The Saga of Buckyballs–How Not to Regulate

Today’s Wall Street Journal has an Op Ed I wrote about the CPSC’s actions against Buckyballs and one of its founders, Craig Zucker.  While the Op Ed gives you the overview of the controversy, there is a substantial back story that space considerations only allowed me to touch on.  Nevertheless, that back story is important and it illustrates how the actions of the CPSC discourage the kind of corporate responsibility that the agency needs to encourage to protect consumers.

Skip the Warning—Just Ban the Product

We all acknowledge the harm that small powerful magnets can cause when several are swallowed.  The CPSC is aware of about 50 incidents of swallowed magnets over the past three years and, from this, estimates that there have been approximately 1700 incidents involving these magnets.  We also must acknowledge that the harm is only now being recognized by the medical community and that efforts to educate the public have been inadequate.

A number of manufacturers make small powerful magnet desk toys and manipulatives.  Buckyballs had the largest share of that market.  Even though Buckyballs were not intended for or primarily sold to children, when reports of ingestion started coming in, the company making them, Maxfield and Oberton, stepped up with an aggressive safety education program to warn against the danger of children swallowing powerful magnets.  Even though that education program was fully discussed with and encouraged by the agency, the CPSC then demanded a recall and decided to sue the company when it disagreed with its demand—all before the safety education program could be fully put into place.  A principle tenet of the agency’s case is that warnings were not sufficient to protect the public.  Yet, the only evidence it has to support that contention is its speculative conclusions, since the aggressive safety campaign envisioned by the industry was prematurely shut down by the agency.

I could point to other instances where the agency has worked to encourage public education campaigns to successfully address problems with equally serious injury patterns.  In this case, the agency apparently made a decision that warnings would not work and that a recall and product ban were needed before it had the real world evidence to support that conclusion.

Influencing the Process

The lawsuit against Maxfield and Oberton is not the only action the agency is pursuing.  Shortly after the agency sued the company, it also started a rulemaking proceeding to ban small powerful magnet desk toys and manipulatives as presenting unreasonable risks. The problem is that the agency in this rule is answering substantially the same question that it is litigating in the Buckyballs case.

Why is this a problem?   First, by issuing a rule essentially banning these products before the lawsuit against Maxfield and Oberton is concluded, the agency is determining that the product does in fact present an unreasonable risk of injury.  The issue before the judge is whether the product has a defect that presents a hazard. It is naïve to think that the judge will consider this case in a vacuum and that the agency’s determination in the rulemaking proceeding will not have an impact on the litigation.  By proceeding with the rule before the law suit is completed, the agency seeks to put too heavy a thumb on the scales.

Second, the commissioners are the venue for appeals coming out of the law suit.  When they have already make the ultimate decision that this product should not be on the market, it is questionable about how objective they are thought to be or actually are.

I am not arguing that the CPSC should not protect the public through the rulemaking process.  I am arguing that, when it made the decision to bring suit against Buckyballs, it then needed to recognize that procedural fairness comes with that decision.  As I stated at the time, both processes conducted simultaneously does not allow for an even playing field.

Legal Gamesmanship that Sacrifices Long-Term Safety

The agency staff’s decision to add Mr. Zucker as a party to the case is a truly pernicious development that, in the long run, may seriously damage the agency’s ability to work with stakeholders to carry out its mission.  Working with companies collaboratively to effect voluntary recalls is the foundation of the agency’s success.   The CPSC relies on the involvement of senior management to assure that cooperation.  To now say that senior management’s involvement, so essential to help protect consumers, could result in mind-blowing penalties imposed personally can only result in destroying the cooperative relationship the agency needs to do its job effectively.  It creates the perverse incentive for corporate officers to avoid involvement, hide behind lawyers and shun scrutiny of their safety systems when what is needed is more involvement.

If the agency seeks the involvement of senior corporate managers to help them assure compliance with regulations and then it penalizes them for that same involvement; if business owners have to fear personal financial ruin for making the government prove its case; and if speaking out against government action that is thought to be unfair results in what appears to be a personal vendetta, then we have to wonder about the quality of leadership that allows such results.

Yesterday, Mr. Zucker took the unprecedented step of suing the CPSC.  His lawsuit is being financed by the profits of his newest product, “Liberty Balls.”  I understand they are selling quite well.

About these ads

10 Responses to “The Saga of Buckyballs–How Not to Regulate”


  1. 1 Lisa November 21, 2013 at 5:06 pm

    There are numerous other companies selling the *exact* same product, without government interference. Zucker’s business was the only one targeted for extinction.

