15 U.S.C. § 2069 — Civil penalties

Page 1751 TITLE 15—COMMERCE AND TRADE § 2069 fect of evading any third party testing re- quirements under section 2063(a)(2) of this title; (15) export from the United States for pur- pose of sale any consumer product, or other product or substance regulated by the Com- mission (other than a consumer product or substance, the export of which is permitted by the Secretary of the Treasury pursuant to sec- tion 2066(e) of this title) that— (A) is subject to an order issued under sec- tion 2061 or 2064 of this title or is a banned hazardous substance within the meaning of section 1261(q)(1) of this title; or (B) is subject to a voluntary corrective ac- tion taken by the manufacturer, in consulta- tion with the Commission, of which action the Commission has notified the public; or (16) violate an order of the Commission issued under section 2067(c) of this title. (b) Exception Paragraphs (1) and (2) of subsection (a) of this section shall not apply to any person (1) who holds a certificate issued in accordance with sec- tion 2063(a) of this title to the effect that such consumer product conforms to all applicable consumer product safety rules, unless such per- son knows that such consumer product does not conform, or (2) who relies in good faith on the representation of the manufacturer or a dis- tributor of such product that the product is not subject to an applicable product safety rule. (Pub. L. 92–573, § 19, Oct. 27, 1972, 86 Stat. 1224; Pub. L. 94–284, §§ 12(b), 13(a), May 11, 1976, 90 Stat. 508, 509; Pub. L. 95–319, § 3(b), July 11, 1978, 92 Stat. 390; Pub. L. 95–631, § 6(b), Nov. 10, 1978, 92 Stat. 3745; Pub. L. 97–414, § 9(j)(4), Jan. 4, 1983, 96 Stat. 2064; Pub. L. 101–608, title I, § 112(d), Nov. 16, 1990, 104 Stat. 3117; Pub. L. 110–314, title II, § 216(a), Aug. 14, 2008, 122 Stat. 3056; Pub. L. 112–28, § 2(b), Aug. 12, 2011, 125 Stat. 279.) Editorial Notes AMENDMENTS 2011—Subsec. (a)(14). Pub. L. 112–28 substituted ‘‘, or to subdivide the production of any children’s product into small quantities that have the effect of evading any third party testing requirements under section 2063(a)(2) of this title;’’ for period at end. 2008—Subsec. (a)(1), (2). Pub. L. 110–314, § 216(a)(1), added pars. (1) and (2) and struck out former pars. (1) and (2) which read as follows: ‘‘(1) manufacture for sale, offer for sale, distribute in commerce, or import into the United States any con- sumer product which is not in conformity with an ap- plicable consumer product safety standard under this chapter; ‘‘(2) manufacture for sale, offer for sale, distribute in commerce, or import into the United States any con- sumer product which has been declared a banned haz- ardous product by a rule under this chapter;’’. Subsec. (a)(6). Pub. L. 110–314, § 216(a)(2), amended par. (6) generally. Prior to amendment, par. (6) read as fol- lows: ‘‘fail to furnish a certificate required by section 2063 of this title or issue a false certificate if such per- son in the exercise of due care has reason to know that such certificate is false or misleading in any material respect; or to fail to comply with any rule under sec- tion 2063(c) of this title (relating to labeling);’’. Subsec. (a)(7) to (10). Pub. L. 110–314, § 216(a)(3)–(6), struck out ‘‘or’’ at end of par. (7) and ‘‘and’’ at end of par. (8) and substituted semicolon for period at end of pars. (9) and (10). Subsec. (a)(12) to (16). Pub. L. 110–314, § 216(a)(7), added pars. (12) to (16). 1990—Subsec. (a)(11). Pub. L. 101–608 added par. (11). 1983—Subsec. (a)(7). Pub. L. 97–414, § 9(j)(4)(A), sub- stituted ‘‘section 2058(g)(2)’’ for ‘‘section 2058(d)(2)’’. Subsec. (a)(8). Pub. L. 97–414, § 9(j)(4)(B), redesignated par. (9) as (8) and struck out former par. (8) which made it unlawful for any person to fail to comply with any rule under section 2062 of this title (relating to prior notice and description of new consumer products). Subsec. (a)(9), (10). Pub. L. 97–414, § 9(j)(4)(B), redesig- nated par. (10), as added by Pub. L. 95–319, as (9). Former par. (9) redesignated (8). 1978—Subsec. (a)(10). Pub. L. 95–631 added par. (10), providing that it be unlawful to fail to file a statement with the Commission pursuant to section 2067(b) of this title. Pub. L. 95–319 added par. (10), providing that it be un- lawful to fail to comply with any rule or requirement under section 2082 of this title. 1976—Subsec. (a). Pub. L. 94–284 substituted ‘‘to’’ for ‘‘and to’’ and inserted ‘‘, and to prohibited acts’’ after ‘‘refund’’ in par. (5), inserted ‘‘or fail or refuse to estab- lish or maintain records,’’ after ‘‘copying of records,’’ in par. (3), and added pars. (8) and (9). