In re Hawaiian & Guamanian Cabotage Antitrust
| Decision Date | 18 August 2009 |
| Docket Number | No. 08-md-1972 TSZ.,08-md-1972 TSZ. |
| Court | U.S. District Court — Western District of Washington |
| Parties | In re HAWAIIAN & GUAMANIAN CABOTAGE ANTITRUST LITIGATION. This Document Relates to: All Cases. |
Allen Steyer, Simon R. Goodfellow, Steyer Lowenthal Boodrookas Alvarez & Smith LLP, Laurence D. King, Linda M. Fong, Kaplan Fox & Kilsheimer LLP, Bruce L. Simon, Clifford H. Pearson, Daniel Warshaw, Esther L. Kilsura, Pearson Simon Warshaw & Penny LLP, Guido Saveri, Richard Alexander Saveri, Saveri & Saveri Inc., Joseph M. Alioto, Alioto Law Firm, Christopher L. Lebsock, Jon T. King, Michael Lehmann, Arthur N. Bailey, Hausfeld LLP, Craig C. Corbitt, Francis Onofrei Scarpulla, Patrick Bradford Clayton, Zelle Hofmann Voelbel Moason & Gette LLP, Joseph Marid Patane, Law Office of Joseph M. Patane, Lauren Clare Russell, Mario Nunzio Alioto, Trump Alioto Trump & Prescott LLP, San Francisco, CA, Dennis Stewart, Jennifer Anne Kagan, Sarah Pickeral Weber, Hullett Harper Stewart LLP, Christopher M. Burke, Scott & Scott LLP, Bonny E. Sweeney, David W. Mitchell, Thomas J. O'Reardon, II, Coughlin Stoia Geller Rudman & Robbins, San Diego, CA, Jay S. Cohen, Jonathan M. Jagher, William G. Caldes, Spector Roseman Kodroff & Willis PC, Anthony J. Bolognese, Bolognese & Associates LLC, Merrill G. Davidoff, Ruthane Gordon, Berger & Montague, PC, Philadelphia, PA, John McCarthy, Somers Point, NJ, John Murdock, Murdock & Goldenberg Schneider & Groh LPA, Cincinnati, OH, Marc Howard Edelson, Edelson & Associates LLC, Doylestown, PA, Philip A. Steinberg, Bala Cynwyd, PA, Kevin Bruce Love, Michael E. Criden, Hanz Criden & Love PA, South Miami, FL, Robert J. Kaplan, Kaplan Fox & Kilsheimer LLP, Seth R. Gassman, Cohen Milstein Hausfeld & Toll PLLC, Hollis Lee Salzman, Labaton Sucharow LLP, New York, NY, Glenn J. Stanford, Tam & Stanford, John S. Edmonds, Joy S. Omonaka, Ronald J. Verga, Edmonds & Verga, Honolulu, HI, J. Paul Sizemore, Jennifer Lenze, Thomas V. Girardi, Girardi & Keese, Edward Woords, Drier Stien Kahabrowne Woods George, Walter J. Jack, Engstrom Lipscombe & Lack, Brian S. Kabateck, Richard L. Kellner, Kabateck Brown Kellner LLP, Peter George Safirstien, Jeff S. Westerman, Milberg, Los Angeles, CA, Steve W. Berman, Anthony D. Shapiro, Ronnie S. Spiegel, Hagens Berman Sobol, Emillia L. Sweeney, Carney Badley Spellman, Seattle, WA, Christina L. Beatty-Walters, N. Robert Stoll, Stoll Stoll Berne Lokting Shlacter Portland, OR, Ara Ray Jabagchourian, Joseph W. Cotchett, Nanci E. Nishimura, Steven Williams, Stuart G. Gross, Cotchett Pitre Simon and McCarthy, Burlingame, CA, Eric M. George, Michael A. Bowse, Drier Stien Kahan Growne Woods George LLP, Beverly Hills, CA, Norman E. Siegel, Stueve Siegle Hanson LLP, Kansas City, MO, Paul Novak, Milberg LLP, Detroit, MI, John Charles Evans, Specter Specter Evans & Manogue PC, Pittsburgh, PA, Derek G. Howard, Gilmur Roderick