[Federal Register Volume 63, Number 218 (Thursday, November 12, 1998)]
[Notices]
[Pages 63298-63303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30163]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 99-C0003]


Small World Toys, Inc., a Domestic Corporation; Provisional 
Acceptance of a Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: It is the policy of the Commission to publish settlements 
which it provisionally accepts under the Federal Hazardous Substance 
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 Small World Toys, Inc., a domestic corporation, 
containing a civil penalty of $225,000.

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 27, 1998.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to Comment 99-C0003, 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, 1346.

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

    Dated: November 4, 1998.
Sadye E. Dunn,
Secretary.

Settlement Agreement and Order

    1. Small World Toys, Inc. (hereinafter, ``Small World''), 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 staff's allegations 
that Small World violated the Consent Decree of Permanent Injunction 
and the Federal Hazardous Substances Act (FHSA).

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. Small World is a corporation organized and existing under the 
laws of the State of California. Small World's address is 5711 
Buckingham Parkway, Culver City, CA 90231. Small World is an importer 
and wholesaler of children's toys.

II. Allegations of the Staff

A. Violation of the Consent Decree

    4. On July 31, 1986, the United States Department of Justice on 
behalf of the Commission and Small World entered into a Consent Decree 
of Permanent Injunction, hereinafter, ``Consent Decree'' (Consent 
Decree, Attachment A) to resolve allegations that Small World 
introduced or caused the introduction in interstate commerce; and 
received in interstate commerce and delivered or proffered delivery 
thereof for pay or otherwise, toys and other articles intended for use 
by children under three years of age that failed to comply with the 
Commission's Small Parts Regulation at 16 CFR Part 1501, in violation 
of sections 4 (a) and (c) of the FHSA, 15 U.S.C. 1263 (a) and (c).
    5. The Consent Decree requires Small World to test six (6) units of 
a toy or other article intended for children under three years old for 
small parts pursuant to the use and abuse procedures set forth in 16 
CFR 1501.4 and 1500.51 and .52 twice per calendar year unless Small 
World receives only one shipment of the particular toy during the 
calendar year. If any unit of a toy fails use and abuse procedures, 
Small World is prohibited from distributing the toy in interstate 
commerce and must notify the Commission in writing within three (3) 
days of the failure.
    6. Small World has not complied with the testing and reporting 
requirements of the Consent Decree.
    7. Small World's failure to comply with the testing and reporting 
requirements of the Consent Decree constitutes a violation of the 
Consent Decree.

[[Page 63299]]

B. Toys With Small Parts

    8. On four occasions between October 12, 1994, and December 1, 
1995, Small World 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 
(23,604 retail units) intended for use by children under three years 
old. These toys are identified and described as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Collect. date *
               Sample No.                              Product                  entry date                       Expt/Mfg.                     Quantity
--------------------------------------------------------------------------------------------------------------------------------------------------------
T-867-8045..............................  Necklace........................           10/12/94  Fishel.......................................       3,456
T-867-8046..............................  Necklace........................           10/12/94  Fishel.......................................       2,304
T-867-8178..............................  Bracelet........................         * 01/27/95  Fishel.......................................       4,320
T-867-8179..............................  Bracelet........................         * 01/27/95  Fishel.......................................       4,320
T-867-8180..............................  Locomotive......................         * 01/27/95  Supertoys....................................         576
T-867-8181..............................  Car.............................         * 01/27/95  Golden Bell..................................       2,448
T-867-8338..............................  Gazoobo.........................         * 09/12/95  Caben........................................       6,168
96-860-5154.............................  Simba Doll......................         * 12/01/95  Unknown......................................          12
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    9. The toys identified in paragraph 8 above are intended for 
children under three years old and are subject to the Commission's 
Small Parts Regulation, 16 CFR Part 1501.
    10. The toys identified in paragraph 8 above 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 .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.
    11. Because the separated parts fit completely within the test 
cylinder as described in paragraph 10 above, each of the toys 
identified in paragraph 8 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).
    12. Each of the toys identified in paragraph 8 above is a 
``hazardous substance'' pursuant to section 2(f)(1)(D) of the FHSA, 15 
U.S.C. 1261(f)(1)(D).
    13. Each of the toys identified in paragraph 8 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 12 above; and because it 
presents a mechanical hazard as described in paragraph 11 above.
    14. Small World 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 8 above, in 
violation of sections 4(a) and (c) of the FHSA, 15 U.S.C. 1263 (a) and 
(c).

