Turquoise Jewellery dispute

[SydneyOZ]

Recently visited the beautiful west coast USA in September and my wife purchased a pair of turquoise and silver earrings from a very upmarket shop in Oregon. On our return one of the earrings was damaged and we noticed the turquoise was white in the middle with a layer of blue on the outside. We suspected they were fake. (Possibly dyed howlite) Emailed the owner of the store and mailed them back for her inspection.
The store owner said there was nothing wrong with the stones and asked what we wanted her to do with earrings. We suggested that my son who lives 2 blocks from the store would collect them. Store owner became aggressive in her emails and said she would refund the money but would not return the earrings and never to contact her again. We should only discuss this with her attorney husband.
We demanded the earrings be returned and if they were not we would make a complaint with the State Consumer Protection Department in Oregon
Today we received, an Intention to Sue notice from hubby claiming we had harrassed his wife, a tresspass notice banning my wife and familly from entering the store and a threat that if we complained to the State Consumer Dept we would be sued for defamation.
Hubby attorney wants my son to travel to his far off office miles from my son's home to pick up the earrings with a signed authority from us.
We wrote back demanding the earrings be posted via registered mail or that my son walks to the store to pick them up.
Is this attorney husband bluffing with his threats or what? I can't believe that if we made a complaint about her to the authorities we could be sued.
Especially since we live in Australia.

He is bluffing and could never win such a suit. Sue them in small claims or report them as you indicated if you don't get satisfaction.