[Federal Register Volume 79, Number 210 (Thursday, October 30, 2014)]
[Notices]
[Pages 64576-64579]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25818]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 15-C0001]


One World Technologies, Inc., and Baja, 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 
One World Technologies, Inc., and Baja, Inc., containing a civil 
penalty of $4.3

[[Page 64577]]

million dollars ($4,300,000.00 U.S. dollars), within twenty (20) days 
of service of the Commission's final Order accepting the Settlement 
Agreement.\1\
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    \1\ The Commission voted (4-1) to provisionally accept this 
Settlement Agreement and Order. Chairman Elliot F. Kaye and 
Commissioners Robert S. Adler, Marietta S. Robinson and Joseph P. 
Mohorovic voted to provisionally accept the Settlement Agreement and 
Order. Commissioner Ann Marie Buerkle voted to reject the Settlement 
Agreement and Order.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
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request with the Office of the Secretary by November 14, 2014.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 15-C0001 Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Daniel Vice, Trial Attorney, Office of 
the General Counsel, Consumer Product Safety Commission, 4330 East West 
Highway, Bethesda, Maryland 20814-4408; telephone (301) 504-6996.

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

    Dated: October 27, 2014.
Todd A. Stevenson,
Secretary.

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

In the Matter of:
One World Technologies, Inc.,
and Baja, Inc.
CPSC Docket No.: 15-C0001

SETTLEMENT AGREEMENT

    1. In accordance with the Consumer Product Safety Act (CPSA), 15 
U.S.C. Sec. Sec.  2051-2089 and 16 C.F.R. Sec.  1118.20, One World 
Technologies, Inc. and Baja, Inc. (the Firm), and the U.S. Consumer 
Product Safety Commission (Commission), through its staff (staff), 
enter into this Settlement Agreement (Agreement). The Agreement and the 
incorporated attached Order (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. By executing the Agreement, staff is acting on behalf of the 
Commission, pursuant to 16 C.F.R. Sec.  1118.20(b). The Commission 
issues the Order under the provisions of the CPSA.
    3. Baja, Inc. (Baja) is incorporated in Delaware with its principal 
place of business in Anderson, South Carolina. One World Technologies, 
Inc., is a Delaware corporation with its principal offices in Anderson, 
South Carolina. One World Technologies, Inc., and Baja are corporate 
affiliates.

STAFF CHARGES

    4. Baja imported and sold nationwide in the United States 
approximately 308,000 minibikes and go-carts with model numbers 
beginning with BB65, DB30, DN65, DR90, HT65, MB165, MB196, SD65, TR65, 
WR65, and WR90 (Subject Products).
    5. The Subject Products (a) contain a defect which could create a 
substantial product hazard, and (b) create an unreasonable risk of 
serious injury because the gas cap can leak or detach from the fuel 
tank, posing a fire and burn hazard to consumers, and because the 
throttle can stick due to an improperly positioned fuel line and 
throttle cable.
    6. The Subject Products are ``consumer products,'' and at all 
relevant times, Baja was a ``manufacturer and distributor'' of these 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined or used in sections 3(a)(5), (7), (8), (9) and (11) 
of the CPSA, 15 U.S.C. Sec.  2052(a)(5), (7), (8), (9) and (11).
    7. Baja received four consumer reports of fires that occurred as a 
result of a leaking gas cap, some of which resulted in burn injuries to 
consumers, including children.
    8. The family of a child who alleged that he was injured when a gas 
cap leak on a WR65 minibike resulted in a fire sued Baja.
    9. The Firm settled personal injury claims of consumers who were 
injured as a result of a leaking gas cap.
    10. Baja received approximately two dozen consumer reports of stuck 
throttles in the Subject Products.
    11. Baja received communications from retailers reporting that 
consumers had experienced sudden acceleration while riding the Subject 
Products.
    12. Baja worked with the manufacturer to devise design changes to 
shorten the fuel line and remedy the hazard. Baja then implemented the 
design changes but did not notify consumers who owned the Subject 
Products about the design changes.
    13. The Firm had information which reasonably supported the 
conclusion that the Subject Products (a) contained a defect which could 
create a substantial product hazard, and (b) created an unreasonable 
risk of injury, requiring immediate reporting to the Commission under 
section 15(b) of the CPSA, 15 U.S.C. Sec.  2064(b). The Firm failed to 
so report.
    14. The Firm did not report to the Commission under section 15(b) 
of the CPSA with respect to the Subject Products until June 2, 2010.
    15. In failing to inform the Commission about Subject Products 
immediately as required by section 15(b) of the CPSA, the Firm 
knowingly violated CPSA section 19(a)(4), 15 U.S.C. Sec.  2068(a)(4), 
as the term ``knowingly'' is defined in CPSA section 20(d), 15 U.S.C. 
Sec.  2069(d).
    16. Pursuant to CPSA section 20, 15 U.S.C. Sec.  2069, the Firm is 
subject to civil penalties for its knowing violation of CPSA section 
19(a)(4), 15 U.S.C. Sec.  2068(a)(4).

