Keep it in “Park”: How the CPSC is Stretching the Responsible Corporate Officer Doctrine Beyond the Breaking Point
Craig Zucker v. CPSC, No. 13-3355 (D. Md. filed Nov. 12, 2013)
On February 11, 2013, the Consumer Product Saety Commis-sion (CPSC) changed the rules when it named Craig Zucker—in his personal capacity—as part o a potential $57 million product recall. Even the CPSC admits that Mr. Zucker has broken no law and the CPSC is not trying to pierce the corporate veil. Nevertheless, the CPSC wants Mr. Zucker to pay or a recall o Buckyballs, a product his company Maxfield & Oberton used to sell. Buckyballs are an executive desk toy made o small, powerul magnets that can be ormed into innumerable shapes. In 2011,
People Magazine
listed them among the five hottest trends o the year. Tey are completely sae when used as intended, but like many products, can be dangerous i misused. Afer a small number o high-profile cases o the magnets being swallowed, the CPSC deviated rom its normal recall procedure and wrote a letter to Buckyballs’ retailers, urging them to stop selling the product. Te stores complied and Maxfield & Oberton quickly shut down. Not satisfied with putting his company out o business, the CPSC targeted Mr. Zucker, while allowing nearly identical products made by his competitors to remain on the market.
Te CPSC is making an unprecedented power grab by trying orce an individual to pay or a recall.
Never beore in its 42-year history has the CPSC attempted to bypass a company and make an individual pay or a recall. Te CPSC’s legal theory distorts the
Park
doctrine, which allows a corporate officer to be held responsible or
criminal
actions that he commits through his company. Neither Mr. Zucker nor his company has committed any crime. Moreover, it is still legal to make and sell Buckyballs. On November 12, 2013, Mr. Zucker, through Cause o Action, sued the CPSC in ederal court to stop this unprecedented regulatory overreach.
BRIEFING BOOK
D
isregarding the corporate orm by going afer business owners in their personal capacity hurts entrepreneurs and chills investment.
American law encourages people to become entrepreneurs and invest in companies by separating the personal and the corporate—protecting people rom financial ruin i their businesses do not succeed. Protecting business owners and investors rom a company’s liabilities is a oundational pillar o corporate law. It is so important that individuals are held personally liable in only rare instances, such as when a corporate officer knowingly commits a crime through the company or an individual uses his business as a ront or personal activities. Te CPSC does not allege that Mr. Zucker committed a crime or disrespected his company’s corporate orm.
Te CPSC is retaliating against Craig Zucker or fighting back.
While his product was on the market, Mr. Zucker’s company worked hand-in-hand with the CPSC to ensure proper product warn-ings and saety programs were in place. In act, the CPSC not only approved the Buckyballs saety program, but awarded the program’s designer a Circle o Commendation Award in 2013 or her “significant, liesaving contributions to consumer product saety.” But Mr. Zucker’s willing cooperation apparently was not good enough or the CPSC. When Mr. Zucker learned the CPSC intended to shut down his business, he started to speak out. He launched a website to educate his customers and other small businesses about what the CPSC was doing to him. He used humor and levity to try to cut through the bureau-cratic conusion and to educate the public. In response, the CPSC lashed out and named him personally liable in the proceeding against his company. Tis is what happens when bureaucrats have too much power and dislike what private citizens are saying about them.
Te CPSC is “saying that because as CEO I did my duty—didn’t violate any law, was completely lawful—I am now the manufacturer individually responsible” to conduct the recall.
—
Craig Zucker
Case Files and Attachments
Craig Zucker APA Complaint against CPSC........................................................3U.S. Chamber o Commerce Amicus Brie in
........................24op Law Firms rack Important Issue.................................................................38Washington Legal Foundation: CPSC’s Misuse o RCO Doctrine Bodes Ill or CEOs and Consumers...................................................................................41CPSC Stonewalls: Cause o Action Sues under FOIA.......................................45Inormation Quality Act Petition or Correction and Disclosure...................52CPSC Gives Saety Award to Designer o Buckyballs’ Saety Program...........63CPSC Confirms Buckyballs are Still Legal to Sell..............................................65United We Ball: Zucker Uses Humor to Expose Overreach.............................67Former CPSC Commissioner Nancy Nord in Te Wall Street Journal: Te Irrational Federal War on Buckyballs........................................................73
Zucker v. CPSC
, Briefing Book Page 3
IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MARYLANDGreenbelt Division
________________________________________________
CRAIG ZUCKER,)Brooklyn, NY 11211)Kings County,)Plaintiff,))v.))Case No._______________ UNITED STATES CONSUMER PRODUCT)SAFETY COMMISSION )4330 East West Highway )Bethesda, MD 20814)Montgomery County, ))and))INEZ MOORE TENENBAUM, )CHAIRMAN OF THE UNITED STATES)CONSUMER PRODUCT SAFETY COMMISSION )(official capacity),)4330 East West Highway )Bethesda, MD 20814)Montgomery County, ))Defendants.))COMPLAINT
Plaintiff Craig Zucker (“Mr. Zucker”), through his counsel CAUSE OF ACTION, INC., a 501(c)(3) government accountability organization, files this complaint for declaratory and injunctive relief against the United States Consumer Product Safety Commission (“CPSC”) and Inez Moore Tenenbaum (“Tenenbaum”), in her official capacity as Chairman of the CPSC.1
Case 8:13-cv-03355-DKC Document 1 Filed 11/12/13 Page 1 of 21