[Federal Register Volume 61, Number 55 (Wednesday, March 20, 1996)]
[Notices]
[Pages 11382-11384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6733]
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CONSUMER PRODUCT SAFETY COMMISSION
[CPSC Docket No. 96-C00014]
SKR Resources, 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-accepted Settlement Agreement
with SKR Resources, 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 April 4, 1996.
ADDRESSES: Persons wishing to comment on this Settlement Agreement
should send written comments to the Comment 96-C0004, 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.
SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears
below.
Dated: March 15, 1996.
Sadye E. Dunn,
Secretary.
Settlement Agreement and Order
1. SKR Resources, Inc. (hereinafter, ``SKR''), a corporation,
enters into this Settlement Agreement (hereinafter, ``Agreement'') with
the staff of the Consumer Product Safety Commission,
[[Page 11383]]
and agrees to the entry of the Order described herein. The purpose of
the Agreement and Order is to settle the staffs allegations that SKR
knowingly introduced or caused the introduction in interstate commerce;
received in interstate commerce and delivered or proffered delivery
thereof for pay or otherwise; and failed to comply or caused the
failure to comply with the Commission's Procedures For Export
Noncomplying Products, the ``Ghost Blaster,'' a banned hazardous toy,
in violation of sections 4(a), (c), and (i) of the Federal Hazardous
Substances Act (FHSA), 15 U.S.C. Secs. 1263(a), (c), and (i).
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 CPSA, 15 U.S.C. 2053.
3. SKR is a corporation organized and existing under the laws of
the State of New York, since 1989, with its principal corporate offices
located at 307 Fifth Avenue, New York, NY 10016. SKR is a media buying
service and barter company.
II. Allegations of the Staff
4. The Ghost Blaster toy is a small plastic box which is capable of
making two unique electronic sounds when the user presses one of two
buttons. The Ghost Blaster toy is available in white, black, red, and
gray. Each unit makes its own unique sound. Each Ghost Blaster toy has
an insignia (``logo'') which represents the logo used in the motion
picture ``Ghost Busters.'' The insignia is of a ghost inside a red
circle with a red line through it.
5. The Ghost Blaster toy identified in paragraph 4 above is
intended for use by children under three years of age.
6. The Ghost Blaster, is subject to, but failed to comply with, the
Commission's Small Parts Regulation, 16 C.F.R. Part 1501, in that when
tested under the ``use and abuse'' test methods specified in 16 C.F.R.
1500.51 and 1500.52, (a) one or more parts of the toy separated and (b)
one or more of the separated parts from the toy fit completely within
the small parts cylinder when tested using the procedures set forth in
16 C.F.R. 1501.4.
7. Because the separated parts fit completely within the test
cylinders as described in paragraph 6 above, the Ghost Blaster toy
identified in paragraph 4 above presents a ``mechanical hazard'' within
the meaning of section 2(s) of the FHSA, 15 U.S.C. Sec. 1261(s)
(choking, aspiration, and/or ingestion of small parts).
8. The Ghost Blaster toy identified in paragraph 4 above is a
``hazardous substance'' pursuant to section 2(f)(1)(D) of the FHSA, 15
U.S.C. Sec. 1261(f)(1)(D).
9. The Ghost Blaster toy identified in paragraph 4 above is a
``banned hazardous substance'' pursuant to section 2(q)(1)(A) of the
FHSA, 15 U.S.C. Sec. 1261(q)(1)(A) and 16 C.F.R. 1500.18(a)(9) because
it is intended for use by children under three years of age and bears
or contains a hazardous substance and because it presents a mechanical
hazard as described in paragraph 7 above.
10. On or about July 11, 1990, SKR learned that the Ghost Blaster
toy failed to comply with the Commission's Small Parts Regulation at 16
C.F.R. Part 1501 and before a firm could export the product, it had to
notify the Commission under the Commission's Procedures For Export of
Noncomplying Products at section 14(d) of the FHSA, 15 U.S.C.
Sec. 1273(d) and 16 C.F.R. Part 1019.
11. On or about March 17, 1993, Premier Promotions and Marketing,
Inc. (hereinafter, ``Premier'') and SKR entered into a contract whereby
SKR agreed to purchase from Premier approximately 2.5 million Ghost
Blaster toys identified in paragraph 4 above. The contract provided no
restrictions on the resale of the Ghost Blaster toys by SKR ``with the
exception that the units shall only be offered for resale by SKR for
export in accordance with the requirements of the Consumer Product
Safety Commission (CPSC).''
12. In March, 1993, SKR asked Premier to deliver all the Ghost
Blaster toys identified in paragraph 4 above to Brooklyn Closeout
Corporation (hereinafter ``Brooklyn Closeout''), 167 Clymer Street,
Brooklyn, NY 12111.
13. On or about June 7, 1993, SKR sold 2.5 million Ghost Blaster
toys identified in paragraph 4 above to The Biggest A, 899 Howard
Street, San Francisco, CA 94103 on the condition The Biggest A export
all the Ghost Blaster toys.
14. The Biggest A failed to purchase all of the Ghost Blaster toys.
In August, 1993, SKR sold Brooklyn Closeout approximately 400,000 Ghost
Blaster toys.
15. The Biggest A distributed the Ghost Blaster toys in interstate
commerce and to U.S. firms who exported the product without filing the
required notification informing the Commission of their intent to
export the product and/or distributed the product in domestic commerce.
16. Brooklyn Closeout distributed the Ghost Blaster toys in
interstate commerce and to U.S. firms who exported the product without
filing the required notification informing the Commission of their
intent to export the product and/or distributed the product in domestic
commerce. Ultimately, some of these products were sold to American
consumers because of these actions.
