Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Notices 18695 

1Magnetix sets continued to be manufactured 

after 2005, however due to manufacturing and 

design improvements instituted by Mega Brands 

America, these sets are not the subject of the 

allegations set forth in this Agreement. 

NSN: 8105–00–NIB–1286—Bag, Trash, Insect 

Repellent 

NSN: 8105–00–NIB–1287—Bag, Trash, Insect 

Repellent 

NSN: 8105–00–NIB–1288—Bag, Trash, Insect 

Repellent 

NPA: Envision, Inc., Wichita, KS 

Contracting Activity: Federal Acquisition 

Service, GSA/FSS OFC SUP CTR—Paper 

Products 

COVERAGE: B-List for the broad 

Government requirement as aggregated by the 

General Services Administration. 

Service 

Service Type/Location: Custodial Services, 

Camp Bullis Gymnasium—Building 5031, 

6929 Camp Bullis Rd, Camp Bullis, TX 

NPA: Professional Contract Services, Inc., 

Austin, TX 

Contracting Activity: DEPT OF THE 

ARMY, XR W6BB ACA SAM HOUSTON. 

Barry S. Lineback, 

Director, Business Operations. 

[FR Doc. E9–9455 Filed 4–23–09; 8:45 am] 

BILLING CODE 6353–01–P 

CONSUMER PRODUCT SAFETY 

COMMISSION 

[CPSC Docket No. 09–C0018] 

Mega Brands America, Inc. f/k/a Rose 

Art Industries, 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(e). Published 

below is a provisionally accepted 

Settlement Agreement with Mega 

Brands America, Inc. f/k/a Rose Art 

Industries, Inc., containing a civil 

penalty of $1,100,000.00. 

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 May 11, 

2009. 

ADDRESSES: Persons wishing to 

comment on this Settlement Agreement 

should send written comments to the 

Comment 09–C0018, Office of the 

Secretary, Consumer Product Safety 

Commission, 4330 East West Highway, 

Room 502, Bethesda, Maryland 20814– 

4408. 

FOR FURTHER INFORMATION CONTACT: 

Michelle Faust Gillice, Trial Attorney, 

Division of Compliance, Office of the 

General Counsel, Consumer Product 

Safety Commission, 4330 East West 

Highway, Bethesda, Maryland 20814– 

4408; telephone (301) 504–7667. 

SUPPLEMENTARY INFORMATION: The text of 

the Agreement and Order appears 

below. 

Dated: April 20, 2009. 

Todd A. Stevenson, 

Secretary. 

In the Matter of: Mega Brands America, 

Inc. f/k/a Rose Art Industries, Inc.; 

Settlement Agreement 

1. This Settlement Agreement 

(‘‘Agreement’’) is made by and between 

the staff (the ‘‘staff’’) of the U.S. 

Consumer Product Safety Commission 

(the ‘‘Commission’’) and Mega Brands 

America, Inc., f/k/a Rose Art Industries, 

Inc., in accordance with 16 CFR 1118.20 

of the Commission’s Procedures for 

Investigations, Inspections and Inquiries 

under the Consumer Product Safety Act 

(‘‘CPSA’’). This Agreement and the 

incorporated attached Order resolve the 

staff’s allegations set forth below. 

The Parties 

2. The Commission is an independent 

federal regulatory agency responsible for 

the enforcement of the CPSA, 15 U.S.C. 

2051–2089. 

3. Mega Brands America, Inc. (‘‘Mega 

Brands America’’) f/k/a Rose Art 

Industries, Inc. (‘‘Rose Art’’) is a New 

Jersey corporation, with its principal 

office located in Livingston, NJ. Rose 

Art was wholly owned by Jeffrey Rosen, 

Lawrence Rosen, and Sydney Rosen 

until purchased by Mega Bloks, Inc. (a 

Canadian corporation) on July 26, 2005. 

Pursuant to the terms of the purchase 

agreement, Mega Bloks, Inc. could not 

assume operational control of Rose Art 

until December 31, 2005. Thereafter, 

Jeffrey Rosen and Lawrence Rosen 

remained in senior management 

positions at Rose Art until their 

respective departures on April 3, 2006 

and May 9, 2006. On June 15, 2006, 

Rose Art was renamed ‘‘Mega Brands 

America’’. 

