Polar hit with $100 million bill in US class action suit

Polar hit with $100 million bill in US class action suit

Most of the world's major carriers have forked out considerable sums over the past few years to settle the antitrust lawsuit.

Polar Air Cargo will pay customers $100 million after settling an on-going antitrust class action lawsuit that has drawn in most of the world’s major carriers and so far generated more than $1.1 billion in settlements.

In the second-largest settlement since the case was brought before the U.S. District Court for the Eastern District of New York in February 2006, the group Polar Air Cargo, Polar Air Cargo Worldwide, and Atlas Air Worldwide Holdings, agreed to pay the huge sum to direct purchasers of air cargo shipping services in instalments over the next three years.

Nearly half of the original defendants in the civil action brought by law firms pleaded guilty to a conspiracy to fix the price of shipping goods by air to and from the U.S. from January 2000 through September 2006. The plaintiffs alleged that the cartel increased global shipping prices.

In a statement after the settlement was reached, Brent Landau, a partner at Hausfeld that is one of the law firms handling the case, said his team was proud to have obtained such significant compensation “for victims of this worldwide cartel.”

William Flynn, president and CEO of Atlas Air Worldwide, said he wanted to put what he called a “legacy matter” behind the carrier and focus on strategic growth initiatives. A statement from the carrier said the settlement agreement resolved all claims against Polar Air Cargo and its companies by participating members in the class action. The carrier continues to deny any wrongdoing or liability, and typical in these type of settlement agreements, there was no admission of any wrongdoing or liability.

The case continues against the three remaining airline defendants: Air China, Air India, and Air New Zealand. If the amounts that have been reached against 25 of the world’s top airlines are any indication, the carriers had better be putting money aside to pay the bill.

The largest fine was paid by Korean Air at $115 million, with Polar Air second. Taiwan’s EVA Air was hit with a $99 million fine and its compatriot China Airlines paid $90 million to purchasers of its air cargo services. Air France/Martinair was hit for $87 million, Lufthansa for $85 million and Cathay Pacific $65 million.

Hausfeld said last year, the U.S. district court granted certification of a class of direct purchasers of air cargo shipping services, and the U.S. Court of Appeals for the Second Circuit declined to hear an interlocutory appeal of that ruling. The district court also denied the defendants’ motions for summary judgment and granted summary judgment motions filed by the plaintiffs. A trial is set for September 2016.

Also in New York, DHL has agreed to pay $53 million to settle a price-fixing class action suit by shippers that was filed in 2008 and alleged that numerous freight forwarders were involved in conspiracies to fix prices in violation of the Sherman Act between 2001 and 2007.

Those settling so far have been ABX, EGL, Expeditors, Kuehne + Nagel, Morrison, Nishi-Nippon, DB Schenker, UAC, UTi , Vantec, SDV, Panalpina, Geodis, DSV, Jet Speed, Toll Group, Agility, UPS, Dachser and DHL’s Japan operations . The forwarders agreed to pay a total of $197 million.

Contact Greg Knowler at greg.knowler@ihs.com and follow him on Twitter: @greg_knowler.