Judge Denies Proposed Settlement of DirectBuy Class-Action Suit

A Connecticut federal judge has rejected as "meager" the proposed settlement of a nationwide, class-action lawsuit against DirectBuy Inc. for fraudulent pricing practices.

"The court cannot conclude that this settlement falls within the range of reasonableness," U.S. District Judge Janet C. Hall said yesterday in a written opinion.

Judge Hall explained her decision by noting that the proposed settlement called for DirectBuy to provide free memberships worth some $3,000 each to approximately 800,000 class members.

"The best possible recovery...may amount to well over $2 billion," Judge Hall wrote. "In light of this best possible recovery, the Settlement Agreement -- which the court has calculated as being worth, at most, between $15 million and $27 million -- appears quite small."