United States v. Chaffee Heights Professional Pharmacy, Inc., et al, Civil No. 76-M-395 (D. Colo.). This action for an injunction under the Federal Food, Drug and Cosmetic Act (F, D and C Act) was the Commission's first effort to enjoin violations of the Poison Prevention Packaging Act (PPPA). After Commission investigation of a consumer complaint that this Denver pharmacy had dispensed prescription drugs without child-resistant closures, the United States on behalf of the Commission filed for a permanent injunction against Chaffee. The complaint, alleging several violations of the F, D and C Act and the PPPA, was filed on April 13, 1976. The case was not tried because Chaffee stipulated to the entry of a consent judgment which was entered by the District Court for the District of Colorado on September 13, 1976.

United States v. Rite Aid Corporation, et al., Civil No. 76-3246 (E.D. Pa.). Rite Aid operates 372 pharmacies in 13 states. After an extensive investigation by the Commission, the United States on behalf of the Commission sued for a permanent injunction under the Federal Food, Drug and Cosmetic Act to restrain Rite Aid from dispensing prescription drugs without child-resistant closures in violation of the Poison Prevention Packaging Act. The complaint, alleging numerous violations of the F, D and C Act and the PPPA, was filed on October 19, 1976. There was no trial or adjudication of the issues, as Rite Aid stipulated to the entry of a consent judgment which was entered on September 7, 1977, by the District Court for the Eastern District of Pennsylvania.

United States v. Morton-Norwich Products, Inc., Civil No. CV 77-0174-D (E.D. Ill), doing business at Texize Chemicals Company. Morton-Norwich Company manufactures and sells household cleaners nationwide. On September 23, 1977, the United States, at the request of the Commission, filed a complaint for permanent injunction against Morton-Norwich in which it is alleged that three of its Texize products are misbranded hazardous substances because of labeling deficiencies that violate the Federal Hazardous Substances Act and regulations issued thereunder. A trial date has not been set.

United States v. Willard Schoenfeld, Inc., et al. Civil No. C-77-0141 (N.D. Cal.). On January 19, 1977 a complaint for injunction was brought in the United States District Court for the Northern District of California against Willard Schoenfeld. Inc., a corporation, and Willard Schoenfeld, an individual. The complaint alleged three separate labeling violations of the Federal Hazardous Substances Act involving the products "Soda ash", "TSP" and "Tilex". The case was settled on March 7, 1977, upon the entry of judgment of a permanent injunction by consent. Consumer Product Safety Commission v. United Paint Manufacturing, Inc., et al, Civil No. C-77-272 (E.D. Wash.). On September 29, 1977, the Commission filed a case in its own name for the first time under Section 27(b) (7) of the Consumer Product Safety Act. The complaint for an injunction alleged several violations of the Federal Hazardous Substances Act. The alleged violations included failure to state signal words such as "DANGER", and cautionary statements, such as "Harmful or Fatal if Swallowed", on labels for products containing hazardous substances and also, packing print containing more than 0.5% lead by weight. There was no trial or adjudication of the issues and defendants admitted no violations; they stipulated for the entry of a consent judgment which was subsequently entered on September 30, 1977.

CRIMINAL PROSECUTIONS

United States v. Glenn Paint Company and Glenn A. Godsey, Criminal No. CR76-0113L (W.D. Ky.). This action involved a two-count criminal information brought in Louisville, Kentucky against Glenn Paint Company, a partnership, and Glenn A. Godsey, the managing partner, for repackaging mineral spirits (a "hazardous substance") without the required hazard labeling on the containers, in violation of Section 4(b) of the Federal Hazardous Substances Act. Both defendants entered pleas of guilty to each count on August 5, 1976, and were placed on unsupervised probation for one year after imposition of sentence was suspended. United States v. Gable-Tite Products Co., Inc., Criminal No. 76399-Cr-NCR (S.D. Fla.). This case involved a three count criminal information brought in Miami, Florida against Gable-Tite Products Co., Inc. for misbranding acetone and mineral spirits while held for sale after receipt in interstate commerce, in violation of the Federal Hazardous Substances Act. On October 15, 1976, the defendant pled guilty to one account and was fined $200. The remaining two counts were dismissed.

United States v. Fitzgerald Enterprises, Inc. and Michael E. Fitzgerald, Criminal No. 3-76-1806-M-G (N.D. Cal.). Fitzgerald involved a one-count information

brought in San Francisco, California against Fitzgerald and Michael E. Fitzgerald, its principal officer, for failing to place appropriate warning statements of the principal hazard on the main panel label of the containers of a product containing toluene in violation of the Federal Hazardous Substances Act. Michael E. Fitzgerald pled guilty and was sentenced, on December 1, 1976 to pay a fine of $300 and placed on probation for a period of 6 months.

United States v. L. R. Van Allen Company, Inc., Criminal No. G-77-121 Cr. (W.D. Mich.). This case involved an 11-count criminal information brought in Grand Rapids, Michigan, against L. R. Van Allen Company, Inc. and its president, for selling wood bleach and masonry cleaners, containing toxic and corrosive ingredients, which were misbranded hazardous substances because they do not meet the labeling and child-resistant closure (special packaging) requirements of the Federal Hazardous Substances Act and the Poison Prevention Packaging Act. On August 1, 1977, both defendants entered please of nolo contendere to counts 1-6. Each defendant was fined $250 on count 1. Execution of sentence was suspended as to counts 2-6. Counts 7-11 were dismissed.

CIVIL PENALTY ACTIONS

CPSC Docket No. 77-4: Corning Glass Works, Inc., Corning, New York. In one of the first civil penalty actions brought by the Commission pursuant to Section 20 of the Consumer Product Safety Act for a violation of Section 19 (a) (4), it was alleged that Corning Glass Works, Inc., Corning, New York, failed to inform the Commission immediately of certain information it had which reasonably supported the conclusion that a product contained a defect which could create a substantial product hazard, as required by Section 15(b) of the Consumer Product Safety Act (CPSA). After the Commission staff conducted an investigational hearing on January 26 and 27, 1977, the Commission issued its Notice of Violation on March 24, 1977, alleging the failure to report immediately the required information. The Commission's Notice of Violation assessed respondent a civil penalty of $400,000.

At that time, respondent offered to settle the alleged violation for a civil penalty of $325,000. On July 14, 1977, the Commission accepted the civil penalty of $325,000 in full and final settlement of the case.

CPSC Docket No. 77-2: Wham-o Manufacturing Company, San Gabriel, California. This was a civil penalty case brought by the Commission pursuant to Section 20 of the Consumer Product Safety Act. It was alleged that Wham-o Manufacturing Company (Wham-o) knowingly violated Section 19 (a) (4) of the CPSA by failing to immediately inform the Commission, upon obtaining information which reasonably supported the conclusion, that certain models of the firm's crossbows contained a defect which could create a substantial product hazard, as required by Section 15 (b) of the CPSA.

After the Commission staff conducted an investigational hearing on January 12, 13, and 14, 1977, the Commission issued its Notice of Violation and Assessment of Civil Penalty against Wham-o in the amount of $125,000. Since no payment was made nor a settlement agreement reached, the Commission commenced an adjudicative proceeding against Wham-o by issuing a Show Cause Order on April 27, 1977, requiring Wham-o to show cause why the firm should not be required to pay a civil penalty in the amount of $125,000.

Wham-o served its answer in the administrative proceeding on May 13, 1977. On May 19, 1977, Wham-o filed an action against the Commission in the United States District Court for the Central District of California, Civil Action No. 77 1818 HP, seeking to enjoin the Commission from proceeding with the administrative proceeding. At the same time Wham-o filed its motion for a preliminary injunction and brief in support thereof. The Commission staff's brief in opposition to Wham-o's motion was filed on July 1, 1977.

