Maxfield and Oberton Holdings, LLC; Complaint, 45342-45345 [2012-18641]

Agencies

• Consumer Product Safety Commission

[Federal Register Volume 77, Number 147 (Tuesday, July 31, 2012)]
[Notices]
[Pages 45342-45345]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18641]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 12-1]


Maxfield and Oberton Holdings, LLC; Complaint

AGENCY: Consumer Product Safety Commisson.

ACTION: Publication of a Complaint under the Consumer Product Safety 
Act.

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SUMMARY: Under provisions of its Rules of Practice for Adjudicative 
Proceeding (16 CFR part 1025), the Consumer Product Safety Commission 
must publish in the Federal Register Complaints which it issues. 
Published below is a Complaint in the matter of Maxfield and Oberton 
Holdings, LLC.\1\
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    \1\ The Commission voted 3-1 to authorize issuance of this 
Complaint. Chairman Inez M. Tenenbaum, Commissioner Anne M. Northup 
and Commissioner Robert S. Adler voted to authorize issuance of the 
Complaint. Commissioner Nancy A. Nord voted to not authorize 
issuance of the Complaint.

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SUPPLEMENTARY INFORMATION: The text of the Complaint appears below.

    Dated: July 26, 2012.
Todd A. Stevenson,
Secretary.

Complaint

Nature of Proceedings

    1. This is an administrative enforcement proceeding pursuant to 
Section 15 of the Consumer Product Safety Act (``CPSA''), as amended, 
15 U.S.C. 2064, for public notification and remedial action to protect 
the public from the substantial risks of injury presented by aggregated 
masses of high-powered, small rare earth magnets known as 
Buckyballs[supreg] and BuckycubesTM (collectively, the 
``Subject Products''), imported and distributed by Maxfield and Oberton 
Holdings, LLC (``Maxfield'' or ``Respondent'').
    2. This proceeding is governed by the Rules of Practice for 
Adjudicative Proceedings before the Consumer Product Safety Commission 
(the ``Commission''), 16 CFR Part 1025.

Jurisdiction

    3. This proceeding is instituted pursuant to the authority 
contained in Sections 15(c), (d) and (f) of the CPSA, 15 U.S.C 2064(c), 
(d) and (f).

Parties

    4. Complaint Counsel is the staff of the Division of Compliance 
within the Office of the General Counsel of the Commission (``Complaint 
Counsel''). The Commission is an independent federal regulatory agency 
established pursuant to Section 4 of the CPSA, 15 U.S.C. 2053.
    5. Respondent Maxfield is a domestic corporation with its principal 
place of business located at 180 Varick Street, Suite 212, New York, 
New York 20014. Respondent is an importer and distributor of the 
Subject Products known as Buckyballs[supreg] and 
BuckycubesTM.
    6. As importer and distributor of the Subject Products, Respondent 
is a ``manufacturer'' and ``distributor'' of a ``consumer product'' 
that is ``distributed in commerce,'' as those terms are defined in CPSA 
sections 3(a)(5), (7), (8) and (11) of the CPSA, 15 U.S.C. 2052(a)(5), 
(7), (8) and (11).

The Consumer Product

    7. The Subject Products are imported and distributed in U.S. 
commerce and offered for sale to consumers for their personal use in or 
around a permanent or temporary household or residence, a school, and 
in recreation or otherwise. The Subject Products consist of small, 
individual magnets that are packaged as aggregated masses in different 
sized containers holding 10, 125, and 216 small magnets, ranging in 
size from approximately 4.01 mm to 5.03 mm, with a variety of coatings, 
and a flux index of over 50. Upon information and belief, the flux of 
the Subject Products has reached levels ranging from 204.1 to 556 
kg\2\mm\2\ Surface Flux Index.
    8. Upon information and belief, Buckyballs,[supreg] which are small 
spherically shaped magnets, were introduced in U.S. commerce in March 
2009.
    9. Upon information and belief, BuckycubesTM, which are 
small cube shaped magnets, were introduced in U.S. commerce in October 
2011.
    10. Upon information and belief, the Subject Products are 
manufactured by Ningo Prosperous Imp. & Exp. Co. Ltd., of Ningbo City, 
in China.
    11. Upon information and belief, Respondent initially advertised 
and marketed Buckyballs[supreg] to appeal to children, calling it an 
``amazing magnetic toy.''
    12. Upon information and belief, Respondent advertised and marketed 
Buckyballs[supreg] by comparing its appeal to that of other children's 
products such as erector sets, hula hoops, and Silly Putty.
    13. Upon information and belief, despite making no significant 
design or physical changes to the product since its introduction in 
2009, Respondent subsequently rebranded Buckyballs[supreg] as an adult 
executive desk toy and/or stress reliever, marketing and advertising it 
as such.
    14. The Subject Products are sold with a carrying case and range in 
retail price from approximately $19.95 to $100.00. Upon information and 
belief, the Subject Products can also be purchased in sets of 10 for 
$3.50 without a carrying case.

