Keep It in "Park": How The CPSC Is Stretching The Responsible Corporate Officer Doctrine Beyond The Breaking Point

Keep it in Park: How the CPSC is Stretching the
Responsible Corporate Ofcer Doctrine Beyond the Breaking Point

Craig Zucker v. CPSC, No. 13-3355 (D. Md. fled Nov. 12, 2013)
On February 11, 2013, the Consumer Product Safety Commis-
sion (CPSC) changed the rules when it named Craig Zuckerin his
personal capacityas part of a potential $57 million product recall.
Even the CPSC admits that Mr. Zucker has broken no law and the
CPSC is not trying to pierce the corporate veil. Nevertheless, the
CPSC wants Mr. Zucker to pay for a recall of Buckyballs, a product
his company Maxfeld & Oberton used to sell.
Buckyballs are an executive desk toy made of small, powerful
magnets that can be formed into innumerable shapes. In 2011,
People Magazine listed them among the fve hottest trends of the year.
Tey are completely safe when used as intended, but like many
products, can be dangerous if misused. Afer a small number of
high-profle cases of the magnets being swallowed, the CPSC
deviated from its normal recall procedure and wrote a letter to
Buckyballs retailers, urging them to stop selling the product. Te
stores complied and Maxfeld & Oberton quickly shut down.
Not satisfed with putting his company out of business, the CPSC targeted Mr. Zucker, while allowing
nearly identical products made by his competitors to remain on the market.
Te CPSC is making an unprecedented power grab by trying force an individual to pay for a recall.
Never before in its 42-year history has the CPSC attempted to bypass a company and make an
individual pay for a recall. Te CPSCs legal theory distorts the Park doctrine, which allows a corporate
ofcer to be held responsible for criminal actions that he commits through his company.
Neither Mr. Zucker nor his company has committed
any crime. Moreover, it is still legal to make and sell
Buckyballs.
On November 12, 2013, Mr. Zucker, through Cause
of Action, sued the CPSC in federal court to stop this
unprecedented regulatory overreach.
BRIEFING BOOK
Disregarding the corporate form by going afer business owners in
their personal capacity hurts entrepreneurs and chills investment.
American law encourages people to become entrepreneurs and
invest in companies by separating the personal and the corporate
protecting people from fnancial ruin if their businesses do not
succeed. Protecting business owners and investors from a companys
liabilities is a foundational pillar of corporate law. It is so important
that individuals are held personally liable in only rare instances, such
as when a corporate ofcer knowingly commits a crime through the
company or an individual uses his business as a front for personal
activities. Te CPSC does not allege that Mr. Zucker committed a
crime or disrespected his companys corporate form.
Te CPSC is retaliating against Craig Zucker for fghting back.
While his product was on the market, Mr. Zuckers company
worked hand-in-hand with the CPSC to ensure proper product warn-
ings and safety programs were in place. In fact, the CPSC not only
approved the Buckyballs safety program, but awarded the programs
designer a Circle of Commendation Award in 2013 for her signifcant,
lifesaving contributions to consumer product safety. But Mr. Zuckers
willing cooperation apparently was not good enough for the CPSC.
When Mr. Zucker learned the CPSC intended to shut down his
business, he started to speak out. He launched a website to educate his
customers and other small businesses about what the CPSC was doing
to him. He used humor and levity to try to cut through the bureau-
cratic confusion and to educate the public. In response, the CPSC
lashed out and named him personally liable in the proceeding against
his company. Tis is what happens when bureaucrats have too much
power and dislike what private citizens are saying about them.
Te CPSC is
saying that
because as CEO
I did my duty
didnt violate any
law, was
completely
lawfulI am
now the
manufacturer
individually
responsible to
conduct the
recall.
Craig Zucker
Case Files and Attachments
Craig Zucker APA Complaint against CPSC........................................................3
U.S. Chamber of Commerce Amicus Brief in Zucker v. CPSC.........................24
Top Law Firms Track Important Issue.................................................................38
Washington Legal Foundation: CPSCs Misuse of RCO Doctrine Bodes Ill
for CEOs and Consumers...................................................................................41
CPSC Stonewalls: Cause of Action Sues under FOIA.......................................45
Information Quality Act Petition for Correction and Disclosure...................52
CPSC Gives Safety Award to Designer of Buckyballs Safety Program...........63
CPSC Confrms Buckyballs are Still Legal to Sell..............................................65
United We Ball: Zucker Uses Humor to Expose Overreach.............................67
Former CPSC Commissioner Nancy Nord in Te Wall Street Journal:
Te Irrational Federal War on Buckyballs........................................................73
Zucker v. CPSC, Briefng Book Page 3
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Greenbelt Division
________________________________________________
CRAIG ZUCKER, )
Brooklyn, NY 11211 )
Kings County, )
Plaintiff, )
)
v. )
) Case No._______________
UNITED STATES CONSUMER PRODUCT )
SAFETY COMMISSION )
4330 East West Highway )
Bethesda, MD 20814 )
Montgomery County, )
)
and )
)
INEZ MOORE TENENBAUM, )
CHAIRMAN OF THE UNITED STATES )
CONSUMER PRODUCT SAFETY COMMISSION )
(official capacity), )
Montgomery County, )
)
Defendants. )
)
COMPLAINT
Plaintiff Craig Zucker (Mr. Zucker), through his counsel CAUSE OF ACTION, INC., a
501(c)(3) government accountability organization, files this complaint for declaratory and injunctive
relief against the United States Consumer Product Safety Commission (CPSC) and Inez Moore
Tenenbaum (Tenenbaum), in her official capacity as Chairman of the CPSC.
1
Case 8:13-cv-03355-DKC Document 1 Filed 11/12/13 Page 1 of 21
Nature of the Case
1. 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 now seeks to recall and ban.
2. After driving M&O out of business, CPSC has thrown its full weight against Mr. Zucker,
adding him as a respondent to an administrative adjudication seeking to require him personally to
conduct a CPSC-estimated $57 million recall of M&Os Buckyballs and Buckycubes.
3. Mr. Zucker asks this Court to find that CPSC overreached its limited statutory authority
to bring an administrative remedial action against a manufacturer, distributor, or retailer when it
ignored M&Os form as a limited liability company, amended the administrative complaint against
M&O to proceed against Mr. Zucker personally and wrongfully subjecting him to the CPSCs
adjudicative authority.
4. Mr. Zucker further asks this Court to find that CPSC singled him out for selective
administrative adjudication to deter him and other corporate officers from exercising their freedom of
speech and their right to petition government officials for redress, and/or wrongly predetermined the
outcome of the administrative adjudicatory process, all in violation of the First and Fifth Amendments of
the United States Constitution.
Parties
5. Mr. Zucker is an individual who resides in the State of New York. He is the former
General Manager of M&O.
6. CPSC is an independent regulatory commission of the United States established by the
Consumer Product Safety Act (CPSA), 15 U.S.C. 2051 et seq. It has an office and does business
2
at 4330 East West Highway, Bethesda, Maryland, 20814. CPSCs office is located in Montgomery
County.
7. Inez Tenenbaum is CPSCs Chairman and she is named in her official capacity. She also
has an office and does business at 4330 East West Highway, Bethesda, Maryland, 20814. Her office is
also located in Montgomery County.
Jurisdiction and Venue
8. This Court has jurisdiction under 28 U.S.C. 1331 and 5 U.S.C. 701-706.
9. Venue in this District is proper under 28 U.S.C. 1391(b), (e).
10. The Commissions authority to proceed administratively against Mr. Zucker, and its
constitutional violations, are properly before this court.
Facts
A. The Rise Of Buckyballs And Buckycubes.
11. Mr. Zucker and a friend formed M&O as a Delaware limited liability company in March
2009 by filing a Certificate of Formation with the Division of Corporations of the Delaware Secretary of
State.
12. Its business was to import and sell what soon became one of the most popular adult
executive desk toys on the market, Buckyballs.
13. 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 the
Buckyballs into different shapes and patterns is an entertaining way to relieve stress and exercise the
mind.
3
14. From March to October, 2009, M&O sold Buckyballs online on approximately three
websites that predominantly featured products for adults, not children.
15. Starting in October, 2009, it began selling Buckyballs to gift shops, bookstores,
stationery stores, museum shops, and other brick-and-mortar retailers.
16. Before long, M&O had a distribution network of approximately 5,000 stores.
17. Buckyballs were an instant top-seller. In 2011, People Magazine called Buckyballs
one of the five hottest trends of the year. In 2012, they appeared on the cover of the Brookstone catalog.
M&O was an overwhelming success story.
18. Buckyballs are completely safe when used as intended.
19. Like many other products, they may cause harm if ingested.
20. For this reason, M&O never marketed its products toward children.
21. When it started selling Buckyballs to retailers, M&O labeled its products with a
prominent warning:
Warning: Not intended for children. Swallowing of magnets may cause
serious injury and require immediate medical care. Ages 13+.
22. M&O initially marketed its products for ages 13+ because the Consumer Product Safety
Improvement Act of 2008 defined a childrens toy as a consumer product designed or intended by the
manufacturer for a child 12 years of age or younger for use by the child when the child plays. 15 U.S.C.
2057c(g)(B); see also 15 U.S.C. 2052(a)(2) (defining childrens product).
23. The age designation made it clear that Buckyballs were not childrens toys.
24. In 2009, the Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314,
122 Stat. 3016 (2008)(CPSIA) made a voluntary toy standard, ASTM F963, a mandatory toy standard
4
enforced by CPSC. The now mandatory ASTM toy standard defined a toy as any object designed,
manufactured, or marketed as a plaything for children under age 14.
25. Although M&O did not believe or admit either that Buckyballs were CPSIA toys or
that they violated any legally applicable safety standards, M&O changed the label age grading from 13+
to 14+ and worked with CPSC, which was then largely supportive of M&Os safety efforts, to conduct a
voluntary recall of all products labeled 13+ solely to make it crystal clear that these were not intended
for children.
26. M&O then went even further to create a comprehensive safety program to make it clear
to everyone that its products should not fall into childrens hands. The program included:
a. Changing the warning to say Keep Away From All Children and adding
language to explain the exact hazard of swallowing multiple magnets;
b. Including four warnings on the packaging and carrying case and one in the
instructions for use;
c. Developing a Responsible Seller Agreement to ensure that the products would not
be sold in stores that sold childrens products exclusively and a Responsible Sellers Notice to
inform retailers who sold both childrens and adult products to sell Buckyballs only in sections
with other products intended for adults, conducting compliance checks, and removing retailers
that did not meet the requirements of the new program;
d. Sending retailers new signage with the warnings for use in displays; and
e. Including Responsible Seller Notices with every shipment of Buckyballs.
27. CPSC approved M&Os comprehensive safety program in May, 2010.
5
28. M&O then added to its product offerings Buckycubes, small magnetic cubes that M&O
marketed and sold using the same safety program developed for Buckyballs.
29. Buckyballs, Buckycubes, and offshoots like Buckyballs Chromatics (colored
Buckyballs) comprised approximately 95% of what M&O sold. The companys very existence
depended on its ability to continue to sell these products.
30. In furtherance of its safety program, M&O wrote to all of its retailers in September, 2011,
reminding them not to sell to children under the age of 14 or to adults buying them for children under
the age of 14.
31. In November, 2011, M&O joined with CPSC in a joint press release and video news
release that reinforced the importance of keeping the products away from children and the potential
consequences of misuse.
32. When the video was filmed, Defendant Tenenbaum commended M&O on its safety
program.
33. In March, 2012, M&O developed a new website, www.magnetsafety.com, and created a
safety video that was shown both on the new website and on M&Os main website to raise awareness
and educate parents, educators, retailers, and medical professionals about the risks of letting high-
powered magnets get into the hands of children.
34. That month, M&O also created new signage, further explaining why Buckyballs and
Buckycubes were not for children. M&O sent this signage to every retailer selling its products with a
request that it be clipped to the in-store display.
6
35. In April, 2012, M&O representatives met with CPSC commissioners and staff to educate
them about its expanded safety program and to express concern about other manufacturers who were
marketing similar products inappropriately.
36. The commissioners and staff offered suggestions and again commended M&O on its
safety program.
37. Following that meeting, acting in part on recommendations from CPSC and in part on its
own initiative, M&O expanded its safety program by:
a. Forming a medical advisory group of physicians specializing in pediatric and
emergency medicine and toxicology and developing a diagnosis and treatment service
announcement for medical professionals to help educate them how to recognize and treat magnet
ingestion;
b. Bringing together competing companies to create an industry group called the
Coalition for Magnet Safety, with the mission to protect the public through responsible labeling,
promotion, distribution, and sales of high powered, rare earth magnets intended for adult use;
c. Petitioning ASTM International to develop a voluntary standard for the labeling
and marketing of magnet products.
B. The Demise Of Buckyballs And Buckycubes.
38. On July 10, 2012, everything changed.
39. 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 CPSCs Office
of Compliance issued a preliminary determination that M&Os products were defective and that its
safety program would not work.
7
40. M&O responded, expressing its strong disagreement, but CPSC paid it no heed.
41. Instead, CPSC initiated an all-out effort to shut down M&O.
42. CPSC immediately began contacting many of M&Os major retailers, telling them that
Buckyballs and Buckycubes were unsafe and requesting them to stop selling the products.
43. M&Os retailers almost unanimously caved in to the governments pressure and
intimidation.
44. In a last-ditch effort to regain CPSCs favor and to save its business, M&O submitted a
voluntary Corrective Action Plan proposing even further expansions to its safety program, including a
child-resistant carrying case, possibly a bittering agent, enhanced warnings, additional retail signs, and
programs to further public awareness.
45. CPSC received the plan at 4:00 p.m. on July 24, 2012.
46. On information and belief, CPSC never read that plan.
47. Instead, at 11:00 a.m. on the next day, July 25, 2012, the CPSCs executive director
notified M&Os lawyer that CPSC had filed an administrative complaint against M&O, 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.
48. That proceeding is In the Matter of Maxfield and Oberton Holdings, LLC, CPSC Docket
No. 12-1 (the CPSC Proceeding), and has since been consolidated with CPSC Docket Nos. 12-2 and
12-3, which are similar complaints against importers of similar products. In this on-going administrative
proceeding, the very question of whether M&Os products are defective or hazardous is being
adjudicated.
8
49. In connection with the filing of the complaint, and before M&O ever had a chance to
defend itself, CPSC issued a press release and launched a media campaign announcing that it sued M&O
[i]n an effort to prevent children from suffering further harm .
50. At all times relevant, CPSC knew the risk of harm to children from M&Os products was
statistically insignificant and, relatively speaking, much less than the risk posed by common household
cleaning chemicals, laundry pods or playground equipment.
51. But CPSCs mind was made up, the facts did not matter, and so the full weight of the
government came down on a company that was, at all times, in compliance with the law.
52. CPSCs general counsel admitted that it was not a violation of law to sell M&Os
products. See Ex. 1 Letter from CPSC General Counsel Cheryl A. Falvey to Alan H. Schoem, Esq. (July
20, 2012).
53. Nevertheless, CPSC pressured retailers to stop selling Buckyballs and Buckycubes
and to issue voluntary recalls. The message was clear to all do as CPSC says now, or pay for it later.
54. CPSCs actions had their foreseeable and intended consequence.
55. With no retailers and no product that anyone would sell in the face of CPSCs campaign
of duress and intimidation, M&O was out of business in a matter of months.
56. 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 be.
57. Adding insult to injury, an assistant general counsel of CPSC wrote to the trustee of the
MOH Liquidating Trust (MOH Trust) to demand that she take possession of M&Os remaining
inventory to determine what could be sold to help satisfy CPSCs claims. She added unhelpfully, [W]e
ask that you, as transferee and assignee of [M&O]s assets, make every effort to ensure that . . . no
9
Subject Products re-enter the stream of commerce. See Ex. 2, Letter from CPSC Assistant General
Counsel Mary B. Murphy to MOH Liquidating Trust (February 5, 2013).
C. The Defendants Attack Mr. Zucker For Speaking Out.
58. Having obliterated M&O, and having salted the earth by undermining the MOH Trusts
ability to satisfy whatever claims that M&O might have left, CPSC turned its sights on Mr. Zucker.
59. On February 11, 2013, CPSC moved to amend its complaint in the CPSC Proceeding to
add Mr. Zucker personally as a respondent. See Ex. 3, CPSC Motion for Leave to File Second Amended
Complaint and Memorandum in Support (February 11, 2013).
60. The amended complaint seeks an order requiring Mr. Zucker personally to conduct a full
recall of M&Os products, at an estimated cost of $57 million.
61. This would require Mr. Zucker personally to notify all distributors of M&Os products to
stop distributing the products, to notify state and local public health officials, to mail notice to each
distributor and retailer of M&Os products, to refund consumers the purchase price of M&Os products,
to reimburse retailers for their expenses in carrying out the recall, to submit monthly reports to CPSC
documenting his progress, and, for a period of five years, to keep records of his actions in conducting
the recall. See Ex. 4, Second Amended Complaint Against Maxfield & Oberton Holdings, LLC and
Craig Zucker (February 11, 2013).
62. Never in the history of CPSC has an action been filed to require an officer or former
officer of a company to personally conduct a recall.
63. Noting that M&O has now purported to dissolve, CPSC offered its theory that Mr.
Zucker must stand in the companys shoes because he had exercised personal control over M&Os acts
and practices. See Ex. 3 at 2.
10
64. Inexplicably, CPSC made no attempt to amend its complaint to bring an action against
MOH Trust, the only entity with any legal responsibility to pay the claims of M&O.
