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Mattel, Fisher-Price get record $2.3M fine in lead-paint toy recalls

WASHINGTON - Mattel Inc. and its Fisher-Price subsidiary agreed Friday to pay a $2.3-million civil penalty for importing and selling toys that contained excessive levels of lead, a violation of a 30-year-old federal ban on lead paint in toys.

The penalty is part of an agreement that the companies reached with the Consumer Product Safety Commission and stems from a series of recalls in 2007 involving about 95 Mattel and Fisher-Price toy models, including Barbie doll accessories and Go Diego Go! products.

Mattel, of El Segundo, and Fisher-Price, of East Aurora, N.Y., deny having knowingly violated the law.

The commission said the civil penalty was the highest for violations involving importation or distribution of a regulated product and was the third-highest of any kind in the agency's history. The fine is tiny compared with Mattel's revenue of $5.92 billion in 2008.

Shares of Mattel fell 11 cents to $16.35.

Mattel imported as many as 900,000 toys between September 2006 and August 2007 that violated federal rules on lead levels and distributed most to retail stores for sale to U.S. consumers, the commission said. Fisher-Price imported as many as 1.1 million noncompliant toys between July 2006 and August 2007; most of the toys were distributed to retail stores.

"This penalty should serve notice to toy makers that CPSC is committed to the safety of children, to reducing their exposure to lead and to the implementation of the Consumer Product Safety Improvement Act," said Thomas Moore, acting chairman of the commission.

Mattel said in a statement Friday that it had taken several steps to enhance its product compliance procedures "to confirm that every Mattel toy is safe for children."

"Today's settlement announcement by the U.S. CPSC resolves Mattel's outstanding issues with the agency related to certain matters that arose in 2007," the toy maker said. "Mattel continues to be vigilant and rigorous in ensuring the quality and safety of our toys."

Lead can be toxic if ingested and is considered particularly dangerous for children, whose brains and nervous systems are more sensitive to the effects of lead. The consequences can include learning disabilities and decreased intelligence.

After the spate of recalls in 2007 of toys that had dangerous levels of lead or posed choking hazards, Congress last year passed the first overhaul of consumer protection laws in almost two decades. Earlier this year the commission delayed the regulation by a year.

The regulation was to have taken effect Feb. 10, but in late January the agency voted 2-0 to delay the requirement for a year after 67 business associations predicted "widespread bankruptcies" because of the costs and confusion about the tests.

"The commission believes that the stay will give us time to promulgate rules addressing some of the confusion over the meaning of the law, address appropriate exclusions and exemptions, and put appropriate testing protocols in place," Commissioner Nancy Nord wrote to lawmakers Friday night.

While previous regulations included limits on lead, the new law toughened the standard, increased penalties to as much as $15 million and expanded its reach to all products for children 12 and younger.

That expansion ensnared makers of products such as bicycles and books that aren't strictly toymakers, and the agency's top lawyer ruled that all products on store shelves - not just those made after the Feb. 10 deadline - would have had to follow the new rules.

The National Association of Manufacturers and other industry associations, which represents companies including the nation's largest toymakers, Mattel Inc., and Hasbro Inc., wrote in a letter to the agency this week that the law might cause "massive economic dislocation. " There is "the potential for widespread bankruptcies," the letter said.

In a news release, the commission said the delay of enforcement "provides some temporary, limited relief to the crafters, children's garment manufacturers and toymakers who had been subject to the testing and certification. These businesses will not need to issue certificates based on testing of their products until additional decisions are issued by the commission."

This story was supplemented with Newsday database information.

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