Puerto Rico settlement detailed

Puerto Rico settlement detailed    Shippers who moved cargo between the U.S. mainland and Puerto Rico in 2002 to 2008 are asked to decide whether to participate in class action settlements and share in cash payments from a $52 million fund or have freight rates frozen for two years.
   A Web site explaining the settlements includes forms for shippers to fill out if they choose to participate, and a detailed notice explaining shipper’s rights and options.
   A hearing by the U.S. District Court in the Hato Rey district of San Juan, Puerto Rico, to decide whether to approve the settlements is scheduled for Nov. 18. Shippers must decide by Nov. 15 whether they want to participate in the settlement.
   The notice outlining the settlement agreement explains plaintiffs in the class action alleged Puerto Rico carriers and selected executives at those companies “violated federal antitrust laws by entering into a combination, conspiracy or agreement to fix, maintain, raise, or stabilize the prices of Puerto Rican Cabotage from at least May 1, 2002 to April 17, 2008,” and that shippers were injured by paying more for transportation between the mainland and Puerto Rico than they would have paid in the absence of the alleged unlawful conduct.
   Settling defendants Horizon Lines, Crowley Maritime and Sea Star Line denied the overcharge allegations, but according to the notice “agreed to the settlements to avoid the cost and risk of a trial, and so that those allegedly affected can get benefits.” In April, a fourth carrier, Trailer Bridge, was dismissed from the lawsuit, but their customers can also seek compensation under the settlement agreement.
   The notice adds the settlements do not mean that the settling defendants “did anything wrong or violated any laws. The class representatives and the lawyers representing them think the settlements are in the best interest of all class members.”
   Horizon, Crowley and Sea Star collectively agreed to pay $52.25 million in cash to a settlement fund that will be paid to some of the class members in exchange for a release of all claims. Crowley ($13.75 million) and Sea Star ($18.5 million) made their agreements earlier this year and Horizon ($20 million) in 2009.
   After deducting attorney fees (which have to be approved by a court, but can be up to one-third of the total contributed by the companies), expenses, and payment of $20,000 to each of six “class representatives,” the funds will be distributed according to a plan to be approved by the court, but proportional to the amount of money shippers spent on freight during the period.
   Alternatively, if shippers are party to a contract with Horizon, Crowley or Sea Star they can opt to have base contract rates frozen for two years.
   While Horizon and Sea Star did not immediately respond to questions about the settlement, Crowley spokesman Mark Miller confirmed the official Web site is what 'shippers should use if they have questions. They will receive or have received hard copies of some of these, including the forms. This is the only process available to shippers unless they file a separate lawsuit.
   'We encourage shippers to take advantage of this process,' Miller said. 'The amount of money set forth in the Crowley settlement is fixed, and will not change based on the choices shippers make. We don’t really know what to expect in terms of the choices shippers actually make. Obviously, shippers that do not have contracts with Crowley should take their share of the cash settlement, since the base rate freeze is not an option for them. For shippers who have a contract, they will make their own evaluations on a case-by-case basis.'
   The cash payments and base rate freezes are mutually exclusive; a shipper cannot receive both from the same settling defendant, though if they use multiple carriers they could freeze rates with one and seek cash from the others.
   Vincent J. Esades, an attorney with the Minneapolis-based firm of Heins, Mills and Olson, said it is not known exactly how many members of the class there are or how much they were allegedly overcharged. He said experts for both the class action attorneys and defense lawyers each came up with estimates, but that these were part of the confidential information used in reaching settlements.
   But he said about 30,000 notices were mailed — some to shippers who move cargo on a regular basis, some to 'one-off' shippers who may have, for example, shipped a single automobile to Puerto Rico. He said the 30,000 notices included some duplicates mailed to multiple or old addresses of the same company.
   'I think this is a fair and adequate amount for the class,' he said. 'These are difficult cases and we were trying to do this a as quickly as possible, because they need assistance now.'
   Deciding whether to take cash or freeze rates will be a very individualized decision that each company will have to make with the assistance of an attorney, he said. Some shippers may feel they will benefit more from stability in rates, other may feel it is attractive to get a cash payment. The decision is complicated by the fact that shippers will not know what proportion of their fellow class members are choosing the cash or rate freeze option when they make their decision.
   The class action only covers companies that did business directly with the ocean carriers, not indirect customers who may have used non-vessel-operating common carriers or other intermediaries.
   Shippers who join the settlement or do nothing will lose their ability to sue over the alleged misconduct resolved through the settlement.
   Shippers can exclude themselves from the settlement and retain their right to sue, but they must take the step of writing to the settlement administrator by Nov. 15 as outlined in the notice.
   Shippers also have the right to object to the settlement by writing to the clerk of the U.S. District Court in Puerto Rico and the co-lead counsel for the class or by appearing in court on Nov. 18. ' Chris Dupin