00-4383. Hasbro, Inc., Provisional Acceptance of a Settlement Agreement and Order

AGENCY:

Consumer Product Safety Commission.

ACTION:

Notice.

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. Published below is a provisionally-accepted Settlement Agreement Hasbro, Inc., a corporation, containing a civil penalty of $400,000.

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 March 13, 2000.

ADDRESSES:

Persons wishing to comment on this Settlement Agreement should send written comments to the Comment 00-C0005, Office of the Secretary, Consumer Product Safety Commission, Washington, DC 20207.

FOR FURTHER INFORMATION CONTACT:

William J. Moore, Trial Attorney, Office of Compliance and Enforcement, Consumer Product Safety Commission, Washington, DC 20207; telephone [phone], 1348.

SUPPLEMENTARY INFORMATION:

The text of the Agreement and Order appears below.

Dated: February 17, 2000.

Sadye E. Dunn,

Secretary.

In the Matter of Hasbro, Inc., a corporation.

Settlement Agreement and Order

1. This Settlement Agreement, made by and between the staff (“the staff”) of the U.S. Consumer Product Safety Commission (“the Commission”) and Hasbro, Inc., (“Hasbro”), a corporation, in accordance with 16 CFR 1118.20 of the Commission's Procedures for Investigations, Inspections, and Inquiries under the Consumer Product Safety Act (“CPSA”), is a settlement, a complete resolution of the staff allegations set forth below.

I. The Parties

2. The Commission is an independent federal regulatory agency responsible for the enforcement of the Consumer Product Safety Act, 15 U.S.C. 2051-2084.

3. Hasbro is a corporation organized and existing under the laws of the State of Rhode Island. Its principal offices are located at 1027 Newport Avenue, Pawtucket, Rhode Island 02861. Playskool is a division of Hasbro.

II. Staff Allegations

4. Hasbro manufactured the Playskool “Fold ‘n’ Travel” Infant Carrier (Infant Carrier) and sold and distributed into United States commerce approximately 38,500 units beginning in April 1991. Hasbro is, therefore, a manufacturer and distributor of a consumer product in U.S. commerce pursuant to 15 U.S.C. 2052(a)(1), (4), (5) and (6).

5. The Infant Carrier incorporated a handle-locking system that failed to stay locked during use, allowing the child to fall out of the carrier and onto the surface below.

6. Hasbro began to receive injury claims and complaints alleging handle-lock failure. Between May 1992 and December 1995, Hasbro learned of nine incidents of handle failure resulting in seven skull fractures and one baby falling on her face. Hasbro learned of three more such incidents in 1996.

7. On July 19, 1996, Hasbro filed a telephone report with the Commission. The firm voluntarily conducted a recall of the Infant Carrier soon thereafter.

8. Hasbro obtained information which reasonably supported the conclusion that the Playskool Fold ‘n’ Travel Infant Carrier contained defects which could create a substantial product hazard but failed to report to the Commission in a timely manner as required by section 15(b) of the CPSA, 15 U.S.C. 2064(b).

III. Response of HASBRO

9. Hasbro denies each and every staff allegation set forth in paragraphs 4, 5, 6 and 8, above; it further denies that the Playskool Fold ‘n’ Travel Infant Carrier contains any defect which could create a substantial product hazard pursuant to section 15(a) of the CPSA, 15 U.S.C. 2064(a), and further denies that it violated the reporting requirements of section 15(b) of the CPSA, 15 U.S.C. 2064(b) or 16 CFR part 1115.

10. In July, 1996 information concerning the Infant Carrier became apparent to Hasbro. Promptly thereafter, Hasbro, of its own initiative, filed a report under Section 15 of the CPSA and worked cooperatively with the staff to conduct a comprehensive recall plan under the Commission's Fast Track program.

11. Hasbro enters this Settlement Agreement and Order for settlement purposes only, to avoid incurring additional legal costs and expenses.

IV. Agreement of the Parties

12. The Commission has jurisdiction over this matter and over Hasbro under the Consumer Product Safety Act (CPSA), 15 U.S.C. 2051 et seq.