THE FIRM'S RESPONSE

    17. This Agreement does not constitute an admission by the Firm to 
the charges set forth in paragraphs 4 through 16, including but not 
limited to the charge that the Subject Products contained a defect 
which could create a substantial product hazard or created an 
unreasonable risk of serious injury or death, and the charge that the 
Firm failed to notify the Commission in a timely manner, in accordance 
with section 15(b) of the CPSA, 15 U.S.C. 2064(b).
    18. The four reports of fires that occurred as a result of a 
leaking gas cap cited by the staff were out of over 250,000 units on 
the market. In two of the instances, the gas cap was not available for 
Baja's inspection and in the third instance the unit was so badly 
damaged by fire that Baja could not determine the cause of the 
incident.
    19. The fourth incident involved a child who was badly burned and 
who filed suit. However, it was the opinion of Baja's expert, following 
product inspections that took place in 2009 and 2011, that the fuel 
leak came from a damaged fuel line, that the bike had not been properly 
maintained and that the gas cap, a standard bayonet cap, was not 
defective. This was the only one of the four cases in which a suit was 
filed, or in which Baja settled a lawsuit.
    20. The Firm received reports from two retailers referred to by the 
staff during the period 2008-2009 when there were over 150,000 units in 
use. Following the required pre-sale inspection of the vehicles, the 
retailers discovered a loose fuel line. The units were fixed before 
they were sold to consumers and no injuries were

[[Page 64578]]

reported. There were no prior reports of a loose fuel line.
    21. In an effort to minimize the possibility that units with a 
loose fuel line would be delivered to retailers in the future, Baja 
contacted the manufacturer to improve its pre-shipment inspection 
procedures and reduce the length of the fuel line.
    22. Although two dozen consumers submitted reports of a stuck 
throttle, they did not claim that these were caused by an improperly 
positioned fuel line and throttle cable.
    23. The consumers reported only a stuck throttle which could have 
many other potential causes besides an improperly positioned fuel line 
and throttle cable, including: debris hanging up the throttle cable or 
in the carburetor; worn, broken or kinked throttle cable; dirt under or 
on the throttle slide and other damage caused by poor maintenance or 
misuse of a vehicle.
    24. The Firm has entered into this settlement to avoid the cost, 
distraction, delay, uncertainly and inconvenience of protracted 
litigation or other proceedings.

AGREEMENT OF THE PARTIES

    25. Under the CPSA, the Commission has jurisdiction over the matter 
involving Subject Products and over the Firm.
    26. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation or other proceedings, the Firm shall pay a civil penalty in 
the amount of four million three hundred thousand dollars 
(US$4,300,000.00), which shall be due and payable within twenty 
calendar days after receiving service of the Commission's final Order 
accepting the Agreement. All payments to be made under the Agreement 
shall constitute debts owing to the United States and shall be made by 
electronic wire transfer to the United States via: http://www.pay.gov.
    27. The parties agree that this settlement figure is predicated, 
among other things, upon the accuracy of oral and written 
representations of, and statements by, the Firm and the Firm's 
representatives (including representations set forth in the Agreement).
    28. The Firm currently has a written Post-Sale Product Safety 
Compliance Program, an established Product Hazard Committee and a 
Product Safety Education and Training Program (collectively, the 
Programs), designed to ensure compliance with the statutes and 
regulations enforced by the Commission (CPSC authority). These Programs 
contain, or will be modified to contain, the following elements:
    a) written standards and policies;
    b) systematic procedures for (i) reviewing and assessing reports, 
claims and other information (including consumer and retailer incident 
reports and personal injury claims) for potential safety issues, 
including the potential existence of a substantial risk of injury or a 
defect, and (ii) referring such reports, claims and other information 
to appropriate personnel responsible for complying with CPSC authority;
    c) a mechanism for confidential employee reporting of compliance-
related questions or concerns to a senior manager with authority to act 
as necessary;
    d) effective communication of company compliance-related policies 
and procedures to all employees, through training programs or 
otherwise;
    e) senior manager responsibility for compliance and senior manager 
accountability for violations of the statutes and regulations enforced 
by the Commission;
    f) oversight of compliance by the Firm's governing body; and
    g) retention of all compliance-related records for at least five 
years, and availability of such records to CPSC staff upon request.
    29. It is the Firm's policy and the Firm agrees to maintain and 
enforce a system of internal controls and procedures designed to ensure 
that:
    a) information required to be disclosed by the Firm to the 
Commission is recorded, processed, and reported in accordance with 
applicable law;
    b) all reporting made to the Commission is timely, truthful, 
complete, and accurate; and
    c) prompt disclosure is made to the Firm management of any 
significant deficiencies or material weaknesses in the design or 
operation of such internal controls that are reasonably likely to 
adversely affect in any material respect the Firm's ability to record, 
process, and report to the Commission in accordance with applicable 
law.
    30. Upon request of staff, the Firm shall provide written 
documentation of any material changes in the Programs.
    31. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by the Firm or a 
determination by the Commission that the Firm violated the CPSA.
    32. Following staff's receipt of the Agreement executed on behalf 
of the Firm, 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 C.F.R. Sec.  1118.20(e). 
If, within fifteen calendar days, the Commission does not receive any 
written request not to accept the Agreement, the Agreement shall be 
deemed finally accepted on the sixteenth calendar day after the date 
the Agreement is published in the Federal Register, in accordance with 
16 C.F.R. Sec.  1118.20(f).
    33. The Agreement is conditioned upon, and subject to, the 
Commission's final acceptance, as set forth above, and is subject to 
the provisions of 16 C.F.R. Sec.  1118.20(h). Upon the later of: (i) 
The Commission's final acceptance of the Agreement and service of the 
accepted Agreement upon the Firm, and (ii) the date of issuance of the 
final Order, the Agreement shall be in full force and effect and shall 
be binding upon the parties.
    34. Effective upon the later of: (i) The Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
the Firm, and (ii) the date of issuance of the final Order, for good 
and valuable consideration, the Firm hereby expressly and irrevocably 
waives and agrees not to assert any past, present, or future rights to 
the following actions or remedies in connection with the matters 
described in the Agreement: (a) An administrative or judicial hearing; 
(b) judicial review or other challenge or contest of the validity of 
the Order or of the Commission's actions; (c) a determination by the 
Commission of whether the Firm 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.
    35. Upon request of staff, the Firm shall cooperate fully and 
truthfully with staff and shall make available all information, 
materials, and personnel deemed necessary by staff to evaluate the 
Firm's compliance with the terms of the Agreement.
    36. The parties acknowledge and agree that the Commission may make 
public disclosure of the terms of the Agreement and the Order.
    37. The Firm 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 the Firm and each of its successors 
and/or assigns, enforceable

