Daisy says its products are as safe as possible. Aaron Locker, Daisy's New York attorney, says, "Guns are dangerous. These accidents don't happen unless you aim, point and fire them at somebody, which you're not supposed to do." Daisy officials declined to comment.

On May 24, 1999, it was a drizzly afternoon in Solebury, Pa., north of Philadelphia. John Tucker Mahoney took out the BB gun his father had bought for his 16th birthday two days before. Tucker, as he was known, was a strapping high-school sophomore who played varsity soccer and was a homecoming prince. He was no expert shooter, but he had two other BB guns his grandfather had taught him to handle, his parents, Jerome and Rebecca Mahoney, say.

Tucker and a friend, also 16, shot at a crow in Tucker's backyard and, later, a mailbox at the friend's house down the street, according to a February 2000 deposition the friend gave in a private lawsuit the Mahoneys filed against Daisy in federal court in Philadelphia.

SHOWDOWN The Consumer Product Safety Commission tried to force the recall of millions of Daisy BB guns, then backed off. Consumer Product Safety Commission •  Chairman: Harold Stratton Jr.   •  Headquarters: Bethesda, Md.   • Employees: 470   • 2003 Budget: $60 million   • Products regulated: Toys, appliances, tools, clothing, furniture, household chemicals, among others.   Daisy Manufacturing • Chairman: Lewis Ray Hobbs   • Headquarters: Rogers, Ark.   • Employees: 195   • 2003 Revenue: $55 million   • Products made: BB- and pellet-shooting long-barrel guns and pistols, slingshots, ammunition, targets, collectibles.

The gun seemed out of BBs, so the boys headed back to Tucker's house. Thinking the gun was empty, they took turns firing at each other, mussing their hair with blasts of air, Tucker's friend testified.

The teenagers were playing with a PowerLine Model 856, with a scope and a plastic stock made to look like wood. Tucker's father had paid $39 for it at Kmart. It came with a hand-operated air pump that increased the velocity at which BBs fly. Pumped 10 times, it could fire at 650 feet per second. At that speed, a BB can penetrate a human skull. Tucker's gun came with a printed warning: "Not a toy. Adult supervision required."

Standing in Tucker's driveway, his friend worked the pump and then fired what he thought was an empty gun at Tucker's head. In fact, there was a BB in the firing chamber. It pierced Tucker's skull just above the left ear and severed an artery in his brain. Tucker was left unable to speak, walk, eat, drink or otherwise care for himself.

Daisy started selling PowerLine models in 1972. The CPSC in its lawsuit against Daisy blamed Models 856 and 880 for at least 15 deaths and 171 injuries, most involving children. Daisy says the guns shouldn't be used by anyone under 16. Evidence introduced in the Mahoney case suggests that many children under 16 do use them.

Evidence in the case also suggests that many BB-gun accidents happen after someone fires a gun they erroneously thought was empty. Daisy has settled several lawsuits on confidential terms, without admitting liability, while publicly arguing that accidents occurred only because people violated a cardinal shooting rule: Handle all guns as if they're loaded.

BBs are fed into the firing chamber from an oblong magazine just above and forward of the trigger. Magazines can hold as many as 100 BBs, making it difficult to determine how many are left. Private lawyers for the Mahoneys discovered that a Daisy engineer had testified in 1999 in a lawsuit in federal court in Tennessee that BBs can get temporarily stuck in corners of the magazine. When that happens, the gun may seem empty, but then a BB can come unstuck, slip into the firing chamber and be discharged, according to the CPSC suit against Daisy.

The Mahoney attorneys also uncovered Daisy documents indicating the company had made design changes to their magazines in 1998 and 1999 to prevent BBs from getting stuck. But millions of older models remained in consumers' hands, and retailers continued to sell older guns that hadn't been altered, including Tucker's, Mr. Locker says. He says the alterations were merely "precautionary" and didn't mean old models posed a danger.

Daisy settled in early 2001 with the Mahoneys, agreeing to pay them $18 million without admitting any fault. But before that, in May 2000, the family had its attorneys write to the CPSC to urge "immediate action" to spare others from their son's fate.

