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Court Upholds Decision in New Jersey Division of Consumer Affairs’ Lawsuits

NEWARK – The Superior Court, Appellate Division, has upheld an earlier decision in favor of the New Jersey Division of Consumer Affairs, in the Division of Consumer Affairs’ separate lawsuits against an Indiana company and a Rhode Island company that together sold nearly 14,000 yo-yo waterballs to consumers here despite a 2008 state law banning the dangerous toys.

The Division of Consumer Affairs filed suit in June 2009 against Indiana Novelty International, Inc., which does business as Kipp Brothers and which sold 444 yo-yo waterballs in New Jersey after the State’s ban on the toys took effect. The Division in December 2009 sued Rhode Island Novelty, Inc., also known as RINCO, which sold 13,344 yo-yo waterballs in New Jersey after the State’s ban took effect.

The Superior Court of New Jersey, Chancery Division, ruled against both companies in the separate cases. Indiana Novelty International, Inc., was ordered in August 2010 to pay $54,300 in civil penalties, plus reimbursement to the State for $13,000 in attorneys’ fees and investigative costs. Rhode Island Novelty, Inc., was ordered in December 2010 to pay $190,000 in civil penalties plus reimbursement to the State for $12,000 in attorneys’ fees and investigative costs.

On December 20, 2011, the Appellate Division upheld both decisions, ruling the defendants’ appeals were without merit. The defendants did not dispute their sales of the potentially dangerous toys after they were banned, but argued that the penalties imposed were excessive; and that the Division of Consumer Affairs erred in failing to allow a “grace period” before enforcing the Yo-Yo Waterballs Act.

The Appellate Division noted in each decision that the penalties imposed were lower than the maximum penalty allowed by the Yo-Yo Waterballs Act, of $10,000 for the first offense and $20,000 for each subsequent offense. Regarding the defendants’ argument that there should have been a “grace period,” the Appellate Division noted that the Act became law on January 3, 2008, but did not become effective until April 1, 2008, and that the Division was not obligated to notify every potential seller of yo-yo waterballs before enforcing the ban.

“We are talking about toys that have been known to wrap around the throats of young children, causing strangulation,” Thomas R. Calcagni, Director of the Division of Consumer Affairs, said. “Anyone who sees a banned yo-yo waterball offered in New Jersey for sale, as a prize, or as a gift should contact us immediately. Businesses can promote children’s safety simply by following the law and not selling these dangerous toys in New Jersey.”

Yo-yo waterballs are inexpensive toys that include a rubber ball filled with liquid attached to a rubber cord. The cord has a finger loop on its end and can stretch about three feet when swung. In some instances, the stretched cord has wrapped around children’s throats, cutting off the child’s ability to breathe.

On June 3, 2008, then five-year-old Sydney Blacker of Scotch Plains suffered strangulation injuries from a Kipp Brothers yo-yo waterball she received at her school fair. The toy had been purchased from Kipp Brothers by her school’s Parent Teacher Association in May, after the Yo-Yo Waterballs Act went into effect. Sydney sustained burst blood vessels before her mother was able to remove the wrapped cord from around her neck.

Investigator Aziza Salikhov conducted the investigation on behalf of the Division of Consumer Affairs and its Office of Consumer Protection. Deputy Attorney General Jah-Juin Ho of the Consumer Fraud Protection Section represented the State in this action.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200.


 

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