65. Leaving little doubt as to why Mr. Zucker was singled out for such unprecedented
treatment, CPSC presented a laundry list of Mr. Zuckers infractions, most of which are related to Mr.
Zuckers interactions with and protected political speech regarding CPSC and with Congress and the
public about CPSCs abuse of its power.
Mr. Zucker met personally with a CPSC Commissioner regarding the M&O Subject
Products. . . . He held a subsequent meeting on April 10, 2012, with another CPSC
Commissioner and then met separately that same day with CPSC staff to discuss the
M&O Subject Products. Ex. 3 at 3.
Mr. Zucker filed a report on the Subject Products in response to staffs requests for
information . . . . Id.
Mr. Zucker also corresponded personally with other CPSC staff about CPSC actions
connected with the filing of the Complaint. Id. at 4.
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. Id. (citing emails to Congressional staffers and an open letter to President
Obama published in the Washington Post).
Similarly, in numerous interviews on television, in print, and in internet media, Mr.
Zucker has responded to Complaint Counsels allegations on behalf of M&O. Id. at 5.
In A Letter from Our CEO: The Real Story Behind Why Were Fighting, Mr. Zucker
described at length and in detail M&Os interactions with CPSC staff, and concluded:
We are fighting the CPSC action because we believe they are wrong. Id.
66. CPSC played fast and loose with the facts to justify its assault on Mr. Zucker. For
example, in Exhibit E to the motion to amend CPSCs complaint that was filed February 11, 2013,
available at http://www.cpsc.gov//Global/Recalls/Recall-Lawsuits/maxfield29b.pdf (accessed Nov. 8,
2013), complaint counsel represented that the email attached at page 69 was a personal communication
from Mr. Zucker. CPSC, however, doctored this Exhibit to omit the footer demonstrating that it was a
11
form communication sent to all persons who subscribed to Buckyballs mailing list. The omitted footer
read:
Sorry . . . cannot be applied to previous orders or combined with other promotions.
Unsubscribe swolfson@cpsc.gov from this list. | Forward this email to a friend
See Ex. 5.
67. In short, by exercising his Constitutional rights to free speech, to free association, to
conduct public advocacy, and to petition government officials for redress of grievances, Mr. Zucker has
been a thorn in CPSCs side and so CPSC has targeted him for retribution.
68. On information and belief, CPSC has taken the unprecedented action of singling out Mr.
Zucker, and naming him individually, to punish him and to deter and chill him and other corporate
officers from exercising their Constitutional rights to free speech, to free association, and to petition
government officials for redress contrary to the First and Fifth Amendments of the United States
Constitution.
D. Defendants Create New Powers To Abuse Mr. Zucker.
69. CPSCs authority to adjudicate an order for remedial actions concerning a consumer
product, including notice to distributors and the public and conducting a recall, is governed by 15 U.S.C.
2064.
70. CPSCs jurisdiction is over the manufacturer or any distributor or retailer of the
product. 15 U.S.C. 2064(c)-(d).
71. CPSC alleges that Mr. Zucker is a manufacturer and a distributor of Buckyballs and
Buckycubes. However, as a matter of law, Mr. Zucker is neither one.
12
72. A manufacturer is defined as a person who manufactures or imports a consumer
product, and a distributor is defined as, a person to whom a consumer product is delivered or sold for
purposes of distribution in commerce. 15 U.S.C. 2052(a).
73. In other words, CPSA gives CPSC no adjudicative authority over individual officers of
employees of a manufacturer, distributor, or retailer of the product.
74. Mr. Zucker has never personally manufactured, imported, or distributed anything. Yet, to
punish him for speaking out, CPSC drives a bulldozer through the limits set by the statutes plain
language via its extraordinary and unprecedented expansion of the responsible corporate officer
doctrine, also known as the Park doctrine. See United States v. Park, 421 U.S. 658 (1975).
75. The Park doctrine is applied by the government only in the rarest of circumstances,
usually to hold responsible corporate officers personally liable for criminal violations by the companies
they oversee.
76. This extraordinary doctrine was the asserted basis for the administrative law judges
decision affirming CPSCs authority over Mr. Zucker, but it has no bearing here and it does not justify
the CPSCs overreach.
77. First, 15 U.S.C. 2064 does not authorize imposition of liability on employees of a
corporate entity. Where Congress intended that such liability can be imposed under CPSA, it has
specifically said so. For example, 15 U.S.C. 2064, authorizes remedial orders only against the
manufacturer or any distributor or retailer of the product. By contrast, 15 U.S.C. 2070 specifically
authorizes criminal liability for an individual director, officer, or agent of a corporation who knowingly
and willfully authorizes, orders, or performs certain criminal violations set forth in the statute.
13
THE UNITED STATES DISTRICT COURT
Craig Zucker, *
Plaintiff, *
*
v. * Civil No. 8:13-cv-03355-DKC
*
U.S. CONSUMER PRODUCT *
SAFETY COMMISSION, and *
ROBERT ADLER, in his official *
capacity as Acting Chairman of *
the U.S. Consumer Product Safety *
Commission, *
Defendants. *
BRIEF OF THE CHAMBER OF COMMERCE OF
THE UNITED STATES OF AMERICA AS
AMICUS CURIAE SUPPORTING PLAINTIFFS
OPPOSITION TO MOTION TO DISMISS
RACHEL L. BRAND
STEVEN P. LEHOTSKY
NATIONAL CHAMBER
LITIGATION CENTER
1615 H Street, NW
Washington, DC 20062
(202) 463-5337
Counsel for the Chamber of Commerce
of the United States of America
HEATHER MOWELL (Bar # 30244)
Counsel of Record
CARL NICHOLS (Pro Hac Vice Pending)
ELISEBETH COOK (Pro Hac Vice Pending)
DANIEL AGUILAR (Pro Hac Vice Pending)
WILMER CUTLER PICKERING
HALE AND DORR LLP
1875 Pennsylvania Avenue NW
Tel: (202) 663-6000
Fax: (202) 663-6363
Heather.Mowell@wilmerhale.com
Case 8:13-cv-03355-DKC Document 30-1 Filed 04/08/14 Page 1 of 14
78. Second, every case in every context in which the responsible corporate officer doctrine
has been applied, whether civil or criminal, has involved a predicate violation of law by the corporate
entity. This is the touchstone for individual corporate officer responsibility, because society rightly
expects corporate officers to ensure that their corporations do not engage in criminal conduct or other
violations of law. Here, however, even CPSC admits that nothing illegal has been done. See, e.g., Ex.
1, Letter from CPSC General Counsel Cheryl A. Falvey to Alan H. Schoem, Esq. (July 20, 2012) (I am
confirming that it is not a violation of any law administered by the CPSC for any retailer to continue to
sell Buckyballs and Buckycubes. . . . [I]t is not in violation of any law CPSC administers until we have
obtained a court order . . . or the firm voluntarily agrees to a corrective action.).
79. In no case has a corporate officer ever been held personally liable for corporate activity
that was lawful when conducted.
80. Third, the remedial action that CPSC is authorized to impose upon the manufacturer or
any distributor or retailer of a product is not a criminal sentence or even a fine or other monetary
liability or penalty. It is a product recall. Practically speaking, the nature of CPSCs statutory authority
remedy must be limited to the company that manufactured, distributed, or sold the product in the first
place, and not to any individual employee, especially not former employees like Mr. Zucker. A product
distributed by thousands of retailers over the course of almost four years, of which allegedly more than
2.5 million sets have been sold, cannot be effectively recalled by a single individual without a business
organization to support him and CPSCs action against Mr. Zucker is plainly not something Congress
intended to occur.
81. Finally, the exercise of adjudicative authority over an individual officer of a company
that CPSC concedes engaged in no illegal activity improperly rewrites CPSA. If CPSC can seek to
14
personally destroy a company employee or official through the unilateral expansion of its administrative
jurisdiction, as it seeks to do here, then CPSAs limits on CPSCs authority are a nullity.
E. CPSC Runs A Rigged Game, Leaving Mr. Zucker Without Options.
82. Through counsel, Mr. Zucker moved to intervene in the CPSC Proceeding to oppose its
motion adding him as a respondent.
83. The Administrative Law Judge (ALJ) granted Mr. Zuckers motion but rejected his
opposition. On May 3, 2013, the ALJ granted CPSCs motion for leave to file the amended complaint
and added Mr. Zucker as a respondent to the CPSC Proceeding against M&O. See Ex. 6, Order
Granting CPSC Motion for Leave to File Second Amended Complaint Against Craig Zucker (May 3,
2013). The ALJs affirmation of CPSCs power grab violated 5 U.S.C. 706(2)(A) because it was
arbitrary, capricious, an abuse of discretion, and not in accordance with law and violated 5 U.S.C.
706(2)(C) because it authorized CPSC to exceed its statutory jurisdiction and authority.
84. Mr. Zucker sought leave to appeal the order subjecting him to CPSCs adjudicative
authority to CPSC, but this was denied him on June 19, 2013. See Ex. 7, Order Denying Craig Zuckers
Motion to Appeal (June 19, 2013).
85. For Mr. Zucker, all further resort to CPSCs administrative process, whether through the
CPSC Proceeding or elsewhere, is futile.
86. In truth, from the beginning CPSCs administrative action was an unlawful show
designed to bleed first M&O and then Mr. Zucker to death, for CPSCs mind was made up and the
outcome decided before the first pleading was ever filed.
87. For example, on April 12, 2013, while both the CPSC Proceeding to determine whether
Buckyballs and Buckycubes were defective as a matter of law and CPSCs extraordinary motion
15
to name Mr. Zucker individually were both underway and ostensibly undecided, CPSC issued a recall
notice for Buckyballs and Buckycubes.
88. CPSC said that in cooperation with six retailers it was announcing the voluntary recall
of all Buckyballs and Buckycubes because these products contain defects in the design, warnings and
instructions, which pose a substantial risk of injury and death to children and teenagers. See Ex. 8,
CPSC, Six Retailers Announce Recall of Buckyballs and Buckycubes High-Powered Magnet Sets Due
to Ingestion Hazard (Recall 13-168), available at http://www.cpsc.gov/en/Recalls/2013/Six-Retailers-
Announce-Recall-of-Buckyballs-and-Buckycubes-High-Powered-Magnet-Sets/ (April 12, 2013)
(accessed Nov. 10, 2013). On information and belief, Defendant Tenenbaum and all of the other
Commissioners must have approved this recall and signed off on the findings related to defects, risk, and
hazard, before it was announced.
89. She and the other CPSC commissioners are the final decision makers in this case and,
subject only to limited review by an Article III court, they are free to do whatever they want with respect
to the scope of CPSCs jurisdiction, to Buckyballs and Buckycubes, and to Mr. Zucker, no matter
what the independent ALJ might find or decide.
90. Therefore, the April 12 recall notice, in which CPSC made its conclusory finding that
Buckyballs and Buckycubes are in fact defective and pose a substantial risk of injury and death to
children and teenagers rendered the CPSC Proceeding, which was supposed to fairly adjudicate these
things, nothing more than a bad charade, for it is clear where defendants stand on the matter.
91. Mr. Zucker is now defending himself at great economic and reputational cost and risk
against an out-of-control bureaucracy that, after destroying a thriving and legal business, now aims to
devastate him as well.
16
92. Defendant Tenenbaum and the other commissioners owed Mr. Zucker, and all of the
other respondents before them, a fair, objective, and level review of their causes. Instead, she and CPSC
have brazenly abused their power and disregarded their public trust by assuming for themselves the
authority to make up the law, to prosecute the supposed violations, to find the facts, to render a
verdict, and then to decide the sentence.
93. The defendants conduct clearly shows that the CPSC Proceeding is nothing more than
the drapery around the defendants decision to break Mr. Zucker. Therefore, it would be manifestly
unfair and incongruous to force Mr. Zucker back into the CPSC Proceeding or any other administrative
process run by CPSC. There is no fairness or due process to be found there for him.
94. Mr. Zucker is trapped, facing both personal financial ruin and the destruction of his
business reputation, in a rigged game that the house cannot lose and that he cannot win. This Court is
his only hope for fairness and avenue of redress.
Claims For Relief
First Claim For Relief: The Administrative Procedure Act.
95. Mr. Zucker repeats paragraphs 1-94.
96. CPSC has asserted jurisdiction over Mr. Zucker individually pursuant to 15 U.S.C.
2064, claiming that Mr. Zucker is a manufacturer and a distributor pursuant to 15 U.S.C. 2052(a).
97. Mr. Zucker is not a manufacturer or a distributor because he has never personally
manufactured, imported, or distributed any consumer products.
98. CPSCs actions against him, apparently in retaliation for the exercise of Constitutionally-
protected rights, are therefore in excess of its statutory authority. CPSC has wrongfully targeted Mr.
Zucker in his individual capacity, even though there was another entity, MOH Trust, that was
17
responsible for paying the claims against M&O and that CPSC could have made a party to the CPSC
Proceeding instead.
99. Also, CPSCs attack against Mr. Zucker is based on an unprecedented expansion of the
responsible corporate officer doctrine, also known as the Park doctrine. This doctrine is rarely
applied, but when it is, the focus is ordinarily on holding corporate officers personally liable for criminal
violations by the companies they oversee. In all cases, the doctrine is applied after there has been a
violation of law, not in advance of any such violation. CPSCs application of the Park doctrine in this
case goes far beyond the boundaries of its legal authority.
100. Mr. Zuckers appeal of CPSCs unprecedented action adding him as a personal
respondent in the CPSC Proceeding was rejected on June 19, 2013. See Ex. 7. This determination is
therefore final agency action.
101. Also, the defendants have predetermined the outcome of the CPSC Proceeding in all
material respects and resort to their administrative process would in all likelihood be futile.
102. Also, CPSCs decision to assert authority over Mr. Zucker also determined his legal
rights or obligations and resulted in immediate legal consequences by forcing him to defend an unlawful
adjudicative proceeding and risk serious penalties for noncompliance.
103. Also, CPSCs decisions to assert jurisdiction and authority over Mr. Zucker, and/or to
predetermine the outcome of the CPSC Proceeding were arbitrary and capricious, an abuse of discretion,
not in accordance with law, in excess of CPSCs statutory jurisdiction and authority and contrary to
Constitutional right for CPSC has utterly failed to provide Mr. Zucker with a fair and level review and
denied him procedural and substantive due process.
18
104. CPSCs determination that it has jurisdiction over Mr. Zucker is a clear error on purely
legal questions, including an interpretation of the statutory terms manufacturer and distributor under
15 U.S.C. 2052(a)(11), (8) and the ultra vires nature of the defendants conduct in this case.
105. Statutory construction is a question on which courts, and not administrators, are more
expert and so this matter is suitable for judicial review.
106. The decision that CPSCs jurisdiction extends to Mr. Zucker is final agency action and
his only proper remedy lies in this Court.
Second Claim For Relief: For Violation Of The First And Fifth Amendments To The United
States Constitution.
107. Mr. Zucker repeats paragraphs 1-106.
108. Upon information and belief, as demonstrated by CPSCs allegations in its Motion for
Leave to File Second Amended Complaint and Memorandum in Support (February 11, 2013), See Ex. 3
at 3-5, CPSC has singled out Mr. Zucker for selective administrative adjudication to punish him and to
chill and deter him and other corporate officers from exercising their Constitutional rights to free speech,
to free association, to publicly advocate for their companies, and to petition government officials for
redress of their grievances.
109. Therefore, the defendants actions against Mr. Zucker have the intent and the foreseeable
effect of chilling and restricting the exercise of Constitutionally-protected rights in violation of the First
Amendment of the United States Constitution, and to deny him due process of law under the Fifth
Amendment of the United States Constitution.
110. The defendants acted under color of law.
111. Also, the defendants have predetermined the CPSC Proceedings outcome in all material
respects thereby denying Mr. Zucker substantive and procedural due process.
19
112. Mr. Zucker has been damaged due to the defendants violations of his constitutional
rights, and will suffer irreparable injury absent the award of a preliminary and permanent injunction
prohibiting the defendants from exercising adjudicative authority over him.
Relief Requested
WHEREFORE, Mr. Zucker requests that the Court:
A. Declare that CPSCs actions with respect to Mr. Zucker, including but not limited to its
assertion of jurisdiction over him as a manufacturer and distributor of consumer products distributed in
commerce, are ultra vires, arbitrary and capricious, an abuse of discretion, and otherwise not in
accordance with law and in excess of CPSCs statutory authority.
B. Declare that the defendants selective assertion and exercise of adjudicative authority
over Mr. Zucker and/or their predetermination of the CPSC Proceeding violate his rights to freedom of
speech, to freedom of association, and to petition government officials for redress of grievances under
the First Amendment of the Constitution and/or his right to substantive and procedural due process of
law under the Fifth Amendment of the Constitution.
C. Preliminarily and permanently enjoin the defendants from asserting or exercising
adjudicative authority over Mr. Zucker in his individual capacity.
D. Award Mr. Zucker his costs and reasonable attorneys fees in defending himself before
CPSC and in pursuing this action under the Equal Access to Justice Act and under such other authorities
that may authorize this relief. 28 U.S.C. 2412.
E. Order such other and further relief as deemed just and proper by the Court.
20
Respectfully submitted,
__________/S/_____________________
Daniel Z. Epstein, Esq.
Cause of Action, Inc.
1919 Pennsylvania Ave., NW, Suite 650
Washington, D.C. 20006
Phone: 202.499.4232
Fax: 202.330.5842
Email:daniel.epstein@causeofaction.org
U.S. District of Maryland Bar No. 18344
__________/S/______________________
Reed D. Rubinstein, Esq.
Dinsmore &Shohl, LLP
801 Pennsylvania Ave., NW, Suite 610
Telephone: 202.372.9120
Fax: 202.372.9141
Email: reed.rubinstein@dinsmore.com
As Counsel to Cause of Action, Inc.
November 12, 2013
21
THE UNITED STATES DISTRICT COURT
Craig Zucker, *
Plaintiff, *
*
v. * Civil No. 8:13-cv-03355-DKC
*
U.S. CONSUMER PRODUCT *
SAFETY COMMISSION, and *
ROBERT ADLER, in his official *
capacity as Acting Chairman of *
the U.S. Consumer Product Safety *
Commission, *
Defendants. *
BRIEF OF THE CHAMBER OF COMMERCE OF
THE UNITED STATES OF AMERICA AS
AMICUS CURIAE SUPPORTING PLAINTIFFS
OPPOSITION TO MOTION TO DISMISS
RACHEL L. BRAND
STEVEN P. LEHOTSKY
NATIONAL CHAMBER
LITIGATION CENTER
1615 H Street, NW
(202) 463-5337
Counsel for the Chamber of Commerce
of the United States of America
Counsel of Record
HALE AND DORR LLP
Tel: (202) 663-6000
Fax: (202) 663-6363
- i -
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES.......................................................................................................... ii
