Bloomberg News reports on Center for Class Action Fairness' objection to the Toys 'R" Us settlement that granted a lot of money to the attorney's, while paying back consumers a much smaller amount.
The U.S Court of Appeals in Philadelphia said in a ruling yesterday that the distribution may be unfair to consumers who would see $3 million under the accord while the attorneys would get $14 million in fees. The remaining $18.5 million would go to charities.
“The settlement has resulted in a troubling, and, according to counsel for the parties, surprising allocation of the settlement fund,” the judges said. “Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite.”
The settlement stems from antitrust lawsuits filed in 2005 and 2006 by consumers and Internet retailers, including Babyage.com Inc., claiming that Babies “R” Us conspired with baby-product manufacturers to limit discount pricing on certain items. The retailers claimed Toys “R” Us threatened to cut off supplies if they charged less than agreed upon minimum prices. Consumers said the company’s actions caused them to pay inflated prices.
Read the full article at Bloomberg News.