UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
July 12, 1985
UNITED STATES OF AMERICA, Plaintiff, against ARTICLES OF BANNED HAZARDOUS SUBSTANCES CONSISTING OF 1030 GROSS (MORE OR LESS) OF BABY RATTLES, Defendants
The opinion of the court was delivered by: GLASSER
FINDINGS OF FACT AND CONCLUSIONS OF LAW
GLASSER, United States District Judge:
The United States seized defendant baby rattles on November 16, 1983, on the grounds that they violate standards established by the rattle regulations, 16 C.F.R. Pt. 1510 (1985), enacted under Federal Hazardous Substances Act (FHSA), 15 U.S.C. § 1261 et seq., and are therefore banned hazardous substances. 15 U.S.C. § 1261(q)(1)(A). The government seeks destruction of the rattles. Claimant M. Pressner & Co., the importer and distributor of the defendant rattles, challenges the seizure, arguing that the rattle regulations do not cover these items. Alternatively, claimant argues that even if the rattles are banned hazardous substances, they may be exported under the FHSA. 15 U.S.C. §§ 1264(b), 1265(a). Claimant requests the return of the rattles so that it may export them.
For the reasons discussed below, I find that the defendants are "rattles" covered by the rattle regulations. Moreover, I find that defendants do not meet the standards set by the rattle regulations and are therefore banned hazardous substances under the FHSA. In addition, because the rattles will be no less hazardous abroad than they are in this country, and because there is no statutory authority mandating the export order sought by claimant, there is every reason to respect the express policy of the Consumer Products Safety Commission (CPSC) prohibiting export of products that violate FHSA standards or regulations if they have moved or been sold in domestic commerce. The rattles are therefore condemned and must be destroyed. Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, I hereby make the following findings of fact and conclusions of law.
I. Findings of Fact
Claimant M. Pressner & Co. is an importer and manufacturer of novelties and party goods. Tr. 47. During the late 1970s, it began importing and distributing in domestic commerce the two types of rattles that are defendants in this action. Id. One, claimant's model no. 56896, is a plastic, 2 1/2 inch ball and stem rattle of the traditional "lollipop" design. Tr. 49 (stipulation of parties). The other rattle, marketed by claimant as model no. 03456, is 2 inches long and has a heart-shaped head and a ring handle. During the years 1980-82, it was advertised in the "Toy" Section of claimant's catalogs, which contain separate sections for toys and party goods. Tr. 50, 57. Both models make noise when shaken. They were sold to craft and party supply stores, Tr. 53, for use as favors or tie-on decorations in corsages, on gifts, and on cakes. Tr. 50-51, 56. The party goods retailers either sold the items directly to consumers or attached them to corsages, cakes, etc., before sale. Claimant's Proposed Findings of Fact at 2.
In August and September 1982, the CPSC collected five rattle samples from claimant's warehouse in Brooklyn and from a party goods store in Mt. Vernon that is one of claimant's customers. The CPSC subsequently informed claimant, in a letter dated October 19, 1982, that of the four samples that fell within the scope of the regulations,
all failed to meet the test criteria set forth in 16 C.F.R. § 1510.3. The CPSC requested that claimant recall the lollipop shaped model (no. 56896) because it was more likely to be given to children, Tr. 12-13, and that claimant cease distributing the other three models.
In response, claimant asserted both that the rattle regulations did not apply to the samples and that the rattles did not pose the impaction or choking hazards that the regulations were designed to remedy. Letter of Aaron Locker to CPSC, November 8, 1982. On November 15, 1983, the government brought this action, seeking a decree of condemnation under 15 U.S.C. § 1265(a). Pursuant to an arrest warrant in rem, the United States Marshal seized defendant rattles at claimant's warehouse on the following day. At the time of the seizure, defendants were not marked for export. See Claimant's Proposed Findings of Fact, P 11 (claimant intended to mark cartons for export).
