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Zen Magnets: Judge Overrules Federal Agency's Stop-Sale Order

Shihan Qu has challenged federal efforts to shut down his company — and won some startling decisions.
Shihan Qu has challenged federal efforts to shut down his company — and won some startling decisions.
Anthony Camera
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A local company that has battled the federal government for six years won some breathing room on Tuesday, June 12, after a judge ruled that the company hadn't received a fair hearing in its efforts to stay in business and demonstrate the safety of its product.

Shihan Qu launched his company, Zen Magnets, out of his home in Boulder in 2009, offering powerful, BB-sized magnets suitable for fidgeting, as an educational tool, or for making sculptures and complex geometric shapes. But officials at the U.S. Consumer Product Safety Commission viewed such products, known as small rare-earth magnets or SREMS, as a safety hazard because of reports of children accidentally ingesting the spheres. Under pressure from the agency, most of the suppliers stopped offering the magnets, but Qu, who'd never marketed his magnets to children, increased the warnings on his packages and challenged the agency's attempt to ban his product.

An administrative law judge rejected the agency's argument that Zen magnets were too dangerous to be marketed to consumers. The CPSC passed a new "magnet safety standard" directed entirely at Qu's business, only to have it overturned by the Tenth Circuit Court of Appeals — the first court-ordered reversal of a product ban in decades. But then the CPSC rejected the administrative judge's ruling and declared that the "foreseeable misuse" of Qu's magnets made them defective. Last fall the agency issued an order requiring Zen to not only stop sales, but make an effort to recall every high-powered magnet it had ever sold and notify consumers of the dangers.

It was that order that was the subject of a hearing earlier this year and this week's ruling by U.S. District Judge Brooks Jackson. While rejecting many of Zen's arguments that the review process used by the agency was arbitrary and capricious, Jackson found that the company's right to due process was violated; in particular, he found that remarks by one commission member, asserting that no degree of warning or restrictions on sales could render the magnets safe, indicated that the company was deprived of a "fair and impartial tribunal" to rule on the matter.

Jackson's order doesn't mean the agency can no longer seek to shut down the magnet trade; it simply sends the case back for further review before a possibly less biased panel. But Qu was undaunted.

"We have come out of the other side of the recall case scathed, but alive and as enthusiastic as ever," he declared in a press statement. "We remain willing to work with the CPSC to develop the magnet safety standards for which we've already petitioned, and which will be more effective and reasonable than the all-ages, nationwide ban we succeeded in vacating in the Tenth Circuit."

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