Tuesday, July 28, 2015

Another Big Payout by RoRo Cargo Shipping Line in Antitrust Class Action Settlement

But Will All the End Users Get the Benefit?
Shipping News Feature

US – JAPAN – Attorneys representing a group of plaintiffs including freight forwarding groups involved in antitrust claims against more than a dozen international shipping firms have reached a settlement with Japanese RoRo cargo carrier, K Line which had already been fined over $67 million. The plaintiffs, which include the indirect purchasers of millions of vehicles transported to the United States as well as car, truck and equipment dealerships, claimed that Tokyo-based K-Line and other maritime carriers unlawfully conspired in a cartel to rig bids, fix prices and overcharge for their services. Now it will be interesting to see if, and how, the victors will pass on the cash to some of the end users who actually bought the vehicles at presumably inflated prices.

The class action included three groups of plaintiffs, ‘direct purchasers’, principally freight forwarding agents, who contracted ocean carriage from the offenders, a selection of auto dealers and lastly private and business vehicle buyers. The class action has now closed so it would be up to the dealers to reimburse anyone who was directly affected by a sale made to them and not included in the class action. The settlement with K-Line was announced during a hearing before Judge Esther Salas of the US District Court for the District of New Jersey in Newark. The court also heard arguments from other maritime company defendants seeking to dismiss the claims by arguing that the 1984 Shipping Act, which regulates ocean shipping companies, pre-empts state antitrust laws that protect indirect purchasers against price-fixing.

Dallas attorney Warren T. Burns of Burns Charest LLP, interim co-lead counsel for the end ‘payor’ plaintiffs, countered with the argument that state antitrust laws complement the Shipping Act, and that Congress in no way intended to bar such state claim. Burns commented:

"We are delighted to announce the first major settlement in the vehicle carriers’ case with K-Line. This is a very significant and substantial first step to assure that American consumers are compensated for the conspiracy to fix the price of international car-shipping services. We expect to make the dollar amount public very soon as we file for preliminary approval of the class settlement."

The other defendants include among others NYK Line and CSAV, both of which previously pled guilty to participating in the conspiracy that is still being investigated by the federal government. Other carriers named in the lawsuit are MOL, World Logistics Service, Hoegh, Wallenius Wilhelmsen Logistics, and EUKOR. In February 2014, the US Department of Justice (DOJ) announced that Defendant CSAV agreed to plead guilty and pay an $8.9 million criminal fine and in September of the same year, K Line also agreed to plead guilty and pay a $67.7 million criminal fine for its involvement in the conspiracy. In December 2014, NYK entered a guilty plea and was ordered to pay $59.4 million.

This case is In Re: Vehicle Carrier Services Antitrust Litigation, No. 13-cv-3306 (MDL No. 2471).