Antitrust Law Daily Wrap Up, ANTITRUST—E.D.N.Y.: Distribution of Air Cargo Shipping Services settlements ordered, (Apr 5, 2016)

By Greg Hammond, J.D.

The federal district court in Brooklyn has ordered disbursement of funds from various settlements in an action alleging that numerous airlines conspired to unlawfully fix prices of airfreight shipping services. The court rejected claims made by 66 claimants, finding that those claimants’ purchases from freight forwarders did not amount to direct purchases from the settling airlines (In re Air Cargo Shipping Services Antitrust Litigation, April 1, 2016, Cogan, B.).

Direct purchasers of air freight shipping services filed a series of class action suits against Korean Air Lines Co., Ltd., Singapore Airlines Ltd., Singapore Airlines Cargo Pte Ltd., Cathay Pacific Airways Ltd., and China Airlines Ltd., among other airlines, alleging that the carriers conspired to unlawfully fix the prices of air freight shipping services worldwide, including cargo shipments to and from the United States by concertedly levying artificially inflated surcharges. The direct purchasers moved for disbursement of funds for settlements involving Korean Air, Singapore Airlines, Cathay Pacific, and China Airlines.

Sixty-six claimants opposed the motion for disbursement, asserting that their claims were valid because they were direct purchasers from the settling airlines, despite using freight forwarders in the claimed transactions. The court rejected the claimants’ arguments, however, finding that the plain language of the settlement agreements was not reasonably susceptible to more than one interpretation—the settlements covered only those purchases entered into with the settling airlines without the use of an intermediary.

Further, even if the settlements were not clear, the court found that the conduct of the parties during the course of this litigation conclusively established that the parties intended that purchases made through freight forwarders were to be excluded from the agreement. The claim form instructions stated that the claim “covers only direct purchases” and, if a claimant made both direct purchases and indirect purchases through a freight forwarder or other entity, the claimant should only list “direct purchases” and not list “indirect purchases.” The instructions consequently made clear that indirect purchases were those made through a freight forwarder without any further distinction, the court concluded.

The court also noted that if the parties wanted to include air cargo shipping services purchased through freight forwarders in the terms of the settlement agreements, they knew how to do so.

The case is No. 06-MD-1775 (BMC).

Attorneys: Robert N. Kaplan (Kaplan, Kilsheimer & Fox, LLP) and David Jaroslawicz (Jaroslawicz & Jaros) for Plaintiffs. James Vernon Dick (Squire Patton Boggs US LLP) for Defendants.

Companies: ABM International, Inc.; Ace Aviation Holdings, Inc.; Spraying Systems Co.; Fleurchem, Inc.; British Airways; Fleurchem, Inc.; Asiana Airlines, Inc.; Nippon Cargo Airlines Co., Ltd.; EVA Airways Corp.; Korean Air Lines Co., Ltd.; Singapore Airlines Ltd.; Singapore Airlines Cargo Pte Ltd.; Cathay Pacific Airways Ltd.; China Airlines Ltd.

Cases: Antitrust NewYorkNews