toolneverletgo

UNITEDSTATESOFAMERICACONSUMERPRODUCTSAFETYCOMMISSIONIntheMatterof))ZENMAGNETS,LLC)CPSCDocketNo:12-2)Respondent.
)FINALDECISIONANDORDERThisFinalDecisionandOrderresolvesComplaintCounsel'sappealoftheInitialDecisionandOrderofAdministrativeLawJudgeDeanC.
Metry(the"ALJ")grantinginpart,anddenyinginpart,ComplaintCounsel'srequestforreliefagainstZenMagnets,LLC("Respondent")underSections15(c)and(d)oftheConsumerProductSafetyAct("CPSA"),15U.
S.
C.
§§2064(c)and(d).
ComplaintCounselseekstohaveZenMagnetsandNeoballs,smallrare-earthmagnetsimportedanddistributedbyRespondent,declaredasubstantialproducthazardandtoobtainanorderforpublicnoticeandarecall.
Forthereasonssetforthbelow,theU.
S.
ConsumerProductSafetyCommission("CPSC"or"theCommission")herebysetsasidetheInitialDecisionandOrderbecauseitisbasedonnumerouserrorsinfactandlaw.
TheCommissionfindsthatComplaintCounselprovedbyapreponderanceoftheevidencethattheSubjectProductspresentasubstantialproducthazardandare,therefore,subjecttopublicnotificationunderSection15(c)oftheCPSA,15U.
S.
C.
§2064(c),andrecallmeasuresavailablepursuanttoSection15(d)oftheCPSA,15U.
S.
C.
§2064(d).
1I.
BackgroundA.
TheProductSmallrare-earthmagnetsets("SREMs")havebeensoldintheUnitedStatesbyseveraldistributorsunderanumberofbrandnames.
RespondentbegandistributingtwobrandsofSREMs,ZenMagnetsandNeoballs,in2009and2011,respectively(the"SubjectProducts").
Compl.
Counsel'sPostHr'gArgument[filedMar.
16,2013asDocketEntry("DE")139]("CCPostHr'gArg.
"),Ex.
A,23,72.
TheSubjectProductsarestrongmagnetsthataresmall,spherical,shiny,reflective,smooth,loose,andseparable.
Id.
,Ex.
A,11-17,60-65,71;DirectExpertTestimonyofVincentAmodeo("Ex.
CC-1A")at4-6;Exs.
CC-4;CC-4A;CC-5;CC-5(2);CC-5A;CC-7at2,5;DirectExpertTestimonyofDr.
LaurenceSteinberg("Ex.
CC-19A")at4;Tr.
343:7-9.
ZenMagnetsareapproximately5.
00+/-0.
01mmindiameter.
CCPostHr'gArg.
,Ex.
A,14.
Neoballsareapproximately4.
98mmto5.
11mmindiameter.
Id.
,Ex.
A,63.
1TheCommissionvoted(3-1)toissuetheFinalDecisionandOrder.
CommissionersAdler,Kaye,andRobinsonvotedtoissuetheFinalDecisionandOrder.
ActingChairmanBuerklevotedtotakeotheraction–concurringinpartanddissentinginpartinaccordancewithanattachedopinion.
2RespondentsoldtheSubjectProductsasaggregatedloosemagnetsinsetsorasindividualmagnets.
Id.
,Ex.
A,12,13,35,37,39,41,61,62,81.
ZenMagnetswereavailableinvarious-sizedcontainersholding72,216,or1,728magnets,atpricesrangingfromapproximately$12.
65forthe72-pieceset,$32.
98to$38.
24forthe216-pieceset,andupto$263.
85forthe1,728-pieceset.
Id.
,Ex.
A,36,38,40;Tr.
1468:2-5.
ZenMagnetsalsocouldbepurchasedindividuallyfor20centspermagnet.
CCPostHr'gArg.
,Ex.
A,42.
IndividualNeoballscouldbepurchasedatpricesrangingfrom6centsto10centspermagnet.
Id.
,Ex.
A,85.
TheSubjectProducts,likeotherSREMs,arestronglymagnetic.
Magnetstrengthismeasuredby"fluxindex"thatisproportionaltoamagnet's"strengthorattractionforce"and"canbeusedtocomparerelativestrengthsbetweenmagnets.
"Ex.
CC-1Aat3.
TheSubjectProductshaveafluxindexgreaterthan50kg^2mm^2,whichisthemaximumstrengthallowedforaccessiblemagnetsintoys,duetothepossiblehazardiftheyarestrongerandareswallowed.
CCPostHr'gArg.
,Ex.
A,15,64;ASTMInternationalStandardF963-11,StandardConsumerSafetySpecificationforToySafety,§§3.
1.
37,4.
38,A8.
4.
1.
Thishighfluxindexallowsuserstocreatestructuresthatwillholdtheirshapes.
BoydF.
Edwards,PhD,ExpertReport:EducationalValueofNeodymiumMagnetSpheresintheMatterofZenMagnets,LLC,CPSCDocketNo.
12-2(Aug.
28,2014)("Ex.
R-155")at20.
B.
TheRiskofInjuryTheriskofinjuryfromtheSubjectProductsariseswhenindividualmagnetsareseparatedfromasetandeasilyswallowed,eitheraccidentallyorintentionally,bychildren.
Ex.
CC-19Aat4,7-8,18.
TheintendeduseandoperationoftheSubjectProductsrequirethemagnetstobeseparatedandreattachedtocreateandreshapethemagnetsintoavarietyoffigures,sculptures,structures,jewelry,andart.
See,e.
g.
,Exs.
R-55(productguidewithexamplesofstructuresthatcanbecreatedwiththeSubjectProducts);R-139("NeverLetGoofChildhoodWonder"demonstrationvideo);seealsoDirectTestimonyofDr.
J.
PaulFrantz,Ph.
D.
,C.
P.
S.
M.
,CPE("CC-10A")at13,15(discussingRespondent'smarketingoftheSubjectProductsasjewelryandrefrigeratorart).
UsingtheSubjectProductsforthesepurposescanresultinseparated,lost,orsharedmagnets.
SeeEx.
CC-10Aat7,13-14,18-19,22-23,43,45;J.
PaulFrantz,Ph.
D.
,C.
P.
S.
M.
,CPE,ExpertReportof:J.
PaulFrantz,Ph.
D.
,C.
P.
S.
M.
,CPE(July16,2014)("Ex.
CC-11")at48,51.
TheverydesignoftheSubjectProductsassmall,loose,separable,high-fluxmagnetsishazardoustochildren.
Tr.
343:5-344:3;385:19-386:2;Ex.
CC-10Aat6-7,42-43.
Babiesandtoddlersmayfindlostorunaccounted-forSREMsorgainaccesstoSREMsthatarestoredorunstoredinahomeorthroughsiblings.
Exs.
CC-10Aat29-31;CC-11at48.
Youngchildren--babies,toddlers,andsomepreschoolers--areparticularlyenticedbySREMsbecausetheyare"shiny,reflective,andsmooth,"looklikecandiesthataresometimesfoundoncakesandcookies,and"canbemanipulatedtolookliketoysandcolorfulcharacterfigures.
"Ex.
CC-19Aat4.
YoungchildrenwhogainaccesstoSREMsmayplacethemagnetsintheirmouths3tolearnmoreabouttheobjects;oncethemagnetsareintheirmouths,childrenmayswallowthem,eitherintentionallyoraccidentally.
Id.
at4,7-8.
Suchbehaviorisconsideredreasonableandage-appropriateforyoungchildren.
Id.
at6-8Teensandtweens,meaningolderchildrenages9-16("olderchildren"),mayobtainSREMsfromafriendoracaregiver,orpurchasethemagnetsforthemselves.
Exs.
CC-10Aat29-31;CC-19Aat14-17.
TheseolderchildrenmaytestthemagneticpropertiesofSREMsbystickingthemagnetsontotheirbraces,usingthemtomimicfacialpiercings,orunconsciouslyputtingthemagnetsneartheirmouthswhileplayingwiththem,andaccidentallyswallowthem.
Ex.
CC-19Aat13,16;seealsoDirectExpertTestimonyofR.
AdamNoel,M.
D.
("Ex.
CC-27A")at13.
Suchbehaviorisconsidereddevelopmentallyappropriateforchildrenatthoseages.
Ex.
CC-19Aat13-17.
Regardlessofhowtheyareobtainedorused,ifingested,SREMsthatcomprisetheSubjectProductspresentthesameriskofinjurytochildrenofallages.
Becauseoftheirstrongmagnetism,ingestedSREMsliketheSubjectProductscanattracttoeachother,ortoothermetallicobjectsthatareingested,acrossloopsofbowelorothertissue;onceattached,theSREMsbecomelodgedinthedigestivesystemandcannotseparateontheirown.
NASPGHANPaper,"ProtectingChildrenfromMagnetIngestions"("Ex.
CC-24")at2;Ex.
CC-27Aat7.
IngestedSREMsthatpressagainstdigestivetissueandthatarenotremovedwithinapproximately8hourscancausecatastrophicinjuriesanddeaththroughtissueinjuries;pressurenecrosis("tissuedeath");andfistulasorperforations,i.
e.
,holesofthegastrointestinaltract.
Exs.
CC-24at2;CC-27Aat7-11.
Ifafistulaorperforationoccurs,bacteria,partiallydigestedfood,orfecalmattercouldleakfromtheintestineintothebodycavity,resultinginseriousinfectionorsepsis.
Ex.
CC-27Aat8;Tr.
750:5-752:11.
Inaddition,dependingonhowtheyattachinthedigestivetract,ingestedSREMscankinkportionsofthemesentery,cuttingoffbloodsupplytothatareaoftheintestinaltract(bowelischemia)andcausingtissuedeathofpartofthedigestivetract.
Ex.
CC-27Aat9;Tr.
752:19-753:11.
SREMingestionsaredifficulttodiagnosebecausepatientsoftenpresentwithnonspecificsymptoms,suchasnauseaandfever,whichparents,caregivers,andmedicalprofessionalscanmistakefortheflu,stomachvirus,orgastrointestinalinfection.
Exs.
CC-24at2;CC-27Aat10-11.
Inaddition,medicalprofessionalsareoftennotawareofthemedicalrisksthatingestedSREMspresent,andtheyassumethatmagnetswillbehavesimilarlytomostforeignbodiesthatareingested,byjustpassingthroughthedigestivetract.
Ex.
CC-27Aat12;Tr.
766:12-767:9.
Delaysindiagnosiscanresultinseriousinjury.
Ex.
CC-27Aat10,12.
C.
CPSC'sStatutoryAuthorityUnderSection15oftheCPSAComplaintCounselbroughtthiscaseagainstRespondent,onbehalfoftheCommission,underSections15(c)and(d)oftheCPSA(15U.
S.
C.
§§2064(c)and(d)),seekinganorderthattheSubjectProductspresentasubstantialproducthazardanddirectingRespondenttotakecertainremedialactionswithrespecttotheSubjectProducts.
4TheCommissionmaydeterminethataproductpresentsasubstantialproducthazardundertwodifferentprovisionsinSection15oftheCPSA:Sections15(a)(1)and(a)(2).
Section15(a)(2)defines"substantialproducthazard"as"aproductdefectwhich(becauseofthepatternofdefect,thenumberofdefectiveproductsdistributedincommerce,theseverityoftherisk,orotherwise)createsasubstantialriskofinjurytothepublic.
"15U.
S.
C.
§2064(a)(2).
Section15(a)(1)oftheCPSAdefines"substantialproducthazard"as"afailuretocomplywithanapplicableconsumerproductsafetyruleunderthisActorasimilarrule,regulation,standard,orbanunderanyotherActenforcedbytheCommissionwhichcreatesasubstantialriskofinjurytothepublic.
"15U.
S.
C.
§2064(a)(1).
Sections15(c)and(d)oftheCPSA(15U.
S.
C.
§§2064(c)and(d))prescribetheremediesthattheCommissionmayorderiftheSubjectProductspresentasubstantialproducthazardundereitherSection15(a)(1)or(a)(2).
UnderSection15(c),theCommissionmayorderpublicnoticeafterfindingthat:(1)aproductdistributedincommercepresentsasubstantialproducthazard;and(2)notificationisrequiredinordertoadequatelyprotectthepublicfromsuchsubstantialproducthazard.
15U.
S.
C.
§2064(c)(1).
2UnderSection15(d),theCommissionmayorderrepair,replacement,and/orrefundofaproductafterdeterminingthat:(1)aproductdistributedincommercepresentsasubstantialproducthazard;and(2)suchactionisinthepublicinterest.
15U.
S.
C.
§2064(d)(1).
OrdersunderSection15(d)mayalsoenjointhemanufacture,sale,distribution,orimportationoftheproduct.
15U.
S.
C.
§2064(d)(2).
D.
ProceduralHistoryIn2012,ComplaintCounselfiledadministrativecomplaintsunderSections15(c)and(d)oftheCPSAagainstMaxfieldandObertonHoldings,LLC("Maxfield"),StarNetworksUSA,LLC("Star"),andRespondent,seekingordersthatSREMsimportedanddistributedbythesefirmspresentasubstantialproducthazard,andordersdirectingthefirmstotakecertainremedialactionswithrespecttotheproducts.
See,e.
g.
,SecondAm.
Compl.
againstZenMagnets,LLC[filedFeb.
11,2013asEx.
BtoDE26]at1("SecondAmendedComplaint").
ThecasesagainstMaxfield,Star,andRespondentweresubsequentlyconsolidated.
SeeOrderGrantingAgency'sMot.
toConsolidateCPSCDocketNumbers12-1/12-2and13-2[filedJan.
11,2013asDE24].
InMayandJuly2014,theCommissionenteredintoconsentagreementswithMaxfieldandStar,leavingtheactionagainstRespondenttheonlyremainingcase.
1.
SecondAmendedComplaintCountIoftheSecondAmendedComplaintallegedthattheSubjectProductsareasubstantialproducthazardunderSection15(a)(2)oftheCPSAbecausetheycontainproductdefectsthatcreateasubstantialriskofinjurytothepublic.
SecondAm.
Compl.
at5.
Complaint2Ahearinginaccordancewith5U.
S.
C.
§554isaprerequisitetoanyorderissuedunderSections15(c)and(d).
15U.
S.
C.
§§2064(c)(1),(d)(1),(f)(1).
ThisrequirementhasbeensatisfiedbythehearingconductedbytheALJfromDecember1throughDecember18,2014.
5CounselallegedthattheSubjectProductscontainadefectunderthreeseparatetheories:(1)theSubjectProductscontaininadequateinstructions,packaging,andwarnings;(2)asubstantialriskofinjuryarisesasaresultoftheSubjectProducts'operationanduseandthefailureoftheSubjectProductstooperateasintended;and(3)thetypeofriskofinjuryrenderstheSubjectProductsdefectiveunder16C.
F.
R.
§1115.
4.
Id.
at5-19.
Inaddition,CountIallegedthatthedefectcreatesasubstantialriskofinjurytochildrenundertheageof14,whomayingestmorethanonemagnetandsufferacuteandlong-termhealthconsequences.
Id.
at19-21.
CountIIoftheSecondAmendedComplaintallegedthattheSubjectProductsareasubstantialproducthazardunderSection15(a)(1)oftheCPSAbecausetheyfailtocomplywithASTMInternationalStandardF963-11,StandardConsumerSafetySpecificationforToySafety(the"ToyStandard"),andsuchfailurecreatesasubstantialriskofinjurytothepublic.
Id.
at128-134.
CountIIallegedthattheSubjectProductsconstitute"toys"undertheToyStandardbecausetheSubjectProductsaredesigned,manufactured,and/ormarketedasaplaythingforchildrenunder14yearsofage.
Id.
at128-129.
CountIIfurtherallegedthatbecausetheSubjectProductsconsistofandcontainloose-as-receivedmagnetsthatare"smallobjects,"asdefinedundertheToyStandard,withafluxindexgreaterthan50,theSubjectProductsviolatetheToyStandard.
Id.
at130-132.
OnMay28,2013,RespondentfiledananswertotheSecondAmendedComplaint,denyingtheallegations.
RespondentZenMagnet,LLC'sAnswertotheSecondAmendedComplaint[DE43].
2.
InitialDecisionandOrderFromDecember1,2014toDecember18,2014,theALJheldanadministrativehearinginthismatter.
OnMarch25,2016,theALJissuedanInitialDecisionandOrdergrantinginpart,anddenyinginpart,theCommission'srequestforrelief.
InitialDecisionandOrder[DE141]("InitialDecision").
TheALJfoundinfavorofRespondentonallallegationsinCountIandruledthattheSubjectProductsdonotcontainadefectthatcreatesasubstantialriskofinjurytothepublic.
InitialDec.
at12,16,29,36.
Significantly,theALJfoundthatComplaintCounseldidprovethat"ingestingSREMscreatesarealriskofinjuryandcanresultinsevereinjuryordeath,"however,theALJruledagainstComplaintCounselbecause"[p]roperuseof[theSubjectProducts]createsnoexposuretodangerwhatsoever.
"Id.
at36(emphasisinoriginal).
RegardingCountII,theALJfoundthatSubjectProductssoldwithoutwarningsand/ormarketedorlabeledforusebychildrenunder14yearsofagearetoysundertheToyStandardandconstituteasubstantialproducthazard.
Id.
at16n.
6,34,36.
However,theALJconcludedthatSubjectProductssoldwithwarningsand"appropriateagerecommendations"arenottoysundertheToyStandardanddonotconstituteasubstantialproducthazard.
Id.
at16n.
6,33-34,36.
6TheALJissuedanOrderrequiringRespondenttocompileandprovidetotheCommissionlistsofconsumerswhopurchasedtheSubjectProducts(1)withoutwarnings(beforeMay2010);and(2)withanyinformationsuggestingtheappropriateageofusetobe12yearsandolder.
Id.
at34-35.
Additionally,theOrderrequiredRespondenttocontactallknowncustomersandretailersidentifiedinthelists,andprovide(1)specificwarningsaboutmagnetingestionhazards;(2)thepurchaseranopportunitytoreturntheproducttoRespondentforafullorpartialrefund,inaccordancewithspecifiedrequirementsandtimeframes;and(3)theCommissionwithinformationconcerningallresponsesRespondentreceivestothenotifications,withinspecifiedtimeframes.
Id.
at35.
3.
ComplaintCounsel'sAppealoftheInitialDecisionandOrderOnMarch29,2016,ComplaintCounselfiledaNoticeofIntenttoAppeal[DE142],whichtheyperfectedonMay4,2016,byfilinganAppealBrief[DE143]("Appeal").
3BecausetheAppealwasperfectedwithin40daysoftheissuanceoftheInitialDecisionandOrder,theALJ'sInitialDecisionandOrderwasnotadoptedasaFinalDecisionandOrderbytheCommission.
16U.
S.
C.
§1025.
52.
OnJune13,2016,RespondentfiledRespondent'sAnswerBrief[DE153]("AnswerBr.
"),andComplaintCounselfiledComplaintCounsel'sReplyBrief[DE154]("ReplyBr.
")onJune27,2017.
OnJune7,2017,theCommissionheardoralargumentonthismatter.
4II.
StandardofReviewandBurdenofProofA.
TheCommission'sReviewIsDeNovoTheAdministrativeProcedureAct("APA")governsthisadjudication(15U.
S.
C.
§2064(f)(1)),grantingtheCommission"allthepowerswhichitwouldhaveinmakingtheinitialdecisionexceptasitmaylimittheissuesonnoticeorbyrule.
"5U.
S.
C.
§557(b).
Courtshave3RespondentsubsequentlyfiledaMotiontoStayComplaintCounsel'sAppealoftheInitialDecisionPendingDispositionofRespondent'sMotiontoDisqualifytheCommissionorSomeofitsMembers[filedMay6,2016asDE145,re-filedonMay16,2016asDE150]("MotiontoStay")andaMotiontoDisqualifytheCommissionorSomeofitsMembers[filedMay6,2016asDE144,re-filedonMay16,2016asDE149]("MotiontoDisqualify").
ComplaintCounselfiledresponsesopposingthesemotions[filedMay13,2016asDE146andMay16,2016asDE151].
OnMay25,2016,theCommissiondeniedtheMotiontoStay[DE152]and,onSeptember1,2016,theCommissiondeniedtheMotiontoDisqualify.
OrderDenyingRespondent'sMotiontoStayComplaintCounsel'sAppealoftheInitialDecisionandOrderandSettingaBriefingSchedule,IntheMatterofZenMagnets,LLC,CPSCDocketNo.
12-2[DE152](May25,2016);OpinionandOrderDenyingRespondent'sMotiontoDisqualifytheCommissionorSomeofItsMembers,IntheMatterofZenMagnets,LLC,CPSCDocketNo.
12-2[DE155](Sept.
1,2016).
CommissionerBuerkleissuedadissentingopinioninconnectionwiththeMotiontoDisqualify.
4TheCommission'sregulationat16C.
F.
R.
§1025.
55(c)states:"ExceptasotherwiseorderedbytheCommission,theCommissionshallendeavortofileitsDecisionwithinninety(90)daysafterthefilingofallbriefsorafterreceiptoftranscriptoftheoralargument,whicheverislater.
"OnAugust3,2017,theCommissionreceivedthefinaloralargumenttranscript,whichwasservedonthepartiesbytheOfficeoftheSecretaryonthesameday.
7interpretedthislanguageasgrantingagenciesdenovoreviewoveranALJ'sdecision,unlesstheagencyhaslimiteditsstandardofreviewthroughregulation.
See,e.
g.
,Deere&Co.
v.
ITC,605F.
3d1350,1358(Fed.
Cir.
2010);VinelandFireworksCo.
,Inc.
v.
ATF,544F.
3d509,514(3dCir.
2008);Vercillov.
CFTC,147F.
3d548,553(7thCir.
1998);ContainerfreightTransp.
Co.
v.
ICC,651F.
2d668,670(9thCir.
1981).
TheCommission'sapplicableregulationdoesnotlimititsstandardofreviewand,indeed,statesthattheCommission"shall,totheextentnecessaryordesirable,exerciseallthepowerswhichitcouldhaveexercisedifithadmadetheInitialDecision.
"16C.
F.
R.
§1025.
55(a).
ThislanguageisnearlyidenticaltoSection557(b)oftheAPA,5U.
S.
C.
§557(b).
Theregulation'srequirementthattheCommission"adopt,modify,orsetasidethefindings,conclusions,andordercontainedintheInitialDecision…"(16C.
F.
R.
§1025.
55(b))isnotarestrictionontheCommission'spowerstoreviewtheInitialDecision.
Becausetheregulation"parallel[s],ratherthanlimit[s],"theAPAstandardofreview,theCommissionmayconductadenovoreviewoftheInitialDecision.
Vercillo,147F.
3dat553.
Denovoreviewmeans"anindependentdeterminationoftheissues,"UnitedStatesv.
FirstCityNat'lBankofHouston,386U.
S.
361,368(1967),anddeferencetotheInitialDecisionisnotrequired.
La.
Pub.
Serv.
Comm'nv.
FERC,522F.
3d378,395(D.
C.
Cir.
2008).
RespondentiscorrectthattheInitialDecisioncannotbe"setasidebytheCommissionasifthecasehadneverbeenheardinthefirstplace.
"AnswerBr.
at6(emphasisinoriginal).
TheCommissionmustconsidertheInitialDecision,whichispartoftherecord,initsreviewoftheappeal.
5U.
S.
C.
§557(c);seealso16C.
F.
R.
§1025.
55(a)("theCommissionshallconsidertherecordasawholeorsuchpartsoftherecordasarecitedorasmaybenecessarytoresolvetheissuespresented…").
IftheCommissiondepartsfromtheALJ'sfindings,theCommission'sdecisionmustreflect"attentiveconsideration"totheInitialDecision.
La.
Pub.
Serv.
Comm'n,522F.
3dat395(citingGreaterBostonTelevisionCorp.
v.
FCC,444F.
2d841,853(D.
C.
Cir.
1970)).
Thisconsideration"maybefoundiftheagencydecisionreflectsanawarenessoftheALJ'sfindingsandgivesreasonsforreachingadifferentconclusionwithrespecttothosefindings.
"Simonv.
SimmonsFoods,Inc.
,49F.
3d386,390(8thCir.
1995);seealso16C.
F.
R.
§1025.
