Product Liability: by using the “responsible corporate officer” doctrine, the Consumer Product Safety Commission breaks new legal ground in Buckyballs recall

Cases of serious personal injury such as small holes in the stomach and colon, colon blockage, blood poisoning and death have been reported in recent years to the CPSC after children swallowed two or more tiny magnetic stacking balls that attracted one another internally.

High-powered magnetic stacking balls such as Buckyballs,® are marketed to adults as a desk toy and stress reliever. They are used to create patterns and build shapes. They are usually sold in sets of 200 pieces or more in stationery, office supply and gift stores, and also on the Internet.

Even though they are prohibited for children younger than 14, growing reports of incidents led the U.S. Consumer Product Safety Commission (CPSC) to recall Buckyball sets of tiny magnetic stacking balls declaring them a swallowing hazard to young children.

Buckyball manufacturer, Maxfield & Oberton Holdings challenged the action claiming the warning label on the packaging was sufficiently clear. The legal battle bankrupted Maxfield & Oberton but it was not over. In an unusual step, the lawyers for the CPSC added Craig Zucker, as a respondent in the recall action, arguing that he controlled the company’s activities. This could ultimately hold Zucker responsible for the estimated recall costs of $57 million.

The “responsible corporate officer” doctrine (Park doctrine) is usually used in criminal cases. It is the first time that the CPSC is using it in a recall action.

Well known business organizations are arguing that the CPSC is overreaching and that holding an individual responsible for a widespread, expensive recall sets a disturbing example and runs counter to the legal limitation of corporate liability to the corporation only.

To raise money for his defense, Craig Zucker has launched a “United We Ball” campaign on social media and sells Liberty Balls, which are a bigger version of the Buckyballs but are too big to be considered a swallowing hazard.

The New York Time recently released an excellent article on this very interesting product liability case.