Notice2023-09820
Generac Power Systems, Inc.
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 9, 2023
Issuing agencies
Consumer Product Safety Commission
Abstract
The Commission publishes in the Federal Register any settlement that it provisionally accepts under the Consumer Product Safety Act. Published below is a provisionally accepted Settlement Agreement with Generac Power Systems, Inc., containing a civil penalty in the amount of $15,800,00.00, subject to the terms and conditions of the Settlement Agreement. The Commission voted unanimously (4-0) to provisionally accept the proposed Settlement Agreement and Order pertaining to Generac Power Systems, Inc.
Full Text
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<title>Federal Register, Volume 88 Issue 89 (Tuesday, May 9, 2023)</title>
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[Federal Register Volume 88, Number 89 (Tuesday, May 9, 2023)]
[Notices]
[Pages 29891-29894]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-09820]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 23-C0002]
Generac Power Systems, Inc.
AGENCY: Consumer Product Safety Commission.
ACTION: Notice.
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SUMMARY: The Commission publishes in the Federal Register any
settlement that it provisionally accepts under the
[[Page 29892]]
Consumer Product Safety Act. Published below is a provisionally
accepted Settlement Agreement with Generac Power Systems, Inc.,
containing a civil penalty in the amount of $15,800,00.00, subject to
the terms and conditions of the Settlement Agreement. The Commission
voted unanimously (4-0) to provisionally accept the proposed Settlement
Agreement and Order pertaining to Generac Power Systems, Inc.
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 May 24, 2023.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to Comment 23-C0002, Office of the
Secretary, Consumer Product Safety Commission, 4330 East-West Highway,
Bethesda, MD 20814; telephone: (240) 863-8938 (mobile), (301) 504-7479
(office); email: <a href="/cdn-cgi/l/email-protection#fb988b8898d69488bb988b8898d59c948d"><span class="__cf_email__" data-cfemail="cdaebdbeaee0a2be8daebdbeaee3aaa2bb">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Asha Allam, Trial Attorney, Division
of Enforcement and Litigation, Office of Compliance and Field
Operations, Consumer Product Safety Commission, 4330 East-West Highway,
Bethesda, Maryland 20814; <a href="/cdn-cgi/l/email-protection#eaabab86868b87aa899a9989c48d859c"><span class="__cf_email__" data-cfemail="e9a8a885858884a98a999a8ac78e869f">[email protected]</span></a>, 301-504-7402 (office).
SUPPLEMENTARY INFORMATION: The text of the Settlement Agreement and
Order appear below.
Dated: May 3, 2023.
Pamela J. Stone,
Acting Secretary.
United States of America
Consumer Product Safety Commission
In the Matter of: GENERAC POWER SYSTEMS, INC.
CPSC Docket No.: 23-C0002
Settlement Agreement
1. In accordance with the Consumer Product Safety Act, 15 U.S.C.
2051-2089 (``CPSA''), and 16 CFR 1118.20, Generac Power Systems, Inc.
(``Generac''), and the United States Consumer Product Safety Commission
(``Commission''), through its staff, hereby enter into this Settlement
Agreement (``Agreement''). The Agreement and the incorporated attached
Order resolve staff's charges set forth below.
The Parties
2. The Commission is an independent federal regulatory agency,
established pursuant to, and responsible for, the enforcement of the
CPSA, 15 U.S.C. 2051-2089. By executing the Agreement, staff is acting
on behalf of the Commission, pursuant to 16 CFR 1118.20(b). The
Commission issues the Order under the provisions of the CPSA.
3. Generac is a corporation, organized and existing under the laws
of the state of Wisconsin, with its principal place of business in
Waukesha, Wisconsin.
Staff Charges
4. Between June 2013 and June 2021, Generac manufactured in or
imported into the United States, and distributed, offered for sale, and
sold approximately 321,000 Generac[supreg] or DR[supreg] brand 6500-
watt and 8000-watt portable generators, unit types XT8000E, XT8000EFI,
GP6500, GP6500E, GP8000E, PRO 6500M, PRO 6500E, and HomeLink 6500E in
32 models (``Portable Generators'' or ``Subject Products'').
5. The Subject Products are ``consumer products'' that were
``import[ed]'' and ``distribut[ed] in commerce,'' as those terms are
defined or used in sections 3(a)(5), (7), and (9) of the CPSA, 15
U.S.C. 2052(a)(5), (7), and (9). Generac is a ``distributor'' of the
Subject Products, as such term is defined in section 3(a)(8) of the
CPSA, 15 U.S.C. 2052(a)(8).
