Regulators say railroad talks can be included in lawsuits

From The Associated Press

Federal regulators say the nation’s four largest railroads shouldn’t be able to exclude all the details of their conversations from a lawsuit challenging the way they set rates in the past.

Dozens of major companies filed lawsuits last year against Union Pacific, BNSF, CSX and Norfolk Southern railroads. The lawsuits say the railroads conspired to boost prices starting in 2003 by imposing coordinated fuel surcharges and pocketing billions of dollars in profits.

The price-fixing allegations have been making their way through U.S. courts for years, with several companies filing similar lawsuits in 2007.

Attorneys then sought class-action status on behalf of 16,000 shippers against the four railroads, but last year a U.S. appellate judge said the cases would have to be brought individually or broken down into groups of similar shippers with similar situations.

In the lawsuits, the railroads have generally contended that fuel surcharges are common across the transportation industry, that they were legal and simply intended to recover the skyrocketing cost of fuel at the time. They also argue that an obscure law that allows railroads to discuss rates on shipments that cross multiple railroads protects the conversations they had about the fuel surcharges in this case.

The U.S. Justice Department said in a brief filed Monday that railroad discussions about rates for all traffic shouldn’t be excluded. The Justice Department said applying the law broadly, as the railroads argued, “would exclude critical evidence of antitrust violations.”

The companies that filed the lawsuits — which include carmakers like Hyundai, a variety of manufacturers such as Campbell Soup and power companies like Dominion Energy — say the four railroads had meetings, phone calls and email communications through which they embarked on the conspiracy to apply the fuel surcharges all traffic to generate profits.

The plaintiffs argue that the majority of what the railroads discussed at joint meetings had nothing to do with shipments that are handled by more then one railroad, so they shouldn’t be excluded from the case.

A federal judge will decide later what evidence from those meetings will be included in the lawsuit.

Congress largely deregulated railroads in 1980. Over the next several years, railway companies consolidated, eventually leading to the four big railroad shippers — BNSF and Union Pacific serving much of the West and CSX and Norfolk Southern in the East.

Though the companies are individual entities, they are legally allowed to work together to some degree to ensure the continuity of the nation’s railroad network.

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