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Shippers’ railroad price-fixing suit gets class-action status

Keywords: Tags  Railroad, price-fixing allegations, fuel surcharges, Olin, U.S. Magnesium, Stephen Neuwirth, Norfolk Southern, CSX Union Pacific

CHICAGO — After five years of legal wrangling, eight shippers who allege that major U.S. freight railroads engaged in a price-fixing conspiracy via rail fuel surcharges have got the case certified as a class-action complaint.

Under the ruling in U.S. District Court for the District of Columbia, additional shippers will be able to seek restitution should the lawsuit be decided in the plaintiffs’ favor.

The eight plaintiffs in the case include Clayton, Mo.-based copper alloy producer Olin Corp. and Salt Lake City-based U.S. Magnesium LLC. The defendants are Forth Worth, Texas-based BNSF Railway Co., Jacksonville, Fla.-based CSX Transportation Inc., Norfolk, Va.-based Norfolk Southern Corp. and Omaha, Neb.-based Union Pacific Railroad.

Stephen Neuwirth, one of the co-lead counsels representing the plaintiffs, said that together the four railroads control nearly 90 percent of railroad freight traffic in the United States.

From mid-2003 until 2008, railroad freight shippers across the nation were "subjected to an endless string of rate increases by railroads made possible by a concentrated market structure, tight capacity and coordinated pricing," Neuwirth alleged. "This harmed both the shippers and American consumers, who had to foot the bill for these excessive fuel surcharges."

In their original complaint, the shippers alleged that the railroads conspired to fix, raise, maintain or stabilize prices of rail freight transportation services sold in the United States through the use of rail fuel surcharges added to customers’ bills. They claimed the railroads moved in lockstep to fix the fuel surcharges, which were unrelated to fuel cost increases.

The defendants’ counsel could not be reached for comment.

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