[Federal Register Volume 61, Number 116 (Friday, June 14, 1996)]
[Notices]
[Pages 30224-30226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15206]



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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 96-C0008]


In the matter of Premier Promotions and Marketing, Inc., 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.

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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 Premier Promotions and Marketing, 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 July 1, 1996.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 96-C0008, Office of the 
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.


[[Page 30225]]


FOR FURTHER INFORMATION CONTACT:
Dennis C. Kacoyanis, 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: June 10, 1996.
Sadye E. Dunn,
Secretary.

    In the Matter of Premier Promotions and Marketing, Inc., a 
corporation. CPSC Docket No. 96-C0008.

Settlement Agreement and Order

    1. Premier Promotions and Marketing, Inc. (hereinafter, 
``Premier''), a corporation, enters into this Settlement Agreement 
(hereinafter, ``Agreement'') with the staff of the Consumer Product 
Safety Commission, and agrees to the entry of the Order described 
herein. The purpose of the Agreement and Order is to settle the staffs 
civil penalty allegations that Premier knowingly introduced or caused 
the introduction in interstate commerce; received in interstate 
commerce and delivered or proffered delivery thereof for pay or 
otherwise; and failed to comply or caused the failure to comply with 
the Commission's Procedures For Export of Noncomplying Products, 
section 14(d) of the Federal Hazardous Substances Act (FHSA), 15 U.S.C. 
Sec. 1273(d) and 16 CFR Part 1019, the ``Ghost Blaster,'' a banned 
hazardous toy, in violation of sections 4 (a), (c), and (i) of the 
FHSA, 15 U.S.C. Secs. 1263 (a), (c), and (i).

I. The Parties

    2. 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 Consumer Product Safety Act 
(CPSA), 15 U.S.C. Sec. 2053.
    3. Premier is a corporation organized and existing under the laws 
of the State of California, since 1984, with its principal corporate 
offices located at 14553 Delano Street, Suite 207, Van Nuys, CA 91411. 
Premier is a marketing and promotions firm. Approximately 75% of 
Premier's business involves the import and distribution of toys.

