Standard Mattress Company, Provisional Acceptance of a Settlement Agreement and Order

AGENCY:

Consumer Product Safety Commission.

ACTION:

Notice.

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 1605.13(4). Published below is a provisionally-accepted Settlement Agreement with Standard Mattress Company, containing a civil penalty of $60,000.

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 April 14, 2000.

ADDRESSES:

Persons wishing to comment on this Settlement Agreement should send written comments to the Comment 00-C0008, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT:

Michael J. Gidding, Trial Attorney, Office of Compliance and Enforcement, Consumer Product Safety Commission, Washington, DC 20207; telephone (301) 504-0626, 1344.

SUPPLEMENTARY INFORMATION:

The text of the Agreement and Order appears below.

Consent Order Agreement

Standard Mattress Company (“Respondent”), enters into this Consent Order Agreement (“Agreement”) with the staff of the Consumer Product Safety Commission (hereinafter, “Commission”) pursuant to the procedures for Consent Order Agreements contained in section 1605.13 of the Commission’s Procedures for Investigations, Inspections, and Inquiries under the Flammable Fabrics Act (FFA), 16 CFR 1605.13. This Agreement and Order are for the sole purpose of settling allegations of the staff that Respondent violated sections 3(a) and 5(c) of the Flammable Fabrics Act (FFA), as amended 15 U.S.C. 1192(a) and 1194(c), by failing to comply with requirements under the Standard for the Flammability of Mattresses and Mattress Pads, 16 CFR part 1632 (FF 4-72, amended) (the “Mattress Standard”), as is more fully set forth in the Complaint accompanying this Agreement. With respect to the matters alleged in the Complaint, the purpose of the Agreement is to settle all claims and potential claims that Respondent violated the FFA, the Federal Trade Commission Act (FTCA), 15 U.S.C. 41 et seq. (to the extent functions under that act related to the administration and enforcement of the FAA have been transferred to the Commission), the Consumer Product Safety Act (CPSA), 15 U.S.C. 2051, et seq., and all regulations promulgated under those statutes.

Respondent and the Staff Agree

1. The Consumer Product Safety Commission has jurisdiction in this matter under the FFA, the FTCA, and the CPSA.

2. Respondent is a corporation organized under the laws of the State of Connecticut, with its principal place of business located at 261 Weston Street, Hartford, Connecticut. Respondent manufactures futons.

3. Respondent is now, and has been engaged in, the manufacture for sale, and the sale in commerce, of futons which are subject to the requirements of the Mattress Standard and the FFA.

4. Respondent denies the allegations of the Complaint that it knowingly or otherwise violated the Mattress Standard and sections 3(a) and 5(c) of the FFA, as amended, 15 U.S.C. 1192(a) and 1194(c), or any provision of the FTCA or the CPSA.

5. This Agreement is entered into for the purposes of settlement only and does not constitute a determination by the Commission that Respondent knowingly or otherwise violated the Mattress Standard, the FAA, the FTCA, or the CPSA.

6. Upon final acceptance of this Agreement, Respondent agrees to conduct a consumer level recall of style 605, 608, 611, and 613 futons sold by retailers from May 1, 1998 through October 31, 1998 by (1) joining with the Commission in issuing a joint press release that is mutually acceptable to the parties; (2) notifying all retailers to whom, during this period, Standard sold such futons of the terms of recall and providing those retailers with mutually agreed upon point-of-purchase posters describing those terms; and (3) offering each consumer who owns a futon described above a replacement futon upon completion of a form and return of the law label, brand name tag, and a portion of the old futon to demonstrate its destruction, and upon identification of the retailer from whom the consumer purchased the futon, provided that no consumer shall be required to document proof of purchase as a condition for obtaining a replacement futon.

7. Without admitting to the commission of any violation, Respondent agrees to pay, in settlement of the staff's allegations, a civil penalty of $60,000 as set forth in the attached incorporated Order.

8. This Agreement becomes effective only upon its final acceptance by the Commission and service of the incorporated Final Order upon Respondent.