55(b)(requiringtheCommissionto"include…astatementofthereasonsforitsactionandanyconcurringordissentingopinions").
B.
ComplaintCounselHavetheBurdenofProoftoShowSubstantialProductHazardbyaPreponderanceoftheEvidenceUndertheAPAandtheCommission'sregulationgoverningadministrativeadjudications,ComplaintCounselhavetheburdenofprovingthattheSubjectProductsconstituteasubstantialproducthazardundertheCPSA.
5U.
S.
C.
§556(d)("theproponentofaruleororderhastheburdenofproof");16C.
F.
R.
§1025.
43(b)(1)("Complaintcounselshallhavetheburdenofsustainingtheallegationsofanycomplaint.
").
Inaddition,theparty"whoistheproponentofalegalorfactualpropositionshallhavetheburdenofsustainingthatproposition.
"16C.
F.
R.
§1025.
43(b)(2).
8ThestandardofproofthataproponentofaruleorordermustmeettoprevailinanadministrativeproceedingundertheAPAis"preponderanceoftheevidence.
"Steadmanv.
SEC,450U.
S.
91,102,reh'gdenied,451U.
S.
933(1981).
Astandardofproofotherthan"preponderanceoftheevidence"mayapply,butonlyiftheAPAis"supersededbyanexpressstatutoryprovision.
"GreenwichCollieriesv.
Director,OWCP,990F.
2d730,736(3rdCir.
1993),aff'd,512U.
S.
267(1994)(internalfootnoteomitted).
Nosuchexpressstatutoryprovisionexistshere.
TheCPSAissilentregardingthestandardofproofgoverningCommissionadjudications.
Therefore,theCommissionreaffirmsthatthepreponderanceoftheevidencestandardapplies.
5Thissimplymeansthattherecordmustbesufficienttofindthatafactismorelikelytobetruethanuntrue.
GreenwichCollieries,990F.
2dat736;seealsoInreDye&Dye,CPSCDocketNo.
88-1,1989WL435534at*4,OpinionandOrder(July17,1991)("InreDye")aff'g1989WL435526,InitialDecision(March301989)("InreDyeInitialDecision")(citingHalev.
Dep'tofTransp.
,772F.
2d882,885(Fed.
Cir.
1985)).
III.
TheSubjectProductsPresentaSubstantialProductHazardUnderSection15(a)(2)oftheCPSAComplaintCounselarguethattheyhavemettheirburdenofproofbyapreponderanceoftheevidencethattheSubjectProductspresentasubstantialproducthazardunderSection15(a)(2)oftheCPSAbecause(1)theSubjectProductscontainadesigndefectthatcreatesaningestionrisktochildrenbasedontheiruseandoperation,includingthereasonablyforeseeablemisuseoftheSubjectProducts;and(2)thewarningsontheSubjectProductsdonotandcannotmitigatetheriskofinjury.
6Appealat2.
RespondentcountersthatComplaintCounselfailedtomeettheirburdentoproveadefect,andthattheCommissionshouldupholdtheALJ'sdecisionthattheSubjectProductsdonotpresentadefectbasedontheiroperationanduse,because(1)theingestionhazardarisesoutofmisuseoftheSubjectProducts,nottheproperandintended5RespondentcontendsthattheU.
S.
SupremeCourt'sholdinginSteadmandoesnotapplytoCommissionadjudications.
AccordingtoRespondent,unlikethesecuritiesstatuteatissueinSteadman,whichdidnotspecifyastandardofproofgoverningSecuritiesandExchangeCommissionviolations,theCommission'sregulationat16C.
F.
R.
§1025.
51(b)requiresadjudicationstobesupportedby"substantialevidence.
"AnswerBr.
at4-5.
Theregulationstates:"TheInitialDecisionshallbebaseduponaconsiderationoftheentirerecordandshallbesupportedbyreliable,probative,andsubstantialevidence.
"16C.
F.
R.
§1025.
51(b)(emphasisadded).
TheCommissiondisagrees.
InSteadman,theU.
S.
SupremeCourtinterpretedthephrase"reliable,probative,andsubstantialevidence"tomeanbyapreponderanceoftheevidence.
450U.
S.
91,98-102.
Moreover,contrarytoRespondent'sargument,thesubstantialevidencestandardisalowerstandardofproofthanthepreponderanceoftheevidencestandard.
Substantialevidenceis"morethanascintillaofevidencebutlessthanapreponderance;itissuchrelevantevidenceasareasonablemindmightacceptasadequatetosupportaconclusion.
"Rogersv.
Comm'rofSoc.
Sec.
,486F.
3d234,241(6thCir.
2007)(emphasisadded)(internalcitationomitted);seealsoSouthlandMowerCo.
v.
CPSC,619F.
2d499,508(5thCir.
1980).
6ComplaintCounselalsoarguethatapplicationofthe"riskfactors"in16C.
F.
R.
§1115.
4(citedinfootnote8below)provesadefectintheSubjectProducts.
Althoughweagreethatthefactorsweighinfavoroffindingadefectandmaybeconsideredaspartofadefectanalysis,asappropriate,theCommissionfindsthatthefactorslistedin§1115.
4donotpresentaseparatebasisforadefectfinding.
Thus,theCommissionwillconsidersomeofthefactorsinstep1ofitsanalysis,asdiscussedinSectionsIII.
A.
1.
aandIII.
A.
2,infrapp.
9-10,15-34.
9operationanduseoftheSubjectProducts;and(2)warningsontheSubjectProductsaresufficienttomitigatetheriskofinjury.
AnswerBr.
at13,14-15,31-32.
TofindasubstantialproducthazardunderSection15(a)(2)oftheCPSA,theCommissionmustconcludethat:theSubjectProductscontainadefect;andsuchdefect,becauseofthepatternofdefect,thenumberofdefectiveproductsdistributedincommerce,theseverityoftherisk,orotherwise,createsasubstantialriskofinjurytothepublic.
15U.
S.
C.
§2064(a)(2).
A.
TheSubjectProductsContainaDefect1.
LegalFrameworka.
DefectAnalysisSection1115.
4oftheCommission'sregulationstates,inpertinentpart:"[a]taminimum,defectincludesthedictionaryorcommonlyacceptedmeaningoftheword.
Thus,adefectisafault,flaw,orirregularitythatcausesweakness,failure,orinadequacyinformorfunction.
"716C.
F.
R.
§1115.
4.
Section1115.
4alsoprovidesthataproductdefectmayariseinavarietyofwaysandoffersseveralexamples,suchasamanufacturingerror,useofdefectivematerials,or,asallegedinthiscase,adesignflaw.
Id.
Accordingly,"aproductmaycontainadefecteveniftheproductismanufacturedexactlyinaccordancewithitsdesignandspecifications,ifthedesignpresentsariskofinjurytothepublic.
"Id.
Section1115.
4statesthata"designdefectmayalsobepresentiftheriskofinjuryoccursasaresultoftheoperationoruseoftheproduct….
"Id.
Section1115.
4setsforththefactorstheCommission"willconsider,asappropriate,"in"determiningwhethertheriskofinjuryassociatedwithaproductisthetypeofriskwhichwillrendertheproductdefective.
"Id.
Section1115.
4providesagreatdealofflexibilityininterpreting"defect"inSection15(a)(2)oftheCPSA.
BecauseofthebreadthofconsumerproductsthatfallwithintheCommission'sjurisdictionandtherangeofproductcharacteristicsthatcouldpresentadefect,theCommission'sdefectanalysismustbeveryflexibleandmusttakerelevantfactorsintoconsideration,asappropriatelyappliedtothefact-specificcircumstancesofeachcase.
SeeInterpretation,Policy,andProcedureforSubstantialProductHazards,43Fed.
Reg.
34,988,34,991(Aug.
7,1978)("1978FinalRule")(statingthattheCommissionconductsdefect7Althoughtheprimarypurposeoftheregulationistoprovideguidancetomanufacturers,importers,distributors,andretailersonwhentoreportsubstantialproducthazardstotheCommission,theregulationalsoprovidesguidanceonhowtheCommissioninterpretsandenforcestheconceptofaproductdefectunderSection15(a)oftheCPSA.
10determinationsonacase-by-casebasisand"interpretsthetermdefectasusedinSection15(b)toincludethebroadestmeaningfoundinFederalandStatestatutesandjudicialpronouncements").
Asexplainedin§1115.
4andInreDye,1989WL435534at*9-11,adefectanalysis:1.
Beginswithanevaluationoftheproduct'scharacteristics,andwhetherthoseproductcharacteristicsgiverisetoariskofinjury.
2.
Ifsuchcharacteristicsdogiverisetoariskofinjury,weconsiderwhetherthecharacteristicsarenecessaryfortheproducttofunction.
a.
Ifsuchcharacteristicsarenotnecessaryfortheproducttofunction,thenwecandispensewithfurtherdefectanalysisandtheCommissionmayfindthattheproductcontainsadefect.
b.
Ifsuchcharacteristicsarenecessaryfortheproducttofunction,oriftheeffectofthedefectfindingwillremovetheproductfromthemarket,thentheCommissionconductsabalancingtesttodeterminewhethertheriskofinjuryoutweighstheusefulnessoftheproducttoconsumers,beforetheCommissionmayfindthattheproductcontainsadefect.
8Step1ofadefectanalysis,i.
e.
assessingproductcharacteristicsandwhethersuchcharacteristicscreateariskofinjury,mayinclude,asappropriate,considerationofsomeofthesamefactorsidentifiedin§1115.
4discussedinfootnote8.
Thus,insomecases,suchashere,theassessmentofwhetheraproduct'scharacteristicscreateariskofinjury,andbalancingoftheriskofinjurywiththeproduct'sutility,mayinvolveconsiderationofsomeofthesamefactors.
b.
RoleofReasonablyForeseeableMisuseinaDefectDeterminationBeforeweconsiderthecharacteristicsoftheSubjectProducts,weconsidertheroleofconsumermisuseofaproductwhenconductingadefectdetermination.
ThemostfundamentalflawresultinginmisapplicationofthelawintheALJ'sInitialDecisionistheerroneousassertionthattheCPSCcannotprotectconsumersfromhazardsresultingfromreasonablyforeseeablemisuseofaconsumerproduct.
ThisfundamentalmisunderstandingbytheALJpermeatestheentireInitialDecisionandOrderandiscontrarytoourregulatoryguidance,legislativehistory,statutoryauthority,caselaw,andCommissionprecedent.
8Section1115.
4liststhefollowingfactorsCPSCstaffconsiders,asappropriate:Theutilityoftheproductinvolved;thenatureoftheriskofinjurywhichtheproductpresents;thenecessityfortheproduct;thepopulationexposedtotheproductanditsriskofinjury;theobviousnessofsuchrisk;theadequacyofwarningsandinstructionstomitigatesuchrisk;theroleofconsumermisuseoftheproductandtheforeseeabilityofsuchmisuse;theCommission'sownexperienceandexpertise;thecaselawinterpretingFederalandStatepublichealthandsafetystatutes;thecaselawintheareaofproductsliability;andotherfactorsrelevanttothedetermination.
11Specifically,theALJfoundthatComplaintCounseldidnotmeettheirburdentoprovethattheSubjectProductscontainadefectbecauseingestionisnotpartoftheSubjectProducts'"use"or"operation,"andthattheevidenceprovedthattheriskofinjuryarisesonlywhenconsumers"misuse"theSubjectProductsbyingestingSREMs.
InitialDec.
at7-8.
TheALJincorrectlyreasonedthatbecauseingestionofSREMsisamisuseoftheSubjectProducts,andisnotpartoftheintendedorproperuseoftheproduct,adefectdoesnotariseoutoftheoperationoruseoftheSubjectProducts.
Id.
IngestionoftheSubjectProductsis,ofcourse,nottheproperorintendeduseoftheSubjectProducts.
Accordingly,asaninitiallegalmatter,theCommissionmustdeterminewhetheradesigndefectthatarisesoutofthe"operationoruse"ofaconsumerproductincludesreasonablyforeseeablemisuse,andwhetheradefectmayarisesolelyoutofreasonablyforeseeablemisuseoftheSubjectProducts.
WeconcludethattheCommissionhastheauthoritytofindthataproductisdefectivebasedsolelyonreasonablyforeseeablemisuseofaconsumerproduct.
First,theCommission'sregulationrecognizesthatadefectmaybefoundbasedonreasonablyforeseeablemisuseofaproduct.
Section1115.
4addressestheroleofreasonablyforeseeableconsumermisuseintwoplaces.
Section1115.
4(d)providesanexampleofadefectthatarisesoutof"reasonablyforeseeableconsumeruseormisuse":Apowertoolisnotaccompaniedbyadequateinstructionsandsafetywarnings.
Reasonablyforeseeableconsumeruseormisuse,basedinpartonthelackofadequateinstructionsandsafetywarnings,couldresultininjury.
Althoughtherearenoreportsofinjury,theproductcontainsadefectbecauseoftheinadequatewarningsandinstructions.
Theregulationalsospecificallylists"theroleofconsumermisuseoftheproductandtheforeseeabilityofsuchmisuse"asoneofthefactorstoconsiderindeterminingwhethertheproductcontainsadefect.
16C.
F.
R.
§1115.
4.
Basedonthepowertoolexamplein§1115.
4(d),RespondentarguesthattheCommission'sregulationonlyallowsfordefectfindingsthatarebasedinpartontheforeseeablemisuseofaproduct,andthatreasonablyforeseeablemisuseisaninsufficientbasis,standingalone,onwhichtobaseadefectfinding.
AnswerBr.
at14-15(citing16C.
F.
R.
§1115.
4);TranscriptofJune7,2017OralArgument("OralArg.
Tr.
")at60:1-61:20.
Ourreviewoftheapplicablelawcitedbelowdemonstratesnoconceivablerationalerelatedtoproductsafetythatjustifiesthisinterpretation.
NothingintheCPSAoraccompanyingregulationlimitstheCommission'sauthoritytoidentifydefectstothosedefectsthatarebasedonlyinpartbutnotentirelyonreasonablyforeseeablemisuse.
99WealsonotethatthepracticaleffectofsuchanarrowreadingwouldhobbletheCommission'sabilitytoaddressseriousproductsafetyconcernsassociatedwithproductsthatchildrenforeseeablymisuse,suchaschildrenclimbing12Second,theconceptof"foreseeablemisuse"hasbeenanintegralpartofconsumerproductsafetyanalysisformorethan40years,includingbeforethecreationofthisagency.
In1968,theNationalCommissiononProductSafety("NCPS")wasconvenedtoassesssafetythreatstoconsumers.
TheNCPSreviewedinjuryreportstodeterminecriticalpatternsandmodesofinjury,andtodiscoverpredictableproductmisuses.
FinalReportoftheNationalCommissiononProductSafety(June30,1970)("NCPSReport")at38.
Bystudyinginjuryreports,theNCPSidentifiedseveral"unreasonablehazards.
"Id.
at10-36.
TheNCPSissuedareportbasedonitsfindings,whichincludedfindingsofmisusedconsumerproducts,aswellasproducthazardsimproperlycharacterizedasconsumermisuse.
Id.
TheNCPSReportstated:…themanufacturerorselleroughtnotbeabsolvedmerelybecausetheconsumerusedtheproductinamannerdifferentfromthatintended.
Amanufacturershouldberesponsibleforinjurytoconsumersfromuseorcertaintypesofmisusewhichcouldreasonablyhavebeenanticipated.
Hisdutyistodesignandconstructproductswiththesemisusesinmind.
Id.
at75.
10Furthermore,theNCPSReportstated:"[m]anufacturersmusttakeallpracticalstepssystematicallytopreventforeseeablemisuseofproducts.
Ineffect,theyneedtobuildsafetyintothedesignandconstructionoftheirproducts.
"Id.
at62.
TheNCPSReportrecommendedcreationofanewindependentfederalagencytoregulateconsumerproductsafety.
Id.
at113.
TheCPSAwasenactedwithin2yearsoftheNCPSReport.
ConsistentwiththeNCPSReport,legislativehistoryassociatedwiththeCPSAdemonstratesthatCongressintendedtheCommissiontoregulateproductsthatpresentariskofinjurytoconsumers,evenifthatriskarisesoutofconsumerbehaviorcharacterizedasmisuseofaproduct.
SpeakingabouttheCommission'smandateinSection2(b)(1)oftheCPSA"toprotectthepublicagainstunreasonablerisksofinjuryassociatedwithconsumerproducts,"SenatorFrankMoss(D-Utah)stated:"…theword'associated'waschosensoastoconveythefactthattheriskofinjurydidnothavetoresultfrom'normaluse'oftheconsumerproductbutcouldalsoresultfromsuchthingsas'exposuretoorreasonablyforeseeablemisuseoftheconsumerproduct.
'"118Cong.
Rec.
36197,36198(dailyed.
Oct.
14,1972).
Notably,theSenateCommerceCommittee'sversionoftheCPSAdefinedtheterm"use"ofaconsumerproductas:"(A)exposureto,and(B)normaluseorreasonablyforeseeablemisuse.
"ConsumerSafetyActof1972,S.
3419,92Cong.
(1972).
Commentaryonthisdefinitionprovidesadditionalinsight:ontofurnitureandbeingcrushedwhenittipsover,orchildrenatplaybeingstrangledbyaccessiblewindowcoveringcords.
10Forexample,theNCPSReportstatedthattheindustryblamedexplodingglassbottlesonconsumermishandling,buttheNCPSconcludedthat"[t]heindustryshouldanticipateroutinestressonbottles,includingreportedminorimpactswhentheyarecheckedoutatthecounter,carriedhome,orplacedinarefrigerator.
"NCPSReportat17.
13Thedefinitionof"use"includesexposuretoandanynormaluse.
Inaddition,itincludesreasonablyforeseeablemisuse.
.
.
.
Forexample,achild'sdollinnormaluseiscuddledandloved.
Butitisreasonablyforeseeablethatsuchaproductcanbemisused--thatachildmaytugatthehairribbonofthedoll,therebyexposingadangerous,sharppin.
Insuchacase,theCommissionermaydeterminethereisanunreasonableriskofinjuryassociatedwiththeuse(includingreasonablyforeseeablemisuse)ofthedollwhichhasahairribbonattachedwithalong,sharppin.
S.
Rep.
No.
92-749,at15(1972).
AlthoughthefinalversionoftheCPSAdoesnotincludeadefinitionoftheterm"use,"thislegislativehistorydemonstratesthat"use"wasintendedasaninclusivetermthatalsoaddressesmisuseofaproduct.
ThelegislativehistoryoftheHouseCommerceCommitteeversionoftheCPSAthatwasultimatelyenacted,characterizes"use"intermsofexposuretohazards,whichdoesnotprecludemisuse,aslongassuchmisuseisreasonablyforeseeable.
H.
R.
Rep.
No.
92-1153,at27-28(1972).
CongressionalintentfortheCommissiontoaddressrisksofinjuryarisingfromconsumers'foreseeablemisuseofproductsappearsthroughoutCPSC-administeredstatutes.
ThesestatutesrecognizeexplicitlytheimportantandsignificantrolethatreasonablyforeseeableconsumermisuseofproductspresentsinexecutingtheCommission'smissiontoprotectthepublic,particularlychildren,fromunreasonablerisksofinjury,includingrisksarisingfromingestingpartorallofaconsumerproduct.
11Notably,theCommission'sstatutoryauthoritytopreventinjurytochildrenarisingoutofreasonablyforeseeablemisuseofaproductisnotlimitedtochildren'sproducts.
Indeed,severalCPSC-administeredstatutesarepremisedontheconceptofaddressingreasonablyforeseeablemisuseofa"generaluse"product.
12Third,theCommission'scaselawreflectstheCPSC'sauthoritytoaddressreasonablyforeseeableconsumermisuseofconsumerproductsthatpresentariskofinjuryundertheCPSA.
11See,e.
g.
,Section108(d)oftheConsumerProductSafetyImprovementActof2008("CPSIA")(15U.
S.
C.
§2057c(d)(1))(providingthatlimitsonphthalatecontentdonotapplytoinaccessiblecomponentpartsofchildren'stoysandchildcarearticlesthatare"notaccessibletoachildthroughnormalandreasonablyforeseeableuseandabuseofsuchproduct,asdeterminedbytheCommission"anddefining"reasonablyforeseeableuseandabuse"ofchildren'stoysandchildcarearticlestoinclude"swallowing,mouthing,breaking,orotherchildren'sactivities,andtheagingoftheproduct");Section2(f)(1)(A)oftheFederalHazardousSubstancesAct("FHSA")(15U.
S.
C.
§1261(f)(1)(A))(defininga"hazardoussubstance"toincludeinjuries"duringorasaproximateresultofanycustomaryorreasonablyforeseeablehandlingoruse,includingreasonablyforeseeableingestionbychildren");Section2(s)oftheFHSA(15U.
S.
C.
§1261(s))(describinga"mechanicalhazard"toincludepropertiessuchasfragmentation,propulsion,self-adheringcharacteristics,aspirationandingestion,ifsuchhazardarises"innormaluseorwhensubjectedtoreasonablyforeseeabledamageorabuse…").
12Forexample,thePoisonPreventionPackagingAct(15U.
S.
C.
§§1471-1477),directstheCommissiontoissue"specialpackaging"regulationstoaddresstheriskofpoisoningtochildrenunderfivefromeasilyaccessingandingestingtoxicorharmfulhouseholdsubstances.
TheChildren'sGasolineBurnPreventionAct(Sec.
2,Pub.
L.
No.
110-278,122Stat.
2602(Jul.
17,2008))requirestheCommissiontoregulatechild-resistantclosuresonportablegascancontainerstoaddresstheriskofburninjurytochildren.
AndtheRefrigeratorSafetyAct(15U.
S.
C.
§§1211-1214),requiresrefrigeratorstohavedoorsthatcanbeeasilyopenedfromtheinsidetoaddresstheriskofsuffocationdeathtochildrenwhoclimbinside.
Eachoftheseauthoritiesisintendedtoreducetheriskofinjurytochildrenfromreasonablyforeseeablemisuseofproductsthatarenotspecificallyintendedforusebychildren.
14SouthlandMowerCo.
v.
CPSC,619F.
2d499,513(5thCir.
1980);seealsoInreDye,1989WL435534at*2,*5-7;InreDyeInitialDec.
,1989WL435526at*15;IntheMatterofFrancisAlonso,Jr.
d/b/a/MylarStarKites,CPSCDocketNo.
75-16,InitialDecisionandOrder(June18,1976)("MylarStarKites")at4-5,findingsoffactaff'd,InitialDecisionandOrdersetasideonjurisdictionalgrounds,FinalDecisionandOrder(Sept.
16,1977).
InSouthlandMower,amanufacturerchallengedaCommissionregulationaddressingariskofinjuryarisingwhenconsumersremoveprotectiveshieldingfromlawnmowers.
619F.
2dat503-504,513.
ThemanufacturerarguedthattheriskofinjurytoconsumerswhoremovetheshielddidnotpresentanunreasonableriskofinjuryaddressableundertheCPSAbecausetheseconsumerschosetoassumetheriskofinjurybyremovingtheshield.
Id.
at513.
Citinglegislativehistory,theU.
S.
CourtofAppealsfortheFifthCircuitfoundthattheCommission'sauthorityextendedtoreasonablyforeseeableconsumermisuse.
Id.
ThecourtstatedthatanunderstandingofconsumerchoicetomisuseaproductwasrelevanttotheCommission'sassessmentofthereasonablenessoftheriskofinjury.
Id.
Thecourtfound"noevidencethatconsumersaccuratelyappreciatethenatureoftheriskofblade-contactinjuriesandthattheirpresumedwillingnesstodefeatprotectivemeasuresisreasonable.
"Id.
Thiscasesuggeststhatwhenassessingwhetherproductmisuseisreasonablyforeseeable,theCommissionshouldconsiderwhetherandtowhatextentconsumersappreciatetheriskofinjurypresented.
Finally,theALJmisinterpretedpreviousCommissionprecedentaslimitingdefectstothosethatariseoutoftheproperorintendeduseoftheproduct.
InitialDec.
at8-12.
Forexample,inInreDye,theCommissionfoundaproductnamed"WormGett'r"tobedefective.
1989WL435534at*7.
"WormGett'rs"weredevicesgenerallyknownas"wormprobes"thatcameinasetoftwo,six,or12probesintendedforinsertionintotheground.
Id.
at*1.
