JOHN GLEESON, District Judge:
This case is a part of In re Air Cargo Shipping Services Antitrust Litigation, 06-md-1775 (E.D.N.Y.), an MDL based on an alleged price-fixing conspiracy among airlines providing freight shipping services. Defendant Qantas Airways Limited ("Qantas") moves to dismiss Plaintiff Schenker AG's ("Schenker") Complaint ("Compl.") under Fed. R. of Civ. P. 12(b)(6), arguing that the case was not filed within the Clayton Act's four-year statute of limitations, even after tolling is taken into account. Qantas also moves the Court to take judicial notice of various documents and news reports attached as exhibits to its motion. For the reasons that follow, the motion to take judicial notice is granted, and the motion to dismiss is denied.
Qantas is an air cargo carrier based in Australia that provides airfreight shipping services to customers around the world. Compl. ¶ 22, ECF No. 1. Schenker is a freight-forwarder based in Germany that provides logistical and freight forwarding support to customers that require the transportation of goods within, to, and from the United States. Id. ¶ 16. This case arises from Qantas's participation in a criminal price fixing conspiracy among various air carriers to fix surcharges imposed on airfreight shipping services. See id. ¶ 3. On January 14, 2008, Qantas pled guilty to a criminal violation of the Sherman Act. Defendant's Brief ("Def. Br.") 3, ECF. No. 39. On January 19, 2011, I granted preliminary approval of a settlement agreement between Qantas and class plaintiffs, pursuant to which it paid $26.5 million to settle the resulting class action
On August 7, 2014, Schenker filed the instant action against Qantas and other carriers. See id. ¶ 1. Schenker's complaint alleges that Qantas and other cargo airlines worldwide conspired to set fuel surcharges in unison in direct relation to a fuel index that Lufthansa Airlines published on a regular basis on its website. Id. ¶¶ 3-7, 230-33.
Qantas argues that the complaint should be dismissed because Schenker's claims are time-barred. Def. Br. 1. Specifically, Qantas maintains that the statute of limitations began to run on February 15, 2006, the day after the Department of Justice ("DOJ") and European Commission conducted office raids ("the raids") of multiple airline carriers' offices around the world for participating in an alleged price-fixing conspiracy. Id. Because of the extensive press coverage of the raids, Qantas argues, Schenker was on notice of its potential violations. Id. at 1, 4, 16. Qantas acknowledges that it was not one of the airlines raided on February 14, 2006. Id. at 2.
Qantas further argues that Schenker cannot resort to fraudulent concealment (which would toll the statute of limitations) beyond February 15, 2006 because it became known at that time that the various fuel indices published and used by multiple defendants (other than Qantas) were likely artificial, and that the defendants had been using the same fuel indices. Id. at 10-11. By running the statute of limitations from that date, Qantas asserts that Schenker's complaint was filed 68 days after the statute of limitations expired.
In the days that followed the raids, multiple class action complaints asserting claims under the Sherman Act were filed against certain air cargo carriers. Id. at 3. The first complaints were filed on February 17, 2006, three days after the raids took place. Id. These initial complaints named at least 16 separate air cargo carriers based in 14 different countries as defendants. Id. Qantas was not named as a defendant in any of those complaints. Id. On August 17, 2006, Qantas first disclosed that it was under investigation by DOJ for price-fixing. Id. at 20.
Qantas was not named as a defendant in the Air Cargo Class Action until February 8, 2007, nearly a year after the raids, in an amended complaint. Id. at 3. Nine months later, on November 27, 2007, the DOJ announced that Qantas would plead guilty to certain antitrust violations. Id. As mentioned above, Qantas's guilty plea was entered on January 14, 2008. Id. The plea encompassed activities by Qantas from January 1, 2000, to February 14, 2006 and did not reference any activity in furtherance of the conspiracy beyond February 14, 2006, the day of the raids. Id.
