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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
IN RE AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION MDL No. 1775
06-MD-1775 (BMC) (VVP) THIS DOCUMENT RELATES TO: All Actions
PLAINTIFFS’ NOTICE OF MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT WITH DEFENDANTS AIR CHINA LIMITED AND AIR CHINA
CARGO COMPANY LIMITED
PLEASE TAKE NOTICE THAT, upon the Declaration of Hollis Salzman in Support of
Plaintiffs’ Motion for Preliminary Approval of Settlement with Defendants Air China Limited
and Air China Cargo Company Limited (“Air China”), dated February 5, 2016, along with its
supporting exhibit, and the Memorandum of Law in Support of Plaintiffs’ Motion for
Preliminary Approval of Settlement with Defendants Air China Limited and Air China Cargo
Company Limited, dated February 4, 2016, and all other papers and proceedings herein,
plaintiffs will move this Court on a date and time to be set by the Court, before the Honorable
Brian M. Cogan, United States District Judge, at the United States Courthouse, 225 Cadman
Plaza East, Brooklyn, New York, pursuant to Rule 23 of the Federal Rules of Civil Procedure, to
enter an order:
i. Preliminarily approving the Settlement Agreement between plaintiffs and Air China with an Execution Date of February 4, 2016 (the “Air China Settlement Agreement”), on the grounds that its terms are sufficiently fair, reasonable, and adequate for notice to be issued to the Class;
ii. Ordering Class Counsel to submit at a later date proposed notices for approval by the Court of the form of notice and the notice plan;
iii. Approving The Garden City Group as administrator of the settlement, and Citibank as escrow agent; and
iv. Granting such other and further relief as may be appropriate.
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Oral argument on this motion, if any, will be held on a date and time set by the Court. Dated: February 5, 2016 Robert N. Kaplan Gregory K. Arenson Elana Katcher KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor New York, NY 10022 (212) 687-1980 Gary L. Specks KAPLAN FOX & KILSHEIMER LLP 423 Sumac Road Highland Park, IL 60035 (847) 831-1585 By: /s/ Robert N. Kaplan
Hollis Salzman Meegan Hollywood ROBINS KAPLAN LLP 601 Lexington Avenue, Suite 3400 New York, NY 10022 (212) 980-7400 By: /s/ Hollis L. Salzman
Michael D. Hausfeld Brent W. Landau Hilary K. Scherrer Melinda Coolidge HAUSFELD LLP 1700 K Street, N.W., Suite 650 Washington, DC 20006 (202) 540-7200 By: /s/ Michael D. Hausfeld
Howard J. Sedran Austin B. Cohen Keith J. Verrier LEVIN, FISHBEIN, SEDRAN & BERMAN 510 Walnut Street Philadelphia, PA 19106 (215) 592-1500 By: /s/ Howard J. Sedran
Class Counsel
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
IN RE AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION MDL No. 1775
Master File 06-MD-1775 (BMC) (VVP) THIS DOCUMENT RELATES TO: All Actions
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT
WITH DEFENDANTS AIR CHINA LIMITED AND AIR CHINA CARGO COMPANY LIMITED
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TABLE OF CONTENTS Page
TABLE OF AUTHORITIES .......................................................................................................... ii
I. INTRODUCTION .............................................................................................................. 1
II. BACKGROUND ................................................................................................................ 1
A. The Litigation................................................................................................................ 1
B. Settlement Negotiations ................................................................................................ 4
1. The Class ............................................................................................................5
2. The Settlement Fund ..........................................................................................5
3. The Cooperation Provisions ...............................................................................5
4. The Release ........................................................................................................6
5. Rescission Based on Opt-Outs ...........................................................................7
III. ARGUMENT ...................................................................................................................... 8
A. The Settlement of Complex Litigation Is Favored ....................................................... 8
B. The Proposed Settlement Exceeds the Standards for Preliminary Approval ................ 9
1. The Proposed Settlement Is the Result of Arm’s-Length Negotiations Conducted by Highly Experienced Counsel. ..............................11
2. The Proposed Settlement Falls Within the Range of Possible Approval. .........................................................................................................13
C. Notice to the Class ...................................................................................................... 14
IV. PRELIMINARY APPROVAL ORDER........................................................................... 14
V. CONCLUSION ................................................................................................................. 14
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TABLE OF AUTHORITIES
Cases Page(s)
In re Air Cargo Shipping Servs. Antitrust Litig., 240 F.R.D. 56 (E.D.N.Y. 2006) ...............................................................................................12
In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-01775, 2011 WL 2909162 (E.D.N.Y. July 15, 2011) ............................. 8-9, 11, 12
In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-1775, 2009 WL 3077396 (E.D.N.Y. Sept. 25, 2009) ..................................8, 11, 12
In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-1775, 2012 WL 3138596 (E.D.N.Y. Aug. 2, 2012) ..............................................12
Bano v. Union Carbide Corp., 273 F.3d 120 (2d Cir. 2001).......................................................................................................9
Bourlas v. Davis Law Assocs., 237 F.R.D. 345 (E.D.N.Y. 2006) .........................................................................................9, 10
In re Chambers Dev. Sec. Litig., 912 F. Supp. 822 (W.D. Pa. 1995) ...........................................................................................13
City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974)...............................................................................................10, 14
In re Currency Conversion Fee Antitrust Litig., No. 01 MDL 1409, 2006 WL 3247396 (S.D.N.Y. Nov. 8, 2006) .............................................9
In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004) .....................................................................................8, 9, 12
In re Joint E. & S. Dists. Asbestos Litig., 878 F. Supp. 473 (E.D.N.Y. 1995) ..........................................................................................11
In re Med. X-Ray Film Antitrust Litig., No. CV 93-5904, 1997 WL 33320580 (E.D.N.Y. Dec. 26, 1997) ..........................................10
In re Mut. Funds Inv. Litig., No. 04-md-15861, 2010 WL 2342413 (D. Md. May 19, 2010) ................................................7
In re NASDAQ Mkt.-Makers Antitrust Litig., 176 F.R.D. 99 (S.D.N.Y. 1997) .................................................................................1, 9, 10, 13
In re NASDAQ Mkt.-Makers Antitrust Litig., 187 F.R.D. 465 (S.D.N.Y. 1998) .......................................................................................11, 13
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In re PaineWebber Ltd. P’ships Litig., 171 F.R.D. 104 (S.D.N.Y. 1997) .............................................................................................11
In re Sterling Foster & Co. Sec. Litig., 238 F. Supp. 2d 480 (E.D.N.Y. 2002) .....................................................................................11
In re Twinlab Corp. Sec. Litig., 187 F. Supp. 2d 80 (E.D.N.Y. 2002) .......................................................................................11
Wal-Mart Stores, Inc. v. Visa U.S.A. Inc., 396 F.3d 96 (2d Cir. 2005).........................................................................................................9
Statutes
15 U.S.C. § 1 ....................................................................................................................................1
Other Authorities
Fed. R. Civ. P. 23 .........................................................................................................................1, 2
Manual for Complex Litigation (Fourth) § 21.63 (2004) ................................................................9
Manual for Complex Litigation (Third) § 30.14 (1995) ................................................................10
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I. INTRODUCTION
Plaintiffs have negotiated a settlement with defendants Air China Limited and Air China
Cargo Company Limited (collectively, “Air China”) in the amount of $50,000,000.00 (the
“Settlement Amount”).1 Because this is an excellent result for the Class, plaintiffs seek
preliminary approval of this settlement under Federal Rule of Civil Procedure 23(e). At the
preliminary approval stage, the Court only determines if, on its face, the proposed settlement is
“at least sufficiently fair, reasonable and adequate to justify notice to those affected and an
opportunity to be heard” or, put another way, the Court is to make sure that the settlement is
within the range of possible approval. See In re NASDAQ Mkt.-Makers Antitrust Litig., 176
F.R.D. 99, 102 (S.D.N.Y. 1997) (“NASDAQ I”). As detailed below, the settlement is well within
the range for possible approval and should be preliminarily approved by this Court under Rule
23(e).
II. BACKGROUND
A. The Litigation
This litigation commenced in early 2006. The First Consolidated Amended Complaint
filed in February 2007 named more than two dozen defendant air carriers, including Air China.
Plaintiffs alleged that defendants conspired to unlawfully fix prices of airfreight shipping
services worldwide, including on cargo shipments to, from, and within the United States, by,
among other things, concertedly levying agreed-upon, artificially inflated surcharges, in violation
of Section 1 of the Sherman Act, 15 U.S.C. § 1.
Defendants’ motions to dismiss plaintiffs’ claims were denied on August 21, 2009. The
parties then undertook and completed discovery including more than 90 depositions.
1 All terms used in this Memorandum and accompanying documents have the same meaning as
defined in the Settlement Agreement.
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After extensive submissions, including expert declarations, and three days of expert
testimony, on October 15, 2014, Magistrate Judge Pohorelsky issued a 114-page Report and
Recommendation (“Class Cert. R&R”) recommending that plaintiffs’ motion for class
certification be granted and certain testimony of defendants’ experts be stricken. See ECF No.
2055. The Class Cert. R&R was then adopted by the Court over defendants’ objections on July
10, 2015. See ECF 2282 (as amended on August 3, 2015 (ECF 2326)). Defendants sought to
appeal under Rule 23(f), but, on November 3, 2015, the Second Circuit denied the motion. Case
15-2361, Document 36. The Court then entered an order on November 6, 2015, ECF No. 2370,
directing that notice be sent to class members informing them of the Court’s ruling to certify the
Class.
