This morning I watched the oral arguments before the CPSC in the staff appeal of the ALJ’s decision in the Zen Magnets case. I felt as if I was watching World War One trench warfare in modern dress. And like trench warfare where the combatants refuse to give an inch, insisting on holding their positions, what we saw this morning was both wasteful and futile, made worse by a predetermined outcome.
To recap, this morning’s exercise was the latest in the long running battle between the CPSC and Zen Magnets which sells small rare earth magnets (“SREMs”). The agency argues that the magnets are defective because small children can ingest them with resulting severe injuries. In addition, the agency argues that the magnets are “toys” and violate the toy safety standard which prescribes how powerful magnets used in toys can be. The agency brought an administrative action to recall the magnets but the administrative law judge who heard the case did not buy the CPSC’s arguments. Instead, he found that the magnets were not defective when accompanied with proper warnings and age restrictions and that the toy standard does not apply to such magnets. The agency staff does not accept this determination and instead appealed it to the Commission—the same body that voted to bring the administrative action in the first place. I have not found even one person who believes that a majority of the Commissioners will not vote to overturn the ALJ’s decision and order a recall. At that point, the order will be final agency action and ripe for judicial review.
The ALJ’s decision is not the only skirmish on this subject that the agency has lost. At the end of last year, the Tenth Circuit U.S. Court of Appeals overturned a federal safety standard issued by the Commission which effectively banned the sale of SREMs by restricting the permissible strength and size of the magnets. The court found that the agency failed to properly address the degree of the risk posed by the product and also the utility of the product. As a result of these shortcomings, the court overturned the rule. A majority of the Commissioners have now voted to re-propose the rule to correct the deficiencies identified by the court—in other words, beef up the record but still ban the product.
Today’s hearing covered a lot of ground. For example, even though the agency put incident data into the administrative record, the staff sidestepped shortcomings found in the data (since the incidents could not be attributed to Zen), indicating that no injuries or incidents are needed to support a defect finding. There was a great deal of discussion about the role of consumer misuse, and the adequacy of warnings and labels. The Commission asked about the applicability of the toy standard to a general use product.
While this all may be interesting to students of martial arts or administrative law, what should be of concern is that consumer safety has gotten lost in these protracted battles—and this must be laid at the doorstep of the agency. Putting Zen Magnets out of business—which seems to be the objective of the exercise—will not stop SREMs from getting into the hands of consumers. By shutting down the remaining U.S. company that has aggressive warnings and marketing practices that minimize children’s exposure to the product, the agency leaves the field open to the many other companies, based outside the U.S., that are now selling the product without warnings—and without any interference from the CPSC.
If the agency had spent the resources that it has devoted to this case to looking at what is now going on in the market, rather than seeking to stop the leading proponent of safe and responsible magnet use and who is seeking to bring better safety awareness to the industry, it would be fulfilling its safety mission. If the agency had accepted the many offers that have been made to educate the public on magnet safety, it would be fulfilling its safety mission. Instead, it just feels like the agency is fighting a grudge match—what a waste!
The futility of the agency’s position is also maddening. The magnet recalls that have been done resulted in a dismal return rate. In other words, the public likes the product—not just because it is very cool but also because it has high utility as an educational, creative and artistic product. While the agency discounts these uses, the public does not. What the agency has not done and refuses to do is consider whether there are any ways to reconfigure the packaging, beef up the warnings, put in place marketing restrictions, and engage in education efforts so that the public can have access to the product with safety considerations part of the equation. It has done this with other products that present much greater risks to children—button batteries, for example. However, this would require the agency to get out of the trenches and this it refuses to do. So the magnet wars continue into the future and real consumer safety is the main casualty.