Castles in the air: magnetic toys' performance in doubt

PlastWood SRL v. Rose Art Industries, Inc., 2007 WL 3129589 (W.D. Wash.)

The parties compete in the market for magnetic construction toy sets. Plaintiffs are an Italian corporation and its Delaware subsidiary, while defendant MEGA Brands is a Canadian corporation with a New Jersey subsidiary, Rose Art. The court dismissed MEGA Brands for lack of personal jurisdiction, though the claims against Rose Art remained.

Rose Art makes Magnetix, small plastic building blocks held together by magnetism. The ads and packages say that users can build many structures – “500 designs” – with the blocks, while plaintiff argues that in fact many of those structures are unbuildable and will collapse under their own weight.

Following on recent recalls, plaintiff also alleges that the “Ages 3 to 100” claim on Magnetix packaging misrepresents safety, since the magnetic beads “spontaneously release and can cause severe injury if inhaled or ingested.”

The court ruled that this latter claim was precluded by the Child Safety Protection Act (CSPA). The CSPA sets out labeling requirements for certain toys and games, but doesn’t create a private right of action (and preempts non-identical state and local regulation of small parts hazards labeling). The Consumer Product Safety Commission is responsible for enforcing the CSPA. (Doing a bang-up job, by the way.)

Failure to comply with the CSPA does not, therefore, qualify as a false or misleading statement under the Lanham Act. And plaintiff’s claim against the label “Ages 3 to 100” is really an attempt to impose a standard inconsistent with the CSPA. (I needed more explanation to follow this. Does the defendant’s labeling comply as a matter of law with the CSPA? If it’s possible for the product to be mislabeled, then it seems like we have a scenario often explored with the FDCA, in which there is room for Lanham Act claims, even Lanham Act claims that use FDA standards to define truth or falsity. This may be the right result, but the court just moved too fast over the specifics – especially since the statute clearly contemplates private causes of action based on state or local laws that impose identical standards.)

Plaintiff’s “collapsing structures” claim, however, survived. Defendant argued that under Rule 9(b) plaintiff needed to identify which depicted structures collapse. The court rejected the premise: cases applying Rule 9(b) to Lanham Act claims did so only in response to specific allegations of fraud or facts necessarily constituting fraud, which isn’t the case here. A short and plain statement that defendant overstated the qualities or capabilities of its product is sufficient.