Lead Toys Class Action Defense Cases–In re Mattel: California Federal Court Denies Motion To Dismiss Class Action Complaint Holding Class Action Allegations Were Adequate Save For Federal CPSA Claim
Defense Motion to Dismiss Class Action Claim under Federal Consumer Protection Safety Act (CPSA) Granted but Remaining Claims in Class Action Adequately Pleaded and Survived Motion to Dismiss California Federal Court Holds
Plaintiffs filed a class action against numerous defendants, manufacturers and retailers of children's toys, alleging they “sold certain toys that were defective and unsafe, and made actionable representations about the quality of the products.” In re Mattel, Inc., Toy Lead Paint Products Liab. Litig., 588 F.Supp.2d 1111, 1114 (C.D. Cal. 2008). Specifically, the class action focused on three types of toys: “toys that were produced with allegedly unsafe levels of lead paint, toys that included small, swallowable magnets that allegedly pose a hazard to children, and a specific toy blood pressure cuff that allegedly contains high levels of lead, but is not specifically alleged to contain lead paint.” Id. The class action advanced numerous claims for relief, including violations of the federal Consumer Protection Safety Act (CPSA), and of California’s Consumers Legal Remedies Act (CLRA), unfair competition law (UCL), and Song-Beverly Consumer Warranty Act (CWA). Id. The class action defendants included Mattel and Fisher-Price (the “Manufacturer Defendants”), id. n.2, and Target, Toys “R” Us, Wal-Mart, KB Toys and Kmart (the “Retailer Defendants”), id. n.3. The Consumer Product Safety Commission ordered a recall of the lead paint toys and magnet toys, and the Manufacturer Defendants provided replacement toys to consumers. Id. Wal-Mart moved to dismiss the class action claims against it, and the remaining defendants filed a separate motion to dismiss the class action as to them. Id. The district court granted the motion in part, and denied the motion in part.
Defense attorneys first argued that the “a voluntary product replacement pursuant to a 16 C.F.R. § 1115.20 corrective action plan preempts state law remedies seeking reimbursement for an allegedly hazardous product.” In re Mattel, at 1115. The district court disagreed. The federal court explained that CPSC regulations permit a company to “submit a voluntary ‘corrective action plan’ to correct an alleged violation of the consumer product safety laws.” Id. (citing 16 C.F.R. § 1115.20(a)). However, the same regulations “explicitly state that actions taken in a voluntary corrective action plan have ‘no legally binding effect,’ and that the CPSC ‘reserves the right to seek broader corrective action.’” Id. (quoting 16 C.F.R. § 1115.20(a)). If preemption applied, as defendants argued, then a manufacturer could essentially “choose their own remedy to a CPSA violation with no guarantee for input from harmed parties…and little incentive on the part of the CPSC to ensure that the proposed remedy was completely adequate.” Id. (citation omitted). The district court therefore rejected the preemption argument, id., at 1116.