There is much to-do about magnets lately. We wrote previously about the lawsuit filed by the Consumer Product Safety Commission (CPSC) against Craig Zucker, CEO of Maxfield and Oberton, the manufacturer of Buckyballs.
From that post, we heard from Scott Wolfson, director of communications for the CPSC, who offered some observations as well as some clarifications. First, the CPSC has NOT forced a mandatory recall of Buckyballs, nor any of the rare earth magnet products sold by two other companies also party to the lawsuit filed by the staff of the CPSC. Wolfson pointed out that this legal action is a “lawsuit to achieve” that recall. As such, the first level of appeal of any ruling for Zucker, or either of the other two manufacturers who are parties to the suit, is the CPSC commissioners themselves, and that’s an important distinction. Wolfson went on to say, “While there are three parties to the suit, 10 other manufacturers (of rare earth magnets) ‘did the right thing’ and pulled their products off the market.”
Also at issue is the large cost of the recall, estimated by the CPSC at $57 million, as well as determining who is responsible for those costs. The CPSC wants the court to find Zucker personally liable for the cost of the recall under what is known as the “responsible corporate officer doctrine.” The CPSC’s position is that once Maxfield and Oberton ceased operations, there was no longer a viable corporate entity to hold responsible for Buckyballs’ portion of the 1,700 emergency room visits related to rare earth magnet products between 2009 and 2011.
This week Zucker filed a counter suit against the CPSC claiming the commission has no jurisdiction and seeking an injunction to stop the CPSC suit. Zucker has also retained government accountability group Cause of Action to bolster his efforts.
According to Zucker, “I can win both, I will win both. It’s not easy, and it will take a lot of time and money. Despite overzealous regulators targeting me in the first place for speaking out, I am now taking legal action to defend myself against the CPSC’s egregious attempt at rewriting our cherished laws of limited liability.”
The official CPSC response, from Scott Wolfson, “Too many children have suffered serious injuries from the ingestion of high powered magnets. Through enforcement, education and rulemaking, the CPSC is working to keep children safe and reduce their exposure to this hazard-a hazard that doctors have described as a gunshot wound to the gut with no sign of entry or exit. CPSC staff continues to stand behind the administrative lawsuit and our pursuit of a free remedy for consumers of Bucky Balls and Bucky Cubes.”
Wolfson says that the commission now is acting “as in other cases, setting a standard, not a ban. The CPSC is setting ‘performance standards’ where super strong magnet sets need to be less powerful and individual magnets cannot be ingested.”
According to Zucker, the promotional products industry should share his concern. He asserts that the CPSC approved Buckyballs in 2010, including the product, the warning label, and the “distribution restriction program” developed to prevent sales of Buckyballs to retailers focusing on children’s products. “Even when you are told you are compliant, the CPSC can change its mind at any time. The biggest battle I’m fighting here is to retain the concept of limited personal liability for executives that are starting, or running, a company today.”
Zucker is currently raising money for his legal defense with a “United We Ball” campaign, and has received publicity from several national news outlets with the cheekiness of the campaign for “Liberty Balls” and the “Ball of Rights.” He did a lengthy interview for reason.tv, which is linked at the bottom of this post, about the unprecedented aspects of the suit, the safety of Buckyballs related to other consumer products and, that the CPSC’s lawsuit amounts to saying that “warning labels work for some products, but not for others.”
How about you, do you think the CPSC is over-reaching by holding Zucker personally responsible? There are some promotional products distributors showing their support by buying and reselling Liberty Balls—will you?
Additional Information:
The Feds v. Craig Zucker: Q&A With the Creator of Buckyballs
