[Federal Register: September 5, 2002 (Volume 67, Number 172)]
[Notices]               
[Page 56807-56809]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05se02-27]                         

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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 02-C0007]

 
Aerus LLC, a Limited Liability Company, f/k/a Electrolux LLC, 
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 
Aerus LLC, a limited liability company, containing a civil penalty of 
$250,000.

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 September 20, 2002.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 02-C0007 Office of the 
Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT: Ronald G. Yelenik, Trial Attorney, 
Legal Division, Office of Compliance, Consumer Product Safety 
Commission, Washington, DC 20207; telephone (301) 504-0626, ext. 1351.

[[Page 56808]]


SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: August 29, 2000.
Todd A. Stevenson,
Secretary.

Consumer Product Safety Commission

Settlement Agreement and Order

    1. This Settlement Agreement, made by and between the staff (``the 
staff'') of the U.S. Consumer Product Safety Commission (the 
``Commission'') and Aerus LLC, a limited liability company, formerly 
known as Electrolux LLC, in accordance with 16 CFR 1118.20 of the 
Commission's Procedures for Investigations, Inspections, and Inquiries 
under the Consumer Product Safety Act (``CPSA''), is a settlement of 
the staff allegations set forth below.

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. 2051-2084.
    3. Aerus LLC is a limited liability company organized and existing 
under the laws of the State of Delaware, and its principal office is 
located at 5956 Sherry Lane, Dallas, Texas. Aerus LLC owns certain 
assets that previously were owned by Electrolux Corporation. (Aerus LLC 
and Electrolux Corporation are referred to herein collectively as 
``Aerus'').

Staff Allegations

    4. Section 15(b) of the CPSA, 15 U.S.C. 2064(b), requires a 
manufacturer of a consumer product distributed in commerce who obtains 
information which reasonably supports the conclusion that such product 
contains a defect which could create a substantial product hazard, or 
creates an unreasonable risk of serious injury or death, to immediately 
inform the Commission of the defect or risk.
    5. Between May 1991 and September 1993, Aerus manufactured and sold 
throughout the United States approximately 226,000 ``pony-top corded 
Genesis, Genesis LX, Genesis LXE, Prolux, Prolux Plus, Prolux S/R, 
Prolux Warehouse, Regency, and Special Edition vacuum cleaner models'' 
(hereinafter ``vacuums'').
    6. A vacuum is a ``consumer product'' and Aerus is a 
``manufacturer'' of a ``consumer product'', which is ``distributed in 
commerce'' as those terms are defined in section 3(a)(1), (4), (11) and 
(12) of the CPSA, 15 U.S.C. 2052(a)(1), (4), (11) and (12).
    7. The vacuums are defective because the power cords on the vacuums 
can break inside the handle or the casing around the cord can break, 
leaving wires exposed. When consumers use the pony-top cord, which 
extends out of the very top of the handle assembly, as a handle 
extension, consumers may accidentally touch the exposed wires and 
receive shocks and/or burns.
    8. Between November 1991 and October 1998, Aerus received reports 
of approximately 75 incidents attributable to this defect. In 56 cases, 
consumers received shocks or burns, and in 11 cases, consumers suffered 
serious injuries resulting in second or third degree burns, shocks, 
and/or combinations thereof.
    9. From early 1992 through 1998, Aerus engaged in a number of 
modifications to its warning labels and changes to its services 
polices, implemented design changes to the handles on its vacuums, and 
engaged in a corrective action and notice program in attempts to 
eliminate the subject defect and hazard.
    10. Not until October 13, 1998, after receiving a letter from the 
staff requesting information about vacuum incidents, did Aerus provide 
to the Commission any information about the shock and/or burn hazard 
associated with the vacuums.
    11. Although Aerus had obtained sufficient information to 
reasonably support the conclusion that the vacuums contained a defect 
which could create a substantial product hazard, or created an 
unreasonable risk of serious injury or death, long before October 1998, 
it failed to report such information to the Commission, as required by 
section 15(b) of the CPSA, in violation of section 19(a)(4) of the 
CPSA, 15 U.S.C. 2068(a)(4).
    12. Aerus' failure to report to the Commission, as required by 
section 15(b) of the CPSA, was committed ``knowingly,'' as that term is 
defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d), and Aerus is 
subject to civil penalties under section 20 of the CPSA.

Response of Aerus

    13. Aerus LLC denies the staff allegations in paragraphs 4 through 
12, above. Aerus LLC denies that it violated the CPSA, or that Aerus 
LLC is liable for a reporting violation, if any, that allegedly was 
committed by a predecessor of Aerus LLC.
    14. Aerus LLC undertook a voluntary recall in this matter, pursuant 
to the Commission's ``Fast Track'' recall program, promptly upon 
learning of the alleged defect in the vacuums in 1998.
    15. Aerus LLC enters this Settlement Agreement and Order for 
settlement purposes only, to avoid incurring additional legal costs and 
expenses.

