A federal jury’s recent acquittal of a shipping company executive charged with price fixing highlights the challenges and uncertainties the Antitrust Division of the Department of Justice (“DOJ”) faces when defendants force DOJ to prove its case at trial. It also highlights the fact that, when confronted with the threat of an antitrust prosecution, “rolling over” and agreeing to whatever deal DOJ offers is not always the best course.
Thomas Farmer, a former Vice President of Crowley Liner Services, a Florida shipping company, was acquitted on May 8th by a federal jury in Puerto Rico on charges of conspiring with rivals to fix the prices of cargo shipped between the mainland United States and the island of Puerto Rico from 2005 through 2008. The trial lasted three weeks and marks the second time in the Puerto Rico cargo shipping cases that an individual has opted to force DOJ to prove its case in a court of law.
DOJ’s evidence against Mr. Farmer consisted of hundreds of emails and phone calls between him and competitors in which Mr. Farmer allegedly agreed to coordinate pricing and bids. DOJ supported this evidence with testimony from cooperating witnesses.
Despite DOJ’s evidence, Mr. Farmer was able to marshal effective defenses based on the biases of the cooperating witnesses and alternative interpretations of DOJ’s evidence. Those defenses raised reasonable doubts as to Mr. Farmer’s involvement in anti-competitive agreements and led the jury to a quick “not guilty” verdict.
This acquittal is a reminder to individuals and companies that automatically succumbing to the DOJ’s plea-bargain process may not be the best strategy. Instead, those confronted with the threat of an antitrust indictment should consider the strengths andweaknesses of the DOJ’s case and the prospects for success with a vigorous defense.