Theprobeswerethenelectricallychargedtodrivewormstothesurfacetobepickedupasfishingbait.
Id.
WormGett'rsweremanufacturedwithouta"returnwire,"sothatwhenpluggedin,the120voltsfromtheelectricaloutletwerefullyavailabletosendanelectriccurrentthroughanyconductivepathincontactwiththeprobe.
Id.
WhilenodeathswereassociatedwithWormGett'rs,wormprobesfoundtobefunctionallyequivalenttoWormGett'rswereassociatedwithmorethantwodozenelectrocutiondeaths.
Id.
at*6.
TheALJdistinguishedWormGett'rsfromthiscase,opiningthattheCommissionfoundWormGett'rsdefectivebecausetheriskofinjuryaroseoutofaccidentsormistakeswhileusingtheproductasintended,thatis,properuseexposedconsumerstotheriskofinjury.
InitialDec.
at9.
ContrarytotheALJ'sinterpretation,InreDyedoesnotstandforthepropositionthatonlytheproperorintendeduseofaproductcangiverisetoadefectdetermination.
InreDyeinvolvedscenariosthatmayproperlybecharacterizedasreasonablyforeseeableuseormisuse.
Inparticular,theconsumerbehaviorinInreDyethattheALJcharacterizedas"mistakes"canalsobecharacterizedas"reasonablyforeseeableuseormisuse"oftheproduct.
ThefactsinInreDyedemonstratethattheriskofelectrocutionaroseinanumberofwaysthatcouldnotbeadequatelypreventedbytheuser,includingaccidents(slipping,falling,andtripping);mistakes(ignoranceoftheelectricalhazard,notrealizingtheprobesareenergized,notrealizingahazardousleakagecurrentinthegroundcanemanatefromtheinsertedprobe,andbeingdistracted);readilyforeseeableevents(shoesbecomingwetandchildrenorotherpersonscoming15intotheareawheretheprobesarebeingused);intendeduseoftheproduct(pickingupworms);andaggravatingfactors(productinstructionstowaterthegroundbeforeuseandcommonuseoftheproductatnight).
1989WL435534at*2.
Indeed,theInitialDecisionandOrderinInreDyestatesthatusersconsistentlymisusedtheproduct.
InreDyeInitialDec.
,1989WL435526at*15.
TheALJalsoattemptedtodistinguishMylarStarKitesfromtheinstantcasebecause,similartoInreDye,hebelievedthatthealuminizedkiteinthatcasepresentedariskwhenproperlyusedbyconsumers.
InitialDec.
at11.
TheALJreasonedthatproperuseofthekiteinMylarStarKitescouldresultininjury,throughanaccidentornegligence,byflyingthekiteintoapowerline.
Id.
TheALJmisinterpretedtheholdinginMylarStarKites.
ThewarningsinMylarStarKitesinformedconsumersnevertoflythekitenearpowerlinesorduringwetweather,andnottoremovekitesfrompowerlinesiftheyshouldfallonornearpowerlines.
MylarStarKitesInitialDec.
at4.
Despitethesewarnings,consumerswereinjuredbecausekiteflyersdisobeyed,didnotreceive,ordidnotreadthewarnings,ortherewerebystanders(suchaschildren)inthearea.
Id.
at5.
Inotherwords,consumersmisusedthekites.
MylarStarKitesfoundthisconsumerconducttobe"clearlyforeseeable,"concluding:"Thepossibilitythatincidentssimilartothoseofrecordhereinwilloccurinthefutureisclearlyforeseeableunlessthemanufactureofkitescontainingconductivematerialisbanned.
"Id.
at11.
132.
Step1:TheCharacteristicsoftheSubjectProductsCreateaRiskofInjurytoChildrenHavingestablishedthatreasonablyforeseeablemisusemaybethebasisforfindingadefect,wenowturntowhetherComplaintCounselestablishedbyapreponderanceoftheevidencethattheSubjectProductscreateariskofinjurybasedonoperationoruseofthemagnets,includingreasonablyforeseeablemisuse.
Weconcludethattheyhave.
13TheALJ'smisinterpretationofMylarStarKitesextendedtothatcase'sweighingofriskversusutility.
TheALJfoundthefactsinMylarStarKitesinstructivebecausethealuminizedcoatingthatcreatedtheinjuryinthatcasewasnotnecessaryfortheperformanceofthekite.
InitialDec.
at11.
TheALJreasonedthatintheinstantcase,however,thefeaturethatcreatestherisk,theattractivenessofSREMstoeachother,isthe"sinequanonoftheiressence.
"Id.
TheALJfurtherstatedthatforSREMs,"[w]ithouttheabilitytoattracttoeachother,theproductisworthless.
"Id.
TheALJstatedthathebalancedtheriskofharmfromSREMusewiththenecessityofthemagneticpulland,purportedlyfollowingtherationaleinMylarStarKites,foundthatbecausethemagneticpullisnecessaryforfunction,notaesthetics,SREMsdonotcontainadefect.
Id.
TheALJstatedthat"usingtheapprovedanalysisofMylarStar,thereisnoquestionthatMylarStarwoulddictateadifferentresultifthemagneticcoatingimprovedfunctionality,notsimplyaesthetics.
"Id.
AlthoughweagreethatmagneticstrengthisaproductcharacteristicofSREMsliketheSubjectProductsthatcreatesariskofinjuryassociatedwiththeSubjectProductsandisalsotheessenceoftheproduct,wedisagreethatthisfindingisthedecidingfactorinadefectquery.
TheALJerredbyequatingthefunctionalityofthemagneticpullwiththeutilityoftheproductasawhole.
TheCommission'sregulation,whichwasissuedaftertheMylarStarKitesdecision,doesnotrequirebalancing"theriskofharmwiththenecessityofthemagneticpull"(InitialDec.
at11);rather,§1115.
4statesthatwhenaproductcharacteristicthatcreatesariskofinjuryisfunctionaltotheproduct(suchasmagnetism),theutilityoftheproducttoconsumersmustbebalancedagainsttheriskofinjury.
SeealsoInreDye,1989WL435534at*9-11.
Accordingly,evenwhereaproductcharacteristic,suchasstrongmagnetism,providesfunctionalitytoaproduct,adefectdeterminationrequiresthattheutilityoftheproductasawholebebalancedagainsttheriskofinjurytoconsumers,considering,asappropriate,thefactorslistedin§1115.
4.
16a.
CPSC'sExperiencewithSREMIngestionsinChildren'sToysSince2006,beforeRespondentbegansellingZenMagnetsin2009,CPSCconductedmorethanadozenrecallsofchildren'stoysduetothehazardofsmall,high-poweredmagnetsnotbeingadequatelycontainedwithinaproduct,makingthemaccessibleforchildrentoswallow.
Exs.
CC-10Aat5-6;CC-11at32-33.
Theserecallsinvolvedtoysthatusedhigh-poweredmagnetstofacilitatebuildingstructures.
Duringplay,themagnetswouldcomeloosefromacomponentpart;childrenthenplayedwithandingestedtheloosemagnets.
Ex.
CC-10Aat5.
Magnetingestionoccurredinchildrenyoungerthan6,aswellasinchildrenbetweentheagesof6and11.
Id.
TheinjuriesarisingfromtheseingestionsweresimilartotheinjuriesassociatedwithswallowingSREMsfrommagnetsets,i.
e.
,aspiration,intestinalinjuries,anddeath.
Id.
Theremedyinalloftheserecallswastoensurethatsmall,high-poweredmagnetsineachproductwereinaccessibletopreventchildrenfromingestingthem.
Id.
BasedontheCommission'sexperiencewithhigh-poweredmagnetingestions,ComplaintCounsel'switness,Dr.
J.
PaulFrantz,14opinedthatthedesignoftheSubjectProductsasloose,separablemagnetsishazardoustochildrenbecausethemagnetsarenotcontainedinawaythatmakesthemimpossibletoingest,suchasinaplasticcasing.
Tr.
342:14-344:3;385:19-387:1;Ex.
CC-10Aat6-7;17;43.
b.
Characteristics,Operation,andUseoftheSubjectProductsAsexplainedin§1115.
4andInreDye,1989WL435534at*9-11,webeginwithanevaluationoftheSubjectProducts'characteristicsandwhetherthoseproductcharacteristicscreateariskofinjury.
ItisuncontestedthattheSubjectProductsaresmall,spherical,shiny,reflective,smooth,loose,separable,andstronglymagnetic.
CCPostHr'gArg.
,Ex.
A,11-17,60-65,71;Exs.
CC-1Aat4-6;CC-4;CC-4A;CC-5;CC-5(2);CC-5A;CC-7at2,5;CC-19Aat4;Tr.
343:7-9.
Respondent'switness,Dr.
BoydEdwards,corroboratedthesalientproductcharacteristicsoftheSubjectProducts.
Ex.
R-155at19-20(confirming,baseduponhisownmeasurements,thattheSubjectProductshaveahighfluxindexandfitwithinthesmallpartscylinder).
TheSubjectProductsarenotencasedinplastictopreventingestion;rather,theyaresoldasaggregated,loosemagnetsinsetsorasindividualmagnets.
CCPostHr'gArg.
,Ex.
A,12,13,35,37,39,41,61,62,81.
ZenMagnetswereavailableinvarious-sizedcontainers14Dr.
Frantz,whohasaPh.
D.
andholdsanM.
S.
E.
inIndustrialandOperationsEngineeringandaB.
S.
E.
inHumanFactorsEngineering,isSeniorConsultantandco-founderofAppliedSafetyErgonomics,Inc.
,andanadjunctfacultymemberteachingSafetyManagementintheCollegeofEngineeringattheUniversityofMichigan.
Ex.
10at1;DirectTestimonyofDr.
J.
PaulFrantz,Ph.
D.
,C.
P.
S.
M.
,CPE("Ex.
CC-10A")at1.
Dr.
Frantzspecializesinwarnings,safetyengineering,andhumanfactorsengineering/ergonomics.
Ex.
CC-10Aat1.
Formorethan20years,Dr.
FrantzservedasamemberoftheAmericanNationalStandardsInstitute("ANSI")committeethataddressesproductwarnings.
Id.
ComplaintCounselretainedDr.
FrantztoevaluatewarningsprovidedwiththeSubjectProductsand"tocommentontheimplicationsofsuchwarningsfromahumanfactorsandproductsafetyperspective.
"Id.
at2.
17holding72,216,or1,728magnets,atpricesrangingfromapproximately$12.
65forthe72-pieceset,$32.
98to$38.
24forthe216-pieceset,andupto$263.
85forthe1,728-pieceset.
Id.
,Ex.
A,36,38,40;Tr.
1468:2-5.
ZenMagnetsalsocouldbepurchasedindividuallyfor20centspermagnet.
CCPostHr'gArg.
,Ex.
A,42.
IndividualNeoballscouldbepurchasedatpricesrangingfrom6centsto10centspermagnet.
Id.
,Ex.
A,85.
Eachmagnetinthesetisauniformsizeandshape,andwilleasilyfitintothesmall-partscylinderusedbytheCommissiontodeterminewhethersomethingissmallenoughforachildtoswallow.
Id.
,Ex.
A,14,63;Ex.
CC-1Aat4-6.
RespondentarguesthatthenaturalattractivenessofmagnetstoeachothercreatesabarriertolossandisauniquequalityoftheSubjectProducts.
RespondentZenMagnets,LLC'sPost-HearingArgument[filedonMar.
16,2015asDE138]("RPostHr'gArg.
")at13.
Respondentmaintainsthatitdoesnothaveacontainmentproblembecauseitrecommendedthatmagnetsbestoredin"ZenHex"form,whichallowsusersto"easilyensureallmagnetsareaccountedfor,whilealsoservingaconvenientmethodofstorage.
"Id.
at12-13(citingExs.
CC-50,CC-51,CC-52,andCC-63);AnswerBr.
at10-11(citingTr.
1769:20-1770:8).
RespondentalsoreliesonthetestimonyofDr.
BoydEdwards,15whotestifiedthathehasmorethan18,000magnets(Ex.
R-154Aat3)andhasusedmagnetsonhundredsofoccasions,buthaslostonlyfourmagnets.
RPostHr'gArg.
at13(citingTr.
1440:12-19);AnswerBr.
at11.
RespondentarguesthatDr.
Edwards"createdaviableandsimplecontainmentmechanism"byfollowingthreerules:(1)issuingverbalwarningsabouttheingestionhazard;(2)ensuringthatmagnetsremainontheworktable;and(3)ensuringthatindividualmagnetsarenotseparatedfromoneanother.
RPostHr'gArg.
at13;AnswerBr.
at11.
Respondentstatesthatitexpectsthatuserswillbeabletoaccountfortheirmagnets.
RPostHr'gArg.
at13(citingTr.
2011:14-20);AnswerBr.
at11(citingTr.
2105:10-15;2103:16-22).
WedonotfindRespondent'scontainmentargumentspersuasive.
AlthoughRespondenthasofferedvarioustheoriesofcontainment,Respondentpresentednoevidencethatthesetheoriesactuallywork,oraregenerallyusedbySREMusers.
Strongmagneticattractiondoesnotpreventchildrenfromseparatingmagnets,thusallowingchildrentoplacemagnetsintheirmouthsandswallowthem.
Indeed,Dr.
Frantz'sanalysisof95incidentreportsandIn-DepthInvestigations("IDIs")regardingmagnetingestionincidentsthatComplaintCounselprovided(seeExs.
CC-18.
1-18.
95;CC-30A-CC-32)demonstratethatchildrengainaccesstomagnetsinavarietyofways,includinggettingthemfromfriendsorfamilymembers,discoverywhilestoredandun-stored,directpurchase,andfindinglostmagnets.
Exs.
CC-10Aat29-31;CC-11at34-42.
Moreover,theindividualmagnetsthatcomprisetheSubjectProductscaneasilybecomeseparatedfromthesetinanumberofways,creatingariskofingestionbychildren.
Thatriskisnotobviousforanumberofreasons.
First,theintendeduseandoperationoftheSubject15Dr.
Edwards,whohasaPh.
D.
inappliedphysics,andholdsanM.
S.
andB.
S.
inphysics,istheDean,ExecutiveDirector,andPhysicsProfessoratUtahStateUniversity,UintahBasin.
DirectTestimonyRespondent'sExpertWitnessBoydF.
Edwards,Ph.
D.
("Ex.
R-154A")at1-2.
Previously,Dr.
Edwardstaughtundergraduateandgraduate-levelphysicsatWestVirginiaUniversityfor24years.
Id.
at1.
TheALJacceptedDr.
EdwardsasanexpertregardingtheeducationalutilityoftheSubjectProducts.
Tr.
1271:6-10;1285:21-1286:3.
18Productsasamanipulative"toy"requirethatthesmallmagnetsbeseparatedandreattachedtocreateandreshapethemintoavarietyoffigures,sculptures,structures,jewelry,orart.
See,e.
g.
,Exs.
R-55(productguidewithexamplesofstructuresthatcanbecreatedwiththeSubjectProducts);R-139("NeverLetGoofChildhoodWonder"demonstrationvideo);seealsoCC-10Aat13,15(discussingRespondent'smarketingoftheSubjectProductsasjewelryandrefrigeratorart).
TheevidencedemonstratesthatRespondentmarketedtheSubjectProductsforuseinwaysthatleadtoseparation,loss,orsharingoftheSubjectProducts,suchasforuseasjewelryandasrefrigeratorart.
See,e.
g.
,Exs.
CC-10Aat13-16(discussingZen'smarketingstatements,including"wristworthychain"and"terrificforrefrigeratorart,"aswellasMr.
ShihanQu'stestimonythatitisappropriatetouseSREMstocreateplayjewelry);CC-11at12-16.
Parentsandcaregiverswouldnotexpectaproductthatcanbedisplayedasrefrigeratorarttobedeadlytochildren:"refrigeratorartfrequentlyconsistsofchildren'sdrawingsormagnetsforchildrentoplaywith.
Zen'scontinuedmarketingoftheSubjectProductsasrefrigeratorartshowsthatitexpectsconsumerstoleavethemoutanddisplayedinareaswherechildrencanaccessthem,playwiththem,andingestthem.
"Ex.
CC-10Aat16.
SeparatingafewSREMsfromasettogivetosomeoneforuseasjewelrydoesnotappreciablylowertheplayvalueoftheoriginalset,butitincreasestheriskofinjuryassociatedwiththeseparatedSREMs:"[s]eparatingandsharingSREMscreatesarisktoanyonewhoobtainsjusttwomagnets(thenumbernecessaryforapiercingsimulation).
ItalsosimultaneouslyreducestheutilityofthosesharedSREMstoactivitiesthatonlyrequirealimitednumberofmagnets(suchassimulatingapiercing).
"Id.
at14;Tr.
378:9-380:9.
TheincidentdataandexperttestimonyevincethattheriskofinjuryfromSREMingestionrelatesto"separatedmagnets"fromalargerset.
However,unlikewithmagnetsthatfalloutofatoy,consumersdonotperceivetheloosemagnetsthatcomprisetheSubjectProducts,whichareintendedtobeseparatedandplayedwith,tobepartofabrokenproduct:"ThisactofpullingapartZenSREMsisroutine,unremarkable,andnecessaryformanyusesofZen'sSREMsandisnotviewedasbreakinganything.
"Ex.
CC-10Aat7.
Onceseparated,magnets"becomeavailablewithoutinformationthatisrelatedtoappropriateorinappropriateuses.
"Id.
;seealsoEx.
CC-19Aat15(Dr.
Steinbergtestifyingthatbecauseindividualmagnetsaretoosmalltobelabeled,"userswouldhavenowaytoappreciatetheriskofingestionjustbylookingatthemagnetballs").
Second,RespondentalsosoldspareSREMs,theavailabilityofwhichcanleadtoseparation,loss,orsharingofsmallersetsofmagnets.
RespondentsoldspareSREMsaspartofasalesstrategytoassistconsumerswholostmagnets,eitherthroughactuallossorsharingofmagnets.
Ex.
CC-10Aat19;seealsoid.
at23-25andTr.
349:16-350:13(determining,afterreviewingRespondent'ssalesrecords,thatRespondentprovided220,881sparemagnetstoconsumers).
RespondentsoldspareSREMswithoutwarnings.
Ex.
CC-10Aat23,25.
Respondentalsodidnotwarncustomersaboutthehazardofseparatedorlostmagnets,thehazardofmagnetmisuse,ortheneedtofindlostmagnets,whenRespondentsoldsparemagnetswithoutsuchinstructionorwarning.
Ex.
CC-10Aat25;Tr.
362:20-363:16.
19Finally,SREMscomprisingtheSubjectProductscanbelostwhilebeingusedintheintendedway.
Dr.
FrantzdemonstratedthatSREMscanbelostwhenmagnetsaredroppedonahardsurface.
Exs.
CC-10Aat20;CC-14(video);Tr.
145:11-21;147:6-148:2;173:20-174:7.
Magnetsthatbecomeseparatedorlostcanbepropelledintoandadheretothefloor,chairs,appliances,furniture,andotherplaceswherechildrenarelikelytofindthem.
Exs.
CC-10Aat20-21;CC-11at29-30;seealsoTr.
1408:17-1409:6.
Evenexperienceduserslosemagnets.
See,e.
g.
,Tr.
1407:9-16and1408:22-1409:6(Dr.
Edwardstestifyingthathefoundsomemagnetsinarugtwodaysafteruse);JointNoticeRegardingWitnessStipulations,Dec.
8,2014("JointNotice"),Resp't'sEx.
T(Pelletier)at39:8-19(findinglostmagnetsonthebottomofclassroomdesks).
LostSREMsaredifficulttofind,andmanytimestheyarelostwithouttheowner'sknowledge.
Exs.
CC-10Aat20;CC-11at30.
Dr.
FrantztestifiedthatitisunlikelythatZenownerswillbeabletokeeptrackofallSREMsinaset,whichcreatesanongoinghazardtochildrenwhomayenter"contaminatedspaces,"orareasthatcontainlostmagnets.
Ex.
CC-10Aat20-21;seealsoEx.
CC-19Aat12(Dr.
Steinbergtestifyingthat"acaregiveractingwithreasonablecarewouldnothavecountedorsearchedforasmallpieceofaproductthatappearstobeaninnocuoustoylikethesesmallmagnetballs").
ContrarytoRespondent'sargument(AnswerBr.
at10),Dr.
Frantzwasnotrequiredtoconductanindependentstudytoconcludethatmagnetscanbecomelostintheenvironmentorcanbeeasilylostorshared,becausehebasedhisconclusionsonexaminationofactualincidentreports.
16Respondent'sargumentthatmarketingdifferencesbetweenSREMmanufacturersinsulatehisproductfromadesigndefect(id.
at24-25)similarlyfails.
TheriskofinjuryinthiscaseresultsfromthecharacteristicsoftheSubjectProducts,specifically,andhowconsumersuse,orforeseeablymisuse,theproducts.
MarketingdifferencesdonotchangethebasiccharacteristicsofSREMs.
Evenproductsthataredesigned,manufactured,andmarketedasintendedbyamanufacturercanpresentariskofinjurytoconsumersandbefounddefective.
16C.
F.
R.
§1115.
4.
Moreover,theevidenceshowsthatRespondentmarketedtheSubjectProductsinwaysthatleadtoingestion.
Exs.
CC-10Aat13-16;CC-11at12-16.
16RespondentmakesvariousunpersuasiveargumentsaboutthereliabilityofComplaintCounsel'sexperts,Dr.
FrantzandDr.
Steinberg,includingthattestimonybyDr.
Steinbergisinsufficientbecauseitwasbasedon"thecolloquial,non-comparative,andnon-scientificusageof"'likely.
'"AnswerBr.
at10;RPostHr'gArg.
at8.
RespondentfurtherfaultsDr.
Steinberg'stestimonybecauseheconsideredincidentsas"illustrative"ofthe"rangeoftypesofincidents,"butdidnotattempttoquantifyorqualifythelikelihoodofchildrentomisusemagnets.
AnswerBr.
at10;RPostHr'gArg.
at8.
RespondentarguesthatDr.
Steinberg'stestimonythatmagnetsappealtochildrenismootifachilddoesnothaveaccesstomagnetsinthefirstplace(AnswerBr.
at13),andclaimsthatitimplementedsalesandmarketingstrategiestokeepitsproductsawayfromchildren.
Id.
(citingExs.
R-133;R-197;R-198;andTr.
2525;9-15).
Similarly,RespondentarguesthatDr.
Frantz'stestimonythatlossofmagnetswasa"frequentoccurrence,"andthatRespondentaccommodateslostmagnetsbyprovidingsparemagnets,wasbasedonamisconceptionabouthowRespondentmarketsitsbusiness.
Id.
NeitherDr.
FrantznorDr.
SteinbergwererequiredtopresentindependentresearchonhowandwhychildrenlosemagnetsoraccessSREMsandingestthem,particularlywhensuchexpertshadnumerousactualincidentsandinjuriestoevaluate.
Forexample,Dr.
Steinbergreviewedtheincidentdata,anddrewonhisexperienceasachildpsychologistspecializinginpsychologicaldevelopmentduringchildhoodandadolescence,opiningonhowandwhychildrenactuallyingestmagnets.
Moreover,Dr.
Steinberg'stestimonyisconsistentwiththeCommission'sexperiencethatyoungchildreningestsmall,shinyobjects.
20c.
IngestionofSREMsisaForeseeableMisuseoftheSubjectProductsbyChildrenwhoPlaywithSREMsChildrenplaywiththeSubjectProductsinanage-appropriateandforeseeablemanner.
ComplaintCounsel'sexpert,Dr.
LaurenceSteinberg,17concluded,toareasonabledegreeofscientificcertainty,thatyoungchildrenundertheageof5are"highlylikelytoplaywithorusetheSubjectProductsinwaysthatcanleadtoingestion"becausethemagnetsare"shiny,reflectiveandsmooth,"qualitiesthatare"particularlyenticingtoyoungchildren.
"Ex.
CC-19Aat3-4;Tr.
418:11-14;419:4-8.
Dr.
Steinbergexplainedthattheprimarywaybabies,toddlers,andsomepreschoolersexploretheworldisbyusingtheirmouths,becauseayoungchild"hasthemostcontroloverhisorherowntongue,lips,andmouth.
"Ex.
CC-19Aat4.
