Railroads Step Up Against Lawsuit (Price Fixing)

Do Class I's fix prices? Is it possible w. truck competition? Does this lawsuit stand a chance?

Railroads Step Up Against Class Action Lawsuit

Four major U.S. railroads — Union Pacific Corporation (UNP - Analyst Report), Norfolk Southern Corp. (NSC - Analyst Report), CSX Corporation (CSX - Analyst Report) and Burlington Northern Santa Fe — have appealed against the class one action after the District of Columbia court granted class action status to a price fixing lawsuit.

The U.S. district judge, Paul Friedman of the DC court, brought forward the case of eight shipping companies that accused these railroads of imposing a series of price increases between 2003 and 2008.

A class action lawsuit would now imply that the railroads have to defend themselves from collective charges brought by the shippers under Federal Rules of Civil Procedure Rule 23 and 28 U.S.C.A. § 1332(d).

The carriers, which dictate more than 90% of the freight revenues in the industry, have stated that the court decision could cost approximately $10 billion or more in claim settlements, causing a significant financial burden. Lawyers supporting the railroads have argued that the case should be dismissed due to the lack of proper evidence.

I couldn't find any mention of who the plaintiffs are, but at first glance this could be a continuation of efforts of a number of major shippers to re-regulate the railroads. They tried for a number of years to get something through Congress, but without success so far. The main standard bearer was Sen. James Oberstar, who was recently defeated -- either for reelection or renomination, I forget which. It may be that they are now trying to get from the courts what they haven't been able to get from Congress. There are enough people around now who are too young to remember what rail service was like, and what condition the railroads were in, when railroad rates were strictly regulated by the Interstate Commerce Commission.