[Federal Register Volume 61, Number 55 (Wednesday, March 20, 1996)]
[Notices]
[Pages 11384-11386]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6736]



-----------------------------------------------------------------------

CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 96-C0003]


Taito America Corporation, a Corporation; Provisional Acceptance 
of a Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: 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 C.F.R. Section 
1118.20(e). Published below is a provisionally-accepted Settlement 
Agreement with Taito America Corporation, 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 April 4, 1996.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 96-C0002, Office of the 
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.

FOR FURTHER INFORMATION CONTACT:
Ronald G. Yelenik, Trial Attorney, Office of Compliance and 
Enforcement, Consumer Product Safety Commission, Washington, D.C. 
20207; telephone (301) 504-0626.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: March 14, 1996.
Sadye E. Dunn,
Secretary.

Settlement Agreement and Order

    1. This Settlement Agreement and Order, entered into between Taito 
America Corporation, a corporation (hereinafter, ``Taito''), and the 
staff of the Consumer Product Safety Commission (hereinafter, 
``staff''), pursuant to the procedures set forth in 16 C.F.R. 
Sec. 1118.20, is a compromise resolution of the matter described

[[Page 11385]]

herein, without a hearing or determination of issues of law and fact.

I. The Parties

    2. The ``Staff'' is the staff of the Consumer Product Safety 
Commission (hereinafter, ``Commission''), an independent federal 
regulatory agency of the United States government, established by 
Congress pursuant to section 4 of the Consumer Product Safety Act 
(hereinafter, ``CPSA''), as amended, 15 U.S.C. Sec. 2053.
    3. Respondent Taito is a corporation organized and existing under 
the laws of the State of Delaware with its principal corporate offices 
located in Buffalo Grove, Illinois.

II. Jurisdiction

    4. Taito manufactured certain Super Sonic Blastman Arcade Boxing 
Games, (hereinafter, ``Blastman(men)'' or ``the game(s)''). The 
Blastman is a ``consumer product'' within the meaning of section 
3(a)(1) of the CPSA, 15 U.S.C. Sec. 2052(a)(1).
    5. Taito manufactured and distributed these games to arcades, 
amusement parks, and other similar locations nationwide. Taito is a 
``manufacturer'' of a ``consumer product'' which is ``distributed in 
commerce'', as those terms are defined in sections 3(a)(1), (4), and 
(11) of the CPSA, 15 U.S.C. Secs. 2052(a)(1), (4) and (11).

III. The Product

    6. The Blastman is a coin operated video arcade boxing game 
consisting of a video screen, a punching pad and a pair of boxing 
gloves. The objective of the game is to punch a foam filled circular 
pad which is attached to a three foot metal arm as hard as possible in 
an attempt to knock the pad/arm back to a flat position. Taito 
manufactured approximately 320 Blastmen in the United States between 
1991 and 1992.

IV. Staff Allegations Concerning the Blastman and of a Failure by Taito 
to Comply With the Reporting Requirements of Section 15(b) of the CPSA

    7. The Blastman contains a defect which could create a substantial 
product hazard and creates an unreasonable risk of serious injury in 
that the potential for serious injury is inherent in the use of the 
game and users are unlikely to perceive this risk.
    8. On or about October 21, 1991, Taito first became aware of an 
injury involving the Blastman. In succeeding years, Taito learned of 
many other Blastman incidents with resulting injuries.
    9. Between 1991 and 1994, Taito learned of a total of approximately 
seventy incidents involving the game, the majority of which resulted in 
fractured arms and wrists.
    10. Both prior to and during the period in which Taito received 
notice of the Blastman injuries, the company implemented several design 
and material changes involving the Blastman.
    11. Although Taito obtained sufficient information to reasonably 
support the conclusion that the Blastman, described in paragraph 6 
above, contained a defect which could create a substantial product 
hazard, or created an unreasonable risk of serious injury or death, it 
failed to report such information to the Commission as required by 
section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b). This is a violation 
of section 19(a)(4) of the CPSA, 15 U.S.C. Sec. 2068(a)(4).
    12. Taito knowingly failed to report to the Commission as required 
by section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), and is subject to 
civil penalties under section 20 of the CPSA, 15 U.S.C. Sec. 2069.

