Macy's Agrees to $750K Penalty for CPSC Drawstring Violations
The Consumer Product Safety Commission announced on July 11, 2011 that Macy's Inc. has agreed to pay a civil penalty of $750,000 to resolve allegations that it failed to immediately report that certain children’s upper outerwear had drawstring hazards, and that it sold some of the subject garments after recalls had been negotiated.
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Staff Says Macy’s Failed to Report Drawstring Hazards Within 24 Hours
The subject children’s sweatshirts, sweaters and jackets were imported, sold, and/or held for sale by Macy's and its subsidiary stores, including Bloomingdale's and Robinson-May, from April 2006 through October 2010.
According to CPSC, Macy's obtained information that reasonably supported the conclusion that the garments contained a defect that could create a substantial product hazard or that the garments created an unreasonable risk of serious injury or death (i.e. they had drawstring violations). However, staff alleges that Macy’s failed to report the hazard to CPSC immediately (within 24 hours1), as required by CPSC statute.
Also Sold Recalled Garments with Drawstrings in Violation of CPSIA
In addition, staff state that on multiple occasions from March 2009 to January 2010, Macy's offered for sale, sold, and/or distributed in commerce some of these children’s garments with drawstrings that were subject to voluntary corrective action (recalls) taken by the garments' manufacturers, in consultation with the CPSC. Staff state that CPSC notified the public of that action and that Macy's knew or should have known of it.
CPSC states that the Consumer Product Safety Improvement Act of 2008 (CPSIA) made it unlawful to sell recalled products. (CPSC has previously added that it is also unlawful to offer for sale, manufacture for sale, distribute in commerce, or import into the U.S. any consumer product that is subject to voluntary corrective action (recall) or is not in conformity with a CPSC-enforced product safety rule. See ITT’s Online Archives or 09/17/08 news, 08091705, for BP summary.)
Macy’s Denies "Knowing" Violation, Agrees to $750,000 Civil Penalty
Under the settlement agreement, Macy's denies that it knowingly2 violated the law and agrees to pay a civil penalty of $750,000, conduct annual training of employees, conduct a comprehensive review of its existing children’s apparel inventory to identify any children's upper outerwear with drawstrings, etc.
The settlement agreement has been provisionally accepted by the Commission.
New 15(j) Rule Will Refuse Entry to Kid’s Upper Outerwear with Drawstrings
Note that the Commission recently approved a final rule (which is not yet in effect) that designates children's upper outerwear in sizes 2T through 12 with neck or hood drawstrings, and children's upper outerwear in sizes 2T through 16 with certain waist or bottom drawstrings, as substantial product hazards under section 15(j) of the Consumer Product Safety Act (CPSA).
A product with a substantial product hazard, such as drawstrings, faces the following restrictions and requirements:
- Must be reported immediately to CPSC -- is subject to the immediate (24 hour1) reporting requirements of section 15(b) of the CPSA (15 USC 2064(b)). A manufacturer (includes importer) who fails to report a substantial product hazard to the Commission is subject to civil and criminal penalties.
- Subject to corrective action (i.e., recall) -- is subject to corrective action under section 15(c) and (d) of the CPSA (15 USC 2064(c), (d)) which means that CPSC can order the manufacturer, distributor, or retailer of the product to offer to repair or replace the product, or to refund the purchase price to the consumer.
- Will be refused admission -- will be refused admission into the U.S. under section 17(a) of the CPSA (15 USC 2066(a)).
(See ITT’s Online Archives or 06/30/11 news, 11063020, for BP summary of the Commissioners unanimously passing the 15(j) rule for drawstrings.)
1CPSC sources explain that the agency has interpreted the words “immediately inform the Commission” under 15 USC 2064(b) to mean within 24 hours.
2Under CPSC’s statute, the term "knowingly" means: (1) the having of actual knowledge, or (2) the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations.