Subclasses Certified in Toys R Us Litigation

In McDonough et al. v. Toys R Us et al., Eastern Pennsylvania Judge Anita Brody certified five consumer subclasses, allowing purchasers of various baby products to proceed with the Sherman Act claims against Toys R Us and five baby-product manufacturers, including Baby Bjorn AB and Britax Child Safety Inc.  The original complaint alleged that Babies R Us threatened to drop certain popular lines from its stores if their manufacturers didn’t agree to block e-commerce retailers from offering the same products at lower prices, which constituted vertical price restraints, in violation of the Sherman Act.  In certifying the class actions, Judge Brody held that plaintiffs presented sufficient evidence that the price-fixing alleged against the defendants failed the Leegin test, which permits certain vertical price restraints, provided they don’t stifle the competition.

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