Murray, Murray & Howard LLP, Larkspur, CA, Benjamin Doyle Brown, Michael D. Hausfeld, Cohen Milstein Hausfeld & Toll, Washington, DC, William Timothy Needham, Jansen Malloy Needham Morrison & Reinholsten LLP, Eureka, CA, Douglas A. Millen, Robert J. Wozniak, Sreven A. Kanner, Willian H. London, Freed Kanner London & Millen LLC, Bannockburn, IL, Harry Shulman, The Mills Law Firm, San Rafael, CA, Edward L. Birk, Michael B. Bittner, Marks Gray PA, Jacksonville, FL, Michael I. Fistel, Jr., Holzer, Holzer & Fistel, Lie, Atlanta, CA, Daniel C. Hedlund, Gustafson Gluek PLLC, Elizabeth R. Odette, Richard A. Lockridge, W. Joseph Bruckner, Lockridge Grindal Nauen, Minneapolis, MN, Alex C. Turan, Montura Law Group, Walnut Creek, CA, Donald Chidi Amamgbo, Amamgbo & Associates, Oakland, CA, Reginald Terrell, The Terrell Law Group, Richmond, CA, for Robert H. Steinberg, Acutron, Inc., 50th State Distributors, Inc., Versa Dock Hawaii LLC, Taste of Nature Inc., Next Transportation, LLC, Rhythm of Life Cosmetics Inc., Curtis Brunk, Winkler Woods LLC, Joshua Wagner, E & M International Transport Inc., Laura Cutler, SJ Venture Group LLC, Alpha Freight & Transport International, Inc., Jay Inouye, Brian Foster, Scott Jackson, Ruthanne Jackson.
Michael Cosman, pro se.
Eric Chase Roberson, McGuire Woods, LLP, Jacksonville, FL, for Alpha Freight & Transport International, Inc., Horizon Lines, LLC, Horizon Logistics, LLC, Crowley Maritime Corporation.
George A Nicoud, III, Joel Steven Sanders, Rachel S. Brass, Rebecca Justice Lazarus, Darin M. Sands, Gibson Dunn & Crutcher, San Francisco, CA, Amy B. Manning, Angelo M. Russo, Richard J. Rappaport, Tammy L. Adkins, Mcguire Woods, Chicago, IL, Craig D. Bachman, Lane Powell, Portland, OR, Darrel Christopher Menthe, Mcguire Woods LLP, Los Angeles, CA, Larry Steven Gangnes, Milo Petranovich, James B. Stoetzer, Lane Powell PC, Seattle, WA, James W McCready, III, Seipp Flick & Kissane, Miami, FL, Cristine M. Russell, Rogers Towers, PA, James M. Riley, Rogers Towers, PA, Scott David Richburg, Foley & Lardner, LLP, Jacksonville, FL, Timothy Joseph Armstrong, Coral Gables, FL, for Matson Navitgation Co Inc., Alexander & Baldwin Inc., Horizon Lines, LLC, Horizon Lines Holding Co., Crowley Maritime Corporation, Sea Star Lines, LLC, Trailer Bridge, Inc., Crowley Liner Services, Inc.
Brent Snyder, John Terzaken, III, Michael L. Whitlock, U.S. Dept of Justice, Anittrust Division, National Criminal Enforcement Section, Washington, DC, for John Terzaken.
ORDER NO. 5: Dismissal With Leave to Amend
THIS MATTER comes before the Court on defendants' joint motion, docket no. 86, to dismiss the Consolidated Class Action Complaint, docket no. 69 (the "Consolidated Complaint"), pursuant to Rule 12(b)(6). The Court has reviewed all papers filed in support of and in opposition to the motion and has considered the oral arguments of counsel presented on July 29, 2009. Having previously taken the matter under advisement, the Court now enters the following Order.
