• DATVF.ATLPHL
    1.707
    -0.036
    -2.1%
  • DATVF.CHIATL
    1.840
    -0.138
    -7%
  • DATVF.DALLAX
    0.937
    0.021
    2.3%
  • DATVF.LAXDAL
    1.421
    -0.025
    -1.7%
  • DATVF.SEALAX
    0.971
    -0.035
    -3.5%
  • DATVF.PHLCHI
    1.033
    -0.036
    -3.4%
  • DATVF.LAXSEA
    2.041
    -0.059
    -2.8%
  • DATVF.VEU
    1.527
    -0.070
    -4.4%
  • DATVF.VNU
    1.404
    -0.040
    -2.8%
  • DATVF.VSU
    1.179
    -0.002
    -0.2%
  • DATVF.VWU
    1.506
    -0.047
    -3%
  • ITVI.USA
    9,646.100
    305.090
    3.3%
  • OTRI.USA
    6.600
    -0.170
    -2.5%
  • OTVI.USA
    9,653.700
    312.670
    3.3%
  • TLT.USA
    2.760
    0.020
    0.7%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
  • DATVF.ATLPHL
    1.707
    -0.036
    -2.1%
  • DATVF.CHIATL
    1.840
    -0.138
    -7%
  • DATVF.DALLAX
    0.937
    0.021
    2.3%
  • DATVF.LAXDAL
    1.421
    -0.025
    -1.7%
  • DATVF.SEALAX
    0.971
    -0.035
    -3.5%
  • DATVF.PHLCHI
    1.033
    -0.036
    -3.4%
  • DATVF.LAXSEA
    2.041
    -0.059
    -2.8%
  • DATVF.VEU
    1.527
    -0.070
    -4.4%
  • DATVF.VNU
    1.404
    -0.040
    -2.8%
  • DATVF.VSU
    1.179
    -0.002
    -0.2%
  • DATVF.VWU
    1.506
    -0.047
    -3%
  • ITVI.USA
    9,646.100
    305.090
    3.3%
  • OTRI.USA
    6.600
    -0.170
    -2.5%
  • OTVI.USA
    9,653.700
    312.670
    3.3%
  • TLT.USA
    2.760
    0.020
    0.7%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
American Shipper

U.S. judge blocks antitrust case against Stolt-Nielsen

U.S. judge blocks antitrust case against Stolt-Nielsen

   A federal judge in Philadelphia has ordered the U.S. Department of Justice to stick by a prior amnesty agreement and not prosecute Stolt-Nielsen S.A., a provider of chemical-oriented shipping services, and Richard B. Wingfield, Stolt's executive vice president.

   The government's amnesty program has always included a general understanding that the first participant in a price-fixing cartel that cooperates with prosecutors receives immunity from subsequent prosecution and fines.

   Stolt-Nielsen and Wingfield were granted amnesty in early 2003 after agreeing to cooperate with an antitrust probe. The resulting antitrust case ended a global pact between Stolt-Nielsen and other chemical shipping companies to avoid price wars and allocate customers between them.

   As a result of information provided by Stolt-Nielsen, Odfjell Seachem AS pleaded guilty and paid a $42.5 million fine, and Jo Tankers BV was fined $19.5 million.

   Later, the Justice Department revoked its amnesty for Stolt-Nielsen and Wingfield, the first time the government had done so in its amnesty program, claiming Stolt-Nielsen and Wingfield had failed to abide by terms of their amnesty agreement.

   In a ruling Jan. 14, U.S. District Judge Timothy J. Savage, of the Eastern District of Philadelphia, noted, 'cooperation agreements are binding contracts. Both parties must abide by the terms of the agreement and are obligated to fulfill their respective obligations under it. Consequently, if the other party does not perform, it loses the benefit of the bargain and the government is relieved of its obligations under the contract. On the other hand, if the other party does perform, the government must keep its promise.'

   Immunity agreements are 'unique contracts in which special due process concerns for fairness' prevail, Savage wrote. 'Because due process is implicated, the government cannot unilaterally declare an immunity agreement void. Instead, due process demands that the government first obtain a judicial determination that the defendant breached the agreement. Accordingly, the other party is entitled to a judicial ruling before the government can rescind the agreement,' he explained.

   'When should the judicial resolution be made — before or after indictment? The government argues that the plaintiff (Stolt-Nielsen) may raise the issue in a motion to dismiss after indictment. Stolt-Nielsen counters that the time is now — before it is forced to challenge an indictment, and suffer the consequences of one,' Savage wrote in his ruling.

   'We agree that Stolt-Nielsen is entitled to a decision before the government pursues a prosecution, because if an indictment were later determined to have been wrongfully secured, it would be too late to prevent the irreparable consequences,' Savage wrote.

   The court further noted that by cooperating and supplying the Justice Department with information essential to the department's 'successful prosecution of Stolt-Nielsen's co-conspirators,' Stolt-Nielsen 'gave up significant constitutional rights. At the same time it provided evidence against its co-conspirators, Stolt-Nielsen incriminated itself in the same illegal activities.'

   'Now the government wants to use Stolt-Nielsen's self-incriminating evidence against it and Wingfield in a prosecution against them,' Savage wrote.

   The amnesty agreement between Stolt-Nielsen and the Justice Department immunized Stolt-Nielsen from prosecution for activity prior to Jan. 15, 2003, the court determined.

   'Now DOJ contends the activity had to have stopped at an earlier unspecified date that is not set forth in the agreement,' Savage noted. 'Had it wanted to fix the date sometime before Jan. 15, 2003, it could have replaced the words 'to the date of this letter' with the earlier date it now contends the parties contemplated.'

   'When it entered into the agreement, the DOJ never intended to prosecute Stolt-Nielsen. Its goals were to pursue Stolt-Nielsen's co-conspirators and to break up the conspiracy. It got what it had bargained for in the agreement. Stolt-Nielsen's partners in the conspiracy were prosecuted and convicted, and the conspiracy has been terminated. Now that it has received the benefit of the bargain, the DOJ cannot prosecute the party that incriminated itself when it delivered the evidence DOJ used to accomplish its goals. Therefore, we shall enjoin DOJ from prosecuting Stolt-Nielsen and Wingfield for the anticompetitive activity through Jan. 15, 2003,' Savage ruled.

   For the full decision, see 'Stolt-Nielsen S.A., Stolt-Nielsen Transportation Group LTD., and Richard B. Wingfield, v. United States of America'; U.S. District Court for the Eastern District of Pennsylvania; civil action; docket number 04-CV-537; findings of fact, memorandum and order; date of ruling: Jan. 14.

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