Violation of CPSA Section 19(a)(4)
6. The Subject Products contain a defect which could create a
substantial product hazard or create an unreasonable risk of serious
injury or death because an unlocked handle can pinch consumers' fingers
against the generator frame when the generator is moved, posing finger
amputation and crushing hazards.
7. Beginning in October 2018 and continuing into 2020, Generac
received reports from consumers whose fingers were partially amputated
or crushed by the unlocked handle of the Subject Products, which
constituted grievous bodily injury, as defined in 16 CFR 1115.12(d).
8. During that same time frame, in an effort to prevent the finger
amputation and crushing hazard, the Firm began evaluating designs to
add a handle hinge guard for existing models of Subject Products,
redesigning the handle for new models, adding warning labels near the
handle hinge, and revising the owner's manual to include additional
instructions and warnings regarding the importance of engaging the
locking pin when moving the product.
9. Despite possessing information that reasonably supported the
conclusion that the Subject Products contained a defect that could
create a substantial product hazard or created an unreasonable risk of
serious injury or death, Generac did not immediately report to the
Commission.
10. By the time Generac filed an initial report with the Commission
under 15 U.S.C. 2064(b) concerning the Subject Products, the Firm had
received five reports of consumers suffering finger amputations while
attempting to transport the Subject Products that required
hospitalization, surgery, and/or sutures and resulted in permanent
disfigurement.
11. The Commission and Generac jointly announced the recall of the
Subject Products on July 29, 2021 with a repair remedy and instruction
to stop using the Subject Products, unless the locking pin has been
inserted to secure the handle in place before and after moving the
generator.
12. After Generac reported a post-recall incident involving a
repaired but unlocked Subject Product, the Commission and Generac
jointly re-announced the recall of the Subject Products on November 10,
2022 with a revised repair remedy consisting of a set of spacers to
move the handle away from the frame, eliminating the pinch point, and
instruction to stop using unrepaired Subject Products, unless the
locking pin has been inserted to secure the handle in place before and
after moving the generator.
Failure to Timely Report
13. Despite having information reasonably supporting the conclusion
that the Subject Products contained a defect or created an unreasonable
risk of serious injury or death, Generac did not notify the Commission
immediately of such defect or risk, as required by sections 15(b)(3)
and (4) of the CPSA, 15 U.S.C. 2064(b)(3), (4), in violation of section
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
14. Because the information in Generac's possession about the
Subject Products constituted actual and presumed knowledge, Generac
knowingly violated section 19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4),
as the term ``knowingly'' is defined in section 20(d) of the CPSA, 15
U.S.C. 2069(d).
15. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Generac is
subject to civil penalties for its knowing violation of section
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4).
Response of Generac
16. This agreement does not constitute an admission by Generac to
the staff's charges as set forth in paragraphs 4 through 15 above,
including without limitation that the Subject Product contained a
defect that
[[Page 29893]]
could create a substantial product hazard or created an unreasonable
risk of serious injury or death; that Generac failed to notify the
Commission in a timely matter in accordance with section 15(b) of the
CPSA, 15 U.S.C. 2064(b); and that Generac knowingly violated section
19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4), as the term ``knowingly''
is defined in section 20(d) of the CPSA, 15 U.S.C. 2069(d).
17. Generac enters into this Agreement to settle this matter and to
avoid the cost, distraction, delay, uncertainty, and inconvenience of
protracted litigation or other proceedings. Generac does not admit that
it violated the CPSA or any other law, and Generac's willingness to
enter into this Agreement and Order does not constitute, nor is it
evidence of, an admission by Generac of liability or violation of any
law.
Agreement of the Parties
18. Under the CPSA, the Commission has jurisdiction over the matter
involving the Subject Products and over Generac.
19. The parties enter into the Agreement for settlement purposes
only. The Agreement does not constitute an admission by Generac or a
determination by the Commission that Generac violated the CPSA.
20. In settlement of staff's charges, Generac shall pay a civil
penalty in the amount of fifteen million, eight hundred thousand
dollars ($15,800,000) (``Total Civil Penalty Amount''). The $15,800,000
Payment shall be paid within thirty (30) calendar days after receiving
service of the Commission's final Order accepting the Agreement. All
payments to be made under the Agreement shall constitute debts owing to
the United States and shall be made by electronic wire transfer to the
United States via <a href="http://www.pay.gov">http://www.pay.gov</a>, for allocation to, and credit
against, the payment obligations of Generac under this Agreement.
Failure to make such payment by the date specified in the Commission's
final Order shall constitute Default.
21. The Commission or the United States may seek enforcement for
any breach of, or any failure to comply with, any provision of this
Agreement and Order in United States District Court, to seek relief
including, but not limited to, collecting amounts due.
