Toys 'R' Us Maclaren, Peg Perego, Medela, Baby Bjorn, Britax Face Class Action

Toys 'R' Us, Maclaren, Peg Perego, Medela, Baby Bjorn, Britax Face Class Action

Suit Alleges Price-Fixing With Manufacturers on Strollers, Other Products.
By JOSEPH PEREIRA

A federal judge granted class-action status to a consumer lawsuit that accuses a unit of Toys "R" Us Inc. and five manufacturers of conspiring to fix prices on a variety of baby goods, including strollers, high chairs, car seats and breast pumps.

Plaintiffs say prices on more than $500 million in baby products sold by Babies 'R' Us between 2001 and 2006 were controlled by minimum-pricing agreements. Above, a Toys 'R' Us/Babies 'R' Us store in Elizabeth, N.J..

Defendants in the case had sought to have it dismissed, relying in part on a 2007 U.S. Supreme Court ruling that minimum-pricing agreements between manufacturers and retailers were no longer inherently illegal, as they had been treated judicially for decades. The high court said the pacts could be lawful if consumer benefits -- such as better service -- outweighed the harm of paying higher prices.

The baby-goods suit, filed in U.S. District Court in Philadelphia two years ago, is unusual because similar price-fixing allegations have been thrown out by judges in the wake of the Supreme Court decision.

The suit seeks an unspecified amount in compensatory and punitive damages.

In her ruling Wednesday, U.S. District Court Judge Anita Brody said that while agreements "setting minimum resale prices can have pro-competitive justifications," the Supreme Court "stated that lower courts must be diligent in eliminating their anticompetitive uses from the market." Judge Brody also pointed out that in its decision the Supreme Court warned that minimum pricing agreements enforced by a "dominant retailer" could also be anticompetitive.

Plaintiffs argued that the Babies "R" Us unit of Toys "R" Us is such a retailer. Plaintiffs attorney Elizabeth Fegan said prices on more than $500 million in baby products sold by Babies "R" Us between 2001 and 2006 were controlled by minimum pricing agreements.

The other defendants named in the suit include: Maclaren Ltd. of the U.K.; Italy's Peg Perego SpA; Medela Inc., of Switzerland; Sweden's Baby Bjorn AB; the Britax Childcare unit of Carlyle Group LLC.
Plaintiffs said Babies "R" Us accounted for between 10% to 50% of the manufacturers' U.S. sales.
Toys "R" Us, based in Wayne, N.J., declined to comment. Officials at the manufacturers couldn't be reached.

Greg Gundlach, a marketing professor at the University of North Florida, who isn't involved with the case, estimates that consumers paid $85 million to $100 million more for the goods in question than they would have without pricing agreements. Mr. Gundlach said he based his estimate on a U.S. Department of Justice study in the mid-1970s that found consumers historically have paid between 19% to 27% more when vertical pricing agreements are implemented.
Write to Joseph Pereira at joe.pereira@wsj.com

Toys 'R' Us Faces Class Action - WSJ.com

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There could soon be new rights for breastfeeding mothers in New York State.The New York State Senate has just passed a bill that would require mothers to be informed of breastfeeding options before they deliver -- and while they're in the hospital. The bill would also give mothers the right to refuse any product samples or take-home packets of formula.

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Rights for Breastfeeding Mothers - 13WHAM.com - Rochester News, Weather, and Sports

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