UNITED STATES DISTRICT COURT EASTERN DISTRICT … Dkt 2409 Motion for... · united states district...

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.

Case 1:06-md-01775-BMC-VVP Document 2409 Filed 02/05/16 of 2 PageID #: 108880

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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

Case 1:06-md-01775-BMC-VVP Document 2409 Filed 02/05/16 of 2 PageID #: 108881



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

Case 1:06-md-01775-BMC-VVP Document 2409-1 Filed 02/05/16 Page 1 of 19 PageID #: 108882

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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


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).


8

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


9

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


10

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


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.


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


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.


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.


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



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.


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


Exhibit A


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;


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


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


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.


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


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.


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).


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.


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


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,


11

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


12

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.


13

§ 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:


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


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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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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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


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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