May 2014 brought an ordinary end to a series of extraordinary events, with the Consumer Product Safety Commission (CPSC) settling an unprecedented proceeding against Craig Zucker, the former CEO of Buckyballs® manufacturer Maxfield and Oberton Holdings, LLC (“Maxfield and Oberton”). The CPSC had sought 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). Zucker responded by suing the CPSC for injunctive relief and a declaration that the CPSC’s actions violated his First and Fifth Amendment rights.
SOUND AND FURY, SIGNIFYING NOTHING? -
Despite estimating the cost of recall to be $57 million, the CPSC settled with Zucker for $375,000—less than one percent of the estimated cost. Pursuant to the settlement, Zucker initiated a voluntary recall that offers a refund to consumers. Of the $375,000 settlement amount, $75,000 is to be used to publicize the recall and conduct a notice campaign pursuant to Section 15 of the Consumer Product Safety Act. The rest of the settlement will fund the consumer refunds. Zucker did not admit that Buckyballs® were defective, a substantial product hazard, or children’s toys; or that the CPSC had jurisdiction over him as an individual. The settlement is only in Zucker’s capacity as a responsible corporate officer, and not on behalf of Maxfield and Oberton.
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Topics: Buckyballs, CPSC, Fifth Amendment, First Amendment, Personal Liability, Product Recalls
Published In: Civil Procedure Updates, Civil Remedies Updates, Constitutional Law Updates, Consumer Protection Updates, Products Liability Updates
DISCLAIMER: 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.
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