In addition to the activity in the federal court action, various pre-hearing activities took place in the administrative action. Settlement negotiations also took place, and a civil penalty of $40,000 was accepted by the Commission in full and final settlement of the case on October 28, 1977.

CPSC Docket No. 77-3: North American Systems, Inc., Bedford, Heights, Ohio. On May 5, 1977, the Commission voted to accept provisionally a $25,000 settlement offer made by North American Systems, Inc. The company made this offer to settle any allegation that it knowingly violated Section 19(a) (4) of the Consumer Product Safety Act (CPSA) by failing to inform the Commission immediately and adequately that its electric coffeemakers might be defective within the meaning of Section 15 of the CPSA. Simultaneously, the Commission issued its Notice of Vio

lations alleging the failure to immediately report the required information. The Commission indicated at that time that it would not assess a civil penalty in excess of $25,000. On June 16, 1977, the Commission accepted the civil penalty of $25,000 in full and final settlement of the case.

Civil Action No. 76 Civ. 3885 (S.D. N.Y.): United States v. Christian Dior New York, Inc. On December 28, 1976, a consent judgment was entered in this civil penalty case involving alleged violation of a 1971 cease and desist order issued under the Flammable Fabrics Act (FFA). The Government's complaint alleged importation of fabric which did not meet the flammability standard of the FFA, and the sale of dresses made from such fabric. Dior agreed to pay $15,000 in settlement. There was no trial or adjudication of the issues and Dior admitted no liability.

Civil Action No. 077-87R: The Celotex Corporation, et al. On July 8, 1977, this action was filed in the U.S. District Court for the Northern District of Georgia by the United States on behalf of the Commission. It seeks civil penalties in the aggregate amount of $510,000 for alleged violations of a cease and desist order issued by the Federal Trade Commission under the Flammable Fabrics Act. The alleged violations pertain to the manufacturing for sale, offering for sale and the sale of carpet that failed to conform to the Standard for Surface Flammability of Carpets and Rugs (FF 1-70) (16 CFR 1630). The case is in litigation.

Civil Action No. C-76–1334WHO: United States v. Colonial Carpet Mills, Inc., et al. On August 27, 1976, this action was filed in the U.S. District Court for the Northern District of California. It seeks civil penalties in the aggregate amount of $90,000 for alleged violations of two cease and desist orders issued by the Federal Trade Commission under the Flammable Fabrics Act. On October 20, 1977, during a pretrial conference, the parties entered into a consent agreemnt that contains, among other items, a mandatory injunction. The consent agreement also provides that the amount of the penalty will be assessed by the court pursuant to a hearing. The case is still pending for this final determination.

SEIZURES

The fiscal year, product, location and Act under which consumer products were seized are set forth below:

The seizures listed were accomplished in FY 77 or were still pending during FY 77.

IMMINENT HAZARD ACTIONS

Consumer Product Safety Commission v. Advance Machine Company, Inc., et al, Civil Action No. 77-1323 (D.D.C.). The Commission brought this imminent hazard action pursuant to Section 12 of the Consumer Product Safety Act against the manufacturers and distributors of an automatic pitching machine on July 24, 1977. The machine has a rotary pitching arm which rotates in a clockwise direction until sufficient mechanical energy is built-up to propel the arm forward rapidly, permitting it to pitch a baseball. If the machine is shut-off when the pitching arm is in the ready-to-pitch position, the arm retains stored mechanical energy, and if a person imparted a slight virbration to the machine, it could go off even though it was disconnected from its power source.

The Commission filed suit against the manufacturers and distributors of the machine to compel them to halt further sales and distribution of the machine, to order them to send a safety notice to the purchasers and known possessors of the machine, and to require them to repair, replace or refund the purchase price of the machines. The matter came before the United States District Court on the Commission's application for a temporary restraining order. Upon the judge's urging, defendants entered into a consent agreement and stipulation agreeing to halt further sales of the machines and to mail safety notices to their customers in lieu of being subject to a temporary restraining order.

