81 FR 35750 - Teavana Corporation, Provisional Acceptance of a Settlement Agreement and Order

CONSUMER PRODUCT SAFETY COMMISSION

Federal Register Volume 81, Issue 107 (June 3, 2016)

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 the Consumer Product Safety Commission's regulations. Published below is a provisionally-accepted Settlement Agreement with Teavana Corporation containing a civil penalty in the amount of three million, seven hundred fifty thousand U.S. dollars (US $3,750,000) within thirty (30) days of service of the Commission's final Order accepting the Settlement Agreement.

[Federal Register Volume 81, Number 107 (Friday, June 3, 2016)]
[Notices]
[Pages 35750-35752]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-12944]


=======================================================================
-----------------------------------------------------------------------

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 16-C0003]


Teavana Corporation, 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 the Consumer 
Product Safety Commission's regulations. Published below is a 
provisionally-accepted Settlement Agreement with Teavana Corporation 
containing a civil penalty in the amount of three million, seven 
hundred fifty thousand U.S. dollars (US $3,750,000) within thirty (30) 
days of service of the Commission's final Order accepting the 
Settlement Agreement.

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 June 20, 2016.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 16-C0003, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 820, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Leah Wade, Trial Attorney, Division of 
Compliance, Office of the General Counsel, Consumer Product Safety 
Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; 
telephone (301) 504-7225.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order \1\ 
appears below.
---------------------------------------------------------------------------

    \1\ The Commission voted (3-2) to provisionally accept the 
Settlement Agreement and Order regarding Teavana Corporation. 
Chairman Kaye, Commissioner Adler, Commissioner Robinson voted to 
provisionally accept the Settlement Agreement and Order. 
Commissioner Buerkle and Commissioner Mohorovic voted to reject the 
Settlement Agreement and Order. Commissioner Mohorovic filed a 
statement regarding this matter. The statement is available at the 
Office of the Secretary or the CPSC Web site, www.cpsc.gov.

    Dated: May 27, 2016.
Todd A. Stevenson,
Secretary.

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

    In the Matter of: TEAVANA CORPORATION, CPSC Docket No.: 16-C0003

SETTLEMENT AGREEMENT

    1. In accordance with the Consumer Product Safety Act, 15 U.S.C. 
2051-2089 (``CPSA'') and 16 CFR 1118.20, Teavana Corporation 
(``Teavana''), 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 that Teavana is subject to civil 
penalties in this matter, under section 20 of the CPSA, 15 U.S.C. 2069, 
as 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. Teavana Corporation was incorporated in Georgia, and, at the 
time of the matters recited in this Agreement, its principal place of 
business was in Atlanta, Georgia.

STAFF CHARGES

    4. Between August 2007 and April 2013, Teavana imported for sale 
approximately 445,000 Double-Walled Glass Tea Tumblers (``Tumblers'') 
in the United States. Most of the models of the Tumblers are designed 
to hold hot beverages, and one model was intended for cold beverages.
    5. The Tumblers are a ``consumer product'' that was ``distributed 
in commerce,'' as those terms are defined or used in sections 3(a)(5) 
and (8) of the CPSA, 15 U.S.C. 2052(a)(5) and (8). Teavana was a 
``manufacturer,'' ``distributor'' and ``retailer'' of the Tumblers, as 
such terms are defined in sections 3(a)(7), (11) and (13) of the CPSA, 
15 U.S.C. 2052(a)(7), (11) and (13).
    6. Teavana had information reasonably supporting the conclusion 
that the Tumblers are defective or created an unreasonable risk of 
serious injury or death because they can

[[Page 35751]]

unexpectedly explode, shatter, or break during normal use, posing a 
laceration and burn hazard.
    7. Between January 2010 and March 2013, Teavana received numerous 
reports of the Tumblers unexpectedly exploding, shattering or breaking, 
including reports of six injuries to consumers who were cut by broken 
glass or burned by hot liquid while holding a Tumbler that exploded, 
shattered, or broke.
    8. Despite having information reasonably supporting the conclusion 
that the Tumblers contained a defect which could create a substantial 
product hazard or create an unreasonable risk of serious injury or 
death, Teavana 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) and (4).
    9. In failing to immediately inform the Commission about the defect 
or unreasonable risk associated with the Tumblers, Teavana 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).
    10. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Teavana 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 TEAVANA

    11. Teavana's settlement of this matter does not constitute an 
admission of staff's charges as set forth in paragraphs 4 through 10 
above.
    12. In March 2013, Teavana notified the Commission pursuant to 
section 15(b) of the CPSA, 15 U.S.C. 2064(b) concerning Teavana's 
receipt of complaints and incident reports about the Tumblers.
    13. On May 20, 2013, in conjunction with the Commission, Teavana 
voluntarily announced a recall of eleven different models of double-
walled borosilicate glass Tumblers (made by three different 
manufacturers), including a Tumbler model for which Teavana had 
received no complaints or incident reports, and some Tumbler models for 
which only a few complaints were received.
    14. The voluntary recall of the Tumblers, as well as the section 
15(b) reporting, by Teavana was conducted out of an abundance of 
caution and without Teavana having determined or concluded that any of 
the eleven different models of Tumblers contained a defect, posed a 
substantial product hazard, or created an unreasonable risk of serious 
injury or death.
    15. The Tumblers were all well-constructed using a high quality 
glass with superior hardness and resistance to temperature shock.

