Toy maker Mattel Inc. will pay $12 million to 39 states, including Missouri and Kansas, to settle an investigation over Chinese-made lead-tainted toys shipped to the U.S. in 2007, state officials said Monday.
Missouri is to receive nearly $500,000, while Kansas will receive more than $200,000.
Mattel and its Fisher Price unit recalled more than 21 million Chinese-made toys last year, beginning in August, fearing the items were tainted with lead paint and tiny magnets that children could accidentally swallow.
All the affected toys were pulled off shelves by December 2007.
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As part of the agreement, Mattel also agreed to lower the acceptable level of lead in toys shipped to the states to 90 parts per million down from 600 parts per million, which is currently the federal standard.
When new regulations go into place next year, however, the federal standard will also fall to 90 parts per million.
"This settlement will help keep kids' toys safe by requiring more stringent standards on the use of lead paint," Kansas Attorney General Steve Six said in a news release.
Other states taking part in the settlement are: Alabama, Alaska, Arkansas, Arizona, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Iowa, Kentucky, Maryland, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, and Wyoming.
California also took part in negotiations, but reached a separate agreement under its Safe Drinking Water and Toxic Enforcement Act. As part of that agreement, California said Thursday that nine toy companies, including Mattel, would pay the state $1.8 million over lead-tainted toys.
“Mattel has demonstrated its commitment to children's safety by pledging to meet standards even more stringent than those currently required,” El Segundo, Calif.-based Mattel said in a statement. “Mattel also has taken steps that go beyond current requirements to give parents greater confidence that the Mattel toys that they buy this holiday season will be the safest ever.”
Needham & Co. analyst Sean McGowan said the settlement had been anticipated, and $12 million is probably less than the legal costs the company would have incurred if the company hadn't reached a settlement with the states.
“Anything that would put to rest this question (of toy safety) is a net positive, as long as it's not terribly crippling, and $12 million is pretty good to put to rest state-level actions,” he said. However, he noted there are still class-action suits from consumers that are pending.