CORPORATE DISCLOSURE STATEMENT ............................................................................. iv
INTEREST OF THE AMICUS CURIAE .......................................................................................1
ARGUMENT...................................................................................................................................2
I. NOVEL APPLICATION OF RESPONSIBLE CORPORATE OFFICER LIABILITY
IS NEITHER INEVITABLE NOR APPROPRIATE IN THE CONSUMER PRODUCT
SAFETY ACT CONTEXT .........................................................................................................2
A. Responsible Corporate Officer Liability Has Far Exceeded Its
Original Statutory Basis...........................................................................................2
B. Responsible Corporate Officer Liability For Mr. Zucker Would
Raise Serious Constitutional And Policy Concerns.................................................5
II. JUDICIAL REVIEW IS WARRANTED AT THIS TIME.................................................................7
CERTIFICATE OF SERVICE
- ii -
TABLE OF AUTHORITIES
CASES
Page
Athlone Industries., Inc. v. Consumer Product Safety Commission, 707 F.2d 1485
(D.C. Cir. 1983) ...................................................................................................................7
BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)............................................................5
Friedman v. Sebelius, 686 F.3d 813 (D.C. Cir. 2012) .....................................................................4
Morissette v. United States, 342 U.S. 246 (1952)............................................................................3
Robinson v. California, 370 U.S. 660 (1962) ..................................................................................3
United States v. Dotterweich, 320 U.S. 277 (1943).........................................................................2
United States v. Hodges X-Ray, Inc., 759 F.2d 557 (6th Cir. 1985)................................................4
United States v. Ming Hong, 242 F.3d 528 (4th Cir. 2001).............................................................4
United States v. Park, 421 U.S. 658 (1975).........................................................................2, 3, 4, 5
United States. v. Poulin, 926 F. Supp. 246 (D. Mass. 1996) ...........................................................4
United States v. Shelton Wholesale, Inc., 96-6131-CV-SJ-6, 1999 WL 825483
(W.D. Mo. Sept. 21, 1999) (unpublished) ...........................................................................6
DOCKETED CASES
United States v. Dotterweich, U.S. Br., 1943 WL 54821 (U.S. Aug. 1943)....................................5
United States v. Park, U.S. Reply Br., 1975 WL 370186 (U.S. Mar. 14, 1975) .............................3
STATUTES, RULES, AND REGULATIONS
21 U.S.C. 333................................................................................................................................2
OTHER AUTHORITIES
Stewart, Davis Overlock, Basics of Criminal Liability for Corporations and Their
Officials, and Use of Compliance Programs and Internal Investigations,
22 Pub. Cont. L.J. 81 (1992)................................................................................................4
Stinneford, John F., Punishment Without Culpability, 102 J. Crim. L. &
Criminology 653 (2012) ......................................................................................................3
- iii -
Tulli, Lauren A., A Prescription For Responsibility: The FDA Looks to Expand
the Scope of Potential Liability for Drug Company Officials, in Inside the
Minds: Recent Developments in Food and Drug Law: Leading Lawyers on
Dealing with Increased Enforcement, Keeping Up-To-Date with FDA
Requirements, and Developing Compliance Practices 175 (2014 ed.,
2013), available at 2013 WL 5760778................................................................................4
- iv -
CORPORATE DISCLOSURE STATEMENT
The Chamber of Commerce of the United States of America (the Chamber) states that it
is a non-profit, tax-exempt organization incorporated in the District of Columbia. The Chamber
has no parent corporation, and no publicly held company has 10% or greater ownership in the
Chamber.
INTEREST OF THE AMICUS CURIAE
The Chamber is the worlds largest business federation. It represents 300,000 direct
members and indirectly represents the interests of more than 3 million companies and
professional organizations of every size, in every industry sector, and from every region of the
country. An important function of the Chamber is to represent the interests of its members in
matters before Congress, the Executive Branch, and the courts. To that end, the Chamber
regularly files amicus curiae briefs in cases that raise issues of concern to the nations business
community.
This case implicates those interests because the administrative proceeding brought by the
U.S. Consumer Product Safety Commission (the Commission) against Craig Zucker is premised
on the so-called responsible corporate officer doctrine, under which individual liability is
imposed on a companys officer for the companys responsibilities. Such personal liability is
traditionally reserved for extraordinary situations, such as abuse of the corporate form. But in
this case, the Commission seeks to hold Mr. Zucker personally liable for recall and
reimbursement costs based simply on his having served as an officer of his former company.
Responsible corporate officer liability raises serious concerns when used in any situation, and is
particularly worrisome in its application here, as the Commission seeks to impose multi-million-
dollar liability upon Mr. Zucker personally without proof of wrongful conduct or intent.
- 2 -
ARGUMENT
I. NOVEL APPLICATION OF RESPONSIBLE CORPORATE OFFICER LIABILITY IS
NEITHER INEVITABLE NOR APPROPRIATE IN THE CONSUMER PRODUCT SAFETY ACT
CONTEXT
The administrative proceeding commenced against Mr. Zucker by the Commission seeks
to hold Mr. Zucker liable as a responsible corporate officer. Under that theory of liability, the
government can hold an individual criminally and individually liable for the actions of a
corporation merely by having a responsible relation to the relevant conduct, even absent proof
of individual criminal scienter or conduct. Responsible corporate officer liability under the
Consumer Product Safety Act would raise serious constitutional and policy concerns.
A. Responsible Corporate Officer Liability Has Far Exceeded Its Original
Statutory Basis
The doctrine has its roots in United States v. Dotterweich, 320 U.S. 277, 278 (1943),
where, based on an analysis of the legislative history of the Food, Drug, and Cosmetic Act
(FDCA), the Supreme Court held that a corporations president could be held criminally liable
under the FDCA simply because he held a responsible relation to the relevant transaction of
shipping adulterated and misbranded drugs. Id. at 285. The statute at issue, 21 U.S.C. 333,
had originally imposed liability on any officer, agent, or other person acting for the
corporation, but had been subsequently re-written to impose liability on any person acting for
the corporation. Dotterweich, 320 U.S. at 281-282. The Court concluded that the statutes
revisions had not substantively altered the scope of liability, and thus the corporations officer
could be found personally liable for a misdemeanor offense. Id. at 282-283.
Thirty years later, the Court again held that responsible corporate officers could be liable
under the FDCA in United States v. Park, 421 U.S. 658 (1975). Because the FDCA imposes the
- 3 -
highest standard of foresight and vigilance, the Court held that a corporate officer may be
found liable by virtue of his responsibility and authority of his position. Id. at 673, 675. The
Courts opinion closely tracked the argument urged by the United States in its briefing, in which
the government emphasized the unique character and special importance of the pure food and
drug laws (Park U.S. Reply Br., 1975 WL 370186, at *2 (Mar. 14, 1975)), explained that a
corporate officer has a personal affirmative duty to prevent violations under the FDCA (id.),
and noted that none of the opposing briefs contends that the FDA has used its prosecutorial
discretion arbitrarily or unwisely (id. at *8). The relevant offense in Park was a misdemeanor
carrying a $250 fine.
Even responsible corporate officer liability under the FDCA (the statute addressed by the
Court in Dotterweich and Park) presents significant constitutional and policy concerns. A
presumption of criminal liability, of course, conflict[s] with the overriding presumption of
innocence afforded to all defendants by the Constitution. Morissette v. United States, 342 U.S.
246, 275 (1952). And a defendant may not be convicted of a status crime, but must instead
commit an identifiable criminal act. See Robinson v. California, 370 U.S. 660, 662-663 (1962).
Responsible corporate officer liability runs against both principles and deserves to be considered
in light of them. See generally Stinneford, Punishment Without Culpability, 102 J. Crim. L. &
Criminology 653, 702 (2012) (lamenting the Supreme Courts ambivalen[ce] towards the
constitutional concerns raised by the doctrine).
Although Dotterweich and Park addressed only the FDCA, lower courts have expanded
the responsible corporate officer doctrine into other contexts of the law where the imposition of
personal liability is much more attenuated, based on the relevant statute and underlying policy
- 4 -
concerns. See Stewart, Basics of Criminal Liability for Corporations and Their Officials, and
Use of Compliance Programs and Internal Investigations, 22 Pub. Cont. L.J. 81, 84 (1992) (the
doctrine has expanded in recent years and bears close watching [it] may well grow further.).
For example, the government has sought to impose responsible corporate officer liability for
violations of the Public Health Service Act, United States v. Hodges X-Ray, Inc., 759 F.2d 557,
560-561 (6th Cir. 1985), the Controlled Substances Act, United States. v. Poulin, 926 F. Supp.
246, 253 (D. Mass. 1996), and the Clean Water Act, United States v. Ming Hong, 242 F.3d 528,
531-532 (4th Cir. 2001). And the government has used the doctrine as the basis for excluding
individuals from the Federal health care system. See Friedman v. Sebelius, 686 F.3d 813, 824
(D.C. Cir. 2012).
The government has also used the doctrine to impose increasingly onerous penalties. At
issue in Dotterweich and Park were a $1,500 fine
1
and a $250 fine
2
respectively, while in
Hodges X-Ray, Poulin, Ming Hong, and Friedman, the individuals were subject to a $20,500
fine,
3
a $50,000 fine,
4
a $1,300,000 fine with three years imprisonment,
5
and a $34,500,000
disgorgement order with a 12-year ban from participating in Federal health care programs.
6
In
fact, the more recent applications of the Park Doctrine [have seen] company officials receiving
prison terms of up to nine months and fines ranging from hundreds of thousands to millions of
dollars. Tulli, A Prescription For Responsibility: The FDA Looks to Expand the Scope of
1
Dotterweich U.S. Br., 1943 WL 54821, at *2 (Aug. 1943).
2
Park, 421 U.S. at 666.
3
Hodges X-Ray, 759 F.2d at 558.
4
Poulin, 926 F. Supp. at 255.
5
Ming Hong, 242 F.3d at 534.
6
Friedman, 686 F.3d at 816-817. The D.C. Circuit remanded the 12-year exclusionary
period to the agency for re-consideration, but hinted that that term of years may be justifiable.
Id. at 828.
- 5 -
Potential Liability for Drug Company Officials (2014 ed.), available at 2013 WL 5760778 at *2.
This expanding universe of punitive sanctions for responsible corporate officers was precisely
the concern annunciated by the dissent in Park, which lamented that the standardless conviction
approved today can serve in another case tomorrow to support a felony conviction and a
substantial prison sentence. Park, 421 U.S. at 682-683 (Stewart, J., dissenting).
B. Responsible Corporate Officer Liability For Mr. Zucker Would Raise
Serious Constitutional And Policy Concerns
The Commissions second amended complaint in the administrative proceeding alleges
that Mr. Zucker is appropriately named as a respondent due to his capacity as a responsible
corporate officer. Compl. (Dkt. 1) Ex. 3, at 6. The Commission therefore seeks to hold Mr.
Zucker personally responsible for a recall of BuckyBalls and BuckyCubes, at an estimated
personal cost of $57 million. Compl. 60. Responsible corporate officer liability in these
circumstances would both raise serious constitutional concerns and stretch the doctrine far
beyond its typical reach.
The Commission seeks to enforce a recall and reimbursement for all subject products
sold by Mr. Zuckers former company, Manfield & Oberton Holdings, LLC (M&O), without any
proof of individual scienter or conduct other than his having acted as a corporate officer. Yet
due process requires that this enormous potential sanction be commensurate with the Mr.
Zuckers individual conduct. See BMW of North Am., Inc. v. Gore, 517 U.S. 559 (1996)
(reprehensibility of defendants conduct is [p]erhaps the most important indicium of the
reasonableness of a punitive damages award). The Commissions complaint does not address
this concern.
This expanding universe of punitive sanctions for responsible corporate officers was precisely
the concern annunciated by the dissent in Park, which lamented that the standardless conviction
approved today can serve in another case tomorrow to support a felony conviction and a
substantial prison sentence. Park, 421 U.S. at 682-683 (Stewart, J., dissenting).
The Commission therefore seeks to hold Mr.
Zucker personally responsible for a recall of BuckyBalls and BuckyCubes, at an estimated
personal cost of $57 million. Compl. 60. Responsible corporate officer liability in these
circumstances would both raise serious constitutional concerns and stretch the doctrine far
beyond its typical reach.
- 6 -
Instead, the Commission supports its exercise of jurisdiction by relying upon an
unpublished decision from the Western District of Missouri issued 15 years ago. United States v.
Shelton Wholesale, Inc., 96-6131-CV-SJ-6, 1999 WL 825483 (W.D. Mo. Sept. 21, 1999)
(unpublished); see Compl. Ex. 3, at 9-11. Shelton Wholesale, however, is wholly inapposite.
There, the Commission sought to hold a companys sole shareholder personally liable under four
different theories of accountability, including the responsible corporate officer doctrine and a
theory of alter ego. Shelton Wholesale, 1999 WL 825483, at *1. Because the court agreed
with the Commission that Shelton was personally liable as a participant in the underlying
conduct and because he personally imported the products to the United States, id. at *2, the
Courts discussion of the responsible corporate officer doctrine was nothing more than dictum
unnecessary to the ultimate holding.
In an effort to hold Mr. Zucker liable as a responsible corporate officer, the Commission
relies on his communications with the Commission (See Compl. Ex. 3, at 3-4), with the press (id.
at 5 & n.5), and with elected federal officials in both personal emails and in an open letter to the
President (id. at 4). Although these communications are ostensibly cited to prove the undisputed
fact that Mr. Zucker was the founder and CFO of M&O, most relate either to (1) Mr. Zuckers
efforts to work with the Commission concerning any safety issues with BuckyBalls and
BuckyCubes and (2) Mr. Zuckers efforts to fight the Commissions administrative action. It
would indeed be troubling if the only basis for holding a corporate officer liable was the fact that
the officer had worked with the agency prior to action and contested the basis for the action in a
public forum after it was already initiated.
In an effort to hold Mr. Zucker liable as a responsible corporate officer, the Commission
relies on his communications with the Commission (See Compl. Ex. 3, at 3-4), with the press (id.
at 5 & n.5), and with elected federal officials in both personal emails and in an open letter to the
President (id. at 4). Although these communications are ostensibly cited to prove the undisputed
fact that Mr. Zucker was the founder and CFO of M&O, most relate either to (1) Mr. Zuckers
efforts to work with the Commission concerning any safety issues with BuckyBalls and
BuckyCubes and (2) Mr. Zuckers efforts to fight the Commissions administrative action. It
would indeed be troubling if the only basis for holding a corporate officer liable was the fact that
the officer had worked with the agency prior to action and contested the basis for the action in a
public forum after it was already initiated.
- 7 -
II. JUDICIAL REVIEW IS WARRANTED AT THIS TIME
Without better-founded support for the Commissions exercise of authority, and in light
of the expanding use and punishment associated with responsible corporate officer liability,
judicial review is warranted to combat and curtail potential agency overreach. The
Commissions invocation of the responsible corporate office doctrine is a strictly legal issue on
which the Commission is unlikely [to] change its position and can be considered by the
Court at this time before further administrative proceedings continue. Athlone Indus., Inc. v.
Consumer Prod. Safety Commn, 707 F.2d 1485, 1487-1489 (D.C. Cir. 1983). Moreover, the
administrative case against M&O and Mr. Zucker began over 20 months ago and likely has
exposed Mr. Zucker to litigation expenses and discovery orders which hinge upon his potential
liability as a responsible corporate officer. It would make little sense to continue to subject Mr.
Zucker to an administrative process that will not help inform the courts understanding of his
federal complaint or the Commissions defenses in response. Because the beneficial purposes
behind the final agency action rule do not obtain here, and because the practical benefits from
resolving the Commissions jurisdictional authority at the earliest possible stage are clearly
present, the Court should deny the Commissions motion to dismiss.
- 8 -
April 8, 2014 Respectfully submitted,
RACHEL L. BRAND
STEVEN P. LEHOTSKY
NATIONAL CHAMBER
LITIGATION CENTER
1615 H Street, NW
(202) 463-5337
Counsel for the Chamber of Commerce of
the United States of America
/s/ .
Counsel of Record
HALE AND DORR LLP
Tel: (202) 663-6000
Fax: (202) 663-6363
Zucker v. CPSC,Briefng Book Page 37
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on April 8, 2014, I caused a copy of the foregoing
document to be served on all parties by this Courts electronic filing system.
/s/
HEATHER MOWELL
In the past, the manufacturer of Buckyballs had cooperated
with the CPSC in an efort to ensure that the products warning
labels adequately apprised consumers of the need to keep the
magnets away from children in order to prevent the types of
injuries that could result if children swallowed the magnets. In fact, the manufacturer required its resellers not
to sell Buckyballs in the childrens toys section of their stores, and the manufacturer repeatedly enforced that
requirement by terminating resellers contracts.
In 2012, the CPSC abruptly abandoned this approach, despite the fact that more than a billion such magnets
had already been sold and there were only 24 reported incidents of children swallowing Buckyballs. Te CPSC
initiated a mandatory recall--a relatively rare measure--and even though the administrative law judge has yet to
rule on the merits of the recall, the manufacturer is already out of business.
In May 2013 the Consumer Product Safety Commission
(CPSC) took the unprecedented step of naming Craig Zucker in
an administrative complaint against Maxfeld and Oberton
Holdings, LLC the manufacturer of Buckyballs in order to
hold Zucker personally liable for a product recall. Zucker has
now taken an equally unprecedented step: he has sued the CPSC
for injunctive relief and a declaration that the CPSCs actions
violate his First and Fifh Amendment rights.
In his latest eforts, Zucker is represented by Cause of Action, .