V. Response of Taito

    13. Taito denies that its Blastman contains a defect which creates 
or which could create a substantial product hazard within the meaning 
of section 15(a) of the CPSA, 15 U.S.C. Sec. 2064(a), or creates an 
unreasonable risk of serious injury or death.
    14. Taito initially imported approximately fifty Blastman to test 
the market in the United States. When the test units received a 
favorable response, Taito implemented certain design changes to improve 
the safety of the gloves and the pad. Subsequently, Taito manufactured 
and distributed approximately 320 games in the United States.
    15. Between 1991 and 1994, Taito learned of a total of 
approximately sixty incidents involving the Blastman.
    16. Taito denies that the information it received as to these 
incidents reasonably supported the conclusion that the Blastman 
contained a defect which could create a substantial product hazard, or 
create an unreasonable risk of serious injury or death, and therefore, 
denies it had an obligation to report this information to the 
Commission under section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b).
    17. Since Taito believes that it had no obligation to report the 
incidents of injury regarding the Blastman to the Commission, it did 
not knowingly fail to report these incidents to the Commission as 
required by section 15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), and thus 
denies it is subject to civil penalties under section 20 of the CPSA, 
15 U.S.C. Sec. 2069.
    18. Based upon the Commission's preliminary determination that the 
Blastman presents a substantial product hazard, Taito agreed to conduct 
a voluntary recall of the Blastman to avoid incurring legal costs and 
adverse publicity.
    19. By entering into this Settlement Agreement and Order, Taito 
does not admit any liability or wrongdoing, and this Settlement 
Agreement and Order does not constitute, and is not evidence of, or an 
admission of, any liability or wrongdoing by Taito.

VI. Agreement of the Parties

    20. The Commission has jurisdiction in this matter for purposes of 
entry and enforcement of this Settlement Agreement and Order.
    21. Taito knowingly, voluntarily and completely waives, in this 
section 15(b) matter only, any rights it may have (1) to an 
administrative or judicial hearing with respect to the Commission's 
claim for a civil penalty, (2) to judicial review or other challenge or 
contest of the validity of the Commission's action with regard to its 
claim for a civil penalty, (3) to a determination by the Commission as 
to whether a violation of Section 15(b) of the CPSA, 15 U.S.C. 
Sec. 2064(b), has occurred, (4) to a statement of finding of fact and 
conclusions of law with regard to the Commission's claim for a civil 
penalty, and (5) to any claims under the Equal Access to Justice Act.
    22. This Settlement Agreement and Order becomes effective only upon 
its final acceptance by the Commission and service of the incorporated 
order upon Respondent.
    23. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, the Commission shall place this Agreement and 
Order on the public record and shall publish it is the Federal Register 
in accordance with the procedure set forth in 16 C.F.R. 
Sec. 1118.20(e). If the Commission does not receive any written request 
not to accept the Settlement Agreement and Order within 15 days, the 
Agreement and Order shall be deemed finally accepted on the 16th day 
after the date it is published in the Federal Register, in accordance 
with 16 C.F.R. Sec. 1118.20(f).
    24. Upon final acceptance of this Settlement Agreement and Order, 
the Commission shall issue the attached Order.
    25. The provisions of this Settlement Agreement and Order shall 
apply to Taito and its successors and assigns.

[[Page 11386]]

    26. For purposes of section 6(b) of the CPSA, 15 U.S.C. 
Sec. 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 Order.
    27. Taito agrees to inform the Commission if it learns of any 
additional Blastman incidents or any other relevant information 
affecting the safety of the Blastman.
    28. This Agreement may be used in interpreting the Order. 
Agreements, understandings, representations, or interpretations made 
outside of this Settlement Agreement and order may not be used to vary 
or to contradict its terms.

TAITO America Corporation.

    Dated: February 6, 1996.

    By:
Reginald Winter,
Secretary, Taito America Corporation.

The Consumer Product Safety Commission.

David Schmeltzer,
Associate Executive Director, Office of Compliance.
Eric L. Stone,
Acting Director, Division of Administrative Litigation, Office of 
Compliance.

    Dated: February 9, 1996.

    By:
Ronald G. Yelenik,
Trial Attorney, Division of Administrative Litigation, Office of 
Compliance.

Order

    Upon consideration of the Settlement Agreement between Respondent 
Taito America Corporation, a corporation, and the staff of the Consumer 
Product Safety Commission, and the Commission having jurisdiction over 
the subject matter and Taito America Corporation, and it appearing the 
Settlement Agreement is in the public interest, it is
    Ordered, that the Settlement Agreement be and hereby is accepted, 
as indicated below, and it is
    Further ordered, that within ten days of the service of the Final 
Order upon Respondent, Taito America Corporation shall pay to the order 
of the U.S. Treasury a civil penalty in the amount of fifty thousand 
dollars ($50,000).
    Provisionally accepted and Provisional Order issued on the 14th day 
of March, 1996.

    By Order of the Commission:
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 96-6736 Filed 3-19-96; 8:45 am]
BILLING CODE 6355-01-M