Regulation

The Government's Bogus Lawsuit Against Buckyballs' Creator Craig Zucker Ends In a Settlement

The Consumer Product Safety Commission's lawsuit against Zucker violated the agency's own rules.

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Last November, Reason TV contributor Naomi Brockwell interviewed Craig Zucker, the creator of the super-charged tiny magnets known as Buckyballs, which the Consumer Product Safety Commission (CPSC) forced off the market in 2012 because they allegedly posed a danger to children. When his company's trouble began, rather than suck up to the federal regulators who controlled the fate of his firm, Zucker went on a mediablitz to get the word out that the agency's accusations were profoundly unfair. In December 2012, with sales plummeting because of the CPSC's actions, Zucker gave up and dissolved hiscompany.

As I wrote in a follow up article, what happened next was extraordinary:

A couple of months later, the CPSC added Craig Zucker to its complaint, holding him personally liable for the cost of recalling Buckyballs. If the CPSC has its way, Zucker will have to personally reimburse retailers for their costs, notify all distributors and local public health officials of the recall, and submit monthly progress reports to the commission. (The CPSC initially estimated the cost of the recall at $57 million, but an agency spokesperson says the actual cost would be significantly less.)

The case has drawn widespread attention in legal circles because it is extremely unusual for the CPSC to hold a former officer personally responsible for the actions of a defunct corporation. Zucker opposed the CPSC's motion, and three trade groups—the National Association of Manufacturers, the National Retail Federation, and the Retail Industry Leaders Association—filed a joint brief on his behalf.

Last week, Zucker and the CPSC announced they had reached a settlement. Zucker agreed to hand over $375,000 that will go to pay for a recall of the product. The CPSC will spend the first $75,000 publicizing the recall, but Zucker gets any unused portion of the fund returned to him. So if nobody turns in their old Buckyballs, Zucker's only out the $75,000.

"After nearly two years of fighting, it's good to finally have this case behind me," said Zucker in a prepared statement. "The law does not support an individual being named in a case like this and I hope that this settlement will discourage the CPSC from wrongfully pursuing individual officers and entrepreneurs again in the future."

Buckyballs |||

All the negative publicity surrounding this case might discourage the CPSC from attempting similar actions, but a court victory could have settled the issue of whether the agency can apply the Park Doctrine in future product recalls. The Park Doctrine, which is based on a 1975 U.S. Supreme Court decision, says the government can hold officers responsible for the misdeeds of the corporations they represent even when they're unaware of those misdeeds.

It turns out the complaint against Zucker violated the CPSC's own rules. After the settlement was reached, Commissioner Ann Marie Buerkle released a statement expressing concerns about how this case "unfolded," arguing that the CPSC's rules require it to vote before broadening a complaint to add a new respondent, which it never did. 

After the CPSC came after his company, Zucker boldly mocked the agency's Chairman Inez Tenenbaum |||

"I believe the case against Mr. Zucker should never have gotten started without an affirmative Commission vote approving the issuance of a complaint against him," she wrote. This lawsuit consumed two years of Zucker's life and will cost him as much as $375,000 plus more in legal fees; now, after the case is settled, she speaks out?

With the announcement of a settlement, the government accountability law firm Cause of Action is dropping the countersuit it filed on Zucker's behalf, but will continue its efforts to uncover why the agency went after him in the first place through Freedom of Information Act litigation. It'll be interesting to see what Cause of Action can uncover.

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  1. “Get your hands off my…round metallic magnets.”

  2. Federal appeals court helps plaintiffs in religion suit.

    The plaintiffs in the South Carolina case wanted to stop a planned public-school graduation ceremony from being held at a Christian college, complete with prayer. The trial judge denied plaintiffs a preliminary injunction. Now the 4th Circuit court of appeals has assigned the case to another judge, who will reconsider the question of a preliminary injunction.

    http://www.greenvilleonline.co…..d/9190617/

  3. …now, after the case is settled, she speaks out?