C. Rattles With Small Parts

    15. On one occasion in 1994, Small World introduced or caused the 
introduction into interstate commerce; and received in interstate 
commerce and delivered or proffered delivery thereof for pay or 
otherwise, one kind of rattle (3,456 units) intended for use by 
children. This rattle is identified and described as follows:

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               Sample No.                              Product                  Entry Date                       Expt/Mfg.                     Quantity
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S-867-8429..............................  Handy Dandy Rattle..............           10/12/94  Ambi.........................................       3,456
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    16. The rattle identified in paragraph 15 above is subject to, but 
failed to comply with the Commission's Rattle Regulations, 16 CFR Part 
1510, in that when tested under the procedures set forth in 16 CFR 
1510.4, the rattle penetrated the full depth of the test fixture.
    17. Because the rattle identified in paragraph 15 above penetrated 
the full depth of the cavity of the test fixture as specified in 16 CFR 
1510.4, it presents a ``mechanical hazard'' within the meaning of 
section 2(s) of the FHSA, 15 U.S.C. 1261(s) (choking) and is, 
therefore, a ``hazardous substance'' pursuant to section 2(f)(1)(D) of 
the FHSA, 15 U.S.C. 1261(f)(1)(D).
    18. The rattle identified in paragraph 15 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)(15) because it is intended 
for use by children and bears or contains a hazardous substance; and 
because it presents a mechanical hazard as defined in paragraph 17 
above.
    19. Small World 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 rattle identified in paragraph 15 above, in 
violation of sections 4(a) and (c) of the FHSA, 15 U.S.C. 1263(a) and 
(c).

D. Art Material

    20. On three occasions between August 31, 1993, and September 13, 
1993, Small World introduced or caused the introduction into interstate 
commerce; and received in interstate commerce and delivered or 
proffered delivery thereof for pay or otherwise, eight (8) different 
types of art material products (8,592 units). These art material 
products are identified and described as follows:

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               Sample No.                              Product                  Entry Date                       Expt/Mfg.                     Quantity
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R-867-8507..............................  Dino Puzzle.....................           08/31/93  Aims.........................................       1,152
R-867-8508..............................  Water Color Paint Set...........           09/01/93  Weghorn......................................         120
R-867-8509..............................  Water Color Paint Set...........           09/01/93  Weghorn......................................         576

[[Page 63300]]

R-867-8515..............................  Water Color Paint Set...........           09/01/93  Weghorn......................................         480
R-867-8516..............................  Water Color Paint Set...........           09/01/93  Weghorn......................................       2,592
R-867-8517..............................  Color Paint Set.................           09/01/93  Weghorn......................................         312
R-867-8518..............................  Water Color Paint Set...........           09/01/93  Weghorn......................................         480
R-867-8579..............................  Mini Crayons....................           09/13/93  Aims.........................................       2,880
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    21. The art material products identified in paragraph 20 above are 
subject to, but failed to comply with the requirements for the Labeling 
of Art Materials Act in that (a) Small World did not submit these art 
material products 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) these art material products 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).
    22. The art material products identified in paragraph 20 above are 
``misbranded hazardous substances'' 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).
    23. Small World 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 materials identified in paragraph 20 
above, in violation of sections 4(a) and (c) of the FHSA, 15 U.S.C. 
1263(a) and (c).

