06-4291. West Bend Housewares, LLC, a Limited Liability Corporation, Provisional Acceptance of a Settlement Agreement and Order

AGENCY:

Consumer Product Safety Commission.

ACTION:

Notice.

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 West Bend Housewares, LLC, a Limited Liability Corporation, containing a civil penalty of $100,000,000.

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 May 23, 2006.

ADDRESSES:

Persons wishing to comment on this Settlement Agreement should send written comments to Comment 06-C0003, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT:

Dennis C. Kacoyanis, Trial Attorney, Office of Compliance, Consumer Product Safety Commission, Washington, DC 20207; telephone [phone].

SUPPLEMENTARY INFORMATION:

The text of the Agreement and Order appears below.

Dated: May 2, 2006.

Todd A. Stevenson,

Secretary.

I. Settlement Agreement and Order

1. This Settlement Agreement is made by and between the staff (“the staff”) of the U.S. Consumer Product Safety Commission (“the Commission”) and West Bend Housewares, LLC (“West Bend”), a limited liability corporation, in accordance with 16 CFR 1118.20 of the Commission's Procedures for Investigations, Inspections, and Inquires under the Consumer Product Safety Act (“CPSA”). This Settlement Agreement and the incorporated Order settle the staff's allegations set forth below.

II. The Parties

2. The Commission is an independent Federal regulatory agency responsible for the enforcement of the Consumer Product Safety Act, 15 U.S.C. 2051-2084.

3. West Bend is a limited liability corporation organized and existing under the laws of the State of Delaware with its principal corporate offices located at 2845 Wingate Street, West Bend, WI 53095. West Bend is a subsidiary of Focus Products Group, LLC of Vernon Hills, IL. West Bend is a manufacturer and internet retailer of small electrical appliances.

III. Allegations of the Staff

4. Between August 2004 and February 2005, West Bend manufactured and sold nationwide approximately 14,322 10-Cut Automatic Coffeemakers, Item 56870 and Replacement Carafes, Item No. 5815.

5. The 10-Cup Automatic Coffeemakers and the Replacement Carafes are “consumer products” and West Bend is a “manufacturer” and “retailer” of “consumer products,” which are “distributed in commerce” as those terms are defined in sections 3(a)(1), (4), (6), (11), and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (6), (11), and (12).

6. The 10-Cup Automatic Coffeemaker, Item No. 56870 is a programmable automatic coffeemaker with a glass carafe that has a plastic black handle. The 10-Cup Replacement Carafe, Item No. 5815 was distributed as a replacement carafe for the 10-Cup Automatic Coffeemaker, Item No. 56870. The carafe's handle can unexpectedly loosen or break, resulting in the carafe falling. If this should occur, consumers may sustain burn injuries from hot coffee or lacerations from broken glass.

7. In October and November 2004, West Bend received several reports from consumers alleging failures of carafe handles. On or about November 30, 2004, West Bend's Product Safety Committee (“safety committee”) met and decided to monitor the carafe failures and to have consumers return the broken handles for further evaluation.

8. In December 2004, West Bend acquired a couple of samples of broken handles for evaluation. A brief evaluation of these handles revealed a problem with the plastic material and/or the processing. West Bend asked the foreign manufacturer to investigate the breakage problem and to make the necessary corrections.

9. On or about February 2, 2005, the foreign manufacturer advised West Bend that the materials used in the handles was “not so good.” At that time, West Bend retained an outside plastics expert who found that the material used in the broken handle did not meet West Bend's specifications. West Bend placed all inventory on hold, but did not report the problem to the Commission.

10. Beginning in April 2005, West Bend audited each container of carafes to determine whether the handles were made in accordance with West Bend's specifications. On or about April 8, 2005, West Bend received a call from a consumer who spilled coffee on his legs and feet when the carafe's handle broke. West Bend sent the consumer a replacement carafe, but still did not report to the Commission.

11. West Bend resumed shipments of the 10-Cup Automatic Coffeemaker, Item No. 56870 or on about April 11, 2005. On May 31, 2005, West Bend received a report from a consumer who allegedly sustained minor burns and cuts when the carafe handle fell off the carafe. West Bend still did not report.

12. West Bend reported to the Commission on or about July 15, 2005. At the time of its report, West Bend had received at least 169 reports of handle breakage and at least two (2) reports of minor burns and/or cuts as a result of the handle breakage.

13. As indicated in paragraphs 4 through 13 above, by February 2005, West Bend obtained information which reasonably supported the conclusion that the 10-Cup Automatic Coffeemaker, Item 56870 and its Replacement Carafe, Item 5815 contained a defect which could create a substantial product hazard, but failed to report such information in a timely manner as required by section 15(b)(2) of the CPSA, 15 U.S.C. 2064(b)(2).