9. Upon final acceptance of this Agreement by the Commission and issuance of the Final Order, Respondent knowingly, voluntarily, and 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 FFA or FTCA, (4) to a statement of findings of fact and conclusions of law by the Commission, (5) to any claims under the Equal Access to Justice Act, and (6) to a determination by the Commission under section 30(d) of the CPSA, 15 U.S.C. 2079(d), that it is in the public interest to regulate the risk of injury associated with futons manufactured by Respondent for the purpose of implementing the recall referenced in paragraph 6 of this Agreement.

10. Violation of the provisions of the Order may subject Respondent to a civil and/or criminal penalty for each such violation, as prescribed by law.

11. The Commission may disclose the terms of this Agreement to the public.

12. This Agreement may be used in interpreting the Provisional and Final Orders. Agreements, understandings, representations, or interpretations apart from those contained in this Agreement may not be used to vary or to contradict its terms.

13. Upon acceptance of this Agreement, the Commission shall issue the following Order incorporated herein.

Order

Upon consideration of the Consent Order Agreement entered into between Standard Mattress Company (“Respondent”) and the staff of the Consumer Product Safety Commission; and it appearing that the Commission has jurisdiction over the subject matter and Respondent and that the Consent Order Agreement is in the public interest.

I

It Is Ordered That the Consent Order Agreement be and hereby is accepted, and

II

It Is Further Ordered That Respondent, and its successors and assigns, agents, representatives, and employees of the Respondent, acting directly or through any corporation, subsidiary, division, or other business entity, or through any agency, device or instrumentality, do forthwith cease and desist from manufacturing for sale, selling, or offering for sale, in commerce, any futon or other product which is subject to, and fails to conform with, the requirements of the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended), 16 CFR part 1632.

III

It Is Further Ordered That Respondent conduct prototype testing for each futon design, prior to production, and conduct prototype testing or, if appropriate, obtain supplier certification to support any substitution of materials after initial prototype testing, in accordance with the applicable provisions of the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended), 16 CFR part 1632.

IV

It Is Further Ordered That Respondent prepare and maintain: (a) Written records of all prototype tests specified in paragraph III of this Order for each futon design, including photographs of the tested futons; (b) a written record of the manufacturing specifications of each futon prototype; and (c) written records of the manufacturing specifications of any material substituted for that used in the original prototype testing, in accordance with applicable provisions of the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended), 16 CFR part 1632.

V

It Is Further Ordered That Respondent prepare and maintain all other records required by the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended), 16 CFR part 1632, for Respondent's futons, and comply with all applicable labeling requirements of the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended), 16 CFR part 1632, with respect to those futons.

VI

It Is Further Ordered That Respondent conduct a consumer level recall of style 605, 608, 611, and 613 futons sold by retailers from May 1, 1998 through October 31, 1998 by (1) joining with the Commission in issuing a joint press release that is mutually acceptable to the parties; (2) notifying all retailers to whom, during this period, Respondent sold such futons of the terms of recall and providing those retailers with mutually acceptable point-of-purchase posters describing those terms; and (3) offering each consumer who owns a futon described above a replacement futon upon completion of a form and return of the law label, brand name tag, and a portion of the old futon to demonstrate its destruction, and upon identification of the retailer from whom the consumer purchased the futon, provided that no consumer shall be required to document proof of purchase as a condition for obtaining a replacement futon.

VII

It Is Further Ordered That, no later than one year after final acceptance of the Consent Order Agreement by the Commission, Respondent pay to the Commission a civil penalty in the amount of SIXTY THOUSAND AND 00/100 DOLLARS ($60,000.00). If Respondent's financial condition deteriorates to a degree that payment within the prescribed time period would impose an undue financial hardship on the company, Respondent may request an extension of the payment schedule. Upon a showing of good cause, the Commission delegates to the Director of the Office of Compliance the authority to modify the terms of this order to provide an alternative payment schedule. Upon failure by Respondent to make full payment in the time specified by this agreement or any modification thereto, interest on the outstanding balance shall accrue and be paid at the federal legal rate of interest under the provisions of 28 U.S.C. 1961 (a) and (b).

VIII

It Is Further Ordered That Respondent shall within 90 days of service upon it of this Order file with the Commission a written report setting forth in detail the manner and form in which it has complied with this Order.