. . [which] bills itself as advocates for government accountability and uses investigative, legal, and
communications tools to fght government overreach. [Concern has] been expressed by Forbes, which called
the CPSCs action ludicrous and a clear overreach.
Te Commissions unprecedented move to hold Zucker
personally responsible for a non-criminal consumer safety
violation broadly extends the responsible corporate ofcer
(RCO) doctrine in a manner previously not seen.
Relying on the so-called responsible corporate ofcer
doctrine, the administrative law judge cited two U.S. Supreme
Court decisions, both of which found that corporate ofcers can
be held individually liable for company violations of the Food,
Drug and Cosmetic Act.
Counsel for the former CEO argued that the cited cases are extraordinary exceptions to basic corporate law
principles shielding individual corporate owners and ofcers from liability and that liability for regulatory
violations may be imposed on corporate ofcers only when expressly provided by Congress, something that is
absent in the Consumer Protection Safety Act.
Top Firms Track Important Developments in Zucker v. CPSC
Tis decision has sobering implications. . . .While this opinion
raises concerns for CEOs of companies that no longer exist, the
reasoning behind the opinion is not limited to those situations.
Extension of this doctrine to the consumer products arena could
add another powerful tool to the CPSCs enforcement toolbox,
allowing the CPSC to leverage the threat of personal liability
against corporate ofcers.
Te ruling is written in broad language, and is not limited to
the facts of the case (which involves a small company, now in the
process of dissolution). If it stands, this ruling may have
profound efects in the regulated community. Te CPSC will be
able to threaten a variety of corporate ofcers, from CEOs down to compliance ofcials, with personal liability
for violations of the Consumer Product Safety Act. Even if not found ultimately liable, corporate ofcials will
face the specter of having to participate personally in a proceeding, and perhaps engage their own counsel.
Te problem with this approach is that it disregards the now
centuries-old recognition of the fact that corporations are legally
separate from the individuals who run them. Te idea that
liability can be imposed on an individual for corporate
misconduct, in apparent disregard of the corporate form and
without culpable involvement or even a requirement of a culpable state of mind, seems inconsistent with the
most basic concepts surrounding the corporate form.
Used in this way, the responsible corporate ofcer doctrine imposes liability for nothing more than for a per-
sons status. Keep in mind that the agency has not alleged that Zucker has culpably violated a specifc standard of
liability; rather, the agency is saying only that Zucker should be liable because of his position, in complete disre-
gard of the corporate form and without any regard to whether is culpable.
Represented by Cause of Action, Inc., described as a
government accountability organization, Craig Zucker . . . has
sued the U.S. Consumer Product Safety Commission (CPSC),
seeking a declaration that it exceeded its authority by naming him
personally in an administrative action against the now-defunct
company to force a product recall. . . . Te complaint outlines the
eforts the company took, in partnership with CPSC for several
years, to ensure that its products would not be used by children.
Zucker further claimed that CPSCs actions in targeting him in
his individual capacity, even though there was another
entityM&O Trust, that was responsible for paying claims
against M&Owere meant to punish him and to deter other
corporate ofcers from exercising their First Amendment rights and that its administrative process denied him
due process under the Fifh Amendment to the U.S. Constitution.
Former CPSC Chairman and Commissioner Nancy Nord au-
thored an op-ed in the Wall Street Journal on the same day as the
Zucker case fling, supporting Zuckers eforts and dismissing the
Commission for having adopted the philosophy that any action,
no matter how heavy-handed and outside established practice, is warranted if it achieves the desired result.
Mr. Zuckers unprecedented attempt to fght back against the Commissions aggressive tactics will have signif-
cant ramifcations for businesses regulated by the CPSC and the individual liability of their ofcers.