II. Allegations of the Staff

    4. The Ghost Blaster toy (hereinafter, ``Ghost Blaster'' or ``Ghost 
Blaster toys'') is a small plastic box which is capable of making two 
unique electronic sounds when the user presses one of two buttons. The 
Ghost Blaster is available in white, black, red, and gray. Each unit 
makes its own unique sound. The Ghost Blaster has an insignia 
(``logo'') which represents the logo used in the motion picture ``Ghost 
Busters.'' The insignia is of a ghost inside a red circle with a red 
line through it.
    5. The Ghost Blaster identified in paragraph 4 above is intended 
for use by children under three years of age.
    6. The Ghost Blaster, is 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, one or more parts of the toy separated from the 
toy and the separated parts fit completely within the small parts 
cylinder when tested using the procedures set forth in 16 CFR 1501.4.
    7. Because the separated parts fit completely within the test 
cylinder as described in paragraph 6 above, the Ghost Blaster presents 
a ``mechanical hazard'' within the meaning of section 2(s) of the FHSA, 
15 U.S.C. Sec. 1261(s) (choking, aspiration, and/or ingestion of small 
parts).
    8. The Ghost Blaster is a ``hazardous substance'' pursuant to 
section 2(f)(1)(D) of the FHSA, 15 U.S.C. Sec. 1261(f)(1)(D).
    9. The Ghost Blaster is a ``banned hazardous substance'' pursuant 
to section 2(q)(1)(A) of the FHSA, 15 U.S.C. Sec. 1261(q)(1)(A) and 16 
CFR 1500.18(a)(9) because it is intended for use by children under 
three years of age and bears or contains a hazardous substance because 
it presents a mechanical hazard as described in paragraph 7 above.
    10. Between April 9, 1989 and June 26, 1989, Premier imported 
approximately 5.7 million Ghost Blaster toys for distribution by the 
Hardees restaurant chain.
    11. On or about July 7, 1989, Hardees notified the Commission staff 
that Hardees had received reports of children ingesting one of two 1.5 
button cell batteries that powered the Ghost Blaster toys and recalled 
the products. Hardees was able to recapture approximately 2.5 million 
Ghost Blaster toys.
    12. On or about November, 1989, Premier repurchased the Ghost 
Blaster toys from Hardees.
    13. From July, 1989, through March, 1993, Hardees stored the Ghost 
Blaster toys while Premier attempted to find an overseas buyer.
    14. On or about February 5, 1993, counsel for Hardees advised the 
Commission staff that Hardees had reached an agreement with Premier 
regarding the disposition of the Ghost Blaster toys.
    15. By letter dated February 17, 1993, the Commission staff advised 
Hardees and Premier of the Commission's Procedures for the Export of 
Noncomplying Products, supra.
    16. By letter dated March 15, 1993, Premier advised the Commission 
staff it intended to move the Ghost Blaster toys from Hardees' 
warehouses to Brooklyn Closeout Corporation, (hereinafter, ``Brooklyn 
Closeout''), 167 Clymer Street, Brooklyn, NY 11211 for subsequent 
export pursuant to the Commission's Procedures for the Export of 
Noncomplying Products. Premier moved the Ghost Blaster toys between the 
last week of March, 1993 and April 2, 1993.
    17. By letter dated March 19, 1993, the Commission staff provided 
Premier a copy of the Commission's Procedures for the Export of 
Noncomplying Products, supra. and by letter dated March 23, 1993, 
Premier wrote the Commission staff that it was aware of the 
Commission's Procedures for the Export of Noncomplying Products, id.; 
that it intended to export all the Ghost Blaster toys and would notify 
the Commission staff pursuant to the Commission's export regulations.
    18. On or about March 17, 1993, Premier sold approximately 2.5 
million Ghost Blaster toys to SKR Resources, Inc. (hereinafter, 
``SKR''), 307 Fifth Avenue, New York, NY 10016. The contract provided 
no restrictions on the resale of the Ghost Blaster toys by SKR ``with 
the exception that the units shall only be offered for resale by SKR 
for export in accordance with the requirements of the Consumer Product 
Safety Commission (CPSC).'' Premier did not advise the staff of this 
transaction, or seek guidance about the legality of this sale of the 
Ghost Blaster toys.
    19. As a result of Premier's sales of the Ghost Blaster toys to 
SKR, the Ghost Blaster toys were distributed in domestic commerce; and/
or were exported without notifying the Commission pursuant to section 
14(d) of the FHSA, supra, and the Commission's Procedures for the 
Export of Noncomplying Products, supra, in violation of sections 4 (a), 
(c), and (i) of the FHSA, 15 U.S.C. Secs. 1263 (a), (c), and (i).
    20. Premier knowingly introduced or caused the introduction in 
interstate commerce or delivery for introduction in interstate 
commerce; received in interstate commerce and delivered or proffered 
delivery thereof for pay or otherwise; and failed to comply or caused 
the failure to comply with the Commission's Procedures For Export of 
Noncomplying Products, supra, the

[[Page 30226]]

Ghost Blaster toy identified in paragraph 4 above, a banned hazardous 
toy, in violation of sections 4 (a), (c), and (i) of the FHSA, 15 
U.S.C. Secs. 1263 (a), (c), and (i).

III. Response of Premier

    21. Premier denies the staff's allegations as set forth in 
paragraphs 4 through 20 above.
    22. Premier denies it knowingly introduced or caused the 
introduction in interstate commerce or delivery for introduction in 
interstate commerce; received in interstate commerce and delivery or 
proffered delivery thereof for pay or otherwise; and failed to comply 
or caused the failure to comply with the Commission's Export of 
Noncomplying Products, the Ghost Blaster, a banned hazardous toy, 
identified in paragraph 4 above, in violation of sections 4 (a), (c), 
and (i) of the FHSA, 15 U.S.C. Secs. 1263 (a), (c), and (i).
    23. Upon notification by the Commission staff that the Ghost 
Blaster toys had been distributed in domestic commerce, Premier 
cooperated with the Commission staff in removing the products from the 
marketplace.

