01-21214. Mast Industries, Inc., (A wholly Owned Subsidiary of The Limited, Inc.) and the Limited, Inc., a 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. Published below is a provisionally-accepted Settlement Agreement with Mast Industries, Inc., (A wholly owned subsidiary of The Limited, Inc.) and The Limited, Inc., a corporation containing a civil penalty of $500,000.

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 September 7, 2001.

ADDRESSES:

Persons wishing to comment on this Settlement Agreement should send written comments to the Comment 01-C0010, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT:

Melissa V. Hampshire, Trial Attorney, Office of the General Counsel, Consumer Product Safety Commission, Washington, DC 20207; telephone [phone], 2208.

SUPPLEMENTARY INFORMATION:

The text of the Agreement and Order appears below.

Dated: August 16, 2001.

Todd A. Stevenson,

Acting Secretary.

Settlement Agreement and Order

1. This Settlement Agreement, made by and between the staff of the U.S. Consumer Product Safety Commission (“the staff”) and Mast Industries, Inc. (hereinafter “Mast”) and The Limited, Inc. (hereinafter “The Limited”), any of their subsidiary or affiliated companies in accordance with 16 CFR 1605.13 of the Commission's Procedures for Investigations, Inspections, and Inquiries under the Flammable Fabrics Act (“FFA”), is a settlement of the staff allegations set forth below.

I. The Parties

2. The Consumer Product Safety Commission (“Commission”) is an independent federal regulatory agency responsible for the enforcement of the Flammable Fabrics Act, 15 U.S.C. 1191 et seq.

3. Mast Industries, Inc. is a corporation organized and existing under the laws of the State of Delaware with its principal place of business 100 Old River Road, Andover Massachusetts, 01810. Mast is a wholly owned subsidiary of The Limited, Inc.

4. The Limited, Inc. is a corporation organized and existing under the laws of the State of Delaware with its principal corporate offices at Three Limited Parkway, Columbus Ohio, 43216.

II. Staff Allegations

5. The following children's sleepwear imported and distributed by Mast and The Limited are the subject of this agreement;

a. Girl's 100 percent polyester pajama sets with a satin finish in sizes 6 through 14. The pajamas were two-piece pullover or front-button styles with sleeveless, short or long sleeved tops and bottoms, available in a variety of colors or patterns. The pajamas were labeled “made in Hong Kong,” “Macau,” or “Ski Lanka.” Limited Too stores sold the pajamas nationwide from December 1995 through July 1998 for $15-39.

b. Girl's sizes 7-14, 100 percent polyester fleece robes in violet, teal and plaid colors. The robes had shawl collars and a tie belt and were labeled “Limited Too” * * * “100% Polyester” * * * “Made in Sri Lanka.” Limited Too stores nationwide sold the robes from September 1998 through December 1998 for between $60 and $64.

6. Beginning in 1996, Mast imported, and The Limited distributed and/or sold through their then retail stores known as Limited Too, into United States commerce approximately 432,120 children's polyester pajama sets, described in paragraph 5a above.

7. The children's pajama sets, described in paragraph 5a above, are subject to the Standards for the Flammability of Children's Sleepwear (“Sleepwear Standards”), 16 CFR Parts 1615 and 1616, issued under section 4 of the FFA, 15 U.S.C. 1193. The Commission tested, in July 1998, a sample of the pajama sets, and determined that they failed to comply with the Sleepwear Standards. The pajama sets were not flame-resistant and therefore unsuitable for use as children's sleepwear.

8. The Commission's subsequent investigation into the parties importation and distribution of the pajama sets showed that they did not test the pajama sets, as required, to the Sleepwear Standards.

9. Beginning in August 1998, Mast imported, and The Limited distributed and/or sold into United States commerce through their then Limited Too retail stores approximately 17,600 children's polyester fleece robes described in paragraph 5b above.

10. The Commission tested, in November 1998, samples of the robes, described in paragraph 5b above, for compliance with the requirements of the Sleepwear Standards. Testing determined that the robes, described in paragraph 5b above, failed to comply with the Sleepwear Standards and were not flame-resistant and therefore unsuitable for use as children's sleepwear.

11. Mast and The Limited knowingly imported, offered for sale and sold in commerce the children's sleepwear identified in paragraphs 5-10 in violation of section 3 of the FFA, 15 U.S.C. 1192, for which a civil penalty may be imposed pursuant to section 5(e)(1) of hte FFA, 15 U.S.C. 1194(e)(1).

III. Response of The Limited Companies

12. Mast and The Limited deny the allegations set forth in paragraphs 5 through 11 above that they knowingly imported and offered for sale or sold in commerce the sleepwear identified in paragraphs 5-10 above in violation of section 3 of the FFA, 15 U.S.C. 1192. Mast tested the robes identified in paragraph 5b to the Sleepwear Standards. When the instances identified in paragraphs 5-11 became known to Mast and The Limited, they promptly and diligently cooperated with the Commission and voluntarily recalled the sleepwear that had sold and removed the remaining inventory from sale.

13. Mast and The Limited enter this Settlement Agreement and Order for settlement and compromise purposes only, to avoid incurring additional legal costs and expenses.

14. The parties have not received any reports of consumer injury related in any way to the specific sleepwear (pajama sets and robes) listed above.

IV. Agreement of the Parties

15. The Commission has jurisdiction over this matter and over Mast and The Limited under the Flammable Fabrics Act (FFA), 15 U.S.C. 1191 et seq., and the Federal Trade Commission Act (FTCA), 15 U.S.C. 41 et seq., and the Consumer Product Safety Act (CPSA), 15 U.S.C. 2051 et. seq.

