In 2007, Spin Master Ltd. recalled more than four million Aqua Dots toys in the United States after discovering the product’s Chinese manufacturer mistakenly substituted 1,4 butanediol for the adhesive 1,5 pentanediol. When ingested, 1,4 butanediol metabolizes into gamma-hydrobutyric acid (GHB), otherwise known as the date rape drug. Reportedly, two children in the U.S. and three children in Australia were hospitalized after ingesting the product. We are guessing this is not what Wal-Mart had in mind when it deemed the product one of its “Top 12 Toys of Christmas.”
Not surprisingly, coating a child’s toy with a pre-metabolized date rape drug resulted in some legal action against the company and the product’s major retailer, Wal-Mart. Recently, in Aqua Dots Products Liability Litigation, — F. 3d —-, 2011 WL 3629723 (7th Cir. August 17, 2011), the Seventh Circuit issued an opinion regarding class certification in the multi-district litigation. The proposed class did not sue Spin Master due to any physical injury the plaintiffs suffered from the butanediol-coated toys. Rather, the plaintiffs elected not to pursue a refund from the distributor and challenged the adequacy of the company’s recall program. The District Court for the Northern District of Illinois, relying on Federal Rule of Civil Procedure 23(b)(3), denied the plaintiffs’ motion to certify the class holding that it would be more advantageous for the plaintiffs to return their products for a refund rather than pursuing litigation and racking up attorneys’ fees. Not happy with this result, the plaintiffs filed an interlocutory appeal.
The Seventh Circuit criticized the district court’s interpretation of Rule 23(b)(3). According to the rule, class certification is proper when “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” While it recognized the district court’s objective, the Seventh Circuit did not equate a recall campaign with a form of adjudication. Apparently, that three-judge panel has never attempted to return a product to Wal-Mart.
While the Seventh Circuit disagreed with the district court’s reasoning under Rule 23(b)(3), it ultimately agreed with the court’s decision – albeit under Rule 23(a)(4). Under Rule 23(a)(4), a court may certify a class action only if “the representative parties will fairly and adequately protect the interests of the class.” On that point, the Seventh Circuit had this to say:
Plaintiffs want relief that duplicates a remedy that most buyers already have received, and that remains available to all members of the putative class. A representative who proposes that high transaction costs (notice and attorneys’ fees) be incurred at the class members’ expense to obtain a refund that already is on offer is not adequately protecting the class members’ best interests.
There is no question about the inherent dangers of exposing young children to the date rape drug; however, it is nice to see a court stand up for a company who has acted reasonably under the circumstances. Spin Master acknowledged that a mistake had been made and took a reasonable course of action to remedy that mistake. Unless the proposed class can demonstrate some long-term physical harm due to 1,4 butanediol exposure, the only damage these plaintiffs have suffered is the time spent returning the product.
To be fair, we here at Abnormal Use have also had to return products a time or two and can attest to the hassle. Getting in the car, driving to the store, and – dare we say – waiting in line all amounts to time better spent doing anything else. It’s torture for sure, but somehow we endure. Even with the perils of this arduous task, however, we will gladly do it ourselves instead of paying a plaintiff’s attorney a 30 percent take to do it for us.
Tip of the hat to our friend, Ted Frank at the Point of Law blog for alerting us to this opinion.