4. Mega Brands, Inc. f/k/a Mega Bloks, 

Inc. (‘‘Mega Brands’’) is a Canadian 

corporation located in Montreal, 

Quebec, Canada. Mega Brands is the 

parent company of Mega Brands 

America. 

5. At all times relevant herein, Rose 

Art designed and manufactured the 

Magnetix magnet toys subject to this 

Settlement Agreement and Order. 

Staff Allegations 

6. Between January 2003 and 

December 2005, Rose Art manufactured 

and/or imported Magnetix magnetic 

building sets (hereinafter ‘‘Magnetix 

set(s)’’ or ‘‘the set(s).’’ 1

7. Magnetix sets are ‘‘children’s 

product[s]’’ and ‘‘consumer product[s]’’ 

and, at the times relevant herein, Rose 

Art was a ‘‘manufacturer’’ of ‘‘children’s 

product[s]’’ and ‘‘consumer product[s]’’ 

which were ‘‘distributed in commerce’’ 

as those terms are defined in sections 

3(a)(2), (5), (8), and (11) of the CPSA, 15 

U.S.C. 2052(a)(2), (5), (8) and (11). 

8. The Magnetix sets are defective 

because magnets embedded in small 

plastic pieces contained in the sets 

could come loose and fall out of the 

plastic casing. 

9. This defect creates a substantial 

risk of injury to children under section 

15(c) of the Federal Hazardous 

Substances Act, 15 U.S.C. 1274(c) 

because, if two or more magnets (or one 

magnet and one metallic ball) from a set 

are ingested by a child, they can attract 

each other through intestinal walls, 

causing perforations, twisting and/or 

blockage of the intestines, infection, 

blood poisoning and death. 

10. On December 14, 2005, Rose Art 

filed an ‘‘initial report’’ pursuant to 

section 15(b) of the CPSA, 15 U.S.C. 

2064(b), concerning the death of a 22 

month old child who died on November 

24, 2005. The child had ingested 

multiple magnets from a Magnetix set 

on separate occasions which 

subsequently joined together in his 

small intestine, causing a blockage and 

sepsis, which led to his death. Rose 

Art’s report identified the product as a 

Magnetix ‘‘X-treme Combo Flashing 

Lights Castle.’’ The firm attributed the 

release of magnets from the plastic 

pieces to unusually abusive play by the 

decedent’s older siblings. The initial 

report essentially contained no other 

information. 

11. At the time of its initial report, 

Rose Art was in possession of at least 

one report of a child suffering an 

unspecified injury from ingesting a 

magnet from a Magnetix set and over 

1100 consumer complaints that magnets 

had come loose or fallen out of plastic 

pieces from dozens of different 

Magnetix models, but failed to include 

that information in its report as required 

by section 15(b) of the CPSA, 15 U.S.C. 

2064(b). 

12. On January 13, 2006, CPSC staff 

sent Rose Art a letter requesting a Full 

Report pursuant to 16 CFR 1115.13(d). 

Requested information included copies 

of the following: Product liability suits 

and/or claims of personal injury; 

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18696 Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Notices 

consumer complaints, dealer 

complaints, warranty claims, an 

identification of the products, and the 

total number of products involved. In 

addition, the letter advised the firm that 

it had a continuing obligation to 

supplement or correct its full report if 

the firm learned of other incidents or 

injuries or information that affected the 

scope, prevalence or seriousness of the 

defect of hazard. 

13. On February 1, 2006, Rose Art 

submitted an incomplete and 

inadequate Full Report. The firm 

provided limited information about the 

‘‘X-treme Combo Flashing Lights Castle’’ 

despite relevant knowledge that the 

population of affected products 

included over 255 different Magnetix set 

models. In addition, the firm failed to 

provide any information regarding 

complaints involving magnets falling 

out of Magnetix pieces. 

14. On March 28, 2006, Rose Art 

provided staff with a chart entitled 

‘‘Consumer Calls/Warranty’’ claims in 

response to the staff’s repeated requests 

for complaint and incident data. The 

chart lacked detail and critical 

information rendering it effectively 

useless. The CPSC staff requested all 

source documents used in the creation 

of the chart. The staff was told that the 

firm did not retain any source 

documents regarding complaint and 

incident data. 

