Council of Watchers

Posted by Rebecca Tushnet

https://tushnet.blogspot.com/2025/05/omissions-based-deceptiveness-claims.html

Gamino v. Spin Master, Inc., No. ED CV 23-2242-DMG (SPx), 2025 WL 1421907 (C.D. Cal. Mar. 31, 2025)

California and New York residents sued the manufacturers of certain children’s toys they purchased, “Orbeez water beads,” alleging the water beads pose certain severe, undisclosed health hazards to children. “Water beads” are “tiny, spherical, and gelatinous toys that look strikingly similar to candy” and have gained immense popularity over the last decade. They’re made from superabsorbent polymers that expand up to 1,500 times their original size when exposed to water. “They are often marketed as sensory toys for children who are young or who suffer from developmental conditions to squish and move around to aid in their fine motor development.”

However, because they swell when exposed to fluid, “water beads pose severe health risks to children who ingest or insert the beads into their bodies, unless the beads are identified and surgically removed. This can cause injuries such as intestinal blockage or obstruction of the nasal cavity, ear canal, or respiratory system.” Worse, they’re “practically invisible” on x-rays. Plaintiffs alleged “several thousand reported water beads-related hospitalizations of children across the country, per year, since at least 2017, including several reported deaths.”

Each product has a warning for a choking hazard and instructions to keep the product away from children under 3 and pets. Also, each product except one also includes a “CAUTION: DO NOT EAT” warning or an illustration indicating not to eat the product. A few Orbeez products also include “do not insert Orbeez into nose or ear” warnings. See, e.g., id. at 6.2

Spin Master argued that no reasonable consumer could have been misled because the front packaging features prominent warnings about the dangers of eating Orbeez. “But such warnings do not capture the essence of the hazards alleged.” Plaintiffs alleged that “there is a severe risk of harm if children insert a water bead into their body other than by eating it—for instance inserting a water bead into their ear or nose,” citing an allegation about a child who suffered profound hearing loss after inserting a water bead into her ear, where it grew in size and was undetected for 10 weeks.

“A choking hazard warning could reasonably be interpreted by a consumer to suggest that if a child swallows a water bead without immediately choking, the child is no longer in danger.” But the complaint alleged that choking wasn’t the only danger, citing incidents in which children suffered severe harm or even death after ingesting or aspirating water beads, including incidents in which there was a delayed onset of symptoms coupled with the inability of x-rays to detect the ingested bead lodged in the child’s body. Even “do not eat” warnings coupled with “choking hazard” warnings could plausibly mean, to a reasonable consumer, that the choking hazard was the reason not to eat the beats.

However, the NY consumer protection claims were dismissed because plaintiffs could reasonably have obtained the information from other sources. Under NY law, an omissions-based claim requires that “the business alone possesses material information that is relevant to the consumer and fails to provide this information.” The complaint itself showed that Spin Master wasn’t alone in possessing information about the hidden dangers of the products, including the Consumer Products Safety Commission’s publicly available databases [ed. note: for now!]. “Consumers and parents have also allegedly denounced water beads for over a decade, including a parent who runs a non-profit organization to educate the public about the dangers of children playing with water beads.”

By contrast, in DeCoursey v. Murad, LLC, 673 F. Supp. 3d 194, 218 (N.D.N.Y. 2023), plaintiffs alleged an eye product contained color additives unsafe for the eye area, citing FDA regulations prohibiting color additives. “A consumer could not reasonably have learned of the danger, as the consumer would have had ‘to research the regulation for each specific additive and cross-reference the general FDA regulation that color additives may not be used unless the specific regulation for the color additive permits use in the eye area.’” And Kyszenia v. Ricoh USA, Inc., 583 F. Supp. 3d 350 (E.D.N.Y. 2022), involved only complaints on a “handful” of websites.

However, the plaintiffs did plead a duty to disclose under California law, which requires “(1) the existence of a design defect; (2) the existence of an unreasonable safety hazard; (3) a causal connection between the alleged defect and the alleged safety hazard; and that the manufacturer knew of the defect at the time a sale was made.”

The court dismissed equitable relief claims, though not claims for injunctive relief, and also kicked out claims for unjust enrichment, negligent misrepresentation, NY fraudulent inducement but not California fraudulent inducement, and express/implied warranty claims (because a failure to disclose can’t be an affirmation of fact or promise by a seller that becomes part of a bargain).

https://tushnet.blogspot.com/2025/05/omissions-based-deceptiveness-claims.html