'Independent' Agency

Congress created the CPSC in 1972 to protect the public from "unreasonable" risks of injury or death from consumer products that pose fire, electrical, chemical or other hazards. It has 470 employees and a $60 million annual budget. Its three commissioners are nominated by the president and confirmed by the Senate for staggered, seven-year terms. No more than two can be from the same party. The president chooses one as chairman.

The CPSC is an "independent" agency, similar to the Securities and Exchange Commission and the Federal Communications Commission. In theory, these agencies are less susceptible to political pressure because, by law, the president can't readily fire commissioners, as he can, for instance, the head of the National Highway Traffic Safety Administration.

While the NHTSA has written reams of safety rules for cars and trucks, and the Food and Drug Administration must approve drugs before they are marketed in the U.S., Congress has allowed most appliances, tools and toys to go on the market without regulation. That is partly because there are too many products and manufacturers for such a small agency to regulate. Congress also directed the agency to favor voluntary safety standards set in cooperation with industry and consumer groups. When it learns of deaths or injuries, it can investigate to determine whether a product should be repaired or taken off the market.

Under pressure from the NRA, Congress specifically exempted gunpowder firearms from CPSC jurisdiction in 1972 and again in 1975. The Bureau of Alcohol, Tobacco, Firearms and Explosives regulates aspects of the gun industry but not the safety of firearms themselves. Air-powered BB guns remain under the CPSC's purview, but the agency has no rules that apply to them. Manufacturers follow voluntary criteria set by an independent body that sets standards for consumer and other products.

When the Mahoney lawyers wrote to the CPSC, the chairman was Ann Brown, who had been appointed by President Clinton in 1993. Before that, she had spent 15 years on the board of the Consumer Federation of America, a Washington advocacy group. At the CPSC, Ms. Brown ratcheted up fines on companies and pushed for safer bunk beds and baby walkers. She frequently called parents of dead or injured youngsters to commiserate and became a mainstay on TV talk shows, lambasting products she deemed unsafe.

Over the years, the CPSC had investigated Daisy BB guns repeatedly without finding a hazard. In 1995, on Ms. Brown's watch, agency staffers had absolved the guns of the stuck-BB problem later alleged in the Mahoney case. But Ms. Brown says in an interview she was distressed to learn, five years afterward, that Daisy guns lacking the safety changes remained on the market.

She ordered another investigation. She barred staffers who had previously investigated the guns and hired outside experts. Later, one staffer removed from the new case, Ronald Reichel, said Ms. Brown "had it in for BB guns." In sworn testimony in the CPSC case against Daisy, Mr. Reichel, an electronics technician, said, "She was upset with us for not finding fault." Ms. Brown, now 67, denies that.

By the summer of 2001, President Bush had taken over the White House, and Ms. Brown was preparing to leave the CPSC. On Aug. 8, she announced what she hoped to accomplish before her Nov. 1 departure, including "a major recall of (or lawsuit regarding) a very dangerous product that kills and maims children."

At the time, CPSC staffers were pressing Daisy to recall more than seven million PowerLine 880s and 856s. The company was resisting because, it said, the guns weren't defective.

CPSC inquiries usually end with the agency deciding against pursuing a remedy or with a company consenting to a recall. If the commission and company can't agree, the agency can file an administrative lawsuit seeking to force a recall. At least two commissioners must approve that rare step. Ms. Brown scheduled a vote on Daisy for Oct. 30, two days before she was to leave office.

The NRA sprang into action. A potent lobbying group that represents firearm owners and views any regulation with suspicion, the NRA embraces BB guns as "gateway" guns that prepare young people for shooting sports with full-fledged firearms. A week before the CPSC vote, the NRA sent a "special alert" to members via e-mail, saying a Daisy recall could be used in future suits against all firearm makers. "Could this be [Ms. Brown's] last-ditch attempt at securing an anti-gun legacy?" the alert said.

Hundreds of hostile e-mails flooded the agency. "I believe that you have an agenda, and that agenda includes taking away the guns of American citizens," read a typical one. Ms. Brown says she wasn't interested in a broader attack on gun makers or owners.

Even before commissioners voted, Ms. Brown planned a press conference to announce the lawsuit, complete with a videotape of Tucker and an appearance by his mother. Ms. Brown and the commission's other Democrat, Thomas Hill Moore, voted to file the suit. Mary Sheila Gall, a Republican appointed by the first President Bush, voted no. In a written statement, Ms. Gall said the vote was "highly politicized," the timing "driven by today's 2 p.m. press conference."