Accordingly,youngchildrenwill"putobjectstheyseethattheywanttolearnmoreaboutintotheirmouths.
"Id.
;Tr.
420:20-421:2;423:8-11.
Achildmayswallowthemagneteitherintentionallyoraccidentallyoncethemagnetsareinthechild'smouth.
Ex.
CC-19Aat4.
Dr.
SteinbergtestifiedthathowachildgainsaccesstotheSubjectProducts,whetherpurchasedonlineorinastore,itdoesnotchangehowayoungchildwouldinteractwiththeproduct.
Id.
at12.
Dr.
SteinbergexplainedthatdifferentpackagingwouldnotmakeadifferenceabouthowyoungchildreninteractwiththeSubjectProductsbecausemagnetsareoften"keptoutsideofthepackaging,displayedoutsideofthepackaging,sharedwithoutpackaging,andlostormisplacedwithoutpackaging.
"Id.
Moreover,evenifachildsawpackaging,ayoungchild,underage5,wouldbeunabletoreadawarningorrecognizefromthepackagingthattheproductposedadanger.
Id.
at4.
Dr.
Steinbergtestifiedthathereviewedthe95magnetingestionincidentreportsandIDIstoconsiderthevariouswayschildreninteractwiththemagnets,andopinedthatallofthechildreninthe95reportsinteractedwiththemagnetsinwaysthatwerereasonablegiventheirages.
Id.
at6.
Forexample,itisreasonableandage-appropriatebehaviorfora4-year-oldtobeunabletodistinguishbetweencandyandshinymagneticballs,especiallywhenthemagnetsarenotintheirpackaging.
Id.
Regardingolderchildren,Dr.
Steinbergexplainedthatsomeolderchildrenmaytestmagneticpropertiesofthemagnetsbystickingthemtotheirbraces,ortheymayexperimentwithbehavior,suchasfacialpiercing,whichacaregivermaydisapproveof,butperceivetobeasafewaytoexperimentwithmagnets.
Id.
at13;seealsoEx.
CC-27Aat13(Dr.
NoeltestifyingthatolderchildrenunintentionallyingestedSREMswhenusingSREMsaspretendjewelryandtodecoratebraces).
Dr.
Steinbergtestifiedthatolderchildrenmayviewthisbehaviorassafe17Dr.
Steinberg,whohasaPh.
D.
inDevelopmentalPsychology,istheDistinguishedUniversityProfessorofPsychologyatTempleUniversity,specializinginthestudyofpsychologicaldevelopmentduringchildhoodandadolescence.
DirectExpertTestimonyofDr.
LaurenceSteinberg("Ex.
CC-19A")at1.
ComplaintCounselretainedDr.
SteinbergtoreviewtheSubjectProductsand"giveanexpertopinionregardingthepsychologyofchildrenandtheircaregiversrelatedtotheuse,ingestion,andappreciationofanyriskofharmposedbytheSubjectProducts.
"Id.
at2.
21becauseofonlinevideosdemonstratingadultsandchildrenusingmagnetsinthisway.
18Ex.
CC-19Aat13.
Dr.
Steinbergtestifiedthatusingmagnetstomimictonguepiercingisdevelopmentallyappropriateforolderchildren.
Id.
Dr.
Steinbergalsotestifiedthatitwasdevelopmentallyappropriateforolderchildrentowanttosharemagnetswithfriends,butnotwarnfriendsaboutthedangersofmagnetingestion:Asachildgetsolderandpassesthroughpuberty,theirbrainsaredevelopinginsuchawaythattheimmediaterewardsgainedfrompleasingorimpressingone'speersoutweighrisksofhypotheticaldanger,ifthatdangerisevenperceived.
Thus,ifachildiswithapeergroupthatisusingthesemagnetstoimitatepiercing,thechildismorelikelytoexperimenthimself,evenifheperceivesariskofaccidentalingestion.
Further,themoretimesthatachildseessomeoneelseusingthemagnetsasafakepiercingwithoutincidentorinjury,eitheronline,inthemediaorwithfriends,themorelikelythechildwillbelievethereisnodangerandengageinthepracticethemselves.
Id.
at14.
TheinjurydataareconsistentwithDr.
Steinberg'stestimony.
Usingthe95incidentreportsandIDIsadmittedintoevidence,Dr.
Frantzcategorizedthemagnetingestionincidentsbasedonhowtheingestionoccurred.
Hewasabletodeterminehowtheingestionoccurredin55ofthe95reports,asfollows:26ingestions(47%)involvedanolderchildmimickingamouthpiercing.
Theaverageageofchildreninthisgroupwas11.
5yearsold,withtheagerangebeing8-15yearsold.
15ingestions(27%)involvedanolderchildaccidentallyswallowingmagnets.
Theaverageageofchildreninthisgroupwas10.
3yearsold,withtheagerangebeing7-16yearsold.
6ingestions(11%)involvedayoungchildintentionallyswallowingamagnet.
Theaverageageofchildreninthisgroupwas3.
5yearsold,withtheagerangebeing2-5yearsold.
3ingestions(5%)involvedanolderchildstickingmagnetstobraces.
Theaverageageofchildreninthisgroupwas10yearsold,withtheagerangebeing8-12yearsold.
18ComplaintCounselintroducedintoevidencetwovideos(Exs.
CC-21andCC-22)showingolderchildren,includingonecelebrity,usingmagnetstomimictonguepiercings.
Dr.
SteinbergtestifiedthatthevideosinformedhisopinionaboutwhetherolderchildrenwillappreciatetheriskassociatedwiththeSubjectProducts,concludingthat"ifolderchildrenseeotherchildren,especiallychildrenwhoarepopularorarecelebrities,usingmagnetballsinthisway–thatis,tosimulatefacialpiercings–withnoapparentseriousinjury,theyaremorelikelytomimicthatbehaviorthemselves,regardlessofthebrandofthemagnetballs.
"Ex.
CC-19Aat13-14.
223ingestions(5%)involvedachilddividingorseparatingthemagnets.
Theaverageageofchildreninthisgroupwas9.
3yearsold,withtheagerangebeing2-14yearsold.
2ingestions(4%)involvedanolderchildstoringorholdingmagnetsinthemouth.
Theaverageageofchildreninthisgroupwas11.
5yearsold,withtheagerangebeing9-14yearsold.
Ex.
CC-10Aat34-36.
BasedonhisreviewoftheincidentreportsandIDIs,Dr.
Frantzconcludedthatyoungchildrenmayintentionallyswallowmagnetsaspartoftheireatingbehavior,ortheymayunintentionallyswallowmagnetsaspartofmouthingthingsintheirenvironment.
Id.
at42.
Dr.
FrantzconcludedthatolderchildrendonotintentionallyswallowSREMs.
Id.
at42.
BasedonhisreviewoftheincidentreportsandIDIs,Dr.
Frantztestifiedthat:"[t]weensandteenshavereasonstoputSREMsintheirmouthsandareespeciallylikelytodoso,"and:"Eight-to14yearoldsthinktheycanputtheproductinoraroundtheirmouthswithoutswallowingit.
"Id.
at40;seealsoEx.
CC-19Aat16(Dr.
SteinbergtestifyingthatolderchildrenmayholdSREMsintheirmouthsorunconsciouslyplaceSREMsneartheirmouthswhileplayingwiththeproducts).
Moreover,"[s]wallowingcomesasasurprisetotweensandteensandisdescribedasunexpected,accidental,unwanted,and/orundesired.
"Ex.
CC-10Aat40.
Finally,"[t]weensandteensdonotintendorwanttoswallowSREMs,nordotheymistakethemforfood.
"Id.
OlderchildrenaccidentallyswallowSREMs"becausethemagnetsmovedinunexpectedways.
"Id.
at42.
d.
TheNatureoftheRiskofInjuryfromSREMIngestionbyChildrenIsSeriousandCanBeFatalAsexplainedinSectionI.
B,suprapp.
2-3,SREMs,ifswallowed,cancausegrievous,life-alteringinjuriesanddeath.
ComplaintCounsel'sexpert,Dr.
R.
AdamNoel,19explainedthatbecauseoftheirstrongmagneticproperties,magnetsthatareingestedcansticktogetheracrossloopsofbowelorothertissue.
Exs.
CC-24at2;CC-27Aat7.
19Dr.
Noel,amedicaldoctorspecializinginpediatricgastroenterology,isanAssociateProfessorofPediatricsatBaylorCollegeofMedicine,andtheDirectorofEndoscopyatChildren'sHospitalofSanAntonio.
DirectExpertTestimonyofR.
AdamNoel,M.
D.
("ExCC-27A")at1.
Inadditiontotreating,supervising,orbeingpersonallyinvolvedinapproximately10magnet-ingestioncasesandconsultingwithtreatingphysiciansonatleast25additionalcases,Dr.
NoelwastheprincipalinvestigatorfortheNorthAmericanSocietyforPediatricGastroenterology,HepatologyandNutrition("NASPGHAN")survey,whichwasthelargestsurveyatthetimeoftheexperiencesofpediatricgastroenterologistsindiagnosingandtreatingchildrenwhohaveingestedSREMs.
Id.
at2,4;seealsoNASPGHANPaper,"ProtectingChildrenfromMagnetIngestions"("Ex.
CC-24").
ComplaintCounselretainedDr.
Noel"toreviewavailableinformationaboutthemedicalriskspresentedbySREMs,"includingZenMagnets,Neoballs,andBuckyballs,and"togiveindependentexpertmedicalopinionsaboutthenatureoftheriskSREMspresenttochildren,theinjuriesassociatedwithingestionofSREMs,thetreatmentofsuchinjuries,andtheimpactofsuchinjuries,includingtheircost.
"Ex.
CC-27Aat5.
23AlthoughtheCommissionmayfindadefectevenifnoincidentsmaybeattributedtotheSubjectProducts,see16C.
F.
R.
§1115.
4;InreDye,1989WL435534at*6,20ComplaintCounselintroducedevidenceofdozensofinjuriesandonedeathassociatedwithSREMingestion,includingtwoincidentsinvolvingtheSubjectProducts.
WhenexaminingthedatashowingknownSREMingestions,wenotethattheSubjectProductsarefunctionallyidenticaltootherbrandsofmagnetsetscomprisedofSREMs.
CPSCmechanicalengineerVincentAmodeotestifiedthatheevaluatedZenMagnets,Neoballs,andBuckyballsusingthetestmethodintheToyStandard.
Ex.
CC-1Aat3-4;Tr.
73:16-74:2;79:21-80:8.
Mr.
Amodeoopined,toareasonabledegreeofscientificcertainty,thatBuckyballsarefunctionallyidenticaltoZenMagnetsandNeoballsinmagneticstrengthandsize.
Ex.
CC-1Aat8.
Eachmagnettypefitsintothesmallpartscylinderandhasafluxmeasurementgreaterthan50.
21Id.
at5-7.
Mr.
Amodeostated:"[t]hefluxindexbetweenthesemagnetsare[sic]similar,attractionforceversusseparationdistanceisfunctionallythesame,andtheattractionofthemagnetsacross1.
5cmand2.
0cmisfunctionallythesame.
"Id.
at8;Tr.
113:18-114:11.
Mr.
Amodeofurthertestifiedthatbeyondcolor,onceoutoftheoriginalpackaging,noapparentvisualdifferencesareobservableamongZen,Neoballs,andBuckyballs.
Ex.
CC-1Aat8;compareSamplesoftheSubjectProducts(Exs.
CC-4,CC-4A,CC-5,CC-5(2),CC-5A)withSamplesofBuckyballs(Exs.
CC-6,CC-6A).
Thus,becauseSREMsarefunctionallyidentical,andbrandsareindistinguishable,thephysicalcharacteristicsofSREMsthatgiverisetoariskofinjuryaresharedbyallbrands:small,spherical,shiny,reflective,smooth,loose,separable,andstronglymagnetic.
ThefactthatSREMsoutsideofpackagingareindistinguishabletoconsumersmeansthatdeterminingwhichbrandofSREMledtoeachincidentandinjuryisoftennotpossibleornecessaryinorderfortheCommissiontoact.
TheevidenceclearlyshowsthatthereweretwoincidentsinwhichweknowspecificallythattheSubjectProductswereassociatedwithtwoseriousinjuries.
SeeJointNotice,Compl.
Counsel'sEx.
J(Rivas)at2-4,11,13-1422(doctorsremoved14-year-oldgirl'scolon,appendix,andpartofintestines,afterchildingestedtwomagnets);Exs.
CC-18.
35,CC-27Aat11,andCC-30A(doctorsresectedseveralportionsof15-month-old'ssmallbowelaftertoddleringestedmagnetsandbuttonbatteries);seealsoExs.
CC-10Aat28(identifyingtwoincidents20TheCommissionconsiderslikelihoodoftheriskofinjuryunderSection15(a)(2),regardingwhetherthedefectcreatesasubstantialriskofinjurytothepublic.
SeeSectionIII.
B.
3,infrapp.
41-42;16C.
F.
R.
§1115.
12(g)(1)(iii).
21AsummaryofthetestdataappearsinthedraftProductSafetyAssessments,Exs.
CC-7,CC-8,andCC-9.
22TheALJerredinconcludingthatastatementcontainedinthisstipulatedtestimonywas"littlemorethanhearsay.
"InitialDec.
at16,n.
5.
Duringtheadministrativehearing,andattherequestoftheALJ,thepartiesagreedtosubmitaJointNoticeRegardingWitnessStipulations,Dec.
8,2014("JointNotice).
Tr.
808:14-18;870:6-9;871:22-874:3.
TheJointNoticelisted11witnessesforComplaintCounseland10witnessesforRespondent.
ThroughtheJointNotice,thepartiesagreedto"admit[][thewitnessstatements]intotherecordasifthewitnesshadtestifiedtosuchstatementsatthehearing….
"JointNoticeat1.
Becauseneitherpartyreserved,intheJointNotice,therighttomakehearsayobjectionsregardingthestipulatedtestimony,norraisedhearsayobjectionswithrespecttothistestimonyatthehearing,anystatementscontainedinthestipulatedtestimonythatwouldotherwiseconstitutehearsaymaybeadmitted.
Blodgettv.
C.
I.
R.
,394F.
3d1030,1040(8thCir.
2005).
24associatedwiththeSubjectProducts);CC-16atentry32482(spreadsheetentryinRespondent'scustomerlistindicatingthatfamilyfriendof14-year-oldgirlpurchasedtheSubjectProductsbeforetheincident);Tr.
2565:3-15(Mr.
QutestifyingthathewasawareoftwoincidentswheretheSubjectProductswereingested).
InadditiontoevidenceoftwoinjuriesassociatedspecificallywiththeSubjectProducts,evidenceconsistingof95magnetingestionincidentreportsandIDIs,aswellasasummaryofdetailedclinicaldataon123ingestions,introducedthroughDr.
Noel,fromtheresultsofaNorthAmericanSocietyforPediatricGastroenterology,HepatologyandNutrition("NASPGHAN")survey(the"NASPGHANSurvey"),demonstratehundredsofincidentsinvolvingSREMsthatwerephysicallyandfunctionallyequivalentinsizeandmagneticstrengthtotheSubjectProducts.
SeeExs.
CC-18.
1-18.
95;CC-24at1.
23TheIDIscontaintwocasesofparticularnotethatdemonstratejusthowcatastrophicinjuriesfromSREMscanbe.
Inthefirst,a19-month-oldgirldiedasaresultofischemicbowelfromSREMslocatedinthesmallintestine("PatientA").
Ex.
CC-18.
15(autopsyreport);JointNotice,Compl.
Counsel'sEx.
K(Somerset)at11(conclusionbymedicalexaminerwhoperformedtheautopsyonPatientAthat"thecauseofdeathwasischemicbowelduetomagnetingestion").
Inthesecond,a22-month-oldboyalsosufferedischemicbowelafteringestingatleasteightmagnets("PatientB").
Exs.
CC-18-27.
1;CC-27Aat9.
PatientBunderwentseveralsurgeries,includingoneinwhichsurgeonsremovedmostofhissmallintestinebecauseofabloodclotthathaddeveloped,cuttingoffthebloodsupplytothesmallintestine.
Exs.
CC-18.
27.
1;CC-27Aat9.
TheNASPGHANSurvey,whichwaspublishedin2012,wasthelargestsurveyatthetimeoftheexperiencesofpediatricgastroenterologistsindiagnosingandtreatingchildrenwhoingestedSREMs.
Ex.
CC-27Aat2-3.
TheNASPGHANSurveyreviewed481reportsofmagnetingestionsbychildrenspanning10years.
Exs.
CC-24at1;CC-27Aat2-3;Tr.
729:6-731:3.
NASPGHANmemberssubmitteddetailedclinicaldataon123cases.
Exs.
CC-24at1;CC-27Aat6;Tr.
731:5-21.
Ofthese123cases,thesurveyfoundthatforchildrenwhohadbothendoscopyandsurgery,48percenthadintestinalperforationorfistula,26percenthaddeep-pressurelesions,and5percenthadmucosalerythema(rednessandinflammation)orshallowerosion(eatingawayofthemucosalsurface).
Ex.
CC-27Aat7;Presentation,"NASPGHANNeodymiumMagnetBallIngestionSurveyResults"("Ex.
CC-28")at11.
TheevidenceshowsthatoneofthereasonstheinjuriesfromSREMingestionaresosevereisbecauseSREMingestionsaredifficulttodiagnose.
Patientsoftenpresentwithnonspecificsymptoms,suchasnauseaandfever,whichparents,caregivers,andmedicalprofessionalsmistakefortheflu,stomachvirus,orgastrointestinalinfection.
See,e.
g.
,Exs.
CC-27Aat10;CC-18.
15andCC-27Aat12(physicianadvisedmotherthatPatientA,whowasvomitingandlethargic,likelyhadastomachvirus);CC-18-27.
1andCC-27Aat9(parents23EvaluationofsuchevidencebyexpertsisasufficientbasisforthoseexpertstoassesswhetheraproductcontainsadesigndefectandtoopineonthecharacteristicsofSREMs,howconsumersinteractwithSREMs,whychildreningestSREMs,howchildrenareinjuredbyingestedSREMs,andtodescribetheriskofinjurypresentedbySREMstochildren.
25believedPatientBhadastomachvirusaftertoddlerbeganvomiting).
Youngchildren,inparticular,aredifficulttodiagnosebecausetheycannotverbalizeorotherwiseexplainthattheyingestedSREMs.
Ex.
CC-10Aat38-39.
Forexample,inonecase,whena15-month-oldgirlawokelethargicandwithoutanappetite,andvomitedjuicethatshedrank,hermotherbelievedthetoddlerhadtheflu.
Exs.
CC-18.
35;CC-27Aat11.
Thenextday,thetoddlerwenttothehospital,wherex-raysweretaken,butfailedtodetectthepresenceofSREMs.
Exs.
CC-18.
35;CC-27A11.
Themedicalprofessionalsreleasedthetoddler,advisingthemothertocallthepediatricianthenextdayifthetoddlerwasnotfeelingwell.
Exs.
CC-18.
35;CC-27Aat11.
Thenextday,themothertookherdaughtertothehospital,whereanotherx-raydetectedmagnetsandbuttonbatteriesinsidethetoddler'sintestines.
Exs.
CC-18.
35;CC-27Aat11.
Furthermore,medicalprofessionalsarenotgenerallyawareofthemedicalrisksthatingestedSREMspresent.
Ex.
CC-27Aat12.
AccordingtoDr.
Noel,physiciansandhealthcareprovidersassumethatmagnetswillbehavesimilarlytomostforeignbodiesthatareingestedandjustpassthroughthedigestivetract.
Id.
;Tr.
766:12-767:9.
Inonecase,anemergencyroomphysiciansenta14-year-oldgirlhomewhohadingestedSREMs,explainingtothemotherthatthemagnetswouldeventuallypass.
Exs.
CC-18.
48.
1;CC-27Aat12.
Thegirl'smothersoughtasecondmedicalopinion.
Exs.
CC-18.
48.
1;CC-27Aat12.
Surgeonsultimatelyremovedthegirl'sappendixandpartofherbowel.
Exs.
CC-18.
48.
1;CC-27Aat12.
TheALJpointedto"misdiagnosisandimpropermedicalcare"as"significantcontributingfactors"inPatientA'sdeath.
InitialDec.
at19(PatientA"wastreatedaftersheingestedSREMsandthemedicalprofessionalsreleasedherfromthehospitalbasedonmisdiagnosis").
Misdiagnosis,however,isauniqueproblemassociatedwithSREMs.
Tr.
766:22-767:9;Ex.
CC-27Aat10-11.
UnlessacaregiverknowsthatachildhasingestedSREMs,orthechildcanreportthatheorsheingestedSREMs,physiciansdonotsuspectthatachildexhibitingnonspecificsymptoms,suchasfeverandnausea,hasingestedSREMs.
Ex.
CC-27Aat10-11;seealsoExs.
CC-18.
35andCC-27Aat11(x-raysfailedtodetectpresenceofSREMsin15-month-oldgirlwhoappearedlethargicandwasvomiting).
Additionally,Dr.
Frantztestifiedthat,basedupontheincidentreportshereviewed,youngchildren"generallydidnotorcouldnot"reporttheyhadingestedSREMs.
Ex.
CC-10Aat38-39.
Notably,theALJrecognizedthedifficultyindiagnosingaSREMingestion,statinglaterintheopinionthatmagnets"becomedangerouswheningestedbecauseoftheirpropensitytocauseintestinalpinching,somethingmedicalprofessionals,letalonetheaverageconsumer,wouldnotrealize.
"InitialDec.
at24.
ThetreatmentrequiredforSREMingestiondiffersfromingestionofotherforeignobjects.
Generallyspeaking,mostforeignbodiesthatareingestedpassthroughthedigestivesystem.
Tr.
739:7-18;Ex.
CC-27Aat7.
Magnets,however,areuniquebecausetheycancauseinjurythroughoutthebowel.
Tr.
739:19-21.
Becausephysiciansdonotknowwherethemagnetswillsticktogether,physicianstrytoremovethemagnetsasearlyaspossible.
Tr.
739:19-740:3.
Consequently,thesurgicalinterventionrateforSREMingestionsgreatlyexceedstheinterventionrateformostotherforeignbodyingestions.
Tr.
656:15-18;740:5-742:20;Ex.
CC-27Aat12.
Whilethesurgicalinterventionrateforotherforeignobjectsrangesbetween1026and20percent,theinterventionrateforSREMingestionsis79percent.
Tr.
741:6-16;Ex.
CC-27Aat6,12-13.
IfachildingestsatleasttwoSREMs,closemonitoring,usuallybymultiplex-raysorbodyscans,isnecessarytodeterminewhethertheSREMshaveconnectedtoeachotherthroughtissue.
Ex.
CC-27Aat8.
IfSREMsbecomelodgedinthedigestivetract,intervention,usuallythroughendoscopy,colonoscopy,orabdominalsurgery,isnecessary.
Id.
TheNASPGHANSurveyfoundthatofthe123SREMingestioncaseswithdetailedclinicaldata,52percentresultedinanendoscopyand27percentinvolvedsurgery(6percentinvolvedonlysurgeryand21percentinvolvedbothendoscopyandsurgery).
Tr.
705:6-10;Exs.
CC-27Aat6;CC-28at8.
24Insomecases,interventionwasnecessarynotjusttoremovethemagnets,buttorepairorremovedamagedordeadtissue.
Exs.
CC-18-27.
1andCC-27Aat9(mostofPatientB'ssmallintestineremovedandostomy(artificialbowelopening)createdtoremovestoolfrombody);CC-27Aat11andCC-31(9-year-oldboy'sappendixandportionsofsmallandlargeintestinesremoved);CC-27Aat11andCC-30(severalportionsof15-month-old'ssmallbowelwereresectedtorepairtissuedamage);Exs.
CC-18.
48.
1andCC-27Aat12(14-year-oldgirl'sappendixandpartofbowelremoved).
InvasiveprocedurestoremoveSREMspresentpotentialcomplicationsaswell,includinginfection,postoperativeinflammation,andtissueinjury.
Exs.
CC-27Aat8,13;CC-32(10-year-oldgirlsufferedrespiratorydistressafterfluidthatmedicalprofessionalsintroducedtohelppassthemagnetsfromherdigestivetractwentintoherlungs).
Althoughgenerallyconsideredsafe,endoscopyhasassociatedrisks,includingintestinalbleeding,infectionorperforationofthegastrointestinaltract,andrisksassociatedwithsedationand/orgeneralanesthesia.