15. On March 31, 2006, CPSC and 

Rose Art announced a voluntary recall 

whereby the firm agreed to provide 

replacement products for consumers 

with children under the age of 6. The 

press release announced that CPSC was 

aware of one child who died and four 

children who were seriously injured as 

a result of ingesting or aspirating 

magnets that fell out of Magnetix pieces. 

16. Following the recall, CPSC staff 

sought additional product information 

from the firm including complaint data. 

In September 2006, the staff came across 

information which indicated the firm 

did in fact retain records of consumer 

complaints with some level of detail. 

17. On October 16, 2006, the 

Commission issued a Special Order and 

Subpoena to Mega Brands America 

compelling the firm to produce all 

injury and incident records pertaining 

to Magnetix. 

18. On December 1, 2006, Mega 

Brands submitted a response for Mega 

Brands America. According to 

documents provided, between January 

2004 and December 14, 2005 (the date 

on which Rose Art reported the death of 

the child), Rose Art had received over 

1,100 complaints of magnets falling out 

or otherwise liberating from the plastic 

pieces in over 67 different models of 

Magnetix. In addition, Rose Art had 

received notice of a child being injured 

from ingesting a magnet a few weeks 

prior to the child’s death. According to 

the documents, by the time the recall 

was announced in March 2006, Rose Art 

had received over 1,500 complaints 

about magnets falling out of Magnetix 

pieces. 

19. The information eventually 

obtained by the Subpoena was required 

by statute to be included in Rose Art’s 

Full Report and supplemented on an 

ongoing basis thereafter. The firm’s 

failure to provide full complaint and 

incident data directly and detrimentally 

affected the staff’s ability to assess the 

hazard and implement an effective 

corrective action program 

commensurate with the risk created. 

20. Pursuant to section 19(a)(3) of the 

CPSA, 15 U.S.C. 2068(a)(3), it is 

unlawful to ‘‘* * * fail or refuse to 

* * * provide information * * * as 

required under this Act or rule there 

under.’’ Under section 19(a)(4) of the 

CPSA, 15 U.S.C. 2068(a)(4), it is 

unlawful to fail to furnish information 

required by section 15(b) of the Act. 

21. In failing to provide or furnish 

information as required under the CPSA 

and as set forth above, Mega Brands 

America ‘‘knowingly’’ violated sections 

19(a)(3) and (4) of the CPSA, 15 U.S.C. 

2068(a)(3) and (4), as the term 

‘‘knowingly’’ is defined in section 20(d) 

of the CPSA, 15 U.S.C. 2069(d). 

22. Pursuant to section 20 of the 

CPSA, 15 U.S.C. 2069, Mega Brands 

America is subject to civil penalties for 

failure to provide or furnish information 

in violation of section 19 of the CPSA, 

15 U.S.C. 2068. 

Response of Mega Brands America 

23. Mega Brands America and its 

parent, Mega Brands, contend that Mega 

Brands did not know of the Magnetix 

defects at the time Mega Brands 

acquired Rose Art in June 2005. 

Documentary evidence establishes that 

Rose Art’s prior owners knew, since at 

least late 2003 or early 2004, that there 

were design and manufacturing defects 

in Magnetix which caused magnets to 

detach. Rose Art’s prior owners have 

admitted under oath, at no point in time 

did they ever advise anyone at Mega 

Brands of the Magnetix problems. 

24. On May 24, 2005, when CPSC staff 

sent a letter requesting Rose Art to 

provide information concerning choking 

and near choking incidents involving 

Magnetix sets as well as ‘‘copies of all 

consumers or dealer complaints, 

including electronic records warranty 

claims and reports of injury related to 

the products being investigated 

[Magnetix]’’, Rose Art had the 

opportunity to disclose hundreds of 

incidents involving magnets coming 

loose, but it failed to do so. Notably, at 

that point in time, Rose Art was 

negotiating a civil penalty with CPSC 

for a reporting violation concerning 

another of its products, and was fully 

cognizant of its reporting obligations 

under the law. Mega Brands believes 

that had Rose Art disclosed all Magnetix 

consumer complaints in its response to 

the May 24, 2005 letter, the defect of 

magnets coming loose would have come 

to light much earlier. 

25. Mega Brands claims that once it 

learned these facts, it promptly agreed 

to a more comprehensive recall of the 

product, which occurred in April 2007. 