22. All unpaid amounts, if any, due and owing under the Agreement,
shall constitute a debt due and immediately owing by Generac to the
United States, and interest shall accrue and be paid by Generac at the
federal legal rate of interest set forth at 28 U.S.C. 1961(a) and (b)
from the date of Default, until all amounts due have been paid in full
(hereinafter ``Default Payment Amount'' and ``Default Interest
Balance''). Generac shall consent to a Consent Judgment in the amount
of the Default Payment Amount and Default Interest Balance, and the
United States, at its sole option, may collect the entire Default
Payment Amount and Default Interest Balance, or exercise any other
rights granted by law or in equity, including, but not limited to,
referring such matters for private collection, and Generac agrees not
to contest, and hereby waives and discharges any defenses to, any
collection action undertaken by the United States, or its agents or
contractors, pursuant to this paragraph. Generac shall pay the United
States all reasonable costs of collection and enforcement under this
paragraph, respectively, including reasonable attorney's fees and
expenses.
23. After staff receives this Agreement executed on behalf of
Generac, staff shall promptly submit the Agreement to the Commission
for provisional acceptance. Promptly following provisional acceptance
of the Agreement by the Commission, the Agreement shall be placed on
the public record and 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
fifteen (15) calendar days, the Agreement shall be deemed finally
accepted on the 16th calendar day after the date the Agreement is
published in the Federal Register, in accordance with 16 CFR
1118.20(f).
24. This Agreement is conditioned upon, and subject to, the
Commission's final acceptance, as set forth above, and it is subject to
the provisions of 16 CFR 1118.20(h). Upon the later of: (i)
Commission's final acceptance of this Agreement and service of the
accepted Agreement upon Generac, and (ii) the date of issuance of the
final Order, this Agreement shall be in full force and effect, and
shall be binding upon the parties.
25. Effective upon the later of: (1) the Commission's final
acceptance of the Agreement and service of the accepted Agreement upon
Generac and (2) and the date of issuance of the final Order, for good
and valuable consideration, Generac hereby expressly and irrevocably
waives and agrees not to assert any past, present, or future rights to
the following, in connection with the matter described in this
Agreement:
(i) an administrative or judicial hearing;
(ii) judicial review or other challenge or contest of the
Commission's actions;
(iii) a determination by the Commission of whether Generac failed
to comply with the CPSA and the underlying regulations;
(iv) a statement of findings of fact and conclusions of law; and
(v) any claims under the Equal Access to Justice Act.
26. Generac shall implement and maintain a compliance program
(``Compliance Program'') designed to ensure compliance with the CPSA
with respect to any consumer product imported, manufactured,
distributed or sold by Generac, which shall contain the following
elements:
(i) written standards, policies, and procedures, including those
designed to ensure that information that may relate to or impact CPSA
compliance are conveyed effectively to personnel responsible for CPSA
compliance, whether or not an injury has been reported;
(ii) procedures and systems for tracking and reviewing claims,
including warranty claims, and reports for safety concerns and for
implementing corrective and preventive actions when compliance
deficiencies or violations are identified;
(iii) procedures requiring that information required to be
disclosed by Generac to the Commission is recorded, processed, and
reported in accordance with applicable law;
(iv) procedures requiring that all reporting made to the Commission
is timely, truthful, complete, accurate, and in accordance with
applicable law;
(v) procedures requiring that prompt disclosure is made to
Generac's management of any significant deficiencies or material
weaknesses in the design or operation of such internal controls that
are reasonably likely to affect adversely, in any material respect,
Generac's ability to record, process and report to the Commission in
accordance with applicable law;
(vi) mechanisms to effectively communicate to all applicable
Generac employees, through training programs or other means,
compliance-related company policies and procedures to prevent
violations of the CPSA;
(vii) a mechanism for confidential employee reporting of
compliance-related questions or concerns to either a compliance officer
or to another senior manager with authority to act as necessary;
(viii) Generac's senior management responsibility for, and general
board oversight of, CPSA compliance, including the implementation of
steps to ensure that incident and injury data
[[Page 29894]]
is reviewed and analyzed for purposes of CPSA Section 15b reporting;
(ix) an annual internal audit of the effectiveness of policies,
procedures, systems, and training related to CPSA compliance that
evaluates opportunities for improvement, deficiencies or weaknesses,
and the Firm's overall culture of compliance; and
(x) retention of all CPSA compliance-related records for at least
five (5) years, and availability of such records to CPSC staff upon
request.
