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Rail shippers' fuel surcharge-fixing suits now a class action case; Class Is claim case is 'unfounded'


Yesterday, law firm Quinn Emanuel Urquhart & Sullivan L.L.P. announced that a U.S. district judge granted class certification to lawsuits alleging that four U.S. Class Is conspired to fix fuel surcharges and prices. The defendants are BNSF Railway Co., CSX Transportation, Norfolk Southern Railway and Union Pacific Railroad.
The class action suit includes all direct purchasers of rate-unregulated freight-rail services and addresses fuel surcharges that were applied from mid-2003 until 2008. The original lawsuits were filed in 2007; eight shippers are named plaintiffs in the case.

The plaintiffs allege that the railroads conspired to fix, raise, maintain or stabilize their rates by adding fuel surcharges to bills. They also claim the Class Is fixed the prices of the fuel surcharges, which bore no direct relationship to their actual fuel cost increases. As a result, the railroads restrained competition in the market for unregulated freight-rail services and realized billions of dollars in excess revenues, Quinn Emanuel Urquhart & Sullivan officials said in a prepared statement.

UP officials deny the plaintiffs’ allegations — as they have since the suits were first filed in 2007 — and intend to continue vigorously defending against the “unfounded claims,” said UP spokesman Tom Lange in an email.

“We look forward to presenting facts showing that our independent fuel surcharge programs did not violate any antitrust laws,” he said.

Although the district court decided the case can continue as a class action suit, the court did not find that the plaintiffs’ allegations are true, said Lange. The ruling addresses only the preliminary procedural question of whether the case can proceed as a class action on behalf of a group of plaintiffs, he added.  

“This ruling did not determine that Union Pacific in any way violated the law or did anything wrong. Based upon our initial review, Union Pacific expects to petition the U.S. Court of Appeals for the District of Columbia to review the district court’s decision,” said Lange.

CSXT officials agree that their fuel surcharge practices have always fully complied with the law.

“We will continue to vigorously defend this litigation. Our attorneys are reviewing the court’s opinion, and we will decide promptly on an appeal,” CSXT officials said in an email.

Contact Progressive Railroading editorial staff.

More News from 6/22/2012