Claimant continued to advertise one of the rattle models that are the subject of this suit, and to sell both models in interstate commerce, for approximately two months after it received the Commission's November 1982 letter. Tr. 64; Plaintiff's Exhibits 2(A)-2(K), 2(N)-2(S). Claimant agreed to stop distributing the rattles after it was informed that it would not have to recall the lollipop-shaped model. Tr. 63.
Nevertheless, claimant made four shipments of the rattle models after that date -- two to Puerto Rico on January 21 and August 24, 1983; one to Aruba, outside the Continental United States, on April 22, 1983; and one to Massachusetts on October 4, 1983. Tr. 66. Claimant did not inform the CPSC of the export shipment to Aruba. Tr. 66-67.
There is ample evidence to support a finding that defendant rattles moved or were offered for sale in domestic commerce during 1983, prior to seizure.
Claimant advertised the rattles in its catalogs for 1980-1982, thereby offering them for sale. The fact that the rattles may have been dropped from the 1983 catalog
does not rebut the inference that the rattles moved and were offered for sale in commerce, in view of the number of actual shipments made during 1983, including one just a month before defendants were seized. See Plaintiff's Exhibit 2(T).
In a letter dated May 17, 1984, claimant's President, Jerry Pressner, informed the Commission that the company intended to export the attached rattles to Venezuela, but said that it would not do so until this Court lifts the attachment order and permits the export. Claimant's Exhibit E. At that time, claimant also marked the rattles for export, to the extent that it was able to do so under the attachment order. Id.
II. Conclusions of Law
The first question presented is whether the seized rattles fall within the scope of the FHSA and the rattle regulations promulgated under that statute. The Act includes in its definition of a hazardous substance, "[a]ny toy or other article intended for use by children which the Commission by regulation determines . . . presents an electrical, mechanical, or thermal hazard." 15 U.S.C. § 1261(f)(1)(D) (1985). Toys or other articles intended for use by children that are hazardous substances under the Act are automatically banned from interstate commerce. Id. §§ 1261(q)(1)(A), 1263(a).
The rattle regulations, promulgated under the authority of 15 U.S.C. § 1262(e), define a rattle as "an infant's toy intended to be hand held, usually containing pellets or other small objects and which produces sounds when shaken." 16 C.F.R. § 1510.2 (1985).
The regulations were based on the results of investigations by the CPSC and the Canadian Consumer Commission into choking incidents among infants. Background Information to Proposed Rule, 42 Fed. Reg. 59,511 (1977). Some of these incidents were caused by "layette" and "tie-on" rattles used to decorate gifts. Tr. 6-7.
After concluding that rattles of certain sizes an designs could be sucked into and lodge in an infant's throat, thus causing choking or suffocation, the CPSC established size limits for rattles sold in the marketplace. Under 16 C.F.R. § 1510.3, a rattle that enters and penetrates the full depth of the oval cavity of a rattle test fixture fails to meet CPSC standards.
The CPSC found that the rattles most commonly associated with injuries were approximately four inches long and shaped like telephone receivers, barbells, clothespins, and safety pins, as well as the traditional lollipop design. Background Information to Proposed Rule, 42 Fed. Reg. 59,511 (1977). In its final rule, however, the Commission did not limit the scope of the regulations to the previously identified sizes and shapes because it concluded that rattles of different shapes and sizes posed identical hazards. 43 Fed. Reg. 22,004 (1978). In August 1983, the CPSC issued a Consumer Product Safety Alert warning that rattles sold as novelty items posed choking hazards and that distributors had been advised that they were banned hazardous substances under the Act. Plaintiff's Exhibit 13. The warning, which urged consumers to destroy all such rattles in their possession, illustrated three types of rattles ranging between 2 1/2 and 4 1/2 inches in length. One of the rattles depicted in the warning appears to be identical to defendant model no. 56896.
