J.B.I., Inc., a Corporation; Provisional Acceptance of a Settlement Agreement and Order

CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 96-C0001]

J.B.I., 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-

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accepted Settlement Agreement with J.B.I., 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 December 1, 1995.

ADDRESSES: Persons wishing to comment on this Settlement Agreement

should send written comments to the Comment 96-C0001, 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: November 8, 1995.

Sadye E. Dunn,

Secretary.

Settlement Agreement and Order

1. J.B.I., Inc. (``J.B.I.'' or ``Respondent'') enters into this

Settlement Agreement and Order with the staff of the Consumer Product

Safety Commission pursuant to the procedures set forth in section

1118.20 of the Commission's Procedures for Investigations, Inspections,

and Inquiries under the Consumer Product Safety Act (``CPSA''), 16 CFR

1118.20.

The Parties

2. The ``Staff'' is the staff of the Consumer Product Safety

Commission (``the Commission'' or ``CPSC''), an independent regulatory

agency of the United States government responsible for the enforcement

of the CPSA, 15 U.S.C. 2051 et seq.

3. Respondent J.B.I. is a corporation organized and existing under

the laws of the state of California with its principal corporate

offices located in Long Beach, California.

Staff Allegations

The Staff contends, as set forth in paragraphs 4 through 9, that:

4. Between 1982 and 1987, J.B.I. manufactured approximately 1,200

units of Tug-N-Turn playground equipment exclusively for and together

with a fast food restaurant operator. The Tug-N-Turns were installed at

the fast food restaurants nationwide. J.B.I. is a ``manufacturer'' of

the Tug-N-Turns as that term is defined in section 3(a)(4) of the CPSA,

15 U.S.C. 2052(a)(4).

5. The Tug-N-Turn is a ride designed and intended for use by

children. A child can spin the ride by turning the steering wheel, or

an individual can cause the ride to spin by pushing it from the

outside. The Tug-N-Turn is a ``consumer product'' which was

``distributed in commerce'' as those terms are defined in sections 3(a)

(1) and (11) of the CPSA, 15 U.S.C. 2052(a) (1) and (11).

6. The Tug-N-Turn created an unreasonable risk of serious injury or

contained a defect which could create a substantial product hazard in

that hardware protruded from the stationary center column of the unit,

creating the possibility that children's shoe laces or pants cuffs

could become entangled, causing serious injury. In cooperation with the

CPSA staff investigation, J.B.I. voluntarily produced information

showing that it became aware of approximately 70 reports of injuries

between 1982 and 1991 involving the Tug-N-Turn, at least 40 of which

allegedly were fractured legs or ankles.

7. On or about November 24, 1982, J.B.I. first became aware of an

injury involving a Tug-N-Turn.

8. Both prior to and during the period in which J.B.I. received

notice of injuries involving Tug-N-Turns, J.B.I. voluntarily attempted,

without success, to remedy the protruding hardware problem.

9. Although J.B.I. obtained sufficient information to reasonably

support the conclusion that the Tug-N-Turns, described in paragraphs

five and six above, contained a defect which could create a substantial

product hazard, or created an unreasonable risk of serious injury, it

failed to report such information to the Commission as required by

section 15(b) of the CPSA, 15 U.S.C. 2064(b). This is a knowing

violation of section 15(b) of the CPSA, is a violation of section

19(a)(4) of the CPSA, 15 U.S.C. 2068(a)(4), and subjects Respondents to

civil penalties under section 20 of the CPSA, 15 U.S.C. 2069.

Response of J.B.I.

J.B.I. contends, as set forth in paragraphs 10 through 14, that:

10. The Tug-N-Turn does not contain a defect which creates or which

could create a substantial product hazard or create an unreasonable

risk of serious injury within the meaning of section 15 of the CPSA, 15

U.S.C. 2064.

11. The leg and ankle injuries reported to J.B.I. were sustained on

Tug-N-Turns that were improperly installed or maintained, and where

original hardware was substituted. As a result of improper installation

or maintenance, children's clothing became entangled on hardware that

protruded from the center column.

12. J.B.I. is unaware of any instance where a child was injured on

a properly installed and maintained Tug-N-Turn unit as a result of

clothing becoming entangled on hardware. A Tug-N-Turn that is properly

installed and maintained neither creates a substantial product hazard

nor an unreasonable risk of serious injury.

13. Between 1982 and 1991, J.B.I. voluntarily took significant

actions to ensure proper installation of the Tug-N-Turn units,

including the dissemination of Safety Notices, Warning Labels, and

ultimately a Removal/Retrofit program.

14. Prior to receiving a letter from the CPSC in January 1992,

J.B.I. was unaware of the reporting provisions of the CPSA. J.B.I.

never ``knowingly'' failed to report to the Commission under section

15(b) of the CPSA, 15 U.S.C. Sec. 2064(b), with respect to these Tug-N-

Turn units.

Agreement of the Parties

15. The Commission has jurisdiction over this matter under the

Consumer Product Safety Act (CPSA), 15 U.S.C. 2051 et seq.

16. This Settlement Agreement and Order becomes effective only upon

its final acceptance by the Commission and service of the incorporated

Order upon Respondent.

17. J.B.I. waives 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. 2064(b), has

occurred, (4) to a statement of findings 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, 28 U.S.C. 2412.

18. 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, as stated herein.

19. No agreement, understanding, representation, or interpretation

not contained in this Settlement Agreement and Order may be used to

vary or to contradict its terms.

20. The provisions of this Settlement Agreement and Order shall

apply to J.B.I. and its successors and assigns.

21. J.B.I. shall inform the Commission if it learns of any

additional Tug-N-Turn incidents not previously reported to the

Commission or information indicating

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that any Tug-N-Turns in use are still capable of turning.

22. J.B.I. shall not contest a United States government subpoena

for J.B.I. representatives to testify at a trial related to the Tug-N-

Turn in any court in the United States. The government will provide

fees and allowances to any subpoenaed witness in accordance with 28

U.S.C. 1821.

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 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 to accept the Settlement Agreement and Order

within 15 days of such publication, the Agreement and Order shall be

deemed finally accepted and the Final Order shall issue on the 16th

day.

24. Upon final acceptance of this Settlement Agreement and Order,

the Commission shall issue the attached Order.

25. A violation of the Order shall subject the parties to

appropriate legal action.

J.B.I. Inc.

Jay Buchbinder,

President, J.B.I., Inc.

The Consumer Product Safety Commission

Eric A. Rubel,

General Counsel.

David Schmeltzer,

Associate Executive Director, Office of Compliance and Enforcement.

Eric L. Stone,

Acting Director, Division of Administrative Litigation, Office of

Compliance and Enforcement.

Dated: February 1, 1995.

Ronald G. Yelenik,

Trial Attorney, Division of Administrative Litigation, Office of

Compliance and Enforcement.

Dated: February 1, 1995.

Jayme Rizzolo Epstein,

Attorney, Office of General Counsel.

Order

Upon consideration of the Settlement Agreement between the staff

and Respondent, 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 Respondent upon final acceptance of the

Settlement Agreement, shall pay to the U.S. Treasury a civil penalty in

the amount of two hundred twenty five thousand dollars ($225,000),

within twenty (20) days after service of this Final Order.

Provisionally accepted and Provisional Order issued on the 8th

day of November, 1995.

By Order of the Commission.

Sadye E. Dunn,

Secretary, Consumer Product Safety Commission.

[FR Doc. 95-28347 Filed 11-15-95; 8:45 am]

BILLING CODE 6355-01-M