IX

It Is Further Ordered That Respondent: (a) Maintain records identifying each retail customer notified of the recall pursuant to paragraph VI, each consumer who receives a replacement futon pursuant to paragraph VI, and any consumer who requests but does not receive a replacement futon and the reason therefore; (b) make such records available for inspection by the Commission staff upon request; and (c) provide the Commission staff with a monthly summary, in a form designated by the staff, of the number of consumer contacts and the number of replacement futons shipped during that period.

X

It Is Further Ordered That for a period of three (3) years from the date this Order becomes final pursuant to 16 CFR 1605.13(e), Respondent notify the Commission at least thirty (30) days prior to any material proposed change in the way Respondent does business which may adversely affect its compliance obligations arising out of this Order.

Complaint

1. The staff of the Legal Division of the Office of Compliance, U.S. Consumer Product Safety Commission, brings this action for issuance of a cease and desist order against Respondent pursuant to section 5 of the Flammable Fabrics Act (FFA), 15 U.S.C. 1194, to section 5 of the Federal Trade Commission Act (FTCA), 15 U.S.C. 45, and to section 30(b) of the Consumer Product Safety Act, 15 U.S.C. 2079(b), which gives the Commission the authority to carry out certain functions under the FTCA related to the administration and enforcement of the FFA.

2. Respondent is a corporation organized under the laws of the State of Connecticut, with its principal place of business located at 261 Weston Street, Hartford, Connecticut. Respondent is a manufacturer of futons.

3. Respondent is now, and has been engaged in, the manufacture for sale and the sale in commerce, as the term “commerce” is defined in section 2(b) of the Flammable Fabrics Act (FFA), 15 U.S.C. 1191(b), of futons which are subject to the requirements of the Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended) (the “Mattress Standard”), 16 CFR part 1632, and sections 3, 4, and 5 of the FFA, 15 U.S.C. 1192, 1193, and 1194.

4. Each futon identified in paragraph 2 is intended or promoted for sleeping upon.

5. Each futon identified in paragraph 2, is therefore:

(a) A “mattress” within the meaning of section 1632.1(a) of the Mattress Standard (FF 4-72, as amended), 16 CFR 1632.1(a); and

(b) An “interior furnishing” and a “product” as defined in sections 2(e) and (h) of the FFA, as amended, 16 U.S.C. 1191(e), (h).

6. Between May, 1995 and October, 1998, Respondent manufactured futons that were subject to, and failed to comply with, the Mattress Standard in that:

(a) Respondent failed to conduct new prototype testing as required by section 1632.3 of the Mattress Standard, 16 CFR 1632.3, upon opening a new manufacturing facility.

(b) Respondent failed to maintain manufacturing and test records as required by sections 1632.31(c)(1), (2), (3), (10), and (12) of the Mattress Standard, 16 CFR 1632.31(c)(1), (2), (3), (10), and (12).

(c) Respondent failed to label the futons in accordance with section 1632.31(a)(3) of the Mattress Standard, 16 CFR 1632.31(a)(3).

7. Tests conducted in accordance with section 1632.4 of the Mattress Standard, 16 CFR 1632.4, by the California Bureau of Home Furnishings and by the Commission technical staff on futon models 605, 608, 611, and 613 manufactured by Respondent and offered for retail sale in August, 1998 demonstrated that certain futons failed to meet the ignition resistance requirements of section 1632.3 of the Mattress Standard, 16 CFR 1632.3.

8. The acts by Respondent set forth in paragraphs 5 and 6 of the complaint are unlawful and constitute an unfair method of competition and an unfair and deceptive practice in commerce under section 5(a) of the Federal Trade Commission Act (FTCA), 15 U.S.C. 45(a), in violation of section 3(a) of the FFA, 15 U.S.C. 1192(a), for which a cease and desist order may be issued against Respondent pursuant to section 5(b) of the FAA, 15 U.S.C. 1194(b), and section 5 of the FTCA, 15 U.S.C. 45.

Relief Sought

9. The staff seeks issuance of a cease and desist order against Respondent pursuant to section 5(b) of the FFA, 15 U.S.C. 1194(b), and section 5 of the FTCA, 15 U.S.C. 45.

Wherefore, the premises considered, the Commission hereby issues this Complaint on the ___ day of ______, 2000.

By direction of the Commission.

Dated: