Class action lawsuit filed against Puerto Rico carriers

A meat packing company has filed a class action lawsuit against the four major liner carriers operating between the U.S. mainland and Puerto Rico.

Century Packing Corp. on April 22 filed the case, which claims unlawful price setting in violation of the Sherman Act and asks for treble damages, in the U.S. District Court for the District of Puerto Rico in San Juan.

The Caguas, Puerto Rico-based company asks the suit be made into a class action with a jury trial that could potentially include hundreds or thousands of shippers that had purchased ocean carriage from the carriers between the U.S. mainland and Puerto Rico from at least as early as April 22, 2004, four years before the suit was filed.

The suit alleges during the period the defendants -- Horizon Lines, Sea Star Line, Trailer Bridge and Crowley Maritime -- conspired to fix, raise, maintain and/or stabilize prices on their routes to Puerto Rico.

It also said they insulated themselves from rising fuel costs via their fuel surcharges, thereby increasing profit margins in a declining market, directly contrary to what one would expect in a competitive market.

The lawsuit cited an investigation by the U.S. Justice Department into the mainland-Puerto Rico trade to bolster its complaint.

To obtain search warrants the United States had to have probable cause, accepted by a magistrate, to believe that it would obtain evidence of an antitrust violation as a result of executing the search warrant, the suit said.

The United States had to have evidence sufficient to warrant a person of reasonable caution to believe that raiding the offices of a seemingly lawful business would uncover evidence of antitrust violations and that claimed evidence had to have been examined and accepted by a magistrate. That belief, which was recounted in sworn affidavit or by testimony, must be grounded on reasonably trustworthy information, it added.

Neither Horizon Lines nor Trailer Bridge -- both public companies -- had an immediate comment on the lawsuit.

Source: American Shipper