CPSC IG Letter Exhibits

EXHIBIT A
MARSH
r-=J_ MARSH MERCER KROLL
GUY CARPENTER OLIVER WYMAN
Ms. Carolyn Manley
Team Lead, Regulated Children's Products
Office of Compliance and field Operations
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, MD 20814
June 07, 2010
Subject: Maxfield and Oberton
Dear Carolyn,
Alan H. Schoem
Senior Vice President
Marsh USA Inc.
1255 23rd Street NW
Suite 400
Washington, DC 20037
1 202 263 6783
alan.h.schoem@marsh.com
www.marsh.com
On behalf of Maxfield and Oberton, I want to thank you for working with it on the recall of
Buckyballs labeled for Ages 13+ and I want to summarize the actions that Maxfield and
Oberton took in cooperation with the CPSC. These actions are included in more detail in the
letter dated April 5, 201 0, submitted in response to the Letter of Advice. Maxfield and
Oberton would like to receive a letter accepting its corrective action plan as summarized
below.
PreRecall
1. Maxfield and Oberton changed its packaging, warnings, instructions and labeling
to reflect that Buckyballs are not designed or intended for children. (See letter
dated March 2, 201 0). Since approximately March 11, 2010, Maxfield and
Oberton labels Buckyballs packaging, carrying case and instructions with the
following warning:
Keep Away From All Children!
Do not put in nose or mouth.
Swallowed magnets can stick to
intestines caus1ng serious injury or death.
Seek immediate medical attention if
magnets are swallowed or inhaled.
2. Maxfield and Oberton has asked on-line stores to appropriately age grade the
product, use the warning language above and an image of the actual warning
when possible.
EXHIBITB
U.S. CONSUMER PRODUCT SAFETY COMMISSION
4330 EAST WEST HlGHW A Y
BETHESDA, MD 20814
Office: of Compliance and Fidd Operations
Detect Investigations Division
Email : jfwilliams@cpsc.gov
Certified Mail/Email
Alan H. Schoem, Esq.
Law Office of Alan Schoem LLC
14809 Rolling Green Way
North Potomac, MD 20878
ahschoem@gmail.com
~ I U L 1 0 2012
Re: CPSC File No. CA120094
Maxfield and Oberton Holdings, LLC
Josc:ph F. Williams
Compliance Officer
Tel : 301-504-7585
Fax: 301-504-0359
Aggregated masses of small, powerful, individual magnets
Dear Mr. Schoem:
The staff of the Office of Compliance and Field Operations of the U.S. Consumer
Product Safety Commission ("Commission") has reviewed the available information concerning
the above-referenced case.
After careful consideration and in accordance with 16 C.F.R. 1115.12(a), the Office of
Compliance and Field Operations staff has made a preliminary determination that aggregated
masses of small, powerful, individual magnets ("Subject Products") under the brand names
Buckyballs and/or Buckycubes which arc manufactured/imported, distributed, and retailed by
Maxfield & Oberton Holdings, LLC ("Firm"), present a substantial product hazard under section
15(a) ofthe Consumer Product Safety Act ("CPSA"), 15 U.S.C. 2064(a). Swallowing one or
more small powerful magnets will likely require medical intervention to monitor the magnets
progress, and may cause serious gastrointestinal ("Gl") injuries requiring surgical intervention to
remove the magnets when the magnetic forces of the magnets attract, trapping and pinching GI
tract tissue.
CPSC Hotline: 1-800-638-CPSC (2772) * CPSC's Web Site hllp://www.cpsc.gov
Fest Track Recall Program is an Innovations in Amencan Government Award Winner
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CA120094
Voluntary Corrective Actions
The staff requests that the firm take voluntary action to notify consumers and to recall the
subject products that are in the chain of distribution and in the possession of consumers. If the
firm agrees to take voluntary corrective action, please submit a written corrective action plan
describing the actions. Section 1115.20(a) ofthe regulations on Substantial Product Hazard
Reports, 16 C.F.R. 1115.20(a), outlines the elements of an appropriate corrective action plan.
The staff will review the firm's plan promptly and discuss with it any suggestions it has or
additional measures it believes Maxfield & Oberton should take.
In this case, the staff recommends that Maxfield and Oberton take the following
corrective actions:
Immediately stop the manufacture, importation, distribution, and sale of
the affected products and provide stop sale notice to the distribution chain,
including all retailers
Direct recall notice to identified purchasers
Joint press release announcing a recall
Recall posters at retail locations
Recall notice posted on the firm's Web site
Video news release announcing a recall in broadcast form
Targeted recall notice to specialty organizations, associations and media
Submit a proposed remedy to be approved by the Commission staff
(refund)
Provide a step-by-step plan for reverse logistics including any 3rd party
firms that will be handling the recalled product for
destruction/repair/refurbishment
Compliance With Reporting Obligations
The staff will also investigate and assess whether it believes the firm has complied with
the reporting requirements of section 15(b) of the Consumer Product Safety Act ("CPSA"), 15
U.S.C. 2064(b). That section requires every manufacturer, importer, distributor, and retailer of
a consumer product, or of any other product or substance over which the Commission has
jurisdiction under any other statute enforced by the Commission, who obtains information which
reasonably supports the conclusion that the product (1) contains a defect which could create a
substantial product hazard, (2) creates an unreasonable risk of serious injury or death, (3) fails to
comply with an applicable consumer product safety rule or with a voluntary consumer product
safety standard upon which the Commission has relied under section 9 of the CPSA, 15 U .S.C.
2058, or ( 4) fails to comply with any other rule, regulation, standard, or ban under the CPSA or
any other statute enforced by the Commission, to immediately inform the Commission of the
defect, risk, or failure to comply, unless the firm has actual knowledge that the Commission has
been adequately informed of the defect, risk, or failure to comply. See 16 C.F.R. Part 1115. The
CPSA makes it a prohibited act to violate the reporting requirements. Firms may be liable for a
civil penalty of $100,000 for each violation involved up to a maximum of $15,000,000 for any
Page 3
CA120094
related series of violations. The maximum penalty increased to $15.15 million after January 1,
2012. Sections 15(b), 19(a)(4), 20, and 21 ofthe CPSA, 15 U.S.C. 2064(b}, 2068(a)(4}, 2069,
and 2070, describe the duties of manufacturers, importers, distributors, and retailers to furnish
information to the Commission and the penalties for failing to furnish such information.
Continuing Obligations
The staff requests that the firm continue to implement its corrective action plan until as
many Subject Products as possible have been removed from the marketplace. Please continue to
maintain your toll-free recall number as a means for consumers to reach you about your recall.
Should the tinn decide to change or discontinue the toll-free number, you must notify the Office
of Compliance and Field Operations and provide a new recall contact number for the finn. This
information will be maintained by the Commission staff and provided to consumers and others
seeking information on your recall.
If the finn receives or learns of any information concerning complaints, claims,
incidents, or injuries that the firm did not report, or other information affecting the scope,
prevalence, or seriousness of the reported problem, issue, or potential defect or hazard, the finn
must immediately report that information to the Office of Compliance and Field Operations.
Additionally, if the firm receives information that might indicate that its corrective actions are
not satisfactory in eliminating the risk of injury or the potential defect or hazard, or that the
effectiveness of the corrective action plan was less than what had been reported, it must
immediately report that information to the Office of Compliance and Field Operations. In
addition, under section l9(a)(2)(B) of the CPSA, 15 U.S.C. 2068(a)(2)(B), it is unlawful to
sell, offer for sale, manufacture for sale, distribute in commerce, or import into the United States
a product that it is covered by a manufacturer's corrective action plan created in consultation
with, and publicized by, the Commission.
Until this matter and any related matters are resolved, there will remain the possibility of
further enforcement action, including reasonably anticipated litigation. Therefore, the firm must
abide by the continuing legal obligation to preserve all information, documents, records, and
samples, now in existence or created hereafter, related to the Subject Product.
The staff welcomes and will give full consideration to any comments or additional
information from the firm concerning the staff's preliminary determination. The staff will meet
with the firm as necessary to discuss its comments and/or corrective action.
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CA120094
Due Date and Contact Information
The staff requests that the firm respond in writing within 48 hours of the receipt of this letter
to confirm that (I) the Firm has stopped the manufacture, import, distribution, and sale of the
Subject Products; and (2) the Firm has requested that its distributors and retailers immediately
stop distribution and sale of the Subject Products; and provide a proposed corrective action plan
within 10 working days from receipt of this letter for the staffs review. Please reference the
file number stated above in your response and send an electronic copy of all documents you
are providing to the email address listed on the letterhead of this letter or by providing a
CD with your response.
The staff will make every effort to work closely and cooperatively with the firm to assure
a successful corrective action plan which will protect the public while at the same time create a
minimum of burden and inconvenience for the firm. If you have any questions or desire
assistance in responding to this letter, you may contact me at 301-504-7585. Please address your
correspondence to the following: Office of Compliance and Field Operations, U.S. Consumer
Product Safety Commission, Room 613,4330 East West Highway, Bethesda, MD 20814-4408.
The Office of Compliance and Field Operations telefax number is (30 1) 504-0359.
Thank you for your cooperation.
oseph F. Williams
Compliance Officer
Defect Investigations Division
cc T. Michael Lee, Compliance Officer, Regulatory Enforcement Division, CPSC
EXHIBITC
The Law Office of Alan H. Schoem LLC
E-Mail Only
Mr. Joseph F. Williams
Compliance Officer
Office of Compliance and Field Operations
Bethesda, MD 20814
July 12, 2012
Confidential under 15 U.S.C. 2055
I am in receipt of your letter dated July 10, 2012, in which you advise that the staff of the Office of
Compliance and Field Operations has made a preliminary determination that high-powered magnets
sold under the brand names Buckyballs and BuckycubesrM manufactured by Maxfield and Oberton
Holdings, LLC ("the Company" or "Maxfield and Oberton") present a substantial product hazard under
section 15{a) of the Consumer Product Safety Act. The basis for your preliminary determination is that
"Swallowing one or more small powerful magnets will likely require medical intervention to monitor the
magnets progress and may cause Gl injuries requiring surgical intervention to remove the magnets."
The Preliminary Determination Letter Fails to Establish A Substantial Hazard Exists
Although you state that "the staff welcomes and will give full consideration to any comments or
additional information from the firm concerning the staff's preliminary determination," the tone of the
letter contradicts that statement as you essentially demand that Maxfield and Oberton stop the
importation, distribution and sale of the products and recall them from consumers; in other words, go
out of business, since Buckyballs and BuckycubesrM are the firm's primary products.
1
You are
essentially banning Maxfield and Oberton's products without going through the required rulemaking
procedures of section 8 of the Consumer Product Safety Act, 15 U.S.C. 2057, to support a product ban.
This de facto ban of a type of product without adherence to rulemaking requirements is all the more
objectionable given that these products, when used as intended, are perfectly safe.
The term substantial product hazard is defined in relevant part in Section 15{a)(2) of the Consumer
Product Safety Act {CPSA) to mean:
(2) a product defect which (because of the pattern of defect, the number of defective products
distributed in commerce, the severity of the risk, or otherwise) creates a substantial risk of
injury to the public. [15 U.S.C. 2064{a)(2)] [Section 15{c) of the Federal Hazardous Substances
Act, 15 U.S.C. 1274{c) provides a nearly identical standard, although by its terms it applies to
toys and other children's articles, which these products are not.]
These statutory criteria provide no precise, delineated factors that would allow everyone to look at the
same group of facts and reach the same conclusion in every case. The statute does not provide clear
criteria for what level of injury or risk, how many defective products, or what pattern of defect results in
1
The firm recently started selling Bucky Bigs TM and Buckybars.
14809 Rolling Green Way North Potomac, MD 20878 301-758-2701
21 Page
a "substantial hazard." Logically, however, the quantum of risk is higher than an "unreasonable risk of
injury," the threshold for rulemaking, both because of the terminology used and the significance of the
recall remedy. See Sections 7, 8, and 9 of the CPSA, 15 U.S.C. 2056, 2057 and 2058.
Further evidence that "substantial risk" is a higher quantum of risk than "unreasonable risk" is found in
section 15(a)(1), 15 U.S.C. 2064(a)(1). That provision makes clear that even a violation of a standard or
ban (by statute an "unreasonable risk" finding must support such a r_ule) alone does not present a
substantial product hazard. A product needs to violate such a standard or ban and present "a
substantial risk of injury" to meet the definition for a "substantial product hazard."
Although the purported hazard description in your Jetter makes no mention of children (nor any other
user group), CPSC staffs mistaken premise seems to be as follows: Serious injuries have been reported
to children permitted access to magnets reasonably intended for adults: Therefore, the products are
defective and that defect creates a substantial risk of injury to the public. Such a bald assumption,
however, fails to meet the statutory requirements for a substantial product hazard determination when
viewed in the statutory context that CPSC is required to use to analyze the existence- or in this case the
non-existence- of a substantial hazard.
Maxfield and Oberton's position is that it can only be reasonably concluded that Buckyballs and
BuckycubesrM do not contain a design or production defect which creates a substantial risk of injury to
the public. Your correspondence contains no evidence upon which CPSC can reasonably conclude that
the Company's products contain such a defect. If we understand the staff allegation, it is merely the
existence of injuries related to misuse of the product (allowing children access to magnets) that creates
a substantial hazard. On its face the paucity of additional legal analysis belies such a determination.
Certainly these products are distinguishable from children's toys that incorporate magnets as these
products are reasonably intended for use by adults pursuant to a marketing program already sanctioned
by CPSC staff. This marketing program, further discussed below, has been jointly promoted by the
Company on its specific safety website (www.magnetsafety.com ) and its main website, as well as by the
CPSC in its outreach efforts.
Facts In Evidence
Maxfield and Oberton's products are adult products marketed and promoted for adults, i.e., those
persons 14 years of age and older. Maxfield and Oberton shares CPSC's concern with children accessing
and swallowing high-powered magnets. To this end, Maxfield and Oberton is the market leader in
promoting the safe sale and use of adult high-powered magnets. Because of its concern for children
gaining access to its products, as set forth in great detail in its May 25, 2012, response to Mike Lee's Full
Report request dated May 15, 2012, Maxfield and Oberton put in place safety procedures in 2010. In
3I Page
May, 2010, in cooperation with CPSC, Maxfield and Oberton initiated a recall of Buckyballs labeled for
ages 13+. Even before the recall was announced, Maxfield and Oberton, with the agreement of CPSC
Compliance staff, relabeled its Buckyballs4P packaging and instructions in March 2010 with a strong
warning label.
But Maxfield and Oberton didn't stop with warning labels. That was only the starting point.
The safety program that Maxfield and Oberton initially put in place in 2010 was outlined in a June 7,
2010, letter to Carolyn Manley, Team Lead, Children's Regulated Products, Office of Compliance and
Field Operations (Copy attached). The CPSC staff has effectively endorsed Maxfield and Oberton's
policies and procedures and certainly has not objected to them. As reflected in the June 7, 2010 letter,
Maxfield and Oberton, in addition to packaging warnings, instructions and labeling that make clear that
Buckyballs are not for children, also asked on-line stores to appropriately age-grade the product and to
use the warning labels accepted by the CPSC Compliance staff. In addition Maxfield and Oberton has
strict selling guidelines and does not allow retailers to sell its products unless they meet its criteria, i.e.,
does not sell children's products exclusively, sells sufficient quantities of adult products, and segregates
Buckyballs from children's products.
Maxfield and Oberton worked cooperatively with CPSC and Chairman Tenenbaum to warn parents to
keep high-powered adult magnets away from children. See CPSC Press Release dated November 10,
2011. (http://www.cpsc.gov/CPSCPUB/PREREL/prhtml12/12037.html). Maxfield and Oberton also
participated in a video news release with Chairman Tenenbaum. In this release, CPSC urged consumers
"who have purchased magnet sets for children younger than 14 years of age (or households with
children under 14 years of age) to remove access to the sets by children immediately and contact the
firms for a refund," implicitly suggesting that the product is appropriate and free of defects for adult
use.
Maxfield and Oberton has worked cooperatively with the Commission to warn and educate consumers
and parents about the safe use of its products and the intended age group for its products. At a meeting
with CPSC staff on April10, 2012, Howard Tarnoff, Legal Advisor in the Office of Compliance, urged
Maxfield and Oberton to establish an adult magnet manufacturers coalition to promote the safe use and
labeling of magnets. It has done so and has recently given the CPSC a status update of this coalition and
its founding members. Indeed, Maxfield and Oberton has been willing to implement suggestions of
CPSC staff to minimize the potential of children accessing or ingesting its products, thus making the
preliminary hazard determination as to its products all the more surprising.
Maxfield and Oberton has acted responsibly and reasonably by enhancing its procedures to reasonably
assure its Buckyballs and BuckycubesrM products are sold only to adults. As stated above, it places
restrictions on retailers where children's products are a large percentage of their sales and does not sell
its products to retailers who sell children's products exclusively (Responsible Seller Agreement
41 Page
attached), and it instructs retailers to ask purchasers if they are buying the product for a child and to
warn them it is inappropriate for children under 14. If Maxfield and Oberton finds that a retailer has
displayed or sold its products incorrectly, it is dropped from its authorized seller list. Maxfield and
Oberton also provides retailers with point-of-sale warnings that say "Keep Away From All Children" and
includes the warning on its website and in five places on the product and its packaging.
Maxfield and Oberton has gone even beyond these measures by publishing a safety section on its
website (www.magnetsafety.com), pulling together a medical advisory group to assist it in developing
materials for pediatricians and emergency room nurses and physicians to help them in the rapid
diagnosis and treatment of magnet ingestion, should this occur. The advisory group is made up of
pediatricians, emergency room physicians and toxicologists, includin.g one doctor who is all three.
(http://www.getbuckyballs.com/safety/medical-professionals/).
More specifically, in its response to CPSC's May 15, 2012, request for a Full Report, Maxfield and
Oberton detailed its safety program. With the risk of being repetitious, the program bears repeating.
The safety program includes, among other things,
Warning labels on the product, packaging and instructions in five locations.
Maxfield and Oberton does not knowingly sell its products to retailers that sell only products for
children.
Retail stores that sell products primarily though not exclusively for children must answer several
questions and sign a Responsible Sellers Agreement that allows Maxfield and Oberton to
determine whether to provide its products to the retailer for sale.
Maxfield and Oberton provides retailers that appear to be general use stores a Responsible
Sellers Notice.
Each shipment of product sold to retailers includes in the container a Responsible Sellers
Notice.
Maxfield and Oberton established a magnet safety website (magnetsafety.com) in which it
includes considerable information about high-powered magnets, the risk to children and why
the magnets must be kept away from all children.
Maxfield and Oberton informs retailers that its products are intended for adults only.
Maxfield and Oberton provides counter cards to retailers. It provides safety information for its
sales representatives.
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Detailed information about Maxfield and Oberton's safety program can be found in the answers to
questions 10, 11, 13, 19 and 29 of the May 25, 2012, Full Report submission. The voluminous materials
supporting those answers in the binders that accompanied the Full Report response (Tabs 10, 11, 13, 19
and 29, among others) provided to the Compliance staff, set forth Maxfield and Oberton's long-
standing, comprehensive safety program and procedures.
In selling products directly to consumers through its website, www.getbuckyballs.com, Maxfield and
Oberton includes safety warnings. Before consumers can purchase products from the website, they
must check a box acknowledging that the products should be kept away from all children. See Tab 19,
Section K of the binders accompanying the May 25, 2012, Full Report
& WARNING! Keep Away From All Children
U I understand that Buckyballa/Buckycubea are high
powered magnets and ahauld be kapt away from all
children! Buckyballs/BIJckycubes are not to be put in nose,
mouth, or near pacemakers. Swallowed magnets can stick to
Intestines causing serious injury or death. I will seek
Immediate medical attention If magnets are swallowed or
Inhaled.
Through Maxfield and Oberton's leadership, on Wednesday June 6, 2012, five manufacturers of high-
powered magnets sent a letter to Len Morrisey, Director, Standards Development of ASTM International
(copy enclosed) requesting "the formation of a voluntary standard for the labeling of high-powered
magnets ("loose as received magnets with a flux index greater than 50 that are small objects as defined
in F963-08, Section 4.6," and that are intended for adults, i.e., those persons 14 years of age and older").
The objective is to attain a broadly-accepted labeling standard agreed to by regulators, consumer
groups, manufacturers and citizens interested in this category.
At no time has CPSC staff voiced any issue with these activities.
In addition, on June 8, 2012, working through Association Headquarters, Inc., an association
management company accredited by the AMC Institute (to ANSI standard), six manufacturers of high-
powered magnets formed the "Coalition for Magnet Safety" with a mission "To protect the public
through responsible labeling, promotion, distribution, and sales of high-powered, Rare Earth magnets
intended for adult use." This responds directly to Howard Tarnoff's suggestion, related above.
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To Maxfield and Oberton's knowledge, there has never been an incident of ingestion of multiple
magnets of one of its BuckybaiJsf> involving a person 14 years of age or older. To its knowledge, there
has never been an incident of ingestion by a person of any age involving a BuckycubesTM product.
Regrettably, there is no indication in your July 8, 2012, letter that the staff read, let alone considered,
any of the above mentioned information in making its preliminary determination of hazard. Nowhere in
your letter do you recognize the steps, supported by the CPSC staff, that Maxfield and Oberton has
taken to minimize the potential for children gaining access to or ingesting its products nor have you
explained why those steps and any other reasonable steps that the staff might suggest are not
appropriate. Indeed, if anything, CPSC has contributed to any potential for ingestion by failing to act
against entities like Amazon.com that allowed on-line retailers to market and promote their products as
children's products despite repeated requests by Maxfield and Oberton that CPSC take action. It is a bit
ironic that the CPSC Compliance staff is finally taking action but taking it against the one company that
has been a leader in educating consumers about keeping its products away from children, placing sales
restrictions on its retailers, keeping the CPSC staff informed of its activities, and working cooperatively
with the Commission to prevent misuse of its products. Even if CPSC staff is pursuing recalls on an
industry-wide basis, there is no basis for taking action against Maxfield and Oberton.
Maxfield and Oberton is confused by the preliminary determination. For an unregulated product to be a
substantial product hazard, there must be a product defect which creates a substantial risk of injury to
the public. In your letter, you describe a potential injury scenario associated with high-powered
magnets but fail to explain why Buckyballsf> and Buckycubes'M in particular are a substantial product
hazard in light of the extensive safety program Maxfield and Oberton has in place for its products.
Moreover, the injury scenario you describe has existed since high-powered magnets marketed and
promoted for adults were first introduced into the market years ago.
The Preliminary Determination Letter Is Unsupported by Risk Analysis
Obviously, in the worst-case scenario a child could swallow several magnets if they were permitted
access to these products, contrary to the CPSC-accepted warnings the Company has placed on its
packaging and instructions, and an intestinal injury could result. The sheer fact that Maxfield and
Oberton has been proactive in all areas of education and outreach shows the CPSC that it cares about
safety and certainly does not want to see any child gain access to its-products and thus face the scenario
described. Nevertheless, the rate of incidents per product appears exceedingly small in relation to the
number of individual products sold and in use over time. Any real world analysis of risk would likely
note that given the number of individual products sold, and in use daily, that the risk of serious injury is
highly remote. We note in this regard that these products are extremely popular in the marketplace, in
growing demand, and that a substantial and supportive user population has developed around the
Buckyballs and Buckycubes'M products.
71 Page
In considering risk, CPSC cites only to the injury that might occur, but fails to address, as is required, the
likelihood of injury. For an injury to occur, more than one magnet must be available to a child. Contrary
to express CPSC accepted warnings, a child has to discover the magnet, perhaps mistake it for candy or
another item to be eaten, or simulate a tongue piercing, swallow more than one magnet in close enough
proximity to another, and the magnets have to align in a way that causes injury rather than passing
harmlessly through the digestive system without detection and abatement. The number of such
variables that affect the likelihood calculus for magnets is still not fully understood. Certainly it is a fact
that the risk of injury to a mouthing child from ingestion of multiple magnets is more widely understood
today than five years ago. And given express CPSC-accepted warnings that warn adults of such risk and
admonish them not to permit or provide access to children, greater acceptance of assumed
responsibility for such risk by adult users of such products and the relatively rare occurrence in relation
to total individual magnets in circulation and use, CPSC staff cannot meet its burden of establishing that
the risk is so unreasonable as to justify a ban of the product.
A significant percentage of incidents, including some of the most highly publicized, have involved pre-
teens or other children deliberately putting multiple magnets in their mouths to simulate piercings.
Deliberate misuse by older youths of products, including common household products, with injury
consequences is not uncommon. While such misuse may call for greater efforts at public education of
potential risks, as the CPSC and other agencies have done in many cases (and as the Company has done
here), it is not an appropriate basis to order a recall of all such products or ban them entirely from the
market when the products are entirely safe when used as intended.
Notwithstanding the foregoing, it is clear that the CPSC staff cannot simply abrogate the legal
requirements for due process required under rulemaking or adjudication via summary issuance and use
of a "preliminary determination letter," or release of public statements, not strictly in accordance with
the requirements of CPSA Section 6, to achieve a de-facto ban or elimination of the product from the
marketplace, merely because some believe it is a desirable outcome. Due process safeguards cannot be
ignored when the consequences of agency action would be to destroy a business, eliminate jobs and
livelihoods without regard to required legal process that safeguards the public from arbitrary and
capricious action. Contrary action will not only lead to an impractical result, but it is difficult to reconcile
such an analysis with past CPSC actions regarding the Company's products.
Conclusion
Maxfield and Oberton's Buckyballs and BuckycubesM products are not defective and are not a
substantial product hazard. The CPSC describes a product defect as " ... a fault, flaw, or irregularity that
causes weakness, failure or inadequacy in form or function." (16 CFR 1115.4) There is no fault, flaw or
irregularity that causes weakness, failure or inadequacy in form or function.
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A product may contain a defect if the design presents a risk of injury to the public. (16 CFR 1115.4).
Buckyballs and BuckycubesM do not present a risk of injury to those persons for whom it is intended,
persons 14 years of age and older. As stated above, Maxfield and Oberton is unaware of any ingestions
of multiple magnets associated with Buckyballs involving persons 14 years of age and older; and is
unaware of any ingestion of BuckycubesM by persons of any age. Further, the shape of BuckycubesM
makes it much less likely that the product would be ingested. Thus, it is hard to understand how or why
BuckycubesM would be included within the staff's preliminary determination.
Because Maxfield and Oberton has taken appropriate precautions to educate purchasers on how to use
its products correctly and to warn them not to use them incorrectly, its products should not be banned
from the marketplace and certainly not without the Commission engaging in a rulemaking procedure
under 15 U.S.C. 2057. CPSC does not ban products for older children with small parts, recognizing
that different age children should appropriately have access to products suitable for their age. Even
where the CPSC has perceived an unacceptable risk from adult products when used by children, the
Commission has proceeded through required rulemaking procedures (see, e.g., 16 CFR Part 1306) (lawn
darts). Maxfield and Oberton believes that in such a proceeding, the information presented by all
interested parties would demonstrate why a ban of these products is unsupportable. Similarly, where
the Commission seeks to specify a class of consumer product to be a substantial product hazard, certain
prerequisites must be met and the Commission must make such a determination by rule. 15 U.S.C.
20640). See, for example, 16 CFR Part 1120.
Maxfield and Oberton requests that you reconsider the preliminary determination and that you review
all of the materials included with its full report submission on May 25, 2012. If you continue to believe
that a preliminary determination is warranted, Maxfield and Oberton requests that you explain to it why
the procedures it has in place- procedures unique in the industry- would not preclude a preliminary
determination. The Company has the right to review realistic substantial evidence that supports the
staff's alleged, albeit "preliminary," conclusion that its products present a substantial product hazard.
As discussed above, Maxfield and Oberton has made reasonable decisions and conducted itself in full
accordance with CPSC requests with respect to how it labels and markets its products under a robust
safety program accepted by the Commission staff through delegated authority. The CPSC staff position
as currently enumerated in your correspondence is inconsistent with prior Commission action and is
based on highly speculative risk and hazard assumptions without concordant analysis. We fully
recognize that this issue presents significant challenges to the Commission. However, we hope that the
CPSC staff is still constrained by and committed to the law and that h r will not be a need to litigate
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these issues further. Maxfield and Oberton continues to be ready to work with the CPSC to address
potential issues with its products. We await you suggestions in this regard.
Sincerely,
Alan H. Schoem
10 I Page
Buckyballs /Buckycubes Responsible Seller Agreement
March 29, 2010- Updated October 31, 2011
You have placed an order with Maxfield & Oberton LLC and
requested to be a BuckyballsB/Buckycubes'M reseller. Before
product can be supplied, please answer the following four
questions, review the notices and sign and email or fax back to
(917) 591-7924 or getbuckyballs@gmail.com.
QUESTIONS (MUST BE ANSWERED):
1. Does your store(s) sell products other than children's products?
Do not put in nose or mouth.
Swallowed magnets can stick to
intestines caus1ng serious injury or death.
Seek immed1ate medical attention if
magnets are swallowed or inhaled.
2. What percentage of your store(s) shelf space is devoted to non-children's products?
3. Do you have a way to limit sales of Buckyballs/Buckycubes'M to adults only? How?
4. Do you have an area(s) within your store for products for adults that is separate from areas with
products for children?
Notices
1. I understand that Buckyballs/Buckycubes'M manufactured by Maxfield and Oberton consists of high-
powered Rare Earth magnets.
2.1 understand that Buckyballs/Buckycubes'M are not for children (persons under 14) and if swallowed,
the magnets can stick to the intestines causing serious injury or death.
3. I agree that I will display Buckyballs/Buckycubes'M only with products intended for adults (persons 14
and older.)
4. I agree that I will not display Buckyballs/Buckycubes'M with children's products or in proximity to
children's products.
5. I agree that I will not advertise, offer to sell or sell Buckyballs/Buckycubes'M as products intended for
children.
6. I agree that I will alert my sales staff to the risk of selling Buckyballs
11
/Buckycubes'M to or for use by
children.
7. I agree that I will train my sales staff on the risks associated with children gaining access to
BuckyballsiiD/Buckycubes'M and instruct them to sell only to adults.
8. Maxfield & Oberton LLC reserves the right to refuse to sell Buckyballs/Buckycubes'M to any reseller
based on information provided in this agreement and to cease selling to any reseller for failure to
comply with the provisions herein.
Retail Store Name and Address Retail Store Owner Printed Name
Retail Store Owner Signature Date
EXHIBITD
4330 EAST WEST HIGHWAY
BETHESDA, MD 20814
Cheryl A. Falvey
General Counsel
Via nlccironic and First Class Muil
Alan II. Schocm, Esq.
14S09 Rolling Green Way
North Potomac, Maryland 20878
D ~ i l l Mr. Schol.!m:
July 20,2012
Rc: Rcqul:st for Statement
Tel: 301-504-7642
Fax. 301-504-0403
Thank you for your July 17.2012 letter to CPSC Compliance Officer Joe Williams. You
state that Mr. William's letter to Brookstonc concerned various types or aggregated masses of
small, powerful, individual magnets and that he asked l3rookstone voluntarily stop selling the
magnets pending the outcome of our investigation. You further state that this communication to
13rookstonc is based on the fact that Maxiield and Oberton identified Brookstonc as u retailer in a
May 25, 2012 full Report to the CPSC.
I can assure you that no violation ofthe disclosure restrictions has taken place lor any
section 15 inl(mnation Maxfield and Oberton submitted in its Full Repoti. Brookstone was
identilicd as a retailer independent from the section 15 report submitted by Maxlicld and
Oberton. As you knowl the Commission has detennincd that the referenced section 6(b)(5)
restrictions to not apply to information independently obtaint:d or prepared by Commission staff.
16 C.F.R. 11 01.63(c).
Furthcnnore, the Commission staff has statutor)' authority tn invt::stigate retailers when it
believes that they may be selling a product that presents a substantial product hazard. Your
suggestion of intimidation by the staff is unfounded and belit:d by the tact that some retailers
haw not agreed to stop sale. As you acknowledged, the correspondence to retailers contained a
generic description of magnets. While yot1 may represent to statl' that the tim1, Brooksttmc, is
selling only one type of magnet, staff has a duty t.o investigate fully and request information
under the circumstances.
At your request, I am coniirm1ng that it is not a violation of any law administered by tht.!
CPSC for any retailer lo continue to sell Buckyballs and Buckycubes. We are willing to
CPSC Hotlflle: 1-80Q..G3B.CPSC (2772) * CPSC's Web Site hllp.llwww cpsc gov
Alan II. Schoc:m, Esq.
Page 2
July 20, :.!0 I 2
communicate that directly to the retailers that staff has contacted. As you note. stalfrcqucsts
have been lhr voluntary action. If a retailer continues to sell your client's product. it is not in
violation ol' any law CPSC administers until we have ohtaincd a court order, which is the next
stt:p in our process alter the issuance of a PD. or the tirm voluntarily agrees to a corrective
action. The scope or administrative action necucd to be taken by the agency to address the
concern n.:garding a potential substantinl product hazard is minimi;-cd to the \!X tent we
can obtain voluntary C()rrective actions tiom numull1ctmcrs or rt!tailers.
Sincerely,
( I ! I' I /I
Cheryl /\.. Falvey
EXHIBITE
4330 EAST WEST HIGHWAY
BETHESDA, MARYLAND 20814-4408
Record of Commission Action
Commissioners Voting by Ballot*
This is a DRAFT RCA.
It will be replaced by a Final RCA.
Commissioners Voting: Chairman Inez M. Tenenbaum
Commissioner Nancy A. Nord
Commissioner Anne M. Northup
Commissioner Robert S. Adler
Recommendation for Administrative Complaint against Maxfield and Oberton Holdings, LLC
(Briefing package dated July 23, 2012, OS No. 5274)
DECISION:
The Commission voted (3-1) to authorize issuance of the draft Complaint, attachment A of the
briefing package, against Maxfield and Oberton Holdings, LLC., seeking mandatory remedies
under Section 15 ofthe Consumer Product Safety Act with regard to the safety risk presented by
their magnet products, Buckyballs and Buckycubes. Chairman Tenenbaum and
Commissioners Northup and Adler voted to authorize issuance of the Complaint. Commissioner
Nord voted to not authorize issuance of the Complaint.
*Time Critical Ballot vote due July 25,2012
For the Commission:
Todd A. Stevenson
Secretary
CPSC Hotline: 1-800-638-CPSC(2772) u CPSC's Web Site: http://v.ww.cpsc.gov
EXHIBITF
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION
)
In the Matter of )
)
MAXFIELD AND OBERTON HOLDINGS, LLC )
)
)
)
)
Respondent. )
COMPLAINT
Nature of Proceedings
CPSC DOCKET NO. 12-1
1. This is an administrative enforcement proceeding pursuant to Section 15 ofthe
Consumer Product Safety Act ("CPSA"), as amended, 15 U.S.C. 2064, for public notification
and remedial action to protect the public from the substantial risks of injury presented by
aggregated masses of high-powered, small rare earth magnets known as Buckyballs and
Buckycubes (collectively, the "Subject Products"), imported and distributed by Maxfield and
Oberton Holdings, LLC ("Maxfield" or "Respondent").
2. This proceeding is governed by the Rules of Practice for Adjudicative
Proceedings before the Consumer Product Safety Commission (the "Commission"), 16 C.F.R.
Part 1025.
Jurisdiction
3. This proceeding is instituted pursuant to the authority contained in Sections 15(c),
(d) and (f) of the CPSA, 15 U.S.C 2064 (c), (d) and (f).
Parties
4. Complaint Counsel is the staff of the Division of Compliance within the Office of
the General Counsel of the Commission ("Complaint Counsel"). The Commission is an
independent federal regulatory agency established pursuant to Section 4 of the CPSA, IS U.S.C.
2053.
5. Respondent Maxfield is a domestic corporation with its principal place of
business located at 180 Varick Street, Suite 212, New York, New York, 20014. Respondent is
an importer and distributor of the Subject Products known as Buckyballs and Buckycubes.
6. As importer and distributor of the Subject Products, Respondent is a
"manufacturer" and "distributor" of a "consumer product" that is "distributed in commerce," as
those terms are defined in CPSA sections 3(a)(S),(7), (8) and (11) of the CPSA, 15 U.S.C.
2052(a)(5),(7), (8) and (11).
The Consumer Product
7. The Subject Products are imported and distributed in U.S. commerce and offered
for sale to consumers for their personal use in or around a permanent or temporary household or
residence, a school, and in recreation or otherwise. The Subject Products consist of small,
individual magnets that are packaged as aggregated masses in different sized containers holding
10, 125, and 216 small magnets, ranging in size from approximately 4.01 mm to 5.03 mm, with
a variety of coatings, and a flux index of over 50. Upon information and belief, the flux of the
Subject Products has reached levels ranging from 204.1 to 556kg
2
mm
2
Surface Flux Index.
2
8. Upon information and belief, Buckyballs, which are small spherically shaped
magnets, were introduced in U.S. commerce in March 2009.
9. Upon information and belief, Buckycubes, which are small cube shaped
magnets, were introduced in U.S. commerce in October 2011.
I 0. Upon information and belief, the Subject Products are manufactured by Ningo
Prosperous Imp. & Exp. Co. Ltd., ofNingbo City, in China.
11 . Upon information and belief, Respondent initially advertised and marketed
Buckyballs to appeal to children, calling it an "amazing magnetic toy."
12. Upon information and belief, Respondent advertised and marketed Buckyballs
by comparing its appeal to that of other children's products such as erector sets, hula hoops, and
silly putty.
13. Upon information and belief, despite making no significant design or physical
changes to the product since its introduction in 2009, Respondent subsequently rebranded
Buckyballs as an adult executive desk toy and/or stress reliever, marketing and advertising it
as such.
14. The Subject Products are sold with a carrying case and range in retail price from
approximately $19.95 to $100.00. Upon information and belief, the Subject Products can also
be purchased in sets of 10 for $3.50 without a carrying case.
15. Upon information and belief, more than 2,000,000 Buckyballs have been sold to
consumers in the United States.
16. Upon information and belief, more than 200,000 Buckycubes have been sold to
consumers in the United States.
3
The Subject Products Create a Substantial Risk of Injury to the Public
17. The Subject Products pose a risk of magnet ingestion by children below the age of
14, who may, consistent with developmentally appropriate behavior, place single or numerous
magnets in their mouth. The risk of ingestion also exists when adolescents and teens use the
product to mimic piercings of the mouth, tongue, and cheek and accidentally swallow the
magnets.
18. If two or more of the magnets are ingested and the magnetic forces of the
magnets pull them together, the magnets can pinch or trap the intestinal walls or other digestive
tissue between them, resulting in acute and long-term health consequences. Magnets that attract
through the walls of the intestines result in progressive tissue injury, beginning with local
inflammation and ulceration, progressing to tissue death, then perforation or fistula formation.
Such conditions can lead to infection, sepsis, and death. Ingestion of more than one magnet
often requires medical intervention, including endoscopic or surgical procedures. However,
because the initial symptoms of injury from magnet ingestion are nonspecific and may include
nausea, vomiting, and abdominal pain, caretakers, parents, and medical professionals may easily
mistake these nonspecific symptoms for other common gastrointestinal upsets, and erroneously
believe that medical treatment is not immediately required.
19. Medical professionals may not be aware of the dangers posed by ingestion of the
Subject Products and the corresponding need for immediate evaluation and monitoring. A delay
of surgical intervention due to the patient's presentation with non specific symptoms and/or a
4
lack of awareness by medical personnel of the dangers posed by multiple magnet ingestion can
exacerbate life-threatening internal injuries.
20. Magnets which become affixed through the gastrointestinal walls and are not
surgically removed may result in intestinal perforations which can lead to necrosis, the
formation of fistulas, or ultimately, perforation of the bowel and leakage of toxic bowel contents
into the abdominal cavity. These conditions can lead to serious injury and possibly even death.
21. Endoscopic and surgical procedures may also be complicated in cases of multiple
magnet ingestion due to the attraction of the magnets to the metal equipment used to retrieve the
magnets.
22. Children who undergo surgery to remove multiple magnets from their
gastrointestinal tract are also at risk for long-term health consequences, including intestinal
scarring, nutritional deficiencies due to loss of portions of the bowel, and possible fertility
issues for women.
COUNT I
The Warnings and Labeling Are Defective as they Do Not Effectively Communicate
the Hazards Associated with Ingestion of the Subject Product
23. Paragraphs 1 through 22 are hereby re-alleged and incorporated by reference as
though fully set forth herein.
24. Since Buckyballs were introduced into commerce in 2009, numerous incidents
involving ingestions by children under the age of 14 have occurred.
25. Upon information and beliet: on January 28, 2010, a 9-year-old boy used
5
BuckyballsciD to make tongue and lip rings, and accidentally ingested seven magnets. He was
treated at an emergency room.
26. Upon information and belief, on September 5, 2010, a 12-year-old girl
accidentally swallowed two Buckyballs. She sought medical treatment at a hospital, including
x-rays and monitoring for intection and internal damage.
27. Since March 2009 to approximately March 11, 2010, the Subject Products were
sold in packaging that contained the following warning label: "Warning: Not intended for
children. Swallowing of magnets may cause serious injury and require immediate medical care.
Ages 13+.
11
28. In February 2010, CPSC notitied Respondent that the Buckyballs failed to
comply with the requirement that such products be marketed to children 14+. On or about
March 11, 2010, Respondent changed its packaging, warnings, instructions, and labeling on
Buckyballs and later conducted a recall of the products.
29. Since recalling Buckyballs, Respondent agreed to certain labeling and
marketing changes in an effort to prevent the sale of Buckyballs to children under 14.
30. Despite the marketing and labeling changes made by the Respondent, ingestion
incidents continued to occur.
31. Upon information and belief, on or about December 23, 2010, a 3-year-old girl
ingested 8 Buckyballs magnets she found on a refrigerator in her home, requiring surgery to
remove the magnets. The magnets had caused intestinal and stomach perforations, and had also
become embedded in the girl's trachea and esophagus.
32. Upon information and belief, on or about January 6, 2011, a 4-year-old boy
6
suffered intestinal perforations after ingesting three Buckyballs magnets he thought were
chocolate candy because they looked like the decorations on his mother's wedding cake.
33. ln November 2011, the Commission issued a public safety alert warning the
public of the dangers of the ingestion of rare earth magnets. However, such ingestion incidents
continue to occur. Since the November 10, 2011 safety alert, the Commission has received over
one dozen reports of children ingesting the Subject Products, many of which required surgical
intervention.
34. Upon information and belief, on or about January 17, 2012, a 1 0-year-old girl
accidentally ingested two Buckyballs after using them to mimic a tongue piercing. The
magnets became embedded in her large intestine, and she had to undergo x-rays, CT scans,
endoscopy, and an appendectomy to remove them. The girl's father had purchased the
Buckyballs for her at the local mall.
35. Notwithstanding the labeling, warnings, and efforts taken by Respondents,
ingestion incidents requiring surgery continue to occur because such warnings are ineffective.
36. Warnings are ineffective because parents and caregivers do not appreciate the
hazard associated with Subject Products and magnet ingestion and will continue to allow
children to have access to the Subject Products. Children cannot and do not appreciate the
hazard and will continue to mouth the items, swallow them, or, in the case of young adolescents
and teens, mimic body piercings.
37. Warnings are ineffective because once the Subject Product is removed from its
carrying case, the magnets carry no warning guarding against ingestion or aspiration, and the
small size of the individual magnets precludes the addition of such a warning.
7
38. Warnings are ineffective because individual magnets are easily shared among
children such that many end users of the product are likely to have had no exposure to any
warning.
39. The Subject Products are defective because their labeling and warning labels
cannot guard against the foreseeable misuse of the product and prevent the substantial risk of
injury to children.
40. Therefore, the warnings and labeling on the Subject Products are defective
pursuant to sections 15(a)(2) of the CPSC, 15 U.S.C. 2064 (a)(2).
COUNT II
The Subject Products as Designed Are Defective and Pose a Substantial Risk of
41. Paragraphs 1 through 40 are hereby realleged and incorporated by reference as
42. The Subject Products are defective because they do not operate exclusively as
intended and present a risk of injury to the public. Although the Subject Products warn against
placing the magnets in one's mouth, the misuse is forseeable.
43. The Subject Products present a risk of substantial injury to children because the
magnets are intensely appealing to children due to their tactile features, their small size, and their
highly reflective, shiny metallic coatings.
44. The Subject Products are also appealing to children because they are smooth,
unique, and make a soft snapping sound as they are manipulated.
45. The Subject Products also move in unexpected, incongruous ways as the poles o ,
8
the magnets move to align properly, which may evoke a degree of awe and amusement among
children.
46. The design of the Subject Products presents a risk of injury because they do not
operate as intended; that is, they do not act as desk toys or manipulatives that are handled solely
by adults and remain on adults' desks out of the reach of children.
47. The packaging of the Subject Products is also a design defect. The plastic
carrying case that holds the Subject Products does not prevent children from accessing the
magnets, nor does it prevent individual magnet pieces from separating from the product. In
addition, the packaging of the Subject Product does not allow parents and caregivers to
appreciate if a magnet is missing, and potentially, within the reach of a young child who may
mouth or ingest the product.
48. Different packaging cannot remedy the hazard posed by Subject Products because
users are unlikely to return the magnets to any case, regardless of the packaging design. Users of
the Subject Products are unlikely to disassemble magnet configurations, many of which are
elaborate and time-consuming to create, after each use.
COUNT III
The Subject Products Are a Substantial Product Hazard
50. The Subject Products present a substantial risk of injury because the pattern of
defect-failure to operate as intended, and to effectively communicate warnings that the product
should not be purchased for or used by children under the age of 14--is present in all of the
9
Subject Products.
51. The Subject Products, therefore, present a substantial product hazard within the
meaning of Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2), by reasons of the substantial
risk of injury or death alleged in paragraphs 1 through 48 above.
52. The Respondents have refused to voluntarily stop sale and conduct a recall of the
Subject Products.
Relief Sought
Wherefore, in the public interest, Complaint Counsel requests that the Commission:
A. Determine that Respondents' Subject Products known as Buckyballs and
Buckycubes present a "substantial product hazard" within the meaning of Section 15 U.S.C.
2064(a)(2).
B. Determine that extensive and effective public notification under Section 15(c) of
the CPSA, 15 U.S.C. 2064(c), is required to adequately protect children from risks of injury
presented by rare earth magnet products and order Respondents under Section 15( c) of the
CPSA, 15 U.S.C. 2064(c) to:
( 1) Cease importation and distribution of the product;
(2) Notify all persons that transport, store, distribute, or otherwise handle the
rare earth magnet products, or to whom such product has been transported, sold,
distributed, or otherwise handled, to cease immediately distribution of the product;
(3) Notify appropriate state and local public health officials;
(4) Give prompt public notice of the defect in the Subject Products, including
the incidents and injuries associated with ingestion or aspiration, including posting clear
10
and conspicuous notice on its Internet website, and providing notice to any third party
Internet website on which Respondents have placed the product for sale, and
announcements in languages other than English and on radio and television where the
Commission determines that a substantial number of consumers to whom the recall is
directed may not be reached by other notice;
(5) Mail notice to each distributor or retailer of the Subject Products; and
(6) Mail notice to every person to whom the person required to give notice
knows such product was delivered or sold.
C. Determine that action under Section 15(d) ofthe CPSA, 15 U.S.C. 2064(d), is in
the public interest and additionally order Respondents to:
(1) Refund consumers the purchase price of the Subject Products;
(2) Make no charge to consumers and to reimburse consumers for any
reasonable and foreseeable expenses incurred in availing themselves of any remedy
provided under any Commission Order issued in this matter, as provided by Section 15
U.S.C. 2064(e)(l);
(3) Reimburse retailers for expenses in connection with carrying out any
Commission Order issued in this matter, including the costs ofreturns, refunds and/or
replacements, as provided by Section 15 U.S.C. 2064(e)(2);
(4) Submit a plan satisfactory to the Commission, within ten (1 0) days of
service of the Final Order, directing that actions specified in Paragraphs B( 1) through (5)
and C(1) through (3) above be taken in a timely manner;
(5) To submit monthly reports, in a format satisfactory to the Commission,
11
documenting the progress of the corrective action program;
(6) For a period of five (5) years after issuance of the Final Order in this
matter, to keep records of its actions taken to comply with Paragraphs B( 1) through (5)
and C(l) through (4) above, and supply these records to the Commission for the purpose
of monitoring compliance with the Final Order;
matter, to notify the Commission at least sixty (60) days prior to any change in its
business (such as incorporation, dissolution, assigrunent, sale, or petition for bankruptcy)
that results in, or is intended to result in, the emergence of a successor corporation, going
out of business, or any other change that might affect compliance obligations under a
Final Order issued by the Commission in this matter; and
D. Order that Respondents shall take other and further actions as the Commission
deems necessary to protect the public health and safety and to comply with the CPSA.
ISSUED BY ORDER OF THE COMMISSION:
Dated this2..>"day of July, 2012
Executive Director
Bethesda, MD 20814
Tel: (301) 504-7854
12
Mary B. Murphy, Assistant General Counsel
Division of Compliance, Office of General Counsel
Bethesda, MD 20814
Tel: (301) 504-7809
Jennifer Argabright, Trial Attorney
Sarah Wang, Trial Attorney
Complaint Counsel
Division of Compliance
Office of the General Counsel
Bethesda, MD 20814
Tel: (30 I) 504-7808
13
CERTIFICATE OF SERVICE
I hereby certify that on Julyc.25-:-2012, I served the foregoing Complaint upon all
parties of record in these proceedings by hand-delivering and mailing, certified mail,
postage prepaid, a copy to each at their principal place of business, and courtesy copy to
counsel, as follows:
180 Varick Street
Suite 212
New York, NY I 0004
Alan H. Schoem, Esquire
Law Office of Alan Schoem LLC
14809 Rolling Green Way
North Potomac, Maryland 20878
~ ~ t J Mary B. ~ u ~ '\
Complaint Counsel for
14
EXHIBITG
Statement of Commissioner Buerkle on the Zucker Settlement
Agreement
MAY 14, 2014
I voted to approve the proposed settlement, but there is an aspect of this case that I find troubling. The
consent agreement before us names as a Respondent one Craig Zucker, a former Chief Executive
Officer of Maxfield and Oberton Holdings, LLC (hereinafter "Maxfield"). Upon review of the public record,
however, it appears that, the Commission never approved the issuance of a complaint against Mr.
Zucker. I believe the case against Mr. Zucker should never have gotten started without an affirmative
Commission vote approving the issuance of a complaint against him.
Under CPSC rules, "any adjudicative proceedings .. . shall be commenced by the issuance of a
complaint authorized by the Commission . ... " 16 C.F.R. 1025.11(a) (emphasis added). The rules
prescribe the form and content of such a complaint. Of primary significance here, it must include
"Identification of each respondent or class of respondents." /d. 1025.11(b)(2)(emphasis added). Other
requirements include a "clear and concise statement of the charges, sufficient to inform each respondent
with reasonable definiteness of the factual basis or bases of the allegations of violation or hazard." /d.
1025.11 (b)(3)(emphasis added).
The rules permit the Presiding Officer in an adjudicative proceeding to approve an amended complaint,
but only if the amendment "do(es] not unduly broaden the issues in the proceedings or cause undue
delay." /d. 1025.13. Plainly, this provision was never intended to allow an expansion ofthe case
beyond what the Commission has authorized. Naming a new respondent or leveling a new charge would
fall outside the scope of the original complaint approved by the Commission. To allow such an
amendment without Commission approval would usurp the prerogative of the Commission under
1025.11 (a).
This reading of the rule was emphasized in the preamble that accompanied it. Commenters on the
proposed rule had expressed concern that allowing the Presiding Officer to permit certain amendments
could "alter the charges originally authorized by the Commission, thereby usurping the Commission's
function .... " Rules of Practice for Adjudicative Proceedings, 45 Fed. Reg. 29206, 29207 (col. 3) (May 1,
1980). In response, the Commission observed: "[S]ince 1025.11 (a) provides that only a complaint
authorized by the Commission may be issued, amendments to the complaint must come within the scope
of the Commission's authorization. Thus, neither the presiding officer nor the Commission's staff is
usurping the Commission's function." /d. at 29208 (col. 1).
The case before us started out as a case against Maxfield only. It began with a complaint filed in July
2012. That complaint was duly authorized by a majority vote of the Commission, and it states explicitly
that it was "ISSUED BY ORDER OF THE COMMISSION." See Complaint at 12 (July 25, 2012). Maxfield
was the one and only Respondent named in the July 25 complaint; it does not mention Mr. Zucker.
In September 2012, Complaint Counsel filed a motion for leave to file an amended complaint. Counsel
sought to add a count, based on a new theory, namely failure to comply with an applicable consumer
product safety rule. Again the complaint states that it was "ISSUED BY ORDER OF THE
COMMISSION." Amended Complaint at 19 (Sept. 18, 2012). In reality, however, the Commission had
not voted to approve the additional count.
Maxfield never responded to Complaint Counsel's motion seeking leave to file the amended
complaint. On November 16, 2012, the Presiding Officer granted the unopposed motion, and the
Amended Complaint was docketed. A few weeks later, Maxfield filed a Certificate of Dissolution.
In February 2013, Complaint Counsel responded to this unexpected development by moving to file a
Second Amended Complaint, which named Mr. Zucker as a new Respondent in his capacity as CEO of
Maxfield and Oberton and as an individual. The lodged Complaint again states that it was "ISSUED BY
ORDER OF THE COMMISSION." Second Amended Complaint at 21 (Feb. 11, 21 03). This
representation, however, was untrue. In reality, the Commission has never authorized any amendment
since the original complaint.
Mr. Zucker vehemently opposed the Second Amended Complaint, without conceding jurisdiction, on
various grounds. He argued that Section 15 of the Consumer Product Safety Act does not permit the
Commission to order a recall to be conducted by an individual officer or director of a corporation that
manufactures consumer products. Opposition to Motion for Leave to Amend Complaint in CPSC Docket
12-1, at 2 (Feb. 28, 2103). More generally, he stated that "bedrock principles of corporate law make clear
that corporate officers such as Mr. Zucker are not liable for the company's obligations, even if the
company has dissolved." /d.
The Presiding Officer disagreed with Mr. Zucker's analysis and issued an opinion ruling that Mr. Zucker
"may properly be included as a respondent in the instant proceeding." Order Granting Complaint
Counsel's Motion for Leave to File Second Amended Complaint in Docket Nos. 12-1 and 12-2, at 17 (May
3, 2013). Thereafter, the Presiding Officer also denied Zucker's motion for an interlocutory appeal on the
issue.
The question raised by Mr. Zucker-- when, if ever, an individual officer or director of a corporation can
properly be made a Respondent in a contested recall case-is one of enormous consequence for
consumers and manufacturers alike. The proposed settlement agreement before us leaves the question
open, and hence presents no occasion for us to address it. Our rules of practice reserve the decision as
to whom should be made a respondent in adjudicative proceedings for the Commission alone, and this
important policy question should never have been injected into the litigation without our prior approval. If
Complaint Counsel can alter our fundamental policy judgments about whom to sue and why, by
amending the complaint, then 1025.11 (a) is virtually meaningless.l
1
1
Despite my concerns about how this case unfolded, I do not think it necessary to vote against the
proposed settlement. Mr. Zucker has conceded our jurisdiction over him, "for purposes of settlement
only." Consent Agreement at 4. On review of the settlement, I see no basis for unraveling the parties'
negotiated agreement.
After my colleagues have had an opportunity to reflect on the issue I am raising, I hope we can remove
any lingering ambiguity on this important matter. If they do not agree that the current rule forbids adding
new counts or new respondents in an adjudication without our approval, then I propose that we modify
the rule as necessary to make our primacy in this regard unambiguous. However we proceed, we also
must ensure that no CPSC document indicates it has been "issued by order of the Commission" unless
that is true.
[1] A vexing aspect of this issue is that it is not easy for the Commission to reclaim its prerogative in the
matter once it is lost. This case illustrates the point. Complaint Counsel filed an amended complaint
which added a respondent. The Presiding Officer allowed the amendment and disallowed an
interlocutory appeal. At that point, the only way for the issue to come before the Commission would be if
the case were litigated all the way to an Initial Decision.
EXHIBITH
)
In the Matter of )
)
)
) CPSC DOCKET NO. 12-1
)
)
Respondent. )
______________________________ )
MOTION FOR LEAVE
TO FILE AMENDED COMPLAINT
Pursuant to 16 C.F.R 1025.13 of the Rules of Practice for Adjudicative
Proceedings ("Rules"}, Complaint Counsel moves this Court for leave to file an
Amended Complaint in the instant matter. A copy of the Amended Complaint is attached
as Attachment A. Under the Rules, the Presiding Officer "may allow appropriate
amendments and supplemental pleadings which do not unduly broaden the issues in the
proceedings or cause undue delay." 16 C.F.R. 1025.13.
The proposed Amended Complaint revises the Complaint by (1) clarifying the
count alleging that Buckyballs and BuckycubesTM (the ''Subject Products") present a
substantial product hazard under Section 15(a)(2) of the Consumer Product Safety Act
("CPSA"), 15 U .S.C. 2064(a)(2), because they contain defects that create a substantial
risk of injury to the public; and (2) adding a count alleging that the Subject Products
present a substantial product hazard under Section IS( a)( I) of the CPSA, 15 U.S.C.
2064(a)( I), because they fail to comply with an applicable consumer product safety rule
which creates a substantial risk of injury to the public. Complaint Counsel submits that
6
the filing of the Amended Complaint will neither unduly broaden the issues nor cause
undue delay.
Wherefore, Counsel requests that the Presiding Officer grant this motion and
allow Complaint Counsel leave to file the Amended Complaint.
Mary B. urphy, Assistan
Bethesda, MD 20814
Tel: (301) 504-7809
Seth Popkin, Attorney
Leah Wade, Attorney
Bethesda, MD 20814
2
Attachment A
,
)
In the Matter of )
)
)
)
)
)
Respondent. )
_____________________________)
CPSC DOCKET NO. 12-l
AMENDED COMPLAINT
1. This is an administrative enforcement proceeding pursuant to Section 15 of the
aggregated masses of high-powered, small rare earth magnets known as Buckyballs
("Buckyballs") and Buckycubes ("Buckycubes") (collectively, the "Subject Products"),
imported and distributed by Maxfield and Oberton Holdings, LLC ("Maxfield" or
"Respondent").
Proceedings before the Consumer Product Safety Commission (the "Commission"), 16 C.F.R.
Part 1025.
Jurisdiction
(d) and (f) of the CPSA, 15 U.S.C 2064 (c), (d) and (f).
Parties
independent federal regulatory agency established pursuant to Section 4 of the CPSA, 15 U.S.C.
2053.
5. Respondent Maxfield is a domestic corporation with its principal place of
business located at 180 Varick Street, Suite 212, New York, New York, 20014.
6. Respondent is an importer and distributor of the Subject Products.
7. As importer and distributor of the Subject Products, Respondent is a
"manufacturer" and "distributor" of a "consumer product" that is "distributed in commerce," as
those terms are defined in CPSA Sections 3(a)(S), (7), (8) and (11) of the CPSA, I 5 U.S.C.
2052(aXS), (7), (8) and (It).
8. Respondent imported and distributed the Subject Products in U.S. commerce and
offered them for sale to consumers for their personal use in or around a pennanent or temporary
household or residence, a school, and in recreation or otherwise. The Subject Products consist of
small, individual magnets that are packaged as aggregated masses in different sized containers
holding 10, 125, and 216 small magnets, ranging in size from approximately 4.01 mm to 5.03
mm, with a variety of coatings, and a flux index greater than 50.
9. Upon information and belief, the flux of Buckyballs ranges from approximately
414 to 556kg
2
mm
2
Surface Flux Index.
2
10. Upon information and belief, the flux ofBuckycubes ranges from approximately
204 to 288kglmml Surface Flux Index.
11. Upon information and belief, Buckyballs, which are small spherically-shaped
magnets, were introduced in U.S. commerce in March 2009.
12. Upon information and belief, Buckycubes, which are small cube-shaped magnets,
were introduced in U.S. commerce in October 2011.
13. Upon information and belief, the Subject Products are manufactured by Ningo
14. The Subject Products are sold with a carrying case and range in retail price from
approximately $19.95 to $100.00. Upon information and belief, the Subject Products can also be
purchased in sets of I 0 for $3.50.
15. Upon information and belief, more than 2,500,000 sets of Buckyballs have been
sold to consumers in the United States.
16. Upon information and belief, approximately 290,000 sets of Buckycubes have
been sold to consumers in the United States.
COUNT!
The Subject Products are Substantial Product Hazards Under
Section 15(a)(2) of the CPSA, IS U.S.C. 2064(a)(2), Because They Contain
Product Defects That Create a Substantial Risk of Injury to the Public
The Subject Products Are Defective Because
Their Instructions. Packaging. and Warnings Are Inadequate
17. Paragraphs I through 16 are hereby realleged and incorporated by reference as
3
18. A defect can occur in a product's contents, construction, finish, packaging,
warnings and/or instructions. 16 C.F.R. Ill 5.4.
19. A defect can occur when reasonably foreseeable consumer use or misuse, based in
part on the lack of adequate instructions and safety warnings, could result in injury, even where
there are no reports ofinjury. 16 C.F.R. 1115.4.
20. Upon information and belief, from approximately March 2009 through October
2009, Buckyballs' packaging contained the following warning: "WARNING: Ages 13+ only.
Do not swallow or ingest. Should one end up inside you, contact the proper authorities
immediately. Discontinue use of any ball that has broken or that is in any other way damaged."
21. Upon information and belief, the bottle containing Buckyballs that Respondent
sold between March 2009 and October 2009 displayed no warning.
22. In or about February 2010 Buckyballs contained the following warnings:
"Warning: Not intended for children. Swallowing of magnets may cause serious injury and
require immediate medical care. Ages 13+."
23. On or about March II, 2010, the Respondent changed its packaging, warnings,
instructions, and labeling on Buckyballs and later conducted a recall of the products that were
labeled as 13+.
24. On May 27,2010, the Commission and the Respondent jointly issued a press
release announcing the recall: Buckyballs'!) High Powered Magnets Sets Recalled by Maxfield
and Obert on Due to Violation of Federal Toy Standard.
25. At the time of the recall, the Respondents knew of at least two incidents involving
ingestions of Buckyballs.
4
26. Upon information and belief, in connection with the recall of Buckyballs labeled
for I 3+, Respondent relabeled the product in an attempt to remove it from the scope of the
mandatory provisions of ASTM International F963-08, Standard Consumer Safety Specification
for Toy Safety.
27. Upon information and belief, Respondent changed the Buckyballs warning in or
about March 2010 to state: "Warning: Not intended for children. Swallowing of magnets may
cause serious injury and require immediate medical care. Ages 14+."
28. Upon information and belief, the Respondent implemented a second change to the
warnings on Buckyballs in 2010 so that the warnings read: "Warning: Keep Away from All
Children! Do not put in nose or mouth. Swallowed magnets can stick to intestines causing
serious injury or death. Seek immediate medical attention if magnets are swallowed or inhaled."
29. Upon information and belief, these warnings are present on Buckyballs currently
sold by the Respondent.
30. Upon information and belief, since their introduction into commerce in October
2011, Buckycubes have displayed a warning on their packaging that states: "Warning: Keep
Away from All Children! Do not put in nose or mouth. Swallowed magnets can stick to
intestines causing serious injury or death. Seek immediate medical attention if magnets are
swallowed or inhaled."
5
32. Upon information and belief, on or about January 28, 20 I 0, a 9-year-old boy used
Buckyballs to mimic tongue and lip piercings, and accidentally ingested seven magnets. He was
33. Upon information and belief, on or about September 5, 2010, a 12-year-old girl
accidentally swallowed two Buckyballs magnets. She sought medical treatment at a hospital,
including x-rays and monitoring for infection and damage to her gastrointestinal tract.
34. Upon information and belief, on or about December 23,2010, a 3-year-old girl
ingested eight Buckyballs magnets she found on a refrigerator in her home, and required surgery
to remove the magnets. The magnets had caused intestinal and stomach perforations, and had
also become embedded in the girl's trachea and esophagus.
suffered intestinal perforations after ingesting three Buckyballs magnets he thought were
36. By November 2011, the Commission was aware of approximately 22 reports of
ingestions of high-powered magnets.
37. On November 11, 2011, the Commission, in conjunction with Respondent, issued
a public safety alert to further warn of the dangers of the ingestion of rare earth magnets like the
Subject Products.
38. Ingestion incidents, however, continue to occur.
39. Since the safety alert, the Commission has received over one dozen reports of
children ingesting Buckyballs. Many of these children required medical treatment, including
surgical intervention.
6
40. The Commission has received dozens more reports of children ingesting products
that are substantially similar to Buckyballs but may be manufactured and/or sold by finns other
than the Respondent.
41. Upon information and belief, on or about January 17, 2012, a 1 0-year-old girl
accidentally ingested two Buckyballs magnets after using them to mimic a tongue piercing. The
magnets became embedded in her large intestine, and she underwent x-rays, CT scans,
endoscopy, and an appendectomy to remove them. The girl's father had purchased Buckyballs
for her at the local mall.
42. All warnings on the Subject Products are inadequate and defective because they
do not and cannot effectively communicate to consumers, including parents and caregivers, the
hazard associated with the Subject Products and magnet ingestions.
43. Because the warnings on the Subject Products are inadequate and defective,
parents will continue to give children the Subject Products or allow children to have access to the
Subject Products.
44. Children cannot and do not appreciate the hazard, and it is foreseeable that they
will mouth the items, swallow them, or, in the case of adolescents and teens, use them to mimic
body piercings. These uses can and do result in injury.
45. All warnings on the packaging of the Subject Products are inadequate and
defective because the packaging on which the warnings are written is often discarded such that
consumers will be unable to review the warnings on the packaging prior to foreseeable uses of
the Subject Products. These uses can and do result in injury.
7
46. All warnings in the instructions included with the Subject Products are inadequate
and defective because the instructions are not necessary for the use of the product and are often
discarded. Because the instructions are unnecessary and are often discarded, consumers likely
will not review the warnings contained in the instructions prior to foreseeable uses of the Subject
Products. These uses can and do result in injury.
47. All warnings on the Subject Products are inadequate and defective because once
the Subject Products are removed from the packaging and/or the carrying case prior to
foreseeable uses of the Subject Products, the magnets themselves display no warnings, and the
small size ofthe individual magnets precludes the addition of warnings. These uses can and do
result in injury.
48. All warnings on the Subject Products are inadequate and defective because the
magnets are shared and used among various consumers, including children, after the packaging
and instructions are discarded; thus, many consumers of the products will have no exposure to
any warnings prior to using the Subject Products. These uses can and do result in injury.
49. All warnings displayed on the carrying cases are inadequate and defective
because consumers are unlikely to disassemble configurations made with the Subject Products
after each use, many of which are elaborate and time-consuming to create, to return the Subject
Products to the carrying case or to put the Subject Products out of the reach of children.
50. The effectiveness of the warnings on the Subject Products is further diminished
by the advertising and marketing of the Subject Products.
51. In 2009, Respondent advertised Buckyballs as, inter alia, a "toy" and as an
"amazing magnetic toy." The advertisement encouraged consumers to use them for games, use
8
..
them to hold items to a refrigerator, and "[ w]ear them as jewelry," stating "the fun never ends
with Buckyballs." In small print, the advertisement cautioned that the products not be "given to
a [sic] children age 12 or below."
52. Upon information and belief, a video appearing in Respondent's 2009
advertisement shows a consumer using Buckyballs magnets to simulate a tongue piercing.
53. Upon information and belief, Respondent advertised and marketed Buckyballs by
comparing its appeal to that of other children's products such as Erector sets, Hula Hoops, the
Slinky, and Silly Putty.
54. Upon information and belief, some internet retailers that sell the Subject Products
do not display any age recommendations, or promote erroneous age recommendations on their
websites.
55. Upon information and belief, despite making no significant design or other
physical changes to Buckyballs since their introduction in 2009, Respondent attempted to
subsequently rebrand Buckyballs as, inter alia. an adult "executive'' desk toy and/or stress
reliever, among other things, and Respondents marketed and advertised it as such.
56. The advertising and marketing of the Subject Products conflict with the claimed
14+ age grade label on Subject Products.
57. Because the advertising and marketing of the Subject Products conflict with the
age label, the effectiveness of the age label is diminished.
58. The advertising and marketing of Subject Products conflict with the stated
warnings on the Subject Products.
9
59. Because the advertising and marketing conflict with the stated warnings, the
effectiveness of the warnings is diminished.
60. No warnings or instructions could be devised that would effectively communicate
the hazard in a way that would be understood and heeded by consumers and would reduce the
incidences of magnet ingestions.
6 I. Because of the lack of adequate instructions and safety warnings, a substantial
risk of injury occurs as a result of the foreseeable use and misuse of the Subject Products.
The Subject Products Are Defective Because the Risk of Injury Occurs as a Result
ofthejr Operation and Use and the Failure of the Subject Products to Operate as Intended
62. A design defect can be present if the risk of injury occurs as a result of the
operation or use of the product or a failure of the product to operate as intended. 16 C.F.R.
