Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Catalina Island shipping monopoly alleged by maritime services company, (May 16, 2016)

By Greg Hammond, J.D.

Santa Catalina Island Co. (SCIC) and Avalon Freight Services, LLC have an alleged monopoly on freight shipping by sea, according to a complaint filed by maritime services company Curtin Maritime Corp. The alleged monopoly was engaged in through a scheme that includes an exclusive ten-year lease between SCIC and Avalon that excludes competition (Curtin Maritime Corp. v. Santa Catalina Island Co., May 13, 2016, Blecher, M.).

SCIC owns Pebbly Beach, the lone facility available for delivering freight by sea to Avalon, which is the only incorporated city on Santa Catalina Island, the complaint asserts. Curtin claims that Avalon Freight has a 100 percent monopoly of barge freight business to and from Avalon, due to a ten-year exclusive lease with SCIC for use of the Pebbly Beach facility.

The complaint further alleges that SCIC and Avalon Freight have a monopoly on freight shipping by sea between Avalon and the Southern California mainland. As a result of the alleged monopolization and unlawful exclusive dealing arrangements, Curtin claims that competition for shipping in the relevant market has been substantially and unreasonably restricted, lessened, foreclosed, and eliminated, and consumers have been forced to pay supracompetitive prices for shipping. The significant and “insurmountable” barriers to entry have ensured continued unlawful maintenance of the defendants’ monopolies and prices for fuel, goods, and other commodities sold on Catalina have been artificially inflated due to the shipping monopoly. Lastly, consumers have been deprived of any meaningful choice as to selection, price, convenience, location, and quality of shipping services.

Curtin brings claims for monopolization in violation of Section 2 of the Sherman Act, unlawful exclusive dealing arrangements in violation of Section 1 of the Sherman Act; and violation of California’s Unfair Competition Law. The complaint requests trebled damages; reasonable and non-discriminatory access to and use of the Pebbly Beach freight facility by Curtin, so as to enable competition in the relevant market; as well as attorney fees and costs of litigation.

The case is No. 2:16-cv-03290.

Attorneys: Maxwell M. Blecher, Taylor Wagniere (Blecher Collins & Pepperman, P.C.) and Marley Schroepfer for Curtin Maritime Corp.

Companies: Curtin Maritime Corp.; Santa Catalina Island Co.; Avalon Freight Services, LLC

News: Antitrust CaliforniaNews