Bankrupt Marianas Southern Airways sued for antitrust violations

Marianas Southern Airways, which left the Commonwealth of the Northern Mariana Islands (CNMI) in March 2023, was sued in federal court by then-competitor Star Marianas Air Inc. for violating the U.S. Sherman Antitrust Act.

The Sherman Antitrust Act of 1890 is a federal law prohibiting acts in restraint of interstate commerce and competition in the marketplace. It prohibits any agreement, conspiracy, or combination of business interests to restrain foreign or interstate commerce.

Star Marianas, through attorneys Richard Richards and Mark Scoggins, filed a lawsuit against Marianas Southern Airways and its president in U.S. District Court on behalf of CNMI last week.

In addition to Marianas Southern Airways, Star Marianas also named Southern Airways Express LLC and Marianas Pacific Express LLC as defendants.

Star Marianas filed six counts of Sherman Act violations against Marianas Southern Airways under an $8 million sole source agreement entered into between the airline and the CNMI government during the previous administration.

In relief, Star Marianas asks the District Court to restrain the defendants from entering into similar agreements that unjustly restrict competition and create a “conspiracy to monopolize the CNMI airline industry.”

Star Marianas also wants the court to award them damages in an amount to be determined at the hearing, as well as other relief that the court deems just and appropriate.

According to the lawsuit, on March 21, 2022, Marianas Southern Airways entered into a sole-source financing agreement with the CNMI government to receive $8 million in federal funds through the American Rescue Plan Act.