“The inventory was sold and the business ended,” says Mr. Zucker. He thought it was an “honest and graceful exit” to a broken entrepreneurial dream.

But in February the Buckyballs saga took a chilling turn: The commission filed a motion requesting that Mr. Zucker be held personally liable for the costs of the recall, which it estimated at $57 million, if the product was ultimately determined to be defective.

This was an astounding departure from the principle of limited liability at the heart of U.S. corporate law. Normally corporate officers aren’t liable for the obligations of a company, and courts are loath to pierce the shield of limited liability unless it can be shown that the corporate entity was a mere facade—that corporate formalities weren’t adhered to, the officers commingled personal and corporate funds, and so on.

No such allegations were made against Mr. Zucker. Instead, the commission seeks to extend the holding of United States v. Park, a 1975 Supreme Court case in which the CEO of a food retailer was held criminally liable under the Food and Drug Act for rodent infestation at company warehouses. The CEO, the court ruled, was the “responsible corporate officer” by virtue of being in a position of authority when the health violations occurred.