E. Failure to Follow Export Notification Requirements

    24. On ten occasions between April 8, 1997, and November 24, 1997, 
Small World exported 10 different kinds of toys (9,291 units) intended 
for use by children under three years old that failed to comply with 
the Commission's Small Parts Regulations 16 CFR Part 1501 without 
submitting a ``notification of intent to export'' to the Commission 
pursuant to section 14(d) of the FHSA, 15 U.S.C. 1273(d) and the 
Commission's Procedures For Export of Noncomplying Products, 16 CFR 
Part 1019. These toys are described and identified as follows:

------------------------------------------------------------------------
            Product                       Expt./Mfg.           Quantity
------------------------------------------------------------------------
Pull-Along Dog.................  Ambi.......................       2,847
Sand Boat......................  Ambi.......................         882
Animal Trains..................  Caben......................         714
Ambulance......................  Golden Bell................         888
Bear Trumpet...................  Hong Kong Toy Ctr..........         624
Cement Mixer...................  Kodomo.....................         600
Water Wheel....................  Kodomo.....................       1,188
Shape Sorter...................  Megcos.....................         720
Crane Truck....................  Golden Bell................         600
Bank...........................  Caben......................         228
------------------------------------------------------------------------

    25. Small World knowingly failed to file the required notification 
informing the Commission of its intent to export the toys identified in 
paragraph 24 above, in violation of section 4(i) of the FHSA, 15 U.S.C. 
1263(j).

III. Response of Small World

    26. Small World denies the allegations of the staff set forth in 
paragraphs 4 through 25 above. Small World denies the allegations that 
it violated the testing and reporting provisions of the Consent Decree 
and that it knowingly introduced or caused the introduction in 
interstate commerce and delivered or proffered delivery thereof for pay 
or otherwise any banned hazardous toys and rattles and any misbranded 
hazardous art material products.
    27. Small World contends the necklaces, bracelets, locomotive and 
car listed in paragraph 8 are not intended or promoted for use by 
children under three years old and therefore are not subject to the 
CPSC Small Parts Regulation. The Gazoobo toy is intended and promoted 
for ages above 18 months through 5 years and it meets CPSC's Small 
Parts requirement for that age group. The Simba Doll sold by Small 
World met the CPSC Small Parts Regulation.
    28. Small World did not knowingly introduce or cause the 
introduction into interstate commerce or receive or deliver or proffer 
delivery of any banned hazardous rattles as alleged in paragraph 15.
    29. Small World never received in interstate commerce the art 
materials listed in paragraph 20 and never introduced them into 
interstate commerce. They were stopped before entry into the United 
States and before Small World had any opportunity to inspect them to 
determine if they were properly labeled under the Labeling of Art 
Materials Act. Two products, Dino Puzzle and Mini Crayons, were 
returned to the manufacturer before they entered the United States. The 
Color Paint Sets were properly labeled after SWT was informed that they 
had arrived at the port without labels.

IV. Agreement of the Parties

    30. The Consumer Product Safety Commission has jurisdiction over 
Small World 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.
    31. Upon final acceptance by the Commission of this Settlement 
Agreement and Order, Small World knowingly, voluntarily, and completely 
waives any rights it may have in this matter (a) to an administrative 
or judicial hearing, (b) to judicial review or other challenge or 
contest of the validity of the Commission's actions, (c) to a 
determination by the Commission whether Small World failed to comply 
with the testing and reporting requirements of the Consent Decree and 
the FHSA, (d) to a statement of findings of facts and conclusions of 
law, and (e) to any claims under the Equal Access to Justice Act.
    32. In settlement of the staff's allegations, Small World agrees to 
pay a civil penalty of $225,000.00 as set forth in the incorporated 
Order.
    33. In settlement of the staff's allegations, Small World agrees to 
comply with the testing and reporting requirements of the Consent 
Decree.
    34. 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 
Order.
    35. Upon provisional acceptance of this Settlement Agreement by the 
Commission, the Commission will place the Settlement Agreement and the 
Provisional Order on the public record, and publish it 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 requests 
not to accept the Settlement Agreement within 15 days, the Settlement 
Agreement shall be deemed finally accepted and the Final Order issued 
on the 16th day.