[[Page 64579]]

against the Firm in accordance with the Agreement's terms. The 
individuals signing the Agreement on behalf of the Firm represent and 
warrant that they are duly authorized by the Firm to execute the 
Agreement.
    38. The Commission signatories represent that they are signing the 
Agreement in their official capacities and that they are authorized to 
execute the Agreement.
    39. The Agreement is governed by the laws of the United States.
    40. The Agreement and the Order shall apply to, and be binding upon 
the Firm and each of its subsidiaries, successors, transferees, and 
assigns, and a violation of the Agreement or Order may subject such 
entities to appropriate legal action.
    41. The Agreement and the Order constitute the complete agreement 
among the parties on the subject matter contained herein and therein.
    42. 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 be construed against any party for that reason in any 
subsequent dispute.
    43. The Agreement shall not be waived, amended, modified, or 
otherwise altered, except as in accordance with the provisions of 16 
C.F.R. Sec.  1118.20(h). The Agreement may be executed in counterparts.
    44. 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 the Firm agree that severing the provision materially affects the 
purpose of the Agreement and Order.

Dated: 10/13/14

BAJA, INC.

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

Michael Konick
Treasurer

ONE WORLD TECHNOLOGIES, INC.

Dated: 10/13/14

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

Michael Konick
Chief Financial Officer

U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF

Stephanie Tsacoumis
General Counsel

Mary T. Boyle
Deputy General Counsel

Mary B. Murphy
Assistant General Counsel

Dated: 10/14/14

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

Daniel Vice
Trial Attorney

UNITED STATES OF AMERICA

CONSUMER PRODUCT SAFETY COMMISSION

In the Matter of:
One World Technologies, Inc.,
and
Baja, Inc.

CPSC Docket No.: 15-C0001

ORDER

    Upon consideration of the Settlement Agreement entered into between 
One World Technologies, Inc., and Baja, Inc. (the Firm), and the U.S. 
Consumer Product Safety Commission (Commission), and the Commission 
having jurisdiction over the subject matter and over the Firm, 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 the Firm shall comply with the terms of the 
Settlement Agreement and shall pay a civil penalty of four million 
three hundred thousand dollars (US$4,300,000.00), within twenty 
calendar days after receiving service of the Commission's final Order 
accepting the Settlement Agreement. Upon failure of the Firm to make 
the foregoing payment when due, interest on the unpaid amount shall 
accrue and be paid by the Firm at the federal legal rate of interest 
set forth at 28 U.S.C. Sec.  1961(a) and (b). If the Firm fails to make 
such a payment or to comply in full with any other provision as set 
forth in the Settlement Agreement, such conduct will be considered a 
violation of the Settlement Agreement and Order.

    Provisionally accepted and provisional Order issued on the 27th 
day of October, 2014.

By Order of the Commission:

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Todd A. Stevenson, Secretary,
U.S. Consumer Product Safety Commission.

[FR Doc. 2014-25818 Filed 10-29-14; 8:45 am]
BILLING CODE 6355-01-P