in december 1999, the equal rights center (terc) and two black customers filed a federal lawsuit against kb toys over one of the company's policies in which personal checks could not be used to pay for purchases at certain stores that experienced unusually high rates of returned checks. terc alleged that kb toys' policy was discriminatory against black people, stating that the policy was enforced at eight stores in predominately black neighborhoods located in the baltimore–washington metropolitan area. kb toys denied the allegation, and stated that racial demographics were not a consideration when enacting the policy 13 years earlier. the company further stated that checks from white people were also not accepted at the stores specified in the lawsuit. by march 2000, the lawsuit had been amended to include three additional black plaintiffs, and the suit sought damages as well as an end the company's check-writing policy. in january 2001, a u.s. district judge removed terc from the case as it was not affected by kb toys' check-writing policy. the lawsuit continued into 2003.