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In re Aqua Dots Products Liability Litigation

October 4, 2010

IN RE AQUA DOTS PRODUCTS LIABILITY LITIGATION


The opinion of the court was delivered by: David H. Coar United States District Judge

MDL no. 1940

This Document Relates To: HONORABLE DAVID H. COAR

ALL ACTIONS

MEMORANDUM OPINION AND ORDER

The lead plaintiffs in this multidistrict litigation filed suit in the wake of the CPSC recall of Aqua Dots, a popular children's toy tainted with the so-called date rape drug GHB. Now that eleven individual cases have been transferred and consolidated for pretrial purposes in this court, see 28 U.S.C. § 1407, the lead plaintiffs propose to represent fourteen Rule 23(b)(3) classes seeking damages and injunctive relief against the manufacturer, distributor, and three major retailers of Aqua Dots. For the reasons set forth below, their motion for class certification is DENIED in its entirety.

BACKGROUND

The Aqua Dots craft kit is a popular toy that allows children to create multidimensional designs by assembling small, brightly colored beads that fuse together when sprayed with water. Various Aqua Dots products are marketed nationwide for children ages four and over at prices ranging from $17-$30. Aqua Dots are manufactured by defendant Moose Enterprises and distributed in North America by defendant Spin Master. Defendants Wal-Mart, Toys "R" Us, and Target are among the two-hundred plus retailers in the U.S. that sell Aqua Dots products.

In early November 2007, the CPSC received two reports of children falling comatose after swallowing large quantities of Aqua Dots. The evident cause of their comas was the adhesive coating on the beads: it was manufactured from 1,4 butanediol, an industrial solvent that the human body converts into the illegal drug gamma-hydroxy butyrate (GHB) upon ingestion, whereas it was supposed to have been manufactured from 1,5 pentanediol, a nontoxic compound found in glue.*fn1 Spin Master, in conjunction with the CPSC, accordingly announced a voluntary recall on November 7, 2007 of approximately 4.2 million Aqua Dots products manufactured for sale in the United States. Of those, 1,335,151 had already been sold to consumers. The CPSA recall notice instructed consumers to take all Aqua Dots products away from children immediately and to contact Spin Master to return them for free replacement beads or for a comparably priced replacement toy. The recall and the safety threat posed by Aqua Dots were widely publicized; many major national news programs, television morning shows, and newspapers such as the New York Times covered the story. Happily for the lead plaintiffs, they have no occasion to allege that their children ingested GHB, or were otherwise injured, by using their Aqua Dots toys.

As word got out, roughly 600,000 consumers returned their Aqua Dots, usually for a refund. Wal-Mart has refunded 154,372 Aqua Dots products; Target, 129,012; Toys "R" Us, 105,376; and other non-defendant retailers, 125,043. Spin Master has reimbursed the retailers for their outlays, and although it has provided only 66 refunds directly to consumers, there is no evidence that Spin Master has ever denied a cash refund to a consumer who asked for one. As the recall notice indicated it would, Spin Master has provided free replacement beads- rebranded under the name Pixos, after a roughly six-month delay-to 77,793 consumers, and it has exchanged 2,918 Aqua Dots products for replacement toys of comparable value. In all, refunds have been provided for 513,869 Aqua Dots products and remain available to this day: any consumer who returns an Aqua Dots toy to one of the defendant retailers, or who contacts Spin Master and provides adequate proof of purchase, can still obtain a cash refund for any Aqua Dots product subject to the recall. Not one lead plaintiff, however, has ever tried to return an Aqua Dots toy to Spin Master or to the store from which it was purchased.

Instead, the lead plaintiffs seek certification of fourteen proposed Rule 23(b)(3) classes, each consisting of consumers "who purchased or received one or more Aqua Dots toys, that were manufactured and/or distributed by Defendants subject to the recall announced by the CPSC on November 7, 2007."*fn2 The proposed classes fall into three general groups:

(1) A nationwide class alleging violations of the reporting requirements under the Consumer Product Safety Act;

(2) Nine single-state classes of consumers in Florida, Oklahoma, Pennsylvania, Texas, Illinois, New York, Kentucky, New Jersey, and California, asserting state-law claims under express and implied warranty theories, unjust enrichment, and state consumer protection statutes;*fn3

(3) Four multistate unjust enrichment subclasses, each purportedly composed of states with materially identical requirements, as follows (emphasis given to transferor states):

Subclass #1: Colorado, Connecticut, District of Columbia, Hawaii, Indiana, Iowa, Michigan, Mississippi, Nebraska, New ...


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