CPSC Toy Magnet Ban Struck Down By Appeals Court

A federal appeals court has struck down a rule issued by federal regulators that was the designed to protect children from small, high-powered magnets that have been linked to a number of severe internal injuries, and at least one death. 

The U.S. Court of Appeals for the Tenth Circuit issued a 2-1 ruling (PDF) on November 22 which found that the U.S. Consumer Product Safety Commission (CPSC) banned small toy magnets without sufficient evidence that they carried a large enough risk to children.

The toy magnet safety rules, enacted in October 2014, came after several battles with manufacturers to get them to recall products after the CPSC determined that warnings provided were insufficient to avoid injuries. One of the magnet manufacturers, Zen Magnets, LLC, protested the new rules, and challenged them in court.

The rules set a size limit for toy magnet sets to prevent them from being accidentally swallowed or ingested by small children or disabled adults, as the powerful magnets may adhere across intestinal walls and cause severe complications. If the toy magnets were smaller than a set size, they had to be limited in strength, under the rules.

The CPSC rules effectively banned the powerful rare-earth magnet sets, which were often sold as office desk toys. Most companies agreed to recall their magnet sets before the rule went into place.

Some previously sold magnet sets were 37 times more powerful than the new regulations would allow, the CPSC noted.

According to a magnet information center website published by the CPSC, nearly 3,000 children and teenagers swallowed the magnets and had to be treated in emergency rooms nationwide between 2009 and 2013, including the death of a 19-month girl, Annaka Chaffin, after accidentally swallowing the magnets.

However, two of the three judges on the Tenth Circuit Court of Appeals found that the CPSC did not have sufficient evidence to determine that the magnet sets caused significant harm.

The majority of the three-judge panel said that the CPSC had to meet two requirements when putting in place new safety standards. First, the CPSC must identify the degree and nature of the risk of injury, how many products would be affected by the rule, if the public needs the products, and what means of reducing the risk of injury could be put in place. Second, the CPSC must only put in place a standard that is necessary to eliminate or reduce an unreasonable risk of injury, is in the public interest, which has benefits that have a reasonable relationship to the cost, and that poses the least burden.

“In this instance, the Commission’s rulemaking analysis fails at the first step of the Act’s two-step process: the initial cost and benefit findings,” the majority ruled. “Specifically, the Commission’s analysis neglected to address critical ambiguities and complexities in the data underpinning the Commission’s findings as to (1) the degree of the risk of injury caused by magnet sets, and (2) the public’s need for the sets and the rule’s effect on their utility and availability.”

The ruling is seen as a victory for Zen Magnets, the only manufacturer still fighting to stay on the market. However, a day after the ruling, Zen Magnets and the U.S. Department of Justice entered into a consent agreement (PDF) on a $5.5 million civil penalty aimed at the company for illegally selling more than 400,000 recalled magnets.

However, the details of the civil penalty requires Zen Magnets to only ultimately pay $10,000.