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McDonough v. Toys “R” Us, Inc.

638 F. Supp. 2d 461 (2009)

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McDonough v. Toys “R” Us, Inc.

United States District Court for the Eastern District of Pennsylvania
638 F. Supp. 2d 461 (2009)

  • Written by Heather Whittemore, JD

Facts

Babies “R” Us (BRU) (defendant) was a retail chain that sold baby products across the United States. In the early 2000s, BRU was the dominant retailer of baby products. Later, internet retailers began competing with BRU by offering discounts on baby products. To maintain its dominance, BRU threatened to stop carrying products from manufacturers unless the manufacturers agreed to block the internet retailers from offering discounts on the manufacturers’ products. As a result, manufacturers agreed to enforce resale-price minimums against the internet retailers, preventing the internet retailers from offering discounts that BRU could not match. A group of consumers (collectively, the consumers) filed a lawsuit under § 4 of the Clayton Act against BRU, claiming that BRU conspired with baby-product manufacturers to restrict competition in the relevant market in violation of § 1 of the Sherman Act. The consumers believed that BRU’s actions resulted in higher prices for baby products because BRU did not have to lower its prices to meet the discounts offered by the internet retailers. The consumers moved for class certification under Federal Rule of Civil Procedure 23(b)(3).

Rule of Law

Issue

Holding and Reasoning (Brody, J.)

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Antitrust

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