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–314 effective on the date that is 30 days after Aug. 14, 2008, see section 239(a) of Pub. L. 110–314, set out as a note under section 2051 of this title. EFFECTIVE DATE Section effective on the sixtieth day following Oct. 27, 1972, see section 34 of Pub. L. 92–573, set out as a note under section 2051 of this title. DUTY TO REPORT CHOKING INCIDENTS CAUSED BY CHILDREN’S TOYS OR GAMES For purposes of subsec. (a)(3) of this section, require- ment to report information relating to choking inci- dents caused by children’s toys or games to Consumer Product Safety Commission deemed a requirement under this chapter, see section 102 of Pub. L. 103–267, set out as a Reporting Requirements note under section 2064 of this title. § 2069. Civil penalties (a) Amount of penalty (1) Any person who knowingly violates section 2068 of this title shall be subject to a civil pen- alty not to exceed $100,000 for each such viola- tion. Subject to paragraph (2), a violation of sec- tion 2068(a)(1), (2), (4), (5), (6), (7), (8), (9), (10), or (11) of this title shall constitute a separate of- fense with respect to each consumer product in- volved, except that the maximum civil penalty shall not exceed $15,000,000 for any related series of violations. A violation of section 2068(a)(3) of this title shall constitute a separate violation with respect to each failure or refusal to allow or perform an act required thereby; and, if such violation is a continuing one, each day of such violation shall constitute a separate offense, ex- cept that the maximum civil penalty shall not exceed $15,000,000 for any related series of viola- tions. (2) The second sentence of paragraph (1) of this subsection shall not apply to violations of para- graph (1) or (2) of section 2068(a) of this title— (A) if the person who violated such para- graphs is not the manufacturer or private la- Page 1752 TITLE 15—COMMERCE AND TRADE § 2069 1 So in original. The comma probably should not appear. beler or a distributor of the products involved, and (B) if such person did not have either (i) ac- tual knowledge that his distribution or sale of the product violated such paragraphs or (ii) notice from the Commission that such dis- tribution or sale would be a violation of such paragraphs. (3)(A) The maximum penalty amounts author- ized in paragraph (1) shall be adjusted for infla- tion as provided in this paragraph. (B) Not later than December 1, 2011, and De- cember 1 of each fifth calendar year thereafter, the Commission shall prescribe and publish in the Federal Register a schedule of maximum au- thorized penalties that shall apply for violations that occur after January 1 of the year imme- diately following such publication. (C) The schedule of maximum authorized pen- alties shall be prescribed by increasing each of the amounts referred to in paragraph (1) by the cost-of-living adjustment for the preceding five years. Any increase determined under the pre- ceding sentence shall be rounded to— (i) in the case of penalties greater than $1,000 but less than or equal to $10,000, the nearest multiple of $1,000; (ii) in the case of penalties greater than $10,000 but less than or equal to $100,000, the nearest multiple of $5,000; (iii) in the case of penalties greater than $100,000 but less than or equal to $200,000, the nearest multiple of $10,000; and (iv) in the case of penalties greater than $200,000, the nearest multiple of $25,000. (D) For purposes of this subsection: (i) The term ‘‘Consumer Price Index’’ means the Consumer Price Index for all-urban con- sumers published by the Department of Labor. (ii) The term ‘‘cost-of-living adjustment for the preceding five years’’ means the percent- age by which— (I) the Consumer Price Index for the month of June of the calendar year pre- ceding the adjustment; exceeds (II) the Consumer Price Index for the month of June preceding the date on which the maximum authorized penalty was last adjusted. (b) Relevant factors in determining amount of penalty In determining the amount of any penalty to be sought upon commencing an action seeking to assess a penalty for a violation of section 2068(a) of this title, the Commission shall con- sider the nature, circumstances, extent, and gravity of the violation, including the nature of the product defect, the severity of the risk of in- jury, the occurrence or absence of injury, the number of defective products distributed, the appropriateness of such penalty in relation to the size of the business of the person charged, including