Federal Register: November 9, 1994
======================================================================= ----------------------------------------------------------------------- CONSUMER PRODUCT SAFETY COMMISSION [CPSC Docket No. 95-C0003] Product Identification; Notice of Inquiry; Request for Comments and Information AGENCY: Consumer Product Safety Commission. ACTION: Concord Enterprises, Inc. Provisional Acceptance of a Settlement Agreement under the Consumer Product Safety Act. ----------------------------------------------------------------------- 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 16 CFR 1118.20 (e)-(h). Published below is a provisionally-accepted Settlement Agreement with Concord Enterprises, Inc., a corporation. 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 November 25, 1994. ADDRESSES: Persons wishing to comment on this Settlement Agreement should send written comments to the Comment 95-C0003, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207. FOR FURTHER INFORMATION CONTACT: Earl A. Gershenow, Trial Attorney, Office of Compliance and Enforcement, Consumer Product Safety Commission, Washington, DC 20207; telephone (301) 504-0626. SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears below. Dated: November 3, 1994. Sadye E. Dunn, Secretary. Settlement Agreement 1. Concord Enterprises, Inc. (hereinafter ``Concord''), a corporation, enters into this Settlement Agreement and Order (hereinafter ``Settlement Agreement'') with the staff of the Consumer Product Safety Commission, and agrees to the entry of the Order described herein. The purpose of the Settlement Agreement is to settle the staff's allegations that Concord knowingly caused the introduction into interstate commerce of certain banned hazardous toys, in violation of section 4(a) of the Federal Hazardous Substances Act, 15 U.S.C. 1263(a). I. Jurisdiction 2. The Commission has jurisdiction over Concord and the subject matter of this Settlement Agreement pursuant to section 30(a) of the Consumer Product Safety Act (hereinafter ``CPSA''), 15 U.S.C. 2079(a), and sections 2(f)(1)(D), 4(a), and 5(c) of the Federal Hazardous Substances Act (hereinafter ``FHSA''), 15 U.S.C. 1261(f)(1)(D), 1263(a), and 1264(c). II. The Parties 3. The ``staff'' is the staff of the Consumer Product Safety Commission, an independent regulatory commission of the United States established pursuant to section 4 of the CPSA, 15 U.S.C. 2053. 4. Concord is a corporation organized and existing under the laws of the State of California, with its principal corporate offices located at 2957 E. 46th Street, Los Angeles, California 90058. Concord is a wholesaler of general and non-durable merchandise, including toys. III. Allegations of the Staff A. Toys 5. On five occasions between June 27, 1991, and December 17, 1991, Concord caused the introduction into interstate commerce of 7 kinds of toys (107,040 units) intended for use by children under three years of age, which are identified and described below: ------------------------------------------------------------------------ Sample No. Product Entry date Expt/Mfg ------------------------------------------------------------------------ P-860-7237...... Baby Angela..... 6/27/91 L&A Company. M-867-2954...... 3-Piece Doll.... 7/20/91 L&A Company. P-867-7694...... Plastic Doll.... 10/31/91 L&A Company. P-867-7695...... Plastic Wind Up 10/31/91 L&A Company. Family Car. P-867-7716...... Soft Vinyl 11/11/91 Manley Toys. Animal In Plastic Box. P-860-7238...... Baby & Bear..... 12/17/91 Sunlight Industries. P-860-7236...... Two Dolls in 12/17/91 Rewinner Enterprises. Plastic Vinyl. ------------------------------------------------------------------------ 6. The toys identified in paragraph 5 above are subject to, but failed to comply with, the Commission's Small Parts Regulation, 16 CFR part 1501, in that, when tested under the ``use and abuse'' test methods specified in 16 CFR 1500.51 and 1500.52, (a) one or more parts of each tested toy separated; and (b) one or more of the separated parts from each of the tested toys fit completely within the test cylinder, as set forth in 16 CFR 1501.4. 