By Bob Sechler
The four top U.S. railroads have lost a key round in a
long-running legal battle, after a federal judge on Thursday
granted class-action status in a lawsuit alleging they colluded to
inflate fuel surcharges paid by shippers by billions of
dollars.
The railroads--Union Pacific Corp. (UNP), CSX Corp. (CSX),
Norfolk Southern Corp. (NSC) and Burlington Northern Santa Fe--have
vehemently denied the allegations but previously have been
unsuccessful in getting the case dismissed.
CSX spokesman Gary Sease said CSX attorneys are reviewing
Thursday's class-action decision by U.S. District Judge Paul L.
Friedman and will "decide promptly" on whether to appeal it.
Regardless, "CSX's fuel surcharge practices have always fully
complied with the law, and we will continue to vigorously defend
this litigation," he said.
Stephen Neuwirth, an attorney for the plaintiffs, called the
ruling "a very, very important victory in the case and a real
vindication" for the shippers who filed it.
"The railroads illegally conspired to develop and implement this
fuel surcharge program," said Neuwirth, of Quinn Emanuel Urquhart
& Sullivan LLP. "This is a very important step towards enabling
the victims of this conspiracy to be compensated."
Neuwirth declined to estimate the potential damages in the case,
saying an expert study submitted by the plaintiffs remains under
seal.
But the American Chemistry Council, a trade group that includes
many companies that ship products by rail, previously has contended
that the top four railroads and Kansas City Southern (KSU)
overcharged shippers by $6.4 billion through fuel surcharges
between 2003 and early 2007.
Named plaintiffs in the case include eight shippers, but
Thursday's class-action ruling means any shipper that purchased
unregulated freight transportation services from one of the
defendant railroads from July 1, 2003, through 2008 is a member of
it.
-Write to Bob Sechler at bob.sechler@dowjones.com