Monday, August 12, 2013

U.S. Appeals Court reverses Class I price-fixing decision

Written by  William C. Vantuono, Editor-in-Chief
Union Pacific Corp., CSX Corp., Norfolk Southern Corp., and Burlington Northern Santa Fe (a unit of Berkshire Hathaway Inc.) have won their bid to reverse a ruling that turned a price-fixing lawsuit against them into a class action with potential damages of at least $10 billion.

A three-judge panel of the U.S. Court of Appeals in Washington on Friday, Aug. 9 threw out a decision by a lower-court judge who last year certified a class of about 30,000 shippers in a case against the four Class I railroads.

“The lower court underestimated the potential harm to railroads, and the method for calculating prospective damages was flawed,” said Circuit Judge Janice Rogers Brown in writing for the panel. “Because of the pressure to settle posed by the threat to the defendants’ market capitalization, and the identified defect in the damages model, we grant the defendants’ interlocutory appeal.”

The decision makes clear, however, that the case can proceed with individual litigants.

The case is In re Rail Freight Fuel Surcharge Antitrust Litigation, 12-07085, U.S. Court of Appeals, District of Columbia (Washington).