    Craven attempt at image control.

    1. That’s how I see it, too.

  4. Just remember, little people, we may destroy your life at our leisure. We don’t need a real reason.

    /G

  5. I’m sure it was in his best interests (qualitatively) to declare victory and pay up, and I wouldn’t hold it against anybody to do what’s in his own best interests in this situation, but I hope somebody continues to follow up on that FOIA request.

    And I hope as part of the settlement he didn’t have to forgo any further legal actions against CPSC.

    The thing about bureaucrat underlings is, they tend to be meticulous about documenting any divergence from standard policy. That kind of bureaucratic behavior is cross cultural and seems to stand throughout history…

    If they ever find the very first cuneiform tablet, it’ll probably be in the form of a CYA memo.

  6. And, of course, you can still buy all of the small, spherical, rare-earth magnets that you want from various vendors (provided they aren’t marketed as a toy) and do whatever you want to with them. I can’t quite decide if the CPSC is utterly idiotic and absurd or evil.

    1. Stupid, Insane, or Evil?

      In this case, all three at once.

    2. Cuntishly evil?

      How in the fucking fuck is this a settlement, where Zucker did nothing wrong? The CPSC took away his company, ruined him financially and now they think that him being out another $75K-375K is a fair shake?

      Still rooting for that meteorite that smites DC off the planet.

  7. Wasn’t the basis for this recall the notion that kids could swallow the magnets, which would then attract other metal objects the kids had already swallowed, thus clogging the digestive system?

    I mean, if that far-fetched hypothetical is sufficient to ban a product, the government essentially has limitless power to ban everything.

    1. Well not so much clog as put holes in the intestinal wall.

    2. “I mean, if that far-fetched hypothetical is sufficient to ban a product, the government essentially has limitless power to ban everything.”

      Have you eaten your Broccoli today?

      Michelle and Justice Roberts really want to know.

    3. It’s not a hypothetical. There have been cases where it’s happened (swallowing two buckyballs 20 minutes to a couple of hours apart will wreak havoc on the intestines as the balls attract each other, tearing everything up in between). And surgical removal is extremely dangerous since most surgical tools are themselves metallic.

      1. .

      2. ” There have been cases where it’s happened”

        Oh, and you’re a liar, liar.

        1. No, there really have been cases of children being injured from swallowing small magnets. Very few, but it does happen occasionally.

          So don’t give small children who put things in their mouths toys with small magnets in them. It’s idiotic to say that adults can’t buy toys that might be dangerous to very young children. The world is full of things dangerous to small children if they eat them.

          1. I know that. I was simply reiterating the fact that he’s a known proven liar.

            You made the mistake I expected from him and attributed my comment as relating to this article.

            I don’t respond to him with any context whatsoever, I ridicule him. Now you know.

            1. OK, fair enough. Tulpa sucks. I think you need a new hobby or something, though.

              1. I’ll be sure to give that the same weight I give the rest of your opinions.

    4. It’s more like:

      – Swallow 2 magnets, but not in quick successsion.
      – They’re in different sections of the intestine, passing by each other.
      – They plunk together, pinching whatever’s between them.
      – Now you need surgery to get them out (and you’re in pain).

      It has happened to kids with other magnet sets, so it’s not just theoretical. Which is why buckyballs shipped with a warning saying “Not for Children”. So far so good.

      But CPSC decided that for some reason, for this product, warning labels weren’t good enough. Hence this mess of a story.

  8. Last I looked most things were dangerous to children. Since when is being “dangerous for children” a grounds to ban something? What am I missing here? Why haven’t they recalled gasoline and kitchen knives and dish washing soap and bleach and pretty much everything else in the modern world?

    1. There’s enough stuff in my garage cabinets to kill thousands of children. Which is why my kids aren’t allowed to play down there.

    2. I think a lot of this is about giving professional codes legal force.

      Certain engineering codes are all about public safety.