[[Page 45343]]

    15. Upon information and belief, more than 2,000,000 
Buckyballs[supreg] have been sold to consumers in the United States.
    16. Upon information and belief, more than 200,000 
BuckycubesTM have been sold to consumers in the United 
States.

The Subject Products Create a Substantial Risk of Injury to the Public

    17. The Subject Products pose a risk of magnet ingestion by 
children below the age of 14, who may, consistent with developmentally 
appropriate behavior, place single or numerous magnets in their mouth. 
The risk of ingestion also exists when adolescents and teens use the 
product to mimic piercings of the mouth, tongue, and cheek and 
accidentally swallow the magnets.
    18. If two or more of the magnets are ingested and the magnetic 
forces of the magnets pull them together, the magnets can pinch or trap 
the intestinal walls or other digestive tissue between them, resulting 
in acute and long-term health consequences. Magnets that attract 
through the walls of the intestines result in progressive tissue 
injury, beginning with local inflammation and ulceration, progressing 
to tissue death, then perforation or fistula formation. Such conditions 
can lead to infection, sepsis, and death. Ingestion of more than one 
magnet often requires medical intervention, including endoscopic or 
surgical procedures. However, because the initial symptoms of injury 
from magnet ingestion are nonspecific and may include nausea, vomiting, 
and abdominal pain, caretakers, parents, and medical professionals may 
easily mistake these nonspecific symptoms for other common 
gastrointestinal upsets, and erroneously believe that medical treatment 
is not immediately required.
    19. Medical professionals may not be aware of the dangers posed by 
ingestion of the Subject Products and the corresponding need for 
immediate evaluation and monitoring. A delay of surgical intervention 
due to the patient's presentation with non-specific symptoms and/or a 
lack of awareness by medical personnel of the dangers posed by multiple 
magnet ingestion can exacerbate life-threatening internal injuries.
    20. Magnets which become affixed through the gastrointestinal walls 
and are not surgically removed may result in intestinal perforations 
which can lead to necrosis, the formation of fistulas, or ultimately, 
perforation of the bowel and leakage of toxic bowel contents into the 
abdominal cavity. These conditions can lead to serious injury and 
possibly even death.
    21. Endoscopic and surgical procedures may also be complicated in 
cases of multiple magnet ingestion due to the attraction of the magnets 
to the metal equipment used to retrieve the magnets.
    22. Children who undergo surgery to remove multiple magnets from 
their gastrointestinal tract are also at risk for long-term health 
consequences, including intestinal scarring, nutritional deficiencies 
due to loss of portions of the bowel, and possible fertility issues for 
women.

Count I

The Warnings and Labeling Are Defective as They Do Not Effectively 
Communicate the Hazards Associated With Ingestion of the Subject 
Product