Claimant does not dispute that that the two seized models penetrate the rattle test fixture and therefore do not comply with the regulations. It argues, instead, that the regulations are not applicable because they cover only infants' toys and exclude items not "commonly understood" to be rattles. Claimant's Proposed Conclusions of Law, P 3. Claimant contends that defendant rattles are not toys intended to be used by children but party favors or decorations meant for use as package tie-ons or to decorate cakes, corsages, and petit-fours. Claimant's Proposed Findings of Fact, P 4. Claimant says that it has never sold the rattle directly to toy stores. Id. P 5. Neither has it received any complaints alleging that what it has sold as party favors or decorations have been used as rattles or have caused injuries to infants. Id. P 7. Moreover, claimant notes, the CPSC cannot state that there have been injuries associated with the particular rattles claimant distributes. Id. Stipulation of parties, P 1; see also Tr. 17-18. Therefore, Pressner concludes, the rattles re not used as toys by children. Claimant's Proposed Conclusions of Law, P 5.
Finally, according to the claimant, the determination whether objects are "toys intended to be used by children" for purposes of the FHSA should be governed by the manufacturer's intent. Id. P 4. That is, objects are not toys or other articles intended for use by children if the person or entity who put them into commerce did not intend, based on his knowledge of the marketplace and the objects' foreseeable use, that they would be used as toys or otherwise used by children. Claimant therefore argues that because it intended defendant rattles to be used only as party favors, etc., they do not fall within the scope of the regulations.
Assuming the validity of claimant's contention, its catalog advertisement of one of the rattle models in the "Toy" section indicates that claimant intended at least in part to market defendants as toys. More damaging to claimant's argument, however, is the language of the FHSA itself, which nowhere speaks specifically of the manufacturer's subjective intent. Instead, the FHSA merely defines a hazardous substance as "[a]ny toy or other article intended for use by children" which are found by the Commission to present electrical, mechanical or thermal dangers that make them hazardous to children. 15 U.S.C. § 1261(f)(D). The only rational interpretation of the word "intended" in the statute calls for an objective test of intent: whether a reasonable person would believe that the object is a toy or article intended for use by children. Under such a test, the defendant rattles must be considered toys or articles intended for use by children.
The subjective interpretation of intent urged by claimant could seriously diminish the effectiveness of FHSA because it would enable a manufacturer to introduce dangerous article into commerce on the unreasonable but good faith belief that the articles would not be used by children. Such a result could not possibly comport with the intent of Congress in enacting the FHSA.
This conclusion is confirmed by the CPSC regulations. In promulgating the regulations at 16 C.F.R. Pt. 1510, the CPSC has determined that objects like defendants here fail within the scope of the FHSA. Because these objects look and sound like rattles, they may be given to children to play with, and therefore pose the dangers of choking and suffocation which the regulations seek to avoid. Tr. 13 (testimony of Christine Nelson, CPSC compliance officer). Moreover, these hazards are beyond the ability of the manufacturer or distributor to control. In warning consumers about the dangers of party favor rattles, the CPSC considered the likely hazard to children irrespective of the intent of the entity that put the rattles into commerce. Any other construction of the authority granted to the Commission under the Act would violate its purpose of protecting the public from hazardous substances, whatever their source. Because the interpretation of a statute by the agency charged with its administration is generally accorded "great deference," Udall v. Tallman, 380 U.S. 1, 16, 13 L. Ed. 2d 616, 85 S. Ct. 792 (1965), I see no reason to disturb the CPSC'S judgment that defendants are "toys or other articles intended for use by children," 15 U.S.C. § 1261(f)(1)(D), and therefore subject to regulation under the FHSA.
Having concluded that defendants are "rattles" within the meaning of the FHSA and its regulations, I must next consider whether defendants violate the applicable standards. This issue is not contested. Tr. 43. Both plaintiff and claimant agree that because defendants penetrate the full depth of the rattle test fixture, 16 C.F.R. § 1510.4, they are not in compliance with the regulation. Accordingly, I conclude that defendants are "banned hazardous substances" under the FHSA. 15 U.S.C. 1261(q)(1)(A).
The second issue before the court is whether, as claimant urges, the rattles may be exported, even though they are banned from domestic interstate commerce. The FHSA makes the introduction of a banned hazardous substance into interstate commerce a "prohibited act," 15 U.S.C. § 1263(a), punishable by a fine or imprisonment, id. § 1264(a), and subjects the substances to seizure and condemnation. 15 U.S.C. § 1265(a). However, the FHSA exempts these substances from seizure and condemnation if they re intended for export. Id.
