US v. Toys" R" Us, Inc., Civ. A. No. 90-3315 (MTB).

• Decision Date: 09 January 1991
• Docket Number: Civ. A. No. 90-3315 (MTB).
• Citation: 754 F. Supp. 1050
• Parties: UNITED STATES of America, Plaintiff, v. TOYS "R" US, INC., Charles Lazarus and Michael Goldstein, Defendants.
• Court: U.S. District Court — District of New Jersey

754 F. Supp. 1050

UNITED STATES of America, Plaintiff, v. TOYS "R" US, INC., Charles Lazarus and Michael Goldstein, Defendants.

Civ. A. No. 90-3315 (MTB).

United States District Court, D. New Jersey.

January 9, 1991.

COPYRIGHT MATERIAL OMITTED

Stuart M. Gerson, Asst. Atty. Gen., Office of Consumer Litigation, Dept. of Justice, by David Levitt, Asst. U.S. Atty., Office of Consumer Litigation, Dept. of Justice, Washington, D.C., and Michael Chertoff, U.S. Atty., Newark, N.J. by Susan A. Casell, Asst. U.S. Atty., for plaintiff.

Shea & Gould, New York City by Michael S. Feldberg, and Zazzali, Zazzali, Fagella & Nowak, Newark, N.J. by Robert A. Fagella, for defendants.

OPINION

BARRY, District Judge.

I. INTRODUCTION

Plaintiff United States of America alleges that defendant Toys "R" Us, Inc. ("Toys `R' Us"), an importer, distributor, and retailer of children's toys and other articles; defendant Charles Lazarus ("Lazarus"), Chairman of the Board and Chief Executive Officer of defendant Toys "R" Us; and defendant Michael Goldstein ("Goldstein"), Executive Vice-President of defendant Toys "R" Us with supervisory responsibility, inter alia, for the importation and distribution of children's toys and other articles, violated the Federal Hazardous Substances Act ("FHSA"), 15 U.S.C. § 1261 et seq., and the Consumer Products Safety Act ("CPSA"), 15 U.S.C. § 2051 et seq.

Plaintiff now moves for an injunction,¹ pursuant to Federal Rule of Civil Procedure 65, prohibiting defendants from (1) introducing or delivering for introduction in interstate commerce, or receiving in interstate commerce and delivering or proffering delivery of children's toys and other articles which qualify as banned hazardous substances under the FHSA; and (2) offering for sale, distributing in commerce, or importing into the United States children's toys and other articles which are banned hazardous products as defined by the CPSA.² Defendants move for summary judgment, pursuant to Fed.R.Civ.P. 56, and for sanctions, pursuant to Fed.R.Civ.P. 11. For the reasons that follow, plaintiff's motion for an injunction will be denied and, because no further relief is sought, the complaint will be dismissed. Defendants' motion for sanctions will be denied, and defendants' motion for summary judgment will be denied as moot.

II. THE ALLEGED VIOLATIONS

Plaintiff alleges two violations of the CPSA and eleven violations of the FHSA. More specifically, it contends that defendants offered for sale, distributed in commerce, and imported into the United States (1) the "Music Maker;" and (2) the "Music Master Xylophone," musical children's toys that are coated with "lead-containing paint" and, thus, are banned hazardous products under the CPSA, in violation of 15 U.S.C. § 2068(a)(2). It contends, as well, that defendants introduced or delivered for introduction into interstate commerce or received in interstate commerce (1) the "Cutie Pie Deluxe Gift Set;" (2) "Pop Up Pals;" (3) "Sesame Street, Wind Up Ernie the Drummer;" (4) the "Pull Back Plane;" (5) the "Pull Back Train;" and (6) the "Pull Back Truck," a selection of children's toys that fail to comply with the CPSC's regulation concerning the production of small parts after prescribed use and abuse tests and, thus, comprise banned hazardous substances under the FHSA, in violation of 15 U.S.C. § 1263(a) & (c). Finally, plaintiff contends that defendants introduced or delivered for introduction into interstate commerce or received in interstate commerce (1) the "Crib Pals Shake & Twist Rattle;" (2) the "Crib Pals Kitty Cat Lion Rattle;" (3) the "Crib Pals Tiny Tinkers 3 Piece Rattle Set" of which the "Crib Pals Tiny Tinkers Rattle Copter" is a part; (4) the "Baby Toy `Wooden Shaky Head' Rattle;" and (5) "Crib Pals Play Shapes," an assortment of rattles that fail to comply with the test criteria for rattles as promulgated by the Consumer Products Safety Commission ("CPSC") and, thus, constitute banned hazardous substances under the FHSA, in violation of 15 U.S.C. § 1263(a) & (c).

Where, as here, an injunction is sought pursuant to statutory provisions, the movant must establish (1) a violation of the statute sued upon; and (2) a reasonable likelihood of future violations of the statute in the absence of injunctive relief. United States v. Focht, 882 F.2d 55, 57 (3d Cir. 1989).

A. Statutory Violations

1. Consumer Products Safety Act

A person violates the CPSA by "manufacturing for sale, offering for sale, distributing in commerce, or importing into the United States any consumer product which has been declared a banned hazardous product by a rule under this chapter." 15 U.S.C. § 2068(a)(2). Any children's toy or related article bearing "lead-containing paint"—i.e. "paint ... containing lead or lead compounds and in which the lead content (calculated as lead metal) is in excess of 0.06 percent by weight of the total nonvolatile content of the paint or the weight of the dried paint film," 16 C.F.R. § 1303.2(b)(2)—constitutes a banned hazardous product under the CPSA. 16 C.F.R. §§ 1303.1(a)(1) & 1303.4(b). Defendants do not dispute laboratory reports submitted by plaintiff which indicate that the "Music Maker" and the "Music Master Xylophone," toys imported into the United States and offered for sale and distributed in commerce by defendant Toys "R" Us, were covered with paint containing in excess of 0.06% lead by weight in a dry paint film. See Nelson Decl. at Exhs. 19 & 21.

Instead, defendants rely upon a statutory exception to 15 U.S.C. § 2068(a)(2). Subsection (a)(2) does not apply to

any person ... who holds a certificate issued in accordance with section 2063(a) of this title to the effect that such consumer product conforms to all applicable consumer product safety rules, unless such person knows that such consumer product does not conform....

15 U.S.C. § 2068(b). Therefore, 15 U.S.C. § 2068(a)(2) is inapplicable where the alleged violator, in addition to lacking actual knowledge of non-compliance with the safety rules, possesses a certificate which

shall certify that such product conforms to all applicable consumer product safety standards, and shall specify any standard which is applicable. Such certificate shall accompany the product or shall otherwise be furnished to any distributor or retailer to whom the product is delivered. Any certificate under this subsection shall be based upon a test of each product or upon a reasonable testing program; shall state the name of the manufacturer or private labeler issuing the certificate; and shall include the date and place of manufacture.

15 U.S.C. § 2063(a).

Defendants do not hold certificates for the "Music Maker" and the "Music Master Xylophone" which meet the detailed requirements of 15 U.S.C. § 2063(a). Indeed, the "certificates" proffered by defendants are merely generic form letters which address some, but not all, of the concerns of the statute. Compare Carey Aff. at Exh. C with Carey Aff. at Exh. B and Nelson Decl. at Exh. 23. Although the "certificates" certify that items referenced on certain numbered purchase orders—which apparently correspond to shipments of these musical toys³—meet or surpass all applicable CPSC standards, they provide only this blanket representation and fail to specify compliance with the Lead-Containing Paint Regulation or, for that matter, any other applicable safety regulation. Moreover, these "certificates" fail to include the date and place of manufacture of the "Music Maker" and "Music Master Xylophone" toys shipped to defendant Toys "R" Us. Defendants' "certificates" are insufficient to trigger the statutory exception to § 2068(a)(2) and, thus, plaintiff has established that the "Music Maker" and "Music Master Xylophone" are banned hazardous products under the CPSA.

2. Federal Hazardous Substances Act

A person violates the FHSA by "introducing or delivering for introduction into interstate commerce ... or receiving in interstate commerce any ... banned hazardous substance." 15 U.S.C. § 1263(a) & (c). Defendants do not dispute that the eleven children's toys or articles alleged by plaintiff to be banned hazardous substances under the FHSA were introduced or delivered for introduction into interstate commerce or were received in interstate commerce by defendant Toys "R" Us.

a. Non-Rattle Toys: Small Parts Regulation

Any toy or other article that is intended for use by children under three years of age and presents a choking, aspiration or ingestion hazard because of small parts is a "banned hazardous substance" under the FHSA. 16 C.F.R. § 1500.18(a)(9). A children's toy is deemed a choking, aspiration or ingestion hazard where it fits, without compression, entirely within a cylinder that has a diameter of one and one-quarter inches and a depth which slopes at a 45° angle from one inch to two and one-quarter inches. 16 C.F.R. § 1501.4(a) & (b)(1). If the toy does not fit entirely within the cylinder, it will be subjected to the "use and abuse" tests of 16 C.F.R. §§ 1500.51 & 1500.52. 16 C.F.R. § 1501.2(b)(2). Any components or pieces of that toy that become detached during "use and abuse" testing and which fit entirely within the cylinder render the entire toy a choking, aspiration or ingestion hazard. Id.

The "use and abuse" battery of tests (i.e. impact test, bite test, flexure test, torque test, tension test and compression test) simulate the normal and reasonably foreseeable use, damage or abuse of the toy or other article by a child in the age group for which that toy or article is intended. 16 C.F.R. §§ 1500.51(a) & 1500.52(a). Consequently, the impact test for toys intended for use by children 18 months of age or less requires the toy to be dropped 10 times from a height of 4.5 feet plus or minus 0.5 inch, 16 C.F.R. § 1500.51(b)(3), and is more rigorous than the impact test for toys intended for use by children over 18 but less than 36 months which mandates 4 drops from a height of 3 feet plus or...