[[Page 63301]]

    36. This Settlement Agreement may be used in interpreting the 
Order. Agreements, understandings, representations, or interpretations 
apart from those contained in this Settlement Agreement and Order may 
not be used to vary or contradict its terms.
    37. The provisions of this Settlement Agreement and Order shall 
apply to Small World and each of its successors and assigns.
    38. Small World shall notify the CPSC in writing at least thirty 
(30) calendar days prior to any reorganization, dissolution, 
assignment, or sale resulting in the emergence of a successor 
corporation, the creation or dissolution of any subsidiaries, or any 
other changes in the corporate structure of Small World that may affect 
compliance obligations arising out of this Settlement Agreement and 
Order. Such notice shall be sent by certified mail, return receipt 
requested to: Assistant Executive Director for Compliance, Consumer 
Product Safety Commission, Washington, D.C. 20207-0001.
    39. Upon final acceptance of this Agreement, the Commission shall 
issue the attached Final Order.
Respondent Small World Toys, Inc.
    Dated: October 6, 1998.
Edward M. Goldwasser,
President, Small World Toys, Inc., 5711 Buckingham Parkway, Culver 
City, CA 90231.

    Dated: October 7, 1998.
Michael A. Brown,
Esquire,
Margaret A. Freeston,
Esquire, Brown & Freeston, P.C., 3201 New Mexico Avenue, N.W., Suite 
242, Washington, D.C. 20016-2756.
Commission Staff
Alan H. Schoem,
Assistant Executive Director, Office of Compliance, Consumer Product 
Safety Commission, Washington, D.C. 20207-0001.
Eric L. Stone,
Director, Legal Division, Office of Compliance.

    Dated: October 8, 1998.
Dennis C. Kacoyanis,
Trial Attorney, Legal Division, Office of Compliance.

Order

    Upon consideration of the Settlement Agreement entered into between 
Respondent Small World Toys, Inc., a corporation, and the staff of the 
Consumer Product Safety Commission; and the Commission having 
jurisdiction over the subject matter and Small World Toys, 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, Small World Toys, Inc. shall pay to the Commission 
a civil penalty in the amount of TWO HUNDRED TWENTY-FIVE THOUSAND AND 
00/100 DOLLARS ($225,000.00) in three (3) payments. The first payment 
of SEVENTY-FIVE THOUSAND AND 00/100 DOLLARS ($75,000.00) shall be due 
within twenty (20) days after service upon Respondent of the Final 
Order of the Commission accepting the attached Settlement Agreement or 
December 20, 1998 whichever is later. The second payment of SEVENTY-
FIVE THOUSAND AND 00/100 DOLLARS ($75,000.00) shall be due on December 
20, 1999. The third payment of SEVENTY-FIVE THOUSAND AND 00/100 DOLLARS 
($75,000.00) shall be due on December 20, 2000. Upon the failure by 
Small World Toys, Inc. to make a payment or upon the making of a late 
payment by Small World Toys, 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 of interest 
under the provisions of 28 U.S.C. 1961 (a) and (c).
    Provisionally accepted and Provisional Order issued on the 4th date 
of November, 1998.

    By Order of the Commission.
Sadye E. Dunn,
Secretary, Consumer Product Safety Commission.

