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

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.

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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 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