IV. Agreement of the Parties

    24. The Consumer Product Safety Commission has jurisdiction over 
Premier and the subject matter of this Settlement Agreement and Order 
under the following acts: Consumer Product Safety Act, 15 U.S.C. 
Sec. 2051 et seq., and the Federal Hazardous Substances Act, 15 U.S.C. 
Sec. 1261 et seq.
    25. Upon final acceptance by the Commission of this Settlement 
Agreement and Order, the Commission shall issue the attached Order 
incorporated herein by this reference.
    26. The Commission does not make any determination that Premier 
knowingly violated the FHSA and/or the CPSA. This Agreement is entered 
into for the purposes of settlement only.
    27. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, Premier 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 Premier failed to comply with the FHSA and/or the CPSA as 
aforesaid, (4) to a statement of findings of fact and conclusions of 
law, and (5) to any claims under the Equal Access to Justice Act.
    28. Upon final acceptance of this Settlement Agreement by the 
Commission and the issuance of the Final Order, the Commission and 
Premier knowingly, voluntarily, and completely mutually release such 
other, their agents, successors, officers, directors, shareholders, and 
assigns, from any and all disputes, claims, potential claims, 
controversies, or other differences of any nature whatsoever arising 
from or relating to the allegations that are contained in this 
Agreement.
    29. For purposes of section 6(b) of the CPSA, 15 U.S.C. 
Sec. 2055(b), this matter shall be treated as if a compliant had 
issued; and the Commission may publicize the terms of this Settlement 
Agreement and Order.
    30. Upon provisional acceptance of this Settlement Agreement and 
Order by the Commission, this Settlement Agreement and 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 C.F.R. 
Secs. 1118.20(e)-(h). If the Commission does not receive any written 
request not to accept the Settlement Agreement and Order within 15 
days, the Settlement Agreement and Order will be deemed finally 
accepted on the 16th day after the date it is published in the Federal 
Register.
    31. The parties further agree that the Commission shall issue the 
attached Order; and that a violation of the Order shall subject Premier 
to appropriate legal action.
    32. Agreements, understandings, representations, or interpretations 
made outside of this Settlement Agreement and Order may not be used to 
vary or to contradict its terms.
    33. The provisions of the Settlement Agreement and Order shall 
apply to the Commission and to Premier and each of its successors and 
assigns.
    Dated April 2, 1996.
Respondent Premier Promotions and Marketing, Inc.
Irving Rubenstein,
President, Premier Promotions and Marketing, Inc. 14553 Delano Street, 
Suite 207, Van Nuys, CA 91411.
Commission Staff
David Schmeltzer,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Acting Director, Division of Administrative Litigation, Office of 
Compliance.
    Dated April 11, 1996.
Dennis C. Kacoyanis,
Trial Attorney, Division of Administrative Litigation, Office of 
Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Respondent Premier Promotions and Marketing, Inc., a corporation, and 
the staff of the Consumer Product Safety Commission; and the Commission 
having jurisdiction over the subject matter and Premier Promotions and 
Marketing, Inc.; and it appearing that the Settlement Agreement and 
Order is in the public interest, it is
    Ordered, that the Settlement Agreement be and hereby is accepted; 
and it is
    Further ordered, that upon final acceptance of the settlement 
Agreement and Order, Premier Promotions and Marketing, Inc. shall pay 
the Commission a civil penalty in the amount of seventy-five thousand 
and \00/100\ dollars ($75,000.00) in three (3) payments. The first 
payment of twenty-five thousand and \00/100\ dollars ($25,000.00) shall 
be due within twenty (20) days after service upon Respondent of the 
Final Order of the Commission accepting the Settlement Agreement. The 
second payment of twenty-five thousand and \00/100\ dollars 
($25,000.00) shall be made within one year after service of the Final 
Order upon Respondent. The third payment of twenty-five thousand and 
\00/100\ dollars ($25,000.00) shall be made within two years after 
service of the Final Order. Payment of the full amount of the civil 
penalty shall settle fully the staff's allegations set forth in 
paragraphs 4 through 21 of the Settlement Agreement that Premier 
Promotions and Marketing, Inc. knowingly violated the FHSA. Upon the 
failure by Premier Promotions and Marketing, Inc. to make a payment or 
upon the making of a late payment by Premier Promotions and Marketing, 
Inc. the entire amount of the civil penalty shall be due and payable, 
and 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. 
Secs. 1961 (a) and (b).

    Provisionally accepted and Provisional Order issued on the 10th 
day of June, 1996.

    By order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 96-15206 Filed 6-13-96; 8:45 am]
BILLING CODE 6355-01-M