Tr.
743:22-744:20;Ex.
CC-27Aat8.
Multiplex-raysandCATscansalsopresentrisks.
Tr.
629:10-17;Ex.
CC-27Aat8.
Inadditiontotheacuteinjuries,somechildrendescribedintheIDIswillclearlyhavelong-termcarerequirementsandareatriskoffuturehealthcomplicationsasaresultofswallowingSREMs.
Forexample,PatientBwillrequireacolostomybagtoremovestoolfromhisyoungbodyuntilhereceivesaboweltransplant,whichmaynotbeforyears.
Exs.
CC-18.
27.
1;CC-27Aat9-10.
Inaddition,PatientBisatriskofsystemicinfectionfromtheintravenousnutritionhereceives,andheisatlong-termriskofliverdamage.
Exs.
CC-18.
27.
1;CC-27Aat10.
Inanothercase,the15-month-oldgirlwhoswallowedmagnetsandbuttonbatteriesisatriskofbowel-relatedproblemsandintestinaladhesions.
Ex.
CC-27Aat11.
TreatmentcostsassociatedwithSREMingestionsmaybe"highandevencatastrophic.
"CC-27Aat14.
X-raysandmultipleCATimagescostseveralthousanddollars,andanendoscopycostsatleast$2,000,excludingthecostsofx-rayorCATimaging.
Id.
Ifsurgeryisrequired,thecostsofdiagnosis,surgery,andtreatmentcanexceed$75,000.
Id.
Longhospitalstayscancostseveralhundredthousanddollars,and"difficultcases"cancostmillionsofdollars.
Id.
24Twenty-onepercentofthecasesinvolvednoinvasivemedicalintervention.
Exs.
CC-27Aat6;CC-28at8.
27Finally,theALJ'sconclusionthatlackofparentalsupervisioncontributestotheriskofinjuryassociatedwithSREMs(InitialDec.
at18-19)isbothunsupportedbytheevidenceandcompletelyirrelevanttowhetherchildrenswallowingSREMsconstitutesareasonablyforeseeablemisuseoftheSubjectProducts.
25Dr.
SteinbergtestifiedthatitwasreasonableforparentsofchildrenwhoingestedSREMsnottosuspectthatthemagnetsweredangerous.
Ex.
CC-19Aat9-11,17(testifyingthattheparentshadneverseenSREMsbefore,themagnetswerenotaccompaniedwithanywarningsorpackaging,andthemagnetslookedlikeatoyandcouldbeusedtocreatejewelry).
Dr.
Steinbergalsotestifiedthatbecause"[i]tonlytakesafewsecondsforachildtofindandputoneofthesesmallmagnetballsintheirmouthsandswallow,""[a]caregiveractingwithreasonablecareeven[sic]maynotevenseethechildputthemagnetinhismouth.
"Id.
at8.
Regardingolderchildren,Dr.
SteinbergexplainedthatacaregiveractingwithreasonablecarewouldnotbelievethatanolderchildwouldintentionallyingestSREMs.
Id.
at17.
Dr.
Steinbergstated:"[a]reasonablecaregiverisunlikelytocontemplatethatherchildwillengageinbehaviorsuchasmimickingpiercingorstickingmagnetstobraces.
"Id.
at18.
Thus,accordingtoDr.
Steinberg,acaregiverwouldnotbelieveitwasnecessarytowarnolderchildrenagainstengaginginthisbehavior.
Id.
Dr.
Steinbergconcluded:[A]caregivermayhavenoreasontosuspectthatachildwouldhaveaccesstothemagnets.
MagnetsfromtheSubjectProductsareeasilyseparated,easilyhidden,andeasilyshared.
Inmyopinion,noamountofreasonablevigilancefromacaregiverislikelytopreventachildfromgainingaccesstotheSubjectProductandhidingsuchaccessfromacaregiver.
Id.
25TheALJconcludedthattheriskofinjuryfromSREMingestionwas"significant"whentherewasalackofparentalsupervisionbasedonunswornpolicenotesinthecasefileofPatientA.
InitialDec.
at18-20.
Yet,theevidencedemonstratesthatPatientAdiedfromingestingSREMs.
ThemedicalexaminerwhoperformedtheautopsyonPatientAconcluded:"theonlyexplanationfor[PatientA's]deathwasischemicbowelduetosphericalmagnetsinthesmallintestine"and"themannerofdeathwasaccidental.
"JointNotice,Compl.
Counsel'sEx.
K(Somerset)at11.
NothingintherecorddemonstratesthatPatientA'sparentknewoftherisksthatSREMsposetochildrenifingested.
Theparentexplainedthatthemagnets,whichwerenotinanypackaging,didnothaveanywarningsorinstructions.
JointNotice,Compl.
Counsel'sEx.
E(Chaffin)at4.
Inaddition,Dr.
SteinbergconcludedthatitwasreasonableforPatientA'sparenttopermittheSREMstocomeintothehomebecausetheSREMswerenotlabeled,lackedwarnings,appearedharmless,andappearedtobeatoy.
Ex.
CC-19Aat10.
WespecificallysetasidetheALJ'sfindingsthatPatientA'sparentwas"amorethannegligentparent"(InitialDec.
at19)andthat"PatientA'sexposuretoaninsecticidedemonstratesalackofbasiccustodialsupervision,whichverylikelycouldhavepreventedSREMingestioninthefirstplace"(id.
at19)becausetheseconclusionsareirrelevanttotheCommission'sdefectdetermination(seeSectionIII.
A.
1.
a,suprapp.
9-10)andarenotsupportedbythefactsinthiscase.
28Takentogether,the95incidentreportsandIDIs,theNASPGHANSurvey,andthetestimonyofDr.
Noel,demonstratethecatastrophicnatureoftheriskthatswallowingonemagnetandametalobject,ortwomagnetspresent.
26ComplaintCounselhavemettheirburdentodemonstratethatthecharacteristicsoftheSubjectProductsasloose,small,spherical,high-fluxSREMsthatcanseparatefromtheirsetcreatesaningestionhazardtochildren,andchildrencanbeandhavebeenseriouslyinjuredordiedfromingestingSREMs.
e.
ChildrenArethePopulationExposedtotheProductanditsRiskofInjuryTheCommission'sregulationat16C.
F.
R.
§1115.
4statesonefactorthatmaybeusedinadefectanalysisis"thepopulationexposedtotheproductanditsriskofinjury.
"TheALJseemstohaveinterpretedthesewordsasrequiringaquantifyinganalysisofthenumberofpeopleexposedtotheproductandpossibleinjury,concludingthatthenumberofindividualsexposedtotheriskofinjurywassmallincomparisontothenumberofpeopleexposedtotheproduct.
InitialDec.
at23-24.
Onceagain,theALJ'serroneousexclusionfromconsiderationofreasonablyforeseeablemisuseoftheSubjectProductstaintedhisanalysisandconclusionastothepopulationexposed.
TheALJstated:"[b]ecauseriskofinjurycanonlyhappenbyfirstinsertingSREMsintotheconsumer'smouth,…thepopulationexposedtotheproduct'sriskofinjury[is]tooamorphousduetoextraneous,particularizedfactors,i.
e.
,age,intelligence,carelessness,andeducation.
"Id.
at23.
TheALJfoundthatnosingleindividualorgroupofindividualsis"constantlysubjectedtotheproduct'sriskofinjurysimplybecausenotallindividuals,nomattertheage,willingesttheproduct.
"Id.
ReviewingtheNationalElectronicInjurySurveillanceSystem("NEISS")estimatessubmittedbyComplaintCounsel,theALJstated:"[t]hesenumbersareinsignificanttoshowanyspecific,identifiablepopulation,particularlygiventhemassamountofmagnetspurchasedandalreadyonthemarket.
"Id.
TheALJ'sconclusiondemonstratesnotonlyhiscontinuingmisunderstandingoftheroleofreasonablyforeseeablemisuseinfindingaproductdefect,but,also,hisfundamentalmisunderstandingofhowtheCommissionconsidersthepopulationexposedtotheriskofinjurywhendeterminingwhetheraproductdefectexists.
Quantitativeriskanalysis–meaningthenumberofinjuriescomparedtothenumberofproductssold–isnotrequiredtoproveadefectinaSection15case.
Insteadofaquantitativeanalysisofthepopulationexposed,theCommission,inthisinstancelooksatthecharacteristicsofthepopulationexposedtotheriskofinjury.
Afterreviewingtheevidence,wefindthatchildren,avulnerablepopulation,areoverwhelminglythepeopleexposedtotheriskofinjurypresentedbytheSubjectProducts.
Accordingly,thepopulationexposedtotheproduct'sriskofinjuryisnot,astheALJwouldhaveusbelieve,"difficulttoidentify";norisit"tooamorphousduetoextraneous,particularizedfactors,i.
e.
,age,intelligence,carelessness,andeducation.
"InitialDec.
at23.
Nothingintheevidencesuggeststhatthechildrenwhoswallowmagnetsarelessintelligent,careless,or26TheALJwronglybelievedthatanevaluationofthenatureoftheriskofinjuryincludesnotjustananalysisofthekindofinjuryassociatedwithingestion,butalsoproperuseversusimproperuse.
InitialDec.
at17.
Additionally,theALJ'sconsiderationofmitigatingcircumstances,suchasmisdiagnosisandlackofparentalsupervision,arenotcontemplatedunderthestatuteortheCommission'sregulation,andarenotsupportedbythefacts.
29uneducated,thanotherchildren.
27Infact,Dr.
Steinberg'stestimonywasthatchildrenwhoswallowedmagnetswereengagedinage-appropriatebehavior.
SeeSectionIII.
A.
2.
c,suprapp.
20-21.
BothpartiesandtheALJagreethatingestedSREMspresentaseriousriskofinjurytochildren.
InitialDec.
at17;Appealat41;AnswerBr.
at24.
Assetforthabove,thoseinjuriescanbecatastrophic.
SectionIII.
A.
2.
d,suprapp.
22-26.
ThefollowingevidenceclearlydemonstratesthatthepopulationatriskofinjuryfromtheSubjectProductsischildren:(1)ACPSCstaffmemorandumsummarizingmagnetsetincidentsincludedinNEISS,aswellasCPSC'sanecdotaldata,"UpdateonNEISSestimatesandreportedincidentsrelatedtoingestionofmagnetsfromhigh-poweredmagnetsets,"datedJune25,2014,Ex.
CC-39("MagnetIncidentMemo"),28whichfoundthatthelargestproportionofemergencydepartment-treated,magnet-relatedingestionsisinthe4to12year-oldagegroupandthat66ofthe84ConsumerProductSafetyRiskManagementSystem("CPSRMS")reportsinvolvedchildren12oryounger.
Ex.
CC-39at9(Table6);(2)95magnetingestionincidentreportsandIDIs,whichwereconductedinresponsetoreportsofincidentsinvolvingmagnetingestions,aswellasexpertanalysisofthesedocuments.
ExhibitsCC-18.
1-18.
95demonstrateanincidentagerangeof1to16yearsold,withaspikeinyoungchildren(2–4yearsold)andolderchildren(9–13yearsold).
Ex.
CC-10Aat29;and27WenotethattheNASPGHANSurveydemonstratedthat5percentoftheincidentsoccurredinpatientswithapsychiatricdisorder,and12percentoftheincidentsinvolvedapatientwithadevelopmentaldisorder.
CC-28atslide6.
Neitherpsychiatricdisordernordevelopmentaldisorderiscorrelatedintheevidenceasafactorinfluencingintelligence,carelessness,oreducationlevel.
Intelligence,carelessness,andeducationappeartobecriteriaadoptedbytheALJwithoutatietotheevidencesubmittedatthehearing.
28Duringtheadministrativehearingin2014,theALJadmittedtheMagnetIncidentMemoasevidenceinthiscase.
Tr.
912:12-913:6.
TheAssociateExecutiveDirector,DirectorateforEpidemiology,testifiedabouttheinformationcontainedinthismemorandumduringthehearing,statingthatahighdegreeofconfidenceandcertaintyexistsastotheaccuracyintheNEISSprojectionsformagnetincidents.
Tr.
913:8-923:4;961:16-963:8.
AfterconclusionoftheadministrativehearinginDecember2014,RespondentchallengedtheCommission'sFinalRule:SafetyStandardforMagnetSets,79Fed.
Reg.
59,962,59,964(Oct.
3,2014)("FinalRuleforMagnetSets").
OnNovember22,2016,theU.
S.
CourtofAppealsfortheTenthCircuitvacatedandremandedtheagency'sFinalRuleforMagnetSets,statingthattheCommission'sfactualfindingssupportingtherule,namelycertainNEISSdataprojections,were"incompleteandinadequatelyexplained.
"ZenMagnets,LLCv.
CPSC,841F.
3d1141,1144(10thCir.
2016)("TenthCircuitDecision").
Accordingly,outofanabundanceofcautioninlightoftheTenthCircuitDecision,theCommissionwillnotrelyonNEISSdataandtheMagnetIncidentMemoforinjuryestimates,butwillconsidertheinformationasinstructiveregardingthepopulationexposedtotheriskofinjuryfrommagnetingestions.
30(3)TheNASPGHANSurveyconductedbyDr.
Noel,whichreviewed481reportsofmagnetingestionsbychildrenoveratenyearperiod,andinvolveddetailedclinicaldataon123SREMingestions,corroboratingtheriskofinjurytotwodistinctgroupsofchildren.
Ex.
CC-24at1.
Thesedatademonstratethatchildrenbetweentheagesof13monthsand6yearsoldaccountforjustmorethan50percentoftheincidentsintheSurveyandareatthehighestriskofingestion,butthat"asignificantpopulationofolderchildrenandadolescents"alsoingestmagnets.
Id.
SeealsoEx.
CC-28atslide4(demonstratingincidentspikesinthe3to6year-oldand9to12year-oldagegroups).
Inaddition,assetforthonpages20-23ofthisFinalDecisionandOrder,Dr.
Steinbergprovidedexperttestimonyconcerningtheperfectlyage-appropriateconductthatputstwodistinctagegroups(under5andbetween9and13)atriskofinjuryfromtheSubjectProducts.
Dr.
Frantz,whoalsoreviewedthe95incidentreportsandIDIs,testifiedconsistentlywithDr.
SteinbergthatSREMinjuriesareuniqueinthataspikeininjuriesoccursinthesetwoagegroupsofchildren.
Exs.
CC-10Aat29;CC-11at36,47-48;Tr.
373:20-374:11.
f.
TheRiskofInjuryfromIngestingSREMsIsNotObvioustoChildren,Caregivers,orHealthProfessionalsBasedontheevidenceintherecorddemonstratingthatchildren,caregivers,andevenmedicalprofessionalsdonotappreciatetheriskofinjury,andRespondent'sadmissionthatingestionisa"hiddenrisk"associatedwithmagnetsets,theCommissionfindsthattheriskofinjurypresentedbymagnetsetsisnotobvioustoconsumers.
Exs.
CC-10Aat4;CC-11at7;CC-19Aat4,11,13-14,17;CC-27Aat12;Tr.
766:16-767:9;AnswerBr.
at29.
TheCommissionagreeswiththeALJ'sfindingthatingestingSREMsisdangerousandthat"aconsumerisnotlikelytoappreciatethefullmagnitudeoftheriskassociatedwithSREMingestioniftheproductisseparatedfromitspackagingandwarnings.
"InitialDec.
at24.
TheALJstatedthatmagnets"arenotmerechokinghazards(ifatall),butbecomedangerouswheningestedbecauseoftheirpropensitytocauseintestinalpinching,somethingmedicalprofessionals,letalonetheaverageconsumer,wouldnotrealize.
"Id.
TheALJconcluded,however,that"warningsadequatelyaddresstheissuewithconsumers.
"Id.
TheALJfoundthatwithoutwarnings,theobviousnessoftheriskislow,concludingthatthisfactorweighsinfavoroffindingasubstantialproducthazard.
Id.
Asdiscussedbelow,therecorddoesnotsupporttheALJ'sconclusionthatwarningsmitigatetheriskofinjuryinthiscase;however,weagreethatthehazardisnotobvioustoconsumersandalsothatthisfactorweighsinfavoroffindingtheSubjectProductsdefective.
g.
WarningsCannotMitigatetheRiskofInjuryAssociatedwiththeSubjectProductsTheALJfoundthatingestionoflooseorseparatedmagnetsistherisk,andthatbecauseRespondentwarnedagainstingestion,Respondent'swarningsweresufficient.
Id.
at14-15.
31Respondentconcedesthattheriskofinjuryisnotobvious,butstatesthat"whenanotherwisehiddenriskisidentifiedandhighlighted"bywarningstatements,itis"onlylogical"thatsuchriskbecomes"betterknownandapparent.
"AnswerBr.
at28-29.
RespondentmaintainsthattheALJ"correctlyfound"thattheSubjectProducts'warningsincreasetheawarenessoftheriskassociatedwithingestingSREMs.
Id.
at28.
Respondentalsocites"thelackofcredibleevidence"thattheSubjectProductshavecausedinjury,andthelackofevidencethatSREMs"poseasignificantriskofinjurygiventhenumberofproductsonthemarket,"assupportingtheALJ'sstatementthatwarningshelptomitigatetheriskofinjuryassociatedwithmagnetsthatconsumersmaynotfullyappreciate.
Id.
at29.
WearenotpersuadedbyRespondent'sargumentsandtheALJ'sfindingthatRespondent'swarnings,inparticular,sufficientlymitigatedtheriskofinjurypresentedbytheSubjectProducts.
TheALJcompletelyignoredevidencedemonstratingthefactthattheriskofinjuryoccurswhenmagnetsareseparatedfromtheirset,sothateventhebestwarningisunlikelytobeseenbytheuser.
Theevidencedemonstratesthat,regardlessofthewarningcontent,Respondent'swarningsaredefectivebecausewarningsthatareneverseen,cannotberead,orthatarenotunderstoodorheeded,cannotmitigatetheriskofinjuryassociatedwithSREMs.
i.
WarningLabelLimitationsTheevidencedemonstratesthatnowarningcouldmitigatetheriskofinjuryassociatedwiththeSubjectProducts.
AnywarningmustbeplacedonthepackagingastheSubjectProductsaretoosmalltoplaceawarningoneachindividualmagnet.
Tr.
382:3-10;Ex.
CC-11at53.
Moreover,eventhewarningsplacedonpackagingdonotaccompanyindividualmagnetsthatarelost,found,orshared.
Productpackagingisoftendiscarded,misplaced,or,ifkept,isnotusedtostoretheSubjectProductswhennotinuse.
29Ex.
CC-19Aat4,10,12;seealsoInreDye,1989WL29Theevidencealsodemonstratesthatevenwhenpackagingisretained,traditionalwarnings,suchas"seekimmediatemedicalattentionifswallowed,"arenoteffectivefortheSubjectProductsduetothefollowinguniquemedicalimplicationsofmagnetingestion:CaregiversdonotdetectaningestionepisodebecausechildrendonotchokeonSREMsandtherearenoimmediatesymptomswhenachildaccidentallyorintentionallyswallowsSREMsthathavebeenseparatedfromtheset.
ToddlerswhoingestSREMscannottelltheircaregiverswhattheyingested,andolderchildrenmaynottelltheircaregiverseither.
AchildwhoingestsSREMsrequiresanabdominalx-rayassoonaspossible,yetcommonmedicalrulesfortreatingingestionsofforeignbodiesdonotsuggestthismedicalresponse.
MedicalspecialistshavedevelopedaspecifictreatmentregimenforSREMingestionsthathingesonknowledgethatSREMswereingestedinthefirstplace.
Ex.
CC-10Aat4,39.
Thus,accordingtoDr.
Frantz,thehealthrisksassociatedwithSREMingestionpresentpracticalchallengesforwarningsbecausesuchwarningspresume:(1)detectionoftheswallowingeventand(2)thepresenceofimmediatesymptoms,neitherofwhichisobviouswithrespecttoanepisodeofmagnetingestion.
Id.
at4.
InInreDye,thisfactorwasimportantbecausetheexperienceofconsumerswithother,similarproductswasthatthoseproductsdidnotpresentanelectrocutionhazard.
1989WL435534at*8.
32435534at*8(warninglabellikelydiscarded).
StructurescreatedwithSREMsmaybeplacedondisplay,andnotdismantledandreturnedtopackaging.
Ex.
CC-19Aat4,12.
Theriskofinjurytochildrenincreaseswhenmagnetsareseparatedfromtheirset,suchaswhenmagnetsarelost,found,orshared.
Exs.
CC-10Aat42;CC-11at48.
Injurydatashowthattoddlersthroughpreschool-agechildrenhavegainedaccesstoSREMsasaresultofsomeoneelselosingSREMsorbecauseSREMshaveseparatedfromtheirsets.
Ex.
CC-11at48.
Olderchildrenmayreceivesubsetsofmagnetsetsfromtheirpeers.
Id.
;seealsoCC-10Aat40.
Dr.
Frantzreviewedthe95magnetingestionincidentreportsandIDIsprovidedbyComplaintCounsel,asdescribedatSectionIII.
A.
2.
b,suprap.
17(citingCC-10Aat29-31;CC-11at34-42).
Ofthe51reportsthathadsufficientdatatodetermineSREMaccess,69percentofthechildrenwouldnothaveseenawarningbecausetheyobtainedSREMsfromafriend,foundalostSREM,orfoundSREMsthathadnotbeenstored.
Ex.
CC-10Aat30-31.
Dr.
Frantzalsoprovidedanagehistogramofall95incidents,findingthat37oftheincidentsinvolvedchildren5andyounger,approximately39percentoftheincidents.
Ex.
CC-10Aat29-30;Tr.
263:3-19.
Moreover,theNASPGHANSurveydatashowedthatchildren13monthsto6yearsoldaccountedformorethan50percentoftheincidentsinthatSurvey.
SectionIII.
A.
2.
e,suprap.
30.
Wenotethatchildrenthisyounglikelycannotyetreadorcomprehendawarning,evenifpresent.
Ex.
CC-10Aat29.
Regardingcaregivers,Dr.
Steinbergexplainedthatitisreasonableforcaregiversofyoungchildren,whoseewarningsregardingSREMingestion,todiscountthosewarnings.
CaregiversmaybelievethatayoungchildwillnotbeabletoaccessSREMsthatarelocatedinadrawerorinanotherroom.
Ex.
CC-19Aat11.
Caregiversofyoungchildrenalsomayconcludethatanywarningpertainstoachokinghazard,whichtheymaydiscountduetothesmallsizeoftheSREMs.
Id.
Dr.
Steinbergstatedthatcaregiversofolderchildrendonotheedwarnings,believingthattheirtweenorteenisoldenoughtoknownottointentionallyswallowSREMs.
Id.
at17.
Thus,theevidencedemonstratesthatevenifRespondenthadthebestpossiblewarninglabel,manyconsumersdonotsee,heed,orareunabletoreadthewarninglabels.
30ThisexperienceisconsistentwiththeCommission'sexperiencewithwarninglabels.
Forexample,inInreDye,theCommissionconcludedthateveniftherespondentsimprovedtheirinstructionstoaddressallofthedeficiencies,thesubstantialproducthazardwouldnotbeeliminatedintheelectrifiedwormprobes.
1989WL435534at*19-20.
Therefore,theCommissionconcludedthatnowarningcouldcurethesubstantialproducthazardpresentedbythewormprobes.
Id.
at30TheNCPSlikewiseacknowledgedtheselimitationswithwarningswhenitstated:Amanufacturer'sdutydoesnotendwithawelldraftedwarning,especiallywhenheknowsitmaynotpreventinjuries.
Printedwarningsandinstructionsofferslightprotectiontoyoungchildrenorthoseunabletoread.
Ifamanufacturerispermittedtoavoidliabilitybyprovidingawarningwhenhemightinsteadusealessriskydesignorsystemofdistribution,thewarningmaybecomealicenseforillpractice.
NCPSReportat75(internalfootnotesomitted).
33*20.
Similarly,inMylarStarKites,theALJ,inrenderingtheInitialDecisionandOrder,foundthatevenwithadequateinstructions,theriskofinjuryassociatedwiththealuminizedkiteswouldnotbemitigated,andthattheonlysurewaytocurethedefectwastoordertheremovaloftheconductivematerial.