Sheila A. Millar is a partner and Kathryn M. Biszko is an associate with the law firm Keller and
Heckman LLP.

L egal B ack gr ou n der
Advocate for freedom and justice

2009 Massachusetts Avenue, NW
202.588.0302
Washington Legal Foundation
WLF
Vol. 28 No. 11 August 23, 2013

CPSCs MISUSE OF RCO DOCTRINE
BODES ILL FOR CEOs AND CONSUMERS
by
Sheila A. Millar and Kathryn M. Biszko

On June 19, 2013, an Administrative Law Judge (ALJ) denied a request by the National Association
of Manufacturers (NAM), Retail Industry Leaders Association, and National Retail Federation to intervene in
the Consumer Product Safety Commissions (CPSC) case of In re Maxfield and Oberton Holdings, LLC, et
al. Industry members had hoped to help challenge the Agencys unprecedented decisions to (1) name a
dissolved corporations former CEO individually as a respondent in the recall case; and (2) apply the
responsible corporate officer (RCO) doctrine outside the criminal context. Although the ALJ denied this
request, CPSCs effort to expand the Agencys enforcement powers raises broad public policy concerns,
including whether its actions will chill reasonable objections to CPSCs future recall demands, unduly expand
the definition of childrens products, jeopardize expected legal protections of incorporation, and extend the
RCO doctrine into uncharted territory.
Background. The case of Maxfield and Oberton (M&O) began in 2011, when the companys
Buckyballs magnet novelty item for adults came under CPSC scrutiny following reports of ingestion
injuries. M&O initially worked with CPSC to develop more robust warnings on the top, side, and carrying
case, updating packaging and labeling to specify that the products were for adult use only, including strong
warnings about risks from accidental ingestion, and voluntarily recalling all magnets without the new
warning. M&O then obtained a letter from CPSCs General Counsel indicating that the product could be
legally sold. However, CPSC later decided that the new warnings were insufficient, and in July, 2012 the
agency filed an administrative complaint seeking to force M&O to recall the product and refund the purchase
price to customers. Because the agency sought to completely stop M&O from selling its only product line,
this became a bet-the-company case.
M&O strongly objected to CPSCs decision and launched a public relations campaign to tell the
companys side of the story. As part of the campaign, M&O CEO Craig Zucker appeared on radio and
television shows, criticizing CPSCs attempt to ban the product and claiming that the agency was employing
bullying tactics to put an American small business out of business. For example, the agency reportedly
pressured retailers to stop carrying Buckyballs, and it issued a notice of proposed rulemaking to effectively
ban the product in September, 2012.
1
On December 27, 2012, M&O filed a Certificate of Cancellation with
the state of Delaware, and dissolved as a corporation. It established a Liquidating Trust to settle any
outstanding claims. Even though this development meant that Buckyballs would no longer be available for
sale anywhere, even on the companys website, CPSC continued to pursue its complaint against the
company.
2

In response to the notice of M&Os dissolution, CPSC filed a second amended complaint in February
2013 seeking to add Mr. Zucker, both individually and as an officer of the former corporation, as a

1
77 Fed. Reg. 53781 (Sept. 4, 2012).
2
In the Matter of Maxfield and Oberton Holdings, LLC, CPSC Docket 12-1 (2013).

Copyright 82013 Washington Legal Foundation ISBN 1056 3059 2
respondent. CPSC argued that Mr. Zucker should be held individually liable for conducting a recall and
refunding the purchase price to customers. Despite Mr. Zuckers objections, an Administrative Law Judge
granted CPSCs motion on May 3, 2013. Oddly, the Agency did not seek to add the Liquidating Trust as a
respondent, nor did it seek to add Mr. Zuckers co-owner (who had not personally criticized the CPSC in
public). In the meantime, in April, 2013, a number of retailers did announce recalls of the products in
cooperation with CPSC.
If CPSCs efforts to hold Mr. Zucker personally liable succeed, this case will set a disturbing
precedent, giving CPSC added leverage in negotiating recalls and penalties with product manufacturers,
especially small businesses and owner-operated businesses.
CPSAs Recognition of the Corporate Form. Although the Consumer Product Safety Act (CPSA)
establishes criminal and civil penalties against individuals for statutory violations, it does not confer authority
on CPSC to compel an individual to carry out a recall. In opposing CPSCs motion to name him individually,
Mr. Zucker argued that the plain wording of CPSA Section 15 only authorizes the manufacturer, distributor
or retailer to conduct a recall. In some cases, the manufacturer, distributor or retailer could be an individual
who conducted business without forming a corporation or partnership, but that was not the situation here.
Mr. Zucker argued that because manufacture and distribution were handled by a legitimate corporate entity,
not personally, he could not be subject to personal liability under Section 15.
Mr. Zucker further argued that under U.S. corporate law, an officer, director, or shareholder of a
corporation is not responsible for the debts or obligations of the corporation.
3
Indeed, the general
presumption is that individuals are not responsible for the actions and liabilities of their corporate employers
except in rare instances where Congress has decided to supersede this protection by statute.
4
Courts will
pierce the corporate veil to hold shareholders or officers liable for the actions of a corporation under
exceptional circumstances, such as where the corporation is a mere shell, serving no legitimate purpose,
and used primarily as an intermediary to perpetuate fraud or promote injustice.
5
Mr. Zuckers actions do not
justify disregard of the corporate form.
The Park Doctrine and CPSC. Despite these arguments, the ALJ agreed with CPSC and held that
the responsible corporate officer doctrine permitted Mr. Zucker to be added individually as a respondent. The
RCO doctrine, also known as the Park doctrine, began as a legal mechanism to hold high-ranking corporate
executives criminally liable for violations of the Food, Drug, and Cosmetic Act (FDCA), even absent
knowledge of or participation in the violation. Supreme Court cases United States v. Dotterweich and United
States v. Park (reaffirming Dotterweich) held that a corporate agent who stands in a responsible relation to
a misdemeanor may be held criminally liable for FDCA violations, even if the corporate officer did not play a
direct role in the misconduct.
6
Although the Park doctrine originated in the food and drug context, it also has
been applied in the context of other public health and welfare statutes. Most notably, the Clean Air Act and
the Clean Water Act expressly provide that a responsible corporate officer may be held liable for violations
of those statutes.
7

In its recent ruling, the ALJ held that it must only determine whether, under the RCO doctrine, Mr.
Zucker could be held individually responsible for the alleged CPSA transgressions of the corporation.
Because the CPSA relates to the publics health and safety, the ALJ reasoned that Dotterweich and Park
controlled in this case. The ALJ found the complaint sufficiently alleged liability under the RCO doctrine,
citing CPSCs argument that Mr. Zucker was responsible for ensuring Maxfields compliance with
applicable statutes and regulations . . . . [and] personally controlled the acts and practices of Maxfield,

3
See Citizens Elec. Corp. v. Bituminous Fire & Marine Ins. Co., 68 F.3d 1016, 1021 (7th Cir. 1995).
4
The Model Business Corporations Act states: [A] shareholder is not personally liable for the acts or debts of the corporation
except that he may become personally liable by reason of his own acts or conduct. Model Bus. Corp. Act 6.22(b) (1984).
5
SFA Folio Collections, Inc. v. Bannon, 585 A.2d 666, 672 (Conn. 1991) (quoting Angelo Tomasso, Inc. v. Armor Constr. &
Paving Inc., 447 A.2d 406, 412 (Conn. 1982)).
6
320 U.S. 277 (1943); 421 U.S. 658 (1975).
7
See 42 U.S.C. 7413 (c)(6); 33 U.S.C. 1319(c)(6).

including the importation of Buckyballs and Buckycubes.
8

This interpretation misapplies the Dotterweich and Park precedents and positions the case to expand
CPSCs authority significantly beyond the scope of its governing statutes. Mr. Zuckers conduct in refusing
to agree to a voluntary recallinstead insisting that the Agency meet its statutory obligation to first prove that
the product posed a substantial product hazarddoes not even rise to the level of a regulatory violation, let
alone criminal conduct that might implicate the traditional RCO doctrine.
Section 21 of CPSA states that any individual director, officer, or agent of a corporation who
knowingly and willfully violates Section 19 of the Act shall be subject to criminal penalties.
9
Section 19
violations include the sale and distribution of a product that is explicitly banned or otherwise prohibited under
a CSPC regulation. A suit against a corporate officer who violated Section 19 would look a lot more like a
Park doctrine type case by holding a corporate executive responsible for violations of a statute or regulation
on his or her watch.
However, in pursuing this case, CPSC is seeking an administrative determination that Buckyballs
adult magnet sets do in fact present a substantial product hazard within the meaning of Section 15(a)(2) of
CPSA. If this finding is made, CPSC further seeks an order compelling a recall of the product and a refund of
the purchase price to consumers. Crucially, the sale and distribution of the product do not violate the statute
unless and until Buckyballs are classified as a substantial product hazard. Hence, given the present posture
of the matter before the ALJ, the equitable policy served by the RCO doctrine could not possibly have been
satisfied in this case, much less merit application in a civil matter.
CPSC argued that the addition of Mr. Zucker was appropriate, saying it simply allows the court to
identify a responsible corporate official who can carry out an Order in this proceeding.
10
The CPSC further
alleged that the liquidating trust contains woefully insufficient funds to provide compensation to consumers
and that justice requires the court to require Mr. Zucker to provide the requested relief.
11
This policy
argument has far-reaching implications, as it breaches the most basic protection from personal liability
ostensibly offered by the corporate form. Compelling a former officer of a dissolved corporation to
personally refund consumers for products which have not yet been determined to pose a substantial product
hazard misreads consumer product safety law, but imposing personal liability absent any showing of
undercapitalization or other fraudeven if a substantial product hazard determination had been made
undermines the business communitys ability to rely on the protection of the corporate form.
Public Policy Considerations in Applying the Responsible Corporate Officer Doctrine. Product
manufacturers, distributors, and retailersand individuals managing these companieshave a legal right to
challenge a government agencys determination that a product recall is warranted based on legitimate, but
different, interpretations of applicable statutes as applied to specific facts. Individuals do not check their free
speech rights at the door when they disagree with agency actions and exercise their rights to object.
Although CPSC plays a valuable role in protecting the public, it has not been granted absolute power
to halt commerce without demonstrating a need to protect consumers from danger, consistent with its
statutory authority. Those circumstances do not appear to be present in this case. Instead, CPSC is seeking to
disregard the valid corporate form, raising questions about whether other individuals involved in product
safety decisionsespecially those who disagree publicly with initial Commission decisionscould face
exposure to personal liability if they resist a voluntary recall request.
Beyond the clear economic danger to companies and corporate officers, this precedent could harm the
cooperative relationship between corporations and the CPSC. This action creates a perverse incentive for
corporate officers to avoid reporting product hazards to the CPSC, out of fear that their personal finances and

8
Order Granting Complaint Counsel's Motion for Leave to File Second Amended Complaints in Docket Nos. 12-1 and 12-2 at 14,
CPSC Docket 12-1 and 12-2 (2013).
9
15 U.S.C. 2070(b) (2011).
10
Reply in Support of the Complaint Counsels Motion for Leave to File Second Amended Complaints in Docket Nos. 12-1 and
12-2 at 2, CPSC Docket 12-1 and 12-2 (2013).
11
CPSCs claim that the liquidating trust lacked sufficient funds also ignores the fact that the vast majority of consumers in a
product recall like this do not return the product.

