A&A Global Industries, Inc., Provisional Acceptance of a Settlement Agreement and Order, 38408-38409 [E9-18513]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 74, Number 147 (Monday, August 3, 2009)]
[Notices]
[Pages 38408-38409]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18513]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0027]


A&A Global Industries, Inc., 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 Consumer Product Safety Act in 
the Federal Register in accordance with the terms of 16 CFR 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
A&A Global Industries, Inc., containing a civil penalty of $40,000.00.

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 August 18, 2009.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 09-C0027, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: M. Reza Malihi, Trial Attorney, 
Division of Compliance, Office of the General Counsel, Consumer Product 
Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-
4408; telephone (301) 504-7733 or Renee K. Haslett, Trial Attorney, 
(same address); telephone (301) 504-7673.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: July 28, 2009.
Todd A. Stevenson,
Secretary.

United States of America, Consumer Product Safety Commission

    In the Matter of A&A Global Industries, Inc.

Settlement Agreement and Order

    1. In accordance with 16 CFR 1118.20, A&A Global Industries, 
Inc. (``A&A'') and the staff (``Staff'') of the United States 
Consumer Product Safety Commission (``CPSC'' or the ``Commission'') 
enter into this Settlement Agreement (``Agreement''). The Agreement 
and the incorporated attached Order (``Order'') settle the Staff's 
allegations set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established pursuant to, and responsible for the enforcement of, the 
Consumer Product Safety Act, 15 U.S.C. 2051-2089 (``CPSA'').
    3. A&A is a corporation organized and existing under the laws of 
Maryland, with its principal office located in Cockeysville, 
Maryland. At all times relevant hereto, A&A imported and/or 
distributed in commerce toy jewelry.

Staff Allegations

    4. From approximately January 2005 to March 2007, A&A imported 
and/or distributed about 3.95 million units of children's ``Groovy 
Grabber'' bracelets (``Bracelets''), which ultimately were sold to 
consumers in vending machines located in malls, discount, department 
and grocery stores nationwide from November 2005 to March 2007 for 
$.25 per unit.
    5. The Bracelets are ``consumer product(s),'' and, at all times 
relevant hereto, A&A was an ``importer'' and/or ``distributor'' of 
those consumer product(s), which were ``distributed in commerce,'' 
as those terms are defined in CPSA sections 3(a)(5), (7), (8), (9), 
and (11), 15 U.S.C. 2052(a)(5), (7), (8), (9), and (11).
    6. The Bracelets are articles intended to be entrusted to or for 
use by children, and, therefore, are subject to the requirements of 
the Commission's Ban of Lead-Containing Paint and Certain Consumer 
Products Bearing Lead-Containing Paint, 16 CFR Part 1303 (the 
``Ban''). Under the Ban, toys and other children's articles must not 
bear ``lead-containing paint,'' defined as paint or other surface 
coating materials whose lead content is more than 0.06 percent of 
the weight of the total nonvolatile content of the paint or the 
weight of the dried paint film. 16 CFR 1303.2(b)(1)
    7. On February 2, 2007, the Staff obtained Bracelet samples from 
one of A&A's customers based in New York, which subsequently were 
tested at the CPSC Laboratory for the presence of lead. The test 
results demonstrated that the yellow paint on certain Bracelet 
samples contained a total lead content from 7.114 percent to 7.742 
percent. These levels of lead are in excess of the permissible 0.06 
percent limit set forth in the Ban.
    8. On April 3, 2007, the Commission and A&A announced a 
consumer-level recall of about four million units of the Bracelets 
because ``[t]he paint on the metallic band beneath the decorative 
cover contains high levels of lead. Lead is toxic if ingested by 
young children and can cause adverse health effects.''
    9. Although A&A reported no incidents or injuries associated 
with the Bracelets, it failed to take adequate action to ensure that 
none would bear or contain lead-containing paint, thereby creating a 
risk of lead poisoning and adverse health effects to children.
    10. The Bracelets constitute ``banned hazardous products'' under 
CPSA section 8 and the Ban, 15 U.S.C. 2057 and 16 CFR 1303.1(a)(1), 
1303.4(b), in that they bear or contain paint or other surface 
coating

[[Page 38409]]

materials whose lead content exceeds the permissible limit of 0.06 
percent of the weight of the total nonvolatile content of the paint 
or the weight of the dried paint film.
    11. From January 2005 to March 2007, A&A sold, manufactured for 
sale, offered for sale, distributed in commerce, or imported into 
the United States, or caused one or more of such acts, with respect 
to the aforesaid banned hazards Bracelets in violation of section 
19(a)(1) of the CPSA, 15 U.S.C. 2068(a)(1) (which acts at the time 
were in violation of 19(a)(2) of the CPSA, 15 U.S.C. 2068(a)(2), as 
the Consumer Product Safety Improvement Act of 2008, Public Law 110-
314, had yet to be enacted). A&A committed these prohibited acts 
``knowingly,'' as that term is defined in section 20(d) of the CPSA, 
15 U.S.C. 2069(d).
    12. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, A&A is 
subject to civil penalties for the aforementioned violations.

