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Tenth Circuit Lifts Stay on CPSC’s Magnets Rule

As we wrote about earlier this month, on April 1, 2015, the U.S. Court of Appeals for the Tenth Circuit (“Tenth Circuit”) temporarily stayed the effective date of “the enforcement and effect” of the CPSC’s safety standard for certain high-powered magnet sets.  Specifically, the Court stayed the safety rule pending consideration of the CPSC’s response to plaintiff Zen Magnets’ (“Zen” or “the Company”) motion to stay the rule pending judicial review.  While the temporary stay ordered by the Tenth Circuit was widely reported in the media, what followed soon thereafter – the lifting of that stay – has received scant attention.

On April 14, CPSC Responded to Zen’s Stay Motion.  The Government argued that the rule should not be stayed pending judicial review because Zen could not demonstrate:

  1. Irreparable injury absent the stay because it had provided no evidence that the Company itself would be injured;

  2. Zen was likely to prevail on the underlying merits of its petition because the Company simply disagreed with how the CPSC extrapolated certain data and weighed competing policy considerations; and

  3. The public policy interest in enactment of a stay outweighed the important consumer safety considerations involved here.

One week later, on April 20, the Tenth Circuit reversed course and lifted its temporary stay after denying Zen’s motion.  In a short, two-page order, the court found that Zen had not satisfied the four factors considered by the court in granting a stay.  As a result of the court’s order, the magnet safety rule immediately went into effect and there will be no stay on the enforcement of the rule pending the Tenth Circuit’s review of the rule itself.

Zen and the CPSC are now in the process of briefing Zen’s petition on the underlying rule.  The Tenth Circuit will likely hear oral argument on the rule itself over the coming months.  We will continue to update our readers on both this appellate litigation to review the underlying rule as well as the litigation currently awaiting a decision from an administrative law judge on CPSC’s determination that Zen’s spherical rare earth magnet sets pose a substantial product hazard and should be subject to a mandatory product recall.

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About this Author

Matthew Cohen, Antitrust, Consumer Safety, Attorney, Mintz Levin, law firm
Associate

Matthew is an Associate in the Washington, D.C. office, practicing in the firm’s Antitrust & Federal Regulation, Consumer Product Safety, and Litigation Sections.

Matthew has experience working with corporate and individual clients in litigation before federal and state courts. Matthew has assisted clients litigate a wide variety of general business issues, including antitrust and unfair/deceptive trade practice issues, business torts, contract disputes, and employment matters, among others.  He has also helped spearhead clients’ responses to civil investigative demands (CIDs)...

(202) 434-7348
Matthew Howarse, Consumer Safety, Attorney, Mintz Levin, Law Firm
Of Counsel

Based in Washington, DC, Matt focuses his practice on federal, state, and international product safety matters and related regulatory issues and litigation. He provides representation on compliance with product safety regulations, product safety incident reporting, imported products, recalls, civil penalty proceedings, investigations, and other regulatory and enforcement matters. Matt works with a variety of different clients on issues and matters before the US Consumer Product Safety Commission (CPSC) and other federal and state agencies.

202-434-7446