Plaintiffs and certain defendants, including Air China, filed summary judgment motions
on April 24, 2015. Plaintiffs filed motions against the affirmative defenses of state action, act of
state, foreign sovereign compulsion, international comity, filed rate, and Noerr-Pennington. Air
China filed a motion based on its purported non-involvement in the alleged worldwide
conspiracy. Along with the other remaining defendants, Air China, filed motions regarding
plaintiffs’ fuel surcharge claims, security surcharge claims, purported failure to prove antitrust
damages, and claims allegedly barred by the statute of limitations, as well as on the above-
identified affirmative defenses. On August 31, 2015, the Court denied defendants’ motions for
summary judgment and granted all of plaintiffs’ summary judgment motions on defendants’
affirmative defenses. See ECF No. 2342 (minute entry).
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Thus far, the Court has granted final approval to 22 settlements2 and preliminary approval
to four additional settlements.3 Notice has gone out to all Class members regarding the first three
of the settlements.
2 (1) Deutsche Lufthansa AG, Lufthansa Cargo AG, and Swiss International Air Lines Ltd.
(collectively “Lufthansa”): $85 million, plus the cost of providing notice to the class and cooperation (final approval granted September 25, 2009 (ECF No. 963)) (unlike subsequent settlements, which include payments only to direct purchasers, the Lufthansa settlement included payments both to direct and indirect purchasers); (2) Société Air France (“Air France”), Koninklijke Luchtvaart Maatschappij N.V. (“KLM”), and Martinair Holland N.V. (“Martinair”) (collectively “Air France/KLM”): $87 million, plus notice costs up to $500,000 and cooperation (final approval granted March 14, 2011 (ECF No. 1414)); (3) JAL: $12 million, plus cooperation (final approval granted March 14, 2011 (ECF No. 1417)); (4) AMR Corporation and American Airlines, Inc. (collectively, “AA”): $5 million, plus the cost of providing notice to the class and cooperation (final approval granted March 14, 2011 (ECF No. 1413)); (5) Scandinavian Airlines System and SAS Cargo Group A/S (collectively, “SAS”): $13.93 million, plus notice costs up to $500,000 and cooperation (final approval granted effective March 17, 2011 (ECF No. 1416)); (6) All Nippon Airways Co., Ltd. (“ANA”): $10.4 million, plus cooperation (final approval granted July 15, 2011 (ECF No. 1524)); (7) Cargolux Airlines International S.A. (“Cargolux”): $35.1 million, plus notice costs of up to $150,000 and cooperation (final approval granted July 15, 2011 (ECF No. 1524)); (8) Thai Airways International Public Company Limited (“Thai”): $3.5 million plus cooperation (final approval granted July 15, 2011 (ECF No. 1524)); (9) Qantas Airways Limited (“Qantas”): $26.5 million, plus notice costs of up to $250,000 and cooperation (final approval granted August 4, 2011 (ECF No. 1524)); (10) LAN Airlines, S.A., LAN Cargo S.A., and Aerolínhas Brasileiras, S.A. (“LAN/ABSA”): $66 million, plus notice costs up to $150,000 and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (11) British Airways PLC (“BA”): $89.512 million, plus notice costs up to $500,000 and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (12) Malaysia Airlines (“Malaysia”): $3.2 million, plus $150,000 toward the cost of notice and settlement administration and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (13) South African Airways (“SAA”): $3.29 million plus $150,000 toward the cost of notice and settlement administration and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (14) Saudi Arabian Airlines, Ltd. (“Saudia”): $14 million and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (15) Emirates: $7.833 million and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (16) El Al Israel Airlines Ltd. (“El Al”): $15.8 million and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (17) Air Canada and AC Cargo LP (collectively, “Air Canada”): $7.5 million and cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (18) Salvatore Sanfilippo (“Sanfilippo”), a managerial employee of Defendant Air New Zealand: cooperation (final approval granted August 2, 2012 (ECF No. 1732)); (19) Korean Air Lines Co., Ltd.: $115 million and cooperation (ECF No. 2362); (20) Singapore Airlines Limited and Singapore Airlines Cargo PTE, Ltd. (“Singapore Airlines”): $92.5 million and cooperation (ECF No. 2362); (21) Cathay Pacific Airways Limited: $65 million and cooperation (ECF No. 2362); and (22) China Airlines, Ltd.: $90 million and cooperation (ECF No. 2362).
3 (1) Asiana Airlines, Inc.: $55 million and cooperation (ECF No. 2056); (2) Nippon Cargo Airlines Co., Ltd.: $36.35 million, plus $200,000 in notice costs and cooperation (ECF No. 2098); (3) EVA Airways Corporation: $99 million, plus $200,000 in notice costs and cooperation (ECF No. 2183). The final approval hearing for these three settlements is scheduled for March 24, 2016 (ECF No. 2370); and (4) Polar Air Cargo LLC, Polar Air Cargo Worldwide, Inc., and Atlas Air Worldwide Holdings, Inc.
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B. Settlement Negotiations
The first discussions between plaintiffs and Air China exploring the possibility of
settlement occurred over four years ago and were ultimately non-productive. See Declaration of
Hollis Salzman in Support of Plaintiffs’ Motion for Preliminary Approval of Settlement With
Defendants Air China Limited and Air China Cargo Company Limited, dated February 5, 2016
(“Salzman Decl.”), ¶ 2. After the Court’s rulings on class certification and summary judgment,
settlement discussions resumed in earnest between November and December 2015, with several
email and phone communications between counsel. Id. ¶ 3.
On December 15, 2015, the parties attended an all-day mediation before Eric D. Green, a
well-known mediator. Id. ¶ 3. The mediation was attended by several Air China executives, as
well as counsel for plaintiffs and Air China. Id. It resulted in an agreement in principle. Id.
Following additional negotiations regarding the terms of the settlement, counsel for plaintiffs and
Air China signed the Settlement Agreement with an execution date of February 4, 2016. Id. ¶ 4.
Both sides vigorously negotiated their respective positions on all material terms of the
Settlement Agreement, and the negotiations were non-collusive. Id. ¶ 5. By the time of the 2015
settlement negotiations, Class Counsel were well informed of the facts and issues concerning
liability and damages and the relative strengths and weaknesses of each side’s litigation position.
Id. ¶ 6.
The Settlement Agreement, attached to the Salzman Declaration as Exhibit A, includes
the following material terms:
(collectively “Polar”): $100 million. The final approval hearing for the first three settlements is scheduled for March 24, 2016 (ECF No. 2370).
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1. The Class
Pursuant to the Court’s Order dated July 10, 2015, as amended on August 3, 2015 (ECF
No. 2326), the Class is:
All persons or entities (but excluding Defendants, their parents, predecessors, successors, subsidiaries, affiliates, as well as government entities) who purchased airfreight shipping services for shipments to or from the United States directly from any of the Defendants or from any of their parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from January 1, 2000 up to and including September 30, 2006.
Settlement Agreement, ¶ 25.4 Therefore, it is not necessary for the Court to make a determination
of a settlement class for purposes of approving the Settlement Agreement.
2. The Settlement Fund
Pursuant to the terms of the Settlement Agreement, Air China will pay the Settlement
Amount into an escrow account within forty-five (45) days of the Execution Date. Id. ¶ 36. From
the Settlement Amount, the sum of $250,000 may be used for reasonable costs of disseminating
notice of the Settlement Agreement, including the cost of administration. Id. ¶ 37. All income
earned on the Settlement Fund shall become and remain part of the Settlement Fund. Id. ¶ 40.
3. The Cooperation Provisions
Air China has agreed to provide cooperation to the Class that will aid in the prosecution
of antitrust claims against the remaining defendants. Air China has agreed to produce, through
affidavits or declarations or, if necessary, through deposition or testimony at trial, representatives
who are qualified to authenticate Air China’s documents and information that have been
provided in this Action, and, to the extent possible, confirm that such documents and information
are business records. Id. ¶ 48.
4 As defined in the Settlement Agreement, the term “Defendant” means any party named as a
defendant in the First Consolidated Amended Complaint in this Action or named thereafter as a defendant in the Action up to and including the Preliminary Approval Date. See Settlement Agreement, ¶ 10.
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4. The Release
In exchange for Air China’s consideration, the Released Parties (as defined in the
Settlement Agreement) shall be completely released, acquitted, and forever discharged from any
and all claims, demands, actions, potential actions, suits and causes of action, losses, obligations,
damages, matters and issues of any kind or nature whatsoever, and liabilities of any nature on
account of or arising out of or resulting from or in any way related to any conduct regardless of
where it occurred at any time prior to the effective date concerning the direct purchase from Air
China or any other defendant of airfreight shipping services to or from the United States or
concerning the pricing, selling, discounting or marketing of airfreight shipping services for
shipments to or from the United States, including without limitation, claims based in whole or in
part on the facts, occurrences, transactions, or other matters alleged in the Action or otherwise
the subject of the Action (and specifically including, without limitation, Claims in any way
related to cargo rates, fuel surcharges, security surcharges, insurance surcharges, United States
customs surcharges, war risk surcharges, commissions, incentives, rebates, credits, yields, or any
other element of the price of or the compensation related to Airfreight Shipping Services), which
arise under any antitrust, unfair competition, unfair practices, price discrimination, unitary
pricing, trade practice, consumer protection, unjust enrichment, civil conspiracy law, or any
other law.5 Id. ¶ 33. However, there is no release of any claims (a) made with respect to any
indirect purchase of airfreight shipping services; or (b) for negligence, breach of contract,
bailment, failure to deliver, lost goods, damaged or delayed goods or similar claim between any
of the released parties and any of the releasing parties relating to airfreight shipping services. Id.
5 The full language of the release provisions is found at ¶¶ 33-35 of the Settlement Agreement.
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5. Rescission Based on Opt-Outs
The Settlement Agreement permits Air China to rescind the agreement based upon the
ratio of opt-outs from the Class, but, unlike some prior settlements, it does not provide for any
reduction of the Settlement Amount based on opt-outs. The Settlement Agreement permits Air
China to elect between two types of opt-out ratios: (1) the “Opt-Out Ratio,” which is calculated
by dividing the U.S. dollar amount of all Opt-Out Sales by the U.S. dollar amount of all
Defendants’ direct sales to the Class; or (2) the “Alternative Opt-Out Ratio,” which is calculated
by dividing the U.S. dollar amount of Air China’s direct sales to an Opt-Out Plaintiff by the U.S.
dollar amount of Air China’s direct sales to the Class. Id. ¶¶ 3, 15, 44. If the Opt-Out Ratio or
Alternative Opt-Out Ratio exceed a certain threshold, which is set forth in a separate side letter
agreement between the parties, Air China has the option to rescind the agreement. Id. ¶¶ 44-46.6
In the Notice to the Class approved by the Court regarding class certification, all Class
members that wish to opt out of the certified Class must postmark their opt-out requests no later
than January 22, 2016. See November 6, 2015 Order. On or before February 11, 2016, plaintiffs
will provide Air China with: (1) a list of all Opt-Out Plaintiffs; (2) for each Opt-Out Plaintiff,
that Opt-Out Plaintiff’s Opt-Out Sales; and (3) the Opt-Out Ratio. Id. ¶ 44(a).
6 The Opt-Out Ratio and Alternative Opt-Out Ratio are reflected in a confidential letter between
the parties and can be made available to the Court, if requested. See In re Mut. Funds Inv. Litig., No. 04-md-15861, 2010 WL 2342413 (D. Md. May 19, 2010) (side letter reflecting terms of opt-out rescission agreement).The percentage amount of purchases represented by Opt-Out Plaintiffs that triggers the right of the parties to rescind the agreement is often referred to as a “blow percentage.” The exact blow percentage is not relevant to Class members’ decisions as to whether to remain in or exclude themselves from the Class. Rather, what is relevant is the amount being paid, the cooperation terms, the release terms, and the fact that the sales by Air China remain in the case. Moreover, this Court has granted both preliminary and final approval to prior settlements that had been accompanied by a confidential side letter reflecting the terms of an opt-out rescission agreement by the parties. See e.g., Cargolux Prel. App. Order (ECF No. 1362); Cargolux Final App. Order (ECF No. 1524); El Al Prel. App. Order (ECF No. 1630); El Al Final App. Order (ECF No. 1732); Cathay Pacific Prel. App. Order (ECF No. 1992); Asiana Prel. App. Order (ECF No. 2056).
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In the event that Air China dispute plaintiffs’ claimed Opt-Out Sales or Opt-Out Ratio, or
if Air China believes in good faith that the Alternative Opt-Out Ratio should apply, Air China
will provide notice to Class Counsel by February 29, 2016, stating the grounds for its dispute or
election to apply the Alternative Opt-Out Ratio. Id. ¶ 44(b). Concurrent with any notice
regarding its intent to apply the Alternative Opt-Out Ratio, for each Opt-Out Plaintiff, Air China
shall provide Class Counsel the total U.S. dollar amount of Air China’s direct sales to that Opt-
Out Plaintiff during the Class Period and the resulting Alternative Opt-Out Ratio. Id. In the event
that Air China requests application of the Alternative Opt-Out Ratio, such request shall become
effective, and replace the Opt-Out Ratio. Id. Class Counsel shall respond to such notification on
or before March 10, 2016. Id.
If the Opt-Out Ratio or the Alternative Opt-Out Ratio equals or exceeds the amount
agreed to by the parties, then Air China will have the option to rescind the Settlement Agreement
within ten business days after agreement or resolution of any dispute as to the Opt-Out Ratio or
Alternative Opt-Out Ratio. Id. ¶ 44(c). Air China is not obligated to rescind the Settlement
Agreement, but it is obligated to first discuss with plaintiffs in good faith whether the Settlement
Agreement can be re-negotiated rather than rescinded. Id.
III. ARGUMENT
A. The Settlement of Complex Litigation Is Favored
Plaintiffs and Air China have reached an agreement that maximizes plaintiffs’ recovery
and provides cooperation from Air China in the prosecution of plaintiffs’ claims against the
remaining non-settling defendants. Plaintiffs have avoided the potential risks inherent in complex
antitrust class action litigation and secured a substantial cash payment from Air China, as well as
significant other benefits for the Class. Reaching such a positive result at this stage in the
litigation enhances the attractiveness of this settlement. See In re Global Crossing Sec. & ERISA
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Litig., 225 F.R.D. 436, 455 (S.D.N.Y. 2004) (“[F]ederal courts favor settlement, especially in
complex and large-scale disputes, so as to encourage compromise and conserve judicial and
private resources.”). Further, the Court should be mindful of the “general public policy favoring
settlement.” In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-1775, 2009 WL
3077396, at *6 (E.D.N.Y. Sept. 25, 2009) (approving the Lufthansa settlement); see also In re
Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-01775, 2011 WL 2909162, at *3
(E.D.N.Y. July 15, 2011); Report & Recommendation (ECF No. 625) (the “Lufthansa Prel. App.
R&R”), at 14; Bourlas v. Davis Law Assocs., 237 F.R.D. 345, 354-55 (E.D.N.Y. 2006) (noting
that class actions are amenable to settlement “because of the difficulties of proof, the
uncertainties of the outcome, and the typical length of the litigation”); Bano v. Union Carbide
Corp., 273 F.3d 120, 129-30 (2d Cir. 2001).
B. The Proposed Settlement Exceeds the Standards for Preliminary Approval
When parties to a class action seek to settle, they must proceed before the court in two
steps: first, they must seek preliminary approval of the proposed settlement and then, should such
preliminary approval be granted, they must provide notice to the class and appear at a fairness
hearing, after which the court may grant final approval to the settlement. See Manual for
Complex Litigation (Fourth) § 21.63 (2004); NASDAQ I, 176 F.R.D. at 102. Because the first
step of this process is only “preliminary,” the standards for preliminary approval are less
exacting than those applied to final approval. “[A] court must determine whether the terms of the
proposed settlement warrant preliminary approval. In other words, the court must make ‘a
preliminary evaluation’ as to whether the settlement is fair, reasonable and adequate.” In re
Currency Conversion Fee Antitrust Litig., No. 01 MDL 1409, 2006 WL 3247396, at *5
(S.D.N.Y. Nov. 8, 2006) (citation omitted); see also Wal-Mart Stores, Inc. v. Visa U.S.A. Inc.,
396 F.3d 96, 116 (2d Cir. 2005). Preliminary approval of a proposed settlement is granted so
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long as the settlement was arrived at through a fair process and the terms of the settlement are
within the “range of possible approval.” NASDAQ I, 176 F.R.D. at 102 (emphasis added).
In conducting this inquiry, a court considers both the negotiating process leading up to
the settlement and the settlement’s substantive terms. Global Crossing, 225 F.R.D. at 455. A
court determines whether the settlement is “at least sufficiently fair, reasonable and adequate to
justify notice to those affected and an opportunity to be heard.” NASDAQ I, 176 F.R.D. at 102
(citations omitted). Preliminary approval should be granted “if the settlement is the result of
serious, informed and non-collusive negotiations and the proposed settlement has no obvious
deficiencies, such as giving preferential treatment to class representatives, or granting excessive
attorneys’ fees.” In re Med. X-Ray Film Antitrust Litig., No. CV 93-5904, 1997 WL 33320580, at
*6 (E.D.N.Y. Dec. 26, 1997) (citing NASDAQ I, 176 F.R.D. 99, and Manual for Complex
Litigation (Third) § 30.14 (1995)). In considering preliminary approval, the sole issue is whether
the proposed settlement falls within the range of possible approval. NASDAQ I, 176 F.R.D. at
102.
The negotiations here were conducted by experienced counsel on both sides at arm’s
length, spanned several weeks, and included an all-day mediation. See Salzman Decl. ¶¶ 3-4.
Plaintiffs’ counsel were well-informed of the material facts, and the negotiations were non-
collusive. Id. ¶¶ 5-6. Further, the substantial cash payment makes this settlement fall well within
the range of possible approval. Based upon these facts, preliminary approval is warranted, and,
as will be demonstrated in detail at the final fairness hearing, this settlement is a “fair,
reasonable, and adequate” settlement of the Class’s claims. See City of Detroit v. Grinnell Corp.,
495 F.2d 448, 463 (2d Cir. 1974).7
7 There are nine relevant factors that courts consider in evaluation a settlement’s substantive terms at
the time of final approval: (1) the complexity, expense and likely duration of the litigation; (2) the
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11
1. The Proposed Settlement Is the Result of Arm’s-Length Negotiations Conducted by Highly Experienced Counsel.
The process that led to this proposed settlement was facilitated by a highly experienced
mediator and was fairly conducted by highly-qualified counsel who sought to obtain the best
possible result for their clients and the Class. When counsel engages in an arm’s-length
negotiation that results in a settlement, courts find that the settlement is entitled to a presumption
of fairness. See In re Air Cargo Shipping Servs. Antitrust Litig., 2009 WL 3077396, at *7
(finding Lufthansa settlement “procedurally fair because it was the product of arm’s length
negotiations between experienced and capable counsel”); see also In re Air Cargo Shipping
Servs. Antitrust Litig., 2011 WL 2909162, at *4; In re NASDAQ Mkt.-Makers Antitrust Litig.,
187 F.R.D. 465, 474 (S.D.N.Y. 1998) (“NASDAQ II”) (“[s]o long as the integrity of the arm’s
length negotiation process is preserved … a strong initial presumption of fairness attaches to the
proposed settlement”); In re Sterling Foster & Co. Sec. Litig., 238 F. Supp. 2d 480, 484
(E.D.N.Y. 2002); In re Twinlab Corp. Sec. Litig., 187 F. Supp. 2d 80, 83 (E.D.N.Y. 2002); In re
Joint E. & S. Dists. Asbestos Litig., 878 F. Supp. 473, 567 (E.D.N.Y. 1995). Further, when the
settlement that results from such negotiations is being championed by experienced and informed
counsel, courts afford counsel’s opinion considerable weight because they are closest to the facts
and risks associated with the litigation itself. See Joint E., 878 F. Supp. at 567 (“[a] substantial
factor in determining the fairness of a settlement is the opinion of counsel involved in the
reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; and (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation. Grinnell, 495 F.2d at 463. As this Court has recognized, there is little to be gained by applying the Grinnell factors at the preliminary approval stage. See Bourlas, 237 F.R.D. at 356 n.7 (“it is apparent that several of the Grinnell factors themselves were designed for application at a later stage in the class settlement approval process”). As a result, they are discussed here only when they provide a useful guide to assess the settlement’s fairness at this stage.
