Toys
'R' Us Class Action
The complaints in these cases alleged that Toys "R" Us entered into vertical agreements with numerous toy manufacturers and orchestrated a horizontal agreement among these same toy manufacturers to limit the supply of certain popular toys to low cost, no-frills, membership fee retail outlets, commonly known as warehouse clubs. In addition to Toys "R" Us, the complaints allege claims against various toy manufacturers including Toys "R" Us, Inc., Mattel, Inc., Tyco Industries, Inc., Fisher-Price, Inc., Little Tikes, Inc., Binney & Smith, Inc., Huffy Corporation, Just Toys, Inc., Lego Systems, Inc., Rubbermaid, Inc., Sega of America, Inc., Tiger Electronics, Inc., Today's Kids, Inc. and VTek, Industries, Inc., LLC.
The allegations against these defendants were bolstered by the findings of the Federal Trade Commission ("FTC"). In a decision issued September 27, 1997, an FTC Administrative Law Judge found that Toys "R" Us had used its dominant position as a toy distributor to extract agreements from and among toy manufacturers to stop selling to warehouse clubs the same toys that they sold to other toy distributors and that Toys "R" Us had orchestrated a group boycott among the toy manufacturers of their toy sales to the Warehouse Clubs. On October 14, 1998, this decision was upheld by the full Commission.
As a result of mediation proceedings conducted by the Honorable Charles B. Renfrew, former United States District Court Judge, a settlement was reached. The total value of the settlement was approximately $56 million, consisting of over $20 million in cash and over $36 million in toys. Over the next three years, the toys will be distributed nationwide during the holiday season to needy children through the United States Marine Corps' Toys for Tots program.
After the payment of attorneys fees and costs, the balance of cash was distributed nationwide to state agencies and/or non-profit organizations and used to purchase educational materials for children and/or to fund other child-oriented programs, which, but for the settlement monies, would not otherwise be purchased or funded. The U.S. District Court granted final approval to the settlements in February 2000.
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