      I think some academics and government official have taken the classic whistle blower scenario and just tried to bring that kind of thinking into government enforcement. In other words, the professional codes are all about doing exactly this kind of thing, and they’re imposing professional codes on the rest of us by way of government.

      1. Take a look at some of these ASCE codes:

        “Guidelines to Practice Under the Fundamental Canons of Ethics

        CANON 1.

        Engineers shall hold paramount the safety, health and welfare of the public and shall strive to comply with the principles of sustainable development in the performance of their professional duties.

        a. Engineers shall recognize that the lives, safety, health and welfare of the general public are dependent upon engineering judgments, decisions and practices incorporated into structures, machines, products, processes and devices.

        b. Engineers whose professional judgment is overruled under circumstances where the safety, health and welfare of the public are endangered, or the principles of sustainable development ignored, shall inform their clients or employers of the possible consequences.

        d. Engineers who have knowledge or reason to believe that another person or firm may be in violation of any of the provisions of Canon 1 shall present such information to the proper authority in writing and shall cooperate with the proper authority in furnishing such further information or assistance as may be required.

        http://www.asce.org/leadership…..of-ethics/

        1. In modern professional ethics, people just shouldn’t be allowed to make these kinds of risk assessments for themselves. And it looks like the Bucky Ball guy is being held to that standard by the government–a standard he never agreed to.

          Oh, and the engineer who brought this to my attention pointed out that the definition of a professional (according to him) is someone whose primary loyalty is to his profession rather than his employer. Again, looking at the Bucky Ball case, it seems that your primary loyalty is to the profession (according to the government)–whether you’re in the profession or not?

          1. To be able to put “professional” engineer on your business cards you need to pass exam and become paid member of engineering group led by state board.

            Most states offer some degree of reciprocity, for a fee. According to my engineering friends it’s not a cartel – it is protecting the health and safety of the public.

            1. Yeah, I appreciate that.

              But if you’re not an engineer, and you engineer something like Bucky Balls, it seems like the government is enforcing a cartel like system on you—-as evidenced here.

              From where I’m standing, this Bucky Ball gentleman is being treated like he was a professional engineer who broke the professional ethics code–whether he’s actually a professional engineer and part of the organization or not.

              That’s my point.

              His engineering project has–effectively–been measured and found wanting by the professional ethics board whether he’s part of that profession or not. It’s like a freedom of association issue.

              I’ve got no problem at all with professions banding together and having an ethics system, and if you want their official stamp of approval, then you have to play by their rules. If somebody invents something in his garage, though, who isn’t in profession and doesn’t want to be play by those rules, then imposing those rules on him against his will is not a legitimate function of government.

              If someone was hurt by his invention and they wanted to sue in court, of course, then they should have every right to do so.

    3. John|5.18.14 @ 10:48AM|#
      “Last I looked most things were dangerous to children.”

      Do you have to be 21 to buy a pocket knife now?

    4. The fact that they’re promoted as a toy, because only children play.

      Similarly, check out the warning on bubble bath (either an admonition that it’s for adults only or a caution against skin & urinary irritation) but not on hand dishwashing detergent made of the same ingredients. That was a compromise against the possibility of banning them, even thought the urogenital irritation proclivity is primarily (albeit not exclusively) a female rather than a juvenile one.

      A lot of other measures are “for the children” even though there’s no evidence nor a priori reason to think children are more in danger than adults. And “children” includes teens.

      1. Also not on shampoo, shower gel, or (paradoxically) baby bath made of the same ingredients but not sold as intended to foam bath water. Because only children play.

        1. It’s similar to the bans on flavored tobacco products and e-cigarettes. Because apparently only children like fruity sweet things.

          1. Howard Shafran was telling me they had a point that Camel cigarets were promoted via a cartoon, and that certainly cartoons were particular to children, and I told him no, that advertising to all ages tends to use cartoons. So we turned on the TV, and at the 1st commercial break, all but 1 of the ads used cartoons, and they were advertising adult products such as Cadillacs.