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12
settlement” (citations omitted)); In re PaineWebber Ltd. P’ships Litig., 171 F.R.D. 104, 125
(S.D.N.Y. 1997) (stating that “great weight” is accorded to the recommendations of counsel, who
are most closely acquainted with the facts of the underlying litigation). The process that led to
this settlement confirms that the initial presumption of fairness is correct.
The Court has found that Class Counsel are highly capable and have the requisite
qualifications and experience to handle this litigation. See Class Cert. R&R at 56 (“as the court
has already noted on several occasions, the proposed class counsel is undoubtedly qualified to
maintain this action”), adopted July 10, 2015, and amended on August 3, 2015; Lufthansa Prel.
App. R&R, at 8-9; see also In re Air Cargo Shipping Servs. Antitrust Litig., 240 F.R.D. 56, 57
(E.D.N.Y. 2006); In re Air Cargo Shipping Servs. Antitrust Litig., No. 06-md-1775, 2012 WL
3138596, at *4 (E.D.N.Y. Aug. 2, 2012) (incorporating the reasoning and conclusions set forth in
the Court’s previous opinions approving settlements in this litigation); In re Air Cargo Shipping
Servs. Antitrust Litig., 2011 WL 2909162, at *6; In re Air Cargo Shipping Servs. Antitrust Litig.,
2009 WL 3077396, at *7. Here, settlement negotiations involved a day-long meeting mediated
by an experienced mediator and numerous phone and email communications. See Salzman Decl.
¶ 3. The discussions were meaningful and informed as Class Counsel took steps to ensure that
they had all of the necessary information to advocate for a fair settlement that served the best
interests of the Class. Id. ¶¶ 5-6. Class Counsel analyzed and evaluated the contested legal and
factual issues posed by the litigation so that adequate demands could be made. See id.; see also
Class Cert. R&R at 47-110 (analyzing issues in context of class certification); In re Air Cargo
Shipping Servs. Antitrust Litig., 2009 WL 3077396, at *7 (discussing negotiation process
arriving at Lufthansa settlement). Class Counsel were well informed of the facts of the case and
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13
the strength of the claims asserted when the terms of the Settlement Agreement were negotiated.
See Global Crossing, 225 F.R.D. at 458.
2. The Proposed Settlement Falls Within the Range of Possible Approval.
To preliminarily approve this settlement, the Court must decide that the proposed
settlement falls within the range of settlement that could possibly be approved as “fair, adequate
and reasonable.” NASDAQ I, 176 F.R.D. at 102. Continuing this litigation against Air China
would entail a highly expensive legal battle, involving complex legal and factual issues where
motions in limine and Daubert motions would be vigorously contested, as evidenced by the
recently filed summary judgment motions. At trial, the ultimate outcome remains uncertain for
both parties because it would turn on questions of proof, many of which would be the subject of
complicated expert opinions, particularly with regard to damages.8 See NASDAQ II, 187 F.R.D.
at 475-76. In denying defendants’ summary judgment motions, the Court stated that the
defendants “raise[d] difficult questions that are defendant specific” which “may in the end of the
day be very persuasive arguments to the jury as to why a jury should not conclude that these
remaining entities were involved in this conspiracy.” Hr’g. Tr., 93-94, ECF No. 2351. Given this
uncertainty, “[a] very large bird in the hand in this litigation is surely worth more than whatever
birds are lurking in the bushes.” In re Chambers Dev. Sec. Litig., 912 F. Supp. 822, 838 (W.D.
Pa. 1995). Further, because liability under the Sherman Act is joint and several and Air China’s
sales remain in the case, this settlement in no way prejudices the Class’s ability to recover its full
treble damages caused by the alleged conspiracy.
8 Because Class Counsel will likely have to litigate against the other defendants through trial and
appeal, their duties to the Class preclude a full discussion of their potential litigation risks.
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14
The Settlement Amount of $50,000,000 is multiples of any previous settlement with a
settled defendant who, like Air China, did not plead guilty in the United States. Those seven
settlements ranged from $3.2 million (Malaysia) to $14 million (Saudia) and averaged $6.33
million. Based upon the foregoing, the Settlement Agreement is well within the possible range of
approval as a “fair, reasonable, and adequate” settlement of the Class’s claims. See Grinnell, 495
F.2d at 463.
C. Notice to the Class
Plaintiffs will submit notice regarding the Settlement Agreement to Class members
informing them of their rights with respect to the proposed settlement. Plaintiffs propose
combining notice of this settlement with notice of the Polar settlement and any future settlements
with the remaining defendants. See Settlement Agreement, ¶ 37.
IV. PRELIMINARY APPROVAL ORDER
Plaintiffs respectfully submit that the proposed Settlement Agreement with Air China
falls well within the range of possible approval. Plaintiffs therefore request that the Court:
1. Preliminarily approve the Settlement Agreement and find that its terms are
sufficiently fair, reasonable, and adequate for notice to be issued to the Class;
2. Order Class Counsel to disseminate notice to the Class, upon submission of
proposed notices and approval by the Court of the form of notice and the notice
plan; and
3. Approve The Garden City Group as Administrator of the Settlement and Citibank,
N.A. as escrow agent.
V. CONCLUSION
For the foregoing reasons, the Court should grant plaintiffs’ motion for preliminary
approval of this settlement with Air China.
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15
Dated: February 5, 2016 Respectfully Submitted, Robert N. Kaplan Hollis Salzman Gregory K. Arenson Meegan Hollywood Elana Katcher ROBINS KAPLAN LLP KAPLAN FOX & KILSHEIMER LLP 601 Lexington Avenue, Suite 3400 850 Third Avenue, 14th Floor New York, NY 10022 New York, NY 10022 (212) 980-7400 (212) 687-1980 By: /s/ Hollis L. Salzman Gary L. Specks KAPLAN FOX & KILSHEIMER LLP 423 Sumac Road Highland Park, IL 60035 (847) 831-1585 By: /s/ Robert N. Kaplan Howard J. Sedran Michael D. Hausfeld Austin B. Cohen Brent W. Landau Keith J. Verrier Hilary K. Scherrer LEVIN, FISHBEIN, SEDRAN & BERMAN Melinda R. Coolidge 510 Walnut Street HAUSFELD LLP Philadelphia, PA 19106 1700 K Street, N.W., Suite 650 (215) 592-1500 Washington, DC 20006 (202) 540-7200 By: /s/ Howard J. Sedran By: /s/ Michael D. Hausfeld Class Counsel
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
IN RE
AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION
Master File 06-MD-1775 (BMC) (VVP)
THIS DOCUMENT RELATES TO: All Actions
MDL No. 1775
DECLARATION OF HOLLIS L. SALZMAN IN SUPPORT OF PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT WITH
DEFENDANTS AIR CHINA LIMITED AND AIR CHINA CARGO COMPANY LIMITED
I, Hollis Salzman, declare:
1. I am a partner in the law firm of Robins Kaplan LLP. The Court has appointed me
as one of four Class Counsel in this case. I submit this declaration in support of Plaintiffs'
Motion for Preliminary Approval of Settlement with Defendants Air China Limited and Air
China Cargo Company Limited, dated February 4, 2016 (Exhibit A hereto). I have personal
knowledge of the information set forth in this declaration.
2. Settlement discussions with Air China began over four years ago in May 2011,
but they did not lead to an agreement.
3. The parties re-started their settlement negotiations in November 2015. Between
November and December 2015, counsel for plaintiffs and Air China had numerous phone and
email communications, in which they discussed the possibility of settlement. These discussions
led to an all-day mediation on December 15, 2015 before Eric D. Green, a well-known mediator.
The mediation was attended by several Air China executives and counsel for plaintiffs and Air
China. The mediation resulted in an agreement in principle.
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H lli Salzman
4. Following additional negotiations regarding the terms of the settlement
agreement, counsel for plaintiffs and Air China signed the Settlement Agreement with an
execution date of February 4, 2016.
5. Both sides vigorously negotiated their respective positions on all material terms of
the Settlement Agreement and the negotiations were non-collusive.
6. In connection with these settlement negotiations, Class Counsel were well
informed of the facts and issues concerning liability and damages and the relative strengths and
weaknesses of each side's litigation position.
7. I declare under penalty of perjury that the foregoing is true and correct.
Executed this 5th day of February 2016 in New York, New York.
-2
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Exhibit A
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK
IN RE: AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION
MDL No. 1775
Master File 06-MD-1775 (JG) (VVP)
ALL CASES
SETTLEMENT AGREEMENT
This Settlement Agreement (the “Agreement”) is made and entered into as of this 4th day
of February, 2016 (the “Execution Date”), by and between Air China Limited and Air China
Cargo Company Limited (“Settling Defendants”) and Class Representatives Benchmark Export
Services, FTS International Express, Inc., R.I.M. Logistics, Ltd., Olarte Transport Service, Inc.,
S.A.T. Sea & Air Transport, Inc. and Volvo Logistics AB (collectively, “Plaintiffs”), both
individually and on behalf of a certified class of persons who purchased Airfreight Shipping
Services (as defined below) for shipments to or from the United States directly from Settling
Defendants or any other Defendant (as defined below) in the Action (as defined below) during
the period from and including January 1, 2000 up to and including September 30, 2006.
