The rest of the Buckyballs story

As the commissioner at the Consumer Product Safety Commission (CPSC) who cast the deciding vote to determine that Buckyballs was a substantial product hazard, I was surprised how new CPSC Commissioner Marietta Robinson, in a recent Congress blog submission, conflated two distinct CPSC actions against Maxfield and Oberton, the owners of Buckyballs (“Good riddance to Buckyballs”).

CPSC’s first action against Buckyballs correctly protected the public; the second was a gross overreach of its authority that sought to punish an entrepreneur for exercising his First Amendment rights and that should never be repeated by the agency.

{mosads}Buckyballs and Buckycubes had led to serious injuries due to the ingestion of these magnets.   Both the CPSC and Maxfield and Oberton owner Craig Zucker had previously worked together in good faith to warn the public about the dangers of swallowing these small high-powered magnets by using the media, better labeling, a product related web-site and through the distribution process.  Unfortunately, the CPSC determined after nine months that none of these preventative actions worked.

CPSC statutes give the Commission the authority and responsibility to protect the public.  I believed we had no other recourse but to approve an Administrative Complaint that determined that Buckyballs were a Substantial Product Hazard, seek a mandatory recall and an immediate stop sale of the product.   I voted for the Administrative Complaint because the injuries related to the product were growing at such an alarming rate that Chairman Inez Tennenbaum, Commissioner Bob Adler and I believed that, if ever there was a time to exercise CPSC’s authority, it was now. 

CPSC could have gone to court for an emergency order but it chose instead to threaten the company, notify the retail outlets and to publicize the hazard.  All of that led to the eventual end of the sale of Buckyballs. Zucker’s company fought the CPSC in this battle to stop the sale of Buckyballs and to issue a recall and that was their right. Maxfield and Oberton lobbied Congress and launched a media and internet campaign that ridiculed and mocked the Commissioners (including me). In my opinion Zucker’s attitude toward the agency was fairly obnoxious.  However, serving 10 years as a member of Congress taught me that one must have a thick skin to be a public servant.  Zucker was simply exercising his First Amendment Rights. 

Unfortunately, my colleagues at CPSC did not see it this way.  CPSC estimated that the cost of recalling Buckyballs would be $57 million (an amount that CPSC must have known to be exorbitant based on past recalls) and then sued Maxfield and Overton for that amount.  A few months after the company went out of business, CPSC amended its original suit, without a vote by the Commission, and added Zucker personally for the cost of the recall.

It is this subsequent action that created the backlash in the media against the CPSC.   By going after Zucker personally, CPSC made him an anti-government hero and tarnished the reputation of the Commission.

CPSC attempted to use a seldom used legal action called The Park Doctrine dating back to 1975 for illegal conduct carried out by individuals. But in this case, the corporate conduct was not illegal and neither Maxfield and Oberton nor Zucker had committed any crimes.

CPSC has plenty of experience with companies that go out of business because of a recall or other reasons.  In these cases, the responsibility of paying for the recall is assumed by the retailers that sold the product.  In fact, the retailers in the Buckyballs case had already assumed that responsibility.  And if protecting the safety of children was truly the issue, CPSC should have moved on to the recall and media campaign in an expeditious manner to warn the public of the hazard. 

Instead, CPSC spent the past fifteen months going after Zucker in a case that few believed they would win but that certainly sent a chill through any company regulated by the CPSC.  The message was clear:  Speak out against the CPSC and the agency could come after your home, your family and all your personal assets.

The National Retail Federation and National Association of Manufacturers filed briefs in support of Zucker.  Finally, two weeks ago, CPSC reached a settlement agreement with Zucker in which he would pay $375,000 to fund the magnetic balls recall (less than 1 percent of CPSC’s original claim). He did not have to admit that they were defective or posed threats as product hazards.

CPSC was right to force Buckyballs off retail shelves in order to protect children.  However, CPSC was wrong to then go after Zucker in what many viewed as a vendetta because of his verbal attacks on the Commission. The result of the latter was a waste of taxpayer dollars in pursuing a case that tarnished the reputation of CPSC and one that the agency was unlikely to win. 

I hope that the new CPSC Commissioners learn the most important lesson from the Buckyballs saga: that collaboration with manufacturers and retailers is a faster and fairer way to protect the public and that the CPSC’s reputation will be enhanced by truer and more sober legal actions.

Northup represented Kentucky’s 3rd Congressional District from 1997 to 2007. She served as CPSC commissioner from 2009 to 2012.  She is currently a partner at the Policy Resolution Group at Bracewell & Giuliani LLP.


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