In Re Aqua Dots Products Liability Litigation
2011 U.S. App. LEXIS 17039
| 7th Cir. | 2011Background
- Aqua Dots beads used adhesive substituted by Chinese producer, making ingestion harmful as it metabolizes to GHB.
- Beads resemble candy; children potentially swallow them; medical risk included nausea, dizziness, coma, death.
- Spin Master recalled the product; recall urged returns for refunds or exchanges; refunds honored where requested.
- Plaintiffs purchased Aqua Dots without injury to their children and challenged recall adequacy under multiple theories.
- Twelve suits transferred to N.D. Ill.; district court denied class certification; Seventh Circuit granted interlocutory appeal under Rule 23(f).
- Seventh CircuitAffirmed district court’s decision, emphasizing standing, Rule 23 text, adequacy, manageability, and notice considerations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of plaintiffs | Plaintiffs have financial injury from paying more for toys due to undisclosed risk. | No injury since no child was harmed by swallowing beads. | Plaintiffs have standing based on financial injury. |
| Rule 23(b)(3) superiority vs 23(a)(4) adequacy | Class action is superior; recall is inadequate as remedy. | Recall already provides refunds; class action unnecessary and burdensome. | Textual rule controls; class not certified because adequacy and practical concerns undermine typicality and commonality. |
| Manageability of a nationwide punitive-damages class | A single class is feasible for compensatory relief and punitive claims. | Different states' punitive-damages rules make nationwide certification inappropriate. | Not maintainable due to liability variability across states and administration difficulties. |
| Notice and ascertainability concerns | Class members could be identified via purchase records and notices could be sent. | Most purchases anonymous; per-buyer notice would be impractical and costly. | Significant practical barriers to notice and opt-out undermine certification. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires injury, causation, and redressability)
- Clinton v. New York, 524 U.S. 417 (1998) (financial injury suffices for standing)
- Bryant v. Yellen, 447 U.S. 352 (1980) (economic injury supports standing)
- Selevan v. New York Thruway Authority, 584 F.3d 82 (2d Cir. 2009) (standing and injury standards in consumer contexts)
- Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (textual rule 23 governs class actions over policy goals)
- Erica P. John Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179 (2011) (Supreme Court emphasizes adherence to Rule 23; policy not a substitute)
- In re Bridgestone/Firestone, Tires Prods. Liab. Litig., 288 F.3d 1012 (7th Cir. 2002) (nationwide classes not certified when state-law variability exists)
- Hess Oil Virgin Islands Corp. v. Amalgamated Workers Union of Virgin Islands, 478 F.2d 540 (3d Cir. 1973) (advisory committee notes inform Rule 23 understanding of 'adjudication')
- Thorogood v. Sears, Roebuck & Co., 627 F.3d 289 (7th Cir. 2010) (various ways class actions may fail to protect the class interests)