WHEREAS, Plaintiffs are prosecuting the Action on their own behalf and on behalf of
the Class (as defined below);
WHEREAS, Plaintiffs allege that Settling Defendants participated in an unlawful
conspiracy to raise, fix, maintain, or stabilize the prices of Airfreight Shipping Services for
shipments to or from the United States at artificially high levels in violation of Section 1 of the
Sherman Act;
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2
WHEREAS, Settling Defendants deny Plaintiffs’ allegations and have asserted a number
of defenses to Plaintiffs’ claims;
WHEREAS, Plaintiffs and Settling Defendants agree that neither this Agreement nor any
statement made in the negotiation thereof shall be deemed or construed to be an admission by or
evidence against Settling Defendants or any of their alleged co-conspirators or evidence of the
truth of any of the Plaintiffs’ allegations;
WHEREAS, arm’s-length settlement negotiations have taken place (with the assistance
of an experienced mediator) between Class Counsel (as defined below) and counsel for Settling
Defendants, and this Agreement has been reached as a result of those negotiations;
WHEREAS, Plaintiffs have conducted an investigation into the facts and the law
regarding the Action and have concluded that a settlement with Settling Defendants according to
the terms set forth below is in the best interest of Plaintiffs and the Class;
WHEREAS, the Action will continue against Defendants that are not Released Parties (as
defined below);
WHEREAS, Settling Defendants, despite their belief that they have good defenses to the
claims alleged, have nevertheless agreed to enter into this Agreement to avoid the expense,
inconvenience, and the distraction of potentially burdensome and protracted litigation;
WHEREAS, Plaintiffs recognize the benefits of Settling Defendants’ cooperation and
recognize that, because of joint and several liability, this Agreement with Settling Defendants
does not impair Plaintiffs’ ability to collect the full amount of damages to which they and the
Class may be entitled in this Action; and
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3
WHEREAS, Settling Defendants have agreed to cooperate with Plaintiffs as set forth in
this Agreement, and, therefore, will reduce Plaintiffs’ burden and expense associated with
prosecuting the Action.
NOW, THEREFORE, in consideration of the mutual promises, covenants, agreements
and releases set forth herein and for other good and valuable consideration, it is agreed by and
among the undersigned that claims that have been or could be asserted in the Action be settled
and compromised as to Settling Defendants and all other Released Parties, without costs as to
Plaintiffs, the Class, or Settling Defendants, subject to the approval of the Court (as defined
below), on the following terms and conditions.
A. Definitions
The following terms, as used in this Agreement have the following meanings:
1. “Action” means the action captioned In re Air Cargo Shipping Services Antitrust
Litigation, 06-MD-1775 (JG)(VVP) (E.D.N.Y.), which is currently pending in the United States
District Court for the Eastern District of New York, and all actions filed in or transferred to the
Eastern District of New York for consolidation and/or coordination with the above-captioned
multidistrict litigation, specifically including, but not limited to, the actions captioned
Benchmark Export Services et al. v. AMR Corporation and American Airlines, Inc., Case No. 10-
CV-3398 (JG) (VVP) (E.D.N.Y.), Benchmark Export Services et al. v. China Airlines Ltd., Case
No. 10-CV-0639 (JG) (VVP) (E.D.N.Y.), Benchmark Export Services et al. v. McCaffrey, Case
No. 10-CV-10253-NMG (D. Mass.), Benchmark Export Services et al. v. De Jong, Case No.
2:10-CV-00007-TB (E.D.N.C.), and Benchmark Export Services et al. v. Sanfilippo, Case No.
10-CV-01374 JG-VVP (E.D.N.Y.), all actions pending such transfer (including but not limited to
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4
“tag-along” actions) and all actions that may be transferred in the future, or are otherwise based
on the conduct alleged in the above-captioned multidistrict litigation.
2. “Airfreight Shipping Services” means paid private air transport of freight or other
cargo by any airline acting as a provider of such services.
3. “Alternative Opt-Out Ratio” means the U.S. dollar amount of purchases of
Airfreight Shipping Services to and from the United States by an Opt-Out Plaintiff (defined at
Paragraph 14) directly from Settling Defendants during the period from January 1, 2000 up to
and including September 30, 2006 divided by the total dollar amount of all direct sales of
Airfreight Shipping Services to and from the United States by Settling Defendants to the Class
(defined at Paragraph 5) during the period from January 1, 2000 up to and including September
30, 2006.
4. “Claims” shall mean any and all actions, suits, claims, rights, demands, assertions,
allegations, causes of action, controversies, proceedings, losses, damages, injuries, attorneys’
fees, costs, expenses, debts, liabilities, judgments, or remedies, whether equitable or legal,
resulting from a direct purchase of Airfreight Shipping Services.
5. “Class” means, pursuant to the Court’s Order dated July 10, 2015 (ECF No. 2282)
and as amended on August 3, 2015 (ECF No. 2326), all persons or entities (but excluding
Defendants, their parents, predecessors, successors, subsidiaries, affiliates, as well as government
entities) who purchased airfreight shipping services for shipments to or from the United States
directly from any of the Defendants or from any of their parents, predecessors, successors,
subsidiaries, or affiliates, at any time during the period from January 1, 2000 up to and including
September 30, 2006.
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5
6. “Class Counsel” shall refer to the law firms of Hausfeld LLP, 1700 K Street NW,
Suite 650, Washington, DC 20006; Kaplan Fox & Kilsheimer LLP, 850 Third Avenue, 14th
Floor, New York, NY 10022; Robins Kaplan LLP, 601 Lexington Avenue, Suite 3400, New
York, NY 10022-4611; and Levin, Fishbein, Sedran & Berman, 510 Walnut Street, Philadelphia,
PA 19106.
7. “Class Member” means each member of the Class who does not timely and
validly elect to be excluded from the Class by January 22, 2016, pursuant to the Court’s Order
dated November 6, 2015 (ECF No. 2370).
8. “Class Period” means the period from and including January 1, 2000 up to and
including September 30, 2006.
9. “Court” means the United States District Court for the Eastern District of New
York.
10. “Defendant” means any party named as a defendant in the First Consolidated
Amended Complaint in In re Air Cargo Shipping Services Antitrust Litigation, 06-MD-1775
(JG)(VVP) (E.D.N.Y.) or otherwise named as a defendant in the Action at any time up to and
including the Preliminary Approval Date (as defined below).
11. “Effective Date” means the first date by which all of the following have occurred:
(a) the Court has entered a final judgment approving this Agreement under Rule 23(e) of the
Federal Rules of Civil Procedure; (b) the Court has entered a final judgment dismissing the
Action as against any Released Party who is a Defendant with prejudice as to all Class Members
and without costs; and (c) the time for appeal or to seek permission to appeal from the Court’s
approval of this Agreement and entry of a final judgment as described in clause (a) above has
expired, or, if appealed, approval of this Agreement and the final judgment has been affirmed in
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6
its entirety by the court of last resort to which such appeal has been taken and such affirmance
has become no longer subject to further appeal or review. Neither the provisions of Rule 60 of
the Federal Rules of Civil Procedure nor the All Writs Act, 28 U.S.C. § 1651, shall be taken into
account in determining the above-stated times.
12. “Escrow Account” is the account referenced in Paragraph 36 to maintain the
Settlement Fund (as defined below) established pursuant to the terms and conditions set forth in
an escrow agreement to be entered into with Citibank N.A., as Escrow Agent (as defined below),
subject to the approval of Plaintiffs and Settling Defendants.
13. “Escrow Agent” means the third party responsible for managing and
administering the Escrow Account in accordance with this Agreement, any agreement
establishing the Escrow Account and any Order by the Court.
14. “Opt-Out Plaintiff” means a person, otherwise qualifying as a member of the
Class, who has timely and validly elected to be excluded from the Class.
15. “Opt-Out Ratio” means the U.S. dollar amount of all Opt-Out Sales divided by
the U.S. dollar amount of all direct sales of Airfreight Shipping Services to and from the United
States by all Defendants during the Class Period.
16. “Opt-Out Sales” means the U.S. dollar amount of purchases (as reflected in the
database maintained by Class Counsel) of Airfreight Shipping Services to and from the United
States by an Opt-Out Plaintiff directly from Defendants during the Class Period.
17. “Preliminary Approval Date” means the date on which the Court enters an order
granting preliminary approval of this Agreement.
18. “Released Claims” shall refer to the claims described in Paragraph 33 of this
Agreement.
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7
19. “Released Parties” shall refer jointly and severally, individually and collectively,
to Settling Defendants, their predecessors, successors, past and present parents, subsidiaries,
affiliates, divisions, and departments, and each of their respective past and present officers,
directors, employees, agents, attorneys, servants, and representatives, and the predecessors,
successors, heirs, executors, administrators, and assigns of each of the foregoing.
Notwithstanding any part of the foregoing, however, for purposes of this Agreement, “Released
Parties” does not include any Defendant other than the Settling Defendants. As used in this
definition, “affiliates” means entities controlling, controlled by or under common control with
any of the Released Parties.
20. “Releasing Parties” shall refer jointly and severally, and individually and
collectively, to the Plaintiffs, the Class Members, their predecessors, successors, past and present
parents, subsidiaries, affiliates, divisions, and departments, and each of their respective past and
present officers, directors, employees, agents, attorneys, servants, and representatives, and the
predecessors, successors, heirs, executors, administrators, and assigns or transferees, immediate
and remote, of each of the foregoing. As used in this definition, “affiliates” means entities
controlling, controlled by, or under common control with, any of the Releasing Parties.
