[Federal Register: September 16, 2003 (Volume 68, Number 179)]
[Notices]
[Page 54206-54208]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16se03-30]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 03-C0002]
Murray, Inc., a Corporation, 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 C.F.R. 1118.20.
Published below is a provisionally-accepted Settlement Agreement with
Murray, Inc., a corporation, containing a civil penalty of $375,000.00.
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 October 1, 2003.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 03-C0002, Office of the
Secretary, Consumer Product Safety Commission, Washington, DC 20207.
FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney,
Office of Compliance, Consumer Product Safety Commission, Washington,
DC 20207; telephone (301) 504-7587.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: September 11, 2003.
Todd A. Stevenson,
Secretary.
Settlement Agreement and Order
1. This Settlement Agreement is made by and between the staff
(``the staff'') of the U.S. Consumer Product Safety Commission (``the
Commission'') and Murray, Inc. (``Murray'' or ``Respondent''), a
corporation, in accordance with 16 CFR 1118.20 of the Commission's
Procedures for Investigations, Inspections, and Inquiries under the
Consumer Product Safety Act (``CPSA''). This Settlement Agreement
settles the staff's allegations set forth below.
I. The Parties
2. The Commission is an independent Federal regulatory agency
responsible for the enforcement of the Consumer Product Safety Act, 15
U.S.C. 2051 et seq.
3. Murray is a corporation organized and existing under the laws of
the State of Tennessee with its principal corporate offices located in
Brentwood, Tennessee.
II. Allegations of the Staff
A. Rear-Engine Riding Lawnmower
4. Between January 1995 and January 2002, Murray manufactured and
distributed nationwide approximately 89,500 rear-engine riding
lawnmowers, model numbers 30560, 30565, 30577x7, 502.256210,
536.270211, 536.270212, 30560x7, 30577x8, 502.256220, MOM611115A59,
30560x60, 60575x8, 30577x31, 502.270210, MOM6115A89, 30560x99,
30575x31, 502.251250, and 502.270211.
5. The rear-engine riding lawnmowers are sold to consumers for use
in or around a permanent or temporary household or residence and are,
therefore, ``consumer products'' as defined in section 3(a)(1)(i) of
the Consumer Product Safety Act (CPSA), 15 U.S.C. 2052(a)(1)(i).
Respondent is a ``manufacturer'' and ``distributor'' of the rear-engine
riding lawnmowers, which were ``distributed in commerce'' as those
terms are defined in sections 3(a)(4), (5), (11), and (12) of the CPSA,
15 U.S.C. 2052(a)(4), (5), (11), and (12).
6. The rear-engine riding lawnmowers' fuel tanks can crack and leak
fuel and the leaking fuel can ignite, posing a burn or fire hazard to
consumers.
7. In the fall 2000, one of Murray's retail customers told Murray
that it had replaced four or five fuel tanks on rear-engine riding
lawnmowers because of complaints of fuel leakage.
8. Murray asked the two manufacturers of the fuel tanks to compile
and to review all engineering and manufacturing data regarding the fuel
tanks. Murray never followed through on its request to the two
manufacturers of the fuel tanks for the engineering and manufacturing
data regarding the fuel tanks.
9. By December 2000, Respondent had retrieved five fuel tanks for
which consumers alleged a fuel leak. Respondent's evaluation of these
fuel tanks indicated fuel leakage.
10. In February 2001, one of Murray's retail customers directed a
consumer complaint to Murray. In its communication, the retail customer
told Murray of its legal obligation under section 15(b) of the CPSA to
report to the Commission if it found that the rear-engine riding
lawnmower contained a defect which could create a substantial product
hazard.
11. In September 2001, one of Respondent's retail customers
directed
[[Page 54207]]
another consumer complaint to Respondent.
12. On December 14, 2001, Murray received a request for information
from the staff regarding an incident involving the rear-engine riding
lawnmower. Upon receipt of the staff's inquiry, Murray initiated an
investigation into claims involving its rear-engine riding lawnmowers.
13. Upon reviewing its record in December 2001 and January 2002,
Murray discovered that from 1997 through 2001 it had received about 880
reports of fuel tank leakage involving its rear-engine riding
lawnmower, five of which resulted in fires with one report of minor
burn injuries.
14. Based on information synthesized during Murray's December 2001-
January 2002 investigation, on January 16, 2002, Murray reported to the
Commission about the rear-engine riding lawnmower's fuel tank cracking
and leaking fuel.
15. Despite being aware of the information set forth in paragraphs
4 through 14 above, Murray did not report to the Commission until
January 16, 2002.