Under amendments passed in 1978, the FHSA further requires that the exporter notify the CPSC of its intention to export such substances not less than 30 days before export, so that the Commission may inform the foreign government why the items do not comply with the FHSA and hence are barred from sale in this country. 15 U.S.C. § 1273(d); 16 C.F.R. § 1019. The FHSA's penalty provisions provide a similar exemption to persons who ship hazardous substances for export. 15 U.S.C. § 1264.
However, that exemption does not apply "if such hazardous substance [was] sold or offered for sale in domestic commerce." Id.
Claimant does not deny that it shipped rattles in interstate commerce after the Commission informed it that the rattles were banned hazardous substances. Tr. 59. It is fair to conclude, both from these sales and from the advertisement in claimant's catalog, that defendant rattles were sold or offered for domestic sale. In addition, claimant concedes that it did not inform the Commission in advance of its shipment to Aruba in April 1983. Tr. 66-67. It acknowledges that it first notified the CPSC of its intention to export defendants in May 1984, after they had been seized and this action commenced. Stipulation of parties, P 2.
Nevertheless, claimant argues that the Act is silent on when the intention to export must arise and therefore does not preclude exportation of the banned rattles.
Claimant asks this Court to adopt, for noncomplying products under the FHSA, the export policy recently established for products under the Flammable Fabrics Act (FFA), which is also administered by the CPSC. The FFA policy permits the export of noncomplying products even if they have been distributed, sold, or offered for sale in domestic commerce. In re Imperial Carpet Mills, Inc., CPSC No. 80-2 (July 7, 1983); 49 Fed. Reg. 39,669 (Oct. 10, 1984) (revoking 16 C.F.R. Pt. 1602).
Apart from the fact that claimant has committed two prohibited acts under the FHSA,
the Commission's recently affirmed policy statement on the export of products that do not comply with regulations under the FHSA squarely precludes the relief claimant seeks. In May 1984, the Commission voted to continue its ban against the exportation of noncomplying, misbranded, and banned products subject to regulation under the Consumer Products Safety Act (CPSA) and FHSA. 49 Fed. Reg. 39667 (Oct. 10, 1984) (codified at 16 C.F.R. Pt. 1010).
The policy applies only to products that are the subject of consumer product safety standards or banning rules under the CPSA, and to "misbranded" and "banned" hazardous substances as defined in the FHSA. 16 C.F.R. § 1010.1(b)(1), (3). Under the policy statement, if any of these banned substances are sold or offered for sale at any time in domestic commerce, they may not be exported. Id. § 1010.1(b)(2), (4).
The Commission's policy statement is a reasoned interpretation of the language of the FHSA. It is consistent with the intent of Congress as expressed in § 1264(b). It supports the goals of encouraging domestic manufacturers and distributors to market only products that comply with the regulations under the FHSA and of preventing the re-introduction into domestic commerce of non-complying products. It is expressly limited to products that are regulated under the FHSA and designated as misbranded or banned hazardous substances. Because rattles are specifically regulated under the FHSA, and noncomplying rattles are deemed to be banned hazardous substances, 15 U.S.C. § 1261 (q)(1)(A); 16 C.F.R. Pt. 1510, the export policy clearly applies to defendants if they were sold or offered for sale in domestic commerce at any time. Claimant concedes that it did sell the rattles both within and outside the continental United States and I have found that these rattles were offered for sale in domestic commerce. Claimant is not, therefore, entitled to any of the exemptions under the Act for products intended for export. Accordingly, the rattles must be, and hereby are, condemned.
As noted above, the FHSA provides that after a decree of condemnation, the banned hazardous substances may be either destroyed or returned to the claimant for destruction or to bring them into compliance. 15 U.S.C. § 1265(c). Because claimant has not shown how it could make defendant rattles comply with the regulations, I order that the rattles be destroyed.