21. “Settlement Amount” means $50,000,000.00 in U.S. dollars.
22. “Settlement Fund” shall be the amount paid by Settling Defendants in settlement
of the Action pursuant to Paragraph 36 of this Agreement and any income earned on amounts in
the fund.
23. “Settlement Hearing” has the meaning attributed to it in Paragraph 30(a).
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8
24. “Settling Defendants’ Counsel” shall refer to the law firms of Wilson Elser
Moskowitz Edelman & Dicker, Jones Day or any firm later retained by Settling Defendants to
represent them in this Action.
B. Class Certification
25. Pursuant to the Court’s Order dated July 10, 2015 (ECF No. 2282), as amended
on August 3, 2015 (ECF No. 2326), the requirements of Rule 23(a) and 23(b)(3) of the Federal
Rules of Civil Procedure are satisfied, and the following Class was certified:
All persons or entities (but excluding Defendants, their parents, predecessors, successors, subsidiaries, affiliates, as well as government entities) who purchased airfreight shipping services for shipments to or from the United States directly from any of the Defendants, or from any of their parents, predecessors, successors, subsidiaries, or affiliates, at any time during the period from January 1, 2000 up to and including September 30, 2006.
C. Approval of this Agreement, Notice, and Dismissal of Claims
26. Plaintiffs and Settling Defendants shall use all reasonable efforts to effectuate this
Agreement, including cooperating in Plaintiffs’ effort to obtain the Court’s approval of
procedures (including the giving of class notice under Rules 23(c) and 23(e) of the Federal Rules
of Civil Procedure), and to secure the prompt, complete, and final dismissal with prejudice of the
Action as to Settling Defendants.
27. Promptly after the Execution Date of this Agreement, Plaintiffs shall submit to the
Court a motion for preliminary approval of the settlement. The motion shall include the
proposed form of an order preliminarily approving this Agreement, the text of which shall be
agreed upon by Plaintiffs and Settling Defendants before submission of the motion.
28. Plaintiffs may, as practicable, combine dissemination of notice of this Agreement
with notice of other settlement agreements reached with other Defendants. The text of the notice
shall be agreed upon by Plaintiffs and Settling Defendants before submission of the notice to the
Court for approval.
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9
29. Settling Defendants shall notify federal and state officials of this settlement as
specified in 28 U.S.C. §§ 1715(a) & (b).
30. Notice to the Class shall be given as follows, or as otherwise deemed sufficient by
the Court:
(a) After preliminary approval of this Agreement and submission to the Court of the proposed forms of mail and publication notice, Class Counsel shall, in accordance with Rule 23 of the Federal Rules of Civil Procedure and the Court’s order, provide those members of the Class who have been identified by reasonable means in connection with the prior settlements, with notice by first class mail of the settlement and the date of the hearing scheduled by the Court to consider the fairness, adequacy and reasonableness of the proposed settlement (the “Settlement Hearing”).
(b) After preliminary approval of this Agreement and submission to the Court of the proposed forms of mail and publication notice, Class Counsel shall, in accordance with Rule 23 of the Federal Rules of Civil Procedure and the Court’s order, cause a summary notice of the settlement and the Settlement Hearing to be published one time in the national and international editions of The Wall Street Journal and in each of the publications identified in Paragraph 3 of Judge Gleeson’s Court Order dated October 21, 2010 (Air Cargo World (U.S. only); Air Cargo Week; Cargonews Asia; International Transport Journal; American Shipper; Airport Press; American Journal of Transportation; Inbound Logistics; Logistics Management; and Air Transport World), unless publication in any of the proposed publications is impracticable, in which case notice will be published in substitute publications as deemed appropriate by the Claims Administrator.
31. Plaintiffs shall seek entry of an order and a final judgment, the text of which shall
be agreed upon by Plaintiffs and Settling Defendants before submission to the Court:
(a) approving this Agreement and its terms as being a fair, reasonable, and adequate settlement as to the Class within the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its consummation according to its terms;
(b) reserving to the Court exclusive jurisdiction over the settlement and this Agreement, including the administration and consummation of this settlement;
(c) requiring Class Counsel to file with the Clerk of the Court a record of potential members of the Class who timely and validly excluded themselves from the Class, and to provide a copy of the record to Settling Defendants’ Counsel; and
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10
(d) dismissing the Action with prejudice as to the Released Parties.
32. This Agreement shall become final only upon occurrence of the Effective Date.
D. Release and Discharge
33. Upon the occurrence of the Effective Date and in consideration of the payment by
Settling Defendants of the Settlement Amount, the Releasing Parties shall be deemed to and do
hereby completely, finally and forever release, acquit, and discharge the Released Parties from
any and all claims, demands, actions, potential actions, suits, and causes of action, losses,
obligations, damages, matters and issues of any kind or nature whatsoever, and liabilities of any
nature, including without limitation claims for costs, expenses, penalties, and attorneys’ fees,
whether class, individual, or otherwise, that the Releasing Parties, or any of them, ever had, now
has, or hereafter can, shall, or may have directly, representatively, derivatively or in any other
capacity against any of the Released Parties, whether known or unknown, suspected or
unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, accrued or
unaccrued, matured or unmatured, disclosed or undisclosed, apparent or unapparent, liquidated
or unliquidated, or Claims that have been, could have been, or in the future might be asserted in
law or equity, on account of or arising out of or resulting from or in any way related to any
conduct regardless of where it occurred at any time prior to the Effective Date concerning the
direct purchase from Settling Defendants or any other Defendant of Airfreight Shipping Services
to or from the United States or concerning the pricing, selling, discounting, or marketing of
Airfreight Shipping Services for shipments to or from the United States, including without
limitation, Claims based in whole or in part on the facts, occurrences, transactions, or other
matters alleged in the Action, or otherwise the subject of the Action (and specifically including,
without limitation, Claims in any way related to cargo rates, fuel surcharges, security surcharges,
insurance surcharges, United States customs surcharges, war risk surcharges, commissions,
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incentives, rebates, credits, yields, or any other element of the price of or the compensation
related to Airfreight Shipping Services), which arise under any antitrust, unfair competition,
unfair practices, price discrimination, unitary pricing, trade practice, consumer protection, unjust
enrichment, civil conspiracy law, or any other law, code, rule, or regulation of any country or
jurisdiction worldwide, including under federal or state law, regardless of legal theory, and
regardless of the type or amount of damages claimed. However, nothing herein shall release any
claims (a) for negligence, breach of contract, bailment, failure to deliver, lost goods, damaged or
delayed goods or similar claim between any of the Released Parties and any of the Releasing
Parties relating to Airfreight Shipping Services and/or (b) made with respect to any indirect
purchase of Airfreight Shipping Services.
34. The Releasing Parties hereby covenant and agree that they shall not, hereafter, sue
or otherwise seek to establish liability against any of the Released Parties based, in whole or in
part, upon any of the Released Claims.
35. The release set forth in Paragraph 33 constitutes a waiver of Section 1542 of the
California Civil Code and Section 20-7-11 of the South Dakota Codified Laws, each of which
provides that a general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor, and a waiver of any similar, comparable,
or equivalent provisions, statute, regulation, rule, or principle of law or equity of any other state
or applicable jurisdiction. The Releasing Parties acknowledge that they are aware that they may
hereafter discover facts in addition to, or different from, those facts which they know or believe
to be true with respect to the subject matter of this Agreement, but that it is their intention to
release and settle fully, finally, and forever any and all claims released in Paragraph 33, and in
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furtherance of such intention, this release shall be and remain in effect notwithstanding the
discovery or existence of any such additional or different facts. The parties acknowledge that the
foregoing waiver was separately bargained for and is a key and integral element of the
Agreement of which the release is a part.
E. Payments
36. Settling Defendants shall pay or cause to be paid the Settlement Amount by wire
transfer into the Escrow Account. The Settlement Amount shall be wire transferred by Settling
Defendants or their designee within forty-five (45) days of the Execution Date.
37. From the Settlement Amount, the sum of $250,000 in United States currency may
be used for reasonable costs of disseminating notice of this Agreement, including the cost of
administration, Plaintiffs may combine notice of this Agreement with the notice of settlement
agreements reached with other Defendants.
38. Class Counsel may, at an appropriate time, determined in their sole discretion,
submit a motion seeking approval of the payment of attorneys’ fees and expenses from the
Settlement Fund. Settling Defendants shall not oppose any motion by Class Counsel seeking
approval of payment of attorneys’ fees and past and current expenses from the Settlement Fund
or any motion by Class Counsel seeking approval of payment after the Effective Date for future
litigation expenses from the Settlement Fund. Settling Defendants shall have no obligation to
pay any amount of Class Counsel’s attorneys’ fees or the costs or expenses of litigation for the
Class.
F. Settlement Fund
39. The Settlement Fund is intended by the parties to this Agreement to be treated as
a “qualified settlement fund” for federal income tax purposes pursuant to Treas. Reg.
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§ 1.468B-1, and to that end the parties to this Agreement shall cooperate with each other and
shall not take a position in any filing or before any tax authority that is inconsistent with such
treatment. At the request of Settling Defendants, a “relation back election” as described in Treas.
Reg. § 1.468B-1(j) shall be made so as to enable the Settlement Fund to be treated as a qualified
settlement fund from the earliest date possible, and the parties shall take all actions as may be
necessary or appropriate to this end.
40. To the extent practicable, the Settlement Fund shall be (i) invested in United
States Government Treasury obligations, (ii) deposited in a United States Treasury Money
Market Fund or (iii) deposited in a federally insured account in an amount not exceeding
$250,000 or the limits of federal insurance, whichever is greater. All income earned on the
Settlement Fund shall become and remain part of the Settlement Fund.