16. Murray obtained information which reasonably supported the
conclusion that the rear-engine riding lawnmower as described in
paragraph 4 above contained a defect which could create a substantial
product hazard or created an unreasonable risk of serious injury or
death, but failed to report such information in a timely manner to the
Commission as required by sections 15(b)(2) and (3) of the CPSA, 15
U.S.C. 2064(b)(2) and (3).
17. By failing to provide the information to the Commission in a
timely manner as required by section 15(b) of the CPSA, 15 U.S.C.
2064(b), Murray violated section 19(a)(4) of the CPSA, 15 U.S.C.
2068(a)(4).
18. Murray committed this failure to timely report to the
Commission ``knowingly'' as the term ``knowingly'' is defined in
section 20(d) of the CPSA, 15 U.S.C. 2069(d), thus, subjecting Murray
to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.
B. Mid-Engine Riding Lawnmower
19. Between January 2001 and January 2002, Murray manufactured and
distributed nationwide approximately 6,200 mid-engine riding
lawnmowers, model numbers 309005X10, 309304X8, and 309306X89.
20. The mid-engine riding lawnmowers are sold to consumers for use
in or around a permanent or temporary household or residence and are,
therefore, ``consumer products'' as defined in section 3(a)(1)(i) of
the CPSA, 15 U.S.C. 2052(a)(1)(i). Murray is a ``manufacturer'' and
``distributor'' of the mid-engine riding lawnmowers, which were
``distributed in commerce'' as those terms are defined in sections
3(a)(4), (5), (11), and (12) of the CPSA, 15 U.S.C. 2052(a)(4), (5),
(11), and (12).
21. The mid-engine riding lawnmowers' fuel tanks can crack and leak
fuel and the leaking fuel can ignite, posing a burn or fire hazard to
consumers.
22. In July 2001, Murray's European distributor advised Murray of a
possible weld seam issue involving the mid-engine riding lawnmower's
fuel tank.
23. In August 2001, one of Respondent's retail customers notified
Respondent of several reports of gas leaks involving the mid-engine
riding lawnmower.
24. During August 2001, Murray notice an increased number of orders
form its authorized service centers requesting replacement fuel tanks
for the mid-engine riding lawnmower as a result of fuel leaks.
25. In September 2001, Murray tested 12 fuel tanks for fuel
leakage, and found some of the tested tanks showed evidence of cracking
and fuel leakage.
26. On or about September 19, 2001, the manufacturer of the mid-
engine riding lawnmower's fuel tank told Murray that it has substituted
a different type of material since the beginning of production. Murray
immediately instructed its supplier to begin using the specified
material. Murray placed a hold on distributing the mid-engine riding
lawnmower pending installation of the proper fuel tank.
27. On or about November 19, 2001, an independent laboratory told
Respondent that the failure of the gas tank was due to multiple,
brittle fatigue cracks that initiated at the base of the tank due to
concentration of applied cyclic bending stress due to vibration during
service. The report also noted that the failed tank had a much lower
molecular weight and was significantly more brittle than the
comparative tank. The brittle nature of the polymer made it more prone
to cracking.
28. On or about January 18, 2002, Murray received a complaint from
a consumer alleging a leaking fuel tank. At that time, Murray examined
its records and found that between June 2001 and January 2002 it had
received 70 complaints and 145 warranty claims of fuel leakage,
including one report of a fire.
29. Based on Murray's investigation, on February 5, 2002, Murray
reported to the Commission about the mid-engine riding lawnmower's fuel
tank cracking and leaking fuel.
30. Despite being aware of the information set forth in paragraphs
19 through 29 above, Murray did not report to the Commission until
February 5, 2002.
31. Murray obtained information which reasonably supported the
conclusion that the mid-engine riding lawnmower as described in
paragraph 19 above contained a defect which could create a substantial
product hazard or created an unreasonable risk of serious injury or
death, but failed to report such information in a timely manner to the
Commission as required by sections 15(b)(2) and (3) of the CPSA, 15
U.S.C. 2064(b)(2) and (3).
32. By failing to provide information in a timely manner as
required by section 15(b) of the CPSA, 15 U.S.C. 2064(b), Murray
violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
33. Murray committed this failure to timely report to the
Commission ``knowingly'' as the term ``knowingly'' is defined in
section 20(d) of the CPSA, 15 U.S.C. 2069(d), thus, subjecting Murray
to civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.
III. Murray's Response
34. Murray denies each and every staff allegation as set forth in
paragraphs 4 through 33 above.
35. Murray denies that the rear-engine riding lawnmower contains
any defect which could create a substantial product hazard pursuant to
section 15(a) of the CPSA, 15 U.S.C. 2064(b) or 16 CFR part 1115 and
further denies that it violated the reporting requirements of section
15(b) of the CPSA, 15 U.S.C. 2064(b).
36. In January 2002, information became apparent to Murray and it
promptly and voluntarily filed a report on the rear-engine riding
lawnmower under section 15 of the CPSA, and worked cooperatively with
the staff to conduct a comprehensive recall plan under the Commission's
Fast Track program.
37. Murray denies that the mid-engine riding lawnmower contains any
defect which could create a substantial product hazard pursuant to
section 15(a) of the CPSA, 15 U.S.C. 2064(a), and further denies that
it violated the reporting requirements of section 15(b) of the CPSA, 15
U.S.C. 2064(b) or 16 CFR part 1115.
38. In January 2002, information became apparent to Murray and it
promptly and voluntarily filed a report on the mid-engine riding
lawnmower under section 15 of the CPSA and worked cooperatively with
the staff to conduct a comprehensive recall plan
[[Page 54208]]
under the Commission's Fast Track program.
39. Murray enters this Settlement Agreement and Order for
settlement purposes only, to avoid incurring additional legal costs and
expenses. In settling this matter, Murray does not admit any fault,
liability or statutory or regulatory violation.
IV. Agreement of the Parties
40. The Consumer Product Safety Commission has jurisdiction over
this matter and over Murray under the Consumer Product Safety Act, 15
U.S.C. 2051 et seq.
41. This Agreement is entered into for settlement purposes only and
does not constitute an admission by Murray that it has violated the law
nor a determination by the Commission of any disputed issue of law or
fact.
42. In settlement of the staff's allegations, Murray agrees to pay
a civil penalty in the amount of three hundred seventy-five thousand
dollars and 00/100 cents ($375,000.00) as set forth in the incorporated
Order.
43. Upon final acceptance of this Agreement by the Commission and
issuance of the Final Order, Respondent knowingly, voluntarily, ad
completely waives any rights it may have in this matter (1) to an
administrative or judicial hearing, (2) to judicial review or other
challenge or contest of the validity of the Commission's actions, (3)
to a determination by the Commission as to whether Respondent failed to
comply with the CPSA and the underlying regulations, (4) to a statement
of findings of fact and conclusions of law, and (5) to any claims under
the Equal Access of Justice Act.
44. Upon provisional acceptance of this Agreement by the
Commission, this Agreement shall be placed on the public record and
shall be published in the Federal Register in accordance with the
procedures set forth in 16 CFR 1118.20(e). If the Commission does not
receive any written request not to accept the Agreement within 15 days,
the Agreement will be deemed finally accepted on the 16th day after the
date it is published in the Federal Register.
45. The Commission may publicize the terms of the Settlement
Agreement and Order.
46. The Commission's Order in this matter is issued under the
provision of the CPSA, 15 U.S.C. 2051 et seq., and a violation of this
Order shall subject Murray to appropriate legal action.
47. This Settlement Agreement may be used in interpreting the
Order. Agreements, understandings, representations, or interpretation
apart from those contained in this Settlement Agreement and Order may
not be used to vary or contradict its terms.
48. The provisions of this Settlement Agreement and Order shall
apply to Murray and each of its successors and assigns.
Respondent, Murray, Inc.
Dated: June 3, 2003.
James C. Pelletier,
President and Chief Operating Officer, Murray, Inc., 219 Franklin Road,
Brentwood, TN 27027.
Dated: June 9, 2003.
Kerrie L. Hook,
Collier Shannon Scott, PLLC, 3050 K Street, NW., Washington, DC 20007.
Commission Staff.
Alan H. Schoem,
Assistant Executive Director, Office of Compliance, Consumer Product
Safety Commission, Washington, DC 20207-0001.
Eric L. Stone,
Director, Legal Division, Office of Compliance.
Dated: June 10, 2003.
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.
Order
Upon consideration of the Settlement Agreement entered into between
Respondent Murray, Inc., a corporation, and the staff of the Consumer
Product Safety Commission; and the Commission having jurisdiction over
the subject matter and Murray, Inc; 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 upon final acceptance of the Settlement
Agreement and Order, Murray, Inc. shall pay to the Commission a civil
penalty in the amount of Three Hundred Seventy-Five Thousand and 00/100
Dollars ($375,000.00) within twenty (20) days after service upon
Respondent of the Final Order of the Commission accepting the attached
Settlement Agreement.
Provisionally accepted and Provisional Order issued on the 11th
day of September, 2003.
By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
[FR Doc. 03-23618 Filed 9-15-03; 8:45 am]
BILLING CODE 6355-01-M