United States: Buckyballs® Strike Back: Former CEO Sues CPSC

Last Updated: November 26 2013
Article by Erin M. Bosman, Julie Y. Park and Jeffrey M. David

In May 2013, the Consumer Product Safety Commission (CPSC) took the unprecedented step of naming Craig Zucker in an administrative complaint against Maxfield and Oberton Holdings, LLC, the manufacturer of Buckyballs®, in order to hold Zucker personally liable for a product recall. In the Matter of Maxfield & Oberton Holdings, LLC, CPSC Docket Nos. 12-1, 12-2, 1302 (May 3, 2013). Now Zucker has taken an equally unprecedented step: he has sued the CPSC for injunctive relief and a declaration that the CPSC's actions violate his First and Fifth Amendment rights.


In its May 2013 filing, the CPSC sought to force Zucker, the former CEO of Maxfield & Oberton ("M&O"), to personally conduct recall and remedial efforts for Buckyballs®, the high-powered magnets that the CPSC has ordered off the market due to injuries caused by ingestion of the magnets.1 If the CPSC prevails, Zucker would not only have to personally fund the recall efforts, but he would also be financially responsible for refunding customers the purchase price of the Buckyballs®.

The Consumer Product Safety Act (CPSA) states that manufacturers, distributors and retailers are responsible for recalls—not individuals. Individuals may be liable for criminal and civil penalties. Despite the apparent statutory limitations on the CPSC's enforcement authority, the CPSC was allowed to name Zucker under the responsible corporate officer doctrine as a proper respondent for the recall. As alleged by Zucker, "[a]fter driving M&O out of business CPSC has thrown its full weight against Mr. Zucker." This is the first time the CPSC has attempted to hold an individual personally responsible for a company's recall.

Understandably, Zucker has made significant efforts in the last six months to extricate himself from the CPSC's administrative proceedings. First, he sought leave for an interlocutory appeal. Having failed, he has now sued the CPSC in the District Court of Maryland seeking declaratory and injunctive relief.


On May 16, 2013, Zucker filed a "Motion for Determination that the Order Adding Craig Zucker as a Respondent Can be Immediately Appealed." Zucker argued that the order adding him to the complaint involved a controlling question of law or policy for which there is substantial ground for differences of opinion, and that an interlocutory appeal would materially advance the ultimate determination of the litigation (the standard under 16 C.F.R. § 1025.24(b)(4)(i) for such a motion). Specifically, Zucker argued that the expansion of the responsible corporate officer doctrine from criminal proceedings to a civil proceeding was a novel legal issue presenting a controlling question of both law and policy.

On, June 19, 2013, the Administrative Law Judge (ALJ) denied Zucker's motion. The ALJ found that the underlying substance of the litigation—whether or not Buckyballs® constitute a substantial product hazard under the CPSA—does not hinge on Zucker's inclusion as a respondent. Having found that an interlocutory appeal would not materially advance the litigation, the ALJ declined to address whether or not the motion addressed a controlling question of law or policy for which there is substantial ground for differences of opinion.


On November 12, 2013, Zucker took the unprecedented step of suing the CPSC in the U.S. Federal District Court for the District of Maryland. Zucker alleges that "[h]aving obliterated M&O, and having salted the earth by undermining the [liquidating trust's] ability to satisfy whatever claims that M&O might have left, CPSC turned its sights on Mr. Zucker." Zucker seeks declaratory and injunctive relief enjoining the CPSC from asserting adjudicative authority over him, and declaring that the CPSC has acted arbitrarily and capriciously and that its actions violate the First and Fifth Amendments.

Zucker argues that the CPSC has targeted him for selective administrative adjudication to punish him and deter him from exercising his First Amendment rights. Zucker's argument is based on the list of his infractions as provided by the CPSC, which includes communications with government personnel and statements in interviews and print that he believes the CPSC is wrong. As explained by Zucker, he "has been a thorn in CPSC's side and so CPSC has targeted him for retribution." He alleges that the chilling effect of the CPSC's actions are meant to also deny him due process under the Fifth Amendment.


In his latest efforts, Zucker is represented by Cause of Action, Inc., a watchdog group founded in 2011 by former congressional staffer Dan Epstein. Cause of Action bills itself as "Advocates for Government Accountability" and "uses investigative, legal, and communications tools" to fight government overreach.2

Zucker's actions have been supported by former CPSC Chair Nancy Nord, who wrote an op-ed in The Wall Street Journal on November 12, 2013, titled "The Irrational Federal War on Buckyballs." She elaborated on the op-ed with a statement on her own website the following day expressing disappointment in the CPSC's actions: "To now say that senior management's involvement, so essential to help protect consumers, could result in mind-blowing penalties imposed personally can only result in destroying the cooperative relationship the agency needs to do its job effectively."3 Similar sentiments have been expressed by Forbes, which called the CPSC's action "ludicrous" and a "clear overreach."4


The saga between Zucker and the CPSC will no doubt continue to mesmerize consumer product manufacturers and attorneys. Which side will take the next unprecedented action? Whatever that action is, consumer product manufacturers will want to watch closely to learn whether or not the CPSC can force an individual to conduct a recall, and what options an individual might have in fighting the CPSC's efforts.


1 For further analysis of the CPSC administrative proceeding, please see our previous Client Alert, "CPSC Seeks to Hold Former CEO Responsible for Buckyballs® Recall," available at http://www.mofo.com/files/Uploads/Images/130509-CPSC-Buckyballs.pdf .

2 http://causeofaction.org/abou t.

3 http://nancynord.net/2013/11/13/the-saga-of-buckyballs-how-not-to-regulate .

4 Michael Fertik, "Buckyball Busting is Bad for Business," Forbes (November 13, 2013, 11:32 AM), http://www.forbes.com/sites/michaelfertik/2013/11/13/buckyball-busting-is-bad-for-business-3/ .

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Erin M. Bosman
Julie Y. Park
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Morrison & Foerster LLP
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions