[Federal Register Volume 74, Number 147 (Monday, August 3, 2009)]
[Notices]
[Pages 38419-38420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18512]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 09-C0028]


Cardinal Distributing Company, 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 
Cardinal Distributing Company, Inc., containing a civil penalty of 
$100,000.00.

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-C0028, 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.

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 Cardinal Distributing Company, Inc., CPSC 
Docket No. 09-C0028.

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Cardinal Distributing 
Company, Inc. (``Cardinal'') 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. Cardinal is a corporation organized and existing under the 
laws of Maryland, with its principal offices located in Baltimore, 
Maryland. At all times relevant hereto, Cardinal imported and/or 
sold toy jewelry.

Staff Allegations

    4. Between November 2005 and April 2007, Cardinal imported into 
the United States about 900,000 units of toy jewelry, consisting of 
Children's ``Sportswear'' Necklaces, Item <greek-i> 8261 
(``Necklace(s)''), and Children's Charm Bracelets, Item <greek-i> 
INK705 (``Bracelet(s)''). Cardinal offered for sale or sold most of 
the subject products through vending machines located in malls, 
discount, department and grocery stores nationwide from January 2006 
through April 2007 for $0.25 per unit.
    5. The Necklaces and Bracelets are ``consumer product(s),'' and, 
at all times relevant hereto, Cardinal was a ``manufacturer'' and/or 
a ``retailer'' of those consumer product(s), which were 
``distributed in commerce,'' as those terms are defined in CPSA 
sections 3(a)(3), (5), (8), (11), and (13), 15 U.S.C. 2052(a)(3), 
(5), (8), (11), and (13).
    6. The Necklaces and 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 16, 2007, the Staff obtained samples of the 
Necklaces from one of Cardinal's customers based in Illinois, which 
subsequently were tested at the CPSC Laboratory for the presence of 
lead. The test results demonstrated that the yellow paint on certain 
Necklace samples contained a total lead content from 0.519 percent 
to 0.726 percent. These levels of lead are in excess of the 
permissible 0.06 percent limit set forth in the Ban.
    8. Cardinal reported to CPSC on April 10, 2007 that recent 
testing of the Bracelets by an independent laboratory had 
demonstrated that their surface coating contained a total lead 
content as high as 1.5 percent. These levels of lead are in excess 
of the permissible 0.06 percent limit set forth in the Ban.
    9. On April 17, 2007, the Commission and Cardinal announced a 
consumer-level recall of about 900,000 units of the Necklaces and 
Bracelets because ``The paint on this jewelry contains high levels 
of lead. Lead is toxic if ingested by young children and can cause 
adverse health effects.''
    10. Although Cardinal reported no incidents or injuries 
associated with the Necklaces and 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.
    11. The Necklaces and 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 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.
    12. Between November 2005 and April 2007, Cardinal 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 hazardous Necklaces and 
Bracelets, in violation of section 19(a)(1) of the CPSA, 15 U.S.C. 
2068(a)(1). Cardinal committed these prohibited acts ``knowingly,'' 
as that term is defined in section 20(d) of the CPSA, 15 U.S.C. 
2069(d).
    13. Pursuant to section 20 of the CPSA, 15 U.S.C. 2069, Cardinal 
is subject to civil penalties for the aforementioned violations.

Cardinal Response

    14. Cardinal denies the Staff's allegations set forth above that 
Cardinal knowingly violated the CPSA.

Agreement of the Parties

    15. Under the CPSA, the Commission has jurisdiction over this 
matter and over Cardinal.
    16. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Cardinal, or 
a determination by the Commission, that Cardinal has knowingly 
violated the CPSA.
    17. In settlement of the Staff's allegations, Cardinal shall pay 
a civil penalty in the amount of one hundred thousand dollars 
($100,000.00). The civil penalty shall be paid in two (2) 
installments as follows: $50,000.00 shall be paid within twenty (20) 
calendar days of service of the Commission's final Order accepting 
the Agreement; and $50,000.00 shall be paid within six (6) months of 
service of the Commission's final Order accepting the Agreement. 
Each payment shall be made by check payable to the order of the 
United States Treasury.
    18. The CPSC agrees to take no further action involving Cardinal 
with respect to CPSC Sample Nos. 07-302-0148 and 07-302-0149 
(Children's Rings with Dice or Horseshoes, Release No. 07-174), and 
CPSC No. RP070318 (Children's Turquoise Rings, Release No. 07-189).
    19. 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

[[Page 38420]]

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.
    20. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Cardinal 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 Cardinal 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.
    21. The Commission may publicize the terms of the Agreement and 
Order.
    22. The Agreement and Order shall apply to, and be binding upon, 
Cardinal and each of its successors and assigns.
    23. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order may subject Cardinal to appropriate 
legal action.
    24. 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.
    25. 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 Cardinal agree that severing the provision materially affects 
the purpose of the Agreement and Order.

CARDINAL DISTRIBUTING COMPANY, INC.

    Dated: 11/13/08.

By:--------------------------------------------------------------------
Daniel Paszkiewicz,
President, Cardinal Distributing Company, Inc., 6801 Quad Avenue, 
Baltimore, MD 21237.

    Dated: 11/14/08.

By:--------------------------------------------------------------------
Caroline A. Pilch, Esq.,
Yen Pilch Komadina & Flemming, P.C., 6017 North 15th Street, 
Phoenix, AZ 85014, Counsel for Cardinal Distributing Company, Inc.

U.S. CONSUMER PRODUCT SAFETY COMMISSION STAFF

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

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

    Dated: 4/14/09.

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

United States of America--Consumer Product Safety Commission

    In the Matter of Cardinal Distributing Company, Inc., CPSC 
Docket No. 09-C0028.

Order

    Upon consideration of the Settlement Agreement entered into 
between Cardinal Distributing Company, Inc. (``Cardinal'') and the 
U.S. Consumer Product Safety Commission (``Commission'') staff, and 
the Commission having jurisdiction over the subject matter and over 
Cardinal, 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 Cardinal shall pay a civil penalty in the 
amount of one hundred thousand dollars ($100,000.00). The civil 
penalty shall be paid in two (2) installments as follows: $50,000.00 
shall be paid within twenty (20) calendar days of service of the 
Commission's final Order accepting the Agreement; and $50,000.00 
shall be paid within six (6) months of service of the Commission's 
final Order accepting the Agreement. Each payment shall be made by 
check payable to the order of the United States Treasury. Upon the 
failure of Cardinal to make any of the foregoing payments when due, 
(i) the entire amount of the civil penalty shall become due and 
payable, and (ii) interest on the outstanding balance shall accrue 
and be paid by Cardinal 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. E9-18512 Filed 7-31-09; 8:45 am]
BILLING CODE 6355-01-P