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Craig Zucker believes he had a "great American success story" until federal regulators shut him down for speaking up, but now the entrepreneur is fighting back.
Scraping together $2,000 with a partner, Zucker in 2009 began importing small, high-powered magnets from China. Dubbed "Buckyballs," the BB-sized magnets could form all kinds of shapes and quickly became a hot seller. A year of trade shows, blog posts and word of mouth brought sales to $10 million, and Zucker projected more than doubling that by 2012. With his product in 1,500 stores, the 34-year-old Zucker was living his entrepreneurial dream.
"It was the great American success story," Zucker recalled.
Rubinstein filed a lawsuit on behalf of Zucker asking the U.S. District Court in Maryland to prevent the agency from seeking damages from Zucker's own bank account under the rarely used Park doctrine, which protects principals behind limited liability corporations. The attorney said the commission's decision to go after Zucker personally puts every entrepreneur at risk and threatens the limited liability for owners. Zucker is raising funds for his defense by selling "Liberty Balls."
network dude
what's stopping them from going rouge and just taking money whenever they want? How is this any different than the organized crime?
network dude
It has to stop somewhere.
"Rather than work with Maxfield & Oberton to address the issue of children being injured by an adult product, the agency demanded an immediate recall," Nord writes. "When the company asked the agency to reconsider, the CPSC filed a lawsuit alleging that the product was defective because unintended users were misusing the product and suffering injuries. Instead of seeking an injunction against the sale of Buckyballs while the agency pursued its case, which the law allows, the agency approached retailers with an informal "request" that Buckyballs be removed from store shelves."
network dude
reply to post by abecedarian
Anyone remember these?
How is this product still allowed to be sold?
It's practically begging to be eaten!
Craig Zucker, CEO of Buckyballs, said that it'll "vigorously fight this action taken by President Obama's handpicked agency."
Buckyballs are made from rare-earth elements, which makes them much more powerful than most magnets — and potentially more dangerous when ingested. Though the product is marketed to adults and festooned with warning labels, regulators have moved to stop sales because children keep swallowing Buckyballs and similar products made by others.
The action involving Buckyballs and Zen Magnets is unusual because the safety commission rarely files an administrative complaint, which is essentially a request for a mandatory recall.
There were an estimated 1,700 incidents of rare-earth magnets being swallowed and requiring emergency room care, in some cases surgery, in the three years beginning in January 2009, according to the safety commission.
Swallowing two or more rare-earth magnets is particularly dangerous because they attract each other in the intestines and can cause blockages, tissue damage and even perforation.
“Kids do swallow all kinds of stuff, but few pose the kind of risk that these magnets do,” said Dr. Bryan Vartabedian, a pediatric gastroenterologist at Texas Children’s Hospital, who treated a toddler whose bowel had been perforated after swallowing rare-earth magnets. “These are very unique magnets. They are incredibly powerful.”
luxordelphiThese elements create very powerful magnets. Ingested, by a child, they can and will rip right through intestines and other internal organs.
abecedarian
luxordelphiThese elements create very powerful magnets. Ingested, by a child, they can and will rip right through intestines and other internal organs.
And considering they are only sold to adults, whose fault is it they end up in the hands of children?
The company's fault?