Class action thrown out in suit against 4 largest U.S. railroad companies

The suit containing more than 30,000 shippers alleges the four companies colluded to fix prices

The four largest U.S. railroad companies are breathing a momentary sigh of relief after an appeals court reversed a lower court’s decision to allow a price-fixing lawsuit by shippers to proceed as a class action lawsuit.

Union Pacific Corp., Burlington Northern Santa Fe, CSX Corp. and Norfolk Southern Corp. faced potential damages of at least $100 billion. A class of about 30,000 shippers alleges in the suit that the four operators colluded at a 2003 meeting to impose a surcharge tied to total transportation costs rather than to actual fuel prices during a 3 1/2-year period.

A three-judge panel at the D.C. Circuit sent the lawsuit back to a lower court on Friday in light of a recent Supreme Court ruling on class certification. The panel also said the lower court used a flawed model for determining potential harm to shippers.

According to Judge Janice Rogers Brown, the recent Supreme Court ruling commands "a hard look at the soundness of statistical models," something the trial court "never grappled with."

“While this obviously was not our preferred outcome, we are gratified that the case was remanded,” Stephen Neuwirth, of Quinn Emmanuel Urquhart & Sullivan, co-lead counsel for the shippers, told Bloomberg. “We are confident that we will be able to demonstrate that the damages model in fact satisfies the highest standards that have been set by the courts, and that ultimately the case will move forward as a class action.”

Tom Lange, a spokesman for Union Pacific, said in a statement that the company is “pleased with the court’s decision and looks forward to the opportunity to reaffirm that Union Pacific’s fuel surcharge program complied with the applicable legal requirements.”

 

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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