[Federal Register Volume 62, Number 80 (Friday, April 25, 1997)]
[Notices]
[Pages 20156-20158]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10692]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 97-C0005]


STK International, 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 STK International, 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 May 10, 1997.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 97-C0005, Office of the 
Secretary, Consumer Product Safety Commission, Washington, D.C. 20207.

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: April 21, 1997.
Sadye E. Dunn,
Secretary.

    In the Matter of: STK International, Inc., a corporation. CPSC 
Docket No. 97-C0005.

Settlement Agreement and Order

    1. STK International, Inc. (hereinafter, ``STK''), 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 incorporated herein. The purpose of this Agreement 
and Order is to settle the staff's allegations that STK knowingly 
introduced or caused the introduction into interstate commerce; and 
received in interstate commerce and delivered or proffered delivery 
thereof for pay or otherwise, certain banned hazardous toys and certain 
misbranded hazardous art material products, in violation of sections 4 
(a) and (c) of the Federal Hazardous Substances Act (FHSA), 15 U.S.C. 
1263 (a) and (c).

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. 2053.
    3. Since 1985, STK has been a corporation organized and existing 
under the laws of the State of California. Its principal corporate 
offices are located at 2602 East 37th Street, Vernon, CA 90058. STK is 
engaged in the import, export, and distribution of general merchandise. 
Approximately 15% of STK's sales are in toys and art materials.

II. Allegations of the Staff

A. Toys With Small Parts

    4. On eight occasions between May 5, 1994, and April 25, 1996, STK 
introduced or caused the introduction into interstate commerce; and 
received in interstate commerce and delivered or proffered delivery 
thereof for pay or otherwise, eight kinds of toys (88,010 units) 
intended for use by children under three years of age. These toys are 
identified and described as follows:

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                                                                                                   Collect                                              
              Sample No.                                        Product                             date,*              Expt./mfg.             Quantity 
                                                                                                  entry date                                            
--------------------------------------------------------------------------------------------------------------------------------------------------------
S-867-8257, S-867-8279, S-867-8280....  Butterfly Walking Toy..................................     05/05/94  Hughway......................       10,512
S-867-8388............................  Plastic Toy............................................     06/14/94  Hughway......................        9,504
S-867-8343............................  Wind Up Ducks..........................................     06/16/94  Hughway......................       14,400

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T-800-3800............................  Press & Go Cho Cho Train...............................   * 11/07/94  Unknown......................          144
96-860-5035...........................  Wind Up Helicopter.....................................     09/21/95  Hughway......................        2,888
96-800-1100...........................  Toy Truck..............................................   * 11/20/95  Unknown......................           72
96-860-5413...........................  Wind Up Tricycle.......................................     02/08/96  Hughway......................       10,800
96-860-5865...........................  My Alphabet Toy........................................     04/25/96  Gowin........................       39,690
--------------------------------------------------------------------------------------------------------------------------------------------------------

    5. The toys identified in paragraph 4 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 toys fit completely within the small parts test cylinder, 
as set forth in 16 CFR 1501.4.
    6. Because the separated parts fit completely within the test 
cylinder as described in paragraph 5 above, each of the toys identified 
in paragraph 4 above 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).
    7. Each of the toys identified in paragraph 4 above is a 
``hazardous substance'' pursuant to section 2(f)(1)(D) of the FHSA, 15 
U.S.C. 1261(f)(1)(D).
    8. Each of the toys identified in paragraph 4 above is a ``banned 
hazardous substance'' pursuant to section 2(q)(1)(A) of the FHSA, 15 
U.S.C. 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 as described in paragraph 7 above; and because it 
presents a mechanical hazard as described in paragraph 6 above.
    9. STK knowingly introduced or caused the introduction into 
interstate commerce; and received in interstate commerce and delivered 
or proffered delivery thereof for pay or otherwise, the aforesaid 
banned hazardous toys, identified in paragraph 4 above, in violation of 
sections 4 (a) and (c) of the FHSA, 15 U.S.C. 1263 (a) and (c), for 
which a civil penalty may be imposed pursuant to section 5(c)(1) of the 
FHSA, 15 U.S.C. 1264(c)(1).

B. Art Material

    10. On one occasion in 1993, STK introduced or caused the 
introduction into interstate commerce; and received in interstate 
commerce and delivered or proffered delivery thereof for pay or 
otherwise, one type of art material (8,640). This art material product 
is identified and described as follows:

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          Sample No.                        Product                Entry date       Expt./mfg.         Quantity 
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R-867-8618...................  4 Piece Paint Set................     09/02/93  Gown................        8,640
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    11. The art material product identified in paragraph 10 is subject 
to, but failed to comply with the requirements of the Labeling of Art 
Materials Act in that (a) STK did not submit this art material product 
for review by a toxicologist as required by section 23(a) of the FHSA, 
15 U.S.C. 1277(a) and 16 CFR 1500.14(b)(8)(C)(1); and (b) this art 
material product did not bear the statement of conformance with ASTM D-
4236, as required by section 23(a) of the FHSA, 15 U.S.C. 
1500.14(b)(8)(C)(7).
    12. The art material product identified in paragraph 10 above is a 
``misbranded'' hazardous substance'' pursuant to section 3(b) of the 
FHSA, 15 U.S.C. 1262(b) and 16 CFR 1500.14(b)(8)(C) (1) and (7).
    13. STK knowingly introduced or caused the introduction into 
interstate commerce; and received in interstate commerce and delivered 
or proffered delivery thereof for pay or otherwise, the aforesaid 
misbranded hazardous art material product identified in paragraph 10 
above, in violation of sections 4 (a) and (c) of the FHSA, 15 U.S.C. 
1263 (a) and (c), for which a civil penalty may be imposed pursuant to 
section 5(c)(1) of the FHSA, 15 U.S.C. 1264(c)(1).

III. Response of STK

    14. STK denies the allegations of the staff set forth in paragraphs 
4 through 13 above that it knowingly introduced or caused the 
introduction into interstate commerce; and received in interstate 
commerce and delivered or proffered delivery thereof for pay or 
otherwise, the banned hazardous toys and misbranded hazardous art 
material, identified in paragraphs 4 an 10 above, in violation of 
sections 4 (a) and (c) of the FHSA, 15 U.S.C. 1262 (a) and (c).

IV. Agreement of the Parties

    15. The Consumer Product Safety Commission has jurisdiction over 
STK and the subject matter of this Settlement Agreement and Order under 
the Consumer Product Safety Act, 15 U.S.C. 2051 et seq., and the 
Federal Hazardous Substances Act, 15 U.S.C. 1261 et seq.
    16. Upon final acceptance by the Commission of this Settlement 
Agreement and Order, the Commission shall issue the attached Order 
incorporated herein by reference.
    17. The Commission does not make any determination that STK 
violated the FHSA. The Commission and STK agree that this Agreement is 
entered into for the purposes of settlement only.
    18. Upon final acceptance of this Settlement Agreement by the 
Commission and issuance of the Final Order, STK 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 STK failed to comply 
with the FHSA 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.
    19. For purposes of section 6(b) of the FHSA, 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 
Order.
    20. 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 CFR 
1118.20(e)-(h). If the Commission does not receive any written request 
not to accept the Settlement Agreement and

[[Page 20158]]

Order within 15 days, the Settlement Agreement and Order will be deemed 
to be finally accepted on the 16th day after the date it is published 
in the Federal Register.
    21. The parties further agree that the Commission shall issue the 
attached Order which is incorporation herein by reference; and that a 
violation of the Order shall subject STK to appropriate legal action.
    22. Agreements, understandings, representations, or interpretations 
made outside this Settlement Agreement and Order may not be used to 
vary or contradict its terms.
    23. The provisions of the Settlement Agreement and Order shall 
apply to STK and each of its successors and assigns.

    Dated: March 13, 1997.

Respondent STK International, Inc.

Stuart Todd Kole,
President, STK International, Inc., 2602 East 37th Street, Vernon, CA 
90058.

Commission Staff

Eric L. Stone,
Director, Division of Administrative Litigation, Office of Compliance.

David Schmeltzer,
Assistant Executive Director, Office of Compliance, Consumer Product 
Safety Commission, Washington, D.C. 20207-0001.

    Dated: March 19, 1997.
Dennis C. Kacoyanis,
Trial Attorney, Division of Administrative Litigation, Office of 
Compliance.

Order

    Upon consideration of the Settlement Agreement between Respondent 
STK International, Inc., a corporation, and the staff of the Consumer 
Product Safety Commission; and the Commission having jurisdiction over 
the subject matter and STK International, 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, STK International, Inc. shall pay to the 
Commission a civil penalty in the amount of EIGHTY THOUSAND AND 00/100 
DOLLARS ($80,000.00) in two payments consisting of FORTY THOUSAND AND 
00/100 DOLLARS ($40,000.00) each. The first payment of FORTY THOUSAND 
AND 00/100 DOLLARS ($40,000.00) shall be due within twenty (20) days 
after service upon Respondent of the Final Order of the Commission 
accepting the Settlement Agreement and Order (hereinafter, the 
anniversary date). The second payment of FORTY THOUSAND AND 00/100 
DOLLARS ($40,000.00) shall be paid within one year after service of the 
Final Order upon Respondent. Payment of the full amount of the civil 
penalty shall settle fully the staff's allegations set forth in 
paragraphs 4 through 13 of the Settlement Agreement and Order that STK 
International, Inc. violated the FHSA. Upon failure of STK 
International, Inc. to make payment or upon the making of a late 
payment by STK International, Inc. (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 under the 
provisions of 28 U.S.C. Secs. 1961 (a) and (b).

    Provisionally accepted and Provisional Order issued on the 21st 
day of April, 1997.

    By Order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.
[FR Doc. 97-10692 Filed 4-24-97; 8:45 am]
BILLING CODE 6355-01-M