26. Nevertheless, Mega Brands 

America understands that, regardless of 

the reason, Rose Art and Mega Brands 

America failed to provide and/or 

furnish information to the CPSC as 

required under the CPSA. 

Agreement of the Parties 

27. The Commission has jurisdiction 

over this matter and over Mega Brands 

America under the CPSA. 

28. The parties enter this Agreement 

for settlement purposes only. The 

Agreement does not constitute an 

admission by Mega Brands America nor 

a determination by the Commission that 

Mega Brands America violated the 

CPSA’s reporting requirements. 

29. In settlement of the staff’s 

allegations, Mega Brands America 

agrees to pay a civil penalty of $1.1 

million ($1,100,000.00) in three 

installments. The first installment of 

$400,000 shall be paid within twenty 

(20) calendar days of service of the 

Commission’s final Order accepting this 

Agreement. The second installment of 

$350,000 shall be paid within three (3) 

months of service of the Commission’s 

final Order accepting this Agreement. 

The third and final installment of 

$350,000 shall be paid within six (6) 

months of service of the Commission’s 

final Order accepting this Agreement. 

Each payment shall be made by check 

payable to the order of the United States 

Treasury. 

30. The Commission agrees to take no 

further action involving Mega Brands 

America with respect to CPSC File Nos. 

CA080229 (Magtastik and Magnetix Jr. 

Pre-School Magnetic Toys) and 

CA070073 (MagnaMan-Magnetic Action 

Figures.) 

31. Upon provisional acceptance of 

this Agreement by the Commission, the 

Commission shall place this Agreement 

on the public record and shall publish 

it in the Federal Register in accordance 

with the procedures set forth in 16 CFR 

1118.20(e). In accordance with 16 CFR 

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Federal Register / Vol. 74, No. 78 / Friday, April 24, 2009 / Notices 18697 

1118.20(f), if the Commission does not 

receive any written requests not to 

accept the Agreement within 15 

calendar days, the Agreement shall be 

deemed finally accepted on the 16th 

calendar day after the date it is 

published in the Federal Register. 

32. Upon final acceptance of this 

Agreement by the Commission and 

issuance of the final Order, Mega Brands 

America knowingly, voluntarily and 

completely waives any rights it may 

have in this matter to the following: (i) 

An administrative or judicial hearing; 

(ii) judicial review or other challenge or 

contest of the validity of the 

Commission’s Order or actions; (iii) a 

determination by the Commission as to 

whether Mega Brands America failed to 

comply with the CPSA and the 

underlying regulations; (iv) a statement 

of findings of fact and conclusions of 

law; and (v) any claims under the Equal 

Access to Justice Act. 

33. The Commission may publicize 

the terms of the Agreement and Order. 

34. The Agreement and Order shall 

apply to, and be binding upon Mega 

Brands America and each of its 

successors and assigns. 

35. The Commission issues the Order 

under the provisions of the CPSA, and 

a violation of the Order may subject 

those referenced in paragraph 34 above 

to appropriate legal action. 

36. This Agreement may be used in 

interpreting the Order. Understandings, 

agreements, representations, or 

interpretations apart from those 

contained in the Agreement and the 

Order may not be used to vary or 

contradict their terms. The Agreement 

shall not be waived, amended, 

modified, or otherwise altered without 

written agreement thereto executed by 

the party against whom such waiver, 

amendment, modification, or alteration 

is sought to be enforced. 

37. If any provision of this 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 Mega Brands America 

determine that severing the provision 

materially affects the purpose of the 

Agreement and Order. 

MEGA BRANDS AMERICA, INC. 

Dated: 3/19/09 

By: lllllllllllllllllll

Vic Bertrand 

President 

Mega Brands America, Inc., 6 Regent Street, 

Livingston, NJ 07039 

By: lllllllllllllllllll

Michael J. Gidding 

Counsel for Mega Brands America, Inc. 