            1. I meant in particular cartoon animals. Such a common motif in advertising that we don’t even realize it offhand.

      2. For anti-gunners collecting/making up facts, “children” goes at least into the twenties.

  9. This really should get more attention. They set out to destroy this guy because he defied him. To come out with that statement *after* fucking with him for couple years is just another turn of the screw.

  10. It seems that a lot of people are referring to this settlement as a “victory” because he got the fine reduced to $75K.

    The product isn’t back on the shelves, the Gov didn’t pay legal fees, and nobody got fired. Not a victory.

    1. I agree.

      I understand why he had to do this, but I hope the FOIA info is damning.

      There’s so much that’s so wrong about this case, and if someone felt forced to pay the government $75,000 not to get screwed even harder, then that’s not really what I’d call a victory either.

      I’d like to see CPSC officials testify under oath about their novel tactic of targeting an individual who spoke out. After all the CYA memos are made public. And those memos are out there.

      1. I’d like to see CPSC officials testify under oath

        I’d like to see these people ruined. I’d like them to be subjected to the same sort of wanton capriciousness they saw fit to inflict on Zucker.

        Any settlement with them that doesn’t involve them fighting Zucker to the pain, is a waste of effort.

    2. Yet I guarantee people at CPSC see this as a loss on their part.

  11. He should take the $375,000 and put out contracts on all the government employees who filed this bogus lawsuit. They only way we are going to get our government back under control is to completely recycle the bureaucracy and reduce it by 2/3.

    1. Why not crowdsource it? That was the fundamental idea behind Assassination Politics.

  12. The root problem is Congress unconstitutionally delegated the authority to legislate to a part of government not answerable to the voter.

    Hmmm, government expands power without accountability. *rubs chin* I wonder how much they’ll take?

    Is there anything more disgusting than a Congressman?

    1. “Is there anything more disgusting than a Congressman?”

      Someone who thinks congressmen imposing themselves on the rest of us is the solution to our problems?

      1. Very true. I can hate the venal person in D.C. but it’s exhausting trying to explain to people who genuinely love me and my children that they are part of the problem!

    2. Well, OK, but could you imagine if, say, every drug or food additive licensure required Congressional action? I.e. if they wrote the food & drug laws along the same lines, i.e. you can’t sell it without prior approval, but instead of being able to get a bureau’s approval, you need an act of Congress, the list of allowed products (exceptions to the presumed illegality of everything) being written in statute?

      1. I hope you’re being sarcastic.

  13. The Park Doctrine, which is based on a 1975 U.S. Supreme Court decision, says the government can hold officers responsible for the misdeeds of the corporations they represent even when they’re unaware of those misdeeds.

    Too bad it doesn’t apply to the executive branch.

    1. .

  14. Do you have to be 21 to buy a pocket knife now?

    What about bicycles? Those things are death traps.

  15. Recently on Derpbook, a prog responds to my favorite Sowell quote:

    “The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

    On the Thomas Sowell quote, As I have mentioned before, he is a favorite of the white supremacist crowd, which really says a lot about who he speaks to. Of course the lesson of economics is a finite amount of everything, otherwise no one would need to buy it. But that general statement isn’t new casserole true. The first lesson of economics is laziness. People will pay for anything that requires the least amount of work. When people are given the choice between growing their own food for free in their backyard, or buying food at a restaurant or a prepared meal, what will most people choose? When given the choice between paying for produce and meat and making food yourself, and ordering a pizza, what will most people choose? MOST aspects of our economy are built on taking advantage of people’s laziness. People are willing to pay for any product or service that will make their life easier. So generally speaking there is pretty much an unlimited amount of goods and services that Americans are willing to buy if they can afford it, from a service that cleans up dog shit in your yard, to custom hats for your baby.

    1. “When people are given the choice between growing their own food for free in their backyard, or buying food at a restaurant or a prepared meal, what will most people choose?”

      Opportunity cost, how does it work?