16. Mast and The Limited knowingly, voluntarily and completely waive any rights they may have in the above captioned case (1) to the issuance of a Complaint in this matter; (2) to an administrative or judicial hearing with respect to the staff allegations cited herein; (3) to judicial review or other challenge or contest of the validity of the Commission's Order; (4) to a determination by the Commission as to whether Mast and The Limited failed to comply with the FFA as alledged; (5) to a statement of findings of fact and conclusions of law with regard to the staff allegations; and (6) to any claims under the Equal Access to Justice Act.

17. 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 16 CFR 1118.20.

18. The Settlement Agreement and Order becomes effective upon final acceptance by the Commission and its service upon Mast and The Limited. Mast and/or The Limited shall pay a civil penalty in the amount of five hundred thousand dollars ($500,000) to the United States Treasury, within 20 calendar days of receiving service of such final Settlement Agreement and Order.

19. In the event of default of the payment as set forth in paragraph 18 above, which default continues for ten (10) calendar days beyond the due date of payment, Mast and The Limited agree that they shall pay the United States Treasury the entire amount of civil penalty, due and owing as well as interest on the amount owing at a rate computed pursuant to 28 U.S.C. 1961(a), as well as a penalty in the amount of five hundred dollars ($500.00) per day until full payment is made, calculated beginning on the first day after payment is due. In addition, in the event of default, Mast and The Limited agree that they shall raise no defense or objection to any collection action the Commission deems appropriate and shall pay all the costs incurred in such action.

20. This Settlement Agreement and Order is entered into for the purposes of compromise and settlement only and does not constitute a determination by the Commission that Mast and The Limited knowingly violated the FFA. This Settlement Agreement and Order is not to be deemed or construed as an admission by Mast and The Limited of any liability or wrongdoing by them; or that they violated any law or regulation. Upon final acceptance of this Settlement Agreement by the Commission, the issuance of the Order, and the full and timely payment by Mast and/or The Limited to the United States Treasury a civil penalty in the amount of five hundred thousand dollars ($500,000), the Commission specifically waives its right to initiate, either by referral to the Department of Justice or bringing in its own name, any action for civil penalties against (a) Mast and/or The Limited; (b) any of Mast and/or The Limited shareholders, directors, officers, employees, agents or attorneys; and (c) any successor, heir, or assign of the persons described in (a), (b) or (c) for violations or alleged violations of the Flammable Fabrics Act with respect to the conduct outlined in paragraphs 5-11 of this Agreement.

21. Upon provisional acceptance of the Commission, the parties agree that the Commission may publicize the terms of the Settlement Agreement and Order.

22. Mast and The Limited agree to the entry of the attached Order, which is incorporated herein by reference, and agree to be bound by its terms.

23. The Commission's Order in this matter is issued under the provisions of the FFA, 15 U.S.C. 1191 et seq., and a violation of this Order may subject Mast and The Limited to appropriate legal action.

24. This Settlement Agreement and Order is binding upon Mast and The Limited and their assigns or successors.

25. Agreements, understandings, representations, or interpretations made outside this Settlement Agreement and Order may not be used to vary or contradict its terms.

26. The existence of a dispute shall not excuse, toll, or suspend any obligation or deadline imposed upon Mast and The Limited under this Settlement Agreement and Order.

27. This Settlement Agreement and Order shall not be waived, changed, amended, modified, or otherwise altered, except in writing executed by the party or parties against whom such waiver, change, amendment, modification, or alteration is sought to be enforced, and approved by the Commission.

Mast Industries, Inc.

Dated: August 9, 2001.

Cathlean Morrison,

Executive Vice President and Chief Administrative Officer.

The Limited, Inc.

Dated: August 8, 2001.

Douglas Williams,

Vice President and Senior Counsel.

Georgia C. Ravitze, Esq.

Scott A. Cohn, Esq.,

Arent, Fox, Kintner, Plotkin & Kahn, PLLC, 1050 Connecticut Ave., NW., Washington, DC 20036-5339.

U.S. Consumer Product Safety Commission Staff

Michael S. Solender, General Counsel

Alan Shakin, Assistant General Counsel

Dated: August 9, 2001.

Melissa V. Hampshire,

Attorney, Enforcement and Information Division, Office of The General Counsel.

Order

Upon consideration of the Settlement Agreement entered into between the staff of the U.S. Consumer Product Safety Commission (“the staff”) and Mast Industries, Inc. (“Mast”) and The Limited, Inc. (“The Limited”) and any of their subsidiary or affiliated companies; and the Commission having jurisdiction over the subject matter and The Limited and Mast; and it appearing that the Settlement Agreement and order is in the public interest,

It is ordered, that the Settlement Agreement and Order be and hereby is provisionally accepted and

It is further ordered, that upon final acceptance of the Settlement Agreement and issuance of the Final Order, that Mast and/or The Limited shall pay to the United States Treasury a civil penalty of five hundred thousand dollars ($500,000) within twenty (202) calendar days after service upon Mast and The Limited of a copy of the Final Order.

By direction of the Commission, this Settlement Agreement is provisionally accepted pursuant to 16 CFR 1605.13(d) and shall be placed in the public record, and the Commission shall announce the provisional acceptance of the Settlement Agreement in the Commission's Public Calendar and in the Federal Register.

Provisionally accepted and Provisional Order issued on the 16th day of August 2001.

By order of the Commission.

Todd A. Stevenson,

Acting Secretary, Consumer Product Safety Commission