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Toys Government The Courts United States

U.S. Gov't Still Fighting the Man Behind Buckyballs; Guess Who's Winning? 555

Posted by Soulskill
from the interfering-with-natural-selection dept.
usacoder writes with news of Craig Zucker, former CEO of the company behind Buckyballs, the popular neodymium magnet toys that were banned by the U.S. Consumer Product Safety Commission in July 2012. Zucker ran a brief campaign to drum up opposition to the government's ban, but it didn't turn out to be enough. Unfortunately for Zucker, the story didn't end there. Despite the magnets being labeled as not for kids, the Commission filed a motion to find him personally liable for the costs of a product recall, estimated at around $57 million. "Given the fact that Buckyballs have now long been off the market, the attempt to go after Mr. Zucker personally raises the question of retaliation for his public campaign against the commission. Mr. Zucker won't speculate about the commission's motives. 'It's very selective and very aggressive,' he says. ... Mr. Zucker says his treatment at the hands of the commission should alarm fellow entrepreneurs: 'This is the beginning. It starts with this case. If you play out what happens to me, then the next thing you'll have is personal-injury lawyers saying "you conducted the actions of the company, you were the company."'"
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U.S. Gov't Still Fighting the Man Behind Buckyballs; Guess Who's Winning?

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  • by wiredlogic (135348) on Saturday August 31, 2013 @05:54PM (#44726585)

    What's the sense in having laws if you can't apply them selectively and perniciously.

  • by nurb432 (527695) on Saturday August 31, 2013 @06:00PM (#44726611) Homepage Journal

    Just shut up and take it.. Ask for more. How dare you create a product that could be misused if used inappropriately.

    Now, joking aside this is really scary that the government is doing this.

  • How about (Score:5, Insightful)

    by Anonymous Coward on Saturday August 31, 2013 @06:00PM (#44726617)
    How about the parents who gave their [now dead] children (read: under 13) the thing be charged with manslaughter, unless giving them other things they shouldn't have which results in death [the list is is quiter long, but includes firearms, cutlery, chemicals, etc.] is also okey-dokey.
  • by Anonymous Coward on Saturday August 31, 2013 @06:10PM (#44726667)

    As long as were piercing the corporate veil, shouldn't we go after the CEO's that have cost the US taxpayers billions of dollars first? Or are government rules and regulations, and punitive actions only applicable for the little guy?

  • by Brymouse (563050) on Saturday August 31, 2013 @06:16PM (#44726703)

    If it was me and I had my life's work taken from me, and now being forced into bankruptcy and poverty, I'd hold the CPSC leaders responsible.

    A government without fear of the people is not a republic. Time to put the fear back into them.

  • by Phasedshift (415064) on Saturday August 31, 2013 @06:25PM (#44726757)

    Buckyballs were labeled as for adults and not for kids before the commission came after him. However, because they are so similar to a "toy" it was labeled as a concern by the government. In my opinion, this action removes personal responsibility from the parents (the product was clearly labeled), and there should have been no actions against Buckyballs as long as they were properly labeled. There are many other products out there that are far more dangerous which look like toys which do not have these concerns.

    Further, it begs the question:

    Is it the norm for similar cases where the owner/company simply went out of business (without doing a recall) on an unsafe product, for the owners to be held liable for the cost of a potential recall after the fact?

      If he is held personally liable, but a large number of other cases had companies which went out of business and the owners were not held liable - it seems likely there was some type of bias on his case.

    One last item:

    Protection from personal liability when you are a shareholder/officer of a corporation isn't absolute (you can still be held legally personally liable in certain cases.) Certain people here advise they don't like this fact, as they feel people should be personally liable. However, to be frank - fewer people would take risks if they faced personal ruin due to a lawsuit. A better option would be to revoke a company's incorporation status and in repeat offenses remove the ability for people to be part of another corporation perhaps. This would have the positives, without the negatives.

  • by Zero__Kelvin (151819) on Saturday August 31, 2013 @06:30PM (#44726785) Homepage
    ROTFLMA. The servers at www.cpsc.gov are broke:

    Server Error in '/' Application. Runtime Error Description: An application error occurred on the server. The current custom error settings for this application prevent the details of the application error from being viewed remotely (for security reasons). It could, however, be viewed by browsers running on the local server machine. Details: To enable the details of this specific error message to be viewable on remote machines, please create a tag within a "web.config" configuration file located in the root directory of the current web application. This tag should then have its "mode" attribute set to "Off". Notes: The current error page you are seeing can be replaced by a custom error page by modifying the "defaultRedirect" attribute of the application's configuration tag to point to a custom error page URL.
  • by _Ludwig (86077) on Saturday August 31, 2013 @06:31PM (#44726791) Journal

    Corporate personhood, entrepreneurship, big business vs. small, selective enforcement, none of those are the issue here. The issue is that corporations exist specifically to protect the personal assets of the individuals behind them. Otherwise no one would invest in anything, since that would expose all their worldly goods to liabilities incurred by the company, instead of just the amount they invested. (Lloyd’s of London is a notable exception; investors pledge all their personal assets. But that’s a special case.)

    Now, criminal wrongdoing is a different matter. Obviously you don’t get to form an LLC to rob banks and then enjoy immunity. But that’s not what’s happening here.

    • by whoever57 (658626)

      (Lloydâ(TM)s of London is a notable exception; investors pledge all their personal assets. But thatâ(TM)s a special case.)

      They are not "investors", they are called "Names", since they don't actually put their capital into Lloyds, they pledge their assets to pay any losses. There is huge risk, but the rewards can also be great since the assets that are pledged can be invested elsewhere for profit.

  • So they find that he sold a defective product (given that the judge and the persecuting agency are one and the same, that's a foregone conclusion), they find him personally liable, they take everything he owns and everything he'll make in the future... maybe he should hold the administrative judge and the particular CPSC bureaucrats involved personally responsible.

  • by Greyfox (87712) on Saturday August 31, 2013 @06:34PM (#44726821) Homepage Journal
    He should have just marketed a real gun for kids. He'd probably still be in business, and some court would probably have ruled that neither he or his company could be sued for damages resulting from the use of his product. Perhaps his next venture should be buckyguns.
    • by russotto (537200)

      He should have just marketed a real gun for kids. He'd probably still be in business, and some court would probably have ruled that neither he or his company could be sued for damages resulting from the use of his product.

      That's true, for good reason. You see, the CPSC is explicitly denied jurisdiction over firearms and firearms ammunition. Know why? Because in 1975, Handgun Control Incorporated tried to get the CPSC to ban handgun ammunition; HCI went so far as to get the US District Court for the Distr

  • It's not the government's place to say what has value and what doesn't in a free society.

  • If he wins his case will the individuals at the Consumer Product Safety Commission be personally liable to pay his costs & the Commission's legal bill ? After all: they were the ones who made the decision to engage in reckless litigation!

    No: I thought not.

  • frivolous (Score:5, Insightful)

    by chrismcb (983081) on Saturday August 31, 2013 @07:29PM (#44727141) Homepage
    Is everyone just ignoring the reasons given for a recall? From TFA:

    Most infuriating was the commission's argument that a total recall was justified because Buckyballs have "low utility to consumers" and "are not necessary to consumers."

    Quite a LOT of stuff is sold that is low utility to consumers, and not necessary. Should something, bought by consenting adults, for adults, be recalled because it might pose a danger, and is "low utility?"

  • by silentcoder (1241496) on Saturday August 31, 2013 @07:32PM (#44727165) Homepage

    They beat stress-balls over and over when you need a coding break.

    All I can say is: only in America can they ban a magnet but argue against even the most basic control over a gun...

  • Limited liability (Score:4, Insightful)

    by Impy the Impiuos Imp (442658) on Saturday August 31, 2013 @09:17PM (#44727733) Journal

    The purpose of the limited-liability corporation is that corporate liabilities stop with the company's assets and do not follow into the pockets of the owners.

    Certain insurance companies (Lloyds of London) do not have limited liabilities because the owners back the policies with their huge fortunes, giving you assurance the company has the funds to pay out if necessary. Some spectacular tanker and space shot losses about 10 years ago got them into trouble as some people had to sell their estates to make good.

    Unless this guy was involved in some massive fraud, this isn't supposed to happen.

  • by hack slash (1064002) on Saturday August 31, 2013 @11:59PM (#44728433)
    Why aren't they banned too?

    http://www.bakersfieldnow.com/news/local/Kylie-Rose-Ricards-220881061.html

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