Antitrust Law Daily Wrap Up, ANTITRUST—E.D.N.Y.: Airfreight shipping purchasers obtain class certification against airlines, (Jul 14, 2015)

By Greg Hammond, J.D.

Direct purchasers of airfreight shipping services have obtained class certification in a price fixing suit against certain airlines for conspiring to create and implement an index for calculating fuel and security surcharges at supra-competitive rates. The federal district court in Brooklyn, New York, adopted the magistrate judge’s Report and Recommendations in its entirety, finding no merit to any objections (In re Air Cargo Shipping Services Antitrust Litigation, July 10, 2015, Gleeson, J.).

Six freight forwarders that purchased air freight services from one or more domestic and foreign airlines filed suit, alleging that the airline defendants conspired to develop and implement an industry-wide index for calculating fuel and security surcharges at supra-competitive rates that were applied to thousands of routes flown worldwide by the defendants, including flights to and from the United States. According to the plaintiffs, the airlines’ purported conspiracy to fix prices violated the Sherman Act.

A magistrate judge issued a Report and Recommendation in October 2014, recommending that the plaintiffs’ motion for class certification be granted. He found that (1) the proposed putative class consists of at least “tens of thousands of individuals and entities that purchased air freight services from the defendants during the class period,” satisfying the numerosity requirement; (2) there were numerous essential questions of law and fact common to the class; (3) the plaintiffs will attempt to prove that they were harmed by the same overall course of conduct and in the same way as the remainder of the class, demonstrating typicality; and (4) the adequacy of representation requirement was met because the named plaintiffs share the common goals of establishing defendants’ liability and securing the maximum possible recovery and the proposed class counsel is qualified to maintain the action.

The magistrate judge also determined that the plaintiffs produced substantial common evidence supporting their argument that the defendant airlines conspired to violate antitrust laws by fixing prices; there is common evidence of class-wide injury or “impact”; and the plaintiffs presented a viable damages model for the class, satisfying the predominance standard.

Lastly, the report found that the superiority requirement was satisfied because: (1) a single action would promote the efficient adjudication of the many plaintiffs’ claims; (2) many class members have likely suffered relatively small damages that could not be remedied efficiently in an individual action; (3) allowing the vindication of the smaller plaintiffs’ rights is compelling in the antitrust context because of the public interest at stake; and (4) any difficulties are certainly manageable.

Finding no merit to any objections, the district court adopted the Report and Recommendation in its entirety, certifying a class that includes: All persons or entities (but excluding Defendants, their parents, predecessors, successors, subsidiaries, affiliates, as well as government entities) who purchased airfreight shipping services for shipments to or from the United States directly from any of the Defendants or from any of their parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from January 1, 2000, up to and including September 30, 2006.

The plaintiffs’ motions to preclude certain testimony were also granted in part and denied in part, according to the rulings in the Report and Recommendation.

The case number is 06-MD-1775 (JG) (VVP).

Attorneys: Joshua Piovia-Scott (Randall R. Renick Law Offices) and Sarina M. Hinson (Garcia Law Firm) for Around the World Apparel Inc. James Vernon Dick (Squire Patton Boggs U.S. LLP) for Deutsche Lufthansa AG, Lufthansa Cargo AG, Asiana Airlines Inc., Cathay Pacific Airways Ltd., and Japan Airlines International Co., Ltd.

Companies: Around the World Apparel Inc.; Deutsche Lufthansa AG; Lufthansa Cargo AG; Asiana Airlines Inc.; Cathay Pacific Airways Ltd.; Japan Airlines International Co., Ltd.

Cases: Antitrust NewYorkNews