Polar Air Cargo LLC will pay $100 million to settle claims it conspired with other carriers to fix the price of air cargo services. This brings the total amount of settlements in the multidistrict litigation (MDL) to more than $1.14 billion. The settlement by Polar Air – as well as Atlas Air Worldwide Holdings Inc., which owns 51 percent of the company, and Polar Air Cargo Worldwide Inc. – will be the second-largest payment from any settlement in the litigation.
So far, the class has entered into settlements with 25 Defendant groups, 22 of which total $848 million and have been granted final approval. The three remaining Defendants in the litigation – Air China Ltd., Air India Ltd. and Air New Zealand Ltd. – are set to go to trial in September.
Korean Air Lines Co. Ltd.’s $115 million settlement tops the list as the largest deal to date, which was approved in October, along with settlements worth more than $90 million by both Singapore Airlines Ltd. and China Airlines Ltd., as well as a $65 million deal with Cathay Pacific Airways Ltd. U.S. District Judge John Gleeson approved the settlements after finding that they were fair to the thousands of companies that purchased air cargo services directly from the airlines and claimed the carriers participated in the plot to hike rates.
EVA Airways Corp. has previously agreed to pay $99 million to settle the class action claims. Nippon Cargo Airlines Co. Ltd. agreed in December 2014 to pay $36.55 million, and Asiana Airlines Inc. settled for $55 million in October 2014. Other settlement amounts include $92.4 million by Singapore Airlines Ltd., $115 million by Korean Air Lines, $15.8 million by El Al Israel Airlines Ltd., an $87 million settlement with Air France-KLM and an $85 million deal with Deutsche Lufthansa AG, among others. The settlement class, which was approved in the court’s preliminary approval order in May 2014, includes all persons or entities who purchased airfreight services for shipments to, from or within the U.S. directly from any of the Defendants or their parents or subsidiaries between Jan. 1, 2000, and Sept. 11, 2006.
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 (DOJ) 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 government says 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. 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.
In November, the Second Circuit blocked Polar Air Cargo, along with remaining defendants Air China, Air India and Air New Zealand, from challenging the newly won certification of a class of customers, saying an appeal was unwarranted.
The class is represented by Robert N. Kaplan, Gregory K. Arenson and Gary L. Specks of Kaplan Fox & Kilsheimer LLP, Hollis L. Salzman and Meegan Hollywood of Robins Kaplan LLP, Howard J. Sedran and Austin B. Cohen of Levin Fishbein Sedran & Berman, and Michael D. Hausfeld, Brent W. Landau, Hilary K. Scherrer and Melinda R. Coolidge of Hausfeld LLP. The case is in the U.S. District Court for the Eastern District of New York.
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