Polar Air Cargo to Pay $100M Price-Fixing Settlement

Last week, the parties in the class action lawsuit accusing Polar Air Cargo LLC, Polar Air Cargo Worldwide Inc. and Atlas Air Worldwide Holdings of illegally fixing the process of air cargo services reached a $100 million class action settlement, bringing the total of air cargo price-fixing settlements to $1.14 billion.

The air cargo price-fixing class action lawsuit alleged that since the early 2000s, multiple airlines conspired together to raise the price of transporting cargo worldwide. The class action lawsuit stemmed from investigations into airfreight by the U.S. Department of Justice and European Commission. In 2006, the plaintiffs brought 90 lawsuits against dozens of air cargo companies.

According to the Department of Justice’s investigation, the airlines discussed the rates they should charge for various routes then imposed and enforced the agreed-upon prices.

Although both direct and indirect purchasers initially brought lawsuits, 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.

These claims were then consolidated into multidistrict litigation. According to court documents, the proposed Class in the MDL included all persons or entities who purchased airfreight services for shipments to, from or within the United States directly from any of the defendants or their parents or subsidiaries between Jan. 1, 2000, and Sept. 11, 2006

According to representatives for the parties, the settlement payment to be made by Polar Air and parent company Atlas Air Worldwide Holdings will be the second largest in the class action lawsuit. In October, Korean Air Lines Co. Ltd. paid $115 million to settle the pending litigation becoming still the largest amount in the action. Other settlements include $99 million by EVA Airways Corp., $36.55 million by Nippon Cargo Airlines Co. Ltd., and $55 million by Asiana Airlines Inc.

According to most recent figures in court documents, 22 of the settlement agreements total $848 million. According to representatives for the plaintiffs, these agreements have been granted final approval by the court.

The Class was certified by a New York federal judge in October of this year. In his decision the judge stated, “Though the plea agreements and resulting pleas are not dispositive proof of a global conspiracy, their sheer number and scope, involving price-fixing on numerous routes in numerous regions throughout the world, certainly permit some inference of global misconduct.” The remaining defendants challenged Class certification, but the challenge was dismissed by the Second Circuit in November. According to the Second Circuit, an appeal was unwarranted.

Defendants Air China Ltd., Air India Ltd. and Air New Zealand Ltd. are all set to go to trial in September of this year.

“We are very proud of what we have accomplished in this case over the past 10 years,” said representatives for the plaintiffs.

The plaintiffs are represented by Hollis Salzman and Meegan Hollywood of Robins Kaplan Miller & Ciresi LLP, Robert N. Kaplan, Gregory K. Arenson and Gary L. Specks of Kaplan Fox & Kilsheimer LLP, Howard J. Sedran, Austin Cohen and Keith J. Verrier of Levin Fishbein Sedran & Berman, and Michael D. Hausfeld, Brent W. Landau, Hilary K. Scherrer and Melinda Coolidge of Hausfeld LLP.

The Cargo Price-Fixing MDL is In re: Air Cargo Shipping Services Antitrust Litigation, Case No. 1:06-md-01775, in the U.S. District Court for the Eastern District of New York.

UPDATE: On Oct. 6, 2016, a federal judge signed off on the last few settlements ending a decade-long air cargo antitrust litigation.