AGREEMENT OF THE PARTIES

    16. Under the CPSA, the Commission has jurisdiction over the matter 
involving the Tumblers and over Teavana.
    17. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Teavana or a 
determination by the Commission that Teavana violated the CPSA's 
reporting requirements.
    18. In settlement of staff's charges, and to avoid the cost, 
distraction, delay, uncertainty, and inconvenience of protracted 
litigation, Teavana shall pay a civil penalty in the amount of three 
million, seven hundred and fifty thousand U.S. dollars (US $3,750,000) 
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: http://www.pay.gov for allocation to, and credit against, 
the payment obligations of Teavana under this Agreement. Failure to 
make such payment by the date specified in the Commission's Order shall 
constitute Default.
    19. All unpaid amounts, if any, due and owing under the Agreement, 
shall constitute a debt due and immediately owing by Teavana to the 
United States, and interest shall accrue and be paid by Teavana 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''). Teavana 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 Teavana 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. Teavana shall pay the United 
States all reasonable costs of collection and enforcement under this 
paragraph, respectively, including reasonable attorney's fees and 
expenses.
    20. After staff receives this Agreement executed on behalf of 
Teavana, 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).
    21. 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 Teavana, 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.
    22. Effective upon the later of: (i) The Commission's final 
acceptance of the Agreement and service of the accepted Agreement upon 
Teavana, and (ii) and the date of issuance of the final Order, for good 
and valuable consideration, Teavana 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 Teavana 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.
    23. Teavana represents and agrees that it will comply with and 
maintain the comprehensive compliance program of its parent corporation 
designed to ensure compliance with the CPSA and regulations enforced by 
the Commission. That program includes written standards, policies and 
procedures to ensure relevant reports and complaints are sent to 
compliance personnel, recalled goods are properly disposed of, 
employees have a confidential process to report compliance-related 
issues to officials with authority to act, CPSA compliance 
responsibility is exercised with due care

[[Page 35752]]

by senior management, company policies are communicated to applicable 
personnel, records are retained for five years, and compliance program 
documents will be made available to staff upon reasonable request.
    24. Teavana represents and agrees that it will comply with and 
maintain the comprehensive system of internal controls and procedures 
of its parent corporation. These procedures are designed to ensure 
Teavana discloses to the Commission information in accordance with 
applicable law, reports information in a timely, truthful, complete and 
accurate manner as required by the CPSA, and periodically evaluates 
these controls and procedures to ensure they are adequate to allow 
Teavana to report to the Commission in accordance with applicable law.
    25. The parties acknowledge and agree that the Commission may 
publicize the terms of the Agreement and the Order.
    26. Teavana 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 Teavana, enforceable against Teavana in 
accordance with its terms. The individuals signing the Agreement on 
behalf of Teavana represent and warrant that they are duly authorized 
by Teavana to execute the Agreement.
    27. The signatories represent that they are authorized to execute 
this Agreement.
    28. The Agreement is governed by the laws of the United States.
    29. The Agreement and the Order shall apply to, and be binding 
upon, Teavana and each of its parents, successors, transferees, and 
assigns, and a violation of the Agreement or Order may subject Teavana, 
and each of its parents, successors, transferees, and assigns, to 
appropriate legal action.
    30. The Agreement and the Order constitute the complete agreement 
between the parties on the subject matter contained therein.
    31. 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.
    32. 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.
    33. 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 Teavana agree in writing that severing the provision materially 
affects the purpose of the Agreement and the Order.

TEAVANA CORPORATION

Dated: May 19, 2016
By:--------------------------------------------------------------------
Bernard Acoca
President, Teavana Corporation

Dated: May 19, 2016
By:--------------------------------------------------------------------
Georgia C. Ravitz
Arent Fox LLP
1717 K Street, NW
Washington, D.C. 20006-5344

Counsel to Teavana Corporation

U.S. CONSUMER PRODUCT SAFETY COMMISSION

Mary T. Boyle
Acting General Counsel

Mary B. Murphy
Assistant General Counsel

Dated: May 19, 2016
By:--------------------------------------------------------------------
Leah Wade
Trial Attorney
Division of Compliance
Office of the General Counsel

UNITED STATES OF AMERICA CONSUMER PRODUCT SAFETY COMMISSION

    In the Matter of: TEAVANA CORPORATION, CPSC Docket No.: 16-C0003

ORDER

    Upon consideration of the Settlement Agreement entered into 
between Teavana Corporation (``Teavana''), and the U.S. Consumer 
Product Safety Commission (``Commission''), and the Commission 
having jurisdiction over the subject matter and over Teavana, and it 
appearing that the Settlement Agreement and the Order are in the 
public interest, it is:
    ORDERED that the Settlement Agreement be, and is, hereby, 
accepted; and it is
    FURTHER ORDERED that Teavana shall comply with the terms of the 
Settlement Agreement and shall pay a civil penalty in the amount of 
three million, seven hundred fifty thousand U.S. dollars (US 
$3,750,000) within thirty (30) days after service of the 
Commission's final Order accepting the Settlement Agreement. The 
payment shall be made by electronic wire transfer to the Commission 
via: http://www.pay.gov. Upon the failure of Teavana to make the 
foregoing payment when due, interest on the unpaid amount shall 
accrue and be paid by Teavana at the federal legal rate of interest 
set forth at 28 U.S.C. 1961(a) and (b). If Teavana fails to make 
such payment or to comply in full with any other provision of the 
Settlement Agreement, such conduct will be considered a violation of 
the Settlement Agreement and Order.
    Provisionally accepted and provisional Order issued on the 27th 
day of May, 2016.

BY ORDER OF THE COMMISSION:

Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.
[FR Doc. 2016-12944 Filed 6-2-16; 8:45 am]
 BILLING CODE 6355-01-P