3 of 63 Defendents propose Settlement in NY Freight Forwarding Case
3 of 63 Defendents propose Settlement in NY Freight Forwarding Case
NEW YORK, Sept 22 (Reuters) – The plaintiffs in a proposed class-action lawsuit alleging price-fixing in the freight-forwarding industry have asked a federal judge in Brooklyn to approve a combined $28.9 million settlement they reached with three of the 63 defendants.
The litigation started three years ago, when Precision Associates, Mail Boxes Etc., and JCK Industries Inc, accused the companies, which specialize in arranging the shipment of goods, of violating the Sherman Antitrust Act by conspiring to inflate and fix charges, according to the lawsuit filed in U.S. District Court.
On Tuesday, the plaintiffs filed a motion asking U.S. District Judge John Gleeson to preliminarily approve settlements with three groups of defendants: Deutsche Bahn AG, Schenker AG, Schenker Inc, Bax Global Inc, and DB Schenker, collectively known as “Schenker”; EGL Inc and EGL Eagle Global Logistics Inc, collectively known “EGL”; and Vantec Corporation and Vantec World Transport (USA) Inc, collectively known as “Vantec.”
“We see these three settlements as initial icebreaker settlements,” said W. Joseph Bruckner, a partner with Lockridge Grindal Nauen in Minneapolis and one of the lead attorneys for the class. “The case continues against all the remaining defendants.”
In addition to paying millions, those who have settled agreed to help the plaintiffs with their case against the others, including DHL Express and United Parcel Service, according to a memorandum in support of the motion.
WORLDWIDE OFFICE RAIDS
The plaintiffs are businesses that specialize in manufacturing or shipping, Bruckner said. They contract with freight forwarders to handle the details, including customs clearance, according to the suit.
Bruckner estimated that there may be tens of thousands of businesses in the class, information he said the defendants possess.
The suit accused the freight forwarders of conspiring to inflate prices for their services by, among other things, creating suggested-pricing letters that would be sent to customers.
In October 2007, the U.S. Department of Justice and government agencies around the world raided the offices of numerous defendants in connection with suspected anti-competitive practices in the industry, according to the suit.
Six defendant groups agreed to plead guilty and pay criminal fines to resolve U.S. charges against them, according to the settlement motion.
Gleeson is presiding over another class-action lawsuit in which more than two dozen airlines are accused of conspiring to raise air-cargo freight rates.
Bruckner said all of the defendants in his clients’ case are likely absent class members in the air-cargo case, and could stand to reap proceeds from those settlements. As part of the agreement in the freight-forwarding case, Vantec and EGL will relinquish any settlement funds they may receive from the air-cargo case, according to Bruckner.
John Patullo, CEO of CEVA Group PLC, the parent company of EGL, said in a statement, “Reaching this resolution in the civil antitrust litigation is another key step in putting these issues behind us. We believe that this settlement is in the Company’s best interests.”
Adam Hemlock of Weil Gotschal & Manges declined comment on behalf of Vantec. Sheldon Zenner of Katten Muchin Rosenman did not respond to requests for comment on Schenker’s behalf.
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Filed under Class Action by on Oct 17th, 2011. 