CPSC Magnet Ban/Standard Vacated by 10th Circuit

By Riëtte van Laack –

This case concerns small, high-powered magnet sets that users can arrange and rearrange in various geometric shapes. They were once a popular product, marketed as an adult desk toy and for making art works.  The magnet sets consist of 100-200 magnets that have diameters of approximately five millimeters and are unusually powerful. The Consumer Product Safety Commission (CPSC) got involved because of reports of injuries of children swallowing the tiny magnets. (The primary purpose of the CPSC is “to protect the public against unreasonable risks of injury associated with consumer products.”).

The CPSC took several actions to remove the product from the market, including recalls and a rule setting a standard that would effectively ban the sale of this type of magnets. Apparently, most of the companies marketing this type of magnets discontinued the sale of the products in the United States. One company, however, Zen Magnets, LLC (“Zen”), refused to do so and challenged CPSC’s standard. On November 22, the Court of Appeals of the 10^th Circuit vacated the rule setting the standard.

The opinion provides a detailed history of the events surrounding the marketing of these magnets. Briefly, in 2011, the CPSC began evaluating whether this type of magnets complied with a standard by the American Society for Testing and Materials (ASTM) for children’s toys and concluded they did not; the magnet sets marketed by Zen and others were ten times more powerful—or, alternatively, six times smaller—than permissible under the toy standard.

In response to notices of noncompliance and a variety of enforcement actions, a number of companies discontinued the marketing of magnet sets that did not meet the ASTM standard. However, the ASTM standard was for products marketed to children younger than 14 years of age. To get at all magnet sets including those marketed to adults, CPSC issued a rule setting a standard for the size and strength of all magnets. The standard was the same as the ASTM standard but was not limited to magnet sets designed or marketed as toys for children under fourteen years of age, but rather applied to all magnet sets that are“[a]ny aggregation of separable magnetic objects that is a consumer product intended, marketed or commonly used as a manipulative or construction item for entertainment” without age limitation.

Zen challenged this final rule as not meeting the requirements under the Consumer Product Safety Act (CSPA) for a variety of reasons. Specifically, under the CSPA, 15 U.S.C. § 2058(f), the CPSC may promulgate a safety standard only if it reaches and articulates several conclusions, including:

• “that the rule . . . is reasonably necessary to eliminate or reduce an unreasonable risk of injury”;
• that the . . . rule is in the public interest”;
• “that the benefits expected from the rule bear a reasonable relationship to its costs”; and
• “that the rule imposes the least burdensome requirement which prevents or adequately reduces the risk of injury for which the rule is being promulgated.”

The court concluded that the CPSC lacked substantial evidence demonstrating that the rule is necessary to avoid an unreasonable risk. The court also concluded that the CPSC had failed to address the “public’s need for the sets as scientific and mathematics education and research tools, and the rule’s probable effect on magnet sets’ availability and usefulness for those purposes.” Without such information, it is not possible to do a proper cost benefit analysis. As a result, the court vacated the standard and remanded the case to the CPSC. Judge Bacharach dissented.  

In light of the dissent, a CPSC request for a re-hearing (before the same panel) and/or rehearing en banc appears likely.