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11/29/2016: BAN CLEARED. Game On | Zen Magnets

TL;DR: Webeat the magnet ban. Whew. Immediately beginning production ofZen Magnets for Q1 2017 delivery.

Dear CPSC,

 

It seems like just the other daythat magnet spheres were regulated more restrictively than cars, cigarettesoralcohol in the US. A week ago there was no acceptable warning, no acceptable age, no sales restriction nor waiver that allowed production of magnets like Zen Magnets, Buckyballs, Neoballs, Magnicube or Neocubes.It didn’t matter if a single adult wanted magnets for themselves, or if a parent wanted to decidefor themselves and their family; the government didn’t agree and consumer consent in the matter was not required.

Today we are excited toonce again takeorders of Zen Magnets for immediate production.On 11/22/2016, the 10th Circuit vacated (read: overturned) the magnet set rule.We are so grateful for the community support and encouragement we’ve received that makes our stand possible.

For the past twoyears,we’ve been the last company standing againstthe Consumer Product Safety Commission’s war on magnets.Despite our – first in decades – court victory against the CPSC recall/stop-sale in March, we were disheartenedto stillbe unable to provide Zen Magnets due to the concurrent import ban. Embittering that – even aftera judge foundour magnets to “create no exposure to danger whatsoever” when used properly – our heads were still being held under water. In recent past, we were financially exhausted and preparing for dissolution.This judgementliterally couldn’t have come any later for our little magnet company. Feasiblythis presentsan opportunity for the CPSC, together with Zen, to really address the magnet safety problem.

Yes, high powered magnets can be dangerous if misused. (For readers: if two magnets are swallowed, they can pinch internally and require surgery.) Like fireworks(but safer), theyare not children’s toys, and we’ve not sold them as such. High power magnets are not defective, they operateexactly as they should. The real fight we both need to work towardsis educational: high powered magnets should be kept away from any mouths and young children who don’t know better.

What makes theCPSC’swar on magnets so unrelatableis the dis-proportionality of the loud red alarm blaring fromtheconsumersafety advocacy machinery. There’ve been a lot crisis level lectures, like “teens will use them as tongue piercings!” but lackingcontext such as, “high school sports are more dangerous in terms of ER injuries and fatalities, per participant.” A bunch ofimbalanced rhetoriclike, “magnets are inevitably ingested by babies and therefore must be unavailable toall”, yetfor pools – which are similarly prevalent andmuch more deadly to infants and children – the CPSC issues supervisiontips and safetyadvisories. The message that neodymium magnet spheres sets are so dangerous that citizen consent must be bypassed, is not only unbelievable, but insulting.

Perhaps it’s understandable how the CPSC’s magnet antagonismcame to be. Magnet sphereswere a relatively new product which caused slow but severe injuries, with relatively new injury mechanisms like ‘debilitatinggastrointestinal damage’.These aspects made magnet spheres the perfect nail for the CPSC’s ferocious regulatory hammer.Indeed it’smuch less excite-worthy when a child suffocates on a balloon, the #1 cause of child suffocation, anovelty everyone grew up with and often believe to be harmless (e.g. Judge Bacharach).Balloons are much more likely to kill your small child than magnets. Butballoons are less alarm-worthybecausesuffocation is old news, happens quickly, and generally leads to death, death, and death.

The CPSC cannot successfully engage consumers without acknowledging their opinions, especially when such a strong consensus exists. Fun fact: When a CPSC staff person goes home, it’slikely all of theiradjacent neighbors disagree with thenationwide all-ages market removalof neodymium sculpture magnets that’s been furiously pushed in the past four years.

If (and when) CPSCcontinues waging its taxpayer funded war on magnets, our pledgeremains the same: we will not settle for an all-ages stop-sale of magnets that are perfectly safe when properly used. Regardless of the longevity of Zen Magnets LLC, the last Americanneodymium magnetsphere company, it should now be obvious that as long as demand exists, supply will persist despite prohibition. (Albiet, not with the quality of Zen Magnets. ) Instead of driving Zenout of business, and pushing productionfurther from the CPSC’s field of view, I’d ratheruse ourresources to fight alongside theCPSCforsuccessfuleducational and awareness campaignsfocused on consumers and medical professionals.

Magnets must be respected, but need not be feared.

-Shihan Qu

Founder, Zen Magnets

Appellate CourtDecision

 

On November 22nd, 2016,the United States Court of Appeals for the Tenth Circuit has ruled in favor of Zen Magnets LLC in a 2-1 ruling, vacating the rule the Consumer Product Safety Commission promulgated in September, 2014 that prevented the importation of magnets. The majority opinion concluded that the Commissions prerequisite factual findings, which are compulsory under the Consumer Product Safety Act, 15 U.S.C. 2051-2089, are incomplete and inadequately explained.” As such, the Court ruled to VACATE and REMAND to the Commission.” The full ruling can be found here. (mirror)

Regarding ER injury statistics, aka the “CPSC Epidemiology Elephant in the room”, the 10th Circuit wrote:

While the Commission is certainly free to rely on the emergency room injury report data set, it may not do so in a way that cloaks its findings in ambiguity and imprecision, and consequently hinders judicial review.

Regarding cost-benefit analysis:

Although the Commissions evaluation of the costs of the rule to magnet distributors was adequate, its evaluation of the costs to consumers was incomplete.

Regarding the simultaneous regulatory enforcement:

The Commissions benefits findings… do not adequately account for the reduced injury rate (and therefore reduced need for a new standard) resulting from its recent apparent enforcement… An agency may not simply ignore without analysis important data trends reflected in the record.

“Once again, Zen has shown that it is possible to fight the federal government and win.” Says Former CPSC Commissioner Nancy Nord. “It may be that, through Zens actions, the CPSC will come to understand that it can protect consumer safety without disregarding basic notions of due process.”

 

Battle Summary

 

Is the war on magnetscompletely over? No, it’s still very much ongoing. Our current legal situation is summarized as follows:

Battle 1: Victory, for now. This was our month-long December 2014 court skirmish over the stop-sale and recall of Zen Magnets and Neoballs. We started out as 3 companies allied vs CPSC, but Buckyballs and Magnicube settled out to avoid a costly courtepisode. Zen was thefirst in 20+ years to successfully contest a CPSC recall.

The CPSC has already indicated intent to appeal.“That appeal will be heard and decided by the five members of the CPSCthe same group who voted to sue Zen, who voted to issue the related rule banning the product, and several of whom have made public statements that suggest where they will come out on the appeal.” Ironically, only after the CPSC is done appealing to itself, do we get the real chance to appeal.

Battle 2:Victory. This is the nationwide all-ages magnet set rulethat just got vacated. (Yay!) Interesting fact: theCPSC’s two-pronged approach was quite an unprecedented surprise. Many (including ourselves) hadpredicted that the ban wouldn’t finalize until after the outcome of our first case, since the CPSC commissioners are also the judges upon appeal, and thus would need to avoidshowing any prejudice by voting for it.

The Vacated and Remanded rulemaking is being sent back to CPSC for further findings consistent with the requirements of the Consumer Product Safety Act. The rulemakingdeficiencies were: the ambiguous epidemiology stats, the inadequate consideration of consumer utility,and the omission of simultaneous enforcement effects. We don’t expect a new rule to do much better. The revival of Battle #1 is a bigger concern.

Battle 3 (updated 12/1/16):Settled/loss. The one where the CPSC via DOJ was suingfor $15 million for “selling recalled magnets.” Before Magnicube settled out of Battle #1, we purchased their remaining supply which came from our Neoballs factory in the first place. We stripped off their branding, and put the identical raw magnets into our own Neoballs packaging and warnings. We were, after all, already defending the same magnets and warnings in Battle #1, so how would is it any different that we acquired them from a fallen competitor instead of directly from China? So we thought…

CPSC found an opening for attack, and the judge agreed. It was obvious the judge had already decided when early on she asked “Why didn’t you separate the Magnicubes from Neoballs”, which is basically “Why didn’t you treat those magnets as recalled products right you bought them.” Long sigh… ~_~ (We wouldn’t have purchased them if we thought there was a risk the magnets wouldn’t be treated fungibly.) In the end, the Department of Justice wanted for $100,000 for each individual ‘recalled Magnicube’ magnet sold which would have amounted to billions of dollars, but stuck with $15mil because that was the limit. We didn’t have the resources to appeal, so we settled for a nominal amount. Not because we agree on principle, but to put it behind us and be done with it. The final dollar judgement is $5.5mil, paid with $10,000. The worst part is we’re going to have to destroy nearly half a million Neoballs, more than we ever purchased from Magnicube in the first place. ” It’s wasteful and sad. Should make for an interesting youtube video, nonetheless. If you have any brilliant ideas on how to destroy them, email us at contact@zenmagnets.com

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