Administrative suits are filed within the CPSC rather than in federal court. Career CPSC staffers argue the case against the manufacturer before an administrative law judge, who makes a decision that can be accepted, overturned or modified by the CPSC commissioners.

The same day the suit was filed, President Bush nominated Harold Stratton Jr. of New Mexico to replace Ms. Brown. Mr. Stratton, now 53, helped organize Lawyers for Bush in his home state in 2000. The same year, the former state legislator and attorney general co-founded the Rio Grande Foundation, a think tank that promotes "limited government, economic freedom and individual responsibility," its Web site says. He severed ties after being nominated to the CPSC.

Complicated Rules

Mr. Stratton says in an interview he couldn't do much at first about the Daisy case. Federal law and CPSC rules require commissioners to remain uninvolved in administrative trials so they can objectively review the judge's decision. "Ex parte" rules prohibit commissioners from speaking separately with staffers or a company unless both sides waive the restriction. Commissioners are, however, permitted to consider settlement offers submitted through the judge.

Daisy made such an offer in May 2003. The company proposed to spend $1.5 million on a five-year campaign to buy ads on TV and in shooting magazines to publicize safety rules such as "Treat Every Gun As If It Were Loaded." Daisy also offered to add warnings to its packaging. In return, the CPSC would drop its suit.

Administrative Law Judge William Moran blasted the offer as "empty," noting Daisy already had launched the publicity campaign. The CPSC staff refused to support a deal unless it involved a recall, arguing that the safety campaign would be valuable but insufficient. "In the real world, children make mistakes," the staff said in its brief.

With the Democrat Mr. Moore and the Republican Ms. Gall still in place, Mr. Stratton was the swing vote. He says he wanted to talk to the staff and Daisy separately. But Daisy refused to waive the ex parte rules because it didn't trust the staff, Mr. Locker says. Ms. Gall voted to accept the settlement. Mr. Moore said no. Mr. Stratton says he "didn't know enough about the case" to go along with a settlement, so he said no, too.

In October, the company resubmitted its offer, with two important differences. First, Daisy avoided Judge Moran and went directly to the commissioners because the judge "was biased," Mr. Locker says.

Second, Daisy asserted that the CPSC suit had resulted in a doubling of the company's annual liability-insurance premium, to $2.4 million. A recall would produce a rate "so prohibitive that Daisy would be forced out of business," the company's chief executive, Lewis Ray Hobbs, said in an affidavit. Daisy doesn't disclose its financial performance. Documents in the CPSC case show that it has annual revenue of about $55 million.

Daisy now agreed to waive the ex parte rules. Mr. Stratton met first with the CPSC staff, who wanted to subject Daisy's doomsday financial claims to expert analysis and cross-examination at trial. But Mr. Stratton says he decided the agency didn't have a strong case and that pursuing Daisy was distracting the staff from assessing other products.

On Oct. 22, six Daisy representatives, including Messrs. Hobbs and Locker, brought a stack of financial documents to a CPSC conference room where they met with Mr. Stratton. The commissioner says he had been skeptical of Daisy's financial claims, but became convinced after scouring the documents with the help of an aide who previously had worked as a bank-loan officer.

Four days after the meeting, Tucker Mahoney died in a Pennsylvania hospital from complications related to his brain injury. He was 20.

By a 2-1 vote, with Mr. Moore dissenting, the CPSC approved the settlement on Nov. 14, the day Daisy's liability insurance was due to expire. In a written statement, Mr. Stratton said the "burdensome and inefficient" suit would have led to "years of costly litigation" but no new knowledge about Daisy products. He conceded BBs could get stuck in the gun but said injuries were preventable if people didn't aim at each other.

Yesterday, Tucker Mahoney's parents filed suit in federal court in Philadelphia, seeking to undo the Daisy settlement. They alleged that the CPSC failed to follow proper procedures in settling. A spokesman for the CPSC said it hadn't seen the lawsuit. Daisy declined to comment.

Write to Bryan Gruley at bryan.gruley@wsj.com¹