Washington, DC — RC2 Corp. has agreed to pay a $1.25 million civil penalty over its 2007 recall of 1.7 million toys that exceeded U.S. lead paint limits.
The Oak Brook, Ill., company and one of its subsidiaries, Learning Curve Brands Inc., were part of a spate of recalls that brought heightened attention to U.S. toy safety laws, spurring the creation of new lead limits in the Consumer Product Safety Improvement Act of 2008.
In June 2007 the company issued a recall of more than 24 vehicles, buildings and other products in the Thomas & Friends wooden railway toy line. In September, five more toys were added to the recall. The toys were recalled for containing excessive lead in their paint and surface coatings. The Consumer Product Safety Improvement Act set the new lead limit for lead in paint at 600 parts per million, which was further lowered to 90 parts per million in August.
In a statement, Commissioner Anne Northup of the U.S. Consumer Product Safety Commission noted that RC2 had a new compliance system in place when the recalls happened. The company required its contract manufacturers to have their products tested for lead paint content by independent labs, required manufacturers to receive certifications from paint suppliers showing their lead levels and conducted its own product testing.
When the recalls happened, the company broke ties with the contract manufacturer in China that made the toys, disallowed any other contract manufacturers from using the Hong Kong paint supplier responsible for the paint on the toys and conducted an internal investigation.
Northup also noted the cost of the recall to the company, and stated how she hopes civil penalties are implemented in future cases. "The 
tremendous costs associated with a voluntary or CPSC-ordered recall (over $42 million in this case) provide a significant financial deterrent against companies taking a casual approach toward their product safety compliance responsibilities," she stated, also noting that RC2's net income dropped from $34 million in 2006 to a net loss of $200,000 in 2008. "As we look to the future and to implementing the new law on lead in toys, I hope this agency will continue to apply penalties in a manner that creates proper incentives to produce safe products, but that does not cripple companies that operate lawfully the vast majority of the time."
The day after the agreement on the civil penalty was announced, another lead paint recall happened. Kendamaspot LLC, of Redmond, Wash., voluntarily recalled about 300 wooden skill ball toys (right). The balls, manufactured in Japan, contain paint with lead levels over the U.S. limit.