A unanimous U.S. Consumer Product Safety Commission (“CPSC”) announced that Ross Stores Inc. (“Ross”), a national discount retailer, agreed to pay a $3.9 million civil penalty to settle allegations that it failed to report its continued sale of banned children’s upper outerwear containing drawstrings. In addition to paying a $3.9 million fine, Ross agreed to maintain a comprehensive compliance program designed to ensure Ross’s compliance with safety standards for these products. The program also aims to ensure that Ross will follow the CPSC’s product incident reporting requirements in the future. This announcement comes on the heels of two similarly structured civil penalties levied against Kolcraft and Williams-Sonoma.

Background -

On July 19, 2011, the CPSC formally designated the hazards presented by drawstrings in children’s upper outerwear as a “substantial product hazard” through a Commission rulemaking. The products are considered to pose a strangulation hazard to young children. Prior to the CPSC’s adoption of this regulation, the agency relied upon a voluntary ASTM standard and agency guidance informing stakeholders that the CPSC deemed these products to be defective under the Federal Hazardous Substances Act.