41. Settling Defendants shall not have any responsibility, financial obligation, or
liability whatsoever with respect to the investment, distribution, or administration of the
Settlement Fund, including, but not limited to, the costs and expenses of such investment,
distribution and administration, except as expressly otherwise provided in this Agreement.
42. Subject to Court approval, Plaintiffs and Class Counsel shall be reimbursed and
paid solely out of the Settlement Fund for all expenses and claims including, but not limited to,
attorneys’ fees and past, current, or future litigation expenses. Attorneys’ fees and expenses
awarded by the Court shall be payable from the Settlement Fund upon award, notwithstanding
the existence of any timely-filed objections thereto, or potential for appeal therefrom, or
collateral attack on the settlement or any part thereof, subject to Class Counsel’s obligation to
make appropriate refunds or repayments to the Settlement Fund, if and when the settlement is not
approved or as a result of any appeal and/or further proceedings on remand, or successful
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collateral attack, the fee or cost award is reduced or reversed. Except as provided in Paragraph
36, Settling Defendants shall not be liable for any costs, fees, or expenses of any of Plaintiffs’
respective attorneys, experts, advisors, agents, or representatives, but all such costs, fees, and
expenses as approved by the Court may be paid out of the Settlement Fund.
G. Rescission of the Agreement
43. If the Court refuses to approve this Agreement or any part hereof, or with respect
to court approval if such approval is modified or set aside on or following appeal, remand, or
other proceedings, or if the Court does not enter the final judgment provided for in Paragraph 31
of this Agreement, or if the Court enters the final judgment but on or following appeal, remand,
or other proceedings, such final judgment is modified or reversed, then Settling Defendants and
the Plaintiffs shall each, in their sole discretion, have the option to rescind this Agreement in its
entirety. A modification or reversal on or following appeal, remand, or other proceedings, of any
amount of Class Counsel’s fees and expenses awarded by the Court or any plan of allocation of
the Settlement Fund shall not be deemed a modification of all or a part of the terms of this
Agreement or such final judgment.
44. (a) On or before February 11, 2016, Plaintiffs shall provide Settling
Defendants with (i) a written list of all Opt-Out Plaintiffs, together with (ii) for each Opt-Out
Plaintiff, that Opt-Out Plaintiff’s Opt-Out Sales; and (iii) the Opt-Out Ratio. The purchase
amounts referred to in this Paragraph 44(a)(ii) shall be derived from Class Counsel’s electronic
database.
(b) In the event that Settling Defendants dispute Plaintiffs’ claimed Opt-Out
Sales, and/or the Opt-Out Ratio, or if Settling Defendants in good faith believe that the
Alternative Opt-Out Ratio should apply, Settling Defendants must notify Class Counsel on or
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before February 29, 2016. Such notification shall include the basis for any dispute or for the
application of the Alternative Opt Out-Ratio and any supporting data or documentation. If
Settling Defendants request application of the Alternative Opt-Out Ratio, the notice shall also
provide Settlement Class Counsel the total U.S. dollar amount of purchases of Airfreight
Shipping Services to and from the United States by an Opt-Out Plaintiff directly from Settling
Defendants during the Class Period for each Opt-Out Plaintiff, and the resulting Alternative Opt-
Out Ratio. In the event that Settling Defendants request application of the Alternative Opt-Out
Ratio, such request shall become effective, and replace the Opt-Out Ratio, if Settling Defendants
provide Class Counsel with data or documentation substantially verifying the Alternative Opt-
Out Ratio calculation. Class Counsel shall respond to such notification on or before March 10,
2016. If, after good faith discussion about any dispute or objection arising under Paragraph
44(a)-(b), the parties cannot agree to a resolution, they shall submit the dispute(s) to arbitration
for final resolution pursuant to Paragraph 56.
(c) In the event that the Opt-Out Ratio or the Alternative Opt-Out Ratio,
expressed as a percentage, is equal to or greater than the percentage set forth in a separate letter
agreement between Class Counsel and Settling Defendants, then Settling Defendants shall have
the right and option, but not the obligation, to rescind the Agreement as set forth in Paragraph 43.
In order to invoke rights to rescind the Agreement, Settling Defendants must notify Class
Counsel in writing within ten (10) business days of agreement to or resolution of the Opt-Out
Ratio or Alternative Opt-Out Ratio under Paragraph 44(b). Settling Defendants shall not be
obligated to rescind the Agreement but shall first be obligated to discuss with Class Counsel in
good faith whether the Agreement can be renegotiated rather than rescinded.
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45. In the event that this Agreement is rescinded, any and all amounts then
constituting the Settlement Fund and any portions thereof (including all income earned thereon
but excluding any taxes already paid on such income and any reasonable expenses that have been
paid or incurred associated with providing notice to the Class or administering the Settlement
Fund) shall be returned forthwith to Settling Defendants.
46. Settling Defendants and Plaintiffs expressly reserve all of their rights if this
Agreement does not become effective or if it is rescinded by Plaintiffs or Settling Defendants
pursuant to Paragraphs 43 or 44 of this Agreement. Further, Plaintiffs and Settling Defendants
agree that this Agreement, whether or not it is finally approved and whether or not Settling
Defendants or Plaintiffs elect to rescind it under Paragraphs 43 or 44 of this Agreement, and any
and all negotiations, documents, and discussions associated with it, shall not be deemed or
construed to be an admission or evidence of any violation of any statute or law, or of any liability
or wrongdoing by Settling Defendants or any Defendant, or of the truth of any of the claims or
allegations in the Action, or waiver or invalidity of any defense, and evidence thereof shall
neither be discoverable nor used directly or indirectly except in a proceeding to enforce or
interpret the Agreement.
H. Cooperation
47. Settling Defendants shall cooperate with Class Counsel as set forth specifically
below.
48. To the extent that any of Settling Defendants’ documents produced by Settling
Defendants or any other Defendant in the Action are authentic or business records, including but
not limited to evidence of Settling Defendants’ sales or costs of Airfreight Shipping Services or
surcharges related thereto, Settling Defendants agree to produce, through affidavits or
declarations, or, if necessary, through deposition or testimony at trial, representatives qualified to
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authenticate such documents and information, and, to the extent possible, provide confirmation
that such documents and information are business records, provided that Class Counsel agrees to
use reasonable efforts to minimize the burden to Settling Defendants of any such authentication
or business records testimony.
49. Notwithstanding any other provision in this Agreement, Plaintiffs and Class
Counsel agree that any information provided by Settling Defendants’ Counsel in connection with
and/or as part of this settlement shall be protected by Federal Rule of Evidence 408, and shall in
no event be discoverable by any person or treated as evidence of any kind, unless otherwise
ordered by a Court.
50. Settling Defendants’ obligations to cooperate shall not be affected by the release
set forth in Paragraph 33 of this Agreement. Unless this Agreement is rescinded, disapproved, or
otherwise fails to take effect, Settling Defendants’ obligations to cooperate under this Agreement
shall continue until the date that final judgment has been rendered in the Action with respect to
all Defendants.
51. Settling Defendants and its present and future directors, officers, and employees
and members of the Class and Class Counsel agree that all disputes, claims, or controversies
arising in connection with, pursuant to, or related to the cooperation terms of this Agreement
shall be submitted to arbitration for a final resolution pursuant to Paragraph 56 of this
Agreement.
I. Taxes
52. Plaintiffs shall be solely responsible for filing all informational and other tax
returns necessary to report any net taxable income earned by the Settlement Fund and shall file
all informational and other tax returns necessary to report any income earned by the Settlement
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Fund and shall be solely responsible for taking out of the Settlement Fund, as and when legally
required, any tax payments, including interest and penalties due on income earned by the
Settlement Fund. All taxes (including any interest and penalties) due with respect to the income
earned by the Settlement Fund, and all expenses incurred in connection with filing tax returns,
shall be paid from the Settlement Fund. Settling Defendants shall have no responsibility to make
any filings relating to the Settlement Fund and will have no responsibility to pay tax on any
income earned by the Settlement Fund or to pay any taxes on the Settlement Fund unless the
settlement is not consummated and until the Settlement Fund is returned to Settling Defendants.
In the event the Settlement Fund is returned to Settling Defendants because the settlement is not
consummated, Settling Defendants shall be responsible for the payment of all taxes on income
earned by the Settlement Fund (including any interest or penalties, except to the extent that
interest and penalties result from the failure of Plaintiffs to file any necessary tax returns or make
tax payments, in which case Plaintiffs shall be responsible for the payment of interest and/or
penalties), except to the extent such taxes have been previously paid from the Settlement Fund.
Settling Defendants make no representation to Plaintiffs regarding the appropriate tax treatment
of the Settlement Fund, income earned on the Settlement Fund, or any distribution taken from
the Settlement Fund.
J. Reservation of Class Members’ Rights Against Other Defendants
53. All rights of any Class Member against any and all former, current, or future
Defendants or co-conspirators or any other person other than the Released Parties are specifically
reserved by Plaintiffs and the Class Members. The sales of Airfreight Shipping Services by
Settling Defendants shall, to the extent permitted or authorized by law, remain in the Action
against the other current or future Defendants in the Action as a potential basis for damage
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claims and shall be part of any joint and several liability claims against other current or future
Defendants in the Action or other persons or entities other than the Released Parties.
K. Miscellaneous
54. This Agreement does not settle or compromise any claim by Plaintiffs or any
Class Member against any former or current Defendants or alleged co-conspirator or any other
person or entity other than the Released Parties.
55. With the exception of matters expressly declared subject to arbitration in this
Agreement, Settling Defendants and their present and future directors, officers, and employees,
Plaintiffs, and each Class Member hereby submit to the exclusive jurisdiction of the United
States District Court for the Eastern District of New York solely for the purpose of any suit,
action, proceeding or dispute arising out of or relating to this Agreement or the applicability of
this Agreement.