14. By failing to furnish information as required by section 15(b) of the CPSA, 15 U.S.C. 2064(b), West Bend violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).

15. West Bend committed this failure to timely report to the Commission “knowingly” as the term “knowingly” is defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d), subjecting West Bend to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.

IV. West Bend's Response

16. West Bend denies the staff's allegations that it violated the CPSA as set forth in paragraphs 4 through 15 above.

17. West Bend specifically contests and denies that the timing of its voluntary report to the CPSC was “knowingly” in violation of the CPSA's reporting requirements. West Bend is a recently formed small business that had no prior experience dealing with the U.S. Consumer Product Safety Commission when the issues with the carafe arose. West Bend was aware of the CPSA and its reporting regulations. Acting in good faith to interpret and understand those regulations, West Bend did not believe that the issues with the carafe handles presented either a substantial product hazard or an unreasonable risk of serious injury or death, as those terms are used in the CPSA and its implementing regulations.

18. By agreeing to this settlement, West Bend does not admit to any of the staff's allegations set forth in the settlement document.

V. Agreement of the Parties

19. The Consumer Product Safety Commission has jurisdiction over this matter and over West Bend under the Consumer Product Safety Act, 15 U.S.C. 2051-2084.

20. The parties enter into this Settlement Agreement for settlement purposes only. The Settlement Agreement does not constitute an admission by West Bend or a determination by the Commission that West Bend violated the CPSA's reporting requirements.

21. In settlement of the staff's allegations, West Bend agrees to pay a civil penalty in the amount of $100,000 within twenty (20) calendar days of receiving service of the Final Order of the Commission accepting this Settlement Agreement. This payment shall be made by check payable to the order of the United States Treasury.

22. Upon provisional acceptance of this Agreement by the Commission, this Agreement 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 objections within 15 days, the Agreement will be deemed finally accepted on the 16th day after the date it is published in the Federal Register.

23. Upon final acceptance of the Agreement by the Commission and issuance of the Final Order, West Bend 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 West Bend failed to comply with the CPSA and the underlying regulations, (4) to a statement of findings of fact or conclusions of law, and (5) to any claims under the Equal Access to Justice Act.

24. The Commission may publicize the terms of the Settlement Agreement and Order.

25. This Settlement Agreement and Order shall apply to, and be binding upon West Bend and each of its successors and assigns.

26. The Commission's Order in this matter is issued under the provisions of the CPSA, 15 U.S.C. 2051-2084, and a violation of this Order may subject West Bend to appropriate legal action.

27. This Settlement Agreement may be used in interpreting the Order. Agreements, understandings, representations, or interpretations apart from those contained in this Settlement Agreement and Order may not be used to vary or contradict its terms.

28. This Settlement Agreement shall not be waived, changed, amended, modified, or otherwise altered without written agreement thereto executed by the party against whom such waiver, change, amendment, modification, or alteration is sought to be enforced, and the approval of the Commission.

29. If, after the effective date hereof, any provision of this Settlement Agreement and Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of the Settlement Agreement and Order, such provisions shall be fully severable. The rest of the Settlement Agreement and Order shall remain in full effect, unless the Commission and West Bend determine that severing the provision materially changes the purpose of the Settlement Agreement and Order.

West Bend Housewares, LLC

Dated: March 28, 2006.

Michael L. Carpenter,

President, West Bend Housewares, LLC, 2845 Wingate Street, P.O. Box 2780, West Bend, WI 53095.

Dated: March 29, 2006.

Erika Z. Jones,

Attorney for West Bend Housewares, LLC, Mayer, Brown, Rowe, & Maw, LLP, 1909 K Street, NW., Washington, DC 20006-1101.

Commission

John Gibson Mullan

Assistant Executive Director, Office of Compliance and Field Operations, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, MD 20814.

Ronald G. Yelenik,

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

Dated: April 3, 2006.

Dennis C. Kacoyanis,

Trial Attorney, Legal Division, Office of Compliance and Field Operations.

Order

Upon consideration of the Settlement Agreement entered into between West Bend Housewares, LLC and the staff of the Consumer Product Safety Commission; and the Commission having jurisdiction over the subject matter and West Bend Housewares, LLC; 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, West Bend Housewares, LLC shall pay to the Commission a civil penalty in the amount of $100,000 within twenty (20) days after service upon West Bend of this Final Order of the Commission.

Provisionally accepted and Provisional Order issued on the 2nd day of May 2006.

By Order of the Commission.

Todd A. Stevenson,

Secretary Consumer Product Safety Commission.