honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Saturday, August 22, 2009

Shipping antitrust lawsuit dismissed


BY Greg Wiles
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

A judge ruled that those accusing Matson Navigation Co. and Horizon Lines of violating antitrust law didn't sufficiently show that the companies conspired on pricing.

ADVERTISER LIBRARY PHOTO | February 2006

spacer spacer

A U.S. District Court judge in Seattle has dismissed a class-action lawsuit alleging Matson Navigation Co. and Horizon Lines colluded to violate an antitrust law by simultaneously increasing fuel surcharges and other actions in their Hawai'i and Guam businesses.

The ruling notes the 27 plaintiffs failed to sufficiently show antitrust violations had occurred or the two shipping lines conspired on pricing.

Matson was hit with a spate of lawsuits last year after the U.S. Department of Justice searched Horizon's offices as part of a U.S. antitrust investigation of pricing practices among carriers serving Puerto Rico.

Matson later became involved in the investigation when it received a grand jury subpoena for documents related to pricing in domestic markets. Matson has about two-thirds of the Mainland-Hawai'i shipping trade, but does not operate in the Puerto Rico market.

Horizon has a little less than a third of the Mainland-Hawai'i business.

The lawsuits filed last year and consolidated into a single class-action suit were generally similar in nature in calling attention to the two shipping companies raising surcharges.

One of the plaintiffs, Aloha Agricultural Consultants Inc., had filed an action saying Matson's and Horizon's surcharges were an identical 1.75 percent when they were introduced in 1999 and had been raised 27 times at the same levels.

But in dismissing the cases, District Court Judge Thomas Zilly noted a U.S. Supreme Court ruling that said the practice of raising prices in lockstep by firms in a concentrated market was not in itself unlawful and must be accompanied by enough factual matter to suggest a pact between the two shipping lines existed.

"An allegation of parallel conduct and a bare assertion of conspiracy will not suffice," Zilly wrote in his ruling. He also noted that something known as the Filed Rate Doctrine precludes monetary relief for antitrust claims relating to tariffs or schedules filed with a federal regulatory agency.

The class-action lawsuit was dismissed without prejudice, meaning the plaintiffs could amend their lawsuit with claims that aren't barred by the Filed Rate Doctrine and are otherwise consistent with Zilly's dismissal order.

Matson said in a regulatory filing yesterday it will continue to strenuously fight the lawsuit should it be amended.

Horizon Lines in June agreed to pay $20 million to settle price-fixing lawsuits filed over its Puerto Rico service. At that time, Horizon said it still intended to vigorously defend the class-action lawsuit over its Hawai'i and Guam business.