Final Approval for Babies “R” Us Price-Fixing Class Action Settlement

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Nine years after the Babies “R” Us price fixing class action lawsuit was filed, a Pennsylvania federal judge has granted final approval to the $35.5 million class action settlement, which will now be able to fund more than 1.1 million claims.

U.S. District Judge Anita Brody said in the ruling that the Babies “R” Us class action settlement resolves the problems with the initial settlement reached in 2010, which some class members claimed gave too much toward attorneys’ fees, administrative expenses, and charitable distributions, but not enough to the allegedly injured customers, leaving class members with a net $3 million.

The Babies “R” Us price-fixing class action settlement was “vacated” by the third circuit court of appeals in 2013. The current version of the settlement was granted by Judge Brody in May 2014.

The appellate court removed the cy pres charitable distributions from the Babies “R” Us class action settlement, which now leaves class members almost $18 million.

In addition, Judge Brody reduced the attorney fees from $11.8 million down to $11.09 million. The attorneys representing the class were also given more than $2.2 million to cover expenses incurred as a result of the class action lawsuit.

The Babies “R” Us class action lawsuit was filed on Jan. 19, 2006 against Toys “R” Us (d/b/a Babies “R” Us) by a group of Babies “R” Us customers, who alleged that the baby product retailer had violated the Sherman Act Anti-Trust Act by conspiring with Defendant Manufacturers to restrict competition by requiring all retailers to sell their goods at or above a minimum resale price.”

As a result of the alleged conspiracy, the Babies “R” Us customers claimed “they paid inflated prices for baby products.”

The Babies “R” Us class action lawsuit was granted class certification in July 2009, restricting the subclasses to begin when the class action lawsuit was originally filed, which led other Babies “R” Us customer to file a second class action lawsuit over alleged price-fixing.

The two price-fixing class action lawsuits were consolidated in August 2011.

After the initial Babies “R” Us class action settlement was abandoned by the appellate court in February 2013, the new class action settlement agreement was reached in December 2013.

The class action lawsuit alleged that the price fixing prevented Babies “R” Us competitors from selling certain baby products at a discounted price and led to inflated prices for the affected products, which class members claim they were overcharged for due to the collusion between the retailer and baby product manufactures.

Specifically, the price-fixing class action lawsuit alleges that Babies “R” Us colluded with BabyBjorn, Britax, Kids Line, Maclaren, Medela, Peg Perego, and Regal Lager.

The consumers are represented by Hagens Berman Sobol Shapiro LLP, Spector Roseman Kodroff & Willis PC and Wolf Haldenstein Adler Freeman & Herz LLC.

Objecting class member Kevin Young is represented by Theodore H. Frank of the Center for Class Action Fairness. Objecting class member Allison Lederer is represented by James H. Price of Lacy Price and Wagner PC. Counsel information for objector Susan House was not available.
Toys R Us is represented by Reed Smith LLP.

The Two Babies “R” Us Price Fixing Class Action Lawsuits are McDonough et al. v. Toys R Us et al., Case No. 2:06-cv-00242, and Elliott et al. v. Toys R Us Inc. et al., Case No. 2:09-cv-06151, both in the U.S. District Court for the Eastern District of Pennsylvania.