China Airlines agrees to pay $90 million to settle antitrust class action

Posted on: June 23rd, 2014 by Steve Larson
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Fotolia PlaneChina Airlines Ltd. has agreed to pay $90 million to settle a class action claiming the carrier conspired to boost air cargo rates for the better part of a decade.

The carrier will pay the settlement in three $30 million annual installments beginning in June, according to the motion the plaintiffs filed for preliminary approval of the deal. The settlement is the product of long-running negotiations with China Airlines over its ability to pay to put an end to its role in the eight-year-old multidistrict litigation over the global cartel.

The deal brings the total defendants have agreed to pay out in the case to more than $835 million.

Most recently, Korean Air Lines and Singapore Airlines won initial approval for their $115 million and $92.4 million settlements in January, and Cathay Pacific Airways Ltd. Agreed to pay $65 million to settle the case in February.

The MDL dates back to 2006, when consumers brought more than 90 lawsuits against more than two dozen airlines after the U.S. Department of Jutice and the European Commission began investigating the air freight industry.

According to the DOJ, the conspirators used meetings, conversations and other communications to determine the rates the airlines should charge for various routes. The airlines and former executives then imposed the agreed-upon rates and participated in subsequent meetings in the U.S. and other countries to enforce the price-fixing plots, the government alleged.

In late 2010, China Airlines agreed to pay a $40 million criminal fine to resolve the DOJ’s probe. According to the settlement documents, the carrier initially discussed settling with private plaintiffs around that time, but the talks ultimately fell apart and did not resume until late 2013.

Although both direct and indirect purchasers initially brought suits, the Second Circuit upheld the dismissal of indirect purchaser plaintiffs in 2012, saying that federal aviation law preempted price-fixing claims brought against foreign carriers under state antitrust statutes.

The case is In re: Air Cargo Shipping Services Antitrust Litigation, case number 1:06-md-01775, in the U.S. District Court for the Eastern District of New York.