The U.S. Consumer Product Safety Commission (CPSC) announced today that Battat Incorporated, of Plattsburgh, N.Y., has agreed to pay a civil penalty of $400,000. The penalty agreement (pdf) has been accepted provisionally by the Commission (4-0).
The settlement resolves CPSC staff allegations that Battat knowingly failed to report the defect and hazard associated with Magnabild Magnetic Building Sets to CPSC immediately, as required by federal law.
The Magnabild was a magnetic building set labeled for ages three and up. Small magnets inside the building pieces can fall out, and if found by young children, can be swallowed or aspirated. If more than one magnet is swallowed, the magnets can attract to each other, connect, and cause intestinal perforations or blockages, which can be fatal.
CPSC staff alleged that Battat received its first report of magnets coming loose from the Magnabild in October 2005. CPSC staff contacted Battat in July 2007. When the firm reported to CPSC on October 12, 2007, Battat had received 16 reports of magnets coming out of the Magnabild and two reports of children ingesting the non-magnetized steel balls.
CPSC staff alleges that Battat was aware of the dangers posed to children by the ingestion of magnets by this time, in part because of the March 2006 recall of the Rose Art Magnetix Building Set, which involved one death, four serious injuries, and 34 incidents involving small magnets.
Further, between November 2006 and July 2007, CPSC: 1) re-announced the Rose Art Magnetix Building Set recall due to additional serious injuries to children; 2) issued a "Magnet Safety Alert" warning parents of the risk of serious injury and death to children from magnet ingestion; and 3) announced five separate recalls for several million toys containing magnets due to the potential for magnet liberation.
CPSC staff alleges that Battat knew about the CPSC's efforts and the risks posed to children by the magnets falling out of the Magnabild and failed to report the dangerous defect immediately to the CPSC, as required by federal law. Despite being aware in April or May 2006 of the possibility that small magnets could cause intestinal injury, Battat did not report until October 2007 after three requests from staff. In that report, however, Battat failed to inform CPSC of the defect and resulting potential hazard in two additional models of the product.
Battat and CPSC announced a voluntary recall of 125,000 Magnabilds on January 23, 2008. The recall was expanded to include 7,000 more Magnabilds on March 13, 2008. Magnabilds were sold nationwide from August 2004 to February 2008 for between $20 and $40. There were no injuries associated with magnets falling out of the Magnabild.
Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.
In agreeing to the settlement, Battat denies CPSC staff allegations that its Magnabild toys could create an unreasonable risk of serious injury or death or contained a defect that could create a substantial product hazard, or that Battat violated the reporting requirements of the Consumer Product Safety Act.
Pursuant to the Consumer Product Safety Act, CPSC must consider the appropriateness of the penalty to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. Battat is a small business as set forth in the Small Business Administration guidelines regarding size of business.