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From Products Liability Law Daily, September 29, 2016

Sears’ assessed $400,000 penalty for violating federal lead renovation rule

By Pamela C. Maloney, J.D.

Sears Home Improvement Inc. (Sears) agreed to pay a $400,000 civil penalty to settle charges by the U.S. Environmental Protection Agency (EPA) and the Department of Justice (DOJ) that work performed by Sears’ contractors during home renovation projects violated the federal Lead Renovation, Repair and Painting (RRP) Rule. Under the settlement, the company also agreed to implement a comprehensive, corporate-wide program to ensure that the contractors it hires to perform renovation work are properly certified and follow required procedures to prevent exposure to lead dust from home renovation activities (U.S.A. v. Sears Home Improvement Products, Inc., September 28, 2016).

The RRP Rule (40 CFR Part745, Subpart E), which is a part of the federal Toxic Substances Control Act (15 USC § 2601 et seq.), is intended to ensure that owners and occupants of housing built before 1978, as well as any child-occupied facilities, receive information on lead-based paint hazards before renovations begin, that individuals performing such renovations are properly trained and certified by EPA and follow specific work practices to reduce the potential for lead-based paint exposure. Home improvement companies like Sears that contract with renovators to perform renovation work for their customers must ensure that those contractors comply with all of the requirements of the RRP Rule.

Underlying complaint. According to the government’s complaint, Sears’ and its contractors failed to provide a lead-hazard information pamphlet entitled "Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools" to owners and occupants prior to beginning home renovation projects. The government also alleged that Sears failed to establish, retain, or provide compliance documentation showing that specific contractors had been certified by EPA, had been properly trained, had used lead-safe work practices, or had performed required post-renovation cleaning. These allegations were based on EPA’s review of Sear’s 2013-2015 records from projects performed by the company’s renovation contractors at numerous projects in cities across California, as well as in Georgia, Minnesota, Nevada, New York, and Wisconsin.

In the course of its investigation into Sears’ records, EPA identified 71 renovation sites in California, Nevada, Wisconsin, Georgia, and New York for which Sears could not document its compliance with one or more of the RRP Rule’s requirements. EPA also uncovered violations at 18 renovation sites in Minnesota for which Sears failed to establish and maintain records of RRP compliance or to make RRP compliance records available to EPA.

Injunctive relief. Under the terms of the settlement, Searsis required to contract only with EPA-certified and state-certified firms and renovators, guarantee they maintain certification, and ensure they use lead-safe work practices during renovations. This settlement also adds requirements to Sear’s compliance program beyond what is required by the RRP Rule to better protect Sears customers nationwide during renovations of any housing that was built before 1978 and any child-occupied facilities.

Sears also has agreed to add a link on its website to EPA’s content on lead-safe work practices and use a company-wide system to actively track the RRP firm and renovator certifications of its contractors. In addition, Sears must suspend any contractor that is not operating in compliance with the RRP Rule, investigate all reports of potential noncompliance, and ensure that any violations are corrected and reported to EPA.

The case is No. 1:16-cv-09302.

Attorneys: James D. Freeman, U.S. Dept. of Justice, for the United States.

Companies: Sears Home Improvement, Inc.

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