1115.4.
63. The Subject Products contain a design defect because they present a risk of injury
as a result of their operation and/or use.
64. Upon information and belief, certain of the Subject Products have been advertised
and marketed by the Respondent to both children and adults. As a direct result of such
marketing and promotion, the Subject Products have been, and are currently used by, both
children and adults.
65. The risk of injury occurs as a result of the use of the Subject Products by adults
who give the Subject Products to children or allow children to have access to the Subject
Products.
10
.
66. The risk of injury occurs as a result of the foreseeable use and/or misuse of the
Subject Products by children.
67. The Subject Products contain a design defect because they fail to operate as
intended and present a substantial risk of injury to the public.
68. Upon information and belief, Respondent contends that the Subject Products are
"desktoys" or manipulatives that provides stress relief and other benefits to adults only.
69. The Subject Products are intensely appealing to children due to their tactile
features, their small size, and their highly reflective, shiny metallic coatings.
71. The Subject Products also move in unexpected, incongruous ways as the poles on
the magnets move to align properly, which can evoke a degree of awe and amusement among
children enticing them to play with the Subject Products.
72. Upon information and belief, Respondent's independent tester reported that the
"appropriate age grade" for Buckyballs is "over 8 years of age."
73. Despite the Respondent's current age label and intended use of the Subject
Products, they do not operate as intended because they are intensely appealing to and are often
played with by children.
74. The defective design of the Subject Products poses a risk of injury because
parents and caregivers buy the Subject Products for children and/or allow children to play with
Subject Products.
11
The Type of the Risk of Injury Renders the Subject Products Defective
75. The risk of injury associated with a product may render the product defective. 16
C.F.R. 1115.4.
76. Upon information and belief, the Subject Products have low utility to consumers.
77. Upon information and belief, the Subject Products are not necessary to
consumers.
78. The nature of the risk of injury includes serious, life-threatening, and long-term
health conditions that can result when magnets attract to each other through intestinal walls,
causing harmful tissue compression that can lead to perforations, fistulas and other
gastrointestinal injuries.
79. Children, a vulnerable population protected by the CPSA, are exposed to risk of
injury by the Subject Products.
80. The risk of injury associated with the ingestion of the Subject Products is neither
obvious nor intuitive.
81. Warnings and instructions cannot adequately mitigate the risk of injury associated
with ingesting the Subject Products.
82. Children mouthing and ingesting the Subject Products is foreseeable.
83. Respondent promoted the use of the Subject Products to mimic tongue piercings.
Such use by children is foreseeable.
84. The type of the risk of injury renders the Subject Products defective.
12
The Subject Products Create a Substantial Risk oflnjm:y to the Public
14, who may, consistent with developmentally appropriate behavior, place a single magnet or
numerous magnets in their mouth.
86. The risk of ingestion also exists when adolescents and teens use the product to
mimic piercings of the mouth, tongue, and cheek and accidentally swallow the magnets.
87. If two or more of the magnets are ingested and the magnetic forces of the magnets
pull them together, the magnets can pinch or trap the intestinal walls or other digestive tissue
between them, resulting in acute and long-term health consequences. Magnets that attract
inflammation and ulceration, progressing to tissue death, then perforation or fistula fonnation.
Such conditions can lead to infection, sepsis, and death.
88. Ingestion of more than one magnet often requires medical intervention, including
endoscopic or surgical procedures.
89. Because the initial symptoms of injury from magnet ingestion are nonspecific and
may include nausea, vomiting, and abdominal pain, caretakers, parents, and medical
professionals may easily mistake these nonspecific symptoms for other common gastrointestinal
upsets, and erroneously believe that medical treatment is not immediately required, thereby
delaying potentially critical treatment.
90. Medical professionals may not be aware of the dangers posed by ingestion ofthe
of surgical intervention or other medical treatment due to the patient's presentation with
13
nonspecific symptoms and/or a lack of awareness by medical personnel of the dangers posed by
multiple magnet ingestion can exacerbate life-threatening internal injuries.
91. Magnets that become affixed through the gastrointestinal walls and are not
surgically removed may result in intestinal perforations that can lead to necrosis, the formation
of fistulas, or ultimately, perforation of the bowel and leakage of toxic bowel contents into the
abdominal cavity. These conditions can lead to serious injury and possibly even death.
92. Endoscopic and surgical procedures may also be complicated in cases of multiple
magnets.
scarring, nutritional deficiencies due to loss of portions of the bowel, and, in the case of girls,
fertility problems.
94. The Subject Products contain defects in packaging, warnings, and instructions that
create a substantial risk of injury to the public.
95. The Subject Products contain defects in design that pose a substantial risk of
injury.
96. The type of the risk of injury posed by the Subject Products creates a substantial
risk of injury.
97. Therefore, because the Subject Products are defective and create a substantial risk
of injury, the Subject Products present a substantial product hazard within the meaning of
Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2).
14
Count 2
The Subject Products Are Substantial Product Hazards Under
Section l5Ca)(J) ofthe CPSA. 15 U.S.C. 2064(a)(l)
99. Upon information and belief, each of the Subject Products is an object designed,
manufactured, and/or marketed as a plaything for children under 14 years of age, and, therefore,
each of the Subject Products that was imported and/or otherwise distributed in commerce after
August 16,2009, is a "toy" as that term is defined in ASTM International Standard 963-08,
Standard Consumer Safety Specification for Toy Safety, section 3.1.72 and its most recent
version, ASTM 963-11 section 3.1.81 ("the Toy Standard").
100. Upon information and belief, Respondent's independent tester reported that the
10 I. As toys, and as toys intended for use by children under 14 years of age as
addressed in the Toy Standard, the Subject Products that were imported and/or otherwise
distributed in commerce after August 16,2009, were and are covered by the Toy Standard.
102. Pursuant to the Toy Standard, a magnet that has a flux index greater than 50 and
that is a small object as determined by the Toy Standard is a "hazardous magnet."
103. The Toy Standard prohibits toys from containing a loose as-received hazardous
magnet.
15
104. The Subject Products that were imported and/or otherwise distributed in
commerce after August 16, 2009, consist of and contain loose as-received hazardous magnets.
As a result, the Subject Products that were imported and/or otherwise distributed in commerce
after August 16, 2009, fail to comply with the Toy Standard.
105. On May 27,2010, the Commission, in cooperation with Respondent, and in
conjunction with corrective action, announced that Buckyballs failed to comply with the Toy
Standard because they were sold for children under the age of 14.
commerce after August 16, 2009, create a substantial risk of injury to the public.
I 07. Because the Subject Products that were imported and/or otherwise distributed in
commerce after August 16, 2009, fail to comply with the Toy Standard and create a substantial
risk of injury to the public, they are substantial product hazards as the term "substantial product
hazard" is defined in Section 15(a)(1) oftheCPSA, 15 U.S.C. 2064(a)(l).
Relief Sought
Wherefore, in the public interest, Complaint Counsel requests that the Commission:
A. Determine that the Subject Products present a "substantial product hazard" within
the meaning of Section 15(a}(2} of the CPSA, 15 U.S.C. 2064(a)(2), and/or present a
"substantial product hazard" within the meaning of Section 15(a)(1) of the CPSA, 15 U.S.C.
2064(a)(l).
B. Determine that extensive and effective public notification under Section 15(c) of
the CPSA, 15 U.S.C. 2064(c), is required to adequately protect children from the substantial
16
product hazard presented by the Subject Products, and order Respondents under Section 15(c) of
the CPSA, 15 U.S.C. 2064(c) to:
(1) Cease importation and distribution of the product;
(2) Notify all persons that transport, store, distribute or otherwise handle the
Subject Products, or to whom such products have been transported, sold, distributed
or otherwise handled, to immediately cease distribution of the products;
(4) Give prompt public notice of the defects in the Subject Products, including
the incidents and injuries associated with ingestion including posting clear and
conspicuous notice on Respondent's website, and providing notice to any third party
website on which Respondent has placed the Subject Products for sale, and provide
further announcements in languages other than English and on radio and television;
(6) Mail notice to every person to whom the Subject Products were delivered
or sold;
C. Determine that action under Section 15(d) of the CPSA, 15 U.S.C. 2064(d), is in
the public interest and additionally order Respondent to:
(1) Refund consumers the purchase price of the Subject Products;
reasonable and foreseeable expenses incurred in availing themselves of any remedy
provided under any Commission Order issued in this matter, as provided by Section
15 U.S.C. 2064(e)(l);
17
Commission Order issued in this matter, including the costs of returns, refunds and/or
replacements, as provided by Section 15(e)(2) ofthe CPSA, 15 U.S.C. 2064(e)(2);
(4) Submit a plan satisfactory to the Commission, within ten (10) days of
service of the Final Order, directing that actions specified in Paragraphs B( 1) through
(6) and C(l) through (3) above be taken in a timely manner;
(5) To submit monthly reports, in a fonnat satisfactory to the Commission,
{6) For a period of five (5) years after issuance of the Final Order in this
matter, to keep records of its actions taken to comply with Paragraphs B(l) through
(6) and C( 1) through (4) above, and supply these records to the Commission for the
purpose of monitoring compliance with the Final Order;
matter, to notify the Commission at least sixty (60) days prior to any change in its
business (such as incorporation, dissolution, assignment, sale, or petition for
bankruptcy) that results in, or is intended to result in, the emergence of a successor
corporation, going out of business, or any other change that might affect compliance
obligations under a Final Order issued by the Commission in this matter; and
D. Order that Respondent shall take other and further actions as the Commission
18
Dated this,$ day ~ 2012
~ ~
Executive Director
Bethesda, MD 20814
Tel: (301) 504-7854
Bethesda, MD 20814
Tel: (30 1) 504-7809
Leah Wade, Trial Attorney
Seth Popkin, Trial Attorney
Complaint Counsel
Office ofthe General Counsel
Bethesda, MD 20814
Tel: (30 1) 504-7808
19
EXHIBIT I
)
In the Matter of )
)
)
and )
)
CRAIG ZUCKER, individually, and as an officer )
of MAXFIELD AND OBERTON HOLDINGS LLC.)
)
)
Respondents. )
______________________________)
SECOND AMENDED COMPLAINT
1. This is an administrative enforcement proceeding pursuant to Section 15 of the
aggregated masses of high-powered, small rare earth magnets known as Buckyballs
("Buckyballs") and BuckycubesTM ("Buckycubes") (collectively, the "Subject Products"),
imported and distributed by Maxfield and Oberton Holdings, LLC ("Maxfield" or the "Firm")
and Craig Zucker ("Zucker"), as Maxfield's Chief Executive Officer (collectively
"Respondents").
Proceedings before the U.S. Consumer Product Safety Commission (the "Commission"), 16
C.F.R. 1025.
Jurisdiction
(d), and (f) of the CPSA, 15 U.S.C 2064 (c), (d) and (f).
Parties
independent federal regulatory agency established pursuant to Section 4 of the CPSA, 15 U.S.C.
2053.
5. Maxfield is a Delaware limited liability company with its principal place of
business located at 180 Varick Street, Suite 212, New York, NY, 10014.
6. Zucker is the cofounder and Chief Executive Officer of Maxfield. As such, he
controls the acts, practices and policies of the Firm.
7. Upon information and belief, at all relevant times Zucker was and is responsible
for ensuring Maxfield's compliance with the requirements of the CPSA, ASTM-963-08 section
3 .I. 72 and its most recent version, ASTM 963-11 section 3.1.81 (the "Toy Standard"), and
regulations issued thereunder.
8. Upon information and belief, Zucker resides in Brooklyn, NY.
9. Whenever this Complaint refers to any act of the Respondents, the reference shall
be deemed to mean that the directors, officers, employees, or agents of the Firm, including
Zucker, authorized such act while actively engaged in the management, direction, or control of
the affairs of the Firm and while acting within the scope of their employment or official duties.
2
1 0. Whenever this Complaint refers to any act of the Respondents, the reference shall
be deemed to mean the act of each Respondent, jointly and severally.
II. Respondents were importers and distributors of the Subject Products.
12. As importers and distributors of the Subject Products, Respondents were
"manufacturers" and "distributors" of a "consumer product" that is "distributed in commerce," as
those terms arc defined in CPSA Sections 3(a)(5), (7), (8), and (11) ofthe CPSA, 15 U.S.C.
2052(a)(5), (7), (8), and (ll).
13. Upon information and belief, Zucker, as Maxfield's authorized representative,
filed a Certificate of Cancellation for Maxfield on December 27,2012 with the Secretary of State
of Delaware.
14. Upon information and belief, Maxfield has ceased business operations.
15. Respondents imported and distributed the Subject Products in U.S. commerce and
offered the Subject Products for sale to consumers for their personal use in or around a
permanent or temporary household or residence, a school, and in recreation or otherwise.
16. The Subject Products consist of small, individual magnets that are packaged as
aggregated masses in different sized containers holding 10, 125, and 216 small magnets, ranging
in size from approximately 4.01 mm to 5.03 mm, with a variety of coatings, and a flux index
greater than 50.
17. Upon information and belief, the flux of Buckyballs ranges from approximately
414 to 556kglmm
2
Surface Flux Index.
3
18. Upon information and belief, the flux of Buckycubes ranges from approximately
204 to 288kg
2
mm
2
Surface Flux Index.
19. Upon information and belief, Buckyballs, which are small spherically shaped
magnets, were introduced in U.S. commerce in March 2009 by Respondents.
20. Upon information and belief, Buckycubes, which are small cube-shaped magnets,
were introduced in U.S. commerce in October 2011 by Respondents.
21. Upon information and belief, the Subject Products were manufactured by Ningo
22. Upon information and belief, Respondents discontinued sale of the Subject
Products on December 27, 2012.
23. The Subject Products were sold with a carrying case and range in retail price from
approximately $19.95 to $100.00. Upon information and belief, the Subject Products could also
be purchased in sets of 10 for $3.50.
24. Upon information and belief, Respondents sold more than 2.5 million sets of
Buckyballs to consumers in the United States.
25. Upon information and belief, Respondents sold more than 290,000 sets of
Buckycubes to consumers in the United States.
26. Upon information and belief, Respondents refused staffs requests that
Respondents stop sale of the Subject Products and submit a corrective action plan for both
Buckyballs and Buckycubes.
27. Upon information and belief, the Subject Products continue to be sold online to
consumers in the United States through various internet sites.
4
28. Upon information and belief, the Subject Products continue to be sold in retail
stores in the United States.
COUNT!
Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2), Because They Contain
Their Instructions, Packaging, and Warnings Are Inadequate
29. Paragraphs 1 through 28 are hereby realleged and incorporated by reference, as
warnings, and/or instructions. 16 C.F.R. 1115.4.
31. A defect can occur when reasonably foreseeable consumer use or misuse, based in
part on the lack of adequate instructions and safety warnings, could result in injury, even where
there are no reports of injury. 16 C.F.R. 1115.4.
32. Upon information and belief, from approximately March 2009 through October
2009, Buckyballs packaging contained the following warning: "WARNING: Ages 13+ only. Do
not swallow or ingest. Should one end up inside you, contact the proper authorities immediately.
Discontinue use of any ball that has broken or that is in any other way damaged."
33. Upon information and belief, Respondents sold Buckyballs between March 2009
and October 2009 with no warning.
34. On or about February 2010, Buckyballs contained the following warnings:
"Warning: Not intended for children. Swallowing of magnets may cause serious injury and
require immediate medical care. Ages 13+."
5
35. On or about March 11,2010, the Respondents changed the packaging, warnings,
instructions, and labeling on Buckyballs and later conducted a recall of the products that were
labeled as 13+.
36. Upon information and belief, beginning on or around March 29, 2010, Maxfield
began executing "Responsible Seller Agreements" with some of its retailers.
3 7. The "Responsible Seller Agreements" purported, in part, to restrict the sales of
the Subject Products to stores that did not primarily sell toys, and and required the reseller to
agree to display the Subject Products with products intended for consumers ages 14 and over.
38. On May 27, 2010, the Commission and the Firm jointly issued a press release
announcing the recall: Buckyballs High Powered Magnets Sets Recalled by Maxfield and
Obert on Due to Violation of Federal Toy Standard.
39. At the time of the recall, the Respondents knew of at least two incidents involving
ingestions of Buckyballs.
40. Upon information and belief, in connection with the recall of Buckyballs labeled
for 13+, Respondents relabeled Buckyballs in an attempt to remove it from the scope of the
mandatory provisions of ASTM International F963-8, Standard Consumer Safety Specification
for Toy Safety.
41. Upon information and belief, Respondents changed the Buckyballs warning on or
about March 2010 to state: "Warning: Not intended for children. Swallowing of magnets may
cause serious injury and require immediate medical care. Ages 14+."
42. Upon information and belief, the Respondents implemented a second change to
the warnings on Buckyballs in 201 0 so that the warnings read: "Warning: Keep Away from All
6
Children! Do not put in nose or mouth. Swallowed magnets can stick to intestines causing
serious injury or death. Seek immediate medical attention if magnets are swallowed or inhaled."
43. Upon information and belief, these warnings were present on Buckyballs sold by
the Respondents until December 27, 2012.
44. Upon information and belief, since their introduction into commerce in October
2011, Buckycubes have displayed a warning on their packaging that states: "Warning: Keep
Away from All Children! Do not put in nose or mouth. Swallowed magnets can stick to
intestines causing serious injury or death. Seek immediate medical attention if magnets are
swallowed or inhaled."
46. Upon information and belief, on or about January 28, 2010, a 9-year-old boy used
Buckyballs to mimic tongue and lip piercings and accidentally ingested seven magnets. He was
47. Upon information and belief, on or about September 5, 2010, a 12-year-old girl
accidentally swallowed two Buckyballs magnets. She sought medical treatment at a hospital,
including x-rays and monitoring for infection and damage to her gastrointestinal tract.
48. Upon information and belief, on or about December 23, 2010, a 3-year-old girl
ingested eight Buckyballs magnets she found on a refrigerator in her home, and required surgery
to remove the magnets. The magnets had caused intestinal and stomach perforations and had
also become embedded in the girl's trachea and esophagus.
7
suffered intestinal perforations after ingesting three Buckyballs magnets that he thought were
50. By November 20 II, the Commission was aware of approximately 22 reports of
ingestions of high-powered, small, spherically shaped magnets.
51. On November 11, 20 II, the Commission, in conjunction with Respondents,
issued a public safety alert to warn the public further of the dangers of the ingestion of rare earth
magnets like the Subject Products.
53. Since the safety alert, the Commission has received dozens of reports of children
ingesting Buckyballs magnets. Many of these children required medical treatment, including
surgical intervention.
54. The Commission also received dozens of other reports of children ingesting
products that are substantially similar to the Buckyballs magnets but may be manufactured
and/or sold by firms other than the Respondent.
55. Upon information and belief: on or about January 17, 2012, a 1 0-year-old girl
accidentally ingested two Buckyballs magnets after using them to mimic a tongue piercing. The
magnets became embedded in her large intestine, and she underwent x-rays, CT scans,
endoscopy, and an appendectomy to remove them. The girl's father had purchased Buckyballs
for her at the local mall.
8
warnings do not and cannot communicate effectively to consumers, including parents and
caregivers, the hazard associated with the Subject Products and magnet ingestions.
57. Because the warnings on the Subject Products and/or the websites where the
Subject Products were offered for sale are inadequate and defective, parents will continue to give
children the Subject Products or allow children to have access to the Subject Products.
58. Upon information and belief, as Maxfield is no longer in business, retailers of the
Subject Products are not bound by the Responsible Seller Agreements and are thus able to sell to
children and in toy stores, making it even more likely that children will gain access to the Subject
Products.
59. Children cannot and do not appreciate the hazard, and it is foreseeable that
children will mouth the magnets, swallow the magnets, or, in the case of adolescents and teens,
use the magnets to mimic body piercings. These uses can and do result in injury.
defective because the packaging on which the warnings are written is often discarded, such that
consumers will be unable review the warnings on the packaging prior to foreseeable uses of the
Subject Products. These uses can and do result in injury.
61. All warnings in the instructions included with the Subject Products are inadequate
and defective because the instructions are not necessary for the use of the product and are often
discarded. Because the instructions are unnecessary and are often discarded, consumers likely
will not review the warnings contained in the instructions prior to foreseeable uses of the Subject
Products. These uses can and do result in injury.
9
62. All warnings on the Subject Products are inadequate and defective because once
the Subject Products are removed from the packaging and/or the carrying case prior to
foreseeable uses of the Subject Products, the magnets themselves display no warnings, and the
small size of the individual magnets precludes the addition of warnings on the product. These
uses can and do result in injury.
magnets are shared and used among various consumers, including children, after the packaging
and instructions are discarded; thus, many consumers of the products will have no exposure to
any warnings prior to using the Subject Products. These uses can and do result in injury.
64. All warnings displayed on the carrying cases are inadequate and defective
because consumers are unlikely after each use to disassemble configurations made with the
Subject Products, many of which are elaborate and time-consuming to create, to return the
Subject Products to the carrying case or to put the Subject Products out of the reach of children.
65. The effectiveness ofthe warnings on the Subject Products is diminished further
by the advertising and marketing ofthe Subject Products.
66. In 2009, Respondents advertised Buckyballs as, inter alia, a "toy" and as an
"amazing magnetic toy." The advertisements encouraged consumers to use Buckyballs for
games, use them to hold items to a refrigerator, and "[wJear them as jewelry," stating "the fun
never ends with Buckyballs." In small print, the advertisement cautioned that the products
should not be "given to a [sic] children age 12 or below."
67. Upon information and belief, a video appearing in Respondents' 2009
advertisement shows a consumer using Buckyballs magnets to simulate a tongue piercing.
10
68. Upon information and belief, Respondents advertised and marketed Buckyballs
by comparing Buckyballs' appeal to other children's products, such as Erector sets, Hula Hoops,
the Slinky, and Silly Putty.
69. Upon information and belief, some Internet retailers that sold the Subject Products
did not display any age recommendations or promoted erroneous age recommendations on their
web sites.
70. Upon information and beliet: despite making no significant design or other
physical changes to Buckyballs since their introduction in 2009, Respondents subsequently
attempted to rebrand Buckyballs as, inter alia, an adult "executive" desk toy and/or stress
reliever, among other things, and Respondents marketed and advertised Buckeyballs as such.
71. The advertising and marketing of the Subject Products conflict with the claimed
14+ age grade label on the Subject Products.
72. Because the advertising and marketing of the Subject Products conflict with the
age label, the effectiveness of the age label is diminished.
73. The advertising and marketing of Subject Products conflict with the stated
warnings on the Subject Products.
74. Because the advertising and marketing conflict with the stated warnings, the
effectiveness of the warnings is diminished.
75. No warnings or instructions could be devised that would effectively communicate
the hazard so that the warnings and instructions could be understood and heeded by consumers
and reduce the number of magnet ingestion incidents.
11
76. Because of the lack of adequate instructions and safety warnings, a substantial
risk of injury presents as a result of the foreseeable use and misuse of the Subject Products.
The Subject Products Are Defective Because Substantial Risk of Injury
Arises as a Result of the Magnet's Operation and Use and the
Failure of the Subject Products to Operate as Intended
operation or use of the product or due to a failure of the product to operate as intended. 16
C.F.R. 1115.4.
78. The Subject Products contain a design defect because they present a risk of injury
as a result of their operation and/or use.
79. Upon information and belief, the Subject Products have been advertised and
marketed by the Respondents to both children and adults. As a direct result of such marketing
and promotion, the Subject Products have been, and currently are, used by both children and
adults.
80. The risk of injury occurs as a result of the use of the Subject Products by adults,
who give the Subject Products to children, or allow children to have access to the Subject
Products.
81. The risk of injury occurs as a result of the foreseeable use and/or misuse of the
Subject Products by children.
82. The Subject Products contain a design defect because they fail to operate as
intended and present a substantial risk of injury to the public.
83. Upon information and belief, Respondent contends that the Subject Products are
"desktoys" or manipulatives that provide stress relief and other benefits to adults only.
12
84. The Subject Products are intensely appealing to children due to the Subject
Products' tactile features, small size, and highly reflective, shiny, and colorful metallic coatings.
86. The Subject Products also move in unexpected, incongruous ways, as the poles on
the magnets move to align properly, which can evoke a degree of awe and amusement among
children, enticing them to play with the Subject Products.
87. Upon information and belief, Respondents' independent tester reported that the
88. Despite the Respondents' current age label, and irrespective of Respondents'
assertions regarding the proper uses for the Subject Products, the Subject Products do not operate
as intended because they are intensely appealing to, and often are played with, by children.
89. The defective design of the Subject Products poses a risk of injury because
parents and caregivers buy the Subject Products for children and/or allow children to play with
the Subject Products.
The Type of Risk of Injury Renders the Subject Products Defective
90. The risk of injury associated with a product may render the product defective. 16
C.F.R. 1115.4.
91. Upon information and belief, the Subject Products have low utility to consumers.
consumers.
13
93. 1l1e nature of the risk of injury includes serious, life-threatening, and long-term
health conditions that can result when magnets attract to each other through intestinal walls,
causing harmful tissue compression that can lead to perforations, fistulas, and other
gastrointestinal injuries.
94. Children, a vulnerable population protected by the CPSA, are exposed to the risk
of injury associated with the Subject Products.
95. The risk of injury associated with the ingestion of the Subject Products is neither
obvious, nor intuitive.
96. Warnings and instructions cannot adequately mitigate the risk of injury associated
with ingesting the Subject Products.
97. Children mouthing and ingesting the Subject Products is foreseeable.
98. Respondents promoted the use of the Subject Products to mimic tongue piercings.
Such use by children is foreseeable.
99. The type of risk of injury renders the Subject Products defective.
14, who may, consistent with developmentally appropriate behavior, place a single magnet or
numerous magnets in their mouth.
101. The risk of ingestion also exists when adolescents and teens use the product to
mimic piercings of the mouth, tongue, and cheek and accidentally swallow the magnets.
102. If two or more of the magnets are ingested and the magnetic forces of the magnets
pull them together, the magnets can pinch or trap the intestinal walls or other digestive tissue
14
between them, resulting in acute and long-term health consequences. Magnets that attract
inflammation and ulceration, progressing to tissue death, then perforation, or tistula formation.
Such conditions can lead to infection, sepsis, and death.
103. Ingestion ofmore than one magnet often requires medical intervention, including
endoscopic or surgical procedures.
104. Because the initial symptoms of injury from magnet ingestion are nonspecific and
may include nausea, vomiting, and abdominal pain, caretakers, parents, and medical
professionals may easily mistake these nonspecific symptoms for other common gastrointestinal
upsets and erroneously believe that medical treatment is not immediately required, thereby
delaying potentially critical treatment.
105. Medical professionals may not be aware of the dangers posed by ingestion ofthe
of surgical intervention or other medical treatment due to the patient's presentation with
nonspecific symptoms and/or a lack of awareness by medical personnel of the dangers posed by
multiple magnet ingestion can exacerbate life-threatening internal injuries.
106. Magnets that become affixed to each other through the gastrointestinal walls and
are not removed surgically may result in intestinal perforations that can lead to necrosis, the
formation of fistulas, or ultimately, perforation of the bowel and leakage of toxic bowel contents
into the abdominal cavity. These conditions can lead to serious injury and possibly even death.
15
107. Endoscopic and surgical procedures may also be complicated in cases ofmultiple
magnets.
scarring, nutritional deficiencies due to loss of portions of the bowel, and, in the case of girls,
fertility problems.
109. The Subject Products contain defects in packaging, warnings, and instructions,
which can create a substantial risk of injury to the public.
110. The Subject Products contain defects in design that pose a substantial risk of
mJury.
111. The type of risk of injury posed by the Subject Products creates a substantial risk
of injury.
112. Therefore, because the Subject Products are defective and create a substantial risk
of injury, the Subject Products present a substantial product hazard within the meaning of
Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2).
Count 2
Section 15(a)(l) ofthe CPSA, 15 U.S.C. 2064(a)(l)
113. Paragraphs 1 through 112 are hereby realleged and incorporated by reference, as
16
114. Upon information and belief, Respondents' independent tester reported that the
115. Upon information and belief: each of the Subject Products is an object designed,
manufactured, and/or marketed as a plaything for children under 14 years of age, and therefore,
each of the Subject Products that was imported and/or otherwise distributed in commerce after
August 16, 2009, is a "toy," as that term is defined in the Toy Standard.
116. As toys, and as toys intended for use by children under 14 years of age, as
distributed in commerce after August 16, 2009, were and are covered by the Toy Standard.
117. Pursuant to the Toy Standard, a magnet that has a flux index greater than 50 and
that is a small object, as determined by the Toy Standard, is a "hazardous magnet."
118. The Toy Standard prohibits toys from containing a loose as-received hazardous
magnet.
commerce after August 16,2009, consist of and contain loose as-received hazardous magnets.
As a result, the Subject Products that were imported and/or otherwise distributed in commerce
after August 16, 2009, fail to comply with the Toy Standard.
120. On May 27,2010, the Commission, in cooperation with Respondents, and in
conjunction with corrective action, announced that Buckyballs failed to comply with the Toy
Standard because they were sold for children under the age of 14.
17
122. Because the Subject Products that were imported and/or otherwise distributed in
commerce after August 16, 2009, fail to comply with the Toy Standard and create a substantial
risk of injury to the public, they are substantial product hazards as the term "substantial product
hazard" is defined in Section 15(a)(l) ofthe CPSA, 15 U.S.C. 2064(a)(1).
Relief Sought
Wherefore, in the public interest, Complaint Counsel request that the Commission:
A. Determine that the Subject Products present a "substantial product hazard" within
the meaning of Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2), and/or present a
"substantial product hazard" within the meaning of Section 15(a)( 1) of the CPSA, 15
U.S. C. 2064(a)(1 ).C.
B. Determine that extensive and effective public notification under Section 15( c) of
the CPSA, 15 U.S.C. 2064(c), is required to adequately protect children from the
substantial product hazard presented by the Subject Products, and order Respondents
under Section 15(c) ofthe CPSA, 15 U.S.C. 2064(c) to:
(1) Cease importation and distribution of the Subject Products;
(2) Notify all persons who transport, store, distribute, or otherwise handle the
Subject Products, or to whom such products have been transported, sold,
distributed, or otherwise handled, to cease distribution of the products
immediately;
(4) Give prompt public notice of the defects in the Subject Products, including
the incidents and injuries associated with ingestion, including posting clear and
18
conspicuous notice on websites operated by Respondents, and providing notice to
any third party website on which Respondents has placed the Subject Products for
sale, and provide further announcements in languages other than English and on
radio and television;
(6) Mail notice to every known person to whom the Subject Products were
delivered or sold;
C. Determine that action under Section 15(d) ofthe CPSA, 15 U.S.C. 2064(d), is in
the public interest, and additionally, order Respondents to:
(1) Refund consumers the purchase price ofthe Subject Products;
(2) Make no charge to consumers and reimburse consumers for any
reasonable and foreseeable expenses incurred in availing themselves of any
remedy provided under any Commission Order issued in this matter, as provided
by Section 15 U.S.C. 2064(e)(l);
Commission Order issued in this matter, including the costs of returns, refunds,
and/or replacements, as provided by Section 15( e )(2) of the CPSA, 15 U .S.C.
2064(e)(2);
(4) Submit a plan satisfactory to the Commission, within ten (10) days of
service of the Final Order, directing that actions specified in Paragraphs B( 1)
through (6) and C(1) through (3) above be taken in a timely manner;
(5) To submit monthly reports, in a format satisfactory to the Commission,
19
matter, to keep records of Respondents' actions taken to comply with Paragraphs
B(l) through (6) and C(l) through (5) above, and supply these records to the
Commission for the purpose of monitoring compliance with the Final Order;
matter, to notify the Commission at least sixty (60) days prior to any change in
Respondents' business (such as incorporation, dissolution, assignment, sale, or
petition for bankruptcy), which results in, or is intended to result in, the
emergence of a successor corporation, going out of business, or any other change
that might affect compliance obligations under a Final Order issued by the
Commission in this matter; and
20
D. Order that Respondents shall take other and further actions as the Commission
Dated this /1 day of 2013
I
Executive Director
Bethesda, MD 20814
Tel: (301) 504-7854
Bethesda, MD 20814
Tel: (301) 504-7809
Richa Dasgupta, Trial Attorney
Complaint Counsel
Bethesda, MD 20814
Tel: (301) 504-7808
21
In the Matter of
)
)
)
and
CRAIG ZUCKER, individually, and as an officer
of Maxfield and Oberton Holdings, LLC.
Respondents.
)
)
)
)
)
)
)
______________________________)
LIST AND SUMMARY OF DOCUMENTARY EVIDENCE
Pursuant to 16 C.F.R. 1025.1l(b)(3) of the Commission's Rules of Practice for
Adjudicative Proceedings, the following is a list and summary of documentary evidence
supporting the charges in this matter. Complaint Counsel reserves the right to offer additional
evidence during the course of the proceedings.
1. Claims, complaints, medical records, and reports concerning incidents involving
Buckyballs ("Buckyballs") and Buckycubes ("Buckycubes") (collectively, "the Subject
Products").
2. Reports from consumers regarding their purchase of the Subject Products for
children under the age of 14, including their attention to and understanding of the Subject
Products' warnings, labeling, and instructions.
3. Documents evidencing the product warnings, labeling, and packaging since the
introduction ofBuckyballs in 2009 and Buckycubes in 2011.
4. Advertisements, marketing, and promotional materials for Buckyballs or
Buckycubes, including print and web media, since 2009.
5. Correspondence between Maxfield & Oberton Holdings LLC ("M&O") and Craig
Zucker ("Zucker") (collectively, "Respondents") and CPSC staff regarding failure ofthe product
to comply with ASTM 963, and negotiations of a Corrective Action Plan, including changes to
marketing, warnings, packaging and instructions.
6. Correspondence between Respondents and CSPC staff regarding the issuance of a
2011 safety alert.
7. CPSC f n-Depth Epidemiological Investigation Reports of near-ingestion,
ingestion, and injury incidents involving the Subject Products.
8. CPSC Product Safety Assessments from the Directorates for Engineering
Sciences, Health Sciences, Human Factors, and Economic Analysis concerning the Subject
Products.
9. Documentary evidence regarding changes to the packaging, warnings, labeling,
and instructions of the Subject Product since 2009.
10. Technical records, technical analyses, and evaluations of the Subject Products
conducted by or for Respondent.
from outside consultants retained by CPSC staff for the purposes of litigation.
12. Information provided by Respondents to the Commission's staff pertaining to the
Subject Products.
13.
14.
F963-08.
15.
Public notices issued by the Commission regarding the Subject Products.
Standards regarding high-powered magnets, including, but not limited to, ASTM
Reports and publications from medical professionals regarding the hazards of
2
ingestion of magnets, including how the injuries occur, the difficulty in diagnosing and treating
such ingestion incidents, and the long term health consequences attendant to such injuries.
16. Information provided by consumers pertaining to any products liability, personal
injury, or other lawsuits filed against Respondents in connection with the Subject Products.
17. Documentary evidence and information pertaining to Respondent Zucker's job
description, responsibilities, authority, and actions with respect to M&O's acts, practices,
policies and procedures.
18. Documentary evidence and information pertaining to Respondent Zucker's
authority and actions with respect to M&O's efforts to comply with the requirements of the
Consumer Product Safety Act, ASTM standards, and the regulations issued thereunder.
19. Documentary evidence and information reflecting M&O's founding, formation,
structure, management, governance, dissolution, and cancellation.
Dated this /1 day of /Y.1/'.;, 2013.
7 1 ~ i f 3 ~ ~
Mary B. 1 urphy
Assistant General Counsel
Bethesda, MD 20814
Tel: (301) 504-7809
Richa Shyam Dasgupta, Trial Attorney
Complaint Counsel
3
EXHIBITB
AGAINST ZEN MAGNETS, LLC, AND LIST
AND SUMMARY OF DOCUMENTARY
EVIDENCE
In the Matter of
ZEN MAGNETS, LLC
)
)
)
)
)
)
)
)
Respondent. )
_______________ )
1. This is an administrative enforcement proceeding pursuant to Section 15
of the Consumer Product Safety Act ("CPSA"), as amended, 15 U.S.C. 2064, for public
notification and remedial action to protect the public from the substantial risks of injury
presented by aggregated masses of high-powered, small rare earth magnets known as Zen
Magnets Rare Earth Magnetic Balls ("Zen Magnets") and Neoballs (together, the
"Subject Products"), imported and distributed by Zen Magnets, LLC ("Zen" or the
"Firm" or "Respondent").
Proceedings before the Consumer Product Safety Commission (the "Commission"), 16
C.F.R. Part 1025.
Jurisdiction
3. This proceeding is instituted pursuant to the authority contained in
Sections 15(c), (d) and (f) of the CPSA, 15 U.S.C 2064 (c), (d) and (f).
Parties
4. Complaint Counsel is the staff of the Division of Compliance within the
Office ofthe General Counsel of the Commission ("Complaint Counsel"). The
Commission is an independent federal regulatory agency established pursuant to Section
4 of the CPSA, 15 U.S.C. 2053.
5. Respondent is a Colorado limited liability company with its principal
place of business located at 4155 E. Jewell A venue, Suite 908, Denver, CO 80222.
6. Respondent is an importer and distributor of the Subject Products.
7. As an importer and distributor of the Subject Products, Respondent is a
"manufacturer" and "distributor" of a "consumer product" that is "distributed in
commerce," as those terms are defined in CPSA Sections 3(a)(5), (7), (8) and (11) ofthe
CPSA, 15 U.S.C. 2052(a)(5), (7), (8) and (11).
8. Respondent imported and distributed the Subject Products in U.S.
commerce and otTered them for sale to consumers for their personal use in or around a
permanent or temporary household or residence, a school, and in recreation, or otherwise.
9. Zen Magnets consist of small, individual, spherical-shaped magnets,
approximately 5.03mm in diameter with a flux index greater than 50, that arc packaged as
aggregated masses in different size containers holding 72, 216, or 1, 728 small magnets,
10. Neoballs consist of small, individual, spherical-shaped magnets, ranging
in size from 4.98mm to 5.11 mm in diameter, with a variety of coatings and a flux index
greater than 50, that the Firm offers for sale in quantities of aggregated masses, ranging
from 18 balls to 216 to 21,600 spheres.
2
11. Upon information and belief, the flux of the Zen Magnets ranges from
approximately 577.1 to 581.4kg
2
mm
2
Surface Flux Index.
12. Upon information and belief, the flux ofthe Neoballs ranges from
approximately 438.8 to 565.0 kg
2
mm
2
Surface Flux Index.
13. Upon information and belief, Respondent introduced Zen Magnets in U.S.
commerce in September 2009.
14. Upon information and belief, Respondent continues to sell Zen Magnets in
U.S. Commerce through the website: www.zenmagnets.com, designed and operated by
Respondent.
15. Upon information and belief, Respondent introduced Neoballs into U.S.
commerce in September 2011.
16. Upon information and belief, Respondent sold Neoballs in sets of 216
magnets until September 13, 2012.
17. Upon information and belief, Respondent voluntarily agreed to stop sale
of Neoballs on September 12, 2012.
18. On October 2, 2012, Respondent advised Commission staff that
Respondent intended to begin sales ofthe individual Neoballs magnets through the
website: www.neoballs.com.
19. Upon information and belief, in November 2012, Respondent began
selling individual Neoballs magnets through the website: www.neoballs.com, designed
and operated by Respondent.
20. Upon information and beliet: Respondent began distributing individual
3
magnets packaged in sets, through the website: www.neoballs.com, designed and
operated by Respondent.
21. Upon information and belief, Respondent refused staffs requests that
Respondent stop sale of the products and submit a corrective action plan for both Zen
Magnets and Neoballs.
22. Upon information and belief, the Subject Products are manufactured by
Bestway Magnet Corp., in the Northern Section of Huangcheng Westroad, Ningbo,
China.
23. Zen Magnets are sold in sets of 72 and 216 magnets and are packaged in a
velvet sack or an MDF hard case. The sets range in retail price from approximately
$12.65 to $50.00.
24. Zen Magnets are also sold in a set of 1,728 magnets, which are packaged
in a velvet-lined, wooden teak box and retail for approximately $250.00.
25. Upon information and belief, more than 50,000 sets of Zen Magnets have
been sold to consumers in the United States.
26. Neoball orders for fewer than 18 individual magnets are packaged together
and distributed in a plastic baggie. Neoball magnets are individually priced at 8 to I 0
cents per magnet.
27. When a consumer purchases 18 or more Neoball magnets through the
Firm's website, Respondent packages all of the magnets together in a square tin with a
sliding lid and charge a flat shipping fee, regardless of the number of magnets ordered.
28. Upon information and belief, an order placed on the Neoballs website
4
automatically defaults to the quantity 18; users must specifically enter a separate figure if
they desire to purchase a different number of magnets.
29. Upon information and belief, Respondent has sold more than 908 units of
sets of 216 aggregated Neoballs to consumers in the United States.
30. Upon information and belief, Respondent also sold an unknown number of
individual Neoball magnets to consumers in the United States.
COUNT1
The Subject Products Are a Substantial Product Hazard Under
Section 15(a)(2) of the CPSA, 15 U.S.C. 2064(a)(2), Because They Contain
Their Instructions, Packaging, and Warnings Are Inadequate
31. Paragraphs 1 through 30 are hereby realleged and incorporated by
reference, as though fully set forth herein.
warnings, and/or instructions. 16 C.F.R. 1115.4.
33. A defect can occur when reasonably foreseeable consumer use or misuse,
based in part on the Jack of adequate instructions and safety warnings, could result in
injury, even where there are no reports of injury. 16 C.F.R. 1115.4.
34. Upon information and belief, from 2009 through mid-2011, Respondent's
U.S. direct sales website: www.zenmagnets.com, contained the following warning
regarding Zen Magnets:
Warnings: Try not to drop them. Ever play with magnets in sand? Ferric
dirt particles are hard to get off super-magnets, and will quickly erode the
5
poles. Zen Magnets can destroy or disrupt magnetically sensitive
technology. Be cautious with the open chains. Can cause serious problems
if swallowed. Do not give to kids under the age of 12, and keep them away
from pets. Call poison control if more than I magnet is swallowed.
35. Upon information and belief, in or about October 2011, Respondent began
including the following warning on the "buy" page ofwww.zenmagnets.com: "Magnets
cause fatal intestinal pinching if swallowed. Keep from animals and children who don't
understand this."
36. Upon information and belief, in October 2011, Respondent requested that
retailers who sold Zen Magnets through the Amazon LLC website include a "14+ age
limit."
3 7. Upon information and belief, in October 2011, Respondent began
including the following warning on the "FAQ" page ofwww.zenmagnets.com:
Q: How old do you have to be to play with these?
A: According to the Consumer Product Safety Commission, 14 years old
in the US for a strong magnetic toy. Unless it's not a toy, then no age
limit. Unless it's a "Science Kit," then the age regulation is 8+. Zen
Magnets are classified as a science kit, so the minimum age as
recommended by the U.S. government is 8. Our common sense
recommendation is 12.
38. Upon information and belief, as of January 9, 2013, Respondent's home
page displays, in a faint and nearly undecipherable font size, this warning language:
6
Try not to drop them. Even drop magnets in sand? Ferric dirt particles are
hard to get off super magnets, and will quickly erode the poles. Zen
magnets can destroy or disrupt magnetically sensitive technology. Be
cautious with the open chains. Can cause serious problems if swallowed.
CPSC recommends minimum age of 14, and keep them away from pets.
Call poison control if more than 1 magnet is swallowed.
39. Upon information and belief, sets of Zen Magnets currently are sold with
packaging that contain the following warning on a 2" x 2" slip of paper:
Warning: DO NOT SWALLOW MAGNETS. How old do you have to
be to play with these? Dunno. 14 years old in the U.S for a strong
magnetic toy, unless it's not a toy, then no age limit, but they're fun
magnet spheres, aren't they a toy? Unless it's a "science kit" then the
governn1ent age recommendation is 8+. But really, it's whatever age at
which a person stops swallowing non-foods. Strong magnets can cause
fatal intestinal pinching. Place swallowing magnets on your don't do list
along with breathing water, drinking poison, and running into traffic. Call
poison control if more than one is swallowed. And keep these away from
kids (and pets) who don't understand these dangers. BTW, this is a
"science kit" for sure.
40. Upon information and belief, as of August 2012, the lower portion ofthe
opposite side of the 2" x2" sheet that accompanies the magnets contains the following
warning:
7
"Government Warning": This product contains small magnets.
Swallowed magnets can stick together across intestines causing serious
infections. Seek immediate medical attention if magnets are swallowed or
inhaled. Keep away from all bodily orifices. CPSC 14+ Age
Recommendation.
41. Upon information and belief, Respondent sells some sets of the Zen
Magnets in packaging without this warning.
42. Upon information and e l i e f ~ the 2" x 2" sheet of paper also refers users to
the Respondent's website, which makes comments that challenge the credibility of the
government's position regarding the safety of the products.
43. Upon information and belief, as of January 9, 2013, Respondent's home
page contains the following statement regarding the Complainant: "Busy Federal CPSC
says magnets should not be allowed: guns entrenched to knees. Uncompromising stance,
mean sting, and no mind for democracy that disagrees." The statement is followed by a
link to SaveMagnets.com.
44. Upon information and belief, individuals who want to purchase Zen
magnets in different colors are directed through the F AQ section of
www.zenmagnets.com to a hyperlink that connects the user to: www.neoballs.com.
45. Upon information and belief, www.neoballs.com is Zen's U.S. direct sales
website for Neoballs.
46. Upon information and belief, beginning in November 2012,
www.neoballs.com, contained the following warning regarding Neoballs:
8
Practice responsible magnet usage! High power magnets may cause fatal
intestinal pinching if swallowed. Keep away from all orfices. [sic] RARE
EARTH MAGNETS ARE NOT TOYS. Don't leave them around animals,
or children who don't understand the dangers. Always communicate these
dangers when sharing magnets. If magnets are ingested or aspirated to the
lungs, immediate medical attention is required.
47. Upon information and belief, the majority of the warning above is
displayed in smaller than 12-point font.
48. Upon information and belief, as of January 9, 2013, no warning about the
danger of magnet ingestion appears on the homepage of the website: www.neoballs.com.
Rather, the site declares: "Don't let CPSC bypass Democracy. If magnets are outlawed,
only outlaws will have magnets."
49. Upon information and belief, users who attempt to purchase Neoballs
from the website encounter a pop-up window that contains, in part, the following
language: "Warning: Keep Away From Mouth. Practice responsible magnet usage!"
50. Upon information and belief, when a consumer purchases 18 or more
Neoballs, the magnets are sold in a box that contains the following warning printed on a 4
Y2" x 1 W' paper insert:
9
OMFG
README
This is serious. The grumpy CPSC is about to BAN magnet spheres in the
US because they are an ingestion hazard. They don't trust that you are
capable of understanding and following warnings. Prove them wrong, or
we all can't have nice magnets. Zen Magnets LLC, the producer of
Neoballs, has had no record of ingestion and we'd like to keep it that way.
High powered magnets can cause potentially fatal intestinal pinching if
swallowed. Keep magnet spheres away from all orifices, especially the
mouth and nose. High powered magnets are not a toy. Keep away from
anybody who does not understand these dangers. SRSL Y.
Sorry about the lecture. We had to. Hope you understand.
51. Upon information and belief, with the exception of the heading "OMFG"
and "READ ME," the majority ofthe warning is in less than 10-point font.
52. Upon information and belief, if a consumer purchases fewer than 18
Neoballs, no warning accompanies the magnets.
53. Since Zen Magnets were introduced in commerce in 2009, many children
under the age of 14 have ingested products ("Ingested Products") that are almost identical
in form, substance, and content to the Subject Products.
54. Upon information and belief, the Ingested Products are marketed and used
in substantially similar ways to the Subject Products.
10
55. Upon information and belief, on or about January 28, 2010, a 9-year-old
boy used small, high-powered, spherically-shaped magnets, almost identical in form,
substance, and content to the Subject Products, to mimic tongue and lip piercings. In
doing so, the boy accidentally ingested seven magnets. He was treated at an emergency
room.
56. Upon information and belief, on or about September 5, 2010, a 12-year-
old girl accidentally swallowed two small, high-powered, spherically-shaped magnets
almost identical in form, substance, and content to the Subject Products. She sought
medical treatment at a hospital, including x-rays and monitoring for infection and damage
to her gastrointestinal tract.
57. Upon information and belief, on or about December 23, 20 I 0, a 3-year-old
girl ingested eight high-powered, small, spherically-shaped magnets almost identical in
form, substance, and content to the Subject Products, which she had found on a
refrigerator in her home. She required surgery to remove the magnets. The magnets
caused intestinal and stomach perforations and had become embedded in the girl's
trachea and esophagus.
boy suffered intestinal perforations after ingesting three high-powered, small, spherically-
shaped magnets almost identical in form, substance, and content to the Subject Products
that he thought were chocolate candy because they looked like the decorations on his
mother's wedding cake.
59. By November 2011, the Commission was aware of approximately 22
11
reports of ingestions of high-powered, small, spherically-shaped magnets almost identical
in form, substance, and content to the Subject Products.
60. On November 11, 2011, the Commission issued a public safety alert,
warning the public of the dangers ofthe ingestion of rare earth magnets like the Subject
Products.
62. Since the safety alert, the Commission has received dozens of reports of
children ingesting high-powered, small, spherically-shaped magnets that are almost
identical in form, substance, and content to the Subject Products but may be
manufactured and/or sold by firms other than the Respondent.
girl accidentally ingested two high-powered, small, spherically-shaped magnets almost
identical in form, substance, and content to the Subject Products, after using them to
mimic a tongue piercing. The magnets became embedded in her large intestine, and she
underwent x-rays, CT scans, endoscopy, and an appendectomy to remove them. The
girl's father had purchased the magnets for her at the local mall.
64. All warnings on the Subject Products are inadequate and defective because
the warnings do not, and cannot, communicate effectively to consumers, including
parents and caregivers, the hazard associated with the Subject Products and magnet
ingestions.
65. Because the warnings on the Subject Products and the websites where the
Subject Products are, or were, offered for sale, are inadequate and defective, parents will
12
continue to give children the Subject Products or allow children to have access to the
Subject Products.
66. Children cannot, and do not, appreciate the hazard, and it is foreseeable
that children will mouth the items, swallow the magnets, or, in the case of adolescents
and teens, use the magnets to mimic body piercings. These uses can and do result in
InJury.
defective because the small size of the paper bearing the warnings, as well as the font
size used in the warning, hinders legibility and may discourage consumers from reading
the text, making it less likely that consumers will review the warnings on the packaging
prior to foreseeable uses of the Subject Products. These uses can and do result in injury.
68. All warnings on the packaging and/or carrying cases of the Subject
Products are inadequate and defective because they are undermined by derogatory
language contained on the Firm's website that questions the credibility of the source of
those warnings and may encourage consumers to disregard the warnings.
69. All warnings on the packaging and/or carrying cases of the Subject
Products are inadequate and defective because the placement of the warnings on the
underside of the packaging and/or inside the carrying case only, renders the warnings
inconspicuous, such that consumers likely will not review the warnings prior to
foreseeable uses of the Subject Products. These uses can and do result in injury.
defective because the packaging on which the warnings are written often is discarded,
13
such that consumers will be unable to review the warnings on the packaging prior to
foreseeable uses ofthe Subject Products. These uses can and do result in injury.
71. All warnings in the instructions included with the Subject Products are
inadequate and defective because the instructions are not necessary for the use of the
Subject Products and often are discarded. Because the instructions are unnecessary and
are often discarded, consumers likely will not review the warnings contained in the
instructions prior to foreseeable uses of the Subject Products. These uses can and do
result in injury.
once the Subject Products are removed from the packaging and/or the carrying case prior
to foreseeable uses ofthe Subject Products, the magnets themselves display no warnings,
and the small size of the individual magnets precludes the addition ofwarnings. These
uses can and do result in injury.
the magnets are shared and used among various consumers, including children, after the
packaging and instructions arc discarded; thus, many consumers of the Subject Products
will have no exposure to any warnings prior to using the Subject Products. These uses
can and do result in injury.
74. All warnings displayed on the carrying cases, if any, are inadequate and
defective because consumers are unlikely after each use to disassemble configurations
made with the Subject Products, many of which are elaborate and time-consuming to
create, to return the Subject Products to the carrying case, or to put the Subject Products
14
out of the reach of children.
75. Upon information and belief, some sets of Zen Magnets come with a
"laser etched stainless steel building platform." The use of this platform makes it
unlikely that a consumer will return the Zen Magnets to the carrying case and put the
magnets out of reach of children, but it is more likely that he or she will display the
creation.
76. The effectiveness of the warnings on the Subject Products is diminished
further by the advertising and marketing of the Subject Products.
77. Upon information and belief, as late as October 2011, Respondent was
aware that Zen Magnets were displayed with other toys on the Amazon LLC website.
78. Upon information and belief, Respondent only recently changed Zen
Magnet's marketing to comply with ASTM Standard F963. Zen's website now states:
"CPSC recommends minimum age of 14" and "U.S. Government age recommendation is
14 years."
79. Respondent has advertised Zen Magnets as, inter alia, "fun to play with"
and as items that "look good on cute people." The advertising suggests that the product
"may have health benefits" and encourages consumers to use the product to "relieve
boredom."
80. Upon information and belief, despite making no significant design or other
physical changes to Zen Magnets since their introduction in 2009, Respondent has
attempted subsequently to rebrand Zen Magnets as, inter alia, an educational "science
kit," suitable for 8 year olds, although the Firm has provided no educational material with
15
the Subject Product.
81. Upon information and belief, Neoballs are color-coated magnet balls,
making the product even more appealing to children.
82. Upon information and belief, Neoballs are sold at a price point of between
eight to 10 cents per magnet. This low price point makes it more likely that caregivers
will purchase the product for children as a starter set or novelty item.
83. Upon information and belief, Respondent markets Neoballs for the
product's ability to make simple constructions, including action figures, soccer balls with
a goalie, and simple jewelry.
84. The advertising and marketing of the Zen Magnets conflict with the
claimed 14+ age label on Zen Magnets.
85. Because the advertising and marketing of the Zen Magnets conflict with
the age label, the effectiveness of the age label is diminished.
86. The advertising and marketing of the Subject Products conflict with the
stated warnings on the Subject Products.
87. Although the websites and some of the products bear a warning that
purports to be a "Government" warning regarding magnet ingestion, other text, e.g., "the
grumpy ... CPSC ... [t]hey don't trust ... you" on the websites undermines the
credibility and effectiveness of those warnings, which, in tum, may cause consumers to
disregard the warnings.
88. Because the advertising and marketing conflict with the stated warnings,
the effectiveness of the warnings is diminished.
16
89. No warnings or instructions could be devised that would effectively
communicate the hazard so that the warnings and instructions could be understood and
heeded by consumers and reduce the number of magnet ingestion incidents.
90. Because of the lack of adequate instructions and safety warnings, a
substantial risk of injury presents as a result ofthe foreseeable use and misuse ofthe
Subject Products.
The Subject Products Are Defective Because a Substantial Risk oflnjury Arises as a
Result of The Magnets' Operation and Use and the Failure of the
Subject Products to Operate as Intended
operation or use of the product or due to a failure of the product to operate as intended.
16C.F.R. 1115.4.
92. The Subject Products contain a design defect because they present a risk
of injury as a result of their operation and/or use.
93. Upon information and belief, the Subject Products have been advertised
and marketed by the Respondent to both children and adults. As a direct result of such
marketing and promotion, the Subject Products have been, and currently are, used by
both children and adults.
94. The risk of injury occurs as a result of the use of the Subject Products by
adults, who give the Subject Products to children or allow children to have access to the
Subject Products.
95. The risk of injury occurs as a result of the foreseeable use and/or misuse of
the Subject Products by children.
17
96. The Subject Products contain a design defect because they fail to operate
as intended and present a substantial risk of injury to the public.
97. Upon infonnation and belief, Respondent contend that the Subject
Products are a manipulative that provides stress relief and/or other benefits to adults only.
98. The Subject Products are intensely appealing to children due to the
Subject Products' tactile features, small size, and highly reflective, shiny, and colorful
metallic coatings.
99. Neoballs can be purchased in bright color combinations that are likely to
add to the perception that the magnets are intended to appeal to children because they
offer creative value as puzzles, models, or art, by combining magnetism with color.
100. The Subject Products are also appealing to children because they are
smooth, unique, and make a soft snapping sound as they are manipulated.
101. The Subject Products also move in unexpected, incongruous ways as the
poles on the magnets move to align properly, which can evoke a degree of awe and
amusement among children, enticing them to play with the Subject Products.
102. Despite the current age label suggested by Respondent on Zen Magnets
and irrespective of Respondent's assertions regarding the proper uses for Zen Magnets,
Zen Magnets do not operate as intended because they are intensely appealing to, and
often are played with, by children.
103. This defective design of the Subject Products poses a risk of injury
because parents and caregivers buy the Subject Products for children and/or allow
children to play with the Subject Products.
18
The Type of Risk of Injury Renders the Subject Products Defective
104. The risk of injury associated with a product may render the product
defective. 16 C.F.R. 1115.4.
105. Upon information and belief, the Subject Products have low utility to
consumers.
consumers.
107. The nature ofthe risk of injury includes serious, life-threatening, and long-
term health conditions that can result when magnets attract to each other through
intestinal walls, causing harmful tissue compression that can lead to perforations, fistulas,
and other gastrointestinal injuries.
108. Children, a vulnerable population protected by the CPSA, are exposed to
the risk of injury associated with the Subject Products.
I 09. The risk of injury associated with the ingestion of the Subject Products is
neither obvious, nor intuitive.
110. Warnings and instructions cannot adequately mitigate the risk of injury
associated with ingesting the Subject Products.
Ill. Children mouthing and ingesting the Subject Products is foreseeable.
112. Respondent promoted the use of the Subject Products for body art,
including mimicking tongue piercings. Such usc by children is foreseeable.
113. The type of risk of injury renders the Subject Products defective.
114. The Subject Products pose a risk of magnet ingestion by children below
19
the age of 14, who may, consistent with developmentally appropriate behavior, place a
single magnet or numerous magnets in their mouth.
115. The risk of ingestion also exists when adolescents and teens use the
product to mimic piercings of the mouth, tongue, and cheek and accidentally swallow the
magnets.
116. Iftwo or more of the magnets are ingested, and the magnetic forces of the
magnets pull them together, the magnets can pinch or trap the intestinal walls or other
digestive tissue between them, resulting in acute and long-term health consequences.
Magnets that attract through the walls of the intestines result in progressive tissue injury,
beginning with local inflammation and ulceration, progressing to tissue death, then
perforation, or fistula formation. Such conditions can lead to infection, sepsis, and death.
117. Ingestion of more than one magnet often requires medical intervention,
including endoscopic or surgical procedures.
118. Because the initial symptoms of injury from magnet ingestion are
nonspecific and may include nausea, vomiting, and abdominal pain, caretakers, parents,
and medical professionals easily may mistake these nonspecific symptoms for other
common gastrointestinal upsets and believe erroneously that medical treatment is not
required immediately, thereby delaying potentially critical treatment.
119. Medical professionals may not be aware of the dangers posed by ingestion
of the Subject Products and the corresponding need for immediate evaluation and
monitoring. A delay of surgical intervention or other medical treatment due to the
patient's presentation with nonspecific symptoms and/or a lack of awareness by medical
20
personnel of the dangers posed by multiple magnet ingestion can exacerbate life-
threatening internal injuries.
120. Magnets that become affixed to each other through the gastrointestinal
walls and are not removed surgically may result in intestinal perforations, which can lead
to necrosis, the formation of fistulas, or ultimately, perforation of the bowel and the
leakage of toxic bowel contents into the abdominal cavity. These conditions can lead to
serious injury and possibly even death.
121. Endoscopic and surgical procedures may also be complicated in cases of
multiple magnet ingestion, due to the attraction of the magnets to the metal equipment
used to retrieve the magnets.
gastrointestinal tract are also at risk for long-term health consequences, including
intestinal scarring, nutritional deficiencies due to loss of portions of the bowel, and, in the
case of girls, fertility problems.
123. The Subject Products contain defects in packaging, warnings, and
instructions, which can create a substantial risk of injury to the public.
124. The Subject Products contain detects in design that pose a substantial risk
of injury.
125. The type of risk of injury posed by the Subject Products creates a
substantial risk of injury.
126. Therefore, because the Subject Products are defective and create a
substantial risk of injury, the Subject Products present a substantial product hazard within
21
the meaning of Section 15(a)(2) ofthe CPSA, 15 U.S.C. 2064(a)(2).
Count 2
The Subject Products Are a Substantial Product Hazard Under
Section 15(a)(l) ofthe CPSA, 15 U.S.C. 2064{a)(l)
127. Paragraphs 1 through 126 are hereby realleged and incorporated by
reference, as though fully set forth herein.
128. Upon information and belief, each of the Subject Products is an object
designed, manufactured, and/or marketed as a plaything for children under 14 years of
age, and therefore, each of the Subject Products that was imported and/or otherwise
distributed in commerce after August 16, 2009, is a "toy," as that term is defined in
ASTM International Standard F963-08, Standard Consumer Safety Specification for Toy
Safety, section 3.1.72 and its most recent version, ASTM 963-11 section 3.1.81 (the "Toy
Standard").
129. As toys, and as toys intended for use by children under 14 years of age, as
distributed in commerce after August 16, 2009, were and are covered by the Toy
Standard.
130. Pursuant to the Toy Standard, a magnet that has a flux index greater than
50, and that is a small object, as determined by the Toy Standard, is a "hazardous
magnet."
131. The Toy Standard prohibits toys from containing a loose-as-received
hazardous magnet.
22
commerce after August 16, 2009, consist of and contain loose-as-received hazardous
magnets. As a result, the Subject Products that were imported and/or otherwise
distributed in commerce after August 16, 2009, fail to comply with the Toy Standard.
134. Because the Subject Products that were imported and/or otherwise
distributed in commerce after August 16, 2009, fail to comply with the Toy Standard and
create a substantial risk of injury to the public, they are a substantial product hazard as
the term "substantial product hazard" is defined in Section 15(a)(l) ofthe CPSA, 15
U.S.C. 2064(a)(1).
Relief Sought
Wherefore, in the public interest, Complaint Counsel requests that the
Commission:
A. Determine that the Subject Products present a "substantial product hazard"
within the meaning of Section 15(a)(2) ofthe CPSA, 15 U.S.C. 2064(a)(2),
and/or present a "substantial product hazard" within the meaning of Section
15(a)(l) ofthe CPSA, 15 U.S.C. 2064(a)(1).
B. Determine that extensive and effective public notification under Section
15(c) of the CPSA, 15 U.S.C. 2064(c), is required to adequately protect children
from the substantial product hazard presented by the Subject Products, and order
Respondent under Section 15( c) of the CPSA, 15 U .S.C. 2064( c) to:
(1) Cease importation and distribution of the Subject Products;
23
(2) Notify all persons that transport, store, distribute, or otherwise
handle the Subject Products, or to whom such product has been
transported, sold, distributed, or otherwise handled, to cease distribution of
the products immediately;
(4) Give prompt public notice of the defects in the Subject Products,
including the incidents and injuries associated with ingestion, including
posting clear and conspicuous notice on Respondent's website, and
providing notice to any third party website on which Respondent has
placed the Subject Products for sale, and provide further announcements
in languages other than English, and on radio and television;
(5) Mail notice to each distributor or retailer of the Subject Products;
and
(6) Mail notice to every person to whom the Subject Products were
delivered or sold;
C. Determine that action under Section 15(d) of the CPSA, 15 U.S.C.
2064(d), is in the public interest, and additionally, order Respondent to:
(1) Refund consumers the purchase price ofthe Subject Products;
reasonable and foreseeable expenses incurred in availing themselves of
any remedy provided under any Commission Order issued in this matter,
as provided by Section 15 U.S.C. 2064(e)(l);
24
(3) Reimburse retailers for expenses in connection with carrying out
any Commission Order issued in this matter, including the costs of returns,
refunds, and/or replacements, as provided by Section 15(e)(2) of the
CPSA, 15 U.S.C. 2064(e)(2);
( 4) Submit a plan satisfactory to the Commission, within ten (1 0) days
of service of the Final Order, directing that actions specified in Paragraphs
B(l) through (6) and C(l) through (3) above be taken in a timely manner;
(5) To submit monthly reports, in a format satisfactory to the
Commission, documenting the progress of the corrective action program;
(6) For a period of five (5) years after issuance of the Final Order in
this matter, to keep records of its actions taken to comply with Paragraphs
B(l) through (6) and C(l) through (5) above, and supply these records to
the Commission for the purpose of monitoring compliance with the Final
Order;
(7) For a period of five (5) years after issuance of the Final Order in
this matter, to notify the Commission at least sixty (60) days prior to any
change in its business (such as incorporation, dissolution, assignment,
sale, or petition for bankruptcy) that results in, or is intended to result in,
the emergence of a successor corporation, going out of business, or any
other change that might affect compliance obligations under a Final Order
issued by the Commission in this matter; and
D. Order that Respondent shall take other and further actions as the
25
Commission deems necessary to protect the public health and safety and to
comply with the CPSA.
Dated this Jl day of Ff'/,rllfr'J-, 2013
~ ~
Executive Director
Bethesda, MD 20814
Tel: (301) 504-7854
Bethesda, MD 20814
Tel: (301) 504-7809
Richa Dasgupta, Trial Attorney
Complaint Counsel
Office ofthe General Counsel
Bethesda, MD 20814
Tel: (301) 504-7808
26
In the Matter of
ZEN MAGNETS, LLC
Respondent.
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)
)
)
)
)
)
)
)
_______________________________)
LIST AND SUMMARY OF DOCUMENTARY EVIDENCE
Pursuant to 16 C.F.R. 1025.11(b)(3) ofthe Commission's Rules ofPractice for
Adjudicative Proceedings, the following is a list and summary of documentary evidence
supporting the charges in this matter. Complaint Counsel reserves the right to offer additional
evidence during the course of the proceedings.
1. Claims, complaints, medical records, and reports concerning incidents involving
the Zen Magnet Rare Earth Magnetic Balls and Neoballs (together, the "Subject Products") and
similar products.
2. Communications from consumers regarding their purchase of the Subject
Products and similar products for children under the age of 14, including their attention to, and
understanding of, the Subject Products' and similar products' warnings, labeling, and
instructions.
3. Documents evidencing the product warnings, labeling, and packaging since the
introduction of Zen Magnets products in 2009 and Neoballs in 2011.
4. Advertisements, marketing, and promotional materials for Zen Magnets and
Neoballs products, including print and Web media, since 2009.
1
5. Correspondence between Respondent and CPSC staiTregarding failure of the
Subject Products to comply with ASTM 963 and subsequent changes by Respondent to
marketing, warnings, and instructions regarding the Subject Products.
6. CPSC's In-Depth Epidemiological Investigation Reports ofnear-ingestion,
ingestion, and injury incidents involving the Subject Products and similar products.
7. CPSC Product Safety Assessments from the Directorate for Engineering Sciences,
the Directorate of Economic Analysis, the Division of Health Sciences, and the Division of
Human Factors concerning the Subject Products.
8. Documentary evidence regarding the development of and changes to the
packaging, labeling, and instructions of the Subject Products since 2009.
conducted by or for Respondent.
10. Technical records, technical analyses, and evaluations of the Subject Products and
similar products, and summaries thereof, from outside expert witnesses retained by CPSC staff
for the purposes of litigation.
11. Information provided by Respondent and/or its representatives to Commission
staff pertaining to the Subject Products.
12. Public notices issued by the Commission regarding the Subject Products and
similar products.
13. Standards regarding high-powered magnets, including, but not limited to, ASTM
F963-08.
14. Reports and publications from medical professionals regarding the hazards of
ingestion of magnets, including how the injuries occur, the difficulty in diagnosing and treating
2
such ingestion incidents, and the long-term health consequences attendant to such injuries.
15. Information provided by consumers pertaining to any products liability, personal
injury, or other lawsuits filed against Respondent in connection with the Subject Products.
Mary B. Mu hy
Divisions of Compliance, Office of Ge ral Counsel
Bethesda, MD 20814
Tel: (301) 504-7809
Bethesda, Maryland 20814
3
EXHIBIT C
SCREEN SHOT OF
WWW.GETBUCKYBALLS.COM
MOH Liquidating Trust http://www.getbuckyballs.com/
1 of 1
On December 27, 2012 Maxfield & Oberton Holdings, LLC (the "Company') stopped doing
business and filed a Certificate of Cancellation with the Secretary of State of Delaware,
thereby ceasing to exist pursuant to applicable Delaware law. The MOH Liquidating Trust
has been established to deal with and, to the extent they are valid, pay, to the extent
assets are available, certain claims which have been, and may later be, asserted against
the Company. If you believe you have a claim against the Company, please click on link
below to obtain the Proof of Claim form which you must complete and submit to the
Trustee of the MOH Liquidating Trust. If the Trustee determines that a claim is valid, the
Trustee will pay that claim, to the extent assets are available, In accordance with the terms
of the MOH Liquidating Trust.
If you have a claim lor an online order previously
placed on lhls sne lhat never arrived, please email:

