Precision Assocs., Inc. v. Panalpina World Transp. (Holding) Ltd.

• Decision Date: 19 August 2015
• Docket Number: 08-CV-00042 (JG)(VVP)
• Parties: PRECISION ASSOCIATES, INC., et al., Plaintiffs, v. PANALPINA WORLD TRANSPORT (HOLDING) LTD., et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

PRECISION ASSOCIATES, INC., et al., Plaintiffs, v. PANALPINA WORLD TRANSPORT (HOLDING) LTD., et al., Defendants.

08-CV-00042 (JG)(VVP)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

August 19, 2015

FOR ONLINE PUBLICATION

MEMORANDUM AND ORDER

APPEARANCES:

LOCKRIDGE GRINDAL NAUEN P.L.L.P.

100 Washington Avenue South, Suite 2200

Minneapolis, MN 55401

By: W. Joseph Brockner

Heidi M. Silton

Anna M. Horning Nygren

Craig S. Davis

Kristen G. Marttila

Attorneys for Plaintiffs

LOVELL STEWART HALEBIAN JACOBSON LLP

61 Broadway, Suite 501

New York, NY 10006

By: Christopher Lowell

Gary S. Jacobson

Ian T. Stoll

Merrick S. Rayle

Benjamin M. Jaccarino

Attorneys for Plaintiffs

GUSTAFSON GLUEK PLLC

Canadian Pacific Plaza

120 South 6th Street, Suite 2600

Minneapolis, MN 55402

By: Daniel E. Gustafson

Daniel C. Hedlund

Michelle J. Looby

Joshua J. Rissman

Attorneys for Plaintiffs

COTCHETT, PITRE & MCCARTHY, LLP

San Francisco Airport Office Center

840 Malcolm Road, Suite 200

Burlingame, CA 94010

By: Steven N. Williams

Adam J. Zapala

Attorneys for Plaintiffs

CLEARY GOTTLIEB STEEN & HAMILTON LLP

2000 Pennsylvania Avenue NW

Washington, DC 20002

By: Mitchell A. Lowenthal

Jeremy Calsyn

Steven J. Kaiser

Attorneys for Defendants

JOHN GLEESON, United States District Judge:

This case involves allegations of multiple conspiracies to fix prices in the international commercial freight forwarding industry. Defendants Deutsche Post AG, DHL Express (USA), Inc., Exel Global Logistics, Inc., Air Express International (USA), Inc., and Danzas Corporation (the "DHL Defendants" or "DHL") move for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c). DHL seeks an order dismissing the remaining claims against them (i.e., Claims 1, 3, 5-6, and 8-10) to the extent they are based upon purchases made after October 11, 2007, on the ground that DHL had ceased their participation in the conspiracy by that date. For the reasons that follow, the motion is granted.

BACKGROUND

Plaintiffs originally filed suit on January 3, 2008 and have since filed four amended complaints, culminating in the "Corrected Third Amended Complaint" ("CTAC"), which alleges a class period ending on January 4, 2011. See CTAC ¶¶ 1, 19, 180, ECF No. 677.

A. DHL's Leniency Application

DHL argues that plaintiffs have not alleged any facts occurring after 2007 because the conspiracy ended when DHL applied for leniency from the government in October 2007. Defendant's Memorandum of Law ("Def. Br.") at 4, ECF. No 1183. First, DHL turned itself in to antitrust regulators in the United States and Europe in October 2007. CTAC ¶ 216. As such, one would not expect that an applicant for leniency continued to participate in the conspiracy after approaching the government and admitting to a violation of the Sherman Act. Def. Br. at 10; see also CTAC ¶ 135 (explaining that by seeking leniency Deutsche Post and all of its subsidiaries including DHL admitted to a violation of the Sherman Act). Additionally, on October 11, 2007, Bloomberg News reported that an unnamed company had turned itself in to regulators and triggered an international investigation, and the Associated Press reported that the company had provided documents sufficient to trigger the international investigation. CTAC ¶ 216. The CTAC acknowledges that the company was DHL, CTAC ¶ 216, and that DHL did in fact receive leniency. CTAC ¶ 265; see also CTAC ¶ 226 (describing various reports on October 11 and 12, 2007 that authorities were seeking information from DHL).

In addition to its leniency application, DHL puts forth other reasons why the class period cannot plausibly extend beyond October 2007. For example, DHL points to the fact that many freight forwarding companies entered into plea agreements with various antitrust enforcement agencies and those plea agreements refer to conduct relevant to the conspiracy continuing until about October 2007. Def. Br. at 3. DHL also notes that this Court certified a class in the related In re Air Cargo Shipping Services Antitrust Litigation, No. 06-MD-1775 with an end date of September 30, 2006.

B. The Last Overt Acts Alleged by Plaintiffs in the CTAC

The latest action the CTAC alleges with respect to DHL's participation in the conspiracies is May 2007. CTAC ¶¶ 478-85. The latest action the CTAC alleges with respect to other acts in furtherance of the conspiracies is for Claim 6, which plaintiffs allege lasted until January 2008. See CTAC ¶ 449. Plaintiffs, however, maintain that they have consistently pleaded that they do not know the end date of the conspiracies, and that the conspiracies were ongoing and open-ended in nature. Plaintiffs' Memorandum in Opposition ("Pl. Opp. Br.") at 2, ECF No. 1196. Specifically, the CTAC alleges that the antitrust surcharges "continued after November 2007 and until January 4, 2011," CTAC ¶ 182, and that "no agreement to withdraw and no affirmative acts of disbanding the unlawful agreements were taken by the conspirators through this period." CTAC ¶ 181. The CTAC alleges the following overt acts in connection with each of the remaining claims:

• Claim 1: At least as early as October 1, 2001, and continuing until a time unknown to the plaintiffs, DHL and others agreed to impose on customers a Security Surcharge fee for their freight forwarding services on all air cargo shipped around the world. CTAC ¶ 303. Some of the defendants met on October 4, 2001 in Frankfurt, Germany to discuss entering the Security Surcharge agreement. CTAC ¶ 314.

• Claim 3: At least as early as September 25, 2002, and continuing until a date unknown to the plaintiffs, DHL and others agreed to impose a New Export System ("NES") fee for air and ocean freight shipments from the United Kingdom to anywhere in the world. CTAC ¶ 338. This agreement was made through a series of exchanges and clandestine meetings held on or about October 1, 2002, June 2004 and October 2004. CTAC ¶ 339. These defendants were also invited to attend a meeting in November 2004 in order to monitor compliance with the agreement. CTAC ¶ 346.

• Claim 5: In July 2005, and continuing until a date unknown to the plaintiffs, DHL and others agreed to fix and maintain either the Chinese Currency Adjustment Factor ("CAF") Surcharge or quote new business in local Chinese currency ("RMB"). CTAC ¶ 380. Emails were exchanged between certain defendants as late as March 2006 suggesting to members of the conspiracy that they implement a CAF Surcharge increase. CTAC ¶¶ 439-40.

• Claim 6: At least as early as August 2005, and continuing until at least January 2008, DHL and others agreed to impose Peak Season Surcharge ("PSS") increases on air cargo shipments out of Asia to anywhere in the world. CTAC ¶ 450. Members of the conspiracy met on May 21, 2007 in Central Hong Kong SAR, China to discuss the PSS for 2007. CTAC ¶¶ 479-80. The CTAC also alleges that many of the defendants who pled guilty to imposing a PSS (which did not include DHL) admitted to doing so "beginning in or about August 2005 and continuing until in or about December 2007." CTAC ¶ 449 (quoting the DOJ plea agreements).

• Claim 8: Beginning in 2003 and 2004 and continuing until a date unknown to the plaintiffs, DHL and others agreed to fix and maintain charges affiliated with Air Automated Manifest System ("AMS") compliance for U.S. Freight Forwarding Services. CTAC ¶ 499. An April 29, 2005 PowerPoint presentation prepared by DHL discussed its profits from the AMS surcharges. CTAC ¶ 526.

• Claim 9: Beginning in or about 2002 and continuing until a date unknown to the plaintiffs, DHL and others agreed to impose AMS charges for U.S. Freight Forwarding Services on ocean freight shipments into the United States. CTAC ¶ 544. As late as September 21, 2004, members met to discuss whether to pass on Ocean AMS fees to customers. CTAC ¶ 556.

• Claim 10: DHL and others participated in a phone meeting on or around October 2001, in which high-ranking executives agreed to pass on to their customers all impending and future surcharges from air and ocean carriers. CTAC ¶ 565. The surcharges that were subject to this agreement included at least the following: the Security Surcharge, the Ocean AMS Surcharge, the Air AMS Surcharge, the NES Surcharge to the extent that it applied to a particular Defendant, the Peak Season Surcharges and the CAF Surcharge. CTAC ¶ 566.

DISCUSSION

A. The Applicable Legal Standards

1. The Rule 12(c) Motion for Judgment on the Pleadings

A motion for judgment on the pleading implicates the same legal standard that applies to a motion under Rule 12(b) to dismiss for failure to state a claim. Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010). In evaluating a motion to dismiss, I must determine whether the complaint contains sufficient factual allegations to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 545. At this stage, I must accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiffs. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). However, I am not bound to accept as true conclusory allegations or conclusions of law couched as factual allegations. Iqbal, 556 U.S. at 678.

I may also consider documentary exhibits or written instruments annexed to the complaint, documents integral to the parties' case and on which the complaint relies heavily, and matters subject to judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (citing 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure §1357 ...