The Commission is continuing to prosecute its court case to compel the defendants to repair or replace the machines or to refund their purchase price. This relief will be determined in a full trial on the merits which will be scheduled at the Court's convenience.

Consumer Product Safety Commission v. Chance Manufacturing Company Inc., et al, Civil Action No. 77 581 (D.D.C.). The Commission brought this action pursuant to Section 12 of the Consumer Product Safety Act, in the Federal District Court for the District of Columbia requesting the Court to declare Zipper amusement rides to be imminently hazardous consumer products and to grant other necessary relief. Zipper rides have individual cars in which the consumer rides. If a car door should open while the Zipper ride is in operation, the consumer could fall and die or suffer personal injury. The Commission has reports of four fatalities and two severe personal injuries resulting from the door of the Zipper ride car opening while the ride was in operation.

The Commission filed suit on September 15, 1977, against the manufacturer and a class consisting of all distributors and retailers (owners and operators) of the Zipper rides to compel them to halt further manufacture, distribution (including rental), sale, and operation of the ride, and to order them to repair the rides in a manner approved by plaintiff or to cease permanently the distribution (including rental), sale, and operation of the rides. Subsequently, the Commission filed a motion for immediate relief or, in the alternative, for a temporary restraining order and preliminary injunction. That motion has not been heard by the Court.

The Commission is continuing to prosecute its court case to compel defendants to repair the rides or to cease operation permanently. The relief will be determined in a full trial on the merits which will be scheduled at the Court's convenience.

ADMINISTRATIVE ENFORCEMENT ACTIONS

CPSC Docket No. 75-16: Francis Alonso d/b/a Mylar Star Kites Burbank and Encino, California. An Initial Decision issued by the Administrative Law Judge on June 18, 1976, held that the aluminized kites involved in this proceeding present a substantial product hazard within the meaning of Section 15 of the Consumer Product Safety Act. Respondents were ordered to notify the public of the hazard and to recall and replace or refund the purchase price of the kites less an allowance of 50% for kites in use for more than one year.

Following an appeal of the Initial Decision to the Commission by respondents, a Decision and Order was announced by the Commission September 16, 1977, in which the Notice of Enforcement issued in this proceeding was dismissed. While affirming the findings of fact contained in the Initial Decision as to the hazardous nature of the aluminized kites, the Commission set aside the proposed order of the Administrative Law Judge on jurisdictional grounds, holding that the subject kites were toys or articles intended for use by children; thus, the kites were found to fall within the scope of the Federal Hazardous Substances Act and, in the majority's view, the Commission was obligated to act within the FHSA rather than the CPSA.

CPSC Docket No. 75-4: F&D Associates, Inc., New York, New York. On January 19, 1976, a Notice of Enforcement issued charging F&D Associates, Inc., with a violation of the FFA and the Standard for the Flammability of Mattresses (16 CFR 1632). The Notice of Enforcement charges that respondents manufactured and sold mattresses during the first 6 months of the effective date of the standard without the required labels disclaiming compliance with the mattress standard. The staff attorneys and counsel representing F&D Associates, Inc. negotiated a consent agreement.

On October 29, 1976, the Commission approved an agreement providing that recall offering refund or replacement is mandatory where a presumption of flammability has arisen (when the manufacturer fails to premarket test), unless respondent produces evidence that demonstrates to the Commission's satisfaction

that the product does not present an unreasonable risk of the occurrence of fire and injury.