56. Any controversy, claim or dispute arising out of, relating to or in connection with
the matters specifically designated to be submitted to arbitration under this Agreement shall be
finally determined in arbitration in New York before Eric D. Green of Resolutions, LLC or, if he
is not available, such arbitrator upon whom the parties shall mutually agree. Subject to the
award of the arbitrator, the parties participating in an arbitration shall pay an equal share of the
arbitrator’s fees. The arbitrator may award recovery of all costs (including administrative fees,
arbitrator’s fees and court costs, but excluding attorneys’ fees) to the prevailing party. Judgment
upon any award rendered may be entered in the United States District Court for the Eastern
District of New York.
57. This Agreement contains an entire, complete, and integrated statement of each
and every term and provision agreed to by and between the parties hereto with respect to the
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subject matter of this Agreement.
58. This Agreement may be modified or amended only by a writing executed by
Plaintiffs and Settling Defendants and, after the Preliminary Approval Date, with approval by the
Court.
59. Neither this Agreement nor any negotiations or proceedings connected with it
shall be deemed or construed to be an admission by any party to this Agreement or any Released
Party or evidence of any fact or matter in this Action or in any related actions or proceedings,
and evidence thereof shall not be discoverable or used, directly or indirectly, in any way, except
in a proceeding to interpret or enforce this Agreement.
60. Neither Settling Defendants nor Plaintiffs shall be considered to be the drafter of
this Agreement or any of its provisions for the purpose of any statute, case law or rule of
interpretation or construction that would or might cause any provision to be construed against the
drafter of this Agreement.
61. This Agreement shall be construed and interpreted to effectuate the intent of the
parties which is to provide, through this Agreement, for a complete resolution of the Released
Claims with respect to the Released Parties.
62. Nothing expressed or implied in this Agreement is intended to or shall be
construed to confer upon or give any person or entity other than Class Members, Releasing
Parties, and Released Parties any right or remedy under or by reason of this Agreement.
63. This Agreement shall be binding upon, and inure to the benefit of, the Releasing
Parties and the Released Parties.
64. If any provision of this Agreement is found by a court of competent jurisdiction to
be illegal, invalid or unenforceable for any reason, the remainder of this Agreement will not be
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affected, and, in lieu of each provision that is found illegal, invalid or unenforceable, a provision
will be added as a part of this Agreement that is as similar to the illegal, invalid or unenforceable
provision as may be legal, valid and enforceable.
65. All terms of this Agreement shall be governed and interpreted according to the
substantive laws of the State of New York without regard to its choice of law or conflict of laws
principles.
66. This Agreement may be executed in counterparts by counsel for Plaintiffs and
Settling Defendants, and a facsimile signature shall be deemed an original signature for purposes
of executing this Agreement.
67. Each of the undersigned attorneys represents that he or she is fully authorized to
enter into the terms and conditions of and to execute this Agreement, subject to Court approval.
L. Notices
68. Any notice or other communication required or permitted to be delivered to any
party under this Agreement shall be in writing and shall be deemed properly delivered, given and
received when delivered by two means of delivery (either by hand, by registered mail, by courier
or express delivery service, by electronic mail, or by facsimile) to the address, electronic mail
address, or facsimile telephone number set forth beneath the name of such party below (or to
such other address, electronic mail address, facsimile number or telephone number as such party
shall have specified in a written notice given to the other parties):
If to Settling Defendants:
Name:Address:
Telephone:
George N. Tompkins III WILSON ELSER MOSKOWITZ EDELMAN & DICKER 150 East 42nd Street New York, NY 10017 212-915-5562
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Facsimile:Email:
Copy to Address:
Telephone:Facsimile:
Email:
212- 490-3038 [email protected] J. Bruce McDonald JONES DAY 717 Texas Avenue Houston, Texas 77002 832-239-3822 832-239-3600 [email protected]
If to Class Counsel:
Name:Address:
Hollis L. Salzman Robins Kaplan LLP 601 Lexington Ave, Suite 3400 New York, NY 10022
Telephone: 212-980-7400 Facsimile:
Email:212-980-7499 [email protected]
Name: Michael D. Hausfeld Address: Hausfeld LLP
1700 K Street, NW, Suite 650 Washington, DC 20006
Telephone: 202-540-7200 Facsimile:
Email:202-540-7201 [email protected]
Name:Address:
Telephone:Facsimile:
Email:
Robert N. Kaplan Kaplan Fox & Kilsheimer LLP 850 Third Avenue, 14th Floor New York, NY 10022 212-687-1980 212-687-7714 [email protected]
Name:Address:
Howard J. Sedran Levin, Fishbein, Sedran & Berman 510 Walnut Street, Suite 500 Philadelphia, PA 19106
Telephone:Facsimile:
Email:
215-592-1500 215-592-4663 [email protected]
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Dated: February 4, 2016
____________________________ Hollis Salzman Meegan Hollywood ROBINS KAPLAN LLP 601 Lexington Ave, Suite 3400 New York, NY 10022 Telephone: (212) 980-7400 Facsimile: (212) 980-7499
________________________________ Michael D. Hausfeld Brent W. Landau Hilary K. Scherrer HAUSFELD LLP 1700 K Street, NW, Suite 650 Washington, DC 20006 Telephone: (202) 540-7200 Facsimile: (202) 540-7201
____________________________ Robert N. Kaplan Gregory K. Arenson Elana Katcher KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor New York, NY 10022 Telephone: (212) 687-1980 Facsimile: (212) 687-7114 – and – Gary L. Specks (GS-8767) KAPLAN FOX & KILSHEIMER LLP423 Sumac Road Highland Park, IL 60035 Telephone: (847) 831-1585 Facsimile: (847) 831-1580
_______________________________ Howard J. Sedran Austin B. Cohen Keith J. Verrier LEVIN, FISHBEIN, SEDRAN & BERMAN 510 Walnut Street Philadelphia, PA 19106 Telephone: (215) 592-1500 Facsimile: (215) 592-4663
Class Counsel
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
IN RE AIR CARGO SHIPPING SERVICES ANTITRUST LITIGATION MDL No. 1775
Master File 06-MD-1775 (BMC) (VVP) THIS DOCUMENT RELATES TO: All Actions
THIS CAUSE came before the Court on Plaintiffs’ Motion for Preliminary Approval of
Settlement with Defendants Air China Limited and Air China Cargo Company Limited (“Air
China”), filed February 5, 2016. Plaintiffs have entered into a settlement agreement, dated
February 4, 2016 (“Settlement Agreement”) with Air China. The Court, having reviewed the
notice of motion, the Declaration of Hollis Salzman in Support of Plaintiffs’ Motion for
Preliminary Approval of Settlement With Defendants Air China Limited and Air China Cargo
Company Limited, dated February 5, 2016, the accompanying memorandum of law, the
Settlement Agreement, and the file, hereby:
ORDERS AND ADJUDGES:
1. Terms used in this Order that are defined in the Settlement Agreement are, unless
otherwise defined herein, used in this Order as defined in the Settlement Agreement.
Preliminary Approval of Settlement Agreement
2. The terms of the Settlement Agreement are hereby preliminarily approved,
including the releases contained therein, as being fair, reasonable, and adequate to the Class,
subject to the Fairness Hearing described below. The Court finds that the Settlement Agreement
was entered into at arm’s-length by highly experienced counsel and is sufficiently within the
range of reasonableness that notice of the Settlement Agreement should be given as provided in
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2
this Order.
Notice to Class Members
4. At a later date, Class Counsel shall submit to the Court for approval a notice plan
for purposes of advising Class Members, among other things, of their right to object to the
Settlement Agreement, the procedure for submitting objections, the time, date, and location of
the Fairness Hearing, and their right to appear at the Fairness Hearing.
Settlement Administration
5. To effectuate the Settlement Agreement and the Notice provisions, the Court
hereby approves The Garden City Group as the Claims Administrator (“Administrator”) to be
responsible for: (a) establishing a P.O. Box and website (to be included in the Notice of
Settlement of Class Action) for the purpose of communicating with Class Members; (b)
disseminating Notice to the Class; and (c) accepting and maintaining documents sent from Class
Members.
6. The Court approves Class Counsel’s designation of Citibank, N.A. as Escrow
Agent pursuant to the Escrow Agreement.
Other Provisions
7. In the event that the Settlement Agreement is terminated in accordance with its
provisions, the Settlement Agreement and all proceedings had in connection therewith shall be
null and void, except insofar as expressly provided to the contrary in the Settlement Agreement,
and without prejudice to the status quo ante rights of plaintiffs, Air China, and Class Members.
8. This order is without prejudice to the non-settling defendants seeking relief from
the Court and an opportunity for briefing to the extent that this settlement attempts to deprive
such defendants of information to which they otherwise would be entitled under the Federal
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Rules.
IT IS SO ORDERED.
DATED: ______________ ______________________________ Brian M. Cogan, U.S.D.J. Conformed copies furnished to: Counsel of Record
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CERTIFICATE OF SERVICE
I, Hollis Salzman, declare that on February 5, 2016, I caused true and correct copies of the following documents to be delivered to all counsel of record via the Court’s ECF system: 1. Plaintiffs’ Notice of Motion for Preliminary Approval of Settlement with Defendants Air China Limited and Air China Cargo Company Limited; 2. Memorandum of Law In Support of Plaintiffs’ Motion for Preliminary Approval of Settlement with Defendants Air China Limited and Air China Cargo Company Limited; 3. Declaration of Hollis L. Salzman In Support of Plaintiffs’ Motion for Preliminary Approval of Settlement with Defendants Air China Limited and Air China Cargo Company Limited; 4. [Proposed] Preliminary Approval Order; and 5. This Certificate of Service.
/s/ Hollis Salzman Hollis Salzman
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