    23. Paragraphs 1 through 22 are hereby re-alleged and incorporated 
by reference as though fully set forth herein.
    24. Since Buckyballs[supreg] were introduced into commerce in 2009, 
numerous incidents involving ingestions by children under the age of 14 
have occurred.
    25. Upon information and belief, on January 28, 2010, a 9-year-old 
boy used Buckyballs[supreg] to make tongue and lip rings, and 
accidentally ingested seven magnets. He was treated at an emergency 
room.
    26. Upon information and belief, on September 5, 2010, a 12-year-
old girl accidentally swallowed two Buckyballs[supreg]. She sought 
medical treatment at a hospital, including x-rays and monitoring for 
infection and internal damage.
    27. Since March 2009 to approximately March 11, 2010, the Subject 
Products were sold in packaging that contained the following warning 
label: ``Warning: Not intended for children. Swallowing of magnets may 
cause serious injury and require immediate medical care. Ages 13+.''
    28. In February 2010, CPSC notified Respondent that the 
Buckyballs[supreg] failed to comply with the requirement that such 
products be marketed to children 14+. On or about March 11, 2010, 
Respondent changed its packaging, warnings, instructions, and labeling 
on Buckyballs[supreg] and later conducted a recall of the products.
    29. Since recalling Buckyballs[supreg], Respondent agreed to 
certain labeling and marketing changes in an effort to prevent the sale 
of Buckyballs[supreg] to children under 14.
    30. Despite the marketing and labeling changes made by the 
Respondent, ingestion incidents continued to occur.
    31. Upon information and belief, on or about December 23, 2010, a 
3-year-old girl ingested 8 Buckyballs[supreg] magnets she found on a 
refrigerator in her home, requiring surgery to remove the magnets. The 
magnets had caused intestinal and stomach perforations, and had also 
become embedded in the girl's trachea and esophagus.
    32. Upon information and belief, on or about January 6, 2011, a 4-
year-old boy suffered intestinal perforations after ingesting three 
Buckyballs[supreg] magnets he thought were chocolate candy because they 
looked like the decorations on his mother's wedding cake.
    33. In November 2011, the Commission issued a public safety alert 
warning the public of the dangers of the ingestion of rare earth 
magnets. However, such ingestion incidents continue to occur. Since the 
November 10, 2011 safety alert, the Commission has received over one 
dozen reports of children ingesting the Subject Products, many of which 
required surgical intervention.
    34. Upon information and belief, on or about January 17, 2012, a 
10-year-old girl accidentally ingested two Buckyballs[supreg] after 
using them to mimic a tongue piercing. The magnets became embedded in 
her large intestine, and she had to undergo x-rays, CT scans, 
endoscopy, and an appendectomy to remove them. The girl's father had 
purchased the Buckyballs[supreg] for her at the local mall.
    35. Notwithstanding the labeling, warnings, and efforts taken by 
Respondents, ingestion incidents requiring surgery continue to occur 
because such warnings are ineffective.
    36. Warnings are ineffective because parents and caregivers do not 
appreciate the hazard associated with Subject Products and magnet 
ingestion and will continue to allow children to have access to the 
Subject Products. Children cannot and do not appreciate the hazard and 
will continue to mouth the items, swallow them, or, in the case of 
young adolescents and teens, mimic body piercings.
    37. Warnings are ineffective because once the Subject Product is 
removed from its carrying case, the magnets carry no warning guarding 
against ingestion or aspiration, and the small size of the individual 
magnets precludes the addition of such a warning.
    38. Warnings are ineffective because individual magnets are easily 
shared among children such that many end users of the product are 
likely to have had no exposure to any warning.
    39. The Subject Products are defective because their labeling and 
warning labels cannot guard against the foreseeable misuse of the 
product and prevent the substantial risk of injury to children.

[[Page 45344]]

    40. Therefore, the warnings and labeling on the Subject Products 
are defective pursuant to sections 15(a)(2) of the CPSC, 15 U.S.C. 
2064(a)(2).

Count II

The Subject Products as Designed Are Defective and Pose a Substantial 
Risk of Injury

    41. Paragraphs 1 through 40 are hereby realleged and incorporated 
by reference as though fully set forth herein.
    42. The Subject Products are defective because they do not operate 
exclusively as intended and present a risk of injury to the public. 
Although the Subject Products warn against placing the magnets in one's 
mouth, the misuse is forseeable.
    43. The Subject Products present a risk of substantial injury to 
children because the magnets are intensely appealing to children due to 
their tactile features, their small size, and their highly reflective, 
shiny metallic coatings.
    44. The Subject Products are also appealing to children because 
they are smooth, unique, and make a soft snapping sound as they are 
manipulated.
    45. The Subject Products also move in unexpected, incongruous ways 
as the poles on the magnets move to align properly, which may evoke a 
degree of awe and amusement among children.
    46. The design of the Subject Products presents a risk of injury 
because they do not operate as intended; that is, they do not act as 
desk toys or manipulatives that are handled solely by adults and remain 
on adults' desks out of the reach of children.
    47. The packaging of the Subject Products is also a design defect. 
The plastic carrying case that holds the Subject Products does not 
prevent children from accessing the magnets, nor does it prevent 
individual magnet pieces from separating from the product. In addition, 
the packaging of the Subject Product does not allow parents and 
caregivers to appreciate if a magnet is missing, and potentially, 
within the reach of a young child who may mouth or ingest the product.
    48. Different packaging cannot remedy the hazard posed by Subject 
Products because users are unlikely to return the magnets to any case, 
regardless of the packaging design. Users of the Subject Products are 
unlikely to disassemble magnet configurations, many of which are 
elaborate and time-consuming to create, after each use.

