[Federal Register: January 21, 2005 (Volume 70, Number 13)]
[Notices]
[Page 3188-3190]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21ja05-29]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 05-C0005]
Polaris Industries Inc., Provisional Acceptance of a Settlement
Agreement and Order
AGENCY: Consumer Product Safety Commission.
ACTION: Notice.
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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
Polaris Industries Inc., containing a civil penalty of $950,000.00.
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 February 7, 2005.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 05-C005, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
FOR FURTHER INFORMATION CONTACT: Seth B. Popkin, Trial Attorney, Office
of Compliance, Consumer Product Safety Commission, Washington, DC
20207; telephone (301) 504-7612.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: January 13, 2005.
Todd A. Stevenson,
Secretary.
Settlement Agreement and Order
1. In accordance with 16 CFR 1118.20, Polaris Industries Inc.
(``Polaris'') and the staff (``Staff'') of the United States Consumer
Product Safety Commission (``Commission'') enter into this Settlement
Agreement (``Agreement''). The Agreement and the incorporated attached
Order (``Order'') settle the Staff's allegations set forth below.
Parties
2. The Commission is an independent federal regulatory agency
established pursuant to, and responsible for the enforcement of, the
Consumer Product Safety Act, 15 U.S.C. 2051-2084 (``CPSA'').
3. Polaris is a corporation organized and existing under the laws
of the state of Minnesota. Its principal offices are located at 2100
Highway 55, Medina, MN 55340. Polaris designs and manufactures all
terrain vehicles (ATVs) and other vehicles.
Staff Allegations
Throttle Control
4. From December 1998 through July 2000, Polaris manufactured and/
or sold a total of approximately 13,600 units of certain 1999 Scrambler
400, Sport 400, and Xplorer 400 ATVs, and of certain 2000 Scrambler 400
and Xplorer 400 ATV's (``400cc ATVs'').
5. Each 400cc ATV is a ``consumer product'' that Polaris
``distributed in commerce,'' and Polaris is a ``manufacturer'' of a
consumer product, as those terms are defined in sections 3(a)(1), (4),
(11), and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11), and (12).
6. The throttle on the 400cc ATVs could stick as a result of the
throttle cable becoming caught on the throttle control cover,
preventing the ATVs from slowing down or stopping when riders released
the throttle lever. A stuck throttle can cause an ATV rider to lose
control and crash, possibly resulting in severe injury or death.
7. From December 1998 to May 2000, Polaris received 88 reports of
400cc ATV throttles that stuck as a direct or apparent result of the
cable becoming caught on the throttle control cover. In 19 of the 88
reports, the stuck throttle caused crashes, other accidents, or damage,
and in 7 of the 88 reports, the stuck throttle caused injuries. The
injuries included, among others, a dislocated hip, a broken shoulder,
and torn back muscles.
8. From September 1999 to May 2000, Polaris obtained knowledge
about the 400cc ATVs' throttle defect, hazard, and risk, and Polaris
made 3 engineering changes to address the defect. As of the end of
September 1999, Polaris had received 47 of the 88 stuck throttle
reports, it had received several reports from dealers who specifically
noted the defect's characteristics, and it had begun engineering
changes to address the defect. As of January 2000, Polaris had received
additional reports, made 2 engineering changes, decided on a further
engineering change, and successfully tested revised parts.
9. By September 30, 1999, Polaris had obtained information that
reasonably supported the conclusion that the 400cc ATVs contained a
defect that could create a substantial product hazard or that they
created an unreasonable risk of serious injury or death. Sections
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), required
Polaris to immediately inform the Commission of such defect or risk.
10. Polaris did not report to the Commission regarding the 400cc
ATVs until May 23, 2000, thereby failing to immediately inform the
Commission as required by sections 15(b)(2) and (3) of the CPSA, 15
U.S.C. 2064(b)(2) and (3). This failure violated section 19(a)(4) of
the CPSA, 15 U.S.C. 2068(a)(4).
11. Polaris knowingly failed to immediately inform the Commission
of the 400cc ATVs' defect or risk, as the term ``knowingly'' is defined
in section
[[Page 3189]]
20(d) of the CPSA, 15 U.S.C. 2069(d). Pursuant to section 20 of the
CPSA, 15 U.S.C. 2069, this failure subjected Polaris to civil
penalties.
Oil Line
12. From January 1999 through August 2000, Polaris manufactured
and/or sold a total of approximately 55,500 units of 2000 and 2001
Xpedition 325, Trail Boss 325, and Magnum 325 ATVs (``325cc ATVs'').
13. Each 325cc ATV is a ``consumer product'' that Polaris
``distributed in commerce,'' and Polaris is a ``manufacturer'' of a
consumer product, as those terms are defined in sections 3(a)(1), (4),
(11), and (12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11), and (12).
14. The oil lines on the 325cc ATVs disconnected, blew off,
loosened, or leaked, spraying or otherwise discharging hot pressurized
oil. The discharging oil could cause the ATV and its surroundings to
catch on fire, and the hot oil and fires could cause severe injury or
death.
15. From March 1999 to February 2001, Polaris received at least
1,447 reports of 325cc ATV oil lines that disconnected, blew off,
loosened, or leaked. In 61 of the 1,447 reports, the discharging hot
oil caused smoke, fire, melting, or accidents, and in 42 of those 61
reports the discharging hot oil caused the 325cc ATVs and/or their
surroundings to catch on fire. In 18 of the 1,447 reports, the
discharging hot oil caused injuries, including 2nd and 3rd degree burns
and scarring.
