US court rejects appeal by ro-ro shippers in antitrust case

US court rejects appeal by ro-ro shippers in antitrust case

A US appeals court has upheld a lower court’s decision that vehicle buyers and dealers cannot pursue private antitrust lawsuits seeking treble damages from roll-on, roll-off carriers that colluded to fix shipping rates.

The Philadelphia-based 3rd US Circuit Court of Appeals affirmed a federal district court’s ruling that the Shipping Act of 1984 shields ocean carriers from private antitrust lawsuits over conduct prohibited by the act.

Direct and indirect customers of the ro-ro carriers filed numerous antitrust suits seeking treble damages after a justice department criminal investigation produced guilty pleas and multimillion-dollar fines by Wallenius Wilhelmsen Logistics, 'K' Line Japan, NYK Line Japan, and CSAV. Eight carrier executives have pleaded guilty to federal criminal charges.

Although the 3rd Circuit said shippers are barred from private antitrust suits against the carriers, the court said the plaintiffs still may seek damages through the US Federal Maritime Commission. Antitrust complaints filed with the FMC could yield double damages, in contrast with the treble damages allowed in the courts.

Complaints against the ro-ro carriers by groups representing ocean transportation intermediaries, automobile dealers, and truck and heavy equipment dealers are pending before the FMC.

The 3rd Circuit agreed with US District Judge Esther Salas of New Jersey, who said Congress intended for the 1984 act to provide antitrust immunity to ocean carriers under FMC-approved agreements.

The appeals court said that because the ro-ro carriers’ price-fixing did not take place under a filed agreement, the carriers were subject to criminal prosecution or FMC penalties but not to private antitrust suits.

The 3rd Circuit said the same principle shields ocean carriers from private lawsuits filed under state laws. Allowing state antitrust actions “would essentially undo Congress’s work to expand antitrust immunity” for carriers, the appeals court said.

Contact Joseph Bonney at joseph.bonney@ihsmarkit.com and follow him on Twitter: @JosephBonney.