Judge Grants Class-Action Status to Price-Fixing Suit Against Babies “R” Us

Babies “R” Us customers suing the retailer for allegedly conspiring with product makers to keep Internet retailers from discounting products have been granted class-action status by a federal court judge.

The ruling by Judge Anita Brody of the U.S. District Court for the Eastern District of Pennsylvania effectively opens the door for possibly thousands of Babies “R” Us customers nationwide to collectively sue the nation’s largest seller of baby products.

Thirteen Babies “R” Us customers sued the retail giant in 2006 claiming the company forced manufacturers to enforce rules preventing Internet-based retailers from offering the same products at steep discounts. Those policies, according to the customers’ lawsuit, resulted in consumers having to pay artificially inflated prices on a variety of children’s products and violated federal antitrust laws.

Price-Fixing Conspiracy Alleged

Babies “R” Us forced customers to pay inflated prices because the company feared competition from Internet sellers, who could otherwise sell the same products cheaper, according to the customers’ lawsuit. Product manufacturers allegedly were required to abide by the company’s price-fixing policy in order to have their products placed in Babies “R” Us stores.

The class-action suit names as defendants Toys “R” Us, the parent company of Babies “R” Us, and several product manufacturers who allegedly conspired with Babies “R” Us to maintain the inflated prices.

Class-Action Factors Met

Judge Brody granted the customers’ suit class-action status after ruling that the plaintiffs showed that they could use common evidence, not specific for any one class member, to support their claims that the defendants violated the Clayton Act, which allows those harmed by antitrust activity to sue.

The plaintiffs also sufficiently demonstrated that all class members complain of similar misconduct, requiring only common evidence, the judge said.

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