Class Certification Deals Blow to Railroads

(CN) - A lawsuit alleging that four major freight railroads in the U.S. conspired to fix fuel surcharges, illegally charging their customers billions of dollars, can move forward as a class, a federal judge ruled.

In 2007, the Olin Corporation and seven other companies suedBNSF Railway Company, Union Pacific Railroad Company, CSX Transportation, and Norfolk Southern Railway Company.

The plaintiffs claimed that the four railroads, which control more than 90 percent of rail freight shipments in the United States, conspired at industry meetings to fix fuel surcharges as a percentage of overall transportation costs, rather than linking the charges to actual fuel prices, over a four year period.

U.S. District Judge Paul Friedman granted class certification and defined the class as, "All entities or persons that at any time from July 1, 2003 until December 31, 2008 (the 'Class Period') purchased rate-unregulated rail freight transportation services directly from one or more of the Defendants, as to which Defendants assessed a stand-alone rail freight fuel surcharge applied as a percentage of the base rate for the freight transport (or where some or all of the fuel surcharge was included in the base rate through a method referred to as 'rebasing')."

The opinion accompanying his order will remain under seal until July 10, 2012, to allow the parties to request redactions.

According to Business Week, the stock prices of the defendants fell one to three percent in response to the judge's decision.

The court appointed Quinn Emanuel Urquhart & Sullivan and Hausfeld LLP as co-lead counsel for the class.

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