The U.S. Consumer Product Safety Commission (CPSC) has approved the terms of a consent agreement, in a 2-1 vote, with the now-defunct company that sold 2.5 million sets of Buckyballs® and Buckycubes®, highpowered magnetic adult desk toys that CPSC sought to subject to a voluntary recall on the ground that they presented a “substantial product hazard” and were defective because their instructions, packaging and warnings were inadequate. In re Maxfield & Oberton Holdings, LLC, No. 12-1
(CPSC, settlement approved May 9, 2014). Also agreeing to the settlement, which will require him to deposit $375,000 into an escrow account for the costs of recall notification and to provide consumer refunds, is former company CEO Craig Zucker. Without admitting any liability, he further agreed to drop any claims he had filed against the commission.
Each CPSC commissioner authored an individual statement. While Commissioner Ann Marie Buerkle approved the proposed settlement, she wrote to express her concern with the addition of Zucker to the proceeding in his individual capacity, noting that the commissioners had not approved the amended complaint that brought him into the dispute. Commissioner Marietta Robinson praised the outcome in light of the serious injuries purportedly caused by these types of products. Robert Adler, serving as acting chair until his nomination to the position is approved by the U.S. Senate, dissented on a number of grounds. He objected to the six-month duration of the recall claim period, the value of the settlement—a fraction of the value of all the products sold—and the agreement’s requirement that funds remaining in the escrow account be returned to Zucker.
Adler also highlighted an issue that has been of concern to legal commentators. The agreement supersedes the administrative law judge’s grant of CPSC staff’s request to add Zucker individually as a respondent. Thus, unanswered is whether the commission has the authority to include individuals as respondents. Adler believes that it does in appropriate cases, but expressed no opinion as to whether this was such a case.
Meanwhile, CPSC will conduct a telephonic prehearing conference on June 19 in related matters against Zen Magnets, LLC and Star Networks USA, LLC. The public is invited to attend the conference, which takes place in Galveston, Texas. See Federal Register, June 3, 2014.