In evaluating a motion to dismiss, I must accept the factual allegations in the complaint as true, and determine whether they "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The plausibility standard applies to motions to dismiss based on statutes of limitations. See, e.g., George v. Strayhorn, No. 11-CV-3701 (PAC), 2014 WL 1259613, at *2 (S.D.N.Y. Mar. 24, 2014). A motion to dismiss based on the statute of limitations may be granted only if "there is no factual question as to whether the alleged violations occurred within the statutory period[.]" Clement v. United Homes, LLC, 914 F.Supp.2d 362, 369 (E.D.N.Y.2012) (citation omitted) (emphasis added). I also must accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff and liberally construe the complaint. See Roth v. Jennings, 489 F.3d 499, 510 (2d Cir.2007) (citation omitted).
Dismissal based on a statute of limitations is appropriate when "it is clear from the face of the complaint, and matters of which the court may take judicial notice, that the plaintiff's claims are barred as a matter of law."
In deciding when the statute of limitations began to run, a district court may consider publicly available documents that are offered solely for purpose of showing that the alleged information was publicly available. Staehr, 547 F.3d at 426. Here,
"Inquiry notice may be found as a matter of law only when uncontroverted evidence clearly demonstrates when the plaintiff should have discovered the fraudulent conduct." Id. at 427 (citation omitted). To determine whether Schenker was on inquiry notice, I must evaluate whether the "totality of the circumstances," including public media reports, revealed probable illegal activity by Qantas. Hinds County, Miss. v. Wachovia Bank, N.A., 885 F.Supp.2d 617, 627 (S.D.N.Y.2012). The news sources (ECF Nos. 39-1, 2, 7-20) submitted by Qantas do not conclusively establish that Schenker was on inquiry notice of Qantas's involvement in the conspiracy. Three articles are post-raid articles that do not name Qantas; six are pre-raid articles that discuss increased surcharges or the fuel index but do not mention a potential conspiracy or Qantas; four mention Qantas and the surcharges but make no allegation of a conspiracy; two discuss a potential conspiracy but do not name Qantas.
Qantas's motion to dismiss is based on the disputed factual contention that Schenker's claim accrued no later than
As a preliminary matter, Qantas concedes that the statute of limitations was tolled from February 8, 2007, the date Qantas was named as a defendant in the Air Cargo Class Action complaint, until May 24, 2011, the date on which Schenker opted out of Qantas's settlement with the class. See Def. Br. 6. Thus, the question here is when the statute of limitations began to run. Qantas argues that it began to run on the date of the raids on air carriers (February 15, 2006), making Schenker's August 7, 2014 filing of the complaint 68 days late. See Def. Br. 7 n. 17.
Quantas argues that Schenker has failed to adequately plead fraudulent concealment past February 15, 2006, which would have tolled the statute of limitations. See New York v. Hendrickson Bros., 840 F.2d 1065, 1083 (2d Cir.1988) (the statute of limitations for an antitrust violation is tolled if plaintiff can show fraudulent concealment). "[T]he purpose of the fraudulent-concealment doctrine is to prevent a defendant from concealing a fraud, or ... committing a fraud in a manner that it concealed itself until such time as the party committing the fraud could plead the statute of limitations to protect it." Id. (citing Bailey v. Glover, 88 U.S. (21 Wall.) 342, 349, 22 L.Ed. 636 (1874) (internal quotations omitted)).
Schenker, on the other hand, argues that Qantas's and its co-conspirators' involvement in the conspiracy was fraudulently concealed until August 2006, when Qantas was publicly identified as a member of the conspiracy.
At the Rule 12(b)(6) stage, "a plaintiff need only plead fraudulent concealment, as opposed to affirmatively proving it." Precision Assocs., Inc. v. Panalpina World Transp. (Holding) Ltd., No. 08-CV-42 (JG)(VVP), 2011 WL 7053807, at *50 (E.D.N.Y. Jan. 4, 2011), adopted No. 08-CV-42 (JG)(VVP), 2012 WL 3307486 (E.D.N.Y. Aug. 13, 2012) (citation omitted). In alleging fraud, the plaintiff "must state with particularity the circumstances constituting fraud or mistake." Benchmark Export Servs. v. China Airlines Ltd., No. 06-MDL-1775 (JG)(VVP), 2010 WL 10947344, at *19 (E.D.N.Y. Sept. 22, 2010), adopted No. 10-CV-639 (JG)(VVP) (E.D.N.Y. Nov. 1, 2010) (citation omitted).
