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From Products Liability Law Daily, August 4, 2015

New York Attorney General fines retailers over $300,000 for selling “imitation weapons”

By John Dumoulin

New York Attorney General Eric. T. Schneiderman entered into agreements with five major retailers to settle charges that these companies violated a New York State law prohibiting the sale of “imitation weapons,” which are toy guns that look like real guns, according to a release issued by the Attorney General’s Office. The Attorney General’s investigation found that Amazon.com, Kmart, Sears, Walmart, and California-based ACTA, as well as third-party sellers operating through Amazon.com and Sears.com, sold more than 6,400 prohibited toy guns in New York from 2012 through 2014 without the legally distinguishing color markings required by law. The agreements impose fines on the retailers and require them to take other actions to ensure future compliance with New York law (New York Attorney General Release, August 3, 2015).

Investigation. The Attorney General, who began an investigation in December 2014, found that prohibited toy guns sold by the retailers, priced from less than $10 to as much as several hundred dollars, could be purchased easily online and shipped into New York state, according to the release. The retailers, other than Kmart, allegedly kept toy guns off the shelves of their brick-and-mortar stores, but sold illegal toy guns online. Kmart sold prohibited toy guns both online and in stores across the state, according to the Attorney General. The investigation determined that these sales violated state law and that many toys shipped to New York City violate city law.

Fines. Walmart must pay $225,000 in fines under its agreement with the State of New York, while Kmart, Amazon.com, Sears, and ACTA must pay more than $84,000 in combined fines and costs. The release said that the fines imposed on Walmart are higher because Walmart violated a similar 2003 agreement with the Attorney General’s Office in which the company had agreed to stop selling realistic looking toy guns in New York. The earlier agreement involved in-store sales, while the current agreement involves online sales. Amazon must pay a civil penalty of $7,250 ($50 per online sale) to New York state, plus $2,000 in costs to the Attorney General’s Office. Kmart is to pay a $64,550 penalty ($50 per online sale and $500 for each in-store sale), as well as $2,000 in costs. ACTA must pay a $7,000 civil penalty and $2,000 in costs to the Attorney General’s Office.

Other actions. In addition to paying the fines, the companies must apply New York City’s strict appearance standards—which require toy guns to be entirely brightly colored—to all statewide sales. New York state law is not as strict. The retailers are also required to develop procedures to ensure that their third-party sellers comply with the law when selling toy guns in the state and that if one of these third-party sellers violates this rule, it will be barred from operating on the retailer’s platform. The release said that as part of the agreements, the retailers had provided the Attorney General’s Office with a list of third-party sellers who sold prohibited imitation weapons into New York. The Attorney General then sent cease and desist letters to those third-party sellers and sent subpoenas to the highest-volume sellers among them.

Companies: Amazon.com, Kmart, Sears, Walmart, and ACTA

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