Count III

The Subject Products Are a Substantial Product Hazard

    49. Paragraphs 1 through 48 are hereby realleged and incorporated 
by reference as though fully set forth herein.
    50. The Subject Products present a substantial risk of injury 
because the pattern of defect--failure to operate as intended, and to 
effectively communicate warnings that the product should not be 
purchased for or used by children under the age of 14--is present in 
all of the Subject Products.
    51. The Subject Products, therefore, present a substantial product 
hazard within the meaning of Section 15(a)(2) of the CPSA, 15 U.S.C. 
2064(a)(2), by reasons of the substantial risk of injury or death 
alleged in paragraphs 1 through 48 above.
    52. The Respondents have refused to voluntarily stop sale and 
conduct a recall of the Subject Products.

Relief Sought

    Wherefore, in the public interest, Complaint Counsel requests that 
the Commission:
    A. Determine that Respondents' Subject Products known as 
Buckyballs[supreg] and BuckycubesTM present a ``substantial 
product hazard'' within the meaning of Section 15 U.S.C. 2064(a)(2).
    B. Determine that extensive and effective public notification under 
Section 15(c) of the CPSA, 15 U.S.C. 2064(c), is required to adequately 
protect children from risks of injury presented by rare earth magnet 
products and order Respondents under Section 15(c) of the CPSA, 15 
U.S.C. 2064(c) to:
    (1) Cease importation and distribution of the product;
    (2) Notify all persons that transport, store, distribute, or 
otherwise handle the rare earth magnet products, or to whom such 
product has been transported, sold, distributed, or otherwise handled, 
to cease immediately distribution of the product;
    (3) Notify appropriate state and local public health officials;
    (4) Give prompt public notice of the defect in the Subject 
Products, including the incidents and injuries associated with 
ingestion or aspiration, including posting clear and conspicuous notice 
on its Internet Web site, and providing notice to any third party 
Internet Web site on which Respondents have placed the product for 
sale, and announcements in languages other than English and on radio 
and television where the Commission determines that a substantial 
number of consumers to whom the recall is directed may not be reached 
by other notice;
    (5) Mail notice to each distributor or retailer of the Subject 
Products; and
    (6) Mail notice to every person to whom the person required to give 
notice knows such product was delivered or sold.
    C. Determine that action under Section 15(d) of the CPSA, 15 U.S.C. 
2064(d), is in the public interest and additionally order Respondents 
to:
    (1) Refund consumers the purchase price of the Subject Products;
    (2) Make no charge to consumers and to reimburse consumers for any 
reasonable and foreseeable expenses incurred in availing themselves of 
any remedy provided under any Commission Order issued in this matter, 
as provided by Section 15 U.S.C. 2064(e)(1);
    (3) Reimburse retailers for expenses in connection with carrying 
out any Commission Order issued in this matter, including the costs of 
returns, refunds and/or replacements, as provided by Section 15 U.S.C. 
2064(e)(2);
    (4) Submit a plan satisfactory to the Commission, within ten (10) 
days of service of the Final Order, directing that actions specified in 
Paragraphs B(1) through (5) and C(1) through (3) above be taken in a 
timely manner;
    (5) To submit monthly reports, in a format satisfactory to the 
Commission, documenting the progress of the corrective action program;
    (6) For a period of five (5) years after issuance of the Final 
Order in this matter, to keep records of its actions taken to comply 
with Paragraphs B(1) through (5) and C(1) through (4) above, and supply 
these records to the Commission for the purpose of monitoring 
compliance with the Final Order;
    (7) For a period of five (5) years after issuance of the Final 
Order in this matter, to notify the Commission at least sixty (60) days 
prior to any change in its business (such as incorporation, 
dissolution, assignment, sale, or petition for bankruptcy) that results 
in, or is intended to result in, the emergence of a successor 
corporation, going out of business, or any other change that might 
affect compliance obligations under a Final Order issued by the 
Commission in this matter; and
    D. Order that Respondents shall take other and further actions as 
the Commission deems necessary to protect the public health and safety 
and to comply with the CPSA.
    Issued by order of the Commission.
    Dated this 25th day of July 2012.

BY: Kenneth Hinson, Executive Director, U.S. Consumer Product Safety

[[Page 45345]]

Commission, Bethesda, MD 20814, Tel: (301) 504-7854.
Mary B. Murphy, Assistant General Counsel, Division of Compliance, 
Office of General Counsel, U.S. Consumer Product Safety Commission, 
Bethesda, MD 20814, Tel: (301) 504-7809.

Jennifer Argabright, Trial Attorney, Sarah Wang, Trial Attorney, 
Complaint Counsel, Division of Compliance, Office of the General 
Counsel, U.S. Consumer Product Safety Commission, Bethesda, MD 20814, 
Tel: (301) 504-7808.
[FR Doc. 2012-18641 Filed 7-30-12; 8:45 am]
BILLING CODE 6355-01-P