hare to obtain a Proof of Claim form
For safety lnformaUon on using products sold by
Maxfield & Oberton, click here.
This site is not owned or operated by Maxfield & Oberton Holdings. LLC. In order to make
reasonable provision for payment of certain cia ms that had been, or In the future might be,
asserted against it, among other things, Maxfield & Oberton arranged for the creation and
maintenance of this site before Oecember 27, 2012, the date on which the Company ceased
to exist pursuant to app'icab'e Delaware law
2/4/2013 4:49PM
EXHIBITD
E-MAIL FROM TRUSTEE STATING THAT
MOH LIQUIDATING TRUST WILL NOT
APPEAR ON BEHALF OF M&O
From: Julie Teicher
Sent: Wednesday,
To:
Cc:
Dear Ms. Dasgupta,
; Murphy, Mary; Argabright, Jennifer
Oberton Holdings LLC (CPSC No. 12
I have reviewed the correspondence attached to your email. The MOH Liquidating Trust is not a
party to the CPSC action and will not be appearing in CPSC NO. 12-1.
Julie Teicher
.Iuiie Beth 1 r ichrr
Erman, Tckhcr. Miller, Zucker & Freedman, P.C.
4ilil Gallcriu 444
Smt!h Ml
EXHIBITE
COMMUNICATIONS BETWEEN MR.
ZUCKER AND CPSC COMMISSIONERS
AND STAFF
CPSC PUBLIC CALENDAR
Vol. XXXIX, No. 26 U.S. Consumer Product Safety Commission- Bethesda, Maryland 20814 April4, 2012
CPSC Hotline: 1-800-638-CPSC (2772) * CPSC's Web Site: http://www.cpsc.gov
Commission Agendas
Listed below are agendas of Commission Meetings
scheduled for the week of April 9, 2012. For a recorded
message concerning the latest agenda information call
(301) 504-7948.
Commission Meeting
Wednesday, Aprill1, 2012
10:00 a.m. - II :00 a.m.
Hearing Room 420
Open to the Public
Matter to be Discussed
Decisional Matter: 1112 Lab Withdrawal, Codification
& Audit Provisions- Notice of Proposed Rulemaking
A live webcast of the Meeting can be viewed at
http://www .cpsc.gov/webcas t
Commission Meeting
Wednesday, April II, 2012
11:00 a.m. - 12:00 p.m.
Hearing Room 420
Closed to the Public
Compliance Status Report
The Commission staff will brief the Commission on the
status of compliance matters.
Meetings Between Commission
Staff and Outside Parties
All meetings listed below are open to the public unless
otherwise stated. For information on a specific meeting or to
attend a meeting, please call the contact person listed for that
meeting. Individuals requiring reasonable accommodation for
a meeting should contact the Office of the Secretary, 301-504-
7923 or by email, cpsc-os@cpsc.gov. Determinations on
requests for reasonable accommodation will be made on a
case-by-case basis. Abbreviations: we use asterisks (*) to
identify meetings for the current week which have not
appeared before in the printed Public Calendar. If the meeting
involves discussion of a "substantial interest matter," defined
by CPSC's Meetings Policy, we show the date when we posted
notice of the meeting on the Master Calendar. The Master
Calendar is on the CPSC Web site at
www.cpsc.gov/calendarmast.html. We indicate whether a
meeting is of substantial interest by the symbol {S); we use the
symbol (N) to indicate non-substantial interest meetings. The
Commission offices are located in the Bethesda Towers, 4330
East West Highway, Bethesda, Maryland.
Under the Meetings Policy, a staff person holding or attending
a substantial interest meeting must file a log of the meeting
with the Office of the Secretary within 20 days.
Week of April9 thru AprillS, 2012
Tuesday, April 10
*Cheryl Falvey, General Counsel, meeting with Suzanne
Echevarria of ExxonMobil, William Rawson and Ann
Claassen of Latham & Watkins LLP to discuss the CHAP and
OMB peer review rules; 8:30 a.m., Bethesda Towers. For
additional information contact Cheryl Falvey, (301) 504-7642;
e-mail: cfalvey@cpsc.gov. Transmitted to the Office of the
Secretary 4/2/12. Posted on Master Calendar 4/3/12. (S)
Page 1 of 4
CPSC Public Calendar No. 26, April 4, 2012
Tuesday, April 10
*Andrew Trotta, Directorate for Engineering Sciences (ES),
attending a meeting of the Fire Protection Research
Foundation (FPRF) Research Advisory Committee to discuss
activities and direction of future activities of the Foundation;
11 :00 a.m., BWI Marriott, 1743 West Nursery Road,
Baltimore MD, 21090. The meeting is being coordinated by
Kathleen Almand, Executive Director, FPRF. For additional
information contact Andrew Trotta, (30 I) 987-2057.
Transmitted to the Office of the Secretary 4/2/ 12. Posted on
Master Calendar 4/2/12. (N)
Tuesday, April I 0
*Vince Amodeo, Directorate for Engineering Sciences,
attending phone conference meeting with ASTM Fl5.22
Magnet Toy Working Group to discuss F963 Toy Safety draft
revisions. 2:00 p.m. The meeting was requested by the ASTM
Working group. For additional information/meeting access,
contact Vince Amodeo, (301) 934-2301; email:
vamodeo@cpsc.gov Transmitted to the Office of the
Secretary 4/3/12. Posted on Master Calendar 4/3112. (S)
Tuesday, April 10
The Chronic Advisory Panel (CHAP) on Phthalates and
Phthalate Substitutes will have a teleconference on Tuesday,
April 10, 2012. The teleconference will take place from 11 :00
a.m. to 1:00 p.m. EDT (15:00 to 17:00 GMTIUTC). The
CHAP will discuss its progress toward completing its analysis
of potential risks from phthalates and phthalate substitutes.
Members of the public who wish to listen to the teleconference
should contact Michael Babich at mbabich@cpsc.gov for call-
in instructions by Friday Apri16, 2012. Members of the public
will not have the opportunity to ask questions or comment
during the teleconference. For additional information contact
Michael Babich at 301-504-7253 or mbabich(d: cpsc.gov.
Transmitted to the Office of the Secretary 3/22/12. Posted in
the Public Calendar 3/28112. {S)
Wednesday, April 11
*Scott Heh, Office of Hazard Identification and Reduction,
attending a National Institute of Standards and Technology
(NIST) workshop - Conformity Assessment: Approaches and
Best Practices. The workshop is sponsored by NIST at their
Gaithersburg, MD facility. For additional information contact
Scott Heh, (30 I) 504-7646. Transmitted to the Office of the
Secretary 4/3/12. Posted on Master Calendar 4/3/12. (N)
Page2
Wednesday, April!!
*Gregory K. Rea, Directorate for Laboratory Sciences, will be
participating in a teleconference as a member of the ASTM
F15.18 Baby Changing Table Subcommittee Task Group.
Proposed language for ASTM F 2388 regarding add-on
changing tables for cribs will be discussed. Time: 10:00 a.m. -
11:00 a.m. EST. This teleconference was requested by C.
Campbell, Task Group Leader, of DECA, Inc. For additional
information (including call-in number) contact Gregory K. Rea
via e-mail: grea@cpsc.gov. Transmitted to the Office of the
Wednesday, April II
*Gregory K. Rea, Directorate for Laboratory Sciences, will be
F 15.18 Soft Infant Carrier Subcommittee Task Group.
Proposed language for ASTM F 2236 including a new fastener
strength test and new warning language will be discussed.
Time: 1:00 p.m. - 2:00 p.m. EST. This teleconference was
requested by J. Taft, Subcommittee Chair, of Fisher-Price. For
additional information (including call-in number) contact
Gregory K. Rea via e-mail: grea@cpsc.gov. Transmitted to the
Office of the Secretary 4/2/12. Posted on Master Calendar
4/2/12. {S)
Thursday, April 12
*DeWane Ray, Office of Hazard Identification and Reduction,
George Borlase, Directorate for Engineering Sciences, and
Vince Amodeo, Directorate for Engineering Sciences, meeting
with Erika Z. Jones, Mayer Brown LLP and representatives of
the Bicycle Product Suppliers Association to discuss revisions
to 16 C.F.R. Part 1512 -Requirements for Bicycles; 9:00 a.m.,
Bethesda Towers, room 410B/C. The meeting was requested
by Erika Z. Jones. For additional information contact De Wane
Ray, (301) 504-7547. Transmitted to the Office of the
Thursday, Aprill2
*Rik Khanna, Office of Hazard Identification and Reduction,
and other CPSC staff participating in the Public-Private Fire
Safety Council Quarterly Meeting, at the National Product
Testing and Evaluation Center, Room 103, 5 Research Place,
Rockville, MD 20850. The meeting will begin at I 0:00 a.m.
For additional information contact Rik Khanna, (301) 987-
2508. Transmitted to the Office of the Secretary 4/2/12.
Posted on Master Calendar 4/2/12. (S)
Page 2 of 4
CPSC Public Calendar No. 26, April4, 2012
Future
Monday and Tuesday, April 16-17
Dean W. Woodard, Director, Office of Education, Global
Outreach, and Small Business Ombudsman, will deliver the
keynote address and speak to students at St. Louis University's
Product Safety Management Course at St. Louis University.
The presentation was requested by Dr. Ik-Whan Kwon of St.
Louis University. You may contact Dean W. Woodard at
dwoodard@cpsc.gov for further questions. Transmitted to the
3/12/12. (N)
Monday, April 16 thru Thursday, April 19
Scott Ayers Directorate for Engineering Sciences, Division of
Combustion and Fire Sciences will be attending the National
Candle Association 38
1
h Annual Meeting in Las Vegas, NV.
Included in this trip will be Scott Ayers ' s attendance at the
ASTM F 15.45 Candle Products Subconunittee Meeting on
April 17, 2012 from 8:30a.m. to 12:00 p.m. For additional
information contact Scott Ayers, (301) 987-2030. Transmitted
to the Office of the Secretary 4/2112. Posted on Master
Calendar 4/2/12. (S)
Tuesday, April 17
Tim Smith, Engineering Psychologist (Human Factors);
meeting with ASTM F 15.30 Bunk Bed Subconunittee; I :30
p.m. EST. The meeting was requested by ASTM International.
For additional information about this meeting, contact Tim
Smith, (301) 504-7691, tsmith@cpsc.gov. For information
about how to access this meeting via conference call, contact
Len Morrissey, (610) 832-9719, lmorriss@astm.org.
Transmitted to the Office of the Secretary 3/26/12. Posted on
Master Calendar 3/26112. (S)
Wednesday, April25 thru Friday, April 27
Neal S. Cohen (Small Business Ombudsman) speaking and
participating on panel discussions at the All Baby & Child
Spring Educational Conference in Las Vegas, NV. The
presentations were requested by Neal Cohen in order to ensure
that the juvenile product business community is up to date on
CPSC's regulatory activities in the area of juvenile products,
durable infant and toddler products, and other children's
product safety rules. Exact details and sessions will be posted
as they are made available at:
http://allbabyandchildsec.com/schedule.asp. You may contact
Neal S. Cohen at ncohen@cpsc.gov for further questions.
Master Calendar 3/6/12. (S)
Pagc3
Addendum
Meeting notices printed in this section did not reach the Office
of the Secretary in time to meet the Tuesday noon deadline for
the previously printed Public Calendar. Under the CPSC
Meetings Policy, however, staff persons, including
Commissioners, can meet the seven-day notice requirement by
placing notice of meeting on the Master Calendar at least seven
days before the meeting. The Master Calendar can be found on
the CPSC Web Site at www.cpsc.gov/calendarmast.html.
In addition, the policy allows the Office of the General
Counsel to waive the seven-day notice requirement of
meetings of the staff personnel, and individual Commissioners
can waive the requirement for themselves and their personal
staff.
Wednesday, April4
Conunissioner Anne M. Northup will be meeting with
representatives from Buckyballs and Buckycubes to discuss
the safety program he has in place for the promotion of their
products; 2:00 p.m., Bethesda Towers, room 720. The
meeting was requested by Alan Schoem. For additional
information contact Mark Fellin, (301) 504-7780. Transmitted
to the Office of the Secretary 4/3/12. Posted on Master
Calendar4/3/12. (S)
Wednesday, April 4
Conunissioner Nancy Nord, Joe Martyak, Senior Counsel,
Nathan Cardon, Legal Counsel, and Tim Reggev, Staff
Assistant, meeting with Craig Zucker, Maxfield & Oberton
Holdings, LLC and Allen Schoem to discuss safety program of
Buckyballs; 3:00 p.m. Bethesda Towers, room 811. The
meeting was requested by Maxfield & Oberton Holdings,
LLC. For additional information contact Timothy Reggev,
(301) 504-7040 or treggevC@.cpsc.gov. Transmitted to the
4/2/12. (S)
Wednesday, April4
Scott Ayers, Directorate for Engineering Sciences, Division of
Combustion and Fire Safety Sciences, will be attending the
ASTM Candle Safety Teleconference from 10:00 a.m. to
12:00 p.m. EST. This meeting was originally scheduled for
March 28 but was postponed by the meeting organizer. For
more information on this ASTM meeting contact Jim Becker
of Candle Solutions (606-523-0994). (OGC approved waiver
of seven-day notice.) Transmitted to the Office of the
Page3 of4
CPSC Public Calendar No. 26, April4, 2012
Thursday, April 5
Jake Miller, Directorate for Engineering Sciences, and Greg
Rea, Directorate for Laboratory Sciences, meeting with ASTM
Fl5 Stroller Subcommittee Task Group via teleconference to
discuss stroller product safety standards; 11 :00 a.m. The
meeting was requested by ASTM. Teleconference information
available upon request to Len Morrissey at 610-832-9719. For
additional information contact Jake Miller, (30 I) 987-2338.
(OGC approved waiver of seven-day notice.) Transmitted to
the Office of the Secretary 4/2/12. Posted on Master Calendar
4/3/12. (S)
Page4
CPSC PUBLIC CALENDAR
V l XXXIX N 27 U.s. Consumer Product Safety Commission -Bethesda, Maryland 20814
0. ' o.
Aprilll, 2012
CPSC Hotline: 1-800-638-CPSC (2772) * CPSC's Web Site: http://www.cpsc.gov
Commission Agendas
Listed below is an agenda of a Commission Meeting
scheduled for the week of April16, 2012. For a recorded
message concerning the latest agenda information call
(301) 504-7948.
Commission Meeting
Wednesday, Aprill8, 2012
l 0:00 a.m. - II :00 a.m.
Hearing Room 420
Open to the Public
Decisional Matter: 1112 Lab Withdrawal, Codification
& Audit Provisions- Notice of Proposed Rulemaking
A live webcast of the Meeting can be viewed at
htto://wv.'W.cpsc.gov/webcast
Meetings Between Commission
Staff and Outside Parties
All meetings listed below are open to the public unless
otherwise stated. For information on a specific meeting or to
attend a meeting, please call the contact person listed for that
meeting. Individuals requiring reasonable accommodation for
a meeting should contact the Office of the Secretary, 301-504-
7923 or by email, cpsc-os@cpsc.gov. Determinations on
requests for reasonable accommodation will be made on a
case-by-case basis. Abbreviations: we use asterisks (*) to
identify meetings for the current week which have not
appeared before in the printed Public Calendar. If the meeting
involves discussion of a "substantial interest matter," defined
by CPSC's Meetings Policy, we show the date when we posted
notice of the meeting on the Master Calendar. The Master
Calendar is on the CPSC Web site at
www.cpsc.gov/calendannast.html. We indicate whether a
meeting is of substantial interest by the symbol (S); we use the
symbol (N) to indicate non-substantial interest meetings. The
Commission offices are located in the Bethesda Towers, 4330
East West Highway, Bethesda, Maryland.
Under the Meetings Policy, a staff person holding or attending
a substantial interest meeting must file a log of the meeting
with the Office of the Secretary within 20 days.
Week of April16 thru April22, 2012
Monday and Tuesday, April 16-17
Dean W. Woodard, Director, Office of Education, Global
Outreach, and Small Business Ombudsman, will deliver the
keynote address and speak to students at St. Louis University's
Product Safety Management Course at St. Louis University.
The presentation was requested by Dr. Ik-Whan Kwon of St.
Louis University. You may contact Dean W. Woodard at
dwoodard@cpsc.gov for further questions. Transmitted to the
3/12/12. (N)
Monday, April16 thru Thursday, Aprill9 (Meeting Update)
Scott Ayers Directorate for Engineering Sciences, Division of
Combustion and Fire Sciences will be attending the National
Candle Association 38th Annual Meeting in Las Vegas, NV.
Included in this trip will be Scott Ayers's attendance at the
ASTM F 15.45 Candle Products Subcommittee Meetings on
April 16, 2012 from 4:00p.m. to 6:00p.m. regarding labeling
and on April17, 2012 from 8:30a.m. to 12:00 p.m. regarding
fire safety. For additional information contact Scott Ayers,
(301) 987-2030. Transmitted to the Office of the Secretary
4/6/12. Updated 4/6/12. (S)
Monday, April16 thru Friday, April20
*Patricia Edwards and other CPSC staff will be attending
meetings with the ASTM F15 subcommittee on Juvenile
Products at ASTM Headquarters in West Conshohocken, PA.
These meetings were requested by ASTM. Contact Patricia
Edwards for more information, 301-987-2224. Transmitted to
the Office of the Secretary 4/10/12. Posted on Master
Calendar 4/10112. (S)
Page 1 of2
CPSC Public Calendar No. 27, Aprilll, 2012
Tuesday, April 17
Tim Smith, Engineering Psychologist (Human Factors);
meeting with ASTM F15.30 Bunk Bed Subcommittee; 1:30
p.m. EST. The meeting was requested by ASTM International.
For additional information about this meeting, contact Tim
Smith, (301) 504-7691, tsmith@cpsc.gov. For information
about how to access this meeting via conference call, contact
Len Morrissey, (610) 832-9719, lmorriss@astm.org.
Thursday, April 19
*Caroleene Paul, Directorate for Engineering Sciences, will
attend the Underwriters Laboratories (UL) Table Saw Safety
Working Group meeting for observing performance testing of
table saws; 9:30 a.m. to 3:00 p.m., UL facilities at 333
Pfingsten Road, Northbrook, Illinois 60062. The meeting was
requested by Mahmood Tabaddor of UL. For additional
infonnation contact Caroleene Paul (301) 987-2225, email
cpaul(iiJ.cpsc.gov. Transmitted to the Office of the Secretary
4/10/12. Posted on Master Calendar 4/10112. (S)
Future
Wednesday, April25 thru Friday, April27
Neal S. Cohen (Small Business Ombudsman) speaking and
participating on panel discussions at the All Baby & Child
Spring Educational Conference in Las Vegas, NV. The
presentations were requested by Neal Cohen in order to ensure
that the juvenile product business community is up to date on
CPSC's regulatory activities in the area of juvenile products,
durable infant and toddler products, and other children's
product safety rules. Exact details and sessions will be posted
as they are made available at:
http://allbabyandchildsec.com/schedule.asp. You may contact
Neal S. Cohen at ncohen@;cpsc.gov for further questions.
Tuesday and Wednesday, May 8-9
Marc J. Schoem, Office of Compliance and Field Operations
attending and participating in the ASTM Fl5 playground and
IPEMA meetings in Phoenix, AZ .. The meeting was requested
by ASTM International and IPEMA. For additional
information about this meeting, contact Marc Schoem, (30 1)
504-7520. Transmitted to the Office of the Secretary 4/10/12.
Posted on Master Calendar 4/10/12. (S)
Page 2
Addendum
Meeting notices printed in this section did not reach the Office
of the Secretary in time to meet the Tuesday noon deadline for
the previously printed Public Calendar. Under the CPSC
Meetings Policy, however, staff persons, including
Commissioners, can meet the seven-day notice requirement by
placing notice of meeting on the Master Calendar at least seven
days before the meeting. The Master Calendar can be found on
the CPSC Web Site at www.cpsc.gov/calendarmast.html.
In addition, the policy allows the Office of the General
Counsel to waive the seven-day notice requirement of
meetings of the staff personnel, and individual Commissioners
can waive the requirement for themselves and their personal
staff.
Tuesday, April 1 0
Commissioner Robert Adler, Jason Levine and Jan Fong-
Swamidoss, Counsel to Commissioner Adler met with Alan
Schoem and the CEO of Buckyballs to discuss CPSC's safety
program regarding these products; I :00 p.m., Bethesda
Towers, room 723. The meeting was requested by Alan
Schoem. For additional information contact Ophelia
McCardell, (30 1) 504-7731. Transmitted to the Office of the
Tuesday, April 1 0
The counsel for the firm Maxfield and Oberton, maker of
Buckyballs, requested a meeting on Tuesday, April 10, 20 12,
at 2:30p.m. to 3:30p.m., at CPSC headquarters in Bethesda in
room 834. The meeting was requested to discuss age grading
and injury prevention strategies for magnetic desk toys.
Agency staff included Andy Karneros, Mary Toro, Howard
Tamoff, Jonathan Midgett, Celestine Kiss, Khalisa Phillips,
Sharon White, and Bob Ochsman and other staff within the
Office of the General Counsel attended. Attendees included
Alan Schoem, Craig Zucker, CEO of Maxfield and Oberton.
For more information please contact, Jonathan Midgett
(EXHR) at 301-504-7692 or jmidgett@cpsc.gov. Transmitted
to the Office of the Secretary 4/9/12. Posted on Master
Calendar 4/9/12. (N)
Thursday, April 12
Gregory K. Rea, Directorate for Laboratory Sciences, will be
F 15.18 Play Yard Subcommittee Task Group. Proposed
language for ASTM F 406 regarding missing components of
play yard bassinets will be discussed. Time: 2:00p.m. - 3:00
p.m. EST. This teleconference was requested by K. Pilarz,
Subcommittee Chair, of Fisher-Price, Inc. For additional
information (including call-in number) contact Gregory K. Rea
via e-mail: grea@cpsc.gov. Transmitted to the Office of the
From:
Sent: , June
To: Lee, Thomas
Cc: Alan Schoem
Subject: Industry Update
Dear Mike,
On Behalf Of Craig Zucker
I want to inform you of several recent industry activities involving high-powered magnets intended for adult use. On
Wednesday June 6, 2012, five manufacturers of high-powered magnets intended for adults sent a letter to Len Morrisey of
ASTM (copy enclosed) requesting "the formation of a voluntary standard for the labeling and marketing of loose as
received magnets with a flux index greater than 50 that are small objects as defined in F963-08, Section 4.6, and that are
intended for adults, i.e., those persons 14 years of age and older."
The Executive Committee of ASTM unanimously approved the request for formation of a standard on June 7, 2012. The
five firms that submitted the request to ASTM are Maxfield and Oberton, the manufacturer of Buckyballs and
Buckycubes TM, Zen Magnets LLC, the manufacturer of Zen Magnets TM, Star Networks USA LLC, the manufacturer of
Magnicube , Strong Force Inc., the manufacturer of Neocube TM, and SCS Collectibles, Inc., the manufacturer of Magnet
Balls. A copy of the request is enclosed.
I also want to inform you that working through Association Headquarters, Inc, an association management company
accredited by the AMC Institute (to ANSI standard), six manufacturers of high powered magnets formed the "Coalition for
Magnet Safety" with a mission "To protect the public through responsible labeling, promotion, distribution, and sales of
high-powered, Rare Earth magnets intended for adult use." The founding members of the Coalition are:
Craig Zucker, Maxfield and Oberton Holdings, LLC, the manufacturer of Buckyballs and Buckycubes TM,
Shihan Qu, Zen Magnets LLC,, the manufacturer of Zen Magnets,
Daniel Peykar, Star Network USA LLC, the manufacturer of Magnicube ,
Christopher Reda, Strong Force Inc., the manufacturer of Neocube,
Howard Greenspan, SCS Collectibles, the manufacturer of Magnet Balls,
Nicholas Powell, Neodox LLC, the manufacturer of CyberCube.
The roster and mission statement are attached.
Please let me know if you have any questions about these industry taken actions.
Thank you,
Craig Zucker
President
Maxfield and Oberton
maxfield and oberton

