By Pamela C. Maloney, J.D.
A CPSC administrative law judge has determined that not all Small Rare Earth Magnets (SREMs), and especially those marketed as Zen Magnets and Neoballs, are a substantial product hazard because the instructions, packaging, and warnings were adequate to apprise U.S. consumers of the risks associated with the product. Furthermore, based on the warnings and manner in which these two products were marketed, they were not toys as defined by the applicable standard. However, the ALJ did find that before May 2010, some of these products were sold without warnings and, therefore, he ordered Zen Magnets to institute a corrective action plan with regard to magnet sets sold before 2010 (In the Matter of Zen Magnets, LLC, March 25, 2016, Metry, D.).
Substantial product hazard. According to the ALJ, the Consumer Product Safety Commission failed to prove that SREMs, and in particular the ones sold by Zen Magnets, LLC, under the brand names Zen Magnets and Neoballs, were a substantial product hazard under the Consumer Product Safety Act because they contained a product defect that created a substantial risk to the public. Although the agency did prove that ingesting SREMs created a real risk of injury, ingestion was not part of the product’s “use” or “operation,” but rather was a misuse of the product. Furthermore, contrary to the agency’s argument, the risk of separation of SREMs alone did not create a risk of injury. The fact that two or more magnets could become separated from the primary cluster did not result in any exposure to danger. It was the separation of two or more magnets plus oral insertion followed by swallowing the magnets that created the risk of injury. Based on a review of the record, the ALJ concluded that the company in no way intended, designed, marketed, or manufactured these SREMs for initial oral or nasal insertion, and there was no evidence that any consumer accidentally or unintentionally ingested Zen’s SREMs.
Adequacy of warnings. The CPSC also failed to prove the existence of a fault, flaw, or irregularity in the warnings associated with Zen Magnets or Neoballs. The ALJ reiterated that the risk of injury associated with SREMs arises from ingestion, which was repeatedly and expressly addressed by the products’ warnings. Specifically, the warnings notified consumers of the ingestion hazards and noted the risk of intestinal pinching. They also informed consumers to keep them away from orifices and to seek immediate medical attention if ingestion occurred.
The ALJ also admonished the agency that it would be a “near absurdity” to fault Zen Magnets for not labeling each individual SREM with a warning, even assuming it would be possible to do so. Given the size of each SREM, which is approximately 5 mm in diameter, the warnings would be too small to see and, thus, no consumer could possibly be informed by such a warning. Hence, the lack of a warning associated with each individual SREM did not result from a fault, flaw, or irregularity but from practicality.
Risk-utility analysis. In order to determine whether SREMs were a substantial product hazard under CPSC regulations, the ALJ was required to weigh the nature of the risk of the product against the product’s usefulness. After weighing the risk of injury against the product’s utility and considering the other factors set forth in the regulation, the ALJ concluded that the usefulness of SREMs outweighed the risk of injury associated with them. The parties agreed that the risk of injury emanated from ingestion; however, the nature of the risk of SREM ingestion was significant only when they were advertised for oral ingestion and/or when combined with a lack of parental supervision. Because Zen Magnets’ products specifically warned against ingestion and the products were never advertised for ingestion, the nature of the risk of injury was negligible when accompanied by proper warnings and appropriate age restrictions.
On the other hand, the utility of SREMs was extremely high, according to the ALJ. The record showed that they were excellent instruments for teaching physics, chemistry, mathematical concepts, structures, and material strengths. They were also useful as art and, ultimately, for curiosity. In addition, the number of individuals exposed to the risk of injury was small in comparison to the number of individuals exposed to the product itself, and the warnings adequately addressed the risk of injury associated with these products. Although misuse was foreseeable, the ALJ again found that the danger of misuse was mitigated by the warnings given.
Application of toy standard. The ALJ agreed with Zen Magnets that the toy standard did not apply to these products. There was no evidence that the company advertised, marketed, and/or designed these SREMs as a plaything for children under 14 years of age. The fact that children under the age of 14 were possible users of SREMs did not qualify the SREMS as toys, nor did calling these products a “toy” necessarily lead to the conclusion that they fell within the toy standard. Zen Magnets took specific steps to ensure that the sale of these products was restricted to adults, including requiring retailers to follow a rigorous protocol to ensure that consumers were over age 18. Thus, the ALJ concluded that to the extent these products were accompanied by proper warnings and age restrictions, the toy standard did not apply.
SREMs sold without warnings/age restrictions. The record did show that Zen Magnets had sold some of these SREMs without warnings before May 2010. The ALJ found that without warnings, and with the suggestion that use by children under the age of 12 was appropriate, SREMs are substantial product hazards and are toys under the toy safety standard. Thus, the ALJ ordered Zen Magnets to compile a list of all known SREM purchasers of the product without warnings (i.e., before May 2010). Thereafter, the company was ordered to contact these customers and provide specific warnings about SREM ingestion hazards and to provide purchasers an opportunity to return the product for a full refund for a substantially complete set of the purchased product.
The case is CPSC Docket No. 12-2.
Attorneys: Jamie L. Mendelson, U.S. Attorney’s Office, for United States of America. David C. Japha (The Law Offices of David C. Japha, PC) for Zen Magnets, LLC.
Companies: Zen Magnets, LLC
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