Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Consumers allege monopoly, anticompetitive prices in cargo shipping market, (May 29, 2015)

By Greg Hammond, J.D.

A Virgin Islands cargo shipping company allegedly monopolized the less-than-a-container cargo shipping market between St. Croix and Florida, according to a class action complaint filed in the federal district court in St. Croix, Virgin Islands. As a result of the monopoly, consumers allegedly paid and continue to pay anticompetitive prices (Danielson v. Tropical Shipping and Construction Co., Ltd., May 28, 2015).

The complaint alleges that Tropical Shipping and Construction Co., Ltd., through its subsidiary—Saltchuk Resources, Inc.—began acquiring its comeptitors in the less-than-a-container cargo shipping market in 2008. In 2010, Tropical purportedly acquired VI Cargo Services, LLC, raising its share of the relevant market to 100 percent. The company consequently charged anticompetitive prices for the consolidation and shipment of goods between Florida and St. Croix, raising its rates around 15 cents per cubic foot every few months. The consumers further alleged that in May 2013, a former VI Cargo employee founded a new less-than-a-cargo shipping company on St. Croix, called Paradise Freight, which charged lower prices than Tropical. Tropical was consequently forced to lower prices, losing an alleged 10 to 15 percent of the relevant market to Paradise, and resulting in fallen profit margins from 56 percent to 28 percent.

Individual consumers and entities that directly paid Tropical and entities under its control filed a class action, seeking to represent all persons or entities that directly purchased less-than-a-container cargo shipping services from Tropical to ship goods between St. Croix and Florida from September 18, 2010 to the present. They allege that Tropical monopolized the relevant market in violation of Section 2 of the Sherman Act and Section 1503 of the Virgin Islands Antitrust Act.

The plaintiffs seek a determination that the action may be maintained as a class action; a decree that the defendants’ conduct violated Section 2 of the Sherman Act; permanent injunction; trebled damages; costs and attorney fees; and pre- and post-judgment interest at the highest legal rate.

The case number is 1:15-cv-00045.

Attorneys: Vincent Colianni, II (Colianni & Colianni, LLC) and Timothy S. Tomasik (Tomasik Kotin Kasserman, LLC) for plaintiffs.

Companies: Tropical Shipping and Construction Co., Ltd.; VI Cargo Services, LLC; Saltchuk Resources, Inc.

News: Antitrust VirginIslandsNews