Crowley Liner Services has agreed to an undisclosed settlement with shippers who filed civil antitrust lawsuits against carriers in the wake of a federal investigation into price-fixing in the U.S. mainland-Puerto Rico trade.
The Jacksonville-based carrier denied violating antitrust laws but agreed to settle to avoid further costs of litigation the company said it expects to continue for several more years.
“This was a business decision to put the matter behind us as quickly as possible,” said Michael Roberts, Crowley’s senior vice president and general counsel. “We simply felt that it was in the best interest of our company, and our customers, to move beyond this dispute.”
Shippers filed 34 civil antitrust lawsuits against the four major U.S.-Puerto Rico carriers after news of a federal investigation into pricing practices in U.S. cabotage trades covered by the Jones Act, which restricts domestic waterborne service to U.S.-flag operators.
The federal investigation, said to be continuing, resulted last year in guilty pleas and prison terms for four former carrier executives — two from Sea Star Line and two from Horizon Lines — for colluding on pricing between 2002 and 2008 or trying to hide evidence.
Federal agents raided the offices of Sea Star, Horizon and Crowley on April 17, 2008, and subpoenaed records from Trailer Bridge, the No. 4 Puerto Rico carrier, and Matson Navigation, which serves Hawaii and Guam.
In addition to the Puerto Rico civil antitrust lawsuits, about two dozen civil antitrust lawsuits have been filed on behalf of shippers moving cargo between the U.S. mainland and Hawaii, Alaska and Guam.
Horizon agreed last year to settle its Puerto Rico antitrust cases for $20 million. In filings with the Securities and Exchange Commission, Horizon said its legal fees related to the antitrust litigation totaled $21.2 million through last Sept. 20. The lawsuits alleging price-fixing in the other trade lanes remain pending in Seattle and Alaska.
Crowley said it expects court approval of its settlement with shippers in the Puerto Rico trade within the next several days. The carrier said that after preliminary court approval, notice forms will be sent to all shippers.
Crowley Liner Services is owned by a holding company of privately held Crowley Maritime.