The U.S. Court of Appeals in Washington today reversed a ruling that turned a price-fixing lawsuit against four U.S.-based Class I railroads into a class action.
The three-judge panel said the lower court’s decision to grant the lawsuit against BNSF Railway, Union Pacific Railroad, Norfolk Southern Railway and CSX Transportation didn’t fully consider the potential harm to the railroads, Circuit Judge Janice Rogers Brown wrote in the opinion filing. The four railroads face damages of $10 billion or more in a case that could involve about 30,000 shippers. The appeals court also ruled that the method of calculating potential damages was flawed.
The court remanded the case to a federal district court in Washington to reconsider the class certification decision in light of the recent Supreme Court ruling on Comcast Corp. v. Behrend. The 2013 court decision tightened the requirements for class certification.
“While this obviously was not our preferred outcome, we are gratified that the case was remanded. We are confident that we will be able to demonstrate that the damages model in fact satisfies the highest standards that have been set by the courts, and that ultimately the case will move forward as a class action,” said Stephen R. Neuwirth, co-lead counsel for the plaintiffs.
U.S. District Court for the District of Columbia Judge Paul Freidman in June 2012 granted class certification to the lawsuit brought by shippers Olin, US Magnesium, Dust Pro, Carter Distribution, Dakota Granite, Donnelly Commodities, Nyrstar Taylor Chemicals and Strates Shows. The lawsuit, which began as several lawsuits first filed in 2007, accuses the railroads of conspiring to fix, raise, maintain or stabilize prices from mid-2003 until 2008. The railroad in July 2012 appealed the decision, arguing no wrongdoing has been proved and they could receive “unwarranted pressure” to settle.