Archive for category: News

Release Date: June 21, 2013

Release Number: 13-224

WASHINGTON, D.C.-The U.S. Consumer Product Safety Commission (CPSC)

announced today that Ross Stores Inc., of Pleasanton, Calif., has agreed to

pay a $3.9 million civil penalty.  The penalty agreement has been accepted

provisionally by the Commission in a 3-0 vote.

 

The settlement resolves CPSC staff’s charges that from January 2009 to

February 2012, Ross knowingly failed to report to CPSC immediately, as

required by federal law, that it sold or held for sale, about 23,000

children’s upper outerwear garments with drawstrings at the neck or waist.

In February 1996, CPSC issued guidelines (which were incorporated into a

consensus industry voluntary standard in 1997) to help prevent children from

strangling or getting entangled on neck and waist drawstrings in upper

garments, such as sweatshirts and jackets.

 

In May 2006, the Commission posted a letter on its website which stated that

staff considered children’s upper outerwear with drawstrings at the hood or

neck to be defective and present a substantial risk of injury to young

children.   In July 2011, based on the 1996 CPSC guidelines and the 1997

voluntary standard, CPSC issued a final rule which designates the hazards

presented by drawstrings in children’s upper outerwear as substantial

product hazards.

 

Ross’s distribution of some children’s garments occurred during the same

period of time as CPSC’s investigation and negotiation of a 2009 civil

penalty.  The $500,000 penalty that Ross paid in 2009 was to settle staff

charges that it failed to report four series of children’s upper outerwear

drawstring garments distributed between 2006 and 2008.  Ross’s distribution

of the other garments in this matter occurred either partially or entirely

after the effective date of CPSC’s Final Rule. There have been no reported

injuries associated with the recalled garments.

 

In addition to paying a monetary penalty, Ross has agreed to implement and

maintain a compliance program designed to ensure compliance with the

reporting requirements of Section 15(b) of the Consumer Product Safety Act

and the Final Rule.  Ross also agreed to enhance its existing compliance

policies by ensuring that its ongoing program contains written standards and

policies, a mechanism for confidential employee reporting of

compliance-related questions or concerns, and appropriate communication of

company compliance policies to all employees through training programs. Ross

has designed and implemented a system of internal controls and procedures to

ensure that the firm’s reporting to the Commission is timely, truthful,

complete, accurate, and in accordance with applicable law.  The company will

also take steps to ensure that prompt disclosure is made to management of

any significant deficiencies or material weaknesses in the design or

operation of such internal controls.

 

The Commission, in cooperation with Ross and/or other firms that

manufactured, imported, or distributed the Garments, announced recalls of

the garments listed below between March 2010 and May 2012:

Manufacturer/Importer/Distributor/Retailer

 

Children’s Apparel Network, Ltd. Girls’ hooded sweater with neck

drawstrings

 

Byer California Girls’ cargo pocket jacket with neck and waist drawstrings

Puma North America Inc.     Youth training jacket with waist drawstrings

LA Fashion Hub Inc. Girls’ winter jacket with neck drawstrings

Umbro Boy’s jacket with waist drawstrings

Hot Chocolate Boy’s jogging suit with waist drawstrings

Bonded Apparel Boy’s Hooded jacket with neck drawstrings

Me Jane Louise Paris Ltd Girl’s fur hood bubble fleece with waist

drawstrings and Fur hooded bubble jacket with waist drawstrings

LANY Group LLC Girls’ terry hooded sweatshirt with neck drawstrings

YMI Jeanswear Girls’ hooded sweatshirt with neck drawstrings

 

Federal law requires manufacturers, distributors, and retailers to report to

CPSC immediately (within 24 hours) after obtaining information reasonably

supporting the conclusion that a product contains a defect which could

create a substantial product hazard, creates an unreasonable risk of serious

injury or death, or fails to comply with any consumer product safety rule or

any other rule, regulation, standard, or ban enforced by CPSC.

 

In agreeing to the settlement, Ross denies staff charges that it knowingly

failed to inform the Commission about the garments, as required by CPSA

§15(b).

*****************************************************

Statement of Chairman Inez M. Tenenbaum on the Commission Decision to

Approve Provisionally a Civil Penalty Settlement with Ross Stores, Inc.

 

June 21, 2013

 

On June 19, 2013, the U.S. Consumer Product Safety Commission (CPSC or the

Commission) provisionally approved a civil penalty settlement with retailer

Ross Stores, Inc., to resolve CPSC staff allegations that Ross committed

prohibited acts by failing to inform the Commission of Ross’s continued sale

of children’s garments with drawstrings, which pose a substantial risk of

injury to children due to the risk of entanglement and strangulation.  The

settlement requires Ross to pay a monetary penalty of $3.9 million and, just

as important, to take meaningful measures to reduce the risk of future

noncompliance through implementation of significantly enhanced compliance

procedures and internal controls.  After a review of the specific facts

presented in this case and a careful consideration of the civil penalty

factors, I voted to approve the settlement.

 

During my tenure as Chairman of the CPSC, my colleague Commissioner Robert

S. Adler and I have written together and separately regarding the need for

civil penalties to truly serve the policy objectives of deterring violations

and promoting compliance with the law, particularly in light of the

increased penalty amounts Congress authorized in the Consumer Product Safety

Improvement Act of 2008.  This settlement reflects the goals and importance

of our enhanced authorities, and I commend the CPSC staff for this result.

This settlement is also a reminder to the regulated community that the

Commission will use every tool at its disposal to keep consumers and their

families safe from unreasonable risks of injury.

 

Ross is a repeat violator.  In 2009, it paid a civil penalty of $500,000 for

violating the same law, Section 15 of the Consumer Product Safety Act

(CPSA).  Neither the fine nor the supposed remedial measures Ross

implemented on its own initiative following that settlement was sufficient

to prevent the continued sale of defective garments.  Vendors who were

contractually obligated to provide compliant products continuously failed to

do so; internal policies prohibiting the purchase, inventory, and sale of

garments with drawstrings were equally ineffective.  Regardless of what

Ross’s management may have wanted to believe about the effectiveness of

their policies, they clearly did not work.  Moreover, the fact that Ross did

not design, manufacture, or import the garments did not relieve it of the

obligation to ensure that they comply with all applicable safety statutes

and regulations.

 

As part of this settlement, Ross has agreed to maintain a vastly improved

compliance program designed to prevent the sale of garments with drawstrings

and to ensure timely reporting, if necessary, under Section 15 of the CPSA.

This compliance program, similar to others the Commission has begun to

require as a warranted condition of settlement, includes the following key

elements: (i) written standards and policies, (ii) whistle-blower

protections, (iii) compliance training programs, (iv) management oversight

of compliance, and (v) five-year record retention requirements.

 

This case clearly demonstrates that policies cannot exist solely on paper;

individuals must be charged with and held accountable for carrying them out.

It is my hope and expectation that the message we are sending with the

substantial fine and the compliance requirements in this agreement will

increase the likelihood that Ross-and other firms-will not only make the

right decision next time they are confronted with whether to report a safety

issue, but also-and more importantly for consumer safety-will take all

necessary steps to ensure they produce and market only compliant products,

thus obviating the need for any reporting at all.