Antitrust Law Daily Wrap Up, TOP STORY: Shipping exec acquitted in U.S. price fixing probe, (May 11, 2015)

By Jeffrey May, J.D.

The Department of Justice Antitrust Division's long-running enforcement efforts in the coastal water freight transportation industry ended with a trial court loss last week. On May 8, following a three-week trial, a federal jury sitting in San Juan, Puerto Rico, acquitted Thomas Farmer, the former vice president of price and yield management for shipping company Crowley Liner Services, on a price fixing charge (U.S. v. Farmer, Criminal No. 3:13-cr-00162).

Farmer was indicted in March 2013 for participating in a conspiracy to fix rates and surcharges for freight transported by water between the continental United States and Puerto Rico. The defendant was alleged to have fixed prices between mid-2005 and April 2008. Crowley transports a variety of cargo shipments, such as heavy equipment, perishable food items, medicines, and consumer goods, on scheduled ocean voyages between the continental United States and Puerto Rico.

The charge against Farmer followed the conviction of Frank Peake, a former executive of Florida-based coastal water freight transportation company Sea Star Line LLC. A San Juan jury found, after a two-week trial in January 2013, that Peake participated in the price fixing conspiracy from 2005 to 2008. Peake was sentenced to serve five years in prison and to pay a $25,000 criminal fine. His former employer, Sea Star, also transports cargo shipments between the continental United States and Puerto Rico.

In addition to Crowley and Sea Star, a third company—Horizon Lines LLC—was named in the Antitrust Division probe. All three companies have pleaded guilty to the price fixing charges. Crowley was fined $17 million; Sea Star was fined $14.2 million; and Horizon was fined $15 million. Additionally, five shipping company executives charged in 2008—Gabriel Serra, Peter Baci, R. Kevin Gill, Gregory Glova, and Alex G. Chisholm—have pleaded guilty for their roles in the conspiracy. Farmer's indictment was the last charge of the investigation.

Attorneys: Craig Y. Lee for U.S. Department of Justice. Joseph C. Laws (Law Office of Joseph C. Laws) for Thomas Farmer.

Companies: Sea Star Line LLC; Crowley Liner Services; Horizon Lines LLC

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