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Makers of Toxic Aqua Dots Dodge Class Action

CHICAGO (CN) - The 7th Circuit declined to certify a class seeking refunds and damages over their purchase of later-recalled Aqua Dots, colored beads that fused into designs when sprayed with water.

The toy was manufactured by Australian-owned Moose Enterprise and distributed in the United States by Spin Master. More than 12 million packets of Aqua Beads were distributed across 40 different countries.

The beads were supposed to be nontoxic, since "it was inevitable given the age of the intended audience and the beads' resemblance to candy ... that some would be eaten," Chief Judge Frank Easterbrook explained.

But instead of using nontoxic, 1,5-pentanediol, the Chinese company charged with manufacturing Aqua Beads substituted 1,4-butanediol. When ingested, the chemical metabolized into gamma-hydroxybutyric acid, a compound that causes dizziness, drowsiness, seizures and unconsciousness. At least two children fell into Aqua Bead-induced comas.

Spin Master immediately recalled the product, offering nondefective replacement kits or comparably priced toys in exchange. Though the notice of recall did not mention refunds, more than 500,000 money-back requests were honored.

Of the one million kits sold in the United States, 600,000 were returned. Another three million were pulled from distribution before sale. Spin Master believes that few, if any, kits remain in consumers hands.

Despite the recall, five parents initiated a class action against Spin Master, Moose Enterprises and several distributors of the toy, seeking a full refund and punitive damages.

But U.S. Judge David Coar declined to certify the class, concluding that consumers would be better off returning their products for a refund than pursuing litigation that would simply add cost to the already existing remedy.

The 7th Circuit affirmed. The plaintiffs in the case, whose children were not harmed and who did not seek refunds, are not proper champions of class members' interests, the court ruled.

"The plaintiffs could have had refunds - and still can have them today," Easterbrook wrote. "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' interests. ... The principal effect of class certification, as the district court recognized, would be to induce the defendants to pay the class's lawyers enough to make them go away; effectual relief for consumers is unlikely."

A nontoxic version of the product, rebranded as Pixos, remains on the market today. The product's website prominently features safety information that takes care to differentiate Pixos from their ill-fated predecessors.

"Pixos"! are a new product from Spin Master that offer the same great play as [Aqua Dots], but with an entirely new bead formulation and industry-leading safety standards developed in association with a team of chemists, toxicologists and leading toy-testing firms," the site states.

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