CPSC Reaches Buckyballs Settlement, Sets Dangerous Precedent

On a number of occasions, we  here at Abnormal Use have reported on the ongoing legal battle between the Consumer Products Safety Commission (CPSC) and the makers of a toy called Buckyballs (see here and here).   After nearly two years, the CPSC has finally reached a settlement with the former CEO of the manufacturer of Buckyballs through which the toy will be recalled. By way of a refresher, Buckyballs are pea-sized  magnetic balls that are ultra-strong and can be stacked or shaped in fun ways.  The potential problem: If a child swallows more than one ball, the powerful magnets can cause serious internal injury.  The CPSC has likened the injury to a gunshot wound.  In spite of the product’s preexisting warnings, the CPSC waged a full fledged crusade against Buckyballs that ultimately led to the demise of its corporate manufacturer. Although Buckyballs’ parent company (Maxfield & Oberton Holdings) has been driven out of business, the CPSC has also gone after its CEO, Craig Zucker.  The CPSC has sought to hold him personally responsible for a recall of the toy.  Zucker has been an outspoken critic of the CPSC and has contended that the law does not allow individual employees to be held liable for such things.  It would certainly seem that Zucker had a valid argument.  Nevertheless, the realities of litigating against a federal agency with unlimited resources seems to have finally forced Mr. Zucker to relent.

The settlement agreement provides that Zucker will place $375,000 into a trust that the CPSC will control.  The CPSC will recall Buckyballs (and its sibling, Buckycubes) and will grant a refund to customers to be paid from the trust.

The settlement is troubling in that it sets a precedent for the CPSC holding a corporate officer personally liable for a product recall.  A good analysis of this issue can be found here.