The first prong requires Schenker to show either that Qantas "took affirmative steps to prevent [the plaintiff's] discovery of the conspiracy, or that the conspiracy itself was inherently self-concealing." In re Nine West Shoes Antitrust Litig., 80 F.Supp.2d 181, 192
Schenker must also plead that it was unaware of its claims until after April 26, 2006, four years (after tolling is taken into account) before it filed its complaint. Qantas argues that because Schenker's complaint states that it "did not discover and could not have discovered ... the existence of the conspiracy alleged [in the complaint] until February 2006 at the earliest[,]" Compl. ¶ 191, Schenker is barred from asserting that it was ignorant of its claims past this date. While the complaint states that February 2006 is when the DOJ investigations became public, it does not admit that Schenker actually knew of its claims at that time, but rather that it would have been the earliest time possible that it could have learned of its claims. As discussed above, Schenker has pleaded that it was incapable of uncovering the conspiracy due to Qantas's and its co-conspirators' deceptive practices and secret efforts to conceal the price-fixing conspiracy. Id. ¶¶ 204-09. Schenker also pleaded that the increased fuel-surcharge remained in place through approximately mid-October 2006, and that Schenker continued to pay the inflated prices during this period — permitting the inference that it did not suspect Qantas was involved in the conspiracy. See id. ¶ 144. I do not find any factual allegations in the complaint that undermine Schenker's claim that it lacked knowledge of its potential antitrust claim that allow me to conclude, as a matter of law, that it had knowledge of Qantas's violations. See DPWN Holdings (USA), Inc. v. United Air Lines, Inc., No. 11-CV-564 (JG), 2014 WL 5394950, at *2 (E.D.N.Y. Sept. 16, 2014) (denying motion to dismiss and reserving determination of plaintiff's knowledge of anti-trust claim for summary judgment stage).
Qantas cites this Court's opinion in Benchmark for the proposition that the raids and investigations raised a "red flag" and should have triggered some inquiries on Schenker's part. See Def. Br. 11 (citing Benchmark, 2010 WL 10947344 at *18). Benchmark, however, found that parallel conduct (specifically, the announcement of the surcharge increases), was not enough to trigger the duty to inquire. 2010 WL 10947344 at *18 (citations omitted). While the February 2006 investigations of other airline carriers might be a bigger red flag than the parallel conduct in Benchmark, it cannot be said as a matter of law that they triggered the duty to inquire as to the potential involvement of an airline carrier that was not under DOJ investigation at the time. See id. (citations omitted).
In sum, Schenker has alleged a fraudulent concealment with enough particularity to withstand the motion to dismiss.
Even if Schenker had not adequately pleaded fraudulent concealment, the complaint includes sufficient allegations to establish a continuing conspiracy past February 15, 2006. "A continuing conspiracy or continuing violation occurs when `the violator's actions consist not only of some definitive act in violation of the antitrust laws, but also of a series of subsequent acts that cause further injury to the plaintiff.'" Benchmark, 2010 WL 10947344 at *13 (citation omitted). A continuing violation in a price-fixing conspiracy is one "that brings about a series of unlawfully high priced sales over a period of years, [and] each overt act that is part of the violation and that injures the plaintiff, e.g., each sale to the plaintiff, starts the statutory period running again, regardless of the plaintiff's knowledge of the alleged illegality at much earlier times."
The continuing violation exception only allows Schenker to recover for injuries that occurred within the limitations periods for the subsequent overt acts. See Klehr, 521 U.S. at 189, 117 S.Ct. 1984; Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971) ("[E]ach time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act."). But I need not address the issue of recoverable damages before April 24, 2006 because, as discussed above, Schenker has alleged that Qantas fraudulently concealed the conspiracy until at least August 17, 2006 (the date it announced it was under investigation by the DOJ), tolling the statute of limitations until that time.
For the reasons stated above, the motion to take judicial notice of Qantas's submissions is granted, and the motion to dismiss the complaint is denied. I need not address Schenker's contentions that the motions should also be denied based on the relation back of the class action complaint naming Qantas as a defendant to the original class action complaint, and because tolling is suspended under 15 U.S.C. § 16(i).
So ordered.