From:
Sent: une
To: Lee, Thomas
Cc: Alan Schoem
Subject: Maxfield and Oberton New Products
Mike:
On Behalf Of Craig Zucker
I wanted to infonn you oftwo new products released by Maxfield and Oberton this
morning. You can product find information at:
https://www.getbuckyballs.com/products/#!/buckybars
https://www.getbuckyballs.com/products/#!/buckybigs
Please let me know if you would like us to send samples of these new items for your
investigation.
Thank you,
Craig
From: Craig Zucker
Zucker
Sent: Tuesday, September 11, 2012 1:06PM
To: Wolfson, Scott
Subject: A Special Thanks from Buckyballs' CEO
Hey :
Behalf Of Craig
Thanks so much for making Thursday's "SaveOnBalls" promo our biggest ever and for helping us
continue the fight to Save Our Balls.
Just wanted to let you know that Buckybars and Bucky Bigs are now back in stock and that I've
extened the 60% OFF everything promo through Sunday Sept. 16th at www.getbuckyballs.com.
Thanks,
Craig
Sent from my iPhone
EXHIBITF
COMMENT FROM MR. ZUCKER ON
PROPOSED SAFETY STANDARD FOR
MAGNET SETS
Comment from Craig Zucker
Document ID: CPSC-2012-0050-0023
This is comment on Proposed Rule: Safety Standard for
Magnet Sets
Docket ID:
CPSC-2012-0050
Topics: No Topics associated with this document
Gu'uTI
View Document: lt;j
Less
Document Subtype:
Status:
Public Comment
Posted
Document Type: Public
Submission
RIN: Not Assigned
Received Date:
Date Posted:
Comment Start Date:
Comment Due Date:
Tracking Number:
September 12 2012, at 12:00 AM Eastern Daylight Time
November 19 2012, at 11:59 PM Eastern Standard Time
8111291
First Name:
Last Name:
Organization Name:
Comment:
See Attached
Attachments:
Title:
Craig
Zucker
Comment from Craig Zucker
Authors:
Craig Zucker
Mt:ndield and Obetton Holding-;, U.C
!80 iiarid< Street I Suit! H2 j Yofh ! NV I 100.11
Ph 347,7'"!2 Ht.59! '3l7
Todd Stevenson, Secretary
Bethesda, MD 20814
Submitted electronically
Re: Comment on Staff Briefing Package on Magnet Rulemaklng
Dear Mr. Stevenson:
I am writing to urge the Commission to reject the CPSC staffs rulemaking proposal
to ban high-powered magnets. The Commission instead should propose a rule
under section 7 of the Consumer Product Safety Act to require uniform and
consistent warnings and labeling on high-powered magnets marketed for adults,
coupled with a public education campaign, much like the Commission has done with
other products that are intended for adults but present a risk if children access the
products. It seems clear from the Notice of Proposed Rulemaking and draft Federal
Register notice being considered by the Commission that the Commission staff is not
giving serious consideration to any alternatives to a ban and is merely going
through the motions to satisfy legal requirements in the Consumer Product Safety
Act.
The staff briefing package is replete with misstatements, speculation and innuendo.
Conjecture and supposition appear to substitute for any substantive empirical
analysis. Moreover, to the extent warning messages are deemed to be ineffective
with respect to high powered magnets intended for adults, the Commission staff
itself has undermined effectiveness through its failure to pursue corrective action
against firms that marketed and promoted their high powered magnets for children
and through major retailers that: 1) allowed high-powered magnets to be listed
under toys and games; 2) allowed such magnets to be listed for children ranging in
age from 2-14; and 3) and allowed choking warning labels on its site implying high-
powered magnets were appropriate for children 3 and older. Not surprisingly,
however, this subject is not addressed at all in the staffs briefing package, although
Maxfield and Oberton raised it repeatedly- and unsuccessfully with the staff.
Such a deficient and potentially misleading briefing package should not be the
subject of a Commission vote to accept the proposal. Moreover, Commission
acceptance of the staffs banning proposal would open the Commission to fair
criticism based on selective application of its regulatory authority.
Recently, the CPSC announced an educational campaign with the Juvenile Products
Manufacturers Association (JPMA) to warn of the dangers of strangulation with
corded baby monitors, a product that has been involved in seven deaths since 2002.
CPSC's Chairman, Inez Tenenbaum, has repeatedly threatened action against
window covering manufacturers if they failed to act to eliminate the risks associated
with corded window coverings that result in strangulation of young children. But
l.S(! Vanek Stret:'l I Sllite 212 I ~ ~ w York INY 110014
PI!. 347 772.8259 I fax 917.591.7i.J24
ultimately it appears she decided the window cord industry was too powerful to
take on, and agreed to an educational campaign and warnings. In an answer to
questions at a recent oversight hearing, Chairman Tenenbaum stated:
[The window covering industry] can make the cord where it's not accessible to children,
and there are all kinds of technologies that they share with us, but they don't want to
eliminate the cord entirely. However, I'm very optimistic meeting with retailers and
with the association that everyone wants to do a massive education campaign so that if
you are buying shades you-and you have children at home, then you would go
cordless. You would go cordless or have no shades. You could have shutters, or
draperies, but you remove the hazard if there are children in home [sic] .

