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Ross Stores, Wagner Spray Tech and Techtronic Industries Reach Settlement Agreements with CPSC

Aug 6, 2009 | Parker Waichman LLP The Consumer Products Safety Commission (CPSC) has reached an agreement with three firms over allegations that the companies  failed to report defective products to the agency in a timely manner.

Federal law requires manufacturers, distributors, and retailers to report to the 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 the CPSC.

In the first settlement,  Ross Stores Inc., of Pleasanton, Calif. has agreed to pay a civil penalty of $500,000. The penalty settlement, which has been provisionally accepted by the Commission, resolves CPSC staff allegations that Ross knowingly failed to report to the CPSC immediately, as required by federal law, that children’s hooded sweatshirts it sold had drawstrings at the neck.  

In February 1996, the CPSC issued drawstring guidelines  to help prevent children from strangling or getting entangled in the neck and waist drawstrings in upper outerwear, such as jackets and sweatshirts. In May 2006, the CPSC’s Office of Compliance announced  that children’s upper outerwear with drawstrings at the hood or neck would be regarded as defective and as creating a substantial risk of injury to young children.

In agreeing to the settlement, Ross Stores denies  the CPSC's allegations that it knowingly violated the law.

Wagner Spray Tech Corp., of Plymouth, Minn. and Techtronic Industries Co. LTD, of Hong Kong, including its wholly-owned subsidiary Techtronic Industries North America Inc., of Anderson, S.C., have agreed to pay an $800,000 civil penalty. The penalty settles a federal lawsuit filed in the U.S. District Court for the District of Minnesota alleging that Wagner and Techtronic failed to timely report to CPSC as required by federal law the overheating of certain defective cordless power drill battery chargers. These chargers were distributed under the Wagner brand name and manufactured by Techtronic. The products were reportedly involved in several incidents that resulted in property damage.

The lawsuit alleged that Wagner and Techtronic learned about charger overheating incidents starting in 1999 and 2000, respectively, but failed to immediately report this information to the CPSC, as required by law. In March 2004, 180,000 of these battery chargers were voluntarily recalled by Wagner. The Office of Consumer Litigation of the U.S. Department of Justice brought this case before the U.S. District Court for the District of Minnesota on behalf of the CPSC.

In resolving the lawsuit, Wagner and Techtronic denied the allegations that they violated federal law or failed to immediately report to the government.

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