MylarStarKitesInitialDec.
at11("Thereisnoguaranteethatadequateinstructionsagainstflyingkitesnearpowerlineswillinvariablybeobeyed,evenbyadults.
").
Furthermore,thewarningsRespondentincludedwiththeSubjectProductswereunlikelytoconveytheseriousnessoftheassociatedinjuries,asRespondentusedunconventional,tongue-in-cheek,warnings.
Ex.
CC-10Aat46.
Mr.
Qutestifiedthathedraftedthewarningstobe"unique,""interesting,"and"memorable,"toexplainhisrationaleforusingunconventionalwarningsfortheSubjectProducts.
Tr.
1979:15-17.
Insteadofaddressingtheactualhazardassociatedwithmagnets—unintentionalswallowing—Respondentpokesfunatthesystemofage-gradingbysuggestingthatmagnetsaresafewhenachildstopseatingnon-foods,whichresultsinaconfusingandcontradictorywarningsapproach.
Ex.
CC-10Aat35,46.
InInreDye,respondent'swarningsalsousedtongue-in-cheekwarningsthatpresented"inconsistentandconfusingmessages,"werefoundto"trivialize"and"detract"fromtheseriousnessoftherisk,and,mostimportantly,"impl[ied]thatthe[respondent]doesnotbelievethewarningsarenecessary.
"1989WL435534at*8.
RespondentarguesthateventhoughingestionofSREMsisahazard,magnetscanbekeptawayfromchildren.
AnswerBr.
at10-12;OralArg.
Tr.
82:17-20.
However,theevidencedemonstratesthatawarningto"keepawayfromchildren"isineffectivefortheSubjectProducts,becausesuchawarningcannotbefollowedbyconsumersexercisingordinarycare.
Ex.
CC-10Aat9,44-45.
Magnetshaveuniquecharacteristics—magnetsare"soeasilyseparatedfromtheirsets"—thatmakeitimpossibleforownerstofollowthebasicwarningmessagethatwouldbenecessaryfortheproducttobeconsideredsafe,i.
e.
,toactuallykeepmagnetsawayfromchildren,consumersmustneverloseorsharemagnets.
Id.
at9-10;Ex.
CC-11at49-50.
AsdemonstratedinDr.
Frantz'stestimony,includingduringquestioningbytheALJ,31consumersexercisingordinarycarecouldnotkeepmagnetsawayfromchildrenoravoidlosingorsharingmagnets,eveniftheywerewarnednotto.
Ex.
CC-10Aat10,20.
31PRESIDINGJUDGE:[I]fthosecaregiversresponsibleforinfantsweremadeawareofthedangersofmagnetsandalsoawarethatsmallrareearthmagnetscancausethetypeofdamagethatyouhaveindicated,wouldyouexpectthosecaregiverstobeabletopreventthechildrenfromingestingmagnetsTHEWITNESS:No.
Ithinkthattheycanpreventsomeofthethings.
.
.
[t]hedifferenceisthatyoucanprovideawarningaboutknowingwheremagnetsare,keepingtrackofthemandgivingthemtosomeone.
That'snotwhatI'mtalkingabout.
WhatI'mtalkingaboutishavingaproductwhereyouaccept,expect,andaccommodatethefactthatyouwillnotknowwheretheyare.
Theyhaveseparatedfromthesetinacompletelyunremarkableway,andnowtheyhavecontaminatedaplacewheresmallchildrenareorwillbe,andthatbecomesanunmanageablerisk,evenforcarefulparents.
Tr.
398:12-399:17(excerpted).
AccordingtoDr.
Frantz,thiswouldbetrueeveniftheproductwassoldtoadultsandnotlabeledasatoy.
Tr.
369:9-22("Becauseofthecontainmentproblemassociatedwiththeloosemagnetsandthefactthatthere'snoexpectationthatpeoplewillbeabletokeeptrackofeachandeverymagnetintheirsetaslongastheyownit.
").
34Dr.
Frantzprovidedampletestimonyindicatingthatnowarningcouldcurethehazardpresentedbythedefectivedesignofthemagnets.
See,e.
g.
,Tr.
251:18-252:5;368:7-369:14;383:9-384:5;seealsoEx.
CC-10Aat46(doesnotknowofawarningthataddresses"reasonablykeepingseparated[magnets]awayfromchildren");seealsoInreDye,1989WL435534at*8(holdingthatimprovedwarningsandinstructionscouldnotcurethedangerousdesignofthewormprobes).
Respondentdidnotofferrebuttalorotherexperttestimonytodemonstratetheefficacyofitswarningstatementstochangeconsumerbehavior.
Respondent,instead,reliedonthecross-examinationofDr.
Frantzoverthecourseofapproximately2daysofthehearing,primarilycriticizingDr.
Frantz'stestimonyregardingthefrequencyoflostmagnetsandtheavailabilityofsparemagnets.
Tr.
152:10-205:3;260:1-331:16.
Forthesereasons,wefindthatwarningsareinadequatetomitigatetheriskofinjuryassociatedwiththeSubjectProducts.
ii.
InjuryDataInfindingthatRespondent'swarningsarenotdefective,theALJstartedwithhisflawedanalysisoftheinjurydatadiscussedinSectionIII.
A.
2.
d,suprapp.
23-27,statingthathebelievedthatfewornoinjuriescouldbedirectlyattributedtotheSubjectProducts,andconcludingthattheonlyexplanationcouldbethatRespondent'swarningsareeffectiveatadequatelywarningconsumersabouttheingestionhazard.
InitialDec.
at16.
("ItisamorethanreasonableinferencethatlittleevidenceexistsofinjuryresultingfromtheuseofRespondent'sproductbecauseRespondent'swarningssufficientlydeteringestion.
").
32TheALJtriedtodrawcomparisonsbetweenBuckyballs'lackofwarningsandattributableincidents,andRespondent'saffirmativewarningsconcerningtheingestionhazardandrelativeabsenceofincidents.
Id.
at25.
TheALJinferredacorrelationbetweentheuseofwarningsandtheirefficacyonpreventingingestionincidents;conversely,theabsenceofwarningsresultedinincreasedincidents.
Id.
Yet,neitherpartypresentedactualevidenceconcerningwhatconclusions,ifany,couldbedrawnfromthesedata.
Asdiscussedabove,noincidentsarenecessaryinadefectanalysis,andhere,hundredsofincidentswereintroducedintoevidence,mostofwhichinvolvedSREMswithnoknownbrandname.
Furthermore,RespondentdidnotsubmitanyevidencetosupporttheALJ'sconclusionthatRespondent'swarningswereeffective.
32WedonotbelievethiswasareasonableinferencebecausetheevidencedemonstratesthatSREMscannotbeidentifiedbymanufactureraftertheyareremovedfrompackaging.
Ex.
CC-1Aat8.
Thus,wedonotknowexactlyhowmanyincidentsareattributabletotheSubjectProducts;however,theevidencedemonstratesthatatleasttwoofthe95incidentsadmittedintoevidenceareattributabletotheSubjectProducts.
SeeSectionIII.
A.
2.
d,suprapp.
23-24.
353.
Step2:TheRiskofInjuryOutweighstheUtilityoftheSubjectProductsNext,webalancetheriskofinjuryassociatedwiththeSubjectProductswiththeutilityoftheSubjectProducts.
33TheALJdetermined,andtheCommissionagrees,thatthefeatureoftheSubjectProductsthatcreatestherisk,thatis,theattractivenessofSREMstoeachother,isthe"sinequanonoftheiressence.
"InitialDec.
at11.
TheALJfurtherstated:"[w]ithouttheabilitytoattracttoeachother,theproductisworthless.
"Id.
Inthesecircumstances,theCommissionmust"examinetheevidenceintherecordtoseeifitestablishesthattheutilitytothepublicof…[theproduct]outweighstherisktothepublicthattheproductproduces.
"34InreDye,1989WL435534at*9,11.
35a.
TheSubjectProductsareNotaNecessityforConsumersTheALJfailedtoconsidertheissueofthenecessity,orlackthereof,fortheSubjectProducts.
16C.
F.
R.
§1115.
4.
Theregulationandprecedentprovidelittleguidanceonwhatconstitutesa"necessity.
"Meriam-Webster'sonlinedictionarydefinesa"necessity"as"thequalityorstateofbeingnecessary.
"36"Necessary"isdefined,inrelevantpart,as"absolutelyneeded,""required.
"37RespondentdemonstratedthattheSubjectProductsareusefultocertainacademicuserswhoareacquaintedwithSREMs.
RespondentpresentedwitnesseswhotestifiedthattheSubjectProductscanbemanipulatedintoavarietyofstructuresthatcannotbebuiltwithfixed-angleobjects,andthatsuchhands-onmanipulationallowsstudentstoconceptualizeideasthataredifficulttounderstandthroughtraditionalteachingmethods,suchasinabookoradiagram.
Tr.
1333:4-19;1427:1-1428:1;1429:9-12;DirectTestimonyRespondent'sExpertWitnessBoydF.
Edwards,Ph.
D.
("Ex.
R-154A")at8-9;Ex.
R-155at16-18;JointNotice,Resp't'sExs.
P(Love);S(Niezgoda);U(Walsh).
33Withtheexceptionsofnecessityandutility,weconsideredotherapplicablefactorsfrom§1115.
4inStep1ofourdefectanalysis;thus,wewillnotre-analyzethosefactorsatthisstage.
34Wenotethatevenbefore§1115.
4waspromulgated,theCommissionaddressedtherisk-versus-utilitybalancing.
In1977,inMylarStarKites,theCommissionbalancedthenatureandseverityoftheriskofinjurywithanyoffsettingbenefittothepublic.
MylarStarKitesFinalDec.
at3.
Becausethekite'saluminumsurfaceonlyaddedtothebeautyofthekite,anddidnotcontributetothekite'sfunction,theCommissionconcluded"thatbecauseofthenatureandseverityoftheriskwithoutanoffsettingbenefitsufficienttojustifytherisk,"thekitewouldpresentasubstantialproducthazardiftheproceedingoccurredundertheCPSA.
Id.
35InInreDye,theCommissionclarifiedthatwhentheriskofinjurydoesnotarisefromaproductcharacteristicthatisnecessaryfortheproducttofunction,balancingtheriskofinjurywiththeproduct'sutilityisnotnecessary.
1989WL435534at*9.
Inthatinstance,theproductcharacteristiccanbemodifiedtoremovethedefectwithoutchangingtheutilityoftheproduct.
Id.
36DictionarybyMerriam-Webster,https://wwwmerriam-webster.
com/dictionary/necessity(lastvisitedOct.
24,2017).
37DictionarybyMerriam-Webster,https://www.
merriam-webster.
com/dictionary/necessary(lastvisitedOct.
24,2017).
36However,Dr.
Edwardstestifiedthathetaughtphysicsfor24yearsbeforelearningabouttheexistenceofSREMsandadmittedthatSREMsarenotcriticalforteachingphysicsoranyothersubject.
Tr.
1258:6-9;1260:10-15;1401:14-1402:2.
Indeed,formorethan20years,Dr.
Edwardsmanagedtoteachphysics,andhisstudentsmanagedtolearnvariousconcepts,withouttheuseofSREMs.
Tr.
1401:14-1402:14.
Dr.
Edwardsalsoadmittedthatconceptsthathavebeenaroundformorethan3,000years,suchasplatonicsolids,wereunderstoodandtaughtbeforeSREMswereavailable.
Tr.
1403:14-18.
WealsonotethatRespondentdidnotpresentevidenceonthenumberofprofessorsandteacherscurrentlyusingSREMsintheirclassrooms.
Dr.
Edwardsstatedthathewasawareof"twoinstances"inwhichSREMswerepartofacourseplan.
Tr.
1422:1-15.
Healsoacknowledgedthat"inthemajorityofclasses[SREMs]arenotused.
"Tr.
1423:1-5.
Afterconsideringalloftheevidence,wefindthattheSubjectProductsdonotconstituteanecessity.
AlthoughthisevidencedemonstratesthattheSubjectProductsmayhaveeducationalvalue,theevidencedoesnotprovethattheSubjectProductsarea"necessity"underthecommonusageoftheterm.
Cf.
Tr.
2210:18-21(Mr.
QuacknowledgingthattheSubjectProducts"arenotanecessityinthesamesensethatwaterorfoodorshelterisanecessity").
b.
UtilityoftheSubjectProductsSection1115.
4doesnotprovideadefinitionof"utility"inthecontextofaSection15case.
However,InreDyestatesthattherisk-versus-utilitybalancingexamines"theneedofthepublicfortheproduct,"against"therisktheproductpresents.
"1989WL435534at*9;seealsoid.
at*12(staffdefiningutilityas"theabilitytosupplyaconsumerwant").
TherecordshowsthattheSubjectProductsaremodestlypricedmanipulativetoysthataregenerallyavailabletoconsumersonline,inspecialtyretailshops,andinheadshopsandmarijuanadispensaries.
CCPostHr'gArg.
,Ex.
A,36,38,40;Tr.
1543:12-14;1717:14-1718:6;1734:15-1735:5.
Neitherpartysubmittedevidenceofmarketshareforrecreational,educational,orscientificusesoftheSubjectProducts.
Accordingly,beyondprice,theCommissionmustconsiderthepublic'sneedfortheproduct,basedsolelyonthefactspresented.
TherecorddemonstratestwogroupswhouseSREMsfordifferentpurposes:recreationalusersinvolvedinplay,andacademicusersinvolvedinteachingandresearch.
Regardingrecreationalusersinvolvedinplay,ComplaintCounseldemonstratedhowtheSubjectProductsweremarketedandusedbyconsumersasamanipulativetoyforrecreationandamusement.
SeeExs.
CC-10Aat10-16andCC-11at12-16(discussingDr.
Frantz'sreviewofRespondent'smarketingoftheSubjectProductsasamanipulativetoy,jewelry,andrefrigeratorart).
BasedonthepriceanduseoftheSubjectProductsforrecreationandamusement,thevaluetoconsumersislow.
RespondentdidnotprovethattheaverageconsumerhasagreatneedfortheSubjectProductsasarecreational"desktoy.
"Respondent'switnessesdidnottestifyabouttheplayvalueoftheSubjectProductstotheaverageconsumer;rather,somewitnessestestifiedthatthe37generaluseofSREMsencouragedinterestinmathandscience.
JointNotice,Resp't'sExs.
L.
(Bayless);Ex.
N.
(Ibrahim).
Forexample,Ms.
BaylesstestifiedthattheuseofZenMagnets"fueled[her]foursons'interestincareersinmathandscience.
"Id.
,Ex.
L.
ThisanecdotalevidencesuggeststhatthegeneralavailabilityofSREMstothepublichasthepotentialtoenhanceinterestinmathandscienceinthosewhousethem.
However,evidenceregardingthemarketingoftheSubjectProductstothegeneralpublicforuseasamanipulativetoy,jewelry,andrefrigeratorart,andtheavailabilityoftheSubjectProductsin"headshops"andmarijuanadispensaries,doesnotsuggestthattheaverageconsumerispurchasingtheSubjectProductsforuseinmathandscience.
RespondentpresentedevidencethatSREMsmayhaveagreaterutilityforacademicuserswhoteach,study,andconductresearchinthefieldsofphysics,chemistry,metallurgy,engineering,geometry,biology,andmathematics.
Ex.
R-154Aat5.
ThetestimonypresentedbyDr.
Edwards,andthewrittenstipulatedtestimonyoflaywitnesses,demonstratethatthoseteachersandacademicswhoareacquaintedwithSREMsfindthemasuperiorteachingaidthanotherproductsonthemarketandusefulforunderstandingandresearchingscientificconcepts.
Severalwitnesses,includingDr.
Edwards,Dr.
AnthonyPelletier,MicheleLaForge,AdamLove,andStephenNiezgoda,concludedthatSREMsaresuperiortoothermethodsofteachingcertainconceptsbecausetheyprovidehands-onlearningopportunitiesandarecapableofformingstructuresthatothermodelscannot.
Tr.
1333:4-19;1427:1-1428:1;1429:9-12;1431:16-1432:5;Exs.
R-154Aat8-9;R-155at16-18;JointNotice,Respt'sExs.
O(LaForge);P(Love);S(Niezgoda);T(Pelletier).
Respondentdidnot,however,presentevidenceshowingthatSREMsareroutinelyusedforanyoftheseeducationalpurposes.
Forexample,Dr.
PelletierwasnotawareofotherteacherswhousedSREMs.
JointNotice,Resp't'sEx.
Tat68:16-19.
Dr.
EdwardstestifiedthathecouldreasonablyforeseeatrendtouseSREMsincollegeclasses,basedontheenthusiasmofhisfriends;butheadmittedthatSREMsarenotwidelyusedincollegeclassesnow.
Tr.
1422:1-15(awareofonly"twoinstances"inwhichSREMswerepartofacourseplan);1426:14-1428:1.
Dr.
EdwardstestifiedthatSREMswouldbeusefulinupper-levelundergraduatecoursestoteachelectromagnetism,buthesaidtheywouldnotbeusefulinadvancedgraduate-levelcourses,whichare"purelytheoretical.
"Tr.
1423:1-1424:10.
Moreover,Dr.
EdwardsneverusedSREMstoteachphysicsinhismorethan20yearsofteaching.
Tr.
1401:14-1402:14.
Dr.
Edwardsalsotestifiedthatotherteachingmethodsexist,andthatstudentshavelearnedthescientificconceptswithoutusingSREMs.
Tr.
1402:3-14.
Forexample,platonicsolidshavebeentaughtandunderstoodformorethan3,000yearswithouttheuseofSREMs.
Tr.
1403:14-18.
TheALJagreedwithRespondentthat"'noothermediumcanreplicatetheuniquesphericalandmagneticpropertiesof[SREMs],andthereforenootheralternativecanbeusedtodemonstratethesameconceptswiththesameeffectiveness.
'"InitialDec.
at22.
Additionally,theALJfoundthat"simplybecauseSREMsarenotyetinwidespreaduseinacademiadoesnotdecreaseutility,ortheirviabilityforuseinteaching"becauseitcantakeseveralyearstochangeacoursesyllabus.
Id.
at21n.
8(citingTr.
1435:5-14).
38TheALJconcludedthattheSubjectProductshave"high"utilitybecausetheSubjectProductsare"uniquebecausetheycanbeconnectedatalmostanyangle"andare"excellent"toolsforteachingvarioussubjects,includingphysics,geometry,andchemistry.
Id.
at20-21.
However,therecordisdevoidofinformationregardingthespecific,marketbreakdownofeachusertype.
AlthoughtheevidenceshowsthatacademicuserswhohaveexperiencewithSREMsfindthemuseful,therecorddoesnotdemonstratewidespreaduseoftheSubjectProductsbyacademicusersoratrendofincreaseduseinacademicsettings.
Regardless,theCommissiongenerallyregulatesconsumerproductstoconsumersasawhole,andnottospecificgroupsofusers.
38c.
BalancingtheUtilityoftheSubjectProductswiththeRiskofInjuryBalancingthelimitedvalueoftheproducttoconsumersagainsttheriskofinjury,andconsideringthefactorsdiscussedatSectionsIII.
A.
2and3,weconcludethattheriskofinjuryfaroutweighstheutilityoftheSubjectProductstorecreationalusers.
39Furthermore,balancingthevalueoftheSubjectProductsforuseineducationalpursuitsbyaselectgroupofusersagainsttheriskofinjury,andconsideringthefactorsdiscussed,weconcludethattheriskofinjuryalsooutweighstheutilityoftheSubjectProductstoacademicusers.
Allofthefactorsreviewedaboveweighinfavoroffindingadefectinthiscase.
Accordingly,basedontheevidencepresented,theCommissionfindsthattheSubjectProductscontainadesigndefect,andalsofindsthattheutilityoftheSubjectProductsdoesnotoutweightheriskofinjurytochildren.
B.
TheSubjectProductsContainaDefectWhichCreatesaSubstantialRiskofInjurytothePublicHavingfoundthattheSubjectProductscontainadefect,theCommissionnextconsidersthesecondprongofSection15(a)(2)oftheCPSA:whethertheproductdefectisone"which38RespondentarguesthatbecauseComplaintCounselfailedtorebutRespondent'sevidenceontheutilityoftheSubjectProducts,highutilityhasbeenestablishedasafact.
AnswerBr.
at22(citingHalev.
Dep'tofTransp.
,772F.
2d882,886(Fed.
Cir.
1985)).
Wedisagree.
InHale,theU.
S.
CourtofAppealsfortheFederalCircuitaffirmedtheMeritSystemsProtectionBoard'sreversalofaninitialdecisionfindingthattheFederalAviationAdministrationhadnotmetitsburdenofproofwhenitreliedontimeandattendancerecordstoshowthatemployeesparticipatedinastrike.
772F.
2dat885-86.
ThecourtaffirmedtheBoard'sreasoningthatwherethesignedtimeandattendancerecordsdemonstratedthattheemployeeswereabsentandnorebuttalevidencewasoffered,suchself-explanatorydocumentaryevidencewassufficienttoprovethefact:"theonlyconclusionthatareasonablemindcanmakeisthatthefactofpetitioners'absenceonthedaysinquestionismorelikelytruethannottrue.
"Id.
at886.
Here,Respondent'switnesstestimonyisnotakintounrebutteddocumentaryevidenceofafact.
TheCommissionisentitled,indeed,requiredtoreviewtheevidenceofutilitythatwaspresented,weighthecredibilityofthewitnesses,andthenbalancethatutilityagainsttheriskofinjurytothepublic.
39Acost-benefitanalysiswasnotadmittedinthiscase,and,asexplainedinInreDye,suchanalysisisnotrequiredinaSection15adjudication.
InreDyecautions,andwereaffirm,thattherulemakingrequirement,toconsidertheeffectofaruleon"utility,cost,oravailabilityofsuchproductstomeet[theneedofthepublic]"isnotarequirementinaSection15action,andthatstaffisnotrequiredtomakesuchashowingtodemonstratethattheriskofinjuryoutweighstheproduct'sutility.
1989WL435534at*10.
Rather,§1115.
4statesthatwhenrisk/utilitybalancingisnecessaryinaSection15case,theCommissionconsiders,asappropriate,thefactorsprovidedin§1115.
4toweightheriskofinjurypresentedbytheproductwiththeutilityoftheproducttoconsumers,beforedeterminingwhetheraproductisdefective.
39(becauseofthepatternofdefect,thenumberofdefectiveproductsdistributedincommerce,theseverityoftherisk,orotherwise)createsasubstantialriskofinjurytothepublic.
"15U.
S.
C.
§2064(a)(2);seealsoInreDye,1989WL435534at*13(reviewingtheevidenceforeachfactor).
TheCommission'sregulationexplains:"[t]hesefactorsaresetforthinthedisjunctive.
Therefore,theexistenceofanyoneofthefactorscouldcreateasubstantialproducthazard.
"16C.
F.
R.
§1115.
12(g)(1).
1.
ThePatternofDefectCreatesaSubstantialRiskofInjurytothePublicA"pattern"ofdefectmayarisefromthe"design,composition,contents,construction,finish,packaging,warnings,orinstructionsoftheproductorfromsomeothercauseand[theCommission]willconsidertheconditionsunderwhichthedefectmanifestsitself.
"16C.
F.
R.
§1115.
12(g)(1)(i).
ComplaintCounselarguethatthedesignoftheproductisdefective,basedonoperationanduseoftheSubjectProducts,becauselooseSREMsaremeanttobeseparatedfromtheirset.
Appealat57.
Separationofmagnetsfromtheirsetresultsinariskofingestionandinjury.
Id.
(citingExs.
CC-10Aat7,9-10,13,16,43;CC-27Aat7-10;Tr.
304:21-305:3,343:5-344:3,385:19-386:2).
RespondentattemptstorefutethisargumentbycriticizingthetestimonyofDr.
Frantzthatseparablemagnetsare"persedefective,asiftheproductis'broken'"andthefactthatDr.
Frantzdidnotconsidermisuseofmagnetsandhowsuchmisusecouldresultinmagnetsbecomingunaccountedfor.
AnswerBr.
at37(citingTr.
252:3-5;269:18-270:12).
RespondentalsocriticizesDr.
Frantz,stating:"hedidnotdeterminethatthemagnetspresentedacontainmentproblembasedonhisanalysisoftheproducts;rather,thatconclusionwasone'providedto[him]byZenMagnets.
