E&B Giftware Agrees to $550K Fine for not Reporting Exercise Ball Defect
The Consumer Product Safety Commission is seeking comments on a provisionally-accepted Settlement Agreement with E&B Giftware LLC which includes a civil penalty of $550,000, with an agreement to suspend a portion of that penalty if certain conditions are met. The agreement would settle staff allegations that E&B Giftware failed to immediately notify CPSC of a defect in certain exercise balls that it imported and distributed for several years, as required by federal law.
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Any interested person may ask CPSC not to accept this agreement or otherwise comment on its contents by filing a written request by January 6, 2012.
Did not Immediately Report Bursting Defect Despite Injury Complaints
Staff alleges that between January 2000 and October 2008, E&B Giftware imported and distributed approximately three million of the subject exercise balls under the following brand names: Bally Total Fitness, Everlast, Valeo, and Body Fit Fitness Balls. According to CPSC, the exercise balls are defective because they can rupture and/or explode when overinflated by consumers, thereby posing a falling hazard to consumers.
E&B Giftware received its first report of an incident involving a burst exercise ball in January 2004. By 2007, the company knew of approximately 25 reports of incidents, 20 of which were alleged to have caused various injuries, most of them minor. Despite being aware of this information, E&B Giftware did not report to the CPSC until October of 2008 by which time, it was aware of at least 44 reports of bursting exercise ball incidents.
In April 2009, CPSC staff and E&B Giftware agreed that the company would revise its existing warning labels to consumers advising against overinflating the exercise balls. No other changes to the label, warnings, or instructions, or to the specifications, composition, or manufacturing process were recommended.
In failing to inform the Commission about the defect immediately, staff alleges that E&B Giftware knowingly1 violated the reporting requirements of sections 15(b)(3) and (4) of the Consumer Product Safety Act.
CPSC to Suspend $50K of Penalty if Evidence Provided of Reporting Program
The settlement includes a civil penalty of $550,000, of which $50,000 is suspended as long as E&B Giftware provides CPSC with evidence, within 20 days of the agreement becoming final, of a program to comply with CPSC’s reporting requirements, including Standard Operating Procedures and training materials.
Settlement Becomes Final Jan 7 if no Adverse Comments Received
If CPSC does not receive any written request not to accept the Agreement within 15 calendar days, the Agreement shall be deemed finally accepted on the 16th calendar day after the date it is published or on January 7, 2012.
(The settlement does not constitute an admission of violation by E&B Giftware or a determination by CPSC that E&B Giftware violated the reporting requirements.)
1Under CPSC’s statute, the term "knowingly" means: (1) the having of actual knowledge, or (2) the presumed having of knowledge deemed to be possessed by a reasonable man who acts in the circumstances, including knowledge obtainable upon the exercise of due care to ascertain the truth of representations.
CPSC press release, dated 12/19/11, available here.
CPSC contact -- Regan Sweeney (301) 504-7831
(FR Pub 12/22/11, D/N 12-C0005)