16. From February 2000 to January 2001, Polaris acquired extensive
knowledge about the 325cc ATV's oil line defect, hazard and risk.
Polaris monitored claim reports, conducted engineering analyses, and
made 4 engineering changes to address the defect.
17. From May 2000 to January 2001, Polaris sent at least 5 alerts
to its dealers about the 325cc ATVs' oil line defect.
18. By February 2000, Polaris had obtained information that
reasonably supported the conclusion that the 325cc ATVs contained a
defect that could create a substantial product hazard or that they
created an unreasonable risk of serious injury or death. Sections
15(b)(2) and (3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3), required
Polaris to immediately inform the Commission of such defect or risk.
19. Polaris did not report to the Commission regarding the 325cc
ATVs until after the Staff requested a report in December 2000. Polaris
submitted a report in February 2001. As a result, Polaris failed to
immediately inform the Commission as required by sections 15(b)(2) and
(3) of the CPSA, 15 U.S.C. 2064(b)(2) and (3). This failure violated
section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
20. Polaris knowingly failed to immediately inform the Commission
of the 325cc ATVs' defect or risk, as the term ``knowingly'' is defined
in section 20(d) of the CPSA, 15 U.S.C. 2069(d). Pursuant to section 20
of the CPSA, 15 U.S.C. 2069, this failure subjected Polaris to civil
penalties.
Polaris Response
21. Polaris vigorously contests and denies the Staff's allegations
set forth above in this Agreement. Polaris enters into this Agreement
to resolve the Staff's claims without the expense and distraction of
litigation. By agreeing to this settlement, Polaris does not admit any
of the allegations set forth above in this Agreement, or any fault,
liability, or statutory or regulatory violation.
Agreement of the Parties
22. Under the CPSA, the Commission has jurisdiction over this
matter and over Polaris.
23. The parties enter into this Agreement for settlement purposes
only. The Agreement does not constitute an admission by Polaris, or a
determination by the Commission, that Polaris has violated the CPSA.
24. In settlement of the Staff's allegations, Polaris shall pay a
civil penalty in the amount of nine hundred and fifty thousand dollars
($950,000.00) within twenty (20) calendar days of service of the
Commission's final Order accepting this Agreement. The payment shall be
by check payable to the order of the United States Treasury.
25. Upon the Commission's provisional acceptance of the Agreement,
the Agreement shall be placed on the public record and published in the
Federal Register in accordance with the procedures set forth in the 16
CFR 1118.20(e). If the Commission does not receive any written request
not to accept the Agreement within fifteen (15) days, the Agreement
shall be deemed finally accepted on the sixteenth (16th) day after the
date it is published in the Federal Register.
26. Upon the Commission's final acceptance of the Agreement and
issuance of the final Order, Polaris knowingly, voluntarily, and
completely waives any rights it may have in this matter to the
following: (1) An administrative or judicial hearing; (2) judicial
review or other challenge or contest of the validity of the
Commission's Order or actions; (3) a determination by the Commission of
whether Polaris failed to comply with the CPSA and its underlying
regulations; (4) a statement of findings of fact and conclusions of
law; and (5) any claims under the Equal Access to Justice Act.
27. The Commission may publicize the terms of the Agreement and
Order.
28. The Agreement and Order shall apply to, and be binding upon,
Polaris and each of the successors and assigns.
29. The Commission issues the Order under the provisions of the
CPSA, and violation of the Order may subject Polaris to appropriate
legal action.
30. The Agreement may be used in interpreting the Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and Order may not be used to vary
or contradict their terms. The Agreement shall not be waived, amended,
modified, or otherwise altered, except in a writing that is executed by
the party against whom such waiver, amendment, modification, or
alteration is sought to be enforced, and that is approved by the
Commission.
31. If after the effective date hereof, any provision of the
Agreement and Order is held to be illegal, invalid, or unenforceable
under present or future laws effective during the terms of the
Agreement and Order, such provision shall be fully severable. The
balance of the Agreement and Order shall remain in full force and
effect, unless the Commission and Polaris determine that severing the
provision materially affects the purpose of the Agreement and Order.
Polaris Industries Inc.
Dated: December 13, 2004.
Mary P. McConnell,
Vice President and General Counsel, Polaris Industries Inc., 2100
Highway 55, Medina, MN 55340.
Granta Y. Nakayama, Esq.,
Kirkland & Ellis LLP, 655 Fifteenth Street, NW., Suite 1200,
Washington, DC 20005, Counsel for Polaris Industries Inc.
U.S. Consumer Product Safety Commission Staff.
Nicholas V. Marchica,
Acting Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
Dated: December 14, 2004.
Seth B. Popkin,
Trial Attorney, Legal Division, Office of Compliance.
[[Page 3190]]
Order
Upon consideration of the Settlement Agreement entered into between
Polaris Industries Inc. (``Polaris'') and the U.S. Consumer Product
Safety Commission (``Commission'') staff, and the Commission having
jurisdiction over the subject matter and over Polaris, 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 Polaris shall pay a civil penalty in the
amount of nine hundred and fifty thousand dollars ($950,000.00) within
twenty (20) calendar days of service of the final Order upon Polaris.
The payment shall be made by check payable to the order of the United
States Treasury. Upon the failure of Polaris to make the foregoing
payment when due, interest on the unpaid amount shall accrue and be
paid by Polaris at the federal legal rate of interest set forth in the
provisions of 28 U.S.C. 1961(a) and (b).
Provisionally accepted and Provisional Order issued on the 13th day
of January, 2005.
By order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 05-1049 Filed 1-19-05; 8:45 am]
BILLING CODE 6355-01-M