how to mitigate undue adverse eco- nomic impacts on small businesses, and such other factors as appropriate. (c) Compromise of penalty; deductions from pen- alty Any civil penalty under this section may be compromised by the Commission. In deter- mining the amount of such penalty or whether it should be remitted or mitigated and in what amount, the Commission shall consider the ap- propriateness of such penalty to the size of the business of the person charged, including how to mitigate undue adverse economic impacts on small businesses, the nature, circumstances, ex- tent, and gravity of the violation, including,1 the nature of the product defect, the severity of the risk of injury, the occurrence or absence of injury, and the number of defective products dis- tributed, and such other factors as appropriate. The amount of such penalty when finally deter- mined, or the amount agreed on compromise, may be deducted from any sums owing by the United States to the person charged. (d) ‘‘Knowingly’’ defined As used in the first sentence of subsection (a)(1) of this section, the term ‘‘knowingly’’ means (1) the having of actual knowledge, or (2) the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations. (Pub. L. 92–573, § 20, Oct. 27, 1972, 86 Stat. 1225; Pub. L. 94–284, § 13(b), May 11, 1976, 90 Stat. 509; Pub. L. 95–631, § 6(c), Nov. 10, 1978, 92 Stat. 3745; Pub. L. 97–35, title XII, § 1211(c), Aug. 13, 1981, 95 Stat. 721; Pub. L. 101–608, title I, §§ 112(e), 115(a), Nov. 16, 1990, 104 Stat. 3117, 3118; Pub. L. 110–314, title II, § 217(a)(1), (b)(1)(A), Aug. 14, 2008, 122 Stat. 3058.) Editorial Notes AMENDMENTS 2008—Subsec. (a)(1). Pub. L. 110–314, § 217(a)(1)(A), (B), substituted ‘‘$100,000’’ for ‘‘$5,000’’ and substituted ‘‘$15,000,000’’ for ‘‘$1,250,000’’ in two places. Subsec. (a)(3)(B). Pub. L. 110–314, § 217(a)(1)(C), which directed amendment of subsec. (a)(1) by substituting ‘‘December 1, 2011,’’ for ‘‘December 1, 1994,’’ in par. (3)(B), was executed by making the substitution in sub- sec. (a)(3)(B) to reflect the probable intent of Congress. Subsec. (b). Pub. L. 110–314, § 217(b)(1)(A)(i), inserted ‘‘the nature, circumstances, extent, and gravity of the violation, including’’ after ‘‘shall consider’’, sub- stituted ‘‘products distributed,’’ for ‘‘products distrib- uted, and’’, and inserted ‘‘, including how to mitigate undue adverse economic impacts on small businesses, and such other factors as appropriate’’ before period at end. Subsec. (c). Pub. L. 110–314, § 217(b)(1)(A)(ii)(II), in- serted ‘‘, and such other factors as appropriate’’ after ‘‘products distributed’’. Pub. L. 110–314, § 217(b)(1)(A)(ii)(I), which directed amendment of subsec. (c) by inserting ‘‘, including how to mitigate undue adverse economic impacts on small businesses, the nature, circumstances, extent, and gravity of the violation, including’’ after ‘‘person charged’’, was executed by making the insertion after ‘‘person charged’’ the first place appearing, to reflect the probable intent of Congress. 1990—Subsec. (a)(1). Pub. L. 101–608, §§ 112(e), 115(a)(1), (2), substituted ‘‘$5,000’’ for ‘‘$2,000’’, and ‘‘(10), or (11)’’ for ‘‘or (10)’’, and substituted ‘‘$1,250,000’’ for ‘‘$500,000’’ in two places. Subsec. (a)(3). Pub. L. 101–608, § 115(a)(3), added par. (3). 1981—Subsecs. (b) to (d). Pub. L. 97–35 added subsec. (b), redesignated former subsec. (b) as (c), substituted Page 1753 TITLE 15—COMMERCE AND TRADE § 2071 ‘‘the Commission shall consider the appropriateness of such penalty to the size of the business of the person charged, the nature of the product defect, the severity of the risk of injury, the occurrence or absence of in- jury, and the number of defective products distributed’’ for ‘‘the appropriateness of such penalty to the size of the business of the person charged and the gravity of the violation shall be considered’’, and redesignated subsec. (c) as (d). 1978—Subsec. (a)(1). Pub. L. 95–631 made violation of section 2068(a)(10) of this title a separate offense. 1976—Subsec. (a)(1). Pub. L. 94–284 inserted reference to pars. (8) and (9). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment by section 217(a)(1) of Pub. L. 110–314 ef- fective on the date that is the earlier of the date on which final regulations are issued under section 217(b)(2) of Pub. L. 110–314, set out below, or 1 year after Aug. 14, 2008, see section 217(a)(4) of Pub. L. 110–314, set out as a note under section 1194 of this title. