Settlement Proceeds Donated to Red Cross

by TChris

In 1991, hundreds of retail stores sued three companies for conspiring to drive up the price of infant formula. Pursuant to a 1993 settlement agreement, $91 million was paid to consumers who were victimized by the conspircy. Another $940,000 was set aside to pay late claims. As of 2000, after payment of expenses, $700,000 remained in the settlement fund.

Judge Maurice Paul in Tallahassee ruled at that time that the remaining money should be distributed "for a purpose similar to that represented by those who sued." His reasoning may be stretched, but his heart was in the right place when he ruled on Sept. 8 that the money should be donated to the Red Cross to benefit Hurricane Katrina survivors.

"The complaint in this case alleged injury to consumers of infant formula, through alleged unfair pricing," he wrote. "Likewise, one of the challenges faced by rescue workers in the areas affected by Hurricane Katrina is providing essential food and drink to the victims of the storm.

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    Re: Settlement Proceeds Donated to Red Cross (none / 0) (#1)
    by Lww on Sat Dec 17, 2005 at 01:03:58 PM EST
    How much of the $91 million/$45.5 million did the lawyers give? Just curious.....

    Re: Settlement Proceeds Donated to Red Cross (none / 0) (#2)
    by Edger on Sat Dec 17, 2005 at 01:03:58 PM EST
    The Red Cross’s extraordinary response to Katrina has reached hundreds of thousands of people, including providing financial assistance to 236,000 victims and serving 9.2 million hot meals, as of Friday. But aid to some of the less obvious areas of need has been so lacking that Boston-based Oxfam America, citing massive institutional failure, has gone into Mississippi and Louisiana to administer aid directly inside the United States for the first time in its history.
    ‘So Desperate’ WEB EXCLUSIVE By Susannah Meadows Newsweek Updated: 12:33 p.m. ET Sept. 17, 2005

    Re: Settlement Proceeds Donated to Red Cross (none / 0) (#3)
    by cpinva on Sat Dec 17, 2005 at 01:03:58 PM EST
    i remember that well. at the time, my son was an infant, and i recall standing in the grocery store and, accountant that i am, noticing that every brand of formula had the exact same price, not even a penny's difference between them. i also recall thinking that the odds of that being mere coincidence were pretty damn slim, and that, were i a cynical person, price fixing seemed to be on tap. before i was able to contact the state attorney general, and voice my concerns, i learned that a class action suit against the manufacturers had been commenced. to no one's surprise, the manufacturers came (reasonably) quickly to the settlement table. oddly enough, i don't remember seeing the standard ads soliciting responses for those who felt they'd been harmed. as a consequence, we never received a penny. but, i note that the lawyers made sure, as usual, that they got their's up front. frankly, i've never been all that impressed with the red cross, starting early on. i'll tell you why. my father served in korea, in the 1st marine division. while there, he was charged for coffee & donuts by the red cross, in a combat zone. further, my older brother was born while he was there. somehow, the red cross was not able to locate his unit and advise of him this, he found out a month or so later, upon receiving the news by letter, from my mom. this seemed to be unique to the marines in korea, the red cross always seemed to manage to find army units. admittedly, he also received a nasty letter from his local draft board, in NYC, that he was in big trouble for neglecting to apprise them of his current address. he immediately offered to go back home and discuss the situation with them. his CO didn't feel that would be necessary, but his whole unit got a big chuckle out of it. ineptness seems to have many relatives.