More than just losing his balls … [Darleen Click]
The Nanny State will make sure to punish all dissent.
‘So this is what starting over looks like. I have a seven-by-seven space with two little desks in it.”
Craig Zucker is remarkably good-humored, considering what he’s been through over the past year—and the tribulations that lie ahead. He’s referring to his office, rented month-to-month in a dilapidated building in a dusty corner of Brooklyn. There is construction all around, graffiti on the brick walls, and unfinished doors and windows.
It’s a long way from the Soho digs the 34-year-old used to occupy. Mr. Zucker is the former CEO of Maxfield & Oberton, the small company behind Buckyballs, an office toy that became an Internet sensation in 2009 and went on to sell millions of units before it was banned by the feds last year. [...]
On July 10, 2012, the Consumer Product Safety Commission instructed Maxfield & Oberton to file a “corrective-action plan” within two weeks or face an administrative suit related to Buckyballs’ alleged safety defects. Around the same time—and before Maxfield & Oberton had a chance to tell its side of the story—the commission sent letters to some of Maxfield & Oberton’s retail partners, including Brookstone, warning of the “severity of the risk of injury and death possibly posed by” Buckyballs and requesting them to “voluntarily stop selling” the product.
It was an underhanded move, as Maxfield & Oberton and its lawyers saw it. “Very, very quickly those 5,000 retailers became zero,” says Mr. Zucker. The preliminary letters, and others sent after the complaint, made it clear that selling Buckyballs was still considered lawful pending adjudication. “But if you’re a store like Brookstone or Urban Outfitters . . . you’re bullied into it. You don’t want problems.”
As for the corrective-action plan, it was submitted at 4 p.m. on the July 24 deadline. Yet the very next morning the commission filed an administrative lawsuit against Maxfield & Oberton, suggesting the company’s plan was never seriously considered. [...]
Buckyballs’ initial conception and subsequent marketing, Mr. Zucker says, shows they were never intended for children. “We were in the lexicon of popular culture,” he says. “And if you look back at this press, it was very clearly targeted at the adult community. It was in People magazine, in Real Simple magazine—it was never in Parenting magazine saying they’re great for children.”
Mr. Zucker and his colleagues were particularly appalled by the commission’s claims, given that the warnings and safety programs they used were developed in collaboration with commission staff. [...]
Nonetheless, the commission pressed ahead with its war on Buckyballs. Most infuriating was the commission’s argument that a total recall was justified because Buckyballs have “low utility to consumers” and “are not necessary to consumers.”
“Two and a half million adults spent $30 on a product,” Mr. Zucker says. “This wasn’t a $5 impulse buy. This was a product that American adults thought had value and wanted it. It’s not the government’s place to say what has value and what doesn’t in a free society.”
Maxfield & Oberton resolved to take to the public square.On July 27, just two days after the commission filed suit, the company launched a publicity campaign to rally customers and spotlight the commission’s nanny-state excesses. The campaign’s tagline? “Save Our Balls.” [...]
“It was a very successful campaign,” says Mr. Zucker, “just not successful enough to keep us in business.” On Dec. 27, 2012, the company filed a certificate of cancellation with the State of Delaware, where Maxfield & Oberton was incorporated, and the company was dissolved.
“The inventory was sold and the business ended,” says Mr. Zucker. He thought it was an “honest and graceful exit” to a broken entrepreneurial dream.
But in February the Buckyballs saga took a chilling turn: The commission filed a motion requesting that Mr. Zucker be held personally liable for the costs of the recall, which it estimated at $57 million, if the product was ultimately determined to be defective. [...]
Says Mr. Zucker: “The commission’s saying that because as CEO I did my duty—didn’t violate any law, was completely lawful—I am now the manufacturer individually responsible.” Shockingly, the administrative-law judge hearing the case bought the commission’s argument, meaning Mr. Zucker will have to defend himself in the Maxfield & Oberton recall case to its conclusion at the administrative level before he can challenge the individual-liability holding on appeal.
Given the fact that Buckyballs have now long been off the market, the attempt to go after Mr. Zucker personally raises the question of retaliation for his public campaign against the commission. Mr. Zucker won’t speculate about the commission’s motives. “It’s very selective and very aggressive,” he says. “If you want to ask if this is some sort of reprisal, well, they don’t need Craig Zucker anymore.”
Mr. Zucker says his treatment at the hands of the commission should alarm fellow entrepreneurs: “This is the beginning. It starts with this case. If you play out what happens to me, then the next thing you’ll have is personal-injury lawyers saying ‘you conducted the actions of the company, you were the company,’ ”
And if the commission’s reasoning on Buckyballs were to stand, “you won’t have a free market anymore—you end up with a place where adults aren’t choosing which products they can own.”
Indeed, that’s the end game.