Mega Brands America to pay $1.1 Million Civil Penalty for Reporting Violations

The U.S. Consumer Product Safety Commission (CPSC) announced recently that Mega Brands America Inc., of Livingston, N.J., formerly Rose Art Industries Inc., has agreed to pay a $1.1 million civil penalty. The penalty, which CPSC has provisionally accepted, settles allegations that Mega Brands America and Rose Art failed to provide the government with timely information about dangers to children with Magnetix magnetic building sets, as required under federal law.

In December of 2005, Rose Art filed an "initial report" with CPSC that a 22-month-old child from Washington state had died, due to ingesting multiple magnets that fell out of pieces from a Magnetix set. The report contained no other product or incident information and Rose Art attributed the magnets falling out to unusually abusive play by the toddler's older siblings. On Feb. 1, 2006, according to CPSC, Rose Art submitted a full report which again lacked incident and product information. Rose Art stated that it did not retain any complaint or incident records. On March 31, 2006, Rose Art voluntarily recalled nearly 4 million Magnetix sets for users under the age of six.

After discovering documents which led CPSC staff to believe Rose Art had compiled incident information, a subpoena was issued to the firm (which had been renamed Mega Brands America and was under new ownership and control) to obtain product and incident information. CPSC learned through the subpoena that at the time Rose Art filed its "initial report" in December 2005, it had received more than 1,100 consumer complaints that magnets had fallen out of plastic pieces from dozens of different Magnetix models. Additionally, the subpoena revealed that Rose Art had received at least one report of an injury due to magnet ingestion, prior to the toddler's death in Washington state.

By the time Rose Art agreed to the recall of Magnetix in March 2006, the firm had received more than 1,500 complaints of magnets falling out of plastic pieces in more than 65 different models of Magnetix. In April 2007, Mega Brands America expanded the recall of Magnetix sets for users of any age, after more than 25 children suffered intestinal injuries that required surgery to remove the magnets.

Federal law requires firms 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 violates any consumer product safety rule, or any other rule, regulation, standard, or ban enforced by CPSC.

In agreeing to settle this matter, Mega Brands America and its parent, Mega Brands Inc., of Montreal, Canada contend that 1) Mega Brands Inc. did not know of the Magnetix defect at the time it acquired Rose Art and 2) Rose Art's prior owners never advised Mega Brands Inc. of the problems of associated with Magnetix.

CPSC is strongly encouraging consumers to check to see if they have any of the recalled building sets and return them to Mega Brands for a free replacement toy--it is estimated that potentially millions of recalled units remain in homes today and are accessible to young children. For more information, click here.

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