United States of America v. Spectrum Brands, Inc.
Transmission of Notice of Appeal, Orders, Judgments and Docket Sheet to Seventh Circuit Court of Appeals re: 264 Notice of Appeal, (Attachments: # 1 Order No.: 196, # 2 Order No.: 234, # 3 Judgment, # 4 Order No.: 256, # 5 Opinion and Order No.: 262, # 6 Amended Judgment, # 7 Docket Sheet) (lak)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
This action came for consideration before the court with U.S. District Judge William M.
Conley presiding. The issues have bene considered on summary judgment, at a bench trial,
and in post-trial briefing. The following decision has been rendered.
IT IS ORDERED AND ADJUDGED that final judgment is entered in favor of
plaintiff United States of America against defendant Spectrum Brands.
already, defendant is directed to pay civil penalties to plaintiff, the United States of
America, in the amount of $1,936,675.00 on or before October 30, 2017. This amount
represents a civil penalty owed to the United States pursuant to 15 U.S.C.
2069 and is
not compensation for actual pecuniary loss and, therefore is not subject to discharge under
the Bankruptcy Code pursuant to 11 U.S.C.
No interest shall accrue on the ordered payment if timely made. In the event of
any default in payment, the entire unpaid amount shall constitute a debt due and
immediately owing to plaintiff and post-judgment interest shall be assessed from the date
of this order until payment is made as set forth in 28 U.S.C.
IT IS FURTHER ORDERED AND ADJUDGED that a Permanent Injunction
pursuant to Federal Rule of Civil Procedure 65 is ENTERED under the following terms
A. Defendant shall maintain sufficient systems, programs, and internal controls to
ensure compliance with the CPSA and the regulations enforced by the CPSC
including, without limitation, the section 15 (b) reporting requirement under 15
U.S.C. §§ 2064(b)(3)-4) and the prohibition of the sale of recalled products
under 15 U.S.C. §§ 2068(a)(2)(B).
B. Defendant shall, on or before October 13, 2017, disseminate copies of both the
civil penalty and summary judgment opinions and orders (dkt. ## 196, 234) by
personal service or certified mail to each of its directors, officers, managementlevel employees, and in-house attorneys involved in the sale, offering for sale,
manufacture, distribution in commerce, or importation into the United States
of "consumer products" as defined in the CPSA, 15 U.S.C. § 2052(a)(5)
(collectively "Associated Persons").
C. Defendant shall implement improvements to its compliance programs as
required under subsection A as follows: ·
1. Maintain,, the position of Senior Director, Global Quality (or its
equivalent) with qualifications and authority to monitor (and if
necessary, enhance) Spectrum's policies to ensure future product quality
2. Regularly track product safety information, including product return
rates, call center data, and product "star" ratings by consumers on various
websites, and evaluate that information to determine whether issues are
being identified and appropriately handled;
3. Document calls and written communications regarding potential and
actual incidents and injmy information, collect products that are the
subject of reports by consumers or retail partners of potential safety
issues, analyze those products and bring the results of any such analysis
to the attention of Spectrum's Senior Director, Global Quality (or its
equivalent), and others as appropriate, to determine whether Spectrum
has a reporting obligation to the CPSC;
4. Implement a formal "Request for Corrective Action" procedure whereby
quality engineers and product safety managers can make a request to
change a product based on various factors, including consumer
complaints and incidents;
5. Maintain a "Product Hold Process" (or its equivalent) through which the
manufacture and distribution of products can be placed on hold for
design issues, manufacturing issues, performance issues, and safety issues,
including any and all such products that may be returned to Spectrum by
a warehouse, distributor, customer or otherwise to prevent the sale of
6. Ensure compliance training of responsible employees on CPSA and/or
CPSC regulations, .particularly with respect to section 15(b)'s reporting
requirement under 15 U.S.C. § 2064(b)(3)-(4) and the prohibition of the
sale of recalled products under 15 U.S.C.
7. Shall retain, at its own expense, an independent expert, who by reason of
background, training and education is qualified to assist in reviewing and
recommending changes, if necessa1y, to Spectrum's comprehensive safety
program for CPSA compliance, with particular emphasis on compliance
with the section IS(b) reporting requirement and procedures necessary
to prevent the sale of recalled products.
a. The parties may have 90 days to agree upon an independent
expert, or if the parties cannot reach agreement, for each party to
designate one expert with whom the court will consult to identify
a neutral expert.
b. Following the retention of the neutral expert and that expert's
review, Spectrum shall have 120 days to implement the
recommendations made by that expert in good faith, unless
within 30 days of receiving a recommendation, Spectrum files a
written challenge in this court on the basis that it is unreasonable
(in timeframe or otherwise) or overreaches the number or
severity of defendant's past violations of the CPSA, in which case
Spectrum need only implement that recommendation by further
order of this court.
8. Compliance with ,r,r 1-7 shall be deemed good faith compliance with this
D. Unlike paragraphs 1-6 above, implementation of paragraph 7 ·would go beyond
the status quo, as paragraph 7 requires Spectrum to do more than simply
maintain the status quo. As such, the court will continue to stay enforcement
of that paragraph pending appeal or expiration of the time to appeal, whichever
is later. Additionally, the court stays enforcement of the $821,675 civil liability
attributable to Spectrum's failure to report.
E. This court will retain jurisdiction of this action for the purposes of construing,
enforcing, or modifying this order and granting such additional relief as may be
necessary or appropriate.
F. The United States may seek reasonable costs and attorney's fees upon
succeeding in a suit to enforce this order.
Approved as to fonn this ~day o f ¥ 2018.
£1Peter Oppeneer, Clerk of Court
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