A&A's Responsive Allegations

    13. A&A contests and denies the Staff's allegations set forth in 
paragraphs 4 through 12.
    14. A&A specifically denies that it failed to take adequate 
action to ensure that the Bracelets did not bear lead-containing 
paint exceeding the permissible limits set forth in the Ban. A&A's 
compliance program, at the time of the subject recall met or 
exceeded industry standards for ensuring compliance with the 
permissible lead limits set forth in the Ban. Likewise, A&A asserts 
that it acted responsibly and reasonably to respond to the 
Commission's concern regarding the Bracelets, including its prompt 
and voluntary implementation of a successful product recall of the 
Bracelets in cooperation with the Commission.
    15. A&A specifically denies that any alleged violation of the 
CPSA occurred ``knowingly,'' as the term ``knowingly'' is defined in 
section 20(d) of the CPSA, 15 U.S.C. 2069(d).
    16. A&A has entered into the Agreement for settlement purposes 
only, to avoid incurring additional expenses and the distraction of 
litigation. Accordingly, the Agreement and Order do not constitute, 
and are not evidence of, any fault or wrongdoing on the part of A&A.

Agreement of the Parties

    17. Under the CPSA, the Commission has jurisdiction over this 
matter and over A&A.
    18. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by A&A, or a 
determination by the Commission, that A&A has knowingly violated the 
CPSA.
    19. In settlement of the Staff's allegations, A&A shall pay a 
civil penalty in the amount of forty thousand dollars ($40,000.00) 
within twenty (20) calendar days of service of the Commission's 
final Order accepting the Agreement. The payment shall be made by 
check payable to the order of the United States Treasury.
    20. Upon the Commission's provisional acceptance of the 
Agreement, the Agreement shall be placed on the public record and 
published in the Federal Register in accordance with the procedures 
set forth in 16 CFR 1118.20(e). In accordance with 16 CFR 
1118.20(f), if the Commission does not receive any written request 
not to accept the Agreement within fifteen (15) days, the Agreement 
shall be deemed finally accepted on the sixteenth (16th) day after 
the date it is published in the Federal Register.
    21. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, A&A knowingly, voluntarily, and 
completely waives any rights it may have in this matter to the 
following: (1) An administrative or judicial hearing; (2) judicial 
review or other challenge or contest of the validity of the 
Commission's Order or actions; (3) a determination by the Commission 
of whether A&A failed to comply with the CPSA and its underlying 
regulations; (4) a statement of findings of fact and conclusions of 
law; and (5) any claims under the Equal Access to Justice Act.
    22. The Commission may publicize the terms of the Agreement and 
Order.
    23. The Agreement and Order shall apply to, and be binding upon, 
A&A and each of its successors and assigns.
    24. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject A&A to appropriate 
legal action.
    25. The Agreement may be used in interpreting the Order. 
Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and Order may not be 
used to vary or contradict its terms. The Agreement shall not be 
waived, amended, modified, or otherwise altered, except in a writing 
that is executed by the party against whom such waiver, amendment, 
modification, or alteration is sought to be enforced.
    26. If any provision of the Agreement and Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and Order, such 
provision shall be fully severable. The balance of the Agreement and 
Order shall remain in full force and effect, unless the Commission 
and A&A agree that severing the provision materially affects the 
purpose of the Agreement and Order.

A&A Global Industries, Inc.

    Dated: 4/23/09.

By:--------------------------------------------------------------------
Eugene Lipman,
Vice President of Finance and Administration, A&A Global Industries, 
Inc., 17 Stenersen Lane, Cockeysville, MD 21030.

    Dated: 4/27/09.

By:--------------------------------------------------------------------
Kathleen M. Sanzo, Esq.,
Morgan, Lewis & Bockius LLP, 1111 Pennsylvania Avenue, NW., 
Washington, DC 20004, Counsel for A&A Global Industries, Inc.

U.S. Consumer Product Safety Commission Staff

Cheryl A. Falvey,
General Counsel, Office of the General Counsel.

Ronald G. Yelenik,
Assistant General Counsel, Office of the General Counsel.

    Dated: 5/12/09.

By:--------------------------------------------------------------------
By:--------------------------------------------------------------------
M. Reza Malihi,
Trial Attorney, Renee K. Haslett, Trial Attorney, Division of 
Compliance, Office of the General Counsel.

    In the Matter of A&A Global Industries, Inc.

Order

    Upon consideration of the Settlement Agreement entered into 
between A&A Global Industries, Inc. (``A&A'') and the U.S. Consumer 
Product Safety Commission (``Commission'') staff, and the Commission 
having jurisdiction over the subject matter and over A&A, and it 
appearing that the Settlement Agreement and Order are in the public 
interest, it is
    Ordered, that the Settlement Agreement be, and hereby is, 
accepted; and it is
    Further ordered, that A&A shall pay a civil penalty in the 
amount of forty thousand dollars ($40,000.00). The civil penalty 
shall be paid within twenty (20) calendar days of service of the 
Commission's final Order accepting the Agreement. The payment shall 
be made by check payable to the order of the United States Treasury. 
Upon the failure of A&A to make the foregoing payment when due, 
interest on the unpaid amount shall accrue and be paid by A&A at the 
federal legal rate of interest set forth at 28 U.S.C. 1961(a) and 
(b).
    Provisionally accepted and provisional Order issued on the 8th 
day of July 2009.

    By Order of the Commission.
Todd A. Stevenson,
Secretary, U.S. Consumer Product Safety Commission.

[FR Doc. E9-18513 Filed 7-31-09; 8:45 am]
BILLING CODE 6355-01-P