[Federal Register Volume 63, Number 201 (Monday, October 19, 1998)]
[Notices]
[Pages 55847-55849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27990]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 99-C0002]
The Neiman Marcus Group, Inc., a Corporation; 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 Flammable Fabrics 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
the Neiman Marcus Group, Inc., a corporation, containing a civil
penalty of $112,500.
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 3, 1998.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 99-C0002, Office of the
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.
FOR FURTHER INFORMATION CONTACT: Ronald G. Yelenik, Trail Attorney,
Office of Compliance and Enforcement, Consumer Product Safety
Commission, Washington, D.C. 20207; telephone (301) 504-0626, 1351.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: October 14, 1998.
Sadye E. Dunn,
Secretary.
Settlement Agreement and Order
1. This Settlement Agreement and Order, entered into between The
Neiman Marcus Group, Inc. (hereinafter, ``Neiman Marcus'' 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 agency of the United States government established by
Congress pursuant to section 4 of the Consumer Product
[[Page 55848]]
Safety Act (hereinafter, ``CPSA''), as amended, 15 U.S.C. Sec. 2053.
3. Respondent Neiman Marcus is a corporation organized and existing
under the laws of the State of Delaware with its principal corporate
offices located in Chestnut Hill, MA. Respondent is a retailer of
women's and men's apparel and other products.
II. Allegations of the Staff
A. Violations of the FFA
4. Between December 1998 and February 1997, Respondent sold or
offered for sale, in commerce, approximately 6,300 EGERIA cotton terry
cloth bathrobes for men and women (hereinafter, the ``robes'' or
``robe'').
5. The robes identified in paragraph 4 above are subject to the
Standard for the Flammability of Clothing Textiles (hereinafter,
``Clothing Standard''), 16 CFR 1610, issued under section 4 of the
Flammable Fabrics Act (FFA), 15 U.S.C. Sec. 1193.
6. On or about February 19, 1997, Neiman Marcus, after receiving
reports of several incident in which the robes identified in paragraph
4 above caught fire, tested samples of this robe model for compliance
with the requirements of the Clothing Standard. See 16 CFR 1610.3,
1610.4. The test results showed that the robes did not comply with the
requirements of the Clothing Standard and, therefore, were dangerously
flammable and unsuitable for clothing because of their rapid and
intense burning.
7. Respondent knowingly sold, or offered for sale, in commerce, the
robes identified in paragraph 4 above, 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. Sec. 1192, for which a
civil penalty may be imposed pursuant to section 5(e)(1) of the FFA, 15
U.S.C. Sec. 1194(e)(1).
B. Violations of the CPSA
8. The allegations contained in paragraphs 4 through 7 above are
repeated and realleged, as applicable.
9. Respondent is subject to section 15(b) of the CPSA, 15 U.S.C.
Sec. 2064(b), which requires a retailer of a consumer product who,
inter alia, obtains information that reasonably supports the conclusion
that the product contains a defect which would create a substantial
product hazard, or creates an unreasonable risk of serious injury or
death, to immediately inform the Commission of the defect or risk.
10. Between December 1988 and February 1997, Respondent sold
certain robes through its retail stores nationwide. The robe is a
``consumer product'' and Neiman Marcus is a ``retailer'' of a
``consumer product'' which is ``distributed in commerce'' as those
terms are defined in sections 3(a)(1), (6), (11) of the CPSA, 15 U.S.C.
Secs. 2052(a)(1), (6), (11).
11. The robes are flammable in nature as evidenced by the failing
test results under the Clothing Standard and the incidents described in
paragraph 12 below. If a robe were to ignite, it could cause serious
burn injuries or death.
12. Between June 1996 and February 1997. Neiman Marcus received
reports of five incidents in which the robes caught fire, including two
incidents which resulted in minor burn injuries.
13. On March 5, 1997, when Neiman Marcus received the test results
referenced in paragraph 6 above, it voluntarily filed a ``Full Report''
with the Commission pursuant to section 15(b) of the CPSA and 15 CFR
1115.13, which stated that the robes may present a flammability risk.
14. Although Neiman Marcus had obtained sufficient information to
reasonably support the conclusion that the robes contained a defect
which could create a substantial product hazard, or created an
unreasonable risk of serious injury or death, it failed to immediately
report such information to the Commission in a timely manner, as
required by section 15(b) of the CPSA. This is a violation of section
19(a)(4) of the CPSA.
15. Neiman Marcus' failure to report to the Commission, as required
by section 15(b) of the CPSA, was committed ``knowingly,'' as that term
is defined in section 20(d) of the CPSA, and Respondent is subject to
civil penalties under section 20 of the CPSA.
