COMPANY SETTLES CLAIMS RELATED TO PROPER REPORTING OF HARMFUL PRODUCT

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, December 31, 2014
Manufacturer Fiskars Brands Inc. Agrees to Pay $2.6 Million Civil Penalty for Delay in Reporting “Gator Combo Axe” Safety Hazard

The Department of Justice has announced today that Gerber Legendary Blades, a division of Fiskars Brands Inc., of Madison, Wisconsin, has agreed to pay a civil penalty of $2.6 million to settle allegations that it knowingly failed to immediately report to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with Fiskars’ Gator Combo Axe.  Fiskars has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards.  The settlement agreement is awaiting judicial approval.

“Fiskars received numerous reports from consumers who were harmed by this product,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The company had an obligation to immediately report to the CPSC and it failed to do so.  We will take action against those who fail to abide by the law so that our partners at the CPSC can protect consumers from injuries.”

The Axe was a combination product that had a knife embedded in its handle that was supposed to be secured by two small magnets.  In a complaint filed on behalf of the CPSC in U.S. District Court for the District of Oregon, the United States alleged that Fiskars became aware that the knife in the Axe handle could and did dislodge from the Axe’s handle when the Axe was in use, causing serious injuries to consumers.  Fiskars imported approximately 103,000 Axes from Taiwan through its Gerber Legendary Blades division in Portland, and distributed those Axes to retail sporting good chains and stores throughout the United States.

“CPSC’s job is to protect consumers,” said Chairman Elliot F. Kaye. “The sooner a firm informs CPSC about incidents or injuries with defective products, the quicker we can act to protect the American public. Failure to report in a timely basis is not only illegal, it can endanger consumer safety. We will not tolerate such irresponsible and dangerous behavior.”

Under the Consumer Product Safety Act (CPSA), manufacturers, distributors and retailers are required to report product hazards to the CPSC.  A knowing violation of the CPSA subjects a firm to civil penalties.  The United States alleged that beginning as early as 2005 and continuing over the next several years, Fiskars received consumer complaints and warranty claims indicating that the knife fell out of the Axe handle while the Axe was being used to chop, pound or hammer.  In several instances, the knife dislodged from the handle during use and caused injuries including lacerations requiring stitches, permanent nerve damage and surgery to repair severed tendons.

“In this case, Fiskar's failure to report to the CPSC not only put consumers at risk, it contributed to people being injured as a result of the unsafe product design,” said U.S. Attorney S. Amanda Marshall for the District of Oregon.  “The settlement not only addresses the product safety issue, but also holds the company accountable and sends a message to others that these violations will be taken seriously.”

In March 2011, Gerber and the CPSC announced a voluntary recall of the Axe.  At that time, consumers were advised to remove the knife from the axe handle and contact Gerber to receive a free handle cap for holding the knife in the axe handle during transport and storage, instructions and a warning label.  Information on the recall can be found on the CSPC website.

The matter is being handled by Trial Attorney Roger Gural of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Neil J. Evans for the District of Oregon and Harriet Kerwin of the CPSC Office of the General Counsel.

In agreeing to settle this matter, Fiskars has not admitted that it knowingly violated the CPSA

4 COMPANIES, 6 INDIVIDUALS TARGETED FOR ALLEGEDLY IMPORTING DANGEROUS CHILDREN'S PRODUCTS

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, February 24, 2014
Government Files Enforcement Action Against Four California Companies and Six Individuals to Stop the Importation of Dangerous Children’s Products

The government has asked a federal court in California to issue an injunction shutting down the importation and sales activities of four California companies and six individuals in connection with their imports of illegal children’s products containing, among other things, lead, phthalates and small parts inappropriate for children under age three.  Phthalates are a chemical plasticizer that make certain products flexible, and certain types of phthalates are banned from use in children’s toys and other child care products.  The Justice Department filed the injunction action in the Central District of California at the request of the Consumer Product Safety Commission (CPSC).

The defendant companies in the case are Toys Distribution Inc. dba TDI International, S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc.  The defendant individuals are Loan Tuyet Thai, Lan My Lam, Paul Phuong, Cuc T. Thai, Tom Liu and Luan Luu.

“Companies cannot be allowed to import hazardous toys into the United States,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Parents have a right to feel confident that the toys their children play with are safe.”      

The CPSC determined through an investigation that the defendants imported various items into the United States in violation of the Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA).  The violative products that Toys Distribution Inc. imported included: motorized and “pull-back” toy cars with impermissible lead content and small parts hazards, numerous toy musical instruments with small parts hazards, dolls containing impermissible levels of lead and phthalates and rattles that failed to meet the infant rattle standards.  S & J Merchandise’s imports of violative products included numerous models of toy cars with impermissible lead content or small parts hazards, a toy telephone with small parts hazards and numerous different plastic dolls with impermissible phthalate levels.  The violative products imported by BLJ Apparel included children’s products and toys with illegal levels of total lead content, toys intended for children under three years of age that contained small parts and infant rattles that may cause choking or suffocation.  All Season Sales’ violative imports included a children’s kitchen set and police set that both exceeded the lead content limit.

The government also alleged that the defendants’ operations were associated with each other and that the companies share various personal or professional ties that make joining all the conduct into one lawsuit appropriate.

“CPSC and our federal law enforcement partners are committed to keeping dangerous toys out of the marketplace all year long,” said CPSC Acting Chairman Robert Adler.  “Manufacturers, importers and retailers need to know that CPSC and the Justice Department are actively enforcing the Consumer Product Safety Improvement Act, a law that has strengthened the nation’s product safety net.”

Defendant companies S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc., as well as defendant individuals Tom Liu and Luan Luu have agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that enjoins them from committing violations of the CPSA and FHSA.  The proposed consent decree will be filed shortly with the court for judicial approval.  The lawsuit continues against the remaining defendants.

The case is being handled by Patrick Runkle, trial attorney with the Department of Justice’s Consumer Protection Branch, and the U.S. Attorney’s Office for the Central District of California on behalf of the Consumer Product Safety Commission.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.