Nippon Cargo Airlines Co. Ltd. has agreed to pay $36.55 million to resolve a long-running putative class action claiming the carrier conspired with other airlines to hike air cargo rates during much of the 2000s. The plaintiffs reported the settlement to a Brooklyn federal last month. The plaintiffs, entities that bought air cargo services from a host of airlines in the early 2000s, have moved for preliminary approval of the settlement. The settlement includes a $36.35 million settlement fund, plus another $200,000 for notice and administration costs. The settlement terms also require Nippon to cooperate with the plaintiffs by providing witnesses, documents and meetings with lawyers, as the plaintiffs continue to pursue their case against the other airlines.
After years of early negotiations proved fruitless, Nippon and the plaintiffs resumed talks near the end of January. At the time, the plaintiffs sought data to back up Nippon’s claim that it was in “extremely poor” financial condition. The plaintiffs’ own financial consultant eventually agreed that Nippon was “effectively insolvent absent support from a parent company.” Following further negotiations, the two sides reached an initial agreement in September, leading to the current settlement.
The multidistrict litigation dates to 2006, when consumers brought more than 90 lawsuits against more than two dozen airlines after the U.S. Department of Justice and the European Commission began investigating the air freight industry. According to the DOJ, the conspirators used meetings, conversations and other communications to determine the rates the airlines should charge for various routes. The airlines and former executives then imposed the agreed-upon rates and participated in subsequent meetings in the U.S. and other countries to enforce the price-fixing plots. Nippon agreed to a $45 million plea bargain to resolve the DOJ’s claims in early 2009, and several of its former executives were also charged in the conspiracy.
Thus far, the defendants have agreed to pay out more than $835 million in the MDL, with China Airlines Ltd. Agreeing to a $90 million settlement with the class in May. Although both direct and indirect purchasers initially brought suits, the Second Circuit upheld the dismissal of indirect-purchaser plaintiffs in 2012, saying that federal aviation law preempted price-fixing claims brought against foreign carriers under state antitrust statutes.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.