[Federal Register Volume 73, Number 156 (Tuesday, August 12, 2008)]
[Notices]
[Pages 46874-46876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18403]


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CONSUMER PRODUCT SAFETY COMMISSION

(CPSC Docket No. 08-COO 16)


A & R Knitwear, Inc., 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 A 
& R Knitwear, Inc., containing a civil penalty of $35,000.00.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
request with the Office of the Secretary by August 27, 2008.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 08-C0016, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Legal Division, Office of Compliance and Field Operations, Consumer 
Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 
20814-4408; telephone (301) 504-7587.

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

    August 5, 2008.
Todd A. Stevenson,
Secretary.

United States of America

Consumer Product Safety Commission

    In the Matter of A & R Knitwear, Inc., CPSC Docket No. 08-C0016

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, A & R Knitwear, Inc. (``A 
& R'') and the staff (``Staff'') of the United States Consumer 
Product Safety Commission (``Commission'') enter into this 
Settlement Agreement (``Agreement''). The Agreement and the 
incorporated attached Order (``Order'') settle the Staff's 
allegations set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established pursuant to, and responsible for the enforcement of, the 
Consumer Product Safety Act, 15 U.S.C. 2051-2084 (``CPSA'').
    3. A & R is a corporation organized and existing under the laws 
of New York, with its principal offices located in New York, NY. At 
all times relevant hereto, A & R imported and sold apparel.

Staff Allegations

    4. In 2007, A & R imported and sold to a nationwide retailer at 
least 5,214 Personal Identity V-neck sweaters with hood and neck 
drawstrings (``Drawstring Sweaters'').
    5. The nationwide retailer sold the Drawstring Sweaters to 
consumers.
    6. The Drawstring Sweaters are ``consumer product[s],'' and, at 
all times relevant hereto, A & R was a ``manufacturer'' of those

[[Page 46875]]

consumer products, which were ``distributed in commerce,'' as those 
terms are defined in CPSA sections 3(a)(1), (4), (11), and (12), 15 
U.S.C. 2052(a)(1), (4), (11), and (12).
    7. In February 1996, the Staff issued the Guidelines for 
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help 
prevent children from strangling or entangling on neck and waist 
drawstrings. The Guidelines state that drawstrings can cause, and 
have caused, injuries and deaths when they catch on items such as 
playground equipment, bus doors, or cribs. In the Guidelines, the 
Staff recommends that there be no hood and neck drawstrings in 
children's upper outerwear sized 2T to 12.
    8. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-
97, that incorporated the Guidelines. The Guidelines state that 
firms should be aware of the hazards and should be sure garments 
they sell conform to the voluntary standard.
    9. On May 19, 2006, the Commission posted on its Web site a 
letter from the Commission's Director of the Office of Compliance to 
manufacturers, importers, and retailers of children's upper 
outerwear. The letter urges them to make certain that all children's 
upper outerwear sold in the United States complies with ASTM F1816-
97. The letter states that the Staff considers children's upper 
outerwear with drawstrings at the hood or neck area to be defective 
and to present a substantial risk of injury to young children under 
Federal Hazardous Substances Act (``FHSA'') section 15(c), 15 U.S.C. 
1274(c). The letter also notes the CPSA's section 15(b) reporting 
requirements.
    10. The Commission was not informed of any incidents or injuries 
from the Drawstring Sweaters.
    11. A & R's distribution in commerce of the Drawstring Sweaters 
did not meet the Guidelines or ASTM F1816-97, failed to comport with 
the Staff's May 2006 defect notice, and posed a strangulation hazard 
to children.
    12. On December 6, 2007, the Commission and the nationwide 
retailer announced a recall of the Drawstring Sweaters, informing 
consumers that they should immediately remove the drawstrings to 
eliminate the hazard.
    13. A & R had presumed and actual knowledge that the Drawstring 
Sweaters distributed in commerce posed a strangulation hazard and 
presented a substantial risk of injury to children under FHSA 
section 15(c)(1), 15 U.S.C. 1274(c)(l). A & R had obtained 
information that reasonably supported the conclusion that the 
Drawstring Sweaters contained a defect that could create a 
substantial product hazard or that they created an unreasonable risk 
of serious injury or death. CPSA sections 15(b)(2) and (3), 15 
U.S.C. 2064(b)(2) and (3), required A & R to immediately inform the 
Commission of the defect and risk.
    14. A & R knowingly failed to immediately inform the Commission 
about the Drawstring Sweaters as required by CPSA sections 15(b)(2) 
and (3), 15 U.S.C. 2064(b)(2) and (3), and as the term ``knowingly'' 
is defined in CPSA section 20(d), 15 U.S.C. 2069(d). This failure 
violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant to 
CPSA section 20, 15 U.S.C. 2069, this failure subjected A & R to 
civil penalties.