Brown & Gidding, P.C., 3201 New Mexico 

Avenue, NW., Washington, DC 20016 

U.S. Consumer Product Safety Commission 

Cheryl Falvey 

General Counsel 

Ronald G. Yelenik 

Assistant General Counsel 

Dated: 3/24/09 

By: lllllllllllllllllll

Michelle Faust Gillice 

Trial Attorney 

Division of Compliance, Office of the General 

Counsel 

In the Matter of: Mega Brands America, 

Inc. f/k/a Rose Art Industries, Inc.; 

Order 

Upon consideration of the Settlement 

Agreement entered into between Mega 

Brands America, Inc. (‘‘Mega Brands 

America’’) and the U.S. Consumer 

Product Safety Commission 

(‘‘Commission’’) staff, and the 

Commission having jurisdiction over 

the subject matter and over Mega Brands 

America, and it appearing that the 

Settlement Agreement and the Order are 

in the public interest, it is 

Ordered, that the Settlement 

Agreement be, and hereby is, accepted; 

and it is 

Further ordered, that Mega Brands 

America shall pay a civil penalty in the 

amount of $1.1 million ($1,100,000.00) 

in three installments. The first 

installment of $400,000 shall be paid 

within twenty (20) calendar days of 

service of the Commission’s final Order 

accepting this Agreement. The second 

installment of $350,000 shall be paid 

within three (3) months of service of the 

Commission’s final Order accepting this 

Agreement. The third and final 

installment of $350,000 shall be paid 

within six (6) months of service of the 

Commission’s final Order accepting this 

Agreement. Each payment shall be made 

by check payable to the order of the 

United States Treasury. Upon the failure 

of Mega Brands America to make any of 

the aforementioned payments when 

due, the total amount of the civil 

penalty shall become immediately due 

and payable, and interest on the unpaid 

amount shall accrue and be paid by 

Mega Brands America 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 l day 

of ll, 2009. 

BY ORDER OF THE COMMISSION: 

Todd A. Stevenson, Secretary 

U.S. Consumer Product Safety Commission 

Finally accepted and final Order issued on 

the l day of ll, 2009. 

BY ORDER OF THE COMMISSION: 

Todd A. Stevenson, Secretary 

U.S. Consumer Product Safety Commission 

[FR Doc. E9–9452 Filed 4–23–09; 8:45 am] 

BILLING CODE 6355–01–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

Defense Health Board (DHB) Meeting 

AGENCY: Department of Defense. 

ACTION: Notice of meeting. 

SUMMARY: Pursuant to the Federal 

Advisory Committee Act of 1972 (5 

U.S.C., Appendix as amended), the 

Sunshine in the Government Act of 

1976 (5 U.S.C. 552b, as amended), and 

41 CFR 102–3.150, and in accordance 

with section 10(a)(2) of Public Law, the 

following meeting of the Defense Health 

Board (DHB) is announced: 

DATES: May 7–8, 2009. 

May 7, 2009. 

7 a.m.–12 p.m. (Open Session). 

12 p.m.–2:15 p.m. (Administrative 

Working Meeting). 

2:15 p.m.–5:15 p.m. (Open Session). 

May 8, 2009. 

8 a.m.–2 p.m. (Closed Session). 

ADDRESSES: May 7, 2009, Ballroom, 

Sheraton Chrystal City Hotel, 1800 

Jefferson Davis Highway Arlington, VA 

22202. 

May 8, 2009 Industrial College of the 

Armed Forces, Fort McNair, 

Washington, DC. 

FOR FURTHER INFORMATION CONTACT: 

Commander Edmond F. Feeks, 

Executive Secretary, Defense Health 

Board, Five Skyline Place, 5111 

Leesburg Pike, Suite 810, Falls Church, 

Virginia 22041–3206, (703) 681–8448, 

EXT. 1228, Fax: (703)–681–3317, 

edmond.feeks@tma.osd.mil. Additional 

information, agenda updates, and 

meeting registration are available online 

at the Defense Health Board Web site, 

http://www.ha.osd.mil/dhb. The public 

is encouraged to register for the meeting. 

If special accommodations are required 

to attend (sign language, wheelchair 

accessibility) please contact Ms. Lisa 

Jarrett at (703) 681–8448 ext. 1280 by 

April 30, 2009. Written statements may 

be mailed to the above address, emailed 

to dhb@ha.osd.mil or faxed to (703) 

681–3317. 

SUPPLEMENTARY INFORMATION: 

Purpose of the Meeting: The purpose 

of the meeting is to address and 

deliberate pending and new Board 

issues and provide briefings for Board 

members on topics related to ongoing 

Board business. 

Agenda: On May 7, 2009, the Board 

will receive a briefing on Iraqi Health 

mstockstill on PROD1PC66 with NOTICES