    2. Why do you associate with such irretrievably stupid people?

  16. Cont’d

    So in America that rule doesn’t really apply. What does however have a finite amount to go around is wealth, and the more wealth we hand up to the top percentages, who know how to manipulate and hide it, in the most literal way takes from everyone else. There are only so many slices of the pie to go around, and when the richest people get the most pieces of pie, that leaves nothing but a slice and some crumbs for everyone else to fight over.

    Are there leftists who do not believe wealth is a zero-sum game? It appears to be an article of faith with them.

    1. If all of America is lazy, who is being paid to clean up dog shit?

      1. Mexicans.

      2. How about we get dogs to bury it, like cats? Usually dogs tend to kick a little with their hind feet, strewing a little dirt on it, so we just have to get them to do a better job.

    2. “But that general statement isn’t new casserole true”

      I that a typo or a figure of speech I’m unfamiliar with?

      I agree with your point that ‘wealth is finite’ seems to be their starting point. Which makes me wonder why we keep trying.

      1. Well, wealth is finite. Just not fixed or limited. What they don’t get is that wealth is created, not simply distributed and traded.

        I keep trying because it’s really not that hard to understand or explain and I think I’ve made some progress with some people.

        1. They also don’t get that their policies can and do destroy wealth.

        2. Actually it’s somewhat hard. Often it doesn’t seem like you’re getting somewhere with your work. Unfortunately the concept of opp’ty cost is relatively simple, so people figure that once you subtract it, you’ve got nothing in most cases. The concept of gains from trade is especially inapparent.

          1. Robert Ringer takes it especially far in unfortunately the wrong direction when he writes that there’s a winner & a loser in every xaction. He takes the perfectly sensible stance of thinking of one’s potential gain as if already realized, and then it’s just a Q of how much of that potential you actually realize; once you subtract it, the net is negative for half the people trading.

            So that’s about it. People assume a certain amount of productivity & hence production as a given, and then it’s all about how much of the pie you actually get.

    3. I find a lot of people who will acknowledge that wealth is not zero-sum, but then immediately go on as if it is. They just can’t get over the idea that people are poor because other people are rich.

    4. Are there leftists who do not believe wealth is a zero-sum game?

      In the 90s some Democrats played with the idea.

      The idea that free trade was a great creator of wealth actually was somewhat accepted at the white house.

      There was even an episode of the west wing with with the character Toby talking to a bunch of WTO protesters and telling them free trade stops war.

      And of course NAFTA was passed and Clinton signed it.

      The Obama administration and the democrat party in general have largely abandoned free trade though. Cuz you know “BOOOOOOOOOSH!!!”

    5. The best word to describe modern leftists is retarded, and I don’t mean that as a pejorative. Their world view, understanding of economics, biology, human nature etc. is pre-enlightenment. It’s like they are completely unaware of the developments of the last 3 centuries.

  17. Any chance the guy is a Republican? Anyone know?

    1. He is not a Republican.

  18. What does however have a finite amount to go around is wealth, and the more wealth we hand up to the top percentages, who know how to manipulate and hide it, in the most literal way takes from everyone else. There are only so many slices of the pie to go around, and when the richest people get the most pieces of pie, that leaves nothing but a slice and some crumbs for everyone else to fight over.

    Nobel worthy.

  19. So a quick summary of this post is, two major, and I mean major court victories against Zucker who lost his business and stands to lose a substantial portion of his personal wealth.

    Then a third party who wrote a memo saying that she thinks that maybe the CPSC didn’t totally follow procedure when anally raping Zucker, but the rulings stand, Zucker’s out of business and he’ll soon be writing further checks to the government for ever selling a really kick-ass product. The CPSC has undoubtedly seen this memo, and tossed it in the recycle bin.

    Great success!

  20. Those motherfuckers. I got some buckyballs, but I want to buy more.

    -jcr

  21. Buckyballs are insanely addictive, and they were an instant hit with a huge community of enthusiasts who shared photos of their creations online.

    https://sites.google.com/site/buckyballstoys

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