7. Because separated parts fit completely within the test cylinder as described in paragraph 6 above, each of the toys identified in paragraph 5 presents a ``mechanical hazard'' within the meaning of section 2(s) of the FHSA, 15 U.S.C. 1261(s) (choking, aspiration and/or ingestion of small parts). 8. Each of the toys identified in paragraph 5 above is a ``hazardous substance'' pursuant to section 2(f)(1)(D) of the FHSA, 15 U.S.C. 1261(f)(1)(D). 9. Each of the toys identified in paragraph 5 above is a ``banned hazardous substance'' pursuant to (a) section 2(q)(1)(A) of the FHSA, 15 U.S.C. 1261(g)(1)(A) (any toy or other article intended for use by children which bears or contains a hazardous substance); and (b) 16 CFR 1500.18(a)(9). B. Baby Rattles 10. On November 21, 1990, Concord caused the introduction into interstate commerce of 4,320 units of a baby rattle, ``Set of Two Assorted Baby Rattles'' (``Rattle''), purchased from Manley Toys (Sample No. M-867-2411). 11. When tested under the methods and procedures prescribed in 16 CFR 1500.51, the Rattle entered and penetrated the full depth of the cavity of the test fixture specified in 16 CFR 1510.4. 12. Pursuant to 16 CFR 1500.18(a)(15), the Rattle presents a ``mechanical hazard'' (i.e., choking, aspiration, and/or ingestion of small parts) within the meaning of section 2(s) of the FHSA, 15 U.S.C. 1261(s) because it failed to comply with 16 CFR 1510.4. 13. The Rattle is a ``hazardous substance'' pursuant to section 2(f)(1)(D) of the FHSA, 15 U.S.C. 1261(f)(1)(D), because it is a toy or other article intended for use by children which presents a ``mechanical hazard'' under 16 CFR 1500.18(a)(15). 14. The Rattle is a ``banned hazardous substance'' pursuant to section 2(q)(1)(A) of the FHSA, 15 U.S.C. 1261(q)(1)(A), because it is a toy or other article intended for use by children which bears or contains a hazardous substance. 15. The introduction into interstate commerce of the aforesaid banned hazardous Rattle is a violation of section 4(a) of the FHSA, 15 U.S.C. 1263(a), for which a civil penalty may be imposed pursuant to section 5(c) of the FHSA, 15 U.S.C. 1264(c). IV. Response of Concord 16. Concord denies the allegations of the staff set forth in paragraphs 5 through 15 above that it has knowingly caused the introduction into commerce of the aforesaid banned hazardous toys or rattles, or that it has violated the FHSA as alleged by the staff. V. Agreement of the Parties 17. The Consumer Product Safety Commission has jurisdiction over Concord and the subject matter of this Settlement Agreement under the following acts: Consumer Product Safety Act, 15 U.S.C. 2051 et seq., and the Federal Hazardous Substances Act, 15 U.S.C. 1261 et seq. 18. Upon final acceptance by the Commission of this Settlement Agreement and issuance of the Final Order, Concord agrees to pay to the Commission a civil penalty in the amount of SIXTY THOUSAND AND 00/100 DOLLARS ($60,000.00), in three (3) payments of TWENTY THOUSAND AND 00/ 100 ($20,000.00) each. The first payment shall be due within twenty (20) days after service of the Final Order of the Commission accepting the Agreement, hereinafter, the ``anniversary date.'' The second payment shall be made within one year of the anniversary date, and the third payment shall be made within two years of the anniversary date. Payment of the full amount of the civil penalty shall settle fully the staff's allegations set forth in paragraphs 5 through 15 above that Concord violated the FHSA. Upon the failure by Concord to make a payment or upon the making of a late payment by Concord (a) the entire amount of the civil penalty shall be due and payable, and (b) interest on the outstanding balance shall accrue and be paid at the federal legal rate of interest under the provisions of 28 U.S.C. 1961(a) and (b). 