17. SKR knowingly introduced or caused the introduction in
interstate commerce or delivery for introduction in interstate
commerce; received in interstate commerce and delivery or proffered
delivery thereof for pay or otherwise; and failed to comply or caused
the failure to comply with the Commission's Procedures For Export of
Noncomplying Products, the Ghost Blaster toy, a banned hazardous toy,
in violation of sections 4 (a), (c), and (i) of the FHSA, 15 U.S.C.
Secs. 1263 (a), (c), and (i).
III. Response of SKR
18. SKR denies it knowingly introduced or caused the introduction
in interstate commerce or delivery for introduction in interstate
commerce; received in interstate commerce and delivered or proffered
delivery thereof for pay or otherwise; and failed to comply or caused
the failure to comply with the Commission's Export of Noncomplying
Products, the Ghost Buster, a banned hazardous toy, identified in
paragraph 4 above, in violation of sections 4 (a), (c), and (i) of the
FHSA, 15 U.S.C. Secs. 1263 (a), (c), and (i).
19. SKR maintains that Premier intentionally and/or recklessly and/
or carelessly failed to disclose material matters to SKR before March
1993 agreement was entered into. SKR maintains that had there been
appropriate disclosure, SKR would not have entered into the contract
with Premier. SKR maintains that Premier breached the representation
contained within the contract. SKR maintains that it was knowingly and
willingly mislead by Premier to believe that SKR's purchase of the
Ghost Busters was lawful. Therefore, it is SKR's position that Premier
was responsible for the products' introduction into commerce within the
United States and that Premier was kept fully informed of all
developments by SKR with third parties.
IV. Agreement of the Parties
20. The Consumer Product Safety Commission has jurisdiction over
SKR and the subject matter of this Settlement Agreement and Order under
the
[[Page 11384]]
following acts: Consumer Product Safety Act, 15 U.S.C. Sec. 2051 et
seq., and the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1261 et
seq.
21. Upon final acceptance by the Commission of this Settlement
Agreement and Order, the Commission shall issue the attached Order
incorporated herein by this reference.
22. The Commission does not make any determination that SKR
knowingly violated the FHSA and/or the CPSA. This Agreement is entered
into for the purposes of settlement only.
23. Upon final acceptance of this Settlement Agreement by the
Commission and issuance of the Final Order, SKR knowingly, voluntarily,
and completely waives any rights it may have in this matter (1) to an
administrative or judicial hearing, (2) to judicial review or other
challenge or contest of the validity of the Commission's actions, (3)
to a determination by the Commission as to whether SKR failed to comply
with the FHSA and/or the CPSA as aforesaid, (4) to a statement of
findings of fact and conclusions of law, and (5) to any claims under
the Equal Access to Justice Act.
24. SKR agrees to cooperate fully with the Commission and the U.S.
Department of Justice in investigations of any other firms involving
Ghost Blaster toys, including but not limited to testifying truthfully
in any litigation arising from such investigations.
25. 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 this Settlement
Agreement and Order.
26. 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 the procedures set forth in 16 C.F.R.
Secs. 1118.20(e)-(h). If the Commission does not receive any written
request not to accept the Settlement Agreement and Order within 15
days, the Settlement Agreement and Order will be deemed finally
accepted on the 16th day after the date it is published in the Federal
Register.
27. The parties further agree that the Commission shall issue the
attached Order; and that a violation of the Order shall subject SKR to
appropriate legal action.
28. Agreements, understandings, representations, or interpretations
made outside of this Settlement Agreement and Order may not be used to
vary or to contradict its terms.
29. The provisions of the Settlement Agreement and Order shall
apply to SKR and each of its successors and assigns.
Dated: January 30, 1996.
Robert J. Richards,
President, SKR Resources, Inc., 307 Fifth Avenue, New York, NY 10016.
Commission Staff:
David Schmeltzer,
Assistant Executive Director, Office of Compliance.
Eric L. Stone,
Acting Director, Division of Administrative Litigation, Office of
Compliance.
Dated: February 7, 1996.
Dennis C. Kacoyanis,
Trial Attorney, Division of Administrative Litigation, Office of
Compliance.
Order
Upon consideration of the Settlement Agreement entered into between
Respondent SKR Resources, Inc., a corporation, and the staff of the
Consumer Product Safety Commission; and the Commission having
jurisdiction over the subject matter and SKR Resources, 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, SKR Resources, Inc. shall pay the Commission a
civil penalty in the amount of forty thousand and 00/100 dollars
($40,000.00) in two (2) payments. The first payment of twenty thousand
and 00/100 dollars ($20,000.00) shall be due within twenty (20) days
after service upon Respondent of the Final Order of the Commission
accepting the Settlement Agreement. The second payment of twenty
thousand and 00/100 dollars ($20,000.00) shall be made within one year
after service of the Final Order upon Respondent. Payment of the full
amount of the civil penalty shall settle fully the staff's allegations
set forth in paragraphs 4 through 17 of the Settlement Agreement that
SKR Resources, Inc. knowingly violated the FHSA. Upon the failure by
SKR Resources, Inc. to make a payment or upon the making of a late
payment by SKR Resources, Inc. the entire amount of the civil penalty
shall be due and payable, and 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. Secs. 1961(a) and (b).
Provisionally accepted and Provisional Order issued on the 15th day
of March, 1996.
By Order of the Commission:
Sadye E. Dunn, Secretary,
Consumer Product Safety Commission.
[FR Doc. 96-6733 Filed 3-19-96; 8:45 am]
BILLING CODE 6355-01-M