CPSC Docket No. 76-9: National Mattress Co., et al. An administrative adjudicative proceeding was commenced on December 8, 1976, in which respondents were charged with violating the Flammable Fabrics Act by failing to conform to the Standard for the Flammability of Mattresses, 16 CFR Part 1632). Respondents did not conduct all required prototype tests and did not randomly select mattresses for production testing. On August 26, 1977, following a full trial on the merits, the Aministrative Law Judge concluded that respondents had violated Section 3 of the Flammable Fabrics Act and accordingly issued a cease and desist order to enjoin respondents from any further violation of the Act. A notice of intent to appeal to the Commission has been filed by respondents. CPSC Docket No. 76-5: Ups 'n Downs, Inc., et al. An administrative adjudicative proceeding was commenced on May 10, 1976, in which respondents were charged with violation of the Flammable Fabrics Act in the sale of garments which did not meet the criteria of the Standard for the Flammability of Clothing Textiles (16 CFR 1610). The staff used statistical projections as evidence of the violations. However, after a full hearing on the merits, the Administrative Law Judge, on June 20, 1977, dismissed the Notice of Enforcement for insufficiency of evidence. Commission staff has appealed this matter to the Commission.

CPSC Docket No. 77-1: Central Textiles, Inc. This action was commenced on March 8, 1977, to determine whether children's sleepwear manufactured by the respondent was in violation of the Flammable Fabrics Act and the Standard for Flammability of Children's Sleepwear (16 CFR 1615). A settlement agreement is pending with the Commission.

CPSC Docket No. 75-21: Westland Carpet Mills, Inc., Garden Grove, California. A Notice of Enforcement was served on Westland Carpet Mills, Inc., Westland Carpets of Nevada, Inc., and Ervin Preuss, President of both corporations, on November 24, 1975, for violating the Flammable Fabrics Act by the manufacture for sale and/or sale of carpet which failed to conform to the Standard for the Surface Flammability of Carpets and Rugs (16 CFR 1630). The Commission staff is seeking a Cease and Desist order against respondents which requires recall of five lines of carpet to the level of the ultimate consumer. A hearing was held before the Administrative Law Judge in Los Angeles on March 24, 1976. An initial decision was rendered by the Administrative Law Judge on September 7, 1976, from which Commission staff has filed an appeal to the Commission. Appeal briefs have been submitted and a Commission decision is pending.

CPSC Docket No. 75-5: Barrett Carpet Mills, Inc., Dalton, Georgia. This action was commenced under provisions of the Flammable Fabrics Act and the Federal Trade Commission Act to determine whether a certain carpet style manufactured by the respondents was in violation of the carpet standard and whether such carpet should be recalled from the homes of consumers. After a hearing, the Administrative Law Judge issued a decision on July 8, 1976, which included a Cease and Desist Order against the company and its president. The Cease and Desist Order relates specifically to the carpet style in question and includes recall of carpets still in commerce.

On August 5, 1976 the Commission issued an order sua sponte undertaking review of the case and setitng forth the issues to be considered. On August 11, 1976, respondents filed a "Motion for Clarification of Order or Enlargement of Issues to be Briefed." Such motion was treated by the Commission as a late filed notice of intention to appeal. After the filing of briefs, oral argument was heard before the Commission on March 14, 1977. The matter is pending before the Commission.

CPSC Docket No. 76-6: Northwick Mills, Inc. d/b/a Enduro Mills and Fred W. Rosen, Dalton, Georgia. On June 8, 1976, the Commission staff filed a Notice of Enforcement alleging that respondents violated the Standard for the Surface Flammability of Carpets and Rugs by the manufacture and sale of Style 9562 carpeting, and seeking a cease and desist order against respondents which requires recall of the carpeting to the level of the ultimate consumer. After a prehearing conference, respondents filed a motion for pretrial summary judgment on grounds that the Commission lacks statutory authority under the Flammable Fabrics Act to order the recall' of installed noncomplying carpeting. The Administrative Law Judge granted Respondent's motion. The Commission staff filed a petition for Commission review. Oral argument was held before the Commission on March 14, 1977. The matter is pending before the Commission.

CPSC Docket No. 76-8: McEntire Brothers, Inc., Topeka, Kansas. An administrative action was filed against the named respondent on December 8, 1976. This