Koch Brother Will Have to Produce Records for Railroads

WASHINGTON (CN) — In a win for two railroad giants accused of collusion by billionaire William Koch’s coal company, a federal judge ordered Koch to produce records, rejecting the argument that doing so would be costly and irrelevant.

Koch’s Oxbow Carbon & Minerals and four related Oxbow coal and petroleum coke companies accused Union Pacific Railroad and BNSF Railway Company of anti-competitive conduct in June 2011.

Oxbow claims that Union Pacific monopolized at least one region of the United States, and that both rail companies gouged consumers with high rates, violating the Sherman Antitrust Act.

Oxbow seeks $50 million in damages for illegal fuel surcharges from 2004 to 2012.

The railroads asked the court to compel Bill Koch, the founder, CEO and principal owner of Oxbow, produce records to be searched for information in discovery.

The railroads say that Koch’s records contain information that could reveal that market forces — not collusion — contributed to the increasing rail freight costs and Oxbow’s lost profits.

They also say that it’s fair to make Oxbow spend the money to retrieve Koch’s records, given that Oxbow is demanding tens of millions of dollars in damages.

Oxbow said the requested production of documents would be “disproportionately burdensome.” It originally estimated the cost to do so would be $250,000.

But after retrieving a sample of Koch’s records for the court, it was found that it would cost “significantly less” — $142,000, according to U.S. Magistrate Judge G. Michael Harvey’s Monday order.

“Oxbow objects to defendants’ request that it be compelled to review and produce discovery from Koch’s remaining documents because doing so would be unduly burdensome and because the benefit to defendants would not justify that effort and expense,” Harvey wrote.

He found that though the cost of reviewing and producing Koch’s records is high, it is not unreasonably high enough to warrant rejecting the request.

He ordered Oxbow to produce the records at its own expense.

“Given the very substantial amount of damages that Oxbow seeks to recover in this case, its cost of complying with the discovery request to produce information relevant to defendants’ defense of Oxbow’s claims does not strike the undersigned as excessive,” the judge wrote.

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