11183]]

    36. Except as set forth in Paragraph 37, the Agreement and the 
Order shall apply to, and be binding upon, GE and each of its 
successors, transferees, and assigns, and a violation of the 
Agreement or Order may subject GE, and each of its successors, 
transferees and assigns, to appropriate legal action.
    37. Paragraphs 29-31 of the Agreement shall apply to, and be 
binding upon, GE, unless and until GE no longer owns GEA, at which 
time Paragraphs 29-31 only shall apply to, and be binding upon, each 
of GE's successors, transferees, and assigns that acquire GEA.
    38. The Agreement and the Order constitute the complete 
agreement between the parties on the subject matter contained 
therein.
    39. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and the Order may not be 
used to vary or contradict their terms. For purposes of 
construction, the Agreement shall be deemed to have been drafted by 
both of the parties and shall not, therefore, be construed against 
any party for that reason in any subsequent dispute.
    40. The Agreement may not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
CFR Sec.  1118.20(h). The Agreement may be executed in counterparts.
    41. If any provision of the Agreement or the Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and the Order, such 
provision shall be fully severable. The balance of the Agreement and 
the Order shall remain in full force and effect, unless the 
Commission and GE agree in writing that severing the provision 
materially affects the purpose of the Agreement and the Order.

GENERAL ELECTRIC COMPANY

Dated: February 4, 2015

By:--------------------------------------------------------------------

Kevin Nolan
Vice President, Technology
GE Appliances, a division of the General Electric Company
Buechel Bank Road
Louisville, KY 40225

Dated: February 3, 2015

By:--------------------------------------------------------------------

Eric A. Rubel
Counsel to General Electric Company
Arnold & Porter LLP
555 Twelfth Street, NW
Washington, DC 20004-1206

U.S. CONSUMER PRODUCT SAFETY COMMISSION

Stephanie Tsacoumis
General Counsel

Mary Boyle
Deputy General Counsel

Mary B. Murphy
Assistant General Counsel

Dated: February 3, 2015

By:--------------------------------------------------------------------

Jennifer C. Argabright, Trial Attorney
Division of Compliance
Office of the General Counsel

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

    In the Matter of: General Electric Company

CPSC Docket No.: 15-C0003

ORDER

    Upon consideration of the Settlement Agreement entered into between 
General Electric Company (GE), and the U.S. Consumer Product Safety 
Commission (Commission), and the Commission having jurisdiction over 
the subject matter and over GE, and it appearing that the Settlement 
Agreement and the Order are in the public interest, it is:
    ORDERED that the Settlement Agreement be, and is, hereby, accepted; 
and it is
    FURTHER ORDERED that GE shall comply with the terms of the 
Settlement Agreement and shall pay a civil penalty in the amount of 
three million, five hundred thousand dollars ($3,500,000) within twenty 
(20) days after service of the Commission's final Order accepting the 
Settlement Agreement. The payment shall be made by electronic wire 
transfer to the Commission via: http://www.pay.gov. Upon the failure of 
GE to make the foregoing payment when due, interest on the unpaid 
amount shall accrue and be paid by GE at the federal legal rate of 
interest set forth at 28 U.S.C. Sec.  1961(a) and (b). If GE fails to 
make such payment or to comply in full with any other provision of the 
Settlement Agreement, such conduct will be considered a violation of 
the Settlement Agreement and Order.
    Provisionally accepted and provisional Order issued on the 13th day 
of February, 2015.
    BY ORDER OF THE COMMISSION:
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Alberta Mills, Acting Secretary
U.S. Consumer Product Safety Commission

[FR Doc. 2015-04154 Filed 2-27-15; 8:45 am]
BILLING CODE 6355-01-P
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