Magnetsafety.org v. Consumer Product Safety Commission

When small, powerful magnets are ingested by children, they pose a serious risk of injury or death. In 2012, the Consumer Product Safety Commission (commission) (defendant) promulgated a rule that limited the size and strength of magnets sold in sets. In 2016, the Tenth Circuit struck down that rule because the commission had failed to acknowledge ambiguities in data relied upon during rulemaking. The commission conducted further analysis and adopted a new rule that limited the size and strength of all magnet products that (1) had one or more loose or separable magnets and (2) were to be used for entertainment, jewelry, mental stimulation, or stress relief. In its cost-benefit analysis for the new rule, the commission relied on data from the National Electronic Injury Surveillance System showing that medical professionals treated an average of 700 magnet-ingestion incidents a year, with the incidents having an annual societal cost of at least $51.8 million. The commission also noted that ingestion rates fell significantly when the previous rule was in effect. Regarding the new rule’s likely costs to consumers, manufacturers, and retailers, the commission admitted it did not have data for precise calculations, nor had such data been provided when the commission made an information request during rulemaking. However, based on the available data, the commission estimated the rule’s negative effects to be between $2 million and $35 million a year. Because the estimated societal savings of $51.8 million exceeded the upper cost estimate, the commission concluded the cost-benefit analysis supported the new rule. Magnetsafety.org and others (plaintiffs) sued to challenge the rule, arguing that the commission’s cost-benefit conclusion was not supported by sufficient evidence.