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Aug. 13, 1981, see section 1215 of Pub. L. 97–35, set out as a note under section 2052 of this title. EFFECTIVE DATE Section effective on the sixtieth day following Oct. 27, 1972, see section 34 of Pub. L. 92–573, set out as a note under section 2051 of this title. CIVIL PENALTY CRITERIA Pub. L. 110–314, title II, § 217(b)(2), Aug. 14, 2008, 122 Stat. 3059, provided that: ‘‘Not later than 1 year after the date of enactment of this Act [Aug. 14, 2008], and in accordance with the procedures of section 553 of title 5, United States Code, the [Consumer Product Safety] Commission shall issue a final regulation providing its interpretation of the penalty factors described in sec- tion 20(b) of the Consumer Product Safety Act (15 U.S.C. 2069(b)), section 5(c)(3) of the Federal Hazardous Substances Act (15 U.S.C. 1264(c)(3)), and section 5(e)(2) of the Flammable Fabrics Act (15 U.S.C. 1194(e)(2)), as amended by subsection (a).’’ § 2070. Criminal penalties (a) Violation of section 2068 of this title is punishable by— (1) imprisonment for not more than 5 years for a knowing and willful violation of that sec- tion; (2) a fine determined under section 3571 of title 18; or (3) both. (b) Any individual director, officer, or agent of a corporation who knowingly and willfully au- thorizes, orders, or performs any of the acts or practices constituting in whole or in part a vio- lation of section 2068 of this title shall be sub- ject to penalties under this section without re- gard to any penalties to which that corporation may be subject under subsection (a). (c)(1) In addition to the penalties provided by subsection (a), the penalty for a criminal viola- tion of this chapter or any other Act enforced by the Commission may include the forfeiture of assets associated with the violation. (2) In this subsection, the term ‘‘criminal vio- lation’’ means a violation of this chapter or any other Act enforced by the Commission for which the violator is sentenced to pay a fine, be im- prisoned, or both. (Pub. L. 92–573, § 21, Oct. 27, 1972, 86 Stat. 1225; Pub. L. 110–314, title II, § 217(c)(1), (2), (d), Aug. 14, 2008, 122 Stat. 3060.) Editorial Notes AMENDMENTS 2008—Subsec. (a). Pub. L. 110–314, § 217(c)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: ‘‘Any person who knowingly and will- fully violates section 2068 of this title after having re- ceived notice of noncompliance from the Commission shall be fined not more than $50,000 or be imprisoned not more than one year, or both.’’ Subsec. (b). Pub. L. 110–314, § 217(c)(2), struck out ‘‘, and who has knowledge of notice of noncompliance received by the corporation from the Commission,’’ after ‘‘section 2068 of this title’’. Subsec. (c). Pub. L. 110–314, § 217(d), added subsec. (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective on the sixtieth day following Oct. 27, 1972, see section 34 of Pub. L. 92–573, set out as a note under section 2051 of this title. § 2071. Injunctive enforcement and seizure (a) Jurisdiction The United States district courts shall have jurisdiction to take the following action: (1) Restrain any violation of section 2068 of this title. (2) Restrain any person from manufacturing for sale, offering for sale, distributing in com- merce, or importing into the United States a product in violation of an order in effect under section 2064(d) of this title. (3) Restrain any person from distributing in commerce a product which does not comply with a consumer product safety rule. Such actions may be brought by the Commis- sion (without regard to section 2076(b)(7)(A) of this title) or by the Attorney General in any United States district court for a district where- in any act, omission, or transaction constituting the violation occurred, or in such court for the district wherein the defendant is found or trans- acts business. In any action under this section process may be served on a defendant in any other district in which the defendant resides or may be found. (b) Products liable to proceeding Any consumer product— (1) which fails to conform with an applicable consumer product safety rule, or (2) the manufacture for sale, offering for sale, distribution in commerce, or the impor- tation into the United States of which has been prohibited by an order in effect under section 2064(d) of this title, when introduced into or while in commerce or while held for sale after shipment in commerce shall be liable to be proceeded against on libel of information and condemned in any district court of the United States within the jurisdic- tion of which such consumer product is found. Proceedings in cases instituted under the au- thority of this subsection shall conform as near- ly as possible to proceedings in rem in admi-