III. Response of Neiman Marcus
16. Neiman Marcus specifically denies that it knowingly sold or
offered for sale the robes described in paragraph 4 above in violation
of the requirements of the Clothing Standard or reporting requirements
of the Consumer Product Safety Act.
17. Neiman Marcus purchased the robes identified in paragraph 4
above subject to a provision contained on the back of the merchandise
purchase order form which provides that such robes comply with all
applicable government regulations including the Flammable Fabrics Act
and the Consumer Product Safety Act.
18. Prior to the time of the first reported incident, Neiman Marcus
sold the robes described in paragraph 4 above, supplied by the same
vendor, or over 10 years without any flammability problem.
19. Immediately upon receipt of what Neiman Marcus perceived to be
the first confirmed report of an unexplained flammability incident,
Neiman Marcus tested the product for compliance with the Clothing
Standard.
20. Immediately upon receipt of test results indicating that the
robes described in paragraph 4 above did not meet the requirements of
the Clothing Standard, Neiman Marcus suspended all sales of the
garment, promptly filed a written report to the CPSC, and implemented a
voluntary recall of the garments.
21. Neiman Marcus promptly and diligently assisted the Commission
staff in its efforts to implement the voluntary recall or the robes
described in paragraph 4 above.
22. Neiman Marcus has received no reports of serious consumer
injury resulting from the use of any robes described in paragraph 4
above. The only injuries reported to Neiman Marcus involving these
robes were two minor burns.
IV. Agreement of the Parties
23. The Commission has jurisdiction over this matter under the
CPSA, 15 U.S.C. Secs. 2051 et seq., the FFA, 15 U.S.C. Secs. 1191 et
seq., and the Federal Trade Commission Act (FTCA), 15 U.S.C. Secs. 41
et seq.
24. Neiman Marcus agrees to pay to the Commission a civil penalty
in the amount of one hundred twelve thousand five hundred dollars
($112,500), in settlement of this matter, payable within twenty (20)
days after service of the Final Order of the Commission accepting this
Settlement Agreement.
25. 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 Order, (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 settlement of findings of
fact and conclusions of law, and (5) to any claims under the Equal
Access to Justice Act.
26. 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(e). If the Commission does not receive any written request not
to accept
[[Page 55849]]
the Settlement Agreement and order within 15 days, the Settlement
Agreement and Order shall be deemed finally accepted on the 16th day
after the date it is published in the Federal Register in accordance
with 16 CFR 1118.20(f).
27. This Settlement Agreement and Order becomes effective upon its
final acceptance by the Commission and service upon Respondent.
28. For purposes of section 6(b) of the CPSA, 15 U.S.C.
Sec. 2055(b), this matter shall be treated as if a complaint had
issued, and the Commission may publicise the terms of the Settlement
and Order.
(29) The provisions of this Settlement Agreements and Order shall
apply to Respondent, its successors and assigns, agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other business entity, or through any agency,
device or instrumentality.
30. Neiman Marcus agrees to immediately inform the Commission if it
learns of any additional incidents or flammability information about
the robes.
31. This Settlement Agreement may be used in interpreting the
Order. Agreements, understandings, representations, or interpretations
made outside of this Settlement Agreement and Order may not be used to
vary or contradict its terms.
Dated: August 19, 1998.
Eric P. Geller,
Senior Vice President and General Counsel, The Neiman Marcus Group,
Inc., Chestnut Hill, MA.
The Consumer Product Safety Commission.
Alan H. Schoem,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
Dated: September 18, 1998.
Ronald G. Yelenik,
Trial Attorney, Legal Division, Office of Compliance.
Order
Upon consideration of the Settlement Agreement between Respondent
The Neiman Marcus Group, Inc., a corporation, and the staff of the
Consumer Product Safety Commission, and the Commission having
jurisdiction over the subject matter and over The Neiman Marcus Group,
Inc., and it appearing the Settlement Agreement is in the public
interest, it is
Ordered, that the Settlement Agreement be and hereby is accepted,
and it is
Ordered, that within 20 days of the service of the Final Order upon
Respondent. The Neiman Marcus Group, Inc. shall pay to the order of the
U.S. Treasury a civil penalty in the amount of one hundred and twelve
thousand five hundred dollars ($112,500).
Further ordered, The Neiman Marcus Group, Inc. shall immediately
inform the Commission if it learns of any additional incidents or
flammability information about the products identified in the
Settlement Agreement herein.
Provisionally accepted and Provisional Order issued on the 14th
day of October, 1998.
By Order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 98-27990 Filed 10-16-98; 8:45 am]
BILLING CODE 6355-01-M