27. Generac shall submit a report under CPSA Section 16(b), sworn
to under penalty of perjury:
(i) describing in detail its compliance program and internal
controls and the actions Generac has taken to comply with each
subparagraph of paragraph 26;
(ii) affirming that during the reporting period, Generac has
reviewed its compliance program and internal controls, including the
actions referenced in subparagraph (i) of this paragraph, for
effectiveness, and that it complies with each subparagraph of paragraph
26, or describing in detail any non-compliance with any such
subparagraph; and
(iii) identifying the results of the annual internal audit
referenced in paragraph 26(ix) and any changes or modifications made
during the reporting period to Generac's compliance program or internal
controls to ensure compliance with the terms of the CPSA and, in
particular, the requirements of CPSA Section 15 related to timely
reporting.
Such reports shall be submitted annually to the Director, Office of
Compliance, Division of Enforcement and Litigation, for a period of
three (3) years. The first report shall be submitted 30 days after the
close of the first 12-month reporting period, which begins on the date
of the Commission's Final Order of Acceptance of the Agreement, and
successive reports shall be due annually on the same date thereafter.
Without limitation, Generac acknowledges and agrees that failure to
make such timely and accurate reports as required by this Agreement and
Order may constitute a violation of Section 19(a)(3) of the CPSA and
may subject the Firm to enforcement under section 22 of the CPSA.
28. Notwithstanding and in addition to the above, Generac shall
promptly provide written documentation of any changes or modifications
to its compliance program or internal controls and procedures,
including the effective dates of the changes or modifications thereto.
Generac shall cooperate fully and truthfully with staff and shall make
available all non-privileged information and materials and personnel
deemed necessary by staff to evaluate Generac's compliance with the
terms of the Agreement.
29. The parties acknowledge and agree that the Commission may
publicize the terms of the Agreement and the Order.
30. Generac represents that the Agreement:
(i) is entered into freely and voluntarily, without any degree of
duress or compulsion whatsoever;
(ii) has been duly authorized; and
(iii) constitutes the valid and binding obligation of Generac,
enforceable against Generac in accordance with its terms. The
individuals signing the Agreement on behalf of Generac represent and
warrant that they are duly authorized by Generac to execute the
Agreement.
31. The signatories represent that they are authorized to execute
this Agreement.
32. The Agreement is governed by the laws of the United States.
33. The Agreement and the Order shall apply to, and be binding
upon, Generac and each of its parents, successors, transferees, and
assigns; and a violation of the Agreement or Order may subject Generac,
and each of its parents, successors, transferees, and assigns, to
appropriate legal action.
34. The Agreement, any attachments, and the Order constitute the
complete agreement between the parties on the subject matter contained
therein.
35. The Agreement may be used in interpreting the Order.
Understandings, agreements, representations, or interpretations apart
from those contained in the Agreement and the Order may not be used to
vary or contradict their terms. For purposes of construction, the
Agreement shall be deemed to have been drafted by both of the parties
and shall not, therefore, be construed against any party, for that
reason, in any subsequent dispute.
36. The Agreement may not be waived, amended, modified, or
otherwise altered, except as in accordance with the provisions of 16
CFR 1118.20(h). The Agreement may be executed in counterparts.
37. If any provision of the Agreement or the Order is held to be
illegal, invalid, or unenforceable under present or future laws
effective during the terms of the Agreement and the Order, such
provision shall be fully severable. The balance of the Agreement and
the Order shall remain in full force and effect, unless the Commission
and Generac agree in writing that severing the provision materially
affects the purpose of the Agreement and the Order.
Generac Power Systems, Inc.
Dated: 4/20/2023
By: York Ragen,
Generac Power Systems, Inc., Chief Financial Officer.
Dated: 4/20/2023
By: Erika Z. Jones,
Mayer Brown LLP, Counsel to Generac Power Systems, Inc.
U.S. Consumer Product Safety Commission
Mary B. Murphy, Director.
Leah Ippolito, Supervisory Attorney.
Asha Allam, Trial Attorney.
Dated: 4/24/2023
By: Asha Allam,
Trial Attorney, Division of Enforcement and Litigation, Office of
Compliance and Field Operations.
United States of America
Consumer Product Safety Commission
In the Matter of: GENERAC POWER SYSTEMS, INC.
CPSC Docket No.: 23-C0002
Order
Upon consideration of the Settlement Agreement entered into between
Generac Power Systems, Inc. (``Generac''), and the U.S. Consumer
Product Safety Commission (``Commission'' or ``CPSC''), and the
Commission having jurisdiction over the subject matter and over
Generac, and it appearing that the Settlement Agreement and the Order
are in the public interest, the Settlement Agreement is incorporated by
reference and it is:
Provisionally accepted and provisional Order issued on the 3rd day
of May 2023.
By order of the commission,
Pamela J. Stone,
Acting Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 2023-09820 Filed 5-8-23; 8:45 am]
BILLING CODE 6355-01-P
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