  2. 2 1deeno1 November 20, 2013 at 10:47 am

    Two things to remember/note here: 1. The CSPC is doing what has proven affective to the Democrats, regardless of where they are residing in power (if they are the majority) and that is this: A win in a court battle allows the winner the opportunity to use law enforcement to uphold the court decision since the court decision is now ‘law.’ (Think on this for a bit and let it sink in). 2. Nancy… you are putting yourself right in the way of ‘Big Brother’ by exposing them and their tactics for pushing their agenda. I’d watch my back if I were you. :)

  3. 3 Save Magnets (@SaveMagnets) November 19, 2013 at 5:38 pm

    Nancy,

    It’s sad to see you go. You were absolutely the voice of reason among the CPSC commissioners. Now Adler is going to be at the helm? He’s the one the one that most lacks objectivity.

    Petition against magnet prohibition here:
    http://www.change.org/petitions/us-cpsc-cease-magnet-prohibition

    If you have the time, will you get in touch with us?

  4. 4 Gary Taylor November 17, 2013 at 7:00 am

    Don’t give up, this is just another attack on individualism and free thinking, not only by the Feds but by most world governments who have all come to power through corruption and manipulation.
    I have no problem with rules and regulations but not the dumbing down of society using the guise of political correctness.
    It’s time to stand up to these unelected corrupt power seeking money loving parasites who want to tell us when to jump and how high.
    Well I’m not jumping and I am glad you are not.
    Good luck for having the “BALLS” to stand up to them.
    Gary Taylor
    Northern Ireland

  5. 5 jeanne moore November 16, 2013 at 11:46 pm

    Great article!

  6. 6 mdmnmdllr November 14, 2013 at 8:13 am

    Sounds to me as though the CPSC needs to be slapped down, here, and hard, for this massive overreach. The pertinent questions are – especially given the commission has apparently rigged the game – how, and is there any reasonable chance for success?

    Mr. Zucker’s open lawsuit against the CPSC would seem to be the only rational option here. One can hope that, perhaps, more wronged parties will sign aboard this, perhaps going so far as to turn into a class action versus the CPSC if such is possible. One person tilting at windmills, as much as we individuals may support his cause, has not the power of multiple wronged parties bringing common cause.

    Fortune favor Mr. Zucker in his effort. I still have the Buckeyballs I purchased from him prior to the CPSC’s forcing his shutdown; perhaps I will contribute again to the effort with his new offering. The cause is, after all, righteous.

  7. 7 Cal November 13, 2013 at 3:02 pm

    I sincerely appreciate that even a former member of the CPSC recognizes how absurdly stupid and heavy-handed the commission’s actions in this case have been. THANK YOU for writing this piece.

  8. 8 Michael November 13, 2013 at 2:50 pm

    Ironic that the Buckyballs site was shutdown and the product discontinued when thesmall company could not weather the assault by the CPSC. . . and in targeting Zucker directly forced the reemergence of basically the same products to be brought back to the marketplace to aid in his legal battles. I am placing my order to help support him.

  9. 9 Zacharyyy November 13, 2013 at 1:32 pm

    Dear Nancy,
    I want to thank you for the personal and professional sacrifices you have made to bright to light this over regulation by the CPSC and Inez Tenenbaum. Our democracy is stronger thanks to whistleblowers and moral advocates for justice! I wish you all the best.

  10. 10 Steven Greffenius November 13, 2013 at 10:35 am

    Hi Nancy, Just read your article today in the Wall Street Journal. Good work. I’ve only read the first paragraph of your post above. As I scan the rest of the post, I don’t see the words retaliation, intimidation, revenge, punishment, and deterrence. The CPSC went after Zucker because he made fun of the agency in public. He didn’t back down like a compliant citizen should when they first brought their action against him. They want everyone to know, this is what happens to you when you mess with us.

    The CPSC is not alone among federal agencies in acting this way. The feds have stated, with their actions and words, “we can do what we want because we’re the government.” Tyrants and criminals have always known that the best way to maintain power and instill fear is to demonstrate what you are willing to do, in public. People witness the demonstration and say, “I’m not going to let that happen to me.”

    One could list numerous examples, from Bradley Manning to the IRS campaign against Tea Party groups. We have come to expect that our interactions with government will be of this type, where the government tries to intimidate us by taking extreme measures against an opponent who has poked it in the face, or who they just don’t like. That is what’s happening in the CPSC’s case against Craig Zucker.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Enter your email address to subscribe to my blog and receive notifications of new posts by email.

Join 877 other followers

Let’s keep the conversation going on Twitter. You can find me at @NancyNord.

Nancy's Photos

More Photos

  • 54,299 visits

Follow

Get every new post delivered to your Inbox.

Join 877 other followers

%d bloggers like this: