Attorney General Lockyer Announces $15.5 Million Multi-state Settlement With Book Distributor Baker & Taylor, Inc.

False Claims Case Will Provide Refunds to Libraries

Wednesday, August 2, 2000
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

(SACRAMENTO) – Attorney General Bill Lockyer today announced a $15.5 million multi-state settlement with the book distributing company, Baker & Taylor, Inc. and its former owner, W.R. Grace & Co., over allegations that they purposely overcharged school and public libraries for books.

"California libraries have struggled to stretch their dollars to help educate our school children and make as many books as possible available to the public," Lockyer said. "This fraudulent pricing scheme didn't just rip off our libraries - it victimized our children and our schools. The settlement money will be used to help refund those who were bilked by this company."

The settlement resolves a false claims case initially investigated and prosecuted by the California Attorney General and the United States Department of Justice. The lawsuit was later joined by seventeen other states. The lawsuit alleged that Baker & Taylor concocted a scheme to purposely overcharge school and public libraries for books purchased over a 13-year period. According to the lawsuit filed in the U.S. District Court in San Francisco, book publishers sold certain types of books, known as trade books, to Baker & Taylor at a large discount from the list price. In its contracts with school and public library customers, Baker & Taylor promised to pass along most of that discount to the libraries. However, beginning in 1980, the company adopted a massive "profit enhancement" scheme to secretly remove thousands of books from the "deep discount" list forcing libraries to pay more than the agreed upon price for books.

Under the terms of the settlement, California will receive $4 million, the United States $3 million and the other 17 states will share the remaining $8.5 million. In California, hundreds of libraries were victimized by Baker & Taylor's pricing scheme, including local public libraries, K-12 school libraries, and college and university libraries. Upon approval of the settlement by the court, California libraries will be able to submit claims to an independent administrator to receive refunds. The Attorney General is notifying many libraries that they will be receiving refunds (see attached list) and all other libraries will be notified that they will be able to submit claims by November 1, 2000 to receive refunds from the claims administrator.

The 17 states that joined California in the lawsuit are: Arkansas, Connecticut, Florida, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Missouri, Nevada, New Mexico, North Carolina, Oklahoma, Tennessee, Texas, Vermont and Wisconsin.

LIST OF SCHOOL AND PUBLIC LIBRARIES THAT HAVE ALREADY SUBMITTED CLAIMS AND WILL RECEIVE REFUNDS (partial list)

AK Smiley Public Library
Alhambra Public Library
Arcadia Public Library
Auburn Placer County Library
Berkeley Public Library
Burlingame Public Library
City of Chula Vista
City of San Rafael
City of Oxnard
City of Rancho Cucamonga
City of Mountain View
City of Livermore Library
Corona Public Library
Coronado Public Library
El Dorado County Free Library
El Segundo Public Library
Escondido Public Library
Fresno County Free Library
Fullerton Public Library
Glendora Public Library
Kern County Library
Los Angeles Public Library
Marin County Free Library
Mendocino County Library
Mill Valley Public Library
Monterey Public Library
Napa City County Public Library
Newport Beach Public Library
Ontario Public Library
Orange County Public Library
Orange Public Library
Palm Springs Public Library
Palo Alto City Library
Palos Verdes Library District
Redwood City Public Library
Roseville Public Library
San Bernardino Public Library
San Diego County Library
San Diego Public Library
San Francisco Public Library
San Jose Public Library
San Mateo County Library
San Mateo Public Library
Santa Cruz Public Library
Solano County Library
South San Francisco Public Library
Torrance Public Library
Tulare County Free Library

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