Nearly 40 U.S., P.R. companies file class-action suit against Sea Star, Crowley
Nearly 40 commercial customers who opted out of the $52.2 million settlement that maritime cargo companies Sea Star and Crowley reached with the U.S. government a few months ago have filed a new class-action suit against the carriers at the U.S. District Court in South Carolina.
The lawsuit, filed by a group of powerhouse companies including Arrowpack, Universal Container Line, Baxter Healthcare Corp., Pepsi Americas, The Coca-Cola Company, Caribbean Refrescos, Conagra Foods, Nestle USA, Nestle Puerto Rico, Payco Foods, Payless Shoesource, Frito-Lay, The Quaker Oats Company, and Tropicana Manufacturing, among others, seeks unspecified damages for the maritime shippers’ alleged violations to the Sherman Antitrust Act.
In the suit filed late last week, the plaintiffs charged the shippers of “unlawful combination and conspiracy” to manipulate capacity and fix shipping prices between the U.S. mainland and Puerto Rico from May 2002 to April 2008 that they said affected interstate commerce.
“Because of the unlawful conduct of the Defendants and their co-conspirators, plaintiffs paid artificially inflated rates, surcharges, and other fees for Puerto Rican cabotage and, as a result, have suffered antitrust injury to their businesses or property,” the lawsuit said.
The case names Sea Star Line, its Washington-based parent company Saltchuck Resources Inc., Crowley Maritime Corporation, Crowley Liner Services Inc. and former Saltchuck executive, Leonard Shapiro, as defendants.
The lengthy lawsuit also mentions several co-conspirators headed by Horizon Lines and several individual executives in Puerto Rico and the U.S. mainland, who the plaintiffs claimed participated in the unlawful practices first brought to the public eye following a Justice Department investigation into alleged price-fixing schemes between the U.S. and the island.
The civil suit is the newest court battle that Sea Star and Crowley are facing, since reaching plea agreements with the U.S. Department of Justice’s Antitrust Division late last year. While Sea Star agreed to pay a $14.2 million fine, Crowley paid $13.7 million to settle. In March 2011 Horizon was sentenced to pay $45 million over five years.
Kraft Foods filed a separate lawsuit at the same court seeking similar relief for its alleged losses.