A & R Response

    15. A & R denies the Staff's allegations above, including, but 
not limited to, the allegations that A & R failed to immediately 
inform the Commission about the Drawstring Sweaters as required by 
CPSA sections 15(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), or 
otherwise violated the CPSA or FHSA.
    16. A & R specifically denies that A & R violated the CPSA or 
the FHSA and that the Drawstring Sweaters contained a defect that 
could create a substantial product hazard or created an unreasonable 
risk of serious injury or death. A & R denies that it violated the 
reporting requirements of CPSA section 15(b), 15 U.S.C. 2064(b).
    17. A & R received no reports of incidents or injury related to 
the Drawstring Sweaters, and A & R was unaware of both the 
Guidelines and the May 2006 letter posted on the Commission's Web 
site stating that the staff of the Commission's Office of Compliance 
considers children's upper outerwear with drawstrings at the head or 
neck area to be defective and to present a substantial risk of 
injury to young children. Accordingly, A & R denies that any alleged 
violation of the CPSA or FHSA occurred ``knowingly'' as defined in 
CPSA section 20(d), 15 U.S.C. 2069(d).
    18. Between November 2006 and June 2008, the CPSC posted on its 
Web site at least twenty-two recall announcements involving 
children's drawstring garments. These twenty-two recall 
announcements referenced and linked electronically to the 
Guidelines. The Guidelines, which are entitled in part ``Recommended 
Guidelines,'' state that the ``CPSC's drawstring guidelines do not 
represent a standard or mandatory requirement set by the agency.'' 
Accordingly, at the time A & R imported and sold the Drawstring 
Sweaters, the Commission had not provided adequate notice that civil 
penalties could arise from A & R's conduct.
    19. As soon as A & R was alerted by the retailer about safety 
concerns with the drawstrings in the Drawstring Sweaters, it 
undertook efforts to have the drawstrings removed from the garments. 
In addition, A & R fully cooperated with the retailer and the 
Commission in connection with the December 2007 recall of the 
Drawstring Sweaters, which resulted in A & R's removal of the 
drawstrings from 2,332 Drawstring Sweaters in the possession of A & 
R.
    20. A & R has entered into the Agreement for settlement purposes 
only, and has made a business decision to avoid additional expenses 
and distractions related to further administrative procedures and 
litigation. The Agreement and Order do not constitute and are not 
evidence of any fault or wrongdoing on the part of A & R.

