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Baker &Taylor, Grace Settle Overcharging Suits
Jim Milliot -- 8/7/00
Wholesaler and former parent company pay more than
$15 million to the federal government and 18 states




After a five-year investigation by the Justice Department, and with no end to the probe in sight, Baker & Taylor and its former parent company, W.R. Grace, have agreed to settle charges that the wholesaler overcharged schools, libraries and government agencies on book sales for more than a decade.

Under the agreement, Grace will pay $3 million to the federal government to resolve all claims against the company, while Grace and B&T will jointly pay $12.5 million to 18 states that were co-plaintiffs in the lawsuit. Last summer, B&T reached its own $3-million settlement with the Justice Department (News, July 12, 1999). The newest settlement releases B&T from claims made by all state plaintiffs related to alleged violations of the law. Neither Grace nor B&T admitted to any wrongdoing. "We are happy to close this unfortunate chapter in the 172-year history of Baker & Taylor," Jim Ulsamer, president of B&T Retail, said in a statement.

The lawsuit, filed under the False Claims Act, charged that B&T agreed to provide discounts of 40% on trade books sold to institutions, but then failed to provide the full discounts by misclassifying trade titles into nontrade categories. Ulsamer noted that under the consent decree, B&T is not required to change any of its business practices. Given that the company faced a prolonged legal discovery process by all 18 states, management decided that agreeing to the settlement "was a more prudent alternative," Ulsamer said, adding, "While we won't have the satisfaction of being exonerated through the courts, this settlement--like the federal settlement--makes sound business sense."

The suit was originally brought by two whistleblowers, Robert Costa, head city librarian for Richmond, Va., and Ronald Thornburg, a former B&T sales rep. The two reportedly will receive a portion of the settlement.
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