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Judge Rules Antitrust Lawsuit Against Matson Units Can Proceed

Reuters
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October 3, 2022
Reuters

By Mike Scarcella

(Reuters) – Two Matson Inc subsidiaries must face claims from rival container shipping company American President Lines LLC that Matson is abusing its market power over service from the United States to Guam, a federal judge ruled in an antitrust lawsuit.

The ruling Friday by U.S. District Judge Christopher Cooper in Washington, D.C., declined to dismiss claims against Matson Navigation Company Inc and Matson Logistics Inc brought by American President Lines last year seeking unspecified monetary damages for alleged violations of U.S. competition law.

The court dismissed parent company Matson Inc as a defendant.

Honolulu-based Matson, a leading U.S. carrier in the Pacific, in 2021 recorded revenue of more than $3.9 billion. Cooper said Matson Navigation provided the “ocean shipping services mainly at issue in this case” and Matson Logistics provided ground support.

The allegations against Matson “implicate quintessential antitrust injuries,” Cooper wrote.

A spokesperson for Matson declined to comment on Monday. Gibson, Dunn & Crutcher partner Rachel Brass, a lawyer for Matson, did not immediately respond to a request for comment.

A representative from American President Lines, a subsidiary of the French shipping and logistics company CMA CGM Group, did not immediately respond to a request for comment on Monday. A lawyer at BakerHostetler who filed the lawsuit against Matson did not immediately respond to a similar request.

U.S. law says only American-owned vessel companies can transport containers between two U.S. ports. There is an exemption in the law that says non-U.S.-owned shippers can transport between the U.S. and Guam.

American President Lines said in its complaint that after it entered the market in 2015 for U.S. to Guam shipments, Matson took a series of anticompetitive steps to maintain its power. Matson has denied such conduct.

The complaint took issue with a loyalty program that offered discounts to cargo owners that shipped with Matson, and it said Matson “deployed an offensive of predatory threats to coerce shippers not to do business” with its rival.

Matson’s lawyers said in their court filings that “on the islands, where timely and consistent delivery is critical to everyday life, Matson is known for its reliability; [American President Lines] is known for its inconsistency.”

Attorneys said Matson said American President Lines was “trying to save face by making baseless allegations of anticompetitive conduct.”

The case is American President Lines LLC v. Matson Inc, U.S. District Court for the District of Columbia, No. 21-cv-02040.

For plaintiff: John Fornaciari of BakerHostetler 

For defendant: Rachel Brass of Gibson, Dunn & Crutcher

(c) Copyright Thomson Reuters 2022.

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