Agreement of the Parties

    21. Under the CPSA, the Commission has jurisdiction over this 
matter and over A & R.
    22. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by A & R, or a 
determination by the Commission, that A & R has knowingly violated 
the CPSA.
    23. In settlement of the Staff's allegations, A & R shall pay a 
civil penalty in the amount of thirty-five thousand dollars 
($35,000.00) within twenty (20) calendar days of service of the 
Commission's final Order accepting the Agreement. The payment shall 
be by check payable to the order of the United States Treasury.
    24. Upon provisional acceptance of the Agreement, the Agreement 
shall be placed on the public record and published in the Federal 
Register in accordance with the procedures set forth in 16 CFR 
1118.20(e). In accordance with 16 CFR 1118.20(f), if the Commission 
does not receive any written request not to accept the Agreement 
within fifteen (15) calendar days, the Agreement shall be deemed 
finally accepted on the sixteenth (16th) calendar day after the date 
it is published in the Federal Register.
    25. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, A & R knowingly, voluntarily, and 
completely waives any rights it may have regarding the Staff's 
allegations to the following: (1) An administrative or judicial 
hearing; (2) judicial review or other challenge or contest of the 
validity of the Order or of the Commission's actions; (3) a 
determination by the Commission of whether A & R failed to comply 
with the CPSA and its underlying regulations; (4) a statement of 
findings of fact and conclusions of law; and (5) any claims under 
the Equal Access to Justice Act.
    26. The Commission may publicize the terms of the Agreement and 
the Order.
    27. The Agreement and the Order shall apply to, and be binding 
upon, A & R and each of its successors and assigns.
    28. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject A & R to appropriate 
legal action.
    29. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and the Order may not be 
used to vary or contradict their terms. The Agreement shall not be 
waived, amended, modified, or otherwise altered without written 
agreement thereto executed by the party against whom such waiver, 
amendment, modification, or alteration is sought to be enforced.
    30. If any provision of the Agreement and the Order is held to 
be illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and the Order, such 
provision shall be fully severable. The balance of the Agreement and 
the Order shall remain in full force and effect, unless the 
Commission and A & R agree that severing the provision materially 
affects the purpose of the Agreement and the Order.
    31. Pursuant to section 6(d) of the Interim Delegation of 
Authority ordered by the Commission on February 1, 2008, the 
Commission delegated to the Assistant Executive Director for 
Compliance and Field Operations the authority to act, with the 
concurrence of the General Counsel, for the Commission under 16 CFR 
1118.20 with respect to Staff allegations that any person or

[[Page 46876]]

firm violated 15 U.S.C. 2068, where the total amount of the 
settlement involves no more than $100,000.

A & R Knitwear, Inc.

    Dated: 7/21/08.

By: /s/ David Rosenbluth,
David Rosenbluth,
President, A & R Knitwear, Inc., 530 7th Avenue, Suite 901, New 
York, NY 10018.

    Dated: 7/25/08.

By: /s/ Michael T. Cone,
Michael T. Cone, Esquire,
Neville Peterson, LLP 17 State Street, 19th Floor, New York, NY 
10004, Attorney for A & R Knitwear, Inc.

U.S. Consumer Product Safety Commission Staff

J. Gibson Mullan,
Assistant Executive Director, Office of Compliance and Field 
Operations.

Ronald G. Yelenik,
Acting Director, Legal Division, Office of Compliance and Field 
Operations.

    Dated: 7/31/08.

By: /s/ Dennis C. Kacoyams,
Dennis C. Kacoyams,
Trial Attorney, Legal Division, Office of Compliance and Field 
Operations.

United States of America

Consumer Product Safety Commission

    In the Matter of A & R Knitwear, Inc., CPSC Docket No. 08-C16

Order

    Upon consideration of the Settlement Agreement entered into 
between A & R Knitwear, Inc. (``A & R'') and the U.S. Consumer 
Product Safety Commission (``Commission'') staff, and the Commission 
having jurisdiction over the subject matter and over A & R, and 
pursuant to the authority delegated in section 6(d) of the Interim 
Delegation of Authority ordered by the Commission on February 1, 
2008, and it appearing that the Settlement Agreement and the Order 
are in the public interest, it is Ordered, that the Settlement 
Agreement be, and hereby is, accepted; and it is Further ordered, 
that A & R shall pay a civil penalty in the amount of thirty-five 
thousand dollars ($35,000.00) within twenty (20) calendar days of 
service of the Commission's final Order accepting the Agreement. The 
payment shall be made by check payable to the order of the United 
States Treasury. Upon the failure of A & R to make the foregoing 
payment when due, interest on the unpaid amount shall accrue and be 
paid by A & R at the federal legal rate of interest set forth at 28 
U.S.C. 1961(a) and (b).

    Provisionally accepted and provisional Order issued on the 4th 
day of August, 2008.

By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. E8-18403 Filed 8-11-08; 8:45 am]
BILLING CODE 6355-01-M