With the support of manufacturing and retail interests, the former chief executive officer (CEO) of the company that made Buckyballs® and Buckycubes®, high-power magnetic desk toys subject to a recall enforcement action by the Consumer Product Safety Commission (CPSC), has filed a motion requesting an immediate appeal of an administrative ruling allowing CPSC to amend its complaint by adding him as a respondent. In re Maxfield & Oberton Holdings, LLC, CPSC Docket 12-1. The presiding officer apparently relied on the responsible corporate officer doctrine to allow the amendment, and CEO Craig Zucker characterizes this ruling as presenting “a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.”

Zucker contends that “whether individual officers or directors may be held liable under Section 15 for the conduct of corporate manufacturers, and hence may be held personally responsible for carrying out recall orders, implicates significant issues of CPSC policy. The Commission itself has never adopted a policy of holding individuals personally responsible for carrying out recall orders involving the corporation that manufactured or imported the subject products. A decision to permit such liability could have broad (and unpredictable) effects on CPSC enforcement policy and practices, and on the corporate governance procedures and policies of the entities the CPSC regulates.”

According to briefing filed by the National Association of Manufacturers, Retail Industry Leaders Association and National Retail Federation, “The decision has far-reaching, negative policy implications to large and small businesses alike which, if allowed to stand, will substantially change and degrade established Commission practice and federal product safety policy.” The trade associations further contend, “Individual officers and employees of corporations have not for decades been included as, or considered to be, responsible parties to the various Section 15 obligations.”

In a responsive pleading, CPSC cites a 1976 proceeding in which it named “individual corporate officers as respondents in a case under Section 15 alleging that refrigerators manufactured by a corporation presented a substantial product hazard. The Presiding Officer held the corporation’s officers to be individually responsible following extensive analysis under Park and Dotterweich.” Zucker argues that United States v. Park, 421 U.S. 658 (1975), and United States v. Dotterweich, 320 U.S. 277 (1943), were based on the wording of the applicable statute and that the Consumer Product Safety Act “applies only to persons who act as manufacturers, distributors or retailers.” According to Zucker, the statutes at issue in Park and Dotterweich “made ‘any person’ violating the law subject to criminal sanctions.’” If Zucker’s motion is granted, the CPSC commissioners will consider the matter.