Consent Decree of Permanent Injunction

    The United States of America, on behalf of the Consumer Product 
Safety Commission, having filed on the 29th day of July, 1986, a 
complaint seeking to enjoin permanently the defendant from directly or 
indirectly doing or causing to be done any act in violation of sections 
4(a) and (c) of the Federal Hazardous Substances Act (FHSA) 15 U.S.C. 
1263(a) and (c) by introducing, delivering for introduction or 
receiving in interstate commerce any toy or other article intended for 
use by children under 3 years of age which is a banned hazardous 
substance pursuant to 15 U.S.C. 1261(q)(1)(A), and the regulations 
issued thereunder, 16 CFR 1500.18(a)(9) and 16 CFR Part 1501, 16 CFR 
Part 1510, 16 CFR 1500.48 and .49; and from directly or indirectly 
doing or causing to be done any act or violation of section 19(a)(2) of 
the Consumer Product Safety Act (CPSA), 15 U.S.C. 2068(a)(2), by 
manufacturing for sale, offering for sale; distributing in commerce or 
importing into the United States any toy or other article intended for 
use by children that are banned under 16 CFR Part 1303, regarding 
articles bearing lead containing paint. The defendant, Small World 
Toys, a corporation, having consented to the entry of this decree and 
to each and every provision hereof, without contest and before any 
testimony has been taken, and the United States having moved this Court 
for this permanent injunction:
    Now, therefore, it is ordered, adjudged and decreed that:
    1. This Court has jurisdiction over the subject matter of this 
action pursuant to 28 U.S.C. Secs. 1331, 1337 and 1345 and 15 U.S.C. 
1267(a) and has personal jurisdiction over the defendant.
    2. Small World Toys, (``Small World''), a corporation organized and 
existing under the laws of the State of California, with its principal 
place of business located at 5711 Buckingham Parkway, Culver City, 
California 90230, is in the business of importing and distributing toys 
that are subject to the requirements of the FHSA and the regulations 
issued thereunder.
    3. Defendant has introduced, delivered for introduction or received 
in interstate commerce, children's toys called Ambi ``Funhouse,'' Model 
No. E71; Ambi ``Jack in the Ball,'' Model No. E153; Ambi ``Mini-
Racer,'' Model No. E666; Royal Company Ltd., ``Water Wheel,'' Model No. 
1928; Jimson, ``Super Air Bus,'' Model No. 349; Jimson ``Elephant 
Boat,'' Model No. 376; Jimson, ``See Thru Locomotive,'' Model No. 270T; 
Discovery World/Small World Toys ``Lift & Learn Puzzles,'' Model Nos. 
2501, 2502, 2503, 2504, 2505 and 2506; Discovery World/Small World Toys 
``Scratch & Sniff Puzzles,'' Model Nos. 2507, 2508, 2509, 2510, and 
2512; Hermann Eichhorn Gmb. Hu. Co., K6, ``Wooden Train,'' Model No. 
2037 and Hans Clemens Co., ``Stuffed Bears,'' Model No. 51250.
    4. The Commission believes the toys referred to in paragraph 3 are 
toys intended for use by children under three and are subject to the 
requirements of the FHSA and its regulations.
    5. The Commission believes the children's toys referred to in 
paragraph 3 above are banned hazardous substances pursuant to section 
2(q)(1)(A) of the FHSA, 15 U.S.C. 1261(q)(1)(A), and the regulations 
issued thereunder, 16 CFR 1500.18(a)(9) and 1501 because they exhibit 
small parts which present choking, aspiration or ingestion hazards when 
subject to the

[[Page 63302]]