We also want to work with major retailers so that they can train employees at the point
of sale so that their kiosk is online that have baby registries can also bring to attention
of people that if you have a child in the home, you don't-you need to go cordless. But
see if we can address some of the fatalities, and reduce the number of fatalities by an
educational program that was robust.
(CQ Congressional Transcripts, Congressional Hearings August 2, 2012, House Energy and
Commerce Subcommittee on Commerce, Manufacturing and Trade Holds Hearing on Oversight
of the Consumer Product Safety Commission.)
The approach to the more powerful window covering industry is in sharp contrast to the
potential action against the small magnet industry where the CPSC staff takes the position that
warnings will not work, that public education will not work, that the hazard is "hidden" and
nothing will work but a ban. Yet for the window covering industry where numerous
strangulations and near strangulations occur each year due to a hidden hazard for which a
remedy apparently is available, the CPSC somehow deems warnings and public education to be
a perfectly acceptable approach to the safety of our nation's youngest children.
Summary
CPSC has not given warning labels, a safety program and an educational campaign an
opportunity to show their efficacy in preventing injuries associated with high-powered magnets.
Rather, the CPSC staff Is now prematurely proposing a complete, rush-to-judgment ban of these
products based on a briefing package almost entirely lacking in empirical support and which fails
to recognize the CPSC staff's own inaction against improper advertising and marketing of these
products to or for use by children under 14. Contrary to its approach in addressing serious risks
to children presented by other products Including all-terrain vehicles, corded baby monitors and
window coverings, the CPSC staff has refused to give warning labels, safety programs and
consumer education an opportunity to work. If CPSC would specify consistent warnings and
Maxfie ld and Oberton Hold ings, LlC
180 Vari ck S t r ~ e t I Suite 212. I New Yorl\ I NY I 10014
Ph: 3P.772..S259 I F.H<. 91/.591..7{)24
safety programs to be used by all manufacturers of high powered magnets, similar to that used
for Buckyballs and Buckycubes, there is much less likelihood that there will be confusion and
misuse In the marketplace.
I urge the Commission to reject the staff recommended proposed ban of high-powered magnets
intended for adults and instead to propose a rule under section 7 of the CPSA to require, among
other measures, uniform warnings, labeling and packaging on all sets of high-powered magnets
intended for adults. This effort should be coupled with an education and warning program in
cooperation with magnet manufacturers making clear that high-powered magnets are not for
children.
Sincerely,
Craig Zucker
CEO
Maxfield and Oberton
EXHIBITG
EXAMPLES OF WRITTEN
COMMUNICATIONS FROM MR. ZUCKER
TO U.S. LAWMAKERS
From:
To:
Cc:
Subject:
Date:
Atachments: B!oombpm Busjnessweek luty 23-29 Qdf
tlcw VOrk. MllQazjoe - Jylyt6 23 Pdf
Washington posr - July 13 Pdf
Mr. Joseph F. Williams
Compliance Officer
Office of Compliance and Field Operations
Bethesda, MD 20814
Mr. Williams:
Since Maxfield and Oberton's founding in 2009, we have always supported and endorsed
responsible selling of our products and share the same concern for the safety of children as does
CPSC, as evidenced by the cooperative work we have done together.
In spite of this, the Compliance Staff at CPSC has not communicated with us concerning its recent
actions. It has neither provided any written response to our request for reconsideration of the
staff's Preliminary Determination, nor provided us with written technical evidence of any product
defect, since this determination was made. This morning in a phone conversation, the Executive
Director of the agency summarily dismissed our request for reconsideration. Rather than
reconsider your actions or communicate directly with us, you have instead reached out to and
negatively influenced our retailers, effectively shutting down our third-party retail sales without
giving us a chance to defend our products or the safety program behind them
(see www.magnetsafety.com.)
Please find three attachments for your files:
A full-page story showing the success of our company in Bloomberg Business Week from t.a.d.a.,
describing our products as "Rated R" and not for children, (2) A full page review in NY
Magazine about our products dated July 16-23, and (3) a Washington Post review from July 13
calling Buckyballs "everyone's fave accessory."
This is the USA born and raised company you are putting out of business.
On behalf of:
2.5 million adult users of our products,
Our full New York staff and 200 nation-wide sales reps in jeopardy of losing their jobs,
5,000 independent and chain retailers,
Hundreds of thousands of social media followers,
Hundreds of blogs, news publications and sites that consistently review and love our
products,
And both House and Senatorial supporters of what we do;
We look forward to working cooperatively with you over the next few weeks and hope you will see
your way clear to do the same.
Sincerely,
Craig Zucker
home of buckyballs 1 the world's best selling desktoy
www.getbuckyballs.com
Open Letter to President Obama:
Help Our Small Business Be Treated Fairly
':

..t'
.. BuckybalLS.
....! .. .....
Do not put 1n nose or mouth.
SWallowed maQnels can slick to
intestines causmg serious Injury or death
Seek immediate medical attenllon n
magnets are swalkiwed or inhaled.
11
This year's go-to
workplace distraction"
c;--:-....
0
u '...:J' ...._ .. _,
"EverYone's fave
desK accessory"
lrbc UJttlibington tJost
"There's no
better desktoy"
uquVu..
SAVE
oOURO
BA\:1,
GetBuckyballs.com
SavcOurBalls.nct
Dear President Obama:
I know that you support small business.
And now I need your help to save ours from being shut down by
the Consumer Product Safety COIT"mJsslon ICPSC}.
In 2009, I out busineu, crtatlng a ptoduc1 called Buckyballs, stress-relloving
product merkeCAd online to adults. The media rav.d about Buckyba!ta and
loom atwoman llartup we became the most popular adult gift brand
In just three years. Ouo t>uslnoss .. eeeded ""''Y expectation an American
entrepreneur could have had.
Now, the CPSC has sued us, &leg;ng our p<odu<ts.,. doloctive b..:auu udly
a hMdfut of children, out of milions ol units soi!J, hava found and misused them.
What fs parUcutarly unfair Is that the CPSC preemptivety contacted our retailers Md Intimidated
them by asking them to "vofunlee,.. to atop soiling ow producta, effectively dlsmanUing ow- retail
busness In just a few days. The CPSC luuad a press release that most retal&ers and the general
public lnterpreled as Sl'j1ng that our producta had been banned, when in lact they ato still perfectly
legal to seH And the CPSC did this an before even legally servmg u wtlh their lawsurl.
We never had a fair opportunity to defend our
products, company, or safety program.
Over the past two years, the CPSC cfldn, dispute that our products hid the propet warnings
or safety program jn place and evton acknowledged that our products ate safe for adults and
should not be gNen to chllcken In fact, they have commtnded us for our warnings, safety ptagram,
nd wobslle: www.ma;netsaiely com. But suddenly, the CPSC says that
warnings aren't good enough anymo,. and they simply want us to go 0111 ot t>u.tn .. s.
thareby ehmlnabng the fobs of our employees, sides reps and some retailers.
The aamo agency that relies on reasonabte wamlngs for marlY other Pfoductt In the marbtplace
now believes the Ametican public can't be telled upon to hHd the warnings on our products.
The CPSC can't have it both ways.
Our prOd- have five warnings repeated on the packaging and inSIRICtlans.
This contradiction would saam to undetmk\8 the CPSC's rebnce on warnings lor
numerous other products that cause fat more fnluries and IN8n deaths every year Producls
such as balloons. button baheriel. ATVs. nrewotks, cleaners. delltfgent pods and many,
many others that are potentlalty twmful yet remain for sale with warning labels.
Not only does our vigorous safety program work,
but it surpasses that of many other products and Industries.
We do not understand why our proclu<:ts, marketed exclus1V8fy for adulls and with so few
have sUddenly been rabod to the vety top of the CPSC's action li:sl to become the tatgol of U1e first
it[9ation of this type filod In \1 y"'rs.
ltfeels unfair, unjust, and, well, un-Amerlcan.
We will fight back vigorously. But we sure could use your help.
Out adutt cuatomers at'ld onhne communrty of ttvndreds of thouMnds of supportera
Save our ptoducta and don't want them taken away by the CPSC.
Wa ask for your hefp In ensuring that our product are treated lust like any of the thousands
of others regulated by the CPSC that are potentlalty harmful H mbu:wd end vat are allowed
to be marketed. ao long a1 they bear a proper warning Iabat
It's just not right, Mr. President.
Thank vou in advance for anyttWng you can do to ensure we are treated lalrty
Respoc:tfuly.
CreigZuc:ker
Co-f<r<mdeo & CEO. Maxlleld & Oberton
cralgOQetbuckybals.com
EXHIBITH
EXAMPLES OF MR. ZUCKER'S
MEDIA APPEARANCES
ON BEHALF OF M&O
IUU'ftT'?
GUIDE I&
,A,.
-: This is your guide
Access your channel,
playlists. subscriptions.
and more.
'"'
Buckyballs' CEO Craig Zucker on CNBC with CFA's Rachel Weintraub
!f!l: getbuckyballs
lfidJ I!J Subscribe
like
,,
19 .,ldeos
1.:"7:
Published on Aug 20, 2012
About
Craig Zucker debated the Consumer Federation of America's
Rachel Weintraub on CNBC as the battle to save Buckyballs
rnntin11P"
Arl:J tfi

3,654
"16 , 0
.h.l
,,_
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, /'\..,
-: This 1s your guide
Access your channel.
playlists. subscriptions.
and more.
Craig Zucker on Fox News' "Your Wor1d with Neil Cavuto"
B
getbuckyballs HJ
m Subscribe
,, like
,,
About 5hdtt::
Published on Aug 3, 2012
Fox News "Your World with Neil Cavuto got airtime with our CEO
Craig Zucker to discuss taking our battle with the CPSC to Capital
Hil l.
Show more
;::._,_j(i
2,233
., .23 ,.1
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J l._,tVt i.- I I"-""''- I 1 I
Is Proposed Recall on Mag11et Toys U1lfair?
CEO,, Buckyballs
Proposed Ban on Magnet Toys Has Buckyballs Crying Foul
By SHAP.-rN .ALFONS!, NICK CAPOTE and CHRIS JAMES
.ljj J ~ ~ j ~ Sept. 12,2012
Is Proposed Recall on Magnet Toys Unfair? - ABC News http://abcnews.go.com/Healthlproposed-recall-magnet-toys-unfair/st. ..
1 nf 1
Is Proposed Recall on Magnet Toys Unfair?
By SHA R YN A LFONSI. NICK CA POT and CHRiS JAMES
Sept. 12, 20/2- abcnews.go.com
e NEWS Who's at Fault When Products Are Misused?
Buckyballs, a toy made up of small magnetic beads that can be molded into
different shapes, is one of the most popular office toys on the market.
Marketed to adults as a stress reliever and a cure for cubicle boredom, more than two million
Buckyballs have been sold in the United States. The beads are shiny, sculptural and irresistible to play
with, but they can also be dangerous.
At just 20 months old, Presley Bjamson was hospitalized after he swallowed 18 Buckyball beads last
month. His mother, Laura Bjamson, who said she never saw the warning labels on the toy's
packaging, had accidentally left the toy out where Presley could reach it.
When she discovered Presley with the toy, Bjamson said she didn't know at the time if her son had
swallowed the magnets. But Bjamson, who is a registered nurse, took Presley to the pediatrician the
following day as a precaution. An x-ray showed a ring of 18 Buckyballs lodged in his stomach.
"When I first saw that x-ray and saw that it was not one magnet, that it was 18, I panicked," Bjamson
said. "I knew that if they had passed from his stomach into his intestine that he could die. The
ultimate, the highest risk was that he could die."
As these high-power magnetic beads travel through the body, doctors say they can stick together,
pinching tissue and ultimately puncturing holes in the thin intestinal lining.
The U.S. Consumer Product Safety Commission said Presley is just one of an estimated 1, 700 people
who have been hospitalized in the past three years after ingesting these kinds of magnets. As a result,
the CPSC is demanding that Buckyballs and several high-power magnetic toys from other companies
be recalled immediately.
But Buckyballs CEO Craig Zucker is not willing to give in.
"This is the first time in 11 years a company has said to the commission, 'we don't agree a recall is
necessary,"' he said.
The company is challenging the proposed ban because, Zucker argues, Buckyballs are not defective
and they are marketed as an office toy, clearly not intended for or marketed to children.
"We're not in Happy Meals. We're not on Saturday morning cartoons. We're in adult stores ... places
you would go to find something for your dad on Father's Day," Zucker said.
By demanding he stop selling his product, Zucker believes the CPSC has gone too far. In the wake of
the proposed ban, he launched an online campaign called "Save Our Balls," which has sparked a
national debate on the role of big government.
Zucker said his company has tried to reach a compromise with the government. Namely, he has taken
'J/7/'Jil11 .d1R PM
Is Proposed Recall on Magnet Toys Unfair? - ABC News http://abcnews.go.corn!Health/proposed-recall-magnet-toys-unfair/st. ..
2 of3
steps to educate consumers about magnet safety and pointed out that Buckyballs packaging carries
clear warnings to parents.
"[Warning labels are] on the top, the side, the carrying case. It's on the instructions," he said. "I would
say it's impossible to miss the warnings. They're all over the place."
But the CPSC said these warning labels do not go far enough because they don't "travel with the
product," meaning once the toy is removed from the packaging, there is nothing to expose its
potential dangers or stop children from "facing serious injuries."
Children like Presley Bjarnson, who was eventually rushed to the hospital where doctors were able to
remove the 18 Buckyballs without major surgery. He has since made a full recovery.
Tips for Parents: What To Do if Your Child Swallows a Magnet
But 2-year-old Braylon Jordan was not so lucky. In April, Braylon swallowed eight magnetic toy
balls called NeoCubes --one of the 11 companies targeted by the proposed government ban that
volunteered to stop selling its product in the United States.
Braylon's parents said they first noticed something was wrong when their son started vomiting. At
first they thought it was a stomach virus, but soon an x-ray revealed that the tiny magnets were
making their son sick.
The Jordans said they bought the desk toy from a local supermarket before Braylon was born and saw
the warnings on the package. So when they baby-proofed their house, they made sure to hide the
magnets in a cabinet out of his reach, but said they weren't careful enough.
"We didn't say, 'hey Braylon here you go, play with these little beads,"' said Brayton's father, Jonathan
Jordan. "Common sense tells you don't have them around kids but yet somehow he found them, a
couple had rolled out of sight."
Tips for Parents: What To Do if Your Child Swallows a Magnet
The eight magnets Braylon had swallowed stuck together and ultimately destroyed his intestines.
After eight surgeries and one month in the ICU, the rambunctious little boy is now tethered to a
feeding tube 18 hours a day, unable to process solid food.
The Jordans have accrued more than $1.5 million in medical bills over the past five months, and
Braylon's best hope for a normal life is a rare lower bowel transplant. But his parents said they are not
angry with NeoCubes, but at themselves.
"If I had known how dangerous they are, they wouldn't have been in the house at all," Jonathan
Jordan said.
Neocubes told "Nightline" they did not want to be responsible for anyone getting hurt, but added, that
"there are lots of dangerous products out there, especially if you eat them."
The Consumer Product Safety Commission wants to regulate the production of future magnetic office
toy products to make them safer by making magnets larger, so they are more difficult to swallow, and
?/7/?011 4 ~ PM
Is Proposed Recall on Magnet Toys Unfair? - ABC News http://abcnews.go.com/Health/proposed-recall-magnet-toys-unfair/st ...
1 n f 1
less powerful.
In the meantime, they are determined to get all existing toys out of kids' hands and off store shelves
as soon as possible.
For now, Buckyballs can still be purchased in specialty stores and on the company's website. Zucker
said he is holding out hope for a compromise.
Copyright 2013 ABC News Internet Ventures
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, For Buckyballs Toys, Child Safety Is a Growing Issue
By .ANDREW MARTIN
Published: Augusl16, 2012
Three years ago, two pals from Brooklyn came up with the idea of
creating a desktop toy out of powerful magnets. Their creation,
Buckyballs, became an instant hit. And by this year, the two- Craig
Zucker and Jake Bronstein- had expected annual sales to reach
about $25 million.
FACEBOOK
TWITTER
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Enlarge This Image But their business plan has hit a
PRM
Rtcherd PerryfThe New York Timas
Buckyballs are a med at adults, but
1
regulators say such magnets are
hazardous to curious children, who
swallow them.
Rlc:hard Perryffhe t-a.w Yart Times
Craig Zucker of Buckyballs Is fighting
safely complaints.
Enlarge This Image
Richard Porryn"he Now Yo ric Tlmea
1
A Buckyball art piece. Children
sometimes swallow the magnets,
causing heallh emergencies.
major, unanticipated snag.
Buckyballs are made from rare-earth
elements, which makes them much
REPRNTS
more powerful than most magnets - and potentially more
dangerous when ingested. Though the product is marketed
festooned with warning labels, regulators
have moved to stop sales because children keep swallowing
Buckyballs and similar products made by others.
An administrative comiD..aint filed last month by the
Consumer Product Safety Commission seeks to require the
company- officially called Maxfield & Oberton Holdings
- to tell the public about the problem and offer customers
a refund. The safety commission also asked 12 other
manufacturers of rare-earth magnets to voluntarily recall
their products and stop sales; 11 have complied.
Besides Buckyballs, Zen Magnets, a small company in
Denver, refused. Last week, the safety commission filed an
administrative complaint against Zen Magnets too."The
labeling, the warnings, the packaging does not work," Scott
Wolfson, spokesman for the safety agency, said of the
products. "You have young children who come into a room
and get their hands on a loose magnet or two."
The action involving Buckyballs and Zen Magnets is
unusual because the safety commission rarely files an
administrative complaint, which is essentially a request for
a mandatory recall. The last one, filed 11 years ago, was
against Daisy Manufacturing, which makes BB guns. In
Buckyballs' case, a hearing will be scheduled before an
administrative Jaw judge, who will decide whether to grant
the safety commission's request.
In the meantime, Mr. Zucker has started an aggressive
public campaign to win support for Buckyballs. Using the
cheeky slogan "Save Our Balls," his company has taken out
newspaper ads in Washington, directed at President
Obama and lawmakers, and stoked a campaign on social
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Buckyballs, sold in sets, are made
from materials.
In doing so, Mr. Zucker has found enthusiastic support
from those who believe the Obama administration has
pushed regulation too far.
"When an adult, a 28-year-old, can't buy this for their desk, then this agency has run
amok," said Mr. Zucker. "This is government gone absurd."
There were an estimated 1,700 incidents of rare-earth magnets being swallowed and
requiring emergency room care, in some cases surgery, in the three years beginning in
.January 2009, according to the safety commission.
It was not clear how many of those incidents involved Buckyballs, the dominant vendor in
the United States. Mr. Zucker, 33, said there have been 2.5 million sets of Buckyballs sold
and the company has confirmed 12 swallowing incidents. A set of 216 Buckyballs, which
are about the size of BBs, costs $35 (colored Buckyballs cost $40).
Swallowing two or more rare-earth magnets is particularly dangerous because they attract
each other in the intestines and can cause blockages, tissue damage and even perforation.
"Kids do swallow all kinds of stuff, but few pose the kind of risk that these magnets do,"
said Dr. Bryan Vartabedian, a pediatric gastroenterologist at Texas Children's Hospital,
! who treated a toddler whose bowel had been perforated after swallowing rare-earth
magnets. "These are very unique magnets. They are incredibly powerful."
While expressing sympathy for the victims, Mr. Zucker maintained that the complaint
against his company was a case of selective enforcement. He noted that the safety
commission has not banned many other products that cause far more injuries, and even
deaths, to children, including all-terrain vehicles, button-cell batteries and window blinds.
"You can't say warnings work on some products but not others," he said.
But this is not the first effort by the safety commission to crack down on magnets. In 2006,
for instance, the agency announced the recall of several million toys because children were
swallowing magnets that had fallen out of them, causing injuries and at least one death.
Toy manufacturers are now required to encase magnets so they \\ill not fall out.
Initially at least, Mr. Zucker worked with the safety commission to try to educate
consumers that the magnets were dangerous to children. The company voluntarily recalled
175,000 sets of Buckyballs in 2010 because they were labeled for "Ages 13+." The warning
was changed to say that Buckyballs should be kept away from all children.
A year and half later, the safety agency and Mr. Zucker created a safety alert video to warn
consumers about the dangers of ingesting magnets. Mr. Zucker said his company also
created a Web site, called magnetsafety.com, for the same purpose, and required retailers
to agree not to sell the product to children.
But the injuries continued, leading to the newest action against the 13 manufacturers.
In a statement on its Web site, Zen Magnets' founder, Shihan Qu, noted that there had
been no reports of children ingesting its magnets. "Obviously we are being punished
because children have regretfully misused our competitor's magnets," he said. "I urge
those within the C.P.S.C. to think twice before applying the death penalty to innocent
corporate citizens."
Daniel Peykar, co-founder of Magnicube, said his six-month-old company agreed to
voluntarily stop selling its rare-earth magnets, at least temporarily, because it did not want
to pay the legal fees associated with an administrative complaint. "Hopefully, they will
come up with a resolution on labeling and that will apply to everyone in the industry," he
said.
But Mr. Peykar, of Pine Brook, N.J., said he did not agree with the commission's actions.
"The C.P.S.C. has gone to great lengths to try to ban a product rather than come up with a
-- I
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reasonable resolution," he said.
The safety commission and consumer advocates maintain that the ban is warranted
because rare-earth magnets are irresistible to children, even if the packaging says the toys
are intended for adults. In the past, the commission has banned toys that it deemed too
dangerous, like lawn darts, Mr. Wolfson said.
Not surprisingly, Betty Lopez, whose 12-year-old daughter swallowed four Buckyballs in
March while pretending to have a pierced tongue, supports the commission's actions.
"There were kind of three portions of the bowel that were stuck together by the
Buckyballs," said Ms. Lopez, who explained that her daughter required two operations and
missed a month of school. "Knowing what my daughter went through, I don't feel that
Buckyballs serve any true purpose."
Such injuries have marred what may have been a feel-good business success story that
started in a Williamsburg apartment in Brooklyn in 2009.
Mr. Zucker was an entrepreneur who started, among other things, a bottled water business
that sold New York City tap water. Mr. Bronstein wrote a blog, zoomdoggle.com, that
offered tips about workplace fun.
After they saw rare-earth magnets on YouTube, they bought some inventory and
repackaged them as Buclqballs (the nickname of a spherical carbon molecule that
resembles the geodesic dome popularized by the inventor lt .. Fuller).
At first, the two packed the magnets themselves and walked orders to the post office.
Before long, they struggled to keep up with the demand. This year, they were on pace to
sell1.5 million sets, at least before the safety commission's actions.
"We put $1,ooo each into it," said Mr. Zucker, whose cause to stay in business has been
championed by the conservative commentators Rush Limbaugh and Michelle Malkin,
among others. "We never put in another dime. No loans. No investors. We exceeded every
single expectation."
But now, Mr. Zucker says he is fighting for the survival of his business, which is in a
cramped office with eight employees and a '"We Love Our Jobs" sign, made out of
Buckyballs, on the front door. And he is hoping customers raJly behind his
unconventional campaign.
For instance, last week his company urged its Facebook fans to contact the agency "that is
trying to take away our balls," and it listed the names, phone numbers and e-mail
addresses of Mr. Wolfson and the commission members, along with unflattering
caricatures.
Rachel Weintraub, director of product safety at the Consumer Federation of America, said
the Buckyballs campaign was simply an effort to shift the focus away from safety. ''The
essence here is safety, that children are being injured in horrendous ways," she said. "It is
classic industry strategy: changing the subject, attacking the messenger."
Mr. Zucker prefers to cast the issue as one of fairness. ''This is an issue about when can
consumers make a decision to buy an adult product?" he said. "It's a good fight. And it's a
fight l think we can win."
A version of this article appeared in prinl on August 17, 2012, on page 81 of the New Vorl< edition with the headline: Fateful
Attractions.
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Buckyballs vs The Consumer Products Safety
Commission
Joshua Swain & Kennedy I September 12, 2012
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'We are the first compay in 11 years who has said no to the U.S. Consumer Products Safety
Commission," says Craig Zucker, co-founder and CEO of Maxfeild and Oberton, creators of thE
popular magnetic desktoy Buckyballs. Citing roughly two dozen instances in which these
magnets were swallowed by children and teenagers, the Consumer Products Safety
Commission recently filled a lawsuit to recall and stop their sale_ Zucker, however, is not
backing down. 'We are not going to recall the product. .. We'll ftght it and we'll fight vigorously_"
"Our packaging has five warnings on it, we don't sell to stores that sell only children's products
and we don't sell to toy stores." Zucker explained. ''There is a level of personal responsibility
that comes into play when it comes to consumer product safety."
Zucker sat down with Reason TV's Kennedy to discuss the recall, the bullying tactics employed
by the CPSC, and how they are pushing back with their "Save Our Balls" campaign.
Shot by Jim Epstein and Anthony Fisher. Edited by Joshua Swain.
Home> Archives (Jul30. 2012) >CEO of Buckyballs: Save Our Balls
CEO of Buckyballs: Save Our Balls
July 30, 2012
Windows MediaBEGIN TRANSCRIPT
RUSH: We have on the phone the CEO of Buckyballs, a guy from New York named Craig Zucker. Mr. Zucker,
welcome to the program. Great to have you here.
ZUCKER: Thanks a lot, Rush.
RUSH: You have had your product banned?
ZUCKER: The Consumer Product Safety Commission has begun a process to
ban our product and magnets in general. It has not been banned yet.
RUSH: Okay, not yet. Not yet.
ZUCKER: Not yet.
RUSH: But you're on the way. What's the problem they've got, first with
magnets, and then we'll get to yours. What's their problem with magnets?
ZUCKER: I guess over the past couple years they've seen a couple of children
who have gotten their hands on an adult product, they've ingested the product.
Twelve children over the past three years have ingested our product out of
two-and-a-half million units sold, and the Consumer Product Safety
Commission believes that now all magnets should be taken off the market.
They should be banned and recalled due to these 12 incidents.
RUSH: Even refrigerator magnets that remind people to shut the door and stuff
like that?
ZUCKER: Not those kind. The products that they're looking at are more of the
products like Buckyballs and Buckycubes.
oee
:: .:

@
' .
RUSH: How big is a Buckyball?
--; BuckybaLLS
' f ~ = __ ,._::;_ ~ I
ZUCKER: They're about five millimeters. Each one's about the size of a BB and they come in packs of, you
know, 125 or 216.
RUSH: Right.
ZUCKER: They're marketed and sold as adult stress relievers, desk toys, things to build, create structures out
of, and have been sold to adults for nearly three years now. They've become probably one of the best-selling
adult gift product in the specialty gift industry the past three years.
RUSH: And because of a minuscule percentage of children misusing the product, now they want to ban whole
thing?
ZUCKER: The incident rate compared to other products is extremely low. You take products like balloons or five
gallon buckets or adult-size ATVs where hundreds of kids are sent to the hospital per year and there are multiple
deaths, and the Consumer Product Safety Commission, their remedy for that is warnings. But when it comes to
an adult product, marketed and sold to adults, they now say that warnings, which is the basis for most of the
regulation of what they do out there, warnings don't work anymore.
RUSH: Were you breast-fed, or did you drink formula?
ZUCKER: (laughing) I was given formula.
RUSH: Formula. Well, they might have found that out.
ZUCKER: (laughing) They might have.
RUSH: (laughing) You know, I was popping some popcorn over the weekend to watch the Olympics. And the
kind of popcorn, it's Orville Redenbacher and it comes with the coconut oil, the popcorn, all in one package in
two separate compartments. So I'm looking for an expiration date just for the fun of it, and I see on the back of
the package there is this warning that suggests popcorn Is dangerous to let kids eat because the kernels and the
partially popped kernels could end up choking them to death.
ZUCKER: Right.
RUSH: Now, I know this is a liability thing. They put it on there just to protect themselves in case some accident
happens, but how is anybody supposed to stay in business in this country? Accidents happen. You talk about
balloons, they tried to ban these things once because birds were eating. You know, they'd send balloons up and
they'd lose their buoyancy, come back, and birds would find the used balloons on the ground. I remember the
environmentalists were all upset about that. How are people like you supposed to stay in business, Craig?
CALLER: Look, I mean, I think product safety, it's a partnership between three different organizations. It's the
government, the CPSC, it's manufacturers/industry, and it's consumers. And all three have to do their part to
keep businesses and to keep children safe and to keep us in business. The government has to create rules and
regulations that are reasonable. Manufacturers like us have to follow those. We have to educate consumers.
But it is the responsibility of consumers as well to follow the regulations that we give them and to be educated on
the products that they're purchasing, especially when it comes to having children in the house.
RUSH: Well, you know, you refer to your product Buckyballs as a toy, but I remember as a kid, when I first
discovered magnets, they fascinated me.
ZUCKER: Right, listen, they've been around for thousands of years.
RUSH: Of course they're natural. You can't take magnetism out of physics.
ZUCKER: They're used in all sorts of applications. And, by the way, we don't say toy, we say adult desk toy. So
there's a context here when we talk about the product.
RUSH: Yeah.
ZUCKER: The product, if you just take a look, you know, warnings are on the packaging in five places. That's
five times more places than a pack of cigarettes. We have it on the instructions, the packaging in four different
places. You can't miss the warnings, you can't miss the display -
RUSH: Yeah, but see, the mistake you're making is you're not factoring the education system and how many
people can't read.
ZUCKER: Well, I don't know about that, but we created a lot of
awareness.
RUSH: Ah, but you're doing everything you have to do. Folks. the
reason I like this -well, I don't like it, but I mean it's illustrative of what
this government is doing to small businesses.
CALLER: It's hard. We built this company from scratch. We were a
two-man operation. We have exceeded every possible expectation
the US entrepreneur could have, and it does feel un-American. It does
feel that us being put out of business and what to tell my employees
and my sales reps and my retailers that count on this product to pay
their rent -- it's hard to know what to tell them. It doesn't feel like the
American way.
RUSH: How long did you say you've been in business?
ZUCKER: We've been in business three years.
RUSH: Three years. So you're just now revving up?
ZUCKER: We have been revved up since day one. I mean we've had a trajectory that's been just
astronomical. We showed up to our first trade show, and we were probably the most popular product there.
RUSH: No, no, no, you didn't build that, you didn't. Is your business on a road?
ZUCKER: I'll tell you what. We built it. Me and a partner, with $2,000 in an apartment in New York, built it, and
it's getting slowly disassembled by the Consumer Product Safety Commission piece by piece. It's death by a
thousand cuts is what they've done to us. They've gone to our retail chain. They've put out press releases even
before serving us. They've ignored our letters asking for how they determined the product was defective, and yet
still went to retailers and basically destroyed our wholesale channel within a week. They've put out false
information to the press, saying it's banned, although it hasn't been banned.
RUSH: What do you think is really motivating them, Craig?
ZUCKER: It's a good question, Rush. It could be politically driven. It's an election season.
RUSH: Yeah, but Buckyballs doesn't have a political identity. And I'm not gonna ask you who you donate to.
They could find out, but I mean there's no political identity to your product.
ZUCKER: Not at all.
RUSH: They're crucifying you.
ZUCKER: They are not crucifying us. They are destroying, they are putting a US business out of business as we
speak. And it's been frustrating. But I'll tell you one thing. The support of people online and people like your
listeners and people that are all over the Internet have given us -- we've done more sales through our website
than we could have possibly done through all the retailers that CPSC shut down last week in the course of four
days. The individual consumer online coming to rally to support us and the absurdity of what's happening at
CPSC and the support that we're given is gonna end up keeping this business thriving and alive, and we're
gonna fight this, and we're gonna fight CPSC and we're gonna go to court and we're gonna beat them in
litigation, and that's what we're kind of building up our business for to do right now.
RUSH: Well, it's great you're gonna do that. It's a shame you have
to.
ZUCKER: Can I give my website address?
RUSH: Sure, by all means. I think it's fabulous you've got so much
public support on this.
ZUCKER: Thanks. So there's two places. Getbuckyballs.com is
where we have all our products, but there's a great campaign at
saveourballs.net.
RUSH: Oh, I love saveourballs.net.
ZUCKER: There's a great video there that explains what's happening.
There's a lot of information, and, again, any support we can get helps,
Facebook, Twitter. Call CPSC. Call chairwoman Inez Tenenbaum. Let
your voice be heard.
RUSH: You know, Craig, I've looked at this, I could be wrong on this,
but I don't think so. I think you're being singled out, being sued the
way you are being sued, this particular legal tactic, I think it's only
been used once before in the past ten years.
ZUCKER: Twice, and last time was 11 years ago.
RUSH: Yeah, okay.
ZUCKER: The CPSC lost both of those cases in an administrative complaint in front of an administrative law
judge. So it's not a tactic they like. You know, 99.9% of companies when they're told to recall a product do it.
CPSC is not used to somebody saying "no" and they're not used to people standing up to their bullying and
intimidation tactics, and it's what we're doing. And so, again, any support we can get is great. Thanks for talking
about us today. Thanks for taking the call.
RUSH: Glad you called, yeah. All the best. God bless. I'm ecstatic to hear you've got a such a loud and
boisterous public response to what's happening to you.
ZUCKER: Oh, there's probably over a hundred thousand comments on all the blogs and all the articles out
there. And all of them are in support of that the company's doing everything right and that the Consumer Product
Safety Commission has overstepped their reach in what they're doing.
RUSH: That's who they are. That is exactly it.
ZUCKER: It seems to be the case.
RUSH: Craig, thanks for the call, and best of luck.
ZUCKER: Thank you.
RUSH: Save our balls. And we'll be back after this.
BREAK TRANSCRIPT
RUSH: It was not the birds. It was turtles that they tried to ban balloons because of. Balloons would end up -
used balloons -- they never tried to ban condoms for this reason. I never understood the difference why, but they
banned balloons 'cause these turtles, both land turtles and sea turtles, were ingesting the balloons that had no
air in 'em. Turtles come up there and eat the balloon on the ground, and that's it. They tried to ban balloons. But
never condoms. And what you heard happening to Buckyballs. It sounds like they're being singled out, but
they're not. There are a lot of small businesses, the same technique is not being used, but this administration is
at war with small business. And they'll find any pretext they can.
Buckyballs is a $50 million business and it is growing. It's the United States government trying to drive them out
of business. Not find a way to work with them on the safety side, but put them out of business. It's uncalled for.
There's no excuse. There's no rational reason for it, and Mr. Zucker could not explain why he was being
targeted. So I mean you've got an attempted ban of a product and the shutting down of a business. They're
doing this in different ways to the oil industry. They're not succeeding, but what do you think the oil moratorium's
all about, the drilling moratorium? The fascinating thing about that, there Is a boom economy happening in the
Dakotas, and it's like it's in the Twilight Zone.
We talk about it here, but nobody knows about it, it never gets
reported on. But there is an absolute economic boom going on
because of new discoveries and technologies in getting oil out of the
ground. They happen to be ways that the left doesn't approve of.
And they've concocted a bunch of lies about what happens, say, to
groundwater and other such things because of this method of
extracting oil from the ground, and it's all lies, it's all trumped up. But
this boom in the Dakotas is so rapid that the biggest problem they have is lack of housing for the people who are
moving there to find jobs in the oil business. They don't have enough places for people to live. So the next
phase is gonna be a bunch of developers going in there and rapidly building apartment complexes,
condominiums, houses, this kind of thing, 'cause the oil business in the Dakotas is gonna have deep roots. The
left is targeting it, trying to make it harder and harder for these people with more and more regulation to profitably
extract the oil. It's cleaner.
Here we are in the midst of one of the most dismal economies since the Great Depression, and what ought to be
happening is that everybody ought to be going to the Dakotas and saying, "Look, here is how we escape this.
Here's how they're doing it. This is how it's done. You want to see economic growth, here it is. It's happening
right here in the country." Instead, everybody's doing everything they can to keep it a secret. And beyond even
keeping it a secret, they're trying to treat it as though it's some odd fluke thing that is made up of a bunch of
weirdos. There's a Wall Street Journal story today. They can't build homes fast enough in North Dakota.
Wouldn't you like to see that headline in a lot of states? It's mind-boggling, folks. There is a glorious economic
boom and recovery happening in North Dakota and it remains one of the best-kept secrets in all of the world.
BREAK TRANSCRIPT
RUSH: North Dakota, 2002. This is in Williston, North Dakota. In 2002, rent on a two-bedroom apartment might
have been $340 a month, but now rent on two-bedroom apartments in Williston, North Dakota, is between $1755
and $2700 a month. Just supply and demand. There isn't enough housing to accommodate people working in
bringing about this boom.
END TRANSCRIPT
Related Unks
CBS: Buckyballs CEO on CPSC Complaint: "How Can This Happen in America?"
Wall Street Journal: North Dakota Oil Boom Puts Stress on State Courts
EXHIBIT I
EXAMPLES OF M&O PRESS RELEASES
Budcyballs I Buckywbes I The Amazing Magnetic Oeskta,' Yoo Can't Put Down

CUSTOMER SERVICE
1t338-WE-BUCKY

I Get ...._Ifill
r;;;:m:rn
You've heard about our ongoing battle with the CPSC.
l'hanJ...s fnr ynur ..;upptlrt \\ c (L!IIlp:ugn to Sa' L' Our BaUs!
The lift>> has ohuulll:!. The: 1 JClU has 'upportcd u
And uur CEO i tcllmgthc whole Buckm' ahuul JU.1 huw s<riously we l:lkc ,.,let)!.
K.-..,. up the fight woth u. Comment .'fld tl! <tl ! wrilc '" cumment un hlogs. tell your friends: complutn loudly. nr just to u.1. .u rt
('ubcs Bars C'hromalit:s Books
Letter frotn the Chief Bucky to our
Supporters, our Critics, and even the C PSC:
Some things about us that you might want to know
If you've he ., a Buckyballs supporter, ncr lhc pusr li:,. week. we want rn tart uffby lhnkong yuu tor hlugging. enmmo:ntong.
TW'c:long. Liking. and of course. uur products Because 0 f you, we're able to stay in business and
keep fighting an important fight.
If ynu'rc a critic uf our produc15 .and our sttf .. -ry pmgrum. we rcspcocr )"OUr sincerity ouxl t.:ommtlmcnf. hut hchcvc you may not the whole:
l"tory.
For ull uf yuu - fricnd5 and crilico alike. I want ro shore sume nf the h15rucy and \'ogor of our safely pmgram. alung lllh an uuthnc llf huw ,...,
ha\"t wllh the: Cun!lumcr Pruduct Safety Cotnm1ssmn l( 'PSt") mcr the rhn.-c years WI! ha\e in busmcn
And I want to make a clear declaration that we continue to be very concerned about
the ways in which our adult products have been misused and we have gone'" cxlrJordonul)! lengths'"
that through w:un1ngll. 1.-ducoation. luhcling. rctatlcr rl!"mctJuns and cuntinUtiUS cuupL.-ration with the CPSt - nt;ht up unul
liM'BIIy rho moment lh<y turnt:d on us. More ubuutlhur shunly For ... onlilrtnatiun ahuut uur comp.1ny and our safety prugram as of dc:\clupcd
UY\!f thl! J13SI three )'l.'llr!J
2009- 2010
A friend and I <tuned Mufi<ld and Ohcrtun on an apnrtm.:nl in 'lew Vurl< Cory wnh an onvcsan.:nt of\1,tll"l We hnught on>!fnctic
rh""' hund racked them on ja!ll. and hr:mdcd them BuckyhallsJi.,, 115 one of uur !il\onlc shupcs to make wuh !hem was I he geodeSic
dome. We made some Vuutub.- \Ide"' and 1artcd '"'lling them on the web. We suld Budcyhalls'k <m eucdy lhrec "'"hitc'S, nllufwhoch
sell primanly adult pruduc1<, from March, 1009 untol October, !OOIJ.
In Ocruh<r. 2(MI'l we <tlrted wholc.ahng '" hriek and munarrctaolcr.. The product was instantly a top-seller in
high-end gift shops, bookstores, stationary stores, museum shops, and hundreds of
other independent specialty gift stores.
Buckyhalls were imh>lly labeled I J+ hc"t:ausc rhc t'unsum"' l'ruducr Snfc1y lmpm,cntenl 1h1 tCrSIAI. which \1'3.< puss-'ll un August 14.
:!OOH. defined 11 .:htldrcn':o. rmduct .1s nn..: inh:ndcd ur d!!signL-d pnmarily f,,, a ch1ld and younsl!r. That was :1gc gnk.lc at
S;lli.:ty
http://www .getbudyballs.mmjletter-from-ceo/[10/18/2012 1:59:45 PM]
BuckybaUs 1 Buckyrubes 1 The Amazing Magnetic Desktay You Can't Put Down
tame,
Our products were never intended, designed or marketed for children; so we
labeled them for ages 13+ to make that clear.
Then the rules changed. In -\ugu ... F903-UH !>.:came n mondutury tuy >tnndurd and redefined a chld '"
hcmg untl-r 14 [.,.tn though our products \\"Crc not ch11drcn's toys und the-refore nut suhJ'-"Ct lo stam1an1. we r.:hanKcr.l
yrdms rrum 13-+- '" 14 In addition, we changed our warning to say "Keep Away From All
Children", to avoid any possible confusion.
In March we 1.0rked with CPS(' to 1nluntunly recall all prullULIS ""h padugmg that s.1id 1.1+ und n.placc it ith uur updated and
enhanced wamang:t.
Ha\' ing compl1cd wnh change 1n the nak"S, we tht.!n JcCillcd tn gu "''ell thilt and crC"atcd n cmnprchcns1\'C .'iatCty program to
ensure nllLk>hIIJ!' "'mid..., kept""' ufthtldrcns hands. That program, which was approved by CPSC
two months later, in May, 2010, included:
Changmg tht: \Ooarnms on new pnuluctto say "K<L'P A1y Frum All
Children" and >ddtng languuge to explain the exact ha1.anl ut '" alluwmg
The warning was developed with
the help of former CPSC Compliance and
Human Factors staff. and i moo.aod after in
ASTM f913 titr mrc L'll11h magnets allowed to !>.: suld to childrL'I1 as pan
uf a huhhy, craft ur kit.
, ....
... w ..... '.
Addmg thrco wnmings to the pack11ging and carrying case, titr u ll>tol of five warnings On the
packaging and instructions.
Dcv\!loping our g ... tRSA) h> ..:nsurc that t)Ur pmducts 'A<I.'Tt: nut sold in sfltrLs rhat sdl chUdt\!n's
rrudw:.t:l and thai, in mcn:hlindisc ston:s with lot" of ch1hln.'11'" pmdlu:ts. W\.'rc only suld in u "llh
uther products intended for adult. During this pcnod. '"we put the RSA into ctfcct. We removed from OUr
dealer list over 600 stores that did not meet the criteria ufthc new prugrum
Ensuring that every new account goes through a compliance check ur tills uur and
stgns a Seller o\grccntcnr "o thnt we can tfthcy'rc on lli"J'mprintc plctcc fur our producb to be Th:
RSA. for thoSe: rctath:rs rcqmr\!d to ha\'C m\b1 be n:suhmiucd and rccva\u.ucd CVf."f)' Y'-,.r nnll kept on fih:
Sending new signage "''h the updated wammss tor use wuh retail displays.
Including a copy of our which tares the retail In
C\1:1)' -;hapmcnt tn n:tallcr!l
2011
0\ cr the nc\t I X months, our busmcse; took off and we n.:"" .;uch Buckycut%!sJ: and ( "hnmmta..:s
rrc"is raved ahuut uur rrnducts fc.u ow,,rkplucc fun and relief We ad\'l."ftlscd and were n\'icw..:d on wuh ....
\Vc showed our pnxhu:ts at all ufi ndustry git\ "hu\o\-s nmund cuuntry. W.: selling to mujor chains like Mac)''s. llrookstnnc. ond
Urhnn ourfittL'" And thousands of independent retailers were happy to find a product that
could be sold by the millions to adults. We WL'f'D'I 'nld '"'l<tres that suld ehildr'D's rroducts ""lusl\d)' and
the busm..:s!( growing wurulcrfully Without c\'Cr being marketed to ch1h.ln:n. \Vlul..: litC was huckin' guud. safety ":as still our fl)J1
pnnnl)
In September, 20 we v.Totc to all ,,fuur rctaih.-rs reminding them. as we ..:ntl!rcd the holiday season. they must not sell tn
ch1!dn:n under 14 l)f to oulults buying uur products to gi,c to a child 14. \Vc moill!d the lcncr a lung \A'ith cury of uur
Notices to our than 4.000 n . 1ailcrs.
In November, 20 ll 'we JUinld with crsc which issued a jOint press and \'idt.."\) news rcinf4lrting thl! Importance llf
mr pmUucts uut uf hant.l"i nfchiiJn..'n and rdnfurcing the potential uf m1susc. I Wl!nt to Bcthcsdu amd
met with CPSC Chairwoman Inez Tenenbaum. She commended our safety
http:/fwww.getbuckybaOs.comfletter-from-ceo/[lO/lB/2012 1:59:45 PM)
Buckyballs 1 Buckycubes 1 The Amazing Magnetic Desktoy You Can't Put Down
program and we tilmed the video news release together.
e 2012
In March, 20 12, d\."'\'ci<lp.:c..l our ' \ L'!lh' und created a \ itk(l to air on it and on nur main
lllc Slit IS promoted on uur home ral!C in thn:c difTcn:nt pluct.."'!( and cn:ah .. -d to mise Knd l.'du.::.uc purcnts . .. ducator$,
rctailcn. a ad dm.1ors un the nski ofkning h1gh-rowcrcd mogncts g..:t toto the hands of children. ()ur . and L..:.ul
s..!. puhhshcd tbr the public to
Over 60,000 people have visited that site in under 5 months.
That munth we also created 11dd.itiunnl rct3il signagc hJ funhcr C\plain why
BuckybuiiI\J und Buckycub.:sl!. wen: not fur children. These wore sent to every
n:tool<r .elllnH our JlfOOUCI> "'ith a r.1ucst thot it h< dipjll:d onto the in-<turc dhplay.
A cupy of our Responsible Sclh:r Nutlt:t:s was ago in with 1his nuuling.
In Apri (, 20 12, at our request. we mdi\'idually with C'ummiS<I<oners
Nord and Northup 1.Ch.:linmm Tenenh;.uun 10 wi1h us) and wnh staff at
th&tr Wt cuuld educate lh!..'ll1 about nur C1pantl&:d snt"t:ty rrogrnm. nlw
C"'(pn:s!led conc..:m ttult ..;ume other mauufucrurcrs were Clmtinuing to age gratk anJ
m.uke'f proJuctli to ours inappropriately. We tn briny to the CPSC's
uttcnttun some !Cuch a:s Ama7.on.com. who continued tu 1ist
mugnds 10 the ufthdr ur in sturcs.
The Commissioners and staff had some
suggestions, but overall and once again,
commended our program and our commitment to
safety.
A(tlng on suggestion.\ from crsc and at nur \lWn mitiati\'c.
over the next 60 days, we:
Fonned a medical advisory grouporrourrhysicians
-tp!.."C13hlmg in pediatric anll nu:du.:inc am! Togl.'thcr we
de\ eloped a P.t ,)u , .. \.HW..!ltfl!..,;w_l:'l! fur n'k!dical
to hdp ensure lhcy would rccugni1.c and know hnv.. tu trcal
mu.gnct
iMPORTANT
SAFETY
INFORMATION
Keep Buckybds ... Buckycuba-
Awar From AI Cbildnft - WHY?
../ Buckybals. & lludr,tubes" ..
for Dills Ottt ..s must bt
kePI ""'t tram .. cNidrlll.
../I used altp. tonp 01 noA
fM*y. magnets un
fJidl Oilier ..s IIIXidel'llatt
be SMiawec1
Hin:d. company that facilitates the creation ofindumy aSS<>eiations and brought our competitors together
to create with us The Coalition for Magnet Safety. Our mis.ion statement. "Tu piiiiL'Ct the ruhhc
through rcsp.msiblc Iing. rmmotiun. d1strihution. and sales tlf p<wcrcd. rMc ..:ur1h maHncts mt..:ndcd fur adult usc"
Petitioned ASTM, the independent testing standards body, to develop a
VOlUntary Standard fur the and murk<ting ofprnduc" hkc Ollf!l- nne hy all Cnnlitiun m.-mhcr.; ugrecd
to ahidc whl.'n i!l.sua:d. i.l.!.r WitS unanimuusly arpro\cd hy A!\'TM and cum:ntly is wuJcr development hy an ASTM
Suhcummmcc.
The Sudden Attack
Suddenly. un J U} y J 0, 20 J 2, all.:r years of cJ'I'rtivc wmk with l'I'SC and with u ,..fcty program appm\'cd ;ond ;upJ1011ed hy
the CPS< Office uf Lomplianc\! issued a prchmmury ti&!tcrminaliun that nur J'roduct!i ttn: JcfcciJ\'c and th:n wumings and
cducotoun '"uur fcty prngrnm do not won.. It was, in practical tenns, a declaration that they were
going to shut us down.
on July 12, 2012, \\.C __r.\.:SP-1-'JJ.d<:_d fonnally to the preliminary detennination letter
l''(J"n!SCOing 1JUr Stmns disugrcemcnl, ruinfing I)Uf all of the Safcry ffi'-'aSUI'CS that \\o'C hO\'C taken in C'M1pl!r3t10D With LrS(.' i.lO.J the d!.!Uf
<\ldcncc ufnur cummllm.'llt to kecpinK uurpmduct out ufchildrcn' honds. CPSC never responded to this letter.
Instead. <.'PSC "taff began contact our major rt..-tililcrs. c'C.prcsstng concern about the safety uf mar pruduct:f and .. n .. "({u .. -sring'' I hat
th..:sc rctatlcr. lmrrh:diatcly <ttop scll1ng them. The ..:fti.."Ct w:1s pn."tJictablc. as the rctuilers y1cldcd tu rhc CPS(''" mllmu.Jatmn tactics.
http:lfwww.getbuckyballs.com/letter-from-ceo/[10/18/2012 1:59:45 PM)
Buckyb3Us 1 Buckycubes I The Amazing Magnetic Oesktoy You Can't Put Down
Although we dosagn:c that any ufuur pruducrs arc uefccti\'O, IIn July 24th at 4 pm, we submitted a
comprehensive proposed voluntary Corrective Action Plan'" rho CPSC tu funhcr <llhancc our
uln.-ady unprecedented saf.:ty program. The pbw indudcs a chih.l-rcsistam canying poss1bty a bincring agent. enhancct.l '-'"Hmmgs.
udr.Jitiunul n:tail cducatmn antt an increased puhlic a"'arcncss campaign -- au at our uwn CPSC did not
bother to respond to this proposal, either.
on July 25th, the very next day, at I lam, CPSC's Executive Director called our
lawyer to tell him CPSC had issued an administrative complaint against us. By
I pm, we had read about it on USA Today's website. lr appi:ars that th< Corr.llle t\cnun Plun
r..:qucs:tcd fTum us wos nc\cr scriuusly cuns1dcrcd and it's poss1hl-.: thnt the CommissmnL'TS d1dn't c\cn know \U! had It to the
l'f'SC :daff. CPSC immediately issued a press rclca!ic and begun making statements to the nauona.l n1cdu1, !fume of \\h1ch were Inaccurate
,u and that went t..-yund the allcgacinn!4 in th.: law!'iuit.
All of this happened before we were even legally served with the lawsuit.
Three years of building a business selling extremely popular products to adults was
torn down by the CPSC in just a week, unu wrthnur rhcirc\'CI ralkmg wrrh us. or rcpunumg in wrumg to
anything we sent them on funhc:r lo work coorx:rativdy.
on August 8th, CPSC made public a staff briefing package recommending that the
Commission ban ALL high-powered magnets that nrc " ... intL-ntlcu '" by the n>anufoctun:r
pnmunly as a mont"uhltlvc: tr constructton desk toy for general entertainment. 'iuch as J'IUZ7Jc wurking. mental ,;timulatJOn, ur
stress rcltcf" briefing rackogc D Nutict: uf Pnt('O"iC:d Ruh:making to bun uur rroduct;-. uml Stmil:tr products
Going Forward - Why We Are Fighting
If the Commission gets its way, in the future, a responsible adult, even one with no
children, will be unable to purchase products like Buckyballs@ or Buckycubes,
no matter how they're labeled, packaged, or marketed.
,uc.: li ght Ill).! the.: CPS( :JLll ll ll bccali '>C
nUult "roducts hkc ours.
V..' c ,Ire li ghtmg thl' (_ PS( :h.'llllll QCGill:-oC.: wchu,chccnlrotmycu hya gmcmn>cnr urgunr7.utrunth.11'""thod
ftom bcinK an ully. helpful in ensuring our rruducls would he m.;trkl1C'd corn:ctly, to being an t:nmly trymg to shul us down_
\V c an: fi!!ht ing the c PSC act.iun bt.:Glll:..l' we bcli-vc thLj arc \\l<Jng. Our strung. dcrnunstratcu LUITlmrtmcnr "' "'t<:ty
i" un\lo'a\cring and our cnmprehcnsi\'1! pn,gram is unmatched an tnttustry. Ow products art: ntH defective We tt:cl what 1s being dtmc to
Ui - ;md 1u th.: mlllinn!'O of consumers whn safely enjoy our - as hnth wnmg and unfair and we w1ll fightlhts tnJU'-itlcc tbr as lung us we
can.
This is whu we arc und wh..:rc we stand. If yuu suppun u!l. we urt: if you do not, nc yuu <JI kdst undcro,;ttand us hcncr
Cr:11g ZuckLT
CuFoundcr. CEO
Ma,ficld nnd Obcnon
http:ffwww.getbuckyballs.com/letter-from-ceo/[10/18/2012 1:59:45 PM]
Buckyballs I Buckycubes I The Amazing Magnetic Desktoy You can't Put Down

!Get updalet and dealali'i
Halb
You've heard about our ongoing battle with the CPSC.
Due to their baseless and relentless legal badgering,
\\l'
1
H: sadly dt."dd(.'d tu produrtion of balls and
We still have a few thousand sets in stock, but once we sell through those. they're gone tor good.
_\I,' .I fast. r dl your friends. .t.d the word.
Books
Buckyballs Manufacturer Calls
Consumer Product Safety Commission Complaint
"Arbitrary, Capricious and \Vholly \Vithout .\lcrit"
S.tli:ty
1 '1\ t lk "- ll
Maxfield&. Oh.:non (M&.O), the rr10nufactwcrs of0uckyhalls111ond Duckycub<sll. fonnally re>'j!Ondcd today to the Consumer Product Safely Commission's {CI'SC)
admini51ranvc complaint, tmnong itarbotnlly, capriciou and wholly without mmt. The CPSC's lawsuit ,.ks, in ""sene<, tu shut down M&.O by n:quinn11 11 tu halt sales
nf its primary products, Duckyballsli 3lld Duckycubclo'-. and to r<call all cxinong products in cnnsumen' hands. No cumpany could withstand thaltyp< of ac1ion, und
.,.pocially nut a small one like M&O
In il5 respoo"' tu oh< Complaint, M&.O made the following points:
M&O denies all allcl!aliuns that its products an: defccrie or create any unreasonable risk In fact, we have gone uut of uur way to minimize any risk throul$h our
CPSC -reviL'Wed sati:ty prognom.
There is no applicable rule, regulation, standard or bon \\ilh which M&O has fooled to comply. CPSC seems iol<nl on creating a new rule to han uur product and put
us out of business.
The complaint is arbiii"IU)' and capricious because it is not based on any reasonable assessmmt of risk and is clearly inconsistent with th< CPSC's own mondatory
standards. There are so many truly rikY products that the CPSC allows to be: marketed with wamtng lah<ls that w are at a loss 111 understand bow lh'Y IISses
relariv< risk amung the product they overs<e.
The CPSC Itself contributed to th< issue by failing to take action against online retailers, as requested repoalcdly by M&.O, to force them to c<DS< offering uurs and
similar products for sale: lour usc by children under 14. After uur direct cffons with these retailers were rohuffed, w app<alcd to the CPSC to take action and they
dod ool.
The CPSC staff did not fairly and consider. and lh< Cummissionr.o may not have h<en made fully aware of, a cumprehensiv volunnuy correctiv< action
plan which Mutidd and Obcttoa <ubmin<d, al the request of the CPSC staff, the day immediatdy preceding the CPSC stall's tihng of its Complaint. Not only that,
hut the CPSC staff subsequently included clements of Maxfield and Obenon's voluntary corrective action plan in the CPSC stall's Notice ufProposcd Rulcmaking
fur a Safety Standard fur Magnet Sots, dated Augu." K. 2012.
In summary, M&O believes the CPSC's ru.<h to judgment is hoth unfair and unprecedented and Maxfield && Obcnoa will mount a vigorous d<fen,..
"We arc more emboldened than <ver In continu fighting this egregious action, and today have pmted nearly 2,500 comments related to this proposed ban," said Cnoig
Zucker, Founder and CEO ofMuficld and Ohenuo. "We ha\e collected some of the thousands ofconun<:nts that arc being posted uolinc and sent to us, as well as many
that were sent directly lo lh< CPSC. We have posted th<m om filtered and you .,,II nnte lhatalmon 99% of the,. are in favor of our efforts and against taking away this
product that is marketed to and cnjuy<d by millions of adults."
Buckyballs<i and Buckycubcsnt are the number one: selling hmnd nam<s in high-powered magnets rL'Ccnlly called America's "fav< desk accessory" hy the Washington
Post (July 13. 2012), and named "th< ncX1 big thing in cuhi<:l< tidg<riog" by N<w Yorlc magazine (July 16-23. 2012). For more information visll SaveOurBalls and
GctBuckyballs.com Ot visll us on Facebook or Twiner.
hiiiJItfaccbgok egm!buckybal!s
hiiiJVJWjncr com(&t:lbw:kyballs
htqrflwww vcbuckyhgll5
hiiiJUwww at:lbuckyl!alls cgQlfcw:-rc"S!!Qp:;c
CONTAC'r: Andrew Frank (212-935 0210)
SOURCE Muticld and Obcrtoo
http:/ twww .getbuckyballs.com/cpsc-complalntarbltrary-capridous-withoutmerit/[ 12/4/2012 11: 10:43 AM]
EXHIBIT J
MR. ZUCKER'S DECLARATION IN The
Estate of Buckminster Fuller v. Maxfield &
Oberton Holdings, LLC
2
3
4
5
6
7
8
9
10
11
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14
15
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17
18
19
20
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24
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Case5:12-cv-02570-LHK Document13-1 Filed07/13/12 Pagel of 11
SEDGWICK LLP
JAMES J.S. HOLMES Bar No. 126779
james.holmes@sedgwicklaw.com
MATTHEW FISCHER BarNo. 191451

JIA-MING SHANG Bar No. 233326
jiaming.shang@sedgwicklaw.com
JASON M. JOYAL Bar No. 251168
jason.joyal@sedgwicklaw.com
80 1 South Figueroa Street, 19th Floor
Los Angeles, California 90017-5556
Telephone: (213) 426-6900
Facsimile: (213) 426-6921
Attorneys for Defendant
MAXFIELD & OBERTON HOLDINGS, LLC
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA- SAN JOSE DIVISION
THE EST ATE OF BUCKMINSTER
FULLER,
Plaintiff,
v.
MAXFIELD & OBERTON
HOLDINGS, LLC, A Delaware Limited
Liability Company,
Defendants.
CASE NO.: CV 12-2570 LHK (HRL)
DECLARATION OF CRAIG ZUCKER
IN SUPPORT OF MAXFIELD &
OBERTON HOLDINGS, LLC'S
REQUEST FOR JUDICIAL NOTICE
[Filed concurrently with Notice of Motion
and Motion to Dismiss Plaintiff's
Complaint; Request for Judicial Notice;
and [Proposed] Order]
Date:
Time:
Dept.:
August 23, 2012
1:30 p.m.
8
Complaint filed: May 18, 2012
-1-
LN1411027vl
2
3
Case5:12-cv-02570-LHK Document13-1 Filed07/13/12 Page2 of 11
I, Craig Zucker, declare as follows:
I. I am the Ch.iefExecutive Officer of Maxfield & Oberton Holdings, LLC
4 ("MOH"), a defendant in the above-entitled matter. I make this declaration in support of MOH's
5 Request for Judicial Notice, which is filed concurrently with MOH's Motion to Dismiss the
6 Complaint of The Estate of Buckminster Fuller ("Plaintiff'). Unless otherwise stated, I have
7 personal knowledge of the facts set forth herein and if called as a witness could competently
8 testify thereto.
9
2. Attached hereto as Exhibit 1 is a true and correct copy of the "Fun Fact" page of
10 the "Big Book of Bucky Vol. 1 ,"as referenced in Paragraph 18 of Plaintiff's complaint.
11 3. Attached hereto as Exhibit 2 is a true and correct copy of the October 24, 2011
12 non-exclusive license granted to MOH by Plaintiff for the permission to use Buckminster
13 Fuller's name, likeness, words and images on the packaging ofMOH's limited edition
14 commemorative set of approximately 1,000 units ofMOH's Buckyballs product, as referenced
15 in Paragraph 12 ofPlaintiff'scomplaint. The agreement reflects my signature on behalf of
16 MOH.
17
4. Attached hereto as Exhibit 3 are true and correct copies of the Buckminster Fulle
18 commemorative edition Buckyballs product packaging, as referenced in Paragraph 12 of
19 Plaintiffs complaint.
20
21
22
23
24
25
26
27
28
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct and that this was executed on the 13th day of July, 2012 at
A+\ a. o-\-a.
-2-
EXHIBIT 1
BUCKYBALLS-ZUCKER
F U N
Buckybals were named for Buckminster Fuller.
Who was he? The Internet has all of the anS\WrS ..
but we're happy to share a few. He invented the
FACT
geodesic dome (a sphere made of triangles-you'H
leam how to ma1<e it in the pages ahead), coined the
term Space Ship Earth" (referring to the fact that
we're al in this togettw, hurtling through space In a
group), and once gave a lecture for 36 straight hours.
He was smart. He was aazy. He was fun.
Ren'ind you or anything?

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t a : t
Ewry journey begins with a single step.
You've already taken that first step it
'\
was the basic stuff you just learned. Time
to nJO, jump. and polevault Bueky-stylel
Brace yourself for auto-assembling fonns,
shapes that bend and twrst. and more.
Master this section and you'H appear more
attractive to the opposile sex. you'll be
more likely to get a raise at wor1<. and more
lil<able an around. Or so we'd lil<e to think ..
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EXHIBIT 2
BUCKYBALLS-ZUCKER
Case5.12-cV-02570'-LAK UOcument13"TFIIed0171371z Page6 ofll
The Estate of R, Buckminster Fuller
P.O BOX 3241, SANTA BARBARA. CA 93130 Pit: {lOS) S63-0914 FL't: (805)456-291.2 F.mail: info@bucl.minsrerruUcr net
October 24, 20 II
MaKfield & Oberton Holdings, LLC
PO Box 528
New York, NY 10014
Letter of Agreement
The Estate of R. Buck minster Fuller hereby grants to Maxfield and Oberton Holdings, LLC
its one-time non-exclusive permission to use Buckminstcr Fuller's name, likeness, words and
images on the packaging of their limited edition commemorative set of approximately I 000
unit! of their "Buckyball" product, and on their brochure related to the product; the profits
of which sale will go to The Buckmlnster Fuller Institute. Maxfield and Oberton Holdings,
LLC shall also have: the limited license to usc: the name, likeness, words and images in connection
with marketing and promotion ofthis commemorative edition set.
Maxfield & Oberton Holdings, LLC will ensure that the following credit information is
clearly and visibly printed on the packaging of the "Buckyball:"
"Buckminster FuJier's name, likeness and words used with permission of The
Estate of R. Buckrninster Fuller."
For the brochure, Maxfield Oberton Holdings, LLC will include following credit in a
clearly visible place:
"Buckminster Fuller's name, likeness, words, images and the trademark
"Dymaxion'' used by permission of The Estate: of R. Buck minster Fuller.''
Fuller Projection Map design & SPACESHIP EARTH are trademarks of the
Buckminster f'uller Institute.
This limited license to use the name and likeness of Buckminsler Fuller sokly in connection
with the commemorative edition of Buck.yballs is without prejudice to the of the Estate
of Buclcminstcr Fuller to enforce its rights of publicity under C'.alifornia Civil Code 3344.1
and similar statutes in the United States and abroad.
This agreement will be in effect upon receipt of a signed copy of this letter. The undersigned
understand and agree to all of the above conditions .
.,.,.,- ,.- .

John Ferry
For The Estate of R. Buckminster Fuller
Agreed to and signed by:
For
/
EXHIBIT 3
BUCKYBALLS-ZUCKER
Case5:12-cv-02570-LHK Document13-1 Filed07/13/12 PageS of 11
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EXHIBITK
PLEADINGS AND DOCKET ENTRIES IN
United States v. Shelton Wholesale, Inc., 34 F.
Supp. 2d 1147 (W.D. Mo. 1999)
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
UNITED STATES OF AMERICA,
)
)
)
)
)
)
)
)
)
)
)
}
)
Plaintiff,
v. No. 96-6131-CV-SJ-1
SHELTON WHOLESALE, INC., a
Missouri Corporation, d/b/a
Shelton Fireworks, and POLARIS
FIREWORKS, INC., a Missouri
Corporation,
Defendants.
MOTION TO AMEND COMPLAINT
Plaintiff, the United States of America, hereby moves,
pursuant to Rule 15, Fed. R. Civ. P., for an order permitting it
to amend its complaint in order to add Gregory P. Shelton as an
additional defendant. A copy of the Government's Second Amended
Complaint is attached to this motion. In support of this motion,
the Government is filing the accompanying Memorandum in Support
of Motion to Amend Complaint.
Respectfully submitted,
FRANK W. HUNGER
Assistant Attorney General
Civil Division
STEPHEN L. HILL, JR.
United States Attorney
ALLEEN S. VAN BEBBER
Deputy United States Attorney
Missouri Bar No. 41460
1201 Walnut Street
Suite 2300
Kansas City, Missouri 64106-2149
(816) 426-3130

OF COUNSEL:
ERIC A. RUBEL
General Counsel
ALAN SHAKIN
Assistant
General Counsel
MELISSA V. HAMPSHIRE
Attorney
U.S. Consumer Product
Safety Commission
Bethesda, MD 20814
(301) 504-0980
Attorneys for Plaintiff
Dated: February 19, 1997
JAY I. BRATT
ANTHONY SCOTT BARKOW
Attorneys
U.S. Department of Justice
Office of Consumer Litigation
P.O. Box 386
Washington, D.C. 20044
(202) 616-0509
WESTERN DIVISION
Plaintiff,
v.
Corporation,
Defendants.
ORDER
No. 96-6131-CV-SJ-1
Before the Court is the Government's Motion to Amend the
Complaint. The Court having considered the parties' submissions,
it is hereby ORDERED that said motion is GRANTED and that
plaintiff is given leave to file the Second Amended Complaint.
Dated: February 1 1997
Honorable Howard F. Sachs
U.S. District Judge
I, Anthony Scott Barkow, hereby certify that copies of
Plaintiff's Motion for Leave to File Second Amended Complaint and
Plaintiff's proposed Order were served upon counsel for
defendants, via Federal Express, on this 7 ~ h day of
February, 1997, addressed to:
David W. Whipple
Whipple Law Firm, P.C.
818 Grant Avenue
Kansas City, Missouri 64106
Attorney for Defendants
Anthony Scott Barkow
Trial Attorney
P.O. Box 386
(202) 616-0509
,
WESTERN DIVISION
Plaintiff,
v.
Corporation,
Defendants.
No. 96-6131-CV-SJ-1
MEMORANDUM IN SUPPORT OF MOTION TO AMEND COMPLAINT
BACKGROUND
On October 2, 1996, Plaintiff filed a Complaint for Civil
Penalties and Injunction against the above-captioned defendants,
alleging that the defendants had violated the Federal Hazardous
Substances Act (the "Act"), 15 U.S.C. 1261 et seq. On
November 7, 1996, Plaintiff filed a First Amended Complaint for
Civil Penalties and Injunction, which dropped some of the
violations alleged in the original Complaint and corrected one
typographical error in the original Complaint. Defendants filed
an Answer on November 29, 1996.
On December 11, 1996, the parties agreed that each side
would send the other copies of the initial disclosures required
by Rule 26(a). After a review of the initial disclosures that
the defendants provided, the Government has concluded that the
defendant corporations are closely held and run entirely by
Mr. Shelton. According to those documents, Shelton, Inc.,
f/
employs only Mr. Shelton, a secretary, and three employees, and
Polaris, Inc., has no current employees.
Disclosures Pursuant to Rule 26, at 1-2.
See Defendants' Initial
In addition, all
contacts between the Consumer Product Safety Commission ("CPSC"),
the agency charged with enforcing the Act, and the defendant
corporations have always been through Mr. Shelton.
No discovery has occurred in the case beyond the exchange of
the aforementioned initial disclosures.
ARGUMENT
Rule 15(a), Fed. R. Civ. P., provides that "leave [to amend
a pleading] shall be freely given when justice so requires."
Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182
( 1962) ("this mandate is to be heeded"); Gamma-10 Plastics, Inc.,
v. American President Lines. Ltd., 21 F.3d 1244, 1255 (8th Cir.
1994). Decisions in this circuit have made clear that leave to
amend may be denied only when the plaintiff does not have at
least colorable grounds for relief, or if the plaintiff is guilty
of undue delay, bad faith, or dilatory motive, or if permission
to amend would unduly prejudice the opposing party. Williams v.
Little Rock Municipal Water Works, 21 F.3d 218, 225 (8th Cir.
1994). None of the factors applies here. Indeed, there is no
question of bad faith, undue delay, or dilatory motive, and no
basis for concluding that plaintiff does not have colorable
grounds for the relief requested.
In addition, the defendants will suffer no prejudice if the
Court grants the amendment. Discovery has only just begun. The
2
,
defendants have not sought to depose any witnesses yet, and the
new complaint will thus not cause them to seek to redepose
anyone. Moreover, Mr. Shelton is the real party in interest
defending this litigation. His addition as an individual
defendant will not change the substance of the allegations or the
identity of the witnesses.
Joining Mr. Shelton in his individual capacity is necessary
to ensure the effectiveness of any injunctive relief that might
be granted against the defendant corporations. The companies are
closely held and principally operated by Mr. Shelton. If Mr.
Shelton is not added as a defendant in his individual capacity,
he could avoid any injunction entered against the defendant
corporations by dissolving the companies and reincorporating them
under a different name. Furthermore, the addition of Mr. Shelton
insures the availability of funds for payment of a civil penalty.
See Federal Trade Commission v. Kitco of Nevada. Inc .. 612 F.
Supp. 1282, 1292 (D. Minn. 1985).
3
CONCLUSION
For the foregoing reasons, the Court should grant the
Government's Motion to Amend the Complaint.
FRANK W. HUNGER
Assistant Attorney General
Civil Division
STEPHEN L. HILL, JR.
United States Attorney
ALLEEN S. VAN BEBBER
Deputy United States Attorney
Missouri Bar No. 41460
1201 Walnut Street
Suite 2300
City, Missouri
M ~ ~ 6 2 1 .
OF COUNSEL:
ERIC A. RUBEL
General Counsel
ALAN SHAKIN
Assistant
General Counsel
MELISSA V. HAMPSHIRE
Attorney
U.S. Consumer Product
Safety Commission
Bethesda, MD 20814
(301) 504-0980
Attorneys for Plaintiff
Dated: February 19, 1997
JAY I. BRATT
ANTHONY SCOTT BARKOW
Attorneys
P.O. Box 386
(202) 616-0509
4
. . ' . .
I, Anthony Scott Barkow, hereby certify that a copy of
Plaintiff's Memorandum in Support of Motion for Leave to File
Second Amended Complaint was s e f ~ upon counsel for defendants,
via Federal Express, on this ~ t h day of February, 1997,
addressed to:
David W. Whipple
Whipple Law Firm, P.C.
818 Grant Avenue
Kansas City, Missouri 64106
Attorney for Defendants
Trial Attorney
P.O. Box 386
(202} 616-0509
5
CM!ECF Western District of Missouri Page I of20
CLOSED,PROTO
U.S. District Court
Western District of Missouri (St. Joseph)
CIVIL DOCKET FOR CASE#: 5:96-cv-06131-HFS
USA v. Shelton Wholesale, et al
Assigned to: Judge Howard F. Sachs
Demand: $0
Cause: 28: 139I Personal Injury
Plaintiff
USA
Date Filed: I 0/02/I996
Date Terminated: Ol/30/200I
Jury Demand: None
Nature of Suit: 890 Other Statutory
Actions
Jurisdiction: U.S. Government Plaintiff
represented by Aileen C. VanBebber
McDowell, Rice, Smith & Buchanan,
PC-KCMO
605 West 47th Street
Suite 350
Kansas City, MO 64I12-1900
(816) 753-5400
Fax: (8I6) 753-9996
Email: avanbebber@mcdowellrice.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
P.O. Box 386
(202) 307-0414
LEAD ATTORNEY
Drake Cutini
U.S. department of Justice
P.O. Box 386
(202) 307-0414
LEAD ATTORNEY
Frank W. Hunger
P.O. Box 386
https://ecf.mowd.uscourts.gov/cgi-bin/DktRpt.pl?300294975479435-L _1_1-1 1/24/2013
CMIECF Western District of Missouri Page 4 of20
AITORNEY TO BE NOTICED
Delilah S. Seroussi
(See above for address)
LEAD ATTORNEY
AITORNEYTO BE NOTICED
Robert B. Hopkins
(See above for address)
LEAD ATTORNEY
ATTORNEY TO BE N011CED
1
........... ------ . ---- ..... - r . - ...... r ............... -- ... . - . ... - . - - --- - -- . - .. - .. . - .. --- ----- - ---- -----------------------------------------------:
Date Filed # ! Docket Text i
r----------------- --------;----------------- -------------------------------------------------------1
110/0211996 1 ! COMPLAINT For Civil Penalties and Injunction w/ JSS-44c (none I
I________ ----! issued) (Court Employee) (Entered: 10/07/1996) j
1
1
10/0911996 T 2 i Notice of pretrial procedures ;proposed scheduling order due 2/7/97 (Court !
! Employee) (Entered: 10/1 0/1996) I
j 11 /0711996 -r---3-i First AMENDED COMPLAINT for civil and Nu-;ber
I I
i summon(s): none; adding Polaris Fireworks,In (Court Employee) (Entered: !
! 11112/1996) i
-------[----------------------------------------------------------------------!
1
11/13/1996 4 i WAIVER OF SERVICE executed by defendant Shelton Wholesale on I
i 10/31196 (Court Employee) (Entered: 11118/1996) 1
r
-i 1129/1996 _1_5 i. ANSWER by wholesale, defendant Polaris Fireworks,In 1
I i (Court Employee )(Entered: 12/04/1996) !
j 01/1411997 6 j ORDER by Judge Dean Whipple that the Clerk of the is directed to
1 i reutn this case to the regular draw to be reassigned; Case reassigned to Judge
I j Howard F. Sachs (cc: all counsel) (Court Employee) (Entered: 01/14/1997) i
l Ol/23/ 1997 _____ of
j J Disclosure (Court Employee) (Entered: 0 1/2711997) !
--------1
1 01127/1997 8 I CERTIFICATE by plaintiffUSA of service of Disclosure Pursuant to Rule 26 j
J 1 j (Court Employee) (Entered: 01/28/1997) !
l o-2l05Ji99-7-,r-9 I. Rule 26 by plaintiff, defendant (Court Employee) (Entered: J
1 ! o2/os/1997) 1
r
2t20/1997 j CERTIFICATE-by plaintiff USA of service of 1st req for prod. of doc. (Court I
\ Employee) (Entered: 02/21 /1997) I
I I
----------,---------------------------------------------1
02/20/1997 11 j ENTRY OF APPEARANCE on behalf of plaintiff USA by Stephen L. Hill Jr. j
I (Court Employee) (Entered: 02/21/1997) 1
I '
402/io11997 -- 12 l MOTION by plaintiffUSA.to amend complaint (Court Employee) (Entered:
!02/2111997) !
I I

02/20/1997 13 ! Suggestions by plaintiffUSA in support of motion to amend complaint [12-1] I
: I
I . !
https://ecf.mowd.uscourts.gov/cgi-bin!DktRpt.pl?300294975479435-L_l_1-l 1/24/2013
CM/ECF Western District of Missouri Page 5 of20
I I j (Court Employee) (Entered: 02/21 /1997) I
!
---------------- ---,-------------------------------------------------1
1
03/11/1997 I 14 ! SCHEDULING ORDER: by Judge Howard F. Sachs ;discovery ddl set I
I
j 7 /1/97 ;witness list ddl set 7/25/97 ;exhibit list ddl set 7/25/97 Prop. Pretrial j
I i order due 8/15/97 (cc: all counsel) (Court Employee) (Entered: 03/11/1997) i
!
03/25/1997 ____ 1 15 ! CERTIFICATE by defendant of service of to pit's 1st set of interr. I
1
! (Court Employee) (Entered: 03/26/1997) !
o4/0W997-Il .16-\ CERTIFICATE by plaintiffUSA of service of Expert Designation on -,
i counsel. (Court Employee) (Entered: 04/02/1997) '1
---------------,--------[ --------------------------------------------,
04/10/1997 1 17 1 CERTIFICATE by plaintiff USA of service of amended notice of deposition ,
1 j of Gregory P. Shelton. (Court Employee) (Entered: 04/1111997) !

05/16/1997 j 19 I CERTIFICATE by USA of service of 2nd set ofinterr to dft (Court I
1 ! Employee) (Entered: 05/19/1997) j
,---------------r-----------; ------------------------ --"---------------------------------------------1
05/20/1997 20 i ORDER by Judge Howard F. Sachs Telephonic Conference held 5/16/97. I
I ! Case set for trial 2/1197; Prop. Sch order due; 5/27 (97 granting motion I
1
j i c m lamt b addm Gre o P. Shelton as dft m Case No. 96- 1
j :
1
-CV-SJ-6 s[12-1]TheCer sa 1et eattac e n men e I
! ! ! Comp aint. cc: all counsel) (Court Employee) (Entered: 05/20/1997) i
f------ --;- - I
I 05/20/1997 '1 21 i AMENDED COMPLAINT Number ofsummon(s): none; adding Gregory P. i
I : Shelton (Court Employee) (Entered: 05/20/1997) !
r-06/1 o/ 1997--n - -:-CERTIFICATE by defendant Shelton wholesale of service of-1st set of !
I i interros & req f/prod of docs (Phyllis Travers) (Entered: 06/1111997) I
r-------- --- ------- I
l
06/1111997 23 \ CERTIFICATE by defendant Shelton Wholesale of service of answers to .
1 ! pia's 2nd set of interrs (Court Employee) (Entered: 06/1111997) I
___________ ---------------------1
06/1111997 I 24 ! ANSWER to second amended complaint by defendant Shelton Wholesale, '
I ! defendant Polaris Fireworks,In, defendant Gregory P. Shelton (Court
1
L Employee) (Entered: 0611111997)
07/01/1997 1 25 ! CERTIFICATE by plaintiffUSA of service of2nd req f/prod of docs &
I I ! things to dfts Shelton Wholesale, Inc., Polaris Fireworks, Inc., & Gregory
j .
1
. j Shelton (Georgia Kee) (Entered: 07/01/1997) i
----T------------------------------------------------------------------.
j 07/15/1997 ' 26 i CERTIFICATE by plaintiff USA of service of Objections & Responses to i
'I : dfts' 1st req f/prod of docs, & 1st set of Interr (Georgia Kee) (Entered: '
j 07 /1611997)
.. -----------------------------------------------------------j
08/08/1997 27 ! CERTIFICATE of transmission of deposition of Gregory P.Shelton taken on i
I
i. May 6 & 7,97 on behalf of Pit. Costs: $1742.00 to Pit. (Court Employee) !
I ! (Entered: 08/08/1997) j
j o8i08/
1 , ! (Jackie Price) (Entered: 08/12/1997) i

https://ecf.mowd.uscourts.gov/cgi-bin/DktRpt.pl?300294975479435-L_1_1-1 1124/2013
EXHIBITL
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neodymium magnet spheres. Smm diameter,
3tings and precise Electroplate coatings. Our
nagnet spheres, at extremely aggressive
magnets are not toys.
Due to CPSC requests, we are selling the magnets individually. However, shipping
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shaped tray for counting and shipping.
Polymer Neoballs e
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of a color. The custom designed
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EXHIBIT J
)
In the Matter of )
)
)
)
and )
)
)
CRAIG ZUCKER, individually, and as an officer )
of MAXFIELD AND OBERTON HOLDINGS, )
LLC. )
)
)
)
Respondents. )
__________________________________ )
CPSC Docket NO. 12-1
COMPLAINT COUNSEL'S RESPONSES TO RESPONDENT CRAIG ZUCKER'S
FIRST SET OF REQUESTS FOR ADMISSIONS TO
CONSUMER PRODUCT SAFETY COMISSION
Pursuant to 16 C.F.R. 1025.34, Complaint Counsel hereby provides its objections and
responses to Respondent Craig Zucker's First Set of Requests for Admission (Requests). The
following objections and responses are made solely for the purposes ofthis action and are based
upon information and documents presently within the custody or control of the staff ofthe
Commission, and no incidental or implied admissions are intended. Complaint Counsel's
responses are made with the express reservation of all rights pursuant to the U.S. Consumer
Product Safety Commission's (CPSC or Commission) Rule of Practice for Adjudicative
Proceedings (Rules) to supplement and/or amend these responses or to otherwise present
evidence later discovered or the significance of which is learned subsequent to December 13,
2013. The fact that Complaint Counsel has not answered or objected to any Request, or part of a
Reguest No. 83. Admit that the Second Amended Complaint filed against Mr. Zucker
dated February 11, 2013 was not signed by the Associate Executive Director for Compliance
and Enforcement.
Answer: Objection. Complaint Counsel objects to this Request because it seeks
infonnation that is publicly accessible and therefore is equally accessible to the Respondent. The
Amended Complaint in CPSC Docket No. 12-1, dated February 11,2013 ("Second Amended
Complaint") speaks for itself and Respondent's characterization is denied to the extent
inconsistent with that document.
Reguest No. 84. Admit that the CPSC Commissioners did not vote to authorize the
Amended Complaint dated September 18, 2012 issued against M&O.
Answer: Objection. Complaint Counsel objects to this Request to the extent that it
assumes or implies that the Rules require the Commission to vote to authorize an amended
complaint. Complaint Counsel further objects to this Request as vague because it fails to
distinguish between actions of individual CPSC commissioners as opposed to the Commission.
Subject to and without waiving its objections, Complaint Counsel admits that that no Record of
Commission action was posted on September 18, 2012.
Reguest No. 85. Admit that the CPSC Commissioners did not vote to authorize the
Second Amended Complaint filed against Craig Zucker dated February 11, 2013.
46
Subject to and without waiving its objections, Complaint Counsel admits that that no Record of
Commission action was posted on February 11, 2013.
Request No. 86. Admit that the CPSC Commissioners did not hold a vote after July
25, 2012 to authorize the Second Amended Complaint filed against Craig Zucker dated February
Jl, 2013.
Subject to and without waiving its objections, Complaint Counsel admits that no Record of
Commission action was posted between July 25, 2012 and October 3, 2013 regarding the Second
Amended Complaint.
Request No. 87. Admit that under the Consumer Product Safety Act, a "distributor"
cannot be a "manufacturer" of a consumer product.
Answer: Objection. Complaint Counsel objects to this Request because it calls for a
legal conclusion. Complaint Counsel further objects to this Request to the extent that it seeks
information that is publicly accessible and therefore is equally accessible to the Respondent. The
Consumer Product Safety Act speaks for itself. Respondent's characterization of the Consumer
Product Safety Act is denied to the extent that it is inconsistent with the Act.
Request No. 88. Admit that subsequent to the Buckyballs recall dated May 27, 2010,
CPSC did not ask M&O to stop selling any of the Subject Products until July 10, 2012.
Answer: Objection. Complaint Counsel objects to this Request as overly broad and unduly
burdensome or otherwise inconsistent with Complaint Counsel's obligations under the Rules
47
EXHIBITK
)
In the Matter of )
)
ZEN MAGNETS, LLC )
STAR NETWORKS USA, LLC )
)
Respondents. )
______________________________)
(Consolidated)
COMPLAINT COUNSEL'S MEMORANDUM IN SUPPORT OF
MOTION FOR LEAVE TO FILE SECOND AMENDED
COMPLAINTS IN DOCKET NOS. 12-1 AND 12-2
Complaint Counsel filed Amended Complaints against Respondent Maxfield and
Oberton Holdings, LLC ("M&O") and Zen Magnets, LLC ("Zen") seeking a
determination that that Respondents' products (the "Subject Products") present a
substantial product hazard as that term is defined in sections 15(a)(1) and (2) ofthe
Consumer Product Safety Act ("CPSA"), 15 U.S.C. 2064(a)(l), (2). See Amended
Complaints in CPSC Docket Nos. 12-1 and 12-2.
Respondent M&O has now purported to dissolve as a corporate entity, see Notice
of Withdrawal ofM&O's counsel at 1 (Dec. 27, 2012), and has not communicated with
Complaint Counsel as to its status or intentions in this litigation.
2
Complaint Counsel has
had limited communications with the Trustee for the Liquidating Trust that was
2
See also www.getbuckyballs.com (last accessed Feb. 4, 2013) (Exhibit C) (stating that M&O stopped
doing business on December 27, 2012). M&O has not provided evidence to Complaint Counsel to support
its claims that it no longer exists. Further, M&O has not agreed to perform remedies that Complaint
Counsel sought in the Amended Complaint, including but not limited to refunding the purchase price of the
M&O Subject Products to consumers. Complaint Counsel continues to seek that relief in this proceeding.
established to wind down M&O's affairs, but she has indicated that the Trust will not
appear in this litigation on M&O's behalf. See e-mail from Julie Beth Teicher to
Complaint Counsel, with a copy to the Court (January 23, 2013, 10:38 AM) (Exhibit D).
In light of this development, Complaint Counsel seeks leave to file a Second Amended
Complaint against M&O to name its Chief Executive Officer ("CEO"), Craig Zucker
("Mr. Zucker"), as a Respondent, both individually and in his capacity as a responsible
corporate officer.
Complaint Counsel also seeks leave to file a Second Amended Complaint against
Zen to include allegations that since the filing of the Amended Complaint, Zen has been
importing, distributing, and selling aggregated masses of high-powered, small rare earth
magnets under the name Neoballs. The motion for amendment complies with the
requirements of 16 C.F.R. 1025.13 because the proposed Second Amended Complaints
"do not unduly broaden the issues in the proceedings or cause undue delay." The Second
Amended Complaints would not broaden the substantive issues ~ this litigation in any
significant way, and any delay may not be characterized as "undue" because the
amendments result directly from actions taken by Respondents after this proceeding
commenced. Moreover, no discovery schedule has been set and a prehearing conference
was recently scheduled for March 6, 2013.
I. Mr. Zucker is Appropriately Named as a Respondent in the
Second Amended Complaint Individually and in his Capacity
as CEO
Complaint Counsel moves to amend the Amended Complaint against M&O to
name Mr. Zucker as a Respondent, both individually and in his capacity as CEO of
2
M&O, pursuant to Supreme Court precedent that permits the inclusion of an individual
Respondent where, as here, the Respondent exercised personal control over the acts and
practices of the corporation.
The facts in the instant case demonstrate amply that Mr. Zucker personally
controlled the acts and practices of the corporation, including the importation and
distribution of Buckyballs and Buckycubes, which the Second Amended Complaint
alleges constitute substantial product hazards. Indeed, in Mr. Zucker's many
communications with CPSC Commissioners and staff, he consistently identified himself
as the CEO and principal decision maker ofM&O. For example, on April4, 2012, Mr.
Zucker met personally with a CPSC Commissioner regarding the M&O Subject Products.
See CPSC Public Calendar No. XXXIX, No. 26 at 3 (April4, 2012) (Exhibit E). He held
a subsequent meeting on April10, 2012 with another CPSC Commissioner and then met
separately that same day with CPSC staff to discuss the M&O Subject Products. See
CPSC Public Calendar No. XXXIX, No. 27 at 2 (April 11, 2012) (Exhibit E). In
addition, Mr. Zucker submitted formal information to the Commission on behalf of
M&O. Specifically, on May 25, 2012, Mr. Zucker filed a report on the Subject Products
in response to staffs requests for information pursuant to section 15(b) ofthe CPSA
("Full Report").
3
In the Full Report, Mr. Zucker identified himself as the author of the
report and as the CEO ofM&O. Full Report at 1 (on file with Complaint Counsel). He
stated, "Craig Zucker is responsible for the development and enforcement of Maxfield
3
Pursuant to Commission regulations at 16 C.F .R. II 0 1.61 (b)( 1 ), Complaint Counsel may disclose
information from the Full Report in this public filing because the Commission has issued a Complaint
under sections 15( c) and (d) of the CPSA alleging that the Subject Products present a substantial product
hazard.
3
and Oberton's compliance program." Full Report at 6.
4
Consistent with his stated
responsibility for the development and enforcement ofM&O's compliance program, Mr.
Zucker communicated personally with CPSC compliance staff regarding CPSC actions in
connection with the Subject Products. See e-mails from Craig Zucker to CPSC
compliance officer Thomas Lee (June 19,2012 1:58 p.m.; June 25, 2012 9:54a.m.)
(Exhibit E). Mr. Zucker also corresponded personally with other CPSC staff about CPSC
actions connected to the filing of the Complaint. See e-mail from Craig Zucker to CPSC
Spokesman Scott Wolfson (Sept. 11, 2012 1:06 p.m.) (Exhibit E) (referencing success of
M&O's "Save our Balls" campaign).
In addition to his direct and repeated communications with CPSC staff and
Commissioners about the very issue before this Court, Mr. Zucker also personally
lobbied members of Congress and the President of the United States, again
communicating on issues related directly, and solely, to the matter at issue here. See e-
mail from Craig Zucker to staff of the U.S. Senate and U.S. House of Representatives, as
well as CPSC Commissioners and CPSC staff(July 20,2012 10:38 a.m.) (Exhibit G);
open letter to President Obama, published in the Washington Post and other newspapers
on August 2, 2012 (stating "In 2009, I started our business, creating a product called
Buckyballs") (Exhibit G).
4
Mr. Zucker also submitted M&O's formal comment to CPSC's staff briefing package on the proposed
Safety Standard for Magnet Sets. See Letter from Craig Zucker to CPSC Secretary Todd Stevenson,
registered as a public comment on September 12, 2012, available at
http://www.regulations.gov/#!documentDetaii;D=CPSC-2012-0050-0023 (Exhibit F).
4
Similarly, in nwnerous interviews on television, in print, and in internet media,
Mr. Zucker has responded to Complaint Counsel's allegations on behalfofM&0.
5
Those statements demonstrate that Mr. Zucker was integral to the design, manufacturing,
and marketing of the M&O Subject Products, including the modifications to the design of
the warnings and instructions that accompanied the products, and thus integral to the
matter at issue in the current proceeding.
Indeed, M&O's own press releases identify Mr. Zucker as M&O's CEO and
founder and Mr. Zucker, on numerous occasions, has presented himself as the face of
Maxfield and Oberton. In "A Letter from Our CEO: The Real Story Behind Why We're
Fighting," Mr. Zucker described at length and in detail M&O's interactions with CPSC
staff, and concluded: "We are fighting the CPSC action because we believe they are
wrong." Mr. Zucker's handwritten signature appears on the letter, and the signature
block identifies him as "Co-founder, CEO, Maxfield and Oberton." Previously available
at www.getbuckyballs.com/letter-from-ceo (last accessed October 18, 2012) (Exhibit 1);
6
see also press release dated August 14, 2012 (previously available at
www.getbuckyballs.com/cpsc-complaint-arbitrary-capricious-without-merit, last
5
See, e.g., Power Lunch (CNBC television broadcast Aug. 20, 2012)
(http://www.youtube.com/watch?v=sjtAZNs-SCM) (Exhibit H); Your World With Neil Cavuto (Fox News
television broadcast Aug. 3, 2012) (http://www.youtube.com/watch?v=aGjiZikVBUA) (Exhibit H);
Nightline: Is Proposed Recall on Magnet Toys Unfair? (ABC television broadcast Sept. 12, 2012) (video
and transcript at http://abcnews.go.com/Health/proposed-recall-magnet-toys-unfair/story?id= 17075289)
(Exhibit H). In several other interviews, Mr. Zucker identified personally with the company's litigation
goals. See "Andrew Martin, For Buckyballs Toys, Child Safety is a Growing Issue, N.Y. Times, Aug. 16,
2012, available at http://www .nytimes.com/20 12/08/17 /business/for-buckyballs-toys-child-safety-is-a-
growing-issue.html?pagewanted=all&_r=O (Exhibit H); Buckyballs vs. The Consumer Products Safety
Commission (Reason.com internet broadcast Sept. 12, 2012) (video and transcript at
http://reason.com/archives/20 12/09112/buckey-balls) (Exhibit H); The Rush Limbaugh Show (radio
broadcast July 30, 2012) (transcript and audio at .
http://www.rushlimbaugh.com/daily/20 12/07 /30/ceo _of_ buckyballs_ save_ our_ balls) (Exhibit H).
6
Some M&O press releases no longer appear on www.getbuckyballs.com. The press releases cited here are
attached as exhibits.
5
accessed December 4, 2012) (Exhibit I) (also identifying Mr. Zucker as "Founder and
CEO of Maxfield and Oberton").
Moreover, in unrelated litigation in Federal court, Mr. Zucker submitted a signed,
sworn declaration in support of an M&O motion. See Declaration of Craig Zucker in
support of Maxfield & Oberton Holdings, LLC's Request for Judicial Notice, The Estate
ofBuckminster Fuller v. Maxfield & Oberton Holdings, LLC, Case No. CV 12-2570 at
Dkt. No. 13-1 (N.D. Cal. July 13, 2012) (Exhibit J). In the declaration, Mr. Zucker said
"I am the Chief Executive Officer of Maxfield & Oberton Holdings, LLC ... Unless
otherwise stated, I have personal knowledge of the facts set forth herein and if called as a
witness could competently testify thereto." Decl. at l (Exhibit J). Mr. Zucker attached as
an exhibit "a true and correct copy of the October 24, 2011 non-exclusive license granted
to [M&O] by Plaintiff." /d. Mr. Zucker counter-signed the Plaintiffs licensing letter on
behalf ofM&O. Decl. at Exhibit 2 (Exhibit J). Mr. Zucker's act of making a declaration
on behalf of the company, as well as his demonstrated ability and practice of entering into
a contract on behalf of M&O, constitute further evidence that he is responsible for
M&O's acts and practices.
A. Mr. Zucker Is a Responsible Corporate Officer Under the
Doctrine Established by the Supreme Court
The facts set forth above demonstrate that Mr. Zucker is appropriately named as a
Respondent in the Second Amended Complaint in his individual capacity and as a
responsible corporate officer under the relevant Supreme Court precedent established in
United States v. Dotterweich, 320 U.S. 277 (1943) and United States v. Park, 421 U.S.
658 (1975).
6
In Park, the Supreme Court upheld the conviction of the president of a food
distributor on charges that he committed criminal violations of the Federal Food, Drug,
and Cosmetic Act ("FDCA").
7
The charge stemmed from FDA inspections that
uncovered rodent-infested food stored in the company's warehouse. The defendant
conceded at trial that he was responsible for providing sanitary conditions for food
offered for sale to the public, but claimed that he had delegated that task to "dependable
subordinates," id. at 664, and that the company had an organizational structure that
placed different individuals in charge of the company's operation. Although he conferred
with legal counsel to determine an appropriate corrective action, he made no more efforts
to ensure that the remedial steps were taken or to assess whether they were effective.
To establish the defendant's culpability, the government introduced bylaws that
set forth the duties of the defendant as the CEO and presented evidence that while the
defendant delegated normal operating duties, including sanitation, to others, he "retained
'certain things, which are the big, broad, principles of the operation of the company,' and
had the 'responsibility of seeing that they all work together."' /d. at 664. The jury
convicted the defendant on the grounds that he was responsible for the sanitation efforts
undertaken by the company. Although the Court of Appeals reversed, the Supreme Court
reinstated the District Court's judgment on the verdict on appeal.
The Park Court relied on the reasoning in United States v. Dotterweich,
8
where it
upheld the criminal conviction of an individual corporate officer for violations of the
7
The government filed an Information charging both the individual defendant and the company, Acme
Markets, Inc. The company entered a guilty plea prior to trial. Park, 421 U.S. at 661; United States v.
Park, 499 F.2d 839, 840 (4th Cir. 1974).
8
In Dotterweich, the Supreme Court upheld the conviction of the president and general manager of a
7
FDCA on the grounds that the "offense is committed . . . by all who have ... a
responsible share in the furtherance of the transaction which the statute outlaws." !d. at
284. The Park Court affirmed the Dotterweich rationale-that individual corporate
officers can be held liable under the FDCA if their "failure to exercise the authority and
supervisory responsibility reposed in them by the business organization resulted in the
violation complained of." Park, 421 U.S. at 671. This rationale has been confirmed in
subsequent cases, both in criminal and civil contexts, and has been applied to officers of
limited liability companies ("LLCs").
9
Moreover, the Court observed, the reasoning of Dotterweich and subsequently
decided cases imposes on "individuals who execute the corporate mission" a duty not just
to seek out and remedy violations, "but also, and primarily, a duty to implement measures
that will insure that violations will not occur." Park, 421 U.S. at 672. While "[t]he
requirements of foresight and vigilance imposed on responsible corporate agents are
beyond question demanding," the Court reasoned," . .. they are no more stringent than
the public has the right to expect of those who voluntarily assume positions of authority
pharmaceutical company for criminal violations of the FDCA stemming from his company's shipment of
misbranded and adulterated drugs. Dotterweich, 320 U.S. at 278. The Court upheld the conviction of the
individual defendant despite the fact that a lower court had observed that "Dotterweich had no personal
connection with either shipment, but he was in general charge of the corporation's business and had given
general instructions to its employees to fill orders received from physicians." United States v. Buffalo
Pharmacal Co., 131 F.2d 500, 501 (2d Cir. 1942).
9
See, e.g., United States v. Ming Hong, 242 F .3d 528 (4th Cir. 2001) (owner of a wastewater treatment
facility is criminally liable for the facility's clean water violations under Park and Dotterweich even though
he had no formal title as a corporate officer, because he played a substantial role in the company's
operations, including inspecting the treatment apparatus on at least one occasion); United States v. Gel-
Spice Co., 773 F.2d 427 (2d Cir. 1985) (president is individually criminally culpable for widespread rodent
infestation at storage facility, even though another employee managed the facility on a day-to-day basis);
TMJ Implants, Inc. v. Dept. of Health and Human Serv 's, 584 F.3d 1290 (1Oth Cir. 2009) (president of a
manufacturer of joint implants is individually liable for civil penalties for corporation's failure to file
medical device reports with FDA); United States v. Osborn, 2012 WL 1096087 at *4 (N.D. Ohio 2012)
(responsible corporate officer of an LLC is personally liable for the LLC's Clean Water Act violations).
8
in business enterprises whose services and products affect the health and well-being of
the public that supports them." !d.
At the heart of Park and Dotterweich lies the rationale that individual liability is
properly imposed on corporate officers where the failure to comply with regulatory
schemes affects the health and safety of the public. "The purposes of[the Food and
Drugs Act] touch phases of the lives and health of people which, in the circumstances of
modem industrialism, are largely beyond self-protection," the Dotterweich Court held.
Dotterweich, 320 U.S. at 280.
B. The Responsible Corporate Officer Doctrine Applies in
Product Safety Cases and Cases Where a Corporation No
Longer Exists
The rationale applies equally to statutes and regulations governing the Consumer
Product Safety Commission. In United States v. Shelton Wholesale, Inc., 34 F. Supp. 2d
1147 (W.D. Mo. 1999), the Commission sued two corporations that imported fireworks,
alleging violations of the Federal Hazardous Substances Act ("FHSA"). After learning
that "defendant corporations are closely held and run entirely by Mr. Shelton," the
government moved to amend the complaint to name Mr. Shelton individually as a
defendant. See Memo. in Supp. of Mot. to Amend at 1, Shelton, 34 F. Supp. 2d 1147
(W.D. Mo. 1999), No. 96-cv-06131, Dkt. No. 12, filed Feb. 20, 1997 (Exhibit K). In its
successful motion, the government argued that
Joining Mr. Shelton in his individual capacity is necessary to ensure the
effectiveness of any injunctive relief that might be granted against the
defendant corporations. The companies are closely held and principally
operated by Mr. Shelton. If Mr. Shelton is not added as a defendant in his
individual capacity, he could avoid any injunction entered against the
9
defendant corporations by dissolving the companies and reincorporating
them under a different name.
Id. at 3 (emphasis added). The court granted the motion. Shelton, Dkt. No. 20 (May 20,
1997) (Order "granting motion to amend complaint by adding Gregory P. Shelton as dft")
(Exhibit K).
The Shelton court later granted the government's motion for summary judgment
that Mr. Shelton had violated the FHSA in his individual capacity, citing Park and
Dotterweich:
Here, Mr. Shelton clearly bore a responsible relation to the activity prohibited-
the importation of a banned or misbranded hazardous substance. It is undisputed
that he was the sole shareholder, the chief corporate officer and that he made all
the decisions for the defendant corporations relevant to the allegations in this
case. Accordingly, under the reasoning of Dotterweich and Park, Mr. Shelton is
liable for the importation of all eighteen products by virtue of his various
corporate roles. No reasonable jury could conclude otherwise.
US. v. Shelton Wholesale, Inc., 1999 WL 825483 at *3 (unreported).
10
The Eighth
Circuit affirmed. Shelton v. Consumer Products Safety Comm 'n, 277 F.3d 998 (Eighth
Cir. 2002), cert. denied, 123 S.Ct. 514 (2002).
Shelton provides further support for Complaint Counsel's position that Mr.
Zucker is appropriately named as a Respondent in the Second Amended Complaint by
virtue of his role as the CEO ofM&O. His responsibility for ensuring that the firm
complied with relevant statutes and regulations, including the Consumer Product Safety
Act, as demonstrated through his own statements and actions, brings him squarely within
10
Although the court's Order on summary judgment did not encompass a finding that the violations were
knowing, id. at *5, the court enjoined Shelton in his individual capacity from "knowingly or recklessly
importing products violative of the FHSA and/or the CPSC regulations." /d. The Eighth Circuit
affirmed. Shelton v. Consumer Product Safety Commission, 277 F.3d 998 (8th Cir. 2002), cert. denied, 123
S.Ct. 514 (2002).
10
the scope of individuals contemplated by Dotterweich, Park, and Shelton. Thus, the
proposed Second Amended Complaint comports with clear precedent, bringing Mr.
Zucker appropriately before this Court.
The purported dissolution ofM&O does not preclude an action against Mr.
Zucker individually. Case law establishes that even if a person ceases to be a corporate
officer after the violations have occurred, the individual can still be held responsible for
the corporation's previous acts. In United States v. Hodges X-Ray, Inc., 759 F.2d 557
(6th Cir. 1985), the Sixth Circuit held that the principal shareholder of an x-ray company
was individually liable under Park and Dotterweich for violations of the Radiation
Control for Health and Safety Act of 1968, even though the company's assets had been
sold prior to the assessment of a civil penalty. The court specifically noted that the
corporation no longer existed, but nonetheless held Mr. Hodges individually liable. Id. at
558 n.1 (stating that the defendant corporation is defunct). As in Hodges, Mr. Zucker
should be held responsible for previous acts and practices ofM&O regardless of M&O's
purported dissolution.
Barrett Carpet Mills, Inc. v. CPSC, 635 F.2d 299 (4th Cir. 1980) does not compel
a contrary conclusion. In that case, a court upheld a cease and desist order issued by the
Commission against a company but refused to apply the order to the corporation's
individual officer because, the court reasoned, "the violation complained of was
inadvertent and not likely to recur .... " Id. at 304. In Barrett, the corporation's
subcontractor had improperly applied fire-retardant chemicals to carpets during two
production days during a sixteen-month period, which the court held was insufficient to
11
hold the president of the company responsible for the regulatory violations by the
company. The court emphasized that the violations were "operational accidents which
are not likely to occur, certainly not intentionally." Id.
The facts in the instant proceeding could not be more different from those in
Barrett-M&O imported and distributed the M&O Subject Products intentionally and on
a full time basis, and Mr. Zucker fully controlled M&O's day to day operations in
importing and distributing the Subject Products. There was nothing inadvertent, rare, or
unintentional in the sale and distribution by Mr. Zucker of the Subject Products at issue
here. Mr. Zucker stands squarely within the definition of a responsible corporate officer
set out in Park and Dotterweich and is therefore appropriately named as a Respondent in
the Second Amended Complaint.
II. The Filing of the Second Amended Complaint Against Zen Is
Appropriate In Order to Include All Subject Products Sold by
the Company
The proposed Second Amended Complaint against Zen alleges that Zen recently
began selling aggregated masses of small, high-powered magnets under the brand name
"Neoballs." According to Zen's website, ''Neoballs is a trademark of Zen Magnets
LLC." See www.neoballs.com (last accessed Feb. 6, 2013) (Exhibit L). Upon
information and belief, Neoballs are substantively identical, in both their physical
properties and in the hazard presented, to other aggregated masses of small, high-
powered magnets sold by Zen.
The Neoballs website purports to sell magnets individually instead of in sets, an
ill-disguised attempt to circumvent the definition of the Subject Products as aggregated
12
masses of high-powered, small rare earth magnets. A message on the Neoballs website
states, "Due to CPSC requests, we are selling the magnets individually. However,
shipping is a flat rate no matter how many neoballs you purchase, whether you buy 216,
or 21 ,600 magnet spheres." See http:/ /neoballs.com/purchase-neoballs/# (last accessed
February 6, 2013) (Exhibit L). CPSC staff has never requested that Zen sell magnets
individually. A pop-up balloon over the words "CPSC requests" states "The CPSC is
attempting to ban 'Aggregates of powerful magnets', and have requested all magnet
sphere brands to stop selling. However, you can still purchase as many neoballs as you
would like." /d. (screen shot of pop-up balloon included at Exhibit L). However, despite
its stated intent to offer the magnets on an individual basis, the site, through various
promotions, overtly encourages visitors to purchase the balls in aggregate. Neoballs fall
squarely within the definition of the Subject Products set forth in the Complaint,
notwithstanding the company's efforts to reclassify the product through a transparent
sales strategy. The Amended Complaint seeks merely to ensure that any remedies that
are applied to Respondent's Zen Magnets product line are also applied to Neoballs.
The addition ofNeoballs, as well as the inclusion of some supplemental
information from the Neoballs and Zen websites, are the only substantive amendments to
the Second Amended Complaint against Zen. The amendment would not unduly broaden
the issues because Neoballs are substantively identical to the Zen Subject Products that
are already the subject of this proceeding. See In re Wy. Tight Sands Antitrust Cases, 121
F.R.D. 682, 685 (D. Kan. 1986) (granting plaintiffs motion to amend on the grounds that
"the additional claims stem from the same basic transactions and factual allegations in
13
[plaintiffs] original complaint."). Similarly, the amendment would not unduly delay
these proceedings because any delay may be attributed to Zen's decision to resume sale
ofNeoballs. Moreover, no discovery schedule has been set and a prehearing conference
was recently scheduled for March 6, 2013. See id at 684-85 (granting amendment when
"only the first wave of discovery has been completed and the amendment to the
complaint will not unduly delay the progress of said discovery"). Therefore amendment
is proper under 16 C.F.R. 1025.13.
III. Conclusion
Wherefore, for the foregoing reasons, Complaint Counsel respectfully requests
that the Presiding Officer permit Complaint Counsel to file the attached Second Amended
Complaints and List and Summary of Documentary Evidence.
a ~ ~
MaryB.Mh)l ~ '
Bethesda, MD 20814
Tel: (301) 504-7809
Complaint Counsel
14
Bethesda, MD 20814
15
EXHIBITL
'.
In the Matter of )
)
)
MAXFIELD AND OBERTON )
HOLDINGS, LLC )
AND )
CRAIG ZUCKER, individually and as )
an officer of )
MAXFIELD AND OBERTON )
HOLDINGS, LLC )
AND )
ZEN MAGNETS, LLC )
AND )
STAR NETWORKS USA, LLC )
)
)
Respondents. )
___________________________ )
CPSC Docket No: 12-1
HON. DEAN C. METRY
ORDER REGARDING COMPLAINT COUNSEL'S EXPI<:DITED MOTIO!'i
On March 31, 2014, Respondent Craig Zucker filed three (-3) separate Motions to
Compel related to discovery responses of the Consumer Product Safety Commission
(CPSC). On this same date, Complaint Counsel tiled a Motion to Compel Discovery.
On April 2, 2014, Complaint Counsel tiled an Expedited Motion to Stay
Respondent Craig Zucker's Motions to Compel or for Extension of Time (Expedited
Motion). In the Expedited Motion, Complaint Counsel asserts that "Complaint Counsel
understood that the parties should attempt to resolve discovery disputes amongst
themselves before asking the Court to intervene." Complaint Counsel suggests that prior
to filing the Motions to Compel, Mr. Zucker made no attempt to confer conceming
CPSC's discovery responses.
Complaint Counsel fi1rther suggests that "[i]n the interest of efficient litigation
and judicial economy, parties should first attempt to resolve discovery disputes amongst
themselves before seeking intervention of the court." Noting that although CPSC
regulations do not have meet and confer requirements, Counsel suggests it would be
beneficial to both the patties and the undersigned if CPSC and Mr. Zucker "engage in a
good faith effort to meet and confer to resolve as many issues as possible.''
A preliminary review of the filings indicates CPSC has failed to meet its
discovery obligations. See 16 C.F.R. 1025.37 (explaining the Presiding Officer may
issues sanctions for failure to comply with discovery orders). Further, the parties have
had ample time to attempt to work out discovery disputes, and have apparently been
unable to do so. See 16 C.F.R. l025.1 (''A major concern on the Commission is that all
matters in adjudication move forward in a timely manner, consistent with the
Constitutional due process rights of all parties."'). Non-responsive or incomplete
discovery responses serve only to delay the proceeding.
However, the undersigned also encourages cooperation amongst the parties and
will not stifle a collaborative effort to resolve discovery disputes. The undersigned will
therefore grant a brief extension of time for the parties to confer, and for both parties to
file responses to the Motions to Compel. However, all parties arc expected to comply
with the deadlines set forth below.
WHEREFORE,
IT IS HEREBY ORDERED THAT all parties shall file a detailed update as to
the status of discovery not later than Mondav, April 7, 2014.
IT IS FU RTilER ORDERED THAT the parties may confer; however. the
responses to the Motions to Compel filed on March 31, 2014 are due not later than
Fridav, April 18, 2014.
SO ORDERED.
Done and dated this 3rd day of April. 2014, at
Galveston, TX
DEAN C. METRY
Administrative Law Judge
EXHIBITM
Available at https:/ /twitter.com/Scott_ Wolfson/status/491942963795460096.
Have an account? Sign in ....
Alan Cooper MrAianCooper 15h
Handguns are okay, but tiny round magnets are dangerous:
sendgrid.corn/wf/vvebmail?rp= ...
Details
Scott Wolfson
.:_(r:Scott_ Wol fc;on
+.!. Follow
@MrAianCooper At (3JUSCPSC, we do not
oversee handguns, but we do oversee high-
powered and hazardous magnets.
BuckyballsRecall.com
+. Reply t.'l R0 v;c-ct * Favonte Hore
r"-.'
1
6:48 ;\M- 23 Jul 2014
Full name
c 2014 Twl[{er Help Ads 111fo
EXHIBITN
Case 1:14-cv-00541 Document 1 Filed 04/01/14 Page 1 of 7
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CAUSE OF ACTION
1919 Pennsylvania Ave., NW, Suite 650
Washington, D.C. 20006,
Plaintiff,
v.
UNITED STATES CONSUMER PRODUCT
SAFETY COMMISSION
Bethesda, MD 20814
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
______________________________ )
COMPLAINT
Case No.:---------------
Judge: ________ __
This is an action under the Freedom of Information Act (FOIA), 5 U.S.C. 552, seeking
the release of records requested by Cause of Action from the United States Consumer Product
Safety Commission.
JURISDICTION AND VENUE
I. This Court has personal and subject matter jurisdiction pursuant to 5 U.S.C.
552(a)(4)(B), 5 U.S.C. 552(a)(6)(E)(iii), and 28 U.S.C. 1331.
2. Venue is proper in this district pursuant to 28 U.S.C. 139l(e)(l)(C) and
5 U.S.C. 552(a)(4)(B).
PARTIES
3. Cause of Action (COA or Plaintiff) is a non-profit, nonpartisan organization that
educates the public on how government transparency and accountability protects economic
opportunities for American taxpayers. In furtherance ofthis mission, Plaintiff regularly requests
access to the public records of federal government agencies, entities, and offices, and
disseminates its findings.
4. The United States Consumer Product Safety Commission (CPSC or Defendant) is
an agency within the meaning of 5 U.S.C. 552(f)(l). Defendant has possession, custody, and
control of records to which COA seeks access and that are the subject of this Complaint.
FACTS
5. This matter involves a FOIA request related to CPSC's efforts, through heavy-
handed regulatory overreach, to shut down a number of successful and responsible businesses,
including one that was operated by Mr. Craig Zucker.
6. Mr. Zucker is the former General Manager of Maxfield and Oberton Holdings,
LLC ("M&O"), a now-dissolved company that previously imported and sold Buckyballs and
Buckycubes, rare earth magnetic adult executive desk toys that CPSC seeks to recall and ban.
7. Buckyballs are small magnetic spheres, a few millimeters in diameter. When
many are placed together, they can be formed into innumerable shapes and patterns.
Manipulating Buckyballs into different shapes and patterns is an entertaining way to relieve
stress and exercise the mind. Buckycubes are small magnetic cubes that M&O marketed and
sold using the same safety program developed for Buckyballs.
8. Buckyballs and Buckycubes are completely safe when used as intended. Like
many other products, they may cause harm if ingested. For this reason, M&O never marketed its
products towards children.
9. On July 10,2012, without warning or evidence of a statistically significant
number of injuries, and after years of working side-by-side with M&O in the development of its
safety program, the CPSC's Office of Compliance issued a preliminary determination that
M&O's products were defective and that its safety program would not work.
2
Case 1:14-cv-00541 Document 1 Filed 04/01114 Page 3 of 7
10. At this point, CPSC initiated an all-out effort to shut down M&O. CPSC
immediately began contacting many ofM&O's major retailers, telling them that Buckyballs
and Buckycubes were unsafe and "requesting" them to stop selling the products.
II. M&O's retailers almost unanimously caved in to the government's pressure and
intimidation.
12. In a good-faith effort to regain CPSC's favor and to save its business, M&O
submitted a voluntary Corrective Action Plan that proposed further expansions to its already-
robust safety program, including a child-resistant carrying case, the possibility of adding a
bittering agent, enhanced warnings, additional retail signs, and programs to further public
awareness ofthe danger of ingestion.
13. CPSC received the plan at 4:00p.m. on July 24,2012. On information and belief,
CPSC never read it. Instead, CPSC filed an administrative complaint against M&O on July 25,
2012, initiating a proceeding to order M&O to stop selling all of its products and to conduct a
total recall of all of its products already sold. See In the Matter of Maxfield and Obert on
Holdings, LLC, CPSC Docket No 12-1 [hereinafter CPSC Proceeding], available at
http://www.cpsc.gov/en/Recalls!Recaii-Lawsuits/Adjudicative-Proceedings/.
14. On August 27, 2012, CPSC issued a news release stating that "CPSC staff
estimates that small, high powered magnet sets were associated with I, 700 emergency room-
treated injuries between 2009 and 2011. The majority of injuries (70 percent) have been to
children 4 to 12 years of age." News Release, U.S. Consumer Product Safety Comm'n, CPSC
Starts Rulemaking to Develop New Federal Standard for Hazardous, High-Powered Magnet Sets
(Aug. 27, 20 12), available at http://www.cpsc.gov/en/newsroom/news-releases/20 12/cpsc-starts-
rulemaking-to-develop-new-federal-standard-for-hazardous-high-powered-magnet-sets/
[hereinafter CPSC Press Release].
3
15. Without retailers willing to sell M&O's products in the face ofCPSC's campaign
of duress and intimidation, the agency forced M&O out of business in a matter of months. On
December 27, 2012, M&O filed its certificate of cancellation with the Division of Corporations
of the Delaware Secretary of State and ceased to exist.
16. On February 11,2013, CPSC moved to amend its complaint in the CPSC
Proceeding to add Mr. Zucker personally as a respondent. See CPSC Proceeding, CPSC Motion
for Leave to File Second Amended Complaint and Memorandum in Support (Feb. 11, 2013),
Docket Entry 29. The amended complaint seeks an order requiring Mr. Zucker to personally
conduct a full recall ofM&O's products at an estimated cost of$57 million. /d.
17. CPSC has never filed an action to require an officer or fanner officer of a
company to personally conduct a recall. Suggesting that M&O has only "purported" to dissolve,
CPSC argues that Mr. Zucker must stand in the company's shoes because he exercised personal
control over its acts and practices. /d.
18. Amidst general concern over CPSC's heavy-handed tactics and its unfounded
legal theory regarding Mr. Zucker, COA sent a FOIA request to CPSC on November 12,2013.
This request seeks access to the following records:
A. [A]Il records ... underlying CPSC's estimate [that small, high-powered magnet
sets were associated with I, 700 emergency room-treated injuries between 2009
and 2011]. These records should include, but are not limited to, all responsive
"reports ofhann" submitted to SaferProducts.gov, all responsive cases reported
through the National Electronic Surveillance System (NEISS) database,
responsive infonnation contained in the Injury or Potential Injury Incident (IPII)
database, responsive infonnation contained in the In-depth Investigation Database
(INDP), and relevant incident data received from the North American Society for
Pediatric Gastroenterology, Hepatology and Nutrition (NASPGHAN).
B. All records ... related to the drafting, preparation and clearance of the April 12,
2013 CPSC recall release regarding the recall of Buckyballs and Buckycubes
by six retailers (CPSC Recall Release 13-168).
4
Ex. 1.
C. All records ... comprising the monthly progress reports of the six retailers who
agreed to participate in the Buckyballs and Buckycubes magnet recall that was
announced on April 12, 2013 (CPSC Recall Release 13-168).
D. All records ... reflecting, regarding or referencing, and all communications
between, CPSC staff and Strong Force, Inc. regarding the product marketed as
NeoCube magnet sets.
E. All records . .. generated, downloaded or created by CPSC and/or its staff
containing, discussing, reflecting, regarding or referencing expressions of public
criticism or concern with respect to: (1) their conduct concerning the recall of
Buckyballs, Buckycubes, NeoCube or any other magnet sets, and/or (2) their
actions against [M&O] and/or Mr. Craig Zucker.
F. All records ... generated, downloaded or created by CPSC and/or its staff
referencing or concerning Mr. Craig Zucker.
19. In order to expedite CPSC's response, COA disclaimed any interest in obtaining
the identity of any manufacturer other than M&O or Strong Force, Inc. Id
20. COA 's FOIA request included a request for a public interest fee waiver, as well as
a request to be recognized as a representative of the news media. Id
21. By letter dated November 19,2013, CPSC acknowledged receipt ofCOA's FOIA
request and assigned it a case number: # 14-F-00079. CPSC did not invoke or request any
extension of the statutorily mandated time period within which to respond to COA's request,
stating merely that "there may be delays in providing the records" and that the records would be
"made available to you at the earliest possible date." Ex. 2.
22. This acknowledgment letter has been the only update of any kind provided by
CPSC regarding COA's request. COA has made multiple attempts to obtain a status update from
CPSC to no avail.
23. For instance, on January 6, 2014, COA emailed CPSC requesting a status update
on COA's request. COA received no response. Ex. 3.
s
24. On February 3, 2014, COA again emailed CPSC requesting a status update. COA
received no response. Ex. 4.
25. The FOIA and CPSC's regulations both require that CPSC respond to COA's
request within twenty (20) working days. 5 U.S.C. 552(a)(6); 16 C.F.R. I 0 15.5.
26. It has been more than 90 working days since COA submitted its FOIA request on
November 12,2013.
27. Through the date of this Complaint, CPSC has not responded to COA's request
beyond issuing a routine acknowledgment letter. Ex. 2. CPSC has thus failed to comply with its
now long-expired statutory deadline by which to make a detennination on COA's request.
COUNT I
Violation of the FOIA: Failure to Comply with Statutory Deadlines
28. COA incorporates by reference paragraphs 1-27.
29. COA has exhausted its administrative remedies under 5 U.S.C. 552(a)(6)(C).
30. CPSC has improperly withheld agency records requested by COA by failing to
make a detennination on COA's request within the time limit set forth in 5 U.S.C. 552(a)(6)
and in CPSC's implementing regulation, 16 C.F.R. 1015.5.
RELIEF REQUESTED
WHEREFORE, COA respectfully requests that this Court grant the following relief:
a. order CPSC to produce, by a date certain, all reasonably segregable, non-exempt
records responsive to COA's FOIA request;
b. provide for expeditious proceedings in this action;
c. award COA its costs and reasonable attorney fees incurred in this action pursuant
to 5 U.S.C. 552(a)(4)(E); and,
d. grant such other relief as the Court deems just and proper.
6
Dated: April 1, 2014
lsi Allan Blutstein
Allan Blutstein
D.C. BarNo. 486156
lsi Reed D. Rubinstein
Reed D. Rubinstein
Senior Vice President for Litigation
D.C. Bar No. 400153
Cause of Action
1919 Pennsylvania Ave., NW
Suite 650
(202) 499-4232 (telephone)
(202) 330-5842 (fax)
reed.rubinstein@causeofaction.org
Counsel for Plaintiff
7
EXHIBITO

VIAE-MAIL
Office of the Secretary
.. ..
fffir cAUSE

.Advocatea for G-nt Aceowata'bllity.
A 501(c)(3) Nonprofit
November 12,2013
Attn: Information Quality Guidelines
Re: Petition for Disclosure and Correction
Dear Sir/Madam:
: .
This is a Petition for Disclosure and Correction in accordance with the Information Quality
Act (IQA);
1
the information quality guidelines issued by the Office of Management and Budget,
(the "OMB Guidelines");
2
and, IQA Guidelines issued by the U.S. Consumer Product Safety
Commission (CPSC or the "Commission").
3
This Petition seeks: (a) disclosure of the data and
methods needed to determine whether influential information disseminated by the CPSC regarding
(1) magnets sold under the trade names Buckyballs and Buckycubes and (2) a defunct company
called Maxfield and Oberton Holdings, LLC ("M&O") meet IQA requirements, and (b) correction
of disseminated influential information that does not appear to meet statutory and OMB information
quality requirements.
I. REQUESTOR'S IDENTITY
The requestor is Craig Zucker, through his counsel, Cause of Action, Inc., a 501(c)(3)
government accountability organization.
The CPSC has illegally named Mr. Zucker, M&O's former CEO, as an individual
respondent in the matter titled: In the matter of MAXFJEW AND OBERTON HOLDINGS LLC, et
1
Pub. L. No. 106-554, 515, 114 Stat. 2763A-154 (App. C), 44 U.S.C. 3516 Note.
2
67 Fed. Reg. 8452-60 (Feb. 22, 2002).
3
Information Quality Guidelines, U.S. CONSUMER PROD. SAFElY COMM'N,
http://www.cpsc.gov/Research--Statistics/lnformation-Quality-Guidelines/ (last visited Nov. 6,
2013) [hereinafter IQA Guidelines]. OMB Guidelines set the minimum information quality
standards that CPSC must meet in this case. Pursuant to 44 U.S.C. 3516 Note, Congress allowed
agencies to create administrative review and correction mechanisms with OMB approval, but
mandated agency compliance with quality standards contained in the OMB Guidelines). To the
extent that CPSC's own guidelines are less stringent, they do not apply.
November 12, 2013
Page2
a/.
4
Mr. Zucker has suffered significant economic and reputations! injury due to CPSC's violation
ofthe IQA, the OMB Guidelines, and its own IQA guidelines, and as a consequence ofCPSC's
wrongful dissemination of the information that is the subject of this Petition. CPSC's information
quality violations and wrongful dissemination drove M&O, Mr. Zucker's former employer, out of
business. Therefore, Mr. Zucker is an "affected person" entitled to seek and obtain IQA correction.
II. SPECIFIC DESCRIPTION OF THE INFORMATION THAT IS THE SUBJECT OF THIS
PETITION.
A. The influential information that is the subject of this Petition includes the following
statements disseminated in an Aprill2, 2013 recall announcement:
1. These products contain defects in the design, warnings and
instructions, which pose a substantial risk of injury and death to children and
teenagers.
2. These retailers have agreed to participate because Maxfield &
Oberton has refused to participate in the recall of all Buckyballs and
Buckycubes.
3. In July 2012, CPSC staff filed an administrative complaint against
Maxfield & Oberton Holdings LLC, of New York, N.Y., after discussions with the
company and its representatives failed to result in a voluntary recall plan that CPSC
staff considered to be adequate to address the very serious hazard posed by these
products.
4. CPSC has received 54 reports of children and teens ingesting this
product, with 53 of these requiring medical interventions.
5
B. The influential disseminated information that is the subject of this Petition also
includes the following statement contained in a CPSC news release: "CPSC Sues Maxfield &
Oberton Over Hazardous Buckyballs and BuckycubeTM Desk Toys Action prompted by ongoing
hann to children from ingested magnets."
6
4
U.S. Consumer Prod. Safety Comm'n Docket 12-1 (consolidated).
5
Recall Announcement, U.S. Consumer Prod. Safety Comm'n, Six Retailers Announce Recall of
Buckyballs and Buckycubes High-Powered Magnet Sets Due to Ingestion Hazard (Apr. 12, 2013)
[hereinafter Recall Announcement], available at http://www.cpsc.gov/en/Recalls/2013/Six-
Retailers-Announce-Recall-of-Buckyballs-and-Buckycubes-Higb-Powered-Magnet-Sets/.
6
News Release, U.S. Consumer Prod. Safety Comm'n, CPSC Sues Maxfield & Oberton Over
Hazardous Buckyballs and Buckycube Desk Toys Action prompted by ongoing harm to
children from ingested magnets (July 25, 2012) [hereinafter News Release), available at
http://www .cpsc.gov/en/Newsroom/News-Releases/20 12/CPSC-Sues-Maxfield-Oberton-Ovcr-
Hazardous-Buckyballs-and-Buckycube-Desk-Toys-Action-prompted-by-ongoing-harm-to-cbildren-
from-ingested-magnets-/.
November 12,2013
Page3
III. GROUNDS FOR DISCLOSURE AND CORRECTION.
Background
The IQA provides, in relevant part, that OMB "shall ... provide policy and procedural
guidance to Federal agencies for ensuring and maximizing the quality, objectivity, utility, and
integrity of information (including statistical information) disseminated by Federal agencies," and
that agencies must "establish administrative mechanisms allowing affected persons to seek and
obtain correction of information maintained and disseminated by the agency that does not comply."
7
The law requires that CPSC disseminate only accurate and objective infonnation that is
supported by scientifically-sound data. It also requires the Commission to ensure that Mr. Zucker
and others have meaningful access to the data and methodological information needed to test and
reproduce CPSC's claims and assertions.
8
Information quality is a direct function of objectivity and reproducibility.
9
As the OMB
Guidelines make clear, the public's capacity to test objectivity and reproducibility depends entirely
upon the full and accurate disclosure of data and research methods.
10
According to CPSC:
Under the OMB information guidelines three aspects of quality must be considered:
utility, objectivity, and integrity. In addition, for influential data, higher standards of
transparency and reproducibility must be met. CPSC's guidelines use the definitions
ofthe key statutory terms such as 'information,' 'disseminate,' 'utility,' 'objectivity,'
'integrity; 'influential,' 'transparency,' and 'reproducibility' as defined in the OMB
guidelines.
11
The IQA bars CPSC and other federal agencies from disseminating inaccumte, imprecise,
unsupported. or misleading information, as it has done here. Correction is the congressionally-
mandated remedy. For the reasons set forth below, Mr. Zucker is entitled to such relief.
The Disseminated Influential Information of Concern
A. Influential information disseminated in the Aprill2, 2013 recall announcement:
12
7
44 U.S.C. 3516 Note.
8
OMB Guidelines III{2), (3), V(3), 67 Fed. Reg. 8459-60.
9
/d. at V(3), 67 Fed. Reg. 8459-60.
10
/d. at V(3)(a), 67 Fed. Reg. at 8455-58 (agency must identify sources of disseminated
information so public can assess for itself the objectivity of that information and have access to full,
accurate, transparent documentation and error sources affecting data quality).
11
IQA Guidelines, supra note 3.
12
See generally Recall Announcement, supra note 5.
November 12, 2013
Page4
1. "These products contain defects in the design, warnings and instructions,
which pose a substannal risk of injury and death to children and teenagers. "
Grounds for Disclosure/Correction: The claim that "defects in the design, warnings and instructions
... pose a substantial risk of injury and death" in the recall announcement, and on the CPSC
website, is the "dissemination" of''influential" scientific or statistical information because it (a)
concerns health and safety risks and (b) was designed to influence important private sector
decisions regarding the purchase and/or use ofthe subject products.
13
CPSC has wrongfully failed to define precisely the alleged ''defects," or to disclose the
performance standards needed for the design, warnings, and instructions to avoid being termed
such. Indeed, CPSC has an on-going administrative proceeding in which the very question of
whether these products contains a "product defect" is being adjudicated.
14
Until that adjudication is
complete, the question of whether these products contain any kind of "defect" bas not been decided,
and the unqualified statement to the contrary in CPSC's recall announcement is inaccurate.
Therefore, the "defect" claim fails the IQA 's utility test because, without objective performance
metrics against which the relevant design, warnings, and instructions may be tested, it is impossible
for the public to evaluate whether this information is useful or not. IS
Furthermore, the absence of such metrics means that CPSC fails the IQA 's presentation
objectivity test because it is impossible to determine whether its statement is accurate, clear,
complete, and unbiased, as the law commands.
16
CPSC's "substantial risk" claim is also a particularly egregious IQA "substance" objectivity
violation. The OMB Guidelines state:
'Objectivity' includes whether disseminated information is being presented in an
accurate, clear, complete, and unbiased manner. This involves whether the
information is presented within a proper context. Sometimes .... other information
must also be disseminated in order to ensure an accurate, clear, complete, and
unbiased presentation. Also, the agency needs to identify the sources of the
disseminated information ... and, in a scientific, financial, or statistical context, the
supporting data and models, so that the public can assess for itself whether there may
be some reason to question the objectivity of the sources. Where appropriate, data
should have full, accurate, transparent documentation, and error sources affecting
data quality should be identified and disclosed to users.
17
13
OMB Guidelines V(8),{9}, 67 Fed. Reg. 8460.
14
See In the Matter of Maxfield and Oberton Holdings. LLC, U.S. Consumer Prod. Safety Comm'n
Docket No. 12-1 (consolidated case).
IS /d. V(2}, 67 Fed. Reg. 8459.
16
Id at V(3)(a}, 67 Fed. Reg. 8459.
11/d
November 12, 2013
PageS
CPSC had a duty to provide "a high degree of transparency" about the data and methods that
it used to determine substantiality.
18
Yet, without some context, such as relative risk ratios, and
disclosure of its supporting data and models, CPSC's substantial risk claim cannot be evaluated for
accuracy or bias. Based on CPSC's own statistics, nursery equipment, toys, household cleaning
chemicals, single-load laundry packets, and trampolines are statistically far more dangerous to
children than Buckyballs and Buckycubes.
19
Even blankets cause a higher rate of
hospitalization and death.
20
Because CPSC fails to put the alleged risk posed by Buckyballs and Buckycubes in
context, and offers no metrics for measuring substantiality, it wrongfully denies Zucker and other
members of the public their right to test and reproduce the CPSC's findings and violates the IQA's
utility and objectivity tests.
21
Furthermore, because CPSC claimed the products in question posed "a substantial risk of
injury or death," it was required to apply the test contained in the Safe Drinking Water Act
Amendments.
22
This required CPSC to specify (a) each population addressed by any estimate of
risk; (b) the central estimate of risk for the specific populations affected; (c) each appropriate upper-
bound or lower-bound estimate of risk; (d) each significant uncertainty identified in the process of
risk assessment effects and the studies that would assist in resolving the uncertainty; and (e) peer-
reviewed studies known that support, are directly relevant to, or fail to support any estimate of risk
18
/d. at V(3)(b)(ii), 67 Fed. Reg. 8460.
19
See, e.g., infra note 20.
20
According to CPSC, "nursery equipment" causes injuries requiring emergency room treabnent at
the rate of 31.0 per 100,000 individuals in the population, and hospitalization or death at the rate of
1.7 per 100,000. U.S. CONSUMER PROD. SAFETY COMM'N, NATIONAL ELECTRONIC INJURY
SURVEILLANCE SYSTEM (NEISS) DATA HIGHLIGHTS- 2012 at 1, available at
http://www.cpsc.gov/Global/Neiss_prod/2012NeissDataHighlights.pdf (last visited Nov. 10, 2013)
(the ''NEISS Data Highlights"). "Toys" cause 78.5 injuries requiring emergency room visits per
100,000, and hospitalization or death at the rate of 2.2 per population of 1 00,000./d. CPSC has
never claimed that the injury rate for Buckyballs and Buckycubes even begins to approximate
these numbers, much less the numbers for "Sound recording equipment" {emergency room
treabnent at the rate of 12.4 per 100,000 population, and hospitalization or death at the rate of 1.1
per 100,000 population), "blankets" (emergency room treatment at the rate of 4.4 children per
100,000 population, and hospitalization and/or death at a rate of 0.4 children per 100,000
population}, or "Glass bottles and jars" {emergency room treabnent at the rate of 12.4 children per
100,000 population, and hospitalization and/or death at a rate of0.3 children per 100,000
population). /d. at 2-4.
21
OMB Guidelines V(2},(3), 67 Fed. Reg. 8459.
22
42 U.S.C. 300g-l(b)(3)(A)-(B); OMB Guidelines V(3)(b){ii)(C), 67 Fed. Reg. 8460.
Office ofthe Secretary
November 12,2013
Page6
and the methodology used to reconcile inconsistencies in the scientific data.
23
CPSC, however,
wrongly failed to do any of these things and violated the IQA's utility and objectivity tests.
24
ReQllested CPSC Action: Mr. Zucker requests that CPSC disclose the statistical and scientific
metrics used to determine that there were "defects" in the product design, warnings, and
instructions, and to determine substantiality with respect to the alleged risk.
Mr. Zucker also requests that CPSC clarify and disclose all of its statistical and scientific
bases that supposedly support its determination of, and provide context for, the claims of risk,
injury, and/or hazard "substantiality" it made relative to Buckyballs and Buckycubes.
Mr. Zucker also requests that CPSC replace the phrase "These products contain defects in
the design, warnings and instructions, which pose a substantial risk of injury and death to children
and teenagers" on CPSC website with the phrase, ''CPSC believes that the misuse of these products
by unsupervised children could, under certain circumstances, result in potential injury".
2. "These retailers have agreed to participate because Maxfield & Oberton has
refused to participate in the recall of all Buckybal/sJ and Buckycubes. "
Grounds for Disclosure/Correction: The claim that "These retailers have agreed to participate
because Maxfield & Oberton has refused to participate in the recall of all Buckyballs and
Buckycubese" in the recall announcement and on the CPSC website is the "dissemination" ofiQA
information.
25
It fails the IQA's quality test because it is inaccurate.
26
Maxfield & Oberton did not
"refuse to participate" but no longer exists and, therefore, cannot participate in any recall.
Requested CPSC Action: Mr. Zucker requests that the current statement, "These retailers have
agreed to participate because Maxfield & Oberton has refused to participate in the recall of all
Buckyballs and Buckycubes," be replaced by the statement, "These retailers have agreed to
participate because Maxfield & Oberton no longer exists and therefore cannot participate in a recall
of all Buckyballs and Buckycubes."
3. "In July 2012, CPSC staff filed an administrative complaint against Maxfield
& Obert on Holdings LLC, of New York, N.Y., after discussions with the
company and its representatives failed to result in a voluntary recall plan
that CPSC staff considered to be adequate to address the very serious hazard
posed by these products. "
Grounds for Disclosure/Correction: The claim that the subject products pose a "very serious
hazard" in the recall announcement and on the CPSC website is the "dissemination" of "influential"
23
67 Fed. Reg. 6458.
24
OMB Guidelines V(2),{3), 67 Fed. Reg. 8459-60.
25
/d. at V(S), 67 Fed. Reg. 8460.
26
/d. at V(3)(a) (stating that "disseminated information" must be presented "in an accurate, clear,
complete, and unbiased manner'').
November 12, 2013
Page7
scientific or statistical information, for it concerns health and safety risks and was designed to
influence important private sector decisions regarding the purchase and/or use of the subject
products.
27
However, CPSC has failed to define precisely what a "very serious hazard" is or provide
metrics so that Mr. Zucker and other members of the public may distinguish between a "very
serious hazard," a "serious hazard," a "moderate hazard," and no hazard at all. Therefore, CPSC's
the "very serious hazard" claim fails the lQA 's utility test, because without objective performance
metrics, it is impossible for the public to evaluate whether this information is useful or not.
28
Similarly, CPSC's failure to define the term "very serious hazard" in its own right and in a relative
sense violated its IQA "substance" objectivity obligations.
29
Furthermore, CPSC had a duty to provide "a high degree of transparency" about the data
and methods that it used to determine why the products here were determined to be a "very serious"
hazard.
30
Yet, without some context (such as relative risk ratios) and disclosure of its supporting
data and models, CPSC's "very serious hazard" claim cannot possibly be evaluated for accuracy or
bias and the claim fails the IQA 's "presentation" objectivity test. As noted in A(l) above, based
on CPSC's own statistics, there have been no deaths due to the misuse or ingestion of Buckyballs
and Buckycubes, and as noted in the NEISS Data Highlights supra, skateboarding, household
cleaning chemicals, single load laundry packets and trampolines (among other products) are
statistically far more dangerous. Without some appropriate context and definitional clarity, it is
impossible to determine whether CPSC's statement is accurate, clear, complete, and unbiased as the
law commands.
31
Furthermore, because CPSC claimed the products in question posed "a very serious hazard,"
it was required to apply the test contained in the Safe Drinking Water Act Amendments.
32
This
required CPSC to specify (a) each population addressed by any estimate of risk; (b) the central
estimate of risk for the specific populations affected; (c) each appropriate upper-bound or lower-
bound estimate of risk; (d) each significant uncertainty identified in the process of risk assessment
effects and the studies that would assist in resolving the uncertainty; and {e) peer-reviewed studies
known that support, are directly relevant to, or fail to support any estimate of risk and the
methodology used to reconcile inconsistencies in the scientific data.
33
CPSC, however, wrongly
failed to do any of these things and violated the IQA 's utility and objectivity tests.
34
27
!d. at V{8), (9), 67 Fed. Reg. 8460.
28
Jd. at V{2), 67 Fed. Reg. 8459.
29
Jd. at V(3){a), 67 Fed. Reg. 8459.
30
!d. at V{3)(bXii), 67 Fed. Reg. 8460.
31
Id at V{3)(a), 67 Fed. Reg. 8459.
32
42 U.S.C. 300g-l{b)(3XA) & (B); OMB Guidelines V{3)(b)(ii)(C}, 67 Fed. Reg. 8460.
33
67 Fed. Reg. 6458.
34
OMB Guidelines V(2},(3), 67 Fed. Reg. 8459-60.
November 12, 2013
PageS
Requested CPSC Action: Mr. Zucker requests that CPSC disclose the statistical and scientific
metrics used to determine that the subject products posed a "very serious hazard," rather than a
"serious hazard," a ''moderate hazard," a "hazard," or no hazard at all. CPSC had a duty to provide
the "high degree of transparency" needed to allow Mr. Zucker and other members of the public to
reproduce CPSC's findings, to determine whether its claims were accurate and unbiased, and/or to
assess CPSC's compliance with its IQA duties. It also had a duty to comply with IQA's health risk
assessment transparency and utility obligations. Without full disclosure, Mr. Zucker's ability to
assess its IQA compliance is frustrated.
Mr. Zucker also requests that the phrase "In July 2012, CPSC staff filed an administrative
complaint against Maxfield & Oberton Holdings LLC, of New York, N.Y., after discussions with
the company and its representatives failed to result in a voluntary recall plan that CPSC staff
considered to be adequate to address the very serious hazard posed by these products" be taken
down from the CPSC website and replaced with the following: "In July 2012, CPSC staff filed an
administrative complaint against Maxfield & Oberton Holdings LLC, ofNew York, N.Y., after
discussions with the company and its representatives failed to result in a voluntary recall plan that
CPSC staff considered to be adequate."
4. "CPSC has received 54 reports of children and teens ingesting this product,
with 53 of these requiring medical interventions."
Grounds for Disclosure/Correction: The claim that "CPSC has received 54 reports of children and
teens ingesting this product, with 53 of these requiring medical interventions" in the recall
announcement and on the CPSC website is the "dissemination" of influential information. Js This
claim fails the IQA 's quality test because it is inaccurate.
36
Review of the website
suggests that there are at least two ingestions that did not require medical
interventions.
3
Reauested CPSC Action: Mr. Zucker requests that the current statement "CPSC has received 54
reports of children and teens ingesting this product, with 53 of these requiring medical
interventions" be corrected to accurately report the data in CPSC's possession
B. Influential information disseminated in the July 25, 2012 news release, "CPSC Sues
Maxfield & Oberton Over Hazardous Buckyballs and Buckycubes Desk Toys Action prompted
by ongoing harm to children from ingested magnets."
38
Js ld at V(8), (9), 67 Fed. Reg. 8460.
36
/d. at V(3)(a) (stating that "disseminated information" must be presented "in an accurate, clear,
complete, and unbiased manner").
37
http:l/saferproducts.govNiewiDcident/1243200 (last visited Nov. 11, 2013);
bttp://saferproducts.govNiewlncident/1187028 (last visited Nov. 11, 2013).
38
News Release, supra note 6.
November 12, 2013
Page9
"CPSC Sues Maxfield & Oberton Over Hazardous Buckyballs and Buckycztbe Desk
Toys Action prompted by ongoing harm to children from ingested magnets."
Grounds for Disclosure/Correction: The claims that the subject products are "hazardous" and cause
"ongoing bann to children" in the recall announcement and on the CPSC website are the
"dissemination" of"influential" scientific or statistical information, for they concern health and
safety risks and were designed to influence important private sector decisions regarding the
purchase and/or use of the subject products.
39
CPSC has failed to define precisely what a "hazard" is or to provide metrics to evaluate the
bases for this designation. Therefore, the "hazard" claim fails the IQA's utility test because it is
currently impossible for the public to evaluate whether this information is useful or not.
40
Additionally, the lack ofmetrics means that the statement also fails the IQA's "presentation"
objectivity test, because it is now impossible to determine whether the claim is accurate, clear,
complete, and unbiased as the law commands.
41
Again, as noted supra, skateboarding, household
cleaning chemicals, single load laundry packets and trampolines are statistically far more
dangerous. Without the benefit of this contextual information with respect to risk and ''hazard,"
CPSC's claim is biased and violates the IQA.
The "Hazard" claim also violates CPSC's IQA "substance" objectivity obligations.
42
CPSC
had a duty to provide "a high degree of transparency" about the data and methods that it used to
determine why the products here were determined to be a "very serious" hazard.
43
Yet, without
some context (such as relative risk ratios) and disclosure of its supporting data and models, CPSC's
"hazard" claim cannot possibly be evaluated for accuracy or bias.
Furthermore, because CPSC claimed the products in question pose a "hazard," it was
required to apply the test contained in the Safe Drinking Water Act Amendments.
44
This required
CPSC to specify (a) each population addressed by any estimate of risk; (b) the central estimate of
risk for the specific populations affected; (c) each appropriate upper-bound or lower-bound estimate
of risk; (d) each significant uncertainty identified in the process of risk assessment effects and the
studies that would assist in resolving the uncertainty; and (e) peer-reviewed studies known that
support, are directly relevant to, or fail to support any estimate of risk and the methodology used to
39
/d. at V(8},(9), 67 Fed. Reg. 8460.
40
/d. at V(2), 67 Fed. Reg. 8459.
41
/d. at V(3)(a}, 67 Fed. Reg. 8459.
42/d.
43
Id. at V(3)(b)(ii), 67 Fed. Reg. 8460.
44
42 U.S.C. 300g-l(b}(3)(A) & (B); OMB Guidelines V(3}(b)(ii)(C), 67 Fed. Reg. 8460.
November 12, 2013
Page 10
reconcile inconsistencies in the scientific data.
45
CPSC, however, wrongly failed to do any of these
things and violated the IQA's utility and objectivity tests.
46
CPSC's "ongoing harm to children" claim fails the lQA's presentation quality test because it
is inaccurate.
47
There is no evidence of"ongoing harm to children" from the subject products.
Absent ingestion, which happens only in statistically insignificant circumstances, there is no harm
to children, much less "ongoing harm," resulting from Buckyballs, Buckycubes or any other
magnets. Also, without some definition of what an "ongoing harm to children" is, or bow the CPSC
defines "ongoing harm" in a given case, it is impossible to determine the utility, objectivity, and
reproducibility ofthis claim. Therefore, it fails the IQA's requirements.
48
The "ongoing harm to children" claim also violates CPSC's IQA "substance" objectivity
obligations.
49
CPSC had a duty to provide "a high degree of transparency" about the data and
methods that it used to determine that the products here pose such an "ongoing harm."
50
Yet, none
is provided, and absent full disclosure of its supporting data and models, CPSC's claim cannot
possibly be evaluated for accuracy or bias.
Furthermore, because CPSC claimed the products in question pose an "ongoing harm to
children," it was required to apply the test contained in the Safe Drinking Water Act
Amendments. 5
1
This required CPSC to specify (a) each population addressed by any estimate of
risk; (b) the central estimate of risk for the specific populations affected; (c) each appropriate upper-
bound or lower-bound estimate of risk; (d) each significant uncertainty identified in the process of
risk assessment effects and the studies that would assist in resolving the uncertainty; and (e) peer-
reviewed studies known that support, are directly relevant to, or fail to support any estimate of risk
and the methodology used to reconcile inconsistencies in the scientific data.
52
CPSC, however,
wrongly failed to do any of these things and violated the IQA 's utility and objectivity tests.
53
Reauested CPSC Action: Mr. Zucker requests that CPSC disclose the statistical and scientific
metrics used to determine that Buckyballs and Buckycubes pose an "ongoing harm to children"
and explain how CPSC determines what an "ongoing harm" is in any given case.
45
67 Fed. Reg. 6458.
46
OMB Guidelines V(2),(3), 67 Fed. Reg. 8459-60.
47
ld. at V(3)(a) (stating that "disseminated information" must be presented "in an accurate, clear,
complete, and unbiased manner'').
48
Jd at V(2),(3), 67 Fed. Reg. 8459.
49
Id at V(3)(a), 67 Fed. Reg. 8459.
50
Id at V(J)(b)(ii), 67 Fed. Reg. 8460.
51
42 U.S.C. 300g-l(b)(3)(A) & (B); OMB Guidelines V(3)(b)(ii)(C), 67 Fed. Reg. 8460.
52
67 Fed. Reg. 6458.
53
OMB Guidelines V(2),(3), 67 Fed. Reg. 8459-60.
November 12t 2013
Page 11
Mr. Zucker also requests that the phrase, "CPSC Sues Maxfield & Oberton Over Hazardous
Buckyballs and Buckycube Desk Toys Action prompted by ongoing harm to children from
ingested magnets," be taken down from the CPSC website and replaced with the following: "CPSC
Sues Maxfield & Oberton Over Buckyballs and Buckycubes Desk Toys."
If you have any questions about this request, please contact me by email at
reed.rubinstein@causeofaction.org, or by telephone at (202) 499-4232. Thank you for your
attention to this matter.
Sincerely,
REED D. RUBINSTEIN
SENIOR VICE PRESIDENT, LITIGATION
CAUSE
' or ACTION
Advocate for GovammmtAc:countablllty
A 501(c)(3) Nonprofit Corpor.rtion
April 14, 2014
VIA FAX AND CERTIFIED MAIL
Mr. Elliot F. Kaye
Executive Director
Consumer Product Safety Commission
Room 720
Bethesda, MD 20814-4408
(301) 504-0461 (fax)
RE: Information Quality Act Appeal
Dear Mr. Kaye:
On November 12, 2013, Cause of Action (COA), on behalf of its client, Craig Zucker
(Mr. Zucker), submitted to the U.S. Consumer Product Safety Commission (CPSC) a Petition for
Disclosure and Correction pursuant to the Information Quality Act (IQA).
1
The Petition
concerns information disseminated by CPSC about Buckyballs and Buckycubes in a press
release dated July 25, 2012, as well as in an Aprill2, 2013 press release and recall notice.
2
CPSC's IQA guidelines state CPSC will "respond to [a] request for correction of information
within 60 calendar days of receipt of the request."
3
On January 10, 2014, CPSC claimed
"resource constraints" prevented it from meeting this 60-day response deadline. CPSC notified
Cause of Action that it required more time to resolve the Petition and "estimate[ d) that it [would]
1
Letter !Tom Cause of Action to Office of the Secretary, U.S. Consumer Prod. Safety Comm'n (Nov. 12, 2013)
(hereinafter Petition) (attached as Exhibit I).
l Press Release, U.S. Consumer Prod. Safety Comm'n, CPSC Sues Maxfield & Oberton Over Hazardous
Buckyballs and BuckycubeTM Desk Toys Action Prompted by ongoing harm to children from ingested magnets
(July 25, 20 12) (hereinafter 2012 Press Release), aYai/able at http:l/www.cpsc.gov/en/Newsroom/News
Releases/20 12/CPSC-Sues-Maxfield-Oberton-Over-Hazardous-Buckyballs-and-Buckycube-Desk-Toys-Action-
prompted-by-ongoing-harm-to-children-from-ingested-magnets-/ and Press Release, U.S. Consumer Prod. Safety
Comm'n, Six Retailers Announce Recall of Buckyballs and Buckycubes High-Powered Magnet Sets Due to
Ingestion Hazard (Apr. 12, 2013) (hereinafter 2013 Press Release), (IIJai/able at
http:ltwww.cpsc.gov/en/Recalls/2013/Six-Retailers-Announce-RecallofBuckyballsand-Buckycubes-High
Powered-Magnet-Sets/.
3
Information Quality Guidelines, U.S. CONSUMER PROD. SAFETY COMM'N, http:l/www.cpsc.gov/Research-
Statistics/lnformationQualityGuidelines (last visited April\0, 20 14) (hereinafter CPSC Guidelines). OMB
Guidelines set the minimum information quality standards that CPSC must meet in this case. Pursuant to 44 U.S.C.
3516 Note, Congress allowed agencies to create review and correction mechanisms for OMB approval, but
mandated agency compliance with quality standards contained in the OMB guidelines. See OMB Guidelines 67 Fed.
Reg. 8452, 8458 (Feb. 22, 2002) (instructing agencies to establish an administrative appeal process).
Mr. Elliott F. Kaye
Aprill4, 2014
Page2
resolve ... [the] request on or before March 13, 2014." On March 13,2014, CPSC denied the
Petition.'
1
For the reasons set forth below, Mr. Zucker hereby appeals CPSC's denial.
5
ARGUMENT
I. THE PRESS RELEASES ARE NOT EXEMPT FROM IQA REQUIREMENTS.
CPSC's centml contention is that the information at issue pertains to an ongoing
"adjudicative proceeding" and therefore is exempt from IQA requirements. That argument fails.
First, the IQA exemptions contained within OMB and CPSC guidelines are ultra vires.
OMB's guidelines implement section 3504(dXl) of the Paperwork Reduction Act (PR.A).
6
This
section requires that "with respect to information dissemination, the [OMB] director shall
develop and oversee the implementation of policies, principles, standards and guidelines to apply
to federal agency dissemination of public information, regardless of the form or format in which
such information is disseminated ... "
7
All federal agencies subject to the PRA must comply with
these guidelines.
8
The PRA's legislative history states that "the legislation's policies and
required practices apply to the dissemination of all Government information regardless of form
fi
,9
or ormat ...
Other parts of the statutory text and legislative history make clear that any information
disseminated to the public is covered. For example, the House Report states as follows:
The concept of 'public information is fundamental to the information
dissemination provisions ofH.R. 830. The objective of the definition is to
minimize disputes over what government information is subject to dissemination.
The definition turns on an easily made factual determination rather than a
complex one. 'Public information' is information that an agency has in fact made
public.
10
Furthermore, the PRA's Information Dissemination Requirements contain no statutory
exemptions.
11
By contrast, several exemptions exist from the PRA 's separate Collection of
Information Requirements.
12
Surely if Congress had intended to create exemptions from the
information dissemination requirements, it would have done so expressly, as it did elsewhere in
4
Letter from George A. Bor1ase, Office of Hazard 1denlification and Reduction, U.S. Consumer Prod. Safety
Comm'n, to Cause of Action (March 13, 2014) (hereinafter CPSC Denial] (attached as Exhibit 2).
5
This appeal is timely, as it has been made wilhin thirty days of CPSC's response.
6
44 U.S.C. 3516 Note.
7
/d. 3504(d)( I).
1
/d. 3506(a)(I)(B), 3516 note.
9
H. Rep. No. 10437, at 27 (Feb. 15, 1995) ("House Report") (statement made in section entitled "1nfonnation
Dissemination") (emphasis added).
10
/d. at 107, 109.
11
44 U.S.C. 3502(12), 3504(d)(l), 3516 note.
~ /d. 3502(3)(8), 3518(c)(l ).

Mr. Elliott F. Kaye
Aprill4, 2014
Page3
the statute. All of this taken together indicates that OMB exceeded its authority in establishing
exemptions from its IQA guidelines, including the exemption for "adjudicative processes."
Second, even if OMB has discretion to create exemptions from IQA requirements, those
exemptions do not apply here. OMB Guidelines do exempt "adjudicative processes."
13
The
information at issue, however, does not fall within that rubric. The preamble to the OMB
Guidelines provides that "[t]he exemption . .. for 'adjudicative processes' is intended to exclude
... the findings and determinations that an agency makes in the course of adjudications
involving specific parties."
14
Neither press release consists of findings and determinations made
"in the course of adjudications involving specific parties." For example, the 2012 Press Release
announced CPSC's filing of an administrative complaint against Maxfield & Oberton (M&O).
By definition, the information contained therein could not have been developed "in the course of
adjudications involving specific parties." Similarly, the 2013 Press Release addresses CPSC
action that was incidental to, but not a part of, an adjudicative proceeding and makes factual
assertions that were anything but "findings and determinations that [CPSC made] in the course of
adjudications" with M&O or any other party. The mere fact that the press release mentions the
M&O complaint and includes a web site link to it does not transform its contents into "findings
and determinations made in the course of an adjudication" or shield CPSC from its information
quality obligations.
15
Third, OMB Guidelines set the irreducible minimum standards for CPSC's information
quality. The IQA says OMS's Guidelines "shall apply" to federal agencies. The Guidelines
themselves, promulgated through notice and comment, explicitly bind all such agencies.
16
Therefore, CPSC may not use its own Guidelines as a trap door to escape information quality
requirements. Pushing back against bureaucratic discretion grabs OMB said:
We note ... that a number of agencies emphasize that their guidelines are not
intended to provide any right to judicial review. A few agencies even stress .. . that the
agency may be free to differ from the guidelines where the agency considers such action
appropriate.
Regardless ... agency guidelines should not suggest that agencies are free to
disregard their own guidelines. Therefore ... we ask that you not include extraneous
assertions that appear to suggest that the OMB and agency guidelines are not statements
13
OMB Guidelines V.8, 67 Fed. Reg. 8452, 8460 (defining "Dissemination").
14
!d. at 8452.
15
lfCPSC stands by its claim that the press release slalements challenged here are in fact "findings and
determinations that an agency makes in the course of adjudications involving specific parties," then it necessarily
concedes that the ongoing administrative case is a predetermined sham. The challenged statements, after all, include
claims that Buckyballs and Buckycubes "contain defects in the design, warnings and instrUctions, which pose a
substantial risk of injury and death to children and teenagers" and that these products were proven to be hazardous
and cause "ongoing harm to children." The challenged statements include claims of risk and defect that, in theory,
are still being litigated and so, unless CPSC has already made up its mind, and prejudged the outcome of the
administrative proceeding, there cannot be any IQA-exempt "findings and determinations" in these documents.
16
See 67 Fed. Reg. at 845253.
Mr. Elliott F. Kaye
April14, 2014
Page4
of government-wide policy, i.e., government-wide quality statements which an agency is
free to ignore based on unspecified circumstances. In addition, agencies should be aware
that their statements regarding judicial enforceability might not be controlling ... ,
11
Simply, CPSC has no choice in the matter: It must comply with the OMB Guidelines and its
failure to do so is judicially reviewable.
II. THE PRESS RELEASES FAIL IQA REQUIREMENTS.
CPSC contends that the press releases meet IQA requirements because they "state
accurately staff's position that Buckyballs and Buckycubes are defective and hazardous."
18
But the releases do not merely state staff positions. The 2013 Press Release states that
Buckyballs and Buckycubes "contain defects in the design, warnings and instructions, which
pose a substantial risk of injury and death to children and teenagers. "
19
This statement might
very well reflect CPSC's opinion about those products, but the language employed does not
explicitly or implicitly convey that the statements made are simply staff opinions, nor does
CPSC provide the requisite context, transparency and support needed by the public to evaluate
those claims. To the contrary, CPSC presents its claims of"defects" and "substantial risk" as
facts. OMB guidelines mandate that "disseminated information is ... presented in an accurate,
clear, complete, and unbiased manner."
20
Therefore, the 2013 Press Release fails to meet this
standard.
The 2012 Press Release is also woefully deficient. The headline states "CPSC Sues
Maxfield & Oberton Over Hazardous Buckyballs and Buckycubes Desk Toys Action (sic)
prompted by ongoing harm to children from ingested magnets." It is an uncontested fact that
CPSC sued M&O with respect to Buckyballs and Buckycubes. But the clear implication of
this statement is that the products were proven to be hazardous and that "ongoing harm to
children" was a fact. However, these "facts" were mere unproven allegations.
Further, the information contained in the 2012 Press Release was not presented "within a
proper context" as CPSC asserts.
21
CPSC failed to define what a "hazard" is or to provide any
metrics by which the public the "quality, objectivity, utility, [or] integrity" of that
assertion, as the IQA demands. Accordingly, COA requested the disclosure of information
from CPSC about the data and methods used to make its "hazardous" determination so that Mr.
Zucker could engage a qualified third party to reproduce CPSC's findings -- a request that CPSC
17
Memorandum, "OIRA Review oflnformation Quality Guidelines Drafted by Agencies" at 14-15 (June 10,
2002)( emphasis added), available at http:/!www. whitehouse.govlsiles/defaultlfileslomblin roregliqg_comments.pdf
(accessed Feb. 7,2014).
15
CPSC Denial at 2.
19
2013 Press Release, s11pra note 2.
20
OMB Guidelines V.3(a), 67 Fed. Reg. &452, &459.
21
CPSC Denial at 2.
22
44 U.S.C. 3516 Note.
Mr. Elliott F. Kaye
April14, 2014
PageS
has improperly denied. Not only did CPSC fail to address COA's request for disclosure, it
entirely ignored it in its denial letter.
As for CPSC's claim that Buckyballs and Buckycubes presented an "ongoing harm to
children," the agency has not presented any evidence of harm to children except for a statistically
insignificant nwnber of accidental ingestion incidents. Further, CPSC has failed to provide any
context for the relative risk ratios about this ingestion risk. Absent such context, CPSC's claim
that Buckyballs and Buckycubes present an "ongoing harm to children" fails the utility,
objectivity, and reproducibility requirements.
Ill. CPSC'sLEGAL THEORIES ARE IRRELEVANT.
CPSC claims that Mr. Zucker's Petition seeks correction of legal theories or responses to
legal questions.
23
This is simply not the case. Mr. Zucker has requested disclosure of data
underlying CPSC's conclusions, not CPSC's legal analysis of that data. Furthermore, CPSC
claims that to the extent metrics or data exist, "they are found in the CPSA and Commission
regulations."
24
But those regulations do not contain any metrics or data relevant to Buckyballs
or Buckycubes. No metrics or data for the legal definition of defect or hazard exist in the
statute or CPSC regulations, nor is that what Mr. Zucker has requested. Instead, he has sought
the data underlying CPSC's press releases in order to be able to evaluate and test the accuracy
and integrity of those statements.
IV. MR. ZUCKER Is AN IQA AFFECTED PERSON.
Without citing any authority, CPSC suggests that Mr. Zucker might not qualify as an IQA
"affected person."
25
In fact, Mr. Zucker has unquestionably been adversely affected by the
influential information disseminated by CPSC. For example, the 2012 Press Release
contributed to driving M&O out of business, as noted in the Petition,
26
and CPSC continues to
pursue Mr. Zucker personally for its claims against M&O through the use of a novel and
disputed legal theory. Additionally, the 2013 Press Release contains biased and inaccurate
statements that have affected both Mr. Zucker's reputation and his financial status.
V. THE INFORMATION AT ISSUE HERE IS INFLUENTIAL.
CPSC suggests that only technical reports related to engineering, health science, or
hazard analysis can qualify as influential information. However, OMB guidelines state that
influential information "means that the agency can reasonably determine that dissemination of
the information will have or does have a clear and substantial impact on important public
policies or important private sector decisions. Each agency is authorized to define 'influential'
23
CPSC Denial al 2.
H /d.
35
/d. at 3.
26
Pelition at 2.
Mr. Elliott F. Kaye
Aprill4, 2014
Page6
in ways approfriate for it given the nature and multiplicity of issues for which the agency is
responsible."
2
CPSC's guidelines, in tum, affirm the OMB's definition and further note that
"technical reports related to engineering, health science or hazard analysis issues potentially have
impacts on important public policies and private sector decisions ... Therefore, CPSC's
information in these reports should be highly transparent and capable of being reproduced by
qualified persons."
28
In CPSC's view, this language means that only such information can
possibly be considered influential. But the CPSC guidelines merely point out that these types of
technical reports are likely influential. This does not preclude any other information from also
qualifying as influential.
The information at issue here is certainly "influential" for IQA purposes. For example,
the 2013 Press Release's claim that "defects in the design, warnings and instructions ... pose a
substantial risk of injury and death to children and teenagers" is influential because it concerns
health and safety risks and was designed to influence important private sector decisions
regarding the purchase and/or use of the subject products.
29
CPSC's claim that Buckyballs and
Buckycubes pose a "very serious hazard" is influential because it concerns health and safety
risks and was designed to influence important private sector decisions regarding the purchase
and/or use of the subject products. CPSC's assertion that it "has received 54 reports of children
and teens ingesting this product, with 53 of these requiring medical interventions" is influential
because it concerns health and safety risks and was designed to influence important private
sector decisions regarding the purchase and/or use of the subject products. Finally, CPSC's
claim in the 2012 Press Release that Buckyballs and Buckycubcs were "hazardous" and
cause "ongoing harm to children" is influential because it concerns health and safety risks and
was designed to influence important private sector decisions regarding the purchase and/or use of
the subject products. Even under CPSC's erroneous reading of its guidelines the information
here remains influential because the data and metrics that underlie the statements being
challenged are presumably contained in technical reports relating to hazard analysis issues-- the
very type of information specifically referenced in the guidelines.
For all of these reasons, and as set forth in the original Petition, CPSC ought to make the
requested disclosures and corrections. Please direct all communications regarding this appeal to
me by email at reed.rubinstein@causeofaction.org or by phone at 202-499-4232. Thank you for
your attention to this matter.
l
7
OMB Guidelines V .8, 67 Fed. Reg. 8452, 8460.
21
CPSC Guidelines, supra note 3.
29
2013 Press Release, supra note 2.
Sincerely,
R u d 1 2 ~
REED D. RUBINSTEIN
SENIOR VICE PRESIDENT, LITIGATION
EXHIBITP
From:
Sent:
To:
Subject:
Marketing genius. Period.
Page 117 of 152
Midgett, Jonathan <JMidgett@cpsc.gov>
Thursday. December 13, 2012 4:04 PM
Smith, Gary; nancy@kidsindanger.org; 'Rachel Weintraub'
RE: Sl0/$15 Buckyballs Deal Extended and Meet Flint & Tinder
From: Smith, Gary [mailto:Garv.Smjth@natjoowjdechildrens.org)
Sent: Thursday, December 13, 2012.3:32 PM
To: nancy@kidsindanger.org: 'Rachel Weintraub'; Midgett, Jonathan
Subjec:t: FW: $10/$15 Buckyballs Deal Extended and Meet Aint & Tinder
I wonder 1f Zucker sells w1th drowstrings??
From: Craig Zucker [mailto:cz-
0
etbuckvbalis.com@mail4l.us4.mcsy.net] On Behalf Of Craig Zucker
Sent: Thursday, December 13, 2012 12:20 PM
To: Smith, Gary
Subject: $10/$15 Buckyballs Deal Extended and Meet Flint & Tinder
Hi Gary A:
Two things (real quick) ..
1. We've extended our 12-12-12 Sale through the end of today at getbuckyballs com
$10 for ALL 125 sets of Balls and Cubes (promocode: Buck125)
$15 for ALL 216 sets of Balls and Cubes (promocode: Buck216)
2. Every day I get a bunch of emails asking how to support our company in our final days. Buymg Buckyballs helps A
LOT and we thank you. but here's something else.
About six months ago, the other Buckyballs founder started a company called Flint & Tinder to manufacture men's
underwear in America. He's doing something pretty cool (while also helping to create a bunch or jobs in the USA) and
wanted to offer Buckyballs fans 20% off through Friday, 12-14. Please lake a minute to check it out and use promocode
"CoverYour8alls" for 20% Off at FlinlandTinderUSA.com.
Thank you again for your continued support.
Besl,
Craig Zucker
CEO, Maxfield & Oberton
'"''l'iiL:ili:J v.1lld :l:h'pu :.!ll'.
;:.n:\ :.u.:n,t ' hP .'JPf'tlitd Ill pr'."i'l'l:l H ...,j .,
. i : ta.n I t-.i a I

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EXHIBIT A

~ /d. 3502(3)(8), 3518(c)(l ).

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