Agreement of the Parties

    16. The Commission has jurisdiction over this matter and over Aerus 
under the CPSA, 15 U.S.C. 2051-2084.
    17. Aerus LLC agrees to pay to the U.S. Treasury a civil penalty in 
the amount of two hundred fifty-thousand and no/dollars ($250,000.00), 
in settlement of this matter, payable within twenty (20) calendar days 
of receiving service of the final Settlement Agreement and Order.
    18. Aerus LLC knowingly, voluntarily and completely waives any 
rights it may have in the above captioned case (1) to the issuance of a 
Complaint in this matter; (2) to an administrative or judicial hearing 
with respect to the staff allegations cited herein; (3) to judicial 
review or other challenge or contest of the validity of the Settlement 
Agreement or the Commission's Order; (4) to a determination by the 
Commission as to whether a violation of Section 15(b) of the CPSA, 15 
U.S.C. 2064(b), has occurred; (5) to a statement of findings of fact 
and conclusions of law with regard to the staff allegations; and (6) to 
any claims under the Equal Access to Justice Act.
    19. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, this Settlement Agreement and Order shall be 
placed on the public record and shall be published in the Federal 
Register in accordance with 16 CFR 1118.20. If the Commission does not 
receive any written requests not to accept the Settlement Agreement and 
Order within 15 days, the Settlement Agreement and Order shall be 
deemed finally accepted on the 16th day after the date it is published 
in the Federal Register, in accordance with 16 CFR 1118.20(f).
    20. The Settlement Agreement and Order becomes effective upon its 
final acceptance by the Commission and service of the final order upon 
Aerus LLC.
    21. This Settlement Agreement and Order is not deemed or construed 
as an admission by Aerus (a) of any liability or wrongdoing by Aerus; 
(b) that Aerus violated any law or regulation; (c) that the vacuums are 
defective, create a substantial product hazard or are unreasonably 
dangerous; (d) that the vacuums have caused any injuries; (e) that 
Aerus LLC assumed any liability with respect to the vacuums either as a 
successor of Electrolux Corporation or under any other theory of law; 
(f) of the truth of any claims or other matters

[[Page 56809]]

stated in this Settlement Agreement and Order (except as set forth in 
paragraph 16), or alleged or otherwise stated by the Commission or any 
other person either against Aerus or with respect to the vacuums. 
Nothing contained in this Settlement Agreement and Order precludes 
Aerus from raising any defenses in any future litigation not arising 
out of the terms of this Settlement Agreement and Order.
    22. Upon final acceptance of this Settlement Agreement by the 
Commission, the issuance of the Order, and the full and timely payment 
by Aerus LLC to the United States Treasury of a civil penalty in the 
amount of two hundred fifty thousand dollars ($250,000.00), all 
Commission claims for civil penalties relating to any of the events 
that gave rise to the CPSC staff's allegations in paragraphs 4 through 
12, above, against (a) Aerus; (b) any of Aerus' current or former 
subsidiaries, affiliates, divisions or related entities; (c) any 
shareholder, member, director, officer, employee, agent or attorney of 
any entity referenced in (a) or (b) above; and (d) any predecessor, 
successor, heir, or assign of any entity referenced in (a), (b) above, 
including but not limited to Haw River Realty, Inc., will be considered 
to be released.
    23. Upon provisional acceptance by the Commission, the Commission 
may publicize the terms of the Settlement Agreement and Order.
    24. Aerus LLC agrees to the entry of the attached Order, which is 
incorporated herein by reference, and agrees to be bound by its terms.
    25. This Settlement Agreement and Order is binding upon and inure 
to the benefit of Aerus LLC, its parent and each of its assigns or 
successors.
    26. Agreements, understandings, representations, or interpretations 
made outside this Settlement Agreement and Order may not be used to 
vary or to contradict its terms.
    27. If, after the effective date hereof, any provision of this 
Settlement Agreement and Order is held to be illegal, invalid, or 
unenforceable under present or future laws effective during the terms 
of the Settlement Agreement and Order, such provision shall be fully 
severable. The rest of the Settlement Agreement and Order shall remain 
in full effect, unless the Commission and Aerus LLC determine that 
severing the provision materially impacts the purpose of the Settlement 
Agreement and Order.
    28. This Settlement Agreement and Order shall not be waived, 
changed, amended, modified, or otherwise altered, except in writing 
executed by the party against whom such amendment, modification, 
alteration, or waiver is sought to be enforced and approved by the 
Commission.
    29. This Settlement Agreement may be used in interpreting the 
Order. Agreements, understandings, representations, or interpretations 
made outside of this Settlement Agreement and Order may not be used to 
vary or contradict its terms.

Dated: March 4, 2002.
Aerus LLC.
Warren Bonham,
Chief Financial Officer.

The U.S. Consumer Product Safety Commission.
Alan H. Schoem,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Director, Legal Division, Office of Compliance.

Dated: March 4, 2002.
Ronald G. Yelenik,
Trial Attorney,
Patricia E. Kennedy,
Trial Attorney, Legal Division, Office of Compliance.

 Order

    Upon consideration of the Settlement Agreement between Aerus LLC, a 
limited liability company, formerly known as Electrolux LLC, and the 
staff of the Consumer Product Safety Commission, and the Commission 
having jurisdiction over the subject matter and over Aerus LLC, and it 
appearing the Settlement Agreement is in the public interest, it is
    Ordered, that the Settlement Agreement be, and hereby is, accepted 
and it is
    Further ordered, that Aerus LLC, shall pay the U.S. Treasury a 
civil penalty in the amount of two hundred fifty thousand and 00/100 
dollars, ($250,000.00) payable within twenty (20) days of the service 
of the Final Order upon Aerus LLC.
    Provisionally accepted and Provisional Order issued on the 29th day 
of August, 2002.

    By Order of the Commission.
Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.

[FR Doc. 02-22558 Filed 9-4-02; 8:45 am]
BILLING CODE 6355-01-M