13. Hasbro knowingly, voluntarily and completely waives any rights it may have in the above captioned case (1) to the issuance of a Complaint in this matter, (2) to an administrative or judicial hearing with respect to the staff allegations cited herein, (3) to judicial review or other challenge or contest of the validity of the Commission's Order, (4) 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, and (5) to a statement of findings of fact and conclusions of law with regard to the staff allegations.

14. 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 16 CFR 1118.20.

15. The Settlement Agreement and Order becomes effective upon final acceptance by the Commission and its service upon Hasbro. Hasbro shall pay a civil penalty in the amount of four hundred thousand and no/dollars ($400,000.00) within 10 calendar days of receiving service of such final Settlement Agreement and Order.

16. This Settlement Agreement and Order is not deemed or construed as an admission by Hasbro (a) of any liability or wrongdoing by Hasbro; (b) that Hasbro violated any law or regulation; (c) that the Infant Carrier is defective or creates a substantial product hazard, or is unreasonably dangerous; (d) that the Infant Carrier or Hasbro has caused any injuries; (e) of the truth of any claims or other matters alleged or otherwise stated by the Commission or any other person either against Hasbro or with respect to the Infant Carrier. Nothing contained in this Settlement Agreement and Order precludes Hasbro from raising any defenses in any future litigation not arising out of the terms of this Settlement Agreement and Order.

17. Upon final acceptance of this Settlement Agreement by the Commission, the issuance of the Order, and the full and timely payment by Hasbro to the United States Treasury a civil penalty in the amount of four hundred thousand dollars ($400,000.00), the Commission specifically waives its right to initiate, either by referral to the Department of Justice or bringing in its own name, any action for civil or criminal penalties relating to any of the events that gave rise to the staff's allegations in paragraphs four through eight, supra, against (a) Hasbro; (b) any of Hasbro's current or former subsidiaries, affiliates, divisions or related entities; (c) any shareholder, director, officer, employee, agent or attorney of any entity referenced in (a) or (b); and (d) any successor, heir, or assign of the persons described in (a), (b) or (c) above.

18. For purposes of Section 6(b) of the CPSA, 15 U.S.C. 2055(b), upon final acceptance by the Commission, the parties agree that the Commission may publicize the terms of the Settlement Agreement and Order.

19. Hasbro agrees to the entry of the attached Order, which is incorporated herein by reference, and agrees to be bound by its terms.

20. The Commission's Order in this matter is issued under the provisions of the CPSA, 15 U.S.C. 2051 et seq., and a violation of this Order may subject Hasbro to appropriate legal action.

21. This Settlement Agreement and Order is binding upon and shall inure to the benefit of Hasbro and the assigns or successors of Hasbro.

22. Agreements, understandings, representations, or interpretations made outside this Settlement Agreement and Order may not be used to vary or to contradict its terms.

Hasbro, Inc.,

Dated: January 25, 2000.

By: Alfred J. Verrecchia,

Executive Vice President.

The U.S. Consumer Product Safety Commission.

Alan H. Schoem,

Assistant Executive Director, Office of Compliance.

Eric L. Stone,

Director, Legal Division, Office of Compliance.

Dated: January 11, 2000.

By: William J. Moore, Jr.,

Attorney, Legal Division, Office of Compliance.

In the Matter of Hasbro, Inc. a corporation.

Order

Upon consideration of the Settlement Agreement entered into between Hasbro, Inc., a corporation, and the staff of the U.S. Consumer Product Safety Commission; and the Commission having jurisdiction over the subject matter and Hasbro, 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, Hasbro, Inc. shall pay the Commission a civil penalty in the amount of four hundred thousand and no/100 dollars, ($400,000.000) within ten (10) calendar days after service of this Final Order upon Hasbro, Inc.

Provisionally accepted and Provisional Order issued on the 17th day of February, 2000.

By Order of the Commission.

Sadye E. Dunn,

Secretary, U.S. Consumer Product Safety Commission.