Dozens of domestic and international airlines ship cargo—including equipment, perishable commodities, and consumer goods—on passenger flights. In addition to a base price for shipment services, the airlines levy surcharges for fuel, security, war risk, and U.S. customs paperwork.
In 2006, the U.S. Department of Justice (DOJ) accused the airlines—including Société Air France and Deutsche Lufthansa AG—of conspiring to fix prices by exchanging proprietary information and agreeing to charge artificially inflated amounts for both the base price and the surcharges. They allegedly also refrained from pursuing or acquiring each other’s customers and refused to offer discounts to companies that arranged shipments.
Lufthansa quickly agreed to cooperate with the DOJ’s investigation to avoid criminal charges and a heavy fine. Air France and its subsidiaries subsequently pleaded guilty to the antitrust charges and paid $504 million in fines.
Direct and indirect purchasers of the airlines’ shipping services filed more than 90 individual and class action suits against dozens of carriers, which were consolidated in New York federal court. The plaintiffs alleged price-fixing in violation of the Sherman Act, among other claims.
The defendants contended that they never colluded with each other and that any similar charges resulted from market conditions.
Lufthansa settled with both direct and indirect purchasers in 2009 for $85 million, plus settlement costs. The company also agreed to provide documents implicating the other defendants.
Last month, Air France settled with the direct purchasers for $87 million, plus half of the settlement costs. The agreement excluded indirect purchasers, who are still pursuing their claims. Air France will allow the plaintiffs access to its executives and counsel for testimony against the other defendants. In addition, it will provide documents related to transactions and pricing and to the European Commission’s antitrust investigation.
Citation: In re Air Cargo Shipping Servs. Antitrust Litig., No. 1:06-cv-01775 (E.D.N.Y. July 12, 2010).
Lead plaintiff counsel: AAJ member Robert N. Kaplan, and Gregory K. Arenson, Barbara J. Hart, Hollis L. Salzman, Craig L. Briskin, and Kellie Lerner, all of New York City; AAJ members Howard J. Sedran and Austin Cohen, both of Philadelphia; Michael D. Hausfeld, Charles E. Thompkins, Andrew B. Bullion, Hilary K. Ratway, and Andrea Hertzfeld, all of Washington, D.C.; and Gary L. Specks, Highland Park, Illinois.