'"Id.
(citingTr.
272:22-273:5).
RespondentalsocitesMr.
Qu'stestimonythata"lost"magnetisnotnecessarilyunaccountedfor,itmayhavebeengiventoanotherperson.
Id.
at37-38(citingTr.
2006:19-2007:7).
Wefind,however,thatitdoesnotmatterwhetherSREMscanbelosttotheenvironmentorsimplysharedwithotherusers.
Ineithercase,themagnetsarenow"lost"fromthelargerset,withoutwarnings,andchildrencanbecomeexposedtosuch"lost"magnets.
EitherscenariopresentsahazardpatternthatiscorroboratedbytheincidentdatademonstratingthatchildrenwhoaccessSREMshaveingestedthemagnetsandsufferedseriousinjury.
SeeSectionsI.
BandIII.
A.
2.
b-d,suprapp.
2-3,16-28.
Therefore,wedonotfindRespondent'sargumentsregardingthelackofa"patternofdefect"persuasive.
ComplaintCounseldemonstratedthatalloftheSubjectProductsaredesignedtobesmall,spherical,shiny,loose,separable,andstronglymagnetic.
Basedontheevidencepresented,theCommissionhasalreadydeterminedthattheSubjectProductsaredefectivebecausesuchseparablemagnetspresentaningestionhazardtochildren.
Accordingly,theCommissionalsofindsthattheSubjectProductspresentasubstantialproducthazardbecausealloftheSubjectProductsaredesignedthesame,whichcreatesthesamesubstantialriskofinjury.
See,e.
g.
,InreDye,1989WL435534at*13("Withregardtothepatternofdefect,allWormGett'rscontainthedesigndefectandtheinadequateinstructionsdescribedindetailabove.
Therefore,the'patternofdefect'isconsistentforallwormprobesdistributedbyrespondents.
").
402.
TheNumberofDefectiveProductsDistributedinCommerceCreatesaSubstantialRiskofInjurytothePublicTheCommission'sregulationstatesthat"[e]venonedefectiveproductcanpresentasubstantialriskofinjuryandprovideabasisforasubstantialproducthazarddetermination…iftheinjurywhichmightoccurisseriousand/oriftheinjuryislikelytooccur.
"16C.
F.
R.
§1115.
12(g)(1)(ii).
Theregulationfurtherstates:"[m]ostdefectscouldpresentasubstantialproducthazardifthepublicisexposedtosignificantnumbersofdefectiveproductsorifthepossibleinjuryisseriousorislikelytooccur.
"16C.
F.
R.
§1115.
4.
Thus,tofindasubstantialproducthazardunderthisprong,theCommissionmustdeterminethattheevidencesupportsoneofthese:(1)thepublicisexposedtoasignificantnumberofdefectiveproducts;(2)thepossibleinjuryisserious;or(3)thepossibleinjuryislikelytooccur.
TheevidenceestablishesthatRespondentsoldbetween70,000and75,000setsofZenMagnetsandNeoballstotalingmorethan10millionindividualmagnetssincetheendof2009.
Tr.
1466:11-19;AnswerBr.
at39(acknowledgingthatRespondentsold"millions"oftheSubjectProducts).
Additionally,Respondentdistributedapproximately220,000sparemagnets.
Tr.
349:16-350:13;Ex.
CC-10Aat23-25.
Theevidenceindicatesthatittakesonlyoneingestedmagnetandametallicobject,ortwoingestedmagnetstocausecatastrophicinjuriestoachild.
Exs.
CC-24at2;CC-27Aat7-11.
ComplaintCounseldemonstratedthattheSubjectProductsareassociatedwithatleasttwoinjuries,andarefunctionallyidenticaltoSREMsthathavecausedmanyseriousinjuriesandonedeath.
SeeSectionIII.
A.
2.
d,suprapp.
23-24.
BasedonthesalesdataandthefactthatasfewasoneSREMandanothermetallicobject,ortwoSREMs,aresufficienttocauseinjury,theCommissionfindsthatthepublicisexposedtoasignificantnumberofdefectiveproducts.
TheincidentdatadescribingtheinjuriesanddeathsthatcanresultfromingestionoftheSubjectProducts,asdiscussedabove,showthatthepossibleinjuryisserious.
SeeSectionsI.
B.
andIII.
A.
2.
d,suprapp.
2-3,22-28.
Respondentcontendsthat"[w]hileitwasshownthatRespondenthassoldmillionsofnon-defectivemagnets,ComplaintCounseldidnotsubmitanyevidenceabouttheexpectedinjuriesfromthosemagnets.
"AnswerBr.
at39.
Respondentcontraststhiscase,where"theevidenceshowedthatinjurieswerequiteunlikelytooccur,especiallyconsideringthenumberofproductsonthemarket,"withInreDye,"wheretheevidenceestablishedthatinjurieswerelikelytooccur.
"Id.
(emphasisinoriginal).
InInreDye,complaintcounselcalledaCommissioneconomisttotestifyasanexpertregardingthedeterminationofcostsandbenefits.
1989WL435534at*7.
Althoughusefulandinstructiveinthatcase,suchquantitativecost-benefitevidenceisnotrequiredtoestablishasubstantialproducthazard,meaningaproductdefectwhichcreatesasubstantialriskofinjurytothepublic.
Seenote39,suprap.
38;seealso,e.
g.
,InreDye,1989WL435534at*10(cost-benefitanalysisnotrequiredinSection15adjudication);1978FinalRule,43Fed.
Reg.
at34991("TheCommissiondoesnotwanttogivetheimpressionthattheextensivecost/benefitanalysisinwhichitengagesbeforepromulgatingastandardorbanshouldbeundertakenbysubjectfirmsbeforereportingunderSection15(b)").
Indeed,neithertheCPSA,northeCommission's41regulations,requireComplaintCounseltopresentaquantitativecost-benefitanalysisinaSection15adjudication.
Inthiscase,ComplaintCounselprovedthattheSubjectProductsarefunctionallyidenticalandlookthesametoconsumersasotherSREMsonthemarketthathavecausedseriousinjuriesinchildren.
SeeSectionIII.
A.
2.
d,suprapp.
23-24.
BecauseSREMsareindistinguishableonceoutofthepackaging,itisimpossibletoidentifytheproductbrandineveryincident.
Id.
Moreover,likelihoodofinjuryisonlyoneelementofthisanalysis.
Ifthepublicisexposedtoa"significantnumberofdefectiveproducts,"or"ifthepossibleinjuryisserious,"thesefactorsweighinfavoroffindingasubstantialproducthazard.
ComplaintCounselestablishedthatRespondentdistributedmorethan10millionindividualSREMs.
BasedonthesheernumberofindividualSREMsdistributedincommerceandtheseverityoftheinjury,theCommissionfindsthatthisfactorweighsinfavoroffindingasubstantialproducthazard.
3.
TheSeverityoftheRiskCreatesaSubstantialRiskofInjurytothePublicUnder16C.
F.
R.
§1115.
12(g)(1)(iii),"[a]riskissevereiftheinjurywhichmightoccurisseriousand/oriftheinjuryislikelytooccur.
"TheCommission'sregulationdefines"seriousinjury"toinclude"grievousbodilyinjury,"suchaslossofimportantbodilyfunctions,debilitatinginternaldisorders,andinjurieslikelytorequireextendedhospitalization,and"[i]njuriesnecessitatinghospitalizationwhichrequireactualmedicalorsurgicaltreatment,…injuriesto…internalorgansrequiringmedicaltreatment,andinjuriesnecessitatingabsencefromschoolorworkofmorethanoneday…"16C.
F.
R.
§§1115.
6(c),1115.
12(d).
Therecordisrepletewithevidencedemonstratingtheseverityoftheriskofinjury,includingserious,life-threateninginjuriesthatchildrensufferedafteringestingSREMsandthemedicalinterventionneededtopreventdeath.
SeeSectionsI.
BandIII.
A.
2.
d,suprapp.
2-3,22-28.
RespondentdoesnotcontestthatingestingSREMscouldresultinseriousinjuries.
AnswerBr.
at39.
Inanalyzingthelikelihoodofanyinjury,theCommission'sregulationinstructstheCommissiontoconsiderthenumberofinjuriesreportedtohaveoccurred,theintendedorreasonablyforeseeableuseormisuseoftheproduct,andthepopulationgroupexposedtotheproduct(e.
g.
,children,elderly,handicapped).
16C.
F.
R.
§1115.
12(g)(1)(iii).
Regardingthereportednumberofinjuries,ComplaintCounselpresentedevidenceof95magnetingestionincidents,twoofwhichareattributabletoRespondent,aswellasdatafromtheNASPGHANSurveyconductedbyDr.
Noel,whichreviewed481reportsofmagnetingestionsbychildrenovera10-yearperiod,andinvolveddetailedclinicaldataon123SREMingestions.
SeeSectionIII.
A.
2.
d,suprapp.
24-26.
ComplaintCounselalsosubmittedevidencethatingestionofSREMsbychildrenisreasonablyforeseeableuseormisuseoftheSubjectProducts,42andthatthepopulationexposedtotheriskofinjuryischildren.
SeeSectionsIII.
A.
2.
cande,suprapp.
20-22,28-30.
Basedontheforegoing,theCommissionfindsthatbecauseoftheseverityoftheriskofinjury,andthereasonablyforeseeableuseormisuseoftheSubjectProductsbychildren,thisfactorweighsinfavoroffindingthattheSubjectProductspresentasubstantialproducthazard.
Forthesereasons,theCommissionfindsthattheSubjectProductspresentasubstantialproducthazardunderSection15(a)(2)oftheCPSAbecausetheycontainadefectwhichcreatesasubstantialriskofinjurytothepublic.
IV.
TheCommissionNeedNotDecideWhethertheSubjectProductsPresentaSubstantialProductHazardUnderSection15(a)(1)oftheCPSAAsamatterofjudicialeconomy,becausewefoundthatalloftheSubjectProductspresentasubstantialproducthazardunderSection15(a)(2)oftheCPSA,wedonotreachtheissueofwhethertheSubjectProductspresentasubstantialproducthazardunderSection15(a)(1).
ThequestionpresentedinCountIIwaswhethertheSubjectProductsfailtocomplywiththeToyStandard(ASTMF-963),40andwhethersuchfailuretocomplycreatesasubstantialriskofinjurytothepublic.
TheCommissionhasalreadydeterminedthattheSubjectProductspresentasubstantialproducthazardunderSection15(a)(2)oftheCPSA.
TheremedyorderedbytheCommissioninSectionsVII.
B-D,infrapp.
49-53,coversalloftheSREMssoldbyRespondent.
Therefore,findingasubstantialproducthazardunderCountIIwouldhavenoeffectonthescopeornatureoftheremedyorderedbytheCommission.
See,e.
g.
,Groseclosev.
Bell,130F.
3d1161,1171(6thCir.
1997)(decliningtodetermineclaimonappealbasedontenetsofjudicialeconomywheresuchclaimwasunnecessarytoreachthemeritsandstatingthatthecourtshouldnotresolveissuesthatcannotalterafinaldecision);IntheMatterof:***ApplicantforSecurityClearance,ISCRCaseNo.
08-07803,2009WL1800462,*4(DOHAJune15,2009)(extendingjudicialeconomytoU.
S.
DepartmentofDefensehearing,statingthat"theprincipleofjudicialeconomyreferstothepracticeofacourtdecliningtodecideoneormoreclaimsinacaseonthegroundsthatithasdecidedotherclaimsthataresufficienttodecidethecaseandsatisfytheparties").
Forthesereasons,wesetasidetheALJ'sopinionandorderwithrespecttoCountIIoftheSecondAmendedComplaint.
40Section106(a)oftheCPSIAmadetheprovisionsofASTMF-963amandatoryconsumerproductsafetystandardunderSection9oftheCPSA.
Pub.
L.
No.
110-314.
43V.
AdditionalHoldingsA.
HoldingsonEvidentiaryIssues1.
ExpertQualificationofDr.
BoydEdwardsComplaintCounselmaintainthattheALJerredinqualifyingDr.
EdwardsasanexperttoopineontheeducationalutilityofSREMsandinadmittinghisexpertreport.
Appealat64-69.
Asaresult,accordingtoComplaintCounsel,theCommissionshouldstriketheexperttestimonyandreport.
Id.
at65.
TheCommission'sregulationgoverningadjudicativeproceedingsdefinesan"expertwitness"as:…onewho,byreasonofeducation,training,experience,orprofession,haspeculiarknowledgeconcerningthesubjectmattertowhichhis/hertestimonyrelatesandfromwhichhe/shemaydrawinferencesbaseduponhypotheticallystatedfactsorofferopinionsfromfactsinvolvingscientificortechnicalknowledge.
16C.
F.
R.
§1025.
44(a);41seealsoKumhoTireCo.
,Ltd.
v.
Carmichael,526U.
S.
137,147-49(1999)(extendingthestandardannouncedinDaubertv.
MerrellDowPharmaceuticals,Inc.
,509U.
S.
579,589-92(1993)—thetrialjudgemustactasagatekeepertoensurethatscientifictestimonyisnotonlyrelevant,butreliable—to"technical"and"otherspecialized"knowledge).
Dr.
EdwardsholdsaPh.
D.
inappliedphysicsfromStanfordUniversity.
Exs.
R-154;R-154Aat2.
Dr.
Edwardstaughtphysicscoursesattheundergraduateandgraduatelevelformorethan20years.
Tr.
1263:2-8;Ex.
R-154Aat1.
Inconnectionwithhisteaching,Dr.
Edwardsreceivedmultipleteachingawards,includingonewhosecriteriaincluded"acommitmenttoexcellenceinpedagogicalpractices.
"Tr.
1267:15-1268:6;1269:4-14.
Afterteachingformorethan20years,Dr.
EdwardsbecameadeanatUtahStateUniversity,UintahBasin,chargedwith41TheCommission'sregulationonexpertwitnessesissimilartoRule702oftheFederalRulesofEvidence,whichprovidesthat:Awitnesswhoisqualifiedasanexpertbyknowledge,skill,experience,training,oreducationmaytestifyintheformofanopinionorotherwiseif:(a)theexpert'sscientific,technical,orotherspecializedknowledgewillhelpthetrieroffacttounderstandtheevidenceortodetermineafactinissue;(b)thetestimonyisbasedonsufficientfactsordata;(c)thetestimonyistheproductofreliableprinciplesandmethods;and(d)theexperthasreliablyappliedtheprinciplesandmethodstothefactsofthecase.
Fed.
R.
Evid.
702.
TheFederalRulesofEvidenceapplytoadjudicationsunderSections15(c)and(d)oftheCPSA,butthePresidingOfficermayrelaxtherules"iftheendsofjusticewillbebetterservedbysodoing.
"16C.
F.
R.
§§1025.
1,1025.
43(a).
44reviewingtheperformanceandteachingmethodsoftheotherprofessorsinhisdepartment.
Tr.
1262:20-1263:1;1266:19-22;1267:1-10;1268:15-22;Ex.
R-154Aat1.
Inaddition,Dr.
Edwardsauthoredmorethan50peer-reviewedscientificpublications,includingfiveonmagneticphenomena.
Exs.
R-154Aat2;R-155at1.
Dr.
EdwardsacquiredknowledgeofhowtheSubjectProductswork,andhowtheycandemonstratescientificprinciples,byusingtheproducts"hundredsoftimes"overaperiodof2years.
Ex.
R-155at1-18;Tr.
1440:13-16.
Dr.
EdwardsisclearlyqualifiedtotestifyasanexpertwitnessabouttheeducationalutilityoftheSubjectProducts.
SeeAm.
Tech.
Res.
v.
U.
S.
,893F.
2d651,656(3dCir.
1990)(holdingprofessor'sacademictrainingandpracticalexperience,whichincludedaPh.
D.
infinanceandteachingcoursesinspeculativemarkets,corporatefinance,investments,andrealestatefinance,qualifiedhimtotestifyaboutthevalueofabusiness);seealsoFed.
R.
Evid.
702advisorycommitteenotes(1972):("…theexpertisviewed,notinanarrowsense,butasapersonqualifiedby'knowledge,skill,experience,trainingoreducation.
'").
Asanexpert,Dr.
Edwardsmaydrawinferencesbaseduponhypotheticallystatedfactsorofferopinionsfromfactsinvolvingscientificortechnicalknowledge.
16C.
F.
R.
§1025.
44(a);seealsoFed.
R.
Evid.
702(requiringthat"theexpert'sscientific,technical,orotherspecializedknowledgewillhelpthetrieroffacttounderstandtheevidenceortodetermineafactinissue").
WefindthatDr.
Edwardscanrelyupontheknowledgeheacquiredduringhistenureasaphysicsprofessor,andlaterasauniversitydean,toofferopinionsandanswerhypotheticalquestionsabouthowstudentslearnandgraspdifficultscientificprinciplesandthebestmethodsandtoolsforteachingabstracttheoriesandideas.
ComplaintCounsel'schallengestothequalificationofDr.
Edwardsasanexpertgototheweight,nottheadmissibility,ofhistestimony.
ComplaintCounselhadtheopportunitytodiscreditDr.
Edwards'stestimonybythoroughlycross-examiningDr.
EdwardsandhighlightingwhatitperceivedtobedeficienciesinDr.
Edwards'stestimonyandconclusions.
SeeDaubert,509U.
S.
at596("Vigorouscross-examination,presentationofcontraryevidence,andcarefulinstructionontheburdenofproofarethetraditionalandappropriatemeansofattackingshakybutadmissibleevidence.
")(citingRockv.
Arkansas,483U.
S.
44,61(1987)).
TheALJproperlyqualifiedDr.
EdwardsasanexperttoopineontheeducationalutilityoftheSubjectProducts.
2.
RequestsforOfficialNoticeandtoSupplementtheRecordBothpartiesrequestthattheCommissiontakeofficialnoticeofcertainfacts.
RespondentalsorequeststhattheCommissionadmitadditionalevidenceintotherecord.
"Allrelevantandreliableevidenceisadmissible,butmaybeexcludedbythePresidingOfficerifitsprobativevalueissubstantiallyoutweighed.
.
.
byconsiderationsofunduedelay,wasteoftime,immateriality,orneedlesspresentationofcumulativeevidence.
"16C.
F.
R.
§1025.
43(c).
TheCommissionalsomaytakeofficialnoticeof"factsnotappearingontherecordandlegalconclusionsdrawnfromthosefacts.
"16C.
F.
R.
§1025.
43(d)(1).
Forthereasonssetforthbelow,theCommissiondeniestheparties'requests.
45a.
RequestsforOfficialNoticeRespondentrequeststhattheCommissiontakeofficialnoticeoftheFinalRuleforMagnetSetsforthepropositionthatariskofinjuryariseswhentwoormoremagnetsareingested.
AnswerBr.
at8-9&n.
5.
TheCommissiondeniesthisrequestbecauseComplaintCounselalreadyproved,throughthetestimonyofDr.
Noel,thatariskofinjuryoccurswhentwoormoremagnets,oronemagnetandanothermetallicobject,areingested.
SeeSectionsI.
BandIII.
A.
2.
d,suprapp.
2-3,22-28;seealso16C.
F.
R.
§1025.
43(d)(1).
Additionalevidenceonthisfactisunnecessaryandcumulative.
16C.
F.
R.
§1025.
43(c).
ComplaintCounselrequestthattheCommissiontakeofficialnoticethatRespondentstartedselling"ComplianceMagnets,""advertisedassmallmagnetsphereswithlessmagneticstrengththantheSubjectProducts,"inNovember2015.
Appealat40,andEx.
1.
ComplaintCounselarguethatthesaleofComplianceMagnetsdemonstratesthat(1)theSubjectProductsdonothaveutilityduetotheirhighmagneticflux;and(2)theALJerredinfindingthatthe"sphericalandmagneticqualities"oftheSubjectProductshavehighutilitybecausetheyareso"unique.
"Appealat40(quotingInitialDec.
at22).
TheexistenceofComplianceMagnetsisimmaterialtotheCommission'sconsiderationofutilityoftheSubjectProducts.
16C.
F.
R.
§1025.
43(c).
AsdiscussedinSectionIII.
A.
3,suprapp.
35-38,theCommissionfoundthattheutilityoftheSubjectProductsforuseinteachingscientificconceptstoaselectgroupofusersdoesnotoutweightheriskofinjurytochildrenpresentedbytheSubjectProducts.
b.
RequesttoSupplementtheRecordDuringoralargument,twoCommissionersaskedwhetheradditionalinformationshouldbeaddedtotherecord.
Tr.
ofOralArg.
at34:6-15;64:6-8;65:2-5;76:1-6.
CounselforRespondentexplainedthattherecordshouldbesupplementedwith"twopeer-reviewedpublishedpapersbyDr.
EdwardsusingmagnetssincethetimeofthetrialinDecemberof'14.
"Id.
at48:6-9.
WepresumethatRespondentseekstoadmitthesepaperstodemonstratetheusefulnessofSREMsintheclassroom.
WerecognizethattheSubjectProductsmaybeusefultocertainusersinaneducationalsetting,particularlyforconsumerswhoteach,study,andconductresearchinthefieldsofphysics,chemistry,metallurgy,engineering,geometry,biology,andmathematics.
SeeSectionIII.
A.
3.
b,suprap.
37.
Productusefulness,orutility,however,mustbebalancedagainsttheriskofinjury,usingthemultiplefactors,asappropriate,listedin16C.
F.
R.
§1115.
4.
SeeSectionsIII.
A.
1.
aandIII.
A.
3,suprapp.
9-10,35-38.
Theadditionoftwopeer-reviewedpapersfurtherdemonstratinguseoftheSubjectProductsforunderstandingandteachingcomplexscientificprinciplesisduplicativeoftheevidencealreadyintherecord.
Therefore,wedenyRespondent'srequesttosupplementtherecordwiththetwopeer-reviewedpapers.
Duringoralargument,RespondentalsostatedthattheCommissionshouldsupplementtherecordwithcorrespondencebetweenRespondentandComplaintCounseldetailing46Respondent'sattemptstodraftwarningsandagerecommendations.
Tr.
ofOralArg.
at70:4-14;71:3-9;78:2-10.
CounselforRespondentexplainedthat"therewereatleastthreego-roundswithComplianceCounselbeforetheywerecandidandsaiditreallydoesn'tmatterwhatyoudo,we'renotgoingtoacceptit.
"Tr.
70:11-14.
Respondent'sgoodfaitheffortstocreateappropriatewarningsandagerecommendationsdonotchangethecharacteristicsoftheSubjectProductsthatcreatetheriskofinjury.
AsdiscussedinSectionIII.
A.
2.
g,suprapp.
30-34,nowarningcanmitigatetheriskofinjuryfromtheSubjectProducts.
Respondent'srequesttosupplementtherecordwiththecorrespondenceisdenied.
VI.
ConclusionWefindthatComplaintCounselestablishedbyapreponderanceoftheevidencethatthecharacteristicsoftheSubjectProductscreateariskofinjurybasedontheiroperationanduse,whichincludesreasonablyforeseeablemisuse.
ComplaintCounselsubmittedcredible,unrebuttedevidencethattheSubjectProductsarecomprisedofsmall,spherical,shiny,reflective,smooth,loose,separable,andstrongmagnetsthatareattractivetoyoungchildrenandolderchildren,whomouththeSubjectProductsfordifferentreasons.
MouthingtheSubjectProductscreatesaningestionrisktoallchildren,regardlessofage.
TheevidencedemonstratesthatthisbehaviorisreasonablyforeseeableandresultsintheriskofseriousinjuryordeathfromingestingtheSubjectProducts.
BalancingtheriskofinjurywiththeutilityoftheSubjectProducts,theCommissionfindsthatallofthe§1115.
4factorsreviewedweighinfavoroffindingthattheriskofinjuryoutweighstheutilityoftheSubjectProducts.
Accordingly,theCommissionfindsthattheSubjectProductsaredefective.
TheCommissionalsofindsthatthedefectintheSubjectProductspresentsasubstantialproducthazard,basedonthepatternofdefect,thenumberofdefectiveproducts,andtheseverityoftheriskofinjury,whichcreateasubstantialriskofinjurytothepublic.
TheALJ'sconclusionthattheSubjectProductsdonotcontainadefectbasedontheproperorintendeduseoftheSubjectProductswasanerroroflaw.
Additionally,theALJ'sreadingofCommissionprecedentwasincorrect.
