Antitrust Law Daily Wrap Up, TOP STORY—E.D.N.Y.: DHL cleared of conspiracy claims postdating leniency application, (Aug 20, 2015)

By Greg Hammond, J.D.

Claims that freight forwarding company DHL participated in a price fixing conspiracy after October 11, 2007, the date it applied for leniency, were dismissed by the federal district court in Brooklyn. The court determined that there were sufficient facts to establish that the company withdrew from the conspiracy in October 2007 as a matter of law (Precision Associates, Inc. v. Panalpina World Transport Holding Ltd., August 19, 2015, Gleeson, J.).

A group of businesses filed a class action against various freight forwarding companies around the world for allegedly conspiring to fix prices of international ocean shipping services. The corrected third amended complaint acknowledges that DHL—consisting of Deutsche Post AG, DHL Express USA, Inc., Exel Global Logistics, Inc., Air Express International USA, Inc., and Danzas Corp.—turned itself in to antitrust regulators in the United States and Europe in October 2007 and that it applied for and received leniency. DHL consequently moved to dismiss the antitrust claims to the extent they are based on purchases made after October 11, 2007.

The court concluded that the facts alleged in the complaint established that DHL withdrew from the conspiracy when it applied for leniency. Although the plaintiffs suggested that DHL continued to participate in the conspiracy while cooperating with and under the scrutiny of antitrust regulators for over three years after October 2007, the court found the argument implausible. Specifically, it noted that antitrust regulators would not have offered leniency to a defendant that continued to actively participate in a conspiracy. In order to obtain immunity, DHL would have had to meet six conditions, including that it take prompt and effective action to terminate its part in the activity.

The plaintiffs failed to allege that the conspiracy plausibly continued through January 2011, because there were no overt acts alleged after May 2007. In the absence of specific allegations of conspiratorial activity, conclusory statements couched as facts, are insufficient to raise an inference that the conspiracy extended until 2011, the court found. Even if the plaintiffs alleged the conspiracy continued beyond 2007, DHL could not legally be responsible for the harm done by subsequent conspiratorial actions of its former coconspirators after DHL withdrew from the conspiracy.

The case number is 08-CV-00042 (JG)(VVP).

Attorneys: W. Joseph Brockner (Lockridge Grindal Nauen P.L.L.P), Christopher Lovell (Lovell Stewart Halebian Jacobson LLP), Daniel E. Gustafson (Gustafson Gluek PLLC), and Steven N. Williams (Cotchett, Pitre & McCarthy, LLP) for Plaintiffs. Mitchell A. Lowenthal (Cleary Gottlieb Steen & Hamilton LLP) for Defendants.

Companies: Precision Associates, Inc.; Deutsche Post AG; DHL Express USA, Inc.; Exel Global Logistics, Inc.; Air Express International USA, Inc.; Danzas Corp.; Panalpina World Transport Holding Ltd.

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