May 14, 2014

On May 9, 2014, I voted to approve the settlement In the matter of Maxfield and Oberton Holdings, LLC and Craig Zucker, as an individual and as an officer of Maxfield and Oberton Holdings, LLC. I am delighted the parties came to a resolution that does exactly what was sought both before the Complaint was filed and throughout this litigation: a recall and cessation of all importation and distribution (a “stop sale”) of  high-powered magnet sets, called Buckyballs and Buckycubes (collectively “Buckyballs”). High-powered magnets are responsible for horrific, long-term, and life threatening injuries in infants and children estimated to be in the thousands

I became a Commissioner of the U.S. Consumer Product Safety Commission (“CPSC” or “Commission”) in July 2013 when this lawsuit was already ongoing.  Given the peculiar position of a Commissioner in matters such as these where I could become one of the final decision makers in the case, the information I was able to obtain pre-settlement was limited to pre-lawsuit information and what was in the public record.

I learned that CPSC staff estimated there were 1716 injuries from this type of product between 2009 and 2011 based on emergency room data throughout the country. During a hearing held on October 22, 2013, to consider a possible rulemaking on high-powered magnets, five pediatric gastroenterologists testified that they had done a survey of the members of their professional organization and, even with only approximately 25 percent of their members responding, they identified 480 ingestions in ten years with 204 in the 12 months prior to their October 2012 report.  The physicians showed that every single state had had at least one person who was injured by these magnets. These numbers are certainly just the tip of the iceberg. Further, these physicians testified that the injuries from these magnets are insidious, horrific and life-altering often requiring removal of portions of the child’s intestines and lifetime care.

The CPSC exists to address just such dangerous products. This lawsuit never asked for anything but a recall and stop sale of, and publicity regarding, this potentially dangerous product. Despite his many hyperbolic assertions to the contrary, this lawsuit has never been about punishing Mr. Zucker.

Prior to becoming a Commissioner, I was a litigator for more than thirty years and participated in many settlement negotiations. I found that when I started settlement discussions, after years of arguing with the other side, it was very important to go back to how I had evaluated the case before discovery began and ask what I would have settled the case for on the day of filing the Complaint.

In this case, I was presented with the recommended settlement by our General Counsel, but without any of the information a client would receive in the private sector, such as the starting positions of the parties, the process of reaching the proposed settlement, the issues raised by the other side and the opposing counsel’s views of strengths and weaknesses on both sides. None of this information is available to a Commissioner in making her decision.

So, I went to the Complaint and compared it to the proposed settlement as I would have done in the private sector. The Commission’s Complaint requested that the Defendants (1) effectuate a recall of Buckyballs, (2) cease all importation and distribution of Buckyballs, (3) publicize the ability for consumers to receive a refund for the recalled Buckyballs, and (4) publicize the dangers of Buckyballs by posting information regarding incidents and injuries associated with ingestion or aspiration of Buckyballs.

This settlement accomplishes exactly what the Commission set out to do.  In short:

  • The Commission has issued a press release announcing a voluntary recall of Buckyballs.
  • Companies and individuals cannot sell, manufacture, distribute, or import Buckyballs in any marketplace, including online services such as eBay or Craigslist. 
  • The Buckyballs recall will be publicized appropriately.
  • Consumers will receive refunds as outlined in the settlement for the recalled Buckyballs.
  • A website will be set up to further publicize the Buckyballs recall.

The costs of the publicity, refunds and website will be borne by the Defendants. Because the settlement accomplishes what we sought in the Complaint, I accepted the settlement.

I congratulate the parties on reaching this resolution.  I hope, as a result, families who own Buckyballs will return the dangerous product as per the directions in the settlement and all companies and individuals will stop sale of Buckyballs in this country.  I also hope that the publicity of this settlement and the accompanying Buckyballs recall and stop sale will lead to a significant decrease in injuries to high-powered magnets.