familys welfare could be put at risk. Such a disincentive is contrary to the general interests of the CPSC and
the public, who depend upon corporate cooperation to monitor and report potential product hazards.
Another concern is whether the Commission is improperly seeking to re-categorize an adult product
as a childrens product. Defining childrens products was a seminal issue during discussions of the
Consumer Product Safety Improvement Act (CPSIA) in 2008. Suggestions that childrens products be
defined by their appeal to children were rejected in favor of defining childrens products as those designed
or intended primarily for children 12 years of age or younger.
12
A statement by a manufacturer about
intended use, including a label if such statement is reasonable, representations in packaging, display, or
advertising about whether the product is appropriate for use by children, whether the product is commonly
recognized as being intended for use by a child, and the Commissions Age Determination Guidelines are
factors to consider.
Here, the warnings and distribution mode illustrate that the primary intended users were adults.
Warnings are a commonly accepted tool to help adults make sure children are not exposed to unsuitable
products, and there is no legal duty to manufacture products that are always safe for childrenthus the Keep
Away from Children warning found on many household products. From matches, lighters, and fireworks to
butcher knives, chainsaws, and superglues, numerous dangerous but useful legal products are sold intended
solely for use by adults. Hence, the decision to pursue a Buckyballs recall against M&O and Mr. Zucker
raises troubling questions about the ability of any manufacturer to make good-faith decisions about the
intended user demographic (adults) and to utilize strong warnings about hazards if a product attracts
unwanted attention from under-age consumers.
Another immediate implication of this lawsuit, if successful, is that that the corporate form would no
longer protect former officers after dissolution if CPSC seeks a recall of a product. NAM et al. outlined just
some of the questions about how this doctrine would be applied within the context of CPSC rules regarding
reports of potential product hazards and recall negotiations, saying, in their motion to intervene:
The equities do not support setting aside all the protections of the business entity where there has
not been alleged or pleaded any arguable wrongdoing on the part of the individual. In this case,
Mr. Zucker directed the actions of a limited liability corporation that marketed a legal product.
Further, he relied repeatedly on CPSC guidance about marketing and labeling of the product in
doing so. Then CPSC staff changed its mind. To now suggest that Mr. Zucker should be exposed
to potential personal liability, and the attendant costs of defending himself, as a result, is
inequitable in the extreme
13

Not only does this decision attack the essential nature of the corporate form, whose very purpose is to
shield individuals from liability for corporate acts, but it utterly misconstrues the RCO doctrine. Using that
doctrine to find a CEO personally liable for conduct that was not even a regulatory violation, let alone
criminal, risks creating a new standard: strict personal liability for merely failing to agree to an agencys
request. Such a precedent would eviscerate the voluntary nature of the recall process, empower the CPSC to
engage in backdoor rulemaking, and leave business owners unable to rely on clear rules known in advance.
Supplanting standard rulemaking processes legislated in CPSCs organic statutes through this action
undermines principles of administrative law.
Conclusion. In an increasingly regulated marketplace, business owners should not have to fear
personal and financial ruin for alleged offenses that are decided retroactively, such as substantial hazard
findings under the CPSA. Accountability for wrongdoing adds to our confidence in product safety; however,
government shakes that confidence when it takes actions that are perceived as unfair. Allowing the Agencys
pursuit of an individual corporate employee personally under Park and its progeny to move forward under
these facts is just such an example.

12
15 U.S.C. 2052 (a)(2).
13
Memorandum in Support of Zuckers Request for Interlocutory Determination of Status as Proper Party to Proceeding at 2, CPSC
Docket 12-1 and 12-2 (2013).
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, )
) Case No.: _____________________
v. )
) Judge: _______________________
UNITED STATES CONSUMER PRODUCT )
SAFETY COMMISSION )
)
Defendant. )
__________________________________________ )
COMPLAINT
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
1. 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. 1391(e)(1)(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 of this mission, Plaintiff regularly requests
Case 1:14-cv-00541 Document 1 Filed 04/01/14 Page 1 of 7
2

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)(1). 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 CPSCs 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 CPSCs Office of Compliance issued a preliminary determination that
M&Os products were defective and that its safety program would not work.
This matter involves a FOIA request related to CPSCs 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.
3

10. At this point, CPSC initiated an all-out effort to shut down M&O. CPSC
immediately began contacting many of M&Os major retailers, telling them that Buckyballs
and Buckycubes were unsafe and requesting them to stop selling the products.
intimidation.
12. In a good-faith effort to regain CPSCs 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 of the danger of ingestion.
13. CPSC received the plan at 4:00 p.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 Oberton
Holdings, LLC, CPSC Docket No 12-1 [hereinafter CPSC Proceeding], available at
http://www.cpsc.gov/en/Recalls/Recall-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 1,700 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 Commn, CPSC
Starts Rulemaking to Develop New Federal Standard for Hazardous, High-Powered Magnet Sets
(Aug. 27, 2012), available at http://www.cpsc.gov/en/newsroom/news-releases/2012/cpsc-starts-
rulemaking-to-develop-new-federal-standard-for-hazardous-high-powered-magnet-sets/
[hereinafter CPSC Press Release].
10. At this point, CPSC initiated an all-out effort to shut down M&O. CPSC
immediately began contacting many of M&Os major retailers, telling them that Buckyballs
and Buckycubes were unsafe and requesting them to stop selling the products.
intimidation.
4

15. Without retailers willing to sell M&Os products in the face of CPSCs 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 of M&Os products at an estimated cost of $57 million. Id.
17. CPSC has never filed an action to require an officer or former 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 companys shoes because he exercised personal
control over its acts and practices. Id.
18. Amidst general concern over CPSCs 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]ll records . . . underlying CPSCs estimate [that small, high-powered magnet
sets were associated with 1,700 emergency room-treated injuries between 2009
and 2011]. These records should include, but are not limited to, all responsive
reports of harm submitted to SaferProducts.gov, all responsive cases reported
through the National Electronic Surveillance System (NEISS) database,
responsive information contained in the Injury or Potential Injury Incident (IPII)
database, responsive information 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).
18. Amidst general concern over CPSCs 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:
5

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.
Ex. 1.
19. In order to expedite CPSCs response, COA disclaimed any interest in obtaining
the identity of any manufacturer other than M&O or Strong Force, Inc. Id.
20. COAs 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 of COAs 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 COAs 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 COAs 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 COAs request. COA received no response. Ex. 3.
21. By letter dated November 19, 2013, CPSC acknowledged receipt of COAs 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 COAs 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 COAs request. COA has made multiple attempts to obtain a status update from
CPSC to no avail.
19. In order to expedite CPSCs response, COA disclaimed any interest in obtaining
the identity of any manufacturer other than M&O or Strong Force, Inc. ff Id.
20. COAs 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.
23. For instance, on January 6, 2014, COA emailed CPSC requesting a status update
on COAs request. COA received no response. Ex. 3.
6

24. On February 3, 2014, COA again emailed CPSC requesting a status update. COA
received no response. Ex. 4.
25. The FOIA and CPSCs regulations both require that CPSC respond to COAs
request within twenty (20) working days. 5 U.S.C. 552(a)(6); 16 C.F.R. 1015.5.
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 COAs 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 determination on COAs 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 determination on COAs request within the time limit set forth in 5 U.S.C. 552(a)(6)
and in CPSCs 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 COAs 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.
24. On February 3, 2014, COA again emailed CPSC requesting a status update. COA
received no response. Ex. 4.
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 COAs 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 determination on COAs request.
7