test requirements of 16 CFR 1500.51 and 1500.52 and 1501.4.
    6. The defendant voluntarily agreed to the Commission's request to 
stop distributing the Ambi ``Funhouse,'' Royal Company ``Water Wheel,'' 
Jimson ``Super Air Bus,'' Jimson ``Elephant Boat,'' Herman Eichorn Gm. 
Hu. Co. ``Wooden Train'', Hans Clemens Co. ``Stuffed Bear,'' and Jimson 
``See Thru Locomotive'' until such time as they have been changed and 
complied with the requirements of the FHSA. The defendant also agreed 
to recall the Ambi ``Jack in the Ball,'' and agreed to a limited recall 
from the retail level of the Discovery World/Small World Toys ``Lift & 
Learn Puzzles'' and ``Scratch & Sniff Puzzles,'' and a limited recall 
of the hat of the Ambi ``Mini-Racer,'' including an incentive program 
to encourage consumers to return the hat, and agreed not to sell such 
products until such time as the products were or have been 
appropriately modified.
    7. The defendant, and each and all of its directors, officers, 
agents, servants, representatives, employees, successors or assigns, 
and any and all persons in active concert or participation with it, are 
hereby enjoined from directly or indirectly doing or causing the 
introduction, delivery for introduction or receipt in interstate 
commerce, of:
    (a) Any toy or other article intended for use by children under 
three years of age that presents a choking, aspiration or ingestion 
hazard because of small parts as defined in 16 CFR Part 1501 or which 
when tested in accordance with 16 CFR 1501.4 and 1500.51 and .52, 
presents a choking, aspiration or ingestion hazard because of small 
parts as defined in 16 CFR Part 1501.
    (b) Any toy or article intended for use by children that does not 
comply with the requirements of 16 CFR 1500.48 and .49, regarding sharp 
points and edges.
    (c) Any rattle which does not comply with the requirements of 16 
CFR Part 1510.
    (d) Any toy or other article intended for use by children that does 
not comply with the requirements of 16 CFR Part 1303, regarding 
articles bearing lead containing paint.
    8. Although the FHSA does not require manufacturers, distributors 
or importers to test any products, the defendant agrees to conduct, or 
have conducted on its behalf, the tests described in 16 CFR 1501.4 and 
1500.51 and .52 to detect any banned hazardous toys or other articles 
intended for use by children under three years of age. The testing 
shall be as follows:
    (a) Samples of each model of toy or other article intended for use 
by children shall be tested at least twice each calendar year. However, 
if only one shipment of a model is received during the calendar year, 
samples of the model shall be tested only one time during the calendar 
year. The samples shall be tested before items from the shipment(s) 
involved are introduced or delivered for introduction into interstate 
commerce by defendant or its agents.
    (b) A sample shall consist of at least six items of a model, but 
the Commission encourages defendant to use 12 or more items. The number 
of items used shall be divided evenly between each of the tests 
required under this paragraph, except that the torque and tension 
tests, 16 CFR 1500.51 (e) and (f) and .52 (e) and (f), shall be 
conducted on the same items.
    (c) The items in each sample shall be selected at random from as 
many cartons as possible and from more than one shipment if possible.
    (d) Each item in the sample shall be tested in accordance with 16 
CFR 1501.4, 1500.51 and .52. If any items from the sample fail the 
testing requirements, the shipment(s) from which these items were 
selected shall not be released into interstate commerce until such time 
as the products have been appropriately modified or a remedial plan 
under subsection (e) is implemented. The defendant shall notify the 
Commission within three (3) working days of defendant's actual or 
constructive receipt of such test results and shall provide CPSC with a 
copy of any written failing test reports. Such notification shall be 
sent by certified mail, return receipt requested, to the following 
address: Consumer Product Safety Commission, Western Regional Office, 
555 Battery Street, Room 401, San Francisco, California 94111.
    (a) Upon receipt of such notification, the Commission will then 
discuss with defendant what remedial action may be necessary.
    9. The Commission agrees that defendant has 30 days from the 
effective date of this consent decree to complete the initial testing 
required by paragraph eight (8) of all toys intended for children under 
three subject to the decree which are in their possession or control on 
the effective date of the decree. For those toys or articles 
distributed by defendant which are age labeled for children over three 
years or which are not age labeled, but which defendant believes may be 
subject to this consent decree because they are toys or other articles 
intended for use by children under three years of age, defendant shall 
seek guidance from the Commission within 10 days of entry of this 
consent decree on whether the Commission believes these toys or other 
articles are subject to this consent decree. Defendant has 30 days from 
the receipt of such guidance in which to complete the initial testing 
required by paragraph eight (8) of this consent decree.
    10. For the purpose of complying with the terms of this consent 
decree, the tests required by 16 CFR 1500.51(b)(2) and .52(b)(2) may be 
conducted using resilient non-textile floor Type IV tiles that conform 
to federal specification SS-T-312B.
    11. Defendant agrees to maintain records of the tests conducted 
pursuant to paragraph eight (8) for a period of 3 years. Such records 
shall include, but not be limited to, the date of the test, the 
procedure used, the citation of the Code of Federal Regulations of each 
test used, the number of samples tested, and the results.
    12. CPSC, its agents and duly authorized representatives shall be 
permitted to enter any of defendant's facilities at reasonable times to 
inspect defendant's business premises and defendant's business records 
relating to the matters that are the subject of this Consent Decree; to 
collect any samples; and to conduct any tests which the Consumer 
Product Safety Commission believes are necessary to ensure that the 
purposes of this decree are implemented.
    13. Defendant shall notify the Consumer Product Safety Commission, 
in writing, at least 30 days before any changes such as dissolution, 
assignment, or sale resulting in the emergence of a successor 
corporation, the creation or dissolution of subsidiaries, or any other 
change in the corporate structure of Small World Toys that may affect 
compliance obligations arising out of this Consent Decree. Such notice 
shall be sent, certified mail, return receipt requested, to the address 
in paragraph eight (8) above.
    14. Defendant shall conduct an immediate limited recall of the hat 
of the Ambi ``Mini-Racer,'' combined with an incentive program approved 
by the Consumer Product Safety Commission, to encourage consumers to 
return the hat. The defendant shall also conduct an immediate limited 
recall from the retail level of the Discovery World/Small World Toys 
``Lift & Learn Puzzles'' and ``Scratch & Sniff Puzzles.'' The recalls 
shall, at a minimum, consist of written notification approved by the 
Commission to each of defendant's customers, such as retailers and 
distributors, who obtained the toys from the defendant. All aspects of 
the recall shall be approved by the Commission. Defendant shall also 
stop distribution of the Ambi ``Funhouse,'' Royal Company ``Water 
Wheel,'' Jimson ``Super Air

