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

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:

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Collect. date *

Sample No. Product entry date Expt/Mfg. Quantity

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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:

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Product Expt./Mfg. Quantity

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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

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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