Graco agrees to pay $4 million to settle charges of alleged product reporting violations
(Washington-AP, Mar. 22, 2005 1:10 PM) _ Graco Children's Products Inc. has agreed to pay a record $4 million to settle charges that it belatedly reported problems with car seats, high chairs, strollers and other products that resulted in hundreds of injuries and at least six deaths.
The company also is recalling 1.2 million Graco Toddler Beds sold nationwide from 1994 to 2001. The beds are linked to scores of injuries, including more than a dozen broken bones, caused when children's limbs were trapped in the bed's guard rails or footboard.
The civil penalty is the largest ever imposed by the Consumer Product Safety Commission, which planned to announce the settlement and recall Tuesday.
The penalty was sizable because of "the number of consumer products and the egregiousness of the failure to report," CPSC Chairman Hal Stratton said in an interview.
Under federal law, companies must immediately inform the commission after discovering any product defects that pose injury risks or violate federal safety standards. That time limit typically is interpreted as 24 hours.
But the safety agency said Graco and its subsidiary, Century Products, failed to immediately report defects in 16 different products sold from 1991 to 2002. Stratton could not say when his agency first learned of possible reporting violations.
The products -- more than 12 million in all -- included car seats, infant carriers, high chairs, strollers, swings and beds.
The products have been subject to seven recalls since 1997, including Tuesday's. The commission said it expects to announce two more Graco recalls soon.
The six deaths were linked to Graco Infant Swings, 7 million of which were recalled in April 2000 after reports that babies could fall out of the seat's leg openings or get trapped in them. More recently, 140,000 Graco Travel Lite Infant Swings were recalled in July after the company received 100 reports of children slipping out of faulty seat belts and sustaining injuries such as bloody lips, bumps and bruises.
Acquired by Rubbermaid in 1996, Exton, Pa.-based Graco is now a subsidiary of Newell Rubbermaid Inc., formed in 1999.
In a statement, Graco denied knowingly violating CPSC reporting requirements. It noted the penalty "pertains to a time prior to Newell's acquisition" of Graco, when the company was under a different executive management team, and before implementation of systems "that will ensure that this will not occur moving forward."
Stratton credited the new ownership team with helping to bring the problems to light and cooperating with federal regulators.
The penalty more than doubles the previous high of $1.75 million paid in 2001 by baby products maker Cosco Inc. and sister company Safety 1st to settle charges of not reporting product defects.
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On the Net:
Consumer Product Safety Commission: http://www.cpsc.gov
Graco Children's Products Inc.: http://www.gracobaby.com
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