19. The Commission does not make any determination that Concord knowingly violated the FHSA. The Commission and Concord agree that this Agreement is entered into for the purposes of settlement only. 20. Upon final acceptance of this Settlement Agreement by the Commission and issuance of the Final Order, Concord knowingly, voluntarily and completely, waives any rights it may have in this matter (1) to an administrative or judicial hearing, (2) to judicial review or other challenge or contest of the validity of the Commission's actions, (3) to a determination by the Commission as to whether Concord failed to comply with the FHSA as aforesaid, and (4) to a settlement of findings of fact and conclusions of law. 21. For purposes of section 6(b) of the CPSA, 15 U.S.C. 2055(b), this matter shall be treated as if a complaint had issued; and, the Commission may publicize the terms of the Settlement Agreement and the Order. 22. Upon provisional acceptance of this Settlement Agreement by the Commission, this Settlement Agreement and the Provisional Order shall be placed on the public record and shall be published in the Federal Register in accordance with the procedures set forth in 16 CFR 1118.20(e)-(h). If the Commission does not receive any written request not to accept the Settlement Agreement within 15 days, the Settlement Agreement shall be deemed finally accepted and the Final Order shall be deemed issued on the 16th day after the date the Settlement Agreement is published in the Federal Register. 23. The parties further agree that the Commission shall issue the attached Order incorporated herein by reference; and that a violation of the Order shall subject Concord to appropriate legal action. 24. No agreement, understanding, representation, or interpretation not contained in this Settlement Agreement may be used to vary or to contradict its terms. 25. The provisions of the Settlement Agreement and Final Order shall apply to Concord and each of its successors and assigns. Dated: May 10, 1994. Respondent Concord Enterprises, Inc. Hamid Shayan, President, Concord Enterprises, Inc., 2957 E 46th Street, Los Angeles, CA 90058. Commission Staff. David Schmeltzer, Assistant Executive Director, Office of Compliance and Enforcement. Eric L. Stone, Acting Director, Division of Administrative Litigation, Office of Compliance and Enforcement. Dated: May 13, 1994 by: Earl A. Gershenow, Trial Attorney, Division of Administrative Litigation, Office of Compliance and Enforcement. Dated: May 31, 1994 by: Dennis C. Kacoyanis, Trial Attorney, Division of Administrative Litigation, Office of Compliance and Enforcement. Order Upon consideration of the Settlement Agreement entered into between respondent Concord Enterprises, Inc., a corporation, and the staff of the Consumer Product Safety Commission; and the Commission having jurisdiction over the subject matter and Concord Enterprises, Inc; and it appearing that the Settlement Agreement and Order is in the public interest, it is Ordered, that the Settlement Agreement and Order be and hereby is accepted, as indicated below; and it is Further Ordered, that upon final acceptance of the Settlement Agreement and Order, Concord Enterprises, Inc. shall pay to the Commission a civil penalty in the amount of SIXTY THOUSAND-FIVE AND 00/ 100 DOLLARS ($60,000.00) in three (3) payments of TWENTY THOUSAND AND 00/100 DOLLARS ($20,000.00) each. The first payment shall be due within twenty (20) days after service of the Final Order of the Commission accepting the Settlement Agreement, hereinafter, the ``anniversary date.'' The second payment shall be made within one year of the anniversary date, and the third payment shall be made within two years of the anniversary date. Payment of the full amount of the civil penalty shall settle fully the staff's allegations set forth in paragraphs 5 through 15 of the Settlement Agreement and Order that Concord Enterprises, Inc. violated the FHSA. Upon the failure by Concord to make a payment or upon the making of a late payment by Concord (a) the entire amount of the civil penalty shall be due and payable, and (b) interest on the outstanding balance shall accrue and be paid at the federal legal rate of interest under the provisions of 28 U.S.C. 1961 (a) and (b). Provisionally accepted and Provisional Order issued on the 3rd day of November, 1994. By Order of the Commission Sadye E. Dunn, Secretary, Consumer Product Safety Commission. [FR Doc. 94-27681 Filed 11-8-94; 8:45 am] BILLING CODE 6355-01-M