[[Page 63303]]

Bus,'' Jimson ``Elephant Boat,'' Hermann Eichorn Gm. Hu. Co. ``Wooden 
Train,'' Hans Clemens Co. ``Stuffed Bear'' and Jimson ``See Thru 
Locomotive,'' until such time as they have been changed and comply with 
the requirements of the FHSA.
    15. The parties to this consent decree agree that the Court retains 
jurisdiction of these matters for the purpose of enabling any party to 
the consent decree to apply for any further orders that may be needed 
to construe, carry out, modify, terminate or enforce compliance with 
the terms of this agreement.
    16. By signing this consent decree, the defendant does not admit 
any violation of the FHSA and does not admit that any of its actions 
described in paragraphs six (6) and fourteen (14) above were taken to 
correct any violations of the FHSA.

    Dated: Los Angeles, California, July 30, 1986.
Small World Toys
Edward M. Goldwasser,
President.
Michael A. Brown,
Counsel for Small World Toys.
Schmeltzer, Aptaker & Sheppard, P.C.,
1800 Massachusetts Avenue, NW., Suite 500, Washington, DC 20036, (202) 
828-1000.
    Approved and so ordered:
John G. Davies
    Dated: July 31, 1986.
For the United States
Richard K. Willard,
Assistant Attorney General, Civil Division.
Robert C. Bonner,
United States Attorney for the Central District of California.
----------------------------------------------------------------------
Assistant United States Attorney.
----------------------------------------------------------------------
Attorney, Civil Division, Office of Consumer Litigation, Department 
of Justice.
[FR Doc. 98-30163 Filed 11-10-98; 8:45 am]
BILLING CODE 6355-01-M