Court ruling paves way for trial over air cargo price fixing

Judge John Gleason of the Eastern District Court of New York granted class-action status to plaintiffs seeking compensation from several airlines for raising their transportation costs.    A federal court on Friday certified the class-action status of freight forwarder and shipper plaintiffs seeking compensation from several airlines for raising their transport costs through an alleged price-fixing scheme. Judge John Gleason of the Eastern District Court of New York ordered the court to adopt the report and recommendation of class action status made by a magistrate last October, overruling the objections of the defendants.
   Nine years ago, competition authorities in the United States, European Union, Australia, Canada and South Korea raided the offices of airlines to collect evidence of antitrust violations. More than two dozen airlines were subsequently charged in various countries with conspiracy to fix prices on fuel and security surcharges for air cargo shipments between late 1999 and 2006. A number of airlines have pleaded guilty and paid more than $1.8 billion in criminal fines in the United States alone.
   Victims, typically freight forwarders, have also sued the airlines to recover losses from the illegal activity, alleging the cartel increased global shipping prices.
   A number of air cargo carriers operating in the United States have entered into settlement agreements with class action plaintiffs and individual claimants in order to avoid protracted lawsuits. Last October, for example, Asiana Airlines agreed to pay $55 million to direct purchasers of air cargo shipping services to bow out of the class-action litigation. In February 2014, Hong Kong airline Cathay Pacific agreed to pay shippers $65 million to settle a complaint over alleged price-fixing. Cathay Pacific also paid $60 million in fines to the U.S. government. In December, Korean Air Lines and Singapore Airlines agreed to settlements totaling almost $207.5 million. In all, 27 defendants have settled for more than $1 billion.
   The remaining defendants are Air China, Air India, Air New Zealand, Polar Air Cargo, and its New York-based parent Atlas Worldwide Holdings.
   Class certification will allow thousands of claims to be considered at once. Four law firms, including Hausfeld, were appointed as class counsel. The case is scheduled to go to oral arguments in late August.