Plaintiffs, purchasers of shipping services between the continental United States and Hawaii, Guam, or both, allege that defendants, providers of such shipping services, violated Section 1 of the Sherman Act,1 by colluding to simultaneously increase fuel surcharges, by sharing vessel capacity, and by conspiring not to enter into extra-tariff rate agreements with customers. These assertions of anticompetitive activities in the Hawaii and Guam ocean trade were initially made by individual plaintiffs in separate cases filed in different districts, nineteen of which were transferred to this Court by the Multidistrict Litigation ("MDL") Panel pursuant to 28 U.S.C. § 1407. The transferred cases were consolidated for pretrial purposes with eight similar cases originally filed in this district. See Order No. 3 (docket no. 38). Pursuant to the agreement of the parties, plaintiffs were permitted to file the Consolidated Complaint now at issue. See id. at ¶ 4.
According to the Consolidated Complaint, plaintiffs are individuals or entities that directly purchased from defendants shipping services on ocean routes between the continental United States and Hawaii, Guam, or both, during the period between October 11, 1999, and May 31, 2008. Consolidated Complaint at ¶¶ 4-5 (docket no. 69). Defendant Matson Navigation Company, Inc. ("Matson") is a wholly-owned subsidiary of defendant Alexander & Baldwin, Inc. Id. at ¶ 33. Defendants Horizon Lines, LLC (formerly known as CSX Lines), Horizon Lines Holding Co., and Horizon Lines, Inc. (collectively, "Horizon") are affiliated companies. Id. at ¶¶ 36-38.
Pursuant to the Merchant Marine Act of 1920 (the "Jones Act"), trade between domestic United States ports is limited to "ships built in American shipyards, owned by American citizens, and operated under the American flag." OSG Bulk Ships, Inc. v. United States, 132 F.3d 808, 809-10 (D.C.Cir.1998); see also 46 U.S.C. §§ 12102, 12103, 12111, & 12112. This ocean trade has "significant legal and regulatory barriers to entry" and is "not a contestable market." Matson Navigation Co. v. Fed. Maritime Comm'n, 959 F.2d 1039, 1047 (D.C.Cir.1992) (emphasis in original) ( that a contestable market is one in which entry is possible with little or no sunk investment, exit is relatively cost-free, and no legal or regulatory barriers to entry or exit exist). Plaintiffs allege that Matson and Horizon together control 96% of the trade between the west coast of the continental United States and Hawaii and 100% of the trade between the west coast and Guam. Consolidated Complaint at ¶ 56 (docket no. 69). According to plaintiffs, Matson's and Horizon's (or its predecessors') relative market shares, at least in the Hawaii trade, remained fairly stable during the years between 1995 (68% and 28%, respectively) and 2003 (67% and 29%, respectively). Id. at ¶ 63.
Matson and Horizon are members of the Maritime Cabotage Task Force ("MCTF"), as well as the Transportation Institute. Id. at ¶¶ 68 & 69. Matson and Horizon provide data on container sizes and quantities, as well as cargo quantities, weights, and volumes, to the Port Import Export Reporting Service ("PIERS"), but no allegation has been made that PIERS is supplied with any pricing information. Id. at ¶ 71. Matson and Horizon are required to file their rates with the Surface Transportation Board, except as to statutorily exempted cargo or cargo carried under separate written agreements with specific shippers, in which both parties agree to waive their statutory rights. See id. at ¶ 80; see also 49 U.S.C. §§ 13702 & 14101(b). In the Consolidated Complaint, plaintiffs allege that defendants have colluded not to use extra-tariff written agreements with their customers; plaintiffs suggest that such agreements would be "confidential" and would inhibit defendants' ability to "mutually police each other's conduct." Consolidated Complaint at ¶ 80 (docket no. 69).
Beginning in October 1999, defend...
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