Lawyers representing shippers in a lawsuit involving four Class I railroads praised a decision by the Federal Court of Appeals this week that clarified what evidence could be presented in two cases involving alleged price fixations in the early 2000s.
Stephen Neuwirth, a lawyer for Quinn Emanuel Urqhuart & Sullivan, said in a statement that “the opinion will greatly help shippers in disposing of their antitrust case against the railways.”
Dozens of global companies representing chemical, automotive and energy interests, among others, have been involved in lawsuits for more than a decade with Union Pacific (NYSE: UNP), BNSF (NYSE: BRK.B), Norfolk Southern (NYSE: NSC) ) and CSX (NASDAQ: CSX) in connection with allegations of conspiracy of four railroads to set fuel charges levied on customers when setting tariffs for inter-line traffic. These actions, which took place between 2003 and 2008, violated antitrust law, – say shippers. The senders also claim that fuel fees and the fuel cost recovery program were efforts to generate additional revenue.
But four railroad workers claim that their discussions among themselves about interline tariffs are exempt from antitrust law, according to provisions in the U.S. Code. Existing laws allow railways to cooperate with each other on issues of joint inter-line traffic.
The three-judge panel of the U.S. District Court of Appeals in the District of Columbia decided on Tuesday to approve part preliminary decision U.S. District Court Judge Paul A. Friedman, sending Friedman other parts to review the evidence in light of the appellate court’s decision.
Tuesday’s decision clarifies which railroad discussions can be included and which can be excluded in two simultaneous lawsuits, with the railroad bearing the burden to show why the debate should be excluded.
The decision of the Court of Appeal, written by Judge Harry T. Edwards, confirms the railroaders’ argument that some internal documents may be inadmissible. Inter-line movement documents that include fleeting references to single-line movements may be excluded from the court record.
General discussions or agreements concerning joint interline traffic may also be excluded as long as the discussions meet the requirements of the statute and the courts may define these movements as general interline traffic of carriers, the decision said.
Shippers were generally satisfied with the results, saying the appellate court “largely upheld” the lower court’s opinion.
“The court rejected the railroaders’ strong argument that this evidentiary exception applies to their discussion of something that has “practical relevance” to their joint inter-line traffic. … Instead, the court read the statute as narrowly limited to discussions or agreements on “joint inter-line services involved in transport”, which means that rail shippers will be free to provide evidence of discussions or agreements of railways to coordinate fuel charges on their “single” or their “freight traffic in general,” Neuwirth said.
Both hearings, one before Friedman and the other before Judge Beryl A. Howell in the U.S. District Court in the District of Columbia, still have to go through a simplified court decision before going to court.
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https://www.freightwaves.com/news/rail-shippers-applaud-federal-appeals-court-ruling-on-alleged-price-fixing
