New developments in the antitrust, class action lawsuit pending in Seattle: an Amended Complaint was filed. (My earlier post on why the court dismissed the original complaint). The Amended Complaint is available for download here. (H/T to Joe the Plumber for the tip).
This case stems from the criminal convictions of several officials of a shipping company in Puerto Rico. They were charged with price fixing. Several plaintiffs filed a class action against several shippers involved in the Hawaii and Guam routes. Based on the criminal convictions and the similarities between the Puerto Rico and Hawaii/Guam markets, plaintiffs allege:
According to the United States Department of Justice (“DOJ”), the entire domestic noncontiguous ocean shipping industry, including the Hawaii/Guam market, is under investigation. The Hawaii/Guam market is substantially similar in structure to the Puerto Rico market, and there is a high degree of overlap among Defendants that operate in these trade lanes. In light of the admitted antitrust violations in the Puerto Rico trade, and the similarities and overlap in the markets, a conspiracy in the Hawaii/Guam market is plausible.
At first blush, I cringed at this allegation. The Supreme Court has made it very, very difficult for plaintiffs who allege conspiracies to get their day in federal court. The post linked above has links to the Twombly and Iqbal cases which set the applicable pleading standards for these types of cases.
Assuredly to satisfy the above mentioned pleading requirements, the complaint describes in great detail the economic realities of shipping in the Pacific. It alleged the highly concentrated market, the high barriers to entry, the ease of information sharing, the lack of alternatives to ocean shipping, the fungible nature of shipping ocean containers, and the market similarities between Puerto Rico and Hawaii/Guam.
This will be an interesting case to watch for both maritime attorneys and all federal court litigants who prosecute or defend claims of conspiracy and antitrust violations.
It is indeed interesting to watch the maritime attorneys and federal court litigants who prosecute or defend claims of conspiracy and antitrust violations.
Issues like this really need thorough investigation and discussion.
Posted by: Cherie@Hawaii pacific investigations | August 26, 2011 at 01:20 AM