TheALJ'sconclusionregardingthelackofadesigndefectwasbasedonanincompletedefectanalysisthatfailedtoconsider,amongotherthings,theproductcharacteristicsthatgiverisetotheriskofinjuryandreasonablyforeseeableconsumeruseormisuseoftheSubjectProducts.
47VII.
RemedyA.
OrderintheInitialDecisionTheALJ'sOrderaccompanyingtheInitialDecisionisdefectiveinseveralwaysandisherebysetasideinfull.
TheALJ'sOrderrequiredRespondenttotakethefollowingmeasures:1.
CompileandprovidetotheCommissionwithinninety(90)daysoftheOrderlistsofknownSREMpurchaserswhopurchasedRespondent'sSREMs(a)withoutwarnings(beforeMay2010);and(b)withawarningsuggestingtheappropriateageofusetobetwelveyearsandolder(InitialDec.
at34-35,37);2.
Withinone-hundredfifty(150)daysoftheOrder,contactbyelectronicmailorU.
S.
PostalServiceFirstClassMailallknownconsumersandretailersidentifiedonthecompiledlistsandprovide:(a)specificwarningsaboutSREMingestionhazards;and(b)thepurchaseranopportunitytoreturntheproducttoRespondentforafullrefund,attheconsumer'soption,withintwo-hundredforty(240)daysoftheOrder(Id.
at35,37);and3.
ProvidetheCommissionwithinformationconcerningallresponsesthatRespondentreceivestothenotificationswithinthree-hundredthirty(330)daysoftheOrder(Id.
at35,38).
Toobtainafullorpartialrefund,theALJ'sOrderrequiredtheconsumertoprovidetoRespondent"asubstantiallycompletesetofthepurchasedproduct,insubstantiallythesameconditionasitwaswhenitwaspurchased.
"Id.
at35.
TheALJ'sOrderfurtherstated:"[a]nyrefundshallbelimitedby15U.
S.
C.
A.
§2064.
"Id.
Inaddition,theALJ'sOrderrequiredtheCommissionandRespondenttopublishthis"OrderofRecall"ontheirwebsites.
Id.
at37.
TheCommissionfindsthattheALJ'sOrderdoesnotcomplywiththestatutoryrequirementsinseveralrespects.
NoticeoftheDefect:First,theALJfailedtodemonstratehowthepublicnoticeprescribedbytheInitialDecision"adequatelyprotect[s]thepublic"fromtheSubstantialProductHazard.
15U.
S.
C.
§2064(c)(1).
Second,althoughtheALJ'sOrderspecifiedtheformofthenotice,i.
e.
,noticebyelectronicmailorregularU.
S.
mailtoallknownconsumersandretailersandpostingtheALJ's"OrderofRecall"ontheCommissionandZenMagnetsandNeoballswebsites,theorderfailedtospecifythecontentofthenotice,asrequiredunderSections15(c)and(i)(2)oftheCPSA(15U.
S.
C.
§§2064(c),(i)(2)),andtheCommission'sregulationat16C.
F.
R.
§1115.
27.
OrderingRespondentto"providespecificwarningsaboutSREMingestionhazards,"withoutindicatingthatthenoticemustcontain,amongotherrequirements,descriptions48oftheproductandthesubstantialproducthazard,failedtocomportwiththenoticerequirementsundertheCPSAandtheCommission'sregulations.
Finally,theALJ'sOrderfailedtoincludeaprovisionthatanysuchpublicnotificationmustbeapprovedbytheCommission,asrequiredunder16C.
F.
R.
§1115.
29(c).
Refunds:Inorderingtherefund,theALJfailedtoincludeanymeaningfulanalysisaddressinghowtherefundisinthepublicinterest.
TheInitialDecisionsimplystated:Withoutwarnings,andwhentheproductsuggestsappropriateusagebychildrenundertheageof14,SREMsaresubstantialproducthazardsandareconsideredtoysunderASTMF963§3.
1.
81,particularlysincesomeofRespondent'sproductsuggestedandmarketed(intheQuestionandAnswerSectionofhiswebsite)theappropriateusageageas12yearsandolder.
InitialDec.
at34(internalfootnotesomitted).
Arguably,theALJ'srationaleisthatmagnetssoldwithoutwarningsormarketedtochildren12yearsandyoungerpresentariskofinjuryandarefundtoconsumersisinthepublicinterest.
Becausetheimportantconnectionbetweentheprescribedremedyandthepublicinterestwasnotclearlystated,however,theALJ'sorderisdeficientforfailingtoindicatehowtherefundisinthepublicinterest.
Additionally,theALJ'sOrderdidnotrequireRespondenttosubmitaplanforimplementingtherefundcomponentforapprovalbytheCommission,asrequiredunderSection15(d)(2)oftheCPSA.
15U.
S.
C.
§2064(d)(2).
Finally,theALJ'sOrderimposedunreasonableburdensonconsumersseekingarefund.
TheALJ'sOrderstated:Inordertoavailthemselvesofafullorpartialrefundpursuantto15U.
S.
C.
A.
§2064,theconsumershallprovideasubstantiallycompletesetofthepurchasedproduct,insubstantiallythesameconditionasitwaswhenitwaspurchased,totheRespondentforanyrefundorderedherein.
InitialDec.
at35(emphasisadded).
Thus,theALJ'sOrderactuallyrequiredtwoconditionsprecedenttoaconsumerseekingarefund.
First,theconsumerhadtolocatesubstantiallyallofthemagnetsthatcamewiththeset–which,astheevidencedemonstrated,wouldbenearlyimpossibletodo,giventhepropensityformagnetstobelostorshared.
SeeSectionsI.
BandIII.
A.
2.
b,suprapp.
2-3,16-19.
Second,themagnetshadtobeinsubstantiallythesameconditionaswhentheywerepurchased;evidencedemonstratedthatmagnetswearandchip.
Tr.
2010:10-14.
Theprovisionsofanyrecall,includingtherefundconditions,mustbedesignedtomotivateconsumerstoactontherecall.
Requiringaconsumertoreturn1,700magnets,innearlypristinecondition,froma1,728-piecesettoreceivearefund,islikelytodiscourageconsumersfromactuallyparticipatingintherecall.
Furthermore,sucharequirementiscontrary49totheCommission'smissiontoprotectthepublicagainstunreasonablerisksofinjuryassociatedwithconsumerproductsandstatutoryauthoritytoremovehazardousproductsfromconsumers'hands.
15U.
S.
C.
§§2051(b)(1),2064(d).
B.
ProhibitionfromManufacturing,OfferingforSale,Distributing,andImportingUnderSection15(d)(2)oftheCPSA(15U.
S.
C.
§2064(d)(2)),theCommissionmayissueanorderprohibitingthemanufactureforsale,offerforsale,distributionincommerce,orimportationintothecustomsterritoryoftheUnitedStatesofaproductthattheCommissionhasdeterminedpresentsasubstantialproducthazard.
TheCommissionmayissueanorderunderSection15(d)(2),onlyiftheCommissiondeterminesthatthisactionisinthepublicinterest.
Id.
Basedupontheevidenceintherecord,theCommissionconcludesthatanorderenjoiningRespondentfrommanufacturingforsale,offeringforsale,distributingincommerce,orimportingtheSubjectProductsisinthepublicinterestbecausetheSubjectProductspresentasubstantialproducthazardtochildrenthatcannotbemitigatedbywarnings.
15U.
S.
C.
§2064(d)(2).
C.
NoticeoftheDefectSection15(c)(1)oftheCPSA(15U.
S.
C.
§2064(c)(1))authorizestheCommissiontoorderpublicnoticeafterdeterminingthat:(1)aproductdistributedincommercepresentsasubstantialproducthazard;and(2)notificationisrequiredinordertoadequatelyprotectthepublic(the"Section15(c)Order").
ASection15(c)Ordermayrequirethemanufacturer,importer,distributor,orretailertotakeanyoneormoreofthefollowingactions:1.
Toceasedistributionoftheproduct.
2.
Tonotifyallpersonsthattransport,store,distribute,orotherwisehandletheproduct,ortowhichtheproducthasbeentransported,sold,distributed,orotherwisehandled,toceaseimmediatelydistributionoftheproduct.
3.
TonotifyappropriateStateandlocalpublichealthofficials.
4.
Togivepublicnoticeofthedefectorfailuretocomply,includingpostingclearandconspicuousnoticeonitsInternetwebsite,providingnoticetoanythirdpartyInternetwebsiteonwhichsuchmanufacturer,retailer,distributor,orlicensorhasplacedtheproductforsale,andprovidingannouncementsinlanguagesotherthanEnglishandonradioandtelevisionwheretheCommissiondeterminesthatasubstantialnumberofconsumerstowhomtherecallisdirectedmaynotbereachedbyothernotice.
5.
Tomailnoticetoeachpersonwhoisamanufacturer,distributor,orretailerofsuchproduct.
506.
Tomailnoticetoeverypersontowhomthepersonrequiredtogivenoticeknowssuchproductwasdeliveredorsold.
Id.
ASection15(c)Ordershallspecifytheformandcontentoftherequirednotice.
Id.
;16C.
F.
R.
§1115.
29(a).
Inaddition,recallnoticesrequiredunderaSection15(c)OrdershallincludetheinformationspecifiedinSection15(i)oftheCPSA(15U.
S.
C.
§2064(i)),andtheCommission'scorrespondingregulationsat16C.
F.
R.
part1115,subpartC,unlesstheCommissiondeterminesthatoneormoreoftherecallnoticerequirementsisunnecessaryorinappropriate.
TheCommissionmustreviewandagreeinwritingtoallaspectsofarecallnoticerequiredbyaSection15(c)Orderbeforesuchnoticeispublished,broadcasted,orotherwisedisseminated.
16C.
F.
R.
§1115.
29(c).
Basedupontheevidenceintherecord,theCommissionconcludesthatwidespreadpublicnoticethattheSubjectProductspresentasubstantialproducthazardisnecessarytoadequatelyprotectthepublic.
15U.
S.
C.
§2064(c)(1).
Morethan10millionindividualSREMsdistributedbyRespondentmaybeinthehandsofconsumers.
Tr.
1466:11-19;AnswerBr.
at39(acknowledgingthatRespondentsold"millions"ofmagnets).
Achildneedonlyingestonemagnetandametallicobject,ortwomagnets,tosuffercatastrophicinjuries.
SeeSectionsI.
BandIII.
A.
2.
d,suprapp.
2-3,22-26.
Furthermore,assetforthinthisFinalDecisionandOrder,evidenceindicatedthatcaregiversandevenmedicalprofessionalsoftendonotappreciatethesubstantialriskofinjurypresentedbySREMsthatcomprisetheSubjectProducts.
SeeSectionsIII.
A.
2.
dandIII.
A.
2.
f,suprapp.
25,27,30.
TheCommissionhasdeterminedthatthefollowingformsofnoticemustbeissuedtowarnconsumers,includingcaregivers,healthcareprofessionals,andothermembersofthepublic,aboutthesubstantialproducthazardposedbytheSubjectProducts:1.
AjointnewsreleasefromtheCommissionandRespondent;2.
Avideonewsrelease;3.
ArecallnoticetobepostedprominentlyandforanextendedperiodoftimeonallofRespondent'sInternetwebsites;4.
ArecallnoticeorsimilarcommunicationtoappearprominentlyandforanextendedperiodoftimeoneverysocialmediaplatformusedbyRespondent,including,butnotlimitedto,Google+,YouTube,Twitter,Reddit,Flickr,Facebook,andInternetblogs;5.
Directnoticeviafirst-classmailandelectronicmailtoeachthirdpartyInternetwebsiteonwhichRespondentplacedtheSubjectsProductsforsale;6.
Directnoticeviafirst-classmailandelectronicmailtoeachmanufacturer,distributor,andretailer,including,butnotlimitedto,marijuanadispensariesandheadshops,oftheSubjectProducts;517.
Recallpostertobeprovidedwitheachdirectnoticesenttoretailerswithinstructionsregardingposting;8.
Directnoticeviafirst-classmailandelectronicmailtoeachthirdpartyInternetplatformonwhichtheSubjectProductsmaybesoldbypersonsotherthanRespondent,including,butnotlimitedto,eBay;and9.
Directnoticeviafirst-classmailandelectronicmailtoeachpersontowhomRespondentknowssuchproductwasdeliveredorsold.
Hereinafter,werefertotheabovenoticescollectivelyasthe"PublicNotifications.
"ExceptforcommunicationsappearingoncertainsocialmediaplatformsmaintainedbyRespondent,eachPublicNotificationshallcomplywith15U.
S.
C.
§2064(i)(2)andtheGuidelinesandRequirementsforMandatoryRecallNotices,assetforthat16C.
F.
R.
part1115,subpartC.
EachPublicNotificationalsoshallcontaintheinformationspecifiedin15U.
S.
C.
§2064(i)(2)and16C.
F.
R.
§1115.
27.
Inaddition,eachPublicNotificationshallspecifythename,city,andstateofeachmarijuanadispensary,headshop,hobbystore,andtoystorethatsoldtheSubjectProducts.
TheCommissionbelievesthattheseretailersconstitute"significantretailers"under16C.
F.
R.
§1115.
27(i)becausesuchretailersareregionallylocatedandaretheonlybrick-and-mortarlocationsthatsoldtheSubjectProducts.
Inaddition,identificationofsuchretailersisinthepublicinterestandwillassistconsumersindeterminingwhethertheypurchasedtheSubjectProducts,particularlyifthenoticeidentifiesheadshopsandmarijuanadispensaries,whicharenotthetraditionaltypesofretailersspecifiedinCommissionrecallnotices.
Id.
Finally,totheextentpossible,communicationsoneachsocialmediaplatformusedbyRespondentshallincludealinktotherecallnoticepostedonRespondent'sInternetwebsite,iftherecallnoticecannotappearonthesocialmediaplatformbecauseofmessagingrestrictions.
Asorderedbelow,ComplaintCounselshallsubmitdraftPublicNotificationstoRespondentwithinten(10)daysoftheserviceofthisFinalDecisionandOrder.
Withintwenty(20)daysoftheserviceofthisFinalDecisionandOrder,RespondentshallnotifyComplaintCounselofanyobjectionsithastothedraftPublicNotifications.
IfRespondenthasnoobjectionstothedraftPublicNotifications,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallsubmittotheCommission,throughtheOfficeoftheSecretary,thedraftPublicNotificationsforreviewandapprovalbytheCommission.
IfComplaintCounselandRespondentcannotagreeonthedraftPublicNotifications,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselandRespondentshallsubmit,throughtheOfficeoftheSecretary,ajointstatementofthefactualandlegalissuesregardingthedraftPublicNotificationsthatareindispute.
TheCommissionmustreviewandagreeinwritingtoallaspectsofthePublicNotificationsbeforeeachnotificationmaybepublished,broadcasted,orotherwisedisseminated.
16C.
F.
R.
§1115.
29(c).
52D.
RefundsSection15(d)(1)oftheCPSA(15U.
S.
C.
§2064(d)(1))authorizestheCommissiontoorderrepair,replacement,and/orrefundofaproductafterdeterminingthat:(1)aproductdistributedincommercepresentsasubstantialproducthazard;and(2)suchactionisinthepublicinterest(the"Section15(d)Order").
ASection15(d)Ordermayrequirethemanufacturer,importer,distributor,orretailertoprovidepublicnoticeasspecifiedunderSection15(c)oftheCPSA,andtotakeanyoneormoreofthefollowingactionstheCommissiondeterminestobeinthepublicinterest:1.
Tobringsuchproductintoconformitywiththerequirementsoftheapplicablerule,regulation,standard,orbanortorepairthedefectinsuchproduct.
2.
Toreplacesuchproductwithalikeorequivalentproductwhichcomplieswiththeapplicablerule,regulation,standard,orbanorwhichdoesnotcontainthedefect.
3.
Torefundthepurchasepriceofsuchproduct(lessareasonableallowanceforuse,ifsuchproducthasbeeninthepossessionofaconsumerforoneyearormore(i)atthetimeofpublicnoticeundersubsection(c),or(ii)atthetimetheconsumerreceivesactualnoticeofthedefectornoncompliance,whicheverfirstoccurs).
15U.
S.
C.
§2064(d)(1).
TheSection15(d)Ordershallrequirethepersontowhomitappliestosubmitaplan,forapprovalbytheCommission,forimplementingtheCommission'sorder(the"ActionPlan").
15U.
S.
C.
§2064(d)(2).
Ifarefundisordered,theSection15(d)Ordershallspecifythepersonstowhomrefundsmustbemade.
15U.
S.
C.
§2064(d)(2).
RefundsorderedunderSection15(d)oftheCPSAshallalsocontainprovisionsforreimbursementfor"anyreasonableandforeseeableexpensesincurred"byconsumerswhoavailthemselvesoftherefundand"[n]ochargeshallbemade"toanyconsumerswhoavailthemselvesofsuchremedy.
15U.
S.
C.
§2064(e)(1).
InviewofthesubstantialproducthazardpresentedbytheSubjectProducts,asdiscussedaboveinSectionIII,theCommission'sinterestisinremovingasmanyoftheSubjectProductsaspossiblefromconsumers'handsbypromotingconsumerparticipationintherecall.
Therefore,theCommissionconcludesthatitisinthepublicinteresttoorderRespondenttorefundthepurchasepriceoftheSubjectProducts,lessthe"reasonableallowanceforuse"deductionspecifiedatSection15(d)(1)(C)oftheCPSA.
15U.
S.
C.
§2064(d)(1)(C).
Asorderedbelow,RespondentshallsubmitadraftActionPlanthatprovidesforrefundofthepurchasepriceoftheSubjectProducts,lessa"reasonableallowanceforuse,"inaccordancewithSections15(d)and(e)oftheCPSA(15U.
S.
C.
§§2064(d)and(e))toComplaintCounselwithinten(10)daysoftheserviceofthisFinalDecisionandOrder.
The53termsandconditionsforanyrefundshalltakeintoaccountthefollowingconsiderations:(1)thegenerallyacceptedusefullifeofmagnets;(2)theoriginalcostpaidbyconsumers;(3)incentivestoencouragereturns;(4)whetherandhowmanymagnetsshouldbereturnedbyconsumerstoqualifyforarefund;(5)thetiminganddurationofanyrefund;(6)shippingorothercostsassociatedwithreturns;and(7)thelimits,ifany,oftherefund.
Withintwenty(20)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallnotifyRespondentofanyobjectionstheyhavetothedraftActionPlan.
IfComplaintCounselhavenoobjectionstothedraftActionPlan,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,RespondentshallsubmittotheCommission,throughtheOfficeoftheSecretary,thedraftActionPlanforreviewandapprovalbytheCommission,asrequiredbySection15(d)(2)oftheCPSA.
15U.
S.
C.
§2064(d)(2).
IfthepartiesareunabletoresolveobjectionstothedraftActionPlan,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,RespondentandComplaintCounselshallsubmit,throughtheOfficeoftheSecretary,ajointstatementofthefactualandlegalissuesregardingthedraftActionPlanthatareindisputetoberesolvedbytheCommission.
ORDERHavingconsideredtheargumentsandevidenceofrecordinthisproceeding,theCommission(bya3-1vote,4Commissionersvoting)finds:1.
ThattheSubjectProductspresenta"substantialproducthazard,"asdefinedin15U.
S.
C.
§2064(a)(2),becausetheycontainadefectwhich,duetothepatternofthedefect,thenumberofdefectiveproductsdistributedincommerce,andtheseverityoftheriskofinjury,createsasubstantialriskofinjurytochildren;2.
Thatbecauseofthesubstantialriskofinjurysuchmagnetsposetochildren,itisinthepublicinterestthatRespondentceasefrommanufacturingforsale,offeringforsale,distributingincommerce,orimportingintothecustomsterritoryoftheUnitedStates,theSubjectProducts;3.
ThatbecauseRespondentsoldmillionsofindividualmagnetsandcaregiversandmedicalprofessionalsarenotgenerallyawareofthesubstantialriskofinjurythattheSubjectProductspresenttochildren,publicnotificationpursuantto15U.
S.
C.
§2064(c)(1)isrequiredtoadequatelyprotectchildrenfromthesubstantialproducthazardpresentedbytheSubjectProducts;and544.
ThatbecauseofthesubstantialriskofinjurythattheSubjectProductspresenttochildren,asmanyaspossibleofthesehazardousproductsmustberemovedfromconsumers,and,therefore,itisinthepublicinterestthatRespondentrefundthepurchasepriceoftheSubjectProducts,lessthe"reasonableallowanceforuse"deduction,pursuantto15U.
S.
C.
§2064(d)(1)(C).
ItisthereforeORDERED:1.
ThattheALJ'sInitialDecisionissetasideinfull;2.
ThatRespondentshallceasefrommanufacturingforsale,offeringforsale,distributingincommerce,orimportingintothecustomsterritoryoftheUnitedStates,theSubjectProducts;3.
That,withinten(10)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallsubmittoRespondentdraftPublicNotifications,definedabove;4.
ThateachPublicNotificationshallcomplywiththerequirementsin15U.
S.
C.
§2064(i)(2)andtheGuidelinesandRequirementsforMandatoryRecallNotices,assetforthat16C.
F.
R.
part1115,subpartC;5.
ThateachPublicNotificationshallidentifythename,city,andstateofallmarijuanadispensaries,headshops,hobbystores,toystores,andotherretailersthatsoldtheSubjectProducts;6.
ThateverysocialmediaplatformusedbyRespondentshallincludealinktotherecallnoticeapprovedbytheCommissionandpostedonRespondent'sInternetwebsiteprominentlyandforanextendedperiodoftime,totheextentpossible,orahyperlinktothisrecallnoticeifthecompleterecallnoticecannotappearonthesocialmediaplatformbecauseofmessagingrestrictions;7.
That,withintwenty(20)daysoftheserviceofthisFinalDecisionandOrder,RespondentshallnotifyComplaintCounselofanyobjectionsithastothedraftPublicNotifications;8.
That,iftherearenoobjectionstothedraftPublicNotifications,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallsubmittotheCommission,throughtheOfficeoftheSecretary,thedraftPublicNotificationsforreviewandapprovalbytheCommission,asrequiredby16C.
F.
R.
§1115.
29(c);559.
That,ifComplaintCounselandRespondentcannotagreeonthedraftPublicNotifications,withinthirty(30)daysofserviceofthisFinalDecisionandOrder,ComplaintCounselandRespondentshallsubmit,throughtheOfficeoftheSecretary,ajointstatementofthefactualandlegalissuesregardingthedraftPublicNotificationsthatareindisputetoberesolvedbytheCommission;10.
ThatRespondentshallsubmitadraftActionPlanprovidingforrefundofthepurchasepriceoftheSubjectProducts,lessa"reasonableallowanceforuse,"inaccordancewith15U.
S.
C.
§§2064(d)and(e),toComplaintCounselwithinten(10)daysoftheserviceofthisFinalDecisionandOrder,withthetermsandconditionsofsuchrefundtakingintoaccountthefollowingconsiderations:(a)thegenerallyacceptedusefullifeofmagnets;(b)theoriginalcostpaidbyconsumers;(c)incentivestoencouragereturns;(d)whetherandhowmanymagnetsshouldbereturnedbyconsumerstoqualifyforarefund;(e)thetiminganddurationofanyrefund;(f)shippingorothercostsassociatedwithreturns;and(g)thelimits,ifany,oftherefund;11.
That,withintwenty(20)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallnotifyRespondentofanyobjectionstheyhavetothedraftActionPlan;12.
That,iftherearenoobjectionstothedraftActionPlan,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,ComplaintCounselshallsubmittotheCommission,throughtheOfficeoftheSecretary,thedraftActionPlanforreviewandapprovalbytheCommission,asrequiredby15U.
S.
C.
§2064(d)(2);13.
That,ifRespondentandComplaintCounselcannotagreeonadraftActionPlan,withinthirty(30)daysoftheserviceofthisFinalDecisionandOrder,RespondentandComplaintCounselshallsubmit,throughtheOfficeoftheSecretary,ajointstatementofthefactualandlegalissuesregardingthedraftActionPlanthatareindisputetoberesolvedbytheCommission;14.
ThatRespondentshallfilewithComplaintCounselmonthlyprogressreports,inaformatspecifiedbyComplaintCounsel,documentingtheprogressoftherecall;and