Canada's Mega Brands Inc., maker of Mega Blox and other popular playthings, agreed to pay a civil penalty of $1.1 million last week in connection with a defective toy that caused the death of a toddler in November 2005 and intestinal injuries in 25 others.
Mega Brands didn't actually own the company that made the toy until after the toddler was killed, yet it was legally on the hook for some of the problems.
For The Record
Los Angeles Times Saturday, April 25, 2009 Home Edition Main News Part A Page 4 National Desk 2 inches; 77 words Type of Material: Correction
Toy safety: In Wednesday's Section A, a David Lazarus column about difficulties in obtaining safety data from federal regulators said that Mega Brands Inc. acquired Rose Art Industries in early 2006. In fact, the deal was completed in July 2005; Mega Brands took operational control in January 2006. Also, the column reported that toddler Kenny Sweet Jr. died after ingesting a magnet. According to published reports, he swallowed nine magnets, which were part of Magnetix play sets.
The case highlights the difficulty that companies and consumers face in obtaining accurate and up-to-date safety data from federal regulators.
Simply put, it's too hard to find out in a timely manner whether a product poses a danger to users. And, shamefully, it's often not until someone dies before steps are taken to remove that product from store shelves -- a process that can take months.
The Mega Brands settlement centered on Magnetix play sets. The sets had powerful magnets that, if ingested, could tear through a child's intestines.
They were originally manufactured by Rose Art Industries Inc., which was acquired by Mega Brands for $315 million in early 2006.
While Mega Brands says it didn't know about problems with Magnetix sets while it was vetting Rose Art for purchase in 2005, Rose Art says it disclosed all relevant information. The two companies are duking it out in court over who knew what and when.
Regardless of which side is telling the truth, the bottom line is that it should be easier for interested parties to find out whether there are safety issues with a firm's products.
It's not clear whether Mega Brands sought to independently check out Rose Art's safety track record by getting in touch with the Consumer Product Safety Commission; neither the company nor the commission kept full records of every contact.
But even if the firm had made a point of seeking federal safety data, Mega Brands would have had a tough time prying information from the commission.
It turns out that a company or consumer can't just call up and ask the agency to search its database for a specific product or manufacturer. Rather, a request would have to be filed under the Freedom of Information Act and months could pass before a response might be offered.
Joe Martyak, the commission's chief of staff, acknowledged that this isn't the most efficient way of providing access to the agency's vast storehouse of safety data. "Our databases aren't set up for doing it any other way," he said.
But still, what if Mega Brands had followed that procedure?
According to Martyak, the company would have learned that the commission had received at least two complaints from consumers -- in 2004 and early 2005 -- about magnets becoming dislodged from Magnetix sets.
Because magnets are known to pose a safety threat to youngsters if swallowed, this would have been an immediate red flag for Mega Brands.
More important, the company would have learned that in May 2005, an Indiana preschool teacher reported that a 5-year-old child had required emergency surgery after swallowing a Magnetix magnet.
The Mega Brands-Rose Art merger was still about two months from being finalized when, shortly before Thanksgiving Day in 2005, Kenny Sweet Jr. swallowed a Magnetix magnet at his home in suburban Seattle.
The magnet tangled the child's intestines and ultimately killed him, as depicted in a Pulitzer Prize-winning 2007 story in the Chicago Tribune.
Would the knowledge of this have been sufficiently troubling to Mega Brands to compel the company to abandon the Rose Art acquisition? Could Mega Brands have exerted pressure on Rose Art to recall the product? We'll never know.
What we do know is that after Kenny's death, the Consumer Product Safety Commission finally lurched into gear and issued a subpoena to Mega Brands, now Rose Art's owner, to produce all information about Magnetix problems.
According to the commission, Mega Brands responded with more than 1,100 complaints from customers about magnets falling out of Magnetix sets before the fatal incident. None of those earlier complaints are believed to have involved injuries.
The commission called for Mega Brands to voluntarily recall the defective Magnetix sets. However, it took four months for the company and the federal agency to come to terms on the scope of the recall, during which time parents continued buying the toy for their kids.
I was one of them, I don't mind saying.
So now we have a settlement and a $1.1-million fine. Problem solved?
This sort of thing will happen again and again until we have a system in place that allows for timely access to government safety data. This is the computer age, after all. We're not talking about an impossible bureaucratic task.
Meanwhile, I'm underwhelmed by Mega Brands' insistence that it had no way of knowing about the danger of Magnetix sets because Rose Art failed to disclose the information. The point of due diligence before an acquisition is to find out everything you need to know about your new bedmate.
I would expect any manufacturer, but particularly a manufacturer of children's toys, to turn over every available stone before consummating a corporate marriage. If that means filing a whole slew of requests under the Freedom of Information Act, so be it.
There are no winners in the Magnetix case. All we have is a woefully inadequate federal safety system and a process that allows months to pass before a dangerous product is recalled.
And a child is gone.
No settlement will bring him back.
David Lazarus' column normally runs Wednesdays and Sundays in Business. Send your tips or feedback to email@example.com.