Respectfully submitted,
Dated: April 1, 2014 /s/ Allan Blutstein
Allan Blutstein
D.C. Bar No. 486156
/s/ 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
VIAE-MAIL
Office of the Secretary
()1l cAUSE
- , oACTION
Advoeates lor Govenun.ent AeeountabUity
A 501(c)(3) Nonprofit Corporation
November 12,2013
U.S. Consumer Product Safety Commission
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 50l(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 MAXFIELD 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. SAFETY COMM' N,
http://www.cpsc.gov/Research--Statistics/Information-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.
1919 Pennsylvania Ave, NW
Suite 6so
Wash in on, DC 2ooo6
November 12, 2013
Page2
a/.
4
Mr. Zucker has suffered significant economic andre utational injury due to CPSC's violation
of the IQA, the OMB Guidelines, and its own IQA guidelines and as a conse uence 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 sub ect of this Petition includes the following
statements disseminated in an A ril12, 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 artici ate in the recall of all Buckyballs and
Buck cubes.
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 reQresentatives failed to result in a voluntary recall plan that CPSC
staff considered to be ade uate to address the very serious hazard osed by these
roducts.
4. CPSC has received 54 reports of children and teens ingesting this
~ r o d u t with 53 of these reguiring medical interventions
5
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 Buckycube Desk Toys Action promQted by ongoing
harm 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-High-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 I en!N ewsroom/N ews-Re1eases/20 12/CPSC-Sues-Maxfield--Oberton-Over-
Hazardous-Buckyballs-and-Buckycube-Desk-Toys-Action-prompted-by-ongoing-harm-to-children-
from-ingested-magnets-/.
November 12, 2013
Page 3
Ill. 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 information 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
rePJOduce CPSC's claims and assertions}
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
of the 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 inaccurate, 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 April 12, 2013 recall announcement:
12
7
44 U.S.C. 3516 Note.
8
OMB Guidelines Ill(2), (3), V(3), 67 Fed. Reg. 8459-60.
9
Jd. 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
l. contain defects in the design, warnings and instructions,
which ose a substantial 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 of the subject products.
13
CPSC has wrongfully failed to define precisely the alleged "defects " or to disclose the
erformance standards needed for the design, warnings and instructions to avoid being termed
such. Indeed, CPSC has an on-going administrative rocceding in which the very guestion of
whether these products contains a " roduct defect" is being adjudicated.
14
Until that adjudication is
com Jete, the uestion of whether these products contain any kind of "defect" has 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 rna be tested, it is impossible
for the ublic to evaluate whether this information is useful or not.
15
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,
com Jete 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).
15
Id V(2), 67 Fed. Reg. 8459.
16
Id at V(3)(a), 67 Fed. Reg. 8459.
t7 Id
Zucker v. CPSC,Briefng Book Page 56
November 12, 2013
Page 5
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 ut the alleged risk osed by Buckyballs and Buckycubes in
context, and offers no metrics for measuring substantiality, it wrongfully denies Zucker and other
members of the ublic their right to test and regroduce 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
Jd. 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 treatment at
the rate of 31.0 per 1 00,000 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/20 12NeissDataHighlights.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 of2.2 per population of 100,000./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
treatment 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 treatment at the rate of 12.4 children per
100,000 population, and hospitalization and/or death at a rate of 0.3 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- 1(b)(3)(A)-(B); OMB Guidelines V(3)(b)(ii)(C), 67 Fed. Reg. 8460.
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
Reguested CPSC Action: Mr. Zucker re uests that CPSC disclose the statistical and scientific
metrics used to determine that there were "defects" in the R_roduct design, warnings and
instructions, and to determine substantiality with resQect 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
reffised to participate in the recall of all Bucky_bal/s 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
Buckycubes" in the recall announcement and on the CPSC website is the "dissemination" of IQA
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 Maxfie
& Oberton Holdings LLC, o New York, N.Y., afler discussions with the
com any and its representatives failed to result in a volunta recall plan
that CPSC staff considered to be adequate to address the very serious hazard
osed by these roducts."
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
Id. at V(5), 67 Fed. Reg. 8460.
26
ld. at V(3)(a) (stating that "disseminated information" must be presented "in an accurate, clear,
complete, and unbiased manner").
November 12, 2013
Page 7
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 recisely 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 C SC'
the "very serious hazard" claim fails the IQA'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
Id. at V(2), 67 Fed. Reg. 8459.
29
Id. at V(3)(a), 67 Fed. Reg. 8459.
30
Id. at V(3)(b )(ii), 67 Fed. Reg. 8460.
31
Jd. at V(3)(a), 67 Fed. Reg. 8459.
32
42 U.S.C. 300g-1(b)(3)(A) & (B); OMB Guidelines V(3)(b)(ii)(C), 67 Fed. Reg. 8460.
33
67 Fed. Reg. 6458.
34
November 12, 2013
Page 8
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 fJ!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.
35
This
claim fails the I A's quality test because it is inaccurate.
3
Review of the website
Saferproducts.9ov suggests that there are at least two ingestions that did not require medical
interventions.
3
Requested 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
35
Jd. 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,
37
http://saferproducts.govNiewlncident/1243200 (last visited Nov. 11, 2013);
bttp://saferproducts.govNiewlncident/1187028 (last visited Nov. 11, 2013).
38
News Release, supra note 6.
November 12, 2013
Page 9
''CPSC Sues Maxfield & Oberton Over Hazardous Buckyballs and Buc/..ycube Desk
Toys Action prom ted Qy_ ongoing harm to children [Iom ingested magnets. "
Grounds for Disclosure/Correction: The claims that the subject products are "hazardous" and cause
"ongoing harm 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 utili!}' 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 "wesentation"
objectivity test, because it is now im ossible 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 tram olines are statistically far more
dangerous. Without the benefit of this contextual information with res ect 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
Jd. at V(8),(9), 67 Fed. Reg. 8460.
40
Jd. at V(2), 67 Fed. Reg. 8459.
41
Jd. at V(3)(a), 67 Fed. Reg. 8459.
42ld.
43
Jd. 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 IQA'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 how the CPSC
defines "ongoing harm" in a given case, it is impossible to determine the utility, objectivity, and
reproducibility of this 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.
51
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. 5
3
Requested 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 eZ})lain how CPSC determines what an "ongoin arm" is in any given case.
45
67 Fed. Reg. 6458.
46
47
!d. at V(3)(a) (stating that "disseminated information" must be presented "in an accurate, clear,
48
/d. at V(2),(3), 67 Fed. Reg. 8459.
49
Id. at V(3)(a), 67 Fed. Reg. 8459.
50
/d. at V(3)(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
November 12, 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
1
September 25, 2013 Release Number: 13-290
En Espaol
CPSC Chairman Inez Tenenbaum Announces 2013 Circle of
Commendation Award Recipients
CPSC Chairman Inez Tenenbaum honors five recipients of the 3rd annual Chairmans Commendation Awards. The
Chairmans award program recognizes people and organizations that have made significant contributions to consumer product
safety.
WASHINGTON, D.C. U.S. Consumer Product Safety Commission (CPSC) Chairman Inez
Tenenbaum announced today the recipients of her 3rd annual Chairmans Circle of Commendation
Award. The five awardees were chosen for their significant, lifesaving contributions to consumer
product safety, in the United States and around the world.
It is my honor to recognize these selfless, dedicated individuals and high-achieving standards setting
organizations. Their research, advocacy and commitment to advancing the cause of consumer
protection have resulted in safer homes, both nationally and internationally. The lives they have saved
are untold, said Chairman Tenenbaum.
The Chairmans Commendation Award was created by Chairman Tenenbaum in 2011 to identify and
honor people, organizations, businesses, state and local governments and other groups who have
worked to reduce deaths, prevent injuries and improve consumer product safety.
At an awards ceremony today at CPSC headquarters in Bethesda, Md., the Chairman announced this years recipients of the Circle of
Commendation Award:
Dr. Joshua Sharfstein Dr. Sharfstein is Marylands Secretary of Health and Mental Hygiene. Previously, he was principal deputy
commissioner of the U.S. Food and Drug Administration and the Health Commissioner of Baltimore, Maryland. Throughout his public service
career, Dr. Sharfstein has worked to promote public health and reduce injuries from unsafe products. His efforts in consumer product safety
include leading a petition that spurred the removal from the market of over-the-counter cough and cold medications for children under age 4,
investigating the lead levels of toys in Baltimore, which resulted in CPSC re-announcing recalls of trinkets with high levels of lead and adding
additional lead-tainted products to the recall list. In September 2010, Dr. Sharfstein and Chairman Tenenbaum partnered together on a public
warning from FDA and CPSC advising parents to stop using infant sleep positioners, which led to the products being removed from almost all
store shelves. Due to his leadership, Maryland became the first state to ban the sale of crib bumpers in June 2013. Dr. Sharfsteins actions
have vastly improved the safety of children in the U.S.
Dr. Toby Litovitz Dr. Litovitz is the Executive and Medical Director of the National Capital Poison Center, which she founded in 1980.
She is also a Professor of Emergency Medicine at Georgetown University and Clinical Professor of Emergency Medicine at The George
Washington University. From 1984 through 2005, she coordinated the Toxic Exposure Surveillance System (now called the National Poison
Data System), the nations only poisoning surveillance database. She also served as Executive Director of the American Association of Poison
Control Centers from 1994 to 2004. Dr. Litovitz published a nationally-recognized series of papers on button/coin cell battery ingestions and
has spearheaded several consumer awareness campaigns warning of the lethality of button/coin cell batteries. Her research and advocacy have
led to the development of stronger product warnings on button/coin cell batteries; improvements in icons to better show the hazard; stronger
warnings on electronics and packaging; increased security on battery enclosures for remote controls and other battery-powered products; and
child-resistant packaging for individual and multi-pack coin cell batteries. Her research has also led to several consumer product voluntary
standards being revised to address battery ingestion hazards.
Carol Pollack-Nelson, Ph.D. Carol Pollack-Nelson is an expert Human Factors psychologist, who has worked in the consumer safety
field since 1982. From 1988 through 1993, she served as a senior engineering psychologist at CPSC. Since then, she has been the President
of Independent Safety Consulting, in Rockville, Md., and is the current President of the International Consumer Product Health and Safety
Organization (ICPHSO). Ms. Pollack-Nelson has evaluated hundreds of children and adult products to identify potential hazards associated
with foreseeable use and misuse. Her participation in various voluntary standards development committees has led to revisions of standards for
Ca CC ro rr l Pollack- kk N - e NN ls ll on, Ph PP .D. Carol Poll ll a ll ck-Nels ll on is ii an exp xx ert rr Hu HH m uu a mm n Factors psyc yy ho hh lo ll gi ggs ii t, wh ww o hh ha hh s work rr ed in ii th tt e hh cons nn um uu e mm r safe ff ty tt
fi ff e ii ld ll sin ii c nn e 1982. From1988 th tt r hh oug uu h gg 1993, she hh serv rr e vv d as a seni nno ii r eng n i ggn ii e nn erin ii g n psyc yy ho hh lo ll gi ggs ii t at CPSC. Sin ii c nn e th tt e hh n, nn she hh ha hh s been th tt e hh Presid ii ent nn
of Ind nn epend nn ent nn Safe ff ty tt Cons nn ul uut ll in ii g n , in ii Ro RR ckvi vvl ii l ll e ll , Md., and nn is ii th tt e hh cur uu r rr ent nn Presid ii ent nn of th tt e hh Int nn ern rr a nn tio ii na nn l Cons nn um uu e mm r Produ dd c uu t Healt ll h tt and nn Safe ff ty tt
Orga gg ni nnz ii a zz tio ii n (ICPHSO). Ms. Poll ll a ll ck-Nels ll on ha hh s eva vv lu ll a uu ted hu hh n uu d nn reds of chi hhl ii d ll ren and nn adu dd l uut ll produ dd c uu ts to id ii ent nn if ii y ff potent nn ia ii l ha hh za zz rds associa ii ted
wit ii h tt fo ff reseeab a le ll us uu e and nn mi mms ii us uu e. Her part rr ic ii ip ii atio ii n in ii va vv rio ii us uu vo vv lu ll n uu t nn ary rr stand nn ards deve vv lo ll pme mm nt nn comm mm i mmt ii t tt ees ha hh s le ll d to revi vvs ii io ii ns nn of stand nn ards fo ff r
The U.S. Consumer Product Safety Commission is charged with protecting the public from unreasonable risks of injury or death associated with the use of
thousands of types of consumer products under the agencys jurisdiction. Deaths, injuries, and property damage from consumer product incidents cost the
nation more than $1 trillion annually. CPSC is committed to protecting consumers and families from products that pose a fire, electrical, chemical or
mechanical hazard. CPSC's work to help ensure the safety of consumer products - such as toys, cribs, power tools, cigarette lighters and household
chemicals - contributed to a decline in the rate of deaths and injuries associated with consumer products over the past 40 years.
Federal law bars any person from selling products subject to a publicly-announced voluntary recall by a manufacturer or a mandatory recall ordered by the
Commission.
To report a dangerous product or a product-related injury go online to www.SaferProducts.gov or call CPSC's Hotline at (800) 638-2772 or teletypewriter at
(301) 595-7054 for the hearing impaired. Consumers can obtain news release and recall information at www.cpsc.gov, on Twitter @USCPSC or by
subscribing to CPSC's free e-mail newsletters.
preventing head and neck entrapment on bunk bed ladders and side structures, integrated protective barriers on gas fireplace glass and full
body harnesses on hunting tree stands. She also provides independent technical consultation to manufacturers, test laboratories, consumer
organizations and products liability attorneys in the areas of product design and hazard identification, age grading, and warning label and
instruction manual design.
ASTM F15.22 Subcommittee on Toy Safety For 30 years, Subcommittee F15.22 has developed and shepherded the comprehensive toy
safety requirements found in ASTM F963 Consumer Safety Specification for Toy Safety, which includes requirements addressing
mechanical and physical properties in childrens toys; electrical, flammability and toxicological hazards; labeling requirements and more than
100 tests for toy safety. Thanks to the Consumer Product Safety Improvement Act of 2008, the ASTM F963 standard is now a federal toy
safety standard. This standard helps protect children younger than 14 from possible hazards that may not be easily recognized, but may be
encountered in the normal use of a toy. The standard was the first to address hazards posed by cup-shaped toys that pose a suffocation
hazard, toys with spherical ends that pose an impact hazard, and jaw entrapment toys, among a number of others. The subcommittee has also
spearheaded efforts over the years to proactively address safety specifications for batteries, heavy metals, and high-powered magnets in
childrens toys. The subcommittee is part of ASTM International, which is a globally-recognized leader in the development and delivery of
international voluntary consensus standards. About 12,000 ASTM standards are used around the world to improve product quality, enhance
safety, provide market access and trade and build consumer confidence.
Committee CS-003, Standards Australia/Standards New Zealand Committee CS-003 is a joint committee that covers Safety
Requirements for Childrens Furniture sold in Australia and New Zealand. The committee drafts, maintains, and interprets national and bi-
national standards relating to infant and child products. In April 2013, a test for mattress firmness developed by the committee was published
as a new Australian/New Zealand standard. The test, the first of its kind in the world, outlines a method of testing all horizontal infant sleep
surfaces. The test can be applied in laboratory, retail and home settings. On average, products that fail the test are three times more likely to
be associated with a fatal suffocation event than products that pass. A consumer version of the standard test method has also been invented.
This consumer test method is being communicated to families, empowering them to determine their own safe sleeping practices. The new test
method for firmness will also allow investigators inspecting the sleep environment of infant fatalities to assess the firmness properties of the
surface where a child is found.
preve vv nt nn in ii g n he hh ad and nn ne nn ck ent nn r tt ap a me mm nt nn on bun uu k nn bed la ll dders and nn sid ii e str tt u rr c uu tu tt r uu es, in ii t nn egr gg ated protectiv ii e vv barr rr ie ii rs on ga gg s fi ff r ii epla ll ce gl gga ll ss and nn fu ff l uul ll
body ha hh rn rr e nn sses on hu hh n uu t nn in ii g n tr tt ee stand nn s. She hh als ll o provi vvd ii es in ii d nn epend nn ent nn techn hh i nnc ii al cons nn ul uut ll atio ii n to ma mm nu nn f uu a ff ctu tt r uu ers, test la ll b a oratorie ii s, cons nn um uu e mm r
orga gg ni nnz ii a zz tio ii ns nn and nn produ dd c uu ts li ll a ii b a il ii i ll t ii y tt att tt orn rr e nn ys yy in ii th tt e hh areas of produ dd c uu t desig ii n gg and nn ha hh za zz rd id ii ent nn if ii i ff c ii atio ii n, nn age gg gr gg adin ii g n , and nn warn rr i nnn ii g n la ll b a el and nn
in ii s nn tr tt u rr c uu tio ii n ma mm nu nn a uu l desig ii n gg .
U.S. CONSUMER PRODUCT SAF ETY COMMI SSI ON
4330 EAST WEST HIGHWAY
BETHESDA, MD 20814
Cheryl A. Falvey
General Counsel
Via Electronic and First Class Mail
Alan H. Schoem, Esq.
14809 Rolling Green Way
North Potomac, Maryland 20878
Dear Mr. Schoem:
July 20, 2012
Re: Request for Statement
Tel: 301 -504-7642
Fax: 301-504-0403
Thank you for your JuJy 17, 20121etter to CPSC Compliance Officer Joe Williams. You
state that Mr. William's letter to Brookstone concerned various types of aggregated masses of
small, powerful, individual magnets and that he asked Brookstone voluntarily stop selling the
magnets pending the outcome of our investigation. You fwther state that this communication to
.Brookstone is based on the fact that Maxfield and Oberton identified .Brookstone as a retailer in a
May 25, 2012 Full Report to the CPSC.
I can assure you that no violation of the disclosure restrictions has taken place for any
section 15 information Maxfield and Oberton submitted in its Full Report. Brookstone was
identified as a retailer independent from the section 15 report submitted by Maxfield and
Oberton. As you know, the Commission has determined that the referenced section 6(b)(5)
restrictions to not apply to information independently obtained or prepared by Commission staff.
16 C.F.R. 1101.63(c).
Furthermore, the Commission staff has statutory authority to investigate 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 belied by the fact that some retailers
have not agreed to stop sale. As you acknowledged, the correspondence to retailers contained a
generic description of magnets. While you may represent to staff that the firm, Brookstone, is
selling only one type of magnet, staff has a duty to investigate fully and request information
under the circumstances.
At your reguest, I am confirming that it is not a violation of an law administered by the
CPSC for anx retailer to continue to sell Buckyball s and Buckxcubes. We are wi lling to
CPSC Hotline: 1-800-638-CPSC (2772) * CPSC's Web Site: http://www.cpsc.gov
Alan H. Schoem, Esq.
Page 2
July 20, 20 12
communicate that directly to the retailers that staff has contacted. As you note, staff requests
have been for voluntary action. If a retailer continues to sell your client ' s product it is not in
violation of any law CPSC administers until we have obtained a court order which is the next
ste in our rocess after the issuance of a PO or the finn voluntarily agrees to a corrective
actioJ1."1rbe scope of administrative action needed to be taken by the agency to address the
concem regarding a potential substantial product hazard is certainly mini mized to the extent we
can obtain voluntary corrective actions from manufacturers or retailers.
Sincerely,
HOME

LI BERTY BALLS

FOUNDI NG BALLS

BALL OF RI GHTS

MERCH
ALL PRODUCTS

THE STORY

MEDI A

BLOG
We make products to support the legal
battle of one individual against
government absurdity overreach
retaliation regulators and stand up for the
SI GNUP
CART ( 0)
rights of all Americans (thats you).
100% of the profits go towards the legal
fees of fighting the Consumer Product
Safety Commissions absurd case against
Buckyballs and Craig Zucker.*
GRAB YOUR BALLS
SEE ALL

SI GN UP
EMAI L ADDRESS
VI SA

MASTERCARD AMEX

MAESTRO
COPYRI GHT 2014 ASSEMBLE, LLC
*100% of the profi ts from Uni ted We Bal l wi l l go towards
the l egal fees of defendi ng CPSC v. Maxfi el d and Oberton

SHARE:

Tweet

2009 Buckyballs
Are The World's
Hottest Adult
Desktoy
Remember Buckyballs?
We do. We were part of the team
from Maxfield & Oberton, the
company that created Buckyballs
(and Buckycubes.) In July 2012,
after millions of units sold to adults
and years of closely and carefully
working with the Consumer Product Safety Commission (CPSC), the company was sued by the
CPSC to force a full product recall.
2012 A Company Is Driven Out of Business by
Regulators
HOME

LI BERTY BALLS

FOUNDI NG BALLS

BALL OF RI GHTS

MERCH
ALL PRODUCTS

THE STORY

MEDI A

BLOG
151 Like
SI GNUP
CART ( 0)
In response, the company launched
its Save Our Balls campaign to try
to keep the business alive. Despite
overwhelming public support, the
company was spending more in legal
bills than it could earn. The company
dissolved in December 2012,
sending us into unemployment,
sadness, and sweatpants.
To this day, the products have
never been proven to be defective
and remain legal to sell today. In
fact, several companies
currently market identical
products.
[ But the CPSC decided to go
after only one guy: the former
CEO of Maxfield & Oberton and
outspoken face of Save Our
Balls, Craig Zucker. ]
SHARE:

Tweet

2009 Buckyballs
Are The World's
Hottest Adult
Desktoy
Remember Buckyballs?
We do. We were part of the team
from Maxfield & Oberton, the
company that created Buckyballs
(and Buckycubes.) In July 2012,
after millions of units sold to adults
and years of closely and carefully
working with the Consumer Product Safety Commission (CPSC), the company was sued by the
CPSC to force a full product recall.
2012 A Company Is Driven Out of Business by
Regulators
HOME

LI BERTY BALLS

FOUNDI NG BALLS

BALL OF RI GHTS

MERCH
ALL PRODUCTS

THE STORY

MEDI A

BLOG
151 Like
SI GNUP
CART ( 0)
2013 The
Government
Targets an
Individual
In February 2013, the CPSC took an
egregious jaw-dropping
unprecedented action, filing suit to
hold Zucker personally liable for
the costs of a product recall, which
they estimate at $57 million
(more than the company ever even
did in sales!).
The move was a vindictive astounding departure from the cherished American principle of
limited liability, which protects responsible, law-abiding company officers from being
unjustly sued.
Consider this: A guy starts a small business adhering to all
regulations, laws, and taxes. Unchecked regulators drive that
company out of business. Then the same government regulators
target that guy for speaking out against their actions. NO BIG
DEAL, RIGHT?
NOT EXACTLY, MR. PUTIN. The governments case against
Buckyballs will have severe, far-reaching ramifications for the
future of American businesses and consumers.

Farewell,
Protections for
Responsible
Individuals
If the Consumer Product Safety
Commission (CPSC) succeeds in
forcing an individual to pay for a
companys product recall, then
government agencies could go
after any entrepreneur or officer of
any company and hold him or her
personally responsible for the
companys actions, even if no laws
or regulations were violated.
See ya, deep-rooted-history-of-protections-for-responsible-
entrepreneurs-and-company-officers. Wouldnt wanna be ya.
Who Really Needs
Power Tools,
Anyway?
If the CPSC wins, it will get the
green light for bans and recalls of a
wide range of products that are
clearly meant for adults only,
limiting choices for responsible
consumers (thats you.) Thats
because the argument against
Buckyballs is based on a
profoundly stupid nanny state
dystopian selective theory that
warnings are insufficient to prevent misuse of a given adult product and no longer work.
Paging George Orwell: War is Peace, Ignorance is Strength,
Warnings Dont Work.

SI GN UP
EMAI L ADDRESS
VI SA

MASTERCARD AMEX

MAESTRO
COPYRI GHT 2014 ASSEMBLE, LLC
*100% of the profi ts from Uni ted We Bal l wi l l go towards
the l egal fees of defendi ng CPSC v. Maxfi el d and Oberton
Hol di ngs, LLC, et al . Assembl e, LLC reserves the ri ght to
modi fy or change where the profi ts of Uni ted We Bal l are
di rected. Assembl e wi l l not make any modi fi cati ons or
changes to where the profi ts are di rected wi thout fi rst
provi di ng noti ce on thi s websi te. Profi ts are defi ned as
surpl us remai ni ng after total costs are deducted from
total revenue.
The marks Buckybal l s, Buckycubes and Bucky Bi gs
are the regi stered trademarks of Maxfi el d & Oberton
Hol di ngs, LLC and not affi l i ated wi th Assembl e, LLC, our
products, or our websi te. Any reference to such
trademarks or Maxfi el d & Oberton i s made onl y to
descri be the back story and purpose of the campai gn, and
not to i mpl y any associ ati on wi th or endorsement of
Assembl e, LLC, our products, or our websi te.
The cel ebri ty i ndi vi dual s shown on thi s websi te are not
affi l i ated wi th Assembl e, LLC, and have not sponsored or
endorsed Assembl e or Uni ted We Bal l i n any manner
whatsoever.
Assembl e, LLC ( Assembl e) i s a Del aware l i mi ted l i abi l i ty
company. Assembl e i s not a successor enti ty to, or
otherwi se affi l i ated wi th, Maxfi el d & Oberton Hol di ngs,
LLC.
See a sampl e repri nt i n PDF format.
Dow Jones Repri nts: Thi s copy i s for your personal , non-commerci al use onl y. To order presentati on-ready copi es for di stri buti on to your col l eagues,
cl i ents or customers, use the Order Repri nts tool at the bottom of any arti cl e or vi si t www.dj repri nts.com
Order a repri nt of thi s arti cl e now
OPINION
The Irrational Federal War on Buckyballs
The Consumer Product Safety Commission is skirting the law and making consumers
less safe.
Nov. 12, 2013 6:45 p.m. ET
The Consumer Product Safety Commission is a small federal agency with a large mission: to protect the
public from unreasonable risks of injury by thousands of consumer products. As a former CPSC chairman,
I believe in regulations and rigorous industry standards. But there is a line between safety regulation and
overreach. That line has been crossed in the government's action against Buckyballs and their creator,
Craig Zucker.
Buckyballs are tiny, powerful magnetic balls and cubes that were sold as an adult desk toy. I have a set on
my desk. They became wildly popular after coming to market in 2009 and sold more than 2.5 million sets
until the CPSC banned future sales and, through a recall request, tried to force the product out of
consumers' hands.
Why take away a popular product that consumers obviously
wanted? Young children were getting their hands on
Buckyballs and swallowing them, and teenagers were using
them to simulate nose and lip piercings. When powerful
magnets are swallowed, they can come together internally to
cause perforations in the intestine walls. These are serious
injuries that often may require surgery.
The CPSC sees countless reports of children choking on
balloons, swallowing detergent pods or being injured from
riding adult-size ATVs. We haven't banned these products
they come with warnings. Buckyballs were always marketed and sold for use by adults. Each set came
with five conspicuous warnings to keep the product away from children.
Moreover, Maxfield & Oberton, the company headed by Mr. Zucker that manufactured Buckyballs, led a
public-education campaign to tell consumers about the dangers of swallowing powerful magnets. These
efforts and others were discussed with and encouraged by the CPSC.
In July 2012, however, the CPSC abruptly changed course. Rather than work with Maxfield & Oberton to
address the issue of children being injured by an adult product, the agency demanded an immediate recall.
Associated Press
By NANCY NORD
When the company asked the agency to reconsider, the CPSC filed a lawsuit alleging that the product was
defective because unintended users were misusing the product and suffering injuries. Instead of seeking
an injunction against the sale of Buckyballs while the agency pursued its case, which the law allows, the
agency approached retailers with an informal "request" that Buckyballs be removed from store shelves.
On Dec. 27, 2012, Maxfield & Oberton filed a certificate of cancellation with the state of Delaware, and the
company was dissolved. In just five months, the CPSC had effectively put Maxfield & Oberton out of
business without the company getting a chance to defend itself in court.
Shortly after the company dissolved, CPSC lawyers named Mr. Zucker, a 34-year-old entrepreneur and one
of the founders of the company, as a party to the suit. The lawyers argue that he is personally liable for
conducting a recall and refunding the purchase price of the recalled product to consumers. The agency
estimates the cost of such a recall to be as much as $57 million.
The legal theory for this move is known as the "responsible corporate officer" doctrine, which says
corporate officers may be held criminally liable for law violations even absent knowledge of or participation
in the illegal act. Yet here we are not dealing with a criminal matter. We are dealing with a recall of a
product that has not been proven to be defective and even now is legal to sell. It has never been suggested
that Mr. Zucker, or Maxfield & Oberton, acted illegally.
The argument also neatly ignores the Consumer Product Safety Act, which states that manufacturers,
distributors or retailersnot individual officersare responsible for recalls. While the CPSA does impose
criminal penalties on corporate officers and agents of a company who "knowingly and willfully" violate
specified sections of the act, failing to undertake a recall is not one of those sections. Also troubling is that
the agency's extraordinary decision to apply the responsible-officer doctrine to Mr. Zucker was made by
agency lawyers without a vote of the commissioners.
The CPSC action to remove Buckyballs from the market raises serious questions about how the
government acts to protect consumers. In its zeal to address a problem that it believes to be a serious
safety concern, the CPSC seems to have adopted the philosophy that any action, no matter how heavy-
handed and outside established practice, is warranted if it achieves the desired result.
Mr. Zucker, ever the entrepreneur, is fighting back. On Tuesday, he took unprecedented action by
individually suing the CPSC. He has filed a formal complaint in the hope of receiving a declaratory judgment
that the commission lacks jurisdiction over him in the proceeding and an injunction against the CPSC's
exercise of jurisdiction. He also has a new line of magnetic "Liberty Balls" that are much larger than
Buckyballs and do not present a swallow hazard for children. All the profits from their sale will go to finance
his defense against the CPSC.
I hope he wins his suit. The Consumer Product Safety Commission's actions in this case are detrimental
to creativity, innovation and entrepreneurship. But more troubling, they provide a powerful disincentive for
companies to work cooperatively with the government to advance safety.
Ms. Nord is a former commissioner (2005-13) and acting chairman (2006-09) of the Consumer Product
Safety Commission. Her blog on safety issues, "Conversations with Consumers," is at nancynord.net.
Copyri ght 2013 Dow Jones & Company, Inc. Al l Ri ghts Reserved
Thi s copy i s for your personal , non-commerci al use onl y. Di stri buti on and use of thi s materi al are governed by our Subscri ber Agreement and by
copyri ght l aw. For non-personal use or to order mul ti pl e copi es, pl ease contact Dow Jones Repri nts at 1-800-843-0008 or vi si t
www.dj repri nts.com
When the company asked the agency to reconsider, the CPSC filed a lawsuit alleging that the product was
defective because unintended users were misusing the product and suffering injuries. Instead of seeking
an injunction against the sale of Buckyballs while the agency pursued its case, which the law allows, the
agency approached retailers with an informal "request" that Buckyballs be removed from store shelves.
On Dec. 27, 2012, Maxfield & Oberton filed a certificate of cancellation with the state of Delaware, and the
company was dissolved. In just five months, the CPSC had effectively put Maxfield & Oberton out of
business without the company getting a chance to defend itself in court.
Shortly after the company dissolved, CPSC lawyers named Mr. Zucker, a 34-year-old entrepreneur and one
of the founders of the company, as a party to the suit. The lawyers argue that he is personally liable for
conducting a recall and refunding the purchase price of the recalled product to consumers. The agency
estimates the cost of such a recall to be as much as $57 million.
The legal theory for this move is known as the "responsible corporate officer" doctrine, which says
corporate officers may be held criminally liable for law violations even absent knowledge of or participation
in the illegal act. Yet here we are not dealing with a criminal matter. We are dealing with a recall of a
product that has not been proven to be defective and even now is legal to sell. It has never been suggested
that Mr. Zucker, or Maxfield & Oberton, acted illegally.
The argument also neatly ignores the Consumer Product Safety Act, which states that manufacturers,
distributors or retailersnot individual officersare responsible for recalls. While the CPSA does impose
criminal penalties on corporate officers and agents of a company who "knowingly and willfully" violate
specified sections of the act, failing to undertake a recall is not one of those sections. Also troubling is that
the agency's extraordinary decision to apply the responsible-officer doctrine to Mr. Zucker was made by
agency lawyers without a vote of the commissioners.
The CPSC action to remove Buckyballs from the market raises serious questions about how the
government acts to protect consumers. In its zeal to address a problem that it believes to be a serious
safety concern, the CPSC seems to have adopted the philosophy that any action, no matter how heavy-
handed and outside established practice, is warranted if it achieves the desired result.
Mr. Zucker, ever the entrepreneur, is fighting back. On Tuesday, he took unprecedented action by
individually suing the CPSC. He has filed a formal complaint in the hope of receiving a declaratory judgment
that the commission lacks jurisdiction over him in the proceeding and an injunction against the CPSC's
exercise of jurisdiction. He also has a new line of magnetic "Liberty Balls" that are much larger than
Buckyballs and do not present a swallow hazard for children. All the profits from their sale will go to finance
his defense against the CPSC.
I hope he wins his suit. The Consumer Product Safety Commission's actions in this case are detrimental
to creativity, innovation and entrepreneurship. But more troubling, they provide a powerful disincentive for
companies to work cooperatively with the government to advance safety.
Ms. Nord is a former commissioner (2005-13) and acting chairman (2006-09) of the Consumer Product
Safety Commission. Her blog on safety issues, "Conversations with Consumers," is at nancynord.net.
Copyri ght 2013 Dow Jones & Company, Inc. Al l Ri ghts Reserved
Thi s copy i s for your personal , non-commerci al use onl y. Di stri buti on and use of thi s materi al are governed by our Subscri ber Agreement and by
copyri ght l aw. For non-personal use or to order mul ti pl e copi es, pl ease contact Dow Jones Repri nts at 1-800-843-0008 or vi si t
www.dj repri nts.com

Keep It in "Park": How The CPSC Is Stretching The Responsible Corporate Officer Doctrine Beyond The Breaking Point

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Keep It in "Park": How The CPSC Is Stretching The Responsible Corporate Officer Doctrine Beyond The Breaking Point

Uploaded by

Copyright:

Available Formats

Keep it in Park: How the CPSC is Stretching the

Responsible Corporate Ofcer Doctrine Beyond the Breaking Point

In his latest eforts, Zucker is represented by Cause of Action, .

Zucker v. CPSC, Briefng Book Page 72

Warnings Dont Work.

You might also like