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Buckyballs founder agrees to product recall in settlement with federal regulators

The founder of a popular magnetic office toy known as Buckyballs has agreed to recall the product as part of a settlement with the Consumer Product Safety Commission, ending a legal dispute that started last summer.

Entrepreneur Craig Zucker will establish a trust fund to pay for the recall, the CPSC said in a statement on Monday. The move signals that he dropped a lawsuit to prevent the commission from holding him personally responsible for the effort after he dissolved the company that made the high-powered magnet sets.

“The law does not support an individual being named in a case like this and I hope that this settlement will discourage the CPSC from wrongfully pursuing individual officers and entrepreneurs again in the future,” Zucker said in a statement.

Federal regulators claim that more than 1,000 children have swallowed various brands of small magnets, requiring major surgery after the pellets connected through their organs. The CPSC sought a mandatory recall of Buckyballs and similar products after determining they posed a “substantial hazard.”

MORE: Federal regulators suing Buckyballs founder in rare product-recall case

Cause of Action, a conservative legal group assisting Zucker with his legal defense, said the businessman agreed to pay less than 1 percent of the $57 million the commission once estimated the recall effort would cost.

Zucker fought the CPSC, arguing that the government cannot hold an individual responsible for alleged product-safety issues and that he collaborated with regulators to mitigate any dangers his products might pose to children.

The legal battle tested the CPSC’s ability to force product developers to pay for recalls. The commission does not have funding to carry out such efforts itself.

Zucker claimed the CPSC sued him as an act of retaliation after he criticized the agency for heavy-handed enforcement actions the allegedly crippled his business. Cause of Action said in a statement on Monday that the Buckyballs case represented “yet another example of a federal agency gambling with taxpayer dollars to test its own power.”

Cause of Action said it is pursuing litigation against the CPSC to uncover documents that might show the commission “values retaliation against its critics above its own mission to protect consumers.”

The CPSC said in a statement on Monday that the recall effort will “protect children and teenagers from the risk of injury that can occur when multiple magnets are ingested.”

The commission said consumers should immediately stop using Buckyballs and Buckycubes, in addition to locating magnets that have become separated from their sets. Zucker’s recall trust will provide refunds to those who return the products, the agency said.

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