At least 18 large shippers may pursue their own antitrust cases against U.S.-Puerto Rico carriers instead of joining in a $52.25 million settlement of a class-action lawsuit against Horizon Lines, Sea Star Lines and Crowley Maritime, court documents show.
U.S. District Court Judge Daniel R. Dominguez of San Juan scheduled a hearing for Thursday on whether to approve the carriers’ settlement of the class action. The case consolidated some 32 lawsuits that shippers filed in the wake of a federal criminal investigation into price-fixing by Puerto Rico carriers between 2002 and 2008.
Federal agents raided the offices of Horizon, Sea Star and Crowley in April 2008 in what the Justice Department said was a criminal investigation of antitrust violations in the domestic Jones Act trades. The three carriers are all on the list of The JOC Top 40 Container Lines. Five former carrier officials – three from Horizon, two from Sea Star – later pleaded guilty to antitrust conspiracy or concealing evidence.
To settle the civil lawsuits, carriers agreed to provide $52.25 million for cash settlements or two-year rate freezes. Horizon agreed to $20 million, Sea Star $18.5 million and Crowley $13.75 million. Trailer Bridge, the smallest carrier in the Puerto Rico trade, was dismissed from the case.
Shippers who opted out of the settlement retain the right to file their own lawsuits against the carriers. Among the shippers that opted out were Home Depot, Kimberly-Clark, Baxter Healthcare, Coca-Cola, ConAgra, Nestle, Payless Shoesource, Sears and motor carrier YRC and its subsidiaries.
Epiq Legal Noticing, a company coordinating the settlement notices, provided the court with the opt-out list along with names of 977 shippers that had agreed to the settlement. Large shippers agreeing to the settlement include J.C. Penney, R.J. Reynolds, Owens Corning, Sherwin Williams, Xerox and Caterpillar.
The lists may not be complete. Companies’ notices of whether they would accept or opt out of the settlement had to be postmarked by Monday, and all may not have been processed. Epiq told the court it mailed claims to 61,854 potential class members but that some shippers may have received multiple forms.
Dominguez agreed Monday to make public the latest version of the shipper class-action lawsuit, which had been sealed. The lawsuit details how the carriers allegedly conspired to fix prices and divide the business of shippers, including such well-known names as Wal-Mart, Pepsico, Goya Foods, SaraLee-Hanes and Baxter.
The lawsuit said carrier executives illegally coordinated pricing through phone calls, meetings, faxes and e-mail accounts using pseudonyms. The lawsuit claimed that in one